		II

		Calendar No. 417

		109th CONGRESS

		1st Session

		S. 1955

		IN THE SENATE OF THE UNITED STATES

			November 2, 2005

			Mr. Enzi (for himself,

			 Mr. Nelson of Nebraska,

			 Mr. Burns, Mr.

			 Burr, Mr. Roberts,

			 Mr. Craig, Mr.

			 Allard, and Mr. Cornyn)

			 introduced the following bill; which was read twice and referred to the

			 Committee on Health, Education, Labor,

			 and Pensions

			April 27, 2006

			Reported by Mr. Enzi,

			 with an amendment

			Strike out all after the enacting clause and insert

			 the part printed in italic

		A BILL

		To amend title I of the Employee Retirement Security Act

		  of 1974 and the Public Health Service Act to expand health care access and

		  reduce costs through the creation of small business health plans and through

		  modernization of the health insurance marketplace.

		1.Short title and table of

			 contents

			(a)Short

			 titleThis Act may be cited as the Health Insurance Marketplace Modernization and

			 Affordability Act of 2005.

			(b)Table of

			 contentsThe table of contents is as follows:

					Sec. 1. Short title and table of contents.

					TITLE I—Small business health plans

					Sec. 101. Rules governing small business health

				plans.

					Sec. 102. Cooperation between Federal and State

				authorities.

					Sec. 103. Effective date and transitional and other

				rules.

					TITLE II—Near-term market relief

					Sec. 201. Near-term market relief.

					TITLE III—Harmonization of health insurance laws

					Sec. 301. Health Insurance Regulatory

				Harmonization.

			ISmall business

			 health plans

			101.Rules governing

			 small business health plans

				(a)In

			 generalSubtitle B of title I of the

			 Employee Retirement Income Security Act of

			 1974 is amended by adding after part 7 the following new

			 part:

						8Rules governing

				small business health plans

							801.Small business

				health plans

								(a)In

				generalFor purposes of this part, the term small business

				health plan means a fully insured group health plan whose sponsor is (or

				is deemed under this part to be) described in subsection (b).

								(b)SponsorshipThe

				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 purpose and providing for periodic meetings on at least an annual basis, as

				a bona fide trade association, a bona fide industry association (including a

				rural electric cooperative association or a rural telephone cooperative

				association), a bona fide professional association, or a bona fide chamber of

				commerce (or similar bona fide business association, including 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 obtaining or providing medical care;

									(2)is established as

				a permanent entity which receives the active support of its members and

				requires 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 employees 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.

									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.802.Certification

				of small business health plans

								(a)In

				generalNot later than 6 months after the date of enactment of

				this part, the applicable authority shall prescribe by interim final rule a

				procedure under which the applicable authority shall certify small business

				health plans which apply for certification as meeting the requirements of this

				part.

								(b)Requirements

				applicable to certified plansa small business health plan with

				respect to which certification under this part is in effect shall meet the

				applicable requirements of this part, effective on the date of certification

				(or, if later, on the date on which the plan is to commence operations).

								(c)Requirements for

				continued certificationThe applicable authority may provide by

				regulation for continued certification of small business health plans under

				this part. Such regulation shall provide for the revocation of a certification

				if the applicable authority finds that the small employer health plan involved

				is failing to comply with the requirements of this part.

								(d)Class

				certification for fully insured plansThe applicable authority

				shall establish a class certification procedure for small business health plans

				under which all benefits consist of health insurance coverage. Under such

				procedure, the applicable authority shall provide for the granting of

				certification under this part to the plans in each class of such small business

				health plans upon appropriate filing under such procedure in connection with

				plans in such class and payment of the prescribed fee under section

				806(a).

								803.Requirements

				relating to sponsors and boards of trustees

								(a)SponsorThe

				requirements of this subsection are met with respect to a small business health

				plan if the 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 application for certification under this

				part.

								(b)Board of

				trusteesThe requirements of this subsection are met with respect

				to a small business health plan if the following requirements are met:

									(1)Fiscal

				controlThe plan is operated, pursuant to a plan document, by a

				board of trustees which pursuant to a trust agreement has complete fiscal

				control over the plan and which is responsible for all operations of the

				plan.

									(2)Rules of

				operation and financial controlsThe 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 applicable to the plan.

									(3)Rules governing

				relationship to participating employers and to contractors

										(A)Board

				membership

											(i)In

				generalExcept as provided in clauses (ii) and (iii), the members

				of the board of trustees are individuals selected from individuals who are the

				owners, officers, directors, or employees of the participating employers or who

				are partners in the participating employers and actively participate in the

				business.

											(ii)Limitation

												(I)General

				ruleExcept 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 service provider to the plan.

												(II)Limited

				exception for providers of services solely on behalf of the

				sponsorOfficers or employees of a sponsor which is a service

				provider (other than a contract administrator) to the plan may be members of

				the board if they constitute not more than 25 percent of the membership of the

				board and they do not provide services to the plan other than on behalf of the

				sponsor.

												(III)Treatment of

				providers of medical careIn the case of a sponsor which is an

				association whose membership consists primarily of providers of medical care,

				subclause (I) shall not apply in the case of any service provider described in

				subclause (I) who is a provider of medical care under the plan.

												(iii)Certain plans

				excludedClause (i) shall not apply to a small business health

				plan which is in existence on the date of the enactment of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2005.

											(B)Sole

				authorityThe board has sole authority under the plan to approve

				applications for participation in the plan and to contract with insurers and

				service providers.

										(c)Treatment of

				franchise networksIn the case of a group health plan which is

				established and maintained by a franchiser for a franchise network consisting

				of its franchisees—

									(1)the requirements

				of subsection (a) and section 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 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.804.Participation

				and coverage requirements

								(a)Covered

				employers and individualsThe requirements of this subsection are

				met with respect to a small business 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 subsection (b)

				are met, except that, in the case of a sponsor which is a professional

				association or other individual-based association, if at least one of the

				officers, directors, or employees of an employer, or at least one of the

				individuals who are partners in an employer and who actively participates in

				the business, is a member or such an affiliated member of the sponsor,

				participating 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 employers; or

										(B)the beneficiaries

				of individuals described in subparagraph (A).

										(b)Coverage of

				previously uninsured employeesIn the case of a small business

				health plan in existence on the date of the enactment of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2005, 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 small business health plan.

									(c)Individual

				market unaffectedThe requirements of this subsection are met

				with respect to a small business health plan if, under the terms of the plan,

				no participating employer may provide health insurance coverage in the

				individual market for any employee not covered under the plan which is similar

				to the coverage contemporaneously 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 respect 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 employers and employees eligible to

				participateThe requirements of this subsection are met with

				respect to a small business 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

				contribution requirements of the type referred to in section 2711 of the

				Public Health Service Act are not

				met;

									(2)upon request, any

				employer eligible to participate is furnished information regarding all

				coverage options available under the plan; and

									(3)the applicable

				requirements of sections 701, 702, and 703 are met with respect to the

				plan.

									805.Other

				requirements relating to plan documents, contribution rates, and benefit

				options

								(a)In

				generalThe requirements of this section are met with respect to

				a small business health plan if the following requirements are met:

									(1)Contents of

				governing instruments

										(A)In

				generalThe instruments governing the plan include a written

				instrument, meeting the requirements of an instrument required under section

				402(a)(1), which—

											(i)provides that the

				board of directors serves as the named fiduciary required for plans under

				section 402(a)(1) and serves in the capacity of a plan administrator (referred

				to in section 3(16)(A)); and

											(ii)provides that the

				sponsor of the plan is to serve as plan sponsor (referred to in section

				3(16)(B)).

											(B)Description of

				material provisionsThe terms of the health insurance coverage

				(including the terms of any individual certificates that may be offered to

				individuals in connection with such coverage) describe the material benefit and

				rating, and other provisions set forth in this section and such material

				provisions are included in the summary plan description.

										(2)Contribution

				rates must be nondiscriminatory

										(A)In

				generalThe contribution rates for any participating small

				employer shall not vary on the basis of any health status-related factor in

				relation to employees of such employer or their beneficiaries and shall not

				vary on the basis of the type of business or industry in which such employer is

				engaged.

										(B)Effect of

				titleNothing in this title or any other provision of law shall

				be construed to preclude a health insurance issuer offering health insurance

				coverage in connection with a small business health plan, and at the request of

				such small business health plan, from—

											(i)setting

				contribution rates for the small business health plan based on the claims

				experience of the plan so long as any variation in such rates complies with the

				requirements of clause (ii); or

											(ii)varying

				contribution rates for participating employers in a small business health plan

				in a State to the extent that such rates could vary using the same methodology

				employed in such State for regulating premium rates, subject to the terms of

				part I of subtitle A of title XXIX of the Public Health Service Act (relating

				to rating requirements), as added by title II of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2005.

											(3)Regulatory

				requirementsSuch 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 small

				business health plans to design benefit optionsNothing in this

				part or any provision of State law (as defined in section 514(c)(1)) shall be

				construed to preclude a small business health plan or a health insurance issuer

				offering health insurance coverage in connection with a small business health

				plan, from exercising its sole discretion in selecting the specific benefits

				and services consisting of medical care to be included as benefits under such

				plan or coverage, except that such benefits and services must meet the terms

				and specifications of part II of subtitle A of title XXIX of the Public Health

				Service Act (relating to lower cost plans), as added by title II of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2005, provided that, upon issuance by

				the Secretary of Health and Human Services of the List of Required Benefits as

				provided for in section 2922(a) of the Public Health Service Act, the required

				scope and application for each benefit or service listed in the List of

				Required Benefits shall be—

									(1)if the domicile

				State mandates such benefit or service, the scope and application required by

				the domicile State; or

									(2)if the domicile

				State does not mandate such benefit or service, the scope and application

				required by the non-domicile State that does require such benefit or service in

				which the greatest number of the small business health plan’s participating

				employers are located.

									(c)State licensure

				and informational filing

									(1)Domicile

				stateCoverage shall be issued to a small business health plan in

				the State in which the sponsor's principal place of business is located.

									(2)Non-domicile

				statesWith respect to a State (other than the domicile State) in

				which participating employers of a small business health plan are located, an

				insurer issuing coverage to such small business health plan shall not be

				required to obtain full licensure in such State, except that the insurer shall

				provide each State insurance commissioner (or applicable State authority) with

				an informational filing describing policies sold and other relevant information

				as may be requested by the applicable State authority.

									806.Requirements

				for application and related requirements

								(a)Filing

				feeUnder the procedure prescribed pursuant to section 802(a), a

				small business health plan shall pay to the applicable authority at the time of

				filing an application 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 Acts, for the sole purpose of administering

				the certification procedures applicable with respect to small business health

				plans.

								(b)Information to

				be included in application for certificationAn application for

				certification under this part meets the requirements of this section only if it

				includes, in a manner and form which shall be prescribed by the applicable

				authority by regulation, at least the following information:

									(1)Identifying

				informationThe 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 businessThe 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

				requirementsEvidence provided by the board of trustees that the

				bonding requirements of section 412 will be met as of the date of the

				application or (if later) commencement of operations.

									(4)Plan

				documentsA copy of the documents governing the plan (including

				any bylaws and trust agreements), the summary plan description, and other

				material describing the benefits that will be provided to participants and

				beneficiaries under the plan.

									(5)Agreements with

				service providersA copy of any agreements between the plan,

				health insurance issuer, and contract administrators and other service

				providers.

									(c)Filing notice of

				certification with StatesA certification granted under this part

				to a small business 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

				considered 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 changesIn the case of any small business health plan

				certified under this part, descriptions 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 regulation prior notice of material changes with respect to specified

				matters which might serve as the basis for suspension or revocation of the

				certification.

								807.Notice

				requirements for voluntary terminationA small business health plan which is or has

				been certified under this part may terminate (upon or at any time after

				cessation of accruals 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 beneficiaries a written notice of intent to terminate stating

				that such termination is intended and the proposed termination date;

								(2)develops a plan

				for winding up the affairs of the plan in connection with such termination in a

				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 applicable authority.

								Actions required under this

				section shall be taken in such form and manner as may be prescribed by the

				applicable authority by regulation.808.Definitions and

				rules of construction

								(a)DefinitionsFor

				purposes of this part—

									(1)Affiliated

				memberThe term affiliated 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 affiliated

				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 affiliated status with the sponsor,

				or

										(C)in the case of a

				small business health plan in existence on the date of the enactment of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2005, a person eligible to be a member

				of the sponsor or one of its member associations.

										(2)Applicable

				authorityThe term applicable authority means the

				Secretary, except that, in connection with any exercise of the Secretary's

				authority with respect to which the Secretary is required under section 506(d)

				to consult with a State, such term means the Secretary, in consultation with

				such State.

									(3)Applicable State

				authorityThe term applicable State authority means,

				with respect to a health insurance issuer in a State, the State insurance

				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.

									(4)Group health

				planThe term group health plan has the meaning

				provided in section 733(a)(1) (after applying subsection (b) of this

				section).

									(5)Health insurance

				coverageThe term health insurance coverage has the

				meaning provided in section 733(b)(1).

									(6)Health insurance

				issuerThe term health insurance issuer has the

				meaning provided in section 733(b)(2).

									(7)Individual

				market

										(A)In

				generalThe term individual market means the market

				for health insurance coverage offered to individuals other than in connection

				with a group health plan.

										(B)Treatment of

				very small groups

											(i)In

				generalSubject 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 section

				732(d)(3) on the first day of the plan year.

											(ii)State

				exceptionClause (i) shall not apply in the case of health

				insurance 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)Medical

				careThe term medical care has the meaning provided

				in section 733(a)(2).

									(9)Participating

				employerThe term participating employer means, in

				connection with a small business health plan, any employer, if any individual

				who is an employee of such employer, a partner in such employer, or a

				self-employed individual 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,

				partner, or self-employed individual in relation to the plan.

									(10)Small

				employerThe term small employer means, in

				connection with a group health plan with respect to a plan year, a small

				employer as defined in section 2791(e)(4).

									(b)Rule of

				constructionFor purposes of determining whether a plan, fund, or

				program is an employee welfare benefit plan which is a small business health

				plan, and for purposes of applying this title in connection with such plan,

				fund, or program so determined to be such an employee welfare benefit

				plan—

									(1)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 partnership; and

									(2)in the case of a

				self-employed individual, the term employer (as defined in section

				3(5)) and the term employee (as defined in section 3(6)) shall

				include such

				individual.

