HR 3590 EAS/PP 
tion 2718(a) of the Public Health Service Act), eligi-
bility, availability, premium rates, and cost sharing 
with respect to such coverage options and be con-
sistent with the standards adopted for the uniform ex-
planation of coverage as provided for in section 2715 
of the Public Health Service Act. 
(2) USE OF FORMAT.—The Secretary shall uti-
lize the format developed under paragraph (1) in 
compiling information concerning coverage options on 
the Internet website established under subsection (a). 
(c) AUTHORITY TO CONTRACT.—The Secretary may 
carry out this section through contracts entered into with 
qualified entities. 
SEC. 1104. ADMINISTRATIVE SIMPLIFICATION. 
(a) PURPOSE OF ADMINISTRATIVE SIMPLIFICATION.— 
Section 261 of the Health Insurance Portability and Ac-
countability Act of 1996 (42 U.S.C. 1320d note) is amend-
ed— 
(1) by inserting ‘‘uniform’’ before ‘‘standards’’; 
and 
(2) by inserting ‘‘and to reduce the clerical bur-
den on patients, health care providers, and health 
plans’’ before the period at the end. 
(b) OPERATING RULES FOR HEALTH INFORMATION 
TRANSACTIONS.— 
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(1) DEFINITION OF OPERATING RULES.—Section 
1171 of the Social Security Act (42 U.S.C. 1320d) is 
amended by adding at the end the following: 
‘‘(9) OPERATING RULES.—The term ‘operating 
rules’ means the necessary business rules and guide-
lines for the electronic exchange of information that 
are not defined by a standard or its implementation 
specifications as adopted for purposes of this part.’’. 
(2) 
TRANSACTION
STANDARDS; 
OPERATING 
RULES AND COMPLIANCE.—Section 1173 of the Social 
Security Act (42 U.S.C. 1320d–2) is amended— 
(A) in subsection (a)(2), by adding at the 
end the following new subparagraph: 
‘‘(J) Electronic funds transfers.’’; 
(B) in subsection (a), by adding at the end 
the following new paragraph: 
‘‘(4) REQUIREMENTS FOR FINANCIAL AND ADMIN-
ISTRATIVE TRANSACTIONS.— 
‘‘(A) IN GENERAL.—The standards and as-
sociated operating rules adopted by the Secretary 
shall— 
‘‘(i) to the extent feasible and appro-
priate, enable determination of an individ-
ual’s eligibility and financial responsibility 
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for specific services prior to or at the point 
of care; 
‘‘(ii) be comprehensive, requiring mini-
mal augmentation by paper or other com-
munications; 
‘‘(iii) provide for timely acknowledg-
ment, response, and status reporting that 
supports a transparent claims and denial 
management process (including adjudica-
tion and appeals); and 
‘‘(iv) describe all data elements (in-
cluding reason and remark codes) in unam-
biguous terms, require that such data ele-
ments be required or conditioned upon set 
values in other fields, and prohibit addi-
tional conditions (except where necessary to 
implement State or Federal law, or to pro-
tect against fraud and abuse). 
‘‘(B) REDUCTION OF CLERICAL BURDEN.— 
In adopting standards and operating rules for 
the transactions referred to under paragraph (1), 
the Secretary shall seek to reduce the number 
and complexity of forms (including paper and 
electronic forms) and data entry required by pa-
tients and providers.’’; and 
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(C) by adding at the end the following new 
subsections: 
‘‘(g) OPERATING RULES.— 
‘‘(1) IN GENERAL.—The Secretary shall adopt a 
single set of operating rules for each transaction re-
ferred to under subsection (a)(1) with the goal of cre-
ating as much uniformity in the implementation of 
the electronic standards as possible. Such operating 
rules shall be consensus-based and reflect the necessary 
business rules affecting health plans and health care 
providers and the manner in which they operate pur-
suant to standards issued under Health Insurance 
Portability and Accountability Act of 1996. 
‘‘(2) OPERATING
RULES
DEVELOPMENT.—In 
adopting operating rules under this subsection, the 
Secretary shall consider recommendations for oper-
ating rules developed by a qualified nonprofit entity 
that meets the following requirements: 
‘‘(A) The entity focuses its mission on ad-
ministrative simplification. 
‘‘(B) The entity demonstrates a multi-stake-
holder and consensus-based process for develop-
ment of operating rules, including representation 
by or participation from health plans, health 
care providers, vendors, relevant Federal agen-
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cies, and other standard development organiza-
tions. 
‘‘(C) The entity has a public set of guiding 
principles that ensure the operating rules and 
process are open and transparent, and supports 
nondiscrimination and conflict of interest poli-
cies that demonstrate a commitment to open, 
fair, and nondiscriminatory practices. 
‘‘(D) The entity builds on the transaction 
standards issued under Health Insurance Port-
ability and Accountability Act of 1996. 
‘‘(E) The entity allows for public review 
and updates of the operating rules. 
‘‘(3) REVIEW AND RECOMMENDATIONS.—The Na-
tional Committee on Vital and Health Statistics 
shall— 
‘‘(A) advise the Secretary as to whether a 
nonprofit entity meets the requirements under 
paragraph (2); 
‘‘(B) review the operating rules developed 
and recommended by such nonprofit entity; 
‘‘(C) determine whether such operating rules 
represent a consensus view of the health care 
stakeholders and are consistent with and do not 
conflict with other existing standards; 
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‘‘(D) evaluate whether such operating rules 
are consistent with electronic standards adopted 
for health information technology; and 
‘‘(E) submit to the Secretary a rec-
ommendation as to whether the Secretary should 
adopt such operating rules. 
‘‘(4) IMPLEMENTATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
adopt operating rules under this subsection, by 
regulation in accordance with subparagraph (C), 
following consideration of the operating rules de-
veloped by the non-profit entity described in 
paragraph (2) and the recommendation sub-
mitted by the National Committee on Vital and 
Health Statistics under paragraph (3)(E) and 
having ensured consultation with providers. 
‘‘(B) ADOPTION REQUIREMENTS; EFFECTIVE 
DATES.— 
‘‘(i) ELIGIBILITY FOR A HEALTH PLAN 
AND
HEALTH
CLAIM
STATUS.—The set of 
operating rules for eligibility for a health 
plan and health claim status transactions 
shall be adopted not later than July 1, 
2011, in a manner ensuring that such oper-
ating rules are effective not later than Jan-
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uary 1, 2013, and may allow for the use of 
a machine readable identification card. 
‘‘(ii) ELECTRONIC FUNDS TRANSFERS 
AND HEALTH CARE PAYMENT AND REMIT-
TANCE ADVICE.—The set of operating rules 
for electronic funds transfers and health 
care payment and remittance advice trans-
actions shall— 
‘‘(I) allow for automated rec-
onciliation of the electronic payment 
with the remittance advice; and 
‘‘(II) be adopted not later than 
July 1, 2012, in a manner ensuring 
that such operating rules are effective 
not later than January 1, 2014. 
‘‘(iii) HEALTH CLAIMS OR EQUIVALENT 
ENCOUNTER
INFORMATION, 
ENROLLMENT 
AND DISENROLLMENT IN A HEALTH PLAN, 
HEALTH PLAN PREMIUM PAYMENTS, REFER-
RAL CERTIFICATION AND AUTHORIZATION.— 
The set of operating rules for health claims 
or equivalent encounter information, enroll-
ment and disenrollment in a health plan, 
health plan premium payments, and refer-
ral certification and authorization trans-
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actions shall be adopted not later than July 
1, 2014, in a manner ensuring that such 
operating rules are effective not later than 
January 1, 2016. 
‘‘(C) EXPEDITED RULEMAKING.—The Sec-
retary shall promulgate an interim final rule 
applying any standard or operating rule rec-
ommended by the National Committee on Vital 
and Health Statistics pursuant to paragraph 
(3). The Secretary shall accept and consider pub-
lic comments on any interim final rule published 
under this subparagraph for 60 days after the 
date of such publication. 
‘‘(h) COMPLIANCE.— 
‘‘(1) HEALTH PLAN CERTIFICATION.— 
‘‘(A) ELIGIBILITY
FOR
A
HEALTH
PLAN, 
HEALTH
CLAIM
STATUS, ELECTRONIC
FUNDS 
TRANSFERS, HEALTH CARE PAYMENT AND RE-
MITTANCE ADVICE.—Not later than December 31, 
2013, a health plan shall file a statement with 
the Secretary, in such form as the Secretary may 
require, certifying that the data and information 
systems for such plan are in compliance with 
any applicable standards (as described under 
paragraph (7) of section 1171) and associated 
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operating rules (as described under paragraph 
(9) of such section) for electronic funds transfers, 
eligibility for a health plan, health claim status, 
and health care payment and remittance advice, 
respectively. 
‘‘(B) HEALTH CLAIMS OR EQUIVALENT EN-
COUNTER
INFORMATION, 
ENROLLMENT
AND 
DISENROLLMENT IN A HEALTH PLAN, HEALTH 
PLAN PREMIUM PAYMENTS, HEALTH CLAIMS AT-
TACHMENTS, REFERRAL CERTIFICATION AND AU-
THORIZATION.—Not later than December 31, 
2015, a health plan shall file a statement with 
the Secretary, in such form as the Secretary may 
require, certifying that the data and information 
systems for such plan are in compliance with 
any applicable standards and associated oper-
ating rules for health claims or equivalent en-
counter 
information, 
enrollment 
and 
disenrollment in a health plan, health plan pre-
mium payments, health claims attachments, and 
referral certification and authorization, respec-
tively. A health plan shall provide the same level 
of documentation to certify compliance with such 
transactions as is required to certify compliance 
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with the transactions specified in subparagraph 
(A). 
‘‘(2) 
DOCUMENTATION
OF
COMPLIANCE.—A 
health plan shall provide the Secretary, in such form 
as the Secretary may require, with adequate docu-
mentation of compliance with the standards and op-
erating rules described under paragraph (1). A health 
plan shall not be considered to have provided ade-
quate documentation and shall not be certified as 
being in compliance with such standards, unless the 
health plan— 
‘‘(A) demonstrates to the Secretary that the 
plan conducts the electronic transactions speci-
fied in paragraph (1) in a manner that fully 
complies with the regulations of the Secretary; 
and 
‘‘(B) provides documentation showing that 
the plan has completed end-to-end testing for 
such transactions with their partners, such as 
hospitals and physicians. 
‘‘(3) SERVICE CONTRACTS.—A health plan shall 
be required to ensure that any entities that provide 
services pursuant to a contract with such health plan 
shall comply with any applicable certification and 
compliance requirements (and provide the Secretary 
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with adequate documentation of such compliance) 
under this subsection. 
‘‘(4) CERTIFICATION BY OUTSIDE ENTITY.—The 
Secretary may designate independent, outside entities 
to certify that a health plan has complied with the re-
quirements under this subsection, provided that the 
certification standards employed by such entities are 
in accordance with any standards or operating rules 
issued by the Secretary. 
‘‘(5) COMPLIANCE
WITH
REVISED
STANDARDS 
AND OPERATING RULES.— 
‘‘(A) IN GENERAL.—A health plan (includ-
ing entities described under paragraph (3)) shall 
file a statement with the Secretary, in such form 
as the Secretary may require, certifying that the 
data and information systems for such plan are 
in compliance with any applicable revised stand-
ards and associated operating rules under this 
subsection for any interim final rule promul-
gated by the Secretary under subsection (i) 
that— 
‘‘(i) amends any standard or operating 
rule described under paragraph (1) of this 
subsection; or 
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‘‘(ii) establishes a standard (as de-
scribed under subsection (a)(1)(B)) or asso-
ciated operating rules (as described under 
subsection (i)(5)) for any other financial 
and administrative transactions. 
‘‘(B) DATE OF COMPLIANCE.—A health plan 
shall comply with such requirements not later 
than the effective date of the applicable standard 
or operating rule. 
‘‘(6) AUDITS OF HEALTH PLANS.—The Secretary 
shall conduct periodic audits to ensure that health 
plans (including entities described under paragraph 
(3)) are in compliance with any standards and oper-
ating rules that are described under paragraph (1) or 
subsection (i)(5). 
‘‘(i) REVIEW AND AMENDMENT OF STANDARDS AND 
OPERATING RULES.— 
‘‘(1) ESTABLISHMENT.—Not later than January 
1, 2014, the Secretary shall establish a review com-
mittee (as described under paragraph (4)). 
‘‘(2) EVALUATIONS AND REPORTS.— 
‘‘(A) HEARINGS.—Not later than April 1, 
2014, and not less than biennially thereafter, the 
Secretary, acting through the review committee, 
shall conduct hearings to evaluate and review the 
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adopted standards and operating rules estab-
lished under this section. 
‘‘(B) REPORT.—Not later than July 1, 
2014, and not less than biennially thereafter, the 
review committee shall provide recommendations 
for updating and improving such standards and 
operating rules. The review committee shall rec-
ommend a single set of operating rules per trans-
action standard and maintain the goal of cre-
ating as much uniformity as possible in the im-
plementation of the electronic standards. 
‘‘(3) INTERIM FINAL RULEMAKING.— 
‘‘(A) IN GENERAL.—Any recommendations 
to amend adopted standards and operating rules 
that have been approved by the review committee 
and reported to the Secretary under paragraph 
(2)(B) shall be adopted by the Secretary through 
promulgation of an interim final rule not later 
than 90 days after receipt of the committee’s re-
port. 
‘‘(B) PUBLIC COMMENT.— 
‘‘(i) PUBLIC
COMMENT
PERIOD.—The 
Secretary shall accept and consider public 
comments on any interim final rule pub-
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lished under this paragraph for 60 days 
after the date of such publication. 
