[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 3962 Engrossed in House (EH)]
111th CONGRESS
1st Session
H. R. 3962
_______________________________________________________________________
AN ACT
To provide affordable, quality health care for all Americans and reduce
the growth in health care spending, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF DIVISIONS, TITLES, AND SUBTITLES.
(a) Short Title.--This Act may be cited as the ``Affordable Health
Care for America Act''.
(b) Table of Divisions, Titles, and Subtitles.--This Act is divided
into divisions, titles, and subtitles as follows:
DIVISION A--AFFORDABLE HEALTH CARE CHOICES
TITLE I--IMMEDIATE REFORMS
TITLE II--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
Subtitle C--Standards Guaranteeing Access to Essential Benefits
Subtitle D--Additional Consumer Protections
Subtitle E--Governance
Subtitle F--Relation to Other Requirements; Miscellaneous
TITLE III--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
Subtitle B--Public Health Insurance Option
Subtitle C--Individual Affordability Credits
TITLE IV--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
Subtitle B--Employer Responsibility
TITLE V--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Subtitle A--Shared Responsibility
Subtitle B--Credit for Small Business Employee Health Coverage Expenses
Subtitle C--Disclosures To Carry Out Health Insurance Exchange
Subsidies
Subtitle D--Other Revenue Provisions
DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS
TITLE I--IMPROVING HEALTH CARE VALUE
Subtitle A--Provisions related to Medicare part A
Subtitle B--Provisions Related to Part B
Subtitle C--Provisions Related to Medicare Parts A and B
Subtitle D--Medicare Advantage Reforms
Subtitle E--Improvements to Medicare Part D
Subtitle F--Medicare Rural Access Protections
TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS
Subtitle A--Improving and Simplifying Financial Assistance for Low
Income Medicare Beneficiaries
Subtitle B--Reducing Health Disparities
Subtitle C--Miscellaneous Improvements
TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
COORDINATED CARE
TITLE IV--QUALITY
Subtitle A--Comparative Effectiveness Research
Subtitle B--Nursing Home Transparency
Subtitle C--Quality Measurements
Subtitle D--Physician Payments Sunshine Provision
Subtitle E--Public Reporting on Health Care-Associated Infections
TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION
TITLE VI--PROGRAM INTEGRITY
Subtitle A--Increased funding to fight waste, fraud, and abuse
Subtitle B--Enhanced penalties for fraud and abuse
Subtitle C--Enhanced Program and Provider Protections
Subtitle D--Access to Information Needed to Prevent Fraud, Waste, and
Abuse
TITLE VII--MEDICAID AND CHIP
Subtitle A--Medicaid and Health Reform
Subtitle B--Prevention
Subtitle C--Access
Subtitle D--Coverage
Subtitle E--Financing
Subtitle F--Waste, Fraud, and Abuse
Subtitle G--Puerto Rico and the Territories
Subtitle H--Miscellaneous
TITLE VIII--REVENUE-RELATED PROVISIONS
TITLE IX--MISCELLANEOUS PROVISIONS
DIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT
TITLE I--COMMUNITY HEALTH CENTERS
TITLE II--WORKFORCE
Subtitle A--Primary Care Workforce
Subtitle B--Nursing Workforce
Subtitle C--Public Health Workforce
Subtitle D--Adapting Workforce to Evolving Health System Needs
TITLE III--PREVENTION AND WELLNESS
TITLE IV--QUALITY AND SURVEILLANCE
TITLE V--OTHER PROVISIONS
Subtitle A--Drug Discount for Rural and Other Hospitals; 340B Program
Integrity
Subtitle B--Programs
Subtitle C--Food and Drug Administration
Subtitle D--Community Living Assistance Services and Supports
Subtitle E--Miscellaneous
DIVISION D--INDIAN HEALTH CARE IMPROVEMENT
TITLE I--AMENDMENTS TO INDIAN LAWS
TITLE II--IMPROVEMENT OF INDIAN HEALTH CARE PROVIDED UNDER THE SOCIAL
SECURITY ACT
DIVISION A--AFFORDABLE HEALTH CARE CHOICES
SEC. 100. PURPOSE; TABLE OF CONTENTS OF DIVISION; GENERAL DEFINITIONS.
(a) Purpose.--
(1) In general.--The purpose of this division is to provide
affordable, quality health care for all Americans and reduce
the growth in health care spending.
(2) Building on current system.--This division achieves
this purpose by building on what works in today's health care
system, while repairing the aspects that are broken.
(3) Insurance reforms.--This division--
(A) enacts strong insurance market reforms;
(B) creates a new Health Insurance Exchange, with a
public health insurance option alongside private plans;
(C) includes sliding scale affordability credits;
and
(D) initiates shared responsibility among workers,
employers, and the Government;
so that all Americans have coverage of essential health
benefits.
(4) Health delivery reform.--This division institutes
health delivery system reforms both to increase quality and to
reduce growth in health spending so that health care becomes
more affordable for businesses, families, and Government.
(b) Table of Contents of Division.--The table of contents of this
division is as follows:
Sec. 100. Purpose; table of contents of division; general definitions.
TITLE I--IMMEDIATE REFORMS
Sec. 101. National high-risk pool program.
Sec. 102. Ensuring value and lower premiums.
Sec. 103. Ending health insurance rescission abuse.
Sec. 104. Sunshine on price gouging by health insurance issuers.
Sec. 105. Requiring the option of extension of dependent coverage for
uninsured young adults.
Sec. 106. Limitations on preexisting condition exclusions in group
health plans in advance of applicability of
new prohibition of preexisting condition
exclusions.
Sec. 107. Prohibiting acts of domestic violence from being treated as
preexisting conditions.
Sec. 108. Ending health insurance denials and delays of necessary
treatment for children with deformities.
Sec. 109. Elimination of lifetime limits.
Sec. 110. Prohibition against postretirement reductions of retiree
health benefits by group health plans.
Sec. 111. Reinsurance program for retirees.
Sec. 112. Wellness program grants.
Sec. 113. Extension of COBRA continuation coverage.
Sec. 114. State Health Access Program grants.
Sec. 115. Administrative simplification.
TITLE II--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
Sec. 201. Requirements reforming health insurance marketplace.
Sec. 202. Protecting the choice to keep current coverage.
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
Sec. 211. Prohibiting preexisting condition exclusions.
Sec. 212. Guaranteed issue and renewal for insured plans and
prohibiting rescissions.
Sec. 213. Insurance rating rules.
Sec. 214. Nondiscrimination in benefits; parity in mental health and
substance abuse disorder benefits.
Sec. 215. Ensuring adequacy of provider networks.
Sec. 216. Requiring the option of extension of dependent coverage for
uninsured young adults.
Sec. 217. Consistency of costs and coverage under qualified health
benefits plans during plan year.
Subtitle C--Standards Guaranteeing Access to Essential Benefits
Sec. 221. Coverage of essential benefits package.
Sec. 222. Essential benefits package defined.
Sec. 223. Health Benefits Advisory Committee.
Sec. 224. Process for adoption of recommendations; adoption of benefit
standards.
Subtitle D--Additional Consumer Protections
Sec. 231. Requiring fair marketing practices by health insurers.
Sec. 232. Requiring fair grievance and appeals mechanisms.
Sec. 233. Requiring information transparency and plan disclosure.
Sec. 234. Application to qualified health benefits plans not offered
through the Health Insurance Exchange.
Sec. 235. Timely payment of claims.
Sec. 236. Standardized rules for coordination and subrogation of
benefits.
Sec. 237. Application of administrative simplification.
Sec. 238. State prohibitions on discrimination against health care
providers.
Sec. 239. Protection of physician prescriber information.
Sec. 240. Dissemination of advance care planning information.
Subtitle E--Governance
Sec. 241. Health Choices Administration; Health Choices Commissioner.
Sec. 242. Duties and authority of Commissioner.
Sec. 243. Consultation and coordination.
Sec. 244. Health Insurance Ombudsman.
Subtitle F--Relation to Other Requirements; Miscellaneous
Sec. 251. Relation to other requirements.
Sec. 252. Prohibiting discrimination in health care.
Sec. 253. Whistleblower protection.
Sec. 254. Construction regarding collective bargaining.
Sec. 255. Severability.
Sec. 256. Treatment of Hawaii Prepaid Health Care Act.
Sec. 257. Actions by State attorneys general.
Sec. 258. Application of State and Federal laws regarding abortion.
Sec. 259. Nondiscrimination on abortion and respect for rights of
conscience.
Sec. 260. Authority of Federal Trade Commission.
Sec. 261. Construction regarding standard of care.
Sec. 262. Restoring application of antitrust laws to health sector
insurers.
Sec. 263. Study and report on methods to increase EHR use by small
health care providers.
Sec. 264. Performance assessment and accountability: application of
GPRA.
Sec. 265. Limitation on abortion funding.
TITLE III--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
Sec. 301. Establishment of Health Insurance Exchange; outline of
duties; definitions.
Sec. 302. Exchange-eligible individuals and employers.
Sec. 303. Benefits package levels.
Sec. 304. Contracts for the offering of Exchange-participating health
benefits plans.
Sec. 305. Outreach and enrollment of Exchange-eligible individuals and
employers in Exchange-participating health
benefits plan.
Sec. 306. Other functions.
Sec. 307. Health Insurance Exchange Trust Fund.
Sec. 308. Optional operation of State-based health insurance exchanges.
Sec. 309. Interstate health insurance compacts.
Sec. 310. Health insurance cooperatives.
Sec. 311. Retention of DOD and VA authority.
Subtitle B--Public Health Insurance Option
Sec. 321. Establishment and administration of a public health insurance
option as an Exchange-qualified health
benefits plan.
Sec. 322. Premiums and financing.
Sec. 323. Payment rates for items and services.
Sec. 324. Modernized payment initiatives and delivery system reform.
Sec. 325. Provider participation.
Sec. 326. Application of fraud and abuse provisions.
Sec. 327. Application of HIPAA insurance requirements.
Sec. 328. Application of health information privacy, security, and
electronic transaction requirements.
Sec. 329. Enrollment in public health insurance option is voluntary.
Sec. 330. Enrollment in public health insurance option by Members of
Congress.
Sec. 331. Reimbursement of Secretary of Veterans Affairs.
Subtitle C--Individual Affordability Credits
Sec. 341. Availability through Health Insurance Exchange.
Sec. 342. Affordable credit eligible individual.
Sec. 343. Affordability premium credit.
Sec. 344. Affordability cost-sharing credit.
Sec. 345. Income determinations.
Sec. 346. Special rules for application to territories.
Sec. 347. No Federal payment for undocumented aliens.
TITLE IV--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
Sec. 401. Individual responsibility.
Subtitle B--Employer Responsibility
Part 1--Health Coverage Participation Requirements
Sec. 411. Health coverage participation requirements.
Sec. 412. Employer responsibility to contribute toward employee and
dependent coverage.
Sec. 413. Employer contributions in lieu of coverage.
Sec. 414. Authority related to improper steering.
Sec. 415. Impact study on employer responsibility requirements.
Sec. 416. Study on employer hardship exemption.
Part 2--Satisfaction of Health Coverage Participation Requirements
Sec. 421. Satisfaction of health coverage participation requirements
under the Employee Retirement Income
Security Act of 1974.
Sec. 422. Satisfaction of health coverage participation requirements
under the Internal Revenue Code of 1986.
Sec. 423. Satisfaction of health coverage participation requirements
under the Public Health Service Act.
Sec. 424. Additional rules relating to health coverage participation
requirements.
TITLE V--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Subtitle A--Provisions Relating to Health Care Reform
Part 1--Shared Responsibility
subpart a--individual responsibility
Sec. 501. Tax on individuals without acceptable health care coverage.
subpart b--employer responsibility
Sec. 511. Election to satisfy health coverage participation
requirements.
Sec. 512. Health care contributions of nonelecting employers.
Part 2--Credit for Small Business Employee Health Coverage Expenses
Sec. 521. Credit for small business employee health coverage expenses.
Part 3--Limitations on Health Care Related Expenditures
Sec. 531. Distributions for medicine qualified only if for prescribed
drug or insulin.
Sec. 532. Limitation on health flexible spending arrangements under
cafeteria plans.
Sec. 533. Increase in penalty for nonqualified distributions from
health savings accounts.
Sec. 534. Denial of deduction for federal subsidies for prescription
drug plans which have been excluded from
gross income.
Part 4--Other Provisions to Carry Out Health Insurance Reform
Sec. 541. Disclosures to carry out health insurance exchange subsidies.
Sec. 542. Offering of exchange-participating health benefits plans
through cafeteria plans.
Sec. 543. Exclusion from gross income of payments made under
reinsurance program for retirees.
Sec. 544. CLASS program treated in same manner as long-term care
insurance.
Sec. 545. Exclusion from gross income for medical care provided for
Indians.
Subtitle B--Other Revenue Provisions
Part 1--General Provisions
Sec. 551. Surcharge on high income individuals.
Sec. 552. Excise tax on medical devices.
Sec. 553. Expansion of information reporting requirements.
Sec. 554. Repeal of worldwide allocation of interest.
Sec. 555. Exclusion of unprocessed fuels from the cellulosic biofuel
producer credit.
Part 2--Prevention of Tax Avoidance
Sec. 561. Limitation on treaty benefits for certain deductible
payments.
Sec. 562. Codification of economic substance doctrine; penalties.
Sec. 563. Certain large or publicly traded persons made subject to a
more likely than not standard for avoiding
penalties on underpayments.
Part 3--Parity in Health Benefits
Sec. 571. Certain health related benefits applicable to spouses and
dependents extended to eligible
beneficiaries.
(c) General Definitions.--Except as otherwise provided, in this
division:
(1) Acceptable coverage.--The term ``acceptable coverage''
has the meaning given such term in section 302(d)(2).
(2) Basic plan.--The term ``basic plan'' has the meaning
given such term in section 303(c).
(3) Commissioner.--The term ``Commissioner'' means the
Health Choices Commissioner established under section 241.
(4) Cost-sharing.--The term ``cost-sharing'' includes
deductibles, coinsurance, copayments, and similar charges, but
does not include premiums, balance billing amounts for non-
network providers, or spending for non-covered services.
(5) Dependent.--The term ``dependent'' has the meaning
given such term by the Commissioner and includes a spouse.
(6) Employment-based health plan.--The term ``employment-
based health plan''--
(A) means a group health plan (as defined in
section 733(a)(1) of the Employee Retirement Income
Security Act of 1974);
(B) includes such a plan that is the following:
(i) Federal, state, and tribal governmental
plans.--A governmental plan (as defined in
section 3(32) of the Employee Retirement Income
Security Act of 1974), including a health
benefits plan offered under chapter 89 of title
5, United States Code.
(ii) Church plans.--A church plan (as
defined in section 3(33) of the Employee
Retirement Income Security Act of 1974); and
(C) excludes coverage described in section
302(d)(2)(E) (relating to TRICARE).
(7) Enhanced plan.--The term ``enhanced plan'' has the
meaning given such term in section 303(c).
(8) Essential benefits package.--The term ``essential
benefits package'' is defined in section 222(a).
(9) Exchange-participating health benefits plan.--The term
``Exchange-participating health benefits plan'' means a
qualified health benefits plan that is offered through the
Health Insurance Exchange and may be purchased directly from
the entity offering the plan or through enrollment agents and
brokers.
(10) Family.--The term ``family'' means an individual and
includes the individual's dependents.
(11) Federal poverty level; fpl.--The terms ``Federal
poverty level'' and ``FPL'' have the meaning given the term
``poverty line'' in section 673(2) of the Community Services
Block Grant Act (42 U.S.C. 9902(2)), including any revision
required by such section.
(12) Health benefits plan.--The term ``health benefits
plan'' means health insurance coverage and an employment-based
health plan and includes the public health insurance option.
(13) Health insurance coverage.--The term ``health
insurance coverage'' has the meaning given such term in section
2791 of the Public Health Service Act, but does not include
coverage in relation to its provision of excepted benefits--
(A) described in paragraph (1) of subsection (c) of
such section; or
(B) described in paragraph (2), (3), or (4) of such
subsection if the benefits are provided under a
separate policy, certificate, or contract of insurance.
(14) Health insurance issuer.--The term ``health insurance
issuer'' has the meaning given such term in section 2791(b)(2)
of the Public Health Service Act.
(15) Health insurance exchange.--The term ``Health
Insurance Exchange'' means the Health Insurance Exchange
established under section 301.
(16) Indian.--The term ``Indian'' has the meaning given
such term in section 4 of the Indian Health Care Improvement
Act (24 U.S.C. 1603).
(17) Indian health care provider.--The term ``Indian health
care provider'' means a health care program operated by the
Indian Health Service, an Indian tribe, tribal organization, or
urban Indian organization as such terms are defined in section
4 of the Indian Health Care Improvement Act (25 U.S.C. 1603).
(18) Medicaid.--The term ``Medicaid'' means a State plan
under title XIX of the Social Security Act (whether or not the
plan is operating under a waiver under section 1115 of such
Act).
(19) Medicaid eligible individual.--The term ``Medicaid
eligible individual'' means an individual who is eligible for
medical assistance under Medicaid.
(20) Medicare.--The term ``Medicare'' means the health
insurance programs under title XVIII of the Social Security
Act.
(21) Plan sponsor.--The term ``plan sponsor'' has the
meaning given such term in section 3(16)(B) of the Employee
Retirement Income Security Act of 1974.
(22) Plan year.--The term ``plan year'' means--
(A) with respect to an employment-based health
plan, a plan year as specified under such plan; or
(B) with respect to a health benefits plan other
than an employment-based health plan, a 12-month period
as specified by the Commissioner.
(23) Premium plan; premium-plus plan.--The terms ``premium
plan'' and ``premium-plus plan'' have the meanings given such
terms in section 303(c).
(24) QHBP offering entity.--The terms ``QHBP offering
entity'' means, with respect to a health benefits plan that
is--
(A) a group health plan (as defined, subject to
subsection (d), in section 733(a)(1) of the Employee
Retirement Income Security Act of 1974), the plan
sponsor in relation to such group health plan, except
that, in the case of a plan maintained jointly by 1 or
more employers and 1 or more employee organizations and
with respect to which an employer is the primary source
of financing, such term means such employer;
(B) health insurance coverage, the health insurance
issuer offering the coverage;
(C) the public health insurance option, the
Secretary of Health and Human Services;
(D) a non-Federal governmental plan (as defined in
section 2791(d) of the Public Health Service Act), the
State or political subdivision of a State (or agency or
instrumentality of such State or subdivision) which
establishes or maintains such plan; or
(E) a Federal governmental plan (as defined in
section 2791(d) of the Public Health Service Act), the
appropriate Federal official.
(25) Qualified health benefits plan.--The term ``qualified
health benefits plan'' means a health benefits plan that--
(A) meets the requirements for such a plan under
title II and includes the public health insurance
option; and
(B) is offered by a QHBP offering entity that meets
the applicable requirements of such title with respect
to such plan.
(26) Public health insurance option.--The term ``public
health insurance option'' means the public health insurance
option as provided under subtitle B of title III.
(27) Service area; premium rating area.--The terms
``service area'' and ``premium rating area'' mean with respect
to health insurance coverage--
(A) offered other than through the Health Insurance
Exchange, such an area as established by the QHBP
offering entity of such coverage in accordance with
applicable State law; and
(B) offered through the Health Insurance Exchange,
such an area as established by such entity in
accordance with applicable State law and applicable
rules of the Commissioner for Exchange-participating
health benefits plans.
(28) State.--The term ``State'' means the 50 States and the
District of Columbia and includes--
(A) for purposes of title I, Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the Northern
Mariana Islands; and
(B) for purposes of titles II and III, as elected
under and subject to section 346, Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the Northern
Mariana Islands.
(29) State medicaid agency.--The term ``State Medicaid
agency'' means, with respect to a Medicaid plan, the single
State agency responsible for administering such plan under
title XIX of the Social Security Act.
(30) Y1, y2, etc.--The terms ``Y1'', ``Y2'', ``Y3'',
``Y4'', ``Y5'', and similar subsequently numbered terms, mean
2013 and subsequent years, respectively.
TITLE I--IMMEDIATE REFORMS
SEC. 101. NATIONAL HIGH-RISK POOL PROGRAM.
(a) In General.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall establish a
temporary national high-risk pool program (in this section referred to
as the ``program'') to provide health benefits to eligible individuals
during the period beginning on January 1, 2010, and, subject to
subsection (h)(3)(B), ending on the date on which the Health Insurance
Exchange is established.
(b) Administration.--The Secretary may carry out this section
directly or, pursuant to agreements, grants, or contracts with States,
through State high-risk pool programs provided that the requirements of
this section are met. For a State without a high-risk pool program, the
Secretary may work with the State to coordinate with other forms of
coverage expansions, such as State public-private partnerships.
(c) Eligibility.--For purposes of this section, the term ``eligible
individual'' means an individual who meets the requirements of
subsection (i)(1)--
(1) who--
(A) is not eligible for--
(i) benefits under title XVIII, XIX, or XXI
of the Social Security Act; or
(ii) coverage under an employment-based
health plan (not including coverage under a
COBRA continuation provision, as defined in
section 107(d)(1)); and
(B) who--
(i) is an eligible individual under section
2741(b) of the Public Health Service Act; or
(ii) is medically eligible for the program
by virtue of being an individual described in
subsection (d) at any time during the 6-month
period ending on the date the individual
applies for high-risk pool coverage under this
section;
(2) who is the spouse or dependent of an individual who is
described in paragraph (1);
(3) who has not had health insurance coverage or coverage
under an employment-based health plan for at least the 6-month
period immediately preceding the date of the individual's
application for high-risk pool coverage under this section; or
(4) who on or after October 29, 2009, had employment-based
retiree health coverage (as defined in subsection (i)) and the
annual increase in premiums for such individual under such
coverage (for any coverage period beginning on or after such
date) exceeds such excessive percentage as the Secretary shall
specify.
For purposes of paragraph (1)(A)(ii), a person who is in a waiting
period as defined in section 2701(b)(4) of the Public Health Service
Act shall not be considered to be eligible for coverage under an
employment-based health plan.
(d) Medically Eligible Requirements.--For purposes of subsection
(c)(1)(B)(ii), an individual described in this subsection is an
individual--
(1) who, during the 6-month period ending on the date the
individual applies for high-risk pool coverage under this
section applied for individual health insurance coverage and--
(A) was denied such coverage because of a
preexisting condition or health status; or
(B) was offered such coverage--
(i) under terms that limit the coverage for
such a preexisting condition; or
(ii) at a premium rate that is above the
premium rate for high risk pool coverage under
this section; or
(2) who has an eligible medical condition as defined by the
Secretary.
In making a determination under paragraph (1) of whether an individual
was offered individual coverage at a premium rate above the premium
rate for high risk pool coverage, the Secretary shall make adjustments
to offset differences in premium rating that are attributable solely to
differences in age rating.
(e) Enrollment.--To enroll in coverage in the program, an
individual shall--
(1) submit to the Secretary an application for
participation in the program, at such time, in such manner, and
containing such information as the Secretary shall require;
(2) attest, consistent with subsection (i)(2), that the
individual is an eligible individual and is a resident of one
of the 50 States or the District of Columbia; and
(3) if the individual had other prior health insurance
coverage or coverage under an employment-based health plan
during the previous 6 months, provide information as to the
nature and source of such coverage and reasons for its
discontinuance.
(f) Protection Against Dumping Risks by Insurers.--
(1) In general.--The Secretary shall establish criteria for
determining whether health insurance issuers and employment-
based health plans have discouraged an individual from
remaining enrolled in prior coverage based on that individual's
health status.
(2) Sanctions.--An issuer or employment-based health plan
shall be responsible for reimbursing the program for the
medical expenses incurred by the program for an individual who,
based on criteria established by the Secretary, the Secretary
finds was encouraged by the issuer to disenroll from health
benefits coverage prior to enrolling in the program. The
criteria shall include at least the following circumstances:
(A) In the case of prior coverage obtained through
an employer, the provision by the employer, group
health plan, or the issuer of money or other financial
consideration for disenrolling from the coverage.
(B) In the case of prior coverage obtained directly
from an issuer or under an employment-based health
plan--
(i) the provision by the issuer or plan of
money or other financial consideration for
disenrolling from the coverage; or
(ii) in the case of an individual whose
premium for the prior coverage exceeded the
premium required by the program (adjusted based
on the age factors applied to the prior
coverage)--
(I) the prior coverage is a policy
that is no longer being actively
marketed (as defined by the Secretary)
by the issuer; or
(II) the prior coverage is a policy
for which duration of coverage form
issue or health status are factors that
can be considered in determining
premiums at renewal.
(3) Construction.--Nothing in this subsection shall be
construed as constituting exclusive remedies for violations of
criteria established under paragraph (1) or as preventing
States from applying or enforcing such paragraph or other
provisions under law with respect to health insurance issuers.
(g) Covered Benefits, Cost-sharing, Premiums, and Consumer
Protections.--
(1) Premium.--The monthly premium charged to eligible
individuals for coverage under the program--
(A) may vary by age so long as the ratio of the
highest such premium to the lowest such premium does
not exceed the ratio of 2 to 1;
(B) shall be set at a level that does not exceed
125 percent of the prevailing standard rate for
comparable coverage in the individual market; and
(C) shall be adjusted for geographic variation in
costs.
Health insurance issuers shall provide such information as the
Secretary may require to determine prevailing standard rates
under this paragraph. The Secretary shall establish standard
rates in consultation with the National Association of
Insurance Commissioners.
(2) Covered benefits.--Covered benefits under the program
shall be determined by the Secretary and shall be consistent
with the basic categories in the essential benefits package
described in section 222. Under such benefits package--
(A) the annual deductible for such benefits may not
be higher than $1,500 for an individual or such higher
amount for a family as determined by the Secretary;
(B) there may not be annual or lifetime limits; and
(C) the maximum cost-sharing with respect to an
individual (or family) for a year shall not exceed
$5,000 for an individual (or $10,000 for a family).
(3) No preexisting condition exclusion periods.--No
preexisting condition exclusion period shall be imposed on
coverage under the program.
(4) Appeals.--The Secretary shall establish an appeals
process for individuals to appeal a determination of the
Secretary--
(A) with respect to claims submitted under this
section; and
(B) with respect to eligibility determinations made
by the Secretary under this section.
(5) State contribution, maintenance of effort.--As a
condition of providing health benefits under this section to
eligible individual residing in a State--
(A) in the case of a State in which a qualified
high-risk pool (as defined under section 2744(c)(2) of
the Public Health Service Act) was in effect as of July
1, 2009, the Secretary shall require the State make a
maintenance of effort payment each year that the high-
risk pool is in effect equal to an amount not less than
the amount of all sources of funding for high-risk pool
coverage made by that State in the year ending July 1,
2009; and
(B) in the case of a State which required health
insurance issuers to contribute to a State high-risk
pool or similar arrangement for the assessment against
such issuers for pool losses, the State shall maintain
such a contribution arrangement among such issuers.
(6) Limiting program expenditures.--The Secretary shall,
with respect to the program--
(A) establish procedures to protect against fraud,
waste, and abuse under the program; and
(B) provide for other program integrity methods.
(7) Treatment as creditable coverage.--Coverage under the
program shall be treated, for purposes of applying the
definition of ``creditable coverage'' under the provisions of
title XXVII of the Public Health Service Act, part 6 of
subtitle B of title I of Employee Retirement Income Security
Act of 1974, and chapter 100 of the Internal Revenue Code of
1986 (and any other provision of law that references such
provisions) in the same manner as if it were coverage under a
State health benefits risk pool described in section
2701(c)(1)(G) of the Public Health Service Act.
(h) Funding; Termination of Authority.--
(1) In general.--There is appropriated to the Secretary,
out of any moneys in the Treasury not otherwise appropriated,
$5,000,000,000 to pay claims against (and administrative costs
of) the high-risk pool under this section in excess of the
premiums collected with respect to eligible individuals
enrolled in the high-risk pool. Such funds shall be available
without fiscal year limitation.
(2) Insufficient funds.--If the Secretary estimates for any
fiscal year that the aggregate amounts available for payment of
expenses of the high-risk pool will be less than the amount of
the expenses, the Secretary shall make such adjustments as are
necessary to eliminate such deficit, including reducing
benefits, increasing premiums, or establishing waiting lists.
(3) Termination of authority.--
(A) In general.--Except as provided in subparagraph
(B), coverage of eligible individuals under a high-risk
pool shall terminate as of the date on which the Health
Insurance Exchange is established.
(B) Transition to exchange.--The Secretary shall
develop procedures to provide for the transition of
eligible individuals who are enrolled in health
insurance coverage offered through a high-risk pool
established under this section to be enrolled in
acceptable coverage. Such procedures shall ensure that
there is no lapse in coverage with respect to the
individual and may extend coverage offered through such
a high-risk pool beyond 2012 if the Secretary
determines necessary to avoid such a lapse.
(i) Application and Verification of Requirement of Citizenship or
Lawful Presence in the United States.--
(1) Requirement.--No individual shall be an eligible
individual under this section unless the individual is a
citizen or national of the United States or is lawfully present
in a State in the United States (other than as a nonimmigrant
described in a subparagraph (excluding subparagraphs (K), (T),
(U), and (V)) of section 101(a)(15) of the Immigration and
Nationality Act).
(2) Application of verification process for affordability
credits.--The provisions of paragraphs (4) (other than
subparagraphs (F) and (H)(i)) and (5)(A) of section 341(b), and
of subsections (v) (other than paragraph (3)) and (x) of
section 205 of the Social Security Act, shall apply to the
verification of eligibility of an eligible individual by the
Secretary (or by a State agency approved by the Secretary) for
benefits under this section in the same manner as such
provisions apply to the verification of eligibility of an
affordable credit eligible individual for affordability credits
by the Commissioner under section 341(b). The agreement
referred to in section 205(v)(2)(A) of the Social Security Act
(as applied under this paragraph) shall also provide for
funding, to be payable from the amount made available under
subsection (h)(1), to the Commissioner of Social Security in
such amount as is agreed to by such Commissioner and the
Secretary.
(j) Employment-based Retiree Health Coverage.--In this section, the
term ``employment-based retiree health coverage'' means health
insurance or other coverage of health care costs (whether provided by
voluntary insurance coverage or pursuant to statutory or contractual
obligation) for individuals (or for such individuals and their spouses
and dependents) under a group health plan based on their status as
retired participants in such plan.
SEC. 102. ENSURING VALUE AND LOWER PREMIUMS.
(a) Group Health Insurance Coverage.--Title XXVII of the Public
Health Service Act is amended by inserting after section 2713 the
following new section:
``SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.
``(a) In General.--Each health insurance issuer that offers health
insurance coverage in the small or large group market shall provide
that for any plan year in which the coverage has a medical loss ratio
below a level specified by the Secretary (but not less than 85
percent), the issuer shall provide in a manner specified by the
Secretary for rebates to enrollees of the amount by which the issuer's
medical loss ratio is less than the level so specified.
``(b) Implementation.--The Secretary shall establish a uniform
definition of medical loss ratio and methodology for determining how to
calculate it based on the average medical loss ratio in a health
insurance issuer's book of business for the small and large group
market. Such methodology shall be designed to take into account the
special circumstances of smaller plans, different types of plans, and
newer plans. In determining the medical loss ratio, the Secretary shall
exclude State taxes and licensing or regulatory fees. Such methodology
shall be designed and exceptions shall be established to ensure
adequate participation by health insurance issuers, competition in the
health insurance market, and value for consumers so that their premiums
are used for services.
``(c) Sunset.--Subsections (a) and (b) shall not apply to health
insurance coverage on and after the first date that health insurance
coverage is offered through the Health Insurance Exchange.''.
(b) Individual Health Insurance Coverage.--Such title is further
amended by inserting after section 2753 the following new section:
``SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.
``The provisions of section 2714 shall apply to health insurance
coverage offered in the individual market in the same manner as such
provisions apply to health insurance coverage offered in the small or
large group market except to the extent the Secretary determines that
the application of such section may destabilize the existing individual
market.''.
(c) Immediate Implementation.--The amendments made by this section
shall apply in the group and individual market for plan years beginning
on or after January 1, 2010, or as soon as practicable after such date.
SEC. 103. ENDING HEALTH INSURANCE RESCISSION ABUSE.
(a) Clarification Regarding Application of Guaranteed Renewability
of Individual and Group Health Insurance Coverage.--Sections 2712 and
2742 of the Public Health Service Act (42 U.S.C. 300gg-12, 300gg-42)
are each amended--
(1) in its heading, by inserting ``and continuation in
force, including prohibition of rescission,'' after
``guaranteed renewability''; and
(2) in subsection (a), by inserting ``, including without
rescission,'' after ``continue in force''.
(b) Secretarial Guidance Regarding Rescissions.--
(1) Group health insurance market.--Section 2712 of such
Act (42 U.S.C. 300gg-12) is amended by adding at the end the
following:
``(f) Rescission.--A health insurance issuer may rescind group
health insurance coverage only upon clear and convincing evidence of
fraud described in subsection (b)(2), under procedures that provide for
independent, external third-party review.''.
(2) Individual health market.--Section 2742 of such Act (42
U.S.C. 300gg-42) is amended by adding at the end the following:
``(f) Rescission.--A health insurance issuer may rescind individual
health insurance coverage only upon clear and convincing evidence of
fraud described in subsection (b)(2), under procedures that provide for
independent, external third-party review.''.
(3) Guidance.--The Secretary of Health and Human Services,
no later than 90 days after the date of the enactment of this
Act, shall issue guidance implementing the amendments made by
paragraphs (1) and (2), including procedures for independent,
external third-party review.
(c) Opportunity for Independent, External Third-party Review in
Certain Cases.--
(1) Individual market.--Subpart 1 of part B of title XXVII
of such Act (42 U.S.C. 300gg-41 et seq.) is amended by adding
at the end the following:
``SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD-PARTY REVIEW
IN CASES OF RESCISSION.
``(a) Notice and Review Right.--If a health insurance issuer
determines to rescind health insurance coverage for an individual in
the individual market, before such rescission may take effect the
issuer shall provide the individual with notice of such proposed
rescission and an opportunity for a review of such determination by an
independent, external third-party under procedures specified by the
Secretary under section 2742(f).
``(b) Independent Determination.--If the individual requests such
review by an independent, external third-party of a rescission of
health insurance coverage, the coverage shall remain in effect until
such third party determines that the coverage may be rescinded under
the guidance issued by the Secretary under section 2742(f).''.
(2) Application to group health insurance.--Such title is
further amended by adding after section 2702 the following new
section:
``SEC. 2703. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD-PARTY REVIEW
IN CASES OF RESCISSION.
``The provisions of section 2746 shall apply to group health
insurance coverage in the same manner as such provisions apply to
individual health insurance coverage, except that any reference to
section 2742(f) is deemed a reference to section 2712(f).''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and shall apply to
rescissions occurring on and after July 1, 2010, with respect to health
insurance coverage issued before, on, or after such date.
SEC. 104. SUNSHINE ON PRICE GOUGING BY HEALTH INSURANCE ISSUERS.
(a) Initial Premium Review Process.--
(1) In general.--The Secretary of Health and Human
Services, in conjunction with States, shall establish a process
for the annual review, beginning with 2010 and subject to
subsection (c)(3)(A), of increases in premiums for health
insurance coverage.
(2) Justification and disclosure.-- Such process shall
require health insurance issuers to submit a justification for
any premium increase prior to implementation of the increase.
Such issuers shall prominently post such information on their
websites. The Secretary shall ensure the public disclosure of
information on such increases and justifications for all health
insurance issuers.
(b) Continuing Premium Review Process.--
(1) Informing commissioner of premium increase patterns.--
As a condition of receiving a grant under subsection (c)(1), a
State, through its Commissioner of Insurance, shall--
(A) provide the Health Choices Commissioner with
information about trends in premium increases in health
insurance coverage in premium rating areas in the
State; and
(B) make recommendations, as appropriate, to such
Commissioner about whether particular health insurance
issuers should be excluded from participation in the
Health Insurance Exchange based on a pattern of
excessive or unjustified premium increases.
(2) Commissioner authority regarding exchange
participation.--In making determinations concerning entering
into contracts with QHBP offering entities for the offering of
Exchange-participating health plans under section 304, the
Commissioner shall take into account the information and
recommendations provided under paragraph (1).
(3) Monitoring by commissioner of premium increases.--
(A) In general.--Beginning in 2014, the
Commissioner, in conjunction with the States and in
place of the monitoring by the Secretary under
subsection (a)(1) and consistent with the provisions of
subsection (a)(2), shall monitor premium increases of
health insurance coverage offered inside the Health
Insurance Exchange under section 304 and outside of the
Exchange.
(B) Consideration in opening exchange.--In
determining under section 302(e)(4) whether to make
additional larger employers eligible to participate in
the Health Insurance Exchange, the Commissioner shall
take into account any excess of premium growth outside
the Exchange as compared to the rate of such growth
inside the Exchange, including information reported by
the States.
(c) Grants in Support of Process.--
(1) Premium review grants during 2010 through 2014.--The
Secretary shall carry out a program of grants to States during
the 5-year period beginning with 2010 to assist them in
carrying out subsection (a), including--
(A) in reviewing and, if appropriate under State
law, approving premium increases for health insurance
coverage; and
(B) in providing information and recommendations to
the Commissioner under subsection (b)(1).
(2) Funding.--
(A) In general.--Out of any funds in the Treasury
not otherwise appropriated, there are appropriated to
the Secretary $1,000,000,000, to be available for
expenditure for grants under paragraph (1) and
subparagraph (B).
(B) Further availability for insurance reform and
consumer protection grants.--If the amounts
appropriated under subparagraph (A) are not fully
obligated under grants under paragraph (1) by the end
of 2014, any remaining funds shall remain available to
the Secretary for grants to States for planning and
implementing the insurance reforms and consumer
protections under title II.
(C) Allocation.--The Secretary shall establish a
formula for determining the amount of any grant to a
State under this subsection. Under such formula--
(i) the Secretary shall consider the number
of plans of health insurance coverage offered
in each State and the population of the State;
and
(ii) no State qualifying for a grant under
paragraph (1) shall receive less than
$1,000,000, or more than $5,000,000 for a grant
year.
SEC. 105. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE FOR
UNINSURED YOUNG ADULTS.
(a) Under Group Health Plans.--
(1) PHSA.--Title XXVII of the Public Health Service Act is
amended by inserting after section 2702 the following new
section:
``SEC. 2703. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE
FOR UNINSURED YOUNG ADULTS.
``(a) In General.--A group health plan and a health insurance
issuer offering health insurance coverage in connection with a group
health plan that provides coverage for dependent children shall make
available such coverage, at the option of the participant involved, for
one or more qualified children (as defined in subsection (b)) of the
participant.
``(b) Qualified Child Defined.--In this section, the term
`qualified child' means, with respect to a participant in a group
health plan or group health insurance coverage, an individual who (but
for age) would be treated as a dependent child of the participant under
such plan or coverage and who--
``(1) is under 27 years of age; and
``(2) is not enrolled as a participant, beneficiary, or
enrollee (other than under this section, section 2746, or
section 704 of the Employee Retirement Income Security Act of
1974) under any health insurance coverage or group health plan.
``(c) Premiums.--Nothing in this section shall be construed as
preventing a group health plan or health insurance issuer with respect
to group health insurance coverage from increasing the premiums
otherwise required for coverage provided under this section consistent
with standards established by the Secretary based upon family size.''.
(2) Employee retirement income security act of 1974.--
(A) In general.--Part 7 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 is
amended by inserting after section 703 the following
new section:
``SEC. 704. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE FOR
UNINSURED YOUNG ADULTS.
``(a) In General.--A group health plan and a health insurance
issuer offering health insurance coverage in connection with a group
health plan that provides coverage for dependent children shall make
available such coverage, at the option of the participant involved, for
one or more qualified children (as defined in subsection (b)) of the
participant.
``(b) Qualified Child Defined.--In this section, the term
`qualified child' means, with respect to a participant in a group
health plan or group health insurance coverage, an individual who (but
for age) would be treated as a dependent child of the participant under
such plan or coverage and who--
``(1) is under 27 years of age; and
``(2) is not enrolled as a participant, beneficiary, or
enrollee (other than under this section) under any health
insurance coverage or group health plan.
``(c) Premiums.--Nothing in this section shall be construed as
preventing a group health plan or health insurance issuer with respect
to group health insurance coverage from increasing the premiums
otherwise required for coverage provided under this section consistent
with standards established by the Secretary based upon family size.''.
(B) Clerical amendment.--The table of contents of
such Act is amended by inserting after the item
relating to section 703 the following new item:
``Sec. 704. Requiring the option of extension of dependent coverage for
uninsured young adults.''.
(3) IRC.--
(A) In general.--Subchapter A of chapter 100 of the
Internal Revenue Code of 1986 is amended by adding at
the end the following new section:
``SEC. 9804. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE
FOR UNINSURED YOUNG ADULTS.
``(a) In General.--A group health plan that provides coverage for
dependent children shall make available such coverage, at the option of
the participant involved, for one or more qualified children (as
defined in subsection (b)) of the participant.
``(b) Qualified Child Defined.--In this section, the term
`qualified child' means, with respect to a participant in a group
health plan, an individual who (but for age) would be treated as a
dependent child of the participant under such plan and who--
``(1) is under 27 years of age; and
``(2) is not enrolled as a participant, beneficiary, or
enrollee (other than under this section, section 704 of the
Employee Retirement Income Security Act of 1974, or section
2704 or 2746 of the Public Health Service Act) under any health
insurance coverage or group health plan.
``(c) Premiums.--Nothing in this section shall be construed as
preventing a group health plan from increasing the premiums otherwise
required for coverage provided under this section consistent with
standards established by the Secretary based upon family size.''.
(B) Clerical amendment.--The table of sections of
such chapter is amended by inserting after the item
relating to section 9803 the following:
``Sec. 9804. Requiring the option of extension of dependent coverage
for uninsured young adults.''.
(b) Individual Health Insurance Coverage.--Title XXVII of the
Public Health Service Act is amended by inserting after section 2745
the following new section:
``SEC. 2746. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE
FOR UNINSURED YOUNG ADULTS.
``The provisions of section 2703 shall apply to health insurance
coverage offered by a health insurance issuer in the individual market
in the same manner as they apply to health insurance coverage offered
by a health insurance issuer in connection with a group health plan in
the small or large group market.''.
(c) Effective Dates.--
(1) Group health plans.--The amendments made by subsection
(a) shall apply to group health plans for plan years beginning
on or after January 1, 2010.
(2) Individual health insurance coverage.--Section 2746 of
the Public Health Service Act, as inserted by subsection (b),
shall apply with respect to health insurance coverage offered,
sold, issued, renewed, in effect, or operated in the individual
market on or after January 1, 2010.
SEC. 106. LIMITATIONS ON PREEXISTING CONDITION EXCLUSIONS IN GROUP
HEALTH PLANS IN ADVANCE OF APPLICABILITY OF NEW
PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS.
(a) Amendments to the Employee Retirement Income Security Act of
1974.--
(1) Reduction in look-back period.--Section 701(a)(1) of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1181(a)(1)) is amended by striking ``6-month period'' and
inserting ``30-day period''.