									.

				(b)Conforming

			 amendments to preemption rules

					(1)Section 514(b)(6)

			 of such Act (29 U.S.C. 1144(b)(6)) is

			 amended by adding at the end the following new subparagraph:

							(E)The preceding

				subparagraphs of this paragraph do not apply with respect to any State law in

				the case of a small business 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 Subsection (a) and inserting

			 Subsections (a) and (d);

						(B)in subsection

			 (b)(5), by striking subsection (a) in subparagraph (A) and

			 inserting subsection (a) of this section and subsections (a)(2)(B) and

			 (b) of section 805, and by striking subsection (a) in

			 subparagraph (B) and inserting subsection (a) of this section or

			 subsection (a)(2)(B) or (b) of section 805;

						(C)by redesignating

			 subsection (d) as subsection (e); and

						(D)by inserting after

			 subsection (c) the following new subsection:

								(d)(1)Except as provided in

				subsection (b)(4), the provisions of this title shall supersede any and all

				State laws insofar as they may now or hereafter preclude a health insurance

				issuer from offering health insurance coverage in connection with a small

				business health plan which is certified under part 8.

									(2)In any case in

				which health insurance coverage of any policy type is offered under a small

				business health plan certified under part 8 to a participating employer

				operating in such State, the provisions of this title shall supersede any and

				all laws of such State insofar as they may establish rating and benefit

				requirements that would otherwise apply to such coverage, provided the

				requirements of section 805(a)(2)(B) and (b) (concerning small business health

				plan rating and benefits) are

				met.

									.

						(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 meaning 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

				insurance may

				apply.

								.

						(4)Section 514(e) of

			 such Act (as redesignated by paragraph (2)(C)) is amended by striking

			 Nothing and inserting (1) Except as provided in paragraph

			 (2), nothing.

					(c)Plan

			 sponsorSection 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 a

			 small business health plan under part 8..

				(d)Savings

			 clauseSection 731(c) of such Act is amended by inserting

			 or part 8 after this part.

				(e)Clerical

			 amendmentThe 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 small business health

				plans

							801. Small business health

				plans.

							802. Certification of small business

				health plans.

							803. Requirements relating to sponsors and

				boards of trustees.

							804. Participation and coverage

				requirements.

							805. Other requirements relating to plan

				documents, contribution rates, and benefit options.

							806. Requirements for application and

				related requirements.

							807. Notice requirements for voluntary

				termination.

							808. Definitions and rules of

				construction.

						.

				102.Cooperation

			 between Federal and State authoritiesSection 506 of the

			 Employee Retirement Income Security Act of

			 1974 (29

			 U.S.C. 1136) is amended by adding at the end the following new

			 subsection:

					(d)Consultation

				with States with respect to small business health plans

						(1)Agreements with

				StatesThe Secretary shall consult with the State recognized

				under paragraph (2) with respect to a small business health plan regarding the

				exercise of—

							(A)the Secretary’s

				authority under sections 502 and 504 to enforce the requirements for

				certification under part 8; and

							(B)the Secretary’s

				authority to certify small business health plans under part 8 in accordance

				with regulations of the Secretary applicable to certification under part

				8.

							(2)Recognition of

				domicile StateIn carrying out paragraph (1), the Secretary shall

				ensure that only one State will be recognized, with respect to any particular

				small business health plan, as the State with which consultation is required.

				In carrying out this paragraph such State shall be the domicile State, as

				defined in section

				805(c).

						.

			103.Effective date

			 and transitional and other rules

				(a)Effective

			 dateThe amendments made by this title shall take effect 1 year

			 after the date of the enactment of this Act. The Secretary of Labor shall first

			 issue all regulations necessary to carry out the amendments made by this title

			 within 1 year after the date of the enactment of this Act.

				(b)Treatment of

			 certain existing health benefits programs

					(1)In

			 generalIn 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 defined in

			 section

			 808(a)(2) of the Employee

			 Retirement Income Security Act of 1974 (as amended by this

			 subtitle)) by the arrangement of an application for certification 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 Security Act of 1974 shall be deemed met with

			 respect to such arrangement;

						(C)the requirements

			 of section 803(b) of such Act shall be deemed met, if the arrangement is

			 operated by a board of trustees which—

							(i)is elected by the

			 participating employers, with each employer having one vote; and

							(ii)has complete

			 fiscal control over the arrangement and which is responsible for all operations

			 of the arrangement;

							(D)the requirements

			 of section 804(a) of such Act shall be deemed met with respect to such

			 arrangement; and

						(E)the arrangement

			 may be certified by any applicable authority with respect to its operations 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 applicable requirements of this

			 subsection are not met with respect to such arrangement or at such time that

			 the arrangement provides coverage to participants and beneficiaries in any

			 State other than the States in which coverage is provided on such date of

			 enactment.(2)DefinitionsFor

			 purposes of this subsection, the terms group health plan,

			 medical care, and participating employer shall have

			 the meanings provided in

			 section

			 808 of the Employee Retirement

			 Income Security Act of 1974, except that the reference in paragraph

			 (7) of such section to an small business health plan shall be

			 deemed a reference to an arrangement referred to in this subsection.

					IINear-term market

			 relief

			201.Near-term

			 market reliefThe Public

			 Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the end the

			 following:

					XXIXHealth care

				insurance marketplace reform

						2901.General

				insurance definitions

							In this title, the terms

				health insurance coverage, health insurance issuer,

				group health plan, and individual health insurance

				shall have the meanings given such terms in section 2791.

							ANear-term market

				relief

							IRating

				requirements

								2911.Definitions

									In this part:

										(1)Adopting

				stateThe term adopting State means a State that has

				enacted either the NAIC model rules or the National Interim Model Rating Rules

				in their entirety and as the exclusive laws of the State that relate to rating

				in the small group insurance market.

										(2)CommissionThe

				term Commission means the Harmonized Standards Commission

				established under section 2921.

										(3)Eligible

				insurerThe term eligible insurer means a health

				insurance issuer that is licensed in a nonadopting State and that—

											(A)notifies the

				Secretary, not later than 30 days prior to the offering of coverage described

				in this subparagraph, that the issuer intends to offer small group health

				insurance coverage consistent with the National Interim Model Rating Rules in a

				nonadopting State;

											(B)notifies the

				insurance department of a nonadopting State (or other State agency), not later

				than 30 days prior to the offering of coverage described in this subparagraph,

				that the issuer intends to offer small group health insurance coverage in that

				State consistent with the National Interim Model Rating Rules, and provides

				with such notice a copy of any insurance policy that it intends to offer in the

				State, its most recent annual and quarterly financial reports, and any other

				information required to be filed with the insurance department of the State (or

				other State agency) by the Secretary in regulations; and

											(C)includes in the

				terms of the health insurance coverage offered in nonadopting States (including

				in the terms of any individual certificates that may be offered to individuals

				in connection with such group health coverage) and filed with the State

				pursuant to subparagraph (B), a description in the insurer's contract of the

				National Interim Model Rating Rules and an affirmation that such Rules are

				included in the terms of such contract.

											(4)Health insurance

				coverageThe term health insurance coverage means

				any coverage issued in small group health insurance market.

										(5)NAIC model

				rulesThe term NAIC model rules means the rating

				rules provided for in the 1992 Adopted Small Employer Health Insurance

				Availability Model Act of the National Association of Insurance

				Commissioners.

										(6)National Interim

				Model Rating RulesThe term National Interim Model Rating

				Rules means the rules promulgated under section 2912(a).

										(7)Nonadopting

				stateThe term nonadopting State means a State that

				is not an adopting State.

										(8)Small group

				insurance marketThe term small group insurance

				market shall have the meaning given the term small group

				market in section 2791(e)(5).

										(9)State

				lawThe term State law means all laws, decisions,

				rules, regulations, or other State actions (including actions by a State

				agency) having the effect of law, of any State.

										2912.Rating

				rules

									(a)National interim

				model rating rulesNot later than 6 months after the date of

				enactment of this title, the Secretary, in consultation with the National

				Association of Insurance Commissioners, shall, through expedited rulemaking

				procedures, promulgate National Interim Model Rating Rules that shall be

				applicable to the small group insurance market in certain States until such

				time as the provisions of subtitle B become effective. Such Model Rules shall

				apply in States as provided for in this section beginning with the first plan

				year after the such Rules are promulgated.

									(b)Utilization of

				NAIC model rulesIn promulgating the National Interim Model

				Rating Rules under subsection (a), the Secretary, except as otherwise provided

				in this subtitle, shall utilize the NAIC model rules regarding premium rating

				and premium variation.

									(c)Transition in

				certain States

										(1)In

				generalIn promulgating the National Interim Model Rating Rules

				under subsection (a), the Secretary shall have discretion to modify the NAIC

				model rules in accordance with this subsection to the extent necessary to

				provide for a graduated transition, of not to exceed 3 years following the

				promulgation of such National Interim Rules, with respect to the application of

				such Rules to States.

										(2)Initial premium

				variation

											(A)In

				generalUnder the modified National Interim Model Rating Rules as

				provided for in paragraph (1), the premium variation provision of subparagraph

				(C) shall be applicable only with respect to small group policies issued in

				States which, on the date of enactment of this title, have in place premium

				rating band requirements that vary by less than 50 percent from the premium

				variation standards contained in subparagraph (C) with respect to the standards

				provided for under the NAIC model rules.

											(B)Other

				StatesHealth insurance coverage offered in a State that, on the

				date of enactment of this title, has in place premium rating band requirements

				that vary by more than 50 percent from the premium variation standards

				contained in subparagraph (C) shall be subject to such graduated transition

				schedules as may be provided by the Secretary pursuant to paragraph (1).

											(C)Amount of

				variationThe amount of a premium rating variation from the base

				premium rate due to health conditions of covered individuals under this

				subparagraph shall not exceed a factor of—

												(i)+/- 25 percent

				upon the issuance of the policy involved; and

												(ii)+/- 15 percent

				upon the renewal of the policy.

												(3)Other

				transitional authorityIn developing the National Interim Model

				Rating Rules, the Secretary may also provide for the application of

				transitional standards in certain States with respect to the following:

											(A)Independent rating

				classes for old and new business.

											(B)Such additional

				transition standards as the Secretary may determine necessary for an effective

				transition.

											2913.Application

				and preemption

									(a)Superceding of

				state law

										(1)In

				generalThis part shall supersede any and all State laws insofar

				as such State laws (whether enacted prior to or after the date of enactment of

				this subtitle) relate to rating in the small group insurance market as applied

				to an eligible insurer, or small group health insurance coverage issued by an

				eligible insurer, in a nonadopting State.

										(2)Nonadopting

				statesThis part shall supersede any and all State laws of a

				nonadopting State insofar as such State laws (whether enacted prior to or after

				the date of enactment of this subtitle)—

											(A)prohibit an

				eligible insurer from offering coverage consistent with the National Interim

				Model Rating Rules in a nonadopting State; or

											(B)discriminate

				against or among eligible insurers offering health insurance coverage

				consistent with the National Interim Model Rating Rules in a nonadopting

				state.

											(b)Savings clause

				and construction

										(1)Nonapplication

				to adopting statesSubsection (a) shall not apply with respect to

				adopting states.

										(2)Nonapplication

				to certain insurersSubsection (a) shall not apply with respect

				to insurers that do not qualify as eligible insurers that offer small group

				health insurance coverage in a nonadopting State.

										(3)Nonapplication

				where obtaining relief under state lawSubsection (a)(1) shall

				not apply to any State law in a nonadopting State to the extent necessary to

				permit individuals or the insurance department of the State (or other State

				agency) to obtain relief under State law to require an eligible insurer to

				comply with the terms of the small group health insurance coverage issued in

				the nonadopting State. In no case shall this paragraph, or any other provision

				of this title, be construed to create a cause of action on behalf of an

				individual or any other person under State law in connection with a group

				health plan that is subject to the Employee Retirement Income Security Act of

				1974 or health insurance coverage issued in connection with such a plan.

										(4)Nonapplication

				to enforce requirements relating to the national ruleSubsection

				(a)(1) shall not apply to any State law in a nonadopting State to the extent

				necessary to provide the insurance department of the State (or other State

				agency) with the authority to enforce State law requirements relating to the

				National Interim Model Rating Rules that are not set forth in the terms of the

				small group health insurance coverage issued in a nonadopting State, in a

				manner that is consistent with the National Interim Model Rating Rules and that

				imposes no greater duties or obligations on health insurance issuers than the

				National Interim Model Rating Rules.

										(5)Nonapplication

				to subsection (a)(2)Paragraphs (3) and (4) shall not apply with

				respect to subsection (a)(2).

										(6)No affect on

				preemptionIn no case shall this subsection be construed to

				affect the scope of the preemption provided for under the Employee Retirement

				Income Security Act of 1974.

										(c)Effective

				dateThis section shall apply beginning in the first plan year

				following the issuance of the final rules by the Secretary under the National

				Interim Model Rating Rules.

									2914.Civil actions

				and jurisdiction

									(a)In

				generalThe district courts of the United States shall have

				exclusive jurisdiction over civil actions involving the interpretation of this

				part.

									(b)ActionsA

				health insurance issuer may bring an action in the district courts of the

				United States for injunctive or other equitable relief against a nonadopting

				State in connection with the application of a state law that violates this

				part.

									(c)Violations of

				section 2913In the case of a nonadopting State that is in

				violation of section 2913(a)(2), a health insurance issuer may bring an action

				in the district courts of the United States for damages against the nonadopting

				State and, if the health insurance issuer prevails in such action, the district

				court shall award the health insurance issuer its reasonable attorneys fees and

				costs.

									2915.SunsetThe National Interim Model Rating Rules

				shall remain in effect in a non-adopting State until such time as the

				harmonized national rating rules are promulgated and effective pursuant to part

				II. Upon such effective date, such harmonized rules shall supersede the

				National Rules.

								IILower cost

				plans

								2921.DefinitionsIn this part:

									(1)Adopting

				stateThe term adopting State means a State that has

				enacted the State Benefit Compendium in its entirety and as the exclusive laws

				of the State that relate to benefit, service, and provider mandates in the

				group and individual insurance markets.

