IB 
Union Calendar No. 256 
111TH CONGRESS 
2D SESSION 
H. R. 4872 
To provide for reconciliation pursuant to section 202 of the concurrent 
resolution on the budget for fiscal year 2010. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 17, 2010 
Mr. SPRATT from the Committee on the Budget, reported the following bill; 
which was committed to the Committee of the Whole House on the State 
of the Union and ordered to be printed 
A BILL 
To provide for reconciliation pursuant to section 202 of 
the concurrent resolution on the budget for fiscal year 2010. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Reconciliation Act of 
2010’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of divisions is as follows: 
DIVISION I—HOUSE COMMITTEE ON WAYS AND MEANS: HEALTH 
CARE REFORM 
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DIVISION II—HOUSE COMMITTEE ON EDUCATION AND LABOR: 
HEALTH CARE REFORM 
DIVISION III—HOUSE COMMITTEE ON EDUCATION AND LABOR: 
INVESTING IN EDUCATION 
DIVISION 
I—COMMITTEE 
ON 
WAYS AND MEANS: HEALTH 
CARE REFORM 
SEC. 1. SHORT TITLE; TABLE OF SUBDIVISIONS, TITLES, 
AND SUBTITLES. 
(a) SHORT TITLE.—This division may be cited as the 
‘‘America’s Affordable Health Choices Act of 2009’’. 
(b) TABLE OF SUBDIVISIONS, TITLES, AND SUB-
TITLES.—This division is divided into subdivisions, titles, 
and subtitles as follows: 
SUBDIVISION A—AFFORDABLE HEALTH CARE CHOICES 
Title I—Protections and Standards for Qualified Health Benefits Plans 
Subtitle A—General Standards 
Subtitle B—Standards Guaranteeing Access to Affordable Coverage 
Subtitle C—Standards Guaranteeing Access to Essential Benefits 
Subtitle D—Additional Consumer Protections 
Subtitle E—Governance 
Subtitle F—Relation to other requirements; Miscellaneous 
Subtitle G—Early Investments 
Title II—Health Insurance Exchange and Related Provisions 
Subtitle A—Health Insurance Exchange 
Subtitle B—Public health insurance option 
Subtitle C—Individual Affordability Credits 
Title III—Shared responsibility 
Subtitle A—Individual responsibility 
Subtitle B—Employer Responsibility 
Title IV—Amendments to Internal Revenue Code of 1986 
Subtitle A—Shared responsibility 
Subtitle B—Credit for small business employee health coverage expenses 
Subtitle C—Disclosures to carry out health insurance exchange subsidies 
Subtitle D—Other revenue provisions 
SUBDIVISION B—MEDICARE AND MEDICAID IMPROVEMENTS 
Title I—Improving Health Care Value 
Subtitle A—Provisions related to Medicare part A 
Subtitle B—Provisions Related to Part B 
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Subtitle C—Provisions Related to Medicare Parts A and B 
Subtitle D—Medicare Advantage Reforms 
Subtitle E—Improvements to Medicare Part D 
Subtitle F—Medicare Rural Access Protections 
Title II—Medicare Beneficiary Improvements 
Subtitle A—Improving and Simplifying Financial Assistance for Low Income 
Medicare Beneficiaries 
Subtitle B—Reducing Health Disparities 
Subtitle C—Miscellaneous Improvements 
Title III—Promoting Primary Care, Mental Health Services, and Coordinated 
Care 
Title IV—Quality 
Subtitle A—Comparative Effectiveness Research 
Subtitle B—Nursing Home Transparency 
Subtitle C—Quality Measurements 
Subtitle D—Physician Payments Sunshine Provision 
Subtitle E—Public Reporting on Health Care-Associated Infections 
Title V—Medicare Graduate Medical Education 
Title VI—Program Integrity 
Subtitle A—Increased funding to fight waste, fraud, and abuse 
Subtitle B—Enhanced penalties for fraud and abuse 
Subtitle C—Enhanced Program and Provider Protections 
Subtitle D—Access to Information Needed to Prevent Fraud, Waste, and Abuse 
Title VII—Medicaid and CHIP 
Subtitle A—Medicaid and Health Reform 
Subtitle B—Prevention 
Subtitle C—Access 
Subtitle D—Coverage 
Subtitle E—Financing 
Subtitle F—Waste, Fraud, and Abuse 
Subtitle G—Puerto Rico and the Territories 
Subtitle H—Miscellaneous 
Title VIII—Revenue-related provisions 
Title IX—Miscellaneous Provisions 
SUBDIVISION C—PUBLIC HEALTH AND WORKFORCE DEVELOPMENT 
Title I—Community Health Centers 
Title II—Workforce 
Subtitle A—Primary care workforce 
Subtitle B—Nursing workforce 
Subtitle C—Public Health Workforce 
Subtitle D—Adapting workforce to evolving health system needs 
Title III—Prevention and Wellness 
Title IV—Quality and Surveillance 
Title V—Other provisions 
Subtitle A—Drug discount for rural and other hospitals 
Subtitle B—School-Based health clinics 
Subtitle C—National medical device registry 
Subtitle D—Grants for comprehensive programs To provide education to nurses 
and create a pipeline to nursing 
Subtitle E—States failing To adhere to certain employment obligations 
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SUBDIVISION A—AFFORDABLE 
HEALTH CARE CHOICES 
SEC. 100. PURPOSE; TABLE OF CONTENTS OF SUBDIVISION; 
GENERAL DEFINITIONS. 
