State Health Care Options Act of 2015

Summary: State Health Care Options Act of 2015  This bill amends the Patient Protection and Affordable Care Act (PPACA) and the Internal Revenue Code to modify the process for state innovation waivers. (Under current law, the Department of Health and Human Services [HHS] and the Department of the Treasury may approve a state's request to waive specific provisions of PPACA if the state proposal provides health care access that is comparable to what would exist without a waiver and does not increase the federal deficit.) The bill expedites the approval process for:   a health-flex waiver from requirements for qualified health plans and essential health benefits; and  an exchange waiver to assume responsibility for certain functions of the exchanges, including the certification of permissible health plans.  If a state submits to HHS a notice of its intent to implement one or both of the waivers, the waivers shall be deemed to be approved and effective. The notice must include the years for which the waiver shall be effective (which may be indefinite), an assurance the state will comply with reporting requirements, and other specified details.  A state may not waive PPACA requirements related to coverage for preexisting conditions and the extension of coverage for adult children.  States with exchange waivers may certify permissible health plans that residents may purchase outside of an exchange, if the plans meet specified requirements regarding benefits, levels of coverage, transparency of premium justifications, and information. Taxpayers in waiver states that are living at or below 300% of the federal poverty level (400% under current law) may receive health insurance subsidies under PPACA. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Health Care Options Act of 
2015''.

SEC. 2. INCREASING STATE FLEXIBILITY THROUGH PROVISION OF HEALTH-FLEX 
              AND EXCHANGE WAIVERS.

    (a) State Options.--
            (1) In general.--The Patient Protection and Affordable Care 
        Act is amended by inserting after section 1332 (42 U.S.C. 
        18052) the following:

``SEC. 1332A. OPTIONS FOR STATE FLEXIBILITY.

