I
104TH CONGRESS
1ST SESSION
H. R. 995
To amend the Employee Retirement Income Security Act of 1974 to provide
new portability, participation, solvency, claims, and other consumer pro-
tections and freedoms for workers in a mobile workforce; to increase
purchasing power for employers and employees by removing barriers
to the voluntary formation of multiple employer health plans and fully-
insured multiple employer arrangements; to increase health plan competi-
tion providing more affordable choice of coverage by removing restrictive
State laws relating to provider health networks, employer health coali-
tions, and insured plans and the offering of medisave plans; to expand
access to fully-insured coverage for employees of small employers through
fair rating standards and open markets, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 21, 1995
Mr. FAWELL (for himself, Mr. GOODLING, Mr. ARMEY, Mr. PETRI, Mrs. ROU-
KEMA, Mr. BALLENGER, Mr. HOEKSTRA, Mr. MCKEON, Mrs. MEYERS of
Kansas, Mr. TALENT, Mr. GREENWOOD, Mr. HUTCHINSON, Mr.
KNOLLENBERG, Mr. GRAHAM, Mr. WELDON
of Florida, and Mr.
MCINTOSH) introduced the following bill; which was referred to the Com-
mittee on Economic and Educational Opportunity and, in addition, to the
Committee on Commerce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
MARCH 21, 1995
Additional sponsors: Mr. CUNNINGHAM, Mr. WELLER, Mr. MCHUGH, and Mr.
CALVERT
A BILL
To amend the Employee Retirement Income Security Act
of 1974 to provide new portability, participation, sol-
vency, claims, and other consumer protections and free-
Title I
HR 995 SC
doms for workers in a mobile workforce; to increase
purchasing power for employers and employees by remov-
ing barriers to the voluntary formation of multiple em-
ployer health plans and fully-insured multiple employer
arrangements; to increase health plan competition provid-
ing more affordable choice of coverage by removing re-
strictive State laws relating to provider health networks,
employer health coalitions, and insured plans and the
offering of medisave plans; to expand access to fully-
insured coverage for employees of small employers
through fair rating standards and open markets, and
for other purposes.
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 ‘‘ERISA Targeted
Health Insurance Reform Act of 1995’’.
TITLE I—IMPROVED ACCESS TO
AFFORDABLE HEALTH PLAN
COVERAGE
TABLE OF CONTENTS OF TITLE
Subtitle A—Increased Availability and Continuity of Group Health Plan
Coverage for Employees and Their Families
Sec. 1001. Access to affordable group health plan coverage.
‘‘PART 8—ACCESS TO, AND CONTINUITY OF, HEALTH PLAN COVERAGE
‘‘Sec. 800. Definitions and special rules.
‘‘SUBPART A—NONDISCRIMINATION, PORTABILITY, RENEWABILITY, AND PLAN
PARTICIPATION STANDARDS
‘‘Sec. 801. Nondiscrimination and limitations on preexisting condition ex-
clusions.
‘‘Sec. 802. Portability.
‘‘Sec. 803. Requirements for renewability of coverage.
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‘‘Sec. 804. Group health plan participation standards.
‘‘SUBPART B—ENCOURAGEMENT OF PRIVATE STANDARDS-SETTING ORGANIZA-
TIONS FOR PROVIDER NETWORKS AND UTILIZATION REVIEW UNDER GROUP
HEALTH PLANS
‘‘Sec. 811. Encouragement of private standards-setting organizations for
provider networks under group health plans.
‘‘Sec. 812. Encouragement of private standards-setting organizations for
utilization review under group health plans.
‘‘SUBPART C—ESTABLISHMENT OF STANDARDS; ENFORCEMENT
‘‘Sec. 821. Establishment of standards applicable to insurers offering
health insurance coverage to group health plans.
‘‘Sec. 822. Enforcement with respect to insurers offering health insurance
coverage to group health plans.
‘‘Sec. 823. Preemption.’’.
Sec. 1002. Effective date.
