```

[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 364 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 364

 To repeal the Patient Protection and Affordable Care Act and to take 
  meaningful steps to lower health care costs and increase access to 
   health insurance coverage without raising taxes, cutting Medicare 
 benefits for seniors, adding to the national deficit, intervening in 
 the doctor-patient relationship, or instituting a government takeover 
                            of health care.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 20, 2011

  Mr. Latham introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
   Education and the Workforce, Ways and Means, the Judiciary, House 
  Administration, Natural Resources, Rules, and Appropriations, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL

 
 To repeal the Patient Protection and Affordable Care Act and to take 
  meaningful steps to lower health care costs and increase access to 
   health insurance coverage without raising taxes, cutting Medicare 
 benefits for seniors, adding to the national deficit, intervening in 
 the doctor-patient relationship, or instituting a government takeover 
                            of health care.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; PURPOSE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Common Sense 
Health Reform Americans Actually Want Act''.
    (b) Purpose.--The purpose of this Act is to take meaningful steps 
to lower health care costs and increase access to health insurance 
coverage (especially for individuals with preexisting conditions) 
without--
            (1) raising taxes;
            (2) cutting Medicare benefits for seniors;
            (3) adding to the national deficit;
            (4) intervening in the doctor-patient relationship; or
            (5) instituting a government takeover of health care.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; purpose; table of contents.
Sec. 2. Repeal of the Patient Protection and Affordable Care Act and 
                            the Health Care and Education 
                            Reconciliation Act of 2010.
    DIVISION A--ENSURING COVERAGE FOR INDIVIDUALS WITH PREEXISTING 
               CONDITIONS AND MULTIPLE HEALTH CARE NEEDS

Sec. 101. Establish universal access programs to improve high risk 
                            pools and reinsurance markets.
Sec. 102. No annual or lifetime spending caps.
Sec. 103. Preventing unjust cancellation of insurance coverage.
 DIVISION B--REDUCING HEALTH CARE PREMIUMS AND THE NUMBER OF UNINSURED 
                               AMERICANS

   TITLE I--EXPANDING ACCESS AND LOWERING COSTS FOR SMALL BUSINESSES

                 Subtitle A--Enhanced Marketplace Pools

Sec. 201. Rules governing enhanced marketplace pools.
Sec. 202. Cooperation between Federal and State authorities.
Sec. 203. Effective date and transitional and other rules.
                       Subtitle B--Market Relief

Sec. 204. Market relief.
              TITLE II--TARGETED EFFORTS TO EXPAND ACCESS

Sec. 211. Extending coverage of dependents.
Sec. 212. Prohibiting preexisting condition exclusions for enrollees 
                            under age 19.
Sec. 213. Health plan finders.
 TITLE III--EXPANDING CHOICES BY ALLOWING AMERICANS TO BUY HEALTH CARE 
                      COVERAGE ACROSS STATE LINES

Sec. 221. Interstate purchasing of health insurance.
              TITLE IV--IMPROVING HEALTH SAVINGS ACCOUNTS

Sec. 231. HSA funds for premiums for high deductible health plans.
Sec. 232. Requiring greater coordination between HDHP administrators 
                            and HSA account administrators so that 
                            enrollees can enroll in both at the same 
                            time.
Sec. 233. Special rule for certain medical expenses incurred before 
                            establishment of account.
                 TITLE V--TAX-RELATED HEALTH INCENTIVES

Sec. 241. SECA tax deduction for health insurance costs.
Sec. 242. Deduction for qualified health insurance costs of 
                            individuals.
           DIVISION C--ENACTING REAL MEDICAL LIABILITY REFORM

Sec. 301. Cap on non-economic damages against health care 
                            practitioners.
Sec. 302. Cap on non-economic damages against health care institutions.
Sec. 303. Cap, in wrongful death cases, on total damages against any 
                            single health care practitioner.
Sec. 304. Limitation of insurer liability when insurer rejects certain 
                            settlement offers.
Sec. 305. Mandatory jury instruction on cap on damages.
Sec. 306. Determination of negligence; mandatory jury instruction.
Sec. 307. Expert reports required to be served in civil actions.
Sec. 308. Expert opinions relating to physicians may be provided only 
                            by actively practicing physicians.
Sec. 309. Payment of future damages on periodic or accrual basis.
Sec. 310. Unanimous jury required for punitive or exemplary damages.
Sec. 311. Proportionate liability.
Sec. 312. Defense-initiated settlement process.
Sec. 313. Statute of limitations; statute of repose.
Sec. 314. Limitation on liability for Good Samaritans providing 
                            emergency health care.
Sec. 315. Definitions.
         DIVISION D--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

Sec. 401. Rule of construction.
Sec. 402. Repeal of Federal Coordinating Council for Comparative 
                            Effectiveness Research.
      DIVISION E--INCENTIVIZING WELLNESS AND QUALITY IMPROVEMENTS

Sec. 501. Incentives for prevention and wellness programs.
                    DIVISION F--PROTECTING TAXPAYERS

Sec. 601. Permanently prohibiting taxpayer funded abortions and 
                            ensuring conscience protections.
Sec. 602. Improved enforcement of the Medicare and Medicaid secondary 
                            payer provisions.
Sec. 603. Strengthen Medicare provider enrollment standards and 
                            safeguards.
Sec. 604. Tracking banned providers across State lines.

SEC. 2. REPEAL OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT AND 
              THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010.

    (a) Patient Protection and Affordable Care Act.--The Patient 
Protection and Affordable Care Act (Public Law 111-148) is repealed and 
the provisions of law amended or repealed by such Act are restored or 
revived as if such Act had not been enacted.
    (b) Health Care and Education Reconciliation Act of 2010.--The 
Health Care and Education Reconciliation Act of 2010 (Public Law 111-
152) is repealed and the provisions of law amended or repealed by such 
Act are restored or revived as if such Act had not been enacted.

    DIVISION A--ENSURING COVERAGE FOR INDIVIDUALS WITH PREEXISTING 
               CONDITIONS AND MULTIPLE HEALTH CARE NEEDS

SEC. 101. ESTABLISH UNIVERSAL ACCESS PROGRAMS TO IMPROVE HIGH RISK 
              POOLS AND REINSURANCE MARKETS.

    (a) State Requirement.--
            (1) In general.--Not later than 90 days after the date of 
        the enactment of this Act, each State shall--
                    (A) subject to paragraph (3), operate a qualifying 
                State high risk pool described in subsection (b)(1); 
                and
                    (B) subject to paragraph (3), apply to the 
                operation of such a program from State funds an amount 
                equivalent to the portion of State funds derived from 
                State premium assessments (as defined by the Secretary) 
                that are not otherwise used on State health care 
                programs.
            (2) Relation to current qualified high risk pool program.--
                    (A) States not operating a qualified high risk 
                pool.--In the case of a State that is not operating a 
                current section 2745 qualified high risk pool as of the 
                date of the enactment of this Act, the State's 
                operation of a qualifying State high risk pool 
                described in subsection (b)(1) shall be treated, for 
                purposes of section 2745 of the Public Health Service 
                Act, as the operation of a qualified high risk pool 
                described in such section.
                    (B) State operating a qualified high risk pool.--In 
                the case of a State that is operating a current section 
                2745 qualified high risk pool as of the date of the 
                enactment of this Act, as of the date that is 90 days 
                after the date of the enactment of this Act, such a 
                pool shall not be treated as a qualified high risk pool 
                under section 2745 of the Public Health Service Act 
                unless the pool is a qualifying State high risk pool 
                described in subsection (b)(1).
            (3) Application of funds.--If the pool operated under 
        paragraph (1)(A) is in strong fiscal health, as determined in 
        accordance with standards established by the National 
        Association of Insurance Commissioners and as approved by the 
        State Insurance Commissioner involved, the requirement of 
        paragraph (1)(B) shall be deemed to be met.
    (b) Qualifying State High Risk Pool.--
            (1) In general.--A qualifying State high risk pool 
        described in this subsection means a current section 2745 
        qualified high risk pool that meets the following requirements:
                    (A) The pool must be funded with a stable funding 
                source.
                    (B) The pool must eliminate any waiting lists so 
                that all eligible residents who are seeking coverage 
                through the pool should be allowed to receive coverage 
                through the pool.
                    (C) The pool must allow for coverage of individuals 
                who, but for the 24-month disability waiting period 
                under section 226(b) of the Social Security Act, would 
                be eligible for Medicare during the period of such 
                waiting period.
                    (D) The pool must limit the pool premiums to no 
                more than 150 percent of the average premium for 
                applicable standard risk rates in that State.
                    (E) The pool must conduct education and outreach 
                initiatives so that residents and brokers understand 
                that the pool is available to eligible residents.
                    (F) The pool must provide coverage for preventive 
                services and disease management for chronic diseases.
                    (G) Subject to subparagraph (C), an individual may 
                only be eligible for coverage through the pool if the 
                individual has a pre-existing condition, as determined 
                in a manner consistent with guidance ussed by the 
                Secretary of Health and Human Services and--
                            (i) was denied health insurance coverage in 
                        the individual market because of a pre-existing 
                        condition or health status; or
                            (ii) was offered such coverage--
                                    (I) under terms that limit the 
                                coverage for such a pre-existing 
                                condition; or
                                    (II) at a premium rate that is 
                                above the premium rate for coverage 
                                through the pool pursuant to this 
                                section.
                    (H) No pre-existing condition exclusion period may 
                be imposed on coverage through the pool.
                    (I) The pool shall not require an individual to be 
                uninsured for any period as a condition of eligibility 
                to receive coverage through the pool.
            (2) Verification of citizenship or alien qualification.--
                    (A) In general.--Notwithstanding any other 
                provision of law, only citizens and nationals of the 
                United States shall be eligible to participate in a 
                qualifying State high risk pool that receives funds 
                under section 2745 of the Public Health Service Act or 
                this section.
                    (B) Condition of participation.--As a condition of 
                a State receiving such funds, the Secretary shall 
                require the State to certify, to the satisfaction of 
                the Secretary, that such State requires all applicants 
                for coverage in the qualifying State high risk pool to 
                provide satisfactory documentation of citizenship or 
                nationality in a manner consistent with section 1903(x) 
                of the Social Security Act.
                    (C) Records.--The Secretary shall keep sufficient 
                records such that a determination of citizenship or 
                nationality only has to be made once for any individual 
                under this paragraph.
            (3) Relation to section 2745.--As of January 1, 2012, a 
        pool shall not qualify as qualified high risk pool under 
        section 2745 of the Public Health Service Act unless the pool 
        is a qualifying State high risk pool described in paragraph 
        (1).
    (c) Waivers.--In order to accommodate new and innovative programs, 
the Secretary may waive such requirements of this section for 
qualifying State high risk pools as the Secretary deems appropriate.
    (d) Funding.--In addition to any other amounts appropriated, there 
is appropriated to carry out section 2745 of the Public Health Service 
Act (including through a pool described in subsection (a)(1))--
            (1) $15,000,000,000 for the period of fiscal years 2011 
        through 2021; and
            (2) an additional $10,000,000,000 for the period of fiscal 
        years 2017 through 2021.
    (e) Definitions.--In this section:
            (1) Health insurance coverage; health insurance issuer.--
        The terms ``health insurance coverage'' and ``health insurance 
        issuer'' have the meanings given such terms in section 2791 of 
        the Public Health Service Act.
            (2) Current section 2745 qualified high risk pool.--The 
        term ``current section 2745 qualified high risk pool'' has the 
        meaning given the term ``qualified high risk pool'' under 
        section 2745(g) of the Public Health Service Act as in effect 
        as of the date of the enactment of this Act.
            (3) Secretary.--The term ``Secretary'' means Secretary of 
        Health and Human Services.
            (4) Standard risk rate.--The term ``standard risk rate'' 
        means a rate that--
                    (A) is determined under the State high risk pool by 
                considering the premium rates charged by other health 
                insurance issuers offering health insurance coverage to 
                individuals in the insurance market served;
                    (B) is established using reasonable actuarial 
                techniques; and
                    (C) reflects anticipated claims experience and 
                expenses for the coverage involved.
            (5) State.--The term ``State'' means any of the 50 States 
        or the District of Columbia.

SEC. 102. NO ANNUAL OR LIFETIME SPENDING CAPS.

    Notwithstanding any other provision of law, a health insurance 
issuer (including an entity licensed to sell insurance with respect to 
a State or group health plan) may not apply an annual or lifetime 
aggregate spending cap on any health insurance coverage or plan offered 
by such issuer.

SEC. 103. PREVENTING UNJUST CANCELLATION OF INSURANCE COVERAGE.

    (a) Clarification Regarding Application of Guaranteed Renewability 
of Individual Health Insurance Coverage.--Section 2742 of the Public 
Health Service Act (42 U.S.C. 300gg-42), as restored by section 2, is 
amended--
            (1) in its heading, by inserting ``, continuation in force, 
        including prohibition of rescission,'' after ``guaranteed 
        renewability'';
            (2) in subsection (a), by inserting ``, including without 
        rescission,'' after ``continue in force''; and
            (3) in subsection (b)(2), by inserting before the period at 
        the end the following: ``, including intentional concealment of 
        material facts regarding a health condition related to the 
        condition for which coverage is being claimed''.
    (b) Opportunity for Independent, External Third Party Review in 
Certain Cases.--Subpart 1 of part B of title XXVII of the Public Health 
Service Act, as restored by section 2, is amended by adding at the end 
the following new section:

``SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEW 
              IN CERTAIN CASES.

    ``(a) Notice and Review Right.--If a health insurance issuer 
determines to nonrenew or not continue in force, including rescind, 
health insurance coverage for an individual in the individual market on 
the basis described in section 2742(b)(2) before such nonrenewal, 
discontinuation, or rescission, may take effect the issuer shall 
provide the individual with notice of such proposed nonrenewal, 
discontinuation, or rescission and an opportunity for a review of such 
determination by an independent, external third party under procedures 
specified by the Secretary.
    ``(b) Independent Determination.--If the individual requests such 
review by an independent, external third party of a nonrenewal, 
discontinuation, or rescission of health insurance coverage, the 
coverage shall remain in effect until such third party determines that 
the coverage may be nonrenewed, discontinued, or rescinded under 
section 2742(b)(2).''.
    (c) Effective Date.--The amendments made by this section shall 
apply after the date of the enactment of this Act with respect to 
health insurance coverage issued before, on, or after such date.

 DIVISION B--REDUCING HEALTH CARE PREMIUMS AND THE NUMBER OF UNINSURED 
                               AMERICANS

   TITLE I--EXPANDING ACCESS AND LOWERING COSTS FOR SMALL BUSINESSES

                 Subtitle A--Enhanced Marketplace Pools

SEC. 201. RULES GOVERNING ENHANCED MARKETPLACE POOLS.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974, as restored by section 2, is amended by 
adding after part 7 the following new part:

          ``PART 8--RULES GOVERNING ENHANCED MARKETPLACE POOLS

``SEC. 801. SMALL BUSINESS HEALTH PLANS.

    ``(a) In General.--For purposes of this part, the term `small 
business health plan' means a fully insured group health plan whose 
sponsor is (or is deemed under this part to be) described in subsection 
(b).
    ``(b) Sponsorship.--The sponsor of a group health plan is described 
in this subsection if such sponsor--
            ``(1) is organized and maintained in good faith, with a 
        constitution and bylaws specifically stating its purpose and 
        providing for periodic meetings on at least an annual basis, as 
        a bona fide trade association, a bona fide industry association 
        (including a rural electric cooperative association or a rural 
        telephone cooperative association), a bona fide professional 
        association, or a bona fide chamber of commerce (or similar 
        bona fide business association, including a corporation or 
        similar organization that operates on a cooperative basis 
        (within the meaning of section 1381 of the Internal Revenue 
        Code of 1986)), for substantial purposes other than that of 
        obtaining medical care;
            ``(2) is established as a permanent entity which receives 
        the active support of its members and requires for membership 
        payment on a periodic basis of dues or payments necessary to 
        maintain eligibility for membership;
            ``(3) does not condition membership, such dues or payments, 
        or coverage under the plan on the basis of health status-
        related factors with respect to the employees of its members 
        (or affiliated members), or the dependents of such employees, 
        and does not condition such dues or payments on the basis of 
        group health plan participation; and
            ``(4) does not condition membership on the basis of a 
        minimum group size.
Any sponsor consisting of an association of entities which meet the 
requirements of paragraphs (1), (2), (3), and (4) shall be deemed to be 
a sponsor described in this subsection.

``SEC. 802. ALTERNATIVE MARKET POOLING ORGANIZATIONS.

    ``(a) In General.--The Secretary, not later than 1 year after the 
date of enactment of this part, shall promulgate regulations that apply 
the rules and standards of this part, as necessary, to circumstances in 
which a pooling entity other (hereinafter `Alternative Market Pooling 
Organizations') is not made up principally of employers and their 
employees, or not a professional organization or such small business 
health plan entity identified in section 801.
