105 
SEC. 266. LIMITING THE DISCHARGE OF DEBTS IN BANK-
RUPTCY PROCEEDINGS IN CASES WHERE A 
HEALTH CARE PROVIDER OR A SUPPLIER EN-
GAGES IN FRAUDULENT ACTIVITY. 
(a) IN GENERAL.— 
(1) CIVIL
MONETARY
PENALTIES.—Section 
1128A(a) of the Social Security Act (42 U.S.C. 
1320a–7a(a)) is amended by adding at the end the 
following: ‘‘Notwithstanding any other provision of 
law, amounts made payable under this section are 
not dischargeable under section 727, 944, 1141, 
1228, or 1328 of title 11, United States Code, or 
any other provision of such title.’’. 
(2) RECOVERY
OF
OVERPAYMENT
TO
PRO-
VIDERS
OF
SERVICES
UNDER
PART
A
OF
MEDI-
CARE.—Section 1815(d) of the Social Security Act 
(42 U.S.C. 1395g(d)) is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 
(B) by adding at the end the following: 
‘‘(2) Notwithstanding any other provision of law, 
amounts due to the Secretary under this section are not 
dischargeable under section 727, 944, 1141, 1228, or 
1328 of title 11, United States Code, or any other provi-
sion of such title if the overpayment was the result of 
fraudulent activity, as may be defined by the Secretary.’’. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00105
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
106 
(3) RECOVERY OF OVERPAYMENT OF BENEFITS 
UNDER PART b OF MEDICARE.—Section 1833(j) of 
the Social Security Act (42 U.S.C. 1395l(j)) is 
amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(j)’’; and 
(B) by adding at the end the following: 
‘‘(2) Notwithstanding any other provision of law, 
amounts due to the Secretary under this section are not 
dischargeable under section 727, 944, 1141, 1228, or 
1328 of title 11, United States Code, or any other provi-
sion of such title if the overpayment was the result of 
fraudulent activity, as may be defined by the Secretary.’’. 
(4) COLLECTION
OF
PAST-DUE
OBLIGATIONS 
ARISING FROM BREACH OF SCHOLARSHIP AND LOAN 
CONTRACT.—Section 1892(a) of the Social Security 
Act (42 U.S.C. 1395ccc(a)) is amended by adding at 
the end the following: 
‘‘(5) Notwithstanding any other provision of 
law, amounts due to the Secretary under this section 
are not dischargeable under section 727, 944, 1141, 
1228, or 1328 of title 11, United States Code, or 
any other provision of such title.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to bankruptcy petitions filed 
after the date of the enactment of this Act. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00106
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
107 
SEC. 267. ILLEGAL DISTRIBUTION OF A MEDICARE OR MED-
ICAID 
BENEFICIARY 
IDENTIFICATION 
OR 
BILLING PRIVILEGES. 
Section 1128B(b) of the Social Security Act (42 
U.S.C. 1320a–7b(b)), as amended by section 4(c), is 
amended by adding at the end the following: 
‘‘(5) Whoever knowingly, intentionally, and with the 
intent to defraud purchases, sells or distributes, or ar-
ranges for the purchase, sale, or distribution of two or 
more Medicare or Medicaid beneficiary identification num-
bers or billing privileges under title XVIII or title XIX 
shall be imprisoned for not more than three years or fined 
under title 18, United States Code (or, if greater, an 
amount equal to the monetary loss to the Federal and any 
State government as a result of such acts), or both.’’. 
SEC. 268. TREATMENT OF CERTAIN SOCIAL SECURITY ACT 
CRIMES AS FEDERAL HEALTH CARE OF-
FENSES. 
(a) IN GENERAL.—Section 24(a) of title 18, United 
States Code, is amended— 
(1) by striking the period at the end of para-
graph (2) and inserting ‘‘; or’’; and 
(2) by adding at the end the following: 
‘‘(3) section 1128B of the Social Security Act 
(42 U.S.C. 1320a–7b).’’. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00107
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
108 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act and apply to acts committed on or after 
the date of the enactment of this Act. 
SEC. 269. AUTHORITY OF OFFICE OF INSPECTOR GENERAL 
OF 
THE 
DEPARTMENT 
OF 
HEALTH 
AND 
HUMAN SERVICES. 
(a) AUTHORITY.—Notwithstanding any other provi-
sion of law, upon designation by the Inspector General of 
the Department of Health and Human Services, any 
criminal investigator of the Office of Inspector General of 
such department may, in accordance with guidelines 
issued by the Secretary of Health and Human Services 
and approved by the Attorney General, while engaged in 
activities within the lawful jurisdiction of such Inspector 
General— 
(1) obtain and execute any warrant or other 
process issued under the authority of the United 
States; 
(2) make an arrest without a warrant for— 
(A) any offense against the United States 
committed in the presence of such investigator; 
or 
(B) any felony offense against the United 
States, if such investigator has reasonable cause 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00108
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
109 
to believe that the person to be arrested has 
committed or is committing that felony offense; 
and 
(3) exercise any other authority necessary to 
carry out the authority described in paragraphs (1) 
and (2). 
(b) FUNDS.—The Office of Inspector General of the 
Department of Health and Human Services may receive 
and expend funds that represent the equitable share from 
the forfeiture of property in investigations in which the 
Office of Inspector General participated, and that are 
transferred to the Office of Inspector General by the De-
partment of Justice, the Department of the Treasury, or 
the United States Postal Service. Such equitable sharing 
funds shall be deposited in a separate account and shall 
remain available until expended. 
SEC. 270. UNIVERSAL PRODUCT NUMBERS ON CLAIMS 
FORMS FOR REIMBURSEMENT UNDER THE 
MEDICARE PROGRAM. 
(a) UPNS ON CLAIMS FORMS FOR REIMBURSEMENT 
UNDER THE MEDICARE PROGRAM.— 
(1) ACCOMMODATION OF UPNS ON MEDICARE 
CLAIMS FORMS.—Not later than February 1, 2011, 
all claims forms developed or used by the Secretary 
of Health and Human Services for reimbursement 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00109
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
110 
under the Medicare program under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.) 
shall accommodate the use of universal product 
numbers for a UPN covered item. 
(2) REQUIREMENT FOR PAYMENT OF CLAIMS.— 
Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.), as amended by sections 2 and 3, is 
amended by adding at the end the following new sec-
tion: 
‘‘USE OF UNIVERSAL PRODUCT NUMBERS 
‘‘SEC. 1899B. (a) IN GENERAL.—No payment shall 
be made under this title for any claim for reimbursement 
for any UPN covered item unless the claim contains the 
universal product number of the UPN covered item. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) UPN COVERED ITEM.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘UPN covered 
item’ means— 
‘‘(i) a covered item as that term is de-
fined in section 1834(a)(13); 
‘‘(ii) an item described in paragraph 
(8) or (9) of section 1861(s); 
‘‘(iii) an item described in paragraph 
(5) of section 1861(s); and 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00110
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
114 
(2) UNIVERSAL PRODUCT NUMBER.—The term 
‘‘universal product number’’ has the meaning given 
such term in section 1899B(b)(2) of the Social Secu-
rity Act (as added by subsection (a)(2)). 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as may be 
necessary for the purpose of carrying out the provisions 
in paragraphs (1) and (3) of subsection (a), subsection 
(b), and section 1899B of the Social Security Act (as 
added by subsection (a)(2)). 
Subtitle E—Promoting Health and 
Preventing 
Chronic 
Disease 
Through 
Prevention 
and 
Wellness Programs 
SEC. 281. FINDINGS. 
Congress finds the following: 
(1) Keeping people healthy and preventing dis-
ease must be an important part of improving our 
Federal health system. 
(2) More than 133 million Americans, which ac-
counts for 45 percent of the U.S. population, have 
at least one chronic condition. 
(3) With the growth in obesity, especially 
among younger Americans, the diagnosis of child-
hood chronic diseases has almost quadrupled over 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00114
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
115 
the past four decades and is expected to continue to 
rise. 
(4) Chronic diseases are the leading causes of 
preventable death and disability in the United 
States, accounting for 7 out of every 10 deaths and 
killing more than 1,700,000 people in the United 
States every year. 
(5) Two-thirds of the increase in health care 
spending is due to increased prevalence of treated 
chronic disease. 
(6) Seventy-five percent of the nation’s aggre-
gate health care spending is on treating patients 
with chronic disease, and the vast majority of these 
diseases are preventable. Unfortunately, less than 
one percent of total health care spending goes to-
ward prevention. 
(7) According to a recent study, treatment of 
the seven most common chronic diseases, coupled 
with productivity losses, cost the U.S. economy more 
than $1 trillion dollars annually. It has been esti-
mated that modest reductions in unhealthy behaviors 
could prevent or delay 40 million cases of chronic ill-
ness per year. 
(8) Chronic diseases are burdensome to Amer-
ican businesses. Not only does a sicker American 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00115
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
116 
workforce have higher health care costs, but it is 
also less productive. Chronic illnesses lead to absen-
teeism and decreased effectiveness while at work due 
to illness. 
(9) Prevention not only saves lives, it is highly 
cost-effective. One study concluded that an invest-
ment of $10 per person per year in proven commu-
nity-based programs to increase physical activity, 
improve nutrition, and prevent smoking and other 
tobacco use could save the country more than $16 
billion annually within five years. This is a return of 
$5.60 for every $1 spent. 