Subtitle B—Requirements for Insurers Offering Health Insurance Coverage to
Group Health Plans of Small Employers
Sec. 1101. ERISA requirements for insurers offering health insurance coverage
to group health plans of small employers
‘‘SUBPART D—REQUIREMENTS FOR INSURERS OFFERING HEALTH INSURANCE
COVERAGE TO GROUP HEALTH PLANS OF SMALL EMPLOYERS
‘‘Sec. 831. Definitions.
‘‘Sec. 832. Requirement for insurers to offer general, catastrophic, and op-
tional medisave coverage to small employers.
‘‘Sec. 833. General, catastrophic, and medisave coverage defined.
‘‘Sec. 834. Use of fair rating, uniform marketing materials, and mis-
cellaneous consumer protections.
‘‘Sec. 835. Establishment of standards.
‘‘Sec. 836. Enforcement.
‘‘Sec. 837. Preemption.’’.
Sec. 1102. Effective date.
Subtitle C—Encouragement of Multiple Employer Health Plans and
Preemption
Sec. 1201. Scope of State regulation.
‘‘SUBPART E—SCOPE OF STATE REGULATION
‘‘Sec. 841. Prohibition of State benefit mandates for group health plans.
‘‘Sec. 842. Prohibition of provisions prohibiting employer groups from pur-
chasing health insurance.
‘‘Sec. 843. Preemption of State anti-managed care laws.’’.
Sec. 1202. Preemption of State law for multiple employer health plans meeting
Federal standards.
‘‘PART 7—MULTIPLE EMPLOYER HEALTH PLANS
‘‘Sec. 701. Definitions.
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‘‘Sec. 702. Exempted multiple employer health plans relieved of certain re-
strictions on preemption of State law and treated as em-
ployee welfare benefit plans.
‘‘Sec. 703. Exemption procedure.
‘‘Sec. 704. Eligibility requirements.
‘‘Sec. 705. Additional requirements applicable to exempted multiple em-
ployer health plans.
‘‘Sec. 706. Disclosure to participating employers by arrangements provid-
ing medical care.
‘‘Sec. 707. Maintenance of reserves.
‘‘Sec. 708. Notice requirements for voluntary termination.
‘‘Sec. 709. Corrective actions and mandatory termination.
‘‘Sec. 710. Expiration, suspension, or revocation of exemption.
‘‘Sec. 711. Review of actions of the Secretary.’’.
Sec. 1203. Clarification of scope of preemption rules.
Sec. 1204. Clarification of treatment of single employer arrangements.
Sec. 1205. Clarification of treatment of certain collectively bargained arrange-
ments.
Sec. 1206. Employee leasing healthcare arrangements.
Sec. 1207. Enforcement provisions relating to multiple employer welfare ar-
rangements and employee leasing healthcare arrangements.
Sec. 1208. Filing requirements for multiple employer welfare arrangements of-
fering health benefits.
Sec. 1209. Cooperation between Federal and State authorities.
Sec. 1210. Clarification of treatment of employer health coalitions and health
maintenance organizations.
Sec. 1211. Single annual filing for all participating employers.
Sec. 1212. Effective date; transitional rules.
Subtitle D—Remedies and Enforcement With Respect to Group Health Plans
Sec. 1301. Claims procedure for group health plans.
Sec. 1302. Available court remedies.
Sec. 1303. Effective date.
Subtitle E—Funding and Plan Termination Requirements for Self-Insured
Group Health Plans
Sec. 1401. Special rules for self-insured group health plans.
Sec. 1402. Effective date.
Subtitle F—General Provisions
Sec. 1501. Rule of construction.
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HR 995 SC
paragraph (A)), the self-employed individ-
ual.
‘‘(4) ELIGIBLE INDIVIDUAL.—The term ‘eligible
individual’ means, with respect to an eligible em-
ployee, such eligible employee and any dependent of
such eligible employee.
‘‘(5) EMPLOYER.—The term ‘employer’ shall
have the meaning applicable under section 3(5), ex-
cept that such term includes the partnership in rela-
tion to any partner.
‘‘(6) EXEMPTED MULTIPLE EMPLOYER HEALTH
PLAN.—The term ‘exempted multiple employer
health plan’ means a multiple employer welfare ar-
rangement treated as an employee welfare benefit
plan by reason of an exemption under part 7.
