Page:United States Statutes at Large Volume 110 Part 3.djvu/239

 PUBLIC LAW 104-191—AUG. 21, 1996 110 STAT. 1969 "(1) STATE AUTHORITY.— Subject to section 2723, each State may require that health insurance issuers that issue, sell, renew, or offer health insurance coverage in the State in the small or large group markets meet the requirements of this part with respect to such issuers. "(2) FAILURE TO IMPLEMENT PROVISIONS.— In the case of a determination by the Secretary that a State has failed to substantially enforce a provision (or provisions) in this part with respect to health insurance issuers in the State, the Secretary shall enforce such provision (or provisions) under subsection (b) insofar as they relate to the issuance, sale, renewal, and offering of health insurance coverage in connection with group health plans in such State. "(b) SECRETARIAL ENFORCEMENT AUTHORITY.— "(1) LIMITATION.— The provisions of this subsection shall apply to enforcement of a provision (or provisions) of this part only— "(A) as provided under subsection (a)(2); and "(B) with respect to group health plans that are non- Federal governmental plans. "(2) IMPOSITION OF PENALTIES.—In the cases described in paragraph (1)— "(A) IN GENERAL.— Subject to the succeeding provisions of this subsection, any non-Federal governmental plan that is a group health plan and any health insurance issuer that fails to meet a provision of this part applicable to such plan or issuer is subject to a civil money penalty under this subsection. "(B) LIABILITY FOR PENALTY.—In the case of a failure by— "(i) a health insurance issuer, the issuer is liable for such penalty, or "(ii) a group health plan that is a non-Federal governmental plan which is— "(I) sponsored by 2 or more employers, the plan is liable for such penalty, or "(II) not so sponsored, the employer is liable for such penalty. "(C) AMOUNT OF PENALTY.— "(i) IN GENERAL.—The maximum amount of penalty imposed under this paragraph is $100 for each day for each individual with respect to which such a failure occurs. " (ii) CONSIDERATIONS IN IMPOSITION.—In determining the amount of any penalty to be assessed under this paragraph, the Secretary shall take into account the previous record of compliance of the entity being assessed with the applicable provisions of this part and the gravity of the violation, "(iii) LIMITATIONS.— " (I) PENALTY NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILI- GENCE. — No civil money penalty shall be imposed under this paragraph on any failure during any period for which it is established to the satisfaction of the Secretary that none of the entities against whom the penalty would be imposed knew, or

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