‘‘(ii) EFFECTIVE DATE.—The effective 
date of any amendment to existing stand-
ards or operating rules that is adopted 
through an interim final rule published 
under this paragraph shall be 25 months 
following the close of such public comment 
period. 
‘‘(4) REVIEW COMMITTEE.— 
‘‘(A) DEFINITION.—For the purposes of this 
subsection, the term ‘review committee’ means a 
committee chartered by or within the Depart-
ment of Health and Human services that has 
been designated by the Secretary to carry out 
this subsection, including— 
‘‘(i) the National Committee on Vital 
and Health Statistics; or 
‘‘(ii) any appropriate committee as de-
termined by the Secretary. 
‘‘(B) COORDINATION OF HIT STANDARDS.— 
In developing recommendations under this sub-
section, the review committee shall ensure coordi-
nation, as appropriate, with the standards that 
support the certified electronic health record tech-
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nology approved by the Office of the National 
Coordinator for Health Information Technology. 
‘‘(5) OPERATING RULES FOR OTHER STANDARDS 
ADOPTED BY THE SECRETARY.—The Secretary shall 
adopt a single set of operating rules (pursuant to the 
process described under subsection (g)) for any trans-
action for which a standard had been adopted pursu-
ant to subsection (a)(1)(B). 
‘‘(j) PENALTIES.— 
‘‘(1) PENALTY FEE.— 
‘‘(A) IN GENERAL.—Not later than April 1, 
2014, and annually thereafter, the Secretary 
shall assess a penalty fee (as determined under 
subparagraph (B)) against a health plan that 
has failed to meet the requirements under sub-
section (h) with respect to certification and docu-
mentation of compliance with— 
‘‘(i) the standards and associated oper-
ating rules described under paragraph (1) 
of such subsection; and 
‘‘(ii) a standard (as described under 
subsection (a)(1)(B)) and associated oper-
ating rules (as described under subsection 
(i)(5)) for any other financial and adminis-
trative transactions. 
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‘‘(B) FEE
AMOUNT.—Subject to subpara-
graphs (C), (D), and (E), the Secretary shall as-
sess a penalty fee against a health plan in the 
amount of $1 per covered life until certification 
is complete. The penalty shall be assessed per 
person covered by the plan for which its data 
systems for major medical policies are not in 
compliance and shall be imposed against the 
health plan for each day that the plan is not in 
compliance with the requirements under sub-
section (h). 
‘‘(C) ADDITIONAL PENALTY FOR MISREPRE-
SENTATION.—A health plan that knowingly pro-
vides inaccurate or incomplete information in a 
statement of certification or documentation of 
compliance under subsection (h) shall be subject 
to a penalty fee that is double the amount that 
would otherwise be imposed under this sub-
section. 
‘‘(D) ANNUAL FEE INCREASE.—The amount 
of the penalty fee imposed under this subsection 
shall be increased on an annual basis by the an-
nual percentage increase in total national health 
care expenditures, as determined by the Sec-
retary. 
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‘‘(E) PENALTY
LIMIT.—A penalty fee as-
sessed against a health plan under this sub-
section shall not exceed, on an annual basis— 
‘‘(i) an amount equal to $20 per cov-
ered life under such plan; or 
‘‘(ii) an amount equal to $40 per cov-
ered life under the plan if such plan has 
knowingly provided inaccurate or incom-
plete information (as described under sub-
paragraph (C)). 
‘‘(F) DETERMINATION OF COVERED INDIVID-
UALS.—The Secretary shall determine the num-
ber of covered lives under a health plan based 
upon the most recent statements and filings that 
have been submitted by such plan to the Securi-
ties and Exchange Commission. 
‘‘(2) NOTICE
AND
DISPUTE
PROCEDURE.—The 
Secretary shall establish a procedure for assessment of 
penalty fees under this subsection that provides a 
health plan with reasonable notice and a dispute reso-
lution procedure prior to provision of a notice of as-
sessment by the Secretary of the Treasury (as de-
scribed under paragraph (4)(B)). 
‘‘(3) PENALTY
FEE
REPORT.—Not later than 
May 1, 2014, and annually thereafter, the Secretary 
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shall provide the Secretary of the Treasury with a re-
port identifying those health plans that have been as-
sessed a penalty fee under this subsection. 
‘‘(4) COLLECTION OF PENALTY FEE.— 
‘‘(A) IN
GENERAL.—The Secretary of the 
Treasury, acting through the Financial Manage-
ment Service, shall administer the collection of 
penalty fees from health plans that have been 
identified by the Secretary in the penalty fee re-
port provided under paragraph (3). 
‘‘(B) NOTICE.—Not later than August 1, 
2014, and annually thereafter, the Secretary of 
the Treasury shall provide notice to each health 
plan that has been assessed a penalty fee by the 
Secretary under this subsection. Such notice 
shall include the amount of the penalty fee as-
sessed by the Secretary and the due date for pay-
ment of such fee to the Secretary of the Treasury 
(as described in subparagraph (C)). 
‘‘(C) PAYMENT DUE DATE.—Payment by a 
health plan for a penalty fee assessed under this 
subsection shall be made to the Secretary of the 
Treasury not later than November 1, 2014, and 
annually thereafter. 
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‘‘(D) UNPAID PENALTY FEES.—Any amount 
of a penalty fee assessed against a health plan 
under this subsection for which payment has not 
been made by the due date provided under sub-
paragraph (C) shall be— 
‘‘(i) increased by the interest accrued 
on such amount, as determined pursuant to 
the underpayment rate established under 
section 6621 of the Internal Revenue Code 
of 1986; and 
‘‘(ii) treated as a past-due, legally en-
forceable debt owed to a Federal agency for 
purposes of section 6402(d) of the Internal 
Revenue Code of 1986. 
‘‘(E) 
ADMINISTRATIVE
FEES.—Any 
fee 
charged or allocated for collection activities con-
ducted by the Financial Management Service 
will be passed on to a health plan on a pro-rata 
basis and added to any penalty fee collected from 
the plan.’’. 
(c) PROMULGATION OF RULES.— 
(1) UNIQUE
HEALTH
PLAN
IDENTIFIER.—The 
Secretary shall promulgate a final rule to establish a 
unique health plan identifier (as described in section 
1173(b) of the Social Security Act (42 U.S.C. 1320d– 
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2(b))) based on the input of the National Committee 
on Vital and Health Statistics. The Secretary may do 
so on an interim final basis and such rule shall be 
effective not later than October 1, 2012. 
(2) ELECTRONIC
FUNDS
TRANSFER.—The Sec-
retary shall promulgate a final rule to establish a 
standard for electronic funds transfers (as described 
in section 1173(a)(2)(J) of the Social Security Act, as 
added by subsection (b)(2)(A)). The Secretary may do 
so on an interim final basis and shall adopt such 
standard not later than January 1, 2012, in a man-
ner ensuring that such standard is effective not later 
than January 1, 2014. 
(3) HEALTH CLAIMS ATTACHMENTS.—The Sec-
retary shall promulgate a final rule to establish a 
transaction standard and a single set of associated 
operating rules for health claims attachments (as de-
scribed in section 1173(a)(2)(B) of the Social Secu-
rity Act (42 U.S.C. 1320d–2(a)(2)(B))) that is con-
sistent with the X12 Version 5010 transaction stand-
ards. The Secretary may do so on an interim final 
basis and shall adopt a transaction standard and a 
single set of associated operating rules not later than 
January 1, 2014, in a manner ensuring that such 
standard is effective not later than January 1, 2016. 
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(d) 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 the ‘‘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) not later than January 1, 2014, for which 
the payment is other than by electronic funds transfer 
(EFT) or an electronic remittance in a form as speci-
fied in ASC X12 835 Health Care Payment and Re-
mittance Advice or subsequent standard.’’. 
SEC. 1105. EFFECTIVE DATE. 
This subtitle shall take effect on the date of enactment 
of this Act. 
Subtitle C—Quality Health Insur-
ance Coverage for All Americans 
PART I—HEALTH INSURANCE MARKET REFORMS 
SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE 
ACT. 
Part A of title XXVII of the Public Health Service Act 
(42 U.S.C. 300gg et seq.), as amended by section 1001, is 
further amended— 
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(1) by striking the heading for subpart 1 and in-
serting the following: 
‘‘Subpart I—General Reform’’; 
(2)(A) in section 2701 (42 U.S.C. 300gg), by 
striking the section heading and subsection (a) and 
inserting the following: 
‘‘SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EX-
CLUSIONS 
OR 
OTHER 
DISCRIMINATION 
BASED ON HEALTH STATUS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering group or individual health insur-
ance coverage may not impose any preexisting condition 
exclusion with respect to such plan or coverage.’’; and 
(B) by transferring such section (as amended by 
subparagraph (A)) so as to appear after the section 
2703 added by paragraph (4); 
(3)(A) in section 2702 (42 U.S.C. 300gg–1)— 
(i) by striking the section heading and all 
that follows through subsection (a); 
(ii) in subsection (b)— 
(I) by striking ‘‘health insurance issuer 
offering health insurance coverage in con-
nection with a group health plan’’ each 
place that such appears and inserting 
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the adequacy of such areas for purposes of car-
rying out the requirements of this title. If the 
Secretary determines a State’s rating areas are 
not adequate, or that a State does not establish 
such areas, the Secretary may establish rating 
areas for that State. 
‘‘(3) PERMISSIBLE AGE BANDS.—The Secretary, 
in consultation with the National Association of In-
surance Commissioners, shall define the permissible 
age bands for rating purposes under paragraph 
(1)(A)(iii). 
‘‘(4) APPLICATION OF VARIATIONS BASED ON AGE 
OR TOBACCO USE.—With respect to family coverage 
under a group health plan or health insurance cov-
erage, the rating variations permitted under clauses 
(iii) and (iv) of paragraph (1)(A) shall be applied 
based on the portion of the premium that is attrib-
utable to each family member covered under the plan 
or coverage. 
‘‘(5) SPECIAL
RULE
FOR
LARGE
GROUP
MAR-
KET.—If a State permits health insurance issuers 
that offer coverage in the large group market in the 
State to offer such coverage through the State Ex-
change (as provided for under section 1312(f)(2)(B) of 
the Patient Protection and Affordable Care Act), the 
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provisions of this subsection shall apply to all cov-
erage offered in such market in the State. 
‘‘SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE. 
‘‘(a) GUARANTEED ISSUANCE OF COVERAGE IN THE 
INDIVIDUAL AND GROUP MARKET.—Subject to subsections 
(b) through (e), each health insurance issuer that offers 
health insurance coverage in the individual or group mar-
ket in a State must accept every employer and individual 
in the State that applies for such coverage. 
‘‘(b) ENROLLMENT.— 
‘‘(1) RESTRICTION.—A health insurance issuer 
described in subsection (a) may restrict enrollment in 
coverage described in such subsection to open or spe-
cial enrollment periods. 
‘‘(2) 
ESTABLISHMENT.—A 
health 
insurance 
issuer described in subsection (a) shall, in accordance 
with the regulations promulgated under paragraph 
(3), establish special enrollment periods for qualifying 
events (under section 603 of the Employee Retirement 
Income Security Act of 1974). 
‘‘(3) REGULATIONS.—The Secretary shall pro-
mulgate regulations with respect to enrollment periods 
under paragraphs (1) and (2). 
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‘‘SEC. 2703. GUARANTEED RENEWABILITY OF COVERAGE. 
‘‘(a) IN GENERAL.—Except as provided in this section, 
if a health insurance issuer offers health insurance coverage 
in the individual or group market, the issuer must renew 
or continue in force such coverage at the option of the plan 
sponsor or the individual, as applicable. 
‘‘SEC. 2705. PROHIBITING DISCRIMINATION AGAINST INDI-
VIDUAL PARTICIPANTS AND BENEFICIARIES 
BASED ON HEALTH STATUS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering group or individual health insur-
ance coverage may not establish rules for eligibility (includ-
ing continued eligibility) of any individual to enroll under 
the terms of the plan or coverage based on any of the fol-
lowing health status-related factors in relation to the indi-
vidual or a dependent of the individual: 
‘‘(1) Health status. 
‘‘(2) Medical condition (including both physical 
and mental illnesses). 
‘‘(3) Claims experience. 
‘‘(4) Receipt of health care. 
‘‘(5) Medical history. 
‘‘(6) Genetic information. 
‘‘(7) Evidence of insurability (including condi-
tions arising out of acts of domestic violence). 
‘‘(8) Disability. 
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‘‘(9) Any other health status-related factor deter-
mined appropriate by the Secretary. 
‘‘(j) PROGRAMS OF HEALTH PROMOTION OR DISEASE 
PREVENTION.— 
‘‘(1) GENERAL PROVISIONS.— 
‘‘(A) GENERAL RULE.—For purposes of sub-
section (b)(2)(B), a program of health promotion 
or disease prevention (referred to in this sub-
section as a ‘wellness program’) shall be a pro-
gram offered by an employer that is designed to 
promote health or prevent disease that meets the 
applicable requirements of this subsection. 
‘‘(B) NO
CONDITIONS
BASED
ON
HEALTH 
STATUS FACTOR.—If none of the conditions for 
obtaining a premium discount or rebate or other 
reward for participation in a wellness program 
is based on an individual satisfying a standard 
that is related to a health status factor, such 
wellness program shall not violate this section if 
participation in the program is made available 
to all similarly situated individuals and the re-
quirements of paragraph (2) are complied with. 
‘‘(C) CONDITIONS BASED ON HEALTH STA-
TUS FACTOR.—If any of the conditions for ob-
taining a premium discount or rebate or other 
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reward for participation in a wellness program 
is based on an individual satisfying a standard 
that is related to a health status factor, such 
wellness program shall not violate this section if 
the requirements of paragraph (3) are complied 
with. 
