pool program (in this section referred to as the ‘‘pro-
gram’’) to provide health benefits to eligible individuals 
during the period beginning on January 1, 2010, and, sub-
ject to subsection (h)(3)(B), ending on the date on which 
the Health Insurance Exchange is established. 
(b) ADMINISTRATION.—The Secretary may carry out 
this section directly or, pursuant to agreements, grants, 
or contracts with States, through State high-risk pool pro-
grams provided that the requirements of this section are 
met. 
(c) ELIGIBILITY.—For purposes of this section, the 
term ‘‘eligible individual’’ means an individual— 
(1) who— 
(A) is not eligible for— 
(i) benefits under title XVIII, XIX, or 
XXI of the Social Security Act; or 
(ii) coverage under an employment- 
based health plan (not including coverage 
under a COBRA continuation provision, as 
defined in section 107(d)(1)); and 
(B) who— 
(i) is an eligible individual under sec-
tion 2741(b) of the Public Health Service 
Act; or 
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(ii) is medically eligible for the pro-
gram by virtue of being an individual de-
scribed in subsection (d) at any time dur-
ing the 6-month period ending on the date 
the individual applies for high-risk pool 
coverage under this section; 
(2) who is the spouse or dependent of an indi-
vidual who is described in paragraph (1); or 
(3) who has not had health insurance coverage 
or coverage under an employment-based health plan 
for at least the 6-month period immediately pre-
ceding the date of the individual’s application for 
high-risk pool coverage under this section. 
For purposes of paragraph (1)(A)(ii), a person who is in 
a waiting period as defined in section 2701(b)(4) of the 
Public Health Service Act shall not be considered to be 
eligible for coverage under an employment-based health 
plan. 
(d) MEDICALLY
ELIGIBLE
REQUIREMENTS.—For 
purposes of subsection (c)(1)(B)(ii), an individual de-
scribed in this subsection is an individual— 
(1) who, during the 6-month period ending on 
the date the individual applies for high-risk pool cov-
erage under this section applied for individual health 
insurance coverage and— 
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(A) was denied such coverage because of a 
preexisting condition or health status; or 
(B) was offered such coverage— 
(i) under terms that limit the cov-
erage for such a preexisting condition; or 
(ii) at a premium rate that is above 
the premium rate for high risk pool cov-
erage under this section; or 
(2) who has an eligible medical condition as de-
fined by the Secretary. 
In making a determination under paragraph (1) of wheth-
er an individual was offered individual coverage at a pre-
mium rate above the premium rate for high risk pool cov-
erage, the Secretary shall make adjustments to offset dif-
ferences in premium rating that are attributable solely to 
differences in age rating. 
(e) ENROLLMENT.—To enroll in coverage in the pro-
gram, an individual shall— 
(1) submit to the Secretary an application for 
participation in the program, at such time, in such 
manner, and containing such information as the Sec-
retary shall require; 
(2) attest that the individual is an eligible indi-
vidual and is a resident of one of the 50 States or 
the District of Columbia; and 
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(3) if the individual had other prior health in-
surance coverage or coverage under an employment- 
based health plan during the previous 6 months, 
provide information as to the nature and source of 
such coverage and reasons for its discontinuance. 
(f) PROTECTION AGAINST DUMPING RISKS BY IN-
SURERS.— 
(1) IN GENERAL.—The Secretary shall establish 
criteria for determining whether health insurance 
issuers and employment-based health plans have dis-
couraged an individual from remaining enrolled in 
prior coverage based on that individual’s health sta-
tus. 
(2) SANCTIONS.—An issuer or employment- 
based health plan shall be responsible for reimburs-
ing the program for the medical expenses incurred 
by the program for an individual who, based on cri-
teria established by the Secretary, the Secretary 
finds was encouraged by the issuer to disenroll from 
health benefits coverage prior to enrolling in the pro-
gram. The criteria shall include at least the fol-
lowing circumstances: 
(A) In the case of prior coverage obtained 
through an employer, the provision by the em-
ployer, group health plan, or the issuer of 
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money or other financial consideration for 
disenrolling from the coverage. 
(B) In the case of prior coverage obtained 
directly from an issuer or under an employ-
ment-based health plan— 
(i) the provision by the issuer or plan 
of money or other financial consideration 
for disenrolling from the coverage; or 
(ii) in the case of an individual whose 
premium for the prior coverage exceeded 
the premium required by the program (ad-
justed based on the age factors applied to 
the prior coverage)— 
(I) the prior coverage is a policy 
that is no longer being actively mar-
keted (as defined by the Secretary) by 
the issuer; or 
(II) the prior coverage is a policy 
for which duration of coverage form 
issue or health status are factors that 
can be considered in determining pre-
miums at renewal. 
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as constituting exclusive 
remedies for violations of criteria established under 
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paragraph (1) or as preventing States from applying 
or enforcing such paragraph or other provisions 
under law with respect to health insurance issuers. 
(g) COVERED BENEFITS, COST-SHARING, PREMIUMS, 
AND CONSUMER PROTECTIONS.— 
(1) PREMIUM.—The monthly premium charged 
to eligible individuals for coverage under the pro-
gram— 
(A) may vary by age so long as the ratio 
of the highest such premium to the lowest such 
premium does not exceed the ratio of 2 to 1; 
(B) shall be set at a level that does not ex-
ceed 125 percent of the prevailing standard rate 
for comparable coverage in the individual mar-
ket; and 
(C) shall be adjusted for geographic vari-
ation in costs. 
Health insurance issuers shall provide such informa-
tion as the Secretary may require to determine pre-
vailing standard rates under this paragraph. The 
Secretary shall establish standard rates in consulta-
tion with the National Association of Insurance 
Commissioners. 
(2) COVERED
BENEFITS.—Covered benefits 
under the program shall be determined by the Sec-
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retary and shall be consistent with the basic cat-
egories in the essential benefits package described in 
section 222. Under such benefits package— 
(A) the annual deductible for such benefits 
may not be higher than $1,500 for an indi-
vidual or such higher amount for a family as 
determined by the Secretary; 
(B) there may not be annual or lifetime 
limits; and 
(C) the maximum cost-sharing with respect 
to an individual (or family) for a year shall not 
exceed $5,000 for an individual (or $10,000 for 
a family). 
(3) NO
PREEXISTING
CONDITION
EXCLUSION 
PERIODS.—No preexisting condition exclusion period 
shall be imposed on coverage under the program. 
(4) APPEALS.—The Secretary shall establish an 
appeals process for individuals to appeal a deter-
mination of the Secretary— 
(A) with respect to claims submitted under 
this section; and 
(B) with respect to eligibility determina-
tions made by the Secretary under this section. 
(5) STATE
CONTRIBUTION, MAINTENANCE
OF 
EFFORT.—As a condition of providing health bene-
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fits under this section to eligible individual residing 
in a State— 
(A) in the case of a State in which a quali-
fied high-risk pool (as defined under section 
2744(c)(2) of the Public Health Service Act) 
was in effect as of July 1, 2009, the Secretary 
shall require the State make a maintenance of 
effort payment each year that the high-risk pool 
is in effect equal to an amount not less than the 
amount of all sources of funding for high-risk 
pool coverage made by that State in the year 
ending July 1, 2009; and 
(B) in the case of a State which required 
health insurance issuers to contribute to a State 
high-risk pool or similar arrangement for the 
assessment against such issuers for pool losses, 
the State shall maintain such a contribution ar-
rangement among such issuers. 
(6) LIMITING PROGRAM EXPENDITURES.—The 
Secretary shall, with respect to the program— 
(A) establish procedures to protect against 
fraud, waste, and abuse under the program; 
and 
(B) provide for other program integrity 
methods. 
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(7) TREATMENT AS CREDITABLE COVERAGE.— 
Coverage under the program shall be treated, for 
purposes of applying the definition of ‘‘creditable 
coverage’’ under the provisions of title XXVII of the 
Public Health Service Act, part 6 of subtitle B of 
title I of Employee Retirement Income Security Act 
of 1974, and chapter 100 of the Internal Revenue 
Code of 1986 (and any other provision of law that 
references such provisions) in the same manner as 
if it were coverage under a State health benefits risk 
pool described in section 2701(c)(1)(G) of the Public 
Health Service Act. 
(h) FUNDING; TERMINATION OF AUTHORITY.— 
(1) IN GENERAL.—There is appropriated to the 
Secretary, out of any moneys in the Treasury not 
otherwise appropriated, $5,000,000,000 to pay 
claims against (and administrative costs of) the 
high-risk pool under this section in excess of the pre-
miums collected with respect to eligible individuals 
enrolled in the high-risk pool. Such funds shall be 
available without fiscal year limitation. 
(2) INSUFFICIENT FUNDS.—If the Secretary es-
timates for any fiscal year that the aggregate 
amounts available for payment of expenses of the 
high-risk pool will be less than the amount of the ex-
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penses, the Secretary shall make such adjustments 
as are necessary to eliminate such deficit, including 
reducing benefits, increasing premiums, or estab-
lishing waiting lists. 
(3) TERMINATION OF AUTHORITY.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), coverage of eligible individ-
uals under a high-risk pool shall terminate as 
of the date on which the Health Insurance Ex-
change is established. 
(B) TRANSITION
TO
EXCHANGE.—The 
Secretary shall develop procedures to provide 
for the transition of eligible individuals who are 
enrolled in health insurance coverage offered 
through a high-risk pool established under this 
section to be enrolled in acceptable coverage. 
Such procedures shall ensure that there is no 
lapse in coverage with respect to the individual 
and may extend coverage offered through such 
a high-risk pool beyond 2012 if the Secretary 
determines necessary to avoid such a lapse. 
SEC. 102. ENSURING VALUE AND LOWER PREMIUMS. 
(a) GROUP HEALTH INSURANCE COVERAGE.—Title 
XXVII of the Public Health Service Act is amended by 
inserting after section 2713 the following new section: 
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‘‘SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS. 
‘‘(a) IN GENERAL.—Each health insurance issuer 
that offers health insurance coverage in the small or large 
group market shall provide that for any plan year in which 
the coverage has a medical loss ratio below a level specified 
by the Secretary (but not less than 85 percent), the issuer 
shall provide in a manner specified by the Secretary for 
rebates to enrollees of the amount by which the issuer’s 
medical loss ratio is less than the level so specified. 
‘‘(b) IMPLEMENTATION.—The Secretary shall estab-
lish a uniform definition of medical loss ratio and method-
ology for determining how to calculate it based on the av-
erage medical loss ratio in a health insurance issuer’s book 
of business for the small and large group market. Such 
methodology shall be designed to take into account the 
special circumstances of smaller plans, different types of 
plans, and newer plans. In determining the medical loss 
ratio, the Secretary shall exclude State taxes and licensing 
or regulatory fees. Such methodology shall be designed 
and exceptions shall be established to ensure adequate 
participation by health insurance issuers, competition in 
the health insurance market, and value for consumers so 
that their premiums are used for services. 
‘‘(c) SUNSET.—Subsections (a) and (b) shall not 
apply to health insurance coverage on and after the first 
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date that health insurance coverage is offered through the 
Health Insurance Exchange.’’. 
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 
Such title is further amended by inserting after section 
2753 the following new section: 
‘‘SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS. 
‘‘The provisions of section 2714 shall apply to health 
insurance coverage offered in the individual market in the 
same manner as such provisions apply to health insurance 
coverage offered in the small or large group market except 
to the extent the Secretary determines that the application 
of such section may destabilize the existing individual 
market.’’. 
(c) IMMEDIATE
IMPLEMENTATION.—The amend-
ments made by this section shall apply in the group and 
individual market for plan years beginning on or after 
January 1, 2010, or as soon as practicable after such date. 
SEC. 103. ENDING HEALTH INSURANCE RESCISSION ABUSE. 
(a) CLARIFICATION REGARDING APPLICATION
OF 
GUARANTEED
RENEWABILITY
OF
INDIVIDUAL
AND 
GROUP HEALTH INSURANCE COVERAGE.—Sections 2712 
and 2742 of the Public Health Service Act (42 U.S.C. 
300gg–12, 300gg–42) are each amended— 
(1) in its heading, by inserting ‘‘AND CON-
TINUATION
IN
FORCE, INCLUDING
PROHIBI-
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TION OF RESCISSION,’’ after ‘‘GUARANTEED RE-
NEWABILITY’’; and 
(2) in subsection (a), by inserting ‘‘, including 
without rescission,’’ after ‘‘continue in force’’. 
(b) SECRETARIAL GUIDANCE REGARDING RESCIS-
SIONS.— 
(1) GROUP HEALTH INSURANCE MARKET.—Sec-
tion 2712 of such Act (42 U.S.C. 300gg–12) is 
amended by adding at the end the following: 
‘‘(f) RESCISSION.—A health insurance issuer may re-
scind group health insurance coverage only upon clear and 
convincing evidence of fraud described in subsection 
(b)(2), under procedures that provide for independent, ex-
ternal third-party review.’’. 
(2) INDIVIDUAL
HEALTH
MARKET.—Section 
2742 of such Act (42 U.S.C. 300gg–42) is amended 
by adding at the end the following: 
‘‘(f) RESCISSION.—A health insurance issuer may re-
scind individual health insurance coverage only upon clear 
and convincing evidence of fraud described in subsection 
(b)(2), under procedures that provide for independent, ex-
ternal third-party review.’’. 
(3) GUIDANCE.—The Secretary of Health and 
Human Services, no later than 90 days after the 
date of the enactment of this Act, shall issue guid-
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ance implementing the amendments made by para-
graphs (1) and (2), including procedures for inde-
pendent, external third-party review. 
(c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD-PARTY REVIEW IN CERTAIN CASES.— 
(1) INDIVIDUAL MARKET.—Subpart 1 of part B 
of title XXVII of such Act (42 U.S.C. 300gg–41 et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD-PARTY REVIEW IN CASES OF RESCIS-
SION. 
‘‘(a) NOTICE AND REVIEW RIGHT.—If a health in-
surance issuer determines to rescind health insurance cov-
erage for an individual in the individual market, before 
such rescission may take effect the issuer shall provide the 
individual with notice of such proposed rescission and an 
opportunity for a review of such determination by an inde-
pendent, external third-party under procedures specified 
by the Secretary under section 2742(f). 
‘‘(b) INDEPENDENT DETERMINATION.—If the indi-
vidual requests such review by an independent, external 
third-party of a rescission of health insurance coverage, 
the coverage shall remain in effect until such third party 
determines that the coverage may be rescinded under the 
guidance issued by the Secretary under section 2742(f).’’. 
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(2) APPLICATION
TO
GROUP
HEALTH
INSUR-
ANCE.—Such title is further amended by adding 
after section 2702 the following new section: 
‘‘SEC. 2703. OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD-PARTY REVIEW IN CASES OF RESCIS-
SION. 
‘‘The provisions of section 2746 shall apply to group 
health insurance coverage in the same manner as such 
provisions apply to individual health insurance coverage, 
except that any reference to section 2742(f) is deemed a 
reference to section 2712(f).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act and shall apply to rescissions occurring on and 
after July 1, 2010, with respect to health insurance cov-
erage issued before, on, or after such date. 
SEC. 104. SUNSHINE ON PRICE GOUGING BY HEALTH IN-
SURANCE ISSUERS. 
The Secretary of Health and Human Services, in con-
junction with States, shall establish a process for the an-
nual review of increases in premiums for health insurance 
coverage. Such process shall require health insurance 
issuers to submit a justification for any premium increases 
prior to implementation of the increase. 
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SEC. 105. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
(a) UNDER GROUP HEALTH PLANS.— 
(1) PHSA.—Title XXVII of the Public Health 
Service Act is amended by inserting after section 
2702 the following new section: 
‘‘SEC. 2703. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering health insurance coverage in con-
nection with a group health plan that provides coverage 
for dependent children shall make available such coverage, 
at the option of the participant involved, for one or more 
qualified children (as defined in subsection (b)) of the par-
ticipant. 
‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘qualified child’ means, with respect to a partici-
pant in a group health plan or group health insurance cov-
erage, an individual who (but for age) would be treated 
as a dependent child of the participant under such plan 
or coverage and who— 
‘‘(1) is under 27 years of age; and 
‘‘(2) is not enrolled as a participant, bene-
ficiary, or enrollee (other than under this section, 
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section 2746, or section 704 of the Employee Retire-
ment Income Security Act of 1974) under any 
health insurance coverage or group health plan. 
‘‘(c) PREMIUMS.—Nothing in this section shall be 
construed as preventing a group health plan or health in-
surance issuer with respect to group health insurance cov-
erage from increasing the premiums otherwise required for 
coverage provided under this section consistent with 
standards established by the Secretary based upon family 
size.’’. 
(2) EMPLOYEE RETIREMENT INCOME SECURITY 
ACT OF 1974.— 
(A) IN GENERAL.—Part 7 of subtitle B of 
title I of the Employee Retirement Income Se-
curity Act of 1974 is amended by inserting 
after section 703 the following new section: 
‘‘SEC. 704. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer offering health insurance coverage in con-
nection with a group health plan that provides coverage 
for dependent children shall make available such coverage, 
at the option of the participant involved, for one or more 
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qualified children (as defined in subsection (b)) of the par-
ticipant. 
‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘qualified child’ means, with respect to a partici-
pant in a group health plan or group health insurance cov-
erage, an individual who (but for age) would be treated 
as a dependent child of the participant under such plan 
or coverage and who— 
‘‘(1) is under 27 years of age; and 
‘‘(2) is not enrolled as a participant, bene-
ficiary, or enrollee (other than under this section) 
under any health insurance coverage or group health 
plan. 
‘‘(c) PREMIUMS.—Nothing in this section shall be 
construed as preventing a group health plan or health in-
surance issuer with respect to group health insurance cov-
erage from increasing the premiums otherwise required for 
coverage provided under this section consistent with 
standards established by the Secretary based upon family 
size.’’. 
(B) CLERICAL AMENDMENT.—The table of 
contents of such Act is amended by inserting 
after the item relating to section 703 the fol-
lowing new item: 
‘‘Sec. 704. Requiring the option of extension of dependent coverage for unin-
sured young adults.’’. 
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(3) IRC.— 
(A) IN GENERAL.—Subchapter A of chap-
ter 100 of the Internal Revenue Code of 1986 
is amended by adding at the end the following 
new section: 
‘‘SEC. 9804. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘(a) IN GENERAL.—A group health plan that pro-
vides coverage for dependent children shall make available 
such coverage, at the option of the participant involved, 
for one or more qualified children (as defined in subsection 
(b)) of the participant. 
‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘qualified child’ means, with respect to a partici-
pant in a group health plan, an individual who (but for 
age) would be treated as a dependent child of the partici-
pant under such plan and who— 
‘‘(1) is under 27 years of age; and 
‘‘(2) is not enrolled as a participant, bene-
ficiary, or enrollee (other than under this section, 
section 704 of the Employee Retirement Income Se-
curity Act of 1974, or section 2704 or 2746 of the 
Public Health Service Act) under any health insur-
ance coverage or group health plan. 
