[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3434 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 3434
To amend the Public Health Service Act to provide for cooperative
governing of individual health insurance coverage offered in interstate
commerce.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 11, 2025
Mrs. Blackburn introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Public Health Service Act to provide for cooperative
governing of individual health insurance coverage offered in interstate
commerce.
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 ``Health Coverage Across State Lines
Act''.
SEC. 2. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR ENACTMENT OF LAW.
This Act is enacted pursuant to the power granted Congress under
article I, section 8, clause 3, of the United States Constitution.
SEC. 3. FINDINGS.
Congress finds the following:
(1) The application of numerous and significant variations
in State law and the implementation of the Patient Protection
and Affordable Care Act impacts the ability of insurers to
offer, and individuals to obtain, affordable individual health
insurance coverage, thereby impeding commerce in individual
health insurance coverage.
(2) Mandates for health care coverage established by title
I of the Patient Protection and Affordable Care Act will
significantly elevate health insurance costs beyond State and
Federal ability to pay.
(3) Individual health insurance coverage is increasingly
offered through the internet, other electronic means, and by
mail, all of which are inherently part of interstate commerce.
(4) In response to these issues, it is appropriate to
encourage increased efficiency in the offering of individual
health insurance coverage through a collaborative approach by
the States in regulating this coverage.
(5) The establishment of risk-retention groups has provided
a successful model for the sale of insurance across State
lines, as the acts establishing those groups allow insurance to
be sold in multiple States but regulated by a single State.
SEC. 4. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE.
(a) In General.--Title XXVII of the Public Health Service Act (42
U.S.C. 300gg et seq.) is amended by adding at the end the following new
part:
``PART F--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE
``SEC. 2799C-1. DEFINITIONS.
``In this part:
``(1) Primary state.--The term `primary State' means, with
respect to individual health insurance coverage offered by a
health insurance issuer, the State designated by the issuer as
the State whose covered laws shall govern the health insurance
issuer in the sale of such coverage under this part. An issuer,
with respect to a particular policy, may only designate one
such State as its primary State with respect to all such
coverage it offers. Such an issuer may not change the
designated primary State with respect to individual health
insurance coverage once the policy is issued, except that such
a change may be made upon renewal of the policy. With respect
to such designated State, the issuer is deemed to be doing
business in that State.
``(2) Secondary state.--The term `secondary State' means,
with respect to individual health insurance coverage offered by
a health insurance issuer, any State that is not the primary
State. In the case of a health insurance issuer that is selling
a policy in, or to a resident of, a secondary State, the issuer
is deemed to be doing business in that secondary State.
``(3) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section 2791(b)(2),
except that such an issuer must be licensed in the primary
State and be qualified to sell individual health insurance
coverage in that State.
``(4) Individual health insurance coverage.--The term
`individual health insurance coverage' means health insurance
coverage offered in the individual market, as defined in
section 2791(e)(1).
``(5) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or official
or officials designated by the State to enforce the
requirements of this title for the State with respect to the
issuer.
``(6) Hazardous financial condition.--The term `hazardous
financial condition' means that, based on its present or
reasonably anticipated financial condition, a health insurance
issuer is unlikely to be able--
``(A) to meet obligations to policyholders with
respect to known claims and reasonably anticipated
claims; or
``(B) to pay other obligations in the normal course
of business.
``(7) Covered laws.--
``(A) In general.--The term `covered laws' means
the laws, rules, regulations, agreements, and orders
governing the insurance business pertaining to--
``(i) individual health insurance coverage
issued by a health insurance issuer;
``(ii) the offer, sale, rating (including
medical underwriting), renewal, and issuance of
individual health insurance coverage to an
individual;
``(iii) the provision to an individual in
relation to individual health insurance
coverage of health care and insurance related
services;
``(iv) the provision to an individual in
relation to individual health insurance
coverage of management, operations, and
investment activities of a health insurance
issuer; and
``(v) the provision to an individual in
relation to individual health insurance
coverage of loss control and claims
administration for a health insurance issuer
with respect to liability for which the issuer
provides insurance.