(2) Reduction in permitted preexisting condition limitation
period.--Section 701(a)(2) of such Act (29 U.S.C. 1181(a)(2))
is amended by striking ``12 months'' and inserting ``3
months'', and by striking ``18 months'' and inserting ``9
months''.
(3) Sunset of interim limitation.--Section 701 of such Act
(29 U.S.C. 1181) is amended by adding at the end the following
new subsection:
``(h) Termination.--This section shall cease to apply to any group
health plan as of the date that such plan becomes subject to the
requirements of section 211 of the (relating to prohibiting preexisting
condition exclusions).''.
(b) Amendments to the Internal Revenue Code of 1986.--
(1) Reduction in look-back period.--Section 9801(a)(1) of
the Internal Revenue Code of 1986 is amended by striking ``6-
month period'' and inserting ``30-day period''.
(2) Reduction in permitted preexisting condition limitation
period.--Section 9801(a)(2) of such Code is amended by striking
``12 months'' and inserting ``3 months'', and by striking ``18
months'' and inserting ``9 months''.
(3) Sunset of interim limitation.--Section 9801 of such
Code is amended by adding at the end the following new
subsection:
``(g) Termination.--This section shall cease to apply to any group
health plan as of the date that such plan becomes subject to the
requirements of section 211 of the Affordable Health Care for America
Act (relating to prohibiting preexisting condition exclusions).''.
(c) Amendments to Public Health Service Act.--
(1) Reduction in look-back period.--Section 2701(a)(1) of
the Public Health Service Act (42 U.S.C. 300gg(a)(1)) is
amended by striking ``6-month period'' and inserting ``30-day
period''.
(2) Reduction in permitted preexisting condition limitation
period.--Section 2701(a)(2) of such Act (42 U.S.C. 300gg(a)(2))
is amended by striking ``12 months'' and inserting ``3
months'', and by striking ``18 months'' and inserting ``9
months''.
(3) Sunset of interim limitation.--Section 2701 of such Act
(42 U.S.C. 300gg) is amended by adding at the end the following
new subsection:
``(h) Termination.--This section shall cease to apply to any group
health plan as of the date that such plan becomes subject to the
requirements of section 211 of the (relating to prohibiting preexisting
condition exclusions).''.
(4) Miscellaneous technical amendment.--Section 2702(a)(2)
of such Act (42 U.S.C. 300gg-1) is amended by striking ``701''
and inserting ``2701''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply with respect to
group health plans for plan years beginning on or after January
1, 2010.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to 1 or
more collective bargaining agreements between employee
representatives and 1 or more employers ratified before the
date of the enactment of this Act, the amendments made by this
section shall not apply to plan years beginning before the
earlier of--
(A) the date on which the last of the collective
bargaining agreements relating to the plan terminates
(determined without regard to any extension thereof
agreed to after the date of the enactment of this Act);
(B) 3 years after the date of the enactment of this
Act.
SEC. 107. PROHIBITING ACTS OF DOMESTIC VIOLENCE FROM BEING TREATED AS
PREEXISTING CONDITIONS.
(a) ERISA.--Section 701(d)(3) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. ) is amended--
(1) in the heading, by inserting ``or domestic violence''
after ``pregnancy''; and
(2) by inserting ``or domestic violence'' after ``relating
to pregnancy''.
(b) PHSA.--
(1) Group market.--Section 2701(d)(3) of the Public Health
Service Act (42 U.S.C. 300gg(d)(3)) is amended--
(A) in the heading, by inserting ``or domestic
violence'' after ``pregnancy''; and
(B) by inserting ``or domestic violence'' after
``relating to pregnancy''.
(2) Individual market.--Title XXVII of such Act is amended
by inserting after section 2753 the following new section:
``SEC. 2754. PROHIBITION ON DOMESTIC VIOLENCE AS PREEXISTING CONDITION.
``A health insurance issuer offering health insurance coverage in
the individual market may not, on the basis of domestic violence,
impose any preexisting condition exclusion (as defined in section
2701(b)(1)(A)) with respect to such coverage.''.
(c) IRC.--Section 9801(d)(3) of the Internal Revenue Code of 1986
is amended--
(1) in the heading, by inserting ``or domestic violence''
after ``pregnancy''; and
(2) by inserting ``or domestic violence'' after ``relating
to pregnancy''.
(d) Effective Dates.--
(1) Except as otherwise provided in this subsection, the
amendments made by this section shall apply with respect to
group health plans (and health insurance issuers offering group
health insurance coverage) for plan years beginning on or after
January 1, 2010.
(2) The amendment made by subsection (b)(2) shall apply
with respect to health insurance coverage offered, sold,
issued, renewed, in effect, or operated in the individual
market on or after such date.
SEC. 108. ENDING HEALTH INSURANCE DENIALS AND DELAYS OF NECESSARY
TREATMENT FOR CHILDREN WITH DEFORMITIES.
(a) Amendments to the Employee Retirement Income Security Act of
1974.--
(1) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following new section:
``SEC. 715. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S CONGENITAL
OR DEVELOPMENTAL DEFORMITY OR DISORDER.
``(a) Requirements for Treatment for Children With Deformities.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage, that
provides coverage for surgical benefits shall provide coverage
for outpatient and inpatient diagnosis and treatment of a minor
child's congenital or developmental deformity, disease, or
injury. A minor child shall include any individual who is 21
years of age or younger.
``(2) Treatment defined.--
``(A) In general.--In this section, the term
`treatment' includes reconstructive surgical procedures
(procedures that are generally performed to improve
function, but may also be performed to approximate a
normal appearance) that are performed on abnormal
structures of the body caused by congenital defects,
developmental abnormalities, trauma, infection, tumors,
or disease, including--
``(i) procedures that do not materially
affect the function of the body part being
treated; and
``(ii) procedures for secondary conditions
and follow-up treatment.
``(B) Exception.--Such term does not include
cosmetic surgery performed to reshape normal structures
of the body to improve appearance or self-esteem.
``(b) Notice.--A group health plan under this part shall comply
with the notice requirement under section 713(b) (other than paragraph
(3)) with respect to the requirements of this section.''.
(2) Conforming amendment.--
(A) Subsection (c) of section 731 of such Act is
amended by striking ``section 711'' and inserting
``sections 711 and 715''.
(B) The table of contents in section 1 of such Act
is amended by inserting after the item relating to
section 714 the following new item:
``Sec. 715. Standards relating to benefits for minor child's congenital
or developmental deformity or disorder.''.
(b) Amendments to the Internal Revenue Code of 1986.--
(1) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 9814. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
CONGENITAL OR DEVELOPMENTAL DEFORMITY OR DISORDER.
``(a) Requirements for Treatment for Children With Deformities.--A
group health plan that provides coverage for surgical benefits shall
provide coverage for outpatient and inpatient diagnosis and treatment
of a minor child's congenital or developmental deformity, disease, or
injury. A minor child shall include any individual who is 21 years of
age or younger.
``(b) Treatment Defined.--
``(1) In general.--In this section, the term `treatment'
includes reconstructive surgical procedures (procedures that
are generally performed to improve function, but may also be
performed to approximate a normal appearance) that are
performed on abnormal structures of the body caused by
congenital defects, developmental abnormalities, trauma,
infection, tumors, or disease, including--
``(A) procedures that do not materially affect the
function of the body part being treated, and
``(B) procedures for secondary conditions and
follow-up treatment.
``(2) Exception.--Such term does not include cosmetic
surgery performed to reshape normal structures of the body to
improve appearance or self-esteem.''.
(2) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of such Code is amended by adding
at the end the following new item:
``Sec. 9814. Standards relating to benefits for minor child's
congenital or developmental deformity or
disorder.''.
(c) Amendments to the Public Health Service Act.--
(1) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at the end the
following new section:
``SEC. 2708. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
CONGENITAL OR DEVELOPMENTAL DEFORMITY OR DISORDER.
``(a) Requirements for Treatment for Children With Deformities.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage, that
provides coverage for surgical benefits shall provide coverage
for outpatient and inpatient diagnosis and treatment of a minor
child's congenital or developmental deformity, disease, or
injury. A minor child shall include any individual who is 21
years of age or younger.
``(2) Treatment defined.--
``(A) In general.--In this section, the term
`treatment' includes reconstructive surgical procedures
(procedures that are generally performed to improve
function, but may also be performed to approximate a
normal appearance) that are performed on abnormal
structures of the body caused by congenital defects,
developmental abnormalities, trauma, infection, tumors,
or disease, including--
``(i) procedures that do not materially
affect the function of the body part being
treated; and
``(ii) procedures for secondary conditions
and follow-up treatment.
``(B) Exception.--Such term does not include
cosmetic surgery performed to reshape normal structures
of the body to improve appearance or self-esteem.
``(b) Notice.--A group health plan under this part shall comply
with the notice requirement under section 715(b) of the Employee
Retirement Income Security Act of 1974 with respect to the requirements
of this section as if such section applied to such plan.''.
(2) Individual health insurance.--Subpart 2 of part B of
title XXVII of the Public Health Service Act, as amended by
section 161(b), is further amended by adding at the end the
following new section:
``SEC. 2755. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
CONGENITAL OR DEVELOPMENTAL DEFORMITY OR DISORDER.
``The provisions of section 2708 shall apply to health insurance
coverage offered by a health insurance issuer in the individual market
in the same manner as such provisions apply to health insurance
coverage offered by a health insurance issuer in connection with a
group health plan in the small or large group market.''.
(3) Conforming amendments.--
(A) Section 2723(c) of such Act (42 U.S.C. 300gg-
23(c)) is amended by striking ``section 2704'' and
inserting ``sections 2704 and 2708''.
(B) Section 2762(b)(2) of such Act (42 U.S.C.
300gg-62(b)(2)) is amended by striking ``section 2751''
and inserting ``sections 2751 and 2755''.
(d) Effective Dates.--
(1) The amendments made by this section shall apply with
respect to group health plans (and health insurance issuers
offering group health insurance coverage) for plan years
beginning on or after January 1, 2010.
(2) The amendment made by subsection (c)(2) shall apply
with respect to health insurance coverage offered, sold,
issued, renewed, in effect, or operated in the individual
market on or after such date.
(e) Coordination.--Section 104(1) of the Health Insurance
Portability and Accountability Act of 1996 is amended by striking
``(and the amendments made by this subtitle and section 401)'' and
inserting ``, part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974, parts A and C of title XXVII of
the Public Health Service Act, and chapter 100 of the Internal Revenue
Code of 1986''.
SEC. 109. ELIMINATION OF LIFETIME LIMITS.
(a) Amendments to the Employee Retirement Income Security Act of
1974.--
(1) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.), as amended by section 108, is amended by
adding at the end the following:
``SEC. 716. ELIMINATION OF LIFETIME AGGREGATE LIMITS.
``(a) In General.--A group health plan and a health insurance
issuer providing health insurance coverage in connection with a group
health plan, may not impose an aggregate dollar lifetime limit with
respect to benefits payable under the plan or coverage.
``(b) Definition.--In this section, the term `aggregate dollar
lifetime limit' means, with respect to benefits under a group health
plan or health insurance coverage offered in connection with a group
health plan, a dollar limitation on the total amount that may be paid
with respect to such benefits under the plan or health insurance
coverage with respect to an individual or other coverage unit on a
lifetime basis.''.
(2) Clerical amendment.--The table of contents in section 1
of such Act, is amended by inserting after the item relating to
section 715 the following new item:
``Sec. 716. Elimination of lifetime aggregate limits.''.
(b) Amendments to the Internal Revenue Code of 1986.--
(1) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986, as amended by section 108(b), is
amended by adding at the end the following new section:
``SEC. 9815. ELIMINATION OF LIFETIME AGGREGATE LIMITS.
``(a) In General.--A group health plan may not impose an aggregate
dollar lifetime limit with respect to benefits payable under the plan.
``(b) Definition.--In this section, the term `aggregate dollar
lifetime limit' means, with respect to benefits under a group health
plan a dollar limitation on the total amount that may be paid with
respect to such benefits under the plan with respect to an individual
or other coverage unit on a lifetime basis.''.
(2) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of such Code, as amended by section
108(b), is amended by adding at the end the following new item:
``Sec. 9854. Standards relating to benefits for minor child's
congenital or developmental deformity or
disorder.''.
(c) Amendment to the Public Health Service Act Relating to the
Group Market.--
(1) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-4 et seq.) as
amended by section 108(c)(1), is amended by adding at the end
the following:
``SEC. 2709. ELIMINATION OF LIFETIME AGGREGATE LIMITS.
``(a) In General.--A group health plan and a health insurance
issuer providing health insurance coverage in connection with a group
health plan, may not impose an aggregate dollar lifetime limit with
respect to benefits payable under the plan or coverage.
``(b) Definition.--In this section, the term `aggregate dollar
lifetime limit' means, with respect to benefits under a group health
plan or health insurance coverage, a dollar limitation on the total
amount that may be paid with respect to such benefits under the plan or
health insurance coverage with respect to an individual or other
coverage unit on a lifetime basis.''.
(2) Individual market.--Subpart 2 of part B of title XXVII
of the Public Health Service Act (42 U.S.C. 300gg-51 et seq.),
as amended by section 108(c)(2), is amended by adding at the
end the following:
``SEC. 2756. ELIMINATION OF LIFETIME AGGREGATE LIMITS.
``The provisions of section 2709 shall apply to health insurance
coverage offered by a health insurance issuer in the individual market
in the same manner as they apply to health insurance coverage offered
by a health insurance issuer in connection with a group health plan in
the small or large group market.''.
(d) Effective Dates.--
(1) The amendments made by this section shall apply with
respect to group health plans (and health insurance issuers
offering group health insurance coverage) for plan years
beginning on or after January 1, 2010.
(2) The amendment made by subsection (c)(2) shall apply
with respect to health insurance coverage offered, sold,
issued, renewed, in effect, or operated in the individual
market on or after such date.
SEC. 110. PROHIBITION AGAINST POSTRETIREMENT REDUCTIONS OF RETIREE
HEALTH BENEFITS BY GROUP HEALTH PLANS.
(a) In General.--Part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974, as amended by sections 108 and
109, is amended by inserting after section 716 the following new
section:
``SEC. 717. PROTECTION AGAINST POSTRETIREMENT REDUCTION OF RETIREE
HEALTH BENEFITS.
``(a) In General.--Every group health plan shall contain a
provision which expressly bars the plan, or any fiduciary of the plan,
from reducing the benefits provided under the plan to a retired
participant, or beneficiary of such participant, if such reduction
affects the benefits provided to the participant or beneficiary as of
the date the participant retired for purposes of the plan and such
reduction occurs after the participant's retirement unless such
reduction is also made with respect to active participants. Nothing in
this section shall prohibit a plan from enforcing a total aggregate cap
on amounts paid for retiree health coverage that is part of the plan at
the time of retirement.
``(b) No Reduction.--Notwithstanding that a group health plan may
contain a provision reserving the general power to amend or terminate
the plan or a provision specifically authorizing the plan to make post-
retirement reductions in retiree health benefits, it shall be
prohibited for any group health plan, whether through amendment or
otherwise, to reduce the benefits provided to a retired participant or
the participant's beneficiary under the terms of the plan if such
reduction of benefits occurs after the date the participant retired for
purposes of the plan and reduces benefits that were provided to the
participant, or the participant's beneficiary, as of the date the
participant retired unless such reduction is also made with respect to
active participants.
``(c) Reduction Described.-- For purposes of this section, a
reduction in benefits--
``(1) with respect to premiums occurs under a group health
plan when a participant's (or beneficiary's) share of the total
premium (or, in the case of a self-insured plan, the costs of
coverage) of the plan substantially increases; or
``(2) with respect to other cost-sharing and benefits under
a group health plan occurs when there is a substantial decrease
in the actuarial value of the benefit package under the plan.
For purposes of this section, the term `substantial' means an increase
in the total premium share or a decrease in the actuarial value of the
benefit package that is greater than 5 percent.''
(b) Conforming Amendment.--The table of contents in section 1 of
such Act, as amended by sections 108 and 109, is amended by inserting
after the item relating to section 716 the following new item:
``Sec. 717. Protection against postretirement reduction of retiree
health benefits.''.
(c) Waiver.--An employer may, in a form and manner which shall be
prescribed by the Secretary of Labor, apply for a waiver from this
provision if the employer can reasonably demonstrate that meeting the
requirements of this section would impose an undue hardship on the
employer.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 111. REINSURANCE PROGRAM FOR RETIREES.
(a) Establishment.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Secretary of Health and Human
Services shall establish a temporary reinsurance program (in
this section referred to as the ``reinsurance program'') to
provide reimbursement to assist participating employment-based
plans with the cost of providing health benefits to retirees
and to eligible spouses, surviving spouses and dependents of
such retirees.
(2) Definitions.--For purposes of this section:
(A) The term ``eligible employment-based plan''
means a group health plan or employment-based health
plan that--
(i) is --
(I) maintained by one or more
employers (including without limitation
any State or political subdivision
thereof, or any agency or
instrumentality of any of the
foregoing), former employers or
employee organizations or associations,
or a voluntary employees' beneficiary
association, or a committee or board of
individuals appointed to administer
such plan; or
(II) a multiemployer plan (as
defined in section 3(37) of the
Employee Retirement Income Security Act
of 1974); and
(ii) provides health benefits to retirees.
(B) The term ``health benefits'' means medical,
surgical, hospital, prescription drug, and such other
benefits as shall be determined by the Secretary,
whether self-funded or delivered through the purchase
of insurance or otherwise.
(C) The term ``participating employment-based
plan'' means an eligible employment-based plan that is
participating in the reinsurance program.
(D) The term ``retiree'' means, with respect to a
participating employment-benefit plan, an individual
who--
(i) is 55 years of age or older;
(ii) is not eligible for coverage under
title XVIII of the Social Security Act; and
(iii) is not an active employee of an
employer maintaining the plan or of any
employer that makes or has made substantial
contributions to fund such plan.
(E) The term ``Secretary'' means Secretary of
Health and Human Services.
(b) Participation.--To be eligible to participate in the
reinsurance program, an eligible employment-based plan shall submit to
the Secretary an application for participation in the program, at such
time, in such manner, and containing such information as the Secretary
shall require.
(c) Payment.--
(1) Submission of claims.--
(A) In general.--Under the reinsurance program, a
participating employment-based plan shall submit claims
for reimbursement to the Secretary which shall contain
documentation of the actual costs of the items and
services for which each claim is being submitted.
(B) Basis for claims.--Each claim submitted under
subparagraph (A) shall be based on the actual amount
expended by the participating employment-based plan
involved within the plan year for the appropriate
employment based health benefits provided to a retiree
or to the spouse, surviving spouse, or dependent of a
retiree. In determining the amount of any claim for
purposes of this subsection, the participating
employment-based plan shall take into account any
negotiated price concessions (such as discounts, direct
or indirect subsidies, rebates, and direct or indirect
remunerations) obtained by such plan with respect to
such health benefits. For purposes of calculating the
amount of any claim, the costs paid by the retiree or
by the spouse, surviving spouse, or dependent of the
retiree in the form of deductibles, copayments, and
coinsurance shall be included along with the amounts
paid by the participating employment-based plan.
(2) Program payments and limit.--If the Secretary
determines that a participating employment-based plan has
submitted a valid claim under paragraph (1), the Secretary
shall reimburse such plan for 80 percent of that portion of the
costs attributable to such claim that exceeds $15,000, but is
less than $90,000. Such amounts shall be adjusted each year
based on the percentage increase in the medical care component
of the Consumer Price Index (rounded to the nearest multiple of
$1,000) for the year involved.
(3) Use of payments.--Amounts paid to a participating
employment-based plan under this subsection shall only be used
to reduce the costs of health care provided by the plan by
reducing premium costs for the employer or employee association
maintaining the plan, and reducing premium contributions,
deductibles, copayments, coinsurance, or other out-of-pocket
costs for plan participants and beneficiaries. Where the
benefits are provided by an employer to members of a
represented bargaining unit, the allocation of payments among
these purposes shall be subject to collective bargaining.
Amounts paid to the plan under this subsection shall not be
used as general revenues by the employer or employee
association maintaining the plan or for any other purposes. The
Secretary shall develop a mechanism to monitor the appropriate
use of such payments by such plans.
(4) Appeals and program protections.--The Secretary shall
establish--
(A) an appeals process to permit participating
employment-based plans to appeal a determination of the
Secretary with respect to claims submitted under this
section; and
(B) procedures to protect against fraud, waste, and
abuse under the program.
(5) Audits.--The Secretary shall conduct annual audits of
claims data submitted by participating employment-based plans
under this section to ensure that they are in compliance with
the requirements of this section.
(d) Retiree Reserve Trust Fund.--
(1) Establishment.--
(A) In general.--There is established in the
Treasury of the United States a trust fund to be known
as the ``Retiree Reserve Trust Fund'' (referred to in
this section as the ``Trust Fund''), that shall consist
of such amounts as may be appropriated or credited to
the Trust Fund as provided for in this subsection to
enable the Secretary to carry out the reinsurance
program. Such amounts shall remain available until
expended.
(B) Funding.--There are hereby appropriated to the
Trust Fund, out of any moneys in the Treasury not
otherwise appropriated, an amount requested by the
Secretary as necessary to carry out this section,
except that the total of all such amounts requested
shall not exceed $10,000,000,000.
(C) Appropriations from the trust fund.--
(i) In general.--Amounts in the Trust Fund
are appropriated to provide funding to carry
out the reinsurance program and shall be used
to carry out such program.
(ii) Limitation to available funds.--The
Secretary has the authority to stop taking
applications for participation in the program
or take such other steps in reducing
expenditures under the reinsurance program in
order to ensure that expenditures under the
reinsurance program do not exceed the funds
available under this subsection.
SEC. 112. WELLNESS PROGRAM GRANTS.
(a) Allowance of Grant.--
(1) In general.--For purposes of this section, the
Secretaries of Health and Human Services and Labor shall
jointly award wellness grants as determined under this section.
Wellness program grants shall be awarded to small employers (as
defined by the Secretary) for any plan year in an amount equal
to 50 percent of the costs paid or incurred by such employers
in connection with a qualified wellness program during the plan
year. For purposes of the preceding sentence, in the case of
any qualified wellness program offered as part of an
employment-based health plan, only costs attributable to the
qualified wellness program and not to the health plan, or
health insurance coverage offered in connection with such a
plan, may be taken into account.
(2) Limitations.--
(A) Period.--A wellness grant awarded to an
employer under this section shall be for up to 3 years.
(B) Amount.--The amount of the grant under
paragraph (1) for an employer shall not exceed--
(i) the product of $150 and the number of
employees of the employer for any plan year;
and
(ii) $50,000 for the entire period of the
grant.
(b) Qualified Wellness Program.--For purposes of this section:
(1) Qualified wellness program.--The term ``qualified
wellness program'' means a program that--
(A) includes any 3 wellness components described in
subsection (c); and
(B) is to be certified jointly by the Secretary of
Health and Human Services and the Secretary of Labor,
in coordination with the Director of the Centers for
Disease Control and Prevention, as a qualified wellness
program under this section.
(2) Programs must be consistent with research and best
practices.--
(A) In general.--The Secretary of Health and Human
Services and the Secretary of Labor shall not certify a
program as a qualified wellness program unless the
program--
(i) is consistent with evidence-based
research and best practices, as identified by
persons with expertise in employer health
promotion and wellness programs;
(ii) includes multiple, evidence-based
strategies which are based on the existing and
emerging research and careful scientific
reviews, including the Guide to Community
Preventative Services, the Guide to Clinical
Preventative Services, and the National
Registry for Effective Programs; and
(iii) includes strategies which focus on
prevention and support for employee populations
at risk of poor health outcomes.
(B) Periodic updating and review.--The Secretaries
of Health and Human Services and Labor, in consultation
with other appropriate agencies shall jointly establish
procedures for periodic review, evaluation, and update
of the programs under this subsection.
(3) Health literacy and accessibility.--The Secretaries of
Health and Human Services and Labor shall jointly, as part of
the certification process--
(A) ensure that employers make the programs
culturally competent, physically and programmatically
accessible (including for individuals with
disabilities), and appropriate to the health literacy
needs of the employees covered by the programs;
(B) require a health literacy component to provide
special assistance and materials to employees with low
literacy skills, limited English and from underserved
populations; and
(C) require the Secretaries to compile and
disseminate to employer health plans information on
model health literacy curricula, instructional
programs, and effective intervention strategies.
(c) Wellness Program Components.--For purposes of this section, the
wellness program components described in this subsection are the
following:
(1) Health awareness component.--A health awareness
component which provides for the following:
(A) Health education.--The dissemination of health
information which addresses the specific needs and
health risks of employees.
(B) Health screenings.--The opportunity for
periodic screenings for health problems and referrals
for appropriate follow-up measures.
(2) Employee engagement component.--An employee engagement
component which provides for the active engagement of employees
in worksite wellness programs through worksite assessments and
program planning, onsite delivery, evaluation, and improvement
efforts.
(3) Behavioral change component.--A behavioral change
component which encourages healthy living through counseling,
seminars, on-line programs, self-help materials, or other
programs which provide technical assistance and problem solving
skills. Such component may include programs relating to--
(A) tobacco use;
(B) obesity;
(C) stress management;
(D) physical fitness;
(E) nutrition;
(F) substance abuse;
(G) depression; and
(H) mental health promotion.
(4) Supportive environment component.--A supportive
environment component which includes the following:
(A) On-site policies.--Policies and services at the
worksite which promote a healthy lifestyle, including
policies relating to--
(i) tobacco use at the worksite;
(ii) the nutrition of food available at the
worksite through cafeterias and vending
options;
(iii) minimizing stress and promoting
positive mental health in the workplace; and
(iv) the encouragement of physical activity
before, during, and after work hours.
(d) Participation Requirement.--No grant shall be allowed under
subsection (a) unless the Secretaries of Health and Human Services and
Labor, in consultation with other appropriate agencies, jointly
certify, as a part of any certification described in subsection (b),
that each wellness program component of the qualified wellness
program--
(1) shall be available to all employees of the employer;
(2) shall not mandate participation by employees; and
(3) may provide a financial reward for participation of an
individual in such program so long as such reward is not tied
to the premium or cost-sharing of the individual under the
health benefits plan.
(e) Privacy Protections.--Data gathered for purposes of the
employer wellness program may be used solely for the purposes of
administering the program. The Secretaries of Health and Human Services
and Labor shall develop standards to ensure such data remain
confidential and are not used for purposes beyond those for
administering the program.
(f) Certain Costs Not Included.--For purposes of this section,
costs paid or incurred by an employer for food or health insurance
shall not be taken into account under subsection (a).
(g) Outreach.--The Secretaries of Health and Human Services and
Labor, in conjunction with other appropriate agencies and members of
the business community, shall jointly institute an outreach program to
inform businesses about the availability of the wellness program grant
as well as to educate businesses on how to develop programs according
to recognized and promising practices and on how to measure the success
of implemented programs.
(h) Effective Date.--This section shall take effect on July 1,
2010.
(i) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 113. EXTENSION OF COBRA CONTINUATION COVERAGE.
(a) Extension of Current Periods of Continuation Coverage.--
(1) In general.--In the case of any individual who is,
under a COBRA continuation coverage provision, covered under
COBRA continuation coverage on or after the date of the
enactment of this Act, the required period of any such coverage
which has not subsequently terminated under the terms of such
provision for any reason other than the expiration of a period
of a specified number of months shall, notwithstanding such
provision and subject to subsection (b), extend to the earlier
of the date on which such individual becomes eligible for
acceptable coverage or the date on which such individual
becomes eligible for health insurance coverage through the
Health Insurance Exchange (or a State-based Health Insurance
Exchange operating in a State or group of States).
(2) Notice.--As soon as practicable after the date of the
enactment of this Act, the Secretary of Labor, in consultation
with the Secretary of the Treasury and the Secretary of Health
and Human Services, shall, in consultation with administrators
of the group health plans (or other entities) that provide or
administer the COBRA continuation coverage involved, provide
rules setting forth the form and manner in which prompt notice
to individuals of the continued availability of COBRA
continuation coverage to such individuals under paragraph (1).
(b) Continued Effect of Other Terminating Events.--Notwithstanding
subsection (a), any required period of COBRA continuation coverage
which is extended under such subsection shall terminate upon the
occurrence, prior to the date of termination otherwise provided in such
subsection, of any terminating event specified in the applicable
continuation coverage provision other than the expiration of a period
of a specified number of months.
(c) Access to State Health Benefits Risk Pools.--This section shall
supersede any provision of the law of a State or political subdivision
thereof to the extent that such provision has the effect of limiting or
precluding access by a qualified beneficiary whose COBRA continuation
coverage has been extended under this section to a State health
benefits risk pool recognized by the Commissioner for purposes of this
section solely by reason of the extension of such coverage beyond the
date on which such coverage otherwise would have expired.
(d) Definitions.--For purposes of this section--
(1) COBRA continuation coverage.--The term ``COBRA
continuation coverage'' means continuation coverage provided
pursuant to part 6 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (other than under
section 609), title XXII of the Public Health Service Act,
section 4980B of the Internal Revenue Code of 1986 (other than
subsection (f)(1) of such section insofar as it relates to
pediatric vaccines), or section 8905a of title 5, United States
Code, or under a State program that provides comparable
continuation coverage. Such term does not include coverage
under a health flexible spending arrangement under a cafeteria
plan within the meaning of section 125 of the Internal Revenue
Code of 1986.
(2) COBRA continuation provision.--The term ``COBRA
continuation provision'' means the provisions of law described
in paragraph (1).
SEC. 114. STATE HEALTH ACCESS PROGRAM GRANTS.
(a) In General.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall provide grants to
States (as defined for purposes of title XIX of the Social Security
Act) to establish programs to expand access to affordable health care
coverage for the uninsured populations in that State in a manner
consistent with reforms to take effect under this division in Y1.
(b) Types of Programs.--The types of programs for which grants are
available under subsection (a) include the following:
(1) State insurance exchanges.--State insurance exchanges
that develop new, less expensive, portable benefit packages for
small employers and part-time and seasonal workers.
(2) Community coverage program.--Community coverage with
shared responsibility between employers, governmental or
nonprofit entity, and the individual.
(3) Reinsurance plan program.--Reinsurance plans that
subsidize a certain share of carrier losses within a certain
risk corridor health insurance premium assistance.
(4) Transparent marketplace program.--Transparent
marketplace that provides an organized structure for the sale
of insurance products such as a Web exchange or portal.
(5) Automated enrollment program.--Statewide or automated
enrollment systems for public assistance programs.
(6) Innovative strategies.--Innovative strategies to insure
low-income childless adults.
(7) Purchasing collaboratives.--Not-for-profit business/
consumer collaborative that provides direct contract health
care service purchasing options for group plan sponsors.
(c) Eligibility and Administration.--
(1) Implementation of key statutory or regulatory
changes.--In order to be awarded a grant under this section for
a program, a State shall demonstrate that--
(A) it has achieved the key State and local
statutory or regulatory changes required to begin
implementing the new program within 1 year after the
initiation of funding under the grant; and
(B) it will be able to sustain the program without
Federal funding after the end of the period of the
grant.
(2) Ineligibility.--A State that has already developed a
comprehensive health insurance access program is not eligible
for a grant under this section.
(3) Application required.--No State shall receive a grant
under this section unless the State has approved by the
Secretary such an application, in such form and manner as the
Secretary specifies.
(4) Administration based on current program.--The program
under this section is intended to build on the State Health
Access Program funded under the Omnibus Appropriations Act,
2009 (Public Law 111-8).
(d) Funding Limitations.--
(1) In general.--A grant under this section shall--
(A) only be available for expenditures before Y1;
and
(B) only be used to supplement, and not supplant,
funds otherwise provided.
(2) Matching fund requirement.--
(A) In general.--Subject to subparagraph (B), no
grant may be awarded to a State unless the State
demonstrates the seriousness of its effort by matching
at least 20 percent of the grant amount through non-
Federal resources, which may be a combination of State,
local, private dollars from insurers, providers, and
other private organizations.
(B) Waiver.--The Secretary may waive the
requirement of subparagraph (A) if the State
demonstrates to the Secretary financial hardship in
complying with such requirement.
(e) Study.--The Secretary shall review, study, and benchmark the
progress and results of the programs funded under this section.
(f) Report.--Each State receiving a grant under this section shall
submit to the Secretary a report on best practices and lessons learned
through the grant to inform the health reform coverage expansions under
this division beginning in Y1.
(g) Funding.--There are authorized to be appropriated such sums as
may be necessary to carry out this section.
SEC. 115. ADMINISTRATIVE SIMPLIFICATION.
(a) Standardizing Electronic Administrative Transactions.--
(1) In general.--Part C of title XI of the Social Security
Act (42 U.S.C. 1320d et seq.) is amended by inserting after
section 1173 the following new sections:
``SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.
``(a) Standards for Financial and Administrative Transactions.--
``(1) In general.--The Secretary shall adopt and regularly
update standards consistent with the goals described in
paragraph (2).
``(2) Goals for financial and administrative
transactions.--The goals for standards under paragraph (1) are
that such standards shall, to the extent practicable--
``(A) be unique with no conflicting or redundant
standards;
``(B) be authoritative, permitting no additions or
constraints for electronic transactions, including
companion guides;
``(C) be comprehensive, efficient and robust,
requiring minimal augmentation by paper transactions or
clarification by further communications;
``(D) enable the real-time (or near real-time)
determination of an individual's financial
responsibility at the point of service and, to the
extent possible, prior to service, including whether
the individual is eligible for a specific service with
a specific physician at a specific facility, on a
specific date or range of dates, include utilization of
a machine-readable health plan beneficiary
identification card or similar mechanism;
``(E) enable, where feasible, near real-time
adjudication of claims;
``(F) provide for timely acknowledgment, response,
and status reporting applicable to any electronic
transaction deemed appropriate by the Secretary;
``(G) describe all data elements (such as reason
and remark codes) in unambiguous terms, not permit
optional fields, require that data elements be either
required or conditioned upon set values in other
fields, and prohibit additional conditions except where
required by (or to implement) State or Federal law or
to protect against fraud and abuse; and
``(H) harmonize all common data elements across
administrative and clinical transaction standards.
``(3) Time for adoption.--Not later than 2 years after the
date of the enactment of this section, the Secretary shall
adopt standards under this section by interim, final rule.
``(4) Requirements for specific standards.--The standards
under this section shall be developed, adopted, and enforced so
as to--
``(A) clarify, refine, complete, and expand, as
needed, the standards required under section 1173;
``(B) require paper versions of standardized
transactions to comply with the same standards as to
data content such that a fully compliant, equivalent
electronic transaction can be populated from the data
from a paper version;
``(C) enable electronic funds transfers, in order
to allow automated reconciliation with the related
health care payment and remittance advice;
``(D) require timely and transparent claim and
denial management processes, including uniform claim
edits, uniform reason and remark denial codes,
tracking, adjudication, and appeal processing;
``(E) require the use of a standard electronic
transaction with which health care providers may
quickly and efficiently enroll with a health plan to
conduct the other electronic transactions provided for
in this part; and
``(F) provide for other requirements relating to
administrative simplification as identified by the
Secretary, in consultation with stakeholders.
``(5) Building on existing standards.--In adopting the
standards under this section, the Secretary shall consider
existing and planned standards.
``(6) Implementation and enforcement.--Not later than 6
months after the date of the enactment of this section, the
Secretary shall submit to the appropriate committees of
Congress a plan for the implementation and enforcement, by not
later than 5 years after such date of enactment, of the
standards under this section. Such plan shall include--
``(A) a process and timeframe with milestones for
developing the complete set of standards;
``(B) a proposal for accommodating necessary
changes between version changes and a process for
upgrading standards as often as annually by interim,
final rulemaking;
``(C) programs to provide incentives for, and ease
the burden of, implementation for certain health care
providers, with special consideration given to such
providers serving rural or underserved areas and ensure
coordination with standards, implementation
specifications, and certification criteria being
adopted under the HITECH Act;
``(D) programs to provide incentives for, and ease
the burden of, health care providers who volunteer to
participate in the process of setting standards for
electronic transactions;
``(E) an estimate of total funds needed to ensure
timely completion of the implementation plan; and
``(F) an enforcement process that includes timely
investigation of complaints, random audits to ensure
compliance, civil monetary and programmatic penalties
for noncompliance consistent with existing laws and
regulations, and a fair and reasonable appeals process
building off of enforcement provisions under this part,
and concurrent State enforcement jurisdiction.
The Secretary may promulgate an annual audit and certification
process to ensure that all health plans and clearinghouses are
both syntactically and functionally compliant with all the
standard transactions mandated pursuant to the administrative
simplification provisions of this part and the Health Insurance
Portability and Accountability Act of 1996.
``(b) Limitations on Use of Data.--Nothing in this section shall be
construed to permit the use of information collected under this section
in a manner that would violate State or Federal law.
``(c) Protection of Data.--The Secretary shall ensure (through the
promulgation of regulations or otherwise) that all data collected
pursuant to subsection (a) are used and disclosed in a manner that
meets the HIPAA privacy and security law (as defined in section
3009(a)(2) of the Public Health Service Act), including any privacy or
security standard adopted under section 3004 of such Act.
``SEC. 1173B. INTERIM COMPANION GUIDES, INCLUDING OPERATING RULES.
``(a) In General.--The Secretary shall adopt a single, binding,
comprehensive companion guide, that includes operating rules for each
X12 Version 5010 transaction described in section 1173(a)(2), to be
effective until the new version of these transactions which comply with
section 1173A are adopted and implemented.
``(b) Companion Guide and Operating Rules Development.--In adopting
such interim companion guide and rules, the Secretary shall comply with
section 1172, except that a nonprofit entity that meets the following
criteria shall also be consulted:
``(1) The entity focuses its mission on administrative
simplification.
``(2) The entity uses a multistakeholder process that
creates consensus-based companion guides, including operating
rules using a voting process that ensures balanced
representation by the critical stakeholders (including health
plans and health care providers) so that no one group dominates
the entity and shall include others such as standards
development organizations, and relevant Federal or State
agencies.
``(3) The entity has in place a public set of guiding
principles that ensure the companion guide and operating rules
and process are open and transparent.
``(4) The entity coordinates its activities with the HIT
Policy Committee, and the HIT Standards Committee (established
under title XXX of the Public Health Service Act) and
complements the efforts of the Office of the National
Healthcare Coordinator and its related health information
exchange goals.
``(5) The entity incorporates the standards issued under
Health Insurance Portability and Accountability Act of 1996 and
this part, and in developing the companion guide and operating
rules does not change the definition, data condition or use of
a data element or segment in a standard, add any elements or
segments to the maximum defined data set, use any codes or data
elements that are either marked `not used' in the standard's
implementation specifications or are not in the standard's
implementation specifications, or change the meaning or intent
of the standard's implementation specifications.
``(6) The entity uses existing market research and proven
best practices.
``(7) The entity has a set of measures that allow for the
evaluation of their market impact and public reporting of
aggregate stakeholder impact.
``(8) The entity supports nondiscrimination and conflict of
interest policies that demonstrate a commitment to open, fair,
and nondiscriminatory practices.
``(9) The entity allows for public reviews and comment on
updates of the companion guide, including the operating rules.
``(c) Implementation.--The Secretary shall adopt a single, binding
companion guide, including operating rules under this section, for each
transaction, to become effective with the X12 Version 5010 transaction
implementation, or as soon thereafter as feasible. The companion guide,
including operating rules for the transactions for eligibility for
health plan and health claims status under this section shall be
adopted not later than October 1, 2011, in a manner such that such set
of rules is effective beginning not later than January 1, 2013. The
companion guide, including operating rules for the remainder of the
transactions described in section 1173(a)(2) shall be adopted not later
than October 1, 2012, in a manner such that such set of rules is
effective beginning not later than January 1, 2014.''.
(2) Definitions.--Section 1171 of such Act (42 U.S.C.
1320d) is amended--
(A) in paragraph (1), by inserting ``, and
associated operational guidelines and instructions, as
determined appropriate by the Secretary'' after
``medical procedure codes''; and
(B) by adding at the end the following new
paragraph:
``(10) Operating rules.--The term `operating rules' means
business rules for using and processing transactions, such as
service level requirements, which do not impact the
implementation specifications or other data content
requirements.''.
(3) Conforming amendment.--Section 1179(a) of such Act (42
U.S.C. 1320d-8(a)) is amended, in the matter before paragraph
(1)--
(A) by inserting ``on behalf of an individual''
after ``1978)''; and
(B) by inserting ``on behalf of an individual''
after ``for a financial institution''.
(b) Standards for Claims Attachments and Coordination of
Benefits.--
(1) Standard for health claims attachments.--Not later than
1 year after the date of the enactment of this Act, the
Secretary of Health and Human Services shall promulgate an
interim, final rule to establish a standard for health claims
attachment transaction described in section 1173(a)(2)(B) of
the Social Security Act (42 U.S.C. 1320d-2(a)(2)(B)) and
coordination of benefits.
(2) Revision in processing payment transactions by
financial institutions.--
(A) In general.--Section 1179 of the Social
Security Act (42 U.S.C. 1320d-8) is amended, in the
matter before paragraph (1)--
(i) by striking ``or is engaged'' and
inserting ``and is engaged''; and
(ii) by inserting ``(other than as a
business associate for a covered entity)''
after ``for a financial institution''.
(B) Compliance date.--The amendments made by
subparagraph (A) shall apply to transactions occurring
on or after such date (not later than January 1, 2014)
as the Secretary of Health and Human Services shall
specify.
(c) Standards for First Report of Injury.--Not later than January
1, 2014, the Secretary of Health and Human Services shall promulgate an
interim final rule to establish a standard for the first report of
injury transaction described in section 1173(a)(2)(G) of the Social
Security Act (42 U.S.C. 1320d-2(a)(2)(G)).
(d) Unique Health Plan Identifier.--Not later October 1, 2012, the
Secretary of Health and Human Services shall promulgate an interim
final rule to establish a unique health plan identifier described in
section 1173(b) of the Social Security Act (42 U.S.C. 1320d-2(b)) based
on the input of the National Committee of Vital and Health Statistics
and consultation with health plans, health care providers, and other
interested parties.
(e) Expansion of Electronic Transactions in Medicare.--Section
1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended--
(1) in paragraph (23), by striking ``or'' at the end;
(2) in paragraph (24), by striking the period and inserting
``; or''; and
(3) by inserting after paragraph (24) the following new
paragraph:
``(25) subject to subsection (h), not later than January 1,
2015, for which the payment is other than by electronic funds
transfer (EFT) so long as the Secretary has adopted and
implemented a standard for electronic funds transfer under
section 1173A.''.
(f) Expansion of Penalties.--Section 1176 of such Act (42 U.S.C.
1320d-5) is amended by adding at the end the following new subsection:
``(c) Expansion of Penalty Authority.--The Secretary may, in
addition to the penalties provided under subsections (a) and (b),
provide for the imposition of penalties for violations of this part
that are comparable--
``(1) in the case of health plans, to the sanctions the
Secretary is authorized to impose under part C or D of title
XVIII in the case of a plan that violates a provision of such
part; or
``(2) in the case of a health care provider, to the
sanctions the Secretary is authorized to impose under part A,
B, or D of title XVIII in the case of a health care provider
that violations a provision of such part with respect to that
provider.''.
