Patient Protection and Affordable Care Act Text

Patient Protection and Affordable Care Act Text

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Patient Protection and Affordable Care Act Text

Full Text of the Patient Protection and Affordable Care Act

H. R. 3590

One Hundred Eleventh Congress

of the

United States of America

A T  T H E  S E C O N D  S E S S I O N

Begun and held at the City of Washington on Tuesday,

the fifth day of January, two thousand and ten

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. H. R. 3590—2

‘‘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. H. R. 3590—3

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. H. R. 3590—4

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. H. R. 3590—5

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. H. R. 3590—6

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. H. R. 3590—7

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. H. R. 3590—8

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. H. R. 3590—9

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. H. R. 3590—10

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. H. R. 3590—11

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. H. R. 3590—12

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: H. R. 3590—13

‘‘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 H. R. 3590—14

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: H. R. 3590—15

‘‘(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 H. R. 3590—16

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. H. R. 3590—17

‘‘(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.— H. R. 3590—18

‘‘(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 H. R. 3590—19

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; H. R. 3590—20

‘‘(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. H. R. 3590—21

‘‘(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 H. R. 3590—22

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. H. R. 3590—23

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); H. R. 3590—24

(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 H. R. 3590—25

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, H. R. 3590—26

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 H. R. 3590—27

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). H. R. 3590—28

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.— H. R. 3590—29

(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: H. R. 3590—30

‘‘(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 H. R. 3590—31

‘‘(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 H. R. 3590—32

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. H. R. 3590—33

‘‘(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 H. R. 3590—34

‘‘(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 H. R. 3590—35

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; H. R. 3590—36

(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)— H. R. 3590—37

(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) H. R. 3590—38

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 H. R. 3590—39

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 H. R. 3590—40

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. H. R. 3590—41

‘‘(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— H. R. 3590—42

‘‘(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. H. R. 3590—43

‘‘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). H. R. 3590—44

(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; H. R. 3590—45

(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. H. R. 3590—46

(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 H. R. 3590—47

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— H. R. 3590—48

(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. H. R. 3590—49

(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. H. R. 3590—50

(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 H. R. 3590—51

(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 H. R. 3590—52

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 H. R. 3590—53

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 H. R. 3590—54

(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. H. R. 3590—55

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 H. R. 3590—56

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. H. R. 3590—57

(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). H. R. 3590—58

(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 H. R. 3590—59

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.— H. R. 3590—60

(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 H. R. 3590—61

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; H. R. 3590—62

(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 H. R. 3590—63

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. H. R. 3590—64

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 H. R. 3590—65

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: H. R. 3590—66

(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. H. R. 3590—67

(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. H. R. 3590—68

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. H. R. 3590—69

(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 H. R. 3590—70

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.— H. R. 3590—71

(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— H. R. 3590—72

(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 H. R. 3590—73

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.’’. H. R. 3590—74

(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 H. R. 3590—75

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 H. R. 3590—76

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. H. R. 3590—77

(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 H. R. 3590—78

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’’. H. R. 3590—79

(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. H. R. 3590—80

(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. H. R. 3590—81

(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 H. R. 3590—82

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. H. R. 3590—83

(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 H. R. 3590—84

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); H. R. 3590—85

(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). H. R. 3590—86

(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. H. R. 3590—87

(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 H. R. 3590—88

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) H. R. 3590—89

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; H. R. 3590—90

(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— H. R. 3590—91

(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.— H. R. 3590—92

(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. H. R. 3590—93

(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. H. R. 3590—94

(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 H. R. 3590—95

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 H. R. 3590—96

‘‘(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 H. R. 3590—97

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— H. R. 3590—98

‘‘(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 H. R. 3590—99

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— H. R. 3590—100

‘‘(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 H. R. 3590—101

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.’’. H. R. 3590—102

(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). H. R. 3590—103

(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 H. R. 3590—104

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 H. R. 3590—105

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 H. R. 3590—106

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. H. R. 3590—107

(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. H. R. 3590—108

(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 H. R. 3590—109

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 H. R. 3590—110

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 H. R. 3590—111

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— H. R. 3590—112

(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. H. R. 3590—113

(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— H. R. 3590—114

(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— H. R. 3590—115

(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; H. R. 3590—116

(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. H. R. 3590—117

(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. H. R. 3590—118

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— H. R. 3590—119

‘‘(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- H. R. 3590—120

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. H. R. 3590—121

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. H. R. 3590—122

‘‘(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— H. R. 3590—123

‘‘(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: H. R. 3590—124

‘‘(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). H. R. 3590—125

(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 H. R. 3590—126

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 H. R. 3590—127

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.— H. R. 3590—128

‘‘(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.— H. R. 3590—129

‘‘(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 H. R. 3590—130

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 H. R. 3590—131

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. H. R. 3590—132

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 H. R. 3590—133

(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: H. R. 3590—134

‘‘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. H. R. 3590—135

‘‘(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 H. R. 3590—136

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. H. R. 3590—137

‘‘(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.’’. H. R. 3590—138

(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, H. R. 3590—139

‘‘(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 H. R. 3590—140

(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). H. R. 3590—141

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. H. R. 3590—142

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. H. R. 3590—143

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. H. R. 3590—144

(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. §§ 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.—Not later than 180 days

after the date of enactment of this title, the Secretary, in

consultation with the HIT Policy Committee and the HIT Standards Committee, shall develop interoperable and secure standards and protocols that facilitate enrollment of individuals in

Federal and State health and human services programs, as

determined by the Secretary.

‘‘(2) METHODS.—The Secretary shall facilitate enrollment

in such programs through methods determined appropriate by

the Secretary, which shall include providing individuals and

third parties authorized by such individuals and their designees

notification of eligibility and verification of eligibility required

under such programs.

‘‘(b) CONTENT.—The standards and protocols for electronic

enrollment in the Federal and State programs described in subsection (a) shall allow for the following:

‘‘(1) Electronic matching against existing Federal and State

data, including vital records, employment history, enrollment

systems, tax records, and other data determined appropriate

by the Secretary to serve as evidence of eligibility and in

lieu of paper-based documentation.

‘‘(2) Simplification and submission of electronic documentation, digitization of documents, and systems verification of eligibility.

‘‘(3) Reuse of stored eligibility information (including documentation) to assist with retention of eligible individuals. H. R. 3590—145

‘‘(4) Capability for individuals to apply, recertify and manage their eligibility information online, including at home, at

points of service, and other community-based locations.

‘‘(5) Ability to expand the enrollment system to integrate

new programs, rules, and functionalities, to operate at increased

volume, and to apply streamlined verification and eligibility

processes to other Federal and State programs, as appropriate.

‘‘(6) Notification of eligibility, recertification, and other

needed communication regarding eligibility, which may include

communication via email and cellular phones.

‘‘(7) Other functionalities necessary to provide eligibles with

streamlined enrollment process.

‘‘(c) APPROVAL AND NOTIFICATION.—With respect to any

standard or protocol developed under subsection (a) that has been

approved by the HIT Policy Committee and the HIT Standards

Committee, the Secretary—

‘‘(1) shall notify States of such standards or protocols; and

‘‘(2) may require, as a condition of receiving Federal funds

for the health information technology investments, that States

or other entities incorporate such standards and protocols into

such investments.

‘‘(d) GRANTS FOR IMPLEMENTATION OF APPROPRIATE ENROLLMENT HIT.—

‘‘(1) IN GENERAL.—The Secretary shall award grant to

eligible entities to develop new, and adapt existing, technology

systems to implement the HIT enrollment standards and protocols developed under subsection (a) (referred to in this subsection as ‘appropriate HIT technology’).

‘‘(2) ELIGIBLE ENTITIES.—To be eligible for a grant under

this subsection, an entity shall—

‘‘(A) be a State, political subdivision of a State, or

a local governmental entity; and

‘‘(B) submit to the Secretary an application at such

time, in such manner, and containing—

‘‘(i) a plan to adopt and implement appropriate

enrollment technology that includes—

‘‘(I) proposed reduction in maintenance costs

of technology systems;

‘‘(II) elimination or updating of legacy systems;

and

‘‘(III) demonstrated collaboration with other

entities that may receive a grant under this section

that are located in the same State, political subdivision, or locality;

‘‘(ii) an assurance that the entity will share such

appropriate enrollment technology in accordance with

paragraph (4); and

‘‘(iii) such other information as the Secretary may

require.

‘‘(3) SHARING.—

‘‘(A) IN GENERAL.—The Secretary shall ensure that

appropriate enrollment HIT adopted under grants under

this subsection is made available to other qualified State,

qualified political subdivisions of a State, or other appropriate qualified entities (as described in subparagraph (B))

at no cost. H. R. 3590—146

‘‘(B) QUALIFIED ENTITIES.—The Secretary shall determine what entities are qualified to receive enrollment HIT

under subparagraph (A), taking into consideration the recommendations of the HIT Policy Committee and the HIT

Standards Committee.’’.

SEC. 1562. CONFORMING AMENDMENTS.

(a) APPLICABILITY.—Section 2735 of the Public Health Service

Act (42 U.S.C. 300gg–21), as so redesignated by section 1001(4),

is amended—

(1) by striking subsection (a);

(2) in subsection (b)—

(A) in paragraph (1), by striking ‘‘1 through 3’’ and

inserting ‘‘1 and 2’’; and

(B) in paragraph (2)—

(i) in subparagraph (A), by striking ‘‘subparagraph

(D)’’ and inserting ‘‘subparagraph (D) or (E)’’;

(ii) by striking ‘‘1 through 3’’ and inserting ‘‘1

and 2’’; and

(iii) by adding at the end the following:

‘‘(E) ELECTION NOT APPLICABLE.—The election

described in subparagraph (A) shall not be available with

respect to the provisions of subpart 1.’’;

(3) in subsection (c), by striking ‘‘1 through 3 shall not

apply to any group’’ and inserting ‘‘1 and 2 shall not apply

to any individual coverage or any group’’; and

(4) in subsection (d)—

(A) in paragraph (1), by striking ‘‘1 through 3 shall

not apply to any group’’ and inserting ‘‘1 and 2 shall not

apply to any individual coverage or any group’’;

(B) in paragraph (2)—

(i) in the matter preceding subparagraph (A), by

striking ‘‘1 through 3 shall not apply to any group’’

and inserting ‘‘1 and 2 shall not apply to any individual

coverage or any group’’; and

(ii) in subparagraph (C), by inserting ‘‘or, with

respect to individual coverage, under any health insurance coverage maintained by the same health insurance issuer’’; and

(C) in paragraph (3), by striking ‘‘any group’’ and

inserting ‘‘any individual coverage or any group’’.

(b) DEFINITIONS.—Section 2791(d) of the Public Health Service

Act (42 U.S.C. 300gg–91(d)) is amended by adding at the end

the following:

‘‘(20) QUALIFIED HEALTH PLAN.—The term ‘qualified health

plan’ has the meaning given such term in section 1301(a) of

the Patient Protection and Affordable Care Act.

‘‘(21) EXCHANGE.—The term ‘Exchange’ means an American

Health Benefit Exchange established under section 1311 of

the Patient Protection and Affordable Care Act.’’.

(c) TECHNICAL AND CONFORMING AMENDMENTS.—Title XXVII

of the Public Health Service Act (42 U.S.C. 300gg et seq.) is

amended—

(1) in section 2704 (42 U.S.C. 300gg), as so redesignated

by section 1201(2)—

(A) in subsection (c)— H. R. 3590—147

(i) in paragraph (2), by striking ‘‘group health plan’’

each place that such term appears and inserting ‘‘group

or individual health plan’’; and

(ii) in paragraph (3)—

(I) by striking ‘‘group health insurance’’ each

place that such term appears and inserting ‘‘group

or individual health insurance’’; and

(II) in subparagraph (D), by striking ‘‘small

or large’’ and inserting ‘‘individual or group’’;

(B) in subsection (d), by striking ‘‘group health insurance’’ each place that such term appears and inserting

‘‘group or individual health insurance’’; and

(C) in subsection (e)(1)(A), by striking ‘‘group health

insurance’’ and inserting ‘‘group or individual health insurance’’;

(2) by striking the second heading for subpart 2 of part

A (relating to other requirements);

(3) in section 2725 (42 U.S.C. 300gg–4), as so redesignated

by section 1001(2)—

(A) in subsection (a), by striking ‘‘health insurance

issuer offering group health insurance coverage’’ and

inserting ‘‘health insurance issuer offering group or individual health insurance coverage’’;

(B) in subsection (b)—

(i) by striking ‘‘health insurance issuer offering

group health insurance coverage in connection with

a group health plan’’ in the matter preceding paragraph (1) and inserting ‘‘health insurance issuer

offering group or individual health insurance coverage’’;

and

(ii) in paragraph (1), by striking ‘‘plan’’ and

inserting ‘‘plan or coverage’’;

(C) in subsection (c)—

(i) in paragraph (2), by striking ‘‘group health

insurance coverage offered by a health insurance

issuer’’ and inserting ‘‘health insurance issuer offering

group or individual health insurance coverage’’; and

(ii) in paragraph (3), by striking ‘‘issuer’’ and

inserting ‘‘health insurance issuer’’; and

(D) in subsection (e), by striking ‘‘health insurance

issuer offering group health insurance coverage’’ and

inserting ‘‘health insurance issuer offering group or individual health insurance coverage’’;

(4) in section 2726 (42 U.S.C. 300gg–5), as so redesignated

by section 1001(2)—

(A) in subsection (a), by striking ‘‘(or health insurance

coverage offered in connection with such a plan)’’ each

place that such term appears and inserting ‘‘or a health

insurance issuer offering group or individual health insurance coverage’’;

(B) in subsection (b), by striking ‘‘(or health insurance

coverage offered in connection with such a plan)’’ each

place that such term appears and inserting ‘‘or a health

insurance issuer offering group or individual health insurance coverage’’; and

(C) in subsection (c)— H. R. 3590—148

(i) in paragraph (1), by striking ‘‘(and group health

insurance coverage offered in connection with a group

health plan)’’ and inserting ‘‘and a health insurance

issuer offering group or individual health insurance

coverage’’;

(ii) in paragraph (2), by striking ‘‘(or health insurance coverage offered in connection with such a plan)’’

each place that such term appears and inserting ‘‘or

a health insurance issuer offering group or individual

health insurance coverage’’;

(5) in section 2727 (42 U.S.C. 300gg–6), as so redesignated

by section 1001(2), by striking ‘‘health insurance issuers providing health insurance coverage in connection with group

health plans’’ and inserting ‘‘and health insurance issuers

offering group or individual health insurance coverage’’;

(6) in section 2728 (42 U.S.C. 300gg–7), as so redesignated

by section 1001(2)—

(A) in subsection (a), by striking ‘‘health insurance

coverage offered in connection with such plan’’ and

inserting ‘‘individual health insurance coverage’’;

(B) in subsection (b)—

(i) in paragraph (1), by striking ‘‘or a health insurance issuer that provides health insurance coverage

in connection with a group health plan’’ and inserting

‘‘or a health insurance issuer that offers group or individual health insurance coverage’’;

(ii) in paragraph (2), by striking ‘‘health insurance

coverage offered in connection with the plan’’ and

inserting ‘‘individual health insurance coverage’’; and

(iii) in paragraph (3), by striking ‘‘health insurance

coverage offered by an issuer in connection with such

plan’’ and inserting ‘‘individual health insurance coverage’’;

(C) in subsection (c), by striking ‘‘health insurance

issuer providing health insurance coverage in connection

with a group health plan’’ and inserting ‘‘health insurance

issuer that offers group or individual health insurance

coverage’’; and

(D) in subsection (e)(1), by striking ‘‘health insurance

coverage offered in connection with such a plan’’ and

inserting ‘‘individual health insurance coverage’’;

(7) by striking the heading for subpart 3;

(8) in section 2731 (42 U.S.C. 300gg–11), as so redesignated

by section 1001(3)—

(A) by striking the section heading and all that follows

through subsection (b);

(B) in subsection (c)—

(i) in paragraph (1)—

(I) in the matter preceding subparagraph (A),

by striking ‘‘small group’’ and inserting ‘‘group and

individual’’; and

(II) in subparagraph (B)—

(aa) in the matter preceding clause (i),

by inserting ‘‘and individuals’’ after

‘‘employers’’; H. R. 3590—149

(bb) in clause (i), by inserting ‘‘or any

additional individuals’’ after ‘‘additional

groups’’; and

(cc) in clause (ii), by striking ‘‘without

regard to the claims experience of those

employers and their employees (and their

dependents) or any health status-related factor

relating to such’’ and inserting ‘‘and individuals without regard to the claims experience

of those individuals, employers and their

employees (and their dependents) or any

health status-related factor relating to such

individuals’’; and

(ii) in paragraph (2), by striking ‘‘small group’’

and inserting ‘‘group or individual’’;

(C) in subsection (d)—

(i) by striking ‘‘small group’’ each place that such

appears and inserting ‘‘group or individual’’; and

(ii) in paragraph (1)(B)—

(I) by striking ‘‘all employers’’ and inserting

‘‘all employers and individuals’’;

(II) by striking ‘‘those employers’’ and

inserting ‘‘those individuals, employers’’; and

(III) by striking ‘‘such employees’’ and

inserting ‘‘such individuals, employees’’;

(D) by striking subsection (e);

(E) by striking subsection (f); and

(F) by transferring such section (as amended by this

paragraph) to appear at the end of section 2702 (as added

by section 1001(4));

(9) in section 2732 (42 U.S.C. 300gg–12), as so redesignated

by section 1001(3)—

(A) by striking the section heading and all that follows

through subsection (a);

(B) in subsection (b)—

(i) in the matter preceding paragraph (1), by

striking ‘‘group health plan in the small or large group

market’’ and inserting ‘‘health insurance coverage

offered in the group or individual market’’;

(ii) in paragraph (1), by inserting ‘‘, or individual,

as applicable,’’ after ‘‘plan sponsor’’;

(iii) in paragraph (2), by inserting ‘‘, or individual,

as applicable,’’ after ‘‘plan sponsor’’; and

(iv) by striking paragraph (3) and inserting the

following:

‘‘(3) VIOLATION OF PARTICIPATION OR CONTRIBUTION

RATES.—In the case of a group health plan, the plan sponsor

has failed to comply with a material plan provision relating

to employer contribution or group participation rules, pursuant

to applicable State law.’’;