    ``(b) Adaption of Standards.--In developing and promulgating 
regulations pursuant to subsection (a), the Secretary, in consultation 
with the Secretary of Health and Human Services, small business health 
plans, small and large employers, large and small insurance issuers, 
consumer representatives, and State insurance commissioners, shall--
            ``(1) adapt the standards of this part, to the maximum 
        degree practicable, to assure balanced and comparable oversight 
        standards for both small business health plans and alternative 
        market pooling organizations;
            ``(2) permit the participation as alternative market 
        pooling organizations unions, churches and other faith-based 
        organizations, or other organizations composed of individuals 
        and groups which may have little or no association with 
        employment, provided however, that such alternative market 
        pooling organizations meet, and continue meeting on an ongoing 
        basis, to satisfy standards, rules, and requirements materially 
        equivalent to those set forth in this part with respect to 
        small business health plans;
            ``(3) conduct periodic verification of such compliance by 
        alternative market pooling organizations, in consultation with 
        the Secretary of Health and Human Services and the National 
        Association of Insurance Commissioners, except that such 
        periodic verification shall not materially impede market entry 
        or participation as pooling entities comparable to that of 
        small business health plans;
            ``(4) assure that consistent, clear, and regularly 
        monitored standards are applied with respect to alternative 
        market pooling organizations to avert material risk-selection 
        within or among the composition of such organizations;
            ``(5) the expedited and deemed certification procedures 
        provided in section 805(d) shall not apply to alternative 
        market pooling organizations until sooner of the promulgation 
        of regulations under this subsection or the expiration of one 
        year following enactment of this Act; and
            ``(6) make such other appropriate adjustments to the 
        requirements of this part as the Secretary may reasonably deem 
        appropriate to fit the circumstances of an individual 
        alternative market pooling organization or category of such 
        organization, including but not limited to the application of 
        the membership payment requirements of section 801(b)(2) to 
        alternative market pooling organizations composed primarily of 
        church- or faith-based membership.

``SEC. 803. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.

    ``(a) In General.--Not later than 6 months after the date of 
enactment of this part, the applicable authority shall prescribe by 
interim final rule a procedure under which the applicable authority 
shall certify small business health plans which apply for certification 
as meeting the requirements of this part.
    ``(b) Requirements Applicable to Certified Plans.--A small business 
health plan with respect to which certification under this part is in 
effect shall meet the applicable requirements of this part, effective 
on the date of certification (or, if later, on the date on which the 
plan is to commence operations).
    ``(c) Requirements for Continued Certification.--The applicable 
authority may provide by regulation for continued certification of 
small business health plans under this part. Such regulation shall 
provide for the revocation of a certification if the applicable 
authority finds that the small business health plan involved is failing 
to comply with the requirements of this part.
    ``(d) Expedited and Deemed Certification.--
            ``(1) In general.--If the Secretary fails to act on an 
        application for certification under this section within 90 days 
        of receipt of such application, the applying small business 
        health plan shall be deemed certified until such time as the 
        Secretary may deny for cause the application for certification.
            ``(2) Civil penalty.--The Secretary may assess a civil 
        penalty against the board of trustees and plan sponsor (jointly 
        and severally) of a small business health plan that is deemed 
        certified under paragraph (1) of up to $500,000 in the event 
        the Secretary determines that the application for certification 
        of such small business health plan was willfully or with gross 
        negligence incomplete or inaccurate.

``SEC. 804. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.

    ``(a) Sponsor.--The requirements of this subsection are met with 
respect to a small business health plan if the sponsor has met (or is 
deemed under this part to have met) the requirements of section 801(b) 
for a continuous period of not less than 3 years ending with the date 
of the application for certification under this part.
    ``(b) Board of Trustees.--The requirements of this subsection are 
met with respect to a small business health plan if the following 
requirements are met:
            ``(1) Fiscal control.--The plan is operated, pursuant to a 
        plan document, by a board of trustees which pursuant to a trust 
        agreement has complete fiscal control over the plan and which 
        is responsible for all operations of the plan.
            ``(2) Rules of operation and financial controls.--The board 
        of trustees has in effect rules of operation and financial 
        controls, based on a 3-year plan of operation, adequate to 
        carry out the terms of the plan and to meet all requirements of 
        this title applicable to the plan.
            ``(3) Rules governing relationship to participating 
        employers and to contractors.--
                    ``(A) Board membership.--
                            ``(i) In general.--Except as provided in 
                        clauses (ii) and (iii), the members of the 
                        board of trustees are individuals selected from 
                        individuals who are the owners, officers, 
                        directors, or employees of the participating 
                        employers or who are partners in the 
                        participating employers and actively 
                        participate in the business.
                            ``(ii) Limitation.--
                                    ``(I) General rule.--Except as 
                                provided in subclauses (II) and (III), 
                                no such member is an owner, officer, 
                                director, or employee of, or partner 
                                in, a contract administrator or other 
                                service provider to the plan.
                                    ``(II) Limited exception for 
                                providers of services solely on behalf 
                                of the sponsor.--Officers or employees 
                                of a sponsor which is a service 
                                provider (other than a contract 
                                administrator) to the plan may be 
                                members of the board if they constitute 
                                not more than 25 percent of the 
                                membership of the board and they do not 
                                provide services to the plan other than 
                                on behalf of the sponsor.
                                    ``(III) Treatment of providers of 
                                medical care.--In the case of a sponsor 
                                which is an association whose 
                                membership consists primarily of 
                                providers of medical care, subclause 
                                (I) shall not apply in the case of any 
                                service provider described in subclause 
                                (I) who is a provider of medical care 
                                under the plan.
                            ``(iii) Certain plans excluded.--Clause (i) 
                        shall not apply to a small business health plan 
                        which is in existence on the date of the 
                        enactment of this part.
                    ``(B) Sole authority.--The board has sole authority 
                under the plan to approve applications for 
                participation in the plan and to contract with 
                insurers.
    ``(c) Treatment of Franchises.--In the case of a group health plan 
which is established and maintained by a franchiser for a franchisor or 
for its franchisees--
            ``(1) the requirements of subsection (a) and section 801(a) 
        shall be deemed met if such requirements would otherwise be met 
        if the franchisor were deemed to be the sponsor referred to in 
        section 801(b) and each franchisee were deemed to be a member 
        (of the sponsor) referred to in section 801(b); and
            ``(2) the requirements of section 804(a)(1) shall be deemed 
        met.
For purposes of this subsection the terms `franchisor' and `franchisee' 
shall have the meanings given such terms for purposes of sections 
436.2(a) through 436.2(c) of title 16, Code of Federal Regulations 
(including any such amendments to such regulation after the date of 
enactment of this part).

``SEC. 805. PARTICIPATION AND COVERAGE REQUIREMENTS.

    ``(a) Covered Employers and Individuals.--The requirements of this 
subsection are met with respect to a small business health plan if, 
under the terms of the plan--
            ``(1) each participating employer must be--
                    ``(A) a member of the sponsor;
                    ``(B) the sponsor; or
                    ``(C) an affiliated member of the sponsor, except 
                that, in the case of a sponsor which is a professional 
                association or other individual-based association, if 
                at least one of the officers, directors, or employees 
                of an employer, or at least one of the individuals who 
                are partners in an employer and who actively 
                participates in the business, is a member or such an 
                affiliated member of the sponsor, participating 
                employers may also include such employer; and
            ``(2) all individuals commencing coverage under the plan 
        after certification under this part must be--
                    ``(A) active or retired owners (including self-
                employed individuals), officers, directors, or 
                employees of, or partners in, participating employers; 
                or
                    ``(B) the dependents of individuals described in 
                subparagraph (A).
    ``(b) Individual Market Unaffected.--The requirements of this 
subsection are met with respect to a small business health plan if, 
under the terms of the plan, no participating employer may provide 
health insurance coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer under the plan, 
if such exclusion of the employee from coverage under the plan is based 
on a health status-related factor with respect to the employee and such 
employee would, but for such exclusion on such basis, be eligible for 
coverage under the plan.
    ``(c) Prohibition of Discrimination Against Employers and Employees 
Eligible To Participate.--The requirements of this subsection are met 
with respect to a small business health plan if--
            ``(1) under the terms of the plan, all employers meeting 
        the preceding requirements of this section are eligible to 
        qualify as participating employers for all geographically 
        available coverage options, unless, in the case of any such 
        employer, participation or contribution requirements of the 
        type referred to in section 2711 of the Public Health Service 
        Act are not met;
            ``(2) information regarding all coverage options available 
        under the plan is made readily available to any employer 
        eligible to participate; and
            ``(3) the applicable requirements of sections 701, 702, and 
        703 are met with respect to the plan.

``SEC. 806. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION 
              RATES, AND BENEFIT OPTIONS.

    ``(a) In General.--The requirements of this section are met with 
respect to a small business health plan if the following requirements 
are met:
            ``(1) Contents of governing instruments.--
                    ``(A) In general.--The instruments governing the 
                plan include a written instrument, meeting the 
                requirements of an instrument required under section 
                402(a)(1), which--
                            ``(i) provides that the board of trustees 
                        serves as the named fiduciary required for 
                        plans under section 402(a)(1) and serves in the 
                        capacity of a plan administrator (referred to 
                        in section 3(16)(A)); and
                            ``(ii) provides that the sponsor of the 
                        plan is to serve as plan sponsor (referred to 
                        in section 3(16)(B)).
                    ``(B) Description of material provisions.--The 
                terms of the health insurance coverage (including the 
                terms of any individual certificates that may be 
                offered to individuals in connection with such 
                coverage) describe the material benefit and rating, and 
                other provisions set forth in this section and such 
                material provisions are included in the summary plan 
                description.
            ``(2) Contribution rates must be nondiscriminatory.--
                    ``(A) In general.--The contribution rates for any 
                participating small employer shall not vary on the 
                basis of any health status-related factor in relation 
                to employees of such employer or their beneficiaries 
                and shall not vary on the basis of the type of business 
                or industry in which such employer is engaged, subject 
                to subparagraph (B) and the terms of this title.
                    ``(B) Effect of title.--Nothing in this title or 
                any other provision of law shall be construed to 
                preclude a health insurance issuer offering health 
                insurance coverage in connection with a small business 
                health plan that meets the requirements of this part, 
                and at the request of such small business health plan, 
                from--
                            ``(i) setting contribution rates for the 
                        small business health plan based on the claims 
                        experience of the small business health plan so 
                        long as any variation in such rates for 
                        participating small employers complies with the 
                        requirements of clause (ii), except that small 
                        business health plans shall not be subject, in 
                        non-adopting States, to subparagraphs (A)(ii) 
                        and (C) of section 2912(a)(2) of the Public 
                        Health Service Act, and in adopting States, to 
                        any State law that would have the effect of 
                        imposing requirements as outlined in such 
                        subparagraphs (A)(ii) and (C); or
                            ``(ii) varying contribution rates for 
                        participating small employers in a small 
                        business health plan in a State to the extent 
                        that such rates could vary using the same 
                        methodology employed in such State for 
                        regulating small group premium rates, subject 
                        to the terms of part I of subtitle A of title 
                        XXXI of the Public Health Service Act (relating 
                        to rating requirements), as added by subtitle B 
                        of title II of the Health Security for All 
                        Americans Act of 2010.
            ``(3) Exceptions regarding self-employed and large 
        employers.--
                    ``(A) Self-employed.--
                            ``(i) In general.--Small business health 
                        plans with participating employers who are 
                        self-employed individuals (and their 
                        dependents) shall enroll such self-employed 
                        participating employers in accordance with 
                        rating rules that do not violate the rating 
                        rules for self-employed individuals in the 
                        State in which such self-employed participating 
                        employers are located.
                            ``(ii) Guarantee issue.--Small business 
                        health plans with participating employers who 
                        are self-employed individuals (and their 
                        dependents) may decline to guarantee issue to 
                        such participating employers in States in which 
                        guarantee issue is not otherwise required for 
                        the self-employed in that State.
                    ``(B) Large employers.--Small business health plans 
                with participating employers that are larger than small 
                employers (as defined in section 808(a)(10)) shall 
                enroll such large participating employers in accordance 
                with rating rules that do not violate the rating rules 
                for large employers in the State in which such large 
                participating employers are located.
            ``(4) Regulatory requirements.--Such other requirements as 
        the applicable authority determines are necessary to carry out 
        the purposes of this part, which shall be prescribed by the 
        applicable authority by regulation.
    ``(b) Ability of Small Business Health Plans To Design Benefit 
Options.--Nothing in this part or any provision of State law (as 
defined in section 514(c)(1)) shall be construed to preclude a small 
business health plan or a health insurance issuer offering health 
insurance coverage in connection with a small business health plan from 
exercising its sole discretion in selecting the specific benefits and 
services consisting of medical care to be included as benefits under 
such plan or coverage, except that such benefits and services must meet 
the terms and specifications of part II of subtitle A of title XXXI of 
the Public Health Service Act (relating to lower cost plans), as added 
by subtitle B of title II of the Health Security for All Americans Act 
of 2010.
    ``(c) Domicile and Non-domicile States.--
            ``(1) Domicile state.--Coverage shall be issued to a small 
        business health plan in the State in which the sponsor's 
        principal place of business is located.
            ``(2) Non-domicile states.--With respect to a State (other 
        than the domicile State) in which participating employers of a 
        small business health plan are located but in which the insurer 
        of the small business health plan in the domicile State is not 
        yet licensed, the following shall apply:
                    ``(A) Temporary preemption.--If, upon the 
                expiration of the 90-day period following the 
                submission of a licensure application by such insurer 
                (that includes a certified copy of an approved 
                licensure application as submitted by such insurer in 
                the domicile State) to such State, such State has not 
                approved or denied such application, such State's 
                health insurance licensure laws shall be temporarily 
                preempted and the insurer shall be permitted to operate 
                in such State, subject to the following terms:
                            ``(i) Application of non-domicile state 
                        law.--Except with respect to licensure and with 
                        respect to the terms of subtitle A of title 
                        XXXI of the Public Health Service Act (relating 
                        to rating and benefits as added by subtitle B 
                        of title II of the Health Security for All 
                        Americans Act of 2010), the laws and authority 
                        of the non-domicile State shall remain in full 
                        force and effect.
                            ``(ii) Revocation of preemption.--The 
                        preemption of a non-domicile State's health 
                        insurance licensure laws pursuant to this 
                        subparagraph, shall be terminated upon the 
                        occurrence of either of the following:
                                    ``(I) Approval or denial of 
                                application.--The approval of denial of 
                                an insurer's licensure application, 
                                following the laws and regulations of 
                                the non-domicile State with respect to 
                                licensure.
                                    ``(II) Determination of material 
                                violation.--A determination by a non-
                                domicile State that an insurer 
                                operating in a non-domicile State 
                                pursuant to the preemption provided for 
                                in this subparagraph is in material 
                                violation of the insurance laws (other 
                                than licensure and with respect to the 
                                terms of subtitle A of title XXXI of 
                                the Public Health Service Act (relating 
                                to rating and benefits added by 
                                subtitle B of title II of the Health 
                                Security for All Americans Act of 
                                2010)) of such State.
                    ``(B) No prohibition on promotion.--Nothing in this 
                paragraph shall be construed to prohibit a small 
                business health plan or an insurer from promoting 
                coverage prior to the expiration of the 90-day period 
                provided for in subparagraph (A), except that no 
                enrollment or collection of contributions shall occur 
                before the expiration of such 90-day period.
                    ``(C) Licensure.--Except with respect to the 
                application of the temporary preemption provision of 
                this paragraph, nothing in this part shall be construed 
                to limit the requirement that insurers issuing coverage 
                to small business health plans shall be licensed in 
                each State in which the small business health plans 
                operate.
                    ``(D) Servicing by licensed insurers.--
                Notwithstanding subparagraph (C), the requirements of 
                this subsection may also be satisfied if the 
                participating employers of a small business health plan 
                are serviced by a licensed insurer in that State, even 
                where such insurer is not the insurer of such small 
                business health plan in the State in which such small 
                business health plan is domiciled.

``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.

    ``(a) Filing Fee.--Under the procedure prescribed pursuant to 
section 802(a), a small business health plan shall pay to the 
applicable authority at the time of filing an application for 
certification under this part a filing fee in the amount of $5,000, 
which shall be available in the case of the Secretary, to the extent 
provided in appropriation Acts, for the sole purpose of administering 
the certification procedures applicable with respect to small business 
health plans.
    ``(b) Information To Be Included in Application for 
Certification.--An application for certification under this part meets 
the requirements of this section only if it includes, in a manner and 
form which shall be prescribed by the applicable authority by 
regulation, at least the following information:
            ``(1) Identifying information.--The names and addresses 
        of--
                    ``(A) the sponsor; and
                    ``(B) the members of the board of trustees of the 
                plan.
            ``(2) States in which plan intends to do business.--The 
        States in which participants and beneficiaries under the plan 
        are to be located and the number of them expected to be located 
        in each such State.
            ``(3) Bonding requirements.--Evidence provided by the board 
        of trustees that the bonding requirements of section 412 will 
        be met as of the date of the application or (if later) 
        commencement of operations.
            ``(4) Plan documents.--A copy of the documents governing 
        the plan (including any bylaws and trust agreements), the 
        summary plan description, and other material describing the 
        benefits that will be provided to participants and 
        beneficiaries under the plan.
            ``(5) Agreements with service providers.--A copy of any 
        agreements between the plan, health insurance issuer, and 
        contract administrators and other service providers.