SEC. 282. TAX CREDIT TO EMPLOYERS FOR COSTS OF IM-
PLEMENTING PREVENTION AND WELLNESS 
PROGRAMS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
adding at the end the following: 
‘‘SEC. 45R. PREVENTION AND WELLNESS PROGRAM CRED-
IT. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of section 38, 
the prevention and wellness credit determined under 
this section for any taxable year during the credit 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00116
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
117 
period with respect to an employer is an amount 
equal to 50 percent of the costs paid or incurred by 
the employer in connection with a qualified preven-
tion and wellness during the taxable year. For pur-
poses of the preceding sentence, in the case of any 
qualified prevention and wellness offered as part of 
an employer-provided group health plan, including 
health insurance offered in connection with such 
plan, only costs attributable to the qualified preven-
tion and wellness and not to the group health plan 
or health insurance coverage may be taken into ac-
count.
‘‘(2) LIMITATION.—The amount of credit al-
lowed under paragraph (1) for any taxable year shall 
not exceed the sum of— 
‘‘(A) the product of $200 and the number 
of employees of the employer not in excess of 
200 employees, plus 
‘‘(B) the product of $100 and the number 
of employees of the employer in excess of 200 
employees. 
‘‘(b) QUALIFIED PREVENTION AND WELLNESS.—For 
purposes of this section— 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00117
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
118 
‘‘(1) 
QUALIFIED
PREVENTION
AND 
WELLNESS.—The term ‘qualified prevention and 
wellness’ means a program which— 
‘‘(A) consists of any 3 of the prevention 
and wellness components described in sub-
section (c), and 
‘‘(B) which is certified by the Secretary of 
Health and Human Services, in coordination 
with the Director of the Center for Disease 
Control and Prevention, as a qualified preven-
tion and wellness under this section. 
‘‘(2) PROGRAMS MUST BE CONSISTENT WITH 
RESEARCH AND BEST PRACTICES.— 
‘‘(A) IN
GENERAL.—The Secretary of 
Health and Human Services shall not certify a 
program as a qualified prevention and wellness 
unless the program— 
‘‘(i) is consistent with evidence-based 
research and best practices, as identified 
by persons with expertise in employer 
health promotion and prevention and 
wellness, 
‘‘(ii) includes multiple, evidence-based 
strategies which are based on the existing 
and emerging research and careful sci-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00118
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
119 
entific reviews, including the Guide to 
Community Preventive Services, the Guide 
to Clinical Preventive Services, and the 
National Registry for Effective Programs, 
and 
‘‘(iii) includes strategies which focus 
on employee populations with a dispropor-
tionate burden of health problems. 
‘‘(B) PERIODIC UPDATING AND REVIEW.— 
The Secretary of Health and Human Services 
shall establish procedures for periodic review of 
programs under this subsection. Such proce-
dures shall require revisions of programs if nec-
essary to ensure compliance with the require-
ments of this section and require updating of 
the programs to the extent the Secretary, in co-
ordination with the Director of the Centers for 
Disease Control and Prevention, determines 
necessary to reflect new scientific findings. 
‘‘(3) HEALTH
LITERACY.—The Secretary of 
Health and Human Services shall, as part of the 
certification process, encourage employees to make 
the programs culturally competent and to meet the 
health literacy needs of the employees covered by the 
programs. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00119
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
120 
‘‘(c) PREVENTION AND WELLNESS PROGRAM COM-
PONENTS.—For purposes of this section, the prevention 
and wellness components described in this subsection are 
the following: 
‘‘(1) HEALTH
AWARENESS
COMPONENT.—A 
health awareness component which provides for the 
following: 
‘‘(A) HEALTH EDUCATION.—The dissemi-
nation of health information which addresses 
the specific needs and health risks of employees. 
‘‘(B) HEALTH SCREENINGS.—The oppor-
tunity for periodic screenings for health prob-
lems and referrals for appropriate follow up 
measures. 
‘‘(2) EMPLOYEE ENGAGEMENT COMPONENT.— 
An employee engagement component which provides 
for— 
‘‘(A) the establishment of a committee to 
actively engage employees in worksite preven-
tion and wellness through worksite assessments 
and program planning, delivery, evaluation, and 
improvement efforts, and 
‘‘(B) the tracking of employee participa-
tion. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00120
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
121 
‘‘(3) BEHAVIORAL
CHANGE
COMPONENT.—A 
behavioral change component which provides for al-
tering employee lifestyles to encourage healthy living 
through counseling, seminars, on-line programs, or 
self-help materials which provide technical assistance 
and problem solving skills. Such component may in-
clude programs relating to— 
‘‘(A) tobacco use, 
‘‘(B) obesity, 
‘‘(C) stress management, 
‘‘(D) physical fitness, 
‘‘(E) nutrition, 
‘‘(F) substance abuse, 
‘‘(G) depression, and 
‘‘(H) mental health promotion (including 
anxiety). 
‘‘(4) 
SUPPORTIVE
ENVIRONMENT
COMPO-
NENT.—A supportive environment component which 
includes the following: 
‘‘(A) ON-SITE
POLICIES.—Policies and 
services at the worksite which promote a 
healthy lifestyle, including policies relating to— 
‘‘(i) tobacco use at the worksite, 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00121
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
122 
‘‘(ii) the nutrition of food available at 
the worksite through cafeterias and vend-
ing options, 
‘‘(iii) minimizing stress and promoting 
positive mental health in the workplace, 
‘‘(iv) where applicable, accessible and 
attractive stairs, and 
‘‘(v) the encouragement of physical 
activity before, during, and after work 
hours. 
‘‘(B) PARTICIPATION INCENTIVES.— 
‘‘(i) IN GENERAL.—Qualified incentive 
benefits for each employee who participates 
in the health screenings described in para-
graph (1)(B) or the behavioral change pro-
grams described in paragraph (3). 
‘‘(ii) QUALIFIED
INCENTIVE
BEN-
EFIT.—For purposes of clause (i), the 
term ‘qualified incentive benefit’ means 
any benefit which is approved by the Sec-
retary of Health and Human Services, in 
coordination with the Director of the Cen-
ters for Disease Control and Prevention. 
‘‘(C) EMPLOYEE INPUT.—The opportunity 
for employees to participate in the management 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00122
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
123 
of any qualified prevention and wellness to 
which this section applies. 
‘‘(d) PARTICIPATION REQUIREMENT.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) unless the Secretary of Health 
and Human Services, in coordination with the Direc-
tor of the Centers for Disease Control and Preven-
tion, certifies, as a part of any certification described 
in subsection (b), that each prevention and wellness 
component of the qualified prevention and wellness 
applies to all qualified employees of the employer. 
The Secretary of Health and Human Services shall 
prescribe rules under which an employer shall not be 
treated as failing to meet the requirements of this 
subsection merely because the employer provides 
specialized programs for employees with specific 
health needs or unusual employment requirements or 
provides a pilot program to test new wellness strate-
gies. 
‘‘(2) QUALIFIED EMPLOYEE.—For purposes of 
paragraph 
(1), 
the 
term 
‘qualified 
employee’ 
means— 
‘‘(A) for employers offering health insur-
ance coverage, an employee who is eligible for 
such coverage, or 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00123
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
124 
‘‘(B) for employers not offering health in-
surance coverage, an employee who works an 
average of not less than 25 hours per week dur-
ing the taxable year. 
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) EMPLOYEE AND EMPLOYER.— 
‘‘(A) PARTNERS
AND
PARTNERSHIPS.— 
The term ‘employee’ includes a partner and the 
term ‘employer’ includes a partnership. 
‘‘(B) CERTAIN RULES TO APPLY.—Rules 
similar to the rules of section 52 shall apply. 
‘‘(2) CERTAIN
COSTS
NOT
INCLUDED.—Costs 
paid or incurred by an employer for food or health 
insurance shall not be taken into account under sub-
section (a). 
‘‘(3) NO CREDIT WHERE GRANT AWARDED.— 
No credit shall be allowable under subsection (a) 
with respect to any qualified prevention and wellness 
of any taxpayer (other than an eligible employer de-
scribed in subsection (f)(2)(A)) who receives a grant 
provided by the United States, a State, or a political 
subdivision of a State for use in connection with 
such program. The Secretary shall prescribe rules 
providing for the waiver of this paragraph with re-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00124
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
125 
spect to any grant which does not constitute a sig-
nificant portion of the funding for the qualified pre-
vention and wellness. 
‘‘(4) CREDIT PERIOD.— 
‘‘(A) IN GENERAL.—The term ‘credit pe-
riod’ means the period of 10 consecutive taxable 
years beginning with the taxable year in which 
the qualified prevention and wellness is first 
certified under this section. 
‘‘(B) SPECIAL RULE FOR EXISTING PRO-
GRAMS.—In the case of an employer (or prede-
cessor) which operates a prevention and 
wellness for its employees on the date of the en-
actment of this section, subparagraph (A) shall 
be applied by substituting ‘3 consecutive taxable 
years’ for ‘10 consecutive taxable years’. The 
Secretary shall prescribe rules under which this 
subsection shall not apply if an employer is re-
quired to make substantial modifications in the 
existing prevention and wellness in order to 
qualify such program for certification as a 
qualified prevention and wellness. 
