H. R. 3103—23
before attaining 18 years of age and who, as of the last day
of the 30-day period beginning on the date of the adoption
or placement for adoption, is covered under creditable coverage.
The previous sentence shall not apply to coverage before the
date of such adoption or placement for adoption.
‘‘(3) EXCLUSION NOT APPLICABLE TO PREGNANCY.—A group
health plan, and health insurance issuer offering group health
insurance coverage, may not impose any preexisting condition
exclusion relating to pregnancy as a preexisting condition.
‘‘(4) LOSS IF BREAK IN COVERAGE.—Paragraphs (1) and (2)
shall no longer apply to an individual after the end of the
first 63-day period during all of which the individual was not
covered under any creditable coverage.
‘‘(e) CERTIFICATIONS AND DISCLOSURE OF COVERAGE.—
‘‘(1) REQUIREMENT FOR CERTIFICATION OF PERIOD OF CRED-
ITABLE COVERAGE.—
‘‘(A) IN GENERAL.—A group health plan, and a health
insurance issuer offering group health insurance coverage,
shall provide the certification described in subparagraph
(B)—
‘‘(i) at the time an individual ceases to be covered
under the plan or otherwise becomes covered under
a COBRA continuation provision,
‘‘(ii) in the case of an individual becoming covered
under such a provision, at the time the individual
ceases to be covered under such provision, and
‘‘(iii) on the request on behalf of an individual
made not later than 24 months after the date of ces-
sation of the coverage described in clause (i) or (ii),
whichever is later.
The certification under clause (i) may be provided, to the
extent practicable, at a time consistent with notices
required under any applicable COBRA continuation provi-
sion.
‘‘(B) CERTIFICATION.—The certification described in this
subparagraph is a written certification of—
‘‘(i) the period of creditable coverage of the individ-
ual under such plan and the coverage (if any) under
such COBRA continuation provision, and
‘‘(ii) the waiting period (if any) (and affiliation
period, if applicable) imposed with respect to the
individual for any coverage under such plan.
‘‘(C) ISSUER COMPLIANCE.—To the extent that medical
care under a group health plan consists of group health
insurance coverage, the plan is deemed to have satisfied
the certification requirement under this paragraph if the
health insurance issuer offering the coverage provides for
such certification in accordance with this paragraph.
‘‘(2) DISCLOSURE OF INFORMATION ON PREVIOUS BENEFITS.—
In the case of an election described in subsection (c)(3)(B)
by a group health plan or health insurance issuer, if the plan
or issuer enrolls an individual for coverage under the plan
and the individual provides a certification of coverage of the
individual under paragraph (1)—
‘‘(A) upon request of such plan or issuer, the entity
which issued the certification provided by the individual
shall promptly disclose to such requesting plan or issuer
H. R. 3103—24
information on coverage of classes and categories of health
benefits available under such entity’s plan or coverage,
and
‘‘(B) such entity may charge the requesting plan or
issuer for the reasonable cost of disclosing such information.
‘‘(3) REGULATIONS.—The Secretary shall establish rules to
prevent an entity’s failure to provide information under para-
graph (1) or (2) with respect to previous coverage of an individ-
ual from adversely affecting any subsequent coverage of the
individual under another group health plan or health insurance
coverage.
‘‘(f) SPECIAL ENROLLMENT PERIODS.—
‘‘(1) INDIVIDUALS LOSING OTHER COVERAGE.—A group health
plan, and a health insurance issuer offering group health insur-
ance coverage in connection with a group health plan, shall
permit an employee who is eligible, but not enrolled, for cov-
erage under the terms of the plan (or a dependent of such
an employee if the dependent is eligible, but not enrolled,
for coverage under such terms) to enroll for coverage under
the terms of the plan if each of the following conditions is
met:
‘‘(A) The employee or dependent was covered under
a group health plan or had health insurance coverage at
the time coverage was previously offered to the employee
or dependent.
