
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC300gg-44]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
   SUBCHAPTER XXV--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE
 
                     Part B--Individual Market Rules
 
      subpart 1--portability, access, and renewability requirements
 
Sec. 300gg-44. State flexibility in individual market reforms


(a) Waiver of requirements where implementation of acceptable 
        alternative mechanism

                           (1) In general

        The requirements of section 300gg-41 of this title shall not 
    apply with respect to health insurance coverage offered in the 
    individual market in the State so long as a State is found to be 
    implementing, in accordance with this section and consistent with 
    section 300gg-62(b) of this title, an alternative mechanism (in this 
    section referred to as an ``acceptable alternative mechanism'')--
            (A) under which all eligible individuals are provided a 
        choice of health insurance coverage;
            (B) under which such coverage does not impose any 
        preexisting condition exclusion with respect to such coverage;
            (C) under which such choice of coverage includes at least 
        one policy form of coverage that is comparable to comprehensive 
        health insurance coverage offered in the individual market in 
        such State or that is comparable to a standard option of 
        coverage available under the group or individual health 
        insurance laws of such State; and
            (D) in a State which is implementing--
                (i) a model act described in subsection (c)(1) of this 
            section,
                (ii) a qualified high risk pool described in subsection 
            (c)(2) of this section, or
                (iii) a mechanism described in subsection (c)(3) of this 
            section.

                 (2) Permissible forms of mechanisms

        A private or public individual health insurance mechanism (such 
    as a health insurance coverage pool or programs, mandatory group 
    conversion policies, guaranteed issue of one or more plans of 
    individual health insurance coverage, or open enrollment by one or 
    more health insurance issuers), or combination of such mechanisms, 
    that is designed to provide access to health benefits for 
    individuals in the individual market in the State in accordance with 
    this section may constitute an acceptable alternative mechanism.

(b) Application of acceptable alternative mechanisms

                           (1) Presumption

        (A) In general

            Subject to the succeeding provisions of this subsection, a 
        State is presumed to be implementing an acceptable alternative 
        mechanism in accordance with this section as of July 1, 1997, 
        if, by not later than April 1, 1997, the chief executive officer 
        of a State--
                (i) notifies the Secretary that the State has enacted or 
            intends to enact (by not later than January 1, 1998, or July 
            1, 1998, in the case of a State described in subparagraph 
            (B)(ii)) any necessary legislation to provide for the 
            implementation of a mechanism reasonably designed to be an 
            acceptable alternative mechanism as of January 1, 1998,\1\ 
            (or, in the case of a State described in subparagraph 
            (B)(ii), July 1, 1998); and
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    \1\ So in original. The comma probably should not appear.
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                (ii) provides the Secretary with such information as the 
            Secretary may require to review the mechanism and its 
            implementation (or proposed implementation) under this 
            subsection.

        (B) Delay permitted for certain States

            (i) Effect of delay

                In the case of a State described in clause (ii) that 
            provides notice under subparagraph (A)(i), for the 
            presumption to continue on and after July 1, 1998, the chief 
            executive officer of the State by April 1, 1998--
                    (I) must notify the Secretary that the State has 
                enacted any necessary legislation to provide for the 
                implementation of a mechanism reasonably designed to be 
                an acceptable alternative mechanism as of July 1, 1998; 
                and
                    (II) must provide the Secretary with such 
                information as the Secretary may require to review the 
                mechanism and its implementation (or proposed 
                implementation) under this subsection.
            (ii) States described

                A State described in this clause is a State that has a 
            legislature that does not meet within the 12-month period 
            beginning on August 21, 1996.

        (C) Continued application

            In order for a mechanism to continue to be presumed to be an 
        acceptable alternative mechanism, the State shall provide the 
        Secretary every 3 years with information described in 
        subparagraph (A)(ii) or (B)(i)(II) (as the case may be).

                             (2) Notice

        If the Secretary finds, after review of information provided 
    under paragraph (1) and in consultation with the chief executive 
    officer of the State and the insurance commissioner or chief 
    insurance regulatory official of the State, that such a mechanism is 
    not an acceptable alternative mechanism or is not (or no longer) 
    being implemented, the Secretary--
            (A) shall notify the State of--
                (i) such preliminary determination, and
                (ii) the consequences under paragraph (3) of a failure 
            to implement such a mechanism; and

            (B) shall permit the State a reasonable opportunity in which 
        to modify the mechanism (or to adopt another mechanism) in a 
        manner so that may be an acceptable alternative mechanism or to 
        provide for implementation of such a mechanism.