    ``(c) Filing Notice of Certification With States.--A certification 
granted under this part to a small business health plan shall not be 
effective unless written notice of such certification is filed with the 
applicable State authority of each State in which the small business 
health plans operate.
    ``(d) Notice of Material Changes.--In the case of any small 
business health plan certified under this part, descriptions of 
material changes in any information which was required to be submitted 
with the application for the certification under this part shall be 
filed in such form and manner as shall be prescribed by the applicable 
authority by regulation. The applicable authority may require by 
regulation prior notice of material changes with respect to specified 
matters which might serve as the basis for suspension or revocation of 
the certification.

``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

    ``A small business health plan which is or has been certified under 
this part may terminate (upon or at any time after cessation of 
accruals in benefit liabilities) only if the board of trustees, not 
less than 60 days before the proposed termination date--
            ``(1) provides to the participants and beneficiaries a 
        written notice of intent to terminate stating that such 
        termination is intended and the proposed termination date;
            ``(2) develops a plan for winding up the affairs of the 
        plan in connection with such termination in a manner which will 
        result in timely payment of all benefits for which the plan is 
        obligated; and
            ``(3) submits such plan in writing to the applicable 
        authority.
Actions required under this section shall be taken in such form and 
manner as may be prescribed by the applicable authority by regulation.

``SEC. 809. IMPLEMENTATION AND APPLICATION AUTHORITY BY SECRETARY.

    ``The Secretary shall, through promulgation and implementation of 
such regulations as the Secretary may reasonably determine necessary or 
appropriate, and in consultation with a balanced spectrum of effected 
entities and persons, modify the implementation and application of this 
part to accommodate with minimum disruption such changes to State or 
Federal law provided in this part and the (and the amendments made by 
such Act) or in regulations issued thereto.

``SEC. 810. DEFINITIONS AND RULES OF CONSTRUCTION.

    ``(a) Definitions.--For purposes of this part--
            ``(1) Affiliated member.--The term `affiliated member' 
        means, in connection with a sponsor--
                    ``(A) a person who is otherwise eligible to be a 
                member of the sponsor but who elects an affiliated 
                status with the sponsor, or
                    ``(B) in the case of a sponsor with members which 
                consist of associations, a person who is a member or 
                employee of any such association and elects an 
                affiliated status with the sponsor.
            ``(2) Applicable authority.--The term `applicable 
        authority' means the Secretary of Labor, except that, in 
        connection with any exercise of the Secretary's authority with 
        respect to which the Secretary is required under section 506(d) 
        to consult with a State, such term means the Secretary, in 
        consultation with such State.
            ``(3) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of title XXVII of the Public Health Service Act 
        for the State involved with respect to such issuer.
            ``(4) Group health plan.--The term `group health plan' has 
        the meaning provided in section 733(a)(1) (after applying 
        subsection (b) of this section).
            ``(5) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided in section 
        733(b)(1), except that such term shall not include excepted 
        benefits (as defined in section 733(c)).
            ``(6) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning provided in section 733(b)(2).
            ``(7) Individual market.--
                    ``(A) In general.--The term `individual market' 
                means the market for health insurance coverage offered 
                to individuals other than in connection with a group 
                health plan.
                    ``(B) Treatment of very small groups.--
                            ``(i) In general.--Subject to clause (ii), 
                        such term includes coverage offered in 
                        connection with a group health plan that has 
                        fewer than 2 participants as current employees 
                        or participants described in section 732(d)(3) 
                        on the first day of the plan year.
                            ``(ii) State exception.--Clause (i) shall 
                        not apply in the case of health insurance 
                        coverage offered in a State if such State 
                        regulates the coverage described in such clause 
                        in the same manner and to the same extent as 
                        coverage in the small group market (as defined 
                        in section 2791(e)(5) of the Public Health 
                        Service Act) is regulated by such State.
            ``(8) Medical care.--The term `medical care' has the 
        meaning provided in section 733(a)(2).
            ``(9) Participating employer.--The term `participating 
        employer' means, in connection with a small business health 
        plan, any employer, if any individual who is an employee of 
        such employer, a partner in such employer, or a self-employed 
        individual who is such employer (or any dependent, as defined 
        under the terms of the plan, of such individual) is or was 
        covered under such plan in connection with the status of such 
        individual as such an employee, partner, or self-employed 
        individual in relation to the plan.
            ``(10) Small employer.--The term `small employer' means, in 
        connection with a group health plan with respect to a plan 
        year, a small employer as defined in section 2791(e)(4).
            ``(11) Trade association and professional association.--The 
        terms `trade association' and `professional association' mean 
        an entity that meets the requirements of section 1.501(c)(6)-1 
        of title 26, Code of Federal Regulations (as in effect on the 
        date of enactment of this Act).
    ``(b) Rule of Construction.--For purposes of determining whether a 
plan, fund, or program is an employee welfare benefit plan which is a 
small business health plan, and for purposes of applying this title in 
connection with such plan, fund, or program so determined to be such an 
employee welfare benefit plan--
            ``(1) in the case of a partnership, the term `employer' (as 
        defined in section 3(5)) includes the partnership in relation 
        to the partners, and the term `employee' (as defined in section 
        3(6)) includes any partner in relation to the partnership; and
            ``(2) in the case of a self-employed individual, the term 
        `employer' (as defined in section 3(5)) and the term `employee' 
        (as defined in section 3(6)) shall include such individual.
    ``(c) Renewal.--Notwithstanding any provision of law to the 
contrary, a participating employer in a small business health plan 
shall not be deemed to be a plan sponsor in applying requirements 
relating to coverage renewal.
    ``(d) Health Savings Accounts.--Nothing in this part shall be 
construed to create any mandates for coverage of benefits for HSA-
qualified health plans that would require reimbursements in violation 
of section 223(c)(2) of the Internal Revenue Code of 1986.''.
    (b) Conforming Amendments to Preemption Rules.--
            (1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)), 
        as restored by section 2, is amended by adding at the end the 
        following new subparagraph:
    ``(E) The preceding subparagraphs of this paragraph do not apply 
with respect to any State law in the case of a small business health 
plan which is certified under part 8.''.
            (2) Section 514 of such Act (29 U.S.C. 1144), as restored 
        by section 2, is amended--
                    (A) in subsection (b)(4), by striking ``Subsection 
                (a)'' and inserting ``Subsections (a) and (d)'';
                    (B) in subsection (b)(5), by striking ``subsection 
                (a)'' in subparagraph (A) and inserting ``subsection 
                (a) of this section and subsections (a)(2)(B) and (b) 
                of section 805'', and by striking ``subsection (a)'' in 
                subparagraph (B) and inserting ``subsection (a) of this 
                section or subsection (a)(2)(B) or (b) of section 
                805'';
                    (C) by redesignating subsection (d) as subsection 
                (e); and
                    (D) by inserting after subsection (c) the following 
                new subsection:
    ``(d)(1) Except as provided in subsection (b)(4), the provisions of 
this title shall supersede any and all State laws insofar as they may 
now or hereafter preclude a health insurance issuer from offering 
health insurance coverage in connection with a small business health 
plan which is certified under part 8.
    ``(2) In any case in which health insurance coverage of any policy 
type is offered under a small business health plan certified under part 
8 to a participating employer operating in such State, the provisions 
of this title shall supersede any and all laws of such State insofar as 
they may establish rating and benefit requirements that would otherwise 
apply to such coverage, provided the requirements of subtitle A of 
title XXXI of the Public Health Service Act (as added by title II of 
the Health Security for All Americans Act of 2010) (concerning health 
plan rating and benefits) are met.''.
    (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
102(16)(B)), as restored by section 2, is amended by adding at the end 
the following new sentence: ``Such term also includes a person serving 
as the sponsor of a small business health plan under part 8.''.
    (d) Savings Clause.--Section 731(c) of such Act, as restored by 
section 2, is amended by inserting ``or part 8'' after ``this part''.
    (e) Clerical Amendment.--The table of contents in section 1 of the 
Employee Retirement Income Security Act of 1974, as restored by section 
2, is amended by inserting after the item relating to section 734 the 
following new items:

         ``Part 8--Rules Governing Small Business Health Plans

``801. Small business health plans.
``802. Alternative market pooling organizations.
``803. Certification of small business health plans.
``804. Requirements relating to sponsors and boards of trustees.
``805. Participation and coverage requirements.
``806. Other requirements relating to plan documents, contribution 
                            rates, and benefit options.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Implementation and application authority by Secretary.
``810. Definitions and rules of construction.''.

SEC. 202. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    Section 506 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1136), as restored by section 2, is amended by adding at the 
end the following new subsection:
    ``(d) Consultation With States With Respect to Small Business 
Health Plans.--
            ``(1) Agreements with states.--The Secretary shall consult 
        with the State recognized under paragraph (2) with respect to a 
        small business health plan regarding the exercise of--
                    ``(A) the Secretary's authority under sections 502 
                and 504 to enforce the requirements for certification 
                under part 8; and
                    ``(B) the Secretary's authority to certify small 
                business health plans under part 8 in accordance with 
                regulations of the Secretary applicable to 
                certification under part 8.
            ``(2) Recognition of domicile state.--In carrying out 
        paragraph (1), the Secretary shall ensure that only one State 
        will be recognized, with respect to any particular small 
        business health plan, as the State with which consultation is 
        required. In carrying out this paragraph such State shall be 
        the domicile State, as defined in section 805(c).''.

SEC. 203. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

    (a) Effective Date.--The amendments made by this subtitle shall 
take effect 12 months after the date of the enactment of this Act. The 
Secretary of Labor shall first issue all regulations necessary to carry 
out the amendments made by this subtitle within 6 months after the date 
of the enactment of this Act.
    (b) Treatment of Certain Existing Health Benefits Programs.--
            (1) In general.--In any case in which, as of the date of 
        the enactment of this Act, an arrangement is maintained in a 
        State for the purpose of providing benefits consisting of 
        medical care for the employees and beneficiaries of its 
        participating employers, at least 200 participating employers 
        make contributions to such arrangement, such arrangement has 
        been in existence for at least 10 years, and such arrangement 
        is licensed under the laws of one or more States to provide 
        such benefits to its participating employers, upon the filing 
        with the applicable authority (as defined in section 808(a)(2) 
        of the Employee Retirement Income Security Act of 1974 (as 
        amended by this subtitle)) by the arrangement of an application 
        for certification of the arrangement under part 8 of subtitle B 
        of title I of such Act--
                    (A) such arrangement shall be deemed to be a group 
                health plan for purposes of title I of such Act;
                    (B) the requirements of sections 801(a) and 803(a) 
                of the Employee Retirement Income Security Act of 1974 
                shall be deemed met with respect to such arrangement;
                    (C) the requirements of section 803(b) of such Act 
                shall be deemed met, if the arrangement is operated by 
                a board of trustees which has control over the 
                arrangement;
                    (D) the requirements of section 804(a) of such Act 
                shall be deemed met with respect to such arrangement; 
                and
                    (E) the arrangement may be certified by any 
                applicable authority with respect to its operations in 
                any State only if it operates in such State on the date 
                of certification.
        The provisions of this subsection shall cease to apply with 
        respect to any such arrangement at such time after the date of 
        the enactment of this Act as the applicable requirements of 
        this subsection are not met with respect to such arrangement or 
        at such time that the arrangement provides coverage to 
        participants and beneficiaries in any State other than the 
        States in which coverage is provided on such date of enactment.
            (2) Definitions.--For purposes of this subsection, the 
        terms ``group health plan'', ``medical care'', and 
        ``participating employer'' shall have the meanings provided in 
        section 808 of the Employee Retirement Income Security Act of 
        1974, except that the reference in paragraph (7) of such 
        section to an ``small business health plan'' shall be deemed a 
        reference to an arrangement referred to in this subsection.

                       Subtitle B--Market Relief

SEC. 204. MARKET RELIEF.

    The Public Health Service Act (42 U.S.C. 201 et seq.), as restored 
by section 2, is amended by inserting after title XXX the following:

     ``TITLE XXXI--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION

``SEC. 3101. GENERAL INSURANCE DEFINITIONS.

    ``In this title, the terms `health insurance coverage', `health 
insurance issuer', `group health plan', and `individual health 
insurance' shall have the meanings given such terms in section 2791.

``SEC. 3102. IMPLEMENTATION AND APPLICATION AUTHORITY BY SECRETARY.

    ``The Secretary shall, through promulgation and implementation of 
such regulations as the Secretary may reasonably determine necessary or 
appropriate, and in consultation with a balanced spectrum of effected 
entities and persons, modify the implementation and application of this 
title to accommodate with minimum disruption such changes to State or 
Federal law provided in this title and the (and the amendments made by 
such Act) or in regulations issued thereto.

                      ``Subtitle A--Market Relief

                     ``PART I--RATING REQUIREMENTS

``SEC. 3111. DEFINITIONS.

    ``In this part:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that, with respect to the small group market, has enacted 
        small group rating rules that meet the minimum standards set 
        forth in section 3112(a)(1) or, as applicable, transitional 
        small group rating rules set forth in section 3112(b).
            ``(2) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the insurance 
        laws of such State.
            ``(3) Base premium rate.--The term `base premium rate' 
        means, for each class of business with respect to a rating 
        period, the lowest premium rate charged or that could have been 
        charged under a rating system for that class of business by the 
        small employer carrier to small employers with similar case 
        characteristics for health benefit plans with the same or 
        similar coverage.
            ``(4) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a State and 
        that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the Model 
                Small Group Rating Rules or, as applicable, 
                transitional small group rating rules in a State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer small group health insurance coverage in that 
                State consistent with the Model Small Group Rating 
                Rules, and provides with such notice a copy of any 
                insurance policy that it intends to offer in the State, 
                its most recent annual and quarterly financial reports, 
                and any other information required to be filed with the 
                insurance department of the State (or other State 
                agency); and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such group 
                health coverage) and filed with the State pursuant to 
                subparagraph (B), a description in the insurer's 
                contract of the Model Small Group Rating Rules and an 
                affirmation that such Rules are included in the terms 
                of such contract.
            ``(5) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the small 
        group health insurance market, except that such term shall not 
        include excepted benefits (as defined in section 2791(c)).
            ``(6) Index rate.--The term `index rate' means for each 
        class of business with respect to the rating period for small 
        employers with similar case characteristics, the arithmetic 
        average of the applicable base premium rate and the 
        corresponding highest premium rate.
            ``(7)  Model small group rating rules.--The term `Model 
        Small Group Rating Rules' means the rules set forth in section 
        3112(a)(2).
            ``(8) Nonadopting state.--The term `nonadopting State' 
        means a State that is not an adopting State.
            ``(9) Small group insurance market.--The term `small group 
        insurance market' shall have the meaning given the term `small 
        group market' in section 2791(e)(5).
            ``(10) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.
            ``(11) Variation limits.--
                    ``(A) Composite variation limit.--
                            ``(i) In general.--The term `composite 
                        variation limit' means the total variation in 
                        premium rates charged by a health insurance 
                        issuer in the small group market as permitted 
                        under applicable State law based on the 
                        following factors or case characteristics:
                                    ``(I) Age.
                                    ``(II) Duration of coverage.
                                    ``(III) Claims experience.
                                    ``(IV) Health status.
                            ``(ii) Use of factors.--With respect to the 
                        use of the factors described in clause (i) in 
                        setting premium rates, a health insurance 
                        issuer shall use one or both of the factors 
                        described in subclauses (I) or (IV) of such 
                        clause and may use the factors described in 
                        subclauses (II) or (III) of such clause.
                    ``(B) Total variation limit.--The term `total 
                variation limit' means the total variation in premium 
                rates charged by a health insurance issuer in the small 
                group market as permitted under applicable State law 
                based on all factors and case characteristics (as 
                described in section 3112(a)(1)).

``SEC. 3112. RATING RULES.

    ``(a) Establishment of Minimum Standards for Premium Variations and 
Model Small Group Rating Rules.--Not later than 6 months after the date 
of enactment of this title, the Secretary shall promulgate regulations 
establishing the following Minimum Standards and Model Small Group 
Rating Rules:
            ``(1) Minimum standards for premium variations.--
                    ``(A) Composite variation limit.--The composite 
                variation limit shall not be less than 3:1.
                    ``(B) Total variation limit.--The total variation 
                limit shall not be less than 5:1.
                    ``(C) Prohibition on use of certain case 
                characteristics.--For purposes of this paragraph, in 
                calculating the total variation limit, the State shall 
                not use case characteristics other than those used in 
                calculating the composite variation limit and industry, 
                geographic area, group size, participation rate, class 
                of business, and participation in wellness programs.
            ``(2) Model small group rating rules.--The following apply 
        to an eligible insurer in a non-adopting State:
                    ``(A) Premium rates.--Premium rates for small group 
                health benefit plans to which this title applies shall 
                comply with the following provisions relating to 
                premiums, except as provided for under subsection (b):
                            ``(i) Variation in premium rates.--The plan 
                        may not vary premium rates by more than the 
                        minimum standards provided for under paragraph 
                        (1).
                            ``(ii) Index rate.--The index rate for a 
                        rating period for any class of business shall 
                        not exceed the index rate for any other class 
                        of business by more than 20 percent, excluding 
                        those classes of business related to 
                        association groups under this title.
