IB 
Union Calendar No. 23 
115TH CONGRESS 
1ST SESSION H. R. 1101 
[Report No. 115–43] 
To amend title I of the Employee Retirement Income Security Act of 1974 
to improve access and choice for entrepreneurs with small businesses 
with respect to medical care for their employees. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 16, 2017 
Mr. SAM JOHNSON of Texas (for himself and Mr. WALBERG) introduced the 
following bill; which was referred to the Committee on Education and the 
Workforce 
MARCH 17, 2017 
Additional sponsors: Ms. STEFANIK, Mr. MITCHELL, Mr. STIVERS, Mr. FASO, 
Mr. BISHOP of Michigan, Mr. ROE of Tennessee, Mr. HUIZENGA, Ms. 
JENKINS of Kansas, Mr. ROKITA, Mr. ALLEN, Mr. GUTHRIE, Mr. SES-
SIONS, Mrs. WALORSKI, Mr. BOST, Mr. HENSARLING, Mr. WILSON of 
South Carolina, Mr. WEBER of Texas, Mr. PITTENGER, Mr. FLORES, Mr. 
CHABOT, Mr. ROUZER, Mr. HUNTER, Mr. FERGUSON, Mr. GROTHMAN, 
Mrs. RADEWAGEN, Mr. SMITH of Missouri, Mr. BYRNE, Mr. MESSER, 
Mr. DUNCAN of South Carolina, Mr. HULTGREN, Mr. MCCAUL, Mr. 
BILIRAKIS, Mr. SMUCKER, Mr. BARLETTA, Mr. TROTT, and Mr. CRAMER 
MARCH 17, 2017 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on February 16, 2017] 
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A BILL 
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 to improve access and choice for entre-
preneurs with small businesses with respect to medical 
care for their employees. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Business Health Fairness Act of 2017’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Rules governing association health plans. 
Sec. 3. Clarification of treatment of single employer arrangements. 
Sec. 4. Enforcement provisions relating to association health plans. 
Sec. 5. Cooperation between Federal and State authorities. 
Sec. 6. Effective date and transitional and other rules. 
SEC. 2. RULES GOVERNING ASSOCIATION HEALTH PLANS. 
(a) IN GENERAL.—Subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended by 
adding after part 7 the following new part: 
‘‘PART 8—RULES GOVERNING ASSOCIATION 
HEALTH PLANS 
‘‘SEC. 801. ASSOCIATION HEALTH PLANS. 
‘‘(a) IN GENERAL.—For purposes of this part, the term 
‘association health plan’ means a group health plan whose 
sponsor is (or is deemed under this part to be) described 
in subsection (b). 
‘‘(b) SPONSORSHIP.—The sponsor of a group health 
plan is described in this subsection if such sponsor— 
‘‘(1) is organized and maintained in good faith, 
with a constitution and bylaws specifically stating its 
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purpose and providing for periodic meetings on at 
least an annual basis, as a bona fide trade associa-
tion, a bona fide industry association (including a 
rural electric cooperative association or a rural tele-
phone cooperative association), a bona fide profes-
sional association, or a bona fide chamber of com-
merce (or similar bona fide business association, in-
cluding a corporation or similar organization that 
operates on a cooperative basis (within the meaning 
of section 1381 of the Internal Revenue Code of 
1986)), for substantial purposes other than that of ob-
taining or providing medical care; 
‘‘(2) is established as a permanent entity which 
receives the active support of its members and re-
quires for membership payment on a periodic basis of 
dues or payments necessary to maintain eligibility 
for membership in the sponsor; and 
‘‘(3) does not condition membership, such dues or 
payments, or coverage under the plan on the basis of 
health status-related factors with respect to the em-
ployees of its members (or affiliated members), or the 
dependents of such employees, and does not condition 
such dues or payments on the basis of group health 
plan participation. 
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Any sponsor consisting of an association of entities which 
meet the requirements of paragraphs (1), (2), and (3) shall 
be deemed to be a sponsor described in this subsection. 
‘‘SEC. 
802. 
CERTIFICATION 
OF 
ASSOCIATION 
HEALTH 
PLANS. 
‘‘(a) IN GENERAL.—The applicable authority shall 
prescribe by regulation a procedure under which, subject to 
subsection (b), the applicable authority shall certify associa-
tion health plans which apply for certification as meeting 
the requirements of this part. 
‘‘(b) STANDARDS.—Under the procedure prescribed 
pursuant to subsection (a), in the case of an association 
health plan that provides at least one benefit option which 
does not consist of health insurance coverage, the applicable 
authority shall certify such plan as meeting the require-
ments of this part only if the applicable authority is satis-
fied that the applicable requirements of this part are met 
(or, upon the date on which the plan is to commence oper-
ations, will be met) with respect to the plan. 
‘‘(c) REQUIREMENTS
APPLICABLE
TO
CERTIFIED 
PLANS.—An association health plan with respect to which 
certification under this part is in effect shall meet the appli-
cable requirements of this part, effective on the date of cer-
tification (or, if later, on the date on which the plan is 
to commence operations). 
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‘‘(d) REQUIREMENTS
FOR
CONTINUED
CERTIFI-
CATION.—The applicable authority may provide by regula-
tion for continued certification of association health plans 
under this part. 
‘‘(e) CLASS CERTIFICATION
FOR FULLY INSURED 
PLANS.—The applicable authority shall establish a class 
certification procedure for association health plans under 
which all benefits consist of health insurance coverage. 
Under such procedure, the applicable authority shall pro-
vide for the granting of certification under this part to the 
plans in each class of such association health plans upon 
appropriate filing under such procedure in connection with 
plans in such class and payment of the prescribed fee under 
section 807(a). 
‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION 
HEALTH PLANS.—An association health plan which offers 
one or more benefit options which do not consist of health 
insurance coverage may be certified under this part only 
if such plan consists of any of the following: 
‘‘(1) A plan which offered such coverage on the 
date of the enactment of the Small Business Health 
Fairness Act of 2017. 
‘‘(2) A plan under which the sponsor does not re-
strict membership to one or more trades and busi-
nesses or industries and whose eligible participating 
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employers represent a broad cross-section of trades 
and businesses or industries. 
‘‘(3) A plan whose eligible participating employ-
ers represent one or more trades or businesses, or one 
or more industries, consisting of any of the following: 
agriculture; equipment and automobile dealerships; 
barbering and cosmetology; certified public account-
ing practices; child care; construction; dance, theat-
rical and orchestra productions; disinfecting and pest 
control; financial services; fishing; food service estab-
lishments; hospitals; labor organizations; logging; 
manufacturing (metals); mining; medical and dental 
practices; medical laboratories; professional consulting 
services; sanitary services; transportation (local and 
freight); warehousing; wholesaling/distributing; or 
any other trade or business or industry which has 
been indicated as having average or above-average 
risk or health claims experience by reason of State 
rate filings, denials of coverage, proposed premium 
rate levels, or other means demonstrated by such plan 
in accordance with regulations. 
‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 
BOARDS OF TRUSTEES. 
