‘‘(2) FAILURE
TO
PAY.—The Administrator 
shall establish— 
‘‘(A) procedures for the termination of em-
ployers that fail for a consecutive 2-month pe-
riod (or such other time period as determined 
appropriate by the Administrator) to make pre-
mium payments in a timely manner; and 
‘‘(B) other procedures regarding unpaid 
and uncollected premiums. 
‘‘SEC. 3105. EMPLOYER PARTICIPATION. 
‘‘(a) PARTICIPATION PROCEDURE.—The Adminis-
trator shall develop a procedure for employers and self- 
employed individuals to participate in the program under 
this title, including procedures relating to the offering of 
health benefits plans to employees and the payment of pre-
miums for health insurance coverage under this title. For 
the purpose of premium payments, a self-employed indi-
vidual shall be considered an employer that is making a 
100 percent contribution toward the premium amount. 
‘‘(b) ENROLLMENT AND OFFERING OF OTHER COV-
ERAGE.— 
‘‘(1) ENROLLMENT.—A participating employer 
shall ensure that each eligible employee has an op-
portunity to enroll in a plan of the employer’s choice 
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or a plan of the employee’s choice in accordance with 
section 3107(d)(7). 
‘‘(2) PROHIBITION ON OFFERING OTHER COM-
PREHENSIVE HEALTH BENEFIT COVERAGE.—A par-
ticipating employer may not offer a health insurance 
plan providing comprehensive health benefit coverage 
to employees other than a health benefits plan of-
fered under this title. 
‘‘(3) PROHIBITION
ON
COERCION.—An em-
ployer shall not pressure, coerce, or offer induce-
ments to an employee to elect not to enroll in cov-
erage under the program under this title or to select 
a particular health benefits plan. 
‘‘(4) OFFER OF SUPPLEMENTAL COVERAGE OP-
TIONS.— 
‘‘(A) IN
GENERAL.—A participating em-
ployer may offer supplementary coverage op-
tions to employees. 
‘‘(B) DEFINITION.—In subparagraph (A), 
the term ‘supplementary coverage’ means bene-
fits described as ‘excepted benefits’ under sec-
tion 2791(c). 
‘‘(c) REGULATORY FLEXIBILITY.—In developing the 
procedure under subsection (a), the Administrator shall 
comply with the requirements specified under the Regu-
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latory Flexibility Act under chapter 6 of title 5, United 
States Code, consider the economic impacts that the regu-
lation will have on small businesses, and consider regu-
latory alternatives that would mitigate such impact. The 
Administrator shall publish and publicly disseminate a 
small business compliance guide, pursuant to section 212 
of the Small Business Regulatory Enforcement Fairness 
Act, that explains the compliance requirements for em-
ployer participation. Such compliance guide shall be pub-
lished not later than the date of the publication of the 
final rule under this title, or the effective date of such 
rules, whichever is later. 
‘‘(d) RULE OF CONSTRUCTION.—Except as provided 
in section 3104(f), nothing in this title shall be construed 
to require that an employer make premium contributions 
on behalf of employees. 
‘‘SEC. 3106. ELIGIBILITY AND ENROLLMENT. 
‘‘(a) IN GENERAL.—An individual shall be eligible to 
enroll in health insurance coverage under this title for cov-
erage beginning in 2012 if such individual is an employee 
of 
a 
participating 
employer 
described 
in 
section 
3101(a)(4) or is a self-employed individual as defined in 
section 401(c)(1)(B) of the Internal Revenue Code of 
1986 and meets the definition of a participating employer 
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in section 3101(a)(8). An employer may allow employees 
who average fewer than 35 hours per week to enroll. 
‘‘(b) LIMITATION.—A health insurance issuer may 
not refuse to provide coverage to any eligible individual 
under subsection (a) who selects a health benefits plan of-
fered by such issuer under this title. 
‘‘(c) TYPE OF ENROLLMENT.—An eligible individual 
may enroll as an individual or as an adult with 1 or more 
children regardless of whether another adult is present in 
the enrollee’s household or family. 
‘‘(d) OPEN ENROLLMENT.— 
‘‘(1) IN GENERAL.—The Administrator shall es-
tablish an annual open enrollment period during 
which an employer may elect to become a partici-
pating employer and an employee may enroll in a 
health benefits plan under this title for the following 
calendar year. 
‘‘(2) OPEN
ENROLLMENT
PERIOD.—For pur-
poses of this title, the term ‘open enrollment period’ 
means, with respect to calendar year 2012 and each 
succeeding calendar year, the period beginning on 
October 1, 2011, and ending December 1, 2011, and 
each succeeding period beginning October 1 and 
ending December 1. Coverage in a health benefits 
plan selected during such an open enrollment period 
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shall begin on January 1 of the calendar year fol-
lowing the selection. 
‘‘(3) NEWLY
ELIGIBLE
EMPLOYERS
AND
EM-
PLOYEES.—Notwithstanding the open enrollment pe-
riod provided for under paragraph (2), the Adminis-
trator shall establish an enrollment process to enable 
a newly eligible employer or an employer with an ex-
isting health benefits plan whose term is ending to 
become a participating employer and for an em-
ployee of such employer, or a new employee of a par-
ticipating employer, to enroll in a health benefits 
plan under this title outside of an open enrollment 
period subject to 2701(f). The Administrator may 
establish a process for setting the renewal date for 
the participation of an employer that initially be-
comes a participating employer outside of the open 
enrollment period to coincide with a subsequent open 
enrollment period. 