‘‘(B) The employee stated in writing at such time that
coverage under a group health plan or health insurance
coverage was the reason for declining enrollment, but only
if the plan sponsor or issuer (if applicable) required such
a statement at such time and provided the employee with
notice of such requirement (and the consequences of such
requirement) at such time.
‘‘(C) The employee’s or dependent’s coverage described
in subparagraph (A)—
‘‘(i) was under a COBRA continuation provision
and 
the 
coverage 
under 
such 
provision 
was
exhausted; or
‘‘(ii) was not under such a provision and either
the coverage was terminated as a result of loss of
eligibility for the coverage (including as a result of
legal separation, divorce, death, termination of employ-
ment, or reduction in the number of hours of employ-
ment) or employer contributions toward such coverage
were terminated.
‘‘(D) Under the terms of the plan, the employee
requests such enrollment not later than 30 days after the
date of exhaustion of coverage described in subparagraph
(C)(i) or termination of coverage or employer contribution
described in subparagraph (C)(ii).
‘‘(2) FOR DEPENDENT BENEFICIARIES.—
‘‘(A) IN GENERAL.—If—
‘‘(i) a group health plan makes coverage available
with respect to a dependent of an individual,
‘‘(ii) the individual is a participant under the plan
(or has met any waiting period applicable to becoming
a participant under the plan and is eligible to be
H. R. 3103—25
enrolled under the plan but for a failure to enroll
during a previous enrollment period), and
‘‘(iii) a person becomes such a dependent of the
individual through marriage, birth, or adoption or
placement for adoption,
the group health plan shall provide for a dependent special
enrollment period described in subparagraph (B) during
which the person (or, if not otherwise enrolled, the individ-
ual) may be enrolled under the plan as a dependent of
the individual, and in the case of the birth or adoption
of a child, the spouse of the individual may be enrolled
as a dependent of the individual if such spouse is otherwise
eligible for coverage.
‘‘(B) DEPENDENT
SPECIAL
ENROLLMENT
PERIOD.—A
dependent special enrollment period under this subpara-
graph shall be a period of not less than 30 days and
shall begin on the later of—
‘‘(i) 
the 
date 
dependent 
coverage 
is 
made
available, or
‘‘(ii) the date of the marriage, birth, or adoption
or placement for adoption (as the case may be)
described in subparagraph (A)(iii).
‘‘(C) NO WAITING PERIOD.—If an individual seeks to
enroll a dependent during the first 30 days of such a
dependent special enrollment period, the coverage of the
dependent shall become effective—
‘‘(i) in the case of marriage, not later than the
first day of the first month beginning after the date
the completed request for enrollment is received;
‘‘(ii) in the case of a dependent’s birth, as of the
date of such birth; or
‘‘(iii) in the case of a dependent’s adoption or place-
ment for adoption, the date of such adoption or place-
ment for adoption.
‘‘(g) USE OF AFFILIATION PERIOD BY HMOS AS ALTERNATIVE
TO PREEXISTING CONDITION EXCLUSION.—
‘‘(1) IN
GENERAL.—A health maintenance organization
which offers health insurance coverage in connection with a
group health plan and which does not impose any preexisting
condition exclusion allowed under subsection (a) with respect
to any particular coverage option may impose an affiliation
period for such coverage option, but only if—
‘‘(A) such period is applied uniformly without regard
to any health status-related factors; and
‘‘(B) such period does not exceed 2 months (or 3 months
in the case of a late enrollee).
‘‘(2) AFFILIATION PERIOD.—
‘‘(A) DEFINED.—For purposes of this title, the term
‘affiliation period’ means a period which, under the terms
of the health insurance coverage offered by the health
maintenance organization, must expire before the health
insurance coverage becomes effective. The organization is
not required to provide health care services or benefits
during such period and no premium shall be charged to
the participant or beneficiary for any coverage during the
period.
H. R. 3103—26
‘‘(B) BEGINNING.—Such period shall begin on the enroll-
ment date.
‘‘(C) RUNS
CONCURRENTLY
WITH
WAITING
PERIODS.—
An affiliation period under a plan shall run concurrently
with any waiting period under the plan.
