1.Short titles; table of
contents
(a)This Act may be cited as the Small Business Cooperative for Healthcare Options to
Improve Coverage for Employees (CHOICE) Act of 2009
or as
the Small Business CHOICE Act of
2009
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short titles; table of contents.
Title I—Fully Funded Small Business Health Insurance
Cooperatives
Sec. 101. Definitions.
Sec. 102. Commission to promote Fully Funded Small Business
Health Insurance cooperatives.
Sec. 103. Fully Funded Small Business Health Insurance
cooperatives exempted from certain State laws.
Sec. 104. Preservation of State benefit mandates.
Sec. 105. Access to claims reporting data.
Title II—Small Business CHOICE Credit
Sec. 201. Small Business CHOICE credit.
<enum>I</enum><header>Fully
Funded Small Business Health Insurance Cooperatives</header>
<section id="H24C6AC446904445BAB6832FEB8B98600"><enum>101.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title:</text>
<paragraph id="HCE21FA178BF74D42AC219308481081EB"><enum>(1)</enum><header>Fully funded
health insurance</header><text>The term <term>fully funded health
insurance</term> means, with respect to a fully funded small business health
insurance cooperative, insurance provided to assume and spread a portion, of
the risk of insuring the health liability exposure of the members of such
cooperative.</text>
</paragraph><paragraph id="H25993A9B03714887991C2DA5F58FA271"><enum>(2)</enum><header>Fully Funded
Small Business Health Insurance Cooperative</header><text display-inline="yes-display-inline">The term <term>Fully Funded Small Business
Health Insurance cooperative</term> means a bona fide association or financial
cooperative organization of persons with a common affiliation (such as
employment, labor union membership, place of residence, industry, or line of
business) that form a captive insurance company chartered in a State that has
adopted laws and regulations for captive insurers that are materially identical
to standards to be developed by the National Association of Insurance
Commissioners by July 1, 2010, if each of the following conditions are
met:</text>
<subparagraph id="H3A9226B8B7814866B687018BE2326100"><enum>(A)</enum><text display-inline="yes-display-inline">The cooperative—</text>
<clause id="H6CB802A2280845A0B350B4F2817D545"><enum>(i)</enum><text>has
no fewer than 100 members and no fewer than 5,000 lives (or, beginning as of 5
years after the date of the enactment of this Act, 15,000 lives); or</text>
</clause><clause id="H03BBA1DA10D346E18B951BEF9D10689"><enum>(ii)</enum><text>meets such minimum
capital requirements as the Secretary shall specify, taking into account
recommendations of the commission established under section 102.</text>
</clause></subparagraph><subparagraph id="HD4F65DF5EA464F5697569DF405C761B9"><enum>(B)</enum><text display-inline="yes-display-inline">The cooperative administers the activities
described in paragraph (1) separately from other activities of the
cooperative.</text>
</subparagraph><subparagraph id="HED7B2642CED44F689F1ED369610072DA"><enum>(C)</enum><text>The cooperative is
chartered or licensed as a captive insurance company under the laws of a State
and is authorized to engage in the business of insurance under the laws of such
State.</text>
</subparagraph><subparagraph id="H4C02D6F3C63F4B33A0B0932D146766E0"><enum>(D)</enum><text>The cooperative
does not vary the premium paid for a small business participating in the
cooperative based on the health status of individuals for whom such small
business purchases health insurance, or the claims experience of such small
business and does not exclude such an individual from coverage based on the
health status or claims experience of such individual.</text>
</subparagraph><subparagraph id="HA4DB726CD18C4CFD852EF30915F516A"><enum>(E)</enum><text>The cooperative has
as its owners only small businesses—</text>
<clause id="HA1DE5DF380E541078B574335FC57CEE8"><enum>(i)</enum><text>that
comprise the membership of the cooperative; and</text>
</clause><clause id="H4DF75A6B7AC540B0A71F6E7CD35E8212"><enum>(ii)</enum><text display-inline="yes-display-inline">that are provided excess claims coverage
insurance by the cooperative.</text>
</clause></subparagraph><subparagraph id="H0BA537EDE43D419891F464430018EBF5"><enum>(F)</enum><text>Ownership, with
respect to a member, is shared equitably among all participants in the
cooperative.</text>
</subparagraph><subparagraph id="HC8B31B4D61E54FD992C4553B35CB3C2"><enum>(G)</enum><text>Each owner of a
small business participating in the cooperative contracts with a primary
insurer to provide fully insured employee health insurance.</text>
</subparagraph><subparagraph id="H59BB716624BC455B96E1B75B5F8BDF46"><enum>(H)</enum><text display-inline="yes-display-inline">The cooperative provides excess claims
coverage insurance that does not pay benefits in a year for an insured person
until the annual maximum of the policy purchased from the insurer has been
exceeded. The annual maximum of the primary insurance policy shall not be less
than $10,000, and not be more than $250,000, per insured person in paid claims.
