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HR 5923 IH

To amend the Internal Revenue Code of 1986 to allow individuals a refundable and advancable credit against income tax for health insurance costs, to allow employees who elect not to participate in employer subsidized health plans an exclusion from gross income for employer payments in lieu of such participations, and for other purposes.

April 29, 2008

Mr. SHADEGG (for himself, Mrs. MUSGRAVE, Mr. WAMP, Mr. AKIN, Mr. CAMPBELL of California, Mr. DAVID DAVIS of Tennessee, Mr. KINGSTON, Mr. GINGREY, Mr. MARCHANT, Mr. ISSA, Mr. PENCE, Mr. FRANKS of Arizona, Mr. FORTUN.AE6O, Mr. PITTS, Mr. WILSON of South Carolina, Mr. BROWN of South Carolina, Mr. BARTLETT of Maryland, Mr. SOUDER, and Mr. FEENEY) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means and Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend the Internal Revenue Code of 1986 to allow individuals a refundable and advancable credit against income tax for health insurance costs, to allow employees who elect not to participate in employer subsidized health plans an exclusion from gross income for employer payments in lieu of such participations, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Patients' Health Care Reform Act'.

(b) Table of Contents- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Purposes.

TITLE I--HEALTHMARTS

Sec. 101. Expansion of consumer choice through Healthmarts.

TITLE II--HEALTH CARE ACCESS AND CHOICE THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS)

Sec. 201. Expansion of access and choice through individual membership associations (IMAs).

TITLE III--FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES

Sec. 301. Federal matching funding for State insurance expenditures.

TITLE IV--AFFORDABLE HEALTH COVERAGE FOR EMPLOYEES OF SMALL BUSINESSES

Sec. 401. Short title of title.

Sec. 402. Rules.

Sec. 403. Clarification of treatment of single employer arrangements.

Sec. 404. Clarification of treatment of certain collectively bargained arrangements.

Sec. 405. Enforcement provisions.

Sec. 406. Cooperation between Federal and State authorities.

Sec. 407. Effective date and transitional and other rules.

TITLE V--IMPROVEMENT TO ACCESS AND CHOICE OF HEALTH CARE

Sec. 501. Refundable and advanceable credit for health insurance costs.

Sec. 502. Exclusion for employer payments made to compensate employees who elect not to participate in employer-subsidized health plans.

TITLE VI--PATIENT ACCESS TO INFORMATION

Sec. 601. Patient access to information regarding plan coverage, managed care procedures, health care providers, and quality of medical care.

Sec. 602. Effective date.

(c) Constitutional Authority To Enact This Legislation- The constitutional authority upon which this Act rests is the power of Congress to regulate commerce with foreign nations and among the several States, set forth in article I, section 8 of the United States Constitution.

SEC. 2. FINDINGS.

(a) Need for Structural Reforms- Congress finds that the majority of Americans are receiving health care of a quality unmatched elsewhere in the world but that the method by which health care currently is financed and delivered is inflationary and does not distribute quality care to all Americans. Congress further finds that the major structural reforms must be implemented in order to institute a competitive system based on individual choice, under which each American is permitted individual choice to select the method of health care delivery which he believes is most appropriate for himself and his family, with appropriate assistance from the United States Government. Such a system would introduce internal incentives for the cost-effective delivery of quality health care to the American people.

(b) Specific Deficiencies- Congress finds that the major deficiencies of the present method of delivering and financing health care as follows:

(1) EMPLOYER OWNERSHIP OF HEALTH BENEFITS- The biggest problem with health care today is that the tax code has encouraged employers, not individuals, to become the purchaser of health insurance. Employers have a tax incentive to offer health care benefits to their employees, which means that employers are truly the owner of the plan, not individuals. Therefore employees, who are the consumers of health care services are unconcerned with and not involved with issues of cost and overutilize health care services in the belief that such services are `free'.

(2) INSUFFICIENT ACCESS- Numerous persons are not able to obtain sufficient health care either because the necessary personnel and facilities are not located in their communities or because they do not have adequate financial resources to obtain such services, or both.

(3) EXCESSIVE GOVERNMENT REGULATION- Continually increasing and complex Government regulation of the economic aspects of the health care delivery system has proven ineffective in restraining costs and is itself expensive and counterproductive in fulfilling its purposes and detrimental to the care of patients.

(4) THIRD-PARTY PAYMENT SYSTEMS- Payment by third-party payers (including commercial insurance companies and various levels of government) for the preponderance of the health care delivered each year insulates patients, as well as physicians, hospitals, and other deliverers of health care, from the need to consider the cost of treatment in addition to the medical benefit expected from it.

(5) REASONABLE COST REIMBURSEMENT- Reimbursement of hospitals and other health care institutions by third-party payers on the basis of reasonable costs of operation provides these institutions insufficient incentives to introduce more efficient methods of delivering care and at the same time diminishes the extent to which these institutions and their patients are affected by the consequences of inefficiency and overexpansion.

(6) GOVERNMENT AND THIRD-PARTY PAYER- The present role of government as a third-party payer poses a conflict of interest whereby the Government purchases or finances health care services and unilaterally determines the amount the deliverer will be paid for those services.

(7) LACK OF COMPETITION- The present system of financing and regulation prevents health care deliverers from competing with each other on the basis of efficiency and price as well as quality.

SEC. 3. PURPOSES.

The purposes of Act are--

(1) to make it possible for individuals, employees, and the self-employed to purchase and own their own health insurance without suffering any negative tax consequences;

(2) to enable individuals to make their own informed choice of the method by which their health care is provided, the persons who deliver it, and the price they wish to pay for it;

(3) to assist individuals in obtaining and in paying for basic health care services;

(4) to render patients and deliverers sensitive to the cost of health care, giving them both the incentive and the ability to restrain undesired increases in health care costs;

(5) to simplify and rationalize the payment mechanism for health care services;

(6) to foster the development of numerous, varied, and innovative systems of providing health care which will compete against each other in terms of price, service, and quality, and thus allow the American people to benefit from competitive forces which will reward efficient and effective deliverers and eliminate those which provide unsatisfactory quality of care or are inefficient;

(7) to replace governmental regulation of the economic aspects of health care delivery with individual choice, private initiative, and marketplace incentives and disciplines;

(8) to encourage the development of systems of delivering health care which are capable of supplying a broad range of health care services in a comprehensive and systematic manner, and

(9) to preserve the independence of health care deliverers and encourage their close identification with and their accountability to the individuals they serve.

TITLE I--HEALTHMARTS

SEC. 101. EXPANSION OF CONSUMER CHOICE THROUGH HEALTHMARTS.

The Public Health Service Act, as amended by section 2 of the Lifespan Respite Care Act of 2006 (Public Law 109-442), is amended by adding at the end the following new title:

`TITLE XXX--HEALTHMARTS

`SEC. 3001. DEFINITION OF HEALTHMART.

`(a) In General- For purposes of this title, the term `HealthMart' means a legal entity that meets the following requirements:

`(1) ORGANIZATION- The HealthMart is an organization operated under the direction of a board of directors which is composed of representatives of not fewer than 2 from each of the following:

`(A) Employers.

`(B) Employees.

`(C) Individuals (other than those described in subparagraph (B)) who are eligible to participate in the HealthMart.

`(D) Health care providers, which may be physicians, other health care professionals, health care facilities, or any combination thereof.

`(E) Entities, such as insurance companies, health maintenance organizations, and licensed provider-sponsored organizations, that underwrite or administer health benefits coverage.

`(2) OFFERING HEALTH BENEFITS COVERAGE-

`(A) DIFFERENT GROUPS- The HealthMart, in conjunction with those health insurance issuers that offer health benefits coverage through the HealthMart, makes available health benefits coverage in the manner described in subsection (b) to all employers, eligible employees, and individuals in the manner described in subsection (c)(2) at rates (including employer's and employee's share, if applicable) that are established by the health insurance issuer on a policy or product specific basis and that may vary only as permissible under State law. A HealthMart is deemed to be a group health plan for purposes of applying section 702 of the Employee Retirement Income Security Act of 1974, section 2702 of this Act, and section 9802(b) of the Internal Revenue Code of 1986 (which limit variation among similarly situated individuals of required premiums for health benefits coverage on the basis of health status-related factors).

`(B) NONDISCRIMINATION IN COVERAGE OFFERED-

`(i) IN GENERAL- Subject to clause (ii), the HealthMart may not offer health benefits coverage to an eligible employee or individual in a geographic area (as specified under paragraph (3)(A)) unless the same coverage is offered to all such employees or individuals in the same geographic area. Section 2711(a)(1)(B) of this Act limits denial of enrollment of certain eligible individuals under health benefits coverage in the small group market.