‘‘(2) WELLNESS PROGRAMS NOT SUBJECT TO RE-
QUIREMENTS.—If none of the conditions for obtaining 
a premium discount or rebate or other reward under 
a wellness program as described in paragraph (1)(B) 
are based on an individual satisfying a standard that 
is related to a health status factor (or if such a 
wellness program does not provide such a reward), the 
wellness program shall not violate this section if par-
ticipation in the program is made available to all 
similarly situated individuals. The following pro-
grams shall not have to comply with the requirements 
of paragraph (3) if participation in the program is 
made available to all similarly situated individuals: 
‘‘(A) A program that reimburses all or part 
of the cost for memberships in a fitness center. 
‘‘(B) A diagnostic testing program that pro-
vides a reward for participation and does not 
base any part of the reward on outcomes. 
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‘‘(C) A program that encourages preventive 
care related to a health condition through the 
waiver of the copayment or deductible require-
ment under group health plan for the costs of 
certain items or services related to a health con-
dition (such as prenatal care or well-baby visits). 
‘‘(D) A program that reimburses individ-
uals for the costs of smoking cessation programs 
without regard to whether the individual quits 
smoking. 
‘‘(E) A program that provides a reward to 
individuals for attending a periodic health edu-
cation seminar. 
‘‘(3) WELLNESS
PROGRAMS
SUBJECT
TO
RE-
QUIREMENTS.—If any of the conditions for obtaining 
a premium discount, rebate, or reward under a 
wellness program as described in paragraph (1)(C) is 
based on an individual satisfying a standard that is 
related to a health status factor, the wellness program 
shall not violate this section if the following require-
ments are complied with: 
‘‘(A) The reward for the wellness program, 
together with the reward for other wellness pro-
grams with respect to the plan that requires sat-
isfaction of a standard related to a health status 
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factor, shall not exceed 30 percent of the cost of 
employee-only coverage under the plan. If, in ad-
dition to employees or individuals, any class of 
dependents (such as spouses or spouses and de-
pendent children) may participate fully in the 
wellness program, such reward shall not exceed 
30 percent of the cost of the coverage in which 
an employee or individual and any dependents 
are enrolled. For purposes of this paragraph, the 
cost of coverage shall be determined based on the 
total amount of employer and employee contribu-
tions for the benefit package under which the em-
ployee is (or the employee and any dependents 
are) receiving coverage. A reward may be in the 
form of a discount or rebate of a premium or 
contribution, a waiver of all or part of a cost- 
sharing mechanism (such as deductibles, copay-
ments, or coinsurance), the absence of a sur-
charge, or the value of a benefit that would other-
wise not be provided under the plan. The Secre-
taries of Labor, Health and Human Services, 
and the Treasury may increase the reward avail-
able under this subparagraph to up to 50 percent 
of the cost of coverage if the Secretaries deter-
mine that such an increase is appropriate. 
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‘‘(B) The wellness program shall be reason-
ably designed to promote health or prevent dis-
ease. A program complies with the preceding sen-
tence if the program has a reasonable chance of 
improving the health of, or preventing disease in, 
participating individuals and it is not overly 
burdensome, is not a subterfuge for discrimi-
nating based on a health status factor, and is 
not highly suspect in the method chosen to pro-
mote health or prevent disease. 
‘‘(C) The plan shall give individuals eligible 
for the program the opportunity to qualify for 
the reward under the program at least once each 
year. 
‘‘(D) The full reward under the wellness 
program shall be made available to all similarly 
situated individuals. For such purpose, among 
other things: 
‘‘(i) The reward is not available to all 
similarly situated individuals for a period 
unless the wellness program allows— 
‘‘(I) for a reasonable alternative 
standard (or waiver of the otherwise 
applicable standard) for obtaining the 
reward for any individual for whom, 
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for that period, it is unreasonably dif-
ficult due to a medical condition to 
satisfy the otherwise applicable stand-
ard; and 
‘‘(II) for a reasonable alternative 
standard (or waiver of the otherwise 
applicable standard) for obtaining the 
reward for any individual for whom, 
for that period, it is medically inadvis-
able to attempt to satisfy the otherwise 
applicable standard. 
‘‘(ii) If reasonable under the cir-
cumstances, the plan or issuer may seek 
verification, such as a statement from an 
individual’s physician, that a health status 
factor makes it unreasonably difficult or 
medically inadvisable for the individual to 
satisfy or attempt to satisfy the otherwise 
applicable standard. 
‘‘(E) The plan or issuer involved shall dis-
close in all plan materials describing the terms 
of the wellness program the availability of a rea-
sonable alternative standard (or the possibility of 
waiver of the otherwise applicable standard) re-
quired under subparagraph (D). If plan mate-
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rials disclose that such a program is available, 
without describing its terms, the disclosure under 
this subparagraph shall not be required. 
‘‘(k) EXISTING PROGRAMS.—Nothing in this section 
shall prohibit a program of health promotion or disease pre-
vention that was established prior to the date of enactment 
of this section and applied with all applicable regulations, 
and that is operating on such date, from continuing to be 
carried out for as long as such regulations remain in effect. 
‘‘(l) 
WELLNESS
PROGRAM
DEMONSTRATION 
PROJECT.— 
‘‘(1) IN GENERAL.—Not later than July 1, 2014, 
the Secretary, in consultation with the Secretary of 
the Treasury and the Secretary of Labor, shall estab-
lish a 10-State demonstration project under which 
participating States shall apply the provisions of sub-
section (j) to programs of health promotion offered by 
a health insurance issuer that offers health insurance 
coverage in the individual market in such State. 
‘‘(2) 
EXPANSION
OF
DEMONSTRATION 
PROJECT.—If the Secretary, in consultation with the 
Secretary of the Treasury and the Secretary of Labor, 
determines that the demonstration project described in 
paragraph (1) is effective, such Secretaries may, be-
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ginning on July 1, 2017 expand such demonstration 
project to include additional participating States. 
‘‘(3) REQUIREMENTS.— 
‘‘(A) MAINTENANCE
OF
COVERAGE.—The 
Secretary, in consultation with the Secretary of 
the Treasury and the Secretary of Labor, shall 
not approve the participation of a State in the 
demonstration project under this section unless 
the Secretaries determine that the State’s project 
is designed in a manner that— 
‘‘(i) will not result in any decrease in 
coverage; and 
‘‘(ii) will not increase the cost to the 
Federal Government in providing credits 
under section 36B of the Internal Revenue 
Code of 1986 or cost-sharing assistance 
under section 1402 of the Patient Protection 
and Affordable Care Act. 
‘‘(B) OTHER REQUIREMENTS.—States that 
participate in the demonstration project under 
this subsection— 
‘‘(i) may permit premium discounts or 
rebates or the modification of otherwise ap-
plicable copayments or deductibles for ad-
herence to, or participation in, a reasonably 
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designed program of health promotion and 
disease prevention; 
‘‘(ii) shall ensure that requirements of 
consumer protection are met in programs of 
health promotion in the individual market; 
‘‘(iii) shall require verification from 
health insurance issuers that offer health in-
surance coverage in the individual market 
of such State that premium discounts— 
‘‘(I) do not create undue burdens 
for individuals insured in the indi-
vidual market; 
‘‘(II) do not lead to cost shifting; 
and 
‘‘(III) are not a subterfuge for dis-
crimination; 
‘‘(iv) shall ensure that consumer data 
is protected in accordance with the require-
ments of section 264(c) of the Health Insur-
ance Portability and Accountability Act of 
1996 (42 U.S.C. 1320d–2 note); and 
‘‘(v) shall ensure and demonstrate to 
the satisfaction of the Secretary that the 
discounts or other rewards provided under 
the project reflect the expected level of par-
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ticipation in the wellness program involved 
and the anticipated effect the program will 
have on utilization or medical claim costs. 
‘‘(m) REPORT.— 
‘‘(1) IN GENERAL.—Not later than 3 years after 
the date of enactment of the Patient Protection and 
Affordable Care Act, the Secretary, in consultation 
with the Secretary of the Treasury and the Secretary 
of Labor, shall submit a report to the appropriate 
committees of Congress concerning— 
‘‘(A) the effectiveness of wellness programs 
(as defined in subsection (j)) in promoting health 
and preventing disease; 
‘‘(B) the impact of such wellness programs 
on the access to care and affordability of cov-
erage for participants and non-participants of 
such programs; 
‘‘(C) the impact of premium-based and cost- 
sharing incentives on participant behavior and 
the role of such programs in changing behavior; 
and 
‘‘(D) the effectiveness of different types of re-
wards. 
‘‘(2) DATA COLLECTION.—In preparing the re-
port described in paragraph (1), the Secretaries shall 
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gather relevant information from employers who pro-
vide employees with access to wellness programs, in-
cluding State and Federal agencies. 
‘‘(n) REGULATIONS.—Nothing in this section shall be 
construed as prohibiting the Secretaries of Labor, Health 
and Human Services, or the Treasury from promulgating 
regulations in connection with this section. 
‘‘SEC. 2706. NON-DISCRIMINATION IN HEALTH CARE. 
‘‘(a) PROVIDERS.—A group health plan and a health 
insurance issuer offering group or individual health insur-
ance coverage shall not discriminate with respect to partici-
pation under the plan or coverage against any health care 
provider who is acting within the scope of that provider’s 
license or certification under applicable State law. This sec-
tion shall not require that a group health plan or health 
insurance issuer contract with any health care provider 
willing to abide by the terms and conditions for participa-
tion established by the plan or issuer. Nothing in this sec-
tion shall be construed as preventing a group health plan, 
a health insurance issuer, or the Secretary from establishing 
varying reimbursement rates based on quality or perform-
ance measures. 
‘‘(b) INDIVIDUALS.—The provisions of section 1558 of 
the Patient Protection and Affordable Care Act (relating 
to non-discrimination) shall apply with respect to a group 
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health plan or health insurance issuer offering group or in-
dividual health insurance coverage. 
‘‘SEC. 2707. COMPREHENSIVE HEALTH INSURANCE COV-
ERAGE. 
‘‘(a) COVERAGE FOR ESSENTIAL HEALTH BENEFITS 
PACKAGE.—A health insurance issuer that offers health in-
surance coverage in the individual or small group market 
shall ensure that such coverage includes the essential health 
benefits package required under section 1302(a) of the Pa-
tient Protection and Affordable Care Act. 
‘‘(b) 
COST-SHARING
UNDER
GROUP
HEALTH 
PLANS.—A group health plan shall ensure that any annual 
cost-sharing imposed under the plan does not exceed the 
limitations provided for under paragraphs (1) and (2) of 
section 1302(c). 
‘‘(c) CHILD-ONLY PLANS.—If a health insurance issuer 
offers health insurance coverage in any level of coverage 
specified under section 1302(d) of the Patient Protection 
and Affordable Care Act, the issuer shall also offer such cov-
erage in that level as a plan in which the only enrollees 
are individuals who, as of the beginning of a plan year, 
have not attained the age of 21. 
‘‘(d) DENTAL ONLY.—This section shall not apply to 
a plan described in section 1302(d)(2)(B)(ii)(I). 
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‘‘SEC. 2708. PROHIBITION ON EXCESSIVE WAITING PERIODS. 
‘‘A group health plan and a health insurance issuer 
offering group or individual health insurance coverage shall 
not apply any waiting period (as defined in section 
2704(b)(4)) that exceeds 90 days.’’. 
PART II—OTHER PROVISIONS 
SEC. 1251. PRESERVATION OF RIGHT TO MAINTAIN EXIST-
ING COVERAGE. 
(a) NO CHANGES TO EXISTING COVERAGE.— 
(1) IN GENERAL.—Nothing in this Act (or an 
amendment made by this Act) shall be construed to 
require that an individual terminate coverage under 
a group health plan or health insurance coverage in 
which such individual was enrolled on the date of en-
actment of this Act. 
(2) CONTINUATION OF COVERAGE.—With respect 
to a group health plan or health insurance coverage 
in which an individual was enrolled on the date of 
enactment of this Act, this subtitle and subtitle A 
(and the amendments made by such subtitles) shall 
not apply to such plan or coverage, regardless of 
whether the individual renews such coverage after 
such date of enactment. 
(b) ALLOWANCE FOR FAMILY MEMBERS TO JOIN CUR-
RENT COVERAGE.—With respect to a group health plan or 
health insurance coverage in which an individual was en-
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rolled on the date of enactment of this Act and which is 
renewed after such date, family members of such individual 
shall be permitted to enroll in such plan or coverage if such 
enrollment is permitted under the terms of the plan in effect 
as of such date of enactment. 
(c) ALLOWANCE FOR NEW EMPLOYEES TO JOIN CUR-
RENT PLAN.—A group health plan that provides coverage 
on the date of enactment of this Act may provide for the 
enrolling of new employees (and their families) in such 
plan, and this subtitle and subtitle A (and the amendments 
made by such subtitles) shall not apply with respect to such 
plan and such new employees (and their families). 
(d) EFFECT
ON COLLECTIVE BARGAINING AGREE-
MENTS.—In the case of health insurance coverage main-
tained pursuant to one or more collective bargaining agree-
ments between employee representatives and one or more 
employers that was ratified before the date of enactment of 
this Act, the provisions of this subtitle and subtitle A (and 
the amendments made by such subtitles) shall not apply 
until the date on which the last of the collective bargaining 
agreements relating to the coverage terminates. Any cov-
erage amendment made pursuant to a collective bargaining 
agreement relating to the coverage which amends the cov-
erage solely to conform to any requirement added by this 
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subtitle or subtitle A (or amendments) shall not be treated 
as a termination of such collective bargaining agreement. 
(e) DEFINITION.—In this title, the term ‘‘grand-
fathered health plan’’ means any group health plan or 
health insurance coverage to which this section applies. 
