1077 
(D) utilization review by a health care pro-
vider, the patient’s insurance provider or the 
agent of either; 
(E) health care research; or 
(F) as otherwise provided by law. 
(2) COMMERCIAL PURPOSE.—For purposes of 
paragraph (1), the term ‘‘commercial purpose’’ in-
cludes, but is not limited to, advertising, marketing, 
promotion, or any activity that could be used to in-
fluence sales or market share of a pharmaceutical 
product, influence or evaluate the prescribing behav-
ior of an individual health care professional, or 
evaluate the effectiveness of a professional pharma-
ceutical detailing sales force. 
(c) CONSTRUCTION.— 
(1) PERMITTED PRACTICES.—Nothing in this 
section shall prohibit— 
(A) the dispensing of prescription medica-
tions to a patient or to the patient’s authorized 
representative; 
(B) the transmission of prescription infor-
mation between an authorized prescriber and a 
licensed pharmacy; 
(C) the transfer of prescription informa-
tion between licensed pharmacies; 
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(D) the transfer of prescription records 
that may occur in the event a pharmacy owner-
ship is changed or transferred; 
(E) care management educational commu-
nications provided to a patient about the pa-
tient’s health condition, adherence to a pre-
scribed course of therapy, or other information 
about the drug being dispensed, treatment op-
tions, or clinical trials. 
(2) DE-IDENTIFIED
DATA.—Nothing in this 
section shall prohibit the collection, use, transfer, or 
sale of patient and prescriber de-identified data by 
zip code, geographic region, or medical specialty for 
commercial purposes. 
Subtitle E—Governance 
SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH 
CHOICES COMMISSIONER. 
(a) IN GENERAL.—There is hereby established, as an 
independent agency in the executive branch of the Govern-
ment, a Health Choices Administration (in this subdivision 
referred to as the ‘‘Administration’’). 
(b) COMMISSIONER.— 
(1) IN GENERAL.—The Administration shall be 
headed by a Health Choices Commissioner (in this 
subdivision referred to as the ‘‘Commissioner’’) who 
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shall be appointed by the President, by and with the 
advice and consent of the Senate. 
(2) COMPENSATION; ETC.—The provisions of 
paragraphs (2), (5) and (7) of subsection (a) (relat-
ing to compensation, terms, general powers, rule-
making, and delegation) of section 702 of the Social 
Security Act (42 U.S.C. 902) shall apply to the 
Commissioner and the Administration in the same 
manner as such provisions apply to the Commis-
sioner of Social Security and the Social Security Ad-
ministration. 
SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER. 
(a) DUTIES.—The Commissioner is responsible for 
carrying out the following functions under this subdivi-
sion: 
(1) QUALIFIED PLAN STANDARDS.—The estab-
lishment of qualified health benefits plan standards 
under this title, including the enforcement of such 
standards in coordination with State insurance regu-
lators and the Secretaries of Labor and the Treas-
ury. 
(2) HEALTH INSURANCE EXCHANGE.—The es-
tablishment and operation of a Health Insurance 
Exchange under subtitle A of title II. 
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(3) INDIVIDUAL
AFFORDABILITY
CREDITS.— 
The administration of individual affordability credits 
under subtitle C of title II, including determination 
of eligibility for such credits. 
(4) ADDITIONAL FUNCTIONS.—Such additional 
functions as may be specified in this subdivision. 
(b) PROMOTING ACCOUNTABILITY.— 
(1) IN GENERAL.—The Commissioner shall un-
dertake activities in accordance with this subtitle to 
promote accountability of QHBP offering entities in 
meeting Federal health insurance requirements, re-
gardless of whether such accountability is with re-
spect to qualified health benefits plans offered 
through the Health Insurance Exchange or outside 
of such Exchange. 
(2) COMPLIANCE EXAMINATION AND AUDITS.— 
(A) 
IN
GENERAL.—The 
commissioner 
shall, in coordination with States, conduct au-
dits of qualified health benefits plan compliance 
with Federal requirements.
Such audits may 
include random compliance audits and targeted 
audits in response to complaints or other sus-
pected non-compliance. 
(B) RECOUPMENT OF COSTS IN CONNEC-
TION
WITH
EXAMINATION
AND
AUDITS.—The 
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Commissioner is authorized to recoup from 
qualified health benefits plans reimbursement 
for the costs of such examinations and audit of 
such QHBP offering entities. 
(c) DATA COLLECTION.—The Commissioner shall 
collect data for purposes of carrying out the Commis-
sioner’s duties, including for purposes of promoting qual-
ity and value, protecting consumers, and addressing dis-
parities in health and health care and may share such data 
with the Secretary of Health and Human Services. 
(d) SANCTIONS AUTHORITY.— 
(1) IN GENERAL.—In the case that the Com-
missioner determines that a QHBP offering entity 
violates a requirement of this title, the Commis-
sioner may, in coordination with State insurance 
regulators and the Secretary of Labor, provide, in 
addition to any other remedies authorized by law, 
for any of the remedies described in paragraph (2). 
(2) REMEDIES.—The remedies described in this 
paragraph, with respect to a qualified health benefits 
plan offered by a QHBP offering entity, are— 
(A) civil money penalties of not more than 
the amount that would be applicable under 
similar circumstances for similar violations 
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under section 1857(g) of the Social Security 
Act; 
(B) suspension of enrollment of individuals 
under such plan after the date the Commis-
sioner notifies the entity of a determination 
under paragraph (1) and until the Commis-
sioner is satisfied that the basis for such deter-
mination has been corrected and is not likely to 
recur; 
(C) in the case of an Exchange-partici-
pating health benefits plan, suspension of pay-
ment to the entity under the Health Insurance 
Exchange for individuals enrolled in such plan 
after the date the Commissioner notifies the en-
tity of a determination under paragraph (1) 
and until the Secretary is satisfied that the 
basis for such determination has been corrected 
and is not likely to recur; or 
(D) working with State insurance regu-
lators to terminate plans for repeated failure by 
the offering entity to meet the requirements of 
this title. 
(e) STANDARD DEFINITIONS
OF INSURANCE
AND 
MEDICAL TERMS.—The Commissioner shall provide for 
the development of standards for the definitions of terms 
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used in health insurance coverage, including insurance-re-
lated terms. 
(f) EFFICIENCY IN ADMINISTRATION.—The Commis-
sioner shall issue regulations for the effective and efficient 
administration of the Health Insurance Exchange and af-
fordability credits under subtitle C, including, with respect 
to the determination of eligibility for affordability credits, 
the use of personnel who are employed in accordance with 
the requirements of title 5, United States Code, to carry 
out the duties of the Commissioner or, in the case of sec-
tions 208 and 241(b)(2), the use of State personnel who 
are employed in accordance with standards prescribed by 
the Office of Personnel Management pursuant to section 
208 of the Intergovernmental Personnel Act of 1970 (42 
U.S.C. 4728). 
SEC. 143. CONSULTATION AND COORDINATION. 
(a) CONSULTATION.—In carrying out the Commis-
sioner’s duties under this subdivision, the Commissioner, 
as appropriate, shall consult with at least with the fol-
lowing: 
(1) The National Association of Insurance 
Commissioners, State attorneys general, and State 
insurance regulators, including concerning the 
standards for insured qualified health benefits plans 
under this title and enforcement of such standards. 
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(2) Appropriate State agencies, specifically con-
cerning the administration of individual affordability 
credits under subtitle C of title II and the offering 
of Exchange-participating health benefits plans, to 
Medicaid eligible individuals under subtitle A of such 
title. 
(3) Other appropriate Federal agencies. 
(4) Indian tribes and tribal organizations. 
(5) The National Association of Insurance 
Commissioners for purposes of using model guide-
lines established by such association for purposes of 
subtitles B and D. 
