2282 
to provide funding to carry out the 
reinsurance program and shall be 
used to carry out such program. 
(ii) BUDGETARY IMPLICATIONS.— 
Amounts 
appropriated 
under 
clause (i), and outlays flowing 
from such appropriations, shall 
not be taken into account for pur-
poses of any budget enforcement 
procedures including allocations 
under section 302(a) and (b) of the 
Balanced Budget and Emergency 
Deficit Control Act and budget 
resolutions for fiscal years during 
which appropriations are made 
from the Trust Fund. 
(iii) LIMITATION
TO
AVAILABLE 
FUNDS.—The Secretary has the au-
thority to stop taking applications 
for participation in the program 
or take such other steps in reduc-
ing expenditures under the rein-
surance program in order to en-
sure that expenditures under the 
reinsurance program do not ex-
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ceed the funds available under 
this subsection. 
SEC. 165. PROHIBITION AGAINST POST-RETIREMENT 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 Se-
curity Act of 1974 is amended by inserting 
after section 714 the following new section: 
‘‘SEC. 715. PROTECTION AGAINST POST-RETIREMENT 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 re-
ducing the benefits provided under the plan to 
a retired participant, or beneficiary of such 
participant, if such reduction affects the bene-
fits provided to the participant or beneficiary 
as of the date the participant retired for pur-
poses of the plan and such reduction occurs 
after the participant’s retirement unless such 
reduction is also made with respect to active 
participants. 
‘‘(b) 
NO
REDUCTION.—Notwithstanding 
that a group health plan described in sub-
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section (a) may contain a provision reserving 
the general power to amend or terminate the 
plan or a provision specifically authorizing 
the plan to make post-retirement reductions in 
retiree health benefits, it shall be prohibited 
for any group health plan, whether through 
amendment or otherwise, to reduce the bene-
fits provided to a retired participant or his or 
her 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 his or her beneficiary, as 
of the date the participant retired unless such 
reduction is also made with respect to active 
participants.’’. 
(b) CONFORMING AMENDMENT.—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. Protection against post-retirement reduction of re-
tiree health benefits.’’. 
(c) EFFECTIVE
DATE.—The amendments 
made by this section shall take effect on the 
date of the enactment of this Act. 
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SEC. 166. 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 RETIRE-
MENT INCOME SECURITY ACT OF 1974.— 
(1) REDUCTION IN LOOK-BACK PERIOD.— 
Section 701(a)(1) of the Employee Retire-
ment 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
PRE-
EXISTING
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’’, and by 
striking ‘‘18 months’’ and inserting ‘‘9 
months’’. 
(3) INAPPLICABILITY OF INTERIM LIMITA-
TIONS UPON APPLICABILITY OF TOTAL PROHI-
BITION OF EXCLUSION.—Section 701 of such 
Act shall cease to be effective in the case 
of any group health plan as of the date on 
which such plan becomes subject to the re-
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quirements of section 111 of this Act (re-
lating to prohibiting preexisting condition 
exclusions). 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in 
subparagraph (B), the amendments made 
by paragraphs (1) and (2) of subsection 
(a) shall apply with respect to group 
health plans for plan years beginning 
after the end of the 6th calendar month 
following the date of the enactment of this 
Act. 
(2) SPECIAL RULE FOR COLLECTIVE BAR-
GAINING
AGREEMENTS.—In the case of a 
group health plan maintained pursuant 
to one or more collective bargaining 
agreements between employee representa-
tives and one or more employers ratified 
before the date of the enactment of this 
Act, the amendments made by paragraphs 
(1) and (2) of subsection (a) shall not 
apply to plan years beginning before the 
earlier of— 
(A) the date on which the last of 
the collective bargaining agreements 
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relating to the plan terminates (deter-
mined without regard to any exten-
sion thereof agreed to after the date of 
the enactment of this Act), or 
(B) 3 years after the date of the en-
actment of this Act. 
For purposes of subparagraph (A), any 
plan amendment made pursuant to a col-
lective bargaining agreement relating to 
the plan which amends the plan solely to 
conform to any requirement added by the 
amendments made by paragraphs (1) and 
(2) of subsection (a) shall not be treated 
as a termination of such collective bar-
gaining agreement. 
SEC. 167. EXTENSION OF COBRA CONTINUATION COV-
ERAGE. 
(a) EXTENSION
OF CURRENT PERIODS
OF 
CONTINUATION COVERAGE.— 
(1) IN GENERAL.—In the case of any in-
dividual who is, under a COBRA continu-
ation coverage provision, covered under 
COBRA continuation coverage on or after 
the date of the enactment of this Act, the 
required period of any such coverage 
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which has not subsequently terminated 
under the terms of such provision for any 
reason other than the expiration of a pe-
riod of a specified number of months 
shall, 
notwithstanding 
such 
provision 
and subject to subsection (b), extend to the 
earlier of the date on which such indi-
vidual 
becomes 
eligible 
for 
coverage 
under an employment-based health plan 
or the date on which such individual be-
comes eligible for health insurance cov-
erage through the Health Insurance Ex-
change (or a State-based Health Insur-
ance 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 enti-
ties) that provide or administer the 
COBRA continuation coverage involved, 
provide rules setting forth the form and 
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manner in which prompt notice to indi-
viduals of the continued availability of 
COBRA continuation coverage to such in-
dividuals under paragraph (1). 
(b) CONTINUED EFFECT
OF OTHER TERMI-
NATING EVENTS.—Notwithstanding subsection 
(a), any required period of COBRA continu-
ation coverage which is extended under such 
subsection shall terminate upon the occur-
rence, prior to the date of termination other-
wise provided in such subsection, of any termi-
nating event specified in the applicable con-
tinuation 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 pro-
vision of the law of a State or political subdivi-
sion thereof to the extent that such provision 
has the effect of limiting or precluding access 
by a qualified beneficiary whose COBRA con-
tinuation coverage has been extended under 
this section to a State health benefits risk pool 
recognized by the Commissioner for purposes 
of this section solely by reason of the extension 
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of such coverage beyond the date on which 
such coverage otherwise would have expired. 
(d) DEFINITIONS.—For purposes of this sec-
tion— 
(1) COBRA CONTINUATION COVERAGE.— 
The term ‘‘COBRA continuation coverage’’ 
means continuation coverage provided 
pursuant to part 6 of subtitle B of title I 
of the Employee Retirement Income Secu-
rity Act of 1974 (other than under section 
609), title XXII of the Public Health Serv-
ice Act, section 4980B of the Internal Rev-
enue 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 program that provides comparable 
continuation coverage. Such term does 
not include coverage under a health flexi-
ble 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 provi-
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sion’’ means the provisions of law de-
scribed in paragraph (1). 
TITLE II—HEALTH INSURANCE 
EXCHANGE 
AND 
RELATED 
PROVISIONS 
Subtitle A—Health Insurance 
Exchange 
SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EX-
CHANGE; OUTLINE OF DUTIES; DEFINITIONS. 
(a) ESTABLISHMENT.—There is established 
within the Health Choices Administration and 
under the direction of the Commissioner a 
Health Insurance Exchange in order to facili-
tate 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 accordance with this subtitle and in coordi-
nation with appropriate Federal and State of-
ficials as provided under section 143(b), the 
Commissioner shall— 
(1) under section 204 establish stand-
ards for, accept bids from, and negotiate 
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and enter into contracts with, QHBP of-
fering entities for the offering of health 
benefits plans through the Health Insur-
ance Exchange, with different levels of 
benefits required under section 203, and 
including with respect to oversight and 
enforcement; 
(2) under section 205 facilitate out-
reach and enrollment in such plans of Ex-
change-eligible individuals and employers 
described in section 202; and 
(3) conduct such activities related to 
the Health Insurance Exchange as re-
quired, including establishment of a risk 
pooling mechanism under section 206 and 
consumer protections under subtitle D of 
title I. 
(c) EXCHANGE-PARTICIPATING HEALTH BENE-
FITS PLAN DEFINED.—In this division, the term 
‘‘Exchange-participating health benefits plan’’ 
means a qualified health benefits plan that is 
offered through the Health Insurance Ex-
change. 
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SEC. 202. 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 individual who is eligible under 
this section to be enrolled through the 
Health Insurance Exchange in an Ex-
change-participating health benefits plan 
and, with respect to family coverage, in-
cludes dependents of such individual. 
(2) EXCHANGE-ELIGIBLE EMPLOYER.—The 
term ‘‘Exchange-eligible employer’’ means 
an employer that is eligible under this 
section to enroll through the Health In-
surance Exchange employees of the em-
ployer (and their dependents) in Ex-
change-eligible health benefits plans. 
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(3) 
EMPLOYMENT-RELATED
DEFINI-
TIONS.—The terms ‘‘employer’’, ‘‘employee’’, 
‘‘full-time employee’’, and ‘‘part-time em-
ployee’’ have the meanings given such 
terms by the Commissioner for purposes of 
this division. 
(c) TRANSITION.—Individuals and employ-
ers shall only be eligible to enroll or partici-
pate in the Health Insurance Exchange in ac-
cordance with the following transition sched-
ule: 
(1) FIRST YEAR.—In Y1 (as defined in 
section 100(c))— 
(A) individuals described in sub-
section (d)(1), including individuals 
described in paragraphs (3), (4), and 
(5) of subsection (d); and 
(B) smallest employers described 
in subsection (e)(1). 
(2) SECOND YEAR.—In Y2— 
(A) individuals and employers de-
scribed in paragraph (1); and 
(B) smaller employers described in 
subsection (e)(2). 
(3) THIRD YEAR.—In Y3— 
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(A) individuals and employers de-
scribed in paragraph (2); 
(B) larger employers described in 
subsection (e)(3); and 
(C) largest employers as permitted 
by the Commissioner under subsection 
(e)(4). 
(4) FOURTH AND SUBSEQUENT YEARS.— 
In Y4 and subsequent years— 
(A) individuals and employers de-
scribed in paragraph (3); and 
(B) largest employers as permitted 
by the Commissioner under subsection 
(e)(4). 
(d) INDIVIDUALS.— 
(1) INDIVIDUAL DESCRIBED.—Subject to 
the succeeding provisions of this sub-
section, an individual described in this 
paragraph is an individual who— 
(A) is not enrolled in coverage de-
scribed in subparagraphs (C) through 
(F) of paragraph (2); and 
(B) is not enrolled in coverage as 
a full-time employee (or as a depend-
ent of such an employee) under a 
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group health plan if the coverage and 
an employer contribution under the 
plan meet the requirements of section 
312. 
For purposes of subparagraph (B), in the 
case of an individual who is self-em-
ployed, who has at least 1 employee, and 
who meets the requirements of section 312, 
such individual shall be deemed a full- 
time employee described in such subpara-
graph. 
(2) ACCEPTABLE
COVERAGE.—For pur-
poses of this division, the term ‘‘accept-
able coverage’’ means any of the fol-
lowing: 
(A) QUALIFIED
HEALTH
BENEFITS 
PLAN
COVERAGE.—Coverage under a 
qualified health benefits plan. 
(B) GRANDFATHERED HEALTH INSUR-
ANCE COVERAGE; COVERAGE UNDER CUR-
RENT
GROUP
HEALTH
PLAN.—Coverage 
under a grandfathered health insur-
ance coverage (as defined in sub-
section (a) of section 102) or under a 
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current group health plan (described 
in subsection (b) of such section). 
(C) 
MEDICARE.—Coverage 
under 
part A of title XVIII of the Social Se-
curity Act. 
(D) MEDICAID.—Coverage for med-
ical assistance under title XIX of the 
Social Security Act, excluding such 
coverage that is only available be-
cause 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 States Code, includ-
ing similar coverage furnished under 
section 1781 of title 38 of such Code. 
(F) VA.—Coverage under the vet-
eran’s health care program under 
chapter 17 of title 38, United States 
Code, but only if the coverage for the 
individual involved is determined by 
the 
Commissioner 
in 
coordination 
with the Secretary of Treasury to be 
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not less than a level specified by the 
Commissioner and Secretary of Vet-
eran’s Affairs, in coordination with 
the Secretary of Treasury, based on 
the individual’s priority for services 
as provided under section 1705(a) of 
such title. 
(G) OTHER COVERAGE.—Such other 
health benefits coverage, such as a 
State health benefits risk pool, as the 
Commissioner, in coordination with 
the Secretary of the Treasury, recog-
nizes for purposes of this paragraph. 
The Commissioner shall make determina-
tions under this paragraph in coordina-
tion with the Secretary of the Treasury. 
(3) TREATMENT OF CERTAIN NON-TRADI-
TIONAL
MEDICAID
ELIGIBLE
INDIVIDUALS.— 
An individual who is a non-traditional 
Medicaid eligible individual (as defined 
in section 205(e)(4)(C)) in a State may be 
an Exchange-eligible individual if the in-
dividual was enrolled in a qualified 
health 
benefits 
plan, 
grandfathered 
health insurance coverage, or current 
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group health plan during the 6 months 
before the individual became a non-tradi-
tional Medicaid eligible individual. Dur-
ing the period in which such an indi-
vidual has chosen to enroll in an Ex-
change-participating 
health 
benefits 
plan, the individual is not also eligible 
for medical assistance under Medicaid. 
