1141 
cally renewable from term to term in the absence of 
notice of termination by either party. 
(3) ENFORCEMENT OF NETWORK ADEQUACY.— 
In the case of a health benefits plan of a QHBP of-
fering entity that uses a provider network, the con-
tract under this section with the entity shall provide 
that if— 
(A) the Commissioner determines that 
such provider network does not meet such 
standards as the Commissioner shall establish 
under section 115; and 
(B) an individual enrolled in such plan re-
ceives an item or service from a provider that 
is not within such network; 
then any cost-sharing for such item or service shall 
be equal to the amount of such cost-sharing that 
would be imposed if such item or service was fur-
nished by a provider within such network. 
(4) OVERSIGHT AND ENFORCEMENT RESPON-
SIBILITIES.—The Commissioner shall establish proc-
esses, in coordination with State insurance regu-
lators, to oversee, monitor, and enforce applicable re-
quirements of this title with respect to QHBP offer-
ing entities offering Exchange-participating health 
benefits plans and such plans, including the mar-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01141
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1142 
keting of such plans. Such processes shall include 
the following: 
(A) GRIEVANCE AND COMPLAINT MECHA-
NISMS.—The Commissioner shall establish, in 
coordination with State insurance regulators, a 
process under which Exchange-eligible individ-
uals and employers may file complaints con-
cerning violations of such standards. 
(B) ENFORCEMENT.—In carrying out au-
thorities under this subdivision relating to the 
Health Insurance Exchange, the Commissioner 
may impose one or more of the intermediate 
sanctions described in section 142(c). 
(C) TERMINATION.— 
(i) IN GENERAL.—The Commissioner 
may terminate a contract with a QHBP of-
fering entity under this section for the of-
fering of an Exchange-participating health 
benefits plan if such entity fails to comply 
with the applicable requirements of this 
title. Any determination by the Commis-
sioner to terminate a contract shall be 
made in accordance with formal investiga-
tion and compliance procedures established 
by the Commissioner under which— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01142
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1143 
(I) the Commissioner provides 
the entity with the reasonable oppor-
tunity to develop and implement a 
corrective action plan to correct the 
deficiencies that were the basis of the 
Commissioner’s determination; and 
(II) the Commissioner provides 
the entity with reasonable notice and 
opportunity for hearing (including the 
right to appeal an initial decision) be-
fore terminating the contract. 
(ii) EXCEPTION FOR IMMINENT AND 
SERIOUS
RISK
TO
HEALTH.—Clause (i) 
shall not apply if the Commissioner deter-
mines that a delay in termination, result-
ing from compliance with the procedures 
specified in such clause prior to termi-
nation, would pose an imminent and seri-
ous risk to the health of individuals en-
rolled under the qualified health benefits 
plan of the QHBP offering entity. 
(D) CONSTRUCTION.—Nothing in this sub-
section shall be construed as preventing the ap-
plication of other sanctions under subtitle E of 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01143
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1144 
title I with respect to an entity for a violation 
of such a requirement. 
SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-EL-
IGIBLE INDIVIDUALS AND EMPLOYERS IN EX-
CHANGE-PARTICIPATING HEALTH BENEFITS 
PLAN. 
(a) IN GENERAL.— 
(1) OUTREACH.—The Commissioner shall con-
duct outreach activities consistent with subsection 
(c), including through use of appropriate entities as 
described in paragraph (4) of such subsection, to in-
form and educate individuals and employers about 
the Health Insurance Exchange and Exchange-par-
ticipating health benefits plan options. Such out-
reach shall include outreach specific to vulnerable 
populations, such as children, individuals with dis-
abilities, individuals with mental illness, and individ-
uals with other cognitive impairments. 
(2) ELIGIBILITY.—The Commissioner shall 
make timely determinations of whether individuals 
and employers are Exchange-eligible individuals and 
employers (as defined in section 202). 
(3) ENROLLMENT.—The Commissioner shall es-
tablish and carry out an enrollment process for Ex-
change-eligible individuals and employers, including 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01144
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1145 
at community locations, in accordance with sub-
section (b). 
(b) ENROLLMENT PROCESS.— 
(1) IN GENERAL.—The Commissioner shall es-
tablish a process consistent with this title for enroll-
ments in Exchange-participating health benefits 
plans. Such process shall provide for enrollment 
through means such as the mail, by telephone, elec-
tronically, and in person. 
(2) ENROLLMENT PERIODS.— 
(A) OPEN
ENROLLMENT
PERIOD.—The 
Commissioner shall establish an annual open 
enrollment period during which an Exchange-el-
igible individual or employer may elect to enroll 
in an Exchange-participating health benefits 
plan for the following plan year and an enroll-
ment period for affordability credits under sub-
title C. Such periods shall be during September 
through November of each year, or such other 
time that would maximize timeliness of income 
verification for purposes of such subtitle. The 
open enrollment period shall not be less than 30 
days. 
(B) SPECIAL
ENROLLMENT.—The Com-
missioner shall also provide for special enroll-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01145
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1146 
ment periods to take into account special cir-
cumstances of individuals and employers, such 
as an individual who— 
(i) loses acceptable coverage; 
(ii) experiences a change in marital or 
other dependent status; 
(iii) moves outside the service area of 
the Exchange-participating health benefits 
plan in which the individual is enrolled; or 
(iv) experiences a significant change 
in income. 
(C) 
ENROLLMENT
INFORMATION.—The 
Commissioner shall provide for the broad dis-
semination of information to prospective enroll-
ees on the enrollment process, including before 
each open enrollment period. In carrying out 
the previous sentence, the Commissioner may 
work with other appropriate entities to facilitate 
such provision of information. 
(3) AUTOMATIC ENROLLMENT FOR NON-MED-
ICAID ELIGIBLE INDIVIDUALS.— 
(A) IN
GENERAL.—The Commissioner 
shall provide for a process under which individ-
uals who are Exchange-eligible individuals de-
scribed in subparagraph (B) are automatically 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01146
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1147 
enrolled under an appropriate Exchange-partici-
pating health benefits plan. Such process may 
involve a random assignment or some other 
form of assignment that takes into account the 
health care providers used by the individual in-
volved or such other relevant factors as the 
Commissioner may specify. 
(B) 
SUBSIDIZED
INDIVIDUALS
DE-
SCRIBED.—An individual described in this sub-
paragraph is an Exchange-eligible individual 
who is either of the following: 
(i) AFFORDABILITY CREDIT ELIGIBLE 
INDIVIDUALS.—The individual— 
(I) has applied for, and been de-
termined eligible for, affordability 
credits under subtitle C; 
(II) has not opted out from re-
ceiving such affordability credit; and 
(III) does not otherwise enroll in 
another Exchange-participating health 
benefits plan. 
(ii) INDIVIDUALS
ENROLLED
IN
A 
TERMINATED PLAN.—The individual is en-
rolled in an Exchange-participating health 
benefits plan that is terminated (during or 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01147
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1148 
at the end of a plan year) and who does 
not otherwise enroll in another Exchange- 
participating health benefits plan. 
(4) DIRECT
PAYMENT
OF
PREMIUMS
TO 
PLANS.—Under the enrollment process, individuals 
enrolled in an Exchange-participating health benefits 
plan shall pay such plans directly, and not through 
the Commissioner or the Health Insurance Ex-
change. 
(c) COVERAGE INFORMATION AND ASSISTANCE.— 
(1) COVERAGE
INFORMATION.—The Commis-
sioner shall provide for the broad dissemination of 
information on Exchange-participating health bene-
fits plans offered under this title. Such information 
shall be provided in a comparative manner, and shall 
include information on benefits, premiums, cost- 
sharing, quality, provider networks, and consumer 
satisfaction. 
