‘‘(1) PREAUTHORIZATION AND UTILIZATION RE-
VIEW PROCEDURES.—A description of the basis on
which any preauthorization requirement or any utili-
zation review requirement has resulted in the ad-
verse coverage decision.
‘‘(2) PROCEDURES FOR DETERMINING EXCLU-
SIONS BASED ON MEDICAL NECESSITY OR ON INVES-
TIGATIONAL
ITEMS
OR
EXPERIMENTAL
TREAT-
MENTS.—If the adverse coverage decision is based
on a determination relating to medical necessity or
to an investigational item or an experimental treat-
ment or technology, a description of the procedures
and medically-based criteria used in such decision.
‘‘(g) INFORMATION AVAILABLE ON REQUEST.—
‘‘(1) ACCESS TO PLAN BENEFIT INFORMATION
IN ELECTRONIC FORM.—
‘‘(A) IN GENERAL.—In addition to the in-
formation required to be provided under section
104(b)(4), a group health plan may, upon writ-
ten request (made not more frequently than an-
nually), make available to participants and
beneficiaries, in a generally recognized elec-
tronic format—
‘‘(i) the latest summary plan descrip-
tion, including the latest summary of ma-
terial modifications, and
‘‘(ii) the actual plan provisions setting
forth the benefits available under the plan,
to the extent such information relates to the
coverage options under the plan available to the
participant or beneficiary. A reasonable charge
may be made to cover the cost of providing
such information in such generally recognized
electronic format. The Secretary may by regula-
tion prescribe a maximum amount which will
constitute a reasonable charge under the pre-
ceding sentence.
‘‘(B) ALTERNATIVE ACCESS.—The require-
ments of this paragraph may be met by making
such information generally available (rather
than upon request) on the Internet or on a pro-
prietary computer network in a format which is
readily accessible to participants and bene-
ficiaries.
‘‘(2) ADDITIONAL
INFORMATION
TO
BE
PRO-
VIDED ON REQUEST.—
‘‘(A) INCLUSION IN SUMMARY PLAN DE-
SCRIPTION
OF
SUMMARY
OF
ADDITIONAL
IN-
FORMATION.—The information required under
subsection (a) includes a summary description
of the types of information required by this
subsection to be made available to participants
and beneficiaries on request.
‘‘(B) 
INFORMATION
REQUIRED
FROM
PLANS AND ISSUERS ON REQUEST.—In addition
to information required to be included in sum-
mary plan descriptions under this subsection, a
group health plan shall provide the following in-
formation to a participant or beneficiary on re-
quest:
‘‘(i) CARE
MANAGEMENT
INFORMA-
TION.—A description of the circumstances
under which, and the extent to which, the
plan has special disease management pro-
grams or programs for persons with dis-
abilities, indicating whether these pro-
grams are voluntary or mandatory and
whether a significant benefit differential
results from participation in such pro-
grams.
‘‘(ii) INCLUSION
OF
DRUGS
AND
BIOLOGICALS IN FORMULARIES.—A state-
ment of whether a specific drug or biologi-
cal is included in a formulary used to de-
termine benefits under the plan and a de-
scription of the procedures for considering
requests for any patient-specific waivers.
‘‘(iii) ACCREDITATION
STATUS
OF
HEALTH INSURANCE ISSUERS AND SERV-
ICE PROVIDERS.—A description of the ac-
creditation and licensing status (if any) of
each health insurance issuer offering
health insurance coverage in connection
with the plan and of any utilization review
organization utilized by the issuer or the
plan, together with the name and address
of the accrediting or licensing authority.
‘‘(iv) QUALITY PERFORMANCE MEAS-
URES.—The latest information (if any)
maintained by the plan relating to quality
of performance of the delivery of medical
care with respect to coverage options of-
fered under the plan and of health care
professionals and facilities providing med-
ical care under the plan.
‘‘(C) 
INFORMATION
REQUIRED
FROM
HEALTH CARE PROFESSIONALS.—
‘‘(i) 
QUALIFICATIONS, 
PRIVILEGES,
AND
METHOD
OF
COMPENSATION.—Any
health care professional treating a partici-
pant or beneficiary under a group health
plan shall provide to the participant or
beneficiary, on request, a description of his
or her professional qualifications (including
board certification status, licensing status,
and accreditation status, if any), privileges,
and experience and a general description
by category (including salary, fee-for-serv-
ice, capitation, and such other categories
as may be specified in regulations of the
Secretary) of the applicable method by
which such professional is compensated in
connection with the provision of such med-
ical care.
‘‘(ii) COST
OF
PROCEDURES.—Any
health care professional who recommends
an elective procedure or treatment while
treating a participant or beneficiary under
a group health plan that requires a partici-
pant or beneficiary to share in the cost of
treatment shall inform such participant or
beneficiary of each cost associated with the
procedure or treatment and an estimate of
the magnitude of such costs.
‘‘(D) 
INFORMATION
REQUIRED
FROM
HEALTH CARE FACILITIES ON REQUEST.—Any
health care facility from which a participant or
beneficiary has sought treatment under a group
health plan shall provide to the participant or
beneficiary, on request, a description of the fa-
cility’s corporate form or other organizational
form and all forms of licensing and accredita-
tion status (if any) assigned to the facility by
standard-setting organizations.
‘‘(h) ACCESS TO INFORMATION RELEVANT TO THE
COVERAGE OPTIONS UNDER WHICH THE PARTICIPANT
OR BENEFICIARY IS ELIGIBLE TO ENROLL.—In addition
to information otherwise required to be made available
under this section, a group health plan shall, upon written
request (made not more frequently than annually), make
available to a participant (and an employee who, under
the terms of the plan, is eligible for coverage but not en-
rolled) in connection with a period of enrollment the sum-
mary plan description for any coverage option under the
plan under which the participant is eligible to enroll and
any information described in clauses (i), (ii), (iii), (vi),
(vii), and (viii) of subsection (e)(2)(B).
‘‘(i) ADVANCE
NOTICE
OF
CHANGES
IN
DRUG
FORMULARIES.—Not later than 30 days before the effec-
tive of date of any exclusion of a specific drug or biological
from any drug formulary under the plan that is used in
the treatment of a chronic illness or disease, the plan shall
take such actions as are necessary to reasonably ensure
that plan participants are informed of such exclusion. The
requirements of this subsection may be satisfied—
‘‘(1) by inclusion of information in publications
broadly distributed by plan sponsors, employers, or
employee organizations;
‘‘(2) by electronic means of communication (in-
cluding the Internet or proprietary computer net-
works in a format which is readily accessible to par-
ticipants);
‘‘(3) by timely informing participants who,
under an ongoing program maintained under the
plan, have submitted their names for such notifica-
tion; or
‘‘(4) by any other reasonable means of timely
informing plan participants.
‘‘(j) DEFINITIONS AND RELATED RULES.—
‘‘(1) IN
GENERAL.—For purposes of this
section—
‘‘(A) GROUP
HEALTH
PLAN.—The term
‘group health plan’ has the meaning provided
such term under section 733(a)(1).
‘‘(B) MEDICAL CARE.—The term ‘medical
care’ has the meaning provided such term
under section 733(a)(2).
‘‘(C) HEALTH
INSURANCE
COVERAGE.—
The term ‘health insurance coverage’ has the
meaning provided such term under section
733(b)(1).
‘‘(D) HEALTH
INSURANCE
ISSUER.—The
term ‘health insurance issuer’ has the meaning
provided such term under section 733(b)(2).
‘‘(2) APPLICABILITY
ONLY
IN
CONNECTION
WITH INCLUDED GROUP HEALTH PLAN BENEFITS.—
‘‘(A) IN GENERAL.—The requirements of
this section shall apply only in connection with
included group health plan benefits.
‘‘(B) INCLUDED
GROUP
HEALTH
PLAN
BENEFIT.—For purposes of subparagraph (A),
the term ‘included group health plan benefit’
means a benefit which is not an excepted ben-
efit (as defined in section 733(c)).’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 102(b) of such Act (29 U.S.C.
1022(b)) is amended by inserting before the period
at the end the following: ‘‘; and, in the case of a
group health plan (as defined in section 111(i)(1)),
the information required to be included under sec-
tion 111(a)’’.
(2) The table of contents in section 1 of such
Act is amended by striking the item relating to sec-
tion 111 and inserting the following new items:
‘‘Sec. 111. Disclosure by group health plans.
‘‘Sec. 112. Repeal and effective date.’’.
SEC. 112. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL.—The amendments made by this
subtitle shall apply with respect to plan years beginning
on or after January 1 of the second calendar year fol-
lowing the date of the enactment of this Act. The Sec-
retary of Labor shall first issue all regulations necessary
to carry out the amendments made by this subtitle before
such date.
(b) LIMITATION ON ENFORCEMENT ACTIONS.—No
enforcement action shall be taken, pursuant to the amend-
ments made by this subtitle, against a group health plan
or health insurance issuer with respect to a violation of
a requirement imposed by such amendments before the
date of issuance of final regulations issued in connection
with such requirement, if the plan or issuer has sought
to comply in good faith with such requirement.
Subtitle C—Group Health Plan
Review Standards
SEC. 121. SPECIAL RULES FOR GROUP HEALTH PLANS.
(a) IN GENERAL.—Section 503 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1133)
is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ after
‘‘SEC. 503.’’;
(2) by inserting (after and below paragraph
(2)) the following new flush-left sentence:
‘‘This subsection does not apply in the case of included
group health plan benefits (as defined in subsection
(b)(10)(S)).’’; and
(3) by adding at the end the following new sub-
section:
‘‘(b) SPECIAL RULES FOR GROUP HEALTH PLANS.—
‘‘(1) 
COVERAGE
DETERMINATIONS.—Every
group health plan shall, in the case of included
group health plan benefits—
‘‘(A) provide adequate notice in writing in
accordance with this subsection to any partici-
pant or beneficiary of any adverse coverage de-
cision with respect to such benefits of such par-
ticipant or beneficiary under the plan, setting
forth the specific reasons for such coverage de-
cision and any rights of review provided under
the plan, written in a manner calculated to be
understood by the average participant;
‘‘(B) provide such notice in writing also to
any treating medical care provider of such par-
ticipant or beneficiary, if such provider has
claimed reimbursement for any item or service
involved in such coverage decision, or if a claim
submitted by the provider initiated the pro-
ceedings leading to such decision;
‘‘(C) afford a reasonable opportunity to
any participant or beneficiary who is in receipt
of the notice of such adverse coverage decision,
and who files a written request for review of the
initial coverage decision within 90 days after re-
ceipt of the notice of the initial decision, for a
full and fair review of the decision by an appro-
priate named fiduciary who did not make the
initial decision; and
‘‘(D) meet the additional requirements of
this subsection, which shall apply solely with re-
spect to such benefits.
‘‘(2) TIME LIMITS FOR MAKING INITIAL COV-
ERAGE DECISIONS FOR BENEFITS AND COMPLETING
INTERNAL APPEALS.—
‘‘(A) TIME
LIMITS
FOR
DECIDING
RE-
QUESTS
FOR
BENEFIT
PAYMENTS, REQUESTS
FOR ADVANCE DETERMINATION OF COVERAGE,
AND
REQUESTS
FOR
REQUIRED
DETERMINA-
TION OF MEDICAL NECESSITY.—Except as pro-
vided in subparagraph (B)—
‘‘(i) INITIAL DECISIONS.—If a request
for benefit payments, a request for advance
determination of coverage, or a request for
required determination of medical necessity
is submitted to a group health plan in such
reasonable form as may be required under
the plan, the plan shall issue in writing an
initial coverage decision on the request be-
fore the end of the initial decision period
under paragraph (10)(I) following the fil-
ing completion date. Failure to issue a cov-
erage decision on such a request before the
end of the period required under this
clause shall be treated as an adverse cov-
erage decision for purposes of internal re-
view under clause (ii).
‘‘(ii) INTERNAL REVIEWS OF INITIAL
DENIALS.—Upon the written request of a
participant or beneficiary for review of an
initial adverse coverage decision under
clause (i), a review by an appropriate
named fiduciary (subject to paragraph (3))
of the initial coverage decision shall be
completed, including issuance by the plan
of a written decision affirming, reversing,
or modifying the initial coverage decision,
setting forth the grounds for such decision,
before the end of the internal review period
following the review filing date. Such deci-
sion shall be treated as the final decision
of the plan, subject to any applicable re-
consideration under paragraph (4). Failure
to issue before the end of such period such
a written decision requested under this
clause shall be treated as a final decision
affirming the initial coverage decision.
‘‘(B) TIME LIMITS FOR MAKING COVERAGE
DECISIONS RELATING TO ACCELERATED NEED
MEDICAL CARE AND FOR COMPLETING INTER-
NAL APPEALS.—
‘‘(i) INITIAL
DECISIONS.—A group
health plan shall issue in writing an initial
coverage decision on any request for expe-
dited advance determination of coverage or
for expedited required determination of
medical necessity submitted, in such rea-
sonable form as may be required under the
plan before the end of the accelerated need
decision period under paragraph (10)(K),
in cases involving accelerated need medical
care, following the filing completion date.
Failure to approve or deny such a request
before the end of the applicable decision
period shall be treated as a denial of the
request for purposes of internal review
under clause (ii).
‘‘(ii) INTERNAL REVIEWS OF INITIAL
DENIALS.—Upon the written request of a
participant or beneficiary for review of an
initial adverse coverage decision under
clause (i), a review by an appropriate
named fiduciary (subject to paragraph (3))
of the initial coverage decision shall be
completed, including issuance by the plan
of a written decision affirming, reversing,
or modifying the initial converge decision,
setting forth the grounds for the decision
before the end of the accelerated need deci-
sion period under paragraph (10)(K) fol-
lowing the review filing date. Such decision
shall be treated as the final decision of the
plan, subject to any applicable reconsider-
ation under paragraph (4). Failure to issue
before the end of the applicable decision
period such a written decision requested
under this clause shall be treated as a final
decision affirming the initial coverage deci-
sion.
‘‘(3) PHYSICIANS MUST REVIEW INITIAL COV-
ERAGE
DECISIONS
INVOLVING
MEDICAL
APPRO-
PRIATENESS
OR
NECESSITY
OR
INVESTIGATIONAL
ITEMS OR EXPERIMENTAL TREATMENT.—If an ini-
tial coverage decision under paragraph (2)(A)(i) or
(2)(B)(i) is based on a determination that provision
of a particular item or service is excluded from cov-
erage under the terms of the plan because the provi-
sion of such item or service does not meet the re-
quirements for medical appropriateness or necessity
or would constitute provision of investigational items
or experimental treatment or technology, the review
under paragraph (2)(A)(ii) or (2)(B)(ii), to the ex-
tent that it relates to medical appropriateness or ne-
cessity or to investigational items or experimental
treatment or technology, shall be conducted by a
physician who is selected by the plan and who did
not make the initial denial.
‘‘(4) ELECTIVE EXTERNAL REVIEW BY INDE-
PENDENT MEDICAL EXPERT AND RECONSIDERATION
OF INITIAL REVIEW DECISION.—
‘‘(A) IN GENERAL.—In any case in which
a participant or beneficiary, who has received
an adverse coverage decision which is not re-
versed upon review conducted pursuant to para-
graph (1)(C) (including review under paragraph
(2)(A)(ii) or (2)(B)(ii)) and who has not com-
menced review of the coverage decision under
section 502, makes a request in writing, within
30 days after the date of such review decision,
for reconsideration of such review decision, the
requirements of subparagraphs (B), (C), (D)
and (E) shall apply in the case of such adverse
coverage decision, if the requirements of clause
(i) or (ii) are met, subject to clause (iii).
‘‘(i) MEDICAL APPROPRIATENESS OR
INVESTIGATIONAL
ITEM
OR
EXPERI-
MENTAL TREATMENT OR TECHNOLOGY.—
The requirements of this clause are met if
such coverage decision is based on a deter-
mination that provision of a particular
item or service that would otherwise be
covered is excluded from coverage because
the provision of such item or service—
‘‘(I) is not medically appropriate
or necessary; or
‘‘(II) would constitute provision
of an investigational item or experi-
mental treatment or technology.
‘‘(ii) EXCLUSION OF ITEM OR SERVICE
REQUIRING
EVALUATION
OF
MEDICAL
FACTS
OR
EVIDENCE.—The requirements
of this clause are met if—
‘‘(I) such coverage decision is
based on a determination that a par-
ticular item or service is not covered
under the terms of the plan because
provision of such item or service is
specifically or categorically excluded
from coverage under the terms of the
plan, and
‘‘(B) LIMITS
ON
ALLOWABLE
ADVANCE
PAYMENTS.—The review under this paragraph
in connection with an adverse coverage decision
shall be available subject to any requirement of
the plan (unless waived by the plan for financial
or other reasons) for payment in advance to the
plan by the participant or beneficiary seeking
review of an amount not to exceed the greater
of—
‘‘(i) the lesser of $100 or 10 percent
of the cost of the medical care involved in
the decision, or
‘‘(ii) $25,
with such dollar amount subject to compounded
annual adjustments in the same manner and to
the same extent as apply under section 215(i)
of the Social Security Act, except that, for any
calendar year, such amount as so adjusted shall
be deemed, solely for such calendar year, to be
equal to such amount rounded to the nearest
$10. No such payment may be required in the
case of any participant or beneficiary whose en-
rollment under the plan is paid for, in whole or
in part, under a State plan under title XIX or
XXI of the Social Security Act. Any such ad-
vance payment shall be subject to reimburse-
ment if the recommendation of the independent
medical expert (or panel of such experts) under
subparagraph (D)(ii)(IV) is to reverse or mod-
ify the coverage decision.
‘‘(C) REQUEST
TO
INDEPENDENT
CON-
TRACT
EXPERT
FOR
DETERMINATION
OF
WHETHER
COVERAGE
DECISION
REQUIRED
EVALUATION
OF
MEDICAL
FACTS
OR
EVI-
DENCE.—
‘‘(i) IN GENERAL.—In the case of a
request for review made by a participant or
beneficiary as described in subparagraph
(A), if the requirements of subparagraph
(A)(ii) are met (and review is not other-
wise 
precluded 
under 
subparagraph
(A)(iii)), the terms of the plan shall pro-
vide for a procedure for initial review by
an independent contract expert selected in
accordance with subparagraph (H) under
which the expert will determine whether
the coverage decision requires the evalua-
tion of medical facts or evidence by a
health professional. If the expert deter-
mines that the coverage decision requires
such evaluation, reconsideration of such
adverse decision shall proceed under this
paragraph. If the expert determines that
the coverage decision does not require such
evaluation, the adverse decision shall re-
main the final decision of the plan.
‘‘(ii) INDEPENDENT
CONTRACT
EX-
PERTS.—For purposes of this subpara-
graph, the term ‘independent contract ex-
pert’ means a professional—
‘‘(I) who has appropriate creden-
tials and has attained recognized ex-
pertise in the applicable area of con-
tract interpretation;
‘‘(II) who was not involved in the
initial decision or any earlier review
thereof; and
‘‘(III) who is selected in accord-
ance with subparagraph (H)(i) and
meets the requirements of subpara-
graph (H)(iii).
‘‘(D) RECONSIDERATION
OF
INITIAL
RE-
VIEW DECISION.—
‘‘(i) IN GENERAL.—In the case of a
request for review made by a participant or
beneficiary as described in subparagraph
(A), if the requirements of subparagraph
(A)(i) are met or reconsideration proceeds
under this paragraph pursuant to subpara-
graph (C), the terms of the plan shall pro-
vide for a procedure for such reconsider-
ation in accordance with clause (ii).
‘‘(ii) PROCEDURE
FOR
RECONSIDER-
ATION.—The procedure required under
clause (i) shall include the following—
‘‘(I) An independent medical ex-
pert (or a panel of such experts, as
determined necessary) will be selected
in accordance with subparagraph (H)
to reconsider any coverage decision
described in subparagraph (A) to de-
termine whether such decision was in
accordance with the terms of the plan
and this title.
‘‘(II) The record for review (in-
cluding a specification of the terms of
the plan and other criteria serving as
the basis for the initial review deci-
sion) will be presented to such expert
(or panel) and maintained in a man-
ner which will ensure confidentiality
of such record.
‘‘(III) Such expert (or panel) will
reconsider the initial review decision
to determine whether such decision
was in accordance with the terms of
the plan and this title. The expert (or
panel) in its reconsideration will take
into account the medical condition of
the patient, the recommendation of
the treating physician, the initial cov-
erage decision (including the reasons
for such decision) and the decision
upon review conducted pursuant to
paragraph (1)(C) (including review
under 
paragraph 
(2)(A)(ii) 
or
(2)(B)(ii)) , any guidelines adopted by
the plan through a process involving
medical practitioners and peer-re-
viewed medical literature identified as
such under criteria established by the
Food and Drug Administration, and
any other valid, relevant, scientific or
clinical evidence the expert (or panel)
determines appropriate for its review.
The expert (or panel) may consult the
participant or beneficiary, the treating
physician, the medical director of the
plan, or any other party who, in the
opinion of the expert (or panel), may
have relevant information for consid-
eration.
‘‘(E) ISSUANCE
OF
BINDING
FINAL
DECISION.—Upon completion of the proce-
dure for review under subparagraph (D),
the independent medical expert (or panel
of such experts) shall issue a written deci-
sion affirming, modifying, or reversing the
initial review decision, setting forth the
grounds for the decision. Such decision
shall be the final decision of the plan and
shall be binding on the plan. Such decision
shall set forth specifically the determina-
tion of the expert (or panel) of the appro-
priate period for timely compliance by the
plan with the decision. Such decision shall
be issued concurrently to the participant or
beneficiary, to the treating physician, and
to the plan, shall constitute conclusive,
written authorization for the provision of
benefits under the plan in accordance with
the decision, and shall be treated as terms
of the plan for purposes of any action by
the participant or beneficiary under section
502.