    ``(a) State Options.--
            ``(1) In general.--If a State provides to the Secretary a 
        notice (in this section referred to as a `waiver notice') of 
        intent to implement a health-flex waiver (described in 
        subsection (b)(1)), an exchange waiver (described in subsection 
        (b)(2)), or both, and such notice complies with paragraph (2), 
        the waiver shall be deemed to be approved and effective, except 
        as provided in paragraphs (5) and (6).
            ``(2) Contents of a waiver notice.--A waiver notice with 
        respect to a State shall include the following:
                    ``(A) The years for which the waiver shall be 
                effective (which may be indefinite).
                    ``(B) An assurance that the State will comply with 
                annual reporting requirements established by the 
                Secretary relating to the activities of the State under 
                the waiver, which reporting requirements shall include 
                information on affordability, access, and transparency.
                    ``(C) In the case of a health-flex waiver--
                            ``(i) the requirements to be waived;
                            ``(ii) an assurance that there will be 
                        available throughout the State one or more 
                        health plans that provide the catastrophic 
                        level of coverage described in subsection 
                        (c)(1)(B)(i) for which an enrollee's required 
                        contribution (as defined in section 
                        5000A(e)(1)(B) of the Internal Revenue Code of 
                        1986, determined on an annual basis) does not 
                        exceed 6.5 percent of the median household 
                        income (as defined in section 36B(d)(2)(A) of 
                        such Code) of residents of the State for the 
                        most recent taxable year for which information 
                        on such median household income is available to 
                        the Secretary; and
                            ``(iii) an assurance that the certifying 
                        entity (as defined in subsection (c)(2)) has a 
                        process to certify health plans as permissible 
                        health plans consistent with subsection (c).
                    ``(D) In the case of an exchange waiver, assurances 
                that the State--
                            ``(i) will be responsible for functions 
                        that are necessary to carry out the waiver that 
                        would otherwise be performed by an Exchange;
                            ``(ii) will comply with subsection (d);
                            ``(iii) has the capability to receive from 
                        the Secretary subsidy eligibility information; 
                        and
                            ``(iv) has and is applying standards for 
                        privacy, security, and data encryption for 
                        subsidy eligibility information that are 
                        determined to be satisfactory by the Secretary.
            ``(3) Effectiveness.--A waiver under this section shall be 
        effective for the years described in the waiver notice under 
        paragraph (2)(A), except that no waiver under this section 
        shall be effective for a year unless the waiver notice for such 
        waiver was submitted before November 1 of the previous year.
            ``(4) Modification or termination.--A State may modify or 
        terminate a waiver for the State under this section by 
        submitting to the Secretary a subsequent waiver notice with 
        respect to such waiver.
            ``(5) Disapproval authority.--If the Secretary determines 
        that a waiver notice fails to comply with paragraph (2) and 
        notifies the State of the reason for such determination not 
        later than 30 days after the date on which the State submits 
        the waiver notice, such waiver notice shall not be effective.
            ``(6) Revocation.--If the Secretary determines that a State 
        is in violation of an assurance submitted under paragraph (2) 
        and notifies the State of the reason for such determination, 
        the Secretary may revoke the waiver. Such revocation shall be 
        effective on the first day of the first year that begins after 
        the 60-day period that begins on the date on which notification 
        of the revocation occurs.
            ``(7) Construction.--Nothing in this section shall be 
        construed as requiring a State to enact a law in order to carry 
        out the provisions of this section.
    ``(b) Waivers.--
            ``(1) Health-flex waiver.--A waiver under this paragraph 
        (in this section referred to as a `health-flex waiver'), with 
        respect to a State, is a waiver of any of the requirements in 
        sections 1301 through 1303.
            ``(2) Exchange waiver.--A waiver under this paragraph (in 
        this section referred to as an `exchange waiver') permits a 
        State to elect to be responsible for certain Exchange 
        functions, including serving as the certifying entity for the 
        purposes of subsection (c).
            ``(3) No waiver of adult child coverage and preexisting 
        conditions.--Nothing in this subsection may be construed to 
        permit a State to waive the following:
                    ``(A) Prohibition of preexisting condition 
                exclusion.--Section 2704 of the Public Health Service 
                Act (42 U.S.C. 300gg-3).
                    ``(B) Extension of coverage for adult children.--
                Section 2714 of the Public Health Service Act (42 
                U.S.C. 300gg-14).
    ``(c) Certifying Permissible Health Plans.--
            ``(1) Permissible health plan defined.--For the purposes of 
        this section, the term `permissible health plan' means, with 
        respect to a State, a health plan that is offered for sale in 
        the individual or small group market in the State and that is 
        certified by a certifying entity to meet the following 
        requirements:
                    ``(A) Benefits.--The plan provides benefits for 
                items and services within each of the following 
                categories:
                            ``(i) Ambulatory patient services.
                            ``(ii) Emergency services.
                            ``(iii) Hospitalization.
                            ``(iv) Physician services.
                    ``(B) Levels of coverage.--The plan provides a 
                level of coverage that complies with one of the 
                following levels of coverage (as established by the 
                State):
                            ``(i) Catastrophic.
                            ``(ii) Standard.
                            ``(iii) High.
                    ``(C) Transparency justifying premiums.--The issuer 
                of the plan makes available to the public information 
                about the demographics of the population enrolled under 
                the plan, the utilization of health care items and 
                services by such population under the plan, and other 
                factors that serve as a justification for the premium 
                levels (including any premium increases) under the 
                plan.
                    ``(D) Information requirement.--The issuer of the 
                plan submits information as required under section 
                36B(g)(3)(C) of the Internal Revenue Code of 1986.
            ``(2) Certifying entity defined.--In this section, the term 
        `certifying entity' means--
                    ``(A) in the case of a health plan that is offered 
                through an Exchange established by a State, such 
                Exchange; and
                    ``(B) in the case of a health plan that is not so 
                offered, the State in which such plan is offered.
            ``(3) Effect of certifying permissible health plans.--With 
        respect to eligibility for premium assistance tax credits and 
        reduced cost-sharing for individuals enrolled in permissible 
        health plans, see section 36B(g) of the Internal Revenue Code 
        of 1986 and section 1402(f)(4) of the Patient Protection and 
        Affordable Care Act (42 U.S.C. 18071), respectively.
    ``(d) Determining Subsidy Eligibility.--
            ``(1) In general.--In the case of a State that has in 
        effect an exchange waiver, the State shall determine the 
        eligibility of individuals residing in the State for the 
        assistance described in subparagraphs (A) and (B) of paragraph 
        (3).
            ``(2) Disclosure of federal information.--In the case of a 
        State that has in effect an exchange waiver, the Secretary or 
        the Secretary of the Treasury, as appropriate, shall make 
        subsidy eligibility information available to the State, but 
        only the minimum amount of information necessary to enable the 
        State to determine the amount of the assistance described in 
        subparagraphs (A) and (B) of paragraph (3) for which the 
        individual enrolled in a permissible health plan is eligible.
            ``(3) Subsidy eligibility information defined.--In this 
        subsection, the term `subsidy eligibility information' means 
        information concerning the eligibility of an enrollee or a 
        prospective enrollee in a health plan for--
                    ``(A) a premium assistance credit under section 
                36B(a) of the Internal Revenue Code of 1986; and
                    ``(B) reduced cost-sharing under section 1402.''.
            (2) Reporting requirements.--The Secretary shall establish 
        annual reporting requirements under 1332A(a)(2)(B) of the 
        Patient Protection and Affordable Care Act that include 
        information on affordability, access, and transparency.
            (3) Conforming amendment.--The table of contents of the 
        Patient Protection and Affordable Care Act is amended by 
        inserting after the item relating to section 1332 the 
        following:

``Sec. 1332A. Options for State flexibility.''.
    (b) Subsidies for Individuals Enrolled in Permissible Health 
Plans.--
            (1) Premium assistance tax credits.--Section 36B of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by redesignating subsection (g) as subsection 
                (h); and
                    (B) by inserting after subsection (f) the 
                following:
    ``(g) Special Rules in Case of Waivers Under Section 1332A of 
PPACA.--
            ``(1) Limiting eligibility to taxpayers with income at or 
        below 300 percent of fpl.--In the case of a section 1332A 
        State, subsection (c)(1)(A) shall be applied by substituting 
        `300 percent' for `400 percent' for a taxpayer who obtains 
        coverage through a plan issued under the law of such State for 
        a year.
            ``(2) Permissible health plans.--In the case of a taxpayer 
        who obtains coverage with respect to a section 1332A State, for 
        a coverage month, a permissible health plan, as defined in 
        section 1332A(c)(1) of the Patient Protection and Affordable 
        Care Act, shall be treated as a qualified health plan with 
        respect to such taxpayer.
            ``(3) Adjusted monthly premium.--In the case of a State 
        that has in effect a health-flex waiver described in section 
        1332A(b)(1) of such Act, subsection (b)(3)(C) shall be applied 
        as if the adjusted monthly premium calculated under such 
        subsection were multiplied by the ratio of the full actuarial 
        value of the benefits provided under the plan being offered to 
        the full actuarial value of essential health benefits.
            ``(4) Eliminating certain requirements in the case of an 
        exchange waiver.--In the case of a State that has in effect an 
        exchange waiver described in section 1332A(b)(2) of such Act 
        for a coverage month, the following shall apply:
                    ``(A) Eliminating exchange references.--Subsections 
                (b)(2)(A), (c)(2)(A)(i), (d)(3)(B), and (e)(3) shall be 
                applied by treating the permissible health plan as if 
                it were offered through an Exchange.
                    ``(B) Applicable second lowest cost silver plan.--
                Subsection (b)(3)(B) shall be applied by substituting--
                            ``(i) `qualified health plan for which, if 
                        the adjusted monthly premium, taking into 
                        account subsection (g)(3), were multiplied by 
                        the ratio of 70 percent to the level of 
                        coverage expressed as a percent of the full 
                        actuarial value of the benefits provided under 
                        the plan, the product of such multiplication 
                        would be the second lowest such product for any 
                        plan offered in' for `second lowest cost silver 
                        plan of', and
                            ``(ii) `is offered in such rating area' for 
                        `is offered through the same Exchange through 
                        which the qualified health plans taken into 
                        account under paragraph (2)(A) were offered'.
                    ``(C) Information requirement.--In the case of a 
                permissible health plan which is not offered through an 
                Exchange, such plan shall provide to the Secretary and 
                to the individual enrolled in the plan the information 
                described in subsection (f)(3) with respect to such 
                plan and such individual.
            ``(5) Special rule for part-time resident taxpayers with 
        income above 300 percent of fpl.--In the case of a taxpayer 
        who, during a taxable year, obtains coverage with respect to a 
        1332A State and with respect to a State which is not a 1332A 
        State, paragraph (1) shall not apply and the premium assistance 
        amount (otherwise determined under subsection (b)(2)) for such 
        taxpayer for a coverage month shall be 0 if--
                    ``(A) the household income of the taxpayer for the 
                taxable year equals or exceeds 300 percent of an amount 
                equal to the poverty line for a family of the size 
                involved, and
                    ``(B) the taxpayer receives coverage with respect 
                to a section 1332A State for such coverage month.
            ``(6) Section 1332a state defined.--For purposes of this 
        subsection, the term `section 1332A State' means a State has in 
        effect a waiver under section 1332A of the Patient Protection 
        and Affordable Care Act.''.
            (2) Reduced cost-sharing.--Section 1402(f) of the Patient 
        Protection and Affordable Care Act (42 U.S.C. 18071(f)) is 
        amended by adding at the end the following:
            ``(4) 1332A waivers.--If a State has in effect a waiver 
        under 1332A, the following shall apply with respect to a 
        coverage month with respect to individuals residing in the 
        State on the first of the month:
                    ``(A) Eliminating reduced cost-sharing for 
                individuals with income above 300 percent of fpl.--No 
                individual whose household income exceeds 300 percent 
                of the poverty line for a family of the size involved 
                may be considered an eligible insured under this 
                section.
                    ``(B) Permissible health plans.--For the purposes 
                of this section, a permissible health plan, as defined 
                in section 1332A(c)(A), shall be treated as a qualified 
                health plan.
                    ``(C) Exchange waiver.--If a State has in effect an 
                exchange waiver described in section 1332A(b)(2), 
                subsections (b)(1), (d)(1), and (e)(3) shall apply as 
                if there were no references to an Exchange.''.
    (c) Acceleration of Innovation Waivers.--Section 1332(a)(1) of the 
Patient Protection and Affordable Care Act (42 U.S.C. 18052) is 
amended, in the matter preceding subparagraph (A), by striking 
``January 1, 2017'' and inserting ``the date of the enactment of the 
State Health Care Options Act of 2015''.