[United States Statutes at Large, Volume 124, 111th Congress, 2nd Session]
[From the U.S. Government Publishing Office, www.gpo.gov]
Public Law 111-148
111th Congress
An Act
Entitled The Patient Protection and Affordable Care Act. <>
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 CONTENTS.
(a) Short <> Title.--This Act may be cited
as the ``Patient Protection and Affordable Care Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
Subtitle A--Immediate Improvements in Health Care Coverage for All
Americans
Sec. 1001. Amendments to the Public Health Service Act.
``PART A--Individual and Group Market Reforms
``subpart ii--improving coverage
``Sec. 2711. No lifetime or annual limits.
``Sec. 2712. Prohibition on rescissions.
``Sec. 2713. Coverage of preventive health services.
``Sec. 2714. Extension of dependent coverage.
``Sec. 2715. Development and utilization of uniform explanation
of coverage documents and standardized
definitions.
``Sec. 2716. Prohibition of discrimination based on salary.
``Sec. 2717. Ensuring the quality of care.
``Sec. 2718. Bringing down the cost of health care coverage.
``Sec. 2719. Appeals process.
Sec. 1002. Health insurance consumer information.
Sec. 1003. Ensuring that consumers get value for their dollars.
Sec. 1004. Effective dates.
Subtitle B--Immediate Actions to Preserve and Expand Coverage
Sec. 1101. Immediate access to insurance for uninsured individuals with
a preexisting condition.
Sec. 1102. Reinsurance for early retirees.
Sec. 1103. Immediate information that allows consumers to identify
affordable coverage options.
Sec. 1104. Administrative simplification.
Sec. 1105. Effective date.
Subtitle C--Quality Health Insurance Coverage for All Americans
PART I--Health Insurance Market Reforms
Sec. 1201. Amendment to the Public Health Service Act.
``subpart i--general reform
``Sec. 2704. Prohibition of preexisting condition exclusions or
other discrimination based on health status.
``Sec. 2701. Fair health insurance premiums.
``Sec. 2702. Guaranteed availability of coverage.
[[Page 120]]
``Sec. 2703. Guaranteed renewability of coverage.
``Sec. 2705. Prohibiting discrimination against individual
participants and beneficiaries based on
health status.
``Sec. 2706. Non-discrimination in health care.
``Sec. 2707. Comprehensive health insurance coverage.
``Sec. 2708. Prohibition on excessive waiting periods.
PART II--Other Provisions
Sec. 1251. Preservation of right to maintain existing coverage.
Sec. 1252. Rating reforms must apply uniformly to all health insurance
issuers and group health plans.
Sec. 1253. Effective dates.
Subtitle D--Available Coverage Choices for All Americans
PART I--Establishment of Qualified Health Plans
Sec. 1301. Qualified health plan defined.
Sec. 1302. Essential health benefits requirements.
Sec. 1303. Special rules.
Sec. 1304. Related definitions.
PART II--Consumer Choices and Insurance Competition Through Health
Benefit Exchanges
Sec. 1311. Affordable choices of health benefit plans.
Sec. 1312. Consumer choice.
Sec. 1313. Financial integrity.
PART III--State Flexibility Relating to Exchanges
Sec. 1321. State flexibility in operation and enforcement of Exchanges
and related requirements.
Sec. 1322. Federal program to assist establishment and operation of
nonprofit, member-run health insurance issuers.
Sec. 1323. Community health insurance option.
Sec. 1324. Level playing field.
PART IV--State Flexibility to Establish Alternative Programs
Sec. 1331. State flexibility to establish basic health programs for low-
income individuals not eligible for Medicaid.
Sec. 1332. Waiver for State innovation.
Sec. 1333. Provisions relating to offering of plans in more than one
State.
PART V--Reinsurance and Risk Adjustment
Sec. 1341. Transitional reinsurance program for individual and small
group markets in each State.
Sec. 1342. Establishment of risk corridors for plans in individual and
small group markets.
Sec. 1343. Risk adjustment.
Subtitle E--Affordable Coverage Choices for All Americans
PART I--Premium Tax Credits and Cost-sharing Reductions
subpart a--premium tax credits and cost-sharing reductions
Sec. 1401. Refundable tax credit providing premium assistance for
coverage under a qualified health plan.
Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified
health plans.
subpart b--eligibility determinations
Sec. 1411. Procedures for determining eligibility for Exchange
participation, premium tax credits and reduced cost-sharing,
and individual responsibility exemptions.
Sec. 1412. Advance determination and payment of premium tax credits and
cost-sharing reductions.
Sec. 1413. Streamlining of procedures for enrollment through an exchange
and State Medicaid, CHIP, and health subsidy programs.
Sec. 1414. Disclosures to carry out eligibility requirements for certain
programs.
Sec. 1415. Premium tax credit and cost-sharing reduction payments
disregarded for Federal and Federally-assisted programs.
PART II--Small Business Tax Credit
Sec. 1421. Credit for employee health insurance expenses of small
businesses.
[[Page 121]]
Subtitle F--Shared Responsibility for Health Care
PART I--Individual Responsibility
Sec. 1501. Requirement to maintain minimum essential coverage.
Sec. 1502. Reporting of health insurance coverage.
PART II--Employer Responsibilities
Sec. 1511. Automatic enrollment for employees of large employers.
Sec. 1512. Employer requirement to inform employees of coverage options.
Sec. 1513. Shared responsibility for employers.
Sec. 1514. Reporting of employer health insurance coverage.
Sec. 1515. Offering of Exchange-participating qualified health plans
through cafeteria plans.
Subtitle G--Miscellaneous Provisions
Sec. 1551. Definitions.
Sec. 1552. Transparency in government.
Sec. 1553. Prohibition against discrimination on assisted suicide.
Sec. 1554. Access to therapies.
Sec. 1555. Freedom not to participate in Federal health insurance
programs.
Sec. 1556. Equity for certain eligible survivors.
Sec. 1557. Nondiscrimination.
Sec. 1558. Protections for employees.
Sec. 1559. Oversight.
Sec. 1560. Rules of construction.
Sec. 1561. Health information technology enrollment standards and
protocols.
Sec. 1562. Conforming amendments.
Sec. 1563. Sense of the Senate promoting fiscal responsibility.
TITLE II--ROLE OF PUBLIC PROGRAMS
Subtitle A--Improved Access to Medicaid
Sec. 2001. Medicaid coverage for the lowest income populations.
Sec. 2002. Income eligibility for nonelderly determined using modified
gross income.
Sec. 2003. Requirement to offer premium assistance for employer-
sponsored insurance.
Sec. 2004. Medicaid coverage for former foster care children.
Sec. 2005. Payments to territories.
Sec. 2006. Special adjustment to FMAP determination for certain States
recovering from a major disaster.
Sec. 2007. Medicaid Improvement Fund rescission.
Subtitle B--Enhanced Support for the Children's Health Insurance Program
Sec. 2101. Additional federal financial participation for CHIP.
Sec. 2102. Technical corrections.
Subtitle C--Medicaid and CHIP Enrollment Simplification
Sec. 2201. Enrollment Simplification and coordination with State Health
Insurance Exchanges.
Sec. 2202. Permitting hospitals to make presumptive eligibility
determinations for all Medicaid eligible populations.
Subtitle D--Improvements to Medicaid Services
Sec. 2301. Coverage for freestanding birth center services.
Sec. 2302. Concurrent care for children.
Sec. 2303. State eligibility option for family planning services.
Sec. 2304. Clarification of definition of medical assistance.
Subtitle E--New Options for States to Provide Long-Term Services and
Supports
Sec. 2401. Community First Choice Option.
Sec. 2402. Removal of barriers to providing home and community-based
services.
Sec. 2403. Money Follows the Person Rebalancing Demonstration.
Sec. 2404. Protection for recipients of home and community-based
services against spousal impoverishment.
Sec. 2405. Funding to expand State Aging and Disability Resource
Centers.
Sec. 2406. Sense of the Senate regarding long-term care.
Subtitle F--Medicaid Prescription Drug Coverage
Sec. 2501. Prescription drug rebates.
[[Page 122]]
Sec. 2502. Elimination of exclusion of coverage of certain drugs.
Sec. 2503. Providing adequate pharmacy reimbursement.
Subtitle G--Medicaid Disproportionate Share Hospital (DSH) Payments
Sec. 2551. Disproportionate share hospital payments.
Subtitle H--Improved Coordination for Dual Eligible Beneficiaries
Sec. 2601. 5-year period for demonstration projects.
Sec. 2602. Providing Federal coverage and payment coordination for dual
eligible beneficiaries.
Subtitle I--Improving the Quality of Medicaid for Patients and Providers
Sec. 2701. Adult health quality measures.
Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions.
Sec. 2703. State option to provide health homes for enrollees with
chronic conditions.
Sec. 2704. Demonstration project to evaluate integrated care around a
hospitalization.
Sec. 2705. Medicaid Global Payment System Demonstration Project.
Sec. 2706. Pediatric Accountable Care Organization Demonstration
Project.
Sec. 2707. Medicaid emergency psychiatric demonstration project.
Subtitle J--Improvements to the Medicaid and CHIP Payment and Access
Commission (MACPAC)
Sec. 2801. MACPAC assessment of policies affecting all Medicaid
beneficiaries.
Subtitle K--Protections for American Indians and Alaska Natives
Sec. 2901. Special rules relating to Indians.
Sec. 2902. Elimination of sunset for reimbursement for all medicare part
B services furnished by certain indian hospitals and clinics.
Subtitle L--Maternal and Child Health Services
Sec. 2951. Maternal, infant, and early childhood home visiting programs.
Sec. 2952. Support, education, and research for postpartum depression.
Sec. 2953. Personal responsibility education.
Sec. 2954. Restoration of funding for abstinence education.
Sec. 2955. Inclusion of information about the importance of having a
health care power of attorney in transition planning for
children aging out of foster care and independent living
programs.
TITLE III--IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE
Subtitle A--Transforming the Health Care Delivery System
PART I--Linking Payment to Quality Outcomes Under the Medicare Program
Sec. 3001. Hospital Value-Based purchasing program.
Sec. 3002. Improvements to the physician quality reporting system.
Sec. 3003. Improvements to the physician feedback program.
Sec. 3004. Quality reporting for long-term care hospitals, inpatient
rehabilitation hospitals, and hospice programs.
Sec. 3005. Quality reporting for PPS-exempt cancer hospitals.
Sec. 3006. Plans for a Value-Based purchasing program for skilled
nursing facilities and home health agencies.
Sec. 3007. Value-based payment modifier under the physician fee
schedule.
Sec. 3008. Payment adjustment for conditions acquired in hospitals.
PART II--National Strategy to Improve Health Care Quality
Sec. 3011. National strategy.
Sec. 3012. Interagency Working Group on Health Care Quality.
Sec. 3013. Quality measure development.
Sec. 3014. Quality measurement.
Sec. 3015. Data collection; public reporting.
PART III--Encouraging Development of New Patient Care Models
Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation
within CMS.
Sec. 3022. Medicare shared savings program.
Sec. 3023. National pilot program on payment bundling.
Sec. 3024. Independence at home demonstration program.
Sec. 3025. Hospital readmissions reduction program.
[[Page 123]]
Sec. 3026. Community-Based Care Transitions Program.
Sec. 3027. Extension of gainsharing demonstration.
Subtitle B--Improving Medicare for Patients and Providers
PART I--Ensuring Beneficiary Access to Physician Care and Other Services
Sec. 3101. Increase in the physician payment update.
Sec. 3102. Extension of the work geographic index floor and revisions to
the practice expense geographic adjustment under the Medicare
physician fee schedule.
Sec. 3103. Extension of exceptions process for Medicare therapy caps.
Sec. 3104. Extension of payment for technical component of certain
physician pathology services.
Sec. 3105. Extension of ambulance add-ons.
Sec. 3106. Extension of certain payment rules for long-term care
hospital services and of moratorium on the establishment of
certain hospitals and facilities.
Sec. 3107. Extension of physician fee schedule mental health add-on.
Sec. 3108. Permitting physician assistants to order post-Hospital
extended care services.
Sec. 3109. Exemption of certain pharmacies from accreditation
requirements.
Sec. 3110. Part B special enrollment period for disabled TRICARE
beneficiaries.
Sec. 3111. Payment for bone density tests.
Sec. 3112. Revision to the Medicare Improvement Fund.
Sec. 3113. Treatment of certain complex diagnostic laboratory tests.
Sec. 3114. Improved access for certified nurse-midwife services.
PART II--Rural Protections
Sec. 3121. Extension of outpatient hold harmless provision.
Sec. 3122. Extension of Medicare reasonable costs payments for certain
clinical diagnostic laboratory tests furnished to hospital
patients in certain rural areas.
Sec. 3123. Extension of the Rural Community Hospital Demonstration
Program.
Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program.
Sec. 3125. Temporary improvements to the Medicare inpatient hospital
payment adjustment for low-volume hospitals.
Sec. 3126. Improvements to the demonstration project on community health
integration models in certain rural counties.
Sec. 3127. MedPAC study on adequacy of Medicare payments for health care
providers serving in rural areas.
Sec. 3128. Technical correction related to critical access hospital
services.
Sec. 3129. Extension of and revisions to Medicare rural hospital
flexibility program.
PART III--Improving Payment Accuracy
Sec. 3131. Payment adjustments for home health care.
Sec. 3132. Hospice reform.
Sec. 3133. Improvement to medicare disproportionate share hospital (DSH)
payments.
Sec. 3134. Misvalued codes under the physician fee schedule.
Sec. 3135. Modification of equipment utilization factor for advanced
imaging services.
Sec. 3136. Revision of payment for power-driven wheelchairs.
Sec. 3137. Hospital wage index improvement.
Sec. 3138. Treatment of certain cancer hospitals.
Sec. 3139. Payment for biosimilar biological products.
Sec. 3140. Medicare hospice concurrent care demonstration program.
Sec. 3141. Application of budget neutrality on a national basis in the
calculation of the Medicare hospital wage index floor.
Sec. 3142. HHS study on urban Medicare-dependent hospitals.
Sec. 3143. Protecting home health benefits.
Subtitle C--Provisions Relating to Part C
Sec. 3201. Medicare Advantage payment.
Sec. 3202. Benefit protection and simplification.
Sec. 3203. Application of coding intensity adjustment during MA payment
transition.
Sec. 3204. Simplification of annual beneficiary election periods.
Sec. 3205. Extension for specialized MA plans for special needs
individuals.
Sec. 3206. Extension of reasonable cost contracts.
Sec. 3207. Technical correction to MA private fee-for-service plans.
Sec. 3208. Making senior housing facility demonstration permanent.
[[Page 124]]
Sec. 3209. Authority to deny plan bids.
Sec. 3210. Development of new standards for certain Medigap plans.
Subtitle D--Medicare Part D Improvements for Prescription Drug Plans and
MA-PD Plans
Sec. 3301. Medicare coverage gap discount program.
Sec. 3302. Improvement in determination of Medicare part D low-income
benchmark premium.
Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals
under prescription drug plans and MA-PD plans.
Sec. 3304. Special rule for widows and widowers regarding eligibility
for low-income assistance.
Sec. 3305. Improved information for subsidy eligible individuals
reassigned to prescription drug plans and MA-PD plans.
Sec. 3306. Funding outreach and assistance for low-income programs.
Sec. 3307. Improving formulary requirements for prescription drug plans
and MA-PD plans with respect to certain categories or classes
of drugs.
Sec. 3308. Reducing part D premium subsidy for high-income
beneficiaries.
Sec. 3309. Elimination of cost sharing for certain dual eligible
individuals.
Sec. 3310. Reducing wasteful dispensing of outpatient prescription drugs
in long-term care facilities under prescription drug plans
and MA-PD plans.
Sec. 3311. Improved Medicare prescription drug plan and MA-PD plan
complaint system.
Sec. 3312. Uniform exceptions and appeals process for prescription drug
plans and MA-PD plans.
Sec. 3313. Office of the Inspector General studies and reports.
Sec. 3314. 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. 3315. Immediate reduction in coverage gap in 2010.
Subtitle E--Ensuring Medicare Sustainability
Sec. 3401. Revision of certain market basket updates and incorporation
of productivity improvements into market basket updates that
do not already incorporate such improvements.
Sec. 3402. Temporary adjustment to the calculation of part B premiums.
Sec. 3403. Independent Medicare Advisory Board.
Subtitle F--Health Care Quality Improvements
Sec. 3501. Health care delivery system research; Quality improvement
technical assistance.
Sec. 3502. Establishing community health teams to support the patient-
centered medical home.
Sec. 3503. Medication management services in treatment of chronic
disease.
Sec. 3504. Design and implementation of regionalized systems for
emergency care.
Sec. 3505. Trauma care centers and service availability.
Sec. 3506. Program to facilitate shared decisionmaking.
Sec. 3507. Presentation of prescription drug benefit and risk
information.
Sec. 3508. Demonstration program to integrate quality improvement and
patient safety training into clinical education of health
professionals.
Sec. 3509. Improving women's health.
Sec. 3510. Patient navigator program.
Sec. 3511. Authorization of appropriations.
Subtitle G--Protecting and Improving Guaranteed Medicare Benefits
Sec. 3601. Protecting and improving guaranteed Medicare benefits.
Sec. 3602. No cuts in guaranteed benefits.
TITLE IV--PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH
Subtitle A--Modernizing Disease Prevention and Public Health Systems
Sec. 4001. National Prevention, Health Promotion and Public Health
Council.
Sec. 4002. Prevention and Public Health Fund.
Sec. 4003. Clinical and community preventive services.
Sec. 4004. Education and outreach campaign regarding preventive
benefits.
Subtitle B--Increasing Access to Clinical Preventive Services
Sec. 4101. School-based health centers.
Sec. 4102. Oral healthcare prevention activities.
[[Page 125]]
Sec. 4103. Medicare coverage of annual wellness visit providing a
personalized prevention plan.
Sec. 4104. Removal of barriers to preventive services in Medicare.
Sec. 4105. Evidence-based coverage of preventive services in Medicare.
Sec. 4106. Improving access to preventive services for eligible adults
in Medicaid.
Sec. 4107. Coverage of comprehensive tobacco cessation services for
pregnant women in Medicaid.
Sec. 4108. Incentives for prevention of chronic diseases in medicaid.
Subtitle C--Creating Healthier Communities
Sec. 4201. Community transformation grants.
Sec. 4202. Healthy aging, living well; evaluation of community-based
prevention and wellness programs for Medicare beneficiaries.
Sec. 4203. Removing barriers and improving access to wellness for
individuals with disabilities.
Sec. 4204. Immunizations.
Sec. 4205. Nutrition labeling of standard menu items at chain
restaurants.
Sec. 4206. Demonstration project concerning individualized wellness
plan.
Sec. 4207. Reasonable break time for nursing mothers.
Subtitle D--Support for Prevention and Public Health Innovation
Sec. 4301. Research on optimizing the delivery of public health
services.
Sec. 4302. Understanding health disparities: data collection and
analysis.
Sec. 4303. CDC and employer-based wellness programs.
Sec. 4304. Epidemiology-Laboratory Capacity Grants.
Sec. 4305. Advancing research and treatment for pain care management.
Sec. 4306. Funding for Childhood Obesity Demonstration Project.
Subtitle E--Miscellaneous Provisions
Sec. 4401. Sense of the Senate concerning CBO scoring.
Sec. 4402. Effectiveness of Federal health and wellness initiatives.
TITLE V--HEALTH CARE WORKFORCE
Subtitle A--Purpose and Definitions
Sec. 5001. Purpose.
Sec. 5002. Definitions.
Subtitle B--Innovations in the Health Care Workforce
Sec. 5101. National health care workforce commission.
Sec. 5102. State health care workforce development grants.
Sec. 5103. Health care workforce assessment.
Subtitle C--Increasing the Supply of the Health Care Workforce
Sec. 5201. Federally supported student loan funds.
Sec. 5202. Nursing student loan program.
Sec. 5203. Health care workforce loan repayment programs.
Sec. 5204. Public health workforce recruitment and retention programs.
Sec. 5205. Allied health workforce recruitment and retention programs.
Sec. 5206. Grants for State and local programs.
Sec. 5207. Funding for National Health Service Corps.
Sec. 5208. Nurse-managed health clinics.
Sec. 5209. Elimination of cap on commissioned corps.
Sec. 5210. Establishing a Ready Reserve Corps.
Subtitle D--Enhancing Health Care Workforce Education and Training
Sec. 5301. Training in family medicine, general internal medicine,
general pediatrics, and physician assistantship.
Sec. 5302. Training opportunities for direct care workers.
Sec. 5303. Training in general, pediatric, and public health dentistry.
Sec. 5304. Alternative dental health care providers demonstration
project.
Sec. 5305. Geriatric education and training; career awards;
comprehensive geriatric education.
Sec. 5306. Mental and behavioral health education and training grants.
Sec. 5307. Cultural competency, prevention, and public health and
individuals with disabilities training.
Sec. 5308. Advanced nursing education grants.
Sec. 5309. Nurse education, practice, and retention grants.
Sec. 5310. Loan repayment and scholarship program.
Sec. 5311. Nurse faculty loan program.
[[Page 126]]
Sec. 5312. Authorization of appropriations for parts B through D of
title VIII.
Sec. 5313. Grants to promote the community health workforce.
Sec. 5314. Fellowship training in public health.
Sec. 5315. United States Public Health Sciences Track.
Subtitle E--Supporting the Existing Health Care Workforce
Sec. 5401. Centers of excellence.
Sec. 5402. Health care professionals training for diversity.
Sec. 5403. Interdisciplinary, community-based linkages.
Sec. 5404. Workforce diversity grants.
Sec. 5405. Primary care extension program.
Subtitle F--Strengthening Primary Care and Other Workforce Improvements
Sec. 5501. Expanding access to primary care services and general surgery
services.
Sec. 5502. Medicare Federally qualified health center improvements.
Sec. 5503. Distribution of additional residency positions.
Sec. 5504. Counting resident time in nonprovider settings.
Sec. 5505. Rules for counting resident time for didactic and scholarly
activities and other activities.
Sec. 5506. Preservation of resident cap positions from closed hospitals.
Sec. 5507. Demonstration projects To address health professions
workforce needs; extension of family-to-family health
information centers.
Sec. 5508. Increasing teaching capacity.
Sec. 5509. Graduate nurse education demonstration.
Subtitle G--Improving Access to Health Care Services
Sec. 5601. Spending for Federally Qualified Health Centers (FQHCs).
Sec. 5602. Negotiated rulemaking for development of methodology and
criteria for designating medically underserved populations
and health professions shortage areas.
Sec. 5603. Reauthorization of the Wakefield Emergency Medical Services
for Children Program.
Sec. 5604. Co-locating primary and specialty care in community-based
mental health settings.
Sec. 5605. Key National indicators.
Subtitle H--General Provisions
Sec. 5701. Reports.
TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY
Subtitle A--Physician Ownership and Other Transparency
Sec. 6001. Limitation on Medicare exception to the prohibition on
certain physician referrals for hospitals.
Sec. 6002. Transparency reports and reporting of physician ownership or
investment interests.
Sec. 6003. Disclosure requirements for in-office ancillary services
exception to the prohibition on physician self-referral for
certain imaging services.
Sec. 6004. Prescription drug sample transparency.
Sec. 6005. Pharmacy benefit managers transparency requirements.
Subtitle B--Nursing Home Transparency and Improvement
PART I--Improving Transparency of Information
Sec. 6101. Required disclosure of ownership and additional disclosable
parties information.
Sec. 6102. Accountability requirements for skilled nursing facilities
and nursing facilities.
Sec. 6103. Nursing home compare Medicare website.
Sec. 6104. Reporting of expenditures.
Sec. 6105. Standardized complaint form.
Sec. 6106. Ensuring staffing accountability.
Sec. 6107. GAO study and report on Five-Star Quality Rating System.
PART II--Targeting Enforcement
Sec. 6111. Civil money penalties.
Sec. 6112. National independent monitor demonstration project.
Sec. 6113. Notification of facility closure.
Sec. 6114. National demonstration projects on culture change and use of
information technology in nursing homes.
[[Page 127]]
PART III--Improving Staff Training
Sec. 6121. Dementia and abuse prevention training.
Subtitle C--Nationwide Program for National and State Background Checks
on Direct Patient Access Employees of Long-term Care Facilities and
Providers
Sec. 6201. Nationwide program for National and State background checks
on direct patient access employees of long-term care
facilities and providers.
Subtitle D--Patient-Centered Outcomes Research
Sec. 6301. Patient-Centered Outcomes Research.
Sec. 6302. Federal coordinating council for comparative effectiveness
research.
Subtitle E--Medicare, Medicaid, and CHIP Program Integrity Provisions
Sec. 6401. Provider screening and other enrollment requirements under
Medicare, Medicaid, and CHIP.
Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions.
Sec. 6403. Elimination of duplication between the Healthcare Integrity
and Protection Data Bank and the National Practitioner Data
Bank.
Sec. 6404. Maximum period for submission of Medicare claims reduced to
not more than 12 months.
Sec. 6405. Physicians who order items or services required to be
Medicare enrolled physicians or eligible professionals.
Sec. 6406. Requirement for physicians to provide documentation on
referrals to programs at high risk of waste and abuse.
Sec. 6407. Face to face encounter with patient required before
physicians may certify eligibility for home health services
or durable medical equipment under Medicare.
Sec. 6408. Enhanced penalties.
Sec. 6409. Medicare self-referral disclosure protocol.
Sec. 6410. Adjustments to the Medicare durable medical equipment,
prosthetics, orthotics, and supplies competitive acquisition
program.
Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program.
Subtitle F--Additional Medicaid Program Integrity Provisions
Sec. 6501. Termination of provider participation under Medicaid if
terminated under Medicare or other State plan.
Sec. 6502. Medicaid exclusion from participation relating to certain
ownership, control, and management affiliations.
Sec. 6503. Billing agents, clearinghouses, or other alternate payees
required to register under Medicaid.
Sec. 6504. Requirement to report expanded set of data elements under
MMIS to detect fraud and abuse.
Sec. 6505. Prohibition on payments to institutions or entities located
outside of the United States.
Sec. 6506. Overpayments.
Sec. 6507. Mandatory State use of national correct coding initiative.
Sec. 6508. General effective date.
Subtitle G--Additional Program Integrity Provisions
Sec. 6601. Prohibition on false statements and representations.
Sec. 6602. Clarifying definition.
Sec. 6603. Development of model uniform report form.
Sec. 6604. Applicability of State law to combat fraud and abuse.
Sec. 6605. Enabling the Department of Labor to issue administrative
summary cease and desist orders and summary seizures orders
against plans that are in financially hazardous condition.
Sec. 6606. MEWA plan registration with Department of Labor.
Sec. 6607. Permitting evidentiary privilege and confidential
communications.
Subtitle H--Elder Justice Act
Sec. 6701. Short title of subtitle.
Sec. 6702. Definitions.
Sec. 6703. Elder Justice.
Subtitle I--Sense of the Senate Regarding Medical Malpractice
Sec. 6801. Sense of the Senate regarding medical malpractice.
TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES
Subtitle A--Biologics Price Competition and Innovation
Sec. 7001. Short title.
[[Page 128]]
Sec. 7002. Approval pathway for biosimilar biological products.
Sec. 7003. Savings.
Subtitle B--More Affordable Medicines for Children and Underserved
Communities
Sec. 7101. Expanded participation in 340B program.
Sec. 7102. Improvements to 340B program integrity.
Sec. 7103. GAO study to make recommendations on improving the 340B
program.
TITLE VIII--CLASS ACT
Sec. 8001. Short title of title.
Sec. 8002. Establishment of national voluntary insurance program for
purchasing community living assistance services and support.
TITLE IX--REVENUE PROVISIONS
Subtitle A--Revenue Offset Provisions
Sec. 9001. Excise tax on high cost employer-sponsored health coverage.
Sec. 9002. Inclusion of cost of employer-sponsored health coverage on W-
2.
Sec. 9003. Distributions for medicine qualified only if for prescribed
drug or insulin.
Sec. 9004. Increase in additional tax on distributions from HSAs and
Archer MSAs not used for qualified medical expenses.
Sec. 9005. Limitation on health flexible spending arrangements under
cafeteria plans.
Sec. 9006. Expansion of information reporting requirements.
Sec. 9007. Additional requirements for charitable hospitals.
Sec. 9008. Imposition of annual fee on branded prescription
pharmaceutical manufacturers and importers.
Sec. 9009. Imposition of annual fee on medical device manufacturers and
importers.
Sec. 9010. Imposition of annual fee on health insurance providers.
Sec. 9011. Study and report of effect on veterans health care.
Sec. 9012. Elimination of deduction for expenses allocable to Medicare
Part D subsidy.
Sec. 9013. Modification of itemized deduction for medical expenses.
Sec. 9014. Limitation on excessive remuneration paid by certain health
insurance providers.
Sec. 9015. Additional hospital insurance tax on high-income taxpayers.
Sec. 9016. Modification of section 833 treatment of certain health
organizations.
Sec. 9017. Excise tax on elective cosmetic medical procedures.
Subtitle B--Other Provisions
Sec. 9021. Exclusion of health benefits provided by Indian tribal
governments.
Sec. 9022. Establishment of simple cafeteria plans for small businesses.
Sec. 9023. Qualifying therapeutic discovery project credit.
TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
Subtitle A--Provisions Relating to Title I
Sec. 10101. Amendments to subtitle A.
Sec. 10102. Amendments to subtitle B.
Sec. 10103. Amendments to subtitle C.
Sec. 10104. Amendments to subtitle D.
Sec. 10105. Amendments to subtitle E.
Sec. 10106. Amendments to subtitle F.
Sec. 10107. Amendments to subtitle G.
Sec. 10108. Free choice vouchers.
Sec. 10109. Development of standards for financial and administrative
transactions.
Subtitle B--Provisions Relating to Title II
PART I--Medicaid and CHIP
Sec. 10201. Amendments to the Social Security Act and title II of this
Act.
Sec. 10202. Incentives for States to offer home and community-based
services as a long-term care alternative to nursing homes.
Sec. 10203. Extension of funding for CHIP through fiscal year 2015 and
other CHIP-related provisions.
PART II--Support for Pregnant and Parenting Teens and Women
Sec. 10211. Definitions.
[[Page 129]]
Sec. 10212. Establishment of pregnancy assistance fund.
Sec. 10213. Permissible uses of Fund.
Sec. 10214. Appropriations.
PART III--Indian Health Care Improvement
Sec. 10221. Indian health care improvement.
Subtitle C--Provisions Relating to Title III
Sec. 10301. Plans for a Value-Based purchasing program for ambulatory
surgical centers.
Sec. 10302. Revision to national strategy for quality improvement in
health care.
Sec. 10303. Development of outcome measures.
Sec. 10304. Selection of efficiency measures.
Sec. 10305. Data collection; public reporting.
Sec. 10306. Improvements under the Center for Medicare and Medicaid
Innovation.
Sec. 10307. Improvements to the Medicare shared savings program.
Sec. 10308. Revisions to national pilot program on payment bundling.
Sec. 10309. Revisions to hospital readmissions reduction program.
Sec. 10310. Repeal of physician payment update.
Sec. 10311. Revisions to extension of ambulance add-ons.
Sec. 10312. Certain payment rules for long-term care hospital services
and moratorium on the establishment of certain hospitals and
facilities.
Sec. 10313. Revisions to the extension for the rural community hospital
demonstration program.
Sec. 10314. Adjustment to low-volume hospital provision.
Sec. 10315. Revisions to home health care provisions.
Sec. 10316. Medicare DSH.
Sec. 10317. Revisions to extension of section 508 hospital provisions.
Sec. 10318. Revisions to transitional extra benefits under Medicare
Advantage.
Sec. 10319. Revisions to market basket adjustments.
Sec. 10320. Expansion of the scope of, and additional improvements to,
the Independent Medicare Advisory Board.
Sec. 10321. Revision to community health teams.
Sec. 10322. Quality reporting for psychiatric hospitals.
Sec. 10323. Medicare coverage for individuals exposed to environmental
health hazards.
Sec. 10324. Protections for frontier States.
Sec. 10325. Revision to skilled nursing facility prospective payment
system.
Sec. 10326. Pilot testing pay-for-performance programs for certain
Medicare providers.
Sec. 10327. Improvements to the physician quality reporting system.
Sec. 10328. Improvement in part D medication therapy management (MTM)
programs.
Sec. 10329. Developing methodology to assess health plan value.
Sec. 10330. Modernizing computer and data systems of the Centers for
Medicare & Medicaid services to support improvements in care
delivery.
Sec. 10331. Public reporting of performance information.
Sec. 10332. Availability of medicare data for performance measurement.
Sec. 10333. Community-based collaborative care networks.
Sec. 10334. Minority health.
Sec. 10335. Technical correction to the hospital value-based purchasing
program.
Sec. 10336. GAO study and report on Medicare beneficiary access to high-
quality dialysis services.
Subtitle D--Provisions Relating to Title IV
Sec. 10401. Amendments to subtitle A.
Sec. 10402. Amendments to subtitle B.
Sec. 10403. Amendments to subtitle C.
Sec. 10404. Amendments to subtitle D.
Sec. 10405. Amendments to subtitle E.
Sec. 10406. Amendment relating to waiving coinsurance for preventive
services.
Sec. 10407. Better diabetes care.
Sec. 10408. Grants for small businesses to provide comprehensive
workplace wellness programs.
Sec. 10409. Cures Acceleration Network.
Sec. 10410. Centers of Excellence for Depression.
Sec. 10411. Programs relating to congenital heart disease.
Sec. 10412. Automated Defibrillation in Adam's Memory Act.
Sec. 10413. Young women's breast health awareness and support of young
women diagnosed with breast cancer.
Subtitle E--Provisions Relating to Title V
Sec. 10501. Amendments to the Public Health Service Act, the Social
Security Act, and title V of this Act.
[[Page 130]]
Sec. 10502. Infrastructure to Expand Access to Care.
Sec. 10503. Community Health Centers and the National Health Service
Corps Fund.
Sec. 10504. Demonstration project to provide access to affordable care.
Subtitle F--Provisions Relating to Title VI
Sec. 10601. Revisions to limitation on medicare exception to the
prohibition on certain physician referrals for hospitals.
Sec. 10602. Clarifications to patient-centered outcomes research.
Sec. 10603. Striking provisions relating to individual provider
application fees.
Sec. 10604. Technical correction to section 6405.
Sec. 10605. Certain other providers permitted to conduct face to face
encounter for home health services.
Sec. 10606. Health care fraud enforcement.
Sec. 10607. State demonstration programs to evaluate alternatives to
current medical tort litigation.
Sec. 10608. Extension of medical malpractice coverage to free clinics.
Sec. 10609. Labeling changes.
Subtitle G--Provisions Relating to Title VIII
Sec. 10801. Provisions relating to title VIII.
Subtitle H--Provisions Relating to Title IX
Sec. 10901. Modifications to excise tax on high cost employer-sponsored
health coverage.
Sec. 10902. Inflation adjustment of limitation on health flexible
spending arrangements under cafeteria plans.
Sec. 10903. Modification of limitation on charges by charitable
hospitals.
Sec. 10904. Modification of annual fee on medical device manufacturers
and importers.
Sec. 10905. Modification of annual fee on health insurance providers.
Sec. 10906. Modifications to additional hospital insurance tax on high-
income taxpayers.
Sec. 10907. Excise tax on indoor tanning services in lieu of elective
cosmetic medical procedures.
Sec. 10908. Exclusion for assistance provided to participants in State
student loan repayment programs for certain health
professionals.
Sec. 10909. Expansion of adoption credit and adoption assistance
programs.
TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
Subtitle A--Immediate Improvements in Health Care Coverage for All
Americans
SEC. 1001. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.
Part A of title XXVII of the Public Health Service Act (42 U.S.C.
300gg et seq.) is amended--
(1) by striking the part heading and inserting the
following:
``PART A--INDIVIDUAL AND GROUP MARKET REFORMS'';
(2) by redesignating sections 2704 through 2707 <> as sections 2725
through 2728, respectively;
(3) by redesignating sections 2711 through 2713 <> as sections 2731 through
2733, respectively;
(4) by redesignating sections 2721 through 2723 <> as sections 2735 through 2737,
respectively; and
(5) by inserting after section 2702, the following:
[[Page 131]]
``Subpart II--Improving Coverage
``SEC. 2711. <> NO LIFETIME OR ANNUAL LIMITS.
``(a) In General.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage may not
establish--
``(1) lifetime limits on the dollar value of benefits for
any participant or beneficiary; or
``(2) unreasonable annual limits (within the meaning of
section 223 of the Internal Revenue Code of 1986) on the dollar
value of benefits for any participant or beneficiary.
``(b) Per Beneficiary Limits.--Subsection (a) shall not be construed
to prevent a group health plan or health insurance coverage that is not
required to provide essential health benefits under section 1302(b) of
the Patient Protection and Affordable Care Act from placing annual or
lifetime per beneficiary limits on specific covered benefits to the
extent that such limits are otherwise permitted under Federal or State
law.
``SEC. 2712. <> PROHIBITION ON RESCISSIONS.
``A group health plan and a health insurance issuer offering group
or individual health insurance coverage shall not rescind such plan or
coverage with respect to an enrollee once the enrollee is covered under
such plan or coverage involved, except that this section shall not apply
to a covered individual who has performed an act or practice that
constitutes fraud or makes an intentional misrepresentation of material
fact as prohibited by the terms of the plan or coverage. Such plan or
coverage may not be cancelled except with prior notice to the enrollee,
and only as permitted under section 2702(c) or 2742(b).
``SEC. 2713. <> COVERAGE OF PREVENTIVE HEALTH
SERVICES.
``(a) In General.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage shall, at a
minimum provide coverage for and shall not impose any cost sharing
requirements for--
``(1) evidence-based items or services that have in effect a
rating of `A' or `B' in the current recommendations of the
United States Preventive Services Task Force;
``(2) immunizations that have in effect a recommendation
from the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention with respect to the
individual involved; and
``(3) with respect to infants, children, and adolescents,
evidence-informed preventive care and screenings provided for in
the comprehensive guidelines supported by the Health Resources
and Services Administration.
``(4) with respect to women, such additional preventive care
and screenings not described in paragraph (1) as provided for in
comprehensive guidelines supported by the Health Resources and
Services Administration for purposes of this paragraph.
``(5) for the purposes of this Act, and for the purposes of
any other provision of law, the current recommendations of the
United States Preventive Service Task Force regarding breast
cancer screening, mammography, and prevention shall
[[Page 132]]
be considered the most current other than those issued in or
around November 2009.
Nothing in this subsection shall be construed to prohibit a plan or
issuer from providing coverage for services in addition to those
recommended by United States Preventive Services Task Force or to deny
coverage for services that are not recommended by such Task Force.
``(b) Interval.--
``(1) In general.--The Secretary shall establish a minimum
interval between the date on which a recommendation described in
subsection (a)(1) or (a)(2) or a guideline under subsection
(a)(3) is issued and the plan year with respect to which the
requirement described in subsection (a) is effective with
respect to the service described in such recommendation or
guideline.
``(2) Minimum.--The interval described in paragraph (1)
shall not be less than 1 year.
``(c) Value-based Insurance Design.--The Secretary may develop
guidelines to permit a group health plan and a health insurance issuer
offering group or individual health insurance coverage to utilize value-
based insurance designs.
``SEC. 2714. <> EXTENSION OF DEPENDENT COVERAGE.
``(a) In General.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage that provides
dependent coverage of children shall continue to make such coverage
available for an adult child (who is not married) until the child turns
26 years of age. Nothing in this section shall require a health plan or
a health insurance issuer described in the preceding sentence to make
coverage available for a child of a child receiving dependent coverage.
``(b) Regulations.--The Secretary shall promulgate regulations to
define the dependents to which coverage shall be made available under
subsection (a).
``(c) Rule of Construction.--Nothing in this section shall be
construed to modify the definition of `dependent' as used in the
Internal Revenue Code of 1986 with respect to the tax treatment of the
cost of coverage.
``SEC. 2715. <> DEVELOPMENT AND UTILIZATION OF
UNIFORM EXPLANATION OF COVERAGE DOCUMENTS AND STANDARDIZED
DEFINITIONS.