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‘‘(c) PREMIUMS.—Nothing in this section shall be 
construed as preventing a group health plan from increas-
ing the premiums otherwise required for coverage provided 
under this section consistent with standards established 
by the Secretary based upon family size.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections of such chapter is amended by insert-
ing after the item relating to section 9803 the 
following: 
‘‘Sec. 9804. Requiring the option of extension of dependent coverage for unin-
sured young adults.’’. 
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 
Title XXVII of the Public Health Service Act is amended 
by inserting after section 2745 the following new section: 
‘‘SEC. 2746. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
‘‘The provisions of section 2703 shall apply to health 
insurance coverage offered by a health insurance issuer 
in the individual market in the same manner as they apply 
to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan in the small 
or large group market.’’. 
(c) EFFECTIVE DATES.— 
(1) GROUP HEALTH PLANS.—The amendments 
made by subsection (a) shall apply to group health 
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plans for plan years beginning on or after January 
1, 2010. 
(2) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—Section 2746 of the Public Health Service 
Act, as inserted by subsection (b), shall apply with 
respect to health insurance coverage offered, sold, 
issued, renewed, in effect, or operated in the indi-
vidual market on or after January 1, 2010. 
SEC. 106. LIMITATIONS ON PREEXISTING CONDITION EX-
CLUSIONS IN GROUP HEALTH PLANS IN AD-
VANCE OF APPLICABILITY OF NEW PROHIBI-
TION OF PREEXISTING CONDITION EXCLU-
SIONS. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) REDUCTION IN LOOK-BACK PERIOD.—Sec-
tion 701(a)(1) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1181(a)(1)) is 
amended by striking ‘‘6-month period’’ and inserting 
‘‘30-day period’’. 
(2) REDUCTION
IN
PERMITTED
PREEXISTING 
CONDITION LIMITATION PERIOD.—Section 701(a)(2) 
of such Act (29 U.S.C. 1181(a)(2)) is amended by 
striking ‘‘12 months’’ and inserting ‘‘3 months’’, 
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and by striking ‘‘18 months’’ and inserting ‘‘9 
months’’. 
(3) SUNSET OF INTERIM LIMITATION.—Section 
701 of such Act (29 U.S.C. 1181) is amended by 
adding at the end the following new subsection: 
‘‘(h) TERMINATION.—This section shall cease to 
apply to any group health plan as of the date that such 
plan becomes subject to the requirements of section 211 
of the (relating to prohibiting preexisting condition exclu-
sions).’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.— 
(1) REDUCTION IN LOOK-BACK PERIOD.—Sec-
tion 9801(a)(1) of the Internal Revenue Code of 
1986 is amended by striking ‘‘6-month period’’ and 
inserting ‘‘30-day period’’. 
(2) REDUCTION
IN
PERMITTED
PREEXISTING 
CONDITION
LIMITATION
PERIOD.—Section 
9801(a)(2) of such Code is amended by striking ‘‘12 
months’’ and inserting ‘‘3 months’’, and by striking 
‘‘18 months’’ and inserting ‘‘9 months’’. 
(3) SUNSET OF INTERIM LIMITATION.—Section 
9801 of such Code is amended by adding at the end 
the following new subsection: 
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‘‘(g) TERMINATION.—This section shall cease to 
apply to any group health plan as of the date that such 
plan becomes subject to the requirements of section 211 
of the (relating to prohibiting preexisting condition exclu-
sions).’’. 
(c) AMENDMENTS
TO PUBLIC HEALTH SERVICE 
ACT.— 
(1) REDUCTION IN LOOK-BACK PERIOD.—Sec-
tion 2701(a)(1) of the Public Health Service Act (42 
U.S.C. 300gg(a)(1)) is amended by striking ‘‘6- 
month period’’ and inserting ‘‘30-day period’’. 
(2) REDUCTION
IN
PERMITTED
PREEXISTING 
CONDITION
LIMITATION
PERIOD.—Section 
2701(a)(2) of such Act (42 U.S.C. 300gg(a)(2)) is 
amended by striking ‘‘12 months’’ and inserting ‘‘3 
months’’, and by striking ‘‘18 months’’ and inserting 
‘‘9 months’’. 
(3) SUNSET OF INTERIM LIMITATION.—Section 
2701 of such Act (42 U.S.C. 300gg) is amended by 
adding at the end the following new subsection: 
‘‘(h) TERMINATION.—This section shall cease to 
apply to any group health plan as of the date that such 
plan becomes subject to the requirements of section 211 
of the (relating to prohibiting preexisting condition exclu-
sions).’’. 
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(4) 
MISCELLANEOUS
TECHNICAL
AMEND-
MENT.—Section 2702(a)(2) of such Act (42 U.S.C. 
300gg–1) is amended by striking ‘‘701’’ and insert-
ing ‘‘2701’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply with respect to group health plans for 
plan years beginning on or after January 1, 2010. 
(2) SPECIAL
RULE
FOR
COLLECTIVE
BAR-
GAINING
AGREEMENTS.—In the case of a group 
health plan maintained pursuant to 1 or more collec-
tive bargaining agreements between employee rep-
resentatives and 1 or more employers ratified before 
the date of the enactment of this Act, the amend-
ments made by this section shall not apply to plan 
years beginning before the earlier of— 
(A) the date on which the last of the col-
lective bargaining agreements relating to the 
plan terminates (determined without regard to 
any extension thereof agreed to after the date 
of the enactment of this Act); 
(B) 3 years after the date of the enact-
ment of this Act. 
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SEC. 107. PROHIBITING ACTS OF DOMESTIC VIOLENCE 
FROM BEING TREATED AS PREEXISTING CON-
DITIONS. 
(a) ERISA.—Section 701(d)(3) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. ) is 
amended— 
(1) in the heading, by inserting ‘‘OR DOMESTIC 
VIOLENCE’’ after ‘‘PREGNANCY’’; and 
(2) by inserting ‘‘or domestic violence’’ after 
‘‘relating to pregnancy’’. 
(b) PHSA.— 
(1) GROUP
MARKET.—Section 2701(d)(3) of 
the 
Public 
Health 
Service 
Act 
(42 
U.S.C. 
300gg(d)(3)) is amended— 
(A) in the heading, by inserting ‘‘OR DO-
MESTIC VIOLENCE’’ after ‘‘PREGNANCY’’; and 
(B) by inserting ‘‘or domestic violence’’ 
after ‘‘relating to pregnancy’’. 
(2) INDIVIDUAL MARKET.—Title XXVII of such 
Act is amended by inserting after section 2753 the 
following new section: 
‘‘SEC. 2754. PROHIBITION ON DOMESTIC VIOLENCE AS PRE-
EXISTING CONDITION. 
‘‘A health insurance issuer offering health insurance 
coverage in the individual market may not, on the basis 
of domestic violence, impose any preexisting condition ex-
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clusion (as defined in section 2701(b)(1)(A)) with respect 
to such coverage.’’. 
(c) IRC.—Section 9801(d)(3) of the Internal Rev-
enue Code of 1986 is amended— 
(1) in the heading, by inserting ‘‘OR DOMESTIC 
VIOLENCE’’ after ‘‘PREGNANCY’’; and 
(2) by inserting ‘‘or domestic violence’’ after 
‘‘relating to pregnancy’’. 
(d) EFFECTIVE DATES.— 
(1) Except as otherwise provided in this sub-
section, the amendments made by this section shall 
apply with respect to group health plans (and health 
insurance issuers offering group health insurance 
coverage) for plan years beginning on or after Janu-
ary 1, 2010. 
(2) The amendment made by subsection (b)(2) 
shall apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated 
in the individual market on or after such date. 
SEC. 108. ENDING HEALTH INSURANCE DENIALS AND 
DELAYS OF NECESSARY TREATMENT FOR 
CHILDREN WITH DEFORMITIES. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
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(1) IN GENERAL.—Subpart B of part 7 of sub-
title B of title I of the Employee Retirement Income 
Security Act of 1974 is amended by adding at the 
end the following new section: 
‘‘SEC. 715. STANDARDS RELATING TO BENEFITS FOR MINOR 
CHILD’S CONGENITAL OR DEVELOPMENTAL 
DEFORMITY OR DISORDER. 
‘‘(a) REQUIREMENTS FOR TREATMENT FOR CHIL-
DREN WITH DEFORMITIES.— 
‘‘(1) IN GENERAL.—A group health plan, and a 
health insurance issuer offering group health insur-
ance coverage, that provides coverage for surgical 
benefits shall provide coverage for outpatient and in-
patient diagnosis and treatment of a minor child’s 
congenital or developmental deformity, disease, or 
injury. A minor child shall include any individual 
who is 21 years of age or younger. 
‘‘(2) TREATMENT DEFINED.— 
‘‘(A) IN
GENERAL.—In this section, the 
term ‘treatment’ includes reconstructive sur-
gical procedures (procedures that are generally 
performed to improve function, but may also be 
performed to approximate a normal appear-
ance) that are performed on abnormal struc-
tures of the body caused by congenital defects, 
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developmental abnormalities, trauma, infection, 
tumors, or disease, including— 
‘‘(i) procedures that do not materially 
affect the function of the body part being 
treated; and 
‘‘(ii) procedures for secondary condi-
tions and follow-up treatment. 
‘‘(B) EXCEPTION.—Such term does not in-
clude cosmetic surgery performed to reshape 
normal structures of the body to improve ap-
pearance or self-esteem. 
‘‘(b) NOTICE.—A group health plan under this part 
shall comply with the notice requirement under section 
713(b) (other than paragraph (3)) with respect to the re-
quirements of this section.’’. 
(2) CONFORMING AMENDMENT.— 
(A) Subsection (c) of section 731 of such 
Act is amended by striking ‘‘section 711’’ and 
inserting ‘‘sections 711 and 715’’. 
(B) The table of contents in section 1 of 
such Act is amended by inserting after the item 
relating to section 714 the following new item: 
‘‘Sec. 715. Standards relating to benefits for minor child’s congenital or devel-
opmental deformity or disorder.’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.— 
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(1) IN
GENERAL.—Subchapter B of chapter 
100 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new section: 
‘‘SEC. 9814. STANDARDS RELATING TO BENEFITS FOR 
MINOR CHILD’S CONGENITAL OR DEVELOP-
MENTAL DEFORMITY OR DISORDER. 
‘‘(a) REQUIREMENTS FOR TREATMENT FOR CHIL-
DREN WITH DEFORMITIES.—A group health plan that 
provides coverage for surgical benefits shall provide cov-
erage for outpatient and inpatient diagnosis and treat-
ment of a minor child’s congenital or developmental de-
formity, disease, or injury. A minor child shall include any 
individual who is 21 years of age or younger. 
‘‘(b) TREATMENT DEFINED.— 
‘‘(1) IN GENERAL.—In this section, the term 
‘treatment’ includes reconstructive surgical proce-
dures (procedures that are generally performed to 
improve function, but may also be performed to ap-
proximate a normal appearance) that are performed 
on abnormal structures of the body caused by con-
genital defects, developmental abnormalities, trau-
ma, infection, tumors, or disease, including— 
‘‘(A) procedures that do not materially af-
fect the function of the body part being treated, 
and 
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‘‘(B) procedures for secondary conditions 
and follow-up treatment. 
‘‘(2) EXCEPTION.—Such term does not include 
cosmetic surgery performed to reshape normal struc-
tures of the body to improve appearance or self-es-
teem.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 100 of such Code 
is amended by adding at the end the following new 
item: 
‘‘Sec. 9814. Standards relating to benefits for minor child’s congenital or devel-
opmental deformity or disorder.’’. 
(c) AMENDMENTS TO THE PUBLIC HEALTH SERVICE 
ACT.— 
(1) IN GENERAL.—Subpart 2 of part A of title 
XXVII of the Public Health Service Act is amended 
by adding at the end the following new section: 
‘‘SEC. 2708. STANDARDS RELATING TO BENEFITS FOR 
MINOR CHILD’S CONGENITAL OR DEVELOP-
MENTAL DEFORMITY OR DISORDER. 
‘‘(a) REQUIREMENTS FOR TREATMENT FOR CHIL-
DREN WITH DEFORMITIES.— 
‘‘(1) IN GENERAL.—A group health plan, and a 
health insurance issuer offering group health insur-
ance coverage, that provides coverage for surgical 
benefits shall provide coverage for outpatient and in-
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patient diagnosis and treatment of a minor child’s 
congenital or developmental deformity, disease, or 
injury. A minor child shall include any individual 
who is 21 years of age or younger. 
‘‘(2) TREATMENT DEFINED.— 
‘‘(A) IN
GENERAL.—In this section, the 
term ‘treatment’ includes reconstructive sur-
gical procedures (procedures that are generally 
performed to improve function, but may also be 
performed to approximate a normal appear-
ance) that are performed on abnormal struc-
tures of the body caused by congenital defects, 
developmental abnormalities, trauma, infection, 
tumors, or disease, including— 
‘‘(i) procedures that do not materially 
affect the function of the body part being 
treated; and 
‘‘(ii) procedures for secondary condi-
tions and follow-up treatment. 
‘‘(B) EXCEPTION.—Such term does not in-
clude cosmetic surgery performed to reshape 
normal structures of the body to improve ap-
pearance or self-esteem. 
‘‘(b) NOTICE.—A group health plan under this part 
shall comply with the notice requirement under section 
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715(b) of the Employee Retirement Income Security Act 
of 1974 with respect to the requirements of this section 
as if such section applied to such plan.’’. 
(2) INDIVIDUAL HEALTH INSURANCE.—Subpart 
2 of part B of title XXVII of the Public Health 
Service Act, as amended by section 161(b), is fur-
ther amended by adding at the end the following 
new section: 
‘‘SEC. 2755. STANDARDS RELATING TO BENEFITS FOR 
MINOR CHILD’S CONGENITAL OR DEVELOP-
MENTAL DEFORMITY OR DISORDER. 
‘‘The provisions of section 2708 shall apply to health 
insurance coverage offered by a health insurance issuer 
in the individual market in the same manner as such pro-
visions apply to health insurance coverage offered by a 
health insurance issuer in connection with a group health 
plan in the small or large group market.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) Section 2723(c) of such Act (42 
U.S.C. 300gg–23(c)) is amended by striking 
‘‘section 2704’’ and inserting ‘‘sections 2704 
and 2708’’. 
(B) Section 2762(b)(2) of such Act (42 
U.S.C. 300gg–62(b)(2)) is amended by striking 
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‘‘section 2751’’ and inserting ‘‘sections 2751 
and 2755’’. 
(d) EFFECTIVE DATES.— 
(1) The amendments made by this section shall 
apply with respect to group health plans (and health 
insurance issuers offering group health insurance 
coverage) for plan years beginning on or after Janu-
ary 1, 2010. 
(2) The amendment made by subsection (c)(2) 
shall apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated 
in the individual market on or after such date. 
(e) COORDINATION.—Section 104(1) of the Health 
Insurance Portability and Accountability Act of 1996 is 
amended by striking ‘‘(and the amendments made by this 
subtitle and section 401)’’ and inserting ‘‘, part 7 of sub-
title B of title I of the Employee Retirement Income Secu-
rity Act of 1974, parts A and C of title XXVII of the 
Public Health Service Act, and chapter 100 of the Internal 
Revenue Code of 1986’’. 
SEC. 109. ELIMINATION OF LIFETIME LIMITS. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) IN GENERAL.—Subpart B of part 7 of sub-
title B of title I of the Employee Retirement Income 
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Security Act of 1974 (29 U.S.C. 1185 et seq.), as 
amended by section 108, is amended by adding at 
the end the following: 
‘‘SEC. 716. ELIMINATION OF LIFETIME AGGREGATE LIMITS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer providing health insurance coverage in 
connection with a group health plan, may not impose an 
aggregate dollar lifetime limit with respect to benefits pay-
able under the plan or coverage. 
‘‘(b) DEFINITION.—In this section, the term ‘aggre-
gate dollar lifetime limit’ means, with respect to benefits 
under a group health plan or health insurance coverage 
offered in connection with a group health plan, a dollar 
limitation on the total amount that may be paid with re-
spect to such benefits under the plan or health insurance 
coverage with respect to an individual or other coverage 
unit on a lifetime basis.’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of such Act, is amended by insert-
ing after the item relating to section 715 the fol-
lowing new item: 
‘‘Sec. 716. Elimination of lifetime aggregate limits.’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.— 
(1) IN
GENERAL.—Subchapter B of chapter 
100 of the Internal Revenue Code of 1986, as 
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amended by section 108(b), is amended by adding at 
the end the following new section: 
‘‘SEC. 9815. ELIMINATION OF LIFETIME AGGREGATE LIM-
ITS. 
‘‘(a) IN GENERAL.—A group health plan may not im-
pose an aggregate dollar lifetime limit with respect to ben-
efits payable under the plan. 
‘‘(b) DEFINITION.—In this section, the term ‘aggre-
gate dollar lifetime limit’ means, with respect to benefits 
under a group health plan a dollar limitation on the total 
amount that may be paid with respect to such benefits 
under the plan with respect to an individual or other cov-
erage unit on a lifetime basis.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 100 of such Code, 
as amended by section 108(b), is amended by adding 
at the end the following new item: 
‘‘Sec. 9854. Standards relating to benefits for minor child’s congenital or devel-
opmental deformity or disorder.’’. 
(c) AMENDMENT TO THE PUBLIC HEALTH SERVICE 
ACT RELATING TO THE GROUP MARKET.— 
(1) IN GENERAL.—Subpart 2 of part A of title 
XXVII of the Public Health Service Act (42 U.S.C. 
300gg–4 et seq.) as amended by section 108(c)(1), 
is amended by adding at the end the following: 
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‘‘SEC. 2709. ELIMINATION OF LIFETIME AGGREGATE LIM-
ITS. 
‘‘(a) IN GENERAL.—A group health plan and a health 
insurance issuer providing health insurance coverage in 
connection with a group health plan, may not impose an 
aggregate dollar lifetime limit with respect to benefits pay-
able under the plan or coverage. 
‘‘(b) DEFINITION.—In this section, the term ‘aggre-
gate dollar lifetime limit’ means, with respect to benefits 
under a group health plan or health insurance coverage, 
a dollar limitation on the total amount that may be paid 
with respect to such benefits under the plan or health in-
surance coverage with respect to an individual or other 
coverage unit on a lifetime basis.’’. 
(2) INDIVIDUAL MARKET.—Subpart 2 of part B 
of title XXVII of the Public Health Service Act (42 
U.S.C. 300gg–51 et seq.), as amended by section 
108(c)(2), is amended by adding at the end the fol-
lowing: 
‘‘SEC. 2756. ELIMINATION OF ANNUAL OR LIFETIME AGGRE-
GATE LIMITS. 
‘‘The provisions of section 2709 shall apply to health 
insurance coverage offered by a health insurance issuer 
in the individual market in the same manner as they apply 
to health insurance coverage offered by a health insurance 
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issuer in connection with a group health plan in the small 
or large group market.’’. 
(d) EFFECTIVE DATES.— 
(1) The amendments made by this section shall 
apply with respect to group health plans (and health 
insurance issuers offering group health insurance 
coverage) for plan years beginning on or after Janu-
ary 1, 2010. 