(2) CONSUMER ASSISTANCE WITH CHOICE.—To 
provide assistance to Exchange-eligible individuals 
and employers, the Commissioner shall— 
(A) provide for the operation of a toll-free 
telephone hotline to respond to requests for as-
sistance and maintain an Internet website 
through which individuals may obtain informa-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01148
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1149 
tion on coverage under Exchange-participating 
health benefits plans and file complaints; 
(B) develop and disseminate information to 
Exchange-eligible enrollees on their rights and 
responsibilities; 
(C) assist Exchange-eligible individuals in 
selecting Exchange-participating health benefits 
plans and obtaining benefits through such 
plans; and 
(D) ensure that the Internet website de-
scribed in subparagraph (A) and the informa-
tion described in subparagraph (B) is developed 
using plain language (as defined in section 
133(a)(2)). 
(3) USE OF OTHER ENTITIES.—In carrying out 
this subsection, the Commissioner may work with 
other appropriate entities to facilitate the dissemina-
tion of information under this subsection and to pro-
vide assistance as described in paragraph (2). 
(d) SPECIAL DUTIES RELATED TO MEDICAID AND 
CHIP.— 
(1) COVERAGE FOR CERTAIN NEWBORNS.— 
(A) IN GENERAL.—In the case of a child 
born in the United States who at the time of 
birth is not otherwise covered under acceptable 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01149
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1150 
coverage, for the period of time beginning on 
the date of birth and ending on the date the 
child otherwise is covered under acceptable cov-
erage (or, if earlier, the end of the month in 
which the 60-day period, beginning on the date 
of birth, ends), the child shall be deemed— 
(i) to be a non-traditional Medicaid el-
igible individual (as defined in subsection 
(e)(5)) for purposes of this subdivision and 
Medicaid; and 
(ii) to have elected to enroll in Med-
icaid through the application of paragraph 
(3). 
(B) EXTENDED
TREATMENT
AS
TRADI-
TIONAL
MEDICAID
ELIGIBLE
INDIVIDUAL.—In 
the case of a child described in subparagraph 
(A) who at the end of the period referred to in 
such subparagraph is not otherwise covered 
under acceptable coverage, the child shall be 
deemed (until such time as the child obtains 
such coverage or the State otherwise makes a 
determination of the child’s eligibility for med-
ical assistance under its Medicaid plan pursuant 
to section 1943(c)(1) of the Social Security 
Act) to be a traditional Medicaid eligible indi-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01150
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1151 
vidual described in section 1902(l)(1)(B) of 
such Act. 
(2) CHIP TRANSITION.—A child who, as of the 
day before the first day of Y1, is eligible for child 
health assistance under title XXI of the Social Secu-
rity Act (including a child receiving coverage under 
an arrangement described in section 2101(a)(2) of 
such Act) is deemed as of such first day to be an 
Exchange-eligible individual unless the individual is 
a traditional Medicaid eligible individual as of such 
day. 
(3) AUTOMATIC ENROLLMENT OF MEDICAID EL-
IGIBLE
INDIVIDUALS
INTO
MEDICAID.—The Com-
missioner shall provide for a process under which an 
individual who is described in section 202(d)(3) and 
has not elected to enroll in an Exchange-partici-
pating health benefits plan is automatically enrolled 
under Medicaid. 
(4) NOTIFICATIONS.—The Commissioner shall 
notify each State in Y1 and for purposes of section 
1902(gg)(1) of the Social Security Act (as added by 
section 1703(a)) whether the Health Insurance Ex-
change can support enrollment of children described 
in paragraph (2) in such State in such year. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01151
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1152 
(e) MEDICAID COVERAGE FOR MEDICAID ELIGIBLE 
INDIVIDUALS.— 
(1) IN GENERAL.— 
(A) CHOICE FOR LIMITED EXCHANGE-ELI-
GIBLE INDIVIDUALS.—As part of the enrollment 
process under subsection (b), the Commissioner 
shall provide the option, in the case of an Ex-
change-eligible individual described in section 
202(d)(3), for the individual to elect to enroll 
under Medicaid instead of under an Exchange- 
participating health benefits plan. Such an indi-
vidual may change such election during an en-
rollment period under subsection (b)(2). 
(B) 
MEDICAID
ENROLLMENT
OBLIGA-
TION.—An Exchange eligible individual may 
apply, in the manner described in section 
241(b)(1), for a determination of whether the 
individual is a Medicaid-eligible individual. If 
the individual is determined to be so eligible, 
the Commissioner, through the Medicaid memo-
randum of understanding, shall provide for the 
enrollment of the individual under the State 
Medicaid plan in accordance with the Medicaid 
memorandum of understanding under para-
graph (4). In the case of such an enrollment, 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01152
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1153 
the State shall provide for the same periodic re-
determination of eligibility under Medicaid as 
would otherwise apply if the individual had di-
rectly applied for medical assistance to the 
State Medicaid agency. 
(2) NON-TRADITIONAL MEDICAID ELIGIBLE IN-
DIVIDUALS.—In the case of a non-traditional Med-
icaid 
eligible 
individual 
described 
in 
section 
202(d)(3) who elects to enroll under Medicaid under 
paragraph (1)(A), the Commissioner shall provide 
for the enrollment of the individual under the State 
Medicaid plan in accordance with the Medicaid 
memorandum of understanding under paragraph 
(4). 
(3) COORDINATED ENROLLMENT WITH STATE 
THROUGH
MEMORANDUM
OF
UNDERSTANDING.— 
The Commissioner, in consultation with the Sec-
retary of Health and Human Services, shall enter 
into a memorandum of understanding with each 
State (each in this subdivision referred to as a 
‘‘Medicaid memorandum of understanding’’) with re-
spect to coordinating enrollment of individuals in 
Exchange-participating health benefits plans and 
under the State’s Medicaid program consistent with 
this section and to otherwise coordinate the imple-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01153
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1154 
mentation of the provisions of this subdivision with 
respect to the Medicaid program. Such memo-
randum shall permit the exchange of information 
consistent with the limitations described in section 
1902(a)(7) of the Social Security Act. Nothing in 
this section shall be construed as permitting such 
memorandum to modify or vitiate any requirement 
of a State Medicaid plan. 
(4) MEDICAID
ELIGIBLE
INDIVIDUALS.—For 
purposes of this subdivision: 
(A) MEDICAID
ELIGIBLE
INDIVIDUAL.— 
The term ‘‘Medicaid eligible individual’’ means 
an individual who is eligible for medical assist-
ance under Medicaid. 
(B) TRADITIONAL MEDICAID ELIGIBLE IN-
DIVIDUAL.—The term ‘‘traditional Medicaid eli-
gible individual’’ means a Medicaid eligible indi-
vidual other than an individual who is— 
(i) a Medicaid eligible individual by 
reason of the application of subclause 
(VIII) of section 1902(a)(10)(A)(i) of the 
Social Security Act; or 
(ii) a childless adult not described in 
section 1902(a)(10)(A) or (C) of such Act 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01154
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1155 
(as in effect as of the day before the date 
of the enactment of this Act). 
(C) NON-TRADITIONAL
MEDICAID
ELIGI-
BLE
INDIVIDUAL.—The term ‘‘non-traditional 
Medicaid eligible individual’’ means a Medicaid 
eligible individual who is not a traditional Med-
icaid eligible individual. 
(f) EFFECTIVE CULTURALLY AND LINGUISTICALLY 
APPROPRIATE COMMUNICATION.—In carrying out this 
section, the Commissioner shall establish effective methods 
for communicating in plain language and a culturally and 
linguistically appropriate manner. 
SEC. 206. OTHER FUNCTIONS. 
(a) COORDINATION OF AFFORDABILITY CREDITS.— 
The Commissioner shall coordinate the distribution of af-
fordability premium and cost-sharing credits under sub-
title C to QHBP offering entities offering Exchange-par-
ticipating health benefits plans. 