``(a) In <> General.--Not later than 12 months
after the date of enactment of the Patient Protection and Affordable
Care Act, the Secretary shall develop standards for use by a group
health plan and a health insurance issuer offering group or individual
health insurance coverage, in compiling and providing to enrollees a
summary of benefits and coverage explanation that accurately describes
the benefits and coverage under the applicable plan or coverage. In
developing such standards, the Secretary shall consult with the National
Association of Insurance Commissioners (referred to in this section as
the `NAIC'), a working group composed of representatives of health
insurance-related consumer advocacy organizations, health insurance
issuers, health care professionals, patient advocates including those
representing individuals with limited English proficiency, and other
qualified individuals.
``(b) Requirements.--The standards for the summary of benefits and
coverage developed under subsection (a) shall provide for the following:
[[Page 133]]
``(1) Appearance.--The standards shall ensure that the
summary of benefits and coverage is presented in a uniform
format that does not exceed 4 pages in length and does not
include print smaller than 12-point font.
``(2) Language.--The standards shall ensure that the summary
is presented in a culturally and linguistically appropriate
manner and utilizes terminology understandable by the average
plan enrollee.
``(3) Contents.--The standards shall ensure that the summary
of benefits and coverage includes--
``(A) uniform definitions of standard insurance
terms and medical terms (consistent with subsection (g))
so that consumers may compare health insurance coverage
and understand the terms of coverage (or exception to
such coverage);
``(B) a description of the coverage, including cost
sharing for--
``(i) each of the categories of the essential
health benefits described in subparagraphs (A)
through (J) of section 1302(b)(1) of the Patient
Protection and Affordable Care Act; and
``(ii) other benefits, as identified by the
Secretary;
``(C) the exceptions, reductions, and limitations on
coverage;
``(D) the cost-sharing provisions, including
deductible, coinsurance, and co-payment obligations;
``(E) the renewability and continuation of coverage
provisions;
``(F) a coverage facts label that includes examples
to illustrate common benefits scenarios, including
pregnancy and serious or chronic medical conditions and
related cost sharing, such scenarios to be based on
recognized clinical practice guidelines;
``(G) a statement of whether the plan or coverage--
``(i) provides minimum essential coverage (as
defined under section 5000A(f) of the Internal
Revenue Code 1986); and
``(ii) ensures that the plan or coverage share
of the total allowed costs of benefits provided
under the plan or coverage is not less than 60
percent of such costs;
``(H) a statement that the outline is a summary of
the policy or certificate and that the coverage document
itself should be consulted to determine the governing
contractual provisions; and
``(I) a contact number for the consumer to call with
additional questions and an Internet web address where a
copy of the actual individual coverage policy or group
certificate of coverage can be reviewed and obtained.
``(c) Periodic Review and Updating.--The Secretary shall
periodically review and update, as appropriate, the standards developed
under this section.
``(d) Requirement To Provide.--
``(1) In general.--Not later <> than 24
months after the date of enactment of the Patient Protection and
Affordable Care Act, each entity described in paragraph (3)
shall provide, prior
[[Page 134]]
to any enrollment restriction, a summary of benefits and
coverage explanation pursuant to the standards developed by
the Secretary under subsection (a) to--
``(A) an applicant at the time of application;
``(B) an enrollee prior to the time of enrollment or
reenrollment, as applicable; and
``(C) a policyholder or certificate holder at the
time of issuance of the policy or delivery of the
certificate.
``(2) Compliance.--An entity described in paragraph (3) is
deemed to be in compliance with this section if the summary of
benefits and coverage described in subsection (a) is provided in
paper or electronic form.
``(3) Entities in general.--An entity described in this
paragraph is--
``(A) a health insurance issuer (including a group
health plan that is not a self-insured plan) offering
health insurance coverage within the United States; or
``(B) in the case of a self-insured group health
plan, the plan sponsor or designated administrator of
the plan (as such terms are defined in section 3(16) of
the Employee Retirement Income Security Act of 1974).
``(4) Notice <> of modifications.--If a
group health plan or health insurance issuer makes any material
modification in any of the terms of the plan or coverage
involved (as defined for purposes of section 102 of the Employee
Retirement Income Security Act of 1974) that is not reflected in
the most recently provided summary of benefits and coverage, the
plan or issuer shall provide notice of such modification to
enrollees not later than 60 days prior to the date on which such
modification will become effective.
``(e) Preemption.--The standards developed under subsection (a)
shall preempt any related State standards that require a summary of
benefits and coverage that provides less information to consumers than
that required to be provided under this section, as determined by the
Secretary.
``(f) Failure To Provide.--An entity <> described in
subsection (d)(3) that willfully fails to provide the information
required under this section shall be subject to a fine of not more than
$1,000 for each such failure. Such failure with respect to each enrollee
shall constitute a separate offense for purposes of this subsection.
``(g) Development of Standard Definitions.--
``(1) In general.--The
Secretary <> shall, by regulation, provide
for the development of standards for the definitions of terms
used in health insurance coverage, including the insurance-
related terms described in paragraph (2) and the medical terms
described in paragraph (3).
``(2) Insurance-related terms.--The insurance-related terms
described in this paragraph are premium, deductible, co-
insurance, co-payment, out-of-pocket limit, preferred provider,
non-preferred provider, out-of-network co-payments, UCR (usual,
customary and reasonable) fees, excluded services, grievance and
appeals, and such other terms as the Secretary determines are
important to define so that consumers may compare health
insurance coverage and understand the terms of their coverage.
[[Page 135]]
``(3) Medical terms.--The medical terms described in this
paragraph are hospitalization, hospital outpatient care,
emergency room care, physician services, prescription drug
coverage, durable medical equipment, home health care, skilled
nursing care, rehabilitation services, hospice services,
emergency medical transportation, and such other terms as the
Secretary determines are important to define so that consumers
may compare the medical benefits offered by health insurance and
understand the extent of those medical benefits (or exceptions
to those benefits).
``SEC. 2716. <> PROHIBITION OF DISCRIMINATION
BASED ON SALARY.
``(a) In General.--The plan sponsor of a group health plan (other
than a self-insured plan) may not establish rules relating to the health
insurance coverage eligibility (including continued eligibility) of any
full-time employee under the terms of the plan that are based on the
total hourly or annual salary of the employee or otherwise establish
eligibility rules that have the effect of discriminating in favor of
higher wage employees.
``(b) Limitation.--Subsection (a) shall not be construed to prohibit
a plan sponsor from establishing contribution requirements for
enrollment in the plan or coverage that provide for the payment by
employees with lower hourly or annual compensation of a lower dollar or
percentage contribution than the payment required of similarly situated
employees with a higher hourly or annual compensation.
``SEC. 2717. <> ENSURING THE QUALITY OF CARE.
``(a) Quality Reporting.--
``(1) In general.--Not later than 2 years after the date of
enactment of the Patient Protection and Affordable Care Act, the
Secretary, in consultation with experts in health care quality
and stakeholders, shall develop reporting requirements for use
by a group health plan, and a health insurance issuer offering
group or individual health insurance coverage, with respect to
plan or coverage benefits and health care provider reimbursement
structures that--
``(A) improve health outcomes through the
implementation of activities such as quality reporting,
effective case management, care coordination, chronic
disease management, and medication and care compliance
initiatives, including through the use of the medical
homes model as defined for purposes of section 3602 of
the Patient Protection and Affordable Care Act, for
treatment or services under the plan or coverage;
``(B) implement activities to prevent hospital
readmissions through a comprehensive program for
hospital discharge that includes patient-centered
education and counseling, comprehensive discharge
planning, and post discharge reinforcement by an
appropriate health care professional;
``(C) implement activities to improve patient safety
and reduce medical errors through the appropriate use of
best clinical practices, evidence based medicine, and
health information technology under the plan or
coverage; and
``(D) implement wellness and health promotion
activities.
``(2) Reporting requirements.--
[[Page 136]]
``(A) In general.--A group health plan and a health
insurance issuer offering group or individual health
insurance coverage shall annually submit to the
Secretary, and to enrollees under the plan or coverage,
a report on whether the benefits under the plan or
coverage satisfy the elements described in subparagraphs
(A) through (D) of paragraph (1).
``(B) Timing of reports.--A report under
subparagraph (A) shall be made available to an enrollee
under the plan or coverage during each open enrollment
period.
``(C) Availability of reports.--The Secretary shall
make reports submitted under subparagraph (A) available
to the public through an Internet website.
``(D) Penalties.--In developing the reporting
requirements under paragraph (1), the Secretary may
develop and impose appropriate penalties for non-
compliance with such requirements.
``(E) Exceptions.--In developing the reporting
requirements under paragraph (1), the Secretary may
provide for exceptions to such requirements for group
health plans and health insurance issuers that
substantially meet the goals of this section.
``(b) Wellness and Prevention Programs.--For purposes of subsection
(a)(1)(D), wellness and health promotion activities may include
personalized wellness and prevention services, which are coordinated,
maintained or delivered by a health care provider, a wellness and
prevention plan manager, or a health, wellness or prevention services
organization that conducts health risk assessments or offers ongoing
face-to-face, telephonic or web-based intervention efforts for each of
the program's participants, and which may include the following wellness
and prevention efforts:
``(1) Smoking cessation.
``(2) Weight management.
``(3) Stress management.
``(4) Physical fitness.
``(5) Nutrition.
``(6) Heart disease prevention.
``(7) Healthy lifestyle support.
``(8) Diabetes prevention.
``(c) Regulations.--Not <> later than 2 years after
the date of enactment of the Patient Protection and Affordable Care Act,
the Secretary shall promulgate regulations that provide criteria for
determining whether a reimbursement structure is described in subsection
(a).
``(d) Study and Report.--Not later than 180 days after the date on
which regulations are promulgated under subsection (c), the Government
Accountability Office shall review such regulations and conduct a study
and submit to the Committee on Health, Education, Labor, and Pensions of
the Senate and the Committee on Energy and Commerce of the House of
Representatives a report regarding the impact the activities under this
section have had on the quality and cost of health care.
``SEC. 2718. BRINGING <> DOWN THE COST OF HEALTH
CARE COVERAGE.
``(a) Clear <> Accounting for Costs.--A health
insurance issuer offering group or individual health insurance coverage
shall, with
[[Page 137]]
respect to each plan year, submit to the Secretary a report concerning
the percentage of total premium revenue that such coverage expends--
``(1) on reimbursement for clinical services provided to
enrollees under such coverage;
``(2) for activities that improve health care quality; and
``(3) on all other non-claims costs, including an
explanation of the nature of such costs, and excluding State
taxes and licensing or regulatory fees.
The <> Secretary shall make
reports received under this section available to the public on the
Internet website of the Department of Health and Human Services.
``(b) Ensuring That Consumers Receive Value for Their Premium
Payments.--
``(1) Requirement to provide value for premium payments.--A
health insurance issuer offering group or individual health
insurance coverage shall, with respect to each plan year,
provide an annual rebate to each enrollee under such coverage,
on a pro rata basis, in an amount that is equal to the amount by
which premium revenue expended by the issuer on activities
described in subsection (a)(3) exceeds--
``(A) with respect to a health insurance issuer
offering coverage in the group market, 20 percent, or
such lower percentage as a State may by regulation
determine; or
``(B) with respect to a health insurance issuer
offering coverage in the individual market, 25 percent,
or such lower percentage as a State may by regulation
determine, except that such percentage shall be adjusted
to the extent the Secretary determines that the
application of such percentage with a State may
destabilize the existing individual market in such
State.
``(2) Consideration in setting percentages.--In determining
the percentages under paragraph (1), a State shall seek to
ensure adequate participation by health insurance issuers,
competition in the health insurance market in the State, and
value for consumers so that premiums are used for clinical
services and quality improvements.
``(3) Termination.--The provisions of this subsection shall
have no force or effect after December 31, 2013.
``(c) Standard Hospital Charges.--Each hospital operating within the
United States shall for each year establish (and update) and make public
(in accordance with guidelines developed by the Secretary) a list of the
hospital's standard charges for items and services provided by the
hospital, including for diagnosis-related groups established under
section 1886(d)(4) of the Social Security Act.
``(d) Definitions.--The Secretary, in consultation with the National
Association of Insurance Commissions, shall establish uniform
definitions for the activities reported under subsection (a).
``SEC. 2719. <> APPEALS PROCESS.
``A group health plan and a health insurance issuer offering group
or individual health insurance coverage shall implement an effective
appeals process for appeals of coverage determinations and claims, under
which the plan or issuer shall, at a minimum--
``(1) have in effect an internal claims appeal process;
[[Page 138]]
``(2) provide <> notice to enrollees,
in a culturally and linguistically appropriate manner, of
available internal and external appeals processes, and the
availability of any applicable office of health insurance
consumer assistance or ombudsman established under section 2793
to assist such enrollees with the appeals processes;
``(3) allow an enrollee to review their file, to present
evidence and testimony as part of the appeals process, and to
receive continued coverage pending the outcome of the appeals
process; and
``(4) provide an external review process for such plans and
issuers that, at a minimum, includes the consumer protections
set forth in the Uniform External Review Model Act promulgated
by the National Association of Insurance Commissioners and is
binding on such plans.''.
SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.
Part C of title XXVII of the Public Health Service Act (42 U.S.C.
300gg-91 et seq.) is amended by adding at the end the following:
``SEC. 2793. <> HEALTH INSURANCE CONSUMER
INFORMATION.
``(a) In <> General.--The Secretary shall award
grants to States to enable such States (or the Exchanges operating in
such States) to establish, expand, or provide support for--
``(1) offices of health insurance consumer assistance; or
``(2) health insurance ombudsman programs.
``(b) Eligibility.--
``(1) In general.--To be eligible to receive a grant, a
State shall designate an independent office of health insurance
consumer assistance, or an ombudsman, that, directly or in
coordination with State health insurance regulators and consumer
assistance organizations, receives and responds to inquiries and
complaints concerning health insurance coverage with respect to
Federal health insurance requirements and under State law.
``(2) Criteria.--A State that receives a grant under this
section shall comply with criteria established by the Secretary
for carrying out activities under such grant.
``(c) Duties.--The office of health insurance consumer assistance or
health insurance ombudsman shall--
``(1) assist with the filing of complaints and appeals,
including filing appeals with the internal appeal or grievance
process of the group health plan or health insurance issuer
involved and providing information about the external appeal
process;
``(2) collect, track, and quantify problems and inquiries
encountered by consumers;
``(3) educate consumers on their rights and responsibilities
with respect to group health plans and health insurance
coverage;
``(4) assist consumers with enrollment in a group health
plan or health insurance coverage by providing information,
referral, and assistance; and
``(5) resolve problems with obtaining premium tax credits
under section 36B of the Internal Revenue Code of 1986.
[[Page 139]]
``(d) Data Collection.--As a condition of receiving a grant under
subsection (a), an office of health insurance consumer assistance or
ombudsman program shall be required to collect and report data to the
Secretary on the types of problems and inquiries encountered by
consumers. The Secretary shall utilize such data to identify areas where
more enforcement action is necessary and shall share such information
with State insurance regulators, the Secretary of Labor, and the
Secretary of the Treasury for use in the enforcement activities of such
agencies.
``(e) Funding.--
``(1) Initial funding.--There is hereby appropriated to the
Secretary, out of any funds in the Treasury not otherwise
appropriated, $30,000,000 for the first fiscal year for which
this section applies to carry out this section. Such amount
shall remain available without fiscal year limitation.
``(2) Authorization for subsequent years.--There is
authorized to be appropriated to the Secretary for each fiscal
year following the fiscal year described in paragraph (1), such
sums as may be necessary to carry out this section.''.
SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.
Part C of title XXVII of the Public Health Service Act (42 U.S.C.
300gg-91 et seq.), as amended by section 1002, is further amended by
adding at the end the following:
``SEC. 2794. <> ENSURING THAT CONSUMERS GET
VALUE FOR THEIR DOLLARS.
``(a) Initial Premium Review Process.--
``(1) In <> general.--The Secretary,
in conjunction with States, shall establish a process for the
annual review, beginning with the 2010 plan year and subject to
subsection (b)(2)(A), of unreasonable increases in premiums for
health insurance coverage.
``(2) Justification and disclosure.--The process established
under paragraph (1) shall require health insurance issuers to
submit to the Secretary and the relevant State a justification
for an unreasonable premium increase prior to the implementation
of the <> increase. Such issuers shall
prominently post such information on their Internet 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 secretary 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 Secretary 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 the
State Exchange about whether particular health insurance
issuers should be excluded from participation in the
Exchange based on a pattern or practice of excessive or
unjustified premium increases.
``(2) Monitoring by secretary of premium increases.--
``(A) In general.--Beginning <> with plan years beginning in 2014, the
Secretary, in conjunction with the States
[[Page 140]]
and consistent with the provisions of subsection (a)(2),
shall monitor premium increases of health insurance
coverage offered through an Exchange and outside of an
Exchange.
``(B) Consideration in opening exchange.--In
determining under section 1312(f)(2)(B) of the Patient
Protection and Affordable Care Act whether to offer
qualified health plans in the large group market through
an Exchange, the State shall take into account any
excess of premium growth outside of the Exchange as
compared to the rate of such growth inside the Exchange.
``(c) Grants in Support of Process.--
``(1) Premium review grants during 2010 through 2014.--The
Secretary shall carry out a program to award grants to States
during the 5-year period beginning with fiscal year 2010 to
assist such States 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 Secretary under subsection (b)(1).
``(2) Funding.--
``(A) In general.--Out of all funds in the Treasury
not otherwise appropriated, there are appropriated to
the Secretary $250,000,000, to be available for
expenditure for grants under paragraph (1) and
subparagraph (B).
``(B) Further availability for insurance reform and
consumer protection.--If the amounts appropriated under
subparagraph (A) are not fully obligated under grants
under paragraph (1) by the end of fiscal year 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 part A.
``(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. 1004. <> EFFECTIVE DATES.
(a) In General.--Except as provided for in subsection (b), this
subtitle (and the amendments made by this subtitle) shall become
effective for plan years beginning on or after the date that is 6 months
after the date of enactment of this Act, except that the amendments made
by sections 1002 and 1003 shall become effective for fiscal years
beginning with fiscal year 2010.
(b) Special Rule.--The amendments made by sections 1002 and 1003
shall take effect on the date of enactment of this Act.
[[Page 141]]
Subtitle B--Immediate Actions to Preserve and Expand Coverage
SEC. 1101. IMMEDIATE <> ACCESS TO INSURANCE FOR
UNINSURED INDIVIDUALS WITH A PREEXISTING CONDITION.
(a) In General.--Not <> later than 90
days after the date of enactment of this Act, the Secretary shall
establish a temporary high risk health insurance pool program to provide
health insurance coverage for eligible individuals during the period
beginning on the date on which such program is established and ending on
January 1, 2014.
(b) Administration.--
(1) In general.--The Secretary may carry out the program
under this section directly or through contracts to eligible
entities.
(2) Eligible entities.--To be eligible for a contract under
paragraph (1), an entity shall--
(A) be a State or nonprofit private entity;
(B) submit to the Secretary an application at such
time, in such manner, and containing such information as
the Secretary may require; and
(C) agree to utilize contract funding to establish
and administer a qualified high risk pool for eligible
individuals.
(3) Maintenance of effort.--To be eligible to enter into a
contract with the Secretary under this subsection, a State shall
agree not to reduce the annual amount the State expended for the
operation of one or more State high risk pools during the year
preceding the year in which such contract is entered into.
(c) Qualified High Risk Pool.--
(1) In general.--Amounts made available under this section
shall be used to establish a qualified high risk pool that meets
the requirements of paragraph (2).
(2) Requirements.--A qualified high risk pool meets the
requirements of this paragraph if such pool--
(A) provides to all eligible individuals health
insurance coverage that does not impose any preexisting
condition exclusion with respect to such coverage;
(B) provides health insurance coverage--
(i) in which the issuer's share of the total
allowed costs of benefits provided under such
coverage is not less than 65 percent of such
costs; and
(ii) that has an out of pocket limit not
greater than the applicable amount described in
section 223(c)(2) of the Internal Revenue Code of
1986 for the year involved, except that the
Secretary may modify such limit if necessary to
ensure the pool meets the actuarial value limit
under clause (i);
(C) ensures that with respect to the premium rate
charged for health insurance coverage offered to
eligible individuals through the high risk pool, such
rate shall--
(i) except as provided in clause (ii), vary
only as provided for under section 2701 of the
Public Health Service Act (as amended by this Act
and notwithstanding the date on which such
amendments take effect);
[[Page 142]]
(ii) vary on the basis of age by a factor of
not greater than 4 to 1; and
(iii) be established at a standard rate for a
standard population; and
(D) meets any other requirements determined
appropriate by the Secretary.
(d) Eligible Individual.--An individual shall be deemed to be an
eligible individual for purposes of this section if such individual--
(1) is a citizen or national of the United States or is
lawfully present in the United States (as determined in
accordance with section 1411);
(2) has not been covered under creditable coverage (as
defined in section 2701(c)(1) of the Public Health Service Act
as in effect on the date of enactment of this Act) during the 6-
month period prior to the date on which such individual is
applying for coverage through the high risk pool; and
(3) has a pre-existing condition, as determined in a manner
consistent with guidance issued by the Secretary.
(e) Protection Against Dumping Risk 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 under this
section 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 coverage
through 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
[[Page 143]]
from applying or enforcing such paragraph or other provisions
under law with respect to health insurance issuers.
(f) Oversight.--The Secretary shall establish--
(1) an appeals process to enable individuals to appeal a
determination under this section; and
(2) procedures to protect against waste, fraud, and abuse.
(g) 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 the administrative
costs of) the high risk pool under this section that are in
excess of the amount of premiums collected from 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 the payment
of the expenses of the high risk pool will be less than the
actual amount of such expenses, the Secretary shall make such
adjustments as are necessary to eliminate such deficit.
(3) Termination of authority.--
(A) In general.--Except as provided in subparagraph
(B), coverage of eligible individuals under a high risk
pool in a State shall terminate on January 1, 2014.
(B) Transition <> to exchange.--
The Secretary shall develop procedures to provide for
the transition of eligible individuals enrolled in
health insurance coverage offered through a high risk
pool established under this section into qualified
health plans offered through an Exchange. Such
procedures shall ensure that there is no lapse in
coverage with respect to the individual and may extend
coverage after the termination of the risk pool
involved, if the Secretary determines necessary to avoid
such a lapse.
(4) Limitations.--The Secretary has the authority to stop
taking applications for participation in the program under this
section to comply with the funding limitation provided for in
paragraph (1).
(5) Relation to state laws.--The standards established under
this section shall supersede any State law or regulation (other
than State licensing laws or State laws relating to plan
solvency) with respect to qualified high risk pools which are
established in accordance with this section.
SEC. 1102. <> REINSURANCE FOR EARLY RETIREES.
(a) Administration.--
(1) In general.--Not <> later
than 90 days after the date of enactment of this Act, the
Secretary shall establish a temporary reinsurance program to
provide reimbursement to participating employment-based plans
for a portion of the cost of providing health insurance coverage
to early retirees (and to the eligible spouses, surviving
spouses, and dependents of such retirees) during the period
beginning on the date on which such program is established and
ending on January 1, 2014.
(2) Reference.--In this section:
(A) Health benefits.--The term ``health benefits''
means medical, surgical, hospital, prescription drug,
and such other benefits as shall be determined by the
Secretary,
[[Page 144]]
whether self-funded, or delivered through the purchase
of insurance or otherwise.
(B) Employment-based plan.--The term ``employment-
based plan'' means a group health benefits plan that--
(i) is--
(I) maintained by one or more
current or former employers (including
without limitation any State or local
government or political subdivision
thereof), employee organization, 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 early
retirees.
(C) Early retirees.--The term ``early retirees''
means individuals who are age 55 and older but are not
eligible for coverage under title XVIII of the Social
Security Act, and who are not active employees of an
employer maintaining, or currently contributing to, the
employment-based plan or of any employer that has made
substantial contributions to fund such plan.
(b) Participation.--
(1) Employment-based plan eligibility.--A participating
employment-based plan is an employment-based plan that--
(A) meets the requirements of paragraph (2) with
respect to health benefits provided under the plan; and
(B) submits 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) Employment-based health benefits.--An employment-based
plan meets the requirements of this paragraph if the plan--
(A) implements programs and procedures to generate
cost-savings with respect to participants with chronic
and high-cost conditions;
(B) provides documentation of the actual cost of
medical claims involved; and
(C) is certified <> by the
Secretary.
(c) Payments.--
(1) Submission of claims.--
(A) In general.--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.--Claims 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 health benefits
provided to an early retiree or the spouse, surviving
spouse, or dependent of such retiree. In determining the
amount of a claim for purposes of this subsection, the
participating
[[Page 145]]
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 benefit. For purposes of determining the
amount of any such claim, the costs paid by the early
retiree or the retiree's spouse, surviving spouse, or
dependent in the form of deductibles, co-payments, or
co-insurance shall be included in the amounts paid by
the participating employment-based plan.
(2) Program payments.--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 exceed $15,000, subject to the limits contained in
paragraph (3).
(3) Limit.--To be eligible for reimbursement under the
program, a claim submitted by a participating employment-based
plan shall not be less than $15,000 nor greater than $90,000.
Such amounts shall be adjusted each fiscal year based on the
percentage increase in the Medical Care Component of the
Consumer Price Index for all urban consumers (rounded to the
nearest multiple of $1,000) for the year involved.
(4) Use of payments.--Amounts paid to a participating
employment-based plan under this subsection shall be used to
lower costs for the plan. Such payments may be used to reduce
premium costs for an entity described in subsection (a)(2)(B)(i)
or to reduce premium contributions, co-payments, deductibles,
co-insurance, or other out-of-pocket costs for plan
participants. Such payments shall not be used as general
revenues for an entity described in subsection (a)(2)(B)(i). The
Secretary shall develop a mechanism to monitor the appropriate
use of such payments by such entities.
(5) Payments not treated as income.--Payments received under
this subsection shall not be included in determining the gross
income of an entity described in subsection (a)(2)(B)(i) that is
maintaining or currently contributing to a participating
employment-based plan.
(6) Appeals.--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.
(d) Audits.--The Secretary shall conduct annual audits of claims
data submitted by participating employment-based plans under this
section to ensure that such plans are in compliance with the
requirements of this section.
(e) Funding.--There is appropriated to the Secretary, out of any
moneys in the Treasury not otherwise appropriated, $5,000,000,000 to
carry out the program under this section. Such funds shall be available
without fiscal year limitation.
(f) Limitation.--The Secretary has the authority to stop taking
applications for participation in the program based on the availability
of funding under subsection (e).
[[Page 146]]
SEC. 1103. IMMEDIATE <> INFORMATION THAT
ALLOWS CONSUMERS TO IDENTIFY AFFORDABLE COVERAGE OPTIONS.
(a) Internet Portal to Affordable Coverage Options.--
(1) Immediate establishment.--Not later than July 1, 2010,
the Secretary, in consultation with the States, shall establish
a mechanism, including an Internet website, through which a
resident of any State may identify affordable health insurance
coverage options in that State.
(2) Connecting to affordable coverage.--An Internet website
established under paragraph (1) shall, to the extent
practicable, provide ways for residents of any State to receive
information on at least the following coverage options:
(A) Health insurance coverage offered by health
insurance issuers, other than coverage that provides
reimbursement only for the treatment or mitigation of--
(i) a single disease or condition; or
(ii) an unreasonably limited set of diseases
or conditions (as determined by the Secretary);
(B) Medicaid coverage under title XIX of the Social
Security Act.
(C) Coverage under title XXI of the Social Security
Act.
(D) A State health benefits high risk pool, to the
extent that such high risk pool is offered in such
State; and
(E) Coverage under a high risk pool under section
1101.
(b) Enhancing Comparative Purchasing Options.--
(1) In general.--Not later <> than 60 days after the date of enactment of this Act,
the Secretary shall develop a standardized format to be used for
the presentation of information relating to the coverage options
described in subsection (a)(2). Such format shall, at a minimum,
require the inclusion of information on the percentage of total
premium revenue expended on nonclinical costs (as reported under
section 2718(a) of the Public Health Service Act), eligibility,
availability, premium rates, and cost sharing with respect to
such coverage options and be consistent with the standards
adopted for the uniform explanation of coverage as provided for
in section 2715 of the Public Health Service Act.
(2) Use of format.--The Secretary shall utilize the format
developed under paragraph (1) in compiling information
concerning coverage options on the Internet website established
under subsection (a).
(c) Authority To Contract.--The Secretary may carry out this section
through contracts entered into with qualified entities.
SEC. 1104. ADMINISTRATIVE SIMPLIFICATION.
(a) Purpose of Administrative Simplification.--Section 261 of the
Health Insurance Portability and Accountability Act of 1996 (42 U.S.C.
1320d note) is amended--
(1) by inserting ``uniform'' before ``standards''; and
(2) by inserting ``and to reduce the clerical burden on
patients, health care providers, and health plans'' before the
period at the end.
(b) Operating Rules for Health Information Transactions.--
[[Page 147]]
(1) Definition of operating rules.--Section 1171 of the
Social Security Act (42 U.S.C. 1320d) is amended by adding at
the end the following:
``(9) Operating rules.--The term `operating rules' means the
necessary business rules and guidelines for the electronic
exchange of information that are not defined by a standard or
its implementation specifications as adopted for purposes of
this part.''.
(2) Transaction standards; operating rules and compliance.--
Section 1173 of the Social Security Act (42 U.S.C. 1320d-2) is
amended--
(A) in subsection (a)(2), by adding at the end the
following new subparagraph:
``(J) Electronic funds transfers.'';
(B) in subsection (a), by adding at the end the
following new paragraph:
``(4) Requirements for financial and administrative
transactions.--
``(A) In general.--The standards and associated
operating rules adopted by the Secretary shall--
``(i) to the extent feasible and appropriate,
enable determination of an individual's
eligibility and financial responsibility for
specific services prior to or at the point of
care;
``(ii) be comprehensive, requiring minimal
augmentation by paper or other communications;
``(iii) provide for timely acknowledgment,
response, and status reporting that supports a
transparent claims and denial management process
(including adjudication and appeals); and
``(iv) describe all data elements (including
reason and remark codes) in unambiguous terms,
require that such data elements be required or
conditioned upon set values in other fields, and
prohibit additional conditions (except where
necessary to implement State or Federal law, or to
protect against fraud and abuse).
``(B) Reduction of clerical burden.--In adopting
standards and operating rules for the transactions
referred to under paragraph (1), the Secretary shall
seek to reduce the number and complexity of forms
(including paper and electronic forms) and data entry
required by patients and providers.''; and
(C) by adding at the end the following new
subsections:
``(g) Operating Rules.--
``(1) In general.--The Secretary shall adopt a single set of
operating rules for each transaction referred to under
subsection (a)(1) with the goal of creating as much uniformity
in the implementation of the electronic standards as possible.
Such operating rules shall be consensus-based and reflect the
necessary business rules affecting health plans and health care
providers and the manner in which they operate pursuant to
standards issued under Health Insurance Portability and
Accountability Act of 1996.
``(2) Operating rules development.--In adopting operating
rules under this subsection, the Secretary shall consider
recommendations for operating rules developed by a qualified
nonprofit entity that meets the following requirements:
[[Page 148]]
``(A) The entity focuses its mission on
administrative simplification.
``(B) The entity demonstrates a multi-stakeholder
and consensus-based process for development of operating
rules, including representation by or participation from
health plans, health care providers, vendors, relevant
Federal agencies, and other standard development
organizations.
``(C) The entity has a public set of guiding
principles that ensure the operating rules and process
are open and transparent, and supports nondiscrimination
and conflict of interest policies that demonstrate a
commitment to open, fair, and nondiscriminatory
practices.
``(D) The entity builds on the transaction standards
issued under Health Insurance Portability and
Accountability Act of 1996.
``(E) The entity allows for public review and
updates of the operating rules.
``(3) Review and recommendations.--The National Committee on
Vital and Health Statistics shall--
``(A) advise the Secretary as to whether a nonprofit
entity meets the requirements under paragraph (2);
``(B) review the operating rules developed and
recommended by such nonprofit entity;
``(C) determine whether such operating rules
represent a consensus view of the health care
stakeholders and are consistent with and do not conflict
with other existing standards;
``(D) evaluate whether such operating rules are
consistent with electronic standards adopted for health
information technology; and
``(E) submit to the Secretary a recommendation as to
whether the Secretary should adopt such operating rules.
``(4) Implementation.--
``(A) In general.--
The <> Secretary shall adopt
operating rules under this subsection, by regulation in
accordance with subparagraph (C), following
consideration of the operating rules developed by the
non-profit entity described in paragraph (2) and the
recommendation submitted by the National Committee on
Vital and Health Statistics under paragraph (3)(E) and
having ensured consultation with providers.
``(B) Adoption <> requirements;
effective dates.--
``(i) Eligibility for a health plan and health
claim status.--The set of operating rules for
eligibility for a health plan and health claim
status transactions shall be adopted not later
than July 1, 2011, in a manner ensuring that such
operating rules are effective not later than
January 1, 2013, and may allow for the use of a
machine readable identification card.
``(ii) Electronic funds transfers and health
care payment and remittance advice.--The set of
operating rules for electronic funds transfers and
health care payment and remittance advice
transactions shall--
``(I) allow for automated
reconciliation of the electronic payment
with the remittance advice; and
[[Page 149]]
``(II) be adopted not later than
July 1, 2012, in a manner ensuring that
such operating rules are effective not
later than January 1, 2014.
``(iii) Health claims or equivalent encounter
information, enrollment and disenrollment in a
health plan, health plan premium payments,
referral certification and authorization.--The set
of operating rules for health claims or equivalent
encounter information, enrollment and
disenrollment in a health plan, health plan
premium payments, and referral certification and
authorization transactions shall be adopted not
later than July 1, 2014, in a manner ensuring that
such operating rules are effective not later than
January 1, 2016.
``(C) Expedited rulemaking.--The Secretary shall
promulgate an interim final rule applying any standard
or operating rule recommended by the National Committee
on Vital and Health Statistics pursuant to paragraph
(3). The Secretary <> shall
accept and consider public comments on any interim final
rule published under this subparagraph for 60 days after
the date of such publication.
``(h) Compliance.--
``(1) Health <> plan certification.--
``(A) Eligibility for a health plan, health claim
status, electronic funds transfers, health care payment
and remittance advice.--
Not <> later than December 31,
2013, a health plan shall file a statement with the
Secretary, in such form as the Secretary may require,
certifying that the data and information systems for
such plan are in compliance with any applicable
standards (as described under paragraph (7) of section
1171) and associated operating rules (as described under
paragraph (9) of such section) for electronic funds
transfers, eligibility for a health plan, health claim
status, and health care payment and remittance advice,
respectively.
``(B) Health claims or equivalent encounter
information, enrollment and disenrollment in a health
plan, health plan premium payments, health claims
attachments, referral certification and authorization.--
Not later than December 31, 2015, a health plan shall
file a statement with the Secretary, in such form as the
Secretary may require, certifying that the data and
information systems for such plan are in compliance with
any applicable standards and associated operating rules
for health claims or equivalent encounter information,
enrollment and disenrollment in a health plan, health
plan premium payments, health claims attachments, and
referral certification and authorization, respectively.
A health plan shall provide the same level of
documentation to certify compliance with such
transactions as is required to certify compliance with
the transactions specified in subparagraph (A).
``(2) Documentation of compliance.--A health plan shall
provide the Secretary, in such form as the Secretary may
require, with adequate documentation of compliance with the
standards and operating rules described under paragraph (1). A
health plan shall not be considered to have provided adequate
[[Page 150]]
documentation and shall not be certified as being in compliance
with such standards, unless the health plan--
``(A) demonstrates to the Secretary that the plan
conducts the electronic transactions specified in
paragraph (1) in a manner that fully complies with the
regulations of the Secretary; and
``(B) provides documentation showing that the plan
has completed end-to-end testing for such transactions
with their partners, such as hospitals and physicians.
``(3) Service contracts.--A health plan shall be required to
ensure that any entities that provide services pursuant to a
contract with such health plan shall comply with any applicable
certification and compliance requirements (and provide the
Secretary with adequate documentation of such compliance) under
this subsection.
``(4) Certification by outside entity.--The Secretary may
designate independent, outside entities to certify that a health
plan has complied with the requirements under this subsection,
provided that the certification standards employed by such
entities are in accordance with any standards or operating rules
issued by the Secretary.
``(5) Compliance with revised standards and operating
rules.--
``(A) In general.--A <> health
plan (including entities described under paragraph (3))
shall file a statement with the Secretary, in such form
as the Secretary may require, certifying that the data
and information systems for such plan are in compliance
with any applicable revised standards and associated
operating rules under this subsection for any interim
final rule promulgated by the Secretary under subsection
(i) that--
``(i) amends any standard or operating rule
described under paragraph (1) of this subsection;
or
``(ii) establishes a standard (as described
under subsection (a)(1)(B)) or associated
operating rules (as described under subsection
(i)(5)) for any other financial and administrative
transactions.
``(B) Date of compliance.--A health plan shall
comply with such requirements not later than the
effective date of the applicable standard or operating
rule.
``(6) Audits of health plans.--The Secretary shall conduct
periodic audits to ensure that health plans (including entities
described under paragraph (3)) are in compliance with any
standards and operating rules that are described under paragraph
(1) or subsection (i)(5).
``(i) Review <> and Amendment of Standards and
Operating Rules.--
``(1) Establishment.--Not later than January 1, 2014, the
Secretary shall establish a review committee (as described under
paragraph (4)).
``(2) Evaluations and reports.--
``(A) Hearings.--Not later than April 1, 2014, and
not less than biennially thereafter, the Secretary,
acting through the review committee, shall conduct
hearings to evaluate and review the adopted standards
and operating rules established under this section.
[[Page 151]]
``(B) Report.--Not later than July 1, 2014, and not
less than biennially thereafter, the review committee
shall provide recommendations for updating and improving
such standards and operating rules. The review committee
shall recommend a single set of operating rules per
transaction standard and maintain the goal of creating
as much uniformity as possible in the implementation of
the electronic standards.
``(3) Interim final rulemaking.--
``(A) In general.--Any recommendations to amend
adopted standards and operating rules that have been
approved by the review committee and reported to the
Secretary under paragraph (2)(B) shall be adopted by the
Secretary through promulgation of an interim final rule
not later than 90 days after receipt of the committee's
report.
``(B) Public comment.--
``(i) Public comment period.--The Secretary
shall accept and consider public comments on any
interim final rule published under this paragraph
for 60 days after the date of such publication.
``(ii) Effective date.--The effective date of
any amendment to existing standards or operating
rules that is adopted through an interim final
rule published under this paragraph shall be 25
months following the close of such public comment
period.
``(4) Review committee.--
``(A) Definition.--For the purposes of this
subsection, the term `review committee' means a
committee chartered by or within the Department of
Health and Human services that has been designated by
the Secretary to carry out this subsection, including--
``(i) the National Committee on Vital and
Health Statistics; or
``(ii) any appropriate committee as determined
by the Secretary.
``(B) Coordination of hit standards.--In developing
recommendations under this subsection, the review
committee shall ensure coordination, as appropriate,
with the standards that support the certified electronic
health record technology approved by the Office of the
National Coordinator for Health Information Technology.
``(5) Operating rules for other standards adopted by the
secretary.--The Secretary shall adopt a single set of operating
rules (pursuant to the process described under subsection (g))
for any transaction for which a standard had been adopted
pursuant to subsection (a)(1)(B).
``(j) Penalties.--
``(1) Penalty fee.--
``(A) In general.--Not <> later
than April 1, 2014, and annually thereafter, the
Secretary shall assess a penalty fee (as determined
under subparagraph (B)) against a health plan that has
failed to meet the requirements under subsection (h)
with respect to certification and documentation of
compliance with--
``(i) the standards and associated operating
rules described under paragraph (1) of such
subsection; and
[[Page 152]]
``(ii) a standard (as described under
subsection (a)(1)(B)) and associated operating
rules (as described under subsection (i)(5)) for
any other financial and administrative
transactions.
``(B) Fee amount.--Subject to subparagraphs (C),
(D), and (E), the Secretary shall assess a penalty fee
against a health plan in the amount of $1 per covered
life until certification is complete. The penalty shall
be assessed per person covered by the plan for which its
data systems for major medical policies are not in
compliance and shall be imposed against the health plan
for each day that the plan is not in compliance with the
requirements under subsection (h).
