I 

112TH CONGRESS 

2D SESSION H. R. 4242 

To repeal the Patient Protection and Affordable Care Act, to amend the 

Public Health Service Act to provide individual and group market reforms to protect health insurance consumers, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 22, 2012 

Mr. HECK introduced the following bill; which was referred to the Committee 

on Energy and Commerce, and in addition to the Committees on Ways 

and Means, Education and the Workforce, the Judiciary, Natural Resources, Rules, House Administration, 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, 

to amend the Public Health Service Act to provide individual and group market reforms to protect health insurance consumers, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Ensuring Quality Health Care for All Americans Act of 

6 2012’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Repeal of PPACA. 

Sec. 3. Prohibiting discrimination based on health status. 

Sec. 4. Guaranteed renewability of coverage. 

Sec. 5. Prohibition of preexisting condition exclusions and other discrimination 

based on health status. 

Sec. 6. No lifetime or annual limits. 

Sec. 7. Prohibition on rescissions. 

Sec. 8. Extension of dependent coverage. 

Sec. 9. Application of group market reforms to ERISA and the Internal Revenue Code of 1986. 

Sec. 10. Catastrophic plan. 

Sec. 11. Grants for health insurance risk adjustment mechanisms. 

Sec. 12. Liability protections for health care providers. 

3 SEC. 2. REPEAL OF PPACA. 

4 (a) PPACA.—Public Law 111–148 is repealed, and 

5 the provisions of law amended or repealed by such Act 

6 are restored or revived as if such Act had not been en7 acted. 

8 (b) HCERA.—Title I and subtitle B of title II of the 

9 Health Care and Education Reconciliation Act of 2010 

10 (Public Law 111–152) are repealed, and the provisions of 

11 law amended or repealed by such title or subtitle, respec12 tively, are restored or revived as if such title and subtitle 

13 had not been enacted. 

14 SEC. 3. PROHIBITING DISCRIMINATION BASED ON HEALTH 

15 STATUS. 

16 (a) GROUP MARKET.—Subpart 3 of part A of title 

17 XXVII of the Public Health Service Act is amended by 

18 striking section 2711 and inserting the following: 


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1 ‘‘SEC. 2711. GUARANTEED AVAILABILITY OF COVERAGE. 

2 ‘‘(a) GUARANTEED ISSUANCE OF COVERAGE IN THE

3 GROUP MARKET.— 

4 ‘‘(1) IN GENERAL.—Subject to subsections (b) 

5 through (e), each health insurance issuer that offers 

6 health insurance coverage in the group market in a 

7 State shall accept every employer and every indi8 vidual in a group in the State that applies for such 

9 coverage. 

10 ‘‘(2) SPECIAL RULE FOR ASSOCIATIONS.—An 

11 association shall be treated as an employer for pur12 poses of this section if such association seeks to pro13 vide group health insurance coverage to not less 

14 than 200 qualified individuals. 

15 ‘‘(b) ENROLLMENT.— 

16 ‘‘(1) RESTRICTION.—A health insurance issuer 

17 described in subsection (a) may restrict enrollment 

18 in coverage described in such subsection to open or 

19 special enrollment periods. 

20 ‘‘(2) ESTABLISHMENT.—A health insurance 

21 issuer described in subsection (a) shall, in accord22 ance with the regulations promulgated under para23 graph (3), establish special enrollment periods for 

24 qualifying events (as such term is defined in section 

25 603 of the Employee Retirement Income Security 

26 Act of 1974). 


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1 ‘‘(3) SPECIAL RULES FOR ASSOCIATIONS.— 

2 ‘‘(A) QUALIFYING EVENTS.—For purposes 

3 of applying paragraph (2) to an association— 

4 ‘‘(i) the term ‘covered employee’ in 

5 section 603 of the Employee Retirement 

6 Income Security Act of 1974 shall include 

7 a qualified individual (as such term is de8 fined in section 2701(d)(2)(D)); 

9 ‘‘(ii) the term ‘employer’ shall include 

10 an association (as such term is defined in 

11 section 2701(d)(2)(A)); and 

12 ‘‘(iii) the term ‘termination (other 

13 than by reason of such employee’s gross 

14 misconduct), or reduction of hours, of the 

15 covered employee’s employment’ shall in16 clude the termination of membership to the 

17 association. 

18 ‘‘(B) ENROLLMENT.—With respect to 

19 health insurance coverage provided to an asso20 ciation under subsection (a)(2), a health insur21 ance issuer shall permit a qualified individual 

22 who is eligible, but not enrolled (or a dependent 

23 of such individual if the dependent is eligible, 

24 but not enrolled) for such coverage to enroll for 


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1 coverage under the terms of such coverage 

2 when any one of the following events occur: 

3 ‘‘(i) NEW MEMBERS AND EMPLOY4 EES.—A qualified individual, and any de5 pendent of such individual, may enroll dur6 ing the 30-day period following the end of 

7 the period described under section 

8 2701(d)(2)(D) that applies to such indi9 vidual. 

10 ‘‘(ii) ANNUAL ENROLLMENT.—A 

11 qualified individual, and any dependent of 

12 such individual, may enroll during the an13 nual enrollment period established under 

14 the terms of the coverage 

15 ‘‘(C) TERMINATION OF ENROLLMENT.— 

16 With respect to group health insurance cov17 erage provided by an association, a qualified in18 dividual or dependent who terminates enroll19 ment in such coverage may only re-enroll in 

20 such coverage during the annual enrollment pe21 riod described under subparagraph (B)(ii). 

