I 
111TH CONGRESS 
2D SESSION 
H. R. 4944 
To repeal the Patient Protection and Affordable Care Act and to replace 
such Act with incentives to encourage health insurance coverage, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 25, 2010 
Mr. WILSON of South Carolina introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce, and in addition to 
the Committees on the Budget, Oversight and Government Reform, Ways 
and Means, Education and Labor, the Judiciary, Natural Resources, 
Rules, House Administration, and Appropriations, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To repeal the Patient Protection and Affordable Care Act 
and to replace such Act with incentives to encourage 
health insurance coverage, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Siding with America’s Patients Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
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Sec. 1. Short title; table of contents. 
Sec. 2. Repeal of PPACA. 
TITLE I—TAX INCENTIVES FOR MAINTAINING HEALTH 
INSURANCE COVERAGE 
Sec. 101. Refundable tax credit for health insurance costs of low-income indi-
viduals. 
Sec. 102. Advance payment of credit as premium payment for qualified health 
insurance. 
Sec. 103. Election of tax credit instead of alternative government or group plan 
benefits. 
Sec. 104. Deduction for qualified health insurance costs of individuals. 
Sec. 105. Limitation on abortion funding. 
Sec. 106. Non-discrimination on abortion and respect for rights of conscience. 
Sec. 107. Equal employer contribution rule to promote choice. 
Sec. 108. Limitations on State restrictions on employer auto-enrollment. 
Sec. 109. Credit for small employers adopting auto-enrollment and defined con-
tribution options. 
Sec. 110. Require employers to disclose amounts paid for employer-provided 
health plan coverage. 
Sec. 111. HSA modifications and clarifications. 
TITLE II—HEALTH INSURANCE POOLING MECHANISMS FOR 
INDIVIDUALS 
Subtitle A—Safety Net for Individuals With Pre-Existing Conditions 
Sec. 201. Requiring operation of high-risk pool or other mechanism as condi-
tion for availability of tax credit. 
Subtitle B—Federal Block Grants for State Insurance Expenditures 
Sec. 211. Federal block grants for State insurance expenditures. 
Subtitle C—Health Care Access and Availability 
Sec. 221. Expansion of access and choice through individual membership asso-
ciations (IMAs). 
Subtitle D—Small Business Health Fairness 
Sec. 231. Short title. 
Sec. 232. Rules governing association health plans. 
Sec. 233. Clarification of treatment of single employer arrangements. 
Sec. 234. Enforcement provisions relating to association health plans. 
Sec. 235. Cooperation between Federal and State authorities. 
Sec. 236. Effective date and transitional and other rules. 
TITLE III—INTERSTATE MARKET FOR HEALTH INSURANCE 
Sec. 301. Cooperative governing of individual health insurance coverage. 
TITLE IV—SAFETY NET REFORMS 
Sec. 401. Requiring outreach and coverage before expansion of eligibility. 
Sec. 402. Easing administrative barriers to State cooperation with employer- 
sponsored insurance coverage. 
Sec. 403. Improving beneficiary choice in SCHIP. 
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Sec. 404. Liability protections for health center volunteer practitioners. 
Sec. 405. Liability protections for health center practitioners providing services 
in emergency areas. 
TITLE V—MEDICAL LIABILITY AND UNCOMPENSATED CARE 
REFORMS 
Sec. 501. Short title. 
Sec. 502. Findings and purpose. 
Sec. 503. Encouraging speedy resolution of claims. 
Sec. 504. Compensating patient injury. 
Sec. 505. Maximizing patient recovery. 
Sec. 506. Additional health benefits. 
Sec. 507. Punitive damages. 
Sec. 508. Authorization of payment of future damages to claimants in health 
care lawsuits. 
Sec. 509. Definitions. 
Sec. 510. Effect on other laws. 
Sec. 511. State flexibility and protection of states’ rights. 
Sec. 512. Applicability; effective date. 
Sec. 513. Sense of Congress. 
Sec. 514. State grants to create administrative health care tribunals. 
Sec. 515. Affirmative defense based on compliance with best practice guidelines. 
Sec. 516. Bad debt deduction for doctors to partially offset the cost of pro-
viding uncompensated care required to be provided under 
amendments made by the Emergency Medical Treatment and 
Labor Act. 
TITLE VI—WELLNESS AND PREVENTION 
Sec. 601. Providing financial incentives for treatment compliance. 
TITLE VII—TRANSPARENCY AND INSURANCE REFORM MEASURES 
Sec. 701. Receipt and response to requests for claim information. 
TITLE VIII—QUALITY 
Sec. 801. Prohibition on certain uses of data obtained from comparative effec-
tiveness research; accounting for personalized medicine and dif-
ferences in patient treatment response. 
Sec. 802. Establishment of performance-based quality measures. 
TITLE IX—STATE TRANSPARENCY PLAN PORTAL 
Sec. 901. Providing information on health coverage options and health care 
providers. 
TITLE X—PHYSICIAN PAYMENT REFORM 
Sec. 1001. Sustainable growth rate reform. 
TITLE XI—INCENTIVES TO REDUCE PHYSICIAN SHORTAGES 
Subtitle A—Federally Supported Student Loan Funds for Medical Students 
Sec. 1101. Federally Supported Student Loan Funds for Medical Students. 
Subtitle B—Loan Forgiveness for Primary Care Providers 
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Sec. 1111. Loan forgiveness for primary care providers. 
TITLE XII—OFFSETS 
Subtitle A—Enforcing Discretionary Spending Limits 
Sec. 1201. Enforcing discretionary spending limits. 
Subtitle B—Repeal of Unused Stimulus Funds 
Sec. 1211. Rescission and repeal in ARRA. 
Subtitle C—Savings From Health Care Efficiencies 
Sec. 1221. Medicare DSH report and payment adjustments in response to cov-
erage expansion. 
Sec. 1222. Reduction in Medicaid DSH. 
Subtitle D—Fraud, Waste, and Abuse 
Sec. 1231. Provide adequate funding to HHS OIG and HCFAC. 
Sec. 1232. Improved enforcement of the Medicare secondary payor provisions. 
Sec. 1233. Strengthen Medicare provider enrollment standards and safeguards. 
Sec. 1234. Tracking banned providers across State lines. 
Sec. 1235. Reinstate the Medicare trigger. 
SEC. 2. REPEAL OF PPACA. 
Effective as of the enactment of the Patient Protec-
tion and Affordable Care Act, such Act is repealed, and 
the provisions of law amended or repealed by such Act 
are restored or revived as if such Act had not been en-
acted. 
TITLE I—TAX INCENTIVES FOR 
MAINTAINING 
HEALTH 
IN-
SURANCE COVERAGE 
SEC. 101. REFUNDABLE TAX CREDIT FOR HEALTH INSUR-
ANCE COSTS OF LOW-INCOME INDIVIDUALS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by insert-
ing after section 36A the following new section: 
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‘‘(B) $500 for coverage of each dependent 
of the taxpayer. 