``(C) Additional penalty for misrepresentation.--A
health plan that knowingly provides inaccurate or
incomplete information in a statement of certification
or documentation of compliance under subsection (h)
shall be subject to a penalty fee that is double the
amount that would otherwise be imposed under this
subsection.
``(D) Annual fee increase.--The amount of the
penalty fee imposed under this subsection shall be
increased on an annual basis by the annual percentage
increase in total national health care expenditures, as
determined by the Secretary.
``(E) Penalty limit.--A penalty fee assessed against
a health plan under this subsection shall not exceed, on
an annual basis--
``(i) an amount equal to $20 per covered life
under such plan; or
``(ii) an amount equal to $40 per covered life
under the plan if such plan has knowingly provided
inaccurate or incomplete information (as described
under subparagraph (C)).
``(F) Determination of covered individuals.--The
Secretary shall determine the number of covered lives
under a health plan based upon the most recent
statements and filings that have been submitted by such
plan to the Securities and Exchange Commission.
``(2) Notice and dispute procedure.--The Secretary shall
establish a procedure for assessment of penalty fees under this
subsection that provides a health plan with reasonable notice
and a dispute resolution procedure prior to provision of a
notice of assessment by the Secretary of the Treasury (as
described under paragraph (4)(B)).
``(3) Penalty fee report.--Not later than May 1, 2014, and
annually thereafter, the Secretary shall provide the Secretary
of the Treasury with a report identifying those health plans
that have been assessed a penalty fee under this subsection.
``(4) Collection of penalty fee.--
``(A) In general.--The Secretary of the Treasury,
acting through the Financial Management Service, shall
administer the collection of penalty fees from health
plans that have been identified by the Secretary in the
penalty fee report provided under paragraph (3).
``(B) Notice.--Not <> later than
August 1, 2014, and annually thereafter, the Secretary
of the Treasury shall
[[Page 153]]
provide notice to each health plan that has been
assessed a penalty fee by the Secretary under this
subsection. Such notice shall include the amount of the
penalty fee assessed by the Secretary and the due date
for payment of such fee to the Secretary of the Treasury
(as described in subparagraph (C)).
``(C) Payment due date.--Payment by a health plan
for a penalty fee assessed under this subsection shall
be made to the Secretary of the Treasury not later than
November 1, 2014, and annually thereafter.
``(D) Unpaid penalty fees.--Any amount of a penalty
fee assessed against a health plan under this subsection
for which payment has not been made by the due date
provided under subparagraph (C) shall be--
``(i) increased by the interest accrued on
such amount, as determined pursuant to the
underpayment rate established under section 6621
of the Internal Revenue Code of 1986; and
``(ii) treated as a past-due, legally
enforceable debt owed to a Federal agency for
purposes of section 6402(d) of the Internal
Revenue Code of 1986.
``(E) Administrative fees.--Any fee charged or
allocated for collection activities conducted by the
Financial Management Service will be passed on to a
health plan on a pro-rata basis and added to any penalty
fee collected from the plan.''.
(c) Promulgation <> of Rules.--
(1) Unique health plan identifier.--The Secretary shall
promulgate a final rule to establish a unique health plan
identifier (as 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 on Vital and Health <> Statistics. The Secretary may do so on an interim final
basis and such rule shall be effective not later than October 1,
2012.
(2) Electronic funds transfer.--The Secretary shall
promulgate a final rule to establish a standard for electronic
funds transfers (as described in section 1173(a)(2)(J) of the
Social Security Act, as added by subsection
(b)(2)(A)). <> The Secretary
may do so on an interim final basis and shall adopt such
standard not later than January 1, 2012, in a manner ensuring
that such standard is effective not later than January 1, 2014.
(3) Health claims attachments.--The Secretary shall
promulgate a final rule to establish a transaction standard and
a single set of associated operating rules for health claims
attachments (as described in section 1173(a)(2)(B) of the Social
Security Act (42 U.S.C. 1320d-2(a)(2)(B))) that is consistent
with the X12 Version 5010
transaction <> standards. The
Secretary may do so on an interim final basis and shall adopt a
transaction standard and a single set of associated operating
rules not later than January 1, 2014, in a manner ensuring that
such standard is effective not later than January 1, 2016.
(d) 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 the ``or'' at the end;
[[Page 154]]
(2) in paragraph (24), by striking the period and inserting
``; or''; and
(3) by inserting after paragraph (24) the following new
paragraph:
``(25) not later than January 1, 2014, for which the payment
is other than by electronic funds transfer (EFT) or an
electronic remittance in a form as specified in ASC X12 835
Health Care Payment and Remittance Advice or subsequent
standard.''.
SEC. 1105. <> EFFECTIVE DATE.
This subtitle shall take effect on the date of enactment of this
Act.
Subtitle C--Quality Health Insurance Coverage for All Americans
PART I--HEALTH INSURANCE MARKET REFORMS
SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.
Part A of title XXVII of the Public Health Service Act (42 U.S.C.
300gg et seq.), as amended by section 1001, is further amended--
(1) by striking the heading for subpart 1 and inserting the
following:
``Subpart I--General Reform'';
(2)(A) in section 2701 (42 U.S.C. 300gg), by striking the
section heading and subsection (a) and inserting the following:
``SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER
DISCRIMINATION BASED ON HEALTH STATUS.
``(a) In General.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage may not impose
any preexisting condition exclusion with respect to such plan or
coverage.''; and
(B) by <> transferring such section
(as amended by subparagraph (A)) so as to appear after the
section 2703 added by paragraph (4);
(3)(A) in <> section 2702
(42 U.S.C. 300gg-1)--
(i) by striking the section heading and all that
follows through subsection (a);
(ii) in subsection (b)--
(I) by striking ``health insurance issuer
offering health insurance coverage in connection
with a group health plan'' each place that such
appears and inserting ``health insurance issuer
offering group or individual health insurance
coverage''; and
(II) in paragraph (2)(A)--
(aa) by inserting ``or individual''
after ``employer''; and
(bb) by inserting ``or individual
health coverage, as the case may be''
before the semicolon; and
(iii) in subsection (e)--
[[Page 155]]
(I) by striking ``(a)(1)(F)'' and inserting
``(a)(6)'';
(II) by striking ``2701'' and inserting
``2704''; and
(III) by striking ``2721(a)'' and inserting
``2735(a)''; and
(B) by transferring such section (as amended by
subparagraph (A)) to appear after section 2705(a) as
added by paragraph (4); and
(4) by inserting after the subpart heading (as added by
paragraph (1)) the following:
``SEC. 2701. FAIR <> HEALTH INSURANCE PREMIUMS.
``(a) Prohibiting Discriminatory Premium Rates.--
``(1) In general.--With respect to the premium rate charged
by a health insurance issuer for health insurance coverage
offered in the individual or small group market--
``(A) such rate shall vary with respect to the
particular plan or coverage involved only by--
``(i) whether such plan or coverage covers an
individual or family;
``(ii) rating area, as established in
accordance with paragraph (2);
``(iii) age, except that such rate shall not
vary by more than 3 to 1 for adults (consistent
with section 2707(c)); and
``(iv) tobacco use, except that such rate
shall not vary by more than 1.5 to 1; and
``(B) such rate shall not vary with respect to the
particular plan or coverage involved by any other factor
not described in subparagraph (A).
``(2) Rating area.--
``(A) In general.--Each State shall establish 1 or
more rating areas within that State for purposes of
applying the requirements of this title.
``(B) Secretarial review.--The Secretary shall
review the rating areas established by each State under
subparagraph (A) to ensure the adequacy of such areas
for purposes of carrying out the requirements of this
title. If the Secretary determines a State's rating
areas are not adequate, or that a State does not
establish such areas, the Secretary may establish rating
areas for that State.
``(3) Permissible <> age bands.--The
Secretary, in consultation with the National Association of
Insurance Commissioners, shall define the permissible age bands
for rating purposes under paragraph (1)(A)(iii).
``(4) Application of variations based on age or tobacco
use.--With respect to family coverage under a group health plan
or health insurance coverage, the rating variations permitted
under clauses (iii) and (iv) of paragraph (1)(A) shall be
applied based on the portion of the premium that is attributable
to each family member covered under the plan or coverage.
``(5) Special rule for large group market.--If a State
permits health insurance issuers that offer coverage in the
large group market in the State to offer such coverage through
the State Exchange (as provided for under section 1312(f)(2)(B)
[[Page 156]]
of the Patient Protection and Affordable Care Act), the
provisions of this subsection shall apply to all coverage
offered in such market in the State.
``SEC. 2702. GUARANTEED <> AVAILABILITY OF
COVERAGE.
``(a) Guaranteed Issuance of Coverage in the Individual and Group
Market.--Subject to subsections (b) through (e), each health insurance
issuer that offers health insurance coverage in the individual or group
market in a State must accept every employer and individual in the State
that applies for such coverage.
``(b) Enrollment.--
``(1) Restriction.--A health insurance issuer described in
subsection (a) may restrict enrollment in coverage described in
such subsection to open or special enrollment periods.
``(2) Establishment.--A health insurance issuer described in
subsection (a) shall, in accordance with the regulations
promulgated under paragraph (3), establish special enrollment
periods for qualifying events (under section 603 of the Employee
Retirement Income Security Act of 1974).
``(3) Regulations.--The Secretary shall promulgate
regulations with respect to enrollment periods under paragraphs
(1) and (2).
``SEC. 2703. GUARANTEED <> RENEWABILITY OF
COVERAGE.
``(a) In General.--Except as provided in this section, if a health
insurance issuer offers health insurance coverage in the individual or
group market, the issuer must renew or continue in force such coverage
at the option of the plan sponsor or the individual, as applicable.
``SEC. 2705. PROHIBITING <> DISCRIMINATION
AGAINST INDIVIDUAL PARTICIPANTS AND BENEFICIARIES BASED ON
HEALTH STATUS.
``(a) In General.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage may not establish
rules for eligibility (including continued eligibility) of any
individual to enroll under the terms of the plan or coverage based on
any of the following health status-related factors in relation to the
individual or a dependent of the individual:
``(1) Health status.
``(2) Medical condition (including both physical and mental
illnesses).
``(3) Claims experience.
``(4) Receipt of health care.
``(5) Medical history.
``(6) Genetic information.
``(7) Evidence of insurability (including conditions arising
out of acts of domestic violence).
``(8) Disability.
``(9) Any other health status-related factor determined
appropriate by the Secretary.
``(j) Programs of Health Promotion or Disease Prevention.--
``(1) General provisions.--
``(A) General rule.--For purposes of subsection
(b)(2)(B), a program of health promotion or disease
prevention (referred to in this subsection as a
`wellness program') shall be a program offered by an
employer that is designed
[[Page 157]]
to promote health or prevent disease that meets the
applicable requirements of this subsection.
``(B) No conditions based on health status factor.--
If none of the conditions for obtaining a premium
discount or rebate or other reward for participation in
a wellness program is based on an individual satisfying
a standard that is related to a health status factor,
such wellness program shall not violate this section if
participation in the program is made available to all
similarly situated individuals and the requirements of
paragraph (2) are complied with.
``(C) Conditions based on health status factor.--If
any of the conditions for obtaining a premium discount
or rebate or other reward for participation in a
wellness program is based on an individual satisfying a
standard that is related to a health status factor, such
wellness program shall not violate this section if the
requirements of paragraph (3) are complied with.
``(2) Wellness programs not subject to requirements.--If
none of the conditions for obtaining a premium discount or
rebate or other reward under a wellness program as described in
paragraph (1)(B) are based on an individual satisfying a
standard that is related to a health status factor (or if such a
wellness program does not provide such a reward), the wellness
program shall not violate this section if participation in the
program is made available to all similarly situated individuals.
The following programs shall not have to comply with the
requirements of paragraph (3) if participation in the program is
made available to all similarly situated individuals:
``(A) A program that reimburses all or part of the
cost for memberships in a fitness center.
``(B) A diagnostic testing program that provides a
reward for participation and does not base any part of
the reward on outcomes.
``(C) A program that encourages preventive care
related to a health condition through the waiver of the
copayment or deductible requirement under group health
plan for the costs of certain items or services related
to a health condition (such as prenatal care or well-
baby visits).
``(D) A program that reimburses individuals for the
costs of smoking cessation programs without regard to
whether the individual quits smoking.
``(E) A program that provides a reward to
individuals for attending a periodic health education
seminar.
``(3) Wellness programs subject to requirements.--If any of
the conditions for obtaining a premium discount, rebate, or
reward under a wellness program as described in paragraph (1)(C)
is based on an individual satisfying a standard that is related
to a health status factor, the wellness program shall not
violate this section if the following requirements are complied
with:
``(A) The reward for the wellness program, together
with the reward for other wellness programs with respect
to the plan that requires satisfaction of a standard
related to a health status factor, shall not exceed 30
percent of the cost of employee-only coverage under the
plan. If, in
[[Page 158]]
addition to employees or individuals, any class of
dependents (such as spouses or spouses and dependent
children) may participate fully in the wellness program,
such reward shall not exceed 30 percent of the cost of
the coverage in which an employee or individual and any
dependents are enrolled. For purposes of this paragraph,
the cost of coverage shall be determined based on the
total amount of employer and employee contributions for
the benefit package under which the employee is (or the
employee and any dependents are) receiving coverage. A
reward may be in the form of a discount or rebate of a
premium or contribution, a waiver of all or part of a
cost-sharing mechanism (such as deductibles, copayments,
or coinsurance), the absence of a surcharge, or the
value of a benefit that would otherwise not be provided
under the plan. The Secretaries of Labor, Health and
Human Services, and the Treasury may increase the reward
available under this subparagraph to up to 50 percent of
the cost of coverage if the Secretaries determine that
such an increase is appropriate.
``(B) The wellness program shall be reasonably
designed to promote health or prevent disease. A program
complies with the preceding sentence if the program has
a reasonable chance of improving the health of, or
preventing disease in, participating individuals and it
is not overly burdensome, is not a subterfuge for
discriminating based on a health status factor, and is
not highly suspect in the method chosen to promote
health or prevent disease.
``(C) The plan shall give individuals eligible for
the program the opportunity to qualify for the reward
under the program at least once each year.
``(D) The full reward under the wellness program
shall be made available to all similarly situated
individuals. For such purpose, among other things:
``(i) The reward is not available to all
similarly situated individuals for a period unless
the wellness program allows--
``(I) for a reasonable alternative
standard (or waiver of the otherwise
applicable standard) for obtaining the
reward for any individual for whom, for
that period, it is unreasonably
difficult due to a medical condition to
satisfy the otherwise applicable
standard; and
``(II) for a reasonable alternative
standard (or waiver of the otherwise
applicable standard) for obtaining the
reward for any individual for whom, for
that period, it is medically inadvisable
to attempt to satisfy the otherwise
applicable standard.
``(ii) If reasonable under the circumstances,
the plan or issuer may seek verification, such as
a statement from an individual's physician, that a
health status factor makes it unreasonably
difficult or medically inadvisable for the
individual to satisfy or attempt to satisfy the
otherwise applicable standard.
[[Page 159]]
``(E) The plan or issuer involved shall disclose in
all plan materials describing the terms of the wellness
program the availability of a reasonable alternative
standard (or the possibility of waiver of the otherwise
applicable standard) required under subparagraph (D). If
plan materials disclose that such a program is
available, without describing its terms, the disclosure
under this subparagraph shall not be required.
``(k) Existing Programs.--Nothing in this section shall prohibit a
program of health promotion or disease prevention that was established
prior to the date of enactment of this section and applied with all
applicable regulations, and that is operating on such date, from
continuing to be carried out for as long as such regulations remain in
effect.
``(l) Wellness Program Demonstration Project.--
``(1) In general.--Not <> later than July
1, 2014, the Secretary, in consultation with the Secretary of
the Treasury and the Secretary of Labor, shall establish a 10-
State demonstration project under which participating States
shall apply the provisions of subsection (j) to programs of
health promotion offered by a health insurance issuer that
offers health insurance coverage in the individual market in
such State.
``(2) Expansion of demonstration <> project.--If the Secretary, in consultation with the
Secretary of the Treasury and the Secretary of Labor, determines
that the demonstration project described in paragraph (1) is
effective, such Secretaries may, beginning on July 1, 2017
expand such demonstration project to include additional
participating States.
``(3) Requirements.--
``(A) Maintenance of coverage.--The Secretary, in
consultation with the Secretary of the Treasury and the
Secretary of Labor, shall not approve the participation
of a State in the demonstration project under this
section unless the Secretaries determine that the
State's project is designed in a manner that--
``(i) will not result in any decrease in
coverage; and
``(ii) will not increase the cost to the
Federal Government in providing credits under
section 36B of the Internal Revenue Code of 1986
or cost-sharing assistance under section 1402 of
the Patient Protection and Affordable Care Act.
``(B) Other requirements.--States that participate
in the demonstration project under this subsection--
``(i) may permit premium discounts or rebates
or the modification of otherwise applicable
copayments or deductibles for adherence to, or
participation in, a reasonably designed program of
health promotion and disease prevention;
``(ii) shall ensure that requirements of
consumer protection are met in programs of health
promotion in the individual market;
``(iii) shall require verification from health
insurance issuers that offer health insurance
coverage in the individual market of such State
that premium discounts--
[[Page 160]]
``(I) do not create undue burdens
for individuals insured in the
individual market;
``(II) do not lead to cost shifting;
and
``(III) are not a subterfuge for
discrimination;
``(iv) shall ensure that consumer data is
protected in accordance with the requirements of
section 264(c) of the Health Insurance Portability
and Accountability Act of 1996 (42 U.S.C. 1320d-2
note); and
``(v) shall ensure and demonstrate to the
satisfaction of the Secretary that the discounts
or other rewards provided under the project
reflect the expected level of participation in the
wellness program involved and the anticipated
effect the program will have on utilization or
medical claim costs.
``(m) Report.--
``(1) In general.--Not later than 3 years after the date of
enactment of the Patient Protection and Affordable Care Act, the
Secretary, in consultation with the Secretary of the Treasury
and the Secretary of Labor, shall submit a report to the
appropriate committees of Congress concerning--
``(A) the effectiveness of wellness programs (as
defined in subsection (j)) in promoting health and
preventing disease;
``(B) the impact of such wellness programs on the
access to care and affordability of coverage for
participants and non-participants of such programs;
``(C) the impact of premium-based and cost-sharing
incentives on participant behavior and the role of such
programs in changing behavior; and
``(D) the effectiveness of different types of
rewards.
``(2) Data collection.--In preparing the report described in
paragraph (1), the Secretaries shall gather relevant information
from employers who provide employees with access to wellness
programs, including State and Federal agencies.
``(n) Regulations.--Nothing in this section shall be construed as
prohibiting the Secretaries of Labor, Health and Human Services, or the
Treasury from promulgating regulations in connection with this section.
``SEC. 2706. NON-DISCRIMINATION <> IN HEALTH
CARE.
``(a) Providers.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage shall not
discriminate with respect to participation under the plan or coverage
against any health care provider who is acting within the scope of that
provider's license or certification under applicable State law. This
section shall not require that a group health plan or health insurance
issuer contract with any health care provider willing to abide by the
terms and conditions for participation established by the plan or
issuer. Nothing in this section shall be construed as preventing a group
health plan, a health insurance issuer, or the Secretary from
establishing varying reimbursement rates based on quality or performance
measures.
``(b) Individuals.--The <> provisions of
section 1558 of the Patient Protection and Affordable Care Act (relating
to non-discrimination) shall apply with respect to a group health plan
or health insurance issuer offering group or individual health insurance
coverage.
[[Page 161]]
``SEC. 2707. COMPREHENSIVE <> HEALTH INSURANCE
COVERAGE.
``(a) Coverage for Essential Health Benefits Package.--A health
insurance issuer that offers health insurance coverage in the individual
or small group market shall ensure that such coverage includes the
essential health benefits package required under section 1302(a) of the
Patient Protection and Affordable Care Act.
``(b) Cost-sharing Under Group Health Plans.--A group health plan
shall ensure that any annual cost-sharing imposed under the plan does
not exceed the limitations provided for under paragraphs (1) and (2) of
section 1302(c).
``(c) Child-only Plans.--If a health insurance issuer offers health
insurance coverage in any level of coverage specified under section
1302(d) of the Patient Protection and Affordable Care Act, the issuer
shall also offer such coverage in that level as a plan in which the only
enrollees are individuals who, as of the beginning of a plan year, have
not attained the age of 21.
``(d) Dental Only.--This section shall not apply to a plan described
in section 1302(d)(2)(B)(ii)(I).
``SEC. 2708. PROHIBITION <> ON EXCESSIVE WAITING
PERIODS.
``A group health plan and a health insurance issuer offering group
or individual health insurance coverage shall not apply any waiting
period (as defined in section 2704(b)(4)) that exceeds 90 days.''.
PART II--OTHER PROVISIONS
SEC. 1251. PRESERVATION <> OF RIGHT TO MAINTAIN
EXISTING COVERAGE.
(a) No Changes to Existing Coverage.--
(1) In general.--Nothing in this Act (or an amendment made
by this Act) shall be construed to require that an individual
terminate coverage under a group health plan or health insurance
coverage in which such individual was enrolled on the date of
enactment of this Act.
(2) Continuation of coverage.--With respect to a group
health plan or health insurance coverage in which an individual
was enrolled on the date of enactment of this Act, this subtitle
and subtitle A (and the amendments made by such subtitles) shall
not apply to such plan or coverage, regardless of whether the
individual renews such coverage after such date of enactment.
(b) Allowance for Family Members To Join Current Coverage.--With
respect to a group health plan or health insurance coverage in which an
individual was enrolled on the date of enactment of this Act and which
is renewed after such date, family members of such individual shall be
permitted to enroll in such plan or coverage if such enrollment is
permitted under the terms of the plan in effect as of such date of
enactment.
(c) Allowance for New Employees To Join Current Plan.--A group
health plan that provides coverage on the date of enactment of this Act
may provide for the enrolling of new employees (and their families) in
such plan, and this subtitle and subtitle A (and the amendments made by
such subtitles) shall not apply with respect to such plan and such new
employees (and their families).
[[Page 162]]
(d) Effect on Collective Bargaining Agreements.--In the case of
health insurance coverage maintained pursuant to one or more collective
bargaining agreements between employee representatives and one or more
employers that was ratified before the date of enactment of this Act,
the provisions of this subtitle and subtitle A (and the amendments made
by such subtitles) shall not apply until the date on which the last of
the collective bargaining agreements relating to the coverage
terminates. Any coverage amendment made pursuant to a collective
bargaining agreement relating to the coverage which amends the coverage
solely to conform to any requirement added by this subtitle or subtitle
A (or amendments) shall not be treated as a termination of such
collective bargaining agreement.
(e) Definition.--In this title, the term ``grandfathered health
plan'' means any group health plan or health insurance coverage to which
this section applies.
SEC. 1252. RATING REFORMS <> MUST APPLY UNIFORMLY
TO ALL HEALTH INSURANCE ISSUERS AND GROUP HEALTH PLANS.
Any standard or requirement adopted by a State pursuant to this
title, or any amendment made by this title, shall be applied uniformly
to all health plans in each insurance market to which the standard and
requirements apply. The preceding sentence shall also apply to a State
standard or requirement relating to the standard or requirement required
by this title (or any such amendment) that is not the same as the
standard or requirement but that is not preempted under section 1321(d).
SEC. 1253. <> EFFECTIVE DATES.
This subtitle (and the amendments made by this subtitle) shall
become effective for plan years beginning on or after January 1, 2014.
Subtitle D--Available Coverage Choices for All Americans
PART I--ESTABLISHMENT OF QUALIFIED HEALTH PLANS
SEC. 1301. QUALIFIED <> HEALTH PLAN DEFINED.
(a) Qualified Health Plan.--In this title:
(1) In general.--The term ``qualified health plan'' means a
health plan that--
(A) has in effect a certification (which may include
a seal or other indication of approval) that such plan
meets the criteria for certification described in
section 1311(c) issued or recognized by each Exchange
through which such plan is offered;
(B) provides the essential health benefits package
described in section 1302(a); and
(C) is offered by a health insurance issuer that--
(i) is licensed and in good standing to offer
health insurance coverage in each State in which
such issuer offers health insurance coverage under
this title;
[[Page 163]]
(ii) agrees to offer at least one qualified
health plan in the silver level and at least one
plan in the gold level in each such Exchange;
(iii) agrees to charge the same premium rate
for each qualified health plan of the issuer
without regard to whether the plan is offered
through an Exchange or whether the plan is offered
directly from the issuer or through an agent; and
(iv) complies with the regulations developed
by the Secretary under section 1311(d) and such
other requirements as an applicable Exchange may
establish.
(2) Inclusion of co-op plans and community health insurance
option.--Any reference in this title to a qualified health plan
shall be deemed to include a qualified health plan offered
through the CO-OP program under section 1322 or a community
health insurance option under section 1323, unless specifically
provided for otherwise.
(b) Terms Relating to Health Plans.--In this title:
(1) Health plan.--
(A) In general.--The term ``health plan'' means
health insurance coverage and a group health plan.
(B) Exception for self-insured plans and mewas.--
Except to the extent specifically provided by this
title, the term ``health plan'' shall not include a
group health plan or multiple employer welfare
arrangement to the extent the plan or arrangement is not
subject to State insurance regulation under section 514
of the Employee Retirement Income Security Act of 1974.
(2) Health insurance coverage and issuer.--The terms
``health insurance coverage'' and ``health insurance issuer''
have the meanings given such terms by section 2791(b) of the
Public Health Service Act.
(3) Group health plan.--The term ``group health plan'' has
the meaning given such term by section 2791(a) of the Public
Health Service Act.
SEC. 1302. ESSENTIAL <> HEALTH BENEFITS
REQUIREMENTS.
(a) Essential Health Benefits Package.--In this title, the term
``essential health benefits package'' means, with respect to any health
plan, coverage that--
(1) provides for the essential health benefits defined by
the Secretary under subsection (b);
(2) limits cost-sharing for such coverage in accordance with
subsection (c); and
(3) subject to subsection (e), provides either the bronze,
silver, gold, or platinum level of coverage described in
subsection (d).
(b) Essential Health Benefits.--
(1) In general.--Subject to paragraph (2), the Secretary
shall define the essential health benefits, except that such
benefits shall include at least the following general categories
and the items and services covered within the categories:
(A) Ambulatory patient services.
(B) Emergency services.
(C) Hospitalization.
(D) Maternity and newborn care.
[[Page 164]]
(E) Mental health and substance use disorder
services, including behavioral health treatment.
(F) Prescription drugs.
(G) Rehabilitative and habilitative services and
devices.
(H) Laboratory services.
(I) Preventive and wellness services and chronic
disease management.
(J) Pediatric services, including oral and vision
care.
(2) Limitation.--
(A) In general.--
The <> Secretary shall ensure that
the scope of the essential health benefits under
paragraph (1) is equal to the scope of benefits provided
under a typical employer plan, as determined by the
Secretary. To <> inform this
determination, 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 Secretary.
(B) Certification.--In <> defining
the essential health benefits described in paragraph
(1), and in revising the benefits under paragraph
(4)(H), the Secretary shall submit a report to the
appropriate committees of Congress containing a
certification from the Chief Actuary of the Centers for
Medicare & Medicaid Services that such essential health
benefits meet the limitation described in paragraph (2).
(3) Notice and hearing.--In defining the essential health
benefits described in paragraph (1), and in revising the
benefits under paragraph (4)(H), the Secretary shall provide
notice and an opportunity for public comment.
(4) Required elements for consideration.--In defining the
essential health benefits under paragraph (1), the Secretary
shall--
(A) ensure that such essential health benefits
reflect an appropriate balance among the categories
described in such subsection, so that benefits are not
unduly weighted toward any category;
(B) not make coverage decisions, determine
reimbursement rates, establish incentive programs, or
design benefits in ways that discriminate against
individuals because of their age, disability, or
expected length of life;
(C) take into account the health care needs of
diverse segments of the population, including women,
children, persons with disabilities, and other groups;
(D) ensure that health benefits established as
essential not be subject to denial to individuals
against their wishes on the basis of the individuals'
age or expected length of life or of the individuals'
present or predicted disability, degree of medical
dependency, or quality of life;
(E) provide that a qualified health plan shall not
be treated as providing coverage for the essential
health benefits described in paragraph (1) unless the
plan provides that--
(i) coverage for emergency department services
will be provided without imposing any requirement
under the plan for prior authorization of services
or any limitation on coverage where the provider
of services does not have a contractual
relationship with the plan
[[Page 165]]
for the providing of services that is more
restrictive than the requirements or limitations
that apply to emergency department services
received from providers who do have such a
contractual relationship with the plan; and
(ii) if such services are provided out-of-
network, the cost-sharing requirement (expressed
as a copayment amount or coinsurance rate) is the
same requirement that would apply if such services
were provided in-network;
(F) provide that if a plan described in section
1311(b)(2)(B)(ii) (relating to stand-alone dental
benefits plans) is offered through an Exchange, another
health plan offered through such Exchange shall not fail
to be treated as a qualified health plan solely because
the plan does not offer coverage of benefits offered
through the stand-alone plan that are otherwise required
under paragraph (1)(J); and
(G) periodically review the essential health
benefits under paragraph (1), and provide a report to
Congress and the public that contains--
(i) an assessment of whether enrollees are
facing any difficulty accessing needed services
for reasons of coverage or cost;
(ii) an assessment of whether the essential
health benefits needs to be modified or updated to
account for changes in medical evidence or
scientific advancement;
(iii) information on how the essential health
benefits will be modified to address any such gaps
in access or changes in the evidence base;
(iv) an assessment of the potential of
additional or expanded benefits to increase costs
and the interactions between the addition or
expansion of benefits and reductions in existing
benefits to meet actuarial limitations described
in paragraph (2); and
(H) periodically update the essential health
benefits under paragraph (1) to address any gaps in
access to coverage or changes in the evidence base the
Secretary identifies in the review conducted under
subparagraph (G).
(5) Rule of construction.--Nothing in this title shall be
construed to prohibit a health plan from providing benefits in
excess of the essential health benefits described in this
subsection.
(c) Requirements Relating to Cost-Sharing.--
(1) Annual limitation on cost-sharing.--
(A) 2014.--The cost-sharing incurred under a health
plan with respect to self-only coverage or coverage
other than self-only coverage for a plan year beginning
in 2014 shall not exceed the dollar amounts in effect
under section 223(c)(2)(A)(ii) of the Internal Revenue
Code of 1986 for self-only and family coverage,
respectively, for taxable years beginning in 2014.
(B) 2015 and later.--In the case of any plan year
beginning in a calendar year after 2014, the limitation
under this paragraph shall--
[[Page 166]]
(i) in the case of self-only coverage, be
equal to the dollar amount under subparagraph (A)
for self-only coverage for plan years beginning in
2014, increased by an amount equal to the product
of that amount and the premium adjustment
percentage under paragraph (4) for the calendar
year; and
(ii) in the case of other coverage, twice the
amount in effect under clause (i).
If the amount of any increase under clause (i) is not a
multiple of $50, such increase shall be rounded to the
next lowest multiple of $50.
(2) Annual limitation on deductibles for employer-sponsored
plans.--
(A) In general.--In the case of a health plan
offered in the small group market, the deductible under
the plan shall not exceed--
(i) $2,000 in the case of a plan covering a
single individual; and
(ii) $4,000 in the case of any other plan.
The amounts under clauses (i) and (ii) may be increased
by the maximum amount of reimbursement which is
reasonably available to a participant under a flexible
spending arrangement described in section 106(c)(2) of
the Internal Revenue Code of 1986 (determined without
regard to any salary reduction arrangement).
(B) Indexing of limits.--In the case of any plan
year beginning in a calendar year after 2014--
(i) the dollar amount under subparagraph
(A)(i) shall be increased by an amount equal to
the product of that amount and the premium
adjustment percentage under paragraph (4) for the
calendar year; and
(ii) the dollar amount under subparagraph
(A)(ii) shall be increased to an amount equal to
twice the amount in effect under subparagraph
(A)(i) for plan years beginning in the calendar
year, determined after application of clause (i).
If the amount of any increase under clause (i) is not a
multiple of $50, such increase shall be rounded to the
next lowest multiple of $50.
(C) Actuarial value.--The limitation under this
paragraph shall be applied in such a manner so as to not
affect the actuarial value of any health plan, including
a plan in the bronze level.
(D) Coordination with preventive limits.--Nothing in
this paragraph shall be construed to allow a plan to
have a deductible under the plan apply to benefits
described in section 2713 of the Public Health Service
Act.
(3) Cost-sharing.--In this title--
(A) In general.--The term ``cost-sharing''
includes--
(i) deductibles, coinsurance, copayments, or
similar charges; and
(ii) any other expenditure required of an
insured individual which is a qualified medical
expense (within the meaning of section 223(d)(2)
of the Internal Revenue Code of 1986) with respect
to essential health benefits covered under the
plan.
[[Page 167]]
(B) Exceptions.--Such term does not include
premiums, balance billing amounts for non-network
providers, or spending for non-covered services.
(4) Premium <> adjustment
percentage.--For purposes of paragraphs (1)(B)(i) and (2)(B)(i),
the premium adjustment percentage for any calendar year is the
percentage (if any) by which the average per capita premium for
health insurance coverage in the United States for the preceding
calendar year (as estimated by the Secretary no later than
October 1 of such preceding calendar year) exceeds such average
per capita premium for 2013 (as determined by the Secretary).
(d) Levels of Coverage.--
(1) Levels of coverage defined.--The levels of coverage
described in this subsection are as follows:
(A) Bronze level.--A plan in the bronze level shall
provide a level of coverage that is designed to provide
benefits that are actuarially equivalent to 60 percent
of the full actuarial value of the benefits provided
under the plan.
(B) Silver level.--A plan in the silver level shall
provide a level of coverage that is designed to provide
benefits that are actuarially equivalent to 70 percent
of the full actuarial value of the benefits provided
under the plan.
(C) Gold level.--A plan in the gold level shall
provide a level of coverage that is designed to provide
benefits that are actuarially equivalent to 80 percent
of the full actuarial value of the benefits provided
under the plan.
(D) Platinum level.--A plan in the platinum level
shall provide a level of coverage that is designed to
provide benefits that are actuarially equivalent to 90
percent of the full actuarial value of the benefits
provided under the plan.
(2) Actuarial value.--
(A) In general.--Under regulations issued by the
Secretary, the level of coverage of a plan shall be
determined on the basis that the essential health
benefits described in subsection (b) shall be provided
to a standard population (and without regard to the
population the plan may actually provide benefits to).
(B) Employer contributions.--The Secretary may issue
regulations under which employer contributions to a
health savings account (within the meaning of section
223 of the Internal Revenue Code of 1986) may be taken
into account in determining the level of coverage for a
plan of the employer.
(C) Application.--In determining under this title,
the Public Health Service Act, or the Internal Revenue
Code of 1986 the percentage of the total allowed costs
of benefits provided under a group health plan or health
insurance coverage that are provided by such plan or
coverage, the rules contained in the regulations under
this paragraph shall apply.
(3) Allowable variance.-- <> The
Secretary shall develop guidelines to provide for a de minimis
variation in the actuarial valuations used in determining the
level of coverage of a plan to account for differences in
actuarial estimates.
[[Page 168]]
(4) Plan reference.--In this title, any reference to a
bronze, silver, gold, or platinum plan shall be treated as a
reference to a qualified health plan providing a bronze, silver,
gold, or platinum level of coverage, as the case may be.
(e) Catastrophic Plan.--
(1) In general.--A health plan not providing a bronze,
silver, gold, or platinum level of coverage shall be treated as
meeting the requirements of subsection (d) with respect to any
plan year if--
(A) the only individuals who are eligible to enroll
in the plan are individuals described in paragraph (2);
and
(B) the plan provides--
(i) except as provided in clause (ii), the
essential health benefits determined under
subsection (b), except that the plan provides no
benefits for any plan year until the individual
has incurred cost-sharing expenses in an amount
equal to the annual limitation in effect under
subsection (c)(1) for the plan year (except as
provided for in section 2713); and
(ii) coverage for at least three primary care
visits.
(2) Individuals eligible for enrollment.--An individual is
described in this paragraph for any plan year if the
individual--
(A) has not attained the age of 30 before the
beginning of the plan year; or
(B) has a certification in effect for any plan year
under this title that the individual is exempt from the
requirement under section 5000A of the Internal Revenue
Code of 1986 by reason of--
(i) section 5000A(e)(1) of such Code (relating
to individuals without affordable coverage); or
(ii) section 5000A(e)(5) of such Code
(relating to individuals with hardships).
(3) Restriction to individual market.--If a health insurance
issuer offers a health plan described in this subsection, the
issuer may only offer the plan in the individual market.
(f) Child-only Plans.--If a qualified health plan is offered through
the Exchange in any level of coverage specified under subsection (d),
the issuer shall also offer that plan through the Exchange in that level
as a plan in which the only enrollees are individuals who, as of the
beginning of a plan year, have not attained the age of 21, and such plan
shall be treated as a qualified health plan.
SEC. 1303. <> SPECIAL RULES.
(a) Special Rules Relating to Coverage of Abortion Services.--
(1) Voluntary choice of coverage of abortion services.--
(A) In general.--Notwithstanding any other provision
of this title (or any amendment made by this title), and
subject to subparagraphs (C) and (D)--
(i) nothing in this title (or any amendment
made by this title), shall be construed to require
a qualified health plan to provide coverage of
services described in subparagraph (B)(i) or
(B)(ii) as part of its essential health benefits
for any plan year; and
[[Page 169]]
(ii) <> the issuer of a
qualified health plan shall determine whether or
not the plan provides coverage of services
described in subparagraph (B)(i) or (B)(ii) as
part of such benefits for the plan year.
(B) Abortion services.--
(i) Abortions for which public funding is
prohibited.--The services described in this clause
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.
(ii) Abortions for which public funding is
allowed.--The services described in this clause
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.
(C) Prohibition on federal funds for abortion
services in community health insurance option.--
(i) Determination by secretary.--The Secretary
may not determine, in accordance with subparagraph
(A)(ii), that the community health insurance
option established under section 1323 shall
provide coverage of services described in
subparagraph (B)(i) as part of benefits for the
plan year unless the Secretary--
(I) assures compliance with the
requirements of paragraph (2);
(II) assures, in accordance with
applicable provisions of generally
accepted accounting requirements,
circulars on funds management of the
Office of Management and Budget, and
guidance on accounting of the Government
Accountability Office, that no Federal
funds are used for such coverage; and
(III) notwithstanding section
1323(e)(1)(C) or any other provision of
this title, takes all necessary steps to
assure that the United States does not
bear the insurance risk for a community
health insurance option's coverage of
services described in subparagraph
(B)(i).
(ii) State requirement.--If a State requires,
in addition to the essential health benefits
required under section 1323(b)(3) (A), coverage of
services described in subparagraph (B)(i) for
enrollees of a community health insurance option
offered in such State, the State shall assure that
no funds flowing through or from the community
health insurance option, and no other Federal
funds, pay or defray the cost of providing
coverage of services described in subparagraph
(B)(i). The United States shall not bear the
insurance risk for a State's required coverage of
services described in subparagraph (B)(i).
(iii) Exceptions.--Nothing in this
subparagraph shall apply to coverage of services
described in subparagraph (B)(ii) by the community
health insurance
[[Page 170]]
option. Services described in subparagraph (B)(ii)
shall be covered to the same extent as such
services are covered under title XIX of the Social
Security Act.
(D) Assured availability of varied coverage through
exchanges.--
(i) In general.--The Secretary shall assure
that with respect to qualified health plans
offered in any Exchange established pursuant to
this title--
(I) there is at least one such plan
that provides coverage of services
described in clauses (i) and (ii) of
subparagraph (B); and
(II) there is at least one such plan
that does not provide coverage of
services described in subparagraph
(B)(i).
(ii) Special rules.--For purposes of clause
(i)--
(I) a plan shall be treated as
described in clause (i)(II) if the plan
does not provide coverage of services
described in either subparagraph (B)(i)
or (B)(ii); and
(II) if a State has one Exchange
covering more than 1 insurance market,
the Secretary shall meet the
requirements of clause (i) separately
with respect to each such market.
