Home > 106th Congressional Bills > H.R. 660 (rfs) For the private relief of Ruth Hairston by waiver of a filing deadline for appeal from a ruling relating to her application for a survivor annuity. [Referred in Senate] ...H.R. 660 (rfs) For the private relief of Ruth Hairston by waiver of a filing deadline for appeal from a ruling relating to her application for a survivor annuity. [Referred in Senate] ...
108th CONGRESS
1st Session
H. R. 660
To amend title I of the Employee Retirement Income Security Act of 1974
to improve access and choice for entrepreneurs with small businesses
with respect to medical care for their employees.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 11, 2003
Mr. Fletcher (for himself, Mr. Sam Johnson of Texas, Mr. Dooley of
California, Ms. Velazquez, Mr. Acevedo-Vila, Mr. Aderholt, Mr. Akin,
Mr. Baca, Mr. Ballenger, Mr. Beauprez, Mrs. Biggert, Mr. Boehner, Mr.
Burgess, Mr. Calvert, Mrs. Capito, Mr. Carter, Mrs. Christensen, Mr.
Collins, Mr. Costello, Mr. Cramer, Mr. Cunningham, Mrs. Jo Ann Davis of
Virginia, Mr. DeMint, Mr. Mario Diaz-Balart of Florida, Mr. Duncan, Mr.
Everett, Mr. Franks of Arizona, Mr. Fossella, Mr. Gillmor, Mr.
Goodlatte, Mr. Gonzalez, Mr. Graves, Ms. Granger, Mr. Greenwood, Mr.
Grijalva, Ms. Hart, Mr. Hastert, Mr. Herger, Mr. Houghton, Mr. Isakson,
Mr. Issa, Mr. Jenkins, Mr. Jones of North Carolina, Mr. Keller, Mrs.
Kelly, Mr. Kennedy of Minnesota, Mr. Kolbe, Mr. Lucas of Kentucky, Mr.
Manzullo, Mr. McHugh, Mr. McInnis, Mr. McKeon, Mrs. Musgrave, Mrs.
Northup, Mr. Peterson of Pennsylvania, Mr. Petri, Mr. Platts, Mr.
Radanovich, Mr. Rehberg, Mr. Ryan of Wisconsin, Mr. Schrock, Mr.
Sensenbrenner, Mr. Sessions, Mr. Shays, Mr. Shimkus, Mr. Simmons, Mr.
Smith of Texas, Mr. Souder, Mr. Tancredo, Mr. Tiahrt, Mr. Toomey, Mr.
Upton, Mr. Weldon of Florida, Mr. Whitfield, Mr. Wilson of South
Carolina, and Mr. Wolf) 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 improve access and choice for entrepreneurs with small businesses
with respect to medical care for their employees.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small Business
Health Fairness Act of 2003''.
(b) Table of Contents.--The table of contents is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Rules governing association health plans.
``Part 8--Rules Governing Association Health Plans
``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of
trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents,
contribution rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency
for plans providing health benefits in
addition to health insurance coverage.
``Sec. 807. Requirements for application and related
requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent
association health plans providing health
benefits in addition to health insurance
coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.
Sec. 3. Clarification of treatment of single employer arrangements.
Sec. 4. Clarification of treatment of certain collectively bargained
arrangements.
Sec. 5. Enforcement provisions relating to association health plans.
Sec. 6. Cooperation between Federal and State authorities.
Sec. 7. Effective date and transitional and other rules.
SEC. 2. RULES GOVERNING ASSOCIATION HEALTH PLANS.
(a) In General.--Subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended by adding after part 7 the
following new part:
``Part 8--Rules Governing Association Health Plans
``SEC. 801. ASSOCIATION HEALTH PLANS.
``(a) In General.--For purposes of this part, the term `association
health plan' means a group health plan whose sponsor is (or is deemed
under this part to be) described in subsection (b).
``(b) Sponsorship.--The sponsor of a group health plan is described
in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its 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.
``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
``(a) In General.--The applicable authority shall prescribe by
regulation, through negotiated rulemaking, a procedure under which,
subject to subsection (b), the applicable authority shall certify
association health plans which apply for certification as meeting the
requirements of this part.