‘‘(4) 
LIMITATION
OF
CHANGING
ENROLL-
MENT.—An employer or employee (as the case may 
be) may elect to change the health benefits plan that 
the employee is enrolled in only during an open en-
rollment period. 
‘‘(5) 
EFFECTIVENESS
OF
ELECTION
AND 
CHANGE OF ELECTION.—An election to change a 
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health benefits plan that is made during the open 
enrollment period under paragraph (2) shall take ef-
fect as of the first day of the following calendar 
year. 
‘‘(6) CONTINUATION
OF
ENROLLMENT.—An 
employee who has enrolled in a health benefits plan 
under this title is considered to have been continu-
ously enrolled in that health benefits plan until such 
time as— 
‘‘(A) the employer or employee (as the case 
may be) elects to change health benefits plans; 
or 
‘‘(B) the health benefits plan is termi-
nated. 
‘‘(e) PROVIDING INFORMATION TO PROMOTE IN-
FORMED
CHOICE.—The Administrator shall compile, 
produce, and disseminate information to employers, em-
ployees, and navigators under section 3102(c)(8) to pro-
mote informed choice that shall be made available at least 
30 days prior to the beginning of each open enrollment 
period. 
‘‘(f) TERMINATION OF EMPLOYMENT.— 
‘‘(1) IN
GENERAL.—With respect to an em-
ployee who is enrolled in a health plan through the 
program under this title and who is terminated or 
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separated from employment, such employee may re-
main enrolled in such health plan for the period de-
scribed in paragraph (2) if the employee pays 102 
percent of the monthly premium for such plan for 
such period as provided for under paragraph (3). 
‘‘(2) PERIOD
DESCRIBED.—The period de-
scribed in this paragraph is the longer of— 
‘‘(A) the period provided for in the 
COBRA continuation provisions (as such term 
is defined in section 3001(a)(10)(B) of division 
B of the American Recovery and Reinvestment 
Act of 2009) beginning on the date of the ter-
mination or separation involved; or 
‘‘(B) the period permitted under any appli-
cable continuation of coverage provisions of the 
State in which the employee resides. 
‘‘(3) 
ADMINISTRATION.—The 
Administrator 
shall develop guidelines for administering the provi-
sion of health plan coverage for employees under 
this subsection. Such guidelines shall address the 
rating rules for such continuation coverage in the 
calendar years prior to 2014 and shall provide for 
the administration of this section in a manner simi-
lar to the manner in which the COBRA continuation 
provisions (as such term is defined in section 
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3001(a)(10)(B) of division B of the American Re-
covery and Reinvestment Act of 2009) are adminis-
tered, including the collection of premiums by the 
Administrator. 
‘‘(4) NONAPPLICATION
OF
PROVISIONS.—The 
COBRA continuation provisions (as such term is de-
fined in section 3001(a)(10)(B) of division B of the 
American Recovery and Reinvestment Act of 2009) 
shall not apply to an employee to which this sub-
section applies. 
‘‘(g) RULE OF CONSTRUCTION.—Nothing in this title 
shall be construed to prohibit a health insurance issuer 
providing coverage through the program under this title 
from using the services of a licensed agent or broker. 
‘‘SEC. 3107. HEALTH COVERAGE AVAILABLE WITHIN THE 
SMALL BUSINESS POOL. 
‘‘(a) PREEXISTING CONDITION EXCLUSIONS.—Sec-
tion 2701 shall apply to coverage under this title, except 
that with respect to such coverage, the reference to ‘12 
months (or 18 months in the case of a late enrollee)’ in 
subsection (a)(2) of each such section shall be deemed to 
be ‘6 months’. The period involved shall be reduced by 
the aggregate of 1 day for each day that the individual 
was covered under creditable health insurance coverage 
(as defined for purposes of section 2701(c)) immediately 
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preceding the date the individual submitted an application 
for coverage under this title. 
‘‘(b) RATES AND PREMIUMS; STATE LAWS.— 
‘‘(1) IN
GENERAL.—Rates charged and pre-
miums paid for a health benefits plan under this 
title— 
‘‘(A) shall be determined in accordance 
with subsection (d); 
‘‘(B) may be annually adjusted; and 
‘‘(C) shall be adjusted to cover the admin-
istrative costs of the Administrator under this 
title and the office established under section 
3102. 
‘‘(2) BENEFIT MANDATE LAWS.—With respect 
to a contract entered into under this title under 
which a health insurance issuer will offer health ben-
efits plan coverage, State mandated benefit laws in 
effect in the State in which the plan is offered shall 
continue to apply, except in the case of a nationwide 
plan. 
‘‘(3) LIMITATION.—Nothing in this subsection 
shall be construed to preempt any State or local law 
(including any State grievance, claims, and appeals 
procedure laws, State provider mandate laws, and 
State network adequacy laws) except those laws and 
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regulations described in subsection (b)(2), (d)(2)(B), 
and (d)(5). 
‘‘(c) TERMINATION AND REENROLLMENT.—If an in-
dividual who is enrolled in a health benefits plan under 
this title voluntarily terminates the enrollment, except in 
the case of an individual who has lost or changes employ-
ment or whose employer is terminated for failure to pay 
premiums, the individual shall not be eligible for reenroll-
ment until the first open enrollment period following the 
expiration of 6 months after the date of such termination. 
‘‘(d) RATING RULES AND TRANSITIONAL APPLICA-
TION OF STATE LAW.— 
‘‘(1) YEARS 2012 AND 2013.—With respect to 
calendar years 2012 and 2013 (open enrollment pe-
riod beginning October 1, 2011, and October 1, 
2012), the following shall apply: 
‘‘(A) In the case of an employer that elects 
to participate in the program under this title, 
the State rating requirements applicable to em-
ployers purchasing health insurance coverage in 
the small group market in the State in which 
the employer is located shall apply with respect 
to such coverage, except that premium rates for 
such coverage shall not vary based on health- 
status related factors. 