22 ‘‘(D) DEFINITIONS.—For purposes of this 

23 section, the terms ‘association’ and ‘qualified 

24 individual’ have the meaning given such terms 

25 in section 2701(d)(2). 


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1 ‘‘(4) REGULATIONS.—The Secretary shall pro2 mulgate regulations with respect to enrollment peri3 ods under this subsection. 

4 ‘‘(c) SPECIAL RULES FOR NETWORK PLANS.— 

5 ‘‘(1) IN GENERAL.—In the case of a health in6 surance issuer that offers health insurance coverage 

7 in the group market in a State through a network 

8 plan, the issuer may— 

9 ‘‘(A) limit the employers that may apply 

10 for such coverage to those with eligible individ11 uals who live, work, or reside in the service area 

12 for such network plan; and 

13 ‘‘(B) within the service area of such plan, 

14 deny such coverage to such employers if the 

15 issuer has demonstrated, if required, to the ap16 plicable State authority that— 

17 ‘‘(i) it will not have the capacity to de18 liver services adequately to enrollees of any 

19 additional groups because of its obligations 

20 to existing group contract holders and en21 rollees; and 

22 ‘‘(ii) it is applying this paragraph uni23 formly to all employers without regard 

24 to— 


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1 ‘‘(I) the claims experience of 

2 those employers and their employees 

3 (and their dependents); or 

4 ‘‘(II) any health-status-related 

5 factor relating to such employees and 

6 dependents. 

7 ‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF

8 COVERAGE.—An issuer, upon denying health insur9 ance coverage in any service area in accordance with 

10 paragraph (1)(B), may not offer coverage in the 

11 group market within such service area for a period 

12 of 180 days after the date such coverage is denied. 

13 ‘‘(d) APPLICATION OF FINANCIAL CAPACITY LIM14 ITS.— 

15 ‘‘(1) IN GENERAL.—A health insurance issuer 

16 may deny health insurance coverage in the group if 

17 the issuer has demonstrated, if required, to the ap18 plicable State authority that— 

19 ‘‘(A) it does not have the financial reserves 

20 necessary to underwrite additional coverage; 

21 and 

22 ‘‘(B) it is applying this paragraph uni23 formly to all employers and individuals in the 

24 group market in the State— 


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1 ‘‘(i) in a manner that is consistent 

2 with applicable State law; and 

3 ‘‘(ii) without regard to— 

4 ‘‘(I) the claims experience of 

5 those individuals, employers, and their 

6 employees (and their dependents); or 

7 ‘‘(II) any health-status-related 

8 factor relating to such individuals, 

9 employees, and dependents. 

10 ‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF

11 COVERAGE.—A health insurance issuer upon denying 

12 health insurance coverage in connection with group 

13 health plans in accordance with paragraph (1) in a 

14 State may not offer coverage in connection with 

15 group health plans in the group market in the State 

16 for a period of 180 days after the date such cov17 erage is denied or until the issuer has demonstrated 

18 to the applicable State authority, if required under 

19 applicable State law, that the issuer has sufficient fi20 nancial reserves to underwrite additional coverage, 

21 whichever is later. An applicable State authority 

22 may provide for the application of this subsection on 

23 a service-area-specific basis.’’. 


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1 (b) INDIVIDUAL MARKET.—Subpart 1 of part B of 

2 title XXVII of the Public Health Service Act is amended 

3 by striking section 2741 and inserting the following: 

4 ‘‘SEC. 2741. GUARANTEED AVAILABILITY OF COVERAGE. 

5 ‘‘The provisions of section 2711 (other than sub6 section (a)(2) and subsection (b)(3)) shall apply to health 

7 insurance coverage offered to individuals by a health in8 surance issuer in the individual market in the same man9 ner as such provisions apply to health insurance coverage 

10 offered to employers by a health insurance issuer in con11 nection with health insurance coverage in the group mar12 ket. For purposes of this section, the Secretary shall treat 

13 any reference of the word ‘employer’ in such section as 

14 a reference to the term ‘individual’.’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall be effective for plan years beginning on 

17 or after January 1, 2014. 

18 SEC. 4. GUARANTEED RENEWABILITY OF COVERAGE. 

19 (a) GROUP MARKET.—Section 2712 of the Public 

20 Health Service Act is amended— 

21 (1) in subsection (a)— 

22 (A) by inserting ‘‘, including coverage of23 fered’’ before ‘‘in connection with a group 

24 health plan’’; and 


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1 (B) by inserting ‘‘employer or other’’ be2 fore ‘‘plan sponsor of the plan’’; 

3 (2) in subsection (b)— 

4 (A) in the matter before paragraph (1), by 

5 striking ‘‘health insurance coverage in connec6 tion with a group health plan in the small or 

7 large group market’’ and insert ‘‘such health in8 surance coverage’’; and 

9 (B) in paragraph (6) by striking ‘‘ one or 

10 more bona fide associations’’ and inserting ‘‘one 

11 or more associations (as such term is defined in 

12 section 2701(d)(2)(A))’’; 

13 (3) in subsection (c)(1)(B), by striking ‘‘to a 

14 group health plan’’; 

15 (4) in subsection (d)— 

16 (A) in matter before paragraph (1), by 

17 striking ‘‘to a group health plan’’; and 

18 (B) in paragraph (2), by striking ‘‘bona 

19 fide associations’’ and inserting ‘‘associations 

20 (as such term is defined in section 

21 2701(d)(2)(A))’’; and 

22 (5) in subsection (e), by inserting ‘‘(as such 

23 term is defined in section 2701(d)(2)(A))’’ after 

24 ‘‘one or more associations’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall be effective for plan years beginning on 

3 or after January 1, 2014. 