The Secretary shall provide for an annual increase in the dollar amounts
specified in the previous sentence based on annual inflation in health care
expenses per capita for such persons.</text>
</subparagraph><subparagraph id="HBA1A9C3B1E9C4E9894E805E0A1194D40"><enum>(I)</enum><text display-inline="yes-display-inline">Benefits provided by excess claims coverage
insurers must meet the high deductible health plan requirements of section
223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for a high deductible
health plan provided under applicable State law.</text>
</subparagraph><subparagraph id="H0B3B8DD9F7494EA7AD433B5201AF3553"><enum>(J)</enum><text>The excess claims
coverage insurance offered by the cooperative meets all requirements of State
law for the State in which it is offered.</text>
</subparagraph><subparagraph id="H9C51B90A3D1748FE8E8100FE10337DFC"><enum>(K)</enum><text>The name of the
cooperative includes the phrase <quote>Fully Funded Small Business Health
Insurance cooperative</quote>.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Nothing in
this paragraph shall be construed as preventing such a cooperative from
requiring a small business, as a condition of becoming a member of the
cooperative, to have a written commitment to the cooperative for such
membership for a period of time.</continuation-text></paragraph><paragraph id="H9655ACED156C4603AD0374D0BF94AAF9"><enum>(3)</enum><header>Small
business</header><text display-inline="yes-display-inline">The term <term>small
business</term> means a business that—</text>
<subparagraph id="H2751CE7CBE2A41570067C3A258B486F"><enum>(A)</enum><text>has been classified
as a small business concern by the Small Business Administration for purposes
of the Small Business Act (15 U.S.C. 631 et seq.) under size standards
established under section 3 of such Act (15 U.S.C. 632); or</text>
</subparagraph><subparagraph id="H5D4CDC3F4BD44DFCAEE62231006DD0D4"><enum>(B)</enum><text>has no more than
500 employees, as calculated under section 121.106 of title 13, Code of Federal
Regulations, as in effect as of January 1, 2008.</text>
</subparagraph></paragraph><paragraph id="H69024872C792447B8D676369B17BE204"><enum>(4)</enum><header>State</header><text>The
term <term>State</term> means each of the 50 States, the District of Columbia,
and Puerto Rico.</text>
</paragraph></section><section id="H35772F890CAD44E287F3E6B3C92FDA"><enum>102.</enum><header>Commission to
promote Fully Funded Small Business Health Insurance cooperatives</header>
<subsection id="HF0849850D46E412F819706E196C82B86"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">Not later than January 1, 2010, the
Secretary of the Treasury, in consultation with the Administrator of the Small
Business Administration, shall establish, and provide for the operation of, an
independent commission (in this section referred to as the
<quote>commission</quote>) on Fully Funded Small Business Health Insurance
cooperatives consistent with this section.</text>
</subsection><subsection id="HB49A4DA103AC4E7A9F75A8D976AF00E1"><enum>(b)</enum><header>Composition</header>
<paragraph id="HDE6985E30C59495B8BD825AEE3891D46"><enum>(1)</enum><header>In
general</header><text>Subject to subparagraph (B), the commission shall be
comprised of one representative from each of the following organizations, as
nominated by the organization to the Secretary of the Treasury:</text>
<subparagraph id="HEFFF266C6AD446E6963FFE386B0253AE"><enum>(A)</enum><text>The American
Academy of Actuaries.</text>
</subparagraph><subparagraph id="HE8BA9D6E30124699B9D1D2F4B9B7A00"><enum>(B)</enum><text>The National
Association of Insurance Commissioners.</text>
</subparagraph><subparagraph id="H30C9641B94D84B2CBB5957004C1C0049"><enum>(C)</enum><text display-inline="yes-display-inline">The Captive Insurance Companies
Association.</text>
</subparagraph><subparagraph id="H1F31ABFCAF034ADA928FAC02D15BF75B"><enum>(D)</enum><text>The Conference of
Consulting Actuaries.</text>
</subparagraph><subparagraph id="H8D80216D3FCE489C891254EBCE2F5387"><enum>(E)</enum><text>The Society of
Actuaries.</text>
</subparagraph><subparagraph id="HF48EB7904C1549659C73D7F8C409069F"><enum>(F)</enum><text>The Actuarial
Board for Counseling and Discipline.</text>
</subparagraph><subparagraph id="H3987FC1FF1464EB0A1DABB80D27CE144"><enum>(G)</enum><text>The Actuarial
Standards Board.</text>
</subparagraph></paragraph><paragraph id="HB9922A3D8D40433C9076AE65B969127C"><enum>(2)</enum><header>Limitation</header><text>No
individual who has a business relationship with an active Fully Funded Small
Business Health Insurance cooperative or who is employed by any State, Federal,
or local entity may serve as a member of the commission.</text>
</paragraph><paragraph id="H8D7727A66CCA48429FC9B33EEB953EA"><enum>(3)</enum><header>Compensation</header>
<subparagraph id="H019AB166EF0544DFAD00FE12ED9D3C1B"><enum>(A)</enum><header>In
general</header><text>The Secretary shall provide to members of the commission
compensation in an annual amount that does not exceed the amount specified in
subparagraph (B).</text>
</subparagraph><subparagraph id="H29FAB3C5D7984328993703A31FD25EB4"><enum>(B)</enum><header>Limitation</header><text>The
amount specified in this subparagraph is $50,000, or, for a year after 2010,
the amount specified in this subparagraph for the previous year increased by
the annual percentage increase in the consumer price index for all urban
consumers for the previous year.</text>
</subparagraph></paragraph></subsection><subsection id="H106D331CE290455993E900EB0887C14"><enum>(c)</enum><header>Functions</header><text>The
commission shall—</text>
<paragraph id="HBDE2F6AC0305473097B85CDB76EAEBBE"><enum>(1)</enum><text>promote the
development of Fully Funded Small Business Health Insurance