``(B) Exception.--Such term does not include any
law, rule, regulation, agreement, or order governing
the use of care or cost management techniques,
including any requirement related to provider
contracting, network access or adequacy, health care
data collection, or quality assurance.
``(8) State.--The term `State' means the 50 States and
includes the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana
Islands.
``(9) Unfair claims settlement practices.--The term `unfair
claims settlement practices' means only the following
practices:
``(A) Knowingly misrepresenting to claimants and
insured individuals relevant facts or policy provisions
relating to coverage at issue.
``(B) Failing to acknowledge with reasonable
promptness pertinent communications with respect to
claims arising under policies.
``(C) Failing to adopt and implement reasonable
standards for the prompt investigation and settlement
of claims arising under policies.
``(D) Failing to effectuate prompt, fair, and
equitable settlement of claims submitted in which
liability has become reasonably clear.
``(E) Refusing to pay claims without conducting a
reasonable investigation.
``(F) Failing to affirm or deny coverage of claims
within a reasonable period of time after having
completed an investigation related to those claims.
``(G) A pattern or practice of compelling insured
individuals or their beneficiaries to institute suits
to recover amounts due under its policies by offering
substantially less than the amounts ultimately
recovered in suits brought by them.
``(H) A pattern or practice of attempting to settle
or settling claims for less than the amount that a
reasonable person would believe the insured individual
or his or her beneficiary was entitled by reference to
written or printed advertising material accompanying or
made part of an application.
``(I) Attempting to settle or settling claims on
the basis of an application that was materially altered
without notice to, or knowledge or consent of, the
insured.
``(J) Failing to provide forms necessary to present
claims within 15 calendar days of a request with
reasonable explanations regarding their use.
``(K) Attempting to cancel a policy in less time
than that prescribed in the policy or by the law of the
primary State.
``(10) Fraud and abuse.--The term `fraud and abuse' means
an act or omission committed by a person who, knowingly and
with intent to defraud, commits, or conceals any material
information concerning, one or more of the following:
``(A) Presenting, causing to be presented or
preparing with knowledge or belief that it will be
presented to or by an insurer, a reinsurer, broker or
its agent, false information as part of, in support of
or concerning a fact material to one or more of the
following:
``(i) An application for the issuance or
renewal of an insurance policy or reinsurance
contract.
``(ii) The rating of an insurance policy or
reinsurance contract.
``(iii) A claim for payment or benefit
pursuant to an insurance policy or reinsurance
contract.
``(iv) Premiums paid on an insurance policy
or reinsurance contract.
``(v) Payments made in accordance with the
terms of an insurance policy or reinsurance
contract.
``(vi) A document filed with the
commissioner or the chief insurance regulatory
official of another jurisdiction.
``(vii) The financial condition of an
insurer or reinsurer.
``(viii) The formation, acquisition,
merger, reconsolidation, dissolution or
withdrawal from one or more lines of insurance
or reinsurance in all or part of a State by an
insurer or reinsurer.
``(ix) The issuance of written evidence of
insurance.
``(x) The reinstatement of an insurance
policy.
``(B) Solicitation or acceptance of new or renewal
insurance risks on behalf of an insurer, reinsurer, or
other person engaged in the business of insurance by a
person who knows or should know that the insurer or
other person responsible for the risk is insolvent at
the time of the transaction.
``(C) Transaction of the business of insurance in
violation of laws requiring a license, certificate of
authority or other legal authority for the transaction
of the business of insurance.
``(D) Attempt to commit, aiding or abetting in the
commission of, or conspiracy to commit the acts or
omissions specified in this paragraph.
``SEC. 2799C-2. APPLICATION OF LAW.
