TOC: The Health Insurance Portability and Accountability Act of 1996--SHORT TITLE AND TABLE OF CONTENTS

Health Insurance Portability and Accountability Act of 1996

TABLE OF CONTENTS

TITLE I

TITLE II

TITLE III

TITLE IV

TITLE V

H.R.3103

TITLE I--HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY

Subtitle A--Group Market Rules

Part 1--Portability, Access, and Renewability Requirements

SEC. 101. THROUGH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

(a) IN GENERAL- Subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new part:

`Part 7--Group Health Plan Portability, Access, and Renewability Requirements

`SEC. 701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING CONDITION EXCLUSIONS.

`(a) LIMITATION ON PREEXISTING CONDITION EXCLUSION PERIOD; CREDITING FOR PERIODS OF PREVIOUS COVERAGE- Subject to subsection (d), a group health plan, and a health insurance issuer offering group health insurance coverage, may, with respect to a participant or beneficiary, impose a preexisting condition exclusion only if--

`(1) such exclusion relates to a condition (whether physical or mental), regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the 6-month period ending on the enrollment date;

`(2) such exclusion extends for a period of not more than 12 months (or 18 months in the case of a late enrollee) after the enrollment date; and

`(3) the period of any such preexisting condition exclusion is reduced by the aggregate of the periods of creditable coverage (if any, as defined in subsection (c)(1)) applicable to the participant or beneficiary as of the enrollment date.

`(b) DEFINITIONS- For purposes of this part--

`(1) PREEXISTING CONDITION EXCLUSION-

`(A) IN GENERAL- The term `preexisting condition exclusion' means, with respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date.

`(B) TREATMENT OF GENETIC INFORMATION- Genetic information shall not be treated as a condition described in subsection (a)(1) in the absence of a diagnosis of the condition related to such information.

`(2) ENROLLMENT DATE- The term `enrollment date' means, with respect to an individual covered under a group health plan or health insurance coverage, the date of enrollment of the individual in the plan or coverage or, if earlier, the first day of the waiting period for such enrollment.

`(3) LATE ENROLLEE- The term `late enrollee' means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during--

`(A) the first period in which the individual is eligible to enroll under the plan, or

`(B) a special enrollment period under subsection (f).

`(4) WAITING PERIOD- The term `waiting period' means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the plan.

`(c) RULES RELATING TO CREDITING PREVIOUS COVERAGE-

`(1) CREDITABLE COVERAGE DEFINED- For purposes of this part, the term `creditable coverage' means, with respect to an individual, coverage of the individual under any of the following:

`(A) A group health plan.

`(B) Health insurance coverage.

`(C) Part A or part B of title XVIII of the Social Security Act.

`(D) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928.

`(E) Chapter 55 of title 10, United States Code.

`(F) A medical care program of the Indian Health Service or of a tribal organization.

`(G) A State health benefits risk pool.

`(H) A health plan offered under chapter 89 of title 5, United States Code.

`(I) A public health plan (as defined in regulations).

`(J) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).

Such term does not include coverage consisting solely of coverage of excepted benefits (as defined in section 706(c)).

`(2) NOT COUNTING PERIODS BEFORE SIGNIFICANT BREAKS IN COVERAGE-

`(A) IN GENERAL- A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group health plan, if, after such period and before the enrollment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage.

`(B) WAITING PERIOD NOT TREATED AS A BREAK IN COVERAGE- For purposes of subparagraph (A) and subsection (d)(4), any period that an individual is in a waiting period for any coverage under a group health plan (or for group health insurance coverage) or is in an affiliation period (as defined in subsection (g)(2)) shall not be taken into account in determining the continuous period under subparagraph (A).

`(3) METHOD OF CREDITING COVERAGE-

`(A) STANDARD METHOD- Except as otherwise provided under subparagraph (B), for purposes of applying subsection (a)(3), a group health plan, and a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period.

`(B) ELECTION OF ALTERNATIVE METHOD- A group health plan, or a health insurance issuer offering group health insurance coverage, may elect to apply subsection (a)(3) based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subparagraph (A). Such election shall be made on a uniform basis for all participants and beneficiaries. Under such election a group health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category.

`(C) PLAN NOTICE- In the case of an election with respect to a group health plan under subparagraph (B) (whether or not health insurance coverage is provided in connection with such plan), the plan shall--

`(i) prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made such election, and

`(ii) include in such statements a description of the effect of this election.