‘‘(a) SPONSOR.—The requirements of this subsection 
are met with respect to an association health plan if the 
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sponsor has met (or is deemed under this part to have met) 
the requirements of section 801(b) for a continuous period 
of not less than 3 years ending with the date of the applica-
tion for certification under this part. 
‘‘(b) BOARD OF TRUSTEES.—The requirements of this 
subsection are met with respect to an association health 
plan if the following requirements are met: 
‘‘(1) FISCAL CONTROL.—The plan is operated, 
pursuant to a trust agreement, by a board of trustees 
which has complete fiscal control over the plan and 
which is responsible for all operations of the plan. 
‘‘(2) RULES OF OPERATION AND FINANCIAL CON-
TROLS.—The board of trustees has in effect rules of 
operation and financial controls, based on a 3-year 
plan of operation, adequate to carry out the terms of 
the plan and to meet all requirements of this title ap-
plicable to the plan. 
‘‘(3) RULES GOVERNING RELATIONSHIP TO PAR-
TICIPATING EMPLOYERS AND TO CONTRACTORS.— 
‘‘(A) BOARD MEMBERSHIP.— 
‘‘(i) IN GENERAL.—Except as provided 
in clauses (ii) and (iii), the members of the 
board of trustees are individuals selected 
from individuals who are the owners, offi-
cers, directors, or employees of the partici-
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pating employers or who are partners in the 
participating employers and actively par-
ticipate in the business. 
‘‘(ii) LIMITATION.— 
‘‘(I) GENERAL RULE.—Except as 
provided in subclauses (II) and (III), 
no such member is an owner, officer, 
director, or employee of, or partner in, 
a contract administrator or other serv-
ice provider to the plan. 
‘‘(II) LIMITED
EXCEPTION
FOR 
PROVIDERS
OF
SERVICES
SOLELY
ON 
BEHALF OF THE SPONSOR.—Officers or 
employees of a sponsor which is a serv-
ice provider (other than a contract ad-
ministrator) to the plan may be mem-
bers of the board if they constitute not 
more than 25 percent of the member-
ship of the board and they do not pro-
vide services to the plan other than on 
behalf of the sponsor. 
‘‘(III) TREATMENT OF PROVIDERS 
OF MEDICAL CARE.—In the case of a 
sponsor which is an association whose 
membership consists primarily of pro-
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viders of medical care, subclause (I) 
shall not apply in the case of any serv-
ice provider described in subclause (I) 
who is a provider of medical care 
under the plan. 
‘‘(iii) CERTAIN
PLANS
EXCLUDED.— 
Clause (i) shall not apply to an association 
health plan which is in existence on the 
date of the enactment of the Small Business 
Health Fairness Act of 2017. 
‘‘(B) SOLE AUTHORITY.—The board has sole 
authority under the plan to approve applications 
for participation in the plan and to contract 
with a service provider to administer the day-to- 
day affairs of the plan. 
‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In the 
case of a group health plan which is established and main-
tained by a franchiser for a franchise network consisting 
of its franchisees— 
‘‘(1) the requirements of subsection (a) and sec-
tion 801(a) shall be deemed met if such requirements 
would otherwise be met if the franchiser were deemed 
to be the sponsor referred to in section 801(b), such 
network were deemed to be an association described in 
section 801(b), and each franchisee were deemed to be 
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a member (of the association and the sponsor) referred 
to in section 801(b); and 
‘‘(2) the requirements of section 804(a)(1) shall 
be deemed met. 
The Secretary may by regulation define for purposes of this 
subsection the terms ‘franchiser’, ‘franchise network’, and 
‘franchisee’. 
‘‘SEC. 
804. 
PARTICIPATION 
AND 
COVERAGE 
REQUIRE-
MENTS. 
‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 
requirements of this subsection are met with respect to an 
association health plan if, under the terms of the plan— 
‘‘(1) each participating employer must be— 
‘‘(A) a member of the sponsor, 
‘‘(B) the sponsor, or 
‘‘(C) an affiliated member of the sponsor 
with respect to which the requirements of sub-
section (b) are met, 
except that, in the case of a sponsor which is a profes-
sional association or other individual-based associa-
tion, if at least one of the officers, directors, or em-
ployees of an employer, or at least one of the individ-
uals who are partners in an employer and who ac-
tively participates in the business, is a member or 
such an affiliated member of the sponsor, partici-
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pating employers may also include such employer; 
and 
‘‘(2) all individuals commencing coverage under 
the plan after certification under this part must be— 
‘‘(A) active or retired owners (including 
self-employed individuals), officers, directors, or 
employees of, or partners in, participating em-
ployers; or 
‘‘(B) the beneficiaries of individuals de-
scribed in subparagraph (A). 
‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EMPLOY-
EES.—In the case of an association health plan in existence 
on the date of the enactment of the Small Business Health 
Fairness Act of 2017, an affiliated member of the sponsor 
of the plan may be offered coverage under the plan as a 
participating employer only if— 
‘‘(1) the affiliated member was an affiliated 
member on the date of certification under this part; 
or 
‘‘(2) during the 12-month period preceding the 
date of the offering of such coverage, the affiliated 
member has not maintained or contributed to a group 
health plan with respect to any of its employees who 
would otherwise be eligible to participate in such as-
sociation health plan. 
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‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re-
quirements of this subsection are met with respect to an 
association health plan if, under the terms of the plan, no 
participating employer may provide health insurance cov-
erage in the individual market for any employee not covered 
under the plan which is similar to the coverage contempora-
neously provided to employees of the employer under the 
plan, if such exclusion of the employee from coverage under 
the plan is based on a health status-related factor with re-
spect to the employee and such employee would, but for such 
exclusion on such basis, be eligible for coverage under the 
plan. 
‘‘(d) PROHIBITION OF DISCRIMINATION AGAINST EM-
PLOYERS AND EMPLOYEES ELIGIBLE TO PARTICIPATE.— 
The requirements of this subsection are met with respect to 
an association health plan if— 
‘‘(1) under the terms of the plan, all employers 
meeting the preceding requirements of this section are 
eligible to qualify as participating employers for all 
geographically available coverage options, unless, in 
the case of any such employer, participation or con-
tribution requirements of the type referred to in sec-
tion 2711 of the Public Health Service Act are not 
met; 
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‘‘(2) upon request, any employer eligible to par-
ticipate is furnished information regarding all cov-
erage options available under the plan; and 
‘‘(3) the applicable requirements of sections 701, 
702, and 703 are met with respect to the plan. 
‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOC-
UMENTS, CONTRIBUTION RATES, AND BEN-
EFIT OPTIONS. 
‘‘(a) IN GENERAL.—The requirements of this section 
are met with respect to an association health plan if the 
following requirements are met: 
‘‘(1) CONTENTS OF GOVERNING INSTRUMENTS.— 
The instruments governing the plan include a written 
instrument, meeting the requirements of an instru-
ment required under section 402(a)(1), which— 
‘‘(A) provides that the board of trustees 
serves as the named fiduciary required for plans 
under section 402(a)(1) and serves in the capac-
ity of a plan administrator (referred to in sec-
tion 3(16)(A)); 
‘‘(B) provides that the sponsor of the plan 
is to serve as plan sponsor (referred to in section 
3(16)(B)); and 
‘‘(C) incorporates the requirements of sec-
tion 806. 
