[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3067 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 3067
To amend title XVIII of the Social Security Act to reform Medicare
payments to physicians and certain other providers and improve Medicare
benefits, to encourage the offering of health coverage by small
businesses, to provide tax incentives for the purchase of health
insurance by individuals, to increase access to health care for
veterans, to address the nursing shortage, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 26, 2009
Mr. Latham introduced the following bill; which was referred to the
Committee on Energy and Commerce, and in addition to the Committees on
Education and Labor, Ways and Means, Veterans' Affairs, and Armed
Services, 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 amend title XVIII of the Social Security Act to reform Medicare
payments to physicians and certain other providers and improve Medicare
benefits, to encourage the offering of health coverage by small
businesses, to provide tax incentives for the purchase of health
insurance by individuals, to increase access to health care for
veterans, to address the nursing shortage, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Health Security
for All Americans Act of 2009''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MEDICARE
Sec. 101. Medicare physician payment update reform.
Sec. 102. Medicare GPCI floors.
Sec. 103. Annual physical examinations under Medicare.
Sec. 104. Medicare outreach campaign on availability of welcome to
Medicare physicals.
Sec. 105. Improvements to the medicare-dependent hospital (MDH)
program.
Sec. 106. Temporary improvements to the Medicare inpatient hospital
payment adjustment for low-volume
hospitals.
Sec. 107. Ensuring proportional representation of interests of rural
areas on MedPAC.
TITLE II--SMALL BUSINESS HEALTH PLANS
Subtitle A--Enhanced Marketplace Pools
Sec. 201. Rules governing enhanced marketplace pools.
``Part 8--Rules Governing Enhanced Marketplace Pools
``Sec. 801. Small business health plans.
``Sec. 802. Alternative Market Pooling Organizations.
``Sec. 803. Certification of small business health plans.
``Sec. 804. Requirements relating to sponsors and boards of
trustees.
``Sec. 805. Participation and coverage requirements.
``Sec. 806. Other requirements relating to plan documents,
contribution rates, and benefit options.
``Sec. 807. Requirements for application and related
requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Implementation and application authority by
Secretary.
``Sec. 810. Definitions and rules of construction.
Sec. 202. Cooperation between Federal and State authorities.
Sec. 203. Effective date and transitional and other rules.
Subtitle B--Market Relief
Sec. 211. Market relief.
``TITLE XXXI--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION
``Sec. 3101. General insurance definitions.
``Sec. 3102. Implementation and application authority by
Secretary.
``Subtitle A--Market Relief
``Part I--Rating Requirements
``Sec. 3111. Definitions.
``Sec. 3112. Rating rules.
``Sec. 3113. Application and preemption.
``Sec. 3114. Civil actions and jurisdiction.
``Sec. 3115. Ongoing review.
``Part II--Affordable Plans
``Sec. 3121. Definitions.
``Sec. 3122. Offering affordable plans.
``Sec. 3123. Application and preemption.
``Sec. 3124. Civil actions and jurisdiction.
``Sec. 3125. Rules of construction.
Subtitle C--Harmonization of Health Insurance Standards
Sec. 221. Health Insurance Standards Harmonization.
``Subtitle B--Standards Harmonization
``Sec. 3131. Definitions.
``Sec. 3132. Harmonized standards.
``Sec. 3133. Application and preemption.
``Sec. 3134. Civil actions and jurisdiction.
``Sec. 3135. Authorization of appropriations; rule of
construction.
TITLE III--TAX-RELATED HEALTH INCENTIVES
Sec. 301. SECA tax deduction for health insurance costs.
Sec. 302. Deduction for qualified health insurance costs of
individuals.
TITLE IV--INCREASING ACCESS TO VA HEALTH CARE
Sec. 401. Requirement for payments to facilities other than the
Department of Veterans Affairs for covered
health services.
Sec. 402. Authority of Department of Veterans Affairs pharmacies to
dispense medications to veterans on
prescriptions written by private
practitioners.
TITLE V--NURSING SHORTAGE
Sec. 501. Child care assistance for individuals pursuing advanced
nursing degrees.
Sec. 502. Nurse faculty program.
``Part E--Nurse Faculty Project
``Sec. 771. Purposes.
``Sec. 772. Assistance authorized.
``Sec. 773. Applications.
``Sec. 774. Authorization of appropriations.
``Sec. 775. Definition.
Sec. 503. Nurse Faculty Loan Repayment Program.
Sec. 504. Programs to increase the number of nurses within the Armed
Forces.
TITLE VI--RESERVE COMPONENTS OF THE ARMED FORCES
Sec. 601. Effective date of active duty for purposes of entitlement to
active duty health care of members of the
reserve components of the Armed Forces
receiving alert order anticipating a call
or order to active duty in support of a
contingency operation.
TITLE I--MEDICARE
SEC. 101. MEDICARE PHYSICIAN PAYMENT UPDATE REFORM.
(a) Substitution of MEI Increase for SGR Adjustments.--Section
1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) is amended--
(1) in paragraph (1)(A), by inserting ``and before 2010''
after ``beginning with 2001'';
(2) in paragraph (1)(A), by inserting before the period at
the end the following: ``, and for years beginning with 2010,
multiplied by the update established under paragraph (10)
applicable to the year involved''; and
(3) in paragraph (4)--
(A) in the heading by striking ``years beginning
with 2001'' and inserting ``2001, 2002, and 2003''; and
(B) in subparagraph (A), by inserting ``and ending
with 2003'' after ``beginning with 2001''; and
(4) by adding at the end the following new paragraph:
``(10) Update beginning with 2010.--The update to the
single conversion factor established in paragraph (1)(C) for
2010 and each succeeding year shall be the percentage increase
in the MEI (as defined in section 1842(i)(3)) for the year
involved minus 1 percentage point.''.
(b) Ending Application of Sustainable Growth Rate (SGR).--Section
1848(f)(1)(B) of such Act (42 U.S.C. 1395w-4(f)(1)(B)) is amended by
inserting ``(and before 2009)'' after ``each succeeding year''.
(c) Effective Date.--The amendments made by this section shall
apply to payment for services furnished on or after January 1, 2010.
SEC. 102. MEDICARE GPCI FLOORS.
Section 1848(e)(1) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)) is amended--
(1) in subparagraph (A), by striking ``and (G)'' and
inserting ``(G), (H), and (I)''; and
(2) by adding at the end the following new subparagraphs:
``(H) Floor at 1.0 for practice expense index.--
After calculating the practice expense index in
subparagraph (A)(ii), for purposes of payment for
services furnished on or after January 1, 2010, the
Secretary shall increase the practice expense
geographic index to 1.00 for any locality for which
such practice expense geographic index is less than
1.00.
``(I) Floor at 1.0 for work expenses index.--After
calculating the practice expense index in subparagraph
(A)(ii), for purposes of payment for services furnished
on or after January 1, 2010, the Secretary shall
increase the practice expense geographic index to 1.00
for any locality for which such practice expense
geographic index is less than 1.00.''.
SEC. 103. ANNUAL PHYSICAL EXAMINATIONS UNDER MEDICARE.
(a) In General.--Section 1861 of the Social Security Act (42 U.S.C.
1395x) is amended--
(1) in each of subparagraphs (W) and (AA)(i) of subsection
(s)(2), by striking ``initial'' and inserting ``annual'';
(2) in the heading of subsection (ww), by striking
``Initial'' and inserting ``Annual''; and
(3) by amending paragraph (1) of subsection (ww) to read as
follows:
``(1) The term `annual preventive physical examination'
means professional services of a physician, or of a nurse
practitioner or physician assistant which the practitioner or
assistant is authorized to provide under State law, consisting
of a physical examination (including, as medically appropriate,
measurement of height, weight, body mass index, and blood
pressure) with the goal of health promotion and disease
detection and includes education, counseling, and referral with
respect to screening and other preventive services described in
paragraph (2) and end-of-life planning (as defined in paragraph
(3)) upon the agreement with the individual, as well as related
clinical laboratory tests and such other preventive services in
connection with the same visit as the Secretary may provide
(taking into account services typically included in an annual
physical examination covered under private health benefit
plans).''.
(b) Modification of Exclusions.--Section 1862(a) of such Act (42
U.S.C. 1395y(a)) is amended--
(1) in paragraph (1), by amending subparagraph (K) to read
as follows:
``(K) in the case of an annual preventive physical
examination, which is performed for an individual more
frequently than once in any 12-month period,''; and
(2) in paragraph (7), by inserting ``(other than annual
preventive physical examinations)'' after ``routine physical
checkups''.
(c) Conforming Amendment.--Section 1833(b)(9) of such Act (42
U.S.C. 1395l(b)(9)) is amended by striking ``initial'' and inserting
``annual''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1 of the first year
beginning more than 60 days after the date of the enactment of this
Act.
SEC. 104. MEDICARE OUTREACH CAMPAIGN ON AVAILABILITY OF WELCOME TO
MEDICARE PHYSICALS.
(a) In General.--The Secretary of Health and Human Services shall
conduct a national campaign to provide information to the public on the
availability of an initial preventive physical examination (as defined
in section 1861(ww) of the Social Security Act (42 U.S.C. 1395x(ww)))
for beneficiaries of the Medicare program under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.).
(b) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $1,000,000 for each of fiscal
years 2010 through 2014.
SEC. 105. IMPROVEMENTS TO THE MEDICARE-DEPENDENT HOSPITAL (MDH)
PROGRAM.
(a) Use of Non-Wage Adjusted PPS Rate.--Section 1886(d)(5)(G) of
the Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended by
adding at the end the following new clause:
``(v) In the case of discharges occurring on or after October 1,
2010, and before October 1, 2012, in determining the amount under
paragraph (1)(A)(iii) for purposes of clauses (i) and (ii)(II), such
amount shall, if it results in greater payments to the hospital, be
determined without regard to any adjustment for different area wage
levels under paragraph (3)(E).''.
(b) Enhanced Payment for Amount by Which the Target Exceeds the PPS
Rate.--Section 1886(d)(5)(G)(ii)(II) of the Social Security Act (42
U.S.C. 1395ww(d)(5)(G)(ii)(II)) is amended by inserting ``, and before
October 1, 2010, or 85 percent in the case of discharges occurring on
or after October 1, 2010, and before October 1, 2012'' after ``October
1, 2011''.
SEC. 106. TEMPORARY IMPROVEMENTS TO THE MEDICARE INPATIENT HOSPITAL
PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS.
Section 1886(d)(12) of the Social Security Act (42 U.S.C.
1395ww(d)(12)) is amended--
(1) in subparagraph (A), by inserting ``or (D)'' after
``subparagraph (B)'';
(2) in subparagraph (B), by striking ``The Secretary'' and
inserting ``For discharges occurring in fiscal years 2005
through 2010 and for discharges occurring in fiscal year 2013
and subsequent fiscal years, the Secretary'';
(3) in subparagraph (C)(i)--
(A) by inserting ``(or, with respect to fiscal
years 2011 and 2012, 15 road miles)'' after ``25 road
miles''; and
(B) by inserting ``(or, with respect to fiscal
years 2011 and 2012, 2,000 discharges of individuals
entitled to, or enrolled for, benefits under part A)''
after ``800 discharges''; and
(4) by adding at the end the following new subparagraph:
``(D) Temporary applicable percentage increase.--
For discharges occurring in fiscal years 2011 or 2012,
the Secretary shall determine an applicable percentage
increase for purposes of subparagraph (A) using a
linear sliding scale ranging from 25 percent for low-
volume hospitals with fewer than an appropriate number
(as determined by the Secretary) of discharges of
individuals entitled to, or enrolled for, benefits
under part A in the fiscal year to 0 percent for low-
volume hospitals with greater than 2,000 discharges of
such individuals in the fiscal year.''.
SEC. 107. ENSURING PROPORTIONAL REPRESENTATION OF INTERESTS OF RURAL
AREAS ON MEDPAC.