`(ii) CONSTRUCTION- Nothing in this title shall be construed as requiring or permitting a health insurance issuer to provide coverage outside the service area of the issuer, as approved under State law.

`(C) NO FINANCIAL UNDERWRITING- The HealthMart provides health benefits coverage only through contracts with health insurance issuers and does not assume insurance risk with respect to such coverage.

`(D) MINIMUM COVERAGE- By the end of the first year of its operation and thereafter, the HealthMart maintains not fewer than 10 purchasers and 100 members.

`(3) GEOGRAPHIC AREAS-

`(A) SPECIFICATION OF GEOGRAPHIC AREAS- The HealthMart shall specify the geographic area (or areas) in which it makes available health benefits coverage offered by health insurance issuers to employers, or individuals, as the case may be. Any such area shall encompass at least one entire county or equivalent area.

`(B) MULTISTATE AREAS- In the case of a HealthMart that serves more than one State, such geographic areas may be areas that include portions of two or more contiguous States.

`(C) MULTIPLE HEALTHMARTS PERMITTED IN SINGLE GEOGRAPHIC AREA- Nothing in this title shall be construed as preventing the establishment and operation of more than one HealthMart in a geographic area or as limiting the number of HealthMarts that may operate in any area.

`(4) PROVISION OF ADMINISTRATIVE SERVICES TO PURCHASERS-

`(A) IN GENERAL- The HealthMart provides administrative services for purchasers. Such services may include accounting, billing, enrollment information, and employee coverage status reports.

`(B) CONSTRUCTION- Nothing in this subsection shall be construed as preventing a HealthMart from serving as an administrative service organization to any entity.

`(5) DISSEMINATION OF INFORMATION- The HealthMart collects and disseminates (or arranges for the collection and dissemination of) consumer-oriented information on the scope, cost, and enrollee satisfaction of all coverage options offered through the HealthMart to its members and eligible individuals. Such information shall be defined by the HealthMart and shall be in a manner appropriate to the type of coverage offered. To the extent practicable, such information shall include information on provider performance, locations and hours of operation of providers, outcomes, and similar matters. Nothing in this section shall be construed as preventing the dissemination of such information or other information by the HealthMart or by health insurance issuers through electronic or other means.

`(6) FILING INFORMATION- The HealthMart--

`(A) files with the applicable Federal authority information that demonstrates the HealthMart's compliance with the applicable requirements of this title; or

`(B) in accordance with rules established under section 3003(a), files with a State such information as the State may require to demonstrate such compliance.

`(b) Health Benefits Coverage Requirements-

`(1) COMPLIANCE WITH CONSUMER PROTECTION REQUIREMENTS- Any health benefits coverage offered through a HealthMart shall--

`(A) be underwritten by a health insurance issuer that--

`(i) is licensed (or otherwise regulated) under State law;

`(ii) meets all applicable State standards relating to consumer protection, subject to section 3002(b); and

`(iii) offers the coverage under a contract with the HealthMart;

`(B) subject to paragraph (2), be approved or otherwise permitted to be offered under State law; and

`(C) provide full portability of creditable coverage for individuals who remain members of the same HealthMart notwithstanding that they change the employer through which they are members in accordance with the provisions of the parts 6 and 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 and titles XXII and XXVII of this Act, so long as both employers are purchasers in the HealthMart, and notwithstanding that they terminate such employment, if the HealthMart permits enrollment directly by eligible individuals.

`(2) ALTERNATIVE PROCESS FOR APPROVAL OF HEALTH BENEFITS COVERAGE IN CASE OF DISCRIMINATION OR DELAY-

`(A) IN GENERAL- The requirement of paragraph (1)(B) shall not apply to a policy or product of health benefits coverage offered in a State if the health insurance issuer seeking to offer such policy or product files an application to waive such requirement with the applicable Federal authority, and the authority determines, based on the application and other evidence presented to the authority, that--

`(i) either (or both) of the grounds described in subparagraph (B) for approval of the application has been met; and

`(ii) the coverage meets the applicable State standards (other than those that have been preempted under section 3002).

`(B) GROUNDS- The grounds described in this subparagraph with respect to a policy or product of health benefits coverage are as follows:

`(i) FAILURE TO ACT ON POLICY, PRODUCT, OR RATE APPLICATION ON A TIMELY BASIS- The State has failed to complete action on the policy or product (or rates for the policy or product) within 90 days of the date of the State's receipt of a substantially complete application. No period before the date of the enactment of this section shall be included in determining such 90-day period.

`(ii) DENIAL OF APPLICATION BASED ON DISCRIMINATORY TREATMENT- The State has denied such an application and--

`(I) the standards or review process imposed by the State as a condition of approval of the policy or product imposes either any material requirements, procedures, or standards to such policy or product that are not generally applicable to other policies and products offered or any requirements that are preempted under section 3002; or

`(II) the State requires the issuer, as a condition of approval of the policy or product, to offer any policy or product other than such policy or product.

`(C) ENFORCEMENT- In the case of a waiver granted under subparagraph (A) to an issuer with respect to a State, the Secretary may enter into an agreement with the State under which the State agrees to provide for monitoring and enforcement activities with respect to compliance of such an issuer and its health insurance coverage with the applicable State standards described in subparagraph (A)(ii). Such monitoring and enforcement shall be conducted by the State in the same manner as the State enforces such standards with respect to other health insurance issuers and plans, without discrimination based on the type of issuer to which the standards apply. Such an agreement shall specify or establish mechanisms by which compliance activities are undertaken, while not lengthening the time required to review and process applications for waivers under subparagraph (A).

`(3) EXAMPLES OF TYPES OF COVERAGE- The benefits coverage made available through a HealthMart may include, but is not limited to, any of the following if it meets the other applicable requirements of this title:

`(A) Coverage through a health maintenance organization.

`(B) Coverage in connection with a preferred provider organization.

`(C) Coverage in connection with a licensed provider-sponsored organization.

`(D) Indemnity coverage through an insurance company.

`(E) Coverage offered in connection with a contribution into a medical savings account or flexible spending account.

`(F) Coverage that includes a point-of-service option.

`(G) Any combination of such types of coverage.

`(4) WELLNESS BONUSES FOR HEALTH PROMOTION- Nothing in this title shall be construed as precluding a health insurance issuer offering health benefits coverage through a HealthMart from establishing premium discounts or rebates for members or from modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention so long as such programs are agreed to in advance by the HealthMart and comply with all other provisions of this title and do not discriminate among similarly situated members.

`(c) Purchasers; Members; Health Insurance Issuers-

`(1) PURCHASERS-

`(A) IN GENERAL- Subject to the provisions of this title, a HealthMart shall permit any employer or any individual described in subsection (a)(1)(C) to contract with the HealthMart for the purchase of health benefits coverage for its employees and dependents of those employees or for the individual (and the individual's dependents), respectively, and may not vary conditions of eligibility (including premium rates and membership fees) of an employer or individual to be a purchaser.

`(B) ROLE OF ASSOCIATIONS, BROKERS, AND LICENSED HEALTH INSURANCE AGENTS- Nothing in this section shall be construed as preventing an association, broker, licensed health insurance agent, or other entity from assisting or representing a HealthMart or employers or individuals from entering into appropriate arrangements to carry out this title.

`(C) PERIOD OF CONTRACT- The HealthMart may not require a contract under subparagraph (A) between a HealthMart and a purchaser to be effective for a period of longer than 24 months. The previous sentence shall not be construed as preventing such a contract from being extended for additional 24-month periods or preventing the purchaser from voluntarily electing a contract period of longer than 24 months.

`(D) EXCLUSIVE NATURE OF CONTRACT-

`(i) IN GENERAL- Subject to clause (ii), such a contract shall provide that the purchaser agrees not to obtain or sponsor health benefits coverage, on behalf of any eligible employees (and their dependents), other than through the HealthMart.

`(ii) EXCEPTION IF NO COVERAGE OFFERED IN AREA OF RESIDENCES- Clause (i) shall not apply to an eligible individual who resides in an area for which no coverage is offered by any health insurance issuer through the HealthMart.

`(iii) NOTHING PRECLUDING INDIVIDUAL EMPLOYEE OPT-OUT- Nothing in this subparagraph shall be construed as requiring an eligible employee of a large or small employer that is a purchaser to obtain health benefits coverage through the HealthMart.

`(2) MEMBERS-

`(A) IN GENERAL-

`(i) EMPLOYMENT BASED MEMBERSHIP- Under rules established to carry out this title, with respect to an employer that has a purchaser contract with a HealthMart, individuals who are employees of the employer may enroll for health benefits coverage (including coverage for dependents of such enrolling employees) offered by a health insurance issuer through the HealthMart.