(b) COORDINATION.— 
(1) IN GENERAL.—In carrying out the func-
tions of the Commissioner, including with respect to 
the enforcement of the provisions of this subdivision, 
the Commissioner shall work in coordination with 
existing Federal and State entities to the maximum 
extent feasible consistent with this subdivision and 
in a manner that prevents conflicts of interest in du-
ties and ensures effective enforcement. 
(2) UNIFORM STANDARDS.—The Commissioner, 
in coordination with such entities, shall seek to 
achieve uniform standards that adequately protect 
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consumers in a manner that does not unreasonably 
affect employers and insurers. 
SEC. 144. HEALTH INSURANCE OMBUDSMAN. 
(a) IN GENERAL.—The Commissioner shall appoint 
within the Health Choices Administration a Qualified 
Health Benefits Plan Ombudsman who shall have exper-
tise and experience in the fields of health care and edu-
cation of (and assistance to) individuals. 
(b) DUTIES.—The Qualified Health Benefits Plan 
Ombudsman shall, in a linguistically appropriate man-
ner— 
(1) receive complaints, grievances, and requests 
for information submitted by individuals; 
(2) provide assistance with respect to com-
plaints, grievances, and requests referred to in para-
graph (1), including— 
(A) helping individuals determine the rel-
evant information needed to seek an appeal of 
a decision or determination; 
(B) assistance to such individuals with any 
problems arising from disenrollment from such 
a plan; 
(C) assistance to such individuals in choos-
ing a qualified health benefits plan in which to 
enroll; and 
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(D) assistance to such individuals in pre-
senting information under subtitle C (relating 
to affordability credits); 
(3) consult with educated patients and con-
sumer advocates (described in section 123(a)(5)); 
and 
(4) submit annual reports to Congress and the 
Commissioner that describe the activities of the Om-
budsman and that include such recommendations for 
improvement in the administration of this subdivi-
sion as the Ombudsman determines appropriate. The 
Ombudsman shall not serve as an advocate for any 
increases in payments or new coverage of services, 
but may identify issues and problems in payment or 
coverage policies. 
Subtitle F—Relation to Other 
Requirements; Miscellaneous 
SEC. 151. RELATION TO OTHER REQUIREMENTS. 
(a) COVERAGE
NOT
OFFERED
THROUGH
EX-
CHANGE.— 
(1) IN GENERAL.—In the case of health insur-
ance coverage not offered through the Health Insur-
ance Exchange (whether or not offered in connection 
with an employment-based health plan), and in the 
case of employment-based health plans, the require-
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ments of this title do not supercede any require-
ments applicable under titles XXII and XXVII of 
the Public Health Service Act, parts 6 and 7 of sub-
title B of title I of the Employee Retirement Income 
Security Act of 1974, or State law, except insofar as 
such requirements prevent the application of a re-
quirement of this subdivision, as determined by the 
Commissioner. 
(2) CONSTRUCTION.—Nothing in paragraph (1) 
shall be construed as affecting the application of sec-
tion 514 of the Employee Retirement Income Secu-
rity Act of 1974. 
(b) COVERAGE OFFERED THROUGH EXCHANGE.— 
(1) IN GENERAL.—In the case of health insur-
ance coverage offered through the Health Insurance 
Exchange— 
(A) the requirements of this title do not 
supercede any requirements (including require-
ments relating to genetic information non-
discrimination and mental health) applicable 
under title XXVII of the Public Health Service 
Act or under State law, except insofar as such 
requirements prevent the application of a re-
quirement of this subdivision, as determined by 
the Commissioner; and 
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(B) individual rights and remedies under 
State laws shall apply. 
(2) CONSTRUCTION.—In the case of coverage 
described in paragraph (1), nothing in such para-
graph shall be construed as preventing the applica-
tion of rights and remedies under State laws with 
respect to any requirement referred to in paragraph 
(1)(A). 
SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE. 
(a) IN GENERAL.—Except as otherwise explicitly per-
mitted by this division and by subsequent regulations con-
sistent with this division, all health care and related serv-
ices (including insurance coverage and public health activi-
ties) covered by this division shall be provided without re-
gard to personal characteristics extraneous to the provi-
sion of high quality health care or related services. 
(b) IMPLEMENTATION.—To implement the require-
ment set forth in subsection (a), the Secretary of Health 
and Human Services shall, not later than 18 months after 
the date of the enactment of this Act, promulgate such 
regulations as are necessary or appropriate to insure that 
all health care and related services (including insurance 
coverage and public health activities) covered by this divi-
sion are provided (whether directly or through contractual, 
licensing, or other arrangements) without regard to per-
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sonal characteristics extraneous to the provision of high 
quality health care or related services. 
SEC. 153. WHISTLEBLOWER PROTECTION. 
(a) RETALIATION PROHIBITED.—No employer may 
discharge any employee or otherwise discriminate against 
any employee with respect to his compensation, terms, 
conditions, or other privileges of employment because the 
employee (or any person acting pursuant to a request of 
the employee)— 
(1) provided, caused to be provided, or is about 
to provide or cause to be provided to the employer, 
the Federal Government, or the attorney general of 
a State information relating to any violation of, or 
any act or omission the employee reasonably believes 
to be a violation of any provision of this division or 
any order, rule, or regulation promulgated under 
this division; 
(2) testified or is about to testify in a pro-
ceeding concerning such violation; 
(3) assisted or participated or is about to assist 
or participate in such a proceeding; or 
(4) objected to, or refused to participate in, any 
activity, policy, practice, or assigned task that the 
employee (or other such person) reasonably believed 
to be in violation of any provision of this division or 
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any order, rule, or regulation promulgated under 
this division. 
(b) ENFORCEMENT ACTION.—An employee covered 
by this section who alleges discrimination by an employer 
in violation of subsection (a) may bring an action governed 
by the rules, procedures, legal burdens of proof, and rem-
edies set forth in section 40(b) of the Consumer Product 
Safety Act (15 U.S.C. 2087(b)). 
(c) EMPLOYER DEFINED.—As used in this section, 
the term ‘‘employer’’ means any person (including one or 
more individuals, partnerships, associations, corporations, 
trusts, professional membership organization including a 
certification, disciplinary, or other professional body, unin-
corporated organizations, nongovernmental organizations, 
or trustees) engaged in profit or nonprofit business or in-
dustry whose activities are governed by this division, and 
any agent, contractor, subcontractor, grantee, or consult-
ant of such person. 
(d) RULE OF CONSTRUCTION.—The rule of construc-
tion set forth in section 20109(h) of title 49, United 
States Code, shall also apply to this section. 
SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BAR-
GAINING. 
Nothing in this subdivision shall be construed to alter 
or supercede any statutory or other obligation to engage 
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in collective bargaining over the terms and conditions of 
employment related to health care. 
SEC. 155. SEVERABILITY. 
If any provision of this division, or any application 
of such provision to any person or circumstance, is held 
to be unconstitutional, the remainder of the provisions of 
this division and the application of the provision to any 
other person or circumstance shall not be affected. 
SEC. 156. RULE OF CONSTRUCTION REGARDING HAWAII 
PREPAID HEALTH CARE ACT. 
(a) IN GENERAL.—Subject to this section— 
(1) nothing in this subdivision (or an amend-
ment made by this subdivision) shall be construed to 
modify or limit the application of the exemption for 
the Hawaii Prepaid Health Care Act (Haw. Rev. 
Stat. §§ 393-1 et seq.) as provided for under section 
514(b)(5) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1144(b)(5)), and such 
exemption shall also apply with respect to the provi-
sions of this subdivision, and 
(2) for purposes of this subdivision (and the 
amendments made by this subdivision), coverage 
provided pursuant to the Hawaii Prepaid Health 
Care Act shall be treated as a qualified health bene-
fits plan providing acceptable coverage so long as 
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the Secretary of Labor determines that such cov-
erage for employees (taking into account the benefits 
and the cost to employees for such benefits) is sub-
stantially equivalent to or greater than the coverage 
provided for employees pursuant to the essential 
benefits package. 