‘‘(3) CREDIT PERCENTAGE.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘credit percentage’ means 100 
percent reduced by 1 percentage point for each 
$1,000 (or fraction thereof) by which the tax-
payer’s adjusted gross income for the taxable 
year exceeds the threshold amount. 
‘‘(B) THRESHOLD AMOUNT.—For purposes 
of this paragraph, the term ‘threshold amount’ 
means, with respect to any taxpayer for any 
taxable year, 200 percent of the Federal pov-
erty guideline (as determined by the Secretary 
of Health and Human Service for the taxable 
year) applicable to the taxpayer. 
‘‘(4) ONLY
DEPENDENTS
TAKEN
INTO
AC-
COUNT.—Not more than 2 dependents of the tax-
payer may be taken into account under paragraphs 
(2)(C) and (3)(B). 
‘‘(5) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2009, each dollar amount contained in paragraph 
(2) shall be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
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‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2008’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$50. 
‘‘(c) ELIGIBLE COVERAGE MONTH.—For purposes of 
this section, the term ‘eligible coverage month’ means, 
with respect to any individual, any month if, as of the first 
day of such month, the individual— 
‘‘(1) is covered by qualified health insurance, 
‘‘(2) does not have other specified coverage, and 
‘‘(3) is not imprisoned under Federal, State, or 
local authority. 
‘‘(d) QUALIFYING FAMILY MEMBER.—For purposes 
of this section, the term ‘qualifying family member’ 
means— 
‘‘(1) in the case of a joint return, the taxpayer’s 
spouse, and 
‘‘(2) any dependent of the taxpayer. 
‘‘(e) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section, the term ‘qualified health insurance’ 
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means health insurance coverage (other than excepted 
benefits as defined in section 9832(c)) which constitutes 
medical care. 
‘‘(f) OTHER SPECIFIED COVERAGE.—For purposes of 
this section, an individual has other specified coverage for 
any month if, as of the first day of such month— 
‘‘(1) COVERAGE UNDER MEDICARE, MEDICAID, 
OR SCHIP.—Such individual— 
‘‘(A) is entitled to benefits under part A of 
title XVIII of the Social Security Act or is en-
rolled under part B of such title, or 
‘‘(B) is enrolled in the program under title 
XIX or XXI of such Act (other than under sec-
tion 1928 of such Act). 
‘‘(2) CERTAIN OTHER COVERAGE.—Such indi-
vidual— 
‘‘(A) is enrolled in a health benefits plan 
under chapter 89 of title 5, United States Code, 
‘‘(B) is entitled to receive benefits under 
chapter 55 of title 10, United States Code, 
‘‘(C) in entitled to receive benefits under 
chapter 17 of title 38, United States Code, or 
‘‘(D) is enrolled in a group health plan 
(within the meaning of section 5000(b)(1)) 
which is subsidized by the employer. 
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‘‘(g) SPECIAL RULES.— 
‘‘(1) COORDINATION WITH ADVANCE PAYMENTS 
OF CREDIT; RECAPTURE OF EXCESS ADVANCE PAY-
MENTS.—With respect to any taxable year— 
‘‘(A) the amount which would (but for this 
subsection) be allowed as a credit to the tax-
payer under subsection (a) shall be reduced 
(but not below zero) by the aggregate amount 
paid on behalf of such taxpayer under section 
7529 for months beginning in such taxable 
year, and 
‘‘(B) the tax imposed by section 1 for such 
taxable year shall be increased by the excess (if 
any) of— 
‘‘(i) the aggregate amount paid on be-
half of such taxpayer under section 7529 
for months beginning in such taxable year, 
over 
‘‘(ii) the amount which would (but for 
this subsection) be allowed as a credit to 
the taxpayer under subsection (a). 
‘‘(2) COORDINATION
WITH
OTHER
DEDUC-
TIONS.—Amounts taken into account under sub-
section (a) shall not be taken into account in deter-
mining— 
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‘‘(A) any deduction allowed under section 
162(l), 213, or 224, or 
‘‘(B) any credit allowed under section 35. 
‘‘(3) MEDICAL
AND
HEALTH
SAVINGS
AC-
COUNTS.—Amounts distributed from an Archer 
MSA (as defined in section 220(d)) or from a health 
savings account (as defined in section 223(d)) shall 
not be taken into account under subsection (a). 
‘‘(4) DENIAL OF CREDIT TO DEPENDENTS AND 
NONPERMANENT RESIDENT ALIEN INDIVIDUALS.— 
No credit shall be allowed under this section to any 
individual who is— 
‘‘(A) not a citizen or lawful permanent 
resident of the United States for the calendar 
year in which the taxable year begins, or 
‘‘(B) a dependent with respect to another 
taxpayer for a taxable year beginning in the 
calendar year in which such individual’s taxable 
year begins. 
‘‘(5) INSURANCE WHICH COVERS OTHER INDI-
VIDUALS.—For purposes of this section, rules simi-
lar to the rules of section 213(d)(6) shall apply with 
respect to any contract for qualified health insurance 
under which amounts are payable for coverage of an 
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individual other than the taxpayer and qualifying 
family members. 
‘‘(6) TREATMENT
OF
PAYMENTS.—For pur-
poses of this section— 
‘‘(A) PAYMENTS
BY
SECRETARY.—Pay-
ments made by the Secretary on behalf of any 
individual under section 7529 (relating to ad-
vance payment of credit for health insurance 
costs of low-income individuals) shall be treated 
as having been made by the taxpayer on the 
first day of the month for which such payment 
was made. 
‘‘(B) PAYMENTS
BY
TAXPAYER.—Pay-
ments made by the taxpayer for eligible cov-
erage months shall be treated as having been 
made by the taxpayer on the first day of the 
month for which such payment was made. 
‘‘(7) REGULATIONS.—The Secretary may pre-
scribe such regulations and other guidance as may 
be necessary or appropriate to carry out this section, 
section 6050W, and section 7529.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting 
‘‘36B,’’ after ‘‘36A,’’. 
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(2) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by inserting after the 
item relating to section 36A the following new item: 
‘‘Sec. 36B. Health insurance costs of low-income individuals.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
(d) SENSE OF CONGRESS.—It is the sense of Con-
gress that the cost of the advanceable refundable credit 
under sections 36B and 7529 of the Internal Revenue 
Code of 1986, as added by this title, will be offset by sav-
ings derived from the provisions of title XII. 
SEC. 102. ADVANCE PAYMENT OF CREDIT AS PREMIUM 
PAYMENT FOR QUALIFIED HEALTH INSUR-
ANCE. 
(a) IN GENERAL.—Chapter 77 of the Internal Rev-
enue Code of 1986 (relating to miscellaneous provisions) 
is amended by adding at the end the following: 
‘‘SEC. 7529. ADVANCE PAYMENT OF CREDIT AS PREMIUM 
PAYMENT FOR QUALIFIED HEALTH INSUR-
ANCE. 
