To amend the Patient Protection and Affordable Care Act to provide for savings to the Federal Government by permitting pass-through funding for State authorized public entity health benefits pools.

SECTION 1. SAVINGS FROM STATE AUTHORIZED PUBLIC ENTITY HEALTH BENEFITS 
              POOLS.

    The Patient Protection and Affordable Care Act (Public Law 111-148) 
is amended by inserting after section 1332 (42 U.S.C. 18052) the 
following new section (and inserting a corresponding item in the table 
of contents of the Act):

``SEC. 1332A. SAVINGS FROM STATE AUTHORIZED PUBLIC ENTITY BENEFITS 
              POOLS.

    ``(a) Application.--
            ``(1) In general.--A State authorized public entity health 
        benefits pool (in this section referred to as a `pool') may 
        apply to the Secretary for a pass through of funding described 
        in subsection (b) with respect to health care benefits provided 
        through that pool for coverage years beginning on or after 
        January 1, 2014.
            ``(2) Approval of application.--The Secretary shall approve 
        such an application of a pool if the Secretary determines that 
        health care benefits provided through the pool--
                    ``(A) will provide coverage that is at least as 
                comprehensive as the coverage defined in section 
                1302(b);
                    ``(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; and
                    ``(C) will result in cost savings to the Federal 
                Government because the cost of providing health care 
                benefits to individuals through the pool will be less 
                than the cost of providing health care benefits to such 
                individuals had they become participants in a qualified 
                health plan offered through an Exchange, and so the 
                payment amount under subsection (b) will be less than 
                the total of premium tax credits, cost-sharing 
                reductions, or small business credits that would 
                otherwise be required if individuals and small 
                employers in the pool were instead participants in an 
                Exchange.
            ``(3) Consideration.--Not later than 90 days after the date 
        of the enactment of this section, the Secretary shall 
        promulgate regulations relating to pass through of funding 
        under this section. The Secretary shall begin accepting 
        applications under this section no later than 180 days after 
        such date of enactment.
            ``(4) Additional consequences of approval.--An individual 
        receiving health care benefits through such a pool for which 
        such an application is approved under this section shall be 
        treated, for purposes of section 5000A of the Internal Revenue 
        Code of 1986, as being covered under minimum essential coverage 
        described in subsection (f)(1)(E) of such section.
    ``(b) Pass Through of Funding.--
            ``(1) In general.--With respect to a pool application under 
        subsection (a)(1), under which individuals and small employers 
        in the pool would not qualify for the premium tax credits, 
        cost-sharing reductions, or small business credits under 
        sections 36B or 45R of the Internal Revenue Code of 1986 for 
        which they would otherwise be eligible if they had entered an 
        Exchange, the Secretary shall provide for an alternative means 
        by which an aggregate amount determined under paragraph (2) 
        shall be paid to the pool for purposes of implementing the 
        application.
            ``(2) Payment determination.--The amount to be paid under 
        paragraph (1) shall be determined--
                    ``(A) based on the sum of premium tax credits, 
                cost-sharing reductions, and small business credits 
                under sections 36B or 45R of the Internal Revenue Code 
                of 1986 that would have been provided with respect to 
                individuals in the pool had the health care benefits 
                provided by the pool been a qualified health plan 
                offered in an Exchange, but taking into account the 
                lower cost of providing health care benefits to 
                individuals through the pool; and
                    ``(B) annually by the Secretary, taking into 
                consideration the experience of individuals and small 
                employers participating in Exchanges.
    ``(c) Timely Determination by Secretary.--The Secretary shall make 
a determination under subsection (a)(1) with respect to the application 
of a pool not later than 180 days after the date of receipt of such 
application, and shall notify the pool involved of such determination.
    ``(d) Definitions.--In this section:
            ``(1) The term `public entity' means a county, 
        municipality, special district, school district, junior college 
        district, housing authority, or other political subdivision or 
        public entity defined under State law.
            ``(2) The term `State authorized public entity health 
        benefits pool' means a risk pool authorized or permitted by 
        State statute or otherwise regulated by a State agency under 
        which--
                    ``(A) a public entity or group of public entities, 
                directly or through a pool, provide health care 
                benefits primarily for public entity officials, 
                employees, and retirees and their dependents; and 
                officials, employees, and retirees and dependents of 
                affiliated service contractors of such public entities; 
                and
                    ``(B) such pool may provide health care benefits 
                from the assets of the pool or its member public 
                entities through any combination of self-funded 
                arrangements or fully insured products.
            ``(3) The term `affiliated service contractor' means an 
        organization that provides governmental or quasi-governmental 
        services on behalf of a public entity when such contractor is 
        eligible to obtain health care benefits through a state 
        authorized public entity health benefits pool for its 
        officials, employees, retirees and their dependents.''.

Summary: Amends the Patient Protection and Affordable Care Act (PPACA) to allow a state-authorized public entity benefits pool to apply to the Secretary of Health and Human Services (HHS) for pass-through funding with respect to health care benefits provided through the pool for coverage years beginning on or after January 1, 2014. Requires the Secretary to approve such a pool if the health care benefits provided through it will: (1) provide at least the essential health benefits, (2) provide coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable as the health insurance requirements of PPACA would provide, and (3) result in cost savings to the federal government because the cost of coverage through the pool is less than the cost of coverage through an exchange. Treats an individual covered under such a plan as having minimum essential coverage for purposes of the Internal Revenue Code. Requires the Secretary to provide for an alternative means by which an aggregate amount shall be paid to the pool annually based on the premium tax credits, cost-sharing reductions, and small business credits that would have been provided to an exchange plan. Gives the Secretary 180 days to make a determination on an application under this Act.