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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1955 Reported in Senate (RS)]

                                                       Calendar No. 417
109th CONGRESS
  2d 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, Mr. Burns, Mr. Burr, Mr. 
    Roberts, Mr. Craig, Mr. Allard, and Mr. Cornyn) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

                             April 27, 2006

                Reported by Mr. Enzi, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 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.

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

<DELETED>SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the ``Health 
Insurance Marketplace Modernization and Affordability Act of 
2005''.</DELETED>
<DELETED>    (b) Table of Contents.--The table of contents is as 
follows:</DELETED>

<DELETED>Sec. 1. Short title and table of contents.
             <DELETED>TITLE I--SMALL BUSINESS HEALTH PLANS

<DELETED>Sec. 101. Rules governing small business health plans.
<DELETED>Sec. 102. Cooperation between Federal and State authorities.
<DELETED>Sec. 103. Effective date and transitional and other rules.
               <DELETED>TITLE II--NEAR-TERM MARKET RELIEF

<DELETED>Sec. 201. Near-term market relief.
       <DELETED>TITLE III--HARMONIZATION OF HEALTH INSURANCE LAWS

<DELETED>Sec. 301. Health Insurance Regulatory Harmonization.

        <DELETED>TITLE I--SMALL BUSINESS HEALTH PLANS</DELETED>

<DELETED>SEC. 101. RULES GOVERNING SMALL BUSINESS HEALTH 
              PLANS.</DELETED>

<DELETED>    (a) In General.--Subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended by adding after part 
7 the following new part:</DELETED>

       <DELETED>``PART 8--RULES GOVERNING SMALL BUSINESS HEALTH 
                            PLANS</DELETED>

<DELETED>``SEC. 801. SMALL BUSINESS HEALTH PLANS.</DELETED>

<DELETED>    ``(a) In General.--For purposes of this part, the term 
`small business health plan' means a fully insured group health plan 
whose sponsor is (or is deemed under this part to be) described in 
subsection (b).</DELETED>
<DELETED>    ``(b) Sponsorship.--The sponsor of a group health plan is 
described in this subsection if such sponsor--</DELETED>
        <DELETED>    ``(1) is organized and maintained in good faith, 
        with a constitution and bylaws specifically stating its purpose 
        and providing for periodic meetings on at least an annual 
        basis, as a bona fide trade association, a bona fide industry 
        association (including a rural electric cooperative association 
        or a rural telephone cooperative association), a bona fide 
        professional association, or a bona fide chamber of commerce 
        (or similar bona fide business association, including a 
        corporation or similar organization that operates on a 
        cooperative basis (within the meaning of section 1381 of the 
        Internal Revenue Code of 1986)), for substantial purposes other 
        than that of obtaining or providing medical care;</DELETED>
        <DELETED>    ``(2) is established as a permanent entity which 
        receives the active support of its members and requires for 
        membership payment on a periodic basis of dues or payments 
        necessary to maintain eligibility for membership in the 
        sponsor; and</DELETED>
        <DELETED>    ``(3) does not condition membership, such dues or 
        payments, or coverage under the plan on the basis of health 
        status-related factors with respect to the employees of its 
        members (or affiliated members), or the dependents of such 
        employees, and does not condition such dues or payments on the 
        basis of group health plan participation.</DELETED>
<DELETED>Any sponsor consisting of an association of entities which 
meet the requirements of paragraphs (1), (2), and (3) shall be deemed 
to be a sponsor described in this subsection.</DELETED>

<DELETED>``SEC. 802. CERTIFICATION OF SMALL BUSINESS HEALTH 
              PLANS.</DELETED>

<DELETED>    ``(a) In General.--Not later than 6 months after the date 
of enactment of this part, the applicable authority shall prescribe by 
interim final rule a procedure under which the applicable authority 
shall certify small business health plans which apply for certification 
as meeting the requirements of this part.</DELETED>
<DELETED>    ``(b) Requirements Applicable to Certified Plans.--a small 
business health plan with respect to which certification under this 
part is in effect shall meet the applicable requirements of this part, 
effective on the date of certification (or, if later, on the date on 
which the plan is to commence operations).</DELETED>
<DELETED>    ``(c) Requirements for Continued Certification.--The 
applicable authority may provide by regulation for continued 
certification of small business health plans under this part. Such 
regulation shall provide for the revocation of a certification if the 
applicable authority finds that the small employer health plan involved 
is failing to comply with the requirements of this part.</DELETED>
<DELETED>    ``(d) Class Certification for Fully Insured Plans.--The 
applicable authority shall establish a class certification procedure 
for small business health plans under which all benefits consist of 
health insurance coverage. Under such procedure, the applicable 
authority shall provide for the granting of certification under this 
part to the plans in each class of such small business health plans 
upon appropriate filing under such procedure in connection with plans 
in such class and payment of the prescribed fee under section 
806(a).</DELETED>

<DELETED>``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF 
              TRUSTEES.</DELETED>

<DELETED>    ``(a) Sponsor.--The requirements of this subsection are 
met with respect to a small business health plan if the sponsor has met 
(or is deemed under this part to have met) the requirements of section 
801(b) for a continuous period of not less than 3 years ending with the 
date of the application for certification under this part.</DELETED>
<DELETED>    ``(b) Board of Trustees.--The requirements of this 
subsection are met with respect to a small business health plan if the 
following requirements are met:</DELETED>
        <DELETED>    ``(1) Fiscal control.--The plan is operated, 
        pursuant to a plan document, by a board of trustees which 
        pursuant to a trust agreement has complete fiscal control over 
        the plan and which is responsible for all operations of the 
        plan.</DELETED>
        <DELETED>    ``(2) Rules of operation and financial controls.--
        The board of trustees has in effect rules of operation and 
        financial controls, based on a 3-year plan of operation, 
        adequate to carry out the terms of the plan and to meet all 
        requirements of this title applicable to the plan.</DELETED>
        <DELETED>    ``(3) Rules governing relationship to 
        participating employers and to contractors.--</DELETED>
                <DELETED>    ``(A) Board membership.--</DELETED>
                        <DELETED>    ``(i) In general.--Except as 
                        provided in clauses (ii) and (iii), the members 
                        of the board of trustees are individuals 
                        selected from individuals who are the owners, 
                        officers, directors, or employees of the 
                        participating employers or who are partners in 
                        the participating employers and actively 
                        participate in the business.</DELETED>
                        <DELETED>    ``(ii) Limitation.--</DELETED>
                                <DELETED>    ``(I) General rule.--
                                Except as provided in subclauses (II) 
                                and (III), no such member is an owner, 
                                officer, director, or employee of, or 
                                partner in, a contract administrator or 
                                other service provider to the 
                                plan.</DELETED>
                                <DELETED>    ``(II) Limited exception 
                                for providers of services solely on 
                                behalf of the sponsor.--Officers or 
                                employees of a sponsor which is a 
                                service provider (other than a contract 
                                administrator) to the plan may be 
                                members of the board if they constitute 
                                not more than 25 percent of the 
                                membership of the board and they do not 
                                provide services to the plan other than 
                                on behalf of the sponsor.</DELETED>
                                <DELETED>    ``(III) Treatment of 
                                providers of medical care.--In the case 
                                of a sponsor which is an association 
                                whose membership consists primarily of 
                                providers of medical care, subclause 
                                (I) shall not apply in the case of any 
                                service provider described in subclause 
                                (I) who is a provider of medical care 
                                under the plan.</DELETED>
                        <DELETED>    ``(iii) Certain plans excluded.--
                        Clause (i) shall not apply to a small business 
                        health plan which is in existence on the date 
                        of the enactment of the Health Insurance 
                        Marketplace Modernization and Affordability Act 
                        of 2005.</DELETED>
                <DELETED>    ``(B) Sole authority.--The board has sole 
                authority under the plan to approve applications for 
                participation in the plan and to contract with insurers 
                and service providers.</DELETED>
<DELETED>    ``(c) Treatment of Franchise Networks.--In the case of a 
group health plan which is established and maintained by a franchiser 
for a franchise network consisting of its franchisees--</DELETED>
        <DELETED>    ``(1) the requirements of subsection (a) and 
        section 801(a) shall be deemed met if such requirements would 
        otherwise be met if the franchiser were deemed to be the 
        sponsor referred to in section 801(b), such network were deemed 
        to be an association described in section 801(b), and each 
        franchisee were deemed to be a member (of the association and 
        the sponsor) referred to in section 801(b); and</DELETED>
        <DELETED>    ``(2) the requirements of section 804(a)(1) shall 
        be deemed met.</DELETED>
<DELETED>The Secretary may by regulation define for purposes of this 
subsection the terms `franchiser', `franchise network', and 
`franchisee'.</DELETED>

<DELETED>``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.</DELETED>

<DELETED>    ``(a) Covered Employers and Individuals.--The requirements 
of this subsection are met with respect to a small business health plan 
if, under the terms of the plan--</DELETED>
        <DELETED>    ``(1) each participating employer must be--
        </DELETED>
                <DELETED>    ``(A) a member of the sponsor;</DELETED>
                <DELETED>    ``(B) the sponsor; or</DELETED>
                <DELETED>    ``(C) an affiliated member of the sponsor 
                with respect to which the requirements of subsection 
                (b) are met, except that, in the case of a sponsor 
                which is a professional association or other 
                individual-based association, if at least one of the 
                officers, directors, or employees of an employer, or at 
                least one of the individuals who are partners in an 
                employer and who actively participates in the business, 
                is a member or such an affiliated member of the 
                sponsor, participating employers may also include such 
                employer; and</DELETED>
        <DELETED>    ``(2) all individuals commencing coverage under 
        the plan after certification under this part must be--
        </DELETED>
                <DELETED>    ``(A) active or retired owners (including 
                self-employed individuals), officers, directors, or 
                employees of, or partners in, participating employers; 
                or</DELETED>
                <DELETED>    ``(B) the beneficiaries of individuals 
                described in subparagraph (A).</DELETED>
<DELETED>    ``(b) Coverage of Previously Uninsured Employees.--In the 
case of a small business health plan in existence on the date of the 
enactment of the Health Insurance Marketplace Modernization and 
Affordability Act of 2005, an affiliated member of the sponsor of the 
plan may be offered coverage under the plan as a participating employer 
only if--</DELETED>
        <DELETED>    ``(1) the affiliated member was an affiliated 
        member on the date of certification under this part; 
        or</DELETED>
        <DELETED>    ``(2) during the 12-month period preceding the 
        date of the offering of such coverage, the affiliated member 
        has not maintained or contributed to a group health plan with 
        respect to any of its employees who would otherwise be eligible 
        to participate in such small business health plan.</DELETED>
<DELETED>    ``(c) Individual Market Unaffected.--The requirements of 
this subsection are met with respect to a small business health plan 
if, under the terms of the plan, no participating employer may provide 
health insurance coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer under the plan, 
if such exclusion of the employee from coverage under the plan is based 
on a health status-related factor with respect to the employee and such 
employee would, but for such exclusion on such basis, be eligible for 
coverage under the plan.</DELETED>
<DELETED>    ``(d) Prohibition of Discrimination Against Employers and 
Employees Eligible to Participate.--The requirements of this subsection 
are met with respect to a small business health plan if--</DELETED>
        <DELETED>    ``(1) under the terms of the plan, all employers 
        meeting the preceding requirements of this section are eligible 
        to qualify as participating employers for all geographically 
        available coverage options, unless, in the case of any such 
        employer, participation or contribution requirements of the 
        type referred to in section 2711 of the Public Health Service 
        Act are not met;</DELETED>
        <DELETED>    ``(2) upon request, any employer eligible to 
        participate is furnished information regarding all coverage 
        options available under the plan; and</DELETED>
        <DELETED>    ``(3) the applicable requirements of sections 701, 
        702, and 703 are met with respect to the plan.</DELETED>

<DELETED>``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, 
              CONTRIBUTION RATES, AND BENEFIT OPTIONS.</DELETED>

<DELETED>    ``(a) In General.--The requirements of this section are 
met with respect to a small business health plan if the following 
requirements are met:</DELETED>
        <DELETED>    ``(1) Contents of governing instruments.--
        </DELETED>
                <DELETED>    ``(A) In general.--The instruments 
                governing the plan include a written instrument, 
                meeting the requirements of an instrument required 
                under section 402(a)(1), which--</DELETED>
                        <DELETED>    ``(i) provides that the board of 
                        directors serves as the named fiduciary 
                        required for plans under section 402(a)(1) and 
                        serves in the capacity of a plan administrator 
                        (referred to in section 3(16)(A)); 
                        and</DELETED>
                        <DELETED>    ``(ii) provides that the sponsor 
                        of the plan is to serve as plan sponsor 
                        (referred to in section 3(16)(B)).</DELETED>
                <DELETED>    ``(B) Description of material 
                provisions.--The terms of the health insurance coverage 
                (including the terms of any individual certificates 
                that may be offered to individuals in connection with 
                such coverage) describe the material benefit and 
                rating, and other provisions set forth in this section 
                and such material provisions are included in the 
                summary plan description.</DELETED>
        <DELETED>    ``(2) Contribution rates must be 
        nondiscriminatory.--</DELETED>
                <DELETED>    ``(A) In general.--The contribution rates 
                for any participating small employer shall not vary on 
                the basis of any health status-related factor in 
                relation to employees of such employer or their 
                beneficiaries and shall not vary on the basis of the 
                type of business or industry in which such employer is 
                engaged.</DELETED>
                <DELETED>    ``(B) Effect of title.--Nothing in this 
                title or any other provision of law shall be construed 
                to preclude a health insurance issuer offering health 
                insurance coverage in connection with a small business 
                health plan, and at the request of such small business 
                health plan, from--</DELETED>
                        <DELETED>    ``(i) setting contribution rates 
                        for the small business health plan based on the 
                        claims experience of the plan so long as any 
                        variation in such rates complies with the 
                        requirements of clause (ii); or</DELETED>
                        <DELETED>    ``(ii) varying contribution rates 
                        for participating employers in a small business 
                        health plan in a State to the extent that such 
                        rates could vary using the same methodology 
                        employed in such State for regulating premium 
                        rates, subject to the terms of part I of 
                        subtitle A of title XXIX of the Public Health 
                        Service Act (relating to rating requirements), 
                        as added by title II of the Health Insurance 
                        Marketplace Modernization and Affordability Act 
                        of 2005.</DELETED>
        <DELETED>    ``(3) Regulatory requirements.--Such other 
        requirements as the applicable authority determines are 
        necessary to carry out the purposes of this part, which shall 
        be prescribed by the applicable authority by 
        regulation.</DELETED>
<DELETED>    ``(b) Ability of Small Business Health Plans to Design 
Benefit Options.--Nothing in this part or any provision of State law 
(as defined in section 514(c)(1)) shall be construed to preclude a 
small business health plan or a health insurance issuer offering health 
insurance coverage in connection with a small business health plan, 
from exercising its sole discretion in selecting the specific benefits 
and services consisting of medical care to be included as benefits 
under such plan or coverage, except that such benefits and services 
must meet the terms and specifications of part II of subtitle A of 
title XXIX of the Public Health Service Act (relating to lower cost 
plans), as added by title II of the Health Insurance Marketplace 
Modernization and Affordability Act of 2005, provided that, upon 
issuance by the Secretary of Health and Human Services of the List of 
Required Benefits as provided for in section 2922(a) of the Public 
Health Service Act, the required scope and application for each benefit 
or service listed in the List of Required Benefits shall be--</DELETED>
        <DELETED>    ``(1) if the domicile State mandates such benefit 
        or service, the scope and application required by the domicile 
        State; or</DELETED>
        <DELETED>    ``(2) if the domicile State does not mandate such 
        benefit or service, the scope and application required by the 
        non-domicile State that does require such benefit or service in 
        which the greatest number of the small business health plan's 
        participating employers are located.</DELETED>
<DELETED>    ``(c) State Licensure and Informational Filing.--
</DELETED>
        <DELETED>    ``(1) Domicile state.--Coverage shall be issued to 
        a small business health plan in the State in which the 
        sponsor's principal place of business is located.</DELETED>
        <DELETED>    ``(2) Non-domicile states.--With respect to a 
        State (other than the domicile State) in which participating 
        employers of a small business health plan are located, an 
        insurer issuing coverage to such small business health plan 
        shall not be required to obtain full licensure in such State, 
        except that the insurer shall provide each State insurance 
        commissioner (or applicable State authority) with an 
        informational filing describing policies sold and other 
        relevant information as may be requested by the applicable 
        State authority.</DELETED>