‘‘(C) CONTROLLED
GROUPS.—For pur-
poses of this paragraph, all persons treated as 
a single employer under subsection (b), (c), 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00125
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
126 
(m), or (o) of section 414 shall be treated as a 
single employer. 
‘‘(f) PORTION OF CREDIT MADE REFUNDABLE.— 
‘‘(1) IN GENERAL.—In the case of an eligible 
employer of an employee, the aggregate credits al-
lowed to a taxpayer under subpart C shall be in-
creased by the lesser of— 
‘‘(A) the credit which would be allowed 
under this section without regard to this sub-
section and the limitation under section 38(c), 
or 
‘‘(B) the amount by which the aggregate 
amount of credits allowed by this subpart (de-
termined without regard to this subsection) 
would increase if the limitation imposed by sec-
tion 38(c) for any taxable year were increased 
by the amount of employer payroll taxes im-
posed on the taxpayer during the calendar year 
in which the taxable year begins. 
The amount of the credit allowed under this sub-
section shall not be treated as a credit allowed under 
this subpart and shall reduce the amount of the 
credit otherwise allowable under subsection (a) with-
out regard to section 38(c). 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00126
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
127 
‘‘(2) ELIGIBLE
EMPLOYER.—For purposes of 
this subsection, the term ‘eligible employer’ means 
an employer which is— 
‘‘(A) a State or political subdivision there-
of, the District of Columbia, a possession of the 
United States, or an agency or instrumentality 
of any of the foregoing, or 
‘‘(B) any organization described in section 
501(c) of the Internal Revenue Code of 1986 
which is exempt from taxation under section 
501(a) of such Code. 
‘‘(3) EMPLOYER
PAYROLL
TAXES.—For pur-
poses of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘employer 
payroll taxes’ means the taxes imposed by— 
‘‘(i) section 3111(b), and 
‘‘(ii) sections 3211(a) and 3221(a) 
(determined at a rate equal to the rate 
under section 3111(b)). 
‘‘(B) SPECIAL
RULE.—A rule similar to 
the rule of section 24(d)(2)(C) shall apply for 
purposes of subparagraph (A). 
‘‘(g) TERMINATION.—This section shall not apply to 
any amount paid or incurred after December 31, 2017.’’. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00127
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
128 
(b) TREATMENT AS GENERAL BUSINESS CREDIT.— 
Subsection (b) of section 38 of the Internal Revenue Code 
of 1986 (relating to general business credit) is amended 
by striking ‘‘plus’’ at the end of paragraph (34), by strik-
ing the period at the end of paragraph (35) and inserting 
‘‘, plus’’, and by adding at the end the following: 
‘‘(36) the prevention and wellness credit deter-
mined under section 45R.’’. 
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 
the Internal Revenue Code of 1986 (relating to certain 
expenses for which credits are allowable) is amended by 
adding at the end the following new subsection: 
‘‘(g) PREVENTION AND WELLNESS PROGRAM CRED-
IT.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the costs paid or incurred 
for a qualified prevention and wellness (within the 
meaning of section 45R) allowable as a deduction for 
the taxable year which is equal to the amount of the 
credit allowable for the taxable year under section 
45R. 
‘‘(2) SIMILAR
RULE
WHERE
TAXPAYER
CAP-
ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 
‘‘(A) the amount of the credit determined 
for the taxable year under section 45R, exceeds 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00128
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
129 
‘‘(B) the amount allowable as a deduction 
for such taxable year for a qualified prevention 
and wellness, 
the amount chargeable to capital account for the 
taxable year for such expenses shall be reduced by 
the amount of such excess. 
‘‘(3) CONTROLLED GROUPS.—In the case of a 
corporation which is a member of a controlled group 
of corporations (within the meaning of section 
41(f)(5)) or a trade or business which is treated as 
being under common control with other trades or 
business 
(within 
the 
meaning 
of 
section 
41(f)(1)(B)), this subsection shall be applied under 
rules prescribed by the Secretary similar to the rules 
applicable under subparagraphs (A) and (B) of sec-
tion 41(f)(1).’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following: 
‘‘Sec. 45R. Prevention and wellness program credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
(f) OUTREACH.— 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00129
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
130 
(1) IN GENERAL.—The Secretary of the Treas-
ury, in conjunction with the Director of the Centers 
for Disease Control and members of the business 
community, shall institute an outreach program to 
inform businesses about the availability of the pre-
vention and wellness credit under section 45R of the 
Internal Revenue Code of 1986 as well as to educate 
businesses on how to develop programs according to 
recognized and promising practices and on how to 
measure the success of implemented programs. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated such sums 
as are necessary to carry out the outreach program 
described in paragraph (1). 
SEC. 283. GRANTS TO INCREASE PHYSICAL ACTIVITY AND 
EMOTIONAL 
WELLNESS, 
IMPROVE 
NUTRI-
TION, AND PROMOTE HEALTHY EATING BE-
HAVIORS. 
Part Q of title III of the Public Health Service Act 
(42 U.S.C. 280h et seq.) is amended by striking section 
399W and inserting the following: 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00130
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
131 
‘‘SEC. 399W. GRANTS TO INCREASE PHYSICAL ACTIVITY 
AND EMOTIONAL WELLNESS, IMPROVE NU-
TRITION, AND PROMOTE HEALTHY EATING 
BEHAVIORS AND HEALTHY LIVING. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN
GENERAL.—The Secretary, acting 
through the Director of the Centers for Disease 
Control and Prevention and in coordination with the 
Administrator of the Health Resources and Services 
Administration, the Director of the Indian Health 
Service, the Secretary of Education, the Secretary of 
Agriculture, the Secretary of the Interior, the Direc-
tor of the National Institutes of Health, the Director 
of the Office of Women’s Health, and the heads of 
other appropriate agencies, shall award competitive 
grants to eligible entities to plan and implement pre-
vention and wellness programs that promote health 
and wellness and prevent chronic disease. Such 
grants may be awarded to target at-risk populations 
including youth, health disparity populations (as de-
fined in section 485E(d)), and the underserved. 
‘‘(2) TERM.—The Secretary shall award grants 
under this subsection for a period not to exceed 4 
years. 
‘‘(b) AWARD OF GRANTS.—An eligible entity desiring 
a grant under this section shall submit an application to 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00131
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
132 
the Secretary at such time, in such manner, and con-
taining such information as the Secretary may require, in-
cluding— 
‘‘(1) a plan describing a comprehensive pro-
gram of approaches to encourage healthy living, 
emotional wellness, healthy eating behaviors, and 
healthy levels of physical activity; 
‘‘(2) the manner in which the eligible entity will 
coordinate with appropriate State and local authori-
ties and community-based organizations, including 
but not limited to— 
‘‘(A) State and local educational agencies; 
‘‘(B) departments of health; 
‘‘(C) State directors of programs under 
section 17 of the Child Nutrition Act of 1966 
(42 U.S.C. 1786); and 
‘‘(D) community-based organizations serv-
ing youth; and 
‘‘(3) the manner in which the applicant will 
evaluate the effectiveness of the program carried out 
under this section. 
‘‘(c) COORDINATION.—In awarding grants under this 
section, the Secretary shall ensure that the proposed pro-
grams show a history of addressing these issues, have pro-
gram evaluations that show success, and are coordinated 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00132
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
133 
in substance and format with programs currently funded 
through other Federal agencies and operating within the 
community. 
‘‘(d) ELIGIBLE ENTITY.—In this section, the term 
‘eligible entity’ means— 
‘‘(1) a city, county, tribe, territory, or State; 
‘‘(2) a State educational agency; 
‘‘(3) a tribal educational agency; 
‘‘(4) a local educational agency; 
‘‘(5) a federally qualified health center (as de-
fined in section 1861(aa)(4) of the Social Security 
Act); 
‘‘(6) a rural health clinic; 
‘‘(7) a health department; 
‘‘(8) an Indian Health Service hospital or clinic; 
‘‘(9) an Indian tribal health facility; 
‘‘(10) an urban Indian facility; 
‘‘(11) any health provider; 
‘‘(12) an accredited university or college; 
‘‘(13) a youth serving organization; 
‘‘(14) a community-based organization; or 
‘‘(15) any other entity determined appropriate 
by the Secretary. 
‘‘(e) USE OF FUNDS.—An eligible entity that receives 
a grant under this section shall use the funds made avail-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00133
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
134 
able through the grant to plan and implement prevention 
and wellness programs that promote health and wellness 
and prevent chronic disease. 
‘‘(f) MATCHING FUNDS.—In awarding grants under 
subsection (a), the Secretary may give priority to eligible 
entities who provide matching contributions. Such non- 
Federal contributions may be cash or in-kind, fairly evalu-
ated, including plant, equipment, training, curriculum, or 
a preexisting evaluation framework. 
‘‘(g) TECHNICAL ASSISTANCE.—The Secretary may 
set aside an amount not to exceed 10 percent of the total 
amount appropriated for a fiscal year under subsection (j) 
to permit the Director of the Centers for Disease Control 
and Prevention to provide grantees with technical support 
in the development, implementation, and evaluation of pre-
vention and wellness programs under this section and to 
disseminate information about effective strategies and 
interventions in promoting health and wellness and pre-
venting chronic disease. 
