I

103D CONGRESS

1ST SESSION H. R. 1881

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

to promote fairness in administration of health insurance and other

claims under employee welfare benefit plans and to improve enforcement

under such title with respect to such plans.

IN THE HOUSE OF REPRESENTATIVES

APRIL 28, 1993

Mr. BERMAN (for himself, Mr. FORD of Michigan, Mr. WILLIAMS, and Mr.

STARK) introduced the following bill; which was referred to the Committee on Education and Labor

A BILL

To amend title I of the Employee Retirement Income Security Act of 1974 to promote fairness in administration

of health insurance and other claims under employee

welfare benefit plans and to improve enforcement under

such title with respect to such plans.

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 Insurance

5 Claims Fairness Act of 1993’’.
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1 SEC. 2. IMPROVEMENTS IN CLAIMS PROCEDURE.

2 (a) QUALIFIED WELFARE PLAN CLAIM DEFINED.—

3 Section 3 of the Employee Retirement Income Security

4 Act of 1974 (29 U.S.C. 1002) is amended by adding at

5 the end the following new paragraph:

6 ‘‘(42) The term ‘qualified welfare plan claim’ means

7 a notification of an employee welfare benefit plan of a

8 claim for benefits under the plan, or a request for coverage

9 of items or services under the plan, which—

10 ‘‘(A) is in writing or in any other form per11 mitted by the plan, and

12 ‘‘(B) is provided to the plan—

13 ‘‘(i) by the participant, or

14 ‘‘(ii) on behalf of the participant in accord15 ance with the plan by any other person in con16 nection with items or services provided or to be

17 provided by such other person to the partici18 pant or a beneficiary under the plan.

19 For purposes of this paragraph, any request for

20 preauthorization for benefits under the plan shall be treat21 ed as a claim for benefits under the plan.’’.

22 (b) REVIEW REQUIREMENTS FOR QUALIFIED WEL23 FARE PLAN CLAIMS.—

24 (1) IN GENERAL.—Section 503 of the Employee

25 Retirement Income Security Act of 1974 (29 U.S.C.

26 1133) is amended—
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1 (A) by inserting ‘‘(a) IN GENERAL.—’’

2 after ‘‘SEC. 503.’’; and

3 (B) by adding at the end the following new

4 subsections:

5 ‘‘(b) REVIEW REQUIREMENTS FOR QUALIFIED WEL6 FARE PLAN CLAIMS.—An employee welfare benefit plan

7 shall not be treated as complying with the requirements

8 of subsection (a) unless such plan complies with the fol9 lowing requirements:

10 ‘‘(1) TIME LIMIT FOR CONSIDERATION OF COM11 PLETED CLAIMS.—Within 30 days after submission

12 of a qualified welfare plan claim to the plan in com13 plete form, the plan shall provide to the claimant a

14 written notice of the plan’s approval or denial of the

15 claim. Within 5 days after the date of any deter16 mination by the plan to deny the claim, the plan

17 shall provide the claimant with a written notice set18 ting forth the reasons for the denial, referencing the

19 policy provision, condition, or exclusion upon which

20 the denial is based, and including notice of the right

21 to appeal the denial under paragraph (2). In any

22 case in which the claim is filed by another person on

23 behalf of a participant, any notice required to be

24 provided to the claimant under this paragraph shall
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1 not be treated as so provided until such notice also

2 is provided to the participant.

3 ‘‘(2) PLAN’S DUTY TO REVIEW DENIALS UPON

4 TIMELY REQUEST.—The plan shall review its denial

5 of the claim if—

6 ‘‘(A) within 120 days after receipt of writ7 ten notice from the plan of the denial, a written

8 request for reconsideration of the claim is filed

9 with the plan by the claimant (or by the partici10 pant in any case in which the claim was filed

11 by another person on behalf of the participant),

12 or

13 ‘‘(B) the claim is a claim for benefits

14 under the plan other than a request for

15 preauthorization and involves items or services

16 the aggregate value or expected aggregate value

17 of which is reasonably estimated to exceed

18 $10,000.

19 ‘‘(3) TIME LIMIT FOR REVIEW.—The plan shall

20 complete any review required under paragraph (2),

21 and shall provide to the claimant (and to the partici22 pant in any case in which the claim was filed by an23 other person on behalf of the participant) written

24 notice of the plan’s decision on the claim after re25 consideration pursuant to such review—
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1 ‘‘(A) within 30 days after receipt of the re2 quest for reconsideration, in any case described

3 in paragraph (2)(A), or

4 ‘‘(B) within 30 days after the date of the

5 initial determination, in any case described in

6 paragraph (2)(B).

7 ‘‘(4) DE NOVO REVIEWS.—Any review required

8 under paragraph (2)—

9 ‘‘(A) shall be de novo,

10 ‘‘(B) shall be conducted by an individual

11 who did not make the initial decision denying

12 the claim and who is authorized to approve pay13 ment of the claim, and

14 ‘‘(C) shall include review by a qualified

15 physician if the resolution of any issues involved

16 requires medical expertise or a determination of

17 medical necessity.

18 ‘‘(c) TREATMENT OF REQUESTS TO GROUP HEALTH

19 PLANS FOR PREAUTHORIZATION.—

20 ‘‘(1) IN GENERAL.—This subsection applies in

21 the case of any qualified welfare plan claim consist22 ing of a request by a participant (or by any other

23 person on behalf of a participant with respect to

24 items or services to be provided thereby to the par25 ticipant or a beneficiary) for preauthorization of
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1 items or services which is submitted to a group

2 health plan prior to receipt of such items or services

3 and which involves—

4 ‘‘(A) urgent treatment for a life-threaten5 ing illness or condition,

6 ‘‘(B) a high-risk pregnancy, or

7 ‘‘(C) items or services the aggregate value

8 or expected aggregate value of which is reason9 ably estimated to total at least $20,000.

10 ‘‘(2) SHORTENED TIME LIMIT FOR CONSIDER11 ATION OF REQUESTS FOR PREAUTHORIZATION.—

12 Notwithstanding subsection (b)(1), a group health

13 plan shall approve or deny any qualified welfare plan

14 claim consisting of a request for preauthorization de15 scribed in paragraph (1) before 10 days (3 days if

16 the request involves urgent treatment for a life17 threatening illness or condition) after submission of

18 the claim to the plan, irrespective of the complete19 ness of the claim.

20 ‘‘(3) AUTOMATIC REVIEW.—The plan shall re21 view any determination to deny a request for

22 preauthorization described in paragraph (1) before 3

23 days after the date of the initial determination. Any

24 such review shall be conducted in accordance with
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1 the requirements of subsection (b)(4) as if the re2 quest were a claim to which such subsection applies.

3 ‘‘(4) EXPEDITED EXHAUSTION OF PLAN REM4 EDIES.—Upon completion of the review required

5 under paragraph (3), the request for

6 preauthorization shall be treated as a qualified wel7 fare plan claim with respect to which all remedies

8 under the plan provided pursuant to this section are

9 exhausted for purposes of further action under this

10 part.