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‘‘(B) State rating requirements shall apply 
to health insurance coverage purchased in the 
small group market in the State, except that a 
State shall be prohibited from allowing pre-
mium rates to vary based on health-status re-
lated factors. 
‘‘(2) SUBSEQUENT YEARS.— 
‘‘(A) NAIC RECOMMENDATIONS.— 
‘‘(i) STUDY.—Beginning in 2010, the 
Administrator shall contract with the Na-
tional Association of Insurance Commis-
sioners to conduct a study of the rating re-
quirements utilized in the program under 
this title and the rating requirements that 
apply to health insurance purchased in the 
small group markets in the States, and to 
develop recommendations concerning rat-
ing requirements. Such recommendations 
shall be submitted to the appropriate com-
mittees of Congress during calendar year 
2012. 
‘‘(ii) STATE LAW HARMONIZATION.— 
Beginning in calendar year 2011, the Ad-
ministrator shall contract with the Na-
tional Association of Insurance Commis-
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sioners to conduct a study of administra-
tive procedures, including rate and form 
filing, standards of external review, and 
standards of internal review, that apply to 
the program under this title and to health 
insurance purchased in the small group 
markets in the States. 
‘‘(iii) CONSULTATION.—In conducting 
the study under clause (i), the National 
Association of Insurance Commissioners 
shall consult with key stakeholders (includ-
ing small businesses, self-employed individ-
uals, employees of small businesses, health 
insurance issuers, healthcare providers, 
and patient advocates). 
‘‘(iv) 
RECOMMENDATIONS.—During 
calendar year 2012, the recommendations 
of the National Association of Insurance 
Commissioners shall be submitted to Con-
gress (in the form of a legislative pro-
posal), and shall concern— 
‘‘(I) 
rating 
requirements 
for 
health insurance coverage under this 
title for calendar year 2014 and sub-
sequent calendar years; and 
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‘‘(II) a maximum permissible 
variance between State rating require-
ments and the rating requirements for 
coverage under this title that will 
allow State flexibility without causing 
significant adverse selection for health 
insurance coverage under this title. 
‘‘(B) APPLICATION OF REQUIREMENTS.— 
If, pursuant to this subsection, an Act is en-
acted to implement rating requirements pursu-
ant to the recommendations submitted under 
subparagraph (A), or alternative rating require-
ments developed by Congress, such rating re-
quirements shall apply to the program under 
this title beginning in calendar year 2014 (open 
enrollment periods beginning October 1, 2013, 
and thereafter). 
‘‘(3) FAILURE TO ENACT LEGISLATION.—If an 
Act is not enacted as provided for in paragraph 
(2)(B), the fallback rating rules under paragraph 
(5) shall apply beginning in calendar year 2014 
(open enrollment periods beginning October 1, 2013, 
and thereafter). 
‘‘(4) EXPEDITED
CONGRESSIONAL
CONSIDER-
ATION.— 
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‘‘(A) 
INTRODUCTION
AND
COMMITTEE 
CONSIDERATION.— 
‘‘(i) 
INTRODUCTION.—A 
legislative 
proposal submitted to Congress pursuant 
to paragraph (2) shall be introduced in the 
House of Representatives by the Speaker, 
and in the Senate by the majority leader, 
immediately upon receipt of the language 
and shall be referred to the appropriate 
committees of Congress. If the proposal is 
not introduced in accordance with the pre-
ceding sentence, legislation may be intro-
duced in either House of Congress by any 
member thereof. 
‘‘(ii) COMMITTEE
CONSIDERATION.— 
Legislation introduced in the House of 
Representatives and the Senate under 
clause (i) shall be referred to the appro-
priate committees of jurisdiction of the 
House of Representatives and the Senate. 
Not later than 45 calendar days after the 
introduction of the legislation or February 
15th, 2013, whichever is later, the com-
mittee of Congress to which the legislation 
was referred shall report the legislation or 
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a committee amendment thereto. If the 
committee has not reported such legislation 
(or identical legislation) at the end of 45 
calendar days after its introduction, or 
February 15th, 2013, whichever is later, 
such committee shall be deemed to be dis-
charged from further consideration of such 
legislation and such legislation shall be 
placed on the appropriate calendar of the 
House involved. 
‘‘(B) EXPEDITED PROCEDURE.— 
‘‘(i) CONSIDERATION.—Not later than 
15 calendar days after the date on which 
a committee has been or could have been 
discharged from consideration of legislation 
under this paragraph, the Speaker of the 
House of Representatives, or the Speaker’s 
designee, or the majority leader of the Sen-
ate, or the leader’s designee, shall move to 
proceed to the consideration of the com-
mittee amendment to the legislation, and if 
there is no such amendment, to the legisla-
tion. It shall also be in order for any mem-
ber of the House of Representatives or the 
Senate, respectively, to move to proceed to 
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the consideration of the legislation at any 
time after the conclusion of such 15-day 
period. All points of order against the leg-
islation (and against consideration of the 
legislation) with the exception of points of 
order under the Congressional Budget Act 
of 1974 are waived. A motion to proceed to 
the consideration of the legislation is high-
ly privileged in the House of Representa-
tives and is privileged in the Senate and is 
not debatable. The motion is not subject to 
amendment, to a motion to postpone con-
sideration of the legislation, or to a motion 
to proceed to the consideration of other 
business. A motion to reconsider the vote 
by which the motion to proceed is agreed 
to or not agreed to shall not be in order. 