(b) COORDINATION OF RISK POOLING.—The Com-
missioner shall establish a mechanism whereby there is an 
adjustment made of the premium amounts payable among 
QHBP offering entities offering Exchange-participating 
health benefits plans of premiums collected for such plans 
that takes into account (in a manner specified by the Com-
missioner) the differences in the risk characteristics of in-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01155
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1156 
dividuals and employers enrolled under the different Ex-
change-participating health benefits plans offered by such 
entities so as to minimize the impact of adverse selection 
of enrollees among the plans offered by such entities. 
(c) SPECIAL INSPECTOR GENERAL FOR THE HEALTH 
INSURANCE EXCHANGE.— 
(1) ESTABLISHMENT; APPOINTMENT.—There is 
hereby established the Office of the Special Inspec-
tor General for the Health Insurance Exchange, to 
be headed by a Special Inspector General for the 
Health Insurance Exchange (in this subsection re-
ferred to as the ‘‘Special Inspector General’’) to be 
appointed by the President, by and with the advice 
and consent of the Senate. The nomination of an in-
dividual as Special Inspector General shall be made 
as soon as practicable after the establishment of the 
program under this subtitle. 
(2) DUTIES.—The Special Inspector General 
shall— 
(A) conduct, supervise, and coordinate au-
dits, evaluations and investigations of the 
Health Insurance Exchange to protect the in-
tegrity of the Health Insurance Exchange, as 
well as the health and welfare of participants in 
the Exchange; 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01156
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1158 
Congress a report summarizing the activities of the 
Special Inspector General during the one year period 
ending on the date such report is submitted. 
(5) TERMINATION.—The Office of the Special 
Inspector General shall terminate five years after 
the date of the enactment of this Act. 
(d) ASSISTANCE FOR SMALL EMPLOYERS.— 
(1) IN GENERAL.—The Commissioner, in con-
sultation with the Small Business Administration, 
shall establish and carry out a program to provide 
to small employers counseling and technical assist-
ance with respect to the provision of health insur-
ance to employees of such employers through the 
Health Insurance Exchange. 
(2) DUTIES.—The program established under 
paragraph (1) shall include the following services: 
(A) Educational activities to increase 
awareness of the Health Insurance Exchange 
and available small employer health plan op-
tions. 
(B) Distribution of information to small 
employers with respect to the enrollment and 
selection process for health plans available 
under the Health Insurance Exchange, includ-
ing standardized comparative information on 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01158
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1159 
the health plans available under the Health In-
surance Exchange. 
(C) Distribution of information to small 
employers with respect to available affordability 
credits or other financial assistance. 
(D) Referrals to appropriate entities of 
complaints and questions relating to the Health 
Insurance Exchange. 
(E) Enrollment and plan selection assist-
ance for employers with respect to the Health 
Insurance Exchange. 
(F) Responses to questions relating to the 
Health Insurance Exchange and the program 
established under paragraph (1). 
(3) AUTHORITY
TO
PROVIDE
SERVICES
DI-
RECTLY OR BY CONTRACT.—The Commissioner may 
provide services under paragraph (2) directly or by 
contract with nonprofit entities that the Commis-
sioner determines capable of carrying out such serv-
ices. 
(4) SMALL EMPLOYER DEFINED.—In this sub-
section, the term ‘‘small employer’’ means an em-
ployer with less than 100 employees. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01159
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1160 
SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND. 
(a) ESTABLISHMENT OF HEALTH INSURANCE EX-
CHANGE TRUST FUND.—There is created within the 
Treasury of the United States a trust fund to be known 
as the ‘‘Health Insurance Exchange Trust Fund’’ (in this 
section referred to as the ‘‘Trust Fund’’), consisting of 
such amounts as may be appropriated or credited to the 
Trust Fund under this section or any other provision of 
law. 
(b) PAYMENTS FROM TRUST FUND.—The Commis-
sioner shall pay from time to time from the Trust Fund 
such amounts as the Commissioner determines are nec-
essary to make payments to operate the Health Insurance 
Exchange, including payments under subtitle C (relating 
to affordability credits). 
(c) TRANSFERS TO TRUST FUND.— 
(1) DEDICATED PAYMENTS.—There is hereby 
appropriated to the Trust Fund amounts equivalent 
to the following: 
(A) TAXES ON INDIVIDUALS NOT OBTAIN-
ING ACCEPTABLE COVERAGE.—The amounts re-
ceived in the Treasury under section 59B of the 
Internal Revenue Code of 1986 (relating to re-
quirement of health insurance coverage for indi-
viduals). 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01160
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1161 
(B) EMPLOYMENT TAXES ON EMPLOYERS 
NOT PROVIDING ACCEPTABLE COVERAGE.—The 
amounts received in the Treasury under section 
3111(c) of the Internal Revenue Code of 1986 
(relating to employers electing to not provide 
health benefits). 
(C) EXCISE TAX ON FAILURES TO MEET 
CERTAIN
HEALTH
COVERAGE
REQUIRE-
MENTS.—The amounts received in the Treasury 
under section 4980H(b) (relating to excise tax 
with respect to failure to meet health coverage 
participation requirements). 
(2) APPROPRIATIONS TO COVER GOVERNMENT 
CONTRIBUTIONS.—There are hereby appropriated, 
out of any moneys in the Treasury not otherwise ap-
propriated, to the Trust Fund, an amount equivalent 
to the amount of payments made from the Trust 
Fund under subsection (b) plus such amounts as are 
necessary reduced by the amounts deposited under 
paragraph (1). 
(d) APPLICATION OF CERTAIN RULES.—Rules simi-
lar to the rules of subchapter B of chapter 98 of the Inter-
nal Revenue Code of 1986 shall apply with respect to the 
Trust Fund. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01161
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1162 
SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH 
INSURANCE EXCHANGES. 
(a) IN GENERAL.—If— 
(1) a State (or group of States, subject to the 
approval of the Commissioner) applies to the Com-
missioner for approval of a State-based Health In-
surance Exchange to operate in the State (or group 
of States); and 
(2) the Commissioner approves such State- 
based Health Insurance Exchange, 
then, subject to subsections (c) and (d), the State-based 
Health Insurance Exchange shall operate, instead of the 
Health Insurance Exchange, with respect to such State 
(or group of States). The Commissioner shall approve a 
State-based Health Insurance Exchange if it meets the re-
quirements for approval under subsection (b). 
(b) REQUIREMENTS FOR APPROVAL.—The Commis-
sioner may not approve a State-based Health Insurance 
Exchange under this section unless the following require-
ments are met: 
(1) The State-based Health Insurance Ex-
change must demonstrate the capacity to and pro-
vide assurances satisfactory to the Commissioner 
that the State-based Health Insurance Exchange will 
carry out the functions specified for the Health In-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01162
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1163 
surance Exchange in the State (or States) involved, 
including— 
(A) negotiating and contracting with 
QHBP offering entities for the offering of Ex-
change-participating health benefits plan, which 
satisfy the standards and requirements of this 
title and title I; 
(B) enrolling Exchange-eligible individuals 
and employers in such State in such plans; 
(C) the establishment of sufficient local of-
fices to meet the needs of Exchange-eligible in-
dividuals and employers; 
(D) administering affordability credits 
under subtitle B using the same methodologies 
(and at least the same income verification 
methods) as would otherwise apply under such 
subtitle and at a cost to the Federal Govern-
ment which does exceed the cost to the Federal 
Government if this section did not apply; and 
(E) enforcement activities consistent with 
federal requirements. 
(2) There is no more than one Health Insur-
ance Exchange operating with respect to any one 
State. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01163
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1164 
(3) The State provides assurances satisfactory 
to the Commissioner that approval of such an Ex-
change will not result in any net increase in expendi-
tures to the Federal Government. 
(4) The State provides for reporting of such in-
formation as the Commissioner determines and as-
surances satisfactory to the Commissioner that it 
will vigorously enforce violations of applicable re-
quirements. 
(5) Such other requirements as the Commis-
sioner may specify. 
