142
‘‘(A) during the first effective year (as de-
fined in subsection (c)), the premium rate for
any employer may be as much as, but may not
exceed, 150 percent of the reference premium
rate for such plans in the same community for
similar benefits in the same block of business,
or
‘‘(B) during the second effective year, the
premium rate for any employer may be as much
as, but may not exceed, 122 percent of the ref-
erence premium rate for such plans in the same
community for similar benefits in the same
block of business.
‘‘(3) ESTABLISHMENT
OF
BLOCKS
OF
BUSI-
NESS.—For the purpose of establishing premiums
for small employer health plans with similar cov-
erage, the small employer carrier may establish
blocks of business based only on one or more of the
following characteristics:
‘‘(A) Plans that are marketed by clearly
different sales forces.
‘‘(B) Plans that have been acquired from
another carrier as a distinct group.
‘‘(C) Plans that are managed care plans.
143
‘‘(D) Plans within another distinct group,
if the applicable regulatory authority finds that
establishment of such a group will enhance the
efficiency and fairness of the small employer in-
surance marketplace.
‘‘(c) EFFECTIVE YEARS DEFINED.—In this section,
the terms ‘first effective year’ and ‘second effective year’
mean 1995 and 1996, respectively.
‘‘SEC. 2305. BASIC BENEFIT PACKAGE FOR SMALL EM-
PLOYER HEALTH PLANS.
‘‘(a) BENEFITS AND COST-SHARING IN QUALIFIED
HEALTH PLANS.—Except as provided in subsection (b),
no small employer health plan may be issued to a small
employer by a carrier unless—
‘‘(1) the plan provides for benefits for all re-
quired health services (as defined in section
2211(a));
‘‘(2) the plan does not impose cost-sharing with
respect to required health services in excess of the
deductibles and coinsurance permitted under title
XXI with respect to such services (not taking into
account any low-income assistance under part E of
title XXII); and
‘‘(3) the carrier makes available to the employer
a small employer health plan that, subject to sub-
144
section (b), only provides the benefits for required
health services and the maximum cost-sharing con-
sistent with paragraphs (1) and (2).
‘‘(b) ADDITIONAL, OPTIONAL MINIMUM SERVICES.—
In meeting the requirement of subsection (a)(3), a small
employer health plan may include such additional items
and services as the small employer carrier can dem-
onstrate to the satisfaction of the applicable regulatory au-
thority that inclusion of such items and services will facili-
tate appropriate hospital discharges or avoid unnecessary
hospitalization.
‘‘SEC. 2306. MISCELLANEOUS DISCLOSURE AND RECORD-
KEEPING REQUIREMENTS FOR SMALL EM-
PLOYER HEALTH PLANS.
‘‘(a) DISCLOSURE TO EMPLOYERS.—
‘‘(1) GENERAL DISCLOSURE.—Each small em-
ployer carrier shall disclose to each small employer
before issuing a small employer health plan the fol-
lowing:
‘‘(A) The availability (pursuant to the re-
quirement of section 2305(a)(3)) of a plan in-
cluding only required health services.
‘‘(B) The limits, imposed under section
2304, on the premiums permitted to be charged
for such plans.
145
‘‘(C) The rights of guaranteed issue and
renewability provided under section 2303.
Such disclosure shall be in addition to any disclosure
required generally of qualified health plans under
section 2158(a)(2).
‘‘(2) SPECIFIC DISCLOSURE UPON REQUEST.—
Each small employer carrier shall disclose to each
small employer, upon request, information concern-
ing the blocks of business established with respect to
small employer health plans and the applicable pre-
miums for such plans.
‘‘(3) 
STANDARD
FORMAT.—The 
disclosure
under paragraph (1) shall be made in a uniform for-
mat established by the Secretary, after consultation
with the NAIC.
‘‘(b) INFORMATION FILED WITH APPLICABLE REGU-
LATORY AUTHORITY.—
‘‘(1) IN GENERAL.—Each small employer car-
rier shall disclose to the applicable regulatory au-
thority, in a manner specified by the Secretary, in-
formation concerning—
‘‘(1) blocks of business established, and
‘‘(2) applicable premiums for small employer
health plans.
146
‘‘(2) ADDITIONAL
INFORMATION.—Nothing in
this subsection shall be construed as limiting the in-
formation which an applicable regulatory authority
may require to be reported by small employer car-
riers.
‘‘SEC. 2307. NONAPPLICATION IN PUERTO RICO AND THE
TERRITORIES.
‘‘This title shall not apply outside the 50 States or
the District of Columbia.
‘‘SEC. 2308. DEFINITIONS.
‘‘(a) HEALTH PLAN AND OTHER DEFINITIONS RE-
LATING TO HEALTH PLANS.—In this title:
‘‘(1) HEALTH PLAN.—The term ‘health plan’
means any hospital or medical expense incurred pol-
icy or certificate, hospital or medical service plan
contract, health maintenance subscriber contract,
other employee welfare plan (as defined in the Em-
ployee Retirement Income Security Act of 1964), or
any other health insurance arrangement, but does
not include—
‘‘(A) accident-only, credit, dental, or dis-
ability income insurance,
‘‘(B) coverage issued as a supplement to li-
ability insurance,