H.R. 1323 (ih) To amend the Internal Revenue Code of 1986 to disallow deductions for advertising expenses for tobacco products. ...

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108th CONGRESS
  1st Session
                                H. R. 1322

To amend title I of the Employee Retirement Income Security Act of 1974 
      to provide emergency protection for retiree health benefits.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 18, 2003

 Mr. Tierney (for himself, Mr. Brown of Ohio, Mr. Lynch, Mr. Oberstar, 
 Ms. Woolsey, Mr. Frank of Massachusetts, Mr. Sanders, Ms. Norton, Mr. 
  Hinchey, Mr. Clyburn, Mr. Kildee, Mr. Kleczka, Mr. Abercrombie, Mr. 
  McNulty, Mr. Bishop of New York, Ms. Lee, Mr. Kucinich, Ms. Loretta 
Sanchez of California, Mr. George Miller of California, Ms. Jackson-Lee 
of Texas, Mr. Kennedy of Rhode Island, and Mr. Serrano) introduced the 
 following bill; which was referred to the Committee on Education and 
                             the Workforce

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Employee Retirement Income Security Act of 1974 
      to provide emergency protection for retiree health benefits.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Emergency Retiree Health Benefits 
Protection Act of 2003''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) Retired participants of group health plans regulated by 
        the Employee Retirement Income Security Act of 1974 (ERISA) 
        have been severely harmed by the virtually unchecked practices 
        of sponsors of such plans involving the post-retirement 
        cancellation or reduction of health benefits which retirees 
        counted on receiving for their lifetimes.
            (2) Such widespread post-retirement reductions in retiree 
        health benefits has led to a crisis in retiree health care in 
        which retirees--
                    (A) have been unable to substitute individual 
                coverage for the group coverage they lost, or, in order 
                to obtain individual coverage, have jeopardized their 
                economic security in retirement;
                    (B) because of preexisting medical conditions 
                cannot obtain substitute coverage that they can afford 
                without depleting their life savings or have been 
                unable to obtain adequate medical care or medical care 
                they had relied on to deal with serious illness;
                    (C) have sustained catastrophic illnesses or 
                injuries or otherwise experienced a marked 
                deterioration in their medical conditions or health as 
                a result of post-retirement changes to their medical 
                benefits;
                    (D) have been transferred indiscriminately into 
                improperly or inadequately managed health maintenance 
                organizations or other managed care entities, resulting 
                in the worsening rather than improvement of prior 
                medical conditions; and
                    (E) in many instances, have failed to obtain 
                adequate relief in the courts due to highly restrictive 
                judicial interpretations which are inconsistent with 
                ERISA's underlying protective purposes.
            (3) The crisis in retirees healthcare generated by the plan 
        sponsor practice of post-retirement cancellations or reductions 
        of previously promised retiree health benefits has led to a 
        widespread loss of confidence in the integrity of ERISA-
        regulated group health plans and the ability of ERISA itself to 
        adequately protect retiree health benefits.
            (4) A strong and dependable private sector retiree health 
        system is necessary to the essential health of our Nation's 
        senior citizens.
    (b) Purposes.--The purposes of this Act are to ensure that the 
reasonable health benefit expectations of retirees from ERISA-regulated 
group health plans are fulfilled, to minimize the incidence of 
prolonged legal disputes arising out of the post-retirement 
cancellation or reduction of retiree health benefits from such plans, 
and to prevent further adverse effects on retiree health arising from 
such post-retirement changes. To this end, the purposes of this Act 
also include the following:
            (1) to safeguard retired participants of group health plans 
        subject to the Employee Retirement Income Security Act of 1974 
        (29 U.S.C. 1001 et seq.) from loss or reduction of their health 
        benefits from such plans by barring plan sponsors from 
        canceling or reducing such benefits after the dates such 
        participants retire and when they no longer are able to absorb 
        such losses or reductions without experiencing adverse effects 
        on their health or finances;
            (2) to establish an enforceable obligation on the part of 
        sponsors of such group health plans to restore health benefits 
        previously taken away from retired participants of such plans 
        to the extent such benefits were canceled or altered after the 
        dates such participants retired and the plan sponsor would not 
        sustain substantial business hardship by restoring such 
        benefits; and
            (3) to establish an Emergency Retiree Health Loan Guarantee 
        Program to assist sponsors of group health plans subject to the 
        obligation to restore retiree health benefits under this Act to 
        obtain credit to assist them in discharging such obligations by 
        providing retiree health loan guarantees that would encourage 
        the availability of such credit.

