# H.R. 3962/Division A
## DIVISION A—AFFORDABLE HEALTH CARE CHOICES
### SEC. 100. PURPOSE; TABLE OF CONTENTS OF DIVISION; GENERAL DEFINITIONS.

    (a) Purpose.—
          (1) IN GENERAL.—
             The purpose of this division is to provide affordable, quality health care for all Americans and reduce the growth in health care spending.
          (2) BUILDING ON CURRENT SYSTEM.—
             This division achieves this purpose by building on what works in today's health care system, while repairing the aspects that are broken.
          (3) INSURANCE REFORMS.—
             This division—
                (A) enacts strong insurance market reforms;
                (B) creates a new Health Insurance Exchange, with a public health insurance option alongside private plans;
                (C) includes sliding scale affordability credits; and
                (D) initiates shared responsibility among workers, employers, and the Government;
             so that all Americans have coverage of essential health benefits.
          (4) HEALTH DELIVERY REFORM.—
             This division institutes health delivery system reforms both to increase quality and to reduce growth in health spending so that health care becomes more affordable for businesses, families, and Government.
    (b) Table of Contents of Division.—
       The table of contents of this division is as follows:
          Sec. 100. Purpose; table of contents of division; general definitions.

#### TITLE I—IMMEDIATE REFORMS

             Sec. 101. National high-risk pool program.
             Sec. 102. Ensuring value and lower premiums.
             Sec. 103. Ending health insurance rescission abuse.
             Sec. 104. Sunshine on price gouging by health insurance issuers.
             Sec. 105. Requiring the option of extension of dependent coverage for uninsured young adults.
             Sec. 106. Limitations on preexisting condition exclusions in group health plans in advance of applicability of new prohibition of preexisting condition exclusions.
             Sec. 107. Prohibiting acts of domestic violence from being treated as preexisting conditions.
             Sec. 108. Ending health insurance denials and delays of necessary treatment for children with deformities.
             Sec. 109. Elimination of lifetime limits.
             Sec. 110. Prohibition against postretirement reductions of retiree health benefits by group health plans.
             Sec. 111. Reinsurance program for retirees.
             Sec. 112. Wellness program grants.
             Sec. 113. Extension of COBRA continuation coverage.
             Sec. 114. State Health Access Program grants.
             Sec. 115. Administrative simplification.

#### TITLE II—PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

             Subtitle A—General Standards
                Sec. 201. Requirements Reforming Health Insurance Marketplace.
                Sec. 202. Protecting the Choice to Keep Current Coverage.
             Subtitle B—Standards Guaranteeing Access to Affordable Coverage
                Sec. 211. Prohibiting Pre-existing Condition Exclusions.
                Sec. 212. Guaranteed Issue and Renewal for Insured Plans and Prohibiting Rescissions.
                Sec. 213. Insurance Rating Rules.
                Sec. 214. Nondiscrimination in Benefits; Parity in Mental Health and Substance Abuse Disorder Benefits.
                Sec. 215. Ensuring Adequacy of Provider Networks.
                Sec. 216. Requiring the Option of Extension of Dependent Coverage for Uninsured Young Adults.
                Sec. 217. Consistency of Costs and Coverage Under Qualified Health Benefits Plans During Plan Year.
             Subtitle C—Standards Guaranteeing Access to Essential Benefits
                Sec. 221. Coverage of Essential Benefits Package.
                Sec. 222. Essential Benefits Package Defined.
                Sec. 223. Health Benefits Advisory Committee.
                Sec. 224. Process for Adoption of Recommendations; Adoption of Benefit Standards.
             Subtitle D—Additional Consumer Protections
                Sec. 231. Requiring Fair Marketing Practices by Health Insurers.
                Sec. 232. Requiring Fair Grievance and Appeals Mechanisms.
                Sec. 233. Requiring Information Transparency and Plan Disclosure.
                Sec. 234. Application to Qualified Health Benefits Plans Not Offered Through the Health Insurance Exchange.
                Sec. 235. Timely Payment of Claims.
                Sec. 236. Standardized Rules for Coordination and Subrogation of Benefits.
                Sec. 237. Application of Administrative Simplification.
                Sec. 238. State Prohibitions on Discrimination Against Health Care Providers.
                Sec. 239. Protection of Physician Prescriber Information.
                Sec. 240. Dissemination of Advance Care Planning Information.
             Subtitle E—Governance
                Sec. 241. Health Choices Administration; Health Choices Commissioner.
                Sec. 242. Duties and Authority of Commissioner.
                Sec. 243. Consultation and Coordination.
                Sec. 244. Health Insurance Ombudsman.
             Subtitle F—Relation to Other Requirements; Miscellaneous
                Sec. 251. Relation to Other Requirements.
                Sec. 252. Prohibiting Discrimination in Health Care.
                Sec. 253. Whistleblower Protection.
                Sec. 254. Construction Regarding Collective Bargaining.
                Sec. 255. Severability.
                Sec. 256. Treatment of Hawaii Prepaid Health Care Act.
                Sec. 257. Actions by State Attorneys General.
                Sec. 258. Application of State and Federal Laws Regarding Abortion.
                Sec. 259. Nondiscrimination on Abortion and Respect for Rights of Conscience.
                Sec. 260. Authority of Federal Trade Commission.
                Sec. 261. Construction Regarding Standard of Care.
                Sec. 262. Restoring Application of Antitrust Laws to Health Sector Insurers.
                Sec. 263. Study and Report on Methods to Increase EHR Use By Small Health Care Providers.
                Sec. 264. Performance Assessment and Accountability: Application of GPRA.
                Sec. 265. Limitation on Abortion Funding.