(a) PURPOSE.— 
(1) IN GENERAL.—The purpose of this subdivi-
sion is to provide affordable, quality health care for 
all Americans and reduce the growth in health care 
spending. 
(2) BUILDING
ON
CURRENT
SYSTEM.—This 
subdivision achieves this purpose by building on 
what works in today’s health care system, while re-
pairing the aspects that are broken. 
(3) INSURANCE REFORMS.—This subdivision— 
(A) enacts strong insurance market re-
forms; 
(B) creates a new Health Insurance Ex-
change, with a public health insurance option 
alongside private plans; 
(C) includes sliding scale affordability 
credits; and 
(D) initiates shared responsibility among 
workers, employers, and the government; 
so that all Americans have coverage of essential 
health benefits. 
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(4) HEALTH DELIVERY REFORM.—This subdivi-
sion institutes health delivery system reforms both to 
increase quality and to reduce growth in health 
spending so that health care becomes more afford-
able for businesses, families, and government. 
(b) TABLE OF CONTENTS OF SUBDIVISION.—The 
table of contents of this subdivision is as follows: 
Sec. 100. Purpose; table of contents of subdivision; general definitions. 
TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED 
HEALTH BENEFITS PLANS 
Subtitle A—General Standards 
Sec. 101. Requirements reforming health insurance marketplace. 
Sec. 102. Protecting the choice to keep current coverage. 
Subtitle B—Standards Guaranteeing Access to Affordable Coverage 
Sec. 111. Prohibiting pre-existing condition exclusions. 
Sec. 112. Guaranteed issue and renewal for insured plans. 
Sec. 113. Insurance rating rules. 
Sec. 114. Nondiscrimination in benefits; parity in mental health and substance 
abuse disorder benefits. 
Sec. 115. Ensuring adequacy of provider networks. 
Sec. 116. Ensuring value and lower premiums. 
Subtitle C—Standards Guaranteeing Access to Essential Benefits 
Sec. 121. Coverage of essential benefits package. 
Sec. 122. Essential benefits package defined. 
Sec. 123. Health Benefits Advisory Committee. 
Sec. 124. Process for adoption of recommendations; adoption of benefit stand-
ards. 
Subtitle D—Additional Consumer Protections 
Sec. 131. Requiring fair marketing practices by health insurers. 
Sec. 132. Requiring fair grievance and appeals mechanisms. 
Sec. 133. Requiring information transparency and plan disclosure. 
Sec. 134. Application to qualified health benefits plans not offered through the 
Health Insurance Exchange. 
Sec. 135. Timely payment of claims. 
Sec. 136. Standardized rules for coordination and subrogation of benefits. 
Sec. 137. Application of administrative simplification. 
Subtitle E—Governance 
Sec. 141. Health Choices Administration; Health Choices Commissioner. 
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Sec. 142. Duties and authority of Commissioner. 
Sec. 143. Consultation and coordination. 
Sec. 144.
Health Insurance Ombudsman. 
Subtitle F—Relation to Other Requirements; Miscellaneous 
Sec. 151. Relation to other requirements. 
Sec. 152. Prohibiting discrimination in health care. 
Sec. 153. Whistleblower protection. 
Sec. 154. Construction regarding collective bargaining. 
Sec. 155. Severability. 
Subtitle G—Early Investments 
Sec. 161. Ensuring value and lower premiums. 
Sec. 162. Ending health insurance rescission abuse. 
Sec. 163. Administrative simplification. 
Sec. 164. Reinsurance program for retirees. 
TITLE II—HEALTH INSURANCE EXCHANGE AND RELATED 
PROVISIONS 
Subtitle A—Health Insurance Exchange 
Sec. 201. Establishment of Health Insurance Exchange; outline of duties; defi-
nitions. 
Sec. 202. Exchange-eligible individuals and employers. 
Sec. 203. Benefits package levels. 
Sec. 204. Contracts for the offering of Exchange-participating health benefits 
plans. 