(b) COORDINATION WITH STATE LAW OF HAWAII.— 
The Commissioner shall, based on ongoing consultation 
with the appropriate officials of the State of Hawaii, make 
adjustments to rules and regulations of the Commissioner 
under this subdivision as may be necessary, as determined 
by the Commissioner, to most effectively coordinate the 
provisions of this subdivision with the provisions of the 
Hawaii Prepaid Health Care Act, taking into account any 
changes made from time to time to the Hawaii Prepaid 
Health Care Act and related laws of such State. 
SEC. 157. INCREASING MEANINGFUL USE OF ELECTRONIC 
HEALTH RECORDS. 
(a) STUDY.—The Commissioner shall conduct a 
study on methods that QHBP offering entities can use 
to encourage increased meaningful use of electronic health 
records by health care providers, including— 
(1) qualified health benefits plans offering high-
er reimbursement rates for such meaningful use; and 
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(2) COST
LIMITATION.—An increase in rates 
under paragraph (1) shall not result in any increase 
in affordability premium or cost-sharing credits 
under subtitle C of title II of this subdivision. 
SEC. 158. PRIVATE RIGHT OF CONTRACT WITH HEALTH 
CARE PROVIDERS. 
Nothing in this division shall be construed to preclude 
any participant or beneficiary in a group health plan from 
entering into any contract or arrangement for health care 
with any health care provider. 
Subtitle G—Early Investments 
SEC. 161. ENSURING VALUE AND LOWER PREMIUMS. 
(a) GROUP HEALTH INSURANCE COVERAGE.—Title 
XXVII of the Public Health Service Act is amended by 
inserting after section 2713 the following new section: 
‘‘SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS. 
‘‘(a) IN GENERAL.—Each health insurance issuer 
that offers health insurance coverage in the small or large 
group market shall provide that for any plan year in which 
the coverage has a medical loss ratio below a level specified 
by the Secretary, the issuer shall provide in a manner 
specified by the Secretary for rebates to enrollees of pay-
ment sufficient to meet such loss ratio. Such methodology 
shall be set at the highest level medical loss ratio possible 
that is designed to ensure adequate participation by 
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issuers, competition in the health insurance market, and 
value for consumers so that their premiums are used for 
services. 
‘‘(b) UNIFORM DEFINITIONS.—The Secretary shall 
establish a uniform definition of medical loss ratio and 
methodology for determining how to calculate the medical 
loss ratio. Such methodology shall be designed to take into 
account the special circumstances of smaller plans, dif-
ferent types of plans, and newer plans.’’. 
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 
Such title is further amended by inserting after section 
2753 the following new section: 
‘‘SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS. 
‘‘The provisions of section 2714 shall apply to health 
insurance coverage offered in the individual market in the 
same manner as such provisions apply to health insurance 
coverage offered in the small or large group market.’’. 
(c) IMMEDIATE
IMPLEMENTATION.—The amend-
ments made by this section shall apply in the group and 
individual market for plan years beginning on or after 
January 1, 2011. 
SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE. 
(a) CLARIFICATION REGARDING APPLICATION
OF 
GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH 
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INSURANCE COVERAGE.—Section 2742 of the Public 
Health Service Act (42 U.S.C. 300gg–42) is amended— 
(1) in its heading, by inserting ‘‘AND CON-
TINUATION
IN
FORCE, INCLUDING
PROHIBI-
TION OF RESCISSION,’’ after ‘‘GUARANTEED RE-
NEWABILITY’’; and 
(2) in subsection (a), by inserting ‘‘, including 
without rescission,’’ after ‘‘continue in force’’. 
(b) SECRETARIAL GUIDANCE REGARDING RESCIS-
SIONS.—Section 2742 of such Act (42 U.S.C. 300gg–42) 
is amended by adding at the end the following: 
‘‘(f) RESCISSION.—A health insurance issuer may re-
scind health insurance coverage only upon clear and con-
vincing evidence of fraud described in subsection (b)(2). 
The Secretary, no later than July 1, 2010, shall issue 
guidance implementing this requirement, including proce-
dures for independent, external third party review.’’. 
(c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD PARTY REVIEW IN CERTAIN CASES.—Subpart 1 
of part B of title XXVII of such Act (42 U.S.C. 300gg– 
41 et seq.) is amended by adding at the end the following: 
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‘‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL 
THIRD PARTY REVIEW IN CASES OF RESCIS-
SION. 
‘‘(a) NOTICE AND REVIEW RIGHT.—If a health in-
surance issuer determines to rescind health insurance cov-
erage for an individual in the individual market, before 
such rescission may take effect the issuer shall provide the 
individual with notice of such proposed rescission and an 
opportunity for a review of such determination by an inde-
pendent, external third party under procedures specified 
by the Secretary under section 2742(f). 
‘‘(b) INDEPENDENT DETERMINATION.—If the indi-
vidual requests such review by an independent, external 
third party of a rescission of health insurance coverage, 
the coverage shall remain in effect until such third party 
determines that the coverage may be rescinded under the 
guidance issued by the Secretary under section 2742(f).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply on and after October 1, 2010, with 
respect to health insurance coverage issued before, on, or 
after such date. 
SEC. 163. ADMINISTRATIVE SIMPLIFICATION. 
(a) STANDARDIZING ELECTRONIC ADMINISTRATIVE 
TRANSACTIONS.— 
(1) IN GENERAL.—Part C of title XI of the So-
cial Security Act (42 U.S.C. 1320d et seq.) is 
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amended by inserting after section 1173 the fol-
lowing new section: 
‘‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE 
TRANSACTIONS. 
‘‘(a) STANDARDS FOR FINANCIAL AND ADMINISTRA-
TIVE TRANSACTIONS.— 
‘‘(1) IN GENERAL.—The Secretary shall adopt 
and regularly update standards consistent with the 
goals described in paragraph (2). 
‘‘(2) GOALS FOR FINANCIAL AND ADMINISTRA-
TIVE
TRANSACTIONS.—The goals for standards 
under paragraph (1) are that such standards shall— 
‘‘(A) be unique with no conflicting or re-
dundant standards; 
‘‘(B) be authoritative, permitting no addi-
tions or constraints for electronic transactions, 
including companion guides; 
‘‘(C) be comprehensive, efficient and ro-
bust, requiring minimal augmentation by paper 
transactions or clarification by further commu-
nications; 
‘‘(D) enable the real-time (or near real- 
time) determination of an individual’s financial 
responsibility at the point of service and, to the 
extent possible, prior to service, including 
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whether the individual is eligible for a specific 
service with a specific physician at a specific fa-
cility, which may include utilization of a ma-
chine-readable health plan beneficiary identi-
fication card; 
‘‘(E) enable, where feasible, near real-time 
adjudication of claims; 
‘‘(F) provide for timely acknowledgment, 
response, and status reporting applicable to any 
electronic transaction deemed appropriate by 
the Secretary; 
‘‘(G) describe all data elements (such as 
reason and remark codes) in unambiguous 
terms, not permit optional fields, require that 
data elements be either required or conditioned 
upon set values in other fields, and prohibit ad-
ditional conditions; and 
‘‘(H) harmonize all common data elements 
across administrative and clinical transaction 
standards. 
‘‘(3) TIME FOR ADOPTION.—Not later than 2 
years after the date of implementation of the X12 
Version 5010 transaction standards implemented 
under this part, the Secretary shall adopt standards 
under this section. 