(C) in subsection (c)—

(i) in paragraph (1)—

(I) in the matter preceding subparagraph (A),

by striking ‘‘group health insurance coverage

offered in the small or large group market’’ and

inserting ‘‘group or individual health insurance

coverage’’; H. R. 3590—150

(II) in subparagraph (A), by inserting ‘‘or individual, as applicable,’’ after ‘‘plan sponsor’’;

(III) in subparagraph (B)—

(aa) by inserting ‘‘or individual, as

applicable,’’ after ‘‘plan sponsor’’; and

(bb) by inserting ‘‘or individual health

insurance coverage’’; and

(IV) in subparagraph (C), by inserting ‘‘or

individuals, as applicable,’’ after ‘‘those sponsors’’;

and

(ii) in paragraph (2)(A)—

(I) in the matter preceding clause (i), by

striking ‘‘small group market or the large group

market, or both markets,’’ and inserting ‘‘individual or group market, or all markets,’’; and

(II) in clause (i), by inserting ‘‘or individual,

as applicable,’’ after ‘‘plan sponsor’’; and

(D) by transferring such section (as amended by this

paragraph) to appear at the end of section 2703 (as added

by section 1001(4));

(10) in section 2733 (42 U.S.C. 300gg–13), as so redesignated by section 1001(4)—

(A) in subsection (a)—

(i) in the matter preceding paragraph (1), by

striking ‘‘small employer’’ and inserting ‘‘small

employer or an individual’’;

(ii) in paragraph (1), by inserting ‘‘, or individual,

as applicable,’’ after ‘‘employer’’ each place that such

appears; and

(iii) in paragraph (2), by striking ‘‘small employer’’

and inserting ‘‘employer, or individual, as applicable,’’;

(B) in subsection (b)—

(i) in paragraph (1)—

(I) in the matter preceding subparagraph (A),

by striking ‘‘small employer’’ and inserting

‘‘employer, or individual, as applicable,’’;

(II) in subparagraph (A), by adding ‘‘and’’ at

the end;

(III) by striking subparagraphs (B) and (C);

and

(IV) in subparagraph (D)—

(aa) by inserting ‘‘, or individual, as

applicable,’’ after ‘‘employer’’; and

(bb) by redesignating such subparagraph

as subparagraph (B);

(ii) in paragraph (2)—

(I) by striking ‘‘small employers’’ each place

that such term appears and inserting ‘‘employers,

or individuals, as applicable,’’; and

(II) by striking ‘‘small employer’’ and inserting

‘‘employer, or individual, as applicable,’’; and

(C) by redesignating such section (as amended by this

paragraph) as section 2709 and transferring such section

to appear after section 2708 (as added by section 1001(5));

(11) by redesignating subpart 4 as subpart 2;

(12) in section 2735 (42 U.S.C. 300gg–21), as so redesignated by section 1001(4)— H. R. 3590—151

(A) by striking subsection (a);

(B) by striking ‘‘subparts 1 through 3’’ each place that

such appears and inserting ‘‘subpart 1’’;

(C) by redesignating subsections (b) through (e) as

subsections (a) through (d), respectively; and

(D) by redesignating such section (as amended by this

paragraph) as section 2722;

(13) in section 2736 (42 U.S.C. 300gg–22), as so redesignated by section 1001(4)—

(A) in subsection (a)—

(i) in paragraph (1), by striking ‘‘small or large

group markets’’ and inserting ‘‘individual or group

market’’; and

(ii) in paragraph (2), by inserting ‘‘or individual

health insurance coverage’’ after ‘‘group health plans’’;

(B) in subsection (b)(1)(B), by inserting ‘‘individual

health insurance coverage or’’ after ‘‘respect to’’; and

(C) by redesignating such section (as amended by this

paragraph) as section 2723;

(14) in section 2737(a)(1) (42 U.S.C. 300gg–23), as so

redesignated by section 1001(4)—

(A) by inserting ‘‘individual or’’ before ‘‘group health

insurance’’; and

(B) by redesignating such section(as amended by this

paragraph) as section 2724;

(15) in section 2762 (42 U.S.C. 300gg–62)—

(A) in the section heading by inserting ‘‘AND APPLICATION’’ before the period; and

(B) by adding at the end the following:

‘‘(c) APPLICATION OF PART A PROVISIONS.—

‘‘(1) IN GENERAL.—The provisions of part A shall apply

to health insurance issuers providing health insurance coverage

in the individual market in a State as provided for in such

part.

‘‘(2) CLARIFICATION.—To the extent that any provision of

this part conflicts with a provision of part A with respect

to health insurance issuers providing health insurance coverage

in the individual market in a State, the provisions of such

part A shall apply.’’; and

(16) in section 2791(e) (42 U.S.C. 300gg–91(e))—

(A) in paragraph (2), by striking ‘‘51’’ and inserting

‘‘101’’; and

(B) in paragraph (4)—

(i) by striking ‘‘at least 2’’ each place that such

appears and inserting ‘‘at least 1’’; and

(ii) by striking ‘‘50’’ and inserting ‘‘100’’.

(d) APPLICATION.—Notwithstanding any other provision of the

Patient Protection and Affordable Care Act, nothing in such Act

(or an amendment made by such Act) shall be construed to—

(1) prohibit (or authorize the Secretary of Health and

Human Services to promulgate regulations that prohibit) a

group health plan or health insurance issuer from carrying

out utilization management techniques that are commonly used

as of the date of enactment of this Act; or

(2) restrict the application of the amendments made by

this subtitle. H. R. 3590—152

(e) TECHNICAL AMENDMENT TO THE EMPLOYEE RETIREMENT

INCOME SECURITY ACT OF 1974.—Subpart B of part 7 of subtitle

A of title I of the Employee Retirement Income Security Act of

1974 (29 U.S.C. 1181 et. seq.) is amended, by adding at the end

the following:

‘‘SEC. 715. ADDITIONAL MARKET REFORMS.

‘‘(a) GENERAL RULE.—Except as provided in subsection (b)—

‘‘(1) the provisions of part A of title XXVII of the Public

Health Service Act (as amended by the Patient Protection and

Affordable Care Act) shall apply to group health plans, and

health insurance issuers providing health insurance coverage

in connection with group health plans, as if included in this

subpart; and

‘‘(2) to the extent that any provision of this part conflicts

with a provision of such part A with respect to group health

plans, or health insurance issuers providing health insurance

coverage in connection with group health plans, the provisions

of such part A shall apply.

‘‘(b) EXCEPTION.—Notwithstanding subsection (a), the provisions of sections 2716 and 2718 of title XXVII of the Public Health

Service Act (as amended by the Patient Protection and Affordable

Care Act) shall not apply with respect to self-insured group health

plans, and the provisions of this part shall continue to apply to

such plans as if such sections of the Public Health Service Act

(as so amended) had not been enacted.’’.

(f) TECHNICAL AMENDMENT TO THE INTERNAL REVENUE CODE

OF 1986.—Subchapter B of chapter 100 of the Internal Revenue

Code of 1986 is amended by adding at the end the following:

‘‘SEC. 9815. ADDITIONAL MARKET REFORMS.

‘‘(a) GENERAL RULE.—Except as provided in subsection (b)—

‘‘(1) the provisions of part A of title XXVII of the Public

Health Service Act (as amended by the Patient Protection and

Affordable Care Act) shall apply to group health plans, and

health insurance issuers providing health insurance coverage

in connection with group health plans, as if included in this

subchapter; and

‘‘(2) to the extent that any provision of this subchapter

conflicts with a provision of such part A with respect to group

health plans, or health insurance issuers providing health

insurance coverage in connection with group health plans, the

provisions of such part A shall apply.

‘‘(b) EXCEPTION.—Notwithstanding subsection (a), the provisions of sections 2716 and 2718 of title XXVII of the Public Health

Service Act (as amended by the Patient Protection and Affordable

Care Act) shall not apply with respect to self-insured group health

plans, and the provisions of this subchapter shall continue to apply

to such plans as if such sections of the Public Health Service

Act (as so amended) had not been enacted.’’.

SEC. 1563. SENSE OF THE SENATE PROMOTING FISCAL RESPONSIBILITY.

(a) FINDINGS.—The Senate makes the following findings:

(1) Based on Congressional Budget Office (CBO) estimates,

this Act will reduce the Federal deficit between 2010 and 2019.

(2) CBO projects this Act will continue to reduce budget

deficits after 2019. H. R. 3590—153

(3) Based on CBO estimates, this Act will extend the solvency of the Medicare HI Trust Fund.

(4) This Act will increase the surplus in the Social Security

Trust Fund, which should be reserved to strengthen the

finances of Social Security.

(5) The initial net savings generated by the Community

Living Assistance Services and Supports (CLASS) program are

necessary to ensure the long-term solvency of that program.

(b) SENSE OF THE SENATE.—It is the sense of the Senate that—

(1) the additional surplus in the Social Security Trust

Fund generated by this Act should be reserved for Social Security and not spent in this Act for other purposes; and

(2) the net savings generated by the CLASS program should

be reserved for the CLASS program and not spent in this

Act for other purposes.

TITLE II—ROLE OF PUBLIC PROGRAMS

Subtitle A—Improved Access to Medicaid

SEC. 2001. MEDICAID COVERAGE FOR THE LOWEST INCOME POPULATIONS.

(a) COVERAGE FOR INDIVIDUALS WITH INCOME AT OR BELOW

133 PERCENT OF THE POVERTY LINE.—

(1) BEGINNING 2014.—Section 1902(a)(10)(A)(i) of the Social

Security Act (42 U.S.C. 1396a) is amended—

(A) by striking ‘‘or’’ at the end of subclause (VI);

(B) by adding ‘‘or’’ at the end of subclause (VII); and

(C) by inserting after subclause (VII) the following:

‘‘(VIII) beginning January 1, 2014, who are

under 65 years of age, not pregnant, not entitled

to, or enrolled for, benefits under part A of title

XVIII, or enrolled for benefits under part B of

title XVIII, and are not described in a previous

subclause of this clause, and whose income (as

determined under subsection (e)(14)) does not

exceed 133 percent of the poverty line (as defined

in section 2110(c)(5)) applicable to a family of the

size involved, subject to subsection (k);’’.

(2) PROVISION OF AT LEAST MINIMUM ESSENTIAL COVERAGE.—

(A) IN GENERAL.—Section 1902 of such Act (42 U.S.C.

1396a) is amended by inserting after subsection (j) the

following:

‘‘(k)(1) The medical assistance provided to an individual

described in subclause (VIII) of subsection (a)(10)(A)(i) shall consist

of benchmark coverage described in section 1937(b)(1) or benchmark

equivalent coverage described in section 1937(b)(2). Such medical

assistance shall be provided subject to the requirements of section

1937, without regard to whether a State otherwise has elected

the option to provide medical assistance through coverage under

that section, unless an individual described in subclause (VIII)

of subsection (a)(10)(A)(i) is also an individual for whom, under

subparagraph (B) of section 1937(a)(2), the State may not require

enrollment in benchmark coverage described in subsection (b)(1) H. R. 3590—154

of section 1937 or benchmark equivalent coverage described in

subsection (b)(2) of that section.’’.

(B) CONFORMING AMENDMENT.—Section 1903(i) of the

Social Security Act, as amended by section 6402(c), is

amended—

(i) in paragraph (24), by striking ‘‘or’’ at the end;

(ii) in paragraph (25), by striking the period and

inserting ‘‘; or’’; and

(iii) by adding at the end the following:

‘‘(26) with respect to any amounts expended for medical

assistance for individuals described in subclause (VIII) of subsection (a)(10)(A)(i) other than medical assistance provided

through benchmark coverage described in section 1937(b)(1)

or benchmark equivalent coverage described in section

1937(b)(2).’’.

(3) FEDERAL FUNDING FOR COST OF COVERING NEWLY

ELIGIBLE INDIVIDUALS.—Section 1905 of the Social Security Act

(42 U.S.C. 1396d), is amended—

(A) in subsection (b), in the first sentence, by inserting

‘‘subsection (y) and’’ before ‘‘section 1933(d)’’; and

(B) by adding at the end the following new subsection:

‘‘(y) INCREASED FMAP  FOR MEDICAL ASSISTANCE FOR NEWLY

ELIGIBLE MANDATORY INDIVIDUALS.—

‘‘(1) AMOUNT OF INCREASE.—

‘‘(A) 100 PERCENT FMAP.—During the period that begins

on January 1, 2014, and ends on December 31, 2016, notwithstanding subsection (b), the Federal medical assistance

percentage determined for a State that is one of the 50

States or the District of Columbia for each fiscal year

occurring during that period with respect to amounts

expended for medical assistance for newly eligible individuals described in subclause (VIII) of section

1902(a)(10)(A)(i) shall be equal to 100 percent.

‘‘(B) 2017 AND 2018.—

‘‘(i) IN GENERAL.—During the period that begins

on January 1, 2017, and ends on December 31, 2018,

notwithstanding subsection (b) and subject to subparagraph (D), the Federal medical assistance percentage

determined for a State that is one of the 50 States

or the District of Columbia for each fiscal year occurring during that period with respect to amounts

expended for medical assistance for newly eligible

individuals described in subclause (VIII) of section

1902(a)(10)(A)(i), shall be increased by the applicable

percentage point increase specified in clause (ii) for

the quarter and the State.

‘‘(ii) APPLICABLE PERCENTAGE POINT INCREASE.—

‘‘(I) IN GENERAL.—For purposes of clause (i),

the applicable percentage point increase for a

quarter is the following: H. R. 3590—155

‘‘For any fiscal year quarter occurring in the calendar year:

If the State is an expansion State, the applicable

percentage point increase

is:

If the State is not an expansion State, the applicable percentage point increase is:

2017 30.3 34.3

2018 31.3 33.3

‘‘(II) EXPANSION STATE DEFINED.—For purposes

of the table in subclause (I), a State is an expansion State if, on the date of the enactment of

the Patient Protection and Affordable Care Act,

the State offers health benefits coverage statewide

to parents and nonpregnant, childless adults whose

income is at least 100 percent of the poverty line,

that is not dependent on access to employer coverage, employer contribution, or employment and

is not limited to premium assistance, hospital-only

benefits, a high deductible health plan, or alternative benefits under a demonstration program

authorized under section 1938. A State that offers

health benefits coverage to only parents or only

nonpregnant childless adults described in the preceding sentence shall not be considered to be an

expansion State.

‘‘(C) 2019 AND SUCCEEDING YEARS.—Beginning January

1, 2019, notwithstanding subsection (b) but subject to

subparagraph (D), the Federal medical assistance percentage determined for a State that is one of the 50 States

or the District of Columbia for each fiscal year quarter

occurring during that period with respect to amounts

expended for medical assistance for newly eligible individuals described in subclause (VIII) of section

1902(a)(10)(A)(i), shall be increased by 32.3 percentage

points.

‘‘(D) LIMITATION.—The Federal medical assistance

percentage determined for a State under subparagraph

(B) or (C) shall in no case be more than 95 percent.

‘‘(2) DEFINITIONS.—In this subsection:

‘‘(A) NEWLY ELIGIBLE.—The term ‘newly eligible’

means, with respect to an individual described in subclause

(VIII) of section 1902(a)(10)(A)(i), an individual who is not

under 19 years of age (or such higher age as the State

may have elected) and who, on the date of enactment

of the Patient Protection and Affordable Care Act, is not

eligible under the State plan or under a waiver of the

plan for full benefits or for benchmark coverage described

in subparagraph (A), (B), or (C) of section 1937(b)(1) or

benchmark equivalent coverage described in section

1937(b)(2) that has an aggregate actuarial value that is

at least actuarially equivalent to benchmark coverage

described in subparagraph (A), (B), or (C) of section

1937(b)(1), or is eligible but not enrolled (or is on a waiting

list) for such benefits or coverage through a waiver under

the plan that has a capped or limited enrollment that

is full. H. R. 3590—156

‘‘(B) FULL BENEFITS.—The term ‘full benefits’ means,

with respect to an individual, medical assistance for all

services covered under the State plan under this title that

is not less in amount, duration, or scope, or is determined

by the Secretary to be substantially equivalent, to the

medical assistance available for an individual described

in section 1902(a)(10)(A)(i).’’.

(4) STATE OPTIONS TO OFFER COVERAGE EARLIER AND

PRESUMPTIVE ELIGIBILITY;  CHILDREN REQUIRED TO HAVE COVERAGE FOR PARENTS TO BE ELIGIBLE.—

(A) IN GENERAL.—Subsection (k) of section 1902 of

the Social Security Act (as added by paragraph (2)), is

amended by inserting after paragraph (1) the following:

‘‘(2) Beginning with the first day of any fiscal year quarter

that begins on or after January 1, 2011, and before January 1,

2014, a State may elect through a State plan amendment to provide

medical assistance to individuals who would be described in subclause (VIII) of subsection (a)(10)(A)(i) if that subclause were effective before January 1, 2014. A State may elect to phase-in the

extension of eligibility for medical assistance to such individuals

based on income, so long as the State does not extend such eligibility

to individuals described in such subclause with higher income before

making individuals described in such subclause with lower income

eligible for medical assistance.

‘‘(3) If an individual described in subclause (VIII) of subsection

(a)(10)(A)(i) is the parent of a child who is under 19 years of

age (or such higher age as the State may have elected) who is

eligible for medical assistance under the State plan or under a

waiver of such plan (under that subclause or under a State plan

amendment under paragraph (2), the individual may not be enrolled

under the State plan unless the individual’s child is enrolled under

the State plan or under a waiver of the plan or is enrolled in

other health insurance coverage. For purposes of the preceding

sentence, the term ‘parent’ includes an individual treated as a

caretaker relative for purposes of carrying out section 1931.’’.

(B) PRESUMPTIVE ELIGIBILITY.—Section 1920 of the

Social Security Act (42 U.S.C. 1396r–1) is amended by

adding at the end the following:

‘‘(e) If the State has elected the option to provide a presumptive

eligibility period under this section or section 1920A, the State

may elect to provide a presumptive eligibility period (as defined

in subsection (b)(1)) for individuals who are eligible for medical

assistance under clause (i)(VIII) of subsection (a)(10)(A) or section

1931 in the same manner as the State provides for such a period

under this section or section 1920A, subject to such guidance as

the Secretary shall establish.’’.

(5) CONFORMING AMENDMENTS.—

(A) Section 1902(a)(10) of such Act (42 U.S.C.

1396a(a)(10)) is amended in the matter following subparagraph (G), by striking ‘‘and (XIV)’’ and inserting ‘‘(XIV)’’

and by inserting ‘‘and (XV) the medical assistance made

available to an individual described in subparagraph

(A)(i)(VIII) shall be limited to medical assistance described

in subsection (k)(1)’’ before the semicolon.