									(2)Eligible

				insurerThe term eligible insurer means a health

				insurance issuer that is licensed in a nonadopting State and that—

										(A)notifies the

				Secretary, not later than 30 days prior to the offering of coverage described

				in this subparagraph, that the issuer intends to offer group health insurance

				coverage consistent with the State Benefit Compendium in a nonadopting

				State;

										(B)notifies the

				insurance department of a nonadopting State (or other State agency), not later

				than 30 days prior to the offering of coverage described in this subparagraph,

				that the issuer intends to offer group health insurance coverage in that State

				consistent with the State Benefit Compendium, and provides with such notice a

				copy of any insurance policy that it intends to offer in the State, its most

				recent annual and quarterly financial reports, and any other information

				required to be filed with the insurance department of the State (or other State

				agency) by the Secretary in regulations; and

										(C)includes in the

				terms of the health insurance coverage offered in nonadopting States (including

				in the terms of any individual certificates that may be offered to individuals

				in connection with such group health coverage) and filed with the State

				pursuant to subparagraph (B), a description in the insurer's contract of the

				State Benefit Compendium and that adherence to the Compendium is included as a

				term of such contract.

										(3)Health insurance

				coverageThe term health insurance coverage means

				any coverage issued in the group or individual health insurance markets.

									(4)Nonadopting

				stateThe term nonadopting State means a State that

				is not an adopting State.

									(5)State Benefit

				CompendiumThe term State Benefit Compendium means

				the Compendium issued under section 2922.

									(6)State

				lawThe term State law means all laws, decisions,

				rules, regulations, or other State actions (including actions by a State

				agency) having the effect of law, of any State.

									2922.Offering lower cost

				plans

									(a)List of Required

				BenefitsNot later than 3 months after the date of enactment of

				this title, the Secretary shall issue by interim final rule a list (to be known

				as the List of Required Benefits) of the benefit, service, and

				provider mandates that are required to be provided by health insurance issuers

				in at least 45 States as a result of the application of State benefit, service,

				and provider mandate laws.

									(b)State benefit

				compendium

										(1)VarianceNot

				later than 12 months after the date of enactment of this title, the Secretary

				shall issue by interim final rule a compendium (to be known as the State

				Benefit Compendium) of harmonized descriptions of the benefit, service,

				and provider mandates identified under subsection (a). In developing the

				Compendium, with respect to differences in State mandate laws identified under

				subsection (a) relating to similar benefits, services, or providers, the

				Secretary shall review and define the scope and application of such State laws

				so that a common approach shall be applicable under such Compendium in a

				uniform manner. In making such determination, the Secretary shall adopt an

				approach reflective of the approach used by a plurality of the States requiring

				such benefit, service, or provider mandate.

										(2)EffectThe

				State Benefit Compendium shall provide that any State benefit, service, and

				provider mandate law (enacted prior to or after the date of enactment of this

				title) other than those described in the Compendium shall not be binding on

				health insurance issuers in an adopting State.

										(3)ImplementationThe

				effective date of the State Benefit Compendium shall be the later of—

											(A)the date that is

				12 months from the date of enactment of this title; or

											(B)such subsequent

				date on which the interim final rule for the State Benefit Compendium shall be

				issued.

											(c)Non-association

				coverageWith respect to health insurers selling insurance to

				small employers (as defined in section 808(a)(10) of the Employee Retirement

				Income Security Act of 1974), in the event the Secretary fails to issue the

				State Benefit Compendium within 12 months of the date of enactment of this

				title, the required scope and application for each benefit or service listed in

				the List of Required Benefits shall, other than with respect to insurance

				issued to a Small Business Health Plan, be—

										(1)if the State in

				which the insurer issues a policy mandates such benefit or service, the scope

				and application required by such State; or

										(2)if the State in

				which the insurer issues a policy does not mandate such benefit or service, the

				scope and application required by such other State that does require such

				benefit or service in which the greatest number of the insurer’s small employer

				policyholders are located.

										(d)Updating of

				State benefit compendiumNot later than 2 years after the date on

				which the Compendium is issued under subsection (b)(1), and every 2 years

				thereafter, the Secretary, applying the same methodology provided for in

				subsections (a) and (b)(1), in consultation with the National Association of

				Insurance Commissioners, shall update the Compendium. The Secretary shall issue

				the updated Compendium by regulation, and such updated Compendium shall be

				effective upon the first plan year following the issuance of such

				regulation.

									2923.Application

				and preemption

									(a)Superceding of

				state law

										(1)In

				generalThis part shall supersede any and all State laws (whether

				enacted prior to or after the date of enactment of this title) insofar as such

				laws relate to benefit, service, or provider mandates in the health insurance

				market as applied to an eligible insurer, or health insurance coverage issued

				by an eligible insurer, in a nonadopting State.

										(2)Nonadopting

				statesThis part shall supersede any and all State laws of a

				nonadopting State (whether enacted prior to or after the date of enactment of

				this title) insofar as such laws—

											(A)prohibit an

				eligible insurer from offering coverage consistent with the State Benefit

				Compendium, as provided for in section 2922(a), in a nonadopting State;

				or

											(B)discriminate

				against or among eligible insurers offering or seeking to offer health

				insurance coverage consistent with the State Benefit Compendium in a

				nonadopting State.

											(b)Savings clause

				and construction

										(1)Nonapplication

				to adopting statesSubsection (a) shall not apply with respect to

				adopting States.

										(2)Nonapplication

				to certain insurersSubsection (a) shall not apply with respect

				to insurers that do not qualify as eligible insurers who offer health insurance

				coverage in a nonadopting State.

										(3)Nonapplication

				where obtaining relief under state lawSubsection (a)(1) shall

				not apply to any State law of a nonadopting State to the extent necessary to

				permit individuals or the insurance department of the State (or other State

				agency) to obtain relief under State law to require an eligible insurer to

				comply with the terms of the group health insurance coverage issued in a

				nonadopting State. In no case shall this paragraph, or any other provision of

				this title, be construed to create a cause of action on behalf of an individual

				or any other person under State law in connection with a group health plan that

				is subject to the Employee Retirement Income Security Act of 1974 or health

				insurance coverage issued in connection with such plan.

										(4)Nonapplication

				to enforce requirements relating to the compendiumSubsection

				(a)(1) shall not apply to any State law in a nonadopting State to the extent

				necessary to provide the insurance department of the State (or other state

				agency) authority to enforce State law requirements relating to the State

				Benefit Compendium that are not set forth in the terms of the group health

				insurance coverage issued in a nonadopting State, in a manner that is

				consistent with the State Benefit Compendium and imposes no greater duties or

				obligations on health insurance issuers than the State Benefit

				Compendium.

										(5)Nonapplication

				to subsection (a)(2)Paragraphs (3) and (4) shall not apply with

				respect to subsection (a)(2).

										(6)No affect on

				preemptionIn no case shall this subsection be construed to

				affect the scope of the preemption provided for under the Employee Retirement

				Income Security Act of 1974.

										(c)Effective

				dateThis section shall apply upon the first plan year following

				final issuance by the Secretary of the State Benefit Compendium.

									2924.Civil actions

				and jurisdiction

									(a)In

				generalThe district courts of the United States shall have

				exclusive jurisdiction over civil actions involving the interpretation of this

				part.

									(b)ActionsA

				health insurance issuer may bring an action in the district courts of the

				United States for injunctive or other equitable relief against a nonadopting

				State in connection with the application of a State law that violates this

				part.

									(c)Violations of

				section 2923In the case of a nonadopting State that is in

				violation of section 2923(a)(2), a health insurance issuer may bring an action

				in the district courts of the United States for damages against the nonadopting

				State and, if the health insurance issuer prevails in such action, the district

				court shall award the health insurance issuer its reasonable attorneys fees and

				costs.

									.

			IIIHarmonization of

			 health insurance laws

			301.Health

			 Insurance Regulatory HarmonizationTitle XXIX of the Public Health Service Act

			 (as added by section 201) is amended by adding at the end the following:

					BRegulatory

				harmonization

						2931.DefinitionsIn this subtitle:

							(1)AccessThe

				term access means any requirements of State law that regulate the

				following elements of access:

								(A)Renewability of

				coverage.

								(B)Guaranteed

				issuance as provided for in title XXVII.

								(C)Guaranteed issue

				for individuals not eligible under subparagraph (B).

								(D)High risk

				pools.

								(E)Pre-existing

				conditions limitations.

								(2)Adopting

				stateThe term adopting State means a State that has

				enacted the harmonized standards adopted under this subtitle in their entirety

				and as the exclusive laws of the State that relate to the harmonized

				standards.

							(3)Eligible

				insurerThe term eligible insurer means a health

				insurance issuer that is licensed in a nonadopting State and that—

								(A)notifies the

				Secretary, not later than 30 days prior to the offering of coverage described

				in this subparagraph, that the issuer intends to offer health insurance

				coverage consistent with the harmonized standards in a nonadopting

				State;

								(B)notifies the

				insurance department of a nonadopting State (or other State agency), not later

				than 30 days prior to the offering of coverage described in this subparagraph,

				that the issuer intends to offer group health insurance coverage in that State

				consistent with the State Benefit Compendium, and provides with such notice a

				copy of any insurance policy that it intends to offer in the State, its most

				recent annual and quarterly financial reports, and any other information

				required to be filed with the insurance department of the State (or other State

				agency) by the Secretary in regulations; and

								(C)includes in the

				terms of the health insurance coverage offered in nonadopting States (including

				in the terms of any individual certificates that may be offered to individuals

				in connection with such group health coverage) and filed with the State

				pursuant to subparagraph (B), a description of the harmonized standards

				published pursuant to section 2932(g)(2) and an affirmation that such standards

				are a term of the contract.

								(4)Harmonized

				standardsThe term harmonized standards means the

				standards adopted by the Secretary under section 2932(d).

							(5)Health insurance

				coverageThe term health insurance coverage means

				any coverage issued in the health insurance market.

							(6)Nonadopting

				stateThe term nonadopting State means a State that

				fails to enact, within 2 years of the date in which final regulations are

				issued by the Secretary adopting the harmonized standards under this subtitle,

				the harmonized standards in their entirety and as the exclusive laws of the

				State that relate to the harmonized standards.

							(7)Patient

				protectionsThe term patient protections means any

				requirement of State law that regulate the following elements of patient

				protections:

								(A)Internal

				appeals.

								(B)External

				appeals.

								(C)Direct access to

				providers.

								(D)Prompt payment of

				claims.

								(E)Utilization

				review.

								(F)Marketing

				standards.

								(8)Plurality

				requirementThe term plurality requirement means the

				most common substantially similar requirements for elements within each area

				described in section 2932(b)(1).

							(9)RatingThe

				term rating means, at the time of issuance or renewal,

				requirements of State law the regulate the following elements of rating:

								(A)Limits on the

				types of variations in rates based on health status.

								(B)Limits on the

				types of variations in rates based on age and gender.

								(C)Limits on the

				types of variations in rates based on geography, industry and group

				size.

								(D)Periods of time

				during which rates are guaranteed.

								(E)The review and

				approval of rates.

								(F)The establishment

				of classes or blocks of business.

								(G)The use of

				actuarial justifications for rate variations.

								(10)State

				lawThe term State law means all laws, decisions,

				rules, regulations, or other State actions (including actions by a State

				agency) having the effect of law, of any State.

							(11)Substantially

				similarThe term substantially similar means a

				requirement of State law applicable to an element of an area identified in

				section 2932 that is similar in most material respects. Where the most common

				State action with respect to an element is to adopt no requirement for an

				element of an area identified in such section 2932, the plurality requirement

				shall be deemed to impose no requirements for such element.

							2932.Harmonized

				standards

							(a)Commission

								(1)EstablishmentThe

				Secretary, in consultation with the NAIC, shall establish the Commission on

				Health Insurance Standards Harmonization (referred to in this subtitle as the

				Commission) to develop recommendations that harmonize

				inconsistent State health insurance laws in accordance with the laws adopted in

				a plurality of the States.

								(2)CompositionThe

				Commission shall be composed of the following individuals to be appointed by

				the Secretary:

									(A)Two State

				insurance commissioners, of which one shall be a Democrat and one shall be a

				Republican, and of which one shall be designated as the chairperson and one

				shall be designated as the vice chairperson.

									(B)Two

				representatives of State government, one of which shall be a governor of a

				State and one of which shall be a State legislator, and one of which shall be a

				Democrat and one of which shall be a Republican.

									(C)Two

				representatives of employers, of which one shall represent small employers and

				one shall represent large employers.

									(D)Two

				representatives of health insurers, of which one shall represent insurers that

				offer coverage in all markets (including individual, small, and large markets),

				and one shall represent insurers that offer coverage in the small

				market.

									(E)Two

				representatives of consumer organizations.

									(F)Two

				representatives of insurance agents and brokers.

									(G)Two

				representatives of healthcare providers.

									(H)Two independent

				representatives of the American Academy of Actuaries who have familiarity with

				the actuarial methods applicable to health insurance.

									(I)One administrator

				of a qualified high risk pool.

									(3)TermsThe

				members of the Commission shall serve for the duration of the Commission. The

				Secretary shall fill vacancies in the Commission as needed and in a manner

				consistent with the composition described in paragraph (2).

								(b)Development of

				harmonized standards

								(1)In

				generalIn accordance with the process described in subsection

				(c), the Commission shall identify and recommend nationally harmonized

				standards for the small group health insurance market, the individual health

				insurance market, and the large group health insurance market that relate to

				the following areas:

									(A)Rating.

									(B)Access to

				coverage.

									(C)Patient

				protections.

									(2)RecommendationsThe

				Commission shall recommend separate harmonized standards with respect to each

				of the three insurance markets described in paragraph (1) and separate

				standards for each element of the areas described in subparagraph (A) through

				(C) of such paragraph within each such market. Notwithstanding the previous

				sentence, the Commission shall not recommend any harmonized standards that

				disrupt, expand, or duplicate the benefit, service, or provider mandate

				standards provided in the State Benefit Compendium pursuant to section

				2922(a).

								(c)Process for

				identifying harmonized standards

								(1)In

				generalThe Commission shall develop recommendations to harmonize

				inconsistent State insurance laws with the laws adopted in a plurality of the

				States. In carrying out the previous sentence, the Commission shall review all

				State laws that regulate insurance in each of the insurance markets and areas

				described in subsection (b)(1) and identify the plurality requirement within

				each element of such areas. Such plurality requirement shall be the harmonized

				standard for such area in each such market.