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‘‘(4) REQUIREMENTS
FOR
SPECIFIC
STAND-
ARDS.—The standards under this section shall be 
developed, adopted and enforced so as to— 
‘‘(A) clarify, refine, complete, and expand, 
as needed, the standards required under section 
1173; 
‘‘(B) require paper versions of standard-
ized transactions to comply with the same 
standards as to data content such that a fully 
compliant, equivalent electronic transaction can 
be populated from the data from a paper 
version; 
‘‘(C) enable electronic funds transfers, in 
order to allow automated reconciliation with the 
related health care payment and remittance ad-
vice; 
‘‘(D) require timely and transparent claim 
and denial management processes, including 
tracking, adjudication, and appeal processing; 
‘‘(E) require the use of a standard elec-
tronic transaction with which health care pro-
viders may quickly and efficiently enroll with a 
health plan to conduct the other electronic 
transactions provided for in this part; and 
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‘‘(F) provide for other requirements relat-
ing to administrative simplification as identified 
by the Secretary, in consultation with stake-
holders. 
‘‘(5) BUILDING ON EXISTING STANDARDS.—In 
developing the standards under this section, the Sec-
retary shall build upon existing and planned stand-
ards. 
‘‘(6) IMPLEMENTATION AND ENFORCEMENT.— 
Not later than 6 months after the date of the enact-
ment of this section, the Secretary shall submit to 
the appropriate committees of Congress a plan for 
the implementation and enforcement, by not later 
than 5 years after such date of enactment, of the 
standards under this section. Such plan shall in-
clude— 
‘‘(A) a process and timeframe with mile-
stones for developing the complete set of stand-
ards; 
‘‘(B) an expedited upgrade program for 
continually developing and approving additions 
and modifications to the standards as often as 
annually to improve their quality and extend 
their functionality to meet evolving require-
ments in health care; 
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‘‘(C) programs to provide incentives for, 
and ease the burden of, implementation for cer-
tain health care providers, with special consid-
eration given to such providers serving rural or 
underserved areas and ensure coordination with 
standards, implementation specifications, and 
certification criteria being adopted under the 
HITECH Act; 
‘‘(D) programs to provide incentives for, 
and ease the burden of, health care providers 
who volunteer to participate in the process of 
setting standards for electronic transactions; 
‘‘(E) an estimate of total funds needed to 
ensure timely completion of the implementation 
plan; and 
‘‘(F) an enforcement process that includes 
timely investigation of complaints, random au-
dits to ensure compliance, civil monetary and 
programmatic penalties for non-compliance con-
sistent with existing laws and regulations, and 
a fair and reasonable appeals process building 
off of enforcement provisions under this part. 
‘‘(b) LIMITATIONS ON USE OF DATA.—Nothing in 
this section shall be construed to permit the use of infor-
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1103 
mation collected under this section in a manner that would 
adversely affect any individual. 
‘‘(c) PROTECTION OF DATA.—The Secretary shall en-
sure (through the promulgation of regulations or other-
wise) that all data collected pursuant to subsection (a) 
are— 
‘‘(1) used and disclosed in a manner that meets 
the HIPAA privacy and security law (as defined in 
section 3009(a)(2) of the Public Health Service 
Act), including any privacy or security standard 
adopted under section 3004 of such Act; and 
‘‘(2) protected from all inappropriate internal 
use by any entity that collects, stores, or receives the 
data, including use of such data in determinations of 
eligibility (or continued eligibility) in health plans, 
and from other inappropriate uses, as defined by the 
Secretary.’’. 
(2) DEFINITIONS.—Section 1171 of such Act 
(42 U.S.C. 1320d) is amended— 
(A) in paragraph (7), by striking ‘‘with 
reference to’’ and all that follows and inserting 
‘‘with reference to a transaction or data ele-
ment of health information in section 1173 
means implementation specifications, certifi-
cation criteria, operating rules, messaging for-
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mats, codes, and code sets adopted or estab-
lished by the Secretary for the electronic ex-
change and use of information’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(9) OPERATING RULES.—The term ‘operating 
rules’ means business rules for using and processing 
transactions. Operating rules should address the fol-
lowing: 
‘‘(A) Requirements for data content using 
available and established national standards. 
‘‘(B) Infrastructure requirements that es-
tablish best practices for streamlining data flow 
to yield timely execution of transactions. 
‘‘(C) Policies defining the transaction re-
lated rights and responsibilities for entities that 
are transmitting or receiving data.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
1179(a) of such Act (42 U.S.C. 1320d–8(a)) is 
amended, in the matter before paragraph (1)— 
(A) by inserting ‘‘on behalf of an indi-
vidual’’ after ‘‘1978)’’; and 
(B) by inserting ‘‘on behalf of an indi-
vidual’’ after ‘‘for a financial institution.’’ 
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(b) STANDARDS
FOR CLAIMS ATTACHMENTS
AND 
COORDINATION OF BENEFITS .— 
(1) STANDARD FOR HEALTH CLAIMS ATTACH-
MENTS.—Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and 
Human Services shall promulgate a final rule to es-
tablish a standard for health claims attachment 
transaction described in section 1173(a)(2)(B) of the 
Social Security Act (42 U.S.C. 1320d–2(a)(2)(B)) 
and coordination of benefits. 
(2) REVISION IN PROCESSING PAYMENT TRANS-
ACTIONS BY FINANCIAL INSTITUTIONS.— 
(A) IN GENERAL.—Section 1179 of the So-
cial Security Act (42 U.S.C. 1320d–8) is 
amended, in the matter before paragraph (1)— 
(i) by striking ‘‘or is engaged’’ and in-
serting ‘‘and is engaged’’; and 
(ii) by inserting ‘‘(other than as a 
business associate for a covered entity)’’ 
after ‘‘for a financial institution’’. 
(B) EFFECTIVE DATE.—The amendments 
made by paragraph (1) shall apply to trans-
actions occurring on or after such date (not 
later than 6 months after the date of the enact-
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1106 
ment of this Act) as the Secretary of Health 
and Human Services shall specify. 
SEC. 164. REINSURANCE PROGRAM FOR RETIREES. 
(a) ESTABLISHMENT.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary 
of Health and Human Services shall establish a tem-
porary reinsurance program (in this section referred 
to as the ‘‘reinsurance program’’) to provide reim-
bursement to assist participating employment-based 
plans with the cost of providing health benefits to 
retirees and to eligible spouses, surviving spouses 
and dependents of such retirees. 
(2) DEFINITIONS.—For purposes of this sec-
tion: 
(A) The term ‘‘eligible employment-based 
plan’’ means a group health benefits plan 
that— 
(i) is maintained by one or more em-
ployers, former employers or employee as-
sociations, or a voluntary employees’ bene-
ficiary association, or a committee or board 
of individuals appointed to administer such 
plan, and 
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(ii) provides health benefits to retir-
ees. 
(B) The term ‘‘health benefits’’ means 
medical, surgical, hospital, prescription drug, 
and such other benefits as shall be determined 
by the Secretary, whether self-funded or deliv-
ered through the purchase of insurance or oth-
erwise. 
(C) The term ‘‘participating employment- 
based plan’’ means an eligible employment- 
based plan that is participating in the reinsur-
ance program. 
(D) The term ‘‘retiree’’ means, with re-
spect to a participating employment-benefit 
plan, an individual who— 
(i) is 55 years of age or older; 
(ii) is not eligible for coverage under 
title XVIII of the Social Security Act; and 
(iii) is not an active employee of an 
employer maintaining the plan or of any 
employer that makes or has made substan-
tial contributions to fund such plan. 
(E) The term ‘‘Secretary’’ means Sec-
retary of Health and Human Services. 
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(b) PARTICIPATION.—To be eligible to participate in 
the reinsurance program, an eligible employment-based 
plan shall submit to the Secretary an application for par-
ticipation in the program, at such time, in such manner, 
and containing such information as the Secretary shall re-
quire. 