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‘‘(2) CONTRIBUTION
RATES
MUST
BE
NON-
DISCRIMINATORY.— 
‘‘(A) The contribution rates for any partici-
pating small employer do not vary on the basis 
of any health status-related factor in relation to 
employees of such employer or their beneficiaries 
and do not vary on the basis of the type of busi-
ness or industry in which such employer is en-
gaged. 
‘‘(B) Nothing in this title or any other pro-
vision of law shall be construed to preclude an 
association health plan, or a health insurance 
issuer offering health insurance coverage in con-
nection with an association health plan, from— 
‘‘(i) setting contribution rates based on 
the claims experience of the plan; or 
‘‘(ii) varying contribution rates for 
small employers in a State to the extent 
that such rates could vary using the same 
methodology employed in such State for reg-
ulating premium rates in the small group 
market with respect to health insurance cov-
erage offered in connection with bona fide 
associations (within the meaning of section 
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2791(d)(3) of the Public Health Service 
Act), 
subject to the requirements of section 702(b) re-
lating to contribution rates. 
‘‘(3) FLOOR FOR NUMBER OF COVERED INDIVID-
UALS
WITH
RESPECT
TO
CERTAIN
PLANS.—If any 
benefit option under the plan does not consist of 
health insurance coverage, the plan has as of the be-
ginning of the plan year not fewer than 1,000 partici-
pants and beneficiaries. 
‘‘(4) MARKETING REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—If a benefit option 
which consists of health insurance coverage is of-
fered under the plan, State-licensed insurance 
agents shall be used to distribute to small em-
ployers coverage which does not consist of health 
insurance coverage in a manner comparable to 
the manner in which such agents are used to dis-
tribute health insurance coverage. 
‘‘(B) 
STATE-LICENSED
INSURANCE 
AGENTS.—For purposes of subparagraph (A), the 
term ‘State-licensed insurance agents’ means one 
or more agents who are licensed in a State and 
are subject to the laws of such State relating to 
licensure, qualification, testing, examination, 
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and continuing education of persons authorized 
to offer, sell, or solicit health insurance coverage 
in such State. 
‘‘(5) REGULATORY REQUIREMENTS.—Such other 
requirements as the applicable authority determines 
are necessary to carry out the purposes of this part, 
which shall be prescribed by the applicable authority 
by regulation. 
‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO DE-
SIGN BENEFIT OPTIONS.—Subject to section 514(d), noth-
ing in this part or any provision of State law (as defined 
in section 514(c)(1)) shall be construed to preclude an asso-
ciation health plan, or a health insurance issuer offering 
health insurance coverage in connection with an association 
health plan, from exercising its sole discretion in selecting 
the specific items and services consisting of medical care 
to be included as benefits under such plan or coverage, ex-
cept (subject to section 514) in the case of (1) any law to 
the extent that it is not preempted under section 731(a)(1) 
with respect to matters governed by section 711, 712, or 
713, or (2) any law of the State with which filing and ap-
proval of a policy type offered by the plan was initially 
obtained to the extent that such law prohibits an exclusion 
of a specific disease from such coverage. 
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‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS 
FOR 
SOLVENCY 
FOR 
PLANS 
PROVIDING 
HEALTH BENEFITS IN ADDITION TO HEALTH 
INSURANCE COVERAGE. 
‘‘(a) IN GENERAL.—The requirements of this section 
are met with respect to an association health plan if— 
‘‘(1) the benefits under the plan consist solely of 
health insurance coverage; or 
‘‘(2) if the plan provides any additional benefit 
options which do not consist of health insurance cov-
erage, the plan— 
‘‘(A) establishes and maintains reserves 
with respect to such additional benefit options, 
in amounts recommended by the qualified actu-
ary, consisting of— 
‘‘(i) a reserve sufficient for unearned 
contributions; 
‘‘(ii) a reserve sufficient for benefit li-
abilities which have been incurred, which 
have not been satisfied, and for which risk 
of loss has not yet been transferred, and for 
expected administrative costs with respect to 
such benefit liabilities; 
‘‘(iii) a reserve sufficient for any other 
obligations of the plan; and 
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‘‘(iv) a reserve sufficient for a margin 
of error and other fluctuations, taking into 
account the specific circumstances of the 
plan; and 
‘‘(B) establishes and maintains aggregate 
and specific excess/stop loss insurance and sol-
vency indemnification, with respect to such addi-
tional benefit options for which risk of loss has 
not yet been transferred, as follows: 
‘‘(i) The plan shall secure aggregate ex-
cess/stop loss insurance for the plan with an 
attachment point which is not greater than 
125 percent of expected gross annual claims. 
The applicable authority may by regulation 
provide for upward adjustments in the 
amount of such percentage in specified cir-
cumstances in which the plan specifically 
provides for and maintains reserves in ex-
cess of the amounts required under subpara-
graph (A). 
‘‘(ii) The plan shall secure specific ex-
cess/stop loss insurance for the plan with an 
attachment point which is at least equal to 
an amount recommended by the plan’s 
qualified actuary. The applicable authority 
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may by regulation provide for adjustments 
in the amount of such insurance in speci-
fied circumstances in which the plan spe-
cifically provides for and maintains re-
serves in excess of the amounts required 
under subparagraph (A). 
‘‘(iii) The plan shall secure indem-
nification insurance for any claims which 
the plan is unable to satisfy by reason of a 
plan termination. 
Any person issuing to a plan insurance described in clause 
(i), (ii), or (iii) of subparagraph (B) shall notify the Sec-
retary of any failure of premium payment meriting can-
cellation of the policy prior to undertaking such a cancella-
tion. Any regulations prescribed by the applicable authority 
pursuant to clause (i) or (ii) of subparagraph (B) may 
allow for such adjustments in the required levels of excess/ 
stop loss insurance as the qualified actuary may rec-
ommend, taking into account the specific circumstances of 
the plan. 
‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS RE-
SERVES.—In the case of any association health plan de-
scribed in subsection (a)(2), the requirements of this sub-
section are met if the plan establishes and maintains sur-
plus in an amount at least equal to— 
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‘‘(1) $500,000, or 
‘‘(2) such greater amount (but not greater than 
$2,000,000) as may be set forth in regulations pre-
scribed by the applicable authority, considering the 
level of aggregate and specific excess/stop loss insur-
ance provided with respect to such plan and other 
factors related to solvency risk, such as the plan’s pro-
jected levels of participation or claims, the nature of 
the plan’s liabilities, and the types of assets available 
to assure that such liabilities are met. 
‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of any 
association health plan described in subsection (a)(2), the 
applicable authority may provide such additional require-
ments relating to reserves, excess/stop loss insurance, and 
indemnification insurance as the applicable authority con-
siders appropriate. Such requirements may be provided by 
regulation with respect to any such plan or any class of 
such plans. 
