‘‘SEC. 702. CLARIFICATION OF DUTY OF THE SECRETARY TO
IMPLEMENT PROVISIONS OF CURRENT LAW
PROVIDING 
FOR 
EXEMPTIONS 
AND 
SOL-
VENCY 
STANDARDS 
FOR 
MULTIPLE 
EM-
PLOYER HEALTH PLANS.
‘‘(a) TREATMENT AS EMPLOYEE WELFARE BENEFIT
PLAN WHICH IS A GROUP HEALTH PLAN.—
‘‘(1) IN GENERAL.—A multiple employer wel-
fare arrangement—
‘‘(A) under which the benefits consist sole-
ly of medical care (disregarding such incidental
benefits as the Secretary shall specify by regu-
lation), and
‘‘(B) under which some or all benefits are
not fully insured,
shall be treated for purposes of subtitle A and the
other parts of this title as an employee welfare bene-
fit plan which is a group health plan if the arrange-
ment is exempt under section 514(b)(6)(B) in ac-
cordance with this part.
‘‘(2) EXCEPTION.—In the case of a multiple
employer welfare arrangement which would be de-
scribed in section 3(40)(A)(i) but solely for the fail-
ure to meet the requirements of section 3(40)(C)(ii),
paragraph (1) shall apply with respect to such ar-
rangement, but only with respect to benefits pro-
vided thereunder which constitute medical care.
‘‘(b) TREATMENT UNDER PREEMPTION RULES.—
‘‘(1) IN
GENERAL.—The Secretary shall pre-
scribe 
regulations 
described 
in 
section
514(b)(6)(B)(i), applicable to multiple employer wel-
fare arrangements described in subparagraphs (A)
and (B) of subsection (a)(1), providing a procedure
for 
granting 
exemptions 
from 
section
514(b)(6)(A)(ii) with respect to such arrangements.
Under such regulations, any such arrangement
treated under subsection (a) as an employee welfare
benefit plan shall be deemed to be an arrangement
described in section 514(b)(6)(B)(ii).
‘‘(2) STANDARDS.—Under the procedure pre-
scribed pursuant to paragraph (1), the Secretary
shall grant an arrangement described in subsection
(a) an exemption described in subsection (a) only if
the Secretary finds that—
‘‘(A) such exemption—
‘‘(i) is administratively feasible,
‘‘(ii) is not adverse to the interests of
the individuals covered under the arrange-
ment, and
‘‘(iii) is protective of the rights and
benefits of the individuals covered under
the arrangement,
‘‘(B) the application for the exemption
meets the requirements of paragraph (3), and
‘‘(C) the requirements of sections 703 and
704 are met with respect to the arrangement.
‘‘(3) INFORMATION TO BE INCLUDED IN APPLI-
CATION FOR EXEMPTION.—An application for an ex-
emption described in subsection (a) meets the re-
quirements of this paragraph only if it includes, in
a manner and form prescribed in regulations of the
Secretary, at least the following information:
‘‘(A) IDENTIFYING
INFORMATION.—The
names and addresses of—
‘‘(i) the sponsor, and
‘‘(ii) the members of the board of
trustees of the arrangement.
‘‘(B) STATES IN WHICH ARRANGEMENT IN-
TENDS TO DO BUSINESS.—The States in which
individuals covered under the arrangement are
to be located and the number of such individ-
uals expected to be located in each such State.
‘‘(C) BONDING REQUIREMENTS.—Evidence
provided by the board of trustees that the bond-
ing requirements of section 412 will be met as
of the date of the application or (if later) com-
mencement of operations.
‘‘(D) PLAN DOCUMENTS.—A copy of the
documents governing the arrangement (includ-
ing any bylaws and trust agreements), the sum-
mary plan description, and other material de-
scribing the benefits and coverage that will be
provided to individuals covered under the ar-
rangement.
‘‘(E) AGREEMENTS WITH SERVICE PROVID-
ERS.—A copy of any agreements between the
arrangement and contract administrators and
other service providers.
‘‘(F) FUNDING REPORT.—A report setting
forth information determined as of a date with-
in the 120-day period ending with the date of
the application, including the following:
‘‘(i) RESERVES.—A statement, cer-
tified by the board of trustees of the ar-
rangement, and a statement of actuarial
opinion, signed by a qualified actuary, that
all applicable requirements of section 705
are or will be met in accordance with regu-
lations which the Secretary shall prescribe.
‘‘(ii) ADEQUACY
OF
CONTRIBUTION
RATES.—A statement of actuarial opinion,
signed by a qualified actuary, which sets
forth a description of the extent to which
contribution rates are adequate to provide
for the payment of all obligations and the
maintenance of required reserves under the
arrangement for the 12-month period be-
ginning with such date within such 120-
day period, taking into account the ex-
pected coverage and experience of the ar-
rangement. If the contribution rates are
not fully adequate, the statement of actu-
arial opinion shall indicate the extent to
which the rates are inadequate and the
changes needed to ensure adequacy.
‘‘(iii) 
CURRENT
AND
PROJECTED
VALUE
OF
ASSETS
AND
LIABILITIES.—A
statement of actuarial opinion signed by a
qualified actuary, which sets forth the cur-
rent value of the assets and liabilities accu-
mulated under the arrangement and a pro-
jection of the assets, liabilities, income,
and expenses of the arrangement for the
12-month period referred to in clause (ii).
The income statement shall identify sepa-
rately the arrangement’s administrative ex-
penses and claims.
‘‘(iv) COSTS
OF
COVERAGE
TO
BE
CHARGED
AND
OTHER
EXPENSES.—A
statement of the costs of coverage to be
charged, 
including 
an 
itemization 
of
amounts for administration, reserves, and
other expenses associated with the oper-
ation of the arrangement.
‘‘(v) 
OTHER
INFORMATION.—Any
other information which may be prescribed
in regulations of the Secretary as nec-
essary to carry out the purposes of this
part.
‘‘(4) FILING FEE.—Under the procedure pre-
scribed pursuant to paragraph (1), a multiple em-
ployer welfare arrangement shall pay to the Sec-
retary at the time of filing an application for an ex-
emption referred to in subsection (a) a filing fee in
the amount of $5,000, which shall be available, to
the extent provided in appropriation Acts, to the
Secretary for the sole purpose of administering the
exemption procedures applicable with respect to such
arrangement.
sisting of medical care (provided directly, through insur-
ance or reimbursement, or otherwise) under any hospital
or medical service policy or certificate, hospital or medical
service plan contract, or health maintenance organization
group contract offered by an insurer or a health mainte-
nance organization.
‘‘(B) Such term does not include coverage under any
separate policy, certificate, or contract only for one or
more of any of the following:
‘‘(i) Coverage for accident, credit-only, vision,
disability income, long-term care, nursing home care,
community-based care dental, on-site medical clinics,
or employee assistance programs, or any combina-
tion thereof.
‘‘(ii) Medicare supplemental health insurance
(within the meaning of section 1882(g)(1) of the So-
cial Security Act (42 U.S.C. 1395ss(g)(1))) and
similar supplemental coverage provided under a
group health plan.
‘‘(iii) Coverage issued as a supplement to liabil-
ity insurance.
‘‘(iv) Liability insurance, including general li-
ability insurance and automobile liability insurance.
‘‘(v) Workers’ compensation or similar insur-
ance.