‘‘(E) The preceding subparagraphs of this paragraph
do not apply with respect to any State law in the case
of an association health plan which is certified under part
8.’’.
(2) Section 514 of such Act (29 U.S.C. 1144)
is amended—
(A) in subsection (b)(4), by striking ‘‘Sub-
section (a)’’ and inserting ‘‘Subsections (a) and
(d)’’;
(B) in subsection (b)(5), by striking ‘‘sub-
section (a)’’ in subparagraph (A) and inserting
‘‘subsection (a) of this section and subsections
(a)(2)(B) and (b) of section 805’’, and by strik-
ing ‘‘subsection (a)’’ in subparagraph (B) and
inserting ‘‘subsection (a) of this section or sub-
section (a)(2)(B) or (b) of section 805’’;
(C) by redesignating subsection (d) as sub-
section (e); and
(D) by inserting after subsection (c) the
following new subsection:
‘‘(d)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude, or
have the effect of precluding, a health insurance issuer
from offering health insurance coverage in connection with
an association health plan which is certified under part
8.
‘‘(2) Except as provided in paragraphs (4) and (5)
of subsection (b) of this section—
‘‘(A) In any case in which health insurance cov-
erage of any policy type is offered under an associa-
tion health plan certified under part 8 to a partici-
pating employer operating in such State, the provi-
sions of this title shall supersede any and all laws
of such State insofar as they may preclude a health
insurance issuer from offering health insurance cov-
erage of the same policy type to other employers op-
erating in the State which are eligible for coverage
under such association health plan, whether or not
such other employers are participating employers in
such plan.
‘‘(B) In any case in which health insurance cov-
erage of any policy type is offered in a State under
an association health plan certified under part 8 and
the filing, with the applicable State authority (as de-
fined in section 812(a)(9)), of the policy form in
connection with such policy type is approved by such
State authority, the provisions of this title shall su-
persede any and all laws of any other State in which
health insurance coverage of such type is offered, in-
sofar as they may preclude, upon the filing in the
same form and manner of such policy form with the
applicable State authority in such other State, the
approval of the filing in such other State.
‘‘(3) Nothing in subsection (b)(6)(E) or the preceding
provisions of this subsection shall be construed, with re-
spect to health insurance issuers or health insurance cov-
erage, to supersede or impair the law of any State—
‘‘(A) providing solvency standards or similar
standards regarding the adequacy of insurer capital,
surplus, reserves, or contributions, or
‘‘(B) relating to prompt payment of claims.
‘‘(4) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
‘‘(5) For purposes of this subsection, the term ‘asso-
ciation health plan’ has the meaning provided in section
801(a), and the terms ‘health insurance coverage’, ‘par-
ticipating employer’, and ‘health insurance issuer’ have
the meanings provided such terms in section 812, respec-
tively.’’.
(3) Section 514(b)(6)(A) of such Act (29
U.S.C. 1144(b)(6)(A)) is amended—
(A) in clause (i)(II), by striking ‘‘and’’ at
the end;
(B) in clause (ii), by inserting ‘‘and which
does not provide medical care (within the mean-
ing of section 733(a)(2)),’’ after ‘‘arrange-
ment,’’, and by striking ‘‘title.’’ and inserting
‘‘title, and’’; and
(C) by adding at the end the following new
clause:
‘‘(iii) subject to subparagraph (E), in the case
of any other employee welfare benefit plan which is
a multiple employer welfare arrangement and which
provides medical care (within the meaning of section
733(a)(2)), any law of any State which regulates in-
surance may apply.’’.
(4) Section 514(e) of such Act (as redesignated
by paragraph (2)(C)) is amended—
(A) by striking ‘‘Nothing’’ and inserting
‘‘(1) Except as provided in paragraph (2), noth-
ing’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) Nothing in any other provision of law enacted
on or after the date of the enactment of the Small Busi-
ness Health Fairness Act of 2004 shall be construed to
alter, amend, modify, invalidate, impair, or supersede any
provision of this title, except by specific cross-reference to
the affected section.’’.
(c) PLAN SPONSOR.—Section 3(16)(B) of such Act
(29 U.S.C. 102(16)(B)) is amended by adding at the end
the following new sentence: ‘‘Such term also includes a
person serving as the sponsor of an association health plan
under part 8.’’.
(d) DISCLOSURE OF SOLVENCY PROTECTIONS RE-
LATED TO SELF-INSURED AND FULLY INSURED OPTIONS
UNDER ASSOCIATION HEALTH PLANS.—Section 102(b)
of such Act (29 U.S.C. 102(b)) is amended by adding at
the end the following: ‘‘An association health plan shall
include in its summary plan description, in connection
with each benefit option, a description of the form of sol-
vency or guarantee fund protection secured pursuant to
this Act or applicable State law, if any.’’.
(e) SAVINGS CLAUSE.—Section 731(c) of such Act is
amended by inserting ‘‘or part 8’’ after ‘‘this part’’.