‘‘(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSUR-
ANCE.—The applicable authority may provide for adjust-
ments to the levels of reserves otherwise required under sub-
sections (a) and (b) with respect to any plan or class of 
plans to take into account excess/stop loss insurance pro-
vided with respect to such plan or plans. 
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‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The ap-
plicable authority may permit an association health plan 
described in subsection (a)(2) to substitute, for all or part 
of the requirements of this section (except subsection 
(a)(2)(B)(iii)), such security, guarantee, hold-harmless ar-
rangement, or other financial arrangement as the applica-
ble authority determines to be adequate to enable the plan 
to fully meet all its financial obligations on a timely basis 
and is otherwise no less protective of the interests of partici-
pants and beneficiaries than the requirements for which it 
is substituted. The applicable authority may take into ac-
count, for purposes of this subsection, evidence provided by 
the plan or sponsor which demonstrates an assumption of 
liability with respect to the plan. Such evidence may be 
in the form of a contract of indemnification, lien, bonding, 
insurance, letter of credit, recourse under applicable terms 
of the plan in the form of assessments of participating em-
ployers, security, or other financial arrangement. 
‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT OF 
BENEFITS BY CERTAIN PLANS IN DISTRESS.— 
‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSOCIA-
TION HEALTH PLAN FUND.— 
‘‘(A) IN GENERAL.—In the case of an asso-
ciation health plan described in subsection 
(a)(2), the requirements of this subsection are 
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met if the plan makes payments into the Asso-
ciation Health Plan Fund under this subpara-
graph when they are due. Such payments shall 
consist of annual payments in the amount of 
$5,000, and, in addition to such annual pay-
ments, such supplemental payments as the Sec-
retary may determine to be necessary under 
paragraph (2). Payments under this paragraph 
are payable to the Fund at the time determined 
by the Secretary. Initial payments are due in 
advance of certification under this part. Pay-
ments shall continue to accrue until a plan’s as-
sets are distributed pursuant to a termination 
procedure. 
‘‘(B) PENALTIES
FOR
FAILURE
TO
MAKE 
PAYMENTS.—If any payment is not made by a 
plan when it is due, a late payment charge of 
not more than 100 percent of the payment which 
was not timely paid shall be payable by the plan 
to the Fund. 
‘‘(C) CONTINUED
DUTY
OF
THE
SEC-
RETARY.—The Secretary shall not cease to carry 
out the provisions of paragraph (2) on account 
of the failure of a plan to pay any payment 
when due. 
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‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE EX-
CESS/STOP LOSS INSURANCE COVERAGE AND INDEM-
NIFICATION
INSURANCE
COVERAGE
FOR
CERTAIN 
PLANS.—In any case in which the applicable author-
ity determines that there is, or that there is reason to 
believe that there will be: (A) A failure to take nec-
essary corrective actions under section 809(a) with re-
spect to an association health plan described in sub-
section (a)(2); or (B) a termination of such a plan 
under section 809(b) or 810(b)(8) (and, if the appli-
cable authority is not the Secretary, certifies such de-
termination to the Secretary), the Secretary shall de-
termine the amounts necessary to make payments to 
an insurer (designated by the Secretary) to maintain 
in force excess/stop loss insurance coverage or indem-
nification insurance coverage for such plan, if the 
Secretary determines that there is a reasonable expec-
tation that, without such payments, claims would not 
be satisfied by reason of termination of such coverage. 
The Secretary shall, to the extent provided in advance 
in appropriation Acts, pay such amounts so deter-
mined to the insurer designated by the Secretary. 
‘‘(3) ASSOCIATION HEALTH PLAN FUND.— 
‘‘(A) IN GENERAL.—There is established on 
the books of the Treasury a fund to be known as 
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the ‘Association Health Plan Fund’. The Fund 
shall be available for making payments pursuant 
to paragraph (2). The Fund shall be credited 
with payments received pursuant to paragraph 
(1)(A), penalties received pursuant to paragraph 
(1)(B); and earnings on investments of amounts 
of the Fund under subparagraph (B). 
‘‘(B) INVESTMENT.—Whenever the Secretary 
determines that the moneys of the fund are in ex-
cess of current needs, the Secretary may request 
the investment of such amounts as the Secretary 
determines advisable by the Secretary of the 
Treasury in obligations issued or guaranteed by 
the United States. 
‘‘(g) EXCESS/STOP LOSS INSURANCE.—For purposes 
of this section— 
‘‘(1) AGGREGATE
EXCESS/STOP
LOSS
INSUR-
ANCE.—The term ‘aggregate excess/stop loss insur-
ance’ means, in connection with an association health 
plan, a contract— 
‘‘(A) under which an insurer (meeting such 
minimum standards as the applicable authority 
may prescribe by regulation) provides for pay-
ment to the plan with respect to aggregate claims 
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under the plan in excess of an amount or 
amounts specified in such contract; 
‘‘(B) which is guaranteed renewable; and 
‘‘(C) which allows for payment of premiums 
by any third party on behalf of the insured plan. 
‘‘(2) SPECIFIC EXCESS/STOP LOSS INSURANCE.— 
The term ‘specific excess/stop loss insurance’ means, 
in connection with an association health plan, a con-
tract— 
‘‘(A) under which an insurer (meeting such 
minimum standards as the applicable authority 
may prescribe by regulation) provides for pay-
ment to the plan with respect to claims under 
the plan in connection with a covered individual 
in excess of an amount or amounts specified in 
such contract in connection with such covered in-
dividual; 
‘‘(B) which is guaranteed renewable; and 
‘‘(C) which allows for payment of premiums 
by any third party on behalf of the insured plan. 
‘‘(h) INDEMNIFICATION INSURANCE.—For purposes of 
this section, the term ‘indemnification insurance’ means, in 
connection with an association health plan, a contract— 
‘‘(1) under which an insurer (meeting such min-
imum standards as the applicable authority may pre-
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scribe by regulation) provides for payment to the plan 
with respect to claims under the plan which the plan 
is unable to satisfy by reason of a termination pursu-
ant to section 809(b) (relating to mandatory termi-
nation); 
‘‘(2) 
which 
is 
guaranteed 
renewable 
and 
noncancellable for any reason (except as the applica-
ble authority may prescribe by regulation); and 
‘‘(3) which allows for payment of premiums by 
any third party on behalf of the insured plan. 
‘‘(i) RESERVES.—For purposes of this section, the term 
‘reserves’ means, in connection with an association health 
plan, plan assets which meet the fiduciary standards under 
part 4 and such additional requirements regarding liquid-
ity as the applicable authority may prescribe by regulation. 
‘‘(j) SOLVENCY STANDARDS WORKING GROUP.— 
‘‘(1) IN
GENERAL.—Within 90 days after the 
date of the enactment of the Small Business Health 
Fairness Act of 2017, the applicable authority shall 
establish a Solvency Standards Working Group. In 
prescribing the initial regulations under this section, 
the applicable authority shall take into account the 
recommendations of such Working Group. 