TITLE II--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
SEC. 201. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.
(a) Purpose.--The purpose of this title is to establish standards
to ensure that new health insurance coverage and employment-based
health plans that are offered meet standards guaranteeing access to
affordable coverage, essential benefits, and other consumer
protections.
(b) Requirements for Qualified Health Benefits Plans.--On or after
the first day of Y1, a health benefits plan shall not be a qualified
health benefits plan under this division unless the plan meets the
applicable requirements of the following subtitles for the type of plan
and plan year involved:
(1) Subtitle B (relating to affordable coverage).
(2) Subtitle C (relating to essential benefits).
(3) Subtitle D (relating to consumer protection).
(c) Terminology.--In this division:
(1) Enrollment in employment-based health plans.--An
individual shall be treated as being ``enrolled'' in an
employment-based health plan if the individual is a participant
or beneficiary (as such terms are defined in section 3(7) and
3(8), respectively, of the Employee Retirement Income Security
Act of 1974) in such plan.
(2) Individual and group health insurance coverage.--The
terms ``individual health insurance coverage'' and ``group
health insurance coverage'' mean health insurance coverage
offered in the individual market or large or small group
market, respectively, as defined in section 2791 of the Public
Health Service Act.
(d) Treatment of Qualified Direct Primary Care Medical Home
Plans.--The Commissioner may permit a qualified health benefits plan to
provide coverage through a qualified direct primary care medical home
plan so long as the qualified health benefits plan meets all
requirements that are otherwise applicable and the services covered by
the medical home plan are coordinated with the QHBP offering entity.
SEC. 202. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.
(a) Grandfathered Health Insurance Coverage Defined.--Subject to
the succeeding provisions of this section, for purposes of establishing
acceptable coverage under this division, the term ``grandfathered
health insurance coverage'' means individual health insurance coverage
that is offered and in force and effect before the first day of Y1 if
the following conditions are met:
(1) Limitation on new enrollment.--
(A) In general.--Except as provided in this
paragraph, the individual health insurance issuer
offering such coverage does not enroll any individual
in such coverage if the first effective date of
coverage is on or after the first day of Y1.
(B) Dependent coverage permitted.--Subparagraph (A)
shall not affect the subsequent enrollment of a
dependent of an individual who is covered as of such
first day.
(2) Limitation on changes in terms or conditions.--Subject
to paragraph (3) and except as required by law, the issuer does
not change any of its terms or conditions, including benefits
and cost-sharing, from those in effect as of the day before the
first day of Y1.
(3) Restrictions on premium increases.--The issuer cannot
vary the percentage increase in the premium for a risk group of
enrollees in specific grandfathered health insurance coverage
without changing the premium for all enrollees in the same risk
group at the same rate, as specified by the Commissioner.
(b) Grace Period for Current Employment-Based Health Plans.--
(1) Grace period.--
(A) In general.--The Commissioner shall establish a
grace period whereby, for plan years beginning after
the end of the 5-year period beginning with Y1, an
employment-based health plan in operation as of the day
before the first day of Y1 must meet the same
requirements as apply to a qualified health benefits
plan under section 201, including the essential benefit
package requirement under section 221.
(B) Exception for limited benefits plans.--
Subparagraph (A) shall not apply to an employment-based
health plan in which the coverage consists only of one
or more of the following:
(i) Any coverage described in section
3001(a)(1)(B)(ii)(IV) of division B of the
American Recovery and Reinvestment Act of 2009
(Public Law 111-5).
(ii) Excepted benefits (as defined in
section 733(c) of the Employee Retirement
Income Security Act of 1974), including
coverage under a specified disease or illness
policy described in paragraph (3)(A) of such
section.
(iii) Such other limited benefits as the
Commissioner may specify.
In no case shall an employment-based health plan in
which the coverage consists only of one or more of the
coverage or benefits described in clauses (i) through
(iii) be treated as acceptable coverage under this
division.
(2) Transitional treatment as acceptable coverage.--During
the grace period specified in paragraph (1)(A), an employment-
based health plan (which may be a high deducible health plan,
as defined in section 223(c)(2) of the Internal Revenue Code of
1986) that is described in such paragraph shall be treated as
acceptable coverage under this division.
(c) Limitation on Individual Health Insurance Coverage.--
(1) In general.--Individual health insurance coverage that
is not grandfathered health insurance coverage under subsection
(a) may only be offered on or after the first day of Y1 as an
Exchange-participating health benefits plan.
(2) Separate, excepted coverage permitted.--Nothing in--
(A) paragraph (1) shall prevent the offering of
excepted benefits described in section 2791(c) of the
Public Health Service Act so long as such benefits are
offered outside the Health Insurance Exchange and are
priced separately from health insurance coverage; and
(B) this division shall be construed--
(i) to prevent the offering of a stand-
alone plan that offers coverage of excepted
benefits described in section 2791(c)(2)(A) of
the Public Health Service Act (relating to
limited scope dental or vision benefits) for
individuals and families from a State-licensed
dental and vision carrier; or
(ii) as applying requirements for a
qualified health benefits plan to such a stand-
alone plan that is offered and priced
separately from a qualified health benefits
plan.
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
SEC. 211. PROHIBITING PREEXISTING CONDITION EXCLUSIONS.
A qualified health benefits plan may not impose any preexisting
condition exclusion (as defined in section 2701(b)(1)(A) of the Public
Health Service Act) or otherwise impose any limit or condition on the
coverage under the plan with respect to an individual or dependent
based on any of the following: health status, medical condition, claims
experience, receipt of health care, medical history, genetic
information, evidence of insurability, disability, or source of injury
(including conditions arising out of acts of domestic violence) or any
similar factors.
SEC. 212. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS AND
PROHIBITING RESCISSIONS.
The requirements of sections 2711 (other than subsections (e) and
(f)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and
subsection (e)) of the Public Health Service Act, relating to
guaranteed availability and renewability of health insurance coverage,
shall apply to individuals and employers in all individual and group
health insurance coverage, whether offered to individuals or employers
through the Health Insurance Exchange, through any employment-based
health plan, or otherwise, in the same manner as such sections apply to
employers and health insurance coverage offered in the small group
market, except that such section 2712(b)(1) shall apply only if, before
nonrenewal or discontinuation of coverage, the issuer has provided the
enrollee with notice of nonpayment of premiums and there is a grace
period during which the enrollee has an opportunity to correct such
nonpayment. Rescissions of such coverage shall be prohibited except in
cases of fraud as defined in section 2712(b)(2) of such Act.
SEC. 213. INSURANCE RATING RULES.
(a) In General.--The premium rate charged for a qualified health
benefits plan that is health insurance coverage may not vary except as
follows:
(1) Limited age variation permitted.--By age (within such
age categories as the Commissioner shall specify) so long as
the ratio of the highest such premium to the lowest such
premium does not exceed the ratio of 2 to 1.
(2) By area.--By premium rating area (as permitted by State
insurance regulators or, in the case of Exchange-participating
health benefits plans, as specified by the Commissioner in
consultation with such regulators).
(3) By family enrollment.--By family enrollment (such as
variations within categories and compositions of families) so
long as the ratio of the premium for family enrollment (or
enrollments) to the premium for individual enrollment is
uniform, as specified under State law and consistent with rules
of the Commissioner.
(b) Study and Reports.--
(1) Study.--The Commissioner, in coordination with the
Secretary of Health and Human Services and the Secretary of
Labor, shall conduct a study of the large-group-insured and
self-insured employer health care markets. Such study shall
examine the following:
(A) The types of employers by key characteristics,
including size, that purchase insured products versus
those that self-insure.
(B) The similarities and differences between
typical insured and self-insured health plans.
(C) The financial solvency and capital reserve
levels of employers that self-insure by employer size.
(D) The risk of self-insured employers not being
able to pay obligations or otherwise becoming
financially insolvent.
(E) The extent to which rating rules are likely to
cause adverse selection in the large group market or to
encourage small and midsize employers to self-insure.
(2) Reports.--Not later than 18 months after the date of
the enactment of this Act, the Commissioner shall submit to
Congress and the applicable agencies a report on the study
conducted under paragraph (1). Such report shall include any
recommendations the Commissioner deems appropriate to ensure
that the law does not provide incentives for small and midsize
employers to self-insure or create adverse selection in the
risk pools of large group insurers and self-insured employers.
Not later than 18 months after the first day of Y1, the
Commissioner shall submit to Congress and the applicable
agencies an updated report on such study, including updates on
such recommendations.
SEC. 214. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND
SUBSTANCE ABUSE DISORDER BENEFITS.
(a) Nondiscrimination in Benefits.--A qualified health benefits
plan shall comply with standards established by the Commissioner to
prohibit discrimination in health benefits or benefit structures for
qualifying health benefits plans, building from section 702 of the
Employee Retirement Income Security Act of 1974, section 2702 of the
Public Health Service Act, and section 9802 of the Internal Revenue
Code of 1986.
(b) Parity in Mental Health and Substance Abuse Disorder
Benefits.--To the extent such provisions are not superceded by or
inconsistent with subtitle C, the provisions of section 2705 (other
than subsections (a)(1), (a)(2), and (c)) of the Public Health Service
Act shall apply to a qualified health benefits plan, regardless of
whether it is offered in the individual or group market, in the same
manner as such provisions apply to health insurance coverage offered in
the large group market.
SEC. 215. ENSURING ADEQUACY OF PROVIDER NETWORKS.
(a) In General.--A qualified health benefits plan that uses a
provider network for items and services shall meet such standards
respecting provider networks as the Commissioner may establish to
assure the adequacy of such networks in ensuring enrollee access to
such items and services and transparency in the cost-sharing
differentials among providers participating in the network and policies
for accessing out-of-network providers.
(b) Internet Access to Information.--A qualified health benefits
plan that uses a provider network shall provide a current listing of
all providers in its network on its Website and such data shall be
available on the Health Insurance Exchange Website as a part of the
basic information on that plan. The Commissioner shall also establish
an on-line system whereby an individual may select by name any medical
provider (as defined by the Commissioner) and be informed of the plan
or plans with which that provider is contracting.
(c) Provider Network Defined.--In this division, the term
``provider network'' means the providers with respect to which covered
benefits, treatments, and services are available under a health
benefits plan.
SEC. 216. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE FOR
UNINSURED YOUNG ADULTS.
(a) In General.--A qualified health benefits plan shall make
available, at the option of the principal enrollee under the plan,
coverage for one or more qualified children (as defined in subsection
(b)) of the enrollee.
(b) Qualified Child Defined.--In this section, the term ``qualified
child'' means, with respect to a principal enrollee in a qualified
health benefits plan, an individual who (but for age) would be treated
as a dependent child of the enrollee under such plan and who--
(1) is under 27 years of age; and
(2) is not enrolled in a health benefits plan other than
under this section.
(c) Premiums.--Nothing in this section shall be construed as
preventing a qualified health benefits plan from increasing the
premiums otherwise required for coverage provided under this section
consistent with standards established by the Commissioner based upon
family size under section 213(a)(3).
SEC. 217. CONSISTENCY OF COSTS AND COVERAGE UNDER QUALIFIED HEALTH
BENEFITS PLANS DURING PLAN YEAR.
In the case of health insurance coverage offered under a qualified
health benefits plan, if the coverage decreases or the cost-sharing
increases, the issuer of the coverage shall notify enrollees of the
change at least 90 days before the change takes effect (or such shorter
period of time in cases where the change is necessary to ensure the
health and safety of enrollees).
Subtitle C--Standards Guaranteeing Access to Essential Benefits
SEC. 221. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.
(a) In General.--A qualified health benefits plan shall provide
coverage that at least meets the benefit standards adopted under
section 224 for the essential benefits package described in section 222
for the plan year involved.
(b) Choice of Coverage.--
(1) Non-exchange-participating health benefits plans.--In
the case of a qualified health benefits plan that is not an
Exchange-participating health benefits plan, such plan may
offer such coverage in addition to the essential benefits
package as the QHBP offering entity may specify.
(2) Exchange-participating health benefits plans.--In the
case of an Exchange-participating health benefits plan, such
plan is required under section 203 to provide specified levels
of benefits and, in the case of a plan offering a premium-plus
level of benefits, provide additional benefits.
(3) Continuation of offering of separate excepted benefits
coverage.--Nothing in this division shall be construed as
affecting the offering outside of the Health Insurance Exchange
and under State law of health benefits in the form of excepted
benefits (described in section 202(b)(1)(B)(ii)) if such
benefits are offered under a separate policy, contract, or
certificate of insurance.
(c) Clinical Appropriateness.--Nothing in this Act shall be
construed to prohibit a group health plan or health insurance issuer
from using medical management practices so long as such management
practices are based on valid medical evidence and are relevant to the
patient whose medical treatment is under review.
(d) Provision of Benefits.--Nothing in this division shall be
construed as prohibiting a qualified health benefits plan from
subcontracting with stand-alone health insurance issuers or insurers
for the provision of dental, vision, mental health, and other benefits
and services.
SEC. 222. ESSENTIAL BENEFITS PACKAGE DEFINED.
(a) In General.--In this division, the term ``essential benefits
package'' means health benefits coverage, consistent with standards
adopted under section 224, to ensure the provision of quality health
care and financial security, that--
(1) provides payment for the items and services described
in subsection (b) in accordance with generally accepted
standards of medical or other appropriate clinical or
professional practice;
(2) limits cost-sharing for such covered health care items
and services in accordance with such benefit standards,
consistent with subsection (c);
(3) does not impose any annual or lifetime limit on the
coverage of covered health care items and services;
(4) complies with section 215(a) (relating to network
adequacy); and
(5) is equivalent in its scope of benefits, as certified by
Office of the Actuary of the Centers for Medicare & Medicaid
Services, to the average prevailing employer-sponsored coverage
in Y1.
In order to carry out paragraph (5), the Secretary of Labor shall
conduct a survey of employer-sponsored coverage to determine the
benefits typically covered by employers, including multiemployer plans,
and provide a report on such survey to the Health Benefits Advisory
Committee and to the Secretary of Health and Human Services.
(b) Minimum Services To Be Covered.--Subject to subsection (d), the
items and services described in this subsection are the following:
(1) Hospitalization.
(2) Outpatient hospital and outpatient clinic services,
including emergency department services.
(3) Professional services of physicians and other health
professionals.
(4) Such services, equipment, and supplies incident to the
services of a physician's or a health professional's delivery
of care in institutional settings, physician offices, patients'
homes or place of residence, or other settings, as appropriate.
(5) Prescription drugs.
(6) Rehabilitative and habilitative services.
(7) Mental health and substance use disorder services,
including behavioral health treatments.
(8) Preventive services, including those services
recommended with a grade of A or B by the Task Force on
Clinical Preventive Services and those vaccines recommended for
use by the Director of the Centers for Disease Control and
Prevention.
(9) Maternity care.
(10) Well-baby and well-child care and oral health, vision,
and hearing services, equipment, and supplies for children
under 21 years of age.
(11) Durable medical equipment, prosthetics, orthotics and
related supplies.
(c) Requirements Relating to Cost-Sharing and Minimum Actuarial
Value.--
(1) No cost-sharing for preventive services.--There shall
be no cost-sharing under the essential benefits package for--
(A) preventive items and services recommended with
a grade of A or B by the Task Force on Clinical
Preventive Services and those vaccines recommended for
use by the Director of the Centers for Disease Control
and Prevention; or
(B) well-baby and well-child care.
(2) Annual limitation.--
(A) Annual limitation.--The cost-sharing incurred
under the essential benefits package with respect to an
individual (or family) for a year does not exceed the
applicable level specified in subparagraph (B).
(B) Applicable level.--The applicable level
specified in this subparagraph for Y1 is not to exceed
$5,000 for an individual and not to exceed $10,000 for
a family. Such levels shall be increased (rounded to
the nearest $100) for each subsequent year by the
annual percentage increase in the enrollment-weighted
average of premium increases for basic plans applicable
to such year, except that Secretary shall adjust such
increase to ensure that the applicable level specified
in this subparagraph meets the minimum actuarial value
required under paragraph (3).
(C) Use of copayments.--In establishing cost-
sharing levels for basic, enhanced, and premium plans
under this subsection, the Secretary shall, to the
maximum extent possible, use only copayments and not
coinsurance.
(3) Minimum actuarial value.--
(A) In general.--The cost-sharing under the
essential benefits package shall be designed to provide
a level of coverage that is designed to provide
benefits that are actuarially equivalent to
approximately 70 percent of the full actuarial value of
the benefits provided under the reference benefits
package described in subparagraph (B).
(B) Reference benefits package described.--The
reference benefits package described in this
subparagraph is the essential benefits package if there
were no cost-sharing imposed.
(d) Assessment and Counseling for Domestic Violence.--The Secretary
shall support the need for an assessment and brief counseling for
domestic violence as part of a behavioral health assessment or primary
care visit and determine the appropriate coverage for such assessment
and counseling.
(e) Abortion Coverage Prohibited as Part of Minimum Benefits
Package.--
(1) Prohibition of required coverage.--The Health Benefits
Advisory Committee may not recommend under section 223(b), and
the Secretary may not adopt in standards under section 224(b),
the services described in paragraph (4)(A) or (4)(B) as part of
the essential benefits package and the Commissioner may not
require such services for qualified health benefits plans to
participate in the Health Insurance Exchange.
(2) Voluntary choice of coverage by plan.--In the case of a
qualified health benefits plan, the plan is not required (or
prohibited) under this Act from providing coverage of services
described in paragraph (4)(A) or (4)(B) and the QHBP offering
entity shall determine whether such coverage is provided.
(3) Abortion services.--
(A) Abortions for which public funding is
prohibited.--The services described in this
subparagraph are abortions for which the expenditure of
Federal funds appropriated for the Department of Health
and Human Services is not permitted, based on the law
as in effect as of the date that is 6 months before the
beginning of the plan year involved.
(B) Abortions for which public funding is
allowed.--The services described in this subparagraph
are abortions for which the expenditure of Federal
funds appropriated for the Department of Health and
Human Services is permitted, based on the law as in
effect as of the date that is 6 months before the
beginning of the plan year involved.
(f) Report Regarding Inclusion of Oral Health Care in Essential
Benefits Package.--Not later than 1 year after the date of the
enactment of this Act, the Secretary of Health and Human Services shall
submit to Congress a report containing the results of a study
determining the need and cost of providing accessible and affordable
oral health care to adults as part of the essential benefits package.
SEC. 223. HEALTH BENEFITS ADVISORY COMMITTEE.
(a) Establishment.--
(1) In general.--There is established a private-public
advisory committee which shall be a panel of medical and other
experts to be known as the Health Benefits Advisory Committee
to recommend covered benefits and essential, enhanced, and
premium plans.
(2) Chair.--The Surgeon General shall be a member and the
chair of the Health Benefits Advisory Committee.
(3) Membership.--The Health Benefits Advisory Committee
shall be composed of the following members, in addition to the
Surgeon General:
(A) Nine members who are not Federal employees or
officers and who are appointed by the President.
(B) Nine members who are not Federal employees or
officers and who are appointed by the Comptroller
General of the United States in a manner similar to the
manner in which the Comptroller General appoints
members to the Medicare Payment Advisory Commission
under section 1805(c) of the Social Security Act.
(C) Such even number of members (not to exceed 8)
who are Federal employees and officers, as the
President may appoint.
Such initial appointments shall be made not later than 60 days
after the date of the enactment of this Act.
(4) Terms.--Each member of the Health Benefits Advisory
Committee shall serve a 3-year term on the Committee, except
that the terms of the initial members shall be adjusted in
order to provide for a staggered term of appointment for all
such members.
(5) Participation.--The membership of the Health Benefits
Advisory Committee shall at least reflect providers, patient
representatives, employers (including small employers), labor,
health insurance issuers, experts in health care financing and
delivery, experts in oral health care, experts in racial and
ethnic disparities, experts on health care needs and
disparities of individuals with disabilities, representatives
of relevant governmental agencies, and at least one practicing
physician or other health professional and an expert in child
and adolescent health and shall represent a balance among
various sectors of the health care system so that no single
sector unduly influences the recommendations of such Committee.
(b) Duties.--
(1) Recommendations on benefit standards.--The Health
Benefits Advisory Committee shall recommend to the Secretary of
Health and Human Services (in this subtitle referred to as the
``Secretary'') benefit standards (as defined in paragraph (5)),
and periodic updates to such standards. In developing such
recommendations, the Committee shall take into account
innovation in health care and consider how such standards could
reduce health disparities.
(2) Deadline.--The Health Benefits Advisory Committee shall
recommend initial benefit standards to the Secretary not later
than 1 year after the date of the enactment of this Act.
(3) State input.--The Health Benefits Advisory Committee
shall examine the health coverage laws and benefits of each
State in developing recommendations under this subsection and
may incorporate such coverage and benefits as the Committee
determines to be appropriate and consistent with this Act. The
Health Benefits Advisory Committee shall also seek input from
the States and consider recommendations on how to ensure
quality of health coverage in all States.
(4) Public input.--The Health Benefits Advisory Committee
shall allow for public input as a part of developing
recommendations under this subsection.
(5) Benefit standards defined.--In this subtitle, the term
``benefit standards'' means standards respecting--
(A) the essential benefits package described in
section 222, including categories of covered
treatments, items and services within benefit classes,
and cost-sharing; and
(B) the cost-sharing levels for enhanced plans and
premium plans (as provided under section 303(c))
consistent with paragraph (5).
(6) Levels of cost-sharing for enhanced and premium
plans.--
(A) Enhanced plan.--The level of cost-sharing for
enhanced plans shall be designed so that such plans
have benefits that are actuarially equivalent to
approximately 85 percent of the actuarial value of the
benefits provided under the reference benefits package
described in section 222(c)(3)(B).
(B) Premium plan.--The level of cost-sharing for
premium plans shall be designed so that such plans have
benefits that are actuarially equivalent to
approximately 95 percent of the actuarial value of the
benefits provided under the reference benefits package
described in section 222(c)(3)(B).
(c) Operations.--
(1) Per diem pay.--Each member of the Health Benefits
Advisory Committee shall receive travel expenses, including per
diem in accordance with applicable provisions under subchapter
I of chapter 57 of title 5, United States Code, and shall
otherwise serve without additional pay.
(2) Members not treated as federal employees.--Members of
the Health Benefits Advisory Committee shall not be considered
employees of the Federal Government solely by reason of any
service on the Committee, except such members shall be
considered to be within the meaning of section 202(a) of title
18, United States Code, for the purposes of disclosure and
management of conflicts of interest.
(3) Application of faca.--The Federal Advisory Committee
Act (5 U.S.C. App.), other than section 14, shall apply to the
Health Benefits Advisory Committee.
(d) Publication.--The Secretary shall provide for publication in
the Federal Register and the posting on the Internet Website of the
Department of Health and Human Services of all recommendations made by
the Health Benefits Advisory Committee under this section.
SEC. 224. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT
STANDARDS.
(a) Process for Adoption of Recommendations.--
(1) Review of recommended standards.--Not later than 45
days after the date of receipt of benefit standards recommended
under section 223 (including such standards as modified under
paragraph (2)(B)), the Secretary shall review such standards
and shall determine whether to propose adoption of such
standards as a package.
(2) Determination to adopt standards.--If the Secretary
determines--
(A) to propose adoption of benefit standards so
recommended as a package, the Secretary shall, by
regulation under section 553 of title 5, United States
Code, propose adoption of such standards; or
(B) not to propose adoption of such standards as a
package, the Secretary shall notify the Health Benefits
Advisory Committee in writing of such determination and
the reasons for not proposing the adoption of such
recommendation and provide the Committee with a further
opportunity to modify its previous recommendations and
submit new recommendations to the Secretary on a timely
basis.
(3) Contingency.--If, because of the application of
paragraph (2)(B), the Secretary would otherwise be unable to
propose initial adoption of such recommended standards by the
deadline specified in subsection (b)(1), the Secretary shall,
by regulation under section 553 of title 5, United States Code,
propose adoption of initial benefit standards by such deadline.
(4) Publication.--The Secretary shall provide for
publication in the Federal Register of all determinations made
by the Secretary under this subsection.
(b) Adoption of Standards.--
(1) Initial standards.--Not later than 18 months after the
date of the enactment of this Act, the Secretary shall, through
the rulemaking process consistent with subsection (a), adopt an
initial set of benefit standards.
(2) Periodic updating standards.--Under subsection (a), the
Secretary shall provide for the periodic updating of the
benefit standards previously adopted under this section.
(3) Requirement.--The Secretary may not adopt any benefit
standards for an essential benefits package or for level of
cost-sharing that are inconsistent with the requirements for
such a package or level under sections 222 and 223(b)(5).
Subtitle D--Additional Consumer Protections
SEC. 231. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.
The Commissioner shall establish uniform marketing standards that
all QHBP offering entities shall meet with respect to qualified health
benefits plans that are health insurance coverage.
SEC. 232. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.
(a) In General.--A QHBP offering entity shall provide for timely
grievance and appeals mechanisms with respect to qualified health
benefits plans that the Commissioner shall establish consistent with
this section. The Commissioner shall establish time limits for each of
such mechanisms and implement them in a manner that is protective to
the needs of patients.
(b) Internal Claims and Appeals Process.--Under a qualified health
benefits plan the QHBP offering entity shall provide an internal claims
and appeals process that initially incorporates the claims and appeals
procedures (including urgent claims) set forth at section 2560.503-1 of
title 29, Code of Federal Regulations, as published on November 21,
2000 (65 Fed. Reg. 70246) and shall update such process in accordance
with any standards that the Commissioner may establish.
(c) External Review Process.--
(1) In general.--The Commissioner shall establish an
external review process (including procedures for expedited
reviews of urgent claims) that provides for an impartial,
independent, and de novo review of denied claims under this
division.
(2) Requiring fair grievance and appeals mechanisms.--A
determination made, with respect to a qualified health benefits
plan offered by a QHBP offering entity, under the external
review process established under this subsection shall be
binding on the plan and the entity.
(d) Time Limits.--The Commissioner shall establish time limits for
each of these processes and implement them in a manner that is
protective to the patient.
(e) Construction.--Nothing in this section shall be construed as
affecting the availability of judicial review under State law for
adverse decisions under subsection (b) or (c), subject to section 251.
SEC. 233. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.
(a) Accurate and Timely Disclosure.--
(1) For exchange-participating health benefits plans.--A
QHBP offering entity offering an Exchange-participating health
benefits plan shall comply with standards established by the
Commissioner for the accurate and timely disclosure to the
Commissioner and the public of plan documents, plan terms and
conditions, claims payment policies and practices, periodic
financial disclosure, data on enrollment, data on
disenrollment, data on the number of claims denials, data on
rating practices, information on cost-sharing and payments with
respect to any out-of-network coverage, and other information
as determined appropriate by the Commissioner.
(2) Employment-based health plans.--The Secretary of Labor
shall update and harmonize the Secretary's rules concerning the
accurate and timely disclosure to participants by group health
plans of plan disclosure, plan terms and conditions, and
periodic financial disclosure with the standards established by
the Commissioner under paragraph (1).
(3) Use of plain language.--
(A) In general.--The disclosures under paragraphs
(1) and (2) shall be provided in plain language.
(B) Definition.--In this paragraph, the term
``plain language'' means language that the intended
audience, including individuals with limited English
proficiency, can readily understand and use because
that language is concise, well-organized, and follows
other best practices of plain language writing.
(C) Guidance.--The Commissioner and the Secretary
of Labor shall jointly develop and issue guidance on
best practices of plain language writing.
(4) Information on rights.--The information disclosed under
this subsection shall include information on enrollee and
participant rights under this division.
(5) Cost-sharing transparency.--A qualified health benefits
plan shall allow individuals to learn the amount of cost-
sharing (including deductibles, copayments, and coinsurance)
under the individual's plan or coverage that the individual
would be responsible for paying with respect to the furnishing
of a specific item or service by a participating provider in a
timely manner upon request. At a minimum, this information
shall be made available to such individual via an Internet
Website and other means for individuals without access to the
Internet.
(b) Contracting Reimbursement.--A qualified health benefits plan
shall comply with standards established by the Commissioner to ensure
transparency to each health care provider relating to reimbursement
arrangements between such plan and such provider.
(c) Pharmacy Benefit Managers Transparency Requirements.--
(1) In general.--If a QHBP offering entity contracts with a
pharmacy benefit manager or other entity (in this subsection
referred to as a ``PBM'') to manage prescription drug coverage
or otherwise control prescription drug costs under a qualified
health benefits plan, the PBM shall provide at least annually
to the Commissioner and to the QHBP offering entity offering
such plan the following information, in a form and manner to be
determined by the Commissioner:
(A) Information on the number and total cost of
prescriptions under the contract that are filled via
mail order and at retail pharmacies.
(B) An estimate of aggregate average payments under
the contract, per prescription (weighted by
prescription volume), made to mail order and retail
pharmacies, and the average amount, per prescription,
that the PBM was paid by the plan for prescriptions
filled at mail order and retail pharmacists.
(C) An estimate of the aggregate average payment
per prescription (weighted by prescription volume)
under the contract received from pharmaceutical
manufacturers, including all rebates, discounts, prices
concessions, or administrative, and other payments from
pharmaceutical manufacturers, and a description of the
types of payments, and the amount of these payments
that were shared with the plan, and a description of
the percentage of prescriptions for which the PBM
received such payments.
(D) Information on the overall percentage of
generic drugs dispensed under the contract at retail
and mail order pharmacies, and the percentage of cases
in which a generic drug is dispensed when available.
(E) Information on the percentage and number of
cases under the contract in which individuals were
switched because of PBM policies or at the direct or
indirect control of the PBM from a prescribed drug that
had a lower cost for the QHBP offering entity to a drug
that had a higher cost for the QHBP offering entity,
the rationale for these switches, and a description of
the PBM policies governing such switches.
(2) Confidentiality of information.--Information disclosed
by a PBM to the Commissioner or a QHBP offering entity under
this subsection is confidential and shall not be disclosed by
the Commissioner or the QHBP offering entity in a form which
discloses the identity of a specific PBM or prices charged by
such PBM or a specific retailer, manufacturer, or wholesaler,
except only by the Commissioner--
(A) to permit State or Federal law enforcement
authorities to use the information provided for program
compliance purposes and for the purpose of combating
waste, fraud, and abuse;
(B) to permit the Comptroller General, the Medicare
Payment Advisory Commission, or the Secretary of Health
and Human Services to review the information provided;
and
(C) to permit the Director of the Congressional
Budget Office to review the information provided.
(3) Annual public report.--On an annual basis, the
Commissioner shall prepare a public report providing
industrywide aggregate or average information to be used in
assessing the overall impact of PBMs on prescription drug
prices and spending. Such report shall not disclose the
identity of a specific PBM, or prices charged by such PBM, or a
specific retailer, manufacturer, or wholesaler, or any other
confidential or trade secret information.
(4) Penalties.--The provisions of subsection (b)(3)(C) of
section 1927 shall apply to a PBM that fails to provide
information required under subsection (a) or that knowingly
provides false information in the same manner as such
provisions apply to a manufacturer with an agreement under such
section that fails to provide information under subsection
(b)(3)(A) of such section or knowingly provides false
information under such section, respectively.
SEC. 234. APPLICATION TO QUALIFIED HEALTH BENEFITS PLANS NOT OFFERED
THROUGH THE HEALTH INSURANCE EXCHANGE.
The requirements of the previous provisions of this subtitle shall
apply to qualified health benefits plans that are not being offered
through the Health Insurance Exchange only to the extent specified by
the Commissioner.
SEC. 235. TIMELY PAYMENT OF CLAIMS.
A QHBP offering entity shall comply with the requirements of
section 1857(f) of the Social Security Act with respect to a qualified
health benefits plan it offers in the same manner as a Medicare
Advantage organization is required to comply with such requirements
with respect to a Medicare Advantage plan it offers under part C of
Medicare.
SEC. 236. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF
BENEFITS.
The Commissioner shall establish standards for the coordination and
subrogation of benefits and reimbursement of payments in cases of
qualified health benefits plans involving individuals and multiple plan
coverage.
SEC. 237. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.
A QHBP offering entity is required to comply with administrative
simplification provisions under part C of title XI of the Social
Security Act with respect to qualified health benefits plans it offers.
SEC. 238. STATE PROHIBITIONS ON DISCRIMINATION AGAINST HEALTH CARE
PROVIDERS.
This Act (and the amendments made by this Act) shall not be
construed as superseding laws, as they now or hereinafter exist, of any
State or jurisdiction designed to prohibit a qualified health benefits
plan from discriminating with respect to participation, reimbursement,
covered services, indemnification, or related requirements under such
plan against a health care provider that is acting within the scope of
that provider's license or certification under applicable State law.
SEC. 239. PROTECTION OF PHYSICIAN PRESCRIBER INFORMATION.
(a) Study.--The Secretary of Health and Human Services shall
conduct a study on the use of physician prescriber information in sales
and marketing practices of pharmaceutical manufacturers.
(b) Report.--Based on the study conducted under subsection (a), the
Secretary shall submit to Congress a report on actions needed to be
taken by the Congress or the Secretary to protect providers from biased
marketing and sales practices.
SEC. 240. DISSEMINATION OF ADVANCE CARE PLANNING INFORMATION.
(a) In General.--The QHBP offering entity --
(1) shall provide for the dissemination of information
related to end-of-life planning to individuals seeking
enrollment in Exchange-participating health benefits plans
offered through the Exchange;
(2) shall present such individuals with--
(A) the option to establish advanced directives and
physician's orders for life sustaining treatment
according to the laws of the State in which the
individual resides; and
(B) information related to other planning tools;
and
(3) shall not promote suicide, assisted suicide,
euthanasia, or mercy killing.
The information presented under paragraph (2) shall not presume the
withdrawal of treatment and shall include end-of-life planning
information that includes options to maintain all or most medical
interventions.
(b) Construction.-- Nothing in this section shall be construed--
(1) to require an individual to complete an advanced
directive or a physician's order for life sustaining treatment
or other end-of-life planning document;
(2) to require an individual to consent to restrictions on
the amount, duration, or scope of medical benefits otherwise
covered under a qualified health benefits plan; or
(3) to promote suicide, assisted suicide, euthanasia, or
mercy killing.
(c) Advanced Directive Defined.--In this section, the term
``advanced directive'' includes a living will, a comfort care order, or
a durable power of attorney for health care.
(d) Prohibition on the Promotion of Assisted Suicide.--
(1) In general.--Subject to paragraph (3), information
provided to meet the requirements of subsection (a)(2) shall
not include advanced directives or other planning tools that
list or describe as an option suicide, assisted suicide,
euthanasia, or mercy killing, regardless of legality.
(2) Construction.--Nothing in paragraph (1) shall be
construed to apply to or affect any option to--
(A) withhold or withdraw of medical treatment or
medical care;
(B) withhold or withdraw of nutrition or hydration;
and
(C) provide palliative or hospice care or use an
item, good, benefit, or service furnished for the
purpose of alleviating pain or discomfort, even if such
use may increase the risk of death, so long as such
item, good, benefit, or service is not also furnished
for the purpose of causing, or the purpose of assisting
in causing, death, for any reason.
(3) No preemption of state law.--Nothing in this section
shall be construed to preempt or otherwise have any effect on
State laws regarding advance care planning, palliative care, or
end-of-life decision-making.
Subtitle E--Governance
SEC. 241. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.
(a) In General.--There is hereby established, as an independent
agency in the executive branch of the Government, a Health Choices
Administration (in this division referred to as the
``Administration'').
(b) Commissioner.--
(1) In general.--The Administration shall be headed by a
Health Choices Commissioner (in this division referred to as
the ``Commissioner'') who shall be appointed by the President,
by and with the advice and consent of the Senate.
(2) Compensation; etc.--The provisions of paragraphs (2),
(5), and (7) of subsection (a) (relating to compensation,
terms, general powers, rulemaking, and delegation) of section
702 of the Social Security Act (42 U.S.C. 902) shall apply to
the Commissioner and the Administration in the same manner as
such provisions apply to the Commissioner of Social Security
and the Social Security Administration.
(c) Inspector General.--For provision establishing an Office of the
Inspector General for the Health Choices Administration, see section
1647.
SEC. 242. DUTIES AND AUTHORITY OF COMMISSIONER.
(a) Duties.--The Commissioner is responsible for carrying out the
following functions under this division:
(1) Qualified plan standards.--The establishment of
qualified health benefits plan standards under this title,
including the enforcement of such standards in coordination
with State insurance regulators and the Secretaries of Labor
and the Treasury.
(2) Health insurance exchange.--The establishment and
operation of a Health Insurance Exchange under subtitle A of
title III.
(3) Individual affordability credits.--The administration
of individual affordability credits under subtitle C of title
III, including determination of eligibility for such credits.
(4) Additional functions.--Such additional functions as may
be specified in this division.
(b) Promoting Accountability.--
(1) In general.--The Commissioner shall undertake
activities in accordance with this subtitle to promote
accountability of QHBP offering entities in meeting Federal
health insurance requirements, regardless of whether such
accountability is with respect to qualified health benefits
plans offered through the Health Insurance Exchange or outside
of such Exchange.
(2) Compliance examination and audits.--
(A) In general.--The Commissioner shall, in
coordination with States, conduct audits of qualified
health benefits plan compliance with Federal
requirements. Such audits may include random
compliance audits and targeted audits in response to
complaints or other suspected noncompliance.
(B) Recoupment of costs in connection with
examination and audits.--The Commissioner is authorized
to recoup from qualified health benefits plans
reimbursement for the costs of such examinations and
audit of such QHBP offering entities.
(c) Data Collection.--The Commissioner shall collect data for
purposes of carrying out the Commissioner's duties, including for
purposes of promoting quality and value, protecting consumers, and
addressing disparities in health and health care and may share such
data with the Secretary of Health and Human Services.
(d) Sanctions Authority.--
(1) In general.--In the case that the Commissioner
determines that a QHBP offering entity violates a requirement
of this title, the Commissioner may, in coordination with State
insurance regulators and the Secretary of Labor, provide, in
addition to any other remedies authorized by law, for any of
the remedies described in paragraph (2).
(2) Remedies.--The remedies described in this paragraph,
with respect to a qualified health benefits plan offered by a
QHBP offering entity, are--
(A) civil money penalties of not more than the
amount that would be applicable under similar
circumstances for similar violations under section
1857(g) of the Social Security Act;
(B) suspension of enrollment of individuals under
such plan after the date the Commissioner notifies the
entity of a determination under paragraph (1) and until
the Commissioner is satisfied that the basis for such
determination has been corrected and is not likely to
recur;
(C) in the case of an Exchange-participating health
benefits plan, suspension of payment to the entity
under the Health Insurance Exchange for individuals
enrolled in such plan after the date the Commissioner
notifies the entity of a determination under paragraph
(1) and until the Secretary is satisfied that the basis
for such determination has been corrected and is not
likely to recur; or
(D) working with State insurance regulators to
terminate plans for repeated failure by the offering
entity to meet the requirements of this title.
(e) Standard Definitions of Insurance and Medical Terms.--The
Commissioner shall provide for the development of standards for the
definitions of terms used in health insurance coverage, including
insurance-related terms.
(f) Efficiency in Administration.--The Commissioner shall issue
regulations for the effective and efficient administration of the
Health Insurance Exchange and affordability credits under subtitle C,
including, with respect to the determination of eligibility for
affordability credits, the use of personnel who are employed in
accordance with the requirements of title 5, United States Code, to
carry out the duties of the Commissioner or, in the case of sections
308 and 341(b)(2), the use of State personnel who are employed in
accordance with standards prescribed by the Office of Personnel
Management pursuant to section 208 of the Intergovernmental Personnel
Act of 1970 (42 U.S.C. 4728).
SEC. 243. CONSULTATION AND COORDINATION.
(a) Consultation.--In carrying out the Commissioner's duties under
this division, the Commissioner, as appropriate, shall consult at least
with the following:
(1) State attorneys general and State insurance regulators,
including concerning the standards for health insurance
coverage that is a qualified health benefits plan under this
title and enforcement of such standards.
(2) The National Association of Insurance Commissioners,
including for purposes of using model guidelines established by
such association for purposes of subtitles B and D.
(3) Appropriate State agencies, specifically concerning the
administration of individual affordability credits under
subtitle C of title III and the offering of Exchange-
participating health benefits plans, to Medicaid eligible
individuals under subtitle A of such title.
(4) The Federal Trade Commission, specifically concerning
the development and issuance of guidance, rules, or standards
regarding fair marketing practices under section 231 or
otherwise, or any consumer disclosure requirements under
section 233 or otherwise.
(5) Other appropriate Federal agencies.
(6) Indian tribes and tribal organizations.
(b) Coordination.--
(1) In general.--In carrying out the functions of the
Commissioner, including with respect to the enforcement of the
provisions of this division, the Commissioner shall work in
coordination with existing Federal and State entities to the
maximum extent feasible consistent with this division and in a
manner that prevents conflicts of interest in duties and
ensures effective enforcement.
(2) Uniform standards.--The Commissioner, in coordination
with such entities, shall seek to achieve uniform standards
that adequately protect consumers in a manner that does not
unreasonably affect employers and insurers.
SEC. 244. HEALTH INSURANCE OMBUDSMAN.
(a) In General.--The Commissioner shall appoint within the Health
Choices Administration a Qualified Health Benefits Plan Ombudsman who
shall have expertise and experience in the fields of health care and
education of (and assistance to) individuals.
(b) Duties.--The Qualified Health Benefits Plan Ombudsman shall, in
a linguistically appropriate manner--
(1) receive complaints, grievances, and requests for
information submitted by individuals through means such as the
mail, by telephone, electronically, and in person;
(2) provide assistance with respect to complaints,
grievances, and requests referred to in paragraph (1),
including--
(A) helping individuals determine the relevant
information needed to seek an appeal of a decision or
determination;
(B) assistance to such individuals in choosing a
qualified health benefits plan in which to enroll;
(C) assistance to such individuals with any
problems arising from disenrollment from such a plan;
and
(D) assistance to such individuals in presenting
information under subtitle C (relating to affordability
credits); and
(3) submit annual reports to Congress and the Commissioner
that describe the activities of the Ombudsman and that include
such recommendations for improvement in the administration of
this division as the Ombudsman determines appropriate. The
Ombudsman shall not serve as an advocate for any increases in
payments or new coverage of services, but may identify issues
and problems in payment or coverage policies.
Subtitle F--Relation to Other Requirements; Miscellaneous
SEC. 251. RELATION TO OTHER REQUIREMENTS.
(a) Coverage Not Offered Through Exchange.--
(1) In general.--In the case of health insurance coverage
not offered through the Health Insurance Exchange (whether or
not offered in connection with an employment-based health
plan), and in the case of employment-based health plans, the
requirements of this title do not supercede any requirements
applicable under titles XXII and XXVII of the Public Health
Service Act, parts 6 and 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974, or State law,
except insofar as such requirements prevent the application of
a requirement of this division, as determined by the
Commissioner.
(2) Construction.--Nothing in paragraphs (1) or (2) shall
be construed as affecting the application of section 514 of the
Employee Retirement Income Security Act of 1974.