4 SEC. 5. PROHIBITION OF PREEXISTING CONDITION EXCLU5 SIONS AND OTHER DISCRIMINATION BASED 

6 ON HEALTH STATUS. 

7 (a) GROUP MARKET.—Subpart 1 of part A of title 

8 XXVII of the Public Health Service Act (42 U.S.C. 

9 300gg) is amended by striking section 2701 and inserting 

10 the following: 

11 ‘‘SEC. 2701. PROHIBITION OF PREEXISTING CONDITION EX12 CLUSIONS AND OTHER DISCRIMINATION 

13 BASED ON HEALTH STATUS. 

14 ‘‘(a) IN GENERAL.—A group health plan or a health 

15 insurance issuer offering group health insurance coverage 

16 may not impose any preexisting condition exclusion with 

17 respect to such plan or coverage. 

18 ‘‘(b) DEFINITIONS.—For purposes of this part: 

19 ‘‘(1) PREEXISTING CONDITION EXCLUSION.— 

20 ‘‘(A) IN GENERAL.—The term ‘preexisting 

21 condition exclusion’ means, with respect to a 

22 group health plan or health insurance coverage, 

23 a limitation or exclusion of benefits relating to 

24 a condition based on the fact that the condition 

25 was present before the date of enrollment in 


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1 such plan or for such coverage, whether or not 

2 any medical advice, diagnosis, care, or treat3 ment was recommended or received before such 

4 date. 

5 ‘‘(B) TREATMENT OF GENETIC INFORMA6 TION.—Genetic information shall not be treated 

7 as a preexisting condition in the absence of a 

8 diagnosis of the condition related to such infor9 mation. 

10 ‘‘(2) DATE OF ENROLLMENT.—The term ‘date 

11 of enrollment’ means, with respect to an individual 

12 covered under a group health plan or health insur13 ance coverage, the date of enrollment of the indi14 vidual in the plan or coverage or, if earlier, the first 

15 day of the waiting period for such enrollment. 

16 ‘‘(3) WAITING PERIOD.—The term ‘waiting pe17 riod’ means, with respect to a group health plan and 

18 an individual who is a potential participant or bene19 ficiary in the plan, the period that must pass with 

20 respect to the individual before the individual is eli21 gible to be covered for benefits under the terms of 

22 the plan. 

23 ‘‘(c) SPECIAL ENROLLMENT PERIODS.— 

24 ‘‘(1) INDIVIDUALS LOSING OTHER COVERAGE.— 

25 A group health plan, and a health insurance issuer 


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1 offering group health insurance coverage in connec2 tion with a group health plan, shall permit an em3 ployee who is eligible, but not enrolled, for coverage 

4 under the terms of the plan (or a dependent of such 

5 an employee if the dependent is eligible, but not en6 rolled, for coverage under such terms) to enroll for 

7 coverage under the terms of the plan if each of the 

8 following conditions is met: 

9 ‘‘(A) The employee or dependent was cov10 ered under a group health plan or had health 

11 insurance coverage at the time coverage was 

12 previously offered to the employee or dependent. 

13 ‘‘(B) The employee stated in writing at 

14 such time that coverage under a group health 

15 plan or health insurance coverage was the rea16 son for declining enrollment, but only if the 

17 plan sponsor or issuer (if applicable) required 

18 such a statement at such time and provided the 

19 employee with notice of such requirement (and 

20 the consequences of such requirement) at such 

21 time. 

22 ‘‘(C) The employee’s or dependent’s cov23 erage described in subparagraph (A)— 


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1 ‘‘(i) was under a COBRA continu2 ation provision and the coverage under 

3 such provision was exhausted; or 

4 ‘‘(ii) was not under such a provision 

5 and either the coverage was terminated as 

6 a result of loss of eligibility for the cov7 erage (including as a result of legal separa8 tion, divorce, death, termination of employ9 ment, or reduction in the number of hours 

10 of employment) or employer contributions 

11 toward such coverage were terminated. 

12 ‘‘(D) Under the terms of the plan, the em13 ployee requests such enrollment not later than 

14 30 days after the date of exhaustion of coverage 

15 described in subparagraph (C)(i) or termination 

16 of coverage or employer contribution described 

17 in subparagraph (C)(ii). 

18 ‘‘(2) FOR DEPENDENT BENEFICIARIES.— 

19 ‘‘(A) IN GENERAL.—If— 

20 ‘‘(i) a group health plan makes cov21 erage available with respect to a dependent 

22 of an individual; 

23 ‘‘(ii) the individual is a participant 

24 under the plan (or has met any waiting pe25 riod applicable to becoming a participant 


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1 under the plan and is eligible to be enrolled 

2 under the plan but for a failure to enroll 

3 during a previous enrollment period); and 

4 ‘‘(iii) a person becomes such a de5 pendent of the individual through mar6 riage, birth, or adoption or placement for 

7 adoption, 

8 the group health plan shall provide for a de9 pendent special enrollment period described in 

10 subparagraph (B) during which the person (or, 

11 if not otherwise enrolled, the individual) may be 

12 enrolled under the plan as a dependent of the 

13 individual, and in the case of the birth or adop14 tion of a child, the spouse of the individual may 

15 be enrolled as a dependent of the individual if 

16 such spouse is otherwise eligible for coverage. 

17 ‘‘(B) DEPENDENT SPECIAL ENROLLMENT

18 PERIOD.—A dependent special enrollment pe19 riod under this subparagraph shall be a period 

20 of not less than 30 days and shall begin on the 

21 later of— 

22 ‘‘(i) the date dependent coverage is 

23 made available; or 

24 ‘‘(ii) the date of the marriage, birth, 

25 or adoption or placement for adoption (as 


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1 the case may be) described in subpara2 graph (A)(iii). 

