•AMDT. NO. 2786 
‘‘(d) DEFINITIONS.—The Secretary, in consultation 
with the National Association of Insurance Commissions, 
shall establish uniform definitions for the activities re-
ported under subsection (a). 
‘‘SEC. 2719. APPEALS PROCESS. 
‘‘A group health plan and a health insurance issuer 
offering group or individual health insurance coverage 
shall implement an effective appeals process for appeals 
of coverage determinations and claims, under which the 
plan or issuer shall, at a minimum— 
‘‘(1) have in effect an internal claims appeal 
process; 
‘‘(2) provide notice to enrollees, in a culturally 
and linguistically appropriate manner, of available 
internal and external appeals processes, and the 
availability of any applicable office of health insur-
ance consumer assistance or ombudsman established 
under section 2793 to assist such enrollees with the 
appeals processes; 
‘‘(3) allow an enrollee to review their file, to 
present evidence and testimony as part of the ap-
peals process, and to receive continued coverage 
pending the outcome of the appeals process; and 
‘‘(4) provide an external review process for such 
plans and issuers that, at a minimum, includes the 
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•AMDT. NO. 2786 
consumer protections set forth in the Uniform Ex-
ternal Review Model Act promulgated by the Na-
tional Association of Insurance Commissioners and 
is binding on such plans.’’. 
SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION. 
Part C of title XXVII of the Public Health Service 
Act (42 U.S.C. 300gg-91 et seq.) is amended by adding 
at the end the following: 
‘‘SEC. 2793. HEALTH INSURANCE CONSUMER INFORMA-
TION. 
‘‘(a) IN
GENERAL.—The Secretary shall award 
grants to States to enable such States (or the Exchanges 
operating in such States) to establish, expand, or provide 
support for— 
‘‘(1) offices of health insurance consumer as-
sistance; or 
‘‘(2) health insurance ombudsman programs. 
‘‘(b) ELIGIBILITY.— 
‘‘(1) IN GENERAL.—To be eligible to receive a 
grant, a State shall designate an independent office 
of health insurance consumer assistance, or an om-
budsman, that, directly or in coordination with State 
health insurance regulators and consumer assistance 
organizations, receives and responds to inquiries and 
complaints concerning health insurance coverage 
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•AMDT. NO. 2786 
with respect to Federal health insurance require-
ments and under State law. 
‘‘(2) CRITERIA.—A State that receives a grant 
under this section shall comply with criteria estab-
lished by the Secretary for carrying out activities 
under such grant. 
‘‘(c) DUTIES.—The office of health insurance con-
sumer assistance or health insurance ombudsman shall— 
‘‘(1) assist with the filing of complaints and ap-
peals, including filing appeals with the internal ap-
peal or grievance process of the group health plan or 
health insurance issuer involved and providing infor-
mation about the external appeal process; 
‘‘(2) collect, track, and quantify problems and 
inquiries encountered by consumers; 
‘‘(3) educate consumers on their rights and re-
sponsibilities with respect to group health plans and 
health insurance coverage; 
‘‘(4) assist consumers with enrollment in a 
group health plan or health insurance coverage by 
providing information, referral, and assistance; and 
‘‘(5) resolve problems with obtaining premium 
tax credits under section 36B of the Internal Rev-
enue Code of 1986. 
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•AMDT. NO. 2786 
‘‘(d) DATA COLLECTION.—As a condition of receiving 
a grant under subsection (a), an office of health insurance 
consumer assistance or ombudsman program shall be re-
quired to collect and report data to the Secretary on the 
types of problems and inquiries encountered by con-
sumers. The Secretary shall utilize such data to identify 
areas where more enforcement action is necessary and 
shall share such information with State insurance regu-
lators, the Secretary of Labor, and the Secretary of the 
Treasury for use in the enforcement activities of such 
agencies. 
‘‘(e) FUNDING.— 
‘‘(1) INITIAL FUNDING.—There is hereby ap-
propriated to the Secretary, out of any funds in the 
Treasury not otherwise appropriated, $30,000,000 
for the first fiscal year for which this section applies 
to carry out this section. Such amount shall remain 
available without fiscal year limitation. 
‘‘(2) 
AUTHORIZATION
FOR
SUBSEQUENT 
YEARS.—There is authorized to be appropriated to 
the Secretary for each fiscal year following the fiscal 
year described in paragraph (1), such sums as may 
be necessary to carry out this section.’’. 
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•AMDT. NO. 2786 
SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR 
THEIR DOLLARS. 
Part C of title XXVII of the Public Health Service 
Act (42 U.S.C. 300gg-91 et seq.), as amended by section 
1002, is further amended by adding at the end the fol-
lowing: 
‘‘SEC. 2794. ENSURING THAT CONSUMERS GET VALUE FOR 
THEIR DOLLARS. 
‘‘(a) INITIAL PREMIUM REVIEW PROCESS.— 
‘‘(1) IN GENERAL.—The Secretary, in conjunc-
tion with States, shall establish a process for the an-
nual review, beginning with the 2010 plan year and 
subject to subsection (b)(2)(A), of unreasonable in-
creases in premiums for health insurance coverage. 
‘‘(2) JUSTIFICATION
AND
DISCLOSURE.—The 
process established under paragraph (1) shall re-
quire health insurance issuers to submit to the Sec-
retary and the relevant State a justification for an 
unreasonable premium increase prior to the imple-
mentation of the increase. Such issuers shall promi-
nently post such information on their Internet 
websites. The Secretary shall ensure the public dis-
closure of information on such increases and jus-
tifications for all health insurance issuers. 
‘‘(b) CONTINUING PREMIUM REVIEW PROCESS.— 
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•AMDT. NO. 2786 
‘‘(1) INFORMING SECRETARY OF PREMIUM IN-
CREASE PATTERNS.—As a condition of receiving a 
grant under subsection (c)(1), a State, through its 
Commissioner of Insurance, shall— 
‘‘(A) provide the Secretary with informa-
tion about trends in premium increases in 
health insurance coverage in premium rating 
areas in the State; and 
‘‘(B) make recommendations, as appro-
priate, to the State Exchange about whether 
particular health insurance issuers should be 
excluded from participation in the Exchange 
based on a pattern or practice of excessive or 
unjustified premium increases. 
‘‘(2) MONITORING BY SECRETARY OF PREMIUM 
INCREASES.— 
‘‘(A) IN GENERAL.—Beginning with plan 
years beginning in 2014, the Secretary, in con-
junction with the States and consistent with the 
provisions of subsection (a)(2), shall monitor 
premium increases of health insurance coverage 
offered through an Exchange and outside of an 
Exchange. 
‘‘(B) CONSIDERATION
IN
OPENING
EX-
CHANGE.—In 
determining 
under 
section 
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•AMDT. NO. 2786 
1312(f)(2)(B) of the Patient Protection and Af-
fordable Care Act whether to offer qualified 
health plans in the large group market through 
an Exchange, the State shall take into account 
any excess of premium growth outside of the 
Exchange as compared to the rate of such 
growth inside the Exchange. 
‘‘(c) GRANTS IN SUPPORT OF PROCESS.— 
‘‘(1) PREMIUM REVIEW GRANTS DURING 2010 
THROUGH 2014.—The Secretary shall carry out a 
program to award grants to States during the 5-year 
period beginning with fiscal year 2010 to assist such 
States in carrying out subsection (a), including— 
‘‘(A) in reviewing and, if appropriate under 
State law, approving premium increases for 
health insurance coverage; and 
‘‘(B) in providing information and rec-
ommendations to the Secretary under sub-
section (b)(1). 
‘‘(2) FUNDING.— 
‘‘(A) IN GENERAL.—Out of all funds in the 
Treasury not otherwise appropriated, there are 
appropriated to the Secretary $250,000,000, to 
be available for expenditure for grants under 
paragraph (1) and subparagraph (B). 
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•AMDT. NO. 2786 
‘‘(B) FURTHER AVAILABILITY FOR INSUR-
ANCE REFORM AND CONSUMER PROTECTION.— 
If the amounts appropriated under subpara-
graph (A) are not fully obligated under grants 
under paragraph (1) by the end of fiscal year 
2014, any remaining funds shall remain avail-
able to the Secretary for grants to States for 
planning and implementing the insurance re-
forms and consumer protections under part A. 
‘‘(C) ALLOCATION.—The Secretary shall 
establish a formula for determining the amount 
of any grant to a State under this subsection. 
Under such formula— 
‘‘(i) the Secretary shall consider the 
number of plans of health insurance cov-
erage offered in each State and the popu-
lation of the State; and 
‘‘(ii) no State qualifying for a grant 
under paragraph (1) shall receive less than 
$1,000,000, or more than $5,000,000 for a 
grant year.’’. 
SEC. 1004. EFFECTIVE DATES. 
(a) IN GENERAL.—Except as provided for in sub-
section (b), this subtitle (and the amendments made by 
this subtitle) shall become effective for plan years begin-
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•AMDT. NO. 2786 
ning on or after the date that is 6 months after the date 
of enactment of this Act, except that the amendments 
made by sections 1002 and 1003 shall become effective 
for fiscal years beginning with fiscal year 2010. 
(b) SPECIAL RULE.—The amendments made by sec-
tions 1002 and 1003 shall take effect on the date of enact-
ment of this Act. 
Subtitle B—Immediate Actions to 
Preserve and Expand Coverage 
SEC. 1101. IMMEDIATE ACCESS TO INSURANCE FOR UNIN-
SURED INDIVIDUALS WITH A PREEXISTING 
CONDITION. 
(a) IN GENERAL.—Not later than 90 days after the 
date of enactment of this Act, the Secretary shall establish 
a temporary high risk health insurance pool program to 
provide health insurance coverage for eligible individuals 
during the period beginning on the date on which such 
program is established and ending on January 1, 2014. 
(b) ADMINISTRATION.— 
(1) IN GENERAL.—The Secretary may carry out 
the program under this section directly or through 
contracts to eligible entities. 
(2) ELIGIBLE ENTITIES.—To be eligible for a 
contract under paragraph (1), an entity shall— 
(A) be a State or nonprofit private entity; 
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•AMDT. NO. 2786 
(B) submit to the Secretary an application 
at such time, in such manner, and containing 
such information as the Secretary may require; 
and 
(C) agree to utilize contract funding to es-
tablish and administer a qualified high risk pool 
for eligible individuals. 
(3) MAINTENANCE OF EFFORT.—To be eligible 
to enter into a contract with the Secretary under 
this subsection, a State shall agree not to reduce the 
annual amount the State expended for the operation 
of one or more State high risk pools during the year 
preceding the year in which such contract is entered 
into. 
(c) QUALIFIED HIGH RISK POOL.— 
(1) IN
GENERAL.—Amounts made available 
under this section shall be used to establish a quali-
fied high risk pool that meets the requirements of 
paragraph (2). 
(2) REQUIREMENTS.—A qualified high risk pool 
meets the requirements of this paragraph if such 
pool— 
(A) provides to all eligible individuals 
health insurance coverage that does not impose 
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•AMDT. NO. 2786 
any preexisting condition exclusion with respect 
to such coverage; 
(B) provides health insurance coverage— 
(i) in which the issuer’s share of the 
total allowed costs of benefits provided 
under such coverage is not less than 65 
percent of such costs; and 
(ii) that has an out of pocket limit not 
greater than the applicable amount de-
scribed in section 223(c)(2) of the Internal 
Revenue Code of 1986 for the year in-
volved, except that the Secretary may mod-
ify such limit if necessary to ensure the 
pool meets the actuarial value limit under 
clause (i); 
(C) ensures that with respect to the pre-
mium rate charged for health insurance cov-
erage offered to eligible individuals through the 
high risk pool, such rate shall— 
(i) except as provided in clause (ii), 
vary only as provided for under section 
2701 of the Public Health Service Act (as 
amended by this Act and notwithstanding 
the date on which such amendments take 
effect); 
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•AMDT. NO. 2786 
(ii) vary on the basis of age by a fac-
tor of not greater than 4 to 1; and 
(iii) be established at a standard rate 
for a standard population; and 
(D) meets any other requirements deter-
mined appropriate by the Secretary. 
(d) ELIGIBLE INDIVIDUAL.—An individual shall be 
deemed to be an eligible individual for purposes of this 
section if such individual— 
(1) is a citizen or national of the United States 
or is lawfully present in the United States (as deter-
mined in accordance with section 1411); 
(2) has not been covered under creditable cov-
erage (as defined in section 2701(c)(1) of the Public 
Health Service Act as in effect on the date of enact-
ment of this Act) during the 6-month period prior 
to the date on which such individual is applying for 
coverage through the high risk pool; and 
(3) has a pre-existing condition, as determined 
in a manner consistent with guidance issued by the 
Secretary. 
(e) PROTECTION AGAINST DUMPING RISK BY INSUR-
ERS.— 
(1) IN GENERAL.—The Secretary shall establish 
criteria for determining whether health insurance 
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•AMDT. NO. 2786 
issuers and employment-based health plans have dis-
couraged an individual from remaining enrolled in 
prior coverage based on that individual’s health sta-
tus. 
(2) SANCTIONS.—An issuer or employment- 
based health plan shall be responsible for reimburs-
ing the program under this section for the medical 
expenses incurred by the program for an individual 
who, based on criteria established by the Secretary, 
the Secretary finds was encouraged by the issuer to 
disenroll from health benefits coverage prior to en-
rolling in coverage through the program. The cri-
teria shall include at least the following cir-
cumstances: 
(A) In the case of prior coverage obtained 
through an employer, the provision by the em-
ployer, group health plan, or the issuer of 
money or other financial consideration for 
disenrolling from the coverage. 
(B) In the case of prior coverage obtained 
directly from an issuer or under an employ-
ment-based health plan— 
(i) the provision by the issuer or plan 
of money or other financial consideration 
for disenrolling from the coverage; or 
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•AMDT. NO. 2786 
(ii) in the case of an individual whose 
premium for the prior coverage exceeded 
the premium required by the program (ad-
justed based on the age factors applied to 
the prior coverage)— 
(I) the prior coverage is a policy 
that is no longer being actively mar-
keted (as defined by the Secretary) by 
the issuer; or 
(II) the prior coverage is a policy 
for which duration of coverage form 
issue or health status are factors that 
can be considered in determining pre-
miums at renewal. 
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as constituting exclusive 
remedies for violations of criteria established under 
paragraph (1) or as preventing States from applying 
or enforcing such paragraph or other provisions 
under law with respect to health insurance issuers. 
(f) OVERSIGHT.—The Secretary shall establish— 
(1) an appeals process to enable individuals to 
appeal a determination under this section; and 
(2) procedures to protect against waste, fraud, 
and abuse. 
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•AMDT. NO. 2786 
(g) FUNDING; TERMINATION OF AUTHORITY.— 
(1) IN GENERAL.—There is appropriated to the 
Secretary, out of any moneys in the Treasury not 
otherwise appropriated, $5,000,000,000 to pay 
claims against (and the administrative costs of) the 
high risk pool under this section that are in excess 
of the amount of premiums collected from eligible in-
dividuals enrolled in the high risk pool. Such funds 
shall be available without fiscal year limitation. 
(2) INSUFFICIENT FUNDS.—If the Secretary es-
timates for any fiscal year that the aggregate 
amounts available for the payment of the expenses 
of the high risk pool will be less than the actual 
amount of such expenses, the Secretary shall make 
such adjustments as are necessary to eliminate such 
deficit. 
(3) TERMINATION OF AUTHORITY.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), coverage of eligible individ-
uals under a high risk pool in a State shall ter-
minate on January 1, 2014. 
(B) TRANSITION
TO
EXCHANGE.—The 
Secretary shall develop procedures to provide 
for the transition of eligible individuals enrolled 
in health insurance coverage offered through a 
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•AMDT. NO. 2786 
high risk pool established under this section 
into qualified health plans offered through an 
Exchange. Such procedures shall ensure that 
there is no lapse in coverage with respect to the 
individual and may extend coverage after the 
termination of the risk pool involved, if the Sec-
retary determines necessary to avoid such a 
lapse. 
(4) LIMITATIONS.—The Secretary has the au-
thority to stop taking applications for participation 
in the program under this section to comply with the 
funding limitation provided for in paragraph (1). 
(5) RELATION TO STATE LAWS.—The standards 
established under this section shall supersede any 
State law or regulation (other than State licensing 
laws or State laws relating to plan solvency) with re-
spect to qualified high risk pools which are estab-
lished in accordance with this section. 
SEC. 1102. REINSURANCE FOR EARLY RETIREES. 
(a) ADMINISTRATION.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of enactment of this Act, the Secretary 
shall establish a temporary reinsurance program to 
provide reimbursement to participating employment- 
based plans for a portion of the cost of providing 
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•AMDT. NO. 2786 
health insurance coverage to early retirees (and to 
the eligible spouses, surviving spouses, and depend-
ents of such retirees) during the period beginning on 
the date on which such program is established and 
ending on January 1, 2014. 
(2) REFERENCE.—In this section: 
(A) 
HEALTH
BENEFITS.—The 
term 
‘‘health benefits’’ means medical, surgical, hos-
pital, prescription drug, and such other benefits 
as shall be determined by the Secretary, wheth-
er self-funded, or delivered through the pur-
chase of insurance or otherwise. 
(B) 
EMPLOYMENT-BASED
PLAN.—The 
term ‘‘employment-based plan’’ means a group 
health benefits plan that— 
(i) is— 
(I) maintained by one or more 
current or former employers (includ-
ing without limitation any State or 
local government or political subdivi-
sion thereof), employee organization, a 
voluntary employees’ beneficiary asso-
ciation, or a committee or board of in-
dividuals appointed to administer such 
plan; or 
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•AMDT. NO. 2786 
(II) a multiemployer plan (as de-
fined in section 3(37) of the Employee 
Retirement Income Security Act of 
1974); and 
(ii) provides health benefits to early 
retirees. 
(C) EARLY RETIREES.—The term ‘‘early 
retirees’’ means individuals who are age 55 and 
older but are not eligible for coverage under 
title XVIII of the Social Security Act, and who 
are not active employees of an employer main-
taining, or currently contributing to, the em-
ployment-based plan or of any employer that 
has made substantial contributions to fund such 
plan. 
(b) PARTICIPATION.— 
(1) EMPLOYMENT-BASED PLAN ELIGIBILITY.— 
A participating employment-based plan is an em-
ployment-based plan that— 
(A) meets the requirements of paragraph 
(2) with respect to health benefits provided 
under the plan; and 
(B) submits to the Secretary an applica-
tion for participation in the program, at such 
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•AMDT. NO. 2786 
time, in such manner, and containing such in-
formation as the Secretary shall require. 
(2) EMPLOYMENT-BASED HEALTH BENEFITS.— 
An employment-based plan meets the requirements 
of this paragraph if the plan— 
(A) implements programs and procedures 
to generate cost-savings with respect to partici-
pants with chronic and high-cost conditions; 
(B) provides documentation of the actual 
cost of medical claims involved; and 
(C) is certified by the Secretary. 