(4) 
CONTINUING
ELIGIBILITY
PER-
MITTED.— 
(A) IN
GENERAL.—Except as pro-
vided in subparagraph (B), once an 
individual qualifies as an Exchange- 
eligible individual under this sub-
section (including as an employee or 
dependent of an employee of an Ex-
change-eligible employer) and enrolls 
under 
an 
Exchange-participating 
health 
benefits 
plan 
through 
the 
Health Insurance Exchange, the indi-
vidual shall continue to be treated as 
an Exchange-eligible individual until 
the individual is no longer enrolled 
with 
an 
Exchange-participating 
health benefits plan. 
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(B) EXCEPTIONS.— 
(i) 
IN
GENERAL.—Subpara-
graph (A) shall not apply to an in-
dividual once the individual be-
comes eligible for coverage— 
(I) under part A of the 
Medicare program; 
(II) under the Medicaid 
program as a Medicaid eligi-
ble individual, except as per-
mitted under paragraph (3) or 
clause (ii); or 
(III) in such other cir-
cumstances as the Commis-
sioner may provide. 
(ii) TRANSITION PERIOD.—In the 
case described in clause (i)(II), the 
Commissioner shall permit the in-
dividual to continue treatment 
under 
subparagraph 
(A) 
until 
such limited time as the Commis-
sioner determines it is administra-
tively 
feasible, 
consistent 
with 
minimizing disruption in the indi-
vidual’s access to health care. 
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(5) 
ADVERSELY
AFFECTED
RETIREE 
HEALTH BENEFITS GROUP PARTICIPANTS AND 
BENEFICIARIES.— 
(A) IN GENERAL.—Beginning in Y1, 
an individual who is a participant or 
beneficiary in an adversely affected 
retiree health benefits group who does 
not have coverage described in para-
graph (2)(C) is an Exchange eligible 
individual, whether or not such an in-
dividual has other acceptable cov-
erage. 
(B) ADVERAGE
AFFECTED
RETIREE 
HEALTH
BENEFIT
GROUP
DEFINED.—In 
this paragraph, the term ‘‘adversely 
affected retiree health benefits group’’ 
means the retired participants and 
their beneficiaries of a group health 
plan that cancelled or substantially 
reduced the amount, type, level, or 
form of health benefit or option pro-
vided prior January 1, 2008. 
(e) EMPLOYERS.— 
(1) SMALLEST
EMPLOYERS.—Subject to 
paragraph (5), smallest employers de-
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scribed in this paragraph are employers 
with 15 or fewer employees. 
(2) SMALLER
EMPLOYERS.—Subject to 
paragraph (5), smaller employers de-
scribed in this paragraph are employers 
that are not smallest employers described 
in paragraph (1) and that have 25 or 
fewer employees. 
(3) LARGER
EMPLOYERS.—Subject to 
paragraph (5), larger employers described 
in this paragraph are employers that are 
not smallest employers described in para-
graph (1) or smaller employers described 
in paragraph (2) and that have 50 or 
fewer employees. 
(4) LARGEST EMPLOYERS.— 
(A) IN
GENERAL.—Beginning with 
Y3, the Commissioner may permit em-
ployers not described in paragraphs 
(1) (2), or (3) to be Exchange-eligible 
employers. 
(B) PHASE-IN.—In applying sub-
paragraph (A), the Commissioner may 
phase-in the application of such sub-
paragraph based on the number of 
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full-time employees of an employer 
and such other considerations as the 
Commissioner deems appropriate. 
(5) CONTINUING ELIGIBILITY.—Once an 
employer is permitted to be an Exchange- 
eligible employer under this subsection 
and enrolls employees through the Health 
Insurance Exchange, the employer shall 
continue to be treated as an Exchange-eli-
gible employer for each subsequent plan 
year regardless of the number of employ-
ees involved unless and until the employer 
meets the requirement of section 311(a) 
through paragraph (1) of such section by 
offering a group health plan and not 
through offering Exchange-participating 
health benefits plan. 
(6) EMPLOYER PARTICIPATION AND CON-
TRIBUTIONS.— 
(A) SATISFACTION OF EMPLOYER RE-
SPONSIBILITY.—For any year in which 
an employer is an Exchange-eligible 
employer, such employer may meet the 
requirements of section 312 with re-
spect to employees of such employer by 
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offering such employees the option of 
enrolling 
with 
Exchange-partici-
pating health benefits plans through 
the Health Insurance Exchange con-
sistent with the provisions of subtitle 
B of title III. 
(B) EMPLOYEE
CHOICE.—Any em-
ployee 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 
respect to family coverage, coverage of 
the dependents 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 sub-
title, as a single employer. 
(8) OTHER COUNTING RULES.—The Com-
missioner shall establish rules relating to 
how employees are counted for purposes of 
carrying out this subsection. 
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(9) 
TREATMENT
OF
MULTIEMPLOYER 
PLANS.—The plan sponsor of a group 
health plan (as defined in section 733(a) 
of the Employee Retirement Income Secu-
rity Act of 1974) that is multiemployer 
plan (as defined in section 3(37) of such 
Act) may obtain health insurance cov-
erage with respect to participants in the 
plan through the Exchange to the same 
extent as an employer not described in 
paragraph (1) or (2) is permitted by the 
Commissioner to obtain health insurance 
coverage through the Exchange as an Ex-
change-eligible employer 
(f) SPECIAL
SITUATION
AUTHORITY.—The 
Commissioner shall have the authority to es-
tablish such rules as may be necessary to deal 
with special situations with regard to unin-
sured individuals and employers partici-
pating as Exchange-eligible individuals and 
employers, such as transition periods for indi-
viduals and employers who gain, or lose, Ex-
change-eligible participation status, and to es-
tablish grace periods for premium payment. 
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(g) SURVEYS OF INDIVIDUALS AND EMPLOY-
ERS.—The Commissioner shall provide for peri-
odic surveys of Exchange-eligible individuals 
and employers concerning satisfaction of such 
individuals and employers with the Health In-
surance 
Exchange 
and 
Exchange-partici-
pating health benefits plans. 
(h) EXCHANGE ACCESS STUDY.— 
(1) IN
GENERAL.—The Commissioner 
shall conduct a study of access to the 
Health Insurance Exchange for individ-
uals and for employers, including individ-
uals and employers who are not eligible 
and enrolled in Exchange-participating 
health benefits plans. The goal of the 
study is to determine if there are signifi-
cant 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 Ex-
change. 
(2) ITEMS
INCLUDED
IN
STUDY.—Such 
study also shall examine— 
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(A) the terms, conditions, and af-
fordability of group health coverage 
offered by employers and QHBP offer-
ing entities outside of the Exchange 
compared to Exchange-participating 
health benefits plans; and 
(B) the affordability-test standard 
for access of certain employed individ-
uals to coverage in the Health Insur-
ance Exchange. 
(3) REPORT.—Not later than January 1 
of Y3, in Y6, and thereafter, the Commis-
sioner shall submit to Congress on the 
study conducted under this subsection 
and shall include in such report rec-
ommendations 
regarding 
changes 
in 
standards for Exchange eligibility for for 
individuals and employers. 
SEC. 203. BENEFITS PACKAGE LEVELS. 
(a) IN GENERAL.—The Commissioner shall 
specify the benefits to be made available under 
Exchange-participating health benefits plans 
during each plan year, consistent with subtitle 
C of title I and this section. 
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(b) LIMITATION ON HEALTH BENEFITS PLANS 
OFFERED BY OFFERING ENTITIES.—The Commis-
sioner may not enter into a contract with a 
QHBP offering entity under section 204(c) for 
the offering of an Exchange-participating 
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 enhanced 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 of-
fers 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 establish the following standards 
consistent with this subsection and title I: 
(A) BASIC, ENHANCED, AND PREMIUM 
PLANS.—Standards for 3 levels of Ex-
change-participating health benefits 
plans: basic, enhanced, and premium 
(in this division referred to as a 
‘‘basic plan’’, ‘‘enhanced plan’’, and 
‘‘premium plan’’, respectively). 
(B) 
PREMIUM-PLUS
PLAN
BENE-
FITS.—Standards for additional bene-
fits that may be offered, consistent 
with this subsection and subtitle C of 
title I, 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 pack-
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age required under title I for a quali-
fied health benefits plan. 
(B) TIERED
COST-SHARING
FOR
AF-
FORDABLE
CREDIT
ELIGIBLE
INDIVID-
UALS.—In the case of an affordable 
credit eligible individual (as defined 
in section 242(a)(1)) enrolled in an Ex-
change-participating health benefits 
plan, the benefits under a basic plan 
are modified to provide for the re-
duced cost-sharing for the income tier 
applicable to the individual under 
section 244(c). 
(3) ENHANCED PLAN.—A enhanced plan 
shall offer, in addition to the level of ben-
efits under the basic plan, a lower level of 
cost-sharing as provided under title I con-
sistent with section 123(b)(5)(A). 
(4) PREMIUM
PLAN.—A premium plan 
shall offer, in addition to the level of ben-
efits under the basic plan, a lower level of 
cost-sharing as provided under title I con-
sistent with section 123(b)(5)(B). 
(5) PREMIUM-PLUS
PLAN.—A premium- 
plus plan is a premium plan that also 
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provides additional benefits, such as 
adult oral health and vision care, ap-
proved by the Commissioner. The portion 
of the premium that is attributable to 
such additional benefits shall be sepa-
rately specified. 
(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 package. Such variation shall 
permit a variation of not more than plus 
(or minus) 10 percent in cost-sharing with 
respect to each benefit category specified 
under section 122. 
(d) TREATMENT
OF STATE BENEFIT MAN-
DATES.—Insofar as a State requires a health 
insurance issuer offering health insurance 
coverage to include benefits beyond the essen-
tial benefits package, such requirement shall 
continue to apply to an Exchange-partici-
pating health benefits plan, if the State has 
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entered into an arrangement satisfactory to 
the Commissioner to reimburse the Commis-
sioner for the amount of any net increase in 
affordability premium credits under subtitle C 
as a result of an increase in premium in basic 
plans as a result of application of such re-
quirement. 
SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE- 
PARTICIPATING HEALTH BENEFITS PLANS. 
(a) CONTRACTING DUTIES.—In carrying out 
section 201(b)(1) and consistent with this sub-
title: 
(1) OFFERING ENTITY AND PLAN STAND-
ARDS.—The Commissioner shall— 
(A) establish standards necessary 
to implement the requirements of this 
title and title I for— 
(i) QHBP offering entities for 
the offering of an Exchange-par-
ticipating health benefits plan; 
and 
(ii) 
for 
Exchange-partici-
pating health benefits plans; and 
(B) certify QHBP offering entities 
and qualified health benefits plans as 
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meeting such standards and require-
ments of this title and title I for pur-
poses of this subtitle. 
(2) SOLICITING AND NEGOTIATING BIDS; 
CONTRACTS.—The Commissioner shall— 
(A) solicit bids from QHBP offer-
ing entities for the offering of Ex-
change-participating health benefits 
plans; 
(B) based upon a review of such 
bids, negotiate with such entities for 
the offering of such plans; and 
(C) enter into contracts with such 
entities for the offering of such plans 
through the Health Insurance Ex-
change under terms (consistent with 
this title) negotiated between the Com-
missioner and such entities. 
(3) FAR NOT
APPLICABLE.—The provi-
sions of the Federal Acquisition Regula-
tion shall not apply to contracts between 
the Commissioner and QHBP offering en-
tities for the offering of Exchange-partici-
pating health benefits plans under this 
title. 
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2314 
(b) STANDARDS FOR QHBP OFFERING ENTI-
TIES
TO
OFFER
EXCHANGE-PARTICIPATING 
HEALTH BENEFITS PLANS.—The standards es-
tablished under subsection (a)(1)(A) shall re-
quire that, in order for a QHBP offering entity 
to offer an Exchange-participating health ben-
efits plan, the entity must meet the following 
requirements: 
(1) LICENSED.—The entity shall be li-
censed to offer health insurance coverage 
under State law for each State in which it 
is offering such coverage. 
(2) DATA REPORTING.—The entity shall 
provide for the reporting of such informa-
tion as the Commissioner may specify, in-
cluding information necessary to admin-
ister the risk pooling mechanism de-
scribed in section 206(b) and information 
to address disparities in health and 
health care. 
(3) IMPLEMENTING AFFORDABILITY CRED-
ITS.—The entity shall provide for imple-
mentation of the affordability credits pro-
vided for enrollees under subtitle C, in-
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cluding the reduction in cost-sharing 
under section 244(c). 
(4) ENROLLMENT.—The entity shall ac-
cept all enrollments under this subtitle, 
subject to such exceptions (such as capac-
ity limitations) in accordance with the re-
quirements under title I for a qualified 
health benefits plan. The entity shall no-
tify the Commissioner if the entity projects 
or anticipates reaching such a capacity 
limitation that would result in a limita-
tion in enrollment. 
(5) RISK POOLING PARTICIPATION.—The 
entity shall participate in such risk pool-
ing mechanism as the Commissioner es-
tablishes under section 206(b). 
(6) ESSENTIAL COMMUNITY PROVIDERS.— 
With respect to the basic plan offered by 
the entity, the entity shall contract for 
outpatient services with covered entities 
(as defined in section 340B(a)(4) of the 
Public Health Service Act, as in effect as 
of July 1, 2009). The Commissioner shall 
specify the extent to which and manner in 
which the previous sentence shall apply in 
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2316 
the case of a basic plan with respect to 
which the Commissioner determines pro-
vides substantially all benefits through a 
health maintenance organization, as de-
fined in section 2791(b)(3) of the Public 
Health Service Act. 