‘‘(7) GROUP
HEALTH
PLAN; PLAN.—(A) The
term ‘group health plan’ means a group health plan
(as defined in section 3(42)), but does not include
any type of coverage excluded from the definition of
health insurance coverage under paragraph (8)(B).
‘‘(B) The term ‘plan’ means a group health
plan (including any such plan which is a multiem-
ployer plan) and an exempted multiple employer
health plan.
‘‘(8) HEALTH INSURANCE COVERAGE.—
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‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the term ‘health insurance
coverage’ means any hospital or medical service
policy or certificate, hospital or medical service
plan contract, or health maintenance organiza-
tion group contract offered by an insurer.
‘‘(B) EXCEPTION.—Such term does not in-
clude any of the following:
‘‘(i) Coverage only for accident, den-
tal, vision, disability income, or long-term
care insurance, or any combination thereof.
‘‘(ii) Medicare supplemental health in-
surance.
‘‘(iii) Coverage issued as a supplement
to liability insurance.
‘‘(iv) Liability insurance, including
general liability insurance and automobile
liability insurance.
‘‘(v) Worker’s compensation or similar
insurance.
‘‘(vi) Automobile medical-payment in-
surance.
‘‘(vii) Coverage for a specified disease
or illness.
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‘‘(viii) A hospital fixed indemnity pol-
icy or other fixed indemnity policy.
‘‘(9) FULLY
INSURED.—The term ‘fully in-
sured’ shall have the meaning applicable under sec-
tion 701(8).
‘‘(10) 
INSURER.—(A) 
The 
term 
‘insurer’
means—
‘‘(i) an insurance company, insurance serv-
ice, or insurance organization licensed to en-
gage in the business of insurance in a State, or
‘‘(ii) a health maintenance organization (as
defined in subparagraph (B)) licensed to do
business in a State.
(B) HEALTH MAINTENANCE ORGANIZATION.—
The term ‘health maintenance organization’ means a
Federally qualified health maintenance organization
(as defined in section 1301(a) of the Public Health
Service Act), an organization recognized under State
law as a health maintenance organization, or a simi-
lar organization regulated under State law for sol-
vency in the same manner and to the same extent
as such a health maintenance organization.
‘‘(11) MULTIPLE
EMPLOYER
WELFARE
AR-
RANGEMENT.—The term ‘multiple employer welfare
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arrangement’ shall have the meaning applicable
under section 3(40).
‘‘(12) NAIC.—The term ‘NAIC’ means the Na-
tional Association of Insurance Commissioners.
‘‘(13) NETWORK
PLAN.—The term ‘network
plan’ includes, as defined in standards established
under section 835, an arrangement of an insurer
under which health services are offered to be pro-
vided primarily through a defined set of providers
who have contracts with the insurer.
‘‘(14) OPTIONS.—
‘‘(A) FEE-FOR-SERVICE OPTION.—General
coverage is considered to provide a ‘fee-for-serv-
ice option’ if benefits with respect to the cov-
ered items and services in the coverage are
made available for such items and services pro-
vided through any lawful provider of such cov-
ered items and services.
‘‘(B) MANAGED
CARE
OPTION.—General
coverage is considered to provide a ‘managed
care option’ if benefits with respect to the cov-
ered items and services in the coverage are
made available exclusively through a managed
care arrangement, except in the case of emer-
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gency and urgent services and as otherwise re-
quired under law.
‘‘(C) POINT-OF-SERVICE OPTION.—General
coverage is considered to provide a ‘point-of-
service option’ if the benefits with respect to
covered items and services in the coverage are
made available principally through a managed
care arrangement, with the choice of the cov-
ered individual to obtain such benefits for items
and services provided through any lawful pro-
vider of such covered items and services. The
coverage may provide for different cost sharing
schedules based on whether the items and serv-
ices are provided through such an arrangement
or outside such an arrangement.
‘‘(b) HIGHLY COMPENSATED EMPLOYEE.—
‘‘(1) IN
GENERAL.—In this part, the term
‘highly compensated employee’ means any employee
who—
‘‘(A) was a 5-percent owner at any time
during the year or the preceding year, or
‘‘(B) had compensation for the preceding
year from the employer in excess of $50,000.
