I 
111TH CONGRESS 
1ST SESSION H. R. 3067 
To amend title XVIII of the Social Security Act to reform Medicare payments 
to physicians and certain other providers and improve Medicare benefits, 
to encourage the offering of health coverage by small businesses, to 
provide tax incentives for the purchase of health insurance by individuals, 
to increase access to health care for veterans, to address the nursing 
shortage, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 26, 2009 
Mr. LATHAM introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committees on 
Education and Labor, Ways and Means, Veterans’ Affairs, and Armed 
Services, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to reform 
Medicare payments to physicians and certain other pro-
viders and improve Medicare benefits, to encourage the 
offering of health coverage by small businesses, to pro-
vide tax incentives for the purchase of health insurance 
by individuals, to increase access to health care for vet-
erans, to address the nursing shortage, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Health Security for All Americans Act of 2009’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—MEDICARE 
Sec. 101. Medicare physician payment update reform. 
Sec. 102. Medicare GPCI floors. 
Sec. 103. Annual physical examinations under Medicare. 
Sec. 104. Medicare outreach campaign on availability of welcome to Medicare 
physicals. 
Sec. 105. Improvements to the medicare-dependent hospital (MDH) program. 
Sec. 106. Temporary improvements to the Medicare inpatient hospital payment 
adjustment for low-volume hospitals. 
Sec. 107. Ensuring proportional representation of interests of rural areas on 
MedPAC. 
TITLE II—SMALL BUSINESS HEALTH PLANS 
Subtitle A—Enhanced Marketplace Pools 
Sec. 201. Rules governing enhanced marketplace pools. 
‘‘PART 8—RULES GOVERNING ENHANCED MARKETPLACE POOLS 
‘‘Sec. 801. Small business health plans. 
‘‘Sec. 802. Alternative Market Pooling Organizations. 
‘‘Sec. 803. Certification of small business health plans. 
‘‘Sec. 804. Requirements relating to sponsors and boards of trustees. 
‘‘Sec. 805. Participation and coverage requirements. 
‘‘Sec. 806. Other requirements relating to plan documents, contribution 
rates, and benefit options. 
‘‘Sec. 807. Requirements for application and related requirements. 
‘‘Sec. 808. Notice requirements for voluntary termination. 
‘‘Sec. 809. Implementation and application authority by Secretary. 
‘‘Sec. 810. Definitions and rules of construction. 
Sec. 202. Cooperation between Federal and State authorities. 
Sec. 203. Effective date and transitional and other rules. 
Subtitle B—Market Relief 
Sec. 211. Market relief. 
‘‘TITLE XXXI—HEALTH CARE INSURANCE MARKETPLACE 
MODERNIZATION 
‘‘Sec. 3101. General insurance definitions. 
‘‘Sec. 3102. Implementation and application authority by Secretary. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6211
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘Subtitle A—Market Relief 
‘‘PART I—RATING REQUIREMENTS 
‘‘Sec. 3111. Definitions. 
‘‘Sec. 3112. Rating rules. 
‘‘Sec. 3113. Application and preemption. 
‘‘Sec. 3114. Civil actions and jurisdiction. 
‘‘Sec. 3115. Ongoing review. 
‘‘PART II—AFFORDABLE PLANS 
‘‘Sec. 3121. Definitions. 
‘‘Sec. 3122. Offering affordable plans. 
‘‘Sec. 3123. Application and preemption. 
‘‘Sec. 3124. Civil actions and jurisdiction. 
‘‘Sec. 3125. Rules of construction. 
Subtitle C—Harmonization of Health Insurance Standards 
Sec. 221. Health Insurance Standards Harmonization. 
‘‘Subtitle B—Standards Harmonization 
‘‘Sec. 3131. Definitions. 
‘‘Sec. 3132. Harmonized standards. 
‘‘Sec. 3133. Application and preemption. 
‘‘Sec. 3134. Civil actions and jurisdiction. 
‘‘Sec. 3135. Authorization of appropriations; rule of construction. 
TITLE III—TAX-RELATED HEALTH INCENTIVES 
Sec. 301. SECA tax deduction for health insurance costs. 
Sec. 302. Deduction for qualified health insurance costs of individuals. 
TITLE IV—INCREASING ACCESS TO VA HEALTH CARE 
Sec. 401. Requirement for payments to facilities other than the Department of 
Veterans Affairs for covered health services. 
Sec. 402. Authority of Department of Veterans Affairs pharmacies to dispense 
medications to veterans on prescriptions written by private 
practitioners. 
TITLE V—NURSING SHORTAGE 
Sec. 501. Child care assistance for individuals pursuing advanced nursing de-
grees. 
Sec. 502. Nurse faculty program. 
‘‘PART E—NURSE FACULTY PROJECT 
‘‘Sec. 771. Purposes. 
‘‘Sec. 772. Assistance authorized. 
‘‘Sec. 773. Applications. 
‘‘Sec. 774. Authorization of appropriations. 
‘‘Sec. 775. Definition. 
Sec. 503. Nurse Faculty Loan Repayment Program. 
Sec. 504. Programs to increase the number of nurses within the Armed Forces. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6211
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
TITLE VI—RESERVE COMPONENTS OF THE ARMED FORCES 
Sec. 601. Effective date of active duty for purposes of entitlement to active 
duty health care of members of the reserve components of the 
Armed Forces receiving alert order anticipating a call or order 
to active duty in support of a contingency operation. 
TITLE I—MEDICARE 
SEC. 101. MEDICARE PHYSICIAN PAYMENT UPDATE RE-
FORM. 
