I
103D CONGRESS
1ST SESSION
H. R. 3652
To improve the competitiveness, efficiency, and fairness of health coverage
for individuals and small employers through promoting the development
of voluntary Health Plan Purchasing Cooperatives.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 22, 1993
Mrs. JOHNSON of Connecticut (for herself, Mr. THOMAS of California, Mr.
MCMILLAN, and Mr. GUNDERSON) introduced the following bill; which
was referred jointly to the Committees on Energy and Commerce and
Ways and Means
A BILL
To improve the competitiveness, efficiency, and fairness of
health coverage for individuals and small employers
through promoting the development of voluntary Health
Plan Purchasing Cooperatives.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Health Plan Purchasing Cooperative Act of 1993’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Establishment of standards; application in States.
Sec. 3. Specification of health plan purchasing cooperative areas.
Sec. 4. Establishment of health plan purchasing cooperatives.
Sec. 5. Functions of health plan purchasing cooperatives.
Sec. 6. Accountable Health Plans.
Sec. 7. Qualifications for qualified health insurance plans.
Sec. 8. Marketing qualified health benefit plans.
Sec. 9. Collection and submission of data.
Sec. 10. Risk adjustment mechanism.
Sec. 11. Role of State; oversight; evaluation.
Sec. 12. Description of medisave coverage.
Sec. 13. Tax treatment of medisave coverage.
Sec. 14. Definitions.
SEC. 2. ESTABLISHMENT OF STANDARDS; APPLICATION IN
STATES.
(a) ESTABLISHMENT OF STANDARDS.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall establish standards under this
Act to carry out the requirements of this Act, in-
cluding standards relating to—
(A) the establishment of Health Plan Pur-
chasing Cooperatives,
(B) qualifications for Accountable Health
Plans,
(C) the roles of States under this Act, and
(D) standard benefit package for small
employers.
(2) DEADLINE.—The Secretary shall establish
and publish such standards by not later than 6
months after the date of the enactment of this Act.
(3) REVISION.—The Secretary from time to
time may revise standards established under this
subsection. Such revisions shall only become effective
in a manner that permits States sufficient time to
change laws and regulations in order to implement
such revisions.
(b) 
APPLICATION
OF
STANDARDS
THROUGH
STATES.—
(1) APPLICATION OF STANDARDS.—
(A) IN GENERAL.—Subject to subsection
(c), each State shall submit to the Secretary, by
the deadline specified in subparagraph (B), a
report on steps the State is taking to establish
and operate Health Plan Purchasing Coopera-
tives in accordance with the standards estab-
lished under subsection (a) in all parts of the
State, and to conform its insurance laws to
meet the requirements of this Act, not later
than such deadline.
(B) DEADLINE FOR REPORT.—
(i) 1 YEAR AFTER STANDARDS ESTAB-
LISHED.—Subject to clause (ii), the dead-
line under this subparagraph is 1 year
after the date the standards are estab-
lished under subsection (a).
(ii) EXCEPTION FOR LEGISLATION.—
In the case of a State which the Secretary
identifies, in consultation with the National
Association of Insurance Commissioners,
as—
(I) requiring State legislation
(other than legislation appropriating
funds) in order for insurers and
health plans offered to meet the
standards 
established 
under 
sub-
section (a), but
(II) having a legislature which is
not scheduled to meet in 1995 in a
legislative session in which such legis-
lation may be considered,
the date specified in this subparagraph is
the first day of the first calendar quarter
beginning after the close of the first legis-
lative session of the State legislature that
begins on or after January 1, 1996. For
purposes of the previous sentence, in the
case of a State that has a 2-year legislative
session, each year of such session shall be
deemed to be a separate regular session of
the State legislature.
(2) FEDERAL ROLE.—If the Secretary deter-
mines that a State has failed to submit a report by
the deadline specified under paragraph (1) or finds
that the State has not established and have in oper-
ation Health Plan Purchasing Cooperatives in ac-
cordance with the standards established under sub-
section (a), the Secretary shall notify the State and
provide the State a period of 60 days in which to
submit such report or to comply with such standards
under such paragraph. If, after such 60-day period,
the Secretary finds that such a failure has not been
corrected, the Secretary shall provide for such mech-
anism for the establishment and operation of Health
Plan Purchasing Cooperatives in accordance with
such standards in the State as the Secretary deter-
mines to be appropriate. Such implementation shall
take effect with respect to insurers, and health plans
offered or renewed, on or after 3 months after the
date of the Secretary’s finding under the previous
sentence, and until the date the Secretary finds that
such a failure has been corrected.