‘‘(3) 
ALTERNATIVE
METHODS.—A 
health 
maintenance
organization described in paragraph (1) may use alternative
methods, from those described in such paragraph, to address
adverse selection as approved by the State insurance commis-
sioner or official or officials designated by the State to enforce
the requirements of this part for the State involved with respect
to such issuer.
‘‘SEC. 2702. PROHIBITING 
DISCRIMINATION 
AGAINST 
INDIVIDUAL
PARTICIPANTS AND BENEFICIARIES BASED ON HEALTH
STATUS.
‘‘(a) IN ELIGIBILITY TO ENROLL.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), a group health
plan, and a health insurance issuer offering group health insur-
ance coverage in connection with a group health plan, may
not establish rules for eligibility (including continued eligibility)
of any individual to enroll under the terms of the plan based
on any of the following health status-related factors in relation
to the individual or a dependent of the individual:
‘‘(A) Health status.
‘‘(B) Medical condition (including both physical and
mental illnesses).
‘‘(C) Claims experience.
‘‘(D) Receipt of health care.
‘‘(E) Medical history.
‘‘(F) Genetic information.
‘‘(G) Evidence of insurability (including conditions aris-
ing out of acts of domestic violence).
‘‘(H) Disability.
‘‘(2) NO APPLICATION TO BENEFITS OR EXCLUSIONS.—To the
extent consistent with section 701, paragraph (1) shall not
be construed—
‘‘(A) to require a group health plan, or group health
insurance coverage, to provide particular benefits other
than those provided under the terms of such plan or cov-
erage, or
‘‘(B) to prevent such a plan or coverage from establish-
ing limitations or restrictions on the amount, level, extent,
or nature of the benefits or coverage for similarly situated
individuals enrolled in the plan or coverage.
‘‘(3) CONSTRUCTION.—For purposes of paragraph (1), rules
for eligibility to enroll under a plan include rules defining
any applicable waiting periods for such enrollment.
‘‘(b) IN PREMIUM CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—A group health plan, and a health insur-
ance issuer offering health insurance coverage in connection
with a group health plan, may not require any individual
(as a condition of enrollment or continued enrollment under
the plan) to pay a premium or contribution which is greater
than such premium or contribution for a similarly situated
individual enrolled in the plan on the basis of any health
status-related factor in relation to the individual or to an
H. R. 3103—27
individual enrolled under the plan as a dependent of the
individual.
‘‘(2) CONSTRUCTION.—Nothing in paragraph (1) shall be
construed—
‘‘(A) to restrict the amount that an employer may be
charged for coverage under a group health plan; or
‘‘(B) to prevent a group health plan, and a health
insurance issuer offering group health insurance coverage,
from establishing premium discounts or rebates or modify-
ing otherwise applicable copayments or deductibles in
return for adherence to programs of health promotion and
disease prevention.
‘‘Subpart 2—Provisions Applicable Only to Health Insurance
Issuers
‘‘SEC. 2711. GUARANTEED 
AVAILABILITY 
OF 
COVERAGE 
FOR
EMPLOYERS IN THE GROUP MARKET.
‘‘(a) ISSUANCE OF COVERAGE IN THE SMALL GROUP MARKET.—
‘‘(1) IN GENERAL.—Subject to subsections (c) through (f),
each health insurance issuer that offers health insurance cov-
erage in the small group market in a State—
‘‘(A) must accept every small employer (as defined in
section 2791(e)(4)) in the State that applies for such cov-
erage; and
‘‘(B) must accept for enrollment under such coverage
every eligible individual (as defined in paragraph (2)) who
applies for enrollment during the period in which the
individual first becomes eligible to enroll under the terms
of the group health plan and may not place any restriction
which is inconsistent with section 2702 on an eligible
individual being a participant or beneficiary.
