I 

114TH CONGRESS 

1ST SESSION H. R. 3352 

To amend the Patient Protection and Affordable Care Act and the Internal 

Revenue Code of 1986 to provide greater flexibility with respect to 

waivers granted to States, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 29, 2015 

Mr. HULTGREN introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on 

Ways and Means, 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 amend the Patient Protection and Affordable Care Act 

and the Internal Revenue Code of 1986 to provide greater flexibility with respect to waivers granted to States, 

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. 

4 This Act may be cited as the ‘‘State Health Care Op5 tions Act of 2015’’. 


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1 SEC. 2. INCREASING STATE FLEXIBILITY THROUGH PROVI2 SION OF HEALTH-FLEX AND EXCHANGE WAIV3 ERS. 

4 (a) STATE OPTIONS.— 

5 (1) IN GENERAL.—The Patient Protection and 

6 Affordable Care Act is amended by inserting after 

7 section 1332 (42 U.S.C. 18052) the following: 

8 ‘‘SEC. 1332A. OPTIONS FOR STATE FLEXIBILITY. 

9 ‘‘(a) STATE OPTIONS.— 

10 ‘‘(1) IN GENERAL.—If a State provides to the 

11 Secretary a notice (in this section referred to as a 

12 ‘waiver notice’) of intent to implement a health-flex 

13 waiver (described in subsection (b)(1)), an exchange 

14 waiver (described in subsection (b)(2)), or both, and 

15 such notice complies with paragraph (2), the waiver 

16 shall be deemed to be approved and effective, except 

17 as provided in paragraphs (5) and (6). 

18 ‘‘(2) CONTENTS OF A WAIVER NOTICE.—A 

19 waiver notice with respect to a State shall include 

20 the following: 

21 ‘‘(A) The years for which the waiver shall 

22 be effective (which may be indefinite). 

23 ‘‘(B) An assurance that the State will com24 ply with annual reporting requirements estab25 lished by the Secretary relating to the activities 

26 of the State under the waiver, which reporting 


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1 requirements shall include information on af2 fordability, access, and transparency. 

3 ‘‘(C) In the case of a health-flex waiver— 

4 ‘‘(i) the requirements to be waived; 

5 ‘‘(ii) an assurance that there will be 

6 available throughout the State one or more 

7 health plans that provide the catastrophic 

8 level of coverage described in subsection 

9 (c)(1)(B)(i) for which an enrollee’s re10 quired contribution (as defined in section 

11 5000A(e)(1)(B) of the Internal Revenue 

12 Code of 1986, determined on an annual 

13 basis) does not exceed 6.5 percent of the 

14 median household income (as defined in 

15 section 36B(d)(2)(A) of such Code) of resi16 dents of the State for the most recent tax17 able year for which information on such 

18 median household income is available to 

19 the Secretary; and 

20 ‘‘(iii) an assurance that the certifying 

21 entity (as defined in subsection (c)(2)) has 

22 a process to certify health plans as permis23 sible health plans consistent with sub24 section (c). 


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1 ‘‘(D) In the case of an exchange waiver, 

2 assurances that the State— 

3 ‘‘(i) will be responsible for functions 

4 that are necessary to carry out the waiver 

5 that would otherwise be performed by an 

6 Exchange; 

7 ‘‘(ii) will comply with subsection (d); 

8 ‘‘(iii) has the capability to receive 

9 from the Secretary subsidy eligibility infor10 mation; and 

11 ‘‘(iv) has and is applying standards 

12 for privacy, security, and data encryption 

13 for subsidy eligibility information that are 

14 determined to be satisfactory by the Sec15 retary. 

16 ‘‘(3) EFFECTIVENESS.—A waiver under this 

17 section shall be effective for the years described in 

18 the waiver notice under paragraph (2)(A), except 

19 that no waiver under this section shall be effective 

20 for a year unless the waiver notice for such waiver 

21 was submitted before November 1 of the previous 

22 year. 

23 ‘‘(4) MODIFICATION OR TERMINATION.—A 

24 State may modify or terminate a waiver for the 

25 State under this section by submitting to the SecVerDate Sep 11 2014 06:26 Aug 05, 2015 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3352.IH H3352

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1 retary a subsequent waiver notice with respect to 

2 such waiver. 