cooperatives;</text>
</paragraph><paragraph id="H8E37BD97B7E846C49533B41BA71720D1"><enum>(2)</enum><text>provide for
technical assistance in such development;</text>
</paragraph><paragraph id="H13EB26E6E8A94393BE14C7F66E08DD3"><enum>(3)</enum><text>make
recommendations to the Secretary regarding minimum capital requirements
referred to in section 102(2)(A)(ii);</text>
</paragraph><paragraph id="HD29350FD887C4FFBB020F14342291E2B"><enum>(4)</enum><text>conduct oversight
of Fully Funded Small Business Health Insurance cooperatives; and</text>
</paragraph><paragraph id="HE120A5B0DD1F4E11AFEEB50021917C57"><enum>(5)</enum><text>make quarterly
reports to Congress regarding the development, implementation, and maintenance
of such cooperatives, including the appropriate number of businesses and lives
that should be required under section 101(2)(A) and the maximum amount of
excess claims coverage insurance that should be provided per covered
person.</text>
</paragraph></subsection><subsection id="H00B0836B37844D618D8158B37889AB83"><enum>(d)</enum><header>Commission
staff</header><text>The commission shall provide for such staff, including an
executive director, as it determines necessary to carry out its
functions.</text>
</subsection><subsection id="H2C4BB932A32D4B52951BF419005E534E"><enum>(e)</enum><header>Commission
headquarters</header><text>The commission shall be domiciled within the
District of Columbia.</text>
</subsection><subsection id="H42E88EBD54F84E18A9E409A71F076B97"><enum>(f)</enum><header>Authorization of
appropriations</header><text>There is authorized to be appropriated for
purposes of carrying out subsection (a) $4,000,000 for fiscal year 2010 and
$2,000,000 for each of fiscal years 2011 through 2014.</text>
</subsection><subsection id="H165099802CEA410E864D00199549B794"><enum>(g)</enum><header>Relation to
FACA</header><text>The provisions of section 14 of the Federal Advisory
Committee Act shall not apply to the commission.</text>
</subsection></section><section id="H9B15AD569591439794446F8753A99857"><enum>103.</enum><header>Fully Funded
Small Business Health Insurance cooperatives exempted from certain State
laws</header>
<subsection id="HF81902BDABBA412696196E75373D5260"><enum>(a)</enum><header>In
general</header><text>Except as provided in this title, a Fully Funded Small
Business Health Insurance cooperative is exempt from any State law, rule,
regulation, or order to the extent that such law, rule, regulation, or order
would—</text>
<paragraph id="H1601A90A531C4437A02834F742C49EB9"><enum>(1)</enum><text>prohibit the
establishment of a Fully Funded Small Business Health Insurance
cooperative;</text>
</paragraph><paragraph id="H7040DD2326BD454397A37F5615F8A95"><enum>(2)</enum><text display-inline="yes-display-inline">impose any material requirements,
procedures, or standards (other than solvency requirements) on a Fully Funded
Small Business Health Insurance cooperative that are not generally applicable
to other entities engaged in a substantially similar business;</text>
</paragraph><paragraph id="H442C6C7496D5457EB1E69F63DC115892"><enum>(3)</enum><text>require that a
Fully Funded Small Business Health Insurance cooperative must have a minimum
number of members, common ownership or affiliation, or a certain legal
structure;</text>
</paragraph><paragraph id="H86ED97901F8D44BCAD76F4170627A38D"><enum>(4)</enum><text display-inline="yes-display-inline">require that any excess claims coverage
insurance policy issued to a Fully Funded Small Business Health Insurance
cooperative or any members of the cooperative be countersigned by an insurance
agent or broker residing in the State involved; or</text>
</paragraph><paragraph id="H9193D72F952447039F981B3205F4F3E4"><enum>(5)</enum><text>otherwise
discriminate against a Fully Funded Small Business Health Insurance cooperative
or any of its members.</text>
</paragraph></subsection><subsection id="HBDF3777FC7B04B438598B001C00E5B7"><enum>(b)</enum><header>Application of
exemptions</header><text>The exemptions specified in subsection (a) apply
to—</text>
<paragraph id="HCE5CC3A7A60342A0B8B6C87053790612"><enum>(1)</enum><text display-inline="yes-display-inline">excess claims coverage insurance provided
to—</text>
<subparagraph id="H135A2CD5456A49C291E9AB16CD694796"><enum>(A)</enum><text>a Fully Funded
Small Business Health Insurance cooperative; or</text>
</subparagraph><subparagraph id="HAA3634E936844E33005988DB3207AE00"><enum>(B)</enum><text>any small business
who is a member of a Fully Funded Small Business Health Insurance cooperative;
and</text>
</subparagraph></paragraph><paragraph id="H14AD920CBE3142749045A25BC3002671"><enum>(2)</enum><text>the provision
of—</text>
<subparagraph id="H788671C15BCA4148AE596909A069703F"><enum>(A)</enum><text display-inline="yes-display-inline">excess claims coverage insurance
coverage;</text>
</subparagraph><subparagraph id="HF3637B2F26714810822E3F9D23E1819F"><enum>(B)</enum><text display-inline="yes-display-inline">excess claims coverage insurance related
services;</text>
</subparagraph><subparagraph id="HBF45307059084579B43E924B457ED3B8"><enum>(C)</enum><text>health management
services such as—</text>
<clause id="HE8D89E28D0B54135B091CB3EE116C925"><enum>(i)</enum><text>third party
administrators;</text>
</clause><clause id="HBDCFE49D58CF473B831164A8D7FAACF3"><enum>(ii)</enum><text>disease
management;</text>
</clause><clause id="H103FA1C637A240649F6021A0CC5E63FF"><enum>(iii)</enum><text>managed care
organizations; and</text>
</clause><clause id="H64D3D3B79CCC4645832ED39DB3A0737"><enum>(iv)</enum><text>data
warehousing services; or</text>
</clause></subparagraph><subparagraph id="HA922AC46A01A45FEBFCE6C24136B9DF6"><enum>(D)</enum><text>health information
technology, including electronic health records;</text>
