1.Short title; table of
contents
(a)This Act may be cited
as the Patient Centered Healthcare
Savings Act of 2011
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Repealing of PPACA
Sec. 101. Repeal of the health care reform package.
Title II—Medical Liability Reform
Sec. 201. Findings and purpose.
Sec. 202. Encouraging speedy resolution of claims.
Sec. 203. Compensating patient injury.
Sec. 204. Maximizing patient recovery.
Sec. 205. Punitive damages.
Sec. 206. Authorization of payment of future damages to
claimants in HEALTH care lawsuits.
Sec. 207. Definitions.
Sec. 208. Effect on other laws.
Sec. 209. State flexibility and protection of States’
rights.
Sec. 210. Applicability; effective date.
Title III—Allowing People To Purchase Health Insurance Across
State Lines
Sec. 301. Specification of constitutional authority for
enactment of law.
Sec. 302. Findings.
Sec. 303. Cooperative governing of individual health insurance
coverage.
Sec. 304. Severability.
Title IV—Increasing Transparency and Competition in
Healthcare
Sec. 401. Access to Medicare data to improve
transparency.
Title V—Expanding the Effectiveness of Health Savings
Accounts
Sec. 501. Amendment of 1986 Code.
Subtitle A—Provisions relating to tax-Preferred health
accounts
Sec. 511. Allow both spouses to make catch-up contributions to
the same HSA account.
Sec. 512. Provisions relating to Medicare.
Sec. 513. Individuals eligible for veterans benefits for a
service-connected disability.
Sec. 514. Individuals eligible for Indian Health Service
assistance.
Sec. 515. Individuals eligible for TRICARE
coverage.
Sec. 516. Health FSA carryforwards.
Sec. 517. FSA and HRA interaction with HSAs.
Sec. 518. Allowance of distributions for prescription and
over-the-counter medicines and drugs.
Sec. 519. Purchase of health insurance from HSA
account.
Sec. 520. Special rule for certain medical expenses incurred
before establishment of account.
Sec. 521. Preventive care prescription drug
clarification.
Sec. 522. Equivalent bankruptcy protections for health savings
accounts as retirement funds.
Sec. 523. Administrative error correction before due date of
return.
Sec. 524. Reauthorization of medicaid health opportunity
accounts.
Subtitle B—Other provisions
Sec. 531. Certain exercise equipment and physical fitness
programs treated as medical care.
Sec. 532. Certain nutritional and dietary supplements to be
treated as medical care.
Sec. 533. Certain provider fees to be treated as medical
care.
Title VI—Covering People with Pre-Existing Conditions, Removing
Annual and Lifetime Coverage Caps, and Expanding Access to Care
Subtitle A—Making Health Care Coverage Affordable for Every
American
Chapter 1—Ensuring coverage for individuals with preexisting
conditions and multiple health care needs
Sec. 601. Establish universal access programs to improve high
risk pools and reinsurance markets.
Sec. 602. Elimination of certain requirements for guaranteed
availability in individual market.
Sec. 603. No annual or lifetime spending caps.
Sec. 604. Preventing unjust cancellation of insurance
coverage.
Chapter 2—Reducing health care premiums and the number of
uninsured Americans
Sec. 611. State innovation programs.
Sec. 612. Health plan finders.
Sec. 613. Administrative simplification.
Subtitle B—Improving Access to Health Care
Chapter 1—Expanding Access and Lowering Costs for Small
Businesses
Sec. 620. Short title.
Sec. 621. Rules governing association health plans.
Sec. 622. Clarification of treatment of single employer
arrangements.
Sec. 623. Enforcement provisions relating to association health
plans.
Sec. 624. Cooperation between Federal and State
authorities.
Sec. 625. Effective date and transitional and other
rules.
Chapter 2—Targeted Efforts to Expand Access
Sec. 631. Extending coverage of dependents.
Sec. 632. Allowing auto-enrollment for employer sponsored
coverage.
Title VII—Stopping Medicare, Waste, Fraud, and Abuse and
Increasing Penalties for Abusers
Sec. 701. Increased civil money penalties and criminal fines
for Medicare fraud and abuse.
Sec. 702. Increased sentences for felonies involving Medicare
fraud and abuse.
Sec. 703. Other DME supplier anti-fraud and abuse
provisions.
Sec. 704. Retention of certain fraud and abuse
provisions.
Sec. 705. Ensuring timely enforcement of Medicare secondary
payer requirements in liability cases.
<enum>I</enum><header>Repealing of
PPACA</header>
<section id="H952740B6EADA4800A564761E6097FD9A" section-type="subsequent-section"><enum>101.</enum><header>Repeal of the health
care reform package</header>
<subsection id="H1F31367605E94CC0923DCB4A61196950"><enum>(a)</enum><header>PPACA</header><text display-inline="yes-display-inline">The Patient Protection and Affordable Care
Act is repealed, and the provisions of law amended or repealed by such Act are
restored or revived as if such Act had not been enacted.</text>
</subsection><subsection id="H36E5FAE38E6240578517509F96DEC66F"><enum>(b)</enum><header>HCERA</header><text display-inline="yes-display-inline">Title I and subtitle B of title II of the
Health Care and Education Reconciliation Act of 2010 are repealed, and the
provisions of law amended or repealed by such title or subtitle are restored or
revived as if such title or subtitle had not been enacted.</text>
</subsection></section><enum>II</enum><header>Medical Liability
Reform</header>
<section id="H5768C578D37145B2A7AB18D64DDDBF1A"><enum>201.</enum><header>Findings and
purpose</header>
<subsection id="H195305FEDC0A4FA7AB3860465FB3B069"><enum>(a)</enum><header>Findings</header>
<paragraph id="H37213C31A781410A9F1E37E530C3198D"><enum>(1)</enum><header>Effect on health
care access and costs</header><text>Congress finds that our current civil
justice system is adversely affecting patient access to health care services,
better patient care, and cost-efficient health care, in that the health care
liability system is a costly and ineffective mechanism for resolving claims of
health care liability and compensating injured patients, and is a deterrent to
the sharing of information among health care professionals which impedes
efforts to improve patient safety and quality of care.</text>
</paragraph><paragraph id="H92828AC6F256457698F90ADFDBCA19B5"><enum>(2)</enum><header>Effect on
interstate commerce</header><text>Congress finds that the health care and
insurance industries are industries affecting interstate commerce and the
health care liability litigation systems existing throughout the United States
are activities that affect interstate commerce by contributing to the high
costs of health care and premiums for health care liability insurance purchased
by health care system providers.</text>
</paragraph><paragraph id="H230286AA10EE4A24BB585B740262BE75"><enum>(3)</enum><header>Effect on
federal spending</header><text>Congress finds that the health care liability
litigation systems existing throughout the United States have a significant
effect on the amount, distribution, and use of Federal funds because of—</text>
<subparagraph id="HBA36F40E5B084DAA85375AA5B41FD882"><enum>(A)</enum><text>the large number
of individuals who receive health care benefits under programs operated or
financed by the Federal Government;</text>
</subparagraph><subparagraph id="H2C3ECBDDECDC42478F9713940953545F"><enum>(B)</enum><text>the large number
of individuals who benefit because of the exclusion from Federal taxes of the
amounts spent to provide them with health insurance benefits; and</text>
</subparagraph><subparagraph id="HD5044565AF3F4B18B043821E449BA578"><enum>(C)</enum><text>the large number
of health care providers who provide items or services for which the Federal
Government makes payments.</text>
</subparagraph></paragraph></subsection><subsection id="H06E0C1900E8B47E8A6950F2F53B5A3DD"><enum>(b)</enum><header>Purpose</header><text>It
is the purpose of this title to implement reasonable, comprehensive, and
effective health care liability reforms designed to—</text>
<paragraph id="H3071FC1C1BC44B0CAC27E9EA22CCC5B0"><enum>(1)</enum><text>improve the
availability of health care services in cases in which health care liability
actions have been shown to be a factor in the decreased availability of
services;</text>
</paragraph><paragraph id="HCEC0EEC272CC4F278A2DA6C0C316017D"><enum>(2)</enum><text>reduce the
incidence of <quote>defensive medicine</quote> and lower the cost of health
care liability insurance, all of which contribute to the escalation of health
care costs;</text>
</paragraph><paragraph id="HE0574F799BBD4153A8428DE22EA51006"><enum>(3)</enum><text>ensure that
persons with meritorious health care injury claims receive fair and adequate
compensation, including reasonable noneconomic damages;</text>
</paragraph><paragraph id="HA4883D2CB4E0443DAD90D5050F0635D0"><enum>(4)</enum><text>improve the
fairness and cost-effectiveness of our current health care liability system to
resolve disputes over, and provide compensation for, health care liability by
reducing uncertainty in the amount of compensation provided to injured
individuals; and</text>
</paragraph><paragraph id="H784F56884FAF446CB34DC73DB1603F09"><enum>(5)</enum><text>provide an
increased sharing of information in the health care system which will reduce
unintended injury and improve patient care.</text>
</paragraph></subsection></section><section id="H4EEAF6B551F84D2892AA4467E1E65C20"><enum>202.</enum><header>Encouraging
speedy resolution of claims</header><text display-inline="no-display-inline">The time for the commencement of a health
care lawsuit shall be 3 years after the date of manifestation of injury or 1
year after the claimant discovers, or through the use of reasonable diligence
should have discovered, the injury, whichever occurs first. In no event shall
the time for commencement of a health care lawsuit exceed 3 years after the
date of manifestation of injury unless tolled for any of the following—</text>
<paragraph id="H851BDC585B2C4A59AEC981A44151B08D"><enum>(1)</enum><text>upon proof of
fraud;</text>
</paragraph><paragraph id="H5AB85BED3AC64840B61C06DF5D208821"><enum>(2)</enum><text>intentional
concealment; or</text>
</paragraph><paragraph id="H482DEA1846FF4C428B55D9239435A595"><enum>(3)</enum><text>the presence of a
foreign body, which has no therapeutic or diagnostic purpose or effect, in the
person of the injured person.</text>
</paragraph><continuation-text continuation-text-level="section">Actions by a
minor shall be commenced within 3 years from the date of the alleged
manifestation of injury except that actions by a minor under the full age of 6
years shall be commenced within 3 years of manifestation of injury or prior to
the minor’s 8th birthday, whichever provides a longer period. Such time
limitation shall be tolled for minors for any period during which a parent or
guardian and a health care provider or health care organization have committed
fraud or collusion in the failure to bring an action on behalf of the injured
minor.</continuation-text></section><section id="HCC26525CE6934B09A4276AEC1FBFE0C4"><enum>203.</enum><header>Compensating
patient injury</header>
<subsection id="H7667A87A65EA427490F56899A136AFB5"><enum>(a)</enum><header>Unlimited Amount
of Damages for Actual Economic Losses in Health Care Lawsuits</header><text>In
any health care lawsuit, nothing in this title shall limit a claimant’s
recovery of the full amount of the available economic damages, notwithstanding
the limitation in
<internal-xref idref="H5CECA17FCD5F44E2BE07FC28C96B2275" legis-path="4.(b)">subsection (b)</internal-xref>.</text>
</subsection><subsection id="H5CECA17FCD5F44E2BE07FC28C96B2275"><enum>(b)</enum><header>Additional
Noneconomic Damages</header><text>In any health care lawsuit, the amount of
noneconomic damages, if available, may be as much as $250,000, regardless of
the number of parties against whom the action is brought or the number of
separate claims or actions brought with respect to the same injury.</text>
</subsection><subsection id="HC537A1D9E54E41258A9F4EE302AE6631"><enum>(c)</enum><header>No Discount of
Award for Noneconomic Damages</header><text>For purposes of applying the
limitation in
<internal-xref idref="H5CECA17FCD5F44E2BE07FC28C96B2275" legis-path="4.(b)">subsection (b)</internal-xref>, future noneconomic damages
shall not be discounted to present value. The jury shall not be informed about
the maximum award for noneconomic damages. An award for noneconomic damages in
excess of $250,000 shall be reduced either before the entry of judgment, or by
amendment of the judgment after entry of judgment, and such reduction shall be
made before accounting for any other reduction in damages required by law. If
separate awards are rendered for past and future noneconomic damages and the
combined awards exceed $250,000, the future noneconomic damages shall be
reduced first.</text>
</subsection><subsection id="H789DD019CB894F17BC1D7E75623FFB05"><enum>(d)</enum><header>Fair Share
Rule</header><text>In any health care lawsuit, each party shall be liable for
that party’s several share of any damages only and not for the share of any
other person. Each party shall be liable only for the amount of damages
allocated to such party in direct proportion to such party’s percentage of
responsibility. Whenever a judgment of liability is rendered as to any party, a
separate judgment shall be rendered against each such party for the amount
allocated to such party. For purposes of this section, the trier of fact shall
determine the proportion of responsibility of each party for the claimant’s
harm.</text>
</subsection></section><section id="H982F5C54C2C84F6987D43AE96AF0873D"><enum>204.</enum><header>Maximizing
patient recovery</header>
<subsection id="H8EA2637ABD4C45A381DA196CDCD7464B"><enum>(a)</enum><header>Court
Supervision of Share of Damages Actually Paid to Claimants</header><text>In any
health care lawsuit, the court shall supervise the arrangements for payment of
damages to protect against conflicts of interest that may have the effect of
reducing the amount of damages awarded that are actually paid to claimants. In
particular, in any health care lawsuit in which the attorney for a party claims
a financial stake in the outcome by virtue of a contingent fee, the court shall
have the power to restrict the payment of a claimant’s damage recovery to such
attorney, and to redirect such damages to the claimant based upon the interests
of justice and principles of equity. In no event shall the total of all
contingent fees for representing all claimants in a health care lawsuit exceed
the following limits:</text>
<paragraph id="H2872FF4F46204A9984DCD1EFCA881090"><enum>(1)</enum><text>Forty percent of
the first $50,000 recovered by the claimant(s).</text>
</paragraph><paragraph id="H4959CC6866C64103B7FC44F00DC32CAD"><enum>(2)</enum><text>Thirty-three and
one-third percent of the next $50,000 recovered by the claimant(s).</text>
</paragraph><paragraph id="HF0F14116E92E41E1BE06B4246A208EC7"><enum>(3)</enum><text>Twenty-five
percent of the next $500,000 recovered by the claimant(s).</text>
</paragraph><paragraph id="HBA4C665BDD70431397D0A59428F4DA3A"><enum>(4)</enum><text>Fifteen percent of
any amount by which the recovery by the claimant(s) is in excess of
$600,000.</text>
</paragraph></subsection><subsection id="HD8D434B3556F4BE2A0DDE6D4B95FB5BB"><enum>(b)</enum><header>Applicability</header><text>The
limitations in this section shall apply whether the recovery is by judgment,
settlement, mediation, arbitration, or any other form of alternative dispute
resolution. In a health care lawsuit involving a minor or incompetent person, a
court retains the authority to authorize or approve a fee that is less than the
maximum permitted under this section. The requirement for court supervision in
the first two sentences of
<internal-xref idref="H8EA2637ABD4C45A381DA196CDCD7464B" legis-path="5.(a)">subsection (a)</internal-xref> applies only in civil
actions.</text>
</subsection></section><section id="H5996D6E30EDD45A6A72E9BA33AE87543"><enum>205.</enum><header>Punitive
damages</header>
<subsection id="H5FF38D2AD6424CECBB6D2582B7F69852"><enum>(a)</enum><header>In
General</header><text>Punitive damages may, if otherwise permitted by
applicable State or Federal law, be awarded against any person in a health care
lawsuit only if it is proven by clear and convincing evidence that such person
acted with malicious intent to injure the claimant, or that such person
deliberately failed to avoid unnecessary injury that such person knew the
claimant was substantially certain to suffer. In any health care lawsuit where
no judgment for compensatory damages is rendered against such person, no
punitive damages may be awarded with respect to the claim in such lawsuit. No
demand for punitive damages shall be included in a health care lawsuit as
initially filed. A court may allow a claimant to file an amended pleading for
punitive damages only upon a motion by the claimant and after a finding by the
court, upon review of supporting and opposing affidavits or after a hearing,
after weighing the evidence, that the claimant has established by a substantial
probability that the claimant will prevail on the claim for punitive damages.
At the request of any party in a health care lawsuit, the trier of fact shall
consider in a separate proceeding—</text>
<paragraph id="HCE38073F24794C708027D8D867662DE5"><enum>(1)</enum><text>whether punitive
damages are to be awarded and the amount of such award; and</text>
</paragraph><paragraph id="HCCBD25C859284335AAB65A04C61680A4"><enum>(2)</enum><text>the amount of
punitive damages following a determination of punitive liability.</text>
</paragraph><continuation-text continuation-text-level="subsection">If a
separate proceeding is requested, evidence relevant only to the claim for
punitive damages, as determined by applicable State law, shall be inadmissible
in any proceeding to determine whether compensatory damages are to be
awarded.</continuation-text></subsection><subsection id="H02857E8353E34F4C8F23B6F90926A1E1"><enum>(b)</enum><header>Determining
Amount of Punitive Damages</header>
<paragraph id="H276322B22FA243EA85E6EBFDD1E753F4"><enum>(1)</enum><header>Factors
considered</header><text>In determining the amount of punitive damages, if
awarded, in a health care lawsuit, the trier of fact shall consider only the
following—</text>
<subparagraph id="HD4ED6A4E3C8245BBAC930F1630D9912C"><enum>(A)</enum><text>the severity of
the harm caused by the conduct of such party;</text>
</subparagraph><subparagraph id="H064F064E8EC84715A2319F8ECB794E03"><enum>(B)</enum><text>the duration of
the conduct or any concealment of it by such party;</text>
</subparagraph><subparagraph id="HC882651266A941A7A04D573C4EB76715"><enum>(C)</enum><text>the profitability
of the conduct to such party;</text>
</subparagraph><subparagraph id="H13E7B3A503B84A04B9ED4FB67AF50CDF"><enum>(D)</enum><text>the number of
products sold or medical procedures rendered for compensation, as the case may
be, by such party, of the kind causing the harm complained of by the
claimant;</text>
</subparagraph><subparagraph id="HA232C3BE97B9473ABFCF6FBAA8E63989"><enum>(E)</enum><text>any criminal
penalties imposed on such party, as a result of the conduct complained of by
the claimant; and</text>
</subparagraph><subparagraph id="HB2C0DDEECAEE40B59FF1C11F7B0E3FBA"><enum>(F)</enum><text>the amount of any
civil fines assessed against such party as a result of the conduct complained
of by the claimant.</text>
</subparagraph></paragraph><paragraph id="H530C0B8F59AA41E5A0F1AEFEEC216CEE"><enum>(2)</enum><header>Maximum
award</header><text>The amount of punitive damages, if awarded, in a health
care lawsuit may be as much as $250,000 or as much as two times the amount of
economic damages awarded, whichever is greater. The jury shall not be informed
of this limitation.</text>
</paragraph></subsection><subsection id="H2B81F10F64EA496EA4AF6A354FBC7727"><enum>(c)</enum><header>No Punitive
Damages for Products That Comply With FDA Standards</header>
<paragraph id="H68FACBA6DA0745DE9DCE3FC275E97FE3"><enum>(1)</enum><header>In
general</header>
<subparagraph id="H2A6663E41670431AAFB1894F28E4663E"><enum>(A)</enum><text>No punitive
damages may be awarded against the manufacturer or distributor of a medical
product, or a supplier of any component or raw material of such medical
product, based on a claim that such product caused the claimant’s harm
where—</text>
<clause id="H381589B332904EDBB1EACA10625615CA"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="H2D848C51EA8C4D5CBAD863E220E20D68"><enum>(I)</enum><text>such medical product was
subject to premarket approval, clearance, or licensure by the Food and Drug
Administration with respect to the safety of the formulation or performance of
the aspect of such medical product which caused the claimant’s harm or the
adequacy of the packaging or labeling of such medical product; and</text>
</subclause><subclause id="H58F9CD424B4F4AF3B63CB4BACA45FA8B" indent="up1"><enum>(II)</enum><text>such medical product was so approved,
cleared, or licensed; or</text>
</subclause></clause><clause id="H1F9C383F5FF64958930A27C800ABAC3B"><enum>(ii)</enum><text>such medical
product is generally recognized among qualified experts as safe and effective
pursuant to conditions established by the Food and Drug Administration and
applicable Food and Drug Administration regulations, including without
limitation those related to packaging and labeling, unless the Food and Drug
Administration has determined that such medical product was not manufactured or
distributed in substantial compliance with applicable Food and Drug
Administration statutes and regulations.</text>
</clause></subparagraph><subparagraph id="HE906CA6AA12E4CAE9DA8BEE7AB1C6D5F"><enum>(B)</enum><header>Rule of
construction</header><text><internal-xref idref="H2A6663E41670431AAFB1894F28E4663E" legis-path="7.(c)(1)(A)">Subparagraph
(A)</internal-xref> may not be construed as establishing the obligation of the
Food and Drug Administration to demonstrate affirmatively that a manufacturer,
distributor, or supplier referred to in such subparagraph meets any of the
conditions described in such subparagraph.</text>
</subparagraph></paragraph><paragraph id="H66322880439A4FE285A793B27AD47412"><enum>(2)</enum><header>Liability of
health care providers</header><text>A health care provider who prescribes, or
who dispenses pursuant to a prescription, a medical product approved, licensed,
or cleared by the Food and Drug Administration shall not be named as a party to
a product liability lawsuit involving such product and shall not be liable to a
claimant in a class action lawsuit against the manufacturer, distributor, or
seller of such product. Nothing in this paragraph prevents a court from
consolidating cases involving health care providers and cases involving
products liability claims against the manufacturer, distributor, or product
seller of such medical product.</text>
</paragraph><paragraph id="HB427E0107B4649FAA8C6EB0A1EA2AFFC"><enum>(3)</enum><header>Packaging</header><text>In
a health care lawsuit for harm which is alleged to relate to the adequacy of
the packaging or labeling of a drug which is required to have tamper-resistant
packaging under regulations of the Secretary of Health and Human Services
(including labeling regulations related to such packaging), the manufacturer or
product seller of the drug shall not be held liable for punitive damages unless
such packaging or labeling is found by the trier of fact by clear and
convincing evidence to be substantially out of compliance with such
regulations.</text>
</paragraph><paragraph id="HCE7E6B5046A7477D99D3B4EC1A49AE98"><enum>(4)</enum><header>Exception</header><text><internal-xref idref="H68FACBA6DA0745DE9DCE3FC275E97FE3" legis-path="7.(c)(1)">Paragraph
(1)</internal-xref> shall not apply in any health care lawsuit in which—</text>
<subparagraph id="HDDD5676DC34741889095703499278CC3"><enum>(A)</enum><text>a person, before
or after premarket approval, clearance, or licensure of such medical product,
knowingly misrepresented to or withheld from the Food and Drug Administration
information that is required to be submitted under the
<act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name>
(21 U.S.C. 301 et seq.) or section 351 of the <act-name parsable-cite="PHSA">Public Health Service Act</act-name> (42 U.S.C. 262) that
is material and is causally related to the harm which the claimant allegedly
suffered; or</text>
</subparagraph><subparagraph id="HADF892846A5241AC970E25037D3A145F"><enum>(B)</enum><text>a person made an
illegal payment to an official of the Food and Drug Administration for the
purpose of either securing or maintaining approval, clearance, or licensure of
such medical product.</text>
</subparagraph></paragraph></subsection></section><section id="HAA712751FAE34BF7BA81285966E9011F"><enum>206.</enum><header>Authorization
of payment of future damages to claimants in HEALTH care lawsuits</header>
<subsection id="HEC73CAE099ED42A18C96452F71C4E3CA"><enum>(a)</enum><header>In
General</header><text>In any health care lawsuit, if an award of future
damages, without reduction to present value, equaling or exceeding $50,000 is
made against a party with sufficient insurance or other assets to fund a
periodic payment of such a judgment, the court shall, at the request of any
party, enter a judgment ordering that the future damages be paid by periodic
payments, in accordance with the Uniform Periodic Payment of Judgments Act
promulgated by the National Conference of Commissioners on Uniform State
Laws.</text>
</subsection><subsection id="HF63961FE684741EBA029F9E03871DF00"><enum>(b)</enum><header>Applicability</header><text>This
section applies to all actions which have not been first set for trial or
retrial before the effective date of this Act.</text>
</subsection></section><section id="H95BB389611B741F59011B0DFA716774D"><enum>207.</enum><header>Definitions</header><text display-inline="no-display-inline">In this title:</text>
<paragraph id="HEACF01B871E44175BA654F78F50C8E14"><enum>(1)</enum><header>Alternative
dispute resolution system; ADR</header><text>The term <term>alternative dispute
resolution system</term> or <term>ADR</term> means a system that provides for
the resolution of health care lawsuits in a manner other than through a civil
action brought in a State or Federal court.</text>
</paragraph><paragraph id="H21906CC7DDD5470AAF6E963CC4D1C194"><enum>(2)</enum><header>Claimant</header><text>The
term <term>claimant</term> means any person who brings a health care lawsuit,
including a person who asserts or claims a right to legal or equitable
contribution, indemnity, or subrogation, arising out of a health care liability
claim or action, and any person on whose behalf such a claim is asserted or
such an action is brought, whether deceased, incompetent, or a minor.</text>
</paragraph><paragraph id="H2162C8ECA06B4CEDA2188A3C31401CEF"><enum>(3)</enum><header>Compensatory
damages</header><text>The term <term>compensatory damages</term> means
objectively verifiable monetary losses incurred as a result of the provision
of, use of, or payment for (or failure to provide, use, or pay for) health care
services or medical products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic services, loss of
employment, and loss of business or employment opportunities, damages for
physical and emotional pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic service),
hedonic damages, injury to reputation, and all other nonpecuniary losses of any
kind or nature. The term <term>compensatory damages</term> includes economic
damages and noneconomic damages, as such terms are defined in this
section.</text>
</paragraph><paragraph id="HB5B6111825CB4042B70DFCCD9EED4B16"><enum>(4)</enum><header>Contingent
fee</header><text>The term <term>contingent fee</term> includes all
compensation to any person or persons which is payable only if a recovery is
effected on behalf of one or more claimants.</text>
</paragraph><paragraph id="H5563A1B6439544D59A247AEDC6D6F1FD"><enum>(5)</enum><header>Economic
damages</header><text>The term <term>economic damages</term> means objectively
verifiable monetary losses incurred as a result of the provision of, use of, or
payment for (or failure to provide, use, or pay for) health care services or
medical products, such as past and future medical expenses, loss of past and
future earnings, cost of obtaining domestic services, loss of employment, and
loss of business or employment opportunities.</text>
</paragraph><paragraph id="HC630D4CB2E9C48D7A39D315F55FEEE6D"><enum>(6)</enum><header>Health care
lawsuit</header><text>The term <term>health care lawsuit</term> means any
health care liability claim concerning the provision of health care goods or
services or any medical product affecting interstate commerce, or any health
care liability action concerning the provision of health care goods or services
or any medical product affecting interstate commerce, brought in a State or
Federal court or pursuant to an alternative dispute resolution system, against
a health care provider, a health care organization, or the manufacturer,
distributor, supplier, marketer, promoter, or seller of a medical product,
regardless of the theory of liability on which the claim is based, or the
number of claimants, plaintiffs, defendants, or other parties, or the number of
claims or causes of action, in which the claimant alleges a health care
liability claim. Such term does not include a claim or action which is based on
criminal liability; which seeks civil fines or penalties paid to Federal,
State, or local government; or which is grounded in antitrust.</text>
</paragraph><paragraph id="H5D77B09395FD44ACBA297D2A537EED8D"><enum>(7)</enum><header>Health care
liability action</header><text>The term <term>health care liability
action</term> means a civil action brought in a State or Federal court or
pursuant to an alternative dispute resolution system, against a health care
provider, a health care organization, or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical product, regardless of the
theory of liability on which the claim is based, or the number of plaintiffs,
defendants, or other parties, or the number of causes of action, in which the
claimant alleges a health care liability claim.</text>
</paragraph><paragraph id="H9CC3D764DD9D45B3A367C69F0FF008BF"><enum>(8)</enum><header>Health care
liability claim</header><text>The term <term>health care liability claim</term>
means a demand by any person, whether or not pursuant to ADR, against a health
care provider, health care organization, or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical product, including, but
not limited to, third-party claims, cross-claims, counter-claims, or
contribution claims, which are based upon the provision of, use of, or payment
for (or the failure to provide, use, or pay for) health care services or
medical products, regardless of the theory of liability on which the claim is
based, or the number of plaintiffs, defendants, or other parties, or the number
of causes of action.</text>
</paragraph><paragraph id="HAF055C7633CD4B3386D4E4AA6A37192B"><enum>(9)</enum><header>Health care
organization</header><text>The term <term>health care organization</term> means
any person or entity which is obligated to provide or pay for health benefits
under any health plan, including any person or entity acting under a contract
or arrangement with a health care organization to provide or administer any
health benefit.</text>
</paragraph><paragraph id="H332423E534A34D5A9789188A2D7AB7C1"><enum>(10)</enum><header>Health care
provider</header><text>The term <term>health care provider</term> means any
person or entity required by State or Federal laws or regulations to be
licensed, registered, or certified to provide health care services, and being
either so licensed, registered, or certified, or exempted from such requirement
by other statute or regulation.</text>
</paragraph><paragraph id="H2F628EFD83994DBBBC1349BFA0FA550A"><enum>(11)</enum><header>Health care
goods or services</header><text>The term <term>health care goods or
services</term> means any goods or services provided by a health care
organization, provider, or by any individual working under the supervision of a
health care provider, that relates to the diagnosis, prevention, or treatment
of any human disease or impairment, or the assessment or care of the health of
human beings.</text>
</paragraph><paragraph id="H6E7D37D5FC894D94A32ECEA9CCA2AAD1"><enum>(12)</enum><header>Malicious
intent to injure</header><text>The term <term>malicious intent to injure</term>
means intentionally causing or attempting to cause physical injury other than
providing health care goods or services.</text>
</paragraph><paragraph id="HBD8EE71EBFB3438D896B0BC78B90F25F"><enum>(13)</enum><header>Medical
product</header><text>The term <term>medical product</term> means a drug,
device, or biological product intended for humans, and the terms
<term>drug</term>, <term>device</term>, and <term>biological product</term>
have the meanings given such terms in sections 201(g)(1) and 201(h) of the
Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) and (h)) and section
351(a) of the <act-name parsable-cite="PHSA">Public Health Service
Act</act-name> (42 U.S.C. 262(a)), respectively, including any component or raw
material used therein, but excluding health care services.</text>
</paragraph><paragraph id="H7738604CA2A14CC9B7F1969B59B73DE9"><enum>(14)</enum><header>Noneconomic
damages</header><text>The term <term>noneconomic damages</term> means damages
for physical and emotional pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic service),
hedonic damages, injury to reputation, and all other nonpecuniary losses of any
kind or nature.</text>
</paragraph><paragraph id="HA27A27C4FC7A470EA0E59DD40F33F510"><enum>(15)</enum><header>Punitive
damages</header><text>The term <term>punitive damages</term> means damages
awarded, for the purpose of punishment or deterrence, and not solely for
compensatory purposes, against a health care provider, health care
organization, or a manufacturer, distributor, or supplier of a medical product.