‘‘(F) TIME
LIMITS
FOR
RECONSIDER-
ATION.—Any review under this paragraph (in-
cluding any review under subparagraph (C))
shall be completed before the end of the recon-
sideration period (as defined in paragraph
(10)(L)) following the review filing date in con-
nection with such review. Failure to issue a
written decision before the end of the reconsid-
eration period in any reconsideration requested
under this paragraph shall be treated as a final
decision affirming the initial review decision of
the plan.
‘‘(G) INDEPENDENT MEDICAL EXPERTS.—
‘‘(i) IN
GENERAL.—For purposes of
this paragraph, the term ‘independent
medical expert’ means, in connection with
any coverage decision by a group health
plan, a professional—
‘‘(I) who is a physician or, if ap-
propriate, another medical profes-
sional,
‘‘(II) who has appropriate cre-
dentials and has attained recognized
expertise in the applicable medical
field,
‘‘(III) who was not involved in
the initial decision or any earlier re-
view thereof,
‘‘(IV) who has no history of dis-
ciplinary action or sanctions (includ-
ing, but not limited to, loss of staff
privileges or participation restriction)
taken or pending by any hospital,
health carrier, government, or regu-
latory body, and
‘‘(V) who is selected in accord-
ance with subparagraph (H)(i) and
meets the requirements of subpara-
graph (H)(iii).
‘‘(H) SELECTION OF EXPERTS.—
‘‘(i) IN
GENERAL.—An independent
contract expert or independent medical ex-
pert (or each member of any panel of inde-
pendent medical experts selected under
subparagraph (D)(ii)) is selected in accord-
ance with this clause if—
‘‘(I) the expert is selected by an
intermediary which itself meets the re-
quirements of clauses (ii) and (iii), by
means of a method which ensures that
the identity of the expert is not dis-
closed to the plan, any health insur-
ance issuer offering health insurance
coverage to the aggrieved participant
or beneficiary in connection with the
plan, and the aggrieved participant or
beneficiary under the plan, and the
identities of the plan, the issuer, and
the aggrieved participant or bene-
ficiary are not disclosed to the expert;
‘‘(II) the expert is selected by an
appropriately credentialed panel of
physicians meeting the requirements
of clauses (ii) and (iii) established by
a fully accredited teaching hospital
meeting such requirements;
‘‘(III) the expert is selected by an
organization 
described 
in 
section
1152(1)(A) of the Social Security Act
which meets the requirements of
clauses (ii) and (iii);
‘‘(IV) the expert is selected by an
external review organization which
meets the requirements of clauses (ii)
and (iii) and is accredited by a private
standard-setting organization meeting
such requirements;
‘‘(V) the expert is selected by a
State agency which is established for
the purpose of conducting independent
external reviews and which meets the
requirements of clauses (ii) and (iii);
or
‘‘(VI) the expert is selected, by
an intermediary or otherwise, in a
manner that is, under regulations
issued pursuant to negotiated rule-
making, sufficient to ensure the ex-
pert’s independence, and the method
of selection is devised to reasonably
ensure that the expert selected meets
the requirements of clauses (ii) and
(iii).
‘‘(ii) STANDARDS
OF
PERFORMANCE
FOR
INTERMEDIARIES.—The 
Secretary
shall prescribe by regulation standards (in
addition to the requirements of clause (iii))
which entities making selections under sub-
clause (I), (II), (III), (IV), (V), or (VI) of
clause (ii) must meet in order to be eligible
for making such selections. Such standards
shall include (but are not limited to)—
‘‘(I) assurance that the entity
will carry out specified duties in the
course of exercising the entity’s re-
sponsibilities under clause (i)(I),
‘‘(II) assurance that applicable
deadlines will be met in the exercise of
such responsibilities, and
‘‘(III) assurance that the entity
meets appropriate indicators of sol-
vency and fiscal integrity.
Each such entity shall provide to the Sec-
retary, in such manner and at such times
as the Secretary may prescribe, informa-
tion relating the volume of claims with re-
spect to which the entity has served under
this subparagraph, the types of such
claims, and such other information regard-
ing such claims as the Secretary may de-
termine appropriate.
‘‘(iii) 
INDEPENDENCE
REQUIRE-
MENTS.—An independent contract expert
or independent medical expert or another
entity described in clause (i) meets the
independence requirements of this clause
if—
‘‘(I) the expert or entity is not
affiliated with any related party;
‘‘(II) any compensation received
by such expert or entity in connection
with the external review is reasonable
and not contingent on any decision
rendered by the expert or entity;
‘‘(III) under the terms of the
plan and any health insurance cov-
erage offered in connection with the
plan, the plan and the issuer (if any)
have no recourse against the expert or
entity in connection with the external
review; and
‘‘(IV) the expert or entity does
not otherwise have a conflict of inter-
est with a related party as determined
under any regulations which the Sec-
retary may prescribe.
‘‘(iv) RELATED PARTY.—For purposes
of clause (i)(I), the term ‘related party’
means—
‘‘(I) the plan or any health insur-
ance issuer offering health insurance
coverage in connection with the plan
(or any officer, director, or manage-
ment employee of such plan or issuer);
‘‘(II) the physician or other med-
ical care provider that provided the
medical care involved in the coverage
decision;
‘‘(III) the institution at which
the medical care involved in the cov-
erage decision is provided;
‘‘(IV) the manufacturer of any
drug or other item that was included
in the medical care involved in the
coverage decision; or
‘‘(V) any other party determined
under any regulations which the Sec-
retary may prescribe to have a sub-
stantial interest in the coverage deci-
sion.
‘‘(v) AFFILIATED.—For purposes of
clause (ii)(I), the term ‘affiliated’ means,
in connection with any entity, having a fa-
milial, financial, or professional relation-
ship with, or interest in, such entity.
‘‘(I) MISBEHAVIOR BY EXPERTS.—Any ac-
tion by the expert or experts in applying for
their selection under this paragraph or in the
course of carrying out their duties under this
paragraph which constitutes—
‘‘(i) fraud or intentional misrepresen-
tation by such expert or experts, or
‘‘(ii) demonstrates failure to adhere to
the standards for selection set forth in sub-
paragraph (H)(iii),
shall be treated as a failure to meet the require-
ments of this paragraph and therefore as a
cause of action which may be brought by a fidu-
ciary under section 502(a)(3).
‘‘(J) 
BENEFIT
EXCLUSIONS
MAIN-
TAINED.—Nothing in this paragraph shall be
construed as providing for or requiring the cov-
erage of items or services for which benefits are
specifically excluded under the group health
plan or any health insurance coverage offered in
connection with the plan.
‘‘(5) PERMITTED ALTERNATIVES TO REQUIRED
FORMS OF REVIEW.—
‘‘(A) IN
GENERAL.—In accordance with
such regulations (if any) as may be prescribed
by the Secretary for purposes of this paragraph,
in the case of any initial coverage decision or
any decision upon review thereof under para-
graph (2)(A)(ii) or (2)(B)(ii), a group health
plan may provide an alternative dispute resolu-
tion procedure meeting the requirements of sub-
paragraph (B) for use in lieu of the procedures
set forth under the preceding provisions of this
subsection relating review of such decision.
Such procedure may be provided in one form
for all participants and beneficiaries or in a dif-
ferent form for each group of similarly situated
participants and beneficiaries. Upon voluntary
election of such procedure by the plan and by
the aggrieved participant or beneficiary in con-
nection with the decision, the plan may provide
under such procedure (in a manner consistent
with such regulations as the Secretary may pre-
scribe to ensure equitable procedures) for waiv-
er of the review of the decision under paragraph
(3) or waiver of further review of the decision
under paragraph (4) or section 502 or for elec-
tion by such parties of an alternative means of
external review (other than review under para-
graph (4)).
‘‘(B) REQUIREMENTS.—An alternative dis-
pute resolution procedure meets the require-
ments of this subparagraph, in connection with
any decision, if—
‘‘(i) such procedure is utilized solely—
‘‘(I) in accordance with the appli-
cable terms of a bona fide collective
bargaining agreement pursuant to
which the plan (or the applicable por-
tion thereof governed by the agree-
ment) is established or maintained, or
‘‘(II) upon election by both the
aggrieved participant or beneficiary
and the plan,
‘‘(ii) the procedure incorporates any
otherwise applicable requirement for review
by a physician under paragraph (3), unless
waived by the participant or beneficiary (in
a manner consistent with such regulations
as the Secretary may prescribe to ensure
equitable procedures); and
‘‘(iii) the means of resolution of dis-
pute allow for adequate presentation by
each party of scientific and medical evi-
dence supporting the position of such
party.
‘‘(6) REVIEW REQUIREMENTS.—In any review
of a decision issued under this subsection—
‘‘(A) the record shall be maintained for
purposes of any further review in accordance
with standards which shall be prescribed in reg-
ulations of the Secretary designed to facilitate
such further review, and
‘‘(B) any decision upon review which modi-
fies or reverses a decision below shall specifi-
cally set forth a determination that the record
upon review is sufficient to rebut a presumption
in favor of the decision below.
‘‘(7) COMPLIANCE
WITH
FIDUCIARY
STAND-
ARDS.—The issuance of a decision under a plan
upon review in good faith compliance with the re-
quirements of this subsection shall not be treated as
a violation of part 4 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974.
‘‘(8) LIMITATION ON APPLICABILITY OF SPE-
CIAL RULES.—The preceding provisions of this sub-
section shall not apply with respect to employee ben-
efit plans that are not group health plans or with re-
spect to benefits that are not included group health
plan benefits (as defined in paragraph (10)(S)).
‘‘(9) GROUP
HEALTH
PLAN
DEFINED.—For
purposes of this section—
‘‘(A) IN
GENERAL.—The term ‘group
health plan’ shall have the meaning provided in
section 733(a).
‘‘(B) TREATMENT
OF
PARTNERSHIPS.—
The provisions of paragraphs (1), (2), and (3)
of section 732(d) shall apply.
‘‘(10) OTHER DEFINITIONS.—For purposes of
this subsection—
‘‘(A) 
REQUEST
FOR
BENEFIT
PAY-
MENTS.—The term ‘request for benefit pay-
ments’ means a request, for payment of benefits
by a group health plan for medical care, which
is made by, or (if expressly authorized) on be-
half of, a participant or beneficiary after such
medical care has been provided.
‘‘(B) REQUIRED DETERMINATION OF MED-
ICAL
NECESSITY.—The term ‘required deter-
mination of medical necessity’ means a deter-
mination required under a group health plan
solely that proposed medical care meets, under
the facts and circumstances at the time of the
determination, the requirements for medical ap-
propriateness or necessity (which may be sub-
ject to exceptions under the plan for fraud or
misrepresentation), irrespective of whether the
proposed medical care otherwise meets other
terms and conditions of coverage, but only if
such determination does not constitute an ad-
vance determination of coverage (as defined in
subparagraph (C)).
‘‘(C) ADVANCE DETERMINATION OF COV-
ERAGE.—The term ‘advance determination of
coverage’ means a determination under a group
health plan that proposed medical care meets,
under the facts and circumstances at the time
of the determination, the plan’s terms and con-
ditions of coverage (which may be subject to ex-
ceptions under the plan for fraud or misrepre-
sentation).
‘‘(D) REQUEST FOR ADVANCE DETERMINA-
TION OF COVERAGE.—The term ‘request for ad-
vance determination of coverage’ means a re-
quest for an advance determination of coverage
of medical care which is made by, or (if ex-
pressly authorized) on behalf of, a participant
or beneficiary before such medical care is pro-
vided.
‘‘(E) REQUEST FOR EXPEDITED ADVANCE
DETERMINATION OF COVERAGE.—The term ‘re-
quest for expedited advance determination of
coverage’ means a request for advance deter-
mination of coverage, in any case in which the
proposed medical care constitutes accelerated
need medical care.
‘‘(F) REQUEST
FOR
REQUIRED
DETER-
MINATION OF MEDICAL NECESSITY.—The term
‘request for required determination of medical
necessity’ means a request for a required deter-
mination of medical necessity for medical care
which is made by or on behalf of a participant
or beneficiary before the medical care is pro-
vided.
‘‘(G) REQUEST FOR EXPEDITED REQUIRED
DETERMINATION
OF
MEDICAL
NECESSITY.—
The term ‘request for expedited required deter-
mination of medical necessity’ means a request
for required determination of medical necessity
in any case in which the proposed medical care
constitutes accelerated need medical care.
‘‘(H) 
ACCELERATED
NEED
MEDICAL
CARE.—The term ‘accelerated need medical
care’ means medical care in any case in which
an appropriate physician has certified in writing
(or as otherwise provided in regulations of the
Secretary) that the participant or beneficiary is
stabilized and—
‘‘(i) that failure to immediately pro-
vide the care to the participant or bene-
ficiary could reasonably be expected to re-
sult in—
‘‘(I) placing the health of such
participant or beneficiary (or, with re-
spect to such a participant or bene-
ficiary who is a pregnant woman, the
health of the woman or her unborn
child) in serious jeopardy;
‘‘(II) serious impairment to bod-
ily functions; or
‘‘(III) serious dysfunction of any
bodily organ or part; or
‘‘(ii) that immediate provision of the
care is necessary because the participant
or beneficiary has made or is at serious
risk of making an attempt to harm himself
or herself or another individual.
‘‘(I) INITIAL DECISION PERIOD.—The term
‘initial decision period’ means a period of 30
days, or such period as may be prescribed in
regulations of the Secretary.
‘‘(J) INTERNAL
REVIEW
PERIOD.—The
term ‘internal review period’ means a period of
30 days, or such period as may be prescribed
in regulations of the Secretary.
‘‘(K) ACCELERATED NEED DECISION PE-
RIOD.—The term ‘accelerated need decision pe-
riod’ means a period of 3 days, or such period
as may be prescribed in regulations of the Sec-
retary.
‘‘(L) 
RECONSIDERATION
PERIOD.—The
term ‘reconsideration period’ means a period of
25 days, or such period as may be prescribed
in regulations of the Secretary, except that, in
the case of a decision involving accelerated need
medical care, such term means the accelerated
need decision period.
‘‘(M) FILING
COMPLETION
DATE.—The
term ‘filing completion date’ means, in connec-
tion with a group health plan, the date as of
which the plan is in receipt of all information
reasonably required (in writing or in such other
reasonable form as may be specified by the
plan) to make an initial coverage decision.
‘‘(N) REVIEW
FILING
DATE.—The term
‘review filing date’ means, in connection with a
group health plan, the date as of which the ap-
propriate named fiduciary (or the independent
medical expert or panel of such experts in the
case of a review under paragraph (4)) is in re-
ceipt of all information reasonably required (in
writing or in such other reasonable form as may
be specified by the plan) to make a decision to
affirm, modify, or reverse a coverage decision.
‘‘(O) MEDICAL CARE.—The term ‘medical
care’ has the meaning provided such term by
section 733(a)(2).
‘‘(P) HEALTH
INSURANCE
COVERAGE.—
The term ‘health insurance coverage’ has the
meaning 
provided 
such 
term 
by 
section
733(b)(1).
‘‘(Q) HEALTH
INSURANCE
ISSUER.—The
term ‘health insurance issuer’ has the meaning
provided such term by section 733(b)(2).
‘‘(R) WRITTEN OR IN WRITING.—
‘‘(i) IN GENERAL.—A request or deci-
sion shall be deemed to be ‘written’ or ‘in
writing’ if such request or decision is pre-
sented in a generally recognized printable
or electronic format. The Secretary may by
regulation provide for presentation of in-
formation otherwise required to be in writ-
ten form in such other forms as may be
appropriate under the circumstances.
‘‘(ii) MEDICAL APPROPRIATENESS OR
INVESTIGATIONAL
ITEMS
OR
EXPERI-
MENTAL TREATMENT DETERMINATIONS.—
For purposes of this subparagraph, in the
case of a request for advance determina-
tion of coverage, a request for expedited
advance determination of coverage, a re-
quest for required determination of medical
necessity, or a request for expedited re-
quired determination of medical necessity,
if the decision on such request is conveyed
to the provider of medical care or to the
participant or beneficiary by means of tele-
phonic or other electronic communications,
such decision shall be treated as a written
decision.
‘‘(S) INCLUDED
GROUP
HEALTH
PLAN
BENEFIT.—The term ‘included group health
plan benefit’’ means a benefit under a group
health plan which is not an excepted benefit (as
defined in section 733(c)).’’.
(b) CIVIL PENALTIES.—
(1) IN GENERAL.—Section 502(c) of such Act
(29 U.S.C. 1132(c)) is amended by redesignating
paragraphs (6) and (7) as paragraphs (7) and (8),
respectively, and by inserting after paragraph (5)
the following new paragraph:
‘‘(6)(A)(i) In the case of any failure to timely provide
an included group health plan benefit (as defined in sec-
tion 503(b)(10)(S)) to a participant or beneficiary, which
occurs after the issuance of, and in violation of, a final
decision rendered upon completion of external review
(under section 503(b)(4)) of an adverse coverage decision
by the plan relating to such benefit, any person acting in
the capacity of a fiduciary of the plan so as to cause such
failure may, in the court’s discretion, be liable to the ag-
grieved participant or beneficiary for a civil penalty.
‘‘(ii) Except as provided in clause (iii), such civil pen-
alty shall be in an amount of up to $1,000 a day from
the date that occurs on or after the date of the issuance
of the decision under section 503(b)(4) and upon which
the plan otherwise could have been reasonably expected
to commence compliance with the decision until the date
the failure to provide the benefit is corrected.
‘‘(iii) In any case in which it is proven by clear and
convincing evidence that the person referred to in clause
(i) acted willfully and in bad faith, the daily penalty under
clause (ii) shall be increased to an amount of up to $5,000
a day.
‘‘(iv) In any case in which it is further proven by clear
and convincing evidence that—
‘‘(I) the plan is not in full compliance with the
decision of the independent medical expert (or panel
of such experts) under section 503(b)(4)(E)) within
the appropriate period specified in such decision,
and
‘‘(II) the failure to be in full compliance was
caused by the plan or by a health insurance issuer
offering health insurance coverage in connection
with the plan,
the plan shall pay the cost of all medical care which was
not provided by reason of such failure to fully comply and
which is otherwise obtained by the participant or bene-
ficiary from any provider.
‘‘(B) For purposes of subparagraph (A), the plan,
and any health insurance issuer offering health insurance
coverage in connection with the plan, shall be deemed to
be in compliance with any decision of an independent med-
ical expert (or panel of such experts) under section
503(b)(4) with respect to any participant or beneficiary
upon transmission to such entity (or panel) and to such
participant or beneficiary by the plan or issuer of timely
notice of an authorization of coverage by the plan or issuer
which is consistent with such decision.
‘‘(C) In any action commenced under subsection (a)
by a participant or beneficiary with respect to an included
group health plan benefit in which the plaintiff alleges that
a person, in the capacity of a fiduciary and in violation
of the terms of the plan or this title, has taken an action
resulting in an adverse coverage decision in violation of
the terms of the plan, or has failed to take an action for
which such person is responsible under the plan and which
is necessary under the plan for a favorable coverage deci-
sion, upon finding in favor of the plaintiff, if such action
was commenced after a final decision of the plan upon
review which included a review under section 503(b)(4)
or such action was commenced under subsection (b)(4) of
this section, the court shall cause to be served on the de-
fendant an order requiring the defendant—
‘‘(i) to cease and desist from the alleged action
or failure to act; and
‘‘(ii) to pay to the plaintiff a reasonable attor-
ney’s fee and other reasonable costs relating to the
prosecution of the action on the charges on which
the plaintiff prevails.
The remedies provided under this subparagraph shall be
in addition to remedies otherwise provided under this sec-
tion.
‘‘(D)(i) The Secretary may assess a civil penalty
against a person acting in the capacity of a fiduciary of
one or more group health plans (as defined in section
503(b)(9)) for—
‘‘(I) any pattern or practice of repeated adverse
coverage decisions in connection with included group
health plan benefits in violation of the terms of the
plan or plans or this title; or
‘‘(II) any pattern or practice of repeated viola-
tions of the requirements of section 503 in connec-
tion with such benefits.
Such penalty shall be payable only upon proof by clear
and convincing evidence of such pattern or practice.
‘‘(ii) Such penalty shall be in an amount not to exceed
the lesser of—
‘‘(I) 5 percent of the aggregate value of benefits
shown by the Secretary to have not been provided,
or unlawfully delayed in violation of section 503,
under such pattern or practice; or
‘‘(II) $100,000.
‘‘(iii) Any person acting in the capacity of a fiduciary
of a group health plan or plans who has engaged in any
such pattern or practice in connection with included group
health plan benefits, upon the petition of the Secretary,
may be removed by the court from that position, and from
any other involvement, with respect to such plan or plans,
and may be precluded from returning to any such position
or involvement for a period determined by the court.
‘‘(E) For purposes of this paragraph, the term ‘in-
cluded group health plan benefit’ has the meaning pro-
vided in section 503(b)(10)(S).
‘‘(F) The preceding provisions of this paragraph shall
not apply with respect to employee benefit plans that are
not group health plans or with respect to benefits that are
not included group health plan benefits (as defined in
paragraph (10)(S)).’’.
(2) 
CONFORMING
AMENDMENT.—Section
502(a)(6) of such Act (29 U.S.C. 1132(a)(6)) is
amended by striking ‘‘, or (6)’’ and inserting ‘‘, (6),
or (7)’’.