(c) WAIVER OF APPLICATION IN A STATE.—Sub-
section (b) shall not apply in a State if the State dem-
onstrates to the satisfaction of the Secretary that the
State has established an alternative method for assuring
access of every eligible individual and eligible employee to
health coverage.
(d) IMPLEMENTATION.—The report under subsection
(b) shall specify the State official (or officials), or State
board, commission, or department, responsible for carry-
ing out the standards under subsection (a).
SEC. 3. SPECIFICATION OF HEALTH PLAN PURCHASING
COOPERATIVE AREAS.
(a) IN GENERAL.—Each State shall establish bound-
aries for health plan purchasing cooperative areas in the
State.
(b) STANDARDS.—Each part of the State shall be in
one, and only one, health plan purchasing cooperative
area. Each such area shall include a sufficient number of
potential enrollees, health care providers, and Accountable
Health Plans to carry out the purposes of this Act.
(c) REVISIONS.—A State may revise the boundaries
of health plan purchasing cooperative areas not more fre-
quently than annually.
SEC. 4. ESTABLISHMENT OF HEALTH PLAN PURCHASING
COOPERATIVES.
(a) IN GENERAL.—Each State shall establish in ac-
cordance with this section one or more State-chartered,
nonprofit private organizations to serve as the Health
Plan Purchasing Cooperatives for each health plan pur-
chasing cooperative area specified under section 3 for the
benefit of small employers and eligible individuals in the
area.
(b) BYLAWS AND BOARD OF DIRECTORS.—
(1) BYLAWS.—Each Health Plan Purchasing
Cooperative shall establish bylaws, consistent with
this section, for its operation, including the election
of members of its board of directors.
(2) BOARD OF DIRECTORS.—
(A) IN GENERAL.—Each Health Plan Pur-
chasing Cooperative shall operate under the su-
pervision of a board of directors. A majority of
the members of the board shall be small em-
ployers or eligible individuals that participate in
the Cooperative.
(B) APPOINTMENT AND ELECTION.—The
State shall provide for the appointment of ini-
tial members to the board of directors of each
Health Plan Purchasing Cooperative. Subse-
quent members of the board of directors of a
Health Plan Purchasing Cooperative shall be
elected by small employer members and individ-
ual members of the Cooperative in accordance
with bylaws of the Cooperative. Such elections
shall occur not less frequently than once every
2 years.
(3) LIMITATION ON LIABILITY.—There shall be
no liability on the part of, and no cause of action of
any nature shall arise against, any member of the
board of directors of a Health Plan Purchasing Co-
operative, or its employees or agent, for any action
taken in good faith by them in the performance of
duties of plan purchasing cooperatives specified in
this Act.
(c) OFFICERS AND EMPLOYEES.—Each Health Plan
Purchasing Cooperative shall provide, consistent with its
bylaws, for—
(1) the appointment of officers from among its
members, and
(2) the appointment of an executive director to
serve as the chief operating officer of the Coopera-
tive.
(d) ADVISORY COMMITTEES.—Each Health Plan
Purchasing Cooperative shall establish such advisory com-
mittees as may be necessary to assist in carrying out its
duties under this Act. Such an advisory committee may
include representation from Accountable Health Plans,
agents, and health care providers.
(e) ANNUAL
REPORT; RECORDS; AUDIT.—Each
Health Plan Purchasing Cooperative shall—
(1) prepare, and submit to the State and the
Secretary, an annual report on its operations, in-
cluding its program and financial operations;
(2) conduct such annual internal and independ-
ent audits as it determines to be appropriate; and
(3) maintain records on its operations.
(f) GENERAL AUTHORITIES; LIMITATIONS ON AU-
THORITY.—
(1) IN GENERAL.—A Health Plan Purchasing
Cooperative may—
(A) sue (or be sued), and
(B) subject to paragraph (2), accept and
expend grants or funds from any public or pri-
vate agency.