3 ‘‘(5) DISAPPROVAL AUTHORITY.—If the Sec4 retary determines that a waiver notice fails to com5 ply with paragraph (2) and notifies the State of the 

6 reason for such determination not later than 30 days 

7 after the date on which the State submits the waiver 

8 notice, such waiver notice shall not be effective. 

9 ‘‘(6) REVOCATION.—If the Secretary deter10 mines that a State is in violation of an assurance 

11 submitted under paragraph (2) and notifies the 

12 State of the reason for such determination, the Sec13 retary may revoke the waiver. Such revocation shall 

14 be effective on the first day of the first year that be15 gins after the 60-day period that begins on the date 

16 on which notification of the revocation occurs. 

17 ‘‘(7) CONSTRUCTION.—Nothing in this section 

18 shall be construed as requiring a State to enact a 

19 law in order to carry out the provisions of this sec20 tion. 

21 ‘‘(b) WAIVERS.— 

22 ‘‘(1) HEALTH-FLEX WAIVER.—A waiver under 

23 this paragraph (in this section referred to as a 

24 ‘health-flex waiver’), with respect to a State, is a 


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1 waiver of any of the requirements in sections 1301 

2 through 1303. 

3 ‘‘(2) EXCHANGE WAIVER.—A waiver under this 

4 paragraph (in this section referred to as an ‘ex5 change waiver’) permits a State to elect to be re6 sponsible for certain Exchange functions, including 

7 serving as the certifying entity for the purposes of 

8 subsection (c). 

9 ‘‘(3) NO WAIVER OF ADULT CHILD COVERAGE

10 AND PREEXISTING CONDITIONS.—Nothing in this 

11 subsection may be construed to permit a State to 

12 waive the following: 

13 ‘‘(A) PROHIBITION OF PREEXISTING CON14 DITION EXCLUSION.—Section 2704 of the Pub15 lic Health Service Act (42 U.S.C. 300gg–3). 

16 ‘‘(B) EXTENSION OF COVERAGE FOR

17 ADULT CHILDREN.—Section 2714 of the Public 

18 Health Service Act (42 U.S.C. 300gg–14). 

19 ‘‘(c) CERTIFYING PERMISSIBLE HEALTH PLANS.— 

20 ‘‘(1) PERMISSIBLE HEALTH PLAN DEFINED.— 

21 For the purposes of this section, the term ‘permis22 sible health plan’ means, with respect to a State, a 

23 health plan that is offered for sale in the individual 

24 or small group market in the State and that is cerVerDate Sep 11 2014 06:26 Aug 05, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3352.IH H3352

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1 tified by a certifying entity to meet the following re2 quirements: 

3 ‘‘(A) BENEFITS.—The plan provides bene4 fits for items and services within each of the 

5 following categories: 

6 ‘‘(i) Ambulatory patient services. 

7 ‘‘(ii) Emergency services. 

8 ‘‘(iii) Hospitalization. 

9 ‘‘(iv) Physician services. 

10 ‘‘(B) LEVELS OF COVERAGE.—The plan 

11 provides a level of coverage that complies with 

12 one of the following levels of coverage (as estab13 lished by the State): 

14 ‘‘(i) Catastrophic. 

15 ‘‘(ii) Standard. 

16 ‘‘(iii) High. 

17 ‘‘(C) TRANSPARENCY JUSTIFYING PRE18 MIUMS.—The issuer of the plan makes available 

19 to the public information about the demo20 graphics of the population enrolled under the 

21 plan, the utilization of health care items and 

22 services by such population under the plan, and 

23 other factors that serve as a justification for 

24 the premium levels (including any premium in25 creases) under the plan. 


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1 ‘‘(D) INFORMATION REQUIREMENT.—The 

2 issuer of the plan submits information as re3 quired under section 36B(g)(3)(C) of the Inter4 nal Revenue Code of 1986. 

5 ‘‘(2) CERTIFYING ENTITY DEFINED.—In this 

6 section, the term ‘certifying entity’ means— 

7 ‘‘(A) in the case of a health plan that is 

8 offered through an Exchange established by a 

9 State, such Exchange; and 

10 ‘‘(B) in the case of a health plan that is 

11 not so offered, the State in which such plan is 

12 offered. 