Sec. 205. Outreach and enrollment of Exchange-eligible individuals and employ-
ers in Exchange-participating health benefits plan. 
Sec. 206. Other functions. 
Sec. 207. Health Insurance Exchange Trust Fund. 
Sec. 208. Optional operation of State-based health insurance exchanges. 
Subtitle B—Public Health Insurance Option 
Sec. 221. Establishment and administration of a public health insurance option 
as an Exchange-qualified health benefits plan. 
Sec. 222. Premiums and financing. 
Sec. 223. Payment rates for items and services. 
Sec. 224. Modernized payment initiatives and delivery system reform. 
Sec. 225. Provider participation. 
Sec. 226. Application of fraud and abuse provisions. 
Subtitle C—Individual Affordability Credits 
Sec. 241. Availability through Health Insurance Exchange. 
Sec. 242. Affordable credit eligible individual. 
Sec. 243. Affordable premium credit. 
Sec. 244. Affordability cost-sharing credit. 
Sec. 245. Income determinations. 
Sec. 246. No Federal payment for undocumented aliens. 
TITLE III—SHARED RESPONSIBILITY 
Subtitle A—Individual Responsibility 
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Sec. 301. Individual responsibility. 
Subtitle B—Employer Responsibility 
PART 1—HEALTH COVERAGE PARTICIPATION REQUIREMENTS 
Sec. 311. Health coverage participation requirements. 
Sec. 312. Employer responsibility to contribute towards employee and depend-
ent coverage. 
Sec. 313. Employer contributions in lieu of coverage. 
Sec. 314. Authority related to improper steering. 
PART 2—SATISFACTION OF HEALTH COVERAGE PARTICIPATION 
REQUIREMENTS 
Sec. 321. Satisfaction of health coverage participation requirements under the 
Employee Retirement Income Security Act of 1974. 
Sec. 322. Satisfaction of health coverage participation requirements under the 
Internal Revenue Code of 1986. 
Sec. 323. Satisfaction of health coverage participation requirements under the 
Public Health Service Act. 
Sec. 324. Additional rules relating to health coverage participation require-
ments. 
TITLE IV—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 
Subtitle A—Shared Responsibility 
PART 1—INDIVIDUAL RESPONSIBILITY 
Sec. 401. Tax on individuals without acceptable health care coverage. 
PART 2—EMPLOYER RESPONSIBILITY 
Sec. 411. Election to satisfy health coverage participation requirements. 
Sec. 412. Responsibilities of nonelecting employers. 
Subtitle B—Credit for Small Business Employee Health Coverage Expenses 
Sec. 421. Credit for small business employee health coverage expenses. 
Subtitle C—Disclosures to Carry Out Health Insurance Exchange Subsidies 
Sec. 431. Disclosures to carry out health insurance exchange subsidies. 
Subtitle D—Other Revenue Provisions 
PART 1—GENERAL PROVISIONS 
Sec. 441. Surcharge on high income individuals. 
Sec. 442. Distributions for medicine qualified only if for prescribed drug or in-
sulin. 
Sec. 443. Delay in application of worldwide allocation of interest. 
PART 2—PREVENTION OF TAX AVOIDANCE 
Sec. 451. Limitation on treaty benefits for certain deductible payments. 
Sec. 452. Codification of economic substance doctrine. 
Sec. 453. Penalties for underpayments. 
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PART 3—PARITY IN HEALTH BENEFITS 
Sec. 461. Certain health related benefits applicable to spouses and dependents 
extended to eligible beneficiaries. 
(c) GENERAL DEFINITIONS.—Except as otherwise 
provided, in this subdivision: 
(1) ACCEPTABLE COVERAGE.—The term ‘‘ac-
ceptable coverage’’ has the meaning given such term 
in section 202(d)(2). 
(2) BASIC PLAN.—The term ‘‘basic plan’’ has 
the meaning given such term in section 203(c). 
(3) 
COMMISSIONER.—The 
term 
‘‘Commis-
sioner’’ means the Health Choices Commissioner es-
tablished under section 141. 
(4) COST-SHARING.—The term ‘‘cost-sharing’’ 
includes deductibles, coinsurance, copayments, and 
similar charges but does not include premiums or 
any network payment differential for covered serv-
ices or spending for non-covered services. 
(5) DEPENDENT.—The term ‘‘dependent’’ has 
the meaning given such term by the Commissioner 
and includes a spouse. 
(6) EMPLOYMENT-BASED HEALTH PLAN.—The 
term ‘‘employment-based health plan’’— 
(A) means a group health plan (as defined 
in section 733(a)(1) of the Employee Retire-
ment Income Security Act of 1974); and 
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(B) includes such a plan that is the fol-
lowing: 
(i) FEDERAL, STATE, AND
TRIBAL 
GOVERNMENTAL PLANS.—A governmental 
plan (as defined in section 3(32) of the 
Employee Retirement Income Security Act 
of 1974), including a health benefits plan 
offered under chapter 89 of title 5, United 
States Code. 