(2) Prohibition on the use of federal funds.--
(A) In general.--If a qualified health plan provides
coverage of services described in paragraph (1)(B)(i),
the issuer of the plan shall not use any amount
attributable to any of the following for purposes of
paying for such services:
(i) The credit under section 36B of the
Internal Revenue Code of 1986 (and the amount (if
any) of the advance payment of the credit under
section 1412 of the Patient Protection and
Affordable Care Act).
(ii) Any cost-sharing reduction under section
1402 of thePatient Protection and Affordable Care
Act (and the amount (if any) of the advance
payment of the reduction under section 1412 of the
Patient Protection and Affordable Care Act).
(B) Segregation of funds.--In the case of a plan to
which subparagraph (A) applies, the issuer of the plan
shall, out of amounts not described in subparagraph (A),
segregate an amount equal to the actuarial amounts
determined under subparagraph (C) for all enrollees from
the amounts described in subparagraph (A).
(C) <> Actuarial value of
optional service coverage.--
(i) In general.--The Secretary shall estimate
the basic per enrollee, per month cost, determined
on an average actuarial basis, for including
coverage under a qualified health plan of the
services described in paragraph (1)(B)(i).
(ii) Considerations.--In making such estimate,
the Secretary--
(I) may take into account the impact
on overall costs of the inclusion of
such coverage, but may not take into
account any cost reduction estimated
[[Page 171]]
to result from such services, including
prenatal care, delivery, or postnatal
care;
(II) shall estimate such costs as if
such coverage were included for the
entire population covered; and
(III) may not estimate such a cost
at less than $1 per enrollee, per month.
(3) Provider conscience protections.--
<> No individual health care provider or
health care facility may be discriminated against because of a
willingness or an unwillingness, if doing so is contrary to the
religious or moral beliefs of the provider or facility, to
provide, pay for, provide coverage of, or refer for abortions.
(b) Application of State and Federal Laws Regarding Abortion.--
(1) 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.
(2) No effect on federal laws regarding abortion.--
(A) In general.--Nothing in this Act shall be
construed to have any effect on Federal laws regarding--
(i) conscience protection;
(ii) willingness or refusal to provide
abortion; and
(iii) 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.
(3) No effect on federal civil rights law.--Nothing in this
subsection shall alter the rights and obligations of employees
and employers under title VII of the Civil Rights Act of 1964.
(c) Application of Emergency Services Laws.--Nothing in this Act
shall be construed to relieve any health care provider from providing
emergency services as required by State or Federal law, including
section 1867 of the Social Security Act (popularly known as ``EMTALA'').
SEC. 1304. <> RELATED DEFINITIONS.
(a) Definitions Relating to Markets.--In this title:
(1) Group market.--The term ``group market'' means the
health insurance market under which individuals obtain health
insurance coverage (directly or through any arrangement) on
behalf of themselves (and their dependents) through a group
health plan maintained by an employer.
(2) Individual market.--The term ``individual market'' means
the market for health insurance coverage offered to individuals
other than in connection with a group health plan.
(3) Large and small group markets.--The terms ``large group
market'' and ``small group market'' mean the health insurance
market under which individuals obtain health insurance coverage
(directly or through any arrangement) on behalf of themselves
(and their dependents) through a group health plan maintained by
a large employer (as defined in subsection
[[Page 172]]
(b)(1)) or by a small employer (as defined in subsection
(b)(2)), respectively.
(b) Employers.--In this title:
(1) Large employer.--The term ``large employer'' means, in
connection with a group health plan with respect to a calendar
year and a plan year, an employer who employed an average of at
least 101 employees on business days during the preceding
calendar year and who employs at least 1 employee on the first
day of the plan year.
(2) Small employer.--The term ``small employer'' means, in
connection with a group health plan with respect to a calendar
year and a plan year, an employer who employed an average of at
least 1 but not more than 100 employees on business days during
the preceding calendar year and who employs at least 1 employee
on the first day of the plan year.
(3) State option to treat 50 employees as small.--In the
case of plan years beginning before January 1, 2016, a State may
elect to apply this subsection by substituting ``51 employees''
for ``101 employees'' in paragraph (1) and by substituting ``50
employees'' for ``100 employees'' in paragraph (2).
(4) Rules for determining employer size.--For purposes of
this subsection--
(A) Application of aggregation rule for employers.--
All persons 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 as 1
employer.
(B) Employers not in existence in preceding year.--
In the case of an employer which was not in existence
throughout the preceding calendar year, the
determination of whether such employer is a small or
large employer shall be based on the average number of
employees that it is reasonably expected such employer
will employ on business days in the current calendar
year.
(C) Predecessors.--Any reference in this subsection
to an employer shall include a reference to any
predecessor of such employer.
(D) Continuation of participation for growing small
employers.--If--
(i) a qualified employer that is a small
employer makes enrollment in qualified health
plans offered in the small group market available
to its employees through an Exchange; and
(ii) the employer ceases to be a small
employer by reason of an increase in the number of
employees of such employer;
<> the employer shall continue to be
treated as a small employer for purposes of this
subtitle for the period beginning with the increase and
ending with the first day on which the employer does not
make such enrollment available to its employees.
(c) Secretary.--In this title, the term ``Secretary'' means the
Secretary of Health and Human Services.
(d) State.--In this title, the term ``State'' means each of the 50
States and the District of Columbia.
[[Page 173]]
PART II--CONSUMER CHOICES AND INSURANCE COMPETITION THROUGH HEALTH
BENEFIT EXCHANGES
SEC. 1311. <> AFFORDABLE CHOICES OF HEALTH BENEFIT
PLANS.
(a) Assistance to States to Establish American Health Benefit
Exchanges.--
(1) Planning and establishment grants.--
<> There shall be appropriated to the
Secretary, out of any moneys in the Treasury not otherwise
appropriated, an amount necessary to enable the Secretary to
make awards, not later than 1 year after the date of enactment
of this Act, to States in the amount specified in paragraph (2)
for the uses described in paragraph (3).
(2) Amount specified.-- <> For each
fiscal year, the Secretary shall determine the total amount that
the Secretary will make available to each State for grants under
this subsection.
(3) Use of funds.--A State shall use amounts awarded under
this subsection for activities (including planning activities)
related to establishing an American Health Benefit Exchange, as
described in subsection (b).
(4) Renewability of grant.--
(A) In general.--Subject to subsection (d)(4), the
Secretary may renew a grant awarded under paragraph (1)
if the State recipient of such grant--
(i) is making progress, as determined by the
Secretary, toward--
(I) establishing an Exchange; and
(II) implementing the reforms
described in subtitles A and C (and the
amendments made by such subtitles); and
(ii) is meeting such other benchmarks as the
Secretary may establish.
(B) Limitation.--No <> grant shall
be awarded under this subsection after January 1, 2015.
(5) Technical assistance to facilitate participation in shop
exchanges.--The Secretary shall provide technical assistance to
States to facilitate the participation of qualified small
businesses in such States in SHOP Exchanges.
(b) American Health Benefit Exchanges.--
(1) In general.--
Each <> State shall, not later
than January 1, 2014, establish an American Health Benefit
Exchange (referred to in this title as an ``Exchange'') for the
State that--
(A) facilitates the purchase of qualified health
plans;
(B) provides for the establishment of a Small
Business Health Options Program (in this title referred
to as a ``SHOP Exchange'') that is designed to assist
qualified employers in the State who are small employers
in facilitating the enrollment of their employees in
qualified health plans offered in the small group market
in the State; and
(C) meets the requirements of subsection (d).
(2) Merger of individual and shop exchanges.--A State may
elect to provide only one Exchange in the State for providing
both Exchange and SHOP Exchange services to both qualified
individuals and qualified small employers, but only
[[Page 174]]
if the Exchange has adequate resources to assist such
individuals and employers.
(c) Responsibilities of the Secretary.--
(1) In general.--The <> Secretary shall,
by regulation, establish criteria for the certification of
health plans as qualified health plans. Such criteria shall
require that, to be certified, a plan shall, at a minimum--
(A) meet marketing requirements, and not employ
marketing practices or benefit designs that have the
effect of discouraging the enrollment in such plan by
individuals with significant health needs;
(B) ensure a sufficient choice of providers (in a
manner consistent with applicable network adequacy
provisions under section 2702(c) of the Public Health
Service Act), and provide information to enrollees and
prospective enrollees on the availability of in-network
and out-of-network providers;
(C) include within health insurance plan networks
those essential community providers, where available,
that serve predominately 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 set
forth by section 221 of Public Law 111-8, except that
nothing in this subparagraph shall be construed to
require any health plan to provide coverage for any
specific medical procedure;
(D)(i) be accredited with respect to local
performance on clinical quality measures such as the
Healthcare Effectiveness Data and Information Set,
patient experience ratings on a standardized Consumer
Assessment of Healthcare Providers and Systems survey,
as well as consumer access, utilization management,
quality assurance, provider credentialing, complaints
and appeals, network adequacy and access, and patient
information programs by any entity recognized by the
Secretary for the accreditation of health insurance
issuers or plans (so long as any such entity has
transparent and rigorous methodological and scoring
criteria); or
(ii) receive such accreditation within a period
established by an Exchange for such accreditation that
is applicable to all qualified health plans;
(E) implement a quality improvement strategy
described in subsection (g)(1);
(F) utilize a uniform enrollment form that qualified
individuals and qualified employers may use (either
electronically or on paper) in enrolling in qualified
health plans offered through such Exchange, and that
takes into account criteria that the National
Association of Insurance Commissioners develops and
submits to the Secretary;
(G) utilize the standard format established for
presenting health benefits plan options; and
(H) provide information to enrollees and prospective
enrollees, and to each Exchange in which the plan is
offered, on any quality measures for health plan
performance endorsed under section 399JJ of the Public
Health Service Act, as applicable.
[[Page 175]]
(2) Rule of construction.-- <> Nothing in
paragraph (1)(C) shall be construed to require a qualified
health plan to contract with a provider described in such
paragraph if such provider refuses to accept the generally
applicable payment rates of such plan.
(3) Rating system.--The Secretary shall develop a rating
system that would rate qualified health plans offered through an
Exchange in each benefits level on the basis of the relative
quality and price. The Exchange shall include the quality rating
in the information provided to individuals and employers through
the Internet portal established under paragraph (4).
(4) Enrollee satisfaction system.--The Secretary shall
develop an enrollee satisfaction survey system that would
evaluate the level of enrollee satisfaction with qualified
health plans offered through an Exchange, for each such
qualified health plan that had more than 500 enrollees in the
previous year. The Exchange shall include enrollee satisfaction
information in the information provided to individuals and
employers through the Internet portal established under
paragraph (5) in a manner that allows individuals to easily
compare enrollee satisfaction levels between comparable plans.
(5) Internet portals.--The Secretary shall--
(A) continue to operate, maintain, and update the
Internet portal developed under section 1103(a) and to
assist States in developing and maintaining their own
such portal; and
(B) make available for use by Exchanges a model
template for an Internet portal that may be used to
direct qualified individuals and qualified employers to
qualified health plans, to assist such individuals and
employers in determining whether they are eligible to
participate in an Exchange or eligible for a premium tax
credit or cost-sharing reduction, and to present
standardized information (including quality ratings)
regarding qualified health plans offered through an
Exchange to assist consumers in making easy health
insurance choices.
Such template shall include, with respect to each qualified
health plan offered through the Exchange in each rating area,
access to the uniform outline of coverage the plan is required
to provide under section 2716 of the Public Health Service Act
and to a copy of the plan's written policy.
(6) Enrollment periods.--The Secretary shall require an
Exchange to provide for--
(A) <> an initial open
enrollment, as determined by the Secretary (such
determination to be made not later than July 1, 2012);
(B) <> annual open enrollment
periods, as determined by the Secretary for calendar
years after the initial enrollment period;
(C) special enrollment periods specified in section
9801 of the Internal Revenue Code of 1986 and other
special enrollment periods under circumstances similar
to such periods under part D of title XVIII of the
Social Security Act; and
(D) <> special monthly
enrollment periods for Indians (as defined in section 4
of the Indian Health Care Improvement Act).
[[Page 176]]
(d) Requirements.--
(1) In general.--An Exchange shall be a governmental agency
or nonprofit entity that is established by a State.
(2) Offering of coverage.--
(A) In general.--An Exchange shall make available
qualified health plans to qualified individuals and
qualified employers.
(B) Limitation.--
(i) In general.--An Exchange may not make
available any health plan that is not a qualified
health plan.
(ii) Offering of stand-alone dental
benefits.--Each Exchange within a State shall
allow an issuer of a plan that only provides
limited scope dental benefits meeting the
requirements of section 9832(c)(2)(A) of the
Internal Revenue Code of 1986 to offer the plan
through the Exchange (either separately or in
conjunction with a qualified health plan) if the
plan provides pediatric dental benefits meeting
the requirements of section 1302(b)(1)(J)).
(3) Rules relating to additional required benefits.--
(A) In general.--Except as provided in subparagraph
(B), an Exchange may make available a qualified health
plan notwithstanding any provision of law that may
require benefits other than the essential health
benefits specified under section 1302(b).
(B) States may require additional benefits.--
(i) In general.--Subject to the requirements
of clause (ii), a State may require that a
qualified health plan offered in such State offer
benefits in addition to the essential health
benefits specified under section 1302(b).
(ii) State must assume cost.--
A <> State shall make payments to
or on behalf of an individual eligible for the
premium tax credit under section 36B of the
Internal Revenue Code of 1986 and any cost-sharing
reduction under section 1402 to defray the cost to
the individual of any additional benefits
described in clause (i) which are not eligible for
such credit or reduction under section
36B(b)(3)(D) of such Code and section 1402(c)(4).
(4) Functions.--An Exchange shall, at a minimum--
(A) <> implement procedures for
the certification, recertification, and decertification,
consistent with guidelines developed by the Secretary
under subsection (c), of health plans as qualified
health plans;
(B) <> provide for the operation of
a toll-free telephone hotline to respond to requests for
assistance;
(C) <> maintain an Internet website
through which enrollees and prospective enrollees of
qualified health plans may obtain standardized
comparative information on such plans;
(D) assign a rating to each qualified health plan
offered through such Exchange in accordance with the
criteria developed by the Secretary under subsection
(c)(3);
(E) utilize a standardized format for presenting
health benefits plan options in the Exchange, including
the use
[[Page 177]]
of the uniform outline of coverage established under
section 2715 of the Public Health Service Act;
(F) in accordance with section 1413, inform
individuals of eligibility requirements for the medicaid
program under title XIX of the Social Security Act, the
CHIP program under title XXI of such Act, or any
applicable State or local public program and if through
screening of the application by the Exchange, the
Exchange determines that such individuals are eligible
for any such program, enroll such individuals in such
program;
(G) establish and make available by electronic means
a calculator to determine the actual cost of coverage
after the application of any premium tax credit under
section 36B of the Internal Revenue Code of 1986 and any
cost-sharing reduction under section 1402;
(H) <> subject to section
1411, grant a certification attesting that, for purposes
of the individual responsibility penalty under section
5000A of the Internal Revenue Code of 1986, an
individual is exempt from the individual requirement or
from the penalty imposed by such section because--
(i) there is no affordable qualified health
plan available through the Exchange, or the
individual's employer, covering the individual; or
(ii) the individual meets the requirements for
any other such exemption from the individual
responsibility requirement or penalty;
(I) transfer to the Secretary of the Treasury--
(i) <> a list of the individuals
who are issued a certification under subparagraph
(H), including the name and taxpayer
identification number of each individual;
(ii) the name and taxpayer identification
number of each individual who was an employee of
an employer but who was determined to be eligible
for the premium tax credit under section 36B of
the Internal Revenue Code of 1986 because--
(I) the employer did not provide
minimum essential coverage; or
(II) the employer provided such
minimum essential coverage but it was
determined under section 36B(c)(2)(C) of
such Code to either be unaffordable to
the employee or not provide the required
minimum actuarial value; and
(iii) the name and taxpayer identification
number of each individual who notifies the
Exchange under section 1411(b)(4) that they have
changed employers and of each individual who
ceases coverage under a qualified health plan
during a plan year (and the effective date of such
cessation);
(J) provide to each employer the name of each
employee of the employer described in subparagraph
(I)(ii) who ceases coverage under a qualified health
plan during a plan year (and the effective date of such
cessation); and
(K) establish the Navigator program described in
subsection (i).
(5) Funding limitations.--
[[Page 178]]
(A) No federal funds for continued
operations. <> --In establishing
an Exchange under this section, the State shall ensure
that such Exchange is self-sustaining beginning on
January 1, 2015, including allowing the Exchange to
charge assessments or user fees to participating health
insurance issuers, or to otherwise generate funding, to
support its operations.
(B) Prohibiting wasteful use of funds.--In carrying
out activities under this subsection, an Exchange shall
not utilize any funds intended for the administrative
and operational expenses of the Exchange for staff
retreats, promotional giveaways, excessive executive
compensation, or promotion of Federal or State
legislative and regulatory modifications.
(6) Consultation.--An Exchange shall consult with
stakeholders relevant to carrying out the activities under this
section, including--
(A) health care consumers who are enrollees in
qualified health plans;
(B) individuals and entities with experience in
facilitating enrollment in qualified health plans;
(C) representatives of small businesses and self-
employed individuals;
(D) State Medicaid offices; and
(E) advocates for enrolling hard to reach
populations.
(7) Publication of costs.-- <> An Exchange
shall publish the average costs of licensing, regulatory fees,
and any other payments required by the Exchange, and the
administrative costs of such Exchange, on an Internet website to
educate consumers on such costs. Such information shall also
include monies lost to waste, fraud, and abuse.
(e) Certification.--
(1) In general.--An Exchange may certify a health plan as a
qualified health plan if--
(A) such health plan meets the requirements for
certification as promulgated by the Secretary under
subsection (c)(1); and
(B) <> the Exchange determines
that making available such health plan through such
Exchange is in the interests of qualified individuals
and qualified employers in the State or States in which
such Exchange operates, except that the Exchange may not
exclude a health plan--
(i) on the basis that such plan is a fee-for-
service plan;
(ii) through the imposition of premium price
controls; or
(iii) on the basis that the plan provides
treatments necessary to prevent patients' deaths
in circumstances the Exchange determines are
inappropriate or too costly.
(2) Premium considerations.--The Exchange shall require
health plans seeking certification as qualified health plans to
submit a justification for any premium increase prior to
implementation of the increase. <> Such plans
shall prominently post such information on their websites. The
Exchange may take this information, and the information and the
recommendations provided to the Exchange by the State under
[[Page 179]]
section 2794(b)(1) of the Public Health Service Act (relating to
patterns or practices of excessive or unjustified premium
increases), into consideration when determining whether to make
such health plan available through the Exchange. The Exchange
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.
(f) Flexibility.--
(1) Regional or other interstate exchanges.--An Exchange may
operate in more than one State if--
(A) each State in which such Exchange operates
permits such operation; and
(B) the Secretary approves such regional or
interstate Exchange.
(2) Subsidiary exchanges.--A State may establish one or more
subsidiary Exchanges if--
(A) each such Exchange serves a geographically
distinct area; and
(B) the area served by each such Exchange is at
least as large as a rating area described in section
2701(a) of the Public Health Service Act.
(3) Authority to contract.--
(A) In general.--A State may elect to authorize an
Exchange established by the State under this section to
enter into an agreement with an eligible entity to carry
out 1 or more responsibilities of the Exchange.
(B) Eligible entity. <> --In this
paragraph, the term ``eligible entity'' means--
(i) a person--
(I) incorporated under, and subject
to the laws of, 1 or more States;
(II) that has demonstrated
experience on a State or regional basis
in the individual and small group health
insurance markets and in benefits
coverage; and
(III) that is not a health insurance
issuer or that is treated under
subsection (a) or (b) of section 52 of
the Internal Revenue Code of 1986 as a
member of the same controlled group of
corporations (or under common control
with) as a health insurance issuer; or
(ii) the State medicaid agency under title XIX
of the Social Security Act.
(g) Rewarding Quality Through Market-Based Incentives.--
(1) Strategy described.--A strategy described in this
paragraph is a payment structure that provides increased
reimbursement or other incentives for--
(A) improving health outcomes through the
implementation of activities that shall include quality
reporting, effective case management, care coordination,
chronic disease management, medication and care
compliance initiatives, including through the use of the
medical home model, for treatment or services under the
plan or coverage;
[[Page 180]]
(B) the implementation of activities to prevent
hospital readmissions through a comprehensive program
for hospital discharge that includes patient-centered
education and counseling, comprehensive discharge
planning, and post discharge reinforcement by an
appropriate health care professional;
(C) the implementation of activities to improve
patient safety and reduce medical errors through the
appropriate use of best clinical practices, evidence
based medicine, and health information technology under
the plan or coverage; and
(D) the implementation of wellness and health
promotion activities.
(2) Guidelines.--The Secretary, in consultation with experts
in health care quality and stakeholders, shall develop
guidelines concerning the matters described in paragraph (1).
(3) Requirements.-- <> The guidelines
developed under paragraph (2) shall require the periodic
reporting to the applicable Exchange of the activities that a
qualified health plan has conducted to implement a strategy
described in paragraph (1).
(h) Quality Improvement.--
(1) Enhancing patient safety.-- <> Beginning on January 1, 2015, a qualified health plan
may contract with--
(A) a hospital with greater than 50 beds only if
such hospital--
(i) utilizes a patient safety evaluation
system as described in part C of title IX of the
Public Health Service Act; and
(ii) implements a mechanism to ensure that
each patient receives a comprehensive program for
hospital discharge that includes patient-centered
education and counseling, comprehensive discharge
planning, and post discharge reinforcement by an
appropriate health care professional; or
(B) a health care provider only if such provider
implements such mechanisms to improve health care
quality as the Secretary may by regulation require.
(2) Exceptions.--The Secretary may establish reasonable
exceptions to the requirements described in paragraph (1).
(3) Adjustment.--The Secretary may by regulation adjust the
number of beds described in paragraph (1)(A).
(i) Navigators.--
(1) <> In general.--An Exchange shall
establish a program under which it awards grants to entities
described in paragraph (2) to carry out the duties described in
paragraph (3).
(2) Eligibility.--
(A) In general.--To be eligible to receive a grant
under paragraph (1), an entity shall demonstrate to the
Exchange involved that the entity has existing
relationships, or could readily establish relationships,
with employers and employees, consumers (including
uninsured and underinsured consumers), or self-employed
individuals likely to be qualified to enroll in a
qualified health plan.
(B) Types.--Entities described in subparagraph (A)
may include trade, industry, and professional
associations, commercial fishing industry organizations,
ranching and farming organizations, community and
consumer-focused
[[Page 181]]
nonprofit groups, chambers of commerce, unions, small
business development centers, other licensed insurance
agents and brokers, and other entities that--
(i) are capable of carrying out the duties
described in paragraph (3);
(ii) meet the standards described in paragraph
(4); and
(iii) provide information consistent with the
standards developed under paragraph (5).
(3) Duties.--An entity that serves as a navigator under a
grant under this subsection shall--
(A) conduct public education activities to raise
awareness of the availability of qualified health plans;
(B) distribute fair and impartial information
concerning enrollment in qualified health plans, and the
availability of premium tax credits under section 36B of
the Internal Revenue Code of 1986 and cost-sharing
reductions under section 1402;
(C) facilitate enrollment in qualified health plans;
(D) provide referrals to any applicable office of
health insurance consumer assistance or health insurance
ombudsman established under section 2793 of the Public
Health Service Act, or any other appropriate State
agency or agencies, for any enrollee with a grievance,
complaint, or question regarding their health plan,
coverage, or a determination under such plan or
coverage; and
(E) provide information in a manner that is
culturally and linguistically appropriate to the needs
of the population being served by the Exchange or
Exchanges.
(4) Standards.--
(A) In general.--The Secretary shall establish
standards for navigators under this subsection,
including provisions to ensure that any private or
public entity that is selected as a navigator is
qualified, and licensed if appropriate, to engage in the
navigator activities described in this subsection and to
avoid conflicts of interest. Under such standards, a
navigator shall not--
(i) be a health insurance issuer; or
(ii) receive any consideration directly or
indirectly from any health insurance issuer in
connection with the enrollment of any qualified
individuals or employees of a qualified employer
in a qualified health plan.
(5) Fair and impartial information and services.--
<> The Secretary, in collaboration with
States, shall develop standards to ensure that information made
available by navigators is fair, accurate, and impartial.
(6) Funding.--Grants under this subsection shall be made
from the operational funds of the Exchange and not Federal funds
received by the State to establish the Exchange.
(j) Applicability of Mental Health Parity.--Section 2726 of the
Public Health Service Act shall apply to qualified health plans in the
same manner and to the same extent as such section applies to health
insurance issuers and group health plans.
(k) Conflict.--An Exchange may not establish rules that conflict
with or prevent the application of regulations promulgated by the
Secretary under this subtitle.
[[Page 182]]
SEC. 1312. <> CONSUMER CHOICE.
(a) Choice.--
(1) Qualified individuals.--A qualified individual may
enroll in any qualified health plan available to such
individual.
(2) Qualified employers.--
(A) Employer may specify level.--A qualified
employer may provide support for coverage of employees
under a qualified health plan by selecting any level of
coverage under section 1302(d) to be made available to
employees through an Exchange.
(B) Employee may choose plans within a level.--Each
employee of a qualified employer that elects a level of
coverage under subparagraph (A) may choose to enroll in
a qualified health plan that offers coverage at that
level.
(b) Payment of Premiums by Qualified Individuals.--A qualified
individual enrolled in any qualified health plan may pay any applicable
premium owed by such individual to the health insurance issuer issuing
such qualified health plan.
(c) Single Risk Pool.--
(1) Individual market.--A health insurance issuer shall
consider all enrollees in all health plans (other than
grandfathered health plans) offered by such issuer in the
individual market, including those enrollees who do not enroll
in such plans through the Exchange, to be members of a single
risk pool.
(2) Small group market.--A health insurance issuer shall
consider all enrollees in all health plans (other than
grandfathered health plans) offered by such issuer in the small
group market, including those enrollees who do not enroll in
such plans through the Exchange, to be members of a single risk
pool.
(3) Merger of markets.--A State may require the individual
and small group insurance markets within a State to be merged if
the State determines appropriate.
(4) State law.--A State law requiring grandfathered health
plans to be included in a pool described in paragraph (1) or (2)
shall not apply.
(d) Empowering Consumer Choice.--
(1) Continued operation of market outside exchanges.--
Nothing in this title shall be construed to prohibit--
(A) a health insurance issuer from offering outside
of an Exchange a health plan to a qualified individual
or qualified employer; and
(B) a qualified individual from enrolling in, or a
qualified employer from selecting for its employees, a
health plan offered outside of an Exchange.
(2) Continued operation of state benefit requirements.--
Nothing in this title shall be construed to terminate, abridge,
or limit the operation of any requirement under State law with
respect to any policy or plan that is offered outside of an
Exchange to offer benefits.
(3) Voluntary nature of an exchange.--
(A) Choice to enroll or not to enroll.--Nothing in
this title shall be construed to restrict the choice of
[[Page 183]]
a qualified individual to enroll or not to enroll in a
qualified health plan or to participate in an Exchange.
(B) Prohibition against compelled enrollment.--
Nothing in this title shall be construed to compel an
individual to enroll in a qualified health plan or to
participate in an Exchange.
(C) Individuals allowed to enroll in any plan.--A
qualified individual may enroll in any qualified health
plan, except that in the case of a catastrophic plan
described in section 1302(e), a qualified individual may
enroll in the plan only if the individual is eligible to
enroll in the plan under section 1302(e)(2).
(D) Members of congress in the exchange.--
(i) Requirement.--Notwithstanding any other
provision of law, after the effective date of this
subtitle, the only health plans that the Federal
Government may make available to Members of
Congress and congressional staff with respect to
their service as a Member of Congress or
congressional staff shall be health plans that
are--
(I) created under this Act (or an
amendment made by this Act); or
(II) offered through an Exchange
established under this Act (or an
amendment made by this Act).
(ii) Definitions.--In this section:
(I) Member of congress.--The term
``Member of Congress'' means any member
of the House of Representatives or the
Senate.
(II) Congressional staff.--The term
``congressional staff'' means all full-
time and part-time employees employed by
the official office of a Member of
Congress, whether in Washington, DC or
outside of Washington, DC.
(4) No penalty for transferring to minimum essential
coverage outside exchange.--An Exchange, or a qualified health
plan offered through an Exchange, shall not impose any penalty
or other fee on an individual who cancels enrollment in a plan
because the individual becomes eligible for minimum essential
coverage (as defined in section 5000A(f) of the Internal Revenue
Code of 1986 without regard to paragraph (1)(C) or (D) thereof)
or such coverage becomes affordable (within the meaning of
section 36B(c)(2)(C) of such Code).
(e) Enrollment Through Agents or Brokers. <> --
The Secretary shall establish procedures under which a State may allow
agents or brokers--
(1) to enroll individuals in any qualified health plans in
the individual or small group market as soon as the plan is
offered through an Exchange in the State; and
(2) to assist individuals in applying for premium tax
credits and cost-sharing reductions for plans sold through an
Exchange.
Such procedures may include the establishment of rate schedules for
broker commissions paid by health benefits plans offered through an
exchange.
(f) Qualified Individuals and Employers; Access Limited to Citizens
and Lawful Residents.--
(1) Qualified individuals.--In this title:
[[Page 184]]
(A) In general. <> --The term
``qualified individual'' means, with respect to an
Exchange, an individual who--
(i) is seeking to enroll in a qualified health
plan in the individual market offered through the
Exchange; and
(ii) resides in the State that established the
Exchange (except with respect to territorial
agreements under section 1312(f)).
(B) Incarcerated individuals excluded.--An
individual shall not be treated as a qualified
individual if, at the time of enrollment, the individual
is incarcerated, other than incarceration pending the
disposition of charges.
(2) Qualified employer.--In this title:
(A) In general. <> --The term
``qualified employer'' means a small employer that
elects to make all full-time employees of such employer
eligible for 1 or more qualified health plans offered in
the small group market through an Exchange that offers
qualified health plans.
(B) Extension to large groups.--
(i) In general. <> --
Beginning in 2017, each State may allow issuers of
health insurance coverage in the large group
market in the State to offer qualified health
plans in such market through an Exchange. Nothing
in this subparagraph shall be construed as
requiring the issuer to offer such plans through
an Exchange.
(ii) Large employers eligible.--If a State
under clause (i) allows issuers to offer qualified
health plans in the large group market through an
Exchange, the term ``qualified employer'' shall
include a large employer that elects to make all
full-time employees of such employer eligible for
1 or more qualified health plans offered in the
large group market through the Exchange.
(3) Access limited to lawful residents.--If an individual is
not, or is not reasonably expected to be for the entire period
for which enrollment is sought, a citizen or national of the
United States or an alien lawfully present in the United States,
the individual shall not be treated as a qualified individual
and may not be covered under a qualified health plan in the
individual market that is offered through an Exchange.
SEC. 1313. <> FINANCIAL INTEGRITY.
(a) Accounting for Expenditures.--
(1) In general.-- <> An Exchange
shall keep an accurate accounting of all activities, receipts,
and expenditures and shall annually submit to the Secretary a
report concerning such accountings.
(2) Investigations.--The Secretary, in coordination with the
Inspector General of the Department of Health and Human
Services, may investigate the affairs of an Exchange, may
examine the properties and records of an Exchange, and may
require periodic reports in relation to activities undertaken by
an Exchange. An Exchange shall fully cooperate in any
investigation conducted under this paragraph.
(3) Audits.-- <> An Exchange shall be
subject to annual audits by the Secretary.
[[Page 185]]
(4) Pattern of abuse.-- <> If the
Secretary determines that an Exchange or a State has engaged in
serious misconduct with respect to compliance with the
requirements of, or carrying out of activities required under,
this title, the Secretary may rescind from payments otherwise
due to such State involved under this or any other Act
administered by the Secretary an amount not to exceed 1 percent
of such payments per year until corrective actions are taken by
the State that are determined to be adequate by the Secretary.
(5) Protections against fraud and abuse.--With respect to
activities carried out under this title, the Secretary shall
provide for the efficient and non-discriminatory administration
of Exchange activities and implement any measure or procedure
that--
(A) the Secretary determines is appropriate to
reduce fraud and abuse in the administration of this
title; and
(B) the Secretary has authority to implement under
this title or any other Act.
(6) Application of the false claims act.--
(A) In general.--Payments made by, through, or in
connection with an Exchange are subject to the False
Claims Act (31 U.S.C. 3729 et seq.) if those payments
include any Federal funds. Compliance with the
requirements of this Act concerning eligibility for a
health insurance issuer to participate in the Exchange
shall be a material condition of an issuer's entitlement
to receive payments, including payments of premium tax
credits and cost-sharing reductions, through the
Exchange.
(B) Damages <> .--Notwithstanding
paragraph (1) of section 3729(a) of title 31, United
States Code, and subject to paragraph (2) of such
section, the civil penalty assessed under the False
Claims Act on any person found liable under such Act as
described in subparagraph (A) shall be increased by not
less than 3 times and not more than 6 times the amount
of damages which the Government sustains because of the
act of that person.
(b) GAO Oversight. <> --Not later than 5
years after the first date on which Exchanges are required to be
operational under this title, the Comptroller General shall conduct an
ongoing study of Exchange activities and the enrollees in qualified
health plans offered through Exchanges. Such study shall review--
(1) the operations and administration of Exchanges,
including surveys and reports of qualified health plans offered
through Exchanges and on the experience of such plans (including
data on enrollees in Exchanges and individuals purchasing health
insurance coverage outside of Exchanges), the expenses of
Exchanges, claims statistics relating to qualified health plans,
complaints data relating to such plans, and the manner in which
Exchanges meet their goals;
(2) any significant observations regarding the utilization
and adoption of Exchanges;
(3) where appropriate, recommendations for improvements in
the operations or policies of Exchanges; and
(4) how many physicians, by area and specialty, are not
taking or accepting new patients enrolled in Federal Government
health care programs, and the adequacy of provider networks of
Federal Government health care programs.
[[Page 186]]
PART III--STATE FLEXIBILITY RELATING TO EXCHANGES
SEC. 1321. <> STATE FLEXIBILITY IN OPERATION AND
ENFORCEMENT OF EXCHANGES AND RELATED REQUIREMENTS.
(a) Establishment of Standards.--
(1) In general.-- <> The Secretary
shall, as soon as practicable after the date of enactment of
this Act, issue regulations setting standards for meeting the
requirements under this title, and the amendments made by this
title, with respect to--
(A) the establishment and operation of Exchanges
(including SHOP Exchanges);
(B) the offering of qualified health plans through
such Exchanges;
(C) the establishment of the reinsurance and risk
adjustment programs under part V; and
(D) such other requirements as the Secretary
determines appropriate.
The preceding sentence shall not apply to standards for
requirements under subtitles A and C (and the amendments made by
such subtitles) for which the Secretary issues regulations under
the Public Health Service Act.
(2) Consultation.--In issuing the regulations under
paragraph (1), the Secretary shall consult with the National
Association of Insurance Commissioners and its members and with
health insurance issuers, consumer organizations, and such other
individuals as the Secretary selects in a manner designed to
ensure balanced representation among interested parties.
(b) State Action <> .--Each State that elects, at
such time and in such manner as the Secretary may prescribe, to apply
the requirements described in subsection (a) shall, not later than
January 1, 2014, adopt and have in effect--
(1) the Federal standards established under subsection (a);
or
(2) a State law or regulation that the Secretary determines
implements the standards within the State.
(c) Failure To Establish Exchange or Implement Requirements.--
(1) In general.--If--
(A) a State is not an electing State under
subsection (b); or
(B) <> the Secretary
determines, on or before January 1, 2013, that an
electing State--
(i) will not have any required Exchange
operational by January 1, 2014; or
(ii) has not taken the actions the Secretary
determines necessary to implement--
(I) the other requirements set forth
in the standards under subsection (a);
or
(II) the requirements set forth in
subtitles A and C and the amendments
made by such subtitles;
the Secretary shall (directly or through agreement with a not-
for-profit entity) establish and operate such Exchange within
the State and the Secretary shall take such actions as are
necessary to implement such other requirements.
[[Page 187]]
(2) Enforcement authority.-- <> The
provisions of section 2736(b) of the Public Health Services Act
shall apply to the enforcement under paragraph (1) of
requirements of subsection (a)(1) (without regard to any
limitation on the application of those provisions to group
health plans).
(d) No Interference With State Regulatory Authority.--Nothing in
this title shall be construed to preempt any State law that does not
prevent the application of the provisions of this title.
(e) Presumption for Certain State-Operated Exchanges.--
(1) In general.-- <> In the case of a
State operating an Exchange before January 1, 2010, and which
has insured a percentage of its population not less than the
percentage of the population projected to be covered nationally
after the implementation of this Act, that seeks to operate an
Exchange under this section, the Secretary shall presume that
such Exchange meets the standards under this section unless the
Secretary determines, after completion of the process
established under paragraph (2), that the Exchange does not
comply with such standards.
(2) Process.--The Secretary shall establish a process to
work with a State described in paragraph (1) to provide
assistance necessary to assist the State's Exchange in coming
into compliance with the standards for approval under this
section.
SEC. 1322. <> FEDERAL PROGRAM TO ASSIST
ESTABLISHMENT AND OPERATION OF NONPROFIT, MEMBER-RUN HEALTH
INSURANCE ISSUERS.
(a) Establishment of Program.--
(1) In general.--The Secretary shall establish a program to
carry out the purposes of this section to be known as the
Consumer Operated and Oriented Plan (CO-OP) program.
(2) Purpose.--It is the purpose of the CO-OP program to
foster the creation of qualified nonprofit health insurance
issuers to offer qualified health plans in the individual and
small group markets in the States in which the issuers are
licensed to offer such plans.
(b) Loans and Grants Under the CO-OP Program.--
(1) In general.--The Secretary shall provide through the CO-
OP program for the awarding to persons applying to become
qualified nonprofit health insurance issuers of--
(A) loans to provide assistance to such person in
meeting its start-up costs; and
(B) grants to provide assistance to such person in
meeting any solvency requirements of States in which the
person seeks to be licensed to issue qualified health
plans.
(2) Requirements for awarding loans and grants.--
(A) In general.--In awarding loans and grants under
the CO-OP program, the Secretary shall--
(i) take into account the recommendations of
the advisory board established under paragraph
(3);
(ii) give priority to applicants that will
offer qualified health plans on a Statewide basis,
will utilize integrated care models, and have
significant private support; and
(iii) ensure that there is sufficient funding
to establish at least 1 qualified nonprofit health
insurance
[[Page 188]]
issuer in each State, except that nothing in this
clause shall prohibit the Secretary from funding
the establishment of multiple qualified nonprofit
health insurance issuers in any State if the
funding is sufficient to do so.
(B) States without issuers in program.--If no health
insurance issuer applies to be a qualified nonprofit
health insurance issuer within a State, the Secretary
may use amounts appropriated under this section for the
awarding of grants to encourage the establishment of a
qualified nonprofit health insurance issuer within the
State or the expansion of a qualified nonprofit health
insurance issuer from another State to the State.
(C) Agreement.--
(i) In general.--The Secretary shall require
any person receiving a loan or grant under the CO-
OP program to enter into an agreement with the
Secretary which requires such person to meet (and
to continue to meet)--
(I) any requirement under this
section for such person to be treated as
a qualified nonprofit health insurance
issuer; and
(II) any requirements contained in
the agreement for such person to receive
such loan or grant.
(ii) Restrictions on use of federal funds.--
The agreement shall include a requirement that no
portion of the funds made available by any loan or
grant under this section may be used--
(I) <> for carrying
on propaganda, or otherwise attempting,
to influence legislation; or
(II) for marketing.
Nothing in this clause shall be construed to allow
a person to take any action prohibited by section
501(c)(29) of the Internal Revenue Code of 1986.
(iii) Failure to meet
requirements <> .--
If the Secretary determines that a person has
failed to meet any requirement described in clause
(i) or (ii) and has failed to correct such failure
within a reasonable period of time of when the
person first knows (or reasonably should have
known) of such failure, such person shall repay to
the Secretary an amount equal to the sum of--
(I) 110 percent of the aggregate
amount of loans and grants received
under this section; plus
(II) interest on the aggregate
amount of loans and grants received
under this section for the period the
loans or grants were outstanding.