(c) PAYMENTS.— 
(1) SUBMISSION OF CLAIMS.— 
(A) IN GENERAL.—A participating employ-
ment-based plan shall submit claims for reim-
bursement to the Secretary which shall contain 
documentation of the actual costs of the items 
and services for which each claim is being sub-
mitted. 
(B) BASIS FOR CLAIMS.—Claims submitted 
under subparagraph (A) shall be based on the 
actual amount expended by the participating 
employment-based plan involved within the plan 
year for the health benefits provided to an early 
retiree or the spouse, surviving spouse, or de-
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•AMDT. NO. 2786 
pendent of such retiree. In determining the 
amount of a claim for purposes of this sub-
section, the participating employment-based 
plan shall take into account any negotiated 
price concessions (such as discounts, direct or 
indirect subsidies, rebates, and direct or indi-
rect remunerations) obtained by such plan with 
respect to such health benefit. For purposes of 
determining the amount of any such claim, the 
costs paid by the early retiree or the retiree’s 
spouse, surviving spouse, or dependent in the 
form of deductibles, co-payments, or co-insur-
ance shall be included in the amounts paid by 
the participating employment-based plan. 
(2) PROGRAM PAYMENTS.—If the Secretary de-
termines that a participating employment-based plan 
has submitted a valid claim under paragraph (1), 
the Secretary shall reimburse such plan for 80 per-
cent of that portion of the costs attributable to such 
claim that exceed $15,000, subject to the limits con-
tained in paragraph (3). 
(3) LIMIT.—To be eligible for reimbursement 
under the program, a claim submitted by a partici-
pating employment-based plan shall not be less than 
$15,000 nor greater than $90,000. Such amounts 
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•AMDT. NO. 2786 
shall be adjusted each fiscal year based on the per-
centage increase in the Medical Care Component of 
the Consumer Price Index for all urban consumers 
(rounded to the nearest multiple of $1,000) for the 
year involved. 
(4) USE OF PAYMENTS.—Amounts paid to a 
participating employment-based plan under this sub-
section shall be used to lower costs for the plan. 
Such payments may be used to reduce premium 
costs 
for 
an 
entity 
described 
in 
subsection 
(a)(2)(B)(i) or to reduce premium contributions, co- 
payments, deductibles, co-insurance, or other out-of- 
pocket costs for plan participants. Such payments 
shall not be used as general revenues for an entity 
described in subsection (a)(2)(B)(i). The Secretary 
shall develop a mechanism to monitor the appro-
priate use of such payments by such entities. 
(5) PAYMENTS
NOT
TREATED
AS
INCOME.— 
Payments received under this subsection shall not be 
included in determining the gross income of an enti-
ty described in subsection (a)(2)(B)(i) that is main-
taining or currently contributing to a participating 
employment-based plan. 
(6) APPEALS.—The Secretary shall establish— 
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•AMDT. NO. 2786 
(A) an appeals process to permit partici-
pating employment-based plans to appeal a de-
termination of the Secretary with respect to 
claims submitted under this section; and 
(B) procedures to protect against fraud, 
waste, and abuse under the program. 
(d) AUDITS.—The Secretary shall conduct annual au-
dits of claims data submitted by participating employ-
ment-based plans under this section to ensure that such 
plans are in compliance with the requirements of this sec-
tion. 
(e) FUNDING.—There is appropriated to the Sec-
retary, out of any moneys in the Treasury not otherwise 
appropriated, $5,000,000,000 to carry out the program 
under this section. Such funds shall be available without 
fiscal year limitation. 
(f) LIMITATION.—The Secretary has the authority to 
stop taking applications for participation in the program 
based on the availability of funding under subsection (e). 
SEC. 1103. IMMEDIATE INFORMATION THAT ALLOWS CON-
SUMERS TO IDENTIFY AFFORDABLE COV-
ERAGE OPTIONS. 
(a) INTERNET PORTAL TO AFFORDABLE COVERAGE 
OPTIONS.— 
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•AMDT. NO. 2786 
(1) IMMEDIATE
ESTABLISHMENT.—Not later 
than July 1, 2010, the Secretary, in consultation 
with the States, shall establish a mechanism, includ-
ing an Internet website, through which a resident of 
any State may identify affordable health insurance 
coverage options in that State. 
(2) 
CONNECTING
TO
AFFORDABLE
COV-
ERAGE.—An Internet website established under 
paragraph (1) shall, to the extent practicable, pro-
vide ways for residents of any State to receive infor-
mation on at least the following coverage options: 
(A) Health insurance coverage offered by 
health insurance issuers, other than coverage 
that provides reimbursement only for the treat-
ment or mitigation of— 
(i) a single disease or condition; or 
(ii) an unreasonably limited set of dis-
eases or conditions (as determined by the 
Secretary); 
(B) Medicaid coverage under title XIX of 
the Social Security Act. 
(C) Coverage under title XXI of the Social 
Security Act. 
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•AMDT. NO. 2786 
(D) A State health benefits high risk pool, 
to the extent that such high risk pool is offered 
in such State; and 
(E) Coverage under a high risk pool under 
section 1101. 
(b) ENHANCING COMPARATIVE PURCHASING OP-
TIONS.— 
(1) IN GENERAL.—Not later than 60 days after 
the date of enactment of this Act, the Secretary 
shall develop a standardized format to be used for 
the presentation of information relating to the cov-
erage options described in subsection (a)(2). Such 
format shall, at a minimum, require the inclusion of 
information on the percentage of total premium rev-
enue expended on nonclinical costs (as reported 
under section 2718(a) of the Public Health Service 
Act), eligibility, availability, premium rates, and cost 
sharing with respect to such coverage options and be 
consistent with the standards adopted for the uni-
form explanation of coverage as provided for in sec-
tion 2715 of the Public Health Service Act. 
(2) USE OF FORMAT.—The Secretary shall uti-
lize the format developed under paragraph (1) in 
compiling information concerning coverage options 
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•AMDT. NO. 2786 
on the Internet website established under subsection 
(a). 
(c) AUTHORITY TO CONTRACT.—The Secretary may 
carry out this section through contracts entered into with 
qualified entities. 
SEC. 1104. ADMINISTRATIVE SIMPLIFICATION. 
(a) PURPOSE
OF
ADMINISTRATIVE
SIMPLIFICA-
TION.—Section 261 of the Health Insurance Portability 
and Accountability Act of 1996 (42 U.S.C. 1320d note) 
is amended— 
(1) by inserting ‘‘uniform’’ before ‘‘standards’’; 
and 
(2) by inserting ‘‘and to reduce the clerical bur-
den on patients, health care providers, and health 
plans’’ before the period at the end. 
(b) OPERATING RULES FOR HEALTH INFORMATION 
TRANSACTIONS.— 
(1) DEFINITION OF OPERATING RULES.—Sec-
tion 1171 of the Social Security Act (42 U.S.C. 
1320d) is amended by adding at the end the fol-
lowing: 
‘‘(9) OPERATING RULES.—The term ‘operating 
rules’ means the necessary business rules and guide-
lines for the electronic exchange of information that 
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•AMDT. NO. 2786 
are not defined by a standard or its implementation 
specifications as adopted for purposes of this part.’’. 
(2) TRANSACTION
STANDARDS; 
OPERATING 
RULES AND COMPLIANCE.—Section 1173 of the So-
cial Security Act (42 U.S.C. 1320d–2) is amended— 
(A) in subsection (a)(2), by adding at the 
end the following new subparagraph: 
‘‘(J) Electronic funds transfers.’’; 
(B) in subsection (a), by adding at the end 
the following new paragraph: 
‘‘(4) REQUIREMENTS FOR FINANCIAL AND AD-
MINISTRATIVE TRANSACTIONS.— 
‘‘(A) IN GENERAL.—The standards and as-
sociated operating rules adopted by the Sec-
retary shall— 
‘‘(i) to the extent feasible and appro-
priate, enable determination of an individ-
ual’s eligibility and financial responsibility 
for specific services prior to or at the point 
of care; 
‘‘(ii) 
be 
comprehensive, 
requiring 
minimal augmentation by paper or other 
communications; 
‘‘(iii) provide for timely acknowledg-
ment, response, and status reporting that 
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•AMDT. NO. 2786 
supports a transparent claims and denial 
management process (including adjudica-
tion and appeals); and 
‘‘(iv) describe all data elements (in-
cluding reason and remark codes) in un-
ambiguous terms, require that such data 
elements be required or conditioned upon 
set values in other fields, and prohibit ad-
ditional conditions (except where necessary 
to implement State or Federal law, or to 
protect against fraud and abuse). 
‘‘(B) REDUCTION
OF
CLERICAL
BUR-
DEN.—In adopting standards and operating 
rules for the transactions referred to under 
paragraph (1), the Secretary shall seek to re-
duce the number and complexity of forms (in-
cluding paper and electronic forms) and data 
entry required by patients and providers.’’; and 
(C) by adding at the end the following new 
subsections: 
‘‘(g) OPERATING RULES.— 
‘‘(1) IN GENERAL.—The Secretary shall adopt 
a single set of operating rules for each transaction 
referred to under subsection (a)(1) with the goal of 
creating as much uniformity in the implementation 
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•AMDT. NO. 2786 
of the electronic standards as possible. Such oper-
ating rules shall be consensus-based and reflect the 
necessary business rules affecting health plans and 
health care providers and the manner in which they 
operate pursuant to standards issued under Health 
Insurance Portability and Accountability Act of 
1996. 
‘‘(2) OPERATING
RULES
DEVELOPMENT.—In 
adopting operating rules under this subsection, the 
Secretary shall consider recommendations for oper-
ating rules developed by a qualified nonprofit entity 
that meets the following requirements: 
‘‘(A) The entity focuses its mission on ad-
ministrative simplification. 
‘‘(B) The entity demonstrates a multi- 
stakeholder and consensus-based process for de-
velopment of operating rules, including rep-
resentation by or participation from health 
plans, health care providers, vendors, relevant 
Federal agencies, and other standard develop-
ment organizations. 
‘‘(C) The entity has a public set of guiding 
principles that ensure the operating rules and 
process are open and transparent, and supports 
nondiscrimination and conflict of interest poli-
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•AMDT. NO. 2786 
cies that demonstrate a commitment to open, 
fair, and nondiscriminatory practices. 
‘‘(D) The entity builds on the transaction 
standards issued under Health Insurance Port-
ability and Accountability Act of 1996. 
‘‘(E) The entity allows for public review 
and updates of the operating rules. 
‘‘(3) REVIEW
AND
RECOMMENDATIONS.—The 
National Committee on Vital and Health Statistics 
shall— 
‘‘(A) advise the Secretary as to whether a 
nonprofit entity meets the requirements under 
paragraph (2); 
‘‘(B) review the operating rules developed 
and recommended by such nonprofit entity; 
‘‘(C) determine whether such operating 
rules represent a consensus view of the health 
care stakeholders and are consistent with and 
do not conflict with other existing standards; 
‘‘(D) evaluate whether such operating rules 
are consistent with electronic standards adopted 
for health information technology; and 
‘‘(E) submit to the Secretary a rec-
ommendation as to whether the Secretary 
should adopt such operating rules. 
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•AMDT. NO. 2786 
‘‘(4) IMPLEMENTATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
adopt operating rules under this subsection, by 
regulation in accordance with subparagraph 
(C), following consideration of the operating 
rules developed by the non-profit entity de-
scribed in paragraph (2) and the recommenda-
tion submitted by the National Committee on 
Vital and Health Statistics under paragraph 
(3)(E) and having ensured consultation with 
providers. 
‘‘(B) ADOPTION
REQUIREMENTS; EFFEC-
TIVE DATES.— 
‘‘(i) ELIGIBILITY
FOR
A
HEALTH 
PLAN AND HEALTH CLAIM STATUS.—The 
set of operating rules for eligibility for a 
health plan and health claim status trans-
actions shall be adopted not later than 
July 1, 2011, in a manner ensuring that 
such operating rules are effective not later 
than January 1, 2013, and may allow for 
the use of a machine readable identifica-
tion card. 
‘‘(ii) ELECTRONIC FUNDS TRANSFERS 
AND HEALTH CARE PAYMENT AND REMIT-
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•AMDT. NO. 2786 
TANCE
ADVICE.—The set of operating 
rules for electronic funds transfers and 
health care payment and remittance advice 
transactions shall— 
‘‘(I) allow for automated rec-
onciliation of the electronic payment 
with the remittance advice; and 
‘‘(II) be adopted not later than 
July 1, 2012, in a manner ensuring 
that such operating rules are effective 
not later than January 1, 2014. 
‘‘(iii) HEALTH
CLAIMS
OR
EQUIVA-
LENT ENCOUNTER INFORMATION, ENROLL-
MENT AND DISENROLLMENT IN A HEALTH 
PLAN, HEALTH PLAN PREMIUM PAYMENTS, 
REFERRAL
CERTIFICATION
AND
AUTHOR-
IZATION.—The set of operating rules for 
health claims or equivalent encounter in-
formation, enrollment and disenrollment in 
a health plan, health plan premium pay-
ments, and referral certification and au-
thorization transactions shall be adopted 
not later than July 1, 2014, in a manner 
ensuring that such operating rules are ef-
fective not later than January 1, 2016. 
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•AMDT. NO. 2786 
‘‘(C) EXPEDITED RULEMAKING.—The Sec-
retary shall promulgate an interim final rule 
applying any standard or operating rule rec-
ommended by the National Committee on Vital 
and Health Statistics pursuant to paragraph 
(3). The Secretary shall accept and consider 
public comments on any interim final rule pub-
lished under this subparagraph for 60 days 
after the date of such publication. 
‘‘(h) COMPLIANCE.— 
‘‘(1) HEALTH PLAN CERTIFICATION.— 
‘‘(A) ELIGIBILITY FOR A HEALTH PLAN, 
HEALTH
CLAIM
STATUS, ELECTRONIC
FUNDS 
TRANSFERS, HEALTH CARE PAYMENT AND RE-
MITTANCE ADVICE.—Not later than December 
31, 2013, a health plan shall file a statement 
with the Secretary, in such form as the Sec-
retary may require, certifying that the data and 
information systems for such plan are in com-
pliance with any applicable standards (as de-
scribed under paragraph (7) of section 1171) 
and associated operating rules (as described 
under paragraph (9) of such section) for elec-
tronic funds transfers, eligibility for a health 
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•AMDT. NO. 2786 
plan, health claim status, and health care pay-
ment and remittance advice, respectively. 
‘‘(B) HEALTH
CLAIMS
OR
EQUIVALENT 
ENCOUNTER INFORMATION, ENROLLMENT AND 
DISENROLLMENT IN A HEALTH PLAN, HEALTH 
PLAN
PREMIUM
PAYMENTS, HEALTH
CLAIMS 
ATTACHMENTS, REFERRAL CERTIFICATION AND 
AUTHORIZATION.—Not later than December 31, 
2015, a health plan shall file a statement with 
the Secretary, in such form as the Secretary 
may require, certifying that the data and infor-
mation systems for such plan are in compliance 
with any applicable standards and associated 
operating rules for health claims or equivalent 
encounter 
information, 
enrollment 
and 
disenrollment in a health plan, health plan pre-
mium payments, health claims attachments, 
and referral certification and authorization, re-
spectively. A health plan shall provide the same 
level of documentation to certify compliance 
with such transactions as is required to certify 
compliance with the transactions specified in 
subparagraph (A). 
‘‘(2) DOCUMENTATION
OF
COMPLIANCE.—A 
health plan shall provide the Secretary, in such form 
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•AMDT. NO. 2786 
as the Secretary may require, with adequate docu-
mentation of compliance with the standards and op-
erating rules described under paragraph (1). A 
health plan shall not be considered to have provided 
adequate documentation and shall not be certified as 
being in compliance with such standards, unless the 
health plan— 
‘‘(A) demonstrates to the Secretary that 
the plan conducts the electronic transactions 
specified in paragraph (1) in a manner that 
fully complies with the regulations of the Sec-
retary; and 
‘‘(B) provides documentation showing that 
the plan has completed end-to-end testing for 
such transactions with their partners, such as 
hospitals and physicians. 
‘‘(3) SERVICE CONTRACTS.—A health plan shall 
be required to ensure that any entities that provide 
services pursuant to a contract with such health 
plan shall comply with any applicable certification 
and compliance requirements (and provide the Sec-
retary with adequate documentation of such compli-
ance) under this subsection. 
‘‘(4) CERTIFICATION
BY
OUTSIDE
ENTITY.— 
The Secretary may designate independent, outside 
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•AMDT. NO. 2786 
entities to certify that a health plan has complied 
with the requirements under this subsection, pro-
vided that the certification standards employed by 
such entities are in accordance with any standards 
or operating rules issued by the Secretary. 
‘‘(5) COMPLIANCE WITH REVISED STANDARDS 
AND OPERATING RULES.— 
‘‘(A) IN GENERAL.—A health plan (includ-
ing entities described under paragraph (3)) 
shall file a statement with the Secretary, in 
such form as the Secretary may require, certi-
fying that the data and information systems for 
such plan are in compliance with any applicable 
revised standards and associated operating 
rules under this subsection for any interim final 
rule promulgated by the Secretary under sub-
section (i) that— 
‘‘(i) amends any standard or oper-
ating rule described under paragraph (1) 
of this subsection; or 
‘‘(ii) establishes a standard (as de-
scribed under subsection (a)(1)(B)) or as-
sociated operating rules (as described 
under subsection (i)(5)) for any other fi-
nancial and administrative transactions. 
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•AMDT. NO. 2786 
‘‘(B) DATE
OF
COMPLIANCE.—A health 
plan shall comply with such requirements not 
later than the effective date of the applicable 
standard or operating rule. 
‘‘(6) AUDITS
OF
HEALTH
PLANS.—The Sec-
retary shall conduct periodic audits to ensure that 
health plans (including entities described under 
paragraph (3)) are in compliance with any standards 
and operating rules that are described under para-
graph (1) or subsection (i)(5). 
‘‘(i) REVIEW AND AMENDMENT OF STANDARDS AND 
OPERATING RULES.— 
‘‘(1) ESTABLISHMENT.—Not later than Janu-
ary 1, 2014, the Secretary shall establish a review 
committee (as described under paragraph (4)). 
‘‘(2) EVALUATIONS AND REPORTS.— 
‘‘(A) HEARINGS.—Not later than April 1, 
2014, and not less than biennially thereafter, 
the Secretary, acting through the review com-
mittee, shall conduct hearings to evaluate and 
review the adopted standards and operating 
rules established under this section. 
‘‘(B) REPORT.—Not later than July 1, 
2014, and not less than biennially thereafter, 
the 
review 
committee 
shall 
provide 
rec-
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•AMDT. NO. 2786 
ommendations for updating and improving such 
standards and operating rules. The review com-
mittee shall recommend a single set of oper-
ating rules per transaction standard and main-
tain the goal of creating as much uniformity as 
possible in the implementation of the electronic 
standards. 