</subparagraph><continuation-text continuation-text-level="paragraph">to a Fully
Funded Small Business Health Insurance cooperative or member of the
cooperative.</continuation-text></paragraph></subsection><subsection id="HA52EFDEBE2514B6DB6052B465E3DAACD"><enum>(c)</enum><header>Requirement for
State licensure permitted</header><text>A State may require that a person
acting, or offering to act, as an agent or broker for a Fully Funded Small
Business Health Insurance cooperative obtain a license from that State, except
that a State may not impose any qualification or requirement which prohibits a
licensed resident or nonresident agent or broker from selling within the
State.</text>
</subsection><subsection id="H49F82C3556D6463DAD4F9D79C0C8BA8"><enum>(d)</enum><header>State authority
preserved</header>
<paragraph id="H23FEAC059702428C9F443C6D32A4DE9C"><enum>(1)</enum><text>Nothing in this
section shall be construed to affect the authority of any State to make use of
any of its powers to enforce the laws of such State with respect to which a
Fully Funded Small Business Health Insurance cooperative is not exempt under
this section.</text>
</paragraph><paragraph id="H3BE382BED69442EA00B3FC3761B1D400"><enum>(2)</enum><text>Nothing in this
section shall affect the authority of any State to bring an action in any
Federal or State court.</text>
</paragraph><paragraph id="HF31702E75CCB482298DE20FF616CD569"><enum>(3)</enum><text display-inline="yes-display-inline">Nothing in this section shall affect any
State law regarding prompt payment of benefits.</text>
</paragraph></subsection><subsection id="H4E3E1BA75FB24160B133A1DFAA96CC9F"><enum>(e)</enum><header>Requirements for
financial information</header><text>Financial information submitted to the
State insurance commissioner by a Fully Funded Small Business Health Insurance
cooperative must be certified by an independent public accountant and must
include a statement of opinion on loss and loss adjustment expense reserves
made by a certified actuary.</text>
</subsection><subsection id="H8962B34E2708434E986719A696C5BA78"><enum>(f)</enum><header>Fiduciary
responsibility</header>
<paragraph id="HAA53A845C9284202A184163BA442C5EF"><enum>(1)</enum><header>In
general</header><text>Each fiduciary (as defined in paragraph (3)(A)) of a
Fully Funded Small Business Health Insurance cooperative shall exercise
fiduciary responsibility (as defined in paragraph (3)(B)) in relation to
activities of the cooperative.</text>
</paragraph><paragraph id="H6CAA41F43D3D49A2B8B15174BD4A0B0"><enum>(2)</enum><header>State and Federal
Rights of Action</header>
<subparagraph id="HFE43C9AF99DB45DFAFB27FB6ADCE8B00"><enum>(A)</enum><header>Limitations on
liability under State or Federal law</header><text display-inline="yes-display-inline">In the case of a bona fide association or
financial cooperative organization of individuals with a common affiliation
(such as employment, labor union membership, or place of residence) that forms
a Fully Funded Small Business Health Insurance cooperative in accordance with
this Act, such association or organization shall not be liable in any action
under State or Federal law for the actions of such cooperative except insofar
as the association or organization is acting as a fiduciary with respect to the
cooperative.</text>
</subparagraph><subparagraph id="H581A548455584D4A9CD1523BF97B7B33"><enum>(B)</enum><header>Exclusive
Federal remedy for fiduciary breaches</header><text display-inline="yes-display-inline">To the extent that such association or
organization exercises control over such cooperative and has breached a
fiduciary responsibility to its membership in the formation or operation of
such cooperative, a member of the association or organization may seek a remedy
for such breach only in Federal court.</text>
</subparagraph><subparagraph id="H29D2FD8EC3424E75B413CFD0437414AF"><enum>(C)</enum><header>Limitation on
vicarious liability</header><text>A fiduciary shall not be vicariously liable
for the actions (including a failure to act) of an agent of the fiduciary in
the absence of—</text>
<clause id="H49A4C8C13E1F4E549074A009D2D5969"><enum>(i)</enum><text>actual knowledge of
the fiduciary; and</text>
</clause><clause id="H661D7B8781294E20A47F578BCD40F097"><enum>(ii)</enum><text>approval or
acquiescence by the fiduciary in the action (or failure to act).</text>
</clause></subparagraph></paragraph><paragraph id="HCFBA1D1BF69149C29F65FE7D93351B17"><enum>(3)</enum><header>Definitions</header><text>For
purposes of this subsection:</text>
<subparagraph id="HD362F552FD5F4D39BCC84D298CB769CE"><enum>(A)</enum><header>Fiduciary</header><text>The
term <term>fiduciary</term>, with respect to a Fully Funded Small Business
Health Insurance cooperative—</text>
<clause id="H71B8C3F7BC5E4FE2A3429D4EE9B22B42"><enum>(i)</enum><text>means an officer,
agent, or employee of the cooperative; and</text>
</clause><clause id="H116ECEF6B1DC4583A7EDFD586B061DDC"><enum>(ii)</enum><text>includes any
other person acting in concert with any such officer, agent, or employee with
respect to the cooperative, if such other person has actual notice of such
order.</text>
</clause></subparagraph><subparagraph id="HB8E375C207884311975E5F5DB1A39DC2"><enum>(B)</enum><header>Fiduciary
responsibility</header><text>The term <term>fiduciary responsibility</term>
means, with respect to a fiduciary of a cooperative, acting prudently and
solely in the interest of the cooperative participants, including in the case
of actions with respect to the selection and monitoring of the cooperative’s
relationship with a primary insurer and reinsurer.</text>
</subparagraph></paragraph></subsection><subsection id="H39827D711589498EB67EF58065AFB050"><enum>(g)</enum><header>Effective
