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State to offer a group health plan or an individual
health plan.
(9) HEALTH STATUS.—The term ‘‘health sta-
tus’’ includes. with respect to an individual, medical
condition, claims experience, receipt of health care,
medical history, genetic information, evidence of in-
surability (including conditions arising out of acts of
domestic violence), or disability.
(10) PARTICIPANT.—The term ‘‘participant’’
has the meaning given such term under section 3(7)
of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(7)).
(11) PLAN SPONSOR.—The term ‘‘plan spon-
sor’’ has the meaning given such term under section
3(16)(B) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1002(16)(B)).
(12) SECRETARY.—The term ‘‘Secretary’’, un-
less specifically provided otherwise, means the Sec-
retary of Labor.
(13) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, Puerto
Rico, the United States Virgin Islands, Guam,
American Samoa, and the Commonwealth of the
Northern Mariana Islands.
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Subtitle A—Group Market Rules
SECTION 101. GUARANTEED AVAILABILITY OF HEALTH
COVERAGE.
In General.—
(1) NONDISCRIMINATION.—Except as provided
in subsection (b), section 102 and section 103—
(A) a health plan issuer offering a group
health plan may not decline to offer whole
group coverage to a group purchaser desiring to
purchase such coverage; and
(B) an employee health benefit plan or a
health plan issuer offering a group health plan
may establish eligibility, continuation of eligi-
bility, enrollment, or premium; contribution re-
quirements under the terms of such plan, ex-
cept that such requirements shall not be based
on health status (as defined in section 100(9)).
(2) HEALTH
PROMOTION
AND
DISEASE
PRE-
VENTION.—Nothing in this subsection shall prevent
an employee health benefit plan or a health plan is-
suer from establishing premium; discounts or modi-
fying otherwise applicable copayments or deductibles
in return for adherence to programs of health pro-
motion and disease prevention.
(b) APPLICATION OF CAPACITY LIMITS.—
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(1) IN GENERAL.—Subject to paragraph (2), a
health plan issuer offering a group health plan may
cease offering coverage to group purchasers under
the plan if—
(A) the health plan issuer ceases to offer
coverage to any additional group purchasers;
and
(B) the health plan issuer can demonstrate
to the applicable certifying authority (as defined
in section 142(d)), if required, that its financial
or provider capacity to serve previously covered
participants and beneficiaries (and additional
participants and beneficiaries who will be ex-
pected to enroll because of their affiliation with
a group purchaser or such previously covered
participants or beneficiaries) will be impaired if
the health plan issuer is required to offer cov-
erage to additional group purchasers.
Such health plan issuer shall be prohibited from of-
fering coverage after a cessation in offering coverage
under this paragraph for a 6-month period or until
the health plan issuer can demonstrate to the appli-
cable certifying authority (as defined in section
142(d)) that the health plan issuer has adequate ca-
pacity, whichever is later.
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(2) FIRST-COME-FIRST-SERVED.—A health plan
issuer offering a group health plan is only eligible to
exercise the limitations provided for in paragraph
(1) if the health plan issuer offers coverage to group
purchasers under such plan on a first-come-first-
served basis or other basis established by a State to
ensure a fair opportunity to enroll in the plan and
avoid risk selection.
(e) CONSTRUCTION.—
(1) MARKETING OF GROUP HEALTH PLANS.—
Nothing in this section shall be construed to prevent
a State from requiring health plan issuers offering
group health plans to actively market such plans.
(2) 
INVOLUNTARY
OFFERING
OF
GROUP
HEALTH PLANS.—Nothing is this section shall be
construed to require a health plan issuer to involun-
tarily offer group health plans in a particular mar-
ket. For the purposes of this paragraph, the term
‘‘market’’ means either the large employer market or
the small employer market (as defined under appli-
cable State law, or if not so defined, an employer
with not more than 50 employees).
SEC. 102. GUARANTEED RENEWABILITY OF HEALTH COV-
ERAGE.
(a) IN GENERAL.—
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(1) GROUP
PURCHASER.—Subject to sub-
sections (b) and (c), a group health plan shall be re-
newed or continued in force by a health plan issuer
at the option of the group purchaser, except that the
requirement of this subparagraph shall not apply in
the case of—
(A) the nonpayment of premiums or con-
tributions by the group purchaser in accordance
with the terms of the group health plan or
where the health plan issuer has not received
timely premium payments;
(B) fraud or misrepresentation of material
fact on the part of the group purchaser;
(C) the termination of the group health
plan in accordance with subsection (b); or
(D) the failure of the group purchaser to
meet contribution or participation requirements
in accordance with paragraph (3).
(2) PARICIPANT.—Subject to subsections (b)
and (c), coverage under an employee health benefit
plan or group health plan shall be renewed or con-
tinued in force, if the group purchaser elects to con-
tinue to provide coverage under such plan, at the op-
tion of the participant (or beneficiary where such
right exists under the terms of the plan or under ap-
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plicable law), except that the requirement of this
paragraph shall not apply in the case of—
(A) the nonpayment of premiums or con-
tributions by the participant or beneficiary in
accordance with the terms of the employee
health benefit plan or group health plan or
where such plan has not received timely pre-
mium payments.