‘‘(3) INTERIM FINAL RULEMAKING.— 
‘‘(A) IN GENERAL.—Any recommendations 
to amend adopted standards and operating 
rules that have been approved by the review 
committee and reported to the Secretary under 
paragraph (2)(B) shall be adopted by the Sec-
retary through promulgation of an interim final 
rule not later than 90 days after receipt of the 
committee’s report. 
‘‘(B) PUBLIC COMMENT.— 
‘‘(i) PUBLIC COMMENT PERIOD.—The 
Secretary shall accept and consider public 
comments on any interim final rule pub-
lished under this paragraph for 60 days 
after the date of such publication. 
‘‘(ii) EFFECTIVE DATE.—The effective 
date of any amendment to existing stand-
ards or operating rules that is adopted 
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•AMDT. NO. 2786 
through an interim final rule published 
under this paragraph shall be 25 months 
following the close of such public comment 
period. 
‘‘(4) REVIEW COMMITTEE.— 
‘‘(A) DEFINITION.—For the purposes of 
this subsection, the term ‘review committee’ 
means a committee chartered by or within the 
Department of Health and Human services that 
has been designated by the Secretary to carry 
out this subsection, including— 
‘‘(i) the National Committee on Vital 
and Health Statistics; or 
‘‘(ii) any appropriate committee as de-
termined by the Secretary. 
‘‘(B) COORDINATION
OF
HIT
STAND-
ARDS.—In developing recommendations under 
this subsection, the review committee shall en-
sure coordination, as appropriate, with the 
standards that support the certified electronic 
health record technology approved by the Office 
of the National Coordinator for Health Infor-
mation Technology. 
‘‘(5) OPERATING
RULES
FOR
OTHER
STAND-
ARDS ADOPTED BY THE SECRETARY.—The Secretary 
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•AMDT. NO. 2786 
shall adopt a single set of operating rules (pursuant 
to the process described under subsection (g)) for 
any transaction for which a standard had been 
adopted pursuant to subsection (a)(1)(B). 
‘‘(j) PENALTIES.— 
‘‘(1) PENALTY FEE.— 
‘‘(A) IN GENERAL.—Not later than April 
1, 2014, and annually thereafter, the Secretary 
shall assess a penalty fee (as determined under 
subparagraph (B)) against a health plan that 
has failed to meet the requirements under sub-
section (h) with respect to certification and doc-
umentation of compliance with— 
‘‘(i) the standards and associated op-
erating rules described under paragraph 
(1) of such subsection; and 
‘‘(ii) a standard (as described under 
subsection (a)(1)(B)) and associated oper-
ating rules (as described under subsection 
(i)(5)) for any other financial and adminis-
trative transactions. 
‘‘(B) FEE AMOUNT.—Subject to subpara-
graphs (C), (D), and (E), the Secretary shall 
assess a penalty fee against a health plan in the 
amount of $1 per covered life until certification 
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•AMDT. NO. 2786 
is complete. The penalty shall be assessed per 
person covered by the plan for which its data 
systems for major medical policies are not in 
compliance and shall be imposed against the 
health plan for each day that the plan is not in 
compliance with the requirements under sub-
section (h). 
‘‘(C) ADDITIONAL
PENALTY
FOR
MIS-
REPRESENTATION.—A health plan that know-
ingly provides inaccurate or incomplete informa-
tion in a statement of certification or docu-
mentation of compliance under subsection (h) 
shall be subject to a penalty fee that is double 
the amount that would otherwise be imposed 
under this subsection. 
‘‘(D) 
ANNUAL
FEE
INCREASE.—The 
amount of the penalty fee imposed under this 
subsection shall be increased on an annual basis 
by the annual percentage increase in total na-
tional health care expenditures, as determined 
by the Secretary. 
‘‘(E) PENALTY LIMIT.—A penalty fee as-
sessed against a health plan under this sub-
section shall not exceed, on an annual basis— 
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•AMDT. NO. 2786 
‘‘(i) an amount equal to $20 per cov-
ered life under such plan; or 
‘‘(ii) an amount equal to $40 per cov-
ered life under the plan if such plan has 
knowingly provided inaccurate or incom-
plete information (as described under sub-
paragraph (C)). 
‘‘(F) DETERMINATION OF COVERED INDI-
VIDUALS.—The Secretary shall determine the 
number of covered lives under a health plan 
based upon the most recent statements and fil-
ings that have been submitted by such plan to 
the Securities and Exchange Commission. 
‘‘(2) NOTICE AND DISPUTE PROCEDURE.—The 
Secretary shall establish a procedure for assessment 
of penalty fees under this subsection that provides a 
health plan with reasonable notice and a dispute res-
olution procedure prior to provision of a notice of as-
sessment by the Secretary of the Treasury (as de-
scribed under paragraph (4)(B)). 
‘‘(3) PENALTY FEE REPORT.—Not later than 
May 1, 2014, and annually thereafter, the Secretary 
shall provide the Secretary of the Treasury with a 
report identifying those health plans that have been 
assessed a penalty fee under this subsection. 
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•AMDT. NO. 2786 
‘‘(4) COLLECTION OF PENALTY FEE.— 
‘‘(A) IN GENERAL.—The Secretary of the 
Treasury, acting through the Financial Man-
agement Service, shall administer the collection 
of penalty fees from health plans that have been 
identified by the Secretary in the penalty fee re-
port provided under paragraph (3). 
‘‘(B) NOTICE.—Not later than August 1, 
2014, and annually thereafter, the Secretary of 
the Treasury shall provide notice to each health 
plan that has been assessed a penalty fee by the 
Secretary under this subsection. Such notice 
shall include the amount of the penalty fee as-
sessed by the Secretary and the due date for 
payment of such fee to the Secretary of the 
Treasury (as described in subparagraph (C)). 
‘‘(C) PAYMENT DUE DATE.—Payment by a 
health plan for a penalty fee assessed under 
this subsection shall be made to the Secretary 
of the Treasury not later than November 1, 
2014, and annually thereafter. 
‘‘(D) 
UNPAID
PENALTY
FEES.—Any 
amount of a penalty fee assessed against a 
health plan under this subsection for which pay-
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•AMDT. NO. 2786 
ment has not been made by the due date pro-
vided under subparagraph (C) shall be— 
‘‘(i) increased by the interest accrued 
on such amount, as determined pursuant 
to the underpayment rate established 
under section 6621 of the Internal Rev-
enue Code of 1986; and 
‘‘(ii) treated as a past-due, legally en-
forceable debt owed to a Federal agency 
for purposes of section 6402(d) of the In-
ternal Revenue Code of 1986. 
‘‘(E) ADMINISTRATIVE
FEES.—Any fee 
charged or allocated for collection activities con-
ducted by the Financial Management Service 
will be passed on to a health plan on a pro-rata 
basis and added to any penalty fee collected 
from the plan.’’. 
(c) PROMULGATION OF RULES.— 
(1) UNIQUE HEALTH PLAN IDENTIFIER.—The 
Secretary shall promulgate a final rule to establish 
a unique health plan identifier (as described in sec-
tion 1173(b) of the Social Security Act (42 U.S.C. 
1320d-2(b))) based on the input of the National 
Committee on Vital and Health Statistics. The Sec-
retary may do so on an interim final basis and such 
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•AMDT. NO. 2786 
rule shall be effective not later than October 1, 
2012. 
(2) ELECTRONIC FUNDS TRANSFER.—The Sec-
retary shall promulgate a final rule to establish a 
standard for electronic funds transfers (as described 
in section 1173(a)(2)(J) of the Social Security Act, 
as added by subsection (b)(2)(A)). The Secretary 
may do so on an interim final basis and shall adopt 
such standard not later than January 1, 2012, in a 
manner ensuring that such standard is effective not 
later than January 1, 2014. 
(3) HEALTH CLAIMS ATTACHMENTS.—The Sec-
retary shall promulgate a final rule to establish a 
transaction standard and a single set of associated 
operating rules for health claims attachments (as de-
scribed in section 1173(a)(2)(B) of the Social Secu-
rity Act (42 U.S.C. 1320d-2(a)(2)(B))) that is con-
sistent with the X12 Version 5010 transaction 
standards. The Secretary may do so on an interim 
final basis and shall adopt a transaction standard 
and a single set of associated operating rules not 
later than January 1, 2014, in a manner ensuring 
that such standard is effective not later than Janu-
ary 1, 2016. 
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•AMDT. NO. 2786 
(d) EXPANSION OF ELECTRONIC TRANSACTIONS IN 
MEDICARE.—Section 1862(a) of the Social Security Act 
(42 U.S.C. 1395y(a)) is amended— 
(1) in paragraph (23), by striking the ‘‘or’’ at 
the end; 
(2) in paragraph (24), by striking the period 
and inserting ‘‘; or’’; and 
(3) by inserting after paragraph (24) the fol-
lowing new paragraph: 
‘‘(25) not later than January 1, 2014, for 
which the payment is other than by electronic funds 
transfer (EFT) or an electronic remittance in a form 
as specified in ASC X12 835 Health Care Payment 
and Remittance Advice or subsequent standard.’’. 
SEC. 1105. EFFECTIVE DATE. 
This subtitle shall take effect on the date of enact-
ment of this Act. 
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•AMDT. NO. 2786 
Subtitle C—Quality Health Insur-
ance Coverage for All Ameri-
cans 
PART I—HEALTH INSURANCE MARKET REFORMS 
SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE 
ACT. 
Part A of title XXVII of the Public Health Service 
Act (42 U.S.C. 300gg et seq.), as amended by section 
1001, is further amended— 
(1) by striking the heading for subpart 1 and 
inserting the following: 
‘‘Subpart I—General Reform’’; 
(2)(A) in section 2701 (42 U.S.C. 300gg), by 
striking the section heading and subsection (a) and 
inserting the following: 
‘‘SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EX-
CLUSIONS 
OR 
OTHER 
DISCRIMINATION 
BASED ON HEALTH STATUS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering group or individual health insur-
ance coverage may not impose any preexisting condition 
exclusion with respect to such plan or coverage.’’; and 
(B) by transferring such section (as amended 
by subparagraph (A)) so as to appear after the sec-
tion 2703 added by paragraph (4); 
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•AMDT. NO. 2786 
(3)(A) in section 2702 (42 U.S.C. 300gg-1)— 
(i) by striking the section heading and all 
that follows through subsection (a); 
(ii) in subsection (b)— 
(I) by striking ‘‘health insurance 
issuer offering health insurance coverage in 
connection with a group health plan’’ each 
place that such appears and inserting 
‘‘health insurance issuer offering group or 
individual health insurance coverage’’; and 
(II) in paragraph (2)(A)— 
(aa) by inserting ‘‘or individual’’ 
after ‘‘employer’’; and 
(bb) by inserting ‘‘or individual 
health coverage, as the case may be’’ 
before the semicolon; and 
(iii) in subsection (e)— 
(I) by striking ‘‘(a)(1)(F)’’ and insert-
ing ‘‘(a)(6)’’; 
(II) by striking ‘‘2701’’ and inserting 
‘‘2704’’; and 
(III) by striking ‘‘2721(a)’’ and in-
serting ‘‘2735(a)’’; and 
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•AMDT. NO. 2786 
(B) by transferring such section (as 
amended by subparagraph (A)) to appear after 
section 2705(a) as added by paragraph (4); and 
(4) by inserting after the subpart heading (as 
added by paragraph (1)) the following: 
‘‘SEC. 2701. FAIR HEALTH INSURANCE PREMIUMS. 
‘‘(a) 
PROHIBITING
DISCRIMINATORY
PREMIUM 
RATES.— 
‘‘(1) IN GENERAL.—With respect to the pre-
mium rate charged by a health insurance issuer for 
health insurance coverage offered in the individual 
or small group market— 
‘‘(A) such rate shall vary with respect to 
the particular plan or coverage involved only 
by— 
‘‘(i) whether such plan or coverage 
covers an individual or family; 
‘‘(ii) rating area, as established in ac-
cordance with paragraph (2); 
‘‘(iii) age, except that such rate shall 
not vary by more than 3 to 1 for adults 
(consistent with section 2707(c)); and 
‘‘(iv) tobacco use, except that such 
rate shall not vary by more than 1.5 to 1; 
and 
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‘‘(B) such rate shall not vary with respect 
to the particular plan or coverage involved by 
any other factor not described in subparagraph 
(A). 
‘‘(2) RATING AREA.— 
‘‘(A) IN GENERAL.—Each State shall es-
tablish 1 or more rating areas within that State 
for purposes of applying the requirements of 
this title. 
‘‘(B) SECRETARIAL
REVIEW.—The Sec-
retary shall review the rating areas established 
by each State under subparagraph (A) to en-
sure the adequacy of such areas for purposes of 
carrying out the requirements of this title. If 
the Secretary determines a State’s rating areas 
are not adequate, or that a State does not es-
tablish such areas, the Secretary may establish 
rating areas for that State. 
‘‘(3) PERMISSIBLE
AGE
BANDS.—The Sec-
retary, in consultation with the National Association 
of Insurance Commissioners, shall define the permis-
sible age bands for rating purposes under paragraph 
(1)(A)(iii). 
‘‘(4) APPLICATION OF VARIATIONS BASED ON 
AGE OR TOBACCO USE.—With respect to family cov-
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•AMDT. NO. 2786 
erage under a group health plan or health insurance 
coverage, the rating variations permitted under 
clauses (iii) and (iv) of paragraph (1)(A) shall be 
applied based on the portion of the premium that is 
attributable to each family member covered under 
the plan or coverage. 
‘‘(5) SPECIAL RULE FOR LARGE GROUP MAR-
KET.—If a State permits health insurance issuers 
that offer coverage in the large group market in the 
State to offer such coverage through the State Ex-
change (as provided for under section 1312(f)(2)(B) 
of the Patient Protection and Affordable Care Act), 
the provisions of this subsection shall apply to all 
coverage offered in such market in the State. 
‘‘SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE. 
‘‘(a) GUARANTEED ISSUANCE OF COVERAGE IN THE 
INDIVIDUAL
AND GROUP MARKET.—Subject to sub-
sections (b) through (e), each health insurance issuer that 
offers health insurance coverage in the individual or group 
market in a State must accept every employer and indi-
vidual in the State that applies for such coverage. 
‘‘(b) ENROLLMENT.— 
‘‘(1) RESTRICTION.—A health insurance issuer 
described in subsection (a) may restrict enrollment 
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•AMDT. NO. 2786 
in coverage described in such subsection to open or 
special enrollment periods. 
‘‘(2) ESTABLISHMENT.—A health insurance 
issuer described in subsection (a) shall, in accord-
ance with the regulations promulgated under para-
graph (3), establish special enrollment periods for 
qualifying events (under section 603 of the Em-
ployee Retirement Income Security Act of 1974). 
‘‘(3) REGULATIONS.—The Secretary shall pro-
mulgate regulations with respect to enrollment peri-
ods under paragraphs (1) and (2). 
‘‘SEC. 2703. GUARANTEED RENEWABILITY OF COVERAGE. 
‘‘(a) IN GENERAL.—Except as provided in this sec-
tion, if a health insurance issuer offers health insurance 
coverage in the individual or group market, the issuer 
must renew or continue in force such coverage at the op-
tion of the plan sponsor or the individual, as applicable. 
‘‘SEC. 2705. PROHIBITING DISCRIMINATION AGAINST INDI-
VIDUAL PARTICIPANTS AND BENEFICIARIES 
BASED ON HEALTH STATUS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering group or individual health insur-
ance coverage may not establish rules for eligibility (in-
cluding continued eligibility) of any individual to enroll 
under the terms of the plan or coverage based on any of 
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•AMDT. NO. 2786 
the following health status-related factors in relation to 
the individual or a dependent of the individual: 
‘‘(1) Health status. 
‘‘(2) Medical condition (including both physical 
and mental illnesses). 
‘‘(3) Claims experience. 
‘‘(4) Receipt of health care. 
‘‘(5) Medical history. 
‘‘(6) Genetic information. 
‘‘(7) Evidence of insurability (including condi-
tions arising out of acts of domestic violence). 
‘‘(8) Disability. 
‘‘(9) Any other health status-related factor de-
termined appropriate by the Secretary. 
‘‘(j) PROGRAMS OF HEALTH PROMOTION OR DIS-
EASE PREVENTION.— 
‘‘(1) GENERAL PROVISIONS.— 
‘‘(A) GENERAL
RULE.—For purposes of 
subsection (b)(2)(B), a program of health pro-
motion or disease prevention (referred to in this 
subsection as a ‘wellness program’) shall be a 
program offered by an employer that is de-
signed to promote health or prevent disease 
that meets the applicable requirements of this 
subsection. 
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•AMDT. NO. 2786 
grams without regard to whether the individual 
quits smoking. 
‘‘(E) A program that provides a reward to 
individuals for attending a periodic health edu-
cation seminar. 
‘‘(3) WELLNESS
PROGRAMS
SUBJECT
TO
RE-
QUIREMENTS.—If any of the conditions for obtaining 
a premium discount, rebate, or reward under a 
wellness program as described in paragraph (1)(C) 
is based on an individual satisfying a standard that 
is related to a health status factor, the wellness pro-
gram shall not violate this section if the following re-
quirements are complied with: 
‘‘(A) The reward for the wellness program, 
together with the reward for other wellness pro-
grams with respect to the plan that requires 
satisfaction of a standard related to a health 
status factor, shall not exceed 30 percent of the 
cost of employee-only coverage under the plan. 
If, in addition to employees or individuals, any 
class of dependents (such as spouses or spouses 
and dependent children) may participate fully 
in the wellness program, such reward shall not 
exceed 30 percent of the cost of the coverage in 
which an employee or individual and any de-
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•AMDT. NO. 2786 
pendents are enrolled. For purposes of this 
paragraph, the cost of coverage shall be deter-
mined based on the total amount of employer 
and employee contributions for the benefit 
package under which the employee is (or the 
employee and any dependents are) receiving 
coverage. A reward may be in the form of a dis-
count or rebate of a premium or contribution, 
a waiver of all or part of a cost-sharing mecha-
nism (such as deductibles, copayments, or coin-
surance), the absence of a surcharge, or the 
value of a benefit that would otherwise not be 
provided under the plan. The Secretaries of 
Labor, Health and Human Services, and the 
Treasury may increase the reward available 
under this subparagraph to up to 50 percent of 
the cost of coverage if the Secretaries determine 
that such an increase is appropriate. 
‘‘(B) The wellness program shall be rea-
sonably designed to promote health or prevent 
disease. A program complies with the preceding 
sentence if the program has a reasonable 
chance of improving the health of, or preventing 
disease in, participating individuals and it is 
not overly burdensome, is not a subterfuge for 
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•AMDT. NO. 2786 
discriminating based on a health status factor, 
and is not highly suspect in the method chosen 
to promote health or prevent disease. 
‘‘(C) The plan shall give individuals eligible 
for the program the opportunity to qualify for 
the reward under the program at least once 
each year. 