(c) EXPEDITED COURT REVIEW.—Section 502 of
such Act (29 U.S.C. 1132) is amended—
(1) in subsection (a)(8), by striking ‘‘or’’ at the
end;
(2) in subsection (a)(9), by striking the period
and inserting ‘‘; or’’;
(3) by adding at the end of subsection (a) the
following new paragraph:
‘‘(10) by a participant or beneficiary for appropriate
relief under subsection (b)(4).’’.
(4) by adding at the end of subsection (b) the
following new paragraph:
‘‘(4) In any case in which exhaustion of administra-
tive remedies in accordance with paragraph (2)(A)(ii) or
(2)(B)(ii) of section 503(b) otherwise necessary for an ac-
tion for relief under paragraph (1)(B) or (3) of subsection
(a) has not been obtained and it is demonstrated to the
court by means of certification by an appropriate physi-
cian that such exhaustion is not reasonably attainable
under the facts and circumstances without undue risk of
irreparable harm to the health of the participant or bene-
ficiary, a civil action may be brought by a participant or
beneficiary to obtain appropriate equitable relief. Any de-
terminations 
made 
under 
paragraph 
(2)(A)(ii) 
or
(2)(B)(ii) of section 503(b) made while an action under
this paragraph is pending shall be given due consideration
by the court in any such action.’’.
(d) ATTORNEY’S FEES.—Section 502(g) of such Act
(29 U.S.C. 1132(g)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraph (2) or (3))’’; and
(2) by adding at the end the following new
paragraph:
‘‘(3) In any action under this title by a participant
or beneficiary in connection with an included group health
plan benefit (as defined in section 503(b)(10)(S)) in which
judgment in favor of the participant or beneficiary is
awarded, the court shall allow a reasonable attorney’s fee
and costs of action to the participant or beneficiary.’’.
(e) STANDARD
OF
REVIEW
UNAFFECTED.—The
standard of review under section 502 of the Employee Re-
tirement Income Security Act of 1974 (as amended by this
section) shall continue on and after the date of the enact-
ment of this Act to be the standard of review which was
applicable under such section as of immediately before
such date.
(f) CONCURRENT JURISDICTION.—Section 502(e)(1)
of such Act (29 U.S.C. 1132(e)(1)) is amended—
(1) in the first sentence, by striking ‘‘under
subsection (a)(1)(B) of this section’’ and inserting
‘‘under subsection (a)(1)(A) for relief under sub-
section (c)(6), under subsection (a)(1)(B), and
under subsection (b)(4)’’; and
(2) in the last sentence, by striking ‘‘of actions
under paragraphs (1)(B) and (7) of subsection (a)
of this section’’ and inserting ‘‘of actions under
paragraph (1)(A) of subsection (a) for relief under
subsection (c)(6) and of actions under paragraphs
(1)(B) and (7) of subsection (a) and paragraph (4)
of subsection (b)’’.
SEC. 122. SPECIAL RULE FOR ACCESS TO SPECIALTY CARE.
Section 503(b) of such Act (as added by the pre-
ceding provisions of this subtitle) is amended by adding
at the end the following new paragraph:
‘‘(11) SPECIAL
RULE
FOR
ACCESS
TO
SPE-
CIALTY CARE.—
‘‘(A) IN GENERAL.—In the case of a re-
quest for advance determination of coverage
consisting of a request by a physician for a de-
termination of coverage of the services of a spe-
cialist with respect to any condition, if coverage
of the services of such specialist for such condi-
tion is otherwise provided under the plan, the
initial coverage decision referred to in subpara-
graph (A)(i) or (B)(i) of paragraph (2) shall be
issued within the accelerated need decision pe-
riod.
‘‘(B) SPECIALIST.—For purposes of this
paragraph, the term ‘specialist’ means, with re-
spect to a condition, a physician who has a high
level of expertise through appropriate training
and experience (including, in the case of a pa-
tient who is a child, appropriate pediatric exper-
tise) to treat the condition.’’.
SEC. 123. REQUIREMENTS FOR TREATMENT OF PRESCRIP-
TION DRUGS AND MEDICAL DEVICES AS EX-
PERIMENTAL OR INVESTIGATIONAL.
Section 609 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1169) is amended—
(1) by redesignating subsection (e) as sub-
section (f); and
(2) by inserting after subsection (d) the fol-
lowing new subsection:
‘‘(e) REQUIREMENTS FOR TREATMENT OF PRESCRIP-
TION DRUGS AND MEDICAL DEVICES AS EXPERIMENTAL
OR INVESTIGATIONAL.—
‘‘(1) IN GENERAL.—No use of a prescription
drug or medical device shall be considered experi-
mental or investigational in connection with a group
health plan if such use is included in the labeling au-
thorized by the Food and Drug Administration
under section 505, 513, or 515 of the Federal Food,
Drug, and Cosmetic Act or under secton 351 of the
Public Health Service Act, unless clinical benefit has
not been adequately demonstrated based on analysis
of reliable authoritative scientific evidence.
‘‘(2) CONSTRUCTION.—Nothing in this sub-
section shall be construed as—
‘‘(A) requiring a group health plan to pro-
vide any coverage of prescription drugs or med-
ical devices, or
‘‘(B) precluding a group health plan from
considering medical devices cleared through pre-
market notification under section 510(k) of the
Federal Food, Drug, and Cosmetic Act as in-
vestigational.
‘‘(3) DEFINITIONS.—For purposes of this
subsection—
‘‘(A) The term ‘group health plan’ shall
have the meaning provided such term under
such section 733.
‘‘(B) The term ‘clinical benefit’ means im-
provement in net health outcome (including but
not limited to length of life or ability to func-
tion) or in any objectively measurable criterion
that is reasonably likely to predict clinical ben-
efit to an extent at least equivalent to the ex-
tent that is achievable under the usual condi-
tions of medical practice under established al-
ternatives.
‘‘(C) The term ‘reliable authoritative evi-
dence’ means well-designed and well-conducted
investigations published in peer-reviewed sci-
entific journals.’’.
SEC. 124. PROTECTION FOR CERTAIN INFORMATION DE-
VELOPED TO REDUCE MORTALITY OR MOR-
BIDITY OR FOR IMPROVING PATIENT CARE
AND SAFETY.
(a) PROTECTION OF CERTAIN INFORMATION.—Not-
withstanding any other provision of Federal or State law,
health care response information shall be exempt from any
disclosure requirement (regardless of whether the require-
ment relates to subpoenas, discovery, introduction of evi-
dence, testimony, or any other form of disclosure), in con-
nection with a civil or administrative proceeding under
Federal or State law, to the same extent as information
developed by a health care provider with respect to any
of the following:
(1) Peer review.
(2) Utilization review.
(3) Quality management or improvement.
(4) Quality control.
(5) Risk management.
(6) Internal review for purposes of reducing
mortality, morbidity, or for improving patient care
or safety.
(b) NO WAIVER OF PROTECTION THROUGH INTER-
ACTION
WITH
ACCREDITING
BODY.—Notwithstanding
any other provision of Federal or State law, the protection
of health care response information from disclosure pro-
vided under subsection (a) shall not be deemed to be modi-
fied or in any way waived by—
(1) the development of such information in con-
nection with a request or requirement of an accred-
iting body; or
(2) the transfer of such information to an ac-
crediting body.
(c) DEFINITIONS.—For purposes of this section:
(1) The term ‘‘accrediting body’’ means a na-
tional, not-for-profit organization that—
(A) accredits health care providers; and
(B) is recognized as an accrediting body by
statute or by a Federal or State agency that
regulates health care providers.
(2) The term ‘‘health care provider’’ has the
meaning given such term in section 1188 of the So-
cial Security Act (as added by section 5001 of this
Act).
(3) The term ‘‘health care response informa-
tion’’ means information (including any data, report,
record, memorandum, analysis, statement, or other
communication) developed by, or on behalf of, a
health care provider in response to a serious, ad-
verse, patient-related event—
(A) during the course of analyzing or
studying the event and its causes; and
(B) for purposes of—
(i) reducing mortality or morbidity; or
(ii) improving patient care or safety
(including the provider’s notification to an
accrediting body and the provider’s plans
of action in response to such event).
(5) The term ‘‘State’’ includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, and the Northern Mariana Is-
lands.
SEC. 125. EFFECTIVE DATE.
(a) IN GENERAL.—The amendments made by sec-
tions 801 and 802 shall apply with respect to grievances
arising in plan years beginning on or after January 1 of
the second calendar year following 12 months after the
date the Secretary of Labor issues all regulations nec-
essary to carry out amendments made by this title. The
amendments made by section 803 shall take effect on such
January 1.
(b) LIMITATION ON ENFORCEMENT ACTIONS.—No
enforcement action shall be taken, pursuant to the amend-
ments made by this title, against a group health plan or
health insurance issuer with respect to a violation of a re-
quirement imposed by such amendments before the date
of issuance of final regulations issued in connection with
such requirement, if the plan or issuer has sought to com-
ply in good faith with such requirement.
(c) COLLECTIVE BARGAINING AGREEMENTS.—Any
plan amendment made pursuant to a collective bargaining
agreement relating to the plan which amends the plan
solely to conform to any requirement added by this title
shall not be treated as a termination of such collective bar-
gaining agreement.
Subtitle D—Small Business Access
and Choice for Entrepreneurs
SEC. 
131. 
RULES 
GOVERNING 
ASSOCIATION 
HEALTH
PLANS.
(a) IN GENERAL.—Subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974 is amend-
ed by adding after part 7 the following new part:
‘‘PART 8—RULES GOVERNING ASSOCIATION HEALTH
PLANS
‘‘SEC. 801. ASSOCIATION HEALTH PLANS.
‘‘(a) IN GENERAL.—For purposes of this part, the
term ‘association health plan’ means a group health
plan—
‘‘(1) whose sponsor is (or is deemed under this
part to be) described in subsection (b); and
‘‘(2) under which at least two options of health
insurance coverage offered by a health insurance
issuer (which may include, among other options,
managed care options, point of service options, and
preferred provider options) is provided to partici-
pants and beneficiaries, unless, for any plan year,
such coverage remains unavailable to the plan de-
spite good faith efforts exercised by the plan to se-
cure such coverage.
‘‘(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 associa-
tion, a bona fide industry association (including a
rural electric cooperative association or a rural tele-
phone cooperative association), a bona fide profes-
sional association, or a bona fide chamber of com-
merce (or similar bona fide business association, in-
cluding 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;
‘‘(2) is established as a permanent entity which
receives the active support of its members and col-
lects from its members on a periodic basis dues or
payments necessary to maintain eligibility for mem-
bership in the sponsor; and
‘‘(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 mem-
100
bers), or the dependents of such employees, and does
not condition such dues or payments on the basis of
group health plan participation.
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 sub-
section.
‘‘SEC. 
802. 
CERTIFICATION 
OF 
ASSOCIATION 
HEALTH
PLANS.
‘‘(a) IN GENERAL.—The applicable authority shall
prescribe by regulation, through negotiated rulemaking, a
procedure under which, subject to subsection (b), the ap-
plicable authority shall certify association health plans
which apply for certification as meeting the requirements
of this part.
‘‘(b) STANDARDS.—Under the procedure prescribed
pursuant to subsection (a), in the case of an association
health plan that provides at least one benefit option which
does not consist of health insurance coverage, the applica-
ble authority shall certify such plan as meeting the re-
quirements of this part only if the applicable authority is
satisfied that—
‘‘(1) such certification—
‘‘(A) is administratively feasible;
101
‘‘(B) is not adverse to the interests of the
individuals covered under the plan; and
‘‘(C) is protective of the rights and benefits
of the individuals covered under the plan; and
‘‘(2) the applicable requirements of this part
are met (or, upon the date on which the plan is to
commence operations, will be met) with respect to
the plan.
‘‘(c) REQUIREMENTS APPLICABLE
TO CERTIFIED
PLANS.—An association health plan with respect to which
certification under this part is in effect shall meet the ap-
plicable requirements of this part, effective on the date
of certification (or, if later, on the date on which the plan
is to commence operations).
‘‘(d) REQUIREMENTS
FOR
CONTINUED
CERTIFI-
CATION.—The applicable authority may provide by regula-
tion, through negotiated rulemaking, for continued certifi-
cation of association health plans under this part.
‘‘(e) CLASS CERTIFICATION FOR FULLY INSURED
PLANS.—The applicable authority shall establish a class
certification procedure for association health plans under
which all benefits consist of health insurance coverage.
Under such procedure, the applicable authority shall pro-
vide for the granting of certification under this part to
the plans in each class of such association health plans
102
upon appropriate filing under such procedure in connec-
tion with plans in such class and payment of the pre-
scribed fee under section 807(a).
‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION
HEALTH PLANS.—An association health plan which offers
one or more benefit options which do not consist of health
insurance coverage may be certified under this part only
if such plan consists of any of the following:
‘‘(1) a plan which offered such coverage on the
date of the enactment of the Comprehensive Access
and Responsibility in Health Care Act of 1999,
‘‘(2) a plan under which the sponsor does not
restrict membership to one or more trades and busi-
nesses or industries and whose eligible participating
employers represent a broad cross-section of trades
and businesses or industries, or
‘‘(3) a plan whose eligible participating employ-
ers represent one or more trades or businesses, or
one or more industries, which have been indicated as
having average or above-average health insurance
risk or health claims experience by reason of State
rate filings, denials of coverage, proposed premium
rate levels, and other means demonstrated by such
plan in accordance with regulations which the Sec-
retary shall prescribe through negotiated rule-
103
making, including (but not limited to) the following:
agriculture; automobile dealerships; barbering and
cosmetology; child care; construction; dance, theat-
rical, and orchestra productions; disinfecting and
pest control; eating and drinking establishments;
fishing; hospitals; labor organizations; logging; man-
ufacturing (metals); mining; medical and dental
practices; medical laboratories; sanitary services;
transportation (local and freight); and warehousing.
‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND
BOARDS OF TRUSTEES.
‘‘(a) SPONSOR.—The requirements of this subsection
are met with respect to an association 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 an association
health plan if the following requirements are met:
‘‘(1) FISCAL CONTROL.—The plan is operated,
pursuant to a trust agreement, by a board of trust-
ees which has complete fiscal control over the plan
and which is responsible for all operations of the
plan.
104
‘‘(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
CONTRAC-
TORS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (B) and (C), the members of the
board of trustees are individuals selected from
individuals who are the owners, officers, direc-
tors, or employees of the participating employ-
ers or who are partners in the participating em-
ployers and actively participate in the business.
‘‘(B) LIMITATION.—
‘‘(i) GENERAL RULE.—Except as pro-
vided in clauses (ii) and (iii), no such
member is an owner, officer, director, or
employee of, or partner in, a contract ad-
ministrator or other service provider to the
plan.
‘‘(ii) LIMITED EXCEPTION FOR PRO-
VIDERS OF SERVICES SOLELY ON BEHALF
105
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, clause (i) shall not apply in the case
of any service provider described in sub-
paragraph (A) who is a provider of medical
care under the plan.
‘‘(C) CERTAIN
PLANS
EXCLUDED.—Sub-
paragraph (A) shall not apply to an association
health plan which is in existence on the date of
the enactment of the Comprehensive Access and
Responsibility in Health Care Act of 1999.
‘‘(D) SOLE AUTHORITY.—The board has
sole authority under the plan to approve appli-
cations for participation in the plan and to con-
106
tract with a service provider to administer the
day-to-day affairs of the plan.
‘‘(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 con-
sisting of its franchisees—
‘‘(1) the requirements of subsection (a) and sec-
tion 801(a)(1) shall be deemed met if such require-
ments 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 associa-
tion 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, through negotiated rule-
making, define for purposes of this subsection the terms
‘franchiser’, ‘franchise network’, and ‘franchisee’.
‘‘(d) CERTAIN COLLECTIVELY BARGAINED PLANS.—
‘‘(1) IN
GENERAL.—In the case of a group
health plan described in paragraph (2)—
‘‘(A) the requirements of subsection (a)
and section 801(a)(1) shall be deemed met;
107
‘‘(B) the joint board of trustees shall be
deemed a board of trustees with respect to
which the requirements of subsection (b) are
met; and
‘‘(C) the requirements of section 804 shall
be deemed met.
‘‘(2) REQUIREMENTS.—A group health plan is
described in this paragraph if—
‘‘(A) the plan is a multiemployer plan; or
‘‘(B) the plan is in existence on April 1,
1997, and would be described in section
3(40)(A)(i) but solely for the failure to meet
the requirements of section 3(40)(C)(ii).
‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE-
MENTS.
‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The
requirements of this subsection are met with respect to
an association 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
with respect to which the requirements of sub-
section (b) are met,
108
except that, in the case of a sponsor which is a pro-
fessional association or other individual-based asso-
ciation, if at least one of the officers, directors, or
employees of an employer, or at least one of the in-
dividuals who are partners in an employer and who
actively participates in the business, is a member or
such an affiliated member of the sponsor, partici-
pating 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 em-
ployers; or
‘‘(B) the beneficiaries of individuals de-
scribed in subparagraph (A).
‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM-
PLOYEES.—In the case of an association health plan in
existence on the date of the enactment of the Comprehen-
sive Access and Responsibility in Health Care Act of 1999,
an affiliated member of the sponsor of the plan may be
offered coverage under the plan as a participating em-
ployer only if—
109
‘‘(1) the affiliated member was an affiliated
member on the date of certification under this part;
or
‘‘(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 employ-
ees who would otherwise be eligible to participate in
such association health plan.
‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re-
quirements of this subsection are met with respect to an
association 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 cov-
erage 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.
‘‘(d) PROHIBITION
OF DISCRIMINATION AGAINST
EMPLOYERS
AND EMPLOYEES ELIGIBLE
TO PARTICI-
PATE.—The requirements of this subsection are met with
respect to an association health plan if—
110
‘‘(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) all such coverage options under the plan
are actively marketed to such participating employ-
ers; 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 an association health plan if the
following requirements are met:
‘‘(1) 
CONTENTS
OF
GOVERNING
INSTRU-
MENTS.—The instruments governing the plan in-
clude a written instrument, meeting the require-
ments of an instrument required under section
402(a)(1), which—
111
‘‘(A) provides that the board of trustees
serves as the named fiduciary required for plans
under section 402(a)(1) and serves in the ca-
pacity of a plan administrator (referred to in
section 3(16)(A));
‘‘(B) provides that the sponsor of the plan
is to serve as plan sponsor (referred to in sec-
tion 3(16)(B)); and
‘‘(C) incorporates the requirements of sec-
tion 806.
‘‘(2) CONTRIBUTION
RATES
MUST
BE
NON-
DISCRIMINATORY.—
‘‘(A) The contribution rates for any par-
ticipating small employer do not vary on the
basis of the claims experience of such employer
and do not vary on the basis of the type of
business or industry in which such employer is
engaged.
‘‘(B) Nothing in this title or any other pro-
vision of law shall be construed to preclude an
association health plan, or a health insurance
issuer offering health insurance coverage in
connection with an association health plan,
from—
112
‘‘(i) setting contribution rates based
on the claims experience of the plan; or
‘‘(ii) varying contribution rates for
small employers in a State to the extent
that such rates could vary using the same
methodology employed in such State for
regulating premium rates in the small
group market with respect to health insur-
ance coverage offered in connection with
bona fide associations (within the meaning
of section 2791(d)(3) of the Public Health
Service Act),
subject to the requirements of section 702(b)
relating to contribution rates.
‘‘(3) FLOOR FOR NUMBER OF COVERED INDI-
VIDUALS
WITH
RESPECT
TO
CERTAIN
PLANS.—If
any benefit option under the plan does not consist
of health insurance coverage, the plan has as of the
beginning of the plan year not fewer than 1,000 par-
ticipants and beneficiaries.
‘‘(4) MARKETING REQUIREMENTS.—
‘‘(A) IN
GENERAL.—If a benefit option
which consists of health insurance coverage is
offered under the plan, State-licensed insurance
agents shall be used to distribute to small em-
113
ployers coverage which does not consist of
health insurance coverage in a manner com-
parable to the manner in which such agents are
used to distribute health insurance coverage.
‘‘(B) 
STATE-LICENSED
INSURANCE
AGENTS.—For purposes of subparagraph (A),
the term ‘State-licensed insurance agents’
means one or more agents who are licensed in
a State and are subject to the laws of such
State relating to licensure, qualification, test-
ing, examination, and continuing education of
persons authorized to offer, sell, or solicit
health insurance coverage in such State.
‘‘(5) 
REGULATORY
REQUIREMENTS.—Such
other requirements as the applicable authority deter-
mines are necessary to carry out the purposes of this
part, which shall be prescribed by the applicable au-
thority by regulation through negotiated rulemaking.
‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO
DESIGN BENEFIT OPTIONS.—Subject to section 514(d),
nothing in this part or any provision of State law (as de-
fined in section 514(c)(1)) shall be construed to preclude
an association health plan, or a health insurance issuer
offering health insurance coverage in connection with an
association health plan, from exercising its sole discretion
114
in selecting the specific items and services consisting of
medical care to be included as benefits under such plan
or coverage, except (subject to section 514) in the case
of any law to the extent that it (1) prohibits an exclusion
of a specific disease from such coverage, or (2) is not pre-
empted under section 731(a)(1) with respect to matters
governed by section 711 or 712.
‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS
FOR 
SOLVENCY 
FOR 
PLANS 
PROVIDING
HEALTH BENEFITS IN ADDITION TO HEALTH
INSURANCE COVERAGE.
