I
106TH CONGRESS
1ST SESSION
H. R. 845
To amend the Public Health Service Act, the Employee Retirement Income
Security Act of 1974, and the Internal Revenue Code of 1986 to require
a health insurance issuer to notify participants and beneficiaries of im-
pending termination of coverage resulting from the failure of a group
health plan to pay premiums necessary to maintain coverage, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 24, 1999
Mrs. THURMAN (for herself, Mr. STARK, Mr. YOUNG of Florida, Mr.
KUCINICH, Mr. WAXMAN, and Mr. DAVIS of Florida) introduced the fol-
lowing bill; which was referred to the Committee on Commerce, and in
addition to the Committees on Education and the Workforce, and 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 juris-
diction of the committee concerned
A BILL
To amend the Public Health Service Act, the Employee Re-
tirement Income Security Act of 1974, and the Internal
Revenue Code of 1986 to require a health insurance
issuer to notify participants and beneficiaries of impend-
ing termination of coverage resulting from the failure
of a group health plan to pay premiums necessary to
maintain coverage, 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 ‘‘Beneficiary Health
Coverage Notification Rights Act of 1999’’.
SEC. 2. NOTIFICATION OF DISCONTINUATION OF HEALTH
INSURANCE COVERAGE TO PARTICIPANTS
AND BENEFICIARIES.
(a) GROUP HEALTH PLANS.—
(1) PUBLIC
HEALTH
SERVICE
ACT
AMEND-
MENT.—(A) Subpart 2 of part A of title XXVII of
the Public Health Service Act is amended by adding
at the end the following new section:
‘‘SEC. 2707. PROHIBITION OF RETROACTIVE TERMINATION;
ADVANCE NOTIFICATION OF DISCONTINU-
ATION OF HEALTH INSURANCE COVERAGE
TO PARTICIPANTS AND BENEFICIARIES.
‘‘A health insurance issuer offering group health in-
surance coverage in connection with a group health plan
may not terminate the coverage with respect to the plan
(or allow the coverage to lapse) because the plan failed
to pay to the issuer premiums necessary to maintain the
coverage unless the issuer, at least 30 days before the ef-
fective date of termination or lapse of the coverage, pro-
vides written notice to each participant or beneficiary
whose coverage would so terminate or lapse, indicating the
fact and effective date of such termination or lapse of cov-
erage.’’.
(B) Section 2723(c) of such Act (42 U.S.C.
300gg–23(c)) is amended by striking ‘‘section 2704’’
and inserting ‘‘sections 2704 and 2707’’.
(2) ERISA AMENDMENT.—(A) Subpart B of
part 7 of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974 is amended by
adding at the end the following new section:
‘‘SEC. 714. PROHIBITION OF RETROACTIVE TERMINATION;
ADVANCE NOTIFICATION OF DISCONTINU-
ATION OF HEALTH INSURANCE COVERAGE
TO PARTICIPANTS AND BENEFICIARIES.
‘‘A health insurance issuer offering group health in-
surance coverage in connection with a group health plan
may not terminate the coverage with respect to the plan
(or allow the coverage to lapse) because the plan failed
to pay to the issuer premiums necessary to maintain the
coverage unless the issuer, at least 30 days before the ef-
fective date of termination or lapse of the coverage, pro-
vides written notice to each participant or beneficiary
whose coverage would so terminate or lapse, indicating the
fact and effective date of such termination or lapse of cov-
erage.’’.
(B) Section 732(a) of such Act (29 U.S.C.
1191a(a)) is amended by striking ‘‘section 711’’ and
inserting ‘‘sections 711 and 714’’.
(C) 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 of retroactive termination; advance notification of dis-
continuation of health insurance coverage to participants and
beneficiaries.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply with respect to terminations and
lapses of coverage occurring on or after the first day of
the first month that begins more than 60 days after the
date of the enactment of this Act, regardless of the effec-
tive date of such terminations and lapses, but do not apply
to terminations and lapses for which notice has been pro-
vided before such first day.
SEC. 3. DEEMING PERIOD OF HEALTH INSURANCE COV-
ERAGE 
FOR 
PARTICIPANTS 
AND 
BENE-
FICIARIES BETWEEN DISCONTINUATION AND
NOTICE 
OF 
DISCONTINUATION 
OF 
COV-
ERAGE.
(a) GROUP HEALTH PLANS.—
(1) PUBLIC
HEALTH
SERVICE
ACT
AMEND-
MENTS.—
(A) Section 2701(c) of the Public Health
Service Act (42 U.S.C. 300gg(c)) is amended
by adding at the end the following new para-
graph:
‘‘(5) DEEMING PERIOD OF COVERAGE FOR PAR-
TICIPANTS
AND
BENEFICIARIES
BETWEEN
DIS-
CONTINUATION AND NOTICE OF DISCONTINUATION
OF COVERAGE.—
‘‘(A) IN GENERAL.—If—
‘‘(i)(I) a health insurance issuer offer-
ing group health insurance coverage in
connection with a group health plan termi-
nates the coverage with respect to the plan
(or allows the coverage to lapse), or (II)
coverage under a group health plan is ter-
minated; and
‘‘(ii) a participant or beneficiary
whose coverage is so terminated or lapsed
only receives notice of such termination or
lapse after the date that the termination or
lapse takes effect,
for the purposes described in subparagraph (B),
such individual shall be treated as being covered
under the terminated or lapsed group health in-
surance coverage or group health plan during
the deeming period, as defined in subparagraph
(C).