11 ‘‘(5) DENIAL OF PREVIOUSLY AUTHORIZED

12 CLAIMS NOT PERMITTED.—In any case in which a

13 group health plan approves the request of any per14 son for preauthorization described in paragraph

15 (1)—

16 ‘‘(A) the plan may not subsequently deny

17 any claim by such person for any items or serv18 ices involved, unless the plan makes a showing

19 of intentional misrepresentation by such person

20 of a material fact, and

21 ‘‘(B) if any claim referred to in subpara22 graph (A) is denied in violation of subpara23 graph (A), all remedies under the plan provided

24 pursuant to this section with respect to such
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1 claim shall be treated as exhausted for purposes

2 of further action on the claim under this part.

3 ‘‘(d) TIME LIMIT FOR DETERMINATION OF INCOM4 PLETENESS OF CLAIM.—For purposes of this section, a

5 qualified welfare plan claim shall be treated as filed in

6 complete form for purposes of subsection (b)(1) as of 10

7 days (3 days in the case of any such claim which involves

8 urgent treatment for a life-threatening illness or condition

9 or a high-risk pregnancy) after the date of the submission

10 of the claim, unless, within such period, the plan provides

11 to the claimant (and to the participant in any case in

12 which the claim was filed by another person on behalf of

13 the participant) a written notice of any required matter

14 remaining to be filed in order to complete the claim which

15 includes any forms necessary to complete the claim. Any

16 filing of matter requested by the plan pursuant to this

17 paragraph shall be treated for purposes of this section as

18 an initial filing of the claim.

19 ‘‘(e) ADDITIONAL NOTICE AND DISCLOSURE RE20 QUIREMENTS FOR GROUP HEALTH PLANS.—In the case

21 of a denial by a group health plan of a qualified welfare

22 plan claim—

23 ‘‘(1) if the denial is based in whole or in part

24 on a determination that the claim exceeds reim25 bursement rates based on reasonable and customary
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1 charges, the notice provided pursuant to subsection

2 (a)(1) shall set forth the factual basis for such de3 termination,

4 ‘‘(2) if the denial is based in whole or in part

5 on exclusion of coverage with respect to items or

6 services because such items or services are deter7 mined to comprise an experimental treatment or in8 vestigatory procedure, such notice shall set forth the

9 medical basis for such determination and a descrip10 tion of the process used in making such determina11 tion, and

12 ‘‘(3) if the denial is based in whole or in part

13 on a determination that the treatment is not medi14 cally necessary, such notice shall set forth the medi15 cal basis for such determination and a description of

16 the process used in making such determination.

17 ‘‘(f) RECORDS MAINTENANCE REQUIREMENTS.—

18 Each group health plan shall—

19 ‘‘(1) record and maintain data relating to all

20 qualified welfare plan claims, for which files are

21 pending, or were pending and are closed, during the

22 current plan year and the 2 preceding plan years, in

23 such form and manner as is necessary to enable the

24 plan to readily retrieve, with respect to each claim,
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1 the claim number, the line of coverage, the date of

2 loss, and the date of payment,

3 ‘‘(2) construct and maintain, with respect to

4 each such claim, a file containing in detail such doc5 umentation as is necessary to permit reconstruction

6 of the plan’s activities in relation to the claim, and

7 ‘‘(3) ensure that each document contained in

8 each such file indicates the date it was received by

9 the plan, the date it was processed by the plan, and

10 the date on which any copy of such document which

11 has been mailed by the plan was so mailed.’’.

12 (2) EFFECTIVE DATE.—The amendments made

13 by this subsection shall apply with respect to claims

14 filed after the date of the enactment of this Act.

15 (c) PROHIBITION OF WAIVER CLAUSES.—

16 (1) IN GENERAL.—Section 503(a) of such Act

17 (as amended by subsection (b)) is further amend18 ed—

19 (A) by striking ‘‘shall’’;

20 (B) in paragraph (1), by inserting ‘‘shall’’

21 after ‘‘(1)’’, and by striking ‘‘and’’ at the end;

22 (C) in paragraph (2), by inserting ‘‘shall’’

23 after ‘‘(2)’’, and by striking ‘‘claim.’’ and in24 serting ‘‘claim, and’’; and
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1 (D) by adding after paragraph (2) the fol2 lowing:

3 ‘‘(3) may not require any party to waive any

4 right under the plan or this Act as a condition for

5 approval of any qualified welfare plan claim under

6 the plan, except to the extent otherwise specified in

7 a formal settlement agreement.

8 Any waiver described in paragraph (3) shall be null and

9 void unless such waiver is included in a formal settlement

10 agreement.’’.

11 (2) EFFECTIVE DATE.—The amendments made

12 by paragraph (1) shall apply with respect to claims

13 and requests filed after the date of the enactment of

14 this Act.

15 (d) QUALIFIED WELFARE PLAN CLAIMS ASSISTANCE

16 PROGRAM.—

17 (1) IN GENERAL.—Section 503 of such Act (as

18 amended by the preceding provisions of this section)

19 is further amended by adding at the end the follow20 ing new subsection:

21 ‘‘(f) QUALIFIED WELFARE PLAN CLAIMS ASSIST22 ANCE PROGRAM.—The Secretary shall establish by regula23 tion a qualified welfare plan claims assistance program.

24 Under the program, the Secretary shall make available to

25 participants and beneficiaries under employee welfare ben-
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1 efit plans ongoing assistance in the resolution of qualified

2 welfare plan claims. Such assistance shall include, but not

3 be limited to, reviewing denials of claims, assisting in ap4 peals, contacting employee welfare benefit plans and insur5 ance contractors on behalf of participants and bene6 ficiaries, assisting participants and beneficiaries in obtain7 ing plan documents, and referring of cases for appropriate

8 enforcement action.’’.

9 (2) ESTABLISHMENT OF PROGRAM.—The Sec10 retary of Labor shall establish the qualified welfare

11 plan claims assistance program pursuant to section

12 503(f) of the Employee Retirement Income Security

13 Act of 1974 not later than 180 days after the date

14 of the enactment of this Act.

15 (e) TREATMENT OF SETTLEMENT AGREEMENT AS

16 TERMS OF PLAN.—

17 (1) IN GENERAL.—Section 503(a) of such Act

18 (as amended by subsection (d)) is further amended

19 by adding at the end the following new sentence:

20 ‘‘The terms of any settlement agreement entered

21 into under the procedures established by an em22 ployee welfare benefit plan pursuant to this sub23 section shall be enforceable under this title as if

24 such terms were terms of the plan.’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) shall apply with respect to settle3 ment agreements entered into after the date of the

4 enactment of this Act.

5 (f) DEFINITION OF GROUP HEALTH PLAN.—

6 (1) IN GENERAL.—Section 3 of such Act (as

7 amended by subsection (a)) is further amended by

8 adding at the end the following new paragraph:

9 ‘‘(43) GROUP HEALTH PLAN.—The term ‘group

10 health plan’ means an employee welfare benefit plan that

11 provides health care benefits to participants or bene12 ficiaries directly or through insurance, reimbursement, or

13 otherwise.’’.