(ii) CHURCH PLANS.—A church plan 
(as defined in section 3(33) of the Em-
ployee Retirement Income Security Act of 
1974). 
(7) ENHANCED
PLAN.—The term ‘‘enhanced 
plan’’ has the meaning given such term in section 
203(c). 
(8) ESSENTIAL BENEFITS PACKAGE.—The term 
‘‘essential benefits package’’ is defined in section 
122(a). 
(9) FAMILY.—The term ‘‘family’’ means an in-
dividual and includes the individual’s dependents. 
(10) FEDERAL
POVERTY
LEVEL; FPL.—The 
terms ‘‘Federal poverty level’’ and ‘‘FPL’’ have the 
meaning given the term ‘‘poverty line’’ in section 
673(2) of the Community Services Block Grant Act 
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(42 U.S.C. 9902(2)), including any revision required 
by such section. 
(11) HEALTH
BENEFITS
PLAN.—The terms 
‘‘health benefits plan’’ means health insurance cov-
erage and an employment-based health plan and in-
cludes the public health insurance option. 
(12) HEALTH INSURANCE COVERAGE; HEALTH 
INSURANCE ISSUER.—The terms ‘‘health insurance 
coverage’’ and ‘‘health insurance issuer’’ have the 
meanings given such terms in section 2791 of the 
Public Health Service Act. 
(13) HEALTH
INSURANCE
EXCHANGE.—The 
term ‘‘Health Insurance Exchange’’ means the 
Health Insurance Exchange established under sec-
tion 201. 
(14) MEDICAID.—The term ‘‘Medicaid’’ means 
a State plan under title XIX of the Social Security 
Act (whether or not the plan is operating under a 
waiver under section 1115 of such Act). 
(15) MEDICARE.—The term ‘‘Medicare’’ means 
the health insurance programs under title XVIII of 
the Social Security Act. 
(16) PLAN SPONSOR.—The term ‘‘plan spon-
sor’’ has the meaning given such term in section 
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3(16)(B) of the Employee Retirement Income Secu-
rity Act of 1974. 
(17) PLAN
YEAR.—The term ‘‘plan year’’ 
means— 
(A) with respect to an employment-based 
health plan, a plan year as specified under such 
plan; or 
(B) with respect to a health benefits plan 
other than an employment-based health plan, a 
12-month period as specified by the Commis-
sioner. 
(18) PREMIUM PLAN; PREMIUM-PLUS PLAN.— 
The terms ‘‘premium plan’’ and ‘‘premium-plus 
plan’’ have the meanings given such terms in section 
203(c). 
(19) QHBP OFFERING
ENTITY.—The terms 
‘‘QHBP offering entity’’ means, with respect to a 
health benefits plan that is— 
(A) a group health plan (as defined, sub-
ject to subsection (d), in section 733(a)(1) of 
the Employee Retirement Income Security Act 
of 1974), the plan sponsor in relation to such 
group health plan, except that, in the case of a 
plan maintained jointly by 1 or more employers 
and 1 or more employee organizations and with 
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respect to which an employer is the primary 
source of financing, such term means such em-
ployer; 
(B) health insurance coverage, the health 
insurance issuer offering the coverage; 
(C) the public health insurance option, the 
Secretary of Health and Human Services; 
(D) a non-Federal governmental plan (as 
defined in section 2791(d) of the Public Health 
Service Act), the State or political subdivision 
of a State (or agency or instrumentality of such 
State or subdivision) which establishes or main-
tains such plan; or 
(E) a Federal governmental plan (as de-
fined in section 2791(d) of the Public Health 
Service Act), the appropriate Federal official. 
(20) QUALIFIED
HEALTH
BENEFITS
PLAN.— 
The term ‘‘qualified health benefits plan’’ means a 
health benefits plan that meets the requirements for 
such a plan under title I and includes the public 
health insurance option. 
(21) PUBLIC
HEALTH
INSURANCE
OPTION.— 
The term ‘‘public health insurance option’’ means 
the public health insurance option as provided under 
subtitle B of title II. 
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TITLE 
I—PROTECTIONS 
AND 
STANDARDS FOR QUALIFIED 
HEALTH BENEFITS PLANS 
Subtitle A—General Standards 
SEC. 101. REQUIREMENTS REFORMING HEALTH INSUR-
ANCE MARKETPLACE. 
(a) PURPOSE.—The purpose of this title is to estab-
lish standards to ensure that new health insurance cov-
erage and employment-based health plans that are offered 
meet standards guaranteeing access to affordable cov-
erage, essential benefits, and other consumer protections. 
