I
106TH CONGRESS
2D SESSION
H. R. 3765
To amend the Public Health Service Act, the Employee Retirement Income
Security Act of 1974, and the Internal Revenue Code of 1986 to prevent
group and individual health insurance coverage and group health plans
from seeking to recover more than their costs in cases of third party
recoveries.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 29, 2000
Mr. WISE introduced the following bill; which was referred to the Committee’s
on Commerce, and in addition to the Committees on Education and the
Workforce, and Ways and Means, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend the Public Health Service Act, the Employee Re-
tirement Income Security Act of 1974, and the Internal
Revenue Code of 1986 to prevent group and individual
health insurance coverage and group health plans from
seeking to recover more than their costs in cases of
third party recoveries.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Health Insurance Li-
ability Recovery Protection Act of 2000’’.
SEC. 2. PATIENT PROTECTION IN CASE OF THIRD PARTY
RECOVERIES.
(a) GROUP HEALTH PLANS.—
(1) PUBLIC
HEALTH
SERVICE
ACT
AMEND-
MENTS.—Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at
the end the following new section:
‘‘SEC. 2707. STANDARD RELATING TO PATIENT PROTEC-
TION IN CASE OF THIRD PARTY RECOVERIES.
‘‘(a) REQUIREMENT.—A group health plan, and a
health insurance issuer offering group health insurance
coverage, may not recover (or seek to recover) from a par-
ticipant or beneficiary more than the amounts expended
by the plan or issuer on behalf of the participant or bene-
ficiary in the case of amounts recovered by such a partici-
pant or beneficiary as a result of a settlement or judgment
in a liability or other action.
‘‘(b) NOTICE.—A group health plan under this part
shall comply with the notice requirement under section
714(b) of the Employee Retirement Income Security Act
of 1974 with respect to the requirements of this section
as if such section applied to such plan.’’.
(2) ERISA AMENDMENTS.—(A) Subpart B of
part 7 of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974 is amended by
adding at the end the following new section:
‘‘SEC. 714. STANDARD RELATING TO PATIENT PROTECTION
IN CASE OF THIRD PARTY RECOVERIES.
‘‘(a) REQUIREMENT.—A group health plan, and a
health insurance issuer offering group health insurance
coverage, may not recover (or seek to recover) from a par-
ticipant or beneficiary more than the amounts expended
by the plan or issuer on behalf of the participant or bene-
ficiary in the case of amounts recovered by such a partici-
pant or beneficiary as a result of a settlement or judgment
in a liability or other action.
‘‘(b) NOTICE UNDER GROUP HEALTH PLAN.—The
imposition of the requirement of this section shall be treat-
ed as a material modification in the terms of the plan de-
scribed in section 102(a)(1), for purposes of assuring no-
tice of such requirements under the plan; except that the
summary description required to be provided under the
last sentence of section 104(b)(1) with respect to such
modification shall be provided by not later than 60 days
after the first day of the first plan year in which such
requirement apply.’’.
(B) Section 732(a) of such Act (29 U.S.C.
1191a(a)) is amended by striking ‘‘section 711’’ and
inserting ‘‘sections 711 and 714’’.
(C) The table of contents in section 1 of such
Act is amended by inserting after the item relating
to section 713 the following new item:
‘‘Sec. 714. Standard relating to patient protection in case of third party recov-
eries.’’.
(3) 
INTERNAL
REVENUE
CODE
AMEND-
MENTS.—
(A) IN GENERAL.—Subchapter B of chap-
ter 100 of the Internal Revenue Code of 1986
is amended—
(i) in the table of sections, by insert-
ing after the item relating to section 9812
the following new item:
‘‘Sec. 9813. Standard relating to patient protection in case of
third party recoveries.’’; and
(ii) by inserting after section 9812 the
following:
‘‘SEC. 9813. STANDARD RELATING TO PATIENT PROTEC-
TION IN CASE OF THIRD PARTY RECOVERIES.
‘‘A group health plan may not recover (or seek to re-
cover) from a participant or beneficiary more than the
amounts expended by the plan on behalf of the participant
or beneficiary in the case of amounts recovered by such
a participant or beneficiary as a result of a settlement or
judgment in a liability or other action.’’.
(B) CONFORMING
AMENDMENT.—Section
4980D(d)(1) of such Code is amended by strik-
ing ‘‘section 9811’’ and inserting ‘‘sections
9811 and 9813’’.
(b) INDIVIDUAL HEALTH INSURANCE.—Part B of
title XXVII of the Public Health Service Act is amended
by inserting after section 2752 the following new section:
‘‘SEC. 2753. STANDARD RELATING PATIENT PROTECTION IN
CASE OF THIRD PARTY RECOVERIES.
‘‘(a) IN
GENERAL.—The provisions of section
2707(a) shall apply to health insurance coverage offered
by a health insurance issuer in the individual market in
the same manner as they apply to health insurance cov-
erage offered by a health insurance issuer in connection
with a group health plan in the small or large group mar-
ket.
‘‘(b) NOTICE.—A health insurance issuer under this
part shall comply with the notice requirement under sec-
tion 714(b) of the Employee Retirement Income Security
Act of 1974 with respect to the requirements referred to
in subsection (a) as if such section applied to such issuer
and such issuer were a group health plan.’’.
(c) EFFECTIVE DATES.—
(1) 
GROUP
HEALTH
PLANS
AND
GROUP
HEALTH INSURANCE COVERAGE.—Subject to para-
graph (3), the amendments made by subsection (a)
apply with respect to group health plans for plan
years beginning on or after January 1, 2001.
(2) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—The amendment made by subsection (b)
applies with respect to health insurance coverage of-
fered, sold, issued, renewed, in effect, or operated in
the individual market on or after such date.
(3) COLLECTIVE BARGAINING EXCEPTION.—In
the case of a group health plan maintained pursuant
to 1 or more collective bargaining agreements be-
tween employee representatives and 1 or more em-
ployers ratified before the date of enactment of this
Act, the amendments made subsection (a) shall not
apply to plan years beginning before the later of—
(A) the date on which the last collective
bargaining agreements relating to the plan ter-
minates (determined without regard to any ex-
tension thereof agreed to after the date of en-
actment of this Act), or
(B) January 1, 2002.
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining
agreement relating to the plan which amends the
plan solely to conform to any requirement added by
subsection (a) shall not be treated as a termination
of such collective bargaining agreement.
(d) COORDINATION OF ADMINISTRATION.—The Sec-
retary of Labor, the Secretary of the Treasury, and the
Secretary of Health and Human Services shall ensure,
through the execution of an interagency memorandum of
understanding among such Secretaries, that—
(1) regulations, rulings, and interpretations
issued by such Secretaries relating to the same mat-
ter over which two or more such Secretaries have re-
sponsibility under the provisions of this Act (and the
amendments made thereby) are administered so as
to have the same effect at all times; and
(2) coordination of policies relating to enforcing
the same requirements through such Secretaries in
order to have a coordinated enforcement strategy
that avoids duplication of enforcement efforts and
assigns priorities in enforcement.
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