I
107TH CONGRESS
1ST SESSION
H. R. 3563
To promote and facilitate expansion of coverage under group health plans,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
DECEMBER 20, 2001
Mr. ANDREWS introduced the following bill; which was referred to the Com-
mittee on Education and the Workforce, and in addition to the Com-
mittee on Ways and Means, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
A BILL
To promote and facilitate expansion of coverage under group
health plans, 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 ‘‘Group Health Plan
Coverage Expansion Act of 2001’’.
SEC. 2. PROGRAM TO PROMOTE AND FACILITATE EXPAN-
SION OF COVERAGE UNDER GROUP HEALTH
PLANS.
(a) IN GENERAL.—Part 5 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 is
amended by adding after section 517 (29 U.S.C. 1147)
the following new section:
‘‘SEC. 518. PROMOTION AND FACILITATION OF COVERAGE
UNDER GROUP HEALTH PLANS.
‘‘(a) IN GENERAL.—The Secretary shall establish by
regulation a program—
‘‘(1) to promote and facilitate the availability to
individuals of financial assistance provided by the
Federal Government and by States and political sub-
divisions thereof for the purpose of assisting such in-
dividuals with the payment of employee contribu-
tions to group health plans, and
‘‘(2) to promote and facilitate the establishment
of alternative group purchasing or pooling arrange-
ments, such as purchasing cooperatives for small
businesses, reinsurance pools, or high risk pools.
‘‘(b) INTERGOVERNMENTAL CONSULTATION.—Under
such program, the Secretary shall—
‘‘(1) provide for such ongoing consultation with
agencies and instrumentalities of the Federal Gov-
ernment and of the States and political subdivisions
thereof as is necessary and appropriate to further
the purposes such program, and
‘‘(2) submit to each House of the Congress
such recommendations for such legislative changes
as the Secretary may, from time to time, consider to
be appropriate to further the purposes of such pro-
gram.
‘‘(c) SAFEGUARDS TO ENSURE MAINTENANCE OF
CURRENT LEVELS
OF GOVERNMENTAL SUPPORT
FOR
HEALTH CARE.—The Secretary shall ensure that partici-
pation in the program by any State or political subdivision
thereof with respect to financial assistance described in
subsection (a)(1) may not occur unless the Secretary finds
that any reallocation of funds by such State or political
subdivision in connection with participation in the pro-
gram does not result in a decrease in the number of indi-
viduals in the applicable jurisdiction who have substantial
coverage for health benefits under either public or private
programs.’’.
(b) DEADLINE FOR ESTABLISHING PROGRAM.—The
Secretary of Labor shall issue initial final regulations nec-
essary to carry out the program established under section
518 of the Employee Retirement Income Security Act of
1974 (added by section 2) not later than December 31,
2002.
SEC. 3. NOTIFICATION TO PARTICIPANTS IN EMPLOYEE
BENEFIT PLANS OF AVAILABILITY OF CHILD
HEALTH ASSISTANCE UNDER SCHIP AND
CASH BENEFITS AVAILABLE UNDER SSI.
(a) IN GENERAL.—Section 104 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1024)
is amended—
(1) by redesignating subsection (d) as sub-
section (e); and
(2) by inserting after subsection (c) the fol-
lowing new subsection:
‘‘(d)(1) The administrator of an employee benefit
plan shall include in each summary plan description, up-
dated summary plan description, and summary description
of a modification or change to the plan which is furnished
to participants, and shall provide separately to individuals
claiming benefits under the plan, a summary description
of—
‘‘(A) the child health assistance available under
State child health plans under title XXI of the So-
cial Security Act, and
‘‘(B) the cash benefits available to eligible el-
derly or disabled individuals with limited income and
resources under the supplemental security income
program under title XVI of the Social Security Act.
‘‘(2) The summary description required under para-
graph (1) shall—
‘‘(A) be in a form which shall be prescribed in
regulations of the Secretary, in consultation with the
Secretary of Health and Human Services,
‘‘(B) be written in a manner calculated to be
understood by the average plan participant, and
‘‘(C) include—
‘‘(i) the appropriate telephone number,
Internet website, and mailing address for the
State program providing the assistance de-
scribed in paragraph (1)(A) in the State in
which the participant or beneficiary resides, and
‘‘(ii) the appropriate telephone number,
Internet website, and mailing address for the
supplemental security income program de-
scribed in paragraph (1)(B),
together with the benefits information applicable to
such programs.’’.