                            ``(iii) Class of businesses.--With respect 
                        to a class of business, the premium rates 
                        charged during a rating period to small 
                        employers with similar case characteristics for 
                        the same or similar coverage or the rates that 
                        could be charged to such employers under the 
                        rating system for that class of business, shall 
                        not vary from the index rate by more than 25 
                        percent of the index rate under clause (ii).
                            ``(iv) Increases for new rating periods.--
                        The percentage increase in the premium rate 
                        charged to a small employer for a new rating 
                        period may not exceed the sum of the following:
                                    ``(I) The percentage change in the 
                                new business premium rate measured from 
                                the first day of the prior rating 
                                period to the first day of the new 
                                rating period. In the case of a health 
                                benefit plan into which the small 
                                employer carrier is no longer enrolling 
                                new small employers, the small employer 
                                carrier shall use the percentage change 
                                in the base premium rate, except that 
                                such change shall not exceed, on a 
                                percentage basis, the change in the new 
                                business premium rate for the most 
                                similar health benefit plan into which 
                                the small employer carrier is actively 
                                enrolling new small employers.
                                    ``(II) Any adjustment, not to 
                                exceed 15 percent annually and adjusted 
                                pro rata for rating periods of less 
                                then 1 year, due to the claim 
                                experience, health status or duration 
                                of coverage of the employees or 
                                dependents of the small employer as 
                                determined from the small employer 
                                carrier's rate manual for the class of 
                                business involved.
                                    ``(III) Any adjustment due to 
                                change in coverage or change in the 
                                case characteristics of the small 
                                employer as determined from the small 
                                employer carrier's rate manual for the 
                                class of business.
                            ``(v) Uniform application of adjustments.--
                        Adjustments in premium rates for claim 
                        experience, health status, or duration of 
                        coverage shall not be charged to individual 
                        employees or dependents. Any such adjustment 
                        shall be applied uniformly to the rates charged 
                        for all employees and dependents of the small 
                        employer.
                            ``(vi) Prohibition on use of certain case 
                        characteristic.--A small employer carrier shall 
                        not utilize case characteristics, other than 
                        those permitted under paragraph (1)(C), without 
                        the prior approval of the applicable State 
                        authority.
                            ``(vii) Consistent application of 
                        factors.--Small employer carriers shall apply 
                        rating factors, including case characteristics, 
                        consistently with respect to all small 
                        employers in a class of business. Rating 
                        factors shall produce premiums for identical 
                        groups which differ only by the amounts 
                        attributable to plan design and do not reflect 
                        differences due to the nature of the groups 
                        assumed to select particular health benefit 
                        plans.
                            ``(viii) Treatment of plans as having same 
                        rating period.--A small employer carrier shall 
                        treat all health benefit plans issued or 
                        renewed in the same calendar month as having 
                        the same rating period.
                            ``(ix) Require compliance.--Premium rates 
                        for small business health benefit plans shall 
                        comply with the requirements of this subsection 
                        notwithstanding any assessments paid or payable 
                        by a small employer carrier as required by a 
                        State's small employer carrier reinsurance 
                        program.
                    ``(B) Establishment of separate class of 
                business.--Subject to subparagraph (C), a small 
                employer carrier may establish a separate class of 
                business only to reflect substantial differences in 
                expected claims experience or administrative costs 
                related to the following:
                            ``(i) The small employer carrier uses more 
                        than one type of system for the marketing and 
                        sale of health benefit plans to small 
                        employers.
                            ``(ii) The small employer carrier has 
                        acquired a class of business from another small 
                        employer carrier.
                            ``(iii) The small employer carrier provides 
                        coverage to one or more association groups that 
                        meet the requirements of this title.
                    ``(C) Limitation.--A small employer carrier may 
                establish up to 9 separate classes of business under 
                subparagraph (B), excluding those classes of business 
                related to association groups under this title.
                    ``(D) Limitation on transfers.--A small employer 
                carrier shall not transfer a small employer 
                involuntarily into or out of a class of business. A 
                small employer carrier shall not offer to transfer a 
                small employer into or out of a class of business 
                unless such offer is made to transfer all small 
                employers in the class of business without regard to 
                case characteristics, claim experience, health status 
                or duration of coverage since issue.
    ``(b) Transitional Model Small Group Rating Rules.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this title and to the extent necessary to 
        provide for a graduated transition to the minimum standards for 
        premium variation as provided for in subsection (a)(1), the 
        Secretary, in consultation with the National Association of 
        Insurance Commissioners (NAIC), shall promulgate State-specific 
        transitional small group rating rules in accordance with this 
        subsection, which shall be applicable with respect to non-
        adopting States and eligible insurers operating in such States 
        for a period of not to exceed 3 years from the date of the 
        promulgation of the minimum standards for premium variation 
        pursuant to subsection (a).
            ``(2) Compliance with transitional model small group rating 
        rules.--During the transition period described in paragraph 
        (1), a State that, on the date of enactment of this title, has 
        in effect a small group rating rules methodology that allows 
        for a variation that is less than the variation provided for 
        under subsection (a)(1) (concerning minimum standards for 
        premium variation), shall be deemed to be an adopting State if 
        the State complies with the transitional small group rating 
        rules as promulgated by the Secretary pursuant to paragraph 
        (1).
            ``(3) Transitioning of old business.--
                    ``(A) In general.--In developing the transitional 
                small group rating rules under paragraph (1), the 
                Secretary shall, after consultation with the National 
                Association of Insurance Commissioners and 
                representatives of insurers operating in the small 
                group health insurance market in non-adopting States, 
                promulgate special transition standards with respect to 
                independent rating classes for old and new business, to 
                the extent reasonably necessary to protect health 
                insurance consumers and to ensure a stable and fair 
                transition for old and new market entrants.
                    ``(B) Period for operation of independent rating 
                classes.--In developing the special transition 
                standards pursuant to subparagraph (A), the Secretary 
                shall permit a carrier in a non-adopting State, at its 
                option, to maintain independent rating classes for old 
                and new business for a period of up to 5 years, with 
                the commencement of such 5-year period to begin at such 
                time, but not later than the date that is 3 years after 
                the date of enactment of this title, as the carrier 
                offers a book of business meeting the minimum standards 
                for premium variation provided for in subsection (a)(1) 
                or the transitional small group rating rules under 
                paragraph (1).
            ``(4) Other transitional authority.--In developing the 
        transitional small group rating rules under paragraph (1), the 
        Secretary shall provide for the application of the transitional 
        small group rating rules in transition States as the Secretary 
        may determine necessary for an effective transition.
    ``(c) Market Re-Entry.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a health insurance issuer that has voluntarily withdrawn 
        from providing coverage in the small group market prior to the 
        date of enactment of this title shall not be excluded from re-
        entering such market on a date that is more than 180 days after 
        such date of enactment.
            ``(2) Termination.--The provision of this subsection shall 
        terminate on the date that is 24 months after the date of 
        enactment of this title.

``SEC. 3113. APPLICATION AND PREEMPTION.

    ``(a) Superseding of State Law.--
            ``(1) In general.--This part shall supersede any and all 
        State laws of a non-adopting State insofar as such State laws 
        (whether enacted prior to or after the date of enactment of 
        this subtitle) relate to rating in the small group insurance 
        market as applied to an eligible insurer, or small group health 
        insurance coverage issued by an eligible insurer, including 
        with respect to coverage issued to a small employer through a 
        small business health plan, in a State.
            ``(2) Nonadopting states.--This part shall supersede any 
        and all State laws of a nonadopting State insofar as such State 
        laws (whether enacted prior to or after the date of enactment 
        of this subtitle)--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing small group health insurance 
                coverage consistent with the Model Small Group Rating 
                Rules or transitional model small group rating rules; 
                or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing small group 
                health insurance coverage consistent with the Model 
                Small Group Rating Rules or transitional model small 
                group rating rules.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting States.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers that offer small group health insurance 
        coverage in a nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law in a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the Model Small Group Rating Rules or 
        transitional model small group rating rules.
            ``(4) No effect on preemption.--In no case shall this part 
        be construed to limit or affect in any manner the preemptive 
        scope of sections 502 and 514 of the Employee Retirement Income 
        Security Act of 1974. In no case shall this part be construed 
        to create any cause of action under Federal or State law or 
        enlarge or affect any remedy available under the Employee 
        Retirement Income Security Act of 1974.
            ``(5) Preemption limited to rating.--Subsection (a) shall 
        not preempt any State law that does not have a reference to or 
        a connection with State rating rules that would otherwise apply 
        to eligible insurers.
    ``(c) Effective Date.--This section shall apply, at the election of 
the eligible insurer, beginning in the first plan year or the first 
calendar year following the issuance of the final rules by the 
Secretary under the Model Small Group Rating Rules or, as applicable, 
the Transitional Model Small Group Rating Rules, but in no event 
earlier than the date that is 12 months after the date of enactment of 
this title.

``SEC. 3114. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The courts of the United States shall have 
exclusive jurisdiction over civil actions involving the interpretation 
of this part.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 3113.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 3115. ONGOING REVIEW.

    ``Not later than 5 years after the date on which the Model Small 
Group Rating Rules are issued under this part, and every 5 years 
thereafter, the Secretary, in consultation with the National 
Association of Insurance Commissioners, shall prepare and submit to the 
appropriate committees of Congress a report that assesses the effect of 
the Model Small Group Rating Rules on access, cost, and market 
functioning in the small group market. Such report may, if the 
Secretary, in consultation with the National Association of Insurance 
Commissioners, determines such is appropriate for improving access, 
costs, and market functioning, contain legislative proposals for 
recommended modification to such Model Small Group Rating Rules.

                      ``PART II--AFFORDABLE PLANS

``SEC. 3121. DEFINITIONS.

    ``In this part:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that has enacted a law providing that small group, 
        individual, and large group health insurers in such State may 
        offer and sell products in accordance with the List of Required 
        Benefits and the Terms of Application as provided for in 
        section 3122(b).
            ``(2) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a nonadopting 
        State and that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the List of 
                Required Benefits and Terms of Application in a 
                nonadopting State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other applicable State agency), 
                not later than 30 days prior to the offering of 
                coverage described in this subparagraph, that the 
                issuer intends to offer health insurance coverage in 
                that State consistent with the List of Required 
                Benefits and Terms of Application, and provides with 
                such notice a copy of any insurance policy that it 
                intends to offer in the State, its most recent annual 
                and quarterly financial reports, and any other 
                information required to be filed with the insurance 
                department of the State (or other State agency) by the 
                Secretary in regulations; and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such group 
                health coverage) and filed with the State pursuant to 
                subparagraph (B), a description in the insurer's 
                contract of the List of Required Benefits and a 
                description of the Terms of Application, including a 
                description of the benefits to be provided, and that 
                adherence to such standards is included as a term of 
                such contract.
            ``(3) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the small 
        group, individual, or large group health insurance markets, 
        including with respect to small business health plans, except 
        that such term shall not include excepted benefits (as defined 
        in section 2791(c)).
            ``(4) List of required benefits.--The term `List of 
        Required Benefits' means the List issued under section 3122(a).
            ``(5) Nonadopting state.--The term `nonadopting State' 
        means a State that is not an adopting State.
            ``(6) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.
            ``(7) State provider freedom of choice law.--The term 
        `State Provider Freedom of Choice Law' means a State law 
        requiring that a health insurance issuer, with respect to 
        health insurance coverage, not discriminate with respect to 
        participation, reimbursement, or indemnification as to any 
        provider who is acting within the scope of the provider's 
        license or certification under applicable State law.
            ``(8) Terms of application.--The term `Terms of 
        Application' means terms provided under section 3122(a).

``SEC. 3122. OFFERING AFFORDABLE PLANS.

    ``(a) List of Required Benefits.--Not later than 3 months after the 
date of enactment of this title, the Secretary, in consultation with 
the National Association of Insurance Commissioners, shall issue by 
interim final rule a list (to be known as the `List of Required 
Benefits') of covered benefits, services, or categories of providers 
that are required to be provided by health insurance issuers, in each 
of the small group, individual, and large group markets, in at least 26 
States as a result of the application of State covered benefit, 
service, and category of provider mandate laws. With respect to plans 
sold to or through small business health plans, the List of Required 
Benefits applicable to the small group market shall apply.
    ``(b) Terms of Application.--
            ``(1) State with mandates.--With respect to a State that 
        has a covered benefit, service, or category of provider mandate 
        in effect that is covered under the List of Required Benefits 
        under subsection (a), such State mandate shall, subject to 
        paragraph (3) (concerning uniform application), apply to a 
        coverage plan or plan in, as applicable, the small group, 
        individual, or large group market or through a small business 
        health plan in such State.
            ``(2) States without mandates.--With respect to a State 
        that does not have a covered benefit, service, or category of 
        provider mandate in effect that is covered under the List of 
        Required Benefits under subsection (a), such mandate shall not 
        apply, as applicable, to a coverage plan or plan in the small 
        group, individual, or large group market or through a small 
        business health plan in such State.
            ``(3) Uniform application of laws.--
                    ``(A) In general.--With respect to a State 
                described in paragraph (1), in applying a covered 
                benefit, service, or category of provider mandate that 
                is on the List of Required Benefits under subsection 
                (a) the State shall permit a coverage plan or plan 
                offered in the small group, individual, or large group 
                market or through a small business health plan in such 
                State to apply such benefit, service, or category of 
                provider coverage in a manner consistent with the 
                manner in which such coverage is applied under one of 
                the three most heavily subscribed national health plans 
                offered under the Federal Employee Health Benefits 
                Program under chapter 89 of title 5, United States Code 
                (as determined by the Secretary in consultation with 
                the Director of the Office of Personnel Management), 
                and consistent with the Publication of Benefit 
                Applications under subsection (c). In the event a 
                covered benefit, service, or category of provider 
                appearing in the List of Required Benefits is not 
                offered in one of the three most heavily subscribed 
                national health plans offered under the Federal 
                Employees Health Benefits Program, such covered 
                benefit, service, or category of provider requirement 
                shall be applied in a manner consistent with the manner 
                in which such coverage is offered in the remaining most 
                heavily subscribed plan of the remaining Federal 
                Employees Health Benefits Program plans, as determined 
                by the Secretary, in consultation with the Director of 
                the Office of Personnel Management.
                    ``(B) Exception regarding state provider freedom of 
                choice laws.--Notwithstanding subparagraph (A), in the 
                event a category of provider mandate is included in the 
                List of Covered Benefits, any State Provider Freedom of 
                Choice Law (as defined in section 3121(7)) that is in 
                effect in any State in which such category of provider 
                mandate is in effect shall not be preempted, with 
                respect to that category of provider, by this part.
    ``(c) Publication of Benefit Applications.--Not later than 3 months 
after the date of enactment of this title, and on the first day of 
every calendar year thereafter, the Secretary, in consultation with the 
Director of the Office of Personnel Management, shall publish in the 
Federal Register a description of such covered benefits, services, and 
categories of providers covered in that calendar year by each of the 
three most heavily subscribed nationally available Federal Employee 
Health Benefits Plan options which are also included on the List of 
Required Benefits.
    ``(d) Effective Dates.--
            ``(1) Small business health plans.--With respect to health 
        insurance provided to participating employers of small business 
        health plans, the requirements of this part (concerning lower 
        cost plans) shall apply beginning on the date that is 12 months 
        after the date of enactment of this title.
            ``(2) Non-association coverage.--With respect to health 
        insurance provided to groups or individuals other than 
        participating employers of small business health plans, the 
        requirements of this part shall apply beginning on the date 
        that is 15 months after the date of enactment of this title.
    ``(e) Updating of List of Required Benefits.--Not later than 2 
years after the date on which the list of required benefits is issued 
under subsection (a), and every 2 years thereafter, the Secretary, in 
consultation with the National Association of Insurance Commissioners, 
shall update the list based on changes in the laws and regulations of 
the States. The Secretary shall issue the updated list by regulation, 
and such updated list shall be effective upon the first plan year 
following the issuance of such regulation.

``SEC. 3123. APPLICATION AND PREEMPTION.

    ``(a) Superceding of State Law.--
            ``(1) In general.--This part shall supersede any and all 
        State laws insofar as such laws relate to mandates relating to 
        covered benefits, services, or categories of provider in the 
        health insurance market as applied to an eligible insurer, or 
        health insurance coverage issued by an eligible insurer, 
        including with respect to coverage issued to a small business 
        health plan, in a nonadopting State.
            ``(2) Nonadopting states.--This part shall supersede any 
        and all State laws of a nonadopting State (whether enacted 
        prior to or after the date of enactment of this title) insofar 
        as such laws--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing health insurance coverage 
                consistent with the Benefit Choice Standards, as 
                provided for in section 3122(a); or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing health 
                insurance coverage consistent with the Benefit Choice 
                Standards.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting States.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers who offer health insurance coverage in a 
        nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law of a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the Benefit Choice Standards.
            ``(4) No effect on preemption.--In no case shall this part 
        be construed to limit or affect in any manner the preemptive 
        scope of sections 502 and 514 of the Employee Retirement Income 
        Security Act of 1974. In no case shall this part be construed 
        to create any cause of action under Federal or State law or 
        enlarge or affect any remedy available under the Employee 
        Retirement Income Security Act of 1974.