(c) CEASING OPERATION.— 
(1) IN GENERAL.—A State-based Health Insur-
ance Exchange may, at the option of each State in-
volved, and only after providing timely and reason-
able notice to the Commissioner, cease operation as 
such an Exchange, in which case the Health Insur-
ance Exchange shall operate, instead of such State- 
based Health Insurance Exchange, with respect to 
such State (or States). 
(2) TERMINATION; HEALTH
INSURANCE
EX-
CHANGE RESUMPTION OF FUNCTIONS.—The Com-
missioner may terminate the approval (for some or 
all functions) of a State-based Health Insurance Ex-
change under this section if the Commissioner deter-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01164
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1165 
mines that such Exchange no longer meets the re-
quirements of subsection (b) or is no longer capable 
of carrying out such functions in accordance with 
the requirements of this subtitle. In lieu of termi-
nating such approval, the Commissioner may tempo-
rarily assume some or all functions of the State- 
based Health Insurance Exchange until such time as 
the 
Commissioner 
determines 
the 
State-based 
Health Insurance Exchange meets such require-
ments of subsection (b) and is capable of carrying 
out such functions in accordance with the require-
ments of this subtitle. 
(3) EFFECTIVENESS.—The ceasing or termi-
nation of a State-based Health Insurance Exchange 
under this subsection shall be effective in such time 
and manner as the Commissioner shall specify. 
(d) RETENTION OF AUTHORITY.— 
(1) AUTHORITY RETAINED.—Enforcement au-
thorities of the Commissioner shall be retained by 
the Commissioner. 
(2) DISCRETION TO RETAIN ADDITIONAL AU-
THORITY.—The Commissioner may specify functions 
of the Health Insurance Exchange that— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01165
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1167 
who are members of such an arrangement under Exchange 
participating health benefits plans. 
(b) SMALL EMPLOYER BENEFIT ARRANGEMENT DE-
FINED.—In this section, the term ‘‘small employer benefit 
arrangement’’ means a not-for-profit agricultural or other 
cooperative that— 
(1) consists solely of its members and is oper-
ated for the primary purpose of providing affordable 
employee benefits to its members; 
(2) only has as members small employers in the 
same industry or line of business; 
(3) has no member that has more than a 5 per-
cent voting interest in the cooperative; and 
(4) is governed by a board of directors elected 
by its members. 
Subtitle B—Public Health 
Insurance Option 
SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A 
PUBLIC HEALTH INSURANCE OPTION AS AN 
EXCHANGE-QUALIFIED 
HEALTH 
BENEFITS 
PLAN. 
(a) ESTABLISHMENT.—For years beginning with Y1, 
the Secretary of Health and Human Services (in this sub-
title referred to as the ‘‘Secretary’’) shall provide for the 
offering of an Exchange-participating health benefits plan 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01167
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1168 
(in this subdivision referred to as the ‘‘public health insur-
ance option’’) that ensures choice, competition, and sta-
bility of affordable, high quality coverage throughout the 
United States in accordance with this subtitle. In design-
ing the option, the Secretary’s primary responsibility is 
to create a low-cost plan without compromising quality or 
access to care. 
(b) OFFERING
AS
AN EXCHANGE-PARTICIPATING 
HEALTH BENEFITS PLAN.— 
(1) EXCLUSIVE TO THE EXCHANGE.—The pub-
lic health insurance option shall only be made avail-
able through the Health Insurance Exchange. 
(2) ENSURING A LEVEL PLAYING FIELD.—Con-
sistent with this subtitle, the public health insurance 
option shall comply with requirements that are ap-
plicable under this title to an Exchange-participating 
health benefits plan, including requirements related 
to benefits, benefit levels, provider networks, notices, 
consumer protections, and cost sharing. 
(3) PROVISION OF BENEFIT LEVELS.—The pub-
lic health insurance option— 
(A) shall offer basic, enhanced, and pre-
mium plans; and 
(B) may offer premium-plus plans. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01168
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1169 
(c) ADMINISTRATIVE CONTRACTING.—The Secretary 
may enter into contracts for the purpose of performing 
administrative functions (including functions described in 
subsection (a)(4) of section 1874A of the Social Security 
Act) with respect to the public health insurance option in 
the same manner as the Secretary may enter into con-
tracts under subsection (a)(1) of such section. The Sec-
retary has the same authority with respect to the public 
health insurance option as the Secretary has under sub-
sections (a)(1) and (b) of section 1874A of the Social Se-
curity Act with respect to title XVIII of such Act. Con-
tracts under this subsection shall not involve the transfer 
of insurance risk to such entity. 
(d) OMBUDSMAN.—The Secretary shall establish an 
office of the ombudsman for the public health insurance 
option which shall have duties with respect to the public 
health insurance option similar to the duties of the Medi-
care Beneficiary Ombudsman under section 1808(c)(2) of 
the Social Security Act. 
(e) DATA COLLECTION.—The Secretary shall collect 
such data as may be required to establish premiums and 
payment rates for the public health insurance option and 
for other purposes under this subtitle, including to im-
prove quality and to reduce disparities in health and 
health care based on race, ethnicity, primary language, 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01169
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1170 
sex, sexual orientation, gender identity, disability, socio-
economic status, rural, urban, or other geographic setting, 
and any other population or subpopulation as determined 
appropriate by the Secretary, but only if the data collec-
tion is conducted on a voluntary basis and consistent with 
the standards, including privacy protections, established 
pursuant to section 1709 of the Public Health Service Act. 
(f) TREATMENT OF PUBLIC HEALTH INSURANCE OP-
TION.—With respect to the public health insurance option, 
the Secretary shall be treated as a QHBP offering entity 
offering an Exchange-participating health benefits plan. 
(g) ACCESS TO FEDERAL COURTS.—The provisions 
of Medicare (and related provisions of title II of the Social 
Security Act) relating to access of Medicare beneficiaries 
to Federal courts for the enforcement of rights under 
Medicare, including with respect to amounts in con-
troversy, shall apply to the public health insurance option 
and individuals enrolled under such option under this title 
in the same manner as such provisions apply to Medicare 
and Medicare beneficiaries. 
SEC. 222. PREMIUMS AND FINANCING. 
(a) ESTABLISHMENT OF PREMIUMS.— 
(1) IN GENERAL.—The Secretary shall establish 
geographically-adjusted premium rates for the public 
health insurance option in a manner— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01170
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1171 
(A) that complies with the premium rules 
established by the Commissioner under section 
113 for Exchange-participating health benefit 
plans; and 
(B) at a level sufficient to fully finance the 
costs of— 
(i) health benefits provided by the 
public health insurance option; and 
(ii) administrative costs related to op-
erating the public health insurance option. 
(2) CONTINGENCY
MARGIN.—In establishing 
premium rates under paragraph (1), the Secretary 
shall include an appropriate amount for a contin-
gency margin. 
(b) ACCOUNT.— 
(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States an Account for 
the receipts and disbursements attributable to the 
operation of the public health insurance option, in-
cluding the start-up funding under paragraph (2). 
Section 1854(g) of the Social Security Act shall 
apply to receipts described in the previous sentence 
in the same manner as such section applies to pay-
ments or premiums described in such section. 
(2) START-UP FUNDING.— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01171
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1172 
(A) IN GENERAL.—In order to provide for 
the establishment of the public health insurance 
option there is hereby appropriated to the Sec-
retary, out of any funds in the Treasury not 
otherwise appropriated, $2,000,000,000. In 
order to provide for initial claims reserves be-
fore the collection of premiums, there is hereby 
appropriated to the Secretary, out of any funds 
in the Treasury not otherwise appropriated, 
such sums as necessary to cover 90 days worth 
of claims reserves based on projected enroll-
ment. 
(B) AMORTIZATION
OF
START-UP
FUND-
ING.—The Secretary shall provide for the re-
payment of the startup funding provided under 
subparagraph (A) to the Treasury in an amor-
tized manner over the 10-year period beginning 
with Y1. 
