I
105TH CONGRESS
2D SESSION
H. R. 4709
To amend the Public Health Service Act, the Employee Retirement Income
Security Act of 1974, and the Internal Revenue Code of 1986 to require
a health insurance issuer to notify all participants and beneficiaries
if a group health plan fails to pay premiums necessary to maintain
coverage, and provide a conversion option for such participants and
beneficiaries if the plan is terminated.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 6, 1998
Mrs. THURMAN (for herself, Mr. STARK, Mr. KUCINICH, and Mr. DAVIS of
Florida) introduced the following bill; which was referred to the Commit-
tee on Commerce, and in addition to the Committees on Ways and
Means, and Education and the Workforce, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provi-
sions 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 require a health insurance
issuer to notify all participants and beneficiaries if a
group health plan fails to pay premiums necessary to
maintain coverage, and provide a conversion option for
such participants and beneficiaries if the plan is termi-
nated.
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 ‘‘Beneficiary Notifica-
tion Rights Act of 1998’’.
SEC. 2. NOTIFICATION TO PARTICIPANTS AND BENE-
FICIARIES.
(a) GROUP HEALTH PLANS.—
(1) PUBLIC
HEALTH
SERVICE
ACT
AMEND-
MENTS.—(A) 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. 2706. NOTIFICATION TO PARTICIPANTS AND BENE-
FICIARIES.
‘‘(a) REQUIREMENT.—If a health insurance issuer of-
fering group health insurance coverage intends to termi-
nate coverage or allow a policy to lapse because a group
health plan failed to pay to the issuer premiums necessary
to maintain coverage, the issuer shall, not later than 30
days prior to the date of termination or policy lapse, pro-
vide written notice to all participants and beneficiaries in-
dicating the termination date of such coverage. The issuer
may not terminate coverage retroactively.
‘‘(b) CONVERSION OPTION.—In a case in which a
health insurance issuer terminates health insurance cov-
erage offered in connection with a group health plan be-
cause a group health plan failed to pay to the issuer pre-
miums necessary to maintain coverage, the issuer shall,
for a period of 180 days beginning on the termination
date, provide to all participants and beneficiaries the op-
tion of enrollment under a conversion health plan.
‘‘(c) NOTICE.—A group health plan under this part
shall comply with the notice requirement under section
713(c) 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.’’.
(B) Section 2723(c) of such Act (42 U.S.C.
300gg–23(c)), as amended by section 604(b)(2) of
Public Law 104–204, is amended by striking ‘‘sec-
tion 2704’’ and inserting ‘‘sections 2704 and 2706’’.
(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. 713. NOTIFICATION TO PARTICIPANTS AND BENE-
FICIARIES.
‘‘(a) REQUIREMENT.—If a health insurance issuer of-
fering group health insurance coverage intends to termi-
nate coverage or allow a policy to lapse because a group
health plan failed to pay to the issuer premiums necessary
to maintain coverage, the issuer shall, not later than 30
days prior to the date of termination or policy lapse, pro-
vide written notice to all participants and beneficiaries in-
dicating the termination date of such coverage. The issuer
may not terminate coverage retroactively.
‘‘(b) CONVERSION OPTION.—In a case in which a
health insurance issuer terminates health insurance cov-
erage offered in connection with a group health plan be-
cause a group health plan failed to pay to the issuer pre-
miums necessary to maintain coverage, the issuer shall,
for a period of 180 days beginning on the termination
date, provide to all participants and beneficiaries the op-
tion of enrollment under a conversion health plan.
‘‘(c) NOTICE UNDER GROUP HEALTH PLAN.—A
group health plan, and a health insurance issuer providing
health insurance coverage in connection with a group
health plan, shall provide notice to each participant and
beneficiary under such plan regarding the imposition of
the requirements of this section in accordance with regula-
tions promulgated by the Secretary. Such notice shall be
in writing and prominently positioned in any literature or
correspondence made available or distributed by the plan
or issuer and shall be transmitted upon enrollment and
annually thereafter, with the first notice required in the
first mailing made by the plan or issuer to the participant
or beneficiary after the date of the enactment of the Bene-
ficiary Notification Rights Act of 1998.’’.
(B) Section 731(c) of such Act (29 U.S.C.
1191(c)), as amended by section 603(b)(1) of Public
Law 104–204, is amended by striking ‘‘section 711’’
and inserting ‘‘sections 711 and 713’’.
(C) Section 732(a) of such Act (29 U.S.C.
1191a(a)), as amended by section 603(b)(2) of Pub-
lic Law 104–204, is amended by striking ‘‘section
711’’ and inserting ‘‘sections 711 and 713’’.
(D) The table of contents in section 1 of such
Act is amended by inserting after the item relating
to section 712 the following new item:
‘‘Sec. 713. Notification to participants and beneficiaries.’’.
(3) 
INTERNAL
REVENUE
CODE
AMEND-
MENTS.—Subchapter B of chapter 100 of the Inter-
nal Revenue Code of 1986 (as amended by section
1531(a) of the Taxpayer Relief Act of 1997) is
amended—
(A) in the table of sections, by inserting after
the item relating to section 9803 the following new
item:
‘‘Sec. 9804. Notification to participants and beneficiaries.’’; and
(B) by inserting after section 9803 the follow-
ing:
‘‘SEC. 9804. NOTIFICATION TO PARTICIPANTS AND BENE-
FICIARIES.
‘‘(a) IN GENERAL.—If a health insurance issuer of-
fering group health insurance coverage intends to termi-
nate coverage or allow a policy to lapse because a group
health plan failed to pay to the issuer premiums necessary
to maintain coverage, the issuer shall, not later than 30
days prior to the date of termination or policy lapse, pro-
vide written notice to all participants and beneficiaries in-
dicating the termination date of such coverage. The issuer
may not terminate coverage retroactively.
‘‘(b) CONVERSION OPTION.—In a case in which a
health insurance issuer terminates health insurance cov-
erage offered in connection with a group health plan be-
cause a group health plan failed to pay to the issuer pre-
miums necessary to maintain coverage, the issuer shall,
for a period of 180 days beginning on the termination
date, provide to all participants and beneficiaries the op-
tion of enrollment under a conversion health plan.’’.
(b) EFFECTIVE DATES.—The amendments made by
subsection (a) shall apply with respect to group health
plans or health insurance coverage offered in connection
with group health plans for plan years beginning on or
after January 1, 1999.
(c) COORDINATED REGULATIONS.—Section 104(1) of
Health Insurance Portability and Accountability Act of
1996 is amended by striking ‘‘this subtitle (and the
amendments made by this subtitle and section 401)’’ and
inserting ‘‘the provisions of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of
1974, the provisions of parts A and C of title XXVII of
the Public Health Service Act, and chapter 100 of the In-
ternal Revenue Code of 1986’’.
Æ