<DELETED>``SEC. 806. REQUIREMENTS FOR APPLICATION AND RELATED 
              REQUIREMENTS.</DELETED>

<DELETED>    ``(a) Filing Fee.--Under the procedure prescribed pursuant 
to section 802(a), a small business health plan shall pay to the 
applicable authority at the time of filing an application for 
certification under this part a filing fee in the amount of $5,000, 
which shall be available in the case of the Secretary, to the extent 
provided in appropriation Acts, for the sole purpose of administering 
the certification procedures applicable with respect to small business 
health plans.</DELETED>
<DELETED>    ``(b) Information to Be Included in Application for 
Certification.--An application for certification under this part meets 
the requirements of this section only if it includes, in a manner and 
form which shall be prescribed by the applicable authority by 
regulation, at least the following information:</DELETED>
        <DELETED>    ``(1) Identifying information.--The names and 
        addresses of--</DELETED>
                <DELETED>    ``(A) the sponsor; and</DELETED>
                <DELETED>    ``(B) the members of the board of trustees 
                of the plan.</DELETED>
        <DELETED>    ``(2) States in which plan intends to do 
        business.--The States in which participants and beneficiaries 
        under the plan are to be located and the number of them 
        expected to be located in each such State.</DELETED>
        <DELETED>    ``(3) Bonding requirements.--Evidence provided by 
        the board of trustees that the bonding requirements of section 
        412 will be met as of the date of the application or (if later) 
        commencement of operations.</DELETED>
        <DELETED>    ``(4) Plan documents.--A copy of the documents 
        governing the plan (including any bylaws and trust agreements), 
        the summary plan description, and other material describing the 
        benefits that will be provided to participants and 
        beneficiaries under the plan.</DELETED>
        <DELETED>    ``(5) Agreements with service providers.--A copy 
        of any agreements between the plan, health insurance issuer, 
        and contract administrators and other service 
        providers.</DELETED>
<DELETED>    ``(c) Filing Notice of Certification With States.--A 
certification granted under this part to a small business health plan 
shall not be effective unless written notice of such certification is 
filed with the applicable State authority of each State in which at 
least 25 percent of the participants and beneficiaries under the plan 
are located. For purposes of this subsection, an individual shall be 
considered to be located in the State in which a known address of such 
individual is located or in which such individual is 
employed.</DELETED>
<DELETED>    ``(d) Notice of Material Changes.--In the case of any 
small business health plan certified under this part, descriptions of 
material changes in any information which was required to be submitted 
with the application for the certification under this part shall be 
filed in such form and manner as shall be prescribed by the applicable 
authority by regulation. The applicable authority may require by 
regulation prior notice of material changes with respect to specified 
matters which might serve as the basis for suspension or revocation of 
the certification.</DELETED>

<DELETED>``SEC. 807. NOTICE REQUIREMENTS FOR VOLUNTARY 
              TERMINATION.</DELETED>

<DELETED>    ``A small business health plan which is or has been 
certified under this part may terminate (upon or at any time after 
cessation of accruals in benefit liabilities) only if the board of 
trustees, not less than 60 days before the proposed termination date--
</DELETED>
        <DELETED>    ``(1) provides to the participants and 
        beneficiaries a written notice of intent to terminate stating 
        that such termination is intended and the proposed termination 
        date;</DELETED>
        <DELETED>    ``(2) develops a plan for winding up the affairs 
        of the plan in connection with such termination in a manner 
        which will result in timely payment of all benefits for which 
        the plan is obligated; and</DELETED>
        <DELETED>    ``(3) submits such plan in writing to the 
        applicable authority.</DELETED>
<DELETED>Actions required under this section shall be taken in such 
form and manner as may be prescribed by the applicable authority by 
regulation.</DELETED>

<DELETED>``SEC. 808. DEFINITIONS AND RULES OF CONSTRUCTION.</DELETED>

<DELETED>    ``(a) Definitions.--For purposes of this part--</DELETED>
        <DELETED>    ``(1) Affiliated member.--The term `affiliated 
        member' means, in connection with a sponsor--</DELETED>
                <DELETED>    ``(A) a person who is otherwise eligible 
                to be a member of the sponsor but who elects an 
                affiliated status with the sponsor,</DELETED>
                <DELETED>    ``(B) in the case of a sponsor with 
                members which consist of associations, a person who is 
                a member of any such association and elects an 
                affiliated status with the sponsor, or</DELETED>
                <DELETED>    ``(C) in the case of a small business 
                health plan in existence on the date of the enactment 
                of the Health Insurance Marketplace Modernization and 
                Affordability Act of 2005, a person eligible to be a 
                member of the sponsor or one of its member 
                associations.</DELETED>
        <DELETED>    ``(2) Applicable authority.--The term `applicable 
        authority' means the Secretary, except that, in connection with 
        any exercise of the Secretary's authority with respect to which 
        the Secretary is required under section 506(d) to consult with 
        a State, such term means the Secretary, in consultation with 
        such State.</DELETED>
        <DELETED>    ``(3) Applicable state authority.--The term 
        `applicable State authority' means, with respect to a health 
        insurance issuer in a State, the State insurance commissioner 
        or official or officials designated by the State to enforce the 
        requirements of title XXVII of the Public Health Service Act 
        for the State involved with respect to such issuer.</DELETED>
        <DELETED>    ``(4) Group health plan.--The term `group health 
        plan' has the meaning provided in section 733(a)(1) (after 
        applying subsection (b) of this section).</DELETED>
        <DELETED>    ``(5) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided in section 
        733(b)(1).</DELETED>
        <DELETED>    ``(6) Health insurance issuer.--The term `health 
        insurance issuer' has the meaning provided in section 
        733(b)(2).</DELETED>
        <DELETED>    ``(7) Individual market.--</DELETED>
                <DELETED>    ``(A) In general.--The term `individual 
                market' means the market for health insurance coverage 
                offered to individuals other than in connection with a 
                group health plan.</DELETED>
                <DELETED>    ``(B) Treatment of very small groups.--
                </DELETED>
                        <DELETED>    ``(i) In general.--Subject to 
                        clause (ii), such term includes coverage 
                        offered in connection with a group health plan 
                        that has fewer than 2 participants as current 
                        employees or participants described in section 
                        732(d)(3) on the first day of the plan 
                        year.</DELETED>
                        <DELETED>    ``(ii) State exception.--Clause 
                        (i) shall not apply in the case of health 
                        insurance coverage offered in a State if such 
                        State regulates the coverage described in such 
                        clause in the same manner and to the same 
                        extent as coverage in the small group market 
                        (as defined in section 2791(e)(5) of the Public 
                        Health Service Act) is regulated by such 
                        State.</DELETED>
        <DELETED>    ``(8) Medical care.--The term `medical care' has 
        the meaning provided in section 733(a)(2).</DELETED>
        <DELETED>    ``(9) Participating employer.--The term 
        `participating employer' means, in connection with a small 
        business health plan, any employer, if any individual who is an 
        employee of such employer, a partner in such employer, or a 
        self-employed individual who is such employer (or any 
        dependent, as defined under the terms of the plan, of such 
        individual) is or was covered under such plan in connection 
        with the status of such individual as such an employee, 
        partner, or self-employed individual in relation to the 
        plan.</DELETED>
        <DELETED>    ``(10) Small employer.--The term `small employer' 
        means, in connection with a group health plan with respect to a 
        plan year, a small employer as defined in section 
        2791(e)(4).</DELETED>
<DELETED>    ``(b) Rule of Construction.--For purposes of determining 
whether a plan, fund, or program is an employee welfare benefit plan 
which is a small business health plan, and for purposes of applying 
this title in connection with such plan, fund, or program so determined 
to be such an employee welfare benefit plan--</DELETED>
        <DELETED>    ``(1) in the case of a partnership, the term 
        `employer' (as defined in section 3(5)) includes the 
        partnership in relation to the partners, and the term 
        `employee' (as defined in section 3(6)) includes any partner in 
        relation to the partnership; and</DELETED>
        <DELETED>    ``(2) in the case of a self-employed individual, 
        the term `employer' (as defined in section 3(5)) and the term 
        `employee' (as defined in section 3(6)) shall include such 
        individual.''.</DELETED>
<DELETED>    (b) Conforming Amendments to Preemption Rules.--</DELETED>
        <DELETED>    (1) Section 514(b)(6) of such Act (29 U.S.C. 
        1144(b)(6)) is amended by adding at the end the following new 
        subparagraph:</DELETED>
<DELETED>    ``(E) The preceding subparagraphs of this paragraph do not 
apply with respect to any State law in the case of a small business 
health plan which is certified under part 8.''.</DELETED>
        <DELETED>    (2) Section 514 of such Act (29 U.S.C. 1144) is 
        amended--</DELETED>
                <DELETED>    (A) in subsection (b)(4), by striking 
                ``Subsection (a)'' and inserting ``Subsections (a) and 
                (d)'';</DELETED>
                <DELETED>    (B) in subsection (b)(5), by striking 
                ``subsection (a)'' in subparagraph (A) and inserting 
                ``subsection (a) of this section and subsections 
                (a)(2)(B) and (b) of section 805'', and by striking 
                ``subsection (a)'' in subparagraph (B) and inserting 
                ``subsection (a) of this section or subsection 
                (a)(2)(B) or (b) of section 805'';</DELETED>
                <DELETED>    (C) by redesignating subsection (d) as 
                subsection (e); and</DELETED>
                <DELETED>    (D) by inserting after subsection (c) the 
                following new subsection:</DELETED>
<DELETED>    ``(d)(1) Except as provided in subsection (b)(4), the 
provisions of this title shall supersede any and all State laws insofar 
as they may now or hereafter preclude a health insurance issuer from 
offering health insurance coverage in connection with a small business 
health plan which is certified under part 8.</DELETED>
<DELETED>    ``(2) In any case in which health insurance coverage of 
any policy type is offered under a small business health plan certified 
under part 8 to a participating employer operating in such State, the 
provisions of this title shall supersede any and all laws of such State 
insofar as they may establish rating and benefit requirements that 
would otherwise apply to such coverage, provided the requirements of 
section 805(a)(2)(B) and (b) (concerning small business health plan 
rating and benefits) are met.''.</DELETED>
        <DELETED>    (3) Section 514(b)(6)(A) of such Act (29 U.S.C. 
        1144(b)(6)(A)) is amended--</DELETED>
                <DELETED>    (A) in clause (i)(II), by striking ``and'' 
                at the end;</DELETED>
                <DELETED>    (B) in clause (ii), by inserting ``and 
                which does not provide medical care (within the meaning 
                of section 733(a)(2)),'' after ``arrangement,'', and by 
                striking ``title.'' and inserting ``title, and''; 
                and</DELETED>
                <DELETED>    (C) by adding at the end the following new 
                clause:</DELETED>
        <DELETED>    ``(iii) subject to subparagraph (E), in the case 
        of any other employee welfare benefit plan which is a multiple 
        employer welfare arrangement and which provides medical care 
        (within the meaning of section 733(a)(2)), any law of any State 
        which regulates insurance may apply.''.</DELETED>
        <DELETED>    (4) Section 514(e) of such Act (as redesignated by 
        paragraph (2)(C)) is amended by striking ``Nothing'' and 
        inserting ``(1) Except as provided in paragraph (2), 
        nothing''.</DELETED>
<DELETED>    (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
102(16)(B)) is amended by adding at the end the following new sentence: 
``Such term also includes a person serving as the sponsor of a small 
business health plan under part 8.''.</DELETED>
<DELETED>    (d) Savings Clause.--Section 731(c) of such Act is amended 
by inserting ``or part 8'' after ``this part''.</DELETED>
<DELETED>    (e) Clerical Amendment.--The table of contents in section 
1 of the Employee Retirement Income Security Act of 1974 is amended by 
inserting after the item relating to section 734 the following new 
items:</DELETED>

     <DELETED>``Part 8--Rules Governing Small Business Health Plans

<DELETED>``801. Small business health plans.
<DELETED>``802. Certification of small business health plans.
<DELETED>``803. Requirements relating to sponsors and boards of 
                            trustees.
<DELETED>``804. Participation and coverage requirements.
<DELETED>``805. Other requirements relating to plan documents, 
                            contribution rates, and benefit options.
<DELETED>``806. Requirements for application and related requirements.
<DELETED>``807. Notice requirements for voluntary termination.
<DELETED>``808. Definitions and rules of construction.''.

<DELETED>SEC. 102. COOPERATION BETWEEN FEDERAL AND STATE 
              AUTHORITIES.</DELETED>

<DELETED>    Section 506 of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1136) is amended by adding at the end the following 
new subsection:</DELETED>
<DELETED>    ``(d) Consultation With States With Respect to Small 
Business Health Plans.--</DELETED>
        <DELETED>    ``(1) Agreements with states.--The Secretary shall 
        consult with the State recognized under paragraph (2) with 
        respect to a small business health plan regarding the exercise 
        of--</DELETED>
                <DELETED>    ``(A) the Secretary's authority under 
                sections 502 and 504 to enforce the requirements for 
                certification under part 8; and</DELETED>
                <DELETED>    ``(B) the Secretary's authority to certify 
                small business health plans under part 8 in accordance 
                with regulations of the Secretary applicable to 
                certification under part 8.</DELETED>
        <DELETED>    ``(2) Recognition of domicile state.--In carrying 
        out paragraph (1), the Secretary shall ensure that only one 
        State will be recognized, with respect to any particular small 
        business health plan, as the State with which consultation is 
        required. In carrying out this paragraph such State shall be 
        the domicile State, as defined in section 805(c).''.</DELETED>

<DELETED>SEC. 103. EFFECTIVE DATE AND TRANSITIONAL AND OTHER 
              RULES.</DELETED>

<DELETED>    (a) Effective Date.--The amendments made by this title 
shall take effect 1 year after the date of the enactment of this Act. 
The Secretary of Labor shall first issue all regulations necessary to 
carry out the amendments made by this title within 1 year after the 
date of the enactment of this Act.</DELETED>
<DELETED>    (b) Treatment of Certain Existing Health Benefits 
Programs.--</DELETED>
        <DELETED>    (1) In general.--In any case in which, as of the 
        date of the enactment of this Act, an arrangement is maintained 
        in a State for the purpose of providing benefits consisting of 
        medical care for the employees and beneficiaries of its 
        participating employers, at least 200 participating employers 
        make contributions to such arrangement, such arrangement has 
        been in existence for at least 10 years, and such arrangement 
        is licensed under the laws of one or more States to provide 
        such benefits to its participating employers, upon the filing 
        with the applicable authority (as defined in section 808(a)(2) 
        of the Employee Retirement Income Security Act of 1974 (as 
        amended by this subtitle)) by the arrangement of an application 
        for certification of the arrangement under part 8 of subtitle B 
        of title I of such Act--</DELETED>
                <DELETED>    (A) such arrangement shall be deemed to be 
                a group health plan for purposes of title I of such 
                Act;</DELETED>
                <DELETED>    (B) the requirements of sections 801(a) 
                and 803(a) of the Employee Retirement Income Security 
                Act of 1974 shall be deemed met with respect to such 
                arrangement;</DELETED>
                <DELETED>    (C) the requirements of section 803(b) of 
                such Act shall be deemed met, if the arrangement is 
                operated by a board of trustees which--</DELETED>
                        <DELETED>    (i) is elected by the 
                        participating employers, with each employer 
                        having one vote; and</DELETED>
                        <DELETED>    (ii) has complete fiscal control 
                        over the arrangement and which is responsible 
                        for all operations of the 
                        arrangement;</DELETED>
                <DELETED>    (D) the requirements of section 804(a) of 
                such Act shall be deemed met with respect to such 
                arrangement; and</DELETED>
                <DELETED>    (E) the arrangement may be certified by 
                any applicable authority with respect to its operations 
                in any State only if it operates in such State on the 
                date of certification.</DELETED>
        <DELETED>The provisions of this subsection shall cease to apply 
        with respect to any such arrangement at such time after the 
        date of the enactment of this Act as the applicable 
        requirements of this subsection are not met with respect to 
        such arrangement or at such time that the arrangement provides 
        coverage to participants and beneficiaries in any State other 
        than the States in which coverage is provided on such date of 
        enactment.</DELETED>
        <DELETED>    (2) Definitions.--For purposes of this subsection, 
        the terms ``group health plan'', ``medical care'', and 
        ``participating employer'' shall have the meanings provided in 
        section 808 of the Employee Retirement Income Security Act of 
        1974, except that the reference in paragraph (7) of such 
        section to an ``small business health plan'' shall be deemed a 
        reference to an arrangement referred to in this 
        subsection.</DELETED>

          <DELETED>TITLE II--NEAR-TERM MARKET RELIEF</DELETED>

<DELETED>SEC. 201. NEAR-TERM MARKET RELIEF.</DELETED>

<DELETED>    The Public Health Service Act (42 U.S.C. 201 et seq.) is 
amended by adding at the end the following:</DELETED>

       <DELETED>``TITLE XXIX--HEALTH CARE INSURANCE MARKETPLACE 
                            REFORM</DELETED>

<DELETED>``SEC. 2901. GENERAL INSURANCE DEFINITIONS.</DELETED>

<DELETED>    ``In this title, the terms `health insurance coverage', 
`health insurance issuer', `group health plan', and `individual health 
insurance' shall have the meanings given such terms in section 
2791.</DELETED>

