THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY DeLUCA, BELFANTI, CONKLIN, D. COSTA, DONATUCCI, GOODMAN, KIRKLAND, KORTZ, KULA, MUNDY, M. O'BRIEN, PICKETT, SEIP, STABACK, J. TAYLOR, WHITE, HENNESSEY, JOSEPHS, CALTAGIRONE, K. SMITH, WAGNER, MURT AND HOUGHTON, MARCH 5, 2009

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, JUNE 17, 2009   

AN ACT

Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An

act relating to insurance; amending, revising, and

consolidating the law providing for the incorporation of

insurance companies, and the regulation, supervision, and

protection of home and foreign insurance companies, Lloyds

associations, reciprocal and inter-insurance exchanges, and

fire insurance rating bureaus, and the regulation and

supervision of insurance carried by such companies,

associations, and exchanges, including insurance carried by

the State Workmen's Insurance Fund; providing penalties; and

repealing existing laws," further providing for conditions

subject to which policies are to be issued; providing for

exemption from general applicability, for health insurance

coverage for certain children of insured parents for

guaranteed availability and renewability of small group

health benefit plans and for affordable small group health

care coverage; and making inconsistent repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of May 17, 1921 (P.L.682, No.284), known

as The Insurance Company Law of 1921, is amended by adding an

article to read:

ARTICLE XLII

AFFORDABLE SMALL GROUP HEALTH CARE COVERAGE

Section 4201.  Scope of article.

This article relates to health care reform.

Section 4202.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Accident and Health Filing Reform Act."  The act of December

18, 1996 (P.L.1066, No.159), known as the Accident and Health

Filing Reform Act.

"Commissioner."  The Insurance Commissioner of the

Commonwealth.

"Commonwealth Attorneys Act."  The act of October 15, 1980

(P.L.950, No.164), known as the Commonwealth Attorneys Act.

"Commonwealth Documents Law."  The act of July 31, 1968

(P.L.769, No.240), referred to as the Commonwealth Documents

Law.

"Creditable coverage."  As defined in section 2701 of the

Health Insurance Portability and Accountability Act of 1996

(Public Law 104-191, 42 U.S.C. § 300gg-91) 300GG).

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"Department."  The Insurance Department of the Commonwealth.

"Eligible employee."  A person employed by a large employer

or a small employer on a regularly scheduled basis, with a

normal work week of 17.5 hours or more, but does not include

persons who work on a temporary, seasonal or substitute basis.

"Geographic average rate."  The arithmetical average of the

lowest premium and the corresponding highest premium to be

charged by an insurer in a health insurance region for the

insurer's small employer health benefits plan benefit plans. The

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term does not include premium differences that are due to

differences in benefit design or family composition.

"Health benefit plan."  Any individual or group health

insurance policy, subscriber contract, certificate or plan which

provides health or sickness and accident coverage which is

offered by an insurer. The term shall not include any of the

following:

(1)  An accident only policy.

(2)  A credit only policy.

(3)  A long-term care or disability income policy.

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(4)  A long-term care policy.

(5)  A specified disease policy.

(6)  A Medicare supplement policy.

(7)  A Civilian Health and Medical Program of the

Uniformed Services (CHAMPUS) supplement policy.

(8)  A fixed indemnity policy.

(9)  A dental only policy.

(10)  A vision only policy.

(11)  A workers' compensation policy.

(12)  An automobile medical payment policy under 75

Pa.C.S. (relating to vehicles).

(13)  Any other similar policies providing for limited

benefits.

"Health insurance region."  Any of the following:

(1)  "Region I."  The geographic area covered by the

counties of Bucks, Chester, Delaware, Montgomery and

Philadelphia.

(2)  "Region II."  The geographic area covered by the

counties of Adams, Berks, Cumberland, Dauphin, Franklin,

Fulton, Lancaster, Lebanon, Lehigh, Northampton, Perry,

Schuylkill and York.