(2) LIMITATIONS.—A Health Plan Purchasing
Cooperative may not—
(A) purchase health care services;
(B) assume risk for the cost or provision
of health care services;
(C) contract directly with health care pro-
viders (other than with Accountable Health
Plans under section 5) for the provision of
health care services for members; or
(D) accept any funds from any private
agency that is (or is affiliated with) an Ac-
countable Health Plan or other party that
would pose a conflict of interest (as specified by
the Secretary).
SEC. 5. FUNCTIONS OF HEALTH PLAN PURCHASING CO-
OPERATIVES.
(a) CONTRACTS
WITH
ACCOUNTABLE
HEALTH
PLANS; ENROLLMENT IN PLANS.—
(1) CONTRACTS
WITH
PLANS.—Each Health
Plan Purchasing Cooperative shall enter into con-
tracts and hold policies with Accountable Health
Plans which elect to offer qualified health benefit
benefits to members, in accordance with subsection
(d).
(2) ENROLLMENT.—
(A) IN GENERAL.—Each Health Plan Pur-
chasing Cooperative shall provide for the enroll-
ment of eligible employees of small employers
and eligible individuals in qualified health bene-
fit plans of Accountable Health Plans offered
by the Cooperative.
(B) OPEN ENROLLMENT PERIODS.—Each
Health Plan Purchasing Cooperative shall pro-
vide for an annual open enrollment period of 30
days to be available within 60 days before the
anniversary date of each member’s coverage
under a qualified health benefit plan.
(3) 
PROVISION
OF
INFORMATION.—Each
Health Plan Purchasing Cooperative shall provide to
its members and eligible employees of small em-
ployer members comparison sheets, in accordance
with standards established by the Secretary, which
provide clear standardized information on each Ac-
countable Health Plan and each qualified health
benefit plan offered by an Accountable Health Plan,
including information on price, consumer satisfac-
tion, and (if feasible) health outcomes and enroll-
ment and enrollee responsibilities and obligations.
(b) MEMBERSHIP REQUIREMENTS.—
(1) IN GENERAL.—Each Health Plan Purchas-
ing Cooperative shall establish requirements for par-
ticipation of small employers and eligible individuals
as members of the Cooperative consistent with any
standards the Secretary establishes consistent with
this subsection. Each Cooperative shall maintain eli-
gibility records to carry out its functions.
(2) SMALL
EMPLOYER
STANDARDS.—Under
such standards—
(A) each small employer in the area that
meets requirements for membership is per-
mitted to become a member;
(B) a small employer that is not a valid
small employer group and was formed for the
purpose of securing health benefits coverage
shall be denied membership;
(C) each small employer member shall
offer to eligible employees a choice of at least
3 different health insurance plans, of which—
(i) at least one provides medisave cov-
erage consistent with section 12,
(ii) at least one is a fee-for-service
plan, and
(iii) at least one is a managed care
plan;
(D) no small employer is required, as a
condition of membership, to make any contribu-
tion towards the premium for coverage of any
eligible employee; and
(E) if a small employer member terminates
coverage purchased through the Health Plan
Purchasing Cooperative, the former member
shall be ineligible to purchase a health insur-
ance plan through the Cooperative for a period
of 12 months.
(3) INDIVIDUAL MEMBERS.—Under such stand-
ards, eligible individuals residing in a health plan
purchasing cooperative area may become individual
members of the Health Plan Purchasing Cooperative
for the area.
(4) PAYMENT OF PREMIUMS.—
(A) IN
GENERAL.—A Health Plan Pur-
chasing Cooperative may condition membership
upon prepayment of a monthly premium (or
compliance with other mechanisms) to assure
that payment will be made for coverage of
members on a timely basis.
(B) NOTIFICATION
OF
FAILURE
TO
RE-
CEIVE PREMIUM.—If a Health Plan Purchasing
Cooperative fails to receive payment on a pre-
mium due with respect to an individual covered
under an Accountable Health Plan offered by
the Cooperative, the Cooperative shall provide
notice of such failure to the individual within
the 20-day period after the date on which such
premium payment was due.
(C) DIRECT PAYMENT ALLOWED IN CASE
OF
EMPLOYER
NONPAYMENT.—In the case a
small employer member of a Cooperative fails to
make payment of premiums due with respect to
an eligible employee covered under an Account-
able Health Plan offered through the Coopera-
tive, the Cooperative shall notify such employee
of such nonpayment and shall allow the em-
ployee to make direct payments to the Coopera-
tive effective with the next succeeding payment
period.