#### TITLE III—HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

             Subtitle A—Health Insurance Exchange
                Sec. 301. Establishment of Health Insurance Exchange; Outline of Duties; Definitions.
                Sec. 302. Exchange-Eligible Individuals and Employers.
                Sec. 303. Benefits Package Levels.
                Sec. 304. Contracts for the Offering of Exchange-Participating Health Benefits Plans.
                Sec. 305. Outreach and Enrollment of Exchange-Eligible Individuals & Employers in Exchange-Participating Health Benefits Plan.
                Sec. 306. Other Functions.
                Sec. 307. Health Insurance Exchange Trust Fund.
                Sec. 308. Optional Operation of State-Based Health Insurance Exchanges.
                Sec. 309. Interstate Health Insurance Compacts.
                Sec. 310. Health Insurance Cooperatives.
                Sec. 311. Retention of DOD and VA Authority.
             Subtitle B—Public Health Insurance Option
                Sec. 321. Establishment and Administration of a Public Health Insurance Option as an Exchange-Qualified Health Benefits Plan.
                Sec. 322. Premiums and Financing.
                Sec. 323. Payment Rates for Items and Services.
                Sec. 324. Modernized Payment Initiatives and Delivery System Reform.
                Sec. 325. Provider Participation.
                Sec. 326. Application of Fraud and Abuse Provisions.
                Sec. 327. Application of HIPAA Insurance Requirements.
                Sec. 328. Application of Health Information Privacy, Security, and Electronic Transaction Requirements.
                Sec. 329. Enrollment in Public Health Insurance Option is Voluntary.
                Sec. 330. Enrollment in Public Health Insurance Option by Members of Congress.
                Sec. 331. Reimbursement of Secretary of Veterans Affairs.
             Subtitle C—Individual Affordability Credits
                Sec. 341. Availability Through Health Insurance Exchange.
                Sec. 342. Affordable Credit Eligible Individual.
                Sec. 343. Affordable Premium Credit.
                Sec. 344. Affordability Cost-Sharing Credit.
                Sec. 345. Income Determinations.
                Sec. 346. Special Rules for Application to Territories.
                Sec. 347. No Federal Payment for Undocumented Aliens.

#### TITLE IV—SHARED RESPONSIBILITY

             Subtitle A—Individual Responsibility
                Sec. 401. Individual Responsibility.
             Subtitle B—Employer Responsibility
                Part 1—Health Coverage Participation Requirements
                   Sec. 411. Health Coverage Participation Requirements.
                   Sec. 412. Employer Responsibility to Contribute Towards Employee and Dependent Coverage.
                   Sec. 413. Employer Contributions in Lieu of Coverage.
                   Sec. 414. Authority Related to Improper Steering.
                   Sec. 415. Impact Study on Employer Responsibility Requirements.
                   Sec. 416. Study on Employer Hardship Exemption.
                Part 2—Satisfaction of Health Coverage Participation Requirements
                   Sec. 421. Satisfaction of Health Coverage Participation Requirements Under the Employee Retirement Income Security Act of 1974.
                   Sec. 422. Satisfaction of Health Coverage Participation Requirements Under the Internal Revenue Code of 1986.
                   Sec. 423. Satisfaction of Health Coverage Participation Requirements Under the Public Health Service Act.
                   Sec. 424. Additional Rules Relating to Health Coverage Participation Requirements.

