I
107TH CONGRESS
2D SESSION
H. R. 4983
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
JUNE 21, 2002
Mr. SANDLIN introduced the following bill; which was referred to the Com-
mittee 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 con-
cerned
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 indi-
vidual health insurance coverage and group health plans
provide for prompt payment for health benefits claims.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Health Benefits Claims
Prompt Payment Act of 2002’’.
SEC. 2. PROMPT PAYMENT OF CLAIMS.
(a) GROUP HEALTH PLANS.—
(1) PUBLIC
HEALTH
SERVICE
ACT
AMEND-
MENTS.—Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at
the end the following new section:
‘‘SEC. 2707. PROMPT PAYMENT OF CLAIMS.
‘‘(a) IN GENERAL.—A group health plan, and a
health insurance issuer offering health insurance coverage
in connection with a group health plan, shall provide for
prompt payment of claims submitted for health care serv-
ices or supplies furnished to a participant, beneficiary, or
enrollee with respect to benefits covered by the plan or
issuer, in a manner that is no less protective than the pro-
visions referred to in subsection (b).
‘‘(b) PROVISIONS.—The provisions referred to in this
subsection are the provisions of section 1842(c)(2) of the
Social Security Act (42 U.S.C. 1395u(c)(2)), as modified
as follows:
‘‘(1) ALTERNATIVE INTEREST RATE.—Instead
of applying the interest rate calculated under section
3902(a) of title 31, United States Code, the interest
rate shall be 1 percent of the payment amount due
plus, in the case of payments not made within 25
days of the due date, an additional 1 percent inter-
est due for every month the payment is past due.
‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—
The reference in such section 1842(c)(2) to ‘not less
than 95 percent of all claims submitted under this
part’ shall be deemed to be a reference to ‘100 per-
cent of all claims submitted under the plan or cov-
erage involved’.
‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State
Insurance Commissioners may establish and impose mone-
tary penalties or other penalties for failure by a group
health plan, and a health insurance issuer offering health
insurance coverage in connection with a group health plan,
to comply with the provisions referred to in subsection
(b).’’.
(2) ERISA AMENDMENTS.—(A) Subpart B of
part 7 of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974 is amended by
adding at the end the following new section:
‘‘SEC. 714. PROMPT PAYMENT OF CLAIMS.
‘‘(a) IN GENERAL.—A group health plan, and a
health insurance issuer offering health insurance coverage
in connection with a group health plan, shall provide for
prompt payment of claims submitted for health care serv-
ices or supplies furnished to a participant or beneficiary
with respect to benefits covered by the plan or issuer, in
a manner that is no less protective than the provisions
referred to in subsection (b).
‘‘(b) PROVISIONS.—The provisions referred to in this
subsection are the provisions of section 1842(c)(2) of the
Social Security Act (42 U.S.C. 1395u(c)(2)), as modified
as follows:
‘‘(1) ALTERNATIVE INTEREST RATE.—Instead
of applying the interest rate calculated under section
3902(a) of title 31, United States Code, the interest
rate shall be 1 percent of the payment amount due
plus, in the case of payments not made within 25
days of the due date, an additional 1 percent inter-
est due for every month the payment is past due.
‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—
The reference in such section 1842(c)(2) to ‘not less
than 95 percent of all claims submitted under this
part’ shall be deemed to be a reference to ‘100 per-
cent of all claims submitted under the plan or cov-
erage involved’.
‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State
Insurance Commissioners may establish and impose mone-
tary penalties or other penalties for failure by a group
health plan, and a health insurance issuer offering health
insurance coverage in connection with a group health plan,
to comply with the provisions referred to in subsection
(b).’’.
(B) The table of contents in section 1 of such
Act is amended by inserting after the item relating
to section 713 the following new item:
‘‘Sec. 714. Prompt payment of claims.’’.
(3) 
INTERNAL
REVENUE
CODE
AMEND-
MENTS.—
(A) IN GENERAL.—Subchapter B of chap-
ter 100 of the Internal Revenue Code of 1986
is amended—
(i) in the table of sections, by insert-
ing after the item relating to section 9812
the following new item:
‘‘Sec. 9813. Prompt payment of claims.’’;
and
(ii) by inserting after section 9812 the
following:
‘‘SEC. 9813. PROMPT PAYMENT OF CLAIMS.
‘‘(a) A group health plan shall provide for prompt
payment of claims submitted for health care services or
supplies furnished to a participant or beneficiary with re-
spect to benefits covered by the plan, in a manner that
is no less protective than the provisions referred to in sub-
section (b).
‘‘(b) PROVISIONS.—The provisions referred to in this
subsection are the provisions of section 1842(c)(2) of the
Social Security Act (42 U.S.C. 1395u(c)(2)), as modified
as follows:
‘‘(1) ALTERNATIVE INTEREST RATE.—Instead
of applying the interest rate calculated under section
3902(a) of title 31, United States Code, the interest
rate shall be 1 percent of the payment amount due
plus, in the case of payments not made within 25
days of the due date, an additional 1 percent inter-
est due for every month the payment is past due.
‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—
The reference in such section 1842(c)(2) to ‘not less
than 95 percent of all claims submitted under this
part’ shall be deemed to be a reference to ‘100 per-
cent of all claims submitted under the plan involved’.
‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State
Insurance Commissioners may establish and impose mone-
tary penalties or other penalties for failure by a group
health plan to comply with the provisions referred to in
subsection (b).’’.
(b) INDIVIDUAL HEALTH INSURANCE.—Part B of
title XXVII of the Public Health Service Act is amended
by inserting after section 2752 the following new section: