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ticipant or beneficiary that includes the following in-
formation:
(A) the dates that the participant or bene-
ficiary was covered under the plan; and
(B) the benefits and cost-sharing arrange-
ment available to the participant or beneficiary
under such plan.
An employee health benefit plan shall retain the doc-
umentation provided to a participant or beneficiary
under subparagraphs (A) and (B) for at least the
12-month period following the date on which the
participant or beneficiary ceases to be covered under
the plan. Upon request, an employee health benefit
plan shall provide a second copy of such documenta-
tion or such participant or beneficiary within the 12-
month period following the date of such ineligibility.
(3) DEFINITIONS.—As used in this section:
(A) PREVIOUS QUALIFYING COVERAGE.—
The term ‘‘previous qualifying coverage’’ means
the period beginning on the date—
(i) a participant or beneficiary is en-
rolled under an employee health benefit
plan or a group health plan, and ending on
the date the participant or beneficiary is
not so enrolled; or
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(ii) an individual is enrolled under an
individual health plan (as defined in sec-
tion 113) or under a public or private
health plan established under Federal or
State law, and ending on the date the indi-
vidual is not so enrolled;
for a continuous period of more than 30 days
(without regard to any waiting period).
(B) LIMITATION OR EXCLUSION OF BENE-
FITS
RELATING
TO
TREATMENT
OF
A
PRE-
EXISTING CONDITION.—The term ‘‘limitation or
exclusion of benefits relating to treatment of a
preexisting condition’’ means a limitation or ex-
clusion of benefits imposed on an individual
based on a preexisting condition of such individ-
ual.
(4) EFFECT OF PREVIOUS COVERAGE.—An em-
ployee health benefit plan or a health plan issuer of-
fering a group health plan may impose a limitation
or exclusion of benefits relating to the treatment of
a preexisting condition, subject to the limits in sub-
section (a)(1), only to the extent that such service
or benefit was not previously covered under the
group health plan, employee health benefit plan, or
individual health plan in which the participant or
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beneficiary was enrolled immediately prior to enroll-
ment in the plan involved.
(c) LATE ENROLLEES.—Except as provided in sec-
tion 104, with respect to a participant or beneficiary en-
rolling in an employee health benefit plan or group health
plan during a time that is other than the first opportunity
to enroll during an enrollment period of at least 30 days,
coverage with respect to benefits or services relating to
the treatment of a preexisting condition in accordance
with subsection (a) and (b) may be excluded except the
period of such exclusion may not exceed 18 months begin-
ning on the date of coverage under the plan.
(d) AFFILIATION PERIODS.—With respect to a par-
ticipant or beneficiary who would otherwise be eligible to
receive benefits under an employee health benefit plan or
a group health plan but for the operation of a preexisting
condition limitation or exclusion, if such plan does not uti-
lize a limitation or exclusion of benefits relating to the
treatment of a preexisting condition, such plan may im-
pose an affiliation period on such participant or bene-
ficiary not to exceed 60 days (or in the case of a late par-
ticipant or beneficiary described in subsection (c), 90
days) from the date on which the participant or bene-
ficiary would otherwise be eligible to receive benefits under
the plan. An employee health benefit plan or a health plan
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issuer offering a group health plan may also use alter-
native methods to address adverse section as approved by
the applicable certifying authority (as defined in section
142(d)). During such an affiliation period, the plan may
not be required to provide health care services or benefits
and no premium shall be charged to the participant or
beneficiary.
(e) PREEXISTING CONDITIONS.—For purposes of this
section, the term ‘‘preexisting condition’’ means a condi-
tion, regardless of the cause of the condition, for which
medical advice, diagnosis, care, or treatment was rec-
ommended or received within the 6-month period ending
on the day before the effective date of the coverage (with-
out regard to any waiting period).
(f) STATE FLEXIBILITY.—Nothing in this section
shall be construed to preempt State laws that—
(1) require health plan issuers to impose a limi-
tation or exclusion of benefits relating to the treat-
ment of a preexisting condition for periods that are
shorter than those provided for under this section;
or
(2) allow individuals, participants, and bene-
ficiaries to be considered to be in a period of pre-
vious qualifying coverage if such individual, partici-
pant, or beneficiary experiences a lapse in coverage
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that is greater than the 30-day period provided for
under subsection (b)(3);
unless such laws are preempted by section 514 of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1144).
SEC. 104. SPECIAL ENROLLMENT PERIODS.
In the case of a participant, beneficiary or family
member who—
(1) through marriage, separation, divorce,
death, birth or placement of a child for adoption, ex-
periences a change in family composition affecting
eligibility under a group health plan, individual
health plan, or employee health benefit plan;
(2) experiences a change in employment status,
as described in section 603(2) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1163(2)), that causes the loss of eligibility for cov-
erage, other than COBRA continuation coverage
under a group health plan, individual health plan, or
employee health benefit plan; or
(3) experiences a loss of eligibility under a
group health plan, individual health plan, or em-
ployee health benefit plan because of a change in the
employment status of a family member;
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each employee health benefit plan and each group health
plan shall provide for a special enrollment period extend-
ing for a reasonable time after such event that would per-
mit the participant to change the individual or family basis
of coverage or to enroll in the plan if coverage would have
been available to such individual, participant, or bene-
ficiary but for failure to enroll during a previous enroll-
ment period. Such a special enrollment period shall ensure
that a child born or placed for adoption shall be deemed
to be covered under the plan as of the date of such birth
or placement for adoption if such child is enrolled within
30 days of the date of such birth or placement for adop-
tion.
SEC. 105. DISCLOSURE OF INFORMATION.
(a) DISCLOSURE OF INFORMATION BY HEALTH PLAN
ISSUER.—
(1) IN GENERAL.—In connection with the offer-
ing of any group health plan to a small employer (as
defined under applicable State law, or if not so de-
fined, an employer with not more than 50 employ-
ees), a health plan issuer shall make a reasonable
disclosure to such employer, as part of its solicita-
tion and sales materials, of—
(A) the provisions of such group health
plan concerning the health plan issuer’s right to
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change premium rates and the factors that may
affect changes in premium rates.
(B) the provisions of such group health
plan relating to renewability of coverage;
(C) the provisions of such group health
plan relating to any preexisting condition provi-
sion; and
(D) descriptive information about the ben-
efits and premiums available under all group
health plans for which the employer is qualified.
Information shall be provided to small employers
under this paragraph in a manner determined to be
understandable by the average small employer, and
shall be sufficiently accurate and comprehensive to
reasonably inform small employers, participants and
beneficiaries of their rights and obligations under
the group health plan.
(2) EXCEPTION.—With respect to the require-
ment of paragraph (1), any information that is pro-
prietary and trade secret information under applica-
ble law shall not be subject to the disclosure require-
ments of such paragraph.
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed to preempt State report-
ing and disclosure requirements to the extent that
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such requirements are not preempted under section
514 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1144).
(b) DISCLOSURE OF INFORMATION TO PARTICIPANTS
AND BENEFICIARIES.—
(1) IN
GENERAL.—Section 104(b)(1) of the
Employee Retirement Income Security Act of 1974
(29 U.S.C. 1024(b)(1)) is amended in the matter
following subparagraph (B)—
(A) by striking ‘‘102(a)(1),’’ and inserting
‘‘102(a)(1) that is not a material reduction in
covered services or benefits provided,’’; and
(B) by adding at the end thereof the fol-
lowing new sentences: ‘‘If there is a modifica-
tion or change described in section 102(a)(1)
that is a material reduction in covered services
or benefits provided, a summary description of
such modification or change shall be furnished
to participants not later than 60 days after the
date of the adoption of the modification or
change. In the alternative, the plan sponsors
may provide such description at regular inter-
vals of not more than 90 days. The Secretary
shall issue regulations within 180 days after the
date of enactment of the Health Insurance Re-
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form Act of 1996, providing alternative mecha-
nisms to delivery by mail through which em-
ployee health benefit plans may notify partici-
pants of material reductions in covered services
or benefits.’’.