3 ‘‘(C) NO WAITING PERIOD.—If an indi4 vidual seeks to enroll a dependent during the 

5 first 30 days of such a dependent special enroll6 ment period, the coverage of the dependent 

7 shall become effective— 

8 ‘‘(i) in the case of marriage, not later 

9 than the first day of the first month begin10 ning after the date the completed request 

11 for enrollment is received; 

12 ‘‘(ii) in the case of a dependent’s 

13 birth, as of the date of such birth; or 

14 ‘‘(iii) in the case of a dependent’s 

15 adoption or placement for adoption, the 

16 date of such adoption or placement for 

17 adoption. 

18 ‘‘(3) SPECIAL RULES FOR APPLICATION IN CASE

19 OF MEDICAID AND CHIP.— 

20 ‘‘(A) IN GENERAL.—A group health plan, 

21 and a health insurance issuer offering group 

22 health insurance coverage in connection with a 

23 group health plan, shall permit an employee 

24 who is eligible, but not enrolled, for coverage 

25 under the terms of the plan (or a dependent of 


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1 such an employee if the dependent is eligible, 

2 but not enrolled, for coverage under such 

3 terms) to enroll for coverage under the terms of 

4 the plan or coverage if either of the following 

5 conditions is met: 

6 ‘‘(i) TERMINATION OF MEDICAID OR

7 CHIP COVERAGE.—The employee or de8 pendent is covered under a Medicaid plan 

9 under title XIX of the Social Security Act 

10 or under a State child health plan under 

11 title XXI of such Act and coverage of the 

12 employee or dependent under such a plan 

13 is terminated as a result of loss of eligi14 bility for such coverage and the employee 

15 requests coverage under the group health 

16 plan (or health insurance coverage) not 

17 later than 60 days after the date of termi18 nation of such coverage. 

19 ‘‘(ii) ELIGIBILITY FOR EMPLOYMENT

20 ASSISTANCE UNDER MEDICAID OR CHIP.— 

21 The employee or dependent becomes eligi22 ble for assistance, with respect to coverage 

23 under the group health plan or health in24 surance coverage, under such Medicaid 

25 plan or State child health plan (including 


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1 under any waiver or demonstration project 

2 conducted under or in relation to such a 

3 plan), if the employee requests coverage 

4 under the group health plan or health in5 surance coverage not later than 60 days 

6 after the date the employee or dependent is 

7 determined to be eligible for such assist8 ance. 

9 ‘‘(B) COORDINATION WITH MEDICAID AND

10 CHIP.— 

11 ‘‘(i) OUTREACH TO EMPLOYEES RE12 GARDING AVAILABILITY OF MEDICAID AND

13 CHIP COVERAGE.— 

14 ‘‘(I) IN GENERAL.—Each em15 ployer that maintains a group health 

16 plan in a State that provides medical 

17 assistance under a State Medicaid 

18 plan under title XIX of the Social Se19 curity Act, or child health assistance 

20 under a State child health plan under 

21 title XXI of such Act, in the form of 

22 premium assistance for the purchase 

23 of coverage under a group health 

24 plan, shall provide to each employee a 

25 written notice informing the employee 


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1 of potential opportunities then cur2 rently available in the State in which 

3 the employee resides for premium as4 sistance under such plans for health 

5 coverage of the employee or the em6 ployee’s dependents. For purposes of 

7 compliance with this subclause, the 

8 employer may use any State-specific 

9 model notice developed in accordance 

10 with section 701(f)(3)(B)(i)(II) of the 

11 Employee Retirement Income Security 

12 Act of 1974 (29 U.S.C. 

13 1181(f)(3)(B)(i)(II)). 

14 ‘‘(II) OPTION TO PROVIDE CON15 CURRENT WITH PROVISION OF PLAN

16 MATERIALS TO EMPLOYEE.—An em17 ployer may provide the model notice 

18 applicable to the State in which an 

19 employee resides concurrent with the 

20 furnishing of materials notifying the 

21 employee of health plan eligibility, 

22 concurrent with materials provided to 

23 the employee in connection with an 

24 open season or election process con25 ducted under the plan, or concurrent 


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1 with the furnishing of the summary 

2 plan description as provided in section 

3 104(b) of the Employee Retirement 

4 Income Security Act of 1974. 

5 ‘‘(ii) DISCLOSURE ABOUT GROUP

6 HEALTH PLAN BENEFITS TO STATES FOR

7 MEDICAID- AND CHIP- ELIGIBLE INDIVID8 UALS.—In the case of an enrollee in a 

9 group health plan who is covered under a 

10 Medicaid plan of a State under title XIX 

11 of the Social Security Act or under a State 

12 child health plan under title XXI of such 

13 Act, the plan administrator of the group 

14 health plan shall disclose to the State, 

15 upon request, information about the bene16 fits available under the group health plan 

17 in sufficient specificity, as determined 

18 under regulations of the Secretary of 

19 Health and Human Services in consulta20 tion with the Secretary that require use of 

21 the model coverage coordination disclosure 

22 form developed under section 311(b)(1)(C) 

23 of the Children’s Health Insurance Reau24 thorization Act of 2009, so as to permit 

25 the State to establish (under paragraph 


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1 (2)(B), (3), or (10) of section 2105(c) of 

2 the Social Security Act or otherwise) the 

3 cost effectiveness of the State providing 

4 medical or child health assistance through 

5 premium assistance for the purchase of 

6 coverage under such group health plan and 

7 in order for the State to provide supple8 mental benefits required under paragraph 

9 (10)(E) of such section or other authority. 