(b) Coverage Offered Through Exchange.--
(1) In general.--In the case of health insurance coverage
offered through the Health Insurance Exchange--
(A) the requirements of this title do not supercede
any requirements (including requirements relating to
genetic information nondiscrimination and mental health
parity) applicable under title XXVII of the Public
Health Service Act or under State law, except insofar
as such requirements prevent the application of a
requirement of this division, as determined by the
Commissioner; and
(B) individual rights and remedies under State laws
shall apply.
(2) Construction.--In the case of coverage described in
paragraph (1), nothing in such paragraph shall be construed as
preventing the application of rights and remedies under State
laws to health insurance issuers generally with respect to any
requirement referred to in paragraph (1)(A). The previous
sentence shall not be construed as providing for the
applicability of rights or remedies under State laws with
respect to requirements applicable to employers or other plan
sponsors in connection with arrangements which are treated as
group health plans under section 802(a)(1) of the Employee
Retirement Income Security Act of 1974.
SEC. 252. PROHIBITING DISCRIMINATION IN HEALTH CARE.
(a) In General.--Except as otherwise explicitly permitted by this
Act and by subsequent regulations consistent with this Act, all health
care and related services (including insurance coverage and public
health activities) covered by this Act shall be provided without regard
to personal characteristics extraneous to the provision of high quality
health care or related services.
(b) Implementation.--To implement the requirement set forth in
subsection (a), the Secretary of Health and Human Services shall, not
later than 18 months after the date of the enactment of this Act,
promulgate such regulations as are necessary or appropriate to insure
that all health care and related services (including insurance coverage
and public health activities) covered by this Act are provided (whether
directly or through contractual, licensing, or other arrangements)
without regard to personal characteristics extraneous to the provision
of high quality health care or related services.
SEC. 253. WHISTLEBLOWER PROTECTION.
(a) Retaliation Prohibited.--No employer may discharge any employee
or otherwise discriminate against any employee with respect to his
compensation, terms, conditions, or other privileges of employment
because the employee (or any person acting pursuant to a request of the
employee)--
(1) provided, caused to be provided, or is about to provide
or cause to be provided to the employer, the Federal
Government, or the attorney general of a State information
relating to any violation of, or any act or omission the
employee reasonably believes to be a violation of any provision
of this Act or any order, rule, or regulation promulgated under
this Act;
(2) testified or is about to testify in a proceeding
concerning such violation;
(3) assisted or participated or is about to assist or
participate in such a proceeding; or
(4) objected to, or refused to participate in, any
activity, policy, practice, or assigned task that the employee
(or other such person) reasonably believed to be in violation
of any provision of this Act or any order, rule, or regulation
promulgated under this Act.
(b) Enforcement Action.--An employee covered by this section who
alleges discrimination by an employer in violation of subsection (a)
may bring an action governed by the rules, procedures, legal burdens of
proof, and remedies set forth in section 40(b) of the Consumer Product
Safety Act (15 U.S.C. 2087(b)).
(c) Employer Defined.--As used in this section, the term
``employer'' means any person (including one or more individuals,
partnerships, associations, corporations, trusts, professional
membership organization including a certification, disciplinary, or
other professional body, unincorporated organizations, nongovernmental
organizations, or trustees) engaged in profit or nonprofit business or
industry whose activities are governed by this Act, and any agent,
contractor, subcontractor, grantee, or consultant of such person.
(d) Rule of Construction.--The rule of construction set forth in
section 20109(h) of title 49, United States Code, shall also apply to
this section.
SEC. 254. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.
Nothing in this division shall be construed to alter or supersede
any statutory or other obligation to engage in collective bargaining
over the terms or conditions of employment related to health care. Any
plan amendment made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to conform to any
requirement added by this division shall not be treated as a
termination of such collective bargaining agreement.
SEC. 255. SEVERABILITY.
If any provision of this Act, or any application of such provision
to any person or circumstance, is held to be unconstitutional, the
remainder of the provisions of this Act and the application of the
provision to any other person or circumstance shall not be affected.
SEC. 256. TREATMENT OF HAWAII PREPAID HEALTH CARE ACT.
(a) In General.--Subject to this section--
(1) nothing in this division (or an amendment made by this
division) shall be construed to modify or limit the application
of the exemption for the Hawaii Prepaid Health Care Act (Haw.
Rev. Stat. Sec. Sec. 393-1 et seq.) as provided for under
section 514(b)(5) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1144(b)(5)), and such exemption shall
also apply with respect to the provisions of this division; and
(2) for purposes of this division (and the amendments made
by this division), coverage provided pursuant to the Hawaii
Prepaid Health Care Act shall be treated as a qualified health
benefits plan providing acceptable coverage so long as the
Secretary of Labor determines that such coverage for employees
(taking into account the benefits and the cost to employees for
such benefits) is substantially equivalent to or greater than
the coverage provided for employees pursuant to the essential
benefits package.
(b) Coordination With State Law of Hawaii.--The Commissioner shall,
based on ongoing consultation with the appropriate officials of the
State of Hawaii, make adjustments to rules and regulations of the
Commissioner under this division as may be necessary, as determined by
the Commissioner, to most effectively coordinate the provisions of this
division with the provisions of the Hawaii Prepaid Health Care Act,
taking into account any changes made from time to time to the Hawaii
Prepaid Health Care Act and related laws of such State.
SEC. 257. ACTIONS BY STATE ATTORNEYS GENERAL.
Any State attorney general may bring a civil action in the name of
such State as parens patriae on behalf of natural persons residing in
such State, in any district court of the United States or State court
having jurisdiction of the defendant to secure monetary or equitable
relief for violation of any provisions of this title or regulations
issued thereunder. Nothing in this section shall be construed as
affecting the application of section 514 of the Employee Retirement
Income Security Act of 1974.
SEC. 258. APPLICATION OF STATE AND FEDERAL LAWS REGARDING ABORTION.
(a) No Preemption of State Laws Regarding Abortion.--Nothing in
this Act shall be construed to preempt or otherwise have any effect on
State laws regarding the prohibition of (or requirement of) coverage,
funding, or procedural requirements on abortions, including parental
notification or consent for the performance of an abortion on a minor.
(b) No Effect on Federal Laws Regarding Abortion.--
(1) In general.--Nothing in this Act shall be construed to
have any effect on Federal laws regarding--
(A) conscience protection;
(B) willingness or refusal to provide abortion; and
(C) discrimination on the basis of the willingness
or refusal to provide, pay for, cover, or refer for
abortion or to provide or participate in training to
provide abortion.
(c) No Effect on Federal Civil Rights Law.--Nothing in this section
shall alter the rights and obligations of employees and employers under
title VII of the Civil Rights Act of 1964.
SEC. 259. NONDISCRIMINATION ON ABORTION AND RESPECT FOR RIGHTS OF
CONSCIENCE.
(a) Nondiscrimination.--A Federal agency or program, and any State
or local government that receives Federal financial assistance under
this Act (or an amendment made by this Act), may not--
(1) subject any individual or institutional health care
entity to discrimination; or
(2) require any health plan created or regulated under this
Act (or an amendment made by this Act) to subject any
individual or institutional health care entity to
discrimination,
on the basis that the health care entity does not provide, pay for,
provide coverage of, or refer for abortions.
(b) Definition.--In this section, the term ``health care entity''
includes an individual physician or other health care professional, a
hospital, a provider-sponsored organization, a health maintenance
organization, a health insurance plan, or any other kind of health care
facility, organization, or plan.
(c) Administration.--The Office for Civil Rights of the Department
of Health and Human Services is designated to receive complaints of
discrimination based on this section, and coordinate the investigation
of such complaints.
SEC. 260. AUTHORITY OF FEDERAL TRADE COMMISSION.
Section 6 of the Federal Trade Commission Act (15 U.S.C. 46) is
amended by striking ``and prepare reports'' and all that follows and
inserting the following: ``and prepare reports, and to share
information under clauses (f) and (k), relating to insurance.
Notwithstanding section 4, the Commission's authority shall include the
authority to conduct studies and prepare reports, and to share
information under clauses (f) and (k), relating to insurance, without
regard to whether the subject of such studies, reports, or information
is for-profit or not-for-profit.''.
SEC. 261. CONSTRUCTION REGARDING STANDARD OF CARE.
(a) In General.--The development, recognition, or implementation of
any guideline or other standard under a provision described in
subsection (b) shall not be construed to establish the standard of care
or duty of care owed by health care providers to their patients in any
medical malpractice action or claim (as defined in section 431(7) of
the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11151(7)).
(b) Provisions Described.--The provisions described in this
subsection are the following:
(1) Section 324 (relating to modernized payment initiatives
and delivery system reform under the public health option).
(2) The amendments made by section 1151 (relating to
reducing potentially preventable hospital readmissions).
(3) The amendments made by section 1751 (relating to health
care acquired conditions).
(4) Section 3131 of the Public Health Service Act (relating
to the Task Force on Clinical Preventive Services), added by
section 2301.
(5) Part D of title IX of the Public Health Service Act
(relating to implementation of best practices in the delivery
of health care), added by section 2401.
(c) Savings Clause for State Medical Malpractice Laws.--Nothing in
this Act or the amendments made by this Act shall be construed to
modify or impair State law governing legal standards or procedures used
in medical malpractice cases, including the authority of a State to
make or implement such law.
SEC. 262. RESTORING APPLICATION OF ANTITRUST LAWS TO HEALTH SECTOR
INSURERS.
(a) Amendment to McCarran-Ferguson Act.--Section 3 of the Act of
March 9, 1945 (15 U.S.C. 1013), commonly known as the McCarran-Ferguson
Act, is amended by adding at the end the following:
``(c)(1) Except as provided in paragraph (2), nothing contained in
this Act shall modify, impair, or supersede the operation of any of the
antitrust laws with respect to the business of health insurance or the
business of medical malpractice insurance.
``(2) Paragraph (1) shall not apply to--
``(A) collecting, compiling, classifying, or disseminating
historical loss data;
``(B) determining a loss development factor applicable to
historical loss data; or
``(C) performing actuarial services if doing so does not
involve a restraint of trade.
``(3) For purposes of this subsection--
``(A) the term `antitrust laws' has the meaning given it in
subsection (a) of the first section of the Clayton Act, except
that such term includes section 5 of the Federal Trade
Commission Act to the extent that such section 5 applies to
unfair methods of competition;
``(B) the term `historical loss data' means information
respecting claims paid, or reserves held for claims reported,
by any person engaged in the business of insurance; and
``(C) the term `loss development factor' means an
adjustment to be made to the aggregate of losses incurred
during a prior period of time that have been paid, or for which
claims have been received and reserves are being held, in order
to estimate the aggregate of the losses incurred during such
period that will ultimately be paid.''.
(b) Related Provision.--For purposes of section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent such section applies
to unfair methods of competition, section 3(c) of the McCarran-Ferguson
Act shall apply with respect to the business of health insurance, and
with respect to the business of medical malpractice insurance, without
regard to whether such business is carried on for profit,
notwithstanding the definition of ``Corporation'' contained in section
4 of the Federal Trade Commission Act.
(c) Related Preservation of Antitrust Laws.--Except as provided in
subsections (a) and (b), nothing in this Act, or in the amendments made
by this Act, shall be construed to modify, impair, or supersede the
operation of any of the antitrust laws. For purposes of the preceding
sentence, the term ``antitrust laws'' has the meaning given it in
subsection (a) of the first section of the Clayton Act, except that it
includes section 5 of the Federal Trade Commission Act to the extent
that such section 5 applies to unfair methods of competition.
SEC. 263. STUDY AND REPORT ON METHODS TO INCREASE EHR USE BY SMALL
HEALTH CARE PROVIDERS.
(a) Study.--The Secretary of Health and Human Services shall
conduct a study of potential methods to increase the use of qualified
electronic health records (as defined in section 3000(13) of the Public
Health Service Act) by small health care providers. Such study shall
consider at least the following methods:
(1) Providing for higher rates of reimbursement or other
incentives for such health care providers to use electronic
health records (taking into consideration initiatives by
private health insurance companies and incentives provided
under Medicare under title XVIII of the Social Security Act,
Medicaid under title XIX of such Act, and other programs).
(2) Promoting low-cost electronic health record software
packages that are available for use by such health care
providers, including software packages that are available to
health care providers through the Veterans Administration and
other sources.
(3) Training and education of such health care providers on
the use of electronic health records.
(4) Providing assistance to such health care providers on
the implementation of electronic health records.
(b) Report.--Not later than December 31, 2013, the Secretary of
Health and Human Services shall submit to Congress a report containing
the results of the study conducted under subsection (a), including
recommendations for legislation or administrative action to increase
the use of electronic health records by small health care providers
that include the use of both public and private funding sources.
SEC. 264. PERFORMANCE ASSESSMENT AND ACCOUNTABILITY: APPLICATION OF
GPRA.
(a) Application of GPRA.--Section 306 of title 5, United States
Code, and sections 1115, 1116, 1117, and 9703 of title 31 of such Code
(originally enacted by the Government Performance and Results Act of
1993, Public Law 103-62) apply to the executive agencies established by
this Act, including the Health Choices Administration. Under such
section 306, each such executive agency is required to provide for a
strategic plan every 3 years.
(b) Improving Consumer Service and Streamlining Procedures.--Every
3 years each such executive agency shall--
(1)(A) assess the quality of customer service provided, (B)
develop a strategy for improving such service, and (C)
establish standards for high-quality customer service; and
(2)(A) identify redundant rules, regulations, and
procedures, and (B) develop and implement a plan for
eliminating or streamlining such redundancies.
SEC. 265. LIMITATION ON ABORTION FUNDING.
(a) In General.--No funds authorized or appropriated by this Act
(or an amendment made by this Act) may be used to pay for any abortion
or to cover any part of the costs of any health plan that includes
coverage of abortion, except in the case where a woman suffers from a
physical disorder, physical injury, or physical illness that would, as
certified by a physician, place the woman in danger of death unless an
abortion is performed, including a life-endangering physical condition
caused by or arising from the pregnancy itself, or unless the pregnancy
is the result of an act of rape or incest.
(b) Option to Purchase Separate Supplemental Coverage or Plan.--
Nothing in this section shall be construed as prohibiting any
nonfederal entity (including an individual or a State or local
government) from purchasing separate supplemental coverage for
abortions for which funding is prohibited under this section, or a plan
that includes such abortions, so long as--
(1) such coverage or plan is paid for entirely using only
funds not authorized or appropriated by this Act; and
(2) such coverage or plan is not purchased using--
(A) individual premium payments required for a
Exchange-participating health benefits plan towards
which an affordability credit is applied; or
(B) other nonfederal funds required to receive a
federal payment, including a State's or locality's
contribution of Medicaid matching funds.
(c) Option to Offer Separate Supplemental Coverage or Plan.--
Notwithstanding section 303(b), nothing in this section shall restrict
any nonfederal QHBP offering entity from offering separate supplemental
coverage for abortions for which funding is prohibited under this
section, or a plan that includes such abortions, so long as--
(1) premiums for such separate supplemental coverage or
plan are paid for entirely with funds not authorized or
appropriated by this Act;
(2) administrative costs and all services offered through
such supplemental coverage or plan are paid for using only
premiums collected for such coverage or plan; and
(3) any nonfederal QHBP offering entity that offers an
Exchange-participating health benefits plan that includes
coverage for abortions for which funding is prohibited under
this section also offers an Exchange-participating health
benefits plan that is identical in every respect except that it
does not cover abortions for which funding is prohibited under
this section.
TITLE III--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
SEC. 301. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF
DUTIES; DEFINITIONS.
(a) Establishment.--There is established within the Health Choices
Administration and under the direction of the Commissioner a Health
Insurance Exchange in order to facilitate access of individuals and
employers, through a transparent process, to a variety of choices of
affordable, quality health insurance coverage, including a public
health insurance option.
(b) Outline of Duties of Commissioner.--In accordance with this
subtitle and in coordination with appropriate Federal and State
officials as provided under section 243(b), the Commissioner shall--
(1) under section 304 establish standards for, accept bids
from, and negotiate and enter into contracts with, QHBP
offering entities for the offering of health benefits plans
through the Health Insurance Exchange, with different levels of
benefits required under section 303, and including with respect
to oversight and enforcement;
(2) under section 305 facilitate outreach and enrollment in
such plans of Exchange-eligible individuals and employers
described in section 302; and
(3) conduct such activities related to the Health Insurance
Exchange as required, including establishment of a risk pooling
mechanism under section 306 and consumer protections under
subtitle D of title II.
SEC. 302. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.
(a) Access to Coverage.--In accordance with this section, all
individuals are eligible to obtain coverage through enrollment in an
Exchange-participating health benefits plan offered through the Health
Insurance Exchange unless such individuals are enrolled in another
qualified health benefits plan or certain other acceptable coverage.
(b) Definitions.--In this division:
(1) Exchange-eligible individual.--The term ``Exchange-
eligible individual'' means an individual who is eligible under
this section to be enrolled through the Health Insurance
Exchange in an Exchange-participating health benefits plan and,
with respect to family coverage, includes dependents of such
individual.
(2) Exchange-eligible employer.--The term ``Exchange-
eligible employer'' means an employer that is eligible under
this section to enroll through the Health Insurance Exchange
employees of the employer (and their dependents) in Exchange-
eligible health benefits plans.
(3) Employment-related definitions.--The terms
``employer'', ``employee'', ``full-time employee'', and ``part-
time employee'' have the meanings given such terms by the
Commissioner for purposes of this division.
(c) Transition.--Individuals and employers shall only be eligible
to enroll or participate in the Health Insurance Exchange in accordance
with the following transition schedule:
(1) First year.--In Y1 (as defined in section 100(c))--
(A) individuals described in subsection (d)(1),
including individuals described in subsection (d)(3);
and
(B) smallest employers described in subsection
(e)(1).
(2) Second year.--In Y2--
(A) individuals and employers described in
paragraph (1); and
(B) smaller employers described in subsection
(e)(2).
(3) Third and subsequent years.--In Y3--
(A) individuals and employers described in
paragraph (2);
(B) small employers described in subsection (e)(3);
and
(C) larger employers as permitted by the
Commissioner under subsection (e)(4).
(d) Individuals.--
(1) Individual described.--Subject to the succeeding
provisions of this subsection, an individual described in this
paragraph is an individual who--
(A) is not enrolled in coverage described in
subparagraph (C) or (D) of paragraph (2); and
(B) is not enrolled in coverage as a full-time
employee (or as a dependent of such an employee) under
a group health plan if the coverage and an employer
contribution under the plan meet the requirements of
section 412.
For purposes of subparagraph (B), in the case of an individual
who is self-employed, who has at least 1 employee, and who
meets the requirements of section 412, such individual shall be
deemed a full-time employee described in such subparagraph.
(2) Acceptable coverage.--For purposes of this division,
the term ``acceptable coverage'' means any of the following:
(A) Qualified health benefits plan coverage.--
Coverage under a qualified health benefits plan.
(B) Grandfathered health insurance coverage;
coverage under current group health plan.--Coverage
under a grandfathered health insurance coverage (as
defined in subsection (a) of section 202) or under a
current group health plan (described in subsection (b)
of such section).
(C) Medicare.--Coverage under part A of title XVIII
of the Social Security Act.
(D) Medicaid.--Coverage for medical assistance
under title XIX of the Social Security Act, excluding
such coverage that is only available because of the
application of subsection (u), (z), (aa), or (hh) of
section 1902 of such Act.
(E) Members of the armed forces and dependents
(including tricare).--Coverage under chapter 55 of
title 10, United States Code, including similar
coverage furnished under section 1781 of title 38 of
such Code.
(F) VA.--Coverage under the veteran's health care
program under chapter 17 of title 38, United States
Code.
(G) Other coverage.--Such other health benefits
coverage, such as a State health benefits risk pool, as
the Commissioner, in coordination with the Secretary of
the Treasury, recognizes for purposes of this
paragraph.
The Commissioner shall make determinations under this paragraph
in coordination with the Secretary of the Treasury.
(3) Continuing eligibility permitted.--
(A) In general.--Except as provided in subparagraph
(B), once an individual qualifies as an Exchange-
eligible individual under this subsection (including as
an employee or dependent of an employee of an Exchange-
eligible employer) and enrolls under an Exchange-
participating health benefits plan through the Health
Insurance Exchange, the individual shall continue to be
treated as an Exchange-eligible individual until the
individual is no longer enrolled with an Exchange-
participating health benefits plan.
(B) Exceptions.--
(i) In general.--Subparagraph (A) shall not
apply to an individual once the individual
becomes eligible for coverage--
(I) under part A of the Medicare
program;
(II) under the Medicaid program as
a Medicaid-eligible individual, except
as permitted under clause (ii); or
(III) in such other circumstances
as the Commissioner may provide.
(ii) Transition period.--In the case
described in clause (i)(II), the Commissioner
shall permit the individual to continue
treatment under subparagraph (A) until such
limited time as the Commissioner determines it
is administratively feasible, consistent with
minimizing disruption in the individual's
access to health care.
(4) Transition for chip eligibles.--An individual who is
eligible for child health assistance under title XXI of the
Social Security Act for a period during Y1 shall not be an
Exchange-eligible individual during such period.
(e) Employers.--
(1) Smallest employer.--Subject to paragraph (5), smallest
employers described in this paragraph are employers with 25 or
fewer employees.
(2) Smaller employers.--Subject to paragraph (5), smaller
employers described in this paragraph are employers that are
not smallest employers described in paragraph (1) and have 50
or fewer employees.
(3) Small employers.--Subject to paragraph (5), small
employers described in this paragraph are employers that are
not described in paragraph (1) or (2) and have 100 or fewer
employees.
(4) Larger employers.--
(A) In general.--Beginning with Y3, the
Commissioner may permit employers not described in
paragraph (1), (2), or (3) to be Exchange-eligible
employers.
(B) Phase-in.--In applying subparagraph (A), the
Commissioner may phase-in the application of such
subparagraph based on the number of full-time employees
of an employer and such other considerations as the
Commissioner deems appropriate.
(5) Continuing eligibility.--Once an employer is permitted
to be an Exchange-eligible employer under this subsection and
enrolls employees through the Health Insurance Exchange, the
employer shall continue to be treated as an Exchange-eligible
employer for each subsequent plan year regardless of the number
of employees involved unless and until the employer meets the
requirement of section 411(a) through paragraph (1) of such
section by offering a group health plan and not through
offering an Exchange-participating health benefits plan.
(6) Employer participation and contributions.--
(A) Satisfaction of employer responsibility.--For
any year in which an employer is an Exchange-eligible
employer, such employer may meet the requirements of
section 412 with respect to employees of such employer
by offering such employees the option of enrolling with
Exchange-participating health benefits plans through
the Health Insurance Exchange consistent with the
provisions of subtitle B of title IV.
(B) Employee choice.--Any employee offered
Exchange-participating health benefits plans by the
employer of such employee under subparagraph (A) may
choose coverage under any such plan. That choice
includes, with respect to family coverage, coverage of
the dependents of such employee.
(7) Affiliated groups.--Any employer which is part of a
group of employers who are treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 of the Internal
Revenue Code of 1986 shall be treated, for purposes of this
subtitle, as a single employer.
(8) Treatment of multi-employer plans.--The plan sponsor of
a group health plan (as defined in section 773(a) of the
Employee Retirement Income Security Act of 1974) that is a
multi-employer plan (as defined in section 3(37) of such Act)
may obtain health insurance coverage with respect to
participants in the plan through the Exchange to the same
extent that an employer not described in paragraph (1) or (2)
is permitted by the Commissioner to obtain health insurance
coverage through the Exchange as an Exchange-eligible employer.
(9) Other counting rules.--The Commissioner shall establish
rules relating to how employees are counted for purposes of
carrying out this subsection.
(f) Special Situation Authority.--The Commissioner shall have the
authority to establish such rules as may be necessary to deal with
special situations with regard to uninsured individuals and employers
participating as Exchange-eligible individuals and employers, such as
transition periods for individuals and employers who gain, or lose,
Exchange-eligible participation status, and to establish grace periods
for premium payment.
(g) Surveys of Individuals and Employers.--The Commissioner shall
provide for periodic surveys of Exchange-eligible individuals and
employers concerning satisfaction of such individuals and employers
with the Health Insurance Exchange and Exchange-participating health
benefits plans.
(h) Exchange Access Study.--
(1) In general.--The Commissioner shall conduct a study of
access to the Health Insurance Exchange for individuals and for
employers, including individuals and employers who are not
eligible and enrolled in Exchange-participating health benefits
plans. The goal of the study is to determine if there are
significant groups and types of individuals and employers who
are not Exchange-eligible individuals or employers, but who
would have improved benefits and affordability if made eligible
for coverage in the Exchange.
(2) Items included in study.--Such study also shall
examine--
(A) the terms, conditions, and affordability of
group health coverage offered by employers and QHBP
offering entities outside of the Exchange compared to
Exchange-participating health benefits plans; and
(B) the affordability-test standard for access of
certain employed individuals to coverage in the Health
Insurance Exchange.
(3) Report.--Not later than January 1 of Y3, in Y6, and
thereafter, the Commissioner shall submit to Congress a report
on the study conducted under this subsection and shall include
in such report recommendations regarding changes in standards
for Exchange eligibility for individuals and employers.
SEC. 303. BENEFITS PACKAGE LEVELS.
(a) In General.--The Commissioner shall specify the benefits to be
made available under Exchange-participating health benefits plans
during each plan year, consistent with subtitle C of title II and this
section.
(b) Limitation on Health Benefits Plans Offered by Offering
Entities.--The Commissioner may not enter into a contract with a QHBP
offering entity under section 304(c) for the offering of an Exchange-
participating health benefits plan in a service area unless the
following requirements are met:
(1) Required offering of basic plan.--The entity offers
only one basic plan for such service area.
(2) Optional offering of enhanced plan.--If and only if the
entity offers a basic plan for such service area, the entity
may offer one enhanced plan for such area.
(3) Optional offering of premium plan.--If and only if the
entity offers an enhanced plan for such service area, the
entity may offer one premium plan for such area.
(4) Optional offering of premium-plus plans.--If and only
if the entity offers a premium plan for such service area, the
entity may offer one or more premium-plus plans for such area.
All such plans may be offered under a single contract with the
Commissioner.
(c) Specification of Benefit Levels for Plans.--
(1) In general.--The Commissioner shall establish the
following standards consistent with this subsection and title
II:
(A) Basic, enhanced, and premium plans.--Standards
for 3 levels of Exchange-participating health benefits
plans: basic, enhanced, and premium (in this division
referred to as a ``basic plan'', ``enhanced plan'', and
``premium plan'', respectively).
(B) Premium-plus plan benefits.--Standards for
additional benefits that may be offered, consistent
with this subsection and subtitle C of title II, under
a premium plan (such a plan with additional benefits
referred to in this division as a ``premium-plus
plan'') .
(2) Basic plan.--
(A) In general.--A basic plan shall offer the
essential benefits package required under title II for
a qualified health benefits plan with an actuarial
value of 70 percent of the full actuarial value of the
benefits provided under the reference benefits package.
(B) Tiered cost-sharing for affordable credit
eligible individuals.--In the case of an affordable
credit eligible individual (as defined in section
342(a)(1)) enrolled in an Exchange-participating health
benefits plan, the benefits under a basic plan are
modified to provide for the reduced cost-sharing for
the income tier applicable to the individual under
section 324(c).
(3) Enhanced plan.--An enhanced plan shall offer, in
addition to the level of benefits under the basic plan, a lower
level of cost-sharing as provided under title II consistent
with section 223(b)(5)(A).
(4) Premium plan.--A premium plan shall offer, in addition
to the level of benefits under the basic plan, a lower level of
cost-sharing as provided under title II consistent with section
223(b)(5)(B).
(5) Premium-plus plan.--A premium-plus plan is a premium
plan that also provides additional benefits, such as adult oral
health and vision care, approved by the Commissioner. The
portion of the premium that is attributable to such additional
benefits shall be separately specified.
(6) Range of permissible variation in cost-sharing.--The
Commissioner shall establish a permissible range of variation
of cost-sharing for each basic, enhanced, and premium plan,
except with respect to any benefit for which there is no cost-
sharing permitted under the essential benefits package. Such
variation shall permit a variation of not more than plus (or
minus) 10 percent in cost-sharing with respect to each benefit
category specified under section 222. Nothing in this subtitle
shall be construed as prohibiting tiering in cost-sharing,
including through preferred and participating providers and
prescription drugs. In applying this paragraph, a health
benefits plan may increase the cost-sharing by 10 percent
within each category or tier, as applicable, and may decrease
or eliminate cost-sharing in any category or tier as compared
to the essential benefits package.
(d) Treatment of State Benefit Mandates.--Insofar as a State
requires a health insurance issuer offering health insurance coverage
to include benefits beyond the essential benefits package, such
requirement shall continue to apply to an Exchange-participating health
benefits plan, if the State has entered into an arrangement
satisfactory to the Commissioner to reimburse the Commissioner for the
amount of any net increase in affordability premium credits under
subtitle C as a result of an increase in premium in basic plans as a
result of application of such requirement.
SEC. 304. CONTRACTS FOR THE OFFERING OF EXCHANGE-PARTICIPATING HEALTH
BENEFITS PLANS.
(a) Contracting Duties.--In carrying out section 301(b)(1) and
consistent with this subtitle:
(1) Offering entity and plan standards.--The Commissioner
shall--
(A) establish standards necessary to implement the
requirements of this title and title II for--
(i) QHBP offering entities for the offering
of an Exchange-participating health benefits
plan; and
(ii) Exchange-participating health benefits
plans; and
(B) certify QHBP offering entities and qualified
health benefits plans as meeting such standards and
requirements of this title and title II for purposes of
this subtitle.
(2) Soliciting and negotiating bids; contracts.--
(A) Bid solicitation.--The Commissioner shall
solicit bids from QHBP offering entities for the
offering of Exchange-participating health benefits
plans. Such bids shall include justification for
proposed premiums.
(B) Bid review and negotiation.--The Commissioner
shall, based upon a review of such bids including the
premiums and their affordability, negotiate with such
entities for the offering of such plans.
(C) Denial of excessive premiums.--The Commissioner
shall deny excessive premiums and premium increases.
(D) Contracts.--The Commissioner shall enter into
contracts with such entities for the offering of such
plans through the Health Insurance Exchange under terms
(consistent with this title) negotiated between the
Commissioner and such entities.
(3) Federal acquisition regulation.--In carrying out this
subtitle, the Commissioner may waive such provisions of the
Federal Acquisition Regulation that the Commissioner determines
to be inconsistent with the furtherance of this subtitle, other
than provisions relating to confidentiality of information.
Competitive procedures shall be used in awarding contracts
under this subtitle to the extent that such procedures are
consistent with this subtitle.
(b) Standards for QHBP Offering Entities To Offer Exchange-
Participating Health Benefits Plans.--The standards established under
subsection (a)(1)(A) shall require that, in order for a QHBP offering
entity to offer an Exchange-participating health benefits plan, the
entity must meet the following requirements:
(1) Licensed.--The entity shall be licensed to offer health
insurance coverage under State law for each State in which it
is offering such coverage.
(2) Data reporting.--The entity shall provide for the
reporting of such information as the Commissioner may specify,
including information necessary to administer the risk pooling
mechanism described in section 306(b) and information to
address disparities in health and health care.
(3) Affordability.--The entity shall provide for affordable
premiums.
(4) Implementing affordability credits.--The entity shall
provide for implementation of the affordability credits
provided for enrollees under subtitle C, including the
reduction in cost-sharing under section 344(c).
(5) Enrollment.--The entity shall accept all enrollments
under this subtitle, subject to such exceptions (such as
capacity limitations) in accordance with the requirements under
title II for a qualified health benefits plan. The entity shall
notify the Commissioner if the entity projects or anticipates
reaching such a capacity limitation that would result in a
limitation in enrollment.
(6) Risk pooling participation.--The entity shall
participate in such risk pooling mechanism as the Commissioner
establishes under section 306(b).
(7) Essential community providers.--With respect to the
basic plan offered by the entity, the entity shall include
within the plan network those essential community providers,
where available, that serve predominantly low-income,
medically-underserved individuals, such as health care
providers defined in section 340B(a)(4) of the Public Health
Service Act and providers described in section
1927(c)(1)(D)(i)(IV) of the Social Security Act (as amended by
section 221 of Public Law 111-8). The Commissioner shall
specify the extent to which and manner in which the previous
sentence shall apply in the case of a basic plan with respect
to which the Commissioner determines provides substantially all
benefits through a health maintenance organization, as defined
in section 2791(b)(3) of the Public Health Service Act. This
paragraph shall not be construed to require a basic plan to
contract with a provider if such provider refuses to accept the
generally applicable payment rates of such plan.
(8) Culturally and linguistically appropriate services and
communications.--The entity shall provide for culturally and
linguistically appropriate communication and health services.
(9) Special rules with respect to indian enrollees and
indian health care providers.--
(A) Choice of providers.--The entity shall--
(i) demonstrate to the satisfaction of the
Commissioner that it has contracted with a
sufficient number of Indian health care
providers to ensure timely access to covered
services furnished by such providers to
individual Indians through the entity's
Exchange-participating health benefits plan;
and
(ii) agree to pay Indian health care
providers, whether such providers are
participating or nonparticipating providers
with respect to the entity, for covered
services provided to those enrollees who are
eligible to receive services from such
providers at a rate that is not less than the
level and amount of payment which the entity
would make for the services of a participating
provider which is not an Indian health care
provider.
(B) Special rule relating to indian health care
providers.--Provision of services by an Indian health
care provider exclusively to Indians and their
dependents shall not constitute discrimination under
this Act.
(10) Program integrity standards.--The entity shall
establish and operate a program to protect and promote the
integrity of Exchange-participating health benefits plans it
offers, in accordance with standards and functions established
by the Commissioner.
(11) Additional requirements.--The entity shall comply with
other applicable requirements of this title, as specified by
the Commissioner, which shall include standards regarding
billing and collection practices for premiums and related grace
periods and which may include standards to ensure that the
entity does not use coercive practices to force providers not
to contract with other entities offering coverage through the
Health Insurance Exchange.
(c) Contracts.--
(1) Bid application.--To be eligible to enter into a
contract under this section, a QHBP offering entity shall
submit to the Commissioner a bid at such time, in such manner,
and containing such information as the Commissioner may
require.
(2) Term.--Each contract with a QHBP offering entity under
this section shall be for a term of not less than one year, but
may be made automatically renewable from term to term in the
absence of notice of termination by either party.
(3) Enforcement of network adequacy.--In the case of a
health benefits plan of a QHBP offering entity that uses a
provider network, the contract under this section with the
entity shall provide that if--
(A) the Commissioner determines that such provider
network does not meet such standards as the
Commissioner shall establish under section 215; and
(B) an individual enrolled in such plan receives an
item or service from a provider that is not within such
network;
then any cost-sharing for such item or service shall be equal
to the amount of such cost-sharing that would be imposed if
such item or service was furnished by a provider within such
network.
(4) Oversight and enforcement responsibilities.--The
Commissioner shall establish processes, in coordination with
State insurance regulators, to oversee, monitor, and enforce
applicable requirements of this title with respect to QHBP
offering entities offering Exchange-participating health
benefits plans, including the marketing of such plans. Such
processes shall include the following:
(A) Grievance and complaint mechanisms.--The
Commissioner shall establish, in coordination with
State insurance regulators, a process under which
Exchange-eligible individuals and employers may file
complaints concerning violations of such standards.
(B) Enforcement.--In carrying out authorities under
this division relating to the Health Insurance
Exchange, the Commissioner may impose one or more of
the intermediate sanctions described in section 242(d).
(C) Termination.--
(i) In general.--The Commissioner may
terminate a contract with a QHBP offering
entity under this section for the offering of
an Exchange-participating health benefits plan
if such entity fails to comply with the
applicable requirements of this title. Any
determination by the Commissioner to terminate
a contract shall be made in accordance with
formal investigation and compliance procedures
established by the Commissioner under which--
(I) the Commissioner provides the
entity with the reasonable opportunity
to develop and implement a corrective
action plan to correct the deficiencies
that were the basis of the
Commissioner's determination; and
(II) the Commissioner provides the
entity with reasonable notice and
opportunity for hearing (including the
right to appeal an initial decision)
before terminating the contract.
(ii) Exception for imminent and serious
risk to health.--Clause (i) shall not apply if
the Commissioner determines that a delay in
termination, resulting from compliance with the
procedures specified in such clause prior to
termination, would pose an imminent and serious
risk to the health of individuals enrolled
under the qualified health benefits plan of the
QHBP offering entity.
(D) Construction.--Nothing in this subsection shall
be construed as preventing the application of other
sanctions under subtitle E of title II with respect to
an entity for a violation of such a requirement.
(5) Special rule related to cost-sharing and indian health
care providers.--The contract under this section with a QHBP
offering entity for a health benefits plan shall provide that
if an individual who is an Indian is enrolled in such a plan
and such individual receives a covered item or service from an
Indian health care provider (regardless of whether such
provider is in the plan's provider network), the cost-sharing
for such item or service shall be equal to the amount of cost-
sharing that would be imposed if such item or service--
(A) had been furnished by another provider in the
plan's provider network; or
(B) in the case that the plan has no such network,
was furnished by a non-Indian provider.
(6) National plan.--Nothing in this section shall be
construed as preventing the Commissioner from entering into a
contract under this subsection with a QHBP offering entity for
the offering of a health benefits plan with the same benefits
in every State so long as such entity is licensed to offer such
plan in each State and the benefits meet the applicable
requirements in each such State.
(d) No Discrimination on the Basis of Provision of Abortion.--No
Exchange participating health benefits plan may discriminate against
any individual health care provider or health care facility because of
its unwillingness to provide, pay for, provide coverage of, or refer
for abortions.
SEC. 305. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND
EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.
(a) In General.--
(1) Outreach.--The Commissioner shall conduct outreach
activities consistent with subsection (c), including through
use of appropriate entities as described in paragraph (3) of
such subsection, to inform and educate individuals and
employers about the Health Insurance Exchange and Exchange-
participating health benefits plan options. Such outreach shall
include outreach specific to vulnerable populations, such as
children, individuals with disabilities, individuals with
mental illness, and individuals with other cognitive
impairments.
(2) Eligibility.--The Commissioner shall make timely
determinations of whether individuals and employers are
Exchange-eligible individuals and employers (as defined in
section 302).
(3) Enrollment.--The Commissioner shall establish and carry
out an enrollment process for Exchange-eligible individuals and
employers, including at community locations, in accordance with
subsection (b).
(b) Enrollment Process.--
(1) In general.--The Commissioner shall establish a process
consistent with this title for enrollments in Exchange-
participating health benefits plans. Such process shall provide
for enrollment through means such as the mail, by telephone,
electronically, and in person.
(2) Enrollment periods.--
(A) Open enrollment period.--The Commissioner shall
establish an annual open enrollment period during which
an Exchange-eligible individual or employer may elect
to enroll in an Exchange-participating health benefits
plan for the following plan year and an enrollment
period for affordability credits under subtitle C. Such
periods shall be during September through November of
each year, or such other time that would maximize
timeliness of income verification for purposes of such
subtitle. The open enrollment period shall not be less
than 30 days.
(B) Special enrollment.--The Commissioner shall
also provide for special enrollment periods to take
into account special circumstances of individuals and
employers, such as an individual who--
(i) loses acceptable coverage;
(ii) experiences a change in marital or
other dependent status;
(iii) moves outside the service area of the
Exchange-participating health benefits plan in
which the individual is enrolled; or
(iv) experiences a significant change in
income.
(C) Enrollment information.--The Commissioner shall
provide for the broad dissemination of information to
prospective enrollees on the enrollment process,
including before each open enrollment period. In
carrying out the previous sentence, the Commissioner
may work with other appropriate entities to facilitate
such provision of information.
(3) Automatic enrollment for non-medicaid eligible
individuals.--
(A) In general.--The Commissioner shall provide for
a process under which individuals who are Exchange-
eligible individuals described in subparagraph (B) are
automatically enrolled under an appropriate Exchange-
participating health benefits plan. Such process may
involve a random assignment or some other form of
assignment that takes into account the health care
providers used by the individual involved or such other
relevant factors as the Commissioner may specify.
(B) Subsidized individuals described.--An
individual described in this subparagraph is an
Exchange-eligible individual who is either of the
following:
(i) Affordability credit eligible
individuals.--The individual--
(I) has applied for, and been
determined eligible for, affordability
credits under subtitle C;
(II) has not opted out from
receiving such affordability credit;
and
(III) does not otherwise enroll in
another Exchange-participating health
benefits plan.
(ii) Individuals enrolled in a terminated
plan.--The individual who is enrolled in an
Exchange-participating health benefits plan
that is terminated (during or at the end of a
plan year) and who does not otherwise enroll in
another Exchange-participating health benefits
plan.
(4) Direct payment of premiums to plans.--Under the
enrollment process, individuals enrolled in an Exchange-
participating health benefits plan shall pay such plans
directly, and not through the Commissioner or the Health
Insurance Exchange.
(c) Coverage Information and Assistance.--
(1) Coverage information.--The Commissioner shall provide
for the broad dissemination of information on Exchange-
participating health benefits plans offered under this title.
Such information shall be provided in a comparative manner, and
shall include information on benefits, premiums, cost-sharing,
quality, provider networks, and consumer satisfaction.
(2) Consumer assistance with choice.--To provide assistance
to Exchange-eligible individuals and employers, the
Commissioner shall--
(A) provide for the operation of a toll-free
telephone hotline to respond to requests for assistance
and maintain an Internet Web site through which
individuals may obtain information on coverage under
Exchange-participating health benefits plans and file
complaints;
(B) develop and disseminate information to
Exchange-eligible enrollees on their rights and
responsibilities;
(C) assist Exchange-eligible individuals in
selecting Exchange-participating health benefits plans
and obtaining benefits through such plans; and
(D) ensure that the Internet Web site described in
subparagraph (A) and the information described in
subparagraph (B) is developed using plain language (as
defined in section 233(a)(2)).
(3) Use of other entities.--In carrying out this
subsection, the Commissioner may work with other appropriate
entities to facilitate the dissemination of information under
this subsection and to provide assistance as described in
paragraph (2).
(d) Coverage for Certain Newborns Under Medicaid.--
(1) In general.--In the case of a child born in the United
States who at the time of birth is not otherwise covered under
acceptable coverage, for the period of time beginning on the
date of birth and ending on the date the child otherwise is
covered under acceptable coverage (or, if earlier, the end of
the month in which the 60-day period, beginning on the date of
birth, ends), the child shall be deemed--
(A) to be a Medicaid eligible individual for
purposes of this division and Medicaid; and
(B) to be automatically enrolled in Medicaid as a
traditional Medicaid eligible individual (as defined in
section 1943(c) of the Social Security Act).
(2) Extended treatment as medicaid eligible individual.--In
the case of a child described in paragraph (1) who at the end
of the period referred to in such paragraph is not otherwise
covered under acceptable coverage, the child shall be deemed
(until such time as the child obtains such coverage or the
State otherwise makes a determination of the child's
eligibility for medical assistance under its Medicaid plan
pursuant to section 1943(b)(1) of the Social Security Act) to
be a Medicaid eligible individual described in section
1902(l)(1)(B) of such Act.