‘‘(a) GENERAL RULE.—Not later than January 1, 
2010, the Secretary shall establish a program for making 
payments to providers of qualified health insurance (as de-
fined in section 36B(e)) on behalf of taxpayers eligible for 
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the credit under section 36B. Except as otherwise pro-
vided by the Secretary, such payments shall be made on 
the basis of the adjusted gross income of the taxpayer for 
the preceding taxable year. 
‘‘(b) CERTIFICATION PROCESS AND PROOF OF COV-
ERAGE.—For purposes of this section, payments may be 
made pursuant to subsection (a) only with respect to indi-
viduals for whom a qualified health insurance costs credit 
eligibility certificate is in effect.’’. 
(b) DISCLOSURE
OF RETURN INFORMATION
FOR 
PURPOSES OF ADVANCE PAYMENT OF CREDIT AS PRE-
MIUMS FOR QUALIFIED HEALTH INSURANCE.— 
(1) IN
GENERAL.—Subsection (l) of section 
6103 of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(21) DISCLOSURE OF RETURN INFORMATION 
FOR PURPOSES OF ADVANCE PAYMENT OF CREDIT 
AS
PREMIUMS
FOR
QUALIFIED
HEALTH
INSUR-
ANCE.—The Secretary may, on behalf of taxpayers 
eligible for the credit under section 36B, disclose to 
a provider of qualified health insurance (as defined 
in section 36(e)), and persons acting on behalf of 
such provider, return information with respect to 
any such taxpayer only to the extent necessary (as 
prescribed by regulations issued by the Secretary) to 
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carry out the program established by section 7529 
(relating to advance payment of credit as premium 
payment for qualified health insurance).’’. 
(2) CONFIDENTIALITY
OF
INFORMATION.— 
Paragraph (3) of section 6103(a) of such Code is 
amended by striking ‘‘or (20)’’ and inserting ‘‘(20), 
or (21)’’. 
(3) UNAUTHORIZED
DISCLOSURE.—Paragraph 
(2) of section 7213(a) of such Code is amended by 
striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 
(c) INFORMATION REPORTING.— 
(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 of such Code (relating 
to information concerning transactions with other 
persons) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 6050X. RETURNS RELATING TO CREDIT FOR HEALTH 
INSURANCE COSTS OF LOW-INCOME INDIVID-
UALS. 
‘‘(a) REQUIREMENT OF REPORTING.—Every person 
who is entitled to receive payments for any month of any 
calendar year under section 7529 (relating to advance pay-
ment of credit as premium payment for qualified health 
insurance) with respect to any individual shall, at such 
time as the Secretary may prescribe, make the return de-
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scribed in subsection (b) with respect to each such indi-
vidual. 
‘‘(b) FORM AND MANNER OF RETURNS.—A return 
is described in this subsection if such return— 
‘‘(1) is in such form as the Secretary may pre-
scribe, and 
‘‘(2) contains— 
‘‘(A) the name, address, and TIN of each 
individual referred to in subsection (a), 
‘‘(B) the number of months for which 
amounts were entitled to be received with re-
spect to such individual under section 7529 (re-
lating to advance payment of credit as premium 
payment for qualified health insurance), 
‘‘(C) the amount entitled to be received for 
each such month, and 
‘‘(D) such other information as the Sec-
retary may prescribe. 
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
QUIRED.—Every person required to make a return under 
subsection (a) shall furnish to each individual whose name 
is required to be set forth in such return a written state-
ment showing— 
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‘‘(1) the name and address of the person re-
quired to make such return and the phone number 
of the information contact for such person, and 
‘‘(2) the information required to be shown on 
the return with respect to such individual. 
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the 
year following the calendar year for which the return 
under subsection (a) is required to be made.’’. 
(2) ASSESSABLE PENALTIES.— 
(A) 
Subparagraph 
(B) 
of 
section 
6724(d)(1) of such Code (relating to defini-
tions) is amended by striking ‘‘or’’ at the end 
of clause (xxii), by striking ‘‘and’’ at the end of 
clause (xxiii) and inserting ‘‘or’’, and by insert-
ing after clause (xxiii) the following new clause: 
‘‘(xxiv) section 6050X (relating to re-
turns relating to credit for health insur-
ance costs of low-income individuals), 
and’’. 
(B) Paragraph (2) of section 6724(d) of 
such Code is amended by striking ‘‘or’’ at the 
end of subparagraph (EE), by striking the pe-
riod at the end of subparagraph (FF) and in-
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serting ‘‘, or’’, and by adding after subpara-
graph (FF) the following new subparagraph: 
‘‘(GG) section 6050X (relating to returns 
relating to credit for health insurance costs of 
low-income individuals).’’. 
(d) CLERICAL AMENDMENTS.— 
(1) The table of sections for chapter 77 of such 
Code is amended by adding at the end the following 
new item: 
‘‘Sec. 7529. Advance payment of credit as premium payment for qualified 
health insurance.’’. 
(2) The table of sections for subpart B of part 
III of subchapter A of chapter 61 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 6050X. Returns relating to credit for health insurance costs of low-in-
come individuals.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 103. ELECTION OF TAX CREDIT INSTEAD OF ALTER-
NATIVE GOVERNMENT OR GROUP PLAN BEN-
EFITS. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, an individual who is otherwise eligible for ben-
efits under a health program (as defined in subsection (c)) 
may elect, in a form and manner specified by the Sec-
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retary of Health and Human Services in consultation with 
the Secretary of the Treasury, to receive a tax credit de-
scribed in section 36B of the Internal Revenue Code of 
1986 (which may be used for the purpose of health insur-
ance coverage) in lieu of receiving any benefits under such 
program. 
(b) EFFECTIVE DATE.—An election under subsection 
(a) may first be made for calendar year 2010 and any 
such election shall be effective for such period (not less 
than one calendar year) as the Secretary of Health and 
Human Services shall specify, in consultation with the 
Secretary of the Treasury. 
(c) HEALTH PROGRAM DEFINED.—For purposes of 
this section, the term ‘‘health program’’ means any of the 
following: 
(1) MEDICARE.—The medicare program under 
part A of title XVIII of the Social Security Act. 
(2) MEDICAID.—The Medicaid program under 
title XIX of such Act (including such a program op-
erating under a Statewide waiver under section 1115 
of such Act). 
(3) SCHIP.—The State children’s health insur-
ance program under title XXI of such Act. 
(4) 
TRICARE.—The 
TRICARE 
program 
under chapter 55 of title 10, United States Code. 
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(5) VETERANS BENEFITS.—Coverage for bene-
fits under chapter 17 of title 38, United States 
Code. 
(6) FEHBP.—Coverage under chapter 89 of 
title 5, United States Code. 
(7) SUBSIDIZED GROUP HEALTH PLANS.—Cov-
erage under a group health plan (within the meaning 
of section 5000(b)(1)) which is subsidized by the 
employer. 
(d) OTHER
SOCIAL
SECURITY
BENEFITS
NOT 
WAIVED.—An election to waive the benefits described in 
subsection (c)(1) shall not result in the waiver of any other 
benefits under the Social Security Act. 
