I 
114TH CONGRESS 
1ST SESSION H. R. 2869 
To amend title XXVII of the Public Health Service Act to permit cooperative 
governing of public entity health benefits through local governments 
in secondary States. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 24, 2015 
Mr. MARCHANT (for himself, Mr. THORNBERRY, and Mr. OLSON) introduced 
the following bill; which was referred to the Committee on Energy and 
Commerce 
A BILL 
To amend title XXVII of the Public Health Service Act 
to permit cooperative governing of public entity health 
benefits through local governments in secondary States. 
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 ‘‘Local and Municipal 
Health Care Choice Act of 2015’’. 
SEC. 2. COOPERATIVE GOVERNING OF PUBLIC ENTITY 
GROUP HEALTH COVERAGE. 
Title XXVII of the Public Health Service Act (42 
U.S.C. 300gg et seq.) is amended— 
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(1) by redesignating the section 2794 (42 
U.S.C. 300gg–95) relating to uniform fraud and 
abuse referral format as section 2795; and 
(2) by adding at the end the following new sec-
tion: 
‘‘SEC. 2796. AUTHORITY TO OFFER PUBLIC ENTITY GROUP 
HEALTH 
COVERAGE 
TO 
LOCAL 
GOVERN-
MENTS IN A SECONDARY STATE. 
‘‘(a) IN GENERAL.—A local government in a sec-
ondary State (as defined in subsection (i)(7)) may provide 
group health coverage to its officers, employees, or retirees 
(and their dependents) through a local government em-
ployee health benefits pool or program authorized under 
the laws of a primary State, subject to the provisions of 
this section. 
‘‘(b) ELIGIBILITY FOR MULTISTATE ACTIVITY.—A 
local government employee health benefits pool or program 
shall be eligible to offer group health coverage to officials, 
employees, and retirees (and their dependents) of a local 
government located in a secondary State through an 
interlocal agreement with such local government, or as ap-
proved by an applicable State authority in such secondary 
State, unless— 
‘‘(1) in the case of a pool or program that pri-
marily serves municipal officers, employees, or retir-
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ees (and their dependents), an objection is made to 
the offering of such coverage by the municipal 
league or association located in the secondary State 
within 90 days of the date on which the authority 
is granted or an interlocal agreement is executed; or 
‘‘(2) in the case of a pool or program that pri-
marily serves county officers, employees, retirees 
(and their dependents), an objection is made to the 
offering of such coverage by the county association 
located in the secondary State within 90 days of the 
date on which the authority is granted or an 
interlocal agreement is executed. 
‘‘(c) APPLICATION OF COVERED LAWS OF PRIMARY 
STATE.—The covered laws (as defined in subsection 
(i)(2)) of the primary State shall apply to group health 
coverage offered by a local government employee health 
benefits pool or program in the primary State and in any 
secondary State, but only if the coverage and the pool or 
program comply with the conditions of this section with 
respect to the offering of coverage in any secondary State. 
‘‘(d) LIMITED APPLICATION OF SECONDARY STATE 
LAWS.— 
‘‘(1) IN GENERAL.—Except as provided in this 
section, a local government employee health benefits 
pool or program that offers group health coverage in 
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a secondary State to the officers, employees, or retir-
ees (and their dependents) of a local government lo-
cated in such secondary State, is exempt from any 
covered laws of the secondary State (and any rules, 
regulations, agreements, or orders sought or issued 
by such State under or related to such covered 
laws). 
‘‘(2) SECONDARY STATE AUTHORITY.—A sec-
ondary State may require a local government em-
ployee health benefits pool or program to do any or 
all of the following: 
‘‘(A) REGISTRATION.—To register with an 
applicable State authority in such State with 
jurisdiction over local government employee 
health benefits pools or programs and designate 
such authority as its agent solely for the pur-
pose of receiving service of legal documents or 
process. 
‘‘(B) DOCUMENTATION.—To file with an 
applicable state authority in such State— 
‘‘(i) a written intent to do business in 
that State; 
‘‘(ii) copies of the membership or 
interlocal agreements entered into between 
the local government employee health bene-
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fits pool or program and a local govern-
ment of that State; and 
‘‘(iii) copies of annual audited finan-
cial statements of the local government 
employee health benefits pool or program 
filed with the primary State. 
‘‘(C) COMPLIANCE WITH INJUNCTIONS.— 
To comply with an injunction issued by a court 
of competent jurisdiction, upon a petition by an 
applicable State authority in such State alleging 
that the pool or program is in hazardous finan-
cial condition. 
‘‘(D) COMPLIANCE
WITH
STATE
FRAUD 
AND ABUSE LAWS.—To comply with any State 
law regarding fraud and abuse, except that if 
the State seeks an injunction regarding the con-
duct described in this subparagraph, such in-
junction must be obtained from a court of com-
petent jurisdiction. 
‘‘(E) COMPLIANCE
WITH
STATE
UNFAIR 
CLAIMS
SETTLEMENT
PRACTICES
LAWS.—To 
comply with any State law regarding unfair 
claims settlement practices. 
‘‘(3) LIMITATIONS ON SECONDARY STATE AU-
THORITY.—If a local government employee health 
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benefits pool or program offers group health insur-
ance coverage to officials, employees, and retirees 
(and their dependents) of a local government located 
in a secondary State pursuant to subsection (b), 
such secondary State may not do any of the fol-
lowing: 
‘‘(A) COUNTERSIGNED
BY
LOCAL
AGENT 
OR
BROKER.—Require any group health cov-
erage issued by the pool or program to be 
countersigned by an insurance agent or broker 
residing in that secondary State. 