(e) Medicaid Coverage for Medicaid Eligible Individuals.--
(1) Medicaid enrollment obligation.--An individual may
apply, in the manner described in section 341(b)(1), for a
determination of whether the individual is a Medicaid-eligible
individual. If the individual is determined to be so eligible,
the Commissioner, through the Medicaid memorandum of
understanding under paragraph (2), shall provide for the
enrollment of the individual under the State Medicaid plan in
accordance with such memorandum of understanding. In the case
of such an enrollment, the State shall provide for the same
periodic redetermination of eligibility under Medicaid as would
otherwise apply if the individual had directly applied for
medical assistance to the State Medicaid agency.
(2) Coordinated enrollment with state through memorandum of
understanding.--The Commissioner, in consultation with the
Secretary of Health and Human Services, shall enter into a
memorandum of understanding with each State with respect to
coordinating enrollment of individuals in Exchange-
participating health benefits plans and under the State's
Medicaid program consistent with this section and to otherwise
coordinate the implementation of the provisions of this
division with respect to the Medicaid program. Such memorandum
shall permit the exchange of information consistent with the
limitations described in section 1902(a)(7) of the Social
Security Act. Nothing in this section shall be construed as
permitting such memorandum to modify or vitiate any requirement
of a State Medicaid plan.
(f) Effective Culturally and Linguistically Appropriate
Communication.--In carrying out this section, the Commissioner shall
establish effective methods for communicating in plain language and a
culturally and linguistically appropriate manner.
(g) Role for Enrollment Agents and Brokers.--Nothing in this
division shall be construed to affect the role of enrollment agents and
brokers under State law, including with regard to the enrollment of
individuals and employers in qualified health benefits plans including
the public health insurance option.
(h) Assistance for Small Employers.--
(1) In general.--The Commissioner, in consultation with the
Small Business Administration, shall establish and carry out a
program to provide to small employers counseling and technical
assistance with respect to the provision of health insurance to
employees of such employers through the Health Insurance
Exchange.
(2) Duties.--The program established under paragraph (1)
shall include the following services:
(A) Educational activities to increase awareness of
the Health Insurance Exchange and available small
employer health plan options.
(B) Distribution of information to small employers
with respect to the enrollment and selection process
for health plans available under the Health Insurance
Exchange, including standardized comparative
information on the health plans available under the
Health Insurance Exchange.
(C) Distribution of information to small employers
with respect to available affordability credits or
other financial assistance.
(D) Referrals to appropriate entities of complaints
and questions relating to the Health Insurance
Exchange.
(E) Enrollment and plan selection assistance for
employers with respect to the Health Insurance
Exchange.
(F) Responses to questions relating to the Health
Insurance Exchange and the program established under
paragraph (1).
(3) Authority to provide services directly or by
contract.--The Commissioner may provide services under
paragraph (2) directly or by contract with nonprofit entities
that the Commissioner determines capable of carrying out such
services.
(4) Small employer defined.--In this subsection, the term
``small employer'' means an employer with less than 100
employees.
(i) Participation of Small Employer Benefit Arrangements.--
(1) In general.--The Commissioner may enter into contracts
with small employer benefit arrangements to provide consumer
information, outreach, and assistance in the enrollment of
small employers (and their employees) who are members of such
an arrangement under Exchange participating health benefits
plans.
(2) Small employer benefit arrangement defined.--In this
subsection, the term ``small employer benefit arrangement''
means a not-for-profit agricultural or other cooperative that--
(A) consists solely of its members and is operated
for the primary purpose of providing affordable
employee benefits to its members;
(B) only has as members small employers in the same
industry or line of business;
(C) has no member that has more than a 5 percent
voting interest in the cooperative; and
(D) is governed by a board of directors elected by
its members.
SEC. 306. OTHER FUNCTIONS.
(a) Coordination of Affordability Credits.--The Commissioner shall
coordinate the distribution of affordability premium and cost-sharing
credits under subtitle C to QHBP offering entities offering Exchange-
participating health benefits plans.
(b) Coordination of Risk Pooling.--The Commissioner shall establish
a mechanism whereby there is an adjustment made of the premium amounts
payable among QHBP offering entities offering Exchange-participating
health benefits plans of premiums collected for such plans that takes
into account (in a manner specified by the Commissioner) the
differences in the risk characteristics of individuals and employees
enrolled under the different Exchange-participating health benefits
plans offered by such entities so as to minimize the impact of adverse
selection of enrollees among the plans offered by such entities. For
purposes of the previous sentence, the Commissioner may utilize data
regarding enrollee demographics, inpatient and outpatient diagnoses (in
a similar manner as such data are used under parts C and D of title
XVIII of the Social Security Act), and such other information as the
Secretary determines may be necessary, such as the actual medical costs
of enrollees during the previous year.
SEC. 307. HEALTH INSURANCE EXCHANGE TRUST FUND.
(a) Establishment of Health Insurance Exchange Trust Fund.--There
is created within the Treasury of the United States a trust fund to be
known as the ``Health Insurance Exchange Trust Fund'' (in this section
referred to as the ``Trust Fund''), consisting of such amounts as may
be appropriated or credited to the Trust Fund under this section or any
other provision of law.
(b) Payments From Trust Fund.--The Commissioner shall pay from time
to time from the Trust Fund such amounts as the Commissioner determines
are necessary to make payments to operate the Health Insurance
Exchange, including payments under subtitle C (relating to
affordability credits).
(c) Transfers to Trust Fund.--
(1) Dedicated payments.--There are hereby appropriated to
the Trust Fund amounts equivalent to the following:
(A) Taxes on individuals not obtaining acceptable
coverage.--The amounts received in the Treasury under
section 59B of the Internal Revenue Code of 1986
(relating to requirement of health insurance coverage
for individuals).
(B) Employment taxes on employers not providing
acceptable coverage.--The amounts received in the
Treasury under sections 3111(c) and 3221(c) of the
Internal Revenue Code of 1986 (relating to employers
electing to not provide health benefits).
(C) Excise tax on failures to meet certain health
coverage requirements.--The amounts received in the
Treasury under section 4980H(b) (relating to excise tax
with respect to failure to meet health coverage
participation requirements).
(2) Appropriations to cover government contributions.--
There are hereby appropriated, out of any moneys in the
Treasury not otherwise appropriated, to the Trust Fund, an
amount equivalent to the amount of payments made from the Trust
Fund under subsection (b) plus such amounts as are necessary
reduced by the amounts deposited under paragraph (1).
(d) Application of Certain Rules.--Rules similar to the rules of
subchapter B of chapter 98 of the Internal Revenue Code of 1986 shall
apply with respect to the Trust Fund.
SEC. 308. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.
(a) In General.--If--
(1) a State (or group of States, subject to the approval of
the Commissioner) applies to the Commissioner for approval of a
State-based Health Insurance Exchange to operate in the State
(or group of States); and
(2) the Commissioner approves such State-based Health
Insurance Exchange,
then, subject to subsections (c) and (d), the State-based Health
Insurance Exchange shall operate, instead of the Health Insurance
Exchange, with respect to such State (or group of States). The
Commissioner shall approve a State-based Health Insurance Exchange if
it meets the requirements for approval under subsection (b).
(b) Requirements for Approval.--
(1) In general.--The Commissioner may not approve a State-
based Health Insurance Exchange under this section unless the
following requirements are met:
(A) The State-based Health Insurance Exchange must
demonstrate the capacity to and provide assurances
satisfactory to the Commissioner that the State-based
Health Insurance Exchange will carry out the functions
specified for the Health Insurance Exchange in the
State (or States) involved, including--
(i) negotiating and contracting with QHBP
offering entities for the offering of Exchange-
participating health benefits plans, which
satisfy the standards and requirements of this
title and title II;
(ii) enrolling Exchange-eligible
individuals and employers in such State in such
plans;
(iii) the establishment of sufficient local
offices to meet the needs of Exchange-eligible
individuals and employers;
(iv) administering affordability credits
under subtitle B using the same methodologies
(and at least the same income verification
methods) as would otherwise apply under such
subtitle and at a cost to the Federal
Government which does exceed the cost to the
Federal Government if this section did not
apply; and
(v) enforcement activities consistent with
Federal requirements.
(B) There is no more than one Health Insurance
Exchange operating with respect to any one State.
(C) The State provides assurances satisfactory to
the Commissioner that approval of such an Exchange will
not result in any net increase in expenditures to the
Federal Government.
(D) The State provides for reporting of such
information as the Commissioner determines and
assurances satisfactory to the Commissioner that it
will vigorously enforce violations of applicable
requirements.
(E) Such other requirements as the Commissioner may
specify.
(2) Presumption for certain state-operated exchanges.--
(A) In general.--In the case of a State operating
an Exchange prior to January 1, 2010, that seeks to
operate the State-based Health Insurance Exchange under
this section, the Commissioner shall presume that such
Exchange meets the standards under this section unless
the Commissioner determines, after completion of the
process established under subparagraph (B), that the
Exchange does not comply with such standards.
(B) Process.--The Commissioner shall establish a
process to work with a State described in subparagraph
(A) to provide assistance necessary to assure that the
State's Exchange comes into compliance with the
standards for approval under this section.
(c) Ceasing Operation.--
(1) In general.--A State-based Health Insurance Exchange
may, at the option of each State involved, and only after
providing timely and reasonable notice to the Commissioner,
cease operation as such an Exchange, in which case the Health
Insurance Exchange shall operate, instead of such State-based
Health Insurance Exchange, with respect to such State (or
States).
(2) Termination; health insurance exchange resumption of
functions.--The Commissioner may terminate the approval (for
some or all functions) of a State-based Health Insurance
Exchange under this section if the Commissioner determines that
such Exchange no longer meets the requirements of subsection
(b) or is no longer capable of carrying out such functions in
accordance with the requirements of this subtitle. In lieu of
terminating such approval, the Commissioner may temporarily
assume some or all functions of the State-based Health
Insurance Exchange until such time as the Commissioner
determines the State-based Health Insurance Exchange meets such
requirements of subsection (b) and is capable of carrying out
such functions in accordance with the requirements of this
subtitle.
(3) Effectiveness.--The ceasing or termination of a State-
based Health Insurance Exchange under this subsection shall be
effective in such time and manner as the Commissioner shall
specify.
(d) Retention of Authority.--
(1) Authority retained.--Enforcement authorities of the
Commissioner shall be retained by the Commissioner.
(2) Discretion to retain additional authority.--The
Commissioner may specify functions of the Health Insurance
Exchange that--
(A) may not be performed by a State-based Health
Insurance Exchange under this section; or
(B) may be performed by the Commissioner and by
such a State-based Health Insurance Exchange.
(e) References.--In the case of a State-based Health Insurance
Exchange, except as the Commissioner may otherwise specify under
subsection (d), any references in this subtitle to the Health Insurance
Exchange or to the Commissioner in the area in which the State-based
Health Insurance Exchange operates shall be deemed a reference to the
State-based Health Insurance Exchange and the head of such Exchange,
respectively.
(f) Funding.--In the case of a State-based Health Insurance
Exchange, there shall be assistance provided for the operation of such
Exchange in the form of a matching grant with a State share of
expenditures required.
SEC. 309. INTERSTATE HEALTH INSURANCE COMPACTS.
(a) In General.--Effective January 1, 2015, 2 or more States may
form Health Care Choice Compacts (in this section referred to as
``compacts'') to facilitate the purchase of individual health insurance
coverage across State lines.
(b) Model Guidelines.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall consult with
the National Association of Insurance Commissioners (in this section
referred to as ``NAIC'') to develop not later than January 1, 2014,
model guidelines for the creation of compacts. In developing such
guidelines, the Secretary shall consult with consumers, health
insurance issuers, and other interested parties. Such guidelines
shall--
(1) provide for the sale of health insurance coverage to
residents of all compacting States subject to the laws and
regulations of a primary State designated by the compacting
States;
(2) require health insurance issuers issuing health
insurance coverage in secondary States to maintain licensure in
every such State;
(3) preserve the authority of the State of an individual's
residence to enforce law relating to--
(A) market conduct;
(B) unfair trade practices;
(C) network adequacy;
(D) consumer protection standards;
(E) grievance and appeals;
(F) fair claims payment requirements;
(G) prompt payment of claims;
(H) rate review; and
(I) fraud.
(4) permit State insurance commissioners and other State
agencies in secondary States access to the records of a health
insurance issuer to the same extent as if the policy were
written in that State; and
(5) provide for clear and conspicuous disclosure to
consumers that the policy may not be subject to all the laws
and regulations of the State in which the purchaser resides.
(c) No Requirement to Compact.--Nothing in this section shall be
construed to require a State to join a compact.
(d) State Authority.--A State may not enter into a compact under
this subsection unless the State enacts a law after the date of
enactment of this Act that specifically authorizes the State to enter
into such compact.
(e) Consumer Protections.--If a State enters into a compact it must
retain responsibility for the consumer protections of its residents and
its residents retain the right to bring a claim in a State court in the
State in which the resident resides.
(f) Assistance to Compacting States.--
(1) In general.--Beginning January 1, 2015, the Secretary
shall make awards, from amounts appropriated under paragraph
(5), to States in the amount specified in paragraph (2) for the
uses described in paragraph (3).
(2) Amount specified.--
(A) In general.--For each fiscal year, the
Secretary shall determine the total amount that the
Secretary will make available for grants under this
subsection.
(B) State amount.--For each State that is awarded a
grant under paragraph (1), the amount of such grants
shall be based on a formula established by the
Secretary, not to exceed $1 million per State, under
which States shall receive an award in the amount that
is based on the following two components:
(i) A minimum amount for each State.
(ii) An additional amount based on
population of the State.
(3) Use of funds.--A State shall use amounts awarded under
this subsection for activities (including planning activities)
related regulating health insurance coverage sold in secondary
States.
(4) Renewability of grant.--The Secretary may renew a grant
award under paragraph (1) if the State receiving the grant
continues to be a member of a compact.
(5) Authorization of appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
this subsection in each of fiscal years 2015 through 2020.
SEC. 310. HEALTH INSURANCE COOPERATIVES.
(a) Establishment.--Not later than 6 months after the date of the
enactment of this Act, the Commissioner, in consultation with the
Secretary of the Treasury, shall establish a Consumer Operated and
Oriented Plan program (in this section referred to as the ``CO-OP
program'') under which the Commissioner may make grants and loans for
the establishment and initial operation of not-for-profit, member-run
health insurance cooperatives (in this section individually referred to
as a ``cooperative'') that provide insurance through the Health
Insurance Exchange or a State-based Health Insurance Exchange under
section 308. Nothing in this section shall be construed as requiring a
State to establish such a cooperative.
(b) Start-up and Solvency Grants and Loans.--
(1) In general.--Not later than 36 months after the date of
the enactment of this Act, the Commissioner, acting through the
CO-OP program, may make--
(A) loans (of such period and with such terms as
the Secretary may specify) to cooperatives to assist
such cooperatives with start-up costs; and
(B) grants to cooperatives to assist such
cooperatives in meeting State solvency requirements in
the States in which such cooperative offers or issues
insurance coverage.
(2) Conditions.--A grant or loan may not be awarded under
this subsection with respect to a cooperative unless the
following conditions are met:
(A) The cooperative is structured as a not-for-
profit, member organization under the law of each State
in which such cooperative offers, intends to offer, or
issues insurance coverage, with the membership of the
cooperative being made up entirely of beneficiaries of
the insurance coverage offered by such cooperative.
(B) The cooperative did not offer insurance on or
before July 16, 2009, and the cooperative is not an
affiliate or successor to an insurance company offering
insurance on or before such date.
(C) The governing documents of the cooperative
incorporate ethical and conflict of interest standards
designed to protect against insurance industry
involvement and interference in the governance of the
cooperative.
(D) The cooperative is not sponsored by a State
government.
(E) Substantially all of the activities of the
cooperative consist of the issuance of qualified health
benefits plans through the Health Insurance Exchange or
a State-based health insurance exchange.
(F) The cooperative is licensed to offer insurance
in each State in which it offers insurance.
(G) The governance of the cooperative must be
subject to a majority vote of its members.
(H) As provided in guidance issued by the Secretary
of Health and Human Services, the cooperative operates
with a strong consumer focus, including timeliness,
responsiveness, and accountability to members.
(I) Any profits made by the cooperative are used to
lower premiums, improve benefits, or to otherwise
improve the quality of health care delivered to
members.
(3) Priority.--The Commissioner, in making grants and loans
under this subsection, shall give priority to cooperatives
that--
(A) operate on a statewide basis;
(B) use an integrated delivery system; or
(C) have a significant level of financial support
from nongovernmental sources.
(4) Rules of construction.--Nothing in this section shall
be construed to prevent a cooperative established in one State
from integrating with a cooperative established in another
State the administration, issuance of coverage, or other
activities related to acting as a QHBP offering entity. Nothing
in this section shall be construed as preventing State
governments from taking actions to permit such integration.
(5) Amortization of grants and loans.--The Secretary shall
provide for the repayment of grants or loans provided under
this subsection to the Treasury in an amortized manner over a
10-year period.
(6) Repayment for violations of terms of program.--If a
cooperative violates the terms of the CO-OP program and fails
to correct the violation within a reasonable period of time, as
determined by the Commissioner, the cooperative shall repay the
total amount of any loan or grant received by such cooperative
under this section, plus interest (at a rate determined by the
Secretary).
(7) Authorization of appropriations.--There is authorized
to be appropriated $5,000,000,000 for the period of fiscal
years 2010 through 2014 to provide for grants and loans under
this subsection.
(c) Definitions.--For purposes of this section:
(1) State.--The term ``State'' means each of the 50 States
and the District of Columbia.
(2) Member.--The term ``member'', with respect to a
cooperative, means an individual who, after the cooperative
offers health insurance coverage, is enrolled in such coverage.
SEC. 311. RETENTION OF DOD AND VA AUTHORITY.
Nothing in this subtitle shall be construed as affecting any
authority under title 38, United States Code, or chapter 55 of title
10, United States Code.
Subtitle B--Public Health Insurance Option
SEC. 321. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE
OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN.
(a) Establishment.--For years beginning with Y1, the Secretary of
Health and Human Services (in this subtitle referred to as the
``Secretary'') shall provide for the offering of an Exchange-
participating health benefits plan (in this division referred to as the
``public health insurance option'') that ensures choice, competition,
and stability of affordable, high quality coverage throughout the
United States in accordance with this subtitle. In designing the
option, the Secretary's primary responsibility is to create a low-cost
plan without compromising quality or access to care.
(b) Offering as an Exchange-participating Health Benefits Plan.--
(1) Exclusive to the exchange.--The public health insurance
option shall only be made available through the Health
Insurance Exchange.
(2) Ensuring a level playing field.--Consistent with this
subtitle, the public health insurance option shall comply with
requirements that are applicable under this title to an
Exchange-participating health benefits plan, including
requirements related to benefits, benefit levels, provider
networks, notices, consumer protections, and cost-sharing.
(3) Provision of benefit levels.--The public health
insurance option--
(A) shall offer basic, enhanced, and premium plans;
and
(B) may offer premium-plus plans.
(c) Administrative Contracting.--The Secretary may enter into
contracts for the purpose of performing administrative functions
(including functions described in subsection (a)(4) of section 1874A of
the Social Security Act) with respect to the public health insurance
option in the same manner as the Secretary may enter into contracts
under subsection (a)(1) of such section. The Secretary has the same
authority with respect to the public health insurance option as the
Secretary has under subsections (a)(1) and (b) of section 1874A of the
Social Security Act with respect to title XVIII of such Act. Contracts
under this subsection shall not involve the transfer of insurance risk
to such entity.
(d) Ombudsman.--The Secretary shall establish an office of the
ombudsman for the public health insurance option which shall have
duties with respect to the public health insurance option similar to
the duties of the Medicare Beneficiary Ombudsman under section
1808(c)(2) of the Social Security Act.
(e) Data Collection.--The Secretary shall collect such data as may
be required to establish premiums and payment rates for the public
health insurance option and for other purposes under this subtitle,
including to improve quality and to reduce racial, ethnic, and other
disparities in health and health care. Nothing in this subtitle may be
construed as authorizing the Secretary (or any employee or contractor)
to create or maintain lists of non-medical personal property.
(f) Treatment of Public Health Insurance Option.--With respect to
the public health insurance option, the Secretary shall be treated as a
QHBP offering entity offering an Exchange-participating health benefits
plan.
(g) Access to Federal Courts.--The provisions of Medicare (and
related provisions of title II of the Social Security Act) relating to
access of Medicare beneficiaries to Federal courts for the enforcement
of rights under Medicare, including with respect to amounts in
controversy, shall apply to the public health insurance option and
individuals enrolled under such option under this title in the same
manner as such provisions apply to Medicare and Medicare beneficiaries.
SEC. 322. PREMIUMS AND FINANCING.
(a) Establishment of Premiums.--
(1) In general.--The Secretary shall establish
geographically adjusted premium rates for the public health
insurance option--
(A) in a manner that complies with the premium
rules established by the Commissioner under section 213
for Exchange-participating health benefits plans; and
(B) at a level sufficient to fully finance the
costs of--
(i) health benefits provided by the public
health insurance option; and
(ii) administrative costs related to
operating the public health insurance option.
(2) Contingency margin.--In establishing premium rates
under paragraph (1), the Secretary shall include an appropriate
amount for a contingency margin (which shall be not less than
90 days of estimated claims). Before setting such appropriate
amount for years starting with Y3, the Secretary shall solicit
a recommendation on such amount from the American Academy of
Actuaries.
(b) Account.--
(1) Establishment.--There is established in the Treasury of
the United States an Account for the receipts and disbursements
attributable to the operation of the public health insurance
option, including the start-up funding under paragraph (2).
Section 1854(g) of the Social Security Act shall apply to
receipts described in the previous sentence in the same manner
as such section applies to payments or premiums described in
such section.
(2) Start-up funding.--
(A) In general.--In order to provide for the
establishment of the public health insurance option,
there is hereby appropriated to the Secretary, out of
any funds in the Treasury not otherwise appropriated,
$2,000,000,000. In order to provide for initial claims
reserves before the collection of premiums, there are
hereby appropriated to the Secretary, out of any funds
in the Treasury not otherwise appropriated, such sums
as necessary to cover 90 days worth of claims reserves
based on projected enrollment.
(B) Amortization of start-up funding.--The
Secretary shall provide for the repayment of the
startup funding provided under subparagraph (A) to the
Treasury in an amortized manner over the 10-year period
beginning with Y1.
(C) Limitation on funding.--Nothing in this section
shall be construed as authorizing any additional
appropriations to the Account, other than such amounts
as are otherwise provided with respect to other
Exchange-participating health benefits plans.
(3) No bailouts.--In no case shall the public health
insurance option receive any Federal funds for purposes of
insolvency in any manner similar to the manner in which
entities receive Federal funding under the Troubled Assets
Relief Program of the Secretary of the Treasury.
SEC. 323. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) Negotiation of Payment Rates.--
(1) In general.--The Secretary shall negotiate payment for
the public health insurance option for health care providers
and items and services, including prescription drugs,
consistent with this section and section 324.
(2) Manner of negotiation.--The Secretary shall negotiate
such rates in a manner that results in payment rates that are
not lower, in the aggregate, than rates under title XVIII of
the Social Security Act, and not higher, in the aggregate, than
the average rates paid by other QHBP offering entities for
services and health care providers.
(3) Innovative payment methods.--Nothing in this subsection
shall be construed as preventing the use of innovative payment
methods such as those described in section 324 in connection
with the negotiation of payment rates under this subsection.
(4) Treatment of certain state waivers.--In the case of any
State operating a cost-containment waiver for health care
providers in accordance with section 1814(b)(3) of the Social
Security Act, the Secretary shall provide for payment to such
providers under the public health insurance option consistent
with the provisions and requirements of that waiver.
(b) Establishment of a Provider Network.--
(1) In general.--Health care providers (including
physicians and hospitals) participating in Medicare are
participating providers in the public health insurance option
unless they opt out in a process established by the Secretary
consistent with this subsection.
(2) Requirements for opt-out process.--Under the process
established under paragraph (1)--
(A) providers described in such paragraph shall be
provided at least a 1-year period prior to the first
day of Y1 to opt out of participating in the public
health insurance option;
(B) no provider shall be subject to a penalty for
not participating in the public health insurance
option;
(C) the Secretary shall include information on how
providers participating in Medicare who chose to opt
out of participating in the public health insurance
option may opt back in; and
(D) there shall be an annual enrollment period in
which providers may decide whether to participate in
the public health insurance option.
(3) Rulemaking.--Not later than 18 months before the first
day of Y1, the Secretary shall promulgate rules (pursuant to
notice and comment) for the process described in paragraph (1).
(c) Limitations on Review.--There shall be no administrative or
judicial review of a payment rate or methodology established under this
section or under section 324.
SEC. 324. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM.
(a) In General.--For plan years beginning with Y1, the Secretary
may utilize innovative payment mechanisms and policies to determine
payments for items and services under the public health insurance
option. The payment mechanisms and policies under this section may
include patient-centered medical home and other care management
payments, accountable care organizations, value-based purchasing,
bundling of services, differential payment rates, performance or
utilization based payments, partial capitation, and direct contracting
with providers.
(b) Requirements for Innovative Payments.--The Secretary shall
design and implement the payment mechanisms and policies under this
section in a manner that--
(1) seeks to--
(A) improve health outcomes;
(B) reduce health disparities (including racial,
ethnic, and other disparities);
(C) provide efficient and affordable care;
(D) address geographic variation in the provision
of health services; or
(E) prevent or manage chronic illness; and
(2) promotes care that is integrated, patient-centered,
quality, and efficient.
(c) Encouraging the Use of High Value Services.--To the extent
allowed by the benefit standards applied to all Exchange-participating
health benefits plans, the public health insurance option may modify
cost-sharing and payment rates to encourage the use of services that
promote health and value.
(d) Promotion of Delivery System Reform.--The Secretary shall
monitor and evaluate the progress of payment and delivery system
reforms under this Act and shall seek to implement such reforms subject
to the following:
(1) To the extent that the Secretary finds a payment and
delivery system reform successful in improving quality and
reducing costs, the Secretary shall implement such reform on as
large a geographic scale as practical and economical.
(2) The Secretary may delay the implementation of such a
reform in geographic areas in which such implementation would
place the public health insurance option at a competitive
disadvantage.
(3) The Secretary may prioritize implementation of such a
reform in high cost geographic areas or otherwise in order to
reduce total program costs or to promote high value care.
(e) Non-uniformity Permitted.--Nothing in this subtitle shall
prevent the Secretary from varying payments based on different payment
structure models (such as accountable care organizations and medical
homes) under the public health insurance option for different
geographic areas.
SEC. 325. PROVIDER PARTICIPATION.
(a) In General.--The Secretary shall establish conditions of
participation for health care providers under the public health
insurance option.
(b) Licensure or Certification.--
(1) In general.--Except as provided in paragraph (2), the
Secretary shall not allow a health care provider to participate
in the public health insurance option unless such provider is
appropriately licensed, certified, or otherwise permitted to
practice under State law.
(2) Special rule for ihs facilities and providers.--The
requirements under paragraph (1) shall not apply to--
(A) a facility that is operated by the Indian
Health Service;
(B) a facility operated by an Indian Tribe or
tribal organization under the Indian Self-Determination
Act (Public Law 93-638);
(C) a health care professional employed by the
Indian Health Service; or
(D) a health care professional--
(i) who is employed to provide health care
services in a facility operated by an Indian
Tribe or tribal organization under the Indian
Self-Determination Act; and
(ii) who is licensed or certified in any
State.
(c) Payment Terms for Providers.--
(1) Physicians.--The Secretary shall provide for the annual
participation of physicians under the public health insurance
option, for which payment may be made for services furnished
during the year, in one of 2 classes:
(A) Preferred physicians.--Those physicians who
agree to accept the payment under section 323 (without
regard to cost-sharing) as the payment in full.
(B) Participating, non-preferred physicians.--Those
physicians who agree not to impose charges (in relation
to the payment described in section 323 for such
physicians) that exceed the sum of the in-network cost-
sharing plus 15 percent of the total payment for each
item and service. The Secretary shall reduce the
payment described in section 323 for such physicians.
(2) Other providers.--The Secretary shall provide for the
participation (on an annual or other basis specified by the
Secretary) of health care providers (other than physicians)
under the public health insurance option under which payment
shall only be available if the provider agrees to accept the
payment under section 323 (without regard to cost-sharing) as
the payment in full.
(d) Exclusion of Certain Providers.--The Secretary shall exclude
from participation under the public health insurance option a health
care provider that is excluded from participation in a Federal health
care program (as defined in section 1128B(f) of the Social Security
Act).
SEC. 326. APPLICATION OF FRAUD AND ABUSE PROVISIONS.
Provisions of civil law identified by the Secretary by regulation,
in consultation with the Inspector General of the Department of Health
and Human Services, that impose sanctions with respect to waste, fraud,
and abuse under Medicare, such as sections 3729 through 3733 of title
31, United States Code (commonly known as the False Claims Act), shall
also apply to the public health insurance option.
SEC. 327. APPLICATION OF HIPAA INSURANCE REQUIREMENTS.
The requirements of sections 2701 through 2792 of the Public Health
Service Act shall apply to the public health insurance option in the
same manner as they apply to health insurance coverage offered by a
health insurance issuer in the individual market.
SEC. 328. APPLICATION OF HEALTH INFORMATION PRIVACY, SECURITY, AND
ELECTRONIC TRANSACTION REQUIREMENTS.
Part C of title XI of the Social Security Act, relating to
standards for protections against the wrongful disclosure of
individually identifiable health information, health information
security, and the electronic exchange of health care information, shall
apply to the public health insurance option in the same manner as such
part applies to other health plans (as defined in section 1171(5) of
such Act).
SEC. 329. ENROLLMENT IN PUBLIC HEALTH INSURANCE OPTION IS VOLUNTARY.
Nothing in this division shall be construed as requiring anyone to
enroll in the public health insurance option. Enrollment in such option
is voluntary.
SEC. 330. ENROLLMENT IN PUBLIC HEALTH INSURANCE OPTION BY MEMBERS OF
CONGRESS.
Notwithstanding any other provision of this Act, Members of
Congress may enroll in the public health insurance option.
SEC. 331. REIMBURSEMENT OF SECRETARY OF VETERANS AFFAIRS.
The Secretary of Health and Human Services shall seek to enter into
a memorandum of understanding with the Secretary of Veterans Affairs
regarding the recovery of costs related to non-service-connected care
or services provided by the Secretary of Veterans Affairs to an
individual covered under the public health insurance option in a manner
consistent with recovery of costs related to non-service-connected care
from private health insurance plans.
Subtitle C--Individual Affordability Credits
SEC. 341. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.
(a) In General.--Subject to the succeeding provisions of this
subtitle, in the case of an affordable credit eligible individual
enrolled in an Exchange-participating health benefits plan--
(1) the individual shall be eligible for, in accordance
with this subtitle, affordability credits consisting of--
(A) an affordability premium credit under section
343 to be applied against the premium for the Exchange-
participating health benefits plan in which the
individual is enrolled; and
(B) an affordability cost-sharing credit under
section 344 to be applied as a reduction of the cost-
sharing otherwise applicable to such plan; and
(2) the Commissioner shall pay the QHBP offering entity
that offers such plan from the Health Insurance Exchange Trust
Fund the aggregate amount of affordability credits for all
affordable credit eligible individuals enrolled in such plan.
(b) Application.--
(1) In general.--An Exchange eligible individual may apply
to the Commissioner through the Health Insurance Exchange or
through another entity under an arrangement made with the
Commissioner, in a form and manner specified by the
Commissioner. The Commissioner through the Health Insurance
Exchange or through another public entity under an arrangement
made with the Commissioner shall make a determination as to
eligibility of an individual for affordability credits under
this subtitle. The Commissioner shall establish a process
whereby, on the basis of information otherwise available,
individuals may be deemed to be affordable credit eligible
individuals. In carrying this subtitle, the Commissioner shall
establish effective methods that ensure that individuals with
limited English proficiency are able to apply for affordability
credits.
(2) Use of state medicaid agencies.--If the Commissioner
determines that a State Medicaid agency has the capacity to
make a determination of eligibility for affordability credits
under this subtitle and under the same standards as used by the
Commissioner, under the Medicaid memorandum of understanding
under section 305(e)(2)--
(A) the State Medicaid agency is authorized to
conduct such determinations for any Exchange-eligible
individual who requests such a determination; and
(B) the Commissioner shall reimburse the State
Medicaid agency for the costs of conducting such
determinations.
(3) Medicaid screen and enroll obligation.--In the case of
an application made under paragraph (1), there shall be a
determination of whether the individual is a Medicaid-eligible
individual. If the individual is determined to be so eligible,
the Commissioner, through the Medicaid memorandum of
understanding under section 305(e)(2), shall provide for the
enrollment of the individual under the State Medicaid plan in
accordance with such Medicaid memorandum of understanding. In
the case of such an enrollment, the State shall provide for the
same periodic redetermination of eligibility under Medicaid as
would otherwise apply if the individual had directly applied
for medical assistance to the State Medicaid agency.
(4) Application and verification of requirement of
citizenship or lawful presence in the united states.--
(A) Requirement.--No individual shall be an
affordable credit eligible individual (as defined in
section 342(a)(1)) unless the individual is a citizen
or national of the United States or is lawfully present
in a State in the United States (other than as a
nonimmigrant described in a subparagraph (excluding
subparagraphs (K), (T), (U), and (V)) of section
101(a)(15) of the Immigration and Nationality Act).
(B) Declaration of citizenship or lawful
immigration status.--No individual shall be an
affordable credit eligible individual unless there has
been a declaration made, in a form and manner specified
by the Health Choices Commissioner similar to the
manner required under section 1137(d)(1) of the Social
Security Act and under penalty of perjury, that the
individual--
(i) is a citizen or national of the United
States; or
(ii) is not such a citizen or national but
is lawfully present in a State in the United
States (other than as a nonimmigrant described
in a subparagraph (excluding subparagraphs (K),
(T), (U), and (V)) of section 101(a)(15) of the
Immigration and Nationality Act).
Such declaration shall be verified in accordance with
subparagraph (C) or (D), as the case may be.
(C) Verification process for citizens.--
(i) In general.--In the case of an
individual making the declaration described in
subparagraph (B)(i), subject to clause (ii),
section 1902(ee) of the Social Security Act
shall apply to such declaration in the same
manner as such section applies to a declaration
described in paragraph (1) of such section.
(ii) Special rules.--In applying section
1902(ee) of such Act under clause (i)--
(I) any reference in such section
to a State is deemed a reference to the
Commissioner (or other public entity
making the eligibility determination);
(II) any reference to medical
assistance or enrollment under a State
plan is deemed a reference to provision
of affordability credits under this
subtitle;
(III) a reference to a newly
enrolled individual under paragraph
(2)(A) of such section is deemed a
reference to an individual newly in
receipt of an affordability credit
under this subtitle;
(IV) approval by the Secretary
shall not be required in applying
paragraph (2)(B)(ii) of such section;
(V) paragraph (3) of such section
shall not apply; and
(VI) before the end of Y2, the
Health Choices Commissioner, in
consultation with the Commissioner of
Social Security, may extend the periods
specified in paragraph (1)(B)(ii) of
such section.
(D) Verification process for noncitizens.--
(i) In general.--In the case of an
individual making the declaration described in
subparagraph (B)(ii), subject to clause (ii),
the verification procedures of paragraphs (2)
through (5) of section 1137(d) of the Social
Security Act shall apply to such declaration in
the same manner as such procedures apply to a
declaration described in paragraph (1) of such
section.
(ii) Special rules.--In applying such
paragraphs of section 1137(d) of such Act under
clause (i)--
(I) any reference in such
paragraphs to a State is deemed a
reference to the Health Choices
Commissioner; and
(II) any reference to benefits
under a program is deemed a reference
to affordability credits under this
subtitle.
(iii) Application to state-based
exchanges.--In the case of the application of
the verification process under this
subparagraph to a State-based Health Insurance
Exchange approved under section 308, section
1137(e) of such Act shall apply to the Health
Choices Commissioner in relation to the State.
(E) Annual reports.--The Health Choices
Commissioner shall report to Congress annually on the
number of applicants for affordability credits under
this subtitle, their citizenship or immigration status,
and the disposition of their applications. Such report
shall be made publicly available and shall include
information on--
(i) the number of applicants whose
declaration of citizenship or immigration
status, name, or social security account number
was not consistent with records maintained by
the Commissioner of Social Security or the
Department of Homeland Security and, of such
applicants, the number who contested the
inconsistency and sought to document their
citizenship or immigration status, name, or
social security account number or to correct
the information maintained in such records and,
of those, the results of such contestations;
and
(ii) the administrative costs of conducting
the status verification under this paragraph.
(F) GAO report.--Not later than the end of Y2, the
Comptroller General of the United States shall submit
to the Committee on Ways and Means, the Committee on
Energy and Commerce, the Committee on Education and
Labor, and the Committee on the Judiciary of the House
of Representatives and the Committee on Finance, the
Committee on Health, Education, Labor, and Pensions,
and the Committee on the Judiciary of the Senate a
report examining the effectiveness of the citizenship
and immigration verification systems applied under this
paragraph. Such report shall include an analysis of the
following:
(i) The causes of erroneous determinations
under such systems.
(ii) The effectiveness of the processes
used in remedying such erroneous
determinations.
(iii) The impact of such systems on
individuals, health care providers, and Federal
and State agencies, including the effect of
erroneous determinations under such systems.
(iv) The effectiveness of such systems in
preventing ineligible individuals from
receiving for affordability credits.
(v) The characteristics of applicants
described in subparagraph (E)(i).
(G) Prohibition of database.--Nothing in this
paragraph or the amendments made by paragraph (6) shall
be construed as authorizing the Health Choices
Commissioner or the Commissioner of Social Security to
establish a database of information on citizenship or
immigration status.
(H) Initial funding.--
(i) In general.--Out of any funds in the
Treasury not otherwise appropriated, there is
appropriated to the Commissioner of Social
Security $30,000,000, to be available without
fiscal year limit to carry out this paragraph
and section 205(v) of the Social Security Act.
(ii) Funding limitation.--In no case shall
funds from the Social Security Administration's
Limitation on Administrative Expenses be used
to carry out activities related to this
paragraph or section 205(v) of the Social
Security Act.
(5) Agreement with social security commissioner.--
(A) In general.--The Health Choices Commissioner
shall enter into and maintain an agreement described in
section 205(v)(2) of the Social Security Act with the
Commissioner of Social Security.
(B) Funding.--The agreement entered into under
subparagraph (A) shall, for each fiscal year (beginning
with fiscal year 2013)--
(i) provide funds to the Commissioner of
Social Security for the full costs of the
responsibilities of the Commissioner of Social
Security under paragraph (4), including--
(I) acquiring, installing, and
maintaining technological equipment and
systems necessary for the fulfillment
of the responsibilities of the
Commissioner of Social Security under
paragraph (4), but only that portion of
such costs that are attributable to
such responsibilities; and
(II) responding to individuals who
contest with the Commissioner of Social
Security a reported inconsistency with
records maintained by the Commissioner
of Social Security or the Department of
Homeland Security relating to
citizenship or immigration status,
name, or social security account number
under paragraph (4);
(ii) based on an estimating methodology
agreed to by the Commissioner of Social
Security and the Health Choices Commissioner,
provide such funds, within 10 calendar days of
the beginning of the fiscal year for the first
quarter and in advance for all subsequent
quarters in that fiscal year; and
(iii) provide for an annual accounting and
reconciliation of the actual costs incurred and
the funds provided under the agreement.
(C) Review of accounting.--The annual accounting
and reconciliation conducted pursuant to subparagraph
(B)(iii) shall be reviewed by the Inspectors General of
the Social Security Administration and the Health
Choices Administration, including an analysis of
consistency with the requirements of paragraph (4).
(D) Contingency.--In any case in which agreement
with respect to the provisions required under
subparagraph (B) for any fiscal year has not been
reached as of the first day of such fiscal year, the
latest agreement with respect to such provisions shall
be deemed in effect on an interim basis for such fiscal
year until such time as an agreement relating to such
provisions is subsequently reached. In any case in
which an interim agreement applies for any fiscal year
under this subparagraph, the Commissioner of Social
Security shall, not later than the first day of such
fiscal year, notify the appropriate Committees of the
Congress of the failure to reach the agreement with
respect to such provisions for such fiscal year. Until
such time as the agreement with respect to such
provisions has been reached for such fiscal year, the
Commissioner of Social Security shall, not later than
the end of each 90-day period after October 1 of such
fiscal year, notify such Committees of the status of
negotiations between such Commissioner and the Health
Choices Commissioner in order to reach such an
agreement.
(E) Application to public entities administering
affordability credits.--If the Health Choices
Commissioner provides for the conduct of verifications
under paragraph (4) through a public entity, the Health
Choices Commissioner shall require the public entity to
enter into an agreement with the Commissioner of Social
Security which provides the same terms as the agreement
described in this paragraph (and section 205(v) of the
Social Security Act) between the Health Choices
Commissioner and the Commissioner of Social Security,
except that the Health Choices Commissioner shall be
responsible for providing funds for the Commissioner of
Social Security in accordance with subparagraphs (B)
through (D).
(6) Amendments to social security act.--
(A) Coordination of information between social
security administration and health choices
administration.--
(i) In general.--Section 205 of the Social
Security Act (42 U.S.C. 405) is amended by
adding at the end the following new subsection:
``Coordination of Information With Health Choices Administration
``(v)(1) The Health Choices Commissioner may collect and use the
names and social security account numbers of individuals as required to
provide for verification of citizenship under subsection (b)(4)(C) of
section 341 of the Affordable Health Care for America Act in connection
with determinations of eligibility for affordability credits under such
section.
``(2)(A) The Commissioner of Social Security shall enter into and
maintain an agreement with the Health Choices Commissioner for the
purpose of establishing, in compliance with the requirements of section
1902(ee) as applied pursuant to section 341(b)(4)(C) of the Affordable
Health Care for America Act, a program for verifying information
required to be collected by the Health Choices Commissioner under such
section 341(b)(4)(C).
``(B) The agreement entered into pursuant to subparagraph (A) shall
include such safeguards as are necessary to ensure the maintenance of
confidentiality of any information disclosed for purposes of verifying
information described in subparagraph (A) and to provide procedures for
permitting the Health Choices Commissioner to use the information for
purposes of maintaining the records of the Health Choices
Administration.
``(C) The agreement entered into pursuant to subparagraph (A) shall
provide that information provided by the Commissioner of Social
Security to the Health Choices Commissioner pursuant to the agreement
shall be provided at such time, at such place, and in such manner as
the Commissioner of Social Security determines appropriate.
``(D) Information provided by the Commissioner of Social Security
to the Health Choices Commissioner pursuant to an agreement entered
into pursuant to subparagraph (A) shall be considered as strictly
confidential and shall be used only for the purposes described in this
paragraph and for carrying out such agreement. Any officer or employee
or former officer or employee of the Health Choices Commissioner, or
any officer or employee or former officer or employee of a contractor
of the Health Choices Commissioner, who, without the written authority
of the Commissioner of Social Security, publishes or communicates any
information in such individual's possession by reason of such
employment or position as such an officer shall be guilty of a felony
and, upon conviction thereof, shall be fined or imprisoned, or both, as
described in section 208.
