1.This Act may be cited as the
Small Business Health Options Program
Act of 2009
or the SHOP Act
.
2.Amendment to the
Public Health Service ActThe
Public Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the
end the following:
<enum>XXXI</enum><header>Small business
health options program</header>
<section id="ID71A67CC90F114D23BDD48355A2E9E270"><enum>3101.</enum><header>Definitions</header>
<subsection id="id68CF097B60ED49F3A879F005BF6E0EDE"><enum>(a)</enum><header>In
general</header><text>In this title:</text>
<paragraph id="idE862CEEE2A78410F940A76DA08ECABBB"><enum>(1)</enum><header>Administrator</header><text>The
term <term>Administrator</term> means the Administrator appointed under section
3102(a).</text>
</paragraph><paragraph id="idB9787AFD31B24BF1B102BA3CBAF3F81C"><enum>(2)</enum><header>Small Business
Health Board</header><text>The term <term>Small Business Health Board</term>
means the Board established under section 3102(d).</text>
</paragraph><paragraph id="IDFF063123E58A4B7F83267A0797924AAF"><enum>(3)</enum><header>Employee</header><text>The
term <term>employee</term> has the meaning given such term under section 3(6)
of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act
of 1974</act-name> (29 U.S.C. 1002(6)). Such term shall not include an employee
of the Federal Government.</text>
</paragraph><paragraph id="ID7DBE7BAF87964032B961AB5C089D17A4"><enum>(4)</enum><header>Employer</header><text>The
term <term>employer</term> has the meaning given such term under section 3(5)
of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act
of 1974</act-name> (29 U.S.C. 1002(5)), except that such term shall include
employers who employed an average of at least 1 but not more than 100 employees
(who worked an average of at least 35 hours per week) on business days during
the year preceding the date of application, and shall include self-employed
individuals with either not less than $5,000 in net earnings or not less than
$15,000 in gross earnings from self-employment in the preceding taxable year.
Such term shall not include the Federal Government.</text>
</paragraph><paragraph id="ID49a5b948c37647eeb4baf1439f5cc5be"><enum>(5)</enum><header>Health
insurance coverage</header><text>The term <term>health insurance
coverage</term> has the meaning given such term in section 2791.</text>
</paragraph><paragraph id="id99CF0FF7D64A4EAAA0F52D3D5187A01E"><enum>(6)</enum><header>Health
insurance issuer</header><text>The term <term>health insurance issuer</term>
has the meaning given such term in section 2791.</text>
</paragraph><paragraph id="IDC9C6A844FD854225B94F93B7AA05BBA4"><enum>(7)</enum><header>Health
status-related factor</header><text>The term <term>health status-related
factor</term> has the meaning given such term in section 2791(d)(9).</text>
</paragraph><paragraph id="ID219A612E0FD04A38B015C13D1645D326"><enum>(8)</enum><header>Participating
employer</header><text>The term <term>participating employer</term> means an
employer that—</text>
<subparagraph id="ID11004CE279F3489A86DCB08B8E4C1F8D"><enum>(A)</enum><text>elects to provide
health insurance coverage under this title to its employees; and</text>
</subparagraph><subparagraph id="ID2BEFECC88DB5429B9A04AC8DD2C0B151"><enum>(B)</enum><text>is not offering
other comprehensive health insurance coverage to such employees.</text>
</subparagraph></paragraph></subsection><subsection id="IDDA7A856F6EF7446FBF104EF8731A71CA"><enum>(b)</enum><header>Application of
Certain Rules in Determination of Employer Size</header><text>For purposes of
subsection (a)(3):</text>
<paragraph id="ID1D30459D5EE0484CAFA0EB7CE123E3D3"><enum>(1)</enum><header>Application of
aggregation rule for employers</header><text>All persons treated as a single
employer under subsection (b), (c), (m), or (o) of section 414 of the Internal
Revenue Code of 1986 shall be treated as 1 employer.</text>
</paragraph><paragraph id="IDB9662BFF03F04364B2A265411313ACCF"><enum>(2)</enum><header>Employers not
in existence in preceding year</header><text>In the case of an employer which
was not in existence for the full year prior to the date on which the employer
applies to participate, the determination of whether such employer meets the
requirements of subsection (a)(4) shall be based on the average number of
employees that it is reasonably expected such employer will employ on business
days in the employer’s first full year.</text>
</paragraph><paragraph id="ID538A160901EC4945AAB650A1A7870AF8"><enum>(3)</enum><header>Predecessors</header><text>Any
reference in this subsection to an employer shall include a reference to any
predecessor of such employer.</text>
</paragraph></subsection><subsection id="ID2356EF27527B4039A5AA82E9309AD174"><enum>(c)</enum><header>Waiver and
Continuation of Participation</header>
<paragraph id="ID40FC4FA16FC94C759103A77FF2746C8D"><enum>(1)</enum><header>Waiver</header><text>The
Administrator may waive the limitations relating to the size of an employer
which may participate in the health insurance program established under this
title on a case by case basis if the Administrator determines that such
employer makes a compelling case for such a waiver. In making determinations
under this paragraph, the Administrator may consider the effects of the
employment of temporary and seasonal workers and other factors.</text>
</paragraph><paragraph id="IDD5F2C1B6010A481F84A26A0E568A8CD0"><enum>(2)</enum><header>Continuation of
participation</header><text>An employer participating in the program under this
title that experiences an increase in the number of employees so that such
employer has in excess of 100 employees, may not be excluded from participation
solely as a result of such increase in employees.</text>
</paragraph></subsection><subsection id="ID812F72719A7640768B6A71D864BD070A"><enum>(d)</enum><header>Treatment of
Health Insurance Coverage as Group Health Plan</header><text>Health insurance
coverage offered under this title shall be treated as a group health plan for
purposes of applying the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (29 U.S.C. 1001 et seq.) except to the
extent that a provision of this title expressly provides otherwise.</text>
</subsection><subsection id="ID47adc4318c7a4f77a019a4ac321e93a6"><enum>(e)</enum><header>Application of
HIPAA Rules</header><text>Subject to the provisions of this title, parts A and
C of title XXVII shall apply to health insurance coverage offered under this
title by health insurance issuers. Subject to section 2723, a State may modify
State law as appropriate to provide for the enforcement of such provisions for
health insurance coverage offered in the State under this title. Part 7 of
subtitle B of title I of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1181 et seq.) shall continue to apply to group health plans offering
coverage under this title. Subtitle K of the Internal Revenue Code of 1986
shall continue to apply to covered employers and group health plans offering
coverage under this title.</text>
</subsection></section><section id="ID23fe99610dd64252ba140c4541e8d0c9"><enum>3102.</enum><header>Administration
of small business health insurance pool</header>
<subsection id="idFF1D27EEE7D44AF3B346A5D74CB137CF"><enum>(a)</enum><header>Office and
Administrator</header><text display-inline="yes-display-inline">The Secretary
shall designate an office within the Department of Health and Human Services to
administer the program under this title. Such office shall be headed by an
Administrator to be appointed by the Secretary.</text>
</subsection><subsection id="id5541F7837E784A6297E8A1E39755536F"><enum>(b)</enum><header>Qualifications</header><text>The
Secretary shall ensure that the individual appointed to serve as the
Administrator under subsection (a) has an appropriate background with
experience in health insurance, healthcare management, or health policy.</text>
</subsection><subsection id="ID62ba1b10794b4cc7b59af0515c7504ec"><enum>(c)</enum><header>Duties</header><text>The
Administrator shall—</text>
<paragraph id="IDb72d8396c4db4b3db12f6f4ff5f7b7ec"><enum>(1)</enum><text>enter into
contracts with health insurance issuers to provide health insurance coverage to
individuals and employees who enroll in health insurance coverage in accordance
with this title;</text>
</paragraph><paragraph id="id6C6E5EB3E4694BB891FB41C651ED18CA"><enum>(2)</enum><text>maintain the
contracts for health insurance policies when an employee elects which health
plan offered under this title to enroll in as permitted under section
3107(d)(7);</text>
</paragraph><paragraph id="IDdb15050978744aa09162d84cbe3996c8"><enum>(3)</enum><text>ensure that
health insurance issuers comply with the requirements of this title;</text>
</paragraph><paragraph id="ID274f8c8e36e644e193a142dfc201b3b7"><enum>(4)</enum><text>ensure that
employers meet eligibility requirements for participation in the health
insurance pool established under this title;</text>
</paragraph><paragraph id="ID90b312ca6852426b9aff1e3d38274129"><enum>(5)</enum><text>enter into
agreements with entities to serve as navigators, as defined in section
3103;</text>
</paragraph><paragraph id="IDc75b5e76b79b4b3593c049f08cfdf02c"><enum>(6)</enum><text>collect premiums
from employers and employees and make payments for health insurance
coverage;</text>
</paragraph><paragraph id="IDa717b64a1276433da9a41c7724a8d023"><enum>(7)</enum><text>collect other
information needed to administer the program under this title;</text>
</paragraph><paragraph id="ID33c51e3d5fd84d4fa572617e0e263f93"><enum>(8)</enum><text>compile, produce,
and distribute information (which shall not be subject to review or
modification by the States) to employers and employees (directly and through
navigators) concerning the open enrollment process, the health insurance
coverage available through the pool, and standardized comparative information
concerning such coverage, which shall be available through an interactive
Internet website, including a description of the coverage plans available in
each State and comparative information, about premiums, index rates, benefits,
quality, and consumer satisfaction under such plans;</text>
</paragraph><paragraph id="idE1009F535C8347849894164D9890D722"><enum>(9)</enum><text>provide
information to health insurance issuers, including, at the discretion of the
Administrator, notification when proposed rates are not in a competitive
range;</text>
</paragraph><paragraph id="ID96b07bdbb0b94fccafda094e2e4aa315"><enum>(10)</enum><text>conduct public
education activities (directly and through navigators) to raise the awareness
of the public of the program under this title and the associated tax credit
under the Internal Revenue Code of 1986;</text>
</paragraph><paragraph id="ID4a0c3bd6f24b43318493715b1a1bb885"><enum>(11)</enum><text>develop methods
to facilitate enrollment in health insurance coverage under this title,
including through the use of the Internet;</text>
</paragraph><paragraph id="IDca3af42dacbd4e20bf770b11775e5a64"><enum>(12)</enum><text>if appropriate,
enter into contracts for the performance of administrative functions under this
title as permitted under section 3109;</text>
</paragraph><paragraph id="IDf7e1915ba0a84d168554869e264c13cd"><enum>(13)</enum><text>carefully
consider benefit recommendations that are endorsed by at least two-thirds of
the members of the Small Business Health Board;</text>
</paragraph><paragraph id="ID7c2ed601865546ea9d68769f370f46ee"><enum>(14)</enum><text>establish and
administer a contingency fund for risk corridors as provided for in section
3108;</text>
</paragraph><paragraph id="ID45feabff2daa443db919eb2323f14f85"><enum>(15)</enum><text>coordinate with
State insurance regulators to ensure timely and effective consideration of
complaints, grievances, and appeals; and</text>
</paragraph><paragraph id="idD60A480FD5694913A9B3860830C47478"><enum>(16)</enum><text>carry out any
other activities necessary to administer this title.</text>
</paragraph></subsection><subsection id="idD3A2A8C7B43A4B3CB83D3E2C6DA18AFC"><enum>(d)</enum><header>Limitations</header><text>The
Administrator shall not—</text>
<paragraph id="ID5b4338f265e6447abb1036c4c49ac3c9"><enum>(1)</enum><text>negotiate
premiums with participating health insurance issuers; or</text>
</paragraph><paragraph id="idFD6CABC0B5884C57B3097E97D2911F66"><enum>(2)</enum><text>exclude health
insurance issuers from participating in the program under this title except for
violating contracts or the requirements of this title.</text>
</paragraph></subsection><subsection id="ID3ba1305adb684202915f7615a7e9e49b"><enum>(e)</enum><header>Small Business
Health Board</header>
<paragraph id="ID3b03599ecb684753b16e84a5b882cf88"><enum>(1)</enum><header>In
general</header><text>There shall be established a Small Business Health Board
to monitor the implementation of the program under this title and to make
recommendations to the Administrator concerning improvements in the
program.</text>
</paragraph><paragraph id="IDe89cfe2480b547828ebf2619ecd3dbb9"><enum>(2)</enum><header>Appointment</header><text>The
Comptroller General shall appoint 13 individuals who have expertise in
healthcare benefits, financing, economics, actuarial science, or other related