(3)  "Region III."  The geographic area covered by the

counties of Bradford, Carbon, Clinton, Lackawanna, Luzerne,

Lycoming, Monroe, Pike, Sullivan, Susquehanna, Tioga, Wayne

and Wyoming.

(4)  "Region IV."  The geographic area covered by the

counties of Centre, Columbia, Juniata, Mifflin, Montour,

Northumberland, Snyder and Union.

(5)  "Region V."  The geographic area covered by the

counties of Bedford, Blair, Cambria, Clearfield, Huntingdon,

Jefferson and Somerset.

(6)  "Region VI."  The geographic area covered by the

counties of Allegheny, Armstrong, Beaver, Butler, Fayette,

Greene, Indiana, Lawrence, Washington and Westmoreland.

(7)  "Region VII."  The geographic area covered by the

counties of Cameron, Clarion, Crawford, Elk, Erie, Forest,

McKean, Mercer, Potter, Venango and Warren.

"Individual market."  The health insurance market for

individuals as defined in section 2791 of the Health Insurance

Portability and Accountability Act of 1996 (Public Law 104-191,

42 U.S.C. § 300gg-91).

"Insurer."  A company or health insurance entity licensed in

this Commonwealth to issue any individual or group health,

sickness or accident policy or subscriber contract or

certificate or plan that provides medical or health care

coverage by a health care facility or licensed health care

provider that is offered or governed under this act or any of

the following:

(1)  The act of December 29, 1972 (P.L.1701, No.364),

known as the Health Maintenance Organization Act.

(2)  The act of May 18, 1976 (P.L.123, No.54), known as

the Individual Accident and Sickness Insurance Minimum

Standards Act.

(3)  40 Pa.C.S. Ch. 61 (relating to hospital plan

corporations) or Ch. 63 (relating to professional health

services plan corporations).

(4)  Article XXIV.

"Insurer group."  A group of insurers writing coverage in

this Commonwealth, including a parent insurer, its subsidiaries

and affiliates.

"Large employer."  In connection with a group health plan

with respect to a calendar year and a plan year, an employer who

employs an average of 51 or more eligible employees on business

days during the preceding calendar year and who employs at least

51 eligible employes on the first day of the plan year. In the

case of an employer which was not in existence throughout the

preceding calendar year, the determination whether an employer

is a large employer shall be based on the average number of

eligible employes that it is reasonably expected that the

employer will employ on business days in the current calendar

year.

"Large group market."  The health insurance market for large

employers.

"Medical loss ratio."  The ratio of incurred medical claim

costs to health earned premiums, as reported on the statement

convention blank adopted by the National Association of

Insurance Commissioners and filed with the Insurance

Commissioner.

"NAIC."  The National Association of Insurance Commissioners.

"Plan year."  The 12-consecutive-month period beginning on

the first day of coverage under a health benefit plan.

"Preexisting condition exclusion."  As defined in section

2701 of the Health Insurance Portability and Accountability Act

of 1996 (Public Law 104-191, 42 U.S.C. § 300gg-91) 300gg).

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Pregnancy and conditions for which medical advice, diagnosis,

care or treatment was recommended or received before birth or

within the first 60 days after birth or within the first 60 days

after adoption as a minor child shall not be treated as

conditions described in the definition in section 2701.

"Regulatory Review Act."  The act of June 25, 1982 (P.L.633,

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No.181), known as the Regulatory Review Act.

"Rating geographic average rate."  The arithmetical average

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of the lowest premium and the corresponding highest premium to

be charged by an insurer in the service area where the insurer

offers small employer health benefit plans or where the insurer

has a provider network.

"Small employer."  In connection with a group health plan

with respect to a calendar year and a plan year, an employer who

employs an average of at least two but not more than 50 eligible

employes on business days during the preceding calendar year and

who employs at least two eligible employees on the first day of

the plan year. In the case of an employer which was not in

existence throughout the preceding calendar year, the

determination whether an employer is a small employer shall be

based on the average number of eligible employees that it is

reasonably expected that the employer will employ on business

days in the current calendar year.

"Small group health benefit plan."  A health benefit plan

offered to a small employer.