            ``(5) Preemption limited to benefits.--Subsection (a) shall 
        not preempt any State law that does not have a reference to or 
        a connection with State mandates regarding covered benefits, 
        services, or categories of providers that would otherwise apply 
        to eligible insurers.

``SEC. 3124. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The courts of the United States shall have 
exclusive jurisdiction over civil actions involving the interpretation 
of this part.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 3123.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 3125. RULES OF CONSTRUCTION.

    ``(a) In General.--Notwithstanding any other provision of Federal 
or State law, a health insurance issuer in an adopting State or an 
eligible insurer in a non-adopting State may amend its existing 
policies to be consistent with the terms of this subtitle (concerning 
rating and benefits).
    ``(b) Health Savings Accounts.--Nothing in this subtitle shall be 
construed to create any mandates for coverage of benefits for HSA-
qualified health plans that would require reimbursements in violation 
of section 223(c)(2) of the Internal Revenue Code of 1986.''.

              TITLE II--TARGETED EFFORTS TO EXPAND ACCESS

SEC. 211. EXTENDING COVERAGE OF DEPENDENTS.

    (a) Employee Retirement Income Security Act of 1974.--
            (1) In general.--Part 7 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974 is amended by 
        inserting after section 714 the following new section:

``SEC. 715. EXTENDING COVERAGE OF DEPENDENTS.

    ``(a) In General.--In the case of a group health plan, or health 
insurance coverage offered in connection with a group health plan, that 
treats as a beneficiary under the plan an individual who is a dependent 
child of a participant or beneficiary under the plan, the plan or 
coverage shall continue to treat the individual as a dependent child 
without regard to the individual's age until the individual turns 26 
years of age.
    ``(b) Construction.--Nothing in this section shall be construed as 
requiring a group health plan to provide benefits for dependent 
children as beneficiaries under the plan or to require a participant to 
elect coverage of dependent children.''.
            (2) Clerical amendment.--The table of contents of such Act 
        is amended by inserting after the item relating to section 714 
        the following new item:

``Sec. 715. Extending coverage of dependents.''.
    (b) PHSA.--Title XXVII of the Public Health Service Act, as 
restored by section 2, is amended by inserting after section 2707 the 
following new section:

``SEC. 2708. EXTENDING COVERAGE OF DEPENDENTS.

    ``(a) In General.--In the case of a group health plan, or health 
insurance coverage offered in connection with a group health plan, that 
treats as a beneficiary under the plan an individual who is a dependent 
child of a participant or beneficiary under the plan, the plan or 
coverage shall continue to treat the individual as a dependent child 
without regard to the individual's age until the individual turns 26 
years of age.
    ``(b) Construction.--Nothing in this section shall be construed as 
requiring a group health plan to provide benefits for dependent 
children as beneficiaries under the plan or to require a participant to 
elect coverage of dependent children.''.
    (c) IRC.--
            (1) In general.--Subchapter B of chapter 100 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new section:

``SEC. 9814. EXTENDING COVERAGE OF DEPENDENTS.

    ``(a) In General.--In the case of a group health plan that treats 
as a beneficiary under the plan an individual who is a dependent child 
of a participant or beneficiary under the plan, the plan shall continue 
to treat the individual as a dependent child without regard to the 
individual's age until the individual turns 26 years of age.
    ``(b) Construction.--Nothing in this section shall be construed as 
requiring a group health plan to provide coverage for dependent 
children as beneficiaries under the plan or to require a participant to 
elect coverage of dependent children.''.
            (2) Clerical amendment.--The table of sections in such 
        subchapter is amended by adding at the end the following new 
        item:

``Sec. 9814. Extending coverage of dependents.''.
    (d) Effective Date.--The amendments made by subsections (a), (b), 
and (c) shall apply to group health plans for plan years beginning more 
than 3 months after the date of the enactment of this Act and shall 
apply to individuals who are dependent children under a group health 
plan, or health insurance coverage offered in connection with such a 
plan, on or after such date.
    (e) Adult Dependents.--
            (1) Exclusion of amounts expended for medical care.--The 
        first sentence of section 105(b) of the Internal Revenue Code 
        of 1986 (relating to amounts expended for medical care) is 
        amended--
                    (A) by striking ``and his dependents'' and 
                inserting ``his dependents''; and
                    (B) by inserting before the period the following: 
                ``, and any child (as defined in section 152(f)(1)) of 
                the taxpayer who as of the end of the taxable year has 
                not attained age 27''.
            (2) Self-employed health insurance deduction.--Section 
        162(l)(1) of such Code is amended to read as follows:
            ``(1) Allowance of deduction.--In the case of a taxpayer 
        who is an employee within the meaning of section 401(c)(1), 
        there shall be allowed as a deduction under this section an 
        amount equal to the amount paid during the taxable year for 
        insurance which constitutes medical care for
                    ``(A) the taxpayer,
                    ``(B) the taxpayer's spouse,
                    ``(C) the taxpayer's dependents, and
                    ``(D) any child (as defined in section 152(f)(1)) 
                of the taxpayer who as of the end of the taxable year 
                has not attained age 27.''.
            (3) Coverage under self-employed deduction.--Section 
        162(l)(2)(B) of such Code is amended by inserting ``, or any 
        dependent, or individual described in subparagraph (D) of 
        paragraph (1) with respect to,'' after ``spouse of''.
            (4) Sick and accident benefits provided to members of a 
        voluntary employees' beneficiary association and their 
        dependents.--Section 501(c)(9) of such Code is amended by 
        adding at the end the following new sentence: ``For purposes of 
        providing for the payment of sick and accident benefits to 
        members of such an association and their dependents, the term 
        `dependent' shall include any individual who is a child (as 
        defined in section 152(f)(1)) of a member who as of the end of 
        the calendar year has not attained age 27.''.
            (5) Medical and other benefits for retired employees.--
        Section 401(h) of such Code is amended by adding at the end the 
        following: ``For purposes of this subsection, the term 
        `dependent' shall include any individual who is a child (as 
        defined in section 152(f)(1)) of a retired employee who as of 
        the end of the calendar year has not attained age 27.''.

SEC. 212. PROHIBITING PREEXISTING CONDITION EXCLUSIONS FOR ENROLLEES 
              UNDER AGE 19.

    (a) PHSA.--Section 2701(a) of the Public Health Service Act (42 
U.S.C. 300gg(a)), as restored by section 2, is amended--
            (1) in the matter preceding paragraph (1), by inserting 
        ``and the last sentence of this subsection'' after ``subsection 
        (d)''; and
            (2) by adding at the end the following new sentence:
``In the case of a participant or beneficiary who is under 19 years of 
age, 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.''.
    (b) ERISA.--Section 701(a) of the Employee Retirement Income 
Security Act of 1974, as restored by section 2, is amended--
            (1) in the matter preceding paragraph (1), by inserting 
        ``and the last sentence of this subsection'' after ``subsection 
        (d)''; and
            (2) by adding at the end the following new sentence:
``In the case of a participant or beneficiary who is under 19 years of 
age, 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.''.
    (c) IRC.--Section 9801 of the Internal Revenue Code of 1986, as 
restored by section 2, is amended--
            (1) in the matter preceding paragraph (1), by inserting 
        ``and the last sentence of this subsection'' after ``subsection 
        (d)''; and
            (2) by adding at the end the following new sentence:
``In the case of a participant or beneficiary who is under 19 years of 
age, a group health plan may not impose any preexisting condition 
exclusion with respect to such plan.''.

SEC. 213. HEALTH PLAN FINDERS.

    (a) State Plan Finders.--Not later than 12 months after the date of 
the enactment of this Act, each State may contract with a private 
entity to develop and operate a plan finder website (referred to in 
this section as a ``State plan finder'') which shall provide 
information to individuals in such State on plans of health insurance 
coverage that are available to individuals in such State (in this 
section referred to as a ``health insurance plan''). Such State may not 
operate a plan finder itself.
    (b) Multi-State Plan Finders.--
            (1) In general.--A private entity may operate a multi-State 
        finder that operates under this section in the States involved 
        in the same manner as a State plan finder would operate in a 
        single State.
            (2) Sharing of information.--States shall regulate the 
        manner in which data is shared between plan finders to ensure 
        consistency and accuracy in the information about health 
        insurance plans contained in such finders.
    (c) Requirements for Plan Finders.--Each plan finder shall meet the 
following requirements:
            (1) The plan finder shall ensure that each health insurance 
        plan in the plan finder meets the requirements for such plans 
        under subsection (d).
            (2) The plan finder shall present complete information on 
        the costs and benefits of health insurance plans (including 
        information on monthly premium, copayments, and deductibles) in 
        a uniform manner that--
                    (A) uses the standard definitions developed under 
                paragraph (3); and
                    (B) is designed to allow consumers to easily 
                compare such plans.
            (3) The plan finder shall be available on the Internet and 
        accessible to all individuals in the State or, in the case of a 
        multi-State plan finder, in all States covered by the multi-
        State plan finder.
            (4) The plan finder shall allow consumers to search and 
        sort data on the health insurance plans in the plan finder on 
        criteria such as coverage of specific benefits (such as 
        coverage of disease management services or pediatric care 
        services), as well as data available on quality.
            (5) The plan finder shall meet all relevant State laws and 
        regulations, including laws and regulations related to the 
        marketing of insurance products. In the case of a multi-State 
        plan finder, the finder shall meet such laws and regulations 
        for all of the States involved.
            (6) The plan finder shall meet solvency, financial, and 
        privacy requirements established by the State or States in 
        which the plan finder operates or the Secretary for multi-State 
        finders.
            (7) The plan finder and the employees of the plan finder 
        shall be appropriately licensed in the State or States in which 
        the plan finder operates, if such licensure is required by such 
        State or States.
            (8) Notwithstanding subsection (f)(1), the plan finder 
        shall assist individuals who are eligible for the Medicaid 
        program under title XIX of the Social Security Act or State 
        Children's Health Insurance Program under title XXI of such Act 
        by including information on Medicaid options, eligibility, and 
        how to enroll.
    (d) Requirements for Plans Participating in a Plan Finder.--
            (1) In general.--Each State shall ensure that health 
        insurance plans participating in the State plan finder or in a 
        multi-State plan finder meet the requirements of paragraph (2) 
        (relating to adequacy of insurance coverage, consumer 
        protection, and financial strength).
            (2) Specific requirements.--In order to participate in a 
        plan finder, a health insurance plan must meet all of the 
        following requirements, as determined by each State in which 
        such plan operates:
                    (A) The health insurance plan shall be actuarially 
                sound.
                    (B) The health insurance plan may not have a 
                history of abusive policy rescissions.
                    (C) The health insurance plan shall meet financial 
                and solvency requirements.
                    (D) The health insurance plan shall disclose--
                            (i) all financial arrangements involving 
                        the sale and purchase of health insurance, such 
                        as the payment of fees and commissions; and
                            (ii) such arrangements may not be abusive.
                    (E) The health insurance plan shall maintain 
                electronic health records that comply with the 
                requirements of the American Recovery and Reinvestment 
                Act of 2009 (Public Law 111-5) related to electronic 
                health records.
                    (F) The health insurance plan shall make available 
                to plan enrollees via the finder, whether by 
                information provided to the finder or by a Web site 
                link directing the enrollee from the finder to the 
                health insurance plan Web site, data that includes the 
                price and cost to the individual of services offered by 
                a provider according to the terms and conditions of the 
                health plan. Data described in this paragraph is not 
                made public by the finder, only made available to the 
                individual once enrolled in the health plan.
    (e) Prohibitions.--
            (1) Direct enrollment.--The State plan finder may not 
        directly enroll individuals in health insurance plans.
            (2) Conflicts of interest.--
                    (A) Companies.--A health insurance issuer offering 
                a health insurance plan through a plan finder may not--
                            (i) be the private entity developing and 
                        maintaining a plan finder under subsections (a) 
                        and (b); or
                            (ii) have an ownership interest in such 
                        private entity or in the plan finder.
                    (B) Individuals.--An individual employed by a 
                health insurance issuer offering a health insurance 
                plan through a plan finder may not serve as a director 
                or officer for--
                            (i) the private entity developing and 
                        maintaining a plan finder under subsections (a) 
                        and (b); or
                            (ii) the plan finder.
    (f) Construction.--Nothing in this section shall be construed to 
allow the Secretary authority to regulate benefit packages or to 
prohibit health insurance brokers and agents from--
            (1) utilizing the plan finder for any purpose; or
            (2) marketing or offering health insurance products.
    (g) Plan Finder Defined.--For purposes of this section, the term 
``plan finder'' means a State plan finder under subsection (a) or a 
multi-State plan finder under subsection (b).
    (h) State Defined.--In this section, the term ``State'' has the 
meaning given such term for purposes of title XIX of the Social 
Security Act.

 TITLE III--EXPANDING CHOICES BY ALLOWING AMERICANS TO BUY HEALTH CARE 
                      COVERAGE ACROSS STATE LINES

SEC. 221. INTERSTATE PURCHASING OF HEALTH INSURANCE.

    (a) In General.--Title XXVII of the Public Health Service Act (42 
U.S.C. 300gg et seq.), as restored by section 2, is amended by adding 
at the end the following new part:

``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE

``SEC. 2795. DEFINITIONS.

    ``In this part:
            ``(1) Primary state.--The term `primary State' means, with 
        respect to individual health insurance coverage offered by a 
        health insurance issuer, the State designated by the issuer as 
        the State whose covered laws shall govern the health insurance 
        issuer in the sale of such coverage under this part. An issuer, 
        with respect to a particular policy, may only designate one 
        such State as its primary State with respect to all such 
        coverage it offers. Such an issuer may not change the 
        designated primary State with respect to individual health 
        insurance coverage once the policy is issued, except that such 
        a change may be made upon renewal of the policy. With respect 
        to such designated State, the issuer is deemed to be doing 
        business in that State.
            ``(2) Secondary state.--The term `secondary State' means, 
        with respect to individual health insurance coverage offered by 
        a health insurance issuer, any State that is not the primary 
        State. In the case of a health insurance issuer that is selling 
        a policy in, or to a resident of, a secondary State, the issuer 
        is deemed to be doing business in that secondary State.
            ``(3) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 2791(b)(2), 
        except that such an issuer must be licensed in the primary 
        State and be qualified to sell individual health insurance 
        coverage in that State.
            ``(4) Individual health insurance coverage.--The term 
        `individual health insurance coverage' means health insurance 
        coverage offered in the individual market, as defined in 
        section 2791(e)(1).
            ``(5) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of this title for the State with respect to the 
        issuer.
            ``(6) Hazardous financial condition.--The term `hazardous 
        financial condition' means that, based on its present or 
        reasonably anticipated financial condition, a health insurance 
        issuer is unlikely to be able--
                    ``(A) to meet obligations to policyholders with 
                respect to known claims and reasonably anticipated 
                claims; or
                    ``(B) to pay other obligations in the normal course 
                of business.
            ``(7) Covered laws.--
                    ``(A) In general.--The term `covered laws' means 
                the laws, rules, regulations, agreements, and orders 
                governing the insurance business pertaining to--
                            ``(i) individual health insurance coverage 
                        issued by a health insurance issuer;
                            ``(ii) the offer, sale, rating (including 
                        medical underwriting), renewal, and issuance of 
                        individual health insurance coverage to an 
                        individual;
                            ``(iii) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of health care and insurance related 
                        services;
                            ``(iv) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of management, operations, and 
                        investment activities of a health insurance 
                        issuer; and
                            ``(v) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of loss control and claims 
                        administration for a health insurance issuer 
                        with respect to liability for which the issuer 
                        provides insurance.
                    ``(B) Exception.--Such term does not include any 
                law, rule, regulation, agreement, or order governing 
                the use of care or cost management techniques, 
                including any requirement related to provider 
                contracting, network access or adequacy, health care 
                data collection, or quality assurance.
            ``(8) State.--The term `State' means the 50 States and 
        includes the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
            ``(9) Unfair claims settlement practices.--The term `unfair 
        claims settlement practices' means only the following 
        practices:
                    ``(A) Knowingly misrepresenting to claimants and 
                insured individuals relevant facts or policy provisions 
                relating to coverage at issue.
                    ``(B) Failing to acknowledge with reasonable 
                promptness pertinent communications with respect to 
                claims arising under policies.
                    ``(C) Failing to adopt and implement reasonable 
                standards for the prompt investigation and settlement 
                of claims arising under policies.
                    ``(D) Failing to effectuate prompt, fair, and 
                equitable settlement of claims submitted in which 
                liability has become reasonably clear.
                    ``(E) Refusing to pay claims without conducting a 
                reasonable investigation.
                    ``(F) Failing to affirm or deny coverage of claims 
                within a reasonable period of time after having 
                completed an investigation related to those claims.
                    ``(G) A pattern or practice of compelling insured 
                individuals or their beneficiaries to institute suits 
                to recover amounts due under its policies by offering 
                substantially less than the amounts ultimately 
                recovered in suits brought by them.
                    ``(H) A pattern or practice of attempting to settle 
                or settling claims for less than the amount that a 
                reasonable person would believe the insured individual 
                or his or her beneficiary was entitled by reference to 
                written or printed advertising material accompanying or 
                made part of an application.
