any taxable year, amounts paid or incurred by the tax-
payer during such taxable year for— 
‘‘(1) establishing auto-enrollment which meets 
the requirements of section 107 of the Empowering 
Patients First Act for coverage of a participant or 
beneficiary under a group health plan, or health in-
surance coverage offered in connection with such a 
plan, and 
‘‘(2) implementing the employer contribution 
option for health insurance coverage pursuant to 
section 5000(e)(2). 
‘‘(d) QUALIFIED SMALL EMPLOYER.—For purposes 
of this section, the term ‘qualified small employer’ means 
any employer for any taxable year if the number of em-
ployees employed by such employer during such taxable 
year does not exceed 50. All employers treated as a single 
employer under section (a) or (b) of section 52 shall be 
treated as a single employer for purposes of this section. 
‘‘(e) NO DOUBLE BENEFIT.—No deduction or credit 
shall be allowed under any other provision of this chapter 
with respect to the amount of the credit determined under 
this section. 
‘‘(f) TERMINATION.—Subsection (a) shall not apply 
to any taxable year beginning after the date which is 2 
years after the date of the enactment of this section.’’. 
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(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code (re-
lating to general business credit) is amended by striking 
‘‘plus’’ at the end of paragraph (35), by striking the period 
at the end of paragraph (36) and inserting ‘‘, plus’’, and 
by adding at the end the following new paragraph: 
‘‘(37) in the case of a small employer (as de-
fined in section 45S(d)), the health benefits plan im-
plementation 
credit 
determined 
under 
section 
45S(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 45R the following new item: 
‘‘Sec. 45S. Auto-enrollment and defined contribution option for health benefits 
plans of small employers.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 110. REQUIRE EMPLOYERS TO DISCLOSE AMOUNTS 
PAID 
FOR 
EMPLOYER-PROVIDED 
HEALTH 
PLAN COVERAGE. 
(a) IN GENERAL.—Subsection (a) of section 6051 is 
amended by striking ‘‘and’’ at the end of paragraph (13), 
by striking the period at the end of paragraph (14) and 
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inserting ‘‘, and’’, and by inserting after paragraph (14) 
the following new paragraph: 
‘‘(15) the total amount paid or incurred by the 
employer with respect to employer-provided coverage 
under an accident or health plan with respect to 
such employee.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in cal-
endar years beginning after the date of the enactment of 
this Act. 
SEC. 111. HSA MODIFICATIONS AND CLARIFICATIONS. 
(a) CLARIFICATION OF TREATMENT OF CAPITATED 
PRIMARY CARE PAYMENTS AS AMOUNTS PAID FOR MED-
ICAL CARE.—Section 213(d) of the Internal Revenue Code 
of 1986 (relating to definitions) is amended by adding at 
the end the following new paragraph: 
‘‘(12) TREATMENT
OF
CAPITATED
PRIMARY 
CARE PAYMENTS.—Capitated primary care payments 
shall be treated as amounts paid for medical care.’’. 
(b) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR 
VETERANS
OR
INDIAN
HEALTH
BENEFITS.—Section 
223(c)(1) of such Code (defining eligible individual) is 
amended by adding at the end the following new subpara-
graph: 
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‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI-
GIBLE FOR VETERANS OR INDIAN HEALTH BEN-
EFITS.—For purposes of subparagraph (A)(ii), 
an individual shall not be treated as covered 
under a health plan described in such subpara-
graph merely because the individual receives 
periodic hospital care or medical services under 
any law administered by the Secretary of Vet-
erans Affairs or the Bureau of Indian Affairs.’’. 
(c) CERTAIN PHYSICIAN FEES TO BE TREATED AS 
MEDICAL CARE.—Section 213(d) of such Code is amend-
ed by adding at the end the following new paragraph: 
‘‘(13) PRE-PAID PHYSICIAN FEES.—The term 
‘medical care’ shall include amounts paid by patients 
to their primary physician in advance for the right 
to receive medical services on an as-needed basis.’’. 