(b) REQUIREMENTS FOR QUALIFIED HEALTH BENE-
FITS PLANS.—On or after the first day of Y1, a health 
benefits plan shall not be a qualified health benefits plan 
under this subdivision unless the plan meets the applicable 
requirements of the following subtitles for the type of plan 
and plan year involved: 
(1) Subtitle B (relating to affordable coverage). 
(2) Subtitle C (relating to essential benefits). 
(3) Subtitle D (relating to consumer protec-
tion). 
(c) TERMINOLOGY.—In this subdivision: 
(1) 
ENROLLMENT
IN
EMPLOYMENT-BASED 
HEALTH PLANS.—An individual shall be treated as 
being ‘‘enrolled’’ in an employment-based health 
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plan if the individual is a participant or beneficiary 
(as such terms are defined in section 3(7) and 3(8), 
respectively, of the Employee Retirement Income Se-
curity Act of 1974) in such plan. 
(2) INDIVIDUAL AND GROUP HEALTH INSUR-
ANCE COVERAGE.—The terms ‘‘individual health in-
surance coverage’’ and ‘‘group health insurance cov-
erage’’ mean health insurance coverage offered in 
the individual market or large or small group mar-
ket, respectively, as defined in section 2791 of the 
Public Health Service Act. 
SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT 
COVERAGE. 
(a) GRANDFATHERED HEALTH INSURANCE COV-
ERAGE DEFINED.—Subject to the succeeding provisions of 
this section, for purposes of establishing acceptable cov-
erage under this subdivision, the term ‘‘grandfathered 
health insurance coverage’’ means individual health insur-
ance coverage that is offered and in force and effect before 
the first day of Y1 if the following conditions are met: 
(1) LIMITATION ON NEW ENROLLMENT.— 
(A) IN GENERAL.—Except as provided in 
this paragraph, the individual health insurance 
issuer offering such coverage does not enroll 
any individual in such coverage if the first ef-
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fective date of coverage is on or after the first 
day of Y1. 
(B) 
DEPENDENT
COVERAGE
PER-
MITTED.—Subparagraph (A) shall not affect 
the subsequent enrollment of a dependent of an 
individual who is covered as of such first day. 
(2) LIMITATION
ON
CHANGES
IN
TERMS
OR 
CONDITIONS.—Subject to paragraph (3) and except 
as required by law, the issuer does not change any 
of its terms or conditions, including benefits and 
cost-sharing, from those in effect as of the day be-
fore the first day of Y1. 
(3) RESTRICTIONS ON PREMIUM INCREASES.— 
The issuer cannot vary the percentage increase in 
the premium for a risk group of enrollees in specific 
grandfathered health insurance coverage without 
changing the premium for all enrollees in the same 
risk group at the same rate, as specified by the 
Commissioner. 
(b) GRACE PERIOD FOR CURRENT EMPLOYMENT- 
BASED HEALTH PLANS.— 
(1) GRACE PERIOD.— 
(A) IN
GENERAL.—The Commissioner 
shall establish a grace period whereby, for plan 
years beginning after the end of the 5-year pe-
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riod beginning with Y1, an employment-based 
health plan in operation as of the day before 
the first day of Y1 must meet the same require-
ments as apply to a qualified health benefits 
plan under section 101, including the essential 
benefit package requirement under section 121. 
(B) EXCEPTION FOR LIMITED BENEFITS 
PLANS.—Subparagraph (A) shall not apply to 
an employment-based health plan in which the 
coverage consists only of one or more of the fol-
lowing: 
(i) Any coverage described in section 
3001(a)(1)(B)(ii)(IV) of division B of the 
American Recovery and Reinvestment Act 
of 2009 (PL 111–5). 
(ii) Excepted benefits (as defined in 
section 733(c) of the Employee Retirement 
Income Security Act of 1974), including 
coverage under a specified disease or ill-
ness policy described in paragraph (3)(A) 
of such section. 
(iii) Such other limited benefits as the 
Commissioner may specify. 
In no case shall an employment-based health 
plan in which the coverage consists only of one 
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or more of the coverage or benefits described in 
clauses (i) through (iii) be treated as acceptable 
coverage under this subdivision 
(2) TRANSITIONAL
TREATMENT
AS
ACCEPT-
ABLE COVERAGE.—During the grace period specified 
in paragraph (1)(A), an employment-based health 
plan that is described in such paragraph shall be 
treated as acceptable coverage under this subdivi-
sion. 
(c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE 
COVERAGE.— 
(1) IN GENERAL.—Individual health insurance 
coverage that is not grandfathered health insurance 
coverage under subsection (a) may only be offered 
on or after the first day of Y1 as an Exchange-par-
ticipating health benefits plan. 