SEC. 1252. RATING REFORMS MUST APPLY UNIFORMLY TO 
ALL 
HEALTH 
INSURANCE 
ISSUERS 
AND 
GROUP HEALTH PLANS. 
Any standard or requirement adopted by a State pur-
suant to this title, or any amendment made by this title, 
shall be applied uniformly to all health plans in each insur-
ance market to which the standard and requirements apply. 
The preceding sentence shall also apply to a State standard 
or requirement relating to the standard or requirement re-
quired by this title (or any such amendment) that is not 
the same as the standard or requirement but that is not 
preempted under section 1321(d). 
SEC. 1253. EFFECTIVE DATES. 
This subtitle (and the amendments made by this sub-
title) shall become effective for plan years beginning on or 
after January 1, 2014. 
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Subtitle D—Available Coverage 
Choices for All Americans 
PART I—ESTABLISHMENT OF QUALIFIED HEALTH 
PLANS 
SEC. 1301. QUALIFIED HEALTH PLAN DEFINED. 
(a) QUALIFIED HEALTH PLAN.—In this title: 
(1) IN
GENERAL.—The term ‘‘qualified health 
plan’’ means a health plan that— 
(A) has in effect a certification (which may 
include a seal or other indication of approval) 
that such plan meets the criteria for certification 
described in section 1311(c) issued or recognized 
by each Exchange through which such plan is of-
fered; 
(B) provides the essential health benefits 
package described in section 1302(a); and 
(C) is offered by a health insurance issuer 
that— 
(i) is licensed and in good standing to 
offer health insurance coverage in each 
State in which such issuer offers health in-
surance coverage under this title; 
(ii) agrees to offer at least one quali-
fied health plan in the silver level and at 
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least one plan in the gold level in each such 
Exchange; 
(iii) agrees to charge the same pre-
mium rate for each qualified health plan of 
the issuer without regard to whether the 
plan is offered through an Exchange or 
whether the plan is offered directly from the 
issuer or through an agent; and 
(iv) complies with the regulations de-
veloped by the Secretary under section 
1311(d) and such other requirements as an 
applicable Exchange may establish. 
(2) INCLUSION OF CO-OP PLANS AND COMMUNITY 
HEALTH INSURANCE OPTION.—Any reference in this 
title to a qualified health plan shall be deemed to in-
clude a qualified health plan offered through the CO- 
OP program under section 1322 or a community 
health insurance option under section 1323, unless 
specifically provided for otherwise. 
(b) TERMS RELATING TO HEALTH PLANS.—In this 
title: 
(1) HEALTH PLAN.— 
(A) IN GENERAL.—The term ‘‘health plan’’ 
means health insurance coverage and a group 
health plan. 
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HR 3590 EAS/PP 
(B) EXCEPTION FOR SELF-INSURED PLANS 
AND MEWAS.—Except to the extent specifically 
provided by this title, the term ‘‘health plan’’ 
shall not include a group health plan or multiple 
employer welfare arrangement to the extent the 
plan or arrangement is not subject to State in-
surance regulation under section 514 of the Em-
ployee Retirement Income Security Act of 1974. 
(2) 
HEALTH
INSURANCE
COVERAGE
AND 
ISSUER.—The terms ‘‘health insurance coverage’’ and 
‘‘health insurance issuer’’ have the meanings given 
such terms by section 2791(b) of the Public Health 
Service Act. 
(3) GROUP
HEALTH
PLAN.—The term ‘‘group 
health plan’’ has the meaning given such term by sec-
tion 2791(a) of the Public Health Service Act. 
SEC. 1302. ESSENTIAL HEALTH BENEFITS REQUIREMENTS. 
(a) ESSENTIAL HEALTH BENEFITS PACKAGE.—In 
this title, the term ‘‘essential health benefits package’’ 
means, with respect to any health plan, coverage that— 
(1) provides for the essential health benefits de-
fined by the Secretary under subsection (b); 
(2) limits cost-sharing for such coverage in ac-
cordance with subsection (c); and 
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(3) subject to subsection (e), provides either the 
bronze, silver, gold, or platinum level of coverage de-
scribed in subsection (d). 
(b) ESSENTIAL HEALTH BENEFITS.— 
(1) IN GENERAL.—Subject to paragraph (2), the 
Secretary shall define the essential health benefits, ex-
cept that such benefits shall include at least the fol-
lowing general categories and the items and services 
covered within the categories: 
(A) Ambulatory patient services. 
(B) Emergency services. 
(C) Hospitalization. 
(D) Maternity and newborn care. 
(E) Mental health and substance use dis-
order services, including behavioral health treat-
ment. 
(F) Prescription drugs. 
(G) Rehabilitative and habilitative services 
and devices. 
(H) Laboratory services. 
(I) Preventive and wellness services and 
chronic disease management. 
(J) Pediatric services, including oral and 
vision care. 
(2) LIMITATION.— 
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(A) IN GENERAL.—The Secretary shall en-
sure that the scope of the essential health benefits 
under paragraph (1) is equal to the scope of ben-
efits provided under a typical employer plan, as 
determined by the Secretary. To inform this de-
termination, the Secretary of Labor shall con-
duct a survey of employer-sponsored coverage to 
determine the benefits typically covered by em-
ployers, including multiemployer plans, and pro-
vide a report on such survey to the Secretary. 
(B) CERTIFICATION.—In defining the essen-
tial health benefits described in paragraph (1), 
and in revising the benefits under paragraph 
(4)(H), the Secretary shall submit a report to the 
appropriate committees of Congress containing a 
certification from the Chief Actuary of the Cen-
ters for Medicare & Medicaid Services that such 
essential health benefits meet the limitation de-
scribed in paragraph (2). 
(3) NOTICE AND HEARING.—In defining the es-
sential health benefits described in paragraph (1), 
and in revising the benefits under paragraph (4)(H), 
the Secretary shall provide notice and an opportunity 
for public comment. 
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(4) 
REQUIRED
ELEMENTS
FOR
CONSIDER-
ATION.—In defining the essential health benefits 
under paragraph (1), the Secretary shall— 
(A) ensure that such essential health benefits 
reflect an appropriate balance among the cat-
egories described in such subsection, so that bene-
fits are not unduly weighted toward any cat-
egory; 
(B) not make coverage decisions, determine 
reimbursement rates, establish incentive pro-
grams, or design benefits in ways that discrimi-
nate against individuals because of their age, 
disability, or expected length of life; 
(C) take into account the health care needs 
of diverse segments of the population, including 
women, children, persons with disabilities, and 
other groups; 
(D) ensure that health benefits established 
as essential not be subject to denial to individ-
uals against their wishes on the basis of the indi-
viduals’ age or expected length of life or of the 
individuals’ present or predicted disability, de-
gree of medical dependency, or quality of life; 
(E) provide that a qualified health plan 
shall not be treated as providing coverage for the 
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HR 3590 EAS/PP 
essential health benefits described in paragraph 
(1) unless the plan provides that— 
(i) coverage for emergency department 
services will be provided without imposing 
any requirement under the plan for prior 
authorization of services or any limitation 
on coverage where the provider of services 
does not have a contractual relationship 
with the plan for the providing of services 
that is more restrictive than the require-
ments or limitations that apply to emer-
gency department services received from 
providers who do have such a contractual 
relationship with the plan; and 
(ii) if such services are provided out-of- 
network, the cost-sharing requirement (ex-
pressed as a copayment amount or coinsur-
ance rate) is the same requirement that 
would apply if such services were provided 
in-network; 
(F) provide that if a plan described in sec-
tion 1311(b)(2)(B)(ii) (relating to stand-alone 
dental benefits plans) is offered through an Ex-
change, another health plan offered through such 
Exchange shall not fail to be treated as a quali-
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fied health plan solely because the plan does not 
offer coverage of benefits offered through the 
stand-alone plan that are otherwise required 
under paragraph (1)(J); and 
(G) periodically review the essential health 
benefits under paragraph (1), and provide a re-
port to Congress and the public that contains— 
(i) an assessment of whether enrollees 
are facing any difficulty accessing needed 
services for reasons of coverage or cost; 
(ii) an assessment of whether the essen-
tial health benefits needs to be modified or 
updated to account for changes in medical 
evidence or scientific advancement; 
(iii) information on how the essential 
health benefits will be modified to address 
any such gaps in access or changes in the 
evidence base; 
(iv) an assessment of the potential of 
additional or expanded benefits to increase 
costs and the interactions between the addi-
tion or expansion of benefits and reductions 
in existing benefits to meet actuarial limi-
tations described in paragraph (2); and 
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(H) periodically update the essential health 
benefits under paragraph (1) to address any 
gaps in access to coverage or changes in the evi-
dence base the Secretary identifies in the review 
conducted under subparagraph (G). 
(5) RULE OF CONSTRUCTION.—Nothing in this 
title shall be construed to prohibit a health plan from 
providing benefits in excess of the essential health ben-
efits described in this subsection. 
(c) REQUIREMENTS RELATING TO COST-SHARING.— 
(1) ANNUAL LIMITATION ON COST-SHARING.— 
(A) 2014.—The cost-sharing incurred under 
a health plan with respect to self-only coverage 
or coverage other than self-only coverage for a 
plan year beginning in 2014 shall not exceed the 
dollar 
amounts 
in 
effect 
under 
section 
223(c)(2)(A)(ii) of the Internal Revenue Code of 
1986 for self-only and family coverage, respec-
tively, for taxable years beginning in 2014. 
(B) 2015 AND LATER.—In the case of any 
plan year beginning in a calendar year after 
2014, the limitation under this paragraph 
shall— 
(i) in the case of self-only coverage, be 
equal to the dollar amount under subpara-
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HR 3590 EAS/PP 
graph (A) for self-only coverage for plan 
years beginning in 2014, increased by an 
amount equal to the product of that amount 
and the premium adjustment percentage 
under paragraph (4) for the calendar year; 
and 
(ii) in the case of other coverage, twice 
the amount in effect under clause (i). 
If the amount of any increase under clause (i) 
is not a multiple of $50, such increase shall be 
rounded to the next lowest multiple of $50. 
(2) ANNUAL LIMITATION ON DEDUCTIBLES FOR 
EMPLOYER-SPONSORED PLANS.— 
(A) IN GENERAL.—In the case of a health 
plan offered in the small group market, the de-
ductible under the plan shall not exceed— 
(i) $2,000 in the case of a plan cov-
ering a single individual; and 
(ii) $4,000 in the case of any other 
plan. 
The amounts under clauses (i) and (ii) may be 
increased by the maximum amount of reimburse-
ment which is reasonably available to a partici-
pant under a flexible spending arrangement de-
scribed in section 106(c)(2) of the Internal Rev-
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HR 3590 EAS/PP 
enue Code of 1986 (determined without regard to 
any salary reduction arrangement). 
(B) INDEXING OF LIMITS.—In the case of 
any plan year beginning in a calendar year 
after 2014— 
(i) the dollar amount under subpara-
graph (A)(i) shall be increased by an 
amount equal to the product of that amount 
and the premium adjustment percentage 
under paragraph (4) for the calendar year; 
and 
(ii) the dollar amount under subpara-
graph (A)(ii) shall be increased to an 
amount equal to twice the amount in effect 
under subparagraph (A)(i) for plan years 
beginning in the calendar year, determined 
after application of clause (i). 
If the amount of any increase under clause (i) 
is not a multiple of $50, such increase shall be 
rounded to the next lowest multiple of $50. 
(C) ACTUARIAL
VALUE.—The limitation 
under this paragraph shall be applied in such a 
manner so as to not affect the actuarial value of 
any health plan, including a plan in the bronze 
level. 
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(D) COORDINATION WITH PREVENTIVE LIM-
ITS.—Nothing in this paragraph shall be con-
strued to allow a plan to have a deductible under 
the plan apply to benefits described in section 
2713 of the Public Health Service Act. 
(3) COST-SHARING.—In this title— 
(A) IN GENERAL.—The term ‘‘cost-sharing’’ 
includes— 
(i) deductibles, coinsurance, copay-
ments, or similar charges; and 
(ii) any other expenditure required of 
an insured individual which is a qualified 
medical expense (within the meaning of sec-
tion 223(d)(2) of the Internal Revenue Code 
of 1986) with respect to essential health ben-
efits covered under the plan. 
(B) EXCEPTIONS.—Such term does not in-
clude premiums, balance billing amounts for 
non-network providers, or spending for non-cov-
ered services. 
(4) PREMIUM ADJUSTMENT PERCENTAGE.—For 
purposes of paragraphs (1)(B)(i) and (2)(B)(i), the 
premium adjustment percentage for any calendar 
year is the percentage (if any) by which the average 
per capita premium for health insurance coverage in 
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HR 3590 EAS/PP 
the United States for the preceding calendar year (as 
estimated by the Secretary no later than October 1 of 
such preceding calendar year) exceeds such average 
per capita premium for 2013 (as determined by the 
Secretary). 
(d) LEVELS OF COVERAGE.— 
(1) LEVELS OF COVERAGE DEFINED.—The levels 
of coverage described in this subsection are as follows: 
(A) BRONZE LEVEL.—A plan in the bronze 
level shall provide a level of coverage that is de-
signed to provide benefits that are actuarially 
equivalent to 60 percent of the full actuarial 
value of the benefits provided under the plan. 
(B) SILVER LEVEL.—A plan in the silver 
level shall provide a level of coverage that is de-
signed to provide benefits that are actuarially 
equivalent to 70 percent of the full actuarial 
value of the benefits provided under the plan. 
(C) GOLD LEVEL.—A plan in the gold level 
shall provide a level of coverage that is designed 
to provide benefits that are actuarially equiva-
lent to 80 percent of the full actuarial value of 
the benefits provided under the plan. 
(D) PLATINUM LEVEL.—A plan in the plat-
inum level shall provide a level of coverage that 
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is designed to provide benefits that are actuari-
ally equivalent to 90 percent of the full actuarial 
value of the benefits provided under the plan. 
