		I
		112th CONGRESS
		1st Session
		H. R. 3000
		IN THE HOUSE OF REPRESENTATIVES

			September 21, 2011
			Mr. Price of Georgia
			 (for himself, Mr. Burton of Indiana,
			 Mr. Wilson of South Carolina,
			 Mr. Sessions, and
			 Mr. Fleming) introduced the following
			 bill; which was referred to the Committee
			 on Energy and Commerce, and in addition to the Committees on
			 Education and the
			 Workforce, Ways and
			 Means, the
			 Judiciary, Natural
			 Resources, Rules,
			 House Administration,
			 Appropriations,
			 Oversight and Government
			 Reform, and the
			 Budget, for a period to be subsequently determined by the
			 Speaker, in each case for consideration of such provisions as fall within the
			 jurisdiction of the committee concerned

		A BILL
		To provide for incentives to encourage health insurance
		  coverage, and for other purposes.

		1.Short title; table of
			 contents
			(a)Short
			 titleThis Act may be cited
			 as the Empowering Patients First
			 Act.
			(b)Table of
			 contentsThe table of contents for this Act is as follows:

					Sec. 1. Short title; table of contents.
					Sec. 2. Repeal of PPACA and health care-related HCERA
				provisions.
					Title I—Tax Incentives for Maintaining Health Insurance
				Coverage
					Sec. 101. Refundable tax credit for health insurance costs of
				low-income individuals.
					Sec. 102. Advance payment of credit as premium payment for
				qualified health insurance.
					Sec. 103. Election of tax credit instead of alternative
				government or group plan benefits.
					Sec. 104. Deduction for qualified health insurance costs of
				individuals.
					Sec. 105. Limitation on abortion funding.
					Sec. 106. No government discrimination against certain health
				care entities.
					Sec. 107. Equal employer contribution rule to promote
				choice.
					Sec. 108. Limitations on State restrictions on employer
				auto-enrollment.
					Sec. 109. Credit for small employers adopting auto-enrollment
				and defined contribution options.
					Sec. 110. HSA modifications and clarifications.
					Title II—Health Insurance Pooling Mechanisms for
				Individuals
					Subtitle A—Safety Net for Individuals with Pre-Existing
				Conditions
					Sec. 201. Requiring operation of high-risk pool or other
				mechanism as condition for availability of tax credit.
					Subtitle B—Federal Block Grants for State Insurance
				Expenditures
					Sec. 211. Federal block grants for State insurance
				expenditures.
					Subtitle C—Health Care Access and Availability
					Sec. 221. Expansion of access and choice through individual
				membership associations (IMAs).
					Subtitle D—Small Business Health Fairness
					Sec. 231. Short title.
					Sec. 232. Rules governing association health plans.
					Sec. 233. Clarification of treatment of single employer
				arrangements.
					Sec. 234. Enforcement provisions relating to association health
				plans.
					Sec. 235. Cooperation between Federal and State
				authorities.
					Sec. 236. Effective date and transitional and other
				rules.
					Title III—Interstate Market for Health Insurance
					Sec. 301. Cooperative governing of individual health insurance
				coverage.
					Title IV—Safety Net Reforms
					Sec. 401. Requiring outreach and coverage before expansion of
				eligibility.
					Sec. 402. Easing administrative barriers to State cooperation
				with employer-sponsored insurance coverage.
					Sec. 403. Improving beneficiary choice in SCHIP.
					Title V—Medical Liability Reforms
					Sec. 501. Short title.
					Sec. 502. Findings and purpose.
					Sec. 503. Encouraging speedy resolution of claims.
					Sec. 504. Compensating patient injury.
					Sec. 505. Maximizing patient recovery.
					Sec. 506. Additional health benefits.
					Sec. 507. Punitive damages.
					Sec. 508. Limitation on recovery in a health care lawsuit based
				on compliance with best practice guidelines.
					Sec. 509. State grants to create administrative health care
				tribunals.
					Sec. 510. Authorization of payment of future damages to
				claimants in health care lawsuits.
					Sec. 511. Definitions.
					Sec. 512. Effect on other laws.
					Sec. 513. State flexibility and protection of States’
				rights.
					Sec. 514. Applicability; effective date.
					Title VI—Wellness and Prevention
					Sec. 601. Providing financial incentives for treatment
				compliance.
					Title VII—Transparency and Insurance Reform Measures
					Sec. 701. Receipt and response to requests for claim
				information.
					Title VIII—Quality
					Sec. 801. Prohibition on certain uses of data obtained from
				comparative effectiveness research; accounting for personalized medicine and
				differences in patient treatment response.
					Sec. 802. Establishment of performance-based quality
				measures.
					Title IX—State Transparency Plan Portal
					Sec. 901. Providing information on health coverage options and
				health care providers.
					Title X—Patient Freedom of Choice
					Sec. 1001. Guaranteeing freedom of choice and contracting for
				patients under Medicare.
					Sec. 1002. Preemption of State laws limiting charges for
				eligible professional services.
					Sec. 1003. Health care provider licensure cannot be conditioned
				on participation in a health plan.
					Sec. 1004. Bad debt deduction for doctors to partially offset
				the cost of providing uncompensated care required to be provided under
				amendments made by the Emergency Medical Treatment and Labor Act.
					Sec. 1005. Right of contract with health care
				providers.
					Title XI—Incentives to reduce physician shortages
					Subtitle A—Federally Supported Student Loan Funds for Medical
				Students
					Sec. 1101. Federally supported student loan funds for medical
				students.
					Subtitle B—Loan Forgiveness for Primary Care
				Providers
					Sec. 1111. Loan forgiveness for primary care
				providers.
					Title XII—Quality Health Care Coalition
					Sec. 1201. Quality Health Care Coalition.
					Title XIII—Offsets
					Subtitle A—Discretionary spending limits
					Sec. 1301. Discretionary spending limits.
					Subtitle B—Savings from health care efficiencies
					Sec. 1311. Medicare DSH report and payment adjustments in
				response to coverage expansion.
					Sec. 1312. Reduction in Medicaid DSH.
					Subtitle C—Fraud, Waste, and Abuse
					Sec. 1321. Provide adequate funding to HHS OIG and
				HCFAC.
					Sec. 1322. Improved enforcement of the Medicare secondary payor
				provisions.
					Sec. 1323. Strengthen Medicare provider enrollment standards
				and safeguards.
					Sec. 1324. Tracking banned providers across State
				lines.

			2.Repeal of PPACA
			 and health care-related HCERA provisions
			(a)PPACAEffective as of the enactment of the
			 Patient Protection and Affordable Care Act (Public Law 111–148), such Act is
			 repealed, and the provisions of law amended or repealed by such Act are
			 restored or revived as if such Act had not been enacted.
			(b)Health
			 Care-Related Provisions in the Health Care and Education Reconciliation Act of
			 2010Effective as of the enactment of the Health Care and
			 Education Reconciliation Act of 2010 (Public Law 111–152), title I and subtitle
			 B of title II of such Act are repealed, and the provisions of law amended or
			 repealed by such title or subtitle, respectively, are restored or revived as if
			 such title and subtitle had not been enacted.
			ITax
			 Incentives for Maintaining Health Insurance Coverage
			101.Refundable tax
			 credit for health insurance costs of low-income individuals
				(a)In
			 generalSubpart C of part IV of subchapter A of chapter 1 of the
			 Internal Revenue Code of 1986 (relating to refundable credits) is amended by
			 inserting after section 36A the following new section:

						36B.Health
				insurance costs of low-income individuals
							(a)In
				generalIn the case of an individual, there shall be allowed as a
				credit against the tax imposed by subtitle A the aggregate amount paid by the
				taxpayer for coverage of the taxpayer and the taxpayer’s qualifying family
				members under qualified health insurance for eligible coverage months beginning
				in the taxable year.
							(b)Limitations
								(1)In
				generalThe amount allowable
				as a credit under subsection (a) for the taxable year shall not exceed the
				lesser of—
									(A)the sum of the
				monthly limitations for months during such taxable year that the taxpayer or
				the taxpayer’s qualifying family members is an eligible individual, and
									(B)the aggregate
				premiums paid by the taxpayer for the taxable year for coverage described in
				subsection (a).
									(2)Monthly
				limitationThe monthly
				limitation for any month is the credit percentage of 1/12
				of the sum of—
									(A)$2,000 for
				coverage of the taxpayer ($4,000 in the case of a joint return for coverage of
				the taxpayer and the taxpayer’s spouse), and
									(B)$500 for coverage
				of each dependent of the taxpayer.
									(3)Credit
				percentage
									(A)In
				generalFor purposes of this
				section, the term credit percentage means 100 percent reduced by 1
				percentage point for each $1,000 (or fraction thereof) by which the taxpayer’s
				adjusted gross income for the taxable year exceeds the threshold amount.
									(B)Threshold
				amountFor purposes of this paragraph, the term threshold
				amount means, with respect to any taxpayer for any taxable year, 200
				percent of the Federal poverty guideline (as determined by the Secretary of
				Health and Human Service for the taxable year) applicable to the
				taxpayer.
									(4)Only 2
				dependents taken into accountNot more than 2 dependents of the
				taxpayer may be taken into account under paragraphs (2)(C) and (3)(B).
								(5)Inflation
				adjustmentIn the case of any
				taxable year beginning in a calendar year after 2011, each dollar amount
				contained in paragraph (2) shall be increased by an amount equal to—
									(A)such dollar
				amount, multiplied by
									(B)the cost-of-living
				adjustment determined under section 1(f)(3) for the calendar year in which the
				taxable year begins, determined by substituting calendar year
				2010 for calendar year 1992 in subparagraph (B)
				thereof.
									Any increase determined under the
				preceding sentence shall be rounded to the nearest multiple of $50.(c)Eligible
				coverage monthFor purposes of this section, the term
				eligible coverage month means, with respect to any individual, any
				month if, as of the first day of such month, the individual—
								(1)is covered by
				qualified health insurance,
								(2)does not have
				other specified coverage, and
								(3)is not imprisoned
				under Federal, State, or local authority.
								(d)Qualifying
				family memberFor purposes of this section, the term
				qualifying family member means—
								(1)in the case of a
				joint return, the taxpayer’s spouse, and
								(2)any dependent of
				the taxpayer.
								(e)Qualified health
				insuranceFor purposes of this section, the term qualified
				health insurance means health insurance coverage (other than excepted
				benefits as defined in section 9832(c)) which constitutes medical care.
							(f)Other specified
				coverageFor purposes of this section, an individual has other
				specified coverage for any month if, as of the first day of such month—
								(1)Coverage under
				Medicare, Medicaid, or SCHIPSuch individual—
									(A)is entitled to
				benefits under part A of title XVIII of the Social Security Act or is enrolled
				under part B of such title, or
									(B)is enrolled in the
				program under title XIX or XXI of such Act (other than under section 1928 of
				such Act).
									(2)Certain other
				coverageSuch individual—
									(A)is enrolled in a
				health benefits plan under chapter 89 of title 5, United States Code,
									(B)is entitled to
				receive benefits under chapter 55 of title 10, United States Code,
									(C)in entitled to receive benefits under
				chapter 17 of title 38, United States Code, or
									(D)is enrolled in a
				group health plan (within the meaning of section 5000(b)(1)) which is
				subsidized by the employer.
									(g)Special
				rules
								(1)Coordination
				with advance payments of credit; recapture of excess advance
				paymentsWith respect to any taxable year—
									(A)the amount which
				would (but for this subsection) be allowed as a credit to the taxpayer under
				subsection (a) shall be reduced (but not below zero) by the aggregate amount
				paid on behalf of such taxpayer under section 7529 for months beginning in such
				taxable year, and
									(B)the tax imposed by
				section 1 for such taxable year shall be increased by the excess (if any)
				of—
										(i)the aggregate amount paid on behalf of such
				taxpayer under section 7529 for months beginning in such taxable year,
				over
										(ii)the amount which would (but for this
				subsection) be allowed as a credit to the taxpayer under subsection (a).
										(2)Coordination
				with other deductionsAmounts taken into account under subsection
				(a) shall not be taken into account in determining—
									(A)any deduction
				allowed under section 162(l), 213, or 224, or
									(B)any credit allowed
				under section 35.
									(3)Medical and
				health savings accountsAmounts distributed from an Archer MSA
				(as defined in section 220(d)) or from a health savings account (as defined in
				section 223(d)) shall not be taken into account under subsection (a).
								(4)Denial of credit
				to dependents and nonpermanent resident alien individualsNo
				credit shall be allowed under this section to any individual who is—
									(A)not a citizen or lawful permanent resident
				of the United States for the calendar year in which the taxable year begins,
				or
									(B)a dependent with
				respect to another taxpayer for a taxable year beginning in the calendar year
				in which such individual’s taxable year begins.
									(5)Insurance which
				covers other individualsFor purposes of this section, rules
				similar to the rules of section 213(d)(6) shall apply with respect to any
				contract for qualified health insurance under which amounts are payable for
				coverage of an individual other than the taxpayer and qualifying family
				members.
								(6)Treatment of
				paymentsFor purposes of this section—
									(A)Payments by
				secretaryPayments made by the Secretary on behalf of any
				individual under section 7529 (relating to advance payment of credit for health
				insurance costs of low-income individuals) shall be treated as having been made
				by the taxpayer on the first day of the month for which such payment was
				made.
									(B)Payments by
				taxpayerPayments made by the taxpayer for eligible coverage
				months shall be treated as having been made by the taxpayer on the first day of
				the month for which such payment was made.
									(7)RegulationsThe
				Secretary may prescribe such regulations and other guidance as may be necessary
				or appropriate to carry out this section, section 6050W, and section
				7529.
								.
				(b)Conforming
			 amendments
					(1)Paragraph (2) of
			 section 1324(b) of title 31, United States Code, is amended by inserting
			 36B, after 36A,.
					(2)The table of
			 sections for subpart C of part IV of subchapter A of chapter 1 of the Internal
			 Revenue Code of 1986 is amended by inserting after the item relating to section
			 36A the following new item:

								Sec. 36B. Health insurance costs of low-income
				individuals.

							.
					(c)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2011.
				(d)Sense of
			 CongressIt is the sense of
			 Congress that the cost of the advanceable refundable credit under sections 36B
			 and 7529 of the Internal Revenue Code of 1986, as added by this title, will be
			 offset by savings derived from the provisions of title XIII.
				102.Advance payment of
			 credit as premium payment for qualified health insurance
				(a)In
			 generalChapter 77 of the Internal Revenue Code of 1986 (relating
			 to miscellaneous provisions) is amended by adding at the end the
			 following:

						7529.Advance
				payment of credit as premium payment for qualified health insurance
							(a)General
				ruleNot later than January
				1, 2012, the Secretary shall establish a program for making payments to
				providers of qualified health insurance (as defined in section 36B(e)) on
				behalf of taxpayers eligible for the credit under section 36B. Except as
				otherwise provided by the Secretary, such payments shall be made on the basis
				of the adjusted gross income of the taxpayer for the preceding taxable
				year.
							(b)Certification
				process and proof of coverageFor purposes of this section,
				payments may be made pursuant to subsection (a) only with respect to
				individuals for whom a qualified health insurance costs credit eligibility
				certificate is in
				effect.
							.
				(b)Disclosure of
			 return information for purposes of advance payment of credit as premiums for
			 qualified health insurance
					(1)In
			 generalSubsection (l) of section 6103 of such Code is amended by
			 adding at the end the following new paragraph:

							(21)Disclosure of
				return information for purposes of advance payment of credit as premiums for
				qualified health insuranceThe Secretary may, on behalf of taxpayers
				eligible for the credit under section 36B, disclose to a provider of qualified
				health insurance (as defined in section 36(e)), and persons acting on behalf of
				such provider, return information with respect to any such taxpayer only to the
				extent necessary (as prescribed by regulations issued by the Secretary) to
				carry out the program established by section 7529 (relating to advance payment
				of credit as premium payment for qualified health
				insurance).
							.
					(2)Confidentiality
			 of informationParagraph (3) of section 6103(a) of such Code is
			 amended by striking or (20) and inserting (20), or
			 (21).
					(3)Unauthorized
			 disclosureParagraph (2) of
			 section 7213(a) of such Code is amended by striking or (20) and
			 inserting (20), or (21).
					(c)Information
			 reporting
					(1)In
			 generalSubpart B of part III of subchapter A of chapter 61 of
			 such Code (relating to information concerning transactions with other persons)
			 is amended by adding at the end the following new section:

							6050X.Returns
				relating to credit for health insurance costs of low-income
				individuals
								(a)Requirement of
				reportingEvery person who is
				entitled to receive payments for any month of any calendar year under section
				7529 (relating to advance payment of credit as premium payment for qualified
				health insurance) with respect to any individual shall, at such time as the
				Secretary may prescribe, make the return described in subsection (b) with
				respect to each such individual.
								(b)Form and manner
				of returnsA return is described in this subsection if such
				return—
									(1)is in such form as
				the Secretary may prescribe, and
									(2)contains—
										(A)the name, address,
				and TIN of each individual referred to in subsection (a),
										(B)the number of months for which amounts were
				entitled to be received with respect to such individual under section 7529
				(relating to advance payment of credit as premium payment for qualified health
				insurance),
										(C)the amount
				entitled to be received for each such month, and
										(D)such other
				information as the Secretary may prescribe.
										(c)Statements To be
				furnished to individuals with respect to whom information is
				requiredEvery person required to make a return under subsection
				(a) shall furnish to each individual whose name is required to be set forth in
				such return a written statement showing—
									(1)the name and
				address of the person required to make such return and the phone number of the
				information contact for such person, and
									(2)the information
				required to be shown on the return with respect to such individual.
									The
				written statement required under the preceding sentence shall be furnished on
				or before January 31 of the year following the calendar year for which the
				return under subsection (a) is required to be
				made..
					(2)Assessable
			 penalties
						(A)Subparagraph (B)
			 of section 6724(d)(1) of such Code (relating to definitions) is amended by
			 striking or at the end of clause (xxii), by striking
			 and at the end of clause (xxiii) and inserting
			 or, and by inserting after clause (xxiii) the following new
			 clause:

								(xxiv)section 6050X (relating to returns relating
				to credit for health insurance costs of low-income individuals),
				and
								.
						(B)Paragraph (2) of
			 section 6724(d) of such Code is amended by striking or at the
			 end of subparagraph (EE), by striking the period at the end of subparagraph
			 (FF) and inserting , or, and by adding after subparagraph (FF)
			 the following new subparagraph:

								(GG)section 6050X (relating to returns relating
				to credit for health insurance costs of low-income
				individuals).
								.
						(d)Clerical
			 amendments
					(1)The table of
			 sections for chapter 77 of such Code is amended by adding at the end the
			 following new item:

								Sec. 7529. Advance payment of credit as
				premium payment for qualified health
				insurance.

							.
					(2)The table of
			 sections for subpart B of part III of subchapter A of chapter 61 of such Code
			 is amended by adding at the end the following new item:

								Sec. 6050X. Returns relating to credit for health insurance
				costs of low-income
				individuals.

							.
					(e)Effective
			 dateThe amendments made by this section shall take effect on the
			 date of the enactment of this Act.
				103.Election of tax
			 credit instead of alternative government or group plan benefits
				(a)In
			 generalNotwithstanding any other provision of law, an individual
			 who is otherwise eligible for benefits under a health program (as defined in
			 subsection (c)) may elect, in a form and manner specified by the Secretary of
			 Health and Human Services in consultation with the Secretary of the Treasury,
			 to receive a tax credit described in section 36B of the Internal Revenue Code
			 of 1986 (which may be used for the purpose of health insurance coverage) in
			 lieu of receiving any benefits under such program.
				(b)Effective
			 dateAn election under subsection (a) may first be made for
			 calendar year 2012 and any such election shall be effective for such period
			 (not less than one calendar year) as the Secretary of Health and Human Services
			 shall specify, in consultation with the Secretary of the Treasury.
				(c)Health program
			 definedFor purposes of this section, the term health
			 program means any of the following:
					(1)MedicareThe
			 Medicare program under part A of title XVIII of the Social Security Act.
					(2)MedicaidThe
			 Medicaid program under title XIX of such Act (including such a program
			 operating under a Statewide waiver under section 1115 of such Act).
					(3)SCHIPThe
			 State children’s health insurance program under title XXI of such Act.
					(4)TRICAREThe
			 TRICARE program under chapter 55 of title 10, United States Code.
					(5)Veterans
			 benefitsCoverage for benefits under chapter 17 of title 38,
			 United States Code.
					(6)FEHBPCoverage under chapter 89 of title 5,
			 United States Code.
					(7)Subsidized group
			 health plansCoverage under a
			 group health plan (within the meaning of section 5000(b)(1)) which is
			 subsidized by the employer.
					(d)Other Social
			 Security benefits not waivedAn election to waive the benefits
			 described in subsection (c)(1) shall not result in the waiver of any other
			 benefits under the Social Security Act.
				104.Deduction for
			 qualified health insurance costs of individuals
				(a)In
			 generalPart VII of subchapter B of chapter 1 of the Internal
			 Revenue Code of 1986 (relating to additional itemized deductions) is amended by
			 redesignating section 224 as section 225 and by inserting after section 223 the
			 following new section:

						224.Costs of
				qualified health insurance
							(a)In
				generalIn the case of an individual, there shall be allowed as a
				deduction an amount equal to the amount paid during the taxable year for
				coverage for the taxpayer, his spouse, and dependents under qualified health
				insurance.
							(b)LimitationIn
				the case of any taxpayer for any taxable year, the deduction under subsection
				(a) shall not exceed an amount that would cause the taxpayer’s Federal income
				tax liability to be reduced by more than the average value of the national
				health exclusion for employer sponsored insurance as determined by calculating
				the value of the exclusion for each household followed by calculating the
				average of those values.
							(c)Qualified health
				insuranceFor purposes of this section, the term qualified
				health insurance has the meaning given such term by section
				36B(e).
							(d)Special
				rules
								(1)Coordination
				with medical deduction, etcAny amount paid by a taxpayer for
				insurance to which subsection (a) applies shall not be taken into account in
				computing the amount allowable to the taxpayer as a deduction under section
				162(l) or 213(a). Any amount taken into account in determining the credit
				allowed under section 35 or 36B shall not be taken into account for purposes of
				this section.
								(2)Deduction not
				allowed for self-employment tax purposesThe deduction allowable
				by reason of this section shall not be taken into account in determining an
				individual’s net earnings from self-employment (within the meaning of section
				1402(a)) for purposes of chapter
				2.
								.
				(b)Deduction
			 allowed in computing adjusted gross incomeSubsection (a) of
			 section 62 of such Code is amended by inserting before the last sentence the
			 following new paragraph:

						(22)Costs of
				qualified health insuranceThe deduction allowed by section
				224.
						.
				(c)Clerical
			 amendmentThe table of sections for part VII of subchapter B of
			 chapter 1 of such Code is amended by redesignating the item relating to section
			 224 as an item relating to section 225 and inserting before such item the
			 following new item:

							Sec. 224. Costs of qualified health
				insurance.

						.
				(d)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2011.
				105.Limitation on
			 abortion fundingNo funds
			 authorized under, or credits or deductions allowed under the Internal Revenue
			 Code of 1986 by reason of, this Act (or any amendment made by this Act) may be
			 used to pay for any abortion or to cover any part of the costs of any health
			 plan that includes coverage of abortion, except in the case where a woman
			 suffers from a physical disorder, physical injury, or physical illness that
			 would, as certified by a physician, place the woman in danger of death unless
			 an abortion is performed, including a life-endangering physical condition
			 caused by or arising from the pregnancy itself, or unless the pregnancy is the
			 result of an act of rape or incest.
			106.No government
			 discrimination against certain health care entities
				(a)Non-DiscriminationA
			 Federal agency or program, and any State or local government that receives
			 Federal financial assistance under this Act or any amendment made by this Act
			 (either directly or indirectly), may not subject any individual or
			 institutional health care entity to discrimination on the basis that the health
			 care entity does not provide, pay for, provide coverage of, or refer for
			 abortions.
				(b)Health care
			 entity definedFor purposes of this section, the term
			 health care entity includes an individual physician or other
			 health care professional, a hospital, a provider-sponsored organization, a
			 health maintenance organization, a health insurance plan, or any other kind of
			 health care facility, organization, or plan.
				(c)Remedies
					(1)In
			 generalThe courts of the United States shall have jurisdiction
			 to prevent and redress actual or threatened violations of this section by
			 issuing any form of legal or equitable relief, including—
						(A)injunctions
			 prohibiting conduct that violates this section; and
						(B)orders preventing
			 the disbursement of all or a portion of Federal financial assistance to a State
			 or local government, or to a specific offending agency or program of a State or
			 local government, until such time as the conduct prohibited by this section has
			 ceased.
						(2)Commencement of
			 actionAn action under this subsection may be instituted
			 by—
						(A)any health care
			 entity that has standing to complain of an actual or threatened violation of
			 this section; or
						(B)the Attorney
			 General of the United States.
						(d)AdministrationThe Secretary of Health and Human Services
			 shall designate the Director of the Office for Civil Rights of the Department
			 of Health and Human Services—
					(1)to receive
			 complaints alleging a violation of this section;
					(2)subject to
			 paragraph (3), to pursue the investigation of such complaints in coordination
			 with the Attorney General; and
					(3)in the case of a
			 complaint related to a Federal agency (other than with respect to the
			 Department of Health and Human Services) or program administered through such
			 other agency or any State or local government receiving Federal financial
			 assistance through such other agency, to refer the complaint to the appropriate
			 office of such other agency.
					107.Equal employer
			 contribution rule to promote choice
				(a)Excise tax for
			 failure To provide contribution electionSection 5000 of the
			 Internal Revenue Code of 1986 is amended by adding at the end the following new
			 subsection:

						(e)Health care
				contribution election
							(1)In
				generalSubsection (a) shall not apply in the case of a group
				health plan with respect to which the requirements of paragraphs (2) and (3)
				are met.
							(2)Contribution
				electionThe requirement of
				this paragraph is met with respect to a group health plan if any employee of an
				employer (who but for this paragraph would be covered by such plan) may elect
				to have the employer or employee organization pay an amount which is not less
				than the contribution amount to any provider of health insurance coverage
				(other than excepted benefits as defined in section 9832(c)) which constitutes
				medical care of the individual or individual’s spouse or dependents in lieu of
				such group health plan coverage otherwise provided or contributed to by the
				employer with respect to such employee.
							(3)Pre-existing
				conditions
								(A)In
				generalThe requirement of this paragraph is met with respect to
				health insurance coverage provided to a participant or beneficiary by any
				health insurance issuer if, under such plan the requirements of section 9801
				are met with respect to the participant or beneficiary.
								(B)Enforcement with
				respect to individual electionFor purposes of subparagraph (A),
				any health insurance coverage with respect to the participant or beneficiary
				shall be treated as health insurance coverage under a group health plan to
				which section 9801 applies.
								(4)Contribution
				amountFor purposes of this section, the term contribution
				amount means, with respect to an individual under a group health plan,
				the portion of the applicable premium of such individual under such plan (as
				determined under section 4980B(f)(4)) which is not paid by the individual. In
				the case that the employer offers more than one group health plan, the
				contribution amount shall be the average amount of the applicable premiums
				under such plans.
							(5)Group health
				planFor purpose of this
				subsection, subsection (d) shall not apply.
							(6)Application to
				FEHBPNotwithstanding any other provision of law, the Office of
				Personnel Management shall carry out the health benefits program under chapter
				89 of title 5, United States Code, consistent with the requirements of this
				subsection.
							.
				(b)Requirement of
			 equal contributions to all FEHBP plansSection 8906 of title 5,
			 United States Code, is amended by adding at the end the following new
			 subsection:

						(j)Notwithstanding
				the previous provisions of this section the Office of Personnel Management
				shall revise the amount of the Government contribution made under this section
				in a manner so that—
							(1)the amount of such
				contribution does not change based on the health benefits plan in which the
				individual is enrolled; and
							(2)the aggregate
				amount of such contributions is estimated to be equal to the aggregate amount
				of such contributions if this subsection did not
				apply.
							.
				(c)ERISA conforming
			 amendments
					(1)Exception from
			 HIPAA requirements for benefits provided under health care contribution
			 electionSection 732 of the Employee Retirement Income Security
			 Act of 1974 (29 U.S.C. 1191a) is amended by adding at the end the following new
			 subsection:

							(e)Health care
				contribution election
								(1)In
				generalThe requirements of
				this part shall not apply in the case of health insurance coverage (other than
				excepted benefits as defined in section 9832(c) of the Internal Revenue Code of
				1986)—
									(A)which is provided
				to a participant or beneficiary by a health insurance issuer under a group
				health plan, and
									(B)with respect to
				which the requirements of paragraphs (2) and (3) are met.
									(2)Contribution
				electionThe requirement of
				this paragraph is met with respect to health insurance coverage provided to a
				participant or beneficiary by any health insurance issuer under a group health
				plan if, under such plan—
									(A)the participant
				may elect such coverage for any period of coverage in lieu of health insurance
				coverage otherwise provided under such plan for such period, and
									(B)in the case of
				such an election, the plan sponsor is required to pay to such issuer for the
				elected coverage for such period an amount which is not less than the
				contribution amount for such health insurance coverage otherwise provided under
				such plan for such period.
									(3)Pre-existing
				conditions
									(A)In
				generalThe requirement of this paragraph is met with respect to
				health insurance coverage provided to a participant or beneficiary by any
				health insurance issuer if, under such plan the requirements of section 701 are
				met with respect to the participant or beneficiary.
									(B)Enforcement with
				respect to individual electionFor purposes of subparagraph (A),
				any health insurance coverage with respect to the participant or beneficiary
				shall be treated as health insurance coverage under a group health plan to
				which section 701 applies.
									(4)Contribution
				amount
									(A)In
				generalFor purposes of this section, the term contribution
				amount means, with respect to any period of health insurance coverage
				offered to a participant or beneficiary, the portion of the applicable premium
				of such participant or beneficiary under such plan which is not paid by such
				participant or beneficiary. In the case that the employer offers more than one
				group health plan, the contribution amount shall be the average amount of the
				applicable premiums under such plans.
									(B)Applicable
				premiumFor purposes of subparagraph (A), the term
				applicable premium means, with respect to any period of health
				insurance coverage of a participant or beneficiary under a group health plan,
				the cost to the plan for such period of such coverage for similarly situated
				beneficiaries (without regard to whether such cost is paid by the plan sponsor
				or the participant or
				beneficiary).
									.
					(2)Exemption from
			 fiduciary liabilitySection 404 of such Act (29 U.S.C. 1104) is
			 amended by adding at the end the following new subsection:

							(e)The plan sponsor
				of a group health plan (as defined in section 733(a)) shall not be treated as
				breaching any of the responsibilities, obligations, or duties imposed upon
				fiduciaries by this title in the case of any individual who is a participant or
				beneficiary under such plan solely because of the extent to which the plan
				sponsor provides, in the case of such individual, some or all of such benefits
				by means of payment of contribution amounts pursuant to a contribution election
				under section 732(e), irrespective of the amount or type of benefits that would
				otherwise be provided to such individual under such
				plan.
							.
					(d)Exception from
			 HIPAA requirements under IRC for benefits provided under health care
			 contribution electionSection 9831 of the Internal Revenue Code
			 of 1986 (relating to general exceptions) is amended by adding at the end the
			 following new subsection:

						(d)Health care
				contribution election
							(1)In
				generalThe requirements of
				this chapter shall not apply in the case of health insurance coverage (other
				than excepted benefits as defined in section 9832(c))—
								(A)which is provided
				to a participant or beneficiary by a health insurance issuer under a group
				health plan, and
								(B)with respect to
				which the requirements of paragraphs (2) and (3) are met.
								(2)Contribution
				electionThe requirement of
				this paragraph is met with respect to health insurance coverage provided to a
				participant or beneficiary by any health insurance issuer under a group health
				plan if, under such plan—
								(A)the participant
				may elect such coverage for any period of coverage in lieu of health insurance
				coverage otherwise provided under such plan for such period, and
								(B)in the case of
				such an election, the plan sponsor is required to pay to such issuer for the
				elected coverage for such period an amount which is not less than the
				contribution amount for such health insurance coverage otherwise provided under
				such plan for such period.
								(3)Pre-existing
				conditions
								(A)In
				generalThe requirement of this paragraph is met with respect to
				health insurance coverage provided to a participant or beneficiary by any
				health insurance issuer if, under such plan the requirements of section 9801
				are met with respect to the participant or beneficiary.
								(B)Enforcement with
				respect to individual electionFor purposes of subparagraph (A),
				any health insurance coverage with respect to the participant or beneficiary
				shall be treated as health insurance coverage under a group health plan to
				which section 9801 applies.
								(4)Contribution
				amount
								(A)In
				generalFor purposes of this subsection, the term
				contribution amount means, with respect to any period of health
				insurance coverage offered to a participant or beneficiary, the portion of the
				applicable premium of such participant or beneficiary under such plan which is
				not paid by such participant or beneficiary. In the case that the employer
				offers more than one group health plan, the contribution amount shall be the
				average amount of the applicable premiums under such plans.
								(B)Applicable
				premiumFor purposes of subparagraph (A), the term
				applicable premium means, with respect to any period of health
				insurance coverage of a participant or beneficiary under a group health plan,
				the cost to the plan for such period of such coverage for similarly situated
				beneficiaries (without regard to whether such cost is paid by the plan sponsor
				or the participant or
				beneficiary).
								.
				(e)Exception from
			 HIPAA requirements under the PHSA for benefits provided under health care
			 contribution electionSection
			 2721 of the Public Health Service Act (42 U.S.C. 300gg–21) is amended—
					(1)by redesignating
			 subsection (e) as subsection (f); and
					(2)by inserting after
			 subsection (d) the following new subsection:

							(e)Health care
				contribution election
								(1)In
				generalThe requirements of
				subparts 1 through 3 shall not apply in the case of health insurance coverage
				(other than excepted benefits as defined in section 9832(c) of the Internal
				Revenue Code of 1986)—
									(A)which is provided
				to a participant or beneficiary by a health insurance issuer under a group
				health plan, and
									(B)with respect to
				which the requirements of paragraphs (2) and (3) are met.
									(2)Contribution
				electionThe requirement of
				this paragraph is met with respect to health insurance coverage provided to a
				participant or beneficiary by any health insurance issuer under a group health
				plan if, under such plan—
									(A)the participant
				may elect such coverage for any period of coverage in lieu of health insurance
				coverage otherwise provided under such plan for such period, and
									(B)in the case of
				such an election, the plan sponsor is required to pay to such issuer for the
				elected coverage for such period an amount which is not less than the
				contribution amount for such health insurance coverage otherwise provided under
				such plan for such period.
									(3)Pre-existing
				conditions
									(A)In
				generalThe requirement of this paragraph is met with respect to
				health insurance coverage provided to a participant or beneficiary by any
				health insurance issuer if, under such plan the requirements of section 2701
				are met with respect to the participant or beneficiary.
									(B)Enforcement with
				respect to individual electionFor purposes of subparagraph (A),
				any health insurance coverage with respect to the participant or beneficiary
				shall be treated as health insurance coverage under a group health plan to
				which section 2701 applies.
									(4)Contribution
				amount
									(A)In
				generalFor purposes of this section, the term contribution
				amount means, with respect to any period of health insurance coverage
				offered to a participant or beneficiary, the portion of the applicable premium
				of such participant or beneficiary under such plan which is not paid by such
				participant or beneficiary. In the case that the employer offers more than one
				group health plan, the contribution amount shall be the average amount of the
				applicable premiums under such plans.
									(B)Applicable
				premiumFor purposes of subparagraph (A), the term
				applicable premium means, with respect to any period of health
				insurance coverage of a participant or beneficiary under a group health plan,
				the cost to the plan for such period of such coverage for similarly situated
				beneficiaries (without regard to whether such cost is paid by the plan sponsor
				or the participant or
				beneficiary).
									.
					108.Limitations on State
			 restrictions on employer auto-enrollment
				(a)In
			 generalNo State shall
			 establish a law that prevents an employer from instituting auto-enrollment
			 which meets the requirements of subsection (b) for coverage of a participant or
			 beneficiary under a group health plan, or health insurance coverage offered in
			 connection with such a plan, so long as the participant or beneficiary has the
			 option of declining such coverage.
				(b)Automatic
			 enrollment for employer sponsored health benefits
					(1)In
			 generalThe requirement of
			 this subsection with respect to an employer and an employee is that the
			 employer automatically enroll such employee into the employment-based health
			 benefits plan for individual coverage under the plan option with the lowest
			 applicable employee premium.
					(2)Opt-outIn
			 no case may an employer automatically enroll an employee in a plan under
			 paragraph (1) if such employee makes an affirmative election to opt-out of such
			 plan or to elect coverage under an employment-based health benefits plan
			 offered by such employer. An employer shall provide an employee with a 30-day
			 period to make such an affirmative election before the employer may
			 automatically enroll the employee in such a plan.
					(3)Notice
			 requirements
						(A)In
			 generalEach employer described in paragraph (1) who
			 automatically enrolls an employee into a plan as described in such paragraph
			 shall provide the employees, within a reasonable period before the beginning of
			 each plan year (or, in the case of new employees, within a reasonable period
			 before the end of the enrollment period for such a new employee), written
			 notice of the employees’ rights and obligations relating to the automatic
			 enrollment requirement under such paragraph. Such notice must be comprehensive
			 and understood by the average employee to whom the automatic enrollment
			 requirement applies.
						(B)Inclusion of
			 specific informationThe written notice under 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
			 enrolled in the absence of an affirmative election by the employee.
						(c)ConstructionNothing in this section shall be construed
			 to supersede State law which establishes, implements, or continues in effect
			 any standard or requirement relating to employers in connection with payroll or
			 the sponsoring of employer sponsored health insurance coverage except to the
			 extent that such standard or requirement prevents an employer from instituting
			 the auto-enrollment described in subsection (a).
				(d)Non-Application
			 to excepted benefitsFor purposes of this section, the term
			 group health plan does not include excepted benefits (as defined
			 in section 2781(c) of the Public Health Service Act (42 U.S.C.
			 300gg–91(c)).
				109.Credit for small
			 employers adopting auto-enrollment and defined contribution options
				(a)In
			 generalSubpart D of part IV
			 of subchapter A of
			 chapter
			 1 of the Internal Revenue Code of 1986 (relating to
			 business-related credits) is amended by adding at the end the following new
			 section:

						45R.Auto-enrollment
				and defined contribution option for health benefits plans of small
				employers
							(a)In
				generalFor purposes of
				section 38, in the case of a small employer, the health benefits plan
				implementation credit determined under this section for the taxable year is an
				amount equal to 100 percent of the amount paid or incurred by the taxpayer
				during the taxable year for qualified health benefits expenses.
							(b)LimitationThe credit determined under subsection (a)
				with respect to any taxpayer for any taxable year shall not exceed the excess
				of—
								(1)$1,500,
				over
								(2)sum of the credits
				determined under subsection (a) with respect to such taxpayer for all preceding
				taxable years.
								(c)Qualified health
				benefits expensesFor
				purposes of this section, the term qualified health benefits
				auto-enrollment expenses means, with respect to any taxable year,
				amounts paid or incurred by the taxpayer during such taxable year for—
								(1)establishing
				auto-enrollment which meets the requirements of section 107 of the
				Empowering Patients First Act
				for coverage of a participant or beneficiary under a group health plan, or
				health insurance coverage offered in connection with such a plan, and
								(2)implementing the
				employer contribution option for health insurance coverage pursuant to section
				5000(e)(2).
								(d)Qualified small
				employerFor purposes of this section, the term qualified
				small employer means any employer for any taxable year if the number of
				employees employed by such employer during such taxable year does not exceed
				50. All employers treated as a single employer under section (a) or (b) of
				section 52 shall be treated as a single employer for purposes of this
				section.
							(e)No double
				benefitNo deduction or credit shall be allowed under any other
				provision of this chapter with respect to the amount of the credit determined
				under this section.
							(f)TerminationSubsection (a) shall not apply to any
				taxable year beginning after the date which is 2 years after the date of the
				enactment of this
				section.
							.
				(b)Credit To be
			 part of general business creditSubsection (b) of section 38 of
			 such Code (relating to general business credit) is amended by striking
			 plus at the end of paragraph (34), by striking the period at the
			 end of paragraph (35) and inserting , plus , and by adding at
			 the end the following new paragraph:

						(36)in the case of a small employer (as defined
				in section 45R(d)), the health benefits plan implementation credit determined
				under section
				45R(a).
						.
				(c)Clerical
			 amendmentThe table of sections for subpart D of part IV of
			 subchapter A of chapter 1 of such Code is amended by inserting after the item
			 relating to section 45Q the following new item:

							Sec. 45R. Auto-enrollment and defined contribution option for
				health benefits plans of small
				employers.

						.
				(d)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after the date of the enactment of this Act.
				110.HSA
			 modifications and clarifications
				(a)Clarification of treatment of capitated
			 primary care payments as amounts paid for medical careSection 213(d) of the Internal Revenue Code
			 of 1986 (relating to definitions) is amended by adding at the end the following
			 new paragraph:

						(12)Treatment of capitated primary care
				paymentsCapitated primary
				care payments shall be treated as amounts paid for medical
				care.
						.
				(b)Special rule for individuals eligible for
			 veterans or Indian health benefitsSection 223(c)(1) of such Code (defining
			 eligible individual) is amended by adding at the end the following new
			 subparagraph:

						(C)Special rule for individuals eligible for
				veterans or Indian health benefitsFor purposes of subparagraph (A)(ii), an
				individual shall not be treated as covered under a health plan described in
				such subparagraph merely because the individual receives periodic hospital care
				or medical services under any law administered by the Secretary of Veterans
				Affairs or the Bureau of Indian
				Affairs.
						.
				(c)Certain
			 physician fees To be treated as medical careSection 213(d) of
			 such Code is amended by adding at the end the following new paragraph:

						(13)Pre-paid
				physician feesThe term medical care shall include
				amounts paid by patients to their primary physician in advance for the right to
				receive medical services on an as-needed
				basis.
						.
				(d)Effective
			 dateThe amendment made by this section shall apply to taxable
			 years beginning after the date of the enactment of this Act.
				IIHealth Insurance
			 Pooling Mechanisms for Individuals
			ASafety Net for
			 Individuals with Pre-Existing Conditions
				201.Requiring
			 operation of high-risk pool or other mechanism as condition for availability of
			 tax creditNo credit shall be
			 allowed under section 36B of the Internal Revenue Code of 1986 (relating to
			 health insurance costs of low-income individuals) to the residents of any State
			 unless such State meets the following requirements:
					(1)The State must implement a high-risk pool
			 or a reinsurance pool or other risk-adjustment mechanism (as defined in section
			 211(h)).
					(2)Assessments levied
			 by the State for purposes of funding such a pool or mechanism must only be used
			 for funding and administering such pool or mechanism.
					(3)Such pool or
			 mechanism must incorporate the application of such tax credit into such pool or
			 mechanism.
					BFederal Block
			 Grants for State Insurance Expenditures
				211.Federal block
			 grants for State insurance expenditures
					(a)In
			 GeneralSubject to the
			 succeeding provisions of this section, each State shall receive from the
			 Secretary of Health and Human Services (in this subtitle referred to as the
			 Secretary) a block grant for the State’s providing for the use, in
			 connection with providing health benefits coverage, of a qualifying high-risk
			 pool or a reinsurance pool or other risk-adjustment mechanism used for the
			 purpose of subsidizing the purchase of private health insurance.
					(b)Funding
			 amount
						(1)In
			 generalThere are hereby appropriated, out of any funds in the
			 Treasury not otherwise appropriated, $300,000,000 for fiscal year 2012 and each
			 subsequent fiscal year for block grants under this section. Such amount shall
			 be divided among the States as determined by the Secretary.
						(2)ConstructionNothing
			 in this section shall be construed as preventing a State from using funding
			 under section 2745 of the Public Health Service Act for purposes of funding
			 reinsurance or other risk mechanisms.
						(c)LimitationFunding
			 under subsection (a) may only be used for the following:
						(1)Qualifying
			 high-risk pools
							(A)Current
			 poolsA qualifying high-risk
			 pool created before the date of the enactment of this Act that only cover
			 high-risk populations and individuals (and their spouse and dependents)
			 receiving a health care tax credit under section 35 of the Internal Revenue
			 Code of 1986 for a limited period of time as determined by the Secretary or
			 under section 2741 of Public Health Service Act.
							(B)New
			 poolsA qualifying high-risk
			 pool created on or after such date that only covers populations and individuals
			 described in subparagraph (A) if the pool—
								(i)offers at least
			 the option of one or more high-deductible plan options, in combination with a
			 contribution into a health savings account;
								(ii)offers multiple
			 competing health plan options; and
								(iii)covers only
			 high-risk populations.
								(2)Risk insurance
			 pool or other risk-adjustment mechanisms
							(A)Current
			 reinsuranceA reinsurance
			 pool, or other risk-adjustment mechanism, created before the date of the
			 enactment of this Act that only covers populations and individuals described in
			 paragraph (1)(A).
							(B)New
			 poolsA reinsurance pool or
			 other risk-adjustment mechanism created on or after such date that provides
			 reinsurance only covers populations and individuals described in paragraph
			 (1)(A) and only on a prospective basis under which a health insurance issuer
			 cedes covered lives to the pool in exchange for payment of a reinsurance
			 premium.
							(3)TransitionNothing
			 in this section shall be construed as preventing a State from using funds
			 available to transition from an existing high-risk pool to a reinsurance
			 pool.
						(d)Bonus
			 paymentsWith respect to any
			 amounts made available to the States under this section, the Secretary shall
			 set aside a portion of such amounts that shall only be available for the
			 following activities by such States:
						(1)Providing guaranteed availability of
			 individual health insurance coverage to certain individuals with prior group
			 coverage under part B of title XXVII of the Public Health Service Act.
						(2)A reduction in premium trends, actual
			 premiums, or other cost-sharing requirements.
						(3)An expansion or
			 broadening of the pool of high-risk individuals eligible for coverage.
						(4)States that adopt
			 the Model Health Plan for Uninsurable Individuals Act of the National
			 Association of Insurance Commissioners (if and when updated by such
			 Association).
						The
			 Secretary may request such Association to update such Model Health Plan as
			 needed by 2013.(e)AdministrationThe
			 Secretary shall provide for the administration of this section and may
			 establish such terms and conditions, including the requirement of an
			 application, as may be appropriate to carry out this section.
					(f)ConstructionNothing
			 in this section shall be construed as requiring a State to operate a
			 reinsurance pool (or other risk-adjustment mechanism) under this section or as
			 preventing a State from operating such a pool or mechanism through one or more
			 private entities.
					(g)Qualifying
			 high-Risk poolFor purposes of this section, the term
			 qualifying high-risk pool means any qualified high-risk pool (as
			 defined in subsection (g)(1)(A) of section 2745) of the
			 Public Health Service Act) that meets
			 the conditions to receive a grant under section (b)(1) of such section.
					(h)Reinsurance pool
			 or other risk-Adjustment mechanism definedFor purposes of this
			 section, the term reinsurance pool or other risk-adjustment
			 mechanism means any State-based risk spreading mechanism to subsidize
			 the purchase of private health insurance for the high-risk population.
					(i)High-Risk
			 populationFor purposes of this section, the term high-risk
			 population means—
						(1)individuals who,
			 by reason of the existence or history of a medical condition, are able to
			 acquire health coverage only at rates which are at least 150 percent of the
			 standard risk rates for such coverage (in a non-community-rated non-guaranteed
			 issue State), and
						(2)individuals who
			 are provided health coverage by a high-risk pool.
						(j)State
			 definedFor purposes of this section, the term State
			 includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam,
			 American Samoa, and the Northern Mariana Islands.
					(k)Extending
			 fundingSection 2745(d)(2) of the Public Health Service Act (42
			 U.S.C. 300gg–45(d)(2)) is amended by striking 2010 and inserting
			 2014 each place it appears.
					CHealth Care Access
			 and Availability
				221.Expansion of
			 access and choice through individual membership associations
			 (IMAs)The
			 Public Health Service Act, as amended
			 by section 2, is further amended by inserting after title XXX the following new
			 title:

						XXXIIndividual
				Membership Associations
							3101.Definition of
				individual membership association (IMA)
								(a)In
				GeneralFor purposes of this title, the terms individual
				membership association and IMA mean a legal entity that
				meets the following requirements:
									(1)OrganizationThe
				IMA is an organization operated under the direction of an association (as
				defined in section 3104(1)).
									(2)Offering health
				benefits coverage
										(A)Different
				groupsThe IMA, in conjunction with those health insurance
				issuers that offer health benefits coverage through the IMA, makes available
				health benefits coverage in the manner described in subsection (b) to all
				members of the IMA and the dependents of such members in the manner described
				in subsection (c)(2) at rates that are established by the health insurance
				issuer on a policy or product specific basis and that may vary only as
				permissible under State law.
										(B)Nondiscrimination
				in coverage offered
											(i)In
				GeneralSubject to clause (ii), the IMA may not offer health
				benefits coverage to a member of an IMA unless the same coverage is offered to
				all such members of the IMA.
											(ii)ConstructionNothing
				in this title shall be construed as requiring or permitting a health insurance
				issuer to provide coverage outside the service area of the issuer, as approved
				under State law, or requiring a health insurance issuer from excluding or
				limiting the coverage on any individual, subject to the requirement of section
				2741.
											(C)No financial
				underwritingThe IMA provides health benefits coverage only
				through contracts with health insurance issuers and does not assume insurance
				risk with respect to such coverage.
										(3)Geographic
				areasNothing in this title shall be construed as preventing the
				establishment and operation of more than one IMA in a geographic area or as
				limiting the number of IMAs that may operate in any area.
									(4)Provision of
				administrative services to purchasers
										(A)In
				GeneralThe IMA may provide administrative services for members.
				Such services may include accounting, billing, and enrollment
				information.
										(B)ConstructionNothing
				in this subsection shall be construed as preventing an IMA from serving as an
				administrative service organization to any entity.
										(5)Filing
				informationThe IMA files with the Secretary information that
				demonstrates the IMA’s compliance with the applicable requirements of this
				title.
									(b)Health benefits
				coverage requirements
									(1)Compliance with
				consumer protection requirementsAny health benefits coverage
				offered through an IMA shall—
										(A)be underwritten by
				a health insurance issuer that—
											(i)is
				licensed (or otherwise regulated) under State law,
											(ii)meets all
				applicable State standards relating to consumer protection, subject to section
				3002(b), and
											(B)subject to
				paragraph (2), be approved or otherwise permitted to be offered under State
				law.
										(2)Examples of
				types of coverageThe benefits coverage made available through an
				IMA may include, but is not limited to, any of the following if it meets the
				other applicable requirements of this title:
										(A)Coverage through a
				health maintenance organization.
										(B)Coverage in
				connection with a preferred provider organization.
										(C)Coverage in
				connection with a licensed provider-sponsored organization.
										(D)Indemnity coverage
				through an insurance company.
										(E)Coverage offered
				in connection with a contribution into a medical savings account or flexible
				spending account.
										(F)Coverage that
				includes a point-of-service option.
										(G)Any combination of
				such types of coverage.
										(3)Wellness bonuses
				for health promotionNothing in this title shall be construed as
				precluding a health insurance issuer offering health benefits coverage through
				an IMA from establishing premium discounts or rebates for members or from
				modifying otherwise applicable copayments or deductibles in return for
				adherence to programs of health promotion and disease prevention so long as
				such programs are agreed to in advance by the IMA and comply with all other
				provisions of this title and do not discriminate among similarly situated
				members.
									(c)Members; health
				insurance issuers
									(1)Members
										(A)In
				GeneralUnder rules established to carry out this title, with
				respect to an individual who is a member of an IMA, the individual may enroll
				for health benefits coverage (including coverage for dependents of such
				individual) offered by a health insurance issuer through the IMA.
										(B)Rules for
				enrollmentNothing in this paragraph shall preclude an IMA from
				establishing rules of enrollment and reenrollment of members. Such rules shall
				be applied consistently to all members within the IMA and shall not be based in
				any manner on health status-related factors.
										(2)Health insurance
				issuersThe contract between an IMA and a health insurance issuer
				shall provide, with respect to a member enrolled with health benefits coverage
				offered by the issuer through the IMA, for the payment of the premiums
				collected by the issuer.
									3102.Application of
				certain laws and requirementsState laws insofar as they relate to any of
				the following are superseded and shall not apply to health benefits coverage
				made available through an IMA:
								(1)Benefit
				requirements for health benefits coverage offered through an IMA, including
				(but not limited to) requirements relating to coverage of specific providers,
				specific services or conditions, or the amount, duration, or scope of benefits,
				but not including requirements to the extent required to implement title XXVII
				or other Federal law and to the extent the requirement prohibits an exclusion
				of a specific disease from such coverage.
								(2)Any other
				requirements (including limitations on compensation arrangements) that,
				directly or indirectly, preclude (or have the effect of precluding) the
				offering of such coverage through an IMA, if the IMA meets the requirements of
				this title.
								Any State
				law or regulation relating to the composition or organization of an IMA is
				preempted to the extent the law or regulation is inconsistent with the
				provisions of this title.3103.Administration
								(a)In
				GeneralThe Secretary shall administer this title and is
				authorized to issue such regulations as may be required to carry out this
				title. Such regulations shall be subject to Congressional review under the
				provisions of chapter 8 of title 5, United States Code. The Secretary shall
				incorporate the process of deemed file and use with respect to the
				information filed under section 3001(a)(5)(A) and shall determine whether
				information filed by an IMA demonstrates compliance with the applicable
				requirements of this title. The Secretary shall exercise authority under this
				title in a manner that fosters and promotes the development of IMAs in order to
				improve access to health care coverage and services.
								(b)Periodic
				reportsThe Secretary shall submit to Congress a report every 30
				months, during the 10-year period beginning on the effective date of the rules
				promulgated by the Secretary to carry out this title, on the effectiveness of
				this title in promoting coverage of uninsured individuals. The Secretary may
				provide for the production of such reports through one or more contracts with
				appropriate private entities.
								3104.DefinitionsFor purposes of this title:
								(1)AssociationThe
				term association means, with respect to health insurance coverage
				offered in a State, a legal entity which—
									(A)has been actively
				in existence for at least 5 years;
									(B)has been formed
				and maintained in good faith for purposes other than obtaining
				insurance;
									(C)does not condition
				membership in the association on any health status-related factor relating to
				an individual (including an employee of an employer or a dependent of an
				employee); and
									(D)does not make
				health insurance coverage offered through the association available other than
				in connection with a member of the association.
									(2)DependentThe
				term dependent, as applied to health insurance coverage offered by
				a health insurance issuer licensed (or otherwise regulated) in a State, shall
				have the meaning applied to such term with respect to such coverage under the
				laws of the State relating to such coverage and such an issuer. Such term may
				include the spouse and children of the individual involved.
								(3)Health benefits
				coverageThe term health benefits coverage has the
				meaning given the term health insurance coverage in section 2791(b)(1), and
				does not include excepted benefits (as defined in section 2791(c)).
								(4)Health insurance
				issuerThe term health insurance issuer has the
				meaning given such term in section 2791(b)(2).
								(5)Health
				status-related factorThe term health status-related
				factor has the meaning given such term in section 2791(d)(9).
								(6)IMA; individual
				membership associationThe terms IMA and
				individual membership association are defined in section
				3101(a).
								(7)MemberThe
				term member means, with respect to an IMA, an individual who is a
				member of the association to which the IMA is offering
				coverage.
								.
				DSmall Business
			 Health Fairness
				231.Short
			 titleThis subtitle may be
			 cited as the Small Business Health
			 Fairness Act of 2011.
				232.Rules governing
			 association health plans
					(a)In
			 GeneralSubtitle B of title I
			 of the Employee Retirement Income Security Act
			 of 1974 is amended by adding after part 7 the following new
			 part:

							8RULES GOVERNING
				ASSOCIATION HEALTH PLANS
								801.Association
				health plans
									(a)In
				GeneralFor purposes of this part, the term association
				health plan means a group health plan whose sponsor is (or is deemed
				under this part to be) described in subsection (b).
									(b)SponsorshipThe
				sponsor of a group health plan is described in this subsection if such
				sponsor—
										(1)is organized and
				maintained in good faith, with a constitution and bylaws specifically stating
				its purpose and providing for periodic meetings on at least an annual basis, as
				a bona fide trade association, a bona fide industry association (including a
				rural electric cooperative association or a rural telephone cooperative
				association), a bona fide professional association, or a bona fide chamber of
				commerce (or similar bona fide business association, including a corporation or
				similar organization that operates on a cooperative basis (within the meaning
				of section 1381 of the Internal Revenue Code of 1986)), for substantial
				purposes other than that of obtaining or providing medical care;
										(2)is established as
				a permanent entity which receives the active support of its members and
				requires for membership payment on a periodic basis of dues or payments
				necessary to maintain eligibility for membership in the sponsor; and
										(3)does not condition
				membership, such dues or payments, or coverage under the plan on the basis of
				health status-related factors with respect to the employees of its members (or
				affiliated members), or the dependents of such employees, and does not
				condition such dues or payments on the basis of group health plan
				participation.
										Any
				sponsor consisting of an association of entities which meet the requirements of
				paragraphs (1), (2), and (3) shall be deemed to be a sponsor described in this
				subsection.802.Certification
				of association health plans
									(a)In
				GeneralThe applicable authority shall prescribe by regulation a
				procedure under which, subject to subsection (b), the applicable authority
				shall certify association health plans which apply for certification as meeting
				the requirements of this part.
									(b)StandardsUnder
				the procedure prescribed pursuant to subsection (a), in the case of an
				association health plan that provides at least one benefit option which does
				not consist of health insurance coverage, the applicable authority shall
				certify such plan as meeting the requirements of this part only if the
				applicable authority is satisfied that the applicable requirements of this part
				are met (or, upon the date on which the plan is to commence operations, will be
				met) with respect to the plan.
									(c)Requirements
				Applicable to Certified PlansAn association health plan with
				respect to which certification under this part is in effect shall meet the
				applicable requirements of this part, effective on the date of certification
				(or, if later, on the date on which the plan is to commence operations).
									(d)Requirements for
				Continued CertificationThe applicable authority may provide by
				regulation for continued certification of association health plans under this
				part.
									(e)Class
				Certification for Fully Insured PlansThe applicable authority
				shall establish a class certification procedure for association health plans
				under which all benefits consist of health insurance coverage. Under such
				procedure, the applicable authority shall provide for the granting of
				certification under this part to the plans in each class of such association
				health plans upon appropriate filing under such procedure in connection with
				plans in such class and payment of the prescribed fee under section
				807(a).
									(f)Certification of
				Self-Insured Association Health PlansAn association health plan
				which offers one or more benefit options which do not consist of health
				insurance coverage may be certified under this part only if such plan consists
				of any of the following:
										(1)a plan which
				offered such coverage on the date of the enactment of the
				Small Business Health Fairness Act of
				2011,
										(2)a plan under which
				the sponsor does not restrict membership to one or more trades and businesses
				or industries and whose eligible participating employers represent a broad
				cross-section of trades and businesses or industries, or
										(3)a plan whose
				eligible participating employers represent one or more trades or businesses, or
				one or more industries, consisting of any of the following: agriculture;
				equipment and automobile dealerships; barbering and cosmetology; certified
				public accounting practices; child care; construction; dance, theatrical and
				orchestra productions; disinfecting and pest control; financial services;
				fishing; food service establishments; hospitals; labor organizations; logging;
				manufacturing (metals); mining; medical and dental practices; medical
				laboratories; professional consulting services; sanitary services;
				transportation (local and freight); warehousing; wholesaling/distributing; or
				any other trade or business or industry which has been indicated as having
				average or above-average risk or health claims experience by reason of State
				rate filings, denials of coverage, proposed premium rate levels, or other means
				demonstrated by such plan in accordance with regulations.
										803.Requirements
				relating to sponsors and boards of trustees
									(a)SponsorThe
				requirements of this subsection are met with respect to an association health
				plan if the sponsor has met (or is deemed under this part to have met) the
				requirements of section 801(b) for a continuous period of not less than 3 years
				ending with the date of the application for certification under this
				part.
									(b)Board of
				TrusteesThe requirements of this subsection are met with respect
				to an association health plan if the following requirements are met:
										(1)Fiscal
				controlThe plan is operated, pursuant to a trust agreement, by a
				board of trustees which has complete fiscal control over the plan and which is
				responsible for all operations of the plan.
										(2)Rules of
				operation and financial controlsThe board of trustees has in
				effect rules of operation and financial controls, based on a 3-year plan of
				operation, adequate to carry out the terms of the plan and to meet all
				requirements of this title applicable to the plan.
										(3)Rules governing
				relationship to participating employers and to contractors
											(A)Board
				membership
												(i)In
				generalExcept as provided in clauses (ii) and (iii), the members
				of the board of trustees are individuals selected from individuals who are the
				owners, officers, directors, or employees of the participating employers or who
				are partners in the participating employers and actively participate in the
				business.
												(ii)Limitation
													(I)General
				ruleExcept as provided in subclauses (II) and (III), no such
				member is an owner, officer, director, or employee of, or partner in, a
				contract administrator or other service provider to the plan.
													(II)Limited
				exception for providers of services solely on behalf of the
				sponsorOfficers or employees of a sponsor which is a service
				provider (other than a contract administrator) to the plan may be members of
				the board if they constitute not more than 25 percent of the membership of the
				board and they do not provide services to the plan other than on behalf of the
				sponsor.
													(III)Treatment of
				providers of medical careIn the case of a sponsor which is an
				association whose membership consists primarily of providers of medical care,
				subclause (I) shall not apply in the case of any service provider described in
				subclause (I) who is a provider of medical care under the plan.
													(iii)Certain plans
				excludedClause (i) shall not apply to an association health plan
				which is in existence on the date of the enactment of the
				Small Business Health Fairness Act of
				2011.
												(B)Sole
				authorityThe board has sole authority under the plan to approve
				applications for participation in the plan and to contract with a service
				provider to administer the day-to-day affairs of the plan.
											(c)Treatment of
				Franchise NetworksIn the case of a group health plan which is
				established and maintained by a franchiser for a franchise network consisting
				of its franchisees—
										(1)the requirements
				of subsection (a) and section 801(a) shall be deemed met if such requirements
				would otherwise be met if the franchiser were deemed to be the sponsor referred
				to in section 801(b), such network were deemed to be an association described
				in section 801(b), and each franchisee were deemed to be a member (of the
				association and the sponsor) referred to in section 801(b); and
										(2)the requirements
				of section 804(a)(1) shall be deemed met.
										The
				Secretary may by regulation define for purposes of this subsection the terms
				franchiser, franchise network, and
				franchisee.804.Participation
				and coverage requirements
									(a)Covered
				Employers and IndividualsThe requirements of this subsection are
				met with respect to an association health plan if, under the terms of the
				plan—
										(1)each participating
				employer must be—
											(A)a member of the
				sponsor,
											(B)the sponsor,
				or
											(C)an affiliated
				member of the sponsor with respect to which the requirements of subsection (b)
				are met,
											except
				that, in the case of a sponsor which is a professional association or other
				individual-based association, if at least one of the officers, directors, or
				employees of an employer, or at least one of the individuals who are partners
				in an employer and who actively participates in the business, is a member or
				such an affiliated member of the sponsor, participating employers may also
				include such employer; and(2)all individuals
				commencing coverage under the plan after certification under this part must
				be—
											(A)active or retired
				owners (including self-employed individuals), officers, directors, or employees
				of, or partners in, participating employers; or
											(B)the beneficiaries
				of individuals described in subparagraph (A).
											(b)Coverage of
				Previously Uninsured EmployeesIn the case of an association
				health plan in existence on the date of the enactment of the
				Small Business Health Fairness Act of
				2011, an affiliated member of the sponsor of the plan may be
				offered coverage under the plan as a participating employer only if—
										(1)the affiliated
				member was an affiliated member on the date of certification under this part;
				or
										(2)during the
				12-month period preceding the date of the offering of such coverage, the
				affiliated member has not maintained or contributed to a group health plan with
				respect to any of its employees who would otherwise be eligible to participate
				in such association health plan.
										(c)Individual
				Market UnaffectedThe requirements of this subsection are met
				with respect to an association health plan if, under the terms of the plan, no
				participating employer may provide health insurance coverage in the individual
				market for any employee not covered under the plan which is similar to the
				coverage contemporaneously provided to employees of the employer under the
				plan, if such exclusion of the employee from coverage under the plan is based
				on a health status-related factor with respect to the employee and such
				employee would, but for such exclusion on such basis, be eligible for coverage
				under the plan.
									(d)Prohibition of
				Discrimination Against Employers and Employees Eligible To
				ParticipateThe requirements of this subsection are met with
				respect to an association health plan if—
										(1)under the terms of
				the plan, all employers meeting the preceding requirements of this section are
				eligible to qualify as participating employers for all geographically available
				coverage options, unless, in the case of any such employer, participation or
				contribution requirements of the type referred to in section 2711 of the
				Public Health Service Act are not
				met;
										(2)upon request, any
				employer eligible to participate is furnished information regarding all
				coverage options available under the plan; and
										(3)the applicable
				requirements of sections 701, 702, and 703 are met with respect to the
				plan.
										805.Other
				requirements relating to plan documents, contribution rates, and benefit
				options
									(a)In
				GeneralThe requirements of this section are met with respect to
				an association health plan if the following requirements are met:
										(1)Contents of
				governing instrumentsThe instruments governing the plan include
				a written instrument, meeting the requirements of an instrument required under
				section 402(a)(1), which—
											(A)provides that the
				board of trustees serves as the named fiduciary required for plans under
				section 402(a)(1) and serves in the capacity of a plan administrator (referred
				to in section 3(16)(A));
											(B)provides that the
				sponsor of the plan is to serve as plan sponsor (referred to in section
				3(16)(B)); and
											(C)incorporates the
				requirements of section 806.
											(2)Contribution
				rates must be nondiscriminatory
											(A)The contribution
				rates for any participating small employer do not vary on the basis of any
				health status-related factor in relation to employees of such employer or their
				beneficiaries and do not vary on the basis of the type of business or industry
				in which such employer is engaged.
											(B)Nothing in this
				title or any other provision of law shall be construed to preclude an
				association health plan, or a health insurance issuer offering health insurance
				coverage in connection with an association health plan, from—
												(i)setting
				contribution rates based on the claims experience of the plan; or
												(ii)varying
				contribution rates for small employers in a State to the extent that such rates
				could vary using the same methodology employed in such State for regulating
				premium rates in the small group market with respect to health insurance
				coverage offered in connection with bona fide associations (within the meaning
				of section 2791(d)(3) of the Public Health
				Service Act),
												subject
				to the requirements of section 702(b) relating to contribution rates.(3)Floor for number
				of covered individuals with respect to certain plansIf any
				benefit option under the plan does not consist of health insurance coverage,
				the plan has as of the beginning of the plan year not fewer than 1,000
				participants and beneficiaries.
										(4)Marketing
				requirements
											(A)In
				generalIf a benefit option which consists of health insurance
				coverage is offered under the plan, State-licensed insurance agents shall be
				used to distribute to small employers coverage which does not consist of health
				insurance coverage in a manner comparable to the manner in which such agents
				are used to distribute health insurance coverage.
											(B)State-licensed
				insurance agentsFor purposes of subparagraph (A), the term
				State-licensed insurance agents means one or more agents who are
				licensed in a State and are subject to the laws of such State relating to
				licensure, qualification, testing, examination, and continuing education of
				persons authorized to offer, sell, or solicit health insurance coverage in such
				State.
											(5)Regulatory
				requirementsSuch other requirements as the applicable authority
				determines are necessary to carry out the purposes of this part, which shall be
				prescribed by the applicable authority by regulation.
										(b)Ability of
				Association Health Plans To Design Benefit OptionsSubject to
				section 514(d), nothing in this part or any provision of State law (as defined
				in section 514(c)(1)) shall be construed to preclude an association health
				plan, or a health insurance issuer offering health insurance coverage in
				connection with an association health plan, from exercising its sole discretion
				in selecting the specific items and services consisting of medical care to be
				included as benefits under such plan or coverage, except (subject to section
				514) in the case of (1) any law to the extent that it is not preempted under
				section 731(a)(1) with respect to matters governed by section 711, 712, or 713,
				or (2) any law of the State with which filing and approval of a policy type
				offered by the plan was initially obtained to the extent that such law
				prohibits an exclusion of a specific disease from such coverage.
									806.Maintenance of
				reserves and provisions for solvency for plans providing health benefits in
				addition to health insurance coverage
									(a)In
				GeneralThe requirements of this section are met with respect to
				an association health plan if—
										(1)the benefits under
				the plan consist solely of health insurance coverage; or
										(2)if the plan
				provides any additional benefit options which do not consist of health
				insurance coverage, the plan—
											(A)establishes and
				maintains reserves with respect to such additional benefit options, in amounts
				recommended by the qualified health actuary, consisting of—
												(i)a
				reserve sufficient for unearned contributions;
												(ii)a
				reserve sufficient for benefit liabilities which have been incurred, which have
				not been satisfied, and for which risk of loss has not yet been transferred,
				and for expected administrative costs with respect to such benefit
				liabilities;
												(iii)a reserve
				sufficient for any other obligations of the plan; and
												(iv)a
				reserve sufficient for a margin of error and other fluctuations, taking into
				account the specific circumstances of the plan; and
												(B)establishes and
				maintains aggregate and specific excess/stop loss insurance and solvency
				indemnification, with respect to such additional benefit options for which risk
				of loss has not yet been transferred, as follows:
												(i)The plan shall
				secure aggregate excess/stop loss insurance for the plan with an attachment
				point which is not greater than 125 percent of expected gross annual claims.
				The applicable authority may by regulation provide for upward adjustments in
				the amount of such percentage in specified circumstances in which the plan
				specifically provides for and maintains reserves in excess of the amounts
				required under subparagraph (A).
												(ii)The plan shall
				secure specific excess/stop loss insurance for the plan with an attachment
				point which is at least equal to an amount recommended by the plan’s qualified
				health actuary. The applicable authority may by regulation provide for
				adjustments in the amount of such insurance in specified circumstances in which
				the plan specifically provides for and maintains reserves in excess of the
				amounts required under subparagraph (A).
												(iii)The plan shall
				secure indemnification insurance for any claims which the plan is unable to
				satisfy by reason of a plan termination.
												Any
				person issuing to a plan insurance described in clause (i), (ii), or (iii) of
				subparagraph (B) shall notify the Secretary of any failure of premium payment
				meriting cancellation of the policy prior to undertaking such a cancellation.
				Any regulations prescribed by the applicable authority pursuant to clause (i)
				or (ii) of subparagraph (B) may allow for such adjustments in the required
				levels of excess/stop loss insurance as the qualified health actuary may
				recommend, taking into account the specific circumstances of the plan.(b)Minimum Surplus
				in Addition to Claims ReservesIn the case of any association
				health plan described in subsection (a)(2), the requirements of this subsection
				are met if the plan establishes and maintains surplus in an amount at least
				equal to—
										(1)$500,000,
				or
										(2)such greater
				amount (but not greater than $2,000,000) as may be set forth in regulations
				prescribed by the applicable authority, considering the level of aggregate and
				specific excess/stop loss insurance provided with respect to such plan and
				other factors related to solvency risk, such as the plan’s projected levels of
				participation or claims, the nature of the plan’s liabilities, and the types of
				assets available to assure that such liabilities are met.
										(c)Additional
				RequirementsIn the case of any association health plan described
				in subsection (a)(2), the applicable authority may provide such additional
				requirements relating to reserves, excess/stop loss insurance, and
				indemnification insurance as the applicable authority considers appropriate.
				Such requirements may be provided by regulation with respect to any such plan
				or any class of such plans.
									(d)Adjustments for
				Excess/Stop Loss InsuranceThe applicable authority may provide
				for adjustments to the levels of reserves otherwise required under subsections
				(a) and (b) with respect to any plan or class of plans to take into account
				excess/stop loss insurance provided with respect to such plan or plans.
									(e)Alternative
				Means of ComplianceThe applicable authority may permit an
				association health plan described in subsection (a)(2) to substitute, for all
				or part of the requirements of this section (except subsection (a)(2)(B)(iii)),
				such security, guarantee, hold-harmless arrangement, or other financial
				arrangement as the applicable authority determines to be adequate to enable the
				plan to fully meet all its financial obligations on a timely basis and is
				otherwise no less protective of the interests of participants and beneficiaries
				than the requirements for which it is substituted. The applicable authority may
				take into account, for purposes of this subsection, evidence provided by the
				plan or sponsor which demonstrates an assumption of liability with respect to
				the plan. Such evidence may be in the form of a contract of indemnification,
				lien, bonding, insurance, letter of credit, recourse under applicable terms of
				the plan in the form of assessments of participating employers, security, or
				other financial arrangement.
									(f)Measures To
				Ensure Continued Payment of Benefits by Certain Plans in Distress
										(1)Payments by
				certain plans to association health plan fund
											(A)In
				generalIn the case of an association health plan described in
				subsection (a)(2), the requirements of this subsection are met if the plan
				makes payments into the Association Health Plan Fund under this subparagraph
				when they are due. Such payments shall consist of annual payments in the amount
				of $5,000, and, in addition to such annual payments, such supplemental payments
				as the Secretary may determine to be necessary under paragraph (2). Payments
				under this paragraph are payable to the Fund at the time determined by the
				Secretary. Initial payments are due in advance of certification under this
				part. Payments shall continue to accrue until a plan’s assets are distributed
				pursuant to a termination procedure.
											(B)Penalties for
				failure to make paymentsIf any payment is not made by a plan
				when it is due, a late payment charge of not more than 100 percent of the
				payment which was not timely paid shall be payable by the plan to the
				Fund.
											(C)Continued duty
				of the secretaryThe Secretary shall not cease to carry out the
				provisions of paragraph (2) on account of the failure of a plan to pay any
				payment when due.
											(2)Payments by
				secretary to continue excess/stop loss insurance coverage and indemnification
				insurance coverage for certain plansIn any case in which the
				applicable authority determines that there is, or that there is reason to
				believe that there will be: (A) a failure to take necessary corrective actions
				under section 809(a) with respect to an association health plan described in
				subsection (a)(2); or (B) a termination of such a plan under section 809(b) or
				810(b)(8) (and, if the applicable authority is not the Secretary, certifies
				such determination to the Secretary), the Secretary shall determine the amounts
				necessary to make payments to an insurer (designated by the Secretary) to
				maintain in force excess/stop loss insurance coverage or indemnification
				insurance coverage for such plan, if the Secretary determines that there is a
				reasonable expectation that, without such payments, claims would not be
				satisfied by reason of termination of such coverage. The Secretary shall, to
				the extent provided in advance in appropriation Acts, pay such amounts so
				determined to the insurer designated by the Secretary.
										(3)Association
				health plan fund
											(A)In
				generalThere is established on the books of the Treasury a fund
				to be known as the Association Health Plan Fund. The Fund shall be
				available for making payments pursuant to paragraph (2). The Fund shall be
				credited with payments received pursuant to paragraph (1)(A), penalties
				received pursuant to paragraph (1)(B), and earnings on investments of amounts
				of the Fund under subparagraph (B).
											(B)InvestmentWhenever
				the Secretary determines that the moneys of the fund are in excess of current
				needs, the Secretary may request the investment of such amounts as the
				Secretary determines advisable by the Secretary of the Treasury in obligations
				issued or guaranteed by the United States.
											(g)Excess/Stop Loss
				InsuranceFor purposes of this section—
										(1)Aggregate
				excess/stop loss insuranceThe term aggregate excess/stop
				loss insurance means, in connection with an association health plan, a
				contract—
											(A)under which an
				insurer (meeting such minimum standards as the applicable authority may
				prescribe by regulation) provides for payment to the plan with respect to
				aggregate claims under the plan in excess of an amount or amounts specified in
				such contract;
											(B)which is
				guaranteed renewable; and
											(C)which allows for
				payment of premiums by any third party on behalf of the insured plan.
											(2)Specific
				excess/stop loss insuranceThe term specific excess/stop
				loss insurance means, in connection with an association health plan, a
				contract—
											(A)under which an
				insurer (meeting such minimum standards as the applicable authority may
				prescribe by regulation) provides for payment to the plan with respect to
				claims under the plan in connection with a covered individual in excess of an
				amount or amounts specified in such contract in connection with such covered
				individual;
											(B)which is
				guaranteed renewable; and
											(C)which allows for
				payment of premiums by any third party on behalf of the insured plan.
											(h)Indemnification
				InsuranceFor purposes of this section, the term
				indemnification insurance means, in connection with an association
				health plan, a contract—
										(1)under which an
				insurer (meeting such minimum standards as the applicable authority may
				prescribe by regulation) provides for payment to the plan with respect to
				claims under the plan which the plan is unable to satisfy by reason of a
				termination pursuant to section 809(b) (relating to mandatory
				termination);
										(2)which is
				guaranteed renewable and noncancellable for any reason (except as the
				applicable authority may prescribe by regulation); and
										(3)which allows for
				payment of premiums by any third party on behalf of the insured plan.
										(i)ReservesFor
				purposes of this section, the term reserves means, in connection
				with an association health plan, plan assets which meet the fiduciary standards
				under part 4 and such additional requirements regarding liquidity as the
				applicable authority may prescribe by regulation.
									(j)Solvency
				Standards Working Group
										(1)In
				generalWithin 90 days after the date of the enactment of the
				Small Business Health Fairness Act of
				2011, the applicable authority shall establish a Solvency
				Standards Working Group. In prescribing the initial regulations under this
				section, the applicable authority shall take into account the recommendations
				of such Working Group.
										(2)MembershipThe
				Working Group shall consist of not more than 15 members appointed by the
				applicable authority. The applicable authority shall include among persons
				invited to membership on the Working Group at least one of each of the
				following:
											(A)A representative
				of the National Association of Insurance Commissioners.
											(B)A representative
				of the American Academy of Actuaries.
											(C)A representative
				of the State governments, or their interests.
											(D)A representative
				of existing self-insured arrangements, or their interests.
											(E)A representative
				of associations of the type referred to in section 801(b)(1), or their
				interests.
											(F)A representative
				of multiemployer plans that are group health plans, or their interests.
											807.Requirements
				for application and related requirements
									(a)Filing
				FeeUnder the procedure prescribed pursuant to section 802(a), an
				association health plan shall pay to the applicable authority at the time of
				filing an application for certification under this part a filing fee in the
				amount of $5,000, which shall be available in the case of the Secretary, to the
				extent provided in appropriation Acts, for the sole purpose of administering
				the certification procedures applicable with respect to association health
				plans.
									(b)Information To
				Be Included in Application for CertificationAn application for
				certification under this part meets the requirements of this section only if it
				includes, in a manner and form which shall be prescribed by the applicable
				authority by regulation, at least the following information:
										(1)Identifying
				informationThe names and addresses of—
											(A)the sponsor;
				and
											(B)the members of the
				board of trustees of the plan.
											(2)States in which
				plan intends to do businessThe States in which participants and
				beneficiaries under the plan are to be located and the number of them expected
				to be located in each such State.
										(3)Bonding
				requirementsEvidence provided by the board of trustees that the
				bonding requirements of section 412 will be met as of the date of the
				application or (if later) commencement of operations.
										(4)Plan
				documentsA copy of the documents governing the plan (including
				any bylaws and trust agreements), the summary plan description, and other
				material describing the benefits that will be provided to participants and
				beneficiaries under the plan.
										(5)Agreements with
				service providersA copy of any agreements between the plan and
				contract administrators and other service providers.
										(6)Funding
				reportIn the case of association health plans providing benefits
				options in addition to health insurance coverage, a report setting forth
				information with respect to such additional benefit options determined as of a
				date within the 120-day period ending with the date of the application,
				including the following:
											(A)ReservesA
				statement, certified by the board of trustees of the plan, and a statement of
				actuarial opinion, signed by a qualified health actuary, that all applicable
				requirements of section 806 are or will be met in accordance with regulations
				which the applicable authority shall prescribe.
											(B)Adequacy of
				contribution ratesA statement of actuarial opinion, signed by a
				qualified health actuary, which sets forth a description of the extent to which
				contribution rates are adequate to provide for the payment of all obligations
				and the maintenance of required reserves under the plan for the 12-month period
				beginning with such date within such 120-day period, taking into account the
				expected coverage and experience of the plan. If the contribution rates are not
				fully adequate, the statement of actuarial opinion shall indicate the extent to
				which the rates are inadequate and the changes needed to ensure
				adequacy.
											(C)Current and
				projected value of assets and liabilitiesA statement of
				actuarial opinion signed by a qualified health actuary, which sets forth the
				current value of the assets and liabilities accumulated under the plan and a
				projection of the assets, liabilities, income, and expenses of the plan for the
				12-month period referred to in subparagraph (B). The income statement shall
				identify separately the plan’s administrative expenses and claims.
											(D)Costs of
				coverage to be charged and other expensesA statement of the
				costs of coverage to be charged, including an itemization of amounts for
				administration, reserves, and other expenses associated with the operation of
				the plan.
											(E)Other
				informationAny other information as may be determined by the
				applicable authority, by regulation, as necessary to carry out the purposes of
				this part.
											(c)Filing Notice of
				Certification With StatesA certification granted under this part
				to an association health plan shall not be effective unless written notice of
				such certification is filed with the applicable State authority of each State
				in which at least 25 percent of the participants and beneficiaries under the
				plan are located. For purposes of this subsection, an individual shall be
				considered to be located in the State in which a known address of such
				individual is located or in which such individual is employed.
									(d)Notice of
				Material ChangesIn the case of any association health plan
				certified under this part, descriptions of material changes in any information
				which was required to be submitted with the application for the certification
				under this part shall be filed in such form and manner as shall be prescribed
				by the applicable authority by regulation. The applicable authority may require
				by regulation prior notice of material changes with respect to specified
				matters which might serve as the basis for suspension or revocation of the
				certification.
									(e)Reporting
				Requirements for Certain Association Health PlansAn association
				health plan certified under this part which provides benefit options in
				addition to health insurance coverage for such plan year shall meet the
				requirements of section 103 by filing an annual report under such section which
				shall include information described in subsection (b)(6) with respect to the
				plan year and, notwithstanding section 104(a)(1)(A), shall be filed with the
				applicable authority not later than 90 days after the close of the plan year
				(or on such later date as may be prescribed by the applicable authority). The
				applicable authority may require by regulation such interim reports as it
				considers appropriate.
									(f)Engagement of
				Qualified Health ActuaryThe board of trustees of each
				association health plan which provides benefits options in addition to health
				insurance coverage and which is applying for certification under this part or
				is certified under this part shall engage, on behalf of all participants and
				beneficiaries, a qualified health actuary who shall be responsible for the
				preparation of the materials comprising information necessary to be submitted
				by a qualified health actuary under this part. The qualified health actuary
				shall utilize such assumptions and techniques as are necessary to enable such
				actuary to form an opinion as to whether the contents of the matters reported
				under this part—
										(1)are in the
				aggregate reasonably related to the experience of the plan and to reasonable
				expectations; and
										(2)represent such
				actuary’s best estimate of anticipated experience under the plan.
										The
				opinion by the qualified health actuary shall be made with respect to, and
				shall be made a part of, the annual report.808.Notice
				requirements for voluntary terminationExcept as provided in section 809(b), an
				association health plan which is or has been certified under this part may
				terminate (upon or at any time after cessation of accruals in benefit
				liabilities) only if the board of trustees, not less than 60 days before the
				proposed termination date—
									(1)provides to the
				participants and beneficiaries a written notice of intent to terminate stating
				that such termination is intended and the proposed termination date;
									(2)develops a plan
				for winding up the affairs of the plan in connection with such termination in a
				manner which will result in timely payment of all benefits for which the plan
				is obligated; and
									(3)submits such plan
				in writing to the applicable authority.
									Actions
				required under this section shall be taken in such form and manner as may be
				prescribed by the applicable authority by regulation.809.Corrective
				actions and mandatory termination
									(a)Actions To Avoid
				Depletion of ReservesAn association health plan which is
				certified under this part and which provides benefits other than health
				insurance coverage shall continue to meet the requirements of section 806,
				irrespective of whether such certification continues in effect. The board of
				trustees of such plan shall determine quarterly whether the requirements of
				section 806 are met. In any case in which the board determines that there is
				reason to believe that there is or will be a failure to meet such requirements,
				or the applicable authority makes such a determination and so notifies the
				board, the board shall immediately notify the qualified health actuary engaged
				by the plan, and such actuary shall, not later than the end of the next
				following month, make such recommendations to the board for corrective action
				as the actuary determines necessary to ensure compliance with section 806. Not
				later than 30 days after receiving from the actuary recommendations for
				corrective actions, the board shall notify the applicable authority (in such
				form and manner as the applicable authority may prescribe by regulation) of
				such recommendations of the actuary for corrective action, together with a
				description of the actions (if any) that the board has taken or plans to take
				in response to such recommendations. The board shall thereafter report to the
				applicable authority, in such form and frequency as the applicable authority
				may specify to the board, regarding corrective action taken by the board until
				the requirements of section 806 are met.
									(b)Mandatory
				TerminationIn any case in which—
										(1)the applicable
				authority has been notified under subsection (a) (or by an issuer of
				excess/stop loss insurance or indemnity insurance pursuant to section 806(a))
				of a failure of an association health plan which is or has been certified under
				this part and is described in section 806(a)(2) to meet the requirements of
				section 806 and has not been notified by the board of trustees of the plan that
				corrective action has restored compliance with such requirements; and
										(2)the applicable
				authority determines that there is a reasonable expectation that the plan will
				continue to fail to meet the requirements of section 806,
										the board
				of trustees of the plan shall, at the direction of the applicable authority,
				terminate the plan and, in the course of the termination, take such actions as
				the applicable authority may require, including satisfying any claims referred
				to in section 806(a)(2)(B)(iii) and recovering for the plan any liability under
				subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure that
				the affairs of the plan will be, to the maximum extent possible, wound up in a
				manner which will result in timely provision of all benefits for which the plan
				is obligated.810.Trusteeship by
				the Secretary of insolvent association health plans providing health benefits
				in addition to health insurance coverage
									(a)Appointment of
				Secretary as Trustee for Insolvent PlansWhenever the Secretary
				determines that an association health plan which is or has been certified under
				this part and which is described in section 806(a)(2) will be unable to provide
				benefits when due or is otherwise in a financially hazardous condition, as
				shall be defined by the Secretary by regulation, the Secretary shall, upon
				notice to the plan, apply to the appropriate United States district court for
				appointment of the Secretary as trustee to administer the plan for the duration
				of the insolvency. The plan may appear as a party and other interested persons
				may intervene in the proceedings at the discretion of the court. The court
				shall appoint such Secretary trustee if the court determines that the
				trusteeship is necessary to protect the interests of the participants and
				beneficiaries or providers of medical care or to avoid any unreasonable
				deterioration of the financial condition of the plan. The trusteeship of such
				Secretary shall continue until the conditions described in the first sentence
				of this subsection are remedied or the plan is terminated.
									(b)Powers as
				TrusteeThe Secretary, upon appointment as trustee under
				subsection (a), shall have the power—
										(1)to do any act
				authorized by the plan, this title, or other applicable provisions of law to be
				done by the plan administrator or any trustee of the plan;
										(2)to require the
				transfer of all (or any part) of the assets and records of the plan to the
				Secretary as trustee;
										(3)to invest any
				assets of the plan which the Secretary holds in accordance with the provisions
				of the plan, regulations prescribed by the Secretary, and applicable provisions
				of law;
										(4)to require the
				sponsor, the plan administrator, any participating employer, and any employee
				organization representing plan participants to furnish any information with
				respect to the plan which the Secretary as trustee may reasonably need in order
				to administer the plan;
										(5)to collect for the
				plan any amounts due the plan and to recover reasonable expenses of the
				trusteeship;
										(6)to commence,
				prosecute, or defend on behalf of the plan any suit or proceeding involving the
				plan;
										(7)to issue, publish,
				or file such notices, statements, and reports as may be required by the
				Secretary by regulation or required by any order of the court;
										(8)to terminate the
				plan (or provide for its termination in accordance with section 809(b)) and
				liquidate the plan assets, to restore the plan to the responsibility of the
				sponsor, or to continue the trusteeship;
										(9)to provide for the
				enrollment of plan participants and beneficiaries under appropriate coverage
				options; and
										(10)to do such other
				acts as may be necessary to comply with this title or any order of the court
				and to protect the interests of plan participants and beneficiaries and
				providers of medical care.
										(c)Notice of
				AppointmentAs soon as practicable after the Secretary’s
				appointment as trustee, the Secretary shall give notice of such appointment
				to—
										(1)the sponsor and
				plan administrator;
										(2)each
				participant;
										(3)each participating
				employer; and
										(4)if applicable,
				each employee organization which, for purposes of collective bargaining,
				represents plan participants.
										(d)Additional
				DutiesExcept to the extent inconsistent with the provisions of
				this title, or as may be otherwise ordered by the court, the Secretary, upon
				appointment as trustee under this section, shall be subject to the same duties
				as those of a trustee under section 704 of title 11, United States Code, and
				shall have the duties of a fiduciary for purposes of this title.
									(e)Other
				ProceedingsAn application by the Secretary under this subsection
				may be filed notwithstanding the pendency in the same or any other court of any
				bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any
				proceeding to reorganize, conserve, or liquidate such plan or its property, or
				any proceeding to enforce a lien against property of the plan.
									(f)Jurisdiction of
				Court
										(1)In
				generalUpon the filing of an application for the appointment as
				trustee or the issuance of a decree under this section, the court to which the
				application is made shall have exclusive jurisdiction of the plan involved and
				its property wherever located with the powers, to the extent consistent with
				the purposes of this section, of a court of the United States having
				jurisdiction over cases under chapter 11 of title 11, United States Code.
				Pending an adjudication under this section such court shall stay, and upon
				appointment by it of the Secretary as trustee, such court shall continue the
				stay of, any pending mortgage foreclosure, equity receivership, or other
				proceeding to reorganize, conserve, or liquidate the plan, the sponsor, or
				property of such plan or sponsor, and any other suit against any receiver,
				conservator, or trustee of the plan, the sponsor, or property of the plan or
				sponsor. Pending such adjudication and upon the appointment by it of the
				Secretary as trustee, the court may stay any proceeding to enforce a lien
				against property of the plan or the sponsor or any other suit against the plan
				or the sponsor.
										(2)VenueAn
				action under this section may be brought in the judicial district where the
				sponsor or the plan administrator resides or does business or where any asset
				of the plan is situated. A district court in which such action is brought may
				issue process with respect to such action in any other judicial
				district.
										(g)PersonnelIn
				accordance with regulations which shall be prescribed by the Secretary, the
				Secretary shall appoint, retain, and compensate accountants, actuaries, and
				other professional service personnel as may be necessary in connection with the
				Secretary’s service as trustee under this section.
									811.State
				assessment authority
									(a)In
				GeneralNotwithstanding section 514, a State may impose by law a
				contribution tax on an association health plan described in section 806(a)(2),
				if the plan commenced operations in such State after the date of the enactment
				of the Small Business Health Fairness Act of
				2011.
									(b)Contribution
				TaxFor purposes of this section, the term contribution
				tax imposed by a State on an association health plan means any tax
				imposed by such State if—
										(1)such tax is
				computed by applying a rate to the amount of premiums or contributions, with
				respect to individuals covered under the plan who are residents of such State,
				which are received by the plan from participating employers located in such
				State or from such individuals;
										(2)the rate of such
				tax does not exceed the rate of any tax imposed by such State on premiums or
				contributions received by insurers or health maintenance organizations for
				health insurance coverage offered in such State in connection with a group
				health plan;
										(3)such tax is
				otherwise nondiscriminatory; and
										(4)the amount of any
				such tax assessed on the plan is reduced by the amount of any tax or assessment
				otherwise imposed by the State on premiums, contributions, or both received by
				insurers or health maintenance organizations for health insurance coverage,
				aggregate excess/stop loss insurance (as defined in section 806(g)(1)),
				specific excess/stop loss insurance (as defined in section 806(g)(2)), other
				insurance related to the provision of medical care under the plan, or any
				combination thereof provided by such insurers or health maintenance
				organizations in such State in connection with such plan.
										812.Definitions and
				rules of construction
									(a)DefinitionsFor
				purposes of this part—
										(1)Group health
				planThe term group health plan has the meaning
				provided in section 733(a)(1) (after applying subsection (b) of this
				section).
										(2)Medical
				careThe term medical care has the meaning provided
				in section 733(a)(2).
										(3)Health insurance
				coverageThe term health insurance coverage has the
				meaning provided in section 733(b)(1).
										(4)Health insurance
				issuerThe term health insurance issuer has the
				meaning provided in section 733(b)(2).
										(5)Applicable
				authorityThe term applicable authority means the
				Secretary, except that, in connection with any exercise of the Secretary’s
				authority regarding which the Secretary is required under section 506(d) to
				consult with a State, such term means the Secretary, in consultation with such
				State.
										(6)Health
				status-related factorThe term health status-related
				factor has the meaning provided in section 733(d)(2).
										(7)Individual
				market
											(A)In
				generalThe term individual market means the market
				for health insurance coverage offered to individuals other than in connection
				with a group health plan.
											(B)Treatment of
				very small groups
												(i)In
				generalSubject to clause (ii), such term includes coverage
				offered in connection with a group health plan that has fewer than 2
				participants as current employees or participants described in section
				732(d)(3) on the first day of the plan year.
												(ii)State
				exceptionClause (i) shall not apply in the case of health
				insurance coverage offered in a State if such State regulates the coverage
				described in such clause in the same manner and to the same extent as coverage
				in the small group market (as defined in section 2791(e)(5) of the
				Public Health Service Act) is
				regulated by such State.
												(8)Participating
				employerThe term participating employer means, in
				connection with an association health plan, any employer, if any individual who
				is an employee of such employer, a partner in such employer, or a self-employed
				individual who is such employer (or any dependent, as defined under the terms
				of the plan, of such individual) is or was covered under such plan in
				connection with the status of such individual as such an employee, partner, or
				self-employed individual in relation to the plan.
										(9)Applicable state
				authorityThe term applicable State authority means,
				with respect to a health insurance issuer in a State, the State insurance
				commissioner or official or officials designated by the State to enforce the
				requirements of title XXVII of the Public Health
				Service Act for the State involved with respect to such
				issuer.
										(10)Qualified
				health actuaryThe term qualified health actuary
				means an individual who is a member of the American Academy of Actuaries with
				expertise in health care.
										(11)Affiliated
				memberThe term affiliated member means, in
				connection with a sponsor—
											(A)a person who is
				otherwise eligible to be a member of the sponsor but who elects an affiliated
				status with the sponsor,
											(B)in the case of a
				sponsor with members which consist of associations, a person who is a member of
				any such association and elects an affiliated status with the sponsor,
				or
											(C)in the case of an
				association health plan in existence on the date of the enactment of the
				Small Business Health Fairness Act of
				2011, a person eligible to be a member of the sponsor or one of
				its member associations.
											(12)Large
				employerThe term large employer means, in
				connection with a group health plan with respect to a plan year, an employer
				who employed an average of at least 51 employees on business days during the
				preceding calendar year and who employs at least 2 employees on the first day
				of the plan year.
										(13)Small
				employerThe term small employer means, in
				connection with a group health plan with respect to a plan year, an employer
				who is not a large employer.
										(b)Rules of
				Construction
										(1)Employers and
				employeesFor purposes of determining whether a plan, fund, or
				program is an employee welfare benefit plan which is an association health
				plan, and for purposes of applying this title in connection with such plan,
				fund, or program so determined to be such an employee welfare benefit
				plan—
											(A)in the case of a
				partnership, the term employer (as defined in section 3(5))
				includes the partnership in relation to the partners, and the term
				employee (as defined in section 3(6)) includes any partner in
				relation to the partnership; and
											(B)in the case of a
				self-employed individual, the term employer (as defined in section
				3(5)) and the term employee (as defined in section 3(6)) shall
				include such individual.
											(2)Plans, funds,
				and programs treated as employee welfare benefit plansIn the
				case of any plan, fund, or program which was established or is maintained for
				the purpose of providing medical care (through the purchase of insurance or
				otherwise) for employees (or their dependents) covered thereunder and which
				demonstrates to the Secretary that all requirements for certification under
				this part would be met with respect to such plan, fund, or program if such
				plan, fund, or program were a group health plan, such plan, fund, or program
				shall be treated for purposes of this title as an employee welfare benefit plan
				on and after the date of such demonstration.
										(3)Exception for
				certain benefitsThe requirements of this part shall not apply to
				a group health plan in relation to its provision of excepted benefits, as
				defined in section
				706(c).
										.
					(b)Conforming
			 Amendments to Preemption Rules
						(1)Section 514(b)(6)
			 of such Act (29 U.S.C. 1144(b)(6)) is amended by adding at the end the
			 following new subparagraph:

								(E)The preceding subparagraphs of this
				paragraph do not apply with respect to any State law in the case of an
				association health plan which is certified under part
				8.
								.
						(2)Section 514 of
			 such Act (29 U.S.C. 1144) is amended—
							(A)in subsection
			 (b)(4), by striking Subsection (a) and inserting
			 Subsections (a) and (d);
							(B)in subsection
			 (b)(5), by striking subsection (a) in subparagraph (A) and
			 inserting subsection (a) of this section and subsections (a)(2)(B) and
			 (b) of section 805, and by striking subsection (a) in
			 subparagraph (B) and inserting subsection (a) of this section or
			 subsection (a)(2)(B) or (b) of section 805;
							(C)by redesignating
			 subsection (d) as subsection (e); and
							(D)by inserting after
			 subsection (c) the following new subsection:

									(d)(1)Except as provided in
				subsection (b)(4), the provisions of this title shall supersede any and all
				State laws insofar as they may now or hereafter preclude, or have the effect of
				precluding, a health insurance issuer from offering health insurance coverage
				in connection with an association health plan which is certified under part
				8.
										(2)Except as provided in paragraphs (4)
				and (5) of subsection (b) of this section—
											(A)In any case in which health insurance
				coverage of any policy type is offered under an association health plan
				certified under part 8 to a participating employer operating in such State, the
				provisions of this title shall supersede any and all laws of such State insofar
				as they may preclude a health insurance issuer from offering health insurance
				coverage of the same policy type to other employers operating in the State
				which are eligible for coverage under such association health plan, whether or
				not such other employers are participating employers in such plan.
											(B)In any case in which health insurance
				coverage of any policy type is offered in a State under an association health
				plan certified under part 8 and the filing, with the applicable State authority
				(as defined in section 812(a)(9)), of the policy form in connection with such
				policy type is approved by such State authority, the provisions of this title
				shall supersede any and all laws of any other State in which health insurance
				coverage of such type is offered, insofar as they may preclude, upon the filing
				in the same form and manner of such policy form with the applicable State
				authority in such other State, the approval of the filing in such other
				State.
											(3)Nothing in subsection (b)(6)(E) or
				the preceding provisions of this subsection shall be construed, with respect to
				health insurance issuers or health insurance coverage, to supersede or impair
				the law of any State—
											(A)providing solvency standards or
				similar standards regarding the adequacy of insurer capital, surplus, reserves,
				or contributions, or
											(B)relating to prompt payment of
				claims.
											(4)For additional provisions relating to
				association health plans, see subsections (a)(2)(B) and (b) of section
				805.
										(5)For purposes of this subsection, the
				term association health plan has the meaning provided in section
				801(a), and the terms health insurance coverage,
				participating employer, and health insurance issuer
				have the meanings provided such terms in section 812,
				respectively.
										.
							(3)Section
			 514(b)(6)(A) of such Act (29 U.S.C. 1144(b)(6)(A)) is amended—
							(A)in clause (i)(II),
			 by striking and at the end;
							(B)in clause (ii), by
			 inserting and which does not provide medical care (within the meaning of
			 section 733(a)(2)), after arrangement,, and by striking
			 title. and inserting title, and; and
							(C)by adding at the
			 end the following new clause:

									(iii)subject to subparagraph (E), in the
				case of any other employee welfare benefit plan which is a multiple employer
				welfare arrangement and which provides medical care (within the meaning of
				section 733(a)(2)), any law of any State which regulates insurance may
				apply.
									.
							(4)Section 514(e) of
			 such Act (as redesignated by paragraph (2)(C)) is amended—
							(A)by striking
			 Nothing and inserting (1) Except as provided in paragraph
			 (2), nothing; and
							(B)by adding at the
			 end the following new paragraph:

									(2)Nothing in any other provision of law
				enacted on or after the date of the enactment of the
				Small Business Health Fairness Act of
				2011 shall be construed to alter, amend, modify, invalidate,
				impair, or supersede any provision of this title, except by specific
				cross-reference to the affected
				section.
									.
							(c)Plan
			 SponsorSection 3(16)(B) of such Act (29 U.S.C. 102(16)(B)) is
			 amended by adding at the end the following new sentence: Such term also
			 includes a person serving as the sponsor of an association health plan under
			 part 8..
					(d)Disclosure of
			 Solvency Protections Related to Self-Insured and Fully Insured Options Under
			 Association Health PlansSection 102(b) of such Act (29 U.S.C.
			 102(b)) is amended by adding at the end the following: An association
			 health plan shall include in its summary plan description, in connection with
			 each benefit option, a description of the form of solvency or guarantee fund
			 protection secured pursuant to this Act or applicable State law, if
			 any..
					(e)Savings
			 ClauseSection 731(c) of such Act is amended by inserting
			 or part 8 after this part.
					(f)Report to the
			 Congress Regarding Certification of Self-Insured Association Health
			 PlansNot later than January 1, 2014, the Secretary of Labor
			 shall report to the Committee on Education and the Workforce of the House of
			 Representatives and the Committee on Health, Education, Labor, and Pensions of
			 the Senate the effect association health plans have had, if any, on reducing
			 the number of uninsured individuals.
					(g)Clerical
			 AmendmentThe table of contents in section 1 of the
			 Employee Retirement Income Security Act of
			 1974 is amended by inserting after the item relating to section 734
			 the following new items:

								Part 8—Rules Governing Association Health
				Plans
								801. Association health plans.
								802. Certification of association health
				plans.
								803. Requirements relating to sponsors and
				boards of trustees.
								804. Participation and coverage
				requirements.
								805. Other requirements relating to plan
				documents, contribution rates, and benefit options.
								806. Maintenance of reserves and
				provisions for solvency for plans providing health benefits in addition to
				health insurance coverage.
								807. Requirements for application and
				related requirements.
								808. Notice requirements for voluntary
				termination.
								809. Corrective actions and mandatory
				termination.
								810. Trusteeship by the Secretary of
				insolvent association health plans providing health benefits in addition to
				health insurance coverage.
								811. State assessment
				authority.
								812. Definitions and rules of
				construction.

							.
					233.Clarification
			 of treatment of single employer arrangementsSection 3(40)(B) of the
			 Employee Retirement Income Security Act of
			 1974 (29 U.S.C. 1002(40)(B)) is amended—
					(1)in clause (i), by
			 inserting after control group, the following: except
			 that, in any case in which the benefit referred to in subparagraph (A) consists
			 of medical care (as defined in section 812(a)(2)), two or more trades or
			 businesses, whether or not incorporated, shall be deemed a single employer for
			 any plan year of such plan, or any fiscal year of such other arrangement, if
			 such trades or businesses are within the same control group during such year or
			 at any time during the preceding 1-year period,;
					(2)in clause (iii),
			 by striking (iii) the determination and inserting the
			 following:

							(iii)(I)in any case in which the
				benefit referred to in subparagraph (A) consists of medical care (as defined in
				section 812(a)(2)), the determination of whether a trade or business is under
				common control with another trade or business shall be determined
				under regulations of the Secretary applying principles consistent and
				coextensive with the principles applied in determining whether employees of two
				or more trades or businesses are treated as employed by a single employer under
				section 4001(b), except that, for purposes of this paragraph, an interest of
				greater than 25 percent may not be required as the minimum interest necessary
				for common control, or
								(II)in any other case, the
				determination
								;
					(3)by redesignating
			 clauses (iv) and (v) as clauses (v) and (vi), respectively; and
					(4)by inserting after
			 clause (iii) the following new clause:

							(iv)in any case in which the benefit
				referred to in subparagraph (A) consists of medical care (as defined in section
				812(a)(2)), in determining, after the application of clause (i), whether
				benefits are provided to employees of two or more employers, the arrangement
				shall be treated as having only one participating employer if, after the
				application of clause (i), the number of individuals who are employees and
				former employees of any one participating employer and who are covered under
				the arrangement is greater than 75 percent of the aggregate number of all
				individuals who are employees or former employees of participating employers
				and who are covered under the
				arrangement,
							.
					234.Enforcement
			 provisions relating to association health plans
					(a)Criminal
			 Penalties for Certain Willful MisrepresentationsSection 501 of
			 the Employee Retirement Income Security Act of
			 1974 (29 U.S.C. 1131) is amended—
						(1)by inserting
			 (a) after Sec. 501.; and
						(2)by adding at the
			 end the following new subsection:

								(b)Any person who
				willfully falsely represents, to any employee, any employee’s beneficiary, any
				employer, the Secretary, or any State, a plan or other arrangement established
				or maintained for the purpose of offering or providing any benefit described in
				section 3(1) to employees or their beneficiaries as—
									(1)being an
				association health plan which has been certified under part 8;
									(2)having been
				established or maintained under or pursuant to one or more collective
				bargaining agreements which are reached pursuant to collective bargaining
				described in section 8(d) of the National Labor Relations Act (29 U.S.C.
				158(d)) or paragraph Fourth of section 2 of the Railway Labor Act (45 U.S.C.
				152, paragraph Fourth) or which are reached pursuant to labor-management
				negotiations under similar provisions of State public employee relations laws;
				or
									(3)being a plan or
				arrangement described in section 3(40)(A)(i),
									shall,
				upon conviction, be imprisoned not more than 5 years, be fined under title 18,
				United States Code, or
				both..
						(b)Cease Activities
			 OrdersSection 502 of such Act (29 U.S.C. 1132) is amended by
			 adding at the end the following new subsection:

							(n)Association
				Health Plan Cease and Desist Orders
								(1)In
				generalSubject to paragraph (2), upon application by the
				Secretary showing the operation, promotion, or marketing of an association
				health plan (or similar arrangement providing benefits consisting of medical
				care (as defined in section 733(a)(2))) that—
									(A)is not certified
				under part 8, is subject under section 514(b)(6) to the insurance laws of any
				State in which the plan or arrangement offers or provides benefits, and is not
				licensed, registered, or otherwise approved under the insurance laws of such
				State; or
									(B)is an association
				health plan certified under part 8 and is not operating in accordance with the
				requirements under part 8 for such certification,
									a district
				court of the United States shall enter an order requiring that the plan or
				arrangement cease activities.(2)ExceptionParagraph
				(1) shall not apply in the case of an association health plan or other
				arrangement if the plan or arrangement shows that—
									(A)all benefits under
				it referred to in paragraph (1) consist of health insurance coverage;
				and
									(B)with respect to
				each State in which the plan or arrangement offers or provides benefits, the
				plan or arrangement is operating in accordance with applicable State laws that
				are not superseded under section 514.
									(3)Additional
				equitable reliefThe court may grant such additional equitable
				relief, including any relief available under this title, as it deems necessary
				to protect the interests of the public and of persons having claims for
				benefits against the
				plan.
								.
					(c)Responsibility
			 for Claims ProcedureSection 503 of such Act (29 U.S.C. 1133) is
			 amended by inserting (a) In general.— before In
			 accordance, and by adding at the end the following new
			 subsection:

							(b)Association
				Health PlansThe terms of each association health plan which is
				or has been certified under part 8 shall require the board of trustees or the
				named fiduciary (as applicable) to ensure that the requirements of this section
				are met in connection with claims filed under the
				plan.
							.
					235.Cooperation
			 between Federal and State authoritiesSection 506 of the
			 Employee Retirement Income Security Act of
			 1974 (29 U.S.C. 1136) is amended by adding at the end the following
			 new subsection:

						(d)Consultation
				With States With Respect to Association Health Plans
							(1)Agreements with
				statesThe Secretary shall consult with the State recognized
				under paragraph (2) with respect to an association health plan regarding the
				exercise of—
								(A)the Secretary’s
				authority under sections 502 and 504 to enforce the requirements for
				certification under part 8; and
								(B)the Secretary’s
				authority to certify association health plans under part 8 in accordance with
				regulations of the Secretary applicable to certification under part 8.
								(2)Recognition of
				primary domicile stateIn carrying out paragraph (1), the
				Secretary shall ensure that only one State will be recognized, with respect to
				any particular association health plan, as the State with which consultation is
				required. In carrying out this paragraph—
								(A)in the case of a
				plan which provides health insurance coverage (as defined in section
				812(a)(3)), such State shall be the State with which filing and approval of a
				policy type offered by the plan was initially obtained, and
								(B)in any other case,
				the Secretary shall take into account the places of residence of the
				participants and beneficiaries under the plan and the State in which the trust
				is
				maintained.
								.
				236.Effective date
			 and transitional and other rules
					(a)Effective
			 DateThe amendments made by this subtitle shall take effect 1
			 year after the date of the enactment of this Act. The Secretary of Labor shall
			 first issue all regulations necessary to carry out the amendments made by this
			 subtitle within 1 year after the date of the enactment of this Act.
					(b)Treatment of
			 Certain Existing Health Benefits Programs
						(1)In
			 generalIn any case in which, as of the date of the enactment of
			 this Act, an arrangement is maintained in a State for the purpose of providing
			 benefits consisting of medical care for the employees and beneficiaries of its
			 participating employers, at least 200 participating employers make
			 contributions to such arrangement, such arrangement has been in existence for
			 at least 10 years, and such arrangement is licensed under the laws of one or
			 more States to provide such benefits to its participating employers, upon the
			 filing with the applicable authority (as defined in section 812(a)(5) of the
			 Employee Retirement Income Security Act of
			 1974 (as amended by this subtitle)) by the arrangement of an
			 application for certification of the arrangement under part 8 of subtitle B of
			 title I of such Act—
							(A)such arrangement
			 shall be deemed to be a group health plan for purposes of title I of such
			 Act;
							(B)the requirements
			 of sections 801(a) and 803(a) of the Employee
			 Retirement Income Security Act of 1974 shall be deemed met with
			 respect to such arrangement;
							(C)the requirements
			 of section 803(b) of such Act shall be deemed met, if the arrangement is
			 operated by a board of directors which—
								(i)is
			 elected by the participating employers, with each employer having one vote;
			 and
								(ii)has
			 complete fiscal control over the arrangement and which is responsible for all
			 operations of the arrangement;
								(D)the requirements
			 of section 804(a) of such Act shall be deemed met with respect to such
			 arrangement; and
							(E)the arrangement
			 may be certified by any applicable authority with respect to its operations in
			 any State only if it operates in such State on the date of
			 certification.
							The
			 provisions of this subsection shall cease to apply with respect to any such
			 arrangement at such time after the date of the enactment of this Act as the
			 applicable requirements of this subsection are not met with respect to such
			 arrangement.(2)DefinitionsFor
			 purposes of this subsection, the terms group health plan,
			 medical care, and participating employer shall have
			 the meanings provided in section 812 of the Employee Retirement Income Security Act of
			 1974, except that the reference in paragraph (7) of such section to
			 an association health plan shall be deemed a reference to an
			 arrangement referred to in this subsection.
						IIIInterstate
			 Market for Health Insurance
			301.Cooperative
			 governing of individual health insurance coverage
				(a)In
			 GeneralTitle XXVII of the Public
			 Health Service Act (42 U.S.C. 300gg et seq.), as restored by section
			 2, is amended by adding at the end the following new part:

						DCooperative
				Governing of Individual Health Insurance Coverage
							2795.DefinitionsIn this part:
								(1)Primary
				stateThe term primary State means, with respect to
				individual health insurance coverage offered by a health insurance issuer, the
				State designated by the issuer as the State whose covered laws shall govern the
				health insurance issuer in the sale of such coverage under this part. An
				issuer, with respect to a particular policy, may only designate one such State
				as its primary State with respect to all such coverage it offers. Such an
				issuer may not change the designated primary State with respect to individual
				health insurance coverage once the policy is issued, except that such a change
				may be made upon renewal of the policy. With respect to such designated State,
				the issuer is deemed to be doing business in that State.
								(2)Secondary
				stateThe term secondary State means, with respect
				to individual health insurance coverage offered by a health insurance issuer,
				any State that is not the primary State. In the case of a health insurance
				issuer that is selling a policy in, or to a resident of, a secondary State, the
				issuer is deemed to be doing business in that secondary State.
								(3)Health insurance
				issuerThe term health insurance issuer has the
				meaning given such term in section 2791(b)(2), except that such an issuer must
				be licensed in the primary State and be qualified to sell individual health
				insurance coverage in that State.
								(4)Individual
				health insurance coverageThe term individual health
				insurance coverage means health insurance coverage offered in the
				individual market, as defined in section 2791(e)(1), but does not include
				excepted benefits described in section 2791(c).
								(5)Applicable state
				authorityThe term applicable State authority means,
				with respect to a health insurance issuer in a State, the State insurance
				commissioner or official or officials designated by the State to enforce the
				requirements of this title for the State with respect to the issuer.
								(6)Hazardous
				financial conditionThe term hazardous financial
				condition means that, based on its present or reasonably anticipated
				financial condition, a health insurance issuer is unlikely to be able—
									(A)to meet
				obligations to policyholders with respect to known claims and reasonably
				anticipated claims; or
									(B)to pay other
				obligations in the normal course of business.
									(7)Covered
				laws
									(A)In
				generalThe term covered laws means the laws, rules,
				regulations, agreements, and orders governing the insurance business pertaining
				to—
										(i)individual health
				insurance coverage issued by a health insurance issuer;
										(ii)the offer, sale,
				rating (including medical underwriting), renewal, and issuance of individual
				health insurance coverage to an individual;
										(iii)the provision to
				an individual in relation to individual health insurance coverage of health
				care and insurance related services;
										(iv)the provision to
				an individual in relation to individual health insurance coverage of
				management, operations, and investment activities of a health insurance issuer;
				and
										(v)the provision to
				an individual in relation to individual health insurance coverage of loss
				control and claims administration for a health insurance issuer with respect to
				liability for which the issuer provides insurance.
										(B)ExceptionSuch
				term does not include any law, rule, regulation, agreement, or order governing
				the use of care or cost management techniques, including any requirement
				related to provider contracting, network access or adequacy, health care data
				collection, or quality assurance.
									(8)StateThe
				term State means only the 50 States and the District of
				Columbia.
								(9)Unfair claims
				settlement practicesThe term unfair claims settlement
				practices means only the following practices:
									(A)Knowingly
				misrepresenting to claimants and insured individuals relevant facts or policy
				provisions relating to coverage at issue.
									(B)Failing to
				acknowledge with reasonable promptness pertinent communications with respect to
				claims arising under policies.
									(C)Failing to adopt
				and implement reasonable standards for the prompt investigation and settlement
				of claims arising under policies.
									(D)Failing to
				effectuate prompt, fair, and equitable settlement of claims submitted in which
				liability has become reasonably clear.
									(E)Refusing to pay
				claims without conducting a reasonable investigation.
									(F)Failing to affirm
				or deny coverage of claims within a reasonable period of time after having
				completed an investigation related to those claims.
									(G)A pattern or
				practice of compelling insured individuals or their beneficiaries to institute
				suits to recover amounts due under its policies by offering substantially less
				than the amounts ultimately recovered in suits brought by them.
									(H)A pattern or
				practice of attempting to settle or settling claims for less than the amount
				that a reasonable person would believe the insured individual or his or her
				beneficiary was entitled by reference to written or printed advertising
				material accompanying or made part of an application.
									(I)Attempting to
				settle or settling claims on the basis of an application that was materially
				altered without notice to, or knowledge or consent of, the insured.
									(J)Failing to provide
				forms necessary to present claims within 15 calendar days of a requests with
				reasonable explanations regarding their use.
									(K)Attempting to
				cancel a policy in less time than that prescribed in the policy or by the law
				of the primary State.
									(10)Fraud and
				abuseThe term fraud and abuse means an act or
				omission committed by a person who, knowingly and with intent to defraud,
				commits, or conceals any material information concerning, one or more of the
				following:
									(A)Presenting,
				causing to be presented or preparing with knowledge or belief that it will be
				presented to or by an insurer, a reinsurer, broker or its agent, false
				information as part of, in support of or concerning a fact material to one or
				more of the following:
										(i)An
				application for the issuance or renewal of an insurance policy or reinsurance
				contract.
										(ii)The rating of an
				insurance policy or reinsurance contract.
										(iii)A claim for
				payment or benefit pursuant to an insurance policy or reinsurance
				contract.
										(iv)Premiums paid on
				an insurance policy or reinsurance contract.
										(v)Payments made in
				accordance with the terms of an insurance policy or reinsurance
				contract.
										(vi)A
				document filed with the commissioner or the chief insurance regulatory official
				of another jurisdiction.
										(vii)The financial
				condition of an insurer or reinsurer.
										(viii)The formation,
				acquisition, merger, reconsolidation, dissolution or withdrawal from one or
				more lines of insurance or reinsurance in all or part of a State by an insurer
				or reinsurer.
										(ix)The issuance of
				written evidence of insurance.
										(x)The reinstatement
				of an insurance policy.
										(B)Solicitation or
				acceptance of new or renewal insurance risks on behalf of an insurer,
				reinsurer, or other person engaged in the business of insurance by a person who
				knows or should know that the insurer or other person responsible for the risk
				is insolvent at the time of the transaction.
									(C)Transaction of the
				business of insurance in violation of laws requiring a license, certificate of
				authority or other legal authority for the transaction of the business of
				insurance.
									(D)Attempt to commit,
				aiding or abetting in the commission of, or conspiracy to commit the acts or
				omissions specified in this paragraph.
									2796.Application of
				law
								(a)In
				GeneralThe covered laws of the primary State shall apply to
				individual health insurance coverage offered by a health insurance issuer in
				the primary State and in any secondary State, but only if the coverage and
				issuer comply with the conditions of this section with respect to the offering
				of coverage in any secondary State.
								(b)Exemptions From
				Covered Laws in a Secondary StateExcept as provided in this
				section, a health insurance issuer with respect to its offer, sale, rating
				(including medical underwriting), renewal, and issuance of individual health
				insurance coverage in any secondary State is exempt from any covered laws of
				the secondary State (and any rules, regulations, agreements, or orders sought
				or issued by such State under or related to such covered laws) to the extent
				that such laws would—
									(1)make unlawful, or
				regulate, directly or indirectly, the operation of the health insurance issuer
				operating in the secondary State, except that any secondary State may require
				such an issuer—
										(A)to pay, on a
				nondiscriminatory basis, applicable premium and other taxes (including
				high-risk pool assessments) which are levied on insurers and surplus lines
				insurers, brokers, or policyholders under the laws of the State;
										(B)to register with
				and designate the State insurance commissioner as its agent solely for the
				purpose of receiving service of legal documents or process;
										(C)to submit to an
				examination of its financial condition by the State insurance commissioner in
				any State in which the issuer is doing business to determine the issuer’s
				financial condition, if—
											(i)the State
				insurance commissioner of the primary State has not done an examination within
				the period recommended by the National Association of Insurance Commissioners;
				and
											(ii)any such
				examination is conducted in accordance with the examiners’ handbook of the
				National Association of Insurance Commissioners and is coordinated to avoid
				unjustified duplication and unjustified repetition;
											(D)to comply with a
				lawful order issued—
											(i)in
				a delinquency proceeding commenced by the State insurance commissioner if there
				has been a finding of financial impairment under subparagraph (C); or
											(ii)in a voluntary
				dissolution proceeding;
											(E)to comply with an
				injunction issued by a court of competent jurisdiction, upon a petition by the
				State insurance commissioner alleging that the issuer is in hazardous financial
				condition;
										(F)to participate, on
				a nondiscriminatory basis, in any insurance insolvency guaranty association or
				similar association to which a health insurance issuer in the State is required
				to belong;
										(G)to comply with any
				State law regarding fraud and abuse (as defined in section 2795(10)), except
				that if the State seeks an injunction regarding the conduct described in this
				subparagraph, such injunction must be obtained from a court of competent
				jurisdiction;
										(H)to comply with any
				State law regarding unfair claims settlement practices (as defined in section
				2795(9)); or
										(I)to comply with the
				applicable requirements for independent review under section 2798 with respect
				to coverage offered in the State;
										(2)require any
				individual health insurance coverage issued by the issuer to be countersigned
				by an insurance agent or broker residing in that Secondary State; or
									(3)otherwise
				discriminate against the issuer issuing insurance in both the primary State and
				in any secondary State.
									(c)Clear and
				Conspicuous DisclosureA health insurance issuer shall provide
				the following notice, in 12-point bold type, in any insurance coverage offered
				in a secondary State under this part by such a health insurance issuer and at
				renewal of the policy, with the 5 blank spaces therein being appropriately
				filled with the name of the health insurance issuer, the name of primary State,
				the name of the secondary State, the name of the secondary State, and the name
				of the secondary State, respectively, for the coverage concerned:
									This
				policy is issued by _____ and is governed by the laws and regulations of the
				State of _____, and it has met all the laws of that State as determined by that
				State’s Department of Insurance. This policy may be less expensive than others
				because it is not subject to all of the insurance laws and regulations of the
				State of _____, including coverage of some services or benefits mandated by the
				law of the State of _____. Additionally, this policy is not subject to all of
				the consumer protection laws or restrictions on rate changes of the State of
				_____. As with all insurance products, before purchasing this policy, you
				should carefully review the policy and determine what health care services the
				policy covers and what benefits it provides, including any exclusions,
				limitations, or conditions for such services or benefits.(d)Prohibition on
				Certain Reclassifications and Premium Increases
									(1)In
				generalFor purposes of this section, a health insurance issuer
				that provides individual health insurance coverage to an individual under this
				part in a primary or secondary State may not upon renewal—
										(A)move or reclassify
				the individual insured under the health insurance coverage from the class such
				individual is in at the time of issue of the contract based on the
				health-status related factors of the individual; or
										(B)increase the
				premiums assessed the individual for such coverage based on a health
				status-related factor or change of a health status-related factor or the past
				or prospective claim experience of the insured individual.
										(2)ConstructionNothing
				in paragraph (1) shall be construed to prohibit a health insurance
				issuer—
										(A)from terminating
				or discontinuing coverage or a class of coverage in accordance with subsections
				(b) and (c) of section 2742;
										(B)from raising
				premium rates for all policy holders within a class based on claims
				experience;
										(C)from changing
				premiums or offering discounted premiums to individuals who engage in wellness
				activities at intervals prescribed by the issuer, if such premium changes or
				incentives—
											(i)are disclosed to
				the consumer in the insurance contract;
											(ii)are based on
				specific wellness activities that are not applicable to all individuals;
				and
											(iii)are not
				obtainable by all individuals to whom coverage is offered;
											(D)from reinstating
				lapsed coverage; or
										(E)from retroactively
				adjusting the rates charged an insured individual if the initial rates were set
				based on material misrepresentation by the individual at the time of
				issue.
										(e)Prior Offering
				of Policy in Primary StateA health insurance issuer may not
				offer for sale individual health insurance coverage in a secondary State unless
				that coverage is currently offered for sale in the primary State.
								(f)Licensing of
				Agents or Brokers for Health Insurance IssuersAny State may
				require that a person acting, or offering to act, as an agent or broker for a
				health insurance issuer with respect to the offering of individual health
				insurance coverage obtain a license from that State, with commissions or other
				compensation subject to the provisions of the laws of that State, except that a
				State may not impose any qualification or requirement which discriminates
				against a nonresident agent or broker.
								(g)Documents for
				Submission to State Insurance CommissionerEach health insurance
				issuer issuing individual health insurance coverage in both primary and
				secondary States shall submit—
									(1)to the insurance
				commissioner of each State in which it intends to offer such coverage, before
				it may offer individual health insurance coverage in such State—
										(A)a copy of the plan
				of operation or feasibility study or any similar statement of the policy being
				offered and its coverage (which shall include the name of its primary State and
				its principal place of business);
										(B)written notice of
				any change in its designation of its primary State; and
										(C)written notice
				from the issuer of the issuer’s compliance with all the laws of the primary
				State; and
										(2)to the insurance
				commissioner of each secondary State in which it offers individual health
				insurance coverage, a copy of the issuer’s quarterly financial statement
				submitted to the primary State, which statement shall be certified by an
				independent public accountant and contain a statement of opinion on loss and
				loss adjustment expense reserves made by—
										(A)a member of the
				American Academy of Actuaries; or
										(B)a qualified loss
				reserve specialist.
										(h)Power of Courts
				To Enjoin ConductNothing in this section shall be construed to
				affect the authority of any Federal or State court to enjoin—
									(1)the solicitation
				or sale of individual health insurance coverage by a health insurance issuer to
				any person or group who is not eligible for such insurance; or
									(2)the solicitation
				or sale of individual health insurance coverage that violates the requirements
				of the law of a secondary State which are described in subparagraphs (A)
				through (H) of section 2796(b)(1).
									(i)Power of
				Secondary States To Take Administrative ActionNothing in this
				section shall be construed to affect the authority of any State to enjoin
				conduct in violation of that State’s laws described in section
				2796(b)(1).
								(j)State Powers To
				Enforce State Laws
									(1)In
				generalSubject to the provisions of subsection (b)(1)(G)
				(relating to injunctions) and paragraph (2), nothing in this section shall be
				construed to affect the authority of any State to make use of any of its powers
				to enforce the laws of such State with respect to which a health insurance
				issuer is not exempt under subsection (b).
									(2)Courts of
				competent jurisdictionIf a State seeks an injunction regarding
				the conduct described in paragraphs (1) and (2) of subsection (h), such
				injunction must be obtained from a Federal or State court of competent
				jurisdiction.
									(k)States’
				Authority To SueNothing in this section shall affect the
				authority of any State to bring action in any Federal or State court.
								(l)Generally
				Applicable LawsNothing in this section shall be construed to
				affect the applicability of State laws generally applicable to persons or
				corporations.
								(m)Guaranteed
				Availability of Coverage to HIPAA Eligible IndividualsTo the
				extent that a health insurance issuer is offering coverage in a primary State
				that does not accommodate residents of secondary States or does not provide a
				working mechanism for residents of a secondary State, and the issuer is
				offering coverage under this part in such secondary State which has not adopted
				a qualified high-risk pool as its acceptable alternative mechanism (as defined
				in section 2744(c)(2)), the issuer shall, with respect to any individual health
				insurance coverage offered in a secondary State under this part, comply with
				the guaranteed availability requirements for eligible individuals in section
				2741.
								2797.Primary State
				must meet Federal floor before issuer may sell into secondary
				StatesA health insurance
				issuer may not offer, sell, or issue individual health insurance coverage in a
				secondary State if the State insurance commissioner does not use a risk-based
				capital formula for the determination of capital and surplus requirements for
				all health insurance issuers.
							2798.Limitation on
				individual purchase in secondary StateEffective beginning two years after the date
				of enactment of this part, an individual in a State may not buy individual
				health insurance coverage in a secondary State if the premium for individual
				health insurance in the primary State (with respect to the individual) exceeds
				the national average premium by 10 percent or more.
							2799.Independent
				external appeals procedures
								(a)Right to
				External AppealA health insurance issuer may not offer, sell, or
				issue individual health insurance coverage in a secondary State under the
				provisions of this title unless—
									(1)both the secondary
				State and the primary State have legislation or regulations in place
				establishing an independent review process for individuals who are covered by
				individual health insurance coverage, or
									(2)in any case in
				which the requirements of subparagraph (A) are not met with respect to the
				either of such States, the issuer provides an independent review mechanism
				substantially identical (as determined by the applicable State authority of
				such State) to that prescribed in the Health Carrier External
				Review Model Act of the National Association of Insurance
				Commissioners for all individuals who purchase insurance coverage under the
				terms of this part, except that, under such mechanism, the review is conducted
				by an independent medical reviewer, or a panel of such reviewers, with respect
				to whom the requirements of subsection (b) are met.
									(b)Qualifications
				of Independent Medical ReviewersIn the case of any independent
				review mechanism referred to in subsection (a)(2)—
									(1)In
				generalIn referring a denial of a claim to an independent
				medical reviewer, or to any panel of such reviewers, to conduct independent
				medical review, the issuer shall ensure that—
										(A)each independent
				medical reviewer meets the qualifications described in paragraphs (2) and
				(3);
										(B)with respect to
				each review, each reviewer meets the requirements of paragraph (4) and the
				reviewer, or at least 1 reviewer on the panel, meets the requirements described
				in paragraph (5); and
										(C)compensation
				provided by the issuer to each reviewer is consistent with paragraph
				(6).
										(2)Licensure and
				expertiseEach independent medical reviewer shall be a physician
				(allopathic or osteopathic) or health care professional who—
										(A)is appropriately
				credentialed or licensed in one or more States to deliver health care services;
				and
										(B)typically treats
				the condition, makes the diagnosis, or provides the type of treatment under
				review.
										(3)Independence
										(A)In
				generalSubject to subparagraph (B), each independent medical
				reviewer in a case shall—
											(i)not be a related
				party (as defined in paragraph (7));
											(ii)not have a
				material familial, financial, or professional relationship with such a party;
				and
											(iii)not otherwise
				have a conflict of interest with such a party (as determined under
				regulations).
											(B)ExceptionNothing
				in subparagraph (A) shall be construed to—
											(i)prohibit an
				individual, solely on the basis of affiliation with the issuer, from serving as
				an independent medical reviewer if—
												(I)a non-affiliated
				individual is not reasonably available;
												(II)the affiliated
				individual is not involved in the provision of items or services in the case
				under review;
												(III)the fact of such
				an affiliation is disclosed to the issuer and the enrollee (or authorized
				representative) and neither party objects; and
												(IV)the affiliated
				individual is not an employee of the issuer and does not provide services
				exclusively or primarily to or on behalf of the issuer;
												(ii)prohibit an
				individual who has staff privileges at the institution where the treatment
				involved takes place from serving as an independent medical reviewer merely on
				the basis of such affiliation if the affiliation is disclosed to the issuer and
				the enrollee (or authorized representative), and neither party objects;
				or
											(iii)prohibit receipt
				of compensation by an independent medical reviewer from an entity if the
				compensation is provided consistent with paragraph (6).
											(4)Practicing
				health care professional in same field
										(A)In
				generalIn a case involving treatment, or the provision of items
				or services—
											(i)by
				a physician, a reviewer shall be a practicing physician (allopathic or
				osteopathic) of the same or similar specialty, as a physician who, acting
				within the appropriate scope of practice within the State in which the service
				is provided or rendered, typically treats the condition, makes the diagnosis,
				or provides the type of treatment under review; or
											(ii)by a
				non-physician health care professional, the reviewer, or at least 1 member of
				the review panel, shall be a practicing non-physician health care professional
				of the same or similar specialty as the non-physician health care professional
				who, acting within the appropriate scope of practice within the State in which
				the service is provided or rendered, typically treats the condition, makes the
				diagnosis, or provides the type of treatment under review.
											(B)Practicing
				definedFor purposes of this paragraph, the term
				practicing means, with respect to an individual who is a physician
				or other health care professional, that the individual provides health care
				services to individual patients on average at least 2 days per week.
										(5)Pediatric
				expertiseIn the case of an external review relating to a child,
				a reviewer shall have expertise under paragraph (2) in pediatrics.
									(6)Limitations on
				reviewer compensationCompensation provided by the issuer to an
				independent medical reviewer in connection with a review under this section
				shall—
										(A)not exceed a
				reasonable level; and
										(B)not be contingent
				on the decision rendered by the reviewer.
										(7)Related party
				definedFor purposes of this section, the term related
				party means, with respect to a denial of a claim under a coverage
				relating to an enrollee, any of the following:
										(A)The issuer
				involved, or any fiduciary, officer, director, or employee of the
				issuer.
										(B)The enrollee (or
				authorized representative).
										(C)The health care
				professional that provides the items or services involved in the denial.
										(D)The institution at
				which the items or services (or treatment) involved in the denial are
				provided.
										(E)The manufacturer
				of any drug or other item that is included in the items or services involved in
				the denial.
										(F)Any other party
				determined under any regulations to have a substantial interest in the denial
				involved.
										(8)DefinitionsFor
				purposes of this subsection:
										(A)EnrolleeThe
				term enrollee means, with respect to health insurance coverage
				offered by a health insurance issuer, an individual enrolled with the issuer to
				receive such coverage.
										(B)Health care
				professionalThe term health care professional means
				an individual who is licensed, accredited, or certified under State law to
				provide specified health care services and who is operating within the scope of
				such licensure, accreditation, or certification.
										2800.Enforcement
								(a)In
				GeneralSubject to subsection (b), with respect to specific
				individual health insurance coverage the primary State for such coverage has
				sole jurisdiction to enforce the primary State’s covered laws in the primary
				State and any secondary State.
								(b)Secondary
				State’s AuthorityNothing in subsection (a) shall be construed to
				affect the authority of a secondary State to enforce its laws as set forth in
				the exception specified in section 2796(b)(1).
								(c)Court
				InterpretationIn reviewing action initiated by the applicable
				secondary State authority, the court of competent jurisdiction shall apply the
				covered laws of the primary State.
								(d)Notice of
				Compliance FailureIn the case of individual health insurance
				coverage offered in a secondary State that fails to comply with the covered
				laws of the primary State, the applicable State authority of the secondary
				State may notify the applicable State authority of the primary
				State.
								.
				(b)Effective
			 DateThe amendment made by subsection (a) shall apply to
			 individual health insurance coverage offered, issued, or sold after the date
			 that is one year after the date of the enactment of this Act.
				(c)GAO Ongoing
			 Study and Reports
					(1)StudyThe
			 Comptroller General of the United States shall conduct an ongoing study
			 concerning the effect of the amendment made by subsection (a) on—
						(A)the number of
			 uninsured and under-insured;
						(B)the availability
			 and cost of health insurance policies for individuals with pre-existing medical
			 conditions;
						(C)the availability
			 and cost of health insurance policies generally;
						(D)the elimination or
			 reduction of different types of benefits under health insurance policies
			 offered in different States; and
						(E)cases of fraud or
			 abuse relating to health insurance coverage offered under such amendment and
			 the resolution of such cases.
						(2)Annual
			 reportsThe Comptroller General shall submit to Congress an
			 annual report, after the end of each of the 5 years following the effective
			 date of the amendment made by subsection (a), on the ongoing study conducted
			 under paragraph (1).
					(d)SeverabilityIf
			 any provision of the section or the application of such provision to any person
			 or circumstance is held to be unconstitutional, the remainder of this section
			 and the application of the provisions of such to any other person or
			 circumstance shall not be affected.
				IVSafety Net
			 Reforms
			401.Requiring
			 outreach and coverage before expansion of eligibility
				(a)State child
			 health plan required To specify how it will achieve coverage for 90 percent of
			 targeted low-Income children
					(1)In
			 generalSection 2102(a) of the Social Security Act (42 U.S.C.
			 1397bb(a)) is amended—
						(A)in paragraph (6),
			 by striking and at the end;
						(B)in paragraph (7),
			 by striking the period at the end and inserting ; and;
			 and
						(C)by adding at the
			 end the following new paragraph:

								(8)how the eligibility and benefits provided
				for under the plan for each fiscal year (beginning with fiscal year 2013) will
				allow for the State’s annual funding allotment to cover at least 90 percent of
				the eligible targeted low-income children in the
				State.
								.
						(2)Effective
			 dateThe amendments made by paragraph (1) shall apply to State
			 child health plans for fiscal years beginning with fiscal year 2013.
					(b)Limitation on
			 program expansions until lowest income eligible individuals
			 enrolledSection 2105(c) of such Act (42 U.S.C. 1397dd(c)) is
			 amended by adding at the end the following new paragraph:

						(12)Limitation on
				increased coverage of higher income children
							(A)In
				generalFor child health assistance furnished in a fiscal year
				beginning with fiscal year 2013:
								(i)No payment for
				children with family income above 300 percent of poverty linePayment shall not be made under this
				section for child health assistance for a targeted low-income child in a family
				the income of which exceeds 300 percent of the poverty line applicable to a
				family of the size involved.
								(ii)Special rules
				for payment for children with family income above 200 percent of poverty
				lineIn the case of child
				health assistance for a targeted low-income child in a family the income of
				which exceeds 200 percent (but does not exceed 300 percent) of the poverty line
				applicable to a family of the size involved no payment shall be made under this
				section for such assistance unless the State demonstrates to the satisfaction
				of the Secretary that—
									(I)the State has met
				the 90 percent retrospective coverage test specified in subparagraph (B)(i) for
				the previous fiscal year; and
									(II)the State will
				meet the 90 percent prospective coverage test specified in subparagraph (B)(ii)
				for the fiscal year.
									(B)90 percent
				coverage tests
								(i)Retrospective
				testThe 90 percent retrospective coverage test specified in this
				clause is, for a State for a fiscal year, that on average during the fiscal
				year, the State has enrolled under this title or title XIX at least 90 percent
				of the individuals residing in the State who—
									(I)are children under
				19 years of age (or are pregnant women) and are eligible for medical assistance
				under title XIX; or
									(II)are targeted
				low-income children whose family income does not exceed 200 percent of the
				poverty line and who are eligible for child health assistance under this
				title.
									(ii)Prospective
				testThe 90 percent prospective test specified in this clause is,
				for a State for a fiscal year, that on average during the fiscal year, the
				State will enroll under this title or title XIX at least 90 percent of the
				individuals residing in the State who—
									(I)are children under
				19 years of age (or are pregnant women) and are eligible for medical assistance
				under title XIX; or
									(II)are targeted low-income children whose
				family income does not exceed such percent of the poverty line (in excess of
				200 percent) as the State elects consistent with this paragraph and who are
				eligible for child health assistance under this title.
									(C)GrandfatherClauses
				(i) and (ii) of subparagraph (A) shall not apply to the provision of child
				health assistance—
								(i)to
				a targeted low-income child who is enrolled for child health assistance under
				this title as of September 30, 2010;
								(ii)to a pregnant
				woman who is enrolled for assistance under this title as of September 30, 2011,
				through the completion of the post-partum period following completion of her
				pregnancy; and
								(iii)for items and
				services furnished before October 1, 2012, to an individual who is not a
				targeted low-income child and who is enrolled for assistance under this title
				as of September 30, 2011.
								(D)Treatment of
				pregnant womenIn this
				paragraph and sections 2102(a)(8) and 2104(a)(2), the term targeted
				low-income child includes an individual under age 19, including the
				period from conception to birth, who is eligible for child health assistance
				under this title by virtue of the definition of the term child
				under section 457.10 of title 42, Code of Federal
				Regulations.
							.
				(c)Standardization
			 of income determinations
					(1)In
			 generalSection 2110(d) of such Act (42 U.S.C. 1397jj) is amended
			 by adding at the end the following new subsection:

							(d)Standardization
				of income determinationsIn determining family income under this
				title (including in the case of a State child health plan that provides health
				benefits coverage in the manner described in section 2101(a)(2)), a State shall
				base such determination on gross income (including amounts that would be
				included in gross income if they were not exempt from income taxation) and may
				only take into consideration such income disregards as the Secretary shall
				develop.
							.
					(2)Effective
			 date(A)Subject to subparagraph
			 (B), the amendment made by paragraph (1) shall apply to determinations (and
			 redeterminations) of income made on or after April 1, 2012.
						(B)In
			 the case of a State child health plan under title XXI of the Social Security
			 Act which the Secretary of Health and Human Services determines requires State
			 legislation (other than legislation appropriating funds) in order for the plan
			 to meet the additional requirement imposed by the amendment made by paragraph
			 (1), the State child health plan shall not be regarded as failing to comply
			 with the requirements of such title solely on the basis of its failure to meet
			 this additional requirement before the first day of the first calendar quarter
			 beginning after the close of the first regular session of the State legislature
			 that begins after the date of the enactment of this Act. For purposes of the
			 previous sentence, in the case of a State that has a 2-year legislative
			 session, each year of such session shall be deemed to be a separate regular
			 session of the State legislature.
						402.Easing
			 administrative barriers to State cooperation with employer-sponsored insurance
			 coverage
				(a)Requiring some
			 coverage for employer-Sponsored insurance under CHIPSection
			 2102(a) of the Social Security Act (42 U.S.C. 1397b(a)), as amended by section
			 401(a), is amended—
					(1)in paragraph (7),
			 by striking and at the end;
					(2)in paragraph (8),
			 by striking the period at the end and inserting ; and;
			 and
					(3)by adding at the
			 end the following new paragraph:

							(9)effective for plan years beginning on or
				after October 1, 2012, how the plan will provide for child health assistance
				with respect to targeted low-income children covered under a group health
				plan.
							.
					(b)Federal
			 financial participation for employer-Sponsored insuranceSection 2105 of such Act (42 U.S.C. 1397d)
			 is amended—
					(1)in subsection
			 (a)(1)(C), by inserting before the semicolon at the end the following:
			 and, subject to paragraph (3)(C), in the form of payment of the premiums
			 for coverage under a group health plan that includes coverage of targeted
			 low-income children and benefits supplemental to such coverage;
			 and
					(2)by amending
			 paragraph (3) of subsection (c) to read as follows:

							(3)Purchase of
				employer-sponsored insurance
								(A)In
				generalPayment may be made to a State under subsection
				(a)(1)(C), subject to the provisions of this paragraph, for the purchase of
				family coverage under a group health plan that includes coverage of targeted
				low-income children unless such coverage would otherwise substitute for
				coverage that would be provided to such children but for the purchase of family
				coverage.
								(B)Waiver of
				certain provisionsWith
				respect to coverage described in subparagraph (A)—
									(i)notwithstanding
				section 2102, no minimum benefits requirement (other than those otherwise
				applicable with respect to services referred to in section 2102(a)(7)) under
				this title shall apply; and
									(ii)no limitation on
				beneficiary cost-sharing otherwise applicable under this title or title XIX
				shall apply.
									(C)Required
				provision of supplemental benefitsIf the coverage described in
				subparagraph (A) does not provide coverage for the services referred to in
				section 2102(a)(7), the State child health plan shall provide coverage of such
				services as supplemental benefits.
								(D)Limitation on
				FFPThe amount of the payment under paragraph (1)(C) for coverage
				described in subparagraph (A) (and supplemental benefits under subparagraph (C)
				for individuals so covered) during a fiscal year may not exceed the product
				of—
									(i)the national per
				capita expenditure under this title (taking into account both Federal and State
				expenditures) for the previous fiscal year (as determined by the Secretary
				using the best available data);
									(ii)the enhanced FMAP
				for the State and fiscal year involved; and
									(iii)the number of
				targeted low-income children for whom such coverage is provided.
									(E)Voluntary
				enrollmentA State child health plan—
									(i)may not require a
				targeted low-income child to enroll in coverage described in subparagraph (A)
				in order to obtain child health assistance under this title;
									(ii)before providing such child health
				assistance for such coverage of a child, shall make available (which may be
				through an Internet Web site or other means including the State transparency
				plan portal established under section 901 of the
				Empowering Patients First Act)
				to the parent or guardian of the child information on the coverage available
				under this title, including benefits and cost-sharing; and
									(iii)shall provide at
				least one opportunity per fiscal year for beneficiaries to switch coverage
				under this title from coverage described in subparagraph (A) to the coverage
				that is otherwise made available under this title.
									(F)Information on
				coverage optionsA State child health plan shall—
									(i)describe how the State will notify
				potential beneficiaries of coverage described in subparagraph (A);
									(ii)provide such
				notification in writing at least during the initial application for enrollment
				under this title and during redeterminations of eligibility if the individual
				was enrolled before October 1, 2012; and
									(iii)post a description of these coverage
				options on any official Web site that may be established by the State in
				connection with the plan, including the State transparency plan portal
				established under section 901 of the Empowering Patients First Act.
									(G)Semiannual
				verification of coverageIf coverage described in subparagraph
				(A) is provided under a group health plan with respect to a targeted low-income
				child, the State child health plan shall provide for the collection, at least
				once every six months, of proof from the plan that the child is enrolled in
				such coverage.
								(H)Rule of
				constructionNothing in this
				section is to be construed to prohibit a State from—
									(i)offering wrap around benefits in order for
				a group health plan to meet any State-established minimum benefit
				requirements;
									(ii)establishing a cost-effectiveness test to
				qualify for coverage under such a plan;
									(iii)establishing limits on beneficiary
				cost-sharing under such a plan;
									(iv)paying all or part of a beneficiary’s
				cost-sharing requirements under such a plan;
									(v)paying less than the full cost of the
				employee’s share of the premium under such a plan, including prorating the cost
				of the premium to pay for only what the State determines is the portion of the
				premium that covers targeted low-income children;
									(vi)using State funds to pay for benefits above
				the Federal upper limit established under subparagraph (C);
									(vii)allowing beneficiaries enrolled in group
				health plans from changing plans to another coverage option available under
				this title at any time; or
									(viii)providing any guidance or information it
				deems appropriate in order to help beneficiaries make an informed decision
				regarding the option to enroll in coverage described in subparagraph
				(A).
									(I)Group health
				plan definedIn this paragraph, the term group health
				plan has the meaning given such term in section 2791(a)(1) of the Public
				Health Service Act (42 U.S.C.
				300gg–91(a)(1)).
								.
					(c)Application
			 under MedicaidThe Secretary of Health and Human Services shall
			 provide for the application of the amendments made by subsections (a) and (b)
			 under the Medicaid program under title XIX of the Social Security Act in the
			 same manner as such amendments apply to SCHIP under title XXI of such
			 Act.
				403.Improving
			 beneficiary choice in SCHIP
				(a)Requiring
			 offering of alternative coverage optionsSection 2102 of the
			 Social Security Act (42 U.S.C. 1397b), as amended by sections 401(a) and
			 402(a), is amended—
					(1)in subsection
			 (a)—
						(A)in paragraph (8),
			 by striking and at the end;
						(B)in paragraph (9),
			 by striking the period at the end and inserting ; and;
			 and
						(C)by adding at the
			 end the following new paragraph:

								(10)effective for plan years beginning on or
				after October 1, 2012, how the plan will provide for child health assistance
				with respect to targeted low-income children through alternative coverage
				options in accordance with subsection
				(e).
								;
				and
						(2)by adding at the
			 end the following new subsection:

							(d)Alternative
				coverage options
								(1)In
				generalEffective October 1, 2012, a State child health plan
				shall provide for the offering of any qualified alternative coverage that a
				qualified entity seeks to offer to targeted low-income children through the
				plan in the State.
								(2)Application of
				uniform financial limitation for all alternative coverage
				optionsWith respect to all qualified alternative coverage
				offered in a State, the State child health plan shall establish a uniform
				dollar limitation on the per capita monthly amount that will be paid by the
				State to the qualified entity with respect to such coverage provided to a
				targeted low-income child. Such limitation may not be less than 90 percent of
				the per capita monthly payment made for coverage offered under the State child
				health plan that is not in the form of an alternative coverage option. Nothing
				in this paragraph shall be construed—
									(A)as requiring a
				State to provide for the full payment of premiums for qualified alternative
				coverage;
									(B)as preventing a
				State from charging additional premiums to cover the difference between the
				cost of qualified alternative coverage and the amount of such payment
				limitation; or
									(C)as preventing a
				State from using its own funds to provide a dollar limitation that exceeds the
				Federal financial participation as limited under section 2105(c)(10).
									(3)Treatment of low
				cost coverage
									(A)In
				generalExcept as provided in subparagraph (B), if the uniform
				dollar limitation under paragraph (2) exceeds the premium for qualified
				alternative coverage for an enrollee, then such excess shall be refunded to the
				Federal and State governments in the same proportion as is otherwise applicable
				to recovered funds under this title.
									(B)Exception for
				high-deductible health plansIn the case of coverage under a
				high-deductible health plan, the excess described in subparagraph (A) shall be
				deposited into a health savings account established with respect to such
				plan.
									(4)ExemptionA State is not subject to the requirement
				of paragraph (1) if the State child health plan provides, as of the date of the
				enactment of this subsection, for a cash out or health savings account type
				option for those enrolled under the plan.
								(5)Qualified
				alternative coverage definedIn this section, the term
				qualified alternative coverage means health insurance coverage
				that—
									(A)meets the coverage
				requirements of section 2103 (other than cost-sharing requirements of such
				section); and
									(B)is offered by a
				qualified insurer, and not directly by the State.
									(6)Qualified
				insurer definedIn this section, the term qualified
				insurer means, with respect to a State, an entity that is licensed to
				offer health insurance coverage in the
				State.
								.
					(b)Federal
			 financial participation for qualified alternative coverageSection 2105 of such Act (42 U.S.C. 1397d)
			 is amended—
					(1)in subsection
			 (a)(1)(C), as amended by section 402(b), by inserting before the semicolon at
			 the end the following: and, subject to paragraph (13)(C), in the form of
			 payment of the premiums for coverage for qualified alternative
			 coverage; and
					(2)in subsection (c),
			 as amended by section 401(b) by adding at the end the following new
			 paragraph:

							(13)Purchase of
				qualified alternative coverage
								(A)In
				generalPayment may be made to a State under subsection
				(a)(1)(C), subject to the provisions of this paragraph, for the purchase of
				qualified alternative coverage.
								(B)Waiver of
				certain provisionsWith
				respect to coverage described in subparagraph (A), no limitation on beneficiary
				cost-sharing otherwise applicable under this title or title XIX shall
				apply.
								(C)Limitation on
				FFPThe amount of the payment under paragraph (1)(C) for coverage
				described in subparagraph (A) during a fiscal year in the aggregate for all
				such coverage in the State may not exceed the product of—
									(i)the national per
				capita expenditure under this title (taking into account both Federal and State
				expenditures) for the previous fiscal year (as determined by the Secretary
				using the best available data);
									(ii)the enhanced FMAP
				for the State and fiscal year involved; and
									(iii)the number of
				targeted low-income children for whom such coverage is provided.
									(D)Voluntary
				enrollmentA State child health plan—
									(i)may not require a
				targeted low-income child to enroll in coverage described in subparagraph (A)
				in order to obtain child health assistance under this title;
									(ii)before providing such child health
				assistance for such coverage of a child, shall make available (which may be
				through an Internet Web site or other means) to the parent or guardian of the
				child information on the coverage available under this title, including
				benefits and cost-sharing; and
									(iii)shall provide at
				least one opportunity per fiscal year for beneficiaries to switch coverage
				under this title from coverage described in subparagraph (A) to the coverage
				that is otherwise made available under this title.
									(E)Information on
				coverage optionsA State child health plan shall—
									(i)describe how the State will notify
				potential beneficiaries of coverage described in subparagraph (A);
									(ii)provide such
				notification in writing at least during the initial application for enrollment
				under this title and during redeterminations of eligibility if the individual
				was enrolled before October 1, 2012; and
									(iii)post a
				description of these coverage options on any official Web site that may be
				established by the State in connection with the plan.
									(F)Rule of
				constructionNothing in this
				section is to be construed to prohibit a State from—
									(i)establishing limits on beneficiary
				cost-sharing under such alternative coverage;
									(ii)paying all or part of a beneficiary’s
				cost-sharing requirements under such coverage;
									(iii)paying less than the full cost of a child’s
				share of the premium under such coverage, insofar as the premium for such
				coverage exceeds the limitation established by the State under subparagraph
				(C);
									(iv)using State funds to pay for benefits above
				the Federal upper limit established under subparagraph (C); or
									(v)providing any guidance or information it
				deems appropriate in order to help beneficiaries make an informed decision
				regarding the option to enroll in coverage described in subparagraph
				(A).
									.
					(c)Application
			 under MedicaidThe Secretary of Health and Human Services shall
			 provide for the application of the amendments made by subsections (a) and (b)
			 under the Medicaid program under title XIX of the Social Security Act in the
			 same manner as such amendments apply to SCHIP under title XXI of such
			 Act.
				VMedical Liability
			 Reforms
			501.Short
			 titleThis title may be cited
			 as the Help Efficient, Accessible,
			 Low-cost, Timely Healthcare (HEALTH) Act of 2011.
			502.Findings and
			 purpose
				(a)Findings
					(1)Effect on health
			 care access and costsCongress finds that our current civil
			 justice system is adversely affecting patient access to health care services,
			 better patient care, and cost-efficient health care, in that the health care
			 liability system is a costly and ineffective mechanism for resolving claims of
			 health care liability and compensating injured patients, and is a deterrent to
			 the sharing of information among health care professionals which impedes
			 efforts to improve patient safety and quality of care.
					(2)Effect on
			 interstate commerceCongress finds that the health care and
			 insurance industries are industries affecting interstate commerce and the
			 health care liability litigation systems existing throughout the United States
			 are activities that affect interstate commerce by contributing to the high
			 costs of health care and premiums for health care liability insurance purchased
			 by health care system providers.
					(3)Effect on
			 federal spendingCongress finds that the health care liability
			 litigation systems existing throughout the United States have a significant
			 effect on the amount, distribution, and use of Federal funds because of—
						(A)the large number
			 of individuals who receive health care benefits under programs operated or
			 financed by the Federal Government;
						(B)the large number
			 of individuals who benefit because of the exclusion from Federal taxes of the
			 amounts spent to provide them with health insurance benefits; and
						(C)the large number
			 of health care providers who provide items or services for which the Federal
			 Government makes payments.
						(b)PurposeIt
			 is the purpose of this title to implement reasonable, comprehensive, and
			 effective health care liability reforms designed to
					(1)improve the
			 availability of health care services in cases in which health care liability
			 actions have been shown to be a factor in the decreased availability of
			 services;
					(2)reduce the
			 incidence of defensive medicine and lower the cost of health care
			 liability insurance, all of which contribute to the escalation of health care
			 costs;
					(3)ensure that
			 persons with meritorious health care injury claims receive fair and adequate
			 compensation, including reasonable noneconomic damages;
					(4)improve the
			 fairness and cost-effectiveness of our current health care liability system to
			 resolve disputes over, and provide compensation for, health care liability by
			 reducing uncertainty in the amount of compensation provided to injured
			 individuals; and
					(5)provide an
			 increased sharing of information in the health care system which will reduce
			 unintended injury and improve patient care.
					503.Encouraging
			 speedy resolution of claimsThe time for the commencement of a health
			 care lawsuit shall be 3 years after the date of manifestation of injury or 1
			 year after the claimant discovers, or through the use of reasonable diligence
			 should have discovered, the injury, whichever occurs first. In no event shall
			 the time for commencement of a health care lawsuit exceed 3 years after the
			 date of manifestation of injury unless tolled for any of the following—
				(1)upon proof of
			 fraud;
				(2)intentional
			 concealment; or
				(3)the presence of a
			 foreign body, which has no therapeutic or diagnostic purpose or effect, in the
			 person of the injured person.
				Actions by a
			 minor shall be commenced within 3 years from the date of the alleged
			 manifestation of injury except that actions by a minor under the full age of 6
			 years shall be commenced within 3 years of manifestation of injury or prior to
			 the minor’s 8th birthday, whichever provides a longer period. Such time
			 limitation shall be tolled for minors for any period during which a parent or
			 guardian and a health care provider or health care organization have committed
			 fraud or collusion in the failure to bring an action on behalf of the injured
			 minor.504.Compensating
			 patient injury
				(a)Unlimited amount
			 of damages for actual economic losses in health care lawsuitsIn
			 any health care lawsuit, nothing in this title shall limit a claimant’s
			 recovery of the full amount of the available economic damages, notwithstanding
			 the limitation in subsection (b).
				(b)Additional
			 noneconomic damagesIn any health care lawsuit, the amount of
			 noneconomic damages, if available, may be as much as $250,000, regardless of
			 the number of parties against whom the action is brought or the number of
			 separate claims or actions brought with respect to the same injury.
				(c)No discount of
			 award for noneconomic damagesFor purposes of applying the
			 limitation in subsection (b), future noneconomic damages shall not be
			 discounted to present value. The jury shall not be informed about the maximum
			 award for noneconomic damages. An award for noneconomic damages in excess of
			 $250,000 shall be reduced either before the entry of judgment, or by amendment
			 of the judgment after entry of judgment, and such reduction shall be made
			 before accounting for any other reduction in damages required by law. If
			 separate awards are rendered for past and future noneconomic damages and the
			 combined awards exceed $250,000, the future noneconomic damages shall be
			 reduced first.
				(d)Fair share
			 ruleIn any health care
			 lawsuit, each party shall be liable for that party’s several share of any
			 damages only and not for the share of any other person. Each party shall be
			 liable only for the amount of damages allocated to such party in direct
			 proportion to such party’s percentage of responsibility. Whenever a judgment of
			 liability is rendered as to any party, a separate judgment shall be rendered
			 against each such party for the amount allocated to such party. For purposes of
			 this section, the trier of fact shall determine the proportion of
			 responsibility of each party for the claimant's harm.
				505.Maximizing
			 patient recovery
				(a)Court
			 supervision of share of damages actually paid to claimantsIn any
			 health care lawsuit, the court shall supervise the arrangements for payment of
			 damages to protect against conflicts of interest that may have the effect of
			 reducing the amount of damages awarded that are actually paid to claimants. In
			 particular, in any health care lawsuit in which the attorney for a party claims
			 a financial stake in the outcome by virtue of a contingent fee, the court shall
			 have the power to restrict the payment of a claimant's damage recovery to such
			 attorney, and to redirect such damages to the claimant based upon the interests
			 of justice and principles of equity. In no event shall the total of all
			 contingent fees for representing all claimants in a health care lawsuit exceed
			 the following limits:
					(1)Forty percent of
			 the first $50,000 recovered by the claimant(s).
					(2)Thirty-three and
			 one-third percent of the next $50,000 recovered by the claimant(s).
					(3)Twenty-five
			 percent of the next $500,000 recovered by the claimant(s).
					(4)Fifteen percent of
			 any amount by which the recovery by the claimant(s) is in excess of
			 $600,000.
					(b)ApplicabilityThe
			 limitations in this section shall apply whether the recovery is by judgment,
			 settlement, mediation, arbitration, or any other form of alternative dispute
			 resolution. In a health care lawsuit involving a minor or incompetent person, a
			 court retains the authority to authorize or approve a fee that is less than the
			 maximum permitted under this section. The requirement for court supervision in
			 the first two sentences of subsection (a) applies only in civil actions.
				506.Additional
			 health benefitsIn any health
			 care lawsuit involving injury or wrongful death, any party may introduce
			 evidence of collateral source benefits. If a party elects to introduce such
			 evidence, any opposing party may introduce evidence of any amount paid or
			 contributed or reasonably likely to be paid or contributed in the future by or
			 on behalf of the opposing party to secure the right to such collateral source
			 benefits. No provider of collateral source benefits shall recover any amount
			 against the claimant or receive any lien or credit against the claimant's
			 recovery or be equitably or legally subrogated to the right of the claimant in
			 a health care lawsuit involving injury or wrongful death. This section shall
			 apply to any health care lawsuit that is settled as well as a health care
			 lawsuit that is resolved by a fact finder. This section shall not apply to
			 section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C.
			 1396a(a)(25)) of the Social Security Act.
			507.Punitive
			 damages
				(a)In
			 generalPunitive damages may, if otherwise permitted by
			 applicable State or Federal law, be awarded against any person in a health care
			 lawsuit only if it is proven by clear and convincing evidence that such person
			 acted with malicious intent to injure the claimant, or that such person
			 deliberately failed to avoid unnecessary injury that such person knew the
			 claimant was substantially certain to suffer. In any health care lawsuit where
			 no judgment for compensatory damages is rendered against such person, no
			 punitive damages may be awarded with respect to the claim in such lawsuit. No
			 demand for punitive damages shall be included in a health care lawsuit as
			 initially filed. A court may allow a claimant to file an amended pleading for
			 punitive damages only upon a motion by the claimant and after a finding by the
			 court, upon review of supporting and opposing affidavits or after a hearing,
			 after weighing the evidence, that the claimant has established by a substantial
			 probability that the claimant will prevail on the claim for punitive damages.
			 At the request of any party in a health care lawsuit, the trier of fact shall
			 consider in a separate proceeding—
					(1)whether punitive
			 damages are to be awarded and the amount of such award; and
					(2)the amount of
			 punitive damages following a determination of punitive liability.
					If a
			 separate proceeding is requested, evidence relevant only to the claim for
			 punitive damages, as determined by applicable State law, shall be inadmissible
			 in any proceeding to determine whether compensatory damages are to be
			 awarded.(b)Determining
			 Amount of Punitive Damages
					(1)Factors
			 consideredIn determining the amount of punitive damages, if
			 awarded, in a health care lawsuit, the trier of fact shall consider only the
			 following—
						(A)the severity of
			 the harm caused by the conduct of such party;
						(B)the duration of
			 the conduct or any concealment of it by such party;
						(C)the profitability
			 of the conduct to such party;
						(D)the number of
			 products sold or medical procedures rendered for compensation, as the case may
			 be, by such party, of the kind causing the harm complained of by the
			 claimant;
						(E)any criminal
			 penalties imposed on such party, as a result of the conduct complained of by
			 the claimant; and
						(F)the amount of any
			 civil fines assessed against such party as a result of the conduct complained
			 of by the claimant.
						(2)Maximum
			 awardThe amount of punitive damages, if awarded, in a health
			 care lawsuit may be as much as $250,000 or as much as two times the amount of
			 economic damages awarded, whichever is greater. The jury shall not be informed
			 of this limitation.
					(c)No Punitive
			 Damages for Products That Comply With FDA Standards
					(1)In
			 general
						(A)No punitive
			 damages may be awarded against the manufacturer or distributor of a medical
			 product, or a supplier of any component or raw material of such medical
			 product, based on a claim that such product caused the claimant's harm
			 where—
							(i)(I)such medical product was
			 subject to premarket approval, clearance, or licensure by the Food and Drug
			 Administration with respect to the safety of the formulation or performance of
			 the aspect of such medical product which caused the claimant's harm or the
			 adequacy of the packaging or labeling of such medical product; and
								(II)such
			 medical product was so approved, cleared, or licensed; or
								(ii)such medical
			 product is generally recognized among qualified experts as safe and effective
			 pursuant to conditions established by the Food and Drug Administration and
			 applicable Food and Drug Administration regulations, including without
			 limitation those related to packaging and labeling, unless the Food and Drug
			 Administration has determined that such medical product was not manufactured or
			 distributed in substantial compliance with applicable Food and Drug
			 Administration statutes and regulations.
							(B)Rule of
			 constructionSubparagraph (A) may not be construed as
			 establishing the obligation of the Food and Drug Administration to demonstrate
			 affirmatively that a manufacturer, distributor, or supplier referred to in such
			 subparagraph meets any of the conditions described in such subparagraph.
						(2)Liability of
			 health care providersA health care provider who prescribes, or
			 who dispenses pursuant to a prescription, a medical product approved, licensed,
			 or cleared by the Food and Drug Administration shall not be named as a party to
			 a product liability lawsuit involving such product and shall not be liable to a
			 claimant in a class action lawsuit against the manufacturer, distributor, or
			 seller of such product. Nothing in this paragraph prevents a court from
			 consolidating cases involving health care providers and cases involving
			 products liability claims against the manufacturer, distributor, or product
			 seller of such medical product.
					(3)PackagingIn
			 a health care lawsuit for harm which is alleged to relate to the adequacy of
			 the packaging or labeling of a drug which is required to have tamper-resistant
			 packaging under regulations of the Secretary of Health and Human Services
			 (including labeling regulations related to such packaging), the manufacturer or
			 product seller of the drug shall not be held liable for punitive damages unless
			 such packaging or labeling is found by the trier of fact by clear and
			 convincing evidence to be substantially out of compliance with such
			 regulations.
					(4)ExceptionParagraph
			 (1) shall not apply in any health care lawsuit in which—
						(A)a person, before
			 or after premarket approval, clearance, or licensure of such medical product,
			 knowingly misrepresented to or withheld from the Food and Drug Administration
			 information that is required to be submitted under the Federal Food, Drug, and
			 Cosmetic Act (21 U.S.C. 301 et seq.) or section 351 of the Public Health
			 Service Act (42 U.S.C. 262) that is material and is causally related to the
			 harm which the claimant allegedly suffered;
						(B)a person made an
			 illegal payment to an official of the Food and Drug Administration for the
			 purpose of either securing or maintaining approval, clearance, or licensure of
			 such medical product; or
						(C)the defendant
			 caused the medical product which caused the claimant's harm to be misbranded or
			 adulterated (as such terms are used in chapter V of the Federal Food, Drug, and
			 Cosmetic Act (21 U.S.C. 351 et seq.)).
						508.Limitation on
			 recovery in a health care lawsuit based on compliance with best practice
			 guidelines
				(a)Selection and
			 issuance of best practices guidelines
					(1)In
			 generalThe Secretary of
			 Health and Human Services (in this section referred to as the
			 Secretary) shall provide for the selection and issuance of best
			 practice guidelines for treatment of medical conditions (each in this
			 subsection referred to as a guideline) in accordance with
			 paragraphs (2) and (3).
					(2)Development
			 processNot later than 90
			 days after the date of enactment of this title, the Secretary shall enter into
			 a contract with a qualified physician consensus-building organization (such as
			 the Physician Consortium for Performance Improvement), in concert and agreement
			 with physician specialty organizations, to develop guidelines. The contract
			 shall require that the organization submit guidelines to the agency not later
			 than 18 months after the date of enactment of this title.
					(3)Issuance
						(A)In
			 generalNot later than 2 years after the date of the enactment of
			 this title, the Secretary shall, after notice and opportunity for public
			 comment, make a rule that provides for the establishment of the guidelines
			 submitted under paragraph (2).
						(B)LimitationThe Secretary may not make a rule that
			 includes guidelines other than those submitted under paragraph (2).
						(C)DisseminationThe Secretary shall post such guidelines on
			 the public Internet web page of the Department of Health and Human
			 Services.
						(4)MaintenanceNot
			 later than 4 years after the date of enactment of this title, and every 2 years
			 thereafter, the Secretary shall review the guidelines and shall, as necessary,
			 enter into contracts similar to the contract described in paragraph (2), and
			 issue guidelines in a manner similar to the issuance of guidelines under
			 paragraph (3).
					(b)Limitation on
			 damages
					(1)Limitation on
			 noneconomic damagesIn any
			 health care lawsuit, a court may not award noneconomic damages with respect to
			 treatment that is consistent with a guideline issued under subsection
			 (a).
					(2)Limitation on
			 punitive damagesIn any health care lawsuit, no punitive damages
			 may be awarded against a health care provider based on a claim that such
			 treatment caused the claimant harm if—
						(A)such treatment was
			 subject to quality review by a qualified physician consensus-building
			 organization and has been found to be safe, effective, and appropriate;
						(B)such treatment was approved in a guideline
			 that underwent full review by such organization, public comment, approval by
			 the Secretary, and dissemination as described in subparagraph (a); or
						(C)such medical
			 treatment is generally recognized among qualified experts (including medical
			 providers and relevant physician specialty organizations) as safe, effective,
			 and appropriate.
						(c)Use
					(1)Introduction as
			 evidenceGuidelines
			 established in a rule made under subsection (a) may not be introduced as
			 evidence of negligence or deviation in the standard of care in any health care
			 lawsuit unless they have previously been introduced by the defendant.
					(2)No presumption
			 of negligenceThere shall be no presumption of negligence if a
			 health care provider provides treatment in a manner inconsistent with such
			 guidelines.
					(d)ConstructionNothing in this section shall be construed
			 as preventing a State from—
					(1)replacing their
			 current medical malpractice rules with rules that rely, as a defense, upon a
			 health care provider’s compliance with a guideline issued under subsection (a);
			 or
					(2)applying additional guidelines or
			 safe-harbors that are in addition to, but not in lieu of, the guidelines issued
			 under subsection (a).
					509.State grants to
			 create administrative health care tribunalsPart P of title III of the Public Health
			 Service Act (42 U.S.C. 280g et seq.) is amended by adding at the end the
			 following:

					399T.State grants
				to create administrative health care tribunals
						(a)In
				generalThe Secretary may award grants to States for the
				development, implementation, and evaluation of administrative health care
				tribunals that comply with this section, for the resolution of disputes
				concerning injuries allegedly caused by health care providers.
						(b)Conditions for
				demonstration grantsTo be eligible to receive a grant under this
				section, a State shall submit to the Secretary an application at such time, in
				such manner, and containing such information as may be required by the
				Secretary. A grant shall be awarded under this section on such terms and
				conditions as the Secretary determines appropriate.
						(c)Representation
				by counselA State that receives a grant under this section may
				not preclude any party to a dispute before an administrative health care
				tribunal operated under such grant from obtaining legal representation during
				any review by the expert panel under subsection (d), the administrative health
				care tribunal under subsection (e), or a State court under subsection
				(f).
						(d)Expert panel
				review and early offer guidelines
							(1)In
				generalPrior to the submission of any dispute concerning
				injuries allegedly caused by health care providers to an administrative health
				care tribunal under this section, such allegations shall first be reviewed by
				an expert panel.
							(2)Composition
								(A)In
				generalThe members of each
				expert panel under this subsection shall be appointed by the head of the State
				agency responsible for health. Each expert panel shall be composed of no fewer
				than 3 members and not more than 7 members. At least one-half of such members
				shall be medical experts (either physicians or health care
				professionals).
								(B)Licensure and
				expertiseEach physician or health care professional appointed to
				an expert panel under subparagraph (A) shall—
									(i)be
				appropriately credentialed or licensed in one or more States to deliver health
				care services; and
									(ii)typically treat
				the condition, make the diagnosis, or provide the type of treatment that is
				under review.
									(C)Independence
									(i)In
				generalSubject to clause (ii), each individual appointed to an
				expert panel under this paragraph shall—
										(I)not have a
				material familial, financial, or professional relationship with a party
				involved in the dispute reviewed by the panel; and
										(II)not otherwise
				have a conflict of interest with such a party.
										(ii)ExceptionNothing
				in clause (i) shall be construed to prohibit an individual who has staff
				privileges at an institution where the treatment involved in the dispute was
				provided from serving as a member of an expert panel merely on the basis of
				such affiliation, if the affiliation is disclosed to the parties and neither
				party objects.
									(D)Practicing
				health care professional in same field
									(i)In
				generalIn a dispute before an expert panel that involves
				treatment, or the provision of items or services—
										(I)by a physician,
				the medical experts on the expert panel shall be practicing physicians
				(allopathic or osteopathic) of the same or similar specialty as a physician who
				typically treats the condition, makes the diagnosis, or provides the type of
				treatment under review; or
										(II)by a health care
				professional other than a physician, at least two medical experts on the expert
				panel shall be practicing physicians (allopathic or osteopathic) of the same or
				similar specialty as the health care professional who typically treats the
				condition, makes the diagnosis, or provides the type of treatment under review,
				and, if determined appropriate by the State agency, an additional medical
				expert shall be a practicing health care professional (other than such a
				physician) of such a same or similar specialty.
										(ii)Practicing
				definedIn this paragraph, the term practicing
				means, with respect to an individual who is a physician or other health care
				professional, that the individual provides health care services to individual
				patients on average at least 2 days a week.
									(E)Pediatric
				expertiseIn the case of dispute relating to a child, at least 1
				medical expert on the expert panel shall have expertise described in
				subparagraph (D)(i) in pediatrics.
								(3)DeterminationAfter
				a review under paragraph (1), an expert panel shall make a determination as to
				the liability of the parties involved and compensation.
							(4)AcceptanceIf
				the parties to a dispute before an expert panel under this subsection accept
				the determination of the expert panel concerning liability and compensation,
				such compensation shall be paid to the claimant and the claimant shall agree to
				forgo any further action against the health care providers involved.
							(5)Failure to
				acceptIf any party decides not to accept the expert panel’s
				determination, the matter shall be referred to an administrative health care
				tribunal created pursuant to this section.
							(e)Administrative
				health care tribunals
							(1)In
				generalUpon the failure of any party to accept the determination
				of an expert panel under subsection (d), the parties shall have the right to
				request a hearing concerning the liability or compensation involved by an
				administrative health care tribunal established by the State involved.
							(2)RequirementsIn
				establishing an administrative health care tribunal under this section, a State
				shall—
								(A)ensure that such
				tribunals are presided over by special judges with health care
				expertise;
								(B)provide authority
				to such judges to make binding rulings, rendered in written decisions, on
				standards of care, causation, compensation, and related issues with reliance on
				independent expert witnesses commissioned by the tribunal;
								(C)establish gross
				negligence as the legal standard for the tribunal;
								(D)allow the
				admission into evidence of the recommendation made by the expert panel under
				subsection (d); and
								(E)provide for an
				appeals process to allow for review of decisions by State courts.
								(f)Review by State
				court after exhaustion of administrative remedies
							(1)Right to
				fileIf any party to a dispute before a health care tribunal
				under subsection (e) is not satisfied with the determinations of the tribunal,
				the party shall have the right to file their claim in a State court of
				competent jurisdiction.
							(2)Forfeit of
				awardsAny party filing an action in a State court in accordance
				with paragraph (1) shall forfeit any compensation award made under subsection
				(e).
							(3)AdmissibilityThe
				determinations of the expert panel and the administrative health care tribunal
				pursuant to subsections (d) and (e) with respect to a State court proceeding
				under paragraph (1) shall be admissible into evidence in any such State court
				proceeding.
							(g)DefinitionIn this section, the term health care
				provider means any person or entity required by State or Federal laws or
				regulations to be licensed, registered, or certified to provide health care
				services, and being either so licensed, registered, or certified, or exempted
				from such requirement by other statute or regulation.
						(h)Authorization of
				appropriationsThere are authorized to be appropriated for any
				fiscal year such sums as may be necessary for purposes of making grants to
				States under this
				section.
						.
			510.Authorization
			 of payment of future damages to claimants in health care lawsuits
				(a)In
			 generalIn any health care lawsuit, if an award of future
			 damages, without reduction to present value, equaling or exceeding $50,000 is
			 made against a party with sufficient insurance or other assets to fund a
			 periodic payment of such a judgment, the court shall, at the request of any
			 party, enter a judgment ordering that the future damages be paid by periodic
			 payments, in accordance with the Uniform Periodic Payment of
			 Judgments Act promulgated by the National Conference of
			 Commissioners on Uniform State Laws.
				(b)ApplicabilityThis
			 section applies to all actions which have not been first set for trial or
			 retrial before the effective date of this title.
				511.DefinitionsIn this title:
				(1)Alternative
			 dispute resolution system; ADRThe term alternative dispute
			 resolution system or ADR means a system that provides for
			 the resolution of health care lawsuits in a manner other than through a civil
			 action brought in a State or Federal court.
				(2)ClaimantThe
			 term claimant means any person who brings a health care lawsuit,
			 including a person who asserts or claims a right to legal or equitable
			 contribution, indemnity, or subrogation, arising out of a health care liability
			 claim or action, and any person on whose behalf such a claim is asserted or
			 such an action is brought, whether deceased, incompetent, or a minor.
				(3)Collateral
			 source benefitsThe term collateral source benefits
			 means any amount paid or reasonably likely to be paid in the future to or on
			 behalf of the claimant, or any service, product, or other benefit provided or
			 reasonably likely to be provided in the future to or on behalf of the claimant,
			 as a result of the injury or wrongful death, pursuant to—
					(A)any State or
			 Federal health, sickness, income-disability, accident, or workers’ compensation
			 law;
					(B)any health,
			 sickness, income-disability, or accident insurance that provides health
			 benefits or income-disability coverage;
					(C)any contract or
			 agreement of any group, organization, partnership, or corporation to provide,
			 pay for, or reimburse the cost of medical, hospital, dental, or
			 income-disability benefits; and
					(D)any other publicly
			 or privately funded program.
					(4)Compensatory
			 damagesThe term compensatory damages means
			 objectively verifiable monetary losses incurred as a result of the provision
			 of, use of, or payment for (or failure to provide, use, or pay for) health care
			 services or medical products, such as past and future medical expenses, loss of
			 past and future earnings, cost of obtaining domestic services, loss of
			 employment, and loss of business or employment opportunities, damages for
			 physical and emotional pain, suffering, inconvenience, physical impairment,
			 mental anguish, disfigurement, loss of enjoyment of life, loss of society and
			 companionship, loss of consortium (other than loss of domestic service),
			 hedonic damages, injury to reputation, and all other nonpecuniary losses of any
			 kind or nature. The term compensatory damages includes economic
			 damages and noneconomic damages, as such terms are defined in this
			 section.
				(5)Contingent
			 feeThe term contingent fee includes all
			 compensation to any person or persons which is payable only if a recovery is
			 effected on behalf of one or more claimants.
				(6)Economic
			 damagesThe term economic damages means objectively
			 verifiable monetary losses incurred as a result of the provision of, use of, or
			 payment for (or failure to provide, use, or pay for) health care services or
			 medical products, such as past and future medical expenses, loss of past and
			 future earnings, cost of obtaining domestic services, loss of employment, and
			 loss of business or employment opportunities.
				(7)Federal tax
			 benefitA claimant shall be
			 treated as receiving a Federal tax benefit with respect to payment for items or
			 services if—
					(A)such payment is
			 compensation by insurance—
						(i)which constitutes
			 medical care, and
						(ii)with respect to
			 the payment of premiums for which the claimant, or the employer of the
			 claimant, was allowed an exclusion from gross income, a deduction, or a credit
			 for Federal income tax purposes,
						(B)a deduction was
			 allowed with respect to such payment for Federal income tax purposes, or
					(C)such payment was from an Archer MSA (as
			 defined in section 220(d) of the Internal Revenue Code of 1986), a health
			 savings account (as defined in section 223(d) of such Code), a flexible
			 spending arrangement (as defined in section 106(c)(2) of such Code), or a
			 health reimbursement arrangement which is treated as employer-provided coverage
			 under an accident or health plan for purposes of section 106 of such
			 Code.
					(8)health care
			 lawsuitThe term health
			 care lawsuit means any health care liability claim concerning the
			 provision of health care goods or services brought in a Federal court or in a
			 State court or pursuant to an alternative dispute resolution system, if such
			 claim concerns items or services with respect to which payment is made under
			 title XVIII, title XIX, or title XXI of the Social Security Act or for which
			 the claimant receives a Federal tax benefit, against a health care provider, a
			 health care organization, or the manufacturer, distributor, supplier, marketer,
			 promoter, or seller of a medical product, regardless of the theory of liability
			 on which the claim is based, or the number of claimants, plaintiffs,
			 defendants, or other parties, or the number of claims or causes of action, in
			 which the claimant alleges a health care liability claim. Such term does not
			 include a claim or action which is based on criminal liability; which seeks
			 civil fines or penalties paid to Federal government; or which is grounded in
			 antitrust.
				(9)Health care
			 liability actionThe term health care liability
			 action means a civil action brought in a State or Federal court or
			 pursuant to an alternative dispute resolution system, against a health care
			 provider, a health care organization, or the manufacturer, distributor,
			 supplier, marketer, promoter, or seller of a medical product, regardless of the
			 theory of liability on which the claim is based, or the number of plaintiffs,
			 defendants, or other parties, or the number of causes of action, in which the
			 claimant alleges a health care liability claim.
				(10)Health care
			 liability claimThe term health care liability claim
			 means a demand by any person, whether or not pursuant to ADR, against a health
			 care provider, health care organization, or the manufacturer, distributor,
			 supplier, marketer, promoter, or seller of a medical product, including, but
			 not limited to, third-party claims, cross-claims, counter-claims, or
			 contribution claims, which are based upon the provision of, use of, or payment
			 for (or the failure to provide, use, or pay for) health care services or
			 medical products, regardless of the theory of liability on which the claim is
			 based, or the number of plaintiffs, defendants, or other parties, or the number
			 of causes of action.
				(11)Health care
			 organizationThe term health care organization means
			 any person or entity which is obligated to provide or pay for health benefits
			 under any health plan, including any person or entity acting under a contract
			 or arrangement with a health care organization to provide or administer any
			 health benefit.
				(12)Health care
			 providerThe term health care provider means any
			 person or entity required by State or Federal laws or regulations to be
			 licensed, registered, or certified to provide health care services, and being
			 either so licensed, registered, or certified, or exempted from such requirement
			 by other statute or regulation.
				(13)Health care
			 goods or servicesThe term health care goods or
			 services means any goods or services provided by a health care
			 organization, provider, or by any individual working under the supervision of a
			 health care provider, that relates to the diagnosis, prevention, or treatment
			 of any human disease or impairment, or the assessment or care of the health of
			 human beings.
				(14)Malicious
			 intent to injureThe term malicious intent to injure
			 means intentionally causing or attempting to cause physical injury other than
			 providing health care goods or services.
				(15)Medical
			 productThe term medical product means a drug,
			 device, or biological product intended for humans, and the terms
			 drug, device, and biological product
			 have the meanings given such terms in sections 201(g)(1) and 201(h) of the
			 Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) and (h)) and section
			 351(a) of the Public Health Service Act (42 U.S.C. 262(a)), respectively,
			 including any component or raw material used therein, but excluding health care
			 services.
				(16)medical
			 treatmentThe term
			 medical treatment means the provision of any goods or services by
			 a health care provider or by any individual working under the supervision of a
			 health care provider, that relates to the diagnosis, prevention, or treatment
			 of any human disease or impairment, or the assessment or care of the health of
			 human beings.
				(17)noneconomic
			 damagesThe term
			 noneconomic damages means damages for losses for physical and
			 emotional pain, suffering, inconvenience, physical impairment, mental anguish,
			 disfigurement, loss of enjoyment of life, loss of society and companionship,
			 loss of consortium, hedonic damages, injury to reputation, and any other
			 nonpecuniary losses.
				(18)Punitive
			 damagesThe term punitive damages means damages
			 awarded, for the purpose of punishment or deterrence, and not solely for
			 compensatory purposes, against a health care provider, health care
			 organization, or a manufacturer, distributor, or supplier of a medical product.
			 Punitive damages are neither economic nor noneconomic damages.
				(19)RecoveryThe
			 term recovery means the net sum recovered after deducting any
			 disbursements or costs incurred in connection with prosecution or settlement of
			 the claim, including all costs paid or advanced by any person. Costs of health
			 care incurred by the plaintiff and the attorneys’ office overhead costs or
			 charges for legal services are not deductible disbursements or costs for such
			 purpose.
				(20)StateThe
			 term State means each of the several States, the District of
			 Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
			 Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific
			 Islands, and any other territory or possession of the United States, or any
			 political subdivision thereof.
				512.Effect on other
			 laws
				(a)Vaccine
			 Injury
					(1)To the extent that
			 title XXI of the Public Health Service Act establishes a Federal rule of law
			 applicable to a civil action brought for a vaccine-related injury or
			 death—
						(A)this title does
			 not affect the application of the rule of law to such an action; and
						(B)any rule of law
			 prescribed by this title in conflict with a rule of law of such title XXI shall
			 not apply to such action.
						(2)If there is an
			 aspect of a civil action brought for a vaccine-related injury or death to which
			 a Federal rule of law under title XXI of the Public Health Service Act does not
			 apply, then this title or otherwise applicable law (as determined under this
			 title) will apply to such aspect of such action.
					(b)Other federal
			 lawExcept as provided in this section, nothing in this title
			 shall be deemed to affect any defense available to a defendant in a health care
			 lawsuit or action under any other provision of Federal law.
				513.State
			 flexibility and protection of States’ rights
				(a)Health care
			 lawsuitsThe provisions governing health care lawsuits set forth
			 in this title preempt, subject to subsections (b) and (c), State law to the
			 extent that State law prevents the application of any provisions of law
			 established by or under this title. The provisions governing health care
			 lawsuits set forth in this title supersede chapter 171 of title 28, United
			 States Code, to the extent that such chapter—
					(1)provides for a
			 greater amount of damages or contingent fees, a longer period in which a health
			 care lawsuit may be commenced, or a reduced applicability or scope of periodic
			 payment of future damages, than provided in this title; or
					(2)prohibits the
			 introduction of evidence regarding collateral source benefits, or mandates or
			 permits subrogation or a lien on collateral source benefits.
					(b)Protection of
			 states’ rights and other laws(1)Any issue that is not
			 governed by any provision of law established by or under this title (including
			 State standards of negligence) shall be governed by otherwise applicable State
			 or Federal law.
					(2)This title shall not preempt or
			 supersede any State or Federal law that imposes greater procedural or
			 substantive protections for health care providers and health care organizations
			 from liability, loss, or damages than those provided by this title or create a
			 cause of action.
					(c)State
			 flexibilityNo provision of this title shall be construed to
			 preempt—
					(1)any State law
			 (whether effective before, on, or after the date of the enactment of this
			 title) that specifies a particular monetary amount of compensatory or punitive
			 damages (or the total amount of damages) that may be awarded in a health care
			 lawsuit, regardless of whether such monetary amount is greater or lesser than
			 is provided for under this title, notwithstanding section 4(a); or
					(2)any defense
			 available to a party in a health care lawsuit under any other provision of
			 State or Federal law.
					514.Applicability;
			 effective dateThis title
			 shall apply to any health care lawsuit brought in a Federal or State court, or
			 subject to an alternative dispute resolution system, that is initiated on or
			 after the date of the enactment of this title, except that any health care
			 lawsuit arising from an injury occurring prior to the date of the enactment of
			 this title shall be governed by the applicable statute of limitations
			 provisions in effect at the time the injury occurred.
			VIWellness and
			 Prevention
			601.Providing
			 financial incentives for treatment compliance
				(a)Limitation on
			 exception for wellness programs under HIPAA discrimination rules
					(1)ERISA
			 amendmentSection 702(b)(2) of the Employee Retirement Income
			 Security Act of 1974 (29 U.S.C. 1182(b)(2)) is amended by adding after and
			 below subparagraph (B) the following:

							In
				applying subparagraph (B), a group health plan (or a health insurance issuer
				with respect to health insurance coverage) may vary premiums and cost-sharing
				by up to 50 percent of the value of the benefits under the plan (or coverage)
				based on participation (or lack of participation) in a standards-based wellness
				program..
					(2)PHSA
			 amendmentSection 2702(b)(2) of the Public Health Service Act (42
			 U.S.C. 300gg–1(b)(2)) is amended by adding after and below subparagraph (B) the
			 following:

							In
				applying subparagraph (B), a group health plan (or a health insurance issuer
				with respect to health insurance coverage) may vary premiums and cost-sharing
				by up to 50 percent of the value of the benefits under the plan (or coverage)
				based on participation (or lack of participation) in a standards-based wellness
				program..
					(3)IRC
			 amendmentSection 9802(b)(2) of the Internal Revenue Code of 1986
			 is amended by adding after and below subparagraph (B) the following:

							In
				applying subparagraph (B), a group health plan may vary premiums and
				cost-sharing by up to 50 percent of the value of the benefits under the plan
				based on participation (or lack of participation) in a standards-based wellness
				program..
					(b)Effective
			 dateThe amendments made by subsection (a) shall apply to plan
			 years beginning more than 1 year after the date of the enactment of this
			 Act.
				VIITransparency and
			 Insurance Reform Measures
			701.Receipt and
			 response to requests for claim information
				(a)In
			 generalTitle XXVII of the
			 Public Health Service Act is amended by inserting after section 2713 the
			 following new section:

						2714.Receipt and
				response to requests for claim information
							(a)Requirement
								(1)In
				generalIn the case of health insurance coverage offered in
				connection with a group health plan, not later than the 30th day after the date
				a health insurance issuer receives a written request for a written report of
				claim information from the plan, plan sponsor, or plan administrator, the
				health insurance issuer shall provide the requesting party the report, subject
				to the succeeding provisions of this section.
								(2)ExceptionThe
				health insurance issuer is not obligated to provide a report under this
				subsection regarding a particular employer or group health plan more than twice
				in any 12-month period and is not obligated to provide such a report in the
				case of an employer with fewer than 50 employees.
								(3)DeadlineA
				plan, plan sponsor, or plan administrator must request a report under this
				subsection before or on the second anniversary of the date of termination of
				coverage under a group health plan issued by the health insurance
				issuer.
								(b)Form of report;
				information To be included
								(1)In
				generalA health insurance issuer shall provide the report of
				claim information under subsection (a)—
									(A)in a written
				report;
									(B)through an
				electronic file transmitted by secure electronic mail or a file transfer
				protocol site; or
									(C)by making the
				required information available through a secure Web site or Web portal
				accessible by the requesting plan, plan sponsor, or plan administrator.
									(2)Information to
				be includedA report of claim information provided under
				subsection (a) shall contain all information available to the health insurance
				issuer that is responsive to the request made under such subsection, including,
				subject to subsection (c), protected health information, for the 36-month
				period preceding the date of the report or the period specified by
				subparagraphs (D), (E), and (F) of paragraph (3), if applicable, or for the
				entire period of coverage, whichever period is shorter.
								(3)Required
				informationSubject to subsection (c), a report provided under
				subsection (a) shall include the following:
									(A)Aggregate paid
				claims experience by month, including claims experience for medical, dental,
				and pharmacy benefits, as applicable.
									(B)Total premium paid
				by month.
									(C)Total number of
				covered employees on a monthly basis by coverage tier, including whether
				coverage was for—
										(i)an
				employee only;
										(ii)an employee with
				dependents only;
										(iii)an employee with
				a spouse only; or
										(iv)an employee with
				a spouse and dependents.
										(D)The total dollar
				amount of claims pending as of the date of the report.
									(E)A separate
				description and individual claims report for any individual whose total paid
				claims exceed $15,000 during the 12-month period preceding the date of the
				report, including the following information related to the claims for that
				individual—
										(i)a
				unique identifying number, characteristic, or code for the individual;
										(ii)the amounts
				paid;
										(iii)dates of
				service; and
										(iv)applicable
				procedure codes and diagnosis codes.
										(F)For claims that
				are not part of the information described in a previous subparagraph, a
				statement describing precertification requests for hospital stays of 5 days or
				longer that were made during the 30-day period preceding the date of the
				report.
									(c)Limitations on
				disclosure
								(1)In
				generalA health insurance issuer may not disclose protected
				health information in a report of claim information provided under this section
				if the health insurance issuer is prohibited from disclosing that information
				under another State or Federal law that imposes more stringent privacy
				restrictions than those imposed under Federal law under the HIPAA privacy
				regulations. To withhold information in accordance with this subsection, the
				health insurance issuer must—
									(A)notify the plan,
				plan sponsor, or plan administrator requesting the report that information is
				being withheld; and
									(B)provide to the
				plan, plan sponsor, or plan administrator a list of categories of claim
				information that the health insurance issuer has determined are subject to the
				more stringent privacy restrictions under another State or Federal law.
									(2)ProtectionA
				plan sponsor is entitled to receive protected health information under
				subparagraph (E) and (F) of subsection (b)(3) and subsection (d) only after an
				appropriately authorized representative of the plan sponsor makes to the health
				insurance issuer a certification substantially similar to the following
				certification: I hereby certify that the plan documents comply with the
				requirements of section 164.504(f)(2) of title 45, Code of Federal Regulations,
				and that the plan sponsor will safeguard and limit the use and disclosure of
				protected health information that the plan sponsor may receive from the group
				health plan to perform the plan administration functions..
								(3)ResultsA
				plan sponsor that does not provide the certification required by paragraph (2)
				is not entitled to receive the protected health information described by
				subparagraphs (E) and (F) of subsection (b)(3) and subsection (d), but is
				entitled to receive a report of claim information that includes the information
				described by subparagraphs (A) through (D) of subsection (b)(3).
								(4)InformationIn
				the case of a request made under subsection (a) after the date of termination
				of coverage, the report must contain all information available to the health
				insurance issuer as of the date of the report that is responsive to the
				request, including protected health information, and including the information
				described by subsection (b)(3), for the period described by subsection (b)(2)
				preceding the date of termination of coverage or for the entire policy period,
				whichever period is shorter. Notwithstanding this subsection, the report may
				not include the protected health information described by subparagraphs (E) and
				(F) of subsection (b)(3) unless a certification has been provided in accordance
				with paragraph (2).
								(d)Request for
				additional information
								(1)ReviewOn
				receipt of the report required by subsection (a), the plan, plan sponsor, or
				plan administrator may review the report and, not later than the 10th day after
				the date the report is received, may make a written request to the health
				insurance issuer for additional information in accordance with this subsection
				for specified individuals.
								(2)RequestWith
				respect to a request for additional information concerning specified
				individuals for whom claims information has been provided under subsection
				(b)(3)(E), the health insurance issuer shall provide additional information on
				the prognosis or recovery if available and, for individuals in active case
				management, the most recent case management information, including any future
				expected costs and treatment plan, that relate to the claims for that
				individual.
								(3)ResponseThe
				health insurance issuer must respond to the request for additional information
				under this subsection not later than the 15th day after the date of such
				request unless the requesting plan, plan sponsor, or plan administrator agrees
				to a request for additional time.
								(4)LimitationThe
				health insurance issuer is not required to produce the report described by this
				subsection unless a certification has been provided in accordance with
				subsection (c)(2).
								(5)Compliance with
				section does not create liabilityA health insurance issuer that
				releases information, including protected health information, in accordance
				with this subsection has not violated a standard of care and is not liable for
				civil damages resulting from, and is not subject to criminal prosecution for,
				releasing that information.
								(e)Limitation on
				preemptionNothing in this
				section is meant to limit States from enacting additional laws in addition to
				the provisions of this section, but not in lieu of such provisions.
							(f)DefinitionsIn
				this section:
								(1)The terms
				employer, plan administrator, and plan
				sponsor have the meanings given such terms in section 3 of the Employee
				Retirement Income Security Act of 1974.
								(2)The term
				HIPAA privacy regulations has the meaning given such term in
				section 1180(b)(3) of the Social Security Act.
								(3)The term
				protected health information has the meaning given such term under
				the HIPAA privacy
				regulations.
								.
				(b)Effective
			 dateThe amendment made by subsection (a) shall take effect on
			 the date of the enactment of this Act.
				VIIIQuality
			801.Prohibition on
			 certain uses of data obtained from comparative effectiveness research;
			 accounting for personalized medicine and differences in patient treatment
			 response
				(a)In
			 generalNotwithstanding any
			 other provision of law, the Secretary of Health and Human Services—
					(1)shall not use data obtained from the
			 conduct of comparative effectiveness research, including such research that is
			 conducted or supported using funds appropriated under the American Recovery and
			 Reinvestment Act of 2009 (Public Law 111–5), to deny coverage of
			 an item or service under a Federal health care program (as defined in section
			 1128B(f) of the Social Security Act (42 U.S.C. 1320a–7b(f))); and
					(2)shall ensure that
			 comparative effectiveness research conducted or supported by the Federal
			 Government accounts for factors contributing to differences in the treatment
			 response and treatment preferences of patients, including patient-reported
			 outcomes, genomics and personalized medicine, the unique needs of health
			 disparity populations, and indirect patient benefits.
					(b)Consultation and
			 approval requiredNothing the
			 Federal Coordinating Council for Comparative Effectiveness Research finds can
			 be released in final form until after consultation with and approved by
			 relevant physician specialty organizations.
				(c)Rule of
			 constructionNothing in this section shall be construed as
			 affecting the authority of the Commissioner of Food and Drugs under the Federal
			 Food, Drug, and Cosmetic Act or the Public Health Service Act.
				802.Establishment
			 of performance-based quality measuresNot later than January 1, 2012, the
			 Secretary of Health and Human Services shall submit to Congress a proposal for
			 a formalized process for the development of performance-based quality measures
			 that could be applied to physicians’ services under the Medicare program under
			 title XVIII of the Social Security Act. Such proposal shall be in concert and
			 agreement with the Physician Consortium for Performance Improvement and shall
			 only utilize measures agreed upon by each physician specialty
			 organization.
			IXState
			 Transparency Plan Portal
			901.Providing
			 information on health coverage options and health care providers
				(a)State-Based
			 portalA State (by itself or
			 jointly with other States) may contract with a private entity to establish a
			 Health Plan and Provider Portal Web site (referred to in this section as a
			 plan portal) for the purposes of providing standardized
			 information—
					(1)on health
			 insurance plans that have been certified to be available for purchase in that
			 State; and
					(2)on price and quality information on health
			 care providers (including physicians, hospitals, and other health care
			 institutions).
					(b)Pilot
			 program
					(1)In
			 generalNot later than 90
			 days after the date of the enactment of this Act the Secretary of Health and
			 Human Services shall work with States to establish no later than January 1,
			 2013, consistent with this title, a Web site that will serve as a pilot program
			 for a national portal for information structured in a manner so individuals may
			 directly link to the State plan portal for the State in which they
			 reside.
					(2)Contracts with
			 StateThe Secretary shall
			 enter into contracts with States, in a number and distribution determined by
			 the Secretary, to develop State plan portals that follow the applicable
			 standards and regulations under this section.
					(3)Common standards
			 for plan portals
						(A)In
			 generalIn connection with such Web site, the Secretary shall
			 establish standards for interoperability and consistency for State plan portals
			 so that individuals can access and view information in a similar manner on plan
			 portals of different States. Such standards shall include standard definitions
			 for health insurance plan benefits so that individuals can accurately compare
			 health insurance plans within such portals and standards for the inclusion of
			 information described in subsection (c).
						(B)ConsultationThe Secretary shall consult with a group
			 consisting of a balanced representation of the critical stakeholders (including
			 States, health insurance issuers, the National Association of Insurance
			 Commissioners, qualified health care provider-based entities (including
			 physicians, hospitals, and other health care institutions), and a standards
			 development organization) to develop such standards.
						(C)Issuance
							(i)In
			 generalNot later than 6
			 months after the date of the enactment of this Act, the Secretary shall issue,
			 by regulation, after notice and opportunity for public comment, standards that
			 are consistent with the recommendations made by the group under subparagraph
			 (B).
							(ii)DisseminationThe Secretary shall broadly disseminate the
			 standards so issued.
							(D)ReviewOne year after the date of establishment of
			 the pilot program under this subsection, the Secretary, in consultation with
			 stakeholder group described in subparagraph (B), shall review the standards
			 established and make such changes in such standards as may be
			 appropriate.
						(4)Authorization of
			 appropriationsThere are authorized to be appropriated to the
			 Secretary such amounts as may be necessary for—
						(A)the development
			 and operation of the national Web site under this subsection; and
						(B)contracts with
			 States under paragraph (2) to assist in the development and initial operation
			 of plan portals in accordance with standards established under paragraph (3)
			 and other applicable provisions of this section.
						(c)Information in
			 plan portalsThe standards
			 for plan portals under subsection (b)(3) shall include the following:
					(1)Health insurance
			 informationEach plan portal shall meet the following
			 requirements with respect to information on health insurance plans:
						(A)The plan portal
			 shall present complete information on the costs and benefits of health
			 insurance plans (including information on monthly premium, copayments,
			 deductibles, and covered benefits) in a uniform manner that—
							(i)uses
			 the standard definitions developed under subsection (b)(3); and
							(ii)is
			 designed to allow consumers to easily compare such plans.
							(B)The plan portal
			 shall be available on the internet and accessible to all individuals in the
			 United States.
						(C)The plan portal
			 shall allow consumers to search and sort data on the health insurance plans in
			 the plan portal on criteria such as coverage of specific benefits (such as
			 coverage of disease management services or pediatric care services), as well as
			 data available respecting quality of plans.
						(D)The plan portal
			 shall meet all relevant State laws and regulations, including laws and
			 regulations related to the marketing of insurance products.
						(E)Notwithstanding subsection (d)(1), the plan
			 portal shall provide information to individuals who are eligible for the
			 Medicaid program under title XIX of the Social Security Act or State Children’s
			 Health Insurance Program under title XXI of such Act by including information
			 on options, eligibility, and how to enroll through providing a link to a Web
			 site maintained with respect to such State programs.
						(F)The plan portal shall provide support to
			 individuals who are eligible for tax credits and deductions under the
			 amendments made by this Act to enhance such individual’s ability to access such
			 credits and deductions.
						(G)The plan portal
			 shall allow consumers to access quality data on providers as made available
			 through a Web site described in section 802 once that data is available.
						(2)Provider
			 informationEach plan portal
			 shall meet the following requirements with respect to information on health
			 care providers:
						(A)Identifying and
			 licensure information.
						(B)Self-pay prices
			 charged, including variation in such prices.
						For purposes
			 of subparagraph (B), the term self-pay price means the price
			 charged by a provider to individuals for items or services where the price is
			 not established or negotiated through a health care program or third
			 party.(3)Tax credit and
			 deduction informationEach plan portal shall also include
			 information on tax credits and deductions that may be available for purpose of
			 qualified health plans.
					(4)Inclusion of
			 quality informationThe Secretary, after collaboration with
			 States and health care providers (including practicing physicians, hospitals,
			 and other health care institutions), shall submit to Congress recommendations
			 on how to include on plan portals information on performance-based quality
			 measures obtained under section 802.
					(d)Prohibitions
					(1)Direct
			 EnrollmentA plan portal may not directly enroll individuals in
			 health insurance plans or under a State Medicaid plan or a State children’s
			 health insurance plan.
					(2)Conflicts of
			 interest
						(A)CompaniesA
			 health insurance issuer offering a health insurance plan through a plan portal
			 may not—
							(i)be
			 the private entity developing and maintaining a plan portal under this section;
			 or
							(ii)have an ownership
			 interest in such private entity or in the plan portal.
							(B)IndividualsAn individual employed by a health
			 insurance issuer offering a health insurance plan through a plan portal may not
			 serve as a director or officer for—
							(i)the
			 private entity developing and maintaining a plan portal under this section;
			 or
							(ii)the
			 plan portal.
							(e)ConstructionNothing
			 in this section shall be construed to prohibit health insurance brokers and
			 agents from—
					(1)utilizing the plan
			 portal for any purpose; or
					(2)marketing or
			 offering health insurance products.
					(f)State
			 definedIn this section, the term State has the
			 meaning given such term for purposes of title XIX of the Social Security
			 Act.
				(g)Health insurance
			 plansFor purposes of this section, the term health
			 insurance plan does not include coverage of excepted benefits, as
			 defined in section 2791(c) of the Public Health Service Act (42 U.S.C.
			 300gg–91(c)).
				XPatient Freedom of
			 Choice
			1001.Guaranteeing
			 freedom of choice and contracting for patients under Medicare
				(a)In
			 generalSection 1802 of the
			 Social Security Act (42 U.S.C. 1395a) is amended to read as follows:

						1802.Freedom of choice and contracting by patient
		  guaranteed(a)Basic freedom of
				choiceAny individual
				entitled to insurance benefits under this title may obtain health services from
				any institution, agency, or person qualified to participate under this title if
				such institution, agency, or person undertakes to provide that individual such
				services.
							(b)Freedom To
				contract by Medicare beneficiaries
								(1)In
				generalSubject to the provisions of this subsection, nothing in
				this title shall prohibit a Medicare beneficiary from entering into a contract
				with an eligible professional (whether or not the professional is a
				participating or non-participating physician or practitioner) for any item or
				service covered under this title.
								(2)Submission of
				claimsAny Medicare
				beneficiary that enters into a contract under this section with an eligible
				professional shall be permitted to submit a claim for payment under this title
				for services furnished by such professional, and such payment shall be made in
				the amount that would otherwise apply to such professional under this title
				except that where such professional is considered to be non-participating,
				payment shall be paid as if the professional were participating. Payment made
				under this title for any item or service provided under the contract shall not
				render the professional a participating or non-participating physician or
				practitioner, and as such, requirements of this title that may otherwise apply
				to a participating or non-participating physician or practitioner would not
				apply with respect to any items or services furnished under the
				contract.
								(3)Beneficiary
				protections
									(A)In
				generalParagraph (1) shall not apply to any contract
				unless—
										(i)the contract is in writing, is signed by
				the Medicare beneficiary and the eligible professional, and establishes all
				terms of the contract (including specific payment for items and services
				covered by the contract) before any item or service is provided pursuant to the
				contract, and the beneficiary shall be held harmless for any subsequent payment
				charged for an item or service in excess of the amount established under the
				contract during the period the contract is in effect;
										(ii)the contract
				contains the items described in subparagraph (B); and
										(iii)the contract is
				not entered into at a time when the Medicare beneficiary is facing an emergency
				medical condition or urgent health care situation.
										(B)Items required
				to be included in contractAny contract to provide items and
				services to which paragraph (1) applies shall clearly indicate to the Medicare
				beneficiary that by signing such contract the beneficiary—
										(i)agrees to be responsible for payment to
				such eligible professional for such items or services under the terms of and
				amounts established under the contract;
										(ii)agrees to be
				responsible for submitting claims under this title to the Secretary, and to any
				other supplemental insurance plan that may provide supplemental insurance, for
				such items or services furnished under the contract if such items or services
				are covered by this title, unless otherwise provided in the contract under
				subparagraph (C)(i); and
										(iii)acknowledges
				that no limits or other payment incentives that may otherwise apply under this
				title (such as the limits under subsection (g) of section 1848 or incentives
				under subsection (a)(5), (m), (q), and (p) of such section) shall apply to
				amounts that may be charged, or paid to a beneficiary for, such items or
				services.
										Such
				contract shall also clearly indicate whether the eligible professional is
				excluded from participation under the Medicare program under section
				1128.(C)Beneficiary
				elections under the contractAny Medicare beneficiary that enters
				into a contract under this section may elect to negotiate, as a term of the
				contract, a provision under which—
										(i)the eligible professional shall file claims
				on behalf of the beneficiary with the Secretary and any supplemental insurance
				plan for items or services furnished under the contract if such items or
				services are covered under this title or under the plan; and
										(ii)the beneficiary assigns payment to the
				eligible professional for any claims filed by, or on behalf of, the beneficiary
				with the Secretary and any supplemental insurance plan for items or services
				furnished under the contract.
										(D)Exclusion of
				dual eligible individualsParagraph (1) shall not apply to any
				contract if a beneficiary who is eligible for medical assistance under title
				XIX is a party to the contract.
									(4)Limitation on
				actual charge and claim submission requirement not
				applicableSection 1848(g) shall not apply with respect to any
				item or service provided to a Medicare beneficiary under a contract described
				in paragraph (1).
								(5)ConstructionNothing in this section shall be
				construed—
									(A)to prohibit any
				eligible professional from maintaining an election and acting as a
				participating or non-participating physician or practitioner with respect to
				any patient not covered under a contract established under this section;
				and
									(B)as changing the items and services for
				which an eligible professional may bill under this title.
									(6)DefinitionsIn
				this subsection:
									(A)Medicare
				beneficiaryThe term Medicare beneficiary means an
				individual who is entitled to benefits under part A or enrolled under part
				B.
									(B)Eligible
				professionalThe term eligible professional has the
				meaning given such term in section 1848(k)(3)(B).
									(C)Emergency
				medical conditionThe term emergency medical
				condition means a medical condition manifesting itself by acute symptoms
				of sufficient severity (including severe pain) such that a prudent layperson,
				with an average knowledge of health and medicine, could reasonably expect the
				absence of immediate medical attention to result in—
										(i)serious jeopardy
				to the health of the individual or, in the case of a pregnant woman, the health
				of the woman or her unborn child;
										(ii)serious
				impairment to bodily functions; or
										(iii)serious
				dysfunction of any bodily organ or part.
										(D)Urgent health
				care situationThe term urgent health care situation
				means services furnished to an individual who requires services to be furnished
				within 12 hours in order to avoid the likely onset of an emergency medical
				condition.
									.
				1002.Preemption of State
			 laws limiting charges for eligible professional services
				(a)In
			 generalNo State may impose a
			 limit on the amount of charges for services, furnished by an eligible
			 professional (as defined in subsection (k)(3)(B) of section 1848 of the Social
			 Security Act, 42 U.S.C. 1395w–4), for which payment is made under such section,
			 and any such limit is hereby preempted.
				(b)StateIn
			 this section, the term State includes the District of Columbia,
			 Puerto Rico, the Virgin Islands, Guam, and American Samoa.
				1003.Health care
			 provider licensure cannot be conditioned on participation in a health
			 plan
				(a)In
			 generalThe Secretary of
			 Health and Human Services and any State (as a condition of receiving Federal
			 financial participation under title XIX of the Social Security Act) may not
			 require any health care provider to participate in any health plan as a
			 condition of licensure of the provider in any State.
				(b)DefinitionsIn
			 this section:
					(1)Health
			 planThe term health plan has the meaning given such
			 term in section 1171(5) of the Social Security Act (42 U.S.C. 1320d(5)).
					(2)Health care
			 providerThe term
			 health care provider means any person or entity that is required
			 by State or Federal laws or regulations to be licensed, registered, or
			 certified to provide health care services and is so licensed, registered, or
			 certified, or exempted from such requirement by other statute or
			 regulation.
					(3)StateThe
			 term State has the meaning given such term for purposes of title
			 XIX of the Social Security Act.
					1004.Bad debt
			 deduction for doctors to partially offset the cost of providing uncompensated
			 care required to be provided under amendments made by the Emergency Medical
			 Treatment and Labor Act
				(a)In
			 generalSection 166 of the Internal Revenue Code of 1986
			 (relating to bad debts) is amended by redesignating subsection (f) as
			 subsection (g) and by inserting after subsection (e) the following new
			 subsection:

						(f)Bad debt
				treatment for doctors To partially offset cost of providing uncompensated care
				required To be provided
							(1)Amount of
				deduction
								(A)In
				generalFor purposes of subsection (a), the basis for determining
				the amount of any deduction for an eligible EMTALA debt shall be treated as
				being equal to the Medicare payment amount.
								(B)Medicare payment
				amountFor purposes of
				subparagraph (A), the Medicare payment amount with respect to an eligible
				EMTALA debt is the fee schedule amount established under section 1848 of the
				Social Security Act for the physicians’ service (to which such debt relates) as
				if the service were provided to an individual enrolled under part B of title
				XVIIII of such Act.
								(2)Eligible EMTALA
				debtFor purposes of this section, the term eligible EMTALA
				debt means any debt if—
								(A)such debt arose as a result of physicians’
				services—
									(i)which were
				performed in an EMTALA hospital by a board-certified physician (whether as part
				of medical screening or necessary stabilizing treatment and whether as an
				emergency department physician, as an on-call physician, or otherwise),
				and
									(ii)which were
				required to be provided under section 1867 of the Social Security Act (42
				U.S.C. 1395dd), and
									(B)such debt is
				owed—
									(i)to
				such physician, or
									(ii)to an entity
				if—
										(I)such entity is a
				corporation and the sole shareholder of such corporation is such physician,
				or
										(II)such entity is a
				partnership and any deduction under this subsection with respect to such debt
				is allocated to such physician or to an entity described in subclause
				(I).
										(3)Board-certified
				physicianFor purposes of this subsection, the term
				board-certified physician means any physician (as defined in
				section 1861(r) of the Social Security Act (42 U.S.C. 1395x(r)) who is
				certified by the American Board of Emergency Medicine or other appropriate
				medical specialty board for the specialty in which the physician practices, or
				who meets comparable requirements, as identified by the Secretary of the
				Treasury in consultation with Secretary of Health and Human Services.
							(4)Other
				definitionsFor purposes of this subsection—
								(A)EMTALA
				hospitalThe term
				EMTALA hospital means any hospital having a hospital emergency
				department which is required to comply with section 1867 of the Social Security
				Act (42 U.S.C. 1395dd) (relating to examination and treatment for emergency
				medical conditions and women in labor).
								(B)Physicians’
				servicesThe term
				physicians’ services has the meaning given such term in section
				1861(q) of the Social Security Act (42 U.S.C.
				1395x(q)).
								.
				(b)Effective
			 dateThe amendments made by this section shall apply to debts
			 arising from services performed in taxable years beginning after the date of
			 the enactment of this Act.
				1005.Right of
			 contract with health care providers
				(a)In
			 generalThe Secretary of Health and Human Services shall not
			 preclude an enrollee, participant, or beneficiary in a health benefits plan
			 from entering into any contract or arrangement for health care with any health
			 care provider.
				(b)Health benefits
			 plan defined
					(1)In
			 generalIn this section, subject to paragraph (2), the term
			 health benefits plan means any of the following:
						(A)Group health plan
			 (as defined in section 2791 of the Public Health Service Act).
						(B)Health insurance
			 coverage (as defined in section 2791 of such Act).
						(C)A health benefits
			 plan under chapter 89 of title 5, United States Code.
						(2)Exclusion of
			 Medicaid and TricareSuch term does not include a health plan
			 participating in—
						(A)the Medicaid
			 program under title XIX of the Social Security Act; or
						(B)the TRICARE
			 program under chapter 55 of title 10, United States Code.
						(c)Health care
			 provider definedIn this section, the term health care
			 provider means—
					(1)a
			 physician, as defined in paragraphs (1), (2), (3), and (4) of section 1861(r)
			 of the Social Security Act (42 U.S.C. 1395x(r)); and
					(2)a
			 health care practitioner described in section 1842(b)(18)(C) of such Act (42
			 U.S.C. 1395u(b)(18)(C)).
					XIIncentives to
			 reduce physician shortages
			AFederally
			 Supported Student Loan Funds for Medical Students
				1101.Federally supported
			 student loan funds for medical students
					(a)Primary health
			 care medical studentsSubpart II of part A of the Public Health
			 Service Act (42 U.S.C. 292q et seq.) is amended—
						(1)by redesignating
			 section 735 as section 729; and
						(2)in subsection (f)
			 of section 729 (as so redesignated), by striking is authorized to be
			 appropriated $10,000,000 for each of the fiscal years 1994 through 1996
			 and inserting are authorized to be appropriated such sums as may be
			 necessary for fiscal year 2012 and each fiscal year thereafter.
						(b)Other medical
			 studentsPart A of title VII
			 of the Public Health Service Act (42 U.S.C. 292 et seq.) is amended by adding
			 at the end the following:

							IIIFederally
				Supported Student Loan Funds for Certain Medical Students
								730.School loan
				funds for certain medical students
									(a)Fund
				agreementsFor the purpose described in subsection (b), the
				Secretary is authorized to enter into an agreement for the establishment and
				operation of a student loan fund with any public or nonprofit school of
				medicine or osteopathic medicine.
									(b)PurposeThe
				purpose of this subpart is to provide for loans to medical students who would
				be eligible for a loan under subpart II, except for the student’s decision to
				enter a residency training program in a field other than primary health
				care.
									(c)Commencement of
				repayment periodThe
				repayment period for a loan under this section shall not begin before the end
				of any period during which the student is participating in an internship,
				residency, or fellowship training program directly related to the field of
				medicine which the student agrees to enter pursuant to subsection (d).
									(d)Requirements for
				studentsEach agreement under this section for the establishment
				of a student loan fund shall provide that the school of medicine or osteopathic
				medicine will make a loan to a student from such fund only if the student
				agrees—
										(1)to enter and
				complete a residency training program (in a field of medicine other than
				primary health care) not later than a period determined by the Secretary to be
				reasonable after the date on which the student graduates from such school;
				and
										(2)to practice
				medicine through the date on which the loan is repaid in full.
										(e)Requirements for
				schoolsThe provisions of section 723(b) (regarding graduates in
				primary health care) shall not apply to a student loan fund established under
				this section.
									(f)Applicability of
				other provisionsExcept as inconsistent with this section, the
				provisions of subpart II shall apply to the program of student loan funds
				established under this section to the same extent and in the same manner as
				such provisions apply to the program of student loan funds established under
				subpart II.
									(g)Authorization of
				appropriationsTo carry out this section, there are authorized to
				be appropriated such sums as may be necessary for fiscal year 2012 and each
				fiscal year
				thereafter.
									.
					BLoan Forgiveness
			 for Primary Care Providers
				1111.Loan
			 forgiveness for primary care providers
					(a)In
			 generalThe Secretary of Health and Human Services shall carry
			 out a program of entering into contracts with eligible individuals under
			 which—
						(1)the individual
			 agrees to serve for a period of not less than 5 years as a primary care
			 provider; and
						(2)in consideration
			 of such service, the Secretary agrees to pay not more than $50,000 on the
			 principal and interest on the individual’s graduate educational loans.
						(b)EligibilityTo
			 be eligible to enter into a contract under subsection (a), an individual
			 must—
						(1)have a graduate
			 degree in medicine, osteopathic medicine, or another health profession from an
			 accredited (as determined by the Secretary of Health and Human Services)
			 institution of higher education; and
						(2)have practiced as
			 a primary care provider for a period (excluding any residency or fellowship
			 training period) of not less than—
							(A)5 years; or
							(B)3 years in a
			 medically underserved community (as defined in section 799B of the Public
			 Health Service Act (42 U.S.C. 295p)).
							(c)InstallmentsPayments
			 under this section may be made in installments of not more than $10,000 for
			 each year of service described in subsection (a)(1).
					(d)Applicability of
			 certain provisionsThe
			 provisions of subpart III of part D of title III of the Public Health Service
			 Act shall, except as inconsistent with this section, apply to the program
			 established under this section in the same manner and to the same extent as
			 such provisions apply to the National Health Service Corps Loan Repayment
			 Program established in such subpart.
					XIIQuality Health
			 Care Coalition
			1201.Quality Health
			 Care Coalition
				(a)Application of
			 the Federal antitrust laws to health care professionals negotiating with health
			 plans
					(1)In
			 generalAny health care professionals who are engaged in
			 negotiations with a health plan regarding the terms of any contract under which
			 the professionals provide health care items or services for which benefits are
			 provided under such plan shall, in connection with such negotiations, be exempt
			 from the Federal antitrust laws.
					(2)Limitation
						(A)No new right for
			 collective cessation of serviceThe exemption provided in
			 paragraph (1) shall not confer any new right to participate in any collective
			 cessation of service to patients not already permitted by existing law.
						(B)No change in
			 National Labor Relations ActThis section applies only to health
			 care professionals excluded from the National Labor Relations Act. Nothing in
			 this section shall be construed as changing or amending any provision of the
			 National Labor Relations Act, or as affecting the status of any group of
			 persons under that Act.
						(3)No application
			 to Federal programsNothing in this section shall apply to
			 negotiations between health care professionals and health plans pertaining to
			 benefits provided under any of the following:
						(A)The Medicare
			 Program under title XVIII of the Social Security
			 Act (42 U.S.C. 1395 et seq.).
						(B)The Medicaid
			 program under title XIX of the Social Security
			 Act (42 U.S.C. 1396 et seq.).
						(C)The SCHIP program
			 under title XXI of the Social Security
			 Act (42 U.S.C. 1397aa et seq.).
						(D)Chapter 55 of
			 title 10, United States Code (relating to medical and dental care for members
			 of the uniformed services).
						(E)Chapter 17 of
			 title 38, United States Code (relating to Veterans’ medical care).
						(F)Chapter 89 of
			 title 5, United States Code (relating to the Federal employees’ health benefits
			 program).
						(G)The
			 Indian Health Care Improvement Act
			 (25 U.S.C. 1601 et seq.).
						(b)DefinitionsIn
			 this section, the following definitions shall apply:
					(1)Antitrust
			 lawsThe term antitrust laws—
						(A)has the meaning
			 given it in subsection (a) of the first section of the
			 Clayton Act (15 U.S.C. 12(a)), except
			 that such term includes section 5 of the Federal
			 Trade Commission Act (15 U.S.C. 45) to the extent such section
			 applies to unfair methods of competition; and
						(B)includes any State
			 law similar to the laws referred to in subparagraph (A).
						(2)Group health
			 planThe term group health plan means an employee
			 welfare benefit plan to the extent that the plan provides medical care
			 (including items and services paid for as medical care) to employees or their
			 dependents (as defined under the terms of the plan) directly or through
			 insurance, reimbursement, or otherwise.
					(3)Group health
			 plan, health insurance issuerThe terms group health
			 plan and health insurance issuer include a third-party
			 administrator or other person acting for or on behalf of such plan or
			 issuer.
					(4)Health care
			 servicesThe term health care services means any
			 services for which payment may be made under a health plan, including services
			 related to the delivery or administration of such services.
					(5)Health care
			 professionalThe term health care professional means
			 any individual or entity that provides health care items or services,
			 treatment, assistance with activities of daily living, or medications to
			 patients and who, to the extent required by State or Federal law, possesses
			 specialized training that confers expertise in the provision of such items or
			 services, treatment, assistance, or medications.
					(6)Health insurance
			 coverageThe term health insurance coverage means
			 benefits consisting of medical care (provided directly, through insurance or
			 reimbursement, or otherwise and including items and services paid for as
			 medical care) under any hospital or medical service policy or certificate,
			 hospital or medical service plan contract, or health maintenance organization
			 contract offered by a health insurance issuer.
					(7)Health insurance
			 issuerThe term health insurance issuer means an
			 insurance company, insurance service, or insurance organization (including a
			 health maintenance organization) that is licensed to engage in the business of
			 insurance in a State and that is subject to State law regulating insurance.
			 Such term does not include a group health plan.
					(8)Health
			 maintenance organizationThe term health maintenance
			 organization means—
						(A)a federally
			 qualified health maintenance organization (as defined in section 1301(a) of the
			 Public Health Service Act (42 U.S.C.
			 300e(a)));
						(B)an organization
			 recognized under State law as a health maintenance organization; or
						(C)a similar
			 organization regulated under State law for solvency in the same manner and to
			 the same extent as such a health maintenance organization.
						(9)Health
			 planThe term health plan means a group health plan
			 or a health insurance issuer that is offering health insurance coverage.
					(10)Medical
			 careThe term medical care means amounts paid
			 for—
						(A)the diagnosis,
			 cure, mitigation, treatment, or prevention of disease, or amounts paid for the
			 purpose of affecting any structure or function of the body; and
						(B)transportation
			 primarily for and essential to receiving items and services referred to in
			 subparagraph (A).
						(11)PersonThe
			 term person includes a State or unit of local government.
					(12)StateThe
			 term State includes the several States, the District of Columbia,
			 Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, and
			 the Commonwealth of the Northern Mariana Islands.
					(c)Effective
			 dateThis section shall take effect on on the date of the
			 enactment of this Act and shall not apply with respect to conduct occurring
			 before such date.
				XIIIOffsets
			ADiscretionary
			 spending limits
				1301.Discretionary
			 spending limitsSection 251(c)
			 of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
			 901(c)), as amended by section 101 of the Budget Control Act of 2011, is
			 amended to read as follows:

						(c)Discretionary
				Spending LimitAs used in
				this part, the term discretionary spending limit means—
							(1)with respect to
				fiscal year 2012—
								(A)for the security
				category, $684,000,000,000 in new budget authority; and
								(B)for the
				nonsecurity category, $359,000,000,000 in new budget authority;
								(2)with respect to
				fiscal year 2013—
								(A)for the security
				category, $698,000,000,000 in new budget authority; and
								(B)for the
				nonsecurity category, $329,000,000,000 in new budget authority;
								(3)with respect to
				fiscal year 2014, for the discretionary category, $1,038,537,000,000 in new
				budget authority;
							(4)with respect to
				fiscal year 2015, for the discretionary category, $1,046,680,000,000 in new
				budget authority;
							(5)with respect to
				fiscal year 2016, for the discretionary category, $1,055,779,000,000 in new
				budget authority;
							(6)with respect to
				fiscal year 2017, for the discretionary category, $1,067,794,000,000 in new
				budget authority;
							(7)with respect to
				fiscal year 2018, for the discretionary category, $1,085,259,000,000 in new
				budget authority;
							(8)with respect to
				fiscal year 2019, for the discretionary category, $1,103,802,000,000 in new
				budget authority;
							(9)with respect to
				fiscal year 2020, for the discretionary category, $1,122,611,000,000 in new
				budget authority; and
							(10)with respect to
				fiscal year 2021, for the discretionary category, $1,141,640,000,000 in new
				budget authority;
							as adjusted in strict conformance
				with subsection
				(b)..
				BSavings from
			 health care efficiencies
				1311.Medicare DSH report
			 and payment adjustments in response to coverage expansion
					(a)DSH
			 report
						(1)In
			 generalNot later than
			 January 1, 2016, the Secretary of Health and Human Services shall submit to
			 Congress a report on Medicare DSH taking into account the impact of the health
			 care reforms carried out under this Act in reducing the number of uninsured
			 individuals. The report shall include recommendations relating to the
			 following:
							(A)The appropriate
			 amount, targeting, and distribution of Medicare DSH to compensate for higher
			 Medicare costs associated with serving low-income beneficiaries (taking into
			 account variations in the empirical justification for Medicare DSH attributable
			 to hospital characteristics, including bed size), consistent with the original
			 intent of Medicare DSH.
							(B)The appropriate
			 amount, targeting, and distribution of Medicare DSH to hospitals given their
			 continued uncompensated care costs, to the extent such costs remain.
							(2)Coordination
			 with Medicaid DSH reportThe Secretary shall coordinate the
			 report under this subsection with the report on Medicaid DSH under section
			 1322(a).
						(b)Payment
			 adjustments in response to coverage expansion
						(1)In
			 generalIf there is a significant decrease in the national rate
			 of uninsurance as a result of this Act (as determined under paragraph (2)(A)),
			 then the Secretary of Health and Human Services shall, beginning in fiscal year
			 2017, implement the following adjustments to Medicare DSH:
							(A)In lieu of the amount of Medicare DSH
			 payment that would otherwise be made under section 1886(d)(5)(F) of the Social
			 Security Act, the amount of Medicare DSH payment shall be an amount based on
			 the recommendations of the report under subsection (a)(1)(A) and shall take
			 into account variations in the empirical justification for Medicare DSH
			 attributable to hospital characteristics, including bed size.
							(B)Subject to paragraph (3), make an
			 additional payment to a hospital by an amount that is estimated based on the
			 amount of uncompensated care provided by the hospital based on criteria for
			 uncompensated care as determined by the Secretary, which shall exclude bad
			 debt.
							(2)Significant
			 decrease in national rate of uninsurance as a result of this ActFor purposes of this subsection—
							(A)In
			 generalThere is a significant decrease in the national
			 rate of uninsurance as a result of this Act if there is a decrease in
			 the national rate of uninsurance (as defined in subparagraph (B)) from 2012 to
			 2014 that exceeds 8 percentage points.
							(B)National rate of
			 uninsurance definedThe term national rate of
			 uninsurance means, for a year, such rate for the under-65 population for
			 the year as determined and published by the Bureau of the Census in its Current
			 Population Survey in or about September of the succeeding year.
							(3)Uncompensated
			 care increase
							(A)Computation of
			 DSH savingsFor each fiscal
			 year (beginning with fiscal year 2015), the Secretary shall estimate the
			 aggregate reduction in Medicare DSH that will result from the adjustment under
			 paragraph (1)(A).
							(B)Structure of
			 payment increaseThe
			 Secretary shall compute the increase in Medicare DSH under paragraph (1)(B) for
			 a fiscal year in accordance with a formula established by the Secretary that
			 provides that—
								(i)the
			 aggregate amount of such increase for the fiscal year does not exceed 50
			 percent of the aggregate reduction in Medicare DSH estimated by the Secretary
			 for such fiscal year; and
								(ii)hospitals with
			 higher levels of uncompensated care receive a greater increase.
								(c)Medicare
			 DSHIn this section, the term Medicare DSH means
			 adjustments in payments under section 1886(d)(5)(F) of the Social Security Act
			 (42 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital services furnished by
			 disproportionate share hospitals.
					1312.Reduction in
			 Medicaid DSH
					(a)Report
						(1)In
			 generalNot later than January 1, 2016, the Secretary of Health
			 and Human Services (in this title referred to as the Secretary)
			 shall submit to Congress a report concerning the extent to which, based upon
			 the impact of the health care reforms carried out under this Act in reducing
			 the number of uninsured individuals, there is a continued role for Medicaid
			 DSH. In preparing the report, the Secretary shall consult with community-based
			 health care networks serving low-income beneficiaries.
						(2)Matters to be
			 includedThe report shall include the following:
							(A)RecommendationsRecommendations
			 regarding—
								(i)the appropriate targeting of Medicaid DSH
			 within States; and
								(ii)the distribution of Medicaid DSH among the
			 States.
								(B)Specification of
			 DSH Health Reform methodologyThe DSH Health Reform methodology
			 described in paragraph (2) of subsection (b) for purposes of implementing the
			 requirements of such subsection.
							(3)Coordination
			 with Medicare DSH reportThe Secretary shall coordinate the
			 report under this subsection with the report on Medicare DSH under section
			 1321.
						(4)Medicaid
			 DSHIn this section, the term Medicaid DSH means
			 adjustments in payments under section 1923 of the Social Security Act for
			 inpatient hospital services furnished by disproportionate share
			 hospitals.
						(b)Medicaid DSH
			 reductions
						(1)In
			 generalIf there is a significant decrease in the national rate
			 of uninsurance as a result of this Act (as determined under section
			 1321(a)(2)(A)), then the Secretary of Health and Human Services shall reduce
			 Medicaid DSH so as to reduce total Federal payments to all States for such
			 purpose by $1,500,000,000 in fiscal year 2017, $2,500,000,000 in fiscal year
			 2018, and $6,000,000,000 in fiscal year 2019.
						(2)DSH Health
			 Reform methodologyThe Secretary shall carry out paragraph (1)
			 through use of a DSH Health Reform methodology issued by the Secretary that
			 imposes the largest percentage reductions on the States that—
							(A)have the lowest
			 percentages of uninsured individuals (determined on the basis of audited
			 hospital cost reports) during the most recent year for which such data are
			 available; or
							(B)do not target
			 their DSH payments on—
								(i)hospitals with
			 high volumes of Medicaid inpatients (as defined in section 1923(b)(1)(A) of the
			 Social Security Act (42 U.S.C. 1396r–4(b)(1)(A))); and
								(ii)hospitals that have high levels of
			 uncompensated care (excluding bad debt).
								(3)DSH allotment
			 publications
							(A)In
			 generalNot later than the publication deadline specified in
			 subparagraph (B), the Secretary shall publish in the Federal Register a notice
			 specifying the DSH allotment to each State under 1923(f) of the Social Security
			 Act for the respective fiscal year specified in such subparagraph, consistent
			 with the application of the DSH Health Reform methodology described in
			 paragraph (2).
							(B)Publication
			 deadlineThe publication deadline specified in this subparagraph
			 is—
								(i)January 1, 2016,
			 with respect to DSH allotments described in subparagraph (A) for fiscal year
			 2017;
								(ii)January 1, 2017, with respect to DSH
			 allotments described in subparagraph (A) for fiscal year 2018; and
								(iii)January 1, 2018, with respect to DSH
			 allotments described in subparagraph (A) for fiscal year 2019.
								(c)Conforming
			 amendments
						(1)Section 1923(f) of
			 the Social Security Act (42 U.S.C. 1396r–4(f)) is amended—
							(A)by redesignating
			 paragraph (7) as paragraph (8); and
							(B)by inserting after
			 paragraph (6) the following new paragraph:

									(7)Special rule for
				fiscal years 2017, 2018, and 2019Notwithstanding paragraph (2),
				if the Secretary makes a reduction under section 1322(b)(1) of the
				Empowering Patients First Act,
				the total DSH allotments for all States for—
										(A)fiscal year 2017,
				shall be the total DSH allotments that would otherwise be determined under this
				subsection for such fiscal year decreased by $1,500,000,000;
										(B)fiscal year 2018, shall be the total DSH
				allotments that would otherwise be determined under this subsection for such
				fiscal year decreased by $2,500,000,000; and
										(C)fiscal year 2019,
				shall be the total DSH allotments that would otherwise be determined under this
				subsection for such fiscal year decreased by
				$6,000,000,000.
										.
							(2)Section 1923(b)(4)
			 of such Act (42 U.S.C. 1396r–4(b)(4)) is amended by adding before the period
			 the following: or to affect the authority of the Secretary to issue and
			 implement the DSH Health Reform methodology under section 1322(b)(2) of the
			 Empowering Patients First
			 Act.
						(d)Disproportionate
			 share hospitals (DSH) and essential access hospital (EAH)
			 non-Discrimination
						(1)In
			 generalSection 1923(d) of the Social Security Act (42 U.S.C.
			 1396r–4) is amended by adding at the end the following new paragraph:

								(4)No hospital may be defined or deemed as a
				disproportionate share hospital, or as an essential access hospital (for
				purposes of subsection (f)(6)(A)(iv)), under a State plan under this title or
				subsection (b) of this section (including any waiver under section 1115) unless
				the hospital—
									(A)provides services
				to beneficiaries under this title without discrimination on the ground of race,
				color, national origin, creed, source of payment, status as a beneficiary under
				this title, or any other ground unrelated to such beneficiary’s need for the
				services or the availability of the needed services in the hospital; and
									(B)makes arrangements
				for, and accepts, reimbursement under this title for services provided to
				eligible beneficiaries under this
				title.
									.
						(2)Effective
			 dateThe amendment made by subsection (a) shall be apply to
			 expenditures made on or after July 1, 2012.
						CFraud, Waste, and
			 Abuse
				1321.Provide
			 adequate funding to HHS OIG and HCFAC
					(a)HCFAC
			 fundingSection 1817(k)(3)(A)
			 of the Social Security Act (42 U.S.C. 1395i(k)(3)(A)) is amended—
						(1)in clause
			 (i)—
							(A)in subclause (IV),
			 by striking at the end and;
							(B)in subclause
			 (V)—
								(i)by
			 striking for each fiscal year after fiscal year 2010 and
			 inserting for fiscal year 2011; and
								(ii)by
			 striking the period at the end and inserting ; and; and
								(C)by adding at the
			 end the following new subclause:

									(VI)for each fiscal year after fiscal year
				2011, $300,000,000.
									;
				and
							(2)in clause
			 (ii)—
							(A)in subclause (IX),
			 by striking at the end and;
							(B)in subclause
			 (X)—
								(i)by
			 striking for each fiscal year after fiscal year 2010 and
			 inserting for fiscal year 2011; and
								(ii)by
			 striking the period at the end and inserting ; and; and
								(C)by adding at the
			 end the following new subclause:

									(XI)for each fiscal year after fiscal year
				2011, not less than the amount required under this clause for fiscal year 2011,
				plus the amount by which the amount made available under clause (i)(VI) for
				fiscal year 2012 exceeds the amount made available under clause (i)(V) for
				fiscal year
				2011.
									.
							(b)OIG
			 fundingThere are authorized
			 to be appropriated for each of fiscal years 2012 through 2021 $100,000,000 for
			 the Office of the Inspector General of the Department of Health and Human
			 Services for fraud prevention activities under the Medicare and Medicaid
			 programs.
					1322.Improved
			 enforcement of the Medicare secondary payor provisions
					(a)In
			 generalThe Secretary, in coordination with the Inspector General
			 of the Department of Health and Human Services, shall provide through the
			 Coordination of Benefits Contractor for the identification of instances where
			 the Medicare program should be, but is not, acting as a secondary payer to an
			 individual’s private health benefits coverage under section 1862(b) of the
			 Social Security Act (42 U.S.C. 1395y(b)).
					(b)Updating
			 proceduresThe Secretary shall update procedures for identifying
			 and resolving credit balance situations which occur under the Medicare program
			 when payment under such title and from other health benefit plans exceed the
			 providers’ charges or the allowed amount.
					(c)Report on
			 improved enforcementNot later than 1 year after the date of the
			 enactment of this Act, the Secretary shall submit a report to Congress on
			 progress made in improved enforcement of the Medicare secondary payor
			 provisions, including recoupment of credit balances.
					1323.Strengthen
			 Medicare provider enrollment standards and safeguards
					(a)Strengthening
			 Medicare provider numbers
						(1)Screening new
			 providersAs a condition of a
			 provider of services or a supplier, including durable medical equipment
			 suppliers and home health agencies, applying for the first time for a provider
			 number under the Medicare program under title XVIII of the Social Security Act
			 and before granting billing privileges under such title, the Secretary of
			 Health and Human Services (referred to in this section as the
			 Secretary) shall screen the provider or supplier for a criminal
			 background or other financial or operational irregularities through
			 fingerprinting, licensure checks, site-visits, and other database
			 checks.
						(2)Application
			 feesThe Secretary shall impose an application charge on such a
			 provider or supplier in order to cover the Secretary’s costs in performing the
			 screening required under paragraph (1).
						(3)Provisional
			 approvalDuring an initial,
			 provisional period (specified by the Secretary) in which such a provider or
			 supplier has been issued such a number, the Secretary shall provide enhanced
			 oversight of the activities of such provider or supplier under the Medicare
			 program, such as through prepayment review and payment limitations.
						(4)Penalties for
			 false statementsIn the case of a provider or supplier that
			 knowingly makes a false statement in an application for such a number, the
			 Secretary may exclude the provider or supplier from participation under the
			 Medicare program, or may impose a civil money penalty (in the amount described
			 in section 1128A(a)(4) of the Social Security Act), in the same manner as the
			 Secretary may impose such an exclusion or penalty under sections 1128 and
			 1128A, respectively, of such Act in the case of knowing presentation of a false
			 claim described in section 1128A(a)(1)(A) of such Act.
						(5)Disclosure
			 requirementsWith respect to approval of such an application, the
			 Secretary—
							(A)shall require
			 applicants to disclose previous affiliation with enrolled entities that have
			 uncollected debt related to the Medicare or Medicaid programs;
							(B)may deny approval
			 if the Secretary determines that these affiliations pose undue risk to the
			 Medicare or Medicaid program, subject to an appeals process for the applicant
			 as determined by the Secretary; and
							(C)may implement
			 enhanced safeguards (such as surety bonds).
							(b)MoratoriaThe Secretary may impose moratoria on
			 approval of provider and supplier numbers under the Medicare program for new
			 providers of services and suppliers as determined necessary to prevent or
			 combat fraud a period of delay for any one applicant cannot exceed 30 days
			 unless cause is shown by the Secretary.
					(c)FundingThere
			 are authorized to be appropriated to carry out this section such sums as may be
			 necessary.
					1324.Tracking
			 banned providers across State lines
					(a)Greater
			 coordinationThe Secretary of Health and Human Services (in this
			 section referred to as the Secretary) shall provide for increased
			 coordination between the Administrator of the Centers for Medicare &
			 Medicaid Services (in this section referred to as CMS) and its
			 regional offices to ensure that providers of services and suppliers that have
			 operated in one State and are excluded from participation in the Medicare
			 program are unable to begin operation and participation in the Medicare program
			 in another State.
					(b)Improved
			 information systems
						(1)In
			 generalThe Secretary shall improve information systems to allow
			 greater integration between databases under the Medicare program so
			 that—
							(A)Medicare
			 administrative contractors, fiscal intermediaries, and carriers have immediate
			 access to information identifying providers and suppliers excluded from
			 participation in the Medicare and Medicaid program and other Federal health
			 care programs; and
							(B)such information
			 can be shared across Federal health care programs and agencies, including
			 between the Departments of Health and Human Services, the Social Security
			 Administration, the Department of Veterans Affairs, the Department of Defense,
			 the Department of Justice, and the Office of Personnel Management.
							(c)Medicare/Medicaid
			 One PI databaseThe Secretary shall implement a
			 database that includes claims and payment data for all components of the
			 Medicare program and the Medicaid program.
					(d)Authorizing
			 expanded data matchingNotwithstanding any provision of the
			 Computer Matching and Privacy Protection Act of 1988 to the contrary—
						(1)the Secretary and
			 the Inspector General in the Department of Health and Human Services may
			 perform data matching of data from the Medicare program with data from the
			 Medicaid program; and
						(2)the Commissioner
			 of Social Security and the Secretary may perform data matching of data of the
			 Social Security Administration with data from the Medicare and Medicaid
			 programs.
						(e)Consolidation of
			 data basesThe Secretary shall consolidate and expand into a
			 centralized data base for individuals and entities that have been excluded from
			 Federal health care programs the Healthcare Integrity and Protection Data Bank,
			 the National Practitioner Data Bank, the List of Excluded Individuals/Entities,
			 and a national patient abuse/neglect registry.
					(f)Comprehensive
			 provider database
						(1)EstablishmentThe
			 Secretary shall establish a comprehensive database that includes information on
			 providers of services, suppliers, and related entities participating in the
			 Medicare program, the Medicaid program, or both. Such database shall include,
			 information on ownership and business relationships, history of adverse
			 actions, results of site visits or other monitoring by any program.
						(2)UsePrior
			 to issuing a provider or supplier number for an entity under the Medicare
			 program, the Secretary shall obtain information on the entity from such
			 database to assure the entity qualifies for the issuance of such a
			 number.
						(g)Comprehensive
			 sanctions databaseThe Secretary shall establish a comprehensive
			 sanctions database on sanctions imposed on providers of services, suppliers,
			 and related entities. Such database shall be overseen by the Inspector General
			 of the Department of Health and Human Services and shall be linked to related
			 databases maintained by State licensure boards and by Federal or State law
			 enforcement agencies.
					(h)Access to claims
			 and payment databasesThe Secretary shall ensure that the
			 Inspector General of the Department of Health and Human Services and Federal
			 law enforcement agencies have direct access to all claims and payment databases
			 of the Secretary under the Medicare or Medicaid programs.
					(i)Civil money
			 penalties for submission of erroneous informationIn the case of a provider of services,
			 supplier, or other entity that knowingly submits erroneous information that
			 serves as a basis for payment of any entity under the Medicare or Medicaid
			 program, the Secretary may impose a civil money penalty of not to exceed
			 $50,000 for each such erroneous submission. A civil money penalty under this
			 subsection shall be imposed and collected in the same manner as a civil money
			 penalty under subsection (a) of section 1128A of the Social Security Act is
			 imposed and collected under that section.