If the motion to proceed is agreed to, the 
House of Representatives or the Senate, as 
the case may be, shall immediately proceed 
to consideration of the legislation in ac-
cordance with the Standing Rules of the 
House of Representatives or the Senate, as 
the case may be, without intervening mo-
tion, order, or other business, and the reso-
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lution shall remain the unfinished business 
of the House of Representatives or the 
Senate, as the case may be, until disposed 
of, except as provided in clause (iii). 
‘‘(ii) 
CONSIDERATION
BY
OTHER 
HOUSE.—If, before the passage by one 
House of the legislation that was intro-
duced in such House, such House receives 
from the other House legislation as passed 
by such other House— 
‘‘(I) the legislation of the other 
House shall not be referred to a com-
mittee and shall immediately displace 
the legislation that was introduced in 
the House in receipt of the legislation 
of the other House; and 
‘‘(II) the legislation of the other 
House shall immediately be considered 
by the receiving House under the 
same procedures applicable to legisla-
tion reported by or discharged from a 
committee under this paragraph. 
‘‘Upon disposition of legislation that 
is received by one House from the other 
House, it shall no longer be in order to 
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consider the legislation that was introduced 
in the receiving House. 
‘‘(iii) SENATE VOTE REQUIREMENT.— 
Legislation under this paragraph shall only 
be approved in the Senate if affirmed by 
the votes of 3⁄5 of the Senators duly chosen 
and sworn. If legislation in the Senate has 
not reached final passage within 10 days 
after the motion to proceed is agreed to 
(excluding periods in which the Senate is 
in recess) it shall be in order for the ma-
jority leader to file a cloture petition on 
the legislation or amendments thereto, in 
accordance with rule XXII of the Standing 
Rules of the Senate. If such a cloture mo-
tion on the legislation fails, it shall be in 
order for the majority leader to proceed to 
other business and the legislation shall be 
returned to or placed on the Senate cal-
endar. 
‘‘(iv) 
CONSIDERATION
IN
CON-
FERENCE.—Immediately upon a final pas-
sage of the legislation that results in a dis-
agreement between the two Houses of Con-
gress with respect to the legislation, con-
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ferees shall be appointed and a conference 
convened. Not later than 15 days after the 
date on which conferees are appointed (ex-
cluding periods in which one or both 
Houses are in recess), the conferees shall 
file a report with the House of Representa-
tives and the Senate resolving the dif-
ferences between the Houses on the legisla-
tion. Notwithstanding any other rule of the 
House of Representatives or the Senate, it 
shall be in order to immediately consider a 
report of a committee of conference on the 
legislation filed in accordance with this 
subclause. Debate in the House of Rep-
resentatives and the Senate on the con-
ference report shall be limited to 10 hours, 
equally divided and controlled by the 
Speaker of the House of Representatives 
and the minority leader of the House of 
Representatives or their designees and the 
majority and minority leaders of the Sen-
ate or their designees. A vote on final pas-
sage of the conference report shall occur 
immediately at the conclusion or yielding 
back of all time for debate on the con-
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ference report. The conference report shall 
be approved in the Senate only if affirmed 
by the votes of 3⁄5 of the Senators duly 
chosen and sworn. 
‘‘(C) RULES OF THE SENATE AND HOUSE 
OF REPRESENTATIVES.—This paragraph is en-
acted by Congress— 
‘‘(i) as an exercise of the rulemaking 
power of the Senate and House of Rep-
resentatives, respectively, and is deemed to 
be part of the rules of each House, respec-
tively, but applicable only with respect to 
the procedure to be followed in that House 
in the case of legislation under this para-
graph, and it supersedes other rules only 
to the extent that it is inconsistent with 
such rules; and 
‘‘(ii) with full recognition of the con-
stitutional right of either House to change 
the rules (so far as they relate to the pro-
cedure of that House) at any time, in the 
same manner, and to the same extent as in 
the case of any other rule of that House. 
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‘‘(5) FALLBACK RATING RULES.—For purposes 
of paragraph (3), the fallback rating rules are as fol-
lows: 
‘‘(A) PROGRAM.— 
‘‘(i) RATING RULES.—A health insur-
ance issuer that enters into a contract 
under the program under this title shall 
determine the amount of premiums to as-
sess for coverage under a health benefits 
plan based on a community rate that may 
be annually adjusted only— 
‘‘(I) based on the age of covered 
individuals (subject to clause (iii)); 
‘‘(II) based on the geographic 
area involved if the adjustment is 
based on geographical divisions that 
are not smaller than a metropolitan 
statistical area and the issuer provides 
evidence of geographic variation in 
cost of services; 
‘‘(III) based on industry (subject 
to clause (iv)); 
‘‘(IV) based on tobacco use; and 
‘‘(V) based on whether such cov-
erage is for an individual, 2 adults in 
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a household, 1 adult and 1 or more 
children, or a family. 
‘‘(ii) 
LIMITATION.—Premium 
rates 
charged for coverage under the program 
under this title shall not vary based on 
health-status related factors, gender, class 
of business, or claims experience or any 
other factor not described in clause (i). 
‘‘(iii) AGE ADJUSTMENTS.— 
‘‘(I) IN GENERAL.—With respect 
to clause (i)(I), in making adjust-
ments based on age, the Adminis-
trator shall establish not more than 5 
age brackets to be used by a health 
insurance issuer in establishing rates 
for individuals under the age of 65. 