`(4) ESTABLISHMENT OF PERIOD- Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in subsection (e) or in such other manner as may be specified in regulations.

`(d) EXCEPTIONS-

`(1) EXCLUSION NOT APPLICABLE TO CERTAIN NEWBORNS- Subject to paragraph (4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the 30-day period beginning with the date of birth, is covered under creditable coverage.

`(2) EXCLUSION NOT APPLICABLE TO CERTAIN ADOPTED CHILDREN- Subject to paragraph (4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. The previous sentence shall not apply to coverage before the date of such adoption or placement for adoption.

`(3) EXCLUSION NOT APPLICABLE TO PREGNANCY- A group health plan, and health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition.

`(4) LOSS IF BREAK IN COVERAGE- Paragraphs (1) and (2) shall no longer apply to an individual after the end of the first 63-day period during all of which the individual was not covered under any creditable coverage.

`(e) CERTIFICATIONS AND DISCLOSURE OF COVERAGE-

`(1) REQUIREMENT FOR CERTIFICATION OF PERIOD OF CREDITABLE COVERAGE-

`(A) IN GENERAL- A group health plan, and a health insurance issuer offering group health insurance

coverage, shall provide the certification described in subparagraph (B)--

`(i) at the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision,

`(ii) in the case of an individual becoming covered under such a provision, at the time the individual ceases to be covered under such provision, and

`(iii) on the request on behalf of an individual made not later than 24 months after the date of cessation of the coverage described in clause (i) or (ii), whichever is later.

The certification under clause (i) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.

`(B) CERTIFICATION- The certification described in this subparagraph is a written certification of--

`(i) the period of creditable coverage of the individual under such plan and the coverage (if any) under such COBRA continuation provision, and

`(ii) the waiting period (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage under such plan.

`(C) ISSUER COMPLIANCE- To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this paragraph if the health insurance issuer offering the coverage provides for such certification in accordance with this paragraph.

`(2) DISCLOSURE OF INFORMATION ON PREVIOUS BENEFITS- In the case of an election described in subsection (c)(3)(B) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under paragraph (1)--

`(A) upon request of such plan or issuer, the entity which issued the certification provided by the individual shall promptly disclose to such requesting plan or issuer information on coverage of classes and categories of health benefits available under such entity's plan or coverage, and

`(B) such entity may charge the requesting plan or issuer for the reasonable cost of disclosing such information.

`(3) REGULATIONS- The Secretary shall establish rules to prevent an entity's failure to provide information under paragraph (1) or (2) with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage.

`(f) SPECIAL ENROLLMENT PERIODS-

`(1) INDIVIDUALS LOSING OTHER COVERAGE- A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if each of the following conditions is met:

`(A) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent.

`(B) The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer (if applicable) required such a statement at such time and provided the employee with notice of such requirement (and the consequences of such requirement) at such time.

`(C) The employee's or dependent's coverage described in subparagraph (A)--

`(i) was under a COBRA continuation provision and the coverage under such provision was exhausted; or

`(ii) was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment) or employer contributions toward such coverage were terminated.

`(D) Under the terms of the plan, the employee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in subparagraph (C)(i) or termination of coverage or employer contribution described in subparagraph (C)(ii).

`(2) FOR DEPENDENT BENEFICIARIES-

`(A) IN GENERAL- If--

`(i) a group health plan makes coverage available with respect to a dependent of an individual,

`(ii) the individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period), and

`(iii) a person becomes such a dependent of the individual through marriage, birth, or adoption or placement for adoption,

the group health plan shall provide for a dependent special enrollment period described in subparagraph (B) during which the person (or, if not otherwise enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage.

`(B) DEPENDENT SPECIAL ENROLLMENT PERIOD- A dependent special enrollment period under this subparagraph shall be a period of not less than 30 days and shall begin on the later of--

`(i) the date dependent coverage is made available, or

`(ii) the date of the marriage, birth, or adoption or placement for adoption (as the case may be) described in subparagraph (A)(iii).

`(C) NO WAITING PERIOD- If an individual seeks to enroll a dependent during the first 30 days of such a dependent special enrollment period, the coverage of the dependent shall become effective--

`(i) in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received;

`(ii) in the case of a dependent's birth, as of the date of such birth; or

`(iii) in the case of a dependent's adoption or placement for adoption, the date of such adoption or placement for adoption.