"Small group market."  The health insurance market for small

employers.

"Standard plan."  One of the health benefit packages

established by the Insurance Department in accordance with

section 4204.

Section 4203.  Exemption from general applicability.

Sections 4204 and 4206 shall not apply to small group health

benefit plans issued, made effective, delivered or renewed in

this Commonwealth by any insurer that is part of an insurer

group where that insurer group insures or administers health

care coverage for less than 1% of the health insurance premiums

in the Commonwealth, as measured by NAIC annual statement data.

If the NAIC annual statement data does not contain the

specificity to demonstrate that the insurer group premium for

health insurance is less than 1% of the health insurance premium

in the Commonwealth, an insurer group seeking to claim exemption

from the requirements of this article shall present additional

evidence supported by a statement by an independent, certified

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public accountant, utilizing agreed-upon procedures acceptable

to the department to demonstrate its market share.

Section 4204.  Standard plans.

(a)  Applicability.--This section shall apply to all small

group health benefit plans issued, made effective, delivered or

renewed in this Commonwealth after the effective date of this

section.

(b)  Standard plans required.--

(1)  An insurer shall not offer a plan that does not meet

the minimum benefits specified in one of the standard plans

developed by the department. The department shall consult

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with insurers in developing the standard plans.

(2)  The standard plans may not contain any preexisting

condition exclusions.

(3)  Standard plans may include options for deductibles

and cost-sharing if the department determines that the

options:

(i)  Do not dissuade consumers from seeking necessary

services.

(ii)  Promote a balance of the impact of cost-sharing

in reducing premiums and in effecting utilization of

appropriate services.

(iii)  Limit the total cost-sharing that may be

incurred by an individual in a year.

(4)  The following apply:

(i)  The department shall forward notice of the

elements of the standard plans to the Legislative

Reference Bureau for publication as a notice in the

Pennsylvania Bulletin.

(ii)  An insurer subject to the provisions of this

section shall be required to begin offering its standard

plans as soon as practicable following the publication

but in no event later than 180 days following the

publication under subparagraph (i).

(5)  Each standard plan shall qualify as creditable

coverage.

(c)  Additional benefits.--

(1)  An insurer may offer benefits in addition to those

in any of its standard plans.

(2)  Each additional benefit shall:

(i)  Be offered and priced separately from benefits

specified in the standard plan with which the benefits

are being offered.

(ii)  Not have the effect of duplicating any of the

benefits in the standard plan with which the benefits are

being offered.

(iii)  Be clearly specified as additions to the

standard plan with which the benefits are being offered.

(3)  The department may prohibit an insurer from offering

an additional benefit under this section if the department

finds that the additional benefit will be sold in conjunction

with one of the insurer's standard plans in a manner designed

to promote risk selection or underwriting practices otherwise

prohibited under this section or other State law.

(d)  Standard plan bulletin.--The department shall issue a

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standard plan bulletin.

(e)  Consulting with insurers.--Prior to issuance of a

bulletin, the department shall consult with insurers concerning

the development of a standard plan bulletin.

(f)  Open meetings.--Meetings held under subsection (b) shall

be open to the public.

(g)  Publication.--The department shall publish the proposed

standard plan bulletin in the Pennsylvania Bulletin and solicit

public comments for a minimum of 30 days. After consideration of

the comments it receives, the department may proceed to adopt

the final standard plan bulletin by publication in the

Pennsylvania Bulletin. The department shall include its

responses to the public comments that it received concerning the

proposed bulletin.

Section 4205.  Guaranteed availability and renewability of small

group health benefit plans.

(a)  Availability.--The availability of each small group

health benefit plan offered under this article is subject to the

provisions of the act of June 25, 1997 (P.L.295, No.29), known

as the Pennsylvania Health Care Insurance Portability Act.

(b)  Preexisting conditions.--Any preexisting condition

exclusions for small group health benefit plans shall comply

with section 2701 of Title XXVII of the Public Health Service

Act (Public Law 104-191, 42 U.S.C. § 300gg-91) 300GG).