fields, to serve as members of the Small Business Health Board. In appointing
members under the preceding sentence, the Comptroller General shall ensure that
such members include—</text>
<subparagraph id="IDc956d0b909794d96903c670839bcd84f"><enum>(A)</enum><text>a mix of
different types of professionals;</text>
</subparagraph><subparagraph id="id94079BE262CB4BC1BB7B1872A89D606F"><enum>(B)</enum><text>a broad
geographic representation;</text>
</subparagraph><subparagraph id="ID8719db3e0a554e92aaddc16fd2902f58"><enum>(C)</enum><text>not less than 3
individuals with an employee perspective;</text>
</subparagraph><subparagraph id="id6F0E35110BDE4334BFF69BF9D5576952"><enum>(D)</enum><text>not less than 3
individuals with a small business perspective, at least 1 of whom shall have a
self-employed perspective;</text>
</subparagraph><subparagraph id="idD57CE8406C364E6F827A9D5E336F4DFB"><enum>(E)</enum><text>not less than 1
individual with a background in insurance regulation; and</text>
</subparagraph><subparagraph id="IDb75b24657f0540cea4e65e20d6850008"><enum>(F)</enum><text>not less than 1
individual with a patient perspective.</text>
</subparagraph></paragraph><paragraph id="ID58c3d5ba0cab47feab4cf1f4ae857840"><enum>(3)</enum><header>Terms</header><text>Members
of the Small Business Health Board shall serve for a term of 3 years, such
terms to end on March 15 of the applicable year, except as provided in
paragraph (4). The Comptroller General shall stagger the terms for members
first appointed. A member may be reappointed after the expiration of a term. A
member may serve after expiration of a term until a successor has been
appointed.</text>
</paragraph><paragraph id="ID6b744929441c4191a37045aa4d785612"><enum>(4)</enum><header>Small business
representatives</header><text>Beginning on March 16, 2013, 3 of the individuals
the Comptroller General appoints to the Small Business Health Board shall be
representatives of the 3 navigators through which the largest number of
individuals have enrolled for health insurance coverage over the previous
2-year period. Such appointees shall serve for 1 year. The Comptroller General
shall consider for appointment in years prior to the date specified in this
paragraph, individuals who are representatives of entities that may serve as
navigators.</text>
</paragraph><paragraph id="id5A182A6265FD4C54BEE11B3EE49A491E"><enum>(5)</enum><header>Chairperson;
vice chairperson</header><text>The Comptroller General shall designate a member
of the Small Business Health Board, at the time of appointment of such member,
to serve as Chairperson and a member to serve as Vice Chairperson for the term
of the appointment, except that in the case of a vacancy of either such
position, the Comptroller General may designate another member to serve in such
position for the remainder of such member’s term.</text>
</paragraph><paragraph id="idC7E94130D8C34A2EAFD30E54A04B5ADB"><enum>(6)</enum><header>Compensation</header><text>While
serving on the business of the Small Business Health Board (including travel
time), a member of the Small Business Health Board shall be entitled to
compensation at the per diem equivalent of the rate provided for level IV of
the Executive Schedule under section 5315 of title 5, United States Code, and
while so serving away from home and the member’s regular place of business, a
member may be allowed travel expenses, as authorized by the Chairperson of the
Small Business Health Board.</text>
</paragraph><paragraph id="id03C629529D894215B41C28E39433E8B9"><enum>(7)</enum><header>Disclosure</header><text>The
Comptroller General shall establish a system for the public disclosure, by
members of the Small Business Health Board, of financial and other potential
conflicts of interest.</text>
</paragraph><paragraph id="id090F6D1FC155439994AD0B0D78F12EBF"><enum>(8)</enum><header>Meetings</header><text>The
Small Business Health Board shall meet at the call of the Chairperson. Each
such meeting shall be open to the public.</text>
</paragraph><paragraph id="IDd1594b1af5294c50aed5d4bbd489efe6"><enum>(9)</enum><header>Duties</header><text>The
Small Business Health Board shall—</text>
<subparagraph id="ID546c34cc585d4c698f0ede3c53207e24"><enum>(A)</enum><text>provide general
oversight of the program under this title and make recommendations to the
Administrator;</text>
</subparagraph><subparagraph id="IDce87759851764ad9866acd74d0db1351"><enum>(B)</enum><text>monitor, review,
seek public input on, and make recommendations to the Administrator on the
benefit requirements for nationwide plans in this title;</text>
</subparagraph><subparagraph id="IDef1b6e6030624ce3a239f208f610efa5"><enum>(C)</enum><text>make
recommendations concerning information that the Administrator, health plans,
and navigators should distribute to employers and employees participating in
the program under this title; and</text>
</subparagraph><subparagraph id="IDaf3bcb61c0aa4a2aa33a26b8c5f2e827"><enum>(D)</enum><text>monitor and make
recommendations to the Administrator on adverse selection within the program
under this title and between the coverage provided under the program and the
State-regulated health insurance market.</text>
</subparagraph></paragraph><paragraph id="id9191443E010F4C62B25FB80C4B6A74F1"><enum>(10)</enum><header>Approval of
recommendations</header><text>A recommendation shall require approval by not
less than two-thirds of the members of the Board.</text>
</paragraph><paragraph id="id0F45EEA0F6BD48DD999CD768504BAA6A"><enum>(11)</enum><header>Public notice
and comment on recommendations</header><text>The Administrator shall—</text>
<subparagraph id="idE14DDD33E10C4561B2BF04EC494B0DD5"><enum>(A)</enum><text>publish
recommendations by the Small Business Health Board in the Federal
Register;</text>
</subparagraph><subparagraph id="id0B9F9A9601CD4D4CBEEB1C079B1B8FE9"><enum>(B)</enum><text>solicit written
comments concerning such recommendations; and</text>
</subparagraph><subparagraph id="id0FF1E1505A804363BF75617897F454DB"><enum>(C)</enum><text>provide an
opportunity for the presentation of oral comments concerning such
recommendations at a public meeting.</text>
</subparagraph></paragraph></subsection></section><section id="ID7aa93ad14fc14cf8b719cd07eba5343e"><enum>3103.</enum><header>Navigators</header>
<subsection id="ID5e7a4937dba447479d834a0f3eb2b5ef"><enum>(a)</enum><header>In
general</header><text>The Administrator shall enter into agreements with
private and public entities, beginning a reasonable period prior to the
beginning of the first calendar year in which health insurance coverage is
offered under this title, under which such entities will serve as
navigators.</text>
</subsection><subsection id="IDc7b0faafa8b0495c9c77788c46aea514"><enum>(b)</enum><header>Eligibility</header><text>To
be eligible to enter into an agreement under subsection (a), an entity shall
demonstrate to the Administrator that the entity has existing relationships
with, or could readily establish relationships with, employers or employees and
self-employed individuals, likely to be eligible to participate in the program
under this title. Such entities may include trade, industry and professional
associations, chambers of commerce, unions, small business development centers,
and other entities that the Administrator determines to be capable of carrying
out the duties described in subsection (c).</text>
</subsection><subsection id="IDe194d1def4f04a238a1534ccb4843e20"><enum>(c)</enum><header>Duties</header><text>An
entity that serves as a navigator under an agreement under subsection (a)
shall—</text>
<paragraph id="IDfe8246d8e1c844eeb6eedd4798dc046a"><enum>(1)</enum><text>coordinate with
the Administrator on public education activities to raise awareness of the
program under this title;</text>
</paragraph><paragraph id="ID1182b807faa04aab81f5523ee3007643"><enum>(2)</enum><text>distribute
information developed by the Administrator on the open enrollment process,
private health plans available through the program under this title, and
standardized comparative information about the health insurance coverage under
the program;</text>
</paragraph><paragraph id="IDcf475ba3b9e14536aef5ec5e7608055e"><enum>(3)</enum><text>distribute
information about the availability of the tax credit under section 36 of the
Internal Revenue Code of 1986 as added by the <short-title>Small Business Health Options Program Act of
2009</short-title>;</text>
</paragraph><paragraph id="IDae6b894f72fd43d5b62b197568a3760f"><enum>(4)</enum><text>provide referrals
to the applicable State agency or agencies for any enrollee with a grievance,
complaint, or question regarding their health insurance issuer, their coverage
or plan, or a determination under such coverage or plan;</text>
</paragraph><paragraph id="IDefb1b628e3ac49cc92deb38c5325a1d0"><enum>(5)</enum><text>assist employers
and employees in enrolling in the program under this title; and</text>
</paragraph><paragraph id="ID6a7f9c91700342de9b2e39b5e24db693"><enum>(6)</enum><text>respond to
questions about the program under this title and participating plans.</text>
</paragraph></subsection><subsection id="idB63E5D2B6AD349C4B6309DE65F69E77C"><enum>(d)</enum><header>Supplemental
materials</header><text>In addition to information developed by the
Administrator under subsection (c)(2), a navigator may develop and distribute
other information that is related to the health insurance program established
under this title, subject to review and approval by the Administrator and
filing in each State in which the navigator operates.</text>
</subsection><subsection commented="no" id="IDd7386734d38a4cdf96cabd2194fa0590"><enum>(e)</enum><header>Standards</header>
<paragraph commented="no" id="id3965F2CE32944FDE9324E106252A22D4"><enum>(1)</enum><header>In
general</header><text>The Administrator shall establish standards for
navigators under this section, including provisions to avoid conflicts of
interest. Under such standards, a navigator may not—</text>
<subparagraph commented="no" id="id273B3D498390443397C4C7FB24DA165C"><enum>(A)</enum><text>be a health
insurance issuer; or</text>
</subparagraph><subparagraph commented="no" id="idCC670EA6FE5A402FA0441C4942D772A5"><enum>(B)</enum><text>receive any
consideration directly or indirectly from any health insurance issuer in
connection with the participation of any employer in the program under this
title or the enrollment of any eligible employee in health insurance coverage
under this title.</text>
</subparagraph></paragraph><paragraph commented="no" id="id18D6C3A0C8E949B68535EB316643F8CC"><enum>(2)</enum><header>Fair and
impartial information and services</header><text>The Administrator shall
consult with the Small Business Health Board concerning the standards necessary
to ensure that a navigator will provide fair and impartial information and
services. An agreement between the Administrator and a navigator may include
specific provisions with respect to such navigator to ensure that such
navigator will provide fair and impartial information and services. If a
navigator, or entity seeking to become a navigator, is a party to any
arrangement with any health insurance issuer to receive compensation related to
other healthcare programs not covered under this title, the entity shall
disclose the terms of such compensation arrangements to the Administrator, and
the Administrator shall take such information into account in determining the
appropriate standards and agreement terms for such navigator.</text>
</paragraph></subsection></section><section id="ID75D51153DCE34161B660097071BBEB90"><enum>3104.</enum><header>Contracts
with health insurance issuers</header>
<subsection id="IDF6D12B27D7644C8CB12D35B070F3C943"><enum>(a)</enum><header>In
General</header><text>The Administrator may enter into contracts with qualified
health insurance issuers, without regard to section 5 of title 41, United
States Code, or other statutes requiring competitive bidding, to provide health
benefits plans to employees of participating employers and self-employed
individuals under this title. Each contract shall be for a uniform term of at
least 1 year, but may be made automatically renewable from term to term in the
absence of notice of termination by either party. In entering into such
contracts, the Administrator shall ensure that health benefits coverage is
provided for an individual only, 2 adults in a household, 1 adult and 1 or more
children, and a family.</text>
</subsection><subsection id="IDB014BD5F8FC34CCFB91E1020735B2B7E"><enum>(b)</enum><header>Eligibility</header><text>A
health insurance issuer shall be eligible to enter into a contract under
subsection (a) if such issuer—</text>
<paragraph id="ID9B1AE1E94E47439DA4E0AD3435A35E65"><enum>(1)</enum><text>is licensed to
offer health benefits plan coverage in each State in which the plan is offered;
and</text>
</paragraph><paragraph id="ID2DC5C681406C46268598EB47FCF2A5F8"><enum>(2)</enum><text>meets such other
reasonable requirements as determined appropriate by the Administrator, after
an opportunity for public comment and publication in the Federal
Register.</text>
</paragraph></subsection><subsection id="IDC8FA47023C5B4931B420575CD00BBC22"><enum>(c)</enum><header>Cost-sharing