`(g) USE OF AFFILIATION PERIOD BY HMOS AS ALTERNATIVE TO PREEXISTING CONDITION EXCLUSION-

`(1) IN GENERAL- In the case of a group health plan that offers medical care through health insurance coverage offered by a health maintenance organization, the plan may provide for an affiliation period with respect to coverage through the organization only if--

`(A) no preexisting condition exclusion is imposed with respect to coverage through the organization,

`(B) the period is applied uniformly without regard to any health status-related factors, and

`(C) such period does not exceed 2 months (or 3 months in the case of a late enrollee).

`(2) AFFILIATION PERIOD-

`(A) DEFINED- For purposes of this part, the term `affiliation period' means a period which, under the terms of the health insurance coverage offered by the health maintenance organization, must expire before the health insurance coverage becomes effective. The organization is not required to provide health care services or benefits during such period and no premium shall be charged to the participant or beneficiary for any coverage during the period.

`(B) BEGINNING- Such period shall begin on the enrollment date.

`(C) RUNS CONCURRENTLY WITH WAITING PERIODS- An affiliation period under a plan shall run concurrently with any waiting period under the plan.

`(3) ALTERNATIVE METHODS- A health maintenance organization described in paragraph (1) may use alternative methods, from those described in such paragraph, to address adverse selection as approved by the State insurance commissioner or official or officials designated by the State to enforce the requirements of part A of title XXVII of the Public Health Service Act for the State involved with respect to such issuer.

`SEC. 702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS AND BENEFICIARIES BASED ON HEALTH STATUS.

`(a) IN ELIGIBILITY TO ENROLL-

`(1) IN GENERAL- Subject to paragraph (2), a group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan based on any of the following health status-related factors in relation to the individual or a dependent of the individual:

`(A) Health status.

`(B) Medical condition (including both physical and mental illnesses).

`(C) Claims experience.

`(D) Receipt of health care.

`(E) Medical history.

`(F) Genetic information.

`(G) Evidence of insurability (including conditions arising out of acts of domestic violence).

`(H) Disability.

`(2) NO APPLICATION TO BENEFITS OR EXCLUSIONS- To the extent consistent with section 701, paragraph (1) shall not be construed--

`(A) to require a group health plan, or group health insurance coverage, to provide particular benefits other than those provided under the terms of such plan or coverage, or

`(B) to prevent such a plan or coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage.

`(3) CONSTRUCTION- For purposes of paragraph (1), rules for eligibility to enroll under a plan include rules defining any applicable waiting periods for such enrollment.

`(b) IN PREMIUM CONTRIBUTIONS-

`(1) IN GENERAL- A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, may not require any individual (as a condition of enrollment or continued enrollment under the plan) to pay a premium or contribution which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status-related factor in relation to the individual or to an individual enrolled under the plan as a dependent of the individual.

`(2) CONSTRUCTION- Nothing in paragraph (1) shall be construed--

`(A) to restrict the amount that an employer may be charged for coverage under a group health plan; or

`(B) to prevent a group health plan, and a health insurance issuer offering group health insurance coverage, from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.

`SEC. 703. GUARANTEED RENEWABILITY IN MULTIEMPLOYER PLANS AND MULTIPLE EMPLOYER WELFARE ARRANGEMENTS.

`A group health plan which is a multiemployer plan or which is a multiple employer welfare arrangement may not deny an employer whose employees are covered under such a plan continued access to the same or different coverage under the terms of such a plan, other than--

`(1) for nonpayment of contributions;

`(2) for fraud or other intentional misrepresentation of material fact by the employer;

`(3) for noncompliance with material plan provisions;

`(4) because the plan is ceasing to offer any coverage in a geographic area;

`(5) in the case of a plan that offers benefits through a network plan, there is no longer any individual enrolled through the employer who lives, resides, or works in the service area of the network plan and the plan applies this paragraph uniformly without regard to the claims experience of employers or any health status-related factor in relation to such individuals or their dependents; and

`(6) for failure to meet the terms of an applicable collective bargaining agreement, to renew a collective bargaining or other agreement requiring or authorizing contributions to the plan, or to employ employees covered by such an agreement.