‘‘(a) IN GENERAL.—The requirements of this section
are met with respect to an association health plan if—
‘‘(1) the benefits under the plan consist solely
of health insurance coverage; or
‘‘(2) if the plan provides any additional benefit
options which do not consist of health insurance cov-
erage, the plan—
‘‘(A) establishes and maintains reserves
with respect to such additional benefit options,
in amounts recommended by the qualified actu-
ary, consisting of—
‘‘(i) a reserve sufficient for unearned
contributions;
115
‘‘(ii) a reserve sufficient for benefit li-
abilities which have been incurred, which
have not been satisfied, and for which risk
of loss has not yet been transferred, and
for expected administrative costs with re-
spect to such benefit liabilities;
‘‘(iii) a reserve sufficient for any other
obligations of the plan; and
‘‘(iv) a reserve sufficient for a margin
of error and other fluctuations, taking into
account the specific circumstances of the
plan; and
‘‘(B) establishes and maintains aggregate
and specific excess /stop loss insurance and sol-
vency indemnification, with respect to such ad-
ditional benefit options for which risk of loss
has not yet been transferred, as follows:
‘‘(i) The plan shall secure aggregate
excess /stop loss insurance for the plan
with an attachment point which is not
greater than 125 percent of expected gross
annual claims. The applicable authority
may by regulation, through negotiated
rulemaking, provide for upward adjust-
ments in the amount of such percentage in
116
specified circumstances in which the plan
specifically provides for and maintains re-
serves in excess of the amounts required
under subparagraph (A).
‘‘(ii) The plan shall secure specific ex-
cess /stop loss insurance for the plan with
an attachment point which is at least equal
to an amount recommended by the plan’s
qualified actuary (but not more than
$175,000). The applicable authority may
by regulation, through negotiated rule-
making, provide for adjustments in the
amount of such insurance in specified cir-
cumstances in which the plan specifically
provides for and maintains reserves in ex-
cess of the amounts required under sub-
paragraph (A).
‘‘(iii) The plan shall secure indem-
nification insurance for any claims which
the plan is unable to satisfy by reason of
a plan termination.
Any regulations prescribed by the applicable authority
pursuant to clause (i) or (ii) of subparagraph (B) may
allow for such adjustments in the required levels of excess /
stop loss insurance as the qualified actuary may rec-
117
ommend, taking into account the specific circumstances
of the plan.
‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS
RESERVES.—In the case of any association health plan de-
scribed in subsection (a)(2), the requirements of this sub-
section are met if the plan establishes and maintains sur-
plus in an amount at least equal to—
‘‘(1) $500,000, or
‘‘(2) such greater amount (but not greater than
$2,000,000) as may be set forth in regulations pre-
scribed by the applicable authority through nego-
tiated rulemaking, based on the level of aggregate
and specific excess /stop loss insurance provided with
respect to such plan.
‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of
any association health plan described in subsection (a)(2),
the applicable authority may provide such additional re-
quirements relating to reserves and excess /stop loss insur-
ance as the applicable authority considers appropriate.
Such requirements may be provided by regulation, through
negotiated rulemaking, with respect to any such plan or
any class of such plans.
‘‘(d) ADJUSTMENTS FOR EXCESS /STOP LOSS INSUR-
ANCE.—The applicable authority may provide for adjust-
ments to the levels of reserves otherwise required under
118
subsections (a) and (b) with respect to any plan or class
of plans to take into account excess /stop loss insurance
provided with respect to such plan or plans.
‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The
applicable authority may permit an association health plan
described in subsection (a)(2) to substitute, for all or part
of the requirements of this section (except subsection
(a)(2)(B)(iii)), such security, guarantee, hold-harmless ar-
rangement, or other financial arrangement as the applica-
ble authority determines to be adequate to enable the plan
to fully meet all its financial obligations on a timely basis
and is otherwise no less protective of the interests of par-
ticipants and beneficiaries than the requirements for
which it is substituted. The applicable authority may take
into account, for purposes of this subsection, evidence pro-
vided by the plan or sponsor which demonstrates an as-
sumption of liability with respect to the plan. Such evi-
dence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under
applicable terms of the plan in the form of assessments
of participating employers, security, or other financial ar-
rangement.
‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT
OF BENEFITS BY CERTAIN PLANS IN DISTRESS.—
119
‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSO-
CIATION HEALTH PLAN FUND.—
‘‘(A) IN GENERAL.—In the case of an as-
sociation health plan described in subsection
(a)(2), the requirements of this subsection are
met if the plan makes payments into the Asso-
ciation Health Plan Fund under this subpara-
graph when they are due. Such payments shall
consist of annual payments in the amount of
$5,000, and, in addition to such annual pay-
ments, such supplemental payments as the Sec-
retary may determine to be necessary under
paragraph (2). Payments under this paragraph
are payable to the Fund at the time determined
by the Secretary. Initial payments are due in
advance of certification under this part. Pay-
ments shall continue to accrue until a plan’s as-
sets are distributed pursuant to a termination
procedure.
‘‘(B) PENALTIES FOR FAILURE TO MAKE
PAYMENTS.—If any payment is not made by a
plan when it is due, a late payment charge of
not more than 100 percent of the payment
which was not timely paid shall be payable by
the plan to the Fund.
120
‘‘(C) CONTINUED
DUTY
OF
THE
SEC-
RETARY.—The Secretary shall not cease to
carry out the provisions of paragraph (2) on ac-
count of the failure of a plan to pay any pay-
ment when due.
‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE
EXCESS /STOP LOSS INSURANCE COVERAGE AND IN-
DEMNIFICATION
INSURANCE
COVERAGE
FOR
CER-
TAIN PLANS.—In any case in which the applicable
authority determines that there is, or that there is
reason to believe that there will be: (A) a failure to
take necessary corrective actions under section
809(a) with respect to an association health plan de-
scribed in subsection (a)(2); or (B) a termination of
such a plan under section 809(b) or 810(b)(8) (and,
if the applicable authority is not the Secretary, cer-
tifies such determination to the Secretary), the Sec-
retary shall determine the amounts necessary to
make payments to an insurer (designated by the
Secretary) to maintain in force excess /stop loss in-
surance coverage or indemnification insurance cov-
erage for such plan, if the Secretary determines that
there is a reasonable expectation that, without such
payments, claims would not be satisfied by reason of
termination of such coverage. The Secretary shall, to
121
the extent provided in advance in appropriation
Acts, pay such amounts so determined to the insurer
designated by the Secretary.
‘‘(3) ASSOCIATION HEALTH PLAN FUND.—
‘‘(A) IN GENERAL.—There is established
on the books of the Treasury a fund to be
known as the ‘Association Health Plan Fund’.
The Fund shall be available for making pay-
ments pursuant to paragraph (2). The Fund
shall be credited with payments received pursu-
ant to paragraph (1)(A), penalties received pur-
suant to paragraph (1)(B); and earnings on in-
vestments of amounts of the Fund under sub-
paragraph (B).
‘‘(B) INVESTMENT.—Whenever the Sec-
retary determines that the moneys of the fund
are in excess of current needs, the Secretary
may request the investment of such amounts as
the Secretary determines advisable by the Sec-
retary of the Treasury in obligations issued or
guaranteed by the United States.
‘‘(g) EXCESS /STOP LOSS INSURANCE.—For pur-
poses of this section—
‘‘(1) AGGREGATE
EXCESS /STOP
LOSS
INSUR-
ANCE.—The term ‘aggregate excess /stop loss insur-
122
ance’ means, in connection with an association
health plan, a contract—
‘‘(A) under which an insurer (meeting such
minimum standards as the applicable authority
may prescribe by regulation through negotiated
rulemaking) provides for payment to the plan
with respect to aggregate claims under the plan
in excess of an amount or amounts specified in
such contract;
‘‘(B) which is guaranteed renewable; and
‘‘(C) which allows for payment of pre-
miums by any third party on behalf of the in-
sured plan.
‘‘(2) SPECIFIC
EXCESS /STOP
LOSS
INSUR-
ANCE.—The term ‘specific excess /stop loss insur-
ance’ means, in connection with an association
health plan, a contract—
‘‘(A) under which an insurer (meeting such
minimum standards as the applicable authority
may prescribe by regulation through negotiated
rulemaking) provides for payment to the plan
with respect to claims under the plan in connec-
tion with a covered individual in excess of an
amount or amounts specified in such contract
in connection with such covered individual;
123
‘‘(B) which is guaranteed renewable; and
‘‘(C) which allows for payment of pre-
miums by any third party on behalf of the in-
sured plan.
‘‘(h) INDEMNIFICATION INSURANCE.—For purposes
of this section, the term ‘indemnification insurance’
means, in connection with an association health plan, a
contract—
‘‘(1) under which an insurer (meeting such min-
imum standards as the applicable authority may pre-
scribe through negotiated rulemaking) provides for
payment to the plan with respect to claims under the
plan which the plan is unable to satisfy by reason
of a termination pursuant to section 809(b) (relating
to mandatory termination);
‘‘(2) which is guaranteed renewable and
noncancellable for any reason (except as the applica-
ble authority may prescribe by regulation through
negotiated rulemaking); and
‘‘(3) which allows for payment of premiums by
any third party on behalf of the insured plan.
‘‘(i) RESERVES.—For purposes of this section, the
term ‘reserves’ means, in connection with an association
health plan, plan assets which meet the fiduciary stand-
ards under part 4 and such additional requirements re-
124
garding liquidity as the applicable authority may prescribe
through negotiated rulemaking.
‘‘(j) SOLVENCY STANDARDS WORKING GROUP.—
‘‘(1) IN GENERAL.—Within 90 days after the
date of the enactment of the Comprehensive Access
and Responsibility in Health Care Act of 1999, the
applicable authority shall establish a Solvency
Standards Working Group. In prescribing the initial
regulations under this section, the applicable author-
ity shall take into account the recommendations of
such Working Group.
‘‘(2) MEMBERSHIP.—The Working Group shall
consist of not more than 15 members appointed by
the applicable authority. The applicable authority
shall include among persons invited to membership
on the Working Group at least one of each of the
following:
‘‘(A) a representative of the National Asso-
ciation of Insurance Commissioners;
‘‘(B) a representative of the American
Academy of Actuaries;
‘‘(C) a representative of the State govern-
ments, or their interests;
‘‘(D) a representative of existing self-in-
sured arrangements, or their interests;
125
‘‘(E) a representative of associations of the
type referred to in section 801(b)(1), or their
interests; and
‘‘(F) a representative of multiemployer
plans that are group health plans, or their in-
terests.
‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE-
LATED REQUIREMENTS.
‘‘(a) FILING FEE.—Under the procedure prescribed
pursuant to section 802(a), an association 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 appropria-
tion Acts, for the sole purpose of administering the certifi-
cation procedures applicable with respect to association
health plans.
‘‘(b) INFORMATION TO BE INCLUDED IN APPLICA-
TION FOR CERTIFICATION.—An application for certifi-
cation under this part meets the requirements of this sec-
tion only if it includes, in a manner and form which shall
be prescribed by the applicable authority through nego-
tiated rulemaking, at least the following information:
‘‘(1) IDENTIFYING INFORMATION.—The names
and addresses of—
126
‘‘(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 pro-
vided by the board of trustees that the bonding re-
quirements of section 412 will be met as of the date
of the application or (if later) commencement of op-
erations.
‘‘(4) PLAN DOCUMENTS.—A copy of the docu-
ments 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
PRO-
VIDERS.—A copy of any agreements between the
plan and contract administrators and other service
providers.
‘‘(6) FUNDING REPORT.—In the case of asso-
ciation health plans providing benefits options in ad-
127
dition to health insurance coverage, a report setting
forth information with respect to such additional
benefit options determined as of a date within the
120-day period ending with the date of the applica-
tion, including the following:
‘‘(A) RESERVES.—A statement, certified
by the board of trustees of the plan, and a
statement of actuarial opinion, signed by a
qualified actuary, that all applicable require-
ments of section 806 are or will be met in ac-
cordance with regulations which the applicable
authority shall prescribe through negotiated
rulemaking.
‘‘(B) 
ADEQUACY
OF
CONTRIBUTION
RATES.—A statement of actuarial opinion,
signed by a qualified actuary, which sets forth
a description of the extent to which contribution
rates are adequate to provide for the payment
of all obligations and the maintenance of re-
quired reserves under the plan for the 12-
month period beginning with such date within
such 120-day period, taking into account the
expected coverage and experience of the plan. If
the contribution rates are not fully adequate,
the statement of actuarial opinion shall indicate
128
the extent to which the rates are inadequate
and the changes needed to ensure adequacy.
‘‘(C) CURRENT AND PROJECTED VALUE OF
ASSETS AND LIABILITIES.—A statement of ac-
tuarial opinion signed by a qualified actuary,
which sets forth the current value of the assets
and liabilities accumulated under the plan and
a projection of the assets, liabilities, income,
and expenses of the plan for the 12-month pe-
riod referred to in subparagraph (B). The in-
come statement shall identify separately the
plan’s administrative expenses and claims.
‘‘(D) 
COSTS
OF
COVERAGE
TO
BE
CHARGED
AND
OTHER
EXPENSES.—A state-
ment of the costs of coverage to be charged, in-
cluding an itemization of amounts for adminis-
tration, reserves, and other expenses associated
with the operation of the plan.
‘‘(E) OTHER
INFORMATION.—Any other
information as may be determined by the appli-
cable authority, by regulation through nego-
tiated rulemaking, as necessary to carry out the
purposes of this part.
‘‘(c) FILING
NOTICE
OF
CERTIFICATION
WITH
STATES.—A certification granted under this part to an
129
association 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.
‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case
of any association 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 au-
thority by regulation through negotiated rulemaking. The
applicable authority may require by regulation, through
negotiated rulemaking, prior notice of material changes
with respect to specified matters which might serve as the
basis for suspension or revocation of the certification.
‘‘(e) REPORTING REQUIREMENTS FOR CERTAIN AS-
SOCIATION HEALTH PLANS.—An association health plan
certified under this part which provides benefit options in
addition to health insurance coverage for such plan year
shall meet the requirements of section 103 by filing an
annual report under such section which shall include infor-
130
mation described in subsection (b)(6) with respect to the
plan year and, notwithstanding section 104(a)(1)(A), shall
be filed with the applicable authority not later than 90
days after the close of the plan year (or on such later date
as may be prescribed by the applicable authority). The ap-
plicable authority may require by regulation through nego-
tiated rulemaking such interim reports as it considers ap-
propriate.
‘‘(f) ENGAGEMENT OF QUALIFIED ACTUARY.—The
board of trustees of each association health plan which
provides benefits options in addition to health insurance
coverage and which is applying for certification under this
part or is certified under this part shall engage, on behalf
of all participants and beneficiaries, a qualified actuary
who shall be responsible for the preparation of the mate-
rials comprising information necessary to be submitted by
a qualified actuary under this part. The qualified actuary
shall utilize such assumptions and techniques as are nec-
essary to enable such actuary to form an opinion as to
whether the contents of the matters reported under this
part—
‘‘(1) are in the aggregate reasonably related to
the experience of the plan and to reasonable expecta-
tions; and
131
‘‘(2) represent such actuary’s best estimate of
anticipated experience under the plan.
The opinion by the qualified actuary shall be made with
respect to, and shall be made a part of, the annual report.
‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER-
MINATION.
‘‘Except as provided in section 809(b), an association
health plan which is or has been certified under this part
may terminate (upon or at any time after cessation of ac-
cruals in benefit liabilities) only if the board of trustees—
‘‘(1) not less than 60 days before the proposed
termination date, 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 appli-
cable authority.
Actions required under this section shall be taken in such
form and manner as may be prescribed by the applicable
authority by regulation through negotiated rulemaking.
132
‘‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMI-
NATION.
‘‘(a) ACTIONS
TO
AVOID
DEPLETION
OF
RE-
SERVES.—An association health plan which is certified
under this part and which provides benefits other than
health insurance coverage shall continue to meet the re-
quirements of section 806, irrespective of whether such
certification continues in effect. The board of trustees of
such plan shall determine quarterly whether the require-
ments of section 806 are met. In any case in which the
board determines that there is reason to believe that there
is or will be a failure to meet such requirements, or the
applicable authority makes such a determination and so
notifies the board, the board shall immediately notify the
qualified actuary engaged by the plan, and such actuary
shall, not later than the end of the next following month,
make such recommendations to the board for corrective
action as the actuary determines necessary to ensure com-
pliance with section 806. Not later than 30 days after re-
ceiving from the actuary recommendations for corrective
actions, the board shall notify the applicable authority (in
such form and manner as the applicable authority may
prescribe by regulation through negotiated rulemaking) of
such recommendations of the actuary for corrective action,
together with a description of the actions (if any) that the
board has taken or plans to take in response to such rec-
133
ommendations. The board shall thereafter report to the
applicable authority, in such form and frequency as the
applicable authority may specify to the board, regarding
corrective action taken by the board until the requirements
of section 806 are met.
‘‘(b) MANDATORY TERMINATION.—In any case in
which—
‘‘(1) the applicable authority has been notified
under subsection (a) of a failure of an association
health plan which is or has been certified under this
part and is described in section 806(a)(2) to meet
the requirements of section 806 and has not been
notified by the board of trustees of the plan that
corrective action has restored compliance with such
requirements; and
‘‘(2) the applicable authority determines that
there is a reasonable expectation that the plan will
continue to fail to meet the requirements of section
806,
the board of trustees of the plan shall, at the direction
of the applicable authority, terminate the plan and, in the
course of the termination, take such actions as the appli-
cable authority may require, including satisfying any
claims referred to in section 806(a)(2)(B)(iii) and recov-
ering for the plan any liability under subsection
134
(a)(2)(B)(iii) or (e) of section 806, as necessary to ensure
that the affairs of the plan will be, to the maximum extent
possible, wound up in a manner which will result in timely
provision of all benefits for which the plan is obligated.
‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL-
VENT ASSOCIATION HEALTH PLANS PRO-
VIDING HEALTH BENEFITS IN ADDITION TO
HEALTH INSURANCE COVERAGE.
‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR
INSOLVENT PLANS.—Whenever the Secretary determines
that an association health plan which is or has been cer-
tified under this part and which is described in section
806(a)(2) will be unable to provide benefits when due or
is otherwise in a financially hazardous condition, as shall
be defined by the Secretary by regulation through nego-
tiated rulemaking, the Secretary shall, upon notice to the
plan, apply to the appropriate United States district court
for appointment of the Secretary as trustee to administer
the plan for the duration of the insolvency. The plan may
appear as a party and other interested persons may inter-
vene in the proceedings at the discretion of the court. The
court shall appoint such Secretary trustee if the court de-
termines that the trusteeship is necessary to protect the
interests of the participants and beneficiaries or providers
of medical care or to avoid any unreasonable deterioration
135
of the financial condition of the plan. The trusteeship of
such Secretary shall continue until the conditions de-
scribed in the first sentence of this subsection are rem-
edied or the plan is terminated.
‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon
appointment as trustee under subsection (a), shall have
the power—
‘‘(1) to do any act authorized by the plan, this
title, or other applicable provisions of law to be done
by the plan administrator or any trustee of the plan;
‘‘(2) to require the transfer of all (or any part)
of the assets and records of the plan to the Sec-
retary as trustee;
‘‘(3) to invest any assets of the plan which the
Secretary holds in accordance with the provisions of
the plan, regulations prescribed by the Secretary
through negotiated rulemaking, and applicable provi-
sions of law;
‘‘(4) to require the sponsor, the plan adminis-
trator, any participating employer, and any employee
organization representing plan participants to fur-
nish any information with respect to the plan which
the Secretary as trustee may reasonably need in
order to administer the plan;
136
‘‘(5) to collect for the plan any amounts due the
plan and to recover reasonable expenses of the trust-
eeship;
‘‘(6) to commence, prosecute, or defend on be-
half of the plan any suit or proceeding involving the
plan;
‘‘(7) to issue, publish, or file such notices, state-
ments, and reports as may be required by the Sec-
retary by regulation through negotiated rulemaking
or required by any order of the court;
‘‘(8) to terminate the plan (or provide for its
termination accordance with section 809(b)) and liq-
uidate the plan assets, to restore the plan to the re-
sponsibility of the sponsor, or to continue the trust-
eeship;
‘‘(9) to provide for the enrollment of plan par-
ticipants and beneficiaries under appropriate cov-
erage options; and
‘‘(10) to do such other acts as may be nec-
essary to comply with this title or any order of the
court and to protect the interests of plan partici-
pants and beneficiaries and providers of medical
care.
137
‘‘(c) NOTICE OF APPOINTMENT.—As soon as prac-
ticable after the Secretary’s appointment as trustee, the
Secretary shall give notice of such appointment to—
‘‘(1) the sponsor and plan administrator;
‘‘(2) each participant;
‘‘(3) each participating employer; and
‘‘(4) if applicable, each employee organization
which, for purposes of collective bargaining, rep-
resents plan participants.
‘‘(d) ADDITIONAL DUTIES.—Except to the extent in-
consistent with the provisions of this title, or as may be
otherwise ordered by the court, the Secretary, upon ap-
pointment as trustee under this section, shall be subject
to the same duties as those of a trustee under section 704
of title 11, United States Code, and shall have the duties
of a fiduciary for purposes of this title.
‘‘(e) OTHER PROCEEDINGS.—An application by the
Secretary under this subsection may be filed notwith-
standing the pendency in the same or any other court of
any bankruptcy, mortgage foreclosure, or equity receiver-
ship proceeding, or any proceeding to reorganize, conserve,
or liquidate such plan or its property, or any proceeding
to enforce a lien against property of the plan.
‘‘(f) JURISDICTION OF COURT.—
138
‘‘(1) IN GENERAL.—Upon the filing of an appli-
cation for the appointment as trustee or the issuance
of a decree under this section, the court to which the
application is made shall have exclusive jurisdiction
of the plan involved and its property wherever lo-
cated with the powers, to the extent consistent with
the purposes of this section, of a court of the United
States having jurisdiction over cases under chapter
11 of title 11, United States Code. Pending an adju-
dication under this section such court shall stay, and
upon appointment by it of the Secretary as trustee,
such court shall continue the stay of, any pending
mortgage foreclosure, equity receivership, or other
proceeding to reorganize, conserve, or liquidate the
plan, the sponsor, or property of such plan or spon-
sor, and any other suit against any receiver, conser-
vator, or trustee of the plan, the sponsor, or prop-
erty of the plan or sponsor. Pending such adjudica-
tion and upon the appointment by it of the Sec-
retary as trustee, the court may stay any proceeding
to enforce a lien against property of the plan or the
sponsor or any other suit against the plan or the
sponsor.