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(c)  Renewability.--The renewability of each small group

health benefit plan offered under this article is subject to the

provisions of the Pennsylvania Health Care Insurance Portability

Act.

Section 4206.  Health insurance premium rates.

(a)  Applicability.--This section shall apply to all small

group health benefit plans that are issued, made effective,

delivered or renewed in this Commonwealth after the effective

date of this section.

(b)  Premium rates.--

(1)  An insurer shall establish a rating geographic

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average rate for plans and shall file the rating geographic

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average rates with the department as required by law. The 

rating geographic average rate may not be changed more

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frequently than once every 12 months. An insurer may adjust

its rating geographic average rates for age only.

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(2)  An insurer shall apply the risk adjustment factor

under paragraph (1) consistently with respect to all plans

subject to this section.

(3)  An insurer shall not charge a rate that is more than

33% above or below the rating geographic average rate as

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permitted under paragraph (1). Additional adjustments may be

made to reflect the inclusion of additional benefits as

specified under section 4204(c) and differences in family

composition.

(4)  The premium for a small group health benefit plan

shall not be adjusted by an insurer more than once each year,

except that rates may be changed more frequently to reflect:

(i)  Changes to the enrollment of the small employer

group.

(ii)  Changes to a small group health benefit plan

that have been requested by the small employer.

(iii)  Changes pursuant to a government order or

judicial proceeding.

(5)  Except for adjustments related to enrollment or

benefit changes, any small group receiving a rate increase at

renewal shall have that increase limited to a 10% adjustment

from the applicable group rate. The applicable group rate is

the rate the group was charged in the prior benefit year

adjusted for any change in the geographic average rate for

the relevant region from the prior year to the current year.

(6)  Rate changes required by the rate bands in paragraph

(3) shall be phased in so that any small group receiving a

rate increase at renewal shall have the portion of that rate

increase attributable to the implementation of the rate bands

in paragraph (3) limited to 10% of the prior rate.

(7)  An insurer shall adjust the rating geographic

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average rate in an additional amount of not less than 5% and

not more than 20% for any small employer who participates in 

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group who completes a wellness program. The wellness program

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must satisfy that satisfies minimum standards established by

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the department in coordination with the department of health

and published. The departments will publish the minimum

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standards by notice in the Pennsylvania Bulletin, and may not

violate the requirements of the Federal wellness program

regulations under 45 CFR § 146.121F 146.121 (relating to

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prohibiting discrimination against participants and

beneficiaries based on a health factor).

(8)  An insurer shall base its rating methods and

practices on commonly accepted actuarial assumptions and

sound actuarial principles. Rates shall not be excessive,

inadequate or unfairly discriminatory.

(9)  For purposes of this subsection, an insurer's

"geographic average rate" for a plan shall refer to a rating

methodology that is based on the experience of all risks

covered by the plan without regard to health status,

occupation or any other factor.

(c)  Additional rate review and prior approval.--

(1)  In conjunction with and in addition to the standards

set forth in the act of December 18, 1996 (P.L.1066, No.159),

known as the Accident and Health Filing Reform Act, and all

other applicable statutory and regulatory requirements, all

rate filings shall be subject to prior approval by the

department within the 45-day period provided by section 3(f)

of the Accident and Health Filing Reform Act.

(2)  In conjunction with and in addition to the standards

set forth under the Accident and Health Filing Reform Act and

all other applicable statutory and regulatory requirements,

the department may disapprove a rate filing based upon any of

the following:

(i)  The rate is not actuarially sound.

(ii)  The increase is requested because the insurer

has not operated efficiently or has factored in

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experience that conflicts with recognized best practices

in the health care industry, including the allocation of

administrative expenses to the plan on a less favorable

basis than expenses are allocated to other health benefit

plans.

(iii)  The increase is requested because the insurer

has incurred costs due to failure to follow best

practices for cost control, including efforts to promote

a reduction in hospital-acquired infections and serious

preventable adverse events.

(iv)  The medical loss ratio for a plan is less than

85%.