(2) SEPARATE, EXCEPTED
COVERAGE
PER-
MITTED.—Excepted benefits (as defined in section 
2791(c) of the Public Health Service Act) are not 
included within the definition of health insurance 
coverage. Nothing in paragraph (1) shall prevent the 
offering, other than through the Health Insurance 
Exchange, of excepted benefits so long as it is of-
fered and priced separately from health insurance 
coverage. 
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Subtitle 
B—Standards 
Guaran-
teeing Access to Affordable Cov-
erage 
SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLU-
SIONS. 
A qualified health benefits plan may not impose any 
pre-existing condition exclusion (as defined in section 
2701(b)(1)(A) of the Public Health Service Act) or other-
wise impose any limit or condition on the coverage under 
the plan with respect to an individual or dependent based 
on any health status-related factors (as defined in section 
2791(d)(9) of the Public Health Service Act) in relation 
to the individual or dependent. 
SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR IN-
SURED PLANS. 
The requirements of sections 2711 (other than sub-
sections (c) and (e)) and 2712 (other than paragraphs (3), 
and (6) of subsection (b) and subsection (e)) of the Public 
Health Service Act, relating to guaranteed availability and 
renewability of health insurance coverage, shall apply to 
individuals and employers in all individual and group 
health insurance coverage, whether offered to individuals 
or employers through the Health Insurance Exchange, 
through any employment-based health plan, or otherwise, 
in the same manner as such sections apply to employers 
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and health insurance coverage offered in the small group 
market, except that such section 2712(b)(1) shall apply 
only if, before nonrenewal or discontinuation of coverage, 
the issuer has provided the enrollee with notice of non- 
payment of premiums and there is a grace period during 
which the enrollees has an opportunity to correct such 
nonpayment. Rescissions of such coverage shall be prohib-
ited except in cases of fraud as defined in sections 
2712(b)(2) of such Act. 
SEC. 113. INSURANCE RATING RULES. 
(a) IN GENERAL.—The premium rate charged for an 
insured qualified health benefits plan may not vary except 
as follows: 
(1) LIMITED AGE VARIATION PERMITTED.—By 
age (within such age categories as the Commissioner 
shall specify) so long as the ratio of the highest such 
premium to the lowest such premium does not ex-
ceed the ratio of 2 to 1. 
(2) BY
AREA.—By premium rating area (as 
permitted by State insurance regulators or, in the 
case of Exchange-participating health benefits plans, 
as specified by the Commissioner in consultation 
with such regulators). 
(3) BY FAMILY ENROLLMENT.—By family en-
rollment (such as variations within categories and 
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compositions of families) so long as the ratio of the 
premium for family enrollment (or enrollments) to 
the premium for individual enrollment is uniform, as 
specified under State law and consistent with rules 
of the Commissioner. 
(b) STUDY AND REPORTS.— 
(1) STUDY.—The Commissioner, in coordina-
tion with the Secretary of Health and Human Serv-
ices and the Secretary of Labor, shall conduct a 
study of the large group insured and self-insured 
employer health care markets. Such study shall ex-
amine the following: 
(A) The types of employers by key charac-
teristics, including size, that purchase insured 
products versus those that self-insure. 
(B) The similarities and differences be-
tween typical insured and self-insured health 
plans. 
(C) The financial solvency and capital re-
serve levels of employers that self-insure by em-
ployer size. 
(D) The risk of self-insured employers not 
being able to pay obligations or otherwise be-
coming financially insolvent. 
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(E) The extent to which rating rules are 
likely to cause adverse selection in the large 
group market or to encourage small and mid 
size employers to self-insure 
(2) REPORTS.—Not later than 18 months after 
the date of the enactment of this Act, the Commis-
sioner shall submit to Congress and the applicable 
agencies a report on the study conducted under 
paragraph (1). Such report shall include any rec-
ommendations the Commissioner deems appropriate 
to ensure that the law does not provide incentives 
for small and mid-size employers to self-insure or 
create adverse selection in the risk pools of large 
group insurers and self-insured employers. Not later 
than 18 months after the first day of Y1, the Com-
missioner shall submit to Congress and the applica-
ble agencies an updated report on such study, in-
cluding updates on such recommendations. 
SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN 
MENTAL HEALTH AND SUBSTANCE ABUSE 
DISORDER BENEFITS. 
(a) NONDISCRIMINATION IN BENEFITS.—A qualified 
health benefits plan shall comply with standards estab-
lished by the Commissioner to prohibit discrimination in 
health benefits or benefit structures for qualifying health 
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benefits plans, building from sections 702 of Employee 
Retirement Income Security Act of 1974, 2702 of the 
Public Health Service Act, and section 9802 of the Inter-
nal Revenue Code of 1986. 