<> The Secretary shall notify
the Secretary of the Treasury of any determination
under this section of a failure that results in
the termination of an issuer's tax-exempt status
under section 501(c)(29) of such Code.
(D) Time for awarding loans and
grants. <> --The Secretary shall not
later than July 1, 2013, award the loans and grants
under the CO-OP program and begin the distribution of
amounts awarded under such loans and grants.
(3) <> Advisory board.--
[[Page 189]]
(A) In general.--The advisory board under this
paragraph shall consist of 15 members appointed by the
Comptroller General of the United States from among
individuals with qualifications described in section
1805(c)(2) of the Social Security Act.
(B) Rules relating to appointments.--
(i) Standards.--Any individual appointed under
subparagraph (A) shall meet ethics and conflict of
interest standards protecting against insurance
industry involvement and interference.
(ii) Original
appointments. <> --The original
appointment of board members under subparagraph
(A)(ii) shall be made no later than 3 months after
the date of enactment of this Act.
(C) Vacancy.--Any vacancy on the advisory board
shall be filled in the same manner as the original
appointment.
(D) Pay and reimbursement.--
(i) No compensation for members of advisory
board.--Except as provided in clause (ii), a
member of the advisory board may not receive pay,
allowances, or benefits by reason of their service
on the board.
(ii) Travel expenses.--Each member shall
receive travel expenses, including per diem in
lieu of subsistence under subchapter I of chapter
57 of title 5, United States Code.
(E) Application of faca.--The Federal Advisory
Committee Act (5 U.S.C. App.) shall apply to the
advisory board, except that section 14 of such Act shall
not apply.
(F) Termination.--The advisory board shall terminate
on the earlier of the date that it completes its duties
under this section or December 31, 2015.
(c) Qualified Nonprofit Health Insurance Issuer.--For purposes of
this section--
(1) In general.-- <> The term ``qualified
nonprofit health insurance issuer'' means a health insurance
issuer that is an organization--
(A) that is organized under State law as a
nonprofit, member corporation;
(B) substantially all of the activities of which
consist of the issuance of qualified health plans in the
individual and small group markets in each State in
which it is licensed to issue such plans; and
(C) that meets the other requirements of this
subsection.
(2) Certain organizations prohibited.--An organization shall
not be treated as a qualified nonprofit health insurance issuer
if--
(A) the organization or a related entity (or any
predecessor of either) was a health insurance issuer on
July 16, 2009; or
(B) the organization is sponsored by a State or
local government, any political subdivision thereof, or
any instrumentality of such government or political
subdivision.
(3) Governance requirements.--An organization shall not be
treated as a qualified nonprofit health insurance issuer
unless--
[[Page 190]]
(A) the governance of the organization is subject to
a majority vote of its members;
(B) its governing documents incorporate ethics and
conflict of interest standards protecting against
insurance industry involvement and interference; and
(C) as provided in regulations promulgated by the
Secretary, the organization is required to operate with
a strong consumer focus, including timeliness,
responsiveness, and accountability to members.
(4) Profits inure to benefit of members.--An organization
shall not be treated as a qualified nonprofit health insurance
issuer unless any profits made by the organization are required
to be used to lower premiums, to improve benefits, or for other
programs intended to improve the quality of health care
delivered to its members.
(5) Compliance with state insurance laws.--An organization
shall not be treated as a qualified nonprofit health insurance
issuer unless the organization meets all the requirements that
other issuers of qualified health plans are required to meet in
any State where the issuer offers a qualified health plan,
including solvency and licensure requirements, rules on payments
to providers, and compliance with network adequacy rules, rate
and form filing rules, any applicable State premium assessments
and any other State law described in section 1324(b).
(6) Coordination with state insurance reforms.--An
organization shall not be treated as a qualified nonprofit
health insurance issuer unless the organization does not offer a
health plan in a State until that State has in effect (or the
Secretary has implemented for the State) the market reforms
required by part A of title XXVII of the Public Health Service
Act (as amended by subtitles A and C of this Act).
(d) Establishment of Private Purchasing Council.--
(1) In general.--Qualified nonprofit health insurance
issuers participating in the CO-OP program under this section
may establish a private purchasing council to enter into
collective purchasing arrangements for items and services that
increase administrative and other cost efficiencies, including
claims administration, administrative services, health
information technology, and actuarial services.
(2) Council may not set payment rates.--The private
purchasing council established under paragraph (1) shall not set
payment rates for health care facilities or providers
participating in health insurance coverage provided by qualified
nonprofit health insurance issuers.
(3) Continued application of antitrust laws.--
(A) In general.--Nothing in this section shall be
construed to limit the application of the antitrust laws
to any private purchasing council (whether or not
established under this subsection) or to any qualified
nonprofit health insurance issuer participating in such
a council.
(B) Antitrust laws.--For purposes of this
subparagraph, the term ``antitrust laws'' has the
meaning given the term in subsection (a) of the first
section of the Clayton Act (15 U.S.C. 12(a)). Such term
also includes section 5 of the Federal Trade Commission
Act (15 U.S.C. 45) to
[[Page 191]]
the extent that such section 5 applies to unfair methods
of competition.
(e) Limitation on Participation.--No representative of any Federal,
State, or local government (or of any political subdivision or
instrumentality thereof), and no representative of a person described in
subsection (c)(2)(A), may serve on the board of directors of a qualified
nonprofit health insurance issuer or with a private purchasing council
established under subsection (d).
(f) Limitations on Secretary.--
(1) In general.--The Secretary shall not--
(A) participate in any negotiations between 1 or
more qualified nonprofit health insurance issuers (or a
private purchasing council established under subsection
(d)) and any health care facilities or providers,
including any drug manufacturer, pharmacy, or hospital;
and
(B) establish or maintain a price structure for
reimbursement of any health benefits covered by such
issuers.
(2) Competition.--Nothing in this section shall be construed
as authorizing the Secretary to interfere with the competitive
nature of providing health benefits through qualified nonprofit
health insurance issuers.
(g) Appropriations.--There are hereby appropriated, out of any funds
in the Treasury not otherwise appropriated, $6,000,000,000 to carry out
this section.
(h) Tax Exemption for Qualified Nonprofit Health Insurance Issuer.--
(1) In general.--Section 501(c) of the Internal Revenue Code
of 1986 <> (relating to list of exempt
organizations) is amended by adding at the end the following:
``(29) CO-OP health insurance issuers.--
``(A) In general.--A qualified nonprofit health
insurance issuer (within the meaning of section 1322 of
the Patient Protection and Affordable Care Act) which
has received a loan or grant under the CO-OP program
under such section, but only with respect to periods for
which the issuer is in compliance with the requirements
of such section and any agreement with respect to the
loan or grant.
``(B) Conditions for
exemption <> .--Subparagraph (A)
shall apply to an organization only if--
``(i) <> the organization has
given notice to the Secretary, in such manner as
the Secretary may by regulations prescribe, that
it is applying for recognition of its status under
this paragraph,
``(ii) except as provided in section
1322(c)(4) of the Patient Protection and
Affordable Care Act, no part of the net earnings
of which inures to the benefit of any private
shareholder or individual,
``(iii) <> no substantial
part of the activities of which is carrying on
propaganda, or otherwise attempting, to influence
legislation, and
``(iv) the organization does not participate
in, or intervene in (including the publishing or
distributing of statements), any political
campaign on behalf of (or in opposition to) any
candidate for public office.''.
[[Page 192]]
(2) Additional reporting requirement.--Section 6033 of such
Code (relating to returns by exempt organizations) is amended by
redesignating subsection (m) as subsection (n) and by inserting
after subsection (l) the following:
``(m) Additional Information Required From CO-OP Insurers.--An
organization described in section 501(c)(29) shall include on the return
required under subsection (a) the following information:
``(1) The amount of the reserves required by each State in
which the organization is licensed to issue qualified health
plans.
``(2) The amount of reserves on hand.''.
(3) Application of tax on excess benefit transactions.--
Section 4958(e)(1) of such Code (defining applicable tax-exempt
organization) is amended by striking ``paragraph (3) or (4)''
and inserting ``paragraph (3), (4), or (29)''.
(i) GAO Study and Report.--
(1) Study.--The Comptroller General of the General
Accountability Office shall conduct an ongoing study on
competition and market concentration in the health insurance
market in the United States after the implementation of the
reforms in such market under the provisions of, and the
amendments made by, this Act. Such study shall include an
analysis of new issuers of health insurance in such market.
(2) Report.-- <> The Comptroller
General shall, not later than December 31 of each even-numbered
year (beginning with 2014), report to the appropriate committees
of the Congress the results of the study conducted under
paragraph (1), including any recommendations for administrative
or legislative changes the Comptroller General determines
necessary or appropriate to increase competition in the health
insurance market.
SEC. 1323. <> COMMUNITY HEALTH INSURANCE OPTION.
(a) Voluntary Nature.--
(1) No requirement for health care providers to
participate.--Nothing in this section shall be construed to
require a health care provider to participate in a community
health insurance option, or to impose any penalty for non-
participation.
(2) No requirement for individuals to join.--Nothing in this
section shall be construed to require an individual to
participate in a community health insurance option, or to impose
any penalty for non-participation.
(3) State opt out.--
(A) In general.--A State may elect to prohibit
Exchanges in such State from offering a community health
insurance option if such State enacts a law to provide
for such prohibition.
(B) Termination of opt out.--A State may repeal a
law described in subparagraph (A) and provide for the
offering of such an option through the Exchange.
(b) Establishment of Community Health Insurance Option.--
(1) Establishment.--The Secretary shall establish a
community health insurance option to offer, through the
Exchanges established under this title (other than Exchanges
[[Page 193]]
in States that elect to opt out as provided for in subsection
(a)(3)), health care coverage that provides value, choice,
competition, and stability of affordable, high quality coverage
throughout the United States.
(2) Community health insurance option.--
<> In this section, the term ``community
health insurance option'' means health insurance coverage that--
(A) except as specifically provided for in this
section, complies with the requirements for being a
qualified health plan;
(B) provides high value for the premium charged;
(C) reduces administrative costs and promotes
administrative simplification for beneficiaries;
(D) promotes high quality clinical care;
(E) provides high quality customer service to
beneficiaries;
(F) offers a sufficient choice of providers; and
(G) complies with State laws (if any), except as
otherwise provided for in this title, relating to the
laws described in section 1324(b).
(3) Essential health benefits.--
(A) General rule.--Except as provided in
subparagraph (B), a community health insurance option
offered under this section shall provide coverage only
for the essential health benefits described in section
1302(b).
(B) States may offer additional benefits.--Nothing
in this section shall preclude a State from requiring
that benefits in addition to the essential health
benefits required under subparagraph (A) be provided to
enrollees of a community health insurance option offered
in such State.
(C) Credits.--
(i) In general.--An individual enrolled in a
community health insurance option under this
section shall be eligible for credits under
section 36B of the Internal Revenue Code of 1986
in the same manner as an individual who is
enrolled in a qualified health plan.
(ii) No additional federal cost.--A
requirement by a State under subparagraph (B) that
benefits in addition to the essential health
benefits required under subparagraph (A) be
provided to enrollees of a community health
insurance option shall not affect the amount of a
premium tax credit provided under section 36B of
the Internal Revenue Code of 1986 with respect to
such plan.
(D) State must assume cost <> .--A
State shall make payments to or on behalf of an eligible
individual to defray the cost of any additional benefits
described in subparagraph (B).
(E) Ensuring access to all services.--Nothing in
this Act shall prohibit an individual enrolled in a
community health insurance option from paying out-of-
pocket the full cost of any item or service not included
as an essential health benefit or otherwise covered as a
benefit by a health plan. Nothing in subparagraph (B)
shall prohibit any type of medical provider from
accepting an out-of-pocket payment from an individual
enrolled in a community health
[[Page 194]]
insurance option for a service otherwise not included as
an essential health benefit.
(F) Protecting access to end of life care.--A
community health insurance option offered under this
section shall be prohibited from limiting access to end
of life care.
(4) Cost sharing.--A community health insurance option shall
offer coverage at each of the levels of coverage described in
section 1302(d).
(5) Premiums.--
(A) Premiums sufficient to cover costs.--The
Secretary shall establish geographically adjusted
premium rates in an amount sufficient to cover expected
costs (including claims and administrative costs) using
methods in general use by qualified health plans.
(B) Applicable rules.--The provisions of title XXVII
of the Public Health Service Act relating to premiums
shall apply to community health insurance options under
this section, including modified community rating
provisions under section 2701 of such Act.
(C) Collection of data.--The Secretary shall collect
data as necessary to set premium rates under
subparagraph (A).
(D) National pooling.--Notwithstanding any other
provision of law, the Secretary may treat all enrollees
in community health insurance options as members of a
single pool.
(E) Contingency margin.--In establishing premium
rates under subparagraph (A), the Secretary shall
include an appropriate amount for a contingency margin.
(6) Reimbursement rates.--
(A) Negotiated rates.--The Secretary shall negotiate
rates for the reimbursement of health care providers for
benefits covered under a community health insurance
option.
(B) Limitation.--The rates described in subparagraph
(A) shall not be higher, in aggregate, than the average
reimbursement rates paid by health insurance issuers
offering qualified health plans through the Exchange.
(C) Innovation.--Subject to the limits contained in
subparagraph (A), a State Advisory Council established
or designated under subsection (d) may develop or
encourage the use of innovative payment policies that
promote quality, efficiency and savings to consumers.
(7) Solvency and consumer protection.--
(A) <> Solvency.--The Secretary
shall establish a Federal solvency standard to be
applied with respect to a community health insurance
option. A community health insurance option shall also
be subject to the solvency standard of each State in
which such community health insurance option is offered.
(B) Minimum required.--In establishing the standard
described under subparagraph (A), the Secretary shall
require a reserve fund that shall be equal to at least
the dollar value of the incurred but not reported claims
of a community health insurance option.
[[Page 195]]
(C) Consumer
protections <> .--The consumer
protection laws of a State shall apply to a community
health insurance option.
(8) Requirements established in partnership with insurance
commissioners.--
(A) In general.--The Secretary, in collaboration
with the National Association of Insurance Commissioners
(in this paragraph referred to as the ``NAIC''), may
promulgate regulations to establish additional
requirements for a community health insurance option.
(B) Applicability <> .--Any
requirement promulgated under subparagraph (A) shall be
applicable to such option beginning 90 days after the
date on which the regulation involved becomes final.
(c) Start-up Fund.--
(1) Establishment of fund.--
(A) In general.--There is established in the
Treasury of the United States a trust fund to be known
as the ``Health Benefit Plan Start-Up Fund'' (referred
to in this section as the ``Start-Up Fund''), that shall
consist of such amounts as may be appropriated or
credited to the Start-Up Fund as provided for in this
subsection to provide loans for the initial operations
of a community health insurance option. Such amounts
shall remain available until expended.
(B) Funding.--There is hereby appropriated to the
Start-Up Fund, out of any moneys in the Treasury not
otherwise appropriated an amount requested by the
Secretary of Health and Human Services as necessary to--
(i) pay the start-up costs associated with the
initial operations of a community health insurance
option; and
(ii) pay the costs of making payments on
claims submitted during the period that is not
more than 90 days from the date on which such
option is offered.
(2) Use of start-up fund.--The Secretary shall use amounts
contained in the Start-Up Fund to make payments (subject to the
repayment requirements in paragraph (4)) for the purposes
described in paragraph (1)(B).
(3) Pass through of rebates.--The Secretary may establish
procedures for reducing the amount of payments to a contracting
administrator to take into account any rebates or price
concessions.
(4) Repayment.--
(A) <> In general.--A community
health insurance option shall be required to repay the
Secretary of the Treasury (on such terms as the
Secretary may require) for any payments made under
paragraph (1)(B) by the date that is not later than 9
years after the date on which the payment is made. The
Secretary may require the payment of interest with
respect to such repayments at rates that do not exceed
the market interest rate (as determined by the
Secretary).
(B) Sanctions in case of for-profit conversion.--In
any case in which the Secretary enters into a contract
with a qualified entity for the offering of a community
health insurance option and such entity is determined to
[[Page 196]]
be a for-profit entity by the Secretary, such entity
shall be--
(i) immediately liable to the Secretary for
any payments received by such entity from the
Start-Up Fund; and
(ii) permanently ineligible to offer a
qualified health plan.
(d) State Advisory Council.--
(1) Establishment.--A State (other than a State that elects
to opt out as provided for in subsection (a)(3)) shall establish
or designate a public or non-profit private entity to serve as
the State Advisory Council to provide recommendations to the
Secretary on the operations and policies of a community health
insurance option in the State. Such Council shall provide
recommendations on at least the following:
(A) policies and procedures to integrate quality
improvement and cost containment mechanisms into the
health care delivery system;
(B) mechanisms to facilitate public awareness of the
availability of a community health insurance option; and
(C) alternative payment structures under a community
health insurance option for health care providers that
encourage quality improvement and cost control.
(2) Members.--The members of the State Advisory Council
shall be representatives of the public and shall include health
care consumers and providers.
(3) Applicability of recommendations.--The Secretary may
apply the recommendations of a State Advisory Council to a
community health insurance option in that State, in any other
State, or in all States.
(e) Authority To Contract; Terms of Contract.--
(1) Authority.--
(A) In general.--The Secretary may enter into a
contract or contracts with one or more qualified
entities 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 a community health insurance option in the
same manner as the Secretary may enter into contracts
under subsection (a)(1) of such section. The Secretary
shall have the same authority with respect to a
community health insurance option under this section 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.
(B) Requirements apply.--If the Secretary enters
into a contract with a qualified entity to offer a
community health insurance option, under such contract
such entity--
(i) shall meet the criteria established under
paragraph (2); and
(ii) <> shall receive an
administrative fee under paragraph (7).
(C) Limitation.--Contracts under this subsection
shall not involve the transfer of insurance risk to the
contracting administrator.
(D) Reference.--An entity with which the Secretary
has entered into a contract under this paragraph shall
be referred to as a ``contracting administrator''.
[[Page 197]]
(2) Qualified entity.--To be qualified to be selected by the
Secretary to offer a community health insurance option, an
entity shall--
(A) meet the criteria established under section
1874A(a)(2) of the Social Security Act;
(B) be a nonprofit entity for purposes of offering
such option;
(C) meet the solvency standards applicable under
subsection (b)(7);
(D) be eligible to offer health insurance or health
benefits coverage;
(E) meet quality standards specified by the
Secretary;
(F) have in place effective procedures to control
fraud, abuse, and waste; and
(G) meet such other requirements as the Secretary
may impose.
Procedures described under subparagraph (F) shall include the
implementation of procedures to use beneficiary identifiers to
identify individuals entitled to benefits so that such an
individual's social security account number is not used, and
shall also include procedures for the use of technology
(including front-end, prepayment intelligent data-matching
technology similar to that used by hedge funds, investment
funds, and banks) to provide real-time data analysis of claims
for payment under this title to identify and investigate unusual
billing or order practices under this title that could indicate
fraud or abuse.
(3) Term.--A contract provided for under paragraph (1) shall
be for a term of at least 5 years but not more than 10 years, as
determined by the Secretary. At the end of each such term, the
Secretary shall conduct a competitive bidding process for the
purposes of renewing existing contracts or selecting new
qualified entities with which to enter into contracts under such
paragraph.
(4) <> Limitation.--A contract may
not be renewed under this subsection unless the Secretary
determines that the contracting administrator has met
performance requirements established by the Secretary in the
areas described in paragraph (7)(B).
(5) Audits.--The Inspector General shall conduct periodic
audits with respect to contracting administrators under this
subsection to ensure that the administrator involved is in
compliance with this section.
(6) Revocation.-- <> A contract awarded
under this subsection shall be revoked by the Secretary, upon
the recommendation of the Inspector General, only after notice
to the contracting administrator involved and an opportunity for
a hearing. The Secretary may revoke such contract if the
Secretary determines that such administrator has engaged in
fraud, deception, waste, abuse of power, negligence,
mismanagement of taxpayer dollars, or gross mismanagement. An
entity that has had a contract revoked under this paragraph
shall not be qualified to enter into a subsequent contract under
this subsection.
(7) Fee for administration.--
(A) In general.--The Secretary shall pay the
contracting administrator a fee for the management,
administration, and delivery of the benefits under this
section.
[[Page 198]]
(B) Requirement for high quality administration.--
The Secretary may increase the fee described in
subparagraph (A) by not more than 10 percent, or reduce
the fee described in subparagraph (A) by not more than
50 percent, based on the extent to which the contracting
administrator, in the determination of the Secretary,
meets performance requirements established by the
Secretary, in at least the following areas:
(i) Maintaining low premium costs and low cost
sharing requirements, provided that such
requirements are consistent with section 1302.
(ii) Reducing administrative costs and
promoting administrative simplification for
beneficiaries.
(iii) Promoting high quality clinical care.
(iv) Providing high quality customer service
to beneficiaries.
(C) Non-renewal.--The Secretary may not renew a
contract to offer a community health insurance option
under this section with any contracting entity that has
been assessed more than one reduction under subparagraph
(B) during the contract period.
(8) Limitation.--Notwithstanding the terms of a contract
under this subsection, the Secretary shall negotiate the
reimbursement rates for purposes of subsection (b)(6).
(f) Report by HHS and Insolvency Warnings.--
(1) In general.--On an annual basis, the Secretary shall
conduct a study on the solvency of a community health insurance
option and submit to Congress a report describing the results of
such study.
(2) Result.--If, in any year, the result of the study under
paragraph (1) is that a community health insurance option is
insolvent, such result shall be treated as a community health
insurance option solvency warning.
(3) Submission of plan and procedure.--
(A) In general <> .--If
there is a community health insurance option solvency
warning under paragraph (2) made in a year, the
President shall submit to Congress, within the 15-day
period beginning on the date of the budget submission to
Congress under section 1105(a) of title 31, United
States Code, for the succeeding year, proposed
legislation to respond to such warning.
(B) Procedure.--In the case of a legislative
proposal submitted by the President pursuant to
subparagraph (A), such proposal shall be considered by
Congress using the same procedures described under
sections 803 and 804 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 that shall be
used for a medicare funding warning.
(g) Marketing Parity.--In a facility controlled by the Federal
Government, or by a State, where marketing or promotional materials
related to a community health insurance option are made available to the
public, making available marketing or promotional materials relating to
private health insurance plans shall not be prohibited. Such materials
include informational pamphlets, guidebooks, enrollment forms, or other
materials determined reasonable for display.
[[Page 199]]
(h) Authorization of Appropriations.--There is authorized to be
appropriated such sums as may be necessary to carry out this section.
SEC. 1324. <> LEVEL PLAYING FIELD.
(a) In General.--Notwithstanding any other provision of law, any
health insurance coverage offered by a private health insurance issuer
shall not be subject to any Federal or State law described in subsection
(b) if a qualified health plan offered under the Consumer Operated and
Oriented Plan program under section 1322, a community health insurance
option under section 1323, or a nationwide qualified health plan under
section 1333(b), is not subject to such law.
(b) Laws Described.--The Federal and State laws described in this
subsection are those Federal and State laws relating to--
(1) guaranteed renewal;
(2) rating;
(3) preexisting conditions;
(4) non-discrimination;
(5) quality improvement and reporting;
(6) fraud and abuse;
(7) solvency and financial requirements;
(8) market conduct;
(9) prompt payment;
(10) appeals and grievances;
(11) privacy and confidentiality;
(12) licensure; and
(13) benefit plan material or information.
PART IV--STATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS
SEC. 1331. <> STATE FLEXIBILITY TO ESTABLISH BASIC
HEALTH PROGRAMS FOR LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR
MEDICAID.
(a) Establishment of Program.--
(1) In general.--The Secretary shall establish a basic
health program meeting the requirements of this section under
which a State may enter into contracts to offer 1 or more
standard health plans providing at least the essential health
benefits described in section 1302(b) to eligible individuals in
lieu of offering such individuals coverage through an Exchange.
(2) Certifications as to benefit coverage and costs.--Such
program shall provide that a State may not establish a basic
health program under this section unless the State establishes
to the satisfaction of the Secretary, and the Secretary
certifies, that--
(A) in the case of an eligible individual enrolled
in a standard health plan offered through the program,
the State provides--
(i) that the amount of the monthly premium an
eligible individual is required to pay for
coverage under the standard health plan for the
individual and the individual's dependents does
not exceed the amount of the monthly premium that
the eligible individual would have been required
to pay (in the rating area in which the individual
resides) if the individual had
[[Page 200]]
enrolled in the applicable second lowest cost
silver plan (as defined in section 36B(b)(3)(B) of
the Internal Revenue Code of 1986) offered to the
individual through an Exchange; and
(ii) that the cost-sharing an eligible
individual is required to pay under the standard
health plan does not exceed--
(I) the cost-sharing required under
a platinum plan in the case of an
eligible individual with household
income not in excess of 150 percent of
the poverty line for the size of the
family involved; and
(II) the cost-sharing required under
a gold plan in the case of an eligible
individual not described in subclause
(I); and
(B) the benefits provided under the standard health
plans offered through the program cover at least the
essential health benefits described in section 1302(b).
For purposes of subparagraph (A)(i), the amount of the monthly
premium an individual is required to pay under either the
standard health plan or the applicable second lowest cost silver
plan shall be determined after reduction for any premium tax
credits and cost-sharing reductions allowable with respect to
either plan.
(b) Standard Health Plan. <> --In this section,
the term ``standard heath plan'' means a health benefits plan that the
State contracts with under this section--
(1) under which the only individuals eligible to enroll are
eligible individuals;
(2) that provides at least the essential health benefits
described in section 1302(b); and
(3) in the case of a plan that provides health insurance
coverage offered by a health insurance issuer, that has a
medical loss ratio of at least 85 percent.
(c) Contracting Process.--
(1) In general.--A State basic health program shall
establish a competitive process for entering into contracts with
standard health plans under subsection (a), including
negotiation of premiums and cost-sharing and negotiation of
benefits in addition to the essential health benefits described
in section 1302(b).
(2) Specific items to be considered.--A State shall, as part
of its competitive process under paragraph (1), include at least
the following:
(A) Innovation.--Negotiation with offerors of a
standard health plan for the inclusion of innovative
features in the plan, including--
(i) care coordination and care management for
enrollees, especially for those with chronic
health conditions;
(ii) incentives for use of preventive
services; and
(iii) the establishment of relationships
between providers and patients that maximize
patient involvement in health care decision-
making, including providing incentives for
appropriate utilization under the plan.
[[Page 201]]
(B) Health and resource differences.--Consideration
of, and the making of suitable allowances for,
differences in health care needs of enrollees and
differences in local availability of, and access to,
health care providers. Nothing in this subparagraph
shall be construed as allowing discrimination on the
basis of pre-existing conditions or other health status-
related factors.
(C) Managed care.--Contracting with managed care
systems, or with systems that offer as many of the
attributes of managed care as are feasible in the local
health care market.
(D) Performance measures.--Establishing specific
performance measures and standards for issuers of
standard health plans that focus on quality of care and
improved health outcomes, requiring such plans to report
to the State with respect to the measures and standards,
and making the performance and quality information
available to enrollees in a useful form.
(3) Enhanced availability.--
(A) Multiple plans.--A State shall, to the maximum
extent feasible, seek to make multiple standard health
plans available to eligible individuals within a State
to ensure individuals have a choice of such plans.
(B) Regional compacts.--A State may negotiate a
regional compact with other States to include coverage
of eligible individuals in all such States in agreements
with issuers of standard health plans.
(4) Coordination with other state programs.--A State shall
seek to coordinate the administration of, and provision of
benefits under, its program under this section with the State
medicaid program under title XIX of the Social Security Act, the
State child health plan under title XXI of such Act, and other
State-administered health programs to maximize the efficiency of
such programs and to improve the continuity of care.
(d) Transfer of Funds to States.--
(1) <> In general.--If the Secretary
determines that a State electing the application of this section
meets the requirements of the program established under
subsection (a), the Secretary shall transfer to the State for
each fiscal year for which 1 or more standard health plans are
operating within the State the amount determined under paragraph
(3).
(2) Use of funds.--A State shall establish a trust for the
deposit of the amounts received under paragraph (1) and amounts
in the trust fund shall only be used to reduce the premiums and
cost-sharing of, or to provide additional benefits for, eligible
individuals enrolled in standard health plans within the State.
Amounts in the trust fund, and expenditures of such amounts,
shall not be included in determining the amount of any non-
Federal funds for purposes of meeting any matching or
expenditure requirement of any federally-funded program.
(3) Amount of payment.--
(A) Secretarial determination.--
(i) In general.--The amount determined under
this paragraph for any fiscal year is the amount
the Secretary determines is equal to 85 percent of
the premium tax credits under section 36B of the
Internal
[[Page 202]]
Revenue Code of 1986, and the cost-sharing
reductions under section 1402, that would have
been provided for the fiscal year to eligible
individuals enrolled in standard health plans in
the State if such eligible individuals were
allowed to enroll in qualified health plans
through an Exchange established under this
subtitle.
(ii) Specific requirements.--The Secretary
shall make the determination under clause (i) on a
per enrollee basis and shall take into account all
relevant factors necessary to determine the value
of the premium tax credits and cost-sharing
reductions that would have been provided to
eligible individuals described in clause (i),
including the age and income of the enrollee,
whether the enrollment is for self-only or family
coverage, geographic differences in average
spending for health care across rating areas, the
health status of the enrollee for purposes of
determining risk adjustment payments and
reinsurance payments that would have been made if
the enrollee had enrolled in a qualified health
plan through an Exchange, and whether any
reconciliation of the credit or cost-sharing
reductions would have occurred if the enrollee had
been so enrolled. This determination shall take
into consideration the experience of other States
with respect to participation in an Exchange and
such credits and reductions provided to residents
of the other States, with a special focus on
enrollees with income below 200 percent of
poverty.
(iii) Certification.--The Chief Actuary of the
Centers for Medicare & Medicaid Services, in
consultation with the Office of Tax Analysis of
the Department of the Treasury, shall certify
whether the methodology used to make
determinations under this subparagraph, and such
determinations, meet the requirements of clause
(ii). Such certifications shall be based on
sufficient data from the State and from comparable
States about their experience with programs
created by this Act.
(B) Corrections.--The Secretary shall adjust the
payment for any fiscal year to reflect any error in the
determinations under subparagraph (A) for any preceding
fiscal year.
(4) Application of special rules.--The provisions of section
1303 shall apply to a State basic health program, and to
standard health plans offered through such program, in the same
manner as such rules apply to qualified health plans.
(e) Eligible Individual.--
(1) <> In general.--In this section, the
term ``eligible individual'' means, with respect to any State,
an individual--
(A) who a resident of the State who is not eligible
to enroll in the State's medicaid program under title
XIX of the Social Security Act for benefits that at a
minimum consist of the essential health benefits
described in section 1302(b);
[[Page 203]]
(B) whose household income exceeds 133 percent but
does not exceed 200 percent of the poverty line for the
size of the family involved;
(C) who is not eligible for minimum essential
coverage (as defined in section 5000A(f) of the Internal
Revenue Code of 1986) or is eligible for an employer-
sponsored plan that is not affordable coverage (as
determined under section 5000A(e)(2) of such Code); and
(D) who has not attained age 65 as of the beginning
of the plan year.
Such term shall not include any individual who is not a
qualified individual under section 1312 who is eligible to be
covered by a qualified health plan offered through an Exchange.
(2) Eligible individuals may not use exchange.--An eligible
individual shall not be treated as a qualified individual under
section 1312 eligible for enrollment in a qualified health plan
offered through an Exchange established under section 1311.
(f) Secretarial Oversight <> .--The Secretary shall
each year conduct a review of each State program to ensure compliance
with the requirements of this section, including ensuring that the State
program meets--
(1) eligibility verification requirements for participation
in the program;
(2) the requirements for use of Federal funds received by
the program; and
(3) the quality and performance standards under this
section.
(g) Standard Health Plan Offerors.--A State may provide that persons
eligible to offer standard health plans under a basic health program
established under this section may include a licensed health maintenance
organization, a licensed health insurance insurer, or a network of
health care providers established to offer services under the program.
(h) Definitions.--Any term used in this section which is also used
in section 36B of the Internal Revenue Code of 1986 shall have the
meaning given such term by such section.
SEC. 1332. <> WAIVER FOR STATE INNOVATION.
(a) Application.--
(1) <> In general.--A State may
apply to the Secretary for the waiver of all or any requirements
described in paragraph (2) with respect to health insurance
coverage within that State for plan years beginning on or after
January 1, 2017. Such application shall--
(A) be filed at such time and in such manner as the
Secretary may require;
(B) contain such information as the Secretary may
require, including--
(i) a comprehensive description of the State
legislation and program to implement a plan
meeting the requirements for a waiver under this
section; and
(ii) a 10-year budget plan for such plan that
is budget neutral for the Federal Government; and
(C) provide an assurance that the State has enacted
the law described in subsection (b)(2).
[[Page 204]]
(2) Requirements.-- <> The
requirements described in this paragraph with respect to health
insurance coverage within the State for plan years beginning on
or after January 1, 2014, are as follows:
(A) Part I of subtitle D.
(B) Part II of subtitle D.
(C) Section 1402.
(D) Sections 36B, 4980H, and 5000A of the Internal
Revenue Code of 1986.
(3) Pass through of funding.--With respect to a State waiver
under paragraph (1), under which, due to the structure of the
State plan, individuals and small employers in the State would
not qualify for the premium tax credits, cost-sharing
reductions, or small business credits under sections 36B of the
Internal Revenue Code of 1986 or under part I of subtitle E for
which they would otherwise be eligible, the Secretary shall
provide for an alternative means by which the aggregate amount
of such credits or reductions that would have been paid on
behalf of participants in the Exchanges established under this
title had the State not received such waiver, shall be paid to
the State for purposes of implementing the State plan under the
waiver. Such amount shall be determined annually by the
Secretary, taking into consideration the experience of other
States with respect to participation in an Exchange and credits
and reductions provided under such provisions to residents of
the other States.
(4) Waiver consideration and transparency.--
(A) In general.--An application for a waiver under
this section shall be considered by the Secretary in
accordance with the regulations described in
subparagraph (B).
(B) Regulations <> .--Not later
than 180 days after the date of enactment of this Act,
the Secretary shall promulgate regulations relating to
waivers under this section that provide--
(i) a process for public notice and comment at
the State level, including public hearings,
sufficient to ensure a meaningful level of public
input;
(ii) a process for the submission of an
application that ensures the disclosure of--
(I) the provisions of law that the
State involved seeks to waive; and
(II) the specific plans of the State
to ensure that the waiver will be in
compliance with subsection (b);
(iii) a process for providing public notice
and comment after the application is received by
the Secretary, that is sufficient to ensure a
meaningful level of public input and that does not
impose requirements that are in addition to, or
duplicative of, requirements imposed under the
Administrative Procedures Act, or requirements
that are unreasonable or unnecessarily burdensome
with respect to State compliance;
(iv) a process for the submission to the
Secretary of periodic reports by the State
concerning the implementation of the program under
the waiver; and
(v) a process for the periodic evaluation by
the Secretary of the program under the waiver.
[[Page 205]]
(C) Report.--The Secretary shall annually report to
Congress concerning actions taken by the Secretary with
respect to applications for waivers under this section.
(5) Coordinated waiver process.--The Secretary shall develop
a process for coordinating and consolidating the State waiver
processes applicable under the provisions of this section, and
the existing waiver processes applicable under titles XVIII,
XIX, and XXI of the Social Security Act, and any other Federal
law relating to the provision of health care items or services.
Such process shall permit a State to submit a single application
for a waiver under any or all of such provisions.
(6) Definition.--In this section, the term ``Secretary''
means--
(A) the Secretary of Health and Human Services with
respect to waivers relating to the provisions described
in subparagraph (A) through (C) of paragraph (2); and
(B) the Secretary of the Treasury with respect to
waivers relating to the provisions described in
paragraph (2)(D).
(b) Granting of Waivers.--
(1) In general.--The Secretary may grant a request for a
waiver under subsection (a)(1) only if the Secretary determines
that the State plan--
(A) will provide coverage that is at least as
comprehensive as the coverage defined in section 1302(b)
and offered through Exchanges established under this
title as certified by Office of the Actuary of the
Centers for Medicare & Medicaid Services based on
sufficient data from the State and from comparable
States about their experience with programs created by
this Act and the provisions of this Act that would be
waived;
(B) will provide coverage and cost sharing
protections against excessive out-of-pocket spending
that are at least as affordable as the provisions of
this title would provide;
(C) will provide coverage to at least a comparable
number of its residents as the provisions of this title
would provide; and
(D) will not increase the Federal deficit.
(2) Requirement to enact a law.--
(A) In general.--A law described in this paragraph
is a State law that provides for State actions under a
waiver under this section, including the implementation
of the State plan under subsection (a)(1)(B).
(B) Termination of opt out.--A State may repeal a
law described in subparagraph (A) and terminate the
authority provided under the waiver with respect to the
State.
(c) Scope of Waiver.--
(1) <> In general.--The Secretary
shall determine the scope of a waiver of a requirement described
in subsection (a)(2) granted to a State under subsection (a)(1).
(2) Limitation.--The Secretary may not waive under this
section any Federal law or requirement that is not within the
authority of the Secretary.
(d) Determinations by Secretary.--
(1) Time for determination.-- <> The
Secretary shall make a determination under subsection (a)(1) not
later than 180
[[Page 206]]
days after the receipt of an application from a State under such
subsection.
(2) Effect of determination.-- <>
(A) Granting of waivers.--If the Secretary
determines to grant a waiver under subsection (a)(1),
the Secretary shall notify the State involved of such
determination and the terms and effectiveness of such
waiver.
(B) Denial of waiver.--If the Secretary determines a
waiver should not be granted under subsection (a)(1),
the Secretary shall notify the State involved, and the
appropriate committees of Congress of such determination
and the reasons therefore.
(e) <> Term of Waiver.--No waiver
under this section may extend over a period of longer than 5 years
unless the State requests continuation of such waiver, and such request
shall be deemed granted unless the Secretary, within 90 days after the
date of its submission to the Secretary, either denies such request in
writing or informs the State in writing with respect to any additional
information which is needed in order to make a final determination with
respect to the request.
SEC. 1333. <> PROVISIONS RELATING TO OFFERING OF
PLANS IN MORE THAN ONE STATE.
(a) Health Care Choice Compacts.--
(1) In general.-- <> Not later
than July 1, 2013, the Secretary shall, in consultation with the
National Association of Insurance Commissioners, issue
regulations for the creation of health care choice compacts
under which 2 or more States may enter into an agreement under
which--
(A) 1 or more qualified health plans could be
offered in the individual markets in all such States
but, except as provided in subparagraph (B), only be
subject to the laws and regulations of the State in
which the plan was written or issued;
(B) the issuer of any qualified health plan to which
the compact applies--
(i) would continue to be subject to market
conduct, unfair trade practices, network adequacy,
and consumer protection standards (including
standards relating to rating), including
addressing disputes as to the performance of the
contract, of the State in which the purchaser
resides;
(ii) would be required to be licensed in each
State in which it offers the plan under the
compact or to submit to the jurisdiction of each
such State with regard to the standards described
in clause (i) (including allowing access to
records as if the insurer were licensed in the
State); and
(iii) <> must clearly
notify consumers that the policy may not be
subject to all the laws and regulations of the
State in which the purchaser resides.
(2) State authority.--A State may not enter into an
agreement under this subsection unless the State enacts a law
after the date of the enactment of this title that specifically
authorizes the State to enter into such agreements.
(3) Approval of compacts.--The Secretary may approve
interstate health care choice compacts under paragraph (1)
[[Page 207]]
only if the Secretary determines that such health care choice
compact--
(A) will provide coverage that is at least as
comprehensive as the coverage defined in section 1302(b)
and offered through Exchanges established under this
title;
(B) will provide coverage and cost sharing
protections against excessive out-of-pocket spending
that are at least as affordable as the provisions of
this title would provide;
(C) will provide coverage to at least a comparable
number of its residents as the provisions of this title
would provide;
(D) will not increase the Federal deficit; and
(E) will not weaken enforcement of laws and
regulations described in paragraph (1)(B)(i) in any
State that is included in such compact.