(3)  In the event a plan has a medical loss ratio of less

than 85%, the department may, in addition to any other

remedies available under law, require the insurer to refund

the difference to policyholders on a pro rata basis as soon

as practicable following receipt of notice from the

department of the requirement but in no event later than 120

days following receipt of the notice. The department shall

establish procedures under which such refunds will be made.

(d)  Procedures.--The filing and review procedures set forth

under the Accident and Health Filing Reform Act shall apply to

any filing conducted under this section, except that no filing

deemed to meet the requirements of this act shall take effect

unless the department receives written notice of the insurer's

intent to exercise the right granted under this section at least

ten calendar days prior to implementation of rates authorized by

this act.

Section 4207.  College student insurance requirements.

(a)  Minimum health benefit package.--Within 90 days

following the effective date of this section, the department

shall establish a minimum health benefit package for full-time

students enrolled in public or private baccalaureate and

postbaccalaureate programs in this Commonwealth and transmit a

description of the package to the Legislative Reference Bureau

for publication in the Pennsylvania Bulletin. As soon as

practicable after the date of publication of the package, but in

no event later than 120 days following the publication, all

insurers shall offer the package as individual coverage

available to students and as group coverage through the

institution. The department may make revisions to the minimum

health benefit package periodically, but no more than one time

per 12-month period. Each revision shall be implemented by

insurers as soon as practicable following publication of the

revision in the Pennsylvania Bulletin, but in no event later

than 120 days following such publication.

(b)  Required health insurance coverage.--

(1)  Every full-time student enrolled in a public or

private baccalaureate or postbaccalaureate program in this

Commonwealth shall maintain health insurance coverage which

provides the minimum benefit package established under this

section. The coverage shall be maintained throughout the

period of the student's enrollment.

(2)  Every student required to meet the mandatory

coverage under this section shall present evidence of such

coverage to the institution in which the student is enrolled

at least annually, in a manner prescribed by the institution.

(3)  Every public or private college or university or

postbaccalaureate program in this Commonwealth shall make

available health insurance coverage on a group or individual

basis for purchase by students who are required to maintain

the coverage under this section.

(4)  Notwithstanding paragraphs (1), (2) and (3), the

requirements of this section may be satisfied if the

baccalaureate or postbaccalaureate program provides on-campus

student health care coverage equivalent to the minimum

benefit package through its own clinics and health care

facilities and receives approval from the Department of

Education, in consultation with the department, that such

coverage is equivalent. The coverage shall provide that the

student is covered for hospital admissions and emergency

services at facilities throughout this Commonwealth.

(c)  Effective date.--This section shall apply to public or

private baccalaureate or postbaccalaureate program in this

Commonwealth beginning the first August 1 following 180 days

after the publication of the notice of the elements of the

standard plans.

(d)  Annual certification.--Every public or private

baccalaureate or postbaccalaureate program in this Commonwealth

shall certify to the Department of Education at least annually

that the requirements of this section have been met for all

periods of the preceding year.

(e)  Penalty for failure to comply.--The Secretary of

Education may impose a fine of up to $500 per day for each day

that a public or private baccalaureate or postbaccalaureate

program fails to meet any of its obligations in this section.

The fine shall be due within 30 days following receipt by the

institution of notice of the violation. Funds collected under

this subsection and any returns on the funds shall be deposited

into the Tobacco Settlement Fund established under the act of

June 26, 2001 (P.L.755, No.77), known as the Tobacco Settlement

Act.

Section 4208.  Fair marketing standards.

Every insurer and producer must meet the following standards,

as appropriate:

(1)  An insurer that offers small group health benefit

plans shall offer to small employers all of the small group

health benefit plans that the insurer actively markets in

this Commonwealth. An insurer shall be considered to be

actively marketing a small group health benefit plan if it

offers that plan to any small group not currently covered by

that insurer.

(2)  The following shall apply:

(i)  Except as provided in subparagraph (ii), a

producer or an insurer that provides small group health

benefit plans shall not encourage or direct a small

employer to refrain from filing an application for

coverage with the insurer or seek coverage from another

insurer because of a health status-related factor or the

nature of the industry, occupation or geographic location

of the small employer.