13 ‘‘(3) EFFECT OF CERTIFYING PERMISSIBLE

14 HEALTH PLANS.—With respect to eligibility for pre15 mium assistance tax credits and reduced cost-shar16 ing for individuals enrolled in permissible health 

17 plans, see section 36B(g) of the Internal Revenue 

18 Code of 1986 and section 1402(f)(4) of the Patient 

19 Protection and Affordable Care Act (42 U.S.C. 

20 18071), respectively. 

21 ‘‘(d) DETERMINING SUBSIDY ELIGIBILITY.— 

22 ‘‘(1) IN GENERAL.—In the case of a State that 

23 has in effect an exchange waiver, the State shall de24 termine the eligibility of individuals residing in the 


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1 State for the assistance described in subparagraphs 

2 (A) and (B) of paragraph (3). 

3 ‘‘(2) DISCLOSURE OF FEDERAL INFORMA4 TION.—In the case of a State that has in effect an 

5 exchange waiver, the Secretary or the Secretary of 

6 the Treasury, as appropriate, shall make subsidy eli7 gibility information available to the State, but only 

8 the minimum amount of information necessary to 

9 enable the State to determine the amount of the as10 sistance described in subparagraphs (A) and (B) of 

11 paragraph (3) for which the individual enrolled in a 

12 permissible health plan is eligible. 

13 ‘‘(3) SUBSIDY ELIGIBILITY INFORMATION DE14 FINED.—In this subsection, the term ‘subsidy eligi15 bility information’ means information concerning the 

16 eligibility of an enrollee or a prospective enrollee in 

17 a health plan for— 

18 ‘‘(A) a premium assistance credit under 

19 section 36B(a) of the Internal Revenue Code of 

20 1986; and 

21 ‘‘(B) reduced cost-sharing under section 

22 1402.’’. 

23 (2) REPORTING REQUIREMENTS.—The Sec24 retary shall establish annual reporting requirements 

25 under 1332A(a)(2)(B) of the Patient Protection and 


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1 Affordable Care Act that include information on af2 fordability, access, and transparency. 

3 (3) CONFORMING AMENDMENT.—The table of 

4 contents of the Patient Protection and Affordable 

5 Care Act is amended by inserting after the item re6 lating to section 1332 the following: 

‘‘Sec. 1332A. Options for State flexibility.’’. 

7 (b) SUBSIDIES FOR INDIVIDUALS ENROLLED IN PER8 MISSIBLE HEALTH PLANS.— 

9 (1) PREMIUM ASSISTANCE TAX CREDITS.—Sec10 tion 36B of the Internal Revenue Code of 1986 is 

11 amended— 

12 (A) by redesignating subsection (g) as sub13 section (h); and 

14 (B) by inserting after subsection (f) the 

15 following: 

16 ‘‘(g) SPECIAL RULES IN CASE OF WAIVERS UNDER

17 SECTION 1332A OF PPACA.— 

18 ‘‘(1) LIMITING ELIGIBILITY TO TAXPAYERS

19 WITH INCOME AT OR BELOW 300 PERCENT OF

20 FPL.—In the case of a section 1332A State, sub21 section (c)(1)(A) shall be applied by substituting 

22 ‘300 percent’ for ‘400 percent’ for a taxpayer who 

23 obtains coverage through a plan issued under the 

24 law of such State for a year. 


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1 ‘‘(2) PERMISSIBLE HEALTH PLANS.—In the 

2 case of a taxpayer who obtains coverage with respect 

3 to a section 1332A State, for a coverage month, a 

4 permissible health plan, as defined in section 

5 1332A(c)(1) of the Patient Protection and Afford6 able Care Act, shall be treated as a qualified health 

7 plan with respect to such taxpayer. 

8 ‘‘(3) ADJUSTED MONTHLY PREMIUM.—In the 

9 case of a State that has in effect a health-flex waiver 

10 described in section 1332A(b)(1) of such Act, sub11 section (b)(3)(C) shall be applied as if the adjusted 

12 monthly premium calculated under such subsection 

13 were multiplied by the ratio of the full actuarial 

14 value of the benefits provided under the plan being 

15 offered to the full actuarial value of essential health 

16 benefits. 

17 ‘‘(4) ELIMINATING CERTAIN REQUIREMENTS IN

18 THE CASE OF AN EXCHANGE WAIVER.—In the case 

19 of a State that has in effect an exchange waiver de20 scribed in section 1332A(b)(2) of such Act for a cov21 erage month, the following shall apply: 

22 ‘‘(A) ELIMINATING EXCHANGE REF23 ERENCES.—Subsections (b)(2)(A), (c)(2)(A)(i), 

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1 ing the permissible health plan as if it were of2 fered through an Exchange. 