14 (2) CONFORMING AMENDMENT.—Section

15 607(1) of such Act (29 U.S.C. 1167(1)) is amended

16 to read as follows:

17 ‘‘(1) GROUP HEALTH PLAN.—For the definition

18 of ‘group health plan’, see section 3(43).’’.

19 (g) DEFINITION OF INSURANCE CONTRACTOR.—Sec20 tion 3 of such Act (as amended by subsection (f)) is fur21 ther amended by adding at the end the following new

22 paragraph:

23 ‘‘(44) INSURANCE CONTRACTOR.—

24 ‘‘(A) IN GENERAL.—The term ‘insurance con25 tractor’ for an employee welfare benefit plan means
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1 any insurer who has entered into a legally binding

2 obligation to the plan or plan sponsor to provide

3 benefits under the plan or to administer claims for

4 such benefits.

5 ‘‘(B) INSURER.—For purposes of subparagraph

6 (A), the term ‘insurer’ means any person or legal en7 tity engaged in the business of insurance, including

8 any insurance company, Lloyds insurer, fraternal

9 benefit society, medical service plan, hospital service

10 plan, health maintenance organization, prepaid lim11 ited health care service plan, and dental, optometric,

12 or other similar health service plan. Such term shall

13 include any agent, broker, or adjuster engaged by

14 such a person or entity and any third party adminis15 trator engaged to administer benefit claims under an

16 employee welfare benefit plan. For purposes of this

17 title, all entities referred to in this subparagraph

18 which are not employee benefit plans shall be

19 deemed to be engaged in the business of insurance.’’.

20 (h) ADDITIONAL DISCLOSURE REQUIREMENTS FOR

21 EMPLOYEE WELFARE BENEFIT PLANS.—

22 (1) IN GENERAL.—Section 104(b)(4) of such

23 Act (29 U.S.C. 1024(b)(4)) is amended in the first

24 sentence by striking ‘‘operated.’’ and inserting ‘‘op25 erated, any insurance contract under which benefits
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1 are or were provided, and, in the case of a group

2 health plan, any fee or reimbursement schedules for

3 health care providers under the plan.’’.

4 (2) EFFECTIVE DATE.—The amendment made

5 by paragraph (1) shall apply with respect to requests

6 for any fee or reimbursement schedule which are

7 made after the date of the enactment of this Act.

8 SEC. 3. EARLY RESOLUTION PROGRAM.

9 (a) IN GENERAL.—Part 5 of subtitle B of title I of

10 the Employee Retirement Income Security Act of 1974 is

11 amended—

12 (1) by inserting after the heading for part 5 the

13 following new heading:

14 ‘‘Subpart A—General Provisions’’;

15 and

16 (2) by adding at the end the following new sub17 part:

18 ‘‘Subpart B—Early Resolution Program

19 ‘‘CHAPTER 1—GENERAL PROVISIONS

20 ‘‘SEC. 521. ESTABLISHMENT OF THE EARLY RESOLUTION

21 PROGRAM; CLAIMS RESOLUTION BOARD.

22 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Secretary

23 shall establish and maintain an Early Resolution Program

24 for employee welfare benefit plans, which shall be adminis25 tered in the Department of Labor by a Claims Resolution
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1 Board (hereinafter in this subpart referred to as the

2 ‘Board’).

3 ‘‘(b) IN GENERAL.—The Board shall—

4 ‘‘(1) administer the Early Resolution Program

5 in accordance with regulations of the Board,

6 ‘‘(2) develop Program policy and procedures,

7 ‘‘(3) maintain a roster of facilitators to act for

8 the Board in mediation proceedings between parties

9 conducted under chapter 2, and coordinate the re10 cruitment, selection, and training of such

11 facilitators,

12 ‘‘(4) provide meeting sites, maintain records,

13 and provide facilitators with administrative support

14 staff,

15 ‘‘(5) establish and maintain attorney referral

16 panels, and

17 ‘‘(6) monitor and evaluate the Program on an

18 ongoing basis.

19 ‘‘(c) MEMBERSHIP.—The Board shall consist of

20 qualified attorneys or other professionals appointed by the

21 Secretary who have expertise in the area of employee wel22 fare benefits. The members shall serve for contempora23 neous terms of 3 years and may be reappointed for one

24 additional term. Vacancies for any term shall be filled for
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1 the remainder of such term in the same manner as the

2 original appointment. Of the members of the Board—

3 ‘‘(1) 2 members shall represent the interests of

4 employee welfare benefit plans and insurance con5 tractors,

6 ‘‘(2) 2 other members shall represent the inter7 ests of plan participants and beneficiaries, and

8 ‘‘(3) the remaining 2 members shall be experi9 enced in mediation and conciliation procedures.

10 No member of the Board may otherwise serve as an em11 ployee of the United States, any State, or any political

12 subdivision of a State. Not more than 3 members shall

13 be of the same political party. Members of the Board shall

14 serve without pay, except that each member shall receive

15 travel expenses, including per diem in lieu of subsistence,

16 in accordance with sections 5702 and 5703 of title 5,

17 United States Code. The Board shall elect one member

18 to serve as Chairman.

19 ‘‘(d) EXECUTIVE DIRECTOR AND STAFF.—The Sec20 retary shall provide the Board with such administrative

21 staff and support services as the Secretary considers nec22 essary and appropriate. The administrative staff shall be

23 headed by an Executive Director appointed by the Board.

24 The Executive Director shall serve as the chief executive

25 officer of the Board and in such capacity shall, with the
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1 assistance of such staff, conduct case intake under the

2 Program and otherwise assist the Board in carrying out

3 its functions. The Executive Director shall be paid at the

4 rate equivalent to the maximum rate for GS–14 of the

5 General Schedule.

6 ‘‘(e) QUORUM.—Four members of the Board shall

7 constitute a quorum necessary for business, and four af8 firmative votes shall be necessary for action.

9 ‘‘SEC. 522. ELIGIBILITY OF CASES FOR SUBMISSION TO

10 EARLY RESOLUTION PROGRAM.

11 ‘‘(a) CASE CRITERIA.—A dispute may be submitted

12 to the Early Resolution Program only if the following re13 quirements are met with respect to such dispute:

14 ‘‘(1) PARTIES.—The dispute consists of an as15 sertion by an individual of one or more claims, based

16 on alleged coverage as a participant or beneficiary

17 under an employee welfare benefit plan, against the

18 plan, one or more insurance contractors for such

19 plan, or both, and a denial of such claims by such

20 plan, any such insurance contractor, or both.

21 ‘‘(2) NATURE OF CLAIM.—Each claim consists

22 of—

23 ‘‘(A) a qualified welfare plan claim; or

24 ‘‘(B) a claim arising out of the failure or

25 refusal by the plan or by an insurance contrac-
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1 tor for the plan to comply with the claimant’s

2 request for information or documents the dis3 closure of which is required under this title (in4 cluding any claim of entitlement to disclosure

5 based on colorable claims to rights to benefits

6 under the plan).