(ii)  The provisions of subparagraph (i) shall not

apply with respect to information provided by an insurer

or producer to a small employer regarding an established

geographic service area or a restricted network provision

of an insurer.

(3)  An insurer that provides small group health benefit

plans shall not enter into a contract, agreement or

arrangement that provides for or results in a producer's

compensation being varied because of a health status-related

factor or the nature of the industry or occupation of the

small employer.

(4)  An insurer that provides small group health benefit

plans shall not terminate, fail to renew or limit its

contract or agreement with a producer for a reason or reasons

related to a health status-related factor or occupation of

the small employer.

(5)  A producer or insurer that provides small group

health benefit plans shall not induce or encourage a small

employer to exclude an employee or the employee's dependents

from health coverage or benefits available under the plan.

Section 4209.  Reporting requirements.

(a)  Health insurance region small group market share.--Not

less frequently than March 1 of every calendar year, the

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department may require each insurer group shall to file a report

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with the department of the insurer group's small group market

share by health insurance region and the small group market

share of each insurer within the insurer group by health

insurance region, for the immediately preceding calendar year.

(b)  Health insurance market reports.--Not less frequently

than March 1 of every calendar year, the department may require 

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each insurer and each insurer group shall to file the following

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reports with the department:

(1)  Aggregate financial information for the preceding

year derived from each insurer's NAIC annual statement blank

or, if unavailable not available from the annual statement 

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blank, from other certifiable records:

(i)  Amount Total amount of general administrative

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expenses, including identification of the five largest

nonmedical administrative expenses.

(ii)  Amount Total amount of surplus maintained.

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(iii)  Amount Total amount of reserves maintained for

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unpaid claims.

(iv)  Net Total net underwriting gain or loss.

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(v)  Insurer's net income after taxes.

(2)  Market information for the preceding calendar year,

derived from each insurer's NAIC annual statement blank or,

if unavailable not available from the annual statement blank,

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from other certifiable records, segmented both Statewide and

by health insurance region, segregated for the individual

market, the small group market and the large group market:

(i)  Number Total number of members as of December

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31.

(ii)  Number Total number of member months.

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(iii)  Premiums earned.

(iv)  Incurred medical claims costs.

(v)  Medical loss ratio.

(vi)  Average premium per member per month for the

reporting year, derived by dividing total earned premiums

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by total member months.

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(vii)  Average premium per member per month for the

preceding reporting year, derived by dividing total 

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earned premiums by total member months.

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(viii)  A description of each rating method used to

determine rates indicating the specific group size for

which each method was used.

(ix)  A listing of all factors used in the rating for

each market and the range of these factors.

(3)  Aggregate market information for the preceding year

derived from each insurer's NAIC annual statement blank or,

if unavailable not there available, from other certifiable

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records, for covered lives in Pennsylvania by individual

market, small group market and large group market:

(i)  Number Total number of members covered by

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entities with administrative services contracts or

administrative services-only arrangements.

(ii)  Number Total number of members covered by

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associations or out-of-State trusts covering lives in

Pennsylvania.

(c)  Submission.--Each report required by this section shall

be electronically submitted in a format and according to

instructions prescribed by the department.

(d)  Review of reports.--By July 1 of each year, the

department shall review the reports provided for under

subsection (a) and shall transmit to the Legislative Reference

Bureau for publication in the Pennsylvania Bulletin a statement

of the status of each insurer within each region in which the

insurer provides coverage.

(e)  Public access.--The department shall make the

information reported under this section available to the public

through a searchable public Internet website.

(f)  Data calls.--The department may issue data calls as

necessary to fulfill the requirements of this article. Any data

calls issued under this section shall be published in the

Pennsylvania Bulletin.

(g)  Limitation.--The department shall have discretion to

modify the reporting requirements of this section by

transmitting notice to the Legislative Reference Bureau for

publication in the Pennsylvania Bulletin.