(2) ACTUARIAL VALUE.— 
(A) IN GENERAL.—Under regulations issued 
by the Secretary, the level of coverage of a plan 
shall be determined on the basis that the essential 
health benefits described in subsection (b) shall 
be provided to a standard population (and with-
out regard to the population the plan may actu-
ally provide benefits to). 
(B) EMPLOYER CONTRIBUTIONS.—The Sec-
retary may issue regulations under which em-
ployer contributions to a health savings account 
(within the meaning of section 223 of the Inter-
nal Revenue Code of 1986) may be taken into ac-
count in determining the level of coverage for a 
plan of the employer. 
(C) APPLICATION.—In determining under 
this title, the Public Health Service Act, or the 
Internal Revenue Code of 1986 the percentage of 
the total allowed costs of benefits provided under 
a group health plan or health insurance coverage 
that are provided by such plan or coverage, the 
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HR 3590 EAS/PP 
rules contained in the regulations under this 
paragraph shall apply. 
(3) ALLOWABLE VARIANCE.—The Secretary shall 
develop guidelines to provide for a de minimis vari-
ation in the actuarial valuations used in determining 
the level of coverage of a plan to account for dif-
ferences in actuarial estimates. 
(4) PLAN REFERENCE.—In this title, any ref-
erence to a bronze, silver, gold, or platinum plan shall 
be treated as a reference to a qualified health plan 
providing a bronze, silver, gold, or platinum level of 
coverage, as the case may be. 
(e) CATASTROPHIC PLAN.— 
(1) IN GENERAL.—A health plan not providing 
a bronze, silver, gold, or platinum level of coverage 
shall be treated as meeting the requirements of sub-
section (d) with respect to any plan year if— 
(A) the only individuals who are eligible to 
enroll in the plan are individuals described in 
paragraph (2); and 
(B) the plan provides— 
(i) except as provided in clause (ii), 
the essential health benefits determined 
under subsection (b), except that the plan 
provides no benefits for any plan year until 
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HR 3590 EAS/PP 
the individual has incurred cost-sharing ex-
penses in an amount equal to the annual 
limitation in effect under subsection (c)(1) 
for the plan year (except as provided for in 
section 2713); and 
(ii) coverage for at least three primary 
care visits. 
(2) INDIVIDUALS ELIGIBLE FOR ENROLLMENT.— 
An individual is described in this paragraph for any 
plan year if the individual— 
(A) has not attained the age of 30 before the 
beginning of the plan year; or 
(B) has a certification in effect for any plan 
year under this title that the individual is ex-
empt from the requirement under section 5000A 
of the Internal Revenue Code of 1986 by reason 
of— 
(i) section 5000A(e)(1) of such Code 
(relating to individuals without affordable 
coverage); or 
(ii) section 5000A(e)(5) of such Code 
(relating to individuals with hardships). 
(3) RESTRICTION TO INDIVIDUAL MARKET.—If a 
health insurance issuer offers a health plan described 
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in this subsection, the issuer may only offer the plan 
in the individual market. 
(f) CHILD-ONLY PLANS.—If a qualified health plan is 
offered through the Exchange in any level of coverage speci-
fied under subsection (d), the issuer shall also offer that 
plan through the Exchange in that level as a plan in which 
the only enrollees are individuals who, as of the beginning 
of a plan year, have not attained the age of 21, and such 
plan shall be treated as a qualified health plan. 
SEC. 1303. SPECIAL RULES. 
(a) SPECIAL RULES RELATING
TO COVERAGE
OF 
ABORTION SERVICES.— 
(1) VOLUNTARY CHOICE OF COVERAGE OF ABOR-
TION SERVICES.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of this title (or any amendment 
made by this title), and subject to subparagraphs 
(C) and (D)— 
(i) nothing in this title (or any amend-
ment made by this title), shall be construed 
to require a qualified health plan to provide 
coverage of services described in subpara-
graph (B)(i) or (B)(ii) as part of its essen-
tial health benefits for any plan year; and 
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(ii) the issuer of a qualified health 
plan shall determine whether or not the 
plan provides coverage of services described 
in subparagraph (B)(i) or (B)(ii) as part of 
such benefits for the plan year. 
(B) ABORTION SERVICES.— 
(i) ABORTIONS
FOR
WHICH
PUBLIC 
FUNDING IS PROHIBITED.—The services de-
scribed in this clause are abortions for 
which the expenditure of Federal funds ap-
propriated for the Department of Health 
and Human Services is not permitted, 
based on the law as in effect as of the date 
that is 6 months before the beginning of the 
plan year involved. 
(ii) ABORTIONS
FOR
WHICH
PUBLIC 
FUNDING
IS
ALLOWED.—The services de-
scribed in this clause are abortions for 
which the expenditure of Federal funds ap-
propriated for the Department of Health 
and Human Services is permitted, based on 
the law as in effect as of the date that is 6 
months before the beginning of the plan 
year involved. 
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(C) PROHIBITION ON FEDERAL FUNDS FOR 
ABORTION SERVICES IN COMMUNITY HEALTH IN-
SURANCE OPTION.— 
(i) DETERMINATION BY SECRETARY.— 
The Secretary may not determine, in ac-
cordance with subparagraph (A)(ii), that 
the community health insurance option es-
tablished under section 1323 shall provide 
coverage of services described in subpara-
graph (B)(i) as part of benefits for the plan 
year unless the Secretary— 
(I) assures compliance with the 
requirements of paragraph (2); 
(II) assures, in accordance with 
applicable provisions of generally ac-
cepted accounting requirements, circu-
lars on funds management of the Office 
of Management and Budget, and guid-
ance on accounting of the Government 
Accountability Office, that no Federal 
funds are used for such coverage; and 
(III) 
notwithstanding 
section 
1323(e)(1)(C) or any other provision of 
this title, takes all necessary steps to 
assure that the United States does not 
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bear the insurance risk for a commu-
nity health insurance option’s coverage 
of services described in subparagraph 
(B)(i). 
(ii) STATE REQUIREMENT.—If a State 
requires, in addition to the essential health 
benefits required under section 1323(b)(3) 
(A), coverage of services described in sub-
paragraph (B)(i) for enrollees of a commu-
nity health insurance option offered in such 
State, the State shall assure that no funds 
flowing through or from the community 
health insurance option, and no other Fed-
eral funds, pay or defray the cost of pro-
viding coverage of services described in sub-
paragraph (B)(i). The United States shall 
not bear the insurance risk for a State’s re-
quired coverage of services described in sub-
paragraph (B)(i). 
(iii) EXCEPTIONS.—Nothing in this 
subparagraph shall apply to coverage of 
services described in subparagraph (B)(ii) 
by the community health insurance option. 
Services described in subparagraph (B)(ii) 
shall be covered to the same extent as such 
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services are covered under title XIX of the 
Social Security Act. 
(D) ASSURED
AVAILABILITY
OF
VARIED 
COVERAGE THROUGH EXCHANGES.— 
(i) IN GENERAL.—The Secretary shall 
assure that with respect to qualified health 
plans offered in any Exchange established 
pursuant to this title— 
(I) there is at least one such plan 
that provides coverage of services de-
scribed in clauses (i) and (ii) of sub-
paragraph (B); and 
(II) there is at least one such plan 
that does not provide coverage of serv-
ices described in subparagraph (B)(i). 
(ii) SPECIAL RULES.—For purposes of 
clause (i)— 
(I) a plan shall be treated as de-
scribed in clause (i)(II) if the plan 
does not provide coverage of services 
described in either subparagraph (B)(i) 
or (B)(ii); and 
(II) if a State has one Exchange 
covering more than 1 insurance mar-
ket, the Secretary shall meet the re-
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quirements of clause (i) separately 
with respect to each such market. 
(2) PROHIBITION
ON
THE
USE
OF
FEDERAL 
FUNDS.— 
(A) IN
GENERAL.—If a qualified health 
plan provides coverage of services described in 
paragraph (1)(B)(i), the issuer of the plan shall 
not use any amount attributable to any of the 
following for purposes of paying for such serv-
ices: 
(i) The credit under section 36B of the 
Internal Revenue Code of 1986 (and the 
amount (if any) of the advance payment of 
the credit under section 1412 of the Patient 
Protection and Affordable Care Act). 
(ii) Any cost-sharing reduction under 
section 1402 of thePatient Protection and 
Affordable Care Act (and the amount (if 
any) of the advance payment of the reduc-
tion under section 1412 of the Patient Pro-
tection and Affordable Care Act). 
(B) SEGREGATION OF FUNDS.—In the case 
of a plan to which subparagraph (A) applies, the 
issuer of the plan shall, out of amounts not de-
scribed in subparagraph (A), segregate an 
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amount equal to the actuarial amounts deter-
mined under subparagraph (C) for all enrollees 
from the amounts described in subparagraph 
(A). 
(C) ACTUARIAL VALUE OF OPTIONAL SERV-
ICE COVERAGE.— 
(i) IN GENERAL.—The Secretary shall 
estimate the basic per enrollee, per month 
cost, determined on an average actuarial 
basis, for including coverage under a quali-
fied health plan of the services described in 
paragraph (1)(B)(i). 
(ii) 
CONSIDERATIONS.—In 
making 
such estimate, the Secretary— 
(I) may take into account the im-
pact on overall costs of the inclusion of 
such coverage, but may not take into 
account any cost reduction estimated 
to result from such services, including 
prenatal care, delivery, or postnatal 
care; 
(II) shall estimate such costs as if 
such coverage were included for the en-
tire population covered; and 
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HR 3590 EAS/PP 
(III) may not estimate such a cost 
at less than $1 per enrollee, per month. 
(3) PROVIDER
CONSCIENCE
PROTECTIONS.—No 
individual health care provider or health care facility 
may be discriminated against because of a willingness 
or an unwillingness, if doing so is contrary to the re-
ligious or moral beliefs of the provider or facility, to 
provide, pay for, provide coverage of, or refer for 
abortions. 
(b) APPLICATION OF STATE AND FEDERAL LAWS RE-
GARDING ABORTION.— 
(1) NO PREEMPTION OF STATE LAWS REGARDING 
ABORTION.—Nothing in this Act shall be construed to 
preempt or otherwise have any effect on State laws re-
garding the prohibition of (or requirement of) cov-
erage, funding, or procedural requirements on abor-
tions, including parental notification or consent for 
the performance of an abortion on a minor. 
(2) NO EFFECT ON FEDERAL LAWS REGARDING 
ABORTION.— 
(A) IN GENERAL.—Nothing in this Act shall 
be construed to have any effect on Federal laws 
regarding— 
(i) conscience protection; 
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HR 3590 EAS/PP 
(ii) willingness or refusal to provide 
abortion; and 
(iii) discrimination on the basis of the 
willingness or refusal to provide, pay for, 
cover, or refer for abortion or to provide or 
participate in training to provide abortion. 
(3) NO
EFFECT
ON
FEDERAL
CIVIL
RIGHTS 
LAW.—Nothing in this subsection shall alter the rights 
and obligations of employees and employers under 
title VII of the Civil Rights Act of 1964. 
(c) APPLICATION OF EMERGENCY SERVICES LAWS.— 
Nothing in this Act shall be construed to relieve any health 
care provider from providing emergency services as required 
by State or Federal law, including section 1867 of the So-
cial Security Act (popularly known as ‘‘EMTALA’’). 
SEC. 1304. RELATED DEFINITIONS. 
(a) DEFINITIONS RELATING TO MARKETS.—In this 
title: 
(1) GROUP MARKET.—The term ‘‘group market’’ 
means the health insurance market under which indi-
viduals obtain health insurance coverage (directly or 
through any arrangement) on behalf of themselves 
(and their dependents) through a group health plan 
maintained by an employer. 
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(2) INDIVIDUAL MARKET.—The term ‘‘individual 
market’’ means the market for health insurance cov-
erage offered to individuals other than in connection 
with a group health plan. 
(3) LARGE AND SMALL GROUP MARKETS.—The 
terms ‘‘large group market’’ and ‘‘small group mar-
ket’’ mean the health insurance market under which 
individuals obtain health insurance coverage (directly 
or through any arrangement) on behalf of themselves 
(and their dependents) through a group health plan 
maintained by a large employer (as defined in sub-
section (b)(1)) or by a small employer (as defined in 
subsection (b)(2)), respectively. 
(b) EMPLOYERS.—In this title: 
(1) LARGE
EMPLOYER.—The term ‘‘large em-
ployer’’ means, in connection with a group health 
plan with respect to a calendar year and a plan year, 
an employer who employed an average of at least 101 
employees on business days during the preceding cal-
endar year and who employs at least 1 employee on 
the first day of the plan year. 
(2) SMALL
EMPLOYER.—The term ‘‘small em-
ployer’’ means, in connection with a group health 
plan with respect to a calendar year and a plan year, 
an employer who employed an average of at least 1 
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HR 3590 EAS/PP 
but not more than 100 employees on business days 
during the preceding calendar year and who employs 
at least 1 employee on the first day of the plan year. 
(3) STATE OPTION TO TREAT 50 EMPLOYEES AS 
SMALL.—In the case of plan years beginning before 
January 1, 2016, a State may elect to apply this sub-
section by substituting ‘‘51 employees’’ for ‘‘101 em-
ployees’’ in paragraph (1) and by substituting ‘‘50 
employees’’ for ‘‘100 employees’’ in paragraph (2). 
(4) 
RULES
FOR
DETERMINING
EMPLOYER 
SIZE.—For purposes of this subsection— 
(A) APPLICATION
OF
AGGREGATION
RULE 
FOR EMPLOYERS.—All persons treated as a sin-
gle employer under subsection (b), (c), (m), or 
(o) of section 414 of the Internal Revenue Code 
of 1986 shall be treated as 1 employer. 