(a) In General.--Section 1805(c)(2) of the Social Security Act (42
U.S.C. 1395b-6(c)(2)) is amended--
(1) in subparagraph (A), by inserting ``consistent with
subparagraph (E)'' after ``rural representatives''; and
(2) by adding at the end the following new subparagraph:
``(E) Proportional representation of interests of
rural areas.--In order to provide a balance between
urban and rural representatives under subparagraph (A),
the proportion of members of the Commission who
represent the interests of health care providers and
Medicare beneficiaries located in rural areas shall be
no less than the proportion of the total number of
Medicare beneficiaries who reside in rural areas.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to appointments to the Medicare Payment Advisory Commission made
after the date of enactment of this Act.
TITLE II--SMALL BUSINESS HEALTH PLANS
Subtitle A--Enhanced Marketplace Pools
SEC. 201. RULES GOVERNING ENHANCED MARKETPLACE POOLS.
(a) In General.--Subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended by adding after part 7 the
following new part:
``PART 8--RULES GOVERNING ENHANCED MARKETPLACE POOLS
``SEC. 801. SMALL BUSINESS HEALTH PLANS.
``(a) In General.--For purposes of this part, the term `small
business health plan' means a fully insured group health plan whose
sponsor is (or is deemed under this part to be) described in subsection
(b).
``(b) Sponsorship.--The 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 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;
``(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; and
``(4) does not condition membership on the basis of a
minimum group size.
Any sponsor consisting of an association of entities which meet the
requirements of paragraphs (1), (2), (3), and (4) shall be deemed to be
a sponsor described in this subsection.
``SEC. 802. ALTERNATIVE MARKET POOLING ORGANIZATIONS.
``(a) In General.--The Secretary, not later than 1 year after the
date of enactment of this part, shall promulgate regulations that apply
the rules and standards of this part, as necessary, to circumstances in
which a pooling entity other (hereinafter `Alternative Market Pooling
Organizations') is not made up principally of employers and their
employees, or not a professional organization or such small business
health plan entity identified in section 801.
``(b) Adaption of Standards.--In developing and promulgating
regulations pursuant to subsection (a), the Secretary, in consultation
with the Secretary of Health and Human Services, small business health
plans, small and large employers, large and small insurance issuers,
consumer representatives, and state insurance commissioners, shall--
``(1) adapt the standards of this part, to the maximum
degree practicable, to assure balanced and comparable oversight
standards for both small business health plans and alternative
market pooling organizations;
``(2) permit the participation as alternative market
pooling organizations unions, churches and other faith-based
organizations, or other organizations composed of individuals
and groups which may have little or no association with
employment, provided however, that such alternative market
pooling organizations meet, and continue meeting on an ongoing
basis, to satisfy standards, rules, and requirements materially
equivalent to those set forth in this part with respect to
small business health plans;
``(3) conduct periodic verification of such compliance by
alternative market pooling organizations, in consultation with
the Secretary of Health and Human Services and the National
Association of Insurance Commissioners, except that such
periodic verification shall not materially impede market entry
or participation as pooling entities comparable to that of
small business health plans;
``(4) assure that consistent, clear, and regularly
monitored standards are applied with respect to alternative
market pooling organizations to avert material risk-selection
within or among the composition of such organizations;
``(5) the expedited and deemed certification procedures
provided in section 805(d) shall not apply to alternative
market pooling organizations until sooner of the promulgation
of regulations under this subsection or the expiration of one
year following enactment of this Act; and
``(6) make such other appropriate adjustments to the
requirements of this part as the Secretary may reasonably deem
appropriate to fit the circumstances of an individual
alternative market pooling organization or category of such
organization, including but not limited to the application of
the membership payment requirements of section 801(b)(2) to
alternative market pooling organizations composed primarily of
church- or faith-based membership.
``SEC. 803. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.
``(a) In General.--Not later than 6 months after the date of
enactment of this part, the applicable authority shall prescribe by
interim final rule a procedure under which the applicable authority
shall certify small business health plans which apply for certification
as meeting the requirements of this part.
``(b) Requirements Applicable to Certified Plans.--A small business
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).
``(c) Requirements for Continued Certification.--The applicable
authority may provide by regulation for continued certification of
small business health plans under this part. Such regulation shall
provide for the revocation of a certification if the applicable
authority finds that the small business health plan involved is failing
to comply with the requirements of this part.
``(d) Expedited and Deemed Certification.--
``(1) In general.--If the Secretary fails to act on an
application for certification under this section within 90 days
of receipt of such application, the applying small business
health plan shall be deemed certified until such time as the
Secretary may deny for cause the application for certification.
``(2) Civil penalty.--The Secretary may assess a civil
penalty against the board of trustees and plan sponsor (jointly
and severally) of a small business health plan that is deemed
certified under paragraph (1) of up to $500,000 in the event
the Secretary determines that the application for certification
of such small business health plan was willfully or with gross
negligence incomplete or inaccurate.
``SEC. 804. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met with
respect to a small business 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 Trustees.--The requirements of this subsection are
met with respect to a small business health plan if the following
requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
plan document, by a board of trustees which pursuant to a trust
agreement has complete fiscal control over the plan and which
is responsible for all operations of the plan.
``(2) Rules of operation and financial controls.--The 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 general.--Except 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 rule.--Except 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 sponsor.--Officers 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 care.--In 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 excluded.--Clause (i)
shall not apply to a small business health plan
which is in existence on the date of the
enactment of this part.
``(B) Sole authority.--The board has sole authority
under the plan to approve applications for
participation in the plan and to contract with
insurers.
``(c) Treatment of Franchises.--In the case of a group health plan
which is established and maintained by a franchiser for a franchisor or
for 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 franchisor were deemed to be the sponsor referred to in
section 801(b) and each franchisee were deemed to be a member
(of the sponsor) referred to in section 801(b); and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
For purposes of this subsection the terms `franchisor' and `franchisee'
shall have the meanings given such terms for purposes of sections
436.2(a) through 436.2(c) of title 16, Code of Federal Regulations
(including any such amendments to such regulation after the date of
enactment of this part).
``SEC. 805. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements of this
subsection are met with respect to a small business 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, 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 dependents of individuals described in
subparagraph (A).
``(b) Individual Market Unaffected.--The requirements of this
subsection are met with respect to a small business 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.
``(c) Prohibition of Discrimination Against Employers and Employees
Eligible To Participate.--The requirements of this subsection are met
with respect to a small business 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) information regarding all coverage options available
under the plan is made readily available to any employer
eligible to participate; and
``(3) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan.
``SEC. 806. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION
RATES, AND BENEFIT OPTIONS.
``(a) In General.--The requirements of this section are met with
respect to a small business health plan if the following requirements
are met:
``(1) Contents of governing instruments.--
``(A) In general.--The instruments governing the
plan include a written instrument, meeting the
requirements of an instrument required under section
402(a)(1), which--
``(i) 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)); and
``(ii) provides that the sponsor of the
plan is to serve as plan sponsor (referred to
in section 3(16)(B)).
``(B) Description of material provisions.--The
terms of the health insurance coverage (including the
terms of any individual certificates that may be
offered to individuals in connection with such
coverage) describe the material benefit and rating, and
other provisions set forth in this section and such
material provisions are included in the summary plan
description.
``(2) Contribution rates must be nondiscriminatory.--
``(A) In general.--The contribution rates for any
participating small employer shall not vary on the
basis of any health status-related factor in relation
to employees of such employer or their beneficiaries
and shall not vary on the basis of the type of business
or industry in which such employer is engaged, subject
to subparagraph (B) and the terms of this title.
``(B) Effect of title.--Nothing in this title or
any other provision of law shall be construed to
preclude a health insurance issuer offering health
insurance coverage in connection with a small business
health plan that meets the requirements of this part,
and at the request of such small business health plan,
from--
``(i) setting contribution rates for the
small business health plan based on the claims
experience of the small business health plan so
long as any variation in such rates for
participating small employers complies with the
requirements of clause (ii), except that small
business health plans shall not be subject, in
nonadopting States, to subparagraphs (A)(ii)
and (C) of section 2912(a)(2) of the Public
Health Service Act, and in adopting States, to
any State law that would have the effect of
imposing requirements as outlined in such
subparagraphs (A)(ii) and (C); or
``(ii) varying contribution rates for
participating small employers in a small
business health plan in a State to the extent
that such rates could vary using the same
methodology employed in such State for
regulating small group premium rates, subject
to the terms of part I of subtitle A of title
XXXI of the Public Health Service Act (relating
to rating requirements), as added by subtitle B
of title II of the Health Security for All
Americans Act of 2009.
``(3) Exceptions regarding self-employed and large
employers.--
``(A) Self-employed.--
``(i) In general.--Small business health
plans with participating employers who are
self-employed individuals (and their
dependents) shall enroll such self-employed
participating employers in accordance with
rating rules that do not violate the rating
rules for self-employed individuals in the
State in which such self-employed participating
employers are located.
``(ii) Guarantee issue.--Small business
health plans with participating employers who
are self-employed individuals (and their
dependents) may decline to guarantee issue to
such participating employers in States in which
guarantee issue is not otherwise required for
the self-employed in that State.
``(B) Large employers.--Small business health plans
with participating employers that are larger than small
employers (as defined in section 808(a)(10)) shall
enroll such large participating employers in accordance
with rating rules that do not violate the rating rules
for large employers in the State in which such large
participating employers are located.
``(4) Regulatory requirements.--Such 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 Small Business Health Plans To Design Benefit
Options.--Nothing in this part or any provision of State law (as
defined in section 514(c)(1)) shall be construed to preclude a small
business health plan or a health insurance issuer offering health
insurance coverage in connection with a small business health plan from
exercising its sole discretion in selecting the specific benefits and
services consisting of medical care to be included as benefits under
such plan or coverage, except that such benefits and services must meet
the terms and specifications of part II of subtitle A of title XXXI of
the Public Health Service Act (relating to lower cost plans), as added
by subtitle B of title II of the Health Security for All Americans Act
of 2009.
``(c) Domicile and Non-domicile States.--
``(1) Domicile state.--Coverage shall be issued to a small
business health plan in the State in which the sponsor's
principal place of business is located.
``(2) Non-domicile states.--With respect to a State (other
than the domicile State) in which participating employers of a
small business health plan are located but in which the insurer
of the small business health plan in the domicile State is not
yet licensed, the following shall apply:
``(A) Temporary preemption.--If, upon the
expiration of the 90-day period following the
submission of a licensure application by such insurer
(that includes a certified copy of an approved
licensure application as submitted by such insurer in
the domicile State) to such State, such State has not
approved or denied such application, such State's
health insurance licensure laws shall be temporarily
preempted and the insurer shall be permitted to operate
in such State, subject to the following terms:
``(i) Application of non-domicile state
law.--Except with respect to licensure and with
respect to the terms of subtitle A of title
XXXI of the Public Health Service Act (relating
to rating and benefits as added by subtitle B
of title II of the Health Security for All
Americans Act of 2009), the laws and authority
of the non-domicile State shall remain in full
force and effect.
``(ii) Revocation of preemption.--The
preemption of a non-domicile State's health
insurance licensure laws pursuant to this
subparagraph, shall be terminated upon the
occurrence of either of the following:
``(I) Approval or denial of
application.--The approval of denial of
an insurer's licensure application,
following the laws and regulations of
the non-domicile State with respect to
licensure.
``(II) Determination of material
violation.--A determination by a non-
domicile State that an insurer
operating in a non-domicile State
pursuant to the preemption provided for
in this subparagraph is in material
violation of the insurance laws (other
than licensure and with respect to the
terms of subtitle A of title XXXI of
the Public Health Service Act (relating
to rating and benefits added by
subtitle B of title II of the Health
Security for All Americans Act of
2009)) of such State.