(2) PLAN DESCRIPTION AND SUMMARY.—Sec-
tion 102(b) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1022(b)) is amend-
ed—
(A) by inserting ‘‘including the office or
title of the individual who is responsible for ap-
proving or denying claims for coverage of bene-
fits’’ after ‘‘type of administration of the plan’’;
(B) by inserting ‘‘including the name of
the organization responsible for financing
claims’’ after ‘‘source of financing of the plan’’;
and
(C) by inserting ‘‘including the office, con-
tact, or title of the individual at the Depart-
ment of Labor through which participants may
seek assistance or information regarding their
rights under this Act and title I of the Health
Insurance Reform Act of 1996 with respect to
health benefits that are not offered through a
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group health plan.’’ after ‘‘benefits under the
plan’’.
Subtitle B—Individual Market Rules
SEC. 110. INDIVIDUAL HEALTH PLAN PORTABILITY.
(a) LIMITATION ON REQUIREMENTS.—
(1) IN GENERAL.—Except as provided in sub-
sections (b) and (c), a health plan issuer described
in paragraph (3) may not, with respect to an eligible
individual (as defined in subsection (b)) desiring to
enroll in an individual health plan—
(A) decline to offer coverage to such indi-
vidual, or deny enrollment to such individual
based on the health status of the individual; or
(B) impose a limitation or exclusion of
benefits otherwise covered under the plan for
the individual based on a preexisting condition
unless such limitation or exclusion could have
been imposed if the individual remained covered
under a group health plan or employee health
benefit plan (including providing credit for pre-
vious coverage in the manner provided under
subtitle A).
(2) HEALTH
PROMOTION
AND
DISEASE
PRE-
VENTION.—Nothing in this subsection shall be con-
strued to prevent a health plan issuer offering an in-
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dividual health plan from establishing premium dis-
counts or modifying otherwise applicable copayments
or deductibles in return for adherence to programs
of health promotion or disease prevention.
(3) HEALTH PLAN ISSUER.—A health plan is-
suer described in this paragraph in a health plan is-
suer that issues or renews individual health plans.
(4) PREMIUMS.—Nothing in this subsection
shall be construed to affect the determination of a
health plan issuer as to the amount of the premium
payable under an individual health plan under appli-
cable State law.
(b) DEFINITION OF ELIGIBLE INDIVIDUAL.—As used
in subsection (a)(1), the term ‘‘eligible individual’’ means
an individual who—
(1) was a participant or beneficiary enrolled
under one or more group health plans, employee
health benefit plans, or public plans established
under Federal or State law, for not less than 18
months (without a lapse in coverage of more than 30
consecutive days) immediately prior to the date on
which the individual desired to enroll in the individ-
ual health plan.
(2) is not eligible for coverage under a group
health plan or an employee health benefit plan;
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(3) has not had coverage terminated under a
group health plan or employee health benefit plan
for failure to make required premium payments or
contributions, or for fraud or misrepresentation of
material fact; and
(4) has, if applicable, accepted and exhausted
the maximum required period of continuous coverage
as described in section 602(2)(A) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1162(2)(A)) or under an equivalent State program.
(c) APPLICABLE OF CAPACITY LIMIT.—
(1) IN GENERAL.—Subject to paragraph (2), a
health plan issuer offering coverage to individuals
under an individual health plan may cease enrolling
individuals under the plan if—
(A) the health plan issuer ceases to enroll
any new individuals; 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
individuals will be impaired if the health plan
issuer is required to enroll additional individ-
uals.