(5) DISPUTE RESOLUTION PROCEDURES.—Each
Health Plan Purchasing Cooperative shall establish,
in accordance with standards established under this
Act dispute resolution procedures to resolve disputes
between the Cooperative and its members and dis-
putes between the Cooperative and Accountable
Health Plans. Under such procedures, a member or
Cooperative may appeal the proposed resolution of
such a dispute to the State.
(c) CONTRACTS WITH MEMBERS.—
(1) PREMIUM PAYMENTS.—
(A) IN GENERAL.—Each contract between
a member and a Health Plan Purchasing Coop-
erative shall provide that payment of all pre-
miums shall be transmitted by the member
(which in the case of a small employer member
shall be on behalf of eligible employees) to (or
on behalf of) the Cooperative for the benefit of
the Accountable Health Plan in which the eligi-
ble employee or individual is enrolled. The Co-
operative shall provide for procedures for the
collection of premiums from members (includ-
ing, in the case of a small employer member, el-
igible employees).
(B) AT
LEAST
BIMONTHLY.—Such pre-
miums are payable not less often than bi-
monthly.
(C) LATE CHARGES.—A Health Plan Pur-
chasing Cooperative may provide for penalties
for late payment.
(D) NONPAYMENT.—Nonpayment of pre-
miums by a member shall constitute a breach of
the contract, a breach of the health care policy,
and a default on the member’s obligation.
(2) CONTRACT HOLDER.—Such a contract shall
provide that the Health Plan Purchasing Coopera-
tive may be the contract holder of the health benefit
policy on behalf of the member (including eligible
employees). Any such contract shall provide that all
eligible employees who obtain coverage under the
health benefit plan offered by a small employer must
obtain such coverage through any qualified health
benefit plan offered by an Accountable Health Plan
through the Cooperative.
(3) PREMIUM AMOUNTS.—The amount of pre-
miums imposed shall include an amount that in-
cludes the fixed overhead allowance percentage es-
tablished by the Health Plan Purchasing Coopera-
tive under subsection (e).
(d) CONTRACTS WITH PLANS.—
(1) IN GENERAL.—Each contract between an
Accountable Health Plan and a Health Plan Pur-
chasing Cooperative shall provide—
(A) that premiums of members shall be
forwarded to the plan in which they are en-
rolled, subject to any adjustment under section
10, on the effective date of coverage (if that oc-
curs more than once a month), on a monthly
basis, or as agreed in the contract (but in no
event less frequently than monthly); and
(B) that the Cooperative shall transmit en-
rollment and eligibility information to the plan
on a timely basis.
(2) TERMINATION.—An Accountable Health
Plan may not terminate such a contract unless the
plan—
(A) provides advance notice to the Health
Plan Purchasing Cooperative, and
(B) provides notice at least 180 days be-
fore the nonrenewal of any qualified health ben-
efit plan to enrollees.
In the case of such a termination, the Accountable
Health Plan shall not write new business with the
Health Plan Purchasing Cooperative for a period of
3 years from the date of the notice of termination.
(e) OVERHEAD ALLOWANCE.—Each Health Plan
Purchasing Cooperative shall establish a fixed overhead al-
lowance percentage that shall be—
(1) applied as addition to the premiums
charged for enrollment in an Accountable Health
Plan offered through the Cooperative to its mem-
bers, and
(2) used to cover administrative costs of the Co-
operative, as well as defaults by members of pre-
mium payments.
(f) UNIFORM ADMINISTRATIVE
AND ACCOUNTING
PROCEDURES.—Each Health Plan Purchasing Coopera-
tive shall establish with such uniform administrative and
accounting procedures as needed to conform with applica-
ble national standards identified by the Secretary.
(g) CONTRACTS FOR ADMINISTRATIVE SERVICES.—
(1) IN GENERAL.—Each Health Plan Purchas-
ing Cooperative shall contract with a qualified, inde-
pendent third party for any service necessary to
carry out its duties under this Act. Such contracts
shall include—
(A) contracts with agents to assist in con-
tracting with Accountable Health Plans and
small employer members, and
(B) contracts to market and publicize the
availability of qualified health benefit plans
through the Cooperative.