date</header><text>This section shall apply to Fully Funded Small Business
Health Insurance cooperative on and after the date of the enactment of this
Act.</text>
</subsection></section><section id="H0ACEB4042D3346C195DD7D1BD6AE6E00"><enum>104.</enum><header>Preservation of
State benefit mandates</header><text display-inline="no-display-inline">Notwithstanding any other provision of this
title a primary health insurer to which this title applies shall not be
exempted from benefit mandates under State law.</text>
</section><section id="H93C947C637EA4B5EABB5D27D6C2C5FFB"><enum>105.</enum><header>Access to
claims reporting data</header>
<subsection id="H7BCF7E59300849A1948DE3CEC79B00BB"><enum>(a)</enum><header>Federal
preemption</header><text>No law, regulation, or administrative action of a
State or political subdivision thereof, or any decision or order rendered by a
court under State law, shall have any effect if such law, regulation, or
decision conflicts with, hinders, poses an obstacle to or frustrates the
purposes of this section.</text>
</subsection><subsection id="HB577946AC9684502BA00D28B42197CDD"><enum>(b)</enum><header>Requirements
upon receipt and request of claims information</header>
<paragraph id="H070E0328AB0E4705AD7F26AD82FEB9C7"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Not later than the
30th day after the date a health insurance issuer (as defined in section
2791(b)(2) of the Public Health Service Act), contracted to provide fully
funded health insurance to members of a Fully Funded Small Business Health
Insurance cooperative (referred to in this section as a
<quote>Cooperative</quote>), receives a written request for a report of claim
information from the fiduciary (as defined in section 103(f)(3)(A)) of the
Cooperative, the health insurance issuer shall provide the report to such
fiduciary in accordance with this subsection.</text>
</paragraph><paragraph id="HA29E4267CE0A4AFF9434F110F4A6C172"><enum>(2)</enum><header>Limitation on
obligation</header><text>The health insurance issuer is not obligated to
provide a report under this subsection—</text>
<subparagraph id="H0DE685F8DE6C436FB25120D2AB538CDA"><enum>(A)</enum><text>regarding a
particular employer or group health plan more than twice in any 12-month
period; or</text>
</subparagraph><subparagraph id="H26DDA4EE6EB84AE0B58772C3C83D28B8"><enum>(B)</enum><text display-inline="yes-display-inline">unless the request is made not later than
the second anniversary of the date of termination of coverage under a group
health plan issued by the health insurance issuer.</text>
</subparagraph></paragraph><paragraph id="H8147664C4F754185883ECF3F1F57E2C"><enum>(3)</enum><header>Form of
report</header><text>A health insurance issuer shall provide the report of
claim information under paragraph (1) through one of the following
methods:</text>
<subparagraph id="HA76EB6BDF19A46DA91F71522170825FC"><enum>(A)</enum><text>In written
form.</text>
</subparagraph><subparagraph id="H42C42E89CD504374B3DF5D00F13957B7"><enum>(B)</enum><text>Through an
electronic file transmitted by secure electronic mail or a file transfer
protocol site.</text>
</subparagraph><subparagraph id="H1EDFCF95F659494E8B73896661CC92C4"><enum>(C)</enum><text>By making the
required information available through a secure website or web portal
accessible by the Cooperative fiduciary.</text>
</subparagraph></paragraph><paragraph id="H6C0D8F92C6074BFCACB4B4A53FCF29DF"><enum>(4)</enum><header>General contents
of report</header><text>A report of claim information provided under paragraph
(1) shall contain all information available to the health insurance issuer that
is responsive to the request made under such paragraph, including, subject to
paragraphs (6) through (8), protected health information, for the 36-month
period preceding the date of the report, or for the entire period of coverage,
whichever period is shorter.</text>
</paragraph><paragraph id="H315B6C566E424168BF626175CB004812"><enum>(5)</enum><header>Specific
contents</header><text>Subject to paragraphs (6) through (8), a report under
paragraph (1) shall include the following:</text>
<subparagraph id="H6611C3B6964D4E0DADCD586F5297FE7D"><enum>(A)</enum><text>Aggregate paid
claims experience by month, including claims experience for medical, dental,
and pharmacy benefits, as applicable.</text>
</subparagraph><subparagraph id="HCE3A052B868F4B7AB8B07097A877A4A0"><enum>(B)</enum><text>Total premium paid
by month.</text>
</subparagraph><subparagraph id="HD17D157A95AB455A863100EAA1001D1B"><enum>(C)</enum><text>Total number of
covered employees on a monthly basis by coverage tier, including whether
coverage was for—</text>
<clause id="HD1752CEE31F946F2909F4649DF505EB1"><enum>(i)</enum><text>an
employee only;</text>
</clause><clause id="HD936A659492F45B7AE2998F7CDD4002C"><enum>(ii)</enum><text>an
employee with dependents only;</text>
</clause><clause id="HB6666F8E558F433180688ECF07C9C76D"><enum>(iii)</enum><text>an
employee with a spouse only; or</text>
</clause><clause id="H62D626F7D55E46289B32CCB05F6DD8B2"><enum>(iv)</enum><text>an
employee with a spouse and dependents.</text>
</clause></subparagraph><subparagraph id="H36BAB1B74FE44B18B0EA169F2DA67E4D"><enum>(D)</enum><text>The total dollar
amount of claims pending as of the date of the report.</text>
</subparagraph><subparagraph id="H69380FB0E383474A8EF1BD4437E98E"><enum>(E)</enum><text>A separate
description and individual claims report for any individual whose total paid
claims exceed $10,000 during the 12-month period preceding the date of the
report, including the following information related to the claims for that
individual:</text>
<clause id="HF41E999E5BB94D55BEB9504D00DF768"><enum>(i)</enum><text>A
unique identifying number, characteristic, or code for the individual.</text>
