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for administering such plan under title XIX of the 
Social Security Act. 
(30) Y1, Y2, ETC.—The terms ‘‘Y1’’, ‘‘Y2’’, 
‘‘Y3’’, ‘‘Y4’’, ‘‘Y5’’, and similar subsequently num-
bered terms, mean 2013 and subsequent years, re-
spectively. 
TITLE I—IMMEDIATE REFORMS 
SEC. 101. NATIONAL HIGH-RISK POOL PROGRAM. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall establish a temporary national high-risk 
pool program (in this section referred to as the ‘‘pro-
gram’’) to provide health benefits to eligible individuals 
during the period beginning on January 1, 2010, and, sub-
ject to subsection (h)(3)(B), ending on the date on which 
the Health Insurance Exchange is established. 
(b) ADMINISTRATION.—The Secretary may carry out 
this section directly or, pursuant to agreements, grants, 
or contracts with States, through State high-risk pool pro-
grams provided that the requirements of this section are 
met. For a State without a high-risk pool program, the 
Secretary may work with the State to coordinate with 
other forms of coverage expansions, such as State public- 
private partnerships. 
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(c) ELIGIBILITY.—For purposes of this section, the 
term ‘‘eligible individual’’ means an individual who meets 
the requirements of subsection (i)(1)— 
(1) who— 
(A) is not eligible for— 
(i) benefits under title XVIII, XIX, or 
XXI of the Social Security Act; or 
(ii) coverage under an employment- 
based health plan (not including coverage 
under a COBRA continuation provision, as 
defined in section 107(d)(1)); and 
(B) who— 
(i) is an eligible individual under sec-
tion 2741(b) of the Public Health Service 
Act; or 
(ii) is medically eligible for the pro-
gram by virtue of being an individual de-
scribed in subsection (d) at any time dur-
ing the 6-month period ending on the date 
the individual applies for high-risk pool 
coverage under this section; 
(2) who is the spouse or dependent of an indi-
vidual who is described in paragraph (1); 
(3) who has not had health insurance coverage 
or coverage under an employment-based health plan 
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for at least the 6-month period immediately pre-
ceding the date of the individual’s application for 
high-risk pool coverage under this section; or 
(4) who on or after October 29, 2009, had em-
ployment-based retiree health coverage (as defined in 
subsection (i)) and the annual increase in premiums 
for such individual under such coverage (for any cov-
erage period beginning on or after such date) ex-
ceeds such excessive percentage as the Secretary 
shall specify. 
For purposes of paragraph (1)(A)(ii), a person who is in 
a waiting period as defined in section 2701(b)(4) of the 
Public Health Service Act shall not be considered to be 
eligible for coverage under an employment-based health 
plan. 
(d) MEDICALLY
ELIGIBLE
REQUIREMENTS.—For 
purposes of subsection (c)(1)(B)(ii), an individual de-
scribed in this subsection is an individual— 
(1) who, during the 6-month period ending on 
the date the individual applies for high-risk pool cov-
erage under this section applied for individual health 
insurance coverage and— 
(A) was denied such coverage because of a 
preexisting condition or health status; or 
(B) was offered such coverage— 
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(i) under terms that limit the cov-
erage for such a preexisting condition; or 
(ii) at a premium rate that is above 
the premium rate for high risk pool cov-
erage under this section; or 
(2) who has an eligible medical condition as de-
fined by the Secretary. 
In making a determination under paragraph (1) of wheth-
er an individual was offered individual coverage at a pre-
mium rate above the premium rate for high risk pool cov-
erage, the Secretary shall make adjustments to offset dif-
ferences in premium rating that are attributable solely to 
differences in age rating. 
(e) ENROLLMENT.—To enroll in coverage in the pro-
gram, an individual shall— 
(1) submit to the Secretary an application for 
participation in the program, at such time, in such 
manner, and containing such information as the Sec-
retary shall require; 
(2) attest, consistent with subsection (i)(2), 
that the individual is an eligible individual and is a 
resident of one of the 50 States or the District of 
Columbia; and 
(3) if the individual had other prior health in-
surance coverage or coverage under an employment- 
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based health plan during the previous 6 months, 
provide information as to the nature and source of 
such coverage and reasons for its discontinuance. 
(f) PROTECTION AGAINST DUMPING RISKS BY IN-
SURERS.— 
(1) IN GENERAL.—The Secretary shall establish 
criteria for determining whether health insurance 
issuers and employment-based health plans have dis-
couraged an individual from remaining enrolled in 
prior coverage based on that individual’s health sta-
tus. 
(2) SANCTIONS.—An issuer or employment- 
based health plan shall be responsible for reimburs-
ing the program for the medical expenses incurred 
by the program for an individual who, based on cri-
teria established by the Secretary, the Secretary 
finds was encouraged by the issuer to disenroll from 
health benefits coverage prior to enrolling in the pro-
gram. The criteria shall include at least the fol-
lowing circumstances: 
(A) In the case of prior coverage obtained 
through an employer, the provision by the em-
ployer, group health plan, or the issuer of 
money or other financial consideration for 
disenrolling from the coverage. 
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(B) In the case of prior coverage obtained 
directly from an issuer or under an employ-
ment-based health plan— 
(i) the provision by the issuer or plan 
of money or other financial consideration 
for disenrolling from the coverage; or 
(ii) in the case of an individual whose 
premium for the prior coverage exceeded 
the premium required by the program (ad-
justed based on the age factors applied to 
the prior coverage)— 
(I) the prior coverage is a policy 
that is no longer being actively mar-
keted (as defined by the Secretary) by 
the issuer; or 
(II) the prior coverage is a policy 
for which duration of coverage form 
issue or health status are factors that 
can be considered in determining pre-
miums at renewal. 
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as constituting exclusive 
remedies for violations of criteria established under 
paragraph (1) or as preventing States from applying 
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or enforcing such paragraph or other provisions 
under law with respect to health insurance issuers. 
(g) COVERED BENEFITS, COST-SHARING, PREMIUMS, 
AND CONSUMER PROTECTIONS.— 
(1) PREMIUM.—The monthly premium charged 
to eligible individuals for coverage under the pro-
gram— 
(A) may vary by age so long as the ratio 
of the highest such premium to the lowest such 
premium does not exceed the ratio of 2 to 1; 
(B) shall be set at a level that does not ex-
ceed 125 percent of the prevailing standard rate 
for comparable coverage in the individual mar-
ket; and 
(C) shall be adjusted for geographic vari-
ation in costs. 
Health insurance issuers shall provide such informa-
tion as the Secretary may require to determine pre-
vailing standard rates under this paragraph. The 
Secretary shall establish standard rates in consulta-
tion with the National Association of Insurance 
Commissioners. 
(2) COVERED
BENEFITS.—Covered benefits 
under the program shall be determined by the Sec-
retary and shall be consistent with the basic cat-
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egories in the essential benefits package described in 
section 222. Under such benefits package— 
(A) the annual deductible for such benefits 
may not be higher than $1,500 for an indi-
vidual or such higher amount for a family as 
determined by the Secretary; 
(B) there may not be annual or lifetime 
limits; and 
(C) the maximum cost-sharing with respect 
to an individual (or family) for a year shall not 
exceed $5,000 for an individual (or $10,000 for 
a family). 
(3) NO
PREEXISTING
CONDITION
EXCLUSION 
PERIODS.—No preexisting condition exclusion period 
shall be imposed on coverage under the program. 
(4) APPEALS.—The Secretary shall establish an 
appeals process for individuals to appeal a deter-
mination of the Secretary— 
(A) with respect to claims submitted under 
this section; and 
(B) with respect to eligibility determina-
tions made by the Secretary under this section. 
(5) STATE
CONTRIBUTION, MAINTENANCE
OF 
EFFORT.—As a condition of providing health bene-
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fits under this section to eligible individual residing 
in a State— 
(A) in the case of a State in which a quali-
fied high-risk pool (as defined under section 
2744(c)(2) of the Public Health Service Act) 
was in effect as of July 1, 2009, the Secretary 
shall require the State make a maintenance of 
effort payment each year that the high-risk pool 
is in effect equal to an amount not less than the 
amount of all sources of funding for high-risk 
pool coverage made by that State in the year 
ending July 1, 2009; and 
(B) in the case of a State which required 
health insurance issuers to contribute to a State 
high-risk pool or similar arrangement for the 
assessment against such issuers for pool losses, 
the State shall maintain such a contribution ar-
rangement among such issuers. 
(6) LIMITING PROGRAM EXPENDITURES.—The 
Secretary shall, with respect to the program— 
(A) establish procedures to protect against 
fraud, waste, and abuse under the program; 
and 
(B) provide for other program integrity 
methods. 
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(7) TREATMENT AS CREDITABLE COVERAGE.— 
Coverage under the program shall be treated, for 
purposes of applying the definition of ‘‘creditable 
coverage’’ under the provisions of title XXVII of the 
Public Health Service Act, part 6 of subtitle B of 
title I of Employee Retirement Income Security Act 
of 1974, and chapter 100 of the Internal Revenue 
Code of 1986 (and any other provision of law that 
references such provisions) in the same manner as 
if it were coverage under a State health benefits risk 
pool described in section 2701(c)(1)(G) of the Public 
Health Service Act. 
(h) FUNDING; TERMINATION OF AUTHORITY.— 
(1) IN GENERAL.—There is appropriated to the 
Secretary, out of any moneys in the Treasury not 
otherwise appropriated, $5,000,000,000 to pay 
claims against (and administrative costs of) the 
high-risk pool under this section in excess of the pre-
miums collected with respect to eligible individuals 
enrolled in the high-risk pool. Such funds shall be 
available without fiscal year limitation. 
(2) INSUFFICIENT FUNDS.—If the Secretary es-
timates for any fiscal year that the aggregate 
amounts available for payment of expenses of the 
high-risk pool will be less than the amount of the ex-
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penses, the Secretary shall make such adjustments 
as are necessary to eliminate such deficit, including 
reducing benefits, increasing premiums, or estab-
lishing waiting lists. 
(3) TERMINATION OF AUTHORITY.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), coverage of eligible individ-
uals under a high-risk pool shall terminate as 
of the date on which the Health Insurance Ex-
change is established. 
(B) TRANSITION
TO
EXCHANGE.—The 
Secretary shall develop procedures to provide 
for the transition of eligible individuals who are 
enrolled in health insurance coverage offered 
through a high-risk pool established under this 
section to be enrolled in acceptable coverage. 
Such procedures shall ensure that there is no 
lapse in coverage with respect to the individual 
and may extend coverage offered through such 
a high-risk pool beyond 2012 if the Secretary 
determines necessary to avoid such a lapse. 