``(B) No prohibition on promotion.--Nothing in this
paragraph shall be construed to prohibit a small
business health plan or an insurer from promoting
coverage prior to the expiration of the 90-day period
provided for in subparagraph (A), except that no
enrollment or collection of contributions shall occur
before the expiration of such 90-day period.
``(C) Licensure.--Except with respect to the
application of the temporary preemption provision of
this paragraph, nothing in this part shall be construed
to limit the requirement that insurers issuing coverage
to small business health plans shall be licensed in
each State in which the small business health plans
operate.
``(D) Servicing by licensed insurers.--
Notwithstanding subparagraph (C), the requirements of
this subsection may also be satisfied if the
participating employers of a small business health plan
are serviced by a licensed insurer in that State, even
where such insurer is not the insurer of such small
business health plan in the State in which such small
business health plan is domiciled.
``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.
``(a) Filing Fee.--Under the procedure prescribed pursuant to
section 802(a), a small business 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 small business
health plans.
``(b) Information To Be Included in Application for
Certification.--An 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 information.--The 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 business.--The
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 requirements.--Evidence 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 documents.--A 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 providers.--A copy of any
agreements between the plan, health insurance issuer, and
contract administrators and other service providers.
``(c) Filing Notice of Certification With States.--A certification
granted under this part to a small business health plan shall not be
effective unless written notice of such certification is filed with the
applicable State authority of each State in which the small business
health plans operate.
``(d) Notice of Material Changes.--In the case of any small
business 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.
``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
``A small business 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.
``SEC. 809. IMPLEMENTATION AND APPLICATION AUTHORITY BY SECRETARY.
``The Secretary shall, through promulgation and implementation of
such regulations as the Secretary may reasonably determine necessary or
appropriate, and in consultation with a balanced spectrum of effected
entities and persons, modify the implementation and application of this
part to accommodate with minimum disruption such changes to State or
Federal law provided in this part and the (and the amendments made by
such Act) or in regulations issued thereto.
``SEC. 810. DEFINITIONS AND RULES OF CONSTRUCTION.
``(a) Definitions.--For purposes of this part--
``(1) Affiliated member.--The 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, or
``(B) in the case of a sponsor with members which
consist of associations, a person who is a member or
employee of any such association and elects an
affiliated status with the sponsor.
``(2) Applicable authority.--The term `applicable
authority' means the Secretary of Labor, except that, in
connection with any exercise of the Secretary's authority with
respect to which the Secretary is required under section 506(d)
to consult with a State, such term means the Secretary, in
consultation with such State.
``(3) Applicable state authority.--The 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.
``(4) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1) (after applying
subsection (b) of this section).
``(5) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1), except that such term shall not include excepted
benefits (as defined in section 733(c)).
``(6) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(7) Individual market.--
``(A) In general.--The 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 general.--Subject 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 exception.--Clause (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) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(9) Participating employer.--The term `participating
employer' means, in connection with a small business 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.
``(10) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, a small employer as defined in section 2791(e)(4).
``(11) Trade association and professional association.--The
terms `trade association' and `professional association' mean
an entity that meets the requirements of section 1.501(c)(6)-1
of title 26, Code of Federal Regulations (as in effect on the
date of enactment of this Act).
``(b) Rule of Construction.--For purposes of determining whether a
plan, fund, or program is an employee welfare benefit plan which is a
small business 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--
``(1) 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
``(2) 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.
``(c) Renewal.--Notwithstanding any provision of law to the
contrary, a participating employer in a small business health plan
shall not be deemed to be a plan sponsor in applying requirements
relating to coverage renewal.
``(d) Health Savings Accounts.--Nothing in this part shall be
construed to create any mandates for coverage of benefits for HSA-
qualified health plans that would require reimbursements in violation
of section 223(c)(2) of the Internal Revenue Code of 1986.''.
(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 a small business 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 a health insurance issuer from offering
health insurance coverage in connection with a small business health
plan which is certified under part 8.
``(2) In any case in which health insurance coverage of any policy
type is offered under a small business 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 establish rating and benefit requirements that would otherwise
apply to such coverage, provided the requirements of subtitle A of
title XXXI of the Public Health Service Act (as added by title II of
the Health Security for All Americans Act of 2009) (concerning health
plan rating and benefits) are met.''.
(c) Plan Sponsor.--Section 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 a small
business health plan under part 8.''.
(d) Savings Clause.--Section 731(c) of such Act is amended by
inserting ``or part 8'' after ``this part''.
(e) Clerical Amendment.--The 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 Small Business Health Plans
``801. Small business health plans.
``802. Alternative market pooling organizations.
``803. Certification of small business health plans.
``804. Requirements relating to sponsors and boards of trustees.
``805. Participation and coverage requirements.
``806. Other requirements relating to plan documents, contribution
rates, and benefit options.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Implementation and application authority by Secretary.
``810. Definitions and rules of construction.''.
SEC. 202. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 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 Small Business
Health Plans.--
``(1) Agreements with states.--The Secretary shall consult
with the State recognized under paragraph (2) with respect to a
small business 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 small
business health plans under part 8 in accordance with
regulations of the Secretary applicable to
certification under part 8.
``(2) Recognition of domicile state.--In carrying out
paragraph (1), the Secretary shall ensure that only one State
will be recognized, with respect to any particular small
business health plan, as the State with which consultation is
required. In carrying out this paragraph such State shall be
the domicile State, as defined in section 805(c).''.
SEC. 203. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.
(a) Effective Date.--The amendments made by this subtitle shall
take effect 12 months 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 6 months after the date
of the enactment of this Act.
(b) Treatment of Certain Existing Health Benefits Programs.--
(1) In general.--In 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 808(a)(2)
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 trustees which has control over 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 or
at such time that the arrangement provides coverage to
participants and beneficiaries in any State other than the
States in which coverage is provided on such date of enactment.
(2) Definitions.--For purposes of this subsection, the
terms ``group health plan'', ``medical care'', and
``participating employer'' shall have the meanings provided in
section 808 of the Employee Retirement Income Security Act of
1974, except that the reference in paragraph (7) of such
section to an ``small business health plan'' shall be deemed a
reference to an arrangement referred to in this subsection.
Subtitle B--Market Relief
SEC. 211. MARKET RELIEF.
The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by
adding at the end the following:
``TITLE XXXI--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION
``SEC. 3101. GENERAL INSURANCE DEFINITIONS.
``In this title, the terms `health insurance coverage', `health
insurance issuer', `group health plan', and `individual health
insurance' shall have the meanings given such terms in section 2791.
``SEC. 3102. IMPLEMENTATION AND APPLICATION AUTHORITY BY SECRETARY.
``The Secretary shall, through promulgation and implementation of
such regulations as the Secretary may reasonably determine necessary or
appropriate, and in consultation with a balanced spectrum of effected
entities and persons, modify the implementation and application of this
title to accommodate with minimum disruption such changes to State or
Federal law provided in this title and the (and the amendments made by
such Act) or in regulations issued thereto.
``Subtitle A--Market Relief
``PART I--RATING REQUIREMENTS
``SEC. 3111. DEFINITIONS.
``In this part:
``(1) Adopting state.--The term `adopting State' means a
State that, with respect to the small group market, has enacted
small group rating rules that meet the minimum standards set
forth in section 3112(a)(1) or, as applicable, transitional
small group rating rules set forth in section 3112(b).
``(2) Applicable state authority.--The 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 insurance
laws of such State.
``(3) Base premium rate.--The term `base premium rate'
means, for each class of business with respect to a rating
period, the lowest premium rate charged or that could have been
charged under a rating system for that class of business by the
small employer carrier to small employers with similar case
characteristics for health benefit plans with the same or
similar coverage.
``(4) Eligible insurer.--The term `eligible insurer' means
a health insurance issuer that is licensed in a State and
that--
``(A) notifies the Secretary, not later than 30
days prior to the offering of coverage described in
this subparagraph, that the issuer intends to offer
health insurance coverage consistent with the Model
Small Group Rating Rules or, as applicable,
transitional small group rating rules in a State;
``(B) notifies the insurance department of a
nonadopting State (or other State agency), not later
than 30 days prior to the offering of coverage
described in this subparagraph, that the issuer intends
to offer small group health insurance coverage in that
State consistent with the Model Small Group Rating
Rules, and provides with such notice a copy of any
insurance policy that it intends to offer in the State,
its most recent annual and quarterly financial reports,
and any other information required to be filed with the
insurance department of the State (or other State
agency); and
``(C) includes in the terms of the health insurance
coverage offered in nonadopting States (including in
the terms of any individual certificates that may be
offered to individuals in connection with such group
health coverage) and filed with the State pursuant to
subparagraph (B), a description in the insurer's
contract of the Model Small Group Rating Rules and an
affirmation that such Rules are included in the terms
of such contract.
``(5) Health insurance coverage.--The term `health
insurance coverage' means any coverage issued in the small
group health insurance market, except that such term shall not
include excepted benefits (as defined in section 2791(c)).
``(6) Index rate.--The term `index rate' means for each
class of business with respect to the rating period for small
employers with similar case characteristics, the arithmetic
average of the applicable base premium rate and the
corresponding highest premium rate.
``(7) Model small group rating rules.--The term `Model
Small Group Rating Rules' means the rules set forth in section
3112(a)(2).
``(8) Nonadopting state.--The term `nonadopting State'
means a State that is not an adopting State.
``(9) Small group insurance market.--The term `small group
insurance market' shall have the meaning given the term `small
group market' in section 2791(e)(5).
``(10) State law.--The term `State law' means all laws,
decisions, rules, regulations, or other State actions
(including actions by a State agency) having the effect of law,
of any State.
``(11) Variation limits.--
``(A) Composite variation limit.--
``(i) In general.--The term `composite
variation limit' means the total variation in
premium rates charged by a health insurance
issuer in the small group market as permitted
under applicable State law based on the
following factors or case characteristics:
``(I) Age.
``(II) Duration of coverage.
``(III) Claims experience.
``(IV) Health status.
``(ii) Use of factors.--With respect to the
use of the factors described in clause (i) in
setting premium rates, a health insurance
issuer shall use one or both of the factors
described in subclauses (I) or (IV) of such
clause and may use the factors described in
subclauses (II) or (III) of such clause.
``(B) Total variation limit.--The term `total
variation limit' means the total variation in premium
rates charged by a health insurance issuer in the small
group market as permitted under applicable State law
based on all factors and case characteristics (as
described in section 3112(a)(1)).
``SEC. 3112. RATING RULES.
``(a) Establishment of Minimum Standards for Premium Variations and
Model Small Group Rating Rules.--Not later than 6 months after the date
of enactment of this title, the Secretary shall promulgate regulations
establishing the following Minimum Standards and Model Small Group
Rating Rules:
``(1) Minimum standards for premium variations.--
``(A) Composite variation limit.--The composite
variation limit shall not be less than 3:1.
``(B) Total variation limit.--The total variation
limit shall not be less than 5:1.
``(C) Prohibition on use of certain case
characteristics.--For purposes of this paragraph, in
calculating the total variation limit, the State shall
not use case characteristics other than those used in
calculating the composite variation limit and industry,
geographic area, group size, participation rate, class
of business, and participation in wellness programs.
``(2) Model small group rating rules.--The following apply
to an eligible insurer in a nonadopting State:
``(A) Premium rates.--Premium rates for small group
health benefit plans to which this title applies shall
comply with the following provisions relating to
premiums, except as provided for under subsection (b):
``(i) Variation in premium rates.--The plan
may not vary premium rates by more than the
minimum standards provided for under paragraph
(1).
``(ii) Index rate.--The index rate for a
rating period for any class of business shall
not exceed the index rate for any other class
of business by more than 20 percent, excluding
those classes of business related to
association groups under this title.
``(iii) Class of businesses.--With respect
to a class of business, the premium rates
charged during a rating period to small
employers with similar case characteristics for
the same or similar coverage or the rates that
could be charged to such employers under the
rating system for that class of business, shall
not vary from the index rate by more than 25
percent of the index rate under clause (ii).