and networks</header><text>The Administrator shall ensure that health benefits
plans with a range of cost-sharing and network arrangements are available under
this title.</text>
</subsection><subsection id="IDBA022B8373154A14AD34DF4F654B6BA3"><enum>(d)</enum><header>Revocation</header><text>Approval
of a health benefits plan participating in the program under this title may be
withdrawn or revoked by the Administrator only after notice to the health
insurance issuer involved and an opportunity for a hearing without regard to
subchapter II of chapter 5 and chapter 7 of title 5, United States Code.</text>
</subsection><subsection id="ID78358B65ABD6465CB640A39A7438B948"><enum>(e)</enum><header>Conversion</header>
<paragraph id="IDCC3941763FC1478383C4528D5D249BF5"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), a contract may not
be made or a plan approved under this section if the health insurance issuer
under such contract or plan does not provide to each enrollee whose coverage
under the plan is terminated, including a termination due to discontinuance of
the contract or plan, the option to have issued to that individual a nongroup
policy without evidence of insurability. A health insurance issuer shall
provide a notice of such option to individuals who enroll in the plan. An
enrollee who exercises such conversion option shall pay the full periodic
charges for the nongroup policy.</text>
</paragraph><paragraph id="idB33F8784C3F640BB838C9ED00A6BB665"><enum>(2)</enum><header>Exceptions</header><text>A
health insurance issuer shall not be required to offer a nongroup policy under
paragraph (1) if the termination under the plan occurred because—</text>
<subparagraph id="id692D2525C5444CFC925F0D9759CB65CE"><enum>(A)</enum><text>the enrollee
failed to pay any required monthly premiums under the plan;</text>
</subparagraph><subparagraph id="id2A5FDF444C904FF3B4EB12155AA1F912"><enum>(B)</enum><text>the enrollee
performed an act or practice that constitutes fraud in connection with the
coverage under the plan;</text>
</subparagraph><subparagraph id="idC4A3D440C10F440A9FFAAFE39F670F6E"><enum>(C)</enum><text>the enrollee made
an intentional misrepresentation of a material fact under the terms of coverage
of the plan; or</text>
</subparagraph><subparagraph id="idE802F7737B6D457AA1733A7EBAD5ADDA"><enum>(D)</enum><text>the terminated
coverage under the plan was replaced by similar coverage within 31 days after
the effective date of such termination.</text>
</subparagraph></paragraph></subsection><subsection id="IDec825e335e8a46ffb9b68a17ee5b3188"><enum>(f)</enum><header>Payment of
premiums</header>
<paragraph id="IDe86eb096cf75423f84008144fed68871"><enum>(1)</enum><header>In
general</header><text>Employers shall collect premium payments from their
employees through payroll deductions or other payments from employees and shall
forward such payments and the contribution of the employer (if any) to the
Administrator. The Administrator shall develop procedures through which such
payments shall be received and forwarded to the health insurance issuer
involved.</text>
</paragraph><paragraph id="IDf2718a4ab69d47d68a03ea1edbe3ee9d"><enum>(2)</enum><header>Failure to
pay</header><text>The Administrator shall establish—</text>
<subparagraph id="IDa1791d0f9771481995bd58f08cd26491"><enum>(A)</enum><text>procedures for
the termination of employers that fail for a consecutive 2-month period (or
such other time period as determined appropriate by the Administrator) to make
premium payments in a timely manner; and</text>
</subparagraph><subparagraph id="ID58f33934bacc4697b233ea554c4fcdc4"><enum>(B)</enum><text>other procedures
regarding unpaid and uncollected premiums.</text>
</subparagraph></paragraph></subsection></section><section id="IDB94FC9742F64493283BEAEA69098442A"><enum>3105.</enum><header>Employer
participation</header>
<subsection id="IDAB9F4C757C424CE895FD9E061AA36279"><enum>(a)</enum><header>Participation
procedure</header><text>The Administrator shall develop a procedure for
employers and self-employed individuals to participate in the program under
this title, including procedures relating to the offering of health benefits
plans to employees and the payment of premiums for health insurance coverage
under this title. For the purpose of premium payments, a self-employed
individual shall be considered an employer that is making a 100 percent
contribution toward the premium amount.</text>
</subsection><subsection id="ID8D3CB2A85EFE4C54992616936F5B1A5B"><enum>(b)</enum><header>Enrollment and
Offering of Other Coverage</header>
<paragraph id="ID7A5A1BA8C8EE4D5DA8DAB006C18B7EE2"><enum>(1)</enum><header>Enrollment</header><text>A
participating employer shall ensure that each eligible employee has an
opportunity to enroll in a plan of the employer's choice or a plan of the
employee's choice in accordance with section 3107(d)(7).</text>
</paragraph><paragraph id="ID72554EBE867A4635851EC7BC0B900CF3"><enum>(2)</enum><header>Prohibition on
offering other comprehensive health benefit coverage</header><text>A
participating employer may not offer a health insurance plan providing
comprehensive health benefit coverage to employees other than a health benefits
plan offered under this title.</text>
</paragraph><paragraph id="id159F3DC9701F4B389B84272432891CAE"><enum>(3)</enum><header>Prohibition on
coercion</header><text>An employer shall not pressure, coerce, or offer
inducements to an employee to elect not to enroll in coverage under the program
under this title or to select a particular health benefits plan.</text>
</paragraph><paragraph id="ID8AA7EF34802E42E0B8A220857C89EB79"><enum>(4)</enum><header>Offer of
supplemental coverage options</header>
<subparagraph id="IDB4818F0BD49849759B7CA296F86FCA04"><enum>(A)</enum><header>In
general</header><text>A participating employer may offer supplementary coverage
options to employees.</text>
</subparagraph><subparagraph id="IDFC6C2D30B63342F3B8B2411CD532F52C"><enum>(B)</enum><header>Definition</header><text>In
subparagraph (A), the term <term>supplementary coverage</term> means benefits
described as <term>excepted benefits</term> under section 2791(c).</text>
</subparagraph></paragraph></subsection><subsection id="id2DDB40E48A6642AD9FC30E23FC7158A4"><enum>(c)</enum><header>Regulatory
flexibility</header><text>In developing the procedure under subsection (a), the
Administrator shall comply with the requirements specified under the Regulatory
Flexibility Act under chapter 6 of title 5, United States Code, consider the
economic impacts that the regulation will have on small businesses, and
consider regulatory alternatives that would mitigate such impact. The
Administrator shall publish and publicly disseminate a small business
compliance guide, pursuant to section 212 of the Small Business Regulatory
Enforcement Fairness Act, that explains the compliance requirements for
employer participation. Such compliance guide shall be published not later than
the date of the publication of the final rule under this title, or the
effective date of such rules, whichever is later.</text>
</subsection><subsection id="IDDCC09A37F1D7459986D80C43458B5015"><enum>(d)</enum><header>Rule of
Construction</header><text>Except as provided in section 3104(f), nothing in
this title shall be construed to require that an employer make premium
contributions on behalf of employees.</text>
</subsection></section><section id="IDACD51F31A43F452293AA3A048BAC33C5"><enum>3106.</enum><header>Eligibility
and enrollment</header>
<subsection id="id46CC7EFA8F8848238FE4897D8768D25E"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">An individual shall
be eligible to enroll in health insurance coverage under this title for
coverage beginning in 2012 if such individual is an employee of a participating
employer described in section 3101(a)(4) or is a self-employed individual as
defined in section 401(c)(1)(B) of the Internal Revenue Code of 1986 and meets
the definition of a participating employer in section 3101(a)(8). An employer
may allow employees who average fewer than 35 hours per week to enroll.</text>
</subsection><subsection id="id4830AF0A2909459FAD453F76B08A45C7"><enum>(b)</enum><header>Limitation</header><text display-inline="yes-display-inline">A health insurance issuer may not refuse to
provide coverage to any eligible individual under subsection (a) who selects a
health benefits plan offered by such issuer under this title.</text>
</subsection><subsection id="id16DB02FA16F147038DDDBFF347FDBAEB"><enum>(c)</enum><header>Type of
enrollment</header><text display-inline="yes-display-inline">An eligible
individual may enroll as an individual or as an adult with 1 or more children
regardless of whether another adult is present in the enrollee's household or
family.</text>
</subsection><subsection commented="no" id="idC3702436706B48E696DEA7A22EB34992"><enum>(d)</enum><header>Open
enrollment</header>
<paragraph commented="no" id="id96A329F23FD841B0B751D34F8616CA9C"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Administrator
shall establish an annual open enrollment period during which an employer may
elect to become a participating employer and an employee may enroll in a health
benefits plan under this title for the following calendar year.</text>
</paragraph><paragraph commented="no" id="idBD0CF5F0DC014FF39415CCEC1BBBE03E"><enum>(2)</enum><header>Open enrollment
period</header><text display-inline="yes-display-inline">For purposes of this
title, the term <term>open enrollment period</term> means, with respect to
calendar year 2012 and each succeeding calendar year, the period beginning on
October 1, 2011, and ending December 1, 2011, and each succeeding period
beginning October 1 and ending December 1. Coverage in a health benefits plan
selected during such an open enrollment period shall begin on January 1 of the
calendar year following the selection.</text>
</paragraph><paragraph commented="no" id="id8A045983CF37440581CF0B7C119128DF"><enum>(3)</enum><header>Newly eligible
employers and employees</header><text display-inline="yes-display-inline">Notwithstanding the open enrollment period
provided for under paragraph (2), the Administrator shall establish an
enrollment process to enable a newly eligible employer or an employer with an
existing health benefits plan whose term is ending to become a participating
employer and for an employee of such employer, or a new employee of a
participating employer, to enroll in a health benefits plan under this title
outside of an open enrollment period subject to 2701(f). The Administrator may
establish a process for setting the renewal date for the participation of an
employer that initially becomes a participating employer outside of the open
enrollment period to coincide with a subsequent open enrollment period.</text>
</paragraph><paragraph commented="no" id="id54245CE53A984220B80EDD070C655133"><enum>(4)</enum><header>Limitation of
changing enrollment</header><text display-inline="yes-display-inline">An
employer or employee (as the case may be) may elect to change the health
benefits plan that the employee is enrolled in only during an open enrollment
period.</text>
</paragraph><paragraph commented="no" id="id0CF4E65C3B5349C7ADD65C8147029024"><enum>(5)</enum><header>Effectiveness
of election and change of election</header><text display-inline="yes-display-inline">An election to change a health benefits
plan that is made during the open enrollment period under paragraph (2) shall
take effect as of the first day of the following calendar year.</text>
</paragraph><paragraph commented="no" id="idEF50DA54B547486C915B54AD5BF106B4"><enum>(6)</enum><header>Continuation of
enrollment</header><text display-inline="yes-display-inline">An employee who
has enrolled in a health benefits plan under this title is considered to have
been continuously enrolled in that health benefits plan until such time
as—</text>
<subparagraph commented="no" id="id4C1109FDD47D45A6BD500D0C41548624"><enum>(A)</enum><text display-inline="yes-display-inline">the employer or employee (as the case may
be) elects to change health benefits plans; or</text>
</subparagraph><subparagraph commented="no" id="idC50C209EDDF24026B8217AC35C8B9157"><enum>(B)</enum><text display-inline="yes-display-inline">the health benefits plan is
terminated.</text>
</subparagraph></paragraph></subsection><subsection commented="no" id="id273A26C0E89F462D822BA45457745B2B"><enum>(e)</enum><header>Providing
information To promote informed choice</header><text display-inline="yes-display-inline">The Administrator shall compile, produce,
and disseminate information to employers, employees, and navigators under
section 3102(c)(8) to promote informed choice that shall be made available at
least 30 days prior to the beginning of each open enrollment period.</text>
</subsection><subsection commented="no" id="idBC8E2D47B3DF488D975A0360A23A6CE6"><enum>(f)</enum><header>Termination of
employment</header>
<paragraph commented="no" id="idBEC44B74E4374166A62B984AB86B3BFC"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">With respect to an
employee who is enrolled in a health plan through the program under this title
and who is terminated or separated from employment, such employee may remain