(B) fraud or misrepresentation of material
fact on the part of the participant or bene-
ficiary relating to an application for coverage or
claim for benefits;
(C) the termination of the employee health
benefit plan or group health plan;
(D) loss of eligibility for continuation cov-
erage as described in part 6 of subtitle B of
title I of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1161 et seq.); or
(E) failure of a participant or beneficiary
to meet requirements for eligibility for coverage
under an employee health benefit plan or group
health plan that are not prohibited by this title.
(3) RULES
OF
CONSTRUCTION.—Nothing in
this subsection, nor in section 101(a), shall be con-
strued to—
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prior to the date of the discontinuation of such
plan;
(B) the health plan issuer offers to each
group purchaser covered under a group health
plan of this type, the option to purchase any
other group health plan currently being offered
by the health plan issuer; and
(C) in exercising the option to discontinue
a group health plan of this type and in offering
one or more replacement plans, the health plan
issuer acts uniformly without regard to the
health status of participants or beneficiaries
covered under the group health plan, or new
participants or beneficiaries who may become
eligible for coverage under the group health
plan.
(2) DISCONTINUANCE OF ALL GROUP HEALTH
PLANS.—
(A) IN GENERAL.—In any case in which a
health plan issuer elects to discontinue offering
all group health plans in a State, a group
health plan may be discontinued by the health
plan issuer only if—
(i) the health plan issuer provides no-
tice to the applicable certifying authority
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(as defined in section 142(d)) and to each
group purchaser (and participants and
beneficiaries covered under such group
health plan) of such discontinuation at
least 180 days prior to the date of the ex-
piration of such plan, and
(ii) all group health plans issued or
delivered for issuance in the State or dis-
continued and coverage under such plans is
not renewed.
(B) APPLICATION
OF
PROVISIONS.—The
provisions of this paragraph and paragraph (3)
may be applied separately by a health plan is-
suer—
(i) to all group health plans offered to
small employers (as defined under applica-
ble State law, or if not so defined, an em-
ployer with not more than 50 employees);
or
(ii) to all other group health plans of-
fered by the health plan issuer in the
State.
(3) PROHIBITION
ON
MARKET
REENTRY.—In
the case of a discontinuation under paragraph (2),
the health plan issuer may not provide for the issu-
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ance of any group health plan in the market sector
(as described in paragraph (2)(B)) in which issuance
of such group health plan was discontinued in the
State involved during the 5-year period beginning on
the date of the discontinuation of the last group
health plan not so renewed.
(c) TREATMENT OF NETWORK PLANS.—
(1) GEOGRAPHIC
LIMITATIONS.—A network
plan (as defined in paragraph (2)) may deny contin-
ued participation under such plan to participants or
beneficiaries who neither live, reside, nor work in an
area in which such network plan is offered, but only
if such denial is applied uniformly, without regard to
health status of particular participants or bene-
ficiaries.
(2) NETWORK
PLAN.—As used in paragraph
(1), the term ‘‘network plan’’ means an employee
health benefit plan or a group health plan that ar-
ranges for the financing and delivery of health care
services to participants or beneficiaries covered
under such plan, in whole or in part, through ar-
rangements with providers.
(d) COBRA COVERAGE.—Nothing in subsection
(a)(2)(E) or subsection (c) shall be construed to affect any
right to COBRA continuation coverage as described in
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part 6 of subtitle B of title I of the employee Retirement
Income Security Act of 1974 (29 U.S.C. 1161 et seq.).
SEC. 103. PORTABILITY OF HEALTH COVERAGE AND LIMI-
TATION ON PREEXISTING CONDITION EXCLU-
SIONS.
(a) IN GENERAL.—An employee health benefit plan
or a health plan issuer offering a group health plan may
impose a limitation or exclusion of benefits relating to
treatment of a preexisting condition based on the fact that
the condition existed prior to the coverage of the partici-
pant or beneficiary under the plan only if—
(1) the limitation or exclusion extends for a pe-
riod of not more than 12 months after the date of
enrollment in the plan;
(2) the limitation or exclusion does not apply to
an individual who, within 30 days of the date of
birth or placement for adoption (as determined
under section 609(c)(3)(B) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C.
1169(c)(3)(B)), was covered under the plan; and
(3) the limitation or exclusion does not apply to
a pregnancy.
(b) CREDITING
OF PREVIOUS QUALIFYING COV-
ERAGE.—
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(1) IN GENERAL.—Subject to paragraph (4), an
employee health benefit plan or a health plan issuer
offering a group health plan shall provide that if a
participant or beneficiary is in a period of previous
qualifying coverage as of the date of enrollment
under such plan, any period of exclusion or limita-
tion of coverage with respect to a preexisting condi-
tion shall be reduced by 1 month for each month in
which the participant or beneficiary was in the pe-
riod of previous qualifying coverage. With respect to
an individual described in subsection (a)(2) who
maintains continuous coverage, no limitation or ex-
clusion of benefits relating to treatment of a pre-
existing condition may be applied to a child within
the child’s first 12 months of life or within 12
months after the placement of a child for adoption.
(2) DISCHARGE OF DUTY.—An employee health
benefit plan shall provide documentation of coverage
to participants and beneficiaries who coverage is ter-
minated under the plan. Pursuant to regulations
promulgated by the Secretary, the duty of an em-
ployee health benefit plan to verify previous qualify-
ing coverage with respect to a participant or bene-
ficiary is effectively discharged when such employee
health benefit plan provides documentation to a par-