`(ii) INDIVIDUALS- Under rules established to carry out this title, with respect to an individual who has a purchaser contract with a HealthMart for himself or herself, the individual may enroll for health benefits coverage (including coverage for dependents of such individual) offered by a health insurance issuer through the HealthMart.

`(B) NONDISCRIMINATION IN ENROLLMENT- A HealthMart may not deny enrollment as a member to an individual who is an employee or individual (or dependent of such an employee or individual) eligible to be so enrolled based on health status-related factors, except as may be permitted consistent with section 2742(b).

`(C) ANNUAL OPEN ENROLLMENT PERIOD- In the case of members enrolled in health benefits coverage offered by a health insurance issuer through a HealthMart, subject to subparagraph (D), the HealthMart shall provide for an annual open enrollment period of 30 days during which such members may change the coverage option in which the members are enrolled.

`(D) RULES OF ELIGIBILITY- Nothing in this paragraph shall preclude a HealthMart from establishing rules of employee or individual eligibility for enrollment and reenrollment of members during the annual open enrollment period under subparagraph (C). Such rules shall be applied consistently to all purchasers and members within the HealthMart and shall not be based in any manner on health status-related factors and may not conflict with sections 2701 and 2702 of this Act.

`(3) HEALTH INSURANCE ISSUERS-

`(A) PREMIUM COLLECTION- The contract between a HealthMart and a health insurance issuer shall provide, with respect to a member enrolled with health benefits coverage offered by the issuer through the HealthMart, for the payment of the premiums collected by the HealthMart (or the issuer) for such coverage (less a pre-determined administrative charge negotiated by the HealthMart and the issuer) to the issuer.

`(B) SCOPE OF SERVICE AREA- Nothing in this title shall be construed as requiring the service area of a health insurance issuer with respect to health insurance coverage to cover the entire geographic area served by a HealthMart.

`(C) AVAILABILITY OF COVERAGE OPTIONS-

`(i) IN GENERAL- A HealthMart shall enter into contracts with one or more health insurance issuers in a manner that assures that at least 2 health insurance coverage options are made available.

`(ii) REQUIREMENT OF NON-NETWORK OPTION- At least one of the health insurance coverage options made available under clause (i) shall be a non-network coverage option under which enrollees may obtain benefits for health care items and services that are not provided under a contract between the provider of the service and the issuer involved.

`(d) Prevention of Conflicts of Interest-

`(1) FOR BOARDS OF DIRECTORS- A member of a board of directors of a HealthMart may not serve as an employee or paid consultant to the HealthMart, but may receive reasonable reimbursement for travel expenses for purposes of attending meetings of the board or committees thereof.

`(2) FOR BOARDS OF DIRECTORS OR EMPLOYEES- An individual is not eligible to serve in a paid or unpaid capacity on the board of directors of a HealthMart or as an employee of the HealthMart, if the individual is employed by, represents in any capacity, owns, or controls any ownership interest in an organization from whom the HealthMart receives contributions, grants, or other funds not connected with a contract for coverage through the HealthMart.

`(3) EMPLOYMENT AND EMPLOYEE REPRESENTATIVES-

`(A) IN GENERAL- An individual who is serving on a board of directors of a HealthMart as a representative described in subparagraph (A) or (B) of section 3001(a)(1) shall not be employed by or affiliated with a health insurance issuer or be licensed as or employed by or affiliated with a health care provider.

`(B) CONSTRUCTION- For purposes of subparagraph (A), the term `affiliated' does not include membership in a health benefits plan or the obtaining of health benefits coverage offered by a health insurance issuer.

`(e) Construction-

`(1) NETWORK OF AFFILIATED HEALTHMARTS- Nothing in this section shall be construed as preventing one or more HealthMarts serving different areas (whether or not contiguous) from providing for some or all of the following (through a single administrative organization or otherwise):

`(A) Coordinating the offering of the same or similar health benefits coverage in different areas served by the different HealthMarts.

`(B) Providing for crediting of deductibles and other cost-sharing for individuals who are provided health benefits coverage through the HealthMarts (or affiliated HealthMarts) after--

`(i) a change of employers through which the coverage is provided, or

`(ii) a change in place of employment to an area not served by the previous HealthMart.

`(2) PERMITTING HEALTHMARTS TO ADJUST DISTRIBUTIONS AMONG ISSUERS TO REFLECT RELATIVE RISK OF ENROLLEES- Nothing in this section shall be construed as precluding a HealthMart from providing for adjustments in amounts distributed among the health insurance issuers offering health benefits coverage through the HealthMart based on factors such as the relative health care risk of members enrolled under the coverage offered by the different issuers.

`SEC. 3002. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.

`(a) Authority of States- Nothing in this section shall be construed as preempting State laws relating to the following:

`(1) The regulation of underwriters of health coverage, including licensure and solvency requirements.

`(2) The application of premium taxes and required payments for guaranty funds or for contributions to high-risk pools.

`(3) The application of fair marketing requirements and other consumer protections (other than those specifically relating to an item described in subsection (b)).

`(4) The application of requirements relating to the adjustment of rates for health insurance coverage.

`(b) Treatment of Benefit and Grouping Requirements- State laws insofar as they relate to any of the following are superseded and shall not apply to health benefits coverage made available through a HealthMart:

`(1) Benefit requirements for health benefits coverage offered through a HealthMart, including (but not limited to) requirements relating to coverage of specific providers, specific services or conditions, or the amount, duration, or scope of benefits, but not including requirements to the extent required to implement title XXVII or other Federal law and to the extent the requirement prohibits an exclusion of a specific disease from such coverage.

`(2) Requirements (commonly referred to as fictitious group laws) relating to grouping and similar requirements for such coverage to the extent such requirements impede the establishment and operation of HealthMarts pursuant to this title.

`(3) Any other requirements (including limitations on compensation arrangements) that, directly or indirectly, preclude (or have the effect of precluding) the offering of such coverage through a HealthMart, if the HealthMart meets the requirements of this title.

Any State law or regulation relating to the composition or organization of a HealthMart is preempted to the extent the law or regulation is inconsistent with the provisions of this title.

`(c) Application of ERISA Fiduciary and Disclosure Requirements- The board of directors of a HealthMart is deemed to be a plan administrator of an employee welfare benefit plan which is a group health plan for purposes of applying parts 1 and 4 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 and those provisions of part 5 of such subtitle which are applicable to enforcement of such parts 1 and 4, and the HealthMart shall be treated as such a plan and the enrollees enrolled on the basis of employment shall be treated as participants and beneficiaries for purposes of applying such provisions pursuant to this subsection.

`(d) Application of ERISA Renewability Protection- A HealthMart is deemed to be group health plan that is a multiple employer welfare arrangement for purposes of applying section 703 of the Employee Retirement Income Security Act of 1974.

`(e) Application of Rules for Network Plans and Financial Capacity- The provisions of subsections (c) and (d) of section 2711 apply to health benefits coverage offered by a health insurance issuer through a HealthMart.

`(f) Construction Relating to Offering Requirement- Nothing in section 2711(a) of this Act or 703 of the Employee Retirement Income Security Act of 1974 shall be construed as permitting the offering outside the HealthMart of health benefits coverage that is only made available through a HealthMart under this section because of the application of subsection (b).

`(g) Application to Guaranteed Renewability Requirements in Case of Discontinuation of an Issuer- For purposes of applying section 2712 in the case of health insurance coverage offered by a health insurance issuer through a HealthMart, if the contract between the HealthMart and the issuer is terminated and the HealthMart continues to make available any health insurance coverage after the date of such termination, the following rules apply:

`(1) RENEWABILITY- The HealthMart shall fulfill the obligation under such section of the issuer renewing and continuing in force coverage by offering purchasers (and members and their dependents) all available health benefits coverage that would otherwise be available to similarly-situated purchasers and members from the remaining participating health insurance issuers in the same manner as would be required of issuers under section 2712(c).

`(2) APPLICATION OF ASSOCIATION RULES- The HealthMart shall be considered an association for purposes of applying section 2712(e).

`(h) Construction in Relation to Certain Other Laws- Nothing in this title shall be construed as modifying or affecting the applicability to HealthMarts or health benefits coverage offered by a health insurance issuer through a HealthMart of parts 6 and 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 or titles XXII and XXVII of this Act.

`SEC. 3003. ADMINISTRATION.