``(3) The agreement entered into under paragraph (2) shall provide
for funding to the Commissioner of Social Security consistent with
section 341(b)(5) of Affordable Health Care for America Act.
``(4) This subsection shall apply in the case of a public entity
that conducts verifications under section 341(b)(4) of the Affordable
Health Care for America Act and the obligations of this subsection
shall apply to such an entity in the same manner as such obligations
apply to the Health Choices Commissioner when such Commissioner is
conducting such verifications.''.
(ii) Conforming amendment.--Section
205(c)(2)(C) of such Act (42 U.S.C.
405(c)(2)(C)) is amended by adding at the end
the following new clause:
``(x) For purposes of the administration of the verification
procedures described in section 341(b)(4) of the Affordable Health Care
for America Act, the Health Choices Commissioner may collect and use
social security account numbers as provided for in section
205(v)(1).''.
(B) Improving the integrity of data and
effectiveness of save program.--Section 1137(d) of the
Social Security Act (42 U.S.C. 1320b-7(d)) is amended
by adding at the end the following new paragraphs:
``(6)(A) With respect to the use by any agency of the system
described in subsection (b) by programs specified in subsection (b) or
any other use of such system, the United States Citizenship and
Immigration Services and any other agency charged with the management
of the system shall establish appropriate safeguards necessary to
protect and improve the integrity and accuracy of data relating to
individuals by--
``(i) establishing a process through which such individuals
are provided access to, and the ability to amend, correct, and
update, their own personally identifiable information contained
within the system;
``(ii) providing a written response, without undue delay,
to any individual who has made such a request to amend,
correct, or update such individual's own personally
identifiable information contained within the system; and
``(iii) developing a written notice for user agencies to
provide to individuals who are denied a benefit due to a
determination of ineligibility based on a final verification
determination under the system.
``(B) The notice described in subparagraph (A)(ii) shall include--
``(i) information about the reason for such notice;
``(ii) a description of the right of the recipient of the
notice under subparagraph (A)(i) to contest such notice;
``(iii) a description of the right of the recipient under
subparagraph (A)(i) to access and attempt to amend, correct,
and update the recipient's own personally identifiable
information contained within records of the system described in
paragraph (3); and
``(iv) instructions on how to contest such notice and
attempt to correct records of such system relating to the
recipient, including contact information for relevant
agencies.''.
(C) Streamlining administration of verification
process for united states citizens.--Section
1902(ee)(2) of the Social Security Act (42 U.S.C.
1396a(ee)(2)) is amended by adding at the end the
following:
``(D) In carrying out the verification procedures under this
subsection with respect to a State, if the Commissioner of Social
Security determines that the records maintained by such Commissioner
are not consistent with an individual's allegation of United States
citizenship, pursuant to procedures which shall be established by the
State in coordination with the Commissioner of Social Security, the
Secretary of Homeland Security, and the Secretary of Health and Human
Services--
``(i) the Commissioner of Social Security shall inform the
State of the inconsistency;
``(ii) upon being so informed of the inconsistency, the
State shall submit the information on the individual to the
Secretary of Homeland Security for a determination of whether
the records of the Department of Homeland Security indicate
that the individual is a citizen;
``(iii) upon making such determination, the Department of
Homeland Security shall inform the State of such determination;
and
``(iv) information provided by the Commissioner of Social
Security shall be considered as strictly confidential and shall
only be used by the State and the Secretary of Homeland
Security for the purposes of such verification procedures.
``(E) Verification of status eligibility pursuant to the procedures
established under this subsection shall be deemed a verification of
status eligibility for purposes of this title, title XXI, and
affordability credits under section 341(b)(4) of the Affordable Health
Care for America Act, regardless of the program in which the individual
is applying for benefits.''.
(c) Use of Affordability Credits.--
(1) In general.--In Y1 and Y2 an affordable credit eligible
individual may use an affordability credit only with respect to
a basic plan.
(2) Flexibility in plan enrollment authorized.--Beginning
with Y3, the Commissioner shall establish a process to allow an
affordability premium credit under section 343, but not the
affordability cost-sharing credit under section 344, to be used
for enrollees in enhanced or premium plans. In the case of an
affordable credit eligible individual who enrolls in an
enhanced or premium plan, the individual shall be responsible
for any difference between the premium for such plan and the
affordability credit amount otherwise applicable if the
individual had enrolled in a basic plan.
(d) Access to Data.--In carrying out this subtitle, the
Commissioner shall request from the Secretary of the Treasury
consistent with section 6103 of the Internal Revenue Code of 1986 such
information as may be required to carry out this subtitle.
(e) No Cash Rebates.--In no case shall an affordable credit
eligible individual receive any cash payment as a result of the
application of this subtitle.
SEC. 342. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.
(a) Definition.--
(1) In general.--For purposes of this division, the term
``affordable credit eligible individual'' means, subject to
subsection (b) and section 346, an individual who is lawfully
present in a State in the United States (other than as a
nonimmigrant described in a subparagraph (excluding
subparagraphs (K), (T), (U), and (V)) of section 101(a)(15) of
the Immigration and Nationality Act)--
(A) who is enrolled under an Exchange-participating
health benefits plan and is not enrolled under such
plan as an employee (or dependent of an employee)
through an employer qualified health benefits plan that
meets the requirements of section 412;
(B) with modified adjusted gross income below 400
percent of the Federal poverty level for a family of
the size involved;
(C) who is not a Medicaid eligible individual,
other than an individual during a transition period
under section 302(d)(3)(B)(ii); and
(D) subject to paragraph (3), who is not enrolled
in acceptable coverage (other than an Exchange-
participating health benefits plan).
(2) Treatment of family.--Except as the Commissioner may
otherwise provide, members of the same family who are
affordable credit eligible individuals shall be treated as a
single affordable credit individual eligible for the applicable
credit for such a family under this subtitle.
(3) Special rule for indians.--Subparagraph (D) of
paragraph (1) shall not apply to an individual who has coverage
that is treated as acceptable coverage for purposes of section
59B(d)(2) of the Internal Revenue Code of 1986 but is not
treated as acceptable coverage for purposes of this division.
(b) Limitations on Employee and Dependent Disqualification.--
(1) In general.--Subject to paragraph (2), the term
``affordable credit eligible individual'' does not include a
full-time employee of an employer if the employer offers the
employee coverage (for the employee and dependents) as a full-
time employee under a group health plan if the coverage and
employer contribution under the plan meet the requirements of
section 412.
(2) Exceptions.--
(A) For certain family circumstances.--The
Commissioner shall establish such exceptions and
special rules in the case described in paragraph (1) as
may be appropriate in the case of a divorced or
separated individual or such a dependent of an employee
who would otherwise be an affordable credit eligible
individual.
(B) For unaffordable employer coverage.--Beginning
in Y2, in the case of full-time employees for which the
cost of the employee premium for coverage under a group
health plan would exceed 12 percent of current modified
adjusted gross income (determined by the Commissioner
on the basis of verifiable documentation), paragraph
(1) shall not apply.
(c) Income Defined.--
(1) In general.--In this title, the term ``income'' means
modified adjusted gross income (as defined in section 59B of
the Internal Revenue Code of 1986).
(2) Study of income disregards.--The Commissioner shall
conduct a study that examines the application of income
disregards for purposes of this subtitle. Not later than the
first day of Y2, the Commissioner shall submit to Congress a
report on such study and shall include such recommendations as
the Commissioner determines appropriate.
(d) Clarification of Treatment of Affordability Credits.--
Affordability credits under this subtitle shall not be treated, for
purposes of title IV of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, to be a benefit provided under
section 403 of such title.
SEC. 343. AFFORDABILITY PREMIUM CREDIT.
(a) In General.--The affordability premium credit under this
section for an affordable credit eligible individual enrolled in an
Exchange-participating health benefits plan is in an amount equal to
the amount (if any) by which the reference premium amount specified in
subsection (c), exceeds the affordable premium amount specified in
subsection (b) for the individual, except that in no case shall the
affordable premium credit exceed the premium for the plan.
(b) Affordable Premium Amount.--
(1) In general.--The affordable premium amount specified in
this subsection for an individual for the annual premium in a
plan year shall be equal to the product of--
(A) the premium percentage limit specified in
paragraph (2) for the individual based upon the
individual's modified adjusted gross income for the
plan year; and
(B) the individual's modified adjusted gross income
for such plan year.
(2) Premium percentage limits based on table.--The
Commissioner shall establish premium percentage limits so that
for individuals whose modified adjusted gross income is within
an income tier specified in the table in subsection (d) such
percentage limits shall increase, on a sliding scale in a
linear manner, from the initial premium percentage to the final
premium percentage specified in such table for such income
tier.
(c) Reference Premium Amount.--The reference premium amount
specified in this subsection for a plan year for an individual in a
premium rating area is equal to the average premium for the 3 basic
plans in the area for the plan year with the lowest premium levels. In
computing such amount the Commissioner may exclude plans with extremely
limited enrollments.
(d) Table of Premium Percentage Limits, Actuarial Value
Percentages, and Out-of-pocket Limits for Y1 Based on Income Tier.--
(1) In general.--For purposes of this subtitle, subject to
paragraph (3) and section 346, the table specified in this
subsection is as follows:
In the case of modified
adjusted gross income The out-of-
(expressed as a percent of The initial premium The final premium The actuarial value pocket
FPL) within the following percentage is-- percentage is-- percentage is-- limit for
income tier: Y1 is--
133% through 150% 1.5% 3.0% 97% $500
150% through 200% 3.0% 5.5% 93% $1,000
200% through 250% 5.5% 8.0% 85% $2,000
250% through 300% 8.0% 10.0% 78% $4,000
300% through 350% 10.0% 11.0% 72% $4,500
350% through 400% 11.0% 12.0% 70% $5,000
(2) Special rules.--For purposes of applying the table
under paragraph (1):
(A) For lowest level of income.--In the case of an
individual with income that does not exceed 133 percent
of FPL, the individual shall be considered to have
income that is 133 percent of FPL.
(B) Application of higher actuarial value
percentage at tier transition points.--If two actuarial
value percentages may be determined with respect to an
individual, the actuarial value percentage shall be the
higher of such percentages.
(3) Indexing.--For years after Y1, the Commissioner shall
adjust the initial and final premium percentages to maintain
the ratio of governmental to enrollee shares of premiums over
time, for each income tier identified in the table in paragraph
(1).
SEC. 344. AFFORDABILITY COST-SHARING CREDIT.
(a) In General.--The affordability cost-sharing credit under this
section for an affordable credit eligible individual enrolled in an
Exchange-participating health benefits plan is in the form of the cost-
sharing reduction described in subsection (b) provided under this
section for the income tier in which the individual is classified based
on the individual's modified adjusted gross income.
(b) Cost-sharing Reductions.--The Commissioner shall specify a
reduction in cost-sharing amounts and the annual limitation on cost-
sharing specified in section 222(c)(2)(B) under a basic plan for each
income tier specified in the table under section 343(d), with respect
to a year, in a manner so that, as estimated by the Commissioner--
(1) the actuarial value of the coverage with such reduced
cost-sharing amounts (and the reduced annual cost-sharing
limit) is equal to the actuarial value percentage (specified in
the table under section 343(d) for the income tier involved) of
the full actuarial value if there were no cost-sharing imposed
under the plan; and
(2) the annual limitation on cost-sharing specified in
section 222(c)(2)(B) is reduced to a level that does not exceed
the maximum out-of-pocket limit specified in subsection (c).
(c) Maximum Out-of-pocket Limit.--
(1) In general.--Subject to paragraph (2), the maximum out-
of-pocket limit specified in this subsection for an individual
within an income tier--
(A) for individual coverage--
(i) for Y1 is the out-of-pocket limit for
Y1 specified in subsection (c) in the table
under section 343(d) for the income tier
involved; or
(ii) for a subsequent year is such out-of-
pocket limit for the previous year under this
subparagraph increased (rounded to the nearest
$10) for each subsequent year by the percentage
increase in the enrollment-weighted average of
premium increases for basic plans applicable to
such year; or
(B) for family coverage is twice the maximum out-
of-pocket limit under subparagraph (A) for the year
involved.
(2) Adjustment.--The Commissioner shall adjust the maximum
out-of-pocket limits under paragraph (1) to ensure that such
limits meet the actuarial value percentage specified in the
table under section 343(d) for the income tier involved.
(d) Determination and Payment of Cost-sharing Affordability
Credit.--In the case of an affordable credit eligible individual in a
tier enrolled in an Exchange-participating health benefits plan offered
by a QHBP offering entity, the Commissioner shall provide for payment
to the offering entity of an amount equivalent to the increased
actuarial value of the benefits under the plan provided under section
303(c)(2)(B) resulting from the reduction in cost-sharing described in
subsections (b) and (c).
SEC. 345. INCOME DETERMINATIONS.
(a) In General.--In applying this subtitle for an affordability
credit for an individual for a plan year, the individual's income shall
be the income (as defined in section 342(c)) for the individual for the
most recent taxable year (as determined in accordance with rules of the
Commissioner). The Federal poverty level applied shall be such level in
effect as of the date of the application.
(b) Program Integrity; Income Verification Procedures.--
(1) Program integrity.--The Commissioner shall take such
steps as may be appropriate to ensure the accuracy of
determinations and redeterminations under this subtitle.
(2) Income verification.--
(A) In general.--Upon an initial application of an
individual for an affordability credit under this
subtitle (or in applying section 342(b)) or upon an
application for a change in the affordability credit
based upon a significant change in modified adjusted
gross income described in subsection (c)(1)--
(i) the Commissioner shall request from the
Secretary of the Treasury the disclosure to the
Commissioner of such information as may be
permitted to verify the information contained
in such application; and
(ii) the Commissioner shall use the
information so disclosed to verify such
information.
(B) Alternative procedures.--The Commissioner shall
establish procedures for the verification of income for
purposes of this subtitle if no income tax return is
available for the most recent completed tax year.
(c) Special Rules.--
(1) Changes in income as a percent of fpl.--In the case
that an individual's income (expressed as a percentage of the
Federal poverty level for a family of the size involved) for a
plan year is expected (in a manner specified by the
Commissioner) to be significantly different from the income (as
so expressed) used under subsection (a), the Commissioner shall
establish rules requiring an individual to report, consistent
with the mechanism established under paragraph (2), significant
changes in such income (including a significant change in
family composition) to the Commissioner and requiring the
substitution of such income for the income otherwise
applicable.
(2) Reporting of significant changes in income.--The
Commissioner shall establish rules under which an individual
determined to be an affordable credit eligible individual would
be required to inform the Commissioner when there is a
significant change in the modified adjusted gross income of the
individual (expressed as a percentage of the FPL for a family
of the size involved) and of the information regarding such
change. Such mechanism shall provide for guidelines that
specify the circumstances that qualify as a significant change,
the verifiable information required to document such a change,
and the process for submission of such information. If the
Commissioner receives new information from an individual
regarding the modified adjusted gross income of the individual,
the Commissioner shall provide for a redetermination of the
individual's eligibility to be an affordable credit eligible
individual.
(3) Transition for chip.--In the case of a child described
in section 302(d)(4), the Commissioner shall establish rules
under which the modified adjusted gross income of the child is
deemed to be no greater than the family income of the child as
most recently determined before Y1 by the State under title XXI
of the Social Security Act.
(4) Study of geographic variation in application of fpl.--
(A) In general.--The Secretary of Health and Human
Services shall conduct a study to examine the
feasibility and implication of adjusting the
application of the Federal poverty level under this
subtitle for different geographic areas so as to
reflect the variations in cost-of-living among
different areas within the United States. If the
Secretary determines that an adjustment is feasible,
the study should include a methodology to make such an
adjustment. Not later than the first day of Y1, the
Secretary shall submit to Congress a report on such
study and shall include such recommendations as the
Secretary determines appropriate.
(B) Inclusion of territories.--
(i) In general.--The Secretary shall ensure
that the study under subparagraph (A) covers
the territories of the United States and that
special attention is paid to the disparity that
exists among poverty levels and the cost of
living in such territories and to the impact of
such disparity on efforts to expand health
coverage and ensure health care.
(ii) Territories defined.--In this
subparagraph, the term ``territories of the
United States'' includes the Commonwealth of
Puerto Rico, the United States Virgin Islands,
Guam, the Northern Mariana Islands, and any
other territory or possession of the United
States.
(d) Penalties for Misrepresentation.--In the case of an individual
who intentionally misrepresents modified adjusted gross income or the
individual fails (without regard to intent) to disclose to the
Commissioner a significant change in modified adjusted gross income
under subsection (c) in a manner that results in the individual
becoming an affordable credit eligible individual when the individual
is not or in the amount of the affordability credit exceeding the
correct amount--
(1) the individual is liable for repayment of the amount of
the improper affordability credit; and
(2) in the case of such an intentional misrepresentation or
other egregious circumstances specified by the Commissioner,
the Commissioner may impose an additional penalty.
SEC. 346. SPECIAL RULES FOR APPLICATION TO TERRITORIES.
(a) One-time Election for Treatment and Application of Funding.--
(1) In general.--A territory may elect, in a form and
manner specified by the Commissioner in consultation with the
Secretary of Health and Human Services and the Secretary of the
Treasury and not later than October 1, 2012, either--
(A) to be treated as a State for purposes of
applying this title and title II; or
(B) not to be so treated but instead, to have the
dollar limitation otherwise applicable to the territory
under subsections (f) and (g) of section 1108 of the
Social Security Act (42 U.S.C. 1308) for a fiscal year
increased by a dollar amount equivalent to the cap
amount determined under subsection (c)(2) for the
territory as applied by the Secretary for the fiscal
year involved.
(2) Conditions for acceptance.--The Commissioner has the
nonreviewable authority to accept or reject an election
described in paragraph (1)(A). Any such acceptance is--
(A) contingent upon entering into an agreement
described in subsection (b) between the Commissioner
and the territory and subsection (c); and
(B) subject to the approval of the Secretary of
Health and Human Services and the Secretary of the
Treasury and subject to such other terms and conditions
as the Commissioner, in consultation with such
Secretaries, may specify.
(3) Default rule.--A territory failing to make such an
election (or having an election under paragraph (1)(A) not
accepted under paragraph (2)) shall be treated as having made
the election described in paragraph (1)(B).
(b) Agreement for Substitution of Percentages for Affordability
Credits.--
(1) Negotiation.--In the case of a territory making an
election under subsection (a)(1)(A) (in this section referred
to as an ``electing territory''), the Commissioner, in
consultation with the Secretaries of Health and Human Services
and the Treasury, shall enter into negotiations with the
government of such territory so that, before Y1, there is an
agreement reached between the parties on the percentages that
shall be applied under paragraph (2) for that territory. The
Commissioner shall not enter into such an agreement unless--
(A) payments made under this subtitle with respect
to residents of the territory are consistent with the
cap established under subsection (c) for such territory
and with subsection (d); and
(B) the requirements of paragraphs (3) and (4) are
met.
(2) Application of substitute percentages and dollar
amounts.--In the case of an electing territory, there shall be
substituted in section 342(a)(1)(B) and in the table in section
341(d)(1) for 400 percent, 133 percent, and other percentages
and dollar amounts specified in such table, such respective
percentages and dollar amounts as are established under the
agreement under paragraph (1) consistent with the following:
(A) No income gap between medicaid and
affordability credits.--The substituted percentages
shall be specified in a manner so as to prevent any gap
in coverage for individuals between income level at
which medical assistance is available through Medicaid
and the income level at which affordability credits are
available.
(B) Adjustment for out-of-pocket responsibility for
premiums and cost-sharing in relation to income.--The
substituted percentages of FPL for income tiers under
such table shall be specified in a manner so that--
(i) affordable credit eligible individuals
residing in the territory bear the same out-of-
pocket responsibility for premiums and cost-
sharing in relation to average income for
residents in that territory, as
(ii) the out-of-pocket responsibility for
premiums and cost-sharing for affordable credit
eligible individuals residing in the 50 States
or the District of Columbia in relation to
average income for such residents.
(3) Special rules with respect to application of tax and
penalty provisions.--The electing territory shall enact one or
more laws under which provisions similar to the following
provisions apply with respect to such territory:
(A) Section 59B of the Internal Revenue Code of
1986, except that any resident of the territory who is
not an affordable credit eligible individual but who
would be an affordable credit eligible individual if
such resident were a resident of one of the 50 States
(and any qualifying child residing with such
individual) may be treated as covered by acceptable
coverage.
(B) Section 4980H of the Internal Revenue Code of
1986 and section 502(c)(11) of the Employee Retirement
Income Security Act of 1974.
(C) Section 3121(c) of the Internal Revenue Code of
1986.
(4) Implementation of insurance reform and consumer
protection requirements.--The electing territory shall enact
and implement such laws and regulations as may be required to
apply the requirements of title II with respect to health
insurance coverage offered in the territory.
(c) Cap on Additional Expenditures.--
(1) In general.--In entering into an agreement with an
electing territory under subsection (b), the Commissioner shall
ensure that the aggregate expenditures under this subtitle with
respect to residents of such territory during the period
beginning with Y1 and ending with 2019 will not exceed the cap
amount specified in paragraph (2) for such territory. The
Commissioner shall adjust from time to time the percentages
applicable under such agreement as needed in order to carry out
the previous sentence.
(2) Cap amount.--
(A) In general.--The cap amount specified in this
paragraph--
(i) for Puerto Rico is $3,700,000,000
increased by the amount (if any) elected under
subparagraph (C); or
(ii) for another territory is the portion
of $300,000,000 negotiated for such territory
under subparagraph (B).
(B) Negotiation for certain territories.--The
Commissioner in consultation with the Secretary of
Health and Human Services shall negotiate with the
governments of the territories (other than Puerto Rico)
to allocate the amount specified in subparagraph
(A)(ii) among such territories.
(C) Optional supplementation for puerto rico.--
(i) In general.--Puerto Rico may elect, in
a form and manner specified by the Secretary of
Health and Human Services in consultation with
the Commissioner to increase the dollar amount
specified in subparagraph (A)(i) by up to
$1,000,000,000.
(ii) Offset in medicaid cap.--If Puerto
Rico makes the election described in clause
(i), the Secretary shall decrease the dollar
limitation otherwise applicable to Puerto Rico
under subsections (f) and (g) of section 1108
of the Social Security Act (42 U.S.C. 1308) for
a fiscal year by the additional aggregate
payments the Secretary estimates will be
payable under this section for the fiscal year
because of such election.
(d) Limitation on Funding.--In no case shall this section
(including the agreement under subsection (b)) permit--
(1) the obligation of funds for expenditures under this
subtitle for periods beginning on or after January 1, 2020; or
(2) any increase in the dollar limitation described in
subsection (a)(1)(B) for any portion of any fiscal year
occurring on or after such date.
SEC. 347. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.
Nothing in this subtitle shall allow Federal payments for
affordability credits on behalf of individuals who are not lawfully
present in the United States.
TITLE IV--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
SEC. 401. INDIVIDUAL RESPONSIBILITY.
For an individual's responsibility to obtain acceptable coverage,
see section 59B of the Internal Revenue Code of 1986 (as added by
section 501 of this Act).
Subtitle B--Employer Responsibility
PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS
SEC. 411. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
An employer meets the requirements of this section if such employer
does all of the following:
(1) Offer of coverage.--The employer offers each employee
individual and family coverage under a qualified health
benefits plan (or under a current employment-based health plan
(within the meaning of section 202(b))) in accordance with
section 412.
(2) Contribution towards coverage.--If an employee accepts
such offer of coverage, the employer makes timely contributions
towards such coverage in accordance with section 412.
(3) Contribution in lieu of coverage.--Beginning with Y2,
if an employee declines such offer but otherwise obtains
coverage in an Exchange-participating health benefits plan
(other than by reason of being covered by family coverage as a
spouse or dependent of the primary insured), the employer shall
make a timely contribution to the Health Insurance Exchange
with respect to each such employee in accordance with section
413.
SEC. 412. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARD EMPLOYEE AND
DEPENDENT COVERAGE.
(a) In General.--An employer meets the requirements of this section
with respect to an employee if the following requirements are met:
(1) Offering of coverage.--The employer offers the coverage
described in section 411(1). In the case of an Exchange-
eligible employer, the employer may offer such coverage either
through an Exchange-participating health benefits plan or other
than through such a plan.
(2) Employer required contribution.--The employer timely
pays to the issuer of such coverage an amount not less than the
employer required contribution specified in subsection (b) for
such coverage.
(3) Provision of information.--The employer provides the
Health Choices Commissioner, the Secretary of Labor, the
Secretary of Health and Human Services, and the Secretary of
the Treasury, as applicable, with such information as the
Commissioner may require to ascertain compliance with the
requirements of this section, including the following:
(A) The name, date, and employer identification
number of the employer.
(B) A certification as to whether the employer
offers to its full-time employees (and their
dependents) the opportunity to enroll in a qualified
health benefits plan or a current employment-based
health plan (within the meaning of section 202(b)).
(C) If the employer certifies that the employer did
offer to its full-time employees (and their dependents)
the opportunity to so enroll--
(i) the months during the calendar year for
which such coverage was available; and
(ii) the monthly premium for the lowest
cost option in each of the enrollment
categories under each such plan offered to
employees.
(D) The name, address, and TIN of each full-time
employee during the calendar year and the months (if
any) during which such employee (and any dependents)
were covered under any such plans.
(4) Autoenrollment of employees.--The employer provides for
autoenrollment of the employee in accordance with subsection
(c).
This subsection shall supersede any law of a State which would prevent
automatic payroll deduction of employee contributions to an employment-
based health plan.
(b) Reduction of Employee Premiums Through Minimum Employer
Contribution.--
(1) Full-time employees.--The minimum employer contribution
described in this subsection for coverage of a full-time
employee (and, if any, the employee's spouse and qualifying
children (as defined in section 152(c) of the Internal Revenue
Code of 1986)) under a qualified health benefits plan (or
current employment-based health plan) is equal to--
(A) in case of individual coverage, not less than
72.5 percent of the applicable premium (as defined in
section 4980B(f)(4) of such Code, subject to paragraph
(2)) of the lowest cost plan offered by the employer
that is a qualified health benefits plan (or is such
current employment-based health plan); and
(B) in the case of family coverage which includes
coverage of such spouse and children, not less 65
percent of such applicable premium of such lowest cost
plan.
(2) Applicable premium for exchange coverage.--In this
subtitle, the amount of the applicable premium of the lowest
cost plan with respect to coverage of an employee under an
Exchange-participating health benefits plan is the reference
premium amount under section 343(c) for individual coverage
(or, if elected, family coverage) for the premium rating area
in which the individual or family resides.
(3) Minimum employer contribution for employees other than
full-time employees.--In the case of coverage for an employee
who is not a full-time employee, the amount of the minimum
employer contribution under this subsection shall be a
proportion (as determined in accordance with rules of the
Health Choices Commissioner, the Secretary of Labor, the
Secretary of Health and Human Services, and the Secretary of
the Treasury, as applicable) of the minimum employer
contribution under this subsection with respect to a full-time
employee that reflects the proportion of--
(A) the average weekly hours of employment of the
employee by the employer, to
(B) the minimum weekly hours specified by the
Commissioner for an employee to be a full-time
employee.
(4) Salary reductions not treated as employer
contributions.--For purposes of this section, any contribution
on behalf of an employee with respect to which there is a
corresponding reduction in the compensation of the employee
shall not be treated as an amount paid by the employer.
(c) Automatic Enrollment for Employer Sponsored Health Benefits.--
(1) In general.--The requirement of this subsection with
respect to an employer and an employee is that the employer
automatically enroll such employee into the employment-based
health benefits plan for individual coverage under the plan
option with the lowest applicable employee premium.
(2) Opt-out.--In no case may an employer automatically
enroll an employee in a plan under paragraph (1) if such
employee makes an affirmative election to opt out of such plan
or to elect coverage under an employment-based health benefits
plan offered by such employer. An employer shall provide an
employee with a 30-day period to make such an affirmative
election before the employer may automatically enroll the
employee in such a plan.
(3) Notice requirements.--
(A) In general.--Each employer described in
paragraph (1) who automatically enrolls an employee
into a plan as described in such paragraph shall
provide the employees, within a reasonable period
before the beginning of each plan year (or, in the case
of new employees, within a reasonable period before the
end of the enrollment period for such a new employee),
written notice of the employees' rights and obligations
relating to the automatic enrollment requirement under
such paragraph. Such notice must be comprehensive and
understood by the average employee to whom the
automatic enrollment requirement applies.
(B) Inclusion of specific information.--The written
notice under subparagraph (A) must explain an
employee's right to opt out of being automatically
enrolled in a plan and in the case that more than one
level of benefits or employee premium level is offered
by the employer involved, the notice must explain which
level of benefits and employee premium level the
employee will be automatically enrolled in the absence
of an affirmative election by the employee.
SEC. 413. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.
(a) In General.--A contribution is made in accordance with this
section with respect to an employee if such contribution is equal to an
amount equal to 8 percent of the average wages paid by the employer
during the period of enrollment (determined by taking into account all
employees of the employer and in such manner as the Commissioner
provides, including rules providing for the appropriate aggregation of
related employers) but not to exceed the minimum employer contribution
described in section 412(b)(1)(A). Any such contribution--
(1) shall be paid to the Health Choices Commissioner for
deposit into the Health Insurance Exchange Trust Fund; and
(2) shall not be applied against the premium of the
employee under the Exchange-participating health benefits plan
in which the employee is enrolled.
(b) Special Rules for Small Employers.--
(1) In general.--In the case of any employer who is a small
employer for any calendar year, subsection (a) shall be applied
by substituting the applicable percentage determined in
accordance with the following table for ``8 percent'':
If the annual payroll of such employer The applicable percentage is:
for the preceding calendar year:
Does not exceed $500,000............. 0 percent
Exceeds $500,000, but does not exceed 2 percent
$585,000.
Exceeds $585,000, but does not exceed 4 percent
$670,000.
Exceeds $670,000, but does not exceed 6 percent
$750,000.
(2) Small employer.--For purposes of this subsection, the
term ``small employer'' means any employer for any calendar
year if the annual payroll of such employer for the preceding
calendar year does not exceed $750,000.
(3) Annual payroll.--For purposes of this paragraph, the
term ``annual payroll'' means, with respect to any employer for
any calendar year, the aggregate wages paid by the employer
during such calendar year.
(4) Aggregation rules.--Related employers and predecessors
shall be treated as a single employer for purposes of this
subsection.
SEC. 414. AUTHORITY RELATED TO IMPROPER STEERING.
The Health Choices Commissioner (in coordination with the Secretary
of Labor, the Secretary of Health and Human Services, and the Secretary
of the Treasury) shall have authority to set standards for determining
whether employers or insurers are undertaking any actions to affect the
risk pool within the Health Insurance Exchange by inducing individuals
to decline coverage under a qualified health benefits plan (or current
employment-based health plan (within the meaning of section 202(b))
offered by the employer and instead to enroll in an Exchange-
participating health benefits plan. An employer violating such
standards shall be treated as not meeting the requirements of this
section.
SEC. 415. IMPACT STUDY ON EMPLOYER RESPONSIBILITY REQUIREMENTS.
(a) In General.--The Secretary of Labor shall conduct a study to
examine the effect of the exemptions under section 512(a) and coverage
thresholds under this division (in this section referred to
collectively as ``employer responsibility requirements'') on
employment-based health plan sponsorship, generally and within specific
industries, and the effect of such requirements and thresholds on
employers, employment-based health plans, and employees in each
industry.
(b) Annual Report.--The Secretary of Labor annually shall submit to
Congress a report on findings on how employer responsibility
requirements have impacted and are likely to impact employers, plans,
and employees during the previous year and projected trends.
(c) Legislative Recommendations.--No later than January 1, 2012,
and on an annual basis thereafter, the Secretary of Labor shall submit
legislative recommendations to Congress to modify the employer
responsibility requirements if the Secretary determines that the
requirements are detrimentally affecting or will detrimentally affect
employer plan sponsorship or otherwise creating inequities among
employers, health plans, and employees. The Secretary may also submit
such recommendations as the Secretary determines necessary to improve
and strengthen employment-based health plan sponsorship, employer
responsibility, and related proposals that would enhance the delivery
of health care benefits between employers and employees.
SEC. 416. STUDY ON EMPLOYER HARDSHIP EXEMPTION.
(a) In General.--The Secretary of Labor together with the Secretary
of Treasury, the Secretary of Health and Human Services, and the
Commissioner, shall conduct a study to examine the impact of the
employer responsibility requirements described in section 415(a) and
make a recommendation to Congress about whether an employer hardship
exemption would be appropriate.
(b) Items Included in Study.--Within such study the Secretaries and
Commissioner shall examine cases where such employer responsibility
requirements may pose a particular hardship, and specifically look at
employers by industry, profit margin, length of time in business, and
size. In this examination, the economic conditions shall be considered,
including the rate of increase in business costs, the availability of
short-term credit lines, and abilities to restructure debt. In
addition, the study shall examine the impact an employer hardship
waiver could have on employees.
(c) Report.--Not later than January 1, 2012, the Secretaries and
Commissioner shall report to Congress on their findings and make a
recommendation regarding the need or lack of need for a partial or
complete employer hardship waiver. The Secretaries and Commissioner may
also submit recommendations about the criteria Congress should include
when developing eligibility requirements for the employer hardship
waiver and what safeguards are necessary to protect the employees of
that employer.
PART 2--SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
SEC. 421. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974.
(a) In General.--Subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended by adding at the end the
following new part:
``PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS
``SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH
COVERAGE PARTICIPATION REQUIREMENTS.
``(a) In General.--An employer may make an election with the
Secretary to be subject to the health coverage participation
requirements.
``(b) Time and Manner.--An election under subsection (a) may be
made at such time and in such form and manner as the Secretary may
prescribe.
``SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.
``(a) In General.--If an employer makes an election to the
Secretary under section 801--
``(1) such election shall be treated as the establishment
and maintenance of a group health plan (as defined in section
733(a)) for purposes of this title, subject to section 251 of
the Affordable Health Care for America Act; and
``(2) the health coverage participation requirements shall
be deemed to be included as terms and conditions of such plan.
``(b) Periodic Investigations To Discover Noncompliance.--The
Secretary shall regularly audit a representative sampling of employers
and group health plans and conduct investigations and other activities
under section 504 with respect to such sampling of plans so as to
discover noncompliance with the health coverage participation
requirements in connection with such plans. The Secretary shall
communicate findings of noncompliance made by the Secretary under this
subsection to the Secretary of the Treasury and the Health Choices
Commissioner. The Secretary shall take such timely enforcement action
as appropriate to achieve compliance.
``(c) Recordkeeping.--To facilitate the audits described in
subsection (b), the Secretary shall promulgate recordkeeping
requirements for employers to account for both employees of the
employer and individuals whom the employer has not treated as employees
of the employer but with whom the employer, in the course of its trade
or business, has engaged for the performance of labor or services. The
scope and content of such recordkeeping requirements shall be
determined by the Secretary and shall be designed to ensure that
employees who are not properly treated as such may be identified and
properly treated.
``SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
``For purposes of this part, the term `health coverage
participation requirements' means the requirements of part 1 of
subtitle B of title IV of division A of (as in effect on the date of
the enactment of such Act).
``SEC. 804. RULES FOR APPLYING REQUIREMENTS.
``(a) Affiliated Groups.--In the case of any employer which is part
of a group of employers who are treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue
Code of 1986, the election under section 801 shall be made by such
employer as the Secretary may provide. Any such election, once made,
shall apply to all members of such group.
``(b) Separate Elections.--Under regulations prescribed by the
Secretary, separate elections may be made under section 801 with
respect to--
``(1) separate lines of business, and
``(2) full-time employees and employees who are not full-
time employees.
``SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL
NONCOMPLIANCE.
``The Secretary may terminate the election of any employer under
section 801 if the Secretary (in coordination with the Health Choices
Commissioner) determines that such employer is in substantial
noncompliance with the health coverage participation requirements and
shall refer any such determination to the Secretary of the Treasury as
appropriate.
``SEC. 806. REGULATIONS.
``The Secretary may promulgate such regulations as may be necessary
or appropriate to carry out the provisions of this part, in accordance
with section 424(a) of the Affordable Health Care for America Act. The
Secretary may promulgate any interim final rules as the Secretary
determines are appropriate to carry out this part.''.
(b) Enforcement of Health Coverage Participation Requirements.--
Section 502 of such Act (29 U.S.C. 1132) is amended--
(1) in subsection (a)(6), by striking ``paragraph'' and all
that follows through ``subsection (c)'' and inserting
``paragraph (2), (4), (5), (6), (7), (8), (9), (10), or (11) of
subsection (c)''; and
(2) in subsection (c), by redesignating the second
paragraph (10) as paragraph (12) and by inserting after the
first paragraph (10) the following new paragraph:
``(11) Health coverage participation requirements.--
``(A) Civil penalties.--In the case of any employer
who fails (during any period with respect to which an
election under section 801(a) is in effect) to satisfy
the health coverage participation requirements with
respect to any employee, the Secretary may assess a
civil penalty against the employer of $100 for each day
in the period beginning on the date such failure first
occurs and ending on the date such failure is
corrected.
``(B) Health coverage participation requirements.--
For purposes of this paragraph, the term `health
coverage participation requirements' has the meaning
provided in section 803.
``(C) Limitations on amount of penalty.--
``(i) Penalty not to apply where failure
not discovered exercising reasonable
diligence.--No penalty shall be assessed under
subparagraph (A) with respect to any failure
during any period for which it is established
to the satisfaction of the Secretary that the
employer did not know, or exercising reasonable
diligence would not have known, that such
failure existed.
``(ii) Penalty not to apply to failures
corrected within 30 days.--No penalty shall be
assessed under subparagraph (A) with respect to
any failure if--
``(I) such failure was due to
reasonable cause and not to willful
neglect, and
``(II) such failure is corrected
during the 30-day period beginning on
the 1st date that the employer knew, or
exercising reasonable diligence would
have known, that such failure existed.
``(iii) Overall limitation for
unintentional failures.--In the case of
failures which are due to reasonable cause and
not to willful neglect, the penalty assessed
under subparagraph (A) for failures during any
1-year period shall not exceed the amount equal
to the lesser of--
``(I) 10 percent of the aggregate
amount paid or incurred by the employer
(or predecessor employer) during the
preceding 1-year period for group
health plans, or
``(II) $500,000.
``(D) Advance notification of failure prior to
assessment.--Before a reasonable time prior to the
assessment of any penalty under this paragraph with
respect to any failure by an employer, the Secretary
shall inform the employer in writing of such failure
and shall provide the employer information regarding
efforts and procedures which may be undertaken by the
employer to correct such failure.
``(E) Coordination with excise tax.--Under
regulations prescribed in accordance with section 424
of the Affordable Health Care for America Act, the
Secretary and the Secretary of the Treasury shall
coordinate the assessment of penalties under this
section in connection with failures to satisfy health
coverage participation requirements with the imposition
of excise taxes on such failures under section 4980H(b)
of the Internal Revenue Code of 1986 so as to avoid
duplication of penalties with respect to such failures.
``(F) Deposit of penalty collected.--Any amount of
penalty collected under this paragraph shall be
deposited as miscellaneous receipts in the Treasury of
the United States.''.
(c) Clerical Amendments.--The table of contents in section 1 of
such Act is amended by inserting after the item relating to section 734
the following new items:
``Part 8--National Health Coverage Participation Requirements
``Sec. 801. Election of employer to be subject to national health
coverage participation requirements.
``Sec. 802. Treatment of coverage resulting from election.
``Sec. 803. Health coverage participation requirements.
``Sec. 804. Rules for applying requirements.
``Sec. 805. Termination of election in cases of substantial
noncompliance.
``Sec. 806. Regulations.''.
(d) Effective Date.--The amendments made by this section shall
apply to periods beginning after December 31, 2012.
SEC. 422. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
UNDER THE INTERNAL REVENUE CODE OF 1986.
(a) Failure To Elect, or Substantially Comply With, Health Coverage
Participation Requirements.--For employment tax on employers who fail
to elect, or substantially comply with, the health coverage
participation requirements described in part 1, see section 3111(c) of
the Internal Revenue Code of 1986 (as added by section 512 of this
Act).
(b) Other Failures.--For excise tax on other failures of electing
employers to comply with such requirements, see section 4980H of the
Internal Revenue Code of 1986 (as added by section 511 of this Act).
SEC. 423. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
UNDER THE PUBLIC HEALTH SERVICE ACT.
(a) In General.--Part C of title XXVII of the Public Health Service
Act is amended by adding at the end the following new section:
``SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
``(a) Election of Employer To Be Subject to National Health
Coverage Participation Requirements.--
``(1) In general.--An employer may make an election with
the Secretary to be subject to the health coverage
participation requirements.
``(2) Time and manner.--An election under paragraph (1) may
be made at such time and in such form and manner as the
Secretary may prescribe.
``(b) Treatment of Coverage Resulting From Election.--
``(1) In general.--If an employer makes an election to the
Secretary under subsection (a)--
``(A) such election shall be treated as the
establishment and maintenance of a group health plan
for purposes of this title, subject to section 251 of
the Affordable Health Care for America Act; and
``(B) the health coverage participation
requirements shall be deemed to be included as terms
and conditions of such plan.
``(2) Periodic investigations to determine compliance with
health coverage participation requirements.--The Secretary
shall regularly audit a representative sampling of employers
and conduct investigations and other activities with respect to
such sampling of employers so as to discover noncompliance with
the health coverage participation requirements in connection
with such employers (during any period with respect to which an
election under subsection (a) is in effect). The Secretary
shall communicate findings of noncompliance made by the
Secretary under this subsection to the Secretary of the
Treasury and the Health Choices Commissioner. The Secretary
shall take such timely enforcement action as appropriate to
achieve compliance.
``(3) Recordkeeping.--To facilitate the audits described in
subsection (b), the Secretary shall promulgate recordkeeping
requirements for employers to account for both employees of the
employer and individuals whom the employer has not treated as
employees of the employer but with whom the employer, in the
course of its trade or business, has engaged for the
performance of labor or services. The scope and content of such
recordkeeping requirements shall be determined by the Secretary
and shall be designed to ensure that employees who are not
properly treated as such may be identified and properly
treated.
``(c) Health Coverage Participation Requirements.--For purposes of
this section, the term `health coverage participation requirements'
means the requirements of part 1 of subtitle B of title IV of division
A of the (as in effect on the date of the enactment of this section).
``(d) Separate Elections.--Under regulations prescribed by the
Secretary, separate elections may be made under subsection (a) with
respect to full-time employees and employees who are not full-time
employees.
``(e) Termination of Election in Cases of Substantial
Noncompliance.--The Secretary may terminate the election of any
employer under subsection (a) if the Secretary (in coordination with
the Health Choices Commissioner) determines that such employer is in
substantial noncompliance with the health coverage participation
requirements and shall refer any such determination to the Secretary of
the Treasury as appropriate.
``(f) Enforcement of Health Coverage Participation Requirements.--
``(1) Civil penalties.--In the case of any employer who
fails (during any period with respect to which the election
under subsection (a) is in effect) to satisfy the health
coverage participation requirements with respect to any
employee, the Secretary may assess a civil penalty against the
employer of $100 for each day in the period beginning on the
date such failure first occurs and ending on the date such
failure is corrected.