(b) PARITY IN MENTAL HEALTH AND SUBSTANCE 
ABUSE DISORDER BENEFITS.—To the extent such provi-
sions are not superceded by or inconsistent with subtitle 
C, the provisions of section 2705 (other than subsections 
(a)(1), (a)(2), and (c)) of section 2705 of the Public 
Health Service Act shall apply to a qualified health bene-
fits plan, regardless of whether it is offered in the indi-
vidual or group market, in the same manner as such provi-
sions apply to health insurance coverage offered in the 
large group market. 
SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS. 
(a) IN GENERAL.—A qualified health benefits plan 
that uses a provider network for items and services shall 
meet such standards respecting provider networks as the 
Commissioner may establish to assure the adequacy of 
such networks in ensuring enrollee access to such items 
and services and transparency in the cost-sharing differen-
tials between in-network coverage and out-of-network cov-
erage. 
(b) PROVIDER NETWORK DEFINED.—In this subdivi-
sion, the term ‘‘provider network’’ means the providers 
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with respect to which covered benefits, treatments, and 
services are available under a health benefits plan. 
SEC. 116. ENSURING VALUE AND LOWER PREMIUMS. 
(a) IN GENERAL.—A qualified health benefits plan 
shall meet a medical loss ratio as defined by the Commis-
sioner. For any plan year in which the qualified health 
benefits plan does not meet such medical loss ratio, QHBP 
offering entity shall provide in a manner specified by the 
Commissioner for rebates to enrollees of payment suffi-
cient to meet such loss ratio. 
(b) BUILDING
ON
INTERIM
RULES.—In imple-
menting subsection (a), the Commissioner shall build on 
the definition and methodology developed by the Secretary 
of Health and Human Services under the amendments 
made by section 161 for determining how to calculate the 
medical loss ratio. Such methodology shall be set at the 
highest level medical loss ratio possible that is designed 
to ensure adequate participation by QHBP offering enti-
ties, competition in the health insurance market in and 
out of the Health Insurance Exchange, and value for con-
sumers so that their premiums are used for services. 
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Subtitle 
C—Standards 
Guaran-
teeing Access to Essential Bene-
fits 
SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE. 
(a) IN GENERAL.—A qualified health benefits plan 
shall provide coverage that at least meets the benefit 
standards adopted under section 124 for the essential ben-
efits package described in section 122 for the plan year 
involved. 
(b) CHOICE OF COVERAGE.— 
(1) NON-EXCHANGE-PARTICIPATING
HEALTH 
BENEFITS PLANS.—In the case of a qualified health 
benefits plan that is not an Exchange-participating 
health benefits plan, such plan may offer such cov-
erage in addition to the essential benefits package as 
the QHBP offering entity may specify. 
(2) EXCHANGE-PARTICIPATING HEALTH BENE-
FITS PLANS.—In the case of an Exchange-partici-
pating health benefits plan, such plan is required 
under section 203 to provide specified levels of bene-
fits and, in the case of a plan offering a premium- 
plus level of benefits, provide additional benefits. 
(3) CONTINUATION OF OFFERING OF SEPARATE 
EXCEPTED BENEFITS COVERAGE.—Nothing in this 
subdivision shall be construed as affecting the offer-
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dcolon on DSK2BSOYB1PROD with BILLS
ing of health benefits in the form of excepted bene-
fits (described in section 102(b)(1)(B)(ii)) if such 
benefits are offered under a separate policy, con-
tract, or certificate of insurance. 
(c) NO RESTRICTIONS ON COVERAGE UNRELATED 
TO CLINICAL APPROPRIATENESS.—A qualified health ben-
efits plan may not impose any restriction (other than cost- 
sharing) unrelated to clinical appropriateness on the cov-
erage of the health care items and services. 
SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED. 
(a) IN GENERAL.—In this subdivision, the term ‘‘es-
sential benefits package’’ means health benefits coverage, 
consistent with standards adopted under section 124 to 
ensure the provision of quality health care and financial 
security, that— 
(1) provides payment for the items and services 
described in subsection (b) in accordance with gen-
erally accepted standards of medical or other appro-
priate clinical or professional practice; 
(2) limits cost-sharing for such covered health 
care items and services in accordance with such ben-
efit standards, consistent with subsection (c); 
(3) does not impose any annual or lifetime limit 
on the coverage of covered health care items and 
services; 
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dcolon on DSK2BSOYB1PROD with BILLS
(4) complies with section 115(a) (relating to 
network adequacy); and 
(5) is equivalent, as certified by Office of the 
Actuary of the Centers for Medicare & Medicaid 
Services, to the average prevailing employer-spon-
sored coverage. 
(b) MINIMUM SERVICES
TO BE COVERED.—The 
items and services described in this subsection are the fol-
lowing: 
(1) Hospitalization. 