SEC. 104. DEDUCTION FOR QUALIFIED HEALTH INSURANCE 
COSTS OF INDIVIDUALS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions) is amended by redesig-
nating section 224 as section 225 and by inserting after 
section 223 the following new section: 
‘‘SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a deduction an amount equal to 
the amount paid during the taxable year for coverage for 
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the taxpayer, his spouse, and dependents under qualified 
health insurance. 
‘‘(b) LIMITATION.—In the case of any taxpayer for 
any taxable year, the deduction under subsection (a) shall 
not exceed an amount that would cause the taxpayer’s 
Federal income tax liability to be reduced by more than 
the average value of the national health exclusion for em-
ployer sponsored insurance as determined by calculating 
the value of the exclusion for each household followed by 
calculating the average of those values. 
‘‘(c) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section, the term ‘qualified health insurance’ 
has the meaning given such term by section 36B(e). 
‘‘(d) SPECIAL RULES.— 
‘‘(1) COORDINATION
WITH
MEDICAL
DEDUC-
TION, ETC.—Any amount paid by a taxpayer for in-
surance to which subsection (a) applies shall not be 
taken into account in computing the amount allow-
able to the taxpayer as a deduction under section 
162(l) or 213(a). Any amount taken into account in 
determining the credit allowed under section 35 or 
36B shall not be taken into account for purposes of 
this section. 
‘‘(2) DEDUCTION NOT ALLOWED FOR SELF-EM-
PLOYMENT
TAX
PURPOSES.—The deduction allow-
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able by reason of this section shall not be taken into 
account in determining an individual’s net earnings 
from self-employment (within the meaning of section 
1402(a)) for purposes of chapter 2.’’. 
(b) DEDUCTION
ALLOWED
IN
COMPUTING
AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of 
such Code is amended by inserting before the last sentence 
the following new paragraph: 
‘‘(22) COSTS
OF
QUALIFIED
HEALTH
INSUR-
ANCE.—The deduction allowed by section 224.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by redesignating the item relating to section 
224 as an item relating to section 225 and inserting before 
such item the following new item: 
‘‘Sec. 224. Costs of qualified health insurance.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
SEC. 105. LIMITATION ON ABORTION FUNDING. 
No funds authorized under this Act (or any amend-
ment made by this Act) may be used to pay for any abor-
tion or to cover any part of the costs of any health plan 
that includes coverage of abortion, except in the case 
where a woman suffers from a physical disorder, physical 
injury, or physical illness that would, as certified by a phy-
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sician, place the woman in danger of death unless an abor-
tion is performed, including a life-endangering physical 
condition caused by or arising from the pregnancy itself, 
or unless the pregnancy is the result of an act of forcible 
rape or incest. 
SEC. 106. NON-DISCRIMINATION ON ABORTION AND RE-
SPECT FOR RIGHTS OF CONSCIENCE. 
(a) NON-DISCRIMINATION.—A Federal agency or 
program, and any State or local government that receives 
Federal financial assistance, may not subject any indi-
vidual or institutional health care entity to discrimination 
on the basis that the health care entity does not provide, 
pay for, provide coverage of, or refer for abortions. 
(b) DEFINITION.—In this section, the term ‘‘health 
care entity’’ includes an individual physician or other 
health care professional, a hospital, a provider-sponsored 
organization, a health maintenance organization, a health 
insurance plan, or any other kind of health care facility, 
organization, or plan. 
(c) ADMINISTRATION.—The Office for Civil Rights of 
the Department of Health and Human Services is des-
ignated to receive complaints of discrimination based on 
this section, and coordinate the investigation of such com-
plaints. 
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(d) CONSCIENTIOUS OBJECTION.—Nothing in this 
Act shall be construed as forbidding a health plan or 
health insurance issuer to accommodate the conscientious 
objection of a purchaser or an individual or institutional 
health care provider when a procedure is contrary to the 
religious beliefs or moral convictions of such purchaser or 
provider. 
SEC. 107. EQUAL EMPLOYER CONTRIBUTION RULE TO PRO-
MOTE CHOICE. 
(a) EXCISE TAX FOR FAILURE TO PROVIDE CON-
TRIBUTION ELECTION.—Section 5000 of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subsection: 
‘‘(e) HEALTH CARE CONTRIBUTION ELECTION.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply in the case of a group health plan with respect 
to which the requirements of paragraphs (2) and (3) 
are met. 
‘‘(2) CONTRIBUTION ELECTION.—The require-
ment of this paragraph is met with respect to a 
group health plan if any employee of an employer 
(who but for this paragraph would be covered by 
such plan) may elect to have the employer or em-
ployee organization pay an amount which is not less 
than the contribution amount to any provider of in-
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surance (other than excepted benefits as defined in 
section 9832(c)(1)) which constitutes medical care of 
the individual or individual’s spouse or dependents 
in lieu of such group health plan coverage otherwise 
provided or contributed to by the employer with re-
spect to such employee. 
‘‘(3) PRE-EXISTING CONDITIONS.— 
‘‘(A) IN
GENERAL.—The requirement of 
this paragraph is met with respect to health in-
surance coverage provided to a participant or 
beneficiary by any health insurance issuer if, 
under such plan the requirements of section 
9801 are met with respect to the participant or 
beneficiary. 
‘‘(B) ENFORCEMENT
WITH
RESPECT
TO 
INDIVIDUAL ELECTION.—For purposes of sub-
paragraph (A), any health insurance coverage 
with respect to the participant or beneficiary 
shall be treated as health insurance coverage 
under a group health plan to which section 
9801 applies. 
‘‘(4) CONTRIBUTION
AMOUNT.—For purposes 
of this section, the term ‘contribution amount’ 
means, with respect to an individual under a group 
health plan, the portion of the applicable premium of 
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such individual under such plan (as determined 
under section 4980B(f)(4)) which is not paid by the 
individual. In the case that the employer offers more 
than one group health plan, the contribution amount 
shall be the average amount of the applicable pre-
miums under such plans. 
‘‘(5) GROUP HEALTH PLAN.—For purpose of 
this subsection, subsection (d) shall not apply. 
‘‘(6) 
APPLICATION
TO
FEHBP.—Notwith-
standing any other provision of law, the Office of 
Personnel Management shall carry out the health 
benefits program under chapter 89 of title 5, United 
States Code, consistent with the requirements of this 
subsection.’’. 
(b) REQUIREMENT OF EQUAL CONTRIBUTIONS TO 
ALL FEHBP PLANS.—Section 8906 of title 5, United 
States Code, is amended by adding at the end the fol-
lowing new subsection: 
‘‘(j) Notwithstanding the previous provisions of this 
section the Office of Personnel Management shall revise 
the amount of the Government contribution made under 
this section in a manner so that— 
‘‘(1) the amount of such contribution does not 
change based on the health benefits plan in which 
the individual is enrolled; and 
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‘‘(2) the aggregate amount of such contribu-
tions is estimated to be equal to the aggregate 
amount of such contributions if this subsection did 
not apply.’’. 