``(iv) Increases for new rating periods.--
The percentage increase in the premium rate
charged to a small employer for a new rating
period may not exceed the sum of the following:
``(I) The percentage change in the
new business premium rate measured from
the first day of the prior rating
period to the first day of the new
rating period. In the case of a health
benefit plan into which the small
employer carrier is no longer enrolling
new small employers, the small employer
carrier shall use the percentage change
in the base premium rate, except that
such change shall not exceed, on a
percentage basis, the change in the new
business premium rate for the most
similar health benefit plan into which
the small employer carrier is actively
enrolling new small employers.
``(II) Any adjustment, not to
exceed 15 percent annually and adjusted
pro rata for rating periods of less
then 1 year, due to the claim
experience, health status or duration
of coverage of the employees or
dependents of the small employer as
determined from the small employer
carrier's rate manual for the class of
business involved.
``(III) Any adjustment due to
change in coverage or change in the
case characteristics of the small
employer as determined from the small
employer carrier's rate manual for the
class of business.
``(v) Uniform application of adjustments.--
Adjustments in premium rates for claim
experience, health status, or duration of
coverage shall not be charged to individual
employees or dependents. Any such adjustment
shall be applied uniformly to the rates charged
for all employees and dependents of the small
employer.
``(vi) Prohibition on use of certain case
characteristic.--A small employer carrier shall
not utilize case characteristics, other than
those permitted under paragraph (1)(C), without
the prior approval of the applicable State
authority.
``(vii) Consistent application of
factors.--Small employer carriers shall apply
rating factors, including case characteristics,
consistently with respect to all small
employers in a class of business. Rating
factors shall produce premiums for identical
groups which differ only by the amounts
attributable to plan design and do not reflect
differences due to the nature of the groups
assumed to select particular health benefit
plans.
``(viii) Treatment of plans as having same
rating period.--A small employer carrier shall
treat all health benefit plans issued or
renewed in the same calendar month as having
the same rating period.
``(ix) Require compliance.--Premium rates
for small business health benefit plans shall
comply with the requirements of this subsection
notwithstanding any assessments paid or payable
by a small employer carrier as required by a
State's small employer carrier reinsurance
program.
``(B) Establishment of separate class of
business.--Subject to subparagraph (C), a small
employer carrier may establish a separate class of
business only to reflect substantial differences in
expected claims experience or administrative costs
related to the following:
``(i) The small employer carrier uses more
than one type of system for the marketing and
sale of health benefit plans to small
employers.
``(ii) The small employer carrier has
acquired a class of business from another small
employer carrier.
``(iii) The small employer carrier provides
coverage to one or more association groups that
meet the requirements of this title.
``(C) Limitation.--A small employer carrier may
establish up to 9 separate classes of business under
subparagraph (B), excluding those classes of business
related to association groups under this title.
``(D) Limitation on transfers.--A small employer
carrier shall not transfer a small employer
involuntarily into or out of a class of business. A
small employer carrier shall not offer to transfer a
small employer into or out of a class of business
unless such offer is made to transfer all small
employers in the class of business without regard to
case characteristics, claim experience, health status
or duration of coverage since issue.
``(b) Transitional Model Small Group Rating Rules.--
``(1) In general.--Not later than 6 months after the date
of enactment of this title and to the extent necessary to
provide for a graduated transition to the minimum standards for
premium variation as provided for in subsection (a)(1), the
Secretary, in consultation with the National Association of
Insurance Commissioners (NAIC), shall promulgate State-specific
transitional small group rating rules in accordance with this
subsection, which shall be applicable with respect to
nonadopting States and eligible insurers operating in such
States for a period of not to exceed 3 years from the date of
the promulgation of the minimum standards for premium variation
pursuant to subsection (a).
``(2) Compliance with transitional model small group rating
rules.--During the transition period described in paragraph
(1), a State that, on the date of enactment of this title, has
in effect a small group rating rules methodology that allows
for a variation that is less than the variation provided for
under subsection (a)(1) (concerning minimum standards for
premium variation), shall be deemed to be an adopting State if
the State complies with the transitional small group rating
rules as promulgated by the Secretary pursuant to paragraph
(1).
``(3) Transitioning of old business.--
``(A) In general.--In developing the transitional
small group rating rules under paragraph (1), the
Secretary shall, after consultation with the National
Association of Insurance Commissioners and
representatives of insurers operating in the small
group health insurance market in nonadopting States,
promulgate special transition standards with respect to
independent rating classes for old and new business, to
the extent reasonably necessary to protect health
insurance consumers and to ensure a stable and fair
transition for old and new market entrants.
``(B) Period for operation of independent rating
classes.--In developing the special transition
standards pursuant to subparagraph (A), the Secretary
shall permit a carrier in a nonadopting State, at its
option, to maintain independent rating classes for old
and new business for a period of up to 5 years, with
the commencement of such 5-year period to begin at such
time, but not later than the date that is 3 years after
the date of enactment of this title, as the carrier
offers a book of business meeting the minimum standards
for premium variation provided for in subsection (a)(1)
or the transitional small group rating rules under
paragraph (1).
``(4) Other transitional authority.--In developing the
transitional small group rating rules under paragraph (1), the
Secretary shall provide for the application of the transitional
small group rating rules in transition States as the Secretary
may determine necessary for a an effective transition.
``(c) Market Re-entry.--
``(1) In general.--Notwithstanding any other provision of
law, a health insurance issuer that has voluntarily withdrawn
from providing coverage in the small group market prior to the
date of enactment of this title shall not be excluded from re-
entering such market on a date that is more than 180 days after
such date of enactment.
``(2) Termination.--The provision of this subsection shall
terminate on the date that is 24 months after the date of
enactment of this title.
``SEC. 3113. APPLICATION AND PREEMPTION.
``(a) Superseding of State Law.--
``(1) In general.--This part shall supersede any and all
State laws of a nonadopting State insofar as such State laws
(whether enacted prior to or after the date of enactment of
this subtitle) relate to rating in the small group insurance
market as applied to an eligible insurer, or small group health
insurance coverage issued by an eligible insurer, including
with respect to coverage issued to a small employer through a
small business health plan, in a State.
``(2) Nonadopting states.--This part shall supersede any
and all State laws of a nonadopting State insofar as such State
laws (whether enacted prior to or after the date of enactment
of this subtitle)--
``(A) prohibit an eligible insurer from offering,
marketing, or implementing small group health insurance
coverage consistent with the Model Small Group Rating
Rules or transitional model small group rating rules;
or
``(B) have the effect of retaliating against or
otherwise punishing in any respect an eligible insurer
for offering, marketing, or implementing small group
health insurance coverage consistent with the Model
Small Group Rating Rules or transitional model small
group rating rules.
``(b) Savings Clause and Construction.--
``(1) Nonapplication to adopting states.--Subsection (a)
shall not apply with respect to adopting states.
``(2) Nonapplication to certain insurers.--Subsection (a)
shall not apply with respect to insurers that do not qualify as
eligible insurers that offer small group health insurance
coverage in a nonadopting State.
``(3) Nonapplication where obtaining relief under state
law.--Subsection (a)(1) shall not supercede any State law in a
nonadopting State to the extent necessary to permit individuals
or the insurance department of the State (or other State
agency) to obtain relief under State law to require an eligible
insurer to comply with the Model Small Group Rating Rules or
transitional model small group rating rules.
``(4) No effect on preemption.--In no case shall this part
be construed to limit or affect in any manner the preemptive
scope of sections 502 and 514 of the Employee Retirement Income
Security Act of 1974. In no case shall this part be construed
to create any cause of action under Federal or State law or
enlarge or affect any remedy available under the Employee
Retirement Income Security Act of 1974.
``(5) Preemption limited to rating.--Subsection (a) shall
not preempt any State law that does not have a reference to or
a connection with State rating rules that would otherwise apply
to eligible insurers.
``(c) Effective Date.--This section shall apply, at the election of
the eligible insurer, beginning in the first plan year or the first
calendar year following the issuance of the final rules by the
Secretary under the Model Small Group Rating Rules or, as applicable,
the Transitional Model Small Group Rating Rules, but in no event
earlier than the date that is 12 months after the date of enactment of
this title.
``SEC. 3114. CIVIL ACTIONS AND JURISDICTION.
``(a) In General.--The courts of the United States shall have
exclusive jurisdiction over civil actions involving the interpretation
of this part.
``(b) Actions.--An eligible insurer may bring an action in the
district courts of the United States for injunctive or other equitable
relief against any officials or agents of a nonadopting State in
connection with any conduct or action, or proposed conduct or action,
by such officials or agents which violates, or which would if
undertaken violate, section 3113.
``(c) Direct Filing in Court of Appeals.--At the election of the
eligible insurer, an action may be brought under subsection (b)
directly in the United States Court of Appeals for the circuit in which
the nonadopting State is located by the filing of a petition for review
in such Court.
``(d) Expedited Review.--
``(1) District court.--In the case of an action brought in
a district court of the United States under subsection (b),
such court shall complete such action, including the issuance
of a judgment, prior to the end of the 120-day period beginning
on the date on which such action is filed, unless all parties
to such proceeding agree to an extension of such period.
``(2) Court of appeals.--In the case of an action brought
directly in a United States Court of Appeal under subsection
(c), or in the case of an appeal of an action brought in a
district court under subsection (b), such Court shall complete
all action on the petition, including the issuance of a
judgment, prior to the end of the 60-day period beginning on
the date on which such petition is filed with the Court, unless
all parties to such proceeding agree to an extension of such
period.
``(e) Standard of Review.--A court in an action filed under this
section, shall render a judgment based on a review of the merits of all
questions presented in such action and shall not defer to any conduct
or action, or proposed conduct or action, of a nonadopting State.
``SEC. 3115. ONGOING REVIEW.
``Not later than 5 years after the date on which the Model Small
Group Rating Rules are issued under this part, and every 5 years
thereafter, the Secretary, in consultation with the National
Association of Insurance Commissioners, shall prepare and submit to the
appropriate committees of Congress a report that assesses the effect of
the Model Small Group Rating Rules on access, cost, and market
functioning in the small group market. Such report may, if the
Secretary, in consultation with the National Association of Insurance
Commissioners, determines such is appropriate for improving access,
costs, and market functioning, contain legislative proposals for
recommended modification to such Model Small Group Rating Rules.
``PART II--AFFORDABLE PLANS
``SEC. 3121. DEFINITIONS.
``In this part:
``(1) Adopting state.--The term `adopting State' means a
State that has enacted a law providing that small group,
individual, and large group health insurers in such State may
offer and sell products in accordance with the List of Required
Benefits and the Terms of Application as provided for in
section 3122(b).
``(2) Eligible insurer.--The term `eligible insurer' means
a health insurance issuer that is licensed in a nonadopting
State and that--
``(A) notifies the Secretary, not later than 30
days prior to the offering of coverage described in
this subparagraph, that the issuer intends to offer
health insurance coverage consistent with the List of
Required Benefits and Terms of Application in a
nonadopting State;
``(B) notifies the insurance department of a
nonadopting State (or other applicable State agency),
not later than 30 days prior to the offering of
coverage described in this subparagraph, that the
issuer intends to offer health insurance coverage in
that State consistent with the List of Required
Benefits and Terms of Application, and provides with
such notice a copy of any insurance policy that it
intends to offer in the State, its most recent annual
and quarterly financial reports, and any other
information required to be filed with the insurance
department of the State (or other State agency) by the
Secretary in regulations; and
``(C) includes in the terms of the health insurance
coverage offered in nonadopting States (including in
the terms of any individual certificates that may be
offered to individuals in connection with such group
health coverage) and filed with the State pursuant to
subparagraph (B), a description in the insurer's
contract of the List of Required Benefits and a
description of the Terms of Application, including a
description of the benefits to be provided, and that
adherence to such standards is included as a term of
such contract.