‘‘(B) SUBMIT TO DUPLICATIVE FINANCIAL 
EXAMINATIONS.—Require the pool or program 
to submit to an examination of its financial 
condition by an applicable State authority in 
such State, unless— 
‘‘(i) an applicable State authority of 
the primary State has not done an exam-
ination within the period recommended by 
the National Association of Insurance 
Commissioners; and 
‘‘(ii) any such examination by the sec-
ondary State is conducted in accordance 
with the examiners’ handbook of the Na-
tional Association of Insurance Commis-
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sioners and is coordinated to avoid unjusti-
fied duplication and unjustified repetition. 
‘‘(C) DISCRIMINATE
AGAINST
POOL
OR 
PROGRAM.—Otherwise discriminate against the 
pool or program issuing group health coverage 
in both the primary State and in any secondary 
State. 
‘‘(e) BENEFIT REQUIREMENTS.—Group health cov-
erage offered by a local government employee health bene-
fits pool or program shall be at least as comprehensive 
as the coverage of the essential health benefits under sec-
tion 1302(b) of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18022(b)). 
‘‘(f) DISCLOSURE REQUIREMENT.—Prior to pro-
viding group health coverage to the officers, employees, 
or retirees (and their dependents) of a local government 
located in a secondary State, a local government employee 
health benefits pool or program shall provide notice to 
such individuals that the health coverage is governed by 
the covered laws and regulations of the primary State, as 
well as by any applicable Federal laws and regulations. 
‘‘(g) STATUS OF GROUP HEALTH COVERAGE IN SEC-
ONDARY STATE.—A local government employee health 
benefits pool or program that is not regulated as an in-
surer in its primary State, and whose group health plans 
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are not regulated as insurance in its primary State, shall 
not be subject to the jurisdiction of a State insurance reg-
ulatory agency in any secondary State. 
‘‘(h) DESIGNATION OF PRIMARY STATE.— 
‘‘(1) DESIGNATION
OF
A
SINGLE
STATE.—A 
local government employee health benefits pool or 
program may only designate one State as its pri-
mary State with respect to all such coverage it offers 
under this section. 
‘‘(2) 
INITIAL
OPERATIONS
IN
PRIMARY 
STATE.—Such pool or program may not offer group 
health coverage in a secondary State until it is 
deemed to be doing business in the primary State. 
‘‘(i) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE
STATE
AUTHORITY.—The 
term ‘applicable State authority’ means, with respect 
to a local government employee health benefits pool 
or program in a State, any official or officials des-
ignated by the State to administer the requirements 
of this section for the State with respect to such 
pool or program, including the official or officials 
with authority to approve interlocal agreements 
under applicable State law, but shall not include any 
State insurance regulatory agency. 
‘‘(2) COVERED LAWS.— 
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‘‘(A) IN
GENERAL.—The term ‘covered 
laws’ means the laws, rules, regulations, agree-
ments, and orders pertaining to any of the fol-
lowing: 
‘‘(i) Group health coverage issued by 
a local government employee health bene-
fits pool or program. 
‘‘(ii) The offer, sale, rating (including 
medical 
underwriting), 
renewal, 
and 
issuance of group health coverage to local 
government officials, employees, and retir-
ees or their dependents. 
‘‘(iii) The management, operations, 
and investment activities of a local govern-
ment employee health benefits pool or pro-
gram. 
‘‘(iv) Loss control and claims adminis-
tration for a local government employee 
health benefits pool or program with re-
spect to liability for which the pool or pro-
gram provides coverage. 
‘‘(v) The payment, on a nondiscrim-
inatory basis, of applicable premium and 
other taxes (including high risk pool as-
sessments) which are levied on health in-
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surance issuers, brokers, or policyholders 
under the laws of the State. 
‘‘(B) EXCEPTION.—Such term does not in-
clude any law, rule, regulation, agreement, or 
order governing the use of care or cost manage-
ment techniques, including any requirement re-
lated to provider contracting, network access or 
adequacy, health care data collection, or quality 
assurance. 
‘‘(3) GROUP
HEALTH
COVERAGE.—The term 
‘group health coverage’ means medical care expense 
reimbursement provided under a group health plan. 
‘‘(4) LOCAL
GOVERNMENT.—The term ‘local 
government’ means a county, municipality, special 
district, school district, junior college district, hous-
ing authority, or other political subdivision or public 
entity defined under State law. 
‘‘(5) LOCAL GOVERNMENT EMPLOYEE HEALTH 
BENEFITS POOL OR PROGRAM.—The term ‘local gov-
ernment employee health benefits pool or program’ 
means a risk pool authorized or permitted by State 
statute or otherwise regulated by a State agency 
under which— 
‘‘(A) a local government or group of local 
governments, directly or through a pool, provide 
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health care benefits primarily for local govern-
ment officials, employees, and retirees and their 
dependents; and 
‘‘(B) such pool may provide health care 
benefits from the assets of the pool or its mem-
ber local governments through any combination 
of self-funded arrangements or fully insured 
products; 
and includes any other State authorized program de-
signed to provide health benefits to local government 
officials, employees, and retirees and their depend-
ents. 
‘‘(6) PRIMARY
STATE.—The term ‘primary 
State’ means, with respect to group health coverage 
offered by a local government employee health bene-
fits pool or program, the State designated by the 
pool or program as the State whose covered laws 
shall govern the pool or program in the issuance of 
such coverage under this part. 
‘‘(7) SECONDARY STATE.—The term ‘secondary 
State’ means, with respect to group health coverage 
offered by a local government employee health bene-
fits pool or program, any State that is not the pri-
mary State.’’. 
Æ 
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