(b) ENFORCEMENT.—Section 502(c)(1)(A) of such
Act (29 U.S.C. 1132(c)(1)) is amended by striking ‘‘para-
graph (1) or (4) of section 606 or section 101(e)(1)’’ and
inserting ‘‘section 101(e)(1), section 104(d), or paragraph
(1) or (4) of section 606’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to summary plan de-
scriptions, updated summary plan descriptions, and sum-
mary descriptions of plan modifications or changes fur-
nished to participants or beneficiaries, and in connection
with benefit claims filed, after December 31, 2001.
SEC. 4. PROHIBITION OF LIFETIME LIMITS IN GROUP
HEALTH PLANS.
(a) IN GENERAL.—Subpart B of part 7 of subtitle
B of title I of the Employee Retirement Income Security
Act of 1974 is amended by adding at the end the following
new section:
‘‘SEC. 714. PROHIBITION ON APPLICATION OF LIFETIME
LIMITATIONS.
‘‘(a) REQUIREMENT.—A group health plan, and a
health insurance issuer offering group health insurance
coverage, may not impose any aggregate lifetime limit on
benefits, including any category of benefits, under the plan
or coverage.
‘‘(b) NOTICE UNDER GROUP HEALTH PLAN.—The
imposition of the requirement of this section shall be treat-
ed as a material modification in the terms of the plan de-
scribed in section 102(a)(1), for purposes of assuring no-
tice of such requirements under the plan; except that the
summary description required to be provided under the
last sentence of section 104(b)(1) with respect to such
modification shall be provided by not later than 60 days
after the first day of the first plan year in which such
requirement apply.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 731(c) of such Act (29 U.S.C.
1191(c)) is amended by striking ‘‘section 711’’ and
inserting ‘‘sections 711 and 714’’.
(2) Section 732(a) of such Act (29 U.S.C.
1191a(a)) is amended by striking ‘‘section 711’’ and
inserting ‘‘sections 711 and 714’’.
(3) The table of contents in section 1 of such
Act is amended by inserting after the item relating
to section 713 the following new item:
‘‘Sec. 714. Prohibition on application of lifetime limitations.’’.
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Subject to paragraph (2),
the amendments made by this section apply with re-
spect to group health plans for plan years beginning
on or after January 1, 2003.
(2) COLLECTIVE BARGAINING EXCEPTION.—In
the case of a group health plan maintained pursuant
to 1 or more collective bargaining agreements be-
tween employee representatives and 1 or more em-
ployers ratified before the date of enactment of this
Act, the amendments made by this section shall not
apply to plan years beginning before the later of—
(A) the date on which the last collective
bargaining agreements relating to the plan ter-
minates (determined without regard to any ex-
tension thereof agreed to after the date of en-
actment of this Act), or
(B) January 1, 2003.
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining
agreement relating to the plan which amends the
plan solely to conform to any requirement added by
this section shall not be treated as a termination of
such collective bargaining agreement.
SEC. 5. PROHIBITION OF DISCRIMINATION BASED ON PRE-
EXISTING CONDITIONS.
(a) IN GENERAL.—Subpart B of part 7 of subtitle
B of title I of the Employee Retirement Income Security
Act of 1974 (as amended by section 4) is amended further
by adding at the end the following new section:
‘‘SEC. 715. PROHIBITION ON DISCRIMINATION BASED ON
PRE-EXISTING CONDITIONS.
‘‘(a) IN GENERAL.—A group health plan, and a
health insurance issuer offering group health insurance
coverage, may not impose any change in the premium
rates charged for coverage of participants and bene-
ficiaries under the plan so as to result in a premium
charged to any such participant or beneficiary which is
above that which is charged to otherwise similarly situated
individuals solely on the basis of a pre-existing condition
of such participant or beneficiary.