(i) APPLICATION AND VERIFICATION OF REQUIRE-
MENT OF CITIZENSHIP OR LAWFUL PRESENCE IN THE 
UNITED STATES.— 
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(1) REQUIREMENT.—No individual shall be an 
eligible individual under this section unless the indi-
vidual is a citizen or national of the United States 
or is lawfully present in a State in the United States 
(other than as a nonimmigrant described in a sub-
paragraph (excluding subparagraphs (K), (T), (U), 
and (V)) of section 101(a)(15) of the Immigration 
and Nationality Act). 
(2) APPLICATION
OF
VERIFICATION
PROCESS 
FOR
AFFORDABILITY
CREDITS.—The provisions of 
paragraphs (4) (other than subparagraphs (F) and 
(H)(i)) and (5)(A) of section 341(b), and of sub-
sections (v) (other than paragraph (3)) and (x) of 
section 205 of the Social Security Act, shall apply to 
the verification of eligibility of an eligible individual 
by the Secretary (or by a State agency approved by 
the Secretary) for benefits under this section in the 
same manner as such provisions apply to the 
verification of eligibility of an affordable credit eligi-
ble individual for affordability credits by the Com-
missioner under section 341(b). The agreement re-
ferred to in section 205(v)(2)(A) of the Social Secu-
rity Act (as applied under this paragraph) shall also 
provide for funding, to be payable from the amount 
made available under subsection (h)(1), to the Com-
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missioner of Social Security in such amount as is 
agreed to by such Commissioner and the Secretary. 
(j) EMPLOYMENT-BASED RETIREE HEALTH COV-
ERAGE.—In this section, the term ‘‘employment-based re-
tiree health coverage’’ means health insurance or other 
coverage of health care costs (whether provided by vol-
untary insurance coverage or pursuant to statutory or con-
tractual obligation) for individuals (or for such individuals 
and their spouses and dependents) under a group health 
plan based on their status as retired participants in such 
plan. 
SEC. 102. ENSURING VALUE AND LOWER PREMIUMS. 
(a) GROUP HEALTH INSURANCE COVERAGE.—Title 
XXVII of the Public Health Service Act is amended by 
inserting after section 2713 the following new section: 
‘‘SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS. 
‘‘(a) IN GENERAL.—Each health insurance issuer 
that offers health insurance coverage in the small or large 
group market shall provide that for any plan year in which 
the coverage has a medical loss ratio below a level specified 
by the Secretary (but not less than 85 percent), the issuer 
shall provide in a manner specified by the Secretary for 
rebates to enrollees of the amount by which the issuer’s 
medical loss ratio is less than the level so specified. 
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‘‘(b) IMPLEMENTATION.—The Secretary shall estab-
lish a uniform definition of medical loss ratio and method-
ology for determining how to calculate it based on the av-
erage medical loss ratio in a health insurance issuer’s book 
of business for the small and large group market. Such 
methodology shall be designed to take into account the 
special circumstances of smaller plans, different types of 
plans, and newer plans. In determining the medical loss 
ratio, the Secretary shall exclude State taxes and licensing 
or regulatory fees. Such methodology shall be designed 
and exceptions shall be established to ensure adequate 
participation by health insurance issuers, competition in 
the health insurance market, and value for consumers so 
that their premiums are used for services. 
‘‘(c) SUNSET.—Subsections (a) and (b) shall not 
apply to health insurance coverage on and after the first 
date that health insurance coverage is offered through the 
Health Insurance Exchange.’’. 
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 
Such title is further amended by inserting after section 
2753 the following new section: 
‘‘SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS. 
‘‘The provisions of section 2714 shall apply to health 
insurance coverage offered in the individual market in the 
same manner as such provisions apply to health insurance 
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coverage offered in the small or large group market except 
to the extent the Secretary determines that the application 
of such section may destabilize the existing individual 
market.’’. 
(c) IMMEDIATE
IMPLEMENTATION.—The amend-
ments made by this section shall apply in the group and 
individual market for plan years beginning on or after 
January 1, 2010, or as soon as practicable after such date. 
SEC. 103. ENDING HEALTH INSURANCE RESCISSION ABUSE. 
(a) CLARIFICATION REGARDING APPLICATION
OF 
GUARANTEED
RENEWABILITY
OF
INDIVIDUAL
AND 
GROUP HEALTH INSURANCE COVERAGE.—Sections 2712 
and 2742 of the Public Health Service Act (42 U.S.C. 
300gg–12, 300gg–42) are each amended— 
(1) in its heading, by inserting ‘‘AND CON-
TINUATION
IN
FORCE, INCLUDING
PROHIBI-
TION OF RESCISSION,’’ after ‘‘GUARANTEED RE-
NEWABILITY’’; and 
(2) in subsection (a), by inserting ‘‘, including 
without rescission,’’ after ‘‘continue in force’’. 
(b) SECRETARIAL GUIDANCE REGARDING RESCIS-
SIONS.— 
(1) GROUP HEALTH INSURANCE MARKET.—Sec-
tion 2712 of such Act (42 U.S.C. 300gg–12) is 
amended by adding at the end the following: 
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‘‘(f) RESCISSION.—A health insurance issuer may re-
scind group health insurance coverage only upon clear and 
convincing evidence of fraud described in subsection 
(b)(2), under procedures that provide for independent, ex-
ternal third-party review.’’. 
(2) INDIVIDUAL
HEALTH
MARKET.—Section 
2742 of such Act (42 U.S.C. 300gg–42) is amended 
by adding at the end the following: 
‘‘(f) RESCISSION.—A health insurance issuer may re-
scind individual health insurance coverage only upon clear 
and convincing evidence of fraud described in subsection 
(b)(2), under procedures that provide for independent, ex-
ternal third-party review.’’. 
(3) GUIDANCE.—The Secretary of Health and 
Human Services, no later than 90 days after the 
date of the enactment of this Act, shall issue guid-
ance implementing the amendments made by para-
graphs (1) and (2), including procedures for inde-
pendent, external third-party review. 
(c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD-PARTY REVIEW IN CERTAIN CASES.— 
(1) INDIVIDUAL MARKET.—Subpart 1 of part B 
of title XXVII of such Act (42 U.S.C. 300gg–41 et 
seq.) is amended by adding at the end the following: 
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‘‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD-PARTY REVIEW IN CASES OF RESCIS-
SION. 
‘‘(a) NOTICE AND REVIEW RIGHT.—If a health in-
surance issuer determines to rescind health insurance cov-
erage for an individual in the individual market, before 
such rescission may take effect the issuer shall provide the 
individual with notice of such proposed rescission and an 
opportunity for a review of such determination by an inde-
pendent, external third-party under procedures specified 
by the Secretary under section 2742(f). 
‘‘(b) INDEPENDENT DETERMINATION.—If the indi-
vidual requests such review by an independent, external 
third-party of a rescission of health insurance coverage, 
the coverage shall remain in effect until such third party 
determines that the coverage may be rescinded under the 
guidance issued by the Secretary under section 2742(f).’’. 
(2) APPLICATION
TO
GROUP
HEALTH
INSUR-
ANCE.—Such title is further amended by adding 
after section 2702 the following new section: 
‘‘SEC. 2703. OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD-PARTY REVIEW IN CASES OF RESCIS-
SION. 
‘‘The provisions of section 2746 shall apply to group 
health insurance coverage in the same manner as such 
provisions apply to individual health insurance coverage, 
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except that any reference to section 2742(f) is deemed a 
reference to section 2712(f).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act and shall apply to rescissions occurring on and 
after July 1, 2010, with respect to health insurance cov-
erage issued before, on, or after such date. 
SEC. 104. SUNSHINE ON PRICE GOUGING BY HEALTH IN-
SURANCE ISSUERS. 
(a) INITIAL PREMIUM REVIEW PROCESS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services, in conjunction with States, shall 
establish a process for the annual review, beginning 
with 2010 and subject to subsection (c)(3)(A), of in-
creases in premiums for health insurance coverage. 
(2) JUSTIFICATION AND DISCLOSURE.— Such 
process shall require health insurance issuers to sub-
mit a justification for any premium increase prior to 
implementation of the increase. Such issuers shall 
prominently post such information on their websites. 
The Secretary shall ensure the public disclosure of 
information on such increases and justifications for 
all health insurance issuers. 
(b) CONTINUING PREMIUM REVIEW PROCESS.— 
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(1) INFORMING
COMMISSIONER
OF
PREMIUM 
INCREASE PATTERNS.—As a condition of receiving a 
grant under subsection (c)(1), a State, through its 
Commissioner of Insurance, shall— 
(A) provide the Health Choices Commis-
sioner with information about trends in pre-
mium increases in health insurance coverage in 
premium rating areas in the State; and 
(B) make recommendations, as appro-
priate, to such Commissioner about whether 
particular health insurance issuers should be 
excluded from participation in the Health In-
surance Exchange based on a pattern of exces-
sive or unjustified premium increases. 
(2) COMMISSIONER AUTHORITY REGARDING EX-
CHANGE PARTICIPATION.—In making determinations 
concerning entering into contracts with QHBP offer-
ing entities for the offering of Exchange-partici-
pating health plans under section 304, the Commis-
sioner shall take into account the information and 
recommendations provided under paragraph (1). 
(3) MONITORING BY COMMISSIONER OF PRE-
MIUM INCREASES.— 
(A) IN GENERAL.—Beginning in 2014, the 
Commissioner, in conjunction with the States 
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and in place of the monitoring by the Secretary 
under subsection (a)(1) and consistent with the 
provisions of subsection (a)(2), shall monitor 
premium increases of health insurance coverage 
offered inside the Health Insurance Exchange 
under section 304 and outside of the Exchange. 
(B) CONSIDERATION
IN
OPENING
EX-
CHANGE.—In 
determining 
under 
section 
302(e)(4) whether to make additional larger 
employers eligible to participate in the Health 
Insurance Exchange, the Commissioner shall 
take into account any excess of premium 
growth outside the Exchange as compared to 
the rate of such growth inside the Exchange, 
including information reported by the States. 
(c) GRANTS IN SUPPORT OF PROCESS.— 
(1) PREMIUM
REVIEW
GRANTS
DURING
2010 
THROUGH 2014.—The Secretary shall carry out a 
program of grants to States during the 5-year period 
beginning with 2010 to assist them in carrying out 
subsection (a), including— 
(A) in reviewing and, if appropriate under 
State law, approving premium increases for 
health insurance coverage; and 
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(B) in providing information and rec-
ommendations to the Commissioner under sub-
section (b)(1). 
(2) FUNDING.— 
(A) IN GENERAL.—Out of any funds in the 
Treasury not otherwise appropriated, there are 
appropriated to the Secretary $1,000,000,000, 
to be available for expenditure for grants under 
paragraph (1) and subparagraph (B). 