‘‘(h) LIMITATION ON ADMINISTRATIVE COSTS.—An 
eligible entity awarded a grant under this section may not 
use more than 10 percent of funds awarded under such 
grant for administrative expenses. 
‘‘(i) REPORT.—Not later than 6 years after the date 
of enactment of this section the Director of the Centers 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00134
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
135 
for Disease Control and Prevention shall review the results 
of the grants awarded under this section and other related 
research and identify prevention and wellness programs 
that have demonstrated effectiveness in promoting health 
and wellness and preventing chronic disease. Such review 
shall include an identification of model curricula, best 
practices, and lessons learned, as well as recommendations 
for next steps to promote health and wellness and prevent 
chronic disease. Information derived from such review, in-
cluding model prevention and wellness program curricula, 
shall be disseminated to the public. 
‘‘(j) DEFINITION.—In this section, the term ‘preven-
tion and wellness program’ means a program that consists 
of a combination of activities that are designed to increase 
awareness, assess risks, educate, and promote voluntary 
behavior change to improve the health of an individual, 
modify his or her consumer health behavior, enhance his 
or her personal well-being and productivity, and prevent 
illness and injury. 
‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section, 
$60,000,000 for fiscal year 2010, and such sums as may 
be necessary for each of fiscal years 2011 through 2014.’’. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00135
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
136 
SEC. 284. PREVENTION AND WELLNESS PROGRAMS FOR IN-
DIVIDUALS AND FAMILIES. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall encourage States to work with in-
surance companies on ways to promote and incentivize the 
participation of individuals and families in prevention and 
wellness programs, such as through insurance premium 
reductions. 
(b) DEFINITION.—In this section, the term ‘‘preven-
tion and wellness program’’ means a program that con-
sists of a combination of activities that are designed to 
increase awareness, assess risks, educate, and promote 
voluntary behavior change to improve the health of an in-
dividual, modify his or her consumer health behavior, en-
hance his or her personal well-being and productivity, and 
prevent illness and injury. 
TITLE III—EXPANDING ACCESS 
TO HEALTH CARE 
Subtitle A—State Innovation 
Program 
SEC. 
301. 
ENSURING 
AFFORDABILITY 
AND 
ACCESS 
THROUGH UNIVERSAL ACCESS PROGRAMS. 
(a) STATE REQUIREMENT.— 
(1) IN GENERAL.—Not later than 2 years after 
the date of the enactment of this Act, in order to 
qualify for preferences and increased flexibility 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00136
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
137 
under section 412(a), each State shall implement at 
least one of the following programs for the purposes 
of mitigating the cost to insurers of providing insur-
ance to high risk individuals in the State: 
(A) a qualified State reinsurance program 
defined in subsection (b); or 
(B) a subsection (c) qualified State high 
risk pool program defined in subsection (c)(1). 
(2) FUNDING.—As a condition of qualifying for 
preferences and increased flexibility under section 
412(a), a State shall— 
(A) make available non-Federal contribu-
tions, as specified by the Secretary, to ensure 
the continuing stability of any program imple-
mented by the State under paragraph (1); and 
(B) at the time of application, submit to 
the Secretary of Health and Human Services a 
budget plan, including assurances that the 
State has in place a method to satisfy the re-
quirement under subparagraph (A). 
(b) QUALIFIED STATE REINSURANCE PROGRAM.— 
(1) QUALIFIED STATE REINSURANCE PROGRAM 
DEFINED.—For purposes of this section, the term 
‘‘qualified State reinsurance program’’ means a pro-
gram that is operated by a State or a program au-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00137
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
138 
thorized by the State to provide reinsurance for 
health insurance coverage offered in the individual 
or small group market. 
(2) FORM OF PROGRAM.—A qualified State re-
insurance program may provide reinsurance— 
(A) on a prospective or retrospective basis; 
(B) that protects health insurance issuers 
against the annual aggregate spending of their 
enrollees; and 
(C) that provides purchase protection 
against individual catastrophic costs. 
(3) SATISFACTION OF HIPAA REQUIREMENT.— 
Section 2745(g)(1) of the Public Health Service Act 
is amended by adding at the end the following new 
subparagraph: 
‘‘(B) TREATMENT OF CERTAIN REINSUR-
ANCE
PROGRAMS.—For purposes of subpara-
graph (A), the term ‘qualified high risk pool’ 
includes a qualified State reinsurance program 
under the Medical Rights and Reform Act of 
2009.’’. 
(c) SUBSECTION (C) QUALIFYING STATE HIGH RISK 
POOL.— 
(1) DEFINED.—For purposes of this section, 
the term ‘‘subsection (c) qualified State high risk 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00138
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
139 
pool program’’ means a program that operates a 
high risk pool that— 
(A) is a qualified high risk pool under sec-
tion 2745(g)(1)(A) of the Public Health Service 
Act; and 
(B) meets all of the following require-
ments: 
(i) The high risk pool provides a vari-
ety of types of coverage, including at least 
one high deductible health plan that may 
be coupled with a health savings account. 
(ii) The high risk pool is funded with 
a stable funding source that is not solely 
dependent on an appropriation from the 
State legislature. 
(iii) The high risk pool has no waiting 
list and no pre-existing condition exclu-
sionary periods so that all eligible residents 
who are seeking coverage through the pool 
can receive coverage through the pool. 
(iv) The high risk pool allows for cov-
erage of individuals who, but for the 24- 
month disability waiting period under sec-
tion 226(b) of the Social Security Act, 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00139
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
140 
would be eligible for Medicare during the 
period of such waiting period. 
(v) The high risk pool does not charge 
participants a premium that is more than 
150 percent of the average premium for 
coverage in the individual market in that 
State. 
(vi) The high risk pool conducts edu-
cation and outreach initiatives so that resi-
dents and insurance brokers understand 
that the pool is available to eligible resi-
dents. 
(2) RELATION
TO
SECTION
2745.—Section 
2745(g)(1) of the Public Health Service Act is fur-
ther amended— 
(A) in subparagraph (A), by striking ‘‘The 
term’’ and inserting ‘‘Subject to subparagraph 
(C), the term’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(C) UPDATED
DEFINITION.—Beginning 
on the last day of the 2-year period beginning 
in the date of the enactment of the Medical 
Rights and Reform Act of 2009, the term 
‘qualified high risk pool’ means a pool that 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00140
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
141 
meets the requirements of subparagraph (A) of 
this paragraph and the requirements of section 
411(c)(1) of such Act.’’. 
(3) RELATION TO CURRENT QUALIFIED HIGH 
RISK POOL PROGRAM OPERATING A QUALIFIED HIGH 
RISK POOL.—In the case of a State that is operating 
a qualified high risk pool under section 2745 of the 
Public Health Service Act as of the date of the en-
actment of this Act, the State may use current fund-
ing sources to transition from the operation of such 
a pool to— 
(A) the operation of a qualified State rein-
surance program described in subsection (b); or 
(B) a qualified high risk pool under section 
2745(g)(1)(C) of the Public Health Service Act. 
(d) WAIVERS.—In order to accommodate new and in-
novative programs, the Secretary may waive such require-
ments of this section for qualified State reinsurance pro-
grams and for subsection (c) qualifying State high risk 
pools as the Secretary deems appropriate. 
SEC. 302. ENHANCED FEDERAL FUNDING AND REDUCED 
RED-TAPE FOR STATE EFFORTS TO IMPROVE 
ACCESS TO HEALTH INSURANCE COVERAGE. 
(a) BENEFITS OF OPERATING A UNIVERSAL ACCESS 
PROGRAM.— 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00141
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
142 
(1) INCREASED FLEXIBILITY FOR STATES.—In 
the case of a State that conducts an universal access 
program described in section 301(a), the require-
ments of section 1115 of the Social Security Act (42 
U.S.C. 1315) shall not apply to activities conducted 
by a State through a State innovation program de-
scribed in section 303. 
(2) PREFERENCE FOR COMPETITIVE GRANTS.— 
Beginning 3 years after the date of the enactment 
of this Act, in the case of a competitive grant for 
which the only eligible entities are States, the Sec-
retary, in awarding such grant to a State, shall give 
preference to any State with a program that meets 
the requirements of paragraphs (1) and (2) of sec-
tion section 301(a). 
(b) STATE INCENTIVES FOR STATES IMPLEMENTING 
A STATE INNOVATION PROGRAM.— 
(1) ONE-TIME PAYMENT FOR STATES IMPLE-
MENTING
A
STATE
INNOVATION
PROGRAM.—The 
Secretary shall make a one-time payment to a State 
that establishes a State innovation program under 
section 303. 
(2) ADDITIONAL
PAYMENTS
FOR
STATES
IM-
PLEMENTING A STATE INNOVATION PROGRAM.— 
(A) ANNUAL PAYMENTS.— 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00142
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
143 
(i) IN GENERAL.—The Secretary shall 
make annual payments to a State that 
meets the requirements under subpara-
graph (B). 
(ii) LIMITATION.—The Secretary may 
make payments under clause (i) to a State 
for no more than a total period of 5 years, 
after which period such payments shall be 
subject to review by the Secretary. 
