To amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage.

I 118TH CONGRESS 1ST SESSION H. R. 77 To amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage. IN THE HOUSE OF REPRESENTATIVES JANUARY 9, 2023 Mr. BIGGS introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. COOPERATIVE GOVERNING OF INDIVIDUAL 3 HEALTH INSURANCE COVERAGE. 4 (a) IN GENERAL.—Title XXVII of the Public Health 5 Service Act (42 U.S.C. 300gg et seq.) is amended by add- 6 ing at the end the following new part: 7 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 77 IH ‘‘PART E—COOPERATIVE GOVERNING OF 1 INDIVIDUAL HEALTH INSURANCE COVERAGE 2 ‘‘SEC. 2799E–1. DEFINITIONS. 3 ‘‘In this part: 4 ‘‘(1) PRIMARY STATE.—The term ‘primary 5 State’ means, with respect to individual health insur- 6 ance coverage offered by a health insurance issuer, 7 the State designated by the issuer as the State 8 whose covered laws shall govern the health insurance 9 issuer in the sale of such coverage under this part. 10 An issuer, with respect to a particular policy, may 11 only designate one such State as its primary State 12 with respect to all such coverage it offers. Such an 13 issuer may not change the designated primary State 14 with respect to individual health insurance coverage 15 once the policy is issued, except that such a change 16 may be made upon renewal of the policy. With re- 17 spect to such designated State, the issuer is deemed 18 to be doing business in that State. 19 ‘‘(2) SECONDARY STATE.—The term ‘secondary 20 State’ means, with respect to individual health insur- 21 ance coverage offered by a health insurance issuer, 22 any State that is not the primary State. In the case 23 of a health insurance issuer that is selling a policy 24 in, or to a resident of, a secondary State, the issuer 25 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 77 IH is deemed to be doing business in that secondary 1 State. 2 ‘‘(3) HEALTH INSURANCE ISSUER.—The term 3 ‘health insurance issuer’ has the meaning given such 4 term in section 2791(b)(2), except that such an 5 issuer must be licensed in the primary State and be 6 qualified to sell individual health insurance coverage 7 in that State. 8 ‘‘(4) INDIVIDUAL HEALTH INSURANCE COV- 9 ERAGE.—The term ‘individual health insurance cov- 10 erage’ means health insurance coverage offered in 11 the individual market, as defined in section 12 2791(e)(1). 13 ‘‘(5) APPLICABLE STATE AUTHORITY.—The 14 term ‘applicable State authority’ means, with respect 15 to a health insurance issuer in a State, the State in- 16 surance commissioner or official or officials des- 17 ignated by the State to enforce the requirements of 18 this title for the State with respect to the issuer. 19 ‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 20 term ‘hazardous financial condition’ means that, 21 based on its present or reasonably anticipated finan- 22 cial condition, a health insurance issuer is unlikely 23 to be able— 24 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 77 IH ‘‘(A) to meet obligations to policyholders 1 with respect to known claims and reasonably 2 anticipated claims; or 3 ‘‘(B) to pay other obligations in the normal 4 course of business. 5 ‘‘(7) COVERED LAWS.— 6 ‘‘(A) IN GENERAL.—The term ‘covered 7 laws’ means the laws, rules, regulations, agree- 8 ments, and orders governing the insurance busi- 9 ness pertaining to— 10 ‘‘(i) individual health insurance cov- 11 erage issued by a health insurance issuer; 12 ‘‘(ii) the offer, sale, rating (including 13 medical underwriting), renewal, and 14 issuance of individual health insurance cov- 15 erage to an individual; 16 ‘‘(iii) the provision to an individual in 17 relation to individual health insurance cov- 18 erage of health care and insurance related 19 services; 20 ‘‘(iv) the provision to an individual in 21 relation to individual health insurance cov- 22 erage of management, operations, and in- 23 vestment activities of a health insurance 24 issuer; and 25 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 77 IH ‘‘(v) the provision to an individual in 1 relation to individual health insurance cov- 2 erage of loss control and claims adminis- 3 tration for a health insurance issuer with 4 respect to liability for which the issuer pro- 5 vides insurance. 6 ‘‘(B) EXCEPTION.—Such term does not in- 7 clude any law, rule, regulation, agreement, or 8 order governing the use of care or cost manage- 9 ment techniques, including any requirement re- 10 lated to provider contracting, network access or 11 adequacy, health care data collection, or quality 12 assurance. 