(d) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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TITLE II—HEALTH INSURANCE 
POOLING MECHANISMS FOR 
INDIVIDUALS 
Subtitle A—Safety Net for Individ-
uals With Pre-Existing Condi-
tions 
SEC. 201. REQUIRING OPERATION OF HIGH-RISK POOL OR 
OTHER 
MECHANISM 
AS 
CONDITION 
FOR 
AVAILABILITY OF TAX CREDIT. 
No credit shall be allowed under section 36D of the 
Internal Revenue Code of 1986 (relating to health insur-
ance costs of low-income individuals) to the residents of 
any State unless such State meets the following require-
ments: 
(1) The State must implement a high-risk pool 
or a reinsurance pool or other risk-adjustment mech-
anism (as defined in section 211). 
(2) Assessments levied by the State for pur-
poses of funding such a pool or mechanism must 
only be used for funding and administering such 
pool or mechanism. 
(3) Such pool or mechanism must incorporate 
the application of such tax credit into such pool or 
mechanism. 
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Subtitle B—Federal Block Grants 
for State Insurance Expenditures 
SEC. 211. FEDERAL BLOCK GRANTS FOR STATE INSURANCE 
EXPENDITURES. 
(a) IN GENERAL.—Subject to the succeeding provi-
sions of this section, each State shall receive from the Sec-
retary of Health and Human Services (in this subtitle re-
ferred to as the ‘‘Secretary’’) a block grant for the State’s 
providing for the use, in connection with providing health 
benefits coverage, of a qualifying high-risk pool or a rein-
surance pool or other risk-adjustment mechanism used for 
the purpose of subsidizing the purchase of private health 
insurance. 
(b) FUNDING AMOUNT.— 
(1) IN
GENERAL.—There are hereby appro-
priated, out of any funds in the Treasury not other-
wise appropriated, $300,000,000 for each fiscal year 
for block grants under this section. Such amount 
shall be divided among the States as determined by 
the Secretary. 
(2) CONSTRUCTION.—Nothing in this section 
shall be construed as preventing a State from using 
funding under section 2745 of the Public Health 
Service Act for purposes of funding reinsurance or 
other risk mechanisms. 
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(c) LIMITATION.—Funding under subsection (a) may 
only be used for the following: 
(1) QUALIFYING HIGH-RISK POOLS.— 
(A) CURRENT POOLS.—A qualifying high- 
risk pool created before the date of the enact-
ment of this Act that only cover high risk popu-
lations and individuals (and their spouse and 
dependents) receiving a health care tax credit 
under section 35 of the Internal Revenue Code 
of 1986 for a limited period of time as deter-
mined by the Secretary or under section 2741 
of Public Health Service Act. 
(B) NEW POOLS.—A qualifying high-risk 
pool created on or after such date that only cov-
ers populations and individuals described in 
subparagraph (A) if the pool— 
(i) offers at least the option of one or 
more high deductible plan options, in com-
bination with a contribution into a health 
savings account; 
(ii) offers multiple competing health 
plan options; and 
(iii) covers only high risk populations. 
(2) RISK INSURANCE POOL OR OTHER RISK-AD-
JUSTMENT MECHANISMS.— 
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(A) CURRENT REINSURANCE.—A reinsur-
ance pool, or other risk-adjustment mechanism, 
created before the date of the enactment of this 
Act that only covers populations and individuals 
described in paragraph (1)(A). 
(B) NEW POOLS.—A reinsurance pool or 
other risk-adjustment mechanism created on or 
after such date that provides reinsurance only 
covers populations and individuals described in 
paragraph (1)(A) and only on a prospective 
basis under which a health insurance issuer 
cedes covered lives to the pool in exchange for 
payment of a reinsurance premium. 
(3) TRANSITION.—Nothing in this section shall 
be construed as preventing a State from using funds 
available to transition from an existing high-risk 
pool to a reinsurance pool. 