7 ‘‘(3) SUBMISSION AFTER EXHAUSTION OF PLAN

8 REMEDIES AND IN LIEU OF COMMENCEMENT OF

9 CIVIL ACTION.—The claimant has received a final

10 determination regarding the claim under the plan’s

11 claims procedure under section 503, or has otherwise

12 exhausted all remedies under the plan provided pur13 suant to section 503, and no action has been com14 menced by the claimant under section 502 asserting

15 a claim which is asserted by the claimant in the

16 dispute.

17 ‘‘(b) REPRESENTATION IN CASES OF INCOM18 PETENCY.—Any claimant who is unable to have a basic

19 understanding of the Program or its process may be rep20 resented during the proceedings by a legal guardian or

21 other court-appointed representative.

22 ‘‘(c) NOTICE OF PROGRAM AVAILABILITY.—Each

23 employee welfare benefit plan shall provide, as part of its

24 claims review procedure established pursuant to section

25 503(a), that claimants taking part in such procedure will
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1 be informed during such procedure of the availability of

2 the Early Resolution Program.

3 ‘‘SEC. 523. FACILITATORS.

4 ‘‘(a) RECRUITMENT.—The Board shall recruit indi5 viduals to serve as facilitators under the Early Resolution

6 Program from individuals who have the requisite expertise

7 for such service.

8 ‘‘(b) CRITERIA.—In selecting individuals to serve as

9 facilitators, the Board shall consider the following:

10 ‘‘(1) the individual’s experience in dispute reso11 lution.

12 ‘‘(2) the individual’s ability to act impartially;

13 ‘‘(3) the individual’s ability to perform evalua14 tions quickly and to present them in nontechnical

15 terms; and

16 ‘‘(4) the individual’s experience in employee

17 benefit law and, to the extent that the individual’s

18 service will relate to group health plans, the individ19 ual’s expertise pertaining to medical or disability

20 issues;

21 ‘‘(c) TRAINING OF FACILITATORS.—The Board shall

22 provide a training program for all new facilitators. The

23 curriculum shall include the procedures of the Program,

24 relevant ethical obligations, and skills in mediation and

25 conciliation necessary for effective alternative dispute res-
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1 olution in the applicable proceedings. A facilitator may

2 serve only upon completion of such training program.

3 ‘‘(d) ASSIGNMENT OF FACILITATORS TO CASES.—

4 Upon submission of a claim to mediation proceedings

5 under chapter 2, the Board shall appoint a facilitator

6 through a random selection procedure which shall be pre7 scribed in regulations of the Board.

8 ‘‘SEC. 524. COMPENSATION OF FACILITATORS.

9 ‘‘Facilitators serving in the Early Resolution Pro10 gram may, at their election, serve on a pro bono basis or

11 be compensated at a fixed fee to be established by the

12 Board. The Board shall provide for additional compensa13 tion for follow up proceedings. Each facilitator shall re14 ceive travel expenses, including per diem in lieu of subsist15 ence, in accordance with sections 5702 and 5703 of title

16 5, United States Code.

17 ‘‘SEC. 525. ROLE OF ATTORNEYS.

18 ‘‘(a) REPRESENTATION.—Parties may participate

19 pro se or be represented by attorneys throughout the me20 diation proceedings under the Early Resolution Program.

21 ‘‘(b) REFERRALS.—The Board shall maintain attor22 ney referral panels (both fee-paying and pro bono) and

23 referral information regarding other sources of legal as24 sistance. Such panels shall consist of attorneys who are
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1 experienced in relevant employee benefit law and willing

2 to represent the parties referred to them.

3 ‘‘CHAPTER 2—MEDIATION OF DISPUTES

4 ‘‘SEC. 531. INITIATION OF PROCEEDINGS.

5 ‘‘(a) FILING OF ELECTION.—The proceedings under

6 the Early Resolution Program shall be in the form of me7 diation conducted in accordance with this chapter.

8 ‘‘(b) AGREEMENT TO PARTICIPATE.—

9 ‘‘(1) ELECTION BY CLAIMANTS.—A claimant

10 may elect participation in mediation proceedings

11 under this chapter only by entering into a written

12 agreement (including an agreement to comply with

13 the rules of the Program and consent for the Board

14 to contact the employee welfare benefit plan and any

15 insurance contractor involved regarding the agree16 ment), by releasing plan records to the Program for

17 the exclusive use of the facilitator assigned to the

18 mediation, and by paying to the Board a nonrefund19 able filing fee of $100. Such fee shall be deposited

20 as miscellaneous receipts in the general fund of the

21 Treasury and is hereby appropriated solely for pur22 poses of administering this chapter. The fee may be

23 waived in cases of hardship, under standards which

24 shall be prescribed by the Board by regulation.
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1 ‘‘(2) PARTICIPATION BY PLANS AND INSURANCE

2 CONTRACTORS.—Each party whose participation in

3 the mediation proceedings has been elected by a

4 claimant pursuant to paragraph (1) shall participate

5 in, and cooperate fully, in the proceedings. The

6 Board shall provide each such party with a copy of

7 the participation agreement described in paragraph

8 (1), together with a written description of mediation

9 under the Early Resolution Program. Each such

10 party shall submit such copy of the agreement, to11 gether with such party’s authorized signature sig12 nifying receipt of notice of the agreement, to the

13 Board, shall include in such submission to the Board

14 a copy of the written record of the claims procedure

15 completed by the plan or insurance contractor pur16 suant to section 503 with respect to the dispute and

17 all relevant plan documents, and shall pay the Board

18 a nonrefundable filing fee of $100. Such fee shall be

19 deposited as miscellaneous receipts in the general

20 fund of the Treasury and is hereby appropriated

21 solely for purposes of administering this chapter.

22 The relevant documents shall include all documents

23 under which the plan is or was administered or oper24 ated, including copies of any insurance contracts

25 under which benefits are or were provided and, in
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1 the case of a group health plan, any fee or reim2 bursement schedules for health care providers re3 quested by the facilitator.

4 ‘‘SEC. 532. THE MEDIATION PROCEEDINGS.

5 ‘‘(a) IN GENERAL.—A mediation proceeding under

6 this chapter shall be conducted by facilitators recruited,

7 trained, and assigned by the Board under section 523 and

8 in accordance with fair and equitable procedures to be pre9 scribed by the Board which shall be subject to the require10 ments of this chapter.

11 ‘‘(b) ANALYSIS STAGE.—In the commencement of the

12 mediation proceedings with respect to any dispute, the

13 facilitator assigned to the dispute shall—

14 ‘‘(1) identify the necessary parties,

15 ‘‘(2) confirm that the case is eligible for medi16 ation under this chapter,

17 ‘‘(3) ensure that each party is informed of

18 available legal representation, including such services

19 as may be available free of charge under legal assist20 ance programs,

21 ‘‘(4) set a conference date,

22 ‘‘(5) at the option of the facilitator, request po23 sition papers from the parties of not more than 10

24 pages in length, if the facilitator determines that
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1 such papers are needed to clarify the parties’ posi2 tions and issues in dispute, and

3 ‘‘(6) analyze the record of the claims procedure

4 conducted pursuant to section 503 and any position

5 papers submitted by the parties, with appropriate

6 legal assistance provided by the Secretary, to deter7 mine if further case development is needed to clarify

8 the legal and factual issues in dispute, and whether

9 there is any need for additional information and doc10 uments, and request the parties to present any such

11 needed information and documents.