‘‘(2) MEMBERSHIP.—The Working Group shall 
consist of not more than 15 members appointed by the 
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applicable authority. The applicable authority shall 
include among persons invited to membership on the 
Working Group at least one of each of the following: 
‘‘(A) A representative of the National Asso-
ciation of Insurance Commissioners. 
‘‘(B) A representative of the American 
Academy of Actuaries. 
‘‘(C) A representative of the State govern-
ments, or their interests. 
‘‘(D) A representative of existing self-in-
sured arrangements, or their interests. 
‘‘(E) A representative of associations of the 
type referred to in section 801(b)(1), or their in-
terests. 
‘‘(F) A representative of multiemployer 
plans that are group health plans, or their inter-
ests. 
‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE-
LATED REQUIREMENTS. 
‘‘(a) FILING FEE.—Under the procedure prescribed 
pursuant to section 802(a), an association health plan shall 
pay to the applicable authority at the time of filing an ap-
plication for certification under this part a filing fee in 
the amount of $5,000, which shall be available in the case 
of the Secretary, to the extent provided in appropriation 
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Acts, for the sole purpose of administering the certification 
procedures applicable with respect to association health 
plans. 
‘‘(b) INFORMATION TO BE INCLUDED IN APPLICATION 
FOR
CERTIFICATION.—An application for certification 
under this part meets the requirements of this section only 
if it includes, in a manner and form which shall be pre-
scribed by the applicable authority by regulation, at least 
the following information: 
‘‘(1) IDENTIFYING
INFORMATION.—The names 
and addresses of— 
‘‘(A) the sponsor; and 
‘‘(B) the members of the board of trustees of 
the plan. 
‘‘(2) STATES IN WHICH PLAN INTENDS TO DO 
BUSINESS.—The States in which participants and 
beneficiaries under the plan are to be located and the 
number of them expected to be located in each such 
State. 
‘‘(3) BONDING REQUIREMENTS.—Evidence pro-
vided by the board of trustees that the bonding re-
quirements of section 412 will be met as of the date 
of the application or (if later) commencement of oper-
ations. 
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‘‘(4) PLAN DOCUMENTS.—A copy of the docu-
ments governing the plan (including any bylaws and 
trust agreements), the summary plan description, and 
other material describing the benefits that will be pro-
vided to participants and beneficiaries under the 
plan. 
‘‘(5) AGREEMENTS WITH SERVICE PROVIDERS.— 
A copy of any agreements between the plan and con-
tract administrators and other service providers. 
‘‘(6) FUNDING REPORT.—In the case of associa-
tion health plans providing benefits options in addi-
tion to health insurance coverage, a report setting 
forth information with respect to such additional ben-
efit options determined as of a date within the 120- 
day period ending with the date of the application, 
including the following: 
‘‘(A) RESERVES.—A statement, certified by 
the board of trustees of the plan, and a statement 
of actuarial opinion, signed by a qualified actu-
ary, that all applicable requirements of section 
806 are or will be met in accordance with regu-
lations which the applicable authority shall pre-
scribe. 
‘‘(B) 
ADEQUACY
OF
CONTRIBUTION 
RATES.—A statement of actuarial opinion, 
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signed by a qualified actuary, which sets forth a 
description of the extent to which contribution 
rates are adequate to provide for the payment of 
all obligations and the maintenance of required 
reserves under the plan for the 12-month period 
beginning with such date within such 120-day 
period, taking into account the expected coverage 
and experience of the plan. If the contribution 
rates are not fully adequate, the statement of ac-
tuarial opinion shall indicate the extent to which 
the rates are inadequate and the changes needed 
to ensure adequacy. 
‘‘(C) CURRENT AND PROJECTED VALUE OF 
ASSETS AND LIABILITIES.—A statement of actu-
arial opinion signed by a qualified actuary, 
which sets forth the current value of the assets 
and liabilities accumulated under the plan and 
a projection of the assets, liabilities, income, and 
expenses of the plan for the 12-month period re-
ferred to in subparagraph (B). The income state-
ment shall identify separately the plan’s admin-
istrative expenses and claims. 
‘‘(D) COSTS OF COVERAGE TO BE CHARGED 
AND OTHER EXPENSES.—A statement of the costs 
of 
coverage 
to 
be 
charged, 
including 
an 
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itemization of amounts for administration, re-
serves, and other expenses associated with the op-
eration of the plan. 
‘‘(E) OTHER INFORMATION.—Any other in-
formation as may be determined by the applica-
ble authority, by regulation, as necessary to 
carry out the purposes of this part. 
‘‘(c) FILING
NOTICE
OF
CERTIFICATION
WITH 
STATES.—A certification granted under this part to an as-
sociation health plan shall not be effective unless written 
notice of such certification is filed with the applicable State 
authority of each State in which at least 25 percent of the 
participants and beneficiaries under the plan are located. 
For purposes of this subsection, an individual shall be con-
sidered to be located in the State in which a known address 
of such individual is located or in which such individual 
is employed. 
‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case of 
any association health plan certified under this part, de-
scriptions of material changes in any information which 
was required to be submitted with the application for the 
certification under this part shall be filed in such form and 
manner as shall be prescribed by the applicable authority 
by regulation. The applicable authority may require by reg-
ulation prior notice of material changes with respect to 
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specified matters which might serve as the basis for suspen-
sion or revocation of the certification. 
‘‘(e) REPORTING REQUIREMENTS FOR CERTAIN ASSO-
CIATION HEALTH PLANS.—An association health plan cer-
tified under this part which provides benefit options in ad-
dition to health insurance coverage for such plan year shall 
meet the requirements of section 103 by filing an annual 
report under such section which shall include information 
described in subsection (b)(6) with respect to the plan year 
and, notwithstanding section 104(a)(1)(A), shall be filed 
with the applicable authority not later than 90 days after 
the close of the plan year (or on such later date as may 
be prescribed by the applicable authority). The applicable 
authority may require by regulation such interim reports 
as it considers appropriate. 
‘‘(f) ENGAGEMENT
OF QUALIFIED ACTUARY.—The 
board of trustees of each association health plan which pro-
vides benefits options in addition to health insurance cov-
erage and which is applying for certification under this 
part or is certified under this part shall engage, on behalf 
of all participants and beneficiaries, a qualified actuary 
who shall be responsible for the preparation of the materials 
comprising information necessary to be submitted by a 
qualified actuary under this part. The qualified actuary 
shall utilize such assumptions and techniques as are nec-
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essary to enable such actuary to form an opinion as to 
whether the contents of the matters reported under this 
part— 
‘‘(1) are in the aggregate reasonably related to 
the experience of the plan and to reasonable expecta-
tions; and 
‘‘(2) represent such actuary’s best estimate of an-
ticipated experience under the plan. 
The opinion by the qualified actuary shall be made with 
respect to, and shall be made a part of, the annual report. 
‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER-
MINATION. 
‘‘Except as provided in section 809(b), an association 
health plan which is or has been certified under this part 
may terminate (upon or at any time after cessation of ac-
cruals in benefit liabilities) only if the board of trustees, 
not less than 60 days before the proposed termination 
date— 
‘‘(1) provides to the participants and bene-
ficiaries a written notice of intent to terminate stat-
ing that such termination is intended and the pro-
posed termination date; 
‘‘(2) develops a plan for winding up the affairs 
of the plan in connection with such termination in a 
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manner which will result in timely payment of all 
benefits for which the plan is obligated; and 
‘‘(3) submits such plan in writing to the appli-
cable authority. 