Punitive damages are neither economic nor noneconomic damages.</text>
</paragraph><paragraph id="H3543717A013C47CE80664B2E35C5894A"><enum>(16)</enum><header>Recovery</header><text>The
term <term>recovery</term> means the net sum recovered after deducting any
disbursements or costs incurred in connection with prosecution or settlement of
the claim, including all costs paid or advanced by any person. Costs of health
care incurred by the plaintiff and the attorneys’ office overhead costs or
charges for legal services are not deductible disbursements or costs for such
purpose.</text>
</paragraph><paragraph id="H25576D0DF8734ED08236F6D3DF8E5698"><enum>(17)</enum><header>State</header><text>The
term <term>State</term> means each of the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific
Islands, and any other territory or possession of the United States, or any
political subdivision thereof.</text>
</paragraph></section><section id="HBF84B584302947BEA40EC5265BD33204"><enum>208.</enum><header>Effect on other
laws</header>
<subsection id="H2D4BAC29B0EB42D9BFB81ADBB79D9F89"><enum>(a)</enum><header>Vaccine
Injury</header>
<paragraph id="H9FB4FB8821814B2CA7DB3E11CAD3443B"><enum>(1)</enum><text>To the extent that
title XXI of the <act-name parsable-cite="PHSA">Public Health Service
Act</act-name> establishes a Federal rule of law applicable to a civil action
brought for a vaccine-related injury or death—</text>
<subparagraph id="H73F74FE8FE71497F9BA0634D6D6FBFC1"><enum>(A)</enum><text>this title does
not affect the application of the rule of law to such an action; and</text>
</subparagraph><subparagraph id="H8FC566E1CB434F30BE7218CDF0CB6195"><enum>(B)</enum><text>any rule of law
prescribed by this title in conflict with a rule of law of such title XXI shall
not apply to such action.</text>
</subparagraph></paragraph><paragraph id="HB03B55BB59C2472EACBA6796A98A876A"><enum>(2)</enum><text>If there is an
aspect of a civil action brought for a vaccine-related injury or death to which
a Federal rule of law under title XXI of the <act-name parsable-cite="PHSA">Public Health Service Act</act-name> does not apply, then
this title or otherwise applicable law (as determined under this title) will
apply to such aspect of such action.</text>
</paragraph></subsection><subsection id="HBAF175E3FEEA4450BED3319040544CFA"><enum>(b)</enum><header>Other Federal
Law</header><text>Except as provided in this section, nothing in this title
shall be deemed to affect any defense available to a defendant in a health care
lawsuit or action under any other provision of Federal law.</text>
</subsection></section><section id="H5FF1D0A301814F6DB64AF64CFE822F68"><enum>209.</enum><header>State
flexibility and protection of States’ rights</header>
<subsection id="HF0BA0969F6594651B7B31AADB2EAE003"><enum>(a)</enum><header>Health Care
Lawsuits</header><text>The provisions governing health care lawsuits set forth
in this title preempt, subject to subsections (b) and (c), State law to the
extent that State law prevents the application of any provisions of law
established by or under this title. The provisions governing health care
lawsuits set forth in this title supersede chapter 171 of title 28, United
States Code, to the extent that such chapter—</text>
<paragraph id="H732247E3627E46159AB8FB712A6DE204"><enum>(1)</enum><text>provides for a
greater amount of damages or contingent fees, a longer period in which a health
care lawsuit may be commenced, or a reduced applicability or scope of periodic
payment of future damages, than provided in this title; or</text>
</paragraph><paragraph id="HD5DB64063B7640A486DF5005DE6ACD35"><enum>(2)</enum><text>prohibits the
introduction of evidence regarding collateral source benefits, or mandates or
permits subrogation or a lien on collateral source benefits.</text>
</paragraph></subsection><subsection id="HDE8F8A8B4D244B74AE85CE7273BD6DA5"><enum>(b)</enum><header>Protection of
States’ Rights and Other Laws</header><paragraph commented="no" display-inline="yes-display-inline" id="H908F3DC46128474E815E9B24EFA6B2F4"><enum>(1)</enum><text>Any issue that is not
governed by any provision of law established by or under this title (including
State standards of negligence) shall be governed by otherwise applicable State
or Federal law.</text>
</paragraph><paragraph id="H6ADA975BDDEE42DA9D0302992D3FE9B5" indent="up1"><enum>(2)</enum><text>This title shall not preempt or
supersede any State or Federal law that imposes greater procedural or
substantive protections for health care providers and health care organizations
from liability, loss, or damages than those provided by this title or create a
cause of action.</text>
</paragraph></subsection><subsection id="H69237EAF5CB14D18897CEC9BD245A04E"><enum>(c)</enum><header>State
Flexibility</header><text>No provision of this title shall be construed to
preempt—</text>
<paragraph id="H6F0963BBDEB24F768042A4FF64AF1647"><enum>(1)</enum><text>any State law
(whether effective before, on, or after the date of the enactment of this Act)
that specifies a particular monetary amount of compensatory or punitive damages
(or the total amount of damages) that may be awarded in a health care lawsuit,
regardless of whether such monetary amount is greater or lesser than is
provided for under this title, notwithstanding
<internal-xref idref="H7667A87A65EA427490F56899A136AFB5" legis-path="4.(a)">section 204(a)</internal-xref>; or</text>
</paragraph><paragraph id="H9513CCFEEE0D480099E8CF81495074B0"><enum>(2)</enum><text>any defense
available to a party in a health care lawsuit under any other provision of
State or Federal law.</text>
</paragraph></subsection></section><section id="HFB390D8304824581885103851AFB4C5E"><enum>210.</enum><header>Applicability;
effective date</header><text display-inline="no-display-inline">This title
shall apply to any health care lawsuit brought in a Federal or State court, or
subject to an alternative dispute resolution system, that is initiated on or
after the date of the enactment of this Act, except that any health care
lawsuit arising from an injury occurring prior to the date of the enactment of
this Act shall be governed by the applicable statute of limitations provisions
in effect at the time the injury occurred.</text>
</section><enum>III</enum><header>Allowing People
To Purchase Health Insurance Across State Lines</header>
<section id="H41C5172BFE20407DBA5D64B72A5171F4"><enum>301.</enum><header>Specification
of constitutional authority for enactment of law</header><text display-inline="no-display-inline">This title is enacted pursuant to the power
granted Congress under article I, section 8, clause 3, of the United States
Constitution.</text>
</section><section id="H08A731DC1293424EA182E896A97940F4"><enum>302.</enum><header>Findings</header><text display-inline="no-display-inline">Congress finds the following:</text>
<paragraph id="HD69DAA32361442D09CC8D6FE2FAF3104"><enum>(1)</enum><text>The application of
numerous and significant variations in State law and the implementation of the
Patient Protection and Affordable Care Act impacts the ability of insurers to
offer, and individuals to obtain, affordable individual health insurance
coverage, thereby impeding commerce in individual health insurance
coverage.</text>
</paragraph><paragraph id="H6247A31088D24A9FB1DB5BFA8FC09D60"><enum>(2)</enum><text display-inline="yes-display-inline">Mandates for health care coverage
established by title I of the Patient Protection and Affordable Care Act will
significantly elevate health insurance costs beyond State and Federal ability
to pay.</text>
</paragraph><paragraph id="H5E6CDCD39E22421EBFEC8173D95BA318"><enum>(3)</enum><text>Individual health
insurance coverage is increasingly offered through the Internet, other
electronic means, and by mail, all of which are inherently part of interstate
commerce.</text>
</paragraph><paragraph id="H62ED87E5EE55499E9BCEE8D4364468B0"><enum>(4)</enum><text>In response to
these issues, it is appropriate to encourage increased efficiency in the
offering of individual health insurance coverage through a collaborative
approach by the States in regulating this coverage.</text>
</paragraph><paragraph id="HA80D23F6580E4B5C9050370A60D46AC0"><enum>(5)</enum><text>The establishment
of risk-retention groups has provided a successful model for the sale of
insurance across State lines, as the acts establishing those groups allow
insurance to be sold in multiple States but regulated by a single State.</text>
</paragraph></section><section id="H51591E6D965A403AB0C5919BF46E1C5F"><enum>303.</enum><header>Cooperative
governing of individual health insurance coverage</header>
<subsection id="H1FE0BF3786144B93A8496C071F1E15C5"><enum>(a)</enum><header>In
General</header><text>Title XXVII of the <act-name parsable-cite="PHSA">Public
Health Service Act</act-name> (42 U.S.C. 300gg et seq.) is amended by adding at
the end the following new part:</text>
<quoted-block act-name="Public Health Service Act" id="HD1E58D6396E648B59949DB95D14680EB" style="OLC">
<part id="H7AF8A5C80C5C41999CA5DBC040632FFB"><enum>D</enum><header>Cooperative
Governing of Individual Health Insurance Coverage</header>
<section id="H2954E51E81D94C43B5B1059440132B65"><enum>2795.</enum><header>Definitions</header><text display-inline="no-display-inline">In this part:</text>
<paragraph id="H33DE099F41CC4A08AE4DCC9AD4B6AE32"><enum>(1)</enum><header>Primary
state</header><text>The term <term>primary State</term> means, with respect to
individual health insurance coverage offered by a health insurance issuer, the
State designated by the issuer as the State whose covered laws shall govern the
health insurance issuer in the sale of such coverage under this part. An
issuer, with respect to a particular policy, may only designate one such State
as its primary State with respect to all such coverage it offers. Such an
issuer may not change the designated primary State with respect to individual
health insurance coverage once the policy is issued, except that such a change
may be made upon renewal of the policy. With respect to such designated State,
the issuer is deemed to be doing business in that State.</text>
</paragraph><paragraph id="HBA61BAF8AC964A96B998F1166C12ABFE"><enum>(2)</enum><header>Secondary
state</header><text>The term <term>secondary State</term> means, with respect
to individual health insurance coverage offered by a health insurance issuer,
any State that is not the primary State. In the case of a health insurance
issuer that is selling a policy in, or to a resident of, a secondary State, the
issuer is deemed to be doing business in that secondary State.</text>
</paragraph><paragraph id="H7312E955B24D4F27BF3C14D9BD0A3D71"><enum>(3)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning given such term in section 2791(b)(2), except that such an issuer must
be licensed in the primary State and be qualified to sell individual health
insurance coverage in that State.</text>
</paragraph><paragraph id="H640AD32A27D34E65A880DC8C40048D77"><enum>(4)</enum><header>Individual
health insurance coverage</header><text>The term <term>individual health
insurance coverage</term> means health insurance coverage offered in the
individual market, as defined in section 2791(e)(1).</text>
</paragraph><paragraph id="H30D3BE7171FB44468F4BAC5B633AA903"><enum>(5)</enum><header>Applicable state
authority</header><text>The term <term>applicable State authority</term> means,
with respect to a health insurance issuer in a State, the State insurance
commissioner or official or officials designated by the State to enforce the
requirements of this title for the State with respect to the issuer.</text>
</paragraph><paragraph id="HA0ECAB8958574BCA849C1B6D3D53DA3B"><enum>(6)</enum><header>Hazardous
financial condition</header><text>The term <term>hazardous financial
condition</term> means that, based on its present or reasonably anticipated
financial condition, a health insurance issuer is unlikely to be able—</text>
<subparagraph id="HA95FC4B9811C4A198CAF25CEDDD340A4"><enum>(A)</enum><text>to meet
obligations to policyholders with respect to known claims and reasonably
anticipated claims; or</text>
</subparagraph><subparagraph id="H8D740548E21B436DBDF13EFC2A1939AE"><enum>(B)</enum><text>to pay other
obligations in the normal course of business.</text>
</subparagraph></paragraph><paragraph id="HC5FA7C77A6714A728E2981C90F3A7D3A"><enum>(7)</enum><header>Covered
laws</header>
<subparagraph id="H859FA7692D844E189E9838AEE58C5257"><enum>(A)</enum><header>In
general</header><text>The term <term>covered laws</term> means the laws, rules,
regulations, agreements, and orders governing the insurance business pertaining
to—</text>
<clause id="HFE23DE9CCF81469FB99CAD7C3FB2778D"><enum>(i)</enum><text>individual health
insurance coverage issued by a health insurance issuer;</text>
</clause><clause id="H460FFA1F26C44B74B730CE9F429A45B6"><enum>(ii)</enum><text>the offer, sale,
rating (including medical underwriting), renewal, and issuance of individual
health insurance coverage to an individual;</text>
</clause><clause id="H28FCC46EFCCF4E8DB9982960C8E6721B"><enum>(iii)</enum><text>the provision to
an individual in relation to individual health insurance coverage of health
care and insurance related services;</text>
</clause><clause id="HADA5C859223747B690A58E2514D1A54B"><enum>(iv)</enum><text>the provision to
an individual in relation to individual health insurance coverage of
management, operations, and investment activities of a health insurance issuer;
and</text>
</clause><clause id="H719AF6B369994611998216A718DC6A98"><enum>(v)</enum><text>the provision to
an individual in relation to individual health insurance coverage of loss
control and claims administration for a health insurance issuer with respect to
liability for which the issuer provides insurance.</text>
</clause></subparagraph><subparagraph id="H6F9A2311E878431D9CBC5630BE864928"><enum>(B)</enum><header>Exception</header><text>Such
term does not include any law, rule, regulation, agreement, or order governing
the use of care or cost management techniques, including any requirement
related to provider contracting, network access or adequacy, health care data
collection, or quality assurance.</text>
</subparagraph></paragraph><paragraph id="HAE9F3715C4254E48A437B9039C85BADD"><enum>(8)</enum><header>State</header><text>The
term <term>State</term> means the 50 States and includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the
Northern Mariana Islands.</text>
</paragraph><paragraph id="H12B840A5775247A4AC4044705FEC928A"><enum>(9)</enum><header>Unfair claims
settlement practices</header><text>The term <term>unfair claims settlement
practices</term> means only the following practices:</text>
<subparagraph id="H0A5CF53A6C7646A292B498B0F47E3C75"><enum>(A)</enum><text>Knowingly
misrepresenting to claimants and insured individuals relevant facts or policy
provisions relating to coverage at issue.</text>
</subparagraph><subparagraph id="H6780154F08B24068AF9E0BB84A47EFE2"><enum>(B)</enum><text>Failing to
acknowledge with reasonable promptness pertinent communications with respect to
claims arising under policies.</text>
</subparagraph><subparagraph id="H534B2A6CA03049D1A257CAC9B2EFD81D"><enum>(C)</enum><text>Failing to adopt
and implement reasonable standards for the prompt investigation and settlement
of claims arising under policies.</text>
</subparagraph><subparagraph id="H3D210349EAC74CB8BDF4830783760FE9"><enum>(D)</enum><text>Failing to
effectuate prompt, fair, and equitable settlement of claims submitted in which
liability has become reasonably clear.</text>
</subparagraph><subparagraph id="HE4D6457210424759A1C8DB47425F9456"><enum>(E)</enum><text>Refusing to pay
claims without conducting a reasonable investigation.</text>
</subparagraph><subparagraph id="H97C70BDF6C9041A4BEDAD45314281A86"><enum>(F)</enum><text>Failing to affirm
or deny coverage of claims within a reasonable period of time after having
completed an investigation related to those claims.</text>
</subparagraph><subparagraph id="H1F0C417C387C4B2BAD0B02CCF386D336"><enum>(G)</enum><text>A pattern or
practice of compelling insured individuals or their beneficiaries to institute
suits to recover amounts due under its policies by offering substantially less
than the amounts ultimately recovered in suits brought by them.</text>
</subparagraph><subparagraph id="H4FE7A13D01264CD3B01FA93CF0C17053"><enum>(H)</enum><text>A pattern or
practice of attempting to settle or settling claims for less than the amount
that a reasonable person would believe the insured individual or his or her
beneficiary was entitled by reference to written or printed advertising
material accompanying or made part of an application.</text>
</subparagraph><subparagraph id="H087CD302D03A48FBAE955DE232DC7CC6"><enum>(I)</enum><text>Attempting to
settle or settling claims on the basis of an application that was materially
altered without notice to, or knowledge or consent of, the insured.</text>
</subparagraph><subparagraph id="H8B658A630B554DEAADDCDC3C5F080100"><enum>(J)</enum><text>Failing to provide
forms necessary to present claims within 15 calendar days of a requests with
reasonable explanations regarding their use.</text>
</subparagraph><subparagraph id="HB1963D9E64F44EB086887EE1FD17D7A3"><enum>(K)</enum><text>Attempting to
cancel a policy in less time than that prescribed in the policy or by the law
of the primary State.</text>
</subparagraph></paragraph><paragraph id="H82669D65F2CA49F2ADA7A54B9001B5E8"><enum>(10)</enum><header>Fraud and
abuse</header><text>The term <term>fraud and abuse</term> means an act or
omission committed by a person who, knowingly and with intent to defraud,
commits, or conceals any material information concerning, one or more of the
following:</text>
<subparagraph id="H971D095C39074DBC859B378614FE0426"><enum>(A)</enum><text>Presenting,
causing to be presented or preparing with knowledge or belief that it will be
presented to or by an insurer, a reinsurer, broker or its agent, false
information as part of, in support of or concerning a fact material to one or
more of the following:</text>
<clause id="H5C62ACB44FF845709408763FED05105F"><enum>(i)</enum><text>An
application for the issuance or renewal of an insurance policy or reinsurance
contract.</text>
</clause><clause id="H5DC1F40950C348B2A8DE408B668BDE5D"><enum>(ii)</enum><text>The rating of an
insurance policy or reinsurance contract.</text>
</clause><clause id="H1E3008760FE24E9EBC7DF58F6EFF7C41"><enum>(iii)</enum><text>A claim for
payment or benefit pursuant to an insurance policy or reinsurance
contract.</text>
</clause><clause id="H75FFA163778346BFADAC7AE1BEA03C02"><enum>(iv)</enum><text>Premiums paid on
an insurance policy or reinsurance contract.</text>
</clause><clause id="HD5E711238F95475381891B2B36EAF18E"><enum>(v)</enum><text>Payments made in
accordance with the terms of an insurance policy or reinsurance
contract.</text>
</clause><clause id="HF6404A6C2B8A4130910A18D20C16DD02"><enum>(vi)</enum><text>A
document filed with the commissioner or the chief insurance regulatory official
of another jurisdiction.</text>
</clause><clause id="HA51EDE777FEC409C9A4E4C05BE9F7F7D"><enum>(vii)</enum><text>The financial
condition of an insurer or reinsurer.</text>
</clause><clause id="H658C987EBBF24E6CADB3F11A206FF6C8"><enum>(viii)</enum><text>The formation,
acquisition, merger, reconsolidation, dissolution or withdrawal from one or
more lines of insurance or reinsurance in all or part of a State by an insurer
or reinsurer.</text>
</clause><clause id="HE49BE6BBFFAE436FBDB1235AA792D232"><enum>(ix)</enum><text>The issuance of
written evidence of insurance.</text>
</clause><clause id="H0AED3FB7BAA6442290BB8189846A7929"><enum>(x)</enum><text>The reinstatement
of an insurance policy.</text>
</clause></subparagraph><subparagraph id="H18D9A6D30DB04040A285C0F41273C87C"><enum>(B)</enum><text>Solicitation or
acceptance of new or renewal insurance risks on behalf of an insurer reinsurer
or other person engaged in the business of insurance by a person who knows or
should know that the insurer or other person responsible for the risk is
insolvent at the time of the transaction.</text>
</subparagraph><subparagraph id="HBDEE44CA4A1C4998A6AEFF52F1D7D8D5"><enum>(C)</enum><text>Transaction of the
business of insurance in violation of laws requiring a license, certificate of
authority or other legal authority for the transaction of the business of
insurance.</text>
</subparagraph><subparagraph id="H00E749E49823408FA4481F6A29A67FD9"><enum>(D)</enum><text>Attempt to commit,
aiding or abetting in the commission of, or conspiracy to commit the acts or
omissions specified in this paragraph.</text>
</subparagraph></paragraph></section><section id="HCAEED3192DDC41ABB30596D234819A74"><enum>2796.</enum><header>Application of
law</header>
<subsection id="HEF616157226F4E1D80DC8580731584CA"><enum>(a)</enum><header>In
General</header><text>The covered laws of the primary State shall apply to
individual health insurance coverage offered by a health insurance issuer in
the primary State and in any secondary State, but only if the coverage and
issuer comply with the conditions of this section with respect to the offering
of coverage in any secondary State.</text>
</subsection><subsection id="H1CDE9FFE4BF44032996DC6C5066235AE"><enum>(b)</enum><header>Exemptions From
Covered Laws in a Secondary State</header><text>Except as provided in this
section, a health insurance issuer with respect to its offer, sale, rating
(including medical underwriting), renewal, and issuance of individual health
insurance coverage in any secondary State is exempt from any covered laws of
the secondary State (and any rules, regulations, agreements, or orders sought
or issued by such State under or related to such covered laws) to the extent
that such laws would—</text>
<paragraph id="H68CFBA99F42F44E9B678A244F2AE1263"><enum>(1)</enum><text>make unlawful, or
regulate, directly or indirectly, the operation of the health insurance issuer
operating in the secondary State, except that any secondary State may require
such an issuer—</text>
<subparagraph id="H1822DA26DC114F109672E22ED66F69ED"><enum>(A)</enum><text>to pay, on a
nondiscriminatory basis, applicable premium and other taxes (including high
risk pool assessments) which are levied on insurers and surplus lines insurers,
brokers, or policyholders under the laws of the State;</text>
</subparagraph><subparagraph id="H6BC7E68D2BCB44E2892E978478BC26DA"><enum>(B)</enum><text>to register with
and designate the State insurance commissioner as its agent solely for the
purpose of receiving service of legal documents or process;</text>
</subparagraph><subparagraph id="H5522C9E38C6C4AA2AD90EFA872A1D3F8"><enum>(C)</enum><text>to submit to an
examination of its financial condition by the State insurance commissioner in
any State in which the issuer is doing business to determine the issuer’s
financial condition, if—</text>
<clause id="H379EC6C3EDDC433891D3A579465C2D28"><enum>(i)</enum><text>the State
insurance commissioner of the primary State has not done an examination within
the period recommended by the National Association of Insurance Commissioners;
and</text>
</clause><clause id="H1DF5B504CC91419883396CC6A8D744AB"><enum>(ii)</enum><text>any such
examination is conducted in accordance with the examiners’ handbook of the
National Association of Insurance Commissioners and is coordinated to avoid
unjustified duplication and unjustified repetition;</text>
</clause></subparagraph><subparagraph id="H61C9A136DD684EC4861042DFD2AFA23B"><enum>(D)</enum><text>to comply with a
lawful order issued—</text>
<clause id="H84A38B4AD14C4606A1E98A1B56BA8E28"><enum>(i)</enum><text>in
a delinquency proceeding commenced by the State insurance commissioner if there
has been a finding of financial impairment under subparagraph (C); or</text>
</clause><clause id="H8F65ED8D1BD84F1E850107054E63EE44"><enum>(ii)</enum><text>in a voluntary
dissolution proceeding;</text>
</clause></subparagraph><subparagraph id="HDCE2C727CD2047BC9082C19FE96F1C02"><enum>(E)</enum><text>to comply with an
injunction issued by a court of competent jurisdiction, upon a petition by the
State insurance commissioner alleging that the issuer is in hazardous financial
condition;</text>
</subparagraph><subparagraph id="HA5367685D97241A18FA0AB7FF4157887"><enum>(F)</enum><text>to participate, on
a nondiscriminatory basis, in any insurance insolvency guaranty association or
similar association to which a health insurance issuer in the State is required
to belong;</text>
</subparagraph><subparagraph id="H8D2C9FF7A43449BCB8123C339E312210"><enum>(G)</enum><text>to comply with any
State law regarding fraud and abuse (as defined in section 2795(10)), except
that if the State seeks an injunction regarding the conduct described in this
subparagraph, such injunction must be obtained from a court of competent
jurisdiction;</text>
</subparagraph><subparagraph id="HA6495F6D880C45DF94A00762E5E4634E"><enum>(H)</enum><text>to comply with any
State law regarding unfair claims settlement practices (as defined in section
2795(9)); or</text>
</subparagraph><subparagraph id="H03804733F0A74408970E233434C0EADB"><enum>(I)</enum><text>to comply with the
applicable requirements for independent review under section 2798 with respect
to coverage offered in the State;</text>
</subparagraph></paragraph><paragraph id="HCAC4F03B036047D8A3607796D3EA0AB6"><enum>(2)</enum><text>require any
individual health insurance coverage issued by the issuer to be countersigned
by an insurance agent or broker residing in that Secondary State; or</text>
</paragraph><paragraph id="H0029626490264B78975450020DF8FFDA"><enum>(3)</enum><text>otherwise
discriminate against the issuer issuing insurance in both the primary State and
in any secondary State.</text>
</paragraph></subsection><subsection id="H996AD2154ACE430996C6A97956B8984B"><enum>(c)</enum><header>Clear and
Conspicuous Disclosure</header><text>A health insurance issuer shall provide
the following notice, in 12-point bold type, in any insurance coverage offered
in a secondary State under this part by such a health insurance issuer and at
renewal of the policy, with the 5 blank spaces therein being appropriately
filled with the name of the health insurance issuer, the name of primary State,
the name of the secondary State, the name of the secondary State, and the name
of the secondary State, respectively, for the coverage concerned:</text>
<quoted-block display-inline="no-display-inline" id="H34C64E847CDA4FEA98F6FE79CAE5B59E" style="OLC">
<appropriations-intermediate id="H1F92114464A54A35BFBEFA2FEB672729"><header>Notice</header><text display-inline="no-display-inline">This policy is issued by _____ and is
governed by the laws and regulations of the State of _____, and it has met all
the laws of that State as determined by that State’s Department of Insurance.