(a) SUBSTITUTION OF MEI INCREASE FOR SGR AD-
JUSTMENTS.—Section 1848(d) of the Social Security Act 
(42 U.S.C. 1395w–4(d)) is amended— 
(1) in paragraph (1)(A), by inserting ‘‘and be-
fore 2010’’ after ‘‘beginning with 2001’’; 
(2) in paragraph (1)(A), by inserting before the 
period at the end the following: ‘‘, and for years be-
ginning with 2010, multiplied by the update estab-
lished under paragraph (10) applicable to the year 
involved’’; and 
(3) in paragraph (4)— 
(A) in the heading by striking ‘‘YEARS BE-
GINNING WITH 2001’’ and inserting ‘‘2001, 2002, 
AND 2003’’; and 
(B) in subparagraph (A), by inserting 
‘‘and ending with 2003’’ after ‘‘beginning with 
2001’’; and 
(4) by adding at the end the following new 
paragraph: 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(10) UPDATE
BEGINNING
WITH
2010.—The 
update to the single conversion factor established in 
paragraph (1)(C) for 2010 and each succeeding year 
shall be the percentage increase in the MEI (as de-
fined in section 1842(i)(3)) for the year involved 
minus 1 percentage point.’’. 
(b) 
ENDING
APPLICATION
OF
SUSTAINABLE 
GROWTH RATE (SGR).—Section 1848(f)(1)(B) of such 
Act (42 U.S.C. 1395w–4(f)(1)(B)) is amended by insert-
ing ‘‘(and before 2009)’’ after ‘‘each succeeding year’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to payment for services furnished 
on or after January 1, 2010. 
SEC. 102. MEDICARE GPCI FLOORS. 
Section 1848(e)(1) of the Social Security Act (42 
U.S.C. 1395w–4(e)(1)) is amended— 
(1) in subparagraph (A), by striking ‘‘and (G)’’ 
and inserting ‘‘(G), (H), and (I)’’; and 
(2) by adding at the end the following new sub-
paragraphs: 
‘‘(H) FLOOR
AT
1.0
FOR
PRACTICE
EX-
PENSE INDEX.—After calculating the practice 
expense index in subparagraph (A)(ii), for pur-
poses of payment for services furnished on or 
after January 1, 2010, the Secretary shall in-
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
crease the practice expense geographic index to 
1.00 for any locality for which such practice ex-
pense geographic index is less than 1.00. 
‘‘(I) FLOOR AT 1.0 FOR WORK EXPENSES 
INDEX.—After calculating the practice expense 
index in subparagraph (A)(ii), for purposes of 
payment for services furnished on or after Jan-
uary 1, 2010, the Secretary shall increase the 
practice expense geographic index to 1.00 for 
any locality for which such practice expense ge-
ographic index is less than 1.00.’’. 
SEC. 103. ANNUAL PHYSICAL EXAMINATIONS UNDER MEDI-
CARE. 
(a) IN GENERAL.—Section 1861 of the Social Secu-
rity Act (42 U.S.C. 1395x) is amended— 
(1) in each of subparagraphs (W) and (AA)(i) 
of subsection (s)(2), by striking ‘‘initial’’ and insert-
ing ‘‘annual’’; 
(2) in the heading of subsection (ww), by strik-
ing ‘‘Initial’’ and inserting ‘‘Annual’’; and 
(3) by amending paragraph (1) of subsection 
(ww) to read as follows: 
‘‘(1) The term ‘annual preventive physical ex-
amination’ means professional services of a physi-
cian, or of a nurse practitioner or physician assist-
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
ant which the practitioner or assistant is authorized 
to provide under State law, consisting of a physical 
examination (including, as medically appropriate, 
measurement of height, weight, body mass index, 
and blood pressure) with the goal of health pro-
motion and disease detection and includes education, 
counseling, and referral with respect to screening 
and other preventive services described in paragraph 
(2) and end-of-life planning (as defined in paragraph 
(3)) upon the agreement with the individual, as well 
as related clinical laboratory tests and such other 
preventive services in connection with the same visit 
as the Secretary may provide (taking into account 
services typically included in an annual physical ex-
amination covered under private health benefit 
plans).’’. 
(b) 
MODIFICATION
OF
EXCLUSIONS.—Section 
1862(a) of such Act (42 U.S.C. 1395y(a)) is amended— 
(1) in paragraph (1), by amending subpara-
graph (K) to read as follows: 
‘‘(K) in the case of an annual preventive 
physical examination, which is performed for an 
individual more frequently than once in any 12- 
month period,’’; and 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
(2) in paragraph (7), by inserting ‘‘(other than 
annual preventive physical examinations)’’ after 
‘‘routine physical checkups’’. 
(c) CONFORMING AMENDMENT.—Section 1833(b)(9) 
of such Act (42 U.S.C. 1395l(b)(9)) is amended by strik-
ing ‘‘initial’’ and inserting ‘‘annual’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1 of the first year beginning more than 60 days 
after the date of the enactment of this Act. 
SEC. 104. MEDICARE OUTREACH CAMPAIGN ON AVAIL-
ABILITY 
OF 
WELCOME 
TO 
MEDICARE 
PHYSICALS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct a national campaign to pro-
vide information to the public on the availability of an ini-
tial preventive physical examination (as defined in section 
1861(ww) of the Social Security Act (42 U.S.C. 
1395x(ww))) for beneficiaries of the Medicare program 
under title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.). 
(b) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$1,000,000 for each of fiscal years 2010 through 2014. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
SEC. 105. IMPROVEMENTS TO THE MEDICARE-DEPENDENT 
HOSPITAL (MDH) PROGRAM. 
(a) USE OF NON-WAGE ADJUSTED PPS RATE.— 
Section 1886(d)(5)(G) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(G)) is amended by adding at the 
end the following new clause: 
‘‘(v) In the case of discharges occurring on or after 
October 1, 2010, and before October 1, 2012, in deter-
mining the amount under paragraph (1)(A)(iii) for pur-
poses of clauses (i) and (ii)(II), such amount shall, if it 
results in greater payments to the hospital, be determined 
without regard to any adjustment for different area wage 
levels under paragraph (3)(E).’’. 
(b) ENHANCED PAYMENT FOR AMOUNT BY WHICH 
THE
TARGET
EXCEEDS
THE
PPS RATE.—Section 
1886(d)(5)(G)(ii)(II) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(G)(ii)(II)) is amended by inserting 
‘‘, and before October 1, 2010, or 85 percent in the case 
of discharges occurring on or after October 1, 2010, and 
before October 1, 2012’’ after ‘‘October 1, 2011’’. 
SEC. 106. TEMPORARY IMPROVEMENTS TO THE MEDICARE 
INPATIENT 
HOSPITAL 
PAYMENT 
ADJUST-
MENT FOR LOW-VOLUME HOSPITALS. 
Section 1886(d)(12) of the Social Security Act (42 
U.S.C. 1395ww(d)(12)) is amended— 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
(1) in subparagraph (A), by inserting ‘‘or (D)’’ 
after ‘‘subparagraph (B)’’; 
(2) in subparagraph (B), by striking ‘‘The Sec-
retary’’ and inserting ‘‘For discharges occurring in 
fiscal years 2005 through 2010 and for discharges 
occurring in fiscal year 2013 and subsequent fiscal 
years, the Secretary’’; 
(3) in subparagraph (C)(i)— 
(A) by inserting ‘‘(or, with respect to fiscal 
years 2011 and 2012, 15 road miles)’’ after 
‘‘25 road miles’’; and 
(B) by inserting ‘‘(or, with respect to fiscal 
years 2011 and 2012, 2,000 discharges of indi-
viduals entitled to, or enrolled for, benefits 
under part A)’’ after ‘‘800 discharges’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(D) TEMPORARY APPLICABLE PERCENT-
AGE
INCREASE.—For discharges occurring in 
fiscal years 2011 or 2012, the Secretary shall 
determine an applicable percentage increase for 
purposes of subparagraph (A) using a linear 
sliding scale ranging from 25 percent for low- 
volume hospitals with fewer than an appro-
priate number (as determined by the Secretary) 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
of discharges of individuals entitled to, or en-
rolled for, benefits under part A in the fiscal 
year to 0 percent for low-volume hospitals with 
greater than 2,000 discharges of such individ-
uals in the fiscal year.’’. 
SEC. 107. ENSURING PROPORTIONAL REPRESENTATION OF 
INTERESTS OF RURAL AREAS ON MEDPAC. 
(a) IN GENERAL.—Section 1805(c)(2) of the Social 
Security Act (42 U.S.C. 1395b–6(c)(2)) is amended— 
(1) in subparagraph (A), by inserting ‘‘con-
sistent with subparagraph (E)’’ after ‘‘rural rep-
resentatives’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(E) PROPORTIONAL REPRESENTATION OF 
INTERESTS OF RURAL AREAS.—In order to pro-
vide a balance between urban and rural rep-
resentatives under subparagraph (A), the pro-
portion of members of the Commission who rep-
resent the interests of health care providers and 
Medicare beneficiaries located in rural areas 
shall be no less than the proportion of the total 
number of Medicare beneficiaries who reside in 
rural areas.’’. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to appointments to the Medicare 
Payment Advisory Commission made after the date of en-
actment of this Act. 
TITLE II—SMALL BUSINESS 
HEALTH PLANS 
Subtitle A—Enhanced Marketplace 
Pools 
SEC. 201. RULES GOVERNING ENHANCED MARKETPLACE 
POOLS. 
(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 ENHANCED 
MARKETPLACE POOLS 
‘‘SEC. 801. SMALL BUSINESS HEALTH PLANS. 
‘‘(a) IN GENERAL.—For purposes of this part, the 
term ‘small business health plan’ means a fully insured 
group health plan whose sponsor is (or is deemed under 
this part to be) described in subsection (b). 
‘‘(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 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
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 medical care; 
‘‘(2) is established as a permanent entity which 
receives the active support of its members and re-
quires for membership payment on a periodic basis 
of dues or payments necessary to maintain eligibility 
for membership; 
‘‘(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-
bers), or the dependents of such employees, and does 
not condition such dues or payments on the basis of 
group health plan participation; and 
‘‘(4) does not condition membership on the 
basis of a minimum group size. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
Any sponsor consisting of an association of entities which 
meet the requirements of paragraphs (1), (2), (3), and (4) 
shall be deemed to be a sponsor described in this sub-
section. 
‘‘SEC. 802. ALTERNATIVE MARKET POOLING ORGANIZA-
TIONS. 
‘‘(a) IN GENERAL.—The Secretary, not later than 1 
year after the date of enactment of this part, shall promul-
gate regulations that apply the rules and standards of this 
part, as necessary, to circumstances in which a pooling 
entity other (hereinafter ‘Alternative Market Pooling Or-
ganizations’) is not made up principally of employers and 
their employees, or not a professional organization or such 
small business health plan entity identified in section 801. 
‘‘(b) ADAPTION OF STANDARDS.—In developing and 
promulgating regulations pursuant to subsection (a), the 
Secretary, in consultation with the Secretary of Health 
and Human Services, small business health plans, small 
and large employers, large and small insurance issuers, 
consumer representatives, and state insurance commis-
sioners, shall— 
‘‘(1) adapt the standards of this part, to the 
maximum degree practicable, to assure balanced and 
comparable oversight standards for both small busi-
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
ness health plans and alternative market pooling or-
ganizations; 
‘‘(2) permit the participation as alternative 
market pooling organizations unions, churches and 
other faith-based organizations, or other organiza-
tions composed of individuals and groups which may 
have little or no association with employment, pro-
vided however, that such alternative market pooling 
organizations meet, and continue meeting on an on-
going basis, to satisfy standards, rules, and require-
ments materially equivalent to those set forth in this 
part with respect to small business health plans; 
‘‘(3) conduct periodic verification of such com-
pliance by alternative market pooling organizations, 
in consultation with the Secretary of Health and 
Human Services and the National Association of In-
surance Commissioners, except that such periodic 
verification shall not materially impede market entry 
or participation as pooling entities comparable to 
that of small business health plans; 
‘‘(4) assure that consistent, clear, and regularly 
monitored standards are applied with respect to al-
ternative market pooling organizations to avert ma-
terial risk-selection within or among the composition 
of such organizations; 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(5) the expedited and deemed certification pro-
cedures provided in section 805(d) shall not apply to 
alternative market pooling organizations until sooner 
of the promulgation of regulations under this sub-
section or the expiration of one year following enact-
ment of this Act; and 
‘‘(6) make such other appropriate adjustments 
to the requirements of this part as the Secretary 
may reasonably deem appropriate to fit the cir-
cumstances of an individual alternative market pool-
ing organization or category of such organization, 
including but not limited to the application of the 
membership 
payment 
requirements 
of 
section 
801(b)(2) to alternative market pooling organiza-
tions composed primarily of church- or faith-based 
membership. 
‘‘SEC. 803. CERTIFICATION OF SMALL BUSINESS HEALTH 
PLANS. 
‘‘(a) IN GENERAL.—Not later than 6 months after 
the date of enactment of this part, the applicable authority 
shall prescribe by interim final rule a procedure under 
which the applicable authority shall certify small business 
health plans which apply for certification as meeting the 
requirements of this part. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(b) REQUIREMENTS APPLICABLE
TO CERTIFIED 
PLANS.—A small business health plan with respect to 
which certification under this part is in effect shall meet 
the applicable requirements of this part, effective on the 
date of certification (or, if later, on the date on which the 
plan is to commence operations). 
‘‘(c) REQUIREMENTS
FOR
CONTINUED
CERTIFI-
CATION.—The applicable authority may provide by regula-
tion for continued certification of small business health 
plans under this part. Such regulation shall provide for 
the revocation of a certification if the applicable authority 
finds that the small business health plan involved is failing 
to comply with the requirements of this part. 
‘‘(d) EXPEDITED AND DEEMED CERTIFICATION.— 
‘‘(1) IN GENERAL.—If the Secretary fails to act 
on an application for certification under this section 
within 90 days of receipt of such application, the ap-
plying small business health plan shall be deemed 
certified until such time as the Secretary may deny 
for cause the application for certification. 
‘‘(2) CIVIL PENALTY.—The Secretary may as-
sess a civil penalty against the board of trustees and 
plan sponsor (jointly and severally) of a small busi-
ness health plan that is deemed certified under para-
graph (1) of up to $500,000 in the event the Sec-
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
retary determines that the application for certifi-
cation of such small business health plan was will-
fully or with gross negligence incomplete or inac-
curate. 
‘‘SEC. 804. REQUIREMENTS RELATING TO SPONSORS AND 
BOARDS OF TRUSTEES. 
‘‘(a) SPONSOR.—The requirements of this subsection 
are met with respect to a small business 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 a small business 
health plan if the following requirements are met: 
‘‘(1) FISCAL CONTROL.—The plan is operated, 
pursuant to a plan document, by a board of trustees 
which pursuant to a trust agreement has complete 
fiscal control over the plan and which is responsible 
for all operations of the plan. 
‘‘(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 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
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) BOARD MEMBERSHIP.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clauses (ii) and (iii), the members 
of the board of trustees are individuals se-
lected from individuals who are the owners, 
officers, directors, or employees of the par-
ticipating employers or who are partners in 
the participating employers and actively 
participate in the business. 
‘‘(ii) LIMITATION.— 
‘‘(I) GENERAL RULE.—Except as 
provided in subclauses (II) and (III), 
no such member is an owner, officer, 
director, or employee of, or partner in, 
a contract administrator or other 
service provider to the plan. 
‘‘(II) LIMITED
EXCEPTION
FOR 
PROVIDERS OF SERVICES SOLELY ON 
BEHALF OF THE SPONSOR.—Officers 
or employees of a sponsor which is a 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
service provider (other than a contract 
administrator) to the plan may be 
members of the board if they con-
stitute 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
PRO-
VIDERS
OF
MEDICAL
CARE.—In the 
case of a sponsor which is an associa-
tion whose membership consists pri-
marily of providers of medical care, 
subclause (I) shall not apply in the 
case of any service provider described 
in subclause (I) who is a provider of 
medical care under the plan. 
‘‘(iii) CERTAIN
PLANS
EXCLUDED.— 
Clause (i) shall not apply to a small busi-
ness health plan which is in existence on 
the date of the enactment of this part. 
‘‘(B) SOLE
AUTHORITY.—The board has 
sole authority under the plan to approve appli-
cations for participation in the plan and to con-
tract with insurers. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(c) TREATMENT OF FRANCHISES.—In the case of 
a group health plan which is established and maintained 
by a franchiser for a franchisor or for its franchisees— 
‘‘(1) the requirements of subsection (a) and sec-
tion 801(a) shall be deemed met if such require-
ments would otherwise be met if the franchisor were 
deemed to be the sponsor referred to in section 
801(b) and each franchisee were deemed to be a 
member (of the sponsor) referred to in section 
801(b); and 
‘‘(2) the requirements of section 804(a)(1) shall 
be deemed met. 
For purposes of this subsection the terms ‘franchisor’ and 
‘franchisee’ shall have the meanings given such terms for 
purposes of sections 436.2(a) through 436.2(c) of title 16, 
Code of Federal Regulations (including any such amend-
ments to such regulation after the date of enactment of 
this part). 
‘‘SEC. 805. PARTICIPATION AND COVERAGE REQUIRE-
MENTS. 
‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 
requirements of this subsection are met with respect to 
a small business health plan if, under the terms of the 
plan— 
‘‘(1) each participating employer must be— 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(A) a member of the sponsor; 
‘‘(B) the sponsor; or 
‘‘(C) an affiliated member of the sponsor, 
except that, in the case of a sponsor which is 
a professional association or other individual- 
based association, if at least one of the officers, 
directors, or employees of an employer, or at 
least one of the individuals who are partners in 
an employer and who actively participates in 
the business, is a member or such an affiliated 
member of the sponsor, participating 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 dependents of individuals de-
scribed in subparagraph (A). 
‘‘(b) INDIVIDUAL MARKET UNAFFECTED.—The re-
quirements of this subsection are met with respect to a 
small business health plan if, under the terms of the plan, 
no participating employer may provide health insurance 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
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. 
‘‘(c) PROHIBITION OF DISCRIMINATION AGAINST EM-
PLOYERS AND EMPLOYEES ELIGIBLE TO PARTICIPATE.— 
The requirements of this subsection are met with respect 
to a small business health plan if— 
‘‘(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) information regarding all coverage options 
available under the plan is made readily available to 
any employer eligible to participate; and 
‘‘(3) the applicable requirements of sections 
701, 702, and 703 are met with respect to the plan. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘SEC. 806. OTHER REQUIREMENTS RELATING TO PLAN 
DOCUMENTS, CONTRIBUTION RATES, AND 
BENEFIT OPTIONS. 
‘‘(a) IN GENERAL.—The requirements of this section 
are met with respect to a small business health plan if 
the following requirements are met: 
‘‘(1) 
CONTENTS
OF
GOVERNING
INSTRU-
MENTS.— 
‘‘(A) IN GENERAL.—The instruments gov-
erning the plan include a written instrument, 
meeting the requirements of an instrument re-
quired under section 402(a)(1), which— 
‘‘(i) provides that the board of trust-
ees serves as the named fiduciary required 
for plans under section 402(a)(1) and 
serves in the capacity of a plan adminis-
trator (referred to in section 3(16)(A)); 
and 
‘‘(ii) provides that the sponsor of the 
plan is to serve as plan sponsor (referred 
to in section 3(16)(B)). 
‘‘(B) DESCRIPTION OF MATERIAL PROVI-
SIONS.—The terms of the health insurance cov-
erage (including the terms of any individual 
certificates that may be offered to individuals in 
connection with such coverage) describe the ma-
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
terial benefit and rating, and other provisions 
set forth in this section and such material pro-
visions are included in the summary plan de-
scription. 
‘‘(2) CONTRIBUTION
RATES
MUST
BE
NON-
DISCRIMINATORY.— 
‘‘(A) IN GENERAL.—The contribution rates 
for any participating small employer shall not 
vary on the basis of any health status-related 
factor in relation to employees of such employer 
or their beneficiaries and shall not vary on the 
basis of the type of business or industry in 
which such employer is engaged, subject to sub-
paragraph (B) and the terms of this title. 
‘‘(B) EFFECT OF TITLE.—Nothing in this 
title or any other provision of law shall be con-
strued to preclude a health insurance issuer of-
fering health insurance coverage in connection 
with a small business health plan that meets 
the requirements of this part, and at the re-
quest of such small business health plan, 
from— 
‘‘(i) setting contribution rates for the 
small business health plan based on the 
claims experience of the small business 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
health plan so long as any variation in 
such rates for participating small employ-
ers complies with the requirements of 
clause (ii), except that small business 
health plans shall not be subject, in non-
adopting States, to subparagraphs (A)(ii) 
and (C) of section 2912(a)(2) of the Public 
Health Service Act, and in adopting 
States, to any State law that would have 
the effect of imposing requirements as out-
lined in such subparagraphs (A)(ii) and 
(C); or 
‘‘(ii) varying contribution rates for 
participating small employers in a small 
business health plan in a State to the ex-
tent that such rates could vary using the 
same methodology employed in such State 
for regulating small group premium rates, 
subject to the terms of part I of subtitle A 
of title XXXI of the Public Health Service 
Act (relating to rating requirements), as 
added by subtitle B of title II of the 
Health Security for All Americans Act of 
2009. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(3) EXCEPTIONS REGARDING SELF-EMPLOYED 
AND LARGE EMPLOYERS.— 
‘‘(A) SELF-EMPLOYED.— 
‘‘(i) IN
GENERAL.—Small business 
health plans with participating employers 
who are self-employed individuals (and 
their dependents) shall enroll such self-em-
ployed participating employers in accord-
ance with rating rules that do not violate 
the rating rules for self-employed individ-
uals in the State in which such self-em-
ployed participating employers are located. 
‘‘(ii) GUARANTEE ISSUE.—Small busi-
ness health plans with participating em-
ployers who are self-employed individuals 
(and their dependents) may decline to 
guarantee issue to such participating em-
ployers in States in which guarantee issue 
is not otherwise required for the self-em-
ployed in that State. 
‘‘(B) LARGE EMPLOYERS.—Small business 
health plans with participating employers that 
are larger than small employers (as defined in 
section 808(a)(10)) shall enroll such large par-
ticipating employers in accordance with rating 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
rules that do not violate the rating rules for 
large employers in the State in which such large 
participating employers are located. 
‘‘(4) 
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. 
‘‘(b) ABILITY OF SMALL BUSINESS HEALTH PLANS 
TO DESIGN BENEFIT OPTIONS.—Nothing in this part or 
any provision of State law (as defined in section 
514(c)(1)) shall be construed to preclude a small business 
health plan or a health insurance issuer offering health 
insurance coverage in connection with a small business 
health plan from exercising its sole discretion in selecting 
the specific benefits and services consisting of medical care 
to be included as benefits under such plan or coverage, 
except that such benefits and services must meet the terms 
and specifications of part II of subtitle A of title XXXI 
of the Public Health Service Act (relating to lower cost 
plans), as added by subtitle B of title II of the Health 
Security for All Americans Act of 2009. 
‘‘(c) DOMICILE AND NON-DOMICILE STATES.— 
‘‘(1) DOMICILE
STATE.—Coverage shall be 
issued to a small business health plan in the State 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
in which the sponsor’s principal place of business is 
located. 
‘‘(2) NON-DOMICILE STATES.—With respect to 
a State (other than the domicile State) in which par-
ticipating employers of a small business health plan 
are located but in which the insurer of the small 
business health plan in the domicile State is not yet 
licensed, the following shall apply: 
‘‘(A) TEMPORARY PREEMPTION.—If, upon 
the expiration of the 90-day period following 
the submission of a licensure application by 
such insurer (that includes a certified copy of 
an approved licensure application as submitted 
by such insurer in the domicile State) to such 
State, such State has not approved or denied 
such application, such State’s health insurance 
licensure laws shall be temporarily preempted 
and the insurer shall be permitted to operate in 
such State, subject to the following terms: 
‘‘(i) APPLICATION OF NON-DOMICILE 
STATE LAW.—Except with respect to licen-
sure and with respect to the terms of sub-
title A of title XXXI of the Public Health 
Service Act (relating to rating and benefits 
as added by subtitle B of title II of the 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
Health Security for All Americans Act of 
2009), the laws and authority of the non- 
domicile State shall remain in full force 
and effect. 
‘‘(ii) REVOCATION OF PREEMPTION.— 
The preemption of a non-domicile State’s 
health insurance licensure laws pursuant to 
this subparagraph, shall be terminated 
upon the occurrence of either of the fol-
lowing: 
‘‘(I) APPROVAL
OR
DENIAL
OF 
APPLICATION.—The approval of denial 
of an insurer’s licensure application, 
following the laws and regulations of 
the non-domicile State with respect to 
licensure. 
‘‘(II) DETERMINATION OF MATE-
RIAL VIOLATION.—A determination by 
a non-domicile State that an insurer 
operating in a non-domicile State pur-
suant to the preemption provided for 
in this subparagraph is in material 
violation of the insurance laws (other 
than licensure and with respect to the 
terms of subtitle A of title XXXI of 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
the Public Health Service Act (relat-
ing to rating and benefits added by 
subtitle B of title II of the Health Se-
curity for All Americans Act of 2009)) 
of such State. 
‘‘(B) NO PROHIBITION ON PROMOTION.— 
Nothing in this paragraph shall be construed to 
prohibit a small business health plan or an in-
surer from promoting coverage prior to the ex-
piration of the 90-day period provided for in 
subparagraph (A), except that no enrollment or 
collection of contributions shall occur before the 
expiration of such 90-day period. 
‘‘(C) LICENSURE.—Except with respect to 
the application of the temporary preemption 
provision of this paragraph, nothing in this part 
shall be construed to limit the requirement that 
insurers issuing coverage to small business 
health plans shall be licensed in each State in 
which the small business health plans operate. 
‘‘(D) SERVICING
BY
LICENSED
INSUR-
ERS.—Notwithstanding subparagraph (C), the 
requirements of this subsection may also be sat-
isfied if the participating employers of a small 
business health plan are serviced by a licensed 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
insurer in that State, even where such insurer 
is not the insurer of such small business health 
plan in the State in which such small business 
health plan is domiciled. 
‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE-
LATED REQUIREMENTS. 
‘‘(a) FILING FEE.—Under the procedure prescribed 
pursuant to section 802(a), a small business 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 small business 
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 by regulation, at 
least the following information: 
‘‘(1) IDENTIFYING INFORMATION.—The names 
and addresses of— 
‘‘(A) the sponsor; and 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(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, health insurance issuer, and contract adminis-
trators and other service providers. 
‘‘(c) FILING
NOTICE
OF
CERTIFICATION
WITH 
STATES.—A certification granted under this part to a 
small business health plan shall not be effective unless 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
written notice of such certification is filed with the appli-
cable State authority of each State in which the small 
business health plans operate. 
‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 
of any small business 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. The applicable authority may re-
quire by regulation prior notice of material changes with 
respect to specified matters which might serve as the basis 
for suspension or revocation of the certification. 
‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER-
MINATION. 
‘‘A small business health plan which is or has been 
certified under this part may terminate (upon or at any 
time after cessation of accruals in benefit liabilities) only 
if the board of trustees, not less than 60 days before the 
proposed termination date— 
‘‘(1) provides to the participants and bene-
ficiaries a written notice of intent to terminate stat-
ing that such termination is intended and the pro-
posed termination date; 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(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. 
‘‘SEC. 809. IMPLEMENTATION AND APPLICATION AUTHOR-
ITY BY SECRETARY. 
‘‘The Secretary shall, through promulgation and im-
plementation of such regulations as the Secretary may 
reasonably determine necessary or appropriate, and in 
consultation with a balanced spectrum of effected entities 
and persons, modify the implementation and application 
of this part to accommodate with minimum disruption 
such changes to State or Federal law provided in this part 
and the (and the amendments made by such Act) or in 
regulations issued thereto. 
‘‘SEC. 810. DEFINITIONS AND RULES OF CONSTRUCTION. 
‘‘(a) DEFINITIONS.—For purposes of this part— 
‘‘(1) AFFILIATED MEMBER.—The term ‘affili-
ated member’ means, in connection with a sponsor— 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(A) a person who is otherwise eligible to 
be a member of the sponsor but who elects an 
affiliated status with the sponsor, or 
‘‘(B) in the case of a sponsor with mem-
bers which consist of associations, a person who 
is a member or employee of any such associa-
tion and elects an affiliated status with the 
sponsor. 
‘‘(2) APPLICABLE AUTHORITY.—The term ‘ap-
plicable authority’ means the Secretary of Labor, ex-
cept that, in connection with any exercise of the Sec-
retary’s authority with respect to which the Sec-
retary is required under section 506(d) to consult 
with a State, such term means the Secretary, in con-
sultation with such State. 
‘‘(3) 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. 
‘‘(4) GROUP HEALTH PLAN.—The term ‘group 
health plan’ has the meaning provided in section 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
733(a)(1) (after applying subsection (b) of this sec-
tion). 
‘‘(5) HEALTH
INSURANCE
COVERAGE.—The 
term ‘health insurance coverage’ has the meaning 
provided in section 733(b)(1), except that such term 
shall not include excepted benefits (as defined in sec-
tion 733(c)). 
‘‘(6) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning provided 
in section 733(b)(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. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(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 
market (as defined in section 2791(e)(5) of 
the Public Health Service Act) is regulated 
by such State. 
‘‘(8) MEDICAL CARE.—The term ‘medical care’ 
has the meaning provided in section 733(a)(2). 
‘‘(9) PARTICIPATING
EMPLOYER.—The term 
‘participating employer’ means, in connection with a 
small business health plan, any employer, if any in-
dividual who is an employee of such employer, a 
partner in such employer, or a self-employed indi-
vidual who is such employer (or any dependent, as 
defined under the terms of the plan, of such indi-
vidual) is or was covered under such plan in connec-
tion with the status of such individual as such an 
employee, partner, or self-employed individual in re-
lation to the plan. 
‘‘(10) SMALL EMPLOYER.—The term ‘small em-
ployer’ means, in connection with a group health 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
plan with respect to a plan year, a small employer 
as defined in section 2791(e)(4). 
‘‘(11) TRADE ASSOCIATION AND PROFESSIONAL 
ASSOCIATION.—The terms ‘trade association’ and 
‘professional association’ mean an entity that meets 
the requirements of section 1.501(c)(6)–1 of title 26, 
Code of Federal Regulations (as in effect on the 
date of enactment of this Act). 
‘‘(b) RULE OF CONSTRUCTION.—For purposes of de-
termining whether a plan, fund, or program is an em-
ployee welfare benefit plan which is a small business 
health plan, and for purposes of applying this title in con-
nection with such plan, fund, or program so determined 
to be such an employee welfare benefit plan— 
‘‘(1) in the case of a partnership, the term ‘em-
ployer’ (as defined in section 3(5)) includes the part-
nership in relation to the partners, and the term 
‘employee’ (as defined in section 3(6)) includes any 
partner in relation to the partnership; and 
‘‘(2) in the case of a self-employed individual, 
the term ‘employer’ (as defined in section 3(5)) and 
the term ‘employee’ (as defined in section 3(6)) shall 
include such individual. 
‘‘(c) RENEWAL.—Notwithstanding any provision of 
law to the contrary, a participating employer in a small 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
business health plan shall not be deemed to be a plan 
sponsor in applying requirements relating to coverage re-
newal. 
‘‘(d) HEALTH SAVINGS ACCOUNTS.—Nothing in this 
part shall be construed to create any mandates for cov-
erage of benefits for HSA-qualified health plans that 
would require reimbursements in violation of section 
223(c)(2) of the Internal Revenue Code of 1986.’’. 
(b) CONFORMING AMENDMENTS
TO PREEMPTION 
RULES.— 
(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 a small business 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 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
(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 
laws insofar as they may now or hereafter preclude a 
health insurance issuer from offering health insurance cov-
erage in connection with a small business health plan 
which is certified under part 8. 