12 ‘‘(c) EVALUATION STAGE.—Upon completion of the

13 procedures described in subsection (b), the mediation pro14 ceedings shall proceed as follows:

15 ‘‘(1) COMMENCEMENT OF CONFERENCE.—The

16 facilitator shall convene a conference between the

17 parties. Each party shall be given the opportunity to

18 make a statement summarizing the facts, issues, and

19 arguments in support of such party’s position, and

20 present, or inform the facilitator of, any additional

21 evidence such party considers to be relevant to the

22 evaluation.

23 ‘‘(2) NEUTRALITY OF FACILITATOR.—The

24 facilitator shall maintain a neutral stance between

25 the parties.
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1 ‘‘(3) PREPARATION OF SETTLEMENT AGREE2 MENT.—If settlement is reached, the facilitator shall

3 assist in the preparation of a written settlement

4 agreement (which shall remain confidential at the

5 option of the parties) and shall ensure that the par6 ties understand the terms of the settlement.

7 ‘‘(4) EVALUATION UPON INITIAL FAILURE TO

8 REACH SETTLEMENT.—If no settlement is reached,

9 the facilitator may evaluate for the parties the likely

10 outcome of further administrative action or litiga11 tion, based on the facilitator’s assessment of the rel12 ative strength of each party’s position. Any such

13 evaluation by the facilitator shall be treated as a

14 proceeding communication to which section 536

15 applies.

16 ‘‘(5) FURTHER PROCEEDINGS.—The facilitator

17 shall then encourage extension of the proceedings if

18 it is likely to lead to settlement or a substantial nar19 rowing of the issues.

20 ‘‘SEC. 533. APPLICABLE TIME LIMITS.

21 ‘‘(a) IN GENERAL.—The mediation proceedings

22 under this chapter with respect to any dispute shall be

23 completed within 180 days after the election to partici24 pate, as follows:
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1 ‘‘(1) PRESENTATION TO PLANS AND INSURANCE

2 CONTRACTORS OF CLAIMANT’S SIGNED AGREE3 MENT.—The Board shall present to each party

4 whose participation in the mediation proceedings has

5 been elected by the claimant the agreement signed

6 by the claimant within 10 days after the date of the

7 claimant’s signature.

8 ‘‘(2) SUBMISSION OF RECEIPT BY PLANS AND

9 INSURANCE CONTRACTORS.—Each party whose par10 ticipation in the mediation proceedings has been

11 elected by the claimant shall submit within 20 days

12 after receipt of the signed agreement its authorized

13 signature signifying receipt of the notice of the

14 agreement.

15 ‘‘(3) ASSIGNMENT OF FACILITATOR.—The

16 facilitator shall be assigned to the case within 30

17 days after the date as of which all necessary author18 ized signatures have been secured.

19 ‘‘(4) COMPLETION OF ANALYSIS STAGE.—The

20 facilitator shall complete all procedures required in

21 the analysis stage described in section 532(a) within

22 45 days after the facilitator’s assignment to the

23 case.

24 ‘‘(5) COMMENCEMENT OF EVALUATION

25 STAGE.—The conference conducted under the eval-
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1 uation stage described in section 532(b) shall com2 mence not later than the earlier of 60 days after the

3 date of the assignment of the facilitator or 15 days

4 after completion of the analysis stage described in

5 section 532(a).

6 ‘‘(b) EXTENSION OF PROCEEDINGS.—The proceed7 ings may be extended for not more than 30 days, but only

8 at the written request of, or upon the written consent of,

9 the claimant.

10 ‘‘SEC. 534. LEGAL EFFECT OF PARTICIPATION IN PROCEED11 INGS.

12 ‘‘(a) PROCESS NONBINDING.—Findings and conclu13 sions made in the mediation proceedings under this chap14 ter shall be treated as advisory in nature and nonbinding.

15 Except as provided in subsection (b), the rights of the par16 ties under subpart A shall not be affected by participation

17 in the mediation proceedings under this chapter.

18 ‘‘(b) RESOLUTION THROUGH SETTLEMENT AGREE19 MENT.—If a case is settled through participation in the

20 mediation proceedings under this chapter, the facilitator

21 shall assist the parties in drawing up an agreement which

22 shall constitute, upon signature of the parties, a binding

23 contract between the parties, which shall be enforceable

24 under section 537, and which shall be enforceable under
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1 this title as if the terms of such agreement were terms

2 of the plan.

3 ‘‘(c) PRESERVATION OF RIGHTS OF NON-PARTIES.—

4 The settlement agreement shall not have the effect of

5 waiving or otherwise affecting any rights to review under

6 section 502 or any other right under this title or the plan

7 with respect to any person who is not a party to the settle8 ment agreement.

9 ‘‘SEC. 535. PROCEDURAL RULES.

10 ‘‘(a) INAPPLICABILITY OF FORMAL RULES OF EVI11 DENCE.—Formal rules of evidence shall not apply to medi12 ation proceedings under this chapter. All statements made

13 and evidence presented in the proceedings shall be admis14 sible in such proceedings. The facilitator shall be the sole

15 judge of the proper weight to be afforded to each submis16 sion.

17 ‘‘(b) INAPPLICABILITY OF OATH REQUIREMENTS.—

18 The parties to the mediation proceedings under this chap19 ter shall not be required to make statements or present

20 evidence under oath.

21 ‘‘SEC. 536. CONFIDENTIALITY.

22 ‘‘(a) FACILITATORS.—Except as provided in sub23 sections (d) and (e), a facilitator in a mediation proceeding

24 under this chapter shall not voluntarily disclose or through

25 discovery or compulsory process be required to disclose
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1 any information concerning any proceeding communica2 tion or any communication provided in confidence to the

3 facilitator, unless—

4 ‘‘(1) all parties to the proceeding and the

5 facilitator consent in writing, and, if the proceeding

6 communication was provided by a nonparty partici7 pant, that the participant also consents in writing,

8 ‘‘(2) the proceeding communication has already

9 been made public,

10 ‘‘(3) the proceeding communication is required

11 by statute to be made public, but a facilitator may

12 make such communication public only if no other

13 person is reasonably available to disclose the commu14 nication, or

15 ‘‘(4) a court determines that such testimony or

16 disclosure is necessary to—

17 ‘‘(A) prevent a manifest injustice,

18 ‘‘(B) help establish a violation of law, or

19 ‘‘(C) prevent harm to the public health or

20 safety,

21 of sufficient magnitude in the particular case to out22 weigh the integrity of the proceedings in general by