‘‘(b) NOTICE UNDER GROUP HEALTH PLAN.—The
imposition of the requirement of this section shall be treat-
ed as a material modification in the terms of the plan de-
scribed in section 102(a)(1), for purposes of assuring no-
tice of such requirements under the plan; except that the
summary description required to be provided under the
last sentence of section 104(b)(1) with respect to such
modification shall be provided by not later than 60 days
after the first day of the first plan year in which such
requirement apply.
‘‘(c) PRE-EXISTING CONDITION.—For purposes of
this section, the term ‘pre-existing condition’ means, in
connection with any change in premium rates charged for
coverage of a participant or beneficiary, a medical condi-
tion of the participant or beneficiary that was present be-
fore the effective date of the change in premium rates,
whether or not any medical advice, diagnosis, care, or
treatment was recommended or received before such
date.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 732(a) of such Act (as amended by
section 4 of this Act) is amended further by striking
‘‘sections 711 and 714’’ and inserting ‘‘sections 711,
714, and 715’’.
(2) The table of contents in section 1 of such
Act (as amended by section 4 of this Act) is amend-
ed further by inserting after the item relating to sec-
tion 714 the following new item:
‘‘Sec. 715. Prohibition on discrimination based on pre-existing conditions.’’.
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Subject to paragraph (2),
the amendments made by this section apply with re-
spect to group health plans for plan years beginning
on or after January 1, 2003.
(2) COLLECTIVE BARGAINING EXCEPTION.—In
the case of a group health plan maintained pursuant
to 1 or more collective bargaining agreements be-
tween employee representatives and 1 or more em-
ployers ratified before the date of enactment of this
Act, the amendments made by this section shall not
apply to plan years beginning before the later of—
(A) the date on which the last collective
bargaining agreements relating to the plan ter-
minates (determined without regard to any ex-
tension thereof agreed to after the date of en-
actment of this Act), or
(B) January 1, 2003.
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining
agreement relating to the plan which amends the
plan solely to conform to any requirement added by
this section shall not be treated as a termination of
such collective bargaining agreement.
SEC. 6. PAYMENTS BY PENSION AND ANNUITY PLANS FOR
COBRA BENEFITS.
(a) IN GENERAL.—Section 401 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection
(o) as subsection (p) and by inserting after subsection (n)
the following new subsection:
‘‘(o) COVERED BENEFITS FOR COVERED EMPLOY-
EES.—Under regulations prescribed by the Secretary, a
pension or annuity plan may make payments for pre-
miums for continuation coverage under a group health
plan on behalf of a qualified beneficiary which meet the
requirements of section 4980B(f), but only if such benefits
are subordinate to the retirement benefits provided by the
plan and to the qualified current retiree health liabilities
(as defined in section 420) of a health benefits account
which is part of such plan.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 7. NOTICE TO PARTICIPANTS AND BENEFICIARIES
CLAIMING GROUP HEALTH PLAN BENEFITS
OF AVAILABILITY OF SSI BENEFITS.
(a) IN GENERAL.—Section 609 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1169)
is amended—
(1) by redesignating subsection (e) as sub-
section (f); and
(2) by inserting after subsection (d) the fol-
lowing new subsection:
‘‘(e) NOTICE TO CLAIMANT OF AVAILABLE SSI BEN-
EFITS.—Upon receipt of a claim for benefits under a
group health plan, the administrator of such plan shall,
not later than 30 days after receipt of the claim, provide
to the claimant written notice of the availability to eligible
elderly or disabled individuals with limited income and re-
sources to cash benefits under the supplemental security
income program under title XVI of the Social Security
Act. Such notice shall be in a form which shall be pre-
scribed by the Secretary of Health and Human Services.’’.
(b) ENFORCEMENT.—Section 502(c)(1)(A) of such
Act (29 U.S.C. 1132(c)(1)) is amended by striking ‘‘para-
graph (1) or (4) of section 606 or section 101(e)(1)’’ and
inserting ‘‘section 101(e)(1), paragraph (1) or (4) of sec-
tion 606, or section 609(e)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply in connection with claims for bene-
fits filed during plan years beginning on or after January
1, 2003.