Actions required under this section shall be taken in such 
form and manner as may be prescribed by the applicable 
authority by regulation. 
‘‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMI-
NATION. 
‘‘(a) ACTIONS TO AVOID DEPLETION OF RESERVES.— 
An association health plan which is certified under this 
part and which provides benefits other than health insur-
ance coverage shall continue to meet the requirements of sec-
tion 806, irrespective of whether such certification continues 
in effect. The board of trustees of such plan shall determine 
quarterly whether the requirements of section 806 are met. 
In any case in which the board determines that there is 
reason to believe that there is or will be a failure to meet 
such requirements, or the applicable authority makes such 
a determination and so notifies the board, the board shall 
immediately notify the qualified actuary engaged by the 
plan, and such actuary shall, not later than the end of the 
next following month, make such recommendations to the 
board for corrective action as the actuary determines nec-
essary to ensure compliance with section 806. Not later than 
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30 days after receiving from the actuary recommendations 
for corrective actions, the board shall notify the applicable 
authority (in such form and manner as the applicable au-
thority may prescribe by regulation) of such recommenda-
tions of the actuary for corrective action, together with a 
description of the actions (if any) that the board has taken 
or plans to take in response to such recommendations. The 
board shall thereafter report to the applicable authority, in 
such form and frequency as the applicable authority may 
specify to the board, regarding corrective action taken by 
the board until the requirements of section 806 are met. 
‘‘(b) MANDATORY TERMINATION.—In any case in 
which— 
‘‘(1) the applicable authority has been notified 
under subsection (a) (or by an issuer of excess/stop 
loss insurance or indemnity insurance pursuant to 
section 806(a)) of a failure of an association health 
plan which is or has been certified under this part 
and is described in section 806(a)(2) to meet the re-
quirements of section 806 and has not been notified 
by the board of trustees of the plan that corrective ac-
tion has restored compliance with such requirements; 
and 
‘‘(2) the applicable authority determines that 
there is a reasonable expectation that the plan will 
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continue to fail to meet the requirements of section 
806, 
the board of trustees of the plan shall, at the direction of 
the applicable authority, terminate the plan and, in the 
course of the termination, take such actions as the applica-
ble authority may require, including satisfying any claims 
referred to in section 806(a)(2)(B)(iii) and recovering for 
the plan any liability under subsection (a)(2)(B)(iii) or (e) 
of section 806, as necessary to ensure that the affairs of the 
plan will be, to the maximum extent possible, wound up 
in a manner which will result in timely provision of all 
benefits for which the plan is obligated. 
‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL-
VENT ASSOCIATION HEALTH PLANS PRO-
VIDING HEALTH BENEFITS IN ADDITION TO 
HEALTH INSURANCE COVERAGE. 
‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR 
INSOLVENT PLANS.—Whenever the Secretary determines 
that an association health plan which is or has been cer-
tified under this part and which is described in section 
806(a)(2) will be unable to provide benefits when due or 
is otherwise in a financially hazardous condition, as shall 
be defined by the Secretary by regulation, the Secretary 
shall, upon notice to the plan, apply to the appropriate 
United States district court for appointment of the Sec-
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retary as trustee to administer the plan for the duration 
of the insolvency. The plan may appear as a party and 
other interested persons may intervene in the proceedings 
at the discretion of the court. The court shall appoint such 
Secretary trustee if the court determines that the trusteeship 
is necessary to protect the interests of the participants and 
beneficiaries or providers of medical care or to avoid any 
unreasonable deterioration of the financial condition of the 
plan. The trusteeship of such Secretary shall continue until 
the conditions described in the first sentence of this sub-
section are remedied or the plan is terminated. 
‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon ap-
pointment as trustee under subsection (a), shall have the 
power— 
‘‘(1) to do any act authorized by the plan, this 
title, or other applicable provisions of law to be done 
by the plan administrator or any trustee of the plan; 
‘‘(2) to require the transfer of all (or any part) 
of the assets and records of the plan to the Secretary 
as trustee; 
‘‘(3) to invest any assets of the plan which the 
Secretary holds in accordance with the provisions of 
the plan, regulations prescribed by the Secretary, and 
applicable provisions of law; 
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‘‘(4) to require the sponsor, the plan adminis-
trator, any participating employer, and any em-
ployee organization representing plan participants to 
furnish any information with respect to the plan 
which the Secretary as trustee may reasonably need 
in order to administer the plan; 
‘‘(5) to collect for the plan any amounts due the 
plan and to recover reasonable expenses of the trustee-
ship; 
‘‘(6) to commence, prosecute, or defend on behalf 
of the plan any suit or proceeding involving the plan; 
‘‘(7) to issue, publish, or file such notices, state-
ments, and reports as may be required by the Sec-
retary by regulation or required by any order of the 
court; 
‘‘(8) to terminate the plan (or provide for its ter-
mination in accordance with section 809(b)) and liq-
uidate the plan assets, to restore the plan to the re-
sponsibility of the sponsor, or to continue the trustee-
ship; 
‘‘(9) to provide for the enrollment of plan par-
ticipants and beneficiaries under appropriate cov-
erage options; and 
‘‘(10) to do such other acts as may be necessary 
to comply with this title or any order of the court and 
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to protect the interests of plan participants and bene-
ficiaries and providers of medical care. 
‘‘(c) NOTICE OF APPOINTMENT.—As soon as prac-
ticable after the Secretary’s appointment as trustee, the Sec-
retary shall give notice of such appointment to— 
‘‘(1) the sponsor and plan administrator; 
‘‘(2) each participant; 
‘‘(3) each participating employer; and 
‘‘(4) if applicable, each employee organization 
which, for purposes of collective bargaining, rep-
resents plan participants. 
‘‘(d) ADDITIONAL DUTIES.—Except to the extent in-
consistent with the provisions of this title, or as may be 
otherwise ordered by the court, the Secretary, upon appoint-
ment as trustee under this section, shall be subject to the 
same duties as those of a trustee under section 704 of title 
11, United States Code, and shall have the duties of a fidu-
ciary for purposes of this title. 
‘‘(e) OTHER PROCEEDINGS.—An application by the 
Secretary under this subsection may be filed notwith-
standing the pendency in the same or any other court of 
any bankruptcy, mortgage foreclosure, or equity receiver-
ship proceeding, or any proceeding to reorganize, conserve, 
or liquidate such plan or its property, or any proceeding 
to enforce a lien against property of the plan. 
