SEC. 2701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING CONDITION
EXCLUSIONS.
Title[ Title I\Subtitle A\Sec. 102 Contents
<<NOTE: 42 USC 300gg.>>
``(a) Limitation on Preexisting Condition Exclusion Period;
Crediting for Periods of Previous Coverage.--Subject to subsection (d),
a group health plan, and a health insurance issuer offering group health
insurance coverage, may, with respect to a participant or beneficiary,
impose a preexisting condition exclusion only if--
``(1) such exclusion relates to a condition (whether
physical or mental), regardless of the cause of the condition,
for which medical advice, diagnosis, care, or treatment was
recommended or received within the 6-month period ending on the
enrollment date;
``(2) such exclusion extends for a period of not more than
12 months (or 18 months in the case of a late enrollee) after
the enrollment date; and
``(3) the period of any such preexisting condition exclusion
is reduced by the aggregate of the periods of creditable
coverage (if any, as defined in subsection (c)(1)) applicable to
the participant or beneficiary as of the enrollment date.
``(b) Definitions.--For purposes of this part--
``(1) Preexisting condition exclusion.--
``(A) In general.--The term `preexisting condition
exclusion' means, with respect to coverage, a limitation
or exclusion of benefits relating to a condition based
on the fact that the condition was present before the
date of enrollment for such coverage, whether or not any
medical advice, diagnosis, care, or treatment was
recommended or received before such date.
``(B) Treatment of genetic information.--Genetic
information shall not be treated as a condition
described in subsection (a)(1) in the absence of a
diagnosis of the condition related to such information.
``(2) Enrollment date.--The term `enrollment date' means,
with respect to an individual covered under a group health plan
or health insurance coverage, the date of enrollment of the
individual in the plan or coverage or, if earlier, the first day
of the waiting period for such enrollment.
``(3) Late enrollee.--The term `late enrollee' means, with
respect to coverage under a group health plan, a participant or
beneficiary who enrolls under the plan other than during--
``(A) the first period in which the individual is
eligible to enroll under the plan, or
``(B) a special enrollment period under subsection
(f).
``(4) Waiting period.--The term `waiting period' means, with
respect to a group health plan and an individual who is a
potential participant or beneficiary in the plan, the period
that must pass with respect to the individual before the
individual is eligible to be covered for benefits under the
terms of the plan.
``(c) Rules Relating to Crediting Previous Coverage.--
``(1) Creditable coverage defined.--For purposes of this
title, the term `creditable coverage' means, with respect to an
individual, coverage of the individual under any of the
following:
``(A) A group health plan.
``(B) Health insurance coverage.
``(C) Part A or part B of title XVIII of the Social
Security Act.
``(D) Title XIX of the Social Security Act, other
than coverage consisting solely of benefits under
section 1928.
``(E) Chapter 55 of title 10, United States Code.
``(F) A medical care program of the Indian Health
Service or of a tribal organization.
``(G) A State health benefits risk pool.
``(H) A health plan offered under chapter 89 of
title 5, United States Code.
``(I) A public health plan (as defined in
regulations).
``(J) A health benefit plan under section 5(e) of
the Peace Corps Act (22 U.S.C. 2504(e)).
Such term does not include coverage consisting solely of
coverage of excepted benefits (as defined in section 2791(c)).
``(2) Not counting periods before significant breaks in
coverage.--
``(A) In general.--A period of creditable coverage
shall not be counted, with respect to enrollment of an
individual under a group health plan, if, after such
period and before the enrollment date, there was a 63-
day period during all of which the individual was not
covered under any creditable coverage.
``(B) Waiting period not treated as a break in
coverage.--For purposes of subparagraph (A) and
subsection (d)(4), any period that an individual is in a
waiting period for any coverage under a group health
plan (or for group health insurance coverage) or is in
an affiliation period (as defined in subsection (g)(2))
shall not be taken into account in determining the
continuous period under subparagraph (A).
``(3) Method of crediting coverage.--
``(A) Standard method.--Except as otherwise provided
under subparagraph (B), for purposes of applying
subsection (a)(3), a group health plan, and a health
insurance issuer offering group health insurance
coverage, shall count a period of creditable coverage
without regard to the specific benefits covered during
the period.