‘‘(2) VENUE.—An action under this section
may be brought in the judicial district where the
139
sponsor or the plan administrator resides or does
business or where any asset of the plan is situated.
A district court in which such action is brought may
issue process with respect to such action in any
other judicial district.
‘‘(g) PERSONNEL.—In accordance with regulations
which shall be prescribed by the Secretary through nego-
tiated rulemaking, the Secretary shall appoint, retain, and
compensate accountants, actuaries, and other professional
service personnel as may be necessary in connection with
the Secretary’s service as trustee under this section.
‘‘SEC. 811. STATE ASSESSMENT AUTHORITY.
‘‘(a) IN GENERAL.—Notwithstanding section 514, a
State may impose by law a contribution tax on an associa-
tion health plan described in section 806(a)(2), if the plan
commenced operations in such State after the date of the
enactment of the Comprehensive Access and Responsi-
bility in Health Care Act of 1999.
‘‘(b) CONTRIBUTION TAX.—For purposes of this sec-
tion, the term ‘contribution tax’ imposed by a State on
an association health plan means any tax imposed by such
State if—
‘‘(1) such tax is computed by applying a rate to
the amount of premiums or contributions, with re-
spect to individuals covered under the plan who are
140
residents of such State, which are received by the
plan from participating employers located in such
State or from such individuals;
‘‘(2) the rate of such tax does not exceed the
rate of any tax imposed by such State on premiums
or contributions received by insurers or health main-
tenance organizations for health insurance coverage
offered in such State in connection with a group
health plan;
‘‘(3) such tax is otherwise nondiscriminatory;
and
‘‘(4) the amount of any such tax assessed on
the plan is reduced by the amount of any tax or as-
sessment otherwise imposed by the State on pre-
miums, contributions, or both received by insurers or
health maintenance organizations for health insur-
ance coverage, aggregate excess /stop loss insurance
(as defined in section 806(g)(1)), specific excess /
stop loss insurance (as defined in section 806(g)(2)),
other insurance related to the provision of medical
care under the plan, or any combination thereof pro-
vided by such insurers or health maintenance organi-
zations in such State in connection with such plan.
‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.
‘‘(a) DEFINITIONS.—For purposes of this part—
141
‘‘(1) GROUP HEALTH PLAN.—The term ‘group
health plan’ has the meaning provided in section
733(a)(1) (after applying subsection (b) of this sec-
tion).
‘‘(2) MEDICAL CARE.—The term ‘medical care’
has the meaning provided in section 733(a)(2).
‘‘(3) HEALTH
INSURANCE
COVERAGE.—The
term ‘health insurance coverage’ has the meaning
provided in section 733(b)(1).
‘‘(4) HEALTH INSURANCE ISSUER.—The term
‘health insurance issuer’ has the meaning provided
in section 733(b)(2).
‘‘(5) APPLICABLE AUTHORITY.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the term ‘applicable author-
ity’ means, in connection with an association
health plan—
‘‘(i) the State recognized pursuant to
subsection (c) of section 506 as the State
to which authority has been delegated in
connection with such plan; or
‘‘(ii) if there if no State referred to in
clause (i), the Secretary.
‘‘(B) EXCEPTIONS.—
142
‘‘(i) 
JOINT
AUTHORITIES.—Where
such term appears in section 808(3), sec-
tion 807(e) (in the first instance), section
809(a) (in the second instance), section
809(a) (in the fourth instance), and sec-
tion 809(b)(1), such term means, in con-
nection with an association health plan, the
Secretary and the State referred to in sub-
paragraph (A)(i) (if any) in connection
with such plan.
‘‘(ii) REGULATORY
AUTHORITIES.—
Where such term appears in section 802(a)
(in the first instance), section 802(d), sec-
tion 
802(e), 
section 
803(d), 
section
805(a)(5), 
section 
806(a)(2), 
section
806(b), section 806(c), section 806(d),
paragraphs (1)(A) and (2)(A) of section
806(g), section 806(h), section 806(i), sec-
tion 806(j), section 807(a) (in the second
instance), section 807(b), section 807(d),
section 807(e) (in the second instance),
section 808 (in the matter after paragraph
(3)), and section 809(a) (in the third in-
stance), such term means, in connection
143
with an association health plan, the Sec-
retary.
‘‘(6) HEALTH STATUS-RELATED FACTOR.—The
term ‘health status-related factor’ has the meaning
provided in section 733(d)(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 sec-
tion 732(d)(3) on the first day of the plan
year.
‘‘(ii) STATE
EXCEPTION.—Clause (i)
shall not apply in the case of health insur-
ance 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
144
market (as defined in section 2791(e)(5) of
the Public Health Service Act) is regulated
by such State.
‘‘(8) PARTICIPATING
EMPLOYER.—The term
‘participating employer’ means, in connection with
an association health plan, any employer, if any indi-
vidual who is an employee of such employer, a part-
ner 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.
‘‘(9) APPLICABLE
STATE
AUTHORITY.—The
term ‘applicable State authority’ means, with respect
to a health insurance issuer in a State, the State in-
surance commissioner or official or officials des-
ignated 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.
‘‘(10) QUALIFIED ACTUARY.—The term ‘quali-
fied actuary’ means an individual who is a member
of the American Academy of Actuaries or meets
such reasonable standards and qualifications as the
145
Secretary may provide by regulation through nego-
tiated rulemaking.
‘‘(11) AFFILIATED MEMBER.—The term ‘affili-
ated 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,
‘‘(B) in the case of a sponsor with mem-
bers which consist of associations, a person who
is a member of any such association and elects
an affiliated status with the sponsor, or
‘‘(C) in the case of an association health
plan in existence on the date of the enactment
of the Comprehensive Access and Responsibility
in Health Care Act of 1999, a person eligible
to be a member of the sponsor or one of its
member associations.
‘‘(12) LARGE EMPLOYER.—The term ‘large em-
ployer’ means, in connection with a group health
plan with respect to a plan year, an employer who
employed an average of at least 51 employees on
business days during the preceding calendar year
and who employs at least 2 employees on the first
day of the plan year.
146
‘‘(13) SMALL EMPLOYER.—The term ‘small em-
ployer’ means, in connection with a group health
plan with respect to a plan year, an employer who
is not a large employer.
‘‘(b) RULES OF CONSTRUCTION.—
‘‘(1) EMPLOYERS AND EMPLOYEES.—For pur-
poses of determining whether a plan, fund, or pro-
gram is an employee welfare benefit plan which is an
association health plan, and for purposes of applying
this title in connection with such plan, fund, or pro-
gram so determined to be such an employee welfare
benefit plan—
‘‘(A) in the case of a partnership, the term
‘employer’ (as defined in section (3)(5)) in-
cludes the partnership in relation to the part-
ners, and the term ‘employee’ (as defined in
section (3)(6)) includes any partner in relation
to the partnership; and
‘‘(B) in the case of a self-employed indi-
vidual, the term ‘employer’ (as defined in sec-
tion 3(5)) and the term ‘employee’ (as defined
in section 3(6)) shall include such individual.
‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED
AS EMPLOYEE WELFARE BENEFIT PLANS.—In the
case of any plan, fund, or program which was estab-
147
lished or is maintained for the purpose of providing
medical care (through the purchase of insurance or
otherwise) for employees (or their dependents) cov-
ered thereunder and which demonstrates to the Sec-
retary that all requirements for certification under
this part would be met with respect to such plan,
fund, or program if such plan, fund, or program
were a group health plan, such plan, fund, or pro-
gram shall be treated for purposes of this title as an
employee welfare benefit plan on and after the date
of such demonstration.
‘‘(c) APPLICABILITY ONLY WITH RESPECT TO IN-
CLUDED GROUP HEALTH PLAN BENEFITS.—
‘‘(1) IN GENERAL.—The requirements for cer-
tification under this part in the case of any associa-
tion health plan shall apply only in connection with
included group health plan benefits provided under
such plan.
‘‘(2) INCLUDED GROUP HEALTH PLAN BENE-
FITS.—For purposes of paragraph (1), the term ‘in-
cluded group health plan benefit’ means a benefit
which is not an excepted benefit (as defined in sec-
tion 733(c)).’’.
(b) CONFORMING AMENDMENTS
TO PREEMPTION
RULES.—
148
(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 an association 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 ‘‘Sub-
section (a)’’ and inserting ‘‘Subsections (a) and
(d)’’;
(B) in subsection (b)(5), by striking ‘‘sub-
section (a)’’ in subparagraph (A) and inserting
‘‘subsection (a) of this section and subsections
(a)(2)(B) and (b) of section 805’’, and by strik-
ing ‘‘subsection (a)’’ in subparagraph (B) and
inserting ‘‘subsection (a) of this section or sub-
section (a)(2)(B) or (b) of section 805’’;
(C) by redesignating subsection (d) as sub-
section (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
149
laws insofar as they may now or hereafter preclude, or
have the effect of precluding, a health insurance issuer
from offering health insurance coverage in connection with
an association health plan which is certified under part
8.
‘‘(2) Except as provided in paragraphs (4) and (5)
of subsection (b) of this section—
‘‘(A) In any case in which health insurance cov-
erage of any policy type is offered under an associa-
tion health plan certified under part 8 to a partici-
pating employer operating in such State, the provi-
sions of this title shall supersede any and all laws
of such State insofar as they may preclude a health
insurance issuer from offering health insurance cov-
erage of the same policy type to other employers op-
erating in the State which are eligible for coverage
under such association health plan, whether or not
such other employers are participating employers in
such plan.
‘‘(B) In any case in which health insurance cov-
erage of any policy type is offered under an associa-
tion health plan in a State and the filing, with the
applicable State authority, of the policy form in con-
nection with such policy type is approved by such
State authority, the provisions of this title shall su-
150
persede any and all laws of any other State in which
health insurance coverage of such type is offered, in-
sofar as they may preclude, upon the filing in the
same form and manner of such policy form with the
applicable State authority in such other State, the
approval of the filing in such other State.
‘‘(3) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
‘‘(4) For purposes of this subsection, the term ‘asso-
ciation health plan’ has the meaning provided in section
801(a), and the terms ‘health insurance coverage’, ‘par-
ticipating employer’, and ‘health insurance issuer’ have
the meanings provided such terms in section 811, respec-
tively.’’.
(3) Section 514(b)(6)(A) of such Act (29
U.S.C. 1144(b)(6)(A)) is amended—
(A) in clause (i)(II), by striking ‘‘and’’ at
the end;
(B) in clause (ii), by inserting ‘‘and which
does not provide medical care (within the mean-
ing of section 733(a)(2)),’’ after ‘‘arrange-
ment,’’, and by striking ‘‘title.’’ and inserting
‘‘title, and’’; and
151
(C) by adding at the end the following new
clause:
‘‘(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 in-
surance may apply.’’.
(4) Section 514(e) of such Act (as redesignated
by paragraph (2)(C)) is amended—
(A) by striking ‘‘Nothing’’ and inserting
‘‘(1) Except as provided in paragraph (2), noth-
ing’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) Nothing in any other provision of law enacted
on or after the date of the enactment of the Comprehen-
sive Access and Responsibility in Health Care Act of 1999
shall be construed to alter, amend, modify, invalidate, im-
pair, or supersede any provision of this title, except by
specific cross-reference to the affected section.’’.
(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
152
person serving as the sponsor of an association health plan
under part 8.’’.
(d) DISCLOSURE OF SOLVENCY PROTECTIONS RE-
LATED TO SELF-INSURED AND FULLY INSURED OPTIONS
UNDER ASSOCIATION HEALTH PLANS.—Section 102(b)
of such Act (29 U.S.C. 102(b)) is amended by adding at
the end the following: ‘‘An association health plan shall
include in its summary plan description, in connection
with each benefit option, a description of the form of sol-
vency or guarantee fund protection secured pursuant to
this Act or applicable State law, if any.’’.
(e) SAVINGS CLAUSE.—Section 731(c) of such Act is
amended by inserting ‘‘or part 8’’ after ‘‘this part’’.
(f) REPORT TO THE CONGRESS REGARDING CERTIFI-
CATION
OF
SELF-INSURED
ASSOCIATION
HEALTH
PLANS.—Not later than January 1, 2004, the Secretary
of Labor shall report to the Committee on Education and
the Workforce of the House of Representatives and the
Committee on Health, Education, Labor, and Pensions of
the Senate the effect association health plans have had,
if any, on reducing the number of uninsured individuals.
(g) 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 relat-
ing to section 734 the following new items:
153
‘‘PART 8—RULES GOVERNING ASSOCIATION HEALTH PLANS
‘‘Sec. 801. Association health plans.
‘‘Sec. 802. Certification of association health plans.
‘‘Sec. 803. Requirements relating to sponsors and boards of trustees.
‘‘Sec. 804. Participation and coverage requirements.
‘‘Sec. 805. Other requirements relating to plan documents, contribution rates,
and benefit options.
‘‘Sec. 806. Maintenance of reserves and provisions for solvency for plans pro-
viding health benefits in addition to health insurance coverage.
‘‘Sec. 807. Requirements for application and related requirements.
‘‘Sec. 808. Notice requirements for voluntary termination.
‘‘Sec. 809. Corrective actions and mandatory termination.
‘‘Sec. 810. Trusteeship by the Secretary of insolvent association health plans
providing health benefits in addition to health insurance cov-
erage.
‘‘Sec. 811. State assessment authority.
‘‘Sec. 812. Definitions and rules of construction.’’.
SEC. 132. CLARIFICATION OF TREATMENT OF SINGLE EM-
PLOYER ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(40)(B)) is
amended—
(1) in clause (i), by inserting ‘‘for any plan year
of any such plan, or any fiscal year of any such
other arrangement;’’ after ‘‘single employer’’, and by
inserting ‘‘during such year or at any time during
the preceding 1-year period’’ after ‘‘control group’’;
(2) in clause (iii)—
(A) by striking ‘‘common control shall not
be based on an interest of less than 25 percent’’
and inserting ‘‘an interest of greater than 25
percent may not be required as the minimum
interest necessary for common control’’; and
154
(B) by striking ‘‘similar to’’ and inserting
‘‘consistent and coextensive with’’;
(3) by redesignating clauses (iv) and (v) as
clauses (v) and (vi), respectively; and
(4) by inserting after clause (iii) the following
new clause:
‘‘(iv) in determining, after the application of
clause (i), whether benefits are provided to employ-
ees of two or more employers, the arrangement shall
be treated as having only one participating employer
if, after the application of clause (i), the number of
individuals who are employees and former employees
of any one participating employer and who are cov-
ered under the arrangement is greater than 75 per-
cent of the aggregate number of all individuals who
are employees or former employees of participating
employers and who are covered under the arrange-
ment;’’.
SEC. 133. CLARIFICATION OF TREATMENT OF CERTAIN
COLLECTIVELY 
BARGAINED 
ARRANGE-
MENTS.
(a) IN GENERAL.—Section 3(40)(A)(i) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1002(40)(A)(i)) is amended to read as follows:
155
‘‘(i)(I) under or pursuant to one or more collec-
tive bargaining agreements which are reached pursu-
ant to collective bargaining described in section 8(d)
of the National Labor Relations Act (29 U.S.C.
158(d)) or paragraph Fourth of section 2 of the
Railway Labor Act (45 U.S.C. 152, paragraph
Fourth) or which are reached pursuant to labor-
management negotiations under similar provisions of
State public employee relations laws, and (II) in ac-
cordance with subparagraphs (C), (D), and (E);’’.
(b) LIMITATIONS.—Section 3(40) of such Act (29
U.S.C. 1002(40)) is amended by adding at the end the
following new subparagraphs:
‘‘(C) For purposes of subparagraph (A)(i)(II), a plan
or other arrangement shall be treated as established or
maintained in accordance with this subparagraph only if
the following requirements are met:
‘‘(i) The plan or other arrangement, and the
employee organization or any other entity sponsoring
the plan or other arrangement, do not—
‘‘(I) utilize the services of any licensed in-
surance agent or broker for soliciting or enroll-
ing employers or individuals as participating
employers or covered individuals under the plan
or other arrangement; or
156
‘‘(II) pay any type of compensation to a
person, other than a full time employee of the
employee organization (or a member of the or-
ganization to the extent provided in regulations
prescribed by the Secretary through negotiated
rulemaking), that is related either to the volume
or number of employers or individuals solicited
or enrolled as participating employers or cov-
ered individuals under the plan or other ar-
rangement, or to the dollar amount or size of
the contributions made by participating employ-
ers or covered individuals to the plan or other
arrangement;
except to the extent that the services used by the
plan, arrangement, organization, or other entity con-
sist solely of preparation of documents necessary for
compliance with the reporting and disclosure re-
quirements of part 1 or administrative, investment,
or consulting services unrelated to solicitation or en-
rollment of covered individuals.
‘‘(ii) As of the end of the preceding plan year,
the number of covered individuals under the plan or
other arrangement who are neither—
‘‘(I) employed within a bargaining unit
covered by any of the collective bargaining
157
agreements with a participating employer (nor
covered on the basis of an individual’s employ-
ment in such a bargaining unit); nor
‘‘(II) present employees (or former employ-
ees who were covered while employed) of the
sponsoring employee organization, of an em-
ployer who is or was a party to any of the col-
lective bargaining agreements, or of the plan or
other arrangement or a related plan or arrange-
ment (nor covered on the basis of such present
or former employment);
does not exceed 15 percent of the total number of
individuals who are covered under the plan or ar-
rangement and who are present or former employees
who are or were covered under the plan or arrange-
ment pursuant to a collective bargaining agreement
with a participating employer. The requirements of
the preceding provisions of this clause shall be treat-
ed as satisfied if, as of the end of the preceding plan
year, such covered individuals are comprised solely
of individuals who were covered individuals under
the plan or other arrangement as of the date of the
enactment of the Comprehensive Access and Respon-
sibility in Health Care Act of 1999 and, as of the
end of the preceding plan year, the number of such
158
covered individuals does not exceed 25 percent of the
total number of present and former employees en-
rolled under the plan or other arrangement.
‘‘(iii) The employee organization or other entity
sponsoring the plan or other arrangement certifies
to the Secretary each year, in a form and manner
which shall be prescribed by the Secretary through
negotiated rulemaking that the plan or other ar-
rangement meets the requirements of clauses (i) and
(ii).
‘‘(D) For purposes of subparagraph (A)(i)(II), a plan
or arrangement shall be treated as established or main-
tained in accordance with this subparagraph only if—
‘‘(i) all of the benefits provided under the plan
or arrangement consist of health insurance coverage;
or
‘‘(ii)(I) the plan or arrangement is a multiem-
ployer plan; and
‘‘(II) the requirements of clause (B) of the pro-
viso to clause (5) of section 302(c) of the Labor
Management Relations Act, 1947 (29 U.S.C.
186(c)) are met with respect to such plan or other
arrangement.
159
‘‘(E) For purposes of subparagraph (A)(i)(II), a plan
or arrangement shall be treated as established or main-
tained in accordance with this subparagraph only if—
‘‘(i) the plan or arrangement is in effect as of
the date of the enactment of the Comprehensive Ac-
cess and Responsibility in Health Care Act of 1999;
or
‘‘(ii) the employee organization or other entity
sponsoring the plan or arrangement—
‘‘(I) has been in existence for at least 3
years; or
‘‘(II) demonstrates to the satisfaction of
the Secretary that the requirements of subpara-
graphs (C) and (D) are met with respect to the
plan or other arrangement.’’.
(c) CONFORMING AMENDMENTS TO DEFINITIONS OF
PARTICIPANT AND BENEFICIARY.—Section 3(7) of such
Act (29 U.S.C. 1002(7)) is amended by adding at the end
the following new sentence: ‘‘Such term includes an indi-
vidual who is a covered individual described in paragraph
(40)(C)(ii).’’.
SEC. 134. ENFORCEMENT PROVISIONS RELATING TO ASSO-
CIATION HEALTH PLANS.
(a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL
MISREPRESENTATIONS.—Section 501 of the Employee
160
Retirement Income Security Act of 1974 (29 U.S.C. 1131)
is amended—
(1) by inserting ‘‘(a)’’ after ‘‘SEC. 501.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) Any person who willfully falsely represents, to
any employee, any employee’s beneficiary, any employer,
the Secretary, or any State, a plan or other arrangement
established or maintained for the purpose of offering or
providing any benefit described in section 3(1) to employ-
ees or their beneficiaries as—
‘‘(1) being an association health plan which has
been certified under part 8;
‘‘(2) having been established or maintained
under or pursuant to one or more collective bar-
gaining agreements which are reached pursuant to
collective bargaining described in section 8(d) of the
National Labor Relations Act (29 U.S.C. 158(d)) or
paragraph Fourth of section 2 of the Railway Labor
Act (45 U.S.C. 152, paragraph Fourth) or which are
reached pursuant to labor-management negotiations
under similar provisions of State public employee re-
lations laws; or
161
‘‘(3) being a plan or arrangement with respect
to which the requirements of subparagraph (C), (D),
or (E) of section 3(40) are met;
shall, upon conviction, be imprisoned not more than 5
years, be fined under title 18, United States Code, or
both.’’.