(C) LIMITATION ON FUNDING.—Nothing in 
this section shall be construed as authorizing 
any additional appropriations to the Account, 
other than such amounts as are otherwise pro-
vided with respect to other Exchange-partici-
pating health benefits plans. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01172
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1173 
SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES. 
(a) RATES ESTABLISHED BY SECRETARY.— 
(1) IN GENERAL.—The Secretary shall establish 
payment rates for the public health insurance option 
for services and health care providers consistent with 
this section and may change such payment rates in 
accordance with section 224. 
(2) INITIAL PAYMENT RULES.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B) and subsection (b)(1), during 
Y1, Y2, and Y3, the Secretary shall base the 
payment rates under this section for services 
and providers described in paragraph (1) on the 
payment rates for similar services and providers 
under parts A and B of Medicare. 
(B) EXCEPTIONS.— 
(i) PRACTITIONERS’ SERVICES.—Pay-
ment rates for practitioners’ services other-
wise established under the fee schedule 
under section 1848 of the Social Security 
Act shall be applied without regard to the 
provisions under subsection (f) of such sec-
tion and the update under subsection 
(d)(4) under such section for a year as ap-
plied under this paragraph shall be not less 
than 1 percent. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01173
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1174 
(ii) ADJUSTMENTS.—The Secretary 
may determine the extent to which Medi-
care adjustments applicable to base pay-
ment rates under parts A and B of Medi-
care shall apply under this subtitle. 
(3) FOR NEW SERVICES.—The Secretary shall 
modify payment rates described in paragraph (2) in 
order to accommodate payments for services, such as 
well-child visits, that are not otherwise covered 
under Medicare. 
(4) PRESCRIPTION
DRUGS.—Payment rates 
under this section for prescription drugs that are not 
paid for under part A or part B of Medicare shall 
be at rates negotiated by the Secretary. 
(b) INCENTIVES FOR PARTICIPATING PROVIDERS.— 
(1) INITIAL INCENTIVE PERIOD.— 
(A) IN
GENERAL.—The Secretary shall 
provide, in the case of services described in sub-
paragraph (B) furnished during Y1, Y2, and 
Y3, for payment rates that are 5 percent great-
er than the rates established under subsection 
(a). 
(B) SERVICES DESCRIBED.—The services 
described in this subparagraph are items and 
professional services, under the public health in-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01174
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1175 
surance option by a physician or other health 
care practitioner who participates in both Medi-
care and the public health insurance option. 
(C) SPECIAL RULES.—A pediatrician and 
any other health care practitioner who is a type 
of practitioner that does not typically partici-
pate in Medicare (as determined by the Sec-
retary) shall also be eligible for the increased 
payment rates under subparagraph (A). 
(2) SUBSEQUENT
PERIODS.—Beginning with 
Y4 and for subsequent years, the Secretary shall 
continue to use an administrative process to set such 
rates in order to promote payment accuracy, to en-
sure adequate beneficiary access to providers, and to 
promote affordability and the efficient delivery of 
medical care consistent with section 221(a). Such 
rates shall not be set at levels expected to increase 
overall medical costs under the option beyond what 
would be expected if the process under subsection 
(a)(2) and paragraph (1) of this subsection were 
continued. 
(3) ESTABLISHMENT
OF
A
PROVIDER
NET-
WORK.—Health care providers participating under 
Medicare are participating providers in the public 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01175
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1176 
health insurance option unless they opt out in a 
process established by the Secretary. 
(c) 
ADMINISTRATIVE
PROCESS
FOR
SETTING 
RATES.—Chapter 5 of title 5, United States Code shall 
apply to the process for the initial establishment of pay-
ment rates under this section but not to the specific meth-
odology for establishing such rates or the calculation of 
such rates. 
(d) CONSTRUCTION.—Nothing in this subtitle shall 
be construed as limiting the Secretary’s authority to cor-
rect for payments that are excessive or deficient, taking 
into account the provisions of section 221(a) and the 
amounts paid for similar health care providers and serv-
ices under other Exchange-participating health benefits 
plans. 
(e) CONSTRUCTION.—Nothing in this subtitle shall be 
construed as affecting the authority of the Secretary to 
establish payment rates, including payments to provide for 
the more efficient delivery of services, such as the initia-
tives provided for under section 224. 
(f) LIMITATIONS ON REVIEW.—There shall be no ad-
ministrative or judicial review of a payment rate or meth-
odology established under this section or under section 
224. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01176
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1177 
SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIV-
ERY SYSTEM REFORM. 
(a) IN GENERAL.—For plan years beginning with Y1, 
the Secretary may utilize innovative payment mechanisms 
and policies to determine payments for items and services 
under the public health insurance option. The payment 
mechanisms and policies under this section may include 
patient-centered medical home and other care manage-
ment payments, accountable care organizations, value- 
based purchasing, bundling of services, differential pay-
ment rates, performance or utilization based payments, 
partial capitation, and direct contracting with providers. 
(b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.— 
The Secretary shall design and implement the payment 
mechanisms and policies under this section in a manner 
that— 
(1) seeks to— 
(A) improve health outcomes; 
(B) reduce health disparities (including ra-
cial, ethnic, and other disparities); 
(C) provide efficient and affordable care; 
(D) address geographic variation in the 
provision of health services; or 
(E) prevent or manage chronic illness; and 
(2) promotes care that is integrated, patient- 
centered, quality, and efficient. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01177
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1178 
(c) ENCOURAGING THE USE OF HIGH VALUE SERV-
ICES.—To the extent allowed by the benefit standards ap-
plied to all Exchange-participating health benefits plans, 
the public health insurance option may modify cost shar-
ing and payment rates to encourage the use of services 
that promote health and value. 
(d) NON-UNIFORMITY PERMITTED.—Nothing in this 
subtitle shall prevent the Secretary from varying payments 
based on different payment structure models (such as ac-
countable care organizations and medical homes) under 
the public health insurance option for different geographic 
areas. 
SEC. 225. PROVIDER PARTICIPATION. 
(a) IN GENERAL.—The Secretary shall establish con-
ditions of participation for health care providers under the 
public health insurance option. 
(b) LICENSURE OR CERTIFICATION.—The Secretary 
shall not allow a health care provider to participate in the 
public health insurance option unless such provider is ap-
propriately licensed, certified, or otherwise permitted to 
practice under State law. 
(c) PAYMENT TERMS FOR PROVIDERS.— 
(1) PHYSICIANS.—The Secretary shall provide 
for the annual participation of physicians under the 
public health insurance option, for which payment 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01178
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1179 
may be made for services furnished during the year, 
in one of 2 classes: 
(A) PREFERRED PHYSICIANS.—Those phy-
sicians who agree to accept the payment rate 
established under section 223 (without regard 
to cost-sharing) as the payment in full. 
(B) 
PARTICIPATING, 
NON-PREFERRED 
PHYSICIANS.—Those physicians who agree not 
to impose charges (in relation to the payment 
rate described in section 223 for such physi-
cians) that exceed the ratio permitted under 
section 1848(g)(2)(C) of the Social Security 
Act. 
(2) OTHER
PROVIDERS.—The Secretary shall 
provide for the participation (on an annual or other 
basis specified by the Secretary) of health care pro-
viders (other than physicians) under the public 
health insurance option under which payment shall 
only be available if the provider agrees to accept the 
payment rate established under section 223 (without 
regard to cost-sharing) as the payment in full. 
(d) EXCLUSION OF CERTAIN PROVIDERS.—The Sec-
retary shall exclude from participation under the public 
health insurance option a health care provider that is ex-
cluded from participation in a Federal health care pro-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01179
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1180 
gram (as defined in section 1128B(f) of the Social Secu-
rity Act). 
SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVI-
SIONS. 
Provisions of law (other than criminal law provisions) 
identified by the Secretary by regulation, in consultation 
with the Inspector General of the Department of Health 
and Human Services, that impose sanctions with respect 
to waste, fraud, and abuse under Medicare, such as the 
False Claims Act (31 U.S.C. 3729 et seq.), shall also 
apply to the public health insurance option. 