``(2) Limitations on amount of penalty.--
``(A) Penalty not to apply where failure not
discovered exercising reasonable diligence.--No penalty
shall be assessed under paragraph (1) with respect to
any failure during any period for which it is
established to the satisfaction of the Secretary that
the employer did not know, or exercising reasonable
diligence would not have known, that such failure
existed.
``(B) Penalty not to apply to failures corrected
within 30 days.--No penalty shall be assessed under
paragraph (1) with respect to any failure if--
``(i) such failure was due to reasonable
cause and not to willful neglect, and
``(ii) such failure is corrected during the
30-day period beginning on the 1st date that
the employer knew, or exercising reasonable
diligence would have known, that such failure
existed.
``(C) Overall limitation for unintentional
failures.--In the case of failures which are due to
reasonable cause and not to willful neglect, the
penalty assessed under paragraph (1) for failures
during any 1-year period shall not exceed the amount
equal to the lesser of--
``(i) 10 percent of the aggregate amount
paid or incurred by the employer (or
predecessor employer) during the preceding
taxable year for group health plans, or
``(ii) $500,000.
``(3) Advance notification of failure prior to
assessment.--Before a reasonable time prior to the assessment
of any penalty under paragraph (1) with respect to any failure
by an employer, the Secretary shall inform the employer in
writing of such failure and shall provide the employer
information regarding efforts and procedures which may be
undertaken by the employer to correct such failure.
``(4) Actions to enforce assessments.--The Secretary may
bring a civil action in any District Court of the United States
to collect any civil penalty under this subsection.
``(5) Coordination with excise tax.--Under regulations
prescribed in accordance with section 424 of the Affordable
Health Care for America Act, the Secretary and the Secretary of
the Treasury shall coordinate the assessment of penalties under
paragraph (1) in connection with failures to satisfy health
coverage participation requirements with the imposition of
excise taxes on such failures under section 4980H(b) of the
Internal Revenue Code of 1986 so as to avoid duplication of
penalties with respect to such failures.
``(6) Deposit of penalty collected.--Any amount of penalty
collected under this subsection shall be deposited as
miscellaneous receipts in the Treasury of the United States.
``(g) Regulations.--The Secretary may promulgate such regulations
as may be necessary or appropriate to carry out the provisions of this
section, in accordance with section 424(a) of the Affordable Health
Care for America Act. The Secretary may promulgate any interim final
rules as the Secretary determines are appropriate to carry out this
section.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to periods beginning after December 31, 2012.
SEC. 424. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION
REQUIREMENTS.
(a) Assuring Coordination.--The officers consisting of the
Secretary of Labor, the Secretary of the Treasury, the Secretary of
Health and Human Services, and the Health Choices Commissioner shall
ensure, through the execution of an interagency memorandum of
understanding among such officers, that--
(1) regulations, rulings, and interpretations issued by
such officers relating to the same matter over which two or
more of such officers have responsibility under subpart B of
part 8 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974, section 4980H of the Internal
Revenue Code of 1986, and section 2793 of the Public Health
Service Act are administered so as to have the same effect at
all times; and
(2) coordination of policies relating to enforcing the same
requirements through such officers in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.
(b) Multiemployer Plans.--In the case of a group health plan that
is a multiemployer plan (as defined in section 3(37) of the Employee
Retirement Income Security Act of 1974), the regulations prescribed in
accordance with subsection (a) by the officers referred to in
subsection (a) shall provide for the application of the health coverage
participation requirements to the plan sponsor and contributing
employers of such plan. For purposes of this division, contributions
made pursuant to a collective bargaining agreement or other agreement
to such a group health plan shall be treated as amounts paid by the
employer.
TITLE V--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Subtitle A--Provisions Relating to Health Care Reform
PART 1--SHARED RESPONSIBILITY
Subpart A--Individual Responsibility
SEC. 501. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.
(a) In General.--Subchapter A of chapter 1 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new part:
``PART VIII--HEALTH CARE RELATED TAXES
``subpart a. tax on individuals without acceptable health care
coverage.
``Subpart A--Tax on Individuals Without Acceptable Health Care Coverage
``Sec. 59B. Tax on individuals without acceptable health care coverage.
``SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.
``(a) Tax Imposed.--In the case of any individual who does not meet
the requirements of subsection (d) at any time during the taxable year,
there is hereby imposed a tax equal to 2.5 percent of the excess of--
``(1) the taxpayer's modified adjusted gross income for the
taxable year, over
``(2) the amount of gross income specified in section
6012(a)(1) with respect to the taxpayer.
``(b) Limitations.--
``(1) Tax limited to average premium.--
``(A) In general.--The tax imposed under subsection
(a) with respect to any taxpayer for any taxable year
shall not exceed the applicable national average
premium for such taxable year.
``(B) Applicable national average premium.--
``(i) In general.--For purposes of
subparagraph (A), the `applicable national
average premium' means, with respect to any
taxable year, the average premium (as
determined by the Secretary, in coordination
with the Health Choices Commissioner) for self-
only coverage under a basic plan which is
offered in a Health Insurance Exchange for the
calendar year in which such taxable year
begins.
``(ii) Failure to provide coverage for more
than one individual.--In the case of any
taxpayer who fails to meet the requirements of
subsection (d) with respect to more than one
individual during the taxable year, clause (i)
shall be applied by substituting `family
coverage' for `self-only coverage'.
``(2) Proration for part year failures.--The tax imposed
under subsection (a) with respect to any taxpayer for any
taxable year shall not exceed the amount which bears the same
ratio to the amount of tax so imposed (determined without
regard to this paragraph and after application of paragraph
(1)) as--
``(A) the aggregate periods during such taxable
year for which such individual failed to meet the
requirements of subsection (d), bears to
``(B) the entire taxable year.
``(c) Exceptions.--
``(1) Dependents.--Subsection (a) shall not apply to any
individual for any taxable year if a deduction is allowable
under section 151 with respect to such individual to another
taxpayer for any taxable year beginning in the same calendar
year as such taxable year.
``(2) Nonresident aliens.--Subsection (a) shall not apply
to any individual who is a nonresident alien.
``(3) Individuals residing outside united states.--Any
qualified individual (as defined in section 911(d)) (and any
qualifying child residing with such individual) shall be
treated for purposes of this section as covered by acceptable
coverage during the period described in subparagraph (A) or (B)
of section 911(d)(1), whichever is applicable.
``(4) Individuals residing in possessions of the united
states.--Any individual who is a bona fide resident of any
possession of the United States (as determined under section
937(a)) for any taxable year (and any qualifying child residing
with such individual) shall be treated for purposes of this
section as covered by acceptable coverage during such taxable
year.
``(5) Religious conscience exemption.--
``(A) In general.--Subsection (a) shall not apply
to any individual (and any qualifying child residing
with such individual) for any period if such individual
has in effect an exemption which certifies that such
individual is a member of a recognized religious sect
or division thereof described in section 1402(g)(1) and
an adherent of established tenets or teachings of such
sect or division as described in such section.
``(B) Exemption.--An application for the exemption
described in subparagraph (A) shall be filed with the
Secretary at such time and in such form and manner as
the Secretary may prescribe. The Secretary may treat an
application for exemption under section 1402(g)(1) as
an application for exemption under this section, or may
otherwise coordinate applications under such sections,
as the Secretary determines appropriate. Any such
exemption granted by the Secretary shall be effective
for such period as the Secretary determines
appropriate.
``(d) Acceptable Coverage Requirement.--
``(1) In general.--The requirements of this subsection are
met with respect to any individual for any period if such
individual (and each qualifying child of such individual) is
covered by acceptable coverage at all times during such period.
``(2) Acceptable coverage.--For purposes of this section,
the term `acceptable coverage' means any of the following:
``(A) Qualified health benefits plan coverage.--
Coverage under a qualified health benefits plan (as
defined in section 100(c) of the Affordable Health Care
for America Act).
``(B) Grandfathered health insurance coverage;
coverage under grandfathered employment-based health
plan.--Coverage under a grandfathered health insurance
coverage (as defined in subsection (a) of section 202
of the Affordable Health Care for America Act) or under
a current employment-based health plan (within the
meaning of subsection (b) of such section).
``(C) Medicare.--Coverage under part A of title
XVIII of the Social Security Act.
``(D) Medicaid.--Coverage for medical assistance
under title XIX of the Social Security Act.
``(E) Members of the armed forces and dependents
(including tricare).--Coverage under chapter 55 of
title 10, United States Code, including similar
coverage furnished under section 1781 of title 38 of
such Code.
``(F) VA.--Coverage under the veteran's health care
program under chapter 17 of title 38, United States
Code.
``(G) Members of indian tribes.--Health care
services made available through the Indian Health
Service, a tribal organization (as defined in section 4
of the Indian Health Care Improvement Act), or an urban
Indian organization (as defined in such section) to
members of an Indian tribe (as defined in such
section).
``(H) Other coverage.--Such other health benefits
coverage as the Secretary, in coordination with the
Health Choices Commissioner, recognizes for purposes of
this subsection.
``(e) Other Definitions and Special Rules.--
``(1) Qualifying child.--For purposes of this section, the
term `qualifying child' has the meaning given such term by
section 152(c). With respect to any period during which health
coverage for a child must be provided by an individual pursuant
to a child support order, such child shall be treated as a
qualifying child of such individual (and not as a qualifying
child of any other individual).
``(2) Basic plan.--For purposes of this section, the term
`basic plan' has the meaning given such term under section
100(c) of the Affordable Health Care for America Act.
``(3) Health insurance exchange.--For purposes of this
section, the term `Health Insurance Exchange' has the meaning
given such term under section 100(c) of the Affordable Health
Care for America Act, including any State-based health
insurance exchange approved for operation under section 308 of
such Act.
``(4) Family coverage.--For purposes of this section, the
term `family coverage' means any coverage other than self-only
coverage.
``(5) Modified adjusted gross income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income increased by--
``(A) any amount excluded from gross income under
section 911, and
``(B) any amount of interest received or accrued by
the taxpayer during the taxable year which is exempt
from tax.
``(6) Not treated as tax imposed by this chapter for
certain purposes.--The tax imposed under this section shall not
be treated as tax imposed by this chapter for purposes of
determining the amount of any credit under this chapter or for
purposes of section 55.
``(f) Regulations.--The Secretary shall prescribe such regulations
or other guidance as may be necessary or appropriate to carry out the
purposes of this section, including regulations or other guidance
(developed in coordination with the Health Choices Commissioner) which
provide--
``(1) exemption from the tax imposed under subsection (a)
in cases of de minimis lapses of acceptable coverage, and
``(2) a waiver of the application of subsection (a) in
cases of hardship, including a process for applying for such a
waiver.''.
(b) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of such Code is amended by inserting after section
6050W the following new section:
``SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE COVERAGE.
``(a) Requirement of Reporting.--Every person who provides
acceptable coverage (as defined in section 59B(d)) to any individual
during any calendar year shall, at such time as the Secretary may
prescribe, make the return described in subsection (b) with respect to
such individual.
``(b) Form and Manner of Returns.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of the primary
insured and the name of each other individual obtaining
coverage under the policy,
``(B) the period for which each such individual was
provided with the coverage referred to in subsection
(a), and
``(C) such other information as the Secretary may
require.
``(c) Statements to Be Furnished to Individuals With Respect to
Whom Information Is Required.--Every person required to make a return
under subsection (a) shall furnish to each primary insured whose name
is required to be set forth in such return a written statement
showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact for
such person, and
``(2) the information required to be shown on the return
with respect to such individual.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year for which the return under subsection (a) is required to be made.
``(d) Coverage Provided by Governmental Units.--In the case of
coverage provided by any governmental unit or any agency or
instrumentality thereof, the officer or employee who enters into the
agreement to provide such coverage (or the person appropriately
designated for purposes of this section) shall make the returns and
statements required by this section.''.
(2) Penalty for failure to file.--
(A) Return.--Subparagraph (B) of section 6724(d)(1)
of such Code is amended by striking ``or'' at the end
of clause (xxii), by striking ``and'' at the end of
clause (xxiii) and inserting ``or'', and by adding at
the end the following new clause:
``(xxiv) section 6050X (relating to returns
relating to health insurance coverage), and''.
(B) Statement.--Paragraph (2) of section 6724(d) of
such Code is amended by striking ``or'' at the end of
subparagraph (EE), by striking the period at the end of
subparagraph (FF) and inserting ``, or'', and by
inserting after subparagraph (FF) the following new
subparagraph:
``(GG) section 6050X (relating to returns relating
to health insurance coverage).''.
(c) Return Requirement.--Subsection (a) of section 6012 of such
Code is amended by inserting after paragraph (9) the following new
paragraph:
``(10) Every individual to whom section 59B(a) applies and
who fails to meet the requirements of section 59B(d) with
respect to such individual or any qualifying child (as defined
in section 152(c)) of such individual.''.
(d) Clerical Amendments.--
(1) The table of parts for subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new item:
``Part VIII. Health Care Related Taxes.''.
(2) The table of sections for subpart B of part III of
subchapter A of chapter 61 is amended by adding at the end the
following new item:
``Sec. 6050X. Returns relating to health insurance coverage.''.
(e) Section 15 Not to Apply.--The amendment made by subsection (a)
shall not be treated as a change in a rate of tax for purposes of
section 15 of the Internal Revenue Code of 1986.
(f) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2012.
(2) Returns.--The amendments made by subsection (b) shall
apply to calendar years beginning after December 31, 2012.
Subpart B--Employer Responsibility
SEC. 511. ELECTION TO SATISFY HEALTH COVERAGE PARTICIPATION
REQUIREMENTS.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new section:
``SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COVERAGE PARTICIPATION
REQUIREMENTS.
``(a) Election of Employer Responsibility to Provide Health
Coverage.--
``(1) In general.--Subsection (b) shall apply to any
employer with respect to whom an election under paragraph (2)
is in effect.
``(2) Time and manner.--An employer may make an election
under this paragraph at such time and in such form and manner
as the Secretary may prescribe.
``(3) Affiliated groups.--In the case of any employer which
is part of a group of employers who are treated as a single
employer under subsection (b), (c), (m), or (o) of section 414,
the election under paragraph (2) shall be made by such person
as the Secretary may provide. Any such election, once made,
shall apply to all members of such group.
``(4) Separate elections.--Under regulations prescribed by
the Secretary, separate elections may be made under paragraph
(2) with respect to--
``(A) separate lines of business, and
``(B) full-time employees and employees who are not
full-time employees.
``(5) Termination of election in cases of substantial
noncompliance.--The Secretary may terminate the election of any
employer under paragraph (2) if the Secretary (in coordination
with the Health Choices Commissioner) determines that such
employer is in substantial noncompliance with the health
coverage participation requirements.
``(b) Excise Tax With Respect to Failure to Meet Health Coverage
Participation Requirements.--
``(1) In general.--In the case of any employer who fails
(during any period with respect to which the election under
subsection (a) is in effect) to satisfy the health coverage
participation requirements with respect to any employee to whom
such election applies, there is hereby imposed on each such
failure with respect to each such employee a tax of $100 for
each day in the period beginning on the date such failure first
occurs and ending on the date such failure is corrected.
``(2) Limitations on amount of tax.--
``(A) Tax not to apply where failure not discovered
exercising reasonable diligence.--No tax shall be
imposed by paragraph (1) on any failure during any
period for which it is established to the satisfaction
of the Secretary that the employer neither knew, nor
exercising reasonable diligence would have known, that
such failure existed.
``(B) Tax not to apply to failures corrected within
30 days.--No tax shall be imposed by paragraph (1) on
any failure if--
``(i) such failure was due to reasonable
cause and not to willful neglect, and
``(ii) such failure is corrected during the
30-day period beginning on the 1st date that
the employer knew, or exercising reasonable
diligence would have known, that such failure
existed.
``(C) Overall limitation for unintentional
failures.--In the case of failures which are due to
reasonable cause and not to willful neglect, the tax
imposed by subsection (a) for failures during the
taxable year of the employer shall not exceed the
amount equal to the lesser of--
``(i) 10 percent of the aggregate amount
paid or incurred by the employer (or
predecessor employer) during the preceding
taxable year for employment-based health plans,
or
``(ii) $500,000.
``(D) Coordination with other enforcement
provisions.--The tax imposed under paragraph (1) with
respect to any failure shall be reduced (but not below
zero) by the amount of any civil penalty collected
under section 502(c)(11) of the Employee Retirement
Income Security Act of 1974 or section 2793(g) of the
Public Health Service Act with respect to such failure.
``(c) Health Coverage Participation Requirements.--For purposes of
this section, the term `health coverage participation requirements'
means the requirements of part I of subtitle B of title IV of the (as
in effect on the date of the enactment of this section).''.
(b) Clerical Amendment.--The table of sections for chapter 43 of
such Code is amended by adding at the end the following new item:
``Sec. 4980H. Election with respect to health coverage participation
requirements.''.
(c) Effective Date.--The amendments made by this section shall
apply to periods beginning after December 31, 2012.
SEC. 512. HEALTH CARE CONTRIBUTIONS OF NONELECTING EMPLOYERS.
(a) In General.--Section 3111 of the Internal Revenue Code of 1986
is amended by redesignating subsection (c) as subsection (d) and by
inserting after subsection (b) the following new subsection:
``(c) Employers Electing Not to Provide Health Benefits.--
``(1) In general.--In addition to other taxes, there is
hereby imposed on every nonelecting employer an excise tax,
with respect to having individuals in his employ, equal to 8
percent of the wages (as defined in section 3121(a)) paid by
him with respect to employment (as defined in section 3121(b)).
``(2) Special rules for small employers.--
``(A) In general.--In the case of any employer who
is small employer for any calendar year, paragraph (1)
shall be applied by substituting the applicable
percentage determined in accordance with the following
table for `8 percent':
``If the annual payroll of such The applicable percentage is:
employer for the preceding calendar
year:
Does not exceed $500,000............. 0 percent
Exceeds $500,000, but does not exceed 2 percent
$585,000.
Exceeds $585,000, but does not exceed 4 percent
$670,000.
Exceeds $670,000, but does not exceed 6 percent
$750,000.
``(B) Small employer.--For purposes of this
paragraph, the term `small employer' means any employer
for any calendar year if the annual payroll of such
employer for the preceding calendar year does not
exceed $750,000.
``(C) Annual payroll.--For purposes of this
paragraph, the term `annual payroll' means, with
respect to any employer for any calendar year, the
aggregate wages (as defined in section 3121(a)) paid by
him with respect to employment (as defined in section
3121(b)) during such calendar year.
``(3) Nonelecting employer.--For purposes of paragraph (1),
the term `nonelecting employer' means any employer for any
period with respect to which such employer does not have an
election under section 4980H(a) in effect.
``(4) Special rule for separate elections.--In the case of
an employer who makes a separate election described in section
4980H(a)(4) for any period, paragraph (1) shall be applied for
such period by taking into account only the wages paid to
employees who are not subject to such election.
``(5) Aggregation; predecessors.--For purposes of this
subsection--
``(A) all persons treated as a single employer
under subsection (b), (c), (m), or (o) of section 414
shall be treated as 1 employer, and
``(B) any reference to any person shall be treated
as including a reference to any predecessor of such
person.''.
(b) Definitions.--Section 3121 of such Code is amended by adding at
the end the following new subsection:
``(aa) Special Rules for Tax on Employers Electing Not to Provide
Health Benefits.--For purposes of section 3111(c)--
``(1) Paragraphs (1), (5), and (19) of subsection (b) shall
not apply.
``(2) Paragraph (7) of subsection (b) shall apply by
treating all services as not covered by the retirement systems
referred to in subparagraphs (C) and (F) thereof.
``(3) Subsection (e) shall not apply and the term `State'
shall include the District of Columbia.''.
(c) Conforming Amendment.--Subsection (d) of section 3111 of such
Code, as redesignated by this section, is amended by striking ``this
section'' and inserting ``subsections (a) and (b)''.
(d) Application to Railroads.--
(1) In general.--Section 3221 of such Code is amended by
redesignating subsection (c) as subsection (d) and by inserting
after subsection (b) the following new subsection:
``(c) Employers Electing Not to Provide Health Benefits.--
``(1) In general.--In addition to other taxes, there is
hereby imposed on every nonelecting employer an excise tax,
with respect to having individuals in his employ, equal to 8
percent of the compensation paid during any calendar year by
such employer for services rendered to such employer.
``(2) Exception for small employers.--Rules similar to the
rules of section 3111(c)(2) shall apply for purposes of this
subsection.
``(3) Nonelecting employer.--For purposes of paragraph (1),
the term `nonelecting employer' means any employer for any
period with respect to which such employer does not have an
election under section 4980H(a) in effect.
``(4) Special rule for separate elections.--In the case of
an employer who makes a separate election described in section
4980H(a)(4) for any period, subsection (a) shall be applied for
such period by taking into account only the compensation paid
to employees who are not subject to such election.''.
(2) Definitions.--Subsection (e) of section 3231 of such
Code is amended by adding at the end the following new
paragraph:
``(13) Special rules for tax on employers electing not to
provide health benefits.--For purposes of section 3221(c)--
``(A) Paragraph (1) shall be applied without regard
to the third sentence thereof.
``(B) Paragraph (2) shall not apply.''.
(3) Conforming amendment.--Subsection (d) of section 3221
of such Code, as redesignated by this section, is amended by
striking ``subsections (a) and (b), see section 3231(e)(2)''
and inserting ``this section, see paragraphs (2) and (13)(B) of
section 3231(e)''.
(e) Effective Date.--The amendments made by this section shall
apply to periods beginning after December 31, 2012.
PART 2--CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES
SEC. 521. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by adding at the end the following new section:
``SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COVERAGE CREDIT.
``(a) In General.--For purposes of section 38, in the case of a
qualified small employer, the small business employee health coverage
credit determined under this section for the taxable year is an amount
equal to the applicable percentage of the qualified employee health
coverage expenses of such employer for such taxable year.
``(b) Applicable Percentage.--
``(1) In general.--For purposes of this section, the
applicable percentage is 50 percent.
``(2) Phaseout based on average compensation of
employees.--In the case of an employer whose average annual
employee compensation for the taxable year exceeds $20,000, the
percentage specified in paragraph (1) shall be reduced by a
number of percentage points which bears the same ratio to 50 as
such excess bears to $20,000.
``(c) Limitations.--
``(1) Phaseout based on employer size.--In the case of an
employer who employs more than 10 qualified employees during
the taxable year, the credit determined under subsection (a)
shall be reduced by an amount which bears the same ratio to the
amount of such credit (determined without regard to this
paragraph and after the application of the other provisions of
this section) as--
``(A) the excess of--
``(i) the number of qualified employees
employed by the employer during the taxable
year, over
``(ii) 10, bears to
``(B) 15.
``(2) Credit not allowed with respect to certain highly
compensated employees.--No credit shall be determined under
subsection (a) with respect to qualified employee health
coverage expenses paid or incurred with respect to any employee
for any taxable year if the aggregate compensation paid by the
employer to such employee during such taxable year exceeds
$80,000.
``(3) Credit allowed for only 2 taxable years.--No credit
shall be determined under subsection (a) with respect to any
employer for any taxable year unless the employer elects to
have this section apply for such taxable year. An employer may
elect the application of this section with respect to not more
than 2 taxable years.
``(d) Qualified Employee Health Coverage Expenses.--For purposes of
this section--
``(1) In general.--The term `qualified employee health
coverage expenses' means, with respect to any employer for any
taxable year, the aggregate amount paid or incurred by such
employer during such taxable year for coverage of any qualified
employee of the employer (including any family coverage which
covers such employee) under qualified health coverage.
``(2) Qualified health coverage.--The term `qualified
health coverage' means acceptable coverage (as defined in
section 59B(d)) which--
``(A) is provided pursuant to an election under
section 4980H(a), and
``(B) satisfies the requirements referred to in
section 4980H(c).
``(e) Other Definitions.--For purposes of this section--
``(1) Qualified small employer.--For purposes of this
section, the term `qualified small employer' means any employer
for any taxable year if--
``(A) the number of qualified employees employed by
such employer during the taxable year does not exceed
25, and
``(B) the average annual employee compensation of
such employer for such taxable year does not exceed the
sum of the dollar amounts in effect under subsection
(b)(2).
``(2) Qualified employee.--The term `qualified employee'
means any employee of an employer for any taxable year of the
employer if such employee received at least $5,000 of
compensation from such employer for services performed in the
trade or business of such employer during such taxable year.
``(3) Average annual employee compensation.--The term
`average annual employee compensation' means, with respect to
any employer for any taxable year, the average amount of
compensation paid by such employer to qualified employees of
such employer during such taxable year.
``(4) Compensation.--The term `compensation' has the
meaning given such term in section 408(p)(6)(A).
``(5) Family coverage.--The term `family coverage' means
any coverage other than self-only coverage.
``(f) Special Rules.--For purposes of this section--
``(1) Special rule for partnerships and self-employed.--In
the case of a partnership (or a trade or business carried on by
an individual) which has one or more qualified employees
(determined without regard to this paragraph) with respect to
whom the election under section 4980H(a) applies, each partner
(or, in the case of a trade or business carried on by an
individual, such individual) shall be treated as an employee.
``(2) Aggregation rule.--All persons treated as a single
employer under subsection (b), (c), (m), or (o) of section 414
shall be treated as 1 employer.
``(3) Predecessors.--Any reference in this section to an
employer shall include a reference to any predecessor of such
employer.
``(4) Denial of double benefit.--Any deduction otherwise
allowable with respect to amounts paid or incurred for health
insurance coverage to which subsection (a) applies shall be
reduced by the amount of the credit determined under this
section.
``(5) Inflation adjustment.--In the case of any taxable
year beginning after 2013, each of the dollar amounts in
subsections (b)(2), (c)(2), and (e)(2) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost of living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins determined by substituting
`calendar year 2012' for `calendar year 1992' in
subparagraph (B) thereof.
If any increase determined under this paragraph is not a
multiple of $50, such increase shall be rounded to the next
lowest multiple of $50.''.
(b) Credit to Be Part of General Business Credit.--Subsection (b)
of section 38 of such Code (relating to general business credit) is
amended by striking ``plus'' at the end of paragraph (34), by striking
the period at the end of paragraph (35) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(36) in the case of a qualified small employer (as
defined in section 45R(e)), the small business employee health
coverage credit determined under section 45R(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 45Q the following new
item:
``Sec. 45R. Small business employee health coverage credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2012.
PART 3--LIMITATIONS ON HEALTH CARE RELATED EXPENDITURES
SEC. 531. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED
DRUG OR INSULIN.
(a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal
Revenue Code of 1986 is amended by adding at the end the following:
``Such term shall include an amount paid for medicine or a drug only if
such medicine or drug is a prescribed drug or is insulin.''.
(b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of such
Code is amended by adding at the end the following: ``Such term shall
include an amount paid for medicine or a drug only if such medicine or
drug is a prescribed drug or is insulin.''.
(c) Health Flexible Spending Arrangements and Health Reimbursement
Arrangements.--Section 106 of such Code is amended by adding at the end
the following new subsection:
``(f) Reimbursements for Medicine Restricted to Prescribed Drugs
and Insulin.--For purposes of this section and section 105,
reimbursement for expenses incurred for a medicine or a drug shall be
treated as a reimbursement for medical expenses only if such medicine
or drug is a prescribed drug or is insulin.''.
(d) Effective Dates.--The amendment made by this section shall
apply to expenses incurred after December 31, 2010.
SEC. 532. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER
CAFETERIA PLANS.
(a) In General.--Section 125 of the Internal Revenue Code of 1986
is amended--
(1) by redesignating subsections (i) and (j) as subsections
(j) and (k), respectively; and
(2) by inserting after subsection (h) the following new
subsection:
``(i) Limitation on Health Flexible Spending Arrangements.--
``(1) In general.--For purposes of this section, if a
benefit is provided under a cafeteria plan through employer
contributions to a health flexible spending arrangement, such
benefit shall not be treated as a qualified benefit unless the
cafeteria plan provides that an employee may not elect for any
taxable year to have salary reduction contributions in excess
of $2,500 made to such arrangement.
``(2) Inflation adjustment.--In the case of any taxable
year beginning after 2013, the dollar amount in paragraph (1)
shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost of living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins determined by substituting
`calendar year 2012' for `calendar year 1992' in
subparagraph (B) thereof.
If any increase determined under this paragraph is not a
multiple of $50, such increase shall be rounded to the next
lowest multiple of $50.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2012.
SEC. 533. INCREASE IN PENALTY FOR NONQUALIFIED DISTRIBUTIONS FROM
HEALTH SAVINGS ACCOUNTS.
(a) In General.--Subparagraph (A) of section 223(f)(4) of the
Internal Revenue Code of 1986 is amended by striking ``10 percent'' and
inserting ``20 percent''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2010.
SEC. 534. DENIAL OF DEDUCTION FOR FEDERAL SUBSIDIES FOR PRESCRIPTION
DRUG PLANS WHICH HAVE BEEN EXCLUDED FROM GROSS INCOME.
(a) In General.--Section 139A of the Internal Revenue Code of 1986
is amended by striking the second sentence.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2012.
PART 4--OTHER PROVISIONS TO CARRY OUT HEALTH INSURANCE REFORM
SEC. 541. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.
(a) In General.--Subsection (l) of section 6103 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(21) Disclosure of return information to carry out health
insurance exchange subsidies.--
``(A) In general.--The Secretary, upon written
request from the Health Choices Commissioner or the
head of a State-based health insurance exchange
approved for operation under section 308 of the
Affordable Health Care for America Act, shall disclose
to officers and employees of the Health Choices
Administration or such State-based health insurance
exchange, as the case may be, return information of any
taxpayer whose income is relevant in determining any
affordability credit described in subtitle C of title
III of the Affordable Health Care for America Act. Such
return information shall be limited to--
``(i) taxpayer identity information with
respect to such taxpayer,
``(ii) the filing status of such taxpayer,
``(iii) the modified adjusted gross income
of such taxpayer (as defined in section
59B(e)(5)),
``(iv) the number of dependents of the
taxpayer,
``(v) such other information as is
prescribed by the Secretary by regulation as
might indicate whether the taxpayer is eligible
for such affordability credits (and the amount
thereof), and
``(vi) the taxable year with respect to
which the preceding information relates or, if
applicable, the fact that such information is
not available.
``(B) Restriction on use of disclosed
information.--Return information disclosed under
subparagraph (A) may be used by officers and employees
of the Health Choices Administration or such State-
based health insurance exchange, as the case may be,
only for the purposes of, and to the extent necessary
in, establishing and verifying the appropriate amount
of any affordability credit described in subtitle C of
title III of the Affordable Health Care for America Act
and providing for the repayment of any such credit
which was in excess of such appropriate amount.''.
(b) Procedures and Recordkeeping Related to Disclosures.--Paragraph
(4) of section 6103(p) of such Code is amended--
(1) by inserting ``, or any entity described in subsection
(l)(21),'' after ``or (20)'' in the matter preceding
subparagraph (A);
(2) by inserting ``or any entity described in subsection
(l)(21),'' after ``or (o)(1)(A),'' in subparagraph (F)(ii); and
(3) by inserting ``or any entity described in subsection
(l)(21),'' after ``or (20),'' both places it appears in the
matter after subparagraph (F).
(c) Unauthorized Disclosure or Inspection.--Paragraph (2) of
section 7213(a) of such Code is amended by striking ``or (20)'' and
inserting ``(20), or (21)''.
SEC. 542. OFFERING OF EXCHANGE-PARTICIPATING HEALTH BENEFITS PLANS
THROUGH CAFETERIA PLANS.
(a) In General.--Subsection (f) of section 125 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(3) Certain exchange-participating health benefits plans
not qualified.--
``(A) In general.--The term `qualified benefit'
shall not include any exchange-participating health
benefits plan (as defined in section 101(c) of the
Affordable Health Care for America Act).
``(B) Exception for exchange-eligible employers.--
Subparagraph (A) shall not apply with respect to any
employee if such employee's employer is an exchange-
eligible employer (as defined in section 302 of the
Affordable Health Care for America Act).''.
(b) Conforming Amendments.--Subsection (f) of section 125 of such
Code is amended--
(1) by striking ``For purposes of this section, the term''
and inserting ``For purposes of this section--
``(1) In General.--The term''; and
(2) by striking ``Such term shall not include'' and
inserting the following:
``(2) Long-term care insurance not qualified.--The term
`qualified benefit' shall not include''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2012.
SEC. 543. EXCLUSION FROM GROSS INCOME OF PAYMENTS MADE UNDER
REINSURANCE PROGRAM FOR RETIREES.
(a) In General.--Section 139A of the Internal Revenue Code of 1986
is amended--
(1) by striking ``Gross income'' and inserting the
following:
``(a) Federal Subsidies for Prescription Drug Plans.--Gross
income''; and
(2) by adding at the end the following new subsection:
``(b) Federal Reinsurance Program for Retirees.--A rule similar to
the rule of subsection (a) shall apply with respect to payments made
under section 111 of the Affordable Health Care for America Act.''.
(b) Conforming Amendment.--The heading of section 139A of such Code
(and the item relating to such section in the table of sections for
part III of subchapter B of chapter 1 of such Code) is amended by
inserting ``and retiree health plans'' after ``prescription drug
plans''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 544. CLASS PROGRAM TREATED IN SAME MANNER AS LONG-TERM CARE
INSURANCE.
(a) In General.--Subsection (f) of section 7702B of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``State long-term care plan'' in paragraph
(1)(A) and inserting ``government long-term care plan'';
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (2) the following new
paragraph:
``(2) Government long-term care plan.--For purposes of this
subsection, the term `government long-term care plan' means--
``(A) the CLASS program established under title
XXXII of the Public Health Service Act, and
``(B) any State long-term care plan.''.
(b) Conforming Amendments.--
(1) Paragraph (3) of section 7702B(f) of such Code, as
redesignated by subsection (a), is amended by striking
``paragraph (1)'' and inserting ``this subsection''.
(2) Subsection (f) of section 7702(B) of such Code is
amended by striking ``State-maintained'' in the heading thereof
and inserting ``Government''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2010.
SEC. 545. EXCLUSION FROM GROSS INCOME FOR MEDICAL CARE PROVIDED FOR
INDIANS.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to items specifically excluded
from gross income) is amended by inserting after section 139C the
following new section:
``SEC. 139D. MEDICAL CARE PROVIDED FOR INDIANS.
``(a) In General.--Gross income does not include--
``(1) health services or benefits provided or purchased by
the Indian Health Service, either directly or indirectly,
through a grant to or a contract or compact with an Indian
tribe or tribal organization or through programs of third
parties funded by the Indian Health Service,
``(2) medical care provided by an Indian tribe or tribal
organization to a member of an Indian tribe (including for this
purpose, to the member's spouse or dependents) through any one
of the following: provided or purchased medical care services;
accident or health insurance (or an arrangement having the
effect of accident or health insurance); or amounts paid,
directly or indirectly, to reimburse the member for expenses
incurred for medical care,
``(3) the value of accident or health plan coverage
provided by an Indian tribe or tribal organization for medical
care to a member of an Indian tribe (including for this
purpose, coverage that extends to such member's spouse or
dependents) under an accident or health plan (or through an
arrangement having the effect of accident or health insurance),
and
``(4) any other medical care provided by an Indian tribe
that supplements, replaces, or substitutes for the programs and
services provided by the Federal Government to Indian tribes or
Indians.
``(b) Definitions.--For purposes of this section--
``(1) In general.--The terms `accident or health insurance'
and `accident or health plan' have the same meaning as when
used in sections 104 and 106.
``(2) Medical care.--The term `medical care' has the
meaning given such term in section 213.
``(3) Dependent.--The term `dependent' has the meaning
given such term in section 152, determined without regard to
subsections (b)(1), (b)(2), and (d)(1)(B).
``(4) Indian tribe.--The term `Indian tribe' means any
Indian tribe, band, nation, pueblo, or other organized group or
community, including any Alaska Native village, or regional or
village corporation, as defined in, or established pursuant to,
the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et
seq.), which is recognized as eligible for the special programs
and services provided by the United States to Indians because
of their status as Indians.
``(5) Tribal organization.--The term `tribal organization'
has the meaning given such term in section 4(l) of the Indian
Self-Determination and Education Assistance Act (25 U.S.C.
450b(l)).''.
(b) Clerical Amendment.--The table of sections for such part III is
amended by inserting after the item relating to section 139C the
following new item:
``Sec. 139D. Medical care provided for Indians.''.
(c) Effective Date.--The amendments made by this section shall
apply to health benefits and coverage provided after the date of
enactment of this Act.
(d) No Inference.--Nothing in the amendments made by this section
shall be construed to create an inference with respect to the exclusion
from gross income of--
(1) benefits provided by Indian tribes that are not within
the scope of this section; and
(2) health benefits or coverage provided by Indian tribes
prior to the effective date of this section.
Subtitle B--Other Revenue Provisions
PART 1--GENERAL PROVISIONS
SEC. 551. SURCHARGE ON HIGH INCOME INDIVIDUALS.
(a) In General.--Part VIII of subchapter A of chapter 1 of the
Internal Revenue Code of 1986, as added by this title, is amended by
adding at the end the following new subpart:
``Subpart B--Surcharge on High Income Individuals
``Sec. 59C. Surcharge on high income individuals.
``SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.
``(a) General Rule.--In the case of a taxpayer other than a
corporation, there is hereby imposed (in addition to any other tax
imposed by this subtitle) a tax equal to 5.4 percent of so much of the
modified adjusted gross income of the taxpayer as exceeds $1,000,000.
``(b) Taxpayers Not Making a Joint Return.--In the case of any
taxpayer other than a taxpayer making a joint return under section 6013
or a surviving spouse (as defined in section 2(a)), subsection (a)
shall be applied by substituting `$500,000' for `$1,000,000'.
``(c) Modified Adjusted Gross Income.--For purposes of this
section, the term `modified adjusted gross income' means adjusted gross
income reduced by any deduction (not taken into account in determining
adjusted gross income) allowed for investment interest (as defined in
section 163(d)). In the case of an estate or trust, adjusted gross
income shall be determined as provided in section 67(e).
``(d) Special Rules.--
``(1) Nonresident alien.--In the case of a nonresident
alien individual, only amounts taken into account in connection
with the tax imposed under section 871(b) shall be taken into
account under this section.
``(2) Citizens and residents living abroad.--The dollar
amount in effect under subsection (a) (after the application of
subsection (b)) shall be decreased by the excess of--
``(A) the amounts excluded from the taxpayer's
gross income under section 911, over
``(B) the amounts of any deductions or exclusions
disallowed under section 911(d)(6) with respect to the
amounts described in subparagraph (A).
``(3) Charitable trusts.--Subsection (a) shall not apply to
a trust all the unexpired interests in which are devoted to one
or more of the purposes described in section 170(c)(2)(B).
``(4) Not treated as tax imposed by this chapter for
certain purposes.--The tax imposed under this section shall not
be treated as tax imposed by this chapter for purposes of
determining the amount of any credit under this chapter or for
purposes of section 55.''.
(b) Clerical Amendment.--The table of subparts for part VIII of
subchapter A of chapter 1 of such Code, as added by this title, is
amended by inserting after the item relating to subpart A the following
new item:
``subpart b. surcharge on high income individuals.''.
(c) Section 15 Not to Apply.--The amendment made by subsection (a)
shall not be treated as a change in a rate of tax for purposes of
section 15 of the Internal Revenue Code of 1986.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2010.
SEC. 552. EXCISE TAX ON MEDICAL DEVICES.
(a) In General.--Chapter 31 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subchapter:
``Subchapter D--Medical Devices
``Sec. 4061. Medical devices.
``SEC. 4061. MEDICAL DEVICES.
``(a) In General.--There is hereby imposed on the first taxable
sale of any medical device a tax equal to 2.5 percent of the price for
which so sold.
``(b) First Taxable Sale.--For purposes of this section--
``(1) In general.--The term `first taxable sale' means the
first sale, for a purpose other than for resale, after
production, manufacture, or importation.
``(2) Exception for sales at retail establishments.--Such
term shall not include the sale of any medical device if--
``(A) such sale is made at a retail establishment
on terms which are available to the general public, and
``(B) such medical device is of a type (and
purchased in a quantity) which is purchased by the
general public.
``(3) Exception for exports, etc.--Rules similar to the
rules of sections 4221 (other than paragraphs (3), (4), (5),
and (6) of subsection (a) thereof) and 4222 shall apply for
purposes of this section. To the extent provided by the
Secretary, section 4222 may be extended to, and made applicable
with respect to, the exemption provided by paragraph (2).
``(4) Sales to patients not treated as resales.--If a
medical device is sold for use in connection with providing any
health care service to an individual, such sale shall not be
treated as being for the purpose of resale (even if such device
is sold to such individual).
``(c) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Medical device.--The term `medical device' means any
device (as defined in section 201(h) of the Federal Food, Drug,
and Cosmetic Act) intended for humans.
``(2) Lease treated as sale.--Rules similar to the rules of
section 4217 shall apply.
``(3) Use treated as sale.--
``(A) In general.--If any person uses a medical
device before the first taxable sale of such device,
then such person shall be liable for tax under such
subsection in the same manner as if such use were the
first taxable sale of such device.
``(B) Exceptions.--The preceding sentence shall not
apply to--
``(i) use of a medical device as material
in the manufacture or production of, or as a
component part of, another medical device to be
manufactured or produced by such person, or
``(ii) use of a medical device after a sale
described in subsection (b)(2).
``(4) Determination of price.--
``(A) In general.--Rules similar to the rules of
subsections (a), (c), and (d) of section 4216 shall
apply for purposes of this section.
``(B) Constructive sale price.--If--
``(i) a medical device is sold (otherwise
than through an arm's length transaction) at
less than the fair market price, or
``(ii) a person is liable for tax for a use
described in paragraph (3),
the tax under this section shall be computed on the
price for which such or similar devices are sold in the
ordinary course of trade as determined by the
Secretary.
``(5) Resales pursuant to certain contract arrangements.--
``(A) In general.--In the case of a specified
contract sale of a medical device, the seller referred
to in subparagraph (B)(i) shall be entitled to recover
from the producer, manufacturer, or importer referred
to in subparagraph (B)(ii) the amount of the tax paid
by such seller under this section with respect to such
sale.
``(B) Specified contract sale.--For purposes of
this paragraph, the term `specified contract sale'
means, with respect to any medical device, the first
taxable sale of such device if--
``(i) the seller is not the producer,
manufacturer, or importer of such device, and
``(ii) the price at which such device is so
sold is determined in accordance with a
contract between the producer, manufacturer, or
importer of such device and the person to whom
such device is so sold.
``(C) Special rules related to credits and
refunds.--In the case of any credit or refund under
section 6416 of the tax imposed under this section on a
specified contract sale of a medical device--
``(i) such credit or refund shall be
allowed or made only if the seller has filed
with the Secretary the written consent of the
producer, manufacturer, or importer referred to
in subparagraph (B)(ii) to the allowance of
such credit or the making of such refund, and
``(ii) the amount of tax taken into account
under subparagraph (A) shall be reduced by the
amount of such credit or refund.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 6416(b) of such Code is
amended--
(A) by inserting ``or 4061'' after ``under section
4051''; and
(B) by adding at the end the following: ``In the
case of the tax imposed by section 4061, subparagraphs
(B), (C), (D), and (E) shall not apply.''.