23 reducing the confidence of parties in future cases

24 that their communications will remain confidential.
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1 ‘‘(b) PARTIES.—A party to a mediation proceeding

2 under this chapter shall not voluntarily disclose or through

3 discovery or compulsory process be required to disclose

4 any information concerning any proceeding communica5 tion, unless—

6 ‘‘(1) the communication was prepared by the

7 party seeking disclosure,

8 ‘‘(2) all parties to the proceeding consent in

9 writing,

10 ‘‘(3) the proceeding communication has already

11 been made public,

12 ‘‘(4) the proceeding communication is required

13 by statute to be made public,

14 ‘‘(5) a court determines that such testimony or

15 disclosure is necessary to—

16 ‘‘(A) prevent a manifest injustice,

17 ‘‘(B) help establish a violation of law, or

18 ‘‘(C) prevent harm to the public health or

19 safety,

20 of sufficient magnitude in the particular case to out21 weigh the integrity of the proceedings in general by

22 reducing the confidence of parties in future cases

23 that their communications will remain confidential,

24 ‘‘(6) the proceeding communication is relevant

25 to determining the existence or meaning of an agree-
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1 ment or award that resulted from the proceeding or

2 to the enforcement of such an agreement or award,

3 or

4 ‘‘(7) the proceeding communication was pro5 vided to or was available to all parties to the pro6 ceeding.

7 ‘‘(c) INADMISSIBILITY OF DISCLOSED INFORMA8 TION.—Any proceeding communication that is disclosed in

9 violation of subsection (a) or (b) shall not be admissible

10 in any proceeding relating to the issues in controversy with

11 respect to which the communication was made.

12 ‘‘(d) ALTERNATIVE PROCEDURES.—The parties may

13 agree to alternative confidential procedures for disclosures

14 by a facilitator. Upon such agreement the parties shall in15 form the facilitator before the commencement of the pro16 ceeding of any modifications to the provisions of sub17 section (a) that will govern the confidentiality of the pro18 ceeding. If the parties do not so inform the facilitator, sub19 section (a) shall apply.

20 ‘‘(e) NOTICE OF DEMANDS FOR DISCLOSURE.—If a

21 demand for disclosure, by way of discovery request or

22 other legal process, is made upon a facilitator regarding

23 a proceeding communication, the facilitator shall make

24 reasonable efforts to notify the parties and any affected

25 nonparty participants of the demand. In any case in which
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1 such disclosure would otherwise be in violation of this sec2 tion, the facilitator may perform such disclosure in accord3 ance with such demand only if each party and affected

4 nonparty participant who receives such notice consents to

5 such disclosure within 15 calendar days after the date of

6 the issuance of such notification.

7 ‘‘(f) EXCEPTIONS.—

8 ‘‘(1) INFORMATION OTHERWISE DISCLOS9 ABLE.—Nothing in this section shall prevent the dis10 covery or admissibility of any evidence that is other11 wise discoverable, merely because the evidence was

12 presented in the course of a mediation proceeding

13 under this chapter.

14 ‘‘(2) DOCUMENTATION OF AGREEMENTS OR OR15 DERS.—Subsections (a) and (b) shall have no effect

16 on the information and data that are necessary to

17 document an agreement reached or order issued pur18 suant to a mediation proceeding under this chapter.

19 ‘‘(3) RESEARCH OR EDUCATIONAL PURPOSES.—

20 Subsections (a) and (b) shall not prevent the gather21 ing of information for research or educational pur22 poses so long as the parties and the specific issues

23 in controversy are not identifiable.

24 ‘‘(4) DISPUTES BETWEEN FACILITATOR AND A

25 PARTY.—Subsections (a) and (b) shall not prevent
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1 use of a proceeding communication to resolve a dis2 pute between the facilitator in a mediation proceed3 ing under this chapter and a party to or participant

4 in such proceeding, so long as such proceeding com5 munication is disclosed only to the extent necessary

6 to resolve such dispute.

7 ‘‘(g) CIVIL REMEDIES.—

8 ‘‘(1) CIVIL PENALTY.—The Secretary may as9 sess a civil penalty against any person who discloses

10 information in violation of subsection (a) or (b) in

11 the amount of three times the amount of the claim

12 involved.

13 ‘‘(2) DISQUALIFICATION FROM SERVICE.—Any

14 facilitator who discloses information in violation of

15 subsection (a) shall be disqualified from further

16 service as a facilitator under this subpart.

17 ‘‘(h) DEFINITIONS.—For purposes of this section—

18 ‘‘(1) PROCEEDING COMMUNICATION.—The term

19 ‘proceeding communication’ means any oral or writ20 ten communication prepared for the purposes of a

21 mediation proceeding under this chapter, including

22 any memoranda, notes, or work product of the

23 facilitator, parties, or nonparty participants, except

24 that such term does not include a written agreement
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1 to enter into the proceeding or a final written agree2 ment reached as a result of the proceeding.

3 ‘‘(2) IN CONFIDENCE.—The term ‘in con4 fidence’ means, with respect to information, that the

5 information is provided—

6 ‘‘(A) with the expressed intent of the

7 source that it not be disclosed, or

8 ‘‘(B) under circumstances that would cre9 ate the reasonable expectation on behalf of

10 the source that the information will not be

11 disclosed.

12 ‘‘SEC. 537. ENFORCEMENT OF SETTLEMENT AGREEMENTS.

13 ‘‘(a) CONFIRMATION; JURISDICTION; PROCEDURE.—

14 At any time within one year after the date of a settlement

15 agreement entered into under this chapter any party to

16 the agreement may apply to the United States district

17 court in and for the district within which such agreement

18 was made for an order confirming the agreement. Upon

19 such application, the court shall grant such an order un20 less the agreement is vacated, modified, or corrected as

21 prescribed in subsection (b) or (c). Notice of the applica22 tion shall be served upon the adverse party. Upon such

23 notice, the court shall have jurisdiction of such adverse

24 party as though such adverse party had appeared gen25 erally in the proceeding. If the adverse party is a resident
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1 of the district within which the award was made, such

2 service shall be made upon the adverse party or such par3 ty’s attorney as prescribed by law for service of notice of

4 motion in any action in the same court. If the adverse

5 party is a nonresident, the notice of the application shall

6 be served by the marshal of any district within which the

7 adverse party may be found in like manner as other proc8 ess of the court.

9 ‘‘(b) VACATION; GROUNDS; REHEARING.—The court

10 may make an order vacating the settlement agreement

11 upon the application of any party to the agreement if—

12 ‘‘(1) the agreement was procured under duress

13 or by corruption, fraud, or undue means, or

14 ‘‘(2) there was evident partiality or corruption

15 in the facilitator who assisted in the making of the

16 agreement.

17 ‘‘(c) MODIFICATION OR CORRECTION; GROUNDS;

18 ORDER.—The court may make an order modifying or cor19 recting the settlement agreement upon the application of

20 any party to the agreement if—

21 ‘‘(1) there was a material miscalculation of fig22 ures or a material mistake in the description of any

23 person, thing, or property referred to in the agree24 ment,
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1 ‘‘(2) the agreement relates to a matter not sub2 mitted in the conference proceedings, unless it is a

3 matter not affecting the merits of the agreement

4 upon the matter submitted, or

5 ‘‘(3) the agreement is imperfect in matter of

6 form not affecting the merits of the controversy.