SEC. 8. REQUIREMENT FOR QUALIFIED INDIVIDUALS WHO
OBTAIN EMERGENCY ROOM SERVICES TO
MAINTAIN 
SUBSTANTIAL 
HEALTH 
INSUR-
ANCE COVERAGE FOR 2 YEARS.
(a) ALIENATION OF PENSION BENEFITS TO EN-
FORCE COURT ORDER TO MAINTAIN COVERAGE.—Sec-
tion 206 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1056) is amended by adding at the
end the following new subsection:
‘‘(g) ALIENATION OF PENSION BENEFITS TO EN-
FORCE CERTAIN COURT ORDERS TO MAINTAIN SUBSTAN-
TIAL HEALTH INSURANCE COVERAGE.—
‘‘(1) ALIENATION
OF
PENSION
BENEFITS.—
Subsection (d)(1) shall not apply in connection with
any pension plan with respect to amounts payable,
by an individual who is a participant or beneficiary
under such plan and fails to meet the requirements
of paragraph (2), for the purpose of acquiring and
maintaining health insurance coverage pursuant to
an order of a court of competent jurisdiction under
section 502(c)(7).
‘‘(2) REQUIREMENT OF COVERAGE UPON OB-
TAINING EMERGENCY ROOM SERVICES.—In any case
in which emergency room services are obtained for
a qualified individual or for such individual’s spouse
or dependent, such individual shall be treated as fail-
ing to meet the requirements of this paragraph with
respect to the patient if, at the time that such serv-
ices are obtained, such patient is not covered under
substantial health insurance coverage.
‘‘(3) DEFINITIONS.—For purposes of this
subsection—
‘‘(A) QUALIFIED INDIVIDUAL.—The term
‘qualified individual’ means an individual whose
adjusted gross income for the taxable year pre-
ceding the time emergency room services de-
scribed in paragraph (2) are obtained is greater
than or equal to 500 percent of the poverty line
(as defined by the Office of Management and
Budget).
‘‘(B) EMERGENCY ROOM SERVICES.—The
term ‘emergency room services’ means medical
care at a hospital emergency department (as
defined for purposes of section 1867 of the So-
cial Security Act (42 U.S.C. 1395dd)).’’.
‘‘(C) SUBSTANTIAL
HEALTH
INSURANCE
COVERAGE.—
‘‘(i) IN
GENERAL.—The term ‘sub-
stantial health insurance coverage’ means
health insurance coverage (within the
meaning of section 733(b)(1)) which is de-
termined by the Secretary (in consultation
with the Secretary of Health and Human
Services) to meet the following require-
ments:
‘‘(I) 
AGGREGATE
ACTUARIAL
VALUE EQUIVALENT TO BENCHMARK
PACKAGE.—The coverage has an ag-
gregate actuarial value that is at least
actuarially equivalent to one of the
benchmark benefit packages.
‘‘(II) INCLUSION OF BASIC SERV-
ICES.—The coverage includes benefits
for items and services within each of
the categories of basic services de-
scribed in clause (iii).
‘‘(III) SUBSTANTIAL
ACTUARIAL
VALUE FOR ADDITIONAL SERVICES IN-
CLUDED IN BENCHMARK PACKAGE.—
With respect to each of the categories
of additional services described in
clause (iv) for which coverage is pro-
vided under the benchmark benefit
package used under subclause (I), the
coverage has an actuarial value that is
equal to at least 75 percent of the ac-
tuarial value of the coverage of that
category of services in such package.
‘‘(ii) BENCHMARK
BENEFIT
PACK-
AGES.—The benchmark benefit packages
are as follows:
‘‘(I) 
FEHBP-EQUIVALENT
HEALTH INSURANCE COVERAGE.—The
standard Blue Cross/Blue Shield pre-
ferred provider option service benefit
plan, described in and offered under
section 8903(1) of title 5, United
States Code.
‘‘(II) STATE
EMPLOYEE
COV-
ERAGE.—A health benefits coverage
plan that is offered and generally
available to State employees in the
State involved.
‘‘(III) 
COVERAGE
OFFERED
THROUGH
HMO.—The health insur-
ance coverage plan that is offered by
a health maintenance organization (as
defined in section 2791(b)(3) of the
Public Health Service Act), and has
the largest insured commercial, non-
medicaid enrollment of covered lives of
such coverage plans offered by such a
health maintenance organization in
the State involved.
