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‘‘(k) CERTAIN QUALIFIED HEALTH BENEFIT PUR-
CHASING COALITION DISTRIBUTIONS.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(g), sections 170, 501, 507, 509, and 2522, and this 
chapter, a qualified health benefit purchasing coali-
tion distribution by a private foundation shall be 
considered to be a distribution for a charitable pur-
pose. 
‘‘(2) 
QUALIFIED
HEALTH
BENEFIT
PUR-
CHASING COALITION DISTRIBUTION.—For purposes 
of paragraph (1)—
‘‘(A) IN
GENERAL.—The term ‘qualified 
health benefit purchasing coalition distribution’ 
means any amount paid or incurred by a pri-
vate foundation to or on behalf of a qualified 
health benefit purchasing coalition (as defined 
in section 9841) for purposes of payment or re-
imbursement of amounts paid or incurred in 
connection with the establishment and mainte-
nance of such coalition. 
‘‘(B) EXCLUSIONS.—Such term shall not 
include any amount used by a qualified health 
benefit purchasing coalition (as so defined)—
‘‘(i) for the purchase of real property,
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‘‘(ii) as payment to, or for the benefit 
of, members (or employees or affiliates of 
such members) of such coalition, or 
‘‘(iii) for any expense paid or incurred 
more than 48 months after the date of es-
tablishment of such coalition. 
‘‘(3) TERMINATION.—This subsection shall not 
apply—
‘‘(A) to qualified health benefit purchasing 
coalition distributions paid or incurred after 
December 31, 2012, and 
‘‘(B) with respect to start-up costs of a co-
alition which are paid or incurred after Decem-
ber 31, 2013.’’. 
(b) QUALIFIED HEALTH BENEFIT PURCHASING CO-
ALITION.—
(1) IN GENERAL.—Chapter 100 of such Code 
(relating to group health plan requirements) is 
amended by adding at the end the following new 
subchapter: 
‘‘Subchapter D—Qualified Health Benefit 
Purchasing Coalition
‘‘Sec. 9841. Qualified health benefit purchasing coalition.
215
‘‘SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING CO-
ALITION. 
‘‘(a) IN GENERAL.—A qualified health benefit pur-
chasing coalition is a private not-for-profit corporation 
which—
‘‘(1) sells health insurance through State li-
censed health insurance issuers in the State in which 
the employers to which such coalition is providing 
insurance are located, and 
‘‘(2) establishes to the Secretary, under State 
certification procedures or other procedures as the 
Secretary may provide by regulation, that such coali-
tion meets the requirements of this section. 
‘‘(b) BOARD OF DIRECTORS.—
‘‘(1) IN GENERAL.—Each purchasing coalition 
under this section shall be governed by a Board of 
Directors. 
‘‘(2) ELECTION.—The Secretary shall establish 
procedures governing election of such Board. 
‘‘(3) MEMBERSHIP.—The Board of Directors 
shall—
‘‘(A) be composed of representatives of the 
members of the coalition, in equal number, in-
cluding small employers and employee rep-
resentatives of such employers, but
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‘‘(B) not include other interested parties, 
such as service providers, health insurers, or in-
surance agents or brokers which may have a 
conflict of interest with the purposes of the coa-
lition. 
‘‘(c) MEMBERSHIP OF COALITION.—
‘‘(1) IN
GENERAL.—A purchasing coalition 
shall accept all small employers residing within the 
area served by the coalition as members if such em-
ployers request such membership. 
‘‘(2) OTHER MEMBERS.—The coalition, at the 
discretion of its Board of Directors, may be open to 
individuals and large employers. 
‘‘(3) VOTING.—Members of a purchasing coali-
tion shall have voting rights consistent with the rules 
established by the State. 
‘‘(d) DUTIES OF PURCHASING COALITIONS.—Each 
purchasing coalition shall—
‘‘(1) enter into agreements with small employ-
ers (and, at the discretion of its Board, with individ-
uals and other employers) to provide health insur-
ance benefits to employees and retirees of such em-
ployers,
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‘‘(2) where feasible, enter into agreements with 
3 or more unaffiliated, qualified licensed health 
plans, to offer benefits to members, 
‘‘(3) offer to members at least 1 open enroll-
ment period of at least 30 days per calendar year, 
‘‘(4) serve a significant geographical area and 
market to all eligible members in that area, and 
‘‘(5) carry out other functions provided for 
under this section. 
‘‘(e) LIMITATION ON ACTIVITIES.—A purchasing coa-
lition shall not—
‘‘(1) perform any activity (including certifi-
cation or enforcement) relating to compliance or li-
censing of health plans, 
‘‘(2) assume insurance or financial risk in rela-
tion to any health plan, or 
‘‘(3) perform other activities identified by the 
State as being inconsistent with the performance of 
its duties under this section. 
‘‘(f) ADDITIONAL REQUIREMENTS FOR PURCHASING 
COALITIONS.—As provided by the Secretary in regula-
tions, a purchasing coalition shall be subject to require-
ments similar to the requirements of a group health plan 
under this chapter. 
‘‘(g) RELATION TO OTHER LAWS.—