about private group health plans, the purchasing pool op-
erator shall provide information that meets the require-
ments of section 412(b)(2). 
(c) STATE LICENSURE.— 
(1) IN GENERAL.—Subject to paragraph (2), a 
health plan shall not be a participating insurer un-
less the plan has a State license to provide State 
residents with the private group coverage health in-
surance plans that it offers through the pool. 
(2) EXCEPTION.—A pool operator may enter 
into a contract under subsection (a) to cover pool 
participants through a health plan without a State 
license described in paragraph (1) if such plan is of-
fered to Federal employees nationwide and, with re-
spect to such employees, is exempt from State health 
insurance regulation. Nothing in this paragraph 
shall be construed to permit coverage of pool partici-
pants through such a plan except with groups, con-
tracts, and premium rates that are entirely distinct 
from those used for individuals covered under the 
Federal employee’s health benefits program under 
chapter 89 of title 5, United States Code. 
(d) ADDITIONAL STOP-LOSS COVERAGE AND REIN-
SURANCE.—Purchasing pool operators are authorized to 
encourage participation in the program under this title, 
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improve covered benefits, reduce out-of-pocket cost-shar-
ing, limit premiums, or achieve other objectives of this Act 
by— 
(1) funding stop-loss coverage above levels oth-
erwise offered in the purchasing pool; or 
(2) providing or subsidizing reinsurance in ad-
dition to that provided under section 411. 
(e) PARTICIPATION OF FEHBP PLANS.— 
(1) IN GENERAL.—Each entity with a contract 
under section 8902 of title 5, United States Code, 
shall be a participating insurer unless such entity 
notifies the Secretary in writing of its intention not 
to participate in the program under this title prior 
to such time as is designated by the Secretary so as 
to allow such decisions to be taken into account with 
respect to eligible individuals’ choice of a private 
group health insurance plan under such program. 
Such participation in the program under this title 
shall include at least the covered benefits and pro-
vider networks available through such an entity and 
shall not involve greater out-of-pocket cost-sharing 
than the plan offered by such entity pursuant to its 
contract under section 8902 of title 5, United States 
Code. 
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(2) NO EFFECT ON FEHBP COVERAGE.—The 
Director of Office of Personnel Management shall 
take such steps as are necessary to ensure that each 
individual enrolled for health benefits coverage under 
the program under chapter 89 of title 5, United 
States Code, is not adversely affected by eligible in-
dividuals or others enrolled for coverage under the 
program under this title. Such steps shall include 
(but need not be limited to) the establishment of 
separate risk pools, separate contracts with partici-
pating insurers, and separately negotiated pre-
miums. 
SEC. 406. OPTIONS FOR HEALTH BENEFITS COVERAGE. 
(a) SCOPE OF HEALTH BENEFITS COVERAGE.—The 
health benefits coverage provided to an eligible individual 
under a private group health insurance plan offered by 
a participating insurer shall consist of any of the fol-
lowing: 
(1) BENCHMARK COVERAGE.—Health benefits 
coverage that is equivalent to the benefits coverage 
in a benchmark benefit package described in sub-
section (b). 
(2) 
BENCHMARK-EQUIVALENT
COVERAGE.— 
Health benefits coverage that meets the following re-
quirements: 
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(A) INCLUSION
OF
ESSENTIAL
SERV-
ICES.—The coverage includes each of the essen-
tial services identified by the National Advisory 
Commission on Expanded Access to Health 
Care and adopted by Congress under title III. 
(B) AGGREGATE ACTUARIAL VALUE EQUIV-
ALENT
TO
BENCHMARK
PACKAGE.—The cov-
erage has an aggregate actuarial value that is 
equal to or greater than the actuarial value of 
one of the benchmark benefit packages. 
(3) 
ALTERNATIVE
COVERAGE.—Any 
other 
health benefits coverage that the Secretary deter-
mines, upon application by a State, offers health 
benefits coverage equivalent to or greater than a 
plan described in and offered under section 8903(1) 
of title 5, United States Code. 
(b) BENCHMARK BENEFIT PACKAGES.—The bench-
mark benefit packages are as follows: 
(1) FEHBP-EQUIVALENT
HEALTH
BENEFITS 
COVERAGE.—The plan described in and offered 
under chapter 89 of title 5, United States Code with 
the highest number of enrollees under such section 
for the year preceding the year in which the private 
group health insurance plan is proposed to be of-
fered. 
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(2) PUBLIC
PROGRAM-EQUIVALENT
HEALTH 
BENEFITS COVERAGE.—Coverage provided under the 
State plan approved under the medicaid program 
under title XIX of the Social Security Act or the 
State children’s health insurance program under 
title XXI of such Act (42 U.S.C. 1396 et seq., 
1397aa et seq.) (without regard to coverage provided 
under a waiver of the requirements of either such 
program). 
(3) COVERAGE OFFERED THROUGH HMO.—The 
health insurance coverage plan that— 
(A) is offered by a health maintenance or-
ganization (as defined in section 2791(b)(3) of 
the Public Health Service Act (42 U.S.C. 33gg– 
91(b)(3))); and 
(B) has the largest insured commercial, 
nonmedicaid enrollment of covered lives of such 
coverage plans offered by such a health mainte-
nance organization in the State. 
(4) STATE EMPLOYEE COVERAGE.—The health 
insurance plan that is offered to State employees 
and has the largest enrollment of covered lives of 
any such plan. 
(5) APPLICATION
OF
BENCHMARK
STAND-
ARDS.—A private group health plan offers bench-
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