(B) REQUIREMENTS FOR ADDITIONAL PAY-
MENTS.—A State meets the requirements of 
this paragraph if the State— 
(i) operates a State innovation pro-
gram; 
(ii) conducts activities under at least 
2 of the paragraphs in section 303; 
(iii) operates a State transparency 
program described in section 304; and 
(iv) reduces the number of uninsured 
individuals in the State without signifi-
cantly expanding programs that increase 
direct spending for the Federal government 
and State budgets. 
(C) USE OF FUNDS.—The State shall use 
funds from a payment under subparagraph (A) 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00143
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
144 
to improve the State’s universal access pro-
gram. 
SEC. 303. STATE INNOVATION PROGRAM DESCRIBED. 
For purposes of this subtitle, a State innovation pro-
gram is a program operated by a State that consists of 
any of the following: 
(1) A health plan finder described in section 
305. 
(2) Assistance for small businesses jointly pur-
chasing health insurance coverage through small 
business health plans under section 306. 
(3) An interstate compact on health insurance 
regulation under section 307. 
(4) The offering in the State of a basic cata-
strophic health benefit plan as defined in section 
308(1). 
SEC. 304. STATE TRANSPARENCY PROGRAM DESCRIBED. 
For purposes of this subtitle, a State transparency 
program is a program through which the State— 
(1) partners with private groups (including 
State medical associations) and, through such part-
nerships, obtains pricing and quality information re-
lated to health care services that are provided in the 
State; and 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00144
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
145 
(2) provides members of the public with access 
to such information. 
SEC. 305. HEALTH PLAN FINDER. 
A health plan finder described under this section is 
a program, operated by a State (or a State acting in co-
operation with other States) that— 
(1) provides consumers with information about 
the health insurance coverage available to such con-
sumer (including information about basic cata-
strophic health benefit plans described in section 
303(5)); 
(2) connects consumers with health insurance 
specialists who provide advice to such consumers on 
which health insurance coverage would best serve the 
individual needs of each such consumer (taking into 
account the quality of the health care providers par-
ticipating in such in coverage); and 
(3) may, at the option of the State, enroll indi-
viduals— 
(A) who are eligible for the Medicaid pro-
gram under title XIX of the Social Security Act 
in such program; and 
(B) who are eligible for the State Chil-
dren’s Health Insurance Program under title 
XXI of such Act in such program. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00145
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
146 
SEC. 306. SMALL BUSINESS HEALTH PLANS. 
For purposes of a State innovation program under 
this subtitle, a State may assist small businesses in jointly 
purchasing health insurance coverage through small busi-
ness health plans that allow such businesses to combine 
purchasing and negotiating power and to pool risk in order 
to obtain more affordable health care benefits for the em-
ployees of such businesses. 
SEC. 307. INTERSTATE COMPACTS ON HEALTH INSURANCE 
REGULATION. 
For purposes of a State innovation program under 
this subtitle, a State may establish an interstate compact 
with one or more States to establish a common regulatory 
system for health insurance coverage for the purpose of 
increasing the availability and diversity of health insur-
ance coverage in the State, including provisions allowing 
small businesses to form small business health plans (as 
described in section 306) and permitting individuals to 
purchase insurance across State lines. 
SEC. 308. DEFINITIONS. 
For purposes of this subtitle: 
(1) BASIC
CATASTROPHIC
HEALTH
BENEFIT 
PLAN.—The term ‘‘basic catastrophic health benefits 
plan’’ means health insurance coverage— 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00146
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
147 
(A) that is a high deductible plan (as de-
fined under section 223(c)(2) of the Internal 
Revenue Code of 1986); and 
(B) that is not subject to benefit mandates 
otherwise applicable under State law. 
(2) HEALTH INSURANCE COVERAGE.—The term 
‘‘health insurance coverage’’ has the meaning given 
such term under section 2791(b)(1) of the Public 
Health Service Act. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(4) STATE.—The term ‘‘State’’ means the sev-
eral States, the District of Columbia, Guam, the 
Commonwealth of Puerto Rico, the Northern Mar-
iana Islands, the Virgin Islands, American Samoa, 
and the Trust Territory of the Pacific Islands. 
(5) STATE INNOVATION PROGRAM.—The term 
‘‘State innovation program’’ means a program de-
scribed in section 303. 
(6) UNIVERSAL ACCESS PROGRAM.—The term 
‘‘universal access program’’ means a program de-
scribed in section 301. 
SEC. 309. AUTHORIZATION FOR APPROPRIATIONS. 
There is authorized to be appropriated such sums as 
are necessary to carry out the provisions of this subtitle. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00147
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
148 
Subtitle B—Interstate Market for 
Health Insurance 
SEC. 311. SPECIFICATION OF CONSTITUTIONAL AUTHORITY 
FOR ENACTMENT OF LAW. 
This subtitle is enacted pursuant to the power grant-
ed Congress under article I, section 8, clause 3, of the 
United States Constitution. 
SEC. 312. FINDINGS. 
Congress finds the following: 
(1) The application of numerous and significant 
variations in State law impacts the ability of insur-
ers to offer, and individuals to obtain, affordable in-
dividual health insurance coverage, thereby impeding 
commerce in individual health insurance coverage. 
(2) Individual health insurance coverage is in-
creasingly offered through the Internet, other elec-
tronic means, and by mail, all of which are inher-
ently part of interstate commerce. 
(3) In response to these issues, it is appropriate 
to encourage increased efficiency in the offering of 
individual health insurance coverage through a col-
laborative approach by the States in regulating this 
coverage. 
(4) The establishment of risk-retention groups 
has provided a successful model for the sale of insur-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00148
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
149 
ance across State lines, as the acts establishing 
those groups allow insurance to be sold in multiple 
States but regulated by a single State. 
SEC. 
313. 
COOPERATIVE 
GOVERNING 
OF 
INDIVIDUAL 
HEALTH INSURANCE COVERAGE. 
(a) IN GENERAL.—Title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg et seq.) is amended by add-
ing at the end the following new part: 
‘‘PART D—COOPERATIVE GOVERNING OF 
INDIVIDUAL HEALTH INSURANCE COVERAGE 
‘‘SEC. 2795. DEFINITIONS. 
‘‘In this part: 
‘‘(1) PRIMARY
STATE.—The term ‘primary 
State’ means, with respect to individual health insur-
ance coverage offered by a health insurance issuer, 
the State designated by the issuer as the State 
whose covered laws shall govern the health insurance 
issuer in the sale of such coverage under this part. 
An issuer, with respect to a particular policy, may 
only designate one such State as its primary State 
with respect to all such coverage it offers. Such an 
issuer may not change the designated primary State 
with respect to individual health insurance coverage 
once the policy is issued, except that such a change 
may be made upon renewal of the policy. With re-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00149
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
150 
spect to such designated State, the issuer is deemed 
to be doing business in that State. 
‘‘(2) SECONDARY STATE.—The term ‘secondary 
State’ means, with respect to individual health insur-
ance coverage offered by a health insurance issuer, 
any State that is not the primary State. In the case 
of a health insurance issuer that is selling a policy 
in, or to a resident of, a secondary State, the issuer 
is deemed to be doing business in that secondary 
State. 
‘‘(3) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning given such 
term in section 2791(b)(2), except that such an 
issuer must be licensed in the primary State and be 
qualified to sell individual health insurance coverage 
in that State. 
‘‘(4) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—The term ‘individual health insurance cov-
erage’ means health insurance coverage offered in 
the individual market, as defined in section 
2791(e)(1). 
‘‘(5) APPLICABLE
STATE
AUTHORITY.—The 
term ‘applicable State authority’ means, with respect 
to a health insurance issuer in a State, the State in-
surance commissioner or official or officials des-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00150
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
151 
ignated by the State to enforce the requirements of 
this title for the State with respect to the issuer. 
‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 
term ‘hazardous financial condition’ means that, 
based on its present or reasonably anticipated finan-
cial condition, a health insurance issuer is unlikely 
to be able— 
‘‘(A) to meet obligations to policyholders 
with respect to known claims and reasonably 
anticipated claims; or 
‘‘(B) to pay other obligations in the normal 
course of business. 
‘‘(7) COVERED LAWS.— 
‘‘(A) IN
GENERAL.—The term ‘covered 
laws’ means the laws, rules, regulations, agree-
ments, and orders governing the insurance busi-
ness pertaining to— 
‘‘(i) individual health insurance cov-
erage issued by a health insurance issuer; 
‘‘(ii) the offer, sale, rating (including 
medical 
underwriting), 
renewal, 
and 
issuance of individual health insurance cov-
erage to an individual; 
‘‘(iii) the provision to an individual in 
relation to individual health insurance cov-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00151
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
152 
erage of health care and insurance related 
services; 
‘‘(iv) the provision to an individual in 
relation to individual health insurance cov-
erage of management, operations, and in-
vestment activities of a health insurance 
issuer; and 
‘‘(v) the provision to an individual in 
relation to individual health insurance cov-
erage of loss control and claims adminis-
tration for a health insurance issuer with 
respect to liability for which the issuer pro-
vides insurance. 
‘‘(B) EXCEPTION.—Such term does not in-
clude any law, rule, regulation, agreement, or 
order governing the use of care or cost manage-
ment techniques, including any requirement re-
lated to provider contracting, network access or 
adequacy, health care data collection, or quality 
assurance. 