The rates for any age bracket shall 
not exceed 300 percent of the rate for 
the lowest age bracket. Age-related 
premiums may not vary within age 
brackets. 
‘‘(II) AGES
AND
OLDER.— 
With respect to clause (i)(I), a health 
insurance issuer may develop separate 
rates for covered individuals who are 
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65 years of age or older for whom the 
primary payor for health benefits cov-
erage is the Medicare program under 
title XVIII of the Social Security Act, 
for the coverage of health benefits 
that are not otherwise covered under 
Medicare. 
‘‘(iv) INDUSTRY ADJUSTMENT.—With 
respect to clause (i)(III), in making adjust-
ments based on industry, the rates for any 
industry shall not exceed 115 percent of 
the rate for the lowest industry and shall 
be based on evidence of industry variation 
in cost of services. 
‘‘(B) STATE RATING RULES.—State rating 
requirements shall apply to health insurance 
coverage purchased in the small group market, 
except that a State shall not permit premium 
rates to vary based on health-status related fac-
tors. 
‘‘(6) STATE WITH LESS PREMIUM VARIATION.— 
Effective beginning in calendar year 2014, in the 
case of a State that provides a rating variance with 
respect to age that is less than the Federal limit es-
tablished under paragraph (2)(B) or (3) or that pro-
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vides for some form of community rating, or that 
provides a rating variance with respect to industry 
that is less than the Federal limit established under 
paragraph (2)(B) or (3), or that provides a rating 
variance with respect to the geographic area involved 
that is less than the Federal limit established in 
paragraph (2)(B) or (3), premium rates charged for 
health insurance coverage under this title in such 
State with respect to such factor shall reflect the 
rating requirements of such State. 
‘‘(7) EMPLOYEE CHOICE.— 
‘‘(A) CALENDAR YEARS 2012 AND 2013.— 
With respect to calendar years 2012 and 2013 
(open enrollment periods beginning October 1, 
2011, and October 1, 2012), in the case of a 
State that applies community rating or adjusted 
community rating where any age bracket does 
not exceed 300 percent of the lowest age brack-
et, employees of an employer located in that 
State may elect to enroll in any health plan of-
fered under this title. 
‘‘(B) SUBSEQUENT YEARS.—Beginning in 
calendar year 2014 (open enrollment periods 
beginning October 1, 2013, and thereafter), em-
ployees of an employer that participates in the 
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program under this title may elect to enroll in 
any health plan offered under this title. 
‘‘(C) EXCEPTION.—In any State or year in 
which an employee is not able to select a health 
plan as provided for in subparagraph (A) or 
(B), the employer shall select the health plan or 
plans that shall be made available to the em-
ployees of such employer. 
‘‘(8) STATE APPROVAL OF RATES.—State laws 
requiring the approval of rates with respect to health 
insurance shall continue to apply to health insurance 
coverage under this title in such State unless the 
State fails to enforce the application of rates that 
would otherwise apply to health insurance issuers 
under the program under this title. 
‘‘(e) BENEFITS.— 
‘‘(1) STATEMENT
OF
BENEFITS.—Each con-
tract under this title shall contain a detailed state-
ment of benefits offered and shall include informa-
tion concerning such maximums, limitations, exclu-
sions, and other definitions of benefits as the Ad-
ministrator considers necessary or reasonable. 
‘‘(2) NATIONWIDE PLANS.— 
‘‘(A) IN GENERAL.—In the case of con-
tracts with health insurance issuers that offer a 
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health benefit plan on a nationwide basis, the 
benefit package shall include benefits estab-
lished by the Administrator. 
‘‘(B) PROCESS FOR ESTABLISHING BENE-
FITS
FOR
NATIONWIDE
PLANS.—The benefits 
provided for under subparagraph (A) shall be 
determined as follows: 
‘‘(i) Not later than 30 days after the 
date of enactment of this title, the Sec-
retary shall enter into a contract with the 
Institute of Medicine to develop a min-
imum set of benefits to be offered by na-
tionwide plans. 
‘‘(ii) In developing such minimum set 
of benefits, the Institute of Medicine shall 
convene public forums to allow input from 
key stakeholders (including small busi-
nesses, self-employed individuals, employ-
ees of small businesses, health insurance 
issuers, insurance regulators, healthcare 
providers, and patient advocates) and shall 
consult with the Small Business Health 
Board. 
‘‘(iii) The Institute of Medicine shall 
consider— 
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‘‘(I) the clinical appropriateness 
and effectiveness of the benefits cov-
ered; 
‘‘(II) the affordability of the ben-
efits covered; 
‘‘(III) the financial protection of 
enrollees against high healthcare ex-
penses; 
‘‘(IV) 
access 
to 
necessary 
healthcare services, including preven-
tive health services; and 
‘‘(V) benefits similar to those 
available in the small group market 
on the date of enactment of this title. 
‘‘(iv) The benefits package shall not 
be discriminatory or be likely to promote 
or induce adverse selection. 
‘‘(v) The Administrator shall publish 
the benefits recommended by the Institute 
of Medicine for public comment. 
‘‘(vi) Based on the comments received, 
the Administrator may make changes only 
to the extent that the recommendation 
from the Institute of Medicine is not con-
sistent with the criteria contained in clause 
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(iii) or there is a compelling need for the 
changes to ensure the effective functioning 
of the program. 
‘‘(vii) The Administrator shall submit 
a report to Congress on the benefits in-
cluded in the nationwide package. 