Under regulations the $50,000 amount under sub-
paragraph (B) shall be adjusted for increases in the
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cost of living. Such regulations shall provide for ad-
justment procedures which are similar to the proce-
dures used to adjust benefit amounts under section
215(i)(2)(A) of the Social Security Act.
‘‘(2) SPECIAL
RULE
IF
NO
EMPLOYEE
DE-
SCRIBED
IN
PARAGRAPH
(1).—If no employee is
treated as a highly compensated employee under
paragraph (1), the highest paid officer for the year
shall be treated as a highly compensated employee.
‘‘(3) 5-PERCENT OWNER.—An employee shall be
treated as a 5-percent owner for any year if at any
time during such year such employee was a 5-per-
cent owner (as defined under regulations consistent
and coextensive with section 416(i)(1) of the Inter-
nal Revenue Code of 1986, as in effect on January
1, 1995) of the employer.
‘‘(4) COMPENSATION.—For purposes of this
subsection—
‘‘(A) IN GENERAL.—The term ‘compensa-
tion’ means compensation as defined in regula-
tions consistent and coextensive with the defini-
tion in section 415(c)(3) of the Internal Reve-
nue Code of 1986, as in effect on January 1,
1995.
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‘‘(B) CERTAIN
PROVISIONS
NOT
TAKEN
INTO ACCOUNT.—The determination under sub-
paragraph (A) shall be made in accordance with
regulations that are consistent and coextensive
with section 414(q)(7) of the Internal Revenue
Code of 1986, as in effect on January 1, 1995.
‘‘(5) FORMER EMPLOYEES.—A former employee
and an employee who is a nonresident alien and who
receives no earned income from sources within the
United States shall be treated as a highly com-
pensated employee under regulations that are con-
sistent and coextensive with paragraphs (9) and (11)
of section 414(a) of the Internal Revenue Code of
1986, as in effect on January 1, 1995.
‘‘(c) APPLICATION OF ERISA DEFINITIONS.—Ex-
cept as otherwise provided in this part, terms used in this
part shall have the meanings applicable to such terms
under section 3.
‘‘Subpart A—Nondiscrimination, Portability,
Renewability, and Plan Participation Standards
‘‘SEC. 801. NONDISCRIMINATION AND LIMITATIONS ON PRE-
EXISTING CONDITION EXCLUSIONS.
‘‘(a) IN GENERAL.—Except as provided in sub-
sections (b) and (c), a group health plan and an insurer
offering health insurance coverage in connection with a
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group health plan may deny, or impose a limitation or ex-
clusion of, covered benefits relating to treatment of a con-
dition based on health status of an individual, based on
claims experience of an individual, based on receipt of
health care by an individual, based on the medical history
of an individual, or based on the fact that the condition
preexisted the effective date of coverage of the individual,
only if—
‘‘(1) the condition relates to a condition that
was diagnosed or treated within a period of not to
exceed 3 months before the date of such coverage;
and
‘‘(2) the limitation or exclusion extends over a
period of not to exceed 6 months after the date of
such coverage.
In the case of an individual who is eligible for coverage
but for a waiting period imposed by a group health plan
or an insurer, in applying paragraphs (1) and (2), the in-
dividual shall be treated as having had such coverage as
of the beginning of the waiting period.
‘‘(b) SPECIAL RULE FOR GROUP HEALTH PLANS OF
SMALL EMPLOYERS AND HEALTH INSURANCE COVERAGE
OFFERED
IN
THE SMALL GROUP MARKET.—Notwith-
standing subsection (a), health insurance coverage offered
by an insurer in connection with a group health plan to
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a small employer in the small group market (as defined
in section 803(b)(4)(B)), and a group health plan with
respect to such an employer, may consist of health insur-
ance coverage which imposes a limitation or exclusion
based on a preexisting condition but only if—
‘‘(1) the condition relates to a condition that
was not diagnosed or treated within a period (that
exceeds 3 months but does not exceed 6 months) be-
fore the date of such coverage; and
‘‘(2) the limitation or exclusion extends over a
period (that exceeds 6 months but does not exceed
12 months) after the date of such coverage.