(B) FURTHER AVAILABILITY FOR INSUR-
ANCE
REFORM
AND
CONSUMER
PROTECTION 
GRANTS.—If the amounts appropriated under 
subparagraph (A) are not fully obligated under 
grants under paragraph (1) by the end of 2014, 
any remaining funds shall remain available to 
the Secretary for grants to States for planning 
and implementing the insurance reforms and 
consumer protections under title II. 
(C) ALLOCATION.—The Secretary shall es-
tablish a formula for determining the amount of 
any grant to a State under this subsection. 
Under such formula— 
(i) the Secretary shall consider the 
number of plans of health insurance cov-
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erage offered in each State and the popu-
lation of the State; and 
(ii) no State qualifying for a grant 
under paragraph (1) shall receive less than 
$1,000,000, or more than $5,000,000 for a 
grant year. 
SEC. 105. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
(a) UNDER GROUP HEALTH PLANS.— 
(1) PHSA.—Title XXVII of the Public Health 
Service Act is amended by inserting after section 
2702 the following new section: 
‘‘SEC. 2703. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering health insurance coverage in con-
nection with a group health plan that provides coverage 
for dependent children shall make available such coverage, 
at the option of the participant involved, for one or more 
qualified children (as defined in subsection (b)) of the par-
ticipant. 
‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘qualified child’ means, with respect to a partici-
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pant in a group health plan or group health insurance cov-
erage, an individual who (but for age) would be treated 
as a dependent child of the participant under such plan 
or coverage and who— 
‘‘(1) is under 27 years of age; and 
‘‘(2) is not enrolled as a participant, bene-
ficiary, or enrollee (other than under this section, 
section 2746, or section 704 of the Employee Retire-
ment Income Security Act of 1974) under any 
health insurance coverage or group health plan. 
‘‘(c) PREMIUMS.—Nothing in this section shall be 
construed as preventing a group health plan or health in-
surance issuer with respect to group health insurance cov-
erage from increasing the premiums otherwise required for 
coverage provided under this section consistent with 
standards established by the Secretary based upon family 
size.’’. 
(2) EMPLOYEE RETIREMENT INCOME SECURITY 
ACT OF 1974.— 
(A) IN GENERAL.—Part 7 of subtitle B of 
title I of the Employee Retirement Income Se-
curity Act of 1974 is amended by inserting 
after section 703 the following new section: 
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‘‘SEC. 704. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering health insurance coverage in con-
nection with a group health plan that provides coverage 
for dependent children shall make available such coverage, 
at the option of the participant involved, for one or more 
qualified children (as defined in subsection (b)) of the par-
ticipant. 
‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘qualified child’ means, with respect to a partici-
pant in a group health plan or group health insurance cov-
erage, an individual who (but for age) would be treated 
as a dependent child of the participant under such plan 
or coverage and who— 
‘‘(1) is under 27 years of age; and 
‘‘(2) is not enrolled as a participant, bene-
ficiary, or enrollee (other than under this section) 
under any health insurance coverage or group health 
plan. 
‘‘(c) PREMIUMS.—Nothing in this section shall be 
construed as preventing a group health plan or health in-
surance issuer with respect to group health insurance cov-
erage from increasing the premiums otherwise required for 
coverage provided under this section consistent with 
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standards established by the Secretary based upon family 
size.’’. 
(B) CLERICAL AMENDMENT.—The table of 
contents of such Act is amended by inserting 
after the item relating to section 703 the fol-
lowing new item: 
‘‘Sec. 704. Requiring the option of extension of dependent coverage for unin-
sured young adults.’’. 
(3) IRC.— 
(A) IN GENERAL.—Subchapter A of chap-
ter 100 of the Internal Revenue Code of 1986 
is amended by adding at the end the following 
new section: 
‘‘SEC. 9804. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘(a) IN GENERAL.—A group health plan that pro-
vides coverage for dependent children shall make available 
such coverage, at the option of the participant involved, 
for one or more qualified children (as defined in subsection 
(b)) of the participant. 
‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘qualified child’ means, with respect to a partici-
pant in a group health plan, an individual who (but for 
age) would be treated as a dependent child of the partici-
pant under such plan and who— 
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‘‘(1) is under 27 years of age; and 
‘‘(2) is not enrolled as a participant, bene-
ficiary, or enrollee (other than under this section, 
section 704 of the Employee Retirement Income Se-
curity Act of 1974, or section 2704 or 2746 of the 
Public Health Service Act) under any health insur-
ance coverage or group health plan. 
‘‘(c) PREMIUMS.—Nothing in this section shall be 
construed as preventing a group health plan from increas-
ing the premiums otherwise required for coverage provided 
under this section consistent with standards established 
by the Secretary based upon family size.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections of such chapter is amended by insert-
ing after the item relating to section 9803 the 
following: 
‘‘Sec. 9804. Requiring the option of extension of dependent coverage for unin-
sured young adults.’’. 
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 
Title XXVII of the Public Health Service Act is amended 
by inserting after section 2745 the following new section: 
‘‘SEC. 2746. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘The provisions of section 2703 shall apply to health 
insurance coverage offered by a health insurance issuer 
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in the individual market in the same manner as they apply 
to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan in the small 
or large group market.’’. 
(c) EFFECTIVE DATES.— 
(1) GROUP HEALTH PLANS.—The amendments 
made by subsection (a) shall apply to group health 
plans for plan years beginning on or after January 
1, 2010. 
(2) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—Section 2746 of the Public Health Service 
Act, as inserted by subsection (b), shall apply with 
respect to health insurance coverage offered, sold, 
issued, renewed, in effect, or operated in the indi-
vidual market on or after January 1, 2010. 
SEC. 106. LIMITATIONS ON PREEXISTING CONDITION EX-
CLUSIONS IN GROUP HEALTH PLANS IN AD-
VANCE OF APPLICABILITY OF NEW PROHIBI-
TION OF PREEXISTING CONDITION EXCLU-
SIONS. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) REDUCTION IN LOOK-BACK PERIOD.—Sec-
tion 701(a)(1) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1181(a)(1)) is 
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amended by striking ‘‘6-month period’’ and inserting 
‘‘30-day period’’. 
(2) REDUCTION
IN
PERMITTED
PREEXISTING 
CONDITION LIMITATION PERIOD.—Section 701(a)(2) 
of such Act (29 U.S.C. 1181(a)(2)) is amended by 
striking ‘‘12 months’’ and inserting ‘‘3 months’’, 
and by striking ‘‘18 months’’ and inserting ‘‘9 
months’’. 
(3) SUNSET OF INTERIM LIMITATION.—Section 
701 of such Act (29 U.S.C. 1181) is amended by 
adding at the end the following new subsection: 
‘‘(h) TERMINATION.—This section shall cease to 
apply to any group health plan as of the date that such 
plan becomes subject to the requirements of section 211 
of the (relating to prohibiting preexisting condition exclu-
sions).’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.— 
(1) REDUCTION IN LOOK-BACK PERIOD.—Sec-
tion 9801(a)(1) of the Internal Revenue Code of 
1986 is amended by striking ‘‘6-month period’’ and 
inserting ‘‘30-day period’’. 
(2) REDUCTION
IN
PERMITTED
PREEXISTING 
CONDITION
LIMITATION
PERIOD.—Section 
9801(a)(2) of such Code is amended by striking ‘‘12 
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months’’ and inserting ‘‘3 months’’, and by striking 
‘‘18 months’’ and inserting ‘‘9 months’’. 
(3) SUNSET OF INTERIM LIMITATION.—Section 
9801 of such Code is amended by adding at the end 
the following new subsection: 
‘‘(g) TERMINATION.—This section shall cease to 
apply to any group health plan as of the date that such 
plan becomes subject to the requirements of section 211 
of the Affordable Health Care for America Act (relating 
to prohibiting preexisting condition exclusions).’’. 
(c) AMENDMENTS
TO PUBLIC HEALTH SERVICE 
ACT.— 
(1) REDUCTION IN LOOK-BACK PERIOD.—Sec-
tion 2701(a)(1) of the Public Health Service Act (42 
U.S.C. 300gg(a)(1)) is amended by striking ‘‘6- 
month period’’ and inserting ‘‘30-day period’’. 
(2) REDUCTION
IN
PERMITTED
PREEXISTING 
CONDITION
LIMITATION
PERIOD.—Section 
2701(a)(2) of such Act (42 U.S.C. 300gg(a)(2)) is 
amended by striking ‘‘12 months’’ and inserting ‘‘3 
months’’, and by striking ‘‘18 months’’ and inserting 
‘‘9 months’’. 
(3) SUNSET OF INTERIM LIMITATION.—Section 
2701 of such Act (42 U.S.C. 300gg) is amended by 
adding at the end the following new subsection: 
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‘‘(h) TERMINATION.—This section shall cease to 
apply to any group health plan as of the date that such 
plan becomes subject to the requirements of section 211 
of the (relating to prohibiting preexisting condition exclu-
sions).’’. 
(4) 
MISCELLANEOUS
TECHNICAL
AMEND-
MENT.—Section 2702(a)(2) of such Act (42 U.S.C. 
300gg–1) is amended by striking ‘‘701’’ and insert-
ing ‘‘2701’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply with respect to group health plans for 
plan years beginning on or after January 1, 2010. 
(2) SPECIAL
RULE
FOR
COLLECTIVE
BAR-
GAINING
AGREEMENTS.—In the case of a group 
health plan maintained pursuant to 1 or more collec-
tive bargaining agreements between employee rep-
resentatives and 1 or more employers ratified before 
the date of the enactment of this Act, the amend-
ments made by this section shall not apply to plan 
years beginning before the earlier of— 
(A) the date on which the last of the col-
lective bargaining agreements relating to the 
plan terminates (determined without regard to 
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any extension thereof agreed to after the date 
of the enactment of this Act); 
(B) 3 years after the date of the enact-
ment of this Act. 
SEC. 107. PROHIBITING ACTS OF DOMESTIC VIOLENCE 
FROM BEING TREATED AS PREEXISTING CON-
DITIONS. 
(a) ERISA.—Section 701(d)(3) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. ) is 
amended— 
(1) in the heading, by inserting ‘‘OR DOMESTIC 
VIOLENCE’’ after ‘‘PREGNANCY’’; and 
(2) by inserting ‘‘or domestic violence’’ after 
‘‘relating to pregnancy’’. 
(b) PHSA.— 
(1) GROUP
MARKET.—Section 2701(d)(3) of 
the 
Public 
Health 
Service 
Act 
(42 
U.S.C. 
300gg(d)(3)) is amended— 
(A) in the heading, by inserting ‘‘OR DO-
MESTIC VIOLENCE’’ after ‘‘PREGNANCY’’; and 
(B) by inserting ‘‘or domestic violence’’ 
after ‘‘relating to pregnancy’’. 
