S. 3434 — Health Coverage Across State Lines Act

This section states congressional findings that variations in state health insurance laws and Affordable Care Act implementation impede affordable individual coverage and interstate commerce; that ACA coverage mandates will significantly increase costs; that such coverage is sold electronically and by mail as interstate commerce; that states should collaborate to improve efficiency; and that risk-retention groups provide a successful model for multistate insurance sales under single-state regulation.

This section establishes a new Part F to Title XXVII of the Public Health Service Act concerning cooperative governing of individual health insurance coverage. The new part defines key terms, including (1) primary state, meaning the state designated by a health insurance issuer (licensed and qualified there) whose covered laws govern its individual health insurance coverage, with the designation unchangeable except upon policy renewal; (2) secondary state, meaning any other state (with the issuer deemed to be doing business there); (3) covered laws, meaning state laws on individual health insurance issuance, sale, rating, renewal, operations, and claims administration (excluding provider contracting, network adequacy, or quality assurance); (4) unfair claims settlement practices, meaning 11 specified practices (e.g., misrepresenting policy provisions, failing to promptly investigate or settle claims, or delaying provision of claim forms beyond 15 days); and (5) fraud and abuse, meaning knowing acts or omissions to defraud concerning claims presentation or related material information. (Thus, the framework enables issuers to sell individual health insurance across states under primary-state rules while subjecting them to secondary-state enforcement on solvency, unfair claims practices, and fraud.)

This section provides a severability clause, stating that if any provision of the Act or its application to any person or circumstance is held unconstitutional, the remainder of the Act and the application of the provision to other persons or circumstances shall not be affected.