
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC300e-9]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
             SUBCHAPTER XI--HEALTH MAINTENANCE ORGANIZATIONS
 
Sec. 300e-9. Employees' health benefits plans


(a) Regulations; membership option

    In accordance with regulations which the Secretary shall prescribe--
        (1) each employer--
            (A) which is required during any calendar quarter to pay its 
        employees the minimum wage prescribed by section 206 of title 29 
        (or would be required to pay its employees such wage but for 
        section 213(a) of title 29), and
            (B) which during such calendar quarter employed an average 
        number of employees of not less than 25, and

        (2) any State and each political subdivision thereof which 
    during any calendar quarter employed an average number of employees 
    of not less than 25, as a condition of payment to the State of funds 
    under section 247b, 247c, or 300a of this title,

which offers to its employees in the calendar year beginning after such 
calendar quarter the option of membership in a qualified health 
maintenance organization which is engaged in the provision of basic 
health services in a health maintenance organization service area in 
which at least 25 of such employees reside shall meet the requirements 
of subsection (b) of this section with respect to any qualified health 
maintenance organization offered by the employer or State or political 
subdivision.

(b) Nondiscriminatory contributions for services; payroll deductions; 
        effect on costs

    (1) If a health benefits plan offered by an employer or a State or 
political subdivision includes contributions for services offered under 
the plan, the employer or State or political subdivision shall make a 
contribution under the plan for services offered by a qualified health 
maintenance organization in an amount which does not financially 
discriminate against an employee who enrolls in such organization. For 
purposes of the preceding sentence, an employer's or a State's or 
political subdivision's contribution does not financially discriminate 
if the employer's or State's or political subdivision's method of 
determining the contributions on behalf of all employees is reasonable 
and is designed to assure employees a fair choice among health benefits 
plans.
    (2) Each employer or State or political subdivision which provides 
payroll deductions as a means of paying employees' contributions for 
health benefits or which provides a health benefits plan to which an 
employee contribution is not required shall, with the consent of an 
employee who exercises option of membership in a qualified health 
maintenance organization, arrange for the employee's contribution for 
membership in the organization to be paid through payroll deductions.
    (3) No employer or State or political subdivision shall be required 
to pay more for health benefits as a result of the application of this 
subsection than would otherwise be required by any prevailing collective 
bargaining agreement or other legally enforceable contract for the 
provision of health benefits between the employer or State or political 
subdivision and its employees.

(c) ``Qualified health maintenance organization'' defined

    For purposes of this section, the term ``qualified health 
maintenance organization'' means (1) a health maintenance organization 
which has provided assurances satisfactory to the Secretary that it 
provides basic and supplemental health services to its members in the 
manner prescribed by section 300e(b) of this title and that it is 
organized and operated in the manner prescribed by section 300e(c) of 
this title, and (2) an entity which proposes to become a health 
maintenance organization and which the Secretary determines will when it 
becomes operational provide basic and supplemental health services to 
its members in the manner prescribed by section 300e(b) of this title 
and will be organized and operated in the manner prescribed by section 
300e(c) of this title.

(d) Civil penalty; notice and presentation of views; review

    (1) Any employer who knowingly does not comply with one or more of 
the requirements of paragraph (1) or (2) of subsection (b) of this 
section shall be subject to a civil penalty of not more than $10,000. If 
such noncompliance continues, a civil penalty may be assessed and 
collected under this subsection for each thirty-day period such 
noncompliance continues. Such penalty may be assessed by the Secretary 
and collected in a civil action brought by the United States in a United 
States district court.
    (2) In any proceeding by the Secretary to assess a civil penalty 
under this subsection, no penalty shall be assessed until the employer 
charged shall have been given notice and an opportunity to present its 
views on such charge. In determining the amount of the penalty, or the 
amount agreed upon in compromise, the Secretary shall consider the 
gravity of the noncompliance and the demonstrated good faith of the 
employer charged in attempting to achieve rapid compliance after 
notification by the Secretary of a noncompliance.
    (3) In any civil action brought to review the assessment of a civil 
penalty assessed under this subsection, the court shall, at the request 
of any party to such action, hold a trial de novo on the assessment of 
such civil penalty and in any civil action to collect such a civil 
penalty, the court shall, at the request of any party to such action, 
hold a trial de novo on the assessment of such civil penalty unless in a 
prior civil action to review the assessment of such penalty the court 
held a trial de novo on such assessment.