(2) The amendment made by subsection (c)(2) 
shall apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated 
in the individual market on or after such date. 
SEC. 110. PROHIBITION AGAINST POSTRETIREMENT RE-
DUCTIONS OF RETIREE HEALTH BENEFITS 
BY GROUP HEALTH PLANS. 
(a) IN GENERAL.—Part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974, 
as amended by sections 108 and 109, is amended by in-
serting after section 716 the following new section: 
‘‘SEC. 717. PROTECTION AGAINST POSTRETIREMENT RE-
DUCTION OF RETIREE HEALTH BENEFITS. 
‘‘(a) IN GENERAL.—Every group health plan shall 
contain a provision which expressly bars the plan, or any 
fiduciary of the plan, from reducing the benefits provided 
under the plan to a retired participant, or beneficiary of 
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such participant, if such reduction affects the benefits pro-
vided to the participant or beneficiary as of the date the 
participant retired for purposes of the plan and such re-
duction occurs after the participant’s retirement unless 
such reduction is also made with respect to active partici-
pants. Nothing in this section shall prohibit a plan from 
enforcing a total aggregate cap on amounts paid for re-
tiree health coverage that is part of the plan at the time 
of retirement. 
‘‘(b) NO REDUCTION.—Notwithstanding that a group 
health plan may contain a provision reserving the general 
power to amend or terminate the plan or a provision spe-
cifically authorizing the plan to make post-retirement re-
ductions in retiree health benefits, it shall be prohibited 
for any group health plan, whether through amendment 
or otherwise, to reduce the benefits provided to a retired 
participant or the participant’s beneficiary under the 
terms of the plan if such reduction of benefits occurs after 
the date the participant retired for purposes of the plan 
and reduces benefits that were provided to the participant, 
or the participant’s beneficiary, as of the date the partici-
pant retired unless such reduction is also made with re-
spect to active participants. 
‘‘(c) REDUCTION DESCRIBED.— For purposes of this 
section, a reduction in benefits— 
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‘‘(1) with respect to premiums occurs under a 
group health plan when a participant’s (or bene-
ficiary’s) share of the total premium (or, in the case 
of a self-insured plan, the costs of coverage) of the 
plan substantially increases; or 
‘‘(2) with respect to other cost-sharing and ben-
efits under a group health plan occurs when there is 
a substantial decrease in the actuarial value of the 
benefit package under the plan. 
For purposes of this section, the term ‘substantial’ means 
an increase in the total premium share or a decrease in 
the actuarial value of the benefit package that is greater 
than 5 percent.’’ 
(b) CONFORMING AMENDMENT.—The table of con-
tents in section 1 of such Act, as amended by sections 
108 and 109, is amended by inserting after the item relat-
ing to section 716 the following new item: 
‘‘Sec. 717. Protection against postretirement reduction of retiree health bene-
fits.’’. 
(c) WAIVER.—An employer may, in a form and man-
ner which shall be prescribed by the Secretary of Labor, 
apply for a waiver from this provision if the employer can 
reasonably demonstrate that meeting the requirements of 
this section would impose an undue hardship on the em-
ployer. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 111. REINSURANCE PROGRAM FOR RETIREES. 
(a) ESTABLISHMENT.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary 
of Health and Human Services shall establish a tem-
porary reinsurance program (in this section referred 
to as the ‘‘reinsurance program’’) to provide reim-
bursement to assist participating employment-based 
plans with the cost of providing health benefits to 
retirees and to eligible spouses, surviving spouses 
and dependents of such retirees. 
(2) DEFINITIONS.—For purposes of this sec-
tion: 
(A) The term ‘‘eligible employment-based 
plan’’ means a group health plan or employ-
ment-based health plan that— 
(i) is — 
(I) maintained by one or more 
employers (including without limita-
tion any State or political subdivision 
thereof, or any agency or instrumen-
tality of any of the foregoing), former 
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employers or employee organizations 
or associations, or a voluntary employ-
ees’ beneficiary association, or a com-
mittee or board of individuals ap-
pointed to administer such plan; or 
(II) a multiemployer plan (as de-
fined in section 3(37) of the Employee 
Retirement Income Security Act of 
1974); and 
(ii) provides health benefits to retir-
ees. 
(B) The term ‘‘health benefits’’ means 
medical, surgical, hospital, prescription drug, 
and such other benefits as shall be determined 
by the Secretary, whether self-funded or deliv-
ered through the purchase of insurance or oth-
erwise. 
(C) The term ‘‘participating employment- 
based plan’’ means an eligible employment- 
based plan that is participating in the reinsur-
ance program. 
(D) The term ‘‘retiree’’ means, with re-
spect to a participating employment-benefit 
plan, an individual who— 
(i) is 55 years of age or older; 
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(ii) is not eligible for coverage under 
title XVIII of the Social Security Act; and 
(iii) is not an active employee of an 
employer maintaining the plan or of any 
employer that makes or has made substan-
tial contributions to fund such plan. 
(E) The term ‘‘Secretary’’ means Sec-
retary of Health and Human Services. 
(b) PARTICIPATION.—To be eligible to participate in 
the reinsurance program, an eligible employment-based 
plan shall submit to the Secretary an application for par-
ticipation in the program, at such time, in such manner, 
and containing such information as the Secretary shall re-
quire. 
(c) PAYMENT.— 
(1) SUBMISSION OF CLAIMS.— 
(A) IN GENERAL.—Under the reinsurance 
program, a participating employment-based 
plan shall submit claims for reimbursement to 
the Secretary which shall contain documenta-
tion of the actual costs of the items and serv-
ices for which each claim is being submitted. 
(B) BASIS FOR CLAIMS.—Each claim sub-
mitted under subparagraph (A) shall be based 
on the actual amount expended by the partici-
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pating employment-based plan involved within 
the plan year for the appropriate employment 
based health benefits provided to a retiree or to 
the spouse, surviving spouse, or dependent of a 
retiree. In determining the amount of any claim 
for purposes of this subsection, the partici-
pating employment-based plan shall take into 
account any negotiated price concessions (such 
as discounts, direct or indirect subsidies, re-
bates, and direct or indirect remunerations) ob-
tained by such plan with respect to such health 
benefits. For purposes of calculating the 
amount of any claim, the costs paid by the re-
tiree or by the spouse, surviving spouse, or de-
pendent of the retiree in the form of 
deductibles, copayments, and coinsurance shall 
be included along with the amounts paid by the 
participating employment-based plan. 
(2) PROGRAM PAYMENTS AND LIMIT.—If the 
Secretary determines that a participating employ-
ment-based plan has submitted a valid claim under 
paragraph (1), the Secretary shall reimburse such 
plan for 80 percent of that portion of the costs at-
tributable to such claim that exceeds $15,000, but is 
less than $90,000. Such amounts shall be adjusted 
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each year based on the percentage increase in the 
medical care component of the Consumer Price 
Index (rounded to the nearest multiple of $1,000) 
for the year involved. 
(3) USE OF PAYMENTS.—Amounts paid to a 
participating employment-based plan under this sub-
section shall only be used to reduce the costs of 
health care provided by the plan by reducing pre-
mium costs for the employer or employee association 
maintaining the plan, and reducing premium con-
tributions, deductibles, copayments, coinsurance, or 
other out-of-pocket costs for plan participants and 
beneficiaries. Where the benefits are provided by an 
employer to members of a represented bargaining 
unit, the allocation of payments among these pur-
poses shall be subject to collective bargaining. 
Amounts paid to the plan under this subsection shall 
not be used as general revenues by the employer or 
employee association maintaining the plan or for any 
other purposes. The Secretary shall develop a mech-
anism to monitor the appropriate use of such pay-
ments by such plans. 
(4) APPEALS AND PROGRAM PROTECTIONS.— 
The Secretary shall establish— 
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(A) an appeals process to permit partici-
pating employment-based plans to appeal a de-
termination of the Secretary with respect to 
claims submitted under this section; and 
(B) procedures to protect against fraud, 
waste, and abuse under the program. 
(5) AUDITS.—The Secretary shall conduct an-
nual audits of claims data submitted by partici-
pating employment-based plans under this section to 
ensure that they are in compliance with the require-
ments of this section. 
(d) RETIREE RESERVE TRUST FUND.— 
(1) ESTABLISHMENT.— 
(A) IN GENERAL.—There is established in 
the Treasury of the United States a trust fund 
to be known as the ‘‘Retiree Reserve Trust 
Fund’’ (referred to in this section as the ‘‘Trust 
Fund’’), that shall consist of such amounts as 
may be appropriated or credited to the Trust 
Fund as provided for in this subsection to en-
able the Secretary to carry out the reinsurance 
program. Such amounts shall remain available 
until expended. 
(B) FUNDING.—There are hereby appro-
priated to the Trust Fund, out of any moneys 
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in the Treasury not otherwise appropriated, an 
amount requested by the Secretary as necessary 
to carry out this section, except that the total 
of all such amounts requested shall not exceed 
$10,000,000,000. 
(C) APPROPRIATIONS
FROM
THE
TRUST 
FUND.— 
(i) IN
GENERAL.—Amounts in the 
Trust Fund are appropriated to provide 
funding to carry out the reinsurance pro-
gram and shall be used to carry out such 
program. 
(ii) 
LIMITATION
TO
AVAILABLE 
FUNDS.—The Secretary has the authority 
to stop taking applications for participa-
tion in the program or take such other 
steps in reducing expenditures under the 
reinsurance program in order to ensure 
that expenditures under the reinsurance 
program do not exceed the funds available 
under this subsection. 
SEC. 112. WELLNESS PROGRAM GRANTS. 
(a) ALLOWANCE OF GRANT.— 
(1) IN GENERAL.—For purposes of this section, 
the Secretaries of Health and Human Services and 
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Labor shall jointly award wellness grants as deter-
mined under this section. Wellness program grants 
shall be awarded to small employers (as defined by 
the Secretary) for any plan year in an amount equal 
to 50 percent of the costs paid or incurred by such 
employers in connection with a qualified wellness 
program during the plan year. For purposes of the 
preceding sentence, in the case of any qualified 
wellness program offered as part of an employment- 
based health plan, only costs attributable to the 
qualified wellness program and not to the health 
plan, or health insurance coverage offered in connec-
tion with such a plan, may be taken into account. 
(2) LIMITATIONS.— 
(A) PERIOD.—A wellness grant awarded to 
an employer under this section shall be for up 
to 3 years. 
(B) AMOUNT.—The amount of the grant 
under paragraph (1) for an employer shall not 
exceed— 
(i) the product of $150 and the num-
ber of employees of the employer for any 
plan year; and 
(ii) $50,000 for the entire period of 
the grant. 
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(b) QUALIFIED WELLNESS PROGRAM.—For purposes 
of this section: 
(1) QUALIFIED
WELLNESS
PROGRAM.—The 
term ‘‘qualified wellness program’’ means a program 
that — 
(A) includes any 3 wellness components de-
scribed in subsection (c); and 
(B) is to be certified jointly by the Sec-
retary of Health and Human Services and the 
Secretary of Labor, in coordination with the Di-
rector of the Centers for Disease Control and 
Prevention, as a qualified wellness program 
under this section. 
(2) PROGRAMS MUST BE CONSISTENT WITH RE-
SEARCH AND BEST PRACTICES.— 
(A) 
IN
GENERAL.—The 
Secretary 
of 
Health and Human Services and the Secretary 
of Labor shall not certify a program as a quali-
fied wellness program unless the program— 
(i) is consistent with evidence-based 
research and best practices, as identified 
by persons with expertise in employer 
health promotion and wellness programs; 
(ii) includes multiple, evidence-based 
strategies which are based on the existing 
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and emerging research and careful sci-
entific reviews, including the Guide to 
Community 
Preventative 
Services, 
the 
Guide to Clinical Preventative Services, 
and the National Registry for Effective 
Programs, and 
(iii) includes strategies which focus on 
prevention and support for employee popu-
lations at risk of poor health outcomes. 
(B) PERIODIC UPDATING AND REVIEW.— 
The Secretaries of Health and Human Services 
and Labor, in consultation with other appro-
priate agencies shall jointly establish procedures 
for periodic review, evaluation, and update of 
the programs under this subsection. 
(3) HEALTH LITERACY AND ACCESSIBILITY.— 
The Secretaries of Health and Human Services and 
Labor shall jointly, as part of the certification proc-
ess— 
(A) ensure that employers make the pro-
grams culturally competent, physically and pro-
grammatically accessible (including for individ-
uals with disabilities), and appropriate to the 
health literacy needs of the employees covered 
by the programs; 
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(B) require a health literacy component to 
provide special assistance and materials to em-
ployees with low literacy skills, limited English 
and from underserved populations; and 
(C) require the Secretaries to compile and 
disseminate to employer health plans informa-
tion on model health literacy curricula, instruc-
tional programs, and effective intervention 
strategies. 
(c) WELLNESS PROGRAM COMPONENTS.—For pur-
poses of this section, the wellness program components de-
scribed in this subsection are the following: 
(1) 
HEALTH
AWARENESS
COMPONENT.—A 
health awareness component which provides for the 
following: 
(A) HEALTH EDUCATION.—The dissemina-
tion of health information which addresses the 
specific needs and health risks of employees. 
(B) HEALTH
SCREENINGS.—The oppor-
tunity for periodic screenings for health prob-
lems and referrals for appropriate follow-up 
measures. 
(2) EMPLOYEE
ENGAGEMENT
COMPONENT.— 
An employee engagement component which provides 
for the active engagement of employees in worksite 
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wellness programs through worksite assessments and 
program planning, onsite delivery, evaluation, and 
improvement efforts. 
(3) BEHAVIORAL CHANGE COMPONENT.—A be-
havioral 
change 
component 
which 
encourages 
healthy living through counseling, seminars, on-line 
programs, self-help materials, or other programs 
which provide technical assistance and problem solv-
ing skills. Such component may include programs re-
lating to— 
(A) tobacco use; 
(B) obesity; 
(C) stress management; 
(D) physical fitness; 
(E) nutrition; 
(F) substance abuse; 
(G) depression; and 
(H) mental health promotion. 
(4) SUPPORTIVE ENVIRONMENT COMPONENT.— 
A supportive environment component which includes 
the following: 
(A) ON-SITE POLICIES.—Policies and serv-
ices at the worksite which promote a healthy 
lifestyle, including policies relating to— 
(i) tobacco use at the worksite; 
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(ii) the nutrition of food available at 
the worksite through cafeterias and vend-
ing options; 
(iii) minimizing stress and promoting 
positive mental health in the workplace; 
and 
(iv) the encouragement of physical ac-
tivity before, during, and after work hours. 
(d) PARTICIPATION REQUIREMENT.—No grant shall 
be allowed under subsection (a) unless the Secretaries of 
Health and Human Services and Labor, in consultation 
with other appropriate agencies, jointly certify, as a part 
of any certification described in subsection (b), that each 
wellness program component of the qualified wellness pro-
gram— 
(1) shall be available to all employees of the 
employer; 
(2) shall not mandate participation by employ-
ees; and 
(3) may provide a financial reward for partici-
pation of an individual in such program so long as 
such reward is not tied to the premium or cost-shar-
ing of the individual under the health benefits plan. 
(e) PRIVACY PROTECTIONS.—Data gathered for pur-
poses of the employer wellness program may be used solely 
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for the purposes of administering the program. The Secre-
taries of Health and Human Services and Labor shall de-
velop standards to ensure such data remain confidential 
and are not used for purposes beyond those for admin-
istering the program. 
(f) CERTAIN COSTS NOT INCLUDED.—For purposes 
of this section, costs paid or incurred by an employer for 
food or health insurance shall not be taken into account 
under subsection (a). 
(g) OUTREACH.—The Secretaries of Health and 
Human Services and Labor, in conjunction with other ap-
propriate agencies and members of the business commu-
nity, shall jointly institute an outreach program to inform 
businesses about the availability of the wellness program 
grant as well as to educate businesses on how to develop 
programs according to recognized and promising practices 
and on how to measure the success of implemented pro-
grams. 
(h) EFFECTIVE DATE.—This section shall take effect 
on July 1, 2010. 
(i) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
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SEC. 113. EXTENSION OF COBRA CONTINUATION COV-
ERAGE. 
(a) EXTENSION OF CURRENT PERIODS OF CONTINU-
ATION COVERAGE.— 
(1) IN GENERAL.—In the case of any individual 
who is, under a COBRA continuation coverage pro-
vision, covered under COBRA continuation coverage 
on or after the date of the enactment of this Act, 
the required period of any such coverage which has 
not subsequently terminated under the terms of such 
provision for any reason other than the expiration of 
a period of a specified number of months shall, not-
withstanding such provision and subject to sub-
section (b), extend to the earlier of the date on 
which such individual becomes eligible for acceptable 
coverage or the date on which such individual be-
comes eligible for health insurance coverage through 
the Health Insurance Exchange (or a State-based 
Health Insurance Exchange operating in a State or 
group of States). 
(2) NOTICE.—As soon as practicable after the 
date of the enactment of this Act, the Secretary of 
Labor, in consultation with the Secretary of the 
Treasury and the Secretary of Health and Human 
Services, shall, in consultation with administrators 
of the group health plans (or other entities) that 
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provide or administer the COBRA continuation cov-
erage involved, provide rules setting forth the form 
and manner in which prompt notice to individuals of 
the continued availability of COBRA continuation 
coverage to such individuals under paragraph (1). 
(b) CONTINUED EFFECT OF OTHER TERMINATING 
EVENTS.—Notwithstanding subsection (a), any required 
period of COBRA continuation coverage which is extended 
under such subsection shall terminate upon the occur-
rence, prior to the date of termination otherwise provided 
in such subsection, of any terminating event specified in 
the applicable continuation coverage provision other than 
the expiration of a period of a specified number of months. 
(c) ACCESS
TO STATE HEALTH BENEFITS RISK 
POOLS.—This section shall supersede any provision of the 
law of a State or political subdivision thereof to the extent 
that such provision has the effect of limiting or precluding 
access by a qualified beneficiary whose COBRA continu-
ation coverage has been extended under this section to a 
State health benefits risk pool recognized by the Commis-
sioner for purposes of this section solely by reason of the 
extension of such coverage beyond the date on which such 
coverage otherwise would have expired. 
(d) DEFINITIONS.—For purposes of this section— 
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(1) COBRA CONTINUATION
COVERAGE.—The 
term ‘‘COBRA continuation coverage’’ means con-
tinuation coverage provided pursuant to part 6 of 
subtitle B of title I of the Employee Retirement In-
come Security Act of 1974 (other than under section 
609), title XXII of the Public Health Service Act, 
section 4980B of the Internal Revenue Code of 1986 
(other than subsection (f)(1) of such section insofar 
as it relates to pediatric vaccines), or section 905a 
of title 5, United States Code, or under a State pro-
gram that provides comparable continuation cov-
erage. Such term does not include coverage under a 
health flexible spending arrangement under a cafe-
teria plan within the meaning of section 125 of the 
Internal Revenue Code of 1986. 
(2) COBRA CONTINUATION
PROVISION.—The 
term ‘‘COBRA continuation provision’’ means the 
provisions of law described in paragraph (1). 