(B) EMPLOYERS NOT IN EXISTENCE IN PRE-
CEDING YEAR.—In the case of an employer which 
was not in existence throughout the preceding 
calendar year, the determination of whether such 
employer is a small or large employer shall be 
based on the average number of employees that 
it is reasonably expected such employer will em-
ploy on business days in the current calendar 
year. 
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(C) PREDECESSORS.—Any reference in this 
subsection to an employer shall include a ref-
erence to any predecessor of such employer. 
(D) CONTINUATION OF PARTICIPATION FOR 
GROWING SMALL EMPLOYERS.—If— 
(i) a qualified employer that is a small 
employer makes enrollment in qualified 
health plans offered in the small group mar-
ket available to its employees through an 
Exchange; and 
(ii) the employer ceases to be a small 
employer by reason of an increase in the 
number of employees of such employer; 
the employer shall continue to be treated as a 
small employer for purposes of this subtitle for 
the period beginning with the increase and end-
ing with the first day on which the employer 
does not make such enrollment available to its 
employees. 
(c) SECRETARY.—In this title, the term ‘‘Secretary’’ 
means the Secretary of Health and Human Services. 
(d) STATE.—In this title, the term ‘‘State’’ means each 
of the 50 States and the District of Columbia. 
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PART II—CONSUMER CHOICES AND INSURANCE 
COMPETITION THROUGH HEALTH BENEFIT 
EXCHANGES 
SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT 
PLANS. 
(a) ASSISTANCE TO STATES TO ESTABLISH AMERICAN 
HEALTH BENEFIT EXCHANGES.— 
(1) PLANNING AND ESTABLISHMENT GRANTS.— 
There shall be appropriated to the Secretary, out of 
any moneys in the Treasury not otherwise appro-
priated, an amount necessary to enable the Secretary 
to make awards, not later than 1 year after the date 
of enactment of this Act, to States in the amount 
specified in paragraph (2) for the uses described in 
paragraph (3). 
(2) AMOUNT SPECIFIED.—For each fiscal year, 
the Secretary shall determine the total amount that 
the Secretary will make available to each State for 
grants under this subsection. 
(3) USE OF FUNDS.—A State shall use amounts 
awarded under this subsection for activities (includ-
ing planning activities) related to establishing an 
American Health Benefit Exchange, as described in 
subsection (b). 
(4) RENEWABILITY OF GRANT.— 
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HR 3590 EAS/PP 
(A) IN
GENERAL.—Subject to subsection 
(d)(4), the Secretary may renew a grant award-
ed under paragraph (1) if the State recipient of 
such grant— 
(i) is making progress, as determined 
by the Secretary, toward— 
(I) establishing an Exchange; and 
(II) implementing the reforms de-
scribed in subtitles A and C (and the 
amendments made by such subtitles); 
and 
(ii) is meeting such other benchmarks 
as the Secretary may establish. 
(B) LIMITATION.—No grant shall be award-
ed under this subsection after January 1, 2015. 
(5) TECHNICAL ASSISTANCE TO FACILITATE PAR-
TICIPATION
IN
SHOP
EXCHANGES.—The Secretary 
shall provide technical assistance to States to facili-
tate the participation of qualified small businesses in 
such States in SHOP Exchanges. 
(b) AMERICAN HEALTH BENEFIT EXCHANGES.— 
(1) IN GENERAL.—Each State shall, not later 
than January 1, 2014, establish an American Health 
Benefit Exchange (referred to in this title as an ‘‘Ex-
change’’) for the State that— 
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(A) facilitates the purchase of qualified 
health plans; 
(B) provides for the establishment of a 
Small Business Health Options Program (in this 
title referred to as a ‘‘SHOP Exchange’’) that is 
designed to assist qualified employers in the 
State who are small employers in facilitating the 
enrollment of their employees in qualified health 
plans offered in the small group market in the 
State; and 
(C) meets the requirements of subsection (d). 
(2) MERGER
OF
INDIVIDUAL
AND
SHOP
EX-
CHANGES.—A State may elect to provide only one 
Exchange in the State for providing both Exchange 
and SHOP Exchange services to both qualified indi-
viduals and qualified small employers, but only if the 
Exchange has adequate resources to assist such indi-
viduals and employers. 
(c) RESPONSIBILITIES OF THE SECRETARY.— 
(1) IN GENERAL.—The Secretary shall, by regu-
lation, establish criteria for the certification of health 
plans as qualified health plans. Such criteria shall re-
quire that, to be certified, a plan shall, at a min-
imum— 
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(A) meet marketing requirements, and not 
employ marketing practices or benefit designs 
that have the effect of discouraging the enroll-
ment in such plan by individuals with signifi-
cant health needs; 
(B) ensure a sufficient choice of providers 
(in a manner consistent with applicable network 
adequacy provisions under section 2702(c) of the 
Public Health Service Act), and provide infor-
mation to enrollees and prospective enrollees on 
the availability of in-network and out-of-network 
providers; 
(C) include within health insurance plan 
networks those essential community providers, 
where available, that serve predominately low-in-
come, medically-underserved individuals, such as 
health 
care 
providers 
defined 
in 
section 
340B(a)(4) of the Public Health Service Act and 
providers 
described 
in 
section 
1927(c)(1)(D)(i)(IV) of the Social Security Act 
as set forth by section 221 of Public Law 111– 
8, except that nothing in this subparagraph shall 
be construed to require any health plan to pro-
vide coverage for any specific medical procedure; 
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(D)(i) be accredited with respect to local 
performance on clinical quality measures such as 
the Healthcare Effectiveness Data and Informa-
tion Set, patient experience ratings on a stand-
ardized Consumer Assessment of Healthcare Pro-
viders and Systems survey, as well as consumer 
access, utilization management, quality assur-
ance, provider credentialing, complaints and ap-
peals, network adequacy and access, and patient 
information programs by any entity recognized 
by the Secretary for the accreditation of health 
insurance issuers or plans (so long as any such 
entity has transparent and rigorous methodo-
logical and scoring criteria); or 
(ii) receive such accreditation within a pe-
riod established by an Exchange for such accred-
itation that is applicable to all qualified health 
plans; 
(E) implement a quality improvement 
strategy described in subsection (g)(1); 
(F) utilize a uniform enrollment form that 
qualified individuals and qualified employers 
may use (either electronically or on paper) in 
enrolling in qualified health plans offered 
through such Exchange, and that takes into ac-
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HR 3590 EAS/PP 
count criteria that the National Association of 
Insurance Commissioners develops and submits 
to the Secretary; 
(G) utilize the standard format established 
for presenting health benefits plan options; and 
(H) provide information to enrollees and 
prospective enrollees, and to each Exchange in 
which the plan is offered, on any quality meas-
ures for health plan performance endorsed under 
section 399JJ of the Public Health Service Act, 
as applicable. 
(2) RULE OF CONSTRUCTION.—Nothing in para-
graph (1)(C) shall be construed to require a qualified 
health plan to contract with a provider described in 
such paragraph if such provider refuses to accept the 
generally applicable payment rates of such plan. 
(3) RATING SYSTEM.—The Secretary shall de-
velop a rating system that would rate qualified health 
plans offered through an Exchange in each benefits 
level on the basis of the relative quality and price. 
The Exchange shall include the quality rating in the 
information provided to individuals and employers 
through the Internet portal established under para-
graph (4). 
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(4) ENROLLEE SATISFACTION SYSTEM.—The Sec-
retary shall develop an enrollee satisfaction survey 
system that would evaluate the level of enrollee satis-
faction with qualified health plans offered through an 
Exchange, for each such qualified health plan that 
had more than 500 enrollees in the previous year. The 
Exchange shall include enrollee satisfaction informa-
tion in the information provided to individuals and 
employers through the Internet portal established 
under paragraph (5) in a manner that allows indi-
viduals to easily compare enrollee satisfaction levels 
between comparable plans. 
(5) INTERNET PORTALS.—The Secretary shall— 
(A) continue to operate, maintain, and up-
date the Internet portal developed under section 
1103(a) and to assist States in developing and 
maintaining their own such portal; and 
(B) make available for use by Exchanges a 
model template for an Internet portal that may 
be used to direct qualified individuals and quali-
fied employers to qualified health plans, to assist 
such individuals and employers in determining 
whether they are eligible to participate in an 
Exchange or eligible for a premium tax credit or 
cost-sharing reduction, and to present standard-
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HR 3590 EAS/PP 
ized information (including quality ratings) re-
garding qualified health plans offered through an 
Exchange to assist consumers in making easy 
health insurance choices. 
Such template shall include, with respect to each 
qualified health plan offered through the Exchange in 
each rating area, access to the uniform outline of cov-
erage the plan is required to provide under section 
2716 of the Public Health Service Act and to a copy 
of the plan’s written policy. 
(6) ENROLLMENT PERIODS.—The Secretary shall 
require an Exchange to provide for— 
(A) an initial open enrollment, as deter-
mined by the Secretary (such determination to 
be made not later than July 1, 2012); 
(B) annual open enrollment periods, as de-
termined by the Secretary for calendar years 
after the initial enrollment period; 
(C) special enrollment periods specified in 
section 9801 of the Internal Revenue Code of 
1986 and other special enrollment periods under 
circumstances similar to such periods under part 
D of title XVIII of the Social Security Act; and 
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(D) special monthly enrollment periods for 
Indians (as defined in section 4 of the Indian 
Health Care Improvement Act). 
(d) REQUIREMENTS.— 
(1) IN GENERAL.—An Exchange shall be a gov-
ernmental agency or nonprofit entity that is estab-
lished by a State. 
(2) OFFERING OF COVERAGE.— 
(A) IN GENERAL.—An Exchange shall make 
available qualified health plans to qualified indi-
viduals and qualified employers. 
(B) LIMITATION.— 
(i) IN GENERAL.—An Exchange may 
not make available any health plan that is 
not a qualified health plan. 
(ii) OFFERING OF STAND-ALONE DEN-
TAL BENEFITS.—Each Exchange within a 
State shall allow an issuer of a plan that 
only provides limited scope dental benefits 
meeting 
the 
requirements 
of 
section 
9832(c)(2)(A) of the Internal Revenue Code 
of 1986 to offer the plan through the Ex-
change (either separately or in conjunction 
with a qualified health plan) if the plan 
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provides pediatric dental benefits meeting 
the requirements of section 1302(b)(1)(J)). 
(3) RULES RELATING TO ADDITIONAL REQUIRED 
BENEFITS.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), an Exchange may make 
available a qualified health plan notwith-
standing any provision of law that may require 
benefits other than the essential health benefits 
specified under section 1302(b). 
(B) STATES
MAY
REQUIRE
ADDITIONAL 
BENEFITS.— 
(i) IN
GENERAL.—Subject to the re-
quirements of clause (ii), a State may re-
quire that a qualified health plan offered in 
such State offer benefits in addition to the 
essential health benefits specified under sec-
tion 1302(b). 
(ii) STATE
MUST
ASSUME
COST.—A 
State shall make payments to or on behalf 
of an individual eligible for the premium 
tax credit under section 36B of the Internal 
Revenue Code of 1986 and any cost-sharing 
reduction under section 1402 to defray the 
cost to the individual of any additional ben-
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efits described in clause (i) which are not el-
igible for such credit or reduction under sec-
tion 36B(b)(3)(D) of such Code and section 
1402(c)(4). 
(4) FUNCTIONS.—An Exchange shall, at a min-
imum— 
(A) implement procedures for the certifi-
cation, recertification, and decertification, con-
sistent with guidelines developed by the Sec-
retary under subsection (c), of health plans as 
qualified health plans; 
(B) provide for the operation of a toll-free 
telephone hotline to respond to requests for assist-
ance; 
(C) maintain an Internet website through 
which enrollees and prospective enrollees of 
qualified health plans may obtain standardized 
comparative information on such plans; 
(D) assign a rating to each qualified health 
plan offered through such Exchange in accord-
ance with the criteria developed by the Secretary 
under subsection (c)(3); 
(E) utilize a standardized format for pre-
senting health benefits plan options in the Ex-
change, including the use of the uniform outline 
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HR 3590 EAS/PP 
of coverage established under section 2715 of the 
Public Health Service Act; 
(F) in accordance with section 1413, inform 
individuals of eligibility requirements for the 
medicaid program under title XIX of the Social 
Security Act, the CHIP program under title XXI 
of such Act, or any applicable State or local pub-
lic program and if through screening of the ap-
plication by the Exchange, the Exchange deter-
mines that such individuals are eligible for any 
such program, enroll such individuals in such 
program; 
(G) establish and make available by elec-
tronic means a calculator to determine the ac-
tual cost of coverage after the application of any 
premium tax credit under section 36B of the In-
ternal Revenue Code of 1986 and any cost-shar-
ing reduction under section 1402; 
(H) subject to section 1411, grant a certifi-
cation attesting that, for purposes of the indi-
vidual responsibility penalty under section 
5000A of the Internal Revenue Code of 1986, an 
individual is exempt from the individual re-
quirement or from the penalty imposed by such 
section because— 
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HR 3590 EAS/PP 
(i) there is no affordable qualified 
health plan available through the Exchange, 
or the individual’s employer, covering the 
individual; or 
(ii) the individual meets the require-
ments for any other such exemption from 
the individual responsibility requirement or 
penalty; 
(I) transfer to the Secretary of the Treas-
ury— 
(i) a list of the individuals who are 
issued a certification under subparagraph 
(H), including the name and taxpayer iden-
tification number of each individual; 
(ii) the name and taxpayer identifica-
tion number of each individual who was an 
employee of an employer but who was deter-
mined to be eligible for the premium tax 
credit under section 36B of the Internal 
Revenue Code of 1986 because— 
(I) the employer did not provide 
minimum essential coverage; or 
(II) the employer provided such 
minimum essential coverage but it was 
determined under section 36B(c)(2)(C) 
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HR 3590 EAS/PP 
of such Code to either be unaffordable 
to the employee or not provide the re-
quired minimum actuarial value; and 
(iii) the name and taxpayer identifica-
tion number of each individual who notifies 
the Exchange under section 1411(b)(4) that 
they have changed employers and of each 
individual who ceases coverage under a 
qualified health plan during a plan year 
(and the effective date of such cessation); 
(J) provide to each employer the name of 
each employee of the employer described in sub-
paragraph (I)(ii) who ceases coverage under a 
qualified health plan during a plan year (and 
the effective date of such cessation); and 
(K) establish the Navigator program de-
scribed in subsection (i). 