enrolled in such health plan for the period described in paragraph (2) if the
employee pays 102 percent of the monthly premium for such plan for such period
as provided for under paragraph (3).</text>
</paragraph><paragraph id="id5788D5AFD9C943FEB08646FDFF9C7F21"><enum>(2)</enum><header>Period
described</header><text>The period described in this paragraph is the longer
of—</text>
<subparagraph id="id7D16A7877D574AF7A7FE7772E9FFBF05"><enum>(A)</enum><text>the period
provided for in the COBRA continuation provisions (as such term is defined in
section 3001(a)(10)(B) of division B of the American Recovery and Reinvestment
Act of 2009) beginning on the date of the termination or separation involved;
or</text>
</subparagraph><subparagraph id="id376FB72AFBBB4E2DBE09E7E759A400E4"><enum>(B)</enum><text>the period
permitted under any applicable continuation of coverage provisions of the State
in which the employee resides.</text>
</subparagraph></paragraph><paragraph id="idA1C0DF550B7D4EF58963C0AE34451967"><enum>(3)</enum><header>Administration</header><text>The
Administrator shall develop guidelines for administering the provision of
health plan coverage for employees under this subsection. Such guidelines shall
address the rating rules for such continuation coverage in the calendar years
prior to 2014 and shall provide for the administration of this section in a
manner similar to the manner in which the COBRA continuation provisions (as
such term is defined in section 3001(a)(10)(B) of division B of the American
Recovery and Reinvestment Act of 2009) are administered, including the
collection of premiums by the Administrator.</text>
</paragraph><paragraph id="id22799D094A4647479DAEE12D637CCB6A"><enum>(4)</enum><header>Nonapplication
of provisions</header><text>The COBRA continuation provisions (as such term is
defined in section 3001(a)(10)(B) of division B of the American Recovery and
Reinvestment Act of 2009) shall not apply to an employee to which this
subsection applies.</text>
</paragraph></subsection><subsection commented="no" id="id0C11B211912F4E32855DAC95B18AC0CF"><enum>(g)</enum><header>Rule of
construction</header><text display-inline="yes-display-inline">Nothing in this
title shall be construed to prohibit a health insurance issuer providing
coverage through the program under this title from using the services of a
licensed agent or broker.</text>
</subsection></section><section id="ID1C36128B1BA94F939A9DEA09B5FC58CB"><enum>3107.</enum><header>Health
coverage available within the small business pool</header>
<subsection id="ID1CFE3AC650F6424BAA0854F2AC34B895"><enum>(a)</enum><header>Preexisting
Condition Exclusions</header><text>Section 2701 shall apply to coverage under
this title, except that with respect to such coverage, the reference to
<quote>12 months (or 18 months in the case of a late enrollee)</quote> in
subsection (a)(2) of each such section shall be deemed to be <quote>6
months</quote>. The period involved shall be reduced by the aggregate of 1 day
for each day that the individual was covered under creditable health insurance
coverage (as defined for purposes of section 2701(c)) immediately preceding the
date the individual submitted an application for coverage under this
title.</text>
</subsection><subsection id="ID74C7FBF88D6345AD90C2320693B5726C"><enum>(b)</enum><header>Rates and
Premiums; state laws</header>
<paragraph id="IDEE76B337A46D4BF0A0163F187ECAC572"><enum>(1)</enum><header>In
general</header><text>Rates charged and premiums paid for a health benefits
plan under this title—</text>
<subparagraph id="ID9D1D33355E1F4D08AF1F0DE7FBDF51A4"><enum>(A)</enum><text>shall be
determined in accordance with subsection (d);</text>
</subparagraph><subparagraph id="ID2299F5AD28914FEDACCD80E72FD547C7"><enum>(B)</enum><text>may be annually
adjusted; and</text>
</subparagraph><subparagraph id="IDACE3E8DBE9E441AEB5D4AA2EA49B02F9"><enum>(C)</enum><text>shall be adjusted
to cover the administrative costs of the Administrator under this title and the
office established under section 3102.</text>
</subparagraph></paragraph><paragraph id="ID589D9047FBC14CD7A0DC88C7439BDDF5"><enum>(2)</enum><header>Benefit mandate
laws</header><text>With respect to a contract entered into under this title
under which a health insurance issuer will offer health benefits plan coverage,
State mandated benefit laws in effect in the State in which the plan is offered
shall continue to apply, except in the case of a nationwide plan.</text>
</paragraph><paragraph id="ID41DFD98D0CE24FA195DA657185B2C27A"><enum>(3)</enum><header>Limitation</header><text>Nothing
in this subsection shall be construed to preempt any State or local law
(including any State grievance, claims, and appeals procedure laws, State
provider mandate laws, and State network adequacy laws) except those laws and
regulations described in subsection (b)(2), (d)(2)(B), and (d)(5).</text>
</paragraph></subsection><subsection id="ID3F11268B1EA142FFB47C012AFFBBEE6D"><enum>(c)</enum><header>Termination and
Reenrollment</header><text>If an individual who is enrolled in a health
benefits plan under this title voluntarily terminates the enrollment, except in
the case of an individual who has lost or changes employment or whose employer
is terminated for failure to pay premiums, the individual shall not be eligible
for reenrollment until the first open enrollment period following the
expiration of 6 months after the date of such termination.</text>
</subsection><subsection id="IDEB9E62B267274B7898ADAADC7D98F216"><enum>(d)</enum><header>Rating rules
and transitional application of State law</header>
<paragraph id="IDdb8c7c152fa04671965b0883775d3197"><enum>(1)</enum><header>Years 2012 and
2013</header><text>With respect to calendar years 2012 and 2013 (open
enrollment period beginning October 1, 2011, and October 1, 2012), the
following shall apply:</text>
<subparagraph id="IDed734036586442dd860b981ae3ae5fbb"><enum>(A)</enum><text>In the case of an
employer that elects to participate in the program under this title, the State
rating requirements applicable to employers purchasing health insurance
coverage in the small group market in the State in which the employer is
located shall apply with respect to such coverage, except that premium rates
for such coverage shall not vary based on health-status related factors.</text>
</subparagraph><subparagraph id="IDe012f88aca1f4c3fb0a95c3740b26a31"><enum>(B)</enum><text>State rating
requirements shall apply to health insurance coverage purchased in the small
group market in the State, except that a State shall be prohibited from
allowing premium rates to vary based on health-status related factors.</text>
</subparagraph></paragraph><paragraph id="ID8ca09eeceb3e4dcb8ac0eaa7dd63f4f5"><enum>(2)</enum><header>Subsequent
years</header>
<subparagraph id="ID98980b8ec27748daaf39f348817a2d62"><enum>(A)</enum><header>NAIC
recommendations</header>
<clause id="id76DC60E8FD774E14A8CC70C094A707E5"><enum>(i)</enum><header>Study</header><text>Beginning
in 2010, the Administrator shall contract with the National Association of
Insurance Commissioners to conduct a study of the rating requirements utilized
in the program under this title and the rating requirements that apply to
health insurance purchased in the small group markets in the States, and to
develop recommendations concerning rating requirements. Such recommendations
shall be submitted to the appropriate committees of Congress during calendar
year 2012.</text>
</clause><clause id="ID84ea478c659c4527bfdd6acfc45baf5f"><enum>(ii)</enum><header>State law
harmonization</header><text>Beginning in calendar year 2011, the Administrator
shall contract with the National Association of Insurance Commissioners to
conduct a study of administrative procedures, including rate and form filing,
standards of external review, and standards of internal review, that apply to
the program under this title and to health insurance purchased in the small
group markets in the States.</text>
</clause><clause id="ID818d06cde7124acfb899875f19bdb2c6"><enum>(iii)</enum><header>Consultation</header><text>In
conducting the study under clause (i), the National Association of Insurance
Commissioners shall consult with key stakeholders (including small businesses,
self-employed individuals, employees of small businesses, health insurance
issuers, healthcare providers, and patient advocates).</text>
</clause><clause id="ID3640e36bcf7c407babcbac2d73a9d304"><enum>(iv)</enum><header>Recommendations</header><text>During
calendar year 2012, the recommendations of the National Association of
Insurance Commissioners shall be submitted to Congress (in the form of a
legislative proposal), and shall concern—</text>
<subclause id="ID3c2cfc240ec64cfa9f5974a9bb4ef45c"><enum>(I)</enum><text>rating
requirements for health insurance coverage under this title for calendar year
2014 and subsequent calendar years; and</text>
</subclause><subclause id="IDfe94e4c0b5b94216b3a2dfd4e8380927"><enum>(II)</enum><text>a maximum
permissible variance between State rating requirements and the rating
requirements for coverage under this title that will allow State flexibility
without causing significant adverse selection for health insurance coverage
under this title.</text>
</subclause></clause></subparagraph><subparagraph id="ID857643541b824387917f9c40723d35ef"><enum>(B)</enum><header>Application of
requirements</header><text>If, pursuant to this subsection, an Act is enacted
to implement rating requirements pursuant to the recommendations submitted
under subparagraph (A), or alternative rating requirements developed by
Congress, such rating requirements shall apply to the program under this title
beginning in calendar year 2014 (open enrollment periods beginning October 1,
2013, and thereafter).</text>
</subparagraph></paragraph><paragraph id="ID92fc8418c2934acfb4165d8d661c1b17"><enum>(3)</enum><header>Failure to
enact legislation</header><text>If an Act is not enacted as provided for in
paragraph (2)(B), the fallback rating rules under paragraph (5) shall apply
beginning in calendar year 2014 (open enrollment periods beginning October 1,
2013, and thereafter).</text>
</paragraph><paragraph id="IDf3e5df4e11184e0d961f5ca83b1f7292"><enum>(4)</enum><header>Expedited
congressional consideration</header>
<subparagraph id="ID48056048549146b0ae6d840da80ed7ea"><enum>(A)</enum><header>Introduction
and committee consideration</header>
<clause id="ID198339f8c6f240dc8099bf15400e4432"><enum>(i)</enum><header>Introduction</header><text>A
legislative proposal submitted to Congress pursuant to paragraph (2) shall be
introduced in the House of Representatives by the Speaker, and in the Senate by
the majority leader, immediately upon receipt of the language and shall be
referred to the appropriate committees of Congress. If the proposal is not
introduced in accordance with the preceding sentence, legislation may be
introduced in either House of Congress by any member thereof.</text>
</clause><clause id="ID6da103bc48d342789ae68b70ec8a8eba"><enum>(ii)</enum><header>Committee
consideration</header><text>Legislation introduced in the House of
Representatives and the Senate under clause (i) shall be referred to the
appropriate committees of jurisdiction of the House of Representatives and the
Senate. Not later than 45 calendar days after the introduction of the
legislation or February 15, 2013, whichever is later, the committee of Congress
to which the legislation was referred shall report the legislation or a
committee amendment thereto. If the committee has not reported such legislation
(or identical legislation) at the end of 45 calendar days after its
introduction, or February 15, 2013, whichever is later, such committee shall be
deemed to be discharged from further consideration of such legislation and such
legislation shall be placed on the appropriate calendar of the House
involved.</text>
</clause></subparagraph><subparagraph id="IDe0be31da57a24028b03e9fcf8bbd4a06"><enum>(B)</enum><header>Expedited
procedure</header>
<clause id="ID88995d62a4fc4755a41b9bbe96f602de"><enum>(i)</enum><header>Consideration</header><text>Not
later than 15 calendar days after the date on which a committee has been or
could have been discharged from consideration of legislation under this
paragraph, the Speaker of the House of Representatives, or the Speaker's
designee, or the majority leader of the Senate, or the leader's designee, shall
move to proceed to the consideration of the committee amendment to the
legislation, and if there is no such amendment, to the legislation. It shall
also be in order for any member of the House of Representatives or the Senate,
respectively, to move to proceed to the consideration of the legislation at any
time after the conclusion of such 15-day period. All points of order against
the legislation (and against consideration of the legislation) with the
exception of points of order under the Congressional Budget Act of 1974 are
waived. A motion to proceed to the consideration of the legislation is highly
privileged in the House of Representatives and is privileged in the Senate and
is not debatable. The motion is not subject to amendment, to a motion to
postpone consideration of the legislation, or to a motion to proceed to the