</clause><clause id="H01D0FF5C3BB74433BD99355578C541EE"><enum>(ii)</enum><text>The
amounts paid.</text>
</clause><clause id="HC98F6CFBA722431097DCD6E26F990329"><enum>(iii)</enum><text>Dates of
service.</text>
</clause><clause id="H46225228AD484A5CA6539CBE3112458B"><enum>(iv)</enum><text>Applicable
procedure codes and diagnosis codes.</text>
</clause></subparagraph><subparagraph id="H5D90454768F6422690720026F3FDE313"><enum>(F)</enum><text>A statement
describing precertification requests for hospital stays of five days or longer
that were made during the 30-day period preceding the date of the report for
claims that are not part of the report described by subparagraphs (A) through
(E).</text>
</subparagraph></paragraph><paragraph id="HD488D888F1B746D8B3C65274047079D9"><enum>(6)</enum><header>Protected health
information</header><text display-inline="yes-display-inline">A health
insurance issuer may not disclose, in a report of claim information provided
under this section, protected health information if the health insurance issuer
is prohibited from disclosing such information under the regulations
promulgated under section 264(c) of the Health Insurance Portability and
Accountability Act of 1996 (Public Law 104–191). To withhold information in
accordance with this paragraph, the health insurance issuer shall—</text>
<subparagraph id="HD1EEB80A8B0C4146A25E15F9C53D9574"><enum>(A)</enum><text>notify the
requesting Cooperative fiduciary that information is being withheld; and</text>
</subparagraph><subparagraph id="H6DCD0FC76C56459A8810B28F7BECAD13"><enum>(B)</enum><text>provide to the
Cooperative fiduciary a list of categories of claim information that the health
insurance issuer has determined are subject to the more stringent privacy
restrictions under such regulations.</text>
</subparagraph></paragraph><paragraph id="HC61A783D0EC04D4492D185EE6042476F"><enum>(7)</enum><header>Cooperative
fiduciary certification</header><text>A Cooperative fiduciary is entitled to
receive protected health information under subparagraphs (E) and (F) of
paragraph (5) only after the Cooperative fiduciary makes to the health
insurance issuer a certification substantially similar to the following:
<quote>I hereby certify that the Cooperative will safeguard and limit the use
and disclosure of protected health information that is received from the group
health plan to perform the plan administration functions.</quote>.</text>
</paragraph><paragraph id="HA711EDF290934D1FAA331CE1A0964FA3"><enum>(8)</enum><header>Information as
of date of termination of coverage</header><text>In the case of a request made
under paragraph (1) after the date of termination of coverage, the report shall
contain all information available to the health insurance issuer as of the date
of the report that is responsive to the request, including protected health
information, and including the information described in subparagraphs (A)
through (F) of paragraph (5) for the period described in such paragraph
preceding the date of termination of coverage or for the entire policy period,
whichever period is shorter. Notwithstanding this paragraph, such a report may
not include the protected health information described in subparagraph (E) or
(F) of paragraph (5) unless a certification has been provided in accordance
with paragraph (7).</text>
</paragraph></subsection><subsection id="H0FFE7309C777479ABD6E00BA76923E2F"><enum>(c)</enum><header>Request for
additional information</header>
<paragraph id="H2A4AD51CFC8845FCAADD686D4F7C895E"><enum>(1)</enum><header>In
general</header><text>On receipt of a report required by subsection (b), the
Cooperative fiduciary may review the report and, not later than the 10th day
after the date the report is received, may make a written request to the health
insurance issuer for additional information in accordance with this subsection
for specified individuals.</text>
</paragraph><paragraph id="H2F5A265E81EC43EBB74B39715D2FF0B7"><enum>(2)</enum><header>Provision of
additional information</header><text>With respect to a request for additional
information under paragraph (1) concerning specified individuals for whom
claims information has been provided under subsection (b)(5)(E), the health
insurance issuer shall provide additional information on the prognosis or
recovery if available and, for individuals in active case management, the most
recent case management information, including any future expected costs and
treatment plan, that relate to the claims for that individual.</text>
</paragraph><paragraph id="HD1AD957D3EDF41699707F4C9DFFD2DE1"><enum>(3)</enum><header>Timely
response</header><text>The health insurance issuer shall respond to the request
for additional information under this subsection not later than the 15th day
after the date of receiving the request unless the Cooperative fiduciary agrees
to a request for additional time.</text>
</paragraph><paragraph id="H0E60392E7A76412CB8E6C6D444FE17A1"><enum>(4)</enum><header>Certification
requirement</header><text>The health insurance issuer is not required to
produce the report described by this subsection unless a certification has been
provided in accordance with subsection (b)(7).</text>
</paragraph></subsection><subsection id="H64E68F8A9DC04771BACA9C1436C60571"><enum>(d)</enum><header>Limitation on
liability for disclosure of information</header><text>A health insurance issuer
that releases information, including protected health information, in
accordance with this section has not violated a standard of care and is not
liable for civil damages resulting from, and is not subject to criminal
prosecution for, releasing that information.</text>
</subsection><subsection id="H02F7D5FECBF8489AA05D8DD93343C05B"><enum>(e)</enum><header>Penalties</header><text>A
health insurance issuer that does not comply with a request for information in