‘‘(C) CHANGES TO BENEFITS.— 
‘‘(i) IN
GENERAL.—By a vote of a 
two-thirds majority, the Small Business 
Health Board may recommend to the Ad-
ministrator changes to the benefit package 
for nationwide plans under this paragraph 
for years subsequent to the first year in 
which such benefits are in effect. 
‘‘(ii) REDUCTION IN BENEFITS.—The 
Administrator may reduce benefits that 
were previously covered under this para-
graph only if— 
‘‘(I) two-thirds of the Small 
Business Health Board recommend 
such change; or 
‘‘(II) there is a compelling need 
for the change to prevent a substan-
tial reduction in participation in the 
program under this title. 
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‘‘(f) ADDITIONAL PREMIUM FOR DELAYED ENROLL-
MENT.— 
‘‘(1) IN GENERAL.—A self-employed individual 
who is eligible to participate in the program under 
this title, who does not reside in a State where a 
self-employed individual is eligible for coverage in 
the small group market, and who does not elect to 
enroll in coverage under such program in the first 
year in which the self-employed individual is eligible 
to so enroll, shall be subject to an additional pre-
mium for delayed enrollment. 
‘‘(2) AMOUNT.—The Administrator shall estab-
lish the amount of the additional premium under 
paragraph (1), which shall be the amount deter-
mined by the Administrator to be actuarially appro-
priate, to encourage enrollment, and to reduce ad-
verse selection. The amount of the additional pre-
mium shall be calculated by the Administrator based 
on the number of years specified in paragraph (4). 
‘‘(3) PAYMENT.—A self-employed individual 
shall pay the additional premium under this sub-
section, if any, for a period of time equal to the 
number of years specified in paragraph (4). After 
the expiration of such period the additional premium 
for delayed enrollment shall be terminated. 
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‘‘(4) YEARS.—The number of years specified in 
this paragraph is the number of years that the self- 
employed individual involved was eligible to partici-
pate in the program under this title but did not en-
roll in coverage under such program and did not 
otherwise have creditable coverage (as defined for 
purposes of section 2701(c)). 
‘‘(g) STATE ENFORCEMENT.— 
‘‘(1) STATE AUTHORITY.—With respect to the 
enforcement of provisions in this title that supersede 
State law (as described in paragraph (2)), a State 
may require that health insurance issuers that issue, 
sell, renew, or offer health insurance coverage in the 
State in the small group market or through the pro-
gram under this title, comply with the requirements 
of this title with respect to such issuers. 
‘‘(2) PROVISIONS DESCRIBED.—The provisions 
described in this paragraph shall include the fol-
lowing: 
‘‘(A) Prohibitions on varying premium 
rates based on health-status related factors 
(subsections (d)(1)(A) and (B) of section 
3107). 
‘‘(B) The implementation of rating re-
quirements that shall apply to the program 
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under this title beginning in calendar year 2014 
(subsections (d)(2)(B) and (d)(3) of section 
3107). 
‘‘(C) Benefit requirements for nationwide 
plans available in the program under this title 
(subsection (e)). 
‘‘(3) FAILURE
TO
IMPLEMENT
OR
ENFORCE 
PROVISIONS.—In the case of a determination by the 
Secretary that a State has failed to substantially en-
force a provision (or provisions) described in para-
graph (2) with respect to health insurance issuers in 
the State, the Secretary shall enforce such provision 
(or provisions). 
‘‘(4) SECRETARIAL
ENFORCEMENT
AUTHOR-
ITY.—The Secretary shall have the same authority 
in relation to the enforcement of the provisions of 
this title with respect to issuers of health insurance 
coverage in a State as the Secretary has under sec-
tion 2722(b)(2) in relation to the enforcement of the 
provisions of part A of title XXVII with respect to 
issuers of health insurance coverage in the small 
group market in the State. 
‘‘(h) STATE OPT OUT.—A State may prohibit small 
employers and self-employed individuals in the State from 
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participating in the program under this title if the Admin-
istrator finds that the State— 
‘‘(1) defines its small group market to include 
groups of 1 (so that self-employed individuals are el-
igible for coverage in such market); 
‘‘(2) prohibits the use of health-status related 
factors and other factors described in subsection 
(d)(5)(A); 
‘‘(3) has in effect rating rules that— 
‘‘(A) in calendar years 2012 and 2013, 
comply with subsection (d)(5)(A); and 
‘‘(B) in calendar year 2014 and thereafter, 
comply with subsection (d)(2)(B) or (d)(3), 
whichever is in effect for such calendar year; 
except that such rules may impose limits on rating 
variation in addition to those provided for in such 
subsection; 
‘‘(4) maintains a State-wide purchasing pool 
that provides purchasers in the small group market 
a choice of health benefits plans, with comparative 
information provided concerning such plans and the 
premiums charged for such plans made available 
through the Internet; and 
‘‘(5) enacts a law to request an opt out under 
this subsection. 
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‘‘SEC. 3108. ENCOURAGING PARTICIPATION BY HEALTH IN-
SURANCE ISSUERS THROUGH ADJUSTMENTS 
FOR RISK. 
‘‘(a) APPLICATION OF RISK CORRIDORS.— 
‘‘(1) IN
GENERAL.—This section shall only 
apply to health insurance issuers with respect to 
health benefits plans offered under this Act during 
any of calendar years 2012 through 2014. 
‘‘(2) NOTIFICATION
OF
COSTS
UNDER
THE 
PLAN.—In the case of a health insurance issuer that 
offers a health benefits plan under this title in any 
of calendar years 2012 through 2014, the issuer 
shall notify the Administrator, before such date in 
the succeeding year as the Administrator specifies, 
of the total amount of costs incurred in providing 
benefits under the health benefits plan for the year 
involved and the portion of such costs that is attrib-
utable to administrative expenses. 