`(a) In General- The applicable Federal authority shall administer this title and is authorized to issue such regulations as may be required to carry out this title. Such regulations shall be subject to Congressional review under the provisions of chapter 8 of title 5, United States Code. The applicable Federal authority shall incorporate the process of `deemed file and use' with respect to the information filed under section 3001(a)(6)(A) and shall determine whether information filed by a HealthMart demonstrates compliance with the applicable requirements of this title. Such authority shall exercise its authority under this title in a manner that fosters and promotes the development of HealthMarts in order to improve access to health care coverage and services.

`(b) Periodic Reports- The applicable Federal authority shall submit to Congress a report every 30 months, during the 10-year period beginning on the effective date of the rules promulgated by the applicable Federal authority to carry out this title, on the effectiveness of this title in promoting coverage of uninsured individuals. Such authority may provide for the production of such reports through one or more contracts with appropriate private entities.

`SEC. 3004. DEFINITIONS.

`For purposes of this title:

`(1) APPLICABLE FEDERAL AUTHORITY- The term `applicable Federal authority' means the Secretary of Health and Human Services .

`(2) ELIGIBLE EMPLOYEE OR INDIVIDUAL- The term `eligible' means, with respect to an employee or other individual and a HealthMart, an employee or individual who is eligible under section 3001(c)(2) to enroll or be enrolled in health benefits coverage offered through the HealthMart.

`(3) EMPLOYER; EMPLOYEE; DEPENDENT- Except as the applicable Federal authority may otherwise provide, the terms `employer', `employee', and `dependent', as applied to health insurance coverage offered by a health insurance issuer licensed (or otherwise regulated) in a State, shall have the meanings applied to such terms with respect to such coverage under the laws of the State relating to such coverage and such an issuer. The term `dependent' may include the spouse and children of the individual involved.

`(4) HEALTH BENEFITS COVERAGE- The term `health benefits coverage' has the meaning given the term group health insurance coverage in section 2791(b)(4).

`(5) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has the meaning given such term in section 2791(b)(2).

`(6) HEALTH STATUS-RELATED FACTOR- The term `health status-related factor' has the meaning given such term in section 2791(d)(9).

`(7) HEALTHMART- The term `HealthMart' is defined in section 3001(a).

`(8) MEMBER- The term `member' means, with respect to a HealthMart, an individual enrolled for health benefits coverage through the HealthMart under section 3001(c)(2).

`(9) PURCHASER- The term `purchaser' means, with respect to a HealthMart, an employer or individual that has contracted under section 3001(c)(1)(A) with the HealthMart for the purchase of health benefits coverage.'.

TITLE II--HEALTH CARE ACCESS AND CHOICE THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS)

SEC. 201. EXPANSION OF ACCESS AND CHOICE THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS).

The Public Health Service Act, as amended by section 102, is further amended by adding at the end the following new title:

`TITLE XXXI--INDIVIDUAL MEMBERSHIP ASSOCIATIONS

`SEC. 3101. DEFINITION OF INDIVIDUAL MEMBERSHIP ASSOCIATION (IMA).

`(a) In General- For purposes of this title, the terms `individual membership association' and `IMA' mean a legal entity that meets the following requirements:

`(1) ORGANIZATION- The IMA is an organization operated under the direction of an association (as defined in section 3104(1)).

`(2) OFFERING HEALTH BENEFITS COVERAGE-

`(A) DIFFERENT GROUPS- The IMA, in conjunction with those health insurance issuers that offer health benefits coverage through the IMA, makes available health benefits coverage in the manner described in subsection (b) to all members of the IMA and the dependents of such members in the manner described in subsection (c)(2) at rates that are established by the health insurance issuer on a policy or product specific basis and that may vary only as permissible under State law.

`(B) NONDISCRIMINATION IN COVERAGE OFFERED-

`(i) IN GENERAL- Subject to clause (ii), the IMA may not offer health benefits coverage to a member of an IMA unless the same coverage is offered to all such members of the IMA.

`(ii) CONSTRUCTION- Nothing in this title shall be construed as requiring or permitting a health insurance issuer to provide coverage outside the service area of the issuer, as approved under State law, or requiring a health insurance issuer from excluding or limiting the coverage on any individual, subject to the requirement of section 2741.

`(C) NO FINANCIAL UNDERWRITING- The IMA provides health benefits coverage only through contracts with health insurance issuers and does not assume insurance risk with respect to such coverage.

`(3) GEOGRAPHIC AREAS- Nothing in this title shall be construed as preventing the establishment and operation of more than one IMA in a geographic area or as limiting the number of IMAs that may operate in any area.

`(4) PROVISION OF ADMINISTRATIVE SERVICES TO PURCHASERS-

`(A) IN GENERAL- The IMA may provide administrative services for members. Such services may include accounting, billing, and enrollment information.

`(B) CONSTRUCTION- Nothing in this subsection shall be construed as preventing an IMA from serving as an administrative service organization to any entity.

`(5) FILING INFORMATION- The IMA files with the Secretary information that demonstrates the IMA's compliance with the applicable requirements of this title.

`(b) Health Benefits Coverage Requirements-

`(1) COMPLIANCE WITH CONSUMER PROTECTION REQUIREMENTS- Any health benefits coverage offered through an IMA shall--

`(A) be underwritten by a health insurance issuer that--

`(i) is licensed (or otherwise regulated) under State law,

`(ii) meets all applicable State standards relating to consumer protection, subject to section 3002(b), and

`(B) subject to paragraph (2), be approved or otherwise permitted to be offered under State law.

`(2) EXAMPLES OF TYPES OF COVERAGE- The benefits coverage made available through an IMA may include, but is not limited to, any of the following if it meets the other applicable requirements of this title:

`(A) Coverage through a health maintenance organization.

`(B) Coverage in connection with a preferred provider organization.

`(C) Coverage in connection with a licensed provider-sponsored organization.

`(D) Indemnity coverage through an insurance company.

`(E) Coverage offered in connection with a contribution into a medical savings account or flexible spending account.

`(F) Coverage that includes a point-of-service option.

`(G) Any combination of such types of coverage.

`(3) WELLNESS BONUSES FOR HEALTH PROMOTION- Nothing in this title shall be construed as precluding a health insurance issuer offering health benefits coverage through an IMA from establishing premium discounts or rebates for members or from modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention so long as such programs are agreed to in advance by the IMA and comply with all other provisions of this title and do not discriminate among similarly situated members.

`(c) Members; Health Insurance Issuers-

`(1) MEMBERS-

`(A) IN GENERAL- Under rules established to carry out this title, with respect to an individual who is a member of an IMA, the individual may enroll for health benefits coverage (including coverage for dependents of such individual) offered by a health insurance issuer through the IMA.

`(B) RULES FOR ENROLLMENT- Nothing in this paragraph shall preclude an IMA from establishing rules of enrollment and reenrollment of members. Such rules shall be applied consistently to all members within the IMA and shall not be based in any manner on health status-related factors.

`(2) HEALTH INSURANCE ISSUERS- The contract between an IMA and a health insurance issuer shall provide, with respect to a member enrolled with health benefits coverage offered by the issuer through the IMA, for the payment of the premiums collected by the issuer.

`SEC. 3102. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.

`State laws insofar as they relate to any of the following are superseded and shall not apply to health benefits coverage made available through an IMA:

`(1) Benefit requirements for health benefits coverage offered through an IMA, including (but not limited to) requirements relating to coverage of specific providers, specific services or conditions, or the amount, duration, or scope of benefits, but not including requirements to the extent required to implement title XXVII or other Federal law and to the extent the requirement prohibits an exclusion of a specific disease from such coverage.

`(2) Any other requirements (including limitations on compensation arrangements) that, directly or indirectly, preclude (or have the effect of precluding) the offering of such coverage through an IMA, if the IMA meets the requirements of this title.

Any State law or regulation relating to the composition or organization of an IMA is preempted to the extent the law or regulation is inconsistent with the provisions of this title.

`SEC. 3103. ADMINISTRATION.

`(a) In General- The Secretary shall administer this title and is authorized to issue such regulations as may be required to carry out this title. Such regulations shall be subject to Congressional review under the provisions of chapter 8 of title 5, United States Code. The Secretary shall incorporate the process of `deemed file and use' with respect to the information filed under section 3001(a)(5)(A) and shall determine whether information filed by an IMA demonstrates compliance with the applicable requirements of this title. The Secretary shall exercise authority under this title in a manner that fosters and promotes the development of IMAs in order to improve access to health care coverage and services.

`(b) Periodic Reports- The Secretary shall submit to Congress a report every 30 months, during the 10-year period beginning on the effective date of the rules promulgated by the Secretary to carry out this title, on the effectiveness of this title in promoting coverage of uninsured individuals. The Secretary may provide for the production of such reports through one or more contracts with appropriate private entities.