consideration of other business. A motion to reconsider the vote by which the
motion to proceed is agreed to or not agreed to shall not be in order. If the
motion to proceed is agreed to, the House of Representatives or the Senate, as
the case may be, shall immediately proceed to consideration of the legislation
in accordance with the Standing Rules of the House of Representatives or the
Senate, as the case may be, without intervening motion, order, or other
business, and the resolution shall remain the unfinished business of the House
of Representatives or the Senate, as the case may be, until disposed of, except
as provided in clause (iii).</text>
</clause><clause id="ID09edd26c2bda4c99bcaa6d70d2edffd5"><enum>(ii)</enum><header>Consideration
by other House</header><text>If, before the passage by one House of the
legislation that was introduced in such House, such House receives from the
other House legislation as passed by such other House—</text>
<subclause id="ID4f4a2a9450014301a7b477beac1e30c0"><enum>(I)</enum><text>the legislation
of the other House shall not be referred to a committee and shall immediately
displace the legislation that was introduced in the House in receipt of the
legislation of the other House; and</text>
</subclause><subclause id="IDcb7deaacfc15471c84a0bdada74d5065"><enum>(II)</enum><text>the legislation
of the other House shall immediately be considered by the receiving House under
the same procedures applicable to legislation reported by or discharged from a
committee under this paragraph.</text>
</subclause><continuation-text continuation-text-level="clause">Upon
disposition of legislation that is received by one House from the other House,
it shall no longer be in order to consider the legislation that was introduced
in the receiving House.</continuation-text></clause><clause id="idCCCE9A39057A461F8F1C370D7A461E28"><enum>(iii)</enum><header>Senate vote
requirement</header><text>Legislation under this paragraph shall only be
approved in the Senate if affirmed by the votes of <fraction>3/5</fraction> of
the Senators duly chosen and sworn. If legislation in the Senate has not
reached final passage within 10 days after the motion to proceed is agreed to
(excluding periods in which the Senate is in recess) it shall be in order for
the majority leader to file a cloture petition on the legislation or amendments
thereto, in accordance with rule XXII of the Standing Rules of the Senate. If
such a cloture motion on the legislation fails, it shall be in order for the
majority leader to proceed to other business and the legislation shall be
returned to or placed on the Senate calendar.</text>
</clause><clause id="ID20d56dfabc944d6ca9051f24dfa7ec68"><enum>(iv)</enum><header>Consideration
in conference</header><text>Immediately upon a final passage of the legislation
that results in a disagreement between the two Houses of Congress with respect
to the legislation, conferees shall be appointed and a conference convened. Not
later than 15 days after the date on which conferees are appointed (excluding
periods in which one or both Houses are in recess), the conferees shall file a
report with the House of Representatives and the Senate resolving the
differences between the Houses on the legislation. Notwithstanding any other
rule of the House of Representatives or the Senate, it shall be in order to
immediately consider a report of a committee of conference on the legislation
filed in accordance with this subclause. Debate in the House of Representatives
and the Senate on the conference report shall be limited to 10 hours, equally
divided and controlled by the Speaker of the House of Representatives and the
minority leader of the House of Representatives or their designees and the
majority and minority leaders of the Senate or their designees. A vote on final
passage of the conference report shall occur immediately at the conclusion or
yielding back of all time for debate on the conference report. The conference
report shall be approved in the Senate only if affirmed by the votes of
<fraction>3/5</fraction> of the Senators duly chosen and sworn.</text>
</clause></subparagraph><subparagraph id="ID810c820431584d6b80ccb8beb20ff7e4"><enum>(C)</enum><header>Rules of the
Senate and House of Representatives</header><text>This paragraph is enacted by
Congress—</text>
<clause id="IDf2893d0851034b1fb9c7fb9b2090190b"><enum>(i)</enum><text>as an exercise of
the rulemaking power of the Senate and House of Representatives, respectively,
and is deemed to be part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed in that House in
the case of legislation under this paragraph, and it supersedes other rules
only to the extent that it is inconsistent with such rules; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID28cabf271e704d6297a046581076b9ef"><enum>(ii)</enum><text>with full
recognition of the constitutional right of either House to change the rules (so
far as they relate to the procedure of that House) at any time, in the same
manner, and to the same extent as in the case of any other rule of that
House.</text>
</clause></subparagraph></paragraph><paragraph id="ID70a75bbec2f44f52a65d2e91b5cdd1b7"><enum>(5)</enum><header>Fallback rating
rules</header><text>For purposes of paragraph (3), the fallback rating rules
are as follows:</text>
<subparagraph id="ID8650a1a074ab4c4488fdfb147eba5f69"><enum>(A)</enum><header>Program</header>
<clause id="ID418fd9ee98fd41f8b5ab564f15e97740"><enum>(i)</enum><header>Rating
rules</header><text>A health insurance issuer that enters into a contract under
the program under this title shall determine the amount of premiums to assess
for coverage under a health benefits plan based on a community rate that may be
annually adjusted only—</text>
<subclause id="ID03b8258962bd40ad899416eb2f1a0988"><enum>(I)</enum><text>based on the age
of covered individuals (subject to clause (iii));</text>
</subclause><subclause id="IDc4ddfd05a49641628c40d4d35e8a46c7"><enum>(II)</enum><text>based on the
geographic area involved if the adjustment is based on geographical divisions
that are not smaller than a metropolitan statistical area and the issuer
provides evidence of geographic variation in cost of services;</text>
</subclause><subclause id="ID92df3863c9244633a8cea5114c49ffbd"><enum>(III)</enum><text>based on
industry (subject to clause (iv));</text>
</subclause><subclause id="IDe8dd20897a6241b39218af8db64bf8b5"><enum>(IV)</enum><text>based on tobacco
use; and</text>
</subclause><subclause id="ID0f78d0a1f3fa4e2aa7d8b7b032a92d03"><enum>(V)</enum><text>based on whether
such coverage is for an individual, 2 adults in a household, 1 adult and 1 or
more children, or a family.</text>
</subclause></clause><clause id="ID5c30a51cb74846eeaabf52e14adaacb5"><enum>(ii)</enum><header>Limitation</header><text>Premium
rates charged for coverage under the program under this title shall not vary
based on health-status related factors, gender, class of business, or claims
experience or any other factor not described in clause (i).</text>
</clause><clause id="ID2e83391e94b2465b8c380925336d55d7"><enum>(iii)</enum><header>Age
adjustments</header>
<subclause id="IDb4f5116728be42a1af6d02e6016da963"><enum>(I)</enum><header>In
general</header><text>With respect to clause (i)(I), in making adjustments
based on age, the Administrator shall establish not more than 5 age brackets to
be used by a health insurance issuer in establishing rates for individuals
under the age of 65. The rates for any age bracket shall not exceed 300 percent
of the rate for the lowest age bracket. Age-related premiums may not vary
within age brackets.</text>
</subclause><subclause id="IDab801bbc000c497aa1644eff383d766c"><enum>(II)</enum><header>Ages 65 and
older</header><text>With respect to clause (i)(I), a health insurance issuer
may develop separate rates for covered individuals who are 65 years of age or
older for whom the primary payor for health benefits coverage is the Medicare
program under title XVIII of the Social Security Act, for the coverage of
health benefits that are not otherwise covered under Medicare.</text>
</subclause></clause><clause id="IDb343e82cbacd4db6aa8f6488df4cf73f"><enum>(iv)</enum><header>Industry
adjustment</header><text>With respect to clause (i)(III), in making adjustments
based on industry, the rates for any industry shall not exceed 115 percent of
the rate for the lowest industry and shall be based on evidence of industry
variation in cost of services.</text>
</clause></subparagraph><subparagraph id="ID4f04298c39c741e281ce36f3cb4e3276"><enum>(B)</enum><header>State rating
rules</header><text>State rating requirements shall apply to health insurance
coverage purchased in the small group market, except that a State shall not
permit premium rates to vary based on health-status related factors.</text>
</subparagraph></paragraph><paragraph id="ID0a332df944fd4118942703607f6284a5"><enum>(6)</enum><header>State with less
premium variation</header><text>Effective beginning in calendar year 2014, in
the case of a State that provides a rating variance with respect to age that is
less than the Federal limit established under paragraph (2)(B) or (3) or that
provides for some form of community rating, or that provides a rating variance
with respect to industry that is less than the Federal limit established under
paragraph (2)(B) or (3), or that provides a rating variance with respect to the
geographic area involved that is less than the Federal limit established in
paragraph (2)(B) or (3), premium rates charged for health insurance coverage
under this title in such State with respect to such factor shall reflect the
rating requirements of such State.</text>
</paragraph><paragraph id="ID81251e7171364db6ac26326b25899b9c"><enum>(7)</enum><header>Employee
choice</header>
<subparagraph id="ID3b1a5e0fca564509af7a3804e130a680"><enum>(A)</enum><header>Calendar years
2012 and 2013</header><text>With respect to calendar years 2012 and 2013 (open
enrollment periods beginning October 1, 2011, and October 1, 2012), in the case
of a State that applies community rating or adjusted community rating where any
age bracket does not exceed 300 percent of the lowest age bracket, employees of
an employer located in that State may elect to enroll in any health plan
offered under this title.</text>
</subparagraph><subparagraph id="ID4916145fbc3a4f9c901c131a74f207ee"><enum>(B)</enum><header>Subsequent
years</header><text>Beginning in calendar year 2014 (open enrollment periods
beginning October 1, 2013, and thereafter), employees of an employer that
participates in the program under this title may elect to enroll in any health
plan offered under this title.</text>
</subparagraph><subparagraph id="id6B9CDA8926114BBD985FEC3F825FBA0A"><enum>(C)</enum><header>Exception</header><text>In
any State or year in which an employee is not able to select a health plan as
provided for in subparagraph (A) or (B), the employer shall select the health
plan or plans that shall be made available to the employees of such
employer.</text>
</subparagraph></paragraph><paragraph id="id5DF761E57B1D49CDB2C993995DCBC43E"><enum>(8)</enum><header>State approval
of rates</header><text>State laws requiring the approval of rates with respect
to health insurance shall continue to apply to health insurance coverage under
this title in such State unless the State fails to enforce the application of
rates that would otherwise apply to health insurance issuers under the program
under this title.</text>
</paragraph></subsection><subsection id="id0937DC589C604C92A0A5200D3758318E"><enum>(e)</enum><header>Benefits</header>
<paragraph id="IDEA72B4DB5A5548F9964A9EA0923D92DF"><enum>(1)</enum><header>Statement of
benefits</header><text>Each contract under this title shall contain a detailed
statement of benefits offered and shall include information concerning such
maximums, limitations, exclusions, and other definitions of benefits as the
Administrator considers necessary or reasonable.</text>
</paragraph><paragraph commented="no" id="ID803535424EA34B51BE8F4FA3B44CC359"><enum>(2)</enum><header>Nationwide
plans</header>
<subparagraph commented="no" id="idAA81EC40F9BF4F60831ADC7178A85F1B"><enum>(A)</enum><header>In
general</header><text>In the case of contracts with health insurance issuers
that offer a health benefit plan on a nationwide basis, the benefit package
shall include benefits established by the Administrator.</text>
</subparagraph><subparagraph commented="no" id="id2B4D45962CF24447A64D6F10A7D60C29"><enum>(B)</enum><header>Process for
establishing benefits for nationwide plans</header><text>The benefits provided
for under subparagraph (A) shall be determined as follows:</text>
<clause commented="no" id="idD84571FE60FB4BC4AD05CDD20036EC57"><enum>(i)</enum><text>Not later than 30
days after the date of enactment of this title, the Secretary shall enter into
a contract with the Institute of Medicine to develop a minimum set of benefits
to be offered by nationwide plans.</text>
</clause><clause commented="no" id="idD9CDDB19834241AD9BD19B66163E34FC"><enum>(ii)</enum><text>In developing
such minimum set of benefits, the Institute of Medicine shall convene public
forums to allow input from key stakeholders (including small businesses,