								(2)ConsultationThe

				Commission shall consult with the National Association of Insurance

				Commissioners in identifying the plurality requirements for each element within

				the area and in recommending the harmonized standards.

								(3)Review of

				federal lawsThe Commission shall review whether any Federal law

				imposes a requirement relating to the markets and areas described in subsection

				(b)(1). In such case, such Federal requirement shall be deemed the plurality

				requirement and the Commission shall recommend the Federal requirement as the

				harmonized standard for such elements.

								(d)Recommendations

				and adoption by Secretary

								(1)RecommendationsNot

				later than 1 year after the date of enactment of this title, the Commission

				shall recommend to the Secretary the adoption of the harmonized standards

				identified pursuant to subsection (c).

								(2)RegulationsNot

				later than 120 days after receipt of the Commission's recommendations under

				paragraph (1), the Secretary shall issue final regulations adopting the

				recommended harmonized standards. If the Secretary finds the recommended

				standards for an element of an area to be arbitrary and inconsistent with the

				plurality requirements of this section, the Secretary may issue a unique

				harmonized standard only for such element through the application of a process

				similar to the process set forth in subsection (c) and through the issuance of

				proposed and final regulations.

								(3)Effective

				dateThe regulations issued by the Secretary under paragraph (2)

				shall be effective on the date that is 2 years after the date on which such

				regulations were issued.

								(e)TerminationThe

				Commission shall terminate and be dissolved after making the recommendations to

				the Secretary pursuant to subsection (d)(1).

							(f)Updated

				harmonized standards

								(1)In

				generalNot later than 2 years after the termination of the

				Commission under subsection (e), and every 2 years thereafter, the Secretary

				shall update the harmonized standards. Such updated standards shall be adopted

				in accordance with paragraph (2).

								(2)Updating of

				standards

									(A)In

				generalThe Secretary shall review all State laws that regulate

				insurance in each of the markets and elements of areas set forth in subsection

				(b)(1) and identify whether a plurality of States have adopted substantially

				similar requirements that differ from the harmonized standards adopted by the

				Secretary pursuant to subsection (d). In such case, the Secretary shall

				consider State laws that have been enacted with effective dates that are

				contingent upon adoption as a harmonized standard by the Secretary.

				Substantially similar requirements for each element within such area shall be

				considered to be an updated harmonized standard for such an area.

									(B)ReportThe

				Secretary shall request the National Association of Insurance Commissioners to

				issue a report to the Secretary every 2 years to assist the Secretary in

				identifying the updated harmonized standards under this paragraph. Nothing in

				this subparagraph shall be construed to prohibit the Secretary from issuing

				updated harmonized standards in the absence of such a report.

									(C)RegulationsThe

				Secretary shall issue regulations adopting updated harmonized standards under

				this paragraph within 90 days of identifying such standards. Such regulations

				shall be effective beginning on the date that is 2 years after the date on

				which such regulations are issued.

									(g)Publication

								(1)ListingThe

				Secretary shall maintain an up to date listing of all harmonized standards

				adopted under this section on the Internet website of the Department of Health

				and Human Services.

								(2)Sample contract

				languageThe Secretary shall publish on the Internet website of

				the Department of Health and Human Services sample contract language that

				incorporates the harmonized standards adopted under this section, which may be

				used by insurers seeking to qualify as an eligible insurer. The types of

				harmonized standards that shall be included in sample contract language are the

				standards that are relevant to the contractual bargain between the insurer and

				insured.

								(h)State adoption

				and enforcementNot later than 2 years after the issuance by the

				Secretary of final regulations adopting harmonized standards under this

				section, the States may adopt such harmonized standards (and become an adopting

				State) and, in which case, shall enforce the harmonized standards pursuant to

				State law.

							2933.Application

				and preemption

							(a)Superceding of

				state law

								(1)In

				generalThe harmonized standards adopted under this subtitle

				shall supersede any and all State laws (whether enacted prior to or after the

				date of enactment of this title) insofar as such State laws relate to the areas

				of harmonized standards as applied to an eligible insurer, or health insurance

				coverage issued by a eligible insurer, in a nonadopting State.

								(2)Nonadopting

				statesThis subtitle shall supersede any and all State laws of a

				nonadopting State (whether enacted prior to or after the date of enactment of

				this title) insofar as they may—

									(A)prohibit an

				eligible insurer from offering coverage consistent with the harmonized

				standards in the nonadopting State; or

									(B)discriminate

				against or among eligible insurers offering or seeking to offer health

				insurance coverage consistent with the harmonized standards in the nonadopting

				State.

									(b)Savings clause

				and construction

								(1)Nonapplication

				to adopting statesSubsection (a) shall not apply with respect to

				adopting States.

								(2)Nonapplication

				to certain insurersSubsection (a) shall not apply with respect

				to insurers that do not qualify as eligible insurers who offer health insurance

				coverage in a nonadopting State.

								(3)Nonapplication

				where obtaining relief under state lawSubsection (a)(1) shall

				not apply to any State law of a nonadopting State to the extent necessary to

				permit individuals or the insurance department of the State (or other State

				agency) to obtain relief under State law to require an eligible insurer to

				comply with the terms of the health insurance coverage issued in a nonadopting

				State. In no case shall this paragraph, or any other provision of this

				subtitle, be construed to permit a cause of action on behalf of an individual

				or any other person under State law in connection with a group health plan that

				is subject to the Employee Retirement Income Security Act of 1974 or health

				insurance coverage issued in connection with such plan.

								(4)Nonapplication

				to enforce requirements relating to the compendiumSubsection

				(a)(1) shall not apply to any State law in a nonadopting State to the extent

				necessary to provide the insurance department of the State (or other state

				agency) authority to enforce State law requirements relating to the harmonized

				standards that are not set forth in the terms of the health insurance coverage

				issued in a nonadopting State, in a manner that is consistent with the

				harmonized standards and imposes no greater duties or obligations on health

				insurance issuers than the harmonized standards.

								(5)Nonapplication

				to subsection (a)(2)Paragraphs

				(3) and (4) shall not apply with respect to subsection (a)(2).

								(6)No affect on

				preemptionIn no case shall this subsection be construed to

				affect the scope of the preemption provided for under the Employee Retirement

				Income Security Act of 1974.

								(c)Effective

				dateThis section shall apply beginning on the date that is 2

				years after the date on which final regulations are issued by the Secretary

				under this subtitle adopting the harmonized standards.

							2934.Civil actions

				and jurisdiction

							(a)In

				generalThe district courts of the United States shall have

				exclusive jurisdiction over civil actions involving the interpretation of this

				subtitle.

							(b)ActionsA

				health insurance issuer may bring an action in the district courts of the

				United States for injunctive or other equitable relief against a nonadopting

				State in connection with the application of a State law that violates this

				subtitle.

							(c)Violations of

				section 2933In the case of a nonadopting State that is in

				violation of section 2933(a)(2), a health insurance issuer may bring an action

				in the district courts of the United States for damages against the nonadopting

				State and, if the health insurance issuer prevails in such action, the district

				court shall award the health insurance issuer its reasonable attorneys fees and

				costs.

							2935.Authorization of

				appropriationsThere are

				authorized to be appropriated such sums as may be necessary to carry out this

				subtitle.

						.

		1.Short title; table of

			 contents; purpose

			(a)Short

			 titleThis Act may be cited as the Health Insurance Marketplace Modernization and

			 Affordability Act of 2006.

			(b)Table of

			 contentsThe table of contents is as follows:

					Sec. 1. Short title; table of contents;

				purposes.

					TITLE I—Small business health plans

					Sec. 101. Rules governing small business health

				plans.

					Sec. 102. Cooperation between Federal and State

				authorities.

					Sec. 103. Effective date and transitional and other

				rules.

					TITLE II—Market relief

					Sec. 201. Market relief.

					TITLE III—Harmonization of health insurance

				standards

					Sec. 301. Health Insurance Standards Harmonization.

			(c)PurposesIt

			 is the purpose of this Act to—

				(1)make more affordable

			 health insurance options available to small businesses, working families, and

			 all Americans;

				(2)assure effective State

			 regulatory protection of the interests of health insurance consumers;

			 and

				(3)create a more efficient

			 and affordable health insurance marketplace through collaborative development

			 of uniform regulatory standards.

				ISmall business health

			 plans

			101.Rules governing small

			 business health plans

				(a)In

			 generalSubtitle B of title I of the

			 Employee Retirement Income Security Act of

			 1974 is amended by adding after part 7 the following new

			 part:

						8Rules governing small

				business health plans

							801.Small business health

				plans

								(a)In

				generalFor purposes of this part, the term small business

				health plan means a fully insured group health plan whose sponsor is (or

				is deemed under this part to be) described in subsection (b).

								(b)SponsorshipThe

				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 purpose and providing for periodic meetings on at least an annual basis, as

				a bona fide trade association, a bona fide industry association (including a

				rural electric cooperative association or a rural telephone cooperative

				association), a bona fide professional association, or a bona fide chamber of

				commerce (or similar bona fide business association, including 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 obtaining medical care;

									(2)is established as a

				permanent entity which receives the active support of its members and requires

				for membership payment on a periodic basis of dues or payments necessary to

				maintain eligibility for membership;

									(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 employees 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; and

									(4)does not condition

				membership on the basis of a minimum group size.

									Any

				sponsor consisting of an association of entities which meet the requirements of

				paragraphs (1), (2), (3), and (4) shall be deemed to be a sponsor described in

				this subsection.802.Certification of small

				business health plans

								(a)In

				generalNot later than 6 months after the date of enactment of

				this part, the applicable authority shall prescribe by interim final rule a

				procedure under which the applicable authority shall certify small business

				health plans which apply for certification as meeting the requirements of this

				part.

								(b)Requirements applicable

				to certified plansA small business health plan with respect to

				which certification under this part is in effect shall meet the applicable

				requirements of this part, effective on the date of certification (or, if

				later, on the date on which the plan is to commence operations).

								(c)Requirements for

				continued certificationThe applicable authority may provide by

				regulation for continued certification of small business health plans under

				this part. Such regulation shall provide for the revocation of a certification

				if the applicable authority finds that the small business health plan involved

				is failing to comply with the requirements of this part.

								(d)Expedited and deemed

				certification

									(1)In

				generalIf the Secretary fails to act on an application for

				certification under this section within 90 days of receipt of such application,

				the applying small business health plan shall be deemed certified until such

				time as the Secretary may deny for cause the application for

				certification.

									(2)Civil

				penaltyThe Secretary may assess a civil penalty against the

				board of trustees and plan sponsor (jointly and severally) of a small business

				health plan that is deemed certified under paragraph (1) of up to $500,000 in

				the event the Secretary determines that the application for certification of

				such small business health plan was willfully or with gross negligence

				incomplete or inaccurate.

									803.Requirements relating

				to sponsors and boards of trustees

								(a)SponsorThe

				requirements of this subsection are met with respect to a small business health

				plan if the 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 application for certification under this

				part.

								(b)Board of

				trusteesThe requirements of this subsection are met with respect

				to a small business health plan if the following requirements are met:

									(1)Fiscal

				controlThe plan is operated, pursuant to a plan document, by a

				board of trustees which pursuant to a trust agreement has complete fiscal

				control over the plan and which is responsible for all operations of the

				plan.

									(2)Rules of operation and

				financial controlsThe 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

				applicable to the plan.

									(3)Rules governing

				relationship to participating employers and to contractors

										(A)Board

				membership

											(i)In

				generalExcept as provided in clauses (ii) and (iii), the members

				of the board of trustees are individuals selected from individuals who are the

				owners, officers, directors, or employees of the participating employers or who

				are partners in the participating employers and actively participate in the

				business.

											(ii)Limitation

												(I)General

				ruleExcept 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 service provider to the plan.

												(II)Limited exception for

				providers of services solely on behalf of the sponsorOfficers or

				employees of a sponsor which is a service provider (other than a contract

				administrator) to the plan may be members of the board if they constitute not

				more than 25 percent of the membership of the board and they do not provide

				services to the plan other than on behalf of the sponsor.

												(III)Treatment of

				providers of medical careIn the case of a sponsor which is an

				association whose membership consists primarily of providers of medical care,

				subclause (I) shall not apply in the case of any service provider described in

				subclause (I) who is a provider of medical care under the plan.

												(iii)Certain plans

				excludedClause (i) shall not apply to a small business health

				plan which is in existence on the date of the enactment of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2006.

											(B)Sole

				authorityThe board has sole authority under the plan to approve

				applications for participation in the plan and to contract with

				insurers.

										(c)Treatment of franchise

				networksIn the case of a group health plan which is established

				and maintained by a franchiser for a franchise network consisting of its

				franchisees—

									(1)the requirements of

				subsection (a) and section 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 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.804.Participation and

				coverage requirements

								(a)Covered employers and

				individualsThe requirements of this subsection are met with

				respect to a small business 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, except that, in the case of a sponsor which is a professional

				association or other individual-based association, if at least one of the

				officers, directors, or employees of an employer, or at least one of the

				individuals who are partners in an employer and who actively participates in

				the business, is a member or such an affiliated member of the sponsor,

				participating 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 employers; or

										(B)the dependents of

				individuals described in subparagraph (A).

										(b)Individual market

				unaffectedThe requirements of this subsection are met with

				respect to a small business health plan if, under the terms of the plan, no

				participating employer may provide health insurance coverage in the individual

				market for any employee not covered under the plan which is similar to the

				coverage contemporaneously 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 respect to the employee and such

				employee would, but for such exclusion on such basis, be eligible for coverage

				under the plan.

								(c)Prohibition of

				discrimination against employers and employees eligible to

				participateThe requirements of this subsection are met with

				respect to a small business 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

				contribution requirements of the type referred to in section 2711 of the

				Public Health Service Act are not

				met;

									(2)information regarding all

				coverage options available under the plan is made readily available to any

				employer eligible to participate; and

									(3)the applicable

				requirements of sections 701, 702, and 703 are met with respect to the

				plan.