‘‘(D) The full reward under the wellness 
program shall be made available to all similarly 
situated individuals. For such purpose, among 
other things: 
‘‘(i) The reward is not available to all 
similarly situated individuals for a period 
unless the wellness program allows— 
‘‘(I) for a reasonable alternative 
standard (or waiver of the otherwise 
applicable standard) for obtaining the 
reward for any individual for whom, 
for that period, it is unreasonably dif-
ficult due to a medical condition to 
satisfy the otherwise applicable stand-
ard; and 
‘‘(II) for a reasonable alternative 
standard (or waiver of the otherwise 
applicable standard) for obtaining the 
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•AMDT. NO. 2786 
reward for any individual for whom, 
for that period, it is medically inadvis-
able to attempt to satisfy the other-
wise applicable standard. 
‘‘(ii) If reasonable under the cir-
cumstances, the plan or issuer may seek 
verification, such as a statement from an 
individual’s physician, that a health status 
factor makes it unreasonably difficult or 
medically inadvisable for the individual to 
satisfy or attempt to satisfy the otherwise 
applicable standard. 
‘‘(E) The plan or issuer involved shall dis-
close in all plan materials describing the terms 
of the wellness program the availability of a 
reasonable alternative standard (or the possi-
bility of waiver of the otherwise applicable 
standard) required under subparagraph (D). If 
plan materials disclose that such a program is 
available, without describing its terms, the dis-
closure under this subparagraph shall not be re-
quired. 
‘‘(k) EXISTING PROGRAMS.—Nothing in this section 
shall prohibit a program of health promotion or disease 
prevention that was established prior to the date of enact-
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•AMDT. NO. 2786 
ment of this section and applied with all applicable regula-
tions, and that is operating on such date, from continuing 
to be carried out for as long as such regulations remain 
in effect. 
‘‘(l) 
WELLNESS
PROGRAM
DEMONSTRATION 
PROJECT.— 
‘‘(1) IN
GENERAL.—Not later than July 1, 
2014, the Secretary, in consultation with the Sec-
retary of the Treasury and the Secretary of Labor, 
shall establish a 10-State demonstration project 
under which participating States shall apply the pro-
visions of subsection (j) to programs of health pro-
motion offered by a health insurance issuer that of-
fers health insurance coverage in the individual mar-
ket in such State. 
‘‘(2) 
EXPANSION
OF
DEMONSTRATION 
PROJECT.—If the Secretary, in consultation with the 
Secretary of the Treasury and the Secretary of 
Labor, determines that the demonstration project 
described in paragraph (1) is effective, such Secre-
taries may, beginning on July 1, 2017 expand such 
demonstration project to include additional partici-
pating States. 
‘‘(3) REQUIREMENTS.— 
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•AMDT. NO. 2786 
‘‘(A) MAINTENANCE OF COVERAGE.—The 
Secretary, in consultation with the Secretary of 
the Treasury and the Secretary of Labor, shall 
not approve the participation of a State in the 
demonstration project under this section unless 
the Secretaries determine that the State’s 
project is designed in a manner that— 
‘‘(i) will not result in any decrease in 
coverage; and 
‘‘(ii) will not increase the cost to the 
Federal Government in providing credits 
under section 36B of the Internal Revenue 
Code of 1986 or cost-sharing assistance 
under section 1402 of the Patient Protec-
tion and Affordable Care Act. 
‘‘(B) OTHER REQUIREMENTS.—States that 
participate in the demonstration project under 
this subsection— 
‘‘(i) may permit premium discounts or 
rebates or the modification of otherwise 
applicable copayments or deductibles for 
adherence to, or participation in, a reason-
ably designed program of health promotion 
and disease prevention; 
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•AMDT. NO. 2786 
‘‘(ii) shall ensure that requirements of 
consumer protection are met in programs 
of health promotion in the individual mar-
ket; 
‘‘(iii) shall require verification from 
health insurance issuers that offer health 
insurance coverage in the individual mar-
ket of such State that premium dis-
counts— 
‘‘(I) do not create undue burdens 
for individuals insured in the indi-
vidual market; 
‘‘(II) do not lead to cost shifting; 
and 
‘‘(III) are not a subterfuge for 
discrimination; 
‘‘(iv) shall ensure that consumer data 
is protected in accordance with the require-
ments of section 264(c) of the Health In-
surance Portability and Accountability Act 
of 1996 (42 U.S.C. 1320d-2 note); and 
‘‘(v) shall ensure and demonstrate to 
the satisfaction of the Secretary that the 
discounts or other rewards provided under 
the project reflect the expected level of par-
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•AMDT. NO. 2786 
ticipation in the wellness program involved 
and the anticipated effect the program will 
have on utilization or medical claim costs. 
‘‘(m) REPORT.— 
‘‘(1) IN
GENERAL.—Not later than 3 years 
after the date of enactment of the Patient Protection 
and Affordable Care Act, the Secretary, in consulta-
tion with the Secretary of the Treasury and the Sec-
retary of Labor, shall submit a report to the appro-
priate committees of Congress concerning— 
‘‘(A) the effectiveness of wellness programs 
(as defined in subsection (j)) in promoting 
health and preventing disease; 
‘‘(B) the impact of such wellness programs 
on the access to care and affordability of cov-
erage for participants and non-participants of 
such programs; 
‘‘(C) the impact of premium-based and 
cost-sharing incentives on participant behavior 
and the role of such programs in changing be-
havior; and 
‘‘(D) the effectiveness of different types of 
rewards. 
‘‘(2) DATA COLLECTION.—In preparing the re-
port described in paragraph (1), the Secretaries 
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•AMDT. NO. 2786 
shall gather relevant information from employers 
who provide employees with access to wellness pro-
grams, including State and Federal agencies. 
‘‘(n) REGULATIONS.—Nothing in this section shall be 
construed as prohibiting the Secretaries of Labor, Health 
and Human Services, or the Treasury from promulgating 
regulations in connection with this section. 
‘‘SEC. 2706. NON-DISCRIMINATION IN HEALTH CARE. 
‘‘(a) PROVIDERS.—A group health plan and a health 
insurance issuer offering group or individual health insur-
ance coverage shall not discriminate with respect to par-
ticipation under the plan or coverage against any health 
care provider who is acting within the scope of that pro-
vider’s license or certification under applicable State law. 
This section shall not require that a group health plan 
or health insurance issuer contract with any health care 
provider willing to abide by the terms and conditions for 
participation established by the plan or issuer. Nothing 
in this section shall be construed as preventing a group 
health plan, a health insurance issuer, or the Secretary 
from establishing varying reimbursement rates based on 
quality or performance measures. 
‘‘(b) INDIVIDUALS.—The provisions of section 1558 
of the Patient Protection and Affordable Care Act (relat-
ing to non-discrimination) shall apply with respect to a 
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•AMDT. NO. 2786 
group health plan or health insurance issuer offering 
group or individual health insurance coverage. 
‘‘SEC. 2707. COMPREHENSIVE HEALTH INSURANCE COV-
ERAGE. 
‘‘(a) COVERAGE FOR ESSENTIAL HEALTH BENEFITS 
PACKAGE.—A health insurance issuer that offers health 
insurance coverage in the individual or small group market 
shall ensure that such coverage includes the essential 
health benefits package required under section 1302(a) of 
the Patient Protection and Affordable Care Act. 
‘‘(b) 
COST-SHARING
UNDER
GROUP
HEALTH 
PLANS.—A group health plan shall ensure that any an-
nual cost-sharing imposed under the plan does not exceed 
the limitations provided for under paragraphs (1) and (2) 
of section 1302(c). 
‘‘(c) CHILD-ONLY PLANS.—If a health insurance 
issuer offers health insurance coverage in any level of cov-
erage specified under section 1302(d) of the Patient Pro-
tection and Affordable Care Act, the issuer shall also offer 
such coverage in that level as a plan in which the only 
enrollees are individuals who, as of the beginning of a plan 
year, have not attained the age of 21. 
‘‘(d) DENTAL ONLY.—This section shall not apply to 
a plan described in section 1302(d)(2)(B)(ii)(I). 
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•AMDT. NO. 2786 
‘‘SEC. 2708. PROHIBITION ON EXCESSIVE WAITING PERI-
ODS. 
‘‘A group health plan and a health insurance issuer 
offering group or individual health insurance coverage 
shall not apply any waiting period (as defined in section 
2704(b)(4)) that exceeds 90 days.’’. 
PART II—OTHER PROVISIONS 
SEC. 1251. PRESERVATION OF RIGHT TO MAINTAIN EXIST-
ING COVERAGE. 
(a) NO CHANGES TO EXISTING COVERAGE.— 
(1) IN GENERAL.—Nothing in this Act (or an 
amendment made by this Act) shall be construed to 
require that an individual terminate coverage under 
a group health plan or health insurance coverage in 
which such individual was enrolled on the date of en-
actment of this Act. 
(2) CONTINUATION
OF
COVERAGE.—With re-
spect to a group health plan or health insurance cov-
erage in which an individual was enrolled on the 
date of enactment of this Act, this subtitle and sub-
title A (and the amendments made by such subtitles) 
shall not apply to such plan or coverage, regardless 
of whether the individual renews such coverage after 
such date of enactment. 
(b) ALLOWANCE FOR FAMILY MEMBERS TO JOIN 
CURRENT COVERAGE.—With respect to a group health 
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•AMDT. NO. 2786 
plan or health insurance coverage in which an individual 
was enrolled on the date of enactment of this Act and 
which is renewed after such date, family members of such 
individual shall be permitted to enroll in such plan or cov-
erage if such enrollment is permitted under the terms of 
the plan in effect as of such date of enactment. 
(c) ALLOWANCE
FOR NEW EMPLOYEES
TO JOIN 
CURRENT PLAN.—A group health plan that provides cov-
erage on the date of enactment of this Act may provide 
for the enrolling of new employees (and their families) in 
such plan, and this subtitle and subtitle A (and the 
amendments made by such subtitles) shall not apply with 
respect to such plan and such new employees (and their 
families). 
(d) EFFECT ON COLLECTIVE BARGAINING AGREE-
MENTS.—In the case of health insurance coverage main-
tained pursuant to one or more collective bargaining 
agreements between employee representatives and one or 
more employers that was ratified before the date of enact-
ment of this Act, the provisions of this subtitle and sub-
title A (and the amendments made by such subtitles) shall 
not apply until the date on which the last of the collective 
bargaining agreements relating to the coverage termi-
nates. Any coverage amendment made pursuant to a col-
lective bargaining agreement relating to the coverage 
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•AMDT. NO. 2786 
which amends the coverage solely to conform to any re-
quirement added by this subtitle or subtitle A (or amend-
ments) shall not be treated as a termination of such collec-
tive bargaining agreement. 
(e) DEFINITION.—In this title, the term ‘‘grand-
fathered health plan’’ means any group health plan or 
health insurance coverage to which this section applies. 
SEC. 1252. RATING REFORMS MUST APPLY UNIFORMLY TO 
ALL 
HEALTH 
INSURANCE 
ISSUERS 
AND 
GROUP HEALTH PLANS. 
Any standard or requirement adopted by a State pur-
suant to this title, or any amendment made by this title, 
shall be applied uniformly to all health plans in each insur-
ance market to which the standard and requirements 
apply. The preceding sentence shall also apply to a State 
standard or requirement relating to the standard or re-
quirement required by this title (or any such amendment) 
that is not the same as the standard or requirement but 
that is not preempted under section 1321(d). 
SEC. 1253. EFFECTIVE DATES. 
This subtitle (and the amendments made by this sub-
title) shall become effective for plan years beginning on 
or after January 1, 2014. 
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100 
•AMDT. NO. 2786 
Subtitle D—Available Coverage 
Choices for All Americans 
PART I—ESTABLISHMENT OF QUALIFIED 
HEALTH PLANS 
SEC. 1301. QUALIFIED HEALTH PLAN DEFINED. 
(a) QUALIFIED HEALTH PLAN.—In this title: 
(1) IN GENERAL.—The term ‘‘qualified health 
plan’’ means a health plan that— 
(A) has in effect a certification (which may 
include a seal or other indication of approval) 
that such plan meets the criteria for certifi-
cation described in section 1311(c) issued or 
recognized by each Exchange through which 
such plan is offered; 
(B) provides the essential health benefits 
package described in section 1302(a); and 
(C) is offered by a health insurance issuer 
that— 
(i) is licensed and in good standing to 
offer health insurance coverage in each 
State in which such issuer offers health in-
surance coverage under this title; 
(ii) agrees to offer at least one quali-
fied health plan in the silver level and at 
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101 
•AMDT. NO. 2786 
least one plan in the gold level in each 
such Exchange; 
(iii) agrees to charge the same pre-
mium rate for each qualified health plan of 
the issuer without regard to whether the 
plan is offered through an Exchange or 
whether the plan is offered directly from 
the issuer or through an agent; and 
(iv) complies with the regulations de-
veloped by the Secretary under section 
1311(d) and such other requirements as 
an applicable Exchange may establish. 
(2) INCLUSION OF CO-OP PLANS AND COMMU-
NITY HEALTH INSURANCE OPTION.—Any reference 
in this title to a qualified health plan shall be 
deemed to include a qualified health plan offered 
through the CO-OP program under section 1322 or 
a community health insurance option under section 
1323, unless specifically provided for otherwise. 
(b) TERMS RELATING TO HEALTH PLANS.—In this 
title: 
(1) HEALTH PLAN.— 
(A) IN GENERAL.—The term ‘‘health plan’’ 
means health insurance coverage and a group 
health plan. 
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102 
•AMDT. NO. 2786 
(B) EXCEPTION FOR SELF-INSURED PLANS 
AND MEWAS.—Except to the extent specifically 
provided by this title, the term ‘‘health plan’’ 
shall not include a group health plan or mul-
tiple employer welfare arrangement to the ex-
tent the plan or arrangement is not subject to 
State insurance regulation under section 514 of 
the Employee Retirement Income Security Act 
of 1974. 
(2) 
HEALTH
INSURANCE
COVERAGE
AND 
ISSUER.—The terms ‘‘health insurance coverage’’ 
and ‘‘health insurance issuer’’ have the meanings 
given such terms by section 2791(b) of the Public 
Health Service Act. 
(3) GROUP HEALTH PLAN.—The term ‘‘group 
health plan’’ has the meaning given such term by 
section 2791(a) of the Public Health Service Act. 
SEC. 1302. ESSENTIAL HEALTH BENEFITS REQUIREMENTS. 
(a) ESSENTIAL HEALTH BENEFITS PACKAGE.—In 
this title, the term ‘‘essential health benefits package’’ 
means, with respect to any health plan, coverage that— 
(1) provides for the essential health benefits de-
fined by the Secretary under subsection (b); 
(2) limits cost-sharing for such coverage in ac-
cordance with subsection (c); and 
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103 
•AMDT. NO. 2786 
(3) subject to subsection (e), provides either the 
bronze, silver, gold, or platinum level of coverage de-
scribed in subsection (d). 
(b) ESSENTIAL HEALTH BENEFITS.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the Secretary shall define the essential health bene-
fits, except that such benefits shall include at least 
the following general categories and the items and 
services covered within the categories: 
(A) Ambulatory patient services. 
(B) Emergency services. 
(C) Hospitalization. 
(D) Maternity and newborn care. 
(E) Mental health and substance use dis-
order services, including behavioral health treat-
ment. 
(F) Prescription drugs. 
(G) Rehabilitative and habilitative services 
and devices. 
(H) Laboratory services. 
(I) Preventive and wellness services and 
chronic disease management. 
(J) Pediatric services, including oral and 
vision care. 
(2) LIMITATION.— 
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104 
•AMDT. NO. 2786 
(A) IN GENERAL.—The Secretary shall en-
sure that the scope of the essential health bene-
fits under paragraph (1) is equal to the scope 
of benefits provided under a typical employer 
plan, as determined by the Secretary. To in-
form this determination, the Secretary of Labor 
shall conduct a survey of employer-sponsored 
coverage to determine the benefits typically cov-
ered by employers, including multiemployer 
plans, and provide a report on such survey to 
the Secretary. 
(B) CERTIFICATION.—In defining the es-
sential health benefits described in paragraph 
(1), and in revising the benefits under para-
graph (4)(H), the Secretary shall submit a re-
port to the appropriate committees of Congress 
containing a certification from the Chief Actu-
ary of the Centers for Medicare & Medicaid 
Services that such essential health benefits meet 
the limitation described in paragraph (2). 
(3) NOTICE AND HEARING.—In defining the es-
sential health benefits described in paragraph (1), 
and in revising the benefits under paragraph (4)(H), 
the Secretary shall provide notice and an oppor-
tunity for public comment. 
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105 
•AMDT. NO. 2786 
(4) REQUIRED
ELEMENTS
FOR
CONSIDER-
ATION.—In defining the essential health benefits 
under paragraph (1), the Secretary shall— 
(A) ensure that such essential health bene-
fits reflect an appropriate balance among the 
categories described in such subsection, so that 
benefits are not unduly weighted toward any 
category; 
(B) not make coverage decisions, deter-
mine reimbursement rates, establish incentive 
programs, or design benefits in ways that dis-
criminate against individuals because of their 
age, disability, or expected length of life; 
(C) take into account the health care needs 
of diverse segments of the population, including 
women, children, persons with disabilities, and 
other groups; 
(D) ensure that health benefits established 
as essential not be subject to denial to individ-
uals against their wishes on the basis of the in-
dividuals’ age or expected length of life or of 
the individuals’ present or predicted disability, 
degree of medical dependency, or quality of life; 
(E) provide that a qualified health plan 
shall not be treated as providing coverage for 
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106 
•AMDT. NO. 2786 
the essential health benefits described in para-
graph (1) unless the plan provides that— 
(i) coverage for emergency department 
services will be provided without imposing 
any requirement under the plan for prior 
authorization of services or any limitation 
on coverage where the provider of services 
does not have a contractual relationship 
with the plan for the providing of services 
that is more restrictive than the require-
ments or limitations that apply to emer-
gency department services received from 
providers who do have such a contractual 
relationship with the plan; and 
(ii) if such services are provided out- 
of-network, the cost-sharing requirement 
(expressed as a copayment amount or coin-
surance rate) is the same requirement that 
would apply if such services were provided 
in-network; 
(F) provide that if a plan described in sec-
tion 1311(b)(2)(B)(ii) (relating to stand-alone 
dental benefits plans) is offered through an Ex-
change, another health plan offered through 
such Exchange shall not fail to be treated as a 
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107 
•AMDT. NO. 2786 
qualified health plan solely because the plan 
does not offer coverage of benefits offered 
through the stand-alone plan that are otherwise 
required under paragraph (1)(J); and 
(G) periodically review the essential health 
benefits under paragraph (1), and provide a re-
port to Congress and the public that contains— 
(i) an assessment of whether enrollees 
are facing any difficulty accessing needed 
services for reasons of coverage or cost; 
(ii) an assessment of whether the es-
sential health benefits needs to be modified 
or updated to account for changes in med-
ical evidence or scientific advancement; 
(iii) information on how the essential 
health benefits will be modified to address 
any such gaps in access or changes in the 
evidence base; 
(iv) an assessment of the potential of 
additional or expanded benefits to increase 
costs and the interactions between the ad-
dition or expansion of benefits and reduc-
tions in existing benefits to meet actuarial 
limitations described in paragraph (2); and 
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108 
•AMDT. NO. 2786 
(H) periodically update the essential health 
benefits under paragraph (1) to address any 
gaps in access to coverage or changes in the 
evidence base the Secretary identifies in the re-
view conducted under subparagraph (G). 
