To amend section 1341 of the Patient Protection and Affordable Care Act to repeal the funding mechanism for the transitional reinsurance program in the individual market, and for other purposes.

Summary: This bill amends the Patient Protection and Affordable Care Act to eliminate the funding mechanism for the transitional reinsurance program. Currently, issuers of individual, group, and self-funded plans are required to pay a fee in 2014, 2015, and 2016 to fund the three-year transitional reinsurance program. Under the transitional reinsurance program, non-grandfathered individual market plans that enroll high-cost individuals are eligible for reinsurance payments. This bill eliminates the requirement for issuers to pay a fee in 2015 and 2016. Instead, it authorizes appropriations for the program. This bill also requires the Government Accountability Office to audit 2014 expenditures under the transitional reinsurance program. 

SECTION 1. FINDINGS; PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) According to the most recent United States Census, 
        employer-based health insurance is the largest source of health 
        insurance coverage in the United States. Of those employed, 70 
        percent receive employment-based health insurance. Of 
        unemployed Americans, 30 percent receive employer-sponsored 
        health insurance.
            (2) Despite the large percentages of coverage, as health 
        care costs climb, the percentage of Americans who receive 
        health insurance through employers has fallen significantly 
        over the last decade--from 70 percent nationwide in 2000 to 60 
        percent in 2011, according to a report by the Robert Wood 
        Johnson Foundation.
            (3) According to recent surveys done by the National 
        Business Group on Health and the Kaiser Family Foundation, most 
        companies continue to provide health insurance for employees 
        and wish to continue doing so into the future.
            (4) Employers who offer insurance will not contribute 
        additional risk to the health insurance exchanges established 
        in the Patient Protection and Affordable Care Act (in this Act 
        referred to as ``PPACA'').
            (5) The transitional reinsurance program, established in 
        section 1341 of PPACA, is intended to stabilize risk in the 
        individual health insurance market during the first three years 
        of the health insurance exchanges, as established by that Act.
            (6) PPACA also requires that the Treasury collect a fee for 
        each employer-sponsored covered life in order to pay for the 
        transitional reinsurance program.
            (7) This fee is a disincentive for employers to continue 
        offering coverage to all employees, and does not give employers 
        any benefits of the transitional reinsurance program.
    (b) Purpose.--It is the purpose of this Act to remove the current 
funding mechanism for the transitional reinsurance program. Employer-
sponsored insurance should be supported so that Americans can sustain 
quality health coverage.

SEC. 2. CHANGES IN FUNDING FOR TRANSITIONAL REINSURANCE PROGRAM IN THE 
              INDIVIDUAL MARKET.

    Section 1341(b) of the Patient Protection and Affordable Care Act 
(Public Law 111-148; 42 U.S.C. 18061(b)) is amended--
            (1) in paragraph (1), by striking ``3-year period'' and 
        inserting ``1-year period'' each place it appears;
            (2) in paragraph (3)(A), by striking ``36-month period'' 
        and inserting ``12-month period'';
            (3) in paragraph (3)(B)(iii), by striking ``, 
        $6,000,000,000 for plan years beginning 2015, and 
        $4,000,000,000 for plan years beginning in 2016'';
            (4) in paragraph (3)(B)(iv), by striking ``, an additional 
        $2,000,000,000 for 2015, and an additional $1,000,000,000 for 
        2016'';
            (5) in paragraph (4)(A), by striking ``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 inserting ``only used with 
        respect to the calendar year for which amounts are collected 
        based on the reinsurance needs for that year, as determined by 
        the Secretary'';
            (6) in paragraph (4), by amending subparagraph (B) to read 
        as follows:
                    ``(B) amounts remaining unexpended as of December, 
                31, 2015, shall be deposited into the general fund of 
                the Treasury of the United States.''; and
            (7) by adding at the end the following new paragraphs:
            ``(5) Availability of funding for states for 2015 and 
        2016.--
                    ``(A) Authorization of appropriations; payment 
                formula.--There are hereby authorized to be 
                appropriated, based on the best estimates of the NAIC, 
                $6,000,000,000 for plan years beginning in 2015 and 
                $4,000,000,000 for plan years beginning in 2016 to make 
                reinsurance payments to health insurance issuers that 
                cover high-risk individuals in the individual market 
                (excluding grandfathered health plans) that insure 
                high-risk individuals consistent with this paragraph.
                    ``(B) Fund availability.--The amounts appropriated 
                under subparagraph (A) for plans years beginning in a 
                calendar year shall be allocated among States and only 
                used with respect to the calendar year for which 
                amounts are collected based on the reinsurance needs 
                for that particular year, as determined by the 
                Secretary and the amounts remaining unexpended as of 
                December 31 of the following year shall be deposited 
                into the general fund of the Treasury of the United 
                States.
            ``(6) GAO audit of use of 2014 funds.--The Comptroller 
        General of the United States shall provide for an audit of 
        expenditures made under this subsection with respect plans 
        years beginning during 2014. Such audit shall include a 
        determination of the number of claims submitted by health 
        insurance issuers, the amount of such claims, a comparison of 
        the amount of such claims and the amounts collected to cover 
        such claims, and the amount of reinsurance payments made under 
        this section to health insurance issuers. The Comptroller 
        General shall submit a report on such audit to Congress not 
        later than 3 months after the last date that such reinsurance 
        payments are made, but not later than July 1, 2016.''.