SEC. 3. AMENDMENT OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 TO 
              PROVIDE RETIREE HEALTH BENEFIT PROTECTIONS IN GROUP 
              HEALTH PLANS.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding at the end a new part 
8 as follows:

         ``PART 8--EMERGENCY RETIREE HEALTH BENEFIT PROTECTIONS

``SEC. 801. PROHIBITION AGAINST POST-RETIREMENT REDUCTIONS OF RETIREE 
              HEALTH BENEFITS BY GROUP HEALTH PLANS.

    ``(a) In General.--Notwithstanding that a group health plan 
described in subsection (b) may contain a provision reserving the 
general power to amend or terminate the plan or a provision 
specifically authorizing the plan to make post-retirement reductions in 
retiree health benefits, it shall be prohibited for any group health 
plan, whether through amendment or otherwise, to reduce the benefits 
provided to a retired participant or his or her beneficiary under the 
terms of the plan if such reduction of benefits occurs after the date 
the participant retired for purposes of the plan and reduces benefits 
that were provided to the participant, or his or her beneficiary, as of 
the date the participant retired. Any group health plan provision which 
purports to authorize the reduction of benefits in a manner 
inconsistent with the foregoing prohibition shall be void as against 
public policy.
    ``(b) Group Health Plan.--The term `group health plan' shall have 
the same meaning as in section 607(1).
    ``(c) Prohibited Reduction of Benefits.--As used in this section, 
references to a prohibited reduction of benefits means any group health 
plan amendment or other action which has the effect of--
            ``(1) canceling, decreasing or limiting the amount, type, 
        level, or form of any benefit or option provided prior to the 
        amendment or action;
            ``(2) imposing or increasing the out-of-pocket costs a 
        retired participant, or his or her beneficiary, must pay in 
        order to keep or obtain any benefits that were provided to the 
        participant or beneficiary prior to the amendment or action; or
            ``(3) modifying the manner by which medical services are 
        delivered under the plan so that after the amendment or action 
        a retired participant, or his or her beneficiary, has less 
        ready access to the delivery of any such medical services than 
        the participant or beneficiary had prior to the amendment or 
        action.
    ``(d) Treatment of Plan Termination.--
            ``(1) In general.--Subject to paragraph (2), a termination 
        of a group health plan shall be treated as violating the 
        prohibition contained in this section if, after the 
        termination, the plan sponsor of the terminated plan fails to 
        continue to provide to the participants who retired prior to 
        the termination and to their beneficiaries the same retiree 
        health benefits that were provided prior to the termination.
            ``(2) Waiver.--Paragraph (1) shall not apply in the case of 
        the termination of a group health plan if the Secretary issues 
        a waiver under this paragraph in connection with such 
        termination. The Secretary shall issue such a waiver if and 
        only if the plan sponsor demonstrates to the satisfaction of 
        the Secretary, in accordance with regulations prescribed by the 
        Secretary, that such plan sponsor will be unable to continue in 
        business unless such a waiver is issued.
    ``(e) Consent or Authorization by Participant.--A reduction of 
benefits shall not be treated as prohibited by this section if such 
reduction is consented to in writing by any retired participant or is 
authorized with respect to the retired participant under the terms of 
one or more agreements which the Secretary finds to be collective 
bargaining agreements between one or more employee representatives who 
were representing such participant at the time of the entry into such 
agreement and one or more employers.

``SEC. 802. ADOPTION BY GROUP HEALTH PLANS OF PROVISION BARRING POST-
              RETIREMENT REDUCTIONS IN RETIREE HEALTH BENEFITS.

    ``Every group health plan shall contain a provision which expressly 
bars the plan, or any fiduciary of the plan, from reducing the benefits 
provided under the plan to a retired participant, or his or her 
beneficiary, if such reduction affects the benefits provided to the 
participant or beneficiary as of the date the participant retired for 
purposes of the plan and such reduction occurs after the participant's 
retirement.

``SEC. 803. RESTORATION BY GROUP HEALTH PLANS OF BENEFITS REDUCED AFTER 
              RETIREMENT.