‘‘(3) ALLOWABLE COSTS DEFINED.—For pur-
poses of this section, the term ‘allowable costs’ 
means, with respect to a health benefits plan offered 
by a health insurance issuer under this title, for a 
year, the total amount of costs described in para-
graph (2) for the plan and year, reduced by the por-
tion of such costs attributable to administrative ex-
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penses incurred in providing the benefits described 
in such paragraph. 
‘‘(b) ADJUSTMENT OF PAYMENT.— 
‘‘(1) NO ADJUSTMENT IF ALLOWABLE COSTS 
WITHIN 3 PERCENT OF TARGET AMOUNT.—If the al-
lowable costs for the health insurance issuer with re-
spect to the health benefits plan involved for a cal-
endar year are at least 97 percent, but do not exceed 
103 percent, of the target amount for the plan and 
year involved, there shall be no payment adjustment 
under this section for the plan and year. 
‘‘(2) INCREASE
IN
PAYMENT
IF
ALLOWABLE 
COSTS ABOVE 103 PERCENT OF TARGET AMOUNT.— 
‘‘(A) COSTS BETWEEN 103 AND 108 PER-
CENT OF TARGET AMOUNT.—If the allowable 
costs for the health insurance issuer with re-
spect to the health benefits plan involved for 
the year are greater than 103 percent, but not 
greater than 108 percent, of the target amount 
for the plan and year, the Administrator shall 
reimburse the issuer for such excess costs 
through payment to the issuer of an amount 
equal to 75 percent of the difference between 
such allowable costs and 103 percent of such 
target amount. 
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‘‘(B) COSTS ABOVE 108 PERCENT OF TAR-
GET AMOUNT.—If the allowable costs for the 
health insurance issuer with respect to the 
health benefits plan involved for the year are 
greater than 108 percent of the target amount 
for the plan and year, the Administrator shall 
reimburse the issuer for such excess costs 
through payment to the issuer in an amount 
equal to the sum of— 
‘‘(i) 3.75 percent of such target 
amount; and 
‘‘(ii) 90 percent of the difference be-
tween such allowable costs and 108 percent 
of such target amount. 
‘‘(3) REDUCTION IN PAYMENT IF ALLOWABLE 
COSTS BELOW 97 PERCENT OF TARGET AMOUNT.— 
‘‘(A) COSTS BETWEEN 92 AND 97 PERCENT 
OF TARGET AMOUNT.—If the allowable costs for 
the health insurance issuer with respect to the 
health benefits plan involved for the year are 
less than 97 percent, but greater than or equal 
to 92 percent, of the target amount for the plan 
and year, the issuer shall be required to pay 
into a contingency reserve fund established and 
maintained by the Administrator, an amount 
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equal to 75 percent of the difference between 
97 percent of the target amount and such al-
lowable costs. 
‘‘(B) COSTS BELOW 92 PERCENT OF TAR-
GET AMOUNT.—If the allowable costs for the 
health insurance issuer with respect to the 
health benefits plan involved for the year are 
less than 92 percent of the target amount for 
the plan and year, the issuer shall be required 
to pay into the contingency fund established 
under subparagraph (A), an amount equal to 
the sum of— 
‘‘(i) 3.75 percent of such target 
amount; and 
‘‘(ii) 90 percent of the difference be-
tween 92 percent of such target amount 
and such allowable costs. 
‘‘(4) TARGET AMOUNT DESCRIBED.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘target amount’ means, 
with respect to a health benefits plan offered by 
an issuer under this title in any of calendar 
years 2012 through 2014, an amount equal 
to— 
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‘‘(i) the total of the monthly pre-
miums estimated by the health insurance 
issuer and accepted by the Administrator 
to be paid for enrollees in the plan under 
this title for the calendar year involved; re-
duced by 
‘‘(ii) the amount of administrative ex-
penses that the issuer estimates, and the 
Administrator accepts, will be incurred by 
the issuer with respect to the plan for such 
calendar year. 
‘‘(B) SUBMISSION OF TARGET AMOUNT.— 
Not later than December 31, 2011, and each 
December 31 thereafter through calendar year 
2013, an issuer shall submit to the Adminis-
trator a description of the target amount for 
such issuer with respect to health benefits plans 
provided by the issuer under this title. 
‘‘(c) DISCLOSURE OF INFORMATION.— 
‘‘(1) IN GENERAL.—Each contract under this 
title shall provide— 
‘‘(A) that a health insurance issuer offer-
ing a health benefits plan under this title shall 
provide the Administrator with such informa-
tion as the Administrator determines is nec-
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essary to carry out this subsection including the 
notification of costs under subsection (a)(2) and 
the target amount under subsection (b)(4)(B); 
and 
‘‘(B) that the Administrator has the right 
to inspect and audit any books and records of 
the issuer that pertain to the information re-
garding costs provided to the Administrator 
under such subsections. 
‘‘(2) RESTRICTION ON USE OF INFORMATION.— 
Information disclosed or obtained pursuant to the 
provisions of this subsection may be used by the of-
fice designated under section 3102(a) and its em-
ployees and contractors only for the purposes of, and 
to the extent necessary in, carrying out this section. 
‘‘SEC. 3109. ADMINISTRATION THROUGH REGIONAL OR 
OTHER ADMINISTRATIVE ENTITIES. 
