SEC. 204. FUNDING OF SAFETY NET. 
(a) LIMITATIONS ON PREMIUMS.— 
(1) IN
GENERAL.—The premium established 
under a safety net may not exceed 125 percent of 
the applicable standard risk rate, except as provided 
in paragraph (2). 
(2) SURCHARGE
FOR
AVOIDABLE
HEALTH 
RISKS.—A safety net may impose a surcharge on 
premiums for individuals with avoidable high risks, 
such as smoking. 
(b) ADDITIONAL FUNDING.—A safety net shall pro-
vide for additional funding through an assessment on all 
health insurers, health service organizations, and health 
maintenance organizations in the State through a non-
profit association consisting of all such insurers and orga-
nizations doing business in the State on an equitable and 
pro rata basis consistent with section 201. 
SEC. 205. ADMINISTRATION. 
A safety net in a State shall be administered through 
a contract with 1 or more insurers or third party adminis-
trators operating in the State. 
SEC. 206. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums 
as may be necessary to reimburse States for their costs 
in administering this title.
TITLE III—INDIVIDUAL 
MEMBERSHIP ASSOCIATIONS 
SEC. 301. EXPANSION OF ACCESS AND CHOICE THROUGH 
INDIVIDUAL 
MEMBERSHIP 
ASSOCIATIONS 
(IMAS). 
The Public Health Service Act is amended by adding 
at the end the following new title: 
‘‘TITLE XXIX—INDIVIDUAL 
MEMBERSHIP ASSOCIATIONS 
‘‘SEC. 2901. DEFINITION OF INDIVIDUAL MEMBERSHIP AS-
SOCIATION (IMA). 
‘‘(a) IN GENERAL.—For purposes of this title, the 
terms ‘individual membership association’ and ‘IMA’ 
mean a legal entity that meets the following requirements: 
‘‘(1) ORGANIZATION.—The IMA is an organiza-
tion operated under the direction of an association 
(as defined in section 2904(1)). 
‘‘(2) 
OFFERING
HEALTH
BENEFITS
COV-
ERAGE.— 
‘‘(A) DIFFERENT GROUPS.—The IMA, in 
conjunction with those health insurance issuers 
that offer health benefits coverage through the 
IMA, makes available health benefits coverage 
in the manner described in subsection (b) to all 
members of the IMA and the dependents of
such members in the manner described in sub-
section (c)(2) at rates that are established by 
the health insurance issuer or a policy or prod-
uct specific basis and that may vary only as 
permissible under State law. 
‘‘(B) NONDISCRIMINATION
IN
COVERAGE 
OFFERED.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the IMA may not offer health benefits 
coverage to a member of an IMA unless 
the same coverage is offered to all such 
members of the IMA. 
‘‘(ii) 
CONSTRUCTION.—Nothing 
in 
this title shall be construed as requiring or 
permitting a health insurance issuer to 
provide coverage outside the service area of 
the issuer, as approved under State law, or 
preventing a health insurance issuer from 
excluding or limiting the coverage on any 
individual, subject to the requirement of 
section 2741. 
‘‘(C) NO FINANCIAL UNDERWRITING.—The 
IMA provides health benefits coverage only 
through contracts with health insurance issuers
and does not assume insurance risk with re-
spect to such coverage. 
‘‘(3) GEOGRAPHIC AREAS.—Nothing in this title 
shall be construed as preventing the establishment 
and operation of more than one IMA in a geographic 
area or as limiting the number of IMAs that may 
operate in any area. 
‘‘(4) PROVISION OF ADMINISTRATIVE SERVICES 
TO PURCHASERS.— 
‘‘(A) IN GENERAL.—The IMA may provide 
administrative services for members. Such serv-
ices may include accounting, billing, and enroll-
ment information. 
‘‘(B) CONSTRUCTION.—Nothing in this 
subsection shall be construed as preventing an 
IMA from serving as an administrative service 
organization to any entity 
‘‘(5) FILING
INFORMATION.—The IMA files 
with the Secretary information that demonstrates 
the IMA’s compliance with the applicable require-
ments of this title. 
‘‘(b) HEALTH
BENEFITS
COVERAGE
REQUIRE-
MENTS.—
‘‘(1) COMPLIANCE
WITH
CONSUMER
PROTEC-
TION REQUIREMENTS.—Any health benefits coverage 
offered through an IMA shall— 
‘‘(A) be underwritten by a health insurance 
issuer that— 
‘‘(i) is licensed (or otherwise regu-
lated) under State law, 
‘‘(ii) meets all applicable State stand-
ards relating to consumer protection, sub-
ject to section 2902(2), and 
‘‘(iii) offers the coverage under a con-
tract with the IMA; and 
‘‘(B) subject to paragraph (2) and section 
2902(2), be approved or otherwise permitted to 
be offered under State law. 
‘‘(2) EXAMPLES OF TYPES OF COVERAGE.—The 
benefits coverage made available through an IMA 
may include, but is not limited to, any of the fol-
lowing if it meets the other applicable requirements 
of this title: 
‘‘(A) Coverage through a health mainte-
nance organization. 
‘‘(B) Coverage in connection with a pre-
ferred provider organization.
‘‘(C) Coverage in connection with a li-
censed provider-sponsored organization. 
‘‘(D) Indemnity coverage through an insur-
ance company. 
‘‘(E) Coverage offered in connection with a 
contribution into a medical savings account or 
flexible spending account. 
‘‘(F) Coverage that includes a point-of- 
service option. 
‘‘(G) Any combination of such types of 
coverage. 
‘‘(3) 
HEALTH
INSURANCE
COVERAGE
OP-
TIONS.—An IMA shall include a minimum of 2 
health insurance coverage options. At least 1 option 
shall meet all applicable State benefit mandates. 
‘‘(4) WELLNESS BONUSES FOR HEALTH PRO-
MOTION.—Nothing in this title shall be construed as 
precluding a health insurance issuer offering health 
benefits coverage through an IMA from establishing 
premium discounts or rebates for members or from 
modifying 
otherwise 
applicable 
copayments 
or 
deductibles in return for adherence to programs of 
health promotion and disease prevention so long as 
such programs are agreed to in advance by the IMA 
and comply with all other provisions of this title and