`SEC. 704. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

`(a) CONTINUED APPLICABILITY OF STATE LAW WITH RESPECT TO HEALTH INSURANCE ISSUERS-

`(1) IN GENERAL- Subject to paragraph (2) and except as provided in subsection (b), this part shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers in connection with group health insurance coverage except to the extent that such standard or requirement prevents the application of a requirement of this part.

`(2) CONTINUED PREEMPTION WITH RESPECT TO GROUP HEALTH PLANS- Nothing in this part shall be construed to affect or modify the provisions of section 514 with respect to group health plans.

`(b) SPECIAL RULES IN CASE OF PORTABILITY REQUIREMENTS-

`(1) IN GENERAL- Subject to paragraph (2), the provisions of this part relating to health insurance coverage offered by a health insurance issuer supersede any provision of State law which establishes, implements, or continues in effect a standard or requirement applicable to imposition of a preexisting condition exclusion specifically governed by section 701 which differs from the standards or requirements specified in such section.

`(2) EXCEPTIONS- Only in relation to health insurance coverage offered by a health insurance issuer, the provisions of this part do not supersede any provision of State law to the extent that such provision--

`(A) substitutes for the reference to `6-month period' in section 701(a)(1) a reference to any shorter period of time;

`(B) substitutes for the reference to `12 months' and `18 months' in section 701(a)(2) a reference to any shorter period of time;

`(C) substitutes for the references to `63 days' in sections 701 (c)(2)(A) and (d)(4)(A) a reference to any greater number of days;

`(D) substitutes for the reference to `30-day period' in sections 701 (b)(2) and (d)(1) a reference to any greater period;

`(E) prohibits the imposition of any preexisting condition exclusion in cases not described in section 701(d) or expands the exceptions described in such section;

`(F) requires special enrollment periods in addition to those required under section 701(f); or

`(G) reduces the maximum period permitted in an affiliation period under section 701(g)(1)(B).

`(c) RULES OF CONSTRUCTION- Nothing in this part shall be construed as requiring a group health plan or health insurance coverage to provide specific benefits under the terms of such plan or coverage.

`(d) DEFINITIONS- For purposes of this section--

`(1) STATE LAW- The term `State law' includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State. A law of the United States applicable only to the District of Columbia shall be treated as a State law rather than a law of the United States.

`(2) STATE- The term `State' includes a State, the Northern Mariana Islands, any political subdivisions of a State or such Islands, or any agency or instrumentality of either.

`SEC. 705. SPECIAL RULES RELATING TO GROUP HEALTH PLANS.

`(a) GENERAL EXCEPTION FOR CERTAIN SMALL GROUP HEALTH PLANS- The requirements of this part shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) for any plan year if, on the first day of such plan year, such plan has less than 2 participants who are current employees.

`(b) EXCEPTION FOR CERTAIN BENEFITS- The requirements of this part shall not apply to any group health plan (and group health insurance coverage) in relation to its provision of excepted benefits described in section 706(c)(1).

`(c) EXCEPTION FOR CERTAIN BENEFITS IF CERTAIN CONDITIONS MET-

`(1) LIMITED, EXCEPTED BENEFITS- The requirements of this part shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) in relation to its provision of excepted benefits described in section 706(c)(2) if the benefits--

`(A) are provided under a separate policy, certificate, or contract of insurance; or

`(B) are otherwise not an integral part of the plan.

`(2) NONCOORDINATED, EXCEPTED BENEFITS- The requirements of this part shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) in relation to its provision of excepted benefits described in section 706(c)(3) if all of the following conditions are met:

`(A) The benefits are provided under a separate policy, certificate, or contract of insurance.

`(B) There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor.

`(C) Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor.

`(3) SUPPLEMENTAL EXCEPTED BENEFITS- The requirements of this part shall not apply to any group health plan (and group health insurance coverage) in relation to its provision of excepted benefits described in section 706(c)(4) if the benefits are provided under a separate policy, certificate, or contract of insurance.

`(d) TREATMENT OF PARTNERSHIPS- For purposes of this part--

`(1) TREATMENT AS A GROUP HEALTH PLAN- Any plan, fund, or program which would not be (but for this subsection) an employee welfare benefit plan and which is established or maintained by a partnership, to the extent that such plan, fund, or program provides medical care (including items and services paid for as medical care) to present or former partners in the partnership or to their dependents (as defined under the terms of the plan, fund, or program), directly or through insurance, reimbursement, or otherwise, shall be treated (subject to paragraph (2)) as an employee welfare benefit plan which is a group health plan.