‘‘(2) ELIGIBLE INDIVIDUAL DEFINED.—For purposes of this
section, the term ‘eligible individual’ means, with respect to
a health insurance issuer that offers health insurance coverage
to a small employer in connection with a group health plan
in the small group market, such an individual in relation to
the employer as shall be determined—
‘‘(A) in accordance with the terms of such plan,
‘‘(B) as provided by the issuer under rules of the issuer
which are uniformly applicable in a State to small employ-
ers in the small group market, and
‘‘(C) in accordance with all applicable State laws
governing such issuer and such market.
‘‘(b) ASSURING ACCESS IN THE LARGE GROUP MARKET.—
‘‘(1) REPORTS TO HHS.—The Secretary shall request that
the chief executive officer of each State submit to the Secretary,
by not later December 31, 2000, and every 3 years thereafter
a report on—
‘‘(A) the access of large employers to health insurance
coverage in the State, and
‘‘(B) the circumstances for lack of access (if any) of
large employers (or one or more classes of such employers)
in the State to such coverage.
‘‘(2) TRIENNIAL
REPORTS
TO
CONGRESS.—The Secretary,
based on the reports submitted under paragraph (1) and such
other information as the Secretary may use, shall prepare
H. R. 3103—28
and submit to Congress, every 3 years, a report describing
the extent to which large employers (and classes of such employ-
ers) that seek health insurance coverage in the different States
are able to obtain access to such coverage. Such report shall
include such recommendations as the Secretary determines to
be appropriate.
‘‘(3) GAO REPORT ON LARGE EMPLOYER ACCESS TO HEALTH
INSURANCE COVERAGE.—The Comptroller General shall provide
for a study of the extent to which classes of large employers
in the different States are able to obtain access to health
insurance coverage and the circumstances for lack of access
(if any) to such coverage. The Comptroller General shall submit
to Congress a report on such study not later than 18 months
after the date of the enactment of this title.
‘‘(c) SPECIAL RULES FOR NETWORK PLANS.—
‘‘(1) IN GENERAL.—In the case of a health insurance issuer
that offers health insurance coverage in the small group market
through a network plan, the issuer may—
‘‘(A) limit the employers that may apply for such cov-
erage to those with eligible individuals who live, work,
or reside in the service area for such network plan; and
‘‘(B) within the service area of such plan, deny such
coverage to such employers if the issuer has demonstrated,
if required, to the applicable State authority that—
‘‘(i) it will not have the capacity to deliver services
adequately to enrollees of any additional groups
because of its obligations to existing group contract
holders and enrollees, and
‘‘(ii) it is applying this paragraph uniformly to
all employers without regard to the claims experience
of those employers and their employees (and their
dependents) or any health status-related factor relating
to such employees and dependents.
‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF COVERAGE.—An
issuer, upon denying health insurance coverage in any service
area in accordance with paragraph (1)(B), may not offer cov-
erage in the small group market within such service area
for a period of 180 days after the date such coverage is denied.
‘‘(d) APPLICATION OF FINANCIAL CAPACITY LIMITS.—
‘‘(1) IN
GENERAL.—A health insurance issuer may deny
health insurance coverage in the small group market if the
issuer has demonstrated, if required, to the applicable State
authority that—
‘‘(A) it does not have the financial reserves necessary
to underwrite additional coverage; and
‘‘(B) it is applying this paragraph uniformly to all
employers in the small group market in the State consistent
with applicable State law and without regard to the claims
experience of those employers and their employees (and
their dependents) or any health status-related factor relat-
ing to such employees and dependents.
‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF COVERAGE.—A
health insurance issuer upon denying health insurance coverage
in connection with group health plans in accordance with para-
graph (1) in a State may not offer coverage in connection
with group health plans in the small group market in the
State for a period of 180 days after the date such coverage
H. R. 3103—29
is denied or until the issuer has demonstrated to the applicable
State authority, if required under applicable State law, that
the issuer has sufficient financial reserves to underwrite addi-
tional coverage, whichever is later. An applicable State author-
ity may provide for the application of this subsection on a
service-area-specific basis.