SEC. 114. STATE HEALTH ACCESS PROGRAM GRANTS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall provide grants to States (as defined for pur-
poses of title XIX of the Social Security Act) to establish 
programs to expand access to affordable health care cov-
erage for the uninsured populations in that State in a 
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manner consistent with reforms to take effect under this 
division in Y1. 
(b) TYPES OF PROGRAMS.—The types of programs 
for which grants are available under subsection (a) include 
the following: 
(1) STATE INSURANCE EXCHANGES.—State in-
surance exchanges that develop new, less expensive, 
portable benefit packages for small employers and 
part-time and seasonal workers. 
(2) COMMUNITY
COVERAGE
PROGRAM.—Com-
munity coverage with shared responsibility between 
employers, governmental or nonprofit entity, and the 
individual. 
(3) REINSURANCE
PLAN
PROGRAM.—Reinsur-
ance plans that subsidize a certain share of carrier 
losses within a certain risk corridor health insurance 
premium assistance. 
(4) TRANSPARENT MARKETPLACE PROGRAM.— 
Transparent marketplace that provides an organized 
structure for the sale of insurance products such as 
a Web exchange or portal. 
(5) AUTOMATED
ENROLLMENT
PROGRAM.— 
Statewide or automated enrollment systems for pub-
lic assistance programs. 
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(6) 
INNOVATIVE
STRATEGIES.—Innovative 
strategies to insure low-income childless adults. 
(7) PURCHASING COLLABORATIVES.—Business/ 
consumer collaborative that provides direct contract 
health care service purchasing options for group 
plan sponsors. 
(c) ELIGIBILITY AND ADMINISTRATION.— 
(1) IMPLEMENTATION OF KEY STATUTORY OR 
REGULATORY CHANGES.—In order to be awarded a 
grant under this section for a program, a State shall 
demonstrate that— 
(A) it has achieved the key State and local 
statutory or regulatory changes required to 
begin implementing the new program within 1 
year after the initiation of funding under the 
grant; and 
(B) it will be able to sustain the program 
without Federal funding after the end of the 
period of the grant. 
(2) INELIGIBILITY.—A State that has already 
developed a comprehensive health insurance access 
program is not eligible for a grant under this sec-
tion. 
(3) APPLICATION REQUIRED.—No State shall 
receive a grant under this section unless the State 
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has approved by the Secretary such an application, 
in such form and manner as the Secretary specifies. 
(4) ADMINISTRATION BASED ON CURRENT PRO-
GRAM.—The program under this section is intended 
to build on the State Health Access Program funded 
under the Omnibus Appropriations Act, 2009 (Pub-
lic Law 111–8). 
(d) FUNDING LIMITATIONS.— 
(1) IN GENERAL.—A grant under this section 
shall— 
(A) only be available for expenditures be-
fore Y1; and 
(B) only be used to supplement, and not 
supplant, funds otherwise provided. 
(2) MATCHING FUND REQUIREMENT.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), no grant may be awarded to a State 
unless the State demonstrates the seriousness 
of its effort by matching at least 20 percent of 
the grant amount through non-Federal re-
sources, which may be a combination of State, 
local, private dollars from insurers, providers, 
and other private organizations. 
(B) WAIVER.—The Secretary may waive 
the requirement of subparagraph (A) if the 
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State demonstrates to the Secretary financial 
hardship in complying with such requirement. 
(e) STUDY.—The Secretary shall review, study, and 
benchmark the progress and results of the programs fund-
ed under this section. 
(f) REPORT.—Each State receiving a grant under 
this section shall submit to the Secretary a report on best 
practices and lessons learned through the grant to inform 
the health reform coverage expansions under this division 
beginning in Y1. 
(g) FUNDING.—There are authorized to be appro-
priated such sums as may be necessary to carry out this 
section. 
SEC. 115. ADMINISTRATIVE SIMPLIFICATION. 
(a) STANDARDIZING ELECTRONIC ADMINISTRATIVE 
TRANSACTIONS.— 
(1) IN GENERAL.—Part C of title XI of the So-
cial Security Act (42 U.S.C. 1320d et seq.) is 
amended by inserting after section 1173 the fol-
lowing new sections: 
‘‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE 
TRANSACTIONS. 
‘‘(a) STANDARDS FOR FINANCIAL AND ADMINISTRA-
TIVE TRANSACTIONS.— 
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‘‘(1) IN GENERAL.—The Secretary shall adopt 
and regularly update standards consistent with the 
goals described in paragraph (2). 
‘‘(2) GOALS FOR FINANCIAL AND ADMINISTRA-
TIVE
TRANSACTIONS.—The goals for standards 
under paragraph (1) are that such standards shall, 
to the extent practicable— 
‘‘(A) be unique with no conflicting or re-
dundant standards; 
‘‘(B) be authoritative, permitting no addi-
tions or constraints for electronic transactions, 
including companion guides; 
‘‘(C) be comprehensive, efficient and ro-
bust, requiring minimal augmentation by paper 
transactions or clarification by further commu-
nications; 
‘‘(D) enable the real-time (or near real- 
time) determination of an individual’s financial 
responsibility at the point of service and, to the 
extent possible, prior to service, including 
whether the individual is eligible for a specific 
service with a specific physician at a specific fa-
cility, on a specific date or range of dates, in-
clude utilization of a machine-readable health 
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plan beneficiary identification card or similar 
mechanism; 
‘‘(E) enable, where feasible, near real-time 
adjudication of claims; 
‘‘(F) provide for timely acknowledgment, 
response, and status reporting applicable to any 
electronic transaction deemed appropriate by 
the Secretary; 
‘‘(G) describe all data elements (such as 
reason and remark codes) in unambiguous 
terms, not permit optional fields, require that 
data elements be either required or conditioned 
upon set values in other fields, and prohibit ad-
ditional conditions except where required by (or 
to implement) State or Federal law or to pro-
tect against fraud and abuse; and 
‘‘(H) harmonize all common data elements 
across administrative and clinical transaction 
standards. 
‘‘(3) TIME FOR ADOPTION.—Not later than 2 
years after the date of the enactment of this section, 
the Secretary shall adopt standards under this sec-
tion by interim, final rule. 
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‘‘(4) REQUIREMENTS
FOR
SPECIFIC
STAND-
ARDS.—The standards under this section shall be 
developed, adopted, and enforced so as to— 
‘‘(A) clarify, refine, complete, and expand, 
as needed, the standards required under section 
1173; 
‘‘(B) require paper versions of standard-
ized transactions to comply with the same 
standards as to data content such that a fully 
compliant, equivalent electronic transaction can 
be populated from the data from a paper 
version; 
‘‘(C) enable electronic funds transfers, in 
order to allow automated reconciliation with the 
related health care payment and remittance ad-
vice; 
‘‘(D) require timely and transparent claim 
and denial management processes, including 
uniform claim edits, uniform reason and remark 
denial codes, tracking, adjudication, and appeal 
processing; 
‘‘(E) require the use of a standard elec-
tronic transaction with which health care pro-
viders may quickly and efficiently enroll with a 
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health plan to conduct the other electronic 
transactions provided for in this part; and 
‘‘(F) provide for other requirements relat-
ing to administrative simplification as identified 
by the Secretary, in consultation with stake-
holders. 
‘‘(5) BUILDING ON EXISTING STANDARDS.—In 
adopting the standards under this section, the Sec-
retary shall consider existing and planned standards. 
‘‘(6) IMPLEMENTATION AND ENFORCEMENT.— 
Not later than 6 months after the date of the enact-
ment of this section, the Secretary shall submit to 
the appropriate committees of Congress a plan for 
the implementation and enforcement, by not later 
than 5 years after such date of enactment, of the 
standards under this section. Such plan shall in-
clude— 
‘‘(A) a process and timeframe with mile-
stones for developing the complete set of stand-
ards; 
‘‘(B) a proposal for accommodating nec-
essary changes between version changes and a 
process for upgrading standards as often as an-
nually by interim, final rulemaking; 
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‘‘(C) programs to provide incentives for, 
and ease the burden of, implementation for cer-
tain health care providers, with special consid-
eration given to such providers serving rural or 
underserved areas and ensure coordination with 
standards, implementation specifications, and 
certification criteria being adopted under the 
HITECH Act; 
‘‘(D) programs to provide incentives for, 
and ease the burden of, health care providers 
who volunteer to participate in the process of 
setting standards for electronic transactions; 
‘‘(E) an estimate of total funds needed to 
ensure timely completion of the implementation 
plan; and 
‘‘(F) an enforcement process that includes 
timely investigation of complaints, random au-
dits to ensure compliance, civil monetary and 
programmatic penalties for noncompliance con-
sistent with existing laws and regulations, and 
a fair and reasonable appeals process building 
off of enforcement provisions under this part, 
and concurrent State enforcement jurisdiction. 
The Secretary may promulgate an annual audit and 
certification process to ensure that all health plans 
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and clearinghouses are both syntactically and func-
tionally compliant with all the standard transactions 
mandated pursuant to the administrative simplifica-
tion provisions of this part and the Health Insurance 
Portability and Accountability Act of 1996. 
‘‘(b) LIMITATIONS ON USE OF DATA.—Nothing in 
this section shall be construed to permit the use of infor-
mation collected under this section in a manner that would 
violate State or Federal law. 
‘‘(c) PROTECTION OF DATA.—The Secretary shall en-
sure (through the promulgation of regulations or other-
wise) that all data collected pursuant to subsection (a) are 
used and disclosed in a manner that meets the HIPAA 
privacy and security law (as defined in section 3009(a)(2) 
of the Public Health Service Act), including any privacy 
or security standard adopted under section 3004 of such 
Act. 
‘‘SEC. 1173B. INTERIM COMPANION GUIDES, INCLUDING OP-
ERATING RULES. 
‘‘(a) IN GENERAL.—The Secretary shall adopt a sin-
gle, binding, comprehensive companion guide, that in-
cludes operating rules for each X12 Version 5010 trans-
action described in section 1173(a)(2), to be effective until 
the new version of these transactions which comply with 
section 1173A are adopted and implemented. 
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‘‘(b) COMPANION GUIDE
AND OPERATING RULES 
DEVELOPMENT.—In adopting such interim companion 
guide and rules, the Secretary shall comply with section 
1172, except that a nonprofit entity that meets the fol-
lowing criteria shall also be consulted: 
‘‘(1) The entity focuses its mission on adminis-
trative simplification. 
‘‘(2) The entity uses a multistakeholder process 
that creates consensus-based companion guides, in-
cluding operating rules using a voting process that 
ensures balanced representation by the critical 
stakeholders (including health plans and health care 
providers) so that no one group dominates the entity 
and shall include others such as standards develop-
ment organizations, and relevant Federal or State 
agencies. 
‘‘(3) The entity has in place a public set of 
guiding principles that ensure the companion guide 
and operating rules and process are open and trans-
parent. 
‘‘(4) The entity coordinates its activities with 
the HIT Policy Committee, and the HIT Standards 
Committee (established under title XXX of the Pub-
lic Health Service Act) and complements the efforts 
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of the Office of the National Healthcare Coordinator 
and its related health information exchange goals. 
‘‘(5) The entity incorporates the standards 
issued under Health Insurance Portability and Ac-
countability Act of 1996 and this part, and in devel-
oping the companion guide and operating rules does 
not change the definition, data condition or use of 
a data element or segment in a standard, add any 
elements or segments to the maximum defined data 
set, use any codes or data elements that are either 
marked ‘not used’ in the standard’s implementation 
specifications or are not in the standard’s implemen-
tation specifications, or change the meaning or in-
tent of the standard’s implementation specifications. 
‘‘(6) The entity uses existing market research 
and proven best practices. 
‘‘(7) The entity has a set of measures that 
allow for the evaluation of their market impact and 
public reporting of aggregate stakeholder impact. 
‘‘(8) The entity supports nondiscrimination and 
conflict of interest policies that demonstrate a com-
mitment to open, fair, and nondiscriminatory prac-
tices. 
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‘‘(9) The entity allows for public reviews and 
comment on updates of the companion guide, includ-
ing the operating rules. 
‘‘(c) IMPLEMENTATION.—The Secretary shall adopt 
a single, binding companion guide, including operating 
rules under this section, for each transaction, to become 
effective with the X12 Version 5010 transaction imple-
mentation, or as soon thereafter as feasible. The com-
panion guide, including operating rules for the trans-
actions for eligibility for health plan and health claims sta-
tus under this section shall be adopted not later than Oc-
tober 1, 2011, in a manner such that such set of rules 
is effective beginning not later than January 1, 2013. The 
companion guide, including operating rules for the remain-
der of the transactions described in section 1173(a)(2) 
shall be adopted not later than October 1, 2012, in a man-
ner such that such set of rules is effective beginning not 
later than January 1, 2014.’’. 
(2) DEFINITIONS.—Section 1171 of such Act 
(42 U.S.C. 1320d) is amended— 
(A) in paragraph (1), by inserting ‘‘, and 
associated operational guidelines and instruc-
tions, as determined appropriate by the Sec-
retary’’ after ‘‘medical procedure codes’’; and 
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(B) by adding at the end the following new 
paragraph: 
‘‘(10) OPERATING
RULES.—The term ‘oper-
ating rules’ means business rules for using and proc-
essing transactions, such as service level require-
ments, which do not impact the implementation 
specifications or other data content requirements.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
1179(a) of such Act (42 U.S.C. 1320d–8(a)) is 
amended, in the matter before paragraph (1)— 
(A) by inserting ‘‘on behalf of an indi-
vidual’’ after ‘‘1978)’’; and 
(B) by inserting ‘‘on behalf of an indi-
vidual’’ after ‘‘for a financial institution’’ and 
(b) STANDARDS
FOR CLAIMS ATTACHMENTS
AND 
COORDINATION OF BENEFITS.— 
(1) STANDARD FOR HEALTH CLAIMS ATTACH-
MENTS.—Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and 
Human Services shall promulgate an interim, final 
rule to establish a standard for health claims attach-
ment transaction described in section 1173(a)(2)(B) 
of the Social Security Act (42 U.S.C. 1320d– 
2(a)(2)(B)) and coordination of benefits. 
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(2) REVISION IN PROCESSING PAYMENT TRANS-
ACTIONS BY FINANCIAL INSTITUTIONS.— 
(A) IN GENERAL.—Section 1179 of the So-
cial Security Act (42 U.S.C. 1320d–8) is 
amended, in the matter before paragraph (1)— 
(i) by striking ‘‘or is engaged’’ and in-
serting ‘‘and is engaged’’; and 
(ii) by inserting ‘‘(other than as a 
business associate for a covered entity)’’ 
after ‘‘for a financial institution’’. 
(B) COMPLIANCE
DATE.—The amend-
ments made by subparagraph (A) shall apply to 
transactions occurring on or after such date 
(not later than January 1, 2014) as the Sec-
retary of Health and Human Services shall 
specify. 
(c) STANDARDS FOR FIRST REPORT OF INJURY.— 
Not later than January 1, 2014, the Secretary of Health 
and Human Services shall promulgate an interim final 
rule to establish a standard for the first report of injury 
transaction described in section 1173(a)(2)(G) of the So-
cial Security Act (42 U.S.C. 1320d–2(a)(2)(G)). 
(d) UNIQUE HEALTH PLAN IDENTIFIER.—Not later 
October 1, 2012, the Secretary of Health and Human 
Services shall promulgate an interim final rule to establish 
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a unique health plan identifier described in section 
1173(b) of the Social Security Act (42 U.S.C. 1320d– 
2(b)) based on the input of the National Committee of 
Vital and Health Statistics and consultation with health 
plans, health care providers, and other interested parties. 
(e) EXPANSION OF ELECTRONIC TRANSACTIONS IN 
MEDICARE.—Section 1862(a) of the Social Security Act 
(42 U.S.C. 1395y(a)) is amended— 
(1) in paragraph (23), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (24), by striking the period 
and inserting ‘‘; or’’; and 
(3) by inserting after paragraph (24) the fol-
lowing new paragraph: 
‘‘(25) subject to subsection (h), not later than 
January 1, 2015, for which the payment is other 
than by electronic funds transfer (EFT) so long as 
the Secretary has adopted and implemented a stand-
ard for electronic funds transfer under section 
1173A.’’. 
(f) EXPANSION
OF PENALTIES.—Section 1176 of 
such Act (42 U.S.C. 1320d–5) is amended by adding at 
the end the following new subsection: 
‘‘(c) EXPANSION
OF PENALTY AUTHORITY.—The 
Secretary may, in addition to the penalties provided under 
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subsections (a) and (b), provide for the imposition of pen-
alties for violations of this part that are comparable— 
‘‘(1) in the case of health plans, to the sanc-
tions the Secretary is authorized to impose under 
part C or D of title XVIII in the case of a plan that 
violates a provision of such part; or 
‘‘(2) in the case of a health care provider, to 
the sanctions the Secretary is authorized to impose 
under part A, B, or D of title XVIII in the case of 
a health care provider that violations a provision of 
such part with respect to that provider.’’. 
TITLE 
II—PROTECTIONS 
AND 
STANDARDS FOR QUALIFIED 
HEALTH BENEFITS PLANS 
Subtitle A—General Standards 
SEC. 201. 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 
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under this division 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 division: 
(1) 
ENROLLMENT
IN
EMPLOYMENT-BASED 
HEALTH PLANS.—An individual shall be treated as 
being ‘‘enrolled’’ in an employment-based health 
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. 
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SEC. 202. 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 division, the term ‘‘grandfathered health 
insurance coverage’’ means individual health insurance 
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-
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. 
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(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-
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 201, including the essential 
benefit package requirement under section 221. 
(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: 
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(i) Any coverage described in section 
3001(a)(1)(B)(ii)(IV) of division B of the 
American Recovery and Reinvestment Act 
of 2009 (Public Law 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 
or more of the coverage or benefits described in 
clauses (i) through (iii) be treated as acceptable 
coverage under this division. 
(2) TRANSITIONAL
TREATMENT
AS
ACCEPT-
ABLE COVERAGE.—During the grace period specified 
in paragraph (1)(A), an employment-based health 
plan (which may be a high deducible health plan, as 
defined in section 223(c)(2) of the Internal Revenue 
Code of 1986) that is described in such paragraph 
shall be treated as acceptable coverage under this di-
vision. 
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(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.—Nothing in— 
(A) paragraph (1) shall prevent the offer-
ing of excepted benefits described in section 
2791(c) of the Public Health Service Act so 
long as such benefits are offered outside the 
Health Insurance Exchange and are priced sep-
arately from health insurance coverage; and 
(B) this division shall be construed— 
(i) to prevent the offering of a stand- 
alone plan that offers coverage of excepted 
benefits described in section 2791(c)(2)(A) 
of the Public Health Service Act (relating 
to limited scope dental or vision benefits) 
for individuals and families from a State- 
licensed dental and vision carrier; or 
(ii) as applying requirements for a 
qualified health benefits plan to such a 
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stand-alone plan that is offered and priced 
separately from a qualified health benefits 
plan. 
Subtitle 
B—Standards 
Guaran-
teeing Access to Affordable Cov-
erage 
SEC. 211. PROHIBITING PREEXISTING CONDITION EXCLU-
SIONS. 