(5) RULE OF CONSTRUCTION.—Nothing in this 
title shall be construed to prohibit a health plan 
from providing benefits in excess of the essential 
health benefits described in this subsection. 
(c) REQUIREMENTS RELATING TO COST-SHARING.— 
(1) ANNUAL LIMITATION ON COST-SHARING.— 
(A) 
2014.—The 
cost-sharing 
incurred 
under a health plan with respect to self-only 
coverage or coverage other than self-only cov-
erage for a plan year beginning in 2014 shall 
not exceed the dollar amounts in effect under 
section 223(c)(2)(A)(ii) of the Internal Revenue 
Code of 1986 for self-only and family coverage, 
respectively, for taxable years beginning in 
2014. 
(B) 2015 AND LATER.—In the case of any 
plan year beginning in a calendar year after 
2014, the limitation under this paragraph 
shall— 
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109 
•AMDT. NO. 2786 
(i) in the case of self-only coverage, be 
equal to the dollar amount under subpara-
graph (A) for self-only coverage for plan 
years beginning in 2014, increased by an 
amount equal to the product of that 
amount and the premium adjustment per-
centage under paragraph (4) for the cal-
endar year; and 
(ii) in the case of other coverage, 
twice the amount in effect under clause (i). 
If the amount of any increase under clause (i) 
is not a multiple of $50, such increase shall be 
rounded to the next lowest multiple of $50. 
(2) ANNUAL LIMITATION ON DEDUCTIBLES FOR 
EMPLOYER-SPONSORED PLANS.— 
(A) IN GENERAL.—In the case of a health 
plan offered in the small group market, the de-
ductible under the plan shall not exceed— 
(i) $2,000 in the case of a plan cov-
ering a single individual; and 
(ii) $4,000 in the case of any other 
plan. 
The amounts under clauses (i) and (ii) may be 
increased by the maximum amount of reim-
bursement which is reasonably available to a 
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110 
•AMDT. NO. 2786 
participant under a flexible spending arrange-
ment described in section 106(c)(2) of the In-
ternal Revenue Code of 1986 (determined with-
out regard to any salary reduction arrange-
ment). 
(B) INDEXING OF LIMITS.—In the case of 
any plan year beginning in a calendar year 
after 2014— 
(i) the dollar amount under subpara-
graph (A)(i) shall be increased by an 
amount equal to the product of that 
amount and the premium adjustment per-
centage under paragraph (4) for the cal-
endar year; and 
(ii) the dollar amount under subpara-
graph (A)(ii) shall be increased to an 
amount equal to twice the amount in effect 
under subparagraph (A)(i) for plan years 
beginning in the calendar year, determined 
after application of clause (i). 
If the amount of any increase under clause (i) 
is not a multiple of $50, such increase shall be 
rounded to the next lowest multiple of $50. 
(C) ACTUARIAL
VALUE.—The limitation 
under this paragraph shall be applied in such a 
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111 
•AMDT. NO. 2786 
manner so as to not affect the actuarial value 
of any health plan, including a plan in the 
bronze level. 
(D) COORDINATION
WITH
PREVENTIVE 
LIMITS.—Nothing in this paragraph shall be 
construed to allow a plan to have a deductible 
under the plan apply to benefits described in 
section 2713 of the Public Health Service Act. 
(3) COST-SHARING.—In this title— 
(A) IN GENERAL.—The term ‘‘cost-shar-
ing’’ includes— 
(i) deductibles, coinsurance, copay-
ments, or similar charges; and 
(ii) any other expenditure required of 
an insured individual which is a qualified 
medical expense (within the meaning of 
section 223(d)(2) of the Internal Revenue 
Code of 1986) with respect to essential 
health benefits covered under the plan. 
(B) EXCEPTIONS.—Such term does not in-
clude premiums, balance billing amounts for 
non-network providers, or spending for non-cov-
ered services. 
(4) PREMIUM ADJUSTMENT PERCENTAGE.—For 
purposes of paragraphs (1)(B)(i) and (2)(B)(i), the 
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113 
•AMDT. NO. 2786 
lent to 80 percent of the full actuarial value of 
the benefits provided under the plan. 
(D) PLATINUM
LEVEL.—A plan in the 
platinum level shall provide a level of coverage 
that is designed to provide benefits that are ac-
tuarially equivalent to 90 percent of the full ac-
tuarial value of the benefits provided under the 
plan. 
(2) ACTUARIAL VALUE.— 
(A) 
IN
GENERAL.—Under 
regulations 
issued by the Secretary, the level of coverage of 
a plan shall be determined on the basis that the 
essential health benefits described in subsection 
(b) shall be provided to a standard population 
(and without regard to the population the plan 
may actually provide benefits to). 
(B) 
EMPLOYER
CONTRIBUTIONS.—The 
Secretary may issue regulations under which 
employer contributions to a health savings ac-
count (within the meaning of section 223 of the 
Internal Revenue Code of 1986) may be taken 
into account in determining the level of cov-
erage for a plan of the employer. 
(C) APPLICATION.—In determining under 
this title, the Public Health Service Act, or the 
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114 
•AMDT. NO. 2786 
Internal Revenue Code of 1986 the percentage 
of the total allowed costs of benefits provided 
under a group health plan or health insurance 
coverage that are provided by such plan or cov-
erage, the rules contained in the regulations 
under this paragraph shall apply. 
(3) ALLOWABLE
VARIANCE.—The Secretary 
shall develop guidelines to provide for a de minimis 
variation in the actuarial valuations used in deter-
mining the level of coverage of a plan to account for 
differences in actuarial estimates. 
(4) PLAN REFERENCE.—In this title, any ref-
erence to a bronze, silver, gold, or platinum plan 
shall be treated as a reference to a qualified health 
plan providing a bronze, silver, gold, or platinum 
level of coverage, as the case may be. 
(e) CATASTROPHIC PLAN.— 
(1) IN GENERAL.—A health plan not providing 
a bronze, silver, gold, or platinum level of coverage 
shall be treated as meeting the requirements of sub-
section (d) with respect to any plan year if— 
(A) the only individuals who are eligible to 
enroll in the plan are individuals described in 
paragraph (2); and 
(B) the plan provides— 
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115 
•AMDT. NO. 2786 
(i) except as provided in clause (ii), 
the essential health benefits determined 
under subsection (b), except that the plan 
provides no benefits for any plan year until 
the individual has incurred cost-sharing ex-
penses in an amount equal to the annual 
limitation in effect under subsection (c)(1) 
for the plan year (except as provided for in 
section 2713); and 
(ii) coverage for at least three primary 
care visits. 
(2) INDIVIDUALS
ELIGIBLE
FOR
ENROLL-
MENT.—An individual is described in this paragraph 
for any plan year if the individual— 
(A) has not attained the age of 30 before 
the beginning of the plan year; or 
(B) has a certification in effect for any 
plan year under this title that the individual is 
exempt from the requirement under section 
5000A of the Internal Revenue Code of 1986 
by reason of— 
(i) section 5000A(e)(1) of such Code 
(relating to individuals without affordable 
coverage); or 
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116 
•AMDT. NO. 2786 
(ii) section 5000A(e)(5) of such Code 
(relating to individuals with hardships). 
(3) RESTRICTION TO INDIVIDUAL MARKET.—If 
a health insurance issuer offers a health plan de-
scribed in this subsection, the issuer may only offer 
the plan in the individual market. 
(f) CHILD-ONLY PLANS.—If a qualified health plan 
is offered through the Exchange in any level of coverage 
specified under subsection (d), the issuer shall also offer 
that plan through the Exchange in that level as a plan 
in which the only enrollees are individuals who, as of the 
beginning of a plan year, have not attained the age of 21, 
and such plan shall be treated as a qualified health plan. 
SEC. 1303. SPECIAL RULES. 
(a) SPECIAL RULES RELATING TO COVERAGE OF 
ABORTION SERVICES.— 
(1) VOLUNTARY
CHOICE
OF
COVERAGE
OF 
ABORTION SERVICES.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of this title (or any amendment 
made by this title), and subject to subpara-
graphs (C) and (D)— 
(i) nothing in this title (or any 
amendment made by this title), shall be 
construed to require a qualified health plan 
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117 
•AMDT. NO. 2786 
to provide coverage of services described in 
subparagraph (B)(i) or (B)(ii) as part of 
its essential health benefits for any plan 
year; and 
(ii) the issuer of a qualified health 
plan shall determine whether or not the 
plan provides coverage of services described 
in subparagraph (B)(i) or (B)(ii) as part 
of such benefits for the plan year. 
(B) ABORTION SERVICES.— 
(i) ABORTIONS
FOR
WHICH
PUBLIC 
FUNDING
IS
PROHIBITED.—The services 
described in this clause are abortions for 
which the expenditure of Federal funds ap-
propriated for the Department of Health 
and Human Services is not permitted, 
based on the law as in effect as of the date 
that is 6 months before the beginning of 
the plan year involved. 
(ii) ABORTIONS
FOR
WHICH
PUBLIC 
FUNDING IS ALLOWED.—The services de-
scribed in this clause are abortions for 
which the expenditure of Federal funds ap-
propriated for the Department of Health 
and Human Services is permitted, based 
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118 
•AMDT. NO. 2786 
on the law as in effect as of the date that 
is 6 months before the beginning of the 
plan year involved. 
(C) PROHIBITION
ON
FEDERAL
FUNDS 
FOR
ABORTION
SERVICES
IN
COMMUNITY 
HEALTH INSURANCE OPTION.— 
(i) 
DETERMINATION
BY
SEC-
RETARY.—The Secretary may not deter-
mine, in accordance with subparagraph 
(A)(ii), that the community health insur-
ance option established under section 1323 
shall provide coverage of services described 
in subparagraph (B)(i) as part of benefits 
for the plan year unless the Secretary— 
(I) assures compliance with the 
requirements of paragraph (2); 
(II) assures, in accordance with 
applicable provisions of generally ac-
cepted accounting requirements, circu-
lars on funds management of the Of-
fice of Management and Budget, and 
guidance on accounting of the Govern-
ment Accountability Office, that no 
Federal funds are used for such cov-
erage; and 
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119 
•AMDT. NO. 2786 
(III) 
notwithstanding 
section 
1323(e)(1)(C) or any other provision 
of this title, takes all necessary steps 
to assure that the United States does 
not bear the insurance risk for a com-
munity health insurance option’s cov-
erage of services described in subpara-
graph (B)(i). 
(ii) STATE REQUIREMENT.—If a State 
requires, in addition to the essential health 
benefits required under section 1323(b)(3) 
(A), coverage of services described in sub-
paragraph (B)(i) for enrollees of a commu-
nity health insurance option offered in 
such State, the State shall assure that no 
funds flowing through or from the commu-
nity health insurance option, and no other 
Federal funds, pay or defray the cost of 
providing coverage of services described in 
subparagraph (B)(i). The United States 
shall not bear the insurance risk for a 
State’s required coverage of services de-
scribed in subparagraph (B)(i). 
(iii) EXCEPTIONS.—Nothing in this 
subparagraph shall apply to coverage of 
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120 
•AMDT. NO. 2786 
services described in subparagraph (B)(ii) 
by the community health insurance option. 
Services described in subparagraph (B)(ii) 
shall be covered to the same extent as such 
services are covered under title XIX of the 
Social Security Act. 
(D) ASSURED
AVAILABILITY
OF
VARIED 
COVERAGE THROUGH EXCHANGES.— 
(i) IN GENERAL.—The Secretary shall 
assure that with respect to qualified health 
plans offered in any Exchange established 
pursuant to this title— 
(I) there is at least one such plan 
that provides coverage of services de-
scribed in clauses (i) and (ii) of sub-
paragraph (B); and 
(II) there is at least one such 
plan that does not provide coverage of 
services described in subparagraph 
(B)(i). 
(ii) SPECIAL RULES.—For purposes of 
clause (i)— 
(I) a plan shall be treated as de-
scribed in clause (i)(II) if the plan 
does not provide coverage of services 
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121 
•AMDT. NO. 2786 
described 
in 
either 
subparagraph 
(B)(i) or (B)(ii); and 
(II) if a State has one Exchange 
covering more than 1 insurance mar-
ket, the Secretary shall meet the re-
quirements of clause (i) separately 
with respect to each such market. 
(2) PROHIBITION
ON
THE
USE
OF
FEDERAL 
FUNDS.— 
(A) IN
GENERAL.—If a qualified health 
plan provides coverage of services described in 
paragraph (1)(B)(i), the issuer of the plan shall 
not use any amount attributable to any of the 
following for purposes of paying for such serv-
ices: 
(i) The credit under section 36B of 
the Internal Revenue Code of 1986 (and 
the amount (if any) of the advance pay-
ment of the credit under section 1412 of 
the Patient Protection and Affordable Care 
Act). 
(ii) Any cost-sharing reduction under 
section 1402 of thePatient Protection and 
Affordable Care Act (and the amount (if 
any) of the advance payment of the reduc-
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122 
•AMDT. NO. 2786 
tion under section 1412 of the Patient 
Protection and Affordable Care Act). 
(B) SEGREGATION OF FUNDS.—In the case 
of a plan to which subparagraph (A) applies, 
the issuer of the plan shall, out of amounts not 
described in subparagraph (A), segregate an 
amount equal to the actuarial amounts deter-
mined under subparagraph (C) for all enrollees 
from the amounts described in subparagraph 
(A). 
(C) ACTUARIAL
VALUE
OF
OPTIONAL 
SERVICE COVERAGE.— 
(i) IN GENERAL.—The Secretary shall 
estimate the basic per enrollee, per month 
cost, determined on an average actuarial 
basis, for including coverage under a quali-
fied health plan of the services described in 
paragraph (1)(B)(i). 
(ii) 
CONSIDERATIONS.—In 
making 
such estimate, the Secretary— 
(I) may take into account the im-
pact on overall costs of the inclusion 
of such coverage, but may not take 
into account any cost reduction esti-
mated to result from such services, in-
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123 
•AMDT. NO. 2786 
cluding prenatal care, delivery, or 
postnatal care; 
(II) shall estimate such costs as 
if such coverage were included for the 
entire population covered; and 
(III) may not estimate such a 
cost at less than $1 per enrollee, per 
month. 
(3) PROVIDER CONSCIENCE PROTECTIONS.—No 
individual health care provider or health care facility 
may be discriminated against because of a willing-
ness or an unwillingness, if doing so is contrary to 
the religious or moral beliefs of the provider or facil-
ity, to provide, pay for, provide coverage of, or refer 
for abortions. 
(b) APPLICATION OF STATE AND FEDERAL LAWS 
REGARDING ABORTION.— 
(1) NO PREEMPTION OF STATE LAWS REGARD-
ING ABORTION.—Nothing in this Act shall be con-
strued to preempt or otherwise have any effect on 
State laws regarding the prohibition of (or require-
ment of) coverage, funding, or procedural require-
ments on abortions, including parental notification 
or consent for the performance of an abortion on a 
minor. 
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124 
•AMDT. NO. 2786 
(2) NO EFFECT ON FEDERAL LAWS REGARDING 
ABORTION.— 
(A) IN
GENERAL.—Nothing in this Act 
shall be construed to have any effect on Federal 
laws regarding— 
(i) conscience protection; 
(ii) willingness or refusal to provide 
abortion; and 
(iii) discrimination on the basis of the 
willingness or refusal to provide, pay for, 
cover, or refer for abortion or to provide or 
participate in training to provide abortion. 
(3) NO
EFFECT
ON
FEDERAL
CIVIL
RIGHTS 
LAW.—Nothing in this subsection shall alter the 
rights and obligations of employees and employers 
under title VII of the Civil Rights Act of 1964. 
(c) 
APPLICATION
OF
EMERGENCY
SERVICES 
LAWS.—Nothing in this Act shall be construed to relieve 
any health care provider from providing emergency serv-
ices as required by State or Federal law, including section 
1867 of the Social Security Act (popularly known as 
‘‘EMTALA’’). 
SEC. 1304. RELATED DEFINITIONS. 
(a) DEFINITIONS RELATING TO MARKETS.—In this 
title: 
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125 
•AMDT. NO. 2786 
(1) GROUP MARKET.—The term ‘‘group mar-
ket’’ means the health insurance market under 
which individuals obtain health insurance coverage 
(directly or through any arrangement) on behalf of 
themselves (and their dependents) through a group 
health plan maintained by an employer. 
(2) INDIVIDUAL
MARKET.—The term ‘‘indi-
vidual market’’ means the market for health insur-
ance coverage offered to individuals other than in 
connection with a group health plan. 
(3) LARGE AND SMALL GROUP MARKETS.—The 
terms ‘‘large group market’’ and ‘‘small group mar-
ket’’ mean the health insurance market under which 
individuals obtain health insurance coverage (directly 
or through any arrangement) on behalf of them-
selves (and their dependents) through a group health 
plan maintained by a large employer (as defined in 
subsection (b)(1)) or by a small employer (as defined 
in subsection (b)(2)), respectively. 
(b) EMPLOYERS.—In this title: 
(1) LARGE EMPLOYER.—The term ‘‘large em-
ployer’’ means, in connection with a group health 
plan with respect to a calendar year and a plan year, 
an employer who employed an average of at least 
101 employees on business days during the pre-
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126 
•AMDT. NO. 2786 
ceding calendar year and who employs at least 1 em-
ployee on the first day of the plan year. 
(2) SMALL EMPLOYER.—The term ‘‘small em-
ployer’’ means, in connection with a group health 
plan with respect to a calendar year and a plan year, 
an employer who employed an average of at least 1 
but not more than 100 employees on business days 
during the preceding calendar year and who employs 
at least 1 employee on the first day of the plan year. 
(3) STATE OPTION TO TREAT 50 EMPLOYEES AS 
SMALL.—In the case of plan years beginning before 
January 1, 2016, a State may elect to apply this 
subsection by substituting ‘‘51 employees’’ for ‘‘101 
employees’’ in paragraph (1) and by substituting 
‘‘50 employees’’ for ‘‘100 employees’’ in paragraph 
(2). 
(4) RULES
FOR
DETERMINING
EMPLOYER 
SIZE.—For purposes of this subsection— 
(A) APPLICATION OF AGGREGATION RULE 
FOR EMPLOYERS.—All persons treated as a sin-
gle employer under subsection (b), (c), (m), or 
(o) of section 414 of the Internal Revenue Code 
of 1986 shall be treated as 1 employer. 
(B) EMPLOYERS
NOT
IN
EXISTENCE
IN 
PRECEDING YEAR.—In the case of an employer 
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127 
•AMDT. NO. 2786 
which was not in existence throughout the pre-
ceding calendar year, the determination of 
whether such employer is a small or large em-
ployer shall be based on the average number of 
employees that it is reasonably expected such 
employer will employ on business days in the 
current calendar year. 