‘‘(e) EXCEPTION TO REQUIREMENT FOR FAILURE TO MEET CER-
TAIN MINIMUM PARTICIPATION OR CONTRIBUTION RULES.—
‘‘(1) IN GENERAL.—Subsection (a) shall not be construed
to preclude a health insurance issuer from establishing
employer contribution rules or group participation rules for
the offering of health insurance coverage in connection with
a group health plan in the small group market, as allowed
under applicable State law.
‘‘(2) RULES DEFINED.—For purposes of paragraph (1)—
‘‘(A) the term ‘employer contribution rule’ means a
requirement relating to the minimum level or amount of
employer contribution toward the premium for enrollment
of participants and beneficiaries; and
‘‘(B) the term ‘group participation rule’ means a
requirement relating to the minimum number of partici-
pants or beneficiaries that must be enrolled in relation
to a specified percentage or number of eligible individuals
or employees of an employer.
‘‘(f) EXCEPTION FOR COVERAGE OFFERED ONLY TO BONA FIDE
ASSOCIATION MEMBERS.—Subsection (a) shall not apply to health
insurance coverage offered by a health insurance issuer if such
coverage is made available in the small group market only through
one or more bona fide associations (as defined in section 2791(d)(3)).
‘‘SEC. 2712. GUARANTEED 
RENEWABILITY 
OF 
COVERAGE 
FOR
EMPLOYERS IN THE GROUP MARKET.
‘‘(a) IN GENERAL.—Except as provided in this section, if a health
insurance issuer offers health insurance coverage in the small or
large group market in connection with a group health plan, the
issuer must renew or continue in force such coverage at the option
of the plan sponsor of the plan.
‘‘(b) GENERAL EXCEPTIONS.—A health insurance issuer may
nonrenew or discontinue health insurance coverage offered in
connection with a group health plan in the small or large group
market based only on one or more of the following:
‘‘(1) NONPAYMENT
OF
PREMIUMS.—The plan sponsor has
failed to pay premiums or contributions in accordance with
the terms of the health insurance coverage or the issuer has
not received timely premium payments.
‘‘(2) FRAUD.—The plan sponsor has performed an act or
practice that constitutes fraud or made an intentional misrepre-
sentation of material fact under the terms of the coverage.
‘‘(3) 
VIOLATION
OF
PARTICIPATION
OR
CONTRIBUTION
RULES.—The plan sponsor has failed to comply with a material
plan provision relating to employer contribution or group
participation rules, as permitted under section 2711(e) in the
case of the small group market or pursuant to applicable State
law in the case of the large group market.
‘‘(4) TERMINATION OF COVERAGE.—The issuer is ceasing to
offer coverage in such market in accordance with subsection
(c) and applicable State law.
H. R. 3103—30
‘‘(5) MOVEMENT
OUTSIDE
SERVICE
AREA.—In the case of
a health insurance issuer that offers health insurance coverage
in the market through a network plan, there is no longer
any enrollee in connection with such plan who lives, resides,
or works in the service area of the issuer (or in the area
for which the issuer is authorized to do business) and, in
the case of the small group market, the issuer would deny
enrollment 
with 
respect 
to 
such 
plan 
under 
section
2711(c)(1)(A).
‘‘(6) ASSOCIATION
MEMBERSHIP
CEASES.—In the case of
health insurance coverage that is made available in the small
or large group market (as the case may be) only through one
or more bona fide associations, the membership of an employer
in the association (on the basis of which the coverage is pro-
vided) ceases but only if such coverage is terminated under
this paragraph uniformly without regard to any health status-
related factor relating to any covered individual.
