Bill summaries are authored by CRS.

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Passed House without amendment (07/26/2005)

(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)

Small Business Health Fairness Act of 2005 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to provide for establishment and governance of association health plans (AHPs), which are group health plans whose sponsors are trade, industry, professional, chamber of commerce, or similar business associations, and which meet certain ERISA certification requirements. (Thus, through ERISA preemption of State laws, certified AHPs are exempted from State regulation of health insurance providers, including State consumer protection laws and State requirements for health care benefits to be offered by such entities, with certain exceptions.)

(Sec. 2) Establishes rules governing AHPs, including requirements relating to certification, sponsors and boards of trustees, participation and coverage, nondiscrimination, plan documents, contribution rates, benefit options, applications for certification, notice of voluntary termination, corrective actions, and mandatory termination.

Requires AHPs which provide health benefits in addition to health insurance coverage to maintain certain reserves and comply with other solvency requirements.

Directs the Secretary of Labor to apply for appointment, and carry out specified duties, as trustee of any insolvent AHPs which provide health benefits in addition to health insurance coverage.

Allows a State to impose a contribution tax on any AHP commencing operations in such State after the enactment of this Act. Sets forth limits on such tax, including reduction by the amount of any tax or assessment otherwise imposed by the State on specified other insurance related items maintained by the AHP.

Requires AHPs to include in their summary plan descriptions, in connection with each benefit option, a description of the form of any solvency or guarantee fund protection secured under ERISA or applicable State law.

Allows a certified AHP to exist in a State regardless of any State law that would preclude it.

Preempts State requirements for benefits to be offered by AHPs; but allows a State in which an AHP is domiciled to require the domiciled AHP to cover particular types of diseases and conditions. Allows health insurance issuers to offer coverage of the same policy type offered in connection with a particular AHP to eligible employers, regardless of whether such employers are members of the particular association and regardless of State law. Deems health insurance coverage policy forms filed and approved in a particular State in connection with an insurer's offering under an AHP as approved in any other State in which such coverage is offered when the insurer provides a complete filing in the same form and manner to the authority in the other State.

Makes inapplicable to certified AHPs certain current ERISA provisions which allow State regulation of multiple employer welfare arrangements (MEWAs). Revises ERISA preemption rules to permit State regulation of self-insured MEWAs providing medical care which do not elect to meet the certification requirements for AHPs.

Directs the Secretary to report to specified congressional committees by January 1, 2010, on the effect, if any, AHPs have had on the number of uninsured individuals.

(Sec. 3) Revises requirements for treatment of single employer arrangements. Allows two or more trades or businesses to be deemed a single employer if they are in the same control group offering medical care benefits, under specified conditions.

(Sec. 4) Provides for enforcement of AHP requirements, including criminal penalties for certain willful misrepresentations, issuance of cease and desist orders, and the responsibility of AHP boards of trustees for certain claims procedures.

(Sec. 5) Directs the Secretary, regarding the exercise of authority, to consult only with the recognized primary domicile State for an AHP.

(Sec. 6) Provides for transitional and other rules relating to treatment of certain existing health benefit programs.