(b) CEASE ACTIVITIES ORDERS.—Section 502 of
such Act (29 U.S.C. 1132) is amended by adding at the
end the following new subsection:
‘‘(n)(1) Subject to paragraph (2), upon application
by the Secretary showing the operation, promotion, or
marketing of an association health plan (or similar ar-
rangement providing benefits consisting of medical care
(as defined in section 733(a)(2))) that—
‘‘(A) is not certified under part 8, is subject
under section 514(b)(6) to the insurance laws of any
State in which the plan or arrangement offers or
provides benefits, and is not licensed, registered, or
otherwise approved under the insurance laws of such
State; or
‘‘(B) is an association health plan certified
under part 8 and is not operating in accordance with
the requirements under part 8 for such certification,
a district court of the United States shall enter an order
requiring that the plan or arrangement cease activities.
162
‘‘(2) Paragraph (1) shall not apply in the case of an
association health plan or other arrangement if the plan
or arrangement shows that—
‘‘(A) all benefits under it referred to in para-
graph (1) consist of health insurance coverage; and
‘‘(B) with respect to each State in which the
plan or arrangement offers or provides benefits, the
plan or arrangement is operating in accordance with
applicable State laws that are not superseded under
section 514.
‘‘(3) The court may grant such additional equitable
relief, including any relief available under this title, as it
deems necessary to protect the interests of the public and
of persons having claims for benefits against the plan.’’.
(c) RESPONSIBILITY
FOR CLAIMS PROCEDURE.—
Section 503 of such Act (29 U.S.C. 1133) (as amended
by title I) is amended by adding at the end the following
new subsection:
‘‘(c) ASSOCIATION HEALTH PLANS.—The terms of
each association health plan which is or has been certified
under part 8 shall require the board of trustees or the
named fiduciary (as applicable) to ensure that the require-
ments of this section are met in connection with claims
filed under the plan.’’.
163
SEC. 135. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
Section 506 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1136) is amended by adding
at the end the following new subsection:
‘‘(c) RESPONSIBILITY OF STATES WITH RESPECT TO
ASSOCIATION HEALTH PLANS.—
‘‘(1) AGREEMENTS
WITH
STATES.—A State
may enter into an agreement with the Secretary for
delegation to the State of some or all of—
‘‘(A) the Secretary’s authority under sec-
tions 502 and 504 to enforce the requirements
for certification under part 8;
‘‘(B) the Secretary’s authority to certify
association health plans under part 8 in accord-
ance with regulations of the Secretary applica-
ble to certification under part 8; or
‘‘(C) any combination of the Secretary’s
authority authorized to be delegated under sub-
paragraphs (A) and (B).
‘‘(2) DELEGATIONS.—Any department, agency,
or instrumentality of a State to which authority is
delegated pursuant to an agreement entered into
under this paragraph may, if authorized under State
law and to the extent consistent with such agree-
164
ment, exercise the powers of the Secretary under
this title which relate to such authority.
‘‘(3) RECOGNITION
OF
PRIMARY
DOMICILE
STATE.—In entering into any agreement with a
State under subparagraph (A), the Secretary shall
ensure that, as a result of such agreement and all
other agreements entered into under subparagraph
(A), only one State will be recognized, with respect
to any particular association health plan, as the
State to which all authority has been delegated pur-
suant to such agreements in connection with such
plan. In carrying out this paragraph, the Secretary
shall take into account the places of residence of the
participants and beneficiaries under the plan and the
State in which the trust is maintained.’’.
SEC. 136. EFFECTIVE DATE AND TRANSITIONAL AND
OTHER RULES.
(a) EFFECTIVE DATE.—The amendments made by
sections 131, 134, and 135 shall take effect on January
1, 2001. The amendments made by sections 132 and 133
shall take effect on 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 sub-
title before January 1, 2001. Such regulations shall be
issued through negotiated rulemaking.
165
(b) EXCEPTION.—Section 801(a)(2) of the Employee
Retirement Income Security Act of 1974 (added by section
131) does not apply in connection with an association
health plan (certified under part 8 of subtitle B of title
I of such Act) existing on the date of the enactment of
this Act, if no benefits provided thereunder as of the date
of the enactment of this Act consist of health insurance
coverage (as defined in section 733(b)(1) of such Act).
(c) 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 arrange-
ment is maintained in a State for the purpose of
providing benefits consisting of medical care for the
employees and beneficiaries of its participating em-
ployers, at least 200 participating employers make
contributions to such arrangement, such arrange-
ment 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 par-
ticipating employers, upon the filing with the appli-
cable authority (as defined in section 812(a)(5) of
the Employee Retirement Income Security Act of
1974 (as amended by this subtitle)) by the arrange-
ment of an application for certification of the ar-
166
rangement 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)(1)
and 803(a)(1) of the Employee Retirement In-
come 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 arrange-
ment is operated by a board of directors
which—
(i) is elected by the participating em-
ployers, 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 op-
167
erations 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.
(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘group health plan’’, ‘‘medical
care’’, and ‘‘participating employer’’ shall have the
meanings provided in section 812 of the Employee
Retirement Income Security Act of 1974, except
that the reference in paragraph (7) of such section
to an ‘‘association health plan’’ shall be deemed a
reference to an arrangement referred to in this sub-
section.
Subtitle E—Health Care Access, Af-
fordability, and Quality Com-
mission
SEC. 141. ESTABLISHMENT OF COMMISSION.
Part 5 of the Employee Retirement Income Security
Act of 1974 is amended by adding at the end the following
new section:
‘‘SEC. 518. HEALTH POLICY COMMISSION.
‘‘(a) ESTABLISHMENT.—There is hereby established
a commission to be known as the Health Care Access, Af-
168
fordability, and Quality Commission (hereinafter in this
Act referred to as the ‘‘Commission’’).
‘‘(b) DUTIES OF COMMISSION.—The duties of the
Commission shall be as follows:
‘‘(1) STUDIES OF CRITICAL AREAS.—Based on
information gathered by appropriate Federal agen-
cies, advisory groups, and other appropriate sources
for health care information, studies, and data, the
Commission shall study and report on in each of the
following areas:
‘‘(A) Independent expert external review
programs.
‘‘(B) Consumer friendly information pro-
grams.
‘‘(C) The extent to which the following af-
fect patient quality and satisfaction:
‘‘(i) health plan enrollees’ attitudes
based on surveys;
‘‘(ii) outcomes measurements; and
‘‘(iii) accreditation by private organi-
zations.
‘‘(D) Available systems to ensure the time-
ly processing of claims.
‘‘(2) ESTABLISHMENT
OF
FORM
FOR
REMIT-
TANCE OF CLAIMS TO PROVIDERS.—Not later than
169
2 years after the date of the first meeting of the
Commission, the Commission shall develop and
transmit to the Secretary a proposed form for use
by health insurance issuers (as defined in section
733(b)(2)) for the remittance of claims to health
care providers. Effective for plan years beginning
after 5 years after the date of the Comprehensive
Access and Responsibility in Health Care Act of
1999, a health insurance issuer offering health in-
surance coverage in connection with a group health
plan shall use such form for the remittance of all
claims to providers.
‘‘(3) EVALUATION OF HEALTH BENEFITS MAN-
DATES.—At the request of the chairmen or ranking
minority members of the appropriate committees of
Congress, the Commission shall evaluate, taking into
consideration the overall cost effect, availability of
treatment, and the effect on the health of the gen-
eral population, existing and proposed benefit re-
quirements for group health plans.
‘‘(4) COMMENTS ON CERTAIN SECRETARIAL RE-
PORTS.—If the Secretary submits to Congress (or a
committee of Congress) a report that is required by
law and that relates to policies under this section,
the Secretary shall transmit a copy of the report to
170
the Commission. The Commission shall review the
report and, not later than 6 months after the date
of submittal of the Secretary’s report to Congress,
shall submit to the appropriate committees of Con-
gress written comments on such report. Such com-
ments may include such recommendations as the
Commission deems appropriate.
‘‘(5) AGENDA AND ADDITIONAL REVIEW.—The
Commission shall consult periodically with the chair-
men and ranking minority members of the appro-
priate committees of Congress regarding the Com-
mission’s agenda and progress toward achieving the
agenda. The Commission may conduct additional re-
views, and submit additional reports to the appro-
priate committees of Congress, from time to time on
such topics as may be requested by such chairmen
and members and as the Commission deems appro-
priate.
‘‘(6) AVAILABILITY
OF
REPORTS.—The Com-
mission shall transmit to the Secretary a copy of
each report submitted under this subsection and
shall make such reports available to the public.
‘‘(c) MEMBERSHIP.—
171
‘‘(1) NUMBER AND APPOINTMENT.—The Com-
mission shall be composed of 11 members appointed
by the Comptroller General.
‘‘(2) QUALIFICATIONS.—
‘‘(A) IN
GENERAL.—The membership of
the Commission shall include—
‘‘(i) physicians and other health pro-
fessionals;
‘‘(ii) representatives of employers, in-
cluding multiemployer plans;
‘‘(ii) representatives of insured em-
ployees;
‘‘(iv) third-party payers; and
‘‘(v) health services and health eco-
nomics researchers with expertise in out-
comes and effectiveness research and tech-
nology assessment.
‘‘(B) ETHICAL DISCLOSURE.—The Comp-
troller General shall establish a system for pub-
lic disclosure by members of the Commission of
financial and other potential conflicts of interest
relating to such members.
‘‘(3) TERMS.—
‘‘(A) IN GENERAL.—Each member shall be
appointed for a term of 3 years, except that the
172
Comptroller shall designate staggered terms for
the members first appointed.
‘‘(B) VACANCIES.—Any member appointed
to fill a vacancy occurring before the expiration
of the term for which the member’s predecessor
was appointed shall be appointed only for the
remainder of that term. A member may serve
after the expiration of that member’s term until
a successor has taken office. A vacancy in the
Commission shall be filled in the manner in
which the original appointment was made.
‘‘(4) BASIC PAY.—
‘‘(A) RATES OF PAY.—Except as provided
in subparagraph (B), members shall each be
paid at a rate equal to the rate of basic pay
payable for level IV of the Executive Schedule
for each day (including travel time) during
which they are engaged in the actual perform-
ance of duties vested in the Commission.
‘‘(B) PROHIBITION OF COMPENSATION OF
FEDERAL EMPLOYEES.—Members of the Com-
mission who are full-time officers or employees
of the United States (or Members of Congress)
may not receive additional pay, allowances, or
173
benefits by reason of their service on the Com-
mission.
‘‘(5) TRAVEL EXPENSES.—Each member shall
receive travel expenses, including per diem in lieu of
subsistence, in accordance with sections 5702 and
5703 of title 5, United States Code.
‘‘(6) CHAIRPERSON.—The Chairperson of the
Commission shall be designated by the Comptroller
at the time of the appointment. The term of office
of the Chairperson shall be 3 years.
‘‘(7) MEETINGS.—The Commission shall meet 4
times each year.
‘‘(d) DIRECTOR AND STAFF OF COMMISSION.—
‘‘(1) DIRECTOR.—The Commission shall have a
Director who shall be appointed by the Chairperson.
The Director shall be paid at a rate not to exceed
the maximum rate of basic pay payable for GS–13
of the General Schedule.
‘‘(2) STAFF.—The Director may appoint 2 ad-
ditional staff members.
‘‘(3) APPLICABILITY OF CERTAIN CIVIL SERV-
ICE LAWS.—The Director and staff of the Commis-
sion shall be appointed subject to the provisions of
title 5, United States Code, governing appointments
in the competitive service, and shall be paid in ac-
174
cordance with the provisions of chapter 51 and sub-
chapter III of chapter 53 of that title relating to
classification and General Schedule pay rates.
‘‘(e) POWERS OF COMMISSION.—
‘‘(1) HEARINGS AND SESSIONS.—The Commis-
sion may, for the purpose of carrying out this Act,
hold hearings, sit and act at times and places, take
testimony, and receive evidence as the Commission
considers appropriate. The Commission may admin-
ister oaths or affirmations to witnesses appearing
before it.
‘‘(2) POWERS OF MEMBERS AND AGENTS.—Any
member or agent of the Commission may, if author-
ized by the Commission, take any action which the
Commission is authorized to take by this section.
‘‘(3) OBTAINING
OFFICIAL
DATA.—The Com-
mission may secure directly from any department or
agency of the United States information necessary
to enable it to carry out this Act. Upon request of
the Chairperson of the Commission, the head of that
department or agency shall furnish that information
to the Commission.
‘‘(4) MAILS.—The Commission may use the
United States mails in the same manner and under
175
the same conditions as other departments and agen-
cies of the United States.
‘‘(5) ADMINISTRATIVE
SUPPORT
SERVICES.—
Upon the request of the Commission, the Adminis-
trator of General Services shall provide to the Com-
mission, on a reimbursable basis, the administrative
support services necessary for the Commission to
carry out its responsibilities under this Act.
‘‘(6) CONTRACT AUTHORITY.—The Commission
may contract with and compensate government and
private agencies or persons for services, without re-
gard to section 3709 of the Revised Statutes (41
U.S.C. 5).
‘‘(f) REPORTS.—Beginning December 31, 2000, and
each year thereafter, the Commission shall submit to the
Congress an annual report detailing the following informa-
tion:
‘‘(1) Access to care, affordability to employers
and employees, and quality of care under employer-
sponsored health plans and recommendations for im-
proving such access, affordability, and quality.
‘‘(2) Any issues the Commission deems appro-
priate or any issues (such as the appropriateness
and availability of particular medical treatment) that
the chairmen or ranking members of the appropriate
176
committees of Congress requested the Commission
to evaluate.
‘‘(g) DEFINITION OF APPROPRIATE COMMITTEES OF
CONGRESS.—For purposes of this section the term ‘appro-
priate committees of Congress’ means any committee in
the Senate or House of Representatives having jurisdiction
over the Employee Retirement Income Security Act of
1974.
‘‘(h) TERMINATION.—Section 14(a)(2)(B) of the
Federal Advisory Committee Act (5 U.S.C. App.; relating
to the termination of advisory committees) shall not apply
to the Commission.
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated for fiscal years 2000
through 2004 such sums as may be necessary to carry
out this section.’’.
SEC. 142. EFFECTIVE DATE.
This subtitle shall be effective 6 months after the
date of the enactment of this Act.
177
TITLE II—AMENDMENTS TO THE
PUBLIC HEALTH SERVICE ACT
Subtitle 
A—Patient 
Protections
and Point of Service Coverage
Requirements
SEC. 201. PATIENT ACCESS TO UNRESTRICTED MEDICAL
ADVICE, EMERGENCY MEDICAL CARE, OB-
STETRIC AND GYNECOLOGICAL CARE, PEDI-
ATRIC CARE, AND CONTINUITY OF CARE.
(a) IN GENERAL.—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. PATIENT ACCESS TO UNRESTRICTED MEDICAL
ADVICE, EMERGENCY MEDICAL CARE, OB-
STETRIC AND GYNECOLOGICAL CARE, PEDI-
ATRIC CARE, AND CONTINUITY OF CARE.
‘‘(a) PATIENT ACCESS TO UNRESTRICTED MEDICAL
ADVICE.—
‘‘(1) IN GENERAL.—In the case of any health
care professional acting within the lawful scope of
practice in the course of carrying out a contractual
employment arrangement or other direct contractual
arrangement between such professional and a group
health plan or a health insurance issuer offering
health insurance coverage in connection with a group
178
health plan, the plan or issuer with which such con-
tractual employment arrangement or other direct
contractual arrangement is maintained by the pro-
fessional may not impose on such professional under
such arrangement any prohibition or restriction with
respect to advice, provided to a participant or bene-
ficiary under the plan who is a patient, about the
health status of the participant or beneficiary or the
medical care or treatment for the condition or dis-
ease of the participant or beneficiary, regardless of
whether benefits for such care or treatment are pro-
vided under the plan or health insurance coverage
offered in connection with the plan.
‘‘(2) HEALTH CARE PROFESSIONAL DEFINED.—
For purposes of this paragraph, the term ‘health
care professional’ means a physician (as defined in
section 1861(r) of the Social Security Act) or other
health care professional if coverage for the profes-
sional’s services is provided under the group health
plan for the services of the professional. Such term
includes a podiatrist, optometrist, chiropractor, psy-
chologist, dentist, physician assistant, physical or oc-
cupational therapist and therapy assistant, speech-
language pathologist, audiologist, registered or li-
censed practical nurse (including nurse practitioner,
179
clinical nurse specialist, certified registered nurse
anesthetist, and certified nurse-midwife), licensed
certified social worker, registered respiratory thera-
pist, and certified respiratory therapy technician.
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in
this subsection shall be construed to require the
sponsor of a group health plan or a health insurance
issuer offering health insurance coverage in connec-
tion with the group health plan to engage in any
practice that would violate its religious beliefs or
moral convictions.
‘‘(b) PATIENT ACCESS
TO EMERGENCY MEDICAL
CARE.—
‘‘(1) COVERAGE OF EMERGENCY SERVICES.—
‘‘(A) IN
GENERAL.—If a group health
plan, or health insurance coverage offered by a
health insurance issuer, provides any benefits
with respect to emergency services (as defined
in subparagraph (B)(ii)), or ambulance services,
the plan or issuer shall cover emergency serv-
ices (including emergency ambulance services as
defined in subparagraph (B)(iii)) furnished
under the plan or coverage—
‘‘(i) without the need for any prior
authorization determination;
180
‘‘(ii) whether or not the health care
provider furnishing such services is a par-
ticipating provider with respect to such
services;
‘‘(iii) in a manner so that, if such
services are provided to a participant, ben-
eficiary, or enrollee by a nonparticipating
health care provider, the participant, bene-
ficiary, or enrollee is not liable for amounts
that exceed the amounts of liability that
would be incurred if the services were pro-
vided by a participating provider; and
‘‘(iv) without regard to any other term
or condition of such plan or coverage
(other than exclusion or coordination of
benefits, or an affiliation or waiting period,
permitted under section 2701 and other
than applicable cost sharing).
‘‘(B) DEFINITIONS.—In this subsection:
‘‘(i) EMERGENCY
MEDICAL
CONDI-
TION.—The term ‘emergency medical con-
dition’ means—
‘‘(I) a medical condition mani-
festing itself by acute symptoms of
sufficient severity (including severe
181
pain) such that a prudent layperson,
who possesses an average knowledge
of health and medicine, could reason-
ably expect the absence of immediate
medical attention to result in a condi-
tion described in clause (i), (ii), or
(iii) of section 1867(e)(1)(A) of the
Social 
Security 
Act 
(42 
U.S.C.
1395dd(e)(1)(A)); and
‘‘(II) a medical condition mani-
festing itself in a neonate by acute
symptoms of sufficient severity (in-
cluding severe pain) such that a pru-
dent health care professional could
reasonably expect the absence of im-
mediate medical attention to result in
a condition described in clause (i),
(ii), or (iii) of section 1867(e)(1)(A)
of the Social Security Act.
‘‘(ii) 
EMERGENCY
SERVICES.—The
term ‘emergency services’ means—
‘‘(I) with respect to an emer-
gency medical condition described in
clause (i)(I), a medical screening ex-
amination (as required under section
182
1867 of the Social Security Act, 42
U.S.C. 1395dd)) that is within the ca-
pability of the emergency department
of a hospital, including ancillary serv-
ices routinely available to the emer-
gency department to evaluate an
emergency medical condition (as de-
fined in clause (i)) and also, within
the capabilities of the staff and facili-
ties at the hospital, such further med-
ical examination and treatment as are
required under section 1867 of such
Act to stabilize the patient; or
‘‘(II) with respect to an emer-
gency medical condition described in
clause (i)(II), medical treatment for
such condition rendered by a health
care provider in a hospital to a
neonate, including available hospital
ancillary services in response to an ur-
gent request of a health care profes-
sional and to the extent necessary to
stabilize the neonate.
‘‘(iii) EMERGENCY AMBULANCE SERV-
ICES.—The term ‘emergency ambulance
183
services’ means ambulance services (as de-
fined for purposes of section 1861(s)(7) of
the Social Security Act) furnished to trans-
port an individual who has an emergency
medical condition (as defined in clause (i))
to a hospital for the receipt of emergency
services (as defined in clause (ii)) in a case
in which appropriate emergency medical
screening examinations are covered under
the plan or coverage pursuant to para-
graph (1)(A) and a prudent layperson,
with an average knowledge of health and
medicine, could reasonably expect that the
absence of such transport would result in
placing the health of the individual in seri-
ous jeopardy, serious impairment of bodily
function, or serious dysfunction of any
bodily organ or part.
‘‘(iv) STABILIZE.—The term ‘to sta-
bilize’ means, with respect to an emergency
medical condition, to provide such medical
treatment of the condition as may be nec-
essary to assure, within reasonable medical
probability, that no material deterioration
of the condition is likely to result from or
184
occur during the transfer of the individual
from a facility.
‘‘(v) NONPARTICIPATING.—The term
‘nonparticipating’ means, with respect to a
health care provider that provides health
care items and services to a participant or
beneficiary under group health plan or
under group health insurance coverage, a
health care provider that is not a partici-
pating health care provider with respect to
such items and services.
‘‘(vi) 
PARTICIPATING.—The 
term
‘participating’ means, with respect to a
health care provider that provides health
care items and services to a participant or
beneficiary under group health plan or
health insurance coverage offered by a
health insurance issuer in connection with
such a plan, a health care provider that
furnishes such items and services under a
contract or other arrangement with the
plan or issuer.