‘‘(c) REQUIREMENTS
FOR
UNIFORM
TERMINATION
OF
COV-
ERAGE.—
‘‘(1) PARTICULAR TYPE OF COVERAGE NOT OFFERED.—In any
case in which an issuer decides to discontinue offering a particu-
lar type of group health insurance coverage offered in the
small or large group market, coverage of such type may be
discontinued by the issuer in accordance with applicable State
law in such market only if—
‘‘(A) the issuer provides notice to each plan sponsor
provided coverage of this type in such market (and partici-
pants and beneficiaries covered under such coverage) of
such discontinuation at least 90 days prior to the date
of the discontinuation of such coverage;
‘‘(B) the issuer offers to each plan sponsor provided
coverage of this type in such market, the option to purchase
all (or, in the case of the large group market, any) other
health insurance coverage currently being offered by the
issuer to a group health plan in such market; and
‘‘(C) in exercising the option to discontinue coverage
of this type and in offering the option of coverage under
subparagraph (B), the issuer acts uniformly without regard
to the claims experience of those sponsors or any health
status-related factor relating to any participants or bene-
ficiaries covered or new participants or beneficiaries who
may become eligible for such coverage.
‘‘(2) DISCONTINUANCE OF ALL COVERAGE.—
‘‘(A) IN GENERAL.—In any case in which a health insur-
ance issuer elects to discontinue offering all health insur-
ance coverage in the small group market or the large
group market, or both markets, in a State, health insurance
coverage may be discontinued by the issuer only in accord-
ance with applicable State law and if—
‘‘(i) the issuer provides notice to the applicable
State authority and to each plan sponsor (and partici-
pants and beneficiaries covered under such coverage)
of such discontinuation at least 180 days prior to the
date of the discontinuation of such coverage; and
‘‘(ii) all health insurance issued or delivered for
issuance in the State in such market (or markets)
are discontinued and coverage under such health insur-
H. R. 3103—31
ance coverage in such market (or markets) is not
renewed.
‘‘(B) PROHIBITION ON MARKET REENTRY.—In the case
of a discontinuation under subparagraph (A) in a market,
the issuer may not provide for the issuance of any health
insurance coverage in the market and State involved during
the 5-year period beginning on the date of the discontinu-
ation of the last health insurance coverage not so renewed.
‘‘(d) EXCEPTION FOR UNIFORM MODIFICATION OF COVERAGE.—
At the time of coverage renewal, a health insurance issuer may
modify the health insurance coverage for a product offered to a
group health plan—
‘‘(1) in the large group market; or
‘‘(2) in the small group market if, for coverage that is
available in such market other than only through one or more
bona fide associations, such modification is consistent with
State law and effective on a uniform basis among group health
plans with that product.
‘‘(e) APPLICATION
TO
COVERAGE
OFFERED
ONLY
THROUGH
ASSOCIATIONS.—In applying this section in the case of health insur-
ance coverage that is made available by a health insurance issuer
in the small or large group market to employers only through
one or more associations, a reference to ‘plan sponsor’ is deemed,
with respect to coverage provided to an employer member of the
association, to include a reference to such employer.
‘‘SEC. 2713. DISCLOSURE OF INFORMATION.
‘‘(a) DISCLOSURE OF INFORMATION BY HEALTH PLAN ISSUERS.—
In connection with the offering of any health insurance coverage
to a small employer, a health insurance issuer—
‘‘(1) shall make a reasonable disclosure to such employer,
as part of its solicitation and sales materials, of the availability
of information described in subsection (b), and
‘‘(2) upon request of such a small employer, provide such
information.
‘‘(b) INFORMATION DESCRIBED.—
‘‘(1) IN GENERAL.—Subject to paragraph (3), with respect
to a health insurance issuer offering health insurance coverage
to a small employer, information described in this subsection
is information concerning—
‘‘(A) the provisions of such coverage concerning issuer’s
right to change premium rates and the factors that may
affect changes in premium rates;
‘‘(B) the provisions of such coverage relating to renew-
ability of coverage;
‘‘(C) the provisions of such coverage relating to any
preexisting condition exclusion; and
‘‘(D) the benefits and premiums available under all
health insurance coverage for which the employer is quali-
fied.
‘‘(2) FORM OF INFORMATION.—Information under this sub-
section shall be provided to small employers in a manner deter-
mined to be understandable by the average small employer,
and shall be sufficient to reasonably inform small employers
of their rights and obligations under the health insurance cov-
erage.