(c) ERISA CONFORMING AMENDMENTS.— 
(1) EXCEPTION
FROM
HIPAA
REQUIREMENTS 
FOR
BENEFITS
PROVIDED
UNDER
HEALTH
CARE 
CONTRIBUTION ELECTION.—Section 732 of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1191a) is amended by adding at the end the 
following new subsection: 
‘‘(e) HEALTH CARE CONTRIBUTION ELECTION.— 
‘‘(1) IN GENERAL.—The requirements of this 
part shall not apply in the case of health insurance 
coverage (other than excepted benefits as defined in 
section 9832(c)(1) of the Internal Revenue Code of 
1986)— 
‘‘(A) which is provided to a participant or 
beneficiary by a health insurance issuer under 
a group health plan, and 
‘‘(B) with respect to which the require-
ments of paragraphs (2) and (3) are met. 
‘‘(2) CONTRIBUTION ELECTION.—The require-
ment of this paragraph is met with respect to health 
insurance coverage provided to a participant or ben-
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eficiary by any health insurance issuer under a 
group health plan if, under such plan— 
‘‘(A) the participant may elect such cov-
erage for any period of coverage in lieu of 
health insurance coverage otherwise provided 
under such plan for such period, and 
‘‘(B) in the case of such an election, the 
plan sponsor is required to pay to such issuer 
for the elected coverage for such period an 
amount which is not less than the contribution 
amount for such health insurance coverage oth-
erwise provided under such plan for such pe-
riod. 
‘‘(3) PRE-EXISTING CONDITIONS.— 
‘‘(A) IN
GENERAL.—The requirement of 
this paragraph is met with respect to health in-
surance coverage provided to a participant or 
beneficiary by any health insurance issuer if, 
under such plan the requirements of section 
701 are met with respect to the participant or 
beneficiary. 
‘‘(B) ENFORCEMENT
WITH
RESPECT
TO 
INDIVIDUAL ELECTION.—For purposes of sub-
paragraph (A), any health insurance coverage 
with respect to the participant or beneficiary 
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shall be treated as health insurance coverage 
under a group health plan to which section 701 
applies. 
‘‘(4) CONTRIBUTION AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘contribution amount’ means, 
with respect to any period of health insurance 
coverage offered to a participant or beneficiary, 
the portion of the applicable premium of such 
participant or beneficiary under such plan 
which is not paid by such participant or bene-
ficiary. In the case that the employer offers 
more than one group health plan, the contribu-
tion amount shall be the average amount of the 
applicable premiums under such plans. 
‘‘(B) APPLICABLE
PREMIUM.—For pur-
poses of subparagraph (A), the term ‘applicable 
premium’ means, with respect to any period of 
health insurance coverage of a participant or 
beneficiary under a group health plan, the cost 
to the plan for such period of such coverage for 
similarly situated beneficiaries (without regard 
to whether such cost is paid by the plan spon-
sor or the participant or beneficiary).’’. 
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(2) EXEMPTION FROM FIDUCIARY LIABILITY.— 
Section 404 of such Act (29 U.S.C. 1104) is amend-
ed by adding at the end the following new sub-
section: 
‘‘(e) The plan sponsor of a group health plan (as de-
fined in section 733(a)) shall not be treated as breaching 
any of the responsibilities, obligations, or duties imposed 
upon fiduciaries by this title in the case of any individual 
who is a participant or beneficiary under such plan solely 
because of the extent to which the plan sponsor provides, 
in the case of such individual, some or all of such benefits 
by means of payment of contribution amounts pursuant 
to a contribution election under section 732(e), irrespec-
tive of the amount or type of benefits that would otherwise 
be provided to such individual under such plan.’’. 
(d) EXCEPTION
FROM
HIPAA REQUIREMENTS 
UNDER IRC FOR BENEFITS PROVIDED UNDER HEALTH 
CARE CONTRIBUTION ELECTION.—Section 9831 of the 
Internal Revenue Code of 1986 (relating to general excep-
tions) is amended by adding at the end the following new 
subsection: 
‘‘(d) HEALTH CARE CONTRIBUTION ELECTION.— 
‘‘(1) IN GENERAL.—The requirements of this 
chapter shall not apply in the case of health insur-
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ance coverage (other than excepted benefits as de-
fined in section 9832(c)(1))— 
‘‘(A) which is provided to a participant or 
beneficiary by a health insurance issuer under 
a group health plan, and 
‘‘(B) with respect to which the require-
ments of paragraphs (2) and (3) are met. 
‘‘(2) CONTRIBUTION ELECTION.—The require-
ment of this paragraph is met with respect to health 
insurance coverage provided to a participant or ben-
eficiary by any health insurance issuer under a 
group health plan if, under such plan— 
‘‘(A) the participant may elect such cov-
erage for any period of coverage in lieu of 
health insurance coverage otherwise provided 
under such plan for such period, and 
‘‘(B) in the case of such an election, the 
plan sponsor is required to pay to such issuer 
for the elected coverage for such period an 
amount which is not less than the contribution 
amount for such health insurance coverage oth-
erwise provided under such plan for such pe-
riod. 
‘‘(3) PRE-EXISTING CONDITIONS.— 
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‘‘(A) IN
GENERAL.—The requirement of 
this paragraph is met with respect to health in-
surance coverage provided to a participant or 
beneficiary by any health insurance issuer if, 
under such plan the requirements of section 
9801 are met with respect to the participant or 
beneficiary. 
‘‘(B) ENFORCEMENT
WITH
RESPECT
TO 
INDIVIDUAL ELECTION.—For purposes of sub-
paragraph (A), any health insurance coverage 
with respect to the participant or beneficiary 
shall be treated as health insurance coverage 
under a group health plan to which section 
9801 applies. 
‘‘(4) CONTRIBUTION AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘contribution amount’ 
means, with respect to any period of health in-
surance coverage offered to a participant or 
beneficiary, the portion of the applicable pre-
mium of such participant or beneficiary under 
such plan which is not paid by such participant 
or beneficiary. In the case that the employer of-
fers more than one group health plan, the con-
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tribution amount shall be the average amount 
of the applicable premiums under such plans. 
‘‘(B) APPLICABLE
PREMIUM.—For pur-
poses of subparagraph (A), the term ‘applicable 
premium’ means, with respect to any period of 
health insurance coverage of a participant or 
beneficiary under a group health plan, the cost 
to the plan for such period of such coverage for 
similarly situated beneficiaries (without regard 
to whether such cost is paid by the plan spon-
sor or the participant or beneficiary).’’. 
