I 
108TH CONGRESS 
1ST SESSION 
H. R. 848
To amend the Employee Retirement Income Security Act of 1974, the Public 
Health Service Act, and the Internal Revenue Code of 1986 to require 
that group and individual health insurance coverage and group health 
plans provide for prompt payment for health benefits claims. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 13, 2003
Mr. SANDLIN introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committees on 
Education and the Workforce and Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
of such provisions as fall within the jurisdiction of the committee con-
cerned 
A BILL 
To amend the Employee Retirement Income Security Act 
of 1974, the Public Health Service Act, and the Internal 
Revenue Code of 1986 to require that group and indi-
vidual health insurance coverage and group health plans 
provide for prompt payment for health benefits claims.
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 Benefits Claims 
Prompt Payment Act of 2003’’.
SEC. 2. PROMPT PAYMENT OF CLAIMS. 
(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. PROMPT PAYMENT OF CLAIMS. 
‘‘(a) IN GENERAL.—A group health plan, and a 
health insurance issuer offering health insurance coverage 
in connection with a group health plan, shall provide for 
prompt payment of claims submitted for health care serv-
ices or supplies furnished to a participant, beneficiary, or 
enrollee with respect to benefits covered by the plan or 
issuer, in a manner that is no less protective than the pro-
visions referred to in subsection (b). 
‘‘(b) PROVISIONS.—The provisions referred to in this 
subsection are the provisions of section 1842(c)(2) of the 
Social Security Act (42 U.S.C. 1395u(c)(2)), as modified 
as follows: 
‘‘(1) ALTERNATIVE INTEREST RATE.—Instead 
of applying the interest rate calculated under section 
3902(a) of title 31, United States Code, the interest 
rate shall be 1 percent of the payment amount due 
plus, in the case of payments not made within 25 
days of the due date, an additional 1 percent inter-
est due for every month the payment is past due.
‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—
The reference in such section 1842(c)(2) to ‘not less 
than 95 percent of all claims submitted under this 
part’ shall be deemed to be a reference to ‘100 per-
cent of all claims submitted under the plan or cov-
erage involved’. 
‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State 
Insurance Commissioners may establish and impose mone-
tary penalties or other penalties for failure by a group 
health plan, and a health insurance issuer offering health 
insurance coverage in connection with a group health plan, 
to comply with the provisions referred to in subsection 
(b).’’. 
(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. PROMPT PAYMENT OF CLAIMS. 
‘‘(a) IN GENERAL.—A group health plan, and a 
health insurance issuer offering health insurance coverage 
in connection with a group health plan, shall provide for 
prompt payment of claims submitted for health care serv-
ices or supplies furnished to a participant or beneficiary 
with respect to benefits covered by the plan or issuer, in
a manner that is no less protective than the provisions 
referred to in subsection (b). 
‘‘(b) PROVISIONS.—The provisions referred to in this 
subsection are the provisions of section 1842(c)(2) of the 
Social Security Act (42 U.S.C. 1395u(c)(2)), as modified 
as follows: 
‘‘(1) ALTERNATIVE INTEREST RATE.—Instead 
of applying the interest rate calculated under section 
3902(a) of title 31, United States Code, the interest 
rate shall be 1 percent of the payment amount due 
plus, in the case of payments not made within 25 
days of the due date, an additional 1 percent inter-
est due for every month the payment is past due. 
‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—
The reference in such section 1842(c)(2) to ‘not less 
than 95 percent of all claims submitted under this 
part’ shall be deemed to be a reference to ‘100 per-
cent of all claims submitted under the plan or cov-
erage involved’. 
‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State 
Insurance Commissioners may establish and impose mone-
tary penalties or other penalties for failure by a group 
health plan, and a health insurance issuer offering health 
insurance coverage in connection with a group health plan,
to comply with the provisions referred to in subsection 
(b).’’. 
(B) 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. Prompt payment of claims.’’.
(3) 
INTERNAL
REVENUE
CODE
AMEND-
MENTS.—Subchapter B of chapter 100 of the Inter-
nal 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. Prompt payment of claims.’’; and
(ii) by inserting after section 9812 the 
following: 
‘‘SEC. 9813. PROMPT PAYMENT OF CLAIMS. 
‘‘A group health plan shall provide for prompt pay-
ment of claims submitted for health care services or sup-
plies furnished to a participant or beneficiary with respect 
to benefits covered by the plan, in a manner that is no 
less protective than the provisions referred to in subsection 
(b). 
‘‘(b) PROVISIONS.—The provisions referred to in this 
subsection are the provisions of section 1842(c)(2) of the 
Social Security Act (42 U.S.C. 1395u(c)(2)), as modified 
as follows:
‘‘(1) ALTERNATIVE INTEREST RATE.—Instead 
of applying the interest rate calculated under section 
3902(a) of title 31, United States Code, the interest 
rate shall be 1 percent of the payment amount due 
plus, in the case of payments not made within 25 
days of the due date, an additional 1 percent inter-
est due for every month the payment is past due. 
‘‘(2) COVERAGE OF 100 PERCENT OF CLAIMS.—
The reference in such section 1842(c)(2) to ‘not less 
than 95 percent of all claims submitted under this 
part’ shall be deemed to be a reference to ‘100 per-
cent of all claims submitted under the plan involved’. 
‘‘(c) PERMITTING ADDITIONAL PENALTIES.—State 
Insurance Commissioners may establish and impose mone-
tary penalties or other penalties for failure by a group 
health plan to comply with the provisions referred to in 
subsection (b).’’.
(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. PROMPT PAYMENT OF CLAIMS. 
‘‘The provisions of section 2707 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 coverage offered by a health insurance
issuer in connection with a group health plan in the small 
or large group market.’’. 
(c) PROTECTION OF STATES’ RIGHTS.—Any issue re-
lating to prompt payment for health care services or sup-
plies that is not governed by any provision of law as 
amended by this section shall be governed by otherwise 
applicable State or Federal law. This section (and the pro-
visions amended by this section) does not preempt or su-
persede any law that imposes shorter time frames for pay-
ment, greater penalties for non-payment, and, in general, 
provides greater assurances that group health plans and 
health insurance issuers provide for prompt payment of 
claims submitted for health care services or supplies fur-
nished to a participant, beneficiary, or enrollee with re-
spect to benefits covered by the plan or issuer. 
(d) EFFECTIVE DATES.—
(1) 
GROUP
HEALTH
PLANS
AND
GROUP 
HEALTH INSURANCE COVERAGE.—The amendments 
made by subsection (a) apply with respect to group 
health plans for plan years beginning on or after 
January 1, 2004. 
(2) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—The amendment made by subsection (b) 
apply with respect to health insurance coverage of-
fered, sold, issued, renewed, in effect, or operated in 
the individual market on or after such date.
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