‘‘(c) NO COVERAGE OF SPECIFIC TREATMENT, PRO-
CEDURES, OR CLASSES REQUIRED.—Nothing in this sec-
tion may be construed to require the coverage of any spe-
cific procedure, treatment, or service as part of a group
health plan or health insurance coverage under this Act
or through regulation.
‘‘(d) APPLICATION OF RULES BY CERTAIN HEALTH
MAINTENANCE ORGANIZATIONS.—A health maintenance
organization that offers health insurance coverage shall
not be considered as failing to meet the requirements of
section 1301 of the Public Health Service Act notwith-
standing that it provides for an exclusion of the coverage
based on a preexisting condition consistent with the provi-
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sions of this subpart so long as such exclusion is applied
consistent with the provisions of this subpart.
‘‘(e) APPLICABILITY TO LATE ENROLLMENT.—This
section applies in the case of any individual with respect
to whom coverage is elected upon initially becoming eligi-
ble for coverage or in connection with any subsequent en-
rollment periods under the plan.
‘‘(f) AFFILIATION PERIOD ALTERNATIVE TO PRE-
EXISTING CONDITION LIMITATION.—A group health plan
or an insurer offering health insurance coverage in connec-
tion with a group health plan which does not use the pre-
existing limitations allowed under this section and section
802 may impose an affiliation period. For purposes of this
subsection, the term ‘affiliation period’ means a period—
‘‘(1) not to exceed 90 days in the case of an in-
dividual first becoming eligible under such plan or
coverage, and
‘‘(2) not to exceed 180 days in the case of a
later election of coverage,
during which no contributions or premiums are required
or collected and which must expire before the coverage
under the plan or the health insurance coverage offered
in connection with the plan becomes effective.
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‘‘SEC. 802. PORTABILITY.
‘‘(a) IN GENERAL.—Each group health plan and each
insurer offering health insurance coverage in connection
with a group health plan shall provide that if a covered
individual is in a period of continuous coverage (as defined
in subsection (c)) as of a date upon which coverage takes
effect, any period of exclusion of coverage from covered
benefits with respect to a preexisting condition (as per-
mitted to be excluded under section 801) shall be reduced
by at least 1 month for each month in the period of contin-
uous coverage. A covered individual may be treated by a
group health plan, or by an insurer offering health insur-
ance coverage in connection with a group health plan, as
not being in a period of continuous coverage if, upon the
request of the plan or insurer (as the case may be), the
covered individual does not present satisfactory docu-
mentation of such period of continuous coverage. The Sec-
retary may prescribe regulations defining standards for
satisfactory documentation for purposes of this subsection.
‘‘(b) NO PREEXISTING CONDITION FOR NEWBORNS
AND ADOPTED CHILDREN.—For purposes of this part—
‘‘(1) NEWBORNS.—A child who is covered at
the time of birth and remains in a period of continu-
ous coverage after such time shall not be considered
to have any preexisting condition beginning at the
time of birth.
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‘‘(2) ADOPTED CHILDREN.—An adopted child
who is covered at the time of adoption and remains
in a period of continuous coverage shall not be con-
sidered, beginning on the date of adoption, to have
any preexisting condition.
‘‘(c) PERIOD OF CONTINUOUS COVERAGE.—In this
subpart, the term ‘period of continuous coverage’ means
the period—
‘‘(1) beginning on the date an individual be-
comes covered under a group health plan or health
insurance coverage (or coverage under a public plan
providing medical benefits), and
‘‘(2) ending on the date the individual does not
have such coverage for a continuous period of more
than 3 months (or 6 months in the case of an indi-
vidual who loses coverage due to termination of em-
ployment).
‘‘SEC. 803. REQUIREMENTS FOR RENEWABILITY OF COV-
ERAGE.