        <DELETED>``Subtitle A--Near-Term Market Relief</DELETED>

            <DELETED>``PART I--RATING REQUIREMENTS</DELETED>

<DELETED>``SEC. 2911. DEFINITIONS.</DELETED>

<DELETED>    ``In this part:</DELETED>
        <DELETED>    ``(1) Adopting state.--The term `adopting State' 
        means a State that has enacted either the NAIC model rules or 
        the National Interim Model Rating Rules in their entirety and 
        as the exclusive laws of the State that relate to rating in the 
        small group insurance market.</DELETED>
        <DELETED>    ``(2) Commission.--The term `Commission' means the 
        Harmonized Standards Commission established under section 
        2921.</DELETED>
        <DELETED>    ``(3) Eligible insurer.--The term `eligible 
        insurer' means a health insurance issuer that is licensed in a 
        nonadopting State and that--</DELETED>
                <DELETED>    ``(A) notifies the Secretary, not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer small group health insurance coverage 
                consistent with the National Interim Model Rating Rules 
                in a nonadopting State;</DELETED>
                <DELETED>    ``(B) notifies the insurance department of 
                a nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer small group health insurance coverage in that 
                State consistent with the National Interim Model Rating 
                Rules, and provides with such notice a copy of any 
                insurance policy that it intends to offer in the State, 
                its most recent annual and quarterly financial reports, 
                and any other information required to be filed with the 
                insurance department of the State (or other State 
                agency) by the Secretary in regulations; and</DELETED>
                <DELETED>    ``(C) includes in the terms of the health 
                insurance coverage offered in nonadopting States 
                (including in the terms of any individual certificates 
                that may be offered to individuals in connection with 
                such group health coverage) and filed with the State 
                pursuant to subparagraph (B), a description in the 
                insurer's contract of the National Interim Model Rating 
                Rules and an affirmation that such Rules are included 
                in the terms of such contract.</DELETED>
        <DELETED>    ``(4) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in small group 
        health insurance market.</DELETED>
        <DELETED>    ``(5) NAIC model rules.--The term `NAIC model 
        rules' means the rating rules provided for in the 1992 Adopted 
        Small Employer Health Insurance Availability Model Act of the 
        National Association of Insurance Commissioners.</DELETED>
        <DELETED>    ``(6) National interim model rating rules.--The 
        term `National Interim Model Rating Rules' means the rules 
        promulgated under section 2912(a).</DELETED>
        <DELETED>    ``(7) Nonadopting state.--The term `nonadopting 
        State' means a State that is not an adopting State.</DELETED>
        <DELETED>    ``(8) Small group insurance market.--The term 
        `small group insurance market' shall have the meaning given the 
        term `small group market' in section 2791(e)(5).</DELETED>
        <DELETED>    ``(9) State law.--The term `State law' means all 
        laws, decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.</DELETED>

<DELETED>``SEC. 2912. RATING RULES.</DELETED>

<DELETED>    ``(a) National Interim Model Rating Rules.--Not later than 
6 months after the date of enactment of this title, the Secretary, in 
consultation with the National Association of Insurance Commissioners, 
shall, through expedited rulemaking procedures, promulgate National 
Interim Model Rating Rules that shall be applicable to the small group 
insurance market in certain States until such time as the provisions of 
subtitle B become effective. Such Model Rules shall apply in States as 
provided for in this section beginning with the first plan year after 
the such Rules are promulgated.</DELETED>
<DELETED>    ``(b) Utilization of NAIC Model Rules.--In promulgating 
the National Interim Model Rating Rules under subsection (a), the 
Secretary, except as otherwise provided in this subtitle, shall utilize 
the NAIC model rules regarding premium rating and premium 
variation.</DELETED>
<DELETED>    ``(c) Transition in Certain States.--</DELETED>
        <DELETED>    ``(1) In general.--In promulgating the National 
        Interim Model Rating Rules under subsection (a), the Secretary 
        shall have discretion to modify the NAIC model rules in 
        accordance with this subsection to the extent necessary to 
        provide for a graduated transition, of not to exceed 3 years 
        following the promulgation of such National Interim Rules, with 
        respect to the application of such Rules to States.</DELETED>
        <DELETED>    ``(2) Initial premium variation.--</DELETED>
                <DELETED>    ``(A) In general.--Under the modified 
                National Interim Model Rating Rules as provided for in 
                paragraph (1), the premium variation provision of 
                subparagraph (C) shall be applicable only with respect 
                to small group policies issued in States which, on the 
                date of enactment of this title, have in place premium 
                rating band requirements that vary by less than 50 
                percent from the premium variation standards contained 
                in subparagraph (C) with respect to the standards 
                provided for under the NAIC model rules.</DELETED>
                <DELETED>    ``(B) Other states.--Health insurance 
                coverage offered in a State that, on the date of 
                enactment of this title, has in place premium rating 
                band requirements that vary by more than 50 percent 
                from the premium variation standards contained in 
                subparagraph (C) shall be subject to such graduated 
                transition schedules as may be provided by the 
                Secretary pursuant to paragraph (1).</DELETED>
                <DELETED>    ``(C) Amount of variation.--The amount of 
                a premium rating variation from the base premium rate 
                due to health conditions of covered individuals under 
                this subparagraph shall not exceed a factor of--
                </DELETED>
                        <DELETED>    ``(i) +/- 25 percent upon the 
                        issuance of the policy involved; and</DELETED>
                        <DELETED>    ``(ii) +/- 15 percent upon the 
                        renewal of the policy.</DELETED>
        <DELETED>    ``(3) Other transitional authority.--In developing 
        the National Interim Model Rating Rules, the Secretary may also 
        provide for the application of transitional standards in 
        certain States with respect to the following:</DELETED>
                <DELETED>    ``(A) Independent rating classes for old 
                and new business.</DELETED>
                <DELETED>    ``(B) Such additional transition standards 
                as the Secretary may determine necessary for an 
                effective transition.</DELETED>

<DELETED>``SEC. 2913. APPLICATION AND PREEMPTION.</DELETED>

<DELETED>    ``(a) Superceding of State Law.--</DELETED>
        <DELETED>    ``(1) In general.--This part shall supersede any 
        and all State laws insofar as such State laws (whether enacted 
        prior to or after the date of enactment of this subtitle) 
        relate to rating in the small group insurance market as applied 
        to an eligible insurer, or small group health insurance 
        coverage issued by an eligible insurer, in a nonadopting 
        State.</DELETED>
        <DELETED>    ``(2) Nonadopting states.--This part shall 
        supersede any and all State laws of a nonadopting State insofar 
        as such State laws (whether enacted prior to or after the date 
        of enactment of this subtitle)--</DELETED>
                <DELETED>    ``(A) prohibit an eligible insurer from 
                offering coverage consistent with the National Interim 
                Model Rating Rules in a nonadopting State; or</DELETED>
                <DELETED>    ``(B) discriminate against or among 
                eligible insurers offering health insurance coverage 
                consistent with the National Interim Model Rating Rules 
                in a nonadopting state.</DELETED>
<DELETED>    ``(b) Savings Clause and Construction.--</DELETED>
        <DELETED>    ``(1) Nonapplication to adopting states.--
        Subsection (a) shall not apply with respect to adopting 
        states.</DELETED>
        <DELETED>    ``(2) Nonapplication to certain insurers.--
        Subsection (a) shall not apply with respect to insurers that do 
        not qualify as eligible insurers that offer small group health 
        insurance coverage in a nonadopting State.</DELETED>
        <DELETED>    ``(3) Nonapplication where obtaining relief under 
        state law.--Subsection (a)(1) shall not apply to any State law 
        in a nonadopting State to the extent necessary to permit 
        individuals or the insurance department of the State (or other 
        State agency) to obtain relief under State law to require an 
        eligible insurer to comply with the terms of the small group 
        health insurance coverage issued in the nonadopting State. In 
        no case shall this paragraph, or any other provision of this 
        title, be construed to create a cause of action on behalf of an 
        individual or any other person under State law in connection 
        with a group health plan that is subject to the Employee 
        Retirement Income Security Act of 1974 or health insurance 
        coverage issued in connection with such a plan.</DELETED>
        <DELETED>    ``(4) Nonapplication to enforce requirements 
        relating to the national rule.--Subsection (a)(1) shall not 
        apply to any State law in a nonadopting State to the extent 
        necessary to provide the insurance department of the State (or 
        other State agency) with the authority to enforce State law 
        requirements relating to the National Interim Model Rating 
        Rules that are not set forth in the terms of the small group 
        health insurance coverage issued in a nonadopting State, in a 
        manner that is consistent with the National Interim Model 
        Rating Rules and that imposes no greater duties or obligations 
        on health insurance issuers than the National Interim Model 
        Rating Rules.</DELETED>
        <DELETED>    ``(5) Nonapplication to subsection (a)(2).--
        Paragraphs (3) and (4) shall not apply with respect to 
        subsection (a)(2).</DELETED>
        <DELETED>    ``(6) No affect on preemption.--In no case shall 
        this subsection be construed to affect the scope of the 
        preemption provided for under the Employee Retirement Income 
        Security Act of 1974.</DELETED>
<DELETED>    ``(c) Effective Date.--This section shall apply beginning 
in the first plan year following the issuance of the final rules by the 
Secretary under the National Interim Model Rating Rules.</DELETED>

<DELETED>``SEC. 2914. CIVIL ACTIONS AND JURISDICTION.</DELETED>

<DELETED>    ``(a) In General.--The district courts of the United 
States shall have exclusive jurisdiction over civil actions involving 
the interpretation of this part.</DELETED>
<DELETED>    ``(b) Actions.--A health insurance issuer may bring an 
action in the district courts of the United States for injunctive or 
other equitable relief against a nonadopting State in connection with 
the application of a state law that violates this part.</DELETED>
<DELETED>    ``(c) Violations of Section 2913.--In the case of a 
nonadopting State that is in violation of section 2913(a)(2), a health 
insurance issuer may bring an action in the district courts of the 
United States for damages against the nonadopting State and, if the 
health insurance issuer prevails in such action, the district court 
shall award the health insurance issuer its reasonable attorneys fees 
and costs.</DELETED>

<DELETED>``SEC. 2915. SUNSET.</DELETED>

<DELETED>    ``The National Interim Model Rating Rules shall remain in 
effect in a non-adopting State until such time as the harmonized 
national rating rules are promulgated and effective pursuant to part 
II. Upon such effective date, such harmonized rules shall supersede the 
National Rules.</DELETED>

             <DELETED>``PART II--LOWER COST PLANS</DELETED>

<DELETED>``SEC. 2921. DEFINITIONS.</DELETED>

<DELETED>    ``In this part:</DELETED>
        <DELETED>    ``(1) Adopting state.--The term `adopting State' 
        means a State that has enacted the State Benefit Compendium in 
        its entirety and as the exclusive laws of the State that relate 
        to benefit, service, and provider mandates in the group and 
        individual insurance markets.</DELETED>
        <DELETED>    ``(2) Eligible insurer.--The term `eligible 
        insurer' means a health insurance issuer that is licensed in a 
        nonadopting State and that--</DELETED>
                <DELETED>    ``(A) notifies the Secretary, not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer group health insurance coverage consistent 
                with the State Benefit Compendium in a nonadopting 
                State;</DELETED>
                <DELETED>    ``(B) notifies the insurance department of 
                a nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer group health insurance coverage in that State 
                consistent with the State Benefit Compendium, and 
                provides with such notice a copy of any insurance 
                policy that it intends to offer in the State, its most 
                recent annual and quarterly financial reports, and any 
                other information required to be filed with the 
                insurance department of the State (or other State 
                agency) by the Secretary in regulations; and</DELETED>
                <DELETED>    ``(C) includes in the terms of the health 
                insurance coverage offered in nonadopting States 
                (including in the terms of any individual certificates 
                that may be offered to individuals in connection with 
                such group health coverage) and filed with the State 
                pursuant to subparagraph (B), a description in the 
                insurer's contract of the State Benefit Compendium and 
                that adherence to the Compendium is included as a term 
                of such contract.</DELETED>
        <DELETED>    ``(3) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the group or 
        individual health insurance markets.</DELETED>
        <DELETED>    ``(4) Nonadopting state.--The term `nonadopting 
        State' means a State that is not an adopting State.</DELETED>
        <DELETED>    ``(5) State benefit compendium.--The term `State 
        Benefit Compendium' means the Compendium issued under section 
        2922.</DELETED>
        <DELETED>    ``(6) State law.--The term `State law' means all 
        laws, decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.</DELETED>

<DELETED>``SEC. 2922. OFFERING LOWER COST PLANS.</DELETED>

<DELETED>    ``(a) List of Required Benefits.--Not later than 3 months 
after the date of enactment of this title, the Secretary shall issue by 
interim final rule a list (to be known as the `List of Required 
Benefits') of the benefit, service, and provider mandates that are 
required to be provided by health insurance issuers in at least 45 
States as a result of the application of State benefit, service, and 
provider mandate laws.</DELETED>
<DELETED>    ``(b) State Benefit Compendium.--</DELETED>
        <DELETED>    ``(1) Variance.--Not later than 12 months after 
        the date of enactment of this title, the Secretary shall issue 
        by interim final rule a compendium (to be known as the `State 
        Benefit Compendium') of harmonized descriptions of the benefit, 
        service, and provider mandates identified under subsection (a). 
        In developing the Compendium, with respect to differences in 
        State mandate laws identified under subsection (a) relating to 
        similar benefits, services, or providers, the Secretary shall 
        review and define the scope and application of such State laws 
        so that a common approach shall be applicable under such 
        Compendium in a uniform manner. In making such determination, 
        the Secretary shall adopt an approach reflective of the 
        approach used by a plurality of the States requiring such 
        benefit, service, or provider mandate.</DELETED>
        <DELETED>    ``(2) Effect.--The State Benefit Compendium shall 
        provide that any State benefit, service, and provider mandate 
        law (enacted prior to or after the date of enactment of this 
        title) other than those described in the Compendium shall not 
        be binding on health insurance issuers in an adopting 
        State.</DELETED>
        <DELETED>    ``(3) Implementation.--The effective date of the 
        State Benefit Compendium shall be the later of--</DELETED>
                <DELETED>    ``(A) the date that is 12 months from the 
                date of enactment of this title; or</DELETED>
                <DELETED>    ``(B) such subsequent date on which the 
                interim final rule for the State Benefit Compendium 
                shall be issued.</DELETED>
<DELETED>    ``(c) Non-Association Coverage.--With respect to health 
insurers selling insurance to small employers (as defined in section 
808(a)(10) of the Employee Retirement Income Security Act of 1974), in 
the event the Secretary fails to issue the State Benefit Compendium 
within 12 months of the date of enactment of this title, the required 
scope and application for each benefit or service listed in the List of 
Required Benefits shall, other than with respect to insurance issued to 
a Small Business Health Plan, be--</DELETED>
        <DELETED>    ``(1) if the State in which the insurer issues a 
        policy mandates such benefit or service, the scope and 
        application required by such State; or</DELETED>
        <DELETED>    ``(2) if the State in which the insurer issues a 
        policy does not mandate such benefit or service, the scope and 
        application required by such other State that does require such 
        benefit or service in which the greatest number of the 
        insurer's small employer policyholders are located.</DELETED>
<DELETED>    ``(d) Updating of State Benefit Compendium.--Not later 
than 2 years after the date on which the Compendium is issued under 
subsection (b)(1), and every 2 years thereafter, the Secretary, 
applying the same methodology provided for in subsections (a) and 
(b)(1), in consultation with the National Association of Insurance 
Commissioners, shall update the Compendium. The Secretary shall issue 
the updated Compendium by regulation, and such updated Compendium shall 
be effective upon the first plan year following the issuance of such 
regulation.</DELETED>