(e) EXCEPTION
FROM
HIPAA REQUIREMENTS 
UNDER THE PHSA FOR BENEFITS PROVIDED UNDER 
HEALTH CARE CONTRIBUTION ELECTION.—Section 2721 
of the Public Health Service Act (42 U.S.C. 300gg–21) 
is amended— 
(1) by redesignating subsection (e) as sub-
section (f); and 
(2) by inserting after subsection (d) the fol-
lowing new subsection: 
‘‘(e) HEALTH CARE CONTRIBUTION ELECTION.— 
‘‘(1) IN GENERAL.—The requirements of this 
subparts 1 through 3 shall not apply in the case of 
health insurance coverage (other than excepted bene-
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fits as defined in section 9832(c)(1) of the Internal 
Revenue Code of 1986)— 
‘‘(A) which is provided to a participant or 
beneficiary by a health insurance issuer under 
a group health plan, and 
‘‘(B) with respect to which the require-
ments of paragraphs (2) and (3) are met. 
‘‘(2) CONTRIBUTION ELECTION.—The require-
ment of this paragraph is met with respect to health 
insurance coverage provided to a participant or ben-
eficiary by any health insurance issuer under a 
group health plan if, under such plan— 
‘‘(A) the participant may elect such cov-
erage for any period of coverage in lieu of 
health insurance coverage otherwise provided 
under such plan for such period, and 
‘‘(B) in the case of such an election, the 
plan sponsor is required to pay to such issuer 
for the elected coverage for such period an 
amount which is not less than the contribution 
amount for such health insurance coverage oth-
erwise provided under such plan for such pe-
riod. 
‘‘(3) PRE-EXISTING CONDITIONS.— 
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‘‘(A) IN
GENERAL.—The requirement of 
this paragraph is met with respect to health in-
surance coverage provided to a participant or 
beneficiary by any health insurance issuer if, 
under such plan the requirements of section 
2701 are met with respect to the participant or 
beneficiary. 
‘‘(B) ENFORCEMENT
WITH
RESPECT
TO 
INDIVIDUAL ELECTION.—For purposes of sub-
paragraph (A), any health insurance coverage 
with respect to the participant or beneficiary 
shall be treated as health insurance coverage 
under a group health plan to which section 
2701 applies. 
‘‘(4) CONTRIBUTION AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘contribution amount’ means, 
with respect to any period of health insurance 
coverage offered to a participant or beneficiary, 
the portion of the applicable premium of such 
participant or beneficiary under such plan 
which is not paid by such participant or bene-
ficiary. In the case that the employer offers 
more than one group health plan, the contribu-
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tion amount shall be the average amount of the 
applicable premiums under such plans. 
‘‘(B) APPLICABLE
PREMIUM.—For pur-
poses of subparagraph (A), the term ‘applicable 
premium’ means, with respect to any period of 
health insurance coverage of a participant or 
beneficiary under a group health plan, the cost 
to the plan for such period of such coverage for 
similarly situated beneficiaries (without regard 
to whether such cost is paid by the plan spon-
sor or the participant or beneficiary).’’. 
SEC. 108. LIMITATIONS ON STATE RESTRICTIONS ON EM-
PLOYER AUTO-ENROLLMENT. 
(a) IN GENERAL.—No State shall establish a law 
that prevents an employer from instituting auto-enroll-
ment which meets the requirements of subsection (b) for 
coverage of a participant or beneficiary under a group 
health plan, or health insurance coverage offered in con-
nection with such a plan, so long as the participant or 
beneficiary has the option of declining such coverage. 
(b) AUTOMATIC
ENROLLMENT
FOR
EMPLOYER 
SPONSORED HEALTH BENEFITS.— 
(1) IN GENERAL.—The requirement of this sub-
section with respect to an employer and an employee 
is that the employer automatically enroll such em-
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ployee into the employment-based health benefits 
plan for individual coverage under the plan option 
with the lowest applicable employee premium. 
(2) OPT-OUT.—In no case may an employer 
automatically enroll an employee in a plan under 
paragraph (1) if such employee makes an affirmative 
election to opt-out of such plan or to elect coverage 
under an employment-based health benefits plan of-
fered by such employer. An employer shall provide 
an employee with a 30-day period to make such an 
affirmative election before the employer may auto-
matically enroll the employee in such a plan. 
(3) NOTICE REQUIREMENTS.— 
(A) IN
GENERAL.—Each employer de-
scribed in paragraph (1) who automatically en-
rolls an employee into a plan as described in 
such paragraph shall provide the employees, 
within a reasonable period before the beginning 
of each plan year (or, in the case of new em-
ployees, within a reasonable period before the 
end of the enrollment period for such a new em-
ployee), written notice of the employees’ rights 
and obligations relating to the automatic enroll-
ment requirement under such paragraph. Such 
notice must be comprehensive and understood 
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by the average employee to whom the automatic 
enrollment requirement applies. 
(B) INCLUSION
OF
SPECIFIC
INFORMA-
TION.—The written notice under subparagraph 
(A) must explain an employee’s right to opt out 
of being automatically enrolled in a plan and in 
the case that more than one level of benefits or 
employee premium level is offered by the em-
ployer involved, the notice must explain which 
level of benefits and employee premium level the 
employee will be automatically enrolled in the 
absence of an affirmative election by the em-
ployee. 
(c) CONSTRUCTION.—Nothing in this section shall be 
construed to supersede State law which establishes, imple-
ments, or continues in effect any standard or requirement 
relating to employers in connection with payroll or the 
sponsoring of employer sponsored health insurance cov-
erage except to the extent that such standard or require-
ment prevents an employer from instituting the auto-en-
rollment described in subsection (a). 
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SEC. 109. CREDIT FOR SMALL EMPLOYERS ADOPTING 
AUTO-ENROLLMENT 
AND 
DEFINED 
CON-
TRIBUTION OPTIONS. 
(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 new section: 
‘‘SEC. 45R. AUTO-ENROLLMENT AND DEFINED CONTRIBU-
TION OPTION FOR HEALTH BENEFITS PLANS 
OF SMALL EMPLOYERS. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of a small employer, the health benefits plan im-
plementation credit determined under this section for the 
taxable year is an amount equal to 100 percent of the 
amount paid or incurred by the taxpayer during the tax-
able year for qualified health benefits expenses. 
‘‘(b) LIMITATION.—The credit determined under sub-
section (a) with respect to any taxpayer for any taxable 
year shall not exceed the excess of— 
‘‘(1) $1,500, over 
‘‘(2) sum of the credits determined under sub-
section (a) with respect to such taxpayer for all pre-
ceding taxable years. 
‘‘(c) QUALIFIED HEALTH BENEFITS EXPENSES.— 
For purposes of this section, the term ‘qualified health 
benefits auto-enrollment expenses’ means, with respect to 
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any taxable year, amounts paid or incurred by the tax-
payer during such taxable year for— 
‘‘(1) establishing auto-enrollment which meets 
the requirements of section 107 of the Siding with 
America’s Patients Act for coverage of a participant 
or beneficiary under a group health plan, or health 
insurance coverage offered in connection with such a 
plan, and 
‘‘(2) implementing the employer contribution 
option for health insurance coverage pursuant to 
section 5000(e)(2). 
‘‘(d) QUALIFIED SMALL EMPLOYER.—For purposes 
of this section, the term ‘qualified small employer’ means 
any employer for any taxable year if the number of em-
ployees employed by such employer during such taxable 
year does not exceed 50. All employers treated as a single 
employer under section (a) or (b) of section 52 shall be 
treated as a single employer for purposes of this section. 