This policy may be less expensive than others because it is not subject to all
of the insurance laws and regulations of the State of _____, including coverage
of some services or benefits mandated by the law of the State of _____.
Additionally, this policy is not subject to all of the consumer protection laws
or restrictions on rate changes of the State of _____. As with all insurance
products, before purchasing this policy, you should carefully review the policy
and determine what health care services the policy covers and what benefits it
provides, including any exclusions, limitations, or conditions for such
services or
benefits.</text>
</appropriations-intermediate><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF6BBC7F3C2854A6F9D772B06F59EC1B1"><enum>(d)</enum><header>Prohibition on
Certain Reclassifications and Premium Increases</header>
<paragraph id="H00FC387388A14CC6832D50C0FCACE6FA"><enum>(1)</enum><header>In
general</header><text>For purposes of this section, a health insurance issuer
that provides individual health insurance coverage to an individual under this
part in a primary or secondary State may not upon renewal—</text>
<subparagraph id="H99BF55190D7342B598B9A030D1237EFB"><enum>(A)</enum><text>move or reclassify
the individual insured under the health insurance coverage from the class such
individual is in at the time of issue of the contract based on the
health-status related factors of the individual; or</text>
</subparagraph><subparagraph id="H39B956D0A7F04B699563653C3B4A04E4"><enum>(B)</enum><text>increase the
premiums assessed the individual for such coverage based on a health
status-related factor or change of a health status-related factor or the past
or prospective claim experience of the insured individual.</text>
</subparagraph></paragraph><paragraph id="HFEDE919A47A1473986C694E927840521"><enum>(2)</enum><header>Construction</header><text>Nothing
in paragraph (1) shall be construed to prohibit a health insurance
issuer—</text>
<subparagraph id="H358DEB53C22145E69E16EC7678C8E196"><enum>(A)</enum><text>from terminating
or discontinuing coverage or a class of coverage in accordance with subsections
(b) and (c) of section 2742;</text>
</subparagraph><subparagraph id="HE115F1413C524A4A88D59D2680E67D30"><enum>(B)</enum><text>from raising
premium rates for all policy holders within a class based on claims
experience;</text>
</subparagraph><subparagraph id="H4FD017B22C454C0C91053942FACE4E61"><enum>(C)</enum><text>from changing
premiums or offering discounted premiums to individuals who engage in wellness
activities at intervals prescribed by the issuer, if such premium changes or
incentives—</text>
<clause id="HE1B7E60D40FF49D78B62DC3061F5FF6C"><enum>(i)</enum><text>are disclosed to
the consumer in the insurance contract;</text>
</clause><clause id="H8BCC2B5F2FE34EB5A2D6DC61C314C194"><enum>(ii)</enum><text>are based on
specific wellness activities that are not applicable to all individuals;
and</text>
</clause><clause id="H93FE057654A94BE5B12F8E07960518D2"><enum>(iii)</enum><text>are not
obtainable by all individuals to whom coverage is offered;</text>
</clause></subparagraph><subparagraph id="H9C3E0392AA224F0E93EBB5AFCF02EA66"><enum>(D)</enum><text>from reinstating
lapsed coverage; or</text>
</subparagraph><subparagraph id="H67CE7340F25D4B0E97CAAB0589580D5C"><enum>(E)</enum><text>from retroactively
adjusting the rates charged an insured individual if the initial rates were set
based on material misrepresentation by the individual at the time of
issue.</text>
</subparagraph></paragraph></subsection><subsection id="H01948F55D3E34D21B15AD5BF162EE235"><enum>(e)</enum><header>Prior Offering
of Policy in Primary State</header><text>A health insurance issuer may not
offer for sale individual health insurance coverage in a secondary State unless
that coverage is currently offered for sale in the primary State.</text>
</subsection><subsection id="H792C27EBA228403B9EED9AE3FAF0895D"><enum>(f)</enum><header>Licensing of
Agents or Brokers for Health Insurance Issuers</header><text>Any State may
require that a person acting, or offering to act, as an agent or broker for a
health insurance issuer with respect to the offering of individual health
insurance coverage obtain a license from that State, with commissions or other
compensation subject to the provisions of the laws of that State, except that a
State may not impose any qualification or requirement which discriminates
against a nonresident agent or broker.</text>
</subsection><subsection id="HD85FE622DCF64C0F8F97672F40C9BEE6"><enum>(g)</enum><header>Documents for
Submission to State Insurance Commissioner</header><text>Each health insurance
issuer issuing individual health insurance coverage in both primary and
secondary States shall submit—</text>
<paragraph id="HE4F4DC2A84EC4573BCB1A7660EAC1C9F"><enum>(1)</enum><text>to the insurance
commissioner of each State in which it intends to offer such coverage, before
it may offer individual health insurance coverage in such State—</text>
<subparagraph id="HC085BC0563794434B71E1734F3509604"><enum>(A)</enum><text>a copy of the plan
of operation or feasibility study or any similar statement of the policy being
offered and its coverage (which shall include the name of its primary State and
its principal place of business);</text>
</subparagraph><subparagraph id="H30E95F6C2A18431BB07B01A785ADDD69"><enum>(B)</enum><text>written notice of
any change in its designation of its primary State; and</text>
</subparagraph><subparagraph id="HE619F74AF72244958290F43A2358B734"><enum>(C)</enum><text>written notice
from the issuer of the issuer’s compliance with all the laws of the primary
State; and</text>
</subparagraph></paragraph><paragraph id="H08DEC6A5D2F24BA88609513A7049D38D"><enum>(2)</enum><text>to the insurance
commissioner of each secondary State in which it offers individual health
insurance coverage, a copy of the issuer’s quarterly financial statement
submitted to the primary State, which statement shall be certified by an
independent public accountant and contain a statement of opinion on loss and
loss adjustment expense reserves made by—</text>
<subparagraph id="HAC66113AC0AC4BFB847A54B29DA5268A"><enum>(A)</enum><text>a member of the
American Academy of Actuaries; or</text>
</subparagraph><subparagraph id="H1DB341AB97364F83BD6E9F2A38055025"><enum>(B)</enum><text>a qualified loss
reserve specialist.</text>
</subparagraph></paragraph></subsection><subsection id="H85D7880F0CCD4973ADE5F5209FD582C6"><enum>(h)</enum><header>Power of Courts
To Enjoin Conduct</header><text>Nothing in this section shall be construed to
affect the authority of any Federal or State court to enjoin—</text>
<paragraph id="HC67BDFC3593F408490CFCC6034DD298C"><enum>(1)</enum><text>the solicitation
or sale of individual health insurance coverage by a health insurance issuer to
any person or group who is not eligible for such insurance; or</text>
</paragraph><paragraph id="H2F96C011E5F541E4817A6FD81B62F5D1"><enum>(2)</enum><text>the solicitation
or sale of individual health insurance coverage that violates the requirements
of the law of a secondary State which are described in subparagraphs (A)
through (H) of section 2796(b)(1).</text>
</paragraph></subsection><subsection id="H9AAD29F42ECB422EB1D0ADEACCA99BEF"><enum>(i)</enum><header>Power of
Secondary States To Take Administrative Action</header><text>Nothing in this
section shall be construed to affect the authority of any State to enjoin
conduct in violation of that State’s laws described in section
2796(b)(1).</text>
</subsection><subsection id="HD1C240B40B4F450CB0A81985BEC0CA49"><enum>(j)</enum><header>State Powers To
Enforce State Laws</header>
<paragraph id="H4E64E4B98F51496D9D8B59D475033367"><enum>(1)</enum><header>In
general</header><text>Subject to the provisions of subsection (b)(1)(G)
(relating to injunctions) and paragraph (2), nothing in this section shall be
construed to affect the authority of any State to make use of any of its powers
to enforce the laws of such State with respect to which a health insurance
issuer is not exempt under subsection (b).</text>
</paragraph><paragraph id="H51E52A5EC1B2438F84FCCB508AEAFACA"><enum>(2)</enum><header>Courts of
competent jurisdiction</header><text>If a State seeks an injunction regarding
the conduct described in paragraphs (1) and (2) of subsection (h), such
injunction must be obtained from a Federal or State court of competent
jurisdiction.</text>
</paragraph></subsection><subsection id="H0F84A1D4AC9149C6918D4F81E9A80E01"><enum>(k)</enum><header>States’
Authority To Sue</header><text>Nothing in this section shall affect the
authority of any State to bring action in any Federal or State court.</text>
</subsection><subsection id="H348650A6800A441B9EC4F4B3A33F48B7"><enum>(l)</enum><header>Generally
Applicable Laws</header><text>Nothing in this section shall be construed to
affect the applicability of State laws generally applicable to persons or
corporations.</text>
</subsection><subsection id="H9CD07D716330448DBBE874782D4F2734"><enum>(m)</enum><header>Guaranteed
Availability of Coverage to HIPAA Eligible Individuals</header><text>To the
extent that a health insurance issuer is offering coverage in a primary State
that does not accommodate residents of secondary States or does not provide a
working mechanism for residents of a secondary State, and the issuer is
offering coverage under this part in such secondary State which has not adopted
a qualified high risk pool as its acceptable alternative mechanism (as defined
in section 2744(c)(2)), the issuer shall, with respect to any individual health
insurance coverage offered in a secondary State under this part, comply with
the guaranteed availability requirements for eligible individuals in section
2741.</text>
</subsection></section><section id="HDC2AA27A3830417E80F23EB7DA348084"><enum>2797.</enum><header>Primary State
must meet Federal floor before issuer may sell into secondary
States</header><text display-inline="no-display-inline">A health insurance
issuer may not offer, sell, or issue individual health insurance coverage in a
secondary State if the State insurance commissioner does not use a risk-based
capital formula for the determination of capital and surplus requirements for
all health insurance issuers.</text>
</section><section id="H7AFD1ECECDC049DDA6BFE9A70AEED79F"><enum>2798.</enum><header>Independent
external appeals procedures</header>
<subsection id="HA9C89B5ED0F447A1BDE28DEBF1F7B227"><enum>(a)</enum><header>Right to
External Appeal</header><text>A health insurance issuer may not offer, sell, or
issue individual health insurance coverage in a secondary State under the
provisions of this title unless—</text>
<paragraph id="H9E7B9029814542B1A4721E21EA0B1B0A"><enum>(1)</enum><text>both the secondary
State and the primary State have legislation or regulations in place
establishing an independent review process for individuals who are covered by
individual health insurance coverage, or</text>
</paragraph><paragraph id="H5D7B2CF08EE049588B8A59E22F2CF272"><enum>(2)</enum><text>in any case in
which the requirements of subparagraph (A) are not met with respect to the
either of such States, the issuer provides an independent review mechanism
substantially identical (as determined by the applicable State authority of
such State) to that prescribed in the <quote>Health Carrier External Review
Model Act</quote> of the National Association of Insurance Commissioners for
all individuals who purchase insurance coverage under the terms of this part,
except that, under such mechanism, the review is conducted by an independent
medical reviewer, or a panel of such reviewers, with respect to whom the
requirements of subsection (b) are met.</text>
</paragraph></subsection><subsection id="HD6F4EEDFF90A40DF9739FE3C0EEAE533"><enum>(b)</enum><header>Qualifications
of Independent Medical Reviewers</header><text>In the case of any independent
review mechanism referred to in subsection (a)(2)—</text>
<paragraph id="H212FE32DD15F420B89F86887DF990427"><enum>(1)</enum><header>In
general</header><text>In referring a denial of a claim to an independent
medical reviewer, or to any panel of such reviewers, to conduct independent
medical review, the issuer shall ensure that—</text>
<subparagraph id="HF00158C2B7D8457E863295D6C0916FFE"><enum>(A)</enum><text>each independent
medical reviewer meets the qualifications described in paragraphs (2) and
(3);</text>
</subparagraph><subparagraph id="H26C81B6D0D394187A4DC3A73F397A2C6"><enum>(B)</enum><text>with respect to
each review, each reviewer meets the requirements of paragraph (4) and the
reviewer, or at least 1 reviewer on the panel, meets the requirements described
in paragraph (5); and</text>
</subparagraph><subparagraph id="H6EE1B5305A2F4A279D185D102AEA5468"><enum>(C)</enum><text>compensation
provided by the issuer to each reviewer is consistent with paragraph
(6).</text>
</subparagraph></paragraph><paragraph id="H4D1BC342112E4B81A184960781A599C9"><enum>(2)</enum><header>Licensure and
expertise</header><text>Each independent medical reviewer shall be a physician
(allopathic or osteopathic) or health care professional who—</text>
<subparagraph id="HA32218C415294CF3AA2BF57669E29520"><enum>(A)</enum><text>is appropriately
credentialed or licensed in 1 or more States to deliver health care services;
and</text>
</subparagraph><subparagraph id="H17F4DA00CF184E3BA9127F661334B80B"><enum>(B)</enum><text>typically treats
the condition, makes the diagnosis, or provides the type of treatment under
review.</text>
</subparagraph></paragraph><paragraph id="HB1E773CAEAAE43D6A615D34FFCCD5C9A"><enum>(3)</enum><header>Independence</header>
<subparagraph id="H094BA071856A469293BF8239BFEE7710"><enum>(A)</enum><header>In
general</header><text>Subject to subparagraph (B), each independent medical
reviewer in a case shall—</text>
<clause id="HB9A135C5B78D4597BE4A58BD297CE4E4"><enum>(i)</enum><text>not be a related
party (as defined in paragraph (7));</text>
</clause><clause id="HBF3CA35C11974A2B96D3AECDC24FCB55"><enum>(ii)</enum><text>not have a
material familial, financial, or professional relationship with such a party;
and</text>
</clause><clause id="H3F7BE55D23324919A22CB462349CBB9D"><enum>(iii)</enum><text>not otherwise
have a conflict of interest with such a party (as determined under
regulations).</text>
</clause></subparagraph><subparagraph id="H72725E9185544D74A019BC2E1312010D"><enum>(B)</enum><header>Exception</header><text>Nothing
in subparagraph (A) shall be construed to—</text>
<clause id="H15A5A7699A6245CDBFBA312A9DE73E95"><enum>(i)</enum><text>prohibit an
individual, solely on the basis of affiliation with the issuer, from serving as
an independent medical reviewer if—</text>
<subclause id="H28B7D4C62ED540DBA6B16FF618706E42"><enum>(I)</enum><text>a non-affiliated
individual is not reasonably available;</text>
</subclause><subclause id="H51192DB0E8F94227ADF491BC1761B0B8"><enum>(II)</enum><text>the affiliated
individual is not involved in the provision of items or services in the case
under review;</text>
</subclause><subclause id="H9E8EC5837D4B4715AF40AEBF08822AA9"><enum>(III)</enum><text>the fact of such
an affiliation is disclosed to the issuer and the enrollee (or authorized
representative) and neither party objects; and</text>
</subclause><subclause id="H8DBA8C1F97CC4EB281C92248D52B9D66"><enum>(IV)</enum><text>the affiliated
individual is not an employee of the issuer and does not provide services
exclusively or primarily to or on behalf of the issuer;</text>
</subclause></clause><clause id="HD2B7AC3BF8B444889EB37EA6812F9E21"><enum>(ii)</enum><text>prohibit an
individual who has staff privileges at the institution where the treatment
involved takes place from serving as an independent medical reviewer merely on
the basis of such affiliation if the affiliation is disclosed to the issuer and
the enrollee (or authorized representative), and neither party objects;
or</text>
</clause><clause id="HE1300570B72B4C359B6EC54827744DF6"><enum>(iii)</enum><text>prohibit receipt
of compensation by an independent medical reviewer from an entity if the
compensation is provided consistent with paragraph (6).</text>
</clause></subparagraph></paragraph><paragraph id="H1A980E278560404EAD29A84021157143"><enum>(4)</enum><header>Practicing
health care professional in same field</header>
<subparagraph id="H5EB6FF16D69A4527BFA808269BF327F3"><enum>(A)</enum><header>In
general</header><text>In a case involving treatment, or the provision of items
or services—</text>
<clause id="HC3D9E3BD17A245B3B1E9D60E31E6A5E3"><enum>(i)</enum><text>by
a physician, a reviewer shall be a practicing physician (allopathic or
osteopathic) of the same or similar specialty, as a physician who, acting
within the appropriate scope of practice within the State in which the service
is provided or rendered, typically treats the condition, makes the diagnosis,
or provides the type of treatment under review; or</text>
</clause><clause id="HF45CB195217D4994A15CFF36C83CD8B4"><enum>(ii)</enum><text>by a
non-physician health care professional, the reviewer, or at least 1 member of
the review panel, shall be a practicing non-physician health care professional
of the same or similar specialty as the non-physician health care professional
who, acting within the appropriate scope of practice within the State in which
the service is provided or rendered, typically treats the condition, makes the
diagnosis, or provides the type of treatment under review.</text>
</clause></subparagraph><subparagraph id="HC48889172024432B885227838881FB10"><enum>(B)</enum><header>Practicing
defined</header><text>For purposes of this paragraph, the term
<term>practicing</term> means, with respect to an individual who is a physician
or other health care professional, that the individual provides health care
services to individual patients on average at least 2 days per week.</text>
</subparagraph></paragraph><paragraph id="H43EC3FE6D66E46DD872C53984A1683E0"><enum>(5)</enum><header>Pediatric
expertise</header><text>In the case of an external review relating to a child,
a reviewer shall have expertise under paragraph (2) in pediatrics.</text>
</paragraph><paragraph id="HB43068B68D1D42D4943A44DBC00E48EE"><enum>(6)</enum><header>Limitations on
reviewer compensation</header><text>Compensation provided by the issuer to an
independent medical reviewer in connection with a review under this section
shall—</text>
<subparagraph id="H25754CC1E9F944978F9AB4DCD6EB78A1"><enum>(A)</enum><text>not exceed a
reasonable level; and</text>
</subparagraph><subparagraph id="H3AEDC6E50422438A8F17A191C25D7DD6"><enum>(B)</enum><text>not be contingent
on the decision rendered by the reviewer.</text>
</subparagraph></paragraph><paragraph id="HA8C3A0DE51494020A174832FEDA3C0FB"><enum>(7)</enum><header>Related party
defined</header><text>For purposes of this section, the term <term>related
party</term> means, with respect to a denial of a claim under a coverage
relating to an enrollee, any of the following:</text>