A qualified health benefits plan may not impose any 
preexisting 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 of the following: health status, medical condition, 
claims experience, receipt of health care, medical history, 
genetic information, evidence of insurability, disability, or 
source of injury (including conditions arising out of acts 
of domestic violence) or any similar factors. 
SEC. 212. GUARANTEED ISSUE AND RENEWAL FOR IN-
SURED PLANS AND PROHIBITING RESCIS-
SIONS. 
The requirements of sections 2711 (other than sub-
sections (e) and (f)) 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 
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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 
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 enrollee has an opportunity to correct such non-
payment. Rescissions of such coverage shall be prohibited 
except in cases of fraud as defined in section 2712(b)(2) 
of such Act. 
SEC. 213. INSURANCE RATING RULES. 
(a) IN GENERAL.—The premium rate charged for a 
qualified health benefits plan that is health insurance cov-
erage 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. 
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(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 
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) ACTUARIAL VALUE OF OPTIONAL SERVICE COV-
ERAGE.— 
(1) IN GENERAL.—The Commissioner shall esti-
mate the basic per enrollee, per month cost, deter-
mined on an average actuarial basis, for including 
coverage under a basic plan of the services described 
in section 222(d)(4)(A). 
(2) CONSIDERATIONS.—In making such esti-
mate the Commissioner— 
(A) may take into account the impact on 
overall costs of the inclusion of such coverage, 
but may not take into account any cost reduc-
tion estimated to result from such services, in-
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cluding prenatal care, delivery, or postnatal 
care; 
(B) shall estimate such costs as if such 
coverage were included for the entire population 
covered; and 
(C) may not estimate such a cost at less 
than $1 per enrollee, per month. 
(c) 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. 
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(D) The risk of self-insured employers not 
being able to pay obligations or otherwise be-
coming financially insolvent. 
(E) The extent to which rating rules are 
likely to cause adverse selection in the large 
group market or to encourage small and 
midsize 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 midsize employers to self-insure or cre-
ate 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 Commis-
sioner shall submit to Congress and the applicable 
agencies an updated report on such study, including 
updates on such recommendations. 
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SEC. 214. 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 
benefits plans, building from section 702 of the Employee 
Retirement Income Security Act of 1974, section 2702 of 
the Public Health Service Act, and section 9802 of the 
Internal 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 the Public Health Service Act 
shall apply to a qualified health benefits plan, regardless 
of whether it is offered in the individual or group market, 
in the same manner as such provisions apply to health 
insurance coverage offered in the large group market. 
SEC. 215. 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 
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and services and transparency in the cost-sharing differen-
tials among providers participating in the network and 
policies for accessing out-of-network providers. 
(b) INTERNET ACCESS TO INFORMATION.—A quali-
fied health benefits plan that uses a provider network shall 
provide a current listing of all providers in its network 
on its Website and such data shall be available on the 
Health Insurance Exchange Website as a part of the basic 
information on that plan. The Commissioner shall also es-
tablish an on-line system whereby an individual may select 
by name any medical provider (as defined by the Commis-
sioner) and be informed of the plan or plans with which 
that provider is contracting. 
(c) PROVIDER NETWORK DEFINED.—In this division, 
the term ‘‘provider network’’ means the providers with re-
spect to which covered benefits, treatments, and services 
are available under a health benefits plan. 
SEC. 216. REQUIRING THE OPTION OF EXTENSION OF DE-
PENDENT 
COVERAGE 
FOR 
UNINSURED 
YOUNG ADULTS. 
(a) IN GENERAL.—A qualified health benefits plan 
shall make available, at the option of the principal enrollee 
under the plan, coverage for one or more qualified children 
(as defined in subsection (b)) of the enrollee. 
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(b) QUALIFIED CHILD DEFINED.—In this section, 
the term ‘‘qualified child’’ means, with respect to a prin-
cipal enrollee in a qualified health benefits plan, an indi-
vidual who (but for age) would be treated as a dependent 
child of the enrollee under such plan and who— 
(1) is under 27 years of age; and 
(2) is not enrolled in a health benefits plan 
other than under this section. 
(c) PREMIUMS.—Nothing in this section shall be con-
strued as preventing a qualified health benefits plan from 
increasing the premiums otherwise required for coverage 
provided under this section consistent with standards es-
tablished by the Commissioner based upon family size 
under section 213(a)(3). 
SEC. 217. CONSISTENCY OF COSTS AND COVERAGE UNDER 
QUALIFIED HEALTH BENEFITS PLANS DUR-
ING PLAN YEAR. 
In the case of health insurance coverage offered 
under a qualified health benefits plan, if the coverage de-
creases or the cost-sharing increases, the issuer of the cov-
erage shall notify enrollees of the change at least 90 days 
before the change takes effect (or such shorter period of 
time in cases where the change is necessary to ensure the 
health and safety of enrollees). 
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Subtitle 
C—Standards 
Guaran-
teeing Access to Essential Bene-
fits 
SEC. 221. 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 224 for the essential ben-
efits package described in section 222 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 
division shall be construed as affecting the offering 
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outside of the Health Insurance Exchange and 
under State law of health benefits in the form of ex-
cepted 
benefits 
(described 
in 
section 
202(b)(1)(B)(ii)) if such benefits are offered under 
a separate policy, contract, or certificate of insur-
ance. 
(c) CLINICAL APPROPRIATENESS.—Nothing in this 
Act shall be construed to prohibit a group health plan or 
health insurance issuer from using medical management 
practices so long as such management practices are based 
on valid medical evidence and are relevant to the patient 
whose medical treatment is under review. 
(d) PROVISION OF BENEFITS.—Nothing in this divi-
sion shall be construed as prohibiting a qualified health 
benefits plan from subcontracting with stand-alone health 
insurance issuers or insurers for the provision of dental, 
vision, mental health, and other benefits and services. 
SEC. 222. ESSENTIAL BENEFITS PACKAGE DEFINED. 
(a) IN GENERAL.—In this division, the term ‘‘essen-
tial benefits package’’ means health benefits coverage, 
consistent with standards adopted under section 224, 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-
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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; 
(4) complies with section 215(a) (relating to 
network adequacy); and 
(5) is equivalent in its scope of benefits, as cer-
tified by Office of the Actuary of the Centers for 
Medicare & Medicaid Services, to the average pre-
vailing employer-sponsored coverage in Y1. 
In order to carry out paragraph (5), the Secretary of 
Labor shall conduct a survey of employer-sponsored cov-
erage to determine the benefits typically covered by em-
ployers, including multiemployer plans, and provide a re-
port on such survey to the Health Benefits Advisory Com-
mittee and to the Secretary of Health and Human Serv-
ices. 
(b) MINIMUM SERVICES TO BE COVERED.—Subject 
to subsection (d), the items and services described in this 
subsection are the following: 
(1) Hospitalization. 
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(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, including behavioral health treatments. 
(8) Preventive services, including those services 
recommended with a grade of A or B by the Task 
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 for children under 21 years of age. 
(11) Durable medical equipment, prosthetics, 
orthotics and related supplies. 
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(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— 
(A) preventive items and services rec-
ommended with a grade of A or B by the Task 
Force on Clinical Preventive Services and those 
vaccines recommended for use by the Director 
of the Centers for Disease Control and Preven-
tion; or 
(B) 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 
not to exceed $5,000 for an individual and not 
to exceed $10,000 for a family. Such levels 
shall be increased (rounded to the nearest 
$100) for each subsequent year by the annual 
percentage increase in the enrollment-weighted 
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average of premium increases for basic plans 
applicable to such year, except that Secretary 
shall adjust such increase to ensure that the ap-
plicable level specified in this subparagraph 
meets the minimum actuarial value required 
under paragraph (3). 
(C) USE OF COPAYMENTS.—In establishing 
cost-sharing levels for basic, enhanced, and pre-
mium plans under this subsection, the Sec-
retary shall, to the maximum extent possible, 
use only copayments and not coinsurance. 
(3) MINIMUM ACTUARIAL VALUE.— 
(A) IN GENERAL.—The cost-sharing under 
the essential benefits package shall be designed 
to provide a level of coverage that is designed 
to provide benefits that are actuarially equiva-
lent to approximately 70 percent of the full ac-
tuarial value of the benefits provided under the 
reference benefits package described in sub-
paragraph (B). 
(B) REFERENCE BENEFITS PACKAGE DE-
SCRIBED.—The reference benefits package de-
scribed in this subparagraph is the essential 
benefits package if there were no cost-sharing 
imposed. 
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(d) ASSESSMENT AND COUNSELING FOR DOMESTIC 
VIOLENCE.—The Secretary shall support the need for an 
assessment and brief counseling for domestic violence as 
part of a behavioral health assessment or primary care 
visit and determine the appropriate coverage for such as-
sessment and counseling. 
(e) ABORTION COVERAGE PROHIBITED AS PART OF 
MINIMUM BENEFITS PACKAGE.— 
(1) PROHIBITION OF REQUIRED COVERAGE.— 
The Health Benefits Advisory Committee may not 
recommend under section 223(b), and the Secretary 
may not adopt in standards under section 224(b), 
the services described in paragraph (4)(A) or (4)(B) 
as part of the essential benefits package and the 
Commissioner may not require such services for 
qualified health benefits plans to participate in the 
Health Insurance Exchange. 
(2) VOLUNTARY
CHOICE
OF
COVERAGE
BY 
PLAN.—In the case of a qualified health benefits 
plan, the plan is not required (or prohibited) under 
this Act from providing coverage of services de-
scribed in paragraph (4)(A) or (4)(B) and the 
QHBP offering entity shall determine whether such 
coverage is provided. 
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(3) COVERAGE UNDER PUBLIC HEALTH INSUR-
ANCE OPTION.—The public health insurance option 
shall provide coverage for services described in para-
graph (4)(B). Nothing in this Act shall be construed 
as preventing the public health insurance option 
from providing for or prohibiting coverage of serv-
ices described in paragraph (4)(A). 
(4) ABORTION SERVICES.— 
(A) ABORTIONS FOR WHICH PUBLIC FUND-
ING IS PROHIBITED.—The services described in 
this subparagraph are abortions for which the 
expenditure of Federal funds appropriated for 
the Department of Health and Human Services 
is not permitted, based on the law as in effect 
as of the date that is 6 months before the be-
ginning of the plan year involved. 
(B) ABORTIONS FOR WHICH PUBLIC FUND-
ING
IS
ALLOWED.—The services described in 
this subparagraph are abortions for which the 
expenditure of Federal funds appropriated for 
the Department of Health and Human Services 
is permitted, based on the law as in effect as 
of the date that is 6 months before the begin-
ning of the plan year involved. 
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(f) REPORT
REGARDING
INCLUSION
OF
ORAL 
HEALTH CARE IN ESSENTIAL BENEFITS PACKAGE.—Not 
later than 1 year after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall 
submit to Congress a report containing the results of a 
study determining the need and cost of providing acces-
sible and affordable oral health care to adults as part of 
the essential benefits package. 
SEC. 223. HEALTH BENEFITS ADVISORY COMMITTEE. 
(a) ESTABLISHMENT.— 
(1) IN GENERAL.—There is established a pri-
vate-public advisory committee which shall be a 
panel of medical and other experts to be known as 
the Health Benefits Advisory Committee to rec-
ommend covered benefits and essential, enhanced, 
and premium plans. 
(2) CHAIR.—The Surgeon General shall be a 
member and the chair of the Health Benefits Advi-
sory Committee. 
(3) MEMBERSHIP.—The Health Benefits Advi-
sory Committee shall be composed of the following 
members, in addition to the Surgeon General: 
(A) Nine members who are not Federal 
employees or officers and who are appointed by 
the President. 
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(B) Nine members who are not Federal 
employees or officers and who are appointed by 
the Comptroller General of the United States in 
a manner similar to the manner in which the 
Comptroller General appoints members to the 
Medicare Payment Advisory Commission under 
section 1805(c) of the Social Security Act. 
(C) Such even number of members (not to 
exceed 8) who are Federal employees and offi-
cers, as the President may appoint. 
Such initial appointments shall be made not later 
than 60 days after the date of the enactment of this 
Act. 
(4) TERMS.—Each member of the Health Bene-
fits Advisory Committee shall serve a 3-year term on 
the Committee, except that the terms of the initial 
members shall be adjusted in order to provide for a 
staggered term of appointment for all such mem-
bers. 
(5) PARTICIPATION.—The membership of the 
Health Benefits Advisory Committee shall at least 
reflect providers, patient representatives, employers 
(including small employers), labor, health insurance 
issuers, experts in health care financing and deliv-
ery, experts in oral health care, experts in racial and 
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ethnic disparities, experts on health care needs and 
disparities of individuals with disabilities, represent-
atives of relevant governmental agencies, and at 
least one practicing physician or other health profes-
sional and an expert in child and adolescent health 
and shall represent a balance among various sectors 
of the health care system so that no single sector 
unduly influences the recommendations of such 
Committee. 
(b) DUTIES.— 
(1) RECOMMENDATIONS
ON
BENEFIT
STAND-
ARDS.—The Health Benefits Advisory Committee 
shall recommend to the Secretary of Health and 
Human Services (in this subtitle referred to as the 
‘‘Secretary’’) benefit standards (as defined in para-
graph (5)), and periodic updates to such standards. 
In developing such recommendations, the Committee 
shall take into account innovation in health care and 
consider how such standards could reduce health dis-
parities. 
(2) DEADLINE.—The Health Benefits Advisory 
Committee shall recommend initial benefit standards 
to the Secretary not later than 1 year after the date 
of the enactment of this Act. 
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(3) STATE INPUT.—The Health Benefits Advi-
sory Committee shall examine the health coverage 
laws and benefits of each State in developing rec-
ommendations under this subsection and may incor-
porate such coverage and benefits as the Committee 
determines to be appropriate and consistent with 
this Act. The Health Benefits Advisory Committee 
shall also seek input from the States and consider 
recommendations on how to ensure quality of health 
coverage in all States. 
(4) PUBLIC INPUT.—The Health Benefits Advi-
sory Committee shall allow for public input as a part 
of developing recommendations under this sub-
section. 
(5) BENEFIT
STANDARDS
DEFINED.—In this 
subtitle, the term ‘‘benefit standards’’ means stand-
ards respecting— 
(A) the essential benefits package de-
scribed in section 222, including categories of 
covered treatments, items and services within 
benefit classes, and cost-sharing consistent with 
subsection (d) of such section; and 
(B) the cost-sharing levels for enhanced 
plans and premium plans (as provided under 
section 303(c)) consistent with paragraph (5). 
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(6) LEVELS OF COST-SHARING FOR ENHANCED 
AND PREMIUM PLANS.— 
(A) ENHANCED PLAN.—The level of cost- 
sharing for enhanced plans shall be designed so 
that such plans have benefits that are actuari-
ally equivalent to approximately 85 percent of 
the actuarial value of the benefits provided 
under the reference benefits package described 
in section 222(c)(3)(B). 
(B) PREMIUM PLAN.—The level of cost- 
sharing for premium plans shall be designed so 
that such plans have benefits that are actuari-
ally equivalent to approximately 95 percent of 
the actuarial value of the benefits provided 
under the reference benefits package described 
in section 222(c)(3)(B). 
(c) OPERATIONS.— 
(1) PER
DIEM
PAY.—Each member of the 
Health Benefits Advisory Committee shall receive 
travel expenses, including per diem in accordance 
with applicable provisions under subchapter I of 
chapter 57 of title 5, United States Code, and shall 
otherwise serve without additional pay. 
(2) MEMBERS NOT TREATED AS FEDERAL EM-
PLOYEES.—Members of the Health Benefits Advi-
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sory Committee shall not be considered employees of 
the Federal Government solely by reason of any 
service on the Committee, except such members shall 
be considered to be within the meaning of section 
202(a) of title 18, United States Code, for the pur-
poses of disclosure and management of conflicts of 
interest. 
(3) APPLICATION OF FACA.—The Federal Advi-
sory Committee Act (5 U.S.C. App.), other than sec-
tion 14, shall apply to the Health Benefits Advisory 
Committee. 
(d) PUBLICATION.—The Secretary shall provide for 
publication in the Federal Register and the posting on the 
Internet Website of the Department of Health and Human 
Services of all recommendations made by the Health Ben-
efits Advisory Committee under this section. 
SEC. 224. PROCESS FOR ADOPTION OF RECOMMENDA-
TIONS; ADOPTION OF BENEFIT STANDARDS. 
(a) PROCESS
FOR ADOPTION
OF RECOMMENDA-
TIONS.— 
(1) REVIEW OF RECOMMENDED STANDARDS.— 
Not later than 45 days after the date of receipt of 
benefit standards recommended under section 223 
(including such standards as modified under para-
graph (2)(B)), the Secretary shall review such 
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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 of 
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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propose adoption of initial benefit standards by such 
deadline. 
(4) PUBLICATION.—The Secretary shall provide 
for publication in the Federal Register of all deter-
minations made by the Secretary under this sub-
section. 
(b) ADOPTION OF STANDARDS.— 
(1) INITIAL
STANDARDS.—Not later than 18 
months after the date of the enactment of this Act, 
the Secretary shall, through the rulemaking process 
consistent with subsection (a), adopt an initial set of 
benefit standards. 
(2) PERIODIC UPDATING STANDARDS.—Under 
subsection (a), the Secretary shall provide for the 
periodic updating of the benefit standards previously 
adopted under this section. 
(3) REQUIREMENT.—The Secretary may not 
adopt any benefit standards for an essential benefits 
package or for level of cost-sharing that are incon-
sistent with the requirements for such a package or 
level under sections 222 (including subsection (d)) 
and 223(b)(5). 
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Subtitle D—Additional Consumer 
Protections 
SEC. 231. REQUIRING FAIR MARKETING PRACTICES BY 
HEALTH INSURERS. 
The Commissioner shall establish uniform marketing 
standards that all QHBP offering entities shall meet with 
respect to qualified health benefits plans that are health 
insurance coverage. 
SEC. 232. REQUIRING FAIR GRIEVANCE AND APPEALS 
MECHANISMS. 
(a) IN GENERAL.—A QHBP offering entity shall pro-
vide for timely grievance and appeals mechanisms with re-
spect to qualified health benefits plans that the Commis-
sioner shall establish consistent with this section. The 
Commissioner shall establish time limits for each of such 
mechanisms and implement them in a manner that is pro-
tective to the needs of patients. 
(b) INTERNAL CLAIMS AND APPEALS PROCESS.— 
Under a qualified health benefits plan the QHBP offering 
entity shall provide an internal claims and appeals process 
that initially incorporates the claims and appeals proce-
dures (including urgent claims) set forth at section 
2560.503–1 of title 29, Code of Federal Regulations, as 
published on November 21, 2000 (65 Fed. Reg. 70246) 
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and shall update such process in accordance with any 
standards that the Commissioner may establish. 
(c) EXTERNAL REVIEW PROCESS.— 
(1) IN GENERAL.—The Commissioner shall es-
tablish an external review process (including proce-
dures for expedited reviews of urgent claims) that 
provides for an impartial, independent, and de novo 
review of denied claims under this division. 