(2) INDIVIDUAL MARKET.—Title XXVII of such 
Act is amended by inserting after section 2753 the 
following new section: 
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‘‘SEC. 2754. PROHIBITION ON DOMESTIC VIOLENCE AS PRE-
EXISTING CONDITION. 
‘‘A health insurance issuer offering health insurance 
coverage in the individual market may not, on the basis 
of domestic violence, impose any preexisting condition ex-
clusion (as defined in section 2701(b)(1)(A)) with respect 
to such coverage.’’. 
(c) IRC.—Section 9801(d)(3) of the Internal Rev-
enue Code of 1986 is amended— 
(1) in the heading, by inserting ‘‘OR DOMESTIC 
VIOLENCE’’ after ‘‘PREGNANCY’’; and 
(2) by inserting ‘‘or domestic violence’’ after 
‘‘relating to pregnancy’’. 
(d) EFFECTIVE DATES.— 
(1) Except as otherwise provided in this sub-
section, the amendments made by this section shall 
apply with respect to group health plans (and health 
insurance issuers offering group health insurance 
coverage) for plan years beginning on or after Janu-
ary 1, 2010. 
(2) The amendment made by subsection (b)(2) 
shall apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated 
in the individual market on or after such date. 
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SEC. 108. ENDING HEALTH INSURANCE DENIALS AND 
DELAYS OF NECESSARY TREATMENT FOR 
CHILDREN WITH DEFORMITIES. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) IN GENERAL.—Subpart B of part 7 of sub-
title B of title I of the Employee Retirement Income 
Security Act of 1974 is amended by adding at the 
end the following new section: 
‘‘SEC. 715. STANDARDS RELATING TO BENEFITS FOR MINOR 
CHILD’S CONGENITAL OR DEVELOPMENTAL 
DEFORMITY OR DISORDER. 
‘‘(a) REQUIREMENTS FOR TREATMENT FOR CHIL-
DREN WITH DEFORMITIES.— 
‘‘(1) IN GENERAL.—A group health plan, and a 
health insurance issuer offering group health insur-
ance coverage, that provides coverage for surgical 
benefits shall provide coverage for outpatient and in-
patient diagnosis and treatment of a minor child’s 
congenital or developmental deformity, disease, or 
injury. A minor child shall include any individual 
who is 21 years of age or younger. 
‘‘(2) TREATMENT DEFINED.— 
‘‘(A) IN
GENERAL.—In this section, the 
term ‘treatment’ includes reconstructive sur-
gical procedures (procedures that are generally 
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performed to improve function, but may also be 
performed to approximate a normal appear-
ance) that are performed on abnormal struc-
tures of the body caused by congenital defects, 
developmental abnormalities, trauma, infection, 
tumors, or disease, including— 
‘‘(i) procedures that do not materially 
affect the function of the body part being 
treated; and 
‘‘(ii) procedures for secondary condi-
tions and follow-up treatment. 
‘‘(B) EXCEPTION.—Such term does not in-
clude cosmetic surgery performed to reshape 
normal structures of the body to improve ap-
pearance or self-esteem. 
‘‘(b) NOTICE.—A group health plan under this part 
shall comply with the notice requirement under section 
713(b) (other than paragraph (3)) with respect to the re-
quirements of this section.’’. 
(2) CONFORMING AMENDMENT.— 
(A) Subsection (c) of section 731 of such 
Act is amended by striking ‘‘section 711’’ and 
inserting ‘‘sections 711 and 715’’. 
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(B) The table of contents in section 1 of 
such Act is amended by inserting after the item 
relating to section 714 the following new item: 
‘‘Sec. 715. Standards relating to benefits for minor child’s congenital or devel-
opmental deformity or disorder.’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.— 
(1) IN
GENERAL.—Subchapter B of chapter 
100 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new section: 
‘‘SEC. 9814. STANDARDS RELATING TO BENEFITS FOR 
MINOR CHILD’S CONGENITAL OR DEVELOP-
MENTAL DEFORMITY OR DISORDER. 
‘‘(a) REQUIREMENTS FOR TREATMENT FOR CHIL-
DREN WITH DEFORMITIES.—A group health plan that 
provides coverage for surgical benefits shall provide cov-
erage for outpatient and inpatient diagnosis and treat-
ment of a minor child’s congenital or developmental de-
formity, disease, or injury. A minor child shall include any 
individual who is 21 years of age or younger. 
‘‘(b) TREATMENT DEFINED.— 
‘‘(1) IN GENERAL.—In this section, the term 
‘treatment’ includes reconstructive surgical proce-
dures (procedures that are generally performed to 
improve function, but may also be performed to ap-
proximate a normal appearance) that are performed 
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on abnormal structures of the body caused by con-
genital defects, developmental abnormalities, trau-
ma, infection, tumors, or disease, including— 
‘‘(A) procedures that do not materially af-
fect the function of the body part being treated, 
and 
‘‘(B) procedures for secondary conditions 
and follow-up treatment. 
‘‘(2) EXCEPTION.—Such term does not include 
cosmetic surgery performed to reshape normal struc-
tures of the body to improve appearance or self-es-
teem.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 100 of such Code 
is amended by adding at the end the following new 
item: 
‘‘Sec. 9814. Standards relating to benefits for minor child’s congenital or devel-
opmental deformity or disorder.’’. 
(c) AMENDMENTS TO THE PUBLIC HEALTH SERVICE 
ACT.— 
(1) IN GENERAL.—Subpart 2 of part A of title 
XXVII of the Public Health Service Act is amended 
by adding at the end the following new section: 
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‘‘SEC. 2708. STANDARDS RELATING TO BENEFITS FOR 
MINOR CHILD’S CONGENITAL OR DEVELOP-
MENTAL DEFORMITY OR DISORDER. 
‘‘(a) REQUIREMENTS FOR TREATMENT FOR CHIL-
DREN WITH DEFORMITIES.— 
‘‘(1) IN GENERAL.—A group health plan, and a 
health insurance issuer offering group health insur-
ance coverage, that provides coverage for surgical 
benefits shall provide coverage for outpatient and in-
patient diagnosis and treatment of a minor child’s 
congenital or developmental deformity, disease, or 
injury. A minor child shall include any individual 
who is 21 years of age or younger. 
‘‘(2) TREATMENT DEFINED.— 
‘‘(A) IN
GENERAL.—In this section, the 
term ‘treatment’ includes reconstructive sur-
gical procedures (procedures that are generally 
performed to improve function, but may also be 
performed to approximate a normal appear-
ance) that are performed on abnormal struc-
tures of the body caused by congenital defects, 
developmental abnormalities, trauma, infection, 
tumors, or disease, including— 
‘‘(i) procedures that do not materially 
affect the function of the body part being 
treated; and 
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‘‘(ii) procedures for secondary condi-
tions and follow-up treatment. 
‘‘(B) EXCEPTION.—Such term does not in-
clude cosmetic surgery performed to reshape 
normal structures of the body to improve ap-
pearance or self-esteem. 
‘‘(b) NOTICE.—A group health plan under this part 
shall comply with the notice requirement under section 
715(b) of the Employee Retirement Income Security Act 
of 1974 with respect to the requirements of this section 
as if such section applied to such plan.’’. 
(2) INDIVIDUAL HEALTH INSURANCE.—Subpart 
2 of part B of title XXVII of the Public Health 
Service Act, as amended by section 161(b), is fur-
ther amended by adding at the end the following 
new section: 
‘‘SEC. 2755. STANDARDS RELATING TO BENEFITS FOR 
MINOR CHILD’S CONGENITAL OR DEVELOP-
MENTAL DEFORMITY OR DISORDER. 
‘‘The provisions of section 2708 shall apply to health 
insurance coverage offered by a health insurance issuer 
in the individual market in the same manner as such pro-
visions apply to health insurance coverage offered by a 
health insurance issuer in connection with a group health 
plan in the small or large group market.’’. 
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(3) CONFORMING AMENDMENTS.— 
(A) Section 2723(c) of such Act (42 
U.S.C. 300gg–23(c)) is amended by striking 
‘‘section 2704’’ and inserting ‘‘sections 2704 
and 2708’’. 
(B) Section 2762(b)(2) of such Act (42 
U.S.C. 300gg–62(b)(2)) is amended by striking 
‘‘section 2751’’ and inserting ‘‘sections 2751 
and 2755’’. 
(d) EFFECTIVE DATES.— 
(1) The amendments made by this section shall 
apply with respect to group health plans (and health 
insurance issuers offering group health insurance 
coverage) for plan years beginning on or after Janu-
ary 1, 2010. 
(2) The amendment made by subsection (c)(2) 
shall apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated 
in the individual market on or after such date. 
(e) COORDINATION.—Section 104(1) of the Health 
Insurance Portability and Accountability Act of 1996 is 
amended by striking ‘‘(and the amendments made by this 
subtitle and section 401)’’ and inserting ‘‘, part 7 of sub-
title B of title I of the Employee Retirement Income Secu-
rity Act of 1974, parts A and C of title XXVII of the 
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Public Health Service Act, and chapter 100 of the Internal 
Revenue Code of 1986’’. 
SEC. 109. ELIMINATION OF LIFETIME LIMITS. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) IN GENERAL.—Subpart B of part 7 of sub-
title B of title I of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1185 et seq.), as 
amended by section 108, is amended by adding at 
the end the following: 
‘‘SEC. 716. ELIMINATION OF LIFETIME AGGREGATE LIMITS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer providing health insurance coverage in 
connection with a group health plan, may not impose an 
aggregate dollar lifetime limit with respect to benefits pay-
able under the plan or coverage. 
‘‘(b) DEFINITION.—In this section, the term ‘aggre-
gate dollar lifetime limit’ means, with respect to benefits 
under a group health plan or health insurance coverage 
offered in connection with a group health plan, a dollar 
limitation on the total amount that may be paid with re-
spect to such benefits under the plan or health insurance 
coverage with respect to an individual or other coverage 
unit on a lifetime basis.’’. 
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(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of such Act, is amended by insert-
ing after the item relating to section 715 the fol-
lowing new item: 
‘‘Sec. 716. Elimination of lifetime aggregate limits.’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.— 
(1) IN
GENERAL.—Subchapter B of chapter 
100 of the Internal Revenue Code of 1986, as 
amended by section 108(b), is amended by adding at 
the end the following new section: 
‘‘SEC. 9815. ELIMINATION OF LIFETIME AGGREGATE LIM-
ITS. 
‘‘(a) IN GENERAL.—A group health plan may not im-
pose an aggregate dollar lifetime limit with respect to ben-
efits payable under the plan. 