13 ‘‘(8) STATE.—The term ‘State’ means the 50 14 States and includes the District of Columbia, Puerto 15 Rico, the Virgin Islands, Guam, American Samoa, 16 and the Northern Mariana Islands. 17 ‘‘(9) UNFAIR CLAIMS SETTLEMENT PRAC- 18 TICES.—The term ‘unfair claims settlement prac- 19 tices’ means only the following practices: 20 ‘‘(A) Knowingly misrepresenting to claim- 21 ants and insured individuals relevant facts or 22 policy provisions relating to coverage at issue. 23 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 77 IH ‘‘(B) Failing to acknowledge with reason- 1 able promptness pertinent communications with 2 respect to claims arising under policies. 3 ‘‘(C) Failing to adopt and implement rea- 4 sonable standards for the prompt investigation 5 and settlement of claims arising under policies. 6 ‘‘(D) Failing to effectuate prompt, fair, 7 and equitable settlement of claims submitted in 8 which liability has become reasonably clear. 9 ‘‘(E) Refusing to pay claims without con- 10 ducting a reasonable investigation. 11 ‘‘(F) Failing to affirm or deny coverage of 12 claims within a reasonable period of time after 13 having completed an investigation related to 14 those claims. 15 ‘‘(G) A pattern or practice of compelling 16 insured individuals or their beneficiaries to in- 17 stitute suits to recover amounts due under its 18 policies by offering substantially less than the 19 amounts ultimately recovered in suits brought 20 by them. 21 ‘‘(H) A pattern or practice of attempting 22 to settle or settling claims for less than the 23 amount that a reasonable person would believe 24 the insured individual or his or her beneficiary 25 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 77 IH was entitled by reference to written or printed 1 advertising material accompanying or made 2 part of an application. 3 ‘‘(I) Attempting to settle or settling claims 4 on the basis of an application that was materi- 5 ally altered without notice to, or knowledge or 6 consent of, the insured. 7 ‘‘(J) Failing to provide forms necessary to 8 present claims within 15 calendar days of a re- 9 quest with reasonable explanations regarding 10 their use. 11 ‘‘(K) Attempting to cancel a policy in less 12 time than that prescribed in the policy or by the 13 law of the primary State. 14 ‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 15 and abuse’ means an act or omission committed by 16 a person who, knowingly and with intent to defraud, 17 commits, or conceals any material information con- 18 cerning, one or more of the following: 19 ‘‘(A) Presenting, causing to be presented 20 or preparing with knowledge or belief that it 21 will be presented to or by an insurer, a rein- 22 surer, broker or its agent, false information as 23 part of, in support of or concerning a fact ma- 24 terial to one or more of the following: 25 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 77 IH ‘‘(i) An application for the issuance or 1 renewal of an insurance policy or reinsur- 2 ance contract. 3 ‘‘(ii) The rating of an insurance policy 4 or reinsurance contract. 5 ‘‘(iii) A claim for payment or benefit 6 pursuant to an insurance policy or reinsur- 7 ance contract. 8 ‘‘(iv) Premiums paid on an insurance 9 policy or reinsurance contract. 10 ‘‘(v) Payments made in accordance 11 with the terms of an insurance policy or 12 reinsurance contract. 13 ‘‘(vi) A document filed with the com- 14 missioner or the chief insurance regulatory 15 official of another jurisdiction. 16 ‘‘(vii) The financial condition of an in- 17 surer or reinsurer. 18 ‘‘(viii) The formation, acquisition, 19 merger, reconsolidation, dissolution or 20 withdrawal from one or more lines of in- 21 surance or reinsurance in all or part of a 22 State by an insurer or reinsurer. 23 ‘‘(ix) The issuance of written evidence 24 of insurance. 25 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 77 IH ‘‘(x) The reinstatement of an insur- 1 ance policy. 2 ‘‘(B) Solicitation or acceptance of new or 3 renewal insurance risks on behalf of an insurer, 4 reinsurer, or other person engaged in the busi- 5 ness of insurance by a person who knows or 6 should know that the insurer or other person 7 responsible for the risk is insolvent at the time 8 of the transaction. 9 ‘‘(C) Transaction of the business of insur- 10 ance in violation of laws requiring a license, cer- 11 tificate of authority or other legal authority for 12 the transaction of the business of insurance. 