(C) PREDECESSORS.—Any reference in 
this subsection to an employer shall include a 
reference to any predecessor of such employer. 
(D) CONTINUATION
OF
PARTICIPATION 
FOR GROWING SMALL EMPLOYERS.—If— 
(i) a qualified employer that is a small 
employer makes enrollment in qualified 
health plans offered in the small group 
market available to its employees through 
an Exchange; and 
(ii) the employer ceases to be a small 
employer by reason of an increase in the 
number of employees of such employer; 
the employer shall continue to be treated as a 
small employer for purposes of this subtitle for 
the period beginning with the increase and end-
ing with the first day on which the employer 
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128 
•AMDT. NO. 2786 
does not make such enrollment available to its 
employees. 
(c) SECRETARY.—In this title, the term ‘‘Secretary’’ 
means the Secretary of Health and Human Services. 
(d) STATE.—In this title, the term ‘‘State’’ means 
each of the 50 States and the District of Columbia. 
PART II—CONSUMER CHOICES AND INSURANCE 
COMPETITION THROUGH HEALTH BENEFIT 
EXCHANGES 
SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT 
PLANS. 
(a) ASSISTANCE TO STATES TO ESTABLISH AMER-
ICAN HEALTH BENEFIT EXCHANGES.— 
(1) 
PLANNING
AND
ESTABLISHMENT 
GRANTS.—There shall be appropriated to the Sec-
retary, out of any moneys in the Treasury not other-
wise appropriated, an amount necessary to enable 
the Secretary to make awards, not later than 1 year 
after the date of enactment of this Act, to States in 
the amount specified in paragraph (2) for the uses 
described in paragraph (3). 
(2) AMOUNT SPECIFIED.—For each fiscal year, 
the Secretary shall determine the total amount that 
the Secretary will make available to each State for 
grants under this subsection. 
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129 
•AMDT. NO. 2786 
(3) USE
OF
FUNDS.—A State shall use 
amounts awarded under this subsection for activities 
(including planning activities) related to establishing 
an American Health Benefit Exchange, as described 
in subsection (b). 
(4) RENEWABILITY OF GRANT.— 
(A) IN GENERAL.—Subject to subsection 
(d)(4), the Secretary may renew a grant award-
ed under paragraph (1) if the State recipient of 
such grant— 
(i) is making progress, as determined 
by the Secretary, toward— 
(I) establishing an Exchange; 
and 
(II) implementing the reforms 
described in subtitles A and C (and 
the amendments made by such sub-
titles); and 
(ii) is meeting such other benchmarks 
as the Secretary may establish. 
(B) LIMITATION.—No grant shall be 
awarded under this subsection after January 1, 
2015. 
(5) TECHNICAL
ASSISTANCE
TO
FACILITATE 
PARTICIPATION
IN
SHOP
EXCHANGES.—The Sec-
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130 
•AMDT. NO. 2786 
retary shall provide technical assistance to States to 
facilitate the participation of qualified small busi-
nesses in such States in SHOP Exchanges. 
(b) AMERICAN HEALTH BENEFIT EXCHANGES.— 
(1) IN GENERAL.—Each State shall, not later 
than January 1, 2014, establish an American Health 
Benefit Exchange (referred to in this title as an 
‘‘Exchange’’) for the State that— 
(A) facilitates the purchase of qualified 
health plans; 
(B) provides for the establishment of a 
Small Business Health Options Program (in 
this title referred to as a ‘‘SHOP Exchange’’) 
that is designed to assist qualified employers in 
the State who are small employers in facili-
tating the enrollment of their employees in 
qualified health plans offered in the small group 
market in the State; and 
(C) meets the requirements of subsection 
(d). 
(2) MERGER
OF
INDIVIDUAL
AND
SHOP
EX-
CHANGES.—A State may elect to provide only one 
Exchange in the State for providing both Exchange 
and SHOP Exchange services to both qualified indi-
viduals and qualified small employers, but only if the 
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131 
•AMDT. NO. 2786 
Exchange has adequate resources to assist such indi-
viduals and employers. 
(c) RESPONSIBILITIES OF THE SECRETARY.— 
(1) IN GENERAL.—The Secretary shall, by reg-
ulation, establish criteria for the certification of 
health plans as qualified health plans. Such criteria 
shall require that, to be certified, a plan shall, at a 
minimum— 
(A) meet marketing requirements, and not 
employ marketing practices or benefit designs 
that have the effect of discouraging the enroll-
ment in such plan by individuals with signifi-
cant health needs; 
(B) ensure a sufficient choice of providers 
(in a manner consistent with applicable network 
adequacy provisions under section 2702(c) of 
the Public Health Service Act), and provide in-
formation to enrollees and prospective enrollees 
on the availability of in-network and out-of-net-
work providers; 
(C) include within health insurance plan 
networks those essential community providers, 
where available, that serve predominately low- 
income, medically-underserved individuals, such 
as health care providers defined in section 
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132 
•AMDT. NO. 2786 
340B(a)(4) of the Public Health Service Act 
and 
providers 
described 
in 
section 
1927(c)(1)(D)(i)(IV) of the Social Security Act 
as set forth by section 221 of Public Law 111- 
8, except that nothing in this subparagraph 
shall be construed to require any health plan to 
provide coverage for any specific medical proce-
dure; 
(D)(i) be accredited with respect to local 
performance on clinical quality measures such 
as the Healthcare Effectiveness Data and Infor-
mation Set, patient experience ratings on a 
standardized 
Consumer 
Assessment 
of 
Healthcare Providers and Systems survey, as 
well as consumer access, utilization manage-
ment, quality assurance, provider credentialing, 
complaints and appeals, network adequacy and 
access, and patient information programs by 
any entity recognized by the Secretary for the 
accreditation of health insurance issuers or 
plans (so long as any such entity has trans-
parent and rigorous methodological and scoring 
criteria); or 
(ii) receive such accreditation within a pe-
riod established by an Exchange for such ac-
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133 
•AMDT. NO. 2786 
creditation that is applicable to all qualified 
health plans; 
(E) implement a quality improvement 
strategy described in subsection (g)(1); 
(F) utilize a uniform enrollment form that 
qualified individuals and qualified employers 
may use (either electronically or on paper) in 
enrolling in qualified health plans offered 
through such Exchange, and that takes into ac-
count criteria that the National Association of 
Insurance Commissioners develops and submits 
to the Secretary; 
(G) utilize the standard format established 
for presenting health benefits plan options; and 
(H) provide information to enrollees and 
prospective enrollees, and to each Exchange in 
which the plan is offered, on any quality meas-
ures for health plan performance endorsed 
under section 399JJ of the Public Health Serv-
ice Act, as applicable. 
(2) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (1)(C) shall be construed to require a 
qualified health plan to contract with a provider de-
scribed in such paragraph if such provider refuses to 
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134 
•AMDT. NO. 2786 
accept the generally applicable payment rates of 
such plan. 
(3) RATING SYSTEM.—The Secretary shall de-
velop a rating system that would rate qualified 
health plans offered through an Exchange in each 
benefits level on the basis of the relative quality and 
price. The Exchange shall include the quality rating 
in the information provided to individuals and em-
ployers through the Internet portal established 
under paragraph (4). 
(4) 
INTERNET
PORTALS.—The 
Secretary 
shall— 
(A) continue to operate, maintain, and up-
date the Internet portal developed under section 
1103(a) and to assist States in developing and 
maintaining their own such portal; and 
(B) make available for use by Exchanges a 
model template for an Internet portal that may 
be used to direct qualified individuals and quali-
fied employers to qualified health plans, to as-
sist such individuals and employers in deter-
mining whether they are eligible to participate 
in an Exchange or eligible for a premium tax 
credit or cost-sharing reduction, and to present 
standardized information (including quality rat-
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135 
•AMDT. NO. 2786 
ings) regarding qualified health plans offered 
through an Exchange to assist consumers in 
making easy health insurance choices. 
Such template shall include, with respect to each 
qualified health plan offered through the Exchange 
in each rating area, access to the uniform outline of 
coverage the plan is required to provide under sec-
tion 2716 of the Public Health Service Act and to 
a copy of the plan’s written policy. 
(5) ENROLLMENT
PERIODS.—The Secretary 
shall require an Exchange to provide for— 
(A) an initial open enrollment, as deter-
mined by the Secretary (such determination to 
be made not later than July 1, 2012); 
(B) annual open enrollment periods, as de-
termined by the Secretary for calendar years 
after the initial enrollment period; 
(C) special enrollment periods specified in 
section 9801 of the Internal Revenue Code of 
1986 and other special enrollment periods 
under circumstances similar to such periods 
under part D of title XVIII of the Social Secu-
rity Act; and 
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136 
•AMDT. NO. 2786 
(D) special monthly enrollment periods for 
Indians (as defined in section 4 of the Indian 
Health Care Improvement Act). 
(d) REQUIREMENTS.— 
(1) IN GENERAL.—An Exchange shall be a gov-
ernmental agency or nonprofit entity that is estab-
lished by a State. 
(2) OFFERING OF COVERAGE.— 
(A) IN
GENERAL.—An Exchange shall 
make available qualified health plans to quali-
fied individuals and qualified employers. 
(B) LIMITATION.— 
(i) IN GENERAL.—An Exchange may 
not make available any health plan that is 
not a qualified health plan. 
(ii) OFFERING OF STAND-ALONE DEN-
TAL BENEFITS.—Each Exchange within a 
State shall allow an issuer of a plan that 
only provides limited scope dental benefits 
meeting 
the 
requirements 
of 
section 
9832(c)(2)(A) of the Internal Revenue 
Code of 1986 to offer the plan through the 
Exchange (either separately or in conjunc-
tion with a qualified health plan) if the 
plan provides pediatric dental benefits 
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137 
•AMDT. NO. 2786 
meeting 
the 
requirements 
of 
section 
1302(b)(1)(J)). 
(3) RULES
RELATING
TO
ADDITIONAL
RE-
QUIRED BENEFITS.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), an Exchange may make 
available a qualified health plan notwith-
standing any provision of law that may require 
benefits other than the essential health benefits 
specified under section 1302(b). 
(B) STATES
MAY
REQUIRE
ADDITIONAL 
BENEFITS.— 
(i) IN GENERAL.—Subject to the re-
quirements of clause (ii), a State may re-
quire that a qualified health plan offered 
in such State offer benefits in addition to 
the essential health benefits specified 
under section 1302(b). 
(ii) STATE
MUST
ASSUME
COST.—A 
State shall make payments to or on behalf 
of an individual eligible for the premium 
tax credit under section 36B of the Inter-
nal Revenue Code of 1986 and any cost- 
sharing reduction under section 1402 to 
defray the cost to the individual of any ad-
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138 
•AMDT. NO. 2786 
ditional benefits described in clause (i) 
which are not eligible for such credit or re-
duction under section 36B(b)(3)(D) of 
such Code and section 1402(c)(4). 
(4) FUNCTIONS.—An Exchange shall, at a min-
imum— 
(A) implement procedures for the certifi-
cation, recertification, and decertification, con-
sistent with guidelines developed by the Sec-
retary under subsection (c), of health plans as 
qualified health plans; 
(B) provide for the operation of a toll-free 
telephone hotline to respond to requests for as-
sistance; 
(C) maintain an Internet website through 
which enrollees and prospective enrollees of 
qualified health plans may obtain standardized 
comparative information on such plans; 
(D) assign a rating to each qualified health 
plan offered through such Exchange in accord-
ance with the criteria developed by the Sec-
retary under subsection (c)(3); 
(E) utilize a standardized format for pre-
senting health benefits plan options in the Ex-
change, including the use of the uniform outline 
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139 
•AMDT. NO. 2786 
of coverage established under section 2715 of 
the Public Health Service Act; 
(F) in accordance with section 1413, in-
form individuals of eligibility requirements for 
the medicaid program under title XIX of the 
Social Security Act, the CHIP program under 
title XXI of such Act, or any applicable State 
or local public program and if through screen-
ing of the application by the Exchange, the Ex-
change determines that such individuals are eli-
gible for any such program, enroll such individ-
uals in such program; 
(G) establish and make available by elec-
tronic means a calculator to determine the ac-
tual cost of coverage after the application of 
any premium tax credit under section 36B of 
the Internal Revenue Code of 1986 and any 
cost-sharing reduction under section 1402; 
(H) subject to section 1411, grant a cer-
tification attesting that, for purposes of the in-
dividual responsibility penalty under section 
5000A of the Internal Revenue Code of 1986, 
an individual is exempt from the individual re-
quirement or from the penalty imposed by such 
section because— 
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140 
•AMDT. NO. 2786 
(i) there is no affordable qualified 
health plan available through the Ex-
change, or the individual’s employer, cov-
ering the individual; or 
(ii) the individual meets the require-
ments for any other such exemption from 
the individual responsibility requirement or 
penalty; 
(I) transfer to the Secretary of the Treas-
ury— 
(i) a list of the individuals who are 
issued a certification under subparagraph 
(H), including the name and taxpayer 
identification number of each individual; 
(ii) the name and taxpayer identifica-
tion number of each individual who was an 
employee of an employer but who was de-
termined to be eligible for the premium tax 
credit under section 36B of the Internal 
Revenue Code of 1986 because— 
(I) the employer did not provide 
minimum essential coverage; or 
(II) the employer provided such 
minimum essential coverage but it 
was 
determined 
under 
section 
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141 
•AMDT. NO. 2786 
36B(c)(2)(C) of such Code to either 
be unaffordable to the employee or 
not provide the required minimum ac-
tuarial value; and 
(iii) the name and taxpayer identifica-
tion number of each individual who notifies 
the Exchange under section 1411(b)(4) 
that they have changed employers and of 
each individual who ceases coverage under 
a qualified health plan during a plan year 
(and the effective date of such cessation); 
(J) provide to each employer the name of 
each employee of the employer described in sub-
paragraph (I)(ii) who ceases coverage under a 
qualified health plan during a plan year (and 
the effective date of such cessation); and 
(K) establish the Navigator program de-
scribed in subsection (i). 
(5) FUNDING LIMITATIONS.— 
(A) NO FEDERAL FUNDS FOR CONTINUED 
OPERATIONS.—In establishing an Exchange 
under this section, the State shall ensure that 
such Exchange is self-sustaining beginning on 
January 1, 2015, including allowing the Ex-
change to charge assessments or user fees to 
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142 
•AMDT. NO. 2786 
participating health insurance issuers, or to 
otherwise generate funding, to support its oper-
ations. 
(B) PROHIBITING
WASTEFUL
USE
OF 
FUNDS.—In carrying out activities under this 
subsection, an Exchange shall not utilize any 
funds intended for the administrative and oper-
ational expenses of the Exchange for staff re-
treats, promotional giveaways, excessive execu-
tive compensation, or promotion of Federal or 
State legislative and regulatory modifications. 
(6) CONSULTATION.—An Exchange shall con-
sult with stakeholders relevant to carrying out the 
activities under this section, including— 
(A) health care consumers who are enroll-
ees in qualified health plans; 
(B) individuals and entities with experience 
in facilitating enrollment in qualified health 
plans; 
(C) representatives of small businesses and 
self-employed individuals; 
(D) State Medicaid offices; and 
(E) advocates for enrolling hard to reach 
populations. 
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143 
•AMDT. NO. 2786 
(7) PUBLICATION
OF
COSTS.—An Exchange 
shall publish the average costs of licensing, regu-
latory fees, and any other payments required by the 
Exchange, and the administrative costs of such Ex-
change, on an Internet website to educate consumers 
on such costs. Such information shall also include 
monies lost to waste, fraud, and abuse. 
(e) CERTIFICATION.— 
(1) IN GENERAL.—An Exchange may certify a 
health plan as a qualified health plan if— 
(A) such health plan meets the require-
ments for certification as promulgated by the 
Secretary under subsection (c)(1); and 
(B) the Exchange determines that making 
available such health plan through such Ex-
change is in the interests of qualified individ-
uals and qualified employers in the State or 
States in which such Exchange operates, except 
that the Exchange may not exclude a health 
plan— 
(i) on the basis that such plan is a 
fee-for-service plan; 
(ii) through the imposition of pre-
mium price controls; or 
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144 
•AMDT. NO. 2786 
(iii) on the basis that the plan pro-
vides treatments necessary to prevent pa-
tients’ deaths in circumstances the Ex-
change determines are inappropriate or too 
costly. 
(2) 
PREMIUM
CONSIDERATIONS.—The 
Ex-
change shall require health plans seeking certifi-
cation as qualified health plans to submit a justifica-
tion for any premium increase prior to implementa-
tion of the increase. Such plans shall prominently 
post such information on their websites. The Ex-
change may take this information, and the informa-
tion and the recommendations provided to the Ex-
change by the State under section 2794(b)(1) of the 
Public Health Service Act (relating to patterns or 
practices of excessive or unjustified premium in-
creases), into consideration when determining wheth-
er to make such health plan available through the 
Exchange. The Exchange shall take into account any 
excess of premium growth outside the Exchange as 
compared to the rate of such growth inside the Ex-
change, including information reported by the 
States. 
(f) FLEXIBILITY.— 
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145 
•AMDT. NO. 2786 
(1) REGIONAL
OR
OTHER
INTERSTATE
EX-
CHANGES.—An Exchange may operate in more than 
one State if— 
(A) each State in which such Exchange op-
erates permits such operation; and 
(B) the Secretary approves such regional 
or interstate Exchange. 
(2) SUBSIDIARY EXCHANGES.—A State may es-
tablish one or more subsidiary Exchanges if— 
(A) each such Exchange serves a geo-
graphically distinct area; and 
(B) the area served by each such Exchange 
is at least as large as a rating area described 
in section 2701(a) of the Public Health Service 
Act. 
(3) AUTHORITY TO CONTRACT.— 
(A) IN GENERAL.—A State may elect to 
authorize an Exchange established by the State 
under this section to enter into an agreement 
with an eligible entity to carry out 1 or more 
responsibilities of the Exchange. 
(B) ELIGIBLE
ENTITY.—In this para-
graph, the term ‘‘eligible entity’’ means— 
(i) a person— 
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146 
•AMDT. NO. 2786 
(I) incorporated under, and sub-
ject to the laws of, 1 or more States; 
(II) that has demonstrated expe-
rience on a State or regional basis in 
the individual and small group health 
insurance markets and in benefits cov-
erage; and 
(III) that is not a health insur-
ance issuer or that is treated under 
subsection (a) or (b) of section 52 of 
the Internal Revenue Code of 1986 as 
a member of the same controlled 
group of corporations (or under com-
mon control with) as a health insur-
ance issuer; or 
(ii) the State medicaid agency under 
title XIX of the Social Security Act. 