(2) Outpatient hospital and outpatient clinic 
services, including emergency department services. 
(3) Professional services of physicians and other 
health professionals. 
(4) Such services, equipment, and supplies inci-
dent to the services of a physician’s or a health pro-
fessional’s delivery of care in institutional settings, 
physician offices, patients’ homes or place of resi-
dence, or other settings, as appropriate. 
(5) Prescription drugs. 
(6) Rehabilitative and habilitative services. 
(7) Mental health and substance use disorder 
services. 
(8) Preventive services, including those services 
recommended with a grade of A or B by the Task 
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dcolon on DSK2BSOYB1PROD with BILLS
Force on Clinical Preventive Services and those vac-
cines recommended for use by the Director of the 
Centers for Disease Control and Prevention. 
(9) Maternity care. 
(10) Well baby and well child care and oral 
health, vision, and hearing services, equipment, and 
supplies at least for children under 21 years of age. 
(c) REQUIREMENTS RELATING
TO COST-SHARING 
AND MINIMUM ACTUARIAL VALUE.— 
(1) NO COST-SHARING FOR PREVENTIVE SERV-
ICES.—There shall be no cost-sharing under the es-
sential benefits package for preventive items and 
services (as specified under the benefit standards), 
including well baby and well child care. 
(2) ANNUAL LIMITATION.— 
(A) ANNUAL LIMITATION.—The cost-shar-
ing incurred under the essential benefits pack-
age with respect to an individual (or family) for 
a year does not exceed the applicable level spec-
ified in subparagraph (B). 
(B) APPLICABLE LEVEL.—The applicable 
level specified in this subparagraph for Y1 is 
$5,000 for an individual and $10,000 for a 
family. Such levels shall be increased (rounded 
to the nearest $100) for each subsequent year 
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standards and shall determine whether to propose 
adoption of such standards as a package. 
(2) DETERMINATION TO ADOPT STANDARDS.— 
If the Secretary determines— 
(A) to propose adoption of benefit stand-
ards so recommended as a package, the Sec-
retary shall, by regulation under section 553 of 
title 5, United States Code, propose adoption 
such standards; or 
(B) not to propose adoption of such stand-
ards as a package, the Secretary shall notify 
the Health Benefits Advisory Committee in 
writing of such determination and the reasons 
for not proposing the adoption of such rec-
ommendation and provide the Committee with a 
further opportunity to modify its previous rec-
ommendations and submit new recommenda-
tions to the Secretary on a timely basis. 
(3) CONTINGENCY.—If, because of the applica-
tion of paragraph (2)(B), the Secretary would other-
wise be unable to propose initial adoption of such 
recommended standards by the deadline specified in 
subsection (b)(1), the Secretary shall, by regulation 
under section 553 of title 5, United States Code, 
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(2) SECOND YEAR.—In Y2— 
(A) individuals and employers described in 
paragraph (1); and 
(B) smaller employers described in sub-
section (e)(2). 
(3) THIRD AND SUBSEQUENT YEARS.—In Y3 
and subsequent years— 
(A) individuals and employers described in 
paragraph (2); and 
(B) larger employers as permitted by the 
Commissioner under subsection (e)(3). 
(d) INDIVIDUALS.— 
(1) INDIVIDUAL
DESCRIBED.—Subject to the 
succeeding provisions of this subsection, an indi-
vidual described in this paragraph is an individual 
who— 
(A) is not enrolled in coverage described in 
subparagraphs (C) through (F) of paragraph 
(2); and 
(B) is not enrolled in coverage as a full- 
time employee (or as a dependent of such an 
employee) under a group health plan if the cov-
erage and an employer contribution under the 
plan meet the requirements of section 312. 
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SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE- 
PARTICIPATING HEALTH BENEFITS PLANS. 
(a) CONTRACTING DUTIES.—In carrying out section 
201(b)(1) and consistent with this subtitle: 
(1) OFFERING
ENTITY
AND
PLAN
STAND-
ARDS.—The Commissioner shall— 
(A) establish standards necessary to imple-
ment the requirements of this title and title I 
for— 
(i) QHBP offering entities for the of-
fering of an Exchange-participating health 
benefits plan; and 
(ii) for Exchange-participating health 
benefits plans; and 
(B) certify QHBP offering entities and 
qualified health benefits plans as meeting such 
standards and requirements of this title and 
title I for purposes of this subtitle. 
(2) SOLICITING AND NEGOTIATING BIDS; CON-
TRACTS.—The Commissioner shall— 
(A) solicit bids from QHBP offering enti-
ties for the offering of Exchange-participating 
health benefits plans; 
(B) based upon a review of such bids, ne-
gotiate with such entities for the offering of 
such plans; and 
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