accordance with this section is subject to administrative penalties in an
amount not to exceed $25,000 per affected individual.</text>
</subsection></section><enum>II</enum><header>Small Business
CHOICE Credit</header>
<section id="HB2EAEC2131BD48AE99305515608FA1FF"><enum>201.</enum><header>Small Business
CHOICE credit</header>
<subsection id="H5DAA9F60F28B4F84A2208EC823AC9205"><enum>(a)</enum><header>In
general</header><text>Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to business related credits) is amended
by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H2855C70039CF427F88979B7D8EA45C83" style="OLC">
<section id="HAC790081B27C41FAA85F9938C6828F55"><enum>45R.</enum><header>Small Business
CHOICE credit</header>
<subsection id="H823F0DBC8F8C4A6AA0F0D2ED42812082"><enum>(a)</enum><header>In
general</header><text>For purposes of section 38, the small business CHOICE
credit determined under this section for any taxable year is an amount equal to
65 percent of the amount paid or incurred by the employer for self only or
family coverage of an employee under a qualified employer-subsidized health
coverage for eligible coverage months beginning in the taxable year.</text>
</subsection><subsection id="HA82876A37DCD4932B84D1B26E5EC792"><enum>(b)</enum><header>Limitations</header>
<paragraph id="HD1113FB3CB3B4DE2829FC08759777046"><enum>(1)</enum><header>Size
limitation</header><text display-inline="yes-display-inline">The credit allowed
under subsection (a) shall not be allowed with respect to more than 100
employees of the employer for any eligible coverage month beginning in any
taxable year.</text>
</paragraph><paragraph id="H61CFEC101EA348F4BD581651B46CD1E9"><enum>(2)</enum><header>Wellness program
requirement</header>
<subparagraph id="H92C2D97A31C64221AE7D7FBA9F560050"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The credit allowed
under subsection (a) shall not be allowed with respect to coverage of an
employee and family members of the employee unless the employer offers a
qualified small business wellness program with respect to such covered
employees and such covered family members.</text>
</subparagraph><subparagraph id="H1D97EB5ABAD34A9384B3D677FA06C08"><enum>(B)</enum><header>Exemption for
single employee firms</header><text>Subparagraph (A) shall not apply to an
employer that has only 1 employee.</text>
</subparagraph></paragraph></subsection><subsection id="HCB843C0008FE4B1980048543CBC015FC"><enum>(c)</enum><header>Definitions and
special rule</header><text>For purposes of this section:</text>
<paragraph id="H9BE707902CE04010ADC402E1B6494943"><enum>(1)</enum><header>Eligible
coverage month</header><text>The term <term>eligible coverage month</term>
means any month if—</text>
<subparagraph id="HC704F8E537614EB0BE8168A16016A519"><enum>(A)</enum><text>as of the first
day of such month, the employer is a member of a Fully Funded Small Business
Health Insurance cooperative and purchases excess coverage from such
cooperative’s captive insurance company; and</text>
</subparagraph><subparagraph id="H263DF8A12417477D8E0004BBE83C4C00"><enum>(B)</enum><text>for the month the
employee with respect to whom the credit is determined is covered under a
qualified employer-subsidized health coverage of the employer.</text>
</subparagraph></paragraph><paragraph id="H27EE85C432E24636800063BF3BB220BC"><enum>(2)</enum><header>Fully funded
small business health insurance cooperative</header><text>The term <term>Fully
Funded Small Business Health Insurance cooperative</term> has the meaning given
such term in section 101(2) of the Small Business CHOICE Act of 2009.</text>
</paragraph><paragraph id="H470D4E23DB6943D8B5DA37CFA8EB8DB"><enum>(3)</enum><header>Qualified
employer-subsidized health coverage</header>
<subparagraph id="H36A616B514F8428CB718B21FDA73C027"><enum>(A)</enum><header>In
general</header><text>The term <term>qualified employer-subsidized health
coverage</term> means any insurance coverage which constitutes medical care
under an insurance policy—</text>
<clause id="HAB37F7056B6041A794E9FAE79C9C221C"><enum>(i)</enum><text>which is
maintained in conjunction with excess coverage purchased from a fully funded
small business captive company and coverage purchased from a licensed primary
insurer;</text>
</clause><clause id="H85692167797541CF9EF0F302F70657CA"><enum>(ii)</enum><text>which is
available to all full-time employees working a minimum of 35 hours per week or
its monthly equivalent;</text>
</clause><clause id="H604987617AF64BB6B1768D1989512076"><enum>(iii)</enum><text>under which at
least the applicable percentage of the cost of such coverage (determined under
section 4980B) is paid or incurred by the employer;</text>
</clause><clause id="H1D84396483D1463E984D1D69FCFEE897"><enum>(iv)</enum><text>under which the
percentage of the cost of such coverage paid or incurred by the employer with
respect to highly compensated employees (as defined in section 414(q)) does not
exceed the percentage of such cost paid or incurred by the employer with
respect to employees who are not highly compensated employees; and</text>
</clause><clause id="H08BA65F9686B4E8A84E506BF77DFED4"><enum>(v)</enum><text>the
primary insurance and excess claims coverage plans are the only plans of the
employer to which the employer contributes to the cost of coverage.</text>
</clause></subparagraph><subparagraph id="H5F133830B14D4469B9E7408168F1C4AF"><enum>(B)</enum><header>Exception for
certain coverage</header><text>Such term does not include a health plan
substantially all of the coverage of which is of excepted benefits described in
section 9832(c).</text>
</subparagraph><subparagraph id="H4695CE19FC7E4ACC95ABB100BAB89723"><enum>(C)</enum><header>Applicable