(7) CULTURALLY AND LINGUISTICALLY AP-
PROPRIATE
SERVICES
AND
COMMUNICA-
TIONS.—The entity shall provide for cul-
turally 
and 
linguistically 
appropriate 
communication and health services. 
(8) 
ADDITIONAL
REQUIREMENTS.—The 
entity shall comply with other applicable 
requirements of this title, as specified by 
the Commissioner, which shall include 
standards regarding billing and collec-
tion practices for premiums and related 
grace periods and which may include 
standards to ensure that the entity does 
not use coercive practices to force pro-
viders not to contract with other entities 
offering coverage through the Health In-
surance Exchange. 
(c) CONTRACTS.— 
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2317 
(1) BID APPLICATION.—To be eligible to 
enter into a contract under this section, a 
QHBP offering entity shall submit to the 
Commissioner a bid at such time, in such 
manner, and containing such information 
as the Commissioner may require. 
(2) 
TERM.—Each 
contract 
with 
a 
QHBP offering entity under this section 
shall be for a term of not less than one 
year, but may be made automatically re-
newable from term to term in the absence 
of notice of termination by either party. 
(3) ENFORCEMENT
OF
NETWORK
ADE-
QUACY.—In the case of a health benefits 
plan of a QHBP offering entity that uses 
a provider network, the contract 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 Commis-
sioner shall establish under section 
115; and 
(B) an individual enrolled in such 
plan receives an item or service from 
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a provider that is not within such net-
work; 
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 furnished by a 
provider within such network. 
(4) OVERSIGHT
AND
ENFORCEMENT
RE-
SPONSIBILITIES.—The Commissioner shall 
establish processes, in coordination with 
State insurance regulators, to oversee, 
monitor, and enforce applicable require-
ments of this title with respect to QHBP 
offering entities offering Exchange-par-
ticipating health benefits plans and such 
plans, including the marketing of such 
plans. Such processes shall include the 
following: 
(A) 
GRIEVANCE
AND
COMPLAINT 
MECHANISMS.—The Commissioner shall 
establish, in coordination with State 
insurance regulators, a process under 
which Exchange-eligible individuals 
and employers may file complaints 
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concerning violations of such stand-
ards. 
(B) 
ENFORCEMENT.—In 
carrying 
out authorities under this division re-
lating to the Health Insurance Ex-
change, the Commissioner may impose 
one or more of the intermediate sanc-
tions described in section 142(c). 
(C) TERMINATION.— 
(i) IN GENERAL.—The Commis-
sioner may terminate a contract 
with a QHBP offering entity under 
this section for the offering of an 
Exchange-participating 
health 
benefits plan if such entity fails to 
comply with the applicable re-
quirements of this title. Any deter-
mination by the Commissioner to 
terminate a contract shall be 
made in accordance with formal 
investigation and compliance pro-
cedures established by the Com-
missioner under which— 
(I) the Commissioner pro-
vides the entity with the rea-
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2320 
sonable opportunity to develop 
and implement a corrective 
action plan to correct the defi-
ciencies that were the basis of 
the Commissioner’s determina-
tion; and 
(II) the Commissioner pro-
vides the entity with reason-
able notice and opportunity 
for 
hearing 
(including 
the 
right to appeal an initial deci-
sion) before terminating the 
contract. 
(ii) EXCEPTION
FOR
IMMINENT 
AND
SERIOUS
RISK
TO
HEALTH.— 
Clause (i) shall not apply if the 
Commissioner determines that a 
delay in termination, resulting 
from compliance with the proce-
dures specified in such clause 
prior to termination, would pose 
an imminent and serious risk to 
the health of individuals enrolled 
under the qualified health bene-
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fits plan of the QHBP offering en-
tity. 
(D) 
CONSTRUCTION.—Nothing 
in 
this subsection shall be construed as 
preventing the application of other 
sanctions under subtitle E of title I 
with respect to an entity for a viola-
tion of such a requirement. 
SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-ELI-
GIBLE INDIVIDUALS AND EMPLOYERS IN EX-
CHANGE-PARTICIPATING HEALTH BENEFITS 
PLAN. 
(a) IN GENERAL.— 
(1) 
OUTREACH.—The 
Commissioner 
shall conduct outreach activities con-
sistent with subsection (c), including 
through use of appropriate entities as de-
scribed in paragraph (4) of such sub-
section, to inform and educate individuals 
and employers about the Health Insur-
ance 
Exchange 
and 
Exchange-partici-
pating health benefits plan options. Such 
outreach shall include outreach specific 
to vulnerable populations, such as chil-
dren, individuals with disabilities, indi-
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viduals 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 em-
ployers (as defined in section 202). 
(3) ENROLLMENT.—The Commissioner 
shall establish and carry out an enroll-
ment process for Exchange-eligible indi-
viduals and employers, including at com-
munity locations, in accordance with sub-
section (b). 
(b) ENROLLMENT PROCESS.— 
(1) IN
GENERAL.—The Commissioner 
shall establish a process consistent with 
this title for enrollments in Exchange-par-
ticipating health benefits plans. Such 
process 
shall 
provide 
for 
enrollment 
through means such as the mail, by tele-
phone, electronically, and in person. 
(2) ENROLLMENT PERIODS.— 
(A) OPEN
ENROLLMENT
PERIOD.— 
The Commissioner shall establish an 
annual open enrollment period dur-
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2323 
ing which an Exchange-eligible indi-
vidual or employer may elect to enroll 
in an Exchange-participating health 
benefits plan for the following plan 
year and an enrollment period for af-
fordability credits under subtitle C. 
Such periods shall be during Sep-
tember through November of each 
year, or such other time that would 
maximize 
timeliness 
of 
income 
verification for purposes of such sub-
title. The open enrollment period shall 
not be less than 30 days. 
(B) 
SPECIAL
ENROLLMENT.—The 
Commissioner shall also provide for 
special enrollment periods to take into 
account special circumstances of indi-
viduals and employers, such as an in-
dividual who— 
(i) loses acceptable coverage; 
(ii) experiences a change in 
marital or other dependent status; 
(iii) moves outside the service 
area 
of 
the 
Exchange-partici-
pating health benefits plan in 
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which the individual is enrolled; 
or 
(iv) experiences a significant 
change in income. 
(C) ENROLLMENT
INFORMATION.— 
The Commissioner shall provide for 
the broad dissemination of informa-
tion to prospective enrollees on the en-
rollment 
process, 
including 
before 
each open enrollment period. In car-
rying out the previous sentence, the 
Commissioner may work with other 
appropriate entities to facilitate such 
provision of information. 
(3) AUTOMATIC
ENROLLMENT
FOR
NON- 
MEDICAID ELIGIBLE INDIVIDUALS.— 
(A) 
IN
GENERAL.—The 
Commis-
sioner shall provide for a process 
under which individuals who are Ex-
change-eligible individuals described 
in subparagraph (B) are automati-
cally enrolled under an appropriate 
Exchange-participating health bene-
fits plan. Such process may involve a 
random assignment or some other 
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2325 
form of assignment that takes into ac-
count the health care providers used 
by the individual involved or such 
other relevant factors as the Commis-
sioner may specify. 
(B) SUBSIDIZED
INDIVIDUALS
DE-
SCRIBED.—An individual described in 
this subparagraph is an Exchange-eli-
gible individual who is either of the 
following: 
(i) AFFORDABILITY CREDIT ELIGI-
BLE
INDIVIDUALS.—The 
indi-
vidual— 
(I) has applied for, and 
been determined eligible for, 
affordability 
credits 
under 
subtitle C; 
(II) has not opted out from 
receiving 
such 
affordability 
credit; and 
(III) does not otherwise en-
roll in another Exchange-par-
ticipating 
health 
benefits 
plan. 
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(ii) INDIVIDUALS ENROLLED IN A 
TERMINATED PLAN.—The individual 
is enrolled in an Exchange-par-
ticipating health benefits plan 
that is terminated (during or at 
the end of a plan year) and who 
does not otherwise enroll in an-
other 
Exchange-participating 
health benefits plan. 
(4) DIRECT
PAYMENT
OF
PREMIUMS
TO 
PLANS.—Under the enrollment process, in-
dividuals 
enrolled 
in 
an 
Exchange- 
partcipating health benefits plan shall 
pay such plans directly, and not through 
the Commissioner or the Health Insurance 
Exchange. 
(c) COVERAGE
INFORMATION
AND
ASSIST-
ANCE.— 
(1) COVERAGE INFORMATION.—The Com-
missioner shall provide for the broad dis-
semination of information on Exchange- 
participating health benefits plans of-
fered under this title. Such information 
shall be provided in a comparative man-
ner, and shall include information on 
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2327 
benefits, premiums, cost-sharing, quality, 
provider networks, and consumer satisfac-
tion. 
(2) 
CONSUMER
ASSISTANCE
WITH 
CHOICE.—To provide assistance to Ex-
change-eligible individuals and employ-
ers, the Commissioner shall— 
(A) provide for the operation of a 
toll-free telephone hotline to respond 
to requests for assistance and main-
tain 
an 
Internet 
website 
through 
which individuals may obtain infor-
mation on coverage under Exchange- 
participating health benefits plans 
and file complaints; 
(B) develop and disseminate infor-
mation to Exchange-eligible enrollees 
on their rights and responsibilities; 
(C) assist Exchange-eligible indi-
viduals in selecting Exchange-partici-
pating health benefits plans and ob-
taining benefits through such plans; 
and 
(D) 
ensure 
that 
the 
Internet 
website described in subparagraph 
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(A) and the information described in 
subparagraph (B) is developed using 
plain language (as defined in section 
133(a)(2)). 
(3) USE
OF
OTHER
ENTITIES.—In car-
rying out this subsection, the Commis-
sioner may work with other appropriate 
entities to facilitate the dissemination of 
information under this subsection and to 
provide assistance as described in para-
graph (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 cov-
ered under acceptable coverage, for 
the period of time beginning on the 
date of birth and ending on the date 
the child otherwise is covered under 
acceptable coverage (or, if earlier, the 
end of the month in which the 60-day 
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period, beginning on the date of birth, 
ends), the child shall be deemed— 
(i) to be a non-traditional 
Medicaid eligible individual (as 
defined in subsection (e)(5)) for 
purposes of this division and Med-
icaid; and 
(ii) to have elected to enroll in 
Medicaid through the application 
of paragraph (3). 
(B) EXTENDED TREATMENT AS TRADI-
TIONAL
MEDICAID
ELIGIBLE
INDI-
VIDUAL.—In the case of a child de-
scribed 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 cov-
erage or the State otherwise makes a 
determination of the child’s eligibility 
for medical assistance under its Med-
icaid 
plan 
pursuant 
to 
section 
1943(c)(1) of the Social Security Act) 
to be a traditional Medicaid eligible 
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individual 
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 eli-
gible for child health assistance under 
title XXI of the Social Security Act (in-
cluding 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 tra-
ditional Medicaid eligible individual as 
of such day. 
(3) AUTOMATIC
ENROLLMENT
OF
MED-
ICAID
ELIGIBLE
INDIVIDUALS
INTO
MED-
ICAID.—The Commissioner 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- 
participating health benefits plan is auto-
matically enrolled under Medicaid. 
(4) NOTIFICATIONS.—The Commissioner 
shall notify each State in Y1 and for pur-
poses of section 1902(gg)(1) of the Social 
Security Act (as added by section 1703(a)) 
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whether the Health Insurance Exchange 
can support enrollment of children de-
scribed in paragraph (2) in such State in 
such year. 
(e) MEDICAID COVERAGE FOR MEDICAID ELI-
GIBLE INDIVIDUALS.— 
(1) IN GENERAL.— 
(A) CHOICE FOR LIMITED EXCHANGE- 
ELIGIBLE 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 in-
stead of under an Exchange-partici-
pating health benefits plan. Such an 
individual may change such election 
during an enrollment period under 
subsection (b)(2). 
(B) MEDICAID ENROLLMENT OBLIGA-
TION.—An 
Exchange 
eligible 
indi-
vidual may apply, in the manner de-
scribed in section 241(b)(1), for a de-
termination of whether the individual 
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is a Medicaid-eligible individual. If 
the individual is determined to be so 
eligible, the Commissioner, through 
the Medicaid memorandum of under-
standing, shall provide for the enroll-
ment of the individual under the State 
Medicaid plan in accordance with the 
Medicaid 
memorandum 
of 
under-
standing under paragraph (4). In the 
case of such an enrollment, the State 
shall provide for the same periodic re-
determination 
of 
eligibility 
under 
Medicaid as would otherwise apply if 
the individual had directly applied 
for medical assistance to the State 
Medicaid agency. 
(2) NON-TRADITIONAL
MEDICAID
ELIGI-
BLE INDIVIDUALS.—In the case of a non-tra-
ditional Medicaid eligible individual de-
scribed 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 
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the Medicaid memorandum of under-
standing under paragraph (4). 
(3) COORDINATED
ENROLLMENT
WITH 
STATE
THROUGH
MEMORANDUM
OF
UNDER-
STANDING.—The 
Commissioner, 
in 
con-
sultation with the Secretary of Health and 
Human Services, shall enter into a memo-
randum of understanding with each State 
(each in this division referred to as a 
‘‘Medicaid 
memorandum 
of 
under-
standing’’) with respect to coordinating 
enrollment of individuals in Exchange- 
participating health benefits plans and 
under the State’s Medicaid program con-
sistent with this section and to otherwise 
coordinate the implementation of the pro-
visions of this division with respect to the 
Medicaid program. Such memorandum 
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 con-
strued as permitting such memorandum 
to modify or vitiate any requirement of a 
State Medicaid plan. 