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‘‘(f) JURISDICTION OF COURT.— 
‘‘(1) IN GENERAL.—Upon the filing of an appli-
cation for the appointment as trustee or the issuance 
of a decree under this section, the court to which the 
application is made shall have exclusive jurisdiction 
of the plan involved and its property wherever located 
with the powers, to the extent consistent with the pur-
poses of this section, of a court of the United States 
having jurisdiction over cases under chapter 11 of 
title 11, United States Code. Pending an adjudication 
under this section such court shall stay, and upon ap-
pointment by it of the Secretary as trustee, such court 
shall continue the stay of, any pending mortgage fore-
closure, equity receivership, or other proceeding to re-
organize, conserve, or liquidate the plan, the sponsor, 
or property of such plan or sponsor, and any other 
suit against any receiver, conservator, or trustee of 
the plan, the sponsor, or property of the plan or spon-
sor. Pending such adjudication and upon the ap-
pointment by it of the Secretary as trustee, the court 
may stay any proceeding to enforce a lien against 
property of the plan or the sponsor or any other suit 
against the plan or the sponsor. 
‘‘(2) VENUE.—An action under this section may 
be brought in the judicial district where the sponsor 
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or the plan administrator resides or does business or 
where any asset of the plan is situated. A district 
court in which such action is brought may issue proc-
ess with respect to such action in any other judicial 
district. 
‘‘(g) PERSONNEL.—In accordance with regulations 
which shall be prescribed by the Secretary, the Secretary 
shall appoint, retain, and compensate accountants, actu-
aries, and other professional service personnel as may be 
necessary in connection with the Secretary’s service as 
trustee under this section. 
‘‘SEC. 811. STATE ASSESSMENT AUTHORITY. 
‘‘(a) IN GENERAL.—Notwithstanding section 514, a 
State may impose by law a contribution tax on an associa-
tion health plan described in section 806(a)(2), if the plan 
commenced operations in such State after the date of the 
enactment of the Small Business Health Fairness Act of 
2017. 
‘‘(b) CONTRIBUTION TAX.—For purposes of this sec-
tion, the term ‘contribution tax’ imposed by a State on an 
association health plan means any tax imposed by such 
State if— 
‘‘(1) such tax is computed by applying a rate to 
the amount of premiums or contributions, with re-
spect to individuals covered under the plan who are 
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residents of such State, which are received by the plan 
from participating employers located in such State or 
from such individuals; 
‘‘(2) the rate of such tax does not exceed the rate 
of any tax imposed by such State on premiums or 
contributions received by insurers or health mainte-
nance organizations for health insurance coverage of-
fered in such State in connection with a group health 
plan; 
‘‘(3) such tax is otherwise nondiscriminatory; 
and 
‘‘(4) the amount of any such tax assessed on the 
plan is reduced by the amount of any tax or assess-
ment otherwise imposed by the State on premiums, 
contributions, or both received by insurers or health 
maintenance organizations for health insurance cov-
erage, aggregate excess/stop loss insurance (as defined 
in section 806(g)(1)), specific excess/stop loss insur-
ance (as defined in section 806(g)(2)), other insurance 
related to the provision of medical care under the 
plan, or any combination thereof provided by such in-
surers or health maintenance organizations in such 
State in connection with such plan. 
‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION. 
‘‘(a) DEFINITIONS.—For purposes of this part— 
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‘‘(1) GROUP HEALTH PLAN.—The term ‘group 
health plan’ has the meaning provided in section 
733(a)(1) (after applying subsection (b) of this sec-
tion). 
‘‘(2) MEDICAL CARE.—The term ‘medical care’ 
has the meaning provided in section 733(a)(2). 
‘‘(3) HEALTH INSURANCE COVERAGE.—The term 
‘health insurance coverage’ has the meaning provided 
in section 733(b)(1). 
‘‘(4) HEALTH
INSURANCE
ISSUER.—The term 
‘health insurance issuer’ has the meaning provided in 
section 733(b)(2). 
‘‘(5) APPLICABLE AUTHORITY.—The term ‘appli-
cable authority’ means the Secretary, except that, in 
connection with any exercise of the Secretary’s au-
thority regarding which the Secretary is required 
under section 506(d) to consult with a State, such 
term means the Secretary, in consultation with such 
State. 
‘‘(6) HEALTH
STATUS-RELATED
FACTOR.—The 
term ‘health status-related factor’ has the meaning 
provided in section 733(d)(2). 
‘‘(7) INDIVIDUAL MARKET.— 
‘‘(A) IN
GENERAL.—The term ‘individual 
market’ means the market for health insurance 
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coverage offered to individuals other than in con-
nection with a group health plan. 
‘‘(B) 
TREATMENT
OF
VERY
SMALL 
GROUPS.— 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), such term includes coverage offered in 
connection with a group health plan that 
has fewer than 2 participants as current 
employees or participants described in sec-
tion 732(d)(3) on the first day of the plan 
year. 
‘‘(ii) STATE
EXCEPTION.—Clause (i) 
shall not apply in the case of health insur-
ance coverage offered in a State if such 
State regulates the coverage described in 
such clause in the same manner and to the 
same extent as coverage in the small group 
market (as defined in section 2791(e)(5) of 
the Public Health Service Act) is regulated 
by such State. 
‘‘(8) PARTICIPATING EMPLOYER.—The term ‘par-
ticipating employer’ means, in connection with an as-
sociation health plan, any employer, if any indi-
vidual who is an employee of such employer, a part-
ner in such employer, or a self-employed individual 
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who is such employer (or any dependent, as defined 
under the terms of the plan, of such individual) is or 
was covered under such plan in connection with the 
status of such individual as such an employee, part-
ner, or self-employed individual in relation to the 
plan. 
‘‘(9) APPLICABLE STATE AUTHORITY.—The term 
‘applicable State authority’ means, with respect to a 
health insurance issuer in a State, the State insur-
ance commissioner or official or officials designated 
by the State to enforce the requirements of title XXVII 
of the Public Health Service Act for the State involved 
with respect to such issuer. 
‘‘(10) QUALIFIED ACTUARY.—The term ‘qualified 
actuary’ means an individual who is a member of the 
American Academy of Actuaries. 
‘‘(11) AFFILIATED MEMBER.—The term ‘affili-
ated member’ means, in connection with a sponsor— 
‘‘(A) a person who is otherwise eligible to be 
a member of the sponsor but who elects an affili-
ated status with the sponsor, 
‘‘(B) in the case of a sponsor with members 
which consist of associations, a person who is a 
member of any such association and elects an af-
filiated status with the sponsor, or 
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‘‘(C) in the case of an association health 
plan in existence on the date of the enactment of 
the Small Business Health Fairness Act of 2017, 
a person eligible to be a member of the sponsor 
or one of its member associations. 
‘‘(12) LARGE EMPLOYER.—The term ‘large em-
ployer’ means, in connection with a group health 
plan with respect to a plan year, an employer who 
employed an average of at least 51 employees on busi-
ness days during the preceding calendar year and 
who employs at least 2 employees on the first day of 
the plan year. 
‘‘(13) SMALL EMPLOYER.—The term ‘small em-
ployer’ means, in connection with a group health 
plan with respect to a plan year, an employer who 
is not a large employer. 