`(2) EMPLOYER- In the case of a group health plan, the term `employer' also includes the partnership in relation to any partner.

`(3) PARTICIPANTS OF GROUP HEALTH PLANS- In the case of a group health plan, the term `participant' also includes--

`(A) in connection with a group health plan maintained by a partnership, an individual who is a partner in relation to the partnership, or

`(B) in connection with a group health plan maintained by a self-employed individual (under which one or more employees are participants), the self-employed individual,

if such individual is, or may become, eligible to receive a benefit under the plan or such individual's beneficiaries may be eligible to receive any such benefit.

`SEC. 706. DEFINITIONS.

`(a) GROUP HEALTH PLAN- For purposes of this part--

`(1) IN GENERAL- The term `group health plan' means an employee welfare benefit plan to the extent that the plan provides medical care (as defined in paragraph (2) and including items and services paid for as medical care) to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise.

`(2) MEDICAL CARE- The term `medical care' means amounts paid for--

`(A) the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body,

`(B) amounts paid for transportation primarily for and essential to medical care referred to in subparagraph (A), and

`(C) amounts paid for insurance covering medical care referred to in subparagraphs (A) and (B).

`(b) DEFINITIONS RELATING TO HEALTH INSURANCE- For purposes of this part--

`(1) HEALTH INSURANCE COVERAGE- The term `health insurance coverage' means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurance issuer.

`(2) HEALTH INSURANCE ISSUER- The term `health insurance issuer' means an insurance company, insurance service, or insurance organization (including a health maintenance organization, as defined in paragraph (3)) which is licensed to engage in the business of insurance in a State and which is subject to State law which regulates insurance (within the meaning of section 514(b)(2)). Such term does not include a group health plan.

`(3) HEALTH MAINTENANCE ORGANIZATION- The term `health maintenance organization' means--

`(A) a federally qualified health maintenance organization (as defined in section 1301(a) of the Public Health Service Act (42 U.S.C. 300e(a))),

`(B) an organization recognized under State law as a health maintenance organization, or

`(C) a similar organization regulated under State law for solvency in the same manner and to the same extent as such a health maintenance organization.

`(4) GROUP HEALTH INSURANCE COVERAGE- The term `group health insurance coverage' means, in connection with a group health plan, health insurance coverage offered in connection with such plan.

`(c) EXCEPTED BENEFITS- For purposes of this part, the term `excepted benefits' means benefits under one or more (or any combination thereof) of the following:

`(1) BENEFITS NOT SUBJECT TO REQUIREMENTS-

`(A) Coverage only for accident, or disability income insurance, or any combination thereof.

`(B) Coverage issued as a supplement to liability insurance.

`(C) Liability insurance, including general liability insurance and automobile liability insurance.

`(D) Workers' compensation or similar insurance.

`(E) Automobile medical payment insurance.

`(F) Credit-only insurance.

`(G) Coverage for on-site medical clinics.

`(H) Other similar insurance coverage, specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits.

`(2) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED SEPARATELY-

`(A) Limited scope dental or vision benefits.

`(B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof.

`(C) Such other similar, limited benefits as are specified in regulations.

`(3) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS INDEPENDENT, NONCOORDINATED BENEFITS-

`(A) Coverage only for a specified disease or illness.

`(B) Hospital indemnity or other fixed indemnity insurance.

`(4) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS SEPARATE INSURANCE POLICY- Medicare supplemental health insurance (as defined under section 1882(g)(1) of the Social Security Act), coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, and similar supplemental coverage provided to coverage under a group health plan.

`(d) OTHER DEFINITIONS- For purposes of this part--

`(1) COBRA CONTINUATION PROVISION- The term `COBRA continuation provision' means any of the following:

`(A) Part 6 of this subtitle.

`(B) Section 4980B of the Internal Revenue Code of 1986, other than subsection (f)(1) of such section insofar as it relates to pediatric vaccines.

`(C) Title XXII of the Public Health Service Act.

`(2) HEALTH STATUS-RELATED FACTOR- The term `health status-related factor' means any of the factors described in section 702(a)(1).