10 ‘‘(d) APPLICATION TO ASSOCIATION PLANS.— 

11 ‘‘(1) IN GENERAL.—A group health plan or 

12 health insurance issuer that provides coverage to an 

13 association as required under section 2711(a)(2) 

14 shall accept every qualified individual that the asso15 ciation seeks health insurance coverage for, without 

16 regard to the health status of such individual. 

17 ‘‘(2) DEFINITIONS RELATED TO ASSOCIA18 TIONS.—For purposes of this subsection: 

19 ‘‘(A) ASSOCIATION.—The term ‘associa20 tion’ means an association that— 

21 ‘‘(i) has a constitution and bylaws; 

22 ‘‘(ii) is determined by the Secretary to 

23 be an association which is operating in 

24 good faith for a primary purpose other 

25 than that of obtaining insurance; and 


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1 ‘‘(iii) has been in existence for a pe2 riod of at least 5 years. 

3 ‘‘(B) DEPENDENT.—The term ‘dependent’, 

4 with respect to a qualified individual, has the 

5 meaning given such term in section 2714, with 

6 respect to a policy holder. 

7 ‘‘(C) QUALIFIED ACTUARY.—The term 

8 ‘qualified actuary’ means a member in good 

9 standing of the American Academy of Actu10 aries, or a successor organization approved by 

11 the Secretary. 

12 ‘‘(D) QUALIFIED INDIVIDUALS.—The term 

13 ‘qualified individual’ means, with respect to an 

14 association, an individual who meets any of the 

15 following: 

16 ‘‘(i) A member of the association who 

17 has been such a member for a period of at 

18 least 30 days. 

19 ‘‘(ii) An employee of such member 

20 who has been employed by such member 

21 for a period of at least 30 days. 

22 ‘‘(iii) An employee of the association 

23 who has been employed by the association 

24 for a period of at least 30 days.’’. 


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1 (b) INDIVIDUAL MARKET.—Subpart 1 of part B of 

2 title XXVII of the Public Health Service Act is amended 

3 by adding at the end the following: 

4 ‘‘SEC. 2746. PROHIBITION OF PREEXISTING CONDITION EX5 CLUSIONS OR OTHER DISCRIMINATION 

6 BASED ON HEALTH STATUS. 

7 ‘‘The provisions of section 2701 (other than subpara8 graphs (A)(ii) and (B) of subsection (c)(3)) shall apply 

9 to health insurance coverage offered to individuals by a 

10 health insurance issuer in the individual market in the 

11 same manner as it applies to health insurance coverage 

12 offered by a health insurance issuer in the group market.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall be effective for plan years beginning on 

15 or after January 1, 2014, except, to the extent such 

16 amendments apply to enrollees who are under 19 years 

17 of age, such amendments shall become effective for plan 

18 years beginning on or after 6 months after the date of 

19 enactment of this Act. 

20 SEC. 6. NO LIFETIME OR ANNUAL LIMITS. 

21 (a) GROUP MARKET.—Subpart 2 of part A of title 

22 XXVII of the Public Health Service Act is amended by 

23 adding at the end the following: 


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1 ‘‘SEC. 2708. NO LIFETIME OR ANNUAL LIMITS. 

2 ‘‘(a) IN GENERAL.—A group health plan and a health 

3 insurance issuer offering group health insurance coverage 

4 may not establish— 

5 ‘‘(1) lifetime limits on the dollar value of bene6 fits for any participant or beneficiary; or 

7 ‘‘(2) unreasonable annual limits (within the 

8 meaning of section 223 of the Internal Revenue 

9 Code of 1986) on the dollar value of benefits for any 

10 participant or beneficiary. 

11 ‘‘(b) PER BENEFICIARY LIMITS.—A group health 

12 plan or health insurance coverage may not place annual 

13 or lifetime per beneficiary limits on specific covered bene14 fits unless such limits are otherwise permitted under Fed15 eral or State law.’’. 

16 (b) INDIVIDUAL MARKET.—Subpart 2 of part B of 

17 title XXVII of the Public Health Service Act is amended 

18 by adding at the end the following: 

19 ‘‘SEC. 2754. NO LIFETIME OR ANNUAL LIMITS. 

20 ‘‘The provisions of section 2708 shall apply to health 

21 insurance coverage offered to individuals by a health in22 surance issuer in the individual market in the same man23 ner as it applies to health insurance coverage offered by 

24 a health insurance issuer in the group market.’’. 


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1 (c) EFFECTIVE DATE.—The amendment made by 

2 this section shall be effective for plan years beginning on 

3 or after 6 months after the date of enactment of this Act. 

4 SEC. 7. PROHIBITION ON RESCISSIONS. 

5 (a) GROUP MARKET.—Subpart 1 of part A of title 

6 XXVII of the Public Health Service Act is amended by 

7 adding at the end the following: 

8 ‘‘SEC. 2703. PROHIBITION ON RESCISSIONS. 

9 ‘‘A group health plan and a health insurance issuer 

10 offering group health insurance coverage shall not rescind 

11 such plan or coverage with respect to an enrollee once the 

12 enrollee is covered under such plan or coverage involved, 

13 except that this section shall not apply to a covered indi14 vidual who has performed an act or practice that con15 stitutes fraud or makes an intentional misrepresentation 

16 of material fact as prohibited by the terms of the plan 

17 or coverage. Such plan or coverage may not be cancelled 

18 except with prior notice to the enrollee, and only as per19 mitted under section 2712(b).’’. 