SEC. 227. SENSE OF THE HOUSE REGARDING ENROLLMENT 
OF MEMBERS IN THE PUBLIC OPTION. 
It is the sense of the House of Representatives that 
Members who vote in favor of the establishment of a pub-
lic, Federal Government run health insurance option, and 
senior members of the President’s administration, are 
urged to forgo their right to participate in the Federal 
Employees Health Benefits Program (FEHBP) and agree 
to enroll under that public option. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01180
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1181 
Subtitle C—Individual 
Affordability Credits 
SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EX-
CHANGE. 
(a) IN GENERAL.—Subject to the succeeding provi-
sions of this subtitle, in the case of an affordable credit 
eligible individual enrolled in an Exchange-participating 
health benefits plan— 
(1) the individual shall be eligible for, in accord-
ance with this subtitle, affordability credits con-
sisting of— 
(A) an affordability premium credit under 
section 243 to be applied against the premium 
for the Exchange-participating health benefits 
plan in which the individual is enrolled; and 
(B) an affordability cost-sharing credit 
under section 244 to be applied as a reduction 
of the cost-sharing otherwise applicable to such 
plan; and 
(2) the Commissioner shall pay the QHBP of-
fering entity that offers such plan from the Health 
Insurance Exchange Trust Fund the aggregate 
amount of affordability credits for all affordable 
credit eligible individuals enrolled in such plan. 
(b) APPLICATION.— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01181
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1182 
(1) IN GENERAL.—An Exchange eligible indi-
vidual may apply to the Commissioner through the 
Health Insurance Exchange or through another enti-
ty under an arrangement made with the Commis-
sioner, in a form and manner specified by the Com-
missioner. The Commissioner through the Health 
Insurance Exchange or through another public enti-
ty under an arrangement made with the Commis-
sioner shall make a determination as to eligibility of 
an individual for affordability credits under this sub-
title. The Commissioner shall establish a process 
whereby, on the basis of information otherwise avail-
able, individuals may be deemed to be affordable 
credit eligible individuals. In carrying this subtitle, 
the Commissioner shall establish effective methods 
that ensure that individuals with limited English 
proficiency are able to apply for affordability credits. 
(2) USE
OF
STATE
MEDICAID
AGENCIES.—If 
the Commissioner determines that a State Medicaid 
agency has the capacity to make a determination of 
eligibility for affordability credits under this subtitle 
and under the same standards as used by the Com-
missioner, under the Medicaid memorandum of un-
derstanding (as defined in section 205(c)(4))— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01182
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1183 
(A) the State Medicaid agency is author-
ized to conduct such determinations for any Ex-
change-eligible individual who requests such a 
determination; and 
(B) the Commissioner shall reimburse the 
State Medicaid agency for the costs of con-
ducting such determinations. 
(3) MEDICAID SCREEN AND ENROLL OBLIGA-
TION.—In the case of an application made under 
paragraph (1), there shall be a determination of 
whether the individual is a Medicaid-eligible indi-
vidual. If the individual is determined to be so eligi-
ble, the Commissioner, through the Medicaid memo-
randum of understanding, shall provide for the en-
rollment of the individual under the State Medicaid 
plan in accordance with the Medicaid memorandum 
of understanding. In the case of such an enrollment, 
the State shall provide for the same periodic redeter-
mination of eligibility under Medicaid as would oth-
erwise apply if the individual had directly applied for 
medical assistance to the State Medicaid agency. 
(c) USE OF AFFORDABILITY CREDITS.— 
(1) IN GENERAL.—In Y1 and Y2 an affordable 
credit eligible individual may use an affordability 
credit only with respect to a basic plan. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01183
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1184 
(2) FLEXIBILITY
IN
PLAN
ENROLLMENT
AU-
THORIZED.—Beginning with Y3, the Commissioner 
shall establish a process to allow an affordability 
credit to be used for enrollees in enhanced or pre-
mium plans. In the case of an affordable credit eligi-
ble individual who enrolls in an enhanced or pre-
mium plan, the individual shall be responsible for 
any difference between the premium for such plan 
and the affordable credit amount otherwise applica-
ble if the individual had enrolled in a basic plan. 
(d) ACCESS TO DATA.—In carrying out this subtitle, 
the Commissioner shall request from the Secretary of the 
Treasury consistent with section 6103 of the Internal Rev-
enue Code of 1986 such information as may be required 
to carry out this subtitle. 
(e) NO CASH REBATES.—In no case shall an afford-
able credit eligible individual receive any cash payment as 
a result of the application of this subtitle. 
SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL. 
(a) DEFINITION.— 
(1) IN GENERAL.—For purposes of this subdivi-
sion, the term ‘‘affordable credit eligible individual’’ 
means, subject to subsection (b), an individual who 
is lawfully present in a State in the United States 
(other than as a nonimmigrant described in a sub-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01184
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1185 
paragraph (excluding subparagraphs (K), (T), (U), 
and (V)) of section 101(a)(15) of the Immigration 
and Nationality Act)— 
(A) who is enrolled under an Exchange- 
participating health benefits plan and is not en-
rolled under such plan as an employee (or de-
pendent of an employee) through an employer 
qualified health benefits plan that meets the re-
quirements of section 312; 
(B) with family income below 400 percent 
of the Federal poverty level for a family of the 
size involved; and 
(C) who is not a Medicaid eligible indi-
vidual, other than an individual described in 
section 202(d)(3) or an individual during a 
transition period under section 202(d)(4)(B)(ii). 
(2) TREATMENT
OF
FAMILY.—Except as the 
Commissioner may otherwise provide, members of 
the same family who are affordable credit eligible in-
dividuals shall be treated as a single affordable cred-
it individual eligible for the applicable credit for such 
a family under this subtitle. 
(b) LIMITATIONS ON EMPLOYEE AND DEPENDENT 
DISQUALIFICATION.— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01185
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1186 
(1) IN GENERAL.—Subject to paragraph (2), 
the term ‘‘affordable credit eligible individual’’ does 
not include a full-time employee of an employer if 
the employer offers the employee coverage (for the 
employee and dependents) as a full-time employee 
under a group health plan if the coverage and em-
ployer contribution under the plan meet the require-
ments of section 312. 
(2) EXCEPTIONS.— 
(A) 
FOR
CERTAIN
FAMILY
CIR-
CUMSTANCES.—The Commissioner shall estab-
lish such exceptions and special rules in the 
case described in paragraph (1) as may be ap-
propriate in the case of a divorced or separated 
individual or such a dependent of an employee 
who would otherwise be an affordable credit eli-
gible individual. 
(B) FOR UNAFFORDABLE EMPLOYER COV-
ERAGE.—For years beginning with Y2, in the 
case of full-time employees for which the cost of 
the employee premium (plus, to the extent spec-
ified by the Commissioner, out-of-pocket cost- 
sharing for such year or the preceding year) for 
coverage under a group health plan would ex-
ceed 11 percent of current family income (de-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01186
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1187 
termined by the Commissioner on the basis of 
verifiable documentation and without regard to 
section 245), paragraph (1) shall not apply. 
(c) INCOME DEFINED.— 
(1) IN GENERAL.—In this title, the term ‘‘in-
come’’ means modified adjusted gross income (as de-
fined in section 59B of the Internal Revenue Code 
of 1986). 
(2) STUDY
OF
INCOME
DISREGARDS.—The 
Commissioner shall conduct a study that examines 
the application of income disregards for purposes of 
this subtitle. Not later than the first day of Y2, the 
Commissioner shall submit to Congress a report on 
such study and shall include such recommendations 
as the Commissioner determines appropriate. 
(d) CLARIFICATION
OF TREATMENT
OF AFFORD-
ABILITY CREDITS.—Affordability credits under this sub-
title shall not be treated, for purposes of title IV of the 
Personal Responsibility and Work Opportunity Reconcili-
ation Act of 1996, to be a benefit provided under section 
403 of such title. 