(2) INFORMATION.—Unless permission is spe-
cifically granted by the Cooperative, such a third
party may not release, publish, or otherwise use any
information to which the party has access under its
contract.
(g) CONSTRUCTION.—Nothing in this Act shall be
construed as requiring a small employer or eligible individ-
ual to obtain coverage from or through a Health Plan Pur-
chasing Cooperative.
SEC. 6. ACCOUNTABLE HEALTH PLANS.
(a) DESIGNATION.—Each State shall establish a
process whereby a carrier that demonstrates to the satis-
faction of the State insurance commissioner that it has
the capability to fulfill the following requirements (directly
or through subcontracts) is designated as an Accountable
Health Plan for purposes of this Act:
(1) LICENSURE.—The carrier is licensed and in
good standing with the State insurance commis-
sioner (or other comparable official for a State).
(2) ADMINISTRATIVE
CAPACITY.—The carrier
has the capacity to administer qualified health bene-
fit plans.
(3) ACCESS.—In the case of a carrier with a
contractual obligation to provide or arrange for
health services included in the qualified health bene-
fit plan, the ability to provide enrollees with ade-
quate access to these covered services within the car-
rier’s service area.
(4) GRIEVANCE PROCEDURES.—The carrier has
grievance procedures, including the ability to re-
spond to enrollees’ calls, questions, and complaints.
(5) 
UTILIZATION
MANAGEMENT
PROCE-
DURES.—The carrier has established utilization
management procedures.
(6) QUALITY.—The carrier has the ability to
monitor and evaluate the quality and cost-effective-
ness of care.
(7) INFORMATION.—The carrier has the ability
to provide information on enrollee satisfaction
(based on standard surveys described in section
9(b)(4)).
(8) DATA.—The carrier has the ability to pro-
vide standard data elements (identified under section
9(b)).
(b) 
FUNCTIONS
OF
ACCOUNTABLE
HEALTH
PLANS.—
(1) IN GENERAL.—In every Health Plan Pur-
chasing Cooperative with which it has a contract
under section 5(d), each Accountable Health Plan
shall provide for activities described in this sub-
section.
(2) OFFERING PLAN.—Each such Accountable
Health Plan shall offer qualified health benefit
plans. If such a Plan offers a managed care plan in
a State (or geographic area) to employers that are
not small employers, the Plan shall offer a similar
managed care plan to small employers in that State
or geographic area.
(3) PERFORMANCE INFORMATION.—Each such
Accountable Health Plan shall provide for the collec-
tion and reporting to the State and to the appro-
priate Health Plan Purchasing Cooperative of infor-
mation on the performance of the plan regarding the
effectiveness in providing services, identified under
section 9(b).
(4) USE OF ADJUSTED COMMUNITY RATING.—
Each such Accountable Health Plan shall—
(A) establish premium rates for each quali-
fied health benefit plan pursuant to a method
that spreads financial risk across a large popu-
lation and allows adjustments only for benefit
design and the following demographic charac-
teristics: age, gender, number of family mem-
bers, and the health plan purchasing coopera-
tive area in which coverage is provided; and
(B) file on a quarterly basis with the
Health Plan Purchasing Cooperative in which it
is participating the premium rates for qualified
health benefit plans offered by the Plan.
(5) RATING, UNDERWRITING, ETC.—Each such
Accountable Health Plan shall comply with all rules
regarding rating, underwriting, claims handling,
sales, solicitation, licensing, unfair trade practices,
and other provision in this Act and under the appli-
cable insurance laws of the State.
(6) GUARANTEED ISSUE AND REISSUE.—Each
such Accountable Health Plan shall issue coverage
under a qualified health benefit plan to any eligible
individual and any eligible employee (of a small em-
ployer member) who elects to be covered under a
qualified health benefit plan offered by the plan in
the manner required under this Act.
(7) RENEWAL.—Each such Accountable Health
Plan shall renew each qualified health benefit plan
with respect to any member (and any eligible em-
ployee of such a member) except in the case of—
(A) nonpayment of the required premium,
(B) fraud or material misrepresentation of
the member (or employee) or the member’s or
employee’s dependents, and
(C) repeated misuse of a provider network
provision (including unreasonable refusal of the
enrollee to follow a prescribed course of treat-
ment, excessive use of emergency services for
non-emergencies, or violation of contractual
provisions), as specified by the State in which
the plan is offered.