`SEC. 3104. DEFINITIONS.

`For purposes of this title:

`(1) ASSOCIATION- The term `association' means, with respect to health insurance coverage offered in a State, an association which--

`(A) has been actively in existence for at least 5 years;

`(B) has been formed and maintained in good faith for purposes other than obtaining insurance;

`(C) does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee); and

`(D) does not make health insurance coverage offered through the association available other than in connection with a member of the association.

`(2) DEPENDENT- The term `dependent', as applied to health insurance coverage offered by a health insurance issuer licensed (or otherwise regulated) in a State, shall have the meaning applied to such term with respect to such coverage under the laws of the State relating to such coverage and such an issuer. Such term may include the spouse and children of the individual involved.

`(3) HEALTH BENEFITS COVERAGE- The term `health benefits coverage' has the meaning given the term health insurance coverage in section 2791(b)(1).

`(4) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has the meaning given such term in section 2791(b)(2).

`(5) HEALTH STATUS-RELATED FACTOR- The term `health status-related factor' has the meaning given such term in section 2791(d)(9).

`(6) IMA; INDIVIDUAL MEMBERSHIP ASSOCIATION- The terms `IMA' and `individual membership association' are defined in section 3101(a).

`(7) MEMBER- The term `member' means, with respect to an IMA, an individual who is a member of the association to which the IMA is offering coverage.'.

TITLE III--FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES

SEC. 301. FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES.

(a) In General- Subject to the succeeding provisions of this section, each State shall receive from the Secretary of Health and Human Services an amount equal to 50 percent of the funds expended by the State in providing for the use, in connection with providing health benefits coverage, of a high-risk pool, a reinsurance pool, or other risk-adjustment mechanism used for the purpose of subsidizing the purchase of private health insurance.

(b) Funding Limitation- A State shall not receive under this section for a fiscal year more than a total of 50 cents multiplied by the average number of residents (as estimated by the Secretary) in the State in the fiscal year.

(c) Administration- The Secretary of Health and Human Services shall provide for the administration of this section and may establish such terms and conditions, including the requirement of an application, as may be appropriate to carry out this section.

(d) Construction- Nothing in this section shall be construed as requiring a State to operate a reinsurance pool (or other risk-adjustment mechanism) under this section or as preventing a State from operating such a pool or mechanism through one or more private entities.

(e) High-Risk Pool- For purposes of this section, the term `high-risk pool' means any qualified high risk pool (as defined in section 2744(c)(2) of the Public Health Service Act).

(f) Reinsurance Pool or Other Risk-Adjustment Mechanism Defined- For purposes of this section, the term `reinsurance pool or other risk-adjustment mechanism' means any State-based risk spreading mechanism to subsidize the purchase of private health insurance for the high-risk population.

(g) High-Risk Population- For purposes of this section, the term `high-risk population' means--

(1) individuals who, by reason of the existence or history of a medical condition, are able to acquire health coverage only at rates which are at least 150 percent of the standard risk rates for such coverage, and

(2) individuals who are provided health coverage by a high-risk pool.

(h) State Defined- For purposes of this section, the term `State' includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

TITLE IV--AFFORDABLE HEALTH COVERAGE FOR EMPLOYEES OF SMALL BUSINESSES

SEC. 401. SHORT TITLE OF TITLE.

This title may be cited as the `Small Business Access and Choice for Entrepreneurs Act of 2007'.

SEC. 402. RULES.

(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 --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--

`(1) whose sponsor is (or is deemed under this part to be) described in subsection (b); and

`(2) under which at least one option of health insurance coverage offered by a health insurance issuer (which may include, among other options, managed care options, point of service options, and preferred provider options) is provided to participants and beneficiaries, unless, for any plan year, such coverage remains unavailable to the plan despite good faith efforts exercised by the plan to secure such coverage.

`(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 collects from its members on a periodic basis 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--

`(1) such certification--

`(A) is administratively feasible;

`(B) is not adverse to the interests of the individuals covered under the plan; and

`(C) is protective of the rights and benefits of the individuals covered under the plan; and

`(2) 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 Access and Choice for Entrepreneurs Act of 2007;

`(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, which have been indicated as having average or above-average health insurance risk or health claims experience by reason of State rate filings, denials of coverage, proposed premium rate levels, and other means demonstrated by such plan in accordance with regulations which the Secretary shall prescribe through negotiated rulemaking, including (but not limited to) the following: agriculture; automobile dealerships; barbering and cosmetology; child care; construction; dance, theatrical, and orchestra productions; disinfecting and pest control; eating and drinking establishments; fishing; hospitals; labor organizations; logging; manufacturing (metals); mining; medical and dental practices; medical laboratories; sanitary services; transportation (local and freight); and warehousing.

`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 Access and Choice for Entrepreneurs Act of 2007.

`(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, 1997, 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).

`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 respect to which the requirements of subsection (b) are met;

except that, in the case of a sponsor which is a professional association or other individual-based association, if at least one of the officers, directors, or employees of an employer, or at least one of the individuals who are partners in an employer and who actively participates in the business, is a member or such an affiliated member of the sponsor, participating employers may also include such employer; and

`(2) all individuals commencing coverage under the plan after certification under this part must be--

`(A) active or retired owners (including self-employed individuals), officers, directors, or employees of, or partners in, participating employers; or

`(B) the beneficiaries of individuals described in subparagraph (A).

`(b) Coverage of Previously Uninsured Employees- In the case of an association health plan in existence on the date of the enactment of the Small Business Access and Choice for Entrepreneurs Act of 2007, an affiliated member of the sponsor of the plan may be offered coverage under the plan as a participating employer only if--

`(1) the affiliated member was an affiliated member on the date of certification under this part; or

`(2) during the 12-month period preceding the date of the offering of such coverage, the affiliated member has not maintained or contributed to a group health plan with respect to any of its employees who would otherwise be eligible to participate in such association health plan.

`(c) Individual Market Unaffected- The requirements of this subsection are met with respect to an association health plan if, under the terms of the plan, no participating employer may provide health insurance coverage in the individual market for any employee not covered under the plan which is similar to the coverage contemporaneously provided to employees of the employer under the plan, if such exclusion of the employee from coverage under the plan is based on a health status-related factor with respect to the employee and such employee would, but for such exclusion on such basis, be eligible for coverage under the plan.

`(d) Prohibition of Discrimination Against Employers and Employees Eligible To Participate- The requirements of this subsection are met with respect to an association health plan if--

`(1) under the terms of the plan, all employers meeting the preceding requirements of this section are eligible to qualify as participating employers for all geographically available coverage options, unless, in the case of any such employer, participation or contribution requirements of the type referred to in section 2711 of the Public Health Service Act are not met;

`(2) upon request, any employer eligible to participate is furnished information regarding all coverage options available under the plan; and

`(3) the applicable requirements of sections 701, 702, and 703 are met with respect to the plan.

`SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION RATES, AND BENEFIT OPTIONS.

`(a) In General- The requirements of this section are met with respect to an association health plan if the following requirements are met:

`(1) CONTENTS OF GOVERNING INSTRUMENTS- The instruments governing the plan include a written instrument, meeting the requirements of an instrument required under section 402(a)(1), which--

`(A) provides that the board of trustees serves as the named fiduciary required for plans under section 402(a)(1) and serves in the capacity of a plan administrator (referred to in section 3(16)(A));

`(B) provides that the sponsor of the plan is to serve as plan sponsor (referred to in section 3(16)(B)); and

`(C) incorporates the requirements of section 806.

`(2) CONTRIBUTION RATES MUST BE NONDISCRIMINATORY-

`(A) The contribution rates for any participating small employer do not vary on the basis of the claims experience of such employer and do not vary on the basis of the type of business or industry in which such employer is engaged.

`(B) Nothing in this title or any other provision of law shall be construed to preclude an association health plan, or a health insurance issuer offering health insurance coverage in connection with an association health plan, from--

`(i) setting contribution rates based on the claims experience of the plan; or

`(ii) varying contribution rates for small employers in a State to the extent that such rates could vary using the same methodology employed in such State for regulating premium rates in the small group market with respect to health insurance coverage offered in connection with bona fide associations (within the meaning of section 2791(d)(3) of the Public Health Service Act),

subject to the requirements of section 702(b) relating to contribution rates.

`(3) FLOOR FOR NUMBER OF COVERED INDIVIDUALS WITH RESPECT TO CERTAIN PLANS- If any benefit option under the plan does not consist of health insurance coverage, the plan has as of the beginning of the plan year not fewer than 1,000 participants and beneficiaries.