                    ``(I) Attempting to settle or settling claims on 
                the basis of an application that was materially altered 
                without notice to, or knowledge or consent of, the 
                insured.
                    ``(J) Failing to provide forms necessary to present 
                claims within 15 calendar days of a requests with 
                reasonable explanations regarding their use.
                    ``(K) Attempting to cancel a policy in less time 
                than that prescribed in the policy or by the law of the 
                primary State.
            ``(10) Fraud and abuse.--The term `fraud and abuse' means 
        an act or omission committed by a person who, knowingly and 
        with intent to defraud, commits, or conceals any material 
        information concerning, one or more of the following:
                    ``(A) Presenting, causing to be presented or 
                preparing with knowledge or belief that it will be 
                presented to or by an insurer, a reinsurer, broker or 
                its agent, false information as part of, in support of 
                or concerning a fact material to one or more of the 
                following:
                            ``(i) An application for the issuance or 
                        renewal of an insurance policy or reinsurance 
                        contract.
                            ``(ii) The rating of an insurance policy or 
                        reinsurance contract.
                            ``(iii) A claim for payment or benefit 
                        pursuant to an insurance policy or reinsurance 
                        contract.
                            ``(iv) Premiums paid on an insurance policy 
                        or reinsurance contract.
                            ``(v) Payments made in accordance with the 
                        terms of an insurance policy or reinsurance 
                        contract.
                            ``(vi) A document filed with the 
                        commissioner or the chief insurance regulatory 
                        official of another jurisdiction.
                            ``(vii) The financial condition of an 
                        insurer or reinsurer.
                            ``(viii) The formation, acquisition, 
                        merger, reconsolidation, dissolution or 
                        withdrawal from one or more lines of insurance 
                        or reinsurance in all or part of a State by an 
                        insurer or reinsurer.
                            ``(ix) The issuance of written evidence of 
                        insurance.
                            ``(x) The reinstatement of an insurance 
                        policy.
                    ``(B) Solicitation or acceptance of new or renewal 
                insurance risks on behalf of an insurer reinsurer or 
                other person engaged in the business of insurance by a 
                person who knows or should know that the insurer or 
                other person responsible for the risk is insolvent at 
                the time of the transaction.
                    ``(C) Transaction of the business of insurance in 
                violation of laws requiring a license, certificate of 
                authority or other legal authority for the transaction 
                of the business of insurance.
                    ``(D) Attempt to commit, aiding or abetting in the 
                commission of, or conspiracy to commit the acts or 
                omissions specified in this paragraph.

``SEC. 2796. APPLICATION OF LAW.

    ``(a) In General.--The covered laws of the primary State shall 
apply to individual health insurance coverage offered by a health 
insurance issuer in the primary State and in any secondary State, but 
only if the coverage and issuer comply with the conditions of this 
section with respect to the offering of coverage in any secondary 
State.
    ``(b) Exemptions From Covered Laws in a Secondary State.--Except as 
provided in this section, a health insurance issuer with respect to its 
offer, sale, rating (including medical underwriting), renewal, and 
issuance of individual health insurance coverage in any secondary State 
is exempt from any covered laws of the secondary State (and any rules, 
regulations, agreements, or orders sought or issued by such State under 
or related to such covered laws) to the extent that such laws would--
            ``(1) make unlawful, or regulate, directly or indirectly, 
        the operation of the health insurance issuer operating in the 
        secondary State, except that any secondary State may require 
        such an issuer--
                    ``(A) to pay, on a nondiscriminatory basis, 
                applicable premium and other taxes (including high risk 
                pool assessments) which are levied on insurers and 
                surplus lines insurers, brokers, or policyholders under 
                the laws of the State;
                    ``(B) to register with and designate the State 
                insurance commissioner as its agent solely for the 
                purpose of receiving service of legal documents or 
                process;
                    ``(C) to submit to an examination of its financial 
                condition by the State insurance commissioner in any 
                State in which the issuer is doing business to 
                determine the issuer's financial condition, if--
                            ``(i) the State insurance commissioner of 
                        the primary State has not done an examination 
                        within the period recommended by the National 
                        Association of Insurance Commissioners; and
                            ``(ii) any such examination is conducted in 
                        accordance with the examiners' handbook of the 
                        National Association of Insurance Commissioners 
                        and is coordinated to avoid unjustified 
                        duplication and unjustified repetition;
                    ``(D) to comply with a lawful order issued--
                            ``(i) in a delinquency proceeding commenced 
                        by the State insurance commissioner if there 
                        has been a finding of financial impairment 
                        under subparagraph (C); or
                            ``(ii) in a voluntary dissolution 
                        proceeding;
                    ``(E) to comply with an injunction issued by a 
                court of competent jurisdiction, upon a petition by the 
                State insurance commissioner alleging that the issuer 
                is in hazardous financial condition;
                    ``(F) to participate, on a nondiscriminatory basis, 
                in any insurance insolvency guaranty association or 
                similar association to which a health insurance issuer 
                in the State is required to belong;
                    ``(G) to comply with any State law regarding fraud 
                and abuse (as defined in section 2795(10)), except that 
                if the State seeks an injunction regarding the conduct 
                described in this subparagraph, such injunction must be 
                obtained from a court of competent jurisdiction;
                    ``(H) to comply with any State law regarding unfair 
                claims settlement practices (as defined in section 
                2795(9)); or
                    ``(I) to comply with the applicable requirements 
                for independent review under section 2798 with respect 
                to coverage offered in the State;
            ``(2) require any individual health insurance coverage 
        issued by the issuer to be countersigned by an insurance agent 
        or broker residing in that Secondary State; or
            ``(3) otherwise discriminate against the issuer issuing 
        insurance in both the primary State and in any secondary State.
    ``(c) Clear and Conspicuous Disclosure.--A health insurance issuer 
shall provide the following notice, in 12-point bold type, in any 
insurance coverage offered in a secondary State under this part by such 
a health insurance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the name of the 
health insurance issuer, the name of primary State, the name of the 
secondary State, the name of the secondary State, and the name of the 
secondary State, respectively, for the coverage concerned:
THIS POLICY IS ISSUED BY _____ AND IS GOVERNED BY THE LAWS AND 
REGULATIONS OF THE STATE OF _____, AND IT HAS MET ALL THE LAWS OF THAT 
STATE AS DETERMINED BY THAT STATE'S DEPARTMENT OF INSURANCE. THIS 
POLICY MAY BE LESS EXPENSIVE THAN OTHERS BECAUSE IT IS NOT SUBJECT TO 
ALL OF THE INSURANCE LAWS AND REGULATIONS OF THE STATE OF _____, 
INCLUDING COVERAGE OF SOME SERVICES OR BENEFITS MANDATED BY THE LAW OF 
THE STATE OF _____. ADDITIONALLY, THIS POLICY IS NOT SUBJECT TO ALL OF 
THE CONSUMER PROTECTION LAWS OR RESTRICTIONS ON RATE CHANGES OF THE 
STATE OF _____. AS WITH ALL INSURANCE PRODUCTS, BEFORE PURCHASING THIS 
POLICY, YOU SHOULD CAREFULLY REVIEW THE POLICY AND DETERMINE WHAT 
HEALTH CARE SERVICES THE POLICY COVERS AND WHAT BENEFITS IT PROVIDES, 
INCLUDING ANY EXCLUSIONS, LIMITATIONS, OR CONDITIONS FOR SUCH SERVICES 
OR BENEFITS.''.
    ``(d) Prohibition on Certain Reclassifications and Premium 
Increases.--
            ``(1) In general.--For purposes of this section, a health 
        insurance issuer that provides individual health insurance 
        coverage to an individual under this part in a primary or 
        secondary State may not upon renewal--
                    ``(A) move or reclassify the individual insured 
                under the health insurance coverage from the class such 
                individual is in at the time of issue of the contract 
                based on the health-status related factors of the 
                individual; or
                    ``(B) increase the premiums assessed the individual 
                for such coverage based on a health status-related 
                factor or change of a health status-related factor or 
                the past or prospective claim experience of the insured 
                individual.
            ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed to prohibit a health insurance issuer--
                    ``(A) from terminating or discontinuing coverage or 
                a class of coverage in accordance with subsections (b) 
                and (c) of section 2742;
                    ``(B) from raising premium rates for all policy 
                holders within a class based on claims experience;
                    ``(C) from changing premiums or offering discounted 
                premiums to individuals who engage in wellness 
                activities at intervals prescribed by the issuer, if 
                such premium changes or incentives--
                            ``(i) are disclosed to the consumer in the 
                        insurance contract;
                            ``(ii) are based on specific wellness 
                        activities that are not applicable to all 
                        individuals; and
                            ``(iii) are not obtainable by all 
                        individuals to whom coverage is offered;
                    ``(D) from reinstating lapsed coverage; or
                    ``(E) from retroactively adjusting the rates 
                charged an insured individual if the initial rates were 
                set based on material misrepresentation by the 
                individual at the time of issue.
    ``(e) Prior Offering of Policy in Primary State.--A health 
insurance issuer may not offer for sale individual health insurance 
coverage in a secondary State unless that coverage is currently offered 
for sale in the primary State.
    ``(f) Licensing of Agents or Brokers for Health Insurance 
Issuers.--Any State may require that a person acting, or offering to 
act, as an agent or broker for a health insurance issuer with respect 
to the offering of individual health insurance coverage obtain a 
license from that State, with commissions or other compensation subject 
to the provisions of the laws of that State, except that a State may 
not impose any qualification or requirement which discriminates against 
a nonresident agent or broker.
    ``(g) Documents for Submission to State Insurance Commissioner.--
Each health insurance issuer issuing individual health insurance 
coverage in both primary and secondary States shall submit--
            ``(1) to the insurance commissioner of each State in which 
        it intends to offer such coverage, before it may offer 
        individual health insurance coverage in such State--
                    ``(A) a copy of the plan of operation or 
                feasibility study or any similar statement of the 
                policy being offered and its coverage (which shall 
                include the name of its primary State and its principal 
                place of business);
                    ``(B) written notice of any change in its 
                designation of its primary State; and
                    ``(C) written notice from the issuer of the 
                issuer's compliance with all the laws of the primary 
                State; and
            ``(2) to the insurance commissioner of each secondary State 
        in which it offers individual health insurance coverage, a copy 
        of the issuer's quarterly financial statement submitted to the 
        primary State, which statement shall be certified by an 
        independent public accountant and contain a statement of 
        opinion on loss and loss adjustment expense reserves made by--
                    ``(A) a member of the American Academy of 
                Actuaries; or
                    ``(B) a qualified loss reserve specialist.
    ``(h) Power of Courts To Enjoin Conduct.--Nothing in this section 
shall be construed to affect the authority of any Federal or State 
court to enjoin--
            ``(1) the solicitation or sale of individual health 
        insurance coverage by a health insurance issuer to any person 
        or group who is not eligible for such insurance; or
            ``(2) the solicitation or sale of individual health 
        insurance coverage that violates the requirements of the law of 
        a secondary State which are described in subparagraphs (A) 
        through (H) of section 2796(b)(1).
    ``(i) Power of Secondary States To Take Administrative Action.--
Nothing in this section shall be construed to affect the authority of 
any State to enjoin conduct in violation of that State's laws described 
in section 2796(b)(1).
    ``(j) State Powers To Enforce State Laws.--
            ``(1) In general.--Subject to the provisions of subsection 
        (b)(1)(G) (relating to injunctions) and paragraph (2), nothing 
        in this section shall be construed to affect the authority of 
        any State to make use of any of its powers to enforce the laws 
        of such State with respect to which a health insurance issuer 
        is not exempt under subsection (b).
            ``(2) Courts of competent jurisdiction.--If a State seeks 
        an injunction regarding the conduct described in paragraphs (1) 
        and (2) of subsection (h), such injunction must be obtained 
        from a Federal or State court of competent jurisdiction.
    ``(k) States' Authority To Sue.--Nothing in this section shall 
affect the authority of any State to bring action in any Federal or 
State court.
    ``(l) Generally Applicable Laws.--Nothing in this section shall be 
construed to affect the applicability of State laws generally 
applicable to persons or corporations.
    ``(m) Guaranteed Availability of Coverage to HIPAA Eligible 
Individuals.--To the extent that a health insurance issuer is offering 
coverage in a primary State that does not accommodate residents of 
secondary States or does not provide a working mechanism for residents 
of a secondary State, and the issuer is offering coverage under this 
part in such secondary State which has not adopted a qualified high 
risk pool as its acceptable alternative mechanism (as defined in 
section 2744(c)(2)), the issuer shall, with respect to any individual 
health insurance coverage offered in a secondary State under this part, 
comply with the guaranteed availability requirements for eligible 
individuals in section 2741.

``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY 
              SELL INTO SECONDARY STATES.

    ``A health insurance issuer may not offer, sell, or issue 
individual health insurance coverage in a secondary State if the State 
insurance commissioner does not use a risk-based capital formula for 
the determination of capital and surplus requirements for all health 
insurance issuers.

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    ``(a) Right to External Appeal.--A health insurance issuer may not 
offer, sell, or issue individual health insurance coverage in a 
secondary State under the provisions of this title unless--
            ``(1) both the secondary State and the primary State have 
        legislation or regulations in place establishing an independent 
        review process for individuals who are covered by individual 
        health insurance coverage, or
            ``(2) in any case in which the requirements of subparagraph 
        (A) are not met with respect to the either of such States, the 
        issuer provides an independent review mechanism substantially 
        identical (as determined by the applicable State authority of 
        such State) to that prescribed in the `Health Carrier External 
        Review Model Act' of the National Association of Insurance 
        Commissioners for all individuals who purchase insurance 
        coverage under the terms of this part, except that, under such 
        mechanism, the review is conducted by an independent medical 
        reviewer, or a panel of such reviewers, with respect to whom 
        the requirements of subsection (b) are met.
    ``(b) Qualifications of Independent Medical Reviewers.--In the case 
of any independent review mechanism referred to in subsection (a)(2)--
            ``(1) In general.--In referring a denial of a claim to an 
        independent medical reviewer, or to any panel of such 
        reviewers, to conduct independent medical review, the issuer 
        shall ensure that--
                    ``(A) each independent medical reviewer meets the 
                qualifications described in paragraphs (2) and (3);
                    ``(B) with respect to each review, each reviewer 
                meets the requirements of paragraph (4) and the 
                reviewer, or at least 1 reviewer on the panel, meets 
                the requirements described in paragraph (5); and
                    ``(C) compensation provided by the issuer to each 
                reviewer is consistent with paragraph (6).
            ``(2) Licensure and expertise.--Each independent medical 
        reviewer shall be a physician (allopathic or osteopathic) or 
        health care professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment under 
                review.
            ``(3) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer in a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (7));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the issuer, from 
                        serving as an independent medical reviewer if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the issuer 
                                and the enrollee (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the issuer and does 
                                not provide services exclusively or 
                                primarily to or on behalf of the 
                                issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        an independent medical reviewer merely on the 
                        basis of such affiliation if the affiliation is 
                        disclosed to the issuer and the enrollee (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        an independent medical reviewer from an entity 
                        if the compensation is provided consistent with 
                        paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--In a case involving treatment, 
                or the provision of items or services--
                            ``(i) by a physician, a reviewer shall be a 
                        practicing physician (allopathic or 
                        osteopathic) of the same or similar specialty, 
                        as a physician who, acting within the 
                        appropriate scope of practice within the State 
                        in which the service is provided or rendered, 
                        typically treats the condition, makes the 
                        diagnosis, or provides the type of treatment 
                        under review; or
                            ``(ii) by a non-physician health care 
                        professional, the reviewer, or at least 1 
                        member of the review panel, shall be a 
                        practicing non-physician health care 
                        professional of the same or similar specialty 
                        as the non-physician health care professional 
                        who, acting within the appropriate scope of 
                        practice within the State in which the service 
                        is provided or rendered, typically treats the 
                        condition, makes the diagnosis, or provides the 
                        type of treatment under review.
                    ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with respect to 
                an individual who is a physician or other health care 
                professional, that the individual provides health care 
                services to individual patients on average at least 2 
                days per week.
            ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a reviewer shall have expertise 
        under paragraph (2) in pediatrics.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by the issuer to an independent medical reviewer in 
        connection with a review under this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a coverage relating to an enrollee, any of the 
        following:
                    ``(A) The issuer involved, or any fiduciary, 
                officer, director, or employee of the issuer.
                    ``(B) The enrollee (or authorized representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the denial.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the denial are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the denial.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the 
                denial involved.
            ``(8) Definitions.--For purposes of this subsection:
                    ``(A) Enrollee.--The term `enrollee' means, with 
                respect to health insurance coverage offered by a 
                health insurance issuer, an individual enrolled with 
                the issuer to receive such coverage.
                    ``(B) Health care professional.--The term `health 
                care professional' means an individual who is licensed, 
                accredited, or certified under State law to provide 
                specified health care services and who is operating 
                within the scope of such licensure, accreditation, or 
                certification.

``SEC. 2799. ENFORCEMENT.

    ``(a) In General.--Subject to subsection (b), with respect to 
specific individual health insurance coverage the primary State for 
such coverage has sole jurisdiction to enforce the primary State's 
covered laws in the primary State and any secondary State.