<subparagraph id="HA90A5CDA400D4AF1A1F5B0215E6EDBE7"><enum>(A)</enum><text>The issuer
involved, or any fiduciary, officer, director, or employee of the
issuer.</text>
</subparagraph><subparagraph id="H44198142B0794C179B1E93A37ED91590"><enum>(B)</enum><text>The enrollee (or
authorized representative).</text>
</subparagraph><subparagraph id="H9EEFE3EF7928458DA15599B018AB9AE0"><enum>(C)</enum><text>The health care
professional that provides the items or services involved in the denial.</text>
</subparagraph><subparagraph id="HC56198D4BB4E4C4684D9BF1E2BA72933"><enum>(D)</enum><text>The institution at
which the items or services (or treatment) involved in the denial are
provided.</text>
</subparagraph><subparagraph id="H6400ED2CE1384C029942F77C808C4FB2"><enum>(E)</enum><text>The manufacturer
of any drug or other item that is included in the items or services involved in
the denial.</text>
</subparagraph><subparagraph id="H9F6FD587FC984AE180F950C18342868C"><enum>(F)</enum><text>Any other party
determined under any regulations to have a substantial interest in the denial
involved.</text>
</subparagraph></paragraph><paragraph id="HA82D25271A184B9291BD8B094D4B8055"><enum>(8)</enum><header>Definitions</header><text>For
purposes of this subsection:</text>
<subparagraph id="H2B6E1DCAFB044459BC0E7F851E6B5E0A"><enum>(A)</enum><header>Enrollee</header><text>The
term <term>enrollee</term> means, with respect to health insurance coverage
offered by a health insurance issuer, an individual enrolled with the issuer to
receive such coverage.</text>
</subparagraph><subparagraph id="H34F63ED695BD45C7A8E26051DBD4F858"><enum>(B)</enum><header>Health care
professional</header><text>The term <term>health care professional</term> means
an individual who is licensed, accredited, or certified under State law to
provide specified health care services and who is operating within the scope of
such licensure, accreditation, or certification.</text>
</subparagraph></paragraph></subsection></section><section id="HF9894DD57275478CBC32446A7D189878"><enum>2799.</enum><header>Enforcement</header>
<subsection id="H9757A43675BF499396EA8114373A4C5B"><enum>(a)</enum><header>In
General</header><text>Subject to subsection (b), with respect to specific
individual health insurance coverage the primary State for such coverage has
sole jurisdiction to enforce the primary State’s covered laws in the primary
State and any secondary State.</text>
</subsection><subsection id="HFE4C0CEBC53F47D4BABFA2877EED1720"><enum>(b)</enum><header>Secondary
State’s Authority</header><text>Nothing in subsection (a) shall be construed to
affect the authority of a secondary State to enforce its laws as set forth in
the exception specified in section 2796(b)(1).</text>
</subsection><subsection id="H782859166C084D16A53C33756AF39263"><enum>(c)</enum><header>Court
Interpretation</header><text>In reviewing action initiated by the applicable
secondary State authority, the court of competent jurisdiction shall apply the
covered laws of the primary State.</text>
</subsection><subsection id="H4BD2483A98824B4D87B2BED7E283F031"><enum>(d)</enum><header>Notice of
Compliance Failure</header><text>In the case of individual health insurance
coverage offered in a secondary State that fails to comply with the covered
laws of the primary State, the applicable State authority of the secondary
State may notify the applicable State authority of the primary
State.</text>
</subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H14DE4EEA9D414EE5BA4C925FE24F3E02"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by subsection (a) shall apply to
individual health insurance coverage offered, issued, or sold after the date
that is one year after the date of the enactment of this Act.</text>
</subsection><subsection id="H2F35452CEFDE4F558631F56821A82645"><enum>(c)</enum><header>GAO Ongoing
Study and Reports</header>
<paragraph id="H945164A605CF41248EE6712B91A3BEB7"><enum>(1)</enum><header>Study</header><text>The
Comptroller General of the United States shall conduct an ongoing study
concerning the effect of the amendment made by subsection (a) on—</text>
<subparagraph id="H294ACA4A5FA44A388247C998EF04B7F8"><enum>(A)</enum><text>the number of
uninsured and under-insured;</text>
</subparagraph><subparagraph id="HA3E9F789AB264655BC37BD8BD67700E5"><enum>(B)</enum><text>the availability
and cost of health insurance policies for individuals with pre-existing medical
conditions;</text>
</subparagraph><subparagraph id="H0157084C12D84567B4FC337E2D1789B4"><enum>(C)</enum><text>the availability
and cost of health insurance policies generally;</text>
</subparagraph><subparagraph id="H4195569CCBFD40DC9C24B1F1EFFB4A6B"><enum>(D)</enum><text>the elimination or
reduction of different types of benefits under health insurance policies
offered in different States; and</text>
</subparagraph><subparagraph id="HB0488DA72944499C9FD1D67BC1DC3A6B"><enum>(E)</enum><text>cases of fraud or
abuse relating to health insurance coverage offered under such amendment and
the resolution of such cases.</text>
</subparagraph></paragraph><paragraph id="HA40FCBF89BF44C17908503E9D83E8B74"><enum>(2)</enum><header>Annual
reports</header><text>The Comptroller General shall submit to Congress an
annual report, after the end of each of the 5 years following the effective
date of the amendment made by subsection (a), on the ongoing study conducted
under paragraph (1).</text>
</paragraph></subsection></section><section id="HE398D163A06549FD98472AF0CA7A9341"><enum>304.</enum><header>Severability</header><text display-inline="no-display-inline">If any provision of this title or the
application of such provision to any person or circumstance is held to be
unconstitutional, the remainder of this title and the application of the
provisions of such to any other person or circumstance shall not be
affected.</text>
</section><enum>IV</enum><header>Increasing
Transparency and Competition in Healthcare</header>
<section id="H8737ADD0A1124BC89C9014812A513E30"><enum>401.</enum><header>Access to
Medicare data to improve transparency</header><text display-inline="no-display-inline">Section 1874(e) of the Social Security Act
(42 U.S.C. 1395kk(e)), as added by section 10332 of Public Law 111–148, is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HC57D8EEF4F8948148B7F0E25523ACE18" style="OLC">
<subsection id="H98AA59C1A26843BFA82931BDA3802DA3"><enum>(e)</enum><header>Availability of
Medicare data</header>
<paragraph id="HF67F61B136444368954C8779CA825804"><enum>(1)</enum><header>In
general</header><text>The Secretary shall make available to qualified entities
(as defined in paragraph (2)) data described in paragraph (3) for the purpose
of analyzing cost and quality data and improving transparency in the
marketplace.</text>
</paragraph><paragraph id="HB4E645E3E1AD40B6BB4D33B28EEF0DE4"><enum>(2)</enum><header>Qualified
entities</header><text>For purposes of this subsection, the term
<term>qualified entity</term> means either of the following:</text>
<subparagraph id="H869A0FAC483240558E8AA0BA9E5A79F0"><enum>(A)</enum><header>Designated State
all-payer claims database</header><text>A State all-payer claims database
that—</text>
<clause id="HE989F9B43DCF4E0D9DD02A71E175D38A"><enum>(i)</enum><text>collects and
combines claims information from public and private payers and makes such data
available to subscribers; and</text>
</clause><clause id="H76AA9F3DFFF84DD1BE25AD64A55872FF"><enum>(ii)</enum><text>has been
designated (in a manner recognized by the Secretary) as meeting requirements
for receipt of data under this subsection.</text>
</clause><continuation-text continuation-text-level="subparagraph">A State
all-payer claims database that is in operation as of December 1, 2011, and that
is participating as of such date in a national federation of government,
private, non-profit, and academic organizations focused on improving the
development and deployment of State-based all payer claims databases shall be
treated (for the period ending 1 year after the date of establishment of
designation criteria under clause (ii) as meeting the requirement of such
clause.</continuation-text></subparagraph><subparagraph id="H99FDA13DB5AB4FA79985FE8F6AF434DE"><enum>(B)</enum><header>Other qualified
entity</header><text display-inline="yes-display-inline">A public or private
entity that—</text>
<clause id="H3A40CAA149D149209D024070EF4161E6"><enum>(i)</enum><text>is
qualified (as determined by the Secretary) to use claims data to evaluate the
performance of providers of services and suppliers on measures of quality,
efficiency, effectiveness, and resource use; and</text>
</clause><clause id="H41BA3A38277B43818F8934391560C3E1"><enum>(ii)</enum><text>agrees to meet
the other requirements described in paragraph (4) and meets such other
requirements as the Secretary may specify, such as ensuring security of
data.</text>
</clause></subparagraph></paragraph><paragraph id="H165534AFCC01406C85B8F211D7728C77"><enum>(3)</enum><header>Data
described</header>
<subparagraph id="H36FD47A395E142868BAFF5C74BF9A937"><enum>(A)</enum><header>In
general</header><text>The data described in this paragraph are standardized
extracts of claims data under parts A, B and D for items and services furnished
under such parts for one or more geographic areas and time periods requested by
a qualified entity. The Secretary shall take such actions as the Secretary
deems necessary to protect the identity of individuals entitled to or enrolled
for benefits under such parts.</text>
</subparagraph><subparagraph id="H9A6A904627EB416C93E200AE27AAEE7B"><enum>(B)</enum><header>Standardized
extracts</header><text>The standardized extracts described in this paragraph
shall be provided in a format that is agreed upon by an outside entity
specified by the Secretary with experience gathering and analyzing claims data
from payers and with a sufficient number of participants from State all-payer
claims databases.</text>
</subparagraph><subparagraph id="H9008570F11D84BC292B6A510C59E940E"><enum>(C)</enum><header>Geographic
areas</header><text>Geographic areas under subparagraph (A) may include
individual States, groups of States, or nationwide, if sufficient claims from
other public and private payers are produced for such areas.</text>
</subparagraph></paragraph><paragraph id="H0042C75770DB43EDB7178DC58B806D88"><enum>(4)</enum><header>Requirements</header>
<subparagraph id="HBA910F254B8E474096D5B6CDC0EB7F99"><enum>(A)</enum><header>Specification of
uses and methodologies</header>
<clause id="H1442E314099B4D35AD5F8ACCE772C2C2"><enum>(i)</enum><header>In
general</header><text>A qualified entity requesting data under this subsection
shall—</text>
<subclause id="HAF707D79FEA84EC58A9430233D3ECD05"><enum>(I)</enum><text>enter a data use
agreement, developed by the Secretary specifically for the purposes of this
subsection, governing applicable uses and disclosures of data and that aligns
all activities of qualified entities under this subsection;</text>
</subclause><subclause id="H2ACB83B93B0C4D3CBCDE9BE5B51ACBC8"><enum>(II)</enum><text>submit to the
Secretary a description of the type of activities for which such qualified
entity will use such data, which may include population health management,
disease tracking, provider quality improvement, and improving value in the
health system;</text>
</subclause><subclause id="H24FA0BAE7EF3422080620EDD074CCF0F"><enum>(III)</enum><text>commit to use,
if available, nationally approved or endorsed measures to compare provider and
supplier performance or, if not available, a transparent process as to the
measures for such comparison;</text>
</subclause><subclause id="H9AB2614E154F4241878E61BD9CB6B98D"><enum>(IV)</enum><text>include data made
available under this subsection, with sufficient claims data from other
sources, in the evaluation and comparison of provider and supplier performance;
and</text>
</subclause><subclause id="HB730D85F37CE4103AA15A1047993BF0C"><enum>(V)</enum><text>make reports
available to health care consumers consistent with paragraph (5)(E).</text>
</subclause></clause><clause id="H17BF94759CC6447989158F9C44F7F642"><enum>(ii)</enum><header>Availability of
data</header><text>A qualified entity requesting data under this subsection may
make such data available to providers of services and suppliers, including in
the format of a report for such a provider or supplier developed from a search
of a State all-payer claims database. The entity may charge such providers and
suppliers a reasonable fee for making such data available.</text>
</clause></subparagraph><subparagraph id="HC669F7DFA80541618A79B789197AE20F"><enum>(B)</enum><header>Fee</header><text>Data
described in paragraph (3) shall be made available to a qualified entity under
this subsection at a fee equal to the cost of making such data available. Such
fee shall be pro-rated across the entire agreement period between the qualified
entity and the Secretary . Any fee collected pursuant to this subparagraph
shall be deposited into the Federal Supplementary Medical Insurance Trust Fund
under section 1841.</text>
</subparagraph><subparagraph id="H58B7B580F9D94849AB3E93D593158B9D"><enum>(C)</enum><header>Limitation of
uses</header><text>Data released to a qualified entity under this subsection
shall not be subject to discovery or admission as evidence in judicial or
administrative proceedings without consent of the applicable provider of
services or supplier.</text>
</subparagraph></paragraph><paragraph id="H58C354EA57624CDFB583ECBA1F4A4A89"><enum>(5)</enum><header>Study and report
by the Institute of Medicine</header>
<subparagraph id="H9A5703EE044A46C7A02F1A367C122EAD"><enum>(A)</enum><header>In
general</header><text>The Secretary may enter into an agreement with the
Institute of Medicine of the National Academies to conduct a study as to which
service data under parts A and B would be most valuable and actionable for
consumers in assessing the performance of providers of services and
suppliers.</text>
</subparagraph><subparagraph id="HF99D2BCE319D4C189E782CDFA5C25FA7"><enum>(B)</enum><header>Report</header><text>An
agreement entered into under subparagraph (A) shall provide for the Institute
of Medicine to submit to the Secretary and to Congress a report containing the
results of the study and recommendations for providing such information to
consumers within one year after the date of the enactment of this
paragraph.</text>
</subparagraph><subparagraph id="HC9541C07A9724F4E8ECD3D3BB6E226C7"><enum>(C)</enum><header>Role of
qualified entities in developing reports for consumers</header><text>Before
making such recommendations, qualified entities shall have an opportunity to
provide input to the Institute of Medicine as to the type of information that
should be conveyed to consumers.</text>
</subparagraph><subparagraph id="HC7ECA85C22914B8C82236D66CB66954F"><enum>(D)</enum><header>Development and
implementation of reports for consumers</header><text>Based on the report under
subparagraph (B) and input from qualified entities, the Secretary shall develop
requirements for reports made available to consumers under this subsection with
the goal of increasing health care transparency.</text>
</subparagraph><subparagraph id="H3578003A3BF641D5817827A12EE136DF"><enum>(E)</enum><header>Reports to
consumers</header><text>Reports consistent with such requirements shall be made
available to consumers within one year of the completion of such
report.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>V</enum><header>Expanding the
Effectiveness of Health Savings Accounts</header>
<section id="HC1816C6E4AC84558A3C4F96A2CC38594" section-type="subsequent-section"><enum>501.</enum><header>Amendment of 1986
Code</header><text display-inline="no-display-inline">Except as otherwise
expressly provided, whenever in this title an amendment or repeal is expressed
in terms of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.</text>
</section><subtitle id="HF9A0530A582B4D8E91363C7D5DC7EA94"><enum>A</enum><header>Provisions
relating to tax-Preferred health accounts</header>
<section id="HD3AC22FE806E47A098ED0571E681F276"><enum>511.</enum><header>Allow both
spouses to make catch-up contributions to the same HSA account</header>
<subsection id="HE1114633E0CD490CB480E9F6ED9D3365"><enum>(a)</enum><header>In
general</header><text>Paragraph (3) of section 223(b) is amended by adding at
the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HA40740C674AC470E85DBF2DACA52CDD5" style="OLC">
<subparagraph id="HFC34609C5BFD45ADA3C934EA8BCD4DC0"><enum>(C)</enum><header>Special rule
where both spouses are eligible individuals with 1
account</header><text>If—</text>
<clause id="H1FBFB29D4AD94708AFCCACED2A21C219"><enum>(i)</enum><text>an
individual and the individual's spouse have both attained age 55 before the
close of the taxable year, and</text>
</clause><clause id="HBCBF1FE92E2B4005AB881519714E6B11"><enum>(ii)</enum><text>the spouse is not
an account beneficiary of a health savings account as of the close of such
year,</text>
</clause><continuation-text continuation-text-level="subparagraph">the
additional contribution amount shall be 200 percent of the amount otherwise
determined under subparagraph
(B).</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HAA4C71706CB64E34B88FB4EBA96ADA74"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="H45A3C8C90E72402EB0DFDE32D82122A3"><enum>512.</enum><header>Provisions
relating to Medicare</header>
<subsection id="HC352B85585BA443D9CDAB230D8FD7E9C"><enum>(a)</enum><header>Individuals over
age 65 only enrolled in Medicare Part A</header><text>Paragraph (7) of section
223(b) is amended by adding at the end the following: <quote>This paragraph
shall not apply to any individual during any period for which the individual's
only entitlement to such benefits is an entitlement to hospital insurance
benefits under part A of title XVIII of such Act pursuant to an enrollment for
such hospital insurance benefits under section 226(a)(1) of such
Act.</quote>.</text>
</subsection><subsection id="HDE127CE5A7CD47F28820A0CEA88897EA"><enum>(b)</enum><header>Medicare
beneficiaries participating in Medicare advantage MSA may contribute their own
money to their MSA</header><text>Subsection (b) of section 138 is amended by
striking paragraph (2) and by redesignating paragraphs (3) and (4) as
paragraphs (2) and (3), respectively.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H94EDC2571C7D45059EDC5F35650D4404"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="HB30B9FA228F64A6D9411982F725E5AC9"><enum>513.</enum><header>Individuals
eligible for veterans benefits for a service-connected disability</header>
<subsection id="HAF68C689E00D48F9B0637E655E41015D"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 223(c) is amended by adding at
the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HE0B161ACAA28425E83F3E4467D89A502" style="OLC">
<subparagraph id="H36768AE30F1A4DA08CEA2DE9CE7E9195"><enum>(C)</enum><header>Special rule for
individuals eligible for certain veterans benefits</header><text>For purposes