‘‘(b) DEFINITION.—In this section, the term ‘aggre-
gate dollar lifetime limit’ means, with respect to benefits 
under a group health plan a dollar limitation on the total 
amount that may be paid with respect to such benefits 
under the plan with respect to an individual or other cov-
erage unit on a lifetime basis.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 100 of such Code, 
as amended by section 108(b), is amended by adding 
at the end the following new item: 
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‘‘Sec. 9854. Standards relating to benefits for minor child’s congenital or devel-
opmental deformity or disorder.’’. 
(c) AMENDMENT TO THE PUBLIC HEALTH SERVICE 
ACT RELATING TO THE GROUP MARKET.— 
(1) IN GENERAL.—Subpart 2 of part A of title 
XXVII of the Public Health Service Act (42 U.S.C. 
300gg–4 et seq.) as amended by section 108(c)(1), 
is amended by adding at the end the following: 
‘‘SEC. 2709. ELIMINATION OF LIFETIME AGGREGATE LIM-
ITS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer providing health insurance coverage in 
connection with a group health plan, may not impose an 
aggregate dollar lifetime limit with respect to benefits pay-
able under the plan or coverage. 
‘‘(b) DEFINITION.—In this section, the term ‘aggre-
gate dollar lifetime limit’ means, with respect to benefits 
under a group health plan or health insurance coverage, 
a dollar limitation on the total amount that may be paid 
with respect to such benefits under the plan or health in-
surance coverage with respect to an individual or other 
coverage unit on a lifetime basis.’’. 
(2) INDIVIDUAL MARKET.—Subpart 2 of part B 
of title XXVII of the Public Health Service Act (42 
U.S.C. 300gg–51 et seq.), as amended by section 
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108(c)(2), is amended by adding at the end the fol-
lowing: 
‘‘SEC. 2756. ELIMINATION OF LIFETIME AGGREGATE LIM-
ITS. 
‘‘The provisions of section 2709 shall apply to health 
insurance coverage offered by a health insurance issuer 
in the individual market in the same manner as they apply 
to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan in the small 
or large group market.’’. 
(d) EFFECTIVE DATES.— 
(1) The amendments made by this section shall 
apply with respect to group health plans (and health 
insurance issuers offering group health insurance 
coverage) for plan years beginning on or after Janu-
ary 1, 2010. 
(2) The amendment made by subsection (c)(2) 
shall apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated 
in the individual market on or after such date. 
SEC. 110. PROHIBITION AGAINST POSTRETIREMENT RE-
DUCTIONS OF RETIREE HEALTH BENEFITS 
BY GROUP HEALTH PLANS. 
(a) IN GENERAL.—Part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974, 
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as amended by sections 108 and 109, is amended by in-
serting after section 716 the following new section: 
‘‘SEC. 717. PROTECTION AGAINST POSTRETIREMENT RE-
DUCTION OF RETIREE HEALTH BENEFITS. 
‘‘(a) IN GENERAL.—Every group health plan shall 
contain a provision which expressly bars the plan, or any 
fiduciary of the plan, from reducing the benefits provided 
under the plan to a retired participant, or beneficiary of 
such participant, if such reduction affects the benefits pro-
vided to the participant or beneficiary as of the date the 
participant retired for purposes of the plan and such re-
duction occurs after the participant’s retirement unless 
such reduction is also made with respect to active partici-
pants. Nothing in this section shall prohibit a plan from 
enforcing a total aggregate cap on amounts paid for re-
tiree health coverage that is part of the plan at the time 
of retirement. 
‘‘(b) NO REDUCTION.—Notwithstanding that a group 
health plan may contain a provision reserving the general 
power to amend or terminate the plan or a provision spe-
cifically authorizing the plan to make post-retirement re-
ductions in retiree health benefits, it shall be prohibited 
for any group health plan, whether through amendment 
or otherwise, to reduce the benefits provided to a retired 
participant or the participant’s beneficiary under the 
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terms of the plan if such reduction of benefits occurs after 
the date the participant retired for purposes of the plan 
and reduces benefits that were provided to the participant, 
or the participant’s beneficiary, as of the date the partici-
pant retired unless such reduction is also made with re-
spect to active participants. 
‘‘(c) REDUCTION DESCRIBED.— For purposes of this 
section, a reduction in benefits— 
‘‘(1) with respect to premiums occurs under a 
group health plan when a participant’s (or bene-
ficiary’s) share of the total premium (or, in the case 
of a self-insured plan, the costs of coverage) of the 
plan substantially increases; or 
‘‘(2) with respect to other cost-sharing and ben-
efits under a group health plan occurs when there is 
a substantial decrease in the actuarial value of the 
benefit package under the plan. 
For purposes of this section, the term ‘substantial’ means 
an increase in the total premium share or a decrease in 
the actuarial value of the benefit package that is greater 
than 5 percent.’’ 
(b) CONFORMING AMENDMENT.—The table of con-
tents in section 1 of such Act, as amended by sections 
108 and 109, is amended by inserting after the item relat-
ing to section 716 the following new item: 
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‘‘Sec. 717. Protection against postretirement reduction of retiree health bene-
fits.’’. 
(c) WAIVER.—An employer may, in a form and man-
ner which shall be prescribed by the Secretary of Labor, 
apply for a waiver from this provision if the employer can 
reasonably demonstrate that meeting the requirements of 
this section would impose an undue hardship on the em-
ployer. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 111. REINSURANCE PROGRAM FOR RETIREES. 
(a) ESTABLISHMENT.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary 
of Health and Human Services shall establish a tem-
porary reinsurance program (in this section referred 
to as the ‘‘reinsurance program’’) to provide reim-
bursement to assist participating employment-based 
plans with the cost of providing health benefits to 
retirees and to eligible spouses, surviving spouses 
and dependents of such retirees. 
(2) DEFINITIONS.—For purposes of this sec-
tion: 
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(A) The term ‘‘eligible employment-based 
plan’’ means a group health plan or employ-
ment-based health plan that— 
(i) is — 
(I) maintained by one or more 
employers (including without limita-
tion any State or political subdivision 
thereof, or any agency or instrumen-
tality of any of the foregoing), former 
employers or employee organizations 
or associations, or a voluntary employ-
ees’ beneficiary association, or a com-
mittee or board of individuals ap-
pointed to administer such plan; or 
(II) a multiemployer plan (as de-
fined in section 3(37) of the Employee 
Retirement Income Security Act of 
1974); and 
(ii) provides health benefits to retir-
ees. 
(B) The term ‘‘health benefits’’ means 
medical, surgical, hospital, prescription drug, 
and such other benefits as shall be determined 
by the Secretary, whether self-funded or deliv-
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ered through the purchase of insurance or oth-
erwise. 
(C) The term ‘‘participating employment- 
based plan’’ means an eligible employment- 
based plan that is participating in the reinsur-
ance program. 
(D) The term ‘‘retiree’’ means, with re-
spect to a participating employment-benefit 
plan, an individual who— 
(i) is 55 years of age or older; 
(ii) is not eligible for coverage under 
title XVIII of the Social Security Act; and 
(iii) is not an active employee of an 
employer maintaining the plan or of any 
employer that makes or has made substan-
tial contributions to fund such plan. 
(E) The term ‘‘Secretary’’ means Sec-
retary of Health and Human Services. 
(b) PARTICIPATION.—To be eligible to participate in 
the reinsurance program, an eligible employment-based 
plan shall submit to the Secretary an application for par-
ticipation in the program, at such time, in such manner, 
and containing such information as the Secretary shall re-
quire. 
(c) PAYMENT.— 
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(1) SUBMISSION OF CLAIMS.— 
(A) IN GENERAL.—Under the reinsurance 
program, a participating employment-based 
plan shall submit claims for reimbursement to 
the Secretary which shall contain documenta-
tion of the actual costs of the items and serv-
ices for which each claim is being submitted. 
(B) BASIS FOR CLAIMS.—Each claim sub-
mitted under subparagraph (A) shall be based 
on the actual amount expended by the partici-
pating employment-based plan involved within 
the plan year for the appropriate employment 
based health benefits provided to a retiree or to 
the spouse, surviving spouse, or dependent of a 
retiree. In determining the amount of any claim 
for purposes of this subsection, the partici-
pating employment-based plan shall take into 
account any negotiated price concessions (such 
as discounts, direct or indirect subsidies, re-
bates, and direct or indirect remunerations) ob-
tained by such plan with respect to such health 
benefits. For purposes of calculating the 
amount of any claim, the costs paid by the re-
tiree or by the spouse, surviving spouse, or de-
pendent of the retiree in the form of 
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deductibles, copayments, and coinsurance shall 
be included along with the amounts paid by the 
participating employment-based plan. 
(2) PROGRAM PAYMENTS AND LIMIT.—If the 
Secretary determines that a participating employ-
ment-based plan has submitted a valid claim under 
paragraph (1), the Secretary shall reimburse such 
plan for 80 percent of that portion of the costs at-
tributable to such claim that exceeds $15,000, but is 
less than $90,000. Such amounts shall be adjusted 
each year based on the percentage increase in the 
medical care component of the Consumer Price 
Index (rounded to the nearest multiple of $1,000) 
for the year involved. 
(3) USE OF PAYMENTS.—Amounts paid to a 
participating employment-based plan under this sub-
section shall only be used to reduce the costs of 
health care provided by the plan by reducing pre-
mium costs for the employer or employee association 
maintaining the plan, and reducing premium con-
tributions, deductibles, copayments, coinsurance, or 
other out-of-pocket costs for plan participants and 
beneficiaries. Where the benefits are provided by an 
employer to members of a represented bargaining 
unit, the allocation of payments among these pur-
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poses shall be subject to collective bargaining. 
Amounts paid to the plan under this subsection shall 
not be used as general revenues by the employer or 
employee association maintaining the plan or for any 
other purposes. The Secretary shall develop a mech-
anism to monitor the appropriate use of such pay-
ments by such plans. 
(4) APPEALS AND PROGRAM PROTECTIONS.— 
The Secretary shall establish— 
(A) an appeals process to permit partici-
pating employment-based plans to appeal a de-
termination of the Secretary with respect to 
claims submitted under this section; and 
(B) procedures to protect against fraud, 
waste, and abuse under the program. 
(5) AUDITS.—The Secretary shall conduct an-
nual audits of claims data submitted by partici-
pating employment-based plans under this section to 
ensure that they are in compliance with the require-
ments of this section. 
(d) RETIREE RESERVE TRUST FUND.— 
(1) ESTABLISHMENT.— 
(A) IN GENERAL.—There is established in 
the Treasury of the United States a trust fund 
to be known as the ‘‘Retiree Reserve Trust 
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Fund’’ (referred to in this section as the ‘‘Trust 
Fund’’), that shall consist of such amounts as 
may be appropriated or credited to the Trust 
Fund as provided for in this subsection to en-
able the Secretary to carry out the reinsurance 
program. Such amounts shall remain available 
until expended. 