(e) ``Employer'' defined

    For purposes of this section, the term ``employer'' does not include 
(1) the Government of the United States, the government of the District 
of Columbia or any territory or possession of the United States, a State 
or any political subdivision thereof, or any agency or instrumentality 
(including the United States Postal Service and Postal Rate Commission) 
of any of the foregoing, except that such term includes nonappropriated 
fund instrumentalities of the Government of the United States; or (2) a 
church, convention or association of churches, or any organization 
operated, supervised or controlled by a church, convention or 
association of churches which organization (A) is an organization 
described in section 501(c)(3) of title 26, and (B) does not 
discriminate (i) in the employment, compensation, promotion, or 
termination of employment of any personnel, or (ii) in the extension of 
staff or other privileges to any physician or other health personnel, 
because such persons seek to obtain or obtained health care, or 
participate in providing health care, through a health maintenance 
organization.

(f) Termination of payment for failure to comply

    If the Secretary, after reasonable notice and opportunity for a 
hearing to a State, finds that it or any of its political subdivisions 
has failed to comply with paragraph (1) or (2) of subsection (b) of this 
section, the Secretary shall terminate payments to such State under 
sections 247b, 247c, and 300a of this title and notify the Governor of 
such State that further payments under such sections will not be made to 
the State until the Secretary is satisfied that there will no longer be 
any such failure to comply.

(July 1, 1944, ch. 373, title XIII, Sec. 1310, as added Pub. L. 93-222, 
Sec. 2, Dec. 29, 1973, 87 Stat. 930; amended Pub. L. 94-460, title I, 
Sec. 110(a), Oct. 8, 1976, 90 Stat. 1950; Pub. L. 95-559, Secs. 8, 
12(a)(1), Nov. 1, 1978, 92 Stat. 2135, 2140; Pub. L. 96-32, Sec. 2(f), 
July 10, 1979, 93 Stat. 82; Pub. L. 97-35, title IX, Secs. 942(a)(3), 
(4), 946, Aug. 13, 1981, 95 Stat. 573, 577; Pub. L. 99-514, Sec. 2, Oct. 
22, 1986, 100 Stat. 2095; Pub. L. 99-660, title VIII, Sec. 808, Nov. 14, 
1986, 100 Stat. 3801; Pub. L. 100-517, Secs. 4(b), 7(a)(1), (2), (b), 
Oct. 24, 1988, 102 Stat. 2578, 2580.)


