1 2 3 4 5 6 7 8 9 10 11 12 13 14 10 applicable accident and health insurance contract that only provides for core benefits, of any services, category of care, or services of any class or type of provider other than core benefits. "(4) TREATMENT OF MANAGED CARE.-Nothing in this section shall be construed as preventing an applicable accident and health insurance contract from "(A) providing benefits through a selected set of providers, "(B) providing financial incentives for beneficiaries to use particular providers, or "(C) providing for utilization review and controls over benefits. 15 "SEC. 5000C. SPECIFIC CONTRACTUAL REQUIREMENTS. 16 “(a) GENERAL RULE.-The requirements of this sec 17 tion are met if, with respect to any applicable accident 18 and health insurance contract, the coverage requirements 19 of subsection (b) are met. "(b) COVERAGE REQUIREMENTS. "(1) IN GENERAL.-The requirements of this subsection are met with respect to any applicable ac cident and health contract if, under the terms and operation of the contract, the following requirements are met: 11 “(A) GUARANTEED ELIGIBILITY.—No eligible employee (and the spouse or any depend ent child of the employee eligible for coverage) may be excluded from coverage under the con tract. "(B) LIMITATIONS ON COVERAGE OF PRE EXISTING CONDITIONS.— "(i) Any limitation under the contract on any preexisting condition may not extend beyond the 6-month period beginning with the date an insured is first covered by the contract. "(ii) The contract offers full coverage for preexisting conditions of high-risk individuals without a price differential within a community, with reasonable waiting periods as determined or approved under State law or regulation, without cancellation of coverage for heavy usage, and without regard to age, income, or employment status of individuals under age 65. "(C) GUARANTEED RENEWABILITY. "(i) IN GENERAL.-The contract must be renewed at the election of the employer unless the contract is terminated for cause. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 12 "(ii) CAUSE.-For purposes of this subparagraph, the term 'cause' "(I) includes nonpayment of premiums, fraud or misrepresentation, noncompliance with plan provisions (including participation requirements), or misuse of network provisions, but "(II) does not include any reason related to risk characteristics. "(2) WAITING PERIODS.-Paragraph (1)(A) shall not apply to any period an eligible employee is excluded from coverage under the contract solely by reason of a requirement applicable to all employees that a minimum period of service with the employer is required before the employee is eligible for such coverage. 17 "SEC. 5000D. DEFINITIONS. 18 "(a) APPLICABLE ACCIDENT AND HEALTH INSUR19 ANCE CONTRACT.-For purposes of this subchapter20 21 2 23 24 25 "(1) IN GENERAL.-The term 'applicable accident and health insurance contract' means a contract under which a person authorized under applicable State insurance law provides a health insur ance plan or arrangement to any group consisting of more than 3 individuals. Such term does not include 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 13 any self-insured plan of an employer and does not include a qualified health maintenance organization (as defined in section 1310(d) of the Public Health Service Act). “(2) CERTAIN CONTRACTS NOT COVERED.-The term 'applicable accident and health insurance contract' does not include any contract "(A) which provides for accident only, den tal only, or disability only coverage, "(B) which provides coverage as a supplement to liability insurance, "(C) which provides insurance arising out of a workmens' compensation or similar law, or automobile medical-payment insurance, or "(D) which provides insurance which is re quired by law to be contained under any self insured plan of an employer. "(b) ELIGIBLE EMPLOYEE.-For purposes of this 19 subchapter, the term 'eligible employee' means any em20 ployee other than an employee who works less than 30 21 hours per week. For purposes of this paragraph, the term 22 'employee' includes a self-employed individual as defined 23 in section 401(c)(1)." 1 14 (b) CONFORMING AMENDMENT.-So much of chapter 2 47 of the Internal Revenue Code of 1986 as precedes sec 3 tion 5000 is amended to read as follows: 4 5 6 7 8 9 10 11 12 13 14 "CHAPTER 47-CERTAIN GROUP HEALTH PLANS "SUBCHAPTER A. Nonconforming group health plans. "Subchapter A-Nonconforming Group Health Plans "Sec. 5000. Certain group health plans." (c) EFFECTIVE DATE. (1) IN GENERAL.-The amendments made by this section shall apply to contracts issued, or renewed, after the date of the enactment of this Act. (2) GUARANTEED ISSUE.-The provisions of section 5000B(c) of the Internal Revenue Code of 1986 shall apply to contracts which are issued, or renewed, after the date which is 18 months after the date of the enactment of this Act. 15 SEC. 3. HEALTH REINSURANCE TRUST FUND. 16 (a) IN GENERAL.-Subchapter A of chapter 98 of the 17 Internal Revenue Code of 1986 (relating to trust fund 18 code) is amended by adding at the end thereof the follow19 ing new section: 20 "SEC. 9511. HEALTH REINSURANCE TRUST FUND. 21 "(a) ESTABLISHMENT.-There is hereby created in 22 the Treasury of the United States a trust fund to be |