ERISA Clarification Act of 2007

110th CONGRESS

1st Session

S. nnn

 

To restore to members of employee health benefit plans subject to ERISA, many of the legal rights available to persons not subject to ERISA.

IN THE SENATE OF THE UNITED STATES

mm dd, 2007

Mr. XXXXXXX introduced the following bill;

 

A BILL

To restore to members of employee health benefit plans subject to ERISA, many of the legal rights available to persons not subject to ERISA.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `ERISA Clarification Act of 2007'.

Sec. 100: Findings and Sense of Congress

 

(a) The purpose of the Employee Retirement Income Retirement Act of 1974 was, from the very beginning, to safeguard employee benefits and, to the extent necessary to do so, to protect the assets of the employee benefit plans so that they could continue to provide those benefits.

 

(b) The purpose of ERISA's preemption of state law was to protect employee benefits by limiting depletion of the assets of employee benefit plans. The purpose was not to limit employee benefits, nor to protect the assets of organizations other than employee benefit plans from meritorious claims by employees. Unfortunately, in its response to the changing realities of the modern health care system, the implementation of ERISA has gone conspicuously astray from its original intent. The de facto immunity that the law now confers upon insurers and utilization review providers associated with such plans deprives the more than 50% of American workers who receive their health insurance through an ERISA-governed plan of the medical security in a crisis which is the very reason that people seek health insurance.

 

(c) Though moved by the tragic circumstances and needless loss of life in some cases, many federal judges have reluctantly concluded that ERISA gives them no choice but to deny patients the justice they deserve.

 

(d) The purpose of this bill is to reemphasize ERISA's original purposes, and to redirect the attention of the courts to these goals.

 

Sec. 101: Definition of "Benefits due under the terms of the plan":

 

Subparagraph (C) is added to Paragraph (1) of Subsection 1132(a) of Title 29, U.S. Code, to read as follows:

`(i) "Regulated Insurer" shall mean a health insurer or managed health care provider regulated under the laws of the State in which the covered employee resides.

 

(ii) "Insured Health Plan" shall mean an employee benefit plan which purchases health insurance for its enrollees from a regulated insurer, regardless of ownership of the insurer.

 

(iii) "Self-insured Health Plan" shall mean an employee benefit plan which does not purchase health insurance for its enrollees, but assumes the insurance risk itself..

 

(iv) "Benefits due under the terms of the plan" for an Insured Health Plan shall mean the timely payment of the premium to the regulated insurer. Disputes concerning provision of or payment for specific medical services shall be resolved between the enrollee and the regulated insurer under the laws of the State in which the covered employee resides.

 

(v) "Benefits due under the terms of the plan" for a Self-insured Health Plan shall mean the provision of or payment for medical services and other benefits as specified in the plan documents made available to enrollees, as well as claims handling procedures compliant with both federal laws and those of the State in which the covered employee resides.

 

Sec. 102: Definition of "Equitable Relief":

 

Subparagraph (C) is added to Paragraph (3) of Subsection 1132(a) of Title 29, U.S. Code, to read as follows:

 

`1132(a)(3)(C) "Equitable relief" as used herein shall include all traditional equitable remedies, including, but not limited to, injunction, restitution, disgorgement, and make-whole compensatory relief for consequential injury.'

 

Sec. 103: Standard of Review:

 

Paragraph (10) is added to Subsection 1132(a) of Title 29, U.S. Code, to read as follows:

 

`1132(a)(10) In any civil action brought under this section, interpretation of the plan and decisions of the plan administrator will be subject to de novo review by the reviewing court. The court may consider any evidence it deems to be necessary to an evaluation of the merits of the underlying dispute, and no evidence shall be deemed inadmissible merely because it was not tendered to the plan administrator during the claims administration process.'

 

 

Sec. 104: Jurisdiction:

 

Paragraph (1) of Subsection 1132(e) of Title 29, U.S. Code, is amended to read as follows:

 

`1132(e)(1)

(A) Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, fiduciary, or any person referred to in section 1021 (f)(1) of this title.

(B) State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions under paragraphs (a)(1)(B) of this section in actions in which the employee benefit plan is a defendant, and under paragraph (a)(7) of this section.

(C) Unless diversity jurisdiction shall apply, State courts of competent jurisdiction shall have exclusive jurisdiction of actions under paragraph (a)(1)(B) of this section in actions under State law in which employees or contractors of the plan are defendants, but the employee benefit plan is not a defendant.

(D) Plan funds may not be used to indemnify non-plan defendants.'

 

Sec. 105: Supersedure:

 

Subsection (a) of Section 1144 of Title 29, U.S. Code is amended to read as follows:

`1144(a) Supersedure; effective date

(1) Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter act to directly decrease the assets of any funded employee benefit plan regulated by ERISA, or conflict with said provisions.

(2) Nothing in this Act shall be interpreted to supersede or pre-empt any State law or regulation affecting individuals or organizations which are employed by, contract with, or provide insurance services to any employee benefit plan, unless the effect of such laws or regulations would be to directly decrease the assets of a funded employee benefit plan regulated by ERISA.

(3) This section shall take effect on January 1, 2008.'

 

Sec. 106: Vesting:

Subsection (f) is added to Section 1053 of Title 29, U.S. Code to read as follows.

 

`1053(f) Nonforfeitability of Health Benefits

 

Each health benefit plan shall provide that health benefits in effect at the time an employee contracts a disease or medical condition, which are required for the medical care of that disease or medical condition, may not be forfeited or lowered by amendment or otherwise for the duration of that disease or medical condition. For purposes of calculating duration, recurrence of a disease shall be considered a continuation of the initial disease.'

 

 

 

Sec. 107: Fiduciary Liability:

 

Subsection (a) of Section 1109 of Title 29, U.S. Code is amended to read as follows:

`1109. Liability for breach of fiduciary duty

 

(a) Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to the plan or affected beneficiary any losses to the plan or affected beneficiary resulting from each such breach, and to restore to such plan or affected beneficiary any profits of such fiduciary which have been made through the fiduciary's use of assets of the plan or improper withholding of benefits from the beneficiary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary. A fiduciary may also be removed for a violation of section 1111 of this title by a federal court.'