SEC. 243. AFFORDABLE PREMIUM CREDIT. 
(a) IN GENERAL.—The affordability premium credit 
under this section for an affordable credit eligible indi-
vidual enrolled in an Exchange-participating health bene-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01187
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1188 
fits plan is in an amount equal to the amount (if any) 
by which the premium for the plan (or, if less, the ref-
erence premium amount specified in subsection (c)), ex-
ceeds the affordable premium amount specified in sub-
section (b) for the individual. 
(b) AFFORDABLE PREMIUM AMOUNT.— 
(1) IN
GENERAL.—The affordable premium 
amount specified in this subsection for an individual 
for monthly premium in a plan year shall be equal 
to 1⁄12 of the product of— 
(A) the premium percentage limit specified 
in paragraph (2) for the individual based upon 
the individual’s family income for the plan year; 
and 
(B) the individual’s family income for such 
plan year. 
(2) PREMIUM PERCENTAGE LIMITS BASED ON 
TABLE.—The Commissioner shall establish premium 
percentage limits so that for individuals whose fam-
ily income is within an income tier specified in the 
table in subsection (d) such percentage limits shall 
increase, on a sliding scale in a linear manner, from 
the initial premium percentage to the final premium 
percentage specified in such table for such income 
tier. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01188
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1189 
(c) REFERENCE PREMIUM AMOUNT.—The reference 
premium amount specified in this subsection for a plan 
year for an individual in a premium rating area is equal 
to the average premium for the 3 basic plans in the area 
for the plan year with the lowest premium levels. In com-
puting such amount the Commissioner may exclude plans 
with extremely limited enrollments. 
(d) TABLE OF PREMIUM PERCENTAGE LIMITS AND 
ACTUARIAL VALUE PERCENTAGES BASED ON INCOME 
TIER.— 
(1) IN GENERAL.—For purposes of this sub-
title, the table specified in this subsection is as fol-
lows: 
In the case of family in-
come (expressed as a 
percent of FPL) within 
the following income 
tier: 
The initial pre-
mium percent-
age is— 
The final pre-
mium percent-
age is— 
The actuarial 
value percent-
age is— 
133% through 150% 
1.5% 
3% 
97% 
150% through 200% 
3% 
5% 
93% 
200% through 250% 
5% 
7% 
85% 
250% through 300% 
7% 
9% 
78% 
300% through 350% 
9% 
10% 
72% 
350% through 400% 
10% 
11% 
70% 
(2) SPECIAL RULES.—For purposes of applying 
the table under paragraph (1)— 
(A) FOR LOWEST LEVEL OF INCOME.—In 
the case of an individual with income that does 
not exceed 133 percent of FPL, the individual 
shall be considered to have income that is 133% 
of FPL. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01189
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1190 
(B) APPLICATION OF HIGHER ACTUARIAL 
VALUE
PERCENTAGE
AT
TIER
TRANSITION 
POINTS.—If two actuarial value percentages 
may be determined with respect to an indi-
vidual, the actuarial value percentage shall be 
the higher of such percentages. 
SEC. 244. AFFORDABILITY COST-SHARING CREDIT. 
(a) IN GENERAL.—The affordability cost-sharing 
credit under this section for an affordable credit eligible 
individual enrolled in an Exchange-participating health 
benefits plan is in the form of the cost-sharing reduction 
described in subsection (b) provided under this section for 
the income tier in which the individual is classified based 
on the individual’s family income. 
(b) COST-SHARING
REDUCTIONS.—The Commis-
sioner shall specify a reduction in cost-sharing amounts 
and the annual limitation on cost-sharing specified in sec-
tion 122(c)(2)(B) under a basic plan for each income tier 
specified in the table under section 243(d), with respect 
to a year, in a manner so that, as estimated by the Com-
missioner, the actuarial value of the coverage with such 
reduced cost-sharing amounts (and the reduced annual 
cost-sharing limit) is equal to the actuarial value percent-
age (specified in the table under section 243(d) for the 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01190
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1191 
income tier involved) of the full actuarial value if there 
were no cost-sharing imposed under the plan. 
(c) DETERMINATION AND PAYMENT OF COST-SHAR-
ING AFFORDABILITY CREDIT.—In the case of an afford-
able credit eligible individual in a tier enrolled in an Ex-
change-participating health benefits plan offered by a 
QHBP offering entity, the Commissioner shall provide for 
payment to the offering entity of an amount equivalent 
to the increased actuarial value of the benefits under the 
plan provided under section 203(c)(2)(B) resulting from 
the reduction in cost-sharing described in subsection (b). 
SEC. 245. INCOME DETERMINATIONS. 
(a) IN GENERAL.—In applying this subtitle for an 
affordability credit for an individual for a plan year, the 
individual’s income shall be the income (as defined in sec-
tion 242(c)) for the individual for the most recent taxable 
year (as determined in accordance with rules of the Com-
missioner). The Federal poverty level applied shall be such 
level in effect as of the date of the application. 
(b) PROGRAM INTEGRITY; INCOME VERIFICATION 
PROCEDURES.— 
(1) PROGRAM INTEGRITY.—The Commissioner 
shall take such steps as may be appropriate to en-
sure the accuracy of determinations and redeter-
minations under this subtitle. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01191
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1192 
(2) INCOME VERIFICATION.— 
(A) IN GENERAL.—Upon an initial applica-
tion of an individual for an affordability credit 
under this subtitle (or in applying section 
242(b)) or upon an application for a change in 
the affordability credit based upon a significant 
change in family income described in subpara-
graph (A)— 
(i) the Commissioner shall request 
from the Secretary of the Treasury the dis-
closure to the Commissioner of such infor-
mation as may be permitted to verify the 
information contained in such application; 
and 
(ii) the Commissioner shall use the in-
formation so disclosed to verify such infor-
mation. 
(B) 
ALTERNATIVE
PROCEDURES.—The 
Commissioner shall establish procedures for the 
verification of income for purposes of this sub-
title if no income tax return is available for the 
most recent completed tax year. 
(c) SPECIAL RULES.— 
(1) CHANGES IN INCOME AS A PERCENT OF 
FPL.—In the case that an individual’s income (ex-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01192
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1193 
pressed as a percentage of the Federal poverty level 
for a family of the size involved) for a plan year is 
expected (in a manner specified by the Commis-
sioner) to be significantly different from the income 
(as so expressed) used under subsection (a), the 
Commissioner shall establish rules requiring an indi-
vidual to report, consistent with the mechanism es-
tablished under paragraph (2), significant changes 
in such income (including a significant change in 
family composition) to the Commissioner and requir-
ing the substitution of such income for the income 
otherwise applicable. 
(2) REPORTING OF SIGNIFICANT CHANGES IN 
INCOME.—The Commissioner shall establish rules 
under which an individual determined to be an af-
fordable credit eligible individual would be required 
to inform the Commissioner when there is a signifi-
cant change in the family income of the individual 
(expressed as a percentage of the FPL for a family 
of the size involved) and of the information regard-
ing such change. Such mechanism shall provide for 
guidelines that specify the circumstances that qual-
ify as a significant change, the verifiable information 
required to document such a change, and the process 
for submission of such information. If the Commis-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01193
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1194 
sioner receives new information from an individual 
regarding the family income of the individual, the 
Commissioner shall provide for a redetermination of 
the individual’s eligibility to be an affordable credit 
eligible individual. 
(3) TRANSITION FOR CHIP.—In the case of a 
child described in section 202(d)(2), the Commis-
sioner shall establish rules under which the family 
income of the child is deemed to be no greater than 
the family income of the child as most recently de-
termined before Y1 by the State under title XXI of 
the Social Security Act. 