of subparagraph (A)(ii), an individual shall not be treated as covered under a
health plan described in such subparagraph merely because the individual
receives periodic hospital care or medical services for a service-connected
disability under any law administered by the Secretary of Veterans Affairs but
only if the individual is not eligible to receive such care or services for any
condition other than a service-connected
disability.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H5119674766BA43368F6C3B60F48A1DAD"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="H5B8CACD6C42C4681A78EDE82D0FC4EC1"><enum>514.</enum><header>Individuals
eligible for Indian Health Service assistance</header>
<subsection commented="no" display-inline="no-display-inline" id="H52928A5EAC5F4E2C8DEA1936C5854408"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 223(c), as amended by section
612, is amended by adding at the end the following new subparagraph:</text>
<quoted-block act-name="" id="H3E14EE8BF3EA4B1FB57C9E03230B8FA3" style="OLC">
<subparagraph id="H1033909E38B14962860FBF675BE06EB2"><enum>(D)</enum><header>Special rule for
individuals eligible for assistance under Indian Health Service
programs</header><text>For purposes of subparagraph (A)(ii), an individual
shall not be treated as covered under a health plan described in such
subparagraph merely because the individual receives hospital care or medical
services under a medical care program of the Indian Health Service or of a
tribal
organization.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HBEFC5B73EE294AF88151FA0299DD8C6B"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="HAA7673E2F34E4DD985FD26E8B77DC568"><enum>515.</enum><header>Individuals
eligible for TRICARE coverage</header>
<subsection commented="no" display-inline="no-display-inline" id="H53F5A7088F6D416BBFD798FBFD118416"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 223(c), as amended by sections
613 and 614, is amended by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H466C91897CC3403D9B9CF0171B2E9BB6" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="H9359459EBF9C49DAA101430A7965DF24"><enum>(E)</enum><header>Special rule for
individuals eligible for assistance under tricare</header><text>For purposes of
subparagraph (A)(ii), an individual shall not be treated as covered under a
health plan described in such subparagraph merely because the individual is
eligible to receive hospital care, medical services, or prescription drugs
under TRICARE Extra or TRICARE Standard and such individual is not enrolled in
TRICARE
Prime.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HEA9A785BB78A4A7495771926E5BAFB76"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="H7B4FD26051FE42218B67F866823506F8" section-type="subsequent-section"><enum>516.</enum><header display-inline="yes-display-inline">Health FSA carryforwards</header>
<subsection commented="no" display-inline="no-display-inline" id="H62A8C215A67949B9B9D32566569EDEFE"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">Section 125 is amended by redesignating
subsections (i) and (j) as subsections (j) and (k), respectively, and by
inserting after subsection (h) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H89253911D8FE4079B979CD2453718B6D" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="H22B583119F8E4E1C9C372306996792ED"><enum>(i)</enum><header display-inline="yes-display-inline">Special rules applicable to health flexible
spending arrangements</header>
<paragraph commented="no" display-inline="no-display-inline" id="H88B89C40A1014D1FAD84917B50E3FA40"><enum>(1)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">For purposes of this title, a plan or other
arrangement shall not fail to be treated as a health flexible spending or
similar arrangement solely because under the plan or arrangement a participant
is permitted access to any unused balance in the participant’s accounts under
such plan or arrangement in the manner provided under paragraph (2).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H550348B6FE014A5B9DEBE4A641188F21"><enum>(2)</enum><header display-inline="yes-display-inline">Carryforward of unused benefits in health
arrangements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="HE87E11EC24DE41E5B6BB1E6130FD8E66"><enum>(A)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">A plan or arrangement may permit a
participant in a health flexible spending arrangement to elect to carry forward
any aggregate unused balances in the participant’s accounts under such
arrangement as of the close of any year to the succeeding year. Such
carryforward shall be treated as having occurred within 30 days of the close of
the year.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H2C4A1D3829384A0B86073F5D505EBB91"><enum>(B)</enum><header display-inline="yes-display-inline">Dollar limit on carryforwards</header>
<clause commented="no" display-inline="no-display-inline" id="H5C0940DBC3D646F885BC90D151EA5920"><enum>(i)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">The amount which a participant may elect to
carry forward under subparagraph (A) from any year shall not exceed $500. For
purposes of this paragraph, all plans and arrangements maintained by an
employer or any related person shall be treated as 1 plan.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="HDF626D5A28CF4CD582FEF4EC601B12D1"><enum>(ii)</enum><header display-inline="yes-display-inline">Cost-of-living adjustment</header><text display-inline="yes-display-inline">In the case of any taxable year beginning
in a calendar year after 2011, the $500 amount under clause (i) shall be
increased by an amount equal to—</text>
<subclause commented="no" display-inline="no-display-inline" id="HE4145994629F476395A557E16C780A52"><enum>(I)</enum><text display-inline="yes-display-inline">$500, multiplied by</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="H075EF1990B6E4D73952270679DBF11F3"><enum>(II)</enum><text display-inline="yes-display-inline">the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year, determined by substituting
<quote>2010</quote> for <quote>1992</quote> in subparagraph (B) thereof.</text>
</subclause><continuation-text commented="no" continuation-text-level="clause">If any dollar amount as increased under
this clause is not a multiple of $100, such amount shall be rounded to the next
lowest multiple of $100.</continuation-text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HE4EF2432ACA24088A01A6DBF149B65CB"><enum>(C)</enum><header display-inline="yes-display-inline">Exclusion from gross income</header><text display-inline="yes-display-inline">No amount shall be required to be included
in gross income under this chapter by reason of any carryforward under this
paragraph.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HE4C28BFBBBD142E4891914641DF65440"><enum>(D)</enum><header display-inline="yes-display-inline">Coordination with limits</header><text display-inline="yes-display-inline">The maximum amount which may be contributed
to a health flexible spending arrangement for any year to which an unused
amount is carried under this paragraph shall be reduced by such amount.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HDE60F6B6AFA745D1A28B02B05ED8B27C"><enum>(3)</enum><header display-inline="yes-display-inline">Terms relating to flexible spending
arrangements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="H64DAB61C9DAE461DAA51A80165E6E8C3"><enum>(A)</enum><header display-inline="yes-display-inline">Flexible spending
arrangements</header><text display-inline="yes-display-inline">For purposes of
this subsection, a flexible spending arrangement is a benefit program which
provides employees with coverage under which specified incurred expenses may be
reimbursed (subject to reimbursement maximums and other reasonable
conditions).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HD03F1456338E4F989F550FDA6993D5CC"><enum>(B)</enum><header display-inline="yes-display-inline">Health arrangements</header><text display-inline="yes-display-inline">The term <term>health flexible spending
arrangement</term> means any flexible spending arrangement (or portion thereof)
which provides payments for expenses incurred for medical care (as defined in
section
213(d)).</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H5B4E0CD05DA141529579A706D1F5ED9A"><enum>(b)</enum><header display-inline="yes-display-inline">Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="HC678F9EB8A7F4F6FACB49557CE70495E"><enum>(1)</enum><text display-inline="yes-display-inline">The heading for section 125 of the Internal
Revenue Code of 1986 is amended by inserting <quote><header-in-text level="section" style="OLC">and health flexible spending
arrangements</header-in-text></quote> after <quote><header-in-text level="section" style="OLC">plans</header-in-text></quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H2BD89BFCD1B74C76B80F86D325E5A759"><enum>(2)</enum><text display-inline="yes-display-inline">The item relating to section 125 in the
table of sections for part III of subchapter B of chapter 1 of such Code is
amended by inserting <quote>and health flexible spending arrangements</quote>
after <quote>plans</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HF3510C8A96D94914B261C671E4E6F2EE"><enum>(c)</enum><header display-inline="yes-display-inline">Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall take effect on the date of the enactment of this Act.</text>
</subsection></section><section id="H14536F2FEDB4451FB41472624BEC0435"><enum>517.</enum><header>FSA and HRA
interaction with HSAs</header>
<subsection id="H91C85614EBDE435C83F816C3DFB8C60C"><enum>(a)</enum><header>Eligible
individuals include FSA and HRA participants</header><text>Subparagraph (B) of
section 223(c)(1) is amended—</text>
<paragraph id="H27AC0E541C3343BA986C727DA0EA4106"><enum>(1)</enum><text>by striking
<quote>and</quote> at the end of clause (ii),</text>
</paragraph><paragraph id="H5F61D0F5694A4DABBB5225950176B69B"><enum>(2)</enum><text>by striking the
period at the end of clause (iii) and inserting <quote>, and</quote>,
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HA5CC07D266614919BF97C13328820686"><enum>(3)</enum><text>by inserting after
clause (iii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H499C5E4C981249318270FEF17ABB6EE0" style="OLC">
<clause id="H42A26554D69A4601A9188D419F119647"><enum>(iv)</enum><text>coverage under a
health flexible spending arrangement or a health reimbursement arrangement in
the plan year a qualified HSA distribution as described in section 106(e) is
made on behalf of the individual if after the qualified HSA distribution is
made and for the remaining duration of the plan year, the coverage provided
under the health flexible spending arrangement or health reimbursement
arrangement is converted to—</text>
<subclause id="HBDF1899093E24FABB026A9F6CA0634B7"><enum>(I)</enum><text>coverage that does
not pay or reimburse any medical expense incurred before the minimum annual
deductible under paragraph (2)(A)(i) (prorated for the period occurring after
the qualified HSA distribution is made) is satisfied,</text>
</subclause><subclause id="H17B8204194174B20802F748E105C46D6"><enum>(II)</enum><text>coverage that,
after the qualified HSA distribution is made, does not pay or reimburse any
medical expense incurred after the qualified HSA distribution is made other
than preventive care as defined in paragraph (2)(C),</text>
</subclause><subclause id="H7B65F50CEFB94AAF8EACE0BC421A6C00"><enum>(III)</enum><text>coverage that,
after the qualified HSA distribution is made, pays or reimburses benefits for
coverage described in clause (ii) (but not through insurance or for long-term
care services),</text>
</subclause><subclause id="H1258D0D8FA5D455C904C1074BE67ED5F"><enum>(IV)</enum><text>coverage that,
after the qualified HSA distribution is made, pays or reimburses benefits for
permitted insurance or coverage described in clause (ii) (but not for long-term
care services),</text>
</subclause><subclause id="H5203BDF0B199465EA1446A7F82B4765B"><enum>(V)</enum><text>coverage that,
after the qualified HSA distribution is made, pays or reimburses only those
medical expenses incurred after an individual’s retirement (and no expenses
incurred before retirement), or</text>
</subclause><subclause id="HA4F0F04298C34700ACD7931B067ECD60"><enum>(VI)</enum><text>coverage that,
after the qualified HSA distribution is made, is suspended, pursuant to an
election made on or before the date the individual elects a qualified HSA
distribution or, if later, on the date of the individual enrolls in a high
deductible health plan, that does not pay or reimburse, at any time, any
medical expense incurred during the suspension period except as defined in the
preceding subclauses of this
clause.</text>
</subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection display-inline="no-display-inline" id="H6C41F9F64EE34443B26F7C8D12B29262"><enum>(b)</enum><header>Qualified HSA
distribution shall not affect flexible spending
arrangement</header><text>Paragraph (1) of section 106(e) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="H69B9E0F40B904D61916CAD7F29DCB3F3" style="OLC">
<paragraph id="HFA479AD9F9A44D39B3C6D60235F0DC22"><enum>(1)</enum><header>In
general</header><text>A plan shall not fail to be treated as a health flexible
spending arrangement under this section, section 105, or section 125, or as a
health reimbursement arrangement under this section or section 105, merely
because such plan provides for a qualified HSA
distribution.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HD4292B0647AA42F1971EB5B42A267C23"><enum>(c)</enum><header>FSA balances at
year end shall not forfeit</header><text>Paragraph (2) of section 125(d) is
amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H649C392CEB6D45EFAC14BA7BEEADBAA0" style="OLC">
<subparagraph id="HE811A8A8793648E39707AAE983497F88"><enum>(E)</enum><header>Exception for
qualified HSA distributions</header><text>Subparagraph (A) shall not apply to
the extent that there is an amount remaining in a health flexible spending
account at the end of a plan year that an individual elects to contribute to a
health savings account pursuant to a qualified HSA distribution (as defined in
section
106(e)(2)).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H88FB60F2F0484EE1BE9C9F97E42F01A9"><enum>(d)</enum><header>Simplification
of limitations on FSA and HRA rollovers</header><text>Paragraph (2) of section
106(e) is amended to read as follows:</text>
<quoted-block act-name="" display-inline="no-display-inline" id="H003CAC478612431C8E3EC0200D3EF3D5" style="OLC">
<paragraph id="H73B36F9A38624817AFB172CEF54777EB"><enum>(2)</enum><header>Qualified HSA
distribution</header>
<subparagraph id="HB8C2554A15084DB2BB4F4A941F7B3CEE"><enum>(A)</enum><header>In
general</header><text>The term <term>qualified HSA distribution</term> means a
distribution from a health flexible spending arrangement or health
reimbursement arrangement to the extent that such distribution does not exceed
the lesser of—</text>
<clause id="HA4806F6AF80346AFB7C31C7EF3B3578D"><enum>(i)</enum><text>the balance in
such arrangement as of the date of such distribution, or</text>
</clause><clause id="HA5E112A793AD4DB19D1D174C87DA8DC5"><enum>(ii)</enum><text>the amount
determined under subparagraph (B).</text>
</clause><continuation-text continuation-text-level="subparagraph">Such
term shall not include more than 1 distribution with respect to any
arrangement.</continuation-text></subparagraph><subparagraph id="H37737A45C11C4E5DA5F509BD5C0D3789"><enum>(B)</enum><header>Dollar
limitations</header>
<clause id="H2FC5EB95770E47B4B72E2759E69D2AE3"><enum>(i)</enum><header>Distributions
from a health flexible spending arrangement</header><text>A qualified HSA
distribution from a health flexible spending arrangement shall not exceed the
applicable amount.</text>
</clause><clause id="H577C1F7A58394ECBA0A2C516DAF7D224"><enum>(ii)</enum><header>Distributions
from a health reimbursement arrangement</header><text>A qualified HSA
distribution from a health reimbursement arrangement shall not exceed—</text>
<subclause id="H678E58A3BD5C41159C5857C08C6BA21E"><enum>(I)</enum><text>the applicable
amount divided by 12, multiplied by</text>
</subclause><subclause id="H2B1678A29B5240809B6C437673231BF7"><enum>(II)</enum><text>the number of
months during which the individual is a participant in the health reimbursement
arrangement.</text>
</subclause></clause><clause id="H9A3E82BE96D54B129B350DD343C2EF93"><enum>(iii)</enum><header>Applicable
amount</header><text>For purposes of this subparagraph, the applicable amount
is—</text>
<subclause id="H925936DAE047493399CB4EEB1D6FEE68"><enum>(I)</enum><text>$2,250 in the case
of an eligible individual who has self-only coverage under a high deductible
health plan at the time of such distribution, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="HB6EAE2B4626D4B289D4621879B62C644"><enum>(II)</enum><text>$4,500 in the
case of an eligible individual who has family coverage under a high deductible
health plan at the time of such
distribution.</text>
</subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H7FB820003FA34EAC89D3B8130BD11FF3"><enum>(e)</enum><header>Elimination of
additional tax for failure To maintain high deductible health plan
coverage</header><text>Subsection (e) of section 106 is amended—</text>
<paragraph id="HF3AE3F31344C4AA28D8A907F2176F380"><enum>(1)</enum><text>by striking
paragraph (3) and redesignating paragraphs (4) and (5) as paragraphs (3) and
(4), respectively, and</text>
</paragraph><paragraph id="H218B0A3F4F3C413D9A25E3A120950DF7"><enum>(2)</enum><text>by striking
subparagraph (A) of paragraph (3), as so redesignated, and redesignating
subparagraphs (B) and (C) of such paragraph as subparagraphs (A) and (B)
thereof, respectively.</text>
</paragraph></subsection><subsection id="H8DA6DCB6F6A24BACB53014FDD6FEB588"><enum>(f)</enum><header>Limited purpose
FSAs and HRAs</header><text>Subsection (e) of section 106, as amended by this
section, is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HB013FFA64CA14D65A7D9FEEDA050E220" style="OLC">
<paragraph id="H3F26731E1C1A4B07A7D2CC8B42F928B9"><enum>(5)</enum><header>Limited purpose
FSAs and HRAs</header><text>A plan shall not fail to be a health flexible
spending arrangement or health reimbursement arrangement under this section or
section 105 merely because the plan converts coverage for individuals who
enroll in a high deductible health plan described in section 223(c)(2) to
coverage described in section 223(c)(1)(B)(iv). Coverage for such individuals
may be converted as of the date of enrollment in the high deductible health
plan, without regard to the period of coverage under the health flexible
spending arrangement or health reimbursement arrangement, and without requiring
any change in coverage to individuals who do not enroll in a high deductible
health