#### TITLE V—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

             Subtitle A—Provisions Relating to Health Care Reform
                Part 1—Shared Responsibility
                   Subpart A—Individual Responsibility
                      Sec. 501. Tax On Individuals Without Acceptable Health Care Coverage.
                   Subpart B—Employer Responsibility
                      Sec. 511. Election to Satisfy Health Coverage Participation Requirements.
                      Sec. 512. Health Care Contributions of Nonelecting Employers.
                Part 2—Credit for Small Business Employee Health Coverage Expenses
                   Sec. 521. Credit for Small Business Employee Health Coverage Expenses.
                Part 3—Limitations on Health Care Related Expenditures
                   Sec. 531. Distributions for medicine qualified only if for prescribed drug or insulin.
                   Sec. 532. Limitation on health flexible spending arrangements under cafeteria plans.
                   Sec. 533. Increase in penalty for nonqualified distributions from health savings accounts.
                   Sec. 534. Denial of deduction for federal subsidies for prescription drug plans which have been excluded from gross income.
                Part 4—Other Provisions to Carry Out Health Insurance Reform
                   Sec. 541. Disclosures to carry out health insurance exchange subsidies.
                   Sec. 542. Offering of exchange-participating health benefits plans through cafeteria plans.
                   Sec. 543. Exclusion from gross income of payments made under reinsurance program for retirees.
                   Sec. 544. CLASS program treated in same manner as long-term care insurance.
                   Sec. 545. Exclusion from gross income for medical care provided for Indians.
             Subtitle B—Other Revenue Provisions
                Part 1—General Provisions
                   Sec. 551. Surcharge on High Income Individuals.
                   Sec. 552. Excise Tax on Medical Devices.
                   Sec. 553. Expansion of Information Reporting Requirements.
                   Sec. 554. Repeal of Worldwide Allocation of Interest.
                   Sec. 555. Exclusion of Unprocessed Fuels from the Cellulosic Biofuel Producer Credit.
                Part 2—Prevention of Tax Avoidance
                   Sec. 561. Limitation on Treaty Benefits for Certain Deductible Payments.
                   Sec. 562. Codification of Economic Substance Doctrine; Penalties.
                   Sec. 563. Certain Large or Publicly Traded Persons made Subject to a more likely than not Standard for Avoiding Penalties on Underpayments.
                Part 3—Parity in Health Benefits
                   Sec. 571. Certain Health Related Benefits Applicable to Spouses and Dependents Extended to Eligible Beneficiaries.
    (c) General Definitions.—
       Except as otherwise provided, in this division:
          (1) ACCEPTABLE COVERAGE.—
             The term “acceptable coverage” has the meaning given such term in section 302(d)(2).
          (2) BASIC PLAN.—
             The term “basic plan” has the meaning given such term in section 303(c).
          (3) COMMISSIONER.—
             The term “Commissioner” means the Health Choices Commissioner established under section 241.
          (4) COST-SHARING.—
             The term “cost-sharing” includes deductibles, coinsurance, copayments, and similar charges, but does not include premiums, balance billing amounts for non-network providers, or spending for non-covered services.
          (5) DEPENDENT.—
             The term “dependent” has the meaning given such term by the Commissioner and includes a spouse.
          (6) EMPLOYMENT-BASED HEALTH PLAN.—
             The term “employment-based health plan”—
                (A) means a group health plan (as defined in section 733(a)(1) of the Employee Retirement Income Security Act of 1974);
                (B) includes such a plan that is the following:
                      (i) FEDERAL, STATE, AND TRIBAL GOVERNMENTAL PLANS.—
                         A governmental plan (as defined in section 3(32) of the Employee Retirement Income Security Act of 1974), including a health benefits plan offered under chapter 89 of title 5, United States Code.
                      (ii) CHURCH PLANS.—
                         A church plan (as defined in section 3(33) of the Employee Retirement Income Security Act of 1974); and
                (C) excludes coverage described in section 302(d)(2)(E) (relating to TRICARE).
          (7) ENHANCED PLAN.—
             The term “enhanced plan” has the meaning given such term in section 303(c).
          (8) ESSENTIAL BENEFITS PACKAGE.—
             The term “essential benefits package” is defined in section 222(a).
          (9) EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.—
             The term “Exchange-participating health benefits plan” means a qualified health benefits plan that is offered through the Health Insurance Exchange and may be purchased directly from the entity offering the plan or through enrollment agents and brokers.
          (10) FAMILY.—
             The term “family” means an individual and includes the individual’s dependents.
          (11) FEDERAL POVERTY LEVEL; FPL.—
             The terms “Federal poverty level” and “FPL” have the meaning given the term “poverty line” in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by such section.
          (12) HEALTH BENEFITS PLAN.—
             The term “health benefits plan” means health insurance coverage and an employment-based health plan and includes the public health insurance option.