``(b) Standards.--Under the procedure prescribed pursuant to
subsection (a), in the case of an association health plan that provides
at least one benefit option which does not consist of health insurance
coverage, the applicable authority shall certify such plan as meeting
the requirements of this part only if the applicable authority is
satisfied that the applicable requirements of this part are met (or,
upon the date on which the plan is to commence operations, will be met)
with respect to the plan.
``(c) Requirements Applicable to Certified Plans.--An association
health plan with respect to which certification under this part is in
effect shall meet the 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).
``(d) Requirements for Continued Certification.--The applicable
authority may provide by regulation, through negotiated rulemaking, for
continued certification of association health plans under this part.
``(e) Class Certification for Fully Insured Plans.--The applicable
authority shall establish a class certification procedure for
association health plans under which all benefits consist of health
insurance coverage. Under such procedure, the applicable authority
shall provide for the granting of certification under this part to the
plans in each class of such association health plans upon appropriate
filing under such procedure in connection with plans in such class and
payment of the prescribed fee under section 807(a).
``(f) Certification of Self-Insured Association Health Plans.--An
association health plan which offers one or more benefit options which
do not consist of health insurance coverage may be certified under this
part only if such plan consists of any of the following:
``(1) a plan which offered such coverage on the date of the
enactment of the Small Business Health Fairness Act of 2003,
``(2) a plan under which the sponsor does not restrict
membership to one or more trades and businesses or industries
and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or
``(3) a plan whose eligible participating employers
represent one or more trades or businesses, or one or more
industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and
cosmetology; certified public accounting practices; child care;
construction; dance, theatrical and orchestra productions;
disinfecting and pest control; financial services; fishing;
foodservice establishments; hospitals; labor organizations;
logging; manufacturing (metals); mining; medical and dental
practices; medical laboratories; professional consulting
services; sanitary services; transportation (local and
freight); warehousing; wholesaling/distributing; or any other
trade or business or industry which has been indicated as
having average or above-average risk or health claims
experience by reason of State rate filings, denials of
coverage, proposed premium rate levels, or other means
demonstrated by such plan in accordance with regulations which
the Secretary shall prescribe through negotiated rulemaking.
``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met with
respect to an association health plan if the 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 Trustees.--The requirements of this subsection are
met with respect to an association health plan if the following
requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees which has complete
fiscal control over the plan and which is responsible for all
operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements of
this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) In general.--Except as provided in
subparagraphs (B) and (C), 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.
``(B) Limitation.--
``(i) General rule.--Except as provided in
clauses (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 sponsor.--
Officers 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
care.--In the case of a sponsor which is an
association whose membership consists primarily
of providers of medical care, clause (i) shall
not apply in the case of any service provider
described in subparagraph (A) who is a provider
of medical care under the plan.
``(C) Certain plans excluded.--Subparagraph (A)
shall not apply to an association health plan which is
in existence on the date of the enactment of the Small
Business Health Fairness Act of 2003.
``(D) Sole authority.--The board has sole authority
under the plan to approve applications for
participation in the plan and to contract with a
service provider to administer the day-to-day affairs
of the plan.
``(c) Treatment of Franchise Networks.--In the case of a group
health plan which is established and maintained by a franchiser for a
franchise network consisting of its franchisees--
``(1) the requirements of subsection (a) and section
801(a)(1) 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, through negotiated rulemaking, define
for purposes of this subsection the terms `franchiser', `franchise
network', and `franchisee'.
``(d) Certain Collectively Bargained Plans.--
``(1) In general.--In the case of a group health plan
described in paragraph (2)--
``(A) the requirements of subsection (a) and
section 801(a)(1) shall be deemed met;
``(B) the joint board of trustees shall be deemed a
board of trustees with respect to which the
requirements of subsection (b) are met; and
``(C) the requirements of section 804 shall be
deemed met.
``(2) Requirements.--A group health plan is described in
this paragraph if--
``(A) the plan is a multiemployer plan; or
``(B) the plan is in existence on April 1, 2003,
and would be described in section 3(40)(A)(i) but
solely for the failure to meet the requirements of
section 3(40)(C)(ii).
``(3) Construction.--A group health plan described in
paragraph (2) shall only be treated as an association health
plan under this part if the sponsor of the plan applies for,
and obtains, certification of the plan as an association health
plan under this part.
``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements of this
subsection are met with respect to an association health plan if, under
the terms of the plan--
``(1) each participating employer must be--
``(A) a member of the sponsor,
``(B) the sponsor, or
``(C) an affiliated member of the sponsor with
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