plan.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H23DEED3C26F744688E01D992130761C2"><enum>(g)</enum><header>Distribution
amounts adjusted for cost-of-Living</header><text>Subsection (e) of section
106, as amended by this section, is amended by adding at the end the following
new paragraph:</text>
<quoted-block act-name="" id="HECA19F5BEF194F17BB6A705966076261" style="OLC">
<paragraph id="H81BF34F085B344D0808BBB9A8781D04C"><enum>(6)</enum><header>Cost-of-living
adjustment</header>
<subparagraph id="HB6D3D6E75D1D4A90AAD74B2C36EFF27B"><enum>(A)</enum><header>In
general</header><text>In the case of any taxable year beginning after December
31, 2011, each of the dollar amounts in paragraph (2)(B)(iii) shall be
increased by an amount equal to such dollar amount, multiplied by the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which such taxable year begins by substituting <quote>calendar year
2010</quote> for <quote>calendar year 1992</quote> in subparagraph (B)
thereof.</text>
</subparagraph><subparagraph id="H7ADBA6F251FA4FD4B356BC6127F9E176"><enum>(B)</enum><header>Rounding</header><text>If
any increase under paragraph (1) is not a multiple of $50, such increase shall
be rounded to the nearest multiple of
$50.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H30BE2A14024348E0A198FF02528AD383"><enum>(h)</enum><header>Disclaimer of
disqualifying coverage</header><text>Subparagraph (B) of section 223(c)(1), as
amended by this section, is amended—</text>
<paragraph id="HC67A10B123C241ECABEA72AC1BB256C3"><enum>(1)</enum><text>by striking
<quote>and</quote> at the end of clause (iii),</text>
</paragraph><paragraph id="H8854365D8F1444E9B17B5D5E3B4C6B25"><enum>(2)</enum><text>by striking the
period at the end of clause (iv) and inserting <quote>, and</quote>, and</text>
</paragraph><paragraph id="H39ED5D8006B6478E8C82A943665BADE8"><enum>(3)</enum><text>by inserting after
clause (iv) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H47E1D977379D4188886763FA8B3F2AE3" style="OLC">
<clause id="H05EF5A189CAF48DC8251877C38A07AB6"><enum>(v)</enum><text>any coverage
(including prospective coverage) under a health plan that is not a high
deductible health plan which is disclaimed in writing, at the time of the
creation or organization of the health savings account, including by execution
of a trust described in subsection (d)(1) through a governing instrument that
includes such a disclaimer, or by acceptance of an amendment to such a trust
that includes such a
disclaimer.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H0B9FDF9263394A9492C08CAE2EA281C4"><enum>(i)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="H247DB7742DB343B785E8648DE44051CD"><enum>518.</enum><header>Allowance of
distributions for prescription and over-the-counter medicines and
drugs</header>
<subsection id="HADC9089BF41743649D4BAD10801ADADA"><enum>(a)</enum><header>Reference to
repeal of distributions for medicine qualified only if for prescribed drug or
insulin</header><text display-inline="yes-display-inline">Section 101 of this
Act provides for the repeal of section 9003 of the Patient Protection and
Affordable Care Act (Public Law 111–148) and the amendments made by such
section. The Internal Revenue Code of 1986 shall be applied as if such section
9003 and amendments had never been enacted.</text>
</subsection><subsection id="H0BA9F0F439FB4BBC97B62BAD6DC660B6"><enum>(b)</enum><header>Allowance of
distributions for all medicines and drugs</header>
<paragraph id="H2C5E84BF3BC44744B7B07C213617E2BF"><enum>(1)</enum><header><enum-in-header>HSA</enum-in-header>s</header><text>Subparagraph
(A) of section 223(d)(2) is amended by adding at the end the following:
<quote>Such term shall include an amount paid for any prescription or
over-the-counter medicine or drug.</quote>.</text>
</paragraph><paragraph id="HDDB28CD2A6EE49308BCD0C7918A4ECCA"><enum>(2)</enum><header>Archer
MSAs</header><text>Subparagraph (A) of section 220(d)(2) is amended by adding
at the end the following: <quote>Such term shall include an amount paid for any
prescription or over-the-counter medicine or drug.</quote>.</text>
</paragraph><paragraph id="H6A43FF12941940518A53EE919D8F0466"><enum>(3)</enum><header>Health flexible
spending arrangements and health reimbursement
arrangements</header><text>Section 106 is amended by adding at the end the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H2A4A5F3D688F4967A845934333A3D20F" style="OLC">
<subsection id="H6485BE9C7972455CB91DFD5AEC4472C9"><enum>(f)</enum><header>Reimbursements
for all medicines and drugs</header><text display-inline="yes-display-inline">For purposes of this section and section
105, reimbursement for expenses incurred for any prescription or
over-the-counter medicine or drug shall be treated as a reimbursement for
medical
expenses.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HA6B9834F77664D8C9B5AAA121BA76715"><enum>(4)</enum><header>Effective
dates</header>
<subparagraph id="HC7B2F9E30D5A41D1AA6FE1A03893AD8C"><enum>(A)</enum><header>Distributions
from savings accounts</header><text>The amendments made by paragraphs (1) and
(2) shall apply to amounts paid with respect to taxable years beginning after
December 31, 2009.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H8ADF6C444A034B8CAB3D07B0B917EF13"><enum>(B)</enum><header>Reimbursements</header><text>The
amendment made by paragraph (3) shall apply to expenses incurred with respect
to taxable years beginning after December 31, 2009.</text>
</subparagraph></paragraph></subsection></section><section id="HDE80BA9676034938A29EDA8D81D873DC"><enum>519.</enum><header>Purchase of
health insurance from HSA account</header>
<subsection id="HEC661FA5BD0D41E28C56F4B933EF57B7"><enum>(a)</enum><header>In
general</header><text>Paragraph (2) of section 223(d) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="HCCD912E72C334F2692BCB6A9DBFD2609" style="OLC">
<paragraph id="H55D7484E4F484115BFF908CC8056FF7C"><enum>(2)</enum><header>Qualified
medical expenses</header>
<subparagraph id="H1AEC0B054EE843C8947DE06C6DFCBAA2"><enum>(A)</enum><header>In
general</header><text>The term <term>qualified medical expenses</term> means,
with respect to an account beneficiary, amounts paid by such beneficiary for
medical care (as defined in section 213(d)) for any individual covered by a
high deductible health plan of the account beneficiary, but only to the extent
such amounts are not compensated for by insurance or otherwise.</text>
</subparagraph><subparagraph id="H9BC430682DB94C329C36E5BA46E98B30"><enum>(B)</enum><header>Health insurance
may not be purchased from account</header><text>Except as provided in
subparagraph (C), subparagraph (A) shall not apply to any payment for
insurance.</text>
</subparagraph><subparagraph id="H311C9D368E7E4CE8816FFCAE02474385"><enum>(C)</enum><header>Exceptions</header><text>Subparagraph
(B) shall not apply to any expense for coverage under—</text>
<clause id="HB71E400583A34AE6B794EC28570311FF"><enum>(i)</enum><text>a
health plan during any period of continuation coverage required under any
Federal law,</text>
</clause><clause id="H753F3276E3194812BA1683C16C0F5258"><enum>(ii)</enum><text>a
qualified long-term care insurance contract (as defined in section
7702B(b)),</text>
</clause><clause id="HD5FBA30EFF9C4C978A811DC579F2EEBC"><enum>(iii)</enum><text>a health plan
during any period in which the individual is receiving unemployment
compensation under any Federal or State law,</text>
</clause><clause id="HE5A1EF05BB074AAE9B8FA291CC2CFD79"><enum>(iv)</enum><text>a
high deductible health plan, or</text>
</clause><clause id="HBDF2F6478298489C84D740873E82D9BA"><enum>(v)</enum><text>any health
insurance under title XVIII of the Social Security Act, other than a Medicare
supplemental policy (as defined in section 1882 of such
Act).</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HE02BE081EFCD42729DB03D74270B0B59"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply with respect
to insurance purchased after the date of the enactment of this Act in taxable
years beginning after such date.</text>
</subsection></section><section id="HD858178010344501BE31A44F0AD552D5"><enum>520.</enum><header>Special rule
for certain medical expenses incurred before establishment of account</header>
<subsection id="H5A0AAE8D14754D3CB1B61F58AFD7873A"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Paragraph (2) of
section 223(d), as amended by section 619, is amended by adding at the end the
following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H19B695D2C67E459199BFDFC7B31733D8" style="OLC">
<subparagraph id="HFA487E79F75D44F8BD0F39A3A486EF1D"><enum>(D)</enum><header>Certain medical
expenses incurred before establishment of account treated as
qualified</header><text>An expense shall not fail to be treated as a qualified
medical expense solely because such expense was incurred before the
establishment of the health savings account if such expense was
incurred—</text>
<clause id="H28302068003247A1B4E469584F0CC7E0"><enum>(i)</enum><text>during
either—</text>
<subclause id="H08E074D56F1244E9A5CFF9D90CA97DE5"><enum>(I)</enum><text>the taxable year
in which the health savings account was established, or</text>
</subclause><subclause id="H364B608028FD42F49D1EED9B327E5DAE"><enum>(II)</enum><text>the preceding
taxable year in the case of a health savings account established after the
taxable year in which such expense was incurred but before the time prescribed
by law for filing the return for such taxable year (not including extensions
thereof), and</text>
</subclause></clause><clause id="H20EA005B69074C5EA9DEB17A53B95500"><enum>(ii)</enum><text>for medical care
of an individual during a period that such individual was covered by a high
deductible health plan and met the requirements of subsection (c)(1)(A)(ii)
(after application of subsection
(c)(1)(B)).</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HEDA149B814D54B1495FBEEE5128A6A31"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="HEAA86B68A95F455C8B87D63CB046F873"><enum>521.</enum><header>Preventive care
prescription drug clarification</header>
<subsection id="H1102043610D240F897B6C630FD07339D"><enum>(a)</enum><header>Clarify use of
drugs in preventive care</header><text>Subparagraph (C) of section 223(c)(2) is
amended by adding at the end the following: <quote>Preventive care shall
include prescription and over-the-counter drugs and medicines which have the
primary purpose of preventing the onset of, further deterioration from, or
complications associated with chronic conditions, illnesses, or
diseases.</quote>.</text>
</subsection><subsection id="HCD7CF6A94798471399BB5D7FB97D585B"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2003.</text>
</subsection></section><section id="H5D358EB420E344E08EC448F9661B2616" section-type="subsequent-section"><enum>522.</enum><header>Equivalent
bankruptcy protections for health savings accounts as retirement funds</header>
<subsection id="H3B3EEC877A984EADB363A6F98019B05C"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 522 of title
11, United States Code, is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="H5076A6C78BDA4A358BC8909AAA6A5DA6" style="OLC">
<subsection id="HB7991965D69C4D0EAD2C7126FEFF25D9"><enum>(r)</enum><header>Treatment of
health savings accounts</header><text>For purposes of this section, any health
savings account (as described in section 223 of the Internal Revenue Code of
1986) shall be treated in the same manner as an individual retirement account
described in section 408 of such
Code.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HAC3B5894747243BBBA44101E0B229806"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to cases
commencing under title 11, United States Code, after the date of the enactment
of this Act.</text>
</subsection></section><section id="HF9A473CB85A444E3AB070DBA91B508FA"><enum>523.</enum><header>Administrative
error correction before due date of return</header>
<subsection id="HD0F6DDD7412C4191A001C9A89528C596"><enum>(a)</enum><header>In
general</header><text>Paragraph (4) of section 223(f) is amended by adding at
the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H50552A78F777444685165C10BC2FB1D7" style="OLC">
<subparagraph id="HA9374F74841047058A3E461972B8452C"><enum>(D)</enum><header>Exception for
administrative errors corrected before due date of
return</header><text>Subparagraph (A) shall not apply if any payment or
distribution is made to correct an administrative, clerical or payroll
contribution error and if—</text>
<clause id="H94697F3673034614B28ED2D32AA05665"><enum>(i)</enum><text>such distribution
is received by the individual on or before the last day prescribed by law
(including extensions of time) for filing such individual's return for such
taxable year, and</text>
</clause><clause id="H55593B8F6284484AA2D416C263B5DC2F"><enum>(ii)</enum><text>such distribution
is accompanied by the amount of net income attributable to such
contribution.</text>
</clause><continuation-text continuation-text-level="subparagraph">Any net
income described in clause (ii) shall be included in the gross income of the
individual for the taxable year in which it is
received.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H31E2CEA12DC2471DA847450C101F2F82"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section id="HEF07C87E976B4C0FAFF1C218C6A55562" section-type="subsequent-section"><enum>524.</enum><header>Reauthorization of
medicaid health opportunity accounts</header>
<subsection id="HACECB42FC9D341AAB02638740ADCA787"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1938 of the
Social Security Act (42 U.S.C. 1396u–8) is amended—</text>
<paragraph id="HBBB88E820D02443381D0D818D6882B47"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (a)—</text>
<subparagraph id="H5BDAE88B0A694BE4B6A414E0A1C5B303"><enum>(A)</enum><text display-inline="yes-display-inline">by striking paragraph (2) and inserting the
following:</text>
<quoted-block display-inline="no-display-inline" id="H9DE1B1D0352448A7A64369CD7E4D04C8" style="OLC">
<paragraph id="H81F2BDCABB804EDDAA99DCD14399C4A9"><enum>(2)</enum><header>Initial
demonstration</header><text>The demonstration program under this section shall
begin 90 days after the date of the enactment of this paragraph. The Secretary
shall approve States to conduct demonstration programs under this section for a
5-year period, with each State demonstration program covering 1 or more
geographic areas specified by the State. With respect to a State, after the
initial 5-year period of any demonstration program conducted under this section
by the State, unless the Secretary finds, taking into account
cost-effectiveness and quality of care, that the State demonstration program
has been unsuccessful, the demonstration program may be extended or made
permanent in the State.</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H2231ECB00602471992463E725E8C3300"><enum>(B)</enum><text>in paragraph (3),
in the matter preceding subparagraph (A)—</text>
<clause id="HD049DCA995B548E5BE002E888207D847"><enum>(i)</enum><text>by
striking <quote>not</quote>; and</text>
</clause><clause id="H22F079768A1148239E44A73251E82A68"><enum>(ii)</enum><text>by
striking <quote>unless</quote> and inserting <quote>if </quote>;</text>
</clause></subparagraph></paragraph><paragraph id="H5CFA29AE07B84B3AAFAABBF85F99AAC0"><enum>(2)</enum><text>in subsection
(b)—</text>
<subparagraph id="H1662C9799CFC45BD919DAED6656256BD"><enum>(A)</enum><text>in paragraph (3),
by inserting <quote>clause (i) through (vii), (viii) (without regard to the
amendment made by section 2004(c)(2) of Public Law 111–148), (x), or (xi)
of</quote> after <quote>described in </quote>; and</text>
</subparagraph><subparagraph id="HF90B31AD6B0A4044A39D6B90B0B7C2F3"><enum>(B)</enum><text>by striking
paragraphs (4), (5), and (6);</text>
</subparagraph></paragraph><paragraph id="H097CBD1A22E845409DD29192FB5E154F"><enum>(3)</enum><text>in subsection
(c)—</text>
<subparagraph id="HEB598AB2794E485FB72852B2998B8EB6"><enum>(A)</enum><text>by striking
paragraphs (3) and (4);</text>
</subparagraph><subparagraph id="HA6275DF7BB8F49BD82268C320E660EDE"><enum>(B)</enum><text>by redesignating
paragraphs (5) through (8) as paragraphs (3) through (6), respectively;
and</text>
</subparagraph><subparagraph id="HE2D27EE589F54DE0A35545E82FC284AE"><enum>(C)</enum><text>in paragraph (4)
(as redesignated by subparagraph (B)), by striking <quote>Subject to
subparagraphs (D) and (E)</quote> and inserting <quote>Subject to subparagraph
(D)</quote>; and</text>
</subparagraph></paragraph><paragraph id="H85A533B22665494084C1AFB4AA0BA43A"><enum>(4)</enum><text>in subsection
(d)—</text>
<subparagraph id="HE31F14EEA48F4C8B80DEDD149EDA756E"><enum>(A)</enum><text>in paragraph (2),
by striking subparagraph (E); and</text>
</subparagraph><subparagraph id="H3AF933F7D986441F9A9B525E105157FF"><enum>(B)</enum><text>in paragraph
(3)—</text>
<clause id="H8398CD28609C487BACDB50E971B8BD24"><enum>(i)</enum><text>in
subparagraph (A)(ii), by striking <quote>Subject to subparagraph (B)(ii),
in</quote> and inserting <quote>In</quote>; and</text>
</clause><clause id="H1C4776F9A3754840A867AFE6ECB2BE8E"><enum>(ii)</enum><text>by
striking subparagraph (B) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HB2C122370F46413D904979BD38B5F8D4" style="OLC">
<subparagraph id="H20034B2495124EF1A822B22D1B82EE00"><enum>(B)</enum><header>Maintenance of
health opportunity account after becoming ineligible for public
benefit</header><text>Notwithstanding any other provision of law, if an account
holder of a health opportunity account becomes ineligible for benefits under
this title because of an increase in income or assets—</text>
<clause id="H308E39318DBB4DFDA9B7EFABD49B194E"><enum>(i)</enum><text>no
additional contribution shall be made into the account under paragraph
(2)(A)(i); and</text>
</clause><clause id="H99577AE2A20D4206B5D5F1567D753806"><enum>(ii)</enum><text>the account shall
remain available to the account holder for 3 years after the date on which the
individual becomes ineligible for such benefits for withdrawals under the same
terms and conditions as if the account holder remained eligible for such
benefits, and such withdrawals shall be treated as medical assistance in
accordance with subsection
(c)(4).</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HDC2D5AE9D56340AB9AA2199531F8976D"><enum>(b)</enum><header>Conforming
amendment</header><text>Section 613 of Public Law 111–3 is repealed.</text>
</subsection></section></subtitle><subtitle id="HC3C9F6DAE6514A0D85658F21E5AE884F"><enum>B</enum><header>Other
provisions</header>
<section id="H5699EAFBBB2F444D807B329412BE40E3"><enum>531.</enum><header>Certain
exercise equipment and physical fitness programs treated as medical
care</header>
<subsection id="HEACCC19706FE4350AF5911E7B1994BB3"><enum>(a)</enum><header>In
general</header><text>Subsection (d) of section 213 is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H5760CEFB14E84D73880EF43BE094D1E7" style="OLC">