`(3) NETWORK PLAN- The term `network plan' means health insurance coverage offered by a health insurance issuer under which the financing and delivery of medical care (including items and services paid for as medical care) are provided, in whole or in part, through a defined set of providers under contract with the issuer.

`(4) PLACED FOR ADOPTION- The term `placement', or being `placed', for adoption, has the meaning given such term in section 609(c)(3)(B).

`SEC. 707. REGULATIONS.

`The Secretary, consistent with section 104 of the Health Care Portability and Accountability Act of 1996, may promulgate such regulations as may be necessary or appropriate to carry out the provisions of this part. The Secretary may promulgate any interim final rules as the Secretary determines are appropriate to carry out this part.'.

(b) ENFORCEMENT WITH RESPECT TO HEALTH INSURANCE ISSUERS- Section 502(b) of such Act (29 U.S.C. 1132(b)) is amended by adding at the end the following new paragraph:

`(3) The Secretary is not authorized to enforce under this part any requirement of part 7 against a health insurance issuer offering health insurance coverage in connection with a group health plan (as defined in section 706(a)(1)). Nothing in this paragraph shall affect the authority of the Secretary to issue regulations to carry out such part.'.

(1) IN GENERAL- Section 104(b)(1) of such Act (29 U.S.C. 1024(b)(1)) is amended in the matter following subpara-graph (B)--

(A) by striking `102(a)(1),' and inserting `102(a)(1) (other than a material reduction in covered services or benefits provided in the case of a group health plan (as defined in section 706(a)(1))),'; and

(B) by adding at the end the following new sentences: `If there is a modification or change described in section 102(a)(1) that is a material reduction in covered services or benefits provided under a group health plan (as defined in section 706(a)(1)), a summary description of such modification or change shall be furnished to participants and beneficiaries not later than 60 days after the date of the adoption of the modification or change. In the alternative, the plan sponsors may provide such description at regular intervals of not more than 90 days. The Secretary shall issue regulations within 180 days after the date of enactment of the Health Insurance Portability and Accountability Act of 1996, providing alternative mechanisms to delivery by mail through which group health plans (as so defined) may notify participants and beneficiaries of material reductions in covered services or benefits.'.

(2) PLAN DESCRIPTION AND SUMMARY- Section 102(b) of such Act (29 U.S.C. 1022(b)) is amended--

(A) by inserting `in the case of a group health plan (as defined in section 706(a)(1)), whether a health insurance issuer (as defined in section 706(b)(2)) is responsible for the financing or administration (including payment of claims) of the plan and (if so) the name and address of such issuer;' after `type of administration of the plan;'; and

(B) by inserting `including the office at the Department of Labor through which participants and beneficiaries may seek assistance or information regarding their rights under this Act and the Health Insurance Portability and Accountability Act of 1996 with respect to health benefits that are offered through a group health plan (as defined in section 706(a)(1))' after `benefits under the plan'.

(d) TREATMENT OF HEALTH INSURANCE ISSUERS OFFERING HEALTH INSURANCE COVERAGE TO NONCOVERED PLANS- Section 4(b) of such Act (29 U.S.C. 1003(b)) is amended by adding at the end (after and below paragraph (5)) the following:

`The provisions of part 7 of subtitle B shall not apply to a health insurance issuer (as defined in section 706(b)(2)) solely by reason of health insurance coverage (as defined in section 706(b)(1)) provided by such issuer in connection with a group health plan (as defined in section 706(a)(1)) if the provisions of this title do not apply to such group health plan.'.

(e) REPORTING AND ENFORCEMENT WITH RESPECT TO CERTAIN ARRANGEMENTS-

(1) IN GENERAL- Section 101 of such Act (29 U.S.C. 1021) is amended--

(A) by redesignating subsection (g) as subsection (h), and

(B) by inserting after subsection (f) the following new subsection:

`(g) REPORTING BY CERTAIN ARRANGEMENTS- The Secretary may, by regulation, require multiple employer welfare arrangements providing benefits consisting of medical care (within the meaning of section 706(a)(2)) which are not group health plans to report, not more frequently than annually, in such form and such manner as the Secretary may require for the purpose of determining the extent to which the requirements of part 7 are being carried out in connection with such benefits.'.