(g) REWARDING
QUALITY
THROUGH
MARKET- 
BASED INCENTIVES.— 
(1) STRATEGY
DESCRIBED.—A strategy de-
scribed in this paragraph is a payment structure 
that provides increased reimbursement or other in-
centives for— 
(A) improving health outcomes through the 
implementation of activities that shall include 
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147 
•AMDT. NO. 2786 
quality reporting, effective case management, 
care coordination, chronic disease management, 
medication and care compliance initiatives, in-
cluding through the use of the medical home 
model, for treatment or services under the plan 
or coverage; 
(B) the implementation of activities to pre-
vent hospital readmissions through a com-
prehensive program for hospital discharge that 
includes patient-centered education and coun-
seling, comprehensive discharge planning, and 
post discharge reinforcement by an appropriate 
health care professional; 
(C) the implementation of activities to im-
prove patient safety and reduce medical errors 
through the appropriate use of best clinical 
practices, evidence based medicine, and health 
information technology under the plan or cov-
erage; and 
(D) the implementation of wellness and 
health promotion activities. 
(2) GUIDELINES.—The Secretary, in consulta-
tion with experts in health care quality and stake-
holders, shall develop guidelines concerning the mat-
ters described in paragraph (1). 
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148 
•AMDT. NO. 2786 
(3) REQUIREMENTS.—The guidelines developed 
under paragraph (2) shall require the periodic re-
porting to the applicable Exchange of the activities 
that a qualified health plan has conducted to imple-
ment a strategy described in paragraph (1). 
(h) QUALITY IMPROVEMENT.— 
(1) ENHANCING PATIENT SAFETY.—Beginning 
on January 1, 2015, a qualified health plan may 
contract with— 
(A) a hospital with greater than 50 beds 
only if such hospital— 
(i) utilizes a patient safety evaluation 
system as described in part C of title IX 
of the Public Health Service Act; and 
(ii) implements a mechanism to en-
sure that each patient receives a com-
prehensive program for hospital discharge 
that includes patient-centered education 
and counseling, comprehensive discharge 
planning, and post discharge reinforcement 
by an appropriate health care professional; 
or 
(B) a health care provider only if such pro-
vider implements such mechanisms to improve 
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149 
•AMDT. NO. 2786 
health care quality as the Secretary may by reg-
ulation require. 
(2) EXCEPTIONS.—The Secretary may establish 
reasonable exceptions to the requirements described 
in paragraph (1). 
(3) ADJUSTMENT.—The Secretary may by reg-
ulation adjust the number of beds described in para-
graph (1)(A). 
(i) NAVIGATORS.— 
(1) IN GENERAL.—An Exchange shall establish 
a program under which it awards grants to entities 
described in paragraph (2) to carry out the duties 
described in paragraph (3). 
(2) ELIGIBILITY.— 
(A) IN GENERAL.—To be eligible to receive 
a grant under paragraph (1), an entity shall 
demonstrate to the Exchange involved that the 
entity has existing relationships, or could read-
ily establish relationships, with employers and 
employees, consumers (including uninsured and 
underinsured consumers), or self-employed indi-
viduals likely to be qualified to enroll in a quali-
fied health plan. 
(B) TYPES.—Entities described in sub-
paragraph (A) may include trade, industry, and 
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150 
•AMDT. NO. 2786 
professional associations, commercial fishing in-
dustry organizations, ranching and farming or-
ganizations, community and consumer-focused 
nonprofit groups, chambers of commerce, 
unions, small business development centers, 
other licensed insurance agents and brokers, 
and other entities that— 
(i) are capable of carrying out the du-
ties described in paragraph (3); 
(ii) meet the standards described in 
paragraph (4); and 
(iii) provide information consistent 
with the standards developed under para-
graph (5). 
(3) DUTIES.—An entity that serves as a navi-
gator under a grant under this subsection shall— 
(A) conduct public education activities to 
raise awareness of the availability of qualified 
health plans; 
(B) distribute fair and impartial informa-
tion concerning enrollment in qualified health 
plans, and the availability of premium tax cred-
its under section 36B of the Internal Revenue 
Code of 1986 and cost-sharing reductions under 
section 1402; 
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151 
•AMDT. NO. 2786 
(C) facilitate enrollment in qualified health 
plans; 
(D) provide referrals to any applicable of-
fice of health insurance consumer assistance or 
health insurance ombudsman established under 
section 2793 of the Public Health Service Act, 
or any other appropriate State agency or agen-
cies, for any enrollee with a grievance, com-
plaint, or question regarding their health plan, 
coverage, or a determination under such plan or 
coverage; and 
(E) provide information in a manner that 
is culturally and linguistically appropriate to 
the needs of the population being served by the 
Exchange or Exchanges. 
(4) STANDARDS.— 
(A) IN GENERAL.—The Secretary shall es-
tablish standards for navigators under this sub-
section, including provisions to ensure that any 
private or public entity that is selected as a 
navigator is qualified, and licensed if appro-
priate, to engage in the navigator activities de-
scribed in this subsection and to avoid conflicts 
of interest. Under such standards, a navigator 
shall not— 
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152 
•AMDT. NO. 2786 
(i) be a health insurance issuer; or 
(ii) receive any consideration directly 
or indirectly from any health insurance 
issuer in connection with the enrollment of 
any qualified individuals or employees of a 
qualified employer in a qualified health 
plan. 
(5) FAIR AND IMPARTIAL INFORMATION AND 
SERVICES.—The Secretary, in collaboration with 
States, shall develop standards to ensure that infor-
mation made available by navigators is fair, accu-
rate, and impartial. 
(6) FUNDING.—Grants under this subsection 
shall be made from the operational funds of the Ex-
change and not Federal funds received by the State 
to establish the Exchange. 
(j) APPLICABILITY OF MENTAL HEALTH PARITY.— 
Section 2726 of the Public Health Service Act shall apply 
to qualified health plans in the same manner and to the 
same extent as such section applies to health insurance 
issuers and group health plans. 
(k) CONFLICT.—An Exchange may not establish 
rules that conflict with or prevent the application of regu-
lations promulgated by the Secretary under this subtitle. 
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153 
•AMDT. NO. 2786 
SEC. 1312. CONSUMER CHOICE. 
(a) CHOICE.— 
(1) QUALIFIED INDIVIDUALS.—A qualified indi-
vidual may enroll in any qualified health plan avail-
able to such individual. 
(2) QUALIFIED EMPLOYERS.— 
(A) EMPLOYER MAY SPECIFY LEVEL.—A 
qualified employer may provide support for cov-
erage of employees under a qualified health 
plan by selecting any level of coverage under 
section 1302(d) to be made available to employ-
ees through an Exchange. 
(B) EMPLOYEE MAY CHOOSE PLANS WITH-
IN A LEVEL.—Each employee of a qualified em-
ployer that elects a level of coverage under sub-
paragraph (A) may choose to enroll in a quali-
fied health plan that offers coverage at that 
level. 
(b) PAYMENT OF PREMIUMS BY QUALIFIED INDIVID-
UALS.—A qualified individual enrolled in any qualified 
health plan may pay any applicable premium owed by such 
individual to the health insurance issuer issuing such 
qualified health plan. 
(c) SINGLE RISK POOL.— 
(1) INDIVIDUAL MARKET.—A health insurance 
issuer shall consider all enrollees in all health plans 
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154 
•AMDT. NO. 2786 
(other than grandfathered health plans) offered by 
such issuer in the individual market, including those 
enrollees who do not enroll in such plans through 
the Exchange, to be members of a single risk pool. 
(2) SMALL GROUP MARKET.—A health insur-
ance issuer shall consider all enrollees in all health 
plans (other than grandfathered health plans) of-
fered by such issuer in the small group market, in-
cluding those enrollees who do not enroll in such 
plans through the Exchange, to be members of a 
single risk pool. 
(3) MERGER OF MARKETS.—A State may re-
quire the individual and small group insurance mar-
kets within a State to be merged if the State deter-
mines appropriate. 
(4) STATE LAW.—A State law requiring grand-
fathered health plans to be included in a pool de-
scribed in paragraph (1) or (2) shall not apply. 
(d) EMPOWERING CONSUMER CHOICE.— 
(1) CONTINUED OPERATION OF MARKET OUT-
SIDE
EXCHANGES.—Nothing in this title shall be 
construed to prohibit— 
(A) a health insurance issuer from offering 
outside of an Exchange a health plan to a 
qualified individual or qualified employer; and 
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155 
•AMDT. NO. 2786 
(B) a qualified individual from enrolling in, 
or a qualified employer from selecting for its 
employees, a health plan offered outside of an 
Exchange. 
(2) CONTINUED OPERATION OF STATE BENEFIT 
REQUIREMENTS.—Nothing in this title shall be con-
strued to terminate, abridge, or limit the operation 
of any requirement under State law with respect to 
any policy or plan that is offered outside of an Ex-
change to offer benefits. 
(3) VOLUNTARY NATURE OF AN EXCHANGE.— 
(A) CHOICE TO ENROLL OR NOT TO EN-
ROLL.—Nothing in this title shall be construed 
to restrict the choice of a qualified individual to 
enroll or not to enroll in a qualified health plan 
or to participate in an Exchange. 
(B) PROHIBITION
AGAINST
COMPELLED 
ENROLLMENT.—Nothing in this title shall be 
construed to compel an individual to enroll in a 
qualified health plan or to participate in an Ex-
change. 
(C) INDIVIDUALS ALLOWED TO ENROLL IN 
ANY PLAN.—A qualified individual may enroll 
in any qualified health plan, except that in the 
case of a catastrophic plan described in section 
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156 
•AMDT. NO. 2786 
1302(e), a qualified individual may enroll in the 
plan only if the individual is eligible to enroll in 
the plan under section 1302(e)(2). 
(D) MEMBERS OF CONGRESS IN THE EX-
CHANGE.— 
(i) REQUIREMENT.—Notwithstanding 
any other provision of law, after the effec-
tive date of this subtitle, the only health 
plans that the Federal Government may 
make available to Members of Congress 
and congressional staff with respect to 
their service as a Member of Congress or 
congressional staff shall be health plans 
that are— 
(I) created under this Act (or an 
amendment made by this Act); or 
(II) offered through an Exchange 
established under this Act (or an 
amendment made by this Act). 
(ii) DEFINITIONS.—In this section: 
(I) MEMBER
OF
CONGRESS.— 
The term ‘‘Member of Congress’’ 
means any member of the House of 
Representatives or the Senate. 
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157 
•AMDT. NO. 2786 
(II) CONGRESSIONAL
STAFF.— 
The term ‘‘congressional staff’’ means 
all full-time and part-time employees 
employed by the official office of a 
Member of Congress, whether in 
Washington, DC or outside of Wash-
ington, DC. 
(4) NO PENALTY FOR TRANSFERRING TO MIN-
IMUM ESSENTIAL COVERAGE OUTSIDE EXCHANGE.— 
An Exchange, or a qualified health plan offered 
through an Exchange, shall not impose any penalty 
or other fee on an individual who cancels enrollment 
in a plan because the individual becomes eligible for 
minimum essential coverage (as defined in section 
5000A(f) of the Internal Revenue Code of 1986 
without regard to paragraph (1)(C) or (D) thereof) 
or such coverage becomes affordable (within the 
meaning of section 36B(c)(2)(C) of such Code). 
(e) ENROLLMENT
THROUGH
AGENTS
OR
BRO-
KERS.—The Secretary shall establish procedures under 
which a State may allow agents or brokers— 
(1) to enroll individuals in any qualified health 
plans in the individual or small group market as 
soon as the plan is offered through an Exchange in 
the State; and 
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158 
•AMDT. NO. 2786 
(2) to assist individuals in applying for pre-
mium tax credits and cost-sharing reductions for 
plans sold through an Exchange. 
Such procedures may include the establishment of rate 
schedules for broker commissions paid by health benefits 
plans offered through an exchange. 
(f) QUALIFIED INDIVIDUALS AND EMPLOYERS; AC-
CESS LIMITED TO CITIZENS AND LAWFUL RESIDENTS.— 
(1) QUALIFIED INDIVIDUALS.—In this title: 
(A) IN GENERAL.—The term ‘‘qualified in-
dividual’’ means, with respect to an Exchange, 
an individual who— 
(i) is seeking to enroll in a qualified 
health plan in the individual market of-
fered through the Exchange; and 
(ii) resides in the State that estab-
lished the Exchange (except with respect to 
territorial 
agreements 
under 
section 
1312(f)). 
(B) 
INCARCERATED
INDIVIDUALS
EX-
CLUDED.—An individual shall not be treated as 
a qualified individual if, at the time of enroll-
ment, the individual is incarcerated, other than 
incarceration 
pending 
the 
disposition 
of 
charges. 
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•AMDT. NO. 2786 
(2) QUALIFIED EMPLOYER.—In this title: 
(A) IN
GENERAL.—The term ‘‘qualified 
employer’’ means a small employer that elects 
to make all full-time employees of such em-
ployer eligible for 1 or more qualified health 
plans offered in the small group market 
through an Exchange that offers qualified 
health plans. 
(B) EXTENSION TO LARGE GROUPS.— 
(i) IN GENERAL.—Beginning in 2017, 
each State may allow issuers of health in-
surance coverage in the large group mar-
ket in the State to offer qualified health 
plans in such market through an Ex-
change. Nothing in this subparagraph shall 
be construed as requiring the issuer to 
offer such plans through an Exchange. 
(ii) LARGE EMPLOYERS ELIGIBLE.—If 
a State under clause (i) allows issuers to 
offer qualified health plans in the large 
group market through an Exchange, the 
term ‘‘qualified employer’’ shall include a 
large employer that elects to make all full- 
time employees of such employer eligible 
for 1 or more qualified health plans offered 
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160 
•AMDT. NO. 2786 
in the large group market through the Ex-
change. 
(3) ACCESS LIMITED TO LAWFUL RESIDENTS.— 
If an individual is not, or is not reasonably expected 
to be for the entire period for which enrollment is 
sought, a citizen or national of the United States or 
an alien lawfully present in the United States, the 
individual shall not be treated as a qualified indi-
vidual and may not be covered under a qualified 
health plan in the individual market that is offered 
through an Exchange. 
SEC. 1313. FINANCIAL INTEGRITY. 
(a) ACCOUNTING FOR EXPENDITURES.— 
(1) IN GENERAL.—An Exchange shall keep an 
accurate accounting of all activities, receipts, and ex-
penditures and shall annually submit to the Sec-
retary a report concerning such accountings. 
(2) INVESTIGATIONS.—The Secretary, in co-
ordination with the Inspector General of the Depart-
ment of Health and Human Services, may inves-
tigate the affairs of an Exchange, may examine the 
properties and records of an Exchange, and may re-
quire periodic reports in relation to activities under-
taken by an Exchange. An Exchange shall fully co-
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161 
•AMDT. NO. 2786 
operate in any investigation conducted under this 
paragraph. 
(3) AUDITS.—An Exchange shall be subject to 
annual audits by the Secretary. 
(4) PATTERN OF ABUSE.—If the Secretary de-
termines that an Exchange or a State has engaged 
in serious misconduct with respect to compliance 
with the requirements of, or carrying out of activi-
ties required under, this title, the Secretary may re-
scind from payments otherwise due to such State in-
volved under this or any other Act administered by 
the Secretary an amount not to exceed 1 percent of 
such payments per year until corrective actions are 
taken by the State that are determined to be ade-
quate by the Secretary. 
(5) 
PROTECTIONS
AGAINST
FRAUD
AND 
ABUSE.—With respect to activities carried out under 
this title, the Secretary shall provide for the efficient 
and non-discriminatory administration of Exchange 
activities and implement any measure or procedure 
that— 
(A) the Secretary determines is appro-
priate to reduce fraud and abuse in the admin-
istration of this title; and 
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•AMDT. NO. 2786 
(B) the Secretary has authority to imple-
ment under this title or any other Act. 
(6) APPLICATION
OF
THE
FALSE
CLAIMS 
ACT.— 
(A) IN
GENERAL.—Payments made by, 
through, or in connection with an Exchange are 
subject to the False Claims Act (31 U.S.C. 
3729 et seq.) if those payments include any 
Federal funds. Compliance with the require-
ments of this Act concerning eligibility for a 
health insurance issuer to participate in the Ex-
change shall be a material condition of an 
issuer’s entitlement to receive payments, includ-
ing payments of premium tax credits and cost- 
sharing reductions, through the Exchange. 
(B) 
DAMAGES.—Notwithstanding 
para-
graph (1) of section 3729(a) of title 31, United 
States Code, and subject to paragraph (2) of 
such section, the civil penalty assessed under 
the False Claims Act on any person found liable 
under such Act as described in subparagraph 
(A) shall be increased by not less than 3 times 
and not more than 6 times the amount of dam-
ages which the Government sustains because of 
the act of that person. 
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163 
•AMDT. NO. 2786 
(b) GAO OVERSIGHT.—Not later than 5 years after 
the first date on which Exchanges are required to be oper-
ational under this title, the Comptroller General shall con-
duct an ongoing study of Exchange activities and the en-
rollees in qualified health plans offered through Ex-
changes. Such study shall review— 
(1) the operations and administration of Ex-
changes, including surveys and reports of qualified 
health plans offered through Exchanges and on the 
experience of such plans (including data on enrollees 
in Exchanges and individuals purchasing health in-
surance coverage outside of Exchanges), the ex-
penses of Exchanges, claims statistics relating to 
qualified health plans, complaints data relating to 
such plans, and the manner in which Exchanges 
meet their goals; 
(2) any significant observations regarding the 
utilization and adoption of Exchanges; 
(3) where appropriate, recommendations for im-
provements in the operations or policies of Ex-
changes; and 
(4) how many physicians, by area and specialty, 
are not taking or accepting new patients enrolled in 
Federal Government health care programs, and the 
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164 
•AMDT. NO. 2786 
adequacy of provider networks of Federal Govern-
ment health care programs. 
PART III—STATE FLEXIBILITY RELATING TO 
EXCHANGES 
SEC. 1321. STATE FLEXIBILITY IN OPERATION AND EN-
FORCEMENT OF EXCHANGES AND RELATED 
REQUIREMENTS. 
(a) ESTABLISHMENT OF STANDARDS.— 
(1) IN GENERAL.—The Secretary shall, as soon 
as practicable after the date of enactment of this 
Act, issue regulations setting standards for meeting 
the requirements under this title, and the amend-
ments made by this title, with respect to— 
(A) the establishment and operation of Ex-
changes (including SHOP Exchanges); 
(B) the offering of qualified health plans 
through such Exchanges; 
(C) the establishment of the reinsurance 
and risk adjustment programs under part V; 
and 
(D) such other requirements as the Sec-
retary determines appropriate. 
The preceding sentence shall not apply to standards 
for requirements under subtitles A and C (and the 
amendments made by such subtitles) for which the 
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165 
•AMDT. NO. 2786 
Secretary issues regulations under the Public Health 
Service Act. 
(2) CONSULTATION.—In issuing the regulations 
under paragraph (1), the Secretary shall consult 
with the National Association of Insurance Commis-
sioners and its members and with health insurance 
issuers, consumer organizations, and such other in-
dividuals as the Secretary selects in a manner de-
signed to ensure balanced representation among in-
terested parties. 