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(4) MEDICAID
ELIGIBLE
INDIVIDUALS.— 
For purposes of this division: 
(A) 
MEDICAID
ELIGIBLE
INDI-
VIDUAL.—The term ‘‘Medicaid eligible 
individual’’ means an individual who 
is 
eligible 
for 
medical 
assistance 
under Medicaid. 
(B) TRADITIONAL MEDICAID ELIGIBLE 
INDIVIDUAL.—The 
term 
‘‘traditional 
Medicaid eligible individual’’ means a 
Medicaid eligible individual other 
than an individual who is— 
(i) a Medicaid eligible indi-
vidual by reason of the applica-
tion of subclause (VIII) of section 
1902(a)(10)(A)(i) of the Social Se-
curity Act; or 
(ii) a childless adult not de-
scribed in section 1902(a)(10)(A) 
or (C) of such Act (as in effect as 
of the day before the date of the 
enactment of this Act). 
(C) NON-TRADITIONAL MEDICAID ELI-
GIBLE INDIVIDUAL.—The term ‘‘non-tra-
ditional Medicaid eligible individual’’ 
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means a Medicaid eligible individual 
who is not a traditional Medicaid eli-
gible individual. 
(f) EFFECTIVE
CULTURALLY
AND
LINGUIS-
TICALLY APPROPRIATE COMMUNICATION.—In car-
rying out this section, the Commissioner shall 
establish effective methods for communicating 
in plain language and a culturally and lin-
guistically appropriate manner. 
SEC. 206. OTHER FUNCTIONS. 
(a) COORDINATION OF AFFORDABILITY CRED-
ITS.—The Commissioner shall coordinate the 
distribution of affordability premium and 
cost-sharing credits under subtitle C to QHBP 
offering entities offering Exchange-partici-
pating health benefits plans. 
(b) COORDINATION OF RISK POOLING.—The 
Commissioner shall establish a mechanism 
whereby there is an adjustment made of the 
premium amounts payable among QHBP offer-
ing entities offering Exchange-participating 
health benefits plans of premiums collected for 
such plans that takes into account (in a man-
ner specified by the Commissioner) the dif-
ferences in the risk characteristics of individ-
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uals and employers enrolled under the dif-
ferent Exchange-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 Inspector General for the 
Health Insurance Exchange, to be headed 
by a Special Inspector General for the 
Health Insurance Exchange (in this sub-
section referred to as the ‘‘Special Inspec-
tor General’’) to be appointed by the Presi-
dent, by and with the advice and consent 
of the Senate. The nomination of an indi-
vidual 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 coordi-
nate audits, evaluations and inves-
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tigations of the Health Insurance Ex-
change to protect the integrity of the 
Health Insurance Exchange, as well 
as the health and welfare of partici-
pants in the Exchange; 
(B) report both to the Commis-
sioner and to the Congress regarding 
program and management problems 
and recommendations to correct them; 
(C) have other duties (described in 
paragraphs (2) and (3) of section 121 
of division A of Public Law 110–343) 
in relation to the duties described in 
the previous subparagraphs; and 
(D) have the authorities provided 
in section 6 of the Inspector General 
Act of 1978 in carrying out duties 
under this paragraph. 
(3) APPLICATION OF OTHER SPECIAL IN-
SPECTOR GENERAL PROVISIONS.—The provi-
sions of subsections (b) (other than para-
graphs (1) and (3)), (d) (other than para-
graph (1)), and (e) of section 121 of divi-
sion A of the Emergency Economic Sta-
bilization Act of 2009 (Public Law 110– 
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343) shall apply to the Special Inspector 
General under this subsection in the same 
manner as such provisions apply to the 
Special Inspector General under such sec-
tion. 
(4) REPORTS.—Not later than one year 
after the confirmation of the Special In-
spector General, and annually thereafter, 
the Special Inspector General shall sub-
mit to the appropriate committees of Con-
gress 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 
consultation with the Small Business Ad-
ministration, shall establish and carry 
out a program to provide to small employ-
ers counseling and technical assistance 
with respect to the provision of health in-
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(E) Enrollment and plan selection 
assistance for employers with respect 
to the Health Insurance Exchange. 
(F) Responses to questions relat-
ing to the Health Insurance Exchange 
and the program established under 
paragraph (1). 
(3) AUTHORITY TO PROVIDE SERVICES DI-
RECTLY
OR
BY
CONTRACT.—The Commis-
sioner may provide services under para-
graph (2) directly or by contract with non-
profit entities that the Commissioner de-
termines capable of carrying out such 
services. 
(4) SMALL EMPLOYER DEFINED.—In this 
subsection, the term ‘‘small employer’’ 
means an employer with less than 100 em-
ployees. 
SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND. 
(a) ESTABLISHMENT OF HEALTH INSURANCE 
EXCHANGE TRUST FUND.—There is created with-
in the Treasury of the United States a trust 
fund to be known as the ‘‘Health Insurance Ex-
change Trust Fund’’ (in this section referred to 
as the ‘‘Trust Fund’’), consisting of such 
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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 
Commissioner shall pay from time to time from 
the Trust Fund such amounts as the Commis-
sioner determines are necessary to make pay-
ments to operate the Health Insurance Ex-
change, 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 OB-
TAINING
ACCEPTABLE
COVERAGE.—The 
amounts received in the Treasury 
under section 59B of the Internal Rev-
enue Code of 1986 (relating to require-
ment of health insurance coverage for 
individuals). 
(B) EMPLOYMENT TAXES ON EMPLOY-
ERS
NOT
PROVIDING
ACCEPTABLE
COV-
ERAGE.—The amounts received in the 
Treasury under section 3111(c) of the 
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Internal Revenue Code of 1986 (relat-
ing to employers electing to not pro-
vide health benefits). 
(C) EXCISE
TAX
ON
FAILURES
TO 
MEET
CERTAIN
HEALTH
COVERAGE
RE-
QUIREMENTS.—The amounts received 
in 
the 
Treasury 
under 
section 
4980H(b) (relating to excise tax with 
respect to failure to meet health cov-
erage participation requirements). 
(2) APPROPRIATIONS TO COVER GOVERN-
MENT
CONTRIBUTIONS.—There are hereby 
appropriated, out of any moneys in the 
Treasury not otherwise appropriated, 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 
similar to the rules of subchapter B of chapter 
98 of the Internal Revenue Code of 1986 shall 
apply with respect to the Trust Fund. 
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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) ap-
plies to the Commissioner for approval of 
a State-based Health Insurance 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 Ex-
change, with respect to such State (or group of 
States). The Commissioner shall approve a 
State-based Health Insurance Exchange if it 
meets the requirements for approval under 
subsection (b). 
(b) REQUIREMENTS
FOR
APPROVAL.—The 
Commissioner may not approve a State-based 
Health Insurance Exchange under this section 
unless the following requirements are met: 
(1) The State-based Health Insurance 
Exchange must demonstrate the capacity 
to and provide assurances satisfactory to 
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the Commissioner that the State-based 
Health Insurance Exchange will carry out 
the functions specified for the Health In-
surance Exchange in the State (or States) 
involved, including— 
(A) negotiating and contracting 
with QHBP offering entities for the of-
fering 
of 
Exchange-participating 
health benefits plan, which satisfy the 
standards and requirements of this 
title and title I; 
(B) enrolling Exchange-eligible in-
dividuals and employers in such State 
in such plans; 
(C) the establishment of sufficient 
local offices to meet the needs of Ex-
change-eligible individuals and em-
ployers; 
(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 
Government which does exceed the 
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cost to the Federal Government if this 
section did not apply; and 
(E) 
enforcement 
activities 
con-
sistent with federal requirements. 
(2) There is no more than one Health 
Insurance Exchange operating with re-
spect to any one State. 
(3) The State provides assurances sat-
isfactory to the Commissioner that ap-
proval of such an Exchange will not re-
sult in any net increase in expenditures to 
the Federal Government. 
(4) The State provides for reporting of 
such information as the Commissioner de-
termines and assurances satisfactory to 
the Commissioner that it will vigorously 
enforce violations of applicable require-
ments. 
(5) Such other requirements as the 
Commissioner may specify. 
(c) CEASING OPERATION.— 
(1) IN GENERAL.—A State-based Health 
Insurance Exchange may, at the option of 
each State involved, and only after pro-
viding timely and reasonable notice to the 
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Commissioner, cease operation as such an 
Exchange, in which case the Health Insur-
ance Exchange shall operate, instead of 
such State-based Health Insurance Ex-
change, with respect to such State (or 
States). 
(2) TERMINATION; HEALTH
INSURANCE 
EXCHANGE RESUMPTION OF FUNCTIONS.—The 
Commissioner may terminate the ap-
proval (for some or all functions) of a 
State-based Health Insurance Exchange 
under this section if the Commissioner de-
termines that such Exchange no longer 
meets the requirements of subsection (b) 
or is no longer capable of carrying out 
such functions in accordance with the re-
quirements of this subtitle. In lieu of ter-
minating such approval, the Commis-
sioner may temporarily assume some or 
all functions of the State-based Health In-
surance Exchange until such time as the 
Commissioner determines the State-based 
Health Insurance Exchange meets such 
requirements of subsection (b) and is ca-
pable of carrying out such functions in 
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to the Health Insurance Exchange or to the 
Commissioner in the area in which the State- 
based Health Insurance Exchange operates 
shall be deemed a reference to the State-based 
Health Insurance Exchange and the head of 
such Exchange, respectively. 
(f) FUNDING.—In the case of a State-based 
Health Insurance Exchange, there shall be as-
sistance provided for the operation of such Ex-
change in the form of a matching grant with 
a State share of expenditures required. 
SEC. 209. PARTICIPATION OF SMALL EMPLOYER BENEFIT 
ARRANGEMENTS. 
(a) IN GENERAL.—The Commissioner may 
enter into contracts with small employer ben-
efit arrangements to provide consumer infor-
mation, outreach, and assistance in the enroll-
ment of small employers (and their employees) 
who are members of such an arrangement 
under Exchange participating health benefits 
plans. 
(b) SMALL
EMPLOYER
BENEFIT
ARRANGE-
MENT
DEFINED.—In this section, the term 
‘‘small employer benefit arrangement’’ means 
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a not-for-profit agricultural or other coopera-
tive that— 
(1) consists solely of its members and 
is operated for the primary purpose of 
providing affordable employee benefits to 
its members; 
(2) only has as members small employ-
ers in the same industry or line of busi-
ness; 
(3) has no member that has more than 
a 5 percent voting interest in the coopera-
tive; 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 subtitle referred to as the 
‘‘Secretary’’) shall provide for the offering of 
an Exchange-participating health benefits 
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plan (in this division referred to as the ‘‘public 
health insurance option’’) that ensures choice, 
competition, and stability of affordable, high 
quality coverage throughout the United States 
in accordance with this subtitle. In designing 
the option, the Secretary’s primary responsi-
bility is to create a low-cost plan without 
comprimising quality or access to care. 
(b) OFFERING
AS
AN
EXCHANGE-PARTICI-
PATING HEALTH BENEFITS PLAN.— 
(1) EXCLUSIVE TO THE EXCHANGE.—The 
public health insurance option shall only 
be made available through the Health In-
surance Exchange. 
(2) ENSURING A LEVEL PLAYING FIELD.— 
Consistent with this subtitle, the public 
health insurance option shall comply with 
requirements that are applicable under 
this title to an Exchange-participating 
health benefits plan, including require-
ments related to benefits, benefit levels, 
provider networks, notices, consumer pro-
tections, and cost sharing. 
(3) PROVISION OF BENEFIT LEVELS.—The 
public health insurance option— 
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(A) shall offer basic, enhanced, 
and premium plans; and 
(B) may offer premium-plus plans. 
(c) 
ADMINISTRATIVE
CONTRACTING.—The 
Secretary may enter into contracts for the pur-
pose 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 insur-
ance option in the same manner as the Sec-
retary may enter into contracts under sub-
section (a)(1) of such section. The Secretary 
has the same authority with respect to the pub-
lic health insurance option as the Secretary 
has under subsections (a)(1) and (b) of section 
1874A of the Social Security Act with respect 
to title XVIII of such Act. Contracts under this 
subsection shall not involve the transfer of in-
surance risk to such entity. 
(d) OMBUDSMAN.—The Secretary shall es-
tablish 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 
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Medicare Beneficiary Ombudsman under sec-
tion 1808(c)(2) of the Social Security Act. 
(e) DATA COLLECTION.—The Secretary shall 
collect such data as may be required to estab-
lish premiums and payment rates for the pub-
lic health insurance option and for other pur-
poses under this subtitle, including to improve 
quality and to reduce disparities in health 
and health care based on race, ethnicity, pri-
mary language, sex, sexual orientation, gender 
identity, 
disability, 
socioeconomic 
status, 
rural, urban, or other geographic setting, and 
any other population or subpopulation as de-
termined appropriate by the Secretary, but 
only if the data collection is conducted on a 
voluntary basis and consistent with the stand-
ards, including privacy protections, estab-
lished pursuant to section 1709 of the Public 
Health Service Act. 
(f) TREATMENT OF PUBLIC HEALTH INSUR-
ANCE
OPTION.—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. 
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(g) ACCESS TO FEDERAL COURTS.—The pro-
visions 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 controversy, 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 
pre-
mium rates for the public health insur-
ance option in a manner— 
(A) that complies with the pre-
mium rules established by the Com-
missioner under section 113 for Ex-
change-participating health benefit 
plans; and 
(B) at a level sufficient to fully fi-
nance the costs of— 
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(i) health benefits provided by 
the public health insurance op-
tion; and 
(ii) administrative costs re-
lated 
to 
operating 
the 
public 
health insurance option. 
(2) CONTINGENCY
MARGIN.—In estab-
lishing premium rates under paragraph 
(1), the Secretary shall include an appro-
priate amount for a contingency margin. 
(b) ACCOUNT.— 
(1) ESTABLISHMENT.—There is estab-
lished in the Treasury of the United States 
an Account for the receipts and disburse-
ments attributable to the operation of the 
public health insurance option, including 
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 payments or pre-
miums described in such section. 
(2) START-UP FUNDING.— 
(A) IN GENERAL.—In order to pro-
vide for the establishment of the pub-
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lic health insurance option there is 
hereby appropriated to the Secretary, 
out of any funds in the Treasury not 
otherwise 
appropriated, 
$2,000,000,000. In order to provide for 
initial claims reserves before the col-
lection of premiums, there is hereby 
appropriated to the Secretary, out of 
any funds in the Treasury not other-
wise appropriated, such sums as nec-
essary to cover 90 days worth of 
claims reserves based on projected en-
rollment. 
(B) 
AMORTIZATION
OF
START-UP 
FUNDING.—The Secretary shall provide 
for the repayment of the startup fund-
ing provided under subparagraph (A) 
to the Treasury in an amortized man-
ner over the 10-year period beginning 
with Y1. 
(C) LIMITATION ON FUNDING.—Noth-
ing in this section shall be construed 
as authorizing any additional appro-
priations to the Account, other than 
such amounts as are otherwise pro-
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vided with respect to other Exchange- 
participating health benefits plans. 
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 pro-
vided in subparagraph (B) and sub-
section (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.— 
Payment rates for practitioners’ 
services 
otherwise 
established 
under the fee schedule under sec-
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tion 1848 of the Social Security 
Act shall be applied without re-
gard to the provisions under sub-
section (f) of such section and the 
update under subsection (d)(4) 
under such section for a year as 
applied 
under 
this 
paragraph 
shall be not less than 1 percent. 
(ii) 
ADJUSTMENTS.—The 
Sec-
retary may determine the extent to 
which Medicare adjustments ap-
plicable to base payment rates 
under parts A and B of Medicare 
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 ne-
gotiated by the Secretary. 
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(b) INCENTIVES
FOR
PARTICIPATING
PRO-
VIDERS.— 
(1) INITIAL INCENTIVE PERIOD.— 
(A) IN
GENERAL.—The Secretary 
shall provide, in the case of services 
described in subparagraph (B) fur-
nished during Y1, Y2, and Y3, for pay-
ment rates that are 5 percent greater 
than the rates established under sub-
section (a). 
(B) 
SERVICES
DESCRIBED.—The 
services described in this subpara-
graph are items and professional serv-
ices, under the public health insur-
ance option by a physician or other 
health care practitioner who partici-
pates in both Medicare and the public 
health insurance option. 
(C) SPECIAL
RULES.—A pediatri-
cian and any other health care practi-
tioner who is a type of practitioner 
that does not typically participate in 
Medicare (as determined by the Sec-
retary) shall also be eligible for the 
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increased payment rates under sub-
paragraph (A). 
(2) SUBSEQUENT
PERIODS.—Beginning 
with Y4 and for subsequent years, the Sec-
retary shall continue to use an adminis-
trative process to set such rates in order 
to promote payment accuracy, to ensure 
adequate beneficiary access to providers, 
and to promote affordablility and the effi-
cient delivery of medical care consistent 
with section 221(a). Such rates shall not 
be set at levels expected to increase over-
all 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 
partici-
pating under Medicare are participating 
providers in the public health insurance 
option unless they opt out in a process es-
tablished 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 
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establishment of payment rates under this sec-
tion but not to the specific methodology for es-
tablishing such rates or the calculation of 
such rates. 
(d) CONSTRUCTION.—Nothing in this sub-
title shall be construed as limiting the Sec-
retary’s authority to correct for payments that 
are excessive or deficient, taking into account 
the provisions of section 221(a) and the 
amounts paid for similar health care pro-
viders and services under other Exchange-par-
ticipating health benefits plans. 
(e) CONSTRUCTION.—Nothing in this sub-
title shall be construed as affecting the au-
thority of the Secretary to establish payment 
rates, including payments to provide for the 
more efficient delivery of services, such as the 
initiatives provided for under section 224. 
(f) LIMITATIONS ON REVIEW.—There shall be 
no administrative or judicial review of a pay-
ment rate or methodology established under 
this section or under section 224. 
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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 deter-
mine payments for items and services under 
the public health insurance option. The pay-
ment mechanisms and policies under this sec-
tion may include patient-centered medical 
home and other care management payments, 
accountable care organizations, value-based 
purchasing, bundling of services, differential 
payment rates, performance or utilization 
based payments, partial capitation, and direct 
contracting with providers. 
(b) REQUIREMENTS
FOR
INNOVATIVE
PAY-
MENTS.—The Secretary shall design and imple-
ment the payment mechanisms and policies 
under this section in a manner that— 
(1) seeks to— 
(A) improve health outcomes; 
(B) reduce health disparities (in-
cluding racial, ethnic, and other dis-
parities); 
(C) provide efficent and afford-
able care; 
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(D) address geographic variation 
in the provision of health services; or 
(E) prevent or manage chronic ill-
ness; and 
(2) promotes care that is integrated, 
patient-centered, quality, and efficient. 
(c) ENCOURAGING THE USE OF HIGH VALUE 
SERVICES.—To the extent allowed by the benefit 
standards applied to all Exchange-partici-
pating health benefits plans, the public health 
insurance option may modify cost sharing 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 pay-
ment structure models (such as accountable 
care organizations and medical homes) under 
the public health insurance option for dif-
ferent geographic areas. 
SEC. 225. PROVIDER PARTICIPATION. 
(a) IN GENERAL.—The Secretary shall es-
tablish conditions of participation for health 
care providers under the public health insur-
ance option. 
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(b) LICENSURE OR CERTIFICATION.—The Sec-
retary shall not allow a health care provider 
to participate in the public health insurance 
option unless such provider is appropriately 
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 insur-
ance option, for which payment may be 
made for services furnished during the 
year, in one of 2 classes: 
(A) PREFERRED PHYSICIANS.—Those 
physicians who agree to accept the 
payment rate established under sec-
tion 223 (without regard to cost-shar-
ing) as the payment in full. 
(B) PARTICIPATING, NON-PREFERRED 
PHYSICIANS.—Those 
physicians 
who 
agree not to impose charges (in rela-
tion to the payment rate described in 
section 223 for such physicians) that 
exceed the ratio permitted under sec-
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tion 1848(g)(2)(C) of the Social Secu-
rity Act. 
(2) OTHER PROVIDERS.—The Secretary 
shall provide for the participation (on an 
annual or other basis specified by the Sec-
retary) of health care providers (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 estab-
lished under section 223 (without regard 
to cost-sharing) as the payment in full. 
(d) EXCLUSION
OF CERTAIN PROVIDERS.— 
The Secretary shall exclude from participa-
tion under the public health insurance option 
a health care provider that is excluded from 
participation in a Federal health care pro-
gram (as defined in section 1128B(f) of the So-
cial Security Act). 
SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS. 
Provisions of law (other than criminal law 
provisions) identified by the Secretary by regu-
lation, in consultation with the Inspector Gen-
eral of the Department of Health and Human 
Services, that impose sanctions with respect to 
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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 Representa-
tives that Members who vote in favor of the es-
tablishment of a public, Federal Government 
run health insurance option, and senior mem-
bers 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. 
Subtitle C—Individual 
Affordability Credits 
SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EX-
CHANGE. 
(a) IN GENERAL.—Subject to the succeeding 
provisions of this subtitle, in the case of an af-
fordable credit eligible individual enrolled in 
an Exchange-participating health benefits 
plan— 
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(1) the individual shall be eligible for, 
in accordance with this subtitle, afford-
ability credits consisting of— 
(A) 
an 
affordability 
premium 
credit under section 243 to be applied 
against the premium for the Ex-
change-participating health benefits 
plan in which the individual is en-
rolled; and 
(B) an affordability cost-sharing 
credit under section 244 to be applied 
as a reduction of the cost-sharing oth-
erwise applicable to such plan; and 
(2) the Commissioner shall pay the 
QHBP offering entity that offers such plan 
from the Health Insurance Exchange 
Trust Fund the aggregate amount of af-
fordability credits for all affordable cred-
it eligible individuals enrolled in such 
plan. 
(b) APPLICATION.— 
(1) IN GENERAL.—An Exchange eligible 
individual may apply to the Commissioner 
through the Health Insurance Exchange 
or through another entity under an ar-
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rangement made with the Commissioner, 
in a form and manner specified by the 
Commissioner. The Commissioner through 
the 
Health 
Insurance 
Exchange 
or 
through another public entity under an 
arrangement made with the Commis-
sioner shall make a determination as to 
eligibility of an individual for afford-
ability credits under this subtitle.The 
Commissioner shall establish a process 
whereby, on the basis of information oth-
erwise 
available, 
individuals 
may 
be 
deemed to be affordable credit eligible in-
dividuals. 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 af-
fordability credits under this subtitle and 
under the same standards as used by the 
Commissioner, under the Medicaid memo-
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randum of understanding (as defined in 
section 205(c)(4))— 
(A) the State Medicaid agency is 
authorized to conduct such deter-
minations for any Exchange-eligible 
individual who requests such a deter-
mination; and 
(B) the Commissioner shall reim-
burse the State Medicaid agency for 
the costs of conducting such deter-
minations. 
(3) MEDICAID SCREEN AND ENROLL OBLI-
GATION.—In the case of an application 
made under paragraph (1), there shall be 
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 
memorandum 
of 
understanding, 
shall 
provide for the enrollment of the indi-
vidual under the State Medicaid plan in 
accordance with the Medicaid memo-
randum of understanding. In the case of 
such an enrollment, the State shall pro-
vide for the same periodic redetermina-
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tion of eligibility under Medicaid as 
would otherwise apply if the individual 
had directly applied for medical assist-
ance to the State Medicaid agency. 
(c) USE OF AFFORDABILITY CREDITS.— 
(1) IN GENERAL.—In Y1 and Y2 an af-
fordable credit eligible individual may 
use an affordability credit only with re-
spect to a basic plan. 
(2) FLEXIBILITY
IN
PLAN
ENROLLMENT 
AUTHORIZED.—Beginning 
with 
Y3, 
the 
Commissioner shall establish a process to 
allow an affordability credit to be used 
for enrollees in enhanced or premium 
plans. In the case of an affordable credit 
eligible individual who enrolls in an en-
hanced or premium plan, the individual 
shall be responsible for any difference be-
tween the premium for such plan and the 
affordable credit amount otherwise appli-
cable 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 
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section 6103 of the Internal Revenue Code of 
1986 such information as may be required to 
carry out this subtitle. 
(e) NO CASH REBATES.—In no case shall an 
affordable credit eligible individual receive 
any cash payment as a result of the applica-
tion of this subtitle. 
SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL. 
(a) DEFINITION.— 
(1) IN GENERAL.—For purposes of this 
division, the term ‘‘affordable credit eligi-
ble individual’’ means, subject to sub-
section (b), an individual who is lawfully 
present in a State in the United States 
(other than as a nonimmigrant described 
in a subparagraph (excluding subpara-
graphs (K), (T), (U), and (V)) of section 
101(a)(15) of the Immigration and Nation-
ality Act)— 
(A) who is enrolled under an Ex-
change-participating health benefits 
plan and is not enrolled under such 
plan as an employee (or dependent of 
an employee) through an employer 
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qualified health benefits plan that 
meets the requirements 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 
individual, other than an individual 
described in section 202(d)(3) or an in-
dividual 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 af-
fordable credit eligible individuals shall 
be treated as a single affordable credit in-
dividual eligible for the applicable credit 
for such a family under this subtitle. 
(b) LIMITATIONS ON EMPLOYEE AND DEPEND-
ENT DISQUALIFICATION.— 
(1) IN GENERAL.—Subject to paragraph 
(2), the term ‘‘affordable credit eligible in-
dividual’’ does not include a full-time em-
ployee of an employer if the employer of-
fers the employee coverage (for the em-
ployee and dependents) as a full-time em-
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ployee under a group health plan if the 
coverage 
and 
employer 
contribution 
under the plan meet the requirements of 
section 312. 
(2) EXCEPTIONS.— 
(A) 
FOR
CERTAIN
FAMILY
CIR-
CUMSTANCES.—The Commissioner shall 
establish such exceptions and special 
rules in the case described in para-
graph (1) as may be appropriate in 
the case of a divorced or separated in-
dividual or such a dependent of an 
employee who would otherwise be an 
affordable credit eligible individual. 
(B) FOR
UNAFFORDABLE
EMPLOYER 
COVERAGE.—For years beginning with 
Y2, in the case of full-time employees 
for which the cost of the employee pre-
mium (plus, to the extent specified by 
the Commissioner, out-of-pocket cost- 
sharing for such year or the preceding 
year) for coverage under a group 
health plan would exceed 11 percent 
of current family income (determined 
by the Commissioner on the basis of 
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verifiable documentation and without 
regard to section 245), paragraph (1) 
shall not apply. 
(c) INCOME DEFINED.— 
(1) IN GENERAL.—In this title, the term 
‘‘income’’ means modified adjusted gross 
income (as defined 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 dis-
regards for purposes of this subtitle. Not 
later than the first day of Y2, the Commis-
sioner shall submit to Congress a report 
on such study and shall include such rec-
ommendations as the Commissioner deter-
mines appropriate. 
(d) CLARIFICATION
OF TREATMENT
OF AF-
FORDABILITY
CREDITS.—Affordabilty 
credits 
under this subtitle shall not be treated, for 
purposes of title IV of the Personal Responsi-
bility and Work Opportunity Reconciliation 
Act of 1996, to be a benefit provided under sec-
tion 403 of such title. 
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SEC. 243. AFFORDABLE PREMIUM CREDIT. 
(a) IN GENERAL.—The affordability pre-
mium credit under this section for an afford-
able credit eligible individual enrolled in an 
Exchange-participating health benefits plan 
is in an amount equal to the amount (if any) 
by which the premium for the plan (or, if less, 
the reference premium amount specified in 
subsection (c)), exceeds the affordable pre-
mium amount specified in subsection (b) for 
the individual. 
(b) AFFORDABLE PREMIUM AMOUNT.— 
(1) IN
GENERAL.—The affordable pre-
mium 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 in-
dividual 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 estab-
lish premium percentage limits so that for 
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individuals whose family income is within 
an income tier specified in the table in 
subsection (d) such percentage limits 
shall increase, on a sliding scale in a lin-
ear manner, from the initial premium 
percentage to the final premium percent-
age specified in such table for such in-
come tier. 
(c) REFERENCE PREMIUM AMOUNT.—The ref-
erence premium amount specified in this sub-
section 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 computing such amount the Commissioner 
may exclude plans with extremely limited en-
rollments. 
(d) TABLE OF PREMIUM PERCENTAGE LIMITS 
AND ACTUARIAL VALUE PERCENTAGES BASED ON 
INCOME TIER.— 
(1) IN GENERAL.—For purposes of this 
subtitle, the table specified in this sub-
section is as follows: 
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In the case of fam-
ily income (ex-
pressed as a per-
cent of FPL) within 
the following in-
come tier: 
The initial 
premium 
percentage 
is— 
The final 
premium 
percentage 
is— 
The actu-
arial value 
percentage 
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 in-
come that does not exceed 133 percent 
of FPL, the individual shall be consid-
ered to have income that is 133% of 
FPL. 
(B) APPLICATION OF HIGHER ACTU-
ARIAL VALUE PERCENTAGE AT TIER TRAN-
SITION POINTS.—If two actuarial value 
percentages may be determined with 
respect to an individual, 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 afford-
able credit eligible individual enrolled in an 
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Exchange-participating health benefits plan 
is in the form of the cost-sharing reduction de-
scribed in subsection (b) provided under this 
section for the income tier in which the indi-
vidual is classified based on the individual’s 
family income. 
(b) COST-SHARING REDUCTIONS.—The Com-
missioner shall specify a reduction in cost- 
sharing amounts and the annual limitation 
on 
cost-sharing 
specified 
in 
section 
122(c)(2)(B) under a basic plan for each in-
come tier specified in the table under section 
243(d), with respect to a year, in a manner so 
that, as estimated by the Commissioner, the ac-
tuarial value of the coverage with such re-
duced cost-sharing amounts (and the reduced 
annual cost-sharing limit) is equal to the actu-
arial value percentage (specified in the table 
under section 243(d) for the income tier in-
volved) of the full actuarial value if there were 
no cost-sharing imposed under the plan. 
(c) DETERMINATION AND PAYMENT OF COST- 
SHARING AFFORDABILITY CREDIT.—In the case of 
an affordable credit eligible individual in a 
tier enrolled in an Exchange-participating 
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health benefits plan offered by a QHBP offer-
ing 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 reduc-
tion 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 section 242(c)) for 
the individual for the most recent taxable year 
(as determined in accordance with rules of the 
Commissioner). The Federal poverty level ap-
plied shall be such level in effect as of the date 
of the application. 
(b) 
PROGRAM
INTEGRITY; 
INCOME 
VERIFICATION PROCEDURES.— 
(1) PROGRAM INTEGRITY.—The Commis-
sioner shall take such steps as may be ap-
propriate to ensure the accuracy of deter-
minations and redeterminations under 
this subtitle. 
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(2) INCOME VERIFICATION.— 
(A) IN GENERAL.—Upon an initial 
application of an individual for an af-
fordability credit under this subtitle 
(or in applying section 242(b)) or upon 
an application for a change in the af-
fordability credit based upon a sig-
nificant change in family income de-
scribed in subparagraph (A)— 
(i) the Commissioner shall re-
quest from the Secretary of the 
Treasury the disclosure to the 
Commissioner of such information 
as may be permitted to verify the 
information contained in such ap-
plication; and 
(ii) the Commissioner shall 
use the information so disclosed to 
verify such information. 
(B) 
ALTERNATIVE
PROCEDURES.— 
The Commissioner shall establish pro-
cedures for the verification of income 
for purposes of this subtitle if no in-
come tax return is available for the 
most recent completed tax year. 
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(c) SPECIAL RULES.— 
(1) CHANGES IN INCOME AS A PERCENT 
OF FPL.—In the case that an individual’s 
income (expressed 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 es-
tablish rules requiring an individual to 
report, consistent with the mechanism es-
tablished under paragraph (2), signifi-
cant changes in such income (including a 
significant change in family composition) 
to the Commissioner and requiring the 
substitution of such income for the income 
otherwise applicable. 
(2) REPORTING OF SIGNIFICANT CHANGES 
IN
INCOME.—The Commissioner shall es-
tablish rules under which an individual 
determined to be an affordable credit eli-
gible individual would be required to in-
form the Commissioner when there is a 
significant change in the family income of 
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the individual (expressed as a percentage 
of the FPL for a family of the size in-
volved) and of the information regarding 
such change. Such mechanism shall pro-
vide for guidelines that specify the cir-
cumstances that qualify as a significant 
change, the verifiable information re-
quired to document such a change, and 
the process for submission of such infor-
mation. If the Commissioner receives new 
information from an individual regarding 
the family income of the individual,the 
Commissioner shall provide for a redeter-
mination of the individual’s eligibility to 
be an affordable credit eligible indi-
vidual. 
(3) TRANSITION FOR CHIP.—In the case 
of a child described in section 202(d)(2), 
the Commissioner 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 re-
cently determined before Y1 by the State 
under title XXI of the Social Security Act. 
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(4) STUDY OF GEOGRAPHIC VARIATION IN 
APPLICATION
OF
FPL.—The Commissioner 
shall examine the feasibility and implica-
tion 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 adjustment. 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 appro-
priate. 
(d) PENALTIES
FOR MISREPRESENTATION.— 
In the case of an individual intentionally mis-
represents family income 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 af-
fordable credit eligible individual when the 
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individual is not or in the amount of the af-
fordability 
credit 
exceeding 
the 
correct 
amount— 
(1) the individual is liable for repay-
ment of the amount of the improper af-
fordability credit; ;and 
(2) in the case of such an intentional 
misrepresentation or other egregious cir-
cumstances 
specified 
by 
the 
Commis-
sioner, the Commissioner may impose an 
additional penalty. 
SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED 
ALIENS. 
Nothing in this subtitle shall allow Fed-
eral payments for affordability credits on be-
half 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 extraordinary circumstances, a 
waiver of application of section 514 of the Em-
ployee Retirement Income Security Act of 1974 
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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 Secretary shall provide 
for the revocation of any waiver granted under 
this section upon a determination made by the 
Secretary that the requirements of the pre-
ceding 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 
Employee Retirement Income Security Act 
of 1974 shall not apply with respect to the 
State single payer system; 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 sub-
title shall be construed to limit or otherwise 
affect the transfer and allocation under this 
Act of funds to States with single payer sys-
tems. 
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SEC. 252. REQUIREMENTS. 
A State single payer system shall— 
(1) ) provide benefits that meet or ex-
ceed the standards of coverage and qual-
ity of care set forth in this Act; and 
(2) ensure that the cost to the Federal 
Government resulting from the waiver 
granted under section 261 is neither sub-
stantially greater nor substantially 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 construed to preclude allow-
ance for normal variations in popu-
lation demographics, health status, 
and other factors exogenous to the 
health care system that may affect dif-
ferences in costs. 
SEC. 253. DEFINITIONS. 
(a) STATE SINGLE PAYER SYSTEM.—The term 
‘‘State single payer system’’ means, in connec-
tion with a State, a non-profit program of the 
State for providing health care— 
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(1) in which a single agency of the 
State is responsible for financing health 
care benefits for all residents of the State 
and for the administration or supervision 
of the administration of the program; 
(2) under which private insurance du-
plicating the benefits provided in the sin-
gle payer program is prohibited; 
(3) 
which 
provides 
comprehensive 
health benefits to all residents of the 
State, and provides measures to assure 
free choice of providers for covered serv-
ices, to promote quality, and to help re-
solve complaints and disputes between 
consumers and providers; and 
(4) 
under 
which 
participation 
by 
health maintenance organizations is lim-
ited to non-profit health maintenance or-
ganizations that own their own delivery 
facilities and employ physicians on sal-
ary, and funding is limited to services 
that the health maintenance organiza-
tions actually deliver; and 
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(5) which may be maintained by such 
State together one or more other States in 
a geographic region. 
(b) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Labor, acting in con-
sultation with the Secretary of Health and 
Human Services. 
TITLE III—SHARED 
RESPONSIBILITY 
Subtitle A—Individual 
Responsibility 
SEC. 301. INDIVIDUAL RESPONSIBILITY. 
For an individual’s responsibility to ob-
tain acceptable coverage, see section 59B of the 
Internal Revenue Code of 1986 (as added by 
section 401 of this Act). 
Subtitle B—Employer Responsibility 
PART 1—HEALTH COVERAGE PARTICIPATION 
REQUIREMENTS 
SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIRE-
MENTS. 
(a) IN GENERAL.—An employer meets the re-
quirements of this section if such employer 
does all of the following: 
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(1) OFFER OF COVERAGE.—The employer 
offers each employee individual and fam-
ily coverage under a qualified health ben-
efits plan (or under a current employ-
ment-based health plan (within the mean-
ing of section 102(b))) in accordance with 
section 312. 
(2) 
CONTRIBUTION
TOWARDS
COV-
ERAGE.—If an employee accepts such offer 
of coverage, the employer makes timely 
contributions towards such coverage in 
accordance with section 312. 
(3) CONTRIBUTION
IN
LIEU
OF
COV-
ERAGE.—Beginning with Y2, if an employee 
declines such offer but otherwise obtains 
coverage in an Exchange-participating 
health benefits plan (other than by reason 
of being covered by family coverage as a 
spouse or dependent of the primary in-
sured), the employer shall make a timely 
contribution to the Health Insurance Ex-
change with respect to each such em-
ployee in accordance with section 313. 
(b) 
HARDSHIP
EXEMPTION.—Notwith-
standing any other provision of this part, an 
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employer may, in a form and manner which 
shall be prescribed by the Secretary, apply to 
the Secretary for a waiver from the health cov-
erage participation requirements of this part 
for any 2-year period. The Secretary shall 
grant the waiver within 30 days after submis-
sion of the application if the application rea-
sonably demonstrates to the Secretary that 
meeting the requirements of this part would 
result in job losses that would negatively im-
pact the employer or the community in which 
the employer is located. 
SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TO-
WARDS EMPLOYEE AND DEPENDENT COV-
ERAGE. 
(a) IN GENERAL.—An employer meets the re-
quirements of this section with respect to an 
employee if the following requirements are 
met: 
(1) OFFERING
OF
COVERAGE.—The em-
ployer offers the coverage described in sec-
tion 311(1) either through an Exchange- 
participating health benefits plan or 
other than through such a plan. 
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(2) 
EMPLOYER
REQUIRED
CONTRIBU-
TION.—The employer timely pays to the 
issuer of such coverage an amount not 
less than the employer required contribu-
tion specified in subsection (b) for such 
coverage. 
(3) PROVISION
OF
INFORMATION.—The 
employer provides the Health Choices 
Commissioner, the Secretary of Labor, the 
Secretary of Health and Human Services, 
and the Secretary of the Treasury, as ap-
plicable, with such information as the 
Commissioner may require to ascertain 
compliance with the requirements of this 
section. 
(4) AUTOENROLLMENT OF EMPLOYEES.— 
The employer provides for autoenrollment 
of the employee in accordance with sub-
section (c). 
(b) REDUCTION
OF
EMPLOYEE
PREMIUMS 
THROUGH MINIMUM EMPLOYER CONTRIBUTION.— 
(1) FULL-TIME
EMPLOYEES.—The min-
imum employer contribution described in 
this subsection for coverage of a full-time 
employee (and, if any, the employee’s 
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spouse and qualifying children (as de-
fined in section 152(c) of the Internal Rev-
enue Code of 1986) under a qualified 
health benefits plan (or current employ-
ment-based health plan) is equal to— 
(A) in case of individual coverage, 
not less than 72.5 percent of the appli-
cable premium (as defined in section 
4980B(f)(4) of such Code, subject to 
paragraph (2)) of the lowest cost plan 
offered by the employer that is a 
qualified health benefits plan (or is 
such 
current 
employment-based 
health plan); and 
(B) in the case of family coverage 
which 
includes 
coverage 
of 
such 
spouse and children, not less 65 per-
cent of such applicable premium of 
such lowest cost plan. 
(2) APPLICABLE PREMIUM FOR EXCHANGE 
COVERAGE.—In this subtitle, the amount of 
the applicable premium of the lowest cost 
plan with respect to coverage of an em-
ployee under an Exchange-participating 
health benefits plan is the reference pre-
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mium amount under section 243(c) for in-
dividual coverage (or, if elected, family 
coverage) for the premium rating area in 
which the individual or family resides. 
(3) MINIMUM
EMPLOYER
CONTRIBUTION 
FOR EMPLOYEES OTHER THAN FULL-TIME EM-
PLOYEES.—In the case of coverage for an 
employee who is not a full-time employee, 
the amount of the minimum employer con-
tribution under this subsection shall be a 
proportion (as determined in accordance 
with rules of the Health Choices Commis-
sioner, the Secretary of Labor, the Sec-
retary of Health and Human Services, 
and the Secretary of the Treasury, as ap-
plicable) of the minimum employer con-
tribution under this subsection with re-
spect to a full-time employee that reflects 
the proportion of— 
(A) the average weekly hours of 
employment of the employee by the em-
ployer, to 
(B) the minimum weekly hours 
specified by the Commissioner for an 
employee to be a full-time employee. 
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(4) SALARY REDUCTIONS NOT TREATED AS 
EMPLOYER
CONTRIBUTIONS.—For purposes 
of this section, any contribution on behalf 
of an employee with respect to which there 
is a corresponding reduction in the com-
pensation of the employee shall not be 
treated as an amount paid by the em-
ployer. 
(c) AUTOMATIC ENROLLMENT FOR EMPLOYER 
SPONSORED HEALTH BENEFITS.— 
(1) IN
GENERAL.—The requirement of 
this subsection with respect to an em-
ployer and an employee is that the em-
ployer automatically enroll suchs em-
ployee into the employment-based health 
benefits plan for individual coverage 
under the plan option with the lowest ap-
plicable employee premium. 
(2) OPT-OUT.—In no case may an em-
ployer automatically enroll an employee 
in a plan under paragraph (1) if such em-
ployee makes an affirmative election to 
opt out of such plan or to elect coverage 
under an employment-based health bene-
fits plan offered by such employer. An em-
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ployer shall provide an employee with a 
30-day period to make such an affirmative 
election before the employer may auto-
matically enroll the employee in such a 
plan. 
(3) NOTICE REQUIREMENTS.— 
(A) IN
GENERAL.—Each employer 
described in paragraph (1) who auto-
matically enrolls an employee into a 
plan as described in such paragraph 
shall provide the employees, within a 
reasonable period before the begin-
ning of each plan year (or, in the case 
of new employees, within a reasonable 
period before the end of the enroll-
ment period for such a new employee), 
written notice of the employees’ rights 
and obligations relating to the auto-
matic enrollment requirement under 
such paragraph. Such notice must be 
comprehensive and understood by the 
average employee to whom the auto-
matic enrollment requirement applies. 
(B) INCLUSION
OF
SPECIFIC
INFOR-
MATION.—The written notice under 
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subparagraph (A) must explain an 
employee’s right to opt out of being 
automatically enrolled in a plan and 
in the case that more than one level of 
benefits or employee premium level is 
offered by the employer involved, the 
notice must explain which level of 
benefits and employee premium level 
the employee will be automatically en-
rolled in the absence of an affirmative 
election by the employee. 
SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COV-
ERAGE. 
(a) IN GENERAL.—A contribution is made in 
accordance with this section with respect to an 
employee if such contribution is equal to an 
amount equal to 8 percent of the average 
wages paid by the employer during the period 
of enrollment (determined by taking into ac-
count all employees of the employer and in 
such manner as the Commissioner provides, 
including rules providing for the appropriate 
aggregation of related employers). Any such 
contribution— 
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(1) shall be paid to the Health Choices 
Commissioner for deposit into the Health 
Insurance Exchange Trust Fund, and 
(2) shall not be applied against the 
premium of the employee under the Ex-
change-participating health benefits plan 
in which the employee is enrolled. 
(b) SPECIAL RULES FOR SMALL EMPLOYERS.— 
(1) IN GENERAL.—In the case of any em-
ployer who is a small employer for any 
calendar year, subsection (a) shall be ap-
plied by substituting the applicable per-
centage 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 of such employer for 
the preceding calendar year does not ex-
ceed $400,000. 
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(3) ANNUAL PAYROLL.—For purposes of 
this paragraph, the term ‘‘annual pay-
roll’’ means, with respect to any employer 
for any calendar year, the aggregate 
wages paid by the employer during such 
calendar year. 
(4) AGGREGATION RULES.—Related em-
ployers and predecessors shall be treated 
as a single employer for purposes of this 
subsection. 
SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING. 
The Health Choices Commissioner (in co-
ordination with the Secretary of Labor, the 
Secretary of Health and Human Services, and 
the Secretary of the Treasury) shall have au-
thority to set standards for determining 
whether employers or insurers are under-
taking any actions to affect the risk pool with-
in the Health Insurance Exchange by inducing 
individuals to decline coverage under a quali-
fied health benefits plan (or current employ-
ment-based health plan (within the meaning 
of section 102(b)) offered by the employer and 
instead to enroll in an Exchange-participating 
health benefits plan. An employer violating 
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such standards shall be treated as not meeting 
the requirements of this section. 
PART 2—SATISFACTION OF HEALTH COVERAGE 
PARTICIPATION REQUIREMENTS 
SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICI-
PATION REQUIREMENTS UNDER THE EM-
PLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974. 
(a) IN GENERAL.—Subtitle B of title I of the 
Employee Retirement Income Security Act of 
1974 is amended by adding at the end the fol-
lowing new part: 
‘‘PART 8—NATIONAL HEALTH COVERAGE 
PARTICIPATION REQUIREMENTS 
‘‘SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NA-
TIONAL HEALTH COVERAGE PARTICIPATION 
REQUIREMENTS. 
‘‘(a) IN GENERAL.—An employer may make 
an election with the Secretary to be subject to 
the health coverage participation require-
ments. 
‘‘(b) TIME AND MANNER.—An election under 
subsection (a) may be made at such time and 
in such form and manner as the Secretary may 
prescribe. 
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‘‘SEC. 802. TREATMENT OF COVERAGE RESULTING FROM 
ELECTION. 
‘‘(a) IN GENERAL.—If an employer makes an 
election to the Secretary under section 801— 
‘‘(1) such election shall be treated as 
the establishment and maintenance of a 
group health plan (as defined in section 
733(a)) for purposes of this title, subject to 
section 151 of the America’s Affordable 
Health Choices Act of 2009, and 
‘‘(2) the health coverage participation 
requirements shall be deemed to be in-
cluded as terms and conditions of such 
plan. 
‘‘(b) PERIODIC INVESTIGATIONS TO DISCOVER 
NONCOMPLIANCE.—The Secretary shall regu-
larly audit a representative sampling of em-
ployers and group health plans and conduct 
investigations and other activities under sec-
tion 504 with respect to such sampling of plans 
so as to discover noncompliance with the 
health coverage participation requirements in 
connection with such plans. The Secretary 
shall communicate findings of noncompliance 
made by the Secretary under this subsection to 
the Secretary of the Treasury and the Health 
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Choices Commissioner. The Secretary shall 
take such timely enforcement action as appro-
priate to achieve compliance. 
‘‘(c) RECORDKEEPING.—To facilitate the au-
dits described in subsection (b), the Secretary 
shall promulgate recordkeeping requirements 
for employers to account for both employees of 
the employer and individuals whom the em-
ployer has not treated as employees of the em-
ployer but with whom the employer, in the 
course of the trade or business in which the 
employer is engaged, has engaged for the per-
formance of labor or services. 
‘‘SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIRE-
MENTS. 
‘‘For purposes of this part, the term ‘health 
coverage participation requirements’ means 
the requirements of part 1 of subtitle B of title 
III of division A of America’s Affordable 
Health Choices Act of 2009 (as in effect on the 
date of the enactment of such Act). 
‘‘SEC. 804. RULES FOR APPLYING REQUIREMENTS. 
‘‘(a) AFFILIATED GROUPS.—In the case of 
any employer which is part of a group of em-
ployers who are treated as a single employer 
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under subsection (b), (c), (m), or (o) of section 
414 of the Internal Revenue Code of 1986, the 
election under section 801 shall be made by 
such employer as the Secretary may provide. 
Any such election, once made, shall apply to 
all members of such group. 
‘‘(b) SEPARATE ELECTIONS.—Under regula-
tions prescribed by the Secretary, separate 
elections may be made under section 801 with 
respect to— 
‘‘(1) separate lines of business, and 
‘‘(2) full-time employees and employees 
who are not full-time employees. 
‘‘SEC. 805. TERMINATION OF ELECTION IN CASES OF SUB-
STANTIAL NONCOMPLIANCE. 
‘‘The Secretary may terminate the election 
of any employer under section 801 if the Sec-
retary (in coordination with the Health 
Choices Commissioner) determines that such 
employer is in substantial noncompliance with 
the health coverage participation require-
ments and shall refer any such determination 
to the Secretary of the Treasury as appro-
priate. 
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‘‘SEC. 806. REGULATIONS. 
‘‘The Secretary may promulgate such regu-
lations as may be necessary or appropriate to 
carry out the provisions of this part, in accord-
ance with section 324(a) of the America’s Af-
fordable Health Choices Act of 2009. The Sec-
retary may promulgate any interim final rules 
as the Secretary determines are appropriate to 
carry out this part.’’. 
(b) ENFORCEMENT
OF
HEALTH
COVERAGE 
PARTICIPATION REQUIREMENTS.—Section 502 of 
such Act (29 U.S.C. 1132) is amended— 
(1) in subsection (a)(6), by striking 
‘‘paragraph’’ and all that follows through 
‘‘subsection (c)’’ and inserting ‘‘paragraph 
(2), (4), (5), (6), (7), (8), (9), (10), or (11) of 
subsection (c)’’; and 
(2) in subsection (c), by redesignating 
the second paragraph (10) as paragraph 
(12) and by inserting after the first para-
graph (10) the following new paragraph: 
‘‘(11) HEALTH COVERAGE PARTICIPATION 
REQUIREMENTS.— 
‘‘(A) CIVIL PENALTIES.—In the case 
of any employer who fails (during any 
period with respect to which an elec-
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tion under section 801(a) is in effect) 
to satisfy the health coverage partici-
pation requirements with respect to 
any employee, the Secretary may as-
sess a civil penalty against the em-
ployer of $100 for each day in the pe-
riod beginning on the date such fail-
ure first occurs and ending on the 
date such failure is corrected. 
‘‘(B) HEALTH COVERAGE PARTICIPA-
TION REQUIREMENTS.—For purposes of 
this paragraph, the term ‘health cov-
erage participation requirements’ has 
the meaning provided in section 803. 
‘‘(C) LIMITATIONS
ON
AMOUNT
OF 
PENALTY.— 
‘‘(i) PENALTY
NOT
TO
APPLY 
WHERE FAILURE NOT DISCOVERED EX-
ERCISING REASONABLE DILIGENCE.— 
No 
penalty 
shall 
be 
assessed 
under subparagraph (A) with re-
spect to any failure during any pe-
riod for which it is established to 
the satisfaction of the Secretary 
that the employer did not know, or 
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exercising 
reasonable 
diligence 
would not have known, that such 
failure existed. 
‘‘(ii) PENALTY NOT TO APPLY TO 
FAILURES
CORRECTED
WITHIN
DAYS.—No penalty shall be as-
sessed under subparagraph (A) 
with respect to any failure if— 
‘‘(I) such failure was due 
to reasonable cause and not to 
willful neglect, and 
‘‘(II) such failure is cor-
rected during the 30-day pe-
riod beginning on the 1st date 
that the employer knew, or ex-
ercising reasonable diligence 
would have known, that such 
failure existed. 
‘‘(iii) OVERALL LIMITATION FOR 
UNINTENTIONAL
FAILURES.—In the 
case of failures which are due to 
reasonable cause and not to will-
ful neglect, the penalty assessed 
under subparagraph (A) for fail-
ures during any 1-year period 
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shall not exceed the amount equal 
to the lesser of— 
‘‘(I) 10 percent of the ag-
gregate amount paid or in-
curred by the employer (or 
predecessor employer) during 
the preceding 1-year period for 
group health plans, or 
‘‘(II) $500,000. 
‘‘(D) 
ADVANCE
NOTIFICATION
OF 
FAILURE PRIOR TO ASSESSMENT.—Before 
a reasonable time prior to the assess-
ment of any penalty under this para-
graph with respect to any failure by 
an employer, the Secretary shall in-
form the employer in writing of such 
failure and shall provide the employer 
information 
regarding 
efforts 
and 
procedures which may be undertaken 
by the employer to correct such fail-
ure. 
‘‘(E) COORDINATION
WITH
EXCISE 
TAX.—Under regulations prescribed in 
accordance with section 324 of the 
America’s Affordable Health Choices 
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Act of 2009, the Secretary and the Sec-
retary of the Treasury shall coordi-
nate the assessment of penalties under 
this section in connection with fail-
ures to satisfy health coverage partici-
pation requirements with the imposi-
tion of excise taxes on such failures 
under section 4980H(b) of the Internal 
Revenue Code of 1986 so as to avoid 
duplication of penalties with respect 
to such failures. 