    ``(b) Secondary State's Authority.--Nothing in subsection (a) shall 
be construed to affect the authority of a secondary State to enforce 
its laws as set forth in the exception specified in section 2796(b)(1).
    ``(c) Court Interpretation.--In reviewing action initiated by the 
applicable secondary State authority, the court of competent 
jurisdiction shall apply the covered laws of the primary State.
    ``(d) Notice of Compliance Failure.--In the case of individual 
health insurance coverage offered in a secondary State that fails to 
comply with the covered laws of the primary State, the applicable State 
authority of the secondary State may notify the applicable State 
authority of the primary State.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individual health insurance coverage offered, issued, or sold 
after the date that is one year after the date of the enactment of this 
Act.
    (c) GAO Ongoing Study and Reports.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct an ongoing study concerning the effect of the 
        amendment made by subsection (a) on--
                    (A) the number of uninsured and under-insured;
                    (B) the availability and cost of health insurance 
                policies for individuals with preexisting medical 
                conditions;
                    (C) the availability and cost of health insurance 
                policies generally;
                    (D) the elimination or reduction of different types 
                of benefits under health insurance policies offered in 
                different States; and
                    (E) cases of fraud or abuse relating to health 
                insurance coverage offered under such amendment and the 
                resolution of such cases.
            (2) Annual reports.--The Comptroller General shall submit 
        to Congress an annual report, after the end of each of the 5 
        years following the effective date of the amendment made by 
        subsection (a), on the ongoing study conducted under paragraph 
        (1).

              TITLE IV--IMPROVING HEALTH SAVINGS ACCOUNTS

SEC. 231. HSA FUNDS FOR PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS.

    (a) In General.--Subparagraph (C) of section 223(d)(2) of the 
Internal Revenue Code of 1986, as restored by section 2, is amended by 
striking ``or'' at the end of clause (iii), by striking the period at 
the end of clause (iv) and inserting ``, or'', and by adding at the end 
the following:
                            ``(v) a high deductible health plan if--
                                    ``(I) such plan is not offered in 
                                connection with a group health plan,
                                    ``(II) no portion of any premium 
                                (within the meaning of applicable 
                                premium under section 4980B(f)(4)) for 
                                such plan is excludable from gross 
                                income under section 106, and
                                    ``(III) the account beneficiary 
                                demonstrates, using procedures deemed 
                                appropriate by the Secretary, that 
                                after payment of the premium for such 
                                insurance the balance in the health 
                                savings account is at least twice the 
                                minimum deductible in effect under 
                                subsection (c)(2)(A)(i) which is 
                                applicable to such plan.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to premiums for a high deductible health plan for periods 
beginning after December 31, 2011.

SEC. 232. REQUIRING GREATER COORDINATION BETWEEN HDHP ADMINISTRATORS 
              AND HSA ACCOUNT ADMINISTRATORS SO THAT ENROLLEES CAN 
              ENROLL IN BOTH AT THE SAME TIME.

    The Secretary of the Treasury, through the issuance of regulations 
or other guidance, shall encourage administrators of health plans and 
trustees of health savings accounts to provide for simultaneous 
enrollment in high deductible health plans and setup of health savings 
accounts.

SEC. 233. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE 
              ESTABLISHMENT OF ACCOUNT.

    (a) In General.--Subsection (d) of section 223 of the Internal 
Revenue Code of 1986, as restored by section 2, is amended by 
redesignating paragraph (4) as paragraph (5) and by inserting after 
paragraph (3) the following new paragraph:
            ``(4) Certain medical expenses incurred before 
        establishment of account treated as qualified.--
                    ``(A) In general.--For purposes of paragraph (2), 
                an expense shall not fail to be treated as a qualified 
                medical expense solely because such expense was 
                incurred before the establishment of the health savings 
                account if such expense was incurred during the 60-day 
                period beginning on the date on which the high 
                deductible health plan is first effective.
                    ``(B) Special rules.--For purposes of subparagraph 
                (A)--
                            ``(i) an individual shall be treated as an 
                        eligible individual for any portion of a month 
                        for which the individual is described in 
                        subsection (c)(1), determined without regard to 
                        whether the individual is covered under a high 
                        deductible health plan on the 1st day of such 
                        month, and
                            ``(ii) the effective date of the health 
                        savings account is deemed to be the date on 
                        which the high deductible health plan is first 
                        effective after the date of the enactment of 
                        this paragraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to insurance purchased after the date of the enactment of 
this Act in taxable years beginning after such date.

                 TITLE V--TAX-RELATED HEALTH INCENTIVES

SEC. 241. SECA TAX DEDUCTION FOR HEALTH INSURANCE COSTS.

    (a) In General.--Subsection (l) of section 162 of the Internal 
Revenue Code of 1986 (relating to special rules for health insurance 
costs of self-employed individuals) is amended by striking paragraph 
(4) and by redesignating paragraph (5) as paragraph (4).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2010.

SEC. 242. DEDUCTION FOR QUALIFIED HEALTH INSURANCE COSTS OF 
              INDIVIDUALS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 224 as 
section 225 and by inserting after section 223 the following new 
section:

``SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the amount paid during the 
taxable year for coverage for the taxpayer, his spouse, and dependents 
under qualified health insurance.
    ``(b) Qualified Health Insurance.--For purposes of this section, 
the term `qualified health insurance' means insurance which constitutes 
medical care, other than insurance substantially all of the coverage of 
which is of excepted benefits described in section 9832(c).
    ``(c) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--Any amount 
        paid by a taxpayer for insurance to which subsection (a) 
        applies shall not be taken into account in computing the amount 
        allowable to the taxpayer as a deduction under section 162(l) 
        or 213(a). Any amount taken into account in determining the 
        credit allowed under section 35 shall not be taken into account 
        for purposes of this section.
            ``(2) Deduction not allowed for self-employment tax 
        purposes.--The deduction allowable by reason of this section 
        shall not be taken into account in determining an individual's 
        net earnings from self-employment (within the meaning of 
        section 1402(a)) for purposes of chapter 2.''.
    (b) Deduction Allowed in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by inserting 
before the last sentence the following new paragraph:
            ``(22) Costs of qualified health insurance.--The deduction 
        allowed by section 224.''.
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by redesignating the 
item relating to section 224 as an item relating to section 225 and 
inserting before such item the following new item:

``Sec. 224. Costs of qualified health insurance.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

           DIVISION C--ENACTING REAL MEDICAL LIABILITY REFORM

SEC. 301. CAP ON NON-ECONOMIC DAMAGES AGAINST HEALTH CARE 
              PRACTITIONERS.

    When an individual is injured or dies as the result of health care, 
a person entitled to non-economic damages may not recover, from the 
class of liable health care practitioners (regardless of the theory of 
liability), more than $250,000 such damages.

SEC. 302. CAP ON NON-ECONOMIC DAMAGES AGAINST HEALTH CARE INSTITUTIONS.

    When an individual is injured or dies as the result of health care, 
a person entitled to non-economic damages may not recover--
            (1) from any single liable health care institution 
        (regardless of the theory of liability), more than $250,000 
        such damages; and
            (2) from the class of liable health care institutions 
        (regardless of the theory of liability), more than $500,000 
        such damages.

SEC. 303. CAP, IN WRONGFUL DEATH CASES, ON TOTAL DAMAGES AGAINST ANY 
              SINGLE HEALTH CARE PRACTITIONER.

    (a) In General.--When an individual dies as the result of health 
care, a person entitled to damages may not recover, from any single 
liable health care practitioner (regardless of the theory of 
liability), more than $1,400,000 in total damages.
    (b) Total Damages Defined.--In this section, the term ``total 
damages'' includes compensatory damages, punitive damages, statutory 
damages, and any other type of damages.
    (c) Adjustment for Inflation.--For each calendar year after the 
calendar year of the enactment of this Act, the dollar amount referred 
to in subsection (a) shall be adjusted to reflect changes in the 
Consumer Price Index of the Bureau of Labor Statistics of the 
Department of Labor. The adjustment shall be based on the relationship 
between--
            (1) the Consumer Price Index data most recently published 
        as of January 1 of the calendar year of the enactment of this 
        Act; and
            (2) the Consumer Price Index data most recently published 
        as of January 1 of the calendar year concerned.
    (d) Applicability of Adjustment.--The dollar amount that applies to 
a recovery is the dollar amount for the calendar year during which the 
amount of the recovery is made final.

SEC. 304. LIMITATION OF INSURER LIABILITY WHEN INSURER REJECTS CERTAIN 
              SETTLEMENT OFFERS.

    In a civil action, to the extent the civil action seeks damages for 
the injury or death of an individual as the result of health care, when 
the insurer of a health care practitioner or health care institution 
rejects a reasonable settlement offer within policy limits, the insurer 
is not, by reason of that rejection, liable for damages in an amount 
that exceeds the liability of the insured.

SEC. 305. MANDATORY JURY INSTRUCTION ON CAP ON DAMAGES.

    In a civil action tried to a jury, to the extent the civil action 
seeks damages for the injury or death of an individual as the result of 
health care, the court shall instruct the jury that the jury is not to 
consider whether, or to what extent, a limitation on damages applies.

SEC. 306. DETERMINATION OF NEGLIGENCE; MANDATORY JURY INSTRUCTION.

    (a) In General.--When an individual is injured or dies as the 
result of health care, liability for negligence may not be based solely 
on a bad result.
    (b) Mandatory Jury Instruction.--In a civil action tried to a jury, 
to the extent the civil action seeks damages for the injury or death of 
an individual as the result of health care and alleges liability for 
negligence, the court shall instruct the jury as provided in subsection 
(a).

SEC. 307. EXPERT REPORTS REQUIRED TO BE SERVED IN CIVIL ACTIONS.

    (a) Service Required.--To the extent a pleading filed in a civil 
action seeks damages against a health care practitioner for the injury 
or death of an individual as the result of health care, the party 
filing the pleading shall, not later than 120 days after the date on 
which the pleading was filed, serve on each party against whom such 
damages are sought a qualified expert report.
    (b) Qualified Expert Report.--As used in subsection (a), a 
qualified expert report is a written report of a qualified health care 
expert that--
            (1) includes a curriculum vitae for that expert; and
            (2) sets forth a summary of the expert opinion of that 
        expert as to--
                    (A) the standard of care applicable to that 
                practitioner;
                    (B) how that practitioner failed to meet that 
                standard of care; and
                    (C) the causal relationship between that failure 
                and the injury or death of the individual.
    (c) Motion To Enforce.--A party not served as required by 
subsection (a) may move the court to enforce that subsection. On such a 
motion, the court--
            (1) shall dismiss, with prejudice, the pleading as it 
        relates to that party; and
            (2) shall award to that party the attorney fees reasonably 
        incurred by that party to respond to that pleading.
    (d) Use of Expert Report.--
            (1) In general.--Except as otherwise provided in this 
        section, a qualified expert report served under subsection (a) 
        may not, in that civil action--
                    (A) be offered by any party as evidence;
                    (B) be used by any party in discovery or any other 
                pretrial proceeding; or
                    (C) be referred to by any party at trial.
            (2) Violations.--
                    (A) By other party.--If paragraph (1) is violated 
                by a party other than the party who served the report, 
                the court shall, on motion of any party or on its own 
                motion, take such measures as the court considers 
                appropriate, which may include the imposition of 
                sanctions.
                    (B) By serving party.--If paragraph (1) is violated 
                by the party who served the report, paragraph (1) shall 
                no longer apply to any party.

SEC. 308. EXPERT OPINIONS RELATING TO PHYSICIANS MAY BE PROVIDED ONLY 
              BY ACTIVELY PRACTICING PHYSICIANS.

    (a) In General.--A physician-related opinion may be provided only 
by an actively practicing physician who is determined by the court to 
be qualified on the basis of training and experience to render that 
opinion.
    (b) Considerations Required.--In determining whether an actively 
practicing physician is qualified under subsection (a), the court 
shall, except on good cause shown, consider whether that physician is 
board-certified, or has other substantial training, in an area of 
medical practice relevant to the health care to which the opinion 
relates.
    (c) Definitions.--In this section:
            (1) The term ``actively practicing physician'' means an 
        individual who--
                    (A) is licensed to practice medicine in the United 
                States or, if the individual is a defendant providing a 
                physician-related opinion with respect to the health 
                care provided by that defendant, is a graduate of a 
                medical school accredited by the Liaison Committee on 
                Medical Education or the American Osteopathic 
                Association;
                    (B) is practicing medicine when the opinion is 
                rendered, or was practicing medicine when the health 
                care was provided; and
                    (C) has knowledge of the accepted standards of care 
                for the health care to which the opinion relates.
            (2) The term ``physician-related opinion'' means an expert 
        opinion as to any one or more of the following:
                    (A) The standard of care applicable to a physician.
                    (B) Whether a physician failed to meet such a 
                standard of care.
                    (C) Whether there was a causal relationship between 
                such a failure by a physician and the injury or death 
                of an individual.
            (3) The term ``practicing medicine'' includes training 
        residents or students at an accredited school of medicine or 
        osteopathy, and serving as a consulting physician to other 
        physicians who provide direct patient care.

SEC. 309. PAYMENT OF FUTURE DAMAGES ON PERIODIC OR ACCRUAL BASIS.

    (a) In General.--When future damages are awarded against a health 
care practitioner to a person for the injury or death of an individual 
as a result of health care, and the present value of those future 
damages is $100,000 or more, that health care practitioner may move 
that the court order payment on a periodic or accrual basis of those 
damages. On such a motion, the court--
            (1) shall order that payment be made on an accrual basis of 
        future damages described in subsection (b)(1); and
            (2) may order that payment be made on a periodic or accrual 
        basis of any other future damages that the court considers 
        appropriate.
    (b) Future Damages Defined.--In this section, the term ``future 
damages'' means--
            (1) the future costs of medical, health care, or custodial 
        services;
            (2) noneconomic damages, such as pain and suffering or loss 
        of consortium;
            (3) loss of future earnings; and
            (4) any other damages incurred after the award is made.

SEC. 310. UNANIMOUS JURY REQUIRED FOR PUNITIVE OR EXEMPLARY DAMAGES.

    When an individual is injured or dies as the result of health care, 
a jury may not award punitive or exemplary damages against a health 
care practitioner or health care institution unless the jury is 
unanimous with regard to both the liability of that party for such 
damages and the amount of the award of such damages.

SEC. 311. PROPORTIONATE LIABILITY.

    When an individual is injured or dies as the result of health care 
and a person is entitled to damages for that injury or death, each 
person responsible is liable only for a proportionate share of the 
total damages that directly corresponds to that person's proportionate 
share of the total responsibility.

SEC. 312. DEFENSE-INITIATED SETTLEMENT PROCESS.

    (a) In General.--In a civil action, to the extent the civil action 
seeks damages for the injury or death of an individual as the result of 
health care, a health care practitioner or health care institution 
against which such damages are sought may serve one or more qualified 
settlement offers under this section to a person seeking such damages. 
If the person seeking such damages does not accept such an offer, that 
person may thereafter serve one or more qualified settlement offers 
under this section to the party whose offer was not accepted.
    (b) Qualified Settlement Offer.--A qualified settlement offer under 
this section is an offer, in writing, to settle the matter as between 
the offeror and the offeree, which--
            (1) specifies that it is made under this section;
            (2) states the terms of settlement; and
            (3) states the deadline within which the offer must be 
        accepted.
    (c) Effect of Offer.--If the offeree of a qualified settlement 
offer does not accept that offer, and thereafter receives a judgment at 
trial that, as between the offeror and the offeree, is significantly 
less favorable than the terms of settlement in that offer, that offeree 
is responsible for those litigation costs reasonably incurred, after 
the deadline stated in the offer, by the offeror to respond to the 
claims of the offeree.
    (d) Litigation Costs Defined.--In this section, the term 
``litigation costs'' include court costs, filing fees, expert witness 
fees, attorney fees, and any other costs directly related to carrying 
out the litigation.
    (e) Significantly Less Favorable Defined.--For purposes of this 
section, a judgment is significantly less favorable than the terms of 
settlement if--
            (1) in the case of an offeree seeking damages, the 
        offeree's award at trial is less than 80 percent of the value 
        of the terms of settlement; and
            (2) in the case of an offeree against whom damages are 
        sought, the offeror's award at trial is more than 120 percent 
        of the value of the terms of settlement.

SEC. 313. STATUTE OF LIMITATIONS; STATUTE OF REPOSE.

    (a) Statute of Limitations.--When an individual is injured or dies 
as the result of health care, the statute of limitations shall be as 
follows:
            (1) Individuals of age 12 and over.--If the individual has 
        attained the age of 12 years, the claim must be brought 
        either--
                    (A) within 2 years after the negligence occurred; 
                or
                    (B) within 2 years after the health care on which 
                the claim is based is completed.
            (2) Individuals under age 12.--If the individual has not 
        attained the age of 12 years, the claim must be brought before 
        the individual attains the age of 14 years.
    (b) Statute of Repose.--When an individual is injured or dies as 
the result of health care, the statute of repose shall be as follows: 
The claim must be brought within 10 years after the act or omission on 
which the claim is based is completed.
    (c) Tolling.--
            (1) Statute of limitations.--The statute of limitations 
        required by subsection (a) may be tolled if applicable law so 
        provides, except that it may not be tolled on the basis of 
        minority.