7 The order may modify and correct the agreement, so as

8 to effect the intent thereof and promote justice between

9 the parties.

10 ‘‘(d) NOTICE OF MOTIONS TO VACATE OR MODIFY;

11 SERVICE; STAY OF PROCEEDINGS.—Notice of a motion to

12 vacate, modify, or correct a settlement agreement made

13 under this subpart must be served upon the adverse party

14 or the party’s attorney within 90 days after the settlement

15 agreement is made. If the adverse party is a resident of

16 the district within which the agreement is made, such

17 service shall be made upon the adverse party or the party’s

18 attorney as prescribed by law for service of notice of mo19 tion in an action in the same court. If the adverse party

20 is a nonresident, the notice of the application shall be

21 served by the marshal of any district within which the ad22 verse party may be found in like manner as other process

23 of the court. For the purposes of the motion any judge

24 who may make an order to stay the proceedings in an ac25 tion brought in the same court may make an order, to
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1 be served with the notice of motion, staying the proceed2 ings of the adverse party to enforce the agreement.

3 ‘‘(e) PAPERS FILED WITH ORDER ON MOTIONS;

4 JUDGMENT; DOCKETING; FORCE AND EFFECT; EN5 FORCEMENT.—

6 ‘‘(1) FILING OF PAPERS.—The party moving

7 for an order confirming, modifying, or correcting a

8 settlement agreement made under this chapter shall,

9 at the time such order is filed with the clerk for the

10 entry of judgment thereon, also file the following

11 papers with the clerk:

12 ‘‘(A) the agreement, and

13 ‘‘(B) each notice, affidavit, or other paper

14 used upon an application to confirm, modify, or

15 correct the agreement, and a copy of each order

16 of the court upon such an application.

17 ‘‘(2) DOCKETING OF JUDGMENT.—The judg18 ment shall be docketed as if it were rendered in an

19 action.

20 ‘‘(3) FORCE AND EFFECT; ENFORCEMENT.—

21 The judgment so entered shall have the same force

22 and effect, in all respects, as a judgment in an ac23 tion, and shall be subject to all the provisions of law

24 relating to such a judgment. Such judgment, includ25 ing the terms of the agreement (as confirmed, modi-
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1 fied, or corrected), may be enforced as if it had been

2 rendered in an action in the court in which it is

3 entered.

4 ‘‘(f) APPEALS.—An appeal may be taken from an

5 order confirming or denying confirmation of a settlement

6 agreement made under this chapter or modifying, correct7 ing, or vacating such an agreement.’’.

8 (b) SCOPE OF COURT ENFORCEMENT IN CASES OF

9 MEDIATION.—Section 502(a) of such Act (29 U.S.C.

10 1132(a)) is amended by adding at the end the following

11 new flush sentences:

12 ‘‘The applicability of this subsection to any qualified wel13 fare plan claim shall not be affected by participation in

14 mediation proceedings under chapter 2 of subpart B re15 garding such claim except to the extent otherwise required

16 under the terms of any settlement agreement entered into

17 in such proceedings.’’.

18 (c) MANDATORY COMPLIANCE WITH REQUESTS FOR

19 INFORMATION BY FACILITATORS IN MEDIATION PRO20 CEEDINGS.—Section 502 of such Act (29 U.S.C. 1132)

21 is amended—

22 (1) in subsection (a)(5), by striking ‘‘or’’ at the

23 end;

24 (2) in subsection (a)(6), by striking the period

25 at the end and inserting ‘‘; or’’;
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1 (3) by inserting after subsection (a)(6) the fol2 lowing new paragraph:

3 ‘‘(7) by the Claims Resolution Board to collect

4 any civil penalty under subsection (c)(4).’’; and

5 (4) by inserting at the end of subsection (c) the

6 following new paragraph:

7 ‘‘(4) The Claims Resolution Board may assess a civil

8 penalty against any party to any mediation proceeding

9 under chapter 2 of subpart B of this part of up to $1,000

10 a day from the date of such party’s failure or refusal to

11 supply relevant plan documents as required under section

12 531(b)(2) or such additional information or documents as

13 are requested by the facilitator pursuant to section

14 532(b)(6).’’.

15 (d) ENFORCEMENT OF CIVIL REMEDIES FOR VIOLA16 TIONS OF CONFIDENTIALITY.—Section 502(a) of such Act

17 (29 U.S.C. 1132(a)) is amended—

18 (1) in paragraph (2), by inserting ‘‘or section

19 536(g)(2)’’ after ‘‘section 409’’; and

20 (2) in paragraph (6), by inserting ‘‘or section

21 536(g)(1)’’ after ‘‘(l)’’.

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

23 in section 1 of such Act is amended—

24 (1) by inserting before the item relating to sec25 tion 501 the following:
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‘‘Subpart A—General Provisions’’;

1 and

2 (2) by inserting before the items relating to

3 part 6 the following new items:

‘‘Subpart B—Early Resolution Program

‘‘CHAPTER 1—GENERAL PROVISIONS

‘‘Sec. 521. Establishment of the Early Resolution Program; Claims Resolution

Board.

‘‘Sec. 522. Eligibility of cases for submission to Early Resolution Program.

‘‘Sec. 523. Facilitators.

‘‘Sec. 524. Compensation of facilitators.

‘‘Sec. 525. Role of attorneys.

‘‘CHAPTER 2—MEDIATION OF DISPUTES

‘‘Sec. 531. Initiation of proceedings.

‘‘Sec. 532. The mediation proceedings.

‘‘Sec. 533. Applicable time limits.

‘‘Sec. 534. Legal effect of participation in proceedings.

‘‘Sec. 535. Procedural rules.

‘‘Sec. 536. Confidentiality.

‘‘Sec. 537. Enforcement of settlement agreements.’’.

4 (f) EFFECTIVE DATE AND RELATED RULES.—

5 (1) IN GENERAL.—The Claims Resolution

6 Board shall issue the initial regulations necessary to

7 carry out the amendments made by this section not

8 later than 1 year after the date on which a quorum

9 of the initial members of the Board are appointed.

10 The amendments made by this section shall apply

11 with respect to disputes submitted to the Board

12 after such 1-year period.

13 (2) APPOINTMENT OF INITIAL MEMBERS.—The

14 Secretary of Labor shall appoint the initial members
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1 of the Claims Resolution Board not later than 180

2 days after the date of the enactment of this Act.