‘‘(b) RULES OF CONSTRUCTION.— 
‘‘(1) EMPLOYERS
AND
EMPLOYEES.—For pur-
poses of determining whether a plan, fund, or pro-
gram is an employee welfare benefit plan which is an 
association health plan, and for purposes of applying 
this title in connection with such plan, fund, or pro-
gram so determined to be such an employee welfare 
benefit plan— 
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‘‘(A) in the case of a partnership, the term 
‘employer’ (as defined in section 3(5)) includes 
the partnership in relation to the partners, and 
the term ‘employee’ (as defined in section 3(6)) 
includes any partner in relation to the partner-
ship; and 
‘‘(B) in the case of a self-employed indi-
vidual, the term ‘employer’ (as defined in section 
3(5)) and the term ‘employee’ (as defined in sec-
tion 3(6)) shall include such individual. 
‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED AS 
EMPLOYEE WELFARE BENEFIT PLANS.—In the case of 
any plan, fund, or program which was established or 
is maintained for the purpose of providing medical 
care (through the purchase of insurance or otherwise) 
for employees (or their dependents) covered thereunder 
and which demonstrates to the Secretary that all re-
quirements for certification under this part would be 
met with respect to such plan, fund, or program if 
such plan, fund, or program were a group health 
plan, such plan, fund, or program shall be treated for 
purposes of this title as an employee welfare benefit 
plan on and after the date of such demonstration.’’. 
(b) CONFORMING
AMENDMENTS
TO
PREEMPTION 
RULES.— 
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(1) Section 514(b)(6) of such Act (29 U.S.C. 
1144(b)(6)) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(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 
(f)’’; 
(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’’; and 
(C) by adding at the end the following new 
subsection: 
‘‘(f)(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 offer-
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mstockstill on DSK30JT082PROD with BILLS
ing health insurance coverage in connection with an asso-
ciation 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 in-
surance issuer from offering health insurance coverage 
of the same policy type to other employers operating 
in the State which are eligible for coverage under such 
association health plan, whether or not such other em-
ployers 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 con-
nection 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, inso-
far as they may preclude, upon the filing in the same 
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form and manner of such policy form with the appli-
cable State authority in such other State, the ap-
proval 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 respect 
to health insurance issuers or health insurance coverage, 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 ‘associa-
tion health plan’ has the meaning provided in section 
801(a), and the terms ‘health insurance coverage’, ‘partici-
pating employer’, and ‘health insurance issuer’ have the 
meanings provided such terms in section 812, respectively.’’. 
(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-
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ing of section 733(a)(2)),’’ after ‘‘arrangement,’’, 
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(d) of such Act (29 U.S.C. 
1144(d)) 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 Business 
Health Fairness Act of 2017 shall be construed to alter, 
amend, modify, invalidate, impair, or supersede any provi-
sion of this title, except by specific cross-reference to the af-
fected section.’’. 
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(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 solvency or guar-
antee fund protection secured pursuant to this Act or appli-
cable 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, 2022, the Secretary of Labor 
shall report to the Committee on Education and the Work-
force 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 re-
ducing the number of uninsured individuals. 
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(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 relating 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 ben-
efit 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 providing 
health benefits in addition to health insurance coverage. 
‘‘811. State assessment authority. 
‘‘812. Definitions and rules of construction.’’. 
SEC. 3. 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) con-
sists of medical care (as defined in section 812(a)(2)), 
two or more trades or businesses, whether or not in-
corporated, shall be deemed a single employer for any 
plan year of such plan, or any fiscal year of such 
other arrangement, if such trades or businesses are 
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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 referred 
to in subparagraph (A) consists of medical care (as 
defined in section 812(a)(2)), the determination of 
whether a trade or business is under ‘common control’ 
with another trade or business shall be determined 
under regulations of the Secretary applying prin-
ciples 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 section 4001(b), except that, 
for purposes of this paragraph, 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 de-
fined in section 812(a)(2)), in determining, after the 
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application of clause (i), whether benefits are pro-
vided to employees of two or more employers, the ar-
rangement 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 indi-
viduals who are employees or former employees of 
participating employers and who are covered under 
the arrangement,’’. 
SEC. 4. ENFORCEMENT PROVISIONS RELATING TO ASSO-
CIATION HEALTH PLANS. 
(a) CRIMINAL PENALTIES
FOR CERTAIN WILLFUL 
MISREPRESENTATIONS.—Section 501 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1131) is 
amended by adding at the end the following new subsection: 
‘‘(c) 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 estab-
lished or maintained for the purpose of offering or pro-
viding any benefit described in section 3(1) to employees 
or their beneficiaries as— 
‘‘(1) being an association health plan which has 
been certified under part 8; 
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‘‘(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 the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1132) is amended by adding at the end the following 
new subsection: 
‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DESIST 
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-
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ance with applicable State laws that are not su-
perseded 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 public 
and of persons having claims for benefits against the 
plan.’’. 
(c) RESPONSIBILITY FOR CLAIMS PROCEDURE.—Sec-
tion 503 of the Employee Retirement Income Security Act 
of 1974 (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 fidu-
ciary (as applicable) to ensure that the requirements of this 
section are met in connection with claims filed under the 
plan.’’. 
SEC. 5. COOPERATION BETWEEN FEDERAL AND STATE AU-
THORITIES. 
Section 506 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1136) is amended by adding 
at the end the following new subsection: 
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‘‘(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 as-
sociation health plans under part 8 in accord-
ance with regulations of the Secretary applicable 
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 
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‘‘(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 maintained.’’. 
SEC. 6. EFFECTIVE DATE AND TRANSITIONAL AND OTHER 
RULES. 
(a) EFFECTIVE DATE.—The amendments made by this 
Act shall take effect 1 year after the date of the enactment 
of this Act. The Secretary of Labor shall first issue all regu-
lations necessary to carry out the amendments made by this 
Act within 1 year after the date of the enactment of this 
Act. 
(b) TREATMENT OF CERTAIN EXISTING HEALTH BEN-
EFITS PROGRAMS.— 
(1) IN GENERAL.—In any case in which, as of 
the date of the enactment of this Act, an arrangement 
is maintained in a State for the purpose of providing 
benefits consisting of medical care for the employees 
and beneficiaries of its participating employers, at 
least 200 participating employers make contributions 
to such arrangement, such arrangement 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 participating employers, 
upon the filing with the applicable authority (as de-
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mstockstill on DSK30JT082PROD with BILLS
fined in section 812(a)(5) of the Employee Retirement 
Income Security Act of 1974 (as amended by this sub-
title)) by the arrangement of an application for cer-
tification of the arrangement 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 Act; 
(B) the requirements of sections 801(a) and 
803(a) of the Employee Retirement Income Secu-
rity 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 arrangement 
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 
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(E) the arrangement may be certified by 
any applicable authority with respect to its oper-
ations 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 Act as the ap-
plicable 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 subsection. 
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Union Calendar No. 23 
115TH CONGRESS 
1ST SESSION 
H. R. 1101 
[Report No. 115–43] 
A BILL 
To amend title I of the Employee Retirement In-
come Security Act of 1974 to improve access and 
choice for entrepreneurs with small businesses 
with respect to medical care for their employees. 
MARCH 17, 2017 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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