``(B) Election of alternative method.--A group
health plan, or a health insurance issuer offering group
health insurance, may elect to apply subsection (a)(3)
based on coverage of benefits within each of several
classes or categories of benefits specified in
regulations rather than as provided under subparagraph
(A). Such election shall be made on a uniform basis for
all participants and beneficiaries. Under such election
a group health plan or issuer shall count a period of
creditable coverage with respect to any class or
category of benefits if any level of benefits is covered
within such class or category.
``(C) Plan notice.--In the case of an election with
respect to a group health plan under subparagraph (B)
(whether or not health insurance coverage is provided in
connection with such plan), the plan shall--
``(i) prominently state in any disclosure
statements concerning the plan, and state to each
enrollee at the time of enrollment under the plan,
that the plan has made such election, and
``(ii) include in such statements a
description of the effect of this election.
``(D) Issuer notice.--In the case of an election
under subparagraph (B) with respect to health insurance
coverage offered by an issuer in the small or large
group market, the issuer--
``(i) shall prominently state in any
disclosure statements concerning the coverage, and
to each employer at the time of the offer or sale
of the coverage, that the issuer has made such
election, and
``(ii) shall include in such statements a
description of the effect of such election.
``(4) Establishment of period.--Periods of creditable
coverage with respect to an individual shall be established
through presentation of certifications described in subsection
(e) or in such other manner as may be specified in regulations.
``(d) Exceptions.--
``(1) Exclusion not applicable to certain newborns.--Subject
to paragraph (4), a group health plan, and a health insurance
issuer offering group health insurance coverage, may not impose
any preexisting condition exclusion in the case of an individual
who, as of the last day of the 30-day period beginning with the
date of birth, is covered under creditable coverage.
``(2) Exclusion not applicable to certain adopted
children.--Subject to paragraph (4), a group health plan, and a
health insurance issuer offering group health insurance
coverage, may not impose any preexisting condition exclusion in
the case of a child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-
day period beginning on the date of the adoption or placement
for adoption, is covered under creditable coverage. The previous
sentence shall not apply to coverage before the date of such
adoption or placement for adoption.
``(3) Exclusion not applicable to pregnancy.--A group health
plan, and health insurance issuer offering group health
insurance coverage, may not impose any preexisting condition
exclusion relating to pregnancy as a preexisting condition.
``(4) Loss if break in coverage.--Paragraphs (1) and (2)
shall no longer apply to an individual after the end of the
first 63-day period during all of which the individual was not
covered under any creditable coverage.
``(e) Certifications and Disclosure of Coverage.--
``(1) Requirement for certification of period of creditable
coverage.--
``(A) In general.--A group health plan, and a health
insurance issuer offering group health insurance
coverage, shall provide the certification described in
subparagraph (B)--
``(i) at the time an individual ceases to be
covered under the plan or otherwise becomes
covered under a COBRA continuation provision,
``(ii) in the case of an individual becoming
covered under such a provision, at the time the
individual ceases to be covered under such
provision, and
``(iii) on the request on behalf of an
individual made not later than 24 months after the
date of cessation of the coverage described in
clause (i) or (ii), whichever is later.
The certification under clause (i) may be provided, to
the extent practicable, at a time consistent with
notices required under any applicable COBRA continuation
provision.
``(B) Certification.--The certification described in
this subparagraph is a written certification of--
``(i) the period of creditable coverage of the
individual under such plan and the coverage (if
any) under such COBRA continuation provision, and
``(ii) the waiting period (if any) (and
affiliation period, if applicable) imposed with
respect to the individual for any coverage under
such plan.
``(C) Issuer compliance.--To the extent that medical
care under a group health plan consists of group health
insurance coverage, the plan is deemed to have satisfied
the certification requirement under this paragraph if
the health insurance issuer offering the coverage
provides for such certification in accordance with this
paragraph.
``(2) Disclosure of information on previous benefits.--In
the case of an election described in subsection (c)(3)(B) by a
group health plan or health insurance issuer, if the plan or
issuer enrolls an individual for coverage under the plan and the
individual provides a certification of coverage of the
individual under paragraph (1)--
``(A) upon request of such plan or issuer, the
entity which issued the certification provided by the
individual shall promptly disclose to such requesting
plan or issuer information on coverage of classes and
categories of health benefits available under such
entity's plan or coverage, and
``(B) such entity may charge the requesting plan or
issuer for the reasonable cost of disclosing such
information.
``(3) Regulations.--The Secretary shall establish rules to
prevent an entity's failure to provide information under
paragraph (1) or (2) with respect to previous coverage of an
individual from adversely affecting any subsequent coverage of
the individual under another group health plan or health
insurance coverage.