``(3) Health insurance coverage.--The term `health
insurance coverage' means any coverage issued in the small
group, individual, or large group health insurance markets,
including with respect to small business health plans, except
that such term shall not include excepted benefits (as defined
in section 2791(c)).
``(4) List of required benefits.--The term `List of
Required Benefits' means the list issued under section 3122(a).
``(5) Nonadopting state.--The term `nonadopting State'
means a State that is not an adopting State.
``(6) State law.--The term `State law' means all laws,
decisions, rules, regulations, or other State actions
(including actions by a State agency) having the effect of law,
of any State.
``(7) State provider freedom of choice law.--The term
`State Provider Freedom of Choice Law' means a State law
requiring that a health insurance issuer, with respect to
health insurance coverage, not discriminate with respect to
participation, reimbursement, or indemnification as to any
provider who is acting within the scope of the provider's
license or certification under applicable State law.
``(8) Terms of application.--The term `Terms of
Application' means terms provided under section 3122(a).
``SEC. 3122. OFFERING AFFORDABLE PLANS.
``(a) List of Required Benefits.--Not later than 3 months after the
date of enactment of this title, the Secretary, in consultation with
the National Association of Insurance Commissioners, shall issue by
interim final rule a list (to be known as the `List of Required
Benefits') of covered benefits, services, or categories of providers
that are required to be provided by health insurance issuers, in each
of the small group, individual, and large group markets, in at least 26
States as a result of the application of State covered benefit,
service, and category of provider mandate laws. With respect to plans
sold to or through small business health plans, the List of Required
Benefits applicable to the small group market shall apply.
``(b) Terms of Application.--
``(1) State with mandates.--With respect to a State that
has a covered benefit, service, or category of provider mandate
in effect that is covered under the List of Required Benefits
under subsection (a), such State mandate shall, subject to
paragraph (3) (concerning uniform application), apply to a
coverage plan or plan in, as applicable, the small group,
individual, or large group market or through a small business
health plan in such State.
``(2) States without mandates.--With respect to a State
that does not have a covered benefit, service, or category of
provider mandate in effect that is covered under the List of
Required Benefits under subsection (a), such mandate shall not
apply, as applicable, to a coverage plan or plan in the small
group, individual, or large group market or through a small
business health plan in such State.
``(3) Uniform application of laws.--
``(A) In general.--With respect to a State
described in paragraph (1), in applying a covered
benefit, service, or category of provider mandate that
is on the List of Required Benefits under subsection
(a) the State shall permit a coverage plan or plan
offered in the small group, individual, or large group
market or through a small business health plan in such
State to apply such benefit, service, or category of
provider coverage in a manner consistent with the
manner in which such coverage is applied under one of
the three most heavily subscribed national health plans
offered under the Federal Employee Health Benefits
Program under chapter 89 of title 5, United States Code
(as determined by the Secretary in consultation with
the Director of the Office of Personnel Management),
and consistent with the Publication of Benefit
Applications under subsection (c). In the event a
covered benefit, service, or category of provider
appearing in the List of Required Benefits is not
offered in one of the three most heavily subscribed
national health plans offered under the Federal
Employees Health Benefits Program, such covered
benefit, service, or category of provider requirement
shall be applied in a manner consistent with the manner
in which such coverage is offered in the remaining most
heavily subscribed plan of the remaining Federal
Employees Health Benefits Program plans, as determined
by the Secretary, in consultation with the Director of
the Office of Personnel Management.
``(B) Exception regarding state provider freedom of
choice laws.--Notwithstanding subparagraph (A), in the
event a category of provider mandate is included in the
List of Covered Benefits, any State Provider Freedom of
Choice Law (as defined in section 3121(7)) that is in
effect in any State in which such category of provider
mandate is in effect shall not be preempted, with
respect to that category of provider, by this part.
``(c) Publication of Benefit Applications.--Not later than 3 months
after the date of enactment of this title, and on the first day of
every calendar year thereafter, the Secretary, in consultation with the
Director of the Office of Personnel Management, shall publish in the
Federal Register a description of such covered benefits, services, and
categories of providers covered in that calendar year by each of the
three most heavily subscribed nationally available Federal Employee
Health Benefits Plan options which are also included on the List of
Required Benefits.
``(d) Effective Dates.--
``(1) Small business health plans.--With respect to health
insurance provided to participating employers of small business
health plans, the requirements of this part (concerning lower
cost plans) shall apply beginning on the date that is 12 months
after the date of enactment of this title.
``(2) Non-association coverage.--With respect to health
insurance provided to groups or individuals other than
participating employers of small business health plans, the
requirements of this part shall apply beginning on the date
that is 15 months after the date of enactment of this title.
``(e) Updating of List of Required Benefits.--Not later than 2
years after the date on which the List of Required Benefits is issued
under subsection (a), and every 2 years thereafter, the Secretary, in
consultation with the National Association of Insurance Commissioners,
shall update the list based on changes in the laws and regulations of
the States. The Secretary shall issue the updated list by regulation,
and such updated list shall be effective upon the first plan year
following the issuance of such regulation.
``SEC. 3123. APPLICATION AND PREEMPTION.
``(a) Superceding of State Law.--
``(1) In general.--This part shall supersede any and all
State laws insofar as such laws relate to mandates relating to
covered benefits, services, or categories of provider in the
health insurance market as applied to an eligible insurer, or
health insurance coverage issued by an eligible insurer,
including with respect to coverage issued to a small business
health plan, in a nonadopting State.
``(2) Nonadopting states.--This part shall supersede any
and all State laws of a nonadopting State (whether enacted
prior to or after the date of enactment of this title) insofar
as such laws--
``(A) prohibit an eligible insurer from offering,
marketing, or implementing health insurance coverage
consistent with the Benefit Choice Standards, as
provided for in section 3122(a); or
``(B) have the effect of retaliating against or
otherwise punishing in any respect an eligible insurer
for offering, marketing, or implementing health
insurance coverage consistent with the Benefit Choice
Standards.
``(b) Savings Clause and Construction.--
``(1) Nonapplication to adopting states.--Subsection (a)
shall not apply with respect to adopting States.
``(2) Nonapplication to certain insurers.--Subsection (a)
shall not apply with respect to insurers that do not qualify as
eligible insurers who offer health insurance coverage in a
nonadopting State.
``(3) Nonapplication where obtaining relief under state
law.--Subsection (a)(1) shall not supercede any State law of a
nonadopting State to the extent necessary to permit individuals
or the insurance department of the State (or other State
agency) to obtain relief under State law to require an eligible
insurer to comply with the Benefit Choice Standards.
``(4) No effect on preemption.--In no case shall this part
be construed to limit or affect in any manner the preemptive
scope of sections 502 and 514 of the Employee Retirement Income
Security Act of 1974. In no case shall this part be construed
to create any cause of action under Federal or State law or
enlarge or affect any remedy available under the Employee
Retirement Income Security Act of 1974.
``(5) Preemption limited to benefits.--Subsection (a) shall
not preempt any State law that does not have a reference to or
a connection with State mandates regarding covered benefits,
services, or categories of providers that would otherwise apply
to eligible insurers.
``SEC. 3124. CIVIL ACTIONS AND JURISDICTION.
``(a) In General.--The courts of the United States shall have
exclusive jurisdiction over civil actions involving the interpretation
of this part.
``(b) Actions.--An eligible insurer may bring an action in the
district courts of the United States for injunctive or other equitable
relief against any officials or agents of a nonadopting State in
connection with any conduct or action, or proposed conduct or action,
by such officials or agents which violates, or which would if
undertaken violate, section 3123.
``(c) Direct Filing in Court of Appeals.--At the election of the
eligible insurer, an action may be brought under subsection (b)
directly in the United States Court of Appeals for the circuit in which
the nonadopting State is located by the filing of a petition for review
in such Court.
``(d) Expedited Review.--
``(1) District court.--In the case of an action brought in
a district court of the United States under subsection (b),
such court shall complete such action, including the issuance
of a judgment, prior to the end of the 120-day period beginning
on the date on which such action is filed, unless all parties
to such proceeding agree to an extension of such period.
``(2) Court of appeals.--In the case of an action brought
directly in a United States Court of Appeal under subsection
(c), or in the case of an appeal of an action brought in a
district court under subsection (b), such Court shall complete
all action on the petition, including the issuance of a
judgment, prior to the end of the 60-day period beginning on
the date on which such petition is filed with the Court, unless
all parties to such proceeding agree to an extension of such
period.
``(e) Standard of Review.--A court in an action filed under this
section, shall render a judgment based on a review of the merits of all
questions presented in such action and shall not defer to any conduct
or action, or proposed conduct or action, of a nonadopting State.
``SEC. 3125. RULES OF CONSTRUCTION.
``(a) In General.--Notwithstanding any other provision of Federal
or State law, a health insurance issuer in an adopting State or an
eligible insurer in a nonadopting State may amend its existing policies
to be consistent with the terms of this subtitle (concerning rating and
benefits).
``(b) Health Savings Accounts.--Nothing in this subtitle shall be
construed to create any mandates for coverage of benefits for HSA-
qualified health plans that would require reimbursements in violation
of section 223(c)(2) of the Internal Revenue Code of 1986.''.
Subtitle C--Harmonization of Health Insurance Standards
SEC. 221. HEALTH INSURANCE STANDARDS HARMONIZATION.
Title XXXI of the Public Health Service Act (as added by section
211) is amended by adding at the end the following:
``Subtitle B--Standards Harmonization
``SEC. 3131. DEFINITIONS.
``In this subtitle:
``(1) Adopting state.--The term `adopting State' means a
State that has enacted the harmonized standards adopted under
this subtitle in their entirety and as the exclusive laws of
the State that relate to the harmonized standards.
``(2) Eligible insurer.--The term `eligible insurer' means
a health insurance issuer that is licensed in a nonadopting
State and that--
``(A) notifies the Secretary, not later than 30
days prior to the offering of coverage described in
this subparagraph, that the issuer intends to offer
health insurance coverage consistent with the
harmonized standards in a nonadopting State;
``(B) notifies the insurance department of a
nonadopting State (or other State agency), not later
than 30 days prior to the offering of coverage
described in this subparagraph, that the issuer intends
to offer health insurance coverage in that State
consistent with the harmonized standards published
pursuant to section 3133(d), and provides with such
notice a copy of any insurance policy that it intends
to offer in the State, its most recent annual and
quarterly financial reports, and any other information
required to be filed with the insurance department of
the State (or other State agency) by the Secretary in
regulations; and
``(C) includes in the terms of the health insurance
coverage offered in nonadopting States (including in
the terms of any individual certificates that may be
offered to individuals in connection with such health
coverage) and filed with the State pursuant to
subparagraph (B), a description of the harmonized
standards published pursuant to section 3133(g)(2) and
an affirmation that such standards are a term of the
contract.
``(3) Harmonized standards.--The term `harmonized
standards' means the standards certified by the Secretary under
section 3133(d).
``(4) Health insurance coverage.--The term `health
insurance coverage' means any coverage issued in the health
insurance market, except that such term shall not include
excepted benefits (as defined in section 2791(c).
``(5) Nonadopting state.--The term `nonadopting State'
means a State that fails to enact, within 18 months of the date
on which the Secretary certifies the harmonized standards under
this subtitle, the harmonized standards in their entirety and
as the exclusive laws of the State that relate to the
harmonized standards.
``(6) State law.--The term `State law' means all laws,
decisions, rules, regulations, or other State actions
(including actions by a State agency) having the effect of law,
of any State.
``SEC. 3132. HARMONIZED STANDARDS.
``(a) Board.--
``(1) Establishment.--Not later than 3 months after the
date of enactment of this title, the Secretary, in consultation
with the NAIC, shall establish the Health Insurance Consensus
Standards Board (referred to in this subtitle as the `Board')
to develop recommendations that harmonize inconsistent State
health insurance laws in accordance with the procedures
described in subsection (b).