<paragraph id="HF130C67A39194D288C6E013F3A7A8AC5"><enum>(12)</enum><header>Exercise
equipment and physical fitness programs</header>
<subparagraph id="H97FB22DFD6F44637ADD2A799CF3AF7B2"><enum>(A)</enum><header>In
general</header><text>The term <term>medical care</term> shall include amounts
paid—</text>
<clause id="HF3D9844D32034C93820AEC422E4AE80B"><enum>(i)</enum><text>to
purchase or use equipment used in a program (including a self-directed program)
of physical exercise,</text>
</clause><clause id="HA7BC219B64D544928F9B526EFD97765F"><enum>(ii)</enum><text>to participate,
or receive instruction, in a program of physical exercise, and</text>
</clause><clause id="HC118B3FC2A1745A5A807D8C6ACDE631F"><enum>(iii)</enum><text>for membership
dues in a fitness club the primary purpose of which is to provide access to
equipment and facilities for physical exercise.</text>
</clause></subparagraph><subparagraph id="H3B0A569EF2254C8AA1B1875ED42E4315"><enum>(B)</enum><header>Limitation</header><text>Amounts
treated as medical care under subparagraph (A) shall not exceed $1,000 with
respect to any individual for any taxable
year.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF9EB7AC0A6A54F88B167D1036DDBB4FD"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="H02C7D6274F3F46D6B02F6BAF438E6FAD"><enum>532.</enum><header>Certain
nutritional and dietary supplements to be treated as medical care</header>
<subsection id="HFE0FEBFDB88644AC9B4829FBFF5EA5B5"><enum>(a)</enum><header>In
general</header><text>Subsection (d) of section 213, as amended by section 631,
is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H35AA4F9CF50C45CB96D3C710A5E2D0EC" style="OLC">
<paragraph id="H6892207E396B4E2582C742E04935D04A"><enum>(13)</enum><header>Nutritional and
dietary supplements</header>
<subparagraph id="HE5D5E1725FB44CD1A08183731264AA0A"><enum>(A)</enum><header>In
general</header><text>The term <term>medical care</term> shall include amounts
paid to purchase herbs, vitamins, minerals, homeopathic remedies, meal
replacement products, and other dietary and nutritional supplements.</text>
</subparagraph><subparagraph id="HEE41B716AA7B4163A31ACD26E6D46485"><enum>(B)</enum><header>Limitation</header><text>Amounts
treated as medical care under subparagraph (A) shall not exceed $1,000 with
respect to any individual for any taxable year.</text>
</subparagraph><subparagraph id="HD63F5F6332E24AB0BEB990AABF9F4CFD"><enum>(C)</enum><header>Meal replacement
product</header><text>For purposes of this paragraph, the term <term>meal
replacement product</term> means any product that—</text>
<clause id="HFD23876681524429A725704F19A7F226"><enum>(i)</enum><text>is
permitted to bear labeling making a claim described in section 403(r)(3) of the
Federal Food, Drug, and Cosmetic Act, and</text>
</clause><clause id="HBC9778AF3BC14E47B06CF9CC3438FE3F"><enum>(ii)</enum><text>is permitted to
claim under such section that such product is low in fat and is a good source
of protein, fiber, and multiple essential vitamins and
minerals.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HA162B446EA254C3AA5E919EB9A306820"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="H4230578CAA714981AE577E396484C4A1"><enum>533.</enum><header>Certain
provider fees to be treated as medical care</header>
<subsection id="HFF17A1E64E46428497FC0FDAFB14ED05"><enum>(a)</enum><header>In
general</header><text>Subsection (d) of section 213, as amended by sections 631
and 632, is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H22BB0FB9614E414BB71EDE7E502F82ED" style="OLC">
<paragraph id="H62F88C7FBC7E4CF2A5A6D4B1956E08A7"><enum>(14)</enum><header>Periodic
provider fees</header><text>The term <term>medical care</term> shall include
periodic fees paid to a primary physician, physician assistant, or nurse
practitioner for the right to receive medical services on an as-needed
basis.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HDFB306C6092540D9BEB24CC67DF81CB6"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section></subtitle><enum>VI</enum><header>Covering People
with Pre-Existing Conditions, Removing Annual and Lifetime Coverage Caps, and
Expanding Access to Care</header>
<subtitle id="H0075FC80C4B544F3A4E979DEBE20E4AA"><enum>A</enum><header>Making Health Care
Coverage Affordable for Every American </header>
<chapter id="H5C86B0D696214A4183A1D6D2F546CDDC"><enum>1</enum><header>Ensuring coverage
for individuals with preexisting conditions and multiple health care
needs</header>
<section id="H28BB43C7D0A943719A41C0CB5F0A56C9"><enum>601.</enum><header>Establish
universal access programs to improve high risk pools and reinsurance
markets</header>
<subsection id="H5817894BCCCF48D9A90D5883AC27DD20"><enum>(a)</enum><header>State
requirement</header>
<paragraph id="H42B7C4AC849A4955A8697DDC58899132"><enum>(1)</enum><header>In
general</header><text>Not later than January 1, 2012, each State shall—</text>
<subparagraph id="HC01872ADEE4C4DB490B4A5B01F31B64B"><enum>(A)</enum><text>subject to
paragraph (3), operate—</text>
<clause id="HBB629B8EAA224C739A67FEFDB9783420"><enum>(i)</enum><text>a
qualified State reinsurance program described in subsection (b); or</text>
</clause><clause id="H8D6874DC004F4B59B73B8DDB92C451AD"><enum>(ii)</enum><text>qualifying State
high risk pool described in subsection (c)(1); and</text>
</clause></subparagraph><subparagraph id="H997EE53C39154C0F91A1D783DB1F9248"><enum>(B)</enum><text>subject to
paragraph (3), apply to the operation of such a program from State funds an
amount equivalent to the portion of State funds derived from State premium
assessments (as defined by the Secretary) that are not otherwise used on State
health care programs.</text>
</subparagraph></paragraph><paragraph id="HBE9DB453A8884BFAA55E0B4D59E8AE3A"><enum>(2)</enum><header>Relation to
current qualified high risk pool program</header>
<subparagraph id="H9EA669B3882E43EDA23F54CECCA2A2C7"><enum>(A)</enum><header>States not
operating a qualified high risk pool</header><text display-inline="yes-display-inline">In the case of a State that is not
operating a current section 2745 qualified high risk pool as of the date of the
enactment of this Act—</text>
<clause id="H2A8BF289AF9945EB9FB0DE91BB799DBE"><enum>(i)</enum><text>the
State may only meet the requirement of paragraph (1) through the operation of a
qualified State reinsurance program described in subsection (b); and</text>
</clause><clause id="H1491664A554045E3A06B92D8BE49B3F1"><enum>(ii)</enum><text>the
State’s operation of such a reinsurance program shall be treated, for purposes
of section 2745 of the Public Health Service Act, as the operation of a
qualified high risk pool described in such section.</text>
</clause></subparagraph><subparagraph id="H7E09846A96EC4A79B4528B3E15A860C2"><enum>(B)</enum><header>State operating
a qualified high risk pool</header><text>In the case of a State that is
operating a current section 2745 qualified high risk pool as of the date of the
enactment of this Act—</text>
<clause id="H63366148392F4A3F8E44470E5F4B1548"><enum>(i)</enum><text>as
of January 1, 2012, such a pool shall not be treated as a qualified high risk
pool under section 2745 of the Public Health Service Act unless the pool is a
qualifying State high risk pool described in subsection (c)(1); and</text>
</clause><clause id="HA03AE90773704BBBBAAA16EFF512DAB5"><enum>(ii)</enum><text display-inline="yes-display-inline">the State may use premium assessment funds
described in paragraph (1)(B) to transition from operation of such a pool to
operation of a qualified State reinsurance program described in subsection
(b).</text>
</clause></subparagraph></paragraph><paragraph id="H9C823A1CC1F4476191B2E23D9A9EC244"><enum>(3)</enum><header>Application of
funds</header><text>If the program or pool operated under paragraph (1)(A) is
in strong fiscal health, as determined in accordance with standards established
by the National Association of Insurance Commissioners and as approved by the
State Insurance Commissioner involved, the requirement of paragraph (1)(B)
shall be deemed to be met.</text>
</paragraph></subsection><subsection id="H77EEE04EBE604E8D8D77AE7080447FAA"><enum>(b)</enum><header>Qualified State
reinsurance program</header>
<paragraph id="H7F90EFC9D0884E9B8E0C8ED61D497125"><enum>(1)</enum><header>In
general</header><text>For purposes of this section, a <quote>qualified State
reinsurance program</quote> means a program operated by a State program that
provides reinsurance for health insurance coverage offered in the small group
market in accordance with the model for such a program established (as of the
date of the enactment of this Act).</text>
</paragraph><paragraph id="HA8DE7F77447D4936829752B68AFE02AA"><enum>(2)</enum><header>Form of
program</header><text>A qualified State reinsurance program may provide
reinsurance—</text>
<subparagraph id="H3ABE420DEA38447EB1539B5329E19740"><enum>(A)</enum><text>on a prospective
or retrospective basis; and</text>
</subparagraph><subparagraph id="HC6056FBE733F448AAA3622DCC07CDC60"><enum>(B)</enum><text>on a basis that
protects health insurance issuers against the annual aggregate spending of
their enrollees as well as purchase protection against individual catastrophic
costs.</text>
</subparagraph></paragraph><paragraph id="H70EEE57509B94D91B15BF0B1165E5414"><enum>(3)</enum><header>Satisfaction of
HIPAA requirement</header><text>A qualified State reinsurance program shall be
deemed, for purposes of section 2745 of the Public Health Service Act, to be a
qualified high risk pool under such section.</text>
</paragraph></subsection><subsection id="H463615C53E294A938B265A221600EDE5"><enum>(c)</enum><header>Qualifying State
high risk pool</header>
<paragraph id="HB7F23D628B364234988F73CD8451FA3F"><enum>(1)</enum><header>In
general</header><text>A qualifying State high risk pool described in this
subsection means a current section 2745 qualified high risk pool that meets the
following requirements:</text>
<subparagraph id="H127267119F37424AB194323F44BC66CF"><enum>(A)</enum><text display-inline="yes-display-inline">The pool must provide at least two coverage
options, one of which must be a high deductible health plan coupled with a
health savings account.</text>
</subparagraph><subparagraph id="H401EDD827A3C4B18825F9B58E8DE47C3"><enum>(B)</enum><text display-inline="yes-display-inline">The pool must be funded with a stable
funding source.</text>
</subparagraph><subparagraph id="H3CD0AE0AA318424ABBC47CC807A41D71"><enum>(C)</enum><text>The pool must
eliminate any waiting lists so that all eligible residents who are seeking
coverage through the pool should be allowed to receive coverage through the
pool.</text>
</subparagraph><subparagraph id="H3F0C2E0CC6E34499B644B65747C08DEC"><enum>(D)</enum><text>The pool must
allow for coverage of individuals who, but for the 24-month disability waiting
period under section 226(b) of the Social Security Act, would be eligible for
Medicare during the period of such waiting period.</text>
</subparagraph><subparagraph id="HCF8BB5BF1539495AB5C8ADAA81058DA2"><enum>(E)</enum><text>The pool must
limit the pool premiums to no more than 150 percent of the average premium for
applicable standard risk rates in that State.</text>
</subparagraph><subparagraph id="H2E95BCDE03E146209A94097430F6A69D"><enum>(F)</enum><text>The pool must
conduct education and outreach initiatives so that residents and brokers
understand that the pool is available to eligible residents.</text>
</subparagraph><subparagraph id="HD7EC88C767444AD19E7AB79B3E495925"><enum>(G)</enum><text>The pool must
provide coverage for preventive services and disease management for chronic
diseases.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H91A6A3EC8FE449D0A3A097136A5EE107"><enum>(2)</enum><header>Verification of
citizenship or alien qualification</header>
<subparagraph id="H32B957E204644EC2907388FF04589983"><enum>(A)</enum><header>In
general</header><text>Notwithstanding any other provision of law, only citizens
and nationals of the United States shall be eligible to participate in a
qualifying State high risk pool that receives funds under section 2745 of the
Public Health Service Act or this section.</text>
</subparagraph><subparagraph id="HC26F05C55721426F8AEE9132008F55EA"><enum>(B)</enum><header>Condition of
participation</header><text>As a condition of a State receiving such funds, the
Secretary shall require the State to certify, to the satisfaction of the
Secretary, that such State requires all applicants for coverage in the
qualifying State high risk pool to provide satisfactory documentation of
citizenship or nationality in a manner consistent with section 1903(x) of the
Social Security Act.</text>
</subparagraph><subparagraph id="H89DB6DF77F2845C1850090A6B1BD0083"><enum>(C)</enum><header>Records</header><text>The
Secretary shall keep sufficient records such that a determination of
citizenship or nationality only has to be made once for any individual under
this paragraph.</text>
</subparagraph></paragraph><paragraph id="H2791FE699C8744518AD295DD6207E2BA"><enum>(3)</enum><header>Relation to
section 2745</header><text display-inline="yes-display-inline">As of January 1,
2012, a pool shall not qualify as qualified high risk pool under section 2745
of the Public Health Service Act unless the pool is a qualifying State high
risk pool described in paragraph (1).</text>
</paragraph></subsection><subsection id="HB002DEDD677D4878B0DD3F820A6DBF70"><enum>(d)</enum><header>Waivers</header><text>In
order to accommodate new and innovative programs, the Secretary may waive such
requirements of this section for qualified State reinsurance programs and for
qualifying State high risk pools as the Secretary deems appropriate.</text>
</subsection><subsection id="H840B2900CF57423CA66B6D5D147EEE5F"><enum>(e)</enum><header>Funding</header><text display-inline="yes-display-inline">In addition to any other amounts
appropriated, there is appropriated to carry out section 2745 of the Public
Health Service Act (including through a program or pool described in subsection
(a)(1))—</text>
<paragraph id="H25D659591E5D48CAB59CBD5814E2CFE2"><enum>(1)</enum><text>$15,000,000,000
for the period of fiscal years 2012 through 2021; and</text>
</paragraph><paragraph id="HE595D4980D404A01A594AFD7F5720D1F"><enum>(2)</enum><text display-inline="yes-display-inline">an additional $10,000,000,000 for the
period of fiscal years 2017 through 2021.</text>
</paragraph></subsection><subsection id="HC2341C07FEAB4580863367CB4D66E38C"><enum>(f)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="H4F340E328AF34A14839AA97149D252D6"><enum>(1)</enum><header>Health insurance
coverage; health insurance issuer</header><text>The terms <term>health
insurance coverage</term> and <term>health insurance issuer</term> have the
meanings given such terms in section 2791 of the Public Health Service
Act.</text>
</paragraph><paragraph id="H75B76BEC5B63422181B8B899E66529F4"><enum>(2)</enum><header>Current section
2745 qualified high risk pool</header><text>The term <term>current section 2745
qualified high risk pool</term> has the meaning given the term <term>qualified
high risk pool</term> under section 2745(g) of the Public Health Service Act as
in effect as of the date of the enactment of this Act.</text>
</paragraph><paragraph id="HD25ABD94585140E2801A60B41ABDA359"><enum>(3)</enum><header>Secretary</header><text>The
term <term>Secretary</term> means Secretary of Health and Human
Services.</text>
</paragraph><paragraph id="HD904269421324D479C7E1E37B289D39B"><enum>(4)</enum><header>Standard risk
rate</header><text display-inline="yes-display-inline">The term <term>standard
risk rate</term> means a rate that—</text>
<subparagraph id="HD9A361BDAF964B92B8B3F47341F6B1ED"><enum>(A)</enum><text>is determined
under the State high risk pool by considering the premium rates charged by
other health insurance issuers offering health insurance coverage to
individuals in the insurance market served;</text>
</subparagraph><subparagraph id="HC8921FDEFA3B4CF1B987DCF351215005"><enum>(B)</enum><text>is established
using reasonable actuarial techniques; and</text>
</subparagraph><subparagraph id="H57EF058D58B144C09C6F00D9BC69464F"><enum>(C)</enum><text>reflects
anticipated claims experience and expenses for the coverage involved.</text>
</subparagraph></paragraph><paragraph id="H175E513CEBF2437DB39C5C4AA4F508B5"><enum>(5)</enum><header>State</header><text>The
term <term>State</term> means any of the 50 States or the District of
Columbia.</text>
</paragraph></subsection></section><section id="H730BD6A7F78C4D3781068EF880DF94F5"><enum>602.</enum><header>Elimination of
certain requirements for guaranteed availability in individual market</header>
<subsection id="H4579C4D8F5384CC2988921F10FD0EF97"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 2741(b) of
the Public Health Service Act (42 U.S.C. 300gg–41(b)) is amended—</text>
<paragraph id="HD6EF0B2100F64836A6AB6FDEFB10448C"><enum>(1)</enum><text>in paragraph
(1)—</text>
<subparagraph id="H76CC7B9C2EB74AE8BDCD10F363EFBDEA"><enum>(A)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC"><enum-in-header>(1)(A)</enum-in-header></header-in-text></quote>
and inserting <quote><header-in-text level="paragraph" style="OLC"><enum-in-header>(1)</enum-in-header></header-in-text></quote>;
and</text>
</subparagraph><subparagraph id="HBB22AC5D2D184965AC10ABD10E689EC4"><enum>(B)</enum><text>by striking
<quote>and (B)</quote> and all that follows up to the semicolon at the
end;</text>
</subparagraph></paragraph><paragraph id="H06136AA070584B76A3C31975466F12A1"><enum>(2)</enum><text>by adding
<quote>and</quote> at the end of paragraph (2);</text>
</paragraph><paragraph id="HB2FAB7E6EF934547AF22EB9CD4FA37DD"><enum>(3)</enum><text>in paragraph
(3)—</text>
<subparagraph id="H2BE8DC8E2E0A4C42A07971B147B8639C"><enum>(A)</enum><text>by striking
<quote>(1)(A)</quote> and inserting <quote>(1)</quote>; and</text>
</subparagraph><subparagraph id="H5F7F3712F62F4E39B4060989A7F6F6A2"><enum>(B)</enum><text>by striking the
semicolon at the end and inserting a period; and</text>
</subparagraph></paragraph><paragraph id="H493F8595FDA445209829F6BAB5C0C2F4"><enum>(4)</enum><text>by striking
paragraphs (4) and (5).</text>
</paragraph></subsection><subsection id="H98C17A520EA948D4A37A72EADC6DB66E"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by subsection (a) shall take effect on
the date of the enactment of this Act.</text>
</subsection></section><section commented="no" id="H41170237E268404992BD73F5E56BEB21"><enum>603.</enum><header>No annual or
lifetime spending caps</header>
<subsection id="H527C005D682F4D28BF2BD70DFFAEB560"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, a health insurance issuer (including an entity licensed
to sell insurance with respect to a State or group health plan) may not apply
an annual or lifetime aggregate spending cap on any health insurance coverage
or plan offered by such issuer. The restriction of the previous sentence shall
not apply with respect to a health insurance coverage or