(c) PAYMENT.— 
(1) SUBMISSION OF CLAIMS.— 
(A) IN GENERAL.—Under the reinsurance 
program, a participating employment-based 
plan shall submit claims for reimbursement to 
the Secretary which shall contain documenta-
tion of the actual costs of the items and serv-
ices for which each claim is being submitted. 
(B) BASIS FOR CLAIMS.—Each claim sub-
mitted under subparagraph (A) shall be based 
on the actual amount expended by the partici-
pating employment-based plan involved within 
the plan year for the appropriate employment 
based health benefits provided to a retiree or to 
the spouse, surviving spouse, or dependent of a 
retiree. In determining the amount of any claim 
for purposes of this subsection, the partici-
pating employment-based plan shall take into 
account any negotiated price concessions (such 
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as discounts, direct or indirect subsidies, re-
bates, and direct or indirect remunerations) ob-
tained by such plan with respect to such health 
benefits. For purposes of calculating the 
amount of any claim, the costs paid by the re-
tiree or by the spouse, surviving spouse, or de-
pendent of the retiree in the form of 
deductibles, co-payments, and co-insurance shall 
be included along with the amounts paid by the 
participating employment-based plan. 
(2) PROGRAM PAYMENTS AND LIMIT.—If the 
Secretary determines that a participating employ-
ment-based plan has submitted a valid claim under 
paragraph (1), the Secretary shall reimburse such 
plan for 80 percent of that portion of the costs at-
tributable to such claim that exceeds $15,000, but is 
less than $90,000. Such amounts shall be adjusted 
each year based on the percentage increase in the 
medical care component of the Consumer Price 
Index (rounded to the nearest multiple of $1,000) 
for the year involved. 
(3) USE OF PAYMENTS.—Amounts paid to a 
participating employment-based plan under this sub-
section shall be used to lower the costs borne di-
rectly by the participants and beneficiaries for health 
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benefits provided under such plan in the form of 
premiums, co-payments, deductibles, co-insurance, or 
other out-of-pocket costs. Such payments shall not 
be used to reduce the costs of an employer maintain-
ing the participating employment-based plan. The 
Secretary shall develop a mechanism to monitor the 
appropriate use of such payments by such plans. 
(4) APPEALS AND PROGRAM PROTECTIONS.— 
The Secretary shall establish— 
(A) an appeals process to permit partici-
pating employment-based plans to appeal a de-
termination of the Secretary with respect to 
claims submitted under this section; and 
(B) procedures to protect against fraud, 
waste, and abuse under the program. 
(5) AUDITS.—The Secretary shall conduct an-
nual audits of claims data submitted by partici-
pating employment-based plans under this section to 
ensure that they are in compliance with the require-
ments of this section. 
(d) RETIREE RESERVE TRUST FUND.— 
(1) ESTABLISHMENT.— 
(A) IN GENERAL.—There is established in 
the Treasury of the United States a trust fund 
to be known as the ‘‘Retiree Reserve Trust 
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1111 
Fund’’ (referred to in this section as the ‘‘Trust 
Fund’’), that shall consist of such amounts as 
may be appropriated or credited to the Trust 
Fund as provided for in this subsection to en-
able the Secretary to carry out the reinsurance 
program. Such amounts shall remain available 
until expended. 
(B) FUNDING.—There are hereby appro-
priated to the Trust Fund, out of any moneys 
in the Treasury not otherwise appropriated, an 
amount requested by the Secretary as necessary 
to carry out this section, except that the total 
of all such amounts requested shall not exceed 
$10,000,000,000. 
(C) APPROPRIATIONS
FROM
THE
TRUST 
FUND.— 
(i) IN
GENERAL.—Amounts in the 
Trust Fund are appropriated to provide 
funding to carry out the reinsurance pro-
gram and shall be used to carry out such 
program. 
(ii) 
BUDGETARY
IMPLICATIONS.— 
Amounts appropriated under clause (i), 
and outlays flowing from such appropria-
tions, shall not be taken into account for 
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purposes of any budget enforcement proce-
dures 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 authority 
to stop taking applications for participa-
tion in the program or take such other 
steps in reducing expenditures under the 
reinsurance program in order to ensure 
that expenditures under the reinsurance 
program do not exceed the funds available 
under this subsection. 
SEC. 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 Security Act of 1974 is 
amended by inserting after section 714 the following new 
section: 
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1113 
‘‘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 reducing the benefits provided 
under the plan to a retired participant, or beneficiary of 
such participant, if such reduction affects the benefits pro-
vided to the participant or beneficiary as of the date the 
participant retired for purposes of the plan and such re-
duction occurs after the participant’s retirement unless 
such reduction is also made with respect to active partici-
pants. 
‘‘(b) NO REDUCTION.—Notwithstanding that a group 
health plan described in subsection (a) may contain a pro-
vision 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 bene-
fits, it shall be prohibited for any group health plan, 
whether through amendment or otherwise, to reduce the 
benefits provided to a retired participant or his or her ben-
eficiary 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 pro-
vided 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.’’. 
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1114 
(b) CONFORMING AMENDMENT.—The table of con-
tents 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. 
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 RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) REDUCTION IN LOOK-BACK PERIOD.—Sec-
tion 701(a)(1) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1181(a)(1)) is 
amended by striking ‘‘6-month period’’ and inserting 
‘‘30-day period’’. 
(2) REDUCTION
IN
PERMITTED
PREEXISTING 
CONDITION LIMITATION PERIOD.—Section 701(a)(2) 
of such Act (29 U.S.C. 1181(a)(2)) is amended by 
striking ‘‘12 months’’ and inserting ‘‘3 months’’, 
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and by striking ‘‘18 months’’ and inserting ‘‘9 
months’’. 
(3) INAPPLICABILITY OF INTERIM LIMITATIONS 
UPON
APPLICABILITY
OF
TOTAL
PROHIBITION
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 requirements of section 111 of this division (re-
lating to prohibiting preexisting condition exclu-
sions). 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in sub-
paragraph (B), the amendments made by para-
graphs (1) and (2) of subsection (a) shall apply with 
respect to group health plans for plan years begin-
ning after the end of the 6th calendar month fol-
lowing 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 col-
lective bargaining agreements between employee rep-
resentatives and one or more employers ratified be-
fore the date of the enactment of this Act, the 
amendments made by paragraphs (1) and (2) of 
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1116 
subsection (a) shall not apply to plan years begin-
ning before the earlier of— 
(A) the date on which the last of the col-
lective bargaining agreements relating to the 
plan terminates (determined without regard to 
any extension thereof agreed to after the date 
of the enactment of this Act), or 
(B) 3 years after the date of the enact-
ment of this Act. 
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective 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 bargaining agreement. 
SEC. 167. EXTENSION OF COBRA CONTINUATION COV-
ERAGE. 
(a) EXTENSION OF CURRENT PERIODS OF CONTINU-
ATION COVERAGE.— 
(1) IN GENERAL.—In the case of any individual 
who is, under a COBRA continuation coverage pro-
vision, covered under COBRA continuation coverage 
on or after the date of the enactment of this Act, 
the required period of any such coverage which has 
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1117 
not subsequently terminated under the terms of such 
provision for any reason other than the expiration of 
a period of a specified number of months shall, not-
withstanding such provision and subject to sub-
section (b), extend to the earlier of the date on 
which such individual becomes eligible for coverage 
under an employment-based health plan or the date 
on which such individual becomes eligible for health 
insurance coverage through the Health Insurance 
Exchange (or a State-based Health Insurance Ex-
change operating in a State or group of States). 
(2) NOTICE.—As soon as practicable after the 
date of the enactment of this Act, the Secretary of 
Labor, in consultation with the Secretary of the 
Treasury and the Secretary of Health and Human 
Services, shall, in consultation with administrators 
of the group health plans (or other entities) that 
provide or administer the COBRA continuation cov-
erage involved, provide rules setting forth the form 
and manner in which prompt notice to individuals of 
the continued availability of COBRA continuation 
coverage to such individuals under paragraph (1). 