``(2) Composition.--
``(A) In general.--The Board shall be composed of
the following voting members to be appointed by the
Secretary after considering the recommendations of
professional organizations representing the entities
and constituencies described in this paragraph:
``(i) Four State insurance commissioners as
recommended by the National Association of
Insurance Commissioners, of which two shall be
Democrats and two shall be Republicans, and of
which one shall be designated as the
chairperson and one shall be designated as the
vice chairperson.
``(ii) Four representatives of State
government, two of which shall be governors of
States and two of which shall be State
legislators, and two of which shall be
Democrats and two of which shall be
Republicans.
``(iii) Four representatives of health
insurers, of which one shall represent insurers
that offer coverage in the small group market,
one shall represent insurers that offer
coverage in the large group market, one shall
represent insurers that offer coverage in the
individual market, and one shall represent
carriers operating in a regional market.
``(iv) Two representatives of insurance
agents and brokers.
``(v) Two independent representatives of
the American Academy of Actuaries who have
familiarity with the actuarial methods
applicable to health insurance.
``(B) Ex officio member.--A representative of the
Secretary shall serve as an ex officio member of the
Board.
``(3) Advisory panel.--The Secretary shall establish an
advisory panel to provide advice to the Board, and shall
appoint its members after considering the recommendations of
professional organizations representing the entities and
constituencies identified in this paragraph:
``(A) Two representatives of small business health
plans.
``(B) Two representatives of employers, of which
one shall represent small employers and one shall
represent large employers.
``(C) Two representatives of consumer
organizations.
``(D) Two representatives of health care providers.
``(4) Qualifications.--The membership of the Board shall
include individuals with national recognition for their
expertise in health finance and economics, actuarial science,
health plans, providers of health services, and other related
fields, who provide a mix of different professionals, broad
geographic representation, and a balance between urban and
rural representatives.
``(5) Ethical disclosure.--The Secretary shall establish a
system for public disclosure by members of the Board of
financial and other potential conflicts of interest relating to
such members. Members of the Board shall be treated as
employees of Congress for purposes of applying title I of the
Ethics in Government Act of 1978 (Public Law 95-521).
``(6) Director and staff.--Subject to such review as the
Secretary deems necessary to assure the efficient
administration of the Board, the chair and vice-chair of the
Board may--
``(A) employ and fix the compensation of an
Executive Director (subject to the approval of the
Comptroller General) and such other personnel as may be
necessary to carry out its duties (without regard to
the provisions of title 5, United States Code,
governing appointments in the competitive service);
``(B) seek such assistance and support as may be
required in the performance of its duties from
appropriate Federal departments and agencies;
``(C) enter into contracts or make other
arrangements, as may be necessary for the conduct of
the work of the Board (without regard to section 3709
of the Revised Statutes (41 U.S.C. 5));
``(D) make advance, progress, and other payments
which relate to the work of the Board;
``(E) provide transportation and subsistence for
persons serving without compensation; and
``(F) prescribe such rules as it deems necessary
with respect to the internal organization and operation
of the Board.
``(7) Terms.--The members of the Board shall serve for the
duration of the Board. Vacancies in the Board shall be filled
as needed in a manner consistent with the composition described
in paragraph (2).
``(b) Development of Harmonized Standards.--
``(1) In general.--In accordance with the process described
in subsection (c), the Board shall identify and recommend
nationally harmonized standards for each of the following
process categories:
``(A) Form filing and rate filing.--Form and rate
filing standards shall be established which promote
speed to market and include the following defined areas
for States that require such filings:
``(i) Procedures for form and rate filing
pursuant to a streamlined administrative filing
process.
``(ii) Timeframes for filings to be
reviewed by a State if review is required
before they are deemed approved.
``(iii) Timeframes for an eligible insurer
to respond to State requests following its
review.
``(iv) A process for an eligible insurer to
self-certify.
``(v) State development of form and rate
filing templates that include only non-
preempted State law and Federal law
requirements for eligible insurers with timely
updates.
``(vi) Procedures for the resubmission of
forms and rates.
``(vii) Disapproval rationale of a form or
rate filing based on material omissions or
violations of non-preempted State law or
Federal law with violations cited and
explained.
``(viii) For States that may require a
hearing, a rationale for hearings based on
violations of non-preempted State law or
insurer requests.
``(B) Market conduct review.--Market conduct review
standards shall be developed which provide for the
following:
``(i) Mandatory participation in national
databases.
``(ii) The confidentiality of examination
materials.
``(iii) The identification of the State
agency with primary responsibility for
examinations.
``(iv) Consultation and verification of
complaint data with the eligible insurer prior
to State actions.
``(v) Consistency of reporting requirements
with the recordkeeping and administrative
practices of the eligible insurer.
``(vi) Examinations that seek to correct
material errors and harmful business practices
rather than infrequent errors.
``(vii) Transparency and publishing of the
State's examination standards.
``(viii) Coordination of market conduct
analysis.
``(ix) Coordination and nonduplication
between State examinations of the same eligible
insurer.
``(x) Rationale and protocols to be met
before a full examination is conducted.
``(xi) Requirements on examiners prior to
beginning examinations such as budget planning
and work plans.
``(xii) Consideration of methods to limit
examiners' fees such as caps, competitive
bidding, or other alternatives.
``(xiii) Reasonable fines and penalties for
material errors and harmful business practices.
``(C) Prompt payment of claims.--The Board shall
establish prompt payment standards for eligible
insurers based on standards similar to those applicable
to the Social Security Act as set forth in section
1842(c)(2) of such Act (42 U.S.C. 1395u(c)(2)). Such
prompt payment standards shall be consistent with the
timing and notice requirements of the claims procedure
rules to be specified under subparagraph (D), and shall
include appropriate exceptions such as for fraud,
nonpayment of premiums, or late submission of claims.
``(D) Internal review.--The Board shall establish
standards for claims procedures for eligible insurers
that are consistent with the requirements relating to
initial claims for benefits and appeals of claims for
benefits under the Employee Retirement Income Security
Act of 1974 as set forth in section 503 of such Act (29
U.S.C. 1133) and the regulations thereunder.
``(2) Recommendations.--The Board shall recommend
harmonized standards for each element of the categories
described in subparagraph (A) through (D) of paragraph (1)
within each such market. Notwithstanding the previous sentence,
the Board shall not recommend any harmonized standards that
disrupt, expand, or duplicate the benefit, service, or provider
mandate standards provided in the Benefit Choice Standards
pursuant to section 3122(a).
``(c) Process for Identifying Harmonized Standards.--
``(1) In general.--The Board shall develop recommendations
to harmonize inconsistent State insurance laws with respect to
each of the process categories described in subparagraphs (A)
through (D) of subsection (b)(1).
``(2) Requirements.--In adopting standards under this
section, the Board shall consider the following:
``(A) Any model acts or regulations of the National
Association of Insurance Commissioners in each of the
process categories described in subparagraphs (A)
through (D) of subsection (b)(1).
``(B) Substantially similar standards followed by a
plurality of States, as reflected in existing State
laws, relating to the specific process categories
described in subparagraphs (A) through (D) of
subsection (b)(1).
``(C) Any Federal law requirement related to
specific process categories described in subparagraphs
(A) through (D) of subsection (b)(1).
``(D) In the case of the adoption of any standard
that differs substantially from those referred to in
subparagraphs (A), (B), or (C), the Board shall provide
evidence to the Secretary that such standard is
necessary to protect health insurance consumers or
promote speed to market or administrative efficiency.
``(E) The criteria specified in clauses (i) through
(iii) of subsection (d)(2)(B).
``(d) Recommendations and Certification by Secretary.--
``(1) Recommendations.--Not later than 18 months after the
date on which all members of the Board are selected under
subsection (a), the Board shall recommend to the Secretary the
certification of the harmonized standards identified pursuant
to subsection (c).
``(2) Certification.--
``(A) In general.--Not later than 120 days after
receipt of the Board's recommendations under paragraph
(1), the Secretary shall certify the recommended
harmonized standards as provided for in subparagraph
(B), and issue such standards in the form of an interim
final regulation.
``(B) Certification process.--The Secretary shall
establish a process for certifying the recommended
harmonized standard, by category, as recommended by the
Board under this section. Such process shall--
``(i) ensure that the certified standards
for a particular process area achieve
regulatory harmonization with respect to health
plans on a national basis;
``(ii) ensure that the approved standards
are the minimum necessary, with regard to
substance and quantity of requirements, to
protect health insurance consumers and maintain
a competitive regulatory environment; and
``(iii) ensure that the approved standards
will not limit the range of group health plan
designs and insurance products, such as
catastrophic coverage only plans, health
savings accounts, and health maintenance
organizations, that might otherwise be
available to consumers.
``(3) Application and effective date.--The standards
certified by the Secretary under paragraph (2) shall apply and
become effective on the date that is 18 months after the date
on which the Secretary certifies the harmonized standards.
``(e) Termination.--The Board shall terminate and be dissolved
after making the recommendations to the Secretary pursuant to
subsection (d)(1).
``(f) Ongoing Review.--Not earlier than 3 years after the
termination of the Board under subsection (e), and not earlier than
every 3 years thereafter, the Secretary, in consultation with the
National Association of Insurance Commissioners and the entities and
constituencies represented on the Board and the Advisory Panel, shall
prepare and submit to the appropriate committees of Congress a report
that assesses the effect of the harmonized standards applied under this
section on access, cost, and health insurance market functioning. The
Secretary may, based on such report and applying the process
established for certification under subsection (d)(2)(B), in
consultation with the National Association of Insurance Commissioners
and the entities and constituencies represented on the Board and the
Advisory Panel, update the harmonized standards through notice and
comment rulemaking.
``(g) Publication.--
``(1) Listing.--The Secretary shall maintain an up to date
listing of all harmonized standards certified under this
section on the Internet website of the Department of Health and
Human Services.
``(2) Sample contract language.--The Secretary shall
publish on the Internet website of the Department of Health and
Human Services sample contract language that incorporates the
harmonized standards certified under this section, which may be
used by insurers seeking to qualify as an eligible insurer. The
types of harmonized standards that shall be included in sample
contract language are the standards that are relevant to the
contractual bargain between the insurer and insured.
``(h) State Adoption and Enforcement.--Not later than 18 months
after the certification by the Secretary of harmonized standards under
this section, the States may adopt such harmonized standards (and
become an adopting State) and, in which case, shall enforce the
harmonized standards pursuant to State law.
``SEC. 3133. APPLICATION AND PREEMPTION.
``(a) Superceding of State Law.--
``(1) In general.--The harmonized standards certified under
this subtitle and applied as provided for in section
3133(d)(3), shall supersede any and all State laws of a
nonadopting State insofar as such State laws relate to the
areas of harmonized standards as applied to an eligible
insurer, or health insurance coverage issued by a eligible
insurer, including with respect to coverage issued to a small
business health plan, in a nonadopting State.
``(2) Nonadopting states.--This subtitle shall supersede
any and all State laws of a nonadopting State (whether enacted
prior to or after the date of enactment of this title) insofar
as they may--
``(A) prohibit an eligible insurer from offering,
marketing, or implementing health insurance coverage
consistent with the harmonized standards; or
``(B) have the effect of retaliating against or
otherwise punishing in any respect an eligible insurer
for offering, marketing, or implementing health
insurance coverage consistent with the harmonized
standards under this subtitle.
``(b) Savings Clause and Construction.--
``(1) Nonapplication to adopting states.--Subsection (a)
shall not apply with respect to adopting States.
``(2) Nonapplication to certain insurers.--Subsection (a)
shall not apply with respect to insurers that do not qualify as
eligible insurers who offer health insurance coverage in a
nonadopting State.
``(3) Nonapplication where obtaining relief under state
law.--Subsection (a)(1) shall not supercede any State law of a
nonadopting State to the extent necessary to permit individuals
or the insurance department of the State (or other State
agency) to obtain relief under State law to require an eligible
insurer to comply with the harmonized standards under this
subtitle.