‘‘(8) STATE.—The term ‘State’ means the 50 
States and includes the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00152
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
153 
‘‘(9) UNFAIR
CLAIMS
SETTLEMENT
PRAC-
TICES.—The term ‘unfair claims settlement prac-
tices’ means only the following practices: 
‘‘(A) Knowingly misrepresenting to claim-
ants and insured individuals relevant facts or 
policy provisions relating to coverage at issue. 
‘‘(B) Failing to acknowledge with reason-
able promptness pertinent communications with 
respect to claims arising under policies. 
‘‘(C) Failing to adopt and implement rea-
sonable standards for the prompt investigation 
and settlement of claims arising under policies. 
‘‘(D) Failing to effectuate prompt, fair, 
and equitable settlement of claims submitted in 
which liability has become reasonably clear. 
‘‘(E) Refusing to pay claims without con-
ducting a reasonable investigation. 
‘‘(F) Failing to affirm or deny coverage of 
claims within a reasonable period of time after 
having completed an investigation related to 
those claims. 
‘‘(G) A pattern or practice of compelling 
insured individuals or their beneficiaries to in-
stitute suits to recover amounts due under its 
policies by offering substantially less than the 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00153
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
154 
amounts ultimately recovered in suits brought 
by them. 
‘‘(H) A pattern or practice of attempting 
to settle or settling claims for less than the 
amount that a reasonable person would believe 
the insured individual or his or her beneficiary 
was entitled by reference to written or printed 
advertising material accompanying or made 
part of an application. 
‘‘(I) Attempting to settle or settling claims 
on the basis of an application that was materi-
ally altered without notice to, or knowledge or 
consent of, the insured. 
‘‘(J) Failing to provide forms necessary to 
present claims within 15 calendar days of a re-
quests with reasonable explanations regarding 
their use. 
‘‘(K) Attempting to cancel a policy in less 
time than that prescribed in the policy or by the 
law of the primary State. 
‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 
and abuse’ means an act or omission committed by 
a person who, knowingly and with intent to defraud, 
commits, or conceals any material information con-
cerning, one or more of the following: 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00154
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
155 
‘‘(A) Presenting, causing to be presented 
or preparing with knowledge or belief that it 
will be presented to or by an insurer, a rein-
surer, broker or its agent, false information as 
part of, in support of or concerning a fact ma-
terial to one or more of the following: 
‘‘(i) An application for the issuance or 
renewal of an insurance policy or reinsur-
ance contract. 
‘‘(ii) The rating of an insurance policy 
or reinsurance contract. 
‘‘(iii) A claim for payment or benefit 
pursuant to an insurance policy or reinsur-
ance contract. 
‘‘(iv) Premiums paid on an insurance 
policy or reinsurance contract. 
‘‘(v) Payments made in accordance 
with the terms of an insurance policy or 
reinsurance contract. 
‘‘(vi) A document filed with the com-
missioner or the chief insurance regulatory 
official of another jurisdiction. 
‘‘(vii) The financial condition of an in-
surer or reinsurer. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00155
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
156 
‘‘(viii) The formation, acquisition, 
merger, 
reconsolidation, 
dissolution 
or 
withdrawal from one or more lines of in-
surance or reinsurance in all or part of a 
State by an insurer or reinsurer. 
‘‘(ix) The issuance of written evidence 
of insurance. 
‘‘(x) The reinstatement of an insur-
ance policy. 
‘‘(B) Solicitation or acceptance of new or 
renewal insurance risks on behalf of an insurer 
reinsurer or other person engaged in the busi-
ness of insurance by a person who knows or 
should know that the insurer or other person 
responsible for the risk is insolvent at the time 
of the transaction. 
‘‘(C) Transaction of the business of insur-
ance in violation of laws requiring a license, cer-
tificate of authority or other legal authority for 
the transaction of the business of insurance. 
‘‘(D) Attempt to commit, aiding or abet-
ting in the commission of, or conspiracy to com-
mit the acts or omissions specified in this para-
graph. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00156
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
157 
‘‘SEC. 2796. APPLICATION OF LAW. 
‘‘(a) IN GENERAL.—The covered laws of the primary 
State shall apply to individual health insurance coverage 
offered by a health insurance issuer in the primary State 
and in any secondary State, but only if the coverage and 
issuer comply with the conditions of this section with re-
spect to the offering of coverage in any secondary State. 
‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC-
ONDARY STATE.—Except as provided in this section, a 
health insurance issuer with respect to its offer, sale, rat-
ing (including medical underwriting), renewal, and 
issuance of individual health insurance coverage in any 
secondary State is exempt from any covered laws of the 
secondary State (and any rules, regulations, agreements, 
or orders sought or issued by such State under or related 
to such covered laws) to the extent that such laws would— 
‘‘(1) make unlawful, or regulate, directly or in-
directly, the operation of the health insurance issuer 
operating in the secondary State, except that any 
secondary State may require such an issuer— 
‘‘(A) to pay, on a nondiscriminatory basis, 
applicable premium and other taxes (including 
high risk pool assessments) which are levied on 
insurers and surplus lines insurers, brokers, or 
policyholders under the laws of the State; 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00157
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
158 
‘‘(B) to register with and designate the 
State insurance commissioner as its agent solely 
for the purpose of receiving service of legal doc-
uments or process; 
‘‘(C) to submit to an examination of its fi-
nancial condition by the State insurance com-
missioner in any State in which the issuer is 
doing business to determine the issuer’s finan-
cial condition, if— 
‘‘(i) the State insurance commissioner 
of the primary State has not done an ex-
amination within the period recommended 
by the National Association of Insurance 
Commissioners; and 
‘‘(ii) any such examination is con-
ducted in accordance with the examiners’ 
handbook of the National Association of 
Insurance Commissioners and is coordi-
nated to avoid unjustified duplication and 
unjustified repetition; 
‘‘(D) to comply with a lawful order 
issued— 
‘‘(i) in a delinquency proceeding com-
menced by the State insurance commis-
sioner if there has been a finding of finan-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00158
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
159 
cial impairment under subparagraph (C); 
or 
‘‘(ii) in a voluntary dissolution pro-
ceeding; 
‘‘(E) to comply with an injunction issued 
by a court of competent jurisdiction, upon a pe-
tition by the State insurance commissioner al-
leging that the issuer is in hazardous financial 
condition; 
‘‘(F) to participate, on a nondiscriminatory 
basis, in any insurance insolvency guaranty as-
sociation or similar association to which a 
health insurance issuer in the State is required 
to belong; 
‘‘(G) to comply with any State law regard-
ing fraud and abuse (as defined in section 
2795(10)), except that if the State seeks an in-
junction regarding the conduct described in this 
subparagraph, such injunction must be obtained 
from a court of competent jurisdiction; 
‘‘(H) to comply with any State law regard-
ing unfair claims settlement practices (as de-
fined in section 2795(9)); or 
‘‘(I) to comply with the applicable require-
ments for independent review under section 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00159
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
160 
2798 with respect to coverage offered in the 
State; 
‘‘(2) require any individual health insurance 
coverage issued by the issuer to be countersigned by 
an insurance agent or broker residing in that Sec-
ondary State; or 
‘‘(3) otherwise discriminate against the issuer 
issuing insurance in both the primary State and in 
any secondary State. 
‘‘(c) CLEAR
AND CONSPICUOUS DISCLOSURE.—A 
health insurance issuer shall provide the following notice, 
in 12-point bold type, in any insurance coverage offered 
in a secondary State under this part by such a health in-
surance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the 
name of the health insurance issuer, the name of primary 
State, the name of the secondary State, the name of the 
secondary State, and the name of the secondary State, re-
spectively, for the coverage concerned: 
‘‘Notice 
‘‘ ‘This policy is issued by XXXXX and is gov-
erned by the laws and regulations of the State of 
XXXXX, and it has met all the laws of that State 
as determined by that State’s Department of Insur-
ance. This policy may be less expensive than others 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00160
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
161 
because it is not subject to all of the insurance laws 
and regulations of the State of XXXXX, including 
coverage of some services or benefits mandated by 
the law of the State of XXXXX. Additionally, this 
policy is not subject to all of the consumer protec-
tion laws or restrictions on rate changes of the State 
of XXXXX. As with all insurance products, before 
purchasing this policy, you should carefully review 
the policy and determine what health care services 
the policy covers and what benefits it provides, in-
cluding any exclusions, limitations, or conditions for 
such services or benefits.’. 
‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS 
AND PREMIUM INCREASES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, a health insurance issuer that provides indi-
vidual health insurance coverage to an individual 
under this part in a primary or secondary State may 
not upon renewal— 
‘‘(A) move or reclassify the individual in-
sured under the health insurance coverage from 
the class such individual is in at the time of 
issue of the contract based on the health-status 
related factors of the individual; or 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00161
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
162 
‘‘(B) increase the premiums assessed the 
individual for such coverage based on a health 
status-related factor or change of a health sta-
tus-related factor or the past or prospective 
claim experience of the insured individual. 