									805.Other requirements

				relating to plan documents, contribution rates, and benefit options

								(a)In

				generalThe requirements of this section are met with respect to

				a small business health plan if the following requirements are met:

									(1)Contents of governing

				instruments

										(A)In

				generalThe instruments governing the plan include a written

				instrument, meeting the requirements of an instrument required under section

				402(a)(1), which—

											(i)provides that the board

				of trustees serves as the named fiduciary required for plans under section

				402(a)(1) and serves in the capacity of a plan administrator (referred to in

				section 3(16)(A)); and

											(ii)provides that the

				sponsor of the plan is to serve as plan sponsor (referred to in section

				3(16)(B)).

											(B)Description of material

				provisionsThe terms of the health insurance coverage (including

				the terms of any individual certificates that may be offered to individuals in

				connection with such coverage) describe the material benefit and rating, and

				other provisions set forth in this section and such material provisions are

				included in the summary plan description.

										(2)Contribution rates must

				be nondiscriminatory

										(A)In

				generalThe contribution rates for any participating small

				employer shall not vary on the basis of any health status-related factor in

				relation to employees of such employer or their beneficiaries and shall not

				vary on the basis of the type of business or industry in which such employer is

				engaged.

										(B)Effect of

				titleNothing in this title or any other provision of law shall

				be construed to preclude a health insurance issuer offering health insurance

				coverage in connection with a small business health plan, and at the request of

				such small business health plan, from—

											(i)setting contribution

				rates for the small business health plan based on the claims experience of the

				plan so long as any variation in such rates complies with the requirements of

				clause (ii), except that small business health plans shall not be subject to

				paragraphs (1)(A) and (3) of section 2911(b) of the Public Health Service Act;

				or

											(ii)varying contribution

				rates for participating employers in a small business health plan in a State to

				the extent that such rates could vary using the same methodology employed in

				such State for regulating small group premium rates, subject to the terms of

				part I of subtitle A of title XXIX of the Public Health Service Act (relating

				to rating requirements), as added by title II of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2006.

											(3)Exceptions regarding

				self-employed and large employers

										(A)Self employed

											(i)In

				generalSmall business health plans with participating employers

				who are self-employed individuals (and their dependents) shall enroll such

				self-employed participating employers in accordance with rating rules that do

				not violate the rating rules for self-employed individuals in the State in

				which such self-employed participating employers are located.

											(ii)Guarantee

				issueSmall business health plans with participating employers

				who are self-employed individuals (and their dependents) may decline to

				guarantee issue to such participating employers in States in which guarantee

				issue is not otherwise required for the self-employed in that State.

											(B)Large

				employersSmall business health plans with participating

				employers that are larger than small employers (as defined in section

				808(a)(10)) shall enroll such large participating employers in accordance with

				rating rules that do not violate the rating rules for large employers in the

				State in which such large participating employers are located.

										(4)Regulatory

				requirementsSuch 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 small

				business health plans to design benefit optionsNothing in this

				part or any provision of State law (as defined in section 514(c)(1)) shall be

				construed to preclude a small business health plan or a health insurance issuer

				offering health insurance coverage in connection with a small business health

				plan from exercising its sole discretion in selecting the specific benefits and

				services consisting of medical care to be included as benefits under such plan

				or coverage, except that such benefits and services must meet the terms and

				specifications of part II of subtitle A of title XXIX of the Public Health

				Service Act (relating to lower cost plans), as added by title II of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2006.

								(c)Domicile and

				non-domicile States

									(1)Domicile

				stateCoverage shall be issued to a small business health plan in

				the State in which the sponsor's principal place of business is located.

									(2)Non-domicile

				statesWith respect to a State (other than the domicile State) in

				which participating employers of a small business health plan are located but

				in which the insurer of the small business health plan in the domicile State is

				not yet licensed, the following shall apply:

										(A)Temporary

				preemptionIf, upon the expiration of the 90-day period following

				the submission of a licensure application by such insurer (that includes a

				certified copy of an approved licensure application as submitted by such

				insurer in the domicile State) to such State, such State has not approved or

				denied such application, such State's health insurance licensure laws shall be

				temporarily preempted and the insurer shall be permitted to operate in such

				State, subject to the following terms:

											(i)Application of

				non-domicile State lawExcept with respect to licensure and with

				respect to the terms of subtitle A of title XXIX of the Public Health Service

				Act (relating to rating and benefits as added by the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2006), the laws and authority of the

				non-domicile State shall remain in full force and effect.

											(ii)Revocation of

				preemptionThe preemption of a non-domicile State's health

				insurance licensure laws pursuant to this subparagraph, shall be terminated

				upon the occurrence of either of the following:

												(I)Approval or denial of

				applicationThe approval of denial of an insurer's licensure

				application, following the laws and regulations of the non-domicile State with

				respect to licensure.

												(II)Determination of

				material violationA determination by a non-domicile State that

				an insurer operating in a non-domicile State pursuant to the preemption

				provided for in this subparagraph is in material violation of the insurance

				laws (other than licensure and with respect to the terms of subtitle A of title

				XXIX of the Public Health Service Act (relating to rating and benefits added by

				the Health Insurance Marketplace

				Modernization and Affordability Act of 2006)) of such

				State.

												(B)No prohibition on

				promotionNothing in this paragraph shall be construed to

				prohibit a small business health plan or an insurer from promoting coverage

				prior to the expiration of the 90-day period provided for in subparagraph (A),

				except that no enrollment or collection of contributions shall occur before the

				expiration of such 90-day period.

										(C)licensureExcept

				with respect to the application of the temporary preemption provision of this

				paragraph, nothing in this part shall be construed to limit the requirement

				that insurers issuing coverage to small business health plans shall be licensed

				in each State in which the small business health plans operate.

										(D)Servicing by licensed

				insurersNotwithstanding subparagraph (C), the requirements of

				this subsection may also be satisfied if the participating employers of a small

				business health plan are serviced by a licensed insurer in that State, even

				where such insurer is not the insurer of such small business health plan in the

				State in which such small business health plan is domiciled.

										806.Requirements for

				application and related requirements

								(a)Filing

				feeUnder the procedure prescribed pursuant to section 802(a), a

				small business health plan shall pay to the applicable authority at the time of

				filing an application 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 Acts, for the sole purpose of administering

				the certification procedures applicable with respect to small business health

				plans.

								(b)Information to be

				included in application for certificationAn application for

				certification under this part meets the requirements of this section only if it

				includes, in a manner and form which shall be prescribed by the applicable

				authority by regulation, at least the following information:

									(1)Identifying

				informationThe 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 businessThe 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

				requirementsEvidence provided by the board of trustees that the

				bonding requirements of section 412 will be met as of the date of the

				application or (if later) commencement of operations.

									(4)Plan

				documentsA copy of the documents governing the plan (including

				any bylaws and trust agreements), the summary plan description, and other

				material describing the benefits that will be provided to participants and

				beneficiaries under the plan.

									(5)Agreements with service

				providersA copy of any agreements between the plan, health

				insurance issuer, and contract administrators and other service

				providers.

									(c)Filing notice of

				certification with StatesA certification granted under this part

				to a small business health plan shall not be effective unless written notice of

				such certification is filed with the applicable State authority of each State

				in which the small business health plans operate.

								(d)Notice of material

				changesIn the case of any small business health plan certified

				under this part, descriptions 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

				regulation prior notice of material changes with respect to specified matters

				which might serve as the basis for suspension or revocation of the

				certification.

								807.Notice requirements

				for voluntary terminationA

				small business health plan which is or has been certified under this part may

				terminate (upon or at any time after cessation of accruals 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 beneficiaries a written notice of intent to terminate stating

				that such termination is intended and the proposed termination date;

								(2)develops a plan for

				winding up the affairs of the plan in connection with such termination in a

				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 applicable authority.

								Actions

				required under this section shall be taken in such form and manner as may be

				prescribed by the applicable authority by regulation.808.Definitions and rules

				of construction

								(a)DefinitionsFor

				purposes of this part—

									(1)Affiliated

				memberThe term affiliated 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 affiliated status with

				the sponsor, or

										(B)in the case of a sponsor

				with members which consist of associations, a person who is a member or

				employee of any such association and elects an affiliated status with the

				sponsor.

										(2)Applicable

				authorityThe term applicable authority means the

				Secretary of Labor, except that, in connection with any exercise of the

				Secretary's authority with respect to which the Secretary is required under

				section 506(d) to consult with a State, such term means the Secretary, in

				consultation with such State.

									(3)Applicable State

				authorityThe term applicable State authority means,

				with respect to a health insurance issuer in a State, the State insurance

				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.

									(4)Group health

				planThe term group health plan has the meaning

				provided in section 733(a)(1) (after applying subsection (b) of this

				section).

									(5)Health insurance

				coverageThe term health insurance coverage has the

				meaning provided in section 733(b)(1), except that such term shall not include

				excepted benefits (as defined in section 733(c)).

									(6)Health insurance

				issuerThe term health insurance issuer has the

				meaning provided in section 733(b)(2).

									(7)Individual

				market

										(A)In

				generalThe term individual market means the market

				for health insurance coverage offered to individuals other than in connection

				with a group health plan.

										(B)Treatment of very small

				groups

											(i)In

				generalSubject 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 section

				732(d)(3) on the first day of the plan year.

											(ii)State

				exceptionClause (i) shall not apply in the case of health

				insurance 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)Medical

				careThe term medical care has the meaning provided

				in section 733(a)(2).

									(9)Participating

				employerThe term participating employer means, in

				connection with a small business health plan, any employer, if any individual

				who is an employee of such employer, a partner in such employer, or a

				self-employed individual 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,

				partner, or self-employed individual in relation to the plan.

									(10)Small

				employerThe term small employer means, in

				connection with a group health plan with respect to a plan year, a small

				employer as defined in section 2791(e)(4).

									(11)Trade association and

				professional associationThe terms trade association

				and professional association mean an entity that meets the

				requirements of section 1.501(c)(6)-1 of title 26, Code of Federal Regulations

				(as in effect on the date of enactment of this Act).

									(b)Rule of

				constructionFor purposes of determining whether a plan, fund, or

				program is an employee welfare benefit plan which is a small business health

				plan, and for purposes of applying this title in connection with such plan,

				fund, or program so determined to be such an employee welfare benefit

				plan—

									(1)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 partnership; and

									(2)in the case of a

				self-employed individual, the term employer (as defined in section

				3(5)) and the term employee (as defined in section 3(6)) shall

				include such individual.

									(c)RenewalNotwithstanding

				any provision of law to the contrary, a participating employer in a small

				business health plan shall not be deemed to be a plan sponsor in applying

				requirements relating to coverage renewal.

								(d)Health savings

				accountsNothing in this part

				shall be construed to inhibit the development of health savings accounts

				pursuant to section 223 of the Internal Revenue Code of

				1986.

								.

				(b)Conforming amendments

			 to preemption rules

					(1)Section 514(b)(6) of such

			 Act (29 U.S.C.

			 1144(b)(6)) is amended by adding at the end the following new

			 subparagraph:

							(E)The preceding

				subparagraphs of this paragraph do not apply with respect to any State law in

				the case of a small business 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 Subsection (a) and inserting Subsections (a) and

			 (d);

						(B)in subsection (b)(5), by

			 striking subsection (a) in subparagraph (A) and inserting

			 subsection (a) of this section and subsections (a)(2)(B) and (b) of

			 section 805, and by striking subsection (a) in

			 subparagraph (B) and inserting subsection (a) of this section or

			 subsection (a)(2)(B) or (b) of section 805;

						(C)by redesignating

			 subsection (d) as subsection (e); and

						(D)by inserting after

			 subsection (c) the following new subsection:

								(d)(1)Except as provided

				in subsection (b)(4), the provisions of this title shall supersede any and all

				State laws insofar as they may now or hereafter preclude a health insurance

				issuer from offering health insurance coverage in connection with a small

				business health plan which is certified under part 8.

									(2)In any case in which

				health insurance coverage of any policy type is offered under a small business

				health plan certified under part 8 to a participating employer operating in

				such State, the provisions of this title shall supersede any and all laws of

				such State insofar as they may establish rating and benefit requirements that

				would otherwise apply to such coverage, provided the requirements of subtitle A

				of title XXIX of the Public Health Service Act (as added by title II of the

				Health Insurance Marketplace Modernization and Affordability Act of 2006)

				(concerning health plan rating and benefits) are

				met.

									.

						(c)Plan

			 sponsorSection 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 a

			 small business health plan under part 8..

				(d)Savings

			 clauseSection 731(c) of such Act is amended by inserting

			 or part 8 after this part.

				(e)Clerical

			 amendmentThe 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 small business health

				plans

							801. Small business health

				plans.

							802. Certification of small business

				health plans.

							803. Requirements relating to sponsors and

				boards of trustees.

							804. Participation and coverage

				requirements.

							805. Other requirements relating to plan

				documents, contribution rates, and benefit options.

							806. Requirements for application and

				related requirements.

							807. Notice requirements for voluntary

				termination.

							808. Definitions and rules of

				construction.

						.

				102.Cooperation between

			 Federal and State authoritiesSection 506 of the

			 Employee Retirement Income Security Act of

			 1974 (29

			 U.S.C. 1136) is amended by adding at the end the following new

			 subsection:

					(d)Consultation with

				States with respect to small business health plans

						(1)Agreements with

				StatesThe Secretary shall consult with the State recognized

				under paragraph (2) with respect to a small business health plan regarding the

				exercise of—

							(A)the Secretary’s authority

				under sections 502 and 504 to enforce the requirements for certification under

				part 8; and

							(B)the Secretary’s authority

				to certify small business health plans under part 8 in accordance with

				regulations of the Secretary applicable to certification under part 8.

							(2)Recognition of domicile

				StateIn carrying out paragraph (1), the Secretary shall ensure

				that only one State will be recognized, with respect to any particular small

				business health plan, as the State with which consultation is required. In

				carrying out this paragraph such State shall be the domicile State, as defined

				in section

				805(c).

						.

			103.Effective date and

			 transitional and other rules

				(a)Effective

			 dateThe amendments made by this title shall take effect 12

			 months after the date of the enactment of this Act. The Secretary of Labor

			 shall first issue all regulations necessary to carry out the amendments made by

			 this title within 6 months after the date of the enactment of this Act.