``(4) No effect on preemption.--In no case shall this
subtitle be construed to limit or affect in any manner the
preemptive scope of sections 502 and 514 of the Employee
Retirement Income Security Act of 1974. In no case shall this
subtitle be construed to create any cause of action under
Federal or State law or enlarge or affect any remedy available
under the Employee Retirement Income Security Act of 1974.
``(c) Effective Date.--This section shall apply beginning on the
date that is 18 months after the date on harmonized standards are
certified by the Secretary under this subtitle.
``SEC. 3134. CIVIL ACTIONS AND JURISDICTION.
``(a) In General.--The district courts of the United States shall
have exclusive jurisdiction over civil actions involving the
interpretation of this subtitle.
``(b) Actions.--An eligible insurer may bring an action in the
district courts of the United States for injunctive or other equitable
relief against any officials or agents of a nonadopting State in
connection with any conduct or action, or proposed conduct or action,
by such officials or agents which violates, or which would if
undertaken violate, section 3133.
``(c) Direct Filing in Court of Appeals.--At the election of the
eligible insurer, an action may be brought under subsection (b)
directly in the United States Court of Appeals for the circuit in which
the nonadopting State is located by the filing of a petition for review
in such Court.
``(d) Expedited Review.--
``(1) District court.--In the case of an action brought in
a district court of the United States under subsection (b),
such court shall complete such action, including the issuance
of a judgment, prior to the end of the 120-day period beginning
on the date on which such action is filed, unless all parties
to such proceeding agree to an extension of such period.
``(2) Court of appeals.--In the case of an action brought
directly in a United States Court of Appeal under subsection
(c), or in the case of an appeal of an action brought in a
district court under subsection (b), such Court shall complete
all action on the petition, including the issuance of a
judgment, prior to the end of the 60-day period beginning on
the date on which such petition is filed with the Court, unless
all parties to such proceeding agree to an extension of such
period.
``(e) Standard of Review.--A court in an action filed under this
section, shall render a judgment based on a review of the merits of all
questions presented in such action and shall not defer to any conduct
or action, or proposed conduct or action, of a nonadopting State.
``SEC. 3135. AUTHORIZATION OF APPROPRIATIONS; RULE OF CONSTRUCTION.
``(a) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this subtitle.
``(b) Health Savings Accounts.--Nothing in this subtitle shall be
construed to create any mandates for coverage of any benefits below the
deductible levels set for any health savings account-qualified health
plan pursuant to section 223 of the Internal Revenue Code of 1986.''.
TITLE III--TAX-RELATED HEALTH INCENTIVES
SEC. 301. SECA TAX DEDUCTION FOR HEALTH INSURANCE COSTS.
(a) In General.--Subsection (l) of section 162 of the Internal
Revenue Code of 1986 (relating to special rules for health insurance
costs of self-employed individuals) is amended by striking paragraph
(4) and by redesignating paragraph (5) as paragraph (4).
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
SEC. 302. DEDUCTION FOR QUALIFIED HEALTH INSURANCE COSTS OF
INDIVIDUALS.
(a) In General.--Part VII of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to additional itemized
deductions for individuals) is amended by redesignating section 224 as
section 225 and by inserting after section 223 the following new
section:
``SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE.
``(a) In General.--In 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) Qualified Health Insurance.--For purposes of this section,
the term `qualified health insurance' means insurance which constitutes
medical care, other than insurance substantially all of the coverage of
which is of excepted benefits described in section 9832(c).
``(c) Special Rules.--
``(1) Coordination with medical deduction, etc.--Any 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 shall not be taken into account
for purposes of this section.
``(2) Deduction not allowed for self-employment tax
purposes.--The 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 Income.--
Subsection (a) of section 62 of such Code is amended by inserting
before the last sentence the following new paragraph:
``(22) Costs of qualified health insurance.--The deduction
allowed by section 224.''.
(c) Clerical Amendment.--The 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 Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
TITLE IV--INCREASING ACCESS TO VA HEALTH CARE
SEC. 401. REQUIREMENT FOR PAYMENTS TO FACILITIES OTHER THAN THE
DEPARTMENT OF VETERANS AFFAIRS FOR COVERED HEALTH
SERVICES.
(a) Requirement To Authorize Receipt of Covered Health Services at
Non-Department Facilities Pursuant to Contracts With Such Facilities.--
Subsection (a) of section 1703 of title 38, United States Code, is
amended to read as follows:
``(a) An enrolled veteran may elect to receive covered health
services through a non-Department facility. Such an election shall be
made by submission to the Secretary of an application in accordance
with such regulations as the Secretary prescribes. The Secretary shall
authorize such services to be furnished to such veteran pursuant to
contracting with such a facility to furnish such services to such a
veteran, as authorized in section 1710 of this title.''.
(b) Descriptions of Covered Health Services and Enrolled
Veterans.--Such section is further amended by adding at the end the
following new subsection:
``(e) For purposes of subsection (a)--
``(1) a covered health service is any hospital care,
medical service, rehabilitative service, or preventative health
service for which the veteran described in such subsection is
eligible under this title; and
``(2) an enrolled veteran is a veteran who is enrolled in
the system of patient enrollment established under section
1705(a) of this title.''.
(c) Effective Date.--The Secretary of Veterans Affairs shall
implement the amendments made by subsections (a) and (b) in order for
enrolled veterans described in section 1703(e)(2) of title 38, United
States Code, as added by subsection (b), to receive covered health
services in accordance with section 1703(a) of such title, as amended
by subsection (a), not later than 180 days after the date of the
enactment of this Act.
SEC. 402. AUTHORITY OF DEPARTMENT OF VETERANS AFFAIRS PHARMACIES TO
DISPENSE MEDICATIONS TO VETERANS ON PRESCRIPTIONS WRITTEN
BY PRIVATE PRACTITIONERS.
Section 1712 of title 38, United States Code, is amended by adding
at the end the following new subsection:
``(f) Subject to section 1722A of this title, the Secretary shall
furnish to a veteran, through a Department health care facility, such
drugs and medicines as may be ordered on prescription of a duly
licensed physician in the treatment of any illness or injury of the
veteran provided pursuant to the authority to contract with a non-
Department facility for such treatment under section 1703 of this
title.''.
TITLE V--NURSING SHORTAGE
SEC. 501. CHILD CARE ASSISTANCE FOR INDIVIDUALS PURSUING ADVANCED
NURSING DEGREES.
Part E of title VIII of the Public Health Service Act (42 U.S.C.
297a et seq.) is amended--
(1) by redesignating section 810 (relating to a prohibition
against discrimination by schools) as section 846B; and
(2) by adding at the end the following:
``SEC. 846C. CHILD CARE ASSISTANCE FOR INDIVIDUALS PURSUING ADVANCED
NURSING DEGREES.
``(a) In General.--The Secretary may carry out a program of
entering into contracts with eligible individuals under which--
``(1) the Secretary agrees to provide child care vouchers
to the eligible individual for each month during which the
individual is a student in an advanced nursing degree program;
and
``(2) the eligible individual agrees to serve, at the
completion of such program, as a faculty member at a school of
nursing for a period of 4 years.
``(b) Vouchers.--Vouchers provided to an eligible individual under
this section--
``(1) shall be for child care expenses; and
``(2) shall be for not more than $500 per month.
``(c) Definition.--In this section, the term `eligible individual'
means an individual who is enrolled or accepted for enrollment as a
full-time student in an advanced nursing degree program.
``(d) Authorization of Appropriations.--To carry out this section,
there are authorized to be appropriated such sums as may be necessary
for each of fiscal years 2010 through 2014.''.
SEC. 502. NURSE FACULTY PROGRAM.
Title VII of the Higher Education Act of 1965 (20 U.S.C. 1133 et
seq.) is amended by adding at the end the following new part:
``PART E--NURSE FACULTY PROJECT
``SEC. 771. PURPOSES.
``The purposes of this part are to create a program--
``(1) to provide scholarships to qualified nurses in
pursuit of an advanced degree with the goal of becoming faculty
members in an accredited nursing program; and
``(2) to provide grants to partnerships between accredited
schools of nursing and hospitals or health facilities to fund
release time for qualified nurse employees, so that those
employees can earn a salary while obtaining an advanced degree
in nursing with the goal of becoming nurse faculty.
``SEC. 772. ASSISTANCE AUTHORIZED.
``(a) Competitive Grants Authorized.--The Secretary may, on a
competitive basis, award grants to, and enter into contracts and
cooperative agreements with, partnerships composed of an accredited
school of nursing at an institution of higher education and a hospital
or health facility to establish projects to enable such hospital or
health facility to retain its staff of experienced nurses while
providing a mechanism to have these individuals become, through an
accelerated nursing education program, faculty members of an accredited
school of nursing.
``(b) Duration; Evaluation and Dissemination.--
``(1) Duration.--Grants under this part shall be awarded
for a period of 3 to 5 years.
``(2) Mandatory evaluation and dissemination.--Grants under
this part shall be primarily used for evaluation, and
dissemination to other institutions of higher education, of the
information obtained through the activities described in
section 771(2).
``(c) Considerations in Making Awards.--In awarding grants and
entering into contracts and cooperative agreements under this section,
the Secretary shall consider the following:
``(1) Geographic distribution.--Providing an equitable
geographic distribution of such grants.
``(2) Rural and urban areas.--Distributing such grants to
urban and rural areas.
``(3) Range and type of institution.--Ensuring that the
activities to be assisted are developed for a range of types
and sizes of institutions of higher education.
``(4) Prior experience or exceptional programs.--
Institutions of higher education with demonstrated prior
experience in providing advanced nursing education programs to
prepare nurses interested in pursuing a faculty role.
``(d) Uses of Funds.--Funds made available by grant, contract, or
cooperative agreement under this part may be used--
``(1) to develop a new national demonstration initiative to
align nursing education with the emerging challenges of health
care delivery; and
``(2) for any one or more of the following innovations in
educational programs:
``(A) to develop a clinical simulation laboratory
in a hospital, health facility, or accredited school of
nursing;
``(B) to purchase distance learning technologies;
``(C) to fund release time for qualified nurses
enrolled in the graduate nursing program;
``(D) to provide for faculty salaries; and
``(E) to collect and analyze data on educational
outcomes.
``SEC. 773. APPLICATIONS.
``Each partnership desiring to receive a grant, contract, or
cooperative agreement under this part shall submit an application to
the Secretary at such time, in such manner, and accompanied by such
information as the Secretary may require. Each application shall
include assurances that--
``(1) the individuals enrolled in the program will be
qualified nurses in pursuit of a master's or doctoral degree in
nursing and have a contractual obligation with the hospital or
health facility that is in partnership with the institution of
higher education;
``(2) the hospital or health facility of employment would
be the clinical site for the accredited school of nursing
program;
``(3) individuals will also maintain their employment on a
part-time basis to the hospital or health facility that allowed
them to participate in the program, and will receive an income
from the hospital or health facility, as a part-time employee,
and release times or flexible schedules to accommodate their
class schedule; and
``(4) upon completion of the program, individuals agree to
teach for 2 years in an accredited school of nursing for each
year of support the individual received under this program.
``SEC. 774. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated for this part not more
than $10,000,000 for fiscal year 2009 and such sums as may be necessary
for each of the 4 succeeding fiscal years.
``SEC. 775. DEFINITION.
``For purposes of this part, the term `health facility' means an
Indian Health Service health service center, a Native Hawaiian health
center, a hospital, a federally qualified health center, a rural health
clinic, a nursing home, a home health agency, a hospice program, a
public health clinic, a State or local department of public health, a
skilled nursing facility, or ambulatory surgical center.''.
SEC. 503. NURSE FACULTY LOAN REPAYMENT PROGRAM.
Part E of title VIII of the Public Health Service Act (42 U.S.C.