(b) CONTINUED EFFECT OF OTHER TERMINATING 
EVENTS.—Notwithstanding subsection (a), any required 
period of COBRA continuation coverage which is extended 
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1118 
under such subsection shall terminate upon the occur-
rence, prior to the date of termination otherwise provided 
in such subsection, of any terminating event specified in 
the applicable continuation coverage provision other than 
the expiration of a period of a specified number of months. 
(c) ACCESS
TO STATE HEALTH BENEFITS RISK 
POOLS.—This section shall supersede any provision of the 
law of a State or political subdivision thereof to the extent 
that such provision has the effect of limiting or precluding 
access by a qualified beneficiary whose COBRA continu-
ation coverage has been extended under this section to a 
State health benefits risk pool recognized by the Commis-
sioner for purposes of this section solely by reason of the 
extension of such coverage beyond the date on which such 
coverage otherwise would have expired. 
(d) DEFINITIONS.—For purposes of this section— 
(1) COBRA CONTINUATION
COVERAGE.—The 
term ‘‘COBRA continuation coverage’’ means con-
tinuation coverage provided pursuant to part 6 of 
subtitle B of title I of the Employee Retirement In-
come Security Act of 1974 (other than under section 
609), title XXII of the Public Health Service Act, 
section 4980B of the Internal Revenue Code of 1986 
(other than subsection (f)(1) of such section insofar 
as it relates to pediatric vaccines), or section 905a 
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1119 
of title 5, United States Code, or under a State pro-
gram that provides comparable continuation cov-
erage. Such term does not include coverage under a 
health flexible spending arrangement under a cafe-
teria plan within the meaning of section 125 of the 
Internal Revenue Code of 1986. 
(2) COBRA CONTINUATION
PROVISION.—The 
term ‘‘COBRA continuation provision’’ means the 
provisions of law described in paragraph (1). 
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 direc-
tion of the Commissioner a Health Insurance Exchange 
in order to facilitate access of individuals and employers, 
through a transparent process, to a variety of choices of 
affordable, quality health insurance coverage, including a 
public health insurance option. 
(b) OUTLINE OF DUTIES OF COMMISSIONER.—In ac-
cordance with this subtitle and in coordination with appro-
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1120 
priate Federal and State officials as provided under sec-
tion 143(b), the Commissioner shall— 
(1) under section 204 establish standards for, 
accept bids from, and negotiate and enter into con-
tracts with, QHBP offering entities for the offering 
of health benefits plans through the Health Insur-
ance Exchange, with different levels of benefits re-
quired under section 203, and including with respect 
to oversight and enforcement; 
(2) under section 205 facilitate outreach and 
enrollment in such plans of Exchange-eligible indi-
viduals and employers described in section 202; and 
(3) conduct such activities related to the Health 
Insurance Exchange as required, including establish-
ment of a risk pooling mechanism under section 206 
and consumer protections under subtitle D of title I. 
(c) EXCHANGE-PARTICIPATING HEALTH BENEFITS 
PLAN DEFINED.—In this subdivision, the term ‘‘Ex-
change-participating health benefits plan’’ means a quali-
fied health benefits plan that is offered through the Health 
Insurance Exchange. 
SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOY-
ERS. 
(a) ACCESS TO COVERAGE.—In accordance with this 
section, all individuals are eligible to obtain coverage 
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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 subdivision: 
(1) 
EXCHANGE-ELIGIBLE
INDIVIDUAL.—The 
term ‘‘Exchange-eligible individual’’ means an indi-
vidual who is eligible under this section to be en-
rolled through the Health Insurance Exchange in an 
Exchange-participating health benefits plan and, 
with respect to family coverage, includes dependents 
of such individual. 
(2) 
EXCHANGE-ELIGIBLE
EMPLOYER.—The 
term ‘‘Exchange-eligible employer’’ means an em-
ployer that is eligible under this section to enroll 
through the Health Insurance Exchange employees 
of the employer (and their dependents) in Exchange- 
eligible health benefits plans. 
(3) 
EMPLOYMENT-RELATED
DEFINITIONS.— 
The terms ‘‘employer’’, ‘‘employee’’, ‘‘full-time em-
ployee’’, and ‘‘part-time employee’’ have the mean-
ings given such terms by the Commissioner for pur-
poses of this subdivision. 
(c) TRANSITION.—Individuals and employers shall 
only be eligible to enroll or participate in the Health Insur-
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ance Exchange in accordance with the following transition 
schedule: 
(1) FIRST YEAR.—In Y1 (as defined in section 
100(c))— 
(A) individuals described in subsection 
(d)(1), including individuals described in para-
graphs (3), (4), and (5) of subsection (d); and 
(B) smallest employers described in sub-
section (e)(1). 
(2) SECOND YEAR.—In Y2— 
(A) individuals and employers described in 
paragraph (1); and 
(B) smaller employers described in sub-
section (e)(2). 
(3) THIRD YEAR.—In Y3— 
(A) individuals and employers described in 
paragraph (2); 
(B) larger employers described in sub-
section (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 described in 
paragraph (3); and 
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(B) largest employers as permitted by the 
Commissioner under subsection (e)(4). 
(d) INDIVIDUALS.— 
(1) INDIVIDUAL
DESCRIBED.—Subject to the 
succeeding provisions of this subsection, an indi-
vidual described in this paragraph is an individual 
who— 
(A) is not enrolled in coverage described in 
subparagraphs (C) through (F) of paragraph 
(2); and 
(B) is not enrolled in coverage as a full- 
time employee (or as a dependent of such an 
employee) under a group health plan if the cov-
erage and an employer contribution under the 
plan meet the requirements of section 312. 
For purposes of subparagraph (B), in the case of an 
individual who is self-employed, who has at least 1 
employee, and who meets the requirements of section 
312, such individual shall be deemed a full-time em-
ployee described in such subparagraph. 
(2) ACCEPTABLE COVERAGE.—For purposes of 
this subdivision, the term ‘‘acceptable coverage’’ 
means any of the following: 
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(A) QUALIFIED HEALTH BENEFITS PLAN 
COVERAGE.—Coverage under a qualified health 
benefits plan. 
(B) GRANDFATHERED HEALTH INSURANCE 
COVERAGE; COVERAGE UNDER CURRENT GROUP 
HEALTH
PLAN.—Coverage under a grand-
fathered health insurance coverage (as defined 
in subsection (a) of section 102) or under a 
current group health plan (described in sub-
section (b) of such section). 
(C) MEDICARE.—Coverage under part A of 
title XVIII of the Social Security Act. 
(D) MEDICAID.—Coverage for medical as-
sistance under title XIX of the Social Security 
Act, excluding such coverage that is only avail-
able because of the application of subsection 
(u), (z), or (aa) of section 1902 of such Act 
(E) MEMBERS
OF
THE
ARMED
FORCES 
AND
DEPENDENTS
(INCLUDING
TRICARE).— 
Coverage under chapter 55 of title 10, United 
States Code, including similar coverage fur-
nished under section 1781 of title 38 of such 
Code. 
(F) VA.—Coverage under the veteran’s 
health care program under chapter 17 of title 
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38, United States Code, but only if the cov-
erage for the individual involved is determined 
by the Commissioner in coordination with the 
Secretary of Treasury to be not less than a level 
specified by the Commissioner and Secretary of 
Veteran’s Affairs, in coordination with the Sec-
retary 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 bene-
fits risk pool, as the Commissioner, in coordina-
tion with the Secretary of the Treasury, recog-
nizes for purposes of this paragraph. 
The Commissioner shall make determinations under 
this paragraph in coordination with the Secretary of 
the Treasury. 