‘‘(e) NO DOUBLE BENEFIT.—No deduction or credit 
shall be allowed under any other provision of this chapter 
with respect to the amount of the credit determined under 
this section. 
‘‘(f) TERMINATION.—Subsection (a) shall not apply 
to any taxable year beginning after the date which is 2 
years after the date of the enactment of this section.’’. 
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(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code (re-
lating to general business credit) is amended by striking 
‘‘plus’’ at the end of paragraph (34), by striking the period 
at the end of paragraph (35) and inserting ‘‘, plus’’ , and 
by adding at the end the following new paragraph: 
‘‘(36) in the case of a small employer (as de-
fined in section 45R(d)), the health benefits plan im-
plementation 
credit 
determined 
under 
section 
45R(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 45Q the following new item: 
‘‘Sec. 45R. Auto-enrollment and defined contribution option for health benefits 
plans of small employers.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 110. REQUIRE EMPLOYERS TO DISCLOSE AMOUNTS 
PAID 
FOR 
EMPLOYER-PROVIDED 
HEALTH 
PLAN COVERAGE. 
(a) IN GENERAL.—Subsection (a) of section 6051 is 
amended by striking ‘‘and’’ at the end of paragraph (12), 
by striking the period at the end of paragraph (13) and 
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inserting ‘‘, and’’, and by inserting after paragraph (13) 
the following new paragraph: 
‘‘(14) the total amount paid or incurred by the 
employer with respect to employer-provided coverage 
under an accident or health plan with respect to 
such employee.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in cal-
endar years beginning after the date of the enactment of 
this Act. 
SEC. 111. HSA MODIFICATIONS AND CLARIFICATIONS. 
(a) CLARIFICATION OF TREATMENT OF CAPITATED 
PRIMARY CARE PAYMENTS AS AMOUNTS PAID FOR MED-
ICAL CARE.—Section 213(d) of the Internal Revenue Code 
of 1986 (relating to definitions) is amended by adding at 
the end the following new paragraph: 
‘‘(12) TREATMENT
OF
CAPITATED
PRIMARY 
CARE PAYMENTS.—Capitated primary care payments 
shall be treated as amounts paid for medical care.’’. 
(b) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR 
VETERANS
OR
INDIAN
HEALTH
BENEFITS.—Section 
223(c)(1) of such Code (defining eligible individual) is 
amended by adding at the end the following new subpara-
graph: 
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‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI-
GIBLE FOR VETERANS OR INDIAN HEALTH BEN-
EFITS.—For purposes of subparagraph (A)(ii), 
an individual shall not be treated as covered 
under a health plan described in such subpara-
graph merely because the individual receives 
periodic hospital care or medical services under 
any law administered by the Secretary of Vet-
erans Affairs or the Bureau of Indian Affairs.’’. 
(c) CERTAIN PHYSICIAN FEES TO BE TREATED AS 
MEDICAL CARE.—Section 213(d) of such Code is amend-
ed by adding at the end the following new paragraph: 
‘‘(12) PRE-PAID PHYSICIAN FEES.—The term 
‘medical care’ shall include amounts paid by patients 
to their primary physician in advance for the right 
to receive medical services on an as-needed basis.’’. 
(d) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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TITLE II—HEALTH INSURANCE 
POOLING MECHANISMS FOR 
INDIVIDUALS 
Subtitle A—Safety Net for Individ-
uals With Pre-Existing Condi-
tions 
SEC. 201. REQUIRING OPERATION OF HIGH-RISK POOL OR 
OTHER 
MECHANISM 
AS 
CONDITION 
FOR 
AVAILABILITY OF TAX CREDIT. 
No credit shall be allowed under section 36B of the 
Internal Revenue Code of 1986 (relating to health insur-
ance costs of low-income individuals) to the residents of 
any State unless such State meets the following require-
ments: 
(1) The State must implement a high-risk pool 
or a reinsurance pool or other risk-adjustment mech-
anism (as defined in section 211). 
(2) Assessments levied by the State for pur-
poses of funding such a pool or mechanism must 
only be used for funding and administering such 
pool or mechanism. 
(3) Such pool or mechanism must incorporate 
the application of such tax credit into such pool or 
mechanism. 
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Subtitle B—Federal Block Grants 
for State Insurance Expenditures 
SEC. 211. FEDERAL BLOCK GRANTS FOR STATE INSURANCE 
EXPENDITURES. 
(a) IN GENERAL.—Subject to the succeeding provi-
sions of this section, each State shall receive from the Sec-
retary of Health and Human Services (in this subtitle re-
ferred to as the ‘‘Secretary’’) a block grant for the State’s 
providing for the use, in connection with providing health 
benefits coverage, of a qualifying high-risk pool or a rein-
surance pool or other risk-adjustment mechanism used for 
the purpose of subsidizing the purchase of private health 
insurance. 
(b) FUNDING AMOUNT.— 
(1) IN
GENERAL.—There are hereby appro-
priated, out of any funds in the Treasury not other-
wise appropriated, $300,000,000 for each fiscal year 
for block grants under this section. Such amount 
shall be divided among the States as determined by 
the Secretary. 
(2) CONSTRUCTION.—Nothing in this section 
shall be construed as preventing a State from using 
funding under section 2745 of the Public Health 
Service Act for purposes of funding reinsurance or 
other risk mechanisms. 
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(c) LIMITATION.—Funding under subsection (a) may 
only be used for the following: 
(1) QUALIFYING HIGH-RISK POOLS.— 
(A) CURRENT POOLS.—A qualifying high- 
risk pool created before the date of the enact-
ment of this Act that only cover high risk popu-
lations and individuals (and their spouse and 
dependents) receiving a health care tax credit 
under section 35 of the Internal Revenue Code 
of 1986 for a limited period of time as deter-
mined by the Secretary or under section 2741 
of Public Health Service Act. 
(B) NEW POOLS.—A qualifying high-risk 
pool created on or after such date that only cov-
ers populations and individuals described in 
subparagraph (A) if the pool— 
(i) offers at least the option of one or 
more high deductible plan options, in com-
bination with a contribution into a health 
savings account; 
(ii) offers multiple competing health 
plan options; and 
(iii) covers only high risk populations. 
(2) RISK INSURANCE POOL OR OTHER RISK-AD-
JUSTMENT MECHANISMS.— 
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(A) CURRENT REINSURANCE.—A reinsur-
ance pool ,or other risk-adjustment mechanism, 
created before the date of the enactment of this 
Act that only covers populations and individuals 
described in paragraph (1)(A). 
(B) NEW POOLS.—A reinsurance pool or 
other risk-adjustment mechanism created on or 
after such date that provides reinsurance only 
covers populations and individuals described in 
paragraph (1)(A) and only on a prospective 
basis under which a health insurance issuer 
cedes covered lives to the pool in exchange for 
payment of a reinsurance premium. 