3 ‘‘(B) APPLICABLE SECOND LOWEST COST

4 SILVER PLAN.—Subsection (b)(3)(B) shall be 

5 applied by substituting— 

6 ‘‘(i) ‘qualified health plan for which, if 

7 the adjusted monthly premium, taking into 

8 account subsection (g)(3), were multiplied 

9 by the ratio of 70 percent to the level of 

10 coverage expressed as a percent of the full 

11 actuarial value of the benefits provided 

12 under the plan, the product of such mul13 tiplication would be the second lowest such 

14 product for any plan offered in’ for ‘second 

15 lowest cost silver plan of’, and 

16 ‘‘(ii) ‘is offered in such rating area’ 

17 for ‘is offered through the same Exchange 

18 through which the qualified health plans 

19 taken into account under paragraph (2)(A) 

20 were offered’. 

21 ‘‘(C) INFORMATION REQUIREMENT.—In 

22 the case of a permissible health plan which is 

23 not offered through an Exchange, such plan 

24 shall provide to the Secretary and to the indi25 vidual enrolled in the plan the information deVerDate Sep 11 2014 06:26 Aug 05, 2015 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3352.IH H3352

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1 scribed in subsection (f)(3) with respect to such 

2 plan and such individual. 

3 ‘‘(5) SPECIAL RULE FOR PART-TIME RESIDENT

4 TAXPAYERS WITH INCOME ABOVE 300 PERCENT OF

5 FPL.—In the case of a taxpayer who, during a tax6 able year, obtains coverage with respect to a 1332A 

7 State and with respect to a State which is not a 

8 1332A State, paragraph (1) shall not apply and the 

9 premium assistance amount (otherwise determined 

10 under subsection (b)(2)) for such taxpayer for a cov11 erage month shall be 0 if— 

12 ‘‘(A) the household income of the taxpayer 

13 for the taxable year equals or exceeds 300 per14 cent of an amount equal to the poverty line for 

15 a family of the size involved, and 

16 ‘‘(B) the taxpayer receives coverage with 

17 respect to a section 1332A State for such cov18 erage month. 

19 ‘‘(6) SECTION 1332A STATE DEFINED.—For 

20 purposes of this subsection, the term ‘section 1332A 

21 State’ means a State has in effect a waiver under 

22 section 1332A of the Patient Protection and Afford23 able Care Act.’’. 

24 (2) REDUCED COST-SHARING.—Section 1402(f) 

25 of the Patient Protection and Affordable Care Act 


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1 (42 U.S.C. 18071(f)) is amended by adding at the 

2 end the following: 

3 ‘‘(4) 1332A WAIVERS.—If a State has in effect 

4 a waiver under 1332A, the following shall apply with 

5 respect to a coverage month with respect to individ6 uals residing in the State on the first of the month: 

7 ‘‘(A) ELIMINATING REDUCED COST-SHAR8 ING FOR INDIVIDUALS WITH INCOME ABOVE 300

9 PERCENT OF FPL.—No individual whose house10 hold income exceeds 300 percent of the poverty 

11 line for a family of the size involved may be 

12 considered an eligible insured under this sec13 tion. 

14 ‘‘(B) PERMISSIBLE HEALTH PLANS.—For 

15 the purposes of this section, a permissible 

16 health plan, as defined in section 1332A(c)(A), 

17 shall be treated as a qualified health plan. 

18 ‘‘(C) EXCHANGE WAIVER.—If a State has 

19 in effect an exchange waiver described in sec20 tion 1332A(b)(2), subsections (b)(1), (d)(1), 

21 and (e)(3) shall apply as if there were no ref22 erences to an Exchange.’’. 

23 (c) ACCELERATION OF INNOVATION WAIVERS.—Sec24 tion 1332(a)(1) of the Patient Protection and Affordable 

25 Care Act (42 U.S.C. 18052) is amended, in the matter 


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1 preceding subparagraph (A), by striking ‘‘January 1, 

2 2017’’ and inserting ‘‘the date of the enactment of the 

3 State Health Care Options Act of 2015’’. 

Æ 


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