Beneficiary Notification Rights Act of 1998

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Beneficiary Notification Rights Act 
of 1998''.

SEC. 2. NOTIFICATION TO PARTICIPANTS AND BENEFICIARIES.

    (a) Group Health Plans.--
            (1) Public health service act amendments.--(A) Subpart 2 of 
        part A of title XXVII of the Public Health Service Act is 
        amended by adding at the end the following new section:

``SEC. 2706. NOTIFICATION TO PARTICIPANTS AND BENEFICIARIES.

    ``(a) Requirement.--If a health insurance issuer offering group 
health insurance coverage intends to terminate coverage or allow a 
policy to lapse because a group health plan failed to pay to the issuer 
premiums necessary to maintain coverage, the issuer shall, not later 
than 30 days prior to the date of termination or policy lapse, provide 
written notice to all participants and beneficiaries indicating the 
termination date of such coverage. The issuer may not terminate 
coverage retroactively.
    ``(b) Conversion Option.--In a case in which a health insurance 
issuer terminates health insurance coverage offered in connection with 
a group health plan because a group health plan failed to pay to the 
issuer premiums necessary to maintain coverage, the issuer shall, for a 
period of 180 days beginning on the termination date, provide to all 
participants and beneficiaries the option of enrollment under a 
conversion health plan.
    ``(c) Notice.--A group health plan under this part shall comply 
with the notice requirement under section 713(c) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this section as if such section applied to such plan.''.
            (B) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)), as 
        amended by section 604(b)(2) of Public Law 104-204, is amended 
        by striking ``section 2704'' and inserting ``sections 2704 and 
        2706''.
            (2) ERISA amendments.--(A) Subpart B of part 7 of subtitle 
        B of title I of the Employee Retirement Income Security Act of 
        1974 is amended by adding at the end the following new section:

``SEC. 713. NOTIFICATION TO PARTICIPANTS AND BENEFICIARIES.

    ``(a) Requirement.--If a health insurance issuer offering group 
health insurance coverage intends to terminate coverage or allow a 
policy to lapse because a group health plan failed to pay to the issuer 
premiums necessary to maintain coverage, the issuer shall, not later 
than 30 days prior to the date of termination or policy lapse, provide 
written notice to all participants and beneficiaries indicating the 
termination date of such coverage. The issuer may not terminate 
coverage retroactively.
    ``(b) Conversion Option.--In a case in which a health insurance 
issuer terminates health insurance coverage offered in connection with 
a group health plan because a group health plan failed to pay to the 
issuer premiums necessary to maintain coverage, the issuer shall, for a 
period of 180 days beginning on the termination date, provide to all 
participants and beneficiaries the option of enrollment under a 
conversion health plan.
    ``(c) Notice Under Group Health Plan.--A group health plan, and a 
health insurance issuer providing health insurance coverage in 
connection with a group health plan, shall provide notice to each 
participant and beneficiary under such plan regarding the imposition of 
the requirements of this section in accordance with regulations 
promulgated by the Secretary. Such notice shall be in writing and 
prominently positioned in any literature or correspondence made 
available or distributed by the plan or issuer and shall be transmitted 
upon enrollment and annually thereafter, with the first notice required 
in the first mailing made by the plan or issuer to the participant or 
beneficiary after the date of the enactment of the Beneficiary 
Notification Rights Act of 1998.''.
            (B) Section 731(c) of such Act (29 U.S.C. 1191(c)), as 
        amended by section 603(b)(1) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (C) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as 
        amended by section 603(b)(2) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (D) The table of contents in section 1 of such Act is 
        amended by inserting after the item relating to section 712 the 
        following new item:

``Sec. 713. Notification to participants and beneficiaries.''.
            (3) Internal revenue code amendments.--Subchapter B of 
        chapter 100 of the Internal Revenue Code of 1986 (as amended by 
        section 1531(a) of the Taxpayer Relief Act of 1997) is 
        amended--
            (A) in the table of sections, by inserting after the item 
        relating to section 9803 the following new item:

                              ``Sec. 9804. Notification to participants 
                                        and beneficiaries.''; and
            (B) by inserting after section 9803 the following:

``SEC. 9804. NOTIFICATION TO PARTICIPANTS AND BENEFICIARIES.

    ``(a) In General.--If a health insurance issuer offering group 
health insurance coverage intends to terminate coverage or allow a 
policy to lapse because a group health plan failed to pay to the issuer 
premiums necessary to maintain coverage, the issuer shall, not later 
than 30 days prior to the date of termination or policy lapse, provide 
written notice to all participants and beneficiaries indicating the 
termination date of such coverage. The issuer may not terminate 
coverage retroactively.
    ``(b) Conversion Option.--In a case in which a health insurance 
issuer terminates health insurance coverage offered in connection with 
a group health plan because a group health plan failed to pay to the 
issuer premiums necessary to maintain coverage, the issuer shall, for a 
period of 180 days beginning on the termination date, provide to all 
participants and beneficiaries the option of enrollment under a 
conversion health plan.''.
    (b) Effective Dates.--The amendments made by subsection (a) shall 
apply with respect to group health plans or health insurance coverage 
offered in connection with group health plans for plan years beginning 
on or after January 1, 1999.
    (c) Coordinated Regulations.--Section 104(1) of Health Insurance 
Portability and Accountability Act of 1996 is amended by striking 
``this subtitle (and the amendments made by this subtitle and section 
401)'' and inserting ``the provisions of part 7 of subtitle B of title 
I of the Employee Retirement Income Security Act of 1974, the 
provisions of parts A and C of title XXVII of the Public Health Service 
Act, and chapter 100 of the Internal Revenue Code of 1986''.

Summary: Beneficiary Notification Rights Act of 1998 - Amends the Public Health Service Act, the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code to require a health insurance issuer intending to terminate coverage or allow a policy to lapse because a group health plan failed to pay premiums necessary to maintain coverage, to:  (1) notify all participants and beneficiaries of such situation; and (2) if such plan is terminated, provide all participants and beneficiaries with the option of enrollment under a conversion health plan.