self-employed individuals, employees of small businesses, health insurance
issuers, insurance regulators, healthcare providers, and patient advocates) and
shall consult with the Small Business Health Board.</text>
</clause><clause commented="no" id="idF0B68EB60A9B4A5CA4880839C102257B"><enum>(iii)</enum><text>The Institute
of Medicine shall consider—</text>
<subclause commented="no" id="id72655022252048E2B9D094F623061A86"><enum>(I)</enum><text>the clinical
appropriateness and effectiveness of the benefits covered;</text>
</subclause><subclause commented="no" id="idE8A294FA1F544BAE89387288BA042507"><enum>(II)</enum><text>the
affordability of the benefits covered;</text>
</subclause><subclause commented="no" id="idDF37D417A30044FC93B9872DD1FF3F5E"><enum>(III)</enum><text>the financial
protection of enrollees against high healthcare expenses;</text>
</subclause><subclause commented="no" id="idCC330EFBAF62426483E885028AAEC384"><enum>(IV)</enum><text>access to
necessary healthcare services, including preventive health services; and</text>
</subclause><subclause commented="no" id="idB17D668CED634536926EBCCEF97EF71C"><enum>(V)</enum><text>benefits similar
to those available in the small group market on the date of enactment of this
title.</text>
</subclause></clause><clause commented="no" id="idA908F6414101496DBB95C1A8ED4CA20F"><enum>(iv)</enum><text>The benefits
package shall not be discriminatory or be likely to promote or induce adverse
selection.</text>
</clause><clause commented="no" id="id4330DA0AB5EA41EB899C585BCCE4E220"><enum>(v)</enum><text>The Administrator
shall publish the benefits recommended by the Institute of Medicine for public
comment.</text>
</clause><clause commented="no" id="id705532BB5AF249E68952C3ECD40ECF8C"><enum>(vi)</enum><text>Based on the
comments received, the Administrator may make changes only to the extent that
the recommendation from the Institute of Medicine is not consistent with the
criteria contained in clause (iii) or there is a compelling need for the
changes to ensure the effective functioning of the program.</text>
</clause><clause id="ID9217ba72705a44f495c54ce2ed7017b9"><enum>(vii)</enum><text>The
Administrator shall submit a report to Congress on the benefits included in the
nationwide package.</text>
</clause></subparagraph><subparagraph commented="no" id="idE71D8D3A33A6456FBF384375C547E2D0"><enum>(C)</enum><header>Changes to
benefits</header>
<clause commented="no" id="id3D7D84FDF3C34B5FB018F32CB0887AE7"><enum>(i)</enum><header>In
general</header><text>By a vote of a two-thirds majority, the Small Business
Health Board may recommend to the Administrator changes to the benefit package
for nationwide plans under this paragraph for years subsequent to the first
year in which such benefits are in effect.</text>
</clause><clause commented="no" id="idC3199986C17743C4926A7A9958C0AEB9"><enum>(ii)</enum><header>Reduction in
benefits</header><text>The Administrator may reduce benefits that were
previously covered under this paragraph only if—</text>
<subclause commented="no" id="id30F5AE5B42DE4D67AB916140629F5683"><enum>(I)</enum><text>two-thirds of the
Small Business Health Board recommend such change; or</text>
</subclause><subclause commented="no" id="idD8F4FAF6918948069B8955725F8D3BF5"><enum>(II)</enum><text>there is a
compelling need for the change to prevent a substantial reduction in
participation in the program under this title.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="id1AE91D2C58F94103B511D9B751928656"><enum>(f)</enum><header>Additional
premium for delayed enrollment</header>
<paragraph id="id1D37EB98C8744E898F8E5A1E77D52A0F"><enum>(1)</enum><header>In
general</header><text>A self-employed individual who is eligible to participate
in the program under this title, who does not reside in a State where a
self-employed individual is eligible for coverage in the small group market,
and who does not elect to enroll in coverage under such program in the first
year in which the self-employed individual is eligible to so enroll, shall be
subject to an additional premium for delayed enrollment.</text>
</paragraph><paragraph id="id0B1DAC69E22D4193A6C7987580842FBE"><enum>(2)</enum><header>Amount</header><text>The
Administrator shall establish the amount of the additional premium under
paragraph (1), which shall be the amount determined by the Administrator to be
actuarially appropriate, to encourage enrollment, and to reduce adverse
selection. The amount of the additional premium shall be calculated by the
Administrator based on the number of years specified in paragraph (4).</text>
</paragraph><paragraph id="idDD8DB9F763C34AC5B7A99A05F474DB98"><enum>(3)</enum><header>Payment</header><text>A
self-employed individual shall pay the additional premium under this
subsection, if any, for a period of time equal to the number of years specified
in paragraph (4). After the expiration of such period the additional premium
for delayed enrollment shall be terminated.</text>
</paragraph><paragraph id="id14B1CEE4B35B4D58A4548A33CEBC15E1"><enum>(4)</enum><header>Years</header><text>The
number of years specified in this paragraph is the number of years that the
self-employed individual involved was eligible to participate in the program
under this title but did not enroll in coverage under such program and did not
otherwise have creditable coverage (as defined for purposes of section
2701(c)).</text>
</paragraph></subsection><subsection id="id08E4D6B1AC0D4C8CB8137CE1A46E1E30"><enum>(g)</enum><header>State
enforcement</header>
<paragraph id="idD519611BBD9B44A790CD58E20BA15AD2"><enum>(1)</enum><header>State
authority</header><text>With respect to the enforcement of provisions in this
title that supersede State law (as described in paragraph (2)), a State may
require that health insurance issuers that issue, sell, renew, or offer health
insurance coverage in the State in the small group market or through the
program under this title, comply with the requirements of this title with
respect to such issuers.</text>
</paragraph><paragraph id="idF498E702A79E4E70920DC72547897F66"><enum>(2)</enum><header>Provisions
described</header><text>The provisions described in this paragraph shall
include the following:</text>
<subparagraph id="idF415515840AF475F985FC6FBAECF3253"><enum>(A)</enum><text>Prohibitions on
varying premium rates based on health-status related factors (subsections
(d)(1) (A) and (B) of section 3107).</text>
</subparagraph><subparagraph id="idB56DE646A12E49868741725B560241B6"><enum>(B)</enum><text>The
implementation of rating requirements that shall apply to the program under
this title beginning in calendar year 2014 (subsections (d)(2)(B) and (d)(3) of
section 3107).</text>
</subparagraph><subparagraph id="idFFE28E54E64F4C5B90F95442F662F93F"><enum>(C)</enum><text>Benefit
requirements for nationwide plans available in the program under this title
(subsection (e)).</text>
</subparagraph></paragraph><paragraph id="id3DF8FF72D2CC49FCA29254C695DEF8AE"><enum>(3)</enum><header>Failure to
implement or enforce provisions</header><text>In the case of a determination by
the Secretary that a State has failed to substantially enforce a provision (or
provisions) described in paragraph (2) with respect to health insurance issuers
in the State, the Secretary shall enforce such provision (or
provisions).</text>
</paragraph><paragraph id="id436E7026690D43F19510F90ADD05D9B8"><enum>(4)</enum><header>Secretarial
enforcement authority</header><text>The Secretary shall have the same authority
in relation to the enforcement of the provisions of this title with respect to
issuers of health insurance coverage in a State as the Secretary has under
section 2722(b)(2) in relation to the enforcement of the provisions of part A
of title XXVII with respect to issuers of health insurance coverage in the
small group market in the State.</text>
</paragraph></subsection><subsection id="id54BE27966E2742A79D9304719E6B7D57"><enum>(h)</enum><header>State opt
out</header><text>A State may prohibit small employers and self-employed
individuals in the State from participating in the program under this title if
the Administrator finds that the State—</text>
<paragraph id="idE5774EC1C4C647ADA26B4D608CBA330B"><enum>(1)</enum><text>defines its small
group market to include groups of 1 (so that self-employed individuals are
eligible for coverage in such market);</text>
</paragraph><paragraph id="id06852CABEE6E4E5C85AE0D3D8BE85EEC"><enum>(2)</enum><text>prohibits the use
of health-status related factors and other factors described in subsection
(d)(5)(A);</text>
</paragraph><paragraph id="id075B3143D3854DFC96800E770CD3527E"><enum>(3)</enum><text>has in effect
rating rules that—</text>
<subparagraph id="idB3C526C2CC544B5199C5DE737BA55483"><enum>(A)</enum><text>in calendar years
2012 and 2013, comply with subsection (d)(5)(A); and</text>
</subparagraph><subparagraph id="idBFAD114C71DC4ED895CDE4E035E7F4DC"><enum>(B)</enum><text>in calendar year
2014 and thereafter, comply with subsection (d)(2)(B) or (d)(3), whichever is
in effect for such calendar year;</text>
</subparagraph><continuation-text continuation-text-level="paragraph">except
that such rules may impose limits on rating variation in addition to those
provided for in such subsection;</continuation-text></paragraph><paragraph id="idFA733D4F10D9476F87716E9A7959923E"><enum>(4)</enum><text>maintains a
Statewide purchasing pool that provides purchasers in the small group market a
choice of health benefits plans, with comparative information provided
concerning such plans and the premiums charged for such plans made available
through the Internet; and</text>
</paragraph><paragraph id="id93B1A6D929E64D88AE8D5170A7ABFA91"><enum>(5)</enum><text>enacts a law to
request an opt out under this subsection.</text>
</paragraph></subsection></section><section id="ID8B16F29F934D4FD481849AAEE7156C9D"><enum>3108.</enum><header>Encouraging
participation by health insurance issuers through adjustments for risk</header>
<subsection id="IDEE75019F68B74EBB978B65E17DF48A65"><enum>(a)</enum><header>Application of
Risk Corridors</header>
<paragraph id="ID0CBE939036E94ADDB67EF923868E4B5F"><enum>(1)</enum><header>In
general</header><text>This section shall only apply to health insurance issuers
with respect to health benefits plans offered under this Act during any of
calendar years 2012 through 2014.</text>
</paragraph><paragraph id="ID8847D6FB8BBB4D26B30370BFD8765EE0"><enum>(2)</enum><header>Notification of
costs under the plan</header><text>In the case of a health insurance issuer
that offers a health benefits plan under this title in any of calendar years
2012 through 2014, the issuer shall notify the Administrator, before such date
in the succeeding year as the Administrator specifies, of the total amount of
costs incurred in providing benefits under the health benefits plan for the
year involved and the portion of such costs that is attributable to
administrative expenses.</text>
</paragraph><paragraph id="ID4D7B2D9F12B948A1ACBC48BA045E71F2"><enum>(3)</enum><header>Allowable costs
defined</header><text>For purposes of this section, the term <term>allowable
costs</term> means, with respect to a health benefits plan offered by a health
insurance issuer under this title, for a year, the total amount of costs
described in paragraph (2) for the plan and year, reduced by the portion of
such costs attributable to administrative expenses incurred in providing the
benefits described in such paragraph.</text>
</paragraph></subsection><subsection id="IDAAE132E8AAB34678B812306AD28A4351"><enum>(b)</enum><header>Adjustment of
Payment</header>
<paragraph id="ID6C56D3E619414387A69F477C1DCFD671"><enum>(1)</enum><header>No adjustment
if allowable costs within 3 percent of target amount</header><text>If the
allowable costs for the health insurance issuer with respect to the health
benefits plan involved for a calendar year are at least 97 percent, but do not
exceed 103 percent, of the target amount for the plan and year involved, there
shall be no payment adjustment under this section for the plan and year.</text>
</paragraph><paragraph id="ID2253C082A0854F65A9660D14EFDCEB52"><enum>(2)</enum><header>Increase in
payment if allowable costs above 103 percent of target amount</header>
<subparagraph id="IDFE17415D12AE460CA1959AA96FC5E050"><enum>(A)</enum><header>Costs between
103 and 108 percent of target amount</header><text>If the allowable costs for
the health insurance issuer with respect to the health benefits plan involved
for the year are greater than 103 percent, but not greater than 108 percent, of
the target amount for the plan and year, the Administrator shall reimburse the
issuer for such excess costs through payment to the issuer of an amount equal
to 75 percent of the difference between such allowable costs and 103 percent of
such target amount.</text>
</subparagraph><subparagraph id="ID312CE361EBBB4F8EBC7934F10A4DA29F"><enum>(B)</enum><header>Costs above 108
percent of target amount</header><text>If the allowable costs for the health
insurance issuer with respect to the health benefits plan involved for the year
are greater than 108 percent of the target amount for the plan and year, the
Administrator shall reimburse the issuer for such excess costs through payment