                               Amendments

    1988--Pub. L. 100-517, Sec. 7(b), amended section generally, 
substituting subsecs. (a) to (f) for former subsecs. (a) to (g).
    Subsec. (b). Pub. L. 100-517, Secs. 4(b), 7(a)(1)(A), in 
introductory provisions, substituted ``or a State or political 
subdivision'' for ``subject to subsection (a) of this section'', in par. 
(1), inserted ``and provides at least 90 percent of such services 
through physicians described in section 300e(b)(3)(A) of this title'', 
in par. (2), inserted ``and provides no more than 10 percent of such 
services through physicians who are not described in section 
300e(b)(3)(A) of this title'', and in concluding provisions, substituted 
``employer or State or political subdivision pursuant'' for ``employer 
pursuant''.
    Subsec. (c). Pub. L. 100-517, Sec. 7(a)(1)(B), (2), substituted ``No 
employer or State or political subdivision'' for ``No employer'', 
``between the employer or State or political subdivision'' for ``between 
the employer'', and ``Each employer or State or political subdivision'' 
for ``Each employer'', and inserted at end ``If a health benefits plan 
offered by an employer or a State or political subdivision under 
subsection (a) of this section includes contributions for services 
offered under the plan, the employer or State or political subdivision 
shall make a contribution under the plan for services offered by a 
qualified health maintenance organization in an amount which does not 
financially discriminate against an employee who enrolls in such 
organization. For purposes of the preceding sentence, an employer's or a 
State's or political subdivision's contribution does not financially 
discriminate if the employer's or State's or political subdivision's 
method of determining the contributions on behalf of all employees is 
reasonable and is designed to assure employees a fair choice among 
health benefits plans.''
    1986--Subsec. (d). Pub. L. 99-660 struck out last sentence which 
read as follows: ``Every two years (or such longer period as the 
Secretary may by regulation prescribe) after the date a health 
maintenance organization becomes a qualified health maintenance 
organization under this subsection, the health maintenance organization 
must demonstrate to the Secretary that it is qualified within the 
meaning of this subsection.''
    Subsec. (f). Pub. L. 99-514 substituted ``Internal Revenue Code of 
1986'' for ``Internal Revenue Code of 1954'', which for purposes of 
codification was translated as ``title 26'' thus requiring no change in 
text.
    1981--Subsec. (b)(1). Pub. L. 97-35, Sec. 942(a)(3)(A), substituted 
provisions respecting provision of more than one-half of the basic 
services provided by physicians, for provisions respecting provision of 
basic services.
    Subsec. (b)(2). Pub. L. 97-35, Sec. 942(a)(3)(B), (4), inserted 
reference to provision by physicians, added cl. (B), and redesignated 
former cl. (B) as (C).
    Subsec. (d). Pub. L. 97-35, Sec. 946(a), inserted provisions 
relating to demonstration of continued qualification of organization.
    Subsec. (f)(1). Pub. L. 97-35, Sec. 946(b), inserted reference to 
United States nonappropriated fund instrumentalities.
    1979--Subsec. (e)(1). Pub. L. 96-32 substituted ``subsection (a), 
(b), or (c)'' for ``subsection (a)''.
    1978--Subsec. (b). Pub. L. 95-559, Sec. 8(b), substituted in par. 
(1) ``through physicians or other health professionals who are members 
of the staff of the organization or a medical group (or groups)'' for 
``(A) without the use of an individual practice association and (B) 
without the use of contracts (except for contracts for unusual or 
infrequently used services) with health professionals'' and in par. (2) 
``(B) a combination of such association (or associations), medical group 
(or groups), staff, and individual physicians and other health 
professionals under contract with the organization'' for ``(B) health 
professionals who have contracted with the health maintenance 
organization for the provision of such services, or (C) a combination of 
such association (or associations) or health professionals under 
contract with the organization''.
    Subsec. (c). Pub. L. 95-559, Sec. 8(a), inserted provision that each 
employer which provides payroll deductions as a means of paying 
employees' contributions for health benefits or which provides a health 
benefits plan to which an employee contribution is not required and 
which is required by subsection (a) of this section to offer his 
employees the option of membership in a qualified health maintenance 
organization shall, with the consent of an employee who exercises such 
option, arrange for the employee's contribution for such membership to 
be paid through payroll deductions.
    Subsec. (h). Pub. L. 95-559, Sec. 12(a)(1), struck out subsec. (h) 
which provided that the duties and functions of the Secretary, insofar 
as they involve determinations as to whether an organization is a 
qualified health maintenance organization within the meaning of 
subsection (d) of this section, be administered through the Assistant 
Secretary for Health and in the Office of the Assistant Secretary for 
Health, and the administration of such duties and functions be 
integrated with the administration of section 300e-11(a) of this title.
    1976--Subsec. (a). Pub. L. 94-460, Sec. 110(a)(1), substituted 
reference to each employer which is now or hereafter required for 
reference to each employer which is required, reference to basic health 
services in health maintenance organization service areas in which at 
least 25 of such employees reside for reference to basic and 
supplemental health services in the areas in which such employees 
reside, and inserted provisions requiring certain States and political 
subdivisions thereof to include in any health benefits plan the option 
of membership in qualified health maintenance organizations as a 
condition of payment to the State of funds under section 246(d), 247b, 
247c, 300a, 300m-4, or 300p-3 of this title, and that the offer of 
membership in such an organization be first made to the employees' 
representative, if any, and then be made to each employee if the offer 
is accepted by the representative.
    Subsec. (b)(1). Pub. L. 94-460, Sec. 110(a)(2), substituted ``(A) 
without the use of an individual practice association and (B) without 
the use of contracts (except for contracts for unusual or infrequently 
used services) with health professionals'' for ``through professionals 
who are members of the staff of the organization or a medical group (or 
groups)''.
    Subsec. (b)(2). Pub. L. 94-460, Sec. 110(a)(2), substituted ``basic 
health services through (A) an individual practice association (or 
associations), (B) health professionals who have contracted with the 
health maintenance organization for the provision of such services, or 
(C) a combination of such association (or associations) or health 
professionals under contract with the organization'' for ``such services 
through an individual practice association (or associations)''.
    Subsec. (c). Pub. L. 94-460, Sec. 110(a)(3), struck out provision 
that failure of any employer to comply with the requirements of 
subsection (a) of this section be considered a willful violation of 
section 215 of title 29.
    Subsecs. (e) to (h). Pub. L. 94-460, Sec. 110(a)(4), added subsecs. 
(e) to (h).