<DELETED>``SEC. 2923. APPLICATION AND PREEMPTION.</DELETED>

<DELETED>    ``(a) Superceding of State Law.--</DELETED>
        <DELETED>    ``(1) In general.--This part shall supersede any 
        and all State laws (whether enacted prior to or after the date 
        of enactment of this title) insofar as such laws relate to 
        benefit, service, or provider mandates in the health insurance 
        market as applied to an eligible insurer, or health insurance 
        coverage issued by an eligible insurer, in a nonadopting 
        State.</DELETED>
        <DELETED>    ``(2) Nonadopting states.--This part shall 
        supersede any and all State laws of a nonadopting State 
        (whether enacted prior to or after the date of enactment of 
        this title) insofar as such laws--</DELETED>
                <DELETED>    ``(A) prohibit an eligible insurer from 
                offering coverage consistent with the State Benefit 
                Compendium, as provided for in section 2922(a), in a 
                nonadopting State; or</DELETED>
                <DELETED>    ``(B) discriminate against or among 
                eligible insurers offering or seeking to offer health 
                insurance coverage consistent with the State Benefit 
                Compendium in a nonadopting State.</DELETED>
<DELETED>    ``(b) Savings Clause and Construction.--</DELETED>
        <DELETED>    ``(1) Nonapplication to adopting states.--
        Subsection (a) shall not apply with respect to adopting 
        States.</DELETED>
        <DELETED>    ``(2) Nonapplication to certain insurers.--
        Subsection (a) shall not apply with respect to insurers that do 
        not qualify as eligible insurers who offer health insurance 
        coverage in a nonadopting State.</DELETED>
        <DELETED>    ``(3) Nonapplication where obtaining relief under 
        state law.--Subsection (a)(1) shall not apply to any State law 
        of a nonadopting State to the extent necessary to permit 
        individuals or the insurance department of the State (or other 
        State agency) to obtain relief under State law to require an 
        eligible insurer to comply with the terms of the group health 
        insurance coverage issued in a nonadopting State. In no case 
        shall this paragraph, or any other provision of this title, be 
        construed to create a cause of action on behalf of an 
        individual or any other person under State law in connection 
        with a group health plan that is subject to the Employee 
        Retirement Income Security Act of 1974 or health insurance 
        coverage issued in connection with such plan.</DELETED>
        <DELETED>    ``(4) Nonapplication to enforce requirements 
        relating to the compendium.--Subsection (a)(1) shall not apply 
        to any State law in a nonadopting State to the extent necessary 
        to provide the insurance department of the State (or other 
        state agency) authority to enforce State law requirements 
        relating to the State Benefit Compendium that are not set forth 
        in the terms of the group health insurance coverage issued in a 
        nonadopting State, in a manner that is consistent with the 
        State Benefit Compendium and imposes no greater duties or 
        obligations on health insurance issuers than the State Benefit 
        Compendium.</DELETED>
        <DELETED>    ``(5) Nonapplication to subsection (a)(2).--
        Paragraphs (3) and (4) shall not apply with respect to 
        subsection (a)(2).</DELETED>
        <DELETED>    ``(6) No affect on preemption.--In no case shall 
        this subsection be construed to affect the scope of the 
        preemption provided for under the Employee Retirement Income 
        Security Act of 1974.</DELETED>
<DELETED>    ``(c) Effective Date.--This section shall apply upon the 
first plan year following final issuance by the Secretary of the State 
Benefit Compendium.</DELETED>

<DELETED>``SEC. 2924. CIVIL ACTIONS AND JURISDICTION.</DELETED>

<DELETED>    ``(a) In General.--The district courts of the United 
States shall have exclusive jurisdiction over civil actions involving 
the interpretation of this part.</DELETED>
<DELETED>    ``(b) Actions.--A health insurance issuer may bring an 
action in the district courts of the United States for injunctive or 
other equitable relief against a nonadopting State in connection with 
the application of a State law that violates this part.</DELETED>
<DELETED>    ``(c) Violations of Section 2923.--In the case of a 
nonadopting State that is in violation of section 2923(a)(2), a health 
insurance issuer may bring an action in the district courts of the 
United States for damages against the nonadopting State and, if the 
health insurance issuer prevails in such action, the district court 
shall award the health insurance issuer its reasonable attorneys fees 
and costs.''.</DELETED>

  <DELETED>TITLE III--HARMONIZATION OF HEALTH INSURANCE LAWS</DELETED>

<DELETED>SEC. 301. HEALTH INSURANCE REGULATORY HARMONIZATION.</DELETED>

<DELETED>    Title XXIX of the Public Health Service Act (as added by 
section 201) is amended by adding at the end the following:</DELETED>

       <DELETED>``Subtitle B--Regulatory Harmonization</DELETED>

<DELETED>``SEC. 2931. DEFINITIONS.</DELETED>

<DELETED>    ``In this subtitle:</DELETED>
        <DELETED>    ``(1) Access.--The term `access' means any 
        requirements of State law that regulate the following elements 
        of access:</DELETED>
                <DELETED>    ``(A) Renewability of coverage.</DELETED>
                <DELETED>    ``(B) Guaranteed issuance as provided for 
                in title XXVII.</DELETED>
                <DELETED>    ``(C) Guaranteed issue for individuals not 
                eligible under subparagraph (B).</DELETED>
                <DELETED>    ``(D) High risk pools.</DELETED>
                <DELETED>    ``(E) Pre-existing conditions 
                limitations.</DELETED>
        <DELETED>    ``(2) Adopting state.--The term `adopting State' 
        means a State that has enacted the harmonized standards adopted 
        under this subtitle in their entirety and as the exclusive laws 
        of the State that relate to the harmonized standards.</DELETED>
        <DELETED>    ``(3) Eligible insurer.--The term `eligible 
        insurer' means a health insurance issuer that is licensed in a 
        nonadopting State and that--</DELETED>
                <DELETED>    ``(A) notifies the Secretary, not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer health insurance coverage consistent with the 
                harmonized standards in a nonadopting State;</DELETED>
                <DELETED>    ``(B) notifies the insurance department of 
                a nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer group health insurance coverage in that State 
                consistent with the State Benefit Compendium, and 
                provides with such notice a copy of any insurance 
                policy that it intends to offer in the State, its most 
                recent annual and quarterly financial reports, and any 
                other information required to be filed with the 
                insurance department of the State (or other State 
                agency) by the Secretary in regulations; and</DELETED>
                <DELETED>    ``(C) includes in the terms of the health 
                insurance coverage offered in nonadopting States 
                (including in the terms of any individual certificates 
                that may be offered to individuals in connection with 
                such group health coverage) and filed with the State 
                pursuant to subparagraph (B), a description of the 
                harmonized standards published pursuant to section 
                2932(g)(2) and an affirmation that such standards are a 
                term of the contract.</DELETED>
        <DELETED>    ``(4) Harmonized standards.--The term `harmonized 
        standards' means the standards adopted by the Secretary under 
        section 2932(d).</DELETED>
        <DELETED>    ``(5) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the health 
        insurance market.</DELETED>
        <DELETED>    ``(6) Nonadopting state.--The term `nonadopting 
        State' means a State that fails to enact, within 2 years of the 
        date in which final regulations are issued by the Secretary 
        adopting the harmonized standards under this subtitle, the 
        harmonized standards in their entirety and as the exclusive 
        laws of the State that relate to the harmonized 
        standards.</DELETED>
        <DELETED>    ``(7) Patient protections.--The term `patient 
        protections' means any requirement of State law that regulate 
        the following elements of patient protections:</DELETED>
                <DELETED>    ``(A) Internal appeals.</DELETED>
                <DELETED>    ``(B) External appeals.</DELETED>
                <DELETED>    ``(C) Direct access to 
                providers.</DELETED>
                <DELETED>    ``(D) Prompt payment of claims.</DELETED>
                <DELETED>    ``(E) Utilization review.</DELETED>
                <DELETED>    ``(F) Marketing standards.</DELETED>
        <DELETED>    ``(8) Plurality requirement.--The term `plurality 
        requirement' means the most common substantially similar 
        requirements for elements within each area described in section 
        2932(b)(1).</DELETED>
        <DELETED>    ``(9) Rating.--The term `rating' means, at the 
        time of issuance or renewal, requirements of State law the 
        regulate the following elements of rating:</DELETED>
                <DELETED>    ``(A) Limits on the types of variations in 
                rates based on health status.</DELETED>
                <DELETED>    ``(B) Limits on the types of variations in 
                rates based on age and gender.</DELETED>
                <DELETED>    ``(C) Limits on the types of variations in 
                rates based on geography, industry and group 
                size.</DELETED>
                <DELETED>    ``(D) Periods of time during which rates 
                are guaranteed.</DELETED>
                <DELETED>    ``(E) The review and approval of 
                rates.</DELETED>
                <DELETED>    ``(F) The establishment of classes or 
                blocks of business.</DELETED>
                <DELETED>    ``(G) The use of actuarial justifications 
                for rate variations.</DELETED>
        <DELETED>    ``(10) State law.--The term `State law' means all 
        laws, decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.</DELETED>
        <DELETED>    ``(11) Substantially similar.--The term 
        `substantially similar' means a requirement of State law 
        applicable to an element of an area identified in section 2932 
        that is similar in most material respects. Where the most 
        common State action with respect to an element is to adopt no 
        requirement for an element of an area identified in such 
        section 2932, the plurality requirement shall be deemed to 
        impose no requirements for such element.</DELETED>

<DELETED>``SEC. 2932. HARMONIZED STANDARDS.</DELETED>

<DELETED>    ``(a) Commission.--</DELETED>
        <DELETED>    ``(1) Establishment.--The Secretary, in 
        consultation with the NAIC, shall establish the Commission on 
        Health Insurance Standards Harmonization (referred to in this 
        subtitle as the `Commission') to develop recommendations that 
        harmonize inconsistent State health insurance laws in 
        accordance with the laws adopted in a plurality of the 
        States.</DELETED>
        <DELETED>    ``(2) Composition.--The Commission shall be 
        composed of the following individuals to be appointed by the 
        Secretary:</DELETED>
                <DELETED>    ``(A) Two State insurance commissioners, 
                of which one shall be a Democrat and one shall be a 
                Republican, and of which one shall be designated as the 
                chairperson and one shall be designated as the vice 
                chairperson.</DELETED>
                <DELETED>    ``(B) Two representatives of State 
                government, one of which shall be a governor of a State 
                and one of which shall be a State legislator, and one 
                of which shall be a Democrat and one of which shall be 
                a Republican.</DELETED>
                <DELETED>    ``(C) Two representatives of employers, of 
                which one shall represent small employers and one shall 
                represent large employers.</DELETED>
                <DELETED>    ``(D) Two representatives of health 
                insurers, of which one shall represent insurers that 
                offer coverage in all markets (including individual, 
                small, and large markets), and one shall represent 
                insurers that offer coverage in the small 
                market.</DELETED>
                <DELETED>    ``(E) Two representatives of consumer 
                organizations.</DELETED>
                <DELETED>    ``(F) Two representatives of insurance 
                agents and brokers.</DELETED>
                <DELETED>    ``(G) Two representatives of healthcare 
                providers.</DELETED>
                <DELETED>    ``(H) Two independent representatives of 
                the American Academy of Actuaries who have familiarity 
                with the actuarial methods applicable to health 
                insurance.</DELETED>
                <DELETED>    ``(I) One administrator of a qualified 
                high risk pool.</DELETED>
        <DELETED>    ``(3) Terms.--The members of the Commission shall 
        serve for the duration of the Commission. The Secretary shall 
        fill vacancies in the Commission as needed and in a manner 
        consistent with the composition described in paragraph 
        (2).</DELETED>
<DELETED>    ``(b) Development of Harmonized Standards.--</DELETED>
        <DELETED>    ``(1) In general.--In accordance with the process 
        described in subsection (c), the Commission shall identify and 
        recommend nationally harmonized standards for the small group 
        health insurance market, the individual health insurance 
        market, and the large group health insurance market that relate 
        to the following areas:</DELETED>
                <DELETED>    ``(A) Rating.</DELETED>
                <DELETED>    ``(B) Access to coverage.</DELETED>
                <DELETED>    ``(C) Patient protections.</DELETED>
        <DELETED>    ``(2) Recommendations.--The Commission shall 
        recommend separate harmonized standards with respect to each of 
        the three insurance markets described in paragraph (1) and 
        separate standards for each element of the areas described in 
        subparagraph (A) through (C) of such paragraph within each such 
        market. Notwithstanding the previous sentence, the Commission 
        shall not recommend any harmonized standards that disrupt, 
        expand, or duplicate the benefit, service, or provider mandate 
        standards provided in the State Benefit Compendium pursuant to 
        section 2922(a).</DELETED>
<DELETED>    ``(c) Process for Identifying Harmonized Standards.--
</DELETED>
        <DELETED>    ``(1) In general.--The Commission shall develop 
        recommendations to harmonize inconsistent State insurance laws 
        with the laws adopted in a plurality of the States. In carrying 
        out the previous sentence, the Commission shall review all 
        State laws that regulate insurance in each of the insurance 
        markets and areas described in subsection (b)(1) and identify 
        the plurality requirement within each element of such areas. 
        Such plurality requirement shall be the harmonized standard for 
        such area in each such market.</DELETED>
        <DELETED>    ``(2) Consultation.--The Commission shall consult 
        with the National Association of Insurance Commissioners in 
        identifying the plurality requirements for each element within 
        the area and in recommending the harmonized 
        standards.</DELETED>
        <DELETED>    ``(3) Review of federal laws.--The Commission 
        shall review whether any Federal law imposes a requirement 
        relating to the markets and areas described in subsection 
        (b)(1). In such case, such Federal requirement shall be deemed 
        the plurality requirement and the Commission shall recommend 
        the Federal requirement as the harmonized standard for such 
        elements.</DELETED>
<DELETED>    ``(d) Recommendations and Adoption by Secretary.--
</DELETED>
        <DELETED>    ``(1) Recommendations.--Not later than 1 year 
        after the date of enactment of this title, the Commission shall 
        recommend to the Secretary the adoption of the harmonized 
        standards identified pursuant to subsection (c).</DELETED>
        <DELETED>    ``(2) Regulations.--Not later than 120 days after 
        receipt of the Commission's recommendations under paragraph 
        (1), the Secretary shall issue final regulations adopting the 
        recommended harmonized standards. If the Secretary finds the 
        recommended standards for an element of an area to be arbitrary 
        and inconsistent with the plurality requirements of this 
        section, the Secretary may issue a unique harmonized standard 
        only for such element through the application of a process 
        similar to the process set forth in subsection (c) and through 
        the issuance of proposed and final regulations.</DELETED>
        <DELETED>    ``(3) Effective date.--The regulations issued by 
        the Secretary under paragraph (2) shall be effective on the 
        date that is 2 years after the date on which such regulations 
        were issued.</DELETED>
<DELETED>    ``(e) Termination.--The Commission shall terminate and be 
dissolved after making the recommendations to the Secretary pursuant to 
subsection (d)(1).</DELETED>
<DELETED>    ``(f) Updated Harmonized Standards.--</DELETED>
        <DELETED>    ``(1) In general.--Not later than 2 years after 
        the termination of the Commission under subsection (e), and 
        every 2 years thereafter, the Secretary shall update the 
        harmonized standards. Such updated standards shall be adopted 
        in accordance with paragraph (2).</DELETED>
        <DELETED>    ``(2) Updating of standards.--</DELETED>
                <DELETED>    ``(A) In general.--The Secretary shall 
                review all State laws that regulate insurance in each 
                of the markets and elements of areas set forth in 
                subsection (b)(1) and identify whether a plurality of 
                States have adopted substantially similar requirements 
                that differ from the harmonized standards adopted by 
                the Secretary pursuant to subsection (d). In such case, 
                the Secretary shall consider State laws that have been 
                enacted with effective dates that are contingent upon 
                adoption as a harmonized standard by the Secretary. 
                Substantially similar requirements for each element 
                within such area shall be considered to be an updated 
                harmonized standard for such an area.</DELETED>
                <DELETED>    ``(B) Report.--The Secretary shall request 
                the National Association of Insurance Commissioners to 
                issue a report to the Secretary every 2 years to assist 
                the Secretary in identifying the updated harmonized 
                standards under this paragraph. Nothing in this 
                subparagraph shall be construed to prohibit the 
                Secretary from issuing updated harmonized standards in 
                the absence of such a report.</DELETED>
                <DELETED>    ``(C) Regulations.--The Secretary shall 
                issue regulations adopting updated harmonized standards 
                under this paragraph within 90 days of identifying such 
                standards. Such regulations shall be effective 
                beginning on the date that is 2 years after the date on 
                which such regulations are issued.</DELETED>
<DELETED>    ``(g) Publication.--</DELETED>
        <DELETED>    ``(1) Listing.--The Secretary shall maintain an up 
        to date listing of all harmonized standards adopted under this 
        section on the Internet website of the Department of Health and 
        Human Services.</DELETED>
        <DELETED>    ``(2) Sample contract language.--The Secretary 
        shall publish on the Internet website of the Department of 
        Health and Human Services sample contract language that 
        incorporates the harmonized standards adopted under this 
        section, which may be used by insurers seeking to qualify as an 
        eligible insurer. The types of harmonized standards that shall 
        be included in sample contract language are the standards that 
        are relevant to the contractual bargain between the insurer and 
        insured.</DELETED>
<DELETED>    ``(h) State Adoption and Enforcement.--Not later than 2 
years after the issuance by the Secretary of final regulations adopting 
harmonized standards under this section, the States may adopt such 
harmonized standards (and become an adopting State) and, in which case, 
shall enforce the harmonized standards pursuant to State law.</DELETED>