‘‘(2) CONSTRUCTION.—Nothing in paragraph 
(1) shall be construed to prohibit a health insurance 
issuer— 
‘‘(A) from terminating or discontinuing 
coverage or a class of coverage in accordance 
with subsections (b) and (c) of section 2742; 
‘‘(B) from raising premium rates for all 
policy holders within a class based on claims ex-
perience; 
‘‘(C) from changing premiums or offering 
discounted premiums to individuals who engage 
in wellness activities at intervals prescribed by 
the issuer, if such premium changes or incen-
tives— 
‘‘(i) are disclosed to the consumer in 
the insurance contract; 
‘‘(ii) are based on specific wellness ac-
tivities that are not applicable to all indi-
viduals; and 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00162
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
163 
‘‘(iii) are not obtainable by all individ-
uals to whom coverage is offered; 
‘‘(D) from reinstating lapsed coverage; or 
‘‘(E) from retroactively adjusting the rates 
charged an insured individual if the initial rates 
were set based on material misrepresentation by 
the individual at the time of issue. 
‘‘(e) PRIOR OFFERING
OF POLICY
IN PRIMARY 
STATE.—A health insurance issuer may not offer for sale 
individual health insurance coverage in a secondary State 
unless that coverage is currently offered for sale in the 
primary State. 
‘‘(f) LICENSING
OF AGENTS
OR BROKERS
FOR 
HEALTH INSURANCE ISSUERS.—Any State may require 
that a person acting, or offering to act, as an agent or 
broker for a health insurance issuer with respect to the 
offering of individual health insurance coverage obtain a 
license from that State, with commissions or other com-
pensation subject to the provisions of the laws of that 
State, except that a State may not impose any qualifica-
tion or requirement which discriminates against a non-
resident agent or broker. 
‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN-
SURANCE COMMISSIONER.—Each health insurance issuer 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00163
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
164 
issuing individual health insurance coverage in both pri-
mary and secondary States shall submit— 
‘‘(1) to the insurance commissioner of each 
State in which it intends to offer such coverage, be-
fore it may offer individual health insurance cov-
erage in such State— 
‘‘(A) a copy of the plan of operation or fea-
sibility study or any similar statement of the 
policy being offered and its coverage (which 
shall include the name of its primary State and 
its principal place of business); 
‘‘(B) written notice of any change in its 
designation of its primary State; and 
‘‘(C) written notice from the issuer of the 
issuer’s compliance with all the laws of the pri-
mary State; and 
‘‘(2) to the insurance commissioner of each sec-
ondary State in which it offers individual health in-
surance coverage, a copy of the issuer’s quarterly fi-
nancial statement submitted to the primary State, 
which statement shall be certified by an independent 
public accountant and contain a statement of opin-
ion on loss and loss adjustment expense reserves 
made by— 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00164
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
165 
‘‘(A) a member of the American Academy 
of Actuaries; or 
‘‘(B) a qualified loss reserve specialist. 
‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 
Nothing in this section shall be construed to affect the 
authority of any Federal or State court to enjoin— 
‘‘(1) the solicitation or sale of individual health 
insurance coverage by a health insurance issuer to 
any person or group who is not eligible for such in-
surance; or 
‘‘(2) the solicitation or sale of individual health 
insurance coverage that violates the requirements of 
the law of a secondary State which are described in 
subparagraphs 
(A) 
through 
(H) 
of 
section 
2796(b)(1). 
‘‘(i) POWER OF SECONDARY STATES TO TAKE AD-
MINISTRATIVE ACTION.—Nothing in this section shall be 
construed to affect the authority of any State to enjoin 
conduct in violation of that State’s laws described in sec-
tion 2796(b)(1). 
‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 
‘‘(1) IN GENERAL.—Subject to the provisions of 
subsection (b)(1)(G) (relating to injunctions) and 
paragraph (2), nothing in this section shall be con-
strued to affect the authority of any State to make 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00165
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
166 
use of any of its powers to enforce the laws of such 
State with respect to which a health insurance issuer 
is not exempt under subsection (b). 
‘‘(2) COURTS OF COMPETENT JURISDICTION.— 
If a State seeks an injunction regarding the conduct 
described in paragraphs (1) and (2) of subsection 
(h), such injunction must be obtained from a Fed-
eral or State court of competent jurisdiction. 
‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 
section shall affect the authority of any State to bring ac-
tion in any Federal or State court. 
‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 
this section shall be construed to affect the applicability 
of State laws generally applicable to persons or corpora-
tions. 
‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO 
HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 
health insurance issuer is offering coverage in a primary 
State that does not accommodate residents of secondary 
States or does not provide a working mechanism for resi-
dents of a secondary State, and the issuer is offering cov-
erage under this part in such secondary State which has 
not adopted a qualified high risk pool as its acceptable 
alternative mechanism (as defined in section 2744(c)(2)), 
the issuer shall, with respect to any individual health in-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00166
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
167 
surance coverage offered in a secondary State under this 
part, comply with the guaranteed availability requirements 
for eligible individuals in section 2741. 
‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 
BEFORE ISSUER MAY SELL INTO SECONDARY 
STATES. 
‘‘A health insurance issuer may not offer, sell, or 
issue individual health insurance coverage in a secondary 
State if the State insurance commissioner does not use 
a risk-based capital formula for the determination of cap-
ital and surplus requirements for all health insurance 
issuers. 
‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE-
DURES. 
‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur-
ance issuer may not offer, sell, or issue individual health 
insurance coverage in a secondary State under the provi-
sions of this title unless— 
‘‘(1) both the secondary State and the primary 
State have legislation or regulations in place estab-
lishing an independent review process for individuals 
who are covered by individual health insurance cov-
erage, or 
‘‘(2) in any case in which the requirements of 
subparagraph (A) are not met with respect to the ei-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00167
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
168 
ther of such States, the issuer provides an inde-
pendent review mechanism substantially identical (as 
determined by the applicable State authority of such 
State) to that prescribed in the ‘Health Carrier Ex-
ternal Review Model Act’ of the National Association 
of Insurance Commissioners for all individuals who 
purchase insurance coverage under the terms of this 
part, except that, under such mechanism, the review 
is conducted by an independent medical reviewer, or 
a panel of such reviewers, with respect to whom the 
requirements of subsection (b) are met. 
‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL 
REVIEWERS.—In the case of any independent review 
mechanism referred to in subsection (a)(2)— 
‘‘(1) IN GENERAL.—In referring a denial of a 
claim to an independent medical reviewer, or to any 
panel of such reviewers, to conduct independent 
medical review, the issuer shall ensure that— 
‘‘(A) each independent medical reviewer 
meets the qualifications described in paragraphs 
(2) and (3); 
‘‘(B) with respect to each review, each re-
viewer meets the requirements of paragraph (4) 
and the reviewer, or at least 1 reviewer on the 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00168
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
169 
panel, meets the requirements described in 
paragraph (5); and 
‘‘(C) compensation provided by the issuer 
to each reviewer is consistent with paragraph 
(6). 
‘‘(2) LICENSURE AND EXPERTISE.—Each inde-
pendent medical reviewer shall be a physician 
(allopathic or osteopathic) or health care profes-
sional who— 
‘‘(A) is appropriately credentialed or li-
censed in 1 or more States to deliver health 
care services; and 
‘‘(B) typically treats the condition, makes 
the diagnosis, or provides the type of treatment 
under review. 
‘‘(3) INDEPENDENCE.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each independent medical reviewer 
in a case shall— 
‘‘(i) not be a related party (as defined 
in paragraph (7)); 
‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with 
such a party; and 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00169
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
170 
‘‘(iii) not otherwise have a conflict of 
interest with such a party (as determined 
under regulations). 
‘‘(B) EXCEPTION.—Nothing in subpara-
graph (A) shall be construed to— 
‘‘(i) prohibit an individual, solely on 
the basis of affiliation with the issuer, 
from serving as an independent medical re-
viewer if— 
‘‘(I) a non-affiliated individual is 
not reasonably available; 
‘‘(II) the affiliated individual is 
not involved in the provision of items 
or services in the case under review; 
‘‘(III) the fact of such an affili-
ation is disclosed to the issuer and the 
enrollee (or authorized representative) 
and neither party objects; and 
‘‘(IV) the affiliated individual is 
not an employee of the issuer and 
does not provide services exclusively or 
primarily to or on behalf of the issuer; 
‘‘(ii) prohibit an individual who has 
staff privileges at the institution where the 
treatment involved takes place from serv-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00170
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
171 
ing as an independent medical reviewer 
merely on the basis of such affiliation if 
the affiliation is disclosed to the issuer and 
the enrollee (or authorized representative), 
and neither party objects; or 
‘‘(iii) prohibit receipt of compensation 
by an independent medical reviewer from 
an entity if the compensation is provided 
consistent with paragraph (6). 
‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL 
IN SAME FIELD.— 
‘‘(A) IN
GENERAL.—In a case involving 
treatment, or the provision of items or serv-
ices— 
‘‘(i) by a physician, a reviewer shall be 
a practicing physician (allopathic or osteo-
pathic) of the same or similar specialty, as 
a physician who, acting within the appro-
priate scope of practice within the State in 
which the service is provided or rendered, 
typically treats the condition, makes the 
diagnosis, or provides the type of treat-
ment under review; or 
‘‘(ii) by a non-physician health care 
professional, the reviewer, or at least 1 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00171
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
172 
member of the review panel, shall be a 
practicing non-physician health care pro-
fessional of the same or similar specialty 
as the non-physician health care profes-
sional who, acting within the appropriate 
scope of practice within the State in which 
the service is provided or rendered, typi-
cally treats the condition, makes the diag-
nosis, or provides the type of treatment 
under review. 