(2) The table of subchapters for chapter 31 of such Code is
amended by adding at the end the following new item:
``subchapter d. medical devices.''.
(c) Effective Date.--The amendments made by this section shall
apply to sales (and leases and uses treated as sales) after December
31, 2012.
SEC. 553. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.
(a) In General.--Section 6041 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsections:
``(h) Application to Corporations.--Notwithstanding any regulation
prescribed by the Secretary before the date of the enactment of this
subsection, for purposes of this section the term `person' includes any
corporation that is not an organization exempt from tax under section
501(a).
``(i) Regulations.--The Secretary may prescribe such regulations
and other guidance as may be appropriate or necessary to carry out the
purposes of this section, including rules to prevent duplicative
reporting of transactions.''.
(b) Payments for Property and Other Gross Proceeds.--Subsection (a)
of section 6041 of the Internal Revenue Code of 1986 is amended--
(1) by inserting ``amounts in consideration for property,''
after ``wages,'';
(2) by inserting ``gross proceeds,'' after ``emoluments, or
other''; and
(3) by inserting ``gross proceeds,'' after ``setting forth
the amount of such''.
(c) Effective Date.--The amendments made by this section shall
apply to payments made after December 31, 2011.
SEC. 554. REPEAL OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Section 864 of the Internal Revenue Code of 1986
is amended by striking subsection (f) and by redesignating subsection
(g) as subsection (f).
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2010.
SEC. 555. EXCLUSION OF UNPROCESSED FUELS FROM THE CELLULOSIC BIOFUEL
PRODUCER CREDIT.
(a) In General.--Subparagraph (E) of section 40(b)(6) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new clause:
``(iii) Exclusion of unprocessed fuels.--
The term `cellulosic biofuel' shall not include
any fuel if--
``(I) more than 4 percent of such
fuel (determined by weight) is any
combination of water and sediment, or
``(II) the ash content of such fuel
is more than 1 percent (determined by
weight).''.
(b) Effective Date.--The amendment made by this section shall apply
to fuels sold or used after the date of the enactment of this Act.
PART 2--PREVENTION OF TAX AVOIDANCE
SEC. 561. LIMITATION ON TREATY BENEFITS FOR CERTAIN DEDUCTIBLE
PAYMENTS.
(a) In General.--Section 894 of the Internal Revenue Code of 1986
(relating to income affected by treaty) is amended by adding at the end
the following new subsection:
``(d) Limitation on Treaty Benefits for Certain Deductible
Payments.--
``(1) In general.--In the case of any deductible related-
party payment, any withholding tax imposed under chapter 3 (and
any tax imposed under subpart A or B of this part) with respect
to such payment may not be reduced under any treaty of the
United States unless any such withholding tax would be reduced
under a treaty of the United States if such payment were made
directly to the foreign parent corporation.
``(2) Deductible related-party payment.--For purposes of
this subsection, the term `deductible related-party payment'
means any payment made, directly or indirectly, by any person
to any other person if the payment is allowable as a deduction
under this chapter and both persons are members of the same
foreign controlled group of entities.
``(3) Foreign controlled group of entities.--For purposes
of this subsection--
``(A) In general.--The term `foreign controlled
group of entities' means a controlled group of entities
the common parent of which is a foreign corporation.
``(B) Controlled group of entities.--The term
`controlled group of entities' means a controlled group
of corporations as defined in section 1563(a)(1),
except that--
``(i) `more than 50 percent' shall be
substituted for `at least 80 percent' each
place it appears therein, and
``(ii) the determination shall be made
without regard to subsections (a)(4) and (b)(2)
of section 1563.
A partnership or any other entity (other than a
corporation) shall be treated as a member of a
controlled group of entities if such entity is
controlled (within the meaning of section 954(d)(3)) by
members of such group (including any entity treated as
a member of such group by reason of this sentence).
``(4) Foreign parent corporation.--For purposes of this
subsection, the term `foreign parent corporation' means, with
respect to any deductible related-party payment, the common
parent of the foreign controlled group of entities referred to
in paragraph (3)(A).
``(5) Regulations.--The Secretary may prescribe such
regulations or other guidance as are necessary or appropriate
to carry out the purposes of this subsection, including
regulations or other guidance which provide for--
``(A) the treatment of two or more persons as
members of a foreign controlled group of entities if
such persons would be the common parent of such group
if treated as one corporation, and
``(B) the treatment of any member of a foreign
controlled group of entities as the common parent of
such group if such treatment is appropriate taking into
account the economic relationships among such
entities.''.
(b) Effective Date.--The amendment made by this section shall apply
to payments made after the date of the enactment of this Act.
SEC. 562. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE; PENALTIES.
(a) In General.--Section 7701 of the Internal Revenue Code of 1986
is amended by redesignating subsection (o) as subsection (p) and by
inserting after subsection (n) the following new subsection:
``(o) Clarification of Economic Substance Doctrine.--
``(1) Application of doctrine.--In the case of any
transaction to which the economic substance doctrine is
relevant, such transaction shall be treated as having economic
substance only if--
``(A) the transaction changes in a meaningful way
(apart from Federal income tax effects) the taxpayer's
economic position, and
``(B) the taxpayer has a substantial purpose (apart
from Federal income tax effects) for entering into such
transaction.
``(2) Special rule where taxpayer relies on profit
potential.--
``(A) In general.--The potential for profit of a
transaction shall be taken into account in determining
whether the requirements of subparagraphs (A) and (B)
of paragraph (1) are met with respect to the
transaction only if the present value of the reasonably
expected pre-tax profit from the transaction is
substantial in relation to the present value of the
expected net tax benefits that would be allowed if the
transaction were respected.
``(B) Treatment of fees and foreign taxes.--Fees
and other transaction expenses and foreign taxes shall
be taken into account as expenses in determining pre-
tax profit under subparagraph (A).
``(3) State and local tax benefits.--For purposes of
paragraph (1), any State or local income tax effect which is
related to a Federal income tax effect shall be treated in the
same manner as a Federal income tax effect.
``(4) Financial accounting benefits.--For purposes of
paragraph (1)(B), achieving a financial accounting benefit
shall not be taken into account as a purpose for entering into
a transaction if the origin of such financial accounting
benefit is a reduction of Federal income tax.
``(5) Definitions and special rules.--For purposes of this
subsection--
``(A) Economic substance doctrine.--The term
`economic substance doctrine' means the common law
doctrine under which tax benefits under subtitle A with
respect to a transaction are not allowable if the
transaction does not have economic substance or lacks a
business purpose.
``(B) Exception for personal transactions of
individuals.--In the case of an individual, paragraph
(1) shall apply only to transactions entered into in
connection with a trade or business or an activity
engaged in for the production of income.
``(C) Other common law doctrines not affected.--
Except as specifically provided in this subsection, the
provisions of this subsection shall not be construed as
altering or supplanting any other rule of law, and the
requirements of this subsection shall be construed as
being in addition to any such other rule of law.
``(D) Determination of application of doctrine not
affected.--The determination of whether the economic
substance doctrine is relevant to a transaction (or
series of transactions) shall be made in the same
manner as if this subsection had never been enacted.
``(6) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out the
purposes of this subsection.''.
(b) Penalty for Underpayments Attributable to Transactions Lacking
Economic Substance.--
(1) In general.--Subsection (b) of section 6662 of such
Code is amended by inserting after paragraph (5) the following
new paragraph:
``(6) Any disallowance of claimed tax benefits by reason of
a transaction lacking economic substance (within the meaning of
section 7701(o)) or failing to meet the requirements of any
similar rule of law.''.
(2) Increased penalty for nondisclosed transactions.--
Section 6662 of such Code is amended by adding at the end the
following new subsection:
``(i) Increase in Penalty in Case of Nondisclosed Noneconomic
Substance Transactions.--
``(1) In general.--In the case of any portion of an
underpayment which is attributable to one or more nondisclosed
noneconomic substance transactions, subsection (a) shall be
applied with respect to such portion by substituting `40
percent' for `20 percent'.
``(2) Nondisclosed noneconomic substance transactions.--For
purposes of this subsection, the term `nondisclosed noneconomic
substance transaction' means any portion of a transaction
described in subsection (b)(6) with respect to which the
relevant facts affecting the tax treatment are not adequately
disclosed in the return nor in a statement attached to the
return.
``(3) Special rule for amended returns.--Except as provided
in regulations, in no event shall any amendment or supplement
to a return of tax be taken into account for purposes of this
subsection if the amendment or supplement is filed after the
earlier of the date the taxpayer is first contacted by the
Secretary regarding the examination of the return or such other
date as is specified by the Secretary.''.
(3) Conforming amendment.--Subparagraph (B) of section
6662A(e)(2) of such Code is amended--
(A) by striking ``section 6662(h)'' and inserting
``subsections (h) or (i) of section 6662''; and
(B) by striking ``gross valuation misstatement
penalty'' in the heading and inserting ``certain
increased underpayment penalties''.
(c) Reasonable Cause Exception Not Applicable to Noneconomic
Substance Transactions and Tax Shelters.--
(1) Reasonable cause exception for underpayments.--
Subsection (c) of section 6664 of such Code is amended--
(A) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively;
(B) by striking ``paragraph (2)'' in paragraph
(4)(A), as so redesignated, and inserting ``paragraph
(3)''; and
(C) by inserting after paragraph (1) the following
new paragraph:
``(2) Exception.--Paragraph (1) shall not apply to any
portion of an underpayment which is attributable to one or more
tax shelters (as defined in section 6662(d)(2)(C)) or
transactions described in section 6662(b)(6).''.
(2) Reasonable cause exception for reportable transaction
understatements.--Subsection (d) of section 6664 of such Code
is amended--
(A) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively;
(B) by striking ``paragraph (2)(C)'' in paragraph
(4), as so redesignated, and inserting ``paragraph
(3)(C)''; and
(C) by inserting after paragraph (1) the following
new paragraph:
``(2) Exception.--Paragraph (1) shall not apply to any
portion of a reportable transaction understatement which is
attributable to one or more tax shelters (as defined in section
6662(d)(2)(C)) or transactions described in section
6662(b)(6).''.
(d) Application of Penalty for Erroneous Claim for Refund or Credit
to Noneconomic Substance Transactions.--Section 6676 of such Code is
amended by redesignating subsection (c) as subsection (d) and inserting
after subsection (b) the following new subsection:
``(c) Noneconomic Substance Transactions Treated as Lacking
Reasonable Basis.--For purposes of this section, any excessive amount
which is attributable to any transaction described in section
6662(b)(6) shall not be treated as having a reasonable basis.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
transactions entered into after the date of the enactment of
this Act.
(2) Underpayments.--The amendments made by subsections (b)
and (c)(1) shall apply to underpayments attributable to
transactions entered into after the date of the enactment of
this Act.
(3) Understatements.--The amendments made by subsection
(c)(2) shall apply to understatements attributable to
transactions entered into after the date of the enactment of
this Act.
(4) Refunds and credits.--The amendment made by subsection
(d) shall apply to refunds and credits attributable to
transactions entered into after the date of the enactment of
this Act.
SEC. 563. CERTAIN LARGE OR PUBLICLY TRADED PERSONS MADE SUBJECT TO A
MORE LIKELY THAN NOT STANDARD FOR AVOIDING PENALTIES ON
UNDERPAYMENTS.
(a) In General.--Subsection (c) of section 6664 of the Internal
Revenue Code of 1986, as amended by section 562, is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(2) by striking ``paragraph (3)'' in paragraph (4)(A), as
so redesignated, and inserting ``paragraph (4)''; and
(3) by inserting after paragraph (2) the following new
paragraph:
``(3) Special rule for certain large or publicly traded
persons.--
``(A) In general.--In the case of any specified
person, paragraph (1) shall apply to the portion of an
underpayment which is attributable to any item only if
such person has a reasonable belief that the tax
treatment of such item by such person is more likely
than not the proper tax treatment of such item.
``(B) Specified person.--For purposes of this
paragraph, the term `specified person' means--
``(i) any person required to file periodic
or other reports under section 13 of the
Securities Exchange Act of 1934, and
``(ii) any corporation with gross receipts
in excess of $100,000,000 for the taxable year
involved.
All persons treated as a single employer under section
52(a) shall be treated as one person for purposes of
clause (ii).''.
(b) Nonapplication of Substantial Authority and Reasonable Basis
Standards for Reducing Understatements.--Paragraph (2) of section
6662(d) of such Code is amended by adding at the end the following new
subparagraph:
``(D) Reduction not to apply to certain large or
publicly traded persons.--Subparagraph (B) shall not
apply to any specified person (as defined in section
6664(c)(3)(B)).''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to underpayments
attributable to transactions entered into after the date of the
enactment of this Act.
(2) Nonapplication of understatement reduction.--The
amendment made by subsection (b) shall apply to understatements
attributable to transactions entered into after the date of the
enactment of this Act.
PART 3--PARITY IN HEALTH BENEFITS
SEC. 571. CERTAIN HEALTH RELATED BENEFITS APPLICABLE TO SPOUSES AND
DEPENDENTS EXTENDED TO ELIGIBLE BENEFICIARIES.
(a) Application of Accident and Health Plans to Eligible
Beneficiaries.--
(1) Exclusion of contributions.--Section 106 of the
Internal Revenue Code of 1986 (relating to contributions by
employer to accident and health plans), as amended by section
531, is amended by adding at the end the following new
subsection:
``(g) Coverage Provided for Eligible Beneficiaries of Employees.--
``(1) In general.--Subsection (a) shall apply with respect
to any eligible beneficiary of the employee.
``(2) Eligible beneficiary.--For purposes of this
subsection, the term `eligible beneficiary' means any
individual who is eligible to receive benefits or coverage
under an accident or health plan.''.
(2) Exclusion of amounts expended for medical care.--The
first sentence of section 105(b) of such Code (relating to
amounts expended for medical care) is amended--
(A) by striking ``and his dependents'' and
inserting ``his dependents''; and
(B) by inserting before the period the following:
``and any eligible beneficiary (within the meaning of
section 106(g)) with respect to the taxpayer''.
(3) Payroll taxes.--
(A) Section 3121(a)(2) of such Code is amended--
(i) by striking ``or any of his
dependents'' in the matter preceding
subparagraph (A) and inserting ``, any of his
dependents, or any eligible beneficiary (within
the meaning of section 106(g)) with respect to
the employee'';
(ii) by striking ``or any of his
dependents,'' in subparagraph (A) and inserting
``, any of his dependents, or any eligible
beneficiary (within the meaning of section
106(g)) with respect to the employee,''; and
(iii) by striking ``and their dependents''
both places it appears and inserting ``and such
employees' dependents and eligible
beneficiaries (within the meaning of section
106(g))''.
(B) Section 3231(e)(1) of such Code is amended--
(i) by striking ``or any of his
dependents'' and inserting ``, any of his
dependents, or any eligible beneficiary (within
the meaning of section 106(g)) with respect to
the employee,''; and
(ii) by striking ``and their dependents''
both places it appears and inserting ``and such
employees' dependents and eligible
beneficiaries (within the meaning of section
106(g))''.
(C) Section 3306(b)(2) of such Code is amended--
(i) by striking ``or any of his
dependents'' in the matter preceding
subparagraph (A) and inserting ``, any of his
dependents, or any eligible beneficiary (within
the meaning of section 106(g)) with respect to
the employee,'';
(ii) by striking ``or any of his
dependents'' in subparagraph (A) and inserting
``, any of his dependents, or any eligible
beneficiary (within the meaning of section
106(g)) with respect to the employee''; and
(iii) by striking ``and their dependents''
both places it appears and inserting ``and such
employees' dependents and eligible
beneficiaries (within the meaning of section
106(g))''.
(D) Section 3401(a) of such Code is amended by
striking ``or'' at the end of paragraph (22), by
striking the period at the end of paragraph (23) and
inserting ``; or'', and by inserting after paragraph
(23) the following new paragraph:
``(24) for any payment made to or for the benefit of an
employee or any eligible beneficiary (within the meaning of
section 106(g)) if at the time of such payment it is reasonable
to believe that the employee will be able to exclude such
payment from income under section 106 or under section 105 by
reference in section 105(b) to section 106(g).''.
(b) Expansion of Dependency for Purposes of Deduction for Health
Insurance Costs of Self-employed Individuals.--
(1) In general.--Paragraph (1) of section 162(l) of the
Internal Revenue Code of 1986 (relating to special rules for
health insurance costs of self-employed individuals) is amended
to read as follows:
``(1) Allowance of deduction.--In the case of a taxpayer
who is an employee within the meaning of section 401(c)(1),
there shall be allowed as a deduction under this section an
amount equal to the amount paid during the taxable year for
insurance which constitutes medical care for--
``(A) the taxpayer,
``(B) the taxpayer's spouse,
``(C) the taxpayer's dependents,
``(D) any individual who--
``(i) satisfies the age requirements of
section 152(c)(3)(A),
``(ii) bears a relationship to the taxpayer
described in section 152(d)(2)(H), and
``(iii) meets the requirements of section
152(d)(1)(C), and
``(E) one individual who--
``(i) does not satisfy the age requirements
of section 152(c)(3)(A),
``(ii) bears a relationship to the taxpayer
described in section 152(d)(2)(H),
``(iii) meets the requirements of section
152(d)(1)(D), and
``(iv) is not the spouse of the taxpayer
and does not bear any relationship to the
taxpayer described in subparagraphs (A) through
(G) of section 152(d)(2).''.
(2) Conforming amendment.--Subparagraph (B) of section
162(l)(2) of such Code is amended by inserting ``, any
dependent, or individual described in subparagraph (D) or (E)
of paragraph (1) with respect to'' after ``spouse''.
(c) Extension to Eligible Beneficiaries of Sick and Accident
Benefits Provided to Members of a Voluntary Employees' Beneficiary
Association and Their Dependents.--Section 501(c)(9) of the Internal
Revenue Code of 1986 (relating to list of exempt organizations) is
amended by adding at the end the following new sentence: ``For purposes
of providing for the payment of sick and accident benefits to members
of such an association and their dependents, the term `dependents'
shall include any individual who is an eligible beneficiary (within the
meaning of section 106(g)), as determined under the terms of a medical
benefit, health insurance, or other program under which members and
their dependents are entitled to sick and accident benefits.''.
(d) Flexible Spending Arrangements and Health Reimbursement
Arrangements.--The Secretary of Treasury shall issue guidance of
general applicability providing that medical expenses that otherwise
qualify--
(1) for reimbursement from a flexible spending arrangement
under regulations in effect on the date of the enactment of
this Act may be reimbursed from an employee's flexible spending
arrangement, notwithstanding the fact that such expenses are
attributable to any individual who is not the employee's spouse
or dependent (within the meaning of section 105(b) of the
Internal Revenue Code of 1986) but is an eligible beneficiary
(within the meaning of section 106(g) of such Code) under the
flexible spending arrangement with respect to the employee; and
(2) for reimbursement from a health reimbursement
arrangement under regulations in effect on the date of the
enactment of this Act may be reimbursed from an employee's
health reimbursement arrangement, notwithstanding the fact that
such expenses are attributable to an individual who is not a
spouse or dependent (within the meaning of section 105(b) of
such Code) but is an eligible beneficiary (within the meaning
of section 106(g) of such Code) under the health reimbursement
arrangement with respect to the employee.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS
SEC. 1001. TABLE OF CONTENTS OF DIVISION.
The table of contents of this division is as follows:
Sec. 1001. Table of contents of division.
TITLE I--IMPROVING HEALTH CARE VALUE
Subtitle A--Provisions Related to Medicare Part A
Part 1--Market Basket Updates
Sec. 1101. Skilled nursing facility payment update.
Sec. 1102. Inpatient rehabilitation facility payment update.
Sec. 1103. Incorporating productivity improvements into market basket
updates that do not already incorporate
such improvements.
Part 2--Other Medicare Part A Provisions
Sec. 1111. Payments to skilled nursing facilities.
Sec. 1112. Medicare DSH report and payment adjustments in response to
coverage expansion.
Sec. 1113. Extension of hospice regulation moratorium.
Sec. 1114. Permitting physician assistants to order post-hospital
extended care services and to provide for
recognition of attending physician
assistants as attending physicians to serve
hospice patients.
Subtitle B--Provisions Related to Part B
Part 1--Physicians' Services
Sec. 1121. Resource-based feedback program for physicians in Medicare.
Sec. 1122. Misvalued codes under the physician fee schedule.
Sec. 1123. Payments for efficient areas.
Sec. 1124. Modifications to the Physician Quality Reporting Initiative
(PQRI).
Sec. 1125. Adjustment to Medicare payment localities.
Part 2--Market Basket Updates
Sec. 1131. Incorporating productivity improvements into market basket
updates that do not already incorporate
such improvements.
Part 3--Other Provisions
Sec. 1141. Rental and purchase of power-driven wheelchairs.
Sec. 1141A. Election to take ownership, or to decline ownership, of a
certain item of complex durable medical
equipment after the 13-month capped rental
period ends.
Sec. 1142. Extension of payment rule for brachytherapy.
Sec. 1143. Home infusion therapy report to Congress.
Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost
data and other data.
Sec. 1145. Treatment of certain cancer hospitals.
Sec. 1146. Payment for imaging services.
Sec. 1147. Durable medical equipment program improvements.
Sec. 1148. MedPAC study and report on bone mass measurement.
Sec. 1149. Timely access to post-mastectomy items.
Sec. 1149A. Payment for biosimilar biological products.
Sec. 1149B. Study and report on DME competitive bidding process.
Subtitle C--Provisions Related to Medicare Parts A and B
Sec. 1151. Reducing potentially preventable hospital readmissions.
Sec. 1152. Post acute care services payment reform plan and bundling
pilot program.
Sec. 1153. Home health payment update for 2010.
Sec. 1154. Payment adjustments for home health care.
Sec. 1155. Incorporating productivity improvements into market basket
update for home health services.
Sec. 1155A. MedPAC study on variation in home health margins.
Sec. 1155B. Permitting home health agencies to assign the most
appropriate skilled service to make the
initial assessment visit under a Medicare
home health plan of care for rehabilitation
cases.
Sec. 1156. Limitation on Medicare exceptions to the prohibition on
certain physician referrals made to
hospitals.
Sec. 1157. Institute of Medicine study of geographic adjustment factors
under Medicare.
Sec. 1158. Revision of medicare payment systems to address geographic
inequities.
Sec. 1159. Institute of Medicine study of geographic variation in
health care spending and promoting high-
value health care.
Sec. 1160. Implementation, and Congressional review, of proposal to
revise Medicare payments to promote high
value health care.
Subtitle D--Medicare Advantage Reforms
Part 1--Payment and Administration
Sec. 1161. Phase-in of payment based on fee-for-service costs; quality
bonus payments.
Sec. 1162. Authority for Secretarial coding intensity adjustment
authority.
Sec. 1163. Simplification of annual beneficiary election periods.
Sec. 1164. Extension of reasonable cost contracts.
Sec. 1165. Limitation of waiver authority for employer group plans.
Sec. 1166. Improving risk adjustment for payments.
Sec. 1167. Elimination of MA Regional Plan Stabilization Fund.
Sec. 1168. Study regarding the effects of calculating Medicare
Advantage payment rates on a regional
average of Medicare fee for service rates.
Part 2--Beneficiary Protections and Anti-Fraud
Sec. 1171. Limitation on cost-sharing for individual health services.
Sec. 1172. Continuous open enrollment for enrollees in plans with
enrollment suspension.
Sec. 1173. Information for beneficiaries on MA plan administrative
costs.
Sec. 1174. Strengthening audit authority.
Sec. 1175. Authority to deny plan bids.
Sec. 1175A. State authority to enforce standardized marketing
requirements.
Part 3--Treatment of Special Needs Plans
Sec. 1176. Limitation on enrollment outside open enrollment period of
individuals into chronic care specialized
MA plans for special needs individuals.
Sec. 1177. Extension of authority of special needs plans to restrict
enrollment; service area moratorium for
certain SNPs.
Sec. 1178. Extension of Medicare senior housing plans.
Subtitle E--Improvements to Medicare Part D
Sec. 1181. Elimination of coverage gap.
Sec. 1182. Discounts for certain part D drugs in original coverage gap.
Sec. 1183. Repeal of provision relating to submission of claims by
pharmacies located in or contracting with
long-term care facilities.
Sec. 1184. Including costs incurred by AIDS drug assistance programs
and Indian Health Service in providing
prescription drugs toward the annual out-
of-pocket threshold under part D.
Sec. 1185. No mid-year formulary changes permitted.
Sec. 1186. Negotiation of lower covered part D drug prices on behalf of
Medicare beneficiaries.
Sec. 1187. Accurate dispensing in long-term care facilities.
Sec. 1188. Free generic fill.
Sec. 1189. State certification prior to waiver of licensure
requirements under Medicare prescription
drug program.
Subtitle F--Medicare Rural Access Protections
Sec. 1191. Telehealth expansion and enhancements.
Sec. 1192. Extension of outpatient hold harmless provision.
Sec. 1193. Extension of section 508 hospital reclassifications.
Sec. 1194. Extension of geographic floor for work.
Sec. 1195. Extension of payment for technical component of certain
physician pathology services.
Sec. 1196. Extension of ambulance add-ons.
TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS
Subtitle A--Improving and Simplifying Financial Assistance for Low
Income Medicare Beneficiaries
Sec. 1201. Improving assets tests for Medicare Savings Program and low-
income subsidy program.
Sec. 1202. Elimination of part D cost-sharing for certain non-
institutionalized full-benefit dual
eligible individuals.
Sec. 1203. Eliminating barriers to enrollment.
Sec. 1204. Enhanced oversight relating to reimbursements for
retroactive low income subsidy enrollment.
Sec. 1205. Intelligent assignment in enrollment.
Sec. 1206. Special enrollment period and automatic enrollment process
for certain subsidy eligible individuals.
Sec. 1207. Application of MA premiums prior to rebate and quality bonus
payments in calculation of low income
subsidy benchmark.
Subtitle B--Reducing Health Disparities
Sec. 1221. Ensuring effective communication in Medicare.
Sec. 1222. Demonstration to promote access for Medicare beneficiaries
with limited English proficiency by
providing reimbursement for culturally and
linguistically appropriate services.
Sec. 1223. IOM report on impact of language access services.
Sec. 1224. Definitions.
Subtitle C--Miscellaneous Improvements
Sec. 1231. Extension of therapy caps exceptions process.
Sec. 1232. Extended months of coverage of immunosuppressive drugs for
kidney transplant patients and other renal
dialysis provisions.
Sec. 1233. Voluntary advance care planning consultation.
Sec. 1234. Part B special enrollment period and waiver of limited
enrollment penalty for TRICARE
beneficiaries.
Sec. 1235. Exception for use of more recent tax year in case of gains
from sale of primary residence in computing
part B income-related premium.
Sec. 1236. Demonstration program on use of patient decisions aids.
TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
COORDINATED CARE
Sec. 1301. Accountable Care Organization pilot program.
Sec. 1302. Medical home pilot program.
Sec. 1303. Payment incentive for selected primary care services.
Sec. 1304. Increased reimbursement rate for certified nurse-midwives.
Sec. 1305. Coverage and waiver of cost-sharing for preventive services.
Sec. 1306. Waiver of deductible for colorectal cancer screening tests
regardless of coding, subsequent diagnosis,
or ancillary tissue removal.
Sec. 1307. Excluding clinical social worker services from coverage
under the medicare skilled nursing facility
prospective payment system and consolidated
payment.
Sec. 1308. Coverage of marriage and family therapist services and
mental health counselor services.
Sec. 1309. Extension of physician fee schedule mental health add-on.
Sec. 1310. Expanding access to vaccines.
Sec. 1311. Expansion of Medicare-Covered Preventive Services at
Federally Qualified Health Centers.
Sec. 1312. Independence at home demonstration program.
Sec. 1313. Recognition of certified diabetes educators as certified
providers for purposes of Medicare diabetes
outpatient self-management training
services.
TITLE IV--QUALITY
Subtitle A--Comparative Effectiveness Research
Sec. 1401. Comparative effectiveness research.
Subtitle B--Nursing Home Transparency
Part 1--Improving Transparency of Information on Skilled Nursing
Facilities, Nursing Facilities, and Other Long-term Care Facilities
Sec. 1411. Required disclosure of ownership and additional disclosable
parties information.
Sec. 1412. Accountability requirements.
Sec. 1413. Nursing home compare Medicare website.
Sec. 1414. Reporting of expenditures.
Sec. 1415. Standardized complaint form.
Sec. 1416. Ensuring staffing accountability.
Sec. 1417. Nationwide program for national and State background checks
on direct patient access employees of long-
term care facilities and providers.
Part 2--Targeting Enforcement
Sec. 1421. Civil money penalties.
Sec. 1422. National independent monitor pilot program.
Sec. 1423. Notification of facility closure.
Part 3--Improving Staff Training
Sec. 1431. Dementia and abuse prevention training.
Sec. 1432. Study and report on training required for certified nurse
aides and supervisory staff.
Sec. 1433. Qualification of director of food services of a skilled
nursing facility or nursing facility.
Subtitle C--Quality Measurements
Sec. 1441. Establishment of national priorities for quality
improvement.
Sec. 1442. Development of new quality measures; GAO evaluation of data
collection process for quality measurement.
Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of
quality measures.
Sec. 1444. Application of quality measures.
Sec. 1445. Consensus-based entity funding.
Sec. 1446. Quality indicators for care of people with Alzheimer's
Disease.
Subtitle D--Physician Payments Sunshine Provision
Sec. 1451. Reports on financial relationships between manufacturers and
distributors of covered drugs, devices,
biologicals, or medical supplies under
Medicare, Medicaid, or CHIP and physicians
and other health care entities and between
physicians and other health care entities.
Subtitle E--Public Reporting on Health Care-Associated Infections
Sec. 1461. Requirement for public reporting by hospitals and ambulatory
surgical centers on health care-associated
infections.
TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION
Sec. 1501. Distribution of unused residency positions.
Sec. 1502. Increasing training in nonprovider settings.
Sec. 1503. Rules for counting resident time for didactic and scholarly
activities and other activities.
Sec. 1504. Preservation of resident cap positions from closed
hospitals.
Sec. 1505. Improving accountability for approved medical residency
training.
TITLE VI--PROGRAM INTEGRITY
Subtitle A--Increased Funding to Fight Waste, Fraud, and Abuse
Sec. 1601. Increased funding and flexibility to fight fraud and abuse.
Subtitle B--Enhanced Penalties for Fraud and Abuse
Sec. 1611. Enhanced penalties for false statements on provider or
supplier enrollment applications.
Sec. 1612. Enhanced penalties for submission of false statements
material to a false claim.
Sec. 1613. Enhanced penalties for delaying inspections.
Sec. 1614. Enhanced hospice program safeguards.
Sec. 1615. Enhanced penalties for individuals excluded from program
participation.
Sec. 1616. Enhanced penalties for provision of false information by
Medicare Advantage and part D plans.
Sec. 1617. Enhanced penalties for Medicare Advantage and part D
marketing violations.
Sec. 1618. Enhanced penalties for obstruction of program audits.
Sec. 1619. Exclusion of certain individuals and entities from
participation in Medicare and State health
care programs.
Sec. 1620. OIG authority to exclude from Federal health care programs
officers and owners of entities convicted
of fraud.
Sec. 1621. Self-referral disclosure protocol.
Subtitle C--Enhanced Program and Provider Protections
Sec. 1631. Enhanced CMS program protection authority.
Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure
requirements relating to previous
affiliations.
Sec. 1633. Required inclusion of payment modifier for certain
evaluation and management services.
Sec. 1634. Evaluations and reports required under Medicare Integrity
Program.
Sec. 1635. Require providers and suppliers to adopt programs to reduce
waste, fraud, and abuse.
Sec. 1636. Maximum period for submission of Medicare claims reduced to
not more than 12 months.
Sec. 1637. Physicians who order durable medical equipment or home
health services required to be Medicare
enrolled physicians or eligible
professionals.
Sec. 1638. Requirement for physicians to provide documentation on
referrals to programs at high risk of waste
and abuse.
Sec. 1639. Face-to-face encounter with patient required before
eligibility certifications for home health
services or durable medical equipment.
Sec. 1640. Extension of testimonial subpoena authority to program
exclusion investigations.
Sec. 1641. Required repayments of Medicare and Medicaid overpayments.
Sec. 1642. Expanded application of hardship waivers for OIG exclusions
to beneficiaries of any Federal health care
program.
Sec. 1643. Access to certain information on renal dialysis facilities.
Sec. 1644. Billing agents, clearinghouses, or other alternate payees
required to register under Medicare.
Sec. 1645. Conforming civil monetary penalties to False Claims Act
amendments.
Sec. 1646. Requiring provider and supplier payments under Medicare to
be made through direct deposit or
electronic funds transfer (EFT) at insured
depository institutions.
Sec. 1647. Inspector General for the Health Choices Administration.
Subtitle D--Access to Information Needed to Prevent Fraud, Waste, and
Abuse
Sec. 1651. Access to Information Necessary to Identify Fraud, Waste,
and Abuse.
Sec. 1652. Elimination of duplication between the Healthcare Integrity
and Protection Data Bank and the National
Practitioner Data Bank.
Sec. 1653. Compliance with HIPAA privacy and security standards.
Sec. 1654. Disclosure of Medicare fraud and abuse hotline number on
explanation of benefits.
TITLE VII--MEDICAID AND CHIP
Subtitle A--Medicaid and Health Reform
Sec. 1701. Eligibility for individuals with income below 150 percent of
the Federal poverty level.
Sec. 1702. Requirements and special rules for certain Medicaid
eligible individuals.
Sec. 1703. CHIP and Medicaid maintenance of eligibility.
Sec. 1704. Reduction in Medicaid DSH.
Sec. 1705. Expanded outstationing.
Subtitle B--Prevention
Sec. 1711. Required coverage of preventive services.
Sec. 1712. Tobacco cessation.
Sec. 1713. Optional coverage of nurse home visitation services.
Sec. 1714. State eligibility option for family planning services.
Subtitle C--Access
Sec. 1721. Payments to primary care practitioners.
Sec. 1722. Medical home pilot program.
Sec. 1723. Translation or interpretation services.
Sec. 1724. Optional coverage for freestanding birth center services.
Sec. 1725. Inclusion of public health clinics under the vaccines for
children program.
Sec. 1726. Requiring coverage of services of podiatrists.
Sec. 1726A. Requiring coverage of services of optometrists.
Sec. 1727. Therapeutic foster care.
Sec. 1728. Assuring adequate payment levels for services.
Sec. 1729. Preserving Medicaid coverage for youths upon release from
public institutions.
Sec. 1730. Quality measures for maternity and adult health services
under Medicaid and CHIP.
Sec. 1730A. Accountable care organization pilot program.
Sec. 1730B. FQHC coverage.
Subtitle D--Coverage
Sec. 1731. Optional Medicaid coverage of low-income HIV-infected
individuals.
Sec. 1732. Extending transitional Medicaid Assistance (TMA).
Sec. 1733. Requirement of 12-month continuous coverage under certain
CHIP programs.
Sec. 1734. Preventing the application under CHIP of coverage waiting
periods for certain children.
Sec. 1735. Adult day health care services.
Sec. 1736. Medicaid coverage for citizens of Freely Associated States.
Sec. 1737. Continuing requirement of Medicaid coverage of nonemergency
transportation to medically necessary
services.
Sec. 1738. State option to disregard certain income in providing
continued Medicaid coverage for certain
individuals with extremely high
prescription costs.
Sec. 1739. Provisions relating to community living assistance services
and supports (CLASS).
Sec. 1739A. Sense of Congress regarding Community First Choice Option
to provide medicaid coverage of community-
based attendant services and supports.
Subtitle E--Financing
Sec. 1741. Payments to pharmacists.
Sec. 1742. Prescription drug rebates.
Sec. 1743. Extension of prescription drug discounts to enrollees of
Medicaid managed care organizations.
Sec. 1744. Payments for graduate medical education.
Sec. 1745. Nursing Facility Supplemental Payment Program.
Sec. 1746. Report on Medicaid payments.
Sec. 1747. Reviews of Medicaid.
Sec. 1748. Extension of delay in managed care organization provider tax
elimination.
Sec. 1749. Extension of ARRA increase in FMAP.
Subtitle F--Waste, Fraud, and Abuse
Sec. 1751. Health care acquired conditions.
Sec. 1752. Evaluations and reports required under Medicaid Integrity
Program.
Sec. 1753. Require providers and suppliers to adopt programs to reduce
waste, fraud, and abuse.
Sec. 1754. Overpayments.
Sec. 1755. Managed care organizations.
Sec. 1756. Termination of provider participation under Medicaid and
CHIP if terminated under Medicare or other
State plan or child health plan.
Sec. 1757. Medicaid and CHIP exclusion from participation relating to
certain ownership, control, and management
affiliations.
Sec. 1758. Requirement to report expanded set of data elements under
MMIS to detect fraud and abuse.
Sec. 1759. Billing agents, clearinghouses, or other alternate payees
required to register under Medicaid.
Sec. 1760. Denial of payments for litigation-related misconduct.
Sec. 1761. Mandatory State use of national correct coding initiative.
Subtitle G--Payments to the Territories
Sec. 1771. Payment to territories.
Subtitle H--Miscellaneous
Sec. 1781. Technical corrections.
Sec. 1782. Extension of QI program.
Sec. 1783. Assuring transparency of information.
Sec. 1784. Medicaid and CHIP Payment and Access Commission.
Sec. 1785. Outreach and enrollment of Medicaid and CHIP eligible
individuals.
Sec. 1786. Prohibitions on Federal Medicaid and CHIP payment for
undocumented aliens.
Sec. 1787. Demonstration project for stabilization of emergency medical
conditions by institutions for mental
diseases.
Sec. 1788. Application of Medicaid Improvement Fund.
Sec. 1789. Treatment of certain Medicaid brokers.
Sec. 1790. Rule for changes requiring State legislation.
TITLE VIII--REVENUE-RELATED PROVISIONS
Sec. 1801. Disclosures to facilitate identification of individuals
likely to be ineligible for the low-income
assistance under the Medicare prescription
drug program to assist Social Security
Administration's outreach to eligible
individuals.
Sec. 1802. Comparative Effectiveness Research Trust Fund; financing for
Trust Fund.
TITLE IX--MISCELLANEOUS PROVISIONS
Sec. 1901. Repeal of trigger provision.
Sec. 1902. Repeal of comparative cost adjustment (CCA) program.
Sec. 1903. Extension of gainsharing demonstration.
Sec. 1904. Grants to States for quality home visitation programs for
families with young children and families
expecting children.
Sec. 1905. Improved coordination and protection for dual eligibles.
Sec. 1906. Assessment of medicare cost-intensive diseases and
conditions.
Sec. 1907. Establishment of Center for Medicare and Medicaid Innovation
within CMS.
Sec. 1908. Application of emergency services laws.
Sec. 1909. Disregard under the Supplemental Security Income program of
compensation for participation in clinical
trials for rare diseases or conditions.
TITLE I--IMPROVING HEALTH CARE VALUE
Subtitle A--Provisions Related to Medicare Part A
PART 1--MARKET BASKET UPDATES
SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE.
(a) In General.--Section 1888(e)(4)(E)(ii) of the Social Security
Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended--
(1) in subclause (III), by striking ``and'' at the end;
(2) by redesignating subclause (IV) as subclause (VI); and
(3) by inserting after subclause (III) the following new
subclauses:
``(IV) for each of fiscal years
2004 through 2009, the rate computed
for the previous fiscal year increased
by the skilled nursing facility market
basket percentage change for the fiscal
year involved;
``(V) for fiscal year 2010, the
rate computed for the previous fiscal
year; and''.
(b) Delayed Effective Date.--Section 1888(e)(4)(E)(ii)(V) of the
Social Security Act, as inserted by subsection (a)(3), shall not apply
to payment for days before January 1, 2010.
SEC. 1102. INPATIENT REHABILITATION FACILITY PAYMENT UPDATE.
(a) In General.--Section 1886(j)(3)(C) of the Social Security Act
(42 U.S.C. 1395ww(j)(3)(C)) is amended by striking ``and 2009'' and
inserting ``through 2010''.
(b) Delayed Effective Date.--The amendment made by subsection (a)
shall not apply to payment units occurring before January 1, 2010.
SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET
UPDATES THAT DO NOT ALREADY INCORPORATE SUCH
IMPROVEMENTS.
(a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social
Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
(1) in clause (iii)--
(A) by striking ``(iii) For purposes of this
subparagraph,'' and inserting ``(iii)(I) For purposes
of this subparagraph, subject to the productivity
adjustment described in subclause (II),''; and
(B) by adding at the end the following new
subclause:
``(II) The productivity adjustment described in this subclause,
with respect to an increase or change for a fiscal year or year or cost
reporting period, or other annual period, is a productivity offset in
the form of a reduction in such increase or change equal to the
percentage change in the 10-year moving average of annual economy-wide
private nonfarm business multi-factor productivity (as recently
published in final form before the promulgation or publication of such
increase for the year or period involved). Except as otherwise
provided, any reference to the increase described in this clause shall
be a reference to the percentage increase described in subclause (I)
minus the percentage change under this subclause.'';
(2) in the first sentence of clause (viii)(I), by inserting
``(but not below zero)'' after ``shall be reduced''; and
(3) in the first sentence of clause (ix)(I)--
(A) by inserting ``(determined without regard to
clause (iii)(II))'' after ``clause (i)'' the second
time it appears; and
(B) by inserting ``(but not below zero)'' after
``reduced''.
(b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of such Act
(42 U.S.C. 1395yy(e)(5)(B)) is amended by inserting ``subject to the
productivity adjustment described in section 1886(b)(3)(B)(iii)(II)''
after ``as calculated by the Secretary''.
(c) Long Term Care Hospitals.--Section 1886(m) of the Social
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the
following new paragraph:
``(3) Productivity adjustment.--In implementing the system
described in paragraph (1) for discharges occurring on or after
January 1, 2010, during the rate year ending in 2010 or any
subsequent rate year for a hospital, to the extent that an
annual percentage increase factor applies to a standard Federal
rate for such discharges for the hospital, such factor shall be
subject to the productivity adjustment described in subsection
(b)(3)(B)(iii)(II).''.
(d) Inpatient Rehabilitation Facilities.--The second sentence of
section 1886(j)(3)(C) of the Social Security Act (42 U.S.C.
1395ww(j)(3)(C)) is amended by inserting ``(subject to the productivity
adjustment described in subsection (b)(3)(B)(iii)(II))'' after
``appropriate percentage increase''.
(e) Psychiatric Hospitals.--Section 1886 of the Social Security Act
(42 U.S.C. 1395ww) is amended by adding at the end the following new
subsection:
``(o) Prospective Payment for Psychiatric Hospitals.--
``(1) Reference to establishment and implementation of
system.--For provisions related to the establishment and
implementation of a prospective payment system for payments
under this title for inpatient hospital services furnished by
psychiatric hospitals (as described in clause (i) of subsection
(d)