20 (b) INDIVIDUAL MARKET.—Subpart 1 of part B of 

21 title XXVII of the Public Health Service Act is amended 

22 by adding at the end the following: 

23 ‘‘SEC. 2747. PROHIBITION ON RESCISSIONS. 

24 ‘‘The provisions of section 2703 shall apply to health 

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1 surance issuer in the individual market in the same man2 ner as it applies to health insurance coverage offered by 

3 a health insurance issuer in the group market.’’. 

4 (c) EFFECTIVE DATE.—The amendment made by 

5 this section shall be effective for plan years beginning on 

6 or after 6 months after the date of enactment of this Act. 

7 SEC. 8. EXTENSION OF DEPENDENT COVERAGE. 

8 (a) GROUP MARKET.— 

9 (1) IN GENERAL.—Subpart 1 of part A of title 

10 XXVII of the Public Health Service Act is amended 

11 by adding at the end: 

12 ‘‘SEC. 2703A. EXTENSION OF DEPENDENT COVERAGE. 

13 ‘‘(a) IN GENERAL.—A group health plan and a health 

14 insurance issuer offering group health insurance coverage 

15 that provides dependent coverage of children shall con16 tinue to make such coverage available for such a depend17 ent after such dependent turns 18 years of age until the 

18 first of the following events occurs: 

19 ‘‘(1) The dependent turns 26 years of age. 

20 ‘‘(2) The dependent marries. 

21 ‘‘(3) Subject to subsection (c), the dependent no 

22 longer resides in the home of— 

23 ‘‘(A) the policy holder through which such 

24 dependent is eligible for dependent coverage; or 


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1 ‘‘(B) in the case that the policy holder 

2 through which such dependent is eligible for de3 pendent coverage provides such coverage subject 

4 to an order to provide child support, the de5 pendent’s parent or legal guardian. 

6 ‘‘(b) EXCEPTION FOR COLLEGE STUDENTS.—Para7 graph (3) of subsection (a) shall not apply to a dependent 

8 for any period of time during which such dependent is en9 rolled as a full-time student at a postsecondary edu10 cational institution (including an institution of higher edu11 cation as defined in section 102 of the Higher Education 

12 Act of 1965). 

13 ‘‘(c) LIMITATION.—Nothing in this section shall re14 quire a plan or an issuer described in subsection (a) to 

15 make coverage available for a child of an individual receiv16 ing dependent coverage pursuant to this section. 

17 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec18 tion shall be construed to modify the definition of ‘depend19 ent’ as used in the Internal Revenue Code of 1986 with 

20 respect to the tax treatment of the cost of coverage.’’. 

21 (2) REGULATIONS.—Not later than 6 months 

22 after the date of enactment of this Act, the Sec23 retary shall promulgate regulations to define the de24 pendents to which coverage shall be made available 


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1 under section 2703A of the Public Health Service 

2 Act, as added by paragraph (1). 

3 (b) INDIVIDUAL MARKET.—Subpart 1 of part B of 

4 title XXVII of the Public Health Service Act is amended 

5 by adding at the end the following: 

6 ‘‘SEC. 2748. EXTENSION OF DEPENDENT COVERAGE. 

7 ‘‘The provisions of section 2703A shall apply to 

8 health insurance coverage offered to individuals by a 

9 health insurance issuer in the individual market in the 

10 same manner as it applies to health insurance coverage 

11 offered by a health insurance issuer in the group market.’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall be effective for plan years beginning on 

14 or after 6 months after the date of enactment of this Act. 

15 SEC. 9. APPLICATION OF GROUP MARKET REFORMS TO 

16 ERISA AND THE INTERNAL REVENUE CODE 

17 OF 1986. 

18 (a) ERISA.— 

19 (1) IN GENERAL.—Subpart A of title VII of the 

20 Employee Retirement Income Security Act of 1974 

21 is amended— 

22 (A) by striking sections 701 and 703; and 

23 (B) by inserting before section 702 the fol24 lowing: 


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1 ‘‘SEC. 701. APPLICATION OF CERTAIN PHSA REQUIRE2 MENTS. 

3 ‘‘(a) IN GENERAL.—Sections 2701, 2703, 2703A, 

4 2708, 2711, and 2712 of the Public Health Service Act 

5 shall apply to group health plans, and health insurance 

6 issuers providing health insurance coverage in connection 

7 with group health plans, as if included in this subpart. 

8 ‘‘(b) CONFLICT.—To the extent that any provision of 

9 this part conflicts with a provision of any section of the 

10 Public Health Service Act listed in subsection (a) with re11 spect to group health plans, or health insurance issuers 

12 providing health insurance coverage in connection with 

13 group health plans, the provisions of such sections shall 

14 apply.’’. 

15 (2) CONFORMING AMENDMENT.—The table of 

16 contents in section 1 of such Act is amended— 

17 (A) by striking the item related to section 

18 701 and inserting ‘‘Sec. 701. Application of cer19 tain PHSA requirements.’’; and 

20 (B) by striking the item related to section 

21 703. 

22 (b) INTERNAL REVENUE CODE OF 1986.—Sub23 chapter A of chapter 100 of the Internal Revenue Code 

24 of 1986 (relating to group health plan requirements) is 

25 amended— 

26 (1) by striking sections 9801 and 9803; and 


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1 (2) by inserting before section 9802 the fol2 lowing: 

3 ‘‘SEC. 9801. APPLICATION OF CERTAIN PHSA REQUIRE4 MENTS. 

5 ‘‘(a) IN GENERAL.—Sections 2701, 2703, 2703A, 

6 2708, 2711, and 2712 of the Public Health Service Act 

7 shall apply to group health plans, and health insurance 

8 issuers providing health insurance coverage in connection 

9 with group health plans, as if included in this subchapter. 