(4) Effective date.--A health care choice compact described
in paragraph (1) shall not take effect before January 1, 2016.
(b) Authority for Nationwide Plans.--
(1) In general.--Except as provided in paragraph (2), if an
issuer (including a group of health insurance issuers affiliated
either by common ownership and control or by the common use of a
nationally licensed service mark) of a qualified health plan in
the individual or small group market meets the requirements of
this subsection (in this subsection a ``nationwide qualified
health plan'')--
(A) the issuer of the plan may offer the nationwide
qualified health plan in the individual or small group
market in more than 1 State; and
(B) <> with respect to State
laws mandating benefit coverage by a health plan, only
the State laws of the State in which such plan is
written or issued shall apply to the nationwide
qualified health plan.
(2) State opt-out.--A State may, by specific reference in a
law enacted after the date of enactment of this title, provide
that this subsection shall not apply to that State. Such opt-out
shall be effective until such time as the State by law revokes
it.
(3) Plan requirements.--An issuer meets the requirements of
this subsection with respect to a nationwide qualified health
plan if, in the determination of the Secretary--
(A) the plan offers a benefits package that is
uniform in each State in which the plan is offered and
meets the requirements set forth in paragraphs (4)
through (6);
(B) the issuer is licensed in each State in which it
offers the plan and is subject to all requirements of
State law not inconsistent with this section, including
but not limited to, the standards and requirements that
a State imposes that do not prevent the application of a
requirement of part A of title XXVII of the Public
Health Service Act or a requirement of this title;
(C) the issuer meets all requirements of this title
with respect to a qualified health plan, including the
requirement to offer the silver and gold levels of the
plan in each Exchange in the State for the market in
which the plan is offered;
[[Page 208]]
(D) the issuer determines the premiums for the plan
in any State on the basis of the rating rules in effect
in that State for the rating areas in which it is
offered;
(E) the issuer offers the nationwide qualified
health plan in at least 60 percent of the participating
States in the first year in which the plan is offered,
65 percent of such States in the second year, 70 percent
of such States in the third year, 75 percent of such
States in the fourth year, and 80 percent of such States
in the fifth and subsequent years;
(F) the issuer shall offer the plan in participating
States across the country, in all geographic regions,
and in all States that have adopted adjusted community
rating before the date of enactment of this Act; and
(G) the issuer clearly notifies consumers that the
policy may not contain some benefits otherwise mandated
for plans in the State in which the purchaser resides
and provides a detailed statement of the benefits
offered and the benefit differences in that State, in
accordance with rules promulgated by the Secretary.
(4) <> Form review for nationwide plans.--
Notwithstanding any contrary provision of State law, at least 3
months before any nationwide qualified health plan is offered,
the issuer shall file all nationwide qualified health plan forms
with the regulator in each participating State in which the plan
will be offered. An issuer may appeal the disapproval of a
nationwide qualified health plan form to the Secretary.
(5) Applicable rules.--The Secretary shall, in consultation
with the National Association of Insurance Commissioners, issue
rules for the offering of nationwide qualified health plans
under this subsection. Nationwide qualified health plans may be
offered only after such rules have taken effect.
(6) Coverage.--The Secretary shall provide that the health
benefits coverage provided to an individual through a nationwide
qualified health plan under this subsection shall include at
least the essential benefits package described in section 1302.
(7) State law mandating benefit coverage by a health
benefits plan.--For the purposes of this subsection, a State law
mandating benefit coverage by a health plan is a law that
mandates health insurance coverage or the offer of health
insurance coverage for specific health services or specific
diseases. A law that mandates health insurance coverage or
reimbursement for services provided by certain classes of
providers of health care services, or a law that mandates that
certain classes of individuals must be covered as a group or as
dependents, is not a State law mandating benefit coverage by a
health benefits plan.
PART V--REINSURANCE AND RISK ADJUSTMENT
SEC. 1341. <> TRANSITIONAL REINSURANCE PROGRAM FOR
INDIVIDUAL AND SMALL GROUP MARKETS IN EACH STATE.
(a) In General <> .--Each State shall, not later
than January 1, 2014--
[[Page 209]]
(1) include in the Federal standards or State law or
regulation the State adopts and has in effect under section
1321(b) the provisions described in subsection (b); and
(2) <> establish (or enter into a contract
with) 1 or more applicable reinsurance entities to carry out the
reinsurance program under this section.
(b) Model Regulation.--
(1) In general.--In establishing the Federal standards under
section 1321(a), the Secretary, in consultation with the
National Association of Insurance Commissioners (the ``NAIC''),
shall include provisions that enable States to establish and
maintain a program under which--
(A) <> health
insurance issuers, and third party administrators on
behalf of group health plans, are required to make
payments to an applicable reinsurance entity for any
plan year beginning in the 3-year period beginning
January 1, 2014 (as specified in paragraph (3); and
(B) the applicable reinsurance entity collects
payments under subparagraph (A) and uses amounts so
collected to make reinsurance payments to health
insurance issuers described in subparagraph (A) that
cover high risk individuals in the individual market
(excluding grandfathered health plans) for any plan year
beginning in such 3-year period.
(2) High-risk individual; payment amounts.--The Secretary
shall include the following in the provisions under paragraph
(1):
(A) Determination of high-risk individuals.--The
method by which individuals will be identified as high
risk individuals for purposes of the reinsurance program
established under this section. Such method shall
provide for identification of individuals as high-risk
individuals on the basis of--
(i) a list of at least 50 but not more than
100 medical conditions that are identified as
high-risk conditions and that may be based on the
identification of diagnostic and procedure codes
that are indicative of individuals with pre-
existing, high-risk conditions; or
(ii) any other comparable objective method of
identification recommended by the American Academy
of Actuaries.
(B) Payment amount.--The formula for determining the
amount of payments that will be paid to health insurance
issuers described in paragraph (1)(A) that insure high-
risk individuals. Such formula shall provide for the
equitable allocation of available funds through
reconciliation and may be designed--
(i) to provide a schedule of payments that
specifies the amount that will be paid for each of
the conditions identified under subparagraph (A);
or
(ii) to use any other comparable method for
determining payment amounts that is recommended by
the American Academy of Actuaries and that
encourages the use of care coordination and care
management programs for high risk conditions.
(3) Determination of required contributions.--
[[Page 210]]
(A) In general <> .--The Secretary shall include in the
provisions under paragraph (1) the method for
determining the amount each health insurance issuer and
group health plan described in paragraph (1)(A)
contributing to the reinsurance program under this
section is required to contribute under such paragraph
for each plan year beginning in the 36-month period
beginning January 1, 2014. The contribution amount for
any plan year may be based on the percentage of revenue
of each issuer and the total costs of providing benefits
to enrollees in self-insured plans or on a specified
amount per enrollee and may be required to be paid in
advance or periodically throughout the plan year.
(B) Specific requirements.--The method under this
paragraph shall be designed so that--
(i) the contribution amount for each issuer
proportionally reflects each issuer's fully
insured commercial book of business for all major
medical products and the total value of all fees
charged by the issuer and the costs of coverage
administered by the issuer as a third party
administrator;
(ii) the contribution amount can include an
additional amount to fund the administrative
expenses of the applicable reinsurance entity;
(iii) the aggregate contribution amounts for
all States shall, based on the best estimates of
the NAIC and without regard to amounts described
in clause (ii), equal $10,000,000,000 for plan
years beginning in 2014, $6,000,000,000 for plan
years beginning 2015, and $4,000,000,000 for plan
years beginning in 2016; and
(iv) in addition to the aggregate contribution
amounts under clause (iii), each issuer's
contribution amount for any calendar year under
clause (iii) reflects its proportionate share of
an additional $2,000,000,000 for 2014, an
additional $2,000,000,000 for 2015, and an
additional $1,000,000,000 for 2016.
Nothing in this subparagraph shall be construed to
preclude a State from collecting additional amounts from
issuers on a voluntary basis.
(4) Expenditure of funds.--The provisions under paragraph
(1) shall provide that--
(A) the contribution amounts collected for any
calendar year may be allocated and used in any of the
three calendar years for which amounts are collected
based on the reinsurance needs of a particular period or
to reflect experience in a prior period; and
(B) <> amounts
remaining unexpended as of December, 2016, may be used
to make payments under any reinsurance program of a
State in the individual market in effect in the 2-year
period beginning on January 1, 2017.
Notwithstanding the preceding sentence, any contribution amounts
described in paragraph (3)(B)(iv) shall be deposited into the
general fund of the Treasury of the United States and may not be
used for the program established under this section.
[[Page 211]]
(c) Applicable Reinsurance Entity.--For purposes of this section--
(1) In general.-- <> The term
``applicable reinsurance entity'' means a not-for-profit
organization--
(A) the purpose of which is to help stabilize
premiums for coverage in the individual and small group
markets in a State during the first 3 years of operation
of an Exchange for such markets within the State when
the risk of adverse selection related to new rating
rules and market changes is greatest; and
(B) the duties of which shall be to carry out the
reinsurance program under this section by coordinating
the funding and operation of the risk-spreading
mechanisms designed to implement the reinsurance
program.
(2) State discretion.--A State may have more than 1
applicable reinsurance entity to carry out the reinsurance
program under this section within the State and 2 or more States
may enter into agreements to provide for an applicable
reinsurance entity to carry out such program in all such States.
(3) Entities are tax-exempt.--An applicable reinsurance
entity established under this section shall be exempt from
taxation under chapter 1 of the Internal Revenue Code of 1986.
The preceding sentence shall not apply to the tax imposed by
section 511 such Code (relating to tax on unrelated business
taxable income of an exempt organization).
(d) Coordination With State High-risk Pools.--The State shall
eliminate or modify any State high-risk pool to the extent necessary to
carry out the reinsurance program established under this section. The
State may coordinate the State high-risk pool with such program to the
extent not inconsistent with the provisions of this section.
SEC. 1342. <> ESTABLISHMENT OF RISK CORRIDORS FOR
PLANS IN INDIVIDUAL AND SMALL GROUP MARKETS.
(a) In General.--The Secretary shall establish and administer a
program of risk corridors for calendar years 2014, 2015, and 2016 under
which a qualified health plan offered in the individual or small group
market shall participate in a payment adjustment system based on the
ratio of the allowable costs of the plan to the plan's aggregate
premiums. Such program shall be based on the program for regional
participating provider organizations under part D of title XVIII of the
Social Security Act.
(b) Payment Methodology.--
(1) Payments out.--The Secretary shall provide under the
program established under subsection (a) that if--
(A) a participating plan's allowable costs for any
plan year are more than 103 percent but not more than
108 percent of the target amount, the Secretary shall
pay to the plan an amount equal to 50 percent of the
target amount in excess of 103 percent of the target
amount; and
(B) a participating plan's allowable costs for any
plan year are more than 108 percent of the target
amount, the Secretary shall pay to the plan an amount
equal to the sum of 2.5 percent of the target amount
plus 80 percent of allowable costs in excess of 108
percent of the target amount.
[[Page 212]]
(2) Payments in.--The Secretary shall provide under the
program established under subsection (a) that if--
(A) a participating plan's allowable costs for any
plan year are less than 97 percent but not less than 92
percent of the target amount, the plan shall pay to the
Secretary an amount equal to 50 percent of the excess of
97 percent of the target amount over the allowable
costs; and
(B) a participating plan's allowable costs for any
plan year are less than 92 percent of the target amount,
the plan shall pay to the Secretary an amount equal to
the sum of 2.5 percent of the target amount plus 80
percent of the excess of 92 percent of the target amount
over the allowable costs.
(c) Definitions.--In this section:
(1) Allowable costs.--
(A) In general.--The amount of allowable costs of a
plan for any year is an amount equal to the total costs
(other than administrative costs) of the plan in
providing benefits covered by the plan.
(B) Reduction for risk adjustment and reinsurance
payments.--Allowable costs shall reduced by any risk
adjustment and reinsurance payments received under
section 1341 and 1343.
(2) Target amount.--The target amount of a plan for any year
is an amount equal to the total premiums (including any premium
subsidies under any governmental program), reduced by the
administrative costs of the plan.
SEC. 1343. <> RISK ADJUSTMENT.
(a) In General.--
(1) Low actuarial risk plans.--Using the criteria and
methods developed under subsection (b), each State shall assess
a charge on health plans and health insurance issuers (with
respect to health insurance coverage) described in subsection
(c) if the actuarial risk of the enrollees of such plans or
coverage for a year is less than the average actuarial risk of
all enrollees in all plans or coverage in such State for such
year that are not self-insured group health plans (which are
subject to the provisions of the Employee Retirement Income
Security Act of 1974).
(2) High actuarial risk plans.--Using the criteria and
methods developed under subsection (b), each State shall provide
a payment to health plans and health insurance issuers (with
respect to health insurance coverage) described in subsection
(c) if the actuarial risk of the enrollees of such plans or
coverage for a year is greater than the average actuarial risk
of all enrollees in all plans and coverage in such State for
such year that are not self-insured group health plans (which
are subject to the provisions of the Employee Retirement Income
Security Act of 1974).
(b) Criteria and Methods.--The Secretary, in consultation with
States, shall establish criteria and methods to be used in carrying out
the risk adjustment activities under this section. The Secretary may
utilize criteria and methods similar to the criteria and methods
utilized under part C or D of title XVIII of the Social Security Act.
Such criteria and methods shall be included
[[Page 213]]
in the standards and requirements the Secretary prescribes under section
1321.
(c) Scope.--A health plan or a health insurance issuer is described
in this subsection if such health plan or health insurance issuer
provides coverage in the individual or small group market within the
State. This subsection shall not apply to a grandfathered health plan or
the issuer of a grandfathered health plan with respect to that plan.
Subtitle E--Affordable Coverage Choices for All Americans
PART I--PREMIUM TAX CREDITS AND COST-SHARING REDUCTIONS
Subpart A--Premium Tax Credits and Cost-sharing Reductions
SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSISTANCE FOR
COVERAGE UNDER A QUALIFIED HEALTH PLAN.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits) is
amended by inserting after section 36A the following new section:
``SEC. 36B. <> REFUNDABLE CREDIT FOR COVERAGE UNDER A
QUALIFIED HEALTH PLAN.
``(a) In General.--In the case of an applicable taxpayer, there
shall be allowed as a credit against the tax imposed by this subtitle
for any taxable year an amount equal to the premium assistance credit
amount of the taxpayer for the taxable year.
``(b) Premium Assistance Credit Amount.--For purposes of this
section--
``(1) In general.-- <> The term `premium
assistance credit amount' means, with respect to any taxable
year, the sum of the premium assistance amounts determined under
paragraph (2) with respect to all coverage months of the
taxpayer occurring during the taxable year.
``(2) Premium assistance amount.--The premium assistance
amount determined under this subsection with respect to any
coverage month is the amount equal to the lesser of--
``(A) the monthly premiums for such month for 1 or
more qualified health plans offered in the individual
market within a State which cover the taxpayer, the
taxpayer's spouse, or any dependent (as defined in
section 152) of the taxpayer and which were enrolled in
through an Exchange established by the State under 1311
of the Patient Protection and Affordable Care Act, or
``(B) the excess (if any) of--
``(i) the adjusted monthly premium for such
month for the applicable second lowest cost silver
plan with respect to the taxpayer, over
[[Page 214]]
``(ii) an amount equal to 1/12 of the product
of the applicable percentage and the taxpayer's
household income for the taxable year.
``(3) Other terms and rules relating to premium assistance
amounts.--For purposes of paragraph (2)--
``(A) Applicable percentage.--
``(i) In general.--Except as provided in
clause (ii), the applicable percentage with
respect to any taxpayer for any taxable year is
equal to 2.8 percent, increased by the number of
percentage points (not greater than 7) which bears
the same ratio to 7 percentage points as--
``(I) the taxpayer's household
income for the taxable year in excess of
100 percent of the poverty line for a
family of the size involved, bears to
``(II) an amount equal to 200
percent of the poverty line for a family
of the size involved.
``(ii) Special rule for taxpayers under 133
percent of poverty line.--If a taxpayer's
household income for the taxable year is in excess
of 100 percent, but not more than 133 percent, of
the poverty line for a family of the size
involved, the taxpayer's applicable percentage
shall be 2 percent.
``(iii) Indexing.--In the case of taxable
years beginning in any calendar year after 2014,
the Secretary shall adjust the initial and final
applicable percentages under clause (i), and the 2
percent under clause (ii), for the calendar year
to reflect the excess of the rate of premium
growth between the preceding calendar year and
2013 over the rate of income growth for such
period.
``(B) Applicable second lowest cost silver plan.--
The applicable second lowest cost silver plan with
respect to any applicable taxpayer is the second lowest
cost silver plan of the individual market in the rating
area in which the taxpayer resides which--
``(i) is offered through the same Exchange
through which the qualified health plans taken
into account under paragraph (2)(A) were offered,
and
``(ii) provides--
``(I) self-only coverage in the case
of an applicable taxpayer--
``(aa) whose tax for the
taxable year is determined under
section 1(c) (relating to
unmarried individuals other than
surviving spouses and heads of
households) and who is not
allowed a deduction under
section 151 for the taxable year
with respect to a dependent, or
``(bb) who is not described
in item (aa) but who purchases
only self-only coverage, and
``(II) family coverage in the case
of any other applicable taxpayer.
If a taxpayer files a joint return and no credit is
allowed under this section with respect to 1 of the
spouses by reason of subsection (e), the taxpayer shall
be treated as described in clause (ii)(I) unless a
deduction is allowed
[[Page 215]]
under section 151 for the taxable year with respect to a
dependent other than either spouse and subsection (e)
does not apply to the dependent.
``(C) Adjusted monthly premium.--The adjusted
monthly premium for an applicable second lowest cost
silver plan is the monthly premium which would have been
charged (for the rating area with respect to which the
premiums under paragraph (2)(A) were determined) for the
plan if each individual covered under a qualified health
plan taken into account under paragraph (2)(A) were
covered by such silver plan and the premium was adjusted
only for the age of each such individual in the manner
allowed under section 2701 of the Public Health Service
Act. In the case of a State participating in the
wellness discount demonstration project under section
2705(d) of the Public Health Service Act, the adjusted
monthly premium shall be determined without regard to
any premium discount or rebate under such project.
``(D) Additional benefits.--If--
``(i) a qualified health plan under section
1302(b)(5) of the Patient Protection and
Affordable Care Act offers benefits in addition to
the essential health benefits required to be
provided by the plan, or
``(ii) a State requires a qualified health
plan under section 1311(d)(3)(B) of such Act to
cover benefits in addition to the essential health
benefits required to be provided by the plan,
the portion of the premium for the plan properly
allocable (under rules prescribed by the Secretary of
Health and Human Services) to such additional benefits
shall not be taken into account in determining either
the monthly premium or the adjusted monthly premium
under paragraph (2).
``(E) Special rule for pediatric dental coverage.--
For purposes of determining the amount of any monthly
premium, if an individual enrolls in both a qualified
health plan and a plan described in section
1311(d)(2)(B)(ii)(I) of the Patient Protection and
Affordable Care Act for any plan year, the portion of
the premium for the plan described in such section that
(under regulations prescribed by the Secretary) is
properly allocable to pediatric dental benefits which
are included in the essential health benefits required
to be provided by a qualified health plan under section
1302(b)(1)(J) of such Act shall be treated as a premium
payable for a qualified health plan.
``(c) Definition and Rules Relating to Applicable Taxpayers,
Coverage Months, and Qualified Health Plan.--For purposes of this
section--
``(1) Applicable taxpayer.--
``(A) In general.--The term `applicable taxpayer'
means, with respect to any taxable year, a taxpayer
whose household income for the taxable year exceeds 100
percent but does not exceed 400 percent of an amount
equal to the poverty line for a family of the size
involved.
``(B) Special rule for certain individuals lawfully
present in the united states.--If--
[[Page 216]]
``(i) a taxpayer has a household income which
is not greater than 100 percent of an amount equal
to the poverty line for a family of the size
involved, and
``(ii) the taxpayer is an alien lawfully
present in the United States, but is not eligible
for the medicaid program under title XIX of the
Social Security Act by reason of such alien
status,
the taxpayer shall, for purposes of the credit under
this section, be treated as an applicable taxpayer with
a household income which is equal to 100 percent of the
poverty line for a family of the size involved.
``(C) Married couples must file joint return.--If
the taxpayer is married (within the meaning of section
7703) at the close of the taxable year, the taxpayer
shall be treated as an applicable taxpayer only if the
taxpayer and the taxpayer's spouse file a joint return
for the taxable year.
``(D) Denial of credit to dependents.--No credit
shall be allowed under this section to any individual
with respect to whom a deduction under section 151 is
allowable to another taxpayer for a taxable year
beginning in the calendar year in which such
individual's taxable year begins.
``(2) Coverage month.--For purposes of this subsection--
``(A) In general.--The term `coverage month' means,
with respect to an applicable taxpayer, any month if--
``(i) as of the first day of such month the
taxpayer, the taxpayer's spouse, or any dependent
of the taxpayer is covered by a qualified health
plan described in subsection (b)(2)(A) that was
enrolled in through an Exchange established by the
State under section 1311 of the Patient Protection
and Affordable Care Act, and
``(ii) the premium for coverage under such
plan for such month is paid by the taxpayer (or
through advance payment of the credit under
subsection (a) under section 1412 of the Patient
Protection and Affordable Care Act).
``(B) Exception for minimum essential coverage.--
``(i) In general.--The term `coverage month'
shall not include any month with respect to an
individual if for such month the individual is
eligible for minimum essential coverage other than
eligibility for coverage described in section
5000A(f)(1)(C) (relating to coverage in the
individual market).
``(ii) Minimum essential coverage.--The term
`minimum essential coverage' has the meaning given
such term by section 5000A(f).
``(C) Special rule for employer-sponsored minimum
essential coverage.--For purposes of subparagraph (B)--
``(i) Coverage must be affordable.--Except as
provided in clause (iii), an employee shall not be
treated as eligible for minimum essential coverage
if such coverage--
``(I) consists of an eligible
employer-sponsored plan (as defined in
section 5000A(f)(2)), and
``(II) the employee's required
contribution (within the meaning of
section 5000A(e)(1)(B)) with
[[Page 217]]
respect to the plan exceeds 9.8 percent
of the applicable taxpayer's household
income.
<> This clause shall also
apply to an individual who is eligible to enroll
in the plan by reason of a relationship the
individual bears to the employee.
``(ii) Coverage must provide minimum value.--
Except as provided in clause (iii), an employee
shall not be treated as eligible for minimum
essential coverage if such coverage consists of an
eligible employer-sponsored plan (as defined in
section 5000A(f)(2)) and the plan's share of the
total allowed costs of benefits provided under the
plan is less than 60 percent of such costs.
``(iii) Employee or family must not be covered
under employer plan.--Clauses (i) and (ii) shall
not apply if the employee (or any individual
described in the last sentence of clause (i)) is
covered under the eligible employer-sponsored plan
or the grandfathered health plan.
``(iv) Indexing.--In the case of plan years
beginning in any calendar year after 2014, the
Secretary shall adjust the 9.8 percent under
clause (i)(II) in the same manner as the
percentages are adjusted under subsection
(b)(3)(A)(ii).
``(3) Definitions and other rules.--
``(A) Qualified health plan.--The term `qualified
health plan' has the meaning given such term by section
1301(a) of the Patient Protection and Affordable Care
Act, except that such term shall not include a qualified
health plan which is a catastrophic plan described in
section 1302(e) of such Act.
``(B) Grandfathered health plan.--The term
`grandfathered health plan' has the meaning given such
term by section 1251 of the Patient Protection and
Affordable Care Act.
``(d) Terms Relating to Income and Families.--For purposes of this
section--
``(1) Family size.--The family size involved with respect to
any taxpayer shall be equal to the number of individuals for
whom the taxpayer is allowed a deduction under section 151
(relating to allowance of deduction for personal exemptions) for
the taxable year.
``(2) Household income.--
``(A) Household income.--The term `household income'
means, with respect to any taxpayer, an amount equal to
the sum of--
``(i) the modified gross income of the
taxpayer, plus
``(ii) the aggregate modified gross incomes of
all other individuals who--
``(I) were taken into account in
determining the taxpayer's family size
under paragraph (1), and
``(II) were required to file a
return of tax imposed by section 1 for
the taxable year.
``(B) Modified gross income.--The term `modified
gross income' means gross income--
[[Page 218]]
``(i) decreased by the amount of any deduction
allowable under paragraph (1), (3), (4), or (10)
of section 62(a),
``(ii) increased by the amount of interest
received or accrued during the taxable year which
is exempt from tax imposed by this chapter, and
``(iii) determined without regard to sections
911, 931, and 933.
``(3) Poverty line.--
``(A) In general.--The term `poverty line' has the
meaning given that term in section 2110(c)(5) of the
Social Security Act (42 U.S.C. 1397jj(c)(5)).
``(B) Poverty line used.--In the case of any
qualified health plan offered through an Exchange for
coverage during a taxable year beginning in a calendar
year, the poverty line used shall be the most recently
published poverty line as of the 1st day of the regular
enrollment period for coverage during such calendar
year.
``(e) Rules for Individuals Not Lawfully Present.--
``(1) In general.--If 1 or more individuals for whom a
taxpayer is allowed a deduction under section 151 (relating to
allowance of deduction for personal exemptions) for the taxable
year (including the taxpayer or his spouse) are individuals who
are not lawfully present--
``(A) the aggregate amount of premiums otherwise
taken into account under clauses (i) and (ii) of
subsection (b)(2)(A) shall be reduced by the portion (if
any) of such premiums which is attributable to such
individuals, and
``(B) for purposes of applying this section, the
determination as to what percentage a taxpayer's
household income bears to the poverty level for a family
of the size involved shall be made under one of the
following methods:
``(i) A method under which--
``(I) the taxpayer's family size is
determined by not taking such
individuals into account, and
``(II) the taxpayer's household
income is equal to the product of the
taxpayer's household income (determined
without regard to this subsection) and a
fraction--
``(aa) the numerator of
which is the poverty line for
the taxpayer's family size
determined after application of
subclause (I), and
``(bb) the denominator of
which is the poverty line for
the taxpayer's family size
determined without regard to
subclause (I).
``(ii) A comparable method reaching the same
result as the method under clause (i).
``(2) Lawfully present.--For purposes of this section, an
individual shall be treated as lawfully present only if the
individual is, and is reasonably expected to be for the entire
period of enrollment for which the credit under this section is
being claimed, a citizen or national of the United States or an
alien lawfully present in the United States.
``(3) Secretarial authority.-- <> The
Secretary of Health and Human Services, in consultation with the
Secretary, shall prescribe rules setting forth the methods by
which calculations of family size and household income are made
for purposes
[[Page 219]]
of this subsection. Such rules shall be designed to ensure that
the least burden is placed on individuals enrolling in qualified
health plans through an Exchange and taxpayers eligible for the
credit allowable under this section.
``(f) Reconciliation of Credit and Advance Credit.--
``(1) In general.--The amount of the credit allowed under
this section for any taxable year shall be reduced (but not
below zero) by the amount of any advance payment of such credit
under section 1412 of the Patient Protection and Affordable Care
Act.
``(2) Excess advance payments.--
``(A) In general.--If the advance payments to a
taxpayer under section 1412 of the Patient Protection
and Affordable Care Act for a taxable year exceed the
credit allowed by this section (determined without
regard to paragraph (1)), the tax imposed by this
chapter for the taxable year shall be increased by the
amount of such excess.
``(B) Limitation on increase where income less than
400 percent of poverty line.--
``(i) In general.--In the case of an
applicable taxpayer whose household income is less
than 400 percent of the poverty line for the size
of the family involved for the taxable year, the
amount of the increase under subparagraph (A)
shall in no event exceed $400 ($250 in the case of
a taxpayer whose tax is determined under section
1(c) for the taxable year).
``(ii) Indexing of amount.--In the case of any
calendar year beginning after 2014, each of the
dollar amounts under clause (i) shall be increased
by an amount equal to--
``(I) such dollar amount, multiplied
by
``(II) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year, determined by
substituting `calendar year 2013' for
`calendar year 1992' in subparagraph (B)
thereof.
If the amount of any increase under clause (i) is
not a multiple of $50, such increase shall be
rounded to the next lowest multiple of $50.
``(g) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the provisions of this section,
including regulations which provide for--
``(1) the coordination of the credit allowed under this
section with the program for advance payment of the credit under
section 1412 of the Patient Protection and Affordable Care Act,
and
``(2) the application of subsection (f) where the filing
status of the taxpayer for a taxable year is different from such
status used for determining the advance payment of the
credit.''.
(b) Disallowance of Deduction.--Section 280C of the Internal Revenue
Code of 1986 <> is amended by adding at the end the
following new subsection:
``(g) Credit for Health Insurance Premiums.--No deduction shall be
allowed for the portion of the premiums paid by the taxpayer for
coverage of 1 or more individuals under a qualified health plan which is
equal to the amount of the credit determined for the taxable year under
section 36B(a) with respect to such premiums.''.
[[Page 220]]
(c) Study on Affordable Coverage.--
(1) Study and report.--
(A) In general.--Not later than 5 years after the
date of the enactment of this Act, the Comptroller
General shall conduct a study on the affordability of
health insurance coverage, including--
(i) the impact of the tax credit for qualified
health insurance coverage of individuals under
section 36B of the Internal Revenue Code of 1986
and the tax credit for employee health insurance
expenses of small employers under section 45R of
such Code on maintaining and expanding the health
insurance coverage of individuals;
(ii) the availability of affordable health
benefits plans, including a study of whether the
percentage of household income used for purposes
of section 36B(c)(2)(C) of the Internal Revenue
Code of 1986 (as added by this section) is the
appropriate level for determining whether
employer-provided coverage is affordable for an
employee and whether such level may be lowered
without significantly increasing the costs to the
Federal Government and reducing employer-provided
coverage; and
(iii) the ability of individuals to maintain
essential health benefits coverage (as defined in
section 5000A(f) of the Internal Revenue Code of
1986).
(B) Report.--The Comptroller General shall submit to
the appropriate committees of Congress a report on the
study conducted under subparagraph (A), together with
legislative recommendations relating to the matters
studied under such subparagraph.
(2) Appropriate committees of congress.--In this subsection,
the term ``appropriate committees of Congress'' means the
Committee on Ways and Means, the Committee on Education and
Labor, and the Committee on Energy and Commerce of the House of
Representatives and the Committee on Finance and the Committee
on Health, Education, Labor and Pensions of the Senate.
(d) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36B,'' after ``36A,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 36A
the following new item:
``Sec. 36B. Refundable credit for coverage under a qualified health
plan.''.
(e) <> Effective Date.--The amendments made
by this section shall apply to taxable years ending after December 31,
2013.
SEC. 1402. <> REDUCED COST-SHARING FOR INDIVIDUALS
ENROLLING IN QUALIFIED HEALTH PLANS.
(a) In General.--In the case of an eligible insured enrolled in a
qualified health plan--
(1) <> the Secretary shall notify the
issuer of the plan of such eligibility; and
(2) the issuer shall reduce the cost-sharing under the plan
at the level and in the manner specified in subsection (c).
[[Page 221]]
(b) Eligible Insured.--In this section, the term ``eligible
insured'' means an individual--
(1) who enrolls in a qualified health plan in the silver
level of coverage in the individual market offered through an
Exchange; and
(2) whose household income exceeds 100 percent but does not
exceed 400 percent of the poverty line for a family of the size
involved.
In the case of an individual described in section 36B(c)(1)(B) of the
Internal Revenue Code of 1986, the individual shall be treated as having
household income equal to 100 percent for purposes of applying this
section.
(c) Determination of Reduction in Cost-sharing.--
(1) Reduction in out-of-pocket limit.--
(A) In general.--The reduction in cost-sharing under
this subsection shall first be achieved by reducing the
applicable out-of pocket limit under section 1302(c)(1)
in the case of--
(i) an eligible insured whose household income
is more than 100 percent but not more than 200
percent of the poverty line for a family of the
size involved, by two-thirds;
(ii) an eligible insured whose household
income is more than 200 percent but not more than
300 percent of the poverty line for a family of
the size involved, by one-half; and
(iii) an eligible insured whose household
income is more than 300 percent but not more than
400 percent of the poverty line for a family of
the size involved, by one-third.
(B) Coordination with actuarial value limits.--
(i) In general.--The Secretary shall ensure
the reduction under this paragraph shall not
result in an increase in the plan's share of the
total allowed costs of benefits provided under the
plan above--
(I) 90 percent in the case of an
eligible insured described in paragraph
(2)(A);
(II) 80 percent in the case of an
eligible insured described in paragraph
(2)(B); and
(III) 70 percent in the case of an
eligible insured described in clause
(ii) or (iii) of subparagraph (A).
(ii) Adjustment.--The Secretary shall adjust
the out-of pocket limits under paragraph (1) if
necessary to ensure that such limits do not cause
the respective actuarial values to exceed the
levels specified in clause (i).
(2) Additional reduction for lower income insureds.--
The <> Secretary shall establish procedures
under which the issuer of a qualified health plan to which this
section applies shall further reduce cost-sharing under the plan
in a manner sufficient to--
(A) in the case of an eligible insured whose
household income is not less than 100 percent but not
more than 150 percent of the poverty line for a family
of the size involved, increase the plan's share of the
total allowed
[[Page 222]]
costs of benefits provided under the plan to 90 percent
of such costs; and
(B) in the case of an eligible insured whose
household income is more than 150 percent but not more
than 200 percent of the poverty line for a family of the
size involved, increase the plan's share of the total
allowed costs of benefits provided under the plan to 80
percent of such costs.
(3) Methods for reducing cost-sharing.--
(A) <> In general.--An issuer
of a qualified health plan making reductions under this
subsection shall notify the Secretary of such reductions
and the Secretary shall make periodic and timely
payments to the issuer equal to the value of the
reductions.
(B) Capitated payments.--The Secretary may establish
a capitated payment system to carry out the payment of
cost-sharing reductions under this section. Any such
system shall take into account the value of the
reductions and make appropriate risk adjustments to such
payments.
(4) Additional benefits.--If a qualified health plan under
section 1302(b)(5) offers benefits in addition to the essential
health benefits required to be provided by the plan, or a State
requires a qualified health plan under section 1311(d)(3)(B) to
cover benefits in addition to the essential health benefits
required to be provided by the plan, the reductions in cost-
sharing under this section shall not apply to such additional
benefits.
(5) Special rule for pediatric dental plans.--If an
individual enrolls in both a qualified health plan and a plan
described in section 1311(d)(2)(B)(ii)(I) for any plan year,
subsection (a) shall not apply to that portion of any reduction
in cost-sharing under subsection (c) that (under regulations
prescribed by the Secretary) is properly allocable to pediatric
dental benefits which are included in the essential health
benefits required to be provided by a qualified health plan
under section 1302(b)(1)(J).
(d) Special Rules for Indians.--
(1) Indians under 300 percent of poverty.--If an individual
enrolled in any qualified health plan in the individual market
through an Exchange is an Indian (as defined in section 4(d) of
the Indian Self-Determination and Education Assistance Act (25
U.S.C. 450b(d))) whose household income is not more than 300
percent of the poverty line for a family of the size involved,
then, for purposes of this section--
(A) such individual shall be treated as an eligible
insured; and
(B) the issuer of the plan shall eliminate any cost-
sharing under the plan.
(2) Items or services furnished through indian health
providers.--If an Indian (as so defined) enrolled in a qualified
health plan is furnished an item or service directly by the
Indian Health Service, an Indian Tribe, Tribal Organization, or
Urban Indian Organization or through referral under contract
health services--
(A) no cost-sharing under the plan shall be imposed
under the plan for such item or service; and
(B) the issuer of the plan shall not reduce the
payment to any such entity for such item or service by
the amount
[[Page 223]]
of any cost-sharing that would be due from the Indian
but for subparagraph (A).
(3) Payment.--The Secretary shall pay to the issuer of a
qualified health plan the amount necessary to reflect the
increase in actuarial value of the plan required by reason of
this subsection.
(e) Rules for Individuals Not Lawfully Present.--
(1) In general.--If an individual who is an eligible insured
is not lawfully present--
(A) no cost-sharing reduction under this section
shall apply with respect to the individual; and
(B) for purposes of applying this section, the
determination as to what percentage a taxpayer's
household income bears to the poverty level for a family
of the size involved shall be made under one of the
following methods:
(i) A method under which--
(I) the taxpayer's family size is
determined by not taking such
individuals into account, and
(II) the taxpayer's household income
is equal to the product of the
taxpayer's household income (determined
without regard to this subsection) and a
fraction--
(aa) the numerator of which
is the poverty line for the
taxpayer's family size
determined after application of
subclause (I), and
(bb) the denominator of
which is the poverty line for
the taxpayer's family size
determined without regard to
subclause (I).
(ii) A comparable method reaching the same
result as the method under clause (i).
(2) Lawfully present.--For purposes of this section, an
individual shall be treated as lawfully present only if the
individual is, and is reasonably expected to be for the entire
period of enrollment for which the cost-sharing reduction under
this section is being claimed, a citizen or national of the
United States or an alien lawfully present in the United States.
(3) <> Secretarial authority.--The
Secretary, in consultation with the Secretary of the Treasury,
shall prescribe rules setting forth the methods by which
calculations of family size and household income are made for
purposes of this subsection. Such rules shall be designed to
ensure that the least burden is placed on individuals enrolling
in qualified health plans through an Exchange and taxpayers
eligible for the credit allowable under this section.
(f) Definitions and Special Rules.--In this section:
(1) In general.--Any term used in this section which is also
used in section 36B of the Internal Revenue Code of 1986 shall
have the meaning given such term by such section.
(2) Limitations on reduction.--No cost-sharing reduction
shall be allowed under this section with respect to coverage for
any month unless the month is a coverage month with respect to
which a credit is allowed to the insured (or an applicable
taxpayer on behalf of the insured) under section 36B of such
Code.
(3) Data used for eligibility.--Any determination under this
section shall be made on the basis of the taxable year for which
the advance determination is made under section
[[Page 224]]
1412 and not the taxable year for which the credit under section
36B of such Code is allowed.
Subpart B--Eligibility Determinations
SEC. 1411. <> PROCEDURES FOR DETERMINING
ELIGIBILITY FOR EXCHANGE PARTICIPATION, PREMIUM TAX CREDITS
AND REDUCED COST-SHARING, AND INDIVIDUAL RESPONSIBILITY
EXEMPTIONS.
(a) Establishment of Program.--The Secretary shall establish a
program meeting the requirements of this section for determining--
(1) whether an individual who is to be covered in the
individual market by a qualified health plan offered through an
Exchange, or who is claiming a premium tax credit or reduced
cost-sharing, meets the requirements of sections 1312(f)(3),
1402(e), and 1412(d) of this title and section 36B(e) of the
Internal Revenue Code of 1986 that the individual be a citizen
or national of the United States or an alien lawfully present in
the United States;
(2) in the case of an individual claiming a premium tax
credit or reduced cost-sharing under section 36B of such Code or
section 1402--
(A) whether the individual meets the income and
coverage requirements of such sections; and
(B) the amount of the tax credit or reduced cost-
sharing;
(3) whether an individual's coverage under an employer-
sponsored health benefits plan is treated as unaffordable under
sections 36B(c)(2)(C) and 5000A(e)(2); and
(4) whether to grant a certification under section
1311(d)(4)(H) attesting that, for purposes of the individual
responsibility requirement under section 5000A of the Internal
Revenue Code of 1986, an individual is entitled to an exemption
from either the individual responsibility requirement or the
penalty imposed by such section.
(b) Information Required To Be Provided by Applicants.--
(1) In general.--An applicant for enrollment in a qualified
health plan offered through an Exchange in the individual market
shall provide--
(A) the name, address, and date of birth of each
individual who is to be covered by the plan (in this
subsection referred to as an ``enrollee''); and
(B) the information required by any of the following
paragraphs that is applicable to an enrollee.
(2) Citizenship or immigration status.--The following
information shall be provided with respect to every enrollee:
(A) In the case of an enrollee whose eligibility is
based on an attestation of citizenship of the enrollee,
the enrollee's social security number.
(B) In the case of an individual whose eligibility
is based on an attestation of the enrollee's immigration
status, the enrollee's social security number (if
applicable) and such identifying information with
respect to the enrollee's immigration status as the
Secretary, after consultation with the Secretary of
Homeland Security, determines appropriate.