<DELETED>``SEC. 2933. APPLICATION AND PREEMPTION.</DELETED>

<DELETED>    ``(a) Superceding of State Law.--</DELETED>
        <DELETED>    ``(1) In general.--The harmonized standards 
        adopted under this subtitle shall supersede any and all State 
        laws (whether enacted prior to or after the date of enactment 
        of this title) insofar as such State laws relate to the areas 
        of harmonized standards as applied to an eligible insurer, or 
        health insurance coverage issued by a eligible insurer, in a 
        nonadopting State.</DELETED>
        <DELETED>    ``(2) Nonadopting states.--This subtitle shall 
        supersede any and all State laws of a nonadopting State 
        (whether enacted prior to or after the date of enactment of 
        this title) insofar as they may--</DELETED>
                <DELETED>    ``(A) prohibit an eligible insurer from 
                offering coverage consistent with the harmonized 
                standards in the nonadopting State; or</DELETED>
                <DELETED>    ``(B) discriminate against or among 
                eligible insurers offering or seeking to offer health 
                insurance coverage consistent with the harmonized 
                standards in the nonadopting State.</DELETED>
<DELETED>    ``(b) Savings Clause and Construction.--</DELETED>
        <DELETED>    ``(1) Nonapplication to adopting states.--
        Subsection (a) shall not apply with respect to adopting 
        States.</DELETED>
        <DELETED>    ``(2) Nonapplication to certain insurers.--
        Subsection (a) shall not apply with respect to insurers that do 
        not qualify as eligible insurers who offer health insurance 
        coverage in a nonadopting State.</DELETED>
        <DELETED>    ``(3) Nonapplication where obtaining relief under 
        state law.--Subsection (a)(1) shall not apply to any State law 
        of a nonadopting State to the extent necessary to permit 
        individuals or the insurance department of the State (or other 
        State agency) to obtain relief under State law to require an 
        eligible insurer to comply with the terms of the health 
        insurance coverage issued in a nonadopting State. In no case 
        shall this paragraph, or any other provision of this subtitle, 
        be construed to permit a cause of action on behalf of an 
        individual or any other person under State law in connection 
        with a group health plan that is subject to the Employee 
        Retirement Income Security Act of 1974 or health insurance 
        coverage issued in connection with such plan.</DELETED>
        <DELETED>    ``(4) Nonapplication to enforce requirements 
        relating to the compendium.--Subsection (a)(1) shall not apply 
        to any State law in a nonadopting State to the extent necessary 
        to provide the insurance department of the State (or other 
        state agency) authority to enforce State law requirements 
        relating to the harmonized standards that are not set forth in 
        the terms of the health insurance coverage issued in a 
        nonadopting State, in a manner that is consistent with the 
        harmonized standards and imposes no greater duties or 
        obligations on health insurance issuers than the harmonized 
        standards.</DELETED>
        <DELETED>    ``(5) Nonapplication to subsection (a)(2).--
        Paragraphs (3) and (4) shall not apply with respect to 
        subsection (a)(2).</DELETED>
        <DELETED>    ``(6) No affect on preemption.--In no case shall 
        this subsection be construed to affect the scope of the 
        preemption provided for under the Employee Retirement Income 
        Security Act of 1974.</DELETED>
<DELETED>    ``(c) Effective Date.--This section shall apply beginning 
on the date that is 2 years after the date on which final regulations 
are issued by the Secretary under this subtitle adopting the harmonized 
standards.</DELETED>

<DELETED>``SEC. 2934. CIVIL ACTIONS AND JURISDICTION.</DELETED>

<DELETED>    ``(a) In General.--The district courts of the United 
States shall have exclusive jurisdiction over civil actions involving 
the interpretation of this subtitle.</DELETED>
<DELETED>    ``(b) Actions.--A health insurance issuer may bring an 
action in the district courts of the United States for injunctive or 
other equitable relief against a nonadopting State in connection with 
the application of a State law that violates this subtitle.</DELETED>
<DELETED>    ``(c) Violations of Section 2933.--In the case of a 
nonadopting State that is in violation of section 2933(a)(2), a health 
insurance issuer may bring an action in the district courts of the 
United States for damages against the nonadopting State and, if the 
health insurance issuer prevails in such action, the district court 
shall award the health insurance issuer its reasonable attorneys fees 
and costs.</DELETED>

<DELETED>``SEC. 2935. AUTHORIZATION OF APPROPRIATIONS.</DELETED>

<DELETED>    ``There are authorized to be appropriated such sums as may 
be necessary to carry out this subtitle.''.</DELETED>

SECTION 1. SHORT TITLE; TABLE OF CONTENTS; PURPOSE.

    (a) Short Title.--This Act may be cited as the ``Health Insurance 
Marketplace Modernization and Affordability Act of 2006''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents; purposes.

                  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--MARKET RELIEF

Sec. 201. Market relief.

         TITLE III--HARMONIZATION OF HEALTH INSURANCE STANDARDS

Sec. 301. Health Insurance Standards Harmonization.
    (c) Purposes.--It is the purpose of this Act to--
            (1) make more affordable health insurance options available 
        to small businesses, working families, and all Americans;
            (2) assure effective State regulatory protection of the 
        interests of health insurance consumers; and
            (3) create a more efficient and affordable health insurance 
        marketplace through collaborative development of uniform 
        regulatory standards.

                  TITLE I--SMALL BUSINESS HEALTH PLANS

SEC. 101. RULES GOVERNING SMALL BUSINESS HEALTH PLANS.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding after part 7 the 
following new part:

         ``PART 8--RULES GOVERNING SMALL BUSINESS HEALTH PLANS

``SEC. 801. SMALL BUSINESS HEALTH PLANS.

    ``(a) In General.--For purposes of this part, the term `small 
business health plan' means a fully insured group health plan whose 
sponsor is (or is deemed under this part to be) described in subsection 
(b).
    ``(b) Sponsorship.--The sponsor of a group health plan is described 
in this subsection if such sponsor--
            ``(1) is organized and maintained in good faith, with a 
        constitution and bylaws specifically stating its purpose and 
        providing for periodic meetings on at least an annual basis, as 
        a bona fide trade association, a bona fide industry association 
        (including a rural electric cooperative association or a rural 
        telephone cooperative association), a bona fide professional 
        association, or a bona fide chamber of commerce (or similar 
        bona fide business association, including a corporation or 
        similar organization that operates on a cooperative basis 
        (within the meaning of section 1381 of the Internal Revenue 
        Code of 1986)), for substantial purposes other than that of 
        obtaining medical care;
            ``(2) is established as a permanent entity which receives 
        the active support of its members and requires for membership 
        payment on a periodic basis of dues or payments necessary to 
        maintain eligibility for membership;
            ``(3) does not condition membership, such dues or payments, 
        or coverage under the plan on the basis of health status-
        related factors with respect to the employees of its members 
        (or affiliated members), or the dependents of such employees, 
        and does not condition such dues or payments on the basis of 
        group health plan participation; and
            ``(4) does not condition membership on the basis of a 
        minimum group size.
Any sponsor consisting of an association of entities which meet the 
requirements of paragraphs (1), (2), (3), and (4) shall be deemed to be 
a sponsor described in this subsection.

``SEC. 802. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.

    ``(a) In General.--Not later than 6 months after the date of 
enactment of this part, the applicable authority shall prescribe by 
interim final rule a procedure under which the applicable authority 
shall certify small business health plans which apply for certification 
as meeting the requirements of this part.
    ``(b) Requirements Applicable to Certified Plans.--A small business 
health plan with respect to which certification under this part is in 
effect shall meet the applicable requirements of this part, effective 
on the date of certification (or, if later, on the date on which the 
plan is to commence operations).
    ``(c) Requirements for Continued Certification.--The applicable 
authority may provide by regulation for continued certification of 
small business health plans under this part. Such regulation shall 
provide for the revocation of a certification if the applicable 
authority finds that the small business health plan involved is failing 
to comply with the requirements of this part.
    ``(d) Expedited and Deemed Certification.--
            ``(1) In general.--If the Secretary fails to act on an 
        application for certification under this section within 90 days 
        of receipt of such application, the applying small business 
        health plan shall be deemed certified until such time as the 
        Secretary may deny for cause the application for certification.
            ``(2) Civil penalty.--The Secretary may assess a civil 
        penalty against the board of trustees and plan sponsor (jointly 
        and severally) of a small business health plan that is deemed 
        certified under paragraph (1) of up to $500,000 in the event 
        the Secretary determines that the application for certification 
        of such small business health plan was willfully or with gross 
        negligence incomplete or inaccurate.

``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.

    ``(a) Sponsor.--The requirements of this subsection are met with 
respect to a small business health plan if the sponsor has met (or is 
deemed under this part to have met) the requirements of section 801(b) 
for a continuous period of not less than 3 years ending with the date 
of the application for certification under this part.
    ``(b) Board of Trustees.--The requirements of this subsection are 
met with respect to a small business health plan if the following 
requirements are met:
            ``(1) Fiscal control.--The plan is operated, pursuant to a 
        plan document, by a board of trustees which pursuant to a trust 
        agreement has complete fiscal control over the plan and which 
        is responsible for all operations of the plan.
            ``(2) Rules of operation and financial controls.--The board 
        of trustees has in effect rules of operation and financial 
        controls, based on a 3-year plan of operation, adequate to 
        carry out the terms of the plan and to meet all requirements of 
        this title applicable to the plan.
            ``(3) Rules governing relationship to participating 
        employers and to contractors.--
                    ``(A) Board membership.--
                            ``(i) In general.--Except as provided in 
                        clauses (ii) and (iii), the members of the 
                        board of trustees are individuals selected from 
                        individuals who are the owners, officers, 
                        directors, or employees of the participating 
                        employers or who are partners in the 
                        participating employers and actively 
                        participate in the business.
                            ``(ii) Limitation.--
                                    ``(I) General rule.--Except as 
                                provided in subclauses (II) and (III), 
                                no such member is an owner, officer, 
                                director, or employee of, or partner 
                                in, a contract administrator or other 
                                service provider to the plan.
                                    ``(II) Limited exception for 
                                providers of services solely on behalf 
                                of the sponsor.--Officers or employees 
                                of a sponsor which is a service 
                                provider (other than a contract 
                                administrator) to the plan may be 
                                members of the board if they constitute 
                                not more than 25 percent of the 
                                membership of the board and they do not 
                                provide services to the plan other than 
                                on behalf of the sponsor.
                                    ``(III) Treatment of providers of 
                                medical care.--In the case of a sponsor 
                                which is an association whose 
                                membership consists primarily of 
                                providers of medical care, subclause 
                                (I) shall not apply in the case of any 
                                service provider described in subclause 
                                (I) who is a provider of medical care 
                                under the plan.
                            ``(iii) Certain plans excluded.--Clause (i) 
                        shall not apply to a small business health plan 
                        which is in existence on the date of the 
                        enactment of the Health Insurance Marketplace 
                        Modernization and Affordability Act of 2006.
                    ``(B) Sole authority.--The board has sole authority 
                under the plan to approve applications for 
                participation in the plan and to contract with 
                insurers.
    ``(c) Treatment of Franchise Networks.--In the case of a group 
health plan which is established and maintained by a franchiser for a 
franchise network consisting of its franchisees--
            ``(1) the requirements of subsection (a) and section 801(a) 
        shall be deemed met if such requirements would otherwise be met 
        if the franchiser were deemed to be the sponsor referred to in 
        section 801(b), such network were deemed to be an association 
        described in section 801(b), and each franchisee were deemed to 
        be a member (of the association and the sponsor) referred to in 
        section 801(b); and
            ``(2) the requirements of section 804(a)(1) shall be deemed 
        met.
The Secretary may by regulation define for purposes of this subsection 
the terms `franchiser', `franchise network', and `franchisee'.

``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

    ``(a) Covered Employers and Individuals.--The requirements of this 
subsection are met with respect to a small business health plan if, 
under the terms of the plan--
            ``(1) each participating employer must be--
                    ``(A) a member of the sponsor;
                    ``(B) the sponsor; or
                    ``(C) an affiliated member of the sponsor, except 
                that, in the case of a sponsor which is a professional 
                association or other individual-based association, if 
                at least one of the officers, directors, or employees 
                of an employer, or at least one of the individuals who 
                are partners in an employer and who actively 
                participates in the business, is a member or such an 
                affiliated member of the sponsor, participating 
                employers may also include such employer; and
            ``(2) all individuals commencing coverage under the plan 
        after certification under this part must be--
                    ``(A) active or retired owners (including self-
                employed individuals), officers, directors, or 
                employees of, or partners in, participating employers; 
                or
                    ``(B) the dependents of individuals described in 
                subparagraph (A).
    ``(b) Individual Market Unaffected.--The requirements of this 
subsection are met with respect to a small business health plan if, 
under the terms of the plan, no participating employer may provide 
health insurance coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer under the plan, 
if such exclusion of the employee from coverage under the plan is based 
on a health status-related factor with respect to the employee and such 
employee would, but for such exclusion on such basis, be eligible for 
coverage under the plan.
    ``(c) Prohibition of Discrimination Against Employers and Employees 
Eligible to Participate.--The requirements of this subsection are met 
with respect to a small business health plan if--
            ``(1) under the terms of the plan, all employers meeting 
        the preceding requirements of this section are eligible to 
        qualify as participating employers for all geographically 
        available coverage options, unless, in the case of any such 
        employer, participation or contribution requirements of the 
        type referred to in section 2711 of the Public Health Service 
        Act are not met;
            ``(2) information regarding all coverage options available 
        under the plan is made readily available to any employer 
        eligible to participate; and
            ``(3) the applicable requirements of sections 701, 702, and 
        703 are met with respect to the plan.

``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION 
              RATES, AND BENEFIT OPTIONS.

    ``(a) In General.--The requirements of this section are met with 
respect to a small business health plan if the following requirements 
are met:
            ``(1) Contents of governing instruments.--
                    ``(A) In general.--The instruments governing the 
                plan include a written instrument, meeting the 
                requirements of an instrument required under section 
                402(a)(1), which--
                            ``(i) provides that the board of trustees 
                        serves as the named fiduciary required for 
                        plans under section 402(a)(1) and serves in the 
                        capacity of a plan administrator (referred to 
                        in section 3(16)(A)); and
                            ``(ii) provides that the sponsor of the 
                        plan is to serve as plan sponsor (referred to 
                        in section 3(16)(B)).
                    ``(B) Description of material provisions.--The 
                terms of the health insurance coverage (including the 
                terms of any individual certificates that may be 
                offered to individuals in connection with such 
                coverage) describe the material benefit and rating, and 
                other provisions set forth in this section and such 
                material provisions are included in the summary plan 
                description.
            ``(2) Contribution rates must be nondiscriminatory.--
                    ``(A) In general.--The contribution rates for any 
                participating small employer shall not vary on the 
                basis of any health status-related factor in relation 
                to employees of such employer or their beneficiaries 
                and shall not vary on the basis of the type of business 
                or industry in which such employer is engaged.
                    ``(B) Effect of title.--Nothing in this title or 
                any other provision of law shall be construed to 
                preclude a health insurance issuer offering health 
                insurance coverage in connection with a small business 
                health plan, and at the request of such small business 
                health plan, from--
                            ``(i) setting contribution rates for the 
                        small business health plan based on the claims 
                        experience of the plan so long as any variation 
                        in such rates complies with the requirements of 
                        clause (ii), except that small business health 
                        plans shall not be subject to paragraphs (1)(A) 
                        and (3) of section 2911(b) of the Public Health 
                        Service Act; or
                            ``(ii) varying contribution rates for 
                        participating employers in a small business 
                        health plan in a State to the extent that such 
                        rates could vary using the same methodology 
                        employed in such State for regulating small 
                        group premium rates, subject to the terms of 
                        part I of subtitle A of title XXIX of the 
                        Public Health Service Act (relating to rating 
                        requirements), as added by title II of the 
                        Health Insurance Marketplace Modernization and 
                        Affordability Act of 2006.
            ``(3) Exceptions regarding self-employed and large 
        employers.--
                    ``(A) Self employed.--
                            ``(i) In general.--Small business health 
                        plans with participating employers who are 
                        self-employed individuals (and their 
                        dependents) shall enroll such self-employed 
                        participating employers in accordance with 
                        rating rules that do not violate the rating 
                        rules for self-employed individuals in the 
                        State in which such self-employed participating 
                        employers are located.
                            ``(ii) Guarantee issue.--Small business 
                        health plans with participating employers who 
                        are self-employed individuals (and their 
                        dependents) may decline to guarantee issue to 
                        such participating employers in States in which 
                        guarantee issue is not otherwise required for 
                        the self-employed in that State.
                    ``(B) Large employers.--Small business health plans 
                with participating employers that are larger than small 
                employers (as defined in section 808(a)(10)) shall 
                enroll such large participating employers in accordance 
                with rating rules that do not violate the rating rules 
                for large employers in the State in which such large 
                participating employers are located.
            ``(4) Regulatory requirements.--Such other requirements as 
        the applicable authority determines are necessary to carry out 
        the purposes of this part, which shall be prescribed by the 
        applicable authority by regulation.
    ``(b) Ability of Small Business Health Plans to Design Benefit 
Options.--Nothing in this part or any provision of State law (as 
defined in section 514(c)(1)) shall be construed to preclude a small 
business health plan or a health insurance issuer offering health 
insurance coverage in connection with a small business health plan from 
exercising its sole discretion in selecting the specific benefits and 
services consisting of medical care to be included as benefits under 
such plan or coverage, except that such benefits and services must meet 
the terms and specifications of part II of subtitle A of title XXIX of 
the Public Health Service Act (relating to lower cost plans), as added 
by title II of the Health Insurance Marketplace Modernization and 
Affordability Act of 2006.
    ``(c) Domicile and Non-Domicile States.--
            ``(1) Domicile state.--Coverage shall be issued to a small 
        business health plan in the State in which the sponsor's 
        principal place of business is located.
            ``(2) Non-domicile states.--With respect to a State (other 
        than the domicile State) in which participating employers of a 
        small business health plan are located but in which the insurer 
        of the small business health plan in the domicile State is not 
        yet licensed, the following shall apply:
                    ``(A) Temporary preemption.--If, upon the 
                expiration of the 90-day period following the 
                submission of a licensure application by such insurer 
                (that includes a certified copy of an approved 
                licensure application as submitted by such insurer in 
                the domicile State) to such State, such State has not 
                approved or denied such application, such State's 
                health insurance licensure laws shall be temporarily 
                preempted and the insurer shall be permitted to operate 
                in such State, subject to the following terms:
                            ``(i) Application of non-domicile state 
                        law.--Except with respect to licensure and with 
                        respect to the terms of subtitle A of title 
                        XXIX of the Public Health Service Act (relating 
                        to rating and benefits as added by the Health 
                        Insurance Marketplace Modernization and 
                        Affordability Act of 2006), the laws and 
                        authority of the non-domicile State shall 
                        remain in full force and effect.
                            ``(ii) Revocation of preemption.--The 
                        preemption of a non-domicile State's health 
                        insurance licensure laws pursuant to this 
                        subparagraph, shall be terminated upon the 
                        occurrence of either of the following:
                                    ``(I) Approval or denial of 
                                application.--The approval of denial of 
                                an insurer's licensure application, 
                                following the laws and regulations of 
                                the non-domicile State with respect to 
                                licensure.
                                    ``(II) Determination of material 
                                violation.--A determination by a non-
                                domicile State that an insurer 
                                operating in a non-domicile State 
                                pursuant to the preemption provided for 
                                in this subparagraph is in material 
                                violation of the insurance laws (other 
                                than licensure and with respect to the 
                                terms of subtitle A of title XXIX of 
                                the Public Health Service Act (relating 
                                to rating and benefits added by the 
                                Health Insurance Marketplace 
                                Modernization and Affordability Act of 
                                2006)) of such State.
                    ``(B) No prohibition on promotion.--Nothing in this 
                paragraph shall be construed to prohibit a small 
                business health plan or an insurer from promoting 
                coverage prior to the expiration of the 90-day period 
                provided for in subparagraph (A), except that no 
                enrollment or collection of contributions shall occur 
                before the expiration of such 90-day period.
                    ``(C) Licensure.--Except with respect to the 
                application of the temporary preemption provision of 
                this paragraph, nothing in this part shall be construed 
                to limit the requirement that insurers issuing coverage 
                to small business health plans shall be licensed in 
                each State in which the small business health plans 
                operate.
                    ``(D) Servicing by licensed insurers.--
                Notwithstanding subparagraph (C), the requirements of 
                this subsection may also be satisfied if the 
                participating employers of a small business health plan 
                are serviced by a licensed insurer in that State, even 
                where such insurer is not the insurer of such small 
                business health plan in the State in which such small 
                business health plan is domiciled.