(8) NOTICE OF TERMINATION OF COOPERATIVE
CONTRACT.—Each such Accountable Health Plan
may only terminate its contract with the Cooperative
in accordance with section 5(d)(2).
(9) GRIEVANCE PROCEDURES.—Each such Ac-
countable Health Plan shall provide a procedure for
(A) the eligible individual or employee (or
dependent) does not reside within the plan’s
service area (as approved by the State insur-
ance commissioner);
(B) the plan provides 90 days prior notice
that it will not have the capacity to deliver serv-
ices adequately in the health plan purchasing
cooperative area to additional enrollees because
of its obligations to existing groups and enroll-
ees; or
(C) the State insurance commissioner de-
termines that the acceptance of an application
or applications would place the plan in a finan-
cially impaired condition.
(3) CONDITIONS.—
(A) INSUFFICIENT
CAPACITY.—An Ac-
countable Health Plan that cannot offer cov-
erage under paragraph (2)(B) may not offer
coverage to the employees of a new employer
group until the later of 90 days following such
refusal or the date on which the plan notifies
the Health Plan Purchasing Cooperative and
the State insurance commissioner that it has
regained capacity to deliver services to eligible
employees and their dependents in the service
area.
(B) FINANCIAL
IMPAIRMENT.—An Ac-
countable Health Plan that cannot offer cov-
erage under paragraph (2)(C) may not offer
coverage or accept applications for any individ-
ual or employer group until a determination by
the State insurance commissioner that accept-
ance of an application will not put the plan in
a financially impaired condition.
(d) CONSTRUCTION.—Nothing in this Act (or in
State law) shall—
(1) prohibit an Accountable Health Plan from
providing a qualified health benefit plan in a Health
Plan Purchasing Cooperative through a managed
care system, and from contracting with particular
health care providers or types, classes, or categories
of health care providers;
(2) prohibit such a plan from establishing its
own levels of payment and financial incentives for
reimbursing health care providers providing health
care services to enrollees; or
(3)(A) prohibit such a plan from performing
utilization review of any or all treatments and condi-
tions, (B) require the use of specified standards of
health care practice in such review, (C) impose resi-
dency or specialty restrictions on the entities con-
ducting such a review, or (D) require the disclosure
of the specific criteria used in such reviews.
State law is preempted to the extent it is inconsistent with
the previous sentence.
(e) DEEMED COMPLIANCE.—Carriers which comply
with any of the requirements of a paragraph of subsection
(a) through a requirement of State law shall be deemed
to be in compliance with the corresponding paragraph of
such subsection. Carriers receiving accreditation by na-
tionally recognized, health related accreditation organiza-
tions (including the National Committee on Quality Assur-
ance, the Utilization Review Accreditation Commission,
the Joint Commission on Accreditation of Health Care Or-
ganizations), or qualification by Federal agencies, shall be
deemed in compliance with the requirements of subsection
(a) as they pertain to the relevant accreditation activities
of such organizations.
(f) DETERMINATIONS.—Each State shall provide for
a determination of whether a carrier is an Accountable
Health Plan within 30 days of a completed application
being submitted to the State.
(g) TERMINATION.—After notice and hearing, a
State may suspend or revoke the designation as an Ac-
countable Health Plan of a carrier that files to maintain
compliance with the requirements in subsections (a), (b),
and (c).
SEC. 7. QUALIFICATIONS FOR QUALIFIED HEALTH INSUR-
ANCE PLANS.
(a) IN GENERAL.—A health plan is not a qualified
health benefit plan for purposes of this Act unless the
plan—
(1) meets applicable financial requirements es-
tablished under State law;
(2) is marketed only in accordance with section
8; and
(3) submits to the Health Plan Purchasing Co-
operative data in accordance with standards estab-
lished under section 9.
(b) MARKETING
MATERIAL; AGENT
COMPENSA-
TION.—
(1) IN GENERAL.—An Accountable Health Plan
may provide, directly or through an agent, broker,
contractor, or producer, marketing materials ap-
proved by the State insurance commissioner. Such a
plan does not require authorization by a Health Plan
Purchasing Cooperative for advertisement to the
public at large through the means of mass media.