(2) REQUIRING FAIR GRIEVANCE AND APPEALS 
MECHANISMS.—A determination made, with respect 
to a qualified health benefits plan offered by a 
QHBP offering entity, under the external review 
process established under this subsection shall be 
binding on the plan and the entity. 
(d) TIME LIMITS.—The Commissioner shall establish 
time limits for each of these processes and implement 
them in a manner that is protective to the patient. 
(e) CONSTRUCTION.—Nothing in this section shall be 
construed as affecting the availability of judicial review 
under State law for adverse decisions under subsection (b) 
or (c), subject to section 251. 
SEC. 233. REQUIRING INFORMATION TRANSPARENCY AND 
PLAN DISCLOSURE. 
(a) ACCURATE AND TIMELY DISCLOSURE.— 
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(1) FOR
EXCHANGE-PARTICIPATING
HEALTH 
BENEFITS PLANS.—A QHBP offering entity offering 
an Exchange-participating health benefits plan shall 
comply with standards established by the Commis-
sioner for the accurate and timely disclosure to the 
Commissioner and the public of plan documents, 
plan terms and conditions, claims payment policies 
and practices, periodic financial disclosure, data on 
enrollment, data on disenrollment, data on the num-
ber of claims denials, data on rating practices, infor-
mation on cost-sharing and payments with respect to 
any out-of-network coverage, and other information 
as determined appropriate by the Commissioner. 
(2) EMPLOYMENT-BASED HEALTH PLANS.—The 
Secretary of Labor shall update and harmonize the 
Secretary’s rules concerning the accurate and timely 
disclosure to participants by group health plans of 
plan disclosure, plan terms and conditions, and peri-
odic financial disclosure with the standards estab-
lished by the Commissioner under paragraph (1). 
(3) USE OF PLAIN LANGUAGE.— 
(A) IN GENERAL.—The disclosures under 
paragraphs (1) and (2) shall be provided in 
plain language. 
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(B) DEFINITION.—In this paragraph, the 
term ‘‘plain language’’ means language that the 
intended audience, including individuals with 
limited English proficiency, can readily under-
stand and use because that language is concise, 
well-organized, and follows other best practices 
of plain language writing. 
(C) GUIDANCE.—The Commissioner and 
the Secretary of Labor shall jointly develop and 
issue guidance on best practices of plain lan-
guage writing. 
(4) INFORMATION ON RIGHTS.—The informa-
tion disclosed under this subsection shall include in-
formation on enrollee and participant rights under 
this division. 
(5) COST-SHARING
TRANSPARENCY.—A quali-
fied health benefits plan shall allow individuals to 
learn 
the 
amount 
of 
cost-sharing 
(including 
deductibles, copayments, and coinsurance) under the 
individual’s plan or coverage that the individual 
would be responsible for paying with respect to the 
furnishing of a specific item or service by a partici-
pating provider in a timely manner upon request. At 
a minimum, this information shall be made available 
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to such individual via an Internet Website and other 
means for individuals without access to the Internet. 
(b) CONTRACTING REIMBURSEMENT.—A qualified 
health benefits plan shall comply with standards estab-
lished by the Commissioner to ensure transparency to each 
health care provider relating to reimbursement arrange-
ments between such plan and such provider. 
(c) PHARMACY BENEFIT MANAGERS TRANSPARENCY 
REQUIREMENTS.— 
(1) IN GENERAL.—If a QHBP offering entity 
contracts with a pharmacy benefit manager or other 
entity (in this subsection referred to as a ‘‘PBM’’) 
to manage prescription drug coverage or otherwise 
control prescription drug costs under a qualified 
health benefits plan, the PBM shall provide at least 
annually to the Commissioner and to the QHBP of-
fering entity offering such plan the following infor-
mation, in a form and manner to be determined by 
the Commissioner: 
(A) Information on the number and total 
cost of prescriptions under the contract that are 
filled via mail order and at retail pharmacies. 
(B) An estimate of aggregate average pay-
ments under the contract, per prescription 
(weighted by prescription volume), made to mail 
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order and retail pharmacies, and the average 
amount, per prescription, that the PBM was 
paid by the plan for prescriptions filled at mail 
order and retail pharmacists. 
(C) An estimate of the aggregate average 
payment per prescription (weighted by prescrip-
tion volume) under the contract received from 
pharmaceutical manufacturers, including all re-
bates, discounts, prices concessions, or adminis-
trative, and other payments from pharma-
ceutical manufacturers, and a description of the 
types of payments, and the amount of these 
payments that were shared with the plan, and 
a description of the percentage of prescriptions 
for which the PBM received such payments. 
(D) Information on the overall percentage 
of generic drugs dispensed under the contract 
at retail and mail order pharmacies, and the 
percentage of cases in which a generic drug is 
dispensed when available. 
(E) Information on the percentage and 
number of cases under the contract in which in-
dividuals were switched because of PBM poli-
cies or at the direct or indirect control of the 
PBM from a prescribed drug that had a lower 
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cost for the QHBP offering entity to a drug 
that had a higher cost for the QHBP offering 
entity, the rationale for these switches, and a 
description of the PBM policies governing such 
switches. 
(2) CONFIDENTIALITY OF INFORMATION.—In-
formation disclosed by a PBM to the Commissioner 
or a QHBP offering entity under this subsection is 
confidential and shall not be disclosed by the Com-
missioner or the QHBP offering entity in a form 
which discloses the identity of a specific PBM or 
prices charged by such PBM or a specific retailer, 
manufacturer, or wholesaler, except only by the 
Commissioner— 
(A) to permit State or Federal law enforce-
ment authorities to use the information pro-
vided for program compliance purposes and for 
the purpose of combating waste, fraud, and 
abuse; 
(B) to permit the Comptroller General, the 
Medicare Payment Advisory Commission, or the 
Secretary of Health and Human Services to re-
view the information provided; and 
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(C) to permit the Director of the Congres-
sional Budget Office to review the information 
provided. 
(3) ANNUAL PUBLIC REPORT.—On an annual 
basis, the Commissioner shall prepare a public re-
port providing industrywide aggregate or average in-
formation to be used in assessing the overall impact 
of PBMs on prescription drug prices and spending. 
Such report shall not disclose the identity of a spe-
cific PBM, or prices charged by such PBM, or a 
specific retailer, manufacturer, or wholesaler, or any 
other confidential or trade secret information. 
(4) PENALTIES.—The provisions of subsection 
(b)(3)(C) of section 1927 shall apply to a PBM that 
fails to provide information required under sub-
section (a) or that knowingly provides false informa-
tion in the same manner as such provisions apply to 
a manufacturer with an agreement under such sec-
tion that fails to provide information under sub-
section (b)(3)(A) of such section or knowingly pro-
vides false information under such section, respec-
tively. 
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SEC. 234. APPLICATION TO QUALIFIED HEALTH BENEFITS 
PLANS 
NOT 
OFFERED 
THROUGH 
THE 
HEALTH INSURANCE EXCHANGE. 
The requirements of the previous provisions of this 
subtitle shall apply to qualified health benefits plans that 
are not being offered through the Health Insurance Ex-
change only to the extent specified by the Commissioner. 
SEC. 235. TIMELY PAYMENT OF CLAIMS. 
A QHBP offering entity shall comply with the re-
quirements of section 1857(f) of the Social Security Act 
with respect to a qualified health benefits plan it offers 
in the same manner as a Medicare Advantage organization 
is required to comply with such requirements with respect 
to a Medicare Advantage plan it offers under part C of 
Medicare. 
SEC. 236. STANDARDIZED RULES FOR COORDINATION AND 
SUBROGATION OF BENEFITS. 
The Commissioner shall establish standards for the 
coordination and subrogation of benefits and reimburse-
ment of payments in cases of qualified health benefits 
plans involving individuals and multiple plan coverage. 
SEC. 237. APPLICATION OF ADMINISTRATIVE SIMPLIFICA-
TION. 
A QHBP offering entity is required to comply with 
administrative simplification provisions under part C of 
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title XI of the Social Security Act with respect to qualified 
health benefits plans it offers. 
SEC. 
238. 
STATE 
PROHIBITIONS 
ON 
DISCRIMINATION 
AGAINST HEALTH CARE PROVIDERS. 
This Act (and the amendments made by this Act) 
shall not be construed as superseding laws, as they now 
or hereinafter exist, of any State or jurisdiction designed 
to prohibit a qualified health benefits plan from discrimi-
nating with respect to participation, reimbursement, cov-
ered services, indemnification, or related requirements 
under such plan against a health care provider that is act-
ing within the scope of that provider’s license or certifi-
cation under applicable State law. 
SEC. 239. PROTECTION OF PHYSICIAN PRESCRIBER INFOR-
MATION. 
(a) STUDY.—The Secretary of Health and Human 
Services shall conduct a study on the use of physician pre-
scriber information in sales and marketing practices of 
pharmaceutical manufacturers. 
(b) REPORT.—Based on the study conducted under 
subsection (a), the Secretary shall submit to Congress a 
report on actions needed to be taken by the Congress or 
the Secretary to protect providers from biased marketing 
and sales practices. 
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SEC. 240. DISSEMINATION OF ADVANCE CARE PLANNING 
INFORMATION. 
(a) IN GENERAL.—The QHBP offering entity — 
(1) shall provide for the dissemination of infor-
mation related to end-of-life planning to individuals 
seeking enrollment in Exchange-participating health 
benefits plans offered through the Exchange; 
(2) shall present such individuals with— 
(A) the option to establish advanced direc-
tives and physician’s orders for life sustaining 
treatment according to the laws of the State in 
which the individual resides; and 
(B) information related to other planning 
tools; and 
(3) shall not promote suicide, assisted suicide, 
euthanasia, or mercy killing. 
The information presented under paragraph (2) shall not 
presume the withdrawal of treatment and shall include 
end-of-life planning information that includes options to 
maintain all or most medical interventions. 
(b) CONSTRUCTION.— Nothing in this section shall 
be construed— 
(1) to require an individual to complete an ad-
vanced directive or a physician’s order for life sus-
taining treatment or other end-of-life planning docu-
ment; 
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(2) to require an individual to consent to re-
strictions on the amount, duration, or scope of med-
ical benefits otherwise covered under a qualified 
health benefits plan; or 
(3) to promote suicide, assisted suicide, eutha-
nasia, or mercy killing. 
(c) ADVANCED DIRECTIVE DEFINED.—In this sec-
tion, the term ‘‘advanced directive’’ includes a living will, 
a comfort care order, or a durable power of attorney for 
health care. 
(d) PROHIBITION ON THE PROMOTION OF ASSISTED 
SUICIDE.— 
(1) IN GENERAL.—Subject to paragraph (3), 
information provided to meet the requirements of 
subsection (a)(2) shall not include advanced direc-
tives or other planning tools that list or describe as 
an option suicide, assisted suicide, euthanasia, or 
mercy killing, regardless of legality. 
(2) CONSTRUCTION.—Nothing in paragraph (1) 
shall be construed to apply to or affect any option 
to— 
(A) withhold or withdraw of medical treat-
ment or medical care; 
(B) withhold or withdraw of nutrition or 
hydration; and 
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(C) provide palliative or hospice care or 
use an item, good, benefit, or service furnished 
for the purpose of alleviating pain or discom-
fort, even if such use may increase the risk of 
death, so long as such item, good, benefit, or 
service is not also furnished for the purpose of 
causing, or the purpose of assisting in causing, 
death, for any reason. 
(3) NO PREEMPTION OF STATE LAW.—Nothing 
in this section shall be construed to preempt or oth-
erwise have any effect on State laws regarding ad-
vance care planning, palliative care, or end-of-life de-
cision-making. 
Subtitle E—Governance 
SEC. 241. HEALTH CHOICES ADMINISTRATION; HEALTH 
CHOICES COMMISSIONER. 
(a) IN GENERAL.—There is hereby established, as an 
independent agency in the executive branch of the Govern-
ment, a Health Choices Administration (in this division 
referred to as the ‘‘Administration’’). 
(b) COMMISSIONER.— 
(1) IN GENERAL.—The Administration shall be 
headed by a Health Choices Commissioner (in this 
division referred to as the ‘‘Commissioner’’) who 
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shall be appointed by the President, by and with the 
advice and consent of the Senate. 
(2) COMPENSATION; ETC.—The provisions of 
paragraphs (2), (5), and (7) of subsection (a) (relat-
ing to compensation, terms, general powers, rule-
making, and delegation) of section 702 of the Social 
Security Act (42 U.S.C. 902) shall apply to the 
Commissioner and the Administration in the same 
manner as such provisions apply to the Commis-
sioner of Social Security and the Social Security Ad-
ministration. 
(c) INSPECTOR
GENERAL.—For provision estab-
lishing an Office of the Inspector General for the Health 
Choices Administration, see section 1647. 
SEC. 242. DUTIES AND AUTHORITY OF COMMISSIONER. 
(a) DUTIES.—The Commissioner is responsible for 
carrying out the following functions under this division: 
(1) QUALIFIED PLAN STANDARDS.—The estab-
lishment of qualified health benefits plan standards 
under this title, including the enforcement of such 
standards in coordination with State insurance regu-
lators and the Secretaries of Labor and the Treas-
ury. 
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(2) HEALTH INSURANCE EXCHANGE.—The es-
tablishment and operation of a Health Insurance 
Exchange under subtitle A of title III. 
(3) INDIVIDUAL
AFFORDABILITY
CREDITS.— 
The administration of individual affordability credits 
under subtitle C of title III, including determination 
of eligibility for such credits. 
(4) ADDITIONAL FUNCTIONS.—Such additional 
functions as may be specified in this division. 
(b) PROMOTING ACCOUNTABILITY.— 
(1) IN GENERAL.—The Commissioner shall un-
dertake activities in accordance with this subtitle to 
promote accountability of QHBP offering entities in 
meeting Federal health insurance requirements, re-
gardless of whether such accountability is with re-
spect to qualified health benefits plans offered 
through the Health Insurance Exchange or outside 
of such Exchange. 
(2) COMPLIANCE EXAMINATION AND AUDITS.— 
(A) IN
GENERAL.—The Commissioner 
shall, in coordination with States, conduct au-
dits of qualified health benefits plan compliance 
with Federal requirements.
Such audits may 
include random compliance audits and targeted 
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audits in response to complaints or other sus-
pected noncompliance. 
(B) RECOUPMENT OF COSTS IN CONNEC-
TION
WITH
EXAMINATION
AND
AUDITS.—The 
Commissioner is authorized to recoup from 
qualified health benefits plans reimbursement 
for the costs of such examinations and audit of 
such QHBP offering entities. 
(c) DATA COLLECTION.—The Commissioner shall 
collect data for purposes of carrying out the Commis-
sioner’s duties, including for purposes of promoting qual-
ity and value, protecting consumers, and addressing dis-
parities in health and health care and may share such data 
with the Secretary of Health and Human Services. 
(d) SANCTIONS AUTHORITY.— 
(1) IN GENERAL.—In the case that the Com-
missioner determines that a QHBP offering entity 
violates a requirement of this title, the Commis-
sioner may, in coordination with State insurance 
regulators and the Secretary of Labor, provide, in 
addition to any other remedies authorized by law, 
for any of the remedies described in paragraph (2). 
(2) REMEDIES.—The remedies described in this 
paragraph, with respect to a qualified health benefits 
plan offered by a QHBP offering entity, are— 
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(A) civil money penalties of not more than 
the amount that would be applicable under 
similar circumstances for similar violations 
under section 1857(g) of the Social Security 
Act; 
(B) suspension of enrollment of individuals 
under such plan after the date the Commis-
sioner notifies the entity of a determination 
under paragraph (1) and until the Commis-
sioner is satisfied that the basis for such deter-
mination has been corrected and is not likely to 
recur; 
(C) in the case of an Exchange-partici-
pating health benefits plan, suspension of pay-
ment to the entity under the Health Insurance 
Exchange for individuals enrolled in such plan 
after the date the Commissioner notifies the en-
tity of a determination under paragraph (1) 
and until the Secretary is satisfied that the 
basis for such determination has been corrected 
and is not likely to recur; or 
(D) working with State insurance regu-
lators to terminate plans for repeated failure by 
the offering entity to meet the requirements of 
this title. 
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(e) STANDARD DEFINITIONS
OF INSURANCE
AND 
MEDICAL TERMS.—The Commissioner shall provide for 
the development of standards for the definitions of terms 
used in health insurance coverage, including insurance-re-
lated terms. 
(f) EFFICIENCY IN ADMINISTRATION.—The Commis-
sioner shall issue regulations for the effective and efficient 
administration of the Health Insurance Exchange and af-
fordability credits under subtitle C, including, with respect 
to the determination of eligibility for affordability credits, 
the use of personnel who are employed in accordance with 
the requirements of title 5, United States Code, to carry 
out the duties of the Commissioner or, in the case of sec-
tions 308 and 341(b)(2), the use of State personnel who 
are employed in accordance with standards prescribed by 
the Office of Personnel Management pursuant to section 
208 of the Intergovernmental Personnel Act of 1970 (42 
U.S.C. 4728). 
SEC. 243. CONSULTATION AND COORDINATION. 
(a) CONSULTATION.—In carrying out the Commis-
sioner’s duties under this division, the Commissioner, as 
appropriate, shall consult at least with the following: 
(1) State attorneys general and State insurance 
regulators, including concerning the standards for 
health insurance coverage that is a qualified health 
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benefits plan under this title and enforcement of 
such standards. 
(2) The National Association of Insurance 
Commissioners, including for purposes of using 
model guidelines established by such association for 
purposes of subtitles B and D. 
(3) Appropriate State agencies, specifically con-
cerning the administration of individual affordability 
credits under subtitle C of title III and the offering 
of Exchange-participating health benefits plans, to 
Medicaid eligible individuals under subtitle A of such 
title. 
(4) The Federal Trade Commission, specifically 
concerning the development and issuance of guid-
ance, rules, or standards regarding fair marketing 
practices under section 231 or otherwise, or any con-
sumer disclosure requirements under section 233 or 
otherwise. 
(5) Other appropriate Federal agencies. 
(6) Indian tribes and tribal organizations. 
(b) COORDINATION.— 
(1) IN GENERAL.—In carrying out the func-
tions of the Commissioner, including with respect to 
the enforcement of the provisions of this division, 
the Commissioner shall work in coordination with 
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existing Federal and State entities to the maximum 
extent feasible consistent with this division and in a 
manner that prevents conflicts of interest in duties 
and ensures effective enforcement. 
(2) UNIFORM STANDARDS.—The Commissioner, 
in coordination with such entities, shall seek to 
achieve uniform standards that adequately protect 
consumers in a manner that does not unreasonably 
affect employers and insurers. 
SEC. 244. HEALTH INSURANCE OMBUDSMAN. 
(a) IN GENERAL.—The Commissioner shall appoint 
within the Health Choices Administration a Qualified 
Health Benefits Plan Ombudsman who shall have exper-
tise and experience in the fields of health care and edu-
cation of (and assistance to) individuals. 