(h)  Compliance.--For failure to comply with any reports or

data calls required under this section, the commissioner shall

impose an administrative penalty of $1,000 against each insurer

or $5,000 against each insurer group for every day that the

report or data is not provided in accordance with this section.

(i)  Definition.--As used in this section, specifically for

purposes of the reporting required in subsection (b), member

means an individual person covered by a health benefit plan, an

association or an out-of-State trust. The term includes

dependents.

Section 4210.  Regulations.

(a)  Implementation and administration.--The department and

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the Department of Education may shall promulgate regulations as

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necessary for the implementation and administration of this

article.

(b)  Exemption.--Except for the regulations promulgated under

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section 4211, the promulgation of regulations under this article

by the department or the Department of Education shall, until

three years from the effective date of this section, be exempt

from the following:

(1)  Sections 201, 202, 203, 204 and 205 of the

Commonwealth Documents Law.

(2)  The Commonwealth Attorneys Act.

(3)  The Regulatory Review Act.

The department may promulgate regulations as necessary for the

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implementation of this act.

Section 4211.  Small employer groups.

A group of two or more small employers may join together for

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the purpose of purchasing small group health benefit plans

provided for under this article. The department shall establish

certification requirements and promulgate regulations for

implementation of this section. The regulations shall, at a

minimum, require that purchases made under this section be from

an insurer licensed by the department, and may establish the

minimum number of small employers that may participate in the

group. The regulations may also provide that individuals may

participate in the small group health plans.

(a)  Formation authority.--A group of two or more small

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employers may form a purchasing group for the purpose of

purchasing a small group health benefit plan provided for under

this article from an insurer.

(b)  Certification.--No insurance policy may be issued,

delivered or renewed to a purchasing group unless that

purchasing group has a valid certification from the department.

(c)  Regulations.--The department may promulgate regulations,

including certification requirements, as necessary for the

implementation and administration of this section.

(d)  Minimum number in group.--The regulations may establish

a minimum number of small employers that may form and

participate in a purchasing group. The regulations may also

provide that individuals may participate in a purchasing group.

(e)  Certification subject to criteria.--Unless certification

requirements are promulgated, certification under this

subsection shall be subject to the criteria set forth in section

621.2(a)(5.1).

(f)  Applicability.--The provisions of this section shall

apply notwithstanding the provisions of section 621.2(a)(2).

Section 4212.  Enforcement.

(a)  Determination of violation.--Upon a determination that a

person licensed by the department has violated any provision of

this article, the commissioner may, subject to 2 Pa.C.S. Chs. 5

Subch. A (relating to practice and procedure of Commonwealth

agencies) and 7 Subch. A (relating to judicial review of

Commonwealth agency action), do any of the following:

(1)  Issue an order requiring the person to cease and

desist from engaging in the violation.

(2)  Suspend or revoke or refuse to issue or renew the

certificate or license of the offending party or parties.

(3)  Impose an administrative penalty of up to $5,000 for

each violation.

(4)  Seek restitution.

(5)  Impose any other penalty or pursue any other remedy

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deemed appropriate by the commissioner.

(b)  Other remedies.--The enforcement remedies imposed under

this section shall be in addition to any other remedies or

penalties that may be imposed by any other statute, including:

(1)  The act of July 22, 1974 (P.L.589, No.205), known as

the Unfair Insurance Practices Act. A violation by any person

of this article is deemed an unfair method of competition and

an unfair or deceptive act or practice pursuant to the Unfair

Insurance Practices Act.

(2)  The act of December 18, 1996 (P.L.1066, No.159),

known as the Accident and Health Filing Reform Act.

Section 2.  Repeals are as follows:

(1)  The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of

Article XLII of the act.

(2)  Section 3 of the act of December 18, 1996 (P.L.1066,

No.159), known as the Accident and Health Filing Reform Act,

is repealed insofar as it applies to small group health

benefit plan rates.

(3)  All other acts and parts of acts are repealed

insofar as they are inconsistent with the addition of Article

XLII of the act.

Section 3.  This act shall take effect immediately.