`(4) MARKETING REQUIREMENTS-

`(A) IN GENERAL- If a benefit option which consists of health insurance coverage is offered under the plan, State-licensed insurance agents shall be used to distribute to small employers coverage which does not consist of health insurance coverage in a manner comparable to the manner in which such agents are used to distribute health insurance coverage.

`(B) STATE-LICENSED INSURANCE AGENTS- For purposes of subparagraph (A), the term `State-licensed insurance agents' means one or more agents who are licensed in a State and are subject to the laws of such State relating to licensure, qualification, testing, examination, and continuing education of persons authorized to offer, sell, or solicit health insurance coverage in such State.

`(5) REGULATORY REQUIREMENTS- Such other requirements as the applicable authority determines are necessary to carry out the purposes of this part, which shall be prescribed by the applicable authority by regulation through negotiated rulemaking.

`(b) Health Benefit Options Under an Association Health Plan-

`(1) EXAMPLES OF TYPES OF COVERAGE- The health benefits coverage made available through an association health plan may include, but is not limited to, any of the following if it meets the other applicable requirements of this title:

`(A) Coverage through a health maintenance organization.

`(B) Coverage in connection with a preferred provider organization.

`(C) Coverage in connection with a licensed provider-sponsored organization.

`(D) Indemnity coverage through an insurance company.

`(E) Coverage offered in connection with a contribution into a medical savings account or flexible spending account.

`(F) Coverage that includes a point-of-service option.

`(G) Any combination of such types of coverage.

`(2) HEALTH INSURANCE COVERAGE OPTIONS-

`(A) IN GENERAL- An association health plan shall include a minimum of 4 health insurance coverage options. At least 1 option shall be a non network option. At least 2 options shall meet all applicable State benefit mandates.

`(B) MODEL BENEFITS PACKAGE- The Secretary in consultation with the National Association of Insurance Commissioners shall develop a model benefits package for health insurance coverage not later than one year after the date of the enactment of the Consensus Health Care Access and Choice Act of 2003.

`(C) EXCEPTION TO GENERAL RULE- An association health plan may offer 2 options that meet the requirements of the model benefits package in lieu of the State benefit mandate offerings required under subparagraph (A).

`(3) PERMITTING ASSOCIATION HEALTH PLANS TO ADJUST DISTRIBUTIONS AMONG ISSUERS TO REFLECT RELATIVE RISK OF ENROLLEES- Nothing in this section shall be construed as precluding an association health plan from providing for adjustments in amounts distributed among the health insurance issuers offering health benefits coverage through the association health plan based on factors such as the relative health care risk of members enrolled under the coverage offered by the different issuers.

`(4) CONSTRUCTION- Except as provided in subparagraph (2), nothing in this part or any provision of State law (as defined in section 514(c)(1)) shall be construed to preclude an association health plan, or a health insurance issuer offering health insurance coverage in connection with an association health plan, from exercising its sole discretion in selecting the specific items and services consisting of medical care to be included as benefits under such plan or coverage, except (subject to section 514) in the case of any law to the extent that it (1) prohibits an exclusion of a specific disease from such coverage, or (2) is not preempted under section 731(a)(1) with respect to matters governed by section 711 or 712.

`SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH INSURANCE COVERAGE.

`(a) In General- The requirements of this section are met with respect to an association health plan if--

`(1) the benefits under the plan consist solely of health insurance coverage; or

`(2) if the plan provides any additional benefit options which do not consist of health insurance coverage, the plan--

`(A) establishes and maintains reserves with respect to such additional benefit options, in amounts recommended by the qualified actuary, consisting of--

`(i) a reserve sufficient for unearned contributions;

`(ii) a reserve sufficient for benefit liabilities which have been incurred, which have not been satisfied, and for which risk of loss has not yet been transferred, and for expected administrative costs with respect to such benefit liabilities;

`(iii) a reserve sufficient for any other obligations of the plan; and

`(iv) a reserve sufficient for a margin of error and other fluctuations, taking into account the specific circumstances of the plan; and

`(B) establishes and maintains aggregate and specific excess/stop loss insurance and solvency indemnification, with respect to such additional benefit options for which risk of loss has not yet been transferred, as follows:

`(i) The plan shall secure aggregate excess/stop loss insurance for the plan with an attachment point which is not greater than 125 percent of expected gross annual claims. The applicable authority may by regulation, through negotiated rulemaking, provide for upward adjustments in the amount of such percentage in specified circumstances in which the plan specifically provides for and maintains reserves in excess of the amounts required under subparagraph (A).

`(ii) The plan shall secure specific excess/stop loss insurance for the plan with an attachment point which is at least equal to an amount recommended by the plan's qualified actuary (but not more than $175,000). The applicable authority may by regulation, through negotiated rulemaking, provide for adjustments in the amount of such insurance in specified circumstances in which the plan specifically provides for and maintains reserves in excess of the amounts required under subparagraph (A).

`(iii) The plan shall secure indemnification insurance for any claims which the plan is unable to satisfy by reason of a plan termination.

Any regulations prescribed by the applicable authority pursuant to clause (i) or (ii) of subparagraph (B) may allow for such adjustments in the required levels of excess/stop loss insurance as the qualified actuary may recommend, taking into account the specific circumstances of the plan.

`(b) Minimum Surplus in Addition to Claims Reserves- In the case of any association health plan described in subsection (a)(2), the requirements of this subsection are met if the plan establishes and maintains surplus in an amount at least equal to--

`(1) $500,000; or

`(2) such greater amount (but not greater than $2,000,000) as may be set forth in regulations prescribed by the applicable authority through negotiated rulemaking, based on the level of aggregate and specific excess/stop loss insurance provided with respect to such plan.

`(c) Additional Requirements- In the case of any association health plan described in subsection (a)(2), the applicable authority may provide such additional requirements relating to reserves and excess/stop loss insurance as the applicable authority considers appropriate. Such requirements may be provided by regulation, through negotiated rulemaking, with respect to any such plan or any class of such plans.

`(d) Adjustments for Excess/Stop Loss Insurance- The applicable authority may provide for adjustments to the levels of reserves otherwise required under subsections (a) and (b) with respect to any plan or class of plans to take into account excess/stop loss insurance provided with respect to such plan or plans.

`(e) Alternative Means of Compliance- The applicable authority may permit an association health plan described in subsection (a)(2) to substitute, for all or part of the requirements of this section (except subsection (a)(2)(B)(iii)), such security, guarantee, hold-harmless arrangement, or other financial arrangement as the applicable authority determines to be adequate to enable the plan to fully meet all its financial obligations on a timely basis and is otherwise no less protective of the interests of participants and beneficiaries than the requirements for which it is substituted. The applicable authority may take into account, for purposes of this subsection, evidence provided by the plan or sponsor which demonstrates an assumption of liability with respect to the plan. Such evidence may be in the form of a contract of indemnification, lien, bonding, insurance, letter of credit, recourse under applicable terms of the plan in the form of assessments of participating employers, security, or other financial arrangement.

`(f) Measures To Ensure Continued Payment of Benefits by Certain Plans in Distress-

`(1) PAYMENTS BY CERTAIN PLANS TO ASSOCIATION HEALTH PLAN FUND-

`(A) IN GENERAL- In the case of an association health plan described in subsection (a)(2), the requirements of this subsection are met if the plan makes payments into the Association Health Plan Fund under this subparagraph when they are due. Such payments shall consist of annual payments in the amount of $5,000, and, in addition to such annual payments, such supplemental payments as the Secretary may determine to be necessary under paragraph (2). Payments under this paragraph are payable to the Fund at the time determined by the Secretary. Initial payments are due in advance of certification under this part. Payments shall continue to accrue until a plan's assets are distributed pursuant to a termination procedure.

`(B) PENALTIES FOR FAILURE TO MAKE PAYMENTS- If any payment is not made by a plan when it is due, a late payment charge of not more than 100 percent of the payment which was not timely paid shall be payable by the plan to the Fund.

`(C) CONTINUED DUTY OF THE SECRETARY- The Secretary shall not cease to carry out the provisions of paragraph (2) on account of the failure of a plan to pay any payment when due.

`(2) PAYMENTS BY SECRETARY TO CONTINUE EXCESS/STOP LOSS INSURANCE COVERAGE AND INDEMNIFICATION INSURANCE COVERAGE FOR CERTAIN PLANS- In any case in which the applicable authority determines that there is, or that there is reason to believe that there will be: (A) a failure to take necessary corrective actions under section 809(a) with respect to an association health plan described in subsection (a)(2); or (B) a termination of such a plan under section 809(b) or 810(b)(8) (and, if the applicable authority is not the Secretary, certifies such determination to the Secretary), the Secretary shall determine the amounts necessary to make payments to an insurer (designated by the Secretary) to maintain in force excess/stop loss insurance coverage or indemnification insurance coverage for such plan, if the Secretary determines that there is a reasonable expectation that, without such payments, claims would not be satisfied by reason of termination of such coverage. The Secretary shall, to the extent provided in advance in appropriation Acts, pay such amounts so determined to the insurer designated by the Secretary.