(b) DUTIES.—The Qualified Health Benefits Plan 
Ombudsman shall, in a linguistically appropriate man-
ner— 
(1) receive complaints, grievances, and requests 
for information submitted by individuals through 
means such as the mail, by telephone, electronically, 
and in person; 
(2) provide assistance with respect to com-
plaints, grievances, and requests referred to in para-
graph (1), including— 
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(A) helping individuals determine the rel-
evant information needed to seek an appeal of 
a decision or determination; 
(B) assistance to such individuals in choos-
ing a qualified health benefits plan in which to 
enroll; 
(C) assistance to such individuals with any 
problems arising from disenrollment from such 
a plan; and 
(D) assistance to such individuals in pre-
senting information under subtitle C (relating 
to affordability credits); and 
(3) submit annual reports to Congress and the 
Commissioner that describe the activities of the Om-
budsman and that include such recommendations for 
improvement in the administration of this division as 
the Ombudsman determines appropriate. The Om-
budsman shall not serve as an advocate for any in-
creases in payments or new coverage of services, but 
may identify issues and problems in payment or cov-
erage policies. 
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Subtitle F—Relation to Other 
Requirements; Miscellaneous 
SEC. 251. RELATION TO OTHER REQUIREMENTS. 
(a) COVERAGE
NOT
OFFERED
THROUGH
EX-
CHANGE.— 
(1) IN GENERAL.—In the case of health insur-
ance coverage not offered through the Health Insur-
ance Exchange (whether or not offered in connection 
with an employment-based health plan), and in the 
case of employment-based health plans, the require-
ments of this title do not supercede any require-
ments applicable under titles XXII and XXVII of 
the Public Health Service Act, parts 6 and 7 of sub-
title B of title I of the Employee Retirement Income 
Security Act of 1974, or State law, except insofar as 
such requirements prevent the application of a re-
quirement of this division, as determined by the 
Commissioner. 
(2) CONSTRUCTION.—Nothing in paragraphs 
(1) or (2) shall be construed as affecting the appli-
cation of section 514 of the Employee Retirement 
Income Security Act of 1974. 
(b) COVERAGE OFFERED THROUGH EXCHANGE.— 
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(1) IN GENERAL.—In the case of health insur-
ance coverage offered through the Health Insurance 
Exchange— 
(A) the requirements of this title do not 
supercede any requirements (including require-
ments relating to genetic information non-
discrimination and mental health parity) appli-
cable under title XXVII of the Public Health 
Service Act or under State law, except insofar 
as such requirements prevent the application of 
a requirement of this division, as determined by 
the Commissioner; and 
(B) individual rights and remedies under 
State laws shall apply. 
(2) CONSTRUCTION.—In the case of coverage 
described in paragraph (1), nothing in such para-
graph shall be construed as preventing the applica-
tion of rights and remedies under State laws to 
health insurance issuers generally with respect to 
any requirement referred to in paragraph (1)(A). 
The previous sentence shall not be construed as pro-
viding for the applicability of rights or remedies 
under State laws with respect to requirements appli-
cable to employers or other plan sponsors in connec-
tion with arrangements which are treated as group 
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health plans under section 802(a)(1) of the Em-
ployee Retirement Income Security Act of 1974. 
SEC. 252. PROHIBITING DISCRIMINATION IN HEALTH CARE. 
(a) IN GENERAL.—Except as otherwise explicitly per-
mitted by this Act and by subsequent regulations con-
sistent with this Act, all health care and related services 
(including insurance coverage and public health activities) 
covered by this Act shall be provided without regard to 
personal characteristics extraneous to the provision of 
high quality health care or related services. 
(b) IMPLEMENTATION.—To implement the require-
ment set forth in subsection (a), the Secretary of Health 
and Human Services shall, not later than 18 months after 
the date of the enactment of this Act, promulgate such 
regulations as are necessary or appropriate to insure that 
all health care and related services (including insurance 
coverage and public health activities) covered by this Act 
are provided (whether directly or through contractual, li-
censing, or other arrangements) without regard to per-
sonal characteristics extraneous to the provision of high 
quality health care or related services. 
SEC. 253. WHISTLEBLOWER PROTECTION. 
(a) RETALIATION PROHIBITED.—No employer may 
discharge any employee or otherwise discriminate against 
any employee with respect to his compensation, terms, 
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conditions, or other privileges of employment because the 
employee (or any person acting pursuant to a request of 
the employee)— 
(1) provided, caused to be provided, or is about 
to provide or cause to be provided to the employer, 
the Federal Government, or the attorney general of 
a State information relating to any violation of, or 
any act or omission the employee reasonably believes 
to be a violation of any provision of this Act or any 
order, rule, or regulation promulgated under this 
Act; 
(2) testified or is about to testify in a pro-
ceeding concerning such violation; 
(3) assisted or participated or is about to assist 
or participate in such a proceeding; or 
(4) objected to, or refused to participate in, any 
activity, policy, practice, or assigned task that the 
employee (or other such person) reasonably believed 
to be in violation of any provision of this Act or any 
order, rule, or regulation promulgated under this 
Act. 
(b) ENFORCEMENT ACTION.—An employee covered 
by this section who alleges discrimination by an employer 
in violation of subsection (a) may bring an action governed 
by the rules, procedures, legal burdens of proof, and rem-
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edies set forth in section 40(b) of the Consumer Product 
Safety Act (15 U.S.C. 2087(b)). 
(c) EMPLOYER DEFINED.—As used in this section, 
the term ‘‘employer’’ means any person (including one or 
more individuals, partnerships, associations, corporations, 
trusts, professional membership organization including a 
certification, disciplinary, or other professional body, unin-
corporated organizations, nongovernmental organizations, 
or trustees) engaged in profit or nonprofit business or in-
dustry whose activities are governed by this Act, and any 
agent, contractor, subcontractor, grantee, or consultant of 
such person. 
(d) RULE OF CONSTRUCTION.—The rule of construc-
tion set forth in section 20109(h) of title 49, United 
States Code, shall also apply to this section. 
SEC. 254. CONSTRUCTION REGARDING COLLECTIVE BAR-
GAINING. 
Nothing in this division shall be construed to alter 
or supersede any statutory or other obligation to engage 
in collective bargaining over the terms or conditions of em-
ployment related to health care. Any plan amendment 
made pursuant to a collective bargaining agreement relat-
ing to the plan which amends the plan solely to conform 
to any requirement added by this division shall not be 
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treated as a termination of such collective bargaining 
agreement. 
SEC. 255. SEVERABILITY. 
If any provision of this Act, or any application of such 
provision to any person or circumstance, is held to be un-
constitutional, the remainder of the provisions of this Act 
and the application of the provision to any other person 
or circumstance shall not be affected. 
SEC. 256. TREATMENT OF HAWAII PREPAID HEALTH CARE 
ACT. 
(a) IN GENERAL.—Subject to this section— 
(1) nothing in this division (or an amendment 
made by this division) shall be construed to modify 
or limit the application of the exemption for the Ha-
waii Prepaid Health Care Act (Haw. Rev. Stat. §§ 
393–1 et seq.) as provided for under section 
514(b)(5) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1144(b)(5)), and such 
exemption shall also apply with respect to the provi-
sions of this division; and 
(2) for purposes of this division (and the 
amendments made by this division), coverage pro-
vided pursuant to the Hawaii Prepaid Health Care 
Act shall be treated as a qualified health benefits 
plan providing acceptable coverage so long as the 
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Secretary of Labor determines that such coverage 
for employees (taking into account the benefits and 
the cost to employees for such benefits) is substan-
tially equivalent to or greater than the coverage pro-
vided for employees pursuant to the essential bene-
fits package. 
(b) COORDINATION WITH STATE LAW OF HAWAII.— 
The Commissioner shall, based on ongoing consultation 
with the appropriate officials of the State of Hawaii, make 
adjustments to rules and regulations of the Commissioner 
under this division as may be necessary, as determined 
by the Commissioner, to most effectively coordinate the 
provisions of this division with the provisions of the Ha-
waii Prepaid Health Care Act, taking into account any 
changes made from time to time to the Hawaii Prepaid 
Health Care Act and related laws of such State. 
SEC. 257. ACTIONS BY STATE ATTORNEYS GENERAL. 
Any State attorney general may bring a civil action 
in the name of such State as parens patriae on behalf of 
natural persons residing in such State, in any district 
court of the United States or State court having jurisdic-
tion of the defendant to secure monetary or equitable relief 
for violation of any provisions of this title or regulations 
issued thereunder. Nothing in this section shall be con-
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strued as affecting the application of section 514 of the 
Employee Retirement Income Security Act of 1974. 
SEC. 258. APPLICATION OF STATE AND FEDERAL LAWS RE-
GARDING ABORTION. 
(a) NO PREEMPTION OF STATE LAWS REGARDING 
ABORTION.—Nothing in this Act shall be construed to 
preempt or otherwise have any effect on State laws regard-
ing the prohibition of (or requirement of) coverage, fund-
ing, or procedural requirements on abortions, including 
parental notification or consent for the performance of an 
abortion on a minor. 
(b) NO EFFECT ON FEDERAL LAWS REGARDING 
ABORTION.— 
(1) IN GENERAL.—Nothing in this Act shall be 
construed to have any effect on Federal laws regard-
ing— 
(A) conscience protection; 
(B) willingness or refusal to provide abor-
tion; and 
(C) discrimination on the basis of the will-
ingness or refusal to provide, pay for, cover, or 
refer for abortion or to provide or participate in 
training to provide abortion. 
(c) NO EFFECT ON FEDERAL CIVIL RIGHTS LAW.— 
Nothing in this section shall alter the rights and obliga-
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tions of employees and employers under title VII of the 
Civil Rights Act of 1964. 
SEC. 259. NONDISCRIMINATION ON ABORTION AND RE-
SPECT FOR RIGHTS OF CONSCIENCE. 
(a) NONDISCRIMINATION.—A Federal agency or pro-
gram, and any State or local government that receives 
Federal financial assistance under this Act (or an amend-
ment made by this Act), may not— 
(1) subject any individual or institutional health 
care entity to discrimination; or 
(2) require any health plan created or regulated 
under this Act (or an amendment made by this Act) 
to subject any individual or institutional health care 
entity to discrimination, 
on the basis that the health care entity does not provide, 
pay for, provide coverage of, or refer for abortions. 
(b) DEFINITION.—In this section, the term ‘‘health 
care entity’’ includes an individual physician or other 
health care professional, a hospital, a provider-sponsored 
organization, a health maintenance organization, a health 
insurance plan, or any other kind of health care facility, 
organization, or plan. 
(c) ADMINISTRATION.—The Office for Civil Rights of 
the Department of Health and Human Services is des-
ignated to receive complaints of discrimination based on 
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this section, and coordinate the investigation of such com-
plaints. 
SEC. 260. AUTHORITY OF FEDERAL TRADE COMMISSION. 
Section 6 of the Federal Trade Commission Act (15 
U.S.C. 46) is amended by striking ‘‘and prepare reports’’ 
and all that follows and inserting the following: ‘‘and pre-
pare reports, and to share information under clauses (f) 
and (k), relating to the business of insurance. Notwith-
standing section 4, such authority shall include the au-
thority to conduct studies and prepare reports, and to 
share information under clauses (f) and (k), relating to 
the business of insurance, without regard to whether the 
entity or entities that is the subject of such studies, re-
ports, or information is a for-profit or not-for-profit enti-
ty.’’. 
SEC. 261. CONSTRUCTION REGARDING STANDARD OF 
CARE. 
(a) IN GENERAL.—The development, recognition, or 
implementation of any guideline or other standard under 
a provision described in subsection (b) shall not be con-
strued to establish the standard of care or duty of care 
owed by health care providers to their patients in any med-
ical malpractice action or claim (as defined in section 
431(7) of the Health Care Quality Improvement Act of 
1986 (42 U.S.C. 11151(7)). 
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(b) PROVISIONS DESCRIBED.—The provisions de-
scribed in this subsection are the following: 
(1) Section 324 (relating to modernized pay-
ment initiatives and delivery system reform under 
the public health option). 
(2) The amendments made by section 1151 (re-
lating to reducing potentially preventable hospital re-
admissions). 
(3) The amendments made by section 1751 (re-
lating to health care acquired conditions). 
(4) Section 3131 of the Public Health Service 
Act (relating to the Task Force on Clinical Preven-
tive Services), added by section 2301. 
(5) Part D of title IX of the Public Health 
Service Act (relating to implementation of best prac-
tices in the delivery of health care), added by section 
2401. 
SEC. 262. RESTORING APPLICATION OF ANTITRUST LAWS 
TO HEALTH SECTOR INSURERS. 
(a) AMENDMENT TO MCCARRAN-FERGUSON ACT.— 
Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), 
commonly known as the McCarran-Ferguson Act, is 
amended by adding at the end the following: 
‘‘(c)(1) Except as provided in paragraph (2), nothing 
contained in this Act shall modify, impair, or supersede 
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the operation of any of the antitrust laws with respect to 
price fixing, market allocation, or monopolization (or at-
tempting to monopolize) by— 
‘‘(A) a person engaged in the business of health 
insurance, in connection with providing health insur-
ance; or 
‘‘(B) a person engaged in the business of med-
ical malpractice insurance, in connection with pro-
viding medical malpractice insurance. 
‘‘(2) Paragraph (1) shall not apply to— 
‘‘(A) collecting, compiling, classifying, or dis-
seminating historical loss data; 
‘‘(B) determining a loss development factor ap-
plicable to historical loss data; 
‘‘(C) performing actuarial services if doing so 
does not involve a restraint of trade; or 
‘‘(D) information gathering and rate setting ac-
tivities of a State insurance commission or other 
State regulatory entity with authority to set insur-
ance rates. 
‘‘(3) For purposes of this subsection— 
‘‘(A) the term ‘antitrust laws’ has the meaning 
given it in subsection (a) of the first section of the 
Clayton Act, except that such term includes section 
5 of the Federal Trade Commission Act to the ex-
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tent that such section 5 applies to unfair methods of 
competition; 
‘‘(B) the term ‘historical loss data’ means infor-
mation respecting claims paid, or reserves held for 
claims reported, by any person engaged in the busi-
ness of insurance; and 
‘‘(C) the term ‘loss development factor’ means 
an adjustment to be made to the aggregate of losses 
incurred during a prior period of time that have 
been paid, or for which claims have been received 
and reserves are being held, in order to estimate the 
aggregate of the losses incurred during such period 
that will ultimately be paid.’’. 
(b) RELATED PROVISION.—For purposes of section 
5 of the Federal Trade Commission Act (15 U.S.C. 45) 
to the extent such section applies to unfair methods of 
competition, section 3(c) of the McCarran-Ferguson Act 
shall apply with respect to the business of health insur-
ance, and with respect to the business of medical mal-
practice insurance, without regard to whether such busi-
ness is carried on for profit, notwithstanding the definition 
of ‘‘Corporation’’ contained in section 4 of the Federal 
Trade Commission Act. 
(c) 
RELATED
PRESERVATION
OF
ANTITRUST 
LAWS.—Except as provided in subsections (a) and (b), 
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nothing in this Act, or in the amendments made by this 
Act, shall be construed to modify, impair, or supersede 
the operation of any of the antitrust laws. For purposes 
of the preceding sentence, the term ‘‘antitrust laws’’ has 
the meaning given it in subsection (a) of the first section 
of the Clayton Act, except that it includes section 5 of 
the Federal Trade Commission Act to the extent that such 
section 5 applies to unfair methods of competition. 
SEC. 263. STUDY AND REPORT ON METHODS TO INCREASE 
EHR USE BY SMALL HEALTH CARE PRO-
VIDERS. 
(a) STUDY.—The Secretary of Health and Human 
Services shall conduct a study of potential methods to in-
crease the use of qualified electronic health records (as 
defined in section 3000(13) of the Public Health Service 
Act) by small health care providers. Such study shall con-
sider at least the following methods: 
(1) Providing for higher rates of reimbursement 
or other incentives for such health care providers to 
use electronic health records (taking into consider-
ation initiatives by private health insurance compa-
nies and incentives provided under Medicare under 
title XVIII of the Social Security Act, Medicaid 
under title XIX of such Act, and other programs). 
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(2) Promoting low-cost electronic health record 
software packages that are available for use by such 
health care providers, including software packages 
that are available to health care providers through 
the Veterans Administration and other sources. 
(3) Training and education of such health care 
providers on the use of electronic health records. 
(4) Providing assistance to such health care 
providers on the implementation of electronic health 
records. 
(b) REPORT.—Not later than December 31, 2013, 
the Secretary of Health and Human Services shall submit 
to Congress a report containing the results of the study 
conducted under subsection (a), including recommenda-
tions for legislation or administrative action to increase 
the use of electronic health records by small health care 
providers that include the use of both public and private 
funding sources. 
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TITLE III—HEALTH INSURANCE 
EXCHANGE 
AND 
RELATED 
PROVISIONS 
Subtitle A—Health Insurance 
Exchange 
SEC. 301. ESTABLISHMENT OF HEALTH INSURANCE EX-
CHANGE; OUTLINE OF DUTIES; DEFINITIONS. 
(a) ESTABLISHMENT.—There is established within 
the Health Choices Administration and under the direc-
tion of the Commissioner a Health Insurance Exchange 
in order to facilitate access of individuals and employers, 
through a transparent process, to a variety of choices of 
affordable, quality health insurance coverage, including a 
public health insurance option. 
(b) OUTLINE OF DUTIES OF COMMISSIONER.—In ac-
cordance with this subtitle and in coordination with appro-
priate Federal and State officials as provided under sec-
tion 243(b), the Commissioner shall— 
(1) under section 304 establish standards for, 
accept bids from, and negotiate and enter into con-
tracts with, QHBP offering entities for the offering 
of health benefits plans through the Health Insur-
ance Exchange, with different levels of benefits re-
quired under section 303, and including with respect 
to oversight and enforcement; 
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(2) under section 305 facilitate outreach and 
enrollment in such plans of Exchange-eligible indi-
viduals and employers described in section 302; and 
(3) conduct such activities related to the Health 
Insurance Exchange as required, including establish-
ment of a risk pooling mechanism under section 306 
and consumer protections under subtitle D of title 
II. 
SEC. 302. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOY-
ERS. 
(a) ACCESS TO COVERAGE.—In accordance with this 
section, all individuals are eligible to obtain coverage 
through enrollment in an Exchange-participating health 
benefits plan offered through the Health Insurance Ex-
change unless such individuals are enrolled in another 
qualified health benefits plan or other acceptable coverage. 
(b) DEFINITIONS.—In this division: 
(1) 
EXCHANGE-ELIGIBLE
INDIVIDUAL.—The 
term ‘‘Exchange-eligible individual’’ means an indi-
vidual who is eligible under this section to be en-
rolled through the Health Insurance Exchange in an 
Exchange-participating health benefits plan and, 
with respect to family coverage, includes dependents 
of such individual. 
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(2) 
EXCHANGE-ELIGIBLE
EMPLOYER.—The 
term ‘‘Exchange-eligible employer’’ means an em-
ployer that is eligible under this section to enroll 
through the Health Insurance Exchange employees 
of the employer (and their dependents) in Exchange- 
eligible health benefits plans. 