‘‘(F) DEPOSIT
OF
PENALTY
COL-
LECTED.—Any amount of penalty col-
lected under this paragraph shall be 
deposited as miscellaneous receipts in 
the Treasury of the United States.’’. 
(c) CLERICAL AMENDMENTS.—The table of 
contents in section 1 of such Act is amended 
by inserting after the item relating to section 
734 the following new items: 
‘‘PART 8—NATIONAL HEALTH COVERAGE PARTICIPATION 
REQUIREMENTS 
‘‘Sec. 801. Election of employer to be subject to national health 
coverage participation requirements. 
‘‘Sec. 802. Treatment of coverage resulting from election. 
‘‘Sec. 803. Health coverage participation requirements. 
‘‘Sec. 804. Rules for applying requirements. 
‘‘Sec. 805. Termination of election in cases of substantial non-
compliance. 
‘‘Sec. 806. Regulations.’’. 
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(d) EFFECTIVE
DATE.—The amendments 
made by this section shall apply to periods be-
ginning after December 31, 2012. 
ƒFor sections 322 and 323, see text of bill 
as introduced on July 14, 2009.≈ 
SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COV-
ERAGE PARTICIPATION REQUIREMENTS. 
(a) ASSURING COORDINATION.—The officers 
consisting of the Secretary of Labor, the Sec-
retary of the Treasury, the Secretary of Health 
and Human Services, and the Health Choices 
Commissioner shall ensure, through the execu-
tion of an interagency memorandum of under-
standing among such officers, that— 
(1) regulations, rulings, and interpre-
tations issued by such officers relating to 
the same matter over which two or more 
of such officers have responsibility under 
subpart B of part 6 of subtitle B of title I 
of the Employee Retirement Income Secu-
rity Act of 1974, section 4980H of the Inter-
nal Revenue Code of 1986, and section 
2793 of the Public Health Service Act are 
administered so as to have the same effect 
at all times; and 
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(2) coordination of policies relating to 
enforcing the same requirements through 
such officers in order to have a coordi-
nated enforcement strategy that avoids 
duplication of enforcement efforts and as-
signs priorities in enforcement. 
(b) MULTIEMPLOYER PLANS.—In the case of 
a group health plan that is a multiemployer 
plan (as defined in section 3(37) of the Em-
ployee Retirement Income Security Act of 
1974), the regulations prescribed in accord-
ance with subsection (a) by the officers re-
ferred to in subsection (a) shall provide for the 
application of the health coverage participa-
tion requirements to the plan sponsor and con-
tributing sponsors of such plan. 
DIVISION B—MEDICARE AND 
MEDICAID IMPROVEMENTS 
ƒFor division B, see text of bill as intro-
duced on July 14, 2009.≈ 
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DIVISION 
C—PUBLIC 
HEALTH 
AND WORKFORCE DEVELOP-
MENT 
SEC. 2001. TABLE OF CONTENTS; REFERENCES. 
(a) TABLE OF CONTENTS.—The table of con-
tents of this division is as follows: 
Sec. 2001. Table of contents; references. 
[For section 2002, see text of introduced bill.] 
[FOR TEXT OF TITLES I THROUGH IV, SEE TEXT OF 
INTRODUCED BILL.] 
TITLE V—OTHER PROVISIONS 
[For Subtitles A, B, and C, See Text of Introduced Bill.] 
Subtitle D—Grants for Comprehensive Programs to Provide 
Education to Nurses and Create a Pipeline to Nursing 
[For Subtitle E, See Text of Introduced Bill.] 
Sec. 2531. Establishment of grant program. 
Subtitle F—Standards for Accessibility to Medical Equipment 
for Individuals With Disabilities. 
Sec. 2541. Access for individuals with disabilities. 
Subtitle G—Other Grant Programs 
Sec. 2551. Reducing student-to-school nurse ratios. 
Sec. 2552. Wellness program grants. 
Sec. 2553. Health professions training for diversity programs. 
Subtitle H—Long-term Care and Family Caregiver Support 
Sec. 2561. Long-term care and family caregiver support. 
Subtitle I—Online Resources 
Sec. 2571. Web site on health care labor market and related edu-
cational and training opportunities. 
Sec. 2572. Online health workforce training programs. 
(b) 
REFERENCES.—Except 
as 
otherwise 
specified, whenever in this division an amend-
ment is expressed in terms of an amendment 
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to a section or other provision, the reference 
shall be considered to be made to a section or 
other provision of the Public Health Service 
Act (42 U.S.C. 201 et seq.) 
ƒFor section 2002 and titles I through IV 
of division C, see text of bill as introduced on 
July 14, 2009.≈ 
TITLE V—OTHER PROVISIONS 
ƒFor subtitles A through C of title V of di-
vision C, see text of bill as introduced on July 
14, 2009.≈ 
Subtitle D—Grants for Comprehen-
sive Programs to Provide Edu-
cation to Nurses and Create a 
Pipeline to Nursing 
SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM. 
(a) PURPOSES.—It is the purpose of this sec-
tion to authorize grants to— 
(1) address the projected shortage of 
nurses by funding comprehensive pro-
grams to create a career ladder to nurs-
ing (including Certified Nurse Assistants, 
Licensed Practical Nurses, Licensed Voca-
tional Nurses, and Registered Nurses) for 
incumbent ancillary health care workers; 
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(2) increase the capacity for educating 
nurses by increasing both nurse faculty 
and clinical opportunities through col-
laborative programs between staff nurse 
organizations, health care providers, and 
accredited schools of nursing; and 
(3) 
provide 
training 
programs 
through education and training organiza-
tions jointly administered by health care 
providers and health care labor organiza-
tions or other organizations representing 
staff nurses and frontline health care 
workers, working in collaboration with 
accredited schools of nursing and aca-
demic institutions. 
(b) GRANTS.—Not later than 6 months after 
the date of the enactment of this Act, the Sec-
retary of Labor (referred to in this section as 
the ‘‘Secretary’’) shall establish a partnership 
grant program to award grants to eligible en-
tities to carry out comprehensive programs to 
provide education to nurses and create a pipe-
line to nursing for incumbent ancillary health 
care workers who wish to advance their ca-
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reers, and to otherwise carry out the purposes 
of this section. 
(c) ELIGIBILITY.—To be eligible for a grant 
under this section, an entity shall be— 
(1) a health care entity that is jointly 
administered by a health care employer 
and a labor union representing the health 
care employees of the employer and that 
carries out activities using labor manage-
ment training funds as provided for 
under section 302(c)(6) of the Labor Man-
agement Relations Act, 1947 (29 U.S.C. 
186(c)(6)); 
(2) an entity that operates a training 
program that is jointly administered by— 
(A) one or more health care pro-
viders or facilities, or a trade associa-
tion of health care providers; and 
(B) one or more organizations 
which represent the interests of direct 
care health care workers or staff 
nurses and in which the direct care 
health care workers or staff nurses 
have direct input as to the leadership 
of the organization; 
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(3) a State training partnership pro-
gram that consists of nonprofit organiza-
tions that include equal participation 
from industry, including public or private 
employers, and labor organizations in-
cluding joint labor-management training 
programs, and which may include rep-
resentatives 
from 
local 
governments, 
worker investment agency one-stop career 
centers, community-based organizations, 
community 
colleges, 
and 
accredited 
schools of nursing; or 
(4) a school of nursing (as defined in 
section 801 of the Public Health Service 
Act (42 U.S.C. 296)). 
(d) ADDITIONAL REQUIREMENTS FOR HEALTH 
CARE
EMPLOYER
DESCRIBED
IN
SUBSECTION 
(c).—To be eligible for a grant under this sec-
tion, a health care employer described in sub-
section (c) shall demonstrate that it— 
(1) has an established program within 
their facility to encourage the retention of 
existing nurses; 
(2) provides wages and benefits to its 
nurses that are competitive for its market 
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or that have been collectively bargained 
with a labor organization; and 
(3) supports programs funded under 
this section through 1 or more of the fol-
lowing: 
(A) The provision of paid leave 
time and continued health coverage to 
incumbent health care workers to 
allow their participation in nursing 
career ladder programs, including 
certified nurse assistants, licensed 
practical nurses, licensed vocational 
nurses, and registered nurses. 
(B) Contributions to a joint labor- 
management training fund which ad-
ministers the program involved. 
(C) The provision of paid release 
time, incentive compensation, or con-
tinued health coverage to staff nurses 
who desire to work full- or part-time 
in a faculty position. 
(D) The provision of paid release 
time for staff nurses to enable them to 
obtain a bachelor of science in nurs-
ing degree, other advanced nursing 
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degrees, specialty training, or certifi-
cation program. 
(E) The payment of tuition assist-
ance which is managed by a joint 
labor-management training fund or 
other jointly administered program. 
(e) OTHER REQUIREMENTS.— 
(1) MATCHING REQUIREMENT.— 
(A) IN
GENERAL.—The Secretary 
may not make a grant under this sec-
tion unless the applicant involved 
agrees, with respect to the costs to be 
incurred by the applicant in carrying 
out the program under the grant, to 
make available non-Federal contribu-
tions (in cash or in kind under sub-
paragraph (B)) toward such costs in 
an amount equal to not less than $1 
for each $1 of Federal funds provided 
in the grant. Such contributions may 
be made directly or through donations 
from public or private entities, or may 
be provided through the cash equiva-
lent of paid release time provided to 
incumbent worker students. 
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(B) DETERMINATION OF AMOUNT OF 
NON-FEDERAL CONTRIBUTION.—Non-Fed-
eral contributions required in sub-
paragraph (A) may be in cash or in 
kind (including paid release time), 
fairly evaluated, including equipment 
or services (and excluding indirect or 
overhead costs). Amounts provided by 
the Federal Government, or services 
assisted or subsidized to any signifi-
cant extent by the Federal Govern-
ment, may not be included in deter-
mining the amount of such non-Fed-
eral contributions. 
(2) REQUIRED
COLLABORATION.—Enti-
ties carrying out or overseeing programs 
carried 
out 
with 
assistance 
provided 
under this section shall demonstrate col-
laboration with accredited schools of 
nursing which may include community 
colleges and other academic institutions 
providing associate, bachelor’s, or ad-
vanced nursing degree programs or spe-
cialty training or certification programs. 
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(f) USE OF FUNDS.—Amounts awarded to an 
entity under a grant under this section shall 
be used for the following: 
(1) To carry out programs that pro-
vide education and training to establish 
nursing career ladders to educate incum-
bent health care workers to become nurses 
(including certified nurse assistants, li-
censed practical nurses, licensed voca-
tional nurses, and registered nurses). 
Such programs shall include one or more 
of the following: 
(A) Preparing incumbent workers 
to return to the classroom through 
English -as-a-second language edu-
cation, GED education, pre-college 
counseling, college preparation class-
es, and support with entry level col-
lege classes that are a prerequisite to 
nursing. 
(B) Providing tuition assistance 
with preference for dedicated cohort 
classes in community colleges, univer-
sities, accredited schools of nursing 
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with supportive services including tu-
toring and counseling. 
(C) Providing assistance in pre-
paring for and meeting all nursing li-
censure tests and requirements. 
(D) Carrying out orientation and 
mentorship 
programs 
that 
assist 
newly graduated nurses in adjusting 
to working at the bedside to ensure 
their retention postgraduation, and 
ongoing programs to support nurse re-
tention. 
(E) Providing stipends for release 
time and continued health care cov-
erage to enable incumbent health care 
workers to participate in these pro-
grams. 
(2) To carry out programs that assist 
nurses in obtaining advanced degrees and 
completing specialty training or certifi-
cation programs and to establish incen-
tives for nurses to assume nurse faculty 
positions on a part-time or full-time basis. 
Such programs shall include one or more 
of the following: 
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(A) Increasing the pool of nurses 
with advanced degrees who are inter-
ested in teaching by funding pro-
grams that enable incumbent nurses 
to return to school. 
(B) Establishing incentives for ad-
vanced degree bedside nurses who 
wish to teach in nursing programs so 
they can obtain a leave from their 
bedside position to assume a full- or 
part-time position as adjunct or full- 
time faculty without the loss of salary 
or benefits. 
(C) Collaboration with accredited 
schools of nursing which may include 
community colleges and other aca-
demic 
institutions 
providing 
asso-
ciate, bachelor’s, or advanced nursing 
degree programs, or specialty training 
or certification programs, for nurses 
to carry out innovative nursing pro-
grams which meet the needs of bed-
side nursing and health care pro-
viders. 
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(g) 
PREFERENCE.—In 
awarding 
grants 
under this section the Secretary shall give 
preference to programs that— 
(1) provide for improving nurse reten-
tion; 
(2) provide for improving the diversity 
of the new nurse graduates to reflect 
changes in the demographics of the pa-
tient population; 
(3) provide for improving the quality 
of nursing education to improve patient 
care and safety; 
(4) have demonstrated success in up-
grading incumbent health care workers to 
become nurses or which have established 
effective programs or pilots to increase 
nurse faculty; or 
(5) are modeled after or affiliated 
with such programs described in para-
graph (4). 
(h) EVALUATION.— 
(1) PROGRAM EVALUATIONS.—An entity 
that receives a grant under this section 
shall annually evaluate, and submit to 
the Secretary a report on, the activities 
VerDate Nov 24 2008 
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