``SEC. 806. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.

    ``(a) Filing Fee.--Under the procedure prescribed pursuant to 
section 802(a), a small business health plan shall pay to the 
applicable authority at the time of filing an application for 
certification under this part a filing fee in the amount of $5,000, 
which shall be available in the case of the Secretary, to the extent 
provided in appropriation Acts, for the sole purpose of administering 
the certification procedures applicable with respect to small business 
health plans.
    ``(b) Information to Be Included in Application for 
Certification.--An application for certification under this part meets 
the requirements of this section only if it includes, in a manner and 
form which shall be prescribed by the applicable authority by 
regulation, at least the following information:
            ``(1) Identifying information.--The names and addresses 
        of--
                    ``(A) the sponsor; and
                    ``(B) the members of the board of trustees of the 
                plan.
            ``(2) States in which plan intends to do business.--The 
        States in which participants and beneficiaries under the plan 
        are to be located and the number of them expected to be located 
        in each such State.
            ``(3) Bonding requirements.--Evidence provided by the board 
        of trustees that the bonding requirements of section 412 will 
        be met as of the date of the application or (if later) 
        commencement of operations.
            ``(4) Plan documents.--A copy of the documents governing 
        the plan (including any bylaws and trust agreements), the 
        summary plan description, and other material describing the 
        benefits that will be provided to participants and 
        beneficiaries under the plan.
            ``(5) Agreements with service providers.--A copy of any 
        agreements between the plan, health insurance issuer, and 
        contract administrators and other service providers.
    ``(c) Filing Notice of Certification With States.--A certification 
granted under this part to a small business health plan shall not be 
effective unless written notice of such certification is filed with the 
applicable State authority of each State in which the small business 
health plans operate.
    ``(d) Notice of Material Changes.--In the case of any small 
business health plan certified under this part, descriptions of 
material changes in any information which was required to be submitted 
with the application for the certification under this part shall be 
filed in such form and manner as shall be prescribed by the applicable 
authority by regulation. The applicable authority may require by 
regulation prior notice of material changes with respect to specified 
matters which might serve as the basis for suspension or revocation of 
the certification.

``SEC. 807. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

    ``A small business health plan which is or has been certified under 
this part may terminate (upon or at any time after cessation of 
accruals in benefit liabilities) only if the board of trustees, not 
less than 60 days before the proposed termination date--
            ``(1) provides to the participants and beneficiaries a 
        written notice of intent to terminate stating that such 
        termination is intended and the proposed termination date;
            ``(2) develops a plan for winding up the affairs of the 
        plan in connection with such termination in a manner which will 
        result in timely payment of all benefits for which the plan is 
        obligated; and
            ``(3) submits such plan in writing to the applicable 
        authority.
Actions required under this section shall be taken in such form and 
manner as may be prescribed by the applicable authority by regulation.

``SEC. 808. DEFINITIONS AND RULES OF CONSTRUCTION.

    ``(a) Definitions.--For purposes of this part--
            ``(1) Affiliated member.--The term `affiliated member' 
        means, in connection with a sponsor--
                    ``(A) a person who is otherwise eligible to be a 
                member of the sponsor but who elects an affiliated 
                status with the sponsor, or
                    ``(B) in the case of a sponsor with members which 
                consist of associations, a person who is a member or 
                employee of any such association and elects an 
                affiliated status with the sponsor.
            ``(2) Applicable authority.--The term `applicable 
        authority' means the Secretary of Labor, except that, in 
        connection with any exercise of the Secretary's authority with 
        respect to which the Secretary is required under section 506(d) 
        to consult with a State, such term means the Secretary, in 
        consultation with such State.
            ``(3) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of title XXVII of the Public Health Service Act 
        for the State involved with respect to such issuer.
            ``(4) Group health plan.--The term `group health plan' has 
        the meaning provided in section 733(a)(1) (after applying 
        subsection (b) of this section).
            ``(5) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided in section 
        733(b)(1), except that such term shall not include excepted 
        benefits (as defined in section 733(c)).
            ``(6) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning provided in section 733(b)(2).
            ``(7) Individual market.--
                    ``(A) In general.--The term `individual market' 
                means the market for health insurance coverage offered 
                to individuals other than in connection with a group 
                health plan.
                    ``(B) Treatment of very small groups.--
                            ``(i) In general.--Subject to clause (ii), 
                        such term includes coverage offered in 
                        connection with a group health plan that has 
                        fewer than 2 participants as current employees 
                        or participants described in section 732(d)(3) 
                        on the first day of the plan year.
                            ``(ii) State exception.--Clause (i) shall 
                        not apply in the case of health insurance 
                        coverage offered in a State if such State 
                        regulates the coverage described in such clause 
                        in the same manner and to the same extent as 
                        coverage in the small group market (as defined 
                        in section 2791(e)(5) of the Public Health 
                        Service Act) is regulated by such State.
            ``(8) Medical care.--The term `medical care' has the 
        meaning provided in section 733(a)(2).
            ``(9) Participating employer.--The term `participating 
        employer' means, in connection with a small business health 
        plan, any employer, if any individual who is an employee of 
        such employer, a partner in such employer, or a self-employed 
        individual who is such employer (or any dependent, as defined 
        under the terms of the plan, of such individual) is or was 
        covered under such plan in connection with the status of such 
        individual as such an employee, partner, or self-employed 
        individual in relation to the plan.
            ``(10) Small employer.--The term `small employer' means, in 
        connection with a group health plan with respect to a plan 
        year, a small employer as defined in section 2791(e)(4).
            ``(11) Trade association and professional association.--The 
        terms `trade association' and `professional association' mean 
        an entity that meets the requirements of section 1.501(c)(6)-1 
        of title 26, Code of Federal Regulations (as in effect on the 
        date of enactment of this Act).
    ``(b) Rule of Construction.--For purposes of determining whether a 
plan, fund, or program is an employee welfare benefit plan which is a 
small business health plan, and for purposes of applying this title in 
connection with such plan, fund, or program so determined to be such an 
employee welfare benefit plan--
            ``(1) in the case of a partnership, the term `employer' (as 
        defined in section 3(5)) includes the partnership in relation 
        to the partners, and the term `employee' (as defined in section 
        3(6)) includes any partner in relation to the partnership; and
            ``(2) in the case of a self-employed individual, the term 
        `employer' (as defined in section 3(5)) and the term `employee' 
        (as defined in section 3(6)) shall include such individual.
    ``(c) Renewal.--Notwithstanding any provision of law to the 
contrary, a participating employer in a small business health plan 
shall not be deemed to be a plan sponsor in applying requirements 
relating to coverage renewal.
    ``(d) Health Savings Accounts.--Nothing in this part shall be 
construed to inhibit the development of health savings accounts 
pursuant to section 223 of the Internal Revenue Code of 1986.''.
    (b) Conforming Amendments to Preemption Rules.--
            (1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is 
        amended by adding at the end the following new subparagraph:
    ``(E) The preceding subparagraphs of this paragraph do not apply 
with respect to any State law in the case of a small business health 
plan which is certified under part 8.''.
            (2) Section 514 of such Act (29 U.S.C. 1144) is amended--
                    (A) in subsection (b)(4), by striking ``Subsection 
                (a)'' and inserting ``Subsections (a) and (d)'';
                    (B) in subsection (b)(5), by striking ``subsection 
                (a)'' in subparagraph (A) and inserting ``subsection 
                (a) of this section and subsections (a)(2)(B) and (b) 
                of section 805'', and by striking ``subsection (a)'' in 
                subparagraph (B) and inserting ``subsection (a) of this 
                section or subsection (a)(2)(B) or (b) of section 
                805'';
                    (C) by redesignating subsection (d) as subsection 
                (e); and
                    (D) by inserting after subsection (c) the following 
                new subsection:
    ``(d)(1) Except as provided in subsection (b)(4), the provisions of 
this title shall supersede any and all State laws insofar as they may 
now or hereafter preclude a health insurance issuer from offering 
health insurance coverage in connection with a small business health 
plan which is certified under part 8.
    ``(2) In any case in which health insurance coverage of any policy 
type is offered under a small business health plan certified under part 
8 to a participating employer operating in such State, the provisions 
of this title shall supersede any and all laws of such State insofar as 
they may establish rating and benefit requirements that would otherwise 
apply to such coverage, provided the requirements of subtitle A of 
title XXIX of the Public Health Service Act (as added by title II of 
the Health Insurance Marketplace Modernization and Affordability Act of 
2006) (concerning health plan rating and benefits) are met.''.
    (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
102(16)(B)) is amended by adding at the end the following new sentence: 
``Such term also includes a person serving as the sponsor of a small 
business health plan under part 8.''.
    (d) Savings Clause.--Section 731(c) of such Act is amended by 
inserting ``or part 8'' after ``this part''.
    (e) Clerical Amendment.--The table of contents in section 1 of the 
Employee Retirement Income Security Act of 1974 is amended by inserting 
after the item relating 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.''.

SEC. 102. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    Section 506 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1136) is amended by adding at the end the following new 
subsection:
    ``(d) Consultation With States With Respect to Small Business 
Health Plans.--
            ``(1) Agreements with states.--The Secretary shall consult 
        with the State recognized under paragraph (2) with respect to a 
        small business health plan regarding the exercise of--
                    ``(A) the Secretary's authority under sections 502 
                and 504 to enforce the requirements for certification 
                under part 8; and
                    ``(B) the Secretary's authority to certify small 
                business health plans under part 8 in accordance with 
                regulations of the Secretary applicable to 
                certification under part 8.
            ``(2) Recognition of domicile state.--In carrying out 
        paragraph (1), the Secretary shall ensure that only one State 
        will be recognized, with respect to any particular small 
        business health plan, as the State with which consultation is 
        required. In carrying out this paragraph such State shall be 
        the domicile State, as defined in section 805(c).''.

SEC. 103. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

    (a) Effective Date.--The amendments made by this title shall take 
effect 12 months after the date of the enactment of this Act. The 
Secretary of Labor shall first issue all regulations necessary to carry 
out the amendments made by this title within 6 months after the date of 
the enactment of this Act.
    (b) Treatment of Certain Existing Health Benefits Programs.--
            (1) In general.--In any case in which, as of the date of 
        the enactment of this Act, an arrangement is maintained in a 
        State for the purpose of providing benefits consisting of 
        medical care for the employees and beneficiaries of its 
        participating employers, at least 200 participating employers 
        make contributions to such arrangement, such arrangement has 
        been in existence for at least 10 years, and such arrangement 
        is licensed under the laws of one or more States to provide 
        such benefits to its participating employers, upon the filing 
        with the applicable authority (as defined in section 808(a)(2) 
        of the Employee Retirement Income Security Act of 1974 (as 
        amended by this subtitle)) by the arrangement of an application 
        for certification of the arrangement under part 8 of subtitle B 
        of title I of such Act--
                    (A) such arrangement shall be deemed to be a group 
                health plan for purposes of title I of such Act;
                    (B) the requirements of sections 801(a) and 803(a) 
                of the Employee Retirement Income Security Act of 1974 
                shall be deemed met with respect to such arrangement;
                    (C) the requirements of section 803(b) of such Act 
                shall be deemed met, if the arrangement is operated by 
                a board of trustees which--
                            (i) is elected by the participating 
                        employers, with each employer having one vote; 
                        and
                            (ii) has complete fiscal control over the 
                        arrangement and which is responsible for all 
                        operations of the arrangement;
                    (D) the requirements of section 804(a) of such Act 
                shall be deemed met with respect to such arrangement; 
                and
                    (E) the arrangement may be certified by any 
                applicable authority with respect to its operations in 
                any State only if it operates in such State on the date 
                of certification.
        The provisions of this subsection shall cease to apply with 
        respect to any such arrangement at such time after the date of 
        the enactment of this Act as the applicable requirements of 
        this subsection are not met with respect to such arrangement or 
        at such time that the arrangement provides coverage to 
        participants and beneficiaries in any State other than the 
        States in which coverage is provided on such date of enactment.
            (2) Definitions.--For purposes of this subsection, the 
        terms ``group health plan'', ``medical care'', and 
        ``participating employer'' shall have the meanings provided in 
        section 808 of the Employee Retirement Income Security Act of 
        1974, except that the reference in paragraph (7) of such 
        section to an ``small business health plan'' shall be deemed a 
        reference to an arrangement referred to in this subsection.

                        TITLE II--MARKET RELIEF

SEC. 201. MARKET RELIEF.

    The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by 
adding at the end the following:

     ``TITLE XXIX--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION

``SEC. 2901. GENERAL INSURANCE DEFINITIONS.

    ``In this title, the terms `health insurance coverage', `health 
insurance issuer', `group health plan', and `individual health 
insurance' shall have the meanings given such terms in section 2791.

                      ``Subtitle A--Market Relief

                     ``PART I--RATING REQUIREMENTS

``SEC. 2911. DEFINITIONS.