``(f) Special Enrollment Periods.--
``(1) Individuals losing other coverage.--A group health
plan, and a health insurance issuer offering group health
insurance coverage in connection with a group health plan, shall
permit an employee who is eligible, but not enrolled, for
coverage under the terms of the plan (or a dependent of such an
employee if the dependent is eligible, but not enrolled, for
coverage under such terms) to enroll for coverage under the
terms of the plan if each of the following conditions is met:
``(A) The employee or dependent was covered under a
group health plan or had health insurance coverage at
the time coverage was previously offered to the employee
or dependent.
``(B) The employee stated in writing at such time
that coverage under a group health plan or health
insurance coverage was the reason for declining
enrollment, but only if the plan sponsor or issuer (if
applicable) required such a statement at such time and
provided the employee with notice of such requirement
(and the consequences of such requirement) at such time.
``(C) The employee's or dependent's coverage
described in subparagraph (A)--
``(i) was under a COBRA continuation provision
and the coverage under such provision was
exhausted; or
``(ii) was not under such a provision and
either the coverage was terminated as a result of
loss of eligibility for the coverage (including as
a result of legal separation, divorce, death,
termination of employment, or reduction in the
number of hours of employment) or employer
contributions toward such coverage were
terminated.
``(D) Under the terms of the plan, the employee
requests such enrollment not later than 30 days after
the date of exhaustion of coverage described in
subparagraph (C)(i) or termination of coverage or
employer contribution described in subparagraph (C)(ii).
``(2) For dependent beneficiaries.--
``(A) In general.--If--
``(i) a group health plan makes coverage
available with respect to a dependent of an
individual,
``(ii) the individual is a participant under
the plan (or has met any waiting period applicable
to becoming a participant under the plan and is
eligible to be enrolled under the plan but for a
failure to enroll during a previous enrollment
period), and
``(iii) a person becomes such a dependent of
the individual through marriage, birth, or
adoption or placement for adoption,
the group health plan shall provide for a dependent
special enrollment period described in subparagraph (B)
during which the person (or, if not otherwise enrolled,
the individual) may be enrolled under the plan as a
dependent of the individual, and in the case of the
birth or adoption of a child, the spouse of the
individual may be enrolled as a dependent of the
individual if such spouse is otherwise eligible for
coverage.
``(B) Dependent special enrollment period.--A
dependent special enrollment period under this
subparagraph shall be a period of not less than 30 days
and shall begin on the later of--
``(i) the date dependent coverage is made
available, or
``(ii) the date of the marriage, birth, or
adoption or placement for adoption (as the case
may be) described in subparagraph (A)(iii).
``(C) No waiting period.--If an individual seeks to
enroll a dependent during the first 30 days of such a
dependent special enrollment period, the coverage of the
dependent shall become effective--
``(i) in the case of marriage, not later than
the first day of the first month beginning after
the date the completed request for enrollment is
received;
``(ii) in the case of a dependent's birth, as
of the date of such birth; or
``(iii) in the case of a dependent's adoption
or placement for adoption, the date of such
adoption or placement for adoption.
``(g) Use of Affiliation Period by HMOs as Alternative to
Preexisting Condition Exclusion.--
``(1) In general.--A health maintenance organization which
offers health insurance coverage in connection with a group
health plan and which does not impose any preexisting condition
exclusion allowed under subsection (a) with respect to any
particular coverage option may impose an affiliation period for
such coverage option, but only if--
``(A) such period is applied uniformly without
regard to any health status-related factors; and
``(B) such period does not exceed 2 months (or 3
months in the case of a late enrollee).
``(2) Affiliation period.--
``(A) Defined.--For purposes of this title, the term
`affiliation period' means a period which, under the
terms of the health insurance coverage offered by the
health maintenance organization, must expire before the
health insurance coverage becomes effective. The
organization is not required to provide health care
services or benefits during such period and no premium
shall be charged to the participant or beneficiary for
any coverage during the period.
``(B) Beginning.--Such period shall begin on the
enrollment date.
``(C) Runs concurrently with waiting periods.--An
affiliation period under a plan shall run concurrently
with any waiting period under the plan.
``(3) Alternative methods.--A health maintenance
organization described in paragraph (1) may use alternative
methods, from those described in such paragraph, to address
adverse selection as approved by the State insurance
commissioner or official or officials designated by the State to
enforce the requirements of this part for the State involved
with respect to such issuer.
``
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