          (13) HEALTH INSURANCE COVERAGE.—
             The term “health insurance coverage” has the meaning given such term in section 2791 of the Public Health Service Act, but does not include coverage in relation to its provision of excepted benefits—
                (A) described in paragraph (1) of subsection (c) of such section; 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.
          (14) HEALTH INSURANCE ISSUER.—
             The term “health insurance issuer” has the meaning given such term in section 2791(b)(2) of the Public Health Service Act.
          (15) HEALTH INSURANCE EXCHANGE.—
             The term “Health Insurance Exchange” means the Health Insurance Exchange established under section 301.
          (16) INDIAN.—
             The term “Indian” has the meaning given such term in section 4 of the Indian Health Care Improvement Act (24 U.S.C. 1603).
          (17) INDIAN HEALTH CARE PROVIDER.—
             The term “Indian health care provider” means a health care program operated by the Indian Health Service, an Indian tribe, tribal organization, or urban Indian organization as such terms are defined in section 4 of the Indian Health Care Improvement Act (25 U.S.C. 1603).
          (18) MEDICAID.—
             The term “Medicaid” means a State plan under title XIX of the Social Security Act (whether or not the plan is operating under a waiver under section 1115 of such Act).
          (19) MEDICAID ELIGIBLE INDIVIDUAL.—
             The term “Medicaid eligible individual” means an individual who is eligible for medical assistance under Medicaid.
          (20) MEDICARE.—
             The term “Medicare” means the health insurance programs under title XVIII of the Social Security Act.
          (21) PLAN SPONSOR.—
             The term “plan sponsor” has the meaning given such term in section 3(16)(B) of the Employee Retirement Income Security Act of 1974.
          (22) PLAN YEAR.—
             The term “plan year” means—
                (A) with respect to an employment-based health plan, a plan year as specified under such plan; or
                (B) with respect to a health benefits plan other than an employment-based health plan, a 12-month period as specified by the Commissioner.
          (23) PREMIUM PLAN; PREMIUM-PLUS PLAN.—
             The terms “premium plan” and “premium-plus plan” have the meanings given such terms in section 303(c).
          (24) QHBP OFFERING ENTITY.—
             The terms “QHBP offering entity” means, with respect to a health benefits plan that is—
                (A) a group health plan (as defined, subject to subsection (d), in section 733(a)(1) of the Employee Retirement Income Security Act of 1974), the plan sponsor in relation to such group health plan, except that, in the case of a plan maintained jointly by 1 or more employers and 1 or more employee organizations and with respect to which an employer is the primary source of financing, such term means such employer;
                (B) health insurance coverage, the health insurance issuer offering the coverage;
                (C) the public health insurance option, the Secretary of Health and Human Services;
                (D) a non-Federal governmental plan (as defined in section 2791(d) of the Public Health Service Act), the State or political subdivision of a State (or agency or instrumentality of such State or subdivision) which establishes or maintains such plan; or
                (E) a Federal governmental plan (as defined in section 2791(d) of the Public Health Service Act), the appropriate Federal official.
          (25) QUALIFIED HEALTH BENEFITS PLAN.—
             The term “qualified health benefits plan” means a health benefits plan that—
                (A) meets the requirements for such a plan under title II and includes the public health insurance option; and
                (B) is offered by a QHBP offering entity that meets the applicable requirements of such title with respect to such plan.
          (26) PUBLIC HEALTH INSURANCE OPTION.—
             The term “public health insurance option” means the public health insurance option as provided under subtitle B of title III.
          (27) SERVICE AREA; PREMIUM RATING AREA.—
             The terms “service area” and “premium rating area” mean with respect to health insurance coverage—
                (A) offered other than through the Health Insurance Exchange, such an area as established by the QHBP offering entity of such coverage in accordance with applicable State law; and
                (B) offered through the Health Insurance Exchange, such an area as established by such entity in accordance with applicable State law and applicable rules of the Commissioner for Exchange-participating health benefits plans.
          (28) STATE.—
             The term “State” means the 50 States and the District of Columbia and includes—
                (A) for purposes of title I, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands; and
                (B) for purposes of titles II and III, as elected under and subject to section 346, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.
          (29) STATE MEDICAID AGENCY.—
             The term “State Medicaid agency” means, with respect to a Medicaid plan, the single State agency responsible for administering such plan under title XIX of the Social Security Act.
          (30) Y1, Y2, ETC.—
             The terms “Y1”, “Y2”, “Y3”, “Y4”, “Y5”, and similar subsequently numbered terms, mean 2013 and subsequent years, respectively.