    ``(a) General Definitions.--In this part:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that, with respect to the small group market, has enacted 
        either the Model Small Group Rating Rules or, if applicable to 
        such State, the Transitional Model Small Group Rating Rules, 
        each in their entirety and as the exclusive laws of the State 
        that relate to rating in the small group insurance market.
            ``(2) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the insurance 
        laws of such State.
            ``(3) Base premium rate.--The term `base premium rate' 
        means, for each class of business with respect to a rating 
        period, the lowest premium rate charged or that could have been 
        charged under a rating system for that class of business by the 
        small employer carrier to small employers with similar case 
        characteristics for health benefit plans with the same or 
        similar coverage
            ``(4) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a State and 
        that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the Model 
                Small Group Rating Rules or, as applicable, 
                transitional small group rating rules in a State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer small group health insurance coverage in that 
                State consistent with the Model Small Group Rating 
                Rules, and provides with such notice a copy of any 
                insurance policy that it intends to offer in the State, 
                its most recent annual and quarterly financial reports, 
                and any other information required to be filed with the 
                insurance department of the State (or other State 
                agency); and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such group 
                health coverage) and filed with the State pursuant to 
                subparagraph (B), a description in the insurer's 
                contract of the Model Small Group Rating Rules and an 
                affirmation that such Rules are included in the terms 
                of such contract.
            ``(5) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the small 
        group health insurance market, except that such term shall not 
        include excepted benefits (as defined in section 2791(c)).
            ``(6) Index rate.--The term `index rate' means for each 
        class of business with respect to the rating period for small 
        employers with similar case characteristics, the arithmetic 
        average of the applicable base premium rate and the 
        corresponding highest premium rate.
            ``(7)  Model small group rating rules.--The term ` Model 
        Small Group Rating Rules' means the rules set forth in 
        subsection (b).
            ``(8) Nonadopting state.--The term `nonadopting State' 
        means a State that is not an adopting State.
            ``(9) Small group insurance market.--The term `small group 
        insurance market' shall have the meaning given the term `small 
        group market' in section 2791(e)(5).
            ``(10) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.
    ``(b) Definition Relating to Model Small Group Rating Rules.--The 
term `Model Small Group Rating Rules' means adapted rating rules drawn 
from the Adopted Small Employer Health Insurance Availability Model Act 
of 1993 of the National Association of Insurance Commissioners 
consisting of the following:
            ``(1) Premium rates.--Premium rates for health benefit 
        plans to which this title applies shall be subject to the 
        following provisions relating to premiums:
                    ``(A) Index rate.--The index rate for a rating 
                period for any class of business shall not exceed the 
                index rate for any other class of business by more than 
                20 percent.
                    ``(B) Class of businesses.--With respect to a class 
                of business, the premium rates charged during a rating 
                period to small employers with similar case 
                characteristics for the same or similar coverage or the 
                rates that could be charged to such employers under the 
                rating system for that class of business, shall not 
                vary from the index rate by more than 25 percent of the 
                index rate under subparagraph (A).
                    ``(C) Increases for new rating periods.--The 
                percentage increase in the premium rate charged to a 
                small employer for a new rating period may not exceed 
                the sum of the following:
                            ``(i) The percentage change in the new 
                        business premium rate measured from the first 
                        day of the prior rating period to the first day 
                        of the new rating period. In the case of a 
                        health benefit plan into which the small 
                        employer carrier is no longer enrolling new 
                        small employers, the small employer carrier 
                        shall use the percentage change in the base 
                        premium rate, except that such change shall not 
                        exceed, on a percentage basis, the change in 
                        the new business premium rate for the most 
                        similar health benefit plan into which the 
                        small employer carrier is actively enrolling 
                        new small employers.
                            ``(ii) Any adjustment, not to exceed 15 
                        percent annually and adjusted pro rata for 
                        rating periods of less then 1 year, due to the 
                        claim experience, health status or duration of 
                        coverage of the employees or dependents of the 
                        small employer as determined from the small 
                        employer carrier's rate manual for the class of 
                        business involved.
                            ``(iii) Any adjustment due to change in 
                        coverage or change in the case characteristics 
                        of the small employer as determined from the 
                        small employer carrier's rate manual for the 
                        class of business.
                    ``(D) Uniform application of adjustments.--
                Adjustments in premium rates for claim experience, 
                health status, or duration of coverage shall not be 
                charged to individual employees or dependents. Any such 
                adjustment shall be applied uniformly to the rates 
                charged for all employees and dependents of the small 
                employer.
                    ``(E) Use of industry as a case characteristic.--A 
                small employer carrier may utilize industry as a case 
                characteristic in establishing premium rates, so long 
                as the highest rate factor associated with any industry 
                classification does not exceed the lowest rate factor 
                associated with any industry classification by more 
                than 15 percent.
                    ``(F) Consistent application of factors.--Small 
                employer carriers shall apply rating factors, including 
                case characteristics, consistently with respect to all 
                small employers in a class of business. Rating factors 
                shall produce premiums for identical groups which 
                differ only by the amounts attributable to plan design 
                and do not reflect differences due to the nature of the 
                groups assumed to select particular health benefit 
                plans.
                    ``(G) Treatment of plans as having same rating 
                period.--A small employer carrier shall treat all 
                health benefit plans issued or renewed in the same 
                calendar month as having the same rating period.
                    ``(H) Restricted network provisions.--For purposes 
                of this subsection, a health benefit plan that contains 
                a restricted network provision shall not be considered 
                similar coverage to a health benefit plan that does not 
                contain a similar provision if the restriction of 
                benefits to network providers results in substantial 
                differences in claims costs.
                    ``(I) Prohibition on use of certain case 
                characteristics.--The small employer carrier shall not 
                use case characteristics other than age, gender, 
                industry, geographic area, family composition, group 
                size, and participation in wellness programs without 
                prior approval of the applicable State authority.
                    ``(J) Require compliance.--Premium rates for small 
                business health benefit plans shall comply with the 
                requirements of this subsection notwithstanding any 
                assessments paid or payable by a small employer carrier 
                as required by a State's small employer carrier 
                reinsurance program.
            ``(2) Establishment of separate class of business.--Subject 
        to paragraph (3), a small employer carrier may establish a 
        separate class of business only to reflect substantial 
        differences in expected claims experience or administrative 
        costs related to the following:
                    ``(A) The small employer carrier uses more than one 
                type of system for the marketing and sale of health 
                benefit plans to small employers.
                    ``(B) The small employer carrier has acquired a 
                class of business from another small employer carrier.
                    ``(C) The small employer carrier provides coverage 
                to one or more association groups that meet the 
                requirements of this title.
            ``(3) Limitation.--A small employer carrier may establish 
        up to 9 separate classes of business under paragraph (2), 
        excluding those classes of business related to association 
        groups under this title.
            ``(4) Additional groupings.--The applicable State authority 
        may approve the establishment of additional distinct groupings 
        by small employer carriers upon the submission of an 
        application to the applicable State authority and a finding by 
        the applicable State authority that such action would enhance 
        the efficiency and fairness of the small employer insurance 
        marketplace.
            ``(5) Limitation on transfers.--A small employer carrier 
        shall not transfer a small employer involuntarily into or out 
        of a class of business. A small employer carrier shall not 
        offer to transfer a small employer into or out of a class of 
        business unless such offer is made to transfer all small 
        employers in the class of business without regard to case 
        characteristics, claim experience, health status or duration of 
        coverage since issue.
            ``(6) Suspension of the rules.--The applicable State 
        authority may suspend, for a specified period, the application 
        of paragraph (1) to the premium rates applicable to one or more 
        small employers included within a class of business of a small 
        employer carrier for one or more rating periods upon a filing 
        by the small employer carrier and a finding by the applicable 
        State authority either that the suspension is reasonable when 
        considering the financial condition of the small employer 
        carrier or that the suspension would enhance the efficiency and 
        fairness of the marketplace for small employer health 
        insurance.

``SEC. 2912. RATING RULES.

    ``(a) Implementation of Model Small Group Rating Rules.--Not later 
than 6 months after the enactment of this title, the Secretary shall 
promulgate regulations implementing the Model Small Group Rating Rules 
pursuant to section 2911(b).
    ``(b) Transitional Model Small Group Rating Rules.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this title and to the extent necessary to 
        provide for a graduated transition to the Model Small Group 
        Rating Rules, the Secretary, in consultation with the NAIC, 
        shall promulgate Transitional Model Small Group Rating Rules in 
        accordance with this subsection, which shall be applicable with 
        respect to certain non-adopting States for a period of not to 
        exceed 5 years from the date of the promulgation of the Model 
        Small Group Rating Rules pursuant to subsection (a). After the 
        expiration of such 5-year period, the transitional model small 
        group rating rules shall expire, and the Model Small Group 
        Rating Rules shall then apply with respect to all non-adopting 
        States pursuant to the provisions of this part.
            ``(2) Premium variation during transition.--
                    ``(A) Transition states.--During the transition 
                period described in paragraph (1), small group health 
                insurance coverage offered in a non-adopting State that 
                had in place premium rating band requirements or 
                premium limits that varied by less than 12.5 percent 
                from the index rate within a class of business on the 
                date of enactment of this title, shall not be subject 
                to the premium variation provision of section 
                2911(b)(1) of the Model Small Group Rating Rules and 
                shall instead be subject to the Transitional Model 
                Small Group Rating Rules as promulgated by the 
                Secretary pursuant to paragraph (1).
                    ``(B) Non-transition states.--During the transition 
                period described in paragraph (1), and thereafter, 
                small group health insurance coverage offered in a non-
                adopting State that had in place premium rating band 
                requirements or premium limits that varied by more than 
                12.5 percent from the index rate within a class of 
                business on the date of enactment of this title, shall 
                not be subject to the Transitional Model Small Group 
                Rating Rules as promulgated by the Secretary pursuant 
                to paragraph (1), and instead shall be subject to the 
                Model Small Group Rating Rules effective beginning with 
                the first plan year or calendar year following the 
                promulgation of such Rules, at the election of the 
                eligible insurer.
            ``(3) Transitioning of old business.--In developing the 
        transitional model small group rating rules under paragraph 
        (1), the Secretary shall, after consultation with the National 
        Association of Insurance Commissioners and representatives of 
        insurers operating in the small group health insurance market, 
        promulgate special transition standards and timelines with 
        respect to independent rating classes for old and new business, 
        to the extent reasonably necessary to protect health insurance 
        consumers and to ensure a stable and fair transition for old 
        and new market entrants.
            ``(4) Other transitional authority.--In developing the 
        Transitional Model Small Group Rating Rules under paragraph 
        (1), the Secretary shall provide for the application of the 
        Transitional Model Small Group Rating Rules in transition 
        States as the Secretary may determine necessary for a an 
        effective transition.
    ``(c) Market Re-Entry.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a health insurance issuer that has voluntarily withdrawn 
        from providing coverage in the small group market prior to the 
        date of enactment of the Health Insurance Marketplace 
        Modernization and Affordability Act of 2006 shall not be 
        excluded from re-entering such market on a date that is more 
        than 180 days after such date of enactment.
            ``(2) Termination.--The provision of this subsection shall 
        terminate on the date that is 24 months after the date of 
        enactment of the Health Insurance Marketplace Modernization and 
        Affordability Act of 2006.

``SEC. 2913. APPLICATION AND PREEMPTION.

    ``(a) Superseding of State Law.--
            ``(1) In general.--This part shall supersede any and all 
        State laws of a non-adopting State insofar as such State laws 
        (whether enacted prior to or after the date of enactment of 
        this subtitle) relate to rating in the small group insurance 
        market as applied to an eligible insurer, or small group health 
        insurance coverage issued by an eligible insurer, including 
        with respect to coverage issued to a small employer through a 
        small business health plan, in a State.
            ``(2) Nonadopting states.--This part shall supersede any 
        and all State laws of a nonadopting State insofar as such State 
        laws (whether enacted prior to or after the date of enactment 
        of this subtitle)--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing small group health insurance 
                coverage consistent with the Model Small Group Rating 
                Rules or transitional model small group rating rules; 
                or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing small group 
                health insurance coverage consistent with the Model 
                Small Group Rating Rules or transitional model small 
                group rating rules.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting states.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers that offer small group health insurance 
        coverage in a nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law in a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the Model Small Group Rating Rules or 
        transitional model small group rating rules.
            ``(4) No effect on preemption.--In no case shall this part 
        be construed to limit or affect in any manner the preemptive 
        scope of sections 502 and 514 of the Employee Retirement Income 
        Security Act of 1974. In no case shall this part be construed 
        to create any cause of action under Federal or State law or 
        enlarge or affect any remedy available under the Employee 
        Retirement Income Security Act of 1974
    ``(c) Effective Date.--This section shall apply, at the election of 
the eligible insurer, beginning in the first plan year or the first 
calendar year following the issuance of the final rules by the 
Secretary under the Model Small Group Rating Rules or, as applicable, 
the Transitional Model Small Group Rating Rules, but in no event 
earlier than the date that is 12 months after the date of enactment of 
this title.

``SEC. 2914. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The courts of the United States shall have 
exclusive jurisdiction over civil actions involving the interpretation 
of this part.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 2913.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 2915. ONGOING REVIEW.

    ``Not later than 5 years after the date on which the Model Small 
Group Rating Rules are issued under this part, and every 5 years 
thereafter, the Secretary, in consultation with the National 
Association of Insurance Commissioners, shall prepare and submit to the 
appropriate committees of Congress a report that assesses the effect of 
the Model Small Group Rating Rules on access, cost, and market 
functioning in the small group market. Such report may, if the 
Secretary, in consultation with the National Association of Insurance 
Commissioners, determines such is appropriate for improving access, 
costs, and market functioning, contain legislative proposals for 
recommended modification to such Model Small Group Rating Rules.

                      ``PART II--AFFORDABLE PLANS

``SEC. 2921. DEFINITIONS.

    ``In this part:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that has enacted the Benefit Choice Standards in their 
        entirety and as the exclusive laws of the State that relate to 
        benefit, service, and provider mandates in the group and 
        individual insurance markets.
            ``(2) Benefit choice standards.--The term `Benefit Choice 
        Standards' means the Standards issued under section 2922.
            ``(3) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a nonadopting 
        State and that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the Benefit 
                Choice Standards in a nonadopting State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer health insurance coverage in that State 
                consistent with the Benefit Choice Standards, and 
                provides with such notice a copy of any insurance 
                policy that it intends to offer in the State, its most 
                recent annual and quarterly financial reports, and any 
                other information required to be filed with the 
                insurance department of the State (or other State 
                agency) by the Secretary in regulations; and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such group 
                health coverage) and filed with the State pursuant to 
                subparagraph (B), a description in the insurer's 
                contract of the Benefit Choice Standards and that 
                adherence to such Standards is included as a term of 
                such contract.
            ``(4) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the group or 
        individual health insurance markets, except that such term 
        shall not include excepted benefits (as defined in section 
        2791(c)).
            ``(5) Nonadopting state.--The term `nonadopting State' 
        means a State that is not an adopting State.
            ``(6) Small group insurance market.--The term `small group 
        insurance market' shall have the meaning given the term `small 
        group market' in section 2791(e)(5).
            ``(7) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.

``SEC. 2922. OFFERING AFFORDABLE PLANS.

    ``(a) Benefit Choice Options.--
            ``(1) Development.--Not later than 6 months after the date 
        of enactment of this title, the Secretary shall issue, by 
        interim final rule, Benefit Choice Standards that implement the 
        standards provided for in this part.
            ``(2) Basic options.--The Benefit Choice Standards shall 
        provide that a health insurance issuer in a State, may offer a 
        coverage plan or plan in the small group market, individual 
        market, large group market, or through a small business health 
        plan, that does not comply with one or more mandates regarding 
        covered benefits, services, or category of provider as may be 
        in effect in such State with respect to such market or markets 
        (either prior to or following the date of enactment of this 
        title), if such issuer also offers in such market or markets an 
        enhanced option as provided for in paragraph (3).
            ``(3) Enhanced option.--A health insurance issuer issuing a 
        basic option as provided for in paragraph (2) shall also offer 
        to purchasers (including, with respect to a small business 
        health plan, the participating employers of such plan) an 
        enhanced option, which shall at a minimum include such covered 
        benefits, services, and categories of providers as are covered 
        by a State employee coverage plan in one of the 5 most populous 
        States as are in effect in the calendar year in which such 
        enhanced option is offered.
            ``(4) Publication of benefits.--Not later than 3 months 
        after the date of enactment of this title, and on the first day 
        of every calendar year thereafter, the Secretary shall publish 
        in the Federal Register such covered benefits, services, and 
        categories of providers covered in that calendar year by the 
        State employee coverage plans in the 5 most populous States.
    ``(b) Effective Dates.--
            ``(1) Small business health plans.--With respect to health 
        insurance provided to participating employers of small business 
        health plans, the requirements of this part (concerning lower 
        cost plans) shall apply beginning on the date that is 12 months 
        after the date of enactment of this title.
            ``(2) Non-association coverage.--With respect to health 
        insurance provided to groups or individuals other than 
        participating employers of small business health plans, the 
        requirements of this part shall apply beginning on the date 
        that is 15 months after the date of enactment of this title.

``SEC. 2923. APPLICATION AND PREEMPTION.

    ``(a) Superceding of State Law.--
            ``(1) In general.--This part shall supersede any and all 
        State laws insofar as such laws relate to mandates relating to 
        covered benefits, services, or categories of provider in the 
        health insurance market as applied to an eligible insurer, or 
        health insurance coverage issued by an eligible insurer, 
        including with respect to coverage issued to a small business 
        health plan, in a nonadopting State.
            ``(2) Nonadopting states.--This part shall supersede any 
        and all State laws of a nonadopting State (whether enacted 
        prior to or after the date of enactment of this title) insofar 
        as such laws--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing health insurance coverage 
                consistent with the Benefit Choice Standards, as 
                provided for in section 2922(a); or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing health 
                insurance coverage consistent with the Benefit Choice 
                Standards.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting States.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers who offer health insurance coverage in a 
        nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law of a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the Benefit Choice Standards.
            ``(4) No effect on preemption.--In no case shall this part 
        be construed to limit or affect in any manner the preemptive 
        scope of sections 502 and 514 of the Employee Retirement Income 
        Security Act of 1974. In no case shall this part be construed 
        to create any cause of action under Federal or State law or 
        enlarge or affect any remedy available under the Employee 
        Retirement Income Security Act of 1974

``SEC. 2924. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The courts of the United States shall have 
exclusive jurisdiction over civil actions involving the interpretation 
of this part.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 2923.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 2925. RULES OF CONSTRUCTION.