(2) ENFORCEMENT-

(A) IN GENERAL- Section 502 of such Act (29 U.S.C. 1132) is amended--

(i) in subsection (a)(6), by striking `under subsection (c)(2) or (i) or (l)' and inserting `under paragraph (2), (4), or (5) of subsection (c) or under subsection (i) or (l)'; and

(ii) in the last 2 sentences of subsection (c), by striking `For purposes of this paragraph' and all that follows through `The Secretary and' and inserting the following:

`(5) The Secretary may assess a civil penalty against any person of up to $1,000 a day from the date of the person's failure or refusal to file the information required to be filed by such person with the Secretary under regulations prescribed pursuant to section 101(g).

`(6) The Secretary and'.

(B) TECHNICAL AND CONFORMING AMENDMENT- Section 502(c)(1) of such Act (29 U.S.C. 1132(c)(1)) is amended by adding at the end the following sentence: `For purposes of this paragraph, each violation described in subparagraph (A) with respect to any single participant, and each violation described in subparagraph (B) with respect to any single participant or beneficiary, shall be treated as a separate violation.'.

(3) COORDINATION- Section 506 of such Act (29 U.S.C. 1136) is amended by adding at the end the following new subsection:

`(c) COORDINATION OF ENFORCEMENT WITH STATES WITH RESPECT TO CERTAIN ARRANGEMENTS- A State may enter into an agreement with the Secretary for delegation to the State of some or all of the Secretary's authority under sections 502 and 504 to enforce the requirements under part 7 in connection with multiple employer welfare arrangements, providing medical care (within the meaning of section 706(a)(2)), which are not group health plans.'.

(f) CONFORMING AMENDMENTS-

(1) Section 514(b) of such Act (29 U.S.C. 1144(b)) is amended by adding at the end the following new paragraph:

`(9) For additional provisions relating to group health plans, see section 704.'.

(2)(A) Part 6 of subtitle B of title I of such Act (29 U.S.C. 1161 et seq.) is amended by striking the heading and inserting the following:

`Part 6--Continuation Coverage and Additional Standards for Group Health Plans'.

(B) The table of contents in section 1 of such Act is amended by striking the item relating to the heading for part 6 of subtitle B of title I and inserting the following:

`Part 6--Continuation Coverage and Additional Standards for Group Health Plans'.

(3) The table of contents in section 1 of such Act (as amended by the preceding provisions of this section) is amended by inserting after the items relating to part 6 the following new items:

`Part 7--Group Health Plan Portability, Access, and Renewability Requirements

`Sec. 701. Increased portability through limitation on preexisting condition exclusions.

`Sec. 702. Prohibiting discrimination against individual participants and beneficiaries based on health status.

`Sec. 703. Guaranteed renewability in multiemployer plans and multiple employer welfare arrangements.

`Sec. 704. Preemption; State flexibility; construction.

`Sec. 705. Special rules relating to group health plans.

`Sec. 706. Definitions.

`Sec. 707. Regulations.'.

(g) EFFECTIVE DATES-

(1) IN GENERAL- Except as provided in this section, this section (and the amendments made by this section) shall apply with respect to group health plans for plan years beginning after June 30, 1997.

(2) DETERMINATION OF CREDITABLE COVERAGE-

(A) PERIOD OF COVERAGE-

(i) IN GENERAL- Subject to clause (ii), no period before July 1, 1996, shall be taken into account under part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (as added by this section) in determining creditable coverage.

(ii) SPECIAL RULE FOR CERTAIN PERIODS- The Secretary of Labor, consistent with section 104, shall provide for a process whereby individuals who need to establish creditable coverage for periods before July 1, 1996, and who would have such coverage credited but for clause (i) may be given credit for creditable coverage for such periods through the presentation of documents or other means.

(B) CERTIFICATIONS, ETC-

(i) IN GENERAL- Subject to clauses (ii) and (iii), subsection (e) of section 701 of the Employee Retirement Income Security Act of 1974 (as added by this section) shall apply to events occurring after June 30, 1996.

(ii) NO CERTIFICATION REQUIRED TO BE PROVIDED BEFORE JUNE 1, 1997- In no case is a certification required to be provided under such subsection before June 1, 1997.

(iii) CERTIFICATION ONLY ON WRITTEN REQUEST FOR EVENTS OCCURRING BEFORE OCTOBER 1, 1996- In the case of an event occurring after June 30, 1996, and before October 1, 1996, a certification is not required to be provided under such subsection unless an individual (with respect to whom the certification is otherwise required to be made) requests such certification in writing.