(5) FUNDING LIMITATIONS.— 
(A) NO FEDERAL FUNDS FOR CONTINUED 
OPERATIONS.—In 
establishing 
an 
Exchange 
under this section, the State shall ensure that 
such Exchange is self-sustaining beginning on 
January 1, 2015, including allowing the Ex-
change to charge assessments or user fees to par-
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HR 3590 EAS/PP 
ticipating health insurance issuers, or to other-
wise generate funding, to support its operations. 
(B) 
PROHIBITING
WASTEFUL
USE
OF 
FUNDS.—In carrying out activities under this 
subsection, an Exchange shall not utilize any 
funds intended for the administrative and oper-
ational expenses of the Exchange for staff re-
treats, promotional giveaways, excessive executive 
compensation, or promotion of Federal or State 
legislative and regulatory modifications. 
(6) CONSULTATION.—An Exchange shall consult 
with stakeholders relevant to carrying out the activi-
ties under this section, including— 
(A) health care consumers who are enrollees 
in qualified health plans; 
(B) individuals and entities with experience 
in facilitating enrollment in qualified health 
plans; 
(C) representatives of small businesses and 
self-employed individuals; 
(D) State Medicaid offices; and 
(E) advocates for enrolling hard to reach 
populations. 
(7) PUBLICATION OF COSTS.—An Exchange shall 
publish the average costs of licensing, regulatory fees, 
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and any other payments required by the Exchange, 
and the administrative costs of such Exchange, on an 
Internet website to educate consumers on such costs. 
Such information shall also include monies lost to 
waste, fraud, and abuse. 
(e) CERTIFICATION.— 
(1) IN GENERAL.—An Exchange may certify a 
health plan as a qualified health plan if— 
(A) such health plan meets the requirements 
for certification as promulgated by the Secretary 
under subsection (c)(1); and 
(B) the Exchange determines that making 
available such health plan through such Ex-
change is in the interests of qualified individuals 
and qualified employers in the State or States in 
which such Exchange operates, except that the 
Exchange may not exclude a health plan— 
(i) on the basis that such plan is a fee- 
for-service plan; 
(ii) through the imposition of premium 
price controls; or 
(iii) on the basis that the plan provides 
treatments necessary to prevent patients’ 
deaths in circumstances the Exchange deter-
mines are inappropriate or too costly. 
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(2) PREMIUM CONSIDERATIONS.—The Exchange 
shall require health plans seeking certification as 
qualified health plans to submit a justification for 
any premium increase prior to implementation of the 
increase. Such plans shall prominently post such in-
formation on their websites. The Exchange may take 
this information, and the information and the rec-
ommendations provided to the Exchange by the State 
under section 2794(b)(1) of the Public Health Service 
Act (relating to patterns or practices of excessive or 
unjustified premium increases), into consideration 
when determining whether to make such health plan 
available through the Exchange. The Exchange shall 
take into account any excess of premium growth out-
side the Exchange as compared to the rate of such 
growth inside the Exchange, including information 
reported by the States. 
(f) FLEXIBILITY.— 
(1) REGIONAL
OR
OTHER
INTERSTATE
EX-
CHANGES.—An Exchange may operate in more than 
one State if— 
(A) each State in which such Exchange op-
erates permits such operation; and 
(B) the Secretary approves such regional or 
interstate Exchange. 
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(2) SUBSIDIARY EXCHANGES.—A State may es-
tablish one or more subsidiary Exchanges if— 
(A) each such Exchange serves a geographi-
cally distinct area; and 
(B) the area served by each such Exchange 
is at least as large as a rating area described in 
section 2701(a) of the Public Health Service Act. 
(3) AUTHORITY TO CONTRACT.— 
(A) IN GENERAL.—A State may elect to au-
thorize an Exchange established by the State 
under this section to enter into an agreement 
with an eligible entity to carry out 1 or more re-
sponsibilities of the Exchange. 
(B) ELIGIBLE ENTITY.—In this paragraph, 
the term ‘‘eligible entity’’ means— 
(i) a person— 
(I) incorporated under, and sub-
ject to the laws of, 1 or more States; 
(II) that has demonstrated experi-
ence on a State or regional basis in the 
individual and small group health in-
surance markets and in benefits cov-
erage; and 
(III) that is not a health insur-
ance issuer or that is treated under 
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subsection (a) or (b) of section 52 of 
the Internal Revenue Code of 1986 as 
a member of the same controlled group 
of corporations (or under common con-
trol with) as a health insurance issuer; 
or 
(ii) the State medicaid agency under 
title XIX of the Social Security Act. 
(g) REWARDING QUALITY THROUGH MARKET-BASED 
INCENTIVES.— 
(1) STRATEGY DESCRIBED.—A strategy described 
in this paragraph is a payment structure that pro-
vides increased reimbursement or other incentives 
for— 
(A) improving health outcomes through the 
implementation of activities that shall include 
quality reporting, effective case management, 
care coordination, chronic disease management, 
medication and care compliance initiatives, in-
cluding through the use of the medical home 
model, for treatment or services under the plan 
or coverage; 
(B) the implementation of activities to pre-
vent hospital readmissions through a comprehen-
sive program for hospital discharge that includes 
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patient-centered education and counseling, com-
prehensive discharge planning, and post dis-
charge reinforcement by an appropriate health 
care professional; 
(C) the implementation of activities to im-
prove patient safety and reduce medical errors 
through the appropriate use of best clinical prac-
tices, evidence based medicine, and health infor-
mation technology under the plan or coverage; 
and 
(D) the implementation of wellness and 
health promotion activities. 
(2) GUIDELINES.—The Secretary, in consulta-
tion with experts in health care quality and stake-
holders, shall develop guidelines concerning the mat-
ters described in paragraph (1). 
(3) REQUIREMENTS.—The guidelines developed 
under paragraph (2) shall require the periodic report-
ing to the applicable Exchange of the activities that 
a qualified health plan has conducted to implement a 
strategy described in paragraph (1). 
(h) QUALITY IMPROVEMENT.— 
(1) ENHANCING PATIENT SAFETY.—Beginning on 
January 1, 2015, a qualified health plan may con-
tract with— 
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(A) a hospital with greater than 50 beds 
only if such hospital— 
(i) utilizes a patient safety evaluation 
system as described in part C of title IX of 
the Public Health Service Act; and 
(ii) implements a mechanism to ensure 
that each patient receives a comprehensive 
program for hospital discharge that includes 
patient-centered education and counseling, 
comprehensive discharge planning, and post 
discharge reinforcement by an appropriate 
health care professional; or 
(B) a health care provider only if such pro-
vider implements such mechanisms to improve 
health care quality as the Secretary may by reg-
ulation require. 
(2) EXCEPTIONS.—The Secretary may establish 
reasonable exceptions to the requirements described in 
paragraph (1). 
(3) ADJUSTMENT.—The Secretary may by regu-
lation adjust the number of beds described in para-
graph (1)(A). 
(i) NAVIGATORS.— 
(1) IN GENERAL.—An Exchange shall establish a 
program under which it awards grants to entities de-
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scribed in paragraph (2) to carry out the duties de-
scribed in paragraph (3). 
(2) ELIGIBILITY.— 
(A) IN GENERAL.—To be eligible to receive 
a grant under paragraph (1), an entity shall 
demonstrate to the Exchange involved that the 
entity has existing relationships, or could readily 
establish relationships, with employers and em-
ployees, consumers (including uninsured and 
underinsured consumers), or self-employed indi-
viduals likely to be qualified to enroll in a quali-
fied health plan. 
(B) TYPES.—Entities described in subpara-
graph (A) may include trade, industry, and pro-
fessional associations, commercial fishing indus-
try organizations, ranching and farming organi-
zations, community and consumer-focused non-
profit groups, chambers of commerce, unions, 
small business development centers, other licensed 
insurance agents and brokers, and other entities 
that— 
(i) are capable of carrying out the du-
ties described in paragraph (3); 
(ii) meet the standards described in 
paragraph (4); and 
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(iii) provide information consistent 
with the standards developed under para-
graph (5). 
(3) DUTIES.—An entity that serves as a navi-
gator under a grant under this subsection shall— 
(A) conduct public education activities to 
raise awareness of the availability of qualified 
health plans; 
(B) distribute fair and impartial informa-
tion concerning enrollment in qualified health 
plans, and the availability of premium tax cred-
its under section 36B of the Internal Revenue 
Code of 1986 and cost-sharing reductions under 
section 1402; 
(C) facilitate enrollment in qualified health 
plans; 
(D) provide referrals to any applicable of-
fice of health insurance consumer assistance or 
health insurance ombudsman established under 
section 2793 of the Public Health Service Act, or 
any other appropriate State agency or agencies, 
for any enrollee with a grievance, complaint, or 
question regarding their health plan, coverage, or 
a determination under such plan or coverage; 
and 
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(E) provide information in a manner that 
is culturally and linguistically appropriate to 
the needs of the population being served by the 
Exchange or Exchanges. 
(4) STANDARDS.— 
(A) IN GENERAL.—The Secretary shall es-
tablish standards for navigators under this sub-
section, including provisions to ensure that any 
private or public entity that is selected as a nav-
igator is qualified, and licensed if appropriate, 
to engage in the navigator activities described in 
this subsection and to avoid conflicts of interest. 
Under such standards, a navigator shall not— 
(i) be a health insurance issuer; or 
(ii) receive any consideration directly 
or indirectly from any health insurance 
issuer in connection with the enrollment of 
any qualified individuals or employees of a 
qualified employer in a qualified health 
plan. 
(5) FAIR
AND
IMPARTIAL
INFORMATION
AND 
SERVICES.—The Secretary, in collaboration with 
States, shall develop standards to ensure that infor-
mation made available by navigators is fair, accu-
rate, and impartial. 
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(6) FUNDING.—Grants under this subsection 
shall be made from the operational funds of the Ex-
change and not Federal funds received by the State to 
establish the Exchange. 
(j) APPLICABILITY OF MENTAL HEALTH PARITY.— 
Section 2726 of the Public Health Service Act shall apply 
to qualified health plans in the same manner and to the 
same extent as such section applies to health insurance 
issuers and group health plans. 
(k) CONFLICT.—An Exchange may not establish rules 
that conflict with or prevent the application of regulations 
promulgated by the Secretary under this subtitle. 
SEC. 1312. CONSUMER CHOICE. 
(a) CHOICE.— 
(1) QUALIFIED INDIVIDUALS.—A qualified indi-
vidual may enroll in any qualified health plan avail-
able to such individual. 
(2) QUALIFIED EMPLOYERS.— 
(A) EMPLOYER
MAY
SPECIFY
LEVEL.—A 
qualified employer may provide support for cov-
erage of employees under a qualified health plan 
by selecting any level of coverage under section 
1302(d) to be made available to employees 
through an Exchange. 
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(B) EMPLOYEE MAY CHOOSE PLANS WITHIN 
A
LEVEL.—Each employee of a qualified em-
ployer that elects a level of coverage under sub-
paragraph (A) may choose to enroll in a quali-
fied health plan that offers coverage at that level. 
(b) PAYMENT OF PREMIUMS BY QUALIFIED INDIVID-
UALS.—A qualified individual enrolled in any qualified 
health plan may pay any applicable premium owed by such 
individual to the health insurance issuer issuing such quali-
fied health plan. 
(c) SINGLE RISK POOL.— 
(1) INDIVIDUAL
MARKET.—A health insurance 
issuer shall consider all enrollees in all health plans 
(other than grandfathered health plans) offered by 
such issuer in the individual market, including those 
enrollees who do not enroll in such plans through the 
Exchange, to be members of a single risk pool. 
(2) SMALL GROUP MARKET.—A health insurance 
issuer shall consider all enrollees in all health plans 
(other than grandfathered health plans) offered by 
such issuer in the small group market, including those 
enrollees who do not enroll in such plans through the 
Exchange, to be members of a single risk pool. 
(3) MERGER OF MARKETS.—A State may re-
quire the individual and small group insurance mar-
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kets within a State to be merged if the State deter-
mines appropriate. 
(4) STATE LAW.—A State law requiring grand-
fathered health plans to be included in a pool de-
scribed in paragraph (1) or (2) shall not apply. 
(d) EMPOWERING CONSUMER CHOICE.— 
(1) CONTINUED OPERATION OF MARKET OUTSIDE 
EXCHANGES.—Nothing in this title shall be construed 
to prohibit— 
(A) a health insurance issuer from offering 
outside of an Exchange a health plan to a quali-
fied individual or qualified employer; and 
(B) a qualified individual from enrolling 
in, or a qualified employer from selecting for its 
employees, a health plan offered outside of an 
Exchange. 
(2) CONTINUED OPERATION OF STATE BENEFIT 
REQUIREMENTS.—Nothing in this title shall be con-
strued to terminate, abridge, or limit the operation of 
any requirement under State law with respect to any 
policy or plan that is offered outside of an Exchange 
to offer benefits. 
