This section allows States to set the terms and conditions under which patients may pursue actions in state court resulting from injuries or death for negligence in the provision of insurance. The section does protect health plans from punitive damage awards if they promptly follow the recommendation of an external appeals panel. The bill establishes several safe harbors for employers to specify actions that do not constitute discretionary authority. Those safe harbors include, the decision to include or exclude any specific benefit from the plan and any decision not to intervene while a case is in internal or external review. The bill is generally effective for plan years beginning on or after January 1, 2000.
Special rules exist for collective bargaining agreements.
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