(d) BONUS
PAYMENTS.—With respect to any 
amounts made available to the States under this section, 
the Secretary shall set aside a portion of such amounts 
that shall only be available for the following activities by 
such States: 
(1) Providing guaranteed availability of indi-
vidual health insurance coverage to certain individ-
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uals with prior group coverage under part B of title 
XXVII of the Public Health Service Act. 
(2) A reduction in premium trends, actual pre-
miums, or other cost-sharing requirements. 
(3) An expansion or broadening of the pool of 
high risk individuals eligible for coverage. 
(4) States that adopt the Model Health Plan 
for Uninsurable Individuals Act of the National As-
sociation of Insurance Commissioners (if and when 
updated by such Association). 
The Secretary may request such Association to update 
such Model Health Plan as needed by 2012. 
(e) ADMINISTRATION.—The Secretary shall provide 
for the administration of this section and may establish 
such terms and conditions, including the requirement of 
an application, as may be appropriate to carry out this 
section. 
(f) CONSTRUCTION.—Nothing in this section shall be 
construed as requiring a State to operate a reinsurance 
pool (or other risk-adjustment mechanism) under this sec-
tion or as preventing a State from operating such a pool 
or mechanism through one or more private entities. 
(g) QUALIFYING HIGH-RISK POOL.—For purposes of 
this section, the term ‘‘qualifying high-risk pool’’ means 
any qualified high risk pool (as defined in subsection 
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(g)(1)(A) of section 2745) of the Public Health Service 
Act) that meets the conditions to receive a grant under 
section (b)(1) of such section. 
(h) REINSURANCE POOL OR OTHER RISK-ADJUST-
MENT MECHANISM DEFINED.—For purposes of this sec-
tion, the term ‘‘reinsurance pool or other risk-adjustment 
mechanism’’ means any State-based risk spreading mecha-
nism to subsidize the purchase of private health insurance 
for the high-risk population. 
(i) HIGH-RISK POPULATION.—For purposes of this 
section, the term ‘‘high-risk population’’ means— 
(1) individuals who, by reason of the existence 
or history of a medical condition, are able to acquire 
health coverage only at rates which are at least 150 
percent of the standard risk rates for such coverage 
(in a non-community-rated non-guaranteed issue 
State), and 
(2) individuals who are provided health cov-
erage by a high-risk pool. 
(j) STATE DEFINED.—For purposes of this section, 
the term ‘‘State’’ includes the District of Columbia, Puer-
to Rico, the Virgin Islands, Guam, American Samoa, and 
the Northern Mariana Islands. 
(k) EXTENDING FUNDING.—Section 2745(d)(2) of 
the Public Health Service Act (42 U.S.C. 300gg–45(d)(2)) 
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is amended by striking ‘‘2010’’ and inserting ‘‘2012’’ each 
place it appears. 
Subtitle C—Health Care Access and 
Availability 
SEC. 221. EXPANSION OF ACCESS AND CHOICE THROUGH 
INDIVIDUAL 
MEMBERSHIP 
ASSOCIATIONS 
(IMAS). 
The Public Health Service Act is amended by insert-
ing after title XXX the following new title: 
‘‘TITLE XXXI—INDIVIDUAL 
MEMBERSHIP ASSOCIATIONS 
‘‘SEC. 3101. DEFINITION OF INDIVIDUAL MEMBERSHIP AS-
SOCIATION (IMA). 
‘‘(a) IN GENERAL.—For purposes of this title, the 
terms ‘individual membership association’ and ‘IMA’ 
mean a legal entity that meets the following requirements: 
‘‘(1) ORGANIZATION.—The IMA is an organiza-
tion operated under the direction of an association 
(as defined in section 3104(1)). 
‘‘(2) 
OFFERING
HEALTH
BENEFITS
COV-
ERAGE.— 
‘‘(A) DIFFERENT GROUPS.—The IMA, in 
conjunction with those health insurance issuers 
that offer health benefits coverage through the 
IMA, makes available health benefits coverage 
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