(C) TRANSITIONAL RULE- In the case of an individual who seeks to establish creditable coverage for any period for which certification is not required because it relates to an event occurring before June 30, 1996--

(i) the individual may present other credible evidence of such coverage in order to establish the period of creditable coverage; and

(ii) a group health plan and a health insurance issuer shall not be subject to any penalty or enforcement action with respect to the plan's or issuer's crediting (or not crediting) such coverage if the plan or issuer has sought to comply in good faith with the applicable requirements under the amendments made by this section.

(3) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS- Except as provided in paragraph (2), in the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act, part 7 of subtitle B of title I of Employee Retirement Income Security Act of 1974 (other than section 701(e) thereof) shall not apply to plan years beginning before the later of--

(A) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or

(B) July 1, 1997.

For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement of such part shall not be treated as a termination of such collective bargaining agreement.

(4) TIMELY REGULATIONS- The Secretary of Labor, consistent with section 104, shall first issue by not later than April 1, 1997, such regulations as may be necessary to carry out the amendments made by this section.

(5) LIMITATION ON ACTIONS- No enforcement action shall be taken, pursuant to the amendments made by this section, against a group health plan or health insurance issuer with respect to a violation of a requirement imposed by such amendments before January 1, 1998, or, if later, the date of issuance of regulations referred to in paragraph (4), if the plan or issuer has sought to comply in good faith with such requirements.

SEC. 102. THROUGH THE PUBLIC HEALTH SERVICE ACT.

(a) IN GENERAL- The Public Health Service Act is amended by adding at the end the following new title:

`TITLE XXVII--ASSURING PORTABILITY, AVAILABILITY, AND RENEWABILITY OF HEALTH INSURANCE COVERAGE

`Part A--Group Market Reforms

`Subpart 1--Portability, Access, and Renewability Requirements

`SEC. 2701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING CONDITION EXCLUSIONS.

`(2) such exclusion extends for a period of not more than 12 months (or 18 months in the case of a late enrollee) after the enrollment date; and

`(b) DEFINITIONS- For purposes of this part--

`(1) PREEXISTING CONDITION EXCLUSION-

`(3) LATE ENROLLEE- The term `late enrollee' means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during--

`(A) the first period in which the individual is eligible to enroll under the plan, or

`(B) a special enrollment period under subsection (f).

`(c) RULES RELATING TO CREDITING PREVIOUS COVERAGE-

`(1) CREDITABLE COVERAGE DEFINED- For purposes of this title, the term `creditable coverage' means, with respect to an individual, coverage of the individual under any of the following:

`(A) A group health plan.

`(B) Health insurance coverage.

`(C) Part A or part B of title XVIII of the Social Security Act.

`(D) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928.

`(E) Chapter 55 of title 10, United States Code.

`(F) A medical care program of the Indian Health Service or of a tribal organization.

`(G) A State health benefits risk pool.

`(H) A health plan offered under chapter 89 of title 5, United States Code.

`(I) A public health plan (as defined in regulations).

`(J) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).

Such term does not include coverage consisting solely of coverage of excepted benefits (as defined in section 2791(c)).

`(2) NOT COUNTING PERIODS BEFORE SIGNIFICANT BREAKS IN COVERAGE-

`(3) METHOD OF CREDITING COVERAGE-

`(B) ELECTION OF ALTERNATIVE METHOD- A group health plan, or a health insurance issuer offering group health insurance, may elect to apply subsection (a)(3) based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subparagraph (A). Such election shall be made on a uniform basis for all participants and beneficiaries. Under such election a group health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category.

`(i) prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made such election, and

`(ii) include in such statements a description of the effect of this election.

`(D) ISSUER NOTICE- In the case of an election under subparagraph (B) with respect to health insurance coverage offered by an issuer in the small or large group market, the issuer--

`(i) shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made such election, and

`(ii) shall include in such statements a description of the effect of such election.

`(d) EXCEPTIONS-

`(e) CERTIFICATIONS AND DISCLOSURE OF COVERAGE-

`(1) REQUIREMENT FOR CERTIFICATION OF PERIOD OF CREDITABLE COVERAGE-

`(A) IN GENERAL- A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certification described in subparagraph (B)--