‘‘(a) IN GENERAL.—In order to provide for the ad-
ministration of the benefits under this title with maximum 
efficiency and convenience for participating employers and 
healthcare providers and other individuals and entities 
providing services to such employers, the Administrator— 
‘‘(1) shall enter into contracts with eligible enti-
ties, to the extent appropriate, to perform, on a re-
gional or other basis, activities to receive, disburse, 
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and account for payments of premiums to partici-
pating employers by individuals, and for payments 
by participating employers and employees to health 
insurance issuers; and 
‘‘(2) may enter into contracts with eligible enti-
ties, to the extent appropriate, to perform, on a re-
gional or other basis, 1 or more of the following: 
‘‘(A) Collect and maintain all information 
relating to individuals, families, and employers 
participating in the program under this title. 
‘‘(B) Serve as a channel of communication 
between health insurance issuers, participating 
employers, and individuals relating to the ad-
ministration of this title. 
‘‘(C) Otherwise carry out such activities 
for the administration of this title, in such 
manner, as may be provided for in the contract 
entered into under this section. 
‘‘(b) APPLICATION.—To be eligible to receive a con-
tract under subsection (a), an entity shall prepare and 
submit to the Administrator an application at such time, 
in such manner, and containing such information as the 
Administration may require. 
‘‘(c) PROCESS.— 
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‘‘(1) COMPETITIVE
BIDDING.—All contracts 
under this section shall be awarded through a com-
petitive bidding process on a biennial basis. 
‘‘(2) REQUIREMENT.—No contract shall be en-
tered into with any entity under this section unless 
the Administrator finds that such entity will perform 
its obligations under the contract efficiently and ef-
fectively and will meet such requirements as to fi-
nancial responsibility, legal authority, and other 
matters as the Administrator finds pertinent. 
‘‘(3) PUBLICATION
OF
STANDARDS
AND
CRI-
TERIA.—If the Administrator enters into contracts 
under subsection (a), the Administrator shall publish 
in the Federal Register standards and criteria for 
the efficient and effective performance of contract 
obligations under this section, and opportunity shall 
be provided for public comment prior to implementa-
tion. In establishing such standards and criteria, the 
Administrator shall provide for a system to measure 
an entity’s performance of responsibilities. 
‘‘(4) TERM.—Each contract under this section 
shall be for a term of at least 2 years, and may be 
made automatically renewable from term to term in 
the absence of notice by either party of intention to 
terminate at the end of the current term, except that 
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the Administrator may terminate any such contract 
at any time (after such reasonable notice and oppor-
tunity for hearing to the entity involved as the Ad-
ministrator may provide in regulations) if the Ad-
ministrator finds that the entity has failed substan-
tially to carry out the contract or is carrying out the 
contract in a manner inconsistent with the efficient 
and effective administration of the program estab-
lished by this title. 
‘‘(d) TERMS OF CONTRACT.—A contract entered into 
under this section shall include— 
‘‘(1) a description of the duties of the con-
tracting entity; 
‘‘(2) an assurance that the entity will furnish to 
the Administrator such timely information and re-
ports as the Administrator determines appropriate; 
‘‘(3) an assurance that the entity will maintain 
such records and afford such access thereto as the 
Administrator finds necessary to assure the correct-
ness and verification of the information and reports 
under paragraph (2) and otherwise to carry out the 
purposes of this title; 
‘‘(4) an assurance that the entity shall comply 
with such confidentiality and privacy protection 
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guidelines and procedures as the Administrator may 
require; 
‘‘(5) an assurance that the entity does not have, 
and will continue to avoid, any conflicts of interest 
relative to any functions it will perform; and 
‘‘(6) such other terms and conditions not incon-
sistent with this section as the Administrator may 
find necessary or appropriate. 
‘‘SEC. 3110. PUBLIC EDUCATION CAMPAIGN AND REPORT. 
‘‘(a) IN GENERAL.—In carrying out this title, the Ad-
ministrator shall develop and implement an educational 
campaign with interagency participation (including at a 
minimum the Small Business Administration, the Depart-
ment of Labor, and employees of the office established 
under section 3102 who oversee the provision of informa-
tion through navigators) to provide information to employ-
ers and the general public concerning the health insurance 
program developed under this title, including the contact 
information relating to an individual or individuals who 
will be available to resolve various types of problems with 
health insurance coverage provided under this title. 
‘‘(b) PUBLIC EDUCATION CAMPAIGN.—There is au-
thorized to be appropriated to carry out this section, such 
sums as may be necessary for each of fiscal years 2009 
through 2011. 
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‘‘(c) REPORTS TO CONGRESS.—Not later than 1 year 
and 2 years after the implementation of the campaign 
under subsection (a), the Administrator shall submit to 
the appropriate committees of Congress a report that de-
scribes the activities of the Administrator under sub-
section (a), including a determination by the Adminis-
trator of the percentage of employers with knowledge of 
the health benefits program under this title. 
‘‘SEC. 3111. APPROPRIATIONS. 
‘‘There are authorized to be appropriated to the Ad-
ministrator such sums as may be necessary in each fiscal 
year for the development and administration of the pro-
gram under this title. 
‘‘SEC. 3112. EFFECTIVE DATE. 
‘‘This title shall take effect on the date of enactment 
of this title.’’. 
SEC. 3. AMENDMENT TO ERISA. 
Section 514(b)(2) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1144(b)(2)) is 
amended by adding at the end the following: 
‘‘(C) Notwithstanding subparagraph (A), the provi-
sions of subsections (d)(1)(B) and (g)(2)(A) of section 
3107 of the Public Health Service Act (relating to the pro-
hibition on health-status related rating and the Federal 
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