3 (3) TREATMENT OF CERTAIN COLLECTIVELY

4 BARGAINED PLANS.—The amendments made by this

5 section shall not apply with respect to an employee

6 welfare benefit plan if—

7 (A) such plan is in effect on the date of

8 the enactment of this Act,

9 (B) such plan is, as of such date, main10 tained pursuant to one or more collective bar11 gaining agreements between one or more em12 ployee organizations and one or more employ13 ers, and

14 (C) the terms of such agreements include,

15 as of such date, and continue to include there16 after, a provision explicitly providing procedures

17 for resolution of claims disputes by arbitration,

18 mediation, or both between participants and

19 beneficiaries and the plan and (if any) insur20 ance contractors for the plan.

21 SEC. 4. IMPROVEMENTS IN ENFORCEMENT.

22 (a) RECOVERY OF DAMAGES FOR FAILURE TO PRO23 VIDE BENEFITS AS REQUIRED UNDER AN EMPLOYEE

24 WELFARE BENEFIT PLAN.—
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1 (1) IN GENERAL.—Section 502(c) of the Em2 ployee Retirement Income Security Act of 1974 (29

3 U.S.C. 1132(c)) (as amended by the preceding provi4 sions of this Act) is further amended by adding at

5 the end the following new paragraph:

6 ‘‘(5)(A) In any case in which a qualified welfare plan

7 claim is denied in violation of the terms of the plan or

8 of this title or in which any provision of this title is vio9 lated with respect to the administration of the plan in con10 nection with such a claim or the processing of such a claim

11 thereunder, the named fiduciary under the plan and any

12 insurance contractor for the plan administering such claim

13 shall be jointly and severally liable to any participant, ben14 eficiary, employer, employee organization, or plan ag15 grieved by such failure or violation for actual damages (in16 cluding compensatory and consequential damages proxi17 mately caused by such failure or violation), except that,

18 subject to subparagraph (B), damages for such failure or

19 violation shall not include punitive damages.

20 ‘‘(B) In any case in which a failure or violation de21 scribed in subparagraph (A) constitutes fraud, each party

22 liable under subparagraph (A) may, in the court’s discre23 tion, be liable to the plaintiff for punitive or exemplary

24 damages in addition to damages described in subpara25 graph (A).
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1 ‘‘(C) A named fiduciary under a multiemployer plan

2 shall not be liable under this paragraph.

3 ‘‘(D) The remedies provided under this paragraph

4 shall be in addition to remedies otherwise provided under

5 this section.’’.

6 (2) STANDING OF EMPLOYERS, EMPLOYEE OR7 GANIZATIONS, AND PLANS IN ACTIONS FOR FAILURE

8 TO MEET REQUIREMENTS WITH RESPECT TO BENE9 FIT CLAIMS.—

10 (A) IN GENERAL.—Section 502(a) of such

11 Act (29 U.S.C. 1132(a)) (as amended by sec12 tion 3(c)) is further amended—

13 (i) in subsection (a)(6), by striking

14 ‘‘or’’ at the end;

15 (ii) in subsection (a)(7), by striking

16 the period and inserting ‘‘; or’’; and

17 (iii) by inserting after subsection

18 (a)(7) the following new paragraph:

19 ‘‘(8) by an employer, an employee organization,

20 or a plan for the relief provided under subsection

21 (c)(5).’’.

22 (B) CONFORMING AMENDMENT.—Section

23 502(e)(1) of such Act (29 U.S.C. 1132(e)(1)) is

24 amended by striking ‘‘subsection (a)(1)(B) of

25 this section’’ each place it appears and inserting
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1 ‘‘paragraph (1)(A) (with respect to relief under

2 subsection (c)(5)), paragraph (1)(B), or para3 graph (7) of subsection (a)’’.

4 (b) ACTIONS FOR VIOLATIONS OF STATUTORY RE5 QUIREMENTS.—Section 502(a)(1)(B) of such Act (29

6 U.S.C. 1132(a)(1)(B)) is amended by inserting ‘‘or the

7 provisions of this title’’ after ‘‘plan’’ each place it appears.

8 (c) ACTIONS BY PLANS AGAINST FIDUCIARIES.—Sec9 tion 502(a)(2) of such Act (29 U.S.C. 1132(a)(2)) is

10 amended by striking ‘‘beneficiary or fiduciary’’ and insert11 ing ‘‘beneficiary, fiduciary, or plan’’.

12 (d) EFFECTIVE DATE.—The amendments made by

13 this section shall apply with respect to failures occurring

14 or commencing on or after the date of the enactment of

15 this Act.

16 SEC. 5. ATTORNEY’S FEES AND COSTS OF ACTION.

17 (a) IN GENERAL.—Section 502(g) of the Employee

18 Retirement Income Security Act of 1974 (29 U.S.C.

19 1132(g)) is amended—

20 (1) in paragraph (1), by inserting ‘‘or (3)’’

21 after ‘‘paragraph (2)’’; and

22 (2) by adding at the end the following new

23 paragraph:

24 ‘‘(3) In any action or settlement proceeding under

25 this title with respect to an employee welfare benefit plan
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1 by a participant or beneficiary under such plan in which

2 the participant or beneficiary prevails or substantially pre3 vails, the participant or beneficiary shall be entitled to rea4 sonable attorney’s fees and other costs of the action, in5 cluding reasonable expert witness fees, to be paid by the

6 opposing party. Fees to which the participant or bene7 ficiary is entitled under this paragraph shall be at gen8 erally prevailing hourly rates.’’.

9 (b) EFFECTIVE DATE.—The amendments made by

10 subsection (a) shall apply with respect to failures occur11 ring or commencing on or after the date of the enactment

12 of this Act.

13 SEC. 6. CLARIFICATION OF ABILITY OF STATES TO REGU14 LATE THE BUSINESS OF INSURANCE.

15 (a) IN GENERAL.—Section 514(b) of the Employee

16 Retirement Income Security Act of 1974 (29 U.S.C.

17 1144(b)) is amended by adding at the end the following

18 new paragraph:

19 ‘‘(9) Subsection (a) shall not apply to any provision

20 of State law to the extent that such provision—

21 ‘‘(A) provides for the establishment or mainte22 nance of any program making available to partici23 pants and beneficiaries ongoing assistance in the

24 resolution of qualified welfare plan claims under

25 group health plans, or
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1 ‘‘(B) provides for the licensing or regulation of

2 insurance contractors or provides sanctions against

3 insurance contractors for unfair claims settlement

4 practices.’’.

5 (b) EFFECTIVE DATE.—The amendment made by

6 subsection (a) shall apply with respect to violations occur7 ring on or after the date of the enactment of this Act.

8 SEC. 7. STUDY OF PREEMPTION PROVISIONS.

9 (a) STUDY.—The Secretary of Labor (or the Sec10 retary’s delegate) shall conduct a study on the effects of

11 the provisions of section 514 of the Employee Retirement

12 Income Security Act of 1974 which provide for the pre13 emption of State laws relating to employee benefit plans.

14 (b) REPORT.—Not later than one year after the date

15 of the enactment of this Act, the Secretary of Labor shall

16 submit to the Committee on Education and Labor of the

17 House of Representatives and the Committee on Labor

18 and Human Resources of the Senate the results of the

19 study conducted under subsection (a), together with any

20 recommendations for legislative reforms which the Sec21 retary finds necessary.

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