297a et seq.) is amended by inserting after section 846C, as added by
section 501, the following new section:
``SEC. 846D. NURSE FACULTY LOAN REPAYMENT PROGRAM.
``(a) Establishment.--The Secretary, acting through the
Administrator of the Health Resources and Services Administration, may
enter into an agreement with eligible individuals for the repayment of
education loans, in accordance with this section, to increase the
number of qualified nursing faculty.
``(b) Agreements.--Each agreement entered into under subsection (a)
shall require that the eligible individual shall serve as a full-time
member of the faculty of an accredited school of nursing for a total
period, in the aggregate, of at least four years during the six-year
period beginning on the later of--
``(1) the date on which the individual receives a master's
or doctorate nursing degree from an accredited school of
nursing; or
``(2) the date on which the individual enters into an
agreement under subsection (a).
``(c) Agreement Provisions.--Agreements entered into pursuant to
subsection (a) shall be entered into on such terms and conditions as
the Secretary may determine, except that--
``(1) not more than ten months after the date on which the
six-year period described under subsection (b) begins, but in
no case before the individual starts as a full-time member of
the faculty of an accredited school of nursing, the Secretary
shall begin making payments, for and on behalf of that
individual, on the outstanding principal of, and interest on,
any loan of that individual obtained to pay for such degree;
``(2) for an individual who has completed a master's degree
in nursing--
``(A) payments may not exceed $10,000 per calendar
year; and
``(B) total payments may not exceed $40,000; and
``(3) for an individual who has completed a doctorate
degree in nursing--
``(A) payments may not exceed $20,000 per calendar
year; and
``(B) total payments may not exceed $80,000.
``(d) Breach of Agreement.--
``(1) In general.--In the case of any agreement made under
subsection (a), the individual is liable to the Federal
Government for the total amount paid by the Secretary under
such agreement, and for interest on such amount at the maximum
legal prevailing rate, if the individual fails to meet the
agreement terms required under subsection (b).
``(2) Waiver or suspension of liability.--In the case of an
individual making an agreement for purposes of paragraph (1),
the Secretary shall provide for the waiver or suspension of
liability under such paragraph if compliance by the individual
with the agreement involved is impossible or would involve
extreme hardship to the individual or if enforcement of the
agreement with respect to the individual would be
unconscionable.
``(3) Date certain for recovery.--Subject to paragraph (2),
any amount that the Federal Government is entitled to recover
under paragraph (1) shall be paid to the United States not
later than the expiration of the 3-year period beginning on the
date the United States becomes so entitled.
``(4) Availability.--Amounts recovered under paragraph (1)
shall be available to the Secretary for making loan repayments
under this section and shall remain available for such purpose
until expended.
``(e) Eligible Individual Defined.--For purposes of this section,
the term `eligible individual' means an individual who--
``(1) is a United States citizen, national, or lawful
permanent resident;
``(2) holds an unencumbered license as a registered nurse;
and
``(3) has either already completed a master's or doctorate
nursing program at an accredited school of nursing or is
currently enrolled on a full-time or part-time basis in such a
program.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as may be necessary for each of
fiscal years 2010 through 2014 to carry out this Act. Such sums shall
remain available until expended.''.
SEC. 504. PROGRAMS TO INCREASE THE NUMBER OF NURSES WITHIN THE ARMED
FORCES.
(a) In General.--The Secretary of Defense may provide for the
carrying out of each of the programs described in subsections (b)
through (f).
(b) Service of Nurse Officers as Faculty in Exchange for Commitment
to Additional Service in the Armed Forces.--
(1) In general.--One of the programs under this section may
be a program in which covered commissioned officers with a
graduate degree in nursing or a related field who are in the
nurse corps of the Armed Force concerned serve a tour of duty
of two years as a full-time faculty member of an accredited
school of nursing.
(2) Covered officers.--A commissioned officer of the nurse
corps of the Armed Forces described in this paragraph is a
nurse officer on active duty who has served for more than nine
years on active duty in the Armed Forces as an officer of the
nurse corps at the time of the commencement of the tour of duty
described in paragraph (1).
(3) Benefits and privileges.--An officer serving on the
faculty of an accredited school or nursing under this
subsection shall be accorded all the benefits, privileges, and
responsibilities (other than compensation and compensation-
related benefits) of any other comparably situated individual
serving a full-time faculty member of such school.
(4) Agreement for additional service.--Each officer who
serves a tour of duty on the faculty of a school of nursing
under this subsection shall enter into an agreement with the
Secretary to serve upon the completion of such tour of duty for
a period of four years for such tour of duty as a member of the
nurse corps of the Armed Force concerned. Any service agreed to
by an officer under this paragraph is in addition to any other
service required of the officer under law.
(c) Service of Nurse Officers as Faculty in Exchange for
Scholarships for Nurse Officer Candidates.--
(1) In general.--One of the programs under this section may
be a program in which commissioned officers with a graduate
degree in nursing or a related field who are in the nurse corps
of the Armed Force concerned serve while on active duty a tour
of duty of two years as a full-time faculty member of an
accredited school of nursing.
(2) Benefits and privileges.--An officer serving on the
faculty of an accredited school of nursing under this
subsection shall be accorded all the benefits, privileges, and
responsibilities (other than compensation and compensation-
related benefits) of any other comparably situated individual
serving as a full-time faculty member of such school.
(3) Scholarships for nurse officer candidates.--(A) Each
accredited school of nursing at which an officer serves on the
faculty under this subsection shall provide scholarships to
individuals undertaking an educational program at such school
leading to a degree in nursing who agree, upon completion of
such program, to accept a commission as an officer in the nurse
corps of the Armed Forces.
(B) The total amount of funds made available for
scholarships by an accredited school of nursing under
subparagraph (A) for each officer serving on the faculty of
that school under this subsection shall be not less than the
amount equal to an entry-level full-time faculty member of that
school for each year that such officer so serves on the faculty
of that school.
(C) The total number of scholarships provided by an
accredited school of nursing under subparagraph (A) for each
officer serving on the faculty of that school under this
subsection shall be such number as the Secretary of Defense
shall specify for purposes of this subsection.
(d) Scholarships for Certain Nurse Officers for Education as
Nurses.--
(1) In general.--One of the programs under this section may
be a program in which the Secretary provides scholarships to
commissioned officers of the nurse corps of the Armed Force
concerned described in paragraph (2) who enter into an
agreement described in paragraph (4) for the participation of
such officers in an educational program of an accredited school
of nursing leading to a graduate degree in nursing.
(2) Covered nurse officers.--A commissioned officer of the
nurse corps of the Armed Forces described in this paragraph is
a nurse officer who has served not less than 20 years on active
duty in the Armed Forces and is otherwise eligible for
retirement from the Armed Forces.
(3) Scope of scholarships.--Amounts in a scholarship
provided a nurse officer under this subsection may be utilized
by the officer to pay the costs of tuition, fees, and other
educational expenses of the officer in participating in an
educational program described in paragraph (1).
(4) Agreement.--An agreement of a nurse officer described
in this paragraph is the agreement of the officer--
(A) to participate in an educational program
described in paragraph (1); and
(B) upon graduation from such educational program--
(i) to serve not less than two years as a
full-time faculty member of an accredited
school of nursing; and
(ii) to undertake such activities as the
Secretary considers appropriate to encourage
current and prospective nurses to pursue
service in the nurse corps of the Armed Forces.
(e) Transition Assistance for Retiring Nurse Officers Qualified as
Faculty.--
(1) In general.--One of the programs under this section may
be a program in which the Secretary provides to commissioned
officers of the nurse corps of the Armed Force concerned
described in paragraph (2) the assistance described in
paragraph (3) to assist such officers in obtaining and
fulfilling positions as full-time faculty members of an
accredited school of nursing after retirement from the Armed
Forces.
(2) Covered nurse officers.--A commissioned officer of the
nurse corps of the Armed Forces described in this paragraph is
a nurse officer who--
(A) has served an aggregate of at least 20 years on
active duty or in reserve active status in the Armed
Forces;
(B) is eligible for retirement from the Armed
Forces; and
(C) possesses a doctoral or master degree in
nursing or a related field which qualifies the nurse
officer to discharge the position of nurse instructor
at an accredited school of nursing.
(3) Assistance.--The assistance described in this paragraph
is assistance as follows:
(A) Career placement assistance.
(B) Continuing education.
(C) Stipends (in an amount specified by the
Secretary).
(4) Agreement.--A nurse officer provided assistance under
this subsection shall enter into an agreement with the
Secretary to serve as a full-time faculty member of an
accredited school of nursing for such period as the Secretary
shall provide in the agreement.
(f) Benefits for Retired Nurse Officers Accepting Appointment as
Faculty.--
(1) In general.--One of the programs under this section may
be a program in which the Secretary provides to any individual
described in paragraph (2) the benefits specified in paragraph
(3).
(2) Covered individuals.--An individual described in this
paragraph is an individual who--
(A) is retired from the Armed Forces after service
as a commissioned officer in the nurse corps of the
Armed Forces;
(B) holds a graduate degree in nursing; and
(C) serves as a full-time faculty member of an
accredited school of nursing.
(3) Benefits.--The benefits specified in this paragraph
shall include the following:
(A) Payment of retired or retirement pay without
reduction based on receipt of pay or other compensation
from the institution of higher education concerned.
(B) Payment by the institution of higher education
concerned of a salary and other compensation to which
other similarly situated faculty members of the
institution of higher education would be entitled.
(C) If the amount of pay and other compensation
payable by the institution of higher education
concerned for service as an associate full-time faculty
member is less than the basic pay to which the
individual was entitled immediately before retirement
from the Armed Forces, payment of an amount equal to
the difference between such basic pay and such payment
and other compensation.
(g) Administration and Duration of Programs.--
(1) In general.--The Secretary shall establish requirements
and procedures for the administration of the programs
authorized by this section. Such requirements and procedures
shall include procedures for selecting participating schools of
nursing.
(2) Duration.--Any program carried out under this section
shall continue for not less than two years.
(3) Assessment.--Not later than two years after commencing
any program under this section, the Secretary shall assess the
results of such program and determine whether or not to
continue such program. The assessment of any program shall be
based on measurable criteria, information concerning results,
and such other matters as the Secretary considers appropriate.
(4) Continuation.--The Secretary may continue carrying out
any program under this section that the Secretary determines,
pursuant to an assessment under paragraph (3), to continue to
carry out. In continuing to carry out a program, the Secretary
may modify the terms of the program within the scope of this
section. The continuation of any program may include its
expansion to include additional participating schools of
nursing.
(h) Definitions.--In this section, the terms ``school of nursing''
and ``accredited'' have the meaning given those terms in section 801 of
the Public Health Service Act (42 U.S.C. 296).
TITLE VI--RESERVE COMPONENTS OF THE ARMED FORCES
SEC. 601. EFFECTIVE DATE OF ACTIVE DUTY FOR PURPOSES OF ENTITLEMENT TO
ACTIVE DUTY HEALTH CARE OF MEMBERS OF THE RESERVE
COMPONENTS OF THE ARMED FORCES RECEIVING ALERT ORDER
ANTICIPATING A CALL OR ORDER TO ACTIVE DUTY IN SUPPORT OF
A CONTINGENCY OPERATION.
Subsection (d) of section 1074 of title 10, United States Code, is
amended to read as follows:
``(d)(1) For purposes of this chapter, a member of a reserve
component of the Armed Forces shall be treated as a member of the Armed
Forces on active duty as follows:
``(A) On the date of the issuance of the alert order for
the member's unit in anticipation of the mobilization of the
unit for service for a period of more than 30 days in support
of a contingency operation.
``(B) On the date of the issuance of the order providing
for the assignment or attachment of the member to a unit
subject to an alert order described in paragraph (1).
``(2) If the alert order for a member's unit (or the unit to which
the member is assigned or attached) is rescinded, the member shall
cease to be treated on active duty for purposes of this chapter as of
the date of the issuance of the order rescinding such alert order.''.
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