(3) VOLUNTARY NATURE OF AN EXCHANGE.— 
(A) CHOICE TO ENROLL OR NOT TO EN-
ROLL.—Nothing in this title shall be construed to 
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restrict the choice of a qualified individual to en-
roll or not to enroll in a qualified health plan 
or to participate in an Exchange. 
(B) PROHIBITION AGAINST COMPELLED EN-
ROLLMENT.—Nothing in this title shall be con-
strued to compel an individual to enroll in a 
qualified health plan or to participate in an Ex-
change. 
(C) INDIVIDUALS ALLOWED TO ENROLL IN 
ANY PLAN.—A qualified individual may enroll 
in any qualified health plan, except that in the 
case of a catastrophic plan described in section 
1302(e), a qualified individual may enroll in the 
plan only if the individual is eligible to enroll in 
the plan under section 1302(e)(2). 
(D) MEMBERS OF CONGRESS IN THE EX-
CHANGE.— 
(i) 
REQUIREMENT.—Notwithstanding 
any other provision of law, after the effec-
tive date of this subtitle, the only health 
plans that the Federal Government may 
make available to Members of Congress and 
congressional staff with respect to their serv-
ice as a Member of Congress or congres-
sional staff shall be health plans that are— 
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(I) created under this Act (or an 
amendment made by this Act); or 
(II) offered through an Exchange 
established under this Act (or an 
amendment made by this Act). 
(ii) DEFINITIONS.—In this section: 
(I) MEMBER OF CONGRESS.—The 
term ‘‘Member of Congress’’ means any 
member of the House of Representa-
tives or the Senate. 
(II) CONGRESSIONAL STAFF.—The 
term ‘‘congressional staff’’ means all 
full-time and part-time employees em-
ployed by the official office of a Mem-
ber of Congress, whether in Wash-
ington, DC or outside of Washington, 
DC. 
(4) NO PENALTY FOR TRANSFERRING TO MIN-
IMUM ESSENTIAL COVERAGE OUTSIDE EXCHANGE.— 
An Exchange, or a qualified health plan offered 
through an Exchange, shall not impose any penalty 
or other fee on an individual who cancels enrollment 
in a plan because the individual becomes eligible for 
minimum essential coverage (as defined in section 
5000A(f) of the Internal Revenue Code of 1986 with-
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out regard to paragraph (1)(C) or (D) thereof) or 
such coverage becomes affordable (within the meaning 
of section 36B(c)(2)(C) of such Code). 
(e) ENROLLMENT THROUGH AGENTS OR BROKERS.— 
The Secretary shall establish procedures under which a 
State may allow agents or brokers— 
(1) to enroll individuals in any qualified health 
plans in the individual or small group market as 
soon as the plan is offered through an Exchange in 
the State; and 
(2) to assist individuals in applying for pre-
mium tax credits and cost-sharing reductions for 
plans sold through an Exchange. 
Such procedures may include the establishment of rate 
schedules for broker commissions paid by health benefits 
plans offered through an exchange. 
(f) QUALIFIED INDIVIDUALS AND EMPLOYERS; ACCESS 
LIMITED TO CITIZENS AND LAWFUL RESIDENTS.— 
(1) QUALIFIED INDIVIDUALS.—In this title: 
(A) IN GENERAL.—The term ‘‘qualified in-
dividual’’ means, with respect to an Exchange, 
an individual who— 
(i) is seeking to enroll in a qualified 
health plan in the individual market offered 
through the Exchange; and 
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(ii) resides in the State that established 
the Exchange (except with respect to terri-
torial agreements under section 1312(f)). 
(B) 
INCARCERATED
INDIVIDUALS
EX-
CLUDED.—An individual shall not be treated as 
a qualified individual if, at the time of enroll-
ment, the individual is incarcerated, other than 
incarceration pending the disposition of charges. 
(2) QUALIFIED EMPLOYER.—In this title: 
(A) IN GENERAL.—The term ‘‘qualified em-
ployer’’ means a small employer that elects to 
make all full-time employees of such employer el-
igible for 1 or more qualified health plans offered 
in the small group market through an Exchange 
that offers qualified health plans. 
(B) EXTENSION TO LARGE GROUPS.— 
(i) IN GENERAL.—Beginning in 2017, 
each State may allow issuers of health in-
surance coverage in the large group market 
in the State to offer qualified health plans 
in such market through an Exchange. Noth-
ing in this subparagraph shall be construed 
as requiring the issuer to offer such plans 
through an Exchange. 
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(ii) LARGE EMPLOYERS ELIGIBLE.—If 
a State under clause (i) allows issuers to 
offer qualified health plans in the large 
group market through an Exchange, the 
term ‘‘qualified employer’’ shall include a 
large employer that elects to make all full- 
time employees of such employer eligible for 
1 or more qualified health plans offered in 
the large group market through the Ex-
change. 
(3) ACCESS LIMITED TO LAWFUL RESIDENTS.— 
If an individual is not, or is not reasonably expected 
to be for the entire period for which enrollment is 
sought, a citizen or national of the United States or 
an alien lawfully present in the United States, the in-
dividual shall not be treated as a qualified individual 
and may not be covered under a qualified health plan 
in the individual market that is offered through an 
Exchange. 
SEC. 1313. FINANCIAL INTEGRITY. 
(a) ACCOUNTING FOR EXPENDITURES.— 
(1) IN GENERAL.—An Exchange shall keep an 
accurate accounting of all activities, receipts, and ex-
penditures and shall annually submit to the Secretary 
a report concerning such accountings. 
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(2) INVESTIGATIONS.—The Secretary, in coordi-
nation with the Inspector General of the Department 
of Health and Human Services, may investigate the 
affairs of an Exchange, may examine the properties 
and records of an Exchange, and may require peri-
odic reports in relation to activities undertaken by an 
Exchange. An Exchange shall fully cooperate in any 
investigation conducted under this paragraph. 
(3) AUDITS.—An Exchange shall be subject to 
annual audits by the Secretary. 
(4) PATTERN OF ABUSE.—If the Secretary deter-
mines that an Exchange or a State has engaged in 
serious misconduct with respect to compliance with 
the requirements of, or carrying out of activities re-
quired under, this title, the Secretary may rescind 
from payments otherwise due to such State involved 
under this or any other Act administered by the Sec-
retary an amount not to exceed 1 percent of such pay-
ments per year until corrective actions are taken by 
the State that are determined to be adequate by the 
Secretary. 
(5) PROTECTIONS AGAINST FRAUD AND ABUSE.— 
With respect to activities carried out under this title, 
the Secretary shall provide for the efficient and non- 
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discriminatory administration of Exchange activities 
and implement any measure or procedure that— 
(A) the Secretary determines is appropriate 
to reduce fraud and abuse in the administration 
of this title; and 
(B) the Secretary has authority to imple-
ment under this title or any other Act. 
(6) APPLICATION OF THE FALSE CLAIMS ACT.— 
(A) IN
GENERAL.—Payments made by, 
through, or in connection with an Exchange are 
subject to the False Claims Act (31 U.S.C. 3729 
et seq.) if those payments include any Federal 
funds. Compliance with the requirements of this 
Act concerning eligibility for a health insurance 
issuer to participate in the Exchange shall be a 
material condition of an issuer’s entitlement to 
receive payments, including payments of pre-
mium tax credits and cost-sharing reductions, 
through the Exchange. 
(B) 
DAMAGES.—Notwithstanding 
para-
graph (1) of section 3729(a) of title 31, United 
States Code, and subject to paragraph (2) of such 
section, the civil penalty assessed under the False 
Claims Act on any person found liable under 
such Act as described in subparagraph (A) shall 
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(F) TERMINATION.—The advisory board 
shall terminate on the earlier of the date that it 
completes its duties under this section or Decem-
ber 31, 2015. 
(c) QUALIFIED
NONPROFIT
HEALTH
INSURANCE 
ISSUER.—For purposes of this section— 
(1) IN GENERAL.—The term ‘‘qualified nonprofit 
health insurance issuer’’ means a health insurance 
issuer that is an organization— 
(A) that is organized under State law as a 
nonprofit, member corporation; 
(B) substantially all of the activities of 
which consist of the issuance of qualified health 
plans in the individual and small group markets 
in each State in which it is licensed to issue such 
plans; and 
(C) that meets the other requirements of this 
subsection. 
(2) CERTAIN ORGANIZATIONS PROHIBITED.—An 
organization shall not be treated as a qualified non-
profit health insurance issuer if— 
(A) the organization or a related entity (or 
any predecessor of either) was a health insurance 
issuer on July 16, 2009; or 
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ber of the information contact for such person, 
and 
‘‘(B) the information required to be shown 
on the return with respect to such individual. 
‘‘(2) TIME FOR FURNISHING STATEMENTS.—The 
written statement required under paragraph (1) shall 
be furnished on or before January 31 of the year fol-
lowing the calendar year for which the return under 
subsection (a) was required to be made. 
‘‘(d) COORDINATION WITH OTHER REQUIREMENTS.— 
To the maximum extent feasible, the Secretary may provide 
that— 
‘‘(1) any return or statement required to be pro-
vided under this section may be provided as part of 
any return or statement required under section 6051 
or 6055, and 
‘‘(2) in the case of an applicable large employer 
offering health insurance coverage of a health insur-
ance issuer, the employer may enter into an agree-
ment with the issuer to include information required 
under this section with the return and statement re-
quired to be provided by the issuer under section 
6055. 
‘‘(e) 
COVERAGE
PROVIDED
BY
GOVERNMENTAL 
UNITS.—In the case of any applicable large employer which 
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is a governmental unit or any agency or instrumentality 
thereof, the person appropriately designated for purposes of 
this section shall make the returns and statements required 
by this section. 
‘‘(f) DEFINITIONS.—For purposes of this section, any 
term used in this section which is also used in section 
4980H shall have the meaning given such term by section 
4980H.’’. 
(b) ASSESSABLE PENALTIES.— 
(1) Subparagraph (B) of section 6724(d)(1) of 
the Internal Revenue Code of 1986 (relating to defini-
tions), as amended by section 1502, is amended by 
striking ‘‘or’’ at the end of clause (xxiii), by striking 
‘‘and’’ at the end of clause (xxiv) and inserting ‘‘or’’, 
and by inserting after clause (xxiv) the following new 
clause: 
‘‘(xxv) section 6056 (relating to returns 
relating to large employers required to re-
port on health insurance coverage), and’’. 
(2) Paragraph (2) of section 6724(d) of such 
Code, as so amended, is amended by striking ‘‘or’’ at 
the end of subparagraph (FF), by striking the period 
at the end of subparagraph (GG) and inserting ‘‘, or’’ 
and by inserting after subparagraph (GG) the fol-
lowing new subparagraph: 
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HR 3590 EAS/PP 
(2) in paragraph (4), by striking ‘‘and (3)’’ and 
inserting ‘‘(3), and (4)’’; and 
(3) by adding at the end the following para-
graph: 
‘‘(5) FISCAL YEAR 2011 AND THEREAFTER.—The 
amounts otherwise determined under this subsection 
for Puerto Rico, the Virgin Islands, Guam, the North-
ern Mariana Islands, and American Samoa for the 
second, third, and fourth quarters of fiscal year 2011, 
and for each fiscal year after fiscal year 2011 (after 
the application of subsection (f) and the preceding 
paragraphs of this subsection), shall be increased by 
30 percent.’’. 
(b) DISREGARD OF PAYMENTS FOR MANDATORY EX-
PANDED ENROLLMENT.—Section 1108(g)(4) of such Act (42 
U.S.C. 1308(g)(4)) is amended— 
(1) by striking ‘‘to fiscal years beginning’’ and 
inserting ‘‘to— 
‘‘(A) fiscal years beginning’’; 
(2) by striking the period at the end and insert-
ing ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(B) fiscal years beginning with fiscal year 
2014, payments made to Puerto Rico, the Virgin 
Islands, Guam, the Northern Mariana Islands, 
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‘‘(A) IN GENERAL.—During the period that 
begins on the date of enactment of the Patient 
Protection and Affordable Care Act and ends on 
September 30, 2019, a State shall not have in ef-
fect eligibility standards, methodologies, or proce-
dures under its State child health plan (includ-
ing any waiver under such plan) for children 
(including children provided medical assistance 
for which payment is made under section 
2105(a)(1)(A)) that are more restrictive than the 
eligibility standards, methodologies, or proce-
dures, respectively, under such plan (or waiver) 
as in effect on the date of enactment of that Act. 
The preceding sentence shall not be construed as 
preventing a State during such period from— 
‘‘(i) applying eligibility standards, 
methodologies, or procedures for children 
under the State child health plan or under 
any waiver of the plan that are less restric-
tive than the eligibility standards, meth-
odologies, or procedures, respectively, for 
children under the plan or waiver that are 
in effect on the date of enactment of such 
Act; or 
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‘‘(II) EXCEPTION.—If a subsection 
(k) applicant does not list any patent 
under clause (i)(I), the reference prod-
uct sponsor may list 1 patent under 
clause (i)(II). 
‘‘(6) IMMEDIATE
PATENT
INFRINGEMENT
AC-
TION.— 
‘‘(A) ACTION
IF
AGREEMENT
ON
PATENT 
LIST.—If the subsection (k) applicant and the 
reference product sponsor agree on patents as de-
scribed in paragraph (4), not later than 30 days 
after such agreement, the reference product spon-
sor shall bring an action for patent infringement 
with respect to each such patent. 
‘‘(B) ACTION IF NO AGREEMENT ON PATENT 
LIST.—If the provisions of paragraph (5) apply 
to the parties as described in paragraph (4)(B), 
not later than 30 days after the exchange of lists 
under paragraph (5)(B), the reference product 
sponsor shall bring an action for patent in-
fringement with respect to each patent that is in-
cluded on such lists. 
‘‘(C) NOTIFICATION
AND
PUBLICATION
OF 
COMPLAINT.— 
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