(3) 
EMPLOYMENT-RELATED
DEFINITIONS.— 
The terms ‘‘employer’’, ‘‘employee’’, ‘‘full-time em-
ployee’’, and ‘‘part-time employee’’ have the mean-
ings given such terms by the Commissioner for pur-
poses of this division. 
(c) TRANSITION.—Individuals and employers shall 
only be eligible to enroll or participate in the Health Insur-
ance Exchange in accordance with the following transition 
schedule: 
(1) FIRST YEAR.—In Y1 (as defined in section 
100(c))— 
(A) individuals described in subsection 
(d)(1), including individuals described in sub-
section (d)(3); and 
(B) smallest employers described in sub-
section (e)(1). 
(2) SECOND YEAR.—In Y2— 
(A) individuals and employers described in 
paragraph (1); and 
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(B) smaller employers described in sub-
section (e)(2). 
(3) THIRD AND SUBSEQUENT YEARS.—In Y3— 
(A) individuals and employers described in 
paragraph (2); 
(B) small employers described in sub-
section (e)(3); and 
(C) larger employers as permitted by the 
Commissioner under subsection (e)(4). 
(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 
subparagraph (C) or (D) 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 412. 
For purposes of subparagraph (B), in the case of an 
individual who is self-employed, who has at least 1 
employee, and who meets the requirements of section 
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412, such individual shall be deemed a full-time em-
ployee described in such subparagraph. 
(2) ACCEPTABLE COVERAGE.—For purposes of 
this division, the term ‘‘acceptable coverage’’ means 
any of the following: 
(A) QUALIFIED HEALTH BENEFITS PLAN 
COVERAGE.—Coverage under a qualified health 
benefits plan. 
(B) GRANDFATHERED HEALTH INSURANCE 
COVERAGE; COVERAGE UNDER CURRENT GROUP 
HEALTH
PLAN.—Coverage under a grand-
fathered health insurance coverage (as defined 
in subsection (a) of section 202) or under a 
current group health plan (described in sub-
section (b) of such section). 
(C) MEDICARE.—Coverage under part A of 
title XVIII of the Social Security Act. 
(D) MEDICAID.—Coverage for medical as-
sistance under title XIX of the Social Security 
Act, excluding such coverage that is only avail-
able because of the application of subsection 
(u), (z), or (aa) of section 1902 of such Act. 
(E) MEMBERS
OF
THE
ARMED
FORCES 
AND
DEPENDENTS
(INCLUDING
TRICARE).— 
Coverage under chapter 55 of title 10, United 
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States Code, including similar coverage fur-
nished under section 1781 of title 38 of such 
Code. 
(F) VA.—Coverage under the veteran’s 
health care program under chapter 17 of title 
38, United States Code. 
(G) OTHER COVERAGE.—Such other health 
benefits coverage, such as a State health bene-
fits risk pool, as the Commissioner, in coordina-
tion with the Secretary of the Treasury, recog-
nizes for purposes of this paragraph. 
The Commissioner shall make determinations under 
this paragraph in coordination with the Secretary of 
the Treasury. 
(3) CONTINUING ELIGIBILITY PERMITTED.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), once an individual qualifies 
as an Exchange-eligible individual under this 
subsection (including as an employee or depend-
ent of an employee of an Exchange-eligible em-
ployer) and enrolls under an Exchange-partici-
pating health benefits plan through the Health 
Insurance Exchange, the individual shall con-
tinue to be treated as an Exchange-eligible indi-
vidual until the individual is no longer enrolled 
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with an Exchange-participating health benefits 
plan. 
(B) EXCEPTIONS.— 
(i) IN GENERAL.—Subparagraph (A) 
shall not apply to an individual once the 
individual becomes eligible for coverage— 
(I) under part A of the Medicare 
program; 
(II) under the Medicaid program 
as a Medicaid-eligible individual, ex-
cept as permitted under clause (ii); or 
(III) in such other circumstances 
as the Commissioner may provide. 
(ii) TRANSITION PERIOD.—In the case 
described in clause (i)(II), the Commis-
sioner shall permit the individual to con-
tinue treatment under subparagraph (A) 
until such limited time as the Commis-
sioner determines it is administratively fea-
sible, consistent with minimizing disruption 
in the individual’s access to health care. 
(4) TRANSITION FOR CHIP ELIGIBLES.—An in-
dividual who is eligible for child health assistance 
under title XXI of the Social Security Act for a pe-
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riod during Y1 shall not be an Exchange-eligible in-
dividual during such period. 
(e) EMPLOYERS.— 
(1) SMALLEST
EMPLOYER.—Subject to para-
graph (5), smallest employers described in this para-
graph are employers with 25 or fewer employees. 
(2) SMALLER
EMPLOYERS.—Subject to para-
graph (5), smaller employers described in this para-
graph are employers that are not smallest employers 
described in paragraph (1) and have 50 or fewer em-
ployees. 
(3) SMALL EMPLOYERS.—Subject to paragraph 
(5), small employers described in this paragraph are 
employers that are not described in paragraph (1) or 
(2) and have 100 or fewer employees. 
(4) LARGER EMPLOYERS.— 
(A) IN GENERAL.—Beginning with Y3, the 
Commissioner may permit employers not de-
scribed in paragraph (1), (2), or (3) to be Ex-
change-eligible employers. 
(B) PHASE-IN.—In applying subparagraph 
(A), the Commissioner may phase-in the appli-
cation of such subparagraph based on the num-
ber of full-time employees of an employer and 
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such other considerations as the Commissioner 
deems appropriate. 
(5) CONTINUING
ELIGIBILITY.—Once an em-
ployer is permitted to be an Exchange-eligible em-
ployer under this subsection and enrolls employees 
through the Health Insurance Exchange, the em-
ployer shall continue to be treated as an Exchange- 
eligible employer for each subsequent plan year re-
gardless of the number of employees involved unless 
and until the employer meets the requirement of sec-
tion 411(a) through paragraph (1) of such section 
by offering a group health plan and not through of-
fering an Exchange-participating health benefits 
plan. 
(6) EMPLOYER PARTICIPATION AND CONTRIBU-
TIONS.— 
(A) SATISFACTION OF EMPLOYER RESPON-
SIBILITY.—For any year in which an employer 
is an Exchange-eligible employer, such employer 
may meet the requirements of section 412 with 
respect to employees of such employer by offer-
ing such employees the option of enrolling with 
Exchange-participating health benefits plans 
through the Health Insurance Exchange con-
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sistent with the provisions of subtitle B of title 
IV. 
(B) EMPLOYEE
CHOICE.—Any employee 
offered Exchange-participating health benefits 
plans by the employer of such employee under 
subparagraph (A) may choose coverage under 
any such plan. That choice includes, with re-
spect to family coverage, coverage of the de-
pendents of such employee. 
(7) AFFILIATED GROUPS.—Any employer which 
is part of a group of employers who are treated as 
a single employer under subsection (b), (c), (m), or 
(o) of section 414 of the Internal Revenue Code of 
1986 shall be treated, for purposes of this subtitle, 
as a single employer. 
(8) 
TREATMENT
OF
MULTI-EMPLOYER 
PLANS.—The plan sponsor of a group health plan 
(as defined in section 773(a) of the Employee Re-
tirement Income Security Act of 1974) that is a 
multi-employer plan (as defined in section 3(37) of 
such Act) may obtain health insurance coverage with 
respect to participants in the plan through the Ex-
change to the same extent that an employer not de-
scribed in paragraph (1) or (2) is permitted by the 
Commissioner to obtain health insurance coverage 
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through the Exchange as an Exchange-eligible em-
ployer. 
(9) OTHER COUNTING RULES.—The Commis-
sioner shall establish rules relating to how employees 
are counted for purposes of carrying out this sub-
section. 
(f) SPECIAL SITUATION AUTHORITY.—The Commis-
sioner shall have the authority to establish such rules as 
may be necessary to deal with special situations with re-
gard to uninsured individuals and employers participating 
as Exchange-eligible individuals and employers, such as 
transition periods for individuals and employers who gain, 
or lose, Exchange-eligible participation status, and to es-
tablish grace periods for premium payment. 
(g) SURVEYS OF INDIVIDUALS AND EMPLOYERS.— 
The Commissioner shall provide for periodic surveys of 
Exchange-eligible individuals and employers concerning 
satisfaction of such individuals and employers with the 
Health Insurance Exchange and Exchange-participating 
health benefits plans. 
(h) EXCHANGE ACCESS STUDY.— 
(1) IN GENERAL.—The Commissioner shall con-
duct a study of access to the Health Insurance Ex-
change for individuals and for employers, including 
individuals and employers who are not eligible and 
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enrolled in Exchange-participating health benefits 
plans. The goal of the study is to determine if there 
are significant groups and types of individuals and 
employers who are not Exchange-eligible individuals 
or employers, but who would have improved benefits 
and affordability if made eligible for coverage in the 
Exchange. 
(2) ITEMS INCLUDED IN STUDY.—Such study 
also shall examine— 
(A) the terms, conditions, and affordability 
of group health coverage offered by employers 
and QHBP offering entities outside of the Ex-
change compared to Exchange-participating 
health benefits plans; and 
(B) the affordability-test standard for ac-
cess of certain employed individuals to coverage 
in the Health Insurance Exchange. 
(3) REPORT.—Not later than January 1 of Y3, 
in Y6, and thereafter, the Commissioner shall sub-
mit to Congress a report on the study conducted 
under this subsection and shall include in such re-
port recommendations regarding changes in stand-
ards for Exchange eligibility for individuals and em-
ployers. 
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SEC. 303. BENEFITS PACKAGE LEVELS. 
(a) IN GENERAL.—The Commissioner shall specify 
the benefits to be made available under Exchange-partici-
pating health benefits plans during each plan year, con-
sistent with subtitle C of title II and this section. 
(b) LIMITATION ON HEALTH BENEFITS PLANS OF-
FERED BY OFFERING ENTITIES.—The Commissioner may 
not enter into a contract with a QHBP offering entity 
under section 304(c) for the offering of an Exchange-par-
ticipating health benefits plan in a service area unless the 
following requirements are met: 
(1) REQUIRED OFFERING OF BASIC PLAN.—The 
entity offers only one basic plan for such service 
area. 
(2) 
OPTIONAL
OFFERING
OF
ENHANCED 
PLAN.—If and only if the entity offers a basic plan 
for such service area, the entity may offer one en-
hanced plan for such area. 
(3) OPTIONAL OFFERING OF PREMIUM PLAN.— 
If and only if the entity offers an enhanced plan for 
such service area, the entity may offer one premium 
plan for such area. 
(4) OPTIONAL
OFFERING
OF
PREMIUM-PLUS 
PLANS.—If and only if the entity offers a premium 
plan for such service area, the entity may offer one 
or more premium-plus plans for such area. 
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All such plans may be offered under a single contract with 
the Commissioner. 
(c) SPECIFICATION
OF
BENEFIT
LEVELS
FOR 
PLANS.— 
(1) IN GENERAL.—The Commissioner shall es-
tablish the following standards consistent with this 
subsection and title II: 
(A) BASIC, ENHANCED, AND
PREMIUM 
PLANS.—Standards for 3 levels of Exchange- 
participating health benefits plans: basic, en-
hanced, and premium (in this division referred 
to as a ‘‘basic plan’’, ‘‘enhanced plan’’, and 
‘‘premium plan’’, respectively). 
(B) PREMIUM-PLUS
PLAN
BENEFITS.— 
Standards for additional benefits that may be 
offered, consistent with this subsection and sub-
title C of title II, under a premium plan (such 
a plan with additional benefits referred to in 
this division as a ‘‘premium-plus plan’’) . 
(2) BASIC PLAN.— 
(A) IN GENERAL.—A basic plan shall offer 
the essential benefits package required under 
title II for a qualified health benefits plan with 
an actuarial value of 70 percent of the full ac-
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tuarial value of the benefits provided under the 
reference benefits package. 
(B) TIERED COST-SHARING FOR AFFORD-
ABLE CREDIT ELIGIBLE INDIVIDUALS.—In the 
case of an affordable credit eligible individual 
(as defined in section 342(a)(1)) enrolled in an 
Exchange-participating health benefits plan, the 
benefits under a basic plan are modified to pro-
vide for the reduced cost-sharing for the income 
tier applicable to the individual under section 
324(c). 
(3) ENHANCED PLAN.—An enhanced plan shall 
offer, in addition to the level of benefits under the 
basic plan, a lower level of cost-sharing as provided 
under title II consistent with section 223(b)(5)(A). 
(4) PREMIUM
PLAN.—A premium plan shall 
offer, in addition to the level of benefits under the 
basic plan, a lower level of cost-sharing as provided 
under title II consistent with section 223(b)(5)(B). 
(5) PREMIUM-PLUS
PLAN.—A premium-plus 
plan is a premium plan that also provides additional 
benefits, such as adult oral health and vision care, 
approved by the Commissioner. The portion of the 
premium that is attributable to such additional ben-
efits shall be separately specified. 
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(6) RANGE
OF
PERMISSIBLE
VARIATION
IN 
COST-SHARING.—The Commissioner shall establish a 
permissible range of variation of cost-sharing for 
each basic, enhanced, and premium plan, except with 
respect to any benefit for which there is no cost- 
sharing permitted under the essential benefits pack-
age. Such variation shall permit a variation of not 
more than plus (or minus) 10 percent in cost-shar-
ing with respect to each benefit category specified 
under section 222. Nothing in this subtitle shall be 
construed as prohibiting tiering in cost-sharing, in-
cluding through preferred and participating pro-
viders and prescription drugs. In applying this para-
graph, a health benefits plan may increase the cost- 
sharing by 10 percent within each category or tier, 
as applicable, and may decrease or eliminate cost- 
sharing in any category or tier as compared to the 
essential benefits package. 
(d) TREATMENT OF STATE BENEFIT MANDATES.— 
Insofar as a State requires a health insurance issuer offer-
ing health insurance coverage to include benefits beyond 
the essential benefits package, such requirement shall con-
tinue to apply to an Exchange-participating health bene-
fits plan, if the State has entered into an arrangement 
satisfactory to the Commissioner to reimburse the Com-
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missioner for the amount of any net increase in afford-
ability premium credits under subtitle C as a result of an 
increase in premium in basic plans as a result of applica-
tion of such requirement. 
(e) RULES REGARDING COVERAGE OF AND AFFORD-
ABILITY CREDITS FOR SPECIFIED SERVICES.— 
(1) ASSURED
AVAILABILITY
OF
VARIED
COV-
ERAGE
THROUGH
THE
HEALTH
INSURANCE
EX-
CHANGE.—The Commissioner shall assure that, of 
the Exchange participating health benefits plan of-
fered in each premium rating area of the Health In-
surance Exchange— 
(A) there is at least one such plan that 
provides coverage of services described in sub-
paragraphs (A) and (B) of section 222(d)(4); 
and 
(B) there is at least one such plan that 
does not provide coverage of services described 
in section 222(d)(4)(A) which plan may also be 
one that does not provide coverage of services 
described in section 222(d)(4)(B). 
(2) SEGREGATION OF FUNDS.—If a qualified 
health benefits plan provides coverage of services de-
scribed in section 222(d)(4)(A), the plan shall pro-
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vide assurances satisfactory to the Commissioner 
that— 
(A) any affordability credits provided 
under subtitle C of title II are not used for pur-
poses of paying for such services; and 
(B) only premium amounts attributable to 
the actuarial value described in section 213(b) 
are used for such purpose. 
SEC. 304. CONTRACTS FOR THE OFFERING OF EXCHANGE- 
PARTICIPATING HEALTH BENEFITS PLANS. 
(a) CONTRACTING DUTIES.—In carrying out section 
301(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 II 
for— 
(i) QHBP offering entities for the of-
fering of an Exchange-participating health 
benefits plan; and 
(ii) 
Exchange-participating 
health 
benefits plans; and 
(B) certify QHBP offering entities and 
qualified health benefits plans as meeting such 
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standards and requirements of this title and 
title II for purposes of this subtitle. 
(2) SOLICITING AND NEGOTIATING BIDS; CON-
TRACTS.— 
(A) BID
SOLICITATION.—The Commis-
sioner shall solicit bids from QHBP offering en-
tities for the offering of Exchange-participating 
health benefits plans. Such bids shall include 
justification for proposed premiums. 
(B) BID REVIEW AND NEGOTIATION.—The 
Commissioner shall, based upon a review of 
such bids including the premiums and their af-
fordability, negotiate with such entities for the 
offering of such plans. 
(C) DENIAL OF EXCESSIVE PREMIUMS.— 
The Commissioner shall deny excessive pre-
miums and premium increases. 
(D) CONTRACTS.—The Commissioner shall 
enter into contracts with such entities for the 
offering of such plans through the Health In-
surance Exchange under terms (consistent with 
this title) negotiated between the Commissioner 
and such entities. 
(3) FEDERAL
ACQUISITION
REGULATION.—In 
carrying out this subtitle, the Commissioner may 
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waive such provisions of the Federal Acquisition 
Regulation that the Commissioner determines to be 
inconsistent with the furtherance of this subtitle, 
other than provisions relating to confidentiality of 
information. Competitive procedures shall be used in 
awarding contracts under this subtitle to the extent 
that such procedures are consistent with this sub-
title. 
(b) STANDARDS FOR QHBP OFFERING ENTITIES TO 
OFFER EXCHANGE-PARTICIPATING HEALTH BENEFITS 
PLANS.—The standards established under subsection 
(a)(1)(A) shall require that, in order for a QHBP offering 
entity to offer an Exchange-participating health benefits 
plan, the entity must meet the following requirements: 
(1) LICENSED.—The entity shall be licensed to 
offer health insurance coverage under State law for 
each State in which it is offering such coverage. 
(2) DATA REPORTING.—The entity shall pro-
vide for the reporting of such information as the 
Commissioner may specify, including information 
necessary to administer the risk pooling mechanism 
described in section 306(b) and information to ad-
dress disparities in health and health care. 
(3) AFFORDABILITY.—The entity shall provide 
for affordable premiums. 
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(4) 
IMPLEMENTING
AFFORDABILITY
CRED-
ITS.—The entity shall provide for implementation of 
the affordability credits provided for enrollees under 
subtitle C, including the reduction in cost-sharing 
under section 344(c). 
(5) ENROLLMENT.—The entity shall accept all 
enrollments under this subtitle, subject to such ex-
ceptions (such as capacity limitations) in accordance 
with the requirements under title II for a qualified 
health benefits plan. The entity shall notify the 
Commissioner if the entity projects or anticipates 
reaching such a capacity limitation that would result 
in a limitation in enrollment. 
(6) RISK POOLING PARTICIPATION.—The entity 
shall participate in such risk pooling mechanism as 
the Commissioner establishes under section 306(b). 
(7) ESSENTIAL COMMUNITY PROVIDERS.—With 
respect to the basic plan offered by the entity, the 
entity shall include within the plan network those es-
sential community providers, where available, that 
serve predominantly low-income, medically-under-
served individuals, such as health care providers de-
fined in section 340B(a)(4) of the Public Health 
Service Act and providers described in section 
1927(c)(1)(D)(i)(IV) of the Social Security Act (as 
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