‘‘(B) APPLICATION.—Subparagraph (A)
shall apply—
‘‘(i) for purposes of this part (includ-
ing for purposes of reducing pre-existing
condition exclusion periods and avoiding a
significant break in coverage); and
‘‘(ii) for purposes of applying any
State law that provides for a conversion or
any other health insurance option based on
(or taking into account) loss of group
health insurance coverage or loss of cov-
erage under a group health plan.
‘‘(C) DEEMING
PERIOD
DEFINED.—For
purposes of this paragraph, the term ‘deeming
period’ is the period beginning on the effective
date of the termination or lapse of coverage de-
scribed in subparagraph (A)(i) and ending on
the date on which the participant or beneficiary
receives notice described in subparagraph
(A)(ii).
‘‘(D) NO
ENTITLEMENT
TO
BENEFITS
DURING
DEEMING
PERIOD.—Nothing in this
paragraph shall be construed as entitling any
individual to any benefits under the plan or cov-
erage during the deeming period.’’.
(B) Section 2701(f)(1)(D) of such Act (42
U.S.C. 300gg(f)(1)(D)) is amended by inserting
before the period ‘‘or if later, the date the em-
ployee is notified of such termination’’.
(2) ERISA AMENDMENTS.—
(A) Section 701(c) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C.
1181(c)) is amended by adding at the end the
following new paragraph:
‘‘(5) DEEMING PERIOD OF COVERAGE FOR PAR-
TICIPANTS
AND
BENEFICIARIES
BETWEEN
DIS-
CONTINUATION AND NOTICE OF DISCONTINUATION
OF COVERAGE.—
‘‘(A) IN GENERAL.—If—
‘‘(i)(I) a health insurance issuer offer-
ing group health insurance coverage in
connection with a group health plan termi-
nates the coverage with respect to the plan
(or allows the coverage to lapse), or (II)
coverage under a group health plan is ter-
minated; and
‘‘(ii) a participant or beneficiary
whose coverage is so terminated or lapsed
only receives notice of such termination or
lapse after the date that the termination or
lapse takes effect,
for the purposes described in subparagraph (B),
such individual shall be treated as being covered
under the terminated or lapsed group health in-
surance coverage or group health plan during
the deeming period, as defined in subparagraph
(C).
‘‘(B) APPLICATION.—Subparagraph (A)
shall apply for purposes of this part (including
for purposes of reducing pre-existing condition
exclusion periods and avoiding a significant
break in coverage).
‘‘(C) DEEMING
PERIOD
DEFINED.—For
purposes of this paragraph, the term ‘deeming
period’ is the period beginning on the effective
date of the termination or lapse of coverage de-
scribed in subparagraph (A)(i) and ending on
the date on which the participant or beneficiary
receives notice described in subparagraph
(A)(ii).
‘‘(D) NO
ENTITLEMENT
TO
BENEFITS
DURING
DEEMING
PERIOD.—Nothing in this
paragraph shall be construed as entitling any
individual to any benefits under the plan or cov-
erage during the deeming period.’’.
(B) Section 701(f)(1)(D) of such Act (29
U.S.C. 1181(f)(1)(D)) is amended by inserting
before the period ‘‘or if later, the date the em-
ployee is notified of such termination’’.
(3) 
INTERNAL
REVENUE
CODE
AMEND-
MENTS.—Section 9801(c) of the Internal Revenue
Code of 1986 is amended by adding at the end the
following new paragraph:
‘‘(5) DEEMING PERIOD OF COVERAGE FOR PAR-
TICIPANTS
AND
BENEFICIARIES
BETWEEN
DIS-
CONTINUATION AND NOTICE OF DISCONTINUATION
OF COVERAGE.—
‘‘(A) IN GENERAL.—If—
‘‘(i)(I) a health insurance issuer offer-
ing group health insurance coverage in
connection with a group health plan termi-
nates the coverage with respect to the plan
(or allows the coverage to lapse), or (II)
coverage under a group health plan is ter-
minated; and
‘‘(ii) a participant or beneficiary
whose coverage is so terminated or lapsed
only receives notice of such termination or
lapse after the date that the termination or
lapse takes effect,
for the purposes described in subparagraph (B),
such individual shall be treated as being covered
under the terminated or lapsed group health in-
surance coverage or group health plan during
the deeming period, as defined in subparagraph
(C).
‘‘(B) APPLICATION.—Subparagraph (A)
shall apply for purposes of this part (including
for purposes of reducing pre-existing condition
exclusion periods and avoiding a significant
break in coverage).
‘‘(C) DEEMING
PERIOD
DEFINED.—For
purposes of this paragraph, the term ‘deeming
period’ is the period beginning on the effective
date of the termination or lapse of coverage de-
scribed in subparagraph (A)(i) and ending on
the date on which the participant or beneficiary
receives notice described in subparagraph
(A)(ii).
‘‘(D) NO
ENTITLEMENT
TO
BENEFITS
DURING
DEEMING
PERIOD.—Nothing in this
paragraph shall be construed as entitling any
individual to any benefits under the plan or cov-
erage during the deeming period.’’.
(B) Section 9801(f)(1)(D) of such Code is
amended by inserting before the period ‘‘or if
later, the date the employee is notified of such
termination’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply with respect to terminations and
lapses of coverage occurring on or after the first day of
the first month that begins after the date of the enactment
of this Act, regardless of the effective date of such termi-
nations and lapses, but do not apply to terminations and
lapses for which notice has been provided before such first
day.
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