‘‘(c) PATIENT RIGHT TO OBSTETRIC AND GYNECO-
LOGICAL CARE.—
185
‘‘(1) IN
GENERAL.—In any case in which a
group health plan (or a health insurance issuer of-
fering health insurance coverage in connection with
the plan)—
‘‘(A) provides benefits under the terms of
the plan consisting of—
‘‘(i) gynecological care (such as pre-
ventive women’s health examinations); or
‘‘(ii) obstetric care (such as preg-
nancy-related services),
provided by a participating health care profes-
sional who specializes in such care (or provides
benefits consisting of payment for such care);
and
‘‘(B) requires or provides for designation
by a participant or beneficiary of a partici-
pating primary care provider,
if the primary care provider designated by such a
participant or beneficiary is not such a health care
professional, then the plan (or issuer) shall meet the
requirements of paragraph (2).
‘‘(2) REQUIREMENTS.—A group health plan (or
a health insurance issuer offering health insurance
coverage in connection with the plan) meets the re-
quirements of this paragraph, in connection with
186
benefits described in paragraph (1) consisting of
care described in clause (i) or (ii) of paragraph
(1)(A) (or consisting of payment therefor), if the
plan (or issuer)—
‘‘(A) does not require authorization or a
referral by the primary care provider in order
to obtain such benefits; and
‘‘(B) treats the ordering of other care of
the same type, by the participating health care
professional providing the care described in
clause (i) or (ii) of paragraph (1)(A), as the au-
thorization of the primary care provider with
respect to such care.
‘‘(3) HEALTH CARE PROFESSIONAL DEFINED.—
For purposes of this subsection, the term ‘health
care professional’ means an individual (including,
but not limited to, a nurse midwife or nurse practi-
tioner) who is licensed, accredited, or certified under
State law to provide obstetric and gynecological
health care services and who is operating within the
scope of such licensure, accreditation, or certifi-
cation.
‘‘(4) CONSTRUCTION.—Nothing in paragraph
(1) shall be construed as preventing a plan from of-
fering (but not requiring a participant or beneficiary
187
to accept) a health care professional trained,
credentialed, and operating within the scope of their
licensure to perform obstetric and gynecological
health care services. Nothing in paragraph (2)(B)
shall waive any requirements of coverage relating to
medical necessity or appropriateness with respect to
coverage of gynecological or obstetric care so or-
dered.
‘‘(5) TREATMENT OF MULTIPLE COVERAGE OP-
TIONS.—In the case of a plan providing benefits
under two or more coverage options, the require-
ments of this subsection shall apply separately with
respect to each coverage option.
‘‘(d) PATIENT RIGHT TO PEDIATRIC CARE.—
‘‘(1) IN
GENERAL.—In any case in which a
group health plan (or a health insurance issuer of-
fering health insurance coverage in connection with
the plan) provides benefits consisting of routine pe-
diatric care provided by a participating health care
professional who specializes in pediatrics (or con-
sisting of payment for such care) and the plan re-
quires or provides for designation by a participant or
beneficiary of a participating primary care provider,
the plan (or issuer) shall provide that such a partici-
pating health care professional may be designated, if
188
available, by a parent or guardian of any beneficiary
under the plan who is under 18 years of age, as
the primary care provider with respect to any such
benefits.
‘‘(2) HEALTH CARE PROFESSIONAL DEFINED.—
For purposes of this subsection, the term ‘health
care professional’ means an individual who is li-
censed, accredited, or certified under State law to
provide pediatric health care services and who is op-
erating within the scope of such licensure, accredita-
tion, or certification.
‘‘(3) CONSTRUCTION.—Nothing in paragraph
(1) shall be construed as preventing a plan from of-
fering (but not requiring a participant or beneficiary
to accept) a health care professional trained,
credentialed, and operating within the scope of their
licensure to perform pediatric health care services.
Nothing in paragraph (1) shall waive any require-
ments of coverage relating to medical necessity or
appropriateness with respect to coverage of pediatric
care so ordered.
‘‘(4) TREATMENT OF MULTIPLE COVERAGE OP-
TIONS.—In the case of a plan providing benefits
under two or more coverage options, the require-
189
ments of this subsection shall apply separately with
respect to each coverage option.
‘‘(e) CONTINUITY OF CARE.—
‘‘(1) IN GENERAL.—
‘‘(A) TERMINATION
OF
PROVIDER.—If a
contract between a group health plan, or a
health insurance issuer offering health insur-
ance coverage in connection with a group health
plan, and a health care provider is terminated
(as defined in subparagraph (D)(ii)), or benefits
or coverage provided by a health care provider
are terminated because of a change in the
terms of provider participation in a group
health plan, and an individual who, at the time
of such termination, is a participant or bene-
ficiary in the plan and is scheduled to undergo
surgery (including an organ transplantation), is
undergoing treatment for pregnancy, or is de-
termined to be terminally ill (as defined in sec-
tion 1861(dd)(3)(A) of the Social Security Act)
and is undergoing treatment for the terminal
illness, the plan or issuer shall—
‘‘(i) notify the individual on a timely
basis of such termination and of the right
to elect continuation of coverage of treat-
190
ment by the provider under this sub-
section; and
‘‘(ii) subject to paragraph (3), permit
the individual to elect to continue to be
covered with respect to treatment by the
provider for such surgery, pregnancy, or
illness during a transitional period (pro-
vided under paragraph (2)).
‘‘(B) TREATMENT
OF
TERMINATION
OF
CONTRACT
WITH
HEALTH
INSURANCE
ISSUER.—If a contract for the provision of
health insurance coverage between a group
health plan and a health insurance issuer is ter-
minated and, as a result of such termination,
coverage of services of a health care provider is
terminated with respect to an individual, the
provisions of subparagraph (A) (and the suc-
ceeding provisions of this subsection) shall
apply under the plan in the same manner as if
there had been a contract between the plan and
the provider that had been terminated, but only
with respect to benefits that are covered under
the plan after the contract termination.
‘‘(C) TERMINATION
DEFINED.—For pur-
poses of this subsection, the term ‘terminated’
191
includes, with respect to a contract, the expira-
tion or nonrenewal of the contract, but does not
include a termination of the contract by the
plan or issuer for failure to meet applicable
quality standards or for fraud.
‘‘(2) TRANSITIONAL PERIOD.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (B) through (D), the transi-
tional period under this paragraph shall extend
up to 90 days (as determined by the treating
health care professional) after the date of the
notice described in paragraph (1)(A)(i) of the
provider’s termination.
‘‘(B) SCHEDULED
SURGERY.—If surgery
was scheduled for an individual before the date
of the announcement of the termination of the
provider status under paragraph (1)(A)(i), the
transitional period under this paragraph with
respect to the surgery shall extend beyond the
period under subparagraph (A) and until the
date of discharge of the individual after comple-
tion of the surgery.
‘‘(C) PREGNANCY.—If—
‘‘(i) a participant or beneficiary was
determined to be pregnant at the time of
192
a provider’s termination of participation,
and
‘‘(ii) the provider was treating the
pregnancy before date of the termination,
the transitional period under this paragraph
with respect to provider’s treatment of the
pregnancy shall extend through the provision of
post-partum care directly related to the deliv-
ery.
‘‘(D) TERMINAL ILLNESS.—If—
‘‘(i) a participant or beneficiary was
determined to be terminally ill (as deter-
mined under section 1861(dd)(3)(A) of the
Social Security Act) at the time of a pro-
vider’s termination of participation, and
‘‘(ii) the provider was treating the ter-
minal illness before the date of termi-
nation,
the transitional period under this paragraph
shall extend for the remainder of the individ-
ual’s life for care directly related to the treat-
ment of the terminal illness or its medical
manifestations.
‘‘(3) PERMISSIBLE TERMS AND CONDITIONS.—
A group health plan or health insurance issuer may
193
condition coverage of continued treatment by a pro-
vider under paragraph (1)(A)(i) upon the individual
notifying the plan of the election of continued cov-
erage and upon the provider agreeing to the fol-
lowing terms and conditions:
‘‘(A) The provider agrees to accept reim-
bursement from the plan or issuer and indi-
vidual involved (with respect to cost-sharing) at
the rates applicable prior to the start of the
transitional period as payment in full (or, in the
case described in paragraph (1)(B), at the rates
applicable under the replacement plan or issuer
after the date of the termination of the contract
with the health insurance issuer) and not to im-
pose cost-sharing with respect to the individual
in an amount that would exceed the cost-shar-
ing that could have been imposed if the contract
referred to in paragraph (1)(A) had not been
terminated.
‘‘(B) The provider agrees to adhere to the
quality assurance standards of the plan or
issuer responsible for payment under subpara-
graph (A) and to provide to such plan or issuer
necessary medical information related to the
care provided.
194
‘‘(C) The provider agrees otherwise to ad-
here to such plan’s or issuer’s policies and pro-
cedures, including procedures regarding refer-
rals and obtaining prior authorization and pro-
viding services pursuant to a treatment plan (if
any) approved by the plan or issuer.
‘‘(D) The provider agrees to provide tran-
sitional care to all participants and beneficiaries
who are eligible for and elect to have coverage
of such care from such provider.
‘‘(E) If the provider initiates the termi-
nation, the provider has notified the plan within
30 days prior to the effective date of the termi-
nation of—
‘‘(i) whether the provider agrees to
permissible terms and conditions (as set
forth in this paragraph) required by the
plan, and
‘‘(ii) if the provider agrees to the
terms and conditions, the specific plan
beneficiaries and participants undergoing a
course of treatment from the provider who
the provider believes, at the time of the no-
tification, would be eligible for transitional
care under this subsection.
195
‘‘(4) CONSTRUCTION.—Nothing in this sub-
section shall be construed to—
‘‘(A) require the coverage of benefits which
would not have been covered if the provider in-
volved remained a participating provider, or
‘‘(B) prohibit a group health plan from
conditioning a provider’s participation on the
provider’s agreement to provide transitional
care to all participants and beneficiaries eligible
to obtain coverage of such care furnished by the
provider as set forth under this subsection.
‘‘(f) COVERAGE FOR INDIVIDUALS PARTICIPATING IN
APPROVED CANCER CLINICAL TRIALS.—
‘‘(1) COVERAGE.—
‘‘(A) IN GENERAL.—If a group health plan
(or a health insurance issuer offering health in-
surance coverage) provides coverage to a quali-
fied individual (as defined in paragraph (2)),
the plan or issuer—
‘‘(i) may not deny the individual par-
ticipation in the clinical trial referred to in
paragraph (2)(B);
‘‘(ii) subject to paragraphs (2), (3),
and (4), may not deny (or limit or impose
additional conditions on) the coverage of
196
routine patient costs for items and services
furnished in connection with participation
in the trial; and
‘‘(iii) may not discriminate against the
individual on the basis of the participation
of the participant or beneficiary in such
trial.
‘‘(B) EXCLUSION
OF
CERTAIN
COSTS.—
For purposes of subparagraph (A)(ii), routine
patient costs do not include the cost of the tests
or measurements conducted primarily for the
purpose of the clinical trial involved.
‘‘(C) USE OF IN-NETWORK PROVIDERS.—If
one or more participating providers is partici-
pating in a clinical trial, nothing in subpara-
graph (A) shall be construed as preventing a
plan from requiring that a qualified individual
participate in the trial through such a partici-
pating provider if the provider will accept the
individual as a participant in the trial.
‘‘(2) QUALIFIED
INDIVIDUAL
DEFINED.—For
purposes of paragraph (1), the term ‘qualified indi-
vidual’ means an individual who is a participant or
beneficiary in a group health plan and who meets
the following conditions:
197
‘‘(A)(i) The individual has been diagnosed
with cancer.
‘‘(ii) The individual is eligible to partici-
pate in an approved clinical trial according to
the trial protocol with respect to treatment of
cancer.
‘‘(iii) The individual’s participation in the
trial offers meaningful potential for significant
clinical benefit for the individual.
‘‘(B) Either—
‘‘(i) the referring physician is a par-
ticipating health care professional and has
concluded that the individual’s participa-
tion in such trial would be appropriate
based upon satisfaction by the individual of
the conditions described in subparagraph
(A); or
‘‘(ii) the individual provides medical
and scientific information establishing that
the individual’s participation in such trial
would be appropriate based upon the satis-
faction by the individual of the conditions
described in subparagraph (A).
‘‘(3) PAYMENT.—
198
‘‘(A) IN GENERAL.—A group health plan
(or a health insurance issuer offering health in-
surance coverage) shall provide for payment for
routine patient costs described in paragraph
(1)(B) but is not required to pay for costs of
items and services that are reasonably expected
to be paid for by the sponsors of an approved
clinical trial.
‘‘(B) ROUTINE PATIENT CARE COSTS.—
‘‘(i) IN
GENERAL.—For purposes of
this paragraph, the term ‘routine patient
care costs’ shall include the costs associ-
ated with the provision of items and serv-
ices that—
‘‘(I) would otherwise be covered
under the group health plan if such
items and services were not provided
in connection with an approved clin-
ical trial program; and
‘‘(II) are furnished according to
the protocol of an approved clinical
trial program.
‘‘(ii) EXCLUSION.—For purposes of
this paragraph, ‘routine patient care costs’
199
shall not include the costs associated with
the provision of—
‘‘(I) an investigational drug or
device, unless the Secretary has au-
thorized the manufacturer of such
drug or device to charge for such drug
or device; or
‘‘(II) any item or service supplied
without charge by the sponsor of the
approved clinical trial program.
‘‘(C) PAYMENT
RATE.—For purposes of
this subsection—
‘‘(i) PARTICIPATING
PROVIDERS.—In
the case of covered items and services pro-
vided by a participating provider, the pay-
ment rate shall be at the agreed upon rate.
‘‘(ii) 
NONPARTICIPATING
PRO-
VIDERS.—In the case of covered items and
services provided by a nonparticipating
provider, the payment rate shall be at the
rate the plan would normally pay for com-
parable items or services under clause (i).
‘‘(4) APPROVED CLINICAL TRIAL DEFINED.—
‘‘(A) IN GENERAL.—For purposes of this
subsection, the term ‘approved clinical trial’
200
means a cancer clinical research study or can-
cer clinical investigation approved by an Institu-
tional Review Board.
‘‘(B) CONDITIONS
FOR
DEPARTMENTS.—
The conditions described in this paragraph, for
a study or investigation conducted by a Depart-
ment, are that the study or investigation has
been reviewed and approved through a system
of peer review that the Secretary determines—
‘‘(i) to be comparable to the system of
peer review of studies and investigations
used by the National Institutes of Health,
and
‘‘(ii) assures unbiased review of the
highest scientific standards by qualified in-
dividuals who have no interest in the out-
come of the review.
‘‘(5) CONSTRUCTION.—Nothing in this sub-
section shall be construed to limit a plan’s coverage
with respect to clinical trials.
‘‘(6) PLAN
SATISFACTION
OF
CERTAIN
RE-
QUIREMENTS; RESPONSIBILITIES OF FIDUCIARIES.—
‘‘(A) IN GENERAL.—For purposes of this
subsection, insofar as a group health plan pro-
vides benefits in the form of health insurance
201
coverage through a health insurance issuer, the
plan shall be treated as meeting the require-
ments of this subsection with respect to such
benefits and not be considered as failing to
meet such requirements because of a failure of
the issuer to meet such requirements so long as
the plan sponsor or its representatives did not
cause such failure by the issuer.
‘‘(B) CONSTRUCTION.—Nothing in this
subsection shall be construed to affect or mod-
ify the responsibilities of the fiduciaries of a
group health plan under part 4 of subtitle B of
title I of the Employee Retirement Income Se-
curity Act of 1974.
‘‘(7) STUDY AND REPORT.—
‘‘(A) STUDY.—The Secretary shall analyze
cancer clinical research and its cost implications
for managed care, including differentiation in—
‘‘(i) the cost of patient care in trials
versus standard care;
‘‘(ii) the cost effectiveness achieved in
different sites of service;
‘‘(iii) research outcomes;
‘‘(iv) volume of research subjects
available in different sites of service;
202
‘‘(v) access to research sites and clin-
ical trials by cancer patients;
‘‘(vi) patient cost sharing or copay-
ment costs realized in different sites of
service;
‘‘(vii) health outcomes experienced in
different sites of service;
‘‘(viii) long term health care services
and costs experienced in different sites of
service;
‘‘(ix) morbidity and mortality experi-
enced in different sites of service; and
‘‘(x) patient satisfaction and pref-
erence of sites of service.
‘‘(B) REPORT
TO
CONGRESS.—Not later
than January 1, 2005, the Secretary shall sub-
mit a report to Congress that contains—
‘‘(i) an assessment of any incremental
cost to group health plans resulting from
the provisions of this section;
‘‘(ii) a projection of expenditures to
such plans resulting from this section;
‘‘(iii) an assessment of any impact on
premiums resulting from this section; and
203
‘‘(iv) recommendations regarding ac-
tion on other diseases.’’.
SEC. 202. REQUIRING HEALTH MAINTENANCE ORGANIZA-
TIONS TO OFFER OPTION OF POINT-OF-SERV-
ICE COVERAGE.
Title XXVII of the Public Health Service Act is
amended by inserting after section 2713 the following new
section:
‘‘SEC. 2714. REQUIRING OFFERING OF OPTION OF POINT-
OF-SERVICE COVERAGE.
‘‘(a) REQUIREMENT TO OFFER COVERAGE OPTION
TO CERTAIN EMPLOYERS.—Except as provided in sub-
section (c), any health insurance issuer which—
‘‘(1) is a health maintenance organization (as
defined in section 2791(b)(3)); and
‘‘(2) which provides for coverage of services of
one or more classes of health care professionals
under health insurance coverage offered in connec-
tion with a group health plan only if such services
are furnished exclusively through health care profes-
sionals within such class or classes who are members
of a closed panel of health care professionals,
the issuer shall make available to the plan sponsor in con-
nection with such a plan a coverage option which provides
for coverage of such services which are furnished through
204
such class (or classes) of health care professionals regard-
less of whether or not the professionals are members of
such panel.
‘‘(b) REQUIREMENT TO OFFER SUPPLEMENTAL COV-
ERAGE TO PARTICIPANTS IN CERTAIN CASES.—Except as
provided in subsection (c), if a health insurance issuer
makes available a coverage option under and described in
subsection (a) to a plan sponsor of a group health plan
and the sponsor declines to contract for such coverage op-
tion, then the issuer shall make available in the individual
insurance market to each participant in the group health
plan optional separate supplemental health insurance cov-
erage in the individual health insurance market which con-
sists of services identical to those provided under such cov-
erage provided through the closed panel under the group
health plan but are furnished exclusively by health care
professionals who are not members of such a closed panel.
‘‘(c) EXCEPTIONS.—
‘‘(1) OFFERING OF NON-PANEL OPTION.—Sub-
sections (a) and (b) shall not apply with respect to
a group health plan if the plan offers a coverage op-
tion that provides coverage for services that may be
furnished by a class or classes of health care profes-
sionals who are not in a closed panel. This para-
205
graph shall be applied separately to distinguishable
groups of employees under the plan.
‘‘(2) AVAILABILITY
OF
COVERAGE
THROUGH
HEALTHMART.—Subsections (a) and (b) shall not
apply to a group health plan if the health insurance
coverage under the plan is made available through a
HealthMart (as defined in section 2801) and if any
health insurance coverage made available through
the HealthMart provides for coverage of the services
of any class of health care professionals other than
through a closed panel of professionals.
‘‘(3) RELICENSURE
EXEMPTION.—Subsections
(a) and (b) shall not apply to a health maintenance
organization in a State in any case in which—
‘‘(A) the organization demonstrates to the
applicable authority that the organization has
made a good faith effort to obtain (but has
failed to obtain) a contract between the organi-
zation and any other health insurance issuer
providing for the coverage option or supple-
mental coverage described in subsection (a) or
(b), as the case may be, within the applicable
service area of the organization; and
‘‘(B) the State requires the organization to
receive or qualify for a separate license, as an
206
indemnity insurer or otherwise, in order to offer
such coverage option or supplemental coverage,
respectively.
The applicable authority may require that the orga-
nization demonstrate that it meets the requirements
of the previous sentence no more frequently than
once every 2 years.
‘‘(4) INCREASED COSTS.—Subsections (a) and
(b) shall not apply to a health maintenance organi-
zation if the organization demonstrates to the appli-
cable authority, in accordance with generally accept-
ed actuarial practice, that, on either a prospective or
retroactive basis, the premium for the coverage op-
tion or supplemental coverage required to be made
available under such respective subsection exceeds by
more than 1 percent the premium for the coverage
consisting of services which are furnished through a
closed panel of health care professionals in the class
or classes involved. The applicable authority may re-
quire that the organization demonstrate such an in-
crease no more frequently than once every 2 years.
This paragraph shall be applied on an average per
enrollee or similar basis.
‘‘(5) COLLECTIVE BARGAINING AGREEMENTS.—
Subsections (a) and (b) shall not apply in connection
207
with a group health plan if the plan is established
or maintained pursuant to one or more collective
bargaining agreements.
‘‘(6) SMALL ISSUERS.—Subsections (a) and (b)
shall not apply in the case of a health insurance
issuer with 25,000 or fewer covered lives.
‘‘(d) DEFINITIONS.—For purposes of this section:
‘‘(1) COVERAGE
THROUGH
CLOSED
PANEL.—
Health insurance coverage for a class of health care
professionals shall be treated as provided through a
closed panel of such professionals only if such cov-
erage consists of coverage of items or services con-
sisting of professionals services which are reim-
bursed for or provided only within a limited network
of such professionals.
‘‘(2) HEALTH CARE PROFESSIONAL.—The term
‘health care professional’ has the meaning given
such term in section 2707(a)(2).’’.
SEC. 203. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL.—The amendments made by this
title shall apply with respect to plan years beginning on
or after January 1 of the second calendar year following
the date of the enactment of this Act, except that the Sec-
retary of Health and Human Services may issue regula-
tions before such date under such amendments. The Sec-
208
retary shall first issue regulations necessary to carry out
the amendments made by this title before the effective
date thereof.