to the issuer in an amount equal to the sum of—</text>
<clause id="ID75C386D8756B40D8AE4139D3A4C973DF"><enum>(i)</enum><text>3.75 percent of
such target amount; and</text>
</clause><clause id="ID83B9715891764557BA8DAC8F43AAA80D"><enum>(ii)</enum><text>90 percent of
the difference between such allowable costs and 108 percent of such target
amount.</text>
</clause></subparagraph></paragraph><paragraph id="IDF2D93322546B44188D8194B1FDF2B1F8"><enum>(3)</enum><header>Reduction in
payment if allowable costs below 97 percent of target amount</header>
<subparagraph id="IDA5C234C4B9944649BC8D34C5969D184F"><enum>(A)</enum><header>Costs between
92 and 97 percent of target amount</header><text>If the allowable costs for the
health insurance issuer with respect to the health benefits plan involved for
the year are less than 97 percent, but greater than or equal to 92 percent, of
the target amount for the plan and year, the issuer shall be required to pay
into a contingency reserve fund established and maintained by the
Administrator, an amount equal to 75 percent of the difference between 97
percent of the target amount and such allowable costs.</text>
</subparagraph><subparagraph id="IDA83858A9EDF04F7D8AB7903BE32724C2"><enum>(B)</enum><header>Costs below 92
percent of target amount</header><text>If the allowable costs for the health
insurance issuer with respect to the health benefits plan involved for the year
are less than 92 percent of the target amount for the plan and year, the issuer
shall be required to pay into the contingency fund established under
subparagraph (A), an amount equal to the sum of—</text>
<clause id="ID1615E8464E3B47FB95BF7B0621788341"><enum>(i)</enum><text>3.75 percent of
such target amount; and</text>
</clause><clause id="IDB03BB905AAC04CD5912A1681E0B92024"><enum>(ii)</enum><text>90 percent of
the difference between 92 percent of such target amount and such allowable
costs.</text>
</clause></subparagraph></paragraph><paragraph id="ID68409E07BA66430397639493C843ACC8"><enum>(4)</enum><header>Target amount
described</header>
<subparagraph id="ID52EABE42BD2041F39234D5B717F4A829"><enum>(A)</enum><header>In
general</header><text>For purposes of this subsection, the term <term>target
amount</term> means, with respect to a health benefits plan offered by an
issuer under this title in any of calendar years 2012 through 2014, an amount
equal to—</text>
<clause id="IDC794660514544EF99374D7BAC40E05EC"><enum>(i)</enum><text>the total of the
monthly premiums estimated by the health insurance issuer and accepted by the
Administrator to be paid for enrollees in the plan under this title for the
calendar year involved; reduced by</text>
</clause><clause id="ID9A9F1DFDF64D4F0CA1D5D6A4B316203A"><enum>(ii)</enum><text>the amount of
administrative expenses that the issuer estimates, and the Administrator
accepts, will be incurred by the issuer with respect to the plan for such
calendar year.</text>
</clause></subparagraph><subparagraph id="ID749C1C3F81774C1EB50C41BD30672E65"><enum>(B)</enum><header>Submission of
target amount</header><text>Not later than December 31, 2011, and each December
31 thereafter through calendar year 2013, an issuer shall submit to the
Administrator a description of the target amount for such issuer with respect
to health benefits plans provided by the issuer under this title.</text>
</subparagraph></paragraph></subsection><subsection id="IDAF7BDC3EB94E41FEB7DA42342D0A8F31"><enum>(c)</enum><header>Disclosure of
Information</header>
<paragraph id="ID5644964A19614933A995FA6579975971"><enum>(1)</enum><header>In
general</header><text>Each contract under this title shall provide—</text>
<subparagraph id="IDFF46F163D3954B6DB12126613CAEFFDE"><enum>(A)</enum><text>that a health
insurance issuer offering a health benefits plan under this title shall provide
the Administrator with such information as the Administrator determines is
necessary to carry out this subsection including the notification of costs
under subsection (a)(2) and the target amount under subsection (b)(4)(B);
and</text>
</subparagraph><subparagraph id="ID300E08DD00224E0EBAA1D0106EE2BB06"><enum>(B)</enum><text>that the
Administrator has the right to inspect and audit any books and records of the
issuer that pertain to the information regarding costs provided to the
Administrator under such subsections.</text>
</subparagraph></paragraph><paragraph id="IDF4F9CEF807054397852B5AEE0DB52B93"><enum>(2)</enum><header>Restriction on
use of information</header><text>Information disclosed or obtained pursuant to
the provisions of this subsection may be used by the office designated under
section 3102(a) and its employees and contractors only for the purposes of, and
to the extent necessary in, carrying out this section.</text>
</paragraph></subsection></section><section id="ID487B39BD11EA4457805DCE8405BDE92E"><enum>3109.</enum><header>Administration
through regional or other administrative entities</header>
<subsection id="IDFC3B0E51A1C347E8BEADE0BC3FF49679"><enum>(a)</enum><header>In
General</header><text>In order to provide for the administration of the
benefits under this title with maximum efficiency and convenience for
participating employers and healthcare providers and other individuals and
entities providing services to such employers, the Administrator—</text>
<paragraph id="id4C2F8C26E32A42C7B5CBC38CF9E273AF"><enum>(1)</enum><text>shall enter into
contracts with eligible entities, to the extent appropriate, to perform, on a
regional or other basis, activities to receive, disburse, and account for
payments of premiums to participating employers by individuals, and for
payments by participating employers and employees to health insurance issuers;
and</text>
</paragraph><paragraph id="id99D91A92123644D9B0801C73EF2B019B"><enum>(2)</enum><text>may enter into
contracts with eligible entities, to the extent appropriate, to perform, on a
regional or other basis, 1 or more of the following:</text>
<subparagraph id="ID8A9D7CE3899D48DBB5F186E518B2316A"><enum>(A)</enum><text>Collect and
maintain all information relating to individuals, families, and employers
participating in the program under this title.</text>
</subparagraph><subparagraph id="ID890B29832F4C4DC2B053141C3DBD535F"><enum>(B)</enum><text>Serve as a
channel of communication between health insurance issuers, participating
employers, and individuals relating to the administration of this title.</text>
</subparagraph><subparagraph id="ID4CAB4B53D9A048B5A64F49E2E192AA8C"><enum>(C)</enum><text>Otherwise carry
out such activities for the administration of this title, in such manner, as
may be provided for in the contract entered into under this section.</text>
</subparagraph></paragraph></subsection><subsection id="ID118E611348E84C49AE6A4059E36A0620"><enum>(b)</enum><header>Application</header><text>To
be eligible to receive a contract under subsection (a), an entity shall prepare
and submit to the Administrator an application at such time, in such manner,
and containing such information as the Administration may require.</text>
</subsection><subsection id="ID832DD44B83DA4390B3F870721E00303D"><enum>(c)</enum><header>Process</header>
<paragraph id="ID86CDAEB673CD4B369EE088886B29BC0E"><enum>(1)</enum><header>Competitive
bidding</header><text>All contracts under this section shall be awarded through
a competitive bidding process on a biennial basis.</text>
</paragraph><paragraph id="ID3CD09A402A414F0F82F93A2F3B34FCD6"><enum>(2)</enum><header>Requirement</header><text>No
contract shall be entered into with any entity under this section unless the
Administrator finds that such entity will perform its obligations under the
contract efficiently and effectively and will meet such requirements as to
financial responsibility, legal authority, and other matters as the
Administrator finds pertinent.</text>
</paragraph><paragraph id="ID9A6A8B398F1540589F87F5CAAE0241DA"><enum>(3)</enum><header>Publication of
standards and criteria</header><text>If the Administrator enters into contracts
under subsection (a), the Administrator shall publish in the Federal Register
standards and criteria for the efficient and effective performance of contract
obligations under this section, and opportunity shall be provided for public
comment prior to implementation. In establishing such standards and criteria,
the Administrator shall provide for a system to measure an entity’s performance
of responsibilities.</text>
</paragraph><paragraph id="ID54FC3DB74C0048DB821737154B0D5A11"><enum>(4)</enum><header>Term</header><text>Each
contract under this section shall be for a term of at least 2 years, and may be
made automatically renewable from term to term in the absence of notice by
either party of intention to terminate at the end of the current term, except
that the Administrator may terminate any such contract at any time (after such
reasonable notice and opportunity for hearing to the entity involved as the
Administrator may provide in regulations) if the Administrator finds that the
entity has failed substantially to carry out the contract or is carrying out
the contract in a manner inconsistent with the efficient and effective
administration of the program established by this title.</text>
</paragraph></subsection><subsection id="ID4E3097B093BC4F73B24E9B99A8673533"><enum>(d)</enum><header>Terms of
Contract</header><text>A contract entered into under this section shall
include—</text>
<paragraph id="ID71235D83061044048A2A7FC04615A7E9"><enum>(1)</enum><text>a description of
the duties of the contracting entity;</text>
</paragraph><paragraph id="IDB0CDADB98235404F81D5F2CDB3D23DE5"><enum>(2)</enum><text>an assurance that
the entity will furnish to the Administrator such timely information and
reports as the Administrator determines appropriate;</text>
</paragraph><paragraph id="IDAA7E0B73B4A34DD2B8DAFA70CB57CA40"><enum>(3)</enum><text>an assurance that
the entity will maintain such records and afford such access thereto as the
Administrator finds necessary to assure the correctness and verification of the
information and reports under paragraph (2) and otherwise to carry out the
purposes of this title;</text>
</paragraph><paragraph id="ID89577A9580094E4187F36C30FEA1D19E"><enum>(4)</enum><text>an assurance that
the entity shall comply with such confidentiality and privacy protection
guidelines and procedures as the Administrator may require;</text>
</paragraph><paragraph id="id23A6D86917D74991A8860DAC158001F2"><enum>(5)</enum><text>an assurance that
the entity does not have, and will continue to avoid, any conflicts of interest
relative to any functions it will perform; and</text>
</paragraph><paragraph id="ID49AD119BCC79457587FFEFE918912BD4"><enum>(6)</enum><text>such other terms
and conditions not inconsistent with this section as the Administrator may find
necessary or appropriate.</text>
</paragraph></subsection></section><section id="ID3BB59A4975B046AC8E5064E9930CDFCC"><enum>3110.</enum><header>Public
education campaign and report</header>
<subsection id="ID2C882C9F2AFB49138E252EFE44B1D041"><enum>(a)</enum><header>In
General</header><text>In carrying out this title, the Administrator shall
develop and implement an educational campaign with interagency participation
(including at a minimum the Small Business Administration, the Department of
Labor, and employees of the office established under section 3102 who oversee
the provision of information through navigators) to provide information to
employers and the general public concerning the health insurance program
developed under this title, including the contact information relating to an
individual or individuals who will be available to resolve various types of
problems with health insurance coverage provided under this title.</text>
</subsection><subsection id="IDFA83763E99404CD4966A956390CA1C25"><enum>(b)</enum><header>Public
Education Campaign</header><text>There is authorized to be appropriated to
carry out this section, such sums as may be necessary for each of fiscal years
2009 through 2011.</text>
</subsection><subsection id="id9E7AA2E45573456B8F9258DA80041B45"><enum>(c)</enum><header>Reports to
Congress</header><text display-inline="yes-display-inline">Not later than 1
year and 2 years after the implementation of the campaign under subsection (a),
the Administrator shall submit to the appropriate committees of Congress a
report that describes the activities of the Administrator under subsection (a),
including a determination by the Administrator of the percentage of employers
with knowledge of the health benefits program under this title.</text>
</subsection></section><section id="IDA8400B5546294970BBC7B9FEDFFBC9CF"><enum>3111.</enum><header>Appropriations</header><text display-inline="no-display-inline">There are authorized to be appropriated to
the Administrator such sums as may be necessary in each fiscal year for the
development and administration of the program under this title.</text>
</section><section commented="no" display-inline="no-display-inline" id="ID03AE44D5581E4BFEAFF4CB23500D22F8" section-type="subsequent-section"><enum>3112.</enum><header>Effective
date</header><text display-inline="no-display-inline">This title shall take
effect on the date of enactment of this
title.</text>
</section>.