13 ‘‘(D) Attempt to commit, aiding or abet- 14 ting in the commission of, or conspiracy to com- 15 mit the acts or omissions specified in this para- 16 graph. 17 ‘‘SEC. 2799E–2. APPLICATION OF LAW. 18 ‘‘(a) IN GENERAL.—The covered laws of the primary 19 State shall apply to individual health insurance coverage 20 offered by a health insurance issuer in the primary State 21 and in any secondary State, but only if the coverage and 22 issuer comply with the conditions of this section with re- 23 spect to the offering of coverage in any secondary State. 24 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 77 IH ‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC- 1 ONDARY STATE.—Except as provided in this section, a 2 health insurance issuer with respect to its offer, sale, rat- 3 ing (including medical underwriting), renewal, and 4 issuance of individual health insurance coverage in any 5 secondary State is exempt from any covered laws of the 6 secondary State (and any rules, regulations, agreements, 7 or orders sought or issued by such State under or related 8 to such covered laws) to the extent that such laws would— 9 ‘‘(1) make unlawful, or regulate, directly or in- 10 directly, the operation of the health insurance issuer 11 operating in the secondary State, except that any 12 secondary State may require such an issuer— 13 ‘‘(A) to pay, on a nondiscriminatory basis, 14 applicable premium and other taxes (including 15 high risk pool assessments) which are levied on 16 insurers and surplus lines insurers, brokers, or 17 policyholders under the laws of the State; 18 ‘‘(B) to register with and designate the 19 State insurance commissioner as its agent solely 20 for the purpose of receiving service of legal doc- 21 uments or process; 22 ‘‘(C) to submit to an examination of its fi- 23 nancial condition by the State insurance com- 24 missioner in any State in which the issuer is 25 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 77 IH doing business to determine the issuer’s finan- 1 cial condition, if— 2 ‘‘(i) the State insurance commissioner 3 of the primary State has not done an ex- 4 amination within the period recommended 5 by the National Association of Insurance 6 Commissioners; and 7 ‘‘(ii) any such examination is con- 8 ducted in accordance with the examiners’ 9 handbook of the National Association of 10 Insurance Commissioners and is coordi- 11 nated to avoid unjustified duplication and 12 unjustified repetition; 13 ‘‘(D) to comply with a lawful order 14 issued— 15 ‘‘(i) in a delinquency proceeding com- 16 menced by the State insurance commis- 17 sioner if there has been a finding of finan- 18 cial impairment under subparagraph (C); 19 or 20 ‘‘(ii) in a voluntary dissolution pro- 21 ceeding; 22 ‘‘(E) to comply with an injunction issued 23 by a court of competent jurisdiction, upon a pe- 24 tition by the State insurance commissioner al- 25 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 77 IH leging that the issuer is in hazardous financial 1 condition; 2 ‘‘(F) to participate, on a nondiscriminatory 3 basis, in any insurance insolvency guaranty as- 4 sociation or similar association to which a 5 health insurance issuer in the State is required 6 to belong; 7 ‘‘(G) to comply with any State law regard- 8 ing fraud and abuse (as defined in section 9 2799E–1(10)), except that if the State seeks an 10 injunction regarding the conduct described in 11 this subparagraph, such injunction must be ob- 12 tained from a court of competent jurisdiction; 13 ‘‘(H) to comply with any State law regard- 14 ing unfair claims settlement practices (as de- 15 fined in section 2799E–1(9)); or 16 ‘‘(I) to comply with the applicable require- 17 ments for independent review under section 18 2799E–4 with respect to coverage offered in the 19 State; 20 ‘‘(2) require any individual health insurance 21 coverage issued by the issuer to be countersigned by 22 an insurance agent or broker residing in that Sec- 23 ondary State; or 24 VerDate Sep 11 2014 01:41 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H77.IH H77 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •HR 77 IH ‘‘(3) otherwise discriminate against the issuer 1 issuing insurance in both the primary State and in 2 any secondary State. 3 ‘‘(c) CLEAR AND CONSPICUOUS DISCLOSURE.—A 4 health insurance issuer shall provide the follo [Text truncated for display. 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