    ``(a) In General.--Notwithstanding any other provision of Federal 
or State law, a health insurance issuer in an adopting State or an 
eligible insurer in a non-adopting State may amend its existing 
policies to be consistent with the terms of this subtitle (concerning 
rating and benefits).
    ``(b) Health Savings Accounts.--Nothing in this subtitle shall be 
construed to inhibit the development of health savings accounts 
pursuant to section 223 of the Internal Revenue Code of 1986.''.

         TITLE III--HARMONIZATION OF HEALTH INSURANCE STANDARDS

SEC. 301. HEALTH INSURANCE STANDARDS HARMONIZATION.

    Title XXIX of the Public Health Service Act (as added by section 
201) is amended by adding at the end the following:

                 ``Subtitle B--Standards Harmonization

``SEC. 2931. DEFINITIONS.

    ``In this subtitle:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that has enacted the harmonized standards adopted under 
        this subtitle in their entirety and as the exclusive laws of 
        the State that relate to the harmonized standards.
            ``(2) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a nonadopting 
        State and that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the 
                harmonized standards in a nonadopting State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer health insurance coverage in that State 
                consistent with the harmonized standards published 
                pursuant to section 2932(d), and provides with such 
                notice a copy of any insurance policy that it intends 
                to offer in the State, its most recent annual and 
                quarterly financial reports, and any other information 
                required to be filed with the insurance department of 
                the State (or other State agency) by the Secretary in 
                regulations; and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such health 
                coverage) and filed with the State pursuant to 
                subparagraph (B), a description of the harmonized 
                standards published pursuant to section 2932(g)(2) and 
                an affirmation that such standards are a term of the 
                contract.
            ``(3) Harmonized standards.--The term `harmonized 
        standards' means the standards certified by the Secretary under 
        section 2932(d).
            ``(4) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the health 
        insurance market, except that such term shall not include 
        excepted benefits (as defined in section 2791(c).
            ``(5) Nonadopting state.--The term `nonadopting State' 
        means a State that fails to enact, within 18 months of the date 
        on which the Secretary certifies the harmonized standards under 
        this subtitle, the harmonized standards in their entirety and 
        as the exclusive laws of the State that relate to the 
        harmonized standards.
            ``(6) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.

``SEC. 2932. HARMONIZED STANDARDS.

    ``(a) Board.--
            ``(1) Establishment.--Not later than 3 months after the 
        date of enactment of this title, the Secretary, in consultation 
        with the NAIC, shall establish the Health Insurance Consensus 
        Standards Board (referred to in this subtitle as the `Board') 
        to develop recommendations that harmonize inconsistent State 
        health insurance laws in accordance with the procedures 
        described in subsection (b).
            ``(2) Composition.--
                    ``(A) In general.--The Board shall be composed of 
                the following voting members to be appointed by the 
                Secretary after considering the recommendations of 
                professional organizations representing the entities 
                and constituencies described in this paragraph:
                            ``(i) Four State insurance commissioners as 
                        recommended by the National Association of 
                        Insurance Commissioners, of which 2 shall be 
                        Democrats and 2 shall be Republicans, and of 
                        which one shall be designated as the 
                        chairperson and one shall be designated as the 
                        vice chairperson.
                            ``(ii) Four representatives of State 
                        government, two of which shall be governors of 
                        States and two of which shall be State 
                        legislators, and two of which shall be 
                        Democrats and two of which shall be 
                        Republicans.
                            ``(iii) Four representatives of health 
                        insurers, of which one shall represent insurers 
                        that offer coverage in the small group market, 
                        one shall represent insurers that offer 
                        coverage in the large group market, one shall 
                        represent insurers that offer coverage in the 
                        individual market, and one shall represent 
                        carriers operating in a regional market.
                            ``(iv) Two representatives of insurance 
                        agents and brokers.
                            ``(v) Two independent representatives of 
                        the American Academy of Actuaries who have 
                        familiarity with the actuarial methods 
                        applicable to health insurance.
                    ``(B) Ex officio member.--A representative of the 
                Secretary shall serve as an ex officio member of the 
                Board.
            ``(3) Advisory panel.--The Secretary shall establish an 
        advisory panel to provide advice to the Board, and shall 
        appoint its members after considering the recommendations of 
        professional organizations representing the entities and 
        constituencies identified in this paragraph:
                    ``(A) Two representatives of small business health 
                plans.
                    ``(B) Two representatives of employers, of which 
                one shall represent small employers and one shall 
                represent large employers.
                    ``(C) Two representatives of consumer 
                organizations.
                    ``(D) Two representatives of health care providers.
            ``(4) Qualifications.--The membership of the Board shall 
        include individuals with national recognition for their 
        expertise in health finance and economics, actuarial science, 
        health plans, providers of health services, and other related 
        fields, who provide a mix of different professionals, broad 
        geographic representation, and a balance between urban and 
        rural representatives.
            ``(5) Ethical disclosure.--The Secretary shall establish a 
        system for public disclosure by members of the Board of 
        financial and other potential conflicts of interest relating to 
        such members. Members of the Board shall be treated as 
        employees of Congress for purposes of applying title I of the 
        Ethics in Government Act of 1978 (Public Law 95-521).
            ``(6) Director and staff.--Subject to such review as the 
        Secretary deems necessary to assure the efficient 
        administration of the Board, the chair and vice-chair of the 
        Board may--
                    ``(A) employ and fix the compensation of an 
                Executive Director (subject to the approval of the 
                Comptroller General) and such other personnel as may be 
                necessary to carry out its duties (without regard to 
                the provisions of title 5, United States Code, 
                governing appointments in the competitive service);
                    ``(B) seek such assistance and support as may be 
                required in the performance of its duties from 
                appropriate Federal departments and agencies;
                    ``(C) enter into contracts or make other 
                arrangements, as may be necessary for the conduct of 
                the work of the Board (without regard to section 3709 
                of the Revised Statutes (41 U.S.C. 5));
                    ``(D) make advance, progress, and other payments 
                which relate to the work of the Board;
                    ``(E) provide transportation and subsistence for 
                persons serving without compensation; and
                    ``(F) prescribe such rules as it deems necessary 
                with respect to the internal organization and operation 
                of the Board.
            ``(7) Terms.--The members of the Board shall serve for the 
        duration of the Board. Vacancies in the Board shall be filled 
        as needed in a manner consistent with the composition described 
        in paragraph (2).
    ``(b) Development of Harmonized Standards.--
            ``(1) In general.--In accordance with the process described 
        in subsection (c), the Board shall identify and recommend 
        nationally harmonized standards for each of the following 
        process categories:
                    ``(A) Form filing and rate filing.--Form and rate 
                filing standards shall be established which promote 
                speed to market and include the following defined areas 
                for States that require such filings:
                            ``(i) Procedures for form and rate filing 
                        pursuant to a streamlined administrative filing 
                        process.
                            ``(ii) Timeframes for filings to be 
                        reviewed by a State if review is required 
                        before they are deemed approved.
                            ``(iii) Timeframes for an eligible insurer 
                        to respond to State requests following its 
                        review.
                            ``(iv) A process for an eligible insurer to 
                        self-certify.
                            ``(v) State development of form and rate 
                        filing templates that include only non-
                        preempted State law and Federal law 
                        requirements for eligible insurers with timely 
                        updates.
                            ``(vi) Procedures for the resubmission of 
                        forms and rates.
                            ``(vii) Disapproval rationale of a form or 
                        rate filing based on material omissions or 
                        violations of non-preempted State law or 
                        Federal law with violations cited and 
                        explained.
                            ``(viii) For States that may require a 
                        hearing, a rationale for hearings based on 
                        violations of non-preempted State law or 
                        insurer requests.
                    ``(B) Market conduct review.--Market conduct review 
                standards shall be developed which provide for the 
                following:
                            ``(i) Mandatory participation in national 
                        databases.
                            ``(ii) The confidentiality of examination 
                        materials.
                            ``(iii) The identification of the State 
                        agency with primary responsibility for 
                        examinations.
                            ``(iv) Consultation and verification of 
                        complaint data with the eligible insurer prior 
                        to State actions.
                            ``(v) Consistency of reporting requirements 
                        with the recordkeeping and administrative 
                        practices of the eligible insurer.
                            ``(vi) Examinations that seek to correct 
                        material errors and harmful business practices 
                        rather than infrequent errors.
                            ``(vii) Transparency and publishing of the 
                        State's examination standards.
                            ``(viii) Coordination of market conduct 
                        analysis.
                            ``(ix) Coordination and nonduplication 
                        between State examinations of the same eligible 
                        insurer.
                            ``(x) Rationale and protocols to be met 
                        before a full examination is conducted.
                            ``(xi) Requirements on examiners prior to 
                        beginning examinations such as budget planning 
                        and work plans.
                            ``(xii) Consideration of methods to limit 
                        examiners' fees such as caps, competitive 
                        bidding, or other alternatives.
                            ``(xiii) Reasonable fines and penalties for 
                        material errors and harmful business practices.
                    ``(C) Prompt payment of claims.--The Board shall 
                establish prompt payment standards for eligible 
                insurers based on standards similar to those applicable 
                to the Social Security Act as set forth in section 
                1842(c)(2) of such Act (42 U.S.C. 1395u(c)(2)). Such 
                prompt payment standards shall be consistent with the 
                timing and notice requirements of the claims procedure 
                rules to be specified under subparagraph (D), and shall 
                include appropriate exceptions such as for fraud, 
                nonpayment of premiums, or late submission of claims.
                    ``(D) Internal review.--The Board shall establish 
                standards for claims procedures for eligible insurers 
                that are consistent with the requirements relating to 
                initial claims for benefits and appeals of claims for 
                benefits under the Employee Retirement Income Security 
                Act of 1974 as set forth in section 503 of such Act (29 
                U.S.C. 1133) and the regulations thereunder.
            ``(2) Recommendations.--The Board shall recommend 
        harmonized standards for each element of the categories 
        described in subparagraph (A) through (D) of paragraph (1) 
        within each such market. Notwithstanding the previous sentence, 
        the Board shall not recommend any harmonized standards that 
        disrupt, expand, or duplicate the benefit, service, or provider 
        mandate standards provided in the Benefit Choice Standards 
        pursuant to section 2922(a).
    ``(c) Process for Identifying Harmonized Standards.--
            ``(1) In general.--The Board shall develop recommendations 
        to harmonize inconsistent State insurance laws with respect to 
        each of the process categories described in subparagraphs (A) 
        through (D) of subsection (b)(1).
            ``(2) Requirements.--In adopting standards under this 
        section, the Board shall consider the following:
                    ``(A) Any model acts or regulations of the National 
                Association of Insurance Commissioners in each of the 
                process categories described in subparagraphs (A) 
                through (D) of subsection (b)(1).
                    ``(B) Substantially similar standards followed by a 
                plurality of States, as reflected in existing State 
                laws, relating to the specific process categories 
                described in subparagraphs (A) through (D) of 
                subsection (b)(1).
                    ``(C) Any Federal law requirement related to 
                specific process categories described in subparagraphs 
                (A) through (D) of subsection (b)(1).
                    ``(D) In the case of the adoption of any standard 
                that differs substantially from those referred to in 
                subparagraphs (A), (B), or (C), the Board shall provide 
                evidence to the Secretary that such standard is 
                necessary to protect health insurance consumers or 
                promote speed to market or administrative efficiency.
                    ``(E) The criteria specified in clauses (i) through 
                (iii) of subsection (d)(2)(B).
    ``(d) Recommendations and Certification by Secretary.--
            ``(1) Recommendations.--Not later than 18 months after the 
        date on which all members of the Board are selected under 
        subsection (a), the Board shall recommend to the Secretary the 
        certification of the harmonized standards identified pursuant 
        to subsection (c).
            ``(2) Certification.--
                    ``(A) In general.--Not later than 120 days after 
                receipt of the Board's recommendations under paragraph 
                (1), the Secretary shall certify the recommended 
                harmonized standards as provided for in subparagraph 
                (B), and issue such standards in the form of an interim 
                final regulation.
                    ``(B) Certification process.--The Secretary shall 
                establish a process for certifying the recommended 
                harmonized standard, by category, as recommended by the 
                Board under this section. Such process shall--
                            ``(i) ensure that the certified standards 
                        for a particular process area achieve 
                        regulatory harmonization with respect to health 
                        plans on a national basis;
                            ``(ii) ensure that the approved standards 
                        are the minimum necessary, with regard to 
                        substance and quantity of requirements, to 
                        protect health insurance consumers and maintain 
                        a competitive regulatory environment; and
                            ``(iii) ensure that the approved standards 
                        will not limit the range of group health plan 
                        designs and insurance products, such as 
                        catastrophic coverage only plans, health 
                        savings accounts, and health maintenance 
                        organizations, that might otherwise be 
                        available to consumers.
            ``(3) Effective date.--The standards certified by the 
        Secretary under paragraph (2) shall be effective on the date 
        that is 18 months after the date on which the Secretary 
        certifies the harmonized standards.
    ``(e) Termination.--The Board shall terminate and be dissolved 
after making the recommendations to the Secretary pursuant to 
subsection (d)(1).
    ``(f) Ongoing Review.--Not earlier than 3 years after the 
termination of the Board under subsection (e), and not earlier than 
every 3 years thereafter, the Secretary, in consultation with the 
National Association of Insurance Commissioners and the entities and 
constituencies represented on the Board and the Advisory Panel, shall 
prepare and submit to the appropriate committees of Congress a report 
that assesses the effect of the harmonized standards on access, cost, 
and health insurance market functioning. The Secretary may, based on 
such report and applying the process established for certification 
under subsection (d)(2)(B), in consultation with the National 
Association of Insurance Commissioners and the entities and 
constituencies represented on the Board and the Advisory Panel, update 
the harmonized standards through notice and comment rulemaking.
    ``(g) Publication.--
            ``(1) Listing.--The Secretary shall maintain an up to date 
        listing of all harmonized standards certified under this 
        section on the Internet website of the Department of Health and 
        Human Services.
            ``(2) Sample contract language.--The Secretary shall 
        publish on the Internet website of the Department of Health and 
        Human Services sample contract language that incorporates the 
        harmonized standards certified under this section, which may be 
        used by insurers seeking to qualify as an eligible insurer. The 
        types of harmonized standards that shall be included in sample 
        contract language are the standards that are relevant to the 
        contractual bargain between the insurer and insured.
    ``(h) State Adoption and Enforcement.--Not later than 18 months 
after the certification by the Secretary of harmonized standards under 
this section, the States may adopt such harmonized standards (and 
become an adopting State) and, in which case, shall enforce the 
harmonized standards pursuant to State law.

``SEC. 2933. APPLICATION AND PREEMPTION.

    ``(a) Superceding of State Law.--
            ``(1) In general.--The harmonized standards certified under 
        this subtitle shall supersede any and all State laws of a non-
        adopting State insofar as such State laws relate to the areas 
        of harmonized standards as applied to an eligible insurer, or 
        health insurance coverage issued by a eligible insurer, 
        including with respect to coverage issued to a small business 
        health plan, in a nonadopting State.
            ``(2) Nonadopting states.--This subtitle shall supersede 
        any and all State laws of a nonadopting State (whether enacted 
        prior to or after the date of enactment of this title) insofar 
        as they may--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing health insurance coverage 
                consistent with the harmonized standards; or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing health 
                insurance coverage consistent with the harmonized 
                standards under this subtitle.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting States.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers who offer health insurance coverage in a 
        nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law of a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the harmonized standards under this 
        subtitle.
            ``(4) No effect on preemption.--In no case shall this 
        subtitle be construed to limit or affect in any manner the 
        preemptive scope of sections 502 and 514 of the Employee 
        Retirement Income Security Act of 1974. In no case shall this 
        subtitle be construed to create any cause of action under 
        Federal or State law or enlarge or affect any remedy available 
        under the Employee Retirement Income Security Act of 1974.
    ``(c) Effective Date.--This section shall apply beginning on the 
date that is 18 months after the date on harmonized standards are 
certified by the Secretary under this subtitle.

``SEC. 2934. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The district courts of the United States shall 
have exclusive jurisdiction over civil actions involving the 
interpretation of this subtitle.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 2933.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 2935. AUTHORIZATION OF APPROPRIATIONS; RULE OF CONSTRUCTION.

    ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this subtitle.
    ``(b) Health Savings Accounts.--Nothing in this subtitle shall be 
construed to inhibit the development of health savings accounts 
pursuant to section 223 of the Internal Revenue Code of 1986.''.
                                                       Calendar No. 417

109th CONGRESS

  2d Session

                                S. 1955

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                             April 27, 2006

                       Reported with an amendment
```