(2) AGENT
COMPENSATION.—An Accountable
Health Plan may not vary compensation or commis-
sions to such an agent, broker, contractor, or pro-
ducer based, directly or indirectly, on the anticipated
or actual claims experience or health status associ-
ated with particular small employers or eligible indi-
viduals to which each plan is sold.
(3) LIMITATIONS ON BROKER ACTIVITIES.—No
Accountable Health Plan (or agent, broker, contrac-
tor, or producer for such a plan) shall engage, di-
rectly, or indirectly, in any activity or marketing
practice that would encourage small employers or el-
igible individuals to refrain from enrolling in the
plan, or seek coverage from another Accountable
Health Plan, because of the health status or claims
experience of the employer or individual.
SEC. 8. MARKETING QUALIFIED HEALTH BENEFIT PLANS.
(a) IN GENERAL.—Each Health Plan Purchasing Co-
operative shall use efficient and standardized means to no-
tify small employers of the availability of health coverage
through the Cooperative.
(b) MARKETING MATERIALS.—Each Health Plan
Purchasing Cooperative shall make available to small em-
ployer and individual members marketing materials that
accurately summarizes the benefit plans, cost and other
relevant information concerning Accountable Health Plans
offered by the Cooperative.
(c) USE OF BROKERS.—Nothing in this Act shall be
construed to prohibit a Health Plan Purchasing Coopera-
tive or Accountable Health Plan from using the services
of an agent, broker, contractor, or producer in order to
assist in marketing.
(d) MONITORING.—Each Health Plan Purchasing
Cooperative shall notify the State insurance commissioner
(or other official identified by the State) of any marking
practices or materials that it finds contrary to the fair
and affirmative marketing of Accountable Health Plans
under this Act.
(e) STATE ROLE.—Each State insurance commis-
sioner shall monitor compliance with the marketing re-
quirements of this Act, including the conduct of agents,
brokers, contractors, and producers and investigate com-
plaints of violations of such requirements.
SEC. 9. COLLECTION AND SUBMISSION OF DATA.
(a) FROM HEALTH PLAN PURCHASING COOPERA-
TIVES TO STATES.—Each Health Plan Purchasing Coop-
erative shall submit such data to the State, on a quarterly
basis, as the Secretary may specify. Such data shall in-
clude the following:
(1) With respect to small employer members—
(A) employer enrollment by employer size,
industry sector, previous insurance status, and
number of eligible employees within each small
employer, and
(B) number of total eligible employers in
the health plan purchasing cooperative area.
(2) With respect to eligible individuals, the de-
mographic characteristics of such individuals, includ-
ing age, gender, employment status and employment
sector, and previous insurance status.
(3) Premium ranges for each qualified health
benefit plan for Health Plan Purchasing Cooperative
member categories.
(4) Cooperative overhead charges.
(5) Cooperative financial statements.
(b) COLLECTION OF DATA BY HEALTH PLAN PUR-
CHASING COOPERATIVES.—
(1) IN GENERAL.—The Secretary shall establish
uniform standards for data that a Health Plan Pur-
chasing 
Cooperative 
collects 
from 
Accountable
Health Plans and providers and disseminates.
(2) COLLECTION.—Under such standards, each
Health Plan Purchasing Cooperative shall collect
only such data as are necessary for evaluation of the
performance of Accountable Health Plans and their
provider networks by consumers and providers. The
Secretary shall establish such standards consistent
with the method of operation of Accountable Health
Plans, consistent with national health care data col-
lection initiatives, consistent with not imposing an
unreasonable cost of compliance on Accountable
Health Plans, and only after a study of the feasibil-
ity and cost-effectiveness.
(3) DISSEMINATION.—Under such standards,
each Health Plan Purchasing Cooperative shall re-
lease such data in a uniform and standardized for-
mat which compares all Accountable Health Plans or
providers (as the case may be).
(4) ENROLLEE
SATISFACTION
SURVEYS.—All
enrollee satisfaction surveys used by Accountable
Health Plans in reporting to Health Plan Purchas-
ing Cooperatives shall be in a standardized format
promulgated by the Secretary.
SEC. 10. RISK ADJUSTMENT MECHANISM.
(a) MONITORING NEED.—Each State shall designate
an entity to monitor adverse selection in enrollment among
qualified health benefit plans offered through Health Plan
Purchasing Cooperatives and the need for risk adjustment
mechanisms to assure proper payment incentives to Ac-
countable Health Plans.