``(a) In General.--The covered laws of the primary State shall
apply to individual health insurance coverage offered by a health
insurance issuer in the primary State and in any secondary State, but
only if the coverage and issuer comply with the conditions of this
section with respect to the offering of coverage in any secondary
State.
``(b) Exemptions From Covered Laws in a Secondary State.--Except as
provided in this section, a health insurance issuer with respect to its
offer, sale, rating (including medical underwriting), renewal, and
issuance of individual health insurance coverage in any secondary State
is exempt from any covered laws of the secondary State (and any rules,
regulations, agreements, or orders sought or issued by such State under
or related to such covered laws) to the extent that such laws would--
``(1) make unlawful, or regulate, directly or indirectly,
the operation of the health insurance issuer operating in the
secondary State, except that any secondary State may require
such an issuer--
``(A) to pay, on a nondiscriminatory basis,
applicable premium and other taxes (including high risk
pool assessments) which are levied on insurers and
surplus lines insurers, brokers, or policyholders under
the laws of the State;
``(B) to register with and designate the State
insurance commissioner as its agent solely for the
purpose of receiving service of legal documents or
process;
``(C) to submit to an examination of its financial
condition by the State insurance commissioner in any
State in which the issuer is doing business to
determine the issuer's financial condition, if--
``(i) the State insurance commissioner of
the primary State has not done an examination
within the period recommended by the National
Association of Insurance Commissioners; and
``(ii) any such examination is conducted in
accordance with the examiners' handbook of the
National Association of Insurance Commissioners
and is coordinated to avoid unjustified
duplication and unjustified repetition;
``(D) to comply with a lawful order issued--
``(i) in a delinquency proceeding commenced
by the State insurance commissioner if there
has been a finding of financial impairment
under subparagraph (C); or
``(ii) in a voluntary dissolution
proceeding;
``(E) to comply with an injunction issued by a
court of competent jurisdiction, upon a petition by the
State insurance commissioner alleging that the issuer
is in hazardous financial condition;
``(F) to participate, on a nondiscriminatory basis,
in any insurance insolvency guaranty association or
similar association to which a health insurance issuer
in the State is required to belong;
``(G) to comply with any State law regarding fraud
and abuse (as defined in section 2799C-1(10)), except
that if the State seeks an injunction regarding the
conduct described in this subparagraph, such injunction
must be obtained from a court of competent
jurisdiction;
``(H) to comply with any State law regarding unfair
claims settlement practices (as defined in section
2799C-1(9)); or
``(I) to comply with the applicable requirements
for independent review under section 2799C-4 with
respect to coverage offered in the State;
``(2) require any individual health insurance coverage
issued by the issuer to be countersigned by an insurance agent
or broker residing in that secondary State; or
``(3) otherwise discriminate against the issuer issuing
insurance in both the primary State and in any secondary State.
``(c) Clear and Conspicuous Disclosure.--A health insurance issuer
shall provide the following notice, in 12-point bold type, in any
insurance coverage offered in a secondary State under this part by such
a health insurance issuer and at renewal of the policy, with the 5
blank spaces therein being appropriately filled with the name of the
health insurance issuer, the name of the primary State, the name of the
secondary State, the name of the secondary State, and the name of the
secondary State, respectively, for the coverage concerned:
```Notice
```This policy is issued by _____ and is governed by the laws and
regulations of the State of _____, and it has met all the laws of that
State as determined by that State's Department of Insurance. This
policy may be less expensive than others because it is not subject to
all of the insurance laws and regulations of the State of _____,
including coverage of some services or benefits mandated by the law of
the State of _____. Additionally, this policy is not subject to all of
the consumer protection laws or restrictions on rate changes of the
State of _____. As with all insurance products, before purchasing this
policy, you should carefully review the policy and determine what
health care services the policy covers and what benefits it provides,
including any exclusions, limitations, or conditions for such services
or benefits.'.
``(d) Prohibition on Certain Reclassifications and Premium
Increases.--
``(1) In general.--For purposes of this section, a health
insurance issuer that