percentage</header><text>For purposes of subparagraph (A), the applicable
percentage is—</text>
<clause id="H79CCE24C95534324AC19C007B00D970"><enum>(i)</enum><text>65
percent, with respect to self only coverage; and</text>
</clause><clause id="H671A8412ACA44D53B97ECA7D4D3EF170"><enum>(ii)</enum><text display-inline="yes-display-inline">35 percent, with respect to family
coverage.</text>
</clause></subparagraph></paragraph><paragraph id="H3483A08B71FA4D6DA6C8666046902128"><enum>(4)</enum><header>Qualified small
business wellness program</header><text>The term <term>qualified small business
wellness program</term> means a program which—</text>
<subparagraph id="H89A08A2C42A64DE2BBDC1C7495EC79C6"><enum>(A)</enum><text>is established by
an entity with expertise in lifestyle management and wellness tools that enable
employers and covered individuals to lower health claims and costs while
improving the health of such individuals; and</text>
</subparagraph><subparagraph id="H42B2E2FC8A6A4AFFB75BD34CB4AAAD07"><enum>(B)</enum><text>is certified by
the Secretary of Health and Human Services, in consultation with persons with
expertise in employer health promotion and wellness programs, as a qualified
small business wellness program under this section.</text>
</subparagraph></paragraph><paragraph id="HB44C495F331048BC851675C7CA09CBC9"><enum>(5)</enum><header>Small
employer</header>
<subparagraph id="H7B4C6035474340D9B7D9CE8DB8D9528"><enum>(A)</enum><header>In
general</header><text>The term <term>small employer</term> means, with respect
to a taxable year, any employer or sole proprietor which employed an average of
100 or fewer employees on business days during the preceding calendar year. For
purposes of the preceding sentence, a preceding calendar year may be taken into
account only if the employer or sole proprietor was in existence throughout
such year.</text>
</subparagraph><subparagraph id="HA679A80BBB7445FE91E7A71E75E6917"><enum>(B)</enum><header>Employers and
sole proprietors not in existence in preceding taxable year</header><text display-inline="yes-display-inline">In the case of an employer or sole
proprietor which was not in existence throughout the preceding calendar year,
the determination under subparagraph (A) shall be based on the average number
of employees that it is reasonably expected such employer or sole proprietor
will employ on business days in the current calendar year.</text>
</subparagraph></paragraph><paragraph id="H84D5FD919A944F5AADBE9677B27FBF9E"><enum>(6)</enum><header>Special rule for
first year of providing health benefits coverage</header><text display-inline="yes-display-inline">In the case of the first taxable year for
which an employer or sole proprietor is allowed a credit under this section, if
the employer or proprietor has not previous to such taxable year offered any
health benefits coverage to any employee, subsection (a) shall be applied by
substituting <quote>70 percent</quote> for <quote>65 percent</quote>.</text>
</paragraph><paragraph id="HCA6A2222A31A4369B4A7D3A3FC4C93C8"><enum>(7)</enum><header>Time when
contributions deemed made</header><text>A rule similar to the rule of section
219(f)(3) shall apply for purposes of this section.</text>
</paragraph><paragraph id="H02DDB6EFB8554585A764ECF0C67E8EB9"><enum>(8)</enum><header>Controlled
groups and predecessors</header><text>For purposes of paragraphs (5) and
(6)—</text>
<subparagraph id="H0C13A901CB98415F87C4F5DDA1B6BA41"><enum>(A)</enum><text>except as provided
by the Secretary, all persons treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 shall be treated as 1 employer; and</text>
</subparagraph><subparagraph id="H7F4BA2ADC5AC40F5BE3E52159FE72F7E"><enum>(B)</enum><text>any reference to
an employer shall include a reference to any predecessor of such
employer.</text>
</subparagraph></paragraph><paragraph id="H86812DA5C85D4C3FBF2B7F31645ED7EC"><enum>(9)</enum><header>Election to have
credit apply</header><text>This section shall apply with respect to a taxpayer
for any taxable year only if there is an election in effect by such taxpayer
(at such time and in such manner as the Secretary may by regulations prescribe)
to have this section apply for such taxable year. No deduction shall be allowed
with respect to amounts paid by the taxpayer during the taxable year for
insurance which constitutes medical care for the taxpayer or any employee of
the taxpayer if such election is in effect for such taxable
year.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H07D813FBA9C74469AC4869C01D1C8D5"><enum>(b)</enum><header>Credit To be part
of general business credit</header><text>Subsection (b) of section 38 of such
Code (relating to general business credit) is amended by striking
<quote>plus</quote> at the end of paragraph (34), by striking the period at the
end of paragraph (35) and inserting <quote>plus</quote>, and by adding at the
end the following new paragraph:</text>
<quoted-block id="H046E60D01DD049AC95DAF7D513006FD1" style="OLC">
<paragraph id="HA9EA32CDFB7249BA856FA0E283901477"><enum>(36)</enum><text display-inline="yes-display-inline">the Small Business CHOICE credit determined
under section
45R(a).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9CB8040EC8CD4FC8BAB7C20554DE9EC8"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by adding at the end the
following new item:</text>
<quoted-block display-inline="no-display-inline" id="H033C11EB676549BBAB914EC124CAA77" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 45R. Small Business CHOICE
credit.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H6D5B55D6C3B14A6600DB70761920466F"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to amounts
paid for eligible coverage months beginning in taxable years beginning after
December 31, 2009.</text>
</subsection></section>