10 ‘‘(b) CONFLICT.—To the extent that any provision of 

11 this subchapter conflicts with a provision of any section 

12 of the Public Health Service Act listed in subsection (a) 

13 with respect to group health plans, or health insurance 

14 issuers providing health insurance coverage in connection 

15 with group health plans, the provisions of such sections 

16 shall apply.’’. 

17 SEC. 10. CATASTROPHIC PLAN. 

18 (a) IN GENERAL.—Subpart 1 of part B of title 

19 XXVII of the Public Health Service Act is amended by 

20 adding at the end the following: 

21 ‘‘SEC. 2749. CATASTROPHIC PLAN. 

22 ‘‘(a) IN GENERAL.—Each health insurance issuer 

23 that offers health insurance coverage in the individual 

24 market in a State shall offer a catastrophic plan in such 

25 State in such market. 


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1 ‘‘(b) COVERAGE REQUIREMENTS.—To meet the re2 quirements of this section, a catastrophic plan must pro3 vide for the essential health benefits, as defined by the 

4 Secretary under subsection (c). 

5 ‘‘(c) ESSENTIAL HEALTH BENEFITS.—The Sec6 retary shall define the essential health benefits, except 

7 that such benefits shall include— 

8 ‘‘(1) coverage for at least three primary care 

9 visits during a plan year; and 

10 ‘‘(2) at least the following general categories 

11 and the items and services covered within the cat12 egories: 

13 ‘‘(A) Ambulatory patient services. 

14 ‘‘(B) Emergency services. 

15 ‘‘(C) Hospitalization. 

16 ‘‘(D) Maternity and newborn care. 

17 ‘‘(E) Mental health and substance use dis18 order services, including behavioral health treat19 ment. 

20 ‘‘(F) Prescription drugs. 

21 ‘‘(G) Rehabilitative and habilitative serv22 ices and devices. 

23 ‘‘(H) Laboratory services. 

24 ‘‘(I) Preventive and wellness services and 

25 chronic disease management. 


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1 ‘‘(J) Pediatric services, including oral and 

2 vision care. 

3 ‘‘(d) RESTRICTION TO INDIVIDUAL MARKET.—If a 

4 health insurance issuer offers a health plan described in 

5 this section, the issuer may only offer the plan in the indi6 vidual market.’’. 

7 (b) EFFECTIVE DATE.—This section shall be effec8 tive for plan years beginning on or after 6 months after 

9 the date of enactment of this Act. 

10 SEC. 11. GRANTS FOR HEALTH INSURANCE RISK ADJUST11 MENT MECHANISMS. 

12 (a) IN GENERAL.—The Secretary of Health and 

13 Human Services shall make grants to States for planning 

14 for the establishment and implementation of health insur15 ance risk adjustment mechanisms. 

16 (b) AMOUNT.— 

17 (1) IN GENERAL.—The Secretary shall deter18 mine the amount of a grant made to a State under 

19 this section pursuant to a formula, issued by rule 

20 not later than January 1, 2013, that takes into ac21 count the number of high-risk individuals in such 

22 State. 

23 (2) LIMITATION.—The amount of a grant made 

24 to a State under this section shall not exceed 

25 $1,000,000 for any fiscal year. 


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1 (c) USE OF FUNDS.—The grant funds made available 

2 to a State under this section may only be used by a State 

3 for the cost associated with planning for the establishment 

4 and implementation of health insurance risk adjustment 

5 mechanisms. Such funds may not be used for costs related 

6 to administering such mechanisms. 

7 (d) DEFINITIONS.—For purposes of this section: 

8 (1) HIGH-RISK INDIVIDUAL.—The term ‘‘high9 risk individual’’ means an individual who— 

10 (A) is a citizen or national of the United 

11 States or is lawfully present in the United 

12 States; 

13 (B) has not been covered under creditable 

14 coverage (as defined in section 2701(c)(1) of 

15 the Public Health Service Act as in effect on 

16 March 22, 2010) during the previous 6-month 

17 period; and 

18 (C) has a preexisting condition, as deter19 mined in a manner consistent with guidance 

20 issued by the Secretary. 

21 (2) HEALTH INSURANCE RISK-ADJUSTMENT

22 MECHANISMS.— 

23 (A) IN GENERAL.—With respect to a 

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1 ment mechanism’’ shall be a mechanism that 

2 applies to— 

3 (i) all health insurance issuers who 

4 offer health insurance coverage in such 

5 State; and 

6 (ii) all covered lives for health insur7 ance coverage offered in such State that is 

8 subject to the requirements of section 2711 

9 or section 2741 of the Public Health Serv10 ice Act, as added by section 3 of this Act. 

11 (B) FURTHER DEFINITION.—With respect 

12 to a State, any further definition of such term 

13 shall be determined by the State insurance com14 missioner, acting in cooperation with health in15 surance issuers who offer health insurance cov16 erage in such State. 

17 (3) STATE.—The term ‘‘State’’ means each of 

18 the 50 States and the District of Columbia. 

19 (e) SUNSET DATE.—The Secretary may not make 

20 any grants under this section after December 31, 2014. 

21 SEC. 12. LIABILITY PROTECTIONS FOR HEALTH CARE PRO22 VIDERS. 

23 (a) HEALTH CARE PROVIDERS PROTECTED.—The li24 ability protections in subsection (c) shall apply in any civil 

25 action, including an action before any court of any State, 


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1 against a health care provider, arising from health care 

2 goods or services that— 

3 (1) were provided by a health care provider in 

4 a hospital to which the requirements of section 1867 

5 of the Social Security Act (42 U.S.C. 1395dd) apply; 

6 and 

7 (2) were provided only because they were re8 quired under section 1867 of the Social Security Act 

9 (42 U.S.C. 1395dd). 