(f) REPORT TO THE CONGRESS REGARDING CERTIFI-
CATION
OF
SELF-INSURED
ASSOCIATION
HEALTH
PLANS.—Not later than January 1, 2009, the Secretary
of Labor shall report to the Committee on Education and
the Workforce of the House of Representatives and the
Committee on Health, Education, Labor, and Pensions of
the Senate the effect association health plans have had,
if any, on reducing the number of uninsured individuals.
(g) CLERICAL AMENDMENT.—The table of contents
in section 1 of the Employee Retirement Income Security
Act of 1974 is amended by inserting after the item relat-
ing to section 734 the following new items:
‘‘PART 8—RULES GOVERNING ASSOCIATION HEALTH PLANS
‘‘801. Association health plans.
‘‘802. Certification of association health plans.
‘‘803. Requirements relating to sponsors and boards of trustees.
‘‘804. Participation and coverage requirements.
‘‘805. Other requirements relating to plan documents, contribution rates, and
benefit options.
‘‘806. Maintenance of reserves and provisions for solvency for plans providing
health benefits in addition to health insurance coverage.
‘‘807. Requirements for application and related requirements.
‘‘808. Notice requirements for voluntary termination.
‘‘809. Corrective actions and mandatory termination.
‘‘810. Trusteeship by the Secretary of insolvent association health plans pro-
viding health benefits in addition to health insurance coverage.
‘‘811. State assessment authority.
‘‘812. Definitions and rules of construction.’’.
SEC. 2003. CLARIFICATION OF TREATMENT OF SINGLE EM-
PLOYER ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(40)(B)) is
amended—
(1) in clause (i), by inserting after ‘‘control
group,’’ the following: ‘‘except that, in any case in
which the benefit referred to in subparagraph (A)
consists of medical care (as defined in section
812(a)(2)), two or more trades or businesses, wheth-
er or not incorporated, shall be deemed a single em-
ployer for any plan year of such plan, or any fiscal
year of such other arrangement, if such trades or
businesses are within the same control group during
such year or at any time during the preceding 1-year
period,’’;
(2) in clause (iii), by striking ‘‘(iii) the deter-
mination’’ and inserting the following:
‘‘(iii)(I) in any case in which the benefit re-
ferred to in subparagraph (A) consists of medical
care (as defined in section 812(a)(2)), the deter-
mination of whether a trade or business is under
‘common control’ with another trade or business
shall be determined under regulations of the Sec-
retary applying principles consistent and coextensive
with the principles applied in determining whether
employees of two or more trades or businesses are
treated as employed by a single employer under sec-
tion 4001(b), except that, for purposes of this para-
graph, an interest of greater than 25 percent may
not be required as the minimum interest necessary
for common control, or
‘‘(II) in any other case, the determination’’;
(3) by redesignating clauses (iv) and (v) as
clauses (v) and (vi), respectively; and
(4) by inserting after clause (iii) the following
new clause:
‘‘(iv) in any case in which the benefit referred
to in subparagraph (A) consists of medical care (as
defined in section 812(a)(2)), in determining, after
the application of clause (i), whether benefits are
provided to employees of two or more employers, the
arrangement shall be treated as having only one par-
ticipating employer if, after the application of clause
(i), the number of individuals who are employees and
former employees of any one participating employer
and who are covered under the arrangement is
greater than 75 percent of the aggregate number of
all individuals who are employees or former employ-
ees of participating employers and who are covered
under the arrangement,’’.
SEC. 2004. ENFORCEMENT PROVISIONS RELATING TO ASSO-
CIATION HEALTH PLANS.
(a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL
MISREPRESENTATIONS.—Section 501 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1131)
is amended—
(1) by inserting ‘‘(a)’’ after ‘‘Sec. 501.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) Any person who willfully falsely represents, to
any employee, any employee’s beneficiary, any employer,
the Secretary, or any State, a plan or other arrangement
established or maintained for the purpose of offering or
providing any benefit described in section 3(1) to employ-
ees or their beneficiaries as—
‘‘(1) being an association health plan which has
been certified under part 8;
‘‘(2) having been established or maintained
under or pursuant to one or more collective bar-
gaining agreements which are reached pursuant to
collective bargaining described in section 8(d) of the
National Labor Relations Act (29 U.S.C. 158(d)) or
paragraph Fourth of section 2 of the Railway Labor
Act (45 U.S.C. 152, paragraph Fourth) or which are
reached pursuant to labor-management negotiations
under similar provisions of State public employee re-
lations laws; or
‘‘(3) being a plan or arrangement described in
section 3(40)(A)(i),
shall, upon conviction, be imprisoned not more than 5
years, be fined under title 18, United States Code, or
both.’’.
(b) CEASE ACTIVITIES ORDERS.—Section 502 of
such Act (29 U.S.C. 1132) is amended by adding at the
end the following new subsection:
‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DE-
SIST ORDERS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
upon application by the Secretary showing the oper-
ation, promotion, or marketing of an association
health plan (or similar arrangement providing bene-
fits consisting of medical care (as defined in section
733(a)(2))) that—
‘‘(A) is not certified under part 8, is sub-
ject under section 514(b)(6) to the insurance
laws of any State in which the plan or arrange-
ment offers or provides benefits, and is not li-
censed, registered, or otherwise approved under
the insurance laws of such State; or
‘‘(B) is an association health plan certified
under part 8 and is not operating in accordance
with the requirements under part 8 for such
certification,
a district court of the United States shall enter an
order requiring that the plan or arrangement cease
activities.
