I 

108TH CONGRESS 

1ST SESSION H. R. 848

To amend the Employee Retirement Income Security Act of 1974, the Public 

Health Service Act, and the Internal Revenue Code of 1986 to require 

that group and individual health insurance coverage and group health 

plans provide for prompt payment for health benefits claims. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 13, 2003

Mr. SANDLIN introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on 

Education and the Workforce and Ways and Means, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL

To amend the Employee Retirement Income Security Act 

of 1974, the Public Health Service Act, and the Internal 

Revenue Code of 1986 to require that group and individual health insurance coverage and group health plans 

provide for prompt payment for health benefits claims.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Health Benefits Claims 

5 Prompt Payment Act of 2003’’. 
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1 SEC. 2. PROMPT PAYMENT OF CLAIMS. 

2 (a) GROUP HEALTH PLANS.—

3 (1) PUBLIC HEALTH SERVICE ACT AMEND4 MENTS.—Subpart 2 of part A of title XXVII of the 

5 Public Health Service Act is amended by adding at 

6 the end the following new section: 

7 ‘‘SEC. 2707. PROMPT PAYMENT OF CLAIMS. 

8 ‘‘(a) IN GENERAL.—A group health plan, and a 

9 health insurance issuer offering health insurance coverage 

10 in connection with a group health plan, shall provide for 

11 prompt payment of claims submitted for health care serv12 ices or supplies furnished to a participant, beneficiary, or 

13 enrollee with respect to benefits covered by the plan or 

14 issuer, in a manner that is no less protective than the pro15 visions referred to in subsection (b). 

16 ‘‘(b) PROVISIONS.—The provisions referred to in this 

17 subsection are the provisions of section 1842(c)(2) of the 

18 Social Security Act (42 U.S.C. 1395u(c)(2)), as modified 

19 as follows: 

20 ‘‘(1) ALTERNATIVE INTEREST RATE.—Instead 

21 of applying the interest rate calculated under section 

22 3902(a) of title 31, United States Code, the interest 

23 rate shall be 1 percent of the payment amount due 

24 plus, in the case of payments not made within 25 

25 days of the due date, an additional 1 percent inter26 est due for every month the payment is past due. 
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1 ‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—

2 The reference in such section 1842(c)(2) to ‘not less 

3 than 95 percent of all claims submitted under this 

4 part’ shall be deemed to be a reference to ‘100 per5 cent of all claims submitted under the plan or cov6 erage involved’. 

7 ‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State 

8 Insurance Commissioners may establish and impose mone9 tary penalties or other penalties for failure by a group 

10 health plan, and a health insurance issuer offering health 

11 insurance coverage in connection with a group health plan, 

12 to comply with the provisions referred to in subsection 

13 (b).’’. 

14 (2) ERISA AMENDMENTS.—(A) Subpart B of 

15 part 7 of subtitle B of title I of the Employee Re16 tirement Income Security Act of 1974 is amended by 

17 adding at the end the following new section: 

18 ‘‘SEC. 714. PROMPT PAYMENT OF CLAIMS. 

19 ‘‘(a) IN GENERAL.—A group health plan, and a 

20 health insurance issuer offering health insurance coverage 

21 in connection with a group health plan, shall provide for 

22 prompt payment of claims submitted for health care serv23 ices or supplies furnished to a participant or beneficiary 

24 with respect to benefits covered by the plan or issuer, in 
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1 a manner that is no less protective than the provisions 

2 referred to in subsection (b). 

3 ‘‘(b) PROVISIONS.—The provisions referred to in this 

4 subsection are the provisions of section 1842(c)(2) of the 

5 Social Security Act (42 U.S.C. 1395u(c)(2)), as modified 

6 as follows: 

7 ‘‘(1) ALTERNATIVE INTEREST RATE.—Instead 

8 of applying the interest rate calculated under section 

9 3902(a) of title 31, United States Code, the interest 

10 rate shall be 1 percent of the payment amount due 

11 plus, in the case of payments not made within 25 

12 days of the due date, an additional 1 percent inter13 est due for every month the payment is past due. 

14 ‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—

15 The reference in such section 1842(c)(2) to ‘not less 

16 than 95 percent of all claims submitted under this 

17 part’ shall be deemed to be a reference to ‘100 per18 cent of all claims submitted under the plan or cov19 erage involved’. 