‘‘(a) MULTIEMPLOYER PLANS, EXEMPTED MUL-
TIPLE EMPLOYER HEALTH PLANS, AND FULLY INSURED
MULTIPLE
EMPLOYER
HEALTH
ARRANGEMENTS.—A
multiemployer plan, an exempted multiple employer health
plan, and a multiple employer welfare arrangement (to the
extent to which the arrangement offers coverage consisting
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of medical care (referred to in section 3(42)) and such
coverage is fully insured) may not deny an employer who
is covered under such a plan or arrangement continued
access to coverage under the terms of such a plan or ar-
rangement other than—
‘‘(1) for nonpayment of contributions,
‘‘(2) for fraud or other intentional misrepresen-
tation by the employer,
‘‘(3) for noncompliance with material plan or
arrangement provisions,
‘‘(4) because the plan or arrangement is ceasing
to offer any coverage in a geographic area,
‘‘(5) for failure to meet the terms of an applica-
ble collective bargaining agreement,
‘‘(6) in the case of a plan or arrangement to
which section 3(40)(C) applies, to the extent nec-
essary to meet the requirements of section 3(40)(C),
or
‘‘(7) in the case of a multiple employer health
plan, for failure to meet the requirements of part 7.
‘‘(b) INSURERS.—
‘‘(1) IN GENERAL.—An insurer offering health
insurance coverage in connection with a group health
plan may not cancel (or deny renewal of) such cov-
erage, other than—
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‘‘(A) for nonpayment of premiums,
‘‘(B) for fraud or other intentional mis-
representation by the employer or insured,
‘‘(C) for noncompliance with material plan
provisions, or
‘‘(D) subject to paragraph (2), because the
insurer is ceasing to offer any such coverage (or
the same type of coverage in the small employer
market) in a State, or, in the case of an insurer
that is a health maintenance organization or
that offers coverage through a network plan (as
defined in section 800(a)(13)), in a geographic
area.
‘‘(2) NOTICE
REQUIREMENT
FOR
MARKET
EXIT.—Paragraph (1)(D) shall not apply to an in-
surer ceasing to offer coverage unless the insurer
provides notice of such termination to employers and
individuals covered at least 180 days before the date
of termination of coverage.
‘‘(3) LIMITATION ON REENTRY IN EMPLOYER
MARKETS.—If an insurer offering health insurance
coverage in connection with a group health plan
ceases to offer such coverage (or a type of such cov-
erage) in an area with respect to the small group
market (as defined in paragraph (4)(B)), the insurer
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may not offer such coverage (or type of coverage) in
the area in such market until 5 years after the date
of the termination.
‘‘(4) TYPE OF COVERAGE AND INSURANCE MAR-
KET DEFINED.—In this subsection—
‘‘(A) general coverage, catastrophic cov-
erage, and medisave coverage (as defined in sec-
tion 800(a)(1)) shall each be considered to be
separate types of health insurance coverage;
and
‘‘(B) the term ‘small group market’ means
the health insurance market under which indi-
viduals obtain health insurance coverage (di-
rectly or through any arrangement) on behalf of
themselves (and their dependents) on the basis
of employment or other relationship with re-
spect to a small employer (as defined in section
831(4)).
‘‘SEC. 804. GROUP HEALTH PLAN PARTICIPATION STAND-
ARDS.
‘‘(a) EMPLOYEES.—No group health plan may re-
quire, as a condition of participation of an employee in
the plan, that the employee—
‘‘(1) complete a waiting period consisting of
service with the employer or employers maintaining
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the plan (or contributing to the plan in the case of
a multiemployer plan or a multiple employer health
plan) if the period extends beyond a period of 90
days;
‘‘(2) have attained any specified age;
‘‘(3) be a highly compensated employee (as de-
fined in section 800(b)); or
‘‘(4) be employed (or expected to be employed)
for a minimum period by the employer or employers
if (except as provided in paragraph (1)) the em-
ployee normally performs during a plan year a year
of service (within the meaning of section 202(a)(3))
under the plan.
Nothing in this section shall be construed to require em-
ployer contributions to a group health plan.
‘‘(b) DEPENDENTS.—
‘‘(1) IN
GENERAL.—If a group health plan
makes family coverage available, the plan may not
require, as a condition of participation of a depend-
ent of an employee in the plan, a waiting period ap-
plicable to the coverage of a dependent who is a
newborn or an adopted child (at the time of adop-
tion) or a spouse (at the time of marriage) if the
employee has met any waiting period applicable to
that employee.