				(b)Treatment of certain

			 existing health benefits programs

					(1)In

			 generalIn 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 defined in

			 section

			 808(a)(2) of the Employee

			 Retirement Income Security Act of 1974 (as amended by this

			 subtitle)) by the arrangement of an application for certification 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 Security Act of 1974 shall be deemed met with

			 respect to such arrangement;

						(C)the requirements of

			 section 803(b) of such Act shall be deemed met, if the arrangement is operated

			 by a board of trustees which—

							(i)is elected by the

			 participating employers, with each employer having one vote; and

							(ii)has complete fiscal

			 control over the arrangement and which is responsible for all operations of the

			 arrangement;

							(D)the requirements of

			 section 804(a) of such Act shall be deemed met with respect to such

			 arrangement; and

						(E)the arrangement may be

			 certified by any applicable authority with respect to its operations 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

			 applicable requirements of this subsection are not met with respect to such

			 arrangement or at such time that the arrangement provides coverage to

			 participants and beneficiaries in any State other than the States in which

			 coverage is provided on such date of enactment.(2)DefinitionsFor

			 purposes of this subsection, the terms group health plan,

			 medical care, and participating employer shall have

			 the meanings provided in

			 section

			 808 of the Employee Retirement

			 Income Security Act of 1974, except that the reference in paragraph

			 (7) of such section to an small business health plan shall be

			 deemed a reference to an arrangement referred to in this subsection.

					IIMarket relief

			201.Market

			 reliefThe Public Health

			 Service Act (42 U.S.C. 201 et seq.) is amended by adding at the end the

			 following:

					XXIXHealth care insurance

				marketplace modernization

						2901.General insurance

				definitionsIn this title, the

				terms health insurance coverage, health insurance

				issuer, group health plan, and individual health

				insurance shall have the meanings given such terms in section

				2791.

						AMarket relief

							IRating

				requirements

								2911.Definitions

									(a)General

				definitionsIn this

				part:

										(1)Adopting

				stateThe term adopting State means a State that,

				with respect to the small group market, has enacted either the Model Small

				Group Rating Rules or, if applicable to such State, the Transitional Model

				Small Group Rating Rules, each in their entirety and as the exclusive laws of

				the State that relate to rating in the small group insurance market.

										(2)Applicable State

				authorityThe term applicable State authority

				means, with respect to a health insurance issuer in a State, the State

				insurance commissioner or official or officials designated by the State to

				enforce the insurance laws of such State.

										(3)Base premium

				rateThe term base premium rate means, for each

				class of business with respect to a rating period, the lowest premium rate

				charged or that could have been charged under a rating system for that class of

				business by the small employer carrier to small employers with similar case

				characteristics for health benefit plans with the same or similar

				coverage

										(4)Eligible

				insurerThe term eligible insurer means a health

				insurance issuer that is licensed in a State and that—

											(A)notifies the Secretary,

				not later than 30 days prior to the offering of coverage described in this

				subparagraph, that the issuer intends to offer health insurance coverage

				consistent with the Model Small Group Rating Rules or, as applicable,

				transitional small group rating rules in a State;

											(B)notifies the insurance

				department of a nonadopting State (or other State agency), not later than 30

				days prior to the offering of coverage described in this subparagraph, that the

				issuer intends to offer small group health insurance coverage in that State

				consistent with the Model Small Group Rating Rules, and provides with such

				notice a copy of any insurance policy that it intends to offer in the State,

				its most recent annual and quarterly financial reports, and any other

				information required to be filed with the insurance department of the State (or

				other State agency); and

											(C)includes in the terms of

				the health insurance coverage offered in nonadopting States (including in the

				terms of any individual certificates that may be offered to individuals in

				connection with such group health coverage) and filed with the State pursuant

				to subparagraph (B), a description in the insurer's contract of the Model Small

				Group Rating Rules and an affirmation that such Rules are included in the terms

				of such contract.

											(5)Health insurance

				coverageThe term health insurance coverage means

				any coverage issued in the small group health insurance market, except that

				such term shall not include excepted benefits (as defined in section

				2791(c)).

										(6)Index

				rateThe term index rate means for each class of

				business with respect to the rating period for small employers with similar

				case characteristics, the arithmetic average of the applicable base premium

				rate and the corresponding highest premium rate.

										(7) Model Small Group

				Rating RulesThe term  Model Small Group Rating

				Rules means the rules set forth in subsection (b).

										(8)Nonadopting

				stateThe term nonadopting State means a State that

				is not an adopting State.

										(9)Small group insurance

				marketThe term small group insurance market shall

				have the meaning given the term small group market in section

				2791(e)(5).

										(10)State

				lawThe term State law means all laws, decisions,

				rules, regulations, or other State actions (including actions by a State

				agency) having the effect of law, of any State.

										(b)Definition relating to

				Model Small Group Rating RulesThe term Model Small Group

				Rating Rules means adapted rating rules drawn from the Adopted Small

				Employer Health Insurance Availability Model Act of 1993 of the National

				Association of Insurance Commissioners consisting of the following:

										(1)Premium

				ratesPremium rates for health benefit plans to which this title

				applies shall be subject to the following provisions relating to

				premiums:

											(A)Index

				rateThe index rate for a rating period for any class of business

				shall not exceed the index rate for any other class of business by more than 20

				percent.

											(B)Class of

				businessesWith respect to a class of business, the premium rates

				charged during a rating period to small employers with similar case

				characteristics for the same or similar coverage or the rates that could be

				charged to such employers under the rating system for that class of business,

				shall not vary from the index rate by more than 25 percent of the index rate

				under subparagraph (A).

											(C)Increases for new

				rating periodsThe percentage increase in the premium rate

				charged to a small employer for a new rating period may not exceed the sum of

				the following:

												(i)The percentage change in

				the new business premium rate measured from the first day of the prior rating

				period to the first day of the new rating period. In the case of a health

				benefit plan into which the small employer carrier is no longer enrolling new

				small employers, the small employer carrier shall use the percentage change in

				the base premium rate, except that such change shall not exceed, on a

				percentage basis, the change in the new business premium rate for the most

				similar health benefit plan into which the small employer carrier is actively

				enrolling new small employers.

												(ii)Any adjustment, not to

				exceed 15 percent annually and adjusted pro rata for rating periods of less

				then 1 year, due to the claim experience, health status or duration of coverage

				of the employees or dependents of the small employer as determined from the

				small employer carrier's rate manual for the class of business involved.

												(iii)Any adjustment due to

				change in coverage or change in the case characteristics of the small employer

				as determined from the small employer carrier's rate manual for the class of

				business.

												(D)Uniform application of

				adjustmentsAdjustments in premium rates for claim experience,

				health status, or duration of coverage shall not be charged to individual

				employees or dependents. Any such adjustment shall be applied uniformly to the

				rates charged for all employees and dependents of the small employer.

											(E)Use of industry as a

				case characteristicA small employer carrier may utilize industry

				as a case characteristic in establishing premium rates, so long as the highest

				rate factor associated with any industry classification does not exceed the

				lowest rate factor associated with any industry classification by more than 15

				percent.

											(F)Consistent application

				of factorsSmall employer carriers shall apply rating factors,

				including case characteristics, consistently with respect to all small

				employers in a class of business. Rating factors shall produce premiums for

				identical groups which differ only by the amounts attributable to plan design

				and do not reflect differences due to the nature of the groups assumed to

				select particular health benefit plans.

											(G)Treatment of plans as

				having same rating periodA small employer carrier shall treat

				all health benefit plans issued or renewed in the same calendar month as having

				the same rating period.

											(H)Restricted network

				provisionsFor purposes of this subsection, a health benefit plan

				that contains a restricted network provision shall not be considered similar

				coverage to a health benefit plan that does not contain a similar provision if

				the restriction of benefits to network providers results in substantial

				differences in claims costs.

											(I)Prohibition on use of

				certain case characteristicsThe small employer carrier shall not

				use case characteristics other than age, gender, industry, geographic area,

				family composition, group size, and participation in wellness programs without

				prior approval of the applicable State authority.

											(J)Require

				compliancePremium rates for small business health benefit plans

				shall comply with the requirements of this subsection notwithstanding any

				assessments paid or payable by a small employer carrier as required by a

				State's small employer carrier reinsurance program.

											(2)Establishment of

				separate class of businessSubject to paragraph (3), a small

				employer carrier may establish a separate class of business only to reflect

				substantial differences in expected claims experience or administrative costs

				related to the following:

											(A)The small employer

				carrier uses more than one type of system for the marketing and sale of health

				benefit plans to small employers.

											(B)The small employer

				carrier has acquired a class of business from another small employer

				carrier.

											(C)The small employer

				carrier provides coverage to one or more association groups that meet the

				requirements of this title.

											(3)LimitationA

				small employer carrier may establish up to 9 separate classes of business under

				paragraph (2), excluding those classes of business related to association

				groups under this title.

										(4)Additional

				groupingsThe applicable State authority may approve the

				establishment of additional distinct groupings by small employer carriers upon

				the submission of an application to the applicable State authority and a

				finding by the applicable State authority that such action would enhance the

				efficiency and fairness of the small employer insurance marketplace.

										(5)Limitation on

				transfersA small employer carrier shall not transfer a small

				employer involuntarily into or out of a class of business. A small employer

				carrier shall not offer to transfer a small employer into or out of a class of

				business unless such offer is made to transfer all small employers in the class

				of business without regard to case characteristics, claim experience, health

				status or duration of coverage since issue.

										(6)Suspension of the

				rulesThe applicable State authority may suspend, for a specified

				period, the application of paragraph (1) to the premium rates applicable to one

				or more small employers included within a class of business of a small employer

				carrier for one or more rating periods upon a filing by the small employer

				carrier and a finding by the applicable State authority either that the

				suspension is reasonable when considering the financial condition of the small

				employer carrier or that the suspension would enhance the efficiency and

				fairness of the marketplace for small employer health insurance.

										2912.Rating rules

									(a)Implementation of Model

				Small Group Rating RulesNot later than 6 months after the

				enactment of this title, the Secretary shall promulgate regulations

				implementing the Model Small Group Rating Rules pursuant to section

				2911(b).

									(b)Transitional Model

				Small Group Rating Rules

										(1)In

				generalNot later than 6 months after the date of enactment of

				this title and to the extent necessary to provide for a graduated transition to

				the Model Small Group Rating Rules, the Secretary, in consultation with the

				NAIC, shall promulgate Transitional Model Small Group Rating Rules in

				accordance with this subsection, which shall be applicable with respect to

				certain non-adopting States for a period of not to exceed 5 years from the date

				of the promulgation of the Model Small Group Rating Rules pursuant to

				subsection (a). After the expiration of such 5-year period, the transitional

				model small group rating rules shall expire, and the Model Small Group Rating

				Rules shall then apply with respect to all non-adopting States pursuant to the

				provisions of this part.

										(2)Premium variation

				during transition

											(A)Transition

				StatesDuring the transition period described in paragraph (1),

				small group health insurance coverage offered in a non-adopting State that had

				in place premium rating band requirements or premium limits that varied by less

				than 12.5 percent from the index rate within a class of business on the date of

				enactment of this title, shall not be subject to the premium variation

				provision of section 2911(b)(1) of the Model Small Group Rating Rules and shall

				instead be subject to the Transitional Model Small Group Rating Rules as

				promulgated by the Secretary pursuant to paragraph (1).

											(B)Non-transition

				StatesDuring the transition period described in paragraph (1),

				and thereafter, small group health insurance coverage offered in a non-adopting

				State that had in place premium rating band requirements or premium limits that

				varied by more than 12.5 percent from the index rate within a class of business

				on the date of enactment of this title, shall not be subject to the

				Transitional Model Small Group Rating Rules as promulgated by the Secretary

				pursuant to paragraph (1), and instead shall be subject to the Model Small

				Group Rating Rules effective beginning with the first plan year or calendar

				year following the promulgation of such Rules, at the election of the eligible

				insurer.

											(3)Transitioning of old

				businessIn developing the transitional model small group rating

				rules under paragraph (1), the Secretary shall, after consultation with the

				National Association of Insurance Commissioners and representatives of insurers

				operating in the small group health insurance market, promulgate special

				transition standards and timelines with respect to independent rating classes

				for old and new business, to the extent reasonably necessary to protect health

				insurance consumers and to ensure a stable and fair transition for old and new

				market entrants.

										(4)Other transitional

				authorityIn developing the Transitional Model Small Group Rating

				Rules under paragraph (1), the Secretary shall provide for the application of

				the Transitional Model Small Group Rating Rules in transition States as the

				Secretary may determine necessary for a an effective transition.

										(c)Market

				re-entry

										(1)In

				generalNotwithstanding any other provision of law, a health

				insurance issuer that has voluntarily withdrawn from providing coverage in the

				small group market prior to the date of enactment of the

				Health Insurance Marketplace Modernization

				and Affordability Act of 2006 shall not be excluded from

				re-entering such market on a date that is more than 180 days after such date of

				enactment.

										(2)TerminationThe

				provision of this subsection shall terminate on the date that is 24 months

				after the date of enactment of the Health

				Insurance Marketplace Modernization and Affordability Act of

				2006.

										2913.Application and

				preemption

									(a)Superseding of state

				law

										(1)In

				generalThis part shall supersede any and all State laws of a

				non-adopting State insofar as such State laws (whether enacted prior to or

				after the date of enactment of this subtitle) relate to rating in the small

				group insurance market as applied to an eligible insurer, or small group health

				insurance coverage issued by an eligible insurer, including with respect to

				coverage issued to a small employer through a small business health plan, in a

				State.

										(2)Nonadopting

				statesThis part shall supersede any and all State laws of a

				nonadopting State insofar as such State laws (whether enacted prior to or after

				the date of enactment of this subtitle)—

											(A)prohibit an eligible

				insurer from offering, marketing, or implementing small group health insurance

				coverage consistent with the Model Small Group Rating Rules or transitional

				model small group rating rules; or

											(B)have the effect of

				retaliating against or otherwise punishing in any respect an eligible insurer

				for offering, marketing, or implementing small group health insurance coverage

				consistent with the Model Small Group Rating Rules or transitional model small

				group rating rules.

											(b)Savings clause and

				construction

										(1)Nonapplication to

				adopting statesSubsection (a) shall not apply with respect to

				adopting states.

										(2)Nonapplication to

				certain insurersSubsection (a) shall not apply with respect to

				insurers that do not qualify as eligible insurers that offer small group health

				insurance coverage in a nonadopting State.

