119
‘‘(2) PREMIUM
CHARGES
WITHIN
SELF-IN-
SURED
HEALTH
BENEFIT
PLANS.—A self-insured
health benefit plan may not vary premiums charged
based on the health status, claims experience, receipt
of health care, medical history, or lack of evidence
of insurability, of an individual.
‘‘(b) TREATMENT OF PRE-EXISTING CONDITION EX-
CLUSIONS FOR ALL SERVICES.—
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this subsection, a health benefit plan
may exclude coverage with respect to services related
to treatment of a pre-existing condition, but the pe-
riod of such exclusion may not exceed 6 months.
‘‘(2) NONAPPLICATION
TO
NEWBORNS.—The
exclusion of coverage permitted under paragraph (1)
shall not apply to services furnished to newborns.
‘‘(3) CREDITING OF PREVIOUS COVERAGE.—
‘‘(A) IN GENERAL.—If an individual is in
a period of continuous coverage (as defined in
subparagraph (B)(i)) with respect to particular
services as of the date of initial coverage under
a plan, any period of exclusion of coverage with
respect to a pre-existing condition for such serv-
ices or type of services shall be reduced by 1
120
month for each month in the period of continu-
ous coverage.
‘‘(B) DEFINITIONS.—In this paragraph:
‘‘(i) PERIOD
OF
CONTINUOUS
COV-
ERAGE.—The term ‘period of continuous
coverage’ means, with respect to particular
services, the period beginning on the date
an individual is enrolled under a health
benefit plan or program (including the
medicare program, a State plan under title
XIX, continuation coverage under section
4980B of the Internal Revenue Code of
1986, or a State general medical assistance
program) which provides the same or sub-
stantially similar benefits with respect to
such services and ends on the date the in-
dividual is not so enrolled for a continuous
period of more than 3 months.
‘‘(ii) PRE-EXISTING CONDITION.—The
term ‘pre-existing condition’ means, with
respect to coverage under a plan, a condi-
tion which has been diagnosed or treated
during the 3-month period ending on the
day before the first date of such coverage,
except that such term does not include a
121
condition which was first diagnosed or
treated during a period of continuous cov-
erage.
‘‘(C) STANDARDS
FOR
SIMILAR
BENE-
FITS.—The Secretary shall establish such cri-
teria for determining if benefits are substan-
tially similar as may be necessary to carry out
this subsection.
‘‘(c) EXCLUSION
OF
COLLECTIVELY
BARGAINED
HEALTH BENEFIT PLANS.—In the case of a health bene-
fit plan established or maintained under or pursuant to
one or more collective bargaining agreements, the plan
may exclude from coverage individuals who are not cov-
ered under the plan or pursuant to one of such collective
bargaining agreements.
‘‘(d) SMALL EMPLOYERS CANNOT OFFER SELF-IN-
SURED PLANS.—
‘‘(1) IN GENERAL.—No health benefit plan of a
small employer may be certified under this title un-
less such plan is an insured health benefit plan.
‘‘(2) SMALL EMPLOYER DEFINED.—
‘‘(A) IN GENERAL.—In paragraph (1), the
term ‘small employer’ means, with respect to a
plan year, an employer that normally employs
122
more than 1 but less than 101 eligible employ-
ees on a typical business day during such year.
‘‘(B) ELIGIBLE EMPLOYEE.—For purposes
of subparagraph (A), the term ‘eligible em-
ployee’ means, with respect to an employer, an
employee who normally performs on a monthly
basis at least 171⁄2 hours of service per week for
that employer. For the purposes of this para-
graph, the term ‘employee’ includes a self-em-
ployed individual.
‘‘(3) CONTROLLED GROUPS.—For purposes of
paragraph (2)—
‘‘(A) CONTROLLED
GROUP
OF
CORPORA-
TIONS.—All corporations which are members of
the same controlled group of corporations shall
be treated as 1 person. For purposes of the pre-
ceding sentence, the term ‘controlled group of
corporations’ has the meaning given to such
term by section 1563(a) of the Internal Reve-
nue Code of 1986, except that—
‘‘(i) ‘more than 50 percent’ shall be
substituted for ‘at least 80 percent’ each
place it appears in section 1563(a)(1) of
such Code, and
123
‘‘(ii) the determination shall be made
without regard to subsections (a)(4) and
(e)(3)(C) of section 1563 of such Code.
‘‘(B) PARTNERSHIPS, PROPRIETORSHIPS,
ETC., WHICH ARE UNDER COMMON CONTROL.—
Under regulations prescribed by the Secretary
of the Treasury, all trades or business (whether
or not incorporated) which are under common
control shall be treated as 1 person. The regu-
lations prescribed under this subparagraph shall
be based on principles similar to the principles
which apply in the case of subparagraph (A).
‘‘(4) EXCEPTION.—Paragraph (1) shall not
apply to a health benefit plan that is exempt from
treatment as a multiple employer welfare benefit
plan because of section 3(40)(A)(ii) of the Employee
Retirement Income Security Act of 1974.
‘‘SEC. 2104. STANDARDS APPLICABLE ONLY TO INSURED
HEALTH BENEFIT PLANS.
‘‘(a) OPEN ENROLLMENT.—
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this subsection, a carrier that offers an
insured health benefit plan to individuals residing
(or to groups located) in a State must offer the
same plan to any other resident of (or group located
124
in) the State. Such requirement shall apply on a
continuous, year-round basis.
‘‘(2) RESTRICTIONS OF ENROLLMENT IN THE
CASE OF CERTAIN ASSOCIATION COVERAGE.—In the
case of an insured health benefit plan offered
through an association which is composed exclusively
of employers (which may include self-employed indi-
viduals) and which has been formed for purposes
other than obtaining health insurance, the carrier is
not required to offer the plan to individuals or em-
ployers who are not employees of such employers or
self-employed members of the association, or their
dependents.
‘‘(3) TREATMENT
OF
HEALTH
MAINTENANCE
ORGANIZATIONS.—
‘‘(A) 
GEOGRAPHIC
LIMITATIONS.—A
health maintenance organization may deny en-
rollment with respect to an individual if the in-
dividual is residing outside the service area of
the organization, but only if such denial is ap-
plied uniformly without regard to health status
or insurability.
‘‘(B) SIZE LIMITS.—A health maintenance
organization may apply to the Secretary to
cease enrolling new employer groups or individ-