                       (3) Final determination

        If, after providing notice and opportunity under paragraph (2), 
    the Secretary finds that the mechanism is not an acceptable 
    alternative mechanism or the State is not implementing such a 
    mechanism, the Secretary shall notify the State that the State is no 
    longer considered to be implementing an acceptable alternative 
    mechanism and that the requirements of section 300gg-41 of this 
    title shall apply to health insurance coverage offered in the 
    individual market in the State, effective as of a date specified in 
    the notice.

               (4) Limitation on secretarial authority

        The Secretary shall not make a determination under paragraph (2) 
    or (3) on any basis other than the basis that a mechanism is not an 
    acceptable alternative mechanism or is not being implemented.

                  (5) Future adoption of mechanisms

        If a State, after January 1, 1997, submits the notice and 
    information described in paragraph (1), unless the Secretary makes a 
    finding described in paragraph (3) within the 90-day period 
    beginning on the date of submission of the notice and information, 
    the mechanism shall be considered to be an acceptable alternative 
    mechanism for purposes of this section, effective 90 days after the 
    end of such period, subject to the second sentence of paragraph (1).

(c) Provision related to risk

                     (1) Adoption of NAIC models

        The model act referred to in subsection (a)(1)(D)(i) of this 
    section is the Small Employer and Individual Health Insurance 
    Availability Model Act (adopted by the National Association of 
    Insurance Commissioners on June 3, 1996) insofar as it applies to 
    individual health insurance coverage or the Individual Health 
    Insurance Portability Model Act (also adopted by such Association on 
    such date).

                    (2) Qualified high risk pool

        For purposes of subsection (a)(1)(D)(ii) of this section, a 
    ``qualified high risk pool'' described in this paragraph is a high 
    risk pool that--
            (A) provides to all eligible individuals health insurance 
        coverage (or comparable coverage) that does not impose any 
        preexisting condition exclusion with respect to such coverage 
        for all eligible individuals, and
            (B) provides for premium rates and covered benefits for such 
        coverage consistent with standards included in the NAIC Model 
        Health Plan for Uninsurable Individuals Act (as in effect as of 
        August 21, 1996).

                        (3) Other mechanisms

        For purposes of subsection (a)(1)(D)(iii) of this section, a 
    mechanism described in this paragraph--
            (A) provides for risk adjustment, risk spreading, or a risk 
        spreading mechanism (among issuers or policies of an issuer) or 
        otherwise provides for some financial subsidization for eligible 
        individuals, including through assistance to participating 
        issuers; or
            (B) is a mechanism under which each eligible individual is 
        provided a choice of all individual health insurance coverage 
        otherwise available.

(July 1, 1944, ch. 373, title XXVII, Sec. 2744, as added Pub. L. 104-
191, title I, Sec. 111(a), Aug. 21, 1996, 110 Stat. 1984; amended Pub. 
L. 104-204, title VI, Sec. 605(b)(1), Sept. 26, 1996, 110 Stat. 2942.)

                          Codification

    August 21, 1996, referred to in subsec. (b)(1)(B)(ii), was in the 
original ``the date of enactment of this Act'', which was translated as 
meaning the date of enactment of Pub. L. 104-191, which enacted this 
subchapter, to reflect the probable intent of Congress.


                               Amendments

    1996--Subsec. (a)(1). Pub. L. 104-204 made technical amendment to 
reference in original act which appears in text as reference to section 
300gg-62(b) of this title.


                    Effective Date of 1996 Amendment

    Section 605(c) of Pub. L. 104-204 provided that: ``The amendments 
made by this section [enacting section 300gg-51 of this title and 
amending this section and sections 300gg-61 and 300gg-62 of this title] 
shall apply with respect to health insurance coverage offered, sold, 
issued, renewed, in effect, or operated in the individual market on or 
after January 1, 1998.''


                             Effective Date

    Section applicable with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated in the individual 
market after June 30, 1997, regardless of when a period of creditable 
coverage occurs, see section 111(b) of Pub. L. 104-191, set out as a 
note under section 300gg-41 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 300gg-41 of this title.