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‘‘(2) TIMELY ENROLLMENT.—
‘‘(A) IN GENERAL.—Enrollment of an eli-
gible individual who is an eligible employee’s de-
pendent described in paragraph (1) shall be
considered to be timely if a request for enroll-
ment is made either—
‘‘(i) within 30 days of the date of the
marriage with such a dependent who is the
spouse of the eligible employee, or within
30 days of the date of the birth or adop-
tion of such a dependent who is a child of
the eligible employee, if family coverage is
available as of such date, or
‘‘(ii) within 30 days of the date family
coverage is first made available.
‘‘(B) COVERAGE.—If available coverage in-
cludes family coverage and enrollment is made
under such coverage on a timely basis under
subparagraph (A)(i), the coverage shall become
effective not later than the first day of the first
month beginning after the date the completed
request for enrollment is received.
‘‘(c) ENROLLMENT PERIODS.—
‘‘(1) ANNUAL
PERIOD.—A group health plan
shall provide for at least one annual open enrollment
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period (of not less than 30 days) each year during
which—
‘‘(A) employees who are eligible for cov-
erage under the terms of the plan who are not
otherwise covered may elect to be covered, and
‘‘(B) if family coverage is available, em-
ployees who are covered but who do not have
family coverage may elect family coverage.
‘‘(2) ENROLLMENT OF ELIGIBLE INDIVIDUALS
WHO LOSE OTHER COVERAGE.—A group health plan
shall permit an uncovered employee who is otherwise
eligible for coverage under the terms of the plan (or
an uncovered dependent of such an employee, if fam-
ily coverage is available) to enroll for coverage under
the plan if—
‘‘(A) the employee or dependent was cov-
ered under a group health plan or had health
insurance coverage at the time coverage was
previously offered to the employee or individual,
‘‘(B) the employee stated at such time that
coverage under a group health plan or health
insurance coverage was the reason for declining
enrollment,
‘‘(C) the employee or dependent lost cov-
erage under a group health plan or health in-
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surance coverage (as a result of the termination
of the coverage, termination of employment, re-
duction in the number of hours of employment,
or other reason not involving a condition de-
scribed 
in 
section 
803(a)(1), 
803(a)(2),
803(b)(1)(A), or 803(b)(1)(B)), and
‘‘(D) the employee requests such enroll-
ment within 30 days after termination of such
coverage.
‘‘Subpart B—Encouragement of Private Standards-
Setting Organizations for Provider Networks
and Utilization Review under Group Health
Plans
‘‘SEC. 811. ENCOURAGEMENT OF PRIVATE STANDARDS-SET-
TING ORGANIZATIONS FOR PROVIDER NET-
WORKS UNDER GROUP HEALTH PLANS.
‘‘(a) REQUIREMENT TO MEET STANDARDS.—Each
group health plan, and each insurer offering health insur-
ance coverage in connection with a group health plan, shall
meet such standards as may be recognized or established
under this section.
‘‘(b) STANDARDS.—
‘‘(1) IN GENERAL.—If the Secretary of Health
and Human Services determines that a private en-
tity has established standards for provider networks
Title I, Subtitle A
HR 995 SC
providing items and services covered under group
health plans or under health insurance coverage of-
fered by insurers in connection with group health
plans, in consultation with appropriate parties (in-
cluding representatives of health care providers, spe-
cialists, insurers, plan administrators, and other ex-
perts), and provides for a process for the periodic re-
view and update of such standards, such standards
shall be the standards applied under this section.
‘‘(2) 
CONTINGENCY.—If 
the 
Secretary 
of
Health and Human Services makes a determination
contrary to the determination described in para-
graph (1), such Secretary shall submit such deter-
mination in writing to each House of the Congress.