(b) ESTABLISHMENT.—If there is a need, a State
shall provide for the use of risk adjustment mechanisms
(consistent with a model among the models identified
under standards established under section 2) to adjust
payment amounts among Accountable Health Plans to re-
flect the risk covered by each qualified health benefit plan
offered by such a plan. A State shall also apply such a
mechanism to health benefit plans sold to small employers
and eligible individuals, other than through a Health Plan
Purchasing Cooperative, if necessary.
SEC. 11. ROLE OF STATE; OVERSIGHT; EVALUATION.
(a) OVERSIGHT.—Each State shall—
(1) assure compliance of Health Plan Purchas-
ing Cooperatives, small employers, and eligible em-
ployees and individuals with the requirements of this
Act, and
(2) conduct reviews, not less frequently than
annually, on the performance of each Health Plan
Purchasing Cooperative in assuring access to health
coverage to small employer and eligible individuals in
the health plan purchasing cooperative area in ac-
cordance with this Act.
(b) DISPUTE RESOLUTION.—Each State shall re-
ceive, review, and act on appeals of disputes, between a
Health Plan Purchasing Cooperative and a member, not
resolved by the Cooperative under section 5(b)(5).
(c) ASSURING AVAILABILITY OF COVERAGE TO ELI-
GIBLE INDIVIDUALS AND COMPARABLE TREATMENT IN
AND OUT OF COOPERATIVES.—Each State shall provide
by law that no qualified health benefit plan may be offered
with respect to a small employer, or to individuals, in the
State unless—
(1) it is offered to all small employers or eligi-
ble individuals (as the case may be) who are located
or reside in the State in the service area of the plan;
(2) it meets standards relating to guaranteed
renewability and limitations on the application of
pre-existing condition limitations; and
(3) it—
(A) meets standards relating to rating
practices, consistent with section 6(b)(4)(A),
and
(B) is offered to all small employers or eli-
gible individuals (as the case may be) at a pre-
mium rate that is the same (regardless of
whether offered inside or outside a Health Plan
Purchasing Cooperative), not taking into ac-
count any broker’s fees or commissions.
(d) ANALYSIS OF INFORMATION.—Each State shall
analyze information collected from Accountable Health
Plans and other sources and report findings that assist
consumers, Health Plan Purchasing Cooperatives, Ac-
countable Health Plans, or health care providers in im-
proving the delivery or purchase of cost-effective health
care.
(e) DISSEMINATION OF INFORMATION.—Each State
shall prepare and make available to Health Plan Purchas-
ing Cooperatives and employers located in the State (and
to eligible individuals upon request) information, in com-
parative form, concerning the qualified health benefit
plans in such State and Health Plan Purchasing Coopera-
tives operating in the State. Such information shall in-
clude a description of the following:
(1) Such Cooperatives in the State and the
qualified health benefit plans of Accountable Health
Plans available with respect to each Cooperative.
(2) The existence of Health Plan Purchasing
Cooperatives within each health plan purchasing co-
operative area.
(3) Any other information determined appro-
priate by the State.
(f) ANNUAL REPORT.—Each State shall report to the
Secretary, at such frequency (not more often than annu-
ally) as the Secretary may specify, on the impact of the
reforms under this Act in expanding the availability and
affordability of health coverage to eligible employees and
eligible individuals.
(g) ANTITRUST PROTECTION.—Each State shall ac-
tively supervise Health Plan Purchasing Cooperatives to
ensure that actions that affect market competition accom-
plish the objectives of this Act, so as to provide State and
Federal protection to such Cooperatives and the board of
directors of such Cooperatives against Federal and State
laws intended to protect commerce from unlawful re-
straints, monopolies, and unfair business practices.
SEC. 12. DESCRIPTION OF MEDISAVE COVERAGE.
(a) IN GENERAL.—For purposes of this Act, a health
insurance plan is considered to provide medisave coverage
consistent with this section if such plan consists of—
(1) a qualified catastrophic health plan (as de-
fined in subsection (b)(1)), and
(2)(A) there is a fixed dollar amount (in the
form of a cash-value annuity) of additional benefits
under such plan which does not exceed the plan’s
qualified catastrophic deductible (as defined in sub-
section (b)(2));