10 (b) BURDEN OF PROOF.—In any proceeding under 

11 subsection (a), the burden of proof shall be on the defend12 ant to establish the elements in paragraphs (1) and (2) 

13 of subsection (a). 

14 (c) LIABILITY PROTECTIONS.— 

15 (1) CAP ON NONECONOMIC DAMAGES.—The 

16 amount of noneconomic damages, if available, shall 

17 not exceed $250,000, regardless of the number of 

18 parties against whom the action is brought with re19 spect to the same injury. An award for noneconomic 

20 damages in excess of $250,000 shall be reduced ei21 ther before entry of the order granting judgment, or 

22 by amendment of such order. 

23 (2) INSTALLMENT PAYMENTS.—If the award 

24 for damages exceeds $50,000, the defendant may 


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1 pay such damages in installments, as determined by 

2 the court. 

3 (3) ATTORNEY FEES.—Any contingent fee for a 

4 party’s attorney shall not exceed— 

5 (A) 40 percent of the portion of the award 

6 amount that does not exceed $50,000; 

(B) 331 7 ⁄3 percent of the portion of the 

8 award amount that exceeds $50,000 but does 

9 not exceed $100,000; 

10 (C) 25 percent of the portion of the award 

11 amount that exceeds $100,000 but does not ex12 ceed $600,000; and 

13 (D) 15 percent of the portion of the award 

14 amount that exceeds $600,000. 

15 (4) DISCLOSURE OF COLLATERAL SOURCE BEN16 EFITS.—Any person bringing a civil action described 

17 in subsection (a) shall, and any party may, disclose 

18 or introduce evidence of collateral source benefits. 

19 (5) PREEMPTION.— 

20 (A) IN GENERAL.—The provisions of this 

21 Act preempt, subject to subparagraphs (B) and 

22 (C), State law to the extent that State law pre23 vents the application of any provisions of law 

24 established by or under this Act. The provisions 

25 governing an action described in subsection (a) 


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1 set forth in this Act supersede chapter 171 of 

2 title 28, United States Code, to the extent that 

3 such chapter— 

4 (i) provides for a greater amount of 

5 damages or contingent fees, a longer pe6 riod in which a health care lawsuit may be 

7 commenced, or a reduced applicability or 

8 scope of periodic payment of future dam9 ages, than provided in this Act; or 

10 (ii) prohibits the introduction of evi11 dence regarding collateral source benefits, 

12 or mandates or permits subrogation or a 

13 lien on collateral source benefits. 

14 (B) GREATER PROTECTIONS PRE15 SERVED.—This Act shall not preempt or super16 sede any State or Federal law that imposes 

17 greater procedural or substantive protections 

18 for health care providers from liability, loss, or 

19 damages than those provided by this Act or cre20 ate a cause of action. 

21 (C) RULE OF CONSTRUCTION.—No provi22 sion of this Act shall be construed to preempt— 

23 (i) any State law (whether effective 

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1 ticular monetary amount of compensatory 

2 or punitive damages (or the total amount 

3 of damages) that may be awarded in an 

4 action described in subsection (a), regard5 less of whether such monetary amount is 

6 greater or lesser than is provided for under 

7 this Act; or 

8 (ii) any defense available to a party in 

9 an action described in subsection (a) under 

10 any other provision of State or Federal 

11 law. 

12 (6) DEFINITIONS.— 

13 (A) COLLATERAL SOURCE BENEFITS.—As 

14 used in this section, the term ‘‘collateral source 

15 benefits’’ means any amount paid or reasonably 

16 likely to be paid in the future to or on behalf 

17 of the claimant, or any service, product, or 

18 other benefit provided or reasonably likely to be 

19 provided in the future to or on behalf of the 

20 claimant, as a result of the personal harm, pur21 suant to— 

22 (i) any State or Federal health, sick23 ness, income-disability, accident, or work24 ers’ compensation law; 


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1 (ii) any health, sickness, income-dis2 ability, or accident insurance that provides 

3 health benefits or income-disability cov4 erage; 

5 (iii) any contract or agreement of any 

6 group, organization, partnership, or cor7 poration to provide, pay for, or reimburse 

8 the cost of medical, hospital, dental, or in9 come-disability benefits; and 

10 (iv) any other publicly or privately 

11 funded program. 

12 (B) NONECONOMIC DAMAGES.—As used in 

13 this section, the term ‘‘noneconomic damages’’ 

14 means damages for physical and emotional 

15 pain, suffering, inconvenience, physical impair16 ment, mental anguish, disfigurement, loss of en17 joyment of life, loss of society and companion18 ship, loss of consortium (other than loss of do19 mestic service), hedonic damages, injury to rep20 utation, and all other nonpecuniary losses of 

21 any kind or nature. 

22 (C) HEALTH CARE PROVIDER.—As used in 

23 this section, the term ‘‘health care provider’’ 

24 means any person or entity required by State or 

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1 istered, or certified to provide health care serv2 ices, and being either so licensed, registered, or 

3 certified, or exempted from such requirement by 

4 other statute. 

5 (D) HEALTH CARE GOODS OR SERVICES.— 

6 As used in this section, the term ‘‘health care 

7 goods or services’’ means any goods or services 

8 provided by a health care organization, pro9 vider, or by any individual working under the 

10 supervision of a health care provider, that re11 lates to the diagnosis, prevention, or treatment 

12 of any human disease or impairment, or the as13 sessment or care of the health of human beings. 

Æ 


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