[[Page 225]]
(3) Eligibility and amount of tax credit or reduced cost-
sharing.--In the case of an enrollee with respect to whom a
premium tax credit or reduced cost-sharing under section 36B of
such Code or section 1402 is being claimed, the following
information:
(A) Information regarding income and family size.--
The information described in section 6103(l)(21) for the
taxable year ending with or within the second calendar
year preceding the calendar year in which the plan year
begins.
(B) Changes in circumstances.--The information
described in section 1412(b)(2), including information
with respect to individuals who were not required to
file an income tax return for the taxable year described
in subparagraph (A) or individuals who experienced
changes in marital status or family size or significant
reductions in income.
(4) Employer-sponsored coverage.--In the case of an enrollee
with respect to whom eligibility for a premium tax credit under
section 36B of such Code or cost-sharing reduction under section
1402 is being established on the basis that the enrollee's (or
related individual's) employer is not treated under section
36B(c)(2)(C) of such Code as providing minimum essential
coverage or affordable minimum essential coverage, the following
information:
(A) The name, address, and employer identification
number (if available) of the employer.
(B) Whether the enrollee or individual is a full-
time employee and whether the employer provides such
minimum essential coverage.
(C) If the employer provides such minimum essential
coverage, the lowest cost option for the enrollee's or
individual's enrollment status and the enrollee's or
individual's required contribution (within the meaning
of section 5000A(e)(1)(B) of such Code) under the
employer-sponsored plan.
(D) If an enrollee claims an employer's minimum
essential coverage is unaffordable, the information
described in paragraph (3).
If an enrollee changes employment or obtains additional
employment while enrolled in a qualified health plan for which
such credit or reduction is allowed, the enrollee shall notify
the Exchange of such change or additional employment and provide
the information described in this paragraph with respect to the
new employer.
(5) Exemptions from individual responsibility
requirements.--In the case of an individual who is seeking an
exemption certificate under section 1311(d)(4)(H) from any
requirement or penalty imposed by section 5000A, the following
information:
(A) In the case of an individual seeking exemption
based on the individual's status as a member of an
exempt religious sect or division, as a member of a
health care sharing ministry, as an Indian, or as an
individual eligible for a hardship exemption, such
information as the Secretary shall prescribe.
[[Page 226]]
(B) In the case of an individual seeking exemption
based on the lack of affordable coverage or the
individual's status as a taxpayer with household income
less than 100 percent of the poverty line, the
information described in paragraphs (3) and (4), as
applicable.
(c) Verification of Information Contained in Records of Specific
Federal Officials.--
(1) Information transferred to secretary.--An Exchange shall
submit the information provided by an applicant under subsection
(b) to the Secretary for verification in accordance with the
requirements of this subsection and subsection (d).
(2) Citizenship or immigration status.--
(A) Commissioner of social security.--The Secretary
shall submit to the Commissioner of Social Security the
following information for a determination as to whether
the information provided is consistent with the
information in the records of the Commissioner:
(i) The name, date of birth, and social
security number of each individual for whom such
information was provided under subsection (b)(2).
(ii) The attestation of an individual that the
individual is a citizen.
(B) Secretary of homeland security.--
(i) <> In general.--In the
case of an individual--
(I) who attests that the individual
is an alien lawfully present in the
United States; or
(II) who attests that the individual
is a citizen but with respect to whom
the Commissioner of Social Security has
notified the Secretary under subsection
(e)(3) that the attestation is
inconsistent with information in the
records maintained by the Commissioner;
the Secretary shall submit to the Secretary of
Homeland Security the information described in
clause (ii) for a determination as to whether the
information provided is consistent with the
information in the records of the Secretary of
Homeland Security.
(ii) Information.--The information described
in clause (ii) is the following:
(I) The name, date of birth, and any
identifying information with respect to
the individual's immigration status
provided under subsection (b)(2).
(II) The attestation that the
individual is an alien lawfully present
in the United States or in the case of
an individual described in clause
(i)(II), the attestation that the
individual is a citizen.
(3) Eligibility for tax credit and cost-sharing reduction.--
The Secretary shall submit the information described in
subsection (b)(3)(A) provided under paragraph (3), (4), or (5)
of subsection (b) to the Secretary of the Treasury for
verification of household income and family size for purposes of
eligibility.
(4) Methods.--
(A) <> In general.--
The Secretary, in consultation with the Secretary of the
Treasury, the Secretary of Homeland
[[Page 227]]
Security, and the Commissioner of Social Security, shall
provide that verifications and determinations under this
subsection shall be done--
(i) through use of an on-line system or
otherwise for the electronic submission of, and
response to, the information submitted under this
subsection with respect to an applicant; or
(ii) by determining the consistency of the
information submitted with the information
maintained in the records of the Secretary of the
Treasury, the Secretary of Homeland Security, or
the Commissioner of Social Security through such
other method as is approved by the Secretary.
(B) Flexibility.--The Secretary may modify the
methods used under the program established by this
section for the Exchange and verification of information
if the Secretary determines such modifications would
reduce the administrative costs and burdens on the
applicant, including allowing an applicant to request
the Secretary of the Treasury to provide the information
described in paragraph (3) directly to the Exchange or
to the Secretary. The Secretary shall not make any such
modification unless the Secretary determines that any
applicable requirements under this section and section
6103 of the Internal Revenue Code of 1986 with respect
to the confidentiality, disclosure, maintenance, or use
of information will be met.
(d) Verification by Secretary.--In the case of information provided
under subsection (b) that is not required under subsection (c) to be
submitted to another person for verification, the Secretary shall verify
the accuracy of such information in such manner as the Secretary
determines appropriate, including delegating responsibility for
verification to the Exchange.
(e) Actions Relating to Verification.--
(1) In general.--Each person to whom the Secretary provided
information under subsection (c) shall report to the Secretary
under the method established under subsection (c)(4) the results
of its verification and the Secretary shall notify the Exchange
of such results. <> Each person to whom the
Secretary provided information under subsection (d) shall report
to the Secretary in such manner as the Secretary determines
appropriate.
(2) Verification.--
(A) Eligibility for enrollment and premium tax
credits and cost-sharing reductions.--If information
provided by an applicant under paragraphs (1), (2), (3),
and (4) of subsection (b) is verified under subsections
(c) and (d)--
(i) the individual's eligibility to enroll
through the Exchange and to apply for premium tax
credits and cost-sharing reductions shall be
satisfied; and
(ii) <> the Secretary
shall, if applicable, notify the Secretary of the
Treasury under section 1412(c) of the amount of
any advance payment to be made.
(B) Exemption from individual responsibility.--If
information provided by an applicant under subsection
(b)(5) is verified under subsections (c) and (d), the
Secretary
[[Page 228]]
shall issue the certification of exemption described in
section 1311(d)(4)(H).
(3) Inconsistencies involving attestation of citizenship or
lawful presence.--If the information provided by any applicant
under subsection (b)(2) is inconsistent with information in the
records maintained by the Commissioner of Social Security or
Secretary of Homeland Security, whichever is applicable, the
applicant's eligibility will be determined in the same manner as
an individual's eligibility under the medicaid program is
determined under section 1902(ee) of the Social Security Act (as
in effect on January 1, 2010).
(4) <> Inconsistencies involving
other information.--
(A) In general.--If the information provided by an
applicant under subsection (b) (other than subsection
(b)(2)) is inconsistent with information in the records
maintained by persons under subsection (c) or is not
verified under subsection (d), the Secretary shall
notify the Exchange and the Exchange shall take the
following actions:
(i) Reasonable effort.--The Exchange shall
make a reasonable effort to identify and address
the causes of such inconsistency, including
through typographical or other clerical errors, by
contacting the applicant to confirm the accuracy
of the information, and by taking such additional
actions as the Secretary, through regulation or
other guidance, may identify.
(ii) Notice and opportunity to correct.--In
the case the inconsistency or inability to verify
is not resolved under subparagraph (A), the
Exchange shall--
(I) notify the applicant of such
fact;
(II) <> provide
the applicant an opportunity to either
present satisfactory documentary
evidence or resolve the inconsistency
with the person verifying the
information under subsection (c) or (d)
during the 90-day period beginning the
date on which the notice required under
subclause (I) is sent to the applicant.
The Secretary may extend the 90-day period under
subclause (II) for enrollments occurring during
2014.
(B) Specific actions not involving citizenship or
lawful presence.--
(i) In general.--Except as provided in
paragraph (3), the Exchange shall, during any
period before the close of the period under
subparagraph (A)(ii)(II), make any determination
under paragraphs (2), (3), and (4) of subsection
(a) on the basis of the information contained on
the application.
(ii) Eligibility or amount of credit or
reduction.--If an inconsistency involving the
eligibility for, or amount of, any premium tax
credit or cost-sharing reduction is unresolved
under this subsection as of the close of the
period under subparagraph (A)(ii)(II), the
Exchange shall notify the applicant of the amount
(if any) of the credit or reduction that is
determined on the basis of the records maintained
by persons under subsection (c).
(iii) Employer affordability.--If the
Secretary notifies an Exchange that an enrollee is
eligible for
[[Page 229]]
a premium tax credit under section 36B of such
Code or cost-sharing reduction under section 1402
because the enrollee's (or related individual's)
employer does not provide minimum essential
coverage through an employer-sponsored plan or
that the employer does provide that coverage but
it is not affordable coverage, the Exchange shall
notify the employer of such fact and that the
employer may be liable for the payment assessed
under section 4980H of such Code.
(iv) Exemption.--In any case where the
inconsistency involving, or inability to verify,
information provided under subsection (b)(5) is
not resolved as of the close of the period under
subparagraph (A)(ii)(II), the Exchange shall
notify an applicant that no certification of
exemption from any requirement or payment under
section 5000A of such Code will be issued.
(C) Appeals process.--The Exchange shall also notify
each person receiving notice under this paragraph of the
appeals processes established under subsection (f).
(f) Appeals and Redeterminations.--
(1) <> In general.--The Secretary, in
consultation with the Secretary of the Treasury, the Secretary
of Homeland Security, and the Commissioner of Social Security,
shall establish procedures by which the Secretary or one of such
other Federal officers--
(A) hears and makes decisions with respect to
appeals of any determination under subsection (e); and
(B) redetermines eligibility on a periodic basis in
appropriate circumstances.
(2) Employer liability.--
(A) In general.--The Secretary shall establish a
separate appeals process for employers who are notified
under subsection (e)(4)(C) that the employer may be
liable for a tax imposed by section 4980H of the
Internal Revenue Code of 1986 with respect to an
employee because of a determination that the employer
does not provide minimum essential coverage through an
employer-sponsored plan or that the employer does
provide that coverage but it is not affordable coverage
with respect to an employee. Such process shall provide
an employer the opportunity to--
(i) present information to the Exchange for
review of the determination either by the Exchange
or the person making the determination, including
evidence of the employer-sponsored plan and
employer contributions to the plan; and
(ii) have access to the data used to make the
determination to the extent allowable by law.
Such process shall be in addition to any rights of
appeal the employer may have under subtitle F of such
Code.
(B) Confidentiality.--Notwithstanding any provision
of this title (or the amendments made by this title) or
section 6103 of the Internal Revenue Code of 1986, an
employer shall not be entitled to any taxpayer return
information with respect to an employee for purposes of
determining whether the employer is subject to the
penalty under section 4980H of such Code with respect to
the employee, except that--
[[Page 230]]
(i) the employer may be notified as to the
name of an employee and whether or not the
employee's income is above or below the threshold
by which the affordability of an employer's health
insurance coverage is measured; and
(ii) this subparagraph shall not apply to an
employee who provides a waiver (at such time and
in such manner as the Secretary may prescribe)
authorizing an employer to have access to the
employee's taxpayer return information.
(g) Confidentiality of Applicant Information.--
(1) In general.--An applicant for insurance coverage or for
a premium tax credit or cost-sharing reduction shall be required
to provide only the information strictly necessary to
authenticate identity, determine eligibility, and determine the
amount of the credit or reduction.
(2) Receipt of information.--Any person who receives
information provided by an applicant under subsection (b)
(whether directly or by another person at the request of the
applicant), or receives information from a Federal agency under
subsection (c), (d), or (e), shall--
(A) use the information only for the purposes of,
and to the extent necessary in, ensuring the efficient
operation of the Exchange, including verifying the
eligibility of an individual to enroll through an
Exchange or to claim a premium tax credit or cost-
sharing reduction or the amount of the credit or
reduction; and
(B) not disclose the information to any other person
except as provided in this section.
(h) Penalties.--
(1) False or fraudulent information.--
(A) Civil penalty.--
(i) In general.--If--
(I) any person fails to provides
correct information under subsection
(b); and
(II) such failure is attributable to
negligence or disregard of any rules or
regulations of the Secretary,
such person shall be subject, in addition to any
other penalties that may be prescribed by law, to
a civil penalty of not more than $25,000 with
respect to any failures involving an application
for a plan year. For purposes of this
subparagraph, the terms ``negligence'' and
``disregard'' shall have the same meanings as when
used in section 6662 of the Internal Revenue Code
of 1986.
(ii) Reasonable cause exception.--No penalty
shall be imposed under clause (i) if the Secretary
determines that there was a reasonable cause for
the failure and that the person acted in good
faith.
(B) Knowing and willful violations.--Any person who
knowingly and willfully provides false or fraudulent
information under subsection (b) shall be subject, in
addition to any other penalties that may be prescribed
by law, to a civil penalty of not more than $250,000.
[[Page 231]]
(2) Improper use or disclosure of information.--Any person
who knowingly and willfully uses or discloses information in
violation of subsection (g) shall be subject, in addition to any
other penalties that may be prescribed by law, to a civil
penalty of not more than $25,000.
(3) Limitations on liens and levies.--The Secretary (or, if
applicable, the Attorney General of the United States) shall
not--
(A) file notice of lien with respect to any property
of a person by reason of any failure to pay the penalty
imposed by this subsection; or
(B) levy on any such property with respect to such
failure.
(i) Study of Administration of Employer Responsibility.--
(1) In general.--The Secretary of Health and Human Services
shall, in consultation with the Secretary of the Treasury,
conduct a study of the procedures that are necessary to ensure
that in the administration of this title and section 4980H of
the Internal Revenue Code of 1986 (as added by section 1513)
that the following rights are protected:
(A) The rights of employees to preserve their right
to confidentiality of their taxpayer return information
and their right to enroll in a qualified health plan
through an Exchange if an employer does not provide
affordable coverage.
(B) The rights of employers to adequate due process
and access to information necessary to accurately
determine any payment assessed on employers.
(2) Report.--Not later than January 1, 2013, the Secretary
of Health and Human Services shall report the results of the
study conducted under paragraph (1), including any
recommendations for legislative changes, to the Committees on
Finance and Health, Education, Labor and Pensions of the Senate
and the Committees of Education and Labor and Ways and Means of
the House of Representatives.
SEC. 1412. <> ADVANCE DETERMINATION AND PAYMENT OF
PREMIUM TAX CREDITS AND COST-SHARING REDUCTIONS.
(a) In General.--The Secretary, in consultation with the Secretary
of the Treasury, shall establish a program under which--
(1) upon request of an Exchange, advance determinations are
made under section 1411 with respect to the income eligibility
of individuals enrolling in a qualified health plan in the
individual market through the Exchange for the premium tax
credit allowable under section 36B of the Internal Revenue Code
of 1986 and the cost-sharing reductions under section 1402;
(2) <> the Secretary notifies--
(A) the Exchange and the Secretary of the Treasury
of the advance determinations; and
(B) the Secretary of the Treasury of the name and
employer identification number of each employer with
respect to whom 1 or more employee of the employer were
determined to be eligible for the premium tax credit
under section 36B of the Internal Revenue Code of 1986
and the cost-sharing reductions under section 1402
because--
[[Page 232]]
(i) the employer did not provide minimum
essential coverage; or
(ii) the employer provided such minimum
essential coverage but it was determined under
section 36B(c)(2)(C) of such Code to either be
unaffordable to the employee or not provide the
required minimum actuarial value; and
(3) the Secretary of the Treasury makes advance payments of
such credit or reductions to the issuers of the qualified health
plans in order to reduce the premiums payable by individuals
eligible for such credit.
(b) Advance Determinations.--
(1) In general.--The Secretary shall provide under the
program established under subsection (a) that advance
determination of eligibility with respect to any individual
shall be made--
(A) during the annual open enrollment period
applicable to the individual (or such other enrollment
period as may be specified by the Secretary); and
(B) on the basis of the individual's household
income for the most recent taxable year for which the
Secretary, after consultation with the Secretary of the
Treasury, determines information is available.
(2) Changes in circumstances.--The Secretary shall provide
procedures for making advance determinations on the basis of
information other than that described in paragraph (1)(B) in
cases where information included with an application form
demonstrates substantial changes in income, changes in family
size or other household circumstances, change in filing status,
the filing of an application for unemployment benefits, or other
significant changes affecting eligibility, including--
(A) allowing an individual claiming a decrease of 20
percent or more in income, or filing an application for
unemployment benefits, to have eligibility for the
credit determined on the basis of household income for a
later period or on the basis of the individual's
estimate of such income for the taxable year; and
(B) the determination of household income in cases
where the taxpayer was not required to file a return of
tax imposed by this chapter for the second preceding
taxable year.
(c) <> Payment of Premium Tax Credits and
Cost-sharing Reductions.--
(1) In general.--The Secretary shall notify the Secretary of
the Treasury and the Exchange through which the individual is
enrolling of the advance determination under section 1411.
(2) Premium tax credit.--
(A) In general.--The Secretary of the Treasury shall
make the advance payment under this section of any
premium tax credit allowed under section 36B of the
Internal Revenue Code of 1986 to the issuer of a
qualified health plan on a monthly basis (or such other
periodic basis as the Secretary may provide).
(B) Issuer responsibilities.--An issuer of a
qualified health plan receiving an advance payment with
respect to an individual enrolled in the plan shall--
[[Page 233]]
(i) reduce the premium charged the insured for
any period by the amount of the advance payment
for the period;
(ii) notify the Exchange and the Secretary of
such reduction;
(iii) include with each billing statement the
amount by which the premium for the plan has been
reduced by reason of the advance payment; and
(iv) in the case of any nonpayment of premiums
by the insured--
(I) notify the Secretary of such
nonpayment; and
(II) allow a 3-month grace period
for nonpayment of premiums before
discontinuing coverage.
(3) Cost-sharing reductions.--The Secretary shall also
notify the Secretary of the Treasury and the Exchange under
paragraph (1) if an advance payment of the cost-sharing
reductions under section 1402 is to be made to the issuer of any
qualified health plan with respect to any individual enrolled in
the plan. The Secretary of the Treasury shall make such advance
payment at such time and in such amount as the Secretary
specifies in the notice.
(d) No Federal Payments for Individuals Not Lawfully Present.--
Nothing in this subtitle or the amendments made by this subtitle allows
Federal payments, credits, or cost-sharing reductions for individuals
who are not lawfully present in the United States.
(e) State Flexibility.--Nothing in this subtitle or the amendments
made by this subtitle shall be construed to prohibit a State from making
payments to or on behalf of an individual for coverage under a qualified
health plan offered through an Exchange that are in addition to any
credits or cost-sharing reductions allowable to the individual under
this subtitle and such amendments.
SEC. 1413. <> STREAMLINING OF PROCEDURES FOR
ENROLLMENT THROUGH AN EXCHANGE AND STATE MEDICAID, CHIP, AND
HEALTH SUBSIDY PROGRAMS.
(a) In General.--The Secretary shall establish a system meeting the
requirements of this section under which residents of each State may
apply for enrollment in, receive a determination of eligibility for
participation in, and continue participation in, applicable State health
subsidy programs. Such system shall ensure that if an individual
applying to an Exchange is found through screening to be eligible for
medical assistance under the State medicaid plan under title XIX, or
eligible for enrollment under a State children's health insurance
program (CHIP) under title XXI of such Act, the individual is enrolled
for assistance under such plan or program.
(b) Requirements Relating to Forms and Notice.--
(1) Requirements relating to forms.--
(A) In general.--The Secretary shall develop and
provide to each State a single, streamlined form that--
(i) may be used to apply for all applicable
State health subsidy programs within the State;
(ii) may be filed online, in person, by mail,
or by telephone;
[[Page 234]]
(iii) may be filed with an Exchange or with
State officials operating one of the other
applicable State health subsidy programs; and
(iv) is structured to maximize an applicant's
ability to complete the form satisfactorily,
taking into account the characteristics of
individuals who qualify for applicable State
health subsidy programs.
(B) State authority to establish form.--A State may
develop and use its own single, streamlined form as an
alternative to the form developed under subparagraph (A)
if the alternative form is consistent with standards
promulgated by the Secretary under this section.
(C) Supplemental eligibility forms.--The Secretary
may allow a State to use a supplemental or alternative
form in the case of individuals who apply for
eligibility that is not determined on the basis of the
household income (as defined in section 36B of the
Internal Revenue Code of 1986).
(2) Notice.--The Secretary shall provide that an applicant
filing a form under paragraph (1) shall receive notice of
eligibility for an applicable State health subsidy program
without any need to provide additional information or paperwork
unless such information or paperwork is specifically required by
law when information provided on the form is inconsistent with
data used for the electronic verification under paragraph (3) or
is otherwise insufficient to determine eligibility.
(c) Requirements Relating to Eligibility Based on Data Exchanges.--
(1) Development of secure interfaces.--Each State shall
develop for all applicable State health subsidy programs a
secure, electronic interface allowing an exchange of data
(including information contained in the application forms
described in subsection (b)) that allows a determination of
eligibility for all such programs based on a single application.
Such interface shall be compatible with the method established
for data verification under section 1411(c)(4).
(2) Data matching program.--Each applicable State health
subsidy program shall participate in a data matching arrangement
for determining eligibility for participation in the program
under paragraph (3) that--
(A) provides access to data described in paragraph
(3);
(B) applies only to individuals who--
(i) receive assistance from an applicable
State health subsidy program; or
(ii) apply for such assistance--
(I) by filing a form described in
subsection (b); or
(II) by requesting a determination
of eligibility and authorizing
disclosure of the information described
in paragraph (3) to applicable State
health coverage subsidy programs for
purposes of determining and establishing
eligibility; and
(C) consistent with standards promulgated by the
Secretary, including the privacy and data security
safeguards described in section 1942 of the Social
Security Act or that are otherwise applicable to such
programs.
[[Page 235]]
(3) Determination of eligibility.--
(A) In general.--Each applicable State health
subsidy program shall, to the maximum extent
practicable--
(i) establish, verify, and update eligibility
for participation in the program using the data
matching arrangement under paragraph (2); and
(ii) determine such eligibility on the basis
of reliable, third party data, including
information described in sections 1137, 453(i),
and 1942(a) of the Social Security Act, obtained
through such arrangement.
(B) Exception.--This paragraph shall not apply in
circumstances with respect to which the Secretary
determines that the administrative and other costs of
use of the data matching arrangement under paragraph (2)
outweigh its expected gains in accuracy, efficiency, and
program participation.
(4) Secretarial standards.--The Secretary shall, after
consultation with persons in possession of the data to be
matched and representatives of applicable State health subsidy
programs, promulgate standards governing the timing, contents,
and procedures for data matching described in this subsection.
Such standards shall take into account administrative and other
costs and the value of data matching to the establishment,
verification, and updating of eligibility for applicable State
health subsidy programs.
(d) Administrative Authority.--
(1) Agreements.--Subject to section 1411 and section
6103(l)(21) of the Internal Revenue Code of 1986 and any other
requirement providing safeguards of privacy and data integrity,
the Secretary may establish model agreements, and enter into
agreements, for the sharing of data under this section.
(2) Authority of exchange to contract out.--Nothing in this
section shall be construed to--
(A) prohibit contractual arrangements through which
a State medicaid agency determines eligibility for all
applicable State health subsidy programs, but only if
such agency complies with the Secretary's requirements
ensuring reduced administrative costs, eligibility
errors, and disruptions in coverage; or
(B) change any requirement under title XIX that
eligibility for participation in a State's medicaid
program must be determined by a public agency.
(e) Applicable State Health Subsidy Program.--In this section, the
term ``applicable State health subsidy program'' means--
(1) the program under this title for the enrollment in
qualified health plans offered through an Exchange, including
the premium tax credits under section 36B of the Internal
Revenue Code of 1986 and cost-sharing reductions under section
1402;
(2) a State medicaid program under title XIX of the Social
Security Act;
(3) a State children's health insurance program (CHIP) under
title XXI of such Act; and
(4) a State program under section 1331 establishing
qualified basic health plans.
[[Page 236]]
SEC. 1414. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR CERTAIN
PROGRAMS.
(a) Disclosure of Taxpayer Return Information and Social Security
Numbers.--
(1) Taxpayer return information.--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
eligibility requirements for certain programs.--
``(A) In general.--The Secretary, upon written
request from the Secretary of Health and Human Services,
shall disclose to officers, employees, and contractors
of the Department of Health and Human Services return
information of any taxpayer whose income is relevant in
determining any premium tax credit under section 36B or
any cost-sharing reduction under section 1402 of the
Patient Protection and Affordable Care Act or
eligibility for participation in a State medicaid
program under title XIX of the Social Security Act, a
State's children's health insurance program under title
XXI of the Social Security Act, or a basic health
program under section 1331 of Patient Protection and
Affordable Care 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 number of individuals for whom a
deduction is allowed under section 151 with
respect to the taxpayer (including the taxpayer
and the taxpayer's spouse),
``(iv) the modified gross income (as defined
in section 36B) of such taxpayer and each of the
other individuals included under clause (iii) who
are required to file a return of tax imposed by
chapter 1 for the taxable year,
``(v) such other information as is prescribed
by the Secretary by regulation as might indicate
whether the taxpayer is eligible for such credit
or reduction (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) Information to exchange and state agencies.--
The Secretary of Health and Human Services may disclose
to an Exchange established under the Patient Protection
and Affordable Care Act or its contractors, or to a
State agency administering a State program described in
subparagraph (A) or its contractors, any inconsistency
between the information provided by the Exchange or
State agency to the Secretary and the information
provided to the Secretary under subparagraph (A).
``(C) Restriction on use of disclosed information.--
Return information disclosed under subparagraph (A) or
(B) may be used by officers, employees, and contractors
of the Department of Health and Human Services, an
Exchange, or a State agency only for the purposes of,
and to the extent necessary in--
[[Page 237]]
``(i) establishing eligibility for
participation in the Exchange, and verifying the
appropriate amount of, any credit or reduction
described in subparagraph (A),
``(ii) determining eligibility for
participation in the State programs described in
subparagraph (A).''.
(2) Social security numbers.--Section 205(c)(2)(C) of the
Social Security Act <> is amended by adding
at the end the following new clause:
``(x) The Secretary of Health and Human
Services, and the Exchanges established under
section 1311 of the Patient Protection and
Affordable Care Act, are authorized to collect and
use the names and social security account numbers
of individuals as required to administer the
provisions of, and the amendments made by, the
such Act.''.
(b) Confidentiality and Disclosure.--Paragraph (3) of section
6103(a) of such Code <> is amended by striking ``or
(20)'' and inserting ``(20), or (21)''.
(c) 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).
(d) 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. 1415. <> PREMIUM TAX CREDIT AND COST-SHARING
REDUCTION PAYMENTS DISREGARDED FOR FEDERAL AND FEDERALLY-
ASSISTED PROGRAMS.
For purposes of determining the eligibility of any individual for
benefits or assistance, or the amount or extent of benefits or
assistance, under any Federal program or under any State or local
program financed in whole or in part with Federal funds--
(1) any credit or refund allowed or made to any individual
by reason of section 36B of the Internal Revenue Code of 1986
(as added by section 1401) shall not be taken into account as
income and shall not be taken into account as resources for the
month of receipt and the following 2 months; and
(2) any cost-sharing reduction payment or advance payment of
the credit allowed under such section 36B that is made under
section 1402 or 1412 shall be treated as made to the qualified
health plan in which an individual is enrolled and not to that
individual.
PART II--SMALL BUSINESS TAX CREDIT
SEC. 1421. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL
BUSINESSES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-
[[Page 238]]
related credits) is amended by inserting after section 45Q the
following:
``SEC. 45R. <> EMPLOYEE HEALTH INSURANCE EXPENSES OF
SMALL EMPLOYERS.
``(a) General Rule.--For purposes of section 38, in the case of an
eligible small employer, the small employer health insurance credit
determined under this section for any taxable year in the credit period
is the amount determined under subsection (b).
``(b) Health Insurance Credit Amount.--Subject to subsection (c),
the amount determined under this subsection with respect to any eligible
small employer is equal to 50 percent (35 percent in the case of a tax-
exempt eligible small employer) of the lesser of--
``(1) the aggregate amount of nonelective contributions the
employer made on behalf of its employees during the taxable year
under the arrangement described in subsection (d)(4) for
premiums for qualified health plans offered by the employer to
its employees through an Exchange, or
``(2) the aggregate amount of nonelective contributions
which the employer would have made during the taxable year under
the arrangement if each employee taken into account under
paragraph (1) had enrolled in a qualified health plan which had
a premium equal to the average premium (as determined by the
Secretary of Health and Human Services) for the small group
market in the rating area in which the employee enrolls for
coverage.
``(c) Phaseout of Credit Amount Based on Number of Employees and
Average Wages.--The amount of the credit determined under subsection (b)
without regard to this subsection shall be reduced (but not below zero)
by the sum of the following amounts:
``(1) Such amount multiplied by a fraction the numerator of
which is the total number of full-time equivalent employees of
the employer in excess of 10 and the denominator of which is 15.
``(2) Such amount multiplied by a fraction the numerator of
which is the average annual wages of the employer in excess of
the dollar amount in effect under subsection (d)(3)(B) and the
denominator of which is such dollar amount.
``(d) Eligible Small Employer.--For purposes of this section--
``(1) In general.--The term `eligible small employer' means,
with respect to any taxable year, an employer--
``(A) which has no more than 25 full-time equivalent
employees for the taxable year,
``(B) the average annual wages of which do not
exceed an amount equal to twice the dollar amount in
effect under paragraph (3)(B) for the taxable year, and
``(C) which has in effect an arrangement described
in paragraph (4).
``(2) Full-time equivalent employees.--
``(A) In general.--The term `full-time equivalent
employees' means a number of employees equal to the
number determined by dividing--
``(i) the total number of hours of service for
which wages were paid by the employer to employees
during the taxable year, by
``(ii) 2,080.
[[Page 239]]
Such number shall be rounded to the next lowest whole
number if not otherwise a whole number.
``(B) Excess hours not counted.--If an employee
works in excess of 2,080 hours of service during any
taxable year, such excess shall not be taken into
account under subparagraph (A).
``(C) <> Hours of service.--The
Secretary, in consultation with the Secretary of Labor,
shall prescribe such regulations, rules, and guidance as
may be necessary to determine the hours of service of an
employee, including rules for the application of this
paragraph to employees who are not compensated on an
hourly basis.
``(3) Average annual wages.--
``(A) In general.--The average annual wages of an
eligible small employer for any taxable year is the
amount determined by dividing--
``(i) the aggregate amount of wages which were
paid by the employer to employees during the
taxable year, by
``(ii) the number of full-time equivalent
employees of the employee determined under
paragraph (2) for the taxable year.
Such amount shall be rounded to the next lowest multiple
of $1,000 if not otherwise such a multiple.
``(B) Dollar amount.--For purposes of paragraph
(1)(B)--
``(i) 2011, 2012, and 2013.--The dollar amount
in effect under this paragraph for taxable years
beginning in 2011, 2012, or 2013 is $20,000.
``(ii) Subsequent years.--In the case of a
taxable year beginning in a calendar year after
2013, the dollar amount in effect under this
paragraph shall be equal to $20,000, multiplied by
the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined
by substituting `calendar year 2012' for `calendar
year 1992' in subparagraph (B) thereof.
``(4) Contribution arrangement.--An arrangement is described
in this paragraph if it requires an eligible small employer to
make a nonelective contribution on behalf of each employee who
enrolls in a qualified health plan offered to employees by the
employer through an exchange in an amount equal to a uniform
percentage (not less than 50 percent) of the premium cost of the
qualified health plan.
``(5) Seasonal worker hours and wages not counted.--For
purposes of this subsection--
``(A) In general.--The number of hours of service
worked by, and wages paid to, a seasonal worker of an
employer shall not be taken into account in determining
the full-time equivalent employees and average annual
wages of the employer unless the worker works for the
employer on more than 120 days during the taxable year.
``(B) Definition of seasonal worker.--The term
`seasonal worker' means a worker who performs labor or
services on a seasonal basis as defined by the Secretary
of Labor, including workers covered by section
500.20(s)(1) of title 29, Code of Federal Regulations
and retail workers employed exclusively during holiday
seasons.
[[Page 240]]
``(e) Other Rules and Definitions.--For purposes of this section--
``(1) Employee.--
``(A) Certain employees excluded.--The term
`employee' shall not include--
``(i) an employee within the meaning of
section 401(c)(1),
``(ii) any 2-percent shareholder (as defined
in section 1372(b)) of an eligible small business
which is an S corporation,
``(iii) any 5-percent owner (as defined in
section 416(i)(1)(B)(i)) of an eligible small
business, or
``(iv) any individual who bears any of the
relationships described in subparagraphs (A)
through (G) of section 152(d)(2) to, or is a
dependent described in section 152(d)(2)(H) of, an
individual described in clause (i), (ii), or
(iii).
``(B) Leased employees.--The term `employee' shall
include a leased employee within the meaning of section
414(n).
``(2) Credit period.--The term `credit period' means, with
respect to any eligible small employer, the 2-consecutive-
taxable year period beginning with the 1st taxable year in which
the employer (or any predecessor) offers 1 or more qualified
health plans to its employees through an Exchange.
``(3) Nonelective contribution.--The term `nonelective
contribution' means an employer contribution other than an
employer contribution pursuant to a salary reduction
arrangement.
``(4) Wages.--The term `wages' has the meaning given such
term by section 3121(a) (determined without regard to any dollar
limitation contained in such section).
``(5) Aggregation and other rules made applicable.--
``(A) Aggregation rules.--All employers treated as a
single employer under subsection (b), (c), (m), or (o)
of section 414 shall be treated as a single employer for
purposes of this section.
``(B) <> Other rules.--Rules
similar to the rules of subsections (c), (d), and (e) of
section 52 shall apply.
``(f) Credit Made Available to Tax-exempt Eligible Small
Employers.--
``(1) In general.--In the case of a tax-exempt eligible
small employer, there shall be treated as a credit allowable
under subpart C (and not allowable under this subpart) the
lesser of--
``(A) the amount of the credit determined under this
section with respect to such employer, or
``(B) the amount of the payroll taxes of the
employer during the calendar year in which the taxable
year begins.
``(2) Tax-exempt eligible small employer.--For purposes of
this section, the term `tax-exempt eligible small employer'
means an eligible small employer which is any organization
described in section 501(c) which is exempt from taxation under
section 501(a).
``(3) Payroll taxes.--For purposes of this subsection--
``(A) In general.--The term `payroll taxes' means--
[[Page 241]]
``(i) amounts required to be withheld from the
employees of the tax-exempt eligible small
employer under section 3401(a),
``(ii) amounts required to be withheld from
such employees under section 3101(b), and
``(iii) amounts of the taxes imposed on the
tax-exempt eligible small employer under section
3111(b).
``(B) <> Special rule.--A
rule similar to the rule of section 24(d)(2)(C) shall
apply for purposes of subparagraph (A).
``(g) Application of Section for Calendar Years 2011, 2012, and
2013.--In the case of any taxable year beginning in 2011, 2012, or 2013,
the following modifications to this section shall apply in determining
the amount of the credit under subsection (a):
``(1) No credit period required.--The credit shall be
determined without regard to whether the taxable year is in a
credit period and for purposes of applying this section to
taxable years beginning after 2013, no credit period shall be
treated as beginning with a taxable year beginning before 2014.
``(2) Amount of credit.--The amount of the credit determined
under subsection (b) shall be determined--
``(A) by substituting `35 percent (25 percent in the
case of a tax-exempt eligible small employer)' for `50
percent (35 percent in the case of a tax-exempt eligible
small employer)',
``(B) by reference to an eligible small employer's
nonelective contributions for premiums paid for health
insurance coverage (within the meaning of section
9832(b)(1)) of an employee, and
``(C) <> by substituting for
the average premium determined under subsection (b)(2)
the amount the Secretary of Health and Human Services
determines is the average premium for the small group
market in the State in which the employer is offering
health insurance coverage (or for such area within the
State as is specified by the Secretary).
``(3) Contribution arrangement.--An arrangement shall not
fail to meet the requirements of subsection (d)(4) solely
because it provides for the offering of insurance outside of an
Exchange.
``(h) Insurance Definitions.--Any term used in this section which is
also used in the Public Health Service Act or subtitle A of title I of
the Patient Protection and Affordable Care Act shall have the meaning
given such term by such Act or subtitle.
``(i) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the provisions of this section,
including regulations to prevent the avoidance of the 2-year limit on
the credit period through the use of successor entities and the
avoidance of the limitations under subsection (c) through the use of
multiple entities.''.
(b) Credit To Be Part of General Business Credit.--Section 38(b) of
the Internal Revenue Code of 1986 <> (relating to
current year 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 inserting after paragraph (35) the
following:
[[Page 242]]
``(36) the small employer health insurance credit determined
under section 45R.''.
(c) Credit Allowed Against Alternative Minimum Tax.--Section
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified
credits) <> is amended by redesignating clauses (vi),
(vii), and (viii) as clauses (vii), (viii), and (ix), respectively, and
by inserting after clause (v) the following new clause:
``(vi) the credit determined under section
45R,''.
(d) Disallowance of Deduction for Certain Expenses for Which Credit
Allowed.--
(1) In general.--Section 280C of the Internal Revenue Code
of 1986 (relating to disallowance of deduction for certain
expenses for which credit allowed), as amended by section
1401(b), is amended by adding at the end the following new
subsection:
``(h) Credit for Employee Health Insurance Expenses of Small
Employers.--No deduction shall be allowed for that portion of the
premiums for qualified health plans (as defined in section 1301(a) of
the Patient Protection and Affordable Care Act), or for health insurance
coverage in the case of taxable years beginning in 2011, 2012, or 2013,
paid by an employer which is equal to the amount of the credit
determined under section 45R(a) with respect to the premiums.''.
(2) Deduction for expiring credits.--Section 196(c) of such
Code is amended by striking ``and'' at the end of paragraph
(12), by striking the period at the end of paragraph (13) and
inserting ``, and'', and by adding at the end the following new
paragraph:
``(14) the small employer health insurance credit determined
under section 45R(a).''.
(e) Clerical Amendment.--The table of sections for subpart D of part
IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following:
``Sec. 45R. Employee health insurance expenses of small employers.''.
(f) <> Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning
after December 31, 2010.
(2) Minimum tax.--The amendments made by subsection (c)
shall apply to credits determined under section 45R of the
Internal Revenue Code of 1986 in taxable years beginning after
December 31, 2010, and to carrybacks of such credits.
Subtitle F--Shared Responsibility for Health Care
PART I--INDIVIDUAL RESPONSIBILITY
SEC. 1501. <> REQUIREMENT TO MAINTAIN MINIMUM
ESSENTIAL COVERAGE.
(a) Findings.--Congress makes the following findings:
(1) In general.--The individual responsibility requirement
provided for in this section (in this subsection referred to as
the ``requirement'') is commercial and economic in nature, and
substantially affects interstate commerce, as a result of the
effects described in paragraph (2).
[[Page 243]]
(2) Effects on the national economy and interstate
commerce.--The effects described in this paragraph are the
following:
(A) The requirement regulates activity that is
commercial and economic in nature: economic and
financial decisions about how and when health care is
paid for, and when health insurance is purchased.
(B) Health insurance and health care services are a
significant part of the national economy. National
health spending is projected to increase from
$2,500,000,000,000, or 17.6 percent of the economy, in
2009 to $4,700,000,000,000 in 2019. Private health
insurance spending is projected to be $854,000,000,000
in 2009, and pays for medical supplies, drugs, and
equipment that are shipped in interstate commerce. Since
most health insurance is sold by national or regional
health insurance companies, health insurance is sold in
interstate commerce and claims payments flow through
interstate commerce.