‘‘(iii) CATEGORIES
OF
BASIC
SERV-
ICES.—For purposes of this subparagraph,
the categories of basic services described in
this clause are as follows:
‘‘(I) Inpatient and outpatient
hospital services.
‘‘(II) Physicians’ surgical and
medical services.
‘‘(III) Laboratory and x-ray serv-
ices.
‘‘(IV) Well-baby and well-child
care, including age-appropriate immu-
nizations.
‘‘(iv) CATEGORIES
OF
ADDITIONAL
SERVICES.—For purposes of this subpara-
graph, the categories of additional services
described in this clause are as follows:
‘‘(I) Coverage of prescription
drugs.
‘‘(II) Mental health services.
‘‘(III) Vision services.
‘‘(IV) Hearing services.
‘‘(v) TREATMENT
OF
OTHER
CAT-
EGORIES.—Nothing in this subparagraph
shall be construed as preventing substan-
tial health insurance coverage from includ-
ing coverage of benefits that are not within
a category of services described in clause
(iii) or (iv).
‘‘(vi) DETERMINATION OF ACTUARIAL
VALUE.—The actuarial value of coverage
of benchmark benefit packages and cov-
erage of any categories of additional serv-
ices under benchmark benefit packages and
under coverage offered by such a plan shall
be set forth in an actuarial opinion in an
actuarial report that has been prepared—
‘‘(I) by an individual who is a
member of the American Academy of
Actuaries;
‘‘(II) using generally accepted ac-
tuarial principles and methodologies;
‘‘(III) using a standardized set of
utilization and price factors;
‘‘(IV) using a standardized popu-
lation that is representative of pri-
vately insured individuals similarly sit-
uated when compared to individuals
expected to be covered under the sub-
stantial health insurance coverage;
‘‘(V) applying the same principles
and factors in comparing the value of
different coverage (or categories of
services); and
‘‘(VI) without taking into ac-
count any differences in coverage
based on the method of delivery or
means of cost control or utilization
used.
The actuary preparing the opinion shall se-
lect and specify in the memorandum the
standardized set and population to be used
under subclauses (III) and (IV).’’.
(b) REMEDY AGAINST QUALIFIED INDIVIDUALS FOR
NOT MAINTAINING SUBSTANTIAL HEALTH INSURANCE
COVERAGE WHILE OBTAINING EMERGENCY ROOM SERV-
ICES.—
(1) IN GENERAL.—Section 502 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1102) is amended—
(A) in subsection (a)(8), by striking ‘‘or’’
at the end;
(B) in subsection (a)(9), by striking the
period and inserting ‘‘; or’’;
(C) by adding at the end of subsection (a)
the following new paragraph:
‘‘(10) by the Secretary or a State, in accord-
ance with subsection (c)(7), to provide appropriate
equitable remedies for failures to meet the require-
ments of section 206(g)(2).’’;
(D) by redesignating subsection (c)(7) as
subsection (c)(8); and
(E) by inserting after subsection (c)(6) the
following new paragraph:
‘‘(7) In any action under subsection (a)(10), the
court may provide appropriate equitable relief in connec-
tion with failures to meet the requirements of section
206(g)(2). Such relief may include an order that the de-
fendant maintain, for at least the 2-year period com-
mencing with the date of the failure described in section
206(g)(2), substantial health insurance coverage (as de-
fined in section 206(g)(3)(B)) covering the patient in-
volved.’’.
(2) 
CONCURRENT
JURISDICTION.—Section
502(e)(1) of such Act (29 U.S.C. 1132(e)(1)) is
amended—
(A) in the first sentence, by striking ‘‘sub-
section (a)(1)(B)’’ and inserting ‘‘paragraph
(1)(B), (7), or (10) of subsection (a) of this
section’’; and
(B) in the last sentence, by striking ‘‘para-
graphs (1)(B) and (7)’’ and inserting ‘‘para-
graphs (1)(B), (7), and (10)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to failures (to meet
the requirements of section 206(g)(2) of the Employee Re-
tirement Income Security Act of 1974) occurring on or
after the date of the enactment of this Act.
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