                    Effective Date of 1988 Amendment

    Section 7(b) of Pub. L. 100-517 provided that the amendment made by 
section 7(b) is effective 7 years after Oct. 24, 1988.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-660 effective Oct. 1, 1985, see section 
815(a) of Pub. L. 99-660, set out as an Effective and Termination Dates 
of 1986 Amendment note under section 300e-1 of this title.


                    Effective Date of 1981 Amendment

    Section 942(a)(5) of Pub. L. 97-35 provided that: ``The amendment 
made by paragraph (3)(A) [amending this section] shall apply with 
respect to the offering of a health maintenance organization in 
accordance with section 1310(b)(1) of the Public Health Service Act 
[subsec. (b)(1) of this section] after four years after the date the 
organization becomes a qualified health maintenance organization for 
purposes of section 1310 of such Act [this section] if the health 
maintenance organization provides assurances satisfactory to the 
Secretary that upon the expiration of such four years it will provide 
more than one half of its basic health services which are provided by 
physicians through physicians or other health professionals who are 
members of the staff of the organization or a medical group (or 
groups).''


                    Effective Date of 1976 Amendment

    Amendment by section 110(a)(1), (2) of Pub. L. 94-460 applicable 
with respect to calendar quarters which began after Oct. 8, 1976, and 
amendment by section 110(a)(3), (4) of Pub. L. 94-460 applicable with 
respect to failures of employers to comply with section 300e-9 of this 
title after Oct. 8, 1976, see section 118 of Pub. L. 94-460, set out as 
a note under section 300e of this title.


    Collective Bargaining Agreements in Effect on October 24, 1988, 
                               Unaffected

    Section 7(a)(3) of Pub. L. 100-517 provided that: ``Nothing in 
section 1310 of the Public Health Service Act (42 U.S.C. 300e-9), as 
amended by this Act, shall be construed to supersede any provision of a 
collective bargaining agreement in effect on the date of enactment of 
this Act [Oct. 24, 1988].''

                  Section Referred to in Other Sections

    This section is referred to in sections 300e, 300e-1, 300e-10, 300e-
11, 300e-14, 300e-16, 300e-17, 1395mm, 1395nn, 1396b of this title; 
title 5 section 8902.