(b) LIMITATION ON ENFORCEMENT ACTIONS.—No
enforcement action shall be taken, pursuant to the amend-
ments made by this title, against a group health plan or
health insurance issuer with respect to a violation of a re-
quirement imposed by such amendments before the date
of issuance of regulations issued in connection with such
requirement, if the plan or issuer has sought to comply
in good faith with such requirement.
(c) SPECIAL RULE FOR COLLECTIVE BARGAINING
AGREEMENTS.—In the case of a group health plan main-
tained pursuant to one or more collective bargaining
agreements between employee representatives and one or
more employers ratified before the date of the enactment
of this Act, the amendments made by this title shall not
apply with respect to plan years beginning before the later
of—
(1) the date on which the last of the collective
bargaining agreements relating to the plan termi-
nates (determined without regard to any extension
thereof agreed to after the date of the enactment of
this Act); or
(2) January 1, 2002.
209
For purposes of this subsection, any plan amendment
made pursuant to a collective bargaining agreement relat-
ing to the plan which amends the plan solely to conform
to any requirement added by this title shall not be treated
as a termination of such collective bargaining agreement.
Subtitle B—Patient Access to
Information
SEC. 111. PATIENT ACCESS TO INFORMATION REGARDING
PLAN COVERAGE, MANAGED CARE PROCE-
DURES, 
HEALTH 
CARE 
PROVIDERS, 
AND
QUALITY OF MEDICAL CARE.
(a) IN GENERAL.—Subpart 2 of part A of title
XXVII of the Public Health Service Act (as amended by
subtitle A) is amended further by adding at the end the
following new section:
‘‘SEC. 2708. DISCLOSURE BY GROUP HEALTH PLANS.
‘‘(a) DISCLOSURE REQUIREMENT.—Each health in-
surance issuer offering health insurance coverage in con-
nection with a group health plan shall provide the plan
administrator on a timely basis with the information nec-
essary to enable the administrator to provide participants
and beneficiaries with information in a manner and to an
extent consistent with the requirements of section 111 of
the Employee Retirement Income Security Act of 1974.
To the extent that any such issuer provides such informa-
210
tion on a timely basis to plan participants and bene-
ficiaries, the requirements of this subsection shall be
deemed satisfied in the case of such plan with respect to
such information.
‘‘(b) PLAN BENEFITS.—The information required
under subsection (a) includes the following:
‘‘(1) COVERED ITEMS AND SERVICES.—
‘‘(A) CATEGORIZATION OF INCLUDED BEN-
EFITS.—A description of covered benefits, cat-
egorized by—
‘‘(i) types of items and services (in-
cluding any special disease management
program); and
‘‘(ii) types of health care professionals
providing such items and services.
‘‘(B) EMERGENCY MEDICAL CARE.—A de-
scription of the extent to which the plan covers
emergency medical care (including the extent to
which the plan provides for access to urgent
care centers), and any definitions provided
under the plan for the relevant plan termi-
nology referring to such care.
‘‘(C) PREVENTATIVE
SERVICES.—A de-
scription of the extent to which the plan pro-
vides benefits for preventative services.
211
‘‘(D) DRUG FORMULARIES.—A description
of the extent to which covered benefits are de-
termined by the use or application of a drug
formulary and a summary of the process for de-
termining what is included in such formulary.
‘‘(E) 
COBRA 
CONTINUATION
COV-
ERAGE.—A description of the benefits available
under the plan pursuant to part 6.
‘‘(2) LIMITATIONS, EXCLUSIONS, AND RESTRIC-
TIONS ON COVERED BENEFITS.—
‘‘(A) 
CATEGORIZATION
OF
EXCLUDED
BENEFITS.—A description of benefits specifi-
cally excluded from coverage, categorized by
types of items and services.
‘‘(B) 
UTILIZATION
REVIEW
AND
PREAUTHORIZATION REQUIREMENTS.—Whether
coverage for medical care is limited or excluded
on 
the 
basis 
of 
utilization 
review 
or
preauthorization requirements.
‘‘(C) LIFETIME, ANNUAL, OR OTHER PE-
RIOD LIMITATIONS.—A description of the cir-
cumstances under which, and the extent to
which, coverage is subject to lifetime, annual, or
other period limitations, categorized by types of
benefits.
212
‘‘(D) CUSTODIAL CARE.—A description of
the circumstances under which, and the extent
to which, the coverage of benefits for custodial
care is limited or excluded, and a statement of
the definition used by the plan for custodial
care.
‘‘(E) 
EXPERIMENTAL
TREATMENTS.—
Whether coverage for any medical care is lim-
ited or excluded because it constitutes an inves-
tigational item or experimental treatment or
technology, and any definitions provided under
the plan for the relevant plan terminology refer-
ring to such limited or excluded care.
‘‘(F) MEDICAL APPROPRIATENESS OR NE-
CESSITY.—Whether coverage for medical care
may be limited or excluded by reason of a fail-
ure to meet the plan’s requirements for medical
appropriateness or necessity, and any defini-
tions provided under the plan for the relevant
plan terminology referring to such limited or
excluded care.
‘‘(G) SECOND
OR
SUBSEQUENT
OPIN-
IONS.—A description of the circumstances
under which, and the extent to which, coverage
213
for second or subsequent opinions is limited or
excluded.
‘‘(H) SPECIALTY CARE.—A description of
the circumstances under which, and the extent
to which, coverage of benefits for specialty care
is conditioned on referral from a primary care
provider.
‘‘(I) CONTINUITY OF CARE.—A description
of the circumstances under which, and the ex-
tent to which, coverage of items and services
provided by any health care professional is lim-
ited or excluded by reason of the departure by
the professional from any defined set of pro-
viders.
‘‘(J) RESTRICTIONS
ON
COVERAGE
OF
EMERGENCY
SERVICES.—A description of the
circumstances under which, and the extent to
which, the plan, in covering emergency medical
care furnished to a participant or beneficiary of
the plan imposes any financial responsibility de-
scribed in subsection (c) on participants or
beneficiaries or limits or conditions benefits for
such care subject to any other term or condition
of such plan.
214
‘‘(3) NETWORK CHARACTERISTICS.—If the plan
(or issuer) utilizes a defined set of providers under
contract with the plan (or issuer), a detailed list of
the names of such providers and their geographic lo-
cation, set forth separately with respect to primary
care providers and with respect to specialists.
‘‘(c) 
PARTICIPANT’S
FINANCIAL
RESPONSIBIL-
ITIES.—The information required under subsection (a) in-
cludes an explanation of—
‘‘(1) a participant’s financial responsibility for
payment of premiums, coinsurance, copayments,
deductibles, and any other charges; and
‘‘(2) the circumstances under which, and the
extent to which, the participant’s financial responsi-
bility described in paragraph (1) may vary, including
any distinctions based on whether a health care pro-
vider from whom covered benefits are obtained is in-
cluded in a defined set of providers.
‘‘(d) DISPUTE RESOLUTION PROCEDURES.—The in-
formation required under subsection (a) includes a de-
scription of the processes adopted by the plan of the type
described in section 503 of the Employee Retirement In-
come Security Act of 1974, including—
‘‘(1) descriptions thereof relating specifically
to—
215
‘‘(A) coverage decisions;
‘‘(B) internal review of coverage decisions;
and
‘‘(C) any external review of coverage deci-
sions; and
‘‘(2) the procedures and time frames applicable
to each step of the processes referred to in subpara-
graphs (A), (B), and (C) of paragraph (1).
‘‘(e) INFORMATION ON PLAN PERFORMANCE.—Any
information required under subsection (a) shall include in-
formation concerning the number of external reviews of
the type described in section 503 of the Employee Retire-
ment Income Security Act of 1974 that have been com-
pleted during the prior plan year and the number of such
reviews in which a recommendation is made for modifica-
tion or reversal of an internal review decision under the
plan.
‘‘(f) INFORMATION INCLUDED WITH ADVERSE COV-
ERAGE DECISIONS.—A health insurance issuer offering
health insurance coverage in connection with a group
health plan shall provide to each participant and bene-
ficiary, together with any notification of the participant
or beneficiary of an adverse coverage decision, the fol-
lowing information:
216
‘‘(1) PREAUTHORIZATION AND UTILIZATION RE-
VIEW PROCEDURES.—A description of the basis on
which any preauthorization requirement or any utili-
zation review requirement has resulted in the ad-
verse coverage decision.
‘‘(2) PROCEDURES FOR DETERMINING EXCLU-
SIONS BASED ON MEDICAL NECESSITY OR ON INVES-
TIGATIONAL
ITEMS
OR
EXPERIMENTAL
TREAT-
MENTS.—If the adverse coverage decision is based
on a determination relating to medical necessity or
to an investigational item or an experimental treat-
ment or technology, a description of the procedures
and medically-based criteria used in such decision.
‘‘(g) INFORMATION AVAILABLE ON REQUEST.—
‘‘(1) ACCESS TO PLAN BENEFIT INFORMATION
IN ELECTRONIC FORM.—
‘‘(A) IN
GENERAL.—A health insurance
issuer offering health insurance coverage in
connection with a group health plan may, upon
written request (made not more frequently than
annually), make available to participants and
beneficiaries, in a generally recognized elec-
tronic format—
217
‘‘(i) the latest summary plan descrip-
tion, including the latest summary of ma-
terial modifications, and
‘‘(ii) the actual plan provisions setting
forth the benefits available under the plan,
to the extent such information relates to the
coverage options under the plan available to the
participant or beneficiary. A reasonable charge
may be made to cover the cost of providing
such information in such generally recognized
electronic format. The Secretary may by regula-
tion prescribe a maximum amount which will
constitute a reasonable charge under the pre-
ceding sentence.
‘‘(B) ALTERNATIVE ACCESS.—The require-
ments of this paragraph may be met by making
such information generally available (rather
than upon request) on the Internet or on a pro-
prietary computer network in a format which is
readily accessible to participants and bene-
ficiaries.
‘‘(2) ADDITIONAL
INFORMATION
TO
BE
PRO-
VIDED ON REQUEST.—
‘‘(A) INCLUSION IN SUMMARY PLAN DE-
SCRIPTION
OF
SUMMARY
OF
ADDITIONAL
IN-
218
FORMATION.—The information required under
subsection (a) includes a summary description
of the types of information required by this
subsection to be made available to participants
and beneficiaries on request.
‘‘(B) 
INFORMATION
REQUIRED
FROM
PLANS AND ISSUERS ON REQUEST.—In addition
to information otherwise required to be pro-
vided under this subsection, a health insurance
issuer offering health insurance coverage in
connection with a group health plan shall pro-
vide the following information to a participant
or beneficiary on request:
‘‘(i) CARE
MANAGEMENT
INFORMA-
TION.—A description of the circumstances
under which, and the extent to which, the
plan has special disease management pro-
grams or programs for persons with dis-
abilities, indicating whether these pro-
grams are voluntary or mandatory and
whether a significant benefit differential
results from participation in such pro-
grams.
‘‘(ii) INCLUSION
OF
DRUGS
AND
BIOLOGICALS IN FORMULARIES.—A state-
219
ment of whether a specific drug or biologi-
cal is included in a formulary used to de-
termine benefits under the plan and a de-
scription of the procedures for considering
requests for any patient-specific waivers.
‘‘(iii) ACCREDITATION
STATUS
OF
HEALTH INSURANCE ISSUERS AND SERV-
ICE PROVIDERS.—A description of the ac-
creditation and licensing status (if any) of
each health insurance issuer offering
health insurance coverage in connection
with the plan and of any utilization review
organization utilized by the issuer or the
plan, together with the name and address
of the accrediting or licensing authority.
‘‘(iv) QUALITY PERFORMANCE MEAS-
URES.—The latest information (if any)
maintained by the health insurance issuer
relating to quality of performance of the
delivery of medical care with respect to
coverage options offered under the plan
and of health care professionals and facili-
ties providing medical care under the plan.
‘‘(C) 
INFORMATION
REQUIRED
FROM
HEALTH CARE PROFESSIONALS.—
220
‘‘(i) 
QUALIFICATIONS, 
PRIVILEGES,
AND
METHOD
OF
COMPENSATION.—Any
health care professional treating a partici-
pant or beneficiary under a group health
plan shall provide to the participant or
beneficiary, on request, a description of his
or her professional qualifications (including
board certification status, licensing status,
and accreditation status, if any), privileges,
and experience and a general description
by category (including salary, fee-for-serv-
ice, capitation, and such other categories
as may be specified in regulations of the
Secretary) of the applicable method by
which such professional is compensated in
connection with the provision of such med-
ical care.
‘‘(ii) COST
OF
PROCEDURES.—Any
health care professional who recommends
an elective procedure or treatment while
treating a participant or beneficiary under
a group health plan that requires a partici-
pant or beneficiary to share in the cost of
treatment shall inform such participant or
beneficiary of each cost associated with the
221
procedure or treatment and an estimate of
the magnitude of such costs.
‘‘(D) 
INFORMATION
REQUIRED
FROM
HEALTH CARE FACILITIES ON REQUEST.—Any
health care facility from which a participant or
beneficiary has sought treatment under a group
health plan shall provide to the participant or
beneficiary, on request, a description of the fa-
cility’s corporate form or other organizational
form and all forms of licensing and accredita-
tion status (if any) assigned to the facility by
standard-setting organizations.
‘‘(h) ACCESS TO INFORMATION RELEVANT TO THE
COVERAGE OPTIONS UNDER WHICH THE PARTICIPANT
OR BENEFICIARY IS ELIGIBLE TO ENROLL.—In addition
to information otherwise required to be made available
under this section, a health insurance issuer offering
health insurance coverage in connection with a group
health plan shall, upon written request (made not more
frequently than annually), make available to a participant
(and an employee who, under the terms of the plan, is
eligible for coverage but not enrolled) in connection with
a period of enrollment the summary plan description for
any coverage option under the plan under which the par-
ticipant is eligible to enroll and any information described
222
in clauses (i), (ii), (iii), (vi), (vii), and (viii) of subsection
(e)(2)(B).
‘‘(i) ADVANCE
NOTICE
OF
CHANGES
IN
DRUG
FORMULARIES.—Not later than 30 days before the effec-
tive date of any exclusion of a specific drug or biological
from any drug formulary under health insurance coverage
offered by a health insurance issuer in connection with a
group health plan that is used in the treatment of a chron-
ic illness or disease, the issuer shall take such actions as
are necessary to reasonably ensure that plan participants
are informed of such exclusion. The requirements of this
subsection may be satisfied—
‘‘(1) by inclusion of information in publications
broadly distributed by plan sponsors, employers, or
employee organizations;
‘‘(2) by electronic means of communication (in-
cluding the Internet or proprietary computer net-
works in a format which is readily accessible to par-
ticipants);
‘‘(3) by timely informing participants who,
under an ongoing program maintained under the
plan, have submitted their names for such notifica-
tion; or
‘‘(4) by any other reasonable means of timely
informing plan participants.
223
‘‘(j) DEFINITIONS AND RELATED RULES.—
‘‘(1) IN
GENERAL.—For purposes of this
section—
‘‘(A) GROUP
HEALTH
PLAN.—The term
‘group health plan’ has the meaning provided
such term under section 733(a)(1).
‘‘(B) MEDICAL CARE.—The term ‘medical
care’ has the meaning provided such term
under section 733(a)(2).
‘‘(C) HEALTH
INSURANCE
COVERAGE.—
The term ‘health insurance coverage’ has the
meaning provided such term under section
733(b)(1).
‘‘(D) HEALTH
INSURANCE
ISSUER.—The
term ‘health insurance issuer’ has the meaning
provided such term under section 733(b)(2).
‘‘(2) APPLICABILITY
ONLY
IN
CONNECTION
WITH INCLUDED GROUP HEALTH PLAN BENEFITS.—
‘‘(A) IN GENERAL.—The requirements of
this section shall apply only in connection with
included group health plan benefits.
‘‘(B) INCLUDED
GROUP
HEALTH
PLAN
BENEFIT.—For purposes of subparagraph (A),
the term ‘included group health plan benefit’
224
means a benefit which is not an excepted ben-
efit (as defined in section 2791(c)).’’.
SEC. 212. REQUIREMENTS FOR TREATMENT OF PRESCRIP-
TION DRUGS AND MEDICAL DEVICES AS EX-
PERIMENTAL OR INVESTIGATIONAL.
Subpart 2 of part A of title XXVII of the Public
Health Service Act (as amended by 211) is amended fur-
ther by adding at the end the following new section:
‘‘SEC. 2709. REQUIREMENTS FOR TREATMENT OF PRE-
SCRIPTION DRUGS AND MEDICAL DEVICES
AS EXPERIMENTAL OR INVESTIGATIONAL.
‘‘(a) IN GENERAL.—No use of a prescription drug
or medical device shall be considered experimental or in-
vestigational in connection with health insurance coverage
offered by a health insurance issuer in connection with a
group health plan if such use is included in the labeling
authorized by the Food and Drug Administration under
section 505, 513, or 515 of the Federal Food, Drug, and
Cosmetic Act or under secton 351 of the Public Health
Service Act, unless clinical benefit has not been adequately
demonstrated based on analysis of reliable authoritative
scientific evidence.
‘‘(b) CONSTRUCTION.—Nothing in this section shall
be construed as—
225
‘‘(1) requiring a health insurance issuer offer-
ing health insurance coverage in connection with a
group health plan to provide any coverage of pre-
scription drugs or medical devices, or
‘‘(2) precluding a health insurance offering
health insurance coverage in connection with a group
health plan from considering medical devices cleared
through premarket notification under section 510(k)
of the Federal Food, Drug, and Cosmetic Act as in-
vestigational.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) Terms used in this section which are de-
fined in section 2791 shall have the meanings pro-
vided such terms under such section, respectively.
‘‘(2) The term ‘clinical benefit’ means improve-
ment in net health outcome (including but not lim-
ited to length of life or ability to function) or in any
objectively measurable criterion that is reasonably
likely to predict clinical benefit to an extent at least
equivalent to the extent that is achievable under the
usual conditions of medical practice under estab-
lished alternatives.
‘‘(3) The term ‘reliable authoritative evidence’
means well-designed and well-conducted investiga-
tions published in peer-reviewed scientific journals.’’.
226
SEC. 213. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL.—The amendments made by section
211 shall apply with respect to plan years beginning on
or after January 1 of the second calendar year following
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 subtitle before such
date.
(b) LIMITATION ON ENFORCEMENT ACTIONS.—No
enforcement action shall be taken, pursuant to the amend-
ments made by this subtitle, against a health insurance
issuer with respect to a violation of a requirement imposed
by such amendments before the date of issuance of final
regulations issued in connection with such requirement, if
the issuer has sought to comply in good faith with such
requirement.
Subtitle C—HealthMarts
SEC. 221. EXPANSION OF CONSUMER CHOICE THROUGH
HEALTHMARTS.
(a) IN GENERAL.—The Public Health Service Act is
amended by adding at the end the following new title:
‘‘TITLE XXVIII—HEALTHMARTS
‘‘SEC. 2801. DEFINITION OF HEALTHMART.
‘‘(a) IN GENERAL.—For purposes of this title, the
term ‘HealthMart’ means a legal entity that meets the fol-
lowing requirements:
227
‘‘(1) ORGANIZATION.—The HealthMart is an
organization operated under the direction of a board
of directors which is composed of representatives of
not fewer than 2 from each of the following:
‘‘(A) Small employers, if coverage is of-
fered through the HealthMart to small employ-
ers.
‘‘(B) Employees of such small employers.
‘‘(C) Individuals (other than those who are
employees of employers) who are eligible to par-
ticipate in the HealthMart, if coverage is of-
fered through HealthMarts for individuals who
are not employees of small employers.
‘‘(D) Health care providers, which may be
physicians, other health care professionals,
health care facilities, or any combination there-
of.
‘‘(E) Entities, such as insurance compa-
nies, health maintenance organizations, and li-
censed provider-sponsored organizations, that
underwrite or administer health benefits cov-
erage.
‘‘(2) 
OFFERING
HEALTH
BENEFITS
COV-
ERAGE.—
‘‘(A) DIFFERENT GROUPS.—
228
‘‘(i) IN GENERAL.—The HealthMart,
in conjunction with those health insurance
issuers that offer health benefits coverage
through the HealthMart, makes available
health benefits coverage in the manner de-
scribed in subsection (b) to either or both
of the following:
‘‘(I) All small employers and eli-
gible employees of those employers,
and the dependents of such employ-
ees.
‘‘(II) Other individuals (including
self-employed individuals), and the de-
pendents of such individuals, who are
employees of an employer but not in-
cluding employees of employers.
‘‘(ii) MANNER
OF
OFFERING.—Such
coverage shall be made available in the
manner described in subsection (c)(2) at
rates (including employer’s and employee’s
share, if applicable) that are established by
the health insurance issuer on a policy or
product specific basis and that may vary
only as permissible under State law. A
HealthMart is deemed to be a group health
229
plan for purposes of applying section 702
of the Employee Retirement Income Secu-
rity Act of 1974, section 2702 of this Act,
and section 9802(b) of the Internal Rev-
enue Code of 1986 (which limit variation
among similarly situated individuals of re-
quired premiums for health benefits cov-
erage on the basis of health status-related
factors).
‘‘(iii) SEPARATE
BOOKS
OF
BUSI-
NESS.—The coverage that is offered to em-
ployers (and employees) described in sub-
clause (I) of clause (i) need not be the
same as that offered to individuals de-
scribed in subclause (II) of such clause and
the HealthMart shall establish premiums
for coverage under each such subclause as
a separate book of business.
‘‘(B) NONDISCRIMINATION
IN
COVERAGE
OFFERED.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), if a HealthMart offers coverage in a
geographic area (as specified under para-
graph (3)(A)) to eligible employees or indi-
viduals, the HealthMart shall offer the