										(3)Nonapplication where

				obtaining relief under state lawSubsection (a)(1) shall not

				supercede any State law in a nonadopting State to the extent necessary to

				permit individuals or the insurance department of the State (or other State

				agency) to obtain relief under State law to require an eligible insurer to

				comply with the Model Small Group Rating Rules or transitional model small

				group rating rules.

										(4)No effect on

				preemptionIn no case shall this part be construed to limit or

				affect in any manner the preemptive scope of sections 502 and 514 of the

				Employee Retirement Income Security Act of 1974. In no case shall this part be

				construed to create any cause of action under Federal or State law or enlarge

				or affect any remedy available under the Employee Retirement Income Security

				Act of 1974

										(c)Effective

				dateThis section shall apply, at the election of the eligible

				insurer, beginning in the first plan year or the first calendar year following

				the issuance of the final rules by the Secretary under the Model Small Group

				Rating Rules or, as applicable, the Transitional Model Small Group Rating

				Rules, but in no event earlier than the date that is 12 months after the date

				of enactment of this title.

									2914.Civil actions and

				jurisdiction

									(a)In

				generalThe courts of the United States shall have exclusive

				jurisdiction over civil actions involving the interpretation of this

				part.

									(b)ActionsAn

				eligible insurer may bring an action in the district courts of the United

				States for injunctive or other equitable relief against any officials or agents

				of a nonadopting State in connection with any conduct or action, or proposed

				conduct or action, by such officials or agents which violates, or which would

				if undertaken violate, section 2913.

									(c)Direct filing in Court

				of AppealsAt the election of the eligible insurer, an action may

				be brought under subsection (b) directly in the United States Court of Appeals

				for the circuit in which the nonadopting State is located by the filing of a

				petition for review in such Court.

									(d)Expedited

				review

										(1)District

				courtIn the case of an action brought in a district court of the

				United States under subsection (b), such court shall complete such action,

				including the issuance of a judgment, prior to the end of the 120-day period

				beginning on the date on which such action is filed, unless all parties to such

				proceeding agree to an extension of such period.

										(2)Court of

				AppealsIn the case of an action brought directly in a United

				States Court of Appeal under subsection (c), or in the case of an appeal of an

				action brought in a district court under subsection (b), such Court shall

				complete all action on the petition, including the issuance of a judgment,

				prior to the end of the 60-day period beginning on the date on which such

				petition is filed with the Court, unless all parties to such proceeding agree

				to an extension of such period.

										(e)Standard of

				reviewA court in an action filed under this section, shall

				render a judgment based on a review of the merits of all questions presented in

				such action and shall not defer to any conduct or action, or proposed conduct

				or action, of a nonadopting State.

									2915.Ongoing

				reviewNot later than 5 years

				after the date on which the Model Small Group Rating Rules are issued under

				this part, and every 5 years thereafter, the Secretary, in consultation with

				the National Association of Insurance Commissioners, shall prepare and submit

				to the appropriate committees of Congress a report that assesses the effect of

				the Model Small Group Rating Rules on access, cost, and market functioning in

				the small group market. Such report may, if the Secretary, in consultation with

				the National Association of Insurance Commissioners, determines such is

				appropriate for improving access, costs, and market functioning, contain

				legislative proposals for recommended modification to such Model Small Group

				Rating Rules.

								IIAffordable

				plans

								2921.DefinitionsIn this part:

									(1)Adopting

				stateThe term adopting State means a State that has

				enacted the Benefit Choice Standards in their entirety and as the exclusive

				laws of the State that relate to benefit, service, and provider mandates in the

				group and individual insurance markets.

									(2)Benefit Choice

				StandardsThe term Benefit Choice Standards means

				the Standards issued under section 2922.

									(3)Eligible

				insurerThe term eligible insurer means a health

				insurance issuer that is licensed in a nonadopting State and that—

										(A)notifies the Secretary,

				not later than 30 days prior to the offering of coverage described in this

				subparagraph, that the issuer intends to offer health insurance coverage

				consistent with the Benefit Choice Standards in a nonadopting State;

										(B)notifies the insurance

				department of a nonadopting State (or other State agency), not later than 30

				days prior to the offering of coverage described in this subparagraph, that the

				issuer intends to offer health insurance coverage in that State consistent with

				the Benefit Choice Standards, and provides with such notice a copy of any

				insurance policy that it intends to offer in the State, its most recent annual

				and quarterly financial reports, and any other information required to be filed

				with the insurance department of the State (or other State agency) by the

				Secretary in regulations; and

										(C)includes in the terms of

				the health insurance coverage offered in nonadopting States (including in the

				terms of any individual certificates that may be offered to individuals in

				connection with such group health coverage) and filed with the State pursuant

				to subparagraph (B), a description in the insurer's contract of the Benefit

				Choice Standards and that adherence to such Standards is included as a term of

				such contract.

										(4)Health insurance

				coverageThe term health insurance coverage means

				any coverage issued in the group or individual health insurance markets, except

				that such term shall not include excepted benefits (as defined in section

				2791(c)).

									(5)Nonadopting

				stateThe term nonadopting State means a State that

				is not an adopting State.

									(6)Small group insurance

				marketThe term small group insurance market shall

				have the meaning given the term small group market in section

				2791(e)(5).

									(7)State

				lawThe term State law means all laws, decisions,

				rules, regulations, or other State actions (including actions by a State

				agency) having the effect of law, of any State.

									2922.Offering affordable

				plans

									(a)Benefit choice

				options

										(1)DevelopmentNot

				later than 6 months after the date of enactment of this title, the Secretary

				shall issue, by interim final rule, Benefit Choice Standards that implement the

				standards provided for in this part.

										(2)Basic

				optionsThe Benefit Choice Standards shall provide that a health

				insurance issuer in a State, may offer a coverage plan or plan in the small

				group market, individual market, large group market, or through a small

				business health plan, that does not comply with one or more mandates regarding

				covered benefits, services, or category of provider as may be in effect in such

				State with respect to such market or markets (either prior to or following the

				date of enactment of this title), if such issuer also offers in such market or

				markets an enhanced option as provided for in paragraph (3).

										(3)Enhanced

				optionA health insurance issuer issuing a basic option as

				provided for in paragraph (2) shall also offer to purchasers (including, with

				respect to a small business health plan, the participating employers of such

				plan) an enhanced option, which shall at a minimum include such covered

				benefits, services, and categories of providers as are covered by a State

				employee coverage plan in one of the 5 most populous States as are in effect in

				the calendar year in which such enhanced option is offered.

										(4)Publication of

				benefitsNot later than 3 months after the date of enactment of

				this title, and on the first day of every calendar year thereafter, the

				Secretary shall publish in the Federal Register such covered benefits,

				services, and categories of providers covered in that calendar year by the

				State employee coverage plans in the 5 most populous States.

										(b)Effective

				dates

										(1)Small business health

				plansWith respect to health insurance provided to participating

				employers of small business health plans, the requirements of this part

				(concerning lower cost plans) shall apply beginning on the date that is 12

				months after the date of enactment of this title.

										(2)Non-association

				coverageWith respect to health insurance provided to groups or

				individuals other than participating employers of small business health plans,

				the requirements of this part shall apply beginning on the date that is 15

				months after the date of enactment of this title.

										2923.Application and

				preemption

									(a)Superceding of state

				law

										(1)In

				generalThis part shall supersede any and all State laws insofar

				as such laws relate to mandates relating to covered benefits, services, or

				categories of provider in the health insurance market as applied to an eligible

				insurer, or health insurance coverage issued by an eligible insurer, including

				with respect to coverage issued to a small business health plan, in a

				nonadopting State.

										(2)Nonadopting

				statesThis part shall supersede any and all State laws of a

				nonadopting State (whether enacted prior to or after the date of enactment of

				this title) insofar as such laws—

											(A)prohibit an eligible

				insurer from offering, marketing, or implementing health insurance coverage

				consistent with the Benefit Choice Standards, as provided for in section

				2922(a); or

											(B)have the effect of

				retaliating against or otherwise punishing in any respect an eligible insurer

				for offering, marketing, or implementing health insurance coverage consistent

				with the Benefit Choice Standards.

											(b)Savings clause and

				construction

										(1)Nonapplication to

				adopting statesSubsection (a) shall not apply with respect to

				adopting States.

										(2)Nonapplication to

				certain insurersSubsection (a) shall not apply with respect to

				insurers that do not qualify as eligible insurers who offer health insurance

				coverage in a nonadopting State.

										(3)Nonapplication where

				obtaining relief under state lawSubsection (a)(1) shall not

				supercede any State law of a nonadopting State to the extent necessary to

				permit individuals or the insurance department of the State (or other State

				agency) to obtain relief under State law to require an eligible insurer to

				comply with the Benefit Choice Standards.

										(4)No effect on

				preemptionIn no case shall this part be construed to limit or

				affect in any manner the preemptive scope of sections 502 and 514 of the

				Employee Retirement Income Security Act of 1974. In no case shall this part be

				construed to create any cause of action under Federal or State law or enlarge

				or affect any remedy available under the Employee Retirement Income Security

				Act of 1974

										2924.Civil actions and

				jurisdiction

									(a)In

				generalThe courts of the United States shall have exclusive

				jurisdiction over civil actions involving the interpretation of this

				part.

									(b)ActionsAn

				eligible insurer may bring an action in the district courts of the United

				States for injunctive or other equitable relief against any officials or agents

				of a nonadopting State in connection with any conduct or action, or proposed

				conduct or action, by such officials or agents which violates, or which would

				if undertaken violate, section 2923.

									(c)Direct filing in Court

				of AppealsAt the election of the eligible insurer, an action may

				be brought under subsection (b) directly in the United States Court of Appeals

				for the circuit in which the nonadopting State is located by the filing of a

				petition for review in such Court.

									(d)Expedited

				review

										(1)District

				courtIn the case of an action brought in a district court of the

				United States under subsection (b), such court shall complete such action,

				including the issuance of a judgment, prior to the end of the 120-day period

				beginning on the date on which such action is filed, unless all parties to such

				proceeding agree to an extension of such period.

										(2)Court of

				AppealsIn the case of an action brought directly in a United

				States Court of Appeal under subsection (c), or in the case of an appeal of an

				action brought in a district court under subsection (b), such Court shall

				complete all action on the petition, including the issuance of a judgment,

				prior to the end of the 60-day period beginning on the date on which such

				petition is filed with the Court, unless all parties to such proceeding agree

				to an extension of such period.

										(e)Standard of

				reviewA court in an action filed under this section, shall

				render a judgment based on a review of the merits of all questions presented in

				such action and shall not defer to any conduct or action, or proposed conduct

				or action, of a nonadopting State.

									2925.Rules of

				construction

									(a)In

				generalNotwithstanding any

				other provision of Federal or State law, a health insurance issuer in an

				adopting State or an eligible insurer in a non-adopting State may amend its

				existing policies to be consistent with the terms of this subtitle (concerning

				rating and benefits).

									(b)Health savings

				accountsNothing in this

				subtitle shall be construed to inhibit the development of health savings

				accounts pursuant to section 223 of the Internal Revenue Code of

				1986.

									.

			IIIHarmonization of health

			 insurance standards

			301.Health Insurance

			 Standards HarmonizationTitle

			 XXIX of the Public Health Service Act (as added by section 201) is amended by

			 adding at the end the following:

					BStandards

				harmonization

						2931.DefinitionsIn this subtitle:

							(1)Adopting

				stateThe term adopting State means a State that has

				enacted the harmonized standards adopted under this subtitle in their entirety

				and as the exclusive laws of the State that relate to the harmonized

				standards.

							(2)Eligible

				insurerThe term eligible insurer means a health

				insurance issuer that is licensed in a nonadopting State and that—

								(A)notifies the Secretary,

				not later than 30 days prior to the offering of coverage described in this

				subparagraph, that the issuer intends to offer health insurance coverage

				consistent with the harmonized standards in a nonadopting State;

								(B)notifies the insurance

				department of a nonadopting State (or other State agency), not later than 30

				days prior to the offering of coverage described in this subparagraph, that the

				issuer intends to offer health insurance coverage in that State consistent with

				the harmonized standards published pursuant to section 2932(d), and provides

				with such notice a copy of any insurance policy that it intends to offer in the

				State, its most recent annual and quarterly financial reports, and any other

				information required to be filed with the insurance department of the State (or

				other State agency) by the Secretary in regulations; and

								(C)includes in the terms of

				the health insurance coverage offered in nonadopting States (including in the

				terms of any individual certificates that may be offered to individuals in

				connection with such health coverage) and filed with the State pursuant to

				subparagraph (B), a description of the harmonized standards published pursuant

				to section 2932(g)(2) and an affirmation that such standards are a term of the

				contract.

								(3)Harmonized

				standardsThe term harmonized standards means the

				standards certified by the Secretary under section 2932(d).

							(4)Health insurance

				coverageThe term health insurance coverage means

				any coverage issued in the health insurance market, except that such term shall

				not include excepted benefits (as defined in section 2791(c).

							(5)Nonadopting

				stateThe term nonadopting State means a State that

				fails to enact, within 18 months of the date on which the Secretary certifies

				the harmonized standards under this subtitle, the harmonized standards in their

				entirety and as the exclusive laws of the State that relate to the harmonized

				standards.

							(6)State

				lawThe term State law means all laws, decisions,

				rules, regulations, or other State actions (including actions by a State

				agency) having the effect of law, of any State.

							2932.Harmonized

				standards

							(a)Board

								(1)EstablishmentNot

				later than 3 months after the date of enactment of this title, the Secretary,

				in consultation with the NAIC, shall establish the Health Insurance Consensus

				Standards Board (referred to in this subtitle as the Board) to

				develop recommendations that harmonize inconsistent State health insurance laws

				in accordance with the procedures described in subsection (b).

								(2)Composition

									(A)In

				generalThe Board shall be composed of the following voting

				members to be appointed by the Secretary after considering the recommendations

				of professional organizations representing the entities and constituencies

				described in this paragraph:

										(i)Four State insurance

				commissioners as recommended by the National Association of Insurance

				Commissioners, of which 2 shall be Democrats and 2 shall be Republicans, and of

				which one shall be designated as the chairperson and one shall be designated as

				the vice chairperson.