20 ‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State 

21 Insurance Commissioners may establish and impose mone22 tary penalties or other penalties for failure by a group 

23 health plan, and a health insurance issuer offering health 

24 insurance coverage in connection with a group health plan,
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1 to comply with the provisions referred to in subsection 

2 (b).’’. 

3 (B) The table of contents in section 1 of such 

4 Act is amended by inserting after the item relating 

5 to section 713 the following new item:

‘‘Sec. 714. Prompt payment of claims.’’.

6 (3) INTERNAL REVENUE CODE AMEND7 MENTS.—Subchapter B of chapter 100 of the Inter8 nal Revenue Code of 1986 is amended—

9 (i) in the table of sections, by insert10 ing after the item relating to section 9812 

11 the following new item:

‘‘Sec. 9813. Prompt payment of claims.’’; and

12 (ii) by inserting after section 9812 the 

13 following: 

14 ‘‘SEC. 9813. PROMPT PAYMENT OF CLAIMS. 

15 ‘‘A group health plan shall provide for prompt pay16 ment of claims submitted for health care services or sup17 plies furnished to a participant or beneficiary with respect 

18 to benefits covered by the plan, in a manner that is no 

19 less protective than the provisions referred to in subsection 

20 (b). 

21 ‘‘(b) PROVISIONS.—The provisions referred to in this 

22 subsection are the provisions of section 1842(c)(2) of the 

23 Social Security Act (42 U.S.C. 1395u(c)(2)), as modified 

24 as follows: 
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1 ‘‘(1) ALTERNATIVE INTEREST RATE.—Instead 

2 of applying the interest rate calculated under section 

3 3902(a) of title 31, United States Code, the interest 

4 rate shall be 1 percent of the payment amount due 

5 plus, in the case of payments not made within 25 

6 days of the due date, an additional 1 percent inter7 est due for every month the payment is past due. 

8 ‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—

9 The reference in such section 1842(c)(2) to ‘not less 

10 than 95 percent of all claims submitted under this 

11 part’ shall be deemed to be a reference to ‘100 per12 cent of all claims submitted under the plan involved’. 

13 ‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State 

14 Insurance Commissioners may establish and impose mone15 tary penalties or other penalties for failure by a group 

16 health plan to comply with the provisions referred to in 

17 subsection (b).’’.

18 (b) INDIVIDUAL HEALTH INSURANCE.—Part B of 

19 title XXVII of the Public Health Service Act is amended 

20 by inserting after section 2752 the following new section: 

21 ‘‘SEC. 2753. PROMPT PAYMENT OF CLAIMS. 

22 ‘‘The provisions of section 2707 shall apply to health 

23 insurance coverage offered by a health insurance issuer 

24 in the individual market in the same manner as they apply 

25 to health insurance coverage offered by a health insurance 
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1 issuer in connection with a group health plan in the small 

2 or large group market.’’. 

3 (c) PROTECTION OF STATES’ RIGHTS.—Any issue re4 lating to prompt payment for health care services or sup5 plies that is not governed by any provision of law as 

6 amended by this section shall be governed by otherwise 

7 applicable State or Federal law. This section (and the pro8 visions amended by this section) does not preempt or su9 persede any law that imposes shorter time frames for pay10 ment, greater penalties for non-payment, and, in general, 

11 provides greater assurances that group health plans and 

12 health insurance issuers provide for prompt payment of 

13 claims submitted for health care services or supplies fur14 nished to a participant, beneficiary, or enrollee with re15 spect to benefits covered by the plan or issuer. 

16 (d) EFFECTIVE DATES.—

17 (1) GROUP HEALTH PLANS AND GROUP

18 HEALTH INSURANCE COVERAGE.—The amendments 

19 made by subsection (a) apply with respect to group 

20 health plans for plan years beginning on or after 

21 January 1, 2004. 

22 (2) INDIVIDUAL HEALTH INSURANCE COV23 ERAGE.—The amendment made by subsection (b) 

24 apply with respect to health insurance coverage of-
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1 fered, sold, issued, renewed, in effect, or operated in 

2 the individual market on or after such date.

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