ERISA Targeted Health Insurance Reform Act of 1996

TABLE OF CONTENTS:

Title I: Increased Availability and Continuity of Group

Health Plan Coverage for Employees and Their Families

Title II: Requirements for Insurers and Health Maintenance

Organizations Offering Health Insurance Coverage to

Group Health Plans of Small Employers

Title III: Encouragement of Multiple Employer Health Plans,

Voluntary Health Insurance Associations, and Other Fully

Insured Arrangements; Preemption

ERISA Targeted Health Insurance Reform Act of 1996 - Title I: Increased Availability and Continuity of Group Health Plan Coverage for Employees and Their Families - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to provide for access to, and continuity of, group health plan coverage.

(Sec. 101) Adds a definition of group health plan. Provides for inclusion of certain partners and self-employed sponsors as participants in group health plans.

(Sec. 102) Adds provisions relating to access to, and continuity of, group health plans. Sets forth definitions and special rules.

Provides for: (1) limitations on preexisting condition exclusions; (2) portability; (3) requirements for renewability of coverage; and (4) group health plan enrollment requirements.

Prohibits a group health plan, health maintenance organization (HMO), or insurer from denying or limiting benefits otherwise available under a plan based on a preexisting condition. Permits such limitations or exclusions only if they do not extend beyond 12 months (or 18 months for late entrants). Provides that a preexisting condition exists if it is diagnosed or treated within six months (or 12 months for late entrants) of the date of coverage, disregarding any waiting period. Permits HMOs qualified under specified provisions of the Public Health Service Act (PHSA) to impose preexisting condition exclusions or to impose an eligibility period, during which coverage would not be effective, of 90 days after initial eligibility (or 180 days for late entrants).

Requires that the period of a preexisting condition exclusion be reduced by one month for each month during which an individual is in a period of continuous coverage (defined as beginning on the date the individual becomes covered for such a preexisting condition under a group health plan, individual health insurance coverage, or a public plan, and ending when the individual is not so covered for 60 days). Prohibits use of a preexisting condition exclusion for newborns and adopted children with continuous coverage, if such coverage begins within one month of birth or adoption.

Requires a multiemployer plan, multiple employer health plan, or fully insured multiple employer welfare arrangement (MEWA) to guarantee renewal to an employer, except for specified reasons.

Requires an insurer to renew coverage for an employer (except in cases of nonpayment, fraud, or noncompliance, or unless the insurer is ceasing to offer that type of group coverage in a State or, for an HMO or network plan, the geographic area).

Requires group health plans to have an annual enrollment period for eligible individuals not previously covered under which at least one benefit option (including family coverage, if available) may be elected. Requires a 30-day enrollment period to allow enrollment under special circumstances involving the loss of other health coverage, marriage, or birth (if family coverage is offered under the plan). Prohibits a group health plan, insurer or HMO which provides health insurance coverage in connection with a group health plan from excluding an employee or the employee's beneficiary from enrollment under the plan on the basis of a preexisting condition.

Subjects governmental plans to such preexisting condition and portability provisions, unless an election is made not to be covered. Provides that former employees of non-covered plans would not have to be provided portability protection under other group health plans subject to such rule.

Authorizes the Secretary of Labor to enforce such new requirements only if a State is not providing effective enforcement.

Preempts State laws that differ from such uniform national standards for portability and preexisting condition limitations under ERISA (but does not preempt State provisions relating to renewal and enrollment requirements).

Title II: Requirements for Insurers and Health Maintenance Organizations Offering Health Insurance Coverage to Group Health Plans of Small Employers - Establishes ERISA requirements for insurers and HMOs offering health insurance coverage to group health plans of small employers (defined as those with two to 50 employees on a typical business day).

Requires an insurer or HMO that offers small group coverage in a State to make such general coverage available to small employers. Requires an insurer or HMO to accept any small group and any eligible individual within the group who applies on a timely basis (subject to plan provisions, ERISA enrollment provisions, and any insurer participation standards which are applied uniformly and are consistent with applicable State laws). Allows an insurer to deny coverage for one year to previously self-insured small employers. Permits coverage offered to associations to be different from that offered to other small groups. Allows an HMO or network plan to limit coverage to individuals in their service areas and to refuse coverage of new groups if they have reached their capacity in a service area. Allows an insurer or HMO to deny coverage to new groups if it has insufficient financial reserves.

Authorizes States to impose and enforce provisions relating to such ERISA requirements for small group insurers and HMOs.

Title III: Encouragement of Multiple Employer Health Plans, Voluntary Health Insurance Associations, and Other Fully Insured Arrangements; Preemption - Limits the scope of State regulation.

Preempts State or local laws that require that health insurance coverage (including an insurer or HMO offering such coverage) in connection with group health plans to cover specific items or services consisting of medical care (but does not preempt laws prohibiting the exclusion of specific diseases). Allows a State to specify the contents (with respect to covering specific medical care items or services) of up to two policies of insurance in the small group market.

Preempts State or local laws (fictitious group laws) that prohibit two or more employers from obtaining, or an insurer or HMO from offering, fully insured health insurance coverage under any fully-insured multiple employer welfare arrangement (MEWA).

Revises preemption rules applicable to voluntary health insurance associations (VHIAs).

(Sec. 302) Establishes rules governing State regulation of multiple employer health plans (MEHPs) (non-fully-insured MEWAs providing medical care).

Sets forth conditions under which MEHPs may apply for an exemption from certain State laws, under a current exemption process in ERISA.

Provides that only certain legitimate association health plans and other arrangements which are not fully insured are eligible for an exemption and to be treated as ERISA employee welfare benefit plans. Revises provisions relating to the Secretary's duty to implement current ERISA provisions in order to provide such exemptions for MEHPs. Allows States to enforce the conditions of an exemption granted a MEHP.

Sets forth criteria which a self-insured arrangement must meet to qualify for an exemption as an MEHP. Directs the Secretary to grant such an exemption to such an arrangement if specified conditions are met.

Provides for a class exemption from specified ERISA requirements for certain large MEHPs that have been in operation for at least three years on the date of enactment of this Act and that meet other conditions.

Sets forth eligibility requirements for MEHPs relating to sponsors, boards of trustees, and plan operations (including basis of premium rates).

Makes eligible to seek an exemption as MEHPs certain other entities, including: (1) franchise networks; (2) certain existing collectively bargained arrangements not meeting exemption criteria; and (3) certain arrangements not meeting exemption criteria for single employer plans.

(Sec. 303) Revises provisions relating to: (1) the scope of preemption rules; (2) treatment of single employer arrangements; and (3) treatment of certain collectively bargained arrangements.

(Sec. 306) Sets forth special eligibility rules for certain church plans electing to seek an exemption.

(Sec. 307) Sets forth enforcement provisions relating to MEWAs.

(Sec. 308) Provides for cooperation between Federal and State authorities.

(Sec. 309) Sets forth filing requirements for MEWAs offering health benefits.

(Sec. 310) Requires a single annual filing for all participating employers.

(Sec. 311) Sets forth an effective date and a transitional rule.

(Sec. 312) Declares that nothing in this Act may be construed to require the coverage of any specific procedure, treatment, or service as part of a group health plan or health insurance coverage under this Act or through regulation.