										(ii)Four representatives of

				State government, two of which shall be governors of States and two of which

				shall be State legislators, and two of which shall be Democrats and two of

				which shall be Republicans.

										(iii)Four representatives of

				health insurers, of which one shall represent insurers that offer coverage in

				the small group market, one shall represent insurers that offer coverage in the

				large group market, one shall represent insurers that offer coverage in the

				individual market, and one shall represent carriers operating in a regional

				market.

										(iv)Two representatives of

				insurance agents and brokers.

										(v)Two independent

				representatives of the American Academy of Actuaries who have familiarity with

				the actuarial methods applicable to health insurance.

										(B)Ex officio

				memberA representative of the Secretary shall serve as an ex

				officio member of the Board.

									(3)Advisory

				panelThe Secretary shall establish an advisory panel to provide

				advice to the Board, and shall appoint its members after considering the

				recommendations of professional organizations representing the entities and

				constituencies identified in this paragraph:

									(A)Two representatives of

				small business health plans.

									(B)Two representatives of

				employers, of which one shall represent small employers and one shall represent

				large employers.

									(C)Two representatives of

				consumer organizations.

									(D)Two representatives of

				health care providers.

									(4)QualificationsThe

				membership of the Board shall include individuals with national recognition for

				their expertise in health finance and economics, actuarial science, health

				plans, providers of health services, and other related fields, who provide a

				mix of different professionals, broad geographic representation, and a balance

				between urban and rural representatives.

								(5)Ethical

				disclosureThe Secretary shall establish a system for public

				disclosure by members of the Board of financial and other potential conflicts

				of interest relating to such members. Members of the Board shall be treated as

				employees of Congress for purposes of applying title I of the Ethics in

				Government Act of 1978 (Public Law 95–521).

								(6)Director and

				staffSubject to such review as the Secretary deems necessary to

				assure the efficient administration of the Board, the chair and vice-chair of

				the Board may—

									(A)employ and fix the

				compensation of an Executive Director (subject to the approval of the

				Comptroller General) and such other personnel as may be necessary to carry out

				its duties (without regard to the provisions of title 5, United States Code,

				governing appointments in the competitive service);

									(B)seek such assistance and

				support as may be required in the performance of its duties from appropriate

				Federal departments and agencies;

									(C)enter into contracts or

				make other arrangements, as may be necessary for the conduct of the work of the

				Board (without regard to section 3709 of the Revised Statutes (41 U.S.C.

				5));

									(D)make advance, progress,

				and other payments which relate to the work of the Board;

									(E)provide transportation

				and subsistence for persons serving without compensation; and

									(F)prescribe such rules as

				it deems necessary with respect to the internal organization and operation of

				the Board.

									(7)TermsThe

				members of the Board shall serve for the duration of the Board. Vacancies in

				the Board shall be filled as needed in a manner consistent with the composition

				described in paragraph (2).

								(b)Development of

				harmonized standards

								(1)In

				generalIn accordance with the process described in subsection

				(c), the Board shall identify and recommend nationally harmonized standards for

				each of the following process categories:

									(A)Form filing and rate

				filingForm and rate filing standards shall be established which

				promote speed to market and include the following defined areas for States that

				require such filings:

										(i)Procedures for form and

				rate filing pursuant to a streamlined administrative filing process.

										(ii)Timeframes for filings

				to be reviewed by a State if review is required before they are deemed

				approved.

										(iii)Timeframes for an

				eligible insurer to respond to State requests following its review.

										(iv)A process for an

				eligible insurer to self-certify.

										(v)State development of form

				and rate filing templates that include only non-preempted State law and Federal

				law requirements for eligible insurers with timely updates.

										(vi)Procedures for the

				resubmission of forms and rates.

										(vii)Disapproval rationale

				of a form or rate filing based on material omissions or violations of

				non-preempted State law or Federal law with violations cited and

				explained.

										(viii)For States that may

				require a hearing, a rationale for hearings based on violations of

				non-preempted State law or insurer requests.

										(B)Market conduct

				reviewMarket conduct review standards shall be developed which

				provide for the following:

										(i)Mandatory participation

				in national databases.

										(ii)The confidentiality of

				examination materials.

										(iii)The identification of

				the State agency with primary responsibility for examinations.

										(iv)Consultation and

				verification of complaint data with the eligible insurer prior to State

				actions.

										(v)Consistency of reporting

				requirements with the recordkeeping and administrative practices of the

				eligible insurer.

										(vi)Examinations that seek

				to correct material errors and harmful business practices rather than

				infrequent errors.

										(vii)Transparency and

				publishing of the State's examination standards.

										(viii)Coordination of market

				conduct analysis.

										(ix)Coordination and

				nonduplication between State examinations of the same eligible insurer.

										(x)Rationale and protocols

				to be met before a full examination is conducted.

										(xi)Requirements on

				examiners prior to beginning examinations such as budget planning and work

				plans.

										(xii)Consideration of

				methods to limit examiners' fees such as caps, competitive bidding, or other

				alternatives.

										(xiii)Reasonable fines and

				penalties for material errors and harmful business practices.

										(C)Prompt payment of

				claimsThe Board shall establish prompt payment standards for

				eligible insurers based on standards similar to those applicable to the Social

				Security Act as set forth in section 1842(c)(2) of such Act (42 U.S.C.

				1395u(c)(2)). Such prompt payment standards shall be consistent with the timing

				and notice requirements of the claims procedure rules to be specified under

				subparagraph (D), and shall include appropriate exceptions such as for fraud,

				nonpayment of premiums, or late submission of claims.

									(D)Internal

				reviewThe Board shall establish standards for claims procedures

				for eligible insurers that are consistent with the requirements relating to

				initial claims for benefits and appeals of claims for benefits under the

				Employee Retirement Income Security Act of 1974 as set forth in section 503 of

				such Act (29 U.S.C. 1133) and the regulations thereunder.

									(2)RecommendationsThe

				Board shall recommend harmonized standards for each element of the categories

				described in subparagraph (A) through (D) of paragraph (1) within each such

				market. Notwithstanding the previous sentence, the Board shall not recommend

				any harmonized standards that disrupt, expand, or duplicate the benefit,

				service, or provider mandate standards provided in the Benefit Choice Standards

				pursuant to section 2922(a).

								(c)Process for identifying

				harmonized standards

								(1)In

				generalThe Board shall develop recommendations to harmonize

				inconsistent State insurance laws with respect to each of the process

				categories described in subparagraphs (A) through (D) of subsection

				(b)(1).

								(2)RequirementsIn

				adopting standards under this section, the Board shall consider the

				following:

									(A)Any model acts or

				regulations of the National Association of Insurance Commissioners in each of

				the process categories described in subparagraphs (A) through (D) of subsection

				(b)(1).

									(B)Substantially similar

				standards followed by a plurality of States, as reflected in existing State

				laws, relating to the specific process categories described in subparagraphs

				(A) through (D) of subsection (b)(1).

									(C)Any Federal law

				requirement related to specific process categories described in subparagraphs

				(A) through (D) of subsection (b)(1).

									(D)In the case of the

				adoption of any standard that differs substantially from those referred to in

				subparagraphs (A), (B), or (C), the Board shall provide evidence to the

				Secretary that such standard is necessary to protect health insurance consumers

				or promote speed to market or administrative efficiency.

									(E)The criteria specified in

				clauses (i) through (iii) of subsection (d)(2)(B).

									(d)Recommendations and

				certification by Secretary

								(1)RecommendationsNot

				later than 18 months after the date on which all members of the Board are

				selected under subsection (a), the Board shall recommend to the Secretary the

				certification of the harmonized standards identified pursuant to subsection

				(c).

								(2)Certification

									(A)In

				generalNot later than 120 days after receipt of the Board's

				recommendations under paragraph (1), the Secretary shall certify the

				recommended harmonized standards as provided for in subparagraph (B), and issue

				such standards in the form of an interim final regulation.

									(B)Certification

				processThe Secretary shall establish a process for certifying

				the recommended harmonized standard, by category, as recommended by the Board

				under this section. Such process shall—

										(i)ensure that the certified

				standards for a particular process area achieve regulatory harmonization with

				respect to health plans on a national basis;

										(ii)ensure that the approved

				standards are the minimum necessary, with regard to substance and quantity of

				requirements, to protect health insurance consumers and maintain a competitive

				regulatory environment; and

										(iii)ensure that the

				approved standards will not limit the range of group health plan designs and

				insurance products, such as catastrophic coverage only plans, health savings

				accounts, and health maintenance organizations, that might otherwise be

				available to consumers.

										(3)Effective

				dateThe standards certified by the Secretary under paragraph (2)

				shall be effective on the date that is 18 months after the date on which the

				Secretary certifies the harmonized standards.

								(e)TerminationThe

				Board shall terminate and be dissolved after making the recommendations to the

				Secretary pursuant to subsection (d)(1).

							(f)Ongoing

				reviewNot earlier than 3 years after the termination of the

				Board under subsection (e), and not earlier than every 3 years thereafter, the

				Secretary, in consultation with the National Association of Insurance

				Commissioners and the entities and constituencies represented on the Board and

				the Advisory Panel, shall prepare and submit to the appropriate committees of

				Congress a report that assesses the effect of the harmonized standards on

				access, cost, and health insurance market functioning. The Secretary may, based

				on such report and applying the process established for certification under

				subsection (d)(2)(B), in consultation with the National Association of

				Insurance Commissioners and the entities and constituencies represented on the

				Board and the Advisory Panel, update the harmonized standards through notice

				and comment rulemaking.

							(g)Publication

								(1)ListingThe

				Secretary shall maintain an up to date listing of all harmonized standards

				certified under this section on the Internet website of the Department of

				Health and Human Services.

								(2)Sample contract

				languageThe Secretary shall publish on the Internet website of

				the Department of Health and Human Services sample contract language that

				incorporates the harmonized standards certified under this section, which may

				be used by insurers seeking to qualify as an eligible insurer. The types of

				harmonized standards that shall be included in sample contract language are the

				standards that are relevant to the contractual bargain between the insurer and

				insured.

								(h)State adoption and

				enforcementNot later than 18 months after the certification by

				the Secretary of harmonized standards under this section, the States may adopt

				such harmonized standards (and become an adopting State) and, in which case,

				shall enforce the harmonized standards pursuant to State law.

							2933.Application and

				preemption

							(a)Superceding of state

				law

								(1)In

				generalThe harmonized standards certified under this subtitle

				shall supersede any and all State laws of a non-adopting State insofar as such

				State laws relate to the areas of harmonized standards as applied to an

				eligible insurer, or health insurance coverage issued by a eligible insurer,

				including with respect to coverage issued to a small business health plan, in a

				nonadopting State.

								(2)Nonadopting

				statesThis subtitle shall supersede any and all State laws of a

				nonadopting State (whether enacted prior to or after the date of enactment of

				this title) insofar as they may—

									(A)prohibit an eligible

				insurer from offering, marketing, or implementing health insurance coverage

				consistent with the harmonized standards; or

									(B)have the effect of

				retaliating against or otherwise punishing in any respect an eligible insurer

				for offering, marketing, or implementing health insurance coverage consistent

				with the harmonized standards under this subtitle.

									(b)Savings clause and

				construction

								(1)Nonapplication to

				adopting statesSubsection (a) shall not apply with respect to

				adopting States.

								(2)Nonapplication to

				certain insurersSubsection (a) shall not apply with respect to

				insurers that do not qualify as eligible insurers who offer health insurance

				coverage in a nonadopting State.

								(3)Nonapplication where

				obtaining relief under state lawSubsection (a)(1) shall not

				supercede any State law of a nonadopting State to the extent necessary to

				permit individuals or the insurance department of the State (or other State

				agency) to obtain relief under State law to require an eligible insurer to

				comply with the harmonized standards under this subtitle.

								(4)No effect on

				preemptionIn no case shall this subtitle be construed to limit

				or affect in any manner the preemptive scope of sections 502 and 514 of the

				Employee Retirement Income Security Act of 1974. In no case shall this subtitle

				be construed to create any cause of action under Federal or State law or

				enlarge or affect any remedy available under the Employee Retirement Income

				Security Act of 1974.

								(c)Effective

				dateThis section shall apply beginning on the date that is 18

				months after the date on harmonized standards are certified by the Secretary

				under this subtitle.

							2934.Civil actions and

				jurisdiction

							(a)In

				generalThe district courts of the United States shall have

				exclusive jurisdiction over civil actions involving the interpretation of this

				subtitle.

							(b)ActionsAn

				eligible insurer may bring an action in the district courts of the United

				States for injunctive or other equitable relief against any officials or agents

				of a nonadopting State in connection with any conduct or action, or proposed

				conduct or action, by such officials or agents which violates, or which would

				if undertaken violate, section 2933.

							(c)Direct filing in Court

				of AppealsAt the election of the eligible insurer, an action may

				be brought under subsection (b) directly in the United States Court of Appeals

				for the circuit in which the nonadopting State is located by the filing of a

				petition for review in such Court.

							(d)Expedited

				review

								(1)District

				courtIn the case of an action brought in a district court of the

				United States under subsection (b), such court shall complete such action,

				including the issuance of a judgment, prior to the end of the 120-day period

				beginning on the date on which such action is filed, unless all parties to such

				proceeding agree to an extension of such period.

								(2)Court of

				AppealsIn the case of an action brought directly in a United

				States Court of Appeal under subsection (c), or in the case of an appeal of an

				action brought in a district court under subsection (b), such Court shall

				complete all action on the petition, including the issuance of a judgment,

				prior to the end of the 60-day period beginning on the date on which such

				petition is filed with the Court, unless all parties to such proceeding agree

				to an extension of such period.

								(e)Standard of

				reviewA court in an action filed under this section, shall

				render a judgment based on a review of the merits of all questions presented in

				such action and shall not defer to any conduct or action, or proposed conduct

				or action, of a nonadopting State.

							2935.Authorization of

				appropriations; rule of construction

							(a)Authorization of

				appropriationsThere are

				authorized to be appropriated such sums as may be necessary to carry out this

				subtitle.

							(b)Health savings

				accountsNothing in this

				subtitle shall be construed to inhibit the development of health savings

				accounts pursuant to section 223 of the Internal Revenue Code of

				1986.

							.

		April 27, 2006

		Reported with an amendment