(3) TRANSITION.—Nothing in this section shall 
be construed as preventing a State from using funds 
available to transition from an existing high-risk 
pool to a reinsurance pool. 
(d) BONUS
PAYMENTS.—With respect to any 
amounts made available to the States under this section, 
the Secretary shall set aside a portion of such amounts 
that shall only be available for the following activities by 
such States: 
(1) Providing guaranteed availability of indi-
vidual health insurance coverage to certain individ-
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uals with prior group coverage under part B of title 
XXVII of the Public Health Service Act. 
(2) A reduction in premium trends, actual pre-
miums, or other cost-sharing requirements. 
(3) An expansion or broadening of the pool of 
high risk individuals eligible for coverage. 
(4) States that adopt the Model Health Plan 
for Uninsurable Individuals Act of the National As-
sociation of Insurance Commissioners (if and when 
updated by such Association). 
The Secretary may request such Association to update 
such Model Health Plan as needed by 2011. 
(e) ADMINISTRATION.—The Secretary shall provide 
for the administration of this section and may establish 
such terms and conditions, including the requirement of 
an application, as may be appropriate to carry out this 
section. 
(f) CONSTRUCTION.—Nothing in this section shall be 
construed as requiring a State to operate a reinsurance 
pool (or other risk-adjustment mechanism) under this sec-
tion or as preventing a State from operating such a pool 
or mechanism through one or more private entities. 
(g) QUALIFYING HIGH-RISK POOL.—For purposes of 
this section, the term ‘‘qualifying high-risk pool’’ means 
any qualified high risk pool (as defined in subsection 
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(g)(1)(A) of section 2745) of the Public Health Service 
Act) that meets the conditions to receive a grant under 
section (b)(1) of such section. 
(h) REINSURANCE POOL OR OTHER RISK-ADJUST-
MENT MECHANISM DEFINED.—For purposes of this sec-
tion, the term ‘‘reinsurance pool or other risk-adjustment 
mechanism’’ means any State-based risk spreading mecha-
nism to subsidize the purchase of private health insurance 
for the high-risk population. 
(i) HIGH-RISK POPULATION.—For purposes of this 
section, the term ‘‘high-risk population’’ means— 
(1) individuals who, by reason of the existence 
or history of a medical condition, are able to acquire 
health coverage only at rates which are at least 150 
percent of the standard risk rates for such coverage 
(in a non-community-rated non-guaranteed issue 
State), and 
(2) individuals who are provided health cov-
erage by a high-risk pool. 
(j) STATE DEFINED.—For purposes of this section, 
the term ‘‘State’’ includes the District of Columbia, Puer-
to Rico, the Virgin Islands, Guam, American Samoa, and 
the Northern Mariana Islands. 
(k) EXTENDING FUNDING.—Section 2745(d)(2) of 
the Public Health Service Act (42 U.S.C. 300gg–45(d)(2)) 
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is amended by striking ‘‘2010’’ and inserting ‘‘2012’’ each 
place it appears. 
Subtitle C—Health Care Access and 
Availability 
SEC. 221. EXPANSION OF ACCESS AND CHOICE THROUGH 
INDIVIDUAL 
MEMBERSHIP 
ASSOCIATIONS 
(IMAS). 
The Public Health Service Act is amended by adding 
at the end the following new title: 
‘‘TITLE XXXI—INDIVIDUAL 
MEMBERSHIP ASSOCIATIONS 
‘‘SEC. 3101. DEFINITION OF INDIVIDUAL MEMBERSHIP AS-
SOCIATION (IMA). 
‘‘(a) IN GENERAL.—For purposes of this title, the 
terms ‘individual membership association’ and ‘IMA’ 
mean a legal entity that meets the following requirements: 
‘‘(1) ORGANIZATION.—The IMA is an organiza-
tion operated under the direction of an association 
(as defined in section 3104(1)). 
‘‘(2) 
OFFERING
HEALTH
BENEFITS
COV-
ERAGE.— 
‘‘(A) DIFFERENT GROUPS.—The IMA, in 
conjunction with those health insurance issuers 
that offer health benefits coverage through the 
IMA, makes available health benefits coverage 
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in the manner described in subsection (b) to all 
members of the IMA and the dependents of 
such members in the manner described in sub-
section (c)(2) at rates that are established by 
the health insurance issuer on a policy or prod-
uct specific basis and that may vary only as 
permissible under State law. 
‘‘(B) NONDISCRIMINATION
IN
COVERAGE 
OFFERED.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the IMA may not offer health benefits 
coverage to a member of an IMA unless 
the same coverage is offered to all such 
members of the IMA. 
‘‘(ii) 
CONSTRUCTION.—Nothing 
in 
this title shall be construed as requiring or 
permitting a health insurance issuer to 
provide coverage outside the service area of 
the issuer, as approved under State law, or 
requiring a health insurance issuer from 
excluding or limiting the coverage on any 
individual, subject to the requirement of 
section 2741. 
‘‘(C) NO FINANCIAL UNDERWRITING.—The 
IMA provides health benefits coverage only 
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through contracts with health insurance issuers 
and does not assume insurance risk with re-
spect to such coverage. 
‘‘(3) GEOGRAPHIC AREAS.—Nothing in this title 
shall be construed as preventing the establishment 
and operation of more than one IMA in a geographic 
area or as limiting the number of IMAs that may 
operate in any area. 
‘‘(4) PROVISION OF ADMINISTRATIVE SERVICES 
TO PURCHASERS.— 
‘‘(A) IN GENERAL.—The IMA may provide 
administrative services for members. Such serv-
ices may include accounting, billing, and enroll-
ment information. 
‘‘(B) CONSTRUCTION.—Nothing in this 
subsection shall be construed as preventing an 
IMA from serving as an administrative service 
organization to any entity. 
‘‘(5) FILING
INFORMATION.—The IMA files 
with the Secretary information that demonstrates 
the IMA’s compliance with the applicable require-
ments of this title. 
‘‘(b) HEALTH
BENEFITS
COVERAGE
REQUIRE-
MENTS.— 
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‘‘(1) COMPLIANCE
WITH
CONSUMER
PROTEC-
TION REQUIREMENTS.—Any health benefits coverage 
offered through an IMA shall— 
‘‘(A) be underwritten by a health insurance 
issuer that— 
‘‘(i) is licensed (or otherwise regu-
lated) under State law, and 
‘‘(ii) meets all applicable State stand-
ards relating to consumer protection, sub-
ject to section 3002(b), and 
‘‘(B) subject to paragraph (2), be approved 
or otherwise permitted to be offered under 
State law. 
‘‘(2) EXAMPLES OF TYPES OF COVERAGE.—The 
benefits coverage made available through an IMA 
may include, but is not limited to, any of the fol-
lowing if it meets the other applicable requirements 
of this title: 
‘‘(A) Coverage through a health mainte-
nance organization. 
‘‘(B) Coverage in connection with a pre-
ferred provider organization. 
‘‘(C) Coverage in connection with a li-
censed provider-sponsored organization. 
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