            (2) Statute of repose.--The statute of repose required by 
        subsection (b) may not be tolled for any reason.

SEC. 314. LIMITATION ON LIABILITY FOR GOOD SAMARITANS PROVIDING 
              EMERGENCY HEALTH CARE.

    (a) Willful or Wanton Negligence Required.--A health care 
practitioner or health care institution that provides emergency health 
care on a Good Samaritan basis is not liable for damages caused by that 
care except for willful or wanton negligence or more culpable 
misconduct.
    (b) Good Samaritan Basis.--For purposes of this section, care is 
provided on a Good Samaritan basis if it is not provided for or in 
expectation of remuneration. Being entitled to remuneration is relevant 
to, but is not determinative of, whether it is provided for or in 
expectation of remuneration.

SEC. 315. DEFINITIONS.

    In this division:
            (1) Health care institution.--The term ``health care 
        institution'' includes institutions such as--
                    (A) an ambulatory surgical center;
                    (B) an assisted living facility;
                    (C) an emergency medical services provider;
                    (D) a home health agency;
                    (E) a hospice;
                    (F) a hospital;
                    (G) a hospital system;
                    (H) an intermediate care facility for the mentally 
                retarded;
                    (I) a nursing home; and
                    (J) an end stage renal disease facility.
            (2) Health care practitioner.--The term ``health care 
        practitioner'' includes a physician and a physician entity.
            (3) Physician entity.--The term ``physician entity'' 
        includes--
                    (A) a partnership or limited liability partnership 
                created by a group of physicians;
                    (B) a company created by physicians; and
                    (C) a nonprofit health corporation whose board is 
                composed of physicians.

         DIVISION D--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

SEC. 401. RULE OF CONSTRUCTION.

    Nothing in this Act shall be construed to interfere with the 
doctor-patient relationship or the practice of medicine.

SEC. 402. REPEAL OF FEDERAL COORDINATING COUNCIL FOR COMPARATIVE 
              EFFECTIVENESS RESEARCH.

    Effective on the date of the enactment of this Act, section 804 of 
the American Recovery and Reinvestment Act of 2009 is repealed.

      DIVISION E--INCENTIVIZING WELLNESS AND QUALITY IMPROVEMENTS

SEC. 501. INCENTIVES FOR PREVENTION AND WELLNESS PROGRAMS.

    (a) Employee Retirement Income Security Act of 1974 Limitation on 
Exception for Wellness Programs Under HIPAA Discrimination Rules.--
            (1) In general.--Section 702(b)(2) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1182(b)(2)), 
        as restored by section 2, is amended by adding after and below 
        subparagraph (B) the following:
        ``In applying subparagraph (B), a group health plan (or a 
        health insurance issuer with respect to health insurance 
        coverage) may vary premiums and cost-sharing by up to 50 
        percent of the value of the benefits under the plan (or 
        coverage) based on participation in a standards-based wellness 
        program.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to plan years beginning more than 1 year after the 
        date of the enactment of this Act.
    (b) Conforming Amendments to PHSA.--
            (1) Group market rules.--
                    (A) In general.--Section 2702(b)(2) of the Public 
                Health Service Act (42 U.S.C. 300gg-1(b)(2)), as 
                restored by section 2, is amended by adding after and 
                below subparagraph (B) the following:
        ``In applying subparagraph (B), a group health plan (or a 
        health insurance issuer with respect to health insurance 
        coverage) may vary premiums and cost-sharing by up to 50 
        percent of the value of the benefits under the plan (or 
        coverage) based on participation in a standards-based wellness 
        program.''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall apply to plan years beginning 
                more than 1 year after the date of the enactment of 
                this Act.
            (2) Individual market rules relating to guaranteed 
        availability.--
                    (A) In general.--Section 2741(f) of the Public 
                Health Service Act (42 U.S.C. 300gg-1(b)(2)), as 
                restored by section 2, is amended by adding after and 
                below paragraph (1) the following:
``In applying paragraph (2), a health insurance issuer may vary 
premiums and cost-sharing under health insurance coverage by up to 50 
percent of the value of the benefits under the coverage based on 
participation in a standards-based wellness program.''.
                    (B) Effective date.--The amendment made by 
                paragraph (1) shall apply to health insurance coverage 
                offered or renewed on and after the date that is 1 year 
                after the date of the enactment of this Act.
    (c) Conforming Amendments to IRC.--
            (1) In general.--Section 9802(b)(2) of the Internal Revenue 
        Code of 1986, as restored by section 2, is amended by adding 
        after and below subparagraph (B) the following:
        ``In applying subparagraph (B), a group health plan (or a 
        health insurance issuer with respect to health insurance 
        coverage) may vary premiums and cost-sharing by up to 50 
        percent of the value of the benefits under the plan (or 
        coverage) based on participation in a standards-based wellness 
        program.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to plan years beginning more than 1 year after the 
        date of the enactment of this Act.

                    DIVISION F--PROTECTING TAXPAYERS

SEC. 601. PERMANENTLY PROHIBITING TAXPAYER FUNDED ABORTIONS AND 
              ENSURING CONSCIENCE PROTECTIONS.

    Title 1 of the United States Code is amended by adding at the end 
the following new chapter:

  ``CHAPTER 4--PERMANENTLY PROHIBITING TAXPAYER FUNDED ABORTIONS AND 
                    ENSURING CONSCIENCE PROTECTIONS

``SEC. 301. PROHIBITION ON FUNDING FOR ABORTIONS.

    ``No funds authorized or appropriated by Federal law, and none of 
the funds in any trust fund to which funds are authorized or 
appropriated by Federal law, shall be expended for any abortion.

``SEC. 302. PROHIBITION ON FUNDING FOR HEALTH BENEFITS PLANS THAT COVER 
              ABORTION.

    ``None of the funds authorized or appropriated by Federal law, and 
none of the funds in any trust fund to which funds are authorized or 
appropriated by Federal law, shall be expended for a health benefits 
plan that includes coverage of abortion.

``SEC. 303. TREATMENT OF ABORTIONS RELATED TO RAPE, INCEST, OR 
              PRESERVING THE LIFE OF THE MOTHER.

    ``The limitations established in sections 301 and 302 shall not 
apply to an abortion--
            ``(1) if the pregnancy is the result of an act of rape or 
        incest; or
            ``(2) in the case where a woman suffers from a physical 
        disorder, physical injury, or physical illness that would, as 
        certified by a physician, place the woman in danger of death 
        unless an abortion is performed, including a life-endangering 
        physical condition caused by or arising from the pregnancy 
        itself.

``SEC. 304. CONSTRUCTION RELATING TO SUPPLEMENTAL COVERAGE.

    ``Nothing in this chapter shall be construed as prohibiting any 
individual, entity, or State or locality from purchasing separate 
supplemental abortion plan or coverage that includes abortion so long 
as such plan or coverage is paid for entirely using only funds not 
authorized or appropriated by Federal law and such plan or coverage 
shall not be purchased using matching funds required for a federally 
subsidized program, including a State's or locality's contribution of 
Medicaid matching funds.

``SEC. 305. CONSTRUCTION RELATING TO THE USE OF NON-FEDERAL FUNDS FOR 
              HEALTH COVERAGE.

    ``Nothing in this chapter shall be construed as restricting the 
ability of any managed care provider or other organization from 
offering abortion coverage or the ability of a State to contract 
separately with such a provider or organization for such coverage with 
funds not authorized or appropriated by Federal law and such plan or 
coverage shall not be purchased using matching funds required for a 
federally subsidized program, including a State's or locality's 
contribution of Medicaid matching funds.

``SEC. 306. NO GOVERNMENT DISCRIMINATION AGAINST CERTAIN HEALTH CARE 
              ENTITIES.

    ``(a) In General.--No funds authorized or appropriated by Federal 
law may be made available to a Federal agency or program, or to a State 
or local government, if such agency, program, or government subjects 
any institutional or individual health care entity to discrimination on 
the basis that the health care entity does not provide, pay for, 
provide coverage of, or refer for abortions.
    ``(b) Health Care Entity Defined.--For purposes of 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.''.

SEC. 602. IMPROVED ENFORCEMENT OF THE MEDICARE AND MEDICAID SECONDARY 
              PAYER PROVISIONS.

    (a) Medicare.--
            (1) In general.--The Secretary of Health and Human 
        Services, in coordination with the Inspector General of the 
        Department of Health and Human Services, shall provide through 
        the Coordination of Benefits Contractor for the identification 
        of instances where the Medicare program should be, but is not, 
        acting as a secondary payer to an individual's private health 
        benefits coverage under section 1862(b) of the Social Security 
        Act (42 U.S.C. 1395y(b)).
            (2) Updating procedures.--The Secretary shall update 
        procedures for identifying and resolving credit balance 
        situations which occur under the Medicare program when payment 
        under such title and from other health benefit plans exceed the 
        providers' charges or the allowed amount.
            (3) Report on improved enforcement.--Not later than 1 year 
        after the date of the enactment of this Act, the Secretary 
        shall submit a report to Congress on progress made in improved 
        enforcement of the Medicare secondary payer provisions, 
        including recoupment of credit balances.
    (b) Medicaid.--Section 1903 of the Social Security Act (42 U.S.C. 
1396b) is amended by adding at the end the following new subsection:
    ``(aa) Enforcement of Payer of Last Resort Provisions.--
            ``(1) Submission of state plan amendment.--Each State shall 
        submit, not later than 1 year after the date of the enactment 
        of this subsection, a State plan amendment that details how the 
        State will become fully compliant with the requirements of 
        section 1902(a)(25).
            ``(2) Bonus for compliance.--If a State submits a timely 
        State plan amendment under paragraph (1) that the Secretary 
        determines provides for full compliance of the State with the 
        requirements of section 1902(a)(25), the Secretary shall 
        provide for an additional payment to the State of $1,000,000. 
        If a State certifies, to the Secretary's satisfaction, that it 
        is already fully compliant with such requirements, such amount 
        shall be increased to $2,000,000.
            ``(3) Reduction for noncompliance.--If a State does not 
        submit such an amendment, the Secretary shall reduce the 
        Federal medical assistance percentage otherwise applicable 
        under this title by 1 percentage point until the State submits 
        such an amendment.
            ``(4) Ongoing reduction.--If at any time the Secretary 
        determines that a State is not in compliance with section 
        1902(a)(25), regardless of the status of the State's submission 
        of a State plan amendment under this subsection or previous 
        determinations of compliance such requirements, the Secretary 
        shall reduce the Federal medical assistance percentage 
        otherwise applicable under this title for the State by 1 
        percentage point during the period of non-compliance as 
        determined by the Secretary.''.

SEC. 603. STRENGTHEN MEDICARE PROVIDER ENROLLMENT STANDARDS AND 
              SAFEGUARDS.

    (a) Protecting Against the Fraudulent Use of Medicare Provider 
Numbers.--Subject to subsection (c)(2)--
            (1) Screening new providers.--As a condition of a provider 
        of services or a supplier, including durable medical equipment 
        suppliers and home health agencies, applying for the first time 
        for a provider number under the Medicare program under title 
        XVIII of the Social Security Act and before granting billing 
        privileges under such title, the Secretary of Health and Human 
        Services shall screen the provider or supplier for a criminal 
        background or other financial or operational irregularities 
        through fingerprinting, licensure checks, site-visits, other 
        database checks.
            (2) Application fees.--The Secretary shall impose an 
        application charge on such a provider or supplier in order to 
        cover the Secretary's costs in performing the screening 
        required under paragraph (1) and that is revenue neutral to the 
        Federal Government.
            (3) Provisional approval.--During an initial, provisional 
        period (specified by the Secretary) in which such a provider or 
        supplier has been issued such a number, the Secretary shall 
        provide enhanced oversight of the activities of such provider 
        or supplier under the Medicare program, such as through 
        prepayment review and payment limitations.
            (4) Penalties for false statements.--In the case of a 
        provider or supplier that makes a false statement in an 
        application for such a number, the Secretary may exclude the 
        provider or supplier from participation under the Medicare 
        program, or may impose a civil money penalty (in the amount 
        described in section 1128A(a)(4) of the Social Security Act), 
        in the same manner as the Secretary may impose such an 
        exclusion or penalty under sections 1128 and 1128A, 
        respectively, of such Act in the case of knowing presentation 
        of a false claim described in section 1128A(a)(1)(A) of such 
        Act.
            (5) Disclosure requirements.--With respect to approval of 
        such an application, the Secretary--
                    (A) shall require applicants to disclose previous 
                affiliation with enrolled entities that have 
                uncollected debt related to the Medicare or Medicaid 
                programs;
                    (B) may deny approval if the Secretary determines 
                that these affiliations pose undue risk to the Medicare 
                or Medicaid program, subject to an appeals process for 
                the applicant as determined by the Secretary; and
                    (C) may implement enhanced safeguards (such as 
                surety bonds).
    (b) Moratoria.--The Secretary of Health and Human Services may 
impose moratoria on approval of provider and supplier numbers under the 
Medicare program for new providers of services and suppliers as 
determined necessary to prevent or combat fraud a period of delay for 
any one applicant cannot exceed 30 days unless cause is shown by the 
Secretary.
    (c) Funding.--
            (1) In general.--There are authorized to be appropriated to 
        carry out this section such sums as may be necessary.
            (2) Condition.--The provisions of paragraphs (1) and (2) of 
        subsection (a) shall not apply unless and until funds are 
        appropriated to carry out such provisions.

SEC. 604. TRACKING BANNED PROVIDERS ACROSS STATE LINES.

    (a) Greater Coordination.--The Secretary of Health and Human 
Services shall provide for increased coordination between the 
Administrator of the Centers for Medicare & Medicaid Services (in this 
section referred to as ``CMS'') and its regional offices to ensure that 
providers of services and suppliers that have operated in one State and 
are excluded from participation in the Medicare program are unable to 
begin operation and participation in the Medicare program in another 
State.
    (b) Improved Information Systems.--
            (1) In general.--The Secretary shall improve information 
        systems to allow greater integration between databases under 
        the Medicare program so that--
                    (A) Medicare administrative contractors, fiscal 
                intermediaries, and carriers have immediate access to 
                information identifying providers and suppliers 
                excluded from participation in the Medicare and 
                Medicaid program and other Federal health care 
                programs; and
                    (B) such information can be shared across Federal 
                health care programs and agencies, including between 
                the Departments of Health and Human Services, the 
                Social Security Administration, the Department of 
                Veterans Affairs, the Department of Defense, the 
                Department of Justice, and the Office of Personnel 
                Management.
    (c) Medicare/Medicaid ``One PI'' Database.--The Secretary shall 
implement a database that includes claims and payment data for all 
components of the Medicare program and the Medicaid program.
    (d) Authorizing Expanded Data Matching.--Notwithstanding any 
provision of the Computer Matching and Privacy Protection Act of 1988 
to the contrary--
            (1) the Secretary and the Inspector General in the 
        Department of Health and Human Services may perform data 
        matching of data from the Medicare program with data from the 
        Medicaid program; and
            (2) the Commissioner of Social Security and the Secretary 
        may perform data matching of data of the Social Security 
        Administration with data from the Medicare and Medicaid 
        programs.
    (e) Consolidation of Databases.--The Secretary shall consolidate 
and expand into a centralized database for individuals and entities 
that have been excluded from Federal health care programs the 
Healthcare Integrity and Protection Data Bank, the National 
Practitioner Data Bank, the List of Excluded Individuals/Entities, and 
a national patient abuse/neglect registry.
    (f) Comprehensive Provider Database.--
            (1) Establishment.--The Secretary shall establish a 
        comprehensive database that includes information on providers 
        of services, suppliers, and related entities participating in 
        the Medicare program, the Medicaid program, or both. Such 
        database shall include, information on ownership and business 
        relationships, history of adverse actions, results of site 
        visits or other monitoring by any program.
            (2) Use.--Prior to issuing a provider or supplier number 
        for an entity under the Medicare program, the Secretary shall 
        obtain information on the entity from such database to assure 
        the entity qualifies for the issuance of such a number.
    (g) Comprehensive Sanctions Database.--The Secretary shall 
establish a comprehensive sanctions database on sanctions imposed on 
providers of services, suppliers, and related entities. Such database 
shall be overseen by the Inspector General of the Department of Health 
and Human Services and shall be linked to related databases maintained 
by State licensure boards and by Federal or State law enforcement 
agencies.
    (h) Access to Claims and Payment Databases.--The Secretary shall 
ensure that the Inspector General of the Department of Health and Human 
Services and Federal law enforcement agencies have direct access to all 
claims and payment databases of the Secretary under the Medicare or 
Medicaid programs.
    (i) Civil Money Penalties for Submission of Erroneous 
Information.--In the case of a provider of services, supplier, or other 
entity that submits erroneous information that serves as a basis for 
payment of any entity under the Medicare or Medicaid program, the 
Secretary may impose a civil money penalty of not to exceed $50,000 for 
each such erroneous submission. A civil money penalty under this 
subsection shall be imposed and collected in the same manner as a civil 
money penalty under subsection (a) of section 1128A of the Social 
Security Act is imposed and collected under that section.
                                 <all>
```