`(3) ASSOCIATION HEALTH PLAN FUND-

`(A) IN GENERAL- There is established on the books of the Treasury a fund to be known as the `Association Health Plan Fund'. The Fund shall be available for making payments pursuant to paragraph (2). The Fund shall be credited with payments received pursuant to paragraph (1)(A), penalties received pursuant to paragraph (1)(B); and earnings on investments of amounts of the Fund under subparagraph (B).

`(B) INVESTMENT- Whenever the Secretary determines that the moneys of the fund are in excess of current needs, the Secretary may request the investment of such amounts as the Secretary determines advisable by the Secretary of the Treasury in obligations issued or guaranteed by the United States.

`(g) Excess/Stop Loss Insurance- For purposes of this section--

`(1) AGGREGATE EXCESS/STOP LOSS INSURANCE- The term `aggregate excess/stop loss insurance' means, in connection with an association health plan, a contract--

`(A) under which an insurer (meeting such minimum standards as the applicable authority may prescribe by regulation through negotiated rulemaking) provides for payment to the plan with respect to aggregate claims under the plan in excess of an amount or amounts specified in such contract;

`(B) which is guaranteed renewable; and

`(C) which allows for payment of premiums by any third party on behalf of the insured plan.

`(2) SPECIFIC EXCESS/STOP LOSS INSURANCE- The term `specific excess/stop loss insurance' means, in connection with an association health plan, a contract--

`(A) under which an insurer (meeting such minimum standards as the applicable authority may prescribe by regulation through negotiated rulemaking) provides for payment to the plan with respect to claims under the plan in connection with a covered individual in excess of an amount or amounts specified in such contract in connection with such covered individual;

`(B) which is guaranteed renewable; and

`(C) which allows for payment of premiums by any third party on behalf of the insured plan.

`(h) Indemnification Insurance- For purposes of this section, the term `indemnification insurance' means, in connection with an association health plan, a contract--

`(1) under which an insurer (meeting such minimum standards as the applicable authority may prescribe through negotiated rulemaking) provides for payment to the plan with respect to claims under the plan which the plan is unable to satisfy by reason of a termination pursuant to section 809(b) (relating to mandatory termination);

`(2) which is guaranteed renewable and noncancellable for any reason (except as the applicable authority may prescribe by regulation through negotiated rulemaking); and

`(3) which allows for payment of premiums by any third party on behalf of the insured plan.

`(i) Reserves- For purposes of this section, the term `reserves' means, in connection with an association health plan, plan assets which meet the fiduciary standards under part 4 and such additional requirements regarding liquidity as the applicable authority may prescribe through negotiated rulemaking.

`(j) Solvency Standards Working Group-

`(1) IN GENERAL- Within 90 days after the date of the enactment of the Small Business Access and Choice for Entrepreneurs Act of 2007, the applicable authority shall establish a Solvency Standards Working Group. In prescribing the initial regulations under this section, the applicable authority shall take into account the recommendations of such Working Group.

`(2) MEMBERSHIP- The Working Group shall consist of not more than 15 members appointed by the applicable authority. The applicable authority shall include among persons invited to membership on the Working Group at least one of each of the following:

`(A) a representative of the National Association of Insurance Commissioners;

`(B) a representative of the American Academy of Actuaries;

`(C) a representative of the State governments, or their interests;

`(D) a representative of existing self-insured arrangements, or their interests;

`(E) a representative of associations of the type referred to in section 801(b)(1), or their interests; and

`(F) a representative of multiemployer plans that are group health plans, or their interests.

`SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.

`(a) Filing Fee- Under the procedure prescribed pursuant to section 802(a), an association health plan shall pay to the applicable authority at the time of filing an application for certification under this part a filing fee in the amount of $5,000, which shall be available in the case of the Secretary, to the extent provided in appropriation Acts, for the sole purpose of administering the certification procedures applicable with respect to association health plans.

`(b) Information To Be Included in Application for Certification- An application for certification under this part meets the requirements of this section only if it includes, in a manner and form which shall be prescribed by the applicable authority through negotiated rulemaking, at least the following information:

`(1) IDENTIFYING INFORMATION- The names and addresses of--

`(A) the sponsor; and

`(B) the members of the board of trustees of the plan.

`(2) STATES IN WHICH PLAN INTENDS TO DO BUSINESS- The States in which participants and beneficiaries under the plan are to be located and the number of them expected to be located in each such State.

`(3) BONDING REQUIREMENTS- Evidence provided by the board of trustees that the bonding requirements of section 412 will be met as of the date of the application or (if later) commencement of operations.

`(4) PLAN DOCUMENTS- A copy of the documents governing the plan (including any bylaws and trust agreements), the summary plan description, and other material describing the benefits that will be provided to participants and beneficiaries under the plan.

`(5) AGREEMENTS WITH SERVICE PROVIDERS- A copy of any agreements between the plan and contract administrators and other service providers.

`(6) FUNDING REPORT- In the case of association health plans providing benefits options in addition to health insurance coverage, a report setting forth information with respect to such additional benefit options determined as of a date within the 120-day period ending with the date of the application, including the following:

`(A) RESERVES- A statement, certified by the board of trustees of the plan, and a statement of actuarial opinion, signed by a qualified actuary, that all applicable requirements of section 806 are or will be met in accordance with regulations which the applicable authority shall prescribe through negotiated rulemaking.

`(B) ADEQUACY OF CONTRIBUTION RATES- A statement of actuarial opinion, signed by a qualified actuary, which sets forth a description of the extent to which contribution rates are adequate to provide for the payment of all obligations and the maintenance of required reserves under the plan for the 12-month period beginning with such date within such 120-day period, taking into account the expected coverage and experience of the plan. If the contribution rates are not fully adequate, the statement of actuarial opinion shall indicate the extent to which the rates are inadequate and the changes needed to ensure adequacy.

`(C) CURRENT AND PROJECTED VALUE OF ASSETS AND LIABILITIES- A statement of actuarial opinion signed by a qualified actuary, which sets forth the current value of the assets and liabilities accumulated under the plan and a projection of the assets, liabilities, income, and expenses of the plan for the 12-month period referred to in subparagraph (B). The income statement shall identify separately the plan's administrative expenses and claims.

`(D) COSTS OF COVERAGE TO BE CHARGED AND OTHER EXPENSES- A statement of the costs of coverage to be charged, including an itemization of amounts for administration, reserves, and other expenses associated with the operation of the plan.

`(E) OTHER INFORMATION- Any other information as may be determined by the applicable authority, by regulation through negotiated rulemaking, as necessary to carry out the purposes of this part.

`(c) Filing Notice of Certification With States- A certification granted under this part to an association health plan shall not be effective unless written notice of such certification is filed with the applicable State authority of each State in which at least 25 percent of the participants and beneficiaries under the plan are located. For purposes of this subsection, an individual shall be considered to be located in the State in which a known address of such individual is located or in which such individual is employed.

`(d) Notice of Material Changes- In the case of any association health plan certified under this part, descriptions of material changes in any information which was required to be submitted with the application for the certification under this part shall be filed in such form and manner as shall be prescribed by the applicable authority by regulation through negotiated rulemaking. The applicable authority may require by regulation, through negotiated rulemaking, prior notice of material changes with respect to specified matters which might serve as the basis for suspension or revocation of the certification.

`(e) Reporting Requirements for Certain Association Health Plans- An association health plan certified under this part which provides benefit options in addition to health insurance coverage for such plan year shall meet the requirements of section 103 by filing an annual report under such section which shall include information described in subsection (b)(6) with respect to the plan year and, notwithstanding section 104(a)(1)(A), shall be filed with the applicable authority not later than 90 days after the close of the plan year (or on such later date as may be prescribed by the applicable authority). The applicable authority may require by regulation through negotiated rulemaking such interim reports as it considers appropriate.

`(f) Engagement of Qualified Actuary- The board of trustees of each association health plan which provides benefits options in addition to health insurance coverage and which is applying for certification under this part or is certified under this part shall engage, on behalf of all participants and beneficiaries, a qualified actuary who shall be responsible for the preparation of the materials comprising information necessary to be submitted by a qualified actuary under this part. The qualified actuary shall utilize such assumptions and techniques as are necessary to enable such actuary to form an opinion as to whether the contents of the matters reported under this part--

`(1) are in the aggregate reasonably related to the experience of the plan and to reasonable expectations; and

`(2) represent such actuary's best estimate of anticipated experience under the plan.