(b) STATE ACTION.—Each State that elects, at such 
time and in such manner as the Secretary may prescribe, 
to apply the requirements described in subsection (a) 
shall, not later than January 1, 2014, adopt and have in 
effect— 
(1) the Federal standards established under 
subsection (a); or 
(2) a State law or regulation that the Secretary 
determines implements the standards within the 
State. 
(c) FAILURE TO ESTABLISH EXCHANGE OR IMPLE-
MENT REQUIREMENTS.— 
(1) IN GENERAL.—If— 
(A) a State is not an electing State under 
subsection (b); or 
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166 
•AMDT. NO. 2786 
(B) the Secretary determines, on or before 
January 1, 2013, that an electing State— 
(i) will not have any required Ex-
change operational by January 1, 2014; or 
(ii) has not taken the actions the Sec-
retary determines necessary to imple-
ment— 
(I) the other requirements set 
forth in the standards under sub-
section (a); or 
(II) the requirements set forth in 
subtitles A and C and the amend-
ments made by such subtitles; 
the Secretary shall (directly or through agreement 
with a not-for-profit entity) establish and operate 
such Exchange within the State and the Secretary 
shall take such actions as are necessary to imple-
ment such other requirements. 
(2) ENFORCEMENT
AUTHORITY.—The provi-
sions of section 2736(b) of the Public Health Serv-
ices Act shall apply to the enforcement under para-
graph (1) of requirements of subsection (a)(1) (with-
out regard to any limitation on the application of 
those provisions to group health plans). 
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167 
•AMDT. NO. 2786 
(d) NO INTERFERENCE WITH STATE REGULATORY 
AUTHORITY.—Nothing in this title shall be construed to 
preempt any State law that does not prevent the applica-
tion of the provisions of this title. 
(e) PRESUMPTION FOR CERTAIN STATE-OPERATED 
EXCHANGES.— 
(1) IN GENERAL.—In the case of a State oper-
ating an Exchange before January 1, 2010, and 
which has insured a percentage of its population not 
less than the percentage of the population projected 
to be covered nationally after the implementation of 
this Act, that seeks to operate an Exchange under 
this section, the Secretary shall presume that such 
Exchange meets the standards under this section 
unless the Secretary determines, after completion of 
the process established under paragraph (2), that 
the Exchange does not comply with such standards. 
(2) PROCESS.—The Secretary shall establish a 
process to work with a State described in paragraph 
(1) to provide assistance necessary to assist the 
State’s Exchange in coming into compliance with the 
standards for approval under this section. 
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168 
•AMDT. NO. 2786 
SEC. 1322. FEDERAL PROGRAM TO ASSIST ESTABLISHMENT 
AND OPERATION OF NONPROFIT, MEMBER- 
RUN HEALTH INSURANCE ISSUERS. 
(a) ESTABLISHMENT OF PROGRAM.— 
(1) IN GENERAL.—The Secretary shall establish 
a program to carry out the purposes of this section 
to be known as the Consumer Operated and Ori-
ented Plan (CO-OP) program. 
(2) PURPOSE.—It is the purpose of the CO-OP 
program to foster the creation of qualified nonprofit 
health insurance issuers to offer qualified health 
plans in the individual and small group markets in 
the States in which the issuers are licensed to offer 
such plans. 
(b) LOANS AND GRANTS UNDER THE CO-OP PRO-
GRAM.— 
(1) IN GENERAL.—The Secretary shall provide 
through the CO-OP program for the awarding to 
persons applying to become qualified nonprofit 
health insurance issuers of— 
(A) loans to provide assistance to such per-
son in meeting its start-up costs; and 
(B) grants to provide assistance to such 
person in meeting any solvency requirements of 
States in which the person seeks to be licensed 
to issue qualified health plans. 
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169 
•AMDT. NO. 2786 
(2) REQUIREMENTS FOR AWARDING LOANS AND 
GRANTS.— 
(A) IN GENERAL.—In awarding loans and 
grants under the CO-OP program, the Sec-
retary shall— 
(i) take into account the recommenda-
tions of the advisory board established 
under paragraph (3); 
(ii) give priority to applicants that will 
offer qualified health plans on a Statewide 
basis, will utilize integrated care models, 
and have significant private support; and 
(iii) ensure that there is sufficient 
funding to establish at least 1 qualified 
nonprofit health insurance issuer in each 
State, except that nothing in this clause 
shall prohibit the Secretary from funding 
the establishment of multiple qualified 
nonprofit health insurance issuers in any 
State if the funding is sufficient to do so. 
(B) STATES
WITHOUT
ISSUERS
IN
PRO-
GRAM.—If no health insurance issuer applies to 
be a qualified nonprofit health insurance issuer 
within a State, the Secretary may use amounts 
appropriated under this section for the award-
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170 
•AMDT. NO. 2786 
ing of grants to encourage the establishment of 
a qualified nonprofit health insurance issuer 
within the State or the expansion of a qualified 
nonprofit health insurance issuer from another 
State to the State. 
(C) AGREEMENT.— 
(i) IN GENERAL.—The Secretary shall 
require any person receiving a loan or 
grant under the CO-OP program to enter 
into an agreement with the Secretary 
which requires such person to meet (and to 
continue to meet)— 
(I) any requirement under this 
section for such person to be treated 
as a qualified nonprofit health insur-
ance issuer; and 
(II) any requirements contained 
in the agreement for such person to 
receive such loan or grant. 
(ii) RESTRICTIONS ON USE OF FED-
ERAL
FUNDS.—The agreement shall in-
clude a requirement that no portion of the 
funds made available by any loan or grant 
under this section may be used— 
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171 
•AMDT. NO. 2786 
(I) for carrying on propaganda, 
or otherwise attempting, to influence 
legislation; or 
(II) for marketing. 
Nothing in this clause shall be construed 
to allow a person to take any action pro-
hibited by section 501(c)(29) of the Inter-
nal Revenue Code of 1986. 
(iii) FAILURE
TO
MEET
REQUIRE-
MENTS.—If the Secretary determines that 
a person has failed to meet any require-
ment described in clause (i) or (ii) and has 
failed to correct such failure within a rea-
sonable period of time of when the person 
first knows (or reasonably should have 
known) of such failure, such person shall 
repay to the Secretary an amount equal to 
the sum of— 
(I) 110 percent of the aggregate 
amount of loans and grants received 
under this section; plus 
(II) interest on the aggregate 
amount of loans and grants received 
under this section for the period the 
loans or grants were outstanding. 
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172 
•AMDT. NO. 2786 
The Secretary shall notify the Secretary of 
the Treasury of any determination under 
this section of a failure that results in the 
termination of an issuer’s tax-exempt sta-
tus under section 501(c)(29) of such Code. 
(D) TIME
FOR
AWARDING
LOANS
AND 
GRANTS.—The Secretary shall not later than 
July 1, 2013, award the loans and grants under 
the CO-OP program and begin the distribution 
of amounts awarded under such loans and 
grants. 
(3) ADVISORY BOARD.— 
(A) IN
GENERAL.—The advisory board 
under this paragraph shall consist of 15 mem-
bers appointed by the Comptroller General of 
the United States from among individuals with 
qualifications described in section 1805(c)(2) of 
the Social Security Act. 
(B) 
RULES
RELATING
TO
APPOINT-
MENTS.— 
(i) STANDARDS.—Any individual ap-
pointed under subparagraph (A) shall meet 
ethics and conflict of interest standards 
protecting against insurance industry in-
volvement and interference. 
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173 
•AMDT. NO. 2786 
(ii) ORIGINAL
APPOINTMENTS.—The 
original appointment of board members 
under subparagraph (A)(ii) shall be made 
no later than 3 months after the date of 
enactment of this Act. 
(C) VACANCY.—Any vacancy on the advi-
sory board shall be filled in the same manner 
as the original appointment. 
(D) PAY AND REIMBURSEMENT.— 
(i) NO COMPENSATION FOR MEMBERS 
OF ADVISORY BOARD.—Except as provided 
in clause (ii), a member of the advisory 
board may not receive pay, allowances, or 
benefits by reason of their service on the 
board. 
(ii) TRAVEL EXPENSES.—Each mem-
ber shall receive travel expenses, including 
per diem in lieu of subsistence under sub-
chapter I of chapter 57 of title 5, United 
States Code. 
(E) APPLICATION OF FACA.—The Federal 
Advisory Committee Act (5 U.S.C. App.) shall 
apply to the advisory board, except that section 
14 of such Act shall not apply. 
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174 
•AMDT. NO. 2786 
(F) TERMINATION.—The advisory board 
shall terminate on the earlier of the date that 
it completes its duties under this section or De-
cember 31, 2015. 
(c) QUALIFIED NONPROFIT HEALTH INSURANCE 
ISSUER.—For purposes of this section— 
(1) IN
GENERAL.—The term ‘‘qualified non-
profit health insurance issuer’’ means a health insur-
ance issuer that is an organization— 
(A) that is organized under State law as a 
nonprofit, member corporation; 
(B) substantially all of the activities of 
which consist of the issuance of qualified health 
plans in the individual and small group markets 
in each State in which it is licensed to issue 
such plans; and 
(C) that meets the other requirements of 
this subsection. 
(2) CERTAIN
ORGANIZATIONS
PROHIBITED.— 
An organization shall not be treated as a qualified 
nonprofit health insurance issuer if— 
(A) the organization or a related entity (or 
any predecessor of either) was a health insur-
ance issuer on July 16, 2009; or 
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175 
•AMDT. NO. 2786 
(B) the organization is sponsored by a 
State or local government, any political subdivi-
sion thereof, or any instrumentality of such 
government or political subdivision. 
(3) GOVERNANCE REQUIREMENTS.—An organi-
zation shall not be treated as a qualified nonprofit 
health insurance issuer unless— 
(A) the governance of the organization is 
subject to a majority vote of its members; 
(B) its governing documents incorporate 
ethics and conflict of interest standards pro-
tecting against insurance industry involvement 
and interference; and 
(C) as provided in regulations promulgated 
by the Secretary, the organization is required to 
operate with a strong consumer focus, including 
timeliness, responsiveness, and accountability to 
members. 
(4) PROFITS
INURE
TO
BENEFIT
OF
MEM-
BERS.—An organization shall not be treated as a 
qualified nonprofit health insurance issuer unless 
any profits made by the organization are required to 
be used to lower premiums, to improve benefits, or 
for other programs intended to improve the quality 
of health care delivered to its members. 
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176 
•AMDT. NO. 2786 
(5) COMPLIANCE
WITH
STATE
INSURANCE 
LAWS.—An organization shall not be treated as a 
qualified nonprofit health insurance issuer unless the 
organization meets all the requirements that other 
issuers of qualified health plans are required to meet 
in any State where the issuer offers a qualified 
health plan, including solvency and licensure require-
ments, rules on payments to providers, and compli-
ance with network adequacy rules, rate and form fil-
ing rules, any applicable State premium assessments 
and any other State law described in section 
1324(b). 
(6) COORDINATION
WITH
STATE
INSURANCE 
REFORMS.—An organization shall not be treated as 
a qualified nonprofit health insurance issuer unless 
the organization does not offer a health plan in a 
State until that State has in effect (or the Secretary 
has implemented for the State) the market reforms 
required by part A of title XXVII of the Public 
Health Service Act (as amended by subtitles A and 
C of this Act). 
(d) ESTABLISHMENT
OF
PRIVATE
PURCHASING 
COUNCIL.— 
(1) IN
GENERAL.—Qualified nonprofit health 
insurance issuers participating in the CO-OP pro-
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177 
•AMDT. NO. 2786 
gram under this section may establish a private pur-
chasing council to enter into collective purchasing 
arrangements for items and services that increase 
administrative and other cost efficiencies, including 
claims administration, administrative services, health 
information technology, and actuarial services. 
(2) COUNCIL MAY NOT SET PAYMENT RATES.— 
The private purchasing council established under 
paragraph (1) shall not set payment rates for health 
care facilities or providers participating in health in-
surance coverage provided by qualified nonprofit 
health insurance issuers. 
(3) CONTINUED
APPLICATION
OF
ANTITRUST 
LAWS.— 
(A) IN GENERAL.—Nothing in this section 
shall be construed to limit the application of the 
antitrust laws to any private purchasing council 
(whether or not established under this sub-
section) or to any qualified nonprofit health in-
surance issuer participating in such a council. 
(B) ANTITRUST LAWS.—For purposes of 
this subparagraph, the term ‘‘antitrust laws’’ 
has the meaning given the term in subsection 
(a) of the first section of the Clayton Act (15 
U.S.C. 12(a)). Such term also includes section 
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178 
•AMDT. NO. 2786 
5 of the Federal Trade Commission Act (15 
U.S.C. 45) to the extent that such section 5 ap-
plies to unfair methods of competition. 
(e) LIMITATION ON PARTICIPATION.—No representa-
tive of any Federal, State, or local government (or of any 
political subdivision or instrumentality thereof), and no 
representative of a person described in subsection 
(c)(2)(A), may serve on the board of directors of a quali-
fied nonprofit health insurance issuer or with a private 
purchasing council established under subsection (d). 
(f) LIMITATIONS ON SECRETARY.— 
(1) IN GENERAL.—The Secretary shall not— 
(A) participate in any negotiations between 
1 or more qualified nonprofit health insurance 
issuers (or a private purchasing council estab-
lished under subsection (d)) and any health 
care facilities or providers, including any drug 
manufacturer, pharmacy, or hospital; and 
(B) establish or maintain a price structure 
for reimbursement of any health benefits cov-
ered by such issuers. 
(2) COMPETITION.—Nothing in this section 
shall be construed as authorizing the Secretary to 
interfere with the competitive nature of providing 
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179 
•AMDT. NO. 2786 
health benefits through qualified nonprofit health in-
surance issuers. 
(g) APPROPRIATIONS.—There are hereby appro-
priated, out of any funds in the Treasury not otherwise 
appropriated, $6,000,000,000 to carry out this section. 
(h) TAX EXEMPTION FOR QUALIFIED NONPROFIT 
HEALTH INSURANCE ISSUER.— 
(1) IN GENERAL.—Section 501(c) of the Inter-
nal Revenue Code of 1986 (relating to list of exempt 
organizations) is amended by adding at the end the 
following: 
‘‘(29) CO-OP HEALTH INSURANCE ISSUERS.— 
‘‘(A) IN GENERAL.—A qualified nonprofit 
health insurance issuer (within the meaning of 
section 1322 of the Patient Protection and Af-
fordable Care Act) which has received a loan or 
grant under the CO-OP program under such 
section, but only with respect to periods for 
which the issuer is in compliance with the re-
quirements of such section and any agreement 
with respect to the loan or grant. 
‘‘(B) CONDITIONS FOR EXEMPTION.—Sub-
paragraph (A) shall apply to an organization 
only if— 
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180 
•AMDT. NO. 2786 
‘‘(i) the organization has given notice 
to the Secretary, in such manner as the 
Secretary may by regulations prescribe, 
that it is applying for recognition of its 
status under this paragraph, 
‘‘(ii) except as provided in section 
1322(c)(4) of the Patient Protection and 
Affordable Care Act, no part of the net 
earnings of which inures to the benefit of 
any private shareholder or individual, 
‘‘(iii) no substantial part of the activi-
ties of which is carrying on propaganda, or 
otherwise attempting, to influence legisla-
tion, and 
‘‘(iv) the organization does not par-
ticipate in, or intervene in (including the 
publishing or distributing of statements), 
any political campaign on behalf of (or in 
opposition to) any candidate for public of-
fice.’’. 
(2) ADDITIONAL REPORTING REQUIREMENT.— 
Section 6033 of such Code (relating to returns by 
exempt organizations) is amended by redesignating 
subsection (m) as subsection (n) and by inserting 
after subsection (l) the following: 
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181 
•AMDT. NO. 2786 
‘‘(m) ADDITIONAL INFORMATION REQUIRED FROM 
CO-OP INSURERS.—An organization described in section 
501(c)(29) shall include on the return required under sub-
section (a) the following information: 
‘‘(1) The amount of the reserves required by 
each State in which the organization is licensed to 
issue qualified health plans. 
‘‘(2) The amount of reserves on hand.’’. 
(3) APPLICATION OF TAX ON EXCESS BENEFIT 
TRANSACTIONS.—Section 4958(e)(1) of such Code 
(defining applicable tax-exempt organization) is 
amended by striking ‘‘paragraph (3) or (4)’’ and in-
serting ‘‘paragraph (3), (4), or (29)’’. 
(i) GAO STUDY AND REPORT.— 
(1) STUDY.—The Comptroller General of the 
General Accountability Office shall conduct an ongo-
ing study on competition and market concentration 
in the health insurance market in the United States 
after the implementation of the reforms in such 
market under the provisions of, and the amendments 
made by, this Act. Such study shall include an anal-
ysis of new issuers of health insurance in such mar-
ket. 
(2) REPORT.—The Comptroller General shall, 
not later than December 31 of each even-numbered 
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194 
•AMDT. NO. 2786 
entity to offer a community health insurance 
option, under such contract such entity— 
(i) shall meet the criteria established 
under paragraph (2); and 
(ii) shall receive an administrative fee 
under paragraph (7). 
(C) LIMITATION.—Contracts under this 
subsection shall not involve the transfer of in-
surance risk to the contracting administrator. 
(D) REFERENCE.—An entity with which 
the Secretary has entered into a contract under 
this paragraph shall be referred to as a ‘‘con-
tracting administrator’’. 
(2) QUALIFIED ENTITY.—To be qualified to be 
selected by the Secretary to offer a community 
health insurance option, an entity shall— 
(A) meet the criteria established under sec-
tion 1874A(a)(2) of the Social Security Act; 
(B) be a nonprofit entity for purposes of 
offering such option; 
(C) meet the solvency standards applicable 
under subsection (b)(7); 
(D) be eligible to offer health insurance or 
health benefits coverage; 
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219 
•AMDT. NO. 2786 
(A) GRANTING OF WAIVERS.—If the Sec-
retary determines to grant a waiver under sub-
section (a)(1), the Secretary shall notify the 
State involved of such determination and the 
terms and effectiveness of such waiver. 
(B) DENIAL OF WAIVER.—If the Secretary 
determines a waiver should not be granted 
under subsection (a)(1), the Secretary shall no-
tify the State involved, and the appropriate 
committees of Congress of such determination 
and the reasons therefore. 
(e) TERM OF WAIVER.—No waiver under this section 
may extend over a period of longer than 5 years unless 
the State requests continuation of such waiver, and such 
request shall be deemed granted unless the Secretary, 
within 90 days after the date of its submission to the Sec-
retary, either denies such request in writing or informs 
the State in writing with respect to any additional infor-
mation which is needed in order to make a final deter-
mination with respect to the request. 
SEC. 1333. PROVISIONS RELATING TO OFFERING OF PLANS 
IN MORE THAN ONE STATE. 
(a) HEALTH CARE CHOICE COMPACTS.— 
(1) IN GENERAL.—Not later than July 1, 2013, 
the Secretary shall, in consultation with the National 
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