(C) The requirement, together with the other
provisions of this Act, will add millions of new
consumers to the health insurance market, increasing the
supply of, and demand for, health care services.
According to the Congressional Budget Office, the
requirement will increase the number and share of
Americans who are insured.
(D) The requirement achieves near-universal coverage
by building upon and strengthening the private employer-
based health insurance system, which covers 176,000,000
Americans nationwide. In Massachusetts, a similar
requirement has strengthened private employer-based
coverage: despite the economic downturn, the number of
workers offered employer-based coverage has actually
increased.
(E) Half of all personal bankruptcies are caused in
part by medical expenses. By significantly increasing
health insurance coverage, the requirement, together
with the other provisions of this Act, will improve
financial security for families.
(F) Under the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health
Service Act (42 U.S.C. 201 et seq.), and this Act, the
Federal Government has a significant role in regulating
health insurance which is in interstate commerce.
(G) Under sections 2704 and 2705 of the Public
Health Service Act (as added by section 1201 of this
Act), if there were no requirement, many individuals
would wait to purchase health insurance until they
needed care. By significantly increasing health
insurance coverage, the requirement, together with the
other provisions of this Act, will minimize this adverse
selection and broaden the health insurance risk pool to
include healthy individuals, which will lower health
insurance premiums. The requirement is essential to
creating effective health insurance markets in which
improved health insurance products that are guaranteed
issue and do not exclude coverage of pre-existing
conditions can be sold.
(H) Administrative costs for private health
insurance, which were $90,000,000,000 in 2006, are 26 to
30 percent of premiums in the current individual and
small group
[[Page 244]]
markets. By significantly increasing health insurance
coverage and the size of purchasing pools, which will
increase economies of scale, the requirement, together
with the other provisions of this Act, will
significantly reduce administrative costs and lower
health insurance premiums. The requirement is essential
to creating effective health insurance markets that do
not require underwriting and eliminate its associated
administrative costs.
(3) Supreme court ruling.--In United States v. South-Eastern
Underwriters Association (322 U.S. 533 (1944)), the Supreme
Court of the United States ruled that insurance is interstate
commerce subject to Federal regulation.
(b) In General.--Subtitle D of the Internal Revenue Code of 1986 is
amended by adding at the end the following new chapter:
``CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE
``Sec. 5000A. Requirement to maintain minimum essential coverage.
``SEC. 5000A. <> REQUIREMENT TO MAINTAIN MINIMUM
ESSENTIAL COVERAGE.
``(a) Requirement To Maintain Minimum Essential Coverage.--An
applicable individual shall for each month beginning after 2013 ensure
that the individual, and any dependent of the individual who is an
applicable individual, is covered under minimum essential coverage for
such month.
``(b) Shared Responsibility Payment.--
``(1) In general.-- <> If an applicable
individual fails to meet the requirement of subsection (a) for 1
or more months during any calendar year beginning after 2013,
then, except as provided in subsection (d), there is hereby
imposed a penalty with respect to the individual in the amount
determined under subsection (c).
``(2) Inclusion with return.--Any penalty imposed by this
section with respect to any month shall be included with a
taxpayer's return under chapter 1 for the taxable year which
includes such month.
``(3) Payment of penalty.--If an individual with respect to
whom a penalty is imposed by this section for any month--
``(A) is a dependent (as defined in section 152) of
another taxpayer for the other taxpayer's taxable year
including such month, such other taxpayer shall be
liable for such penalty, or
``(B) files a joint return for the taxable year
including such month, such individual and the spouse of
such individual shall be jointly liable for such
penalty.
``(c) Amount of Penalty.--
``(1) In general.--The penalty determined under this
subsection for any month with respect to any individual is an
amount equal to \1/12\ of the applicable dollar amount for the
calendar year.
``(2) Dollar limitation.--The amount of the penalty imposed
by this section on any taxpayer for any taxable year with
respect to all individuals for whom the taxpayer is liable under
subsection (b)(3) shall not exceed an amount equal to 300
percent the applicable dollar amount (determined without
[[Page 245]]
regard to paragraph (3)(C)) for the calendar year with or within
which the taxable year ends.
``(3) Applicable dollar amount.--For purposes of paragraph
(1)--
``(A) In general.--Except as provided in
subparagraphs (B) and (C), the applicable dollar amount
is $750.
``(B) Phase in.--The applicable dollar amount is $95
for 2014 and $350 for 2015.
``(C) Special rule for individuals under age 18.--If
an applicable individual has not attained the age of 18
as of the beginning of a month, the applicable dollar
amount with respect to such individual for the month
shall be equal to one-half of the applicable dollar
amount for the calendar year in which the month occurs.
``(D) Indexing of amount.--In the case of any
calendar year beginning after 2016, the applicable
dollar amount shall be equal to $750, increased by an
amount equal to--
``(i) $750, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the calendar
year, determined by substituting `calendar year
2015' for `calendar year 1992' in subparagraph (B)
thereof.
If the amount of any increase under clause (i) is not a
multiple of $50, such increase shall be rounded to the
next lowest multiple of $50.
``(4) Terms relating to income and families.--For purposes
of this section--
``(A) Family size.--The family size involved with
respect to any taxpayer shall be equal to the number of
individuals for whom the taxpayer is allowed a deduction
under section 151 (relating to allowance of deduction
for personal exemptions) for the taxable year.
``(B) Household income.--The term `household income'
means, with respect to any taxpayer for any taxable
year, an amount equal to the sum of--
``(i) the modified gross income of the
taxpayer, plus
``(ii) the aggregate modified gross incomes of
all other individuals who--
``(I) were taken into account in
determining the taxpayer's family size
under paragraph (1), and
``(II) were required to file a
return of tax imposed by section 1 for
the taxable year.
``(C) Modified gross income.--The term `modified
gross income' means gross income--
``(i) decreased by the amount of any deduction
allowable under paragraph (1), (3), (4), or (10)
of section 62(a),
``(ii) increased by the amount of interest
received or accrued during the taxable year which
is exempt from tax imposed by this chapter, and
``(iii) determined without regard to sections
911, 931, and 933.
``(D) Poverty line.--
[[Page 246]]
``(i) In general.--The term `poverty line' has
the meaning given that term in section 2110(c)(5)
of the Social Security Act (42 U.S.C.
1397jj(c)(5)).
``(ii) Poverty line used.--In the case of any
taxable year ending with or within a calendar
year, the poverty line used shall be the most
recently published poverty line as of the 1st day
of such calendar year.
``(d) Applicable Individual.--For purposes of this section--
``(1) In general.--The term `applicable individual' means,
with respect to any month, an individual other than an
individual described in paragraph (2), (3), or (4).
``(2) Religious exemptions.--
``(A) Religious conscience exemption.--Such term
shall not include any individual for any month if such
individual has in effect an exemption under section
1311(d)(4)(H) of the Patient Protection and Affordable
Care Act 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) Health care sharing ministry.--
``(i) In general.--Such term shall not include
any individual for any month if such individual is
a member of a health care sharing ministry for the
month.
``(ii) Health care sharing ministry.--The term
`health care sharing ministry' means an
organization--
``(I) which is described in section
501(c)(3) and is exempt from taxation
under section 501(a),
``(II) members of which share a
common set of ethical or religious
beliefs and share medical expenses among
members in accordance with those beliefs
and without regard to the State in which
a member resides or is employed,
``(III) members of which retain
membership even after they develop a
medical condition,
``(IV) which (or a predecessor of
which) has been in existence at all
times since December 31, 1999, and
medical expenses of its members have
been shared continuously and without
interruption since at least December 31,
1999, and
``(V) which conducts an annual audit
which is performed by an independent
certified public accounting firm in
accordance with generally accepted
accounting principles and which is made
available to the public upon request.
``(3) Individuals not lawfully present.--Such term shall not
include an individual for any month if for the month the
individual is not a citizen or national of the United States or
an alien lawfully present in the United States.
``(4) Incarcerated individuals.--Such term shall not include
an individual for any month if for the month the individual is
incarcerated, other than incarceration pending the disposition
of charges.
``(e) Exemptions.--No penalty shall be imposed under subsection (a)
with respect to--
``(1) Individuals who cannot afford coverage.--
[[Page 247]]
``(A) In general.--Any applicable individual for any
month if the applicable individual's required
contribution (determined on an annual basis) for
coverage for the month exceeds 8 percent of such
individual's household income for the taxable year
described in section 1412(b)(1)(B) of the Patient
Protection and Affordable Care Act. For purposes of
applying this subparagraph, the taxpayer's household
income shall be increased by any exclusion from gross
income for any portion of the required contribution made
through a salary reduction arrangement.
``(B) <> Required
contribution.--For purposes of this paragraph, the term
`required contribution' means--
``(i) in the case of an individual eligible to
purchase minimum essential coverage consisting of
coverage through an eligible-employer-sponsored
plan, the portion of the annual premium which
would be paid by the individual (without regard to
whether paid through salary reduction or
otherwise) for self-only coverage, or
``(ii) in the case of an individual eligible
only to purchase minimum essential coverage
described in subsection (f)(1)(C), the annual
premium for the lowest cost bronze plan available
in the individual market through the Exchange in
the State in the rating area in which the
individual resides (without regard to whether the
individual purchased a qualified health plan
through the Exchange), reduced by the amount of
the credit allowable under section 36B for the
taxable year (determined as if the individual was
covered by a qualified health plan offered through
the Exchange for the entire taxable year).
``(C) Special rules for individuals related to
employees.--For purposes of subparagraph (B)(i), if an
applicable individual is eligible for minimum essential
coverage through an employer by reason of a relationship
to an employee, the determination shall be made by
reference to the affordability of the coverage to the
employee.
``(D) <>
Indexing.--In the case of plan years beginning in any
calendar year after 2014, subparagraph (A) shall be
applied by substituting for `8 percent' the percentage
the Secretary of Health and Human Services determines
reflects the excess of the rate of premium growth
between the preceding calendar year and 2013 over the
rate of income growth for such period.
``(2) Taxpayers with income under 100 percent of poverty
line.--Any applicable individual for any month during a calendar
year if the individual's household income for the taxable year
described in section 1412(b)(1)(B) of the Patient Protection and
Affordable Care Act is less than 100 percent of the poverty line
for the size of the family involved (determined in the same
manner as under subsection (b)(4)).
``(3) Members of indian tribes.--Any applicable individual
for any month during which the individual is a member of an
Indian tribe (as defined in section 45A(c)(6)).
``(4) Months during short coverage gaps.--
``(A) In general.--Any month the last day of which
occurred during a period in which the applicable
individual
[[Page 248]]
was not covered by minimum essential coverage for a
continuous period of less than 3 months.
``(B) <> Special rules.--For
purposes of applying this paragraph--
``(i) the length of a continuous period shall
be determined without regard to the calendar years
in which months in such period occur,
``(ii) if a continuous period is greater than
the period allowed under subparagraph (A), no
exception shall be provided under this paragraph
for any month in the period, and
``(iii) if there is more than 1 continuous
period described in subparagraph (A) covering
months in a calendar year, the exception provided
by this paragraph shall only apply to months in
the first of such periods.
The Secretary shall prescribe rules for the collection
of the penalty imposed by this section in cases where
continuous periods include months in more than 1 taxable
year.
``(5) Hardships.--Any applicable individual who for any
month is determined by the Secretary of Health and Human
Services under section 1311(d)(4)(H) to have suffered a hardship
with respect to the capability to obtain coverage under a
qualified health plan.
``(f) Minimum Essential Coverage.--For purposes of this section--
``(1) <> In general.--The term `minimum
essential coverage' means any of the following:
``(A) Government sponsored programs.--Coverage
under--
``(i) the Medicare program under part A of
title XVIII of the Social Security Act,
``(ii) the Medicaid program under title XIX of
the Social Security Act,
``(iii) the CHIP program under title XXI of
the Social Security Act,
``(iv) the TRICARE for Life program,
``(v) the veteran's health care program under
chapter 17 of title 38, United States Code, or
``(vi) a health plan under section 2504(e) of
title 22, United States Code (relating to Peace
Corps volunteers).
``(B) Employer-sponsored plan.--Coverage under an
eligible employer-sponsored plan.
``(C) Plans in the individual market.--Coverage
under a health plan offered in the individual market
within a State.
``(D) Grandfathered health plan.--Coverage under a
grandfathered health plan.
``(E) Other coverage.--Such other health benefits
coverage, such as a State health benefits risk pool, as
the Secretary of Health and Human Services, in
coordination with the Secretary, recognizes for purposes
of this subsection.
``(2) Eligible employer-sponsored plan.--The term `eligible
employer-sponsored plan' means, with respect to any
[[Page 249]]
employee, a group health plan or group health insurance coverage
offered by an employer to the employee which is--
``(A) a governmental plan (within the meaning of
section 2791(d)(8) of the Public Health Service Act), or
``(B) any other plan or coverage offered in the
small or large group market within a State.
Such term shall include a grandfathered health plan described in
paragraph (1)(D) offered in a group market.
``(3) Excepted benefits not treated as minimum essential
coverage.--The term `minimum essential coverage' shall not
include health insurance coverage which consists of coverage of
excepted benefits--
``(A) described in paragraph (1) of subsection (c)
of section 2791 of the Public Health Service Act; 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.
``(4) Individuals residing outside united states or
residents of territories.--Any applicable individual shall be
treated as having minimum essential coverage for any month--
``(A) if such month occurs during any period
described in subparagraph (A) or (B) of section
911(d)(1) which is applicable to the individual, or
``(B) if such individual is a bona fide resident of
any possession of the United States (as determined under
section 937(a)) for such month.
``(5) Insurance-related terms.--Any term used in this
section which is also used in title I of the Patient Protection
and Affordable Care Act shall have the same meaning as when used
in such title.
``(g) Administration and Procedure.--
``(1) In general.--The penalty provided by this section
shall be paid upon notice and demand by the Secretary, and
except as provided in paragraph (2), shall be assessed and
collected in the same manner as an assessable penalty under
subchapter B of chapter 68.
``(2) Special rules.--Notwithstanding any other provision of
law--
``(A) Waiver of criminal penalties.--In the case of
any failure by a taxpayer to timely pay any penalty
imposed by this section, such taxpayer shall not be
subject to any criminal prosecution or penalty with
respect to such failure.
``(B) Limitations on liens and levies.--The
Secretary shall not--
``(i) file notice of lien with respect to any
property of a taxpayer by reason of any failure to
pay the penalty imposed by this section, or
``(ii) levy on any such property with respect
to such failure.''.
(c) Clerical Amendment.--The table of chapters for subtitle D of the
Internal Revenue Code of 1986 is amended by inserting after the item
relating to chapter 47 the following new item:
``Chapter 48--Maintenance of Minimum Essential Coverage.''.
(d) <> Effective Date.--The amendments
made by this section shall apply to taxable years ending after December
31, 2013.
[[Page 250]]
SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE.
(a) In General.--Part III of subchapter A of chapter 61 of the
Internal Revenue Code of 1986 is amended by inserting after subpart C
the following new subpart:
``Subpart D--Information Regarding Health Insurance Coverage
``Sec. 6055. Reporting of health insurance coverage.
``SEC. 6055. <> REPORTING OF HEALTH INSURANCE
COVERAGE.
``(a) In General.--Every person who provides minimum essential
coverage to an individual during a calendar year shall, at such time as
the Secretary may prescribe, make a return described in subsection (b).
``(b) Form and Manner of Return.--
``(1) In general.--A return is described in this subsection
if such return--
``(A) is in such form as the Secretary may
prescribe, and
``(B) contains--
``(i) the name, address and TIN of the primary
insured and the name and TIN of each other
individual obtaining coverage under the policy,
``(ii) the dates during which such individual
was covered under minimum essential coverage
during the calendar year,
``(iii) in the case of minimum essential
coverage which consists of health insurance
coverage, information concerning--
``(I) whether or not the coverage is
a qualified health plan offered through
an Exchange established under section
1311 of the Patient Protection and
Affordable Care Act, and
``(II) in the case of a qualified
health plan, the amount (if any) of any
advance payment under section 1412 of
the Patient Protection and Affordable
Care Act of any cost-sharing reduction
under section 1402 of such Act or of any
premium tax credit under section 36B
with respect to such coverage, and
``(iv) such other information as the Secretary
may require.
``(2) Information relating to employer-provided coverage.--
If minimum essential coverage provided to an individual under
subsection (a) consists of health insurance coverage of a health
insurance issuer provided through a group health plan of an
employer, a return described in this subsection shall include--
``(A) the name, address, and employer identification
number of the employer maintaining the plan,
``(B) the portion of the premium (if any) required
to be paid by the employer, and
``(C) if the health insurance coverage is a
qualified health plan in the small group market offered
through an Exchange, such other information as the
Secretary may require for administration of the credit
under section 45R
[[Page 251]]
(relating to credit for employee health insurance
expenses of small employers).
``(c) Statements To Be Furnished to Individuals With Respect to Whom
Information Is Reported.--
``(1) In general.--Every person required to make a return
under subsection (a) shall furnish to each individual whose name
is required to be set forth in such return a written statement
showing--
``(A) the name and address of the person required to
make such return and the phone number of the information
contact for such person, and
``(B) the information required to be shown on the
return with respect to such individual.
``(2) Time for furnishing statements.--The written statement
required under paragraph (1) shall be furnished on or before
January 31 of the year following the calendar year for which the
return under subsection (a) was 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.
``(e) Minimum Essential Coverage.--For purposes of this section, the
term `minimum essential coverage' has the meaning given such term by
section 5000A(f).''.
(b) Assessable Penalties.--
(1) Subparagraph (B) of section 6724(d)(1) of the Internal
Revenue Code of 1986 <> (relating to
definitions) 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 inserting after clause (xxiii) the
following new clause:
``(xxiv) section 6055 (relating to returns
relating to information regarding health insurance
coverage), and''.
(2) 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 6055(c) (relating to statements
relating to information regarding health insurance
coverage).''.
(c) Notification of Nonenrollment.-- <> Not later than June 30 of each year, the Secretary of the
Treasury, acting through the Internal Revenue Service and in
consultation with the Secretary of Health and Human Services, shall send
a notification to each individual who files an individual income tax
return and who is not enrolled in minimum essential coverage (as defined
in section 5000A of the Internal Revenue Code of 1986). Such
notification shall contain information on the services available through
the Exchange operating in the State in which such individual resides.
(d) Conforming Amendment.--The table of subparts for part III of
subchapter A of chapter 61 of such Code is amended by inserting after
the item relating to subpart C the following new item:
[[Page 252]]
``subpart d--information regarding health insurance coverage''.
(e) <> Effective Date.--The amendments
made by this section shall apply to calendar years beginning after 2013.
PART II--EMPLOYER RESPONSIBILITIES
SEC. 1511. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EMPLOYERS.
The Fair Labor Standards Act of 1938 is amended by inserting after
section 18 (29 U.S.C. 218) the following:
``SEC. 18A. <> AUTOMATIC ENROLLMENT FOR EMPLOYEES
OF LARGE EMPLOYERS.
``In accordance with regulations promulgated by the Secretary, an
employer to which this Act applies that has more than 200 full-time
employees and that offers employees enrollment in 1 or more health
benefits plans shall automatically enroll new full-time employees in one
of the plans offered (subject to any waiting period authorized by law)
and to continue the enrollment of current employees in a health benefits
plan offered through the employer. Any automatic enrollment program
shall include adequate notice and the opportunity for an employee to opt
out of any coverage the individual or employee were automatically
enrolled in. Nothing in this section shall be construed to supersede any
State law which establishes, implements, or continues in effect any
standard or requirement relating to employers in connection with payroll
except to the extent that such standard or requirement prevents an
employer from instituting the automatic enrollment program under this
section.''.
SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COVERAGE OPTIONS.
The Fair Labor Standards Act of 1938 is amended by inserting after
section 18A (as added by section 1513) the following:
``SEC. 18B. <> NOTICE TO EMPLOYEES.
``(a) In General.-- <> In accordance with
regulations promulgated by the Secretary, an employer to which this Act
applies, shall provide to each employee at the time of hiring (or with
respect to current employees, not later than March 1, 2013), written
notice--
``(1) informing the employee of the existence of an
Exchange, including a description of the services provided by
such Exchange, and the manner in which the employee may contact
the Exchange to request assistance;
``(2) if the employer plan's share of the total allowed
costs of benefits provided under the plan is less than 60
percent of such costs, that the employee may be eligible for a
premium tax credit under section 36B of the Internal Revenue
Code of 1986 and a cost sharing reduction under section 1402 of
the Patient Protection and Affordable Care Act if the employee
purchases a qualified health plan through the Exchange; and
``(3) if the employee purchases a qualified health plan
through the Exchange, the employee will lose the employer
contribution (if any) to any health benefits plan offered by the
employer and that all or a portion of such contribution may be
excludable from income for Federal income tax purposes.
[[Page 253]]
``(b) Effective Date.--Subsection (a) shall take effect with respect
to employers in a State beginning on March 1, 2013.''.
SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is
amended by adding at the end the following:
``SEC. 4980H. <> SHARED RESPONSIBILITY FOR
EMPLOYERS REGARDING HEALTH COVERAGE.
``(a) Large Employers Not Offering Health Coverage.--If--
``(1) any applicable large employer fails to offer to its
full-time employees (and their dependents) the opportunity to
enroll in minimum essential coverage under an eligible employer-
sponsored plan (as defined in section 5000A(f)(2)) for any
month, and
``(2) at least one full-time employee of the applicable
large employer has been certified to the employer under section
1411 of the Patient Protection and Affordable Care Act as having
enrolled for such month in a qualified health plan with respect
to which an applicable premium tax credit or cost-sharing
reduction is allowed or paid with respect to the employee,
then there is hereby imposed on the employer an assessable payment equal
to the product of the applicable payment amount and the number of
individuals employed by the employer as full-time employees during such
month.
``(b) Large Employers With Waiting Periods Exceeding 30 Days.--
``(1) In general.--In the case of any applicable large
employer which requires an extended waiting period to enroll in
any minimum essential coverage under an employer-sponsored plan
(as defined in section 5000A(f)(2)), there is hereby imposed on
the employer an assessable payment, in the amount specified in
paragraph (2), for each full-time employee of the employer to
whom the extended waiting period applies.
``(2) Amount.--For purposes of paragraph (1), the amount
specified in this paragraph for a full-time employee is--
``(A) in the case of an extended waiting period
which exceeds 30 days but does not exceed 60 days, $400,
and
``(B) in the case of an extended waiting period
which exceeds 60 days, $600.
``(3) Extended waiting period.--The term `extended waiting
period' means any waiting period (as defined in section
2701(b)(4) of the Public Health Service Act) which exceeds 30
days.
``(c) Large Employers Offering Coverage With Employees Who Qualify
for Premium Tax Credits or Cost-sharing Reductions.--
``(1) In general.--If--
``(A) an applicable large employer offers to its
full-time employees (and their dependents) the
opportunity to enroll in minimum essential coverage
under an eligible employer-sponsored plan (as defined in
section 5000A(f)(2)) for any month, and
``(B) 1 or more full-time employees of the
applicable large employer has been certified to the
employer under section 1411 of the Patient Protection
and Affordable Care Act as having enrolled for such
month in a qualified health
[[Page 254]]
plan with respect to which an applicable premium tax
credit or cost-sharing reduction is allowed or paid with
respect to the employee,
then there is hereby imposed on the employer an assessable
payment equal to the product of the number of full-time
employees of the applicable large employer described in
subparagraph (B) for such month and 400 percent of the
applicable payment amount.
``(2) Overall limitation.--The aggregate amount of tax
determined under paragraph (1) with respect to all employees of
an applicable large employer for any month shall not exceed the
product of the applicable payment amount and the number of
individuals employed by the employer as full-time employees
during such month.
``(d) Definitions and Special Rules.--For purposes of this section--
``(1) Applicable payment amount.--The term `applicable
payment amount' means, with respect to any month, \1/12\ of
$750.
``(2) Applicable large employer.--
``(A) In general.--The term `applicable large
employer' means, with respect to a calendar year, an
employer who employed an average of at least 50 full-
time employees on business days during the preceding
calendar year.
``(B) Exemption for certain employers.--
``(i) In general.--An employer shall not be
considered to employ more than 50 full-time
employees if--
``(I) the employer's workforce
exceeds 50 full-time employees for 120
days or fewer during the calendar year,
and
``(II) the employees in excess of 50
employed during such 120-day period were
seasonal workers.
``(ii) Definition of seasonal workers.--The
term `seasonal worker' means a worker who performs
labor or services on a seasonal basis as defined
by the Secretary of Labor, including workers
covered by section 500.20(s)(1) of title 29, Code
of Federal Regulations and retail workers employed
exclusively during holiday seasons.
``(C) Rules for determining employer size.--For
purposes of this paragraph--
``(i) Application of aggregation rule for
employers.--All persons 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 as 1 employer.
``(ii) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the preceding calendar year,
the determination of whether such employer is an
applicable large employer shall be based on the
average number of employees that it is reasonably
expected such employer will employ on business
days in the current calendar year.
``(iii) Predecessors.--Any reference in this
subsection to an employer shall include a
reference to any predecessor of such employer.
[[Page 255]]
``(3) Applicable premium tax credit and cost-sharing
reduction.--The term `applicable premium tax credit and cost-
sharing reduction' means--
``(A) any premium tax credit allowed under section
36B,
``(B) any cost-sharing reduction under section 1402
of the Patient Protection and Affordable Care Act, and
``(C) any advance payment of such credit or
reduction under section 1412 of such Act.
``(4) Full-time employee.--
``(A) In general.--The term `full-time employee'
means an employee who is employed on average at least 30
hours of service per week.
``(B) Hours of service.--
<> The Secretary, in
consultation with the Secretary of Labor, shall
prescribe such regulations, rules, and guidance as may
be necessary to determine the hours of service of an
employee, including rules for the application of this
paragraph to employees who are not compensated on an
hourly basis.
``(5) Inflation adjustment.--
``(A) In general.--In the case of any calendar year
after 2014, each of the dollar amounts in subsection
(b)(2) and (d)(1) shall be increased by an amount equal
to the product of--
``(i) such dollar amount, and
``(ii) the premium adjustment percentage (as
defined in section 1302(c)(4) of the Patient
Protection and Affordable Care Act) for the
calendar year.
``(B) Rounding.--If the amount of any increase under
subparagraph (A) is not a multiple of $10, such increase
shall be rounded to the next lowest multiple of $10.
``(6) Other definitions.--Any term used in this section
which is also used in the Patient Protection and Affordable Care
Act shall have the same meaning as when used in such Act.
``(7) Tax nondeductible.--For denial of deduction for the
tax imposed by this section, see section 275(a)(6).
``(e) Administration and Procedure.--
``(1) In general.--Any assessable payment provided by this
section shall be paid upon notice and demand by the Secretary,
and shall be assessed and collected in the same manner as an
assessable penalty under subchapter B of chapter 68.
``(2) Time for payment.--The Secretary may provide for the
payment of any assessable payment provided by this section on an
annual, monthly, or other periodic basis as the Secretary may
prescribe.
``(3) Coordination with credits, etc..--
<> The Secretary shall prescribe
rules, regulations, or guidance for the repayment of any
assessable payment (including interest) if such payment is based
on the allowance or payment of an applicable premium tax credit
or cost-sharing reduction with respect to an employee, such
allowance or payment is subsequently disallowed, and the
assessable payment would not have been required to be made but
for such allowance or payment.''.
[[Page 256]]
(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. Shared responsibility for employers regarding health
coverage.''.
(c) Study and Report of Effect of Tax on Workers' Wages.--
(1) In general.--The Secretary of Labor shall conduct a
study to determine whether employees' wages are reduced by
reason of the application of the assessable payments under
section 4980H of the Internal Revenue Code of 1986 (as added by
the amendments made by this section). <>
The Secretary shall make such determination on the basis of the
National Compensation Survey published by the Bureau of Labor
Statistics.
(2) Report.--The Secretary shall report the results of the
study under paragraph (1) to the Committee on Ways and Means of
the House of Representatives and to the Committee on Finance of
the Senate.
(d) <> Effective Date.--The amendments
made by this section shall apply to months beginning after December 31,
2013.
SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE.
(a) In General.--Subpart D of part III of subchapter A of chapter 61
of the Internal Revenue Code of 1986, as added by section 1502, is
amended by inserting after section 6055 the following new section:
``SEC. 6056. <> LARGE EMPLOYERS REQUIRED TO REPORT
ON HEALTH INSURANCE COVERAGE.
``(a) In General.--Every applicable large employer required to meet
the requirements of section 4980H with respect to its full-time
employees during a calendar year shall, at such time as the Secretary
may prescribe, make a return described in subsection (b).
``(b) Form and Manner of Return.--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, 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 minimum essential coverage
under an eligible employer-sponsored plan (as defined in
section 5000A(f)(2)),
``(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 length of any waiting period (as
defined in section 2701(b)(4) of the Public Health
Service Act) with respect to such coverage,
``(ii) the months during the calendar year for
which coverage under the plan was available,
``(iii) the monthly premium for the lowest
cost option in each of the enrollment categories
under the plan, and
``(iv) the applicable large employer's share
of the total allowed costs of benefits provided
under the plan,
[[Page 257]]
``(D) the number of full-time employees for each
month during the calendar year,
``(E) 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 health benefits plans, and
``(F) such other information as the Secretary may
require.
``(c) Statements To Be Furnished to Individuals With Respect to Whom
Information Is Reported.--
``(1) In general.--Every person required to make a return
under subsection (a) shall furnish to each full-time employee
whose name is required to be set forth in such return under
subsection (b)(2)(E) a written statement showing--
``(A) the name and address of the person required to
make such return and the phone number of the information
contact for such person, and
``(B) the information required to be shown on the
return with respect to such individual.
``(2) Time for furnishing statements.--The written statement
required under paragraph (1) shall be furnished on or before
January 31 of the year following the calendar year for which the
return under subsection (a) was required to be made.
``(d) Coordination With Other Requirements.--To the maximum extent
feasible, the Secretary may provide that--
``(1) any return or statement required to be provided under
this section may be provided as part of any return or statement
required under section 6051 or 6055, and
``(2) in the case of an applicable large employer offering
health insurance coverage of a health insurance issuer, the
employer may enter into an agreement with the issuer to include
information required under this section with the return and
statement required to be provided by the issuer under section
6055.
``(e) Coverage Provided by Governmental Units.--In the case of any
applicable large employer which is a governmental unit or any agency or
instrumentality thereof, the person appropriately designated for
purposes of this section shall make the returns and statements required
by this section.
``(f) Definitions.--For purposes of this section, any term used in
this section which is also used in section 4980H shall have the meaning
given such term by section 4980H.''.
(b) Assessable Penalties.--
(1) Subparagraph (B) of section 6724(d)(1) of the Internal
Revenue Code of 1986 (relating to definitions), as amended by
section 1502, <> is amended by striking
``or'' at the end of clause (xxiii), by striking ``and'' at the
end of clause (xxiv) and inserting ``or'', and by inserting
after clause (xxiv) the following new clause:
``(xxv) section 6056 (relating to returns
relating to large employers required to report on
health insurance coverage), and''.
(2) Paragraph (2) of section 6724(d) of such Code, as so
amended, is amended by striking ``or'' at the end of
subparagraph (FF), by striking the period at the end of
subparagraph
[[Page 258]]
(GG) and inserting ``, or'' and by inserting after subparagraph
(GG) the following new subparagraph:
``(HH) section 6056(c) (relating to statements
relating to large employers required to report on health
insurance coverage).''.
(c) Conforming Amendment.--The table of sections for subpart D of
part III of subchapter A of chapter 61 of such Code, as added by section
1502, is amended by adding at the end the following new item:
``Sec. 6056. Large employers required to report on health insurance
coverage.''.
(d) <> Effective Date.--The amendments
made by this section shall apply to periods beginning after December 31,
2013.
SEC. 1515. OFFERING OF EXCHANGE-PARTICIPATING QUALIFIED HEALTH 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 qualified health plans
not qualified.--
``(A) In general.--The term `qualified benefit'
shall not include any qualified health plan (as defined
in section 1301(a) of the Patient Protection and
Affordable Care Act) offered through an Exchange
established under section 1311 of such Act.
``(B) Exception for exchange-eligible employers.--
Subparagraph (A) shall not apply with respect to any
employee if such employee's employer is a qualified
employer (as defined in section 1312(f)(2) of the
Patient Protection and Affordable Care Act) offering the
employee the opportunity to enroll through such an
Exchange in a qualified health plan in a group
market.''.
(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, 2013.
Subtitle G--Miscellaneous Provisions
SEC. 1551. <> DEFINITIONS.
Unless specifically provided for otherwise, the definitions
contained in section 2791 of the Public Health Service Act (42 U.S.C.
300gg-91) shall apply with respect to this title.
SEC. 1552. <> TRANSPARENCY IN GOVERNMENT.
<> Not later than 30 days after the
date of enactment of this Act, the Secretary of Health and Human
Services shall publish on the Internet website of the Department of
Health and Human Services, a list of all of the authorities provided to
the Secretary under this Act (and the amendments made by this Act).
[[Page 259]]
SEC. 1553. <> PROHIBITION AGAINST DISCRIMINATION
ON ASSISTED SUICIDE.
(a) In General.--The Federal Government, and any State or local
government or health care provider that receives Federal financial
assistance under this Act (or under an amendment made by this Act) or
any health plan created under this Act (or under an amendment made by
this Act), may not subject an individual or institutional health care
entity to discrimination on the basis that the entity does not provide
any health care item or service furnished for the purpose of causing, or
for the purpose of assisting in causing, the death of any individual,
such as by assisted suicide, euthanasia, or mercy killing.
(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) Construction and Treatment of Certain Services.--Nothing in
subsection (a) shall be construed to apply to, or to affect, any
limitation relating to--
(1) the withholding or withdrawing of medical treatment or
medical care;
(2) the withholding or withdrawing of nutrition or
hydration;
(3) <> abortion; or
(4) the use of 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.
(d) 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.
SEC. 1554. <> ACCESS TO THERAPIES.
Notwithstanding any other provision of this Act, the Secretary of
Health and Human Services shall not promulgate any regulation that--
(1) creates any unreasonable barriers to the ability of
individuals to obtain appropriate medical care;
(2) impedes timely access to health care services;
(3) interferes with communications regarding a full range of
treatment options between the patient and the provider;
(4) restricts the ability of health care providers to
provide full disclosure of all relevant information to patients
making health care decisions;
(5) violates the principles of informed consent and the
ethical standards of health care professionals; or
(6) limits the availability of health care treatment for the
full duration of a patient's medical needs.
[[Page 260]]
SEC. 1555. <> FREEDOM NOT TO PARTICIPATE IN
FEDERAL HEALTH INSURANCE PROGRAMS.
No individual, company, business, nonprofit entity, or health
insurance issuer offering group or individual health insurance coverage
shall be required to participate in any Federal health insurance program
created under this Act (or any amendments made by this Act), or in any
Federal health insurance program expanded by this Act (or any such
amendments), and there shall be no penalty or fine imposed upon any such
issuer for choosing not to participate in such programs.
SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS.
(a) Rebuttable Presumption.--Section 411(c)(4) of the Black Lung
Benefits Act (30 U.S.C. 921(c)(4)) is amended by striking the last
sentence.
(b) Continuation of Benefits.--Section 422(l) of the Black Lung
Benefits Act (30 U.S.C. 932(l)) is amended by striking ``, except with
respect to a claim filed under this part on or after the effective date
of the Black Lung Benefits Amendments of 1981''.
(c) <> Effective Date.--The
amendments made by this section shall apply with respect to claims filed
under part B or part C of the Black Lung Benefits Act (30 U.S.C. 921 et
seq., 931 et seq.) after January 1, 2005, that are pending on or after
the date of enactment of this Act.
SEC. 1557. <> NONDISCRIMINATION.
(a) In General.--Except as otherwise provided for in this title (or
an amendment made by this title), an individual shall not, on the ground
prohibited under title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d et seq.), title IX of the Education Amendments of 1972 (20 U.S.C.
1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 6101 et
seq.), or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794),
be excluded from participation in, be denied the benefits of, or be
subjected to discrimination under, any health program or activity, any
part of which is receiving Federal financial assistance, including
credits, subsidies, or contracts of insurance, or under any program or
activity that is administered by an Executive Agency or any entity
established under this title (or amendments). <>
The enforcement mechanisms provided for and available under such title
VI, title IX, section 504, or such Age Discrimination Act shall apply
for purposes of violations of this subsection.
(b) Continued Application of Laws.--Nothing in this title (or an
amendment made by this title) shall be construed to invalidate or limit
the rights, remedies, procedures, or legal standards available to
individuals aggrieved under title VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), title VII of the Civil Rights Act of 1964 (42
U.S.C. 2000e et seq.), title IX of the Education Amendments of 1972 (20
U.S.C. 1681 et seq.), section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794), or the Age Discrimination Act of 1975 (42 U.S.C. 611 et
seq.), or to supersede State laws that provide additional protections
against discrimination on any basis described in subsection (a).
(c) Regulations.--The Secretary may promulgate regulations to
implement this section.
[[Page 261]]
SEC. 1558. PROTECTIONS FOR EMPLOYEES.
The Fair Labor Standards Act of 1938 is amended by inserting after
section 18B (as added by section 1512) the following:
``SEC. 18C. <> PROTECTIONS FOR EMPLOYEES.
``(a) Prohibition.--No employer shall discharge or in any manner
discriminate against any employee with respect to his or her
compensation, terms, conditions, or other privileges of employment
because the employee (or an individual acting at the request of the
employee) has--
``(1) received a credit under section 36B of the Internal
Revenue Code of 1986 or a subsidy under section 1402 of this
Act;
``(2) 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 title (or an amendment made by this title);
``(3) testified or is about to testify in a proceeding
concerning such violation;
``(4) assisted or participated, or is about to assist or
participate, in such a proceeding; or
``(5) 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 title (or amendment), or any order, rule,
regulation, standard, or ban under this title (or amendment).
``(b) Complaint Procedure.--
``(1) In general.--An employee who believes that he or she
has been discharged or otherwise discriminated against by any
employer in violation of this section may seek relief in
accordance with the procedures, notifications, burdens of proof,
remedies, and statutes of limitation set forth in section
2087(b) of title 15, United States Code.
``(2) No limitation on rights.--Nothing in this section
shall be deemed to diminish the rights, privileges, or remedies
of any employee under any Federal or State law or under any
collective bargaining agreement. The rights and remedies in this
section may not be waived by any agreement, policy, form, or
condition of employment.''.
SEC. 1559. <> OVERSIGHT.
The Inspector General of the Department of Health and Human Services
shall have oversight authority with respect to the administration and
implementation of this title as it relates to such Department.
SEC. 1560. <> RULES OF CONSTRUCTION.
(a) No Effect on Antitrust Laws.--Nothing in this title (or an
amendment made by this title) shall be construed to modify, impair, or
supersede the operation of any of the antitrust laws. For the purposes
of this section, the term ``antitrust laws'' has the meaning given such
term 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.
[[Page 262]]
(b) Rule of Construction Regarding Hawaii's Prepaid Health Care
Act.--Nothing in this title (or an amendment made by this title) shall
be construed to modify or limit the application of the exemption for
Hawaii's 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)).
(c) Student Health Insurance Plans.--Nothing in this title (or an
amendment made by this title) shall be construed to prohibit an
institution of higher education (as such term is defined for purposes of
the Higher Education Act of 1965) from offering a student health
insurance plan, to the extent that such requirement is otherwise
permitted under applicable Federal, State or local law.
(d) No Effect on Existing Requirements.--Nothing in this title (or
an amendment made by this title, unless specified by direct statutory
reference) shall be construed to modify any existing Federal requirement
concerning the State agency responsible for determining eligibility for
programs identified in section 1413.
SEC. 1561. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND
PROTOCOLS.
Title XXX of the Public Health Service Act (42 U.S.C. 300jj et seq.)
is amended by adding at the end the following:
``Subtitle C--Other Provisions
``SEC. 3021. <> HEALTH INFORMATION TECHNOLOGY
ENROLLMENT STANDARDS AND PROTOCOLS.
``(a) In General.--
``(1) Standards and protocols.--
<