42 U.S.C. § 300e–9 — Employees’ health benefits plans

(a) Regulations; membership option Under rules the Secretary writes, some employers must offer workers the choice to join a qualified health maintenance organization (HMO). This covers (1) any employer that must pay the federal minimum wage — or would have to, except for the exemption in section 213(a) of title 29 — and that employed an average of at least 25 workers in a calendar quarter, and (2) any State or local government that employed an average of at least 25 workers in a calendar quarter, if it wants continued funding under sections 247b, 247c, or 300a. These employers must offer HMO membership for the following calendar year if a qualified HMO serves an area where at least 25 of the employer's workers live. Any employer that offers such an HMO must then follow subsection (b). (b) Nondiscriminatory contributions for services; payroll deductions; effect on costs (1) If the employer's health plan includes contributions toward services, the employer must contribute to the HMO option in an amount that doesn't financially discriminate against workers who choose it. A contribution method counts as fair if it applies reasonably to all employees and gives them a genuine choice among plans. (2) If the employer uses payroll deductions for health plan contributions — or offers a plan that needs no employee contribution — the employer must let an employee who joins the HMO pay through payroll deduction too, if the employee agrees. (3) This subsection never forces an employer to pay more for health benefits than a collective bargaining agreement or other binding contract already requires. (c) "Qualified health maintenance organization" defined A "qualified health maintenance organization" is either: (1) an HMO that has satisfied the Secretary it provides basic and supplemental health services and is organized and run the way section 300e(b) and (c) require, or (2) an organization that isn't operating yet but that the Secretary determines will meet those same requirements once it starts. (d) Civil penalty; notice and presentation of views; review (1) An employer that knowingly breaks the rules in subsection (b)(1) or (b)(2) can be fined up to $10,000. If the violation continues, the Secretary can add a new penalty for each 30-day period it continues. The Secretary can collect the penalty through a lawsuit in federal district court. (2) Before assessing a penalty, the Secretary must give the employer notice and a chance to respond. In deciding the penalty amount, the Secretary must weigh how serious the violation was and whether the employer acted in good faith to fix it quickly after being notified. (3) If either side challenges a penalty in court, that side can ask for a full new trial on the penalty — unless an earlier court case already held such a trial on the same assessment. (e) "Employer" defined For this section, "employer" does not include: (1) the federal government, D.C., a U.S. territory, a State, or any of their agencies — except that nonappropriated fund instrumentalities of the federal government still count as employers; or (2) a church or church-run organization that is tax-exempt under section 501(c)(3) of title 26 and that doesn't discriminate in hiring, pay, promotion, or firing, or in giving staff privileges to health workers, because those people sought or gave health care through an HMO. (f) Termination of payment for failure to comply If, after notice and a hearing, the Secretary finds that a State or one of its local governments hasn't followed subsection (b)(1) or (b)(2), the Secretary must stop paying that State under sections 247b, 247c, and 300a. The Secretary must tell the Governor that payments will stay stopped until the Secretary is satisfied the State has fixed the problem.