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply in the case of an association health plan or
other arrangement if the plan or arrangement shows
that—
‘‘(A) all benefits under it referred to in
paragraph (1) consist of health insurance cov-
erage; and
‘‘(B) with respect to each State in which
the plan or arrangement offers or provides ben-
efits, the plan or arrangement is operating in
accordance with applicable State laws that are
not superseded under section 514.
‘‘(3) ADDITIONAL
EQUITABLE
RELIEF.—The
court may grant such additional equitable relief, in-
cluding any relief available under this title, as it
deems necessary to protect the interests of the pub-
lic and of persons having claims for benefits against
the plan.’’.
(c) RESPONSIBILITY
FOR CLAIMS PROCEDURE.—
Section 503 of such Act (29 U.S.C. 1133) is amended by
inserting ‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’,
and by adding at the end the following new subsection:
‘‘(b) ASSOCIATION HEALTH PLANS.—The terms of
each association health plan which is or has been certified
under part 8 shall require the board of trustees or the
named fiduciary (as applicable) to ensure that the require-
ments of this section are met in connection with claims
filed under the plan.’’.
SEC. 2005. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
Section 506 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1136) is amended by adding
at the end the following new subsection:
‘‘(d) CONSULTATION WITH STATES WITH RESPECT
TO ASSOCIATION HEALTH PLANS.—
‘‘(1) AGREEMENTS
WITH
STATES.—The Sec-
retary shall consult with the State recognized under
paragraph (2) with respect to an association health
plan regarding the exercise of—
‘‘(A) the Secretary’s authority under sec-
tions 502 and 504 to enforce the requirements
for certification under part 8; and
‘‘(B) the Secretary’s authority to certify
association health plans under part 8 in accord-
ance with regulations of the Secretary applica-
ble to certification under part 8.
‘‘(2) RECOGNITION
OF
PRIMARY
DOMICILE
STATE.—In carrying out paragraph (1), the Sec-
retary shall ensure that only one State will be recog-
nized, with respect to any particular association
health plan, as the State with which consultation is
required. In carrying out this paragraph—
‘‘(A) in the case of a plan which provides
health insurance coverage (as defined in section
812(a)(3)), such State shall be the State with
which filing and approval of a policy type of-
fered by the plan was initially obtained, and
‘‘(B) in any other case, the Secretary shall
take into account the places of residence of the
participants and beneficiaries under the plan
and the State in which the trust is main-
tained.’’.
SEC. 2006. EFFECTIVE DATE AND TRANSITIONAL AND
OTHER RULES.
(a) EFFECTIVE DATE.—The amendments made by
this title shall take effect 1 year after the date of the en-
actment of this title. The Secretary of Labor shall first
issue all regulations necessary to carry out the amend-
ments made by this title within 1 year after the date of
the enactment of this title.
(b) TREATMENT
OF CERTAIN EXISTING HEALTH
BENEFITS PROGRAMS.—
(1) IN GENERAL.—In any case in which, as of
the date of the enactment of this title, an arrange-
ment is maintained in a State for the purpose of
providing benefits consisting of medical care for the
employees and beneficiaries of its participating em-
ployers, at least 200 participating employers make
contributions to such arrangement, such arrange-
ment has been in existence for at least 10 years, and
such arrangement is licensed under the laws of one
or more States to provide such benefits to its par-
ticipating employers, upon the filing with the appli-
cable authority (as defined in section 812(a)(5) of
the Employee Retirement Income Security Act of
1974 (as amended by this subtitle)) by the arrange-
ment of an application for certification of the ar-
rangement under part 8 of subtitle B of title I of
such Act—
(A) such arrangement shall be deemed to
be a group health plan for purposes of title I
of such title;
(B) the requirements of sections 801(a)
and 803(a) of the Employee Retirement Income
Security Act of 1974 shall be deemed met with
respect to such arrangement;
(C) the requirements of section 803(b) of
such Act shall be deemed met, if the arrange-
ment is operated by a board of directors
which—
(i) is elected by the participating em-
ployers, with each employer having one
vote; and
(ii) has complete fiscal control over
the arrangement and which is responsible
for all operations of the arrangement;
(D) the requirements of section 804(a) of
such Act shall be deemed met with respect to
such arrangement; and
(E) the arrangement may be certified by
any applicable authority with respect to its op-
erations in any State only if it operates in such
State on the date of certification.
The provisions of this subsection shall cease to apply
with respect to any such arrangement at such time
after the date of the enactment of this title as the
applicable requirements of this subsection are not
met with respect to such arrangement.
(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘group health plan’’, ‘‘medical
care’’, and ‘‘participating employer’’ shall have the
meanings provided in section 812 of the Employee
Retirement Income Security Act of 1974, except
that the reference in paragraph (7) of such section
to an ‘‘association health plan’’ shall be deemed a
reference to an arrangement referred to in this sub-
section.
Passed the House of Representatives May 12, 2004.
Attest:
Clerk.