    ``(a) In General.--The plan sponsor of each group health plan shall 
provide, in accordance with this section, the option of benefit 
restoration to each retired participant that meets the following 
requirements:
            ``(1) The retired participant is entitled to benefit 
        coverage under the plan as of the date of enactment of the 
        Emergency Retiree Health Benefits Protection Act of 2003.
            ``(2) The amount, type, level, or form of any benefits or 
        option provided to the retired participant under the plan as of 
        the date the participant retired was reduced after the 
        participant's date of retirement. For purposes of the preceding 
        sentence, the term `reduced' has the same meaning as in section 
        801(c).
            ``(3) The retired participant has elected to restore 
        benefits under the plan within the restoration period 
        prescribed by subsection (c) and in accordance with such 
        procedures established by the plan pursuant to regulations of 
        the Secretary.
    ``(b) Exception for Certain Plans.--In accordance with regulations 
prescribed by the Secretary, subsection (a) shall not apply to any 
group health plan with less than 100 participants both on and after the 
date of enactment of the Emergency Retiree Health Benefits Protection 
Act of 2003.
    ``(c) Restoration Period.--The term `restoration period' means the 
period which--
            ``(1) begins not later than 1 year after the date of 
        enactment of the Emergency Retiree Health Benefits Protection 
        Act of 2003;
            ``(2) ends before 2 years from such date, unless extended 
        by the Secretary pursuant to section 804(g); and
            ``(3) is of no less than 60 days duration.
    ``(d) Notice Requirements Concerning Restoration of Benefits.--In 
accordance with regulations prescribed by the Secretary, each group 
health plan subject to the requirements of subsection (a) shall, within 
no less than 30 days prior to the commencement of the plan's 
restoration of benefits period, provide written notice to each retired 
participant of the plan who meets the requirements of subsection (a) of 
the following:
            ``(1) A description of all benefits the retired participant 
        is entitled to have restored.
            ``(2) The administrative procedure established under the 
        plan which may be used to submit a claim for the restoration of 
        any benefits.
            ``(3) An itemization of the value of each benefit the 
        retired participant is entitled to have restored, as determined 
        in accordance with regulations of the Secretary, and the total 
        value of all such benefits.
            ``(4) A description of any post-retirement increases in 
        retiree health benefits the retired participant received which 
        the plan sponsor could rescind if the retired participant 
        asserts a claim for the restoration of benefits.
            ``(5) An itemization of the value of each retiree health 
        benefit the plan sponsor could rescind, as determined in 
        accordance with regulations of the Secretary, and the total 
        value of all such benefits.
            ``(6) If the plan sponsor has filed an application for a 
        substantial business hardship exemption under section 804, the 
date such application was filed, the date notice of such application 
was given to retired participants entitled to submit a claim for the 
restoration of benefits, and the status of such application as of the 
date of the notice sent pursuant to this subsection.
            ``(7) Such other information in such form and detail as may 
        be prescribed by the Secretary to carry out the purposes of 
        this part.
    ``(e) Deadline for Restoration of Benefits.--Regardless of any 
extension that may be granted by the Secretary pursuant to section 
804(g), all benefits required to be restored under this section shall 
be restored within no more than 3 years from the date of enactment of 
the Emergency Retiree Health Benefits Protection Act of 2003, or the 
date the plan sponsor files an application for an exemption under 
section 804, whichever comes last.

``SEC. 804. EXEMPTION FROM RESTORATION OF BENEFITS REQUIREMENTS.

    ``(a) Application for Exemption.--Any plan sponsor of a group 
health plan that would sustain substantial business hardship if 
required to fulfill, in whole or in part, the restoration of benefits 
requirements contained in section 803, may file an application for an 
exemption with the Secretary from any or all of such requirements.
    ``(b) Authority for Waiver or Variance.--In response to an 
application filed by a plan sponsor pursuant to subsection (a), the 
Secretary may waive or vary the requirements of section 803 with 
respect to any or all of such requirements, including postponing for 
reasonable periods of time the obligation of the plan sponsor to 
restore reduced benefits, if the Secretary finds that compliance by the 
plan sponsor with the requirements of section 803 would--
            ``(1) be adverse to the interests of plan participants in 
        the aggregate;
            ``(2) not be administratively feasible; and
            ``(3) cause substantial business hardship to the plan 
        sponsor.
    ``(c) Factors Taken Into Account.--For purposes of this section, 
the factors to be taken into account in determining substantial 
business hardship shall include (but shall not be limited to) whether--

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