3.Section 514(b)(2) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(2)) is
amended by adding at the end the following:
(C)Notwithstanding subparagraph (A), the
provisions of subsections (d)(1)(B) and (g)(2)(A) of section 3107 of the Public
Health Service Act (relating to the prohibition on health-status related rating
and the Federal enforcement of such provisions) shall supercede any State law
that conflicts with such
provisions.
.
4.Credit for small
business employee health insurance expenses
(a)Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to credits) is amended by inserting
after section 45N the following new section:
45O.Small business
employee health insurance credit
(a)In the case of a qualified small employer, there shall
be allowed as a credit against the tax imposed by this chapter for the taxable
year an amount equal to the credit amount described in subsection (b).
(b)For purposes of this section—
(1)The credit amount described in this subsection is the
product of—
(A)the amount
specified in paragraph (2),
(B)the employer size
factor specified in paragraph (3), and
(C)the percentage of
year factor specified in paragraph (4).
(2)For purposes of paragraph (1)—
(A)The applicable amount is equal to—
(i)$1,000 for each
employee of the employer who receives self-only health insurance coverage
through the employer,
(ii)$2,000 for each
employee of the employer who receives family health insurance coverage through
the employer, and
(iii)$1,500 for each
employee of the employer who receives health insurance coverage for 2 adults or
1 adult and 1 or more children through the employer.
(B)Bonus for
payment of greater percentage of premiumsThe applicable amount
otherwise specified in subparagraph (A) shall be increased by $200 in the case
of subparagraph (A)(i), $400 in the case of subparagraph (A)(ii), and $300 in
the case of subparagraph (A)(iii), for each additional 10 percent of the
qualified employee health insurance expenses exceeding 60 percent which are
paid by the qualified small employer.
(3)For purposes of paragraph (1), the employer size factor is
the percentage determined in accordance with the following table:
If the
employer size is:The percentage is:
10 or fewer full-time
employees100%
More than 10 but not
more than 20 full-time employees80%
More than 20 but not
more than 30 full-time employees60%
More than 30 but not
more than 40 full-time employees40%
More than 40 but not
more than 50 full-time employees20%
More than 50 full-time
employees0%.
(4)Percentage of
year factorFor purposes of paragraph (1), the percentage of year
factor is equal to the ratio of—
(A)the number of
months during the taxable year for which the employer paid or incurred
qualified employee health insurance expenses, and
(B)12.
(c)Definitions and
special rulesFor purposes of this section—
(1)
(A)The term qualified small employer means any
employer (as defined in section 3101(a)(4) of the Public Health Service Act)
which—
(i)either—
(I)purchases health
insurance coverage for its employees in a small group market in a State which
meets the requirements under subparagraph (B), or
(II)with respect to
any taxable year beginning after 2011, is a participating employer (as defined
in section 3101(a)(8) of such Act) in the program under title XXX of such
Act,
(ii)pays or incurs
at least 60 percent of the qualified employee health insurance expenses of such
employer or is self-employed, and
(iii)employed an
average of 50 or fewer full-time employees during the preceding taxable year or
was a self-employed individual with either not less than $5,000 in net earnings
or not less than $15,000 in gross earnings from self-employment in the
preceding taxable year.
(B)State small
group market requirementsA State meets the requirements of this
subparagraph if—
(i)during calendar
years 2010 and 2011, the State—
(I)defines its small
group market to include groups of one (so that self-employed individuals are
eligible for coverage in such market),
(II)prohibits the
use of health-status related factors and other factors described in section
3107(d)(5)(A) of such Act, and
(III)has in effect
rating rules that comply with section 3107(d)(5)(A) of such Act (except that
such rules may impose limits on rating variation in addition to those provided
for in such section),
(ii)during calendar
years 2012 and 2013, the State—
(I)meets the
requirements under clause (i), and
(II)maintains a
Statewide purchasing pool that provides purchasers in the small group market a
choice of health benefit plans, with comparative information provided
concerning such plans and the premiums charged for such plans made available
through the Internet, and
(iii)for calendar
years after 2013, the State—
(I)meets the
requirements under clauses (i)(I), (i)(II), and (ii)(II), and
(II)has in effect
rating rules that comply with paragraph (2)(B) or (3) of section 3107(d) of
such Act, whichever is in effect for such calendar year (except that such rules
may impose limits on rating variation in addition to those provided for in such
section).
(2)Qualified
employee health insurance expenses
(A)The term qualified employee health insurance
expenses means any amount paid by an employer or an employee of such
employer for health insurance coverage under such Act to the extent such amount
is attributable to coverage—
(i)provided to any
employee (as defined in subsection 3101(a)(3) of such Act), or
(ii)for the
employer, in the case of a self-employed individual.
(B)Exception for
amounts paid under salary reduction arrangementsNo amount paid
or incurred for health insurance coverage pursuant to a salary reduction
arrangement shall be taken into account under subparagraph (A).
(3)The term full-time employee means, with
respect to any period, an employee (as defined in section 3101(a)(3) of such
Act) of an employer if the average number of hours worked by such employee in
the preceding taxable year for such employer was at least 35 hours per
week.
(d)
(1)For each taxable year after 2010, the dollar amounts
specified in subsections (b)(2)(A), (b)(2)(B), and (c)(1)(A)(iii) (after the
application of this paragraph) shall be the amounts in effect in the preceding
taxable year or, if greater, the product of—
(A)the corresponding
dollar amount specified in such subsection, and
(B)the ratio of the
index of wage inflation (as determined by the Bureau of Labor Statistics) for
August of the preceding calendar year to such index of wage inflation for
August of 2009.
(2)If
any amount determined under paragraph (1) is not a multiple of $100, such
amount shall be rounded to the next lowest multiple of $100.
(e)Application of
Certain Rules in Determination of Employer SizeFor purposes of
this section—
(1)Application of
aggregation rule for employersAll persons treated as a single
employer under subsection (b), (c), (m), or (o) of section 414 shall be treated
as 1 employer.
(2)Employers not
in existence in preceding yearIn the case of an employer which
was not in existence for the full preceding taxable year, the determination of
whether such employer meets the requirements of this section shall be based on
the average number of full-time employees that it is reasonably expected such
employer will employ on business days in the employer’s first full taxable
year.
(3)Any
reference in this subsection to an employer shall include a reference to any
predecessor of such employer.
(f)Coordination
with advance payments of creditWith respect to any taxable year,
the amount which would (but for this subsection) be allowed as a credit to the
taxpayer under subsection (a) shall be reduced by the aggregate amount paid on
behalf of such taxpayer under section 7527A for months beginning in such
taxable year. If the amount determined under this subsection is less than zero,
the taxpayer shall owe additional tax in such amount under this chapter.
(g)Credits for
nonprofit organizationsAny credit which would be allowable under
subsection (a) with respect to a qualified small business if such qualified
small business were not exempt from tax under this chapter shall be treated as
a credit allowable under this subpart to such qualified small
business.
.
(b)Advance
payments of creditChapter 77 of the Internal Revenue Code of
1986 is amended by inserting after section 7527 the following new
section:
7527A.Advance
payment of credit for health insurance costs for qualified small
employers
(a)Not later than December 31, 2009, the Secretary shall
establish a program for making monthly payments on behalf of qualified small
employers to the program established under title XXX of the Public Health
Service Act. The amount of the monthly payment for a qualified small employer
shall be one-twelfth of the amount of the credit for the tax year to which the
qualified small employer is entitled under section 36. If a monthly payment is
made by the Secretary for which the employer is not entitled to a corresponding
credit, the employer shall owe additional tax in such amount under this
chapter.
(b)For purposes of this section, the term qualified
small employer has the meaning given such term in section
36(c)(1).
.
(c)
(1)The table of
sections for subpart D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
items:
Sec. 45O. Small business employee health insurance
credit.
.
(2)The table of
sections for chapter 77 of such Code is amended by inserting after the item
relating to section 7527 the following new item:
Sec. 7527A. Advance payment of credit for health insurance
costs for qualified small
employers.
.
(d)The
payment of premiums by a participating employer under this Act shall be
considered to be an ordinary and necessary expense in carrying on a trade or
business for purposes of the Internal Revenue Code of 1986 and shall be
deductible.
(e)The amendments made by this section shall apply to amounts
paid or incurred in taxable years beginning after December 31, 2009.