(4) STUDY OF GEOGRAPHIC VARIATION IN AP-
PLICATION OF FPL.—The Commissioner shall exam-
ine the feasibility and implication of adjusting the 
application of the Federal poverty level under this 
subtitle for different geographic areas so as to re-
flect the variations in cost-of-living among different 
areas within the United States. If the Commissioner 
determines that an adjustment is feasible, the study 
should include a methodology to make such an ad-
justment. Not later than the first day of Y2, the 
Commissioner shall submit to Congress a report on 
such study and shall include such recommendations 
as the Commissioner determines appropriate. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01194
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1195 
(d) PENALTIES FOR MISREPRESENTATION.—In the 
case of an individual intentionally misrepresents family in-
come or the individual fails (without regard to intent) to 
disclose to the Commissioner a significant change in fam-
ily income under subsection (c) in a manner that results 
in the individual becoming an affordable credit eligible in-
dividual when the individual is not or in the amount of 
the affordability credit exceeding the correct amount— 
(1) the individual is liable for repayment of the 
amount of the improper affordability credit; ;and 
(2) in the case of such an intentional misrepre-
sentation or other egregious circumstances specified 
by the Commissioner, the Commissioner may impose 
an additional penalty. 
SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED 
ALIENS. 
Nothing in this subtitle shall allow Federal payments 
for affordability credits on behalf of individuals who are 
not lawfully present in the United States. 
Subtitle D—State Innovation 
SEC. 251. WAIVER OF ERISA LIMITATION; APPLICATION IN-
STEAD OF STATE SINGLE PAYER SYSTEM. 
(a) IN GENERAL.—A State may request from the 
Secretary, and the Secretary must grant except under ex-
traordinary circumstances, a waiver of application of sec-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01195
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1196 
tion 514 of the Employee Retirement Income Security Act 
of 1974 with respect to a state single payer system en-
acted into law by such State that would be structured and 
operate in a manner consistent with this subtitle. The Sec-
retary shall provide for the revocation of any waiver grant-
ed under this section upon a determination made by the 
Secretary that the requirements of the preceding sentence 
are no longer being met. 
(b) EFFECT OF WAIVER.—During any period for 
which a waiver under subsection (a) is in effect— 
(1) the provisions of section 514 of the Em-
ployee Retirement Income Security Act of 1974 shall 
not apply with respect to the State single payer sys-
tem; and 
(2) the State single payer system shall operate 
in the State instead of the public health insurance 
option or the National Health Exchange. 
(c) CONSTRUCTION.—Nothing in this subtitle shall be 
construed to limit or otherwise affect the transfer and allo-
cation under this division of funds to States with single 
payer systems. 
SEC. 252. REQUIREMENTS. 
A State single payer system shall— 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01196
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1197 
(1) ) provide benefits that meet or exceed the 
standards of coverage and quality of care set forth 
in this division; and 
(2) ensure that the cost to the Federal Govern-
ment resulting from the waiver granted under sec-
tion 261 is neither substantially greater nor substan-
tially less than would have been the case in the ab-
sence of such waiver, except that: 
(A) the State may seek and benefit from 
planning and start-up funds with respect to the 
system; and 
(B) nothing in this paragraph shall be con-
strued to preclude allowance for normal vari-
ations in population demographics, health sta-
tus, and other factors exogenous to the health 
care system that may affect differences in costs. 
SEC. 253. DEFINITIONS. 
(a) STATE
SINGLE
PAYER
SYSTEM.—The term 
‘‘State single payer system’’ means, in connection with a 
State, a non-profit program of the State for providing 
health care— 
(1) in which a single agency of the State is re-
sponsible for financing health care benefits for all 
residents of the State and for the administration or 
supervision of the administration of the program; 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01197
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1198 
(2) under which private insurance duplicating 
the benefits provided in the single payer program is 
prohibited; 
(3) which provides comprehensive health bene-
fits to all residents of the State, and provides meas-
ures to assure free choice of providers for covered 
services, to promote quality, and to help resolve com-
plaints and disputes between consumers and pro-
viders; and 
(4) under which participation by health mainte-
nance organizations is limited to non-profit health 
maintenance organizations that own their own deliv-
ery facilities and employ physicians on salary, and 
funding is limited to services that the health mainte-
nance organizations actually deliver; and 
(5) which may be maintained by such State to-
gether one or more other States in a geographic re-
gion. 
(b) SECRETARY.—The term ‘‘Secretary’’ means the 
Secretary of Labor, acting in consultation with the Sec-
retary of Health and Human Services. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01198
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1199 
TITLE III—SHARED 
RESPONSIBILITY 
Subtitle A—Individual 
Responsibility 
SEC. 301. INDIVIDUAL RESPONSIBILITY. 
For an individual’s responsibility to obtain acceptable 
coverage, see section 59B of the Internal Revenue Code 
of 1986 (as added by section 401 of this division). 
Subtitle B—Employer 
Responsibility 
PART 1—HEALTH COVERAGE PARTICIPATION 
REQUIREMENTS 
SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIRE-
MENTS. 
(a) IN GENERAL.—An employer meets the require-
ments of this section if such employer does all of the fol-
lowing: 
(1) OFFER OF COVERAGE.—The employer of-
fers each employee individual and family coverage 
under a qualified health benefits plan (or under a 
current employment-based health plan (within the 
meaning of section 102(b))) in accordance with sec-
tion 312. 
(2) CONTRIBUTION
TOWARDS
COVERAGE.—If 
an employee accepts such offer of coverage, the em-
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01199
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1206 
the average wages paid by the employer during the period 
of enrollment (determined by taking into account all em-
ployees of the employer and in such manner as the Com-
missioner provides, including rules providing for the ap-
propriate aggregation of related employers). Any such con-
tribution— 
(1) shall be paid to the Health Choices Com-
missioner for deposit into the Health Insurance Ex-
change Trust Fund, and 
(2) shall not be applied against the premium of 
the employee under the Exchange-participating 
health benefits plan in which the employee is en-
rolled. 
(b) SPECIAL RULES FOR SMALL EMPLOYERS.— 
(1) IN GENERAL.—In the case of any employer 
who is a small employer for any calendar year, sub-
section (a) shall be applied by substituting the appli-
cable percentage determined in accordance with the 
following table for ‘‘8 percent’’: 
If the annual payroll of such employer for 
the preceding calendar year: 
The applicable 
percentage is: 
Does not exceed $250,000 .....................................
0 percent 
Exceeds $250,000, but does not exceed $300,000 
2 percent 
Exceeds $300,000, but does not exceed $350,000 
4 percent 
Exceeds $350,000, but does not exceed $400,000 
6 percent 
(2) SMALL EMPLOYER.—For purposes of this 
subsection, the term ‘‘small employer’’ means any 
employer for any calendar year if the annual payroll 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01206
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS
1248 
ployee received at least $5,000 of compensation from 
such employer during such taxable year. 
‘‘(3) AVERAGE ANNUAL EMPLOYEE COMPENSA-
TION.—The term ‘average annual employee com-
pensation’ means, with respect to any employer for 
any taxable year, the average amount of compensa-
tion paid by such employer to qualified employees of 
such employer during such taxable year. 
‘‘(4) COMPENSATION.—The term ‘compensa-
tion’ has the meaning given such term in section 
408(p)(6)(A). 
‘‘(5) FAMILY
COVERAGE.—The term ‘family 
coverage’ means any coverage other than self-only 
coverage. 
‘‘(f) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) SPECIAL RULE FOR PARTNERSHIPS AND 
SELF-EMPLOYED.—In the case of a partnership (or 
a trade or business carried on by an individual) 
which has one or more qualified employees (deter-
mined without regard to this paragraph) with re-
spect to whom the election under 4980H(a) applies, 
each partner (or, in the case of a trade or business 
carried on by an individual, such individual) shall be 
treated as an employee. 
VerDate Nov 24 2008 
23:53 Mar 17, 2010
Jkt 089200
PO 00000
Frm 01248
Fmt 6652
Sfmt 6201
E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS