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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) ASSOCIATION HEALTH PLAN CEASE AND DE-
SIST ORDERS.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
upon application by the Secretary showing the oper-
ation, promotion, or marketing of an association 
health plan (or similar arrangement providing bene-
fits consisting of medical care (as defined in section 
733(a)(2))) that— 
‘‘(A) is not certified under part 8, is sub-
ject under section 514(b)(6) to the insurance 
laws of any State in which the plan or arrange-
ment offers or provides benefits, and is not li-
censed, 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,
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a district court of the United States shall enter an 
order requiring that the plan or arrangement cease 
activities. 
‘‘(2) EXCEPTION.—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 
paragraph (1) consist of health insurance cov-
erage; and 
‘‘(B) with respect to each State in which 
the plan or arrangement offers or provides ben-
efits, the plan or arrangement is operating in 
accordance with applicable State laws that are 
not superseded under section 514. 
‘‘(3) ADDITIONAL
EQUITABLE
RELIEF.—The 
court may grant such additional equitable relief, in-
cluding any relief available under this title, as it 
deems necessary to protect the interests of the pub-
lic 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) is amended by 
inserting ‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’, 
and by adding at the end the following new subsection:
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‘‘(b) 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.’’. 
SEC. 5. COOPERATION BETWEEN FEDERAL AND STATE AU-
THORITIES. 
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 ASSOCIATION HEALTH PLANS.— 
‘‘(1) AGREEMENTS
WITH
STATES.—The Sec-
retary shall consult with the State recognized under 
paragraph (2) with respect to an association 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 
association health plans under part 8 in accord-
ance with regulations of the Secretary applica-
ble to certification under part 8.
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‘‘(2) RECOGNITION
OF
PRIMARY
DOMICILE 
STATE.—In carrying out paragraph (1), the Sec-
retary shall ensure that only one State will be recog-
nized, with respect to any particular association 
health plan, as the State with which consultation is 
required. In carrying out this paragraph— 
‘‘(A) in the case of a plan which provides 
health insurance coverage (as defined in section 
812(a)(3)), such State shall be the State with 
which filing and approval of a policy type of-
fered by the plan was initially obtained, and 
‘‘(B) in any other case, 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 main-
tained.’’. 
SEC. 6. EFFECTIVE DATE AND TRANSITIONAL AND OTHER 
RULES. 
(a) EFFECTIVE DATE.—The amendments made by 
this Act shall take effect 1 year after the date of the enact-
ment of this Act. The Secretary of Labor shall first issue 
all regulations necessary to carry out the amendments 
made by this Act within 1 year after the date of the enact-
ment of this Act.