(B) FUNDING.—There are hereby appro-
priated to the Trust Fund, out of any moneys 
in the Treasury not otherwise appropriated, an 
amount requested by the Secretary as necessary 
to carry out this section, except that the total 
of all such amounts requested shall not exceed 
$10,000,000,000. 
(C) APPROPRIATIONS
FROM
THE
TRUST 
FUND.— 
(i) IN
GENERAL.—Amounts in the 
Trust Fund are appropriated to provide 
funding to carry out the reinsurance pro-
gram and shall be used to carry out such 
program. 
(ii) 
LIMITATION
TO
AVAILABLE 
FUNDS.—The Secretary has the authority 
to stop taking applications for participa-
tion in the program or take such other 
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steps in reducing expenditures under the 
reinsurance program in order to ensure 
that expenditures under the reinsurance 
program do not exceed the funds available 
under this subsection. 
SEC. 112. WELLNESS PROGRAM GRANTS. 
(a) ALLOWANCE OF GRANT.— 
(1) IN GENERAL.—For purposes of this section, 
the Secretaries of Health and Human Services and 
Labor shall jointly award wellness grants as deter-
mined under this section. Wellness program grants 
shall be awarded to small employers (as defined by 
the Secretary) for any plan year in an amount equal 
to 50 percent of the costs paid or incurred by such 
employers in connection with a qualified wellness 
program during the plan year. For purposes of the 
preceding sentence, in the case of any qualified 
wellness program offered as part of an employment- 
based health plan, only costs attributable to the 
qualified wellness program and not to the health 
plan, or health insurance coverage offered in connec-
tion with such a plan, may be taken into account. 
(2) LIMITATIONS.— 
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(A) PERIOD.—A wellness grant awarded to 
an employer under this section shall be for up 
to 3 years. 
(B) AMOUNT.—The amount of the grant 
under paragraph (1) for an employer shall not 
exceed— 
(i) the product of $150 and the num-
ber of employees of the employer for any 
plan year; and 
(ii) $50,000 for the entire period of 
the grant. 
(b) QUALIFIED WELLNESS PROGRAM.—For purposes 
of this section: 
(1) QUALIFIED
WELLNESS
PROGRAM.—The 
term ‘‘qualified wellness program’’ means a program 
that— 
(A) includes any 3 wellness components de-
scribed in subsection (c); and 
(B) is to be certified jointly by the Sec-
retary of Health and Human Services and the 
Secretary of Labor, in coordination with the Di-
rector of the Centers for Disease Control and 
Prevention, as a qualified wellness program 
under this section. 
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(2) PROGRAMS MUST BE CONSISTENT WITH RE-
SEARCH AND BEST PRACTICES.— 
(A) 
IN
GENERAL.—The 
Secretary 
of 
Health and Human Services and the Secretary 
of Labor shall not certify a program as a quali-
fied wellness program unless the program— 
(i) is consistent with evidence-based 
research and best practices, as identified 
by persons with expertise in employer 
health promotion and wellness programs; 
(ii) includes multiple, evidence-based 
strategies which are based on the existing 
and emerging research and careful sci-
entific reviews, including the Guide to 
Community 
Preventative 
Services, 
the 
Guide to Clinical Preventative Services, 
and the National Registry for Effective 
Programs; and 
(iii) includes strategies which focus on 
prevention and support for employee popu-
lations at risk of poor health outcomes. 
(B) PERIODIC UPDATING AND REVIEW.— 
The Secretaries of Health and Human Services 
and Labor, in consultation with other appro-
priate agencies shall jointly establish procedures 
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for periodic review, evaluation, and update of 
the programs under this subsection. 
(3) HEALTH LITERACY AND ACCESSIBILITY.— 
The Secretaries of Health and Human Services and 
Labor shall jointly, as part of the certification proc-
ess— 
(A) ensure that employers make the pro-
grams culturally competent, physically and pro-
grammatically accessible (including for individ-
uals with disabilities), and appropriate to the 
health literacy needs of the employees covered 
by the programs; 
(B) require a health literacy component to 
provide special assistance and materials to em-
ployees with low literacy skills, limited English 
and from underserved populations; and 
(C) require the Secretaries to compile and 
disseminate to employer health plans informa-
tion on model health literacy curricula, instruc-
tional programs, and effective intervention 
strategies. 
(c) WELLNESS PROGRAM COMPONENTS.—For pur-
poses of this section, the wellness program components de-
scribed in this subsection are the following: 
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(1) 
HEALTH
AWARENESS
COMPONENT.—A 
health awareness component which provides for the 
following: 
(A) HEALTH EDUCATION.—The dissemina-
tion of health information which addresses the 
specific needs and health risks of employees. 
(B) HEALTH
SCREENINGS.—The oppor-
tunity for periodic screenings for health prob-
lems and referrals for appropriate follow-up 
measures. 
(2) EMPLOYEE
ENGAGEMENT
COMPONENT.— 
An employee engagement component which provides 
for the active engagement of employees in worksite 
wellness programs through worksite assessments and 
program planning, onsite delivery, evaluation, and 
improvement efforts. 
(3) BEHAVIORAL CHANGE COMPONENT.—A be-
havioral 
change 
component 
which 
encourages 
healthy living through counseling, seminars, on-line 
programs, self-help materials, or other programs 
which provide technical assistance and problem solv-
ing skills. Such component may include programs re-
lating to— 
(A) tobacco use; 
(B) obesity; 
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(C) stress management; 
(D) physical fitness; 
(E) nutrition; 
(F) substance abuse; 
(G) depression; and 
(H) mental health promotion. 
(4) SUPPORTIVE ENVIRONMENT COMPONENT.— 
A supportive environment component which includes 
the following: 
(A) ON-SITE POLICIES.—Policies and serv-
ices at the worksite which promote a healthy 
lifestyle, including policies relating to— 
(i) tobacco use at the worksite; 
(ii) the nutrition of food available at 
the worksite through cafeterias and vend-
ing options; 
(iii) minimizing stress and promoting 
positive mental health in the workplace; 
and 
(iv) the encouragement of physical ac-
tivity before, during, and after work hours. 
(d) PARTICIPATION REQUIREMENT.—No grant shall 
be allowed under subsection (a) unless the Secretaries of 
Health and Human Services and Labor, in consultation 
with other appropriate agencies, jointly certify, as a part 
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of any certification described in subsection (b), that each 
wellness program component of the qualified wellness pro-
gram— 
(1) shall be available to all employees of the 
employer; 
(2) shall not mandate participation by employ-
ees; and 
(3) may provide a financial reward for partici-
pation of an individual in such program so long as 
such reward is not tied to the premium or cost-shar-
ing of the individual under the health benefits plan. 
(e) PRIVACY PROTECTIONS.—Data gathered for pur-
poses of the employer wellness program may be used solely 
for the purposes of administering the program. The Secre-
taries of Health and Human Services and Labor shall de-
velop standards to ensure such data remain confidential 
and are not used for purposes beyond those for admin-
istering the program. 
(f) CERTAIN COSTS NOT INCLUDED.—For purposes 
of this section, costs paid or incurred by an employer for 
food or health insurance shall not be taken into account 
under subsection (a). 
(g) OUTREACH.—The Secretaries of Health and 
Human Services and Labor, in conjunction with other ap-
propriate agencies and members of the business commu-
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nity, shall jointly institute an outreach program to inform 
businesses about the availability of the wellness program 
grant as well as to educate businesses on how to develop 
programs according to recognized and promising practices 
and on how to measure the success of implemented pro-
grams. 
(h) EFFECTIVE DATE.—This section shall take effect 
on July 1, 2010. 
(i) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
SEC. 113. EXTENSION OF COBRA CONTINUATION COV-
ERAGE. 
(a) EXTENSION OF CURRENT PERIODS OF CONTINU-
ATION COVERAGE.— 
(1) IN GENERAL.—In the case of any individual 
who is, under a COBRA continuation coverage pro-
vision, covered under COBRA continuation coverage 
on or after the date of the enactment of this Act, 
the required period of any such coverage which has 
not subsequently terminated under the terms of such 
provision for any reason other than the expiration of 
a period of a specified number of months shall, not-
withstanding such provision and subject to sub-
section (b), extend to the earlier of the date on 
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which such individual becomes eligible for acceptable 
coverage or the date on which such individual be-
comes eligible for health insurance coverage through 
the Health Insurance Exchange (or a State-based 
Health Insurance Exchange operating in a State or 
group of States). 
(2) NOTICE.—As soon as practicable after the 
date of the enactment of this Act, the Secretary of 
Labor, in consultation with the Secretary of the 
Treasury and the Secretary of Health and Human 
Services, shall, in consultation with administrators 
of the group health plans (or other entities) that 
provide or administer the COBRA continuation cov-
erage involved, provide rules setting forth the form 
and manner in which prompt notice to individuals of 
the continued availability of COBRA continuation 
coverage to such individuals under paragraph (1). 
(b) CONTINUED EFFECT OF OTHER TERMINATING 
EVENTS.—Notwithstanding subsection (a), any required 
period of COBRA continuation coverage which is extended 
under such subsection shall terminate upon the occur-
rence, prior to the date of termination otherwise provided 
in such subsection, of any terminating event specified in 
the applicable continuation coverage provision other than 
the expiration of a period of a specified number of months. 
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(c) ACCESS
TO STATE HEALTH BENEFITS RISK 
POOLS.—This section shall supersede any provision of the 
law of a State or political subdivision thereof to the extent 
that such provision has the effect of limiting or precluding 
access by a qualified beneficiary whose COBRA continu-
ation coverage has been extended under this section to a 
State health benefits risk pool recognized by the Commis-
sioner for purposes of this section solely by reason of the 
extension of such coverage beyond the date on which such 
coverage otherwise would have expired. 
(d) DEFINITIONS.—For purposes of this section— 
(1) COBRA CONTINUATION
COVERAGE.—The 
term ‘‘COBRA continuation coverage’’ means con-
tinuation coverage provided pursuant to part 6 of 
subtitle B of title I of the Employee Retirement In-
come Security Act of 1974 (other than under section 
609), title XXII of the Public Health Service Act, 
section 4980B of the Internal Revenue Code of 1986 
(other than subsection (f)(1) of such section insofar 
as it relates to pediatric vaccines), or section 8905a 
of title 5, United States Code, or under a State pro-
gram that provides comparable continuation cov-
erage. Such term does not include coverage under a 
health flexible spending arrangement under a cafe-
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teria plan within the meaning of section 125 of the 
Internal Revenue Code of 1986. 
(2) COBRA CONTINUATION
PROVISION.—The 
term ‘‘COBRA continuation provision’’ means the 
provisions of law described in paragraph (1). 
SEC. 114. STATE HEALTH ACCESS PROGRAM GRANTS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall provide grants to States (as defined for pur-
poses of title XIX of the Social Security Act) to establish 
programs to expand access to affordable health care cov-
erage for the uninsured populations in that State in a 
manner consistent with reforms to take effect under this 
division in Y1. 