‘‘(c) REQUIREMENTS FOR STANDARDS.—The stand-
ards established under subsection (a) shall consist only of
standards relating to—
‘‘(1) the extent to which individuals covered
under the plan are assured to have reasonably
prompt access, through the provider network, to all
items and services contained in any package of bene-
fits that may be provided under the provider net-
work, in a manner that assures the continuity of the
provision of such items and services,
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HR 995 SC
‘‘(2) the extent to which emergency services are
provided to covered individuals (including trauma
services)—
‘‘(A) without regard to whether or not the
provider furnishing such services has a contrac-
tual (or other) arrangement with the entity to
provide items or services to covered individuals,
and
‘‘(B) in the case of services furnished for
the treatment of an emergency medical condi-
tion, without regard to prior authorization, and
‘‘(3) the extent to which—
‘‘(A) standards (including criteria for qual-
ity, efficiency, credentialing, and services) are
established by the provider network for entering
into contracts (other than a contract providing
for employment of an employee) with health
care providers with respect to the provider net-
work,
‘‘(B) such standards are established pursu-
ant to a mechanism which provides for receipt
and consideration of recommendations of the
providers who are members of the provider net-
work,
Title I, Subtitle A
HR 995 SC
‘‘(C) written notification to the provider is
required to terminate or to refuse to renew the
agreement and, unless otherwise provided in the
agreement and if requested by the provider,
written notification to the provider of the rea-
sons for such termination or refusal is also re-
quired, and
‘‘(D) unless otherwise provided in the
agreement and if requested by the provider, in-
ternal review of any such decision to terminate
or to refuse renewal is provided for under the
provider network.
‘‘(d) PROVIDER NETWORK.—For purposes of this
section, the term ‘provider network’ means, with respect
to a group health plan, or with respect to health insurance
coverage provided by an insurer in connection with a
group health plan, providers who have entered into an
agreement under which such providers are obligated to
provide items and services covered under the plan to par-
ticipants and beneficiaries under the plan.
‘‘SEC. 812. ENCOURAGEMENT OF PRIVATE STANDARDS-SET-
TING ORGANIZATIONS FOR UTILIZATION RE-
VIEW UNDER GROUP HEALTH PLANS.
‘‘(a) REQUIRING REVIEW TO MEET STANDARDS.—
A group health plan or insurer offering health insurance
Title I, Subtitle A
HR 995 SC
coverage in connection with a group health plan may not
deny coverage of or payment for items and services on the
basis of a utilization review program unless the program
meets such standards as may be recognized or established
under this section.
‘‘(b) STANDARDS.—
‘‘(1) IN GENERAL.—If the Secretary of Health
and Human Services determines that a private en-
tity has established standards for utilization review
programs described in subsection (c), in consultation
with appropriate parties (including representatives
of health care providers, specialists, insurers, plan
administrators, and other experts), and provides for
a process for the periodic review and update of such
standards, such standards shall be the standards ap-
plied under this section.
‘‘(2) 
CONTINGENCY.—If 
the 
Secretary 
of
Health and Human Services makes a determination
contrary to the determination described in para-
graph (1), such Secretary shall submit such deter-
mination in writing to each House of the Congress.
‘‘(c) REQUIREMENTS FOR STANDARDS.—The stand-
ards established under subsection (a) shall consist only of
standards relating to—
Title I, Subtitle B
HR 995 SC
of paragraphs (3)(A)(ii) and (5)(A)(ii) can be devel-
oped without adversely affecting coverage rates and
affordability of coverage. If the NAIC makes such a
determination and develops such model regulations
providing for such schedules, the Secretary shall re-
view the schedules provided in such model regula-
tions. Such review shall be completed within 120
days after the date the regulations are developed.
Unless the Secretary determines within such period
that any schedule provided in such model regulations
for paragraph (3)(A)(ii) or (5)(A)(ii) does not meet
the requirements of this subsection, such schedule
shall serve as the schedule applicable under such
paragraph, with such amendments as the Secretary
deems necessary. The Secretary shall provide for
public comment in connection with the regulations
during such 120-day period and in advance of any
determination by the Secretary.
‘‘(b) ADMINISTRATIVE VARIATIONS.—
‘‘(1) EXPENSE
CATEGORIES.—Expense cat-
egories shall be established under subsection
(a)(1)(F) by an insurer offering health insurance
coverage in connection with a group health plan in
the small group market in a manner that only re-