‘‘(2) In any case in which health insurance coverage 
of any policy type is offered under a small business health 
plan certified under part 8 to a participating employer op-
erating in such State, the provisions of this title shall su-
persede any and all laws of such State insofar as they may 
establish rating and benefit requirements that would oth-
erwise apply to such coverage, provided the requirements 
of subtitle A of title XXXI of the Public Health Service 
Act (as added by title II of the Health Security for All 
Americans Act of 2009) (concerning health plan rating 
and benefits) are met.’’. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
(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 
person serving as the sponsor of a small business health 
plan under part 8.’’. 
(d) SAVINGS CLAUSE.—Section 731(c) of such Act 
is amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 
(e) 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: 
‘‘PART 8—RULES GOVERNING SMALL BUSINESS HEALTH PLANS 
‘‘801. Small business health plans. 
‘‘802. Alternative market pooling organizations. 
‘‘803. Certification of small business health plans. 
‘‘804. Requirements relating to sponsors and boards of trustees. 
‘‘805. Participation and coverage requirements. 
‘‘806. Other requirements relating to plan documents, contribution rates, and 
benefit options. 
‘‘807. Requirements for application and related requirements. 
‘‘808. Notice requirements for voluntary termination. 
‘‘809. Implementation and application authority by Secretary. 
‘‘810. Definitions and rules of construction.’’. 
SEC. 202. 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: 
‘‘(d) CONSULTATION WITH STATES WITH RESPECT 
TO SMALL BUSINESS HEALTH PLANS.— 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
‘‘(1) AGREEMENTS
WITH
STATES.—The Sec-
retary shall consult with the State recognized under 
paragraph (2) with respect to a small business 
health plan regarding the exercise of— 
‘‘(A) the Secretary’s authority under sec-
tions 502 and 504 to enforce the requirements 
for certification under part 8; and 
‘‘(B) the Secretary’s authority to certify 
small business health plans under part 8 in ac-
cordance with regulations of the Secretary ap-
plicable to certification under part 8. 
‘‘(2) RECOGNITION
OF
DOMICILE
STATE.—In 
carrying out paragraph (1), the Secretary shall en-
sure that only one State will be recognized, with re-
spect to any particular small business health plan, 
as the State with which consultation is required. In 
carrying out this paragraph such State shall be the 
domicile State, as defined in section 805(c).’’. 
SEC. 203. EFFECTIVE DATE AND TRANSITIONAL AND 
OTHER RULES. 
(a) EFFECTIVE DATE.—The amendments made by 
this subtitle shall take effect 12 months after the date of 
the enactment of this Act. The Secretary of Labor shall 
first issue all regulations necessary to carry out the 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
amendments made by this subtitle within 6 months after 
the date of the enactment of this Act. 
(b) 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 808(a)(2) 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-
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; 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
(B) the requirements of sections 801(a) 
and 803(a) of the Employee Retirement Income 
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 trustees which 
has control over 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-
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 or at such 
time that the arrangement provides coverage to par-
ticipants and beneficiaries in any State other than 
the States in which coverage is provided on such 
date of enactment. 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00045
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
not supercede any State law in a nonadopting State 
to the extent necessary to permit individuals or the 
insurance department of the State (or other State 
agency) to obtain relief under State law to require 
an eligible insurer to comply with the Model Small 
Group Rating Rules or transitional model small 
group rating rules. 
‘‘(4) NO EFFECT ON PREEMPTION.—In no case 
shall this part be construed to limit or affect in any 
manner the preemptive scope of sections 502 and 
514 of the Employee Retirement Income Security 
Act of 1974. In no case shall this part be construed 
to create any cause of action under Federal or State 
law or enlarge or affect any remedy available under 
the Employee Retirement Income Security Act of 
1974. 
‘‘(5) PREEMPTION LIMITED TO RATING.—Sub-
section (a) shall not preempt any State law that 
does not have a reference to or a connection with 
State rating rules that would otherwise apply to eli-
gible insurers. 
‘‘(c) EFFECTIVE DATE.—This section shall apply, at 
the election of the eligible insurer, beginning in the first 
plan year or the first calendar year following the issuance 
of the final rules by the Secretary under the Model Small 
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00063
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS
of a nonadopting State in connection with any conduct or 
action, or proposed conduct or action, by such officials or 
agents which violates, or which would if undertaken vio-
late, section 3133. 
‘‘(c) DIRECT FILING IN COURT OF APPEALS.—At the 
election of the eligible insurer, an action may be brought 
under subsection (b) directly in the United States Court 
of Appeals for the circuit in which the nonadopting State 
is located by the filing of a petition for review in such 
Court. 
‘‘(d) EXPEDITED REVIEW.— 
‘‘(1) DISTRICT COURT.—In the case of an ac-
tion brought in a district court of the United States 
under subsection (b), such court shall complete such 
action, including the issuance of a judgment, prior 
to the end of the 120-day period beginning on the 
date on which such action is filed, unless all parties 
to such proceeding agree to an extension of such pe-
riod. 
‘‘(2) COURT OF APPEALS.—In the case of an 
action brought directly in a United States Court of 
Appeal under subsection (c), or in the case of an ap-
peal of an action brought in a district court under 
subsection (b), such Court shall complete all action 
on the petition, including the issuance of a judg-
VerDate Nov 24 2008 
23:47 Jul 06, 2009
Jkt 059200
PO 00000
Frm 00097
Fmt 6652
Sfmt 6201
E:\BILLS\H3067.IH
H3067
tjames on PRODPC75 with BILLS