(b) TYPES OF PROGRAMS.—The types of programs 
for which grants are available under subsection (a) include 
the following: 
(1) STATE INSURANCE EXCHANGES.—State in-
surance exchanges that develop new, less expensive, 
portable benefit packages for small employers and 
part-time and seasonal workers. 
(2) COMMUNITY
COVERAGE
PROGRAM.—Com-
munity coverage with shared responsibility between 
employers, governmental or nonprofit entity, and the 
individual. 
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(3) REINSURANCE
PLAN
PROGRAM.—Reinsur-
ance plans that subsidize a certain share of carrier 
losses within a certain risk corridor health insurance 
premium assistance. 
(4) TRANSPARENT MARKETPLACE PROGRAM.— 
Transparent marketplace that provides an organized 
structure for the sale of insurance products such as 
a Web exchange or portal. 
(5) AUTOMATED
ENROLLMENT
PROGRAM.— 
Statewide or automated enrollment systems for pub-
lic assistance programs. 
(6) 
INNOVATIVE
STRATEGIES.—Innovative 
strategies to insure low-income childless adults. 
(7) PURCHASING
COLLABORATIVES.—Not-for- 
profit business/consumer collaborative that provides 
direct contract health care service purchasing op-
tions for group plan sponsors. 
(c) ELIGIBILITY AND ADMINISTRATION.— 
(1) IMPLEMENTATION OF KEY STATUTORY OR 
REGULATORY CHANGES.—In order to be awarded a 
grant under this section for a program, a State shall 
demonstrate that— 
(A) it has achieved the key State and local 
statutory or regulatory changes required to 
begin implementing the new program within 1 
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year after the initiation of funding under the 
grant; and 
(B) it will be able to sustain the program 
without Federal funding after the end of the 
period of the grant. 
(2) INELIGIBILITY.—A State that has already 
developed a comprehensive health insurance access 
program is not eligible for a grant under this sec-
tion. 
(3) APPLICATION REQUIRED.—No State shall 
receive a grant under this section unless the State 
has approved by the Secretary such an application, 
in such form and manner as the Secretary specifies. 
(4) ADMINISTRATION BASED ON CURRENT PRO-
GRAM.—The program under this section is intended 
to build on the State Health Access Program funded 
under the Omnibus Appropriations Act, 2009 (Pub-
lic Law 111–8). 
(d) FUNDING LIMITATIONS.— 
(1) IN GENERAL.—A grant under this section 
shall— 
(A) only be available for expenditures be-
fore Y1; and 
(B) only be used to supplement, and not 
supplant, funds otherwise provided. 
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(2) MATCHING FUND REQUIREMENT.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), no grant may be awarded to a State 
unless the State demonstrates the seriousness 
of its effort by matching at least 20 percent of 
the grant amount through non-Federal re-
sources, which may be a combination of State, 
local, private dollars from insurers, providers, 
and other private organizations. 
(B) WAIVER.—The Secretary may waive 
the requirement of subparagraph (A) if the 
State demonstrates to the Secretary financial 
hardship in complying with such requirement. 
(e) STUDY.—The Secretary shall review, study, and 
benchmark the progress and results of the programs fund-
ed under this section. 
(f) REPORT.—Each State receiving a grant under 
this section shall submit to the Secretary a report on best 
practices and lessons learned through the grant to inform 
the health reform coverage expansions under this division 
beginning in Y1. 
(g) FUNDING.—There are authorized to be appro-
priated such sums as may be necessary to carry out this 
section. 
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SEC. 115. ADMINISTRATIVE SIMPLIFICATION. 
(a) STANDARDIZING ELECTRONIC ADMINISTRATIVE 
TRANSACTIONS.— 
(1) IN GENERAL.—Part C of title XI of the So-
cial Security Act (42 U.S.C. 1320d et seq.) is 
amended by inserting after section 1173 the fol-
lowing new sections: 
‘‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE 
TRANSACTIONS. 
‘‘(a) STANDARDS FOR FINANCIAL AND ADMINISTRA-
TIVE TRANSACTIONS.— 
‘‘(1) IN GENERAL.—The Secretary shall adopt 
and regularly update standards consistent with the 
goals described in paragraph (2). 
‘‘(2) GOALS FOR FINANCIAL AND ADMINISTRA-
TIVE
TRANSACTIONS.—The goals for standards 
under paragraph (1) are that such standards shall, 
to the extent practicable— 
‘‘(A) be unique with no conflicting or re-
dundant standards; 
‘‘(B) be authoritative, permitting no addi-
tions or constraints for electronic transactions, 
including companion guides; 
‘‘(C) be comprehensive, efficient and ro-
bust, requiring minimal augmentation by paper 
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transactions or clarification by further commu-
nications; 
‘‘(D) enable the real-time (or near real- 
time) determination of an individual’s financial 
responsibility at the point of service and, to the 
extent possible, prior to service, including 
whether the individual is eligible for a specific 
service with a specific physician at a specific fa-
cility, on a specific date or range of dates, in-
clude utilization of a machine-readable health 
plan beneficiary identification card or similar 
mechanism; 
‘‘(E) enable, where feasible, near real-time 
adjudication of claims; 
‘‘(F) provide for timely acknowledgment, 
response, and status reporting applicable to any 
electronic transaction deemed appropriate by 
the Secretary; 
‘‘(G) describe all data elements (such as 
reason and remark codes) in unambiguous 
terms, not permit optional fields, require that 
data elements be either required or conditioned 
upon set values in other fields, and prohibit ad-
ditional conditions except where required by (or 
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to implement) State or Federal law or to pro-
tect against fraud and abuse; and 
‘‘(H) harmonize all common data elements 
across administrative and clinical transaction 
standards. 
‘‘(3) TIME FOR ADOPTION.—Not later than 2 
years after the date of the enactment of this section, 
the Secretary shall adopt standards under this sec-
tion by interim, final rule. 
‘‘(4) REQUIREMENTS
FOR
SPECIFIC
STAND-
ARDS.—The standards under this section shall be 
developed, adopted, and enforced so as to— 
‘‘(A) clarify, refine, complete, and expand, 
as needed, the standards required under section 
1173; 
‘‘(B) require paper versions of standard-
ized transactions to comply with the same 
standards as to data content such that a fully 
compliant, equivalent electronic transaction can 
be populated from the data from a paper 
version; 
‘‘(C) enable electronic funds transfers, in 
order to allow automated reconciliation with the 
related health care payment and remittance ad-
vice; 
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‘‘(D) require timely and transparent claim 
and denial management processes, including 
uniform claim edits, uniform reason and remark 
denial codes, tracking, adjudication, and appeal 
processing; 
‘‘(E) require the use of a standard elec-
tronic transaction with which health care pro-
viders may quickly and efficiently enroll with a 
health plan to conduct the other electronic 
transactions provided for in this part; and 
‘‘(F) provide for other requirements relat-
ing to administrative simplification as identified 
by the Secretary, in consultation with stake-
holders. 
‘‘(5) BUILDING ON EXISTING STANDARDS.—In 
adopting the standards under this section, the Sec-
retary shall consider existing and planned standards. 
‘‘(6) IMPLEMENTATION AND ENFORCEMENT.— 
Not later than 6 months after the date of the enact-
ment of this section, the Secretary shall submit to 
the appropriate committees of Congress a plan for 
the implementation and enforcement, by not later 
than 5 years after such date of enactment, of the 
standards under this section. Such plan shall in-
clude— 
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‘‘(A) a process and timeframe with mile-
stones for developing the complete set of stand-
ards; 
‘‘(B) a proposal for accommodating nec-
essary changes between version changes and a 
process for upgrading standards as often as an-
nually by interim, final rulemaking; 
‘‘(C) programs to provide incentives for, 
and ease the burden of, implementation for cer-
tain health care providers, with special consid-
eration given to such providers serving rural or 
underserved areas and ensure coordination with 
standards, implementation specifications, and 
certification criteria being adopted under the 
HITECH Act; 
‘‘(D) programs to provide incentives for, 
and ease the burden of, health care providers 
who volunteer to participate in the process of 
setting standards for electronic transactions; 
‘‘(E) an estimate of total funds needed to 
ensure timely completion of the implementation 
plan; and 
‘‘(F) an enforcement process that includes 
timely investigation of complaints, random au-
dits to ensure compliance, civil monetary and 
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programmatic penalties for noncompliance con-
sistent with existing laws and regulations, and 
a fair and reasonable appeals process building 
off of enforcement provisions under this part, 
and concurrent State enforcement jurisdiction. 
The Secretary may promulgate an annual audit and 
certification process to ensure that all health plans 
and clearinghouses are both syntactically and func-
tionally compliant with all the standard transactions 
mandated pursuant to the administrative simplifica-
tion provisions of this part and the Health Insurance 
Portability and Accountability Act of 1996. 
‘‘(b) LIMITATIONS ON USE OF DATA.—Nothing in 
this section shall be construed to permit the use of infor-
mation collected under this section in a manner that would 
violate State or Federal law. 
‘‘(c) PROTECTION OF DATA.—The Secretary shall en-
sure (through the promulgation of regulations or other-
wise) that all data collected pursuant to subsection (a) are 
used and disclosed in a manner that meets the HIPAA 
privacy and security law (as defined in section 3009(a)(2) 
of the Public Health Service Act), including any privacy 
or security standard adopted under section 3004 of such 
Act. 
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‘‘SEC. 1173B. INTERIM COMPANION GUIDES, INCLUDING OP-
ERATING RULES. 
‘‘(a) IN GENERAL.—The Secretary shall adopt a sin-
gle, binding, comprehensive companion guide, that in-
cludes operating rules for each X12 Version 5010 trans-
action described in section 1173(a)(2), to be effective until 
the new version of these transactions which comply with 
section 1173A are adopted and implemented. 
‘‘(b) COMPANION GUIDE
AND OPERATING RULES 
DEVELOPMENT.—In adopting such interim companion 
guide and rules, the Secretary shall comply with section 
1172, except that a nonprofit entity that meets the fol-
lowing criteria shall also be consulted: 
‘‘(1) The entity focuses its mission on adminis-
trative simplification. 
‘‘(2) The entity uses a multistakeholder process 
that creates consensus-based companion guides, in-
cluding operating rules using a voting process that 
ensures balanced representation by the critical 
stakeholders (including health plans and health care 
providers) so that no one group dominates the entity 
and shall include others such as standards develop-
ment organizations, and relevant Federal or State 
agencies. 
‘‘(3) The entity has in place a public set of 
guiding principles that ensure the companion guide 
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and operating rules and process are open and trans-
parent. 
