(iii) The coverage does not discrimi-
nate, through underwriting, the imposition 
of a pre-existing condition exclusion (as de-
fined in section 701(b)(1)(A) of the Em-
ployee Retirement Income Security Act of 
1974 or section 9801(b)(1)(A) of the In-
ternal Revenue Code of 1986), differential 
benefits, differential premiums, or other-
wise, against an employee or dependent on 
the basis of health status. 
(iv) The Secretary determines that the 
coverage provided to employees is coordi-
nated, in accordance with regulations pre-
scribed by the Secretary, with other cov-
erage provided under governmental health 
benefits programs under which health ben-
efits coverage is available to such employ-
ees. 
(B) 
STANDARDS
FOR
PARTICIPATING 
HEALTH INSURERS.—In administering the pro-
gram, the Secretary shall promote participation 
by health insurers that establish— 
(i) integration of health information 
technology tools to promote quality; 
(ii) chronic disease management; 
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(iii) preventive health care services; 
and 
(iv) evidence-based medicine consider-
ations of prescription drugs and other 
treatment that take into account the indi-
vidual medical circumstances of individuals 
enrolled in the program. 
(5) ENROLLMENT.—In administering the pro-
gram, the Secretary shall provide that employee en-
rollment (and changes in enrollment) are limited to 
an annual open enrollment period, except in the case 
of qualifying events (such as change in family sta-
tus) specified by the Secretary and consistent with 
section 701(f) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1181(f)). 
(c) PREMIUM ASSISTANCE.—Under the SBHBP, the 
Secretary shall establish a program of premium assistance 
for small employers. Such program shall provide for a slid-
ing scale of assistance to such employers taking into ac-
count the following: 
(1) The number of employees of the employer. 
(2) The average wage level of such employees 
relative to the average wage level for employees in 
the same geographic area. 
(3) The profit margin of the employer. 
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(d) REINSURANCE FOR CATASTROPHIC COSTS FOR 
CERTAIN HEALTH INSURANCE ISSUERS.— 
(1) IN GENERAL.—In the case of health insur-
ance coverage offered under the SBHBP by a health 
insurance issuer that participates in a qualified 
health pooling arrangement, the Secretary shall pro-
vide for reinsurance coverage for 75 percent of cov-
ered claims that exceed, for an individual for a year, 
an amount determined by the Secretary for such 
year which is not less than the minimum amount 
specified in paragraph (2). 
(2) MINIMUM AMOUNT.—The minimum amount 
specified in this paragraph is— 
(A) for the first year in which this section 
is in effect, $100,000; or 
(B) for a subsequent year is the minimum 
amount specified in this paragraph for a pre-
vious year, increased by the Secretary’s esti-
mate of the average annual percentage increase 
in health insurance coverage with a median 
level of premiums for the previous year. 
Any amount determined under subparagraph (B) 
which is not a multiple of $1,000 shall be rounded 
to the nearest multiple of $1,000. 
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(e) QUALIFIED HEALTH POOLING ARRANGEMENT.— 
For purposes of this section, the term ‘‘qualified health 
pooling arrangement’’ means, with respect to employees 
employed in any State for any year— 
(1) except as provided in subparagraph (B), an 
arrangement established by (and operating under 
the oversight of) such State for purposes of this sec-
tion, in accordance with regulations of the Secretary, 
which provides for pooling of health insurance cov-
erage offered for such year in such State, and 
(2) in any case in which there is not in effect 
for any year an arrangement described in subpara-
graph (A) established by such State, the national 
health pooling arrangement established under sec-
tion 3. 
The Secretary shall determine, within a reasonable time 
prior to each year, whether there is a qualified health pool-
ing arrangement described in paragraph (1) with respect 
to employees employed in any State. 
(f) SMALL EMPLOYER DEFINED.— 
(1) IN GENERAL.—For purposes of this Act, ex-
cept as otherwise provided in this subsection, the 
term ‘‘small employer’’ means an employer with 50 
or fewer employees, as determined under regulations 
promulgated by the Secretary. 
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