Church plans as qualified health plans

(a)

In general

Section 1301(a) of the Patient Protection and Affordable Care Act (42 U.S.C. 18021(a)) is amended— (1)by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; and (2)by inserting after paragraph (2), the following:

(3)

Inclusion of qualified church plans

(A)

In general

Any reference in this title to a qualified health plan shall be deemed to include a qualified church plan, unless specifically provided for otherwise. (B)

Requirements of qualified church plans

A qualified church plan is a church plan, as defined in section 414(e) of the Internal Revenue Code of 1986, that— (i)is a welfare plan, as defined in section 2(c) of Public Law 106–244, and provides health care coverage for the employees of ten or more eligible common law employers, and if a majority of employees covered by the plan are employees of churches or qualified church-controlled organizations within the meaning of sections 3121(w)(3) (A) and (B) of the Internal Revenue Code of 1986, respectively; (ii)provides an essential health benefits package, as defined in section 1302(a); (iii)complies with the requirements under sections 2703, 2706, 2708, 2709, 2711, 2712, 2713, 2714, 2715, 2719, and 2719A of the Public Health Service Act; (iv)prohibits exclusions based on preexisting conditions or other health status, and prohibits discrimination against individual participants and beneficiaries based on health status for the purposes of enrollment, within the meaning of sections 2704 and 2705 of the Public Health Service Act, except as provided under subparagraph (C)(ii); and (v)limits, on average, the ratio of incurred losses plus loss adjustment expenses to earned premiums, within the meaning of section 2718 of the Public Health Service Act, as calculated across the entire church plan, except that, for purposes of this paragraph, earned premiums include payments by, or on behalf of, employees of a church, as defined in 414(e)(3)(B) of the Internal Revenue Code of 1986. (C)

Exclusion of qualified church plans from American health benefit exchanges

(i)

In general

A qualified church plan may not participate in an American Health Benefit Exchange established by a State under section 1311(b) or by the Secretary of Health and Human Services (referred to in this paragraph as the Secretary) under 1321(c). The Secretary shall not assess a charge or make a payment to a qualified church plan to reflect actuarial risk pursuant to section 1343, and a qualified church plan shall be exempt from any other subsidies, payments, or requirements under this Act that apply to qualified health plans offered on American Health Benefit Exchanges, except as provided by this paragraph. (ii)

Premiums

A qualified church plan may differentiate premiums using methods and criteria consistent with those that the Secretary uses to assess charges and payments to other qualified health plans based on the actuarial risks of enrollees of such plans pursuant to section 1343 and those described in section 422.308 of title 42, Code of Federal Regulations. A qualified church plan may develop additional methods and criteria to define and account for the actuarial risk associated with the prohibition against qualified church plans enrolling a larger number and more diverse pool of enrollees as long as such additional methods and criteria are not inconsistent with the risk adjusters described in section 1343 and those described in section 422.308 of title 42, Code of Federal Regulations. (D)

Deemed status of qualified church plans

A qualified church plan shall be deemed to be— (i)minimum essential coverage under an eligible employer-sponsored plan, as defined under section 5000A(f)(2) of the Internal Revenue Code of 1986; and (ii)for the purposes of subparagraph (F), equivalent to a health plan offered through an American Health Benefit Exchange, within the meaning of section 1311(b). (E)

Employers participating in qualified church plans

(i)

Eligible small employers

An employer participating in a qualified church plan shall be deemed an eligible small employer under section 45R(d) of the Internal Revenue Code of 1986, if— (I)the employer has not more than 25 full-time equivalent employees, as defined under section 45R(d)(2) of the Internal Revenue Code of 1986, for the taxable year; and (II)the average annual wages of such full-time equivalent employees do exceed an amount equal to twice the dollar amount in effect under section 45R(d)(3)(B) of the Internal Revenue Code of 1986 for the taxable year, and if no employee of the employer who is enrolled in the qualified church plan receives premium tax credits or reductions in cost-sharing under subparagraph (F). (ii)

No exclusion from wages

Any employer participating in a qualified church plan shall not exclude from wages and other compensation, for any individual receiving premium tax credits under section 1401, any employer contribution for minimum essential coverage under a qualified church plan under section 106 of the Internal Revenue Code of 1986. (iii)

Employers participating in qualified church plans

Any employer participating in a qualified church plan shall be deemed to be a religious employer as defined in section 147.131 of title 45, Code of Federal Regulations. (F)

Premium tax credits, reductions in cost-sharing, and qualified church plans

An individual receiving minimum essential coverage under a qualified church plan— (i)shall be deemed to satisfy the individual responsibility requirements under section 5000A of the Internal Revenue Code of 1986; (ii)shall be deemed to qualify as an applicable taxpayer eligible to receive premium tax credits under section 1401, if the individual’s household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved; and (iii)shall be deemed to qualify as an eligible insured eligible to receive reductions in cost-sharing under section 1402(b), if the individual’s household income exceeds 100 percent but does not exceed 400 percent of the poverty line for a family of the size involved. (G)

Regulations

The Secretary and the Secretary of the Treasury shall promulgate regulations— (i)under subparagraph (E) to ensure that an eligible small employer offering a qualified church plan receives the same tax credit as any other eligible small employer under section 45R of the Internal Revenue Code of 1986; (ii)under subparagraph (F)(ii) to ensure that an applicable taxpayer receiving minimum essential coverage under a qualified church plan receives the same premium tax credit as any other applicable taxpayer under section 1401; (iii)under subparagraph (F)(iii) to ensure that an eligible insured receiving minimum essential coverage under a qualified church plan receives the same reduction in cost-sharing as any other eligible insured under section 1402; and (iv)providing church plans sufficient opportunity to make appropriate transitions in order to meet the definition of qualified church plan under subparagraph (B).

(b)

Effective date

The amendments made by this Act shall take effect as if enacted as part of the Patient Protection and Affordable Care Act (Public Law 111–148).