‘‘(B) PRACTICING
DEFINED.—For pur-
poses of this paragraph, the term ‘practicing’ 
means, with respect to an individual who is a 
physician or other health care professional, that 
the individual provides health care services to 
individual patients on average at least 2 days 
per week. 
‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 
external review relating to a child, a reviewer shall 
have expertise under paragraph (2) in pediatrics. 
‘‘(6) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by the issuer to an 
independent medical reviewer in connection with a 
review under this section shall— 
‘‘(A) not exceed a reasonable level; and 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00172
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
173 
‘‘(B) not be contingent on the decision ren-
dered by the reviewer. 
‘‘(7) RELATED PARTY DEFINED.—For purposes 
of this section, the term ‘related party’ means, with 
respect to a denial of a claim under a coverage relat-
ing to an enrollee, any of the following: 
‘‘(A) The issuer involved, or any fiduciary, 
officer, director, or employee of the issuer. 
‘‘(B) The enrollee (or authorized represent-
ative). 
‘‘(C) The health care professional that pro-
vides the items or services involved in the de-
nial. 
‘‘(D) The institution at which the items or 
services (or treatment) involved in the denial 
are provided. 
‘‘(E) The manufacturer of any drug or 
other item that is included in the items or serv-
ices involved in the denial. 
‘‘(F) Any other party determined under 
any regulations to have a substantial interest in 
the denial involved. 
‘‘(8) DEFINITIONS.—For purposes of this sub-
section: 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00173
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
174 
‘‘(A) ENROLLEE.—The term ‘enrollee’ 
means, with respect to health insurance cov-
erage offered by a health insurance issuer, an 
individual enrolled with the issuer to receive 
such coverage. 
‘‘(B) HEALTH CARE PROFESSIONAL.—The 
term ‘health care professional’ means an indi-
vidual who is licensed, accredited, or certified 
under State law to provide specified health care 
services and who is operating within the scope 
of such licensure, accreditation, or certification. 
‘‘SEC. 2799. ENFORCEMENT. 
‘‘(a) IN GENERAL.—Subject to subsection (b), with 
respect to specific individual health insurance coverage the 
primary State for such coverage has sole jurisdiction to 
enforce the primary State’s covered laws in the primary 
State and any secondary State. 
‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 
subsection (a) shall be construed to affect the authority 
of a secondary State to enforce its laws as set forth in 
the exception specified in section 2796(b)(1). 
‘‘(c) COURT INTERPRETATION.—In reviewing action 
initiated by the applicable secondary State authority, the 
court of competent jurisdiction shall apply the covered 
laws of the primary State. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00174
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
175 
‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 
of individual health insurance coverage offered in a sec-
ondary State that fails to comply with the covered laws 
of the primary State, the applicable State authority of the 
secondary State may notify the applicable State authority 
of the primary State.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to individual health insurance 
coverage offered, issued, or sold after the date that is one 
year after the date of the enactment of this subtitle. 
(c) GAO ONGOING STUDY AND REPORTS.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct an ongoing study con-
cerning the effect of the amendment made by sub-
section (a) on— 
(A) the number of uninsured and under-in-
sured; 
(B) the availability and cost of health in-
surance policies for individuals with pre-existing 
medical conditions; 
(C) the availability and cost of health in-
surance policies generally; 
(D) the elimination or reduction of dif-
ferent types of benefits under health insurance 
policies offered in different States; and 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00175
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
176 
(E) cases of fraud or abuse relating to 
health insurance coverage offered under such 
amendment and the resolution of such cases. 
(2) ANNUAL REPORTS.—The Comptroller Gen-
eral shall submit to Congress an annual report, after 
the end of each of the 5 years following the effective 
date of the amendment made by subsection (a), on 
the ongoing study conducted under paragraph (1). 
SEC. 314. SEVERABILITY. 
If any provision of the Act or the application of such 
provision to any person or circumstance is held to be un-
constitutional, the remainder of this subtitle and the appli-
cation of the provisions of such to any other person or 
circumstance shall not be affected. 
Subtitle C—Young Adult 
Healthcare Coverage 
SEC. 321. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT COVERAGE FOR CERTAIN UNMAR-
RIED, UNINSURED YOUNG ADULTS. 
(a) UNDER GROUP HEALTH PLANS.— 
(1) EMPLOYEE RETIREMENT INCOME SECURITY 
ACT OF 1974 AMENDMENTS.— 
(A) IN GENERAL.—The Employee Retire-
ment Income Security Act of 1974 is amended 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00176
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
177 
by inserting after section 703 the following new 
section: 
‘‘SEC. 704. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT COVERAGE FOR CERTAIN UNMAR-
RIED, UNINSURED YOUNG ADULTS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering health insurance coverage in con-
nection with a group health plan that provides coverage 
for dependent children shall make available such coverage, 
at the option of the participant involved, for one or more 
qualified children (as defined in subsection (b)) of the par-
ticipant. 
‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘qualified child’ means, with respect to a partici-
pant in a group health plan or group health insurance cov-
erage, an individual who (but for age) would be treated 
as a dependent child of the participant under such plan 
or coverage and who— 
‘‘(1) is under 26 years of age; 
‘‘(2) is not married; 
‘‘(3) has no dependents; 
‘‘(4) is a citizen or national of the United 
States; and 
‘‘(5) is not provided coverage as a participant, 
beneficiary, or enrollee (other than under this sec-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00177
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
178 
tion) under any other creditable coverage (as defined 
in section 701(c)(1)). 
‘‘(c) PREMIUMS.—Nothing in this section shall be 
construed as preventing a group health plan or health in-
surance issuer with respect to group health insurance cov-
erage from increasing the premiums otherwise required for 
coverage provided under this section.’’. 
(B) CLERICAL AMENDMENT.—The table of 
contents of such Act is amended by inserting 
after the item relating to section 703 the fol-
lowing new item: 
‘‘704. Requiring the option of extension of dependent coverage for certain un-
married young adults.’’. 
(2) PHSA.—Title XXVII of the Public Health 
Service Act is amended by inserting after section 
2702 the following new section: 
‘‘SEC. 2703. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT COVERAGE FOR CERTAIN UNMAR-
RIED, UNINSURED YOUNG ADULTS. 
‘‘The provisions of section 704 of the Employee Re-
tirement Income Security Act of 1974 shall apply to health 
insurance coverage offered by a health insurance issuer 
in the individual market in the same manner as they apply 
to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan in the small 
or large group market.’’. 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00178
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
179 
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 
Title XXVII of the Public Health Service Act is amended 
by inserting after section 2745 the following new section: 
‘‘SEC. 2746. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT COVERAGE FOR CERTAIN UNMAR-
RIED YOUNG ADULTS. 
‘‘The provisions of section 2703 shall apply to health 
insurance coverage offered by a health insurance issuer 
in the individual market in the same manner as they apply 
to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan in the small 
or large group market.’’. 
(c) EFFECTIVE DATES.— 
(1) GROUP HEALTH PLANS.— 
(A) IN GENERAL.—The amendments made 
by subsection (a) shall apply to group health 
plans for plan years beginning on or after the 
date that is 90 days after the date of enactment 
of this Act. 
(B) SPECIAL RULE FOR COLLECTIVE BAR-
GAINING AGREEMENTS.—In the case of a group 
health plan maintained pursuant to 1 or more 
collective bargaining agreements between em-
ployee representatives and 1 or more employers, 
any plan amendment made pursuant to a collec-
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00179
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
180 
tive bargaining agreement relating to the plan 
which amends the plan solely to conform to any 
requirement added by an amendment made by 
subsection (a) shall not be treated as a termi-
nation of such collective bargaining agreement. 
(2) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—Section 2746 of the Public Health Service 
Act, as inserted by subsection (b), shall apply with 
respect to health insurance coverage offered, sold, 
issued, renewed, in effect, or operated in the indi-
vidual market after the first day of the first month 
that begins more than 90 days after the date of the 
enactment of this Act. 
TITLE IV—OFFSETS 
SEC. 401. TRANSFER OF UNOBILGATED STIMULUS FUNDS. 
(a) RESCISSION.—Effective on the date of the enact-
ment of this Act, any unobligated balances available on 
such date of funds made available by division A of the 
American Recovery and Reinvestment Act of 2009 (Public 
Law 111–5), other than under the heading ‘‘Federal 
Highway Administration-Highway Infrastructure Invest-
ment’’ in title XII of such division, are rescinded and such 
provisions are repealed. 
(b) REPEAL.—The provisions of division B of the 
American Recovery and Reinvestment Act of 2009 (Public 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00180
Fmt 6652
Sfmt 6201
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS
181 
Law 111–5), other than titles I and II of such division 
are repealed. 
(c) TRANSFER OF FUNDS.—The total amount re-
scinded by this section shall be deposited in the Federal 
Treasury. 
Æ 
VerDate Nov 24 2008 
20:23 Nov 02, 2009
Jkt 089200
PO 00000
Frm 00181
Fmt 6652
Sfmt 6301
E:\BILLS\H3970.IH
H3970
sroberts on DSKD5P82C1PROD with BILLS