The opinion by the qualified actuary shall be made with respect to, and shall be made a part of, the annual report.

`SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

`Except as provided in section 809(b), an association health plan which is or has been certified under this part may terminate (upon or at any time after cessation of accruals in benefit liabilities) only if the board of trustees--

`(1) not less than 60 days before the proposed termination date, provides to the participants and beneficiaries a written notice of intent to terminate stating that such termination is intended and the proposed termination date;

`(2) develops a plan for winding up the affairs of the plan in connection with such termination in a manner which will result in timely payment of all benefits for which the plan is obligated; and

`(3) submits such plan in writing to the applicable authority.

Actions required under this section shall be taken in such form and manner as may be prescribed by the applicable authority by regulation through negotiated rulemaking.

`SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

`(a) Actions To Avoid Depletion of Reserves- An association health plan which is certified under this part and which provides benefits other than health insurance coverage shall continue to meet the requirements of section 806, irrespective of whether such certification continues in effect. The board of trustees of such plan shall determine quarterly whether the requirements of section 806 are met. In any case in which the board determines that there is reason to believe that there is or will be a failure to meet such requirements, or the applicable authority makes such a determination and so notifies the board, the board shall immediately notify the qualified actuary engaged by the plan, and such actuary shall, not later than the end of the next following month, make such recommendations to the board for corrective action as the actuary determines necessary to ensure compliance with section 806. Not later than 30 days after receiving from the actuary recommendations for corrective actions, the board shall notify the applicable authority (in such form and manner as the applicable authority may prescribe by regulation through negotiated rulemaking) of such recommendations of the actuary for corrective action, together with a description of the actions (if any) that the board has taken or plans to take in response to such recommendations. The board shall thereafter report to the applicable authority, in such form and frequency as the applicable authority may specify to the board, regarding corrective action taken by the board until the requirements of section 806 are met.

`(b) Mandatory Termination- In any case in which--

`(1) the applicable authority has been notified under subsection (a) of a failure of an association health plan which is or has been certified under this part and is described in section 806(a)(2) to meet the requirements of section 806 and has not been notified by the board of trustees of the plan that corrective action has restored compliance with such requirements; and

`(2) the applicable authority determines that there is a reasonable expectation that the plan will continue to fail to meet the requirements of section 806,

the board of trustees of the plan shall, at the direction of the applicable authority, terminate the plan and, in the course of the termination, take such actions as the applicable authority may require, including satisfying any claims referred to in section 806(a)(2)(B)(iii) and recovering for the plan any liability under subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure that the affairs of the plan will be, to the maximum extent possible, wound up in a manner which will result in timely provision of all benefits for which the plan is obligated.

`SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION HEALTH PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH INSURANCE COVERAGE.

`(a) Appointment of Secretary as Trustee for Insolvent Plans- Whenever the Secretary determines that an association health plan which is or has been certified under this part and which is described in section 806(a)(2) will be unable to provide benefits when due or is otherwise in a financially hazardous condition, as shall be defined by the Secretary by regulation through negotiated rulemaking, the Secretary shall, upon notice to the plan, apply to the appropriate United States district court for appointment of the Secretary as trustee to administer the plan for the duration of the insolvency. The plan may appear as a party and other interested persons may intervene in the proceedings at the discretion of the court. The court shall appoint such Secretary trustee if the court determines that the trusteeship is necessary to protect the interests of the participants and beneficiaries or providers of medical care or to avoid any unreasonable deterioration of the financial condition of the plan. The trusteeship of such Secretary shall continue until the conditions described in the first sentence of this subsection are remedied or the plan is terminated.

`(b) Powers as Trustee- The Secretary, upon appointment as trustee under subsection (a), shall have the power--

`(1) to do any act authorized by the plan, this title, or other applicable provisions of law to be done by the plan administrator or any trustee of the plan;

`(2) to require the transfer of all (or any part) of the assets and records of the plan to the Secretary as trustee;

`(3) to invest any assets of the plan which the Secretary holds in accordance with the provisions of the plan, regulations prescribed by the Secretary through negotiated rulemaking, and applicable provisions of law;

`(4) to require the sponsor, the plan administrator, any participating employer, and any employee organization representing plan participants to furnish any information with respect to the plan which the Secretary as trustee may reasonably need in order to administer the plan;

`(5) to collect for the plan any amounts due the plan and to recover reasonable expenses of the trusteeship;

`(6) to commence, prosecute, or defend on behalf of the plan any suit or proceeding involving the plan;

`(7) to issue, publish, or file such notices, statements, and reports as may be required by the Secretary by regulation through negotiated rulemaking or required by any order of the court;

`(8) to terminate the plan (or provide for its termination accordance with section 809(b)) and liquidate the plan assets, to restore the plan to the responsibility of the sponsor, or to continue the trusteeship;

`(9) to provide for the enrollment of plan participants and beneficiaries under appropriate coverage options; and

`(10) to do such other acts as may be necessary to comply with this title or any order of the court and to protect the interests of plan participants and beneficiaries and providers of medical care.

`(c) Notice of Appointment- As soon as practicable after the Secretary's appointment as trustee, the Secretary shall give notice of such appointment to--

`(1) the sponsor and plan administrator;

`(2) each participant;

`(3) each participating employer; and

`(4) if applicable, each employee organization which, for purposes of collective bargaining, represents plan participants.

`(d) Additional Duties- Except to the extent inconsistent with the provisions of this title, or as may be otherwise ordered by the court, the Secretary, upon appointment as trustee under this section, shall be subject to the same duties as those of a trustee under section 704 of title 11, United States Code, and shall have the duties of a fiduciary for purposes of this title.

`(e) Other Proceedings- An application by the Secretary under this subsection may be filed notwithstanding the pendency in the same or any other court of any bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any proceeding to reorganize, conserve, or liquidate such plan or its property, or any proceeding to enforce a lien against property of the plan.

`(f) Jurisdiction of Court-

`(1) IN GENERAL- Upon the filing of an application for the appointment as trustee or the issuance of a decree under this section, the court to which the application is made shall have exclusive jurisdiction of the plan involved and its property wherever located with the powers, to the extent consistent with the purposes of this section, of a court of the United States having jurisdiction over cases under chapter 11 of title 11, United States Code. Pending an adjudication under this section such court shall stay, and upon appointment by it of the Secretary as trustee, such court shall continue the stay of, any pending mortgage foreclosure, equity receivership, or other proceeding to reorganize, conserve, or liquidate the plan, the sponsor, or property of such plan or sponsor, and any other suit against any receiver, conservator, or trustee of the plan, the sponsor, or property of the plan or sponsor. Pending such adjudication and upon the appointment by it of the Secretary as trustee, the court may stay any proceeding to enforce a lien against property of the plan or the sponsor or any other suit against the plan or the sponsor.

`(2) VENUE- An action under this section may be brought in the judicial district where the sponsor or the plan administrator resides or does business or where any asset of the plan is situated. A district court in which such action is brought may issue process with respect to such action in any other judicial district.

`(g) Personnel- In accordance with regulations which shall be prescribed by the Secretary through negotiated rulemaking, the Secretary shall appoint, retain, and compensate accountants, actuaries, and other professional service personnel as may be necessary in connection with the Secretary's service as trustee under this section.

`SEC. 811. STATE ASSESSMENT AUTHORITY.

`(a) In General- Notwithstanding section 514, a State may impose by law a contribution tax on an association health plan described in section 806(a)(2), if the plan commenced operations in such State after the date of the enactment of the Small Business Access and Choice for Entrepreneurs Act of 2007.

`(b) Contribution Tax- For purposes of this section, the term `contribution tax' imposed by a State on an association health plan means any tax imposed by such State if--

`(1) such tax is computed by applying a rate to the amount of premiums or contributions, with respect to individuals covered under the plan who are residents of such State, which are received by the plan from participating employers located in such State or from such individuals;

`(2) the rate of such tax does not exceed the rate of any tax imposed by such State on premiums or contributions received by insurers or health maintenance organizations for health insurance coverage offered in such State in connection with a group health plan;

`(3) such tax is otherwise nondiscriminatory; and

`(4) the amount of any such tax assessed on the plan is reduced by the amount of any tax or assessment otherwise imposed by the State on premiums, contributions, or both received by insurers or health maintenance organizations for health insurance coverage, aggregate excess/stop loss insurance (as defined in section 806(g)(1)), specific excess/stop loss insurance (as defined in section 806(g)(2)), other insurance related to the provision of medical care