‘‘(4) The entity coordinates its activities with 
the HIT Policy Committee, and the HIT Standards 
Committee (established under title XXX of the Pub-
lic Health Service Act) and complements the efforts 
of the Office of the National Healthcare Coordinator 
and its related health information exchange goals. 
‘‘(5) The entity incorporates the standards 
issued under Health Insurance Portability and Ac-
countability Act of 1996 and this part, and in devel-
oping the companion guide and operating rules does 
not change the definition, data condition or use of 
a data element or segment in a standard, add any 
elements or segments to the maximum defined data 
set, use any codes or data elements that are either 
marked ‘not used’ in the standard’s implementation 
specifications or are not in the standard’s implemen-
tation specifications, or change the meaning or in-
tent of the standard’s implementation specifications. 
‘‘(6) The entity uses existing market research 
and proven best practices. 
‘‘(7) The entity has a set of measures that 
allow for the evaluation of their market impact and 
public reporting of aggregate stakeholder impact. 
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‘‘(8) The entity supports nondiscrimination and 
conflict of interest policies that demonstrate a com-
mitment to open, fair, and nondiscriminatory prac-
tices. 
‘‘(9) The entity allows for public reviews and 
comment on updates of the companion guide, includ-
ing the operating rules. 
‘‘(c) IMPLEMENTATION.—The Secretary shall adopt 
a single, binding companion guide, including operating 
rules under this section, for each transaction, to become 
effective with the X12 Version 5010 transaction imple-
mentation, or as soon thereafter as feasible. The com-
panion guide, including operating rules for the trans-
actions for eligibility for health plan and health claims sta-
tus under this section shall be adopted not later than Oc-
tober 1, 2011, in a manner such that such set of rules 
is effective beginning not later than January 1, 2013. The 
companion guide, including operating rules for the remain-
der of the transactions described in section 1173(a)(2) 
shall be adopted not later than October 1, 2012, in a man-
ner such that such set of rules is effective beginning not 
later than January 1, 2014.’’. 
(2) DEFINITIONS.—Section 1171 of such Act 
(42 U.S.C. 1320d) is amended— 
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(A) in paragraph (1), by inserting ‘‘, and 
associated operational guidelines and instruc-
tions, as determined appropriate by the Sec-
retary’’ after ‘‘medical procedure codes’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(10) OPERATING
RULES.—The term ‘oper-
ating rules’ means business rules for using and proc-
essing transactions, such as service level require-
ments, which do not impact the implementation 
specifications or other data content requirements.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
1179(a) of such Act (42 U.S.C. 1320d–8(a)) is 
amended, in the matter before paragraph (1)— 
(A) by inserting ‘‘on behalf of an indi-
vidual’’ after ‘‘1978)’’; and 
(B) by inserting ‘‘on behalf of an indi-
vidual’’ after ‘‘for a financial institution’’. 
(b) STANDARDS
FOR CLAIMS ATTACHMENTS
AND 
COORDINATION OF BENEFITS.— 
(1) STANDARD FOR HEALTH CLAIMS ATTACH-
MENTS.—Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and 
Human Services shall promulgate an interim, final 
rule to establish a standard for health claims attach-
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ment transaction described in section 1173(a)(2)(B) 
of the Social Security Act (42 U.S.C. 1320d– 
2(a)(2)(B)) and coordination of benefits. 
(2) REVISION IN PROCESSING PAYMENT TRANS-
ACTIONS BY FINANCIAL INSTITUTIONS.— 
(A) IN GENERAL.—Section 1179 of the So-
cial Security Act (42 U.S.C. 1320d–8) is 
amended, in the matter before paragraph (1)— 
(i) by striking ‘‘or is engaged’’ and in-
serting ‘‘and is engaged’’; and 
(ii) by inserting ‘‘(other than as a 
business associate for a covered entity)’’ 
after ‘‘for a financial institution’’. 
(B) COMPLIANCE
DATE.—The amend-
ments made by subparagraph (A) shall apply to 
transactions occurring on or after such date 
(not later than January 1, 2014) as the Sec-
retary of Health and Human Services shall 
specify. 
(c) STANDARDS FOR FIRST REPORT OF INJURY.— 
Not later than January 1, 2014, the Secretary of Health 
and Human Services shall promulgate an interim final 
rule to establish a standard for the first report of injury 
transaction described in section 1173(a)(2)(G) of the So-
cial Security Act (42 U.S.C. 1320d–2(a)(2)(G)). 
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(d) UNIQUE HEALTH PLAN IDENTIFIER.—Not later 
October 1, 2012, the Secretary of Health and Human 
Services shall promulgate an interim final rule to establish 
a unique health plan identifier described in section 
1173(b) of the Social Security Act (42 U.S.C. 1320d– 
2(b)) based on the input of the National Committee of 
Vital and Health Statistics and consultation with health 
plans, health care providers, and other interested parties. 
(e) EXPANSION OF ELECTRONIC TRANSACTIONS IN 
MEDICARE.—Section 1862(a) of the Social Security Act 
(42 U.S.C. 1395y(a)) is amended— 
(1) in paragraph (23), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (24), by striking the period 
and inserting ‘‘; or’’; and 
(3) by inserting after paragraph (24) the fol-
lowing new paragraph: 
‘‘(25) subject to subsection (h), not later than 
January 1, 2015, for which the payment is other 
than by electronic funds transfer (EFT) so long as 
the Secretary has adopted and implemented a stand-
ard for electronic funds transfer under section 
1173A.’’. 
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(f) EXPANSION
OF PENALTIES.—Section 1176 of 
such Act (42 U.S.C. 1320d–5) is amended by adding at 
the end the following new subsection: 
‘‘(c) EXPANSION
OF PENALTY AUTHORITY.—The 
Secretary may, in addition to the penalties provided under 
subsections (a) and (b), provide for the imposition of pen-
alties for violations of this part that are comparable— 
‘‘(1) in the case of health plans, to the sanc-
tions the Secretary is authorized to impose under 
part C or D of title XVIII in the case of a plan that 
violates a provision of such part; or 
‘‘(2) in the case of a health care provider, to 
the sanctions the Secretary is authorized to impose 
under part A, B, or D of title XVIII in the case of 
a health care provider that violations a provision of 
such part with respect to that provider.’’. 
TITLE 
II—PROTECTIONS 
AND 
STANDARDS FOR QUALIFIED 
HEALTH BENEFITS PLANS 
Subtitle A—General Standards 
SEC. 201. REQUIREMENTS REFORMING HEALTH INSUR-
ANCE MARKETPLACE. 
(a) PURPOSE.—The purpose of this title is to estab-
lish standards to ensure that new health insurance cov-
erage and employment-based health plans that are offered 
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meet standards guaranteeing access to affordable cov-
erage, essential benefits, and other consumer protections. 
(b) REQUIREMENTS FOR QUALIFIED HEALTH BENE-
FITS PLANS.—On or after the first day of Y1, a health 
benefits plan shall not be a qualified health benefits plan 
under this division unless the plan meets the applicable 
requirements of the following subtitles for the type of plan 
and plan year involved: 
(1) Subtitle B (relating to affordable coverage). 
(2) Subtitle C (relating to essential benefits). 
(3) Subtitle D (relating to consumer protec-
tion). 
(c) TERMINOLOGY.—In this division: 
(1) 
ENROLLMENT
IN
EMPLOYMENT-BASED 
HEALTH PLANS.—An individual shall be treated as 
being ‘‘enrolled’’ in an employment-based health 
plan if the individual is a participant or beneficiary 
(as such terms are defined in section 3(7) and 3(8), 
respectively, of the Employee Retirement Income Se-
curity Act of 1974) in such plan. 
(2) INDIVIDUAL AND GROUP HEALTH INSUR-
ANCE COVERAGE.—The terms ‘‘individual health in-
surance coverage’’ and ‘‘group health insurance cov-
erage’’ mean health insurance coverage offered in 
the individual market or large or small group mar-
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(8) Preventive services, including those services 
recommended with a grade of A or B by the Task 
Force on Clinical Preventive Services and those vac-
cines recommended for use by the Director of the 
Centers for Disease Control and Prevention. 
(9) Maternity care. 
(10) Well-baby and well-child care and oral 
health, vision, and hearing services, equipment, and 
supplies for children under 21 years of age. 
(11) Durable medical equipment, prosthetics, 
orthotics and related supplies. 
(c) REQUIREMENTS RELATING
TO COST-SHARING 
AND MINIMUM ACTUARIAL VALUE.— 
(1) NO COST-SHARING FOR PREVENTIVE SERV-
ICES.—There shall be no cost-sharing under the es-
sential benefits package for— 
(A) preventive items and services rec-
ommended with a grade of A or B by the Task 
Force on Clinical Preventive Services and those 
vaccines recommended for use by the Director 
of the Centers for Disease Control and Preven-
tion; or 
(B) well-baby and well-child care. 
(2) ANNUAL LIMITATION.— 
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tity shall provide for culturally and linguistically ap-
propriate communication and health services. 
(9) SPECIAL RULES WITH RESPECT TO INDIAN 
ENROLLEES
AND
INDIAN
HEALTH
CARE
PRO-
VIDERS.— 
(A) CHOICE
OF
PROVIDERS.—The entity 
shall— 
(i) demonstrate to the satisfaction of 
the Commissioner that it has contracted 
with a sufficient number of Indian health 
care providers to ensure timely access to 
covered services furnished by such pro-
viders to individual Indians through the 
entity’s Exchange-participating health ben-
efits plan; and 
(ii) agree to pay Indian health care 
providers, whether such providers are par-
ticipating or nonparticipating providers 
with respect to the entity, for covered serv-
ices provided to those enrollees who are eli-
gible to receive services from such pro-
viders at a rate that is not less than the 
level and amount of payment which the en-
tity would make for the services of a par-
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‘‘(A) The effect of home visitation pro-
grams on child and parent outcomes, including 
child maltreatment, child health and develop-
ment, school readiness, and links to community 
services. 
‘‘(B) The effectiveness of home visitation 
programs on different populations, including 
the extent to which the ability of programs to 
improve outcomes varies across programs and 
populations. 
‘‘(2) REPORTS TO THE CONGRESS.— 
‘‘(A) INTERIM
REPORT.—Within 3 years 
after the date of the enactment of this section, 
the Secretary shall submit to the Congress an 
interim report on the evaluation conducted pur-
suant to paragraph (1). 
‘‘(B) FINAL
REPORT.—Within 5 years 
after the date of the enactment of this section, 
the Secretary shall submit to the Congress a 
final report on the evaluation conducted pursu-
ant to paragraph (1). 
‘‘(k) ANNUAL REPORTS TO THE CONGRESS.—The 
Secretary shall submit annually to the Congress a report 
on the activities carried out using funds made available 
VerDate Nov 24 2008 
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hsrobinson on DSK69SOYB1PROD with BILLS