(B) Section 1902(l)(2)(C) of such Act (42 U.S.C.

1396a(l)(2)(C)) is amended by striking ‘‘100’’ and inserting

‘‘133’’. H. R. 3590—157

(C) Section 1905(a) of such Act (42 U.S.C. 1396d(a))

is amended in the matter preceding paragraph (1)—

(i) by striking ‘‘or’’ at the end of clause (xii);

(ii) by inserting ‘‘or’’ at the end of clause (xiii);

and

(iii) by inserting after clause (xiii) the following:

‘‘(xiv) individuals described in section

1902(a)(10)(A)(i)(VIII),’’.

(D) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4))

is amended by inserting ‘‘1902(a)(10)(A)(i)(VIII),’’ after

‘‘1902(a)(10)(A)(i)(VII),’’.

(E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 1396u–

7(a)(1)(B)) is amended by inserting ‘‘subclause (VIII) of

section 1902(a)(10)(A)(i) or under’’ after ‘‘eligible under’’.

(b) MAINTENANCE OF MEDICAID INCOME ELIGIBILITY.—Section

1902 of the Social Security Act (42 U.S.C. 1396a) is amended—

(1) in subsection (a)—

(A) by striking ‘‘and’’ at the end of paragraph (72);

(B) by striking the period at the end of paragraph

(73) and inserting ‘‘; and’’; and

(C) by inserting after paragraph (73) the following

new paragraph:

‘‘(74) provide for maintenance of effort under the State

plan or under any waiver of the plan in accordance with subsection (gg).’’; and

(2) by adding at the end the following new subsection:

‘‘(gg) MAINTENANCE OF EFFORT.—

‘‘(1) GENERAL REQUIREMENT TO MAINTAIN ELIGIBILITY

STANDARDS UNTIL STATE EXCHANGE IS FULLY OPERATIONAL.—

Subject to the succeeding paragraphs of this subsection, during

the period that begins on the date of enactment of the Patient

Protection and Affordable Care Act and ends on the date on

which the Secretary determines that an Exchange established

by the State under section 1311 of the Patient Protection and

Affordable Care Act is fully operational, as a condition for

receiving any Federal payments under section 1903(a) for calendar quarters occurring during such period, a State shall

not have in effect eligibility standards, methodologies, or procedures under the State plan under this title or under any waiver

of such plan that is in effect during that period, that are

more restrictive than the eligibility standards, methodologies,

or procedures, respectively, under the plan or waiver that are

in effect on the date of enactment of the Patient Protection

and Affordable Care Act.

‘‘(2) CONTINUATION OF ELIGIBILITY STANDARDS FOR CHILDREN UNTIL OCTOBER 1,  2019.—The requirement under paragraph (1) shall continue to apply to a State through September

30, 2019, with respect to the eligibility standards, methodologies, and procedures under the State plan under this title

or under any waiver of such plan that are applicable to determining the eligibility for medical assistance of any child who

is under 19 years of age (or such higher age as the State

may have elected).

‘‘(3) NONAPPLICATION.—During the period that begins on

January 1, 2011, and ends on December 31, 2013, the requirement under paragraph (1) shall not apply to a State with

respect to nonpregnant, nondisabled adults who are eligible H. R. 3590—158

for medical assistance under the State plan or under a waiver

of the plan at the option of the State and whose income exceeds

133 percent of the poverty line (as defined in section 2110(c)(5))

applicable to a family of the size involved if, on or after

December 31, 2010, the State certifies to the Secretary that,

with respect to the State fiscal year during which the certification is made, the State has a budget deficit, or with respect

to the succeeding State fiscal year, the State is projected to

have a budget deficit. Upon submission of such a certification

to the Secretary, the requirement under paragraph (1) shall

not apply to the State with respect to any remaining portion

of the period described in the preceding sentence.

‘‘(4) DETERMINATION OF COMPLIANCE.—

‘‘(A) STATES SHALL APPLY MODIFIED GROSS INCOME.—

A State’s determination of income in accordance with subsection (e)(14) shall not be considered to be eligibility standards, methodologies, or procedures that are more restrictive

than the standards, methodologies, or procedures in effect

under the State plan or under a waiver of the plan on

the date of enactment of the Patient Protection and Affordable Care Act for purposes of determining compliance with

the requirements of paragraph (1), (2), or (3).

‘‘(B) STATES MAY EXPAND ELIGIBILITY OR MOVE

WAIVERED POPULATIONS INTO COVERAGE UNDER THE STATE

PLAN.—With respect to any period applicable under paragraph (1), (2), or (3), a State that applies eligibility standards, methodologies, or procedures under the State plan

under this title or under any waiver of the plan that

are less restrictive than the eligibility standards, methodologies, or procedures, applied under the State plan or

under a waiver of the plan on the date of enactment of

the Patient Protection and Affordable Care Act, or that

makes individuals who, on such date of enactment, are

eligible for medical assistance under a waiver of the State

plan, after such date of enactment eligible for medical

assistance through a State plan amendment with an income

eligibility level that is not less than the income eligibility

level that applied under the waiver, or as a result of

the application of subclause (VIII) of section

1902(a)(10)(A)(i), shall not be considered to have in effect

eligibility standards, methodologies, or procedures that are

more restrictive than the standards, methodologies, or

procedures in effect under the State plan or under a waiver

of the plan on the date of enactment of the Patient Protection and Affordable Care Act for purposes of determining

compliance with the requirements of paragraph (1), (2),

or (3).’’.

(c) MEDICAID BENCHMARK BENEFITS MUST CONSIST OF AT LEAST

MINIMUM ESSENTIAL COVERAGE.—Section 1937(b) of such Act (42

U.S.C. 1396u–7(b)) is amended—

(1) in paragraph (1), in the matter preceding subparagraph

(A), by inserting ‘‘subject to paragraphs (5) and (6),’’ before

‘‘each’’;

(2) in paragraph (2)—

(A) in the matter preceding subparagraph (A), by

inserting ‘‘subject to paragraphs (5) and (6)’’ after ‘‘subsection (a)(1),’’; H. R. 3590—159

(B) in subparagraph (A)—

(i) by redesignating clauses (iv) and (v) as clauses

(vi) and (vii), respectively; and

(ii) by inserting after clause (iii), the following:

‘‘(iv) Coverage of prescription drugs.

‘‘(v) Mental health services.’’; and

(C) in subparagraph (C)—

(i) by striking clauses (i) and (ii); and

(ii) by redesignating clauses (iii) and (iv) as clauses

(i) and (ii), respectively; and

(3) by adding at the end the following new paragraphs:

‘‘(5) MINIMUM STANDARDS.—Effective January 1, 2014, any

benchmark benefit package under paragraph (1) or benchmark

equivalent coverage under paragraph (2) must provide at least

essential health benefits as described in section 1302(b) of

the Patient Protection and Affordable Care Act.

‘‘(6) MENTAL HEALTH SERVICES PARITY.—

‘‘(A) IN GENERAL.—In the case of any benchmark benefit package under paragraph (1) or benchmark equivalent

coverage under paragraph (2) that is offered by an entity

that is not a medicaid managed care organization and

that provides both medical and surgical benefits and mental

health or substance use disorder benefits, the entity shall

ensure that the financial requirements and treatment

limitations applicable to such mental health or substance

use disorder benefits comply with the requirements of section 2705(a) of the Public Health Service Act in the same

manner as such requirements apply to a group health

plan.

‘‘(B) DEEMED COMPLIANCE.—Coverage provided with

respect to an individual described in section 1905(a)(4)(B)

and covered under the State plan under section

1902(a)(10)(A) of the services described in section

1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services defined in section 1905(r))

and provided in accordance with section 1902(a)(43), shall

be deemed to satisfy the requirements of subparagraph

(A).’’.

(d) ANNUAL REPORTS ON MEDICAID ENROLLMENT.—

(1) STATE REPORTS.—Section 1902(a) of the Social Security

Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is

amended—

(A) by striking ‘‘and’’ at the end of paragraph (73);

(B) by striking the period at the end of paragraph

(74) and inserting ‘‘; and’’; and

(C) by inserting after paragraph (74) the following

new paragraph:

‘‘(75) provide that, beginning January 2015, and annually

thereafter, the State shall submit a report to the Secretary

that contains—

‘‘(A) the total number of enrolled and newly enrolled

individuals in the State plan or under a waiver of the

plan for the fiscal year ending on September 30 of the

preceding calendar year, disaggregated by population,

including children, parents, nonpregnant childless adults,

disabled individuals, elderly individuals, and such other H. R. 3590—160

categories or sub-categories of individuals eligible for medical assistance under the State plan or under a waiver

of the plan as the Secretary may require;

‘‘(B) a description, which may be specified by population, of the outreach and enrollment processes used by

the State during such fiscal year; and

‘‘(C) any other data reporting determined necessary

by the Secretary to monitor enrollment and retention of

individuals eligible for medical assistance under the State

plan or under a waiver of the plan.’’.

(2) REPORTS TO CONGRESS.—Beginning April 2015, and

annually thereafter, the Secretary of Health and Human Services shall submit a report to the appropriate committees of

Congress on the total enrollment and new enrollment in Medicaid for the fiscal year ending on September 30 of the preceding

calendar year on a national and State-by-State basis, and shall

include in each such report such recommendations for administrative or legislative changes to improve enrollment in the

Medicaid program as the Secretary determines appropriate.

(e) STATE OPTION FOR COVERAGE FOR INDIVIDUALS WITH

INCOME THAT EXCEEDS 133 PERCENT OF THE POVERTY LINE.—

(1) COVERAGE AS OPTIONAL CATEGORICALLY NEEDY GROUP.—

Section 1902 of the Social Security Act (42 U.S.C. 1396a) is

amended—

(A) in subsection (a)(10)(A)(ii)—

(i) in subclause (XVIII), by striking ‘‘or’’ at the

end;

(ii) in subclause (XIX), by adding ‘‘or’’ at the end;

and

(iii) by adding at the end the following new subclause:

‘‘(XX) beginning January 1, 2014, who are

under 65 years of age and are not described in

or enrolled under a previous subclause of this

clause, and whose income (as determined under

subsection (e)(14)) exceeds 133 percent of the poverty line (as defined in section 2110(c)(5))

applicable to a family of the size involved but

does not exceed the highest income eligibility level

established under the State plan or under a waiver

of the plan, subject to subsection (hh);’’ and

(B) by adding at the end the following new subsection:

‘‘(hh)(1) A State may elect to phase-in the extension of eligibility

for medical assistance to individuals described in subclause (XX)

of subsection (a)(10)(A)(ii) based on the categorical group (including

nonpregnant childless adults) or income, so long as the State does

not extend such eligibility to individuals described in such subclause

with higher income before making individuals described in such

subclause with lower income eligible for medical assistance.

‘‘(2) If an individual described in subclause (XX) of subsection

(a)(10)(A)(ii) is the parent of a child who is under 19 years of

age (or such higher age as the State may have elected) who is

eligible for medical assistance under the State plan or under a

waiver of such plan, the individual may not be enrolled under

the State plan unless the individual’s child is enrolled under the

State plan or under a waiver of the plan or is enrolled in other

health insurance coverage. For purposes of the preceding sentence, H. R. 3590—161

the term ‘parent’ includes an individual treated as a caretaker

relative for purposes of carrying out section 1931.’’.

(2) CONFORMING AMENDMENTS.—

(A) Section 1905(a) of such Act (42 U.S.C. 1396d(a)),

as amended by subsection (a)(5)(C), is amended in the

matter preceding paragraph (1)—

(i) by striking ‘‘or’’ at the end of clause (xiii);

(ii) by inserting ‘‘or’’ at the end of clause (xiv);

and

(iii) by inserting after clause (xiv) the following:

‘‘(xv) individuals described in section

1902(a)(10)(A)(ii)(XX),’’.

(B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4))

is amended by inserting ‘‘1902(a)(10)(A)(ii)(XX),’’ after

‘‘1902(a)(10)(A)(ii)(XIX),’’.

(C) Section 1920(e) of such Act (42 U.S.C. 1396r–1(e)),

as added by subsection (a)(4)(B), is amended by inserting

‘‘or clause (ii)(XX)’’ after ‘‘clause (i)(VIII)’’.

SEC. 2002. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED

USING MODIFIED GROSS INCOME.

(a) IN GENERAL.—Section 1902(e) of the Social Security Act

(42 U.S.C. 1396a(e)) is amended by adding at the end the following:

‘‘(14) INCOME DETERMINED USING MODIFIED GROSS

INCOME.—

‘‘(A) IN GENERAL.—Notwithstanding subsection (r) or

any other provision of this title, except as provided in

subparagraph (D), for purposes of determining income eligibility for medical assistance under the State plan or under

any waiver of such plan and for any other purpose

applicable under the plan or waiver for which a determination of income is required, including with respect to the

imposition of premiums and cost-sharing, a State shall

use the modified gross income of an individual and, in

the case of an individual in a family greater than 1, the

household income of such family. A State shall establish

income eligibility thresholds for populations to be eligible

for medical assistance under the State plan or a waiver

of the plan using modified gross income and household

income that are not less than the effective income eligibility

levels that applied under the State plan or waiver on

the date of enactment of the Patient Protection and Affordable Care Act. For purposes of complying with the maintenance of effort requirements under subsection (gg) during

the transition to modified gross income and household

income, a State shall, working with the Secretary, establish

an equivalent income test that ensures individuals eligible

for medical assistance under the State plan or under a

waiver of the plan on the date of enactment of the Patient

Protection and Affordable Care Act, do not lose coverage

under the State plan or under a waiver of the plan. The

Secretary may waive such provisions of this title and title

XXI as are necessary to ensure that States establish income

and eligibility determination systems that protect beneficiaries.

‘‘(B) NO INCOME OR EXPENSE DISREGARDS.—No type

of expense, block, or other income disregard shall be applied H. R. 3590—162

by a State to determine income eligibility for medical assistance under the State plan or under any waiver of such

plan or for any other purpose applicable under the plan

or waiver for which a determination of income is required.

‘‘(C) NO ASSETS TEST.—A State shall not apply any

assets or resources test for purposes of determining eligibility for medical assistance under the State plan or under

a waiver of the plan.

‘‘(D) EXCEPTIONS.—

‘‘(i) INDIVIDUALS ELIGIBLE BECAUSE OF OTHER AID

OR ASSISTANCE,  ELDERLY INDIVIDUALS,  MEDICALLY

NEEDY INDIVIDUALS,  AND INDIVIDUALS ELIGIBLE FOR

MEDICARE COST-SHARING.—Subparagraphs (A), (B), and

(C) shall not apply to the determination of eligibility

under the State plan or under a waiver for medical

assistance for the following:

‘‘(I) Individuals who are eligible for medical

assistance under the State plan or under a waiver

of the plan on a basis that does not require a

determination of income by the State agency

administering the State plan or waiver, including

as a result of eligibility for, or receipt of, other

Federal or State aid or assistance, individuals who

are eligible on the basis of receiving (or being

treated as if receiving) supplemental security

income benefits under title XVI, and individuals

who are eligible as a result of being or being

deemed to be a child in foster care under the

responsibility of the State.

‘‘(II) Individuals who have attained age 65.

‘‘(III) Individuals who qualify for medical

assistance under the State plan or under any

waiver of such plan on the basis of being blind

or disabled (or being treated as being blind or

disabled) without regard to whether the individual

is eligible for supplemental security income benefits under title XVI on the basis of being blind

or disabled and including an individual who is

eligible for medical assistance on the basis of section 1902(e)(3).

‘‘(IV) Individuals described in subsection

(a)(10)(C).

‘‘(V) Individuals described in any clause of subsection (a)(10)(E).

‘‘(ii) EXPRESS LANE AGENCY FINDINGS.—In the case

of a State that elects the Express Lane option under

paragraph (13), notwithstanding subparagraphs (A),

(B), and (C), the State may rely on a finding made

by an Express Lane agency in accordance with that

paragraph relating to the income of an individual for

purposes of determining the individual’s eligibility for

medical assistance under the State plan or under a

waiver of the plan.

‘‘(iii) MEDICARE PRESCRIPTION DRUG SUBSIDIES

DETERMINATIONS.—Subparagraphs (A), (B), and (C)

shall not apply to any determinations of eligibility

for premium and cost-sharing subsidies under and in H. R. 3590—163

accordance with section 1860D–14 made by the State

pursuant to section 1935(a)(2).

‘‘(iv) LONG-TERM CARE.—Subparagraphs (A), (B),

and (C) shall not apply to any determinations of eligibility of individuals for purposes of medical assistance

for nursing facility services, a level of care in any

institution equivalent to that of nursing facility services, home or community-based services furnished

under a waiver or State plan amendment under section

1915 or a waiver under section 1115, and services

described in section 1917(c)(1)(C)(ii).

‘‘(v) GRANDFATHER OF CURRENT ENROLLEES UNTIL

DATE OF NEXT REGULAR REDETERMINATION.—An individual who, on January 1, 2014, is enrolled in the

State plan or under a waiver of the plan and who

would be determined ineligible for medical assistance

solely because of the application of the modified gross

income or household income standard described in

subparagraph (A), shall remain eligible for medical

assistance under the State plan or waiver (and subject

to the same premiums and cost-sharing as applied

to the individual on that date) through March 31,

2014, or the date on which the individual’s next regularly scheduled redetermination of eligibility is to

occur, whichever is later.

‘‘(E) TRANSITION PLANNING AND OVERSIGHT.—Each

State shall submit to the Secretary for the Secretary’s

approval the income eligibility thresholds proposed to be

established using modified gross income and household

income, the methodologies and procedures to be used to

determine income eligibility using modified gross income

and household income and, if applicable, a State plan

amendment establishing an optional eligibility category

under subsection (a)(10)(A)(ii)(XX). To the extent practicable, the State shall use the same methodologies and

procedures for purposes of making such determinations

as the State used on the date of enactment of the Patient

Protection and Affordable Care Act. The Secretary shall

ensure that the income eligibility thresholds proposed to

be established using modified gross income and household

income, including under the eligibility category established

under subsection (a)(10)(A)(ii)(XX), and the methodologies

and procedures proposed to be used to determine income

eligibility, will not result in children who would have been

eligible for medical assistance under the State plan or

under a waiver of the plan on the date of enactment of

the Patient Protection and Affordable Care Act no longer

being eligible for such assistance.

‘‘(F) LIMITATION ON SECRETARIAL AUTHORITY.—The Secretary shall not waive compliance with the requirements

of this paragraph except to the extent necessary to permit

a State to coordinate eligibility requirements for dual

eligible individuals (as defined in section 1915(h)(2)(B))

under the State plan or under a waiver of the plan and

under title XVIII and individuals who require the level

of care provided in a hospital, a nursing facility, or an

intermediate care facility for the mentally retarded. H. R. 3590—164

‘‘(G) DEFINITIONS OF MODIFIED GROSS INCOME AND

HOUSEHOLD INCOME.—In this paragraph, the terms ‘modified gross income’ and ‘household income’ have the

meanings given such terms in section 36B(d)(2) of the

Internal Revenue Code of 1986.

‘‘(H) CONTINUED APPLICATION OF MEDICAID RULES

REGARDING POINT-IN-TIME INCOME AND SOURCES OF

INCOME.—The requirement under this paragraph for States

to use modified gross income and household income to

determine income eligibility for medical assistance under

the State plan or under any waiver of such plan and

for any other purpose applicable under the plan or waiver

for which a determination of income is required shall not

be construed as affecting or limiting the application of—

‘‘(i) the requirement under this title and under

the State plan or a waiver of the plan to determine

an individual’s income as of the point in time at which

an application for medical assistance under the State

plan or a waiver of the plan is processed; or

‘‘(ii) any rules established under this title or under

the State plan or a waiver of the plan regarding sources

of countable income.’’.

(b) CONFORMING AMENDMENT.—Section 1902(a)(17) of such Act

(42 U.S.C. 1396a(a)(17)) is amended by inserting ‘‘(e)(14),’’ before

‘‘(l)(3)’’.

(c) EFFECTIVE DATE.—The amendments made by subsections

(a) and (b) take effect on January 1, 2014.

SEC. 2003. REQUIREMENT TO OFFER PREMIUM ASSISTANCE FOR

EMPLOYER-SPONSORED INSURANCE.

(a) IN GENERAL.—Section 1906A of such Act (42 U.S.C. 1396e–

1) is amended—

(1) in subsection (a)—

(A) by striking ‘‘may elect to’’ and inserting ‘‘shall’’;

(B) by striking ‘‘under age 19’’; and

(C) by inserting ‘‘, in the case of an individual under

age 19,’’ after ‘‘(and’’;

(2) in subsection (c), in the first sentence, by striking ‘‘under

age 19’’; and

(3) in subsection (d)—

(A) in paragraph (2)—

(i) in the first sentence, by striking ‘‘under age

19’’; and

(ii) by striking the third sentence and inserting

‘‘A State may not require, as a condition of an individual (or the individual’s parent) being or remaining

eligible for medical assistance under this title, that

the individual (or the individual’s parent) apply for

enrollment in qualified employer-sponsored coverage

under this section.’’; and

(B) in paragraph (3), by striking ‘‘the parent of an

individual under age 19’’ and inserting ‘‘an individual (or

the parent of an individual)’’; and

(4) in subsection (e), by striking ‘‘under age 19’’ each place

it appears. H. R. 3590—165

(b) CONFORMING AMENDMENT.—The heading for section 1906A

of such Act (42 U.S.C. 1396e–1) is amended by striking ‘‘OPTION

FOR CHILDREN’’.

(c) EFFECTIVE DATE.—The amendments made by this section

take effect on January 1, 2014.

SEC. 2004. MEDICAID COVERAGE FOR FORMER FOSTER CARE CHILDREN.

(a) IN GENERAL.—Section 1902(a)(10)(A)(i) of the Social Security

Act (42 U.S.C. 1396a), as amended by section 2001(a)(1), is

amended—

(1) by striking ‘‘or’’ at the end of subclause (VII);

(2) by adding ‘‘or’’ at the end of subclause (VIII); and

(3) by inserting after subclause (VIII) the following:

‘‘(IX) who were in foster care under the responsibility of a State for more than 6 months (whether

or not consecutive) but are no longer in such care,

who are not described in any of subclauses (I)

through (VII) of this clause, and who are under

25 years of age;’’.

(b) OPTION TO PROVIDE PRESUMPTIVE ELIGIBILITY.—Section

1920(e) of such Act (42 U.S.C. 1396r–1(e)), as added by section

2001(a)(4)(B) and amended by section 2001(e)(2)(C), is amended

by inserting ‘‘, clause (i)(IX),’’ after ‘‘clause (i)(VIII)’’.

(c) CONFORMING AMENDMENTS.—

(1) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)),

as amended by section 2001(a)(5)(D), is amended by inserting

‘‘1902(a)(10)(A)(i)(IX),’’ after ‘‘1902(a)(10)(A)(i)(VIII),’’.

(2) Section 1937(a)(2)(B)(viii) of such Act (42 U.S.C. 1396u–

7(a)(2)(B)(viii)) is amended by inserting ‘‘, or the individual

qualifies for medical assistance on the basis of section

1902(a)(10)(A)(i)(IX)’’ before the period.

(d) EFFECTIVE DATE.—The amendments made by this section

take effect on January 1, 2019.

SEC. 2005. PAYMENTS TO TERRITORIES.

(a) INCREASE IN LIMIT ON PAYMENTS.—Section 1108(g) of the

Social Security Act (42 U.S.C. 1308(g)) is amended—

(1) in paragraph (2), in the matter preceding subparagraph

(A), by striking ‘‘paragraph (3)’’ and inserting ‘‘paragraphs (3)

and (5)’’;

(2) in paragraph (4), by striking ‘‘and (3)’’ and inserting

‘‘(3), and (4)’’; and

(3) by adding at the end the following paragraph:

‘‘(5) FISCAL YEAR 2011 AND THEREAFTER.—The amounts

otherwise determined under this subsection for Puerto Rico,

the Virgin Islands, Guam, the Northern Mariana Islands, and

American Samoa for the second, third, and fourth quarters

of fiscal year 2011, and for each fiscal year after fiscal year

2011 (after the application of subsection (f) and the preceding

paragraphs of this subsection), shall be increased by 30 percent.’’.

(b) DISREGARD OF PAYMENTS FOR MANDATORY EXPANDED

ENROLLMENT.—Section 1108(g)(4) of such Act (42 U.S.C. 1308(g)(4))

is amended—

(1) by striking ‘‘to fiscal years beginning’’ and inserting

‘‘to—

‘‘(A) fiscal years beginning’’; H. R. 3590—166

(2) by striking the period at the end and inserting ‘‘; and’’;

and

(3) by adding at the end the following:

‘‘(B) fiscal years beginning with fiscal year 2014, payments made to Puerto Rico, the Virgin Islands, Guam,

the Northern Mariana Islands, or American Samoa with

respect to amounts expended for medical assistance for

newly eligible (as defined in section 1905(y)(2)) nonpregnant childless adults who are eligible under subclause

(VIII) of section 1902(a)(10)(A)(i) and whose income (as

determined under section 1902(e)(14)) does not exceed (in

the case of each such commonwealth and territory respectively) the income eligibility level in effect for that population under title XIX or under a waiver on the date of

enactment of the Patient Protection and Affordable Care

Act, shall not be taken into account in applying subsection

(f) (as increased in accordance with paragraphs (1), (2),

(3), and (5) of this subsection) to such commonwealth or

territory for such fiscal year.’’.

(c) INCREASED FMAP.—

(1) IN GENERAL.—The first sentence of section 1905(b) of

the Social Security Act (42 U.S.C. 1396d(b)) is amended by

striking ‘‘shall be 50 per centum’’ and inserting ‘‘shall be 55

percent’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) takes effect on January 1, 2011.

SEC. 2006. SPECIAL ADJUSTMENT TO FMAP DETERMINATION FOR CERTAIN STATES RECOVERING FROM A MAJOR DISASTER.

Section 1905 of the Social Security Act (42 U.S.C. 1396d),

as amended by sections 2001(a)(3) and 2001(b)(2), is amended—

(1) in subsection (b), in the first sentence, by striking

‘‘subsection (y)’’ and inserting ‘‘subsections (y) and (aa)’’; and

(2) by adding at the end the following new subsection:

‘‘(aa)(1) Notwithstanding subsection (b), beginning January 1,

2011, the Federal medical assistance percentage for a fiscal year

for a disaster-recovery FMAP adjustment State shall be equal to

the following:

‘‘(A) In the case of the first fiscal year (or part of a fiscal

year) for which this subsection applies to the State, the Federal

medical assistance percentage determined for the fiscal year

without regard to this subsection and subsection (y), increased

by 50 percent of the number of percentage points by which

the Federal medical assistance percentage determined for the

State for the fiscal year without regard to this subsection

and subsection (y), is less than the Federal medical assistance

percentage determined for the State for the preceding fiscal

year after the application of only subsection (a) of section 5001

of Public Law 111–5 (if applicable to the preceding fiscal year)

and without regard to this subsection, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5.

‘‘(B) In the case of the second or any succeeding fiscal

year for which this subsection applies to the State, the Federal

medical assistance percentage determined for the preceding

fiscal year under this subsection for the State, increased by

25 percent of the number of percentage points by which the

Federal medical assistance percentage determined for the State H. R. 3590—167

for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year

under this subsection.

‘‘(2) In this subsection, the term ‘disaster-recovery FMAP

adjustment State’ means a State that is one of the 50 States

or the District of Columbia, for which, at any time during the

preceding 7 fiscal years, the President has declared a major disaster

under section 401 of the Robert T. Stafford Disaster Relief and

Emergency Assistance Act and determined as a result of such

disaster that every county or parish in the State warrant individual

and public assistance or public assistance from the Federal Government under such Act and for which—

‘‘(A) in the case of the first fiscal year (or part of a fiscal

year) for which this subsection applies to the State, the Federal

medical assistance percentage determined for the State for

the fiscal year without regard to this subsection and subsection

(y), is less than the Federal medical assistance percentage

determined for the State for the preceding fiscal year after

the application of only subsection (a) of section 5001 of Public

Law 111–5 (if applicable to the preceding fiscal year) and

without regard to this subsection, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5, by

at least 3 percentage points; and

‘‘(B) in the case of the second or any succeeding fiscal

year for which this subsection applies to the State, the Federal

medical assistance percentage determined for the State for

the fiscal year without regard to this subsection and subsection

(y), is less than the Federal medical assistance percentage

determined for the State for the preceding fiscal year under

this subsection by at least 3 percentage points.

‘‘(3) The Federal medical assistance percentage determined for

a disaster-recovery FMAP adjustment State under paragraph (1)

shall apply for purposes of this title (other than with respect to

disproportionate share hospital payments described in section 1923

and payments under this title that are based on the enhanced

FMAP described in 2105(b)) and shall not apply with respect to

payments under title IV (other than under part E of title IV)

or payments under title XXI.’’.

SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION.

(a) RESCISSION.—Any amounts available to the Medicaid

Improvement Fund established under section 1941 of the Social

Security Act (42 U.S.C. 1396w–1) for any of fiscal years 2014

through 2018 that are available for expenditure from the Fund

and that are not so obligated as of the date of the enactment

of this Act are rescinded.

(b) CONFORMING AMENDMENTS.—Section 1941(b)(1) of the Social

Security Act (42 U.S.C. 1396w–1(b)(1)) is amended—

(1) in subparagraph (A), by striking ‘‘$100,000,000’’ and

inserting ‘‘$0’’; and

(2) in subparagraph (B), by striking ‘‘$150,000,000’’ and

inserting ‘‘$0’’. H. R. 3590—168

Subtitle B—Enhanced Support for the

Children’s Health Insurance Program

SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR

CHIP.

(a) IN GENERAL.—Section 2105(b) of the Social Security Act

(42 U.S.C. 1397ee(b)) is amended by adding at the end the following:

‘‘Notwithstanding the preceding sentence, during the period that

begins on October 1, 2013, and ends on September 30, 2019, the

enhanced FMAP determined for a State for a fiscal year (or for

any portion of a fiscal year occurring during such period) shall

be increased by 23 percentage points, but in no case shall exceed

100 percent. The increase in the enhanced FMAP under the preceding sentence shall not apply with respect to determining the

payment to a State under subsection (a)(1) for expenditures

described in subparagraph (D)(iv), paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first sentence of section 1905(b).’’.

(b) MAINTENANCE OF EFFORT.—

(1) IN GENERAL.—Section 2105(d) of the Social Security

Act (42 U.S.C. 1397ee(d)) is amended by adding at the end

the following:

‘‘(3) CONTINUATION OF ELIGIBILITY STANDARDS FOR CHILDREN UNTIL OCTOBER 1, 2019.—

‘‘(A) IN GENERAL.—During the period that begins on

the date of enactment of the Patient Protection and Affordable Care Act and ends on September 30, 2019, a State

shall not have in effect eligibility standards, methodologies,

or procedures under its State child health plan (including

any waiver under such plan) for children (including children provided medical assistance for which payment is

made under section 2105(a)(1)(A)) that are more restrictive

than the eligibility standards, methodologies, or procedures,

respectively, under such plan (or waiver) as in effect on

the date of enactment of that Act. The preceding sentence

shall not be construed as preventing a State during such

period from—

‘‘(i) applying eligibility standards, methodologies,

or procedures for children under the State child health

plan or under any waiver of the plan that are less

restrictive than the eligibility standards, methodologies, or procedures, respectively, for children under

the plan or waiver that are in effect on the date of

enactment of such Act; or

‘‘(ii) imposing a limitation described in section

2112(b)(7) for a fiscal year in order to limit expenditures under the State child health plan to those for

which Federal financial participation is available under

this section for the fiscal year.

‘‘(B) ASSURANCE OF EXCHANGE COVERAGE FOR TARGETED LOW-INCOME CHILDREN UNABLE TO BE PROVIDED

CHILD HEALTH ASSISTANCE AS A RESULT OF FUNDING SHORTFALLS.—In the event that allotments provided under section

2104 are insufficient to provide coverage to all children

who are eligible to be targeted low-income children under

the State child health plan under this title, a State shall H. R. 3590—169

establish procedures to ensure that such children are provided coverage through an Exchange established by the

State under section 1311 of the Patient Protection and

Affordable Care Act.’’.

(2) CONFORMING AMENDMENT TO TITLE XXI MEDICAID

MAINTENANCE OF EFFORT.—Section 2105(d)(1) of the Social

Security Act (42 U.S.C. 1397ee(d)(1)) is amended by adding

before the period ‘‘, except as required under section

1902(e)(14)’’.

(c) NO ENROLLMENT BONUS PAYMENTS FOR CHILDREN

ENROLLED AFTER FISCAL YEAR 2013.—Section 2105(a)(3)(F)(iii) of

the Social Security Act (42 U.S.C. 1397ee(a)(3)(F)(iii)) is amended

by inserting ‘‘or any children enrolled on or after October 1, 2013’’

before the period.

(d) INCOME ELIGIBILITY DETERMINED USING MODIFIED GROSS

INCOME.—

(1) STATE PLAN REQUIREMENT.—Section 2102(b)(1)(B) of the

Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended—

(A) in clause (iii), by striking ‘‘and’’ after the semicolon;

(B) in clause (iv), by striking the period and inserting

‘‘; and’’; and

(C) by adding at the end the following:

‘‘(v) shall, beginning January 1, 2014, use modified

gross income and household income (as defined in section 36B(d)(2) of the Internal Revenue Code of 1986)

to determine eligibility for child health assistance

under the State child health plan or under any waiver

of such plan and for any other purpose applicable

under the plan or waiver for which a determination

of income is required, including with respect to the

imposition of premiums and cost-sharing, consistent

with section 1902(e)(14).’’.

(2) CONFORMING AMENDMENT.—Section 2107(e)(1) of the

Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended—

(A) by redesignating subparagraphs (E) through (L)

as subparagraphs (F) through (M), respectively; and

(B) by inserting after subparagraph (D), the following:

‘‘(E) Section 1902(e)(14) (relating to income determined

using modified gross income and household income).’’.

(e) APPLICATION OF STREAMLINED ENROLLMENT SYSTEM.—Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)),

as amended by subsection (d)(2), is amended by adding at the

end the following:

‘‘(N) Section 1943(b) (relating to coordination with

State Exchanges and the State Medicaid agency).’’.

(f) CHIP ELIGIBILITY FOR CHILDREN INELIGIBLE FOR MEDICAID

AS A RESULT OF ELIMINATION OF DISREGARDS.—Notwithstanding

any other provision of law, a State shall treat any child who

is determined to be ineligible for medical assistance under the

State Medicaid plan or under a waiver of the plan as a result

of the elimination of the application of an income disregard based

on expense or type of income, as required under section 1902(e)(14)

of the Social Security Act (as added by this Act), as a targeted

low-income child under section 2110(b) (unless the child is excluded

under paragraph (2) of that section) and shall provide child health

assistance to the child under the State child health plan (whether H. R. 3590—170

implemented under title XIX or XXI, or both, of the Social Security

Act).

SEC. 2102. TECHNICAL CORRECTIONS.

(a) CHIPRA.—Effective as if included in the enactment of the

Children’s Health Insurance Program Reauthorization Act of 2009

(Public Law 111–3) (in this section referred to as ‘‘CHIPRA’’):

(1) Section 2104(m) of the Social Security Act, as added

by section 102 of CHIPRA, is amended—

(A) by redesignating paragraph (7) as paragraph (8);

and

(B) by inserting after paragraph (6), the following:

‘‘(7) ADJUSTMENT OF FISCAL YEAR 2010 ALLOTMENTS TO

ACCOUNT FOR CHANGES IN PROJECTED SPENDING FOR CERTAIN

PREVIOUSLY APPROVED EXPANSION PROGRAMS.—For purposes of

recalculating the fiscal year 2010 allotment, in the case of

one of the 50 States or the District of Columbia that has

an approved State plan amendment effective January 1, 2006,

to provide child health assistance through the provision of

benefits under the State plan under title XIX for children

from birth through age 5 whose family income does not exceed

200 percent of the poverty line, the Secretary shall increase

the allotment by an amount that would be equal to the Federal

share of expenditures that would have been claimed at the

enhanced FMAP rate rather than the Federal medical assistance percentage matching rate for such population.’’.

(2) Section 605 of CHIPRA is amended by striking ‘‘legal

residents’’ and insert ‘‘lawfully residing in the United States’’.

(3) Subclauses (I) and (II) of paragraph (3)(C)(i) of section

2105(a) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(ii)),

as added by section 104 of CHIPRA, are each amended by

striking ‘‘, respectively’’.

(4) Section 2105(a)(3)(E)(ii) of the Social Security Act (42

U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of CHIPRA,

is amended by striking subclause (IV).

(5) Section 2105(c)(9)(B) of the Social Security Act (42

U.S.C. 1397e(c)(9)(B)), as added by section 211(c)(1) of CHIPRA,

is amended by striking ‘‘section 1903(a)(3)(F)’’ and inserting

‘‘section 1903(a)(3)(G)’’.

(6) Section 2109(b)(2)(B) of the Social Security Act (42

U.S.C. 1397ii(b)(2)(B)), as added by section 602 of CHIPRA,

is amended by striking ‘‘the child population growth factor

under section 2104(m)(5)(B)’’ and inserting ‘‘a high-performing

State under section 2111(b)(3)(B)’’.

(7) Section 2110(c)(9)(B)(v) of the Social Security Act (42

U.S.C. 1397jj(c)(9)(B)(v)), as added by section 505(b) of CHIPRA,

is amended by striking ‘‘school or school system’’ and inserting

‘‘local educational agency (as defined under section 9101 of

the Elementary and Secondary Education Act of 1965’’.

(8) Section 211(a)(1)(B) of CHIPRA is amended—

(A) by striking ‘‘is amended’’ and all that follows

through ‘‘adding’’ and inserting ‘‘is amended by adding’’;

and

(B) by redesignating the new subparagraph to be added

by such section to section 1903(a)(3) of the Social Security

Act as a new subparagraph (H). H. R. 3590—171

(b) ARRA.—Effective as if included in the enactment of section

5006(a) of division B of the American Recovery and Reinvestment

Act of 2009 (Public Law 111–5), the second sentence of section

1916A(a)(1) of the Social Security Act (42 U.S.C. 1396o–1(a)(1))

is amended by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (j)’’.

Subtitle C—Medicaid and CHIP

Enrollment Simplification

SEC. 2201. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH

STATE HEALTH INSURANCE EXCHANGES.

Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.)

is amended by adding at the end the following:

‘‘SEC. 1943. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH

STATE HEALTH INSURANCE EXCHANGES.

‘‘(a) CONDITION FOR PARTICIPATION IN MEDICAID.—As a condition of the State plan under this title and receipt of any Federal

financial assistance under section 1903(a) for calendar quarters

beginning after January 1, 2014, a State shall ensure that the

requirements of subsection (b) is met.

‘‘(b) ENROLLMENT SIMPLIFICATION AND COORDINATION WITH

STATE HEALTH INSURANCE EXCHANGES AND CHIP.—

‘‘(1) IN GENERAL.—A State shall establish procedures for—

‘‘(A) enabling individuals, through an Internet website

that meets the requirements of paragraph (4), to apply

for medical assistance under the State plan or under a

waiver of the plan, to be enrolled in the State plan or

waiver, to renew their enrollment in the plan or waiver,

and to consent to enrollment or reenrollment in the State

plan through electronic signature;

‘‘(B) enrolling, without any further determination by

the State and through such website, individuals who are

identified by an Exchange established by the State under

section 1311 of the Patient Protection and Affordable Care

Act as being eligible for—

‘‘(i) medical assistance under the State plan or

under a waiver of the plan; or

‘‘(ii) child health assistance under the State child

health plan under title XXI;

‘‘(C) ensuring that individuals who apply for but are

determined to be ineligible for medical assistance under

the State plan or a waiver or ineligible for child health

assistance under the State child health plan under title

XXI, are screened for eligibility for enrollment in qualified

health plans offered through such an Exchange and, if

applicable, premium assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue

Code of 1986 (and, if applicable, advance payment of such

assistance under section 1412 of the Patient Protection

and Affordable Care Act), and, if eligible, enrolled in such

a plan without having to submit an additional or separate

application, and that such individuals receive information

regarding reduced cost-sharing for eligible individuals

under section 1402 of the Patient Protection and Affordable H. R. 3590—172

Care Act, and any other assistance or subsidies available

for coverage obtained through the Exchange;

‘‘(D) ensuring that the State agency responsible for

administering the State plan under this title (in this section

referred to as the ‘State Medicaid agency’), the State agency

responsible for administering the State child health plan

under title XXI (in this section referred to as the ‘State

CHIP agency’) and an Exchange established by the State

under section 1311 of the Patient Protection and Affordable

Care Act utilize a secure electronic interface sufficient to

allow for a determination of an individual’s eligibility for

such medical assistance, child health assistance, or premium assistance, and enrollment in the State plan under

this title, title XXI, or a qualified health plan, as appropriate;

‘‘(E) coordinating, for individuals who are enrolled in

the State plan or under a waiver of the plan and who

are also enrolled in a qualified health plan offered through

such an Exchange, and for individuals who are enrolled

in the State child health plan under title XXI and who

are also enrolled in a qualified health plan, the provision

of medical assistance or child health assistance to such

individuals with the coverage provided under the qualified

health plan in which they are enrolled, including services

described in section 1905(a)(4)(B) (relating to early and

periodic screening, diagnostic, and treatment services

defined in section 1905(r)) and provided in accordance with

the requirements of section 1902(a)(43); and

‘‘(F) conducting outreach to and enrolling vulnerable

and underserved populations eligible for medical assistance

under this title XIX or for child health assistance under

title XXI, including children, unaccompanied homeless

youth, children and youth with special health care needs,

pregnant women, racial and ethnic minorities, rural populations, victims of abuse or trauma, individuals with mental

health or substance-related disorders, and individuals with

HIV/AIDS.

‘‘(2) AGREEMENTS WITH STATE HEALTH INSURANCE

EXCHANGES.—The State Medicaid agency and the State CHIP

agency may enter into an agreement with an Exchange established by the State under section 1311 of the Patient Protection

and Affordable Care Act under which the State Medicaid agency

or State CHIP agency may determine whether a State resident

is eligible for premium assistance for the purchase of a qualified

health plan under section 36B of the Internal Revenue Code

of 1986 (and, if applicable, advance payment of such assistance

under section 1412 of the Patient Protection and Affordable

Care Act), so long as the agreement meets such conditions

and requirements as the Secretary of the Treasury may prescribe to reduce administrative costs and the likelihood of eligibility errors and disruptions in coverage.

‘‘(3) STREAMLINED ENROLLMENT SYSTEM.—The State Medicaid agency and State CHIP agency shall participate in and

comply with the requirements for the system established under

section 1413 of the Patient Protection and Affordable Care

Act (relating to streamlined procedures for enrollment through

an Exchange, Medicaid, and CHIP). H. R. 3590—173

‘‘(4) ENROLLMENT WEBSITE REQUIREMENTS.—The procedures established by State under paragraph (1) shall include

establishing and having in operation, not later than January

1, 2014, an Internet website that is linked to any website

of an Exchange established by the State under section 1311

of the Patient Protection and Affordable Care Act and to the

State CHIP agency (if different from the State Medicaid agency)

and allows an individual who is eligible for medical assistance

under the State plan or under a waiver of the plan and who

is eligible to receive premium credit assistance for the purchase

of a qualified health plan under section 36B of the Internal

Revenue Code of 1986 to compare the benefits, premiums,

and cost-sharing applicable to the individual under the State

plan or waiver with the benefits, premiums, and cost-sharing

available to the individual under a qualified health plan offered

through such an Exchange, including, in the case of a child,

the coverage that would be provided for the child through

the State plan or waiver with the coverage that would be

provided to the child through enrollment in family coverage

under that plan and as supplemental coverage by the State

under the State plan or waiver.

‘‘(5) CONTINUED NEED FOR ASSESSMENT FOR HOME AND

COMMUNITY-BASED SERVICES.—Nothing in paragraph (1) shall

limit or modify the requirement that the State assess an individual for purposes of providing home and community-based

services under the State plan or under any waiver of such

plan for individuals described in subsection (a)(10)(A)(ii)(VI).’’.

SEC. 2202. PERMITTING HOSPITALS TO MAKE PRESUMPTIVE ELIGIBILITY DETERMINATIONS FOR ALL MEDICAID ELIGIBLE

POPULATIONS.

(a) IN GENERAL.—Section 1902(a)(47) of the Social Security

Act (42 U.S.C. 1396a(a)(47)) is amended—

(1) by striking ‘‘at the option of the State, provide’’ and

inserting ‘‘provide—

‘‘(A) at the option of the State,’’;

(2) by inserting ‘‘and’’ after the semicolon; and

(3) by adding at the end the following:

‘‘(B) that any hospital that is a participating provider

under the State plan may elect to be a qualified entity

for purposes of determining, on the basis of preliminary

information, whether any individual is eligible for medical

assistance under the State plan or under a waiver of the

plan for purposes of providing the individual with medical

assistance during a presumptive eligibility period, in the

same manner, and subject to the same requirements, as

apply to the State options with respect to populations

described in section 1920, 1920A, or 1920B (but without

regard to whether the State has elected to provide for

a presumptive eligibility period under any such sections),

subject to such guidance as the Secretary shall establish;’’.

(b) CONFORMING AMENDMENT.—Section 1903(u)(1)(D)(v) of such

Act (42 U.S.C. 1396b(u)(1)(D)v)) is amended—

(1) by striking ‘‘or for’’ and inserting ‘‘for’’; and

(2) by inserting before the period at the end the following:

‘‘, or for medical assistance provided to an individual during

a presumptive eligibility period resulting from a determination H. R. 3590—174

of presumptive eligibility made by a hospital that elects under

section 1902(a)(47)(B) to be a qualified entity for such purpose’’.

(c) EFFECTIVE DATE.—The amendments made by this section

take effect on January 1, 2014, and apply to services furnished

on or after that date.

Subtitle D—Improvements to Medicaid

Services

SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

(a) IN GENERAL.—Section 1905 of the Social Security Act (42

U.S.C. 1396d), is amended—

(1) in subsection (a)—

(A) in paragraph (27), by striking ‘‘and’’ at the end;

(B) by redesignating paragraph (28) as paragraph (29);

and

(C) by inserting after paragraph (27) the following

new paragraph:

‘‘(28) freestanding birth center services (as defined in subsection (l)(3)(A)) and other ambulatory services that are offered

by a freestanding birth center (as defined in subsection (l)(3)(B))

and that are otherwise included in the plan; and’’; and

(2) in subsection (l), by adding at the end the following

new paragraph:

‘‘(3)(A) The term ‘freestanding birth center services’ means services furnished to an individual at a freestanding birth center (as

defined in subparagraph (B)) at such center.

‘‘(B) The term ‘freestanding birth center’ means a health

facility—

‘‘(i) that is not a hospital;

‘‘(ii) where childbirth is planned to occur away from the

pregnant woman’s residence;

‘‘(iii) that is licensed or otherwise approved by the State

to provide prenatal labor and delivery or postpartum care and

other ambulatory services that are included in the plan; and

‘‘(iv) that complies with such other requirements relating

to the health and safety of individuals furnished services by

the facility as the State shall establish.

‘‘(C) A State shall provide separate payments to providers

administering prenatal labor and delivery or postpartum care in

a freestanding birth center (as defined in subparagraph (B)), such

as nurse midwives and other providers of services such as birth

attendants recognized under State law, as determined appropriate

by the Secretary. For purposes of the preceding sentence, the term

‘birth attendant’ means an individual who is recognized or registered by the State involved to provide health care at childbirth

and who provides such care within the scope of practice under

which the individual is legally authorized to perform such care

under State law (or the State regulatory mechanism provided by

State law), regardless of whether the individual is under the supervision of, or associated with, a physician or other health care

provider. Nothing in this subparagraph shall be construed as

changing State law requirements applicable to a birth attendant.’’.

(b) CONFORMING AMENDMENT.—Section 1902(a)(10)(A) of the

Social Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the H. R. 3590—175

matter preceding clause (i) by striking ‘‘and (21)’’ and inserting

‘‘, (21), and (28)’’.

(c) EFFECTIVE DATE.—

(1) IN GENERAL.—Except as provided in paragraph (2), the

amendments made by this section shall take effect on the

date of the enactment of this Act and shall apply to services

furnished on or after such date.

(2) EXCEPTION IF STATE LEGISLATION REQUIRED.—In the

case of a State plan for medical assistance under title XIX

of the Social Security Act which the Secretary of Health and

Human Services determines requires State legislation (other

than legislation appropriating funds) in order for the plan to

meet the additional requirement imposed by the amendments

made by this section, the State plan shall not be regarded

as failing to comply with the requirements of such title solely

on the basis of its failure to meet this additional requirement

before the first day of the first calendar quarter beginning

after the close of the first regular session of the State legislature

that begins after the date of the enactment of this Act. For

purposes of the previous sentence, in the case of a State that

has a 2-year legislative session, each year of such session

shall be deemed to be a separate regular session of the State

legislature.

SEC. 2302. CONCURRENT CARE FOR CHILDREN.

(a) IN GENERAL.—Section 1905(o)(1) of the Social Security Act

(42 U.S.C. 1396d(o)(1)) is amended—

(1) in subparagraph (A), by striking ‘‘subparagraph (B)’’

and inserting ‘‘subparagraphs (B) and (C)’’; and

(2) by adding at the end the following new subparagraph:

‘‘(C) A voluntary election to have payment made for hospice

care for a child (as defined by the State) shall not constitute

a waiver of any rights of the child to be provided with, or to

have payment made under this title for, services that are related

to the treatment of the child’s condition for which a diagnosis

of terminal illness has been made.’’.

(b) APPLICATION TO CHIP.—Section 2110(a)(23) of the Social

Security Act (42 U.S.C. 1397jj(a)(23)) is amended by inserting

‘‘(concurrent, in the case of an individual who is a child, with

care related to the treatment of the child’s condition with respect

to which a diagnosis of terminal illness has been made’’ after

‘‘hospice care’’.

SEC. 2303. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

(a) COVERAGE AS OPTIONAL CATEGORICALLY NEEDY GROUP.—

(1) IN GENERAL.—Section 1902(a)(10)(A)(ii) of the Social

Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by

section 2001(e), is amended—

(A) in subclause (XIX), by striking ‘‘or’’ at the end;

(B) in subclause (XX), by adding ‘‘or’’ at the end; and

(C) by adding at the end the following new subclause:

‘‘(XXI) who are described in subsection (ii)

(relating to individuals who meet certain income

standards);’’.

(2) GROUP DESCRIBED.—Section 1902 of such Act (42 U.S.C.

1396a), as amended by section 2001(d), is amended by adding

at the end the following new subsection: H. R. 3590—176

‘‘(ii)(1) Individuals described in this subsection are individuals—

‘‘(A) whose income does not exceed an income eligibility

level established by the State that does not exceed the

highest income eligibility level established under the State

plan under this title (or under its State child health plan

under title XXI) for pregnant women; and

‘‘(B) who are not pregnant.

‘‘(2) At the option of a State, individuals described in this

subsection may include individuals who, had individuals

applied on or before January 1, 2007, would have been made

eligible pursuant to the standards and processes imposed by

that State for benefits described in clause (XV) of the matter

following subparagraph (G) of section subsection (a)(10) pursuant to a waiver granted under section 1115.

‘‘(3) At the option of a State, for purposes of subsection

(a)(17)(B), in determining eligibility for services under this subsection, the State may consider only the income of the applicant

or recipient.’’.

(3) LIMITATION ON BENEFITS.—Section 1902(a)(10) of the

Social Security Act (42 U.S.C. 1396a(a)(10)), as amended by

section 2001(a)(5)(A), is amended in the matter following

subparagraph (G)—

(A) by striking ‘‘and (XV)’’ and inserting ‘‘(XV)’’; and

(B) by inserting ‘‘, and (XVI) the medical assistance

made available to an individual described in subsection

(ii) shall be limited to family planning services and supplies

described in section 1905(a)(4)(C) including medical diagnosis and treatment services that are provided pursuant

to a family planning service in a family planning setting’’

before the semicolon.

(4) CONFORMING AMENDMENTS.—

(A) Section 1905(a) of the Social Security Act (42 U.S.C.

1396d(a)), as amended by section 2001(e)(2)(A), is amended

in the matter preceding paragraph (1)—

(i) in clause (xiv), by striking ‘‘or’’ at the end;

(ii) in clause (xv), by adding ‘‘or’’ at the end; and

(iii) by inserting after clause (xv) the following:

‘‘(xvi) individuals described in section 1902(ii),’’.

(B) Section 1903(f)(4) of such Act (42 U.S.C.

1396b(f)(4)), as amended by section 2001(e)(2)(B), is

amended by inserting ‘‘1902(a)(10)(A)(ii)(XXI),’’ after

‘‘1902(a)(10)(A)(ii)(XX),’’.

(b) PRESUMPTIVE ELIGIBILITY.—

(1) IN GENERAL.—Title XIX of the Social Security Act (42

U.S.C. 1396 et seq.) is amended by inserting after section

1920B the following:

‘‘PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING SERVICES

‘‘SEC. 1920C. (a) STATE OPTION.—State plan approved under

section 1902 may provide for making medical assistance available

to an individual described in section 1902(ii) (relating to individuals

who meet certain income eligibility standard) during a presumptive

eligibility period. In the case of an individual described in section

1902(ii), such medical assistance shall be limited to family planning

services and supplies described in 1905(a)(4)(C) and, at the State’s

option, medical diagnosis and treatment services that are provided H. R. 3590—177

in conjunction with a family planning service in a family planning

setting.

‘‘(b) DEFINITIONS.—For purposes of this section:

‘‘(1) PRESUMPTIVE ELIGIBILITY PERIOD.—The term ‘presumptive eligibility period’ means, with respect to an individual

described in subsection (a), the period that—

‘‘(A) begins with the date on which a qualified entity

determines, on the basis of preliminary information, that

the individual is described in section 1902(ii); and

‘‘(B) ends with (and includes) the earlier of—

‘‘(i) the day on which a determination is made

with respect to the eligibility of such individual for

services under the State plan; or

‘‘(ii) in the case of such an individual who does

not file an application by the last day of the month

following the month during which the entity makes

the determination referred to in subparagraph (A),

such last day.

‘‘(2) QUALIFIED ENTITY.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the

term ‘qualified entity’ means any entity that—

‘‘(i) is eligible for payments under a State plan

approved under this title; and

‘‘(ii) is determined by the State agency to be

capable of making determinations of the type described

in paragraph (1)(A).

‘‘(B) RULE OF CONSTRUCTION.—Nothing in this paragraph shall be construed as preventing a State from limiting the classes of entities that may become qualified

entities in order to prevent fraud and abuse.

‘‘(c) ADMINISTRATION.—

‘‘(1) IN GENERAL.—The State agency shall provide qualified

entities with—

‘‘(A) such forms as are necessary for an application

to be made by an individual described in subsection (a)

for medical assistance under the State plan; and

‘‘(B) information on how to assist such individuals in

completing and filing such forms.

‘‘(2) NOTIFICATION REQUIREMENTS.—A qualified entity that

determines under subsection (b)(1)(A) that an individual

described in subsection (a) is presumptively eligible for medical

assistance under a State plan shall—

‘‘(A) notify the State agency of the determination within

5 working days after the date on which determination

is made; and

‘‘(B) inform such individual at the time the determination is made that an application for medical assistance

is required to be made by not later than the last day

of the month following the month during which the determination is made.

‘‘(3) APPLICATION FOR MEDICAL ASSISTANCE.—In the case

of an individual described in subsection (a) who is determined

by a qualified entity to be presumptively eligible for medical

assistance under a State plan, the individual shall apply for

medical assistance by not later than the last day of the month

following the month during which the determination is made. H. R. 3590—178

‘‘(d) PAYMENT.—Notwithstanding any other provision of law,

medical assistance that—

‘‘(1) is furnished to an individual described in subsection

(a)—

‘‘(A) during a presumptive eligibility period; and

‘‘(B) by a entity that is eligible for payments under

the State plan; and

‘‘(2) is included in the care and services covered by the

State plan,

shall be treated as medical assistance provided by such plan for

purposes of clause (4) of the first sentence of section 1905(b).’’.

(2) CONFORMING AMENDMENTS.—

(A) Section 1902(a)(47) of the Social Security Act (42

U.S.C. 1396a(a)(47)), as amended by section 2202(a), is

amended—

(i) in subparagraph (A), by inserting before the

semicolon at the end the following: ‘‘and provide for

making medical assistance available to individuals

described in subsection (a) of section 1920C during

a presumptive eligibility period in accordance with

such section’’; and

(ii) in subparagraph (B), by striking ‘‘or 1920B’’

and inserting ‘‘1920B, or 1920C’’.

(B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C.

1396b(u)(1)(D)(v)), as amended by section 2202(b), is

amended by inserting ‘‘or for medical assistance provided

to an individual described in subsection (a) of section 1920C

during a presumptive eligibility period under such section,’’

after ‘‘1920B during a presumptive eligibility period under

such section,’’.

(c) CLARIFICATION OF COVERAGE OF FAMILY PLANNING SERVICES

AND SUPPLIES.—Section 1937(b) of the Social Security Act (42 U.S.C.

1396u–7(b)), as amended by section 2001(c), is amended by adding

at the end the following:

‘‘(7) COVERAGE OF FAMILY PLANNING SERVICES AND SUPPLIES.—Notwithstanding the previous provisions of this section,

a State may not provide for medical assistance through enrollment of an individual with benchmark coverage or benchmark-

equivalent coverage under this section unless such coverage

includes for any individual described in section 1905(a)(4)(C),

medical assistance for family planning services and supplies

in accordance with such section.’’.

(d) EFFECTIVE DATE.—The amendments made by this section

take effect on the date of the enactment of this Act and shall

apply to items and services furnished on or after such date.

SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE.

Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a))

is amended by inserting ‘‘or the care and services themselves,

or both’’ before ‘‘(if provided in or after’’. H. R. 3590—179

Subtitle E—New Options for States to

Provide Long-Term Services and Supports

SEC. 2401. COMMUNITY FIRST CHOICE OPTION.

Section 1915 of the Social Security Act (42 U.S.C. 1396n) is

amended by adding at the end the following:

‘‘(k) STATE PLAN OPTION TO PROVIDE HOME AND COMMUNITY-

BASED ATTENDANT SERVICES AND SUPPORTS.—

‘‘(1) IN GENERAL.—Subject to the succeeding provisions of

this subsection, beginning October 1, 2010, a State may provide

through a State plan amendment for the provision of medical

assistance for home and community-based attendant services

and supports for individuals who are eligible for medical assistance under the State plan whose income does not exceed 150

percent of the poverty line (as defined in section 2110(c)(5))

or, if greater, the income level applicable for an individual

who has been determined to require an institutional level of

care to be eligible for nursing facility services under the State

plan and with respect to whom there has been a determination

that, but for the provision of such services, the individuals

would require the level of care provided in a hospital, a nursing

facility, an intermediate care facility for the mentally retarded,

or an institution for mental diseases, the cost of which could

be reimbursed under the State plan, but only if the individual

chooses to receive such home and community-based attendant

services and supports, and only if the State meets the following

requirements:

‘‘(A) AVAILABILITY.—The State shall make available

home and community-based attendant services and supports to eligible individuals, as needed, to assist in accomplishing activities of daily living, instrumental activities

of daily living, and health-related tasks through hands-

on assistance, supervision, or cueing—

‘‘(i) under a person-centered plan of services and

supports that is based on an assessment of functional

need and that is agreed to in writing by the individual

or, as appropriate, the individual’s representative;

‘‘(ii) in a home or community setting, which does

not include a nursing facility, institution for mental

diseases, or an intermediate care facility for the mentally retarded;

‘‘(iii) under an agency-provider model or other

model (as defined in paragraph (6)(C )); and

‘‘(iv) the furnishing of which—

‘‘(I) is selected, managed, and dismissed by

the individual, or, as appropriate, with assistance

from the individual’s representative;

‘‘(II) is controlled, to the maximum extent possible, by the individual or where appropriate, the

individual’s representative, regardless of who may

act as the employer of record; and

‘‘(III) provided by an individual who is qualified to provide such services, including family

members (as defined by the Secretary).

‘‘(B) INCLUDED SERVICES AND SUPPORTS.—In addition

to assistance in accomplishing activities of daily living, H. R. 3590—180

instrumental activities of daily living, and health related

tasks, the home and community-based attendant services

and supports made available include—

‘‘(i) the acquisition, maintenance, and enhancement of skills necessary for the individual to accomplish activities of daily living, instrumental activities

of daily living, and health related tasks;

‘‘(ii) back-up systems or mechanisms (such as the

use of beepers or other electronic devices) to ensure

continuity of services and supports; and

‘‘(iii) voluntary training on how to select, manage,

and dismiss attendants.

‘‘(C) EXCLUDED SERVICES AND SUPPORTS.—Subject to

subparagraph (D), the home and community-based attendant services and supports made available do not include—

‘‘(i) room and board costs for the individual;

‘‘(ii) special education and related services provided

under the Individuals with Disabilities Education Act

and vocational rehabilitation services provided under

the Rehabilitation Act of 1973;

‘‘(iii) assistive technology devices and assistive

technology services other than those under (1)(B)(ii);

‘‘(iv) medical supplies and equipment; or

‘‘(v) home modifications.

‘‘(D) PERMISSIBLE SERVICES AND SUPPORTS.—The home

and community-based attendant services and supports may

include—

‘‘(i) expenditures for transition costs such as rent

and utility deposits, first month’s rent and utilities,

bedding, basic kitchen supplies, and other necessities

required for an individual to make the transition from

a nursing facility, institution for mental diseases, or

intermediate care facility for the mentally retarded

to a community-based home setting where the individual resides; and

‘‘(ii) expenditures relating to a need identified in

an individual’s person-centered plan of services that

increase independence or substitute for human assistance, to the extent that expenditures would otherwise

be made for the human assistance.

‘‘(2) INCREASED FEDERAL FINANCIAL PARTICIPATION.—For

purposes of payments to a State under section 1903(a)(1), with

respect to amounts expended by the State to provide medical

assistance under the State plan for home and community-

based attendant services and supports to eligible individuals

in accordance with this subsection during a fiscal year quarter

occurring during the period described in paragraph (1), the

Federal medical assistance percentage applicable to the State

(as determined under section 1905(b)) shall be increased by

6 percentage points.

‘‘(3) STATE REQUIREMENTS.—In order for a State plan

amendment to be approved under this subsection, the State

shall—

‘‘(A) develop and implement such amendment in

collaboration with a Development and Implementation

Council established by the State that includes a majority

of members with disabilities, elderly individuals, and their H. R. 3590—181

representatives and consults and collaborates with such

individuals;

‘‘(B) provide consumer controlled home and community-

based attendant services and supports to individuals on

a statewide basis, in a manner that provides such services

and supports in the most integrated setting appropriate

to the individual’s needs, and without regard to the individual’s age, type or nature of disability, severity of disability,

or the form of home and community-based attendant services and supports that the individual requires in order

to lead an independent life;

‘‘(C) with respect to expenditures during the first full

fiscal year in which the State plan amendment is implemented, maintain or exceed the level of State expenditures

for medical assistance that is provided under section

1905(a), section 1915, section 1115, or otherwise to individuals with disabilities or elderly individuals attributable

to the preceding fiscal year;

‘‘(D) establish and maintain a comprehensive, continuous quality assurance system with respect to community-

based attendant services and supports that—

‘‘(i) includes standards for agency-based and other

delivery models with respect to training, appeals for

denials and reconsideration procedures of an individual

plan, and other factors as determined by the Secretary;

‘‘(ii) incorporates feedback from consumers and

their representatives, disability organizations, providers, families of disabled or elderly individuals, members of the community, and others and maximizes consumer independence and consumer control;

‘‘(iii) monitors the health and well-being of each

individual who receives home and community-based

attendant services and supports, including a process

for the mandatory reporting, investigation, and resolution of allegations of neglect, abuse, or exploitation

in connection with the provision of such services and

supports; and

‘‘(iv) provides information about the provisions of

the quality assurance required under clauses (i)

through (iii) to each individual receiving such services;

and

‘‘(E) collect and report information, as determined necessary by the Secretary, for the purposes of approving

the State plan amendment, providing Federal oversight,

and conducting an evaluation under paragraph (5)(A),

including data regarding how the State provides home

and community-based attendant services and supports and

other home and community-based services, the cost of such

services and supports, and how the State provides individuals with disabilities who otherwise qualify for institutional

care under the State plan or under a waiver the choice

to instead receive home and community-based services in

lieu of institutional care.

‘‘(4) COMPLIANCE WITH CERTAIN LAWS.—A State shall

ensure that, regardless of whether the State uses an agency-

provider model or other models to provide home and community-based attendant services and supports under a State plan H. R. 3590—182

amendment under this subsection, such services and supports

are provided in accordance with the requirements of the Fair

Labor Standards Act of 1938 and applicable Federal and State

laws regarding—

‘‘(A) withholding and payment of Federal and State

income and payroll taxes;

‘‘(B) the provision of unemployment and workers compensation insurance;

‘‘(C) maintenance of general liability insurance; and

‘‘(D) occupational health and safety.

‘‘(5) EVALUATION,  DATA COLLECTION,  AND REPORT TO CONGRESS.—

‘‘(A) EVALUATION.—The Secretary shall conduct an

evaluation of the provision of home and community-based

attendant services and supports under this subsection in

order to determine the effectiveness of the provision of

such services and supports in allowing the individuals

receiving such services and supports to lead an independent

life to the maximum extent possible; the impact on the

physical and emotional health of the individuals who

receive such services; and an comparative analysis of the

costs of services provided under the State plan amendment

under this subsection and those provided under institutional care in a nursing facility, institution for mental

diseases, or an intermediate care facility for the mentally

retarded.

‘‘(B) DATA COLLECTION.—The State shall provide the

Secretary with the following information regarding the

provision of home and community-based attendant services

and supports under this subsection for each fiscal year

for which such services and supports are provided:

‘‘(i) The number of individuals who are estimated

to receive home and community-based attendant services and supports under this subsection during the

fiscal year.

‘‘(ii) The number of individuals that received such

services and supports during the preceding fiscal year.

‘‘(iii) The specific number of individuals served by

type of disability, age, gender, education level, and

employment status.

‘‘(iv) Whether the specific individuals have been

previously served under any other home and community based services program under the State plan or

under a waiver.

‘‘(C) REPORTS.—Not later than—

‘‘(i) December 31, 2013, the Secretary shall submit

to Congress and make available to the public an

interim report on the findings of the evaluation under

subparagraph (A); and

‘‘(ii) December 31, 2015, the Secretary shall submit

to Congress and make available to the public a final

report on the findings of the evaluation under subparagraph (A).

‘‘(6) DEFINITIONS.—In this subsection:

‘‘(A) ACTIVITIES OF DAILY LIVING.—The term ‘activities

of daily living’ includes tasks such as eating, toileting,

grooming, dressing, bathing, and transferring. H. R. 3590—183

‘‘(B) CONSUMER CONTROLLED.—The term ‘consumer

controlled’ means a method of selecting and providing services and supports that allow the individual, or where appropriate, the individual’s representative, maximum control

of the home and community-based attendant services and

supports, regardless of who acts as the employer of record.

‘‘(C) DELIVERY MODELS.—

‘‘(i) AGENCY-PROVIDER MODEL.—The term ‘agency-

provider model’ means, with respect to the provision

of home and community-based attendant services and

supports for an individual, subject to paragraph (4),

a method of providing consumer controlled services

and supports under which entities contract for the

provision of such services and supports.

‘‘(ii) OTHER MODELS.—The term ‘other models’

means, subject to paragraph (4), methods, other than

an agency-provider model, for the provision of consumer controlled services and supports. Such models

may include the provision of vouchers, direct cash payments, or use of a fiscal agent to assist in obtaining

services.

‘‘(D) HEALTH-RELATED TASKS.—The term ‘health-

related tasks’ means specific tasks related to the needs

of an individual, which can be delegated or assigned by

licensed health-care professionals under State law to be

performed by an attendant.

‘‘(E) INDIVIDUAL’S REPRESENTATIVE.—The term ‘individual’s representative’ means a parent, family member,

guardian, advocate, or other authorized representative of

an individual

‘‘(F) INSTRUMENTAL ACTIVITIES OF DAILY LIVING.—The

term ‘instrumental activities of daily living’ includes (but

is not limited to) meal planning and preparation, managing

finances, shopping for food, clothing, and other essential

items, performing essential household chores, communicating by phone or other media, and traveling around

and participating in the community.’’.

SEC. 2402. REMOVAL OF BARRIERS TO PROVIDING HOME AND COMMUNITY-BASED SERVICES.

(a) OVERSIGHT AND ASSESSMENT OF THE ADMINISTRATION OF

HOME AND COMMUNITY-BASED SERVICES.—The Secretary of Health

and Human Services shall promulgate regulations to ensure that

all States develop service systems that are designed to—

(1) allocate resources for services in a manner that is

responsive to the changing needs and choices of beneficiaries

receiving non-institutionally-based long-term services and supports (including such services and supports that are provided

under programs other the State Medicaid program), and that

provides strategies for beneficiaries receiving such services to

maximize their independence, including through the use of

client-employed providers;

(2) provide the support and coordination needed for a beneficiary in need of such services (and their family caregivers

or representative, if applicable) to design an individualized,

self-directed, community-supported life; and H. R. 3590—184

(3) improve coordination among, and the regulation of,

all providers of such services under federally and State-funded

programs in order to—

(A) achieve a more consistent administration of policies

and procedures across programs in relation to the provision

of such services; and

(B) oversee and monitor all service system functions

to assure—

(i) coordination of, and effectiveness of, eligibility

determinations and individual assessments;

(ii) development and service monitoring of a complaint system, a management system, a system to

qualify and monitor providers, and systems for role-

setting and individual budget determinations; and

(iii) an adequate number of qualified direct care

workers to provide self-directed personal assistance

services.

(b) ADDITIONAL STATE OPTIONS.—Section 1915(i) of the Social

Security Act (42 U.S.C. 1396n(i)) is amended by adding at the

end the following new paragraphs:

‘‘(6) STATE OPTION TO PROVIDE HOME AND COMMUNITY-BASED

SERVICES TO INDIVIDUALS ELIGIBLE FOR SERVICES UNDER A

WAIVER.—

‘‘(A) IN GENERAL.—A State that provides home and

community-based services in accordance with this subsection to individuals who satisfy the needs-based criteria

for the receipt of such services established under paragraph

(1)(A) may, in addition to continuing to provide such services to such individuals, elect to provide home and community-based services in accordance with the requirements

of this paragraph to individuals who are eligible for home

and community-based services under a waiver approved

for the State under subsection (c), (d), or (e) or under

section 1115 to provide such services, but only for those

individuals whose income does not exceed 300 percent of

the supplemental security income benefit rate established

by section 1611(b)(1).

‘‘(B) APPLICATION OF SAME REQUIREMENTS FOR INDIVIDUALS SATISFYING NEEDS-BASED CRITERIA.—Subject to

subparagraph (C), a State shall provide home and community-based services to individuals under this paragraph

in the same manner and subject to the same requirements

as apply under the other paragraphs of this subsection

to the provision of home and community-based services

to individuals who satisfy the needs-based criteria established under paragraph (1)(A).

‘‘(C) AUTHORITY TO OFFER DIFFERENT TYPE,  AMOUNT,

DURATION, OR SCOPE OF HOME AND COMMUNITY-BASED SERVICES.—A State may offer home and community-based services to individuals under this paragraph that differ in

type, amount, duration, or scope from the home and

community-based services offered for individuals who satisfy the needs-based criteria established under paragraph

(1)(A), so long as such services are within the scope of

services described in paragraph (4)(B) of subsection (c)

for which the Secretary has the authority to approve a

waiver and do not include room or board. H. R. 3590—185

‘‘(7) STATE OPTION TO OFFER HOME AND COMMUNITY-BASED

SERVICES TO SPECIFIC, TARGETED POPULATIONS.—

‘‘(A) IN GENERAL.—A State may elect in a State plan

amendment under this subsection to target the provision

of home and community-based services under this subsection to specific populations and to differ the type,

amount, duration, or scope of such services to such specific

populations.

‘‘(B) 5-YEAR TERM.—

‘‘(i) IN GENERAL.—An election by a State under

this paragraph shall be for a period of 5 years.

‘‘(ii) PHASE-IN OF SERVICES AND ELIGIBILITY PERMITTED DURING INITIAL 5-YEAR PERIOD.—A State

making an election under this paragraph may, during

the first 5-year period for which the election is made,

phase-in the enrollment of eligible individuals, or the

provision of services to such individuals, or both, so

long as all eligible individuals in the State for such

services are enrolled, and all such services are provided, before the end of the initial 5-year period.

‘‘(C) RENEWAL.—An election by a State under this paragraph may be renewed for additional 5-year terms if the

Secretary determines, prior to beginning of each such

renewal period, that the State has—

‘‘(i) adhered to the requirements of this subsection

and paragraph in providing services under such an

election; and

‘‘(ii) met the State’s objectives with respect to

quality improvement and beneficiary outcomes.’’.

(c) REMOVAL OF LIMITATION ON SCOPE OF SERVICES.—Paragraph (1) of section 1915(i) of the Social Security Act (42 U.S.C.

1396n(i)), as amended by subsection (a), is amended by striking

‘‘or such other services requested by the State as the Secretary

may approve’’.

(d) OPTIONAL ELIGIBILITY CATEGORY TO PROVIDE FULL MEDICAID BENEFITS TO INDIVIDUALS RECEIVING HOME AND COMMUNITY-

BASED SERVICES UNDER A STATE PLAN AMENDMENT.—

(1) IN GENERAL.—Section 1902(a)(10)(A)(ii) of the Social

Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by

section 2304(a)(1), is amended—

(A) in subclause (XX), by striking ‘‘or’’ at the end;

(B) in subclause (XXI), by adding ‘‘or’’ at the end;

and

(C) by inserting after subclause (XXI), the following

new subclause:

‘‘(XXII) who are eligible for home and community-based services under needs-based criteria

established under paragraph (1)(A) of section

1915(i), or who are eligible for home and community-based services under paragraph (6) of such

section, and who will receive home and community-

based services pursuant to a State plan amendment under such subsection;’’.

(2) CONFORMING AMENDMENTS.—

(A) Section 1903(f)(4) of the Social Security Act (42

U.S.C. 1396b(f)(4)), as amended by section 2304(a)(4)(B),

is amended in the matter preceding subparagraph (A), H. R. 3590—186

by inserting ‘‘1902(a)(10)(A)(ii)(XXII),’’ after

‘‘1902(a)(10)(A)(ii)(XXI),’’.

(B) Section 1905(a) of the Social Security Act (42 U.S.C.

1396d(a)), as so amended, is amended in the matter preceding paragraph (1)—

(i) in clause (xv), by striking ‘‘or’’ at the end;

(ii) in clause (xvi), by adding ‘‘or’’ at the end;

and

(iii) by inserting after clause (xvi) the following

new clause:

‘‘(xvii) individuals who are eligible for home and community-based services under needs-based criteria established

under paragraph (1)(A) of section 1915(i), or who are eligible

for home and community-based services under paragraph (6)

of such section, and who will receive home and community-

based services pursuant to a State plan amendment under

such subsection,’’.

(e) ELIMINATION OF OPTION TO LIMIT NUMBER OF ELIGIBLE

INDIVIDUALS OR LENGTH OF PERIOD FOR GRANDFATHERED INDIVIDUALS IF ELIGIBILITY CRITERIA IS MODIFIED.—Paragraph (1) of section 1915(i) of such Act (42 U.S.C. 1396n(i)) is amended—

(1) by striking subparagraph (C) and inserting the following:

‘‘(C) PROJECTION OF NUMBER OF INDIVIDUALS TO BE

PROVIDED HOME AND COMMUNITY-BASED SERVICES.—The

State submits to the Secretary, in such form and manner,

and upon such frequency as the Secretary shall specify,

the projected number of individuals to be provided home

and community-based services.’’; and

(2) in subclause (II) of subparagraph (D)(ii), by striking

‘‘to be eligible for such services for a period of at least 12

months beginning on the date the individual first received

medical assistance for such services’’ and inserting ‘‘to continue

to be eligible for such services after the effective date of the

modification and until such time as the individual no longer

meets the standard for receipt of such services under such

pre-modified criteria’’.

(f) ELIMINATION OF OPTION TO WAIVE STATEWIDENESS; ADDITION OF OPTION TO WAIVE COMPARABILITY.—Paragraph (3) of section 1915(i) of such Act (42 U.S.C. 1396n(3)) is amended by striking

‘‘1902(a)(1) (relating to statewideness)’’ and inserting ‘‘1902(a)(10)(B)

(relating to comparability)’’.

(g) EFFECTIVE DATE.—The amendments made by subsections

(b) through (f) take effect on the first day of the first fiscal year

quarter that begins after the date of enactment of this Act.

SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

(a) EXTENSION OF DEMONSTRATION.—

(1) IN GENERAL.—Section 6071(h) of the Deficit Reduction

Act of 2005 (42 U.S.C. 1396a note) is amended—

(A) in paragraph (1)(E), by striking ‘‘fiscal year 2011’’

and inserting ‘‘each of fiscal years 2011 through 2016’’;

and

(B) in paragraph (2), by striking ‘‘2011’’ and inserting

‘‘2016’’. H. R. 3590—187

(2) EVALUATION.—Paragraphs (2) and (3) of section 6071(g)

of such Act is amended are each amended by striking ‘‘2011’’

and inserting ‘‘2016’’.

(b) REDUCTION OF INSTITUTIONAL RESIDENCY PERIOD.—

(1) IN GENERAL.—Section 6071(b)(2) of the Deficit Reduction

Act of 2005 (42 U.S.C. 1396a note) is amended—

(A) in subparagraph (A)(i), by striking ‘‘, for a period

of not less than 6 months or for such longer minimum

period, not to exceed 2 years, as may be specified by the

State’’ and inserting ‘‘for a period of not less than 90

consecutive days’’; and

(B) by adding at the end the following:

‘‘Any days that an individual resides in an institution on the

basis of having been admitted solely for purposes of receiving

short-term rehabilitative services for a period for which payment for such services is limited under title XVIII shall not

be taken into account for purposes of determining the 90-

day period required under subparagraph (A)(i).’’.

(2) EFFECTIVE DATE.—The amendments made by this subsection take effect 30 days after the date of enactment of

this Act.

SEC. 2404. PROTECTION FOR RECIPIENTS OF HOME AND COMMUNITY-

BASED SERVICES AGAINST SPOUSAL IMPOVERISHMENT.

During the 5-year period that begins on January 1, 2014,

section 1924(h)(1)(A) of the Social Security Act (42 U.S.C. 1396r–

5(h)(1)(A)) shall be applied as though ‘‘is eligible for medical assistance for home and community-based services provided under subsection (c), (d), or (i) of section 1915, under a waiver approved

under section 1115, or who is eligible for such medical assistance

by reason of being determined eligible under section 1902(a)(10)(C)

or by reason of section 1902(f) or otherwise on the basis of a

reduction of income based on costs incurred for medical or other

remedial care, or who is eligible for medical assistance for home

and community-based attendant services and supports under section

1915(k)’’ were substituted in such section for ‘‘(at the option of

the State) is described in section 1902(a)(10)(A)(ii)(VI)’’.

SEC. 2405. FUNDING TO EXPAND STATE AGING AND DISABILITY

RESOURCE CENTERS.

Out of any funds in the Treasury not otherwise appropriated,

there is appropriated to the Secretary of Health and Human Services, acting through the Assistant Secretary for Aging, $10,000,000

for each of fiscal years 2010 through 2014, to carry out subsections

(a)(20)(B)(iii) and (b)(8) of section 202 of the Older Americans Act

of 1965 (42 U.S.C. 3012).

SEC. 2406. SENSE OF THE SENATE REGARDING LONG-TERM CARE.

(a) FINDINGS.—The Senate makes the following findings:

(1) Nearly 2 decades have passed since Congress seriously

considered long-term care reform. The United States Bipartisan

Commission on Comprehensive Health Care, also know as the

‘‘Pepper Commission’’, released its ‘‘Call for Action’’ blueprint

for health reform in September 1990. In the 20 years since

those recommendations were made, Congress has never acted

on the report.

(2) In 1999, under the United States Supreme Court’s

decision in Olmstead v. L.C., 527 U.S. 581 (1999), individuals H. R. 3590—188

with disabilities have the right to choose to receive their long-

term services and supports in the community, rather than

in an institutional setting.

(3) Despite the Pepper Commission and Olmstead decision,

the long-term care provided to our Nation’s elderly and disabled

has not improved. In fact, for many, it has gotten far worse.

(4) In 2007, 69 percent of Medicaid long-term care spending

for elderly individuals and adults with physical disabilities

paid for institutional services. Only 6 states spent 50 percent

or more of their Medicaid long-term care dollars on home and

community-based services for elderly individuals and adults

with physical disabilities while

1

⁄2 of the States spent less

than 25 percent. This disparity continues even though, on average, it is estimated that Medicaid dollars can support nearly

3 elderly individuals and adults with physical disabilities in

home and community-based services for every individual in

a nursing home. Although every State has chosen to provide

certain services under home and community-based waivers,

these services are unevenly available within and across States,

and reach a small percentage of eligible individuals.

(b) SENSE OF THE SENATE.—It is the sense of the Senate that—

(1) during the 111th session of Congress, Congress should

address long-term services and supports in a comprehensive

way that guarantees elderly and disabled individuals the care

they need; and

(2) long term services and supports should be made available in the community in addition to in institutions.

Subtitle F—Medicaid Prescription Drug

Coverage

SEC. 2501. PRESCRIPTION DRUG REBATES.

(a) INCREASE IN MINIMUM REBATE PERCENTAGE FOR SINGLE

SOURCE DRUGS AND INNOVATOR MULTIPLE SOURCE DRUGS.—

(1) IN GENERAL.—Section 1927(c)(1)(B) of the Social Security Act (42 U.S.C. 1396r–8(c)(1)(B)) is amended—

(A) in clause (i)—

(i) in subclause (IV), by striking ‘‘and’’ at the end;

(ii) in subclause (V)—

(I) by inserting ‘‘and before January 1, 2010’’

after ‘‘December 31, 1995,’’; and

(II) by striking the period at the end and

inserting ‘‘; and’’; and

(iii) by adding at the end the following new subclause:

‘‘(VI) except as provided in clause (iii), after

December 31, 2009, 23.1 percent.’’; and

(B) by adding at the end the following new clause:

‘‘(iii) MINIMUM REBATE PERCENTAGE FOR CERTAIN

DRUGS.—

‘‘(I) IN GENERAL.—In the case of a single source

drug or an innovator multiple source drug

described in subclause (II), the minimum rebate

percentage for rebate periods specified in clause

(i)(VI) is 17.1 percent. H. R. 3590—189

‘‘(II) DRUG DESCRIBED.—For purposes of subclause (I), a single source drug or an innovator

multiple source drug described in this subclause

is any of the following drugs:

‘‘(aa) A clotting factor for which a separate

furnishing payment is made under section

1842(o)(5) and which is included on a list of

such factors specified and updated regularly

by the Secretary.

‘‘(bb) A drug approved by the Food and

Drug Administration exclusively for pediatric

indications.’’.

(2) RECAPTURE OF TOTAL SAVINGS DUE TO INCREASE.—Section 1927(b)(1) of such Act (42 U.S.C. 1396r–8(b)(1)) is amended

by adding at the end the following new subparagraph:

‘‘(C) SPECIAL RULE FOR INCREASED MINIMUM REBATE

PERCENTAGE.—

‘‘(i) IN GENERAL.—In addition to the amounts

applied as a reduction under subparagraph (B), for

rebate periods beginning on or after January 1, 2010,

during a fiscal year, the Secretary shall reduce payments to a State under section 1903(a) in the manner

specified in clause (ii), in an amount equal to the

product of—

‘‘(I) 100 percent minus the Federal medical

assistance percentage applicable to the rebate

period for the State; and

‘‘(II) the amounts received by the State under

such subparagraph that are attributable (as estimated by the Secretary based on utilization and

other data) to the increase in the minimum rebate

percentage effected by the amendments made by

subsections (a)(1), (b), and (d) of section 2501 of

the Patient Protection and Affordable Care Act,

taking into account the additional drugs included

under the amendments made by subsection (c) of

section 2501 of such Act.

The Secretary shall adjust such payment reduction

for a calendar quarter to the extent the Secretary

determines, based upon subsequent utilization and

other data, that the reduction for such quarter was

greater or less than the amount of payment reduction

that should have been made.

‘‘(ii) MANNER OF PAYMENT REDUCTION.—The

amount of the payment reduction under clause (i) for

a State for a quarter shall be deemed an overpayment

to the State under this title to be disallowed against

the State’s regular quarterly draw for all Medicaid

spending under section 1903(d)(2). Such a disallowance

is not subject to a reconsideration under section

1116(d).’’.

(b) INCREASE IN REBATE FOR OTHER DRUGS.—Section

1927(c)(3)(B) of such Act (42 U.S.C. 1396r–8(c)(3)(B)) is amended—

(1) in clause (i), by striking ‘‘and’’ at the end;

(2) in clause (ii)—

(A) by inserting ‘‘and before January 1, 2010,’’ after

‘‘December 31, 1993,’’; and H. R. 3590—190

(B) by striking the period and inserting ‘‘; and’’; and

(3) by adding at the end the following new clause:

‘‘(iii) after December 31, 2009, is 13 percent.’’.

(c) EXTENSION OF PRESCRIPTION DRUG DISCOUNTS TO

ENROLLEES OF MEDICAID MANAGED CARE ORGANIZATIONS.—

(1) IN GENERAL.—Section 1903(m)(2)(A) of such Act (42

U.S.C. 1396b(m)(2)(A)) is amended—

(A) in clause (xi), by striking ‘‘and’’ at the end;

(B) in clause (xii), by striking the period at the end

and inserting ‘‘; and’’; and

(C) by adding at the end the following:

‘‘(xiii) such contract provides that (I) covered outpatient drugs dispensed to individuals eligible for medical assistance who are enrolled with the entity shall

be subject to the same rebate required by the agreement entered into under section 1927 as the State

is subject to and that the State shall collect such

rebates from manufacturers, (II) capitation rates paid

to the entity shall be based on actual cost experience

related to rebates and subject to the Federal regulations requiring actuarially sound rates, and (III) the

entity shall report to the State, on such timely and

periodic basis as specified by the Secretary in order

to include in the information submitted by the State

to a manufacturer and the Secretary under section

1927(b)(2)(A), information on the total number of units

of each dosage form and strength and package size

by National Drug Code of each covered outpatient drug

dispensed to individuals eligible for medical assistance

who are enrolled with the entity and for which the

entity is responsible for coverage of such drug under

this subsection (other than covered outpatient drugs

that under subsection (j)(1) of section 1927 are not

subject to the requirements of that section) and such

other data as the Secretary determines necessary to

carry out this subsection.’’.

(2) CONFORMING AMENDMENTS.—Section 1927 (42 U.S.C.

1396r–8) is amended—

(A) in subsection (b)—

(i) in paragraph (1)(A), in the first sentence, by

inserting ‘‘, including such drugs dispensed to individuals enrolled with a medicaid managed care organization if the organization is responsible for coverage of

such drugs’’ before the period; and

(ii) in paragraph (2)(A), by inserting ‘‘including

such information reported by each medicaid managed

care organization,’’ after ‘‘for which payment was made

under the plan during the period,’’; and

(B) in subsection (j), by striking paragraph (1) and

inserting the following:

‘‘(1) Covered outpatient drugs are not subject to the requirements of this section if such drugs are—

‘‘(A) dispensed by health maintenance organizations,

including Medicaid managed care organizations that contract under section 1903(m); and

‘‘(B) subject to discounts under section 340B of the

Public Health Service Act.’’. H. R. 3590—191

(d) ADDITIONAL REBATE FOR NEW FORMULATIONS OF EXISTING

DRUGS.—

(1) IN GENERAL.—Section 1927(c)(2) of the Social Security

Act (42 U.S.C. 1396r–8(c)(2)) is amended by adding at the

end the following new subparagraph:

‘‘(C) TREATMENT OF NEW FORMULATIONS.—

‘‘(i) IN GENERAL.—Except as provided in clause

(ii), in the case of a drug that is a new formulation,

such as an extended-release formulation, of a single

source drug or an innovator multiple source drug, the

rebate obligation with respect to the drug under this

section shall be the amount computed under this section for the new formulation of the drug or, if greater,

the product of—

‘‘(I) the average manufacturer price for each

dosage form and strength of the new formulation

of the single source drug or innovator multiple

source drug;

‘‘(II) the highest additional rebate (calculated

as a percentage of average manufacturer price)

under this section for any strength of the original

single source drug or innovator multiple source

drug; and

‘‘(III) the total number of units of each dosage

form and strength of the new formulation paid

for under the State plan in the rebate period (as

reported by the State).

‘‘(ii) NO APPLICATION TO NEW FORMULATIONS OF

ORPHAN DRUGS.—Clause (i) shall not apply to a new

formulation of a covered outpatient drug that is or

has been designated under section 526 of the Federal

Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for

a rare disease or condition, without regard to whether

the period of market exclusivity for the drug under

section 527 of such Act has expired or the specific

indication for use of the drug.’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall apply to drugs that are paid for by a State after

December 31, 2009.

(e) MAXIMUM REBATE AMOUNT.—Section 1927(c)(2) of such Act

(42 U.S.C. 1396r–8(c)(2)), as amended by subsection (d), is amended

by adding at the end the following new subparagraph:

‘‘(D) MAXIMUM REBATE AMOUNT.—In no case shall the

sum of the amounts applied under paragraph (1)(A)(ii)

and this paragraph with respect to each dosage form and

strength of a single source drug or an innovator multiple

source drug for a rebate period beginning after December

31, 2009, exceed 100 percent of the average manufacturer

price of the drug.’’.

(f) CONFORMING AMENDMENTS.—

(1) IN GENERAL.—Section 340B of the Public Health Service

Act (42 U.S.C. 256b) is amended—

(A) in subsection (a)(2)(B)(i), by striking ‘‘1927(c)(4)’’

and inserting ‘‘1927(c)(3)’’; and

(B) by striking subsection (c); and

(C) redesignating subsection (d) as subsection (c). H. R. 3590—192

(2) EFFECTIVE DATE.—The amendments made by this subsection take effect on January 1, 2010.

SEC. 2502. ELIMINATION OF EXCLUSION OF COVERAGE OF CERTAIN

DRUGS.

(a) IN GENERAL.—Section 1927(d) of the Social Security Act

(42 U.S.C. 1397r–8(d)) is amended—

(1) in paragraph (2)—

(A) by striking subparagraphs (E), (I), and (J), respectively; and

(B) by redesignating subparagraphs (F), (G), (H), and

(K) as subparagraphs (E), (F), (G), and (H), respectively;

and

(2) by adding at the end the following new paragraph:

‘‘(7) NON-EXCLUDABLE DRUGS.—The following drugs or

classes of drugs, or their medical uses, shall not be excluded

from coverage:

‘‘(A) Agents when used to promote smoking cessation,

including agents approved by the Food and Drug Administration under the over-the-counter monograph process for

purposes of promoting, and when used to promote, tobacco

cessation.

‘‘(B) Barbiturates.

‘‘(C) Benzodiazepines.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall apply to services furnished on or after January 1, 2014.

SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT.

(a) PHARMACY REIMBURSEMENT LIMITS.—

(1) IN GENERAL.—Section 1927(e) of the Social Security

Act (42 U.S.C. 1396r–8(e)) is amended—

(A) in paragraph (4), by striking ‘‘(or, effective January

1, 2007, two or more)’’; and

(B) by striking paragraph (5) and inserting the following:

‘‘(5) USE OF AMP IN UPPER PAYMENT LIMITS.—The Secretary

shall calculate the Federal upper reimbursement limit established under paragraph (4) as no less than 175 percent of

the weighted average (determined on the basis of utilization)

of the most recently reported monthly average manufacturer

prices for pharmaceutically and therapeutically equivalent multiple source drug products that are available for purchase by

retail community pharmacies on a nationwide basis. The Secretary shall implement a smoothing process for average manufacturer prices. Such process shall be similar to the smoothing

process used in determining the average sales price of a drug

or biological under section 1847A.’’.

(2) DEFINITION OF AMP.—Section 1927(k)(1) of such Act

(42 U.S.C. 1396r–8(k)(1)) is amended—

(A) in subparagraph (A), by striking ‘‘by’’ and all that

follows through the period and inserting ‘‘by—

‘‘(i) wholesalers for drugs distributed to retail

community pharmacies; and

‘‘(ii) retail community pharmacies that purchase

drugs directly from the manufacturer.’’; and

(B) by striking subparagraph (B) and inserting the

following: H. R. 3590—193

‘‘(B) EXCLUSION OF CUSTOMARY PROMPT PAY DISCOUNTS

AND OTHER PAYMENTS.—

‘‘(i) IN GENERAL.—The average manufacturer price

for a covered outpatient drug shall exclude—

‘‘(I) customary prompt pay discounts extended

to wholesalers;

‘‘(II) bona fide service fees paid by manufacturers to wholesalers or retail community pharmacies,

including (but not limited to) distribution service

fees, inventory management fees, product stocking

allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs

and patient education programs);

‘‘(III) reimbursement by manufacturers for

recalled, damaged, expired, or otherwise unsalable

returned goods, including (but not limited to)

reimbursement for the cost of the goods and any

reimbursement of costs associated with return

goods handling and processing, reverse logistics,

and drug destruction; and

‘‘(IV) payments received from, and rebates or

discounts provided to, pharmacy benefit managers,

managed care organizations, health maintenance

organizations, insurers, hospitals, clinics, mail

order pharmacies, long term care providers, manufacturers, or any other entity that does not conduct

business as a wholesaler or a retail community

pharmacy.

‘‘(ii) INCLUSION OF OTHER DISCOUNTS AND PAYMENTS.—Notwithstanding clause (i), any other discounts, rebates, payments, or other financial transactions that are received by, paid by, or passed through

to, retail community pharmacies shall be included in

the average manufacturer price for a covered outpatient drug.’’; and

(C) in subparagraph (C), by striking ‘‘the retail pharmacy class of trade’’ and inserting ‘‘retail community pharmacies’’.

(3) DEFINITION OF MULTIPLE SOURCE DRUG.—Section

1927(k)(7) of such Act (42 U.S.C. 1396r–8(k)(7)) is amended—

(A) in subparagraph (A)(i)(III), by striking ‘‘the State’’

and inserting ‘‘the United States’’; and

(B) in subparagraph (C)—

(i) in clause (i), by inserting ‘‘and’’ after the semicolon;

(ii) in clause (ii), by striking ‘‘; and’’ and inserting

a period; and

(iii) by striking clause (iii).

(4) DEFINITIONS OF RETAIL COMMUNITY PHARMACY; WHOLESALER.—Section 1927(k) of such Act (42 U.S.C. 1396r–8(k))

is amended by adding at the end the following new paragraphs:

‘‘(10) RETAIL COMMUNITY PHARMACY.—The term ‘retail

community pharmacy’ means an independent pharmacy, a

chain pharmacy, a supermarket pharmacy, or a mass merchandiser pharmacy that is licensed as a pharmacy by the State

and that dispenses medications to the general public at retail H. R. 3590—194

prices. Such term does not include a pharmacy that dispenses

prescription medications to patients primarily through the mail,

nursing home pharmacies, long-term care facility pharmacies,

hospital pharmacies, clinics, charitable or not-for-profit pharmacies, government pharmacies, or pharmacy benefit managers.

‘‘(11) WHOLESALER.—The term ‘wholesaler’ means a drug

wholesaler that is engaged in wholesale distribution of prescription drugs to retail community pharmacies, including (but not

limited to) manufacturers, repackers, distributors, own-label

distributors, private-label distributors, jobbers, brokers, warehouses (including manufacturer’s and distributor’s warehouses,

chain drug warehouses, and wholesale drug warehouses) independent wholesale drug traders, and retail community pharmacies that conduct wholesale distributions.’’.

(b) DISCLOSURE OF PRICE INFORMATION TO THE PUBLIC.—Section 1927(b)(3) of such Act (42 U.S.C. 1396r–8(b)(3)) is amended—

(1) in subparagraph (A)—

(A) in the first sentence, by inserting after clause (iii)

the following:

‘‘(iv) not later than 30 days after the last day

of each month of a rebate period under the agreement,

on the manufacturer’s total number of units that are

used to calculate the monthly average manufacturer

price for each covered outpatient drug;’’; and

(B) in the second sentence, by inserting ‘‘(relating to

the weighted average of the most recently reported monthly

average manufacturer prices)’’ after ‘‘(D)(v)’’; and

(2) in subparagraph (D)(v), by striking ‘‘average manufacturer prices’’ and inserting ‘‘the weighted average of the most

recently reported monthly average manufacturer prices and

the average retail survey price determined for each multiple

source drug in accordance with subsection (f)’’.

(c) CLARIFICATION OF APPLICATION OF SURVEY OF RETAIL

PRICES.—Section 1927(f)(1) of such Act (42 U.S.C. 1396r–8(b)(1))

is amended—

(1) in subparagraph (A)(i), by inserting ‘‘with respect to

a retail community pharmacy,’’ before ‘‘the determination’’; and

(2) in subparagraph (C)(ii), by striking ‘‘retail pharmacies’’

and inserting ‘‘retail community pharmacies’’.

(d) EFFECTIVE DATE.—The amendments made by this section

shall take effect on the first day of the first calendar year quarter

that begins at least 180 days after the date of enactment of this

Act, without regard to whether or not final regulations to carry

out such amendments have been promulgated by such date.

Subtitle G—Medicaid Disproportionate

Share Hospital (DSH) Payments

SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

(a) IN GENERAL.—Section 1923(f) of the Social Security Act

(42 U.S.C. 1396r–4(f)) is amended—

(1) in paragraph (1), by striking ‘‘and (3)’’ and inserting

‘‘, (3), and (7)’’;

(2) in paragraph (3)(A), by striking ‘‘paragraph (6)’’ and

inserting ‘‘paragraphs (6) and (7)’’; H. R. 3590—195

(3) by redesignating paragraph (7) as paragraph (8); and

(4) by inserting after paragraph (6) the following new paragraph:

‘‘(7) REDUCTION OF STATE DSH ALLOTMENTS ONCE REDUCTION IN UNINSURED THRESHOLD REACHED.—

‘‘(A) IN GENERAL.—Subject to subparagraph (E), the

DSH allotment for a State for fiscal years beginning with

the fiscal year described in subparagraph (C) (with respect

to the State), is equal to—

‘‘(i) in the case of the first fiscal year described

in subparagraph (C) with respect to a State, the DSH

allotment that would be determined under this subsection for the State for the fiscal year without application of this paragraph (but after the application of

subparagraph (D)), reduced by the applicable percentage determined for the State for the fiscal year under

subparagraph (B)(i); and

‘‘(ii) in the case of any subsequent fiscal year with

respect to the State, the DSH allotment determined

under this paragraph for the State for the preceding

fiscal year, reduced by the applicable percentage determined for the State for the fiscal year under subparagraph (B)(ii).

‘‘(B) APPLICABLE PERCENTAGE.—For purposes of

subparagraph (A), the applicable percentage for a State

for a fiscal year is the following:

‘‘(i) UNINSURED REDUCTION THRESHOLD FISCAL

YEAR.—In the case of the first fiscal year described

in subparagraph (C) with respect to the State—

‘‘(I) if the State is a low DSH State described

in paragraph (5)(B), the applicable percentage is

equal to 25 percent; and

‘‘(II) if the State is any other State, the

applicable percentage is 50 percent.

‘‘(ii) SUBSEQUENT FISCAL YEARS IN WHICH THE

PERCENTAGE OF UNINSURED DECREASES.—In the case

of any fiscal year after the first fiscal year described

in subparagraph (C) with respect to a State, if the

Secretary determines on the basis of the most recent

American Community Survey of the Bureau of the

Census, that the percentage of uncovered individuals

residing in the State is less than the percentage of

such individuals determined for the State for the preceding fiscal year—

‘‘(I) if the State is a low DSH State described

in paragraph (5)(B), the applicable percentage is

equal to the product of the percentage reduction

in uncovered individuals for the fiscal year from

the preceding fiscal year and 25 percent; and

‘‘(II) if the State is any other State, the

applicable percentage is equal to the product of

the percentage reduction in uncovered individuals

for the fiscal year from the preceding fiscal year

and 50 percent.

‘‘(C) FISCAL YEAR DESCRIBED.—For purposes of

subparagraph (A), the fiscal year described in this subparagraph with respect to a State is the first fiscal year that H. R. 3590—196

occurs after fiscal year 2012 for which the Secretary determines, on the basis of the most recent American Community Survey of the Bureau of the Census, that the percentage of uncovered individuals residing in the State is at

least 45 percent less than the percentage of such individuals determined for the State for fiscal year 2009.

‘‘(D) EXCLUSION OF PORTIONS DIVERTED FOR COVERAGE

EXPANSIONS.—For purposes of applying the applicable

percentage reduction under subparagraph (A) to the DSH

allotment for a State for a fiscal year, the DSH allotment

for a State that would be determined under this subsection

for the State for the fiscal year without the application

of this paragraph (and prior to any such reduction) shall

not include any portion of the allotment for which the

Secretary has approved the State’s diversion to the costs

of providing medical assistance or other health benefits

coverage under a waiver that is in effect on July 2009.

‘‘(E) MINIMUM ALLOTMENT.—In no event shall the DSH

allotment determined for a State in accordance with this

paragraph for fiscal year 2013 or any succeeding fiscal

year be less than the amount equal to 35 percent of the

DSH allotment determined for the State for fiscal year

2012 under this subsection (and after the application of

this paragraph, if applicable), increased by the percentage

change in the consumer price index for all urban consumers

(all items, U.S. city average) for each previous fiscal year

occurring before the fiscal year.

‘‘(F) UNCOVERED INDIVIDUALS.—In this paragraph, the

term ‘uncovered individuals’ means individuals with no

health insurance coverage at any time during a year (as

determined by the Secretary based on the most recent

data available).’’.

(b) EFFECTIVE DATE.—The amendments made by subsection

(a) take effect on October 1, 2011.

Subtitle H—Improved Coordination for

Dual Eligible Beneficiaries

SEC. 2601. 5-YEAR PERIOD FOR DEMONSTRATION PROJECTS.

(a) IN GENERAL.—Section 1915(h) of the Social Security Act

(42 U.S.C. 1396n(h)) is amended—

(1) by inserting ‘‘(1)’’ after ‘‘(h)’’;

(2) by inserting ‘‘, or a waiver described in paragraph

(2)’’ after ‘‘(e)’’; and

(3) by adding at the end the following new paragraph:

‘‘(2)(A) Notwithstanding subsections (c)(3) and (d) (3), any

waiver under subsection (b), (c), or (d), or a waiver under section

1115, that provides medical assistance for dual eligible individuals

(including any such waivers under which non dual eligible individuals may be enrolled in addition to dual eligible individuals) may

be conducted for a period of 5 years and, upon the request of

the State, may be extended for additional 5-year periods unless

the Secretary determines that for the previous waiver period the

conditions for the waiver have not been met or it would no longer

be cost-effective and efficient, or consistent with the purposes of

this title, to extend the waiver. H. R. 3590—197

‘‘(B) In this paragraph, the term ‘dual eligible individual’ means

an individual who is entitled to, or enrolled for, benefits under

part A of title XVIII, or enrolled for benefits under part B of

title XVIII, and is eligible for medical assistance under the State

plan under this title or under a waiver of such plan.’’.

(b) CONFORMING AMENDMENTS.—

(1) Section 1915 of such Act (42 U.S.C. 1396n) is amended—

(A) in subsection (b), by adding at the end the following

new sentence: ‘‘Subsection (h)(2) shall apply to a waiver

under this subsection.’’;

(B) in subsection (c)(3), in the second sentence, by

inserting ‘‘(other than a waiver described in subsection

(h)(2))’’ after ‘‘A waiver under this subsection’’;

(C) in subsection (d)(3), in the second sentence, by

inserting ‘‘(other than a waiver described in subsection

(h)(2))’’ after ‘‘A waiver under this subsection’’.

(2) Section 1115 of such Act (42 U.S.C. 1315) is amended—

(A) in subsection (e)(2), by inserting ‘‘(5 years, in the

case of a waiver described in section 1915(h)(2))’’ after

‘‘3 years’’; and

(B) in subsection (f)(6), by inserting ‘‘(5 years, in the

case of a waiver described in section 1915(h)(2))’’ after

‘‘3 years’’.

SEC. 2602. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINATION FOR DUAL ELIGIBLE BENEFICIARIES.

(a) ESTABLISHMENT OF FEDERAL COORDINATED HEALTH CARE

OFFICE.—

(1) IN GENERAL.—Not later than March 1, 2010, the Secretary of Health and Human Services (in this section referred

to as the ‘‘Secretary’’) shall establish a Federal Coordinated

Health Care Office.

(2) ESTABLISHMENT AND REPORTING TO CMS ADMINISTRATOR.—The Federal Coordinated Health Care Office—

(A) shall be established within the Centers for Medicare & Medicaid Services; and

(B) have as the Office a Director who shall be appointed

by, and be in direct line of authority to, the Administrator

of the Centers for Medicare & Medicaid Services.

(b) PURPOSE.—The purpose of the Federal Coordinated Health

Care Office is to bring together officers and employees of the Medicare and Medicaid programs at the Centers for Medicare & Medicaid

Services in order to—

(1) more effectively integrate benefits under the Medicare

program under title XVIII of the Social Security Act and the

Medicaid program under title XIX of such Act; and

(2) improve the coordination between the Federal Government and States for individuals eligible for benefits under

both such programs in order to ensure that such individuals

get full access to the items and services to which they are

entitled under titles XVIII and XIX of the Social Security

Act.

(c) GOALS.—The goals of the Federal Coordinated Health Care

Office are as follows:

(1) Providing dual eligible individuals full access to the

benefits to which such individuals are entitled under the Medicare and Medicaid programs. H. R. 3590—198

(2) Simplifying the processes for dual eligible individuals

to access the items and services they are entitled to under

the Medicare and Medicaid programs.

(3) Improving the quality of health care and long-term

services for dual eligible individuals.

(4) Increasing dual eligible individuals’ understanding of

and satisfaction with coverage under the Medicare and Medicaid programs.

(5) Eliminating regulatory conflicts between rules under

the Medicare and Medicaid programs.

(6) Improving care continuity and ensuring safe and effective care transitions for dual eligible individuals.

(7) Eliminating cost-shifting between the Medicare and

Medicaid program and among related health care providers.

(8) Improving the quality of performance of providers of

services and suppliers under the Medicare and Medicaid programs.

(d) SPECIFIC RESPONSIBILITIES.—The specific responsibilities of

the Federal Coordinated Health Care Office are as follows:

(1) Providing States, specialized MA plans for special needs

individuals (as defined in section 1859(b)(6) of the Social Security Act (42 U.S.C. 1395w–28(b)(6))), physicians and other relevant entities or individuals with the education and tools necessary for developing programs that align benefits under the

Medicare and Medicaid programs for dual eligible individuals.

(2) Supporting State efforts to coordinate and align acute

care and long-term care services for dual eligible individuals

with other items and services furnished under the Medicare

program.

(3) Providing support for coordination of contracting and

oversight by States and the Centers for Medicare & Medicaid

Services with respect to the integration of the Medicare and

Medicaid programs in a manner that is supportive of the goals

described in paragraph (3).

(4) To consult and coordinate with the Medicare Payment

Advisory Commission established under section 1805 of the

Social Security Act (42 U.S.C. 1395b–6) and the Medicaid and

CHIP Payment and Access Commission established under section 1900 of such Act (42 U.S.C. 1396) with respect to policies

relating to the enrollment in, and provision of, benefits to

dual eligible individuals under the Medicare program under

title XVIII of the Social Security Act and the Medicaid program

under title XIX of such Act.

(5) To study the provision of drug coverage for new full-

benefit dual eligible individuals (as defined in section 1935(c)(6)

of the Social Security Act (42 U.S.C. 1396u–5(c)(6)), as well

as to monitor and report annual total expenditures, health

outcomes, and access to benefits for all dual eligible individuals.

(e) REPORT.—The Secretary shall, as part of the budget transmitted under section 1105(a) of title 31, United States Code, submit

to Congress an annual report containing recommendations for legislation that would improve care coordination and benefits for dual

eligible individuals.

(f) DUAL ELIGIBLE DEFINED.—In this section, the term ‘‘dual

eligible individual’’ means an individual who is entitled to, or

enrolled for, benefits under part A of title XVIII of the Social

Security Act, or enrolled for benefits under part B of title XVIII H. R. 3590—199

of such Act, and is eligible for medical assistance under a State

plan under title XIX of such Act or under a waiver of such plan.

Subtitle I—Improving the Quality of

Medicaid for Patients and Providers

SEC. 2701. ADULT HEALTH QUALITY MEASURES.

Title XI of the Social Security Act (42 U.S.C. 1301 et seq.),

as amended by section 401 of the Children’s Health Insurance

Program Reauthorization Act of 2009 (Public Law 111–3), is

amended by inserting after section 1139A the following new section:

‘‘SEC. 1139B. ADULT HEALTH QUALITY MEASURES.