(3) TREATMENT
OF
CERTAIN
NON-TRADI-
TIONAL MEDICAID ELIGIBLE INDIVIDUALS.—An indi-
vidual who is a non-traditional Medicaid eligible in-
dividual (as defined in section 205(e)(4)(C)) in a 
State may be an Exchange-eligible individual if the 
individual was enrolled in a qualified health benefits 
plan, grandfathered health insurance coverage, or 
current group health plan during the 6 months be-
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fore the individual became a non-traditional Med-
icaid eligible individual. During the period in which 
such an individual has chosen to enroll in an Ex-
change-participating health benefits plan, the indi-
vidual is not also eligible for medical assistance 
under Medicaid. 
(4) CONTINUING ELIGIBILITY PERMITTED.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), once an individual qualifies 
as an Exchange-eligible individual under this 
subsection (including as an employee or depend-
ent of an employee of an Exchange-eligible em-
ployer) and enrolls under an Exchange-partici-
pating health benefits plan through the Health 
Insurance Exchange, the individual shall con-
tinue to be treated as an Exchange-eligible indi-
vidual until the individual is no longer enrolled 
with an Exchange-participating health benefits 
plan. 
(B) EXCEPTIONS.— 
(i) IN GENERAL.—Subparagraph (A) 
shall not apply to an individual once the 
individual becomes eligible for coverage— 
(I) under part A of the Medicare 
program; 
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(II) under the Medicaid program 
as a Medicaid eligible individual, ex-
cept as permitted under paragraph 
(3) or clause (ii); or 
(III) in such other circumstances 
as the Commissioner may provide. 
(ii) TRANSITION PERIOD.—In the case 
described in clause (i)(II), the Commis-
sioner shall permit the individual to con-
tinue treatment under subparagraph (A) 
until such limited time as the Commis-
sioner determines it is administratively fea-
sible, consistent with minimizing disruption 
in the individual’s access to health care. 
(5) ADVERSELY AFFECTED RETIREE HEALTH 
BENEFITS
GROUP
PARTICIPANTS
AND
BENE-
FICIARIES.— 
(A) IN GENERAL.—Beginning in Y1, an in-
dividual who is a participant or beneficiary in 
an adversely affected retiree health benefits 
group who does not have coverage described in 
paragraph (2)(C) is an Exchange eligible indi-
vidual, whether or not such an individual has 
other acceptable coverage. 
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(B) 
ADVERSELY
AFFECTED
RETIREE 
HEALTH
BENEFIT
GROUP
DEFINED.—In this 
paragraph, the term ‘‘adversely affected retiree 
health benefits group’’ means the retired par-
ticipants and their beneficiaries of a group 
health plan that cancelled or substantially re-
duced the amount, type, level, or form of health 
benefit or option provided prior January 1, 
2008. 
(e) EMPLOYERS.— 
(1) SMALLEST EMPLOYERS.—Subject to para-
graph (5), smallest employers described in this para-
graph are employers with 15 or fewer employees. 
(2) SMALLER
EMPLOYERS.—Subject to para-
graph (5), smaller employers described in this para-
graph are employers that are not smallest employers 
described in paragraph (1) and that have 25 or 
fewer employees. 
(3) LARGER
EMPLOYERS.—Subject to para-
graph (5), larger employers described in this para-
graph are employers that are not smallest employers 
described in paragraph (1) or smaller employers de-
scribed in paragraph (2) and that have 50 or fewer 
employees. 
(4) LARGEST EMPLOYERS.— 
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1129 
(A) IN GENERAL.—Beginning with Y3, the 
Commissioner may permit employers not de-
scribed in paragraphs (1) (2), or (3) to be Ex-
change-eligible employers. 
(B) PHASE-IN.—In applying subparagraph 
(A), the Commissioner may phase-in the appli-
cation of such subparagraph based on the num-
ber of full-time employees of an employer and 
such other considerations as the Commissioner 
deems appropriate. 
(5) CONTINUING
ELIGIBILITY.—Once an em-
ployer is permitted to be an Exchange-eligible em-
ployer under this subsection and enrolls employees 
through the Health Insurance Exchange, the em-
ployer shall continue to be treated as an Exchange- 
eligible employer for each subsequent plan year re-
gardless of the number of employees involved unless 
and until the employer meets the requirement of sec-
tion 311(a) through paragraph (1) of such section 
by offering a group health plan and not through of-
fering Exchange-participating health benefits plan. 
(6) EMPLOYER PARTICIPATION AND CONTRIBU-
TIONS.— 
(A) SATISFACTION OF EMPLOYER RESPON-
SIBILITY.—For any year in which an employer 
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1130 
is an Exchange-eligible employer, such employer 
may meet the requirements of section 312 with 
respect to employees of such employer by offer-
ing such employees the option of enrolling with 
Exchange-participating health benefits plans 
through the Health Insurance Exchange con-
sistent with the provisions of subtitle B of title 
III. 
(B) EMPLOYEE
CHOICE.—Any employee 
offered Exchange-participating health benefits 
plans by the employer of such employee under 
subparagraph (A) may choose coverage under 
any such plan. That choice includes, with re-
spect to family coverage, coverage of the de-
pendents of such employee. 
(7) AFFILIATED GROUPS.—Any employer which 
is part of a group of employers who are treated as 
a single employer under subsection (b), (c), (m), or 
(o) of section 414 of the Internal Revenue Code of 
1986 shall be treated, for purposes of this subtitle, 
as a single employer. 
(8) OTHER COUNTING RULES.—The Commis-
sioner shall establish rules relating to how employees 
are counted for purposes of carrying out this sub-
section. 
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1131 
(9) TREATMENT OF MULTIEMPLOYER PLANS.— 
The plan sponsor of a group health plan (as defined 
in section 733(a) of the Employee Retirement In-
come Security Act of 1974) that is multiemployer 
plan (as defined in section 3(37) of such Act) may 
obtain health insurance coverage with respect to par-
ticipants in the plan through the Exchange to the 
same extent as an employer not described in para-
graph (1) or (2) is permitted by the Commissioner 
to obtain health insurance coverage through the Ex-
change as an Exchange-eligible employer 
(f) SPECIAL SITUATION AUTHORITY.—The Commis-
sioner shall have the authority to establish such rules as 
may be necessary to deal with special situations with re-
gard to uninsured individuals and employers participating 
as Exchange-eligible individuals and employers, such as 
transition periods for individuals and employers who gain, 
or lose, Exchange-eligible participation status, and to es-
tablish grace periods for premium payment. 
(g) SURVEYS OF INDIVIDUALS AND EMPLOYERS.— 
The Commissioner shall provide for periodic surveys of 
Exchange-eligible individuals and employers concerning 
satisfaction of such individuals and employers with the 
Health Insurance Exchange and Exchange-participating 
health benefits plans. 
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1132 
(h) EXCHANGE ACCESS STUDY.— 
(1) IN GENERAL.—The Commissioner shall con-
duct a study of access to the Health Insurance Ex-
change for individuals and for employers, including 
individuals and employers who are not eligible and 
enrolled in Exchange-participating health benefits 
plans. The goal of the study is to determine if there 
are significant groups and types of individuals and 
employers who are not Exchange eligible individuals 
or employers, but who would have improved benefits 
and affordability if made eligible for coverage in the 
Exchange. 
(2) ITEMS INCLUDED IN STUDY.—Such study 
also shall examine— 
(A) the terms, conditions, and affordability 
of group health coverage offered by employers 
and QHBP offering entities outside of the Ex-
change compared to Exchange-participating 
health benefits plans; and 
(B) the affordability-test standard for ac-
cess of certain employed individuals to coverage 
in the Health Insurance Exchange. 
(3) REPORT.—Not later than January 1 of Y3, 
in Y6, and thereafter, the Commissioner shall sub-
mit to Congress on the study conducted under this 
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1133 
subsection and shall include in such report rec-
ommendations regarding changes in standards for 
Exchange eligibility for individuals and employers. 
SEC. 203. BENEFITS PACKAGE LEVELS. 
(a) IN GENERAL.—The Commissioner shall specify 
the benefits to be made available under Exchange-partici-
pating health benefits plans during each plan year, con-
sistent with subtitle C of title I and this section. 
(b) LIMITATION ON HEALTH BENEFITS PLANS OF-
FERED BY OFFERING ENTITIES.—The Commissioner may 
not enter into a contract with a QHBP offering entity 
under section 204(c) for the offering of an Exchange-par-
ticipating health benefits plan in a service area unless the 
following requirements are met: 
(1) REQUIRED OFFERING OF BASIC PLAN.—The 
entity offers only one basic plan for such service 
area. 
(2) 
OPTIONAL
OFFERING
OF
ENHANCED 
PLAN.—If and only if the entity offers a basic plan 
for such service area, the entity may offer one en-
hanced plan for such area. 
(3) OPTIONAL OFFERING OF PREMIUM PLAN.— 
If and only if the entity offers an enhanced plan for 
such service area, the entity may offer one premium 
plan for such area. 
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(4) OPTIONAL
OFFERING
OF
PREMIUM-PLUS 
PLANS.—If and only if the entity offers a premium 
plan for such service area, the entity may offer one 
or more premium-plus plans for such area. 
All such plans may be offered under a single contract with 
the Commissioner. 
(c) SPECIFICATION
OF
BENEFIT
LEVELS
FOR 
PLANS.— 
(1) IN GENERAL.—The Commissioner shall es-
tablish the following standards consistent with this 
subsection and title I: 
(A) BASIC, ENHANCED, AND
PREMIUM 
PLANS.—Standards for 3 levels of Exchange- 
participating health benefits plans: basic, en-
hanced, and premium (in this subdivision re-
ferred to as a ‘‘basic plan’’, ‘‘enhanced plan’’, 
and ‘‘premium plan’’, respectively). 
(B) PREMIUM-PLUS
PLAN
BENEFITS.— 
Standards for additional benefits that may be 
offered, consistent with this subsection and sub-
title C of title I, under a premium plan (such 
a plan with additional benefits referred to in 
this subdivision as a ‘‘premium-plus plan’’) . 
(2) BASIC PLAN.— 
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premium that is attributable to such additional ben-
efits shall be separately 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 pack-
age. Such variation shall permit a variation of not 
more than plus (or minus) 10 percent in cost-shar-
ing with respect to each benefit category specified 
under section 122. 
(d) TREATMENT OF STATE BENEFIT MANDATES.— 
Insofar as a State requires a health insurance issuer offer-
ing health insurance coverage to include benefits beyond 
the essential benefits package, such requirement shall con-
tinue to apply to an Exchange-participating health bene-
fits plan, if the State has entered into an arrangement 
satisfactory to the Commissioner to reimburse the Com-
missioner for the amount of any net increase in afford-
ability premium credits under subtitle C as a result of an 
increase in premium in basic plans as a result of applica-
tion of such requirement. 
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1137 
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 subtitle: 
(1) OFFERING
ENTITY
AND
PLAN
STAND-
ARDS.—The Commissioner shall— 
(A) establish standards necessary to imple-
ment the requirements of this title and title I 
for— 
(i) QHBP offering entities for the of-
fering of an Exchange-participating health 
benefits plan; and 
(ii) for Exchange-participating health 
benefits plans; and 
(B) certify QHBP offering entities and 
qualified health benefits plans as meeting such 
standards and requirements of this title and 
title I for purposes of this subtitle. 
(2) SOLICITING AND NEGOTIATING BIDS; CON-
TRACTS.—The Commissioner shall— 
(A) solicit bids from QHBP offering enti-
ties for the offering of Exchange-participating 
health benefits plans; 
(B) based upon a review of such bids, ne-
gotiate with such entities for the offering of 
such plans; and 
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(C) enter into contracts with such entities 
for the offering of such plans through the 
Health Insurance Exchange under terms (con-
sistent with this title) negotiated between the 
Commissioner and such entities. 
(3) FAR NOT APPLICABLE.—The provisions of 
the Federal Acquisition Regulation shall not apply to 
contracts between the Commissioner and QHBP of-
fering entities for the offering of Exchange-partici-
pating health benefits plans under this title. 
(b) STANDARDS FOR QHBP OFFERING ENTITIES TO 
OFFER EXCHANGE-PARTICIPATING HEALTH BENEFITS 
PLANS.—The standards established under subsection 
(a)(1)(A) shall require that, in order for a QHBP offering 
entity to offer an Exchange-participating health benefits 
plan, the entity must meet the following requirements: 
(1) LICENSED.—The entity shall be licensed to 
offer health insurance coverage under State law for 
each State in which it is offering such coverage. 
(2) DATA REPORTING.—The entity shall pro-
vide for the reporting of such information as the 
Commissioner may specify, including information 
necessary to administer the risk pooling mechanism 
described in section 206(b) and information to ad-
dress disparities in health and health care. 
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(3) 
IMPLEMENTING
AFFORDABILITY
CRED-
ITS.—The entity shall provide for implementation of 
the affordability credits provided for enrollees under 
subtitle C, including the reduction in cost-sharing 
under section 244(c). 
(4) ENROLLMENT.—The entity shall accept all 
enrollments under this subtitle, subject to such ex-
ceptions (such as capacity limitations) in accordance 
with the requirements under title I for a qualified 
health benefits plan. The entity shall notify the 
Commissioner if the entity projects or anticipates 
reaching such a capacity limitation that would result 
in a limitation in enrollment. 
(5) RISK POOLING PARTICIPATION.—The entity 
shall participate in such risk pooling mechanism as 
the Commissioner establishes 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 cov-
ered 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 the case of a basic plan with respect 
to which the Commissioner determines provides sub-
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stantially all benefits through a health maintenance 
organization, as defined in section 2791(b)(3) of the 
Public Health Service Act. 
(7) CULTURALLY AND LINGUISTICALLY APPRO-
PRIATE SERVICES AND COMMUNICATIONS.—The en-
tity shall provide for culturally and linguistically ap-
propriate 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 peri-
ods and which may include standards to ensure that 
the entity does not use coercive practices to force 
providers not to contract with other entities offering 
coverage through the Health Insurance Exchange. 
(c) CONTRACTS.— 
(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 in-
formation as the Commissioner may require. 
(2) TERM.—Each contract with a QHBP offer-
ing entity under this section shall be for a term of 
not less than one year, but may be made automati-
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(B) report both to the Commissioner and 
to the Congress regarding program and man-
agement problems and recommendations to cor-
rect them; 
(C) have other duties (described in para-
graphs (2) and (3) of section 121 of division A 
of Public Law 110–343) in relation to the du-
ties described in the previous subparagraphs; 
and 
(D) have the authorities provided in sec-
tion 6 of the Inspector General Act of 1978 in 
carrying out duties under this paragraph. 
(3) APPLICATION OF OTHER SPECIAL INSPEC-
TOR GENERAL PROVISIONS.—The provisions of sub-
sections (b) (other than paragraphs (1) and (3)), (d) 
(other than paragraph (1)), and (e) of section 121 
of division A of the Emergency Economic Stabiliza-
tion Act of 2009 (Public Law 110–343) shall apply 
to the Special Inspector General under this sub-
section in the same manner as such provisions apply 
to the Special Inspector General under such section. 
(4) REPORTS.—Not later than one year after 
the confirmation of the Special Inspector General, 
and annually thereafter, the Special Inspector Gen-
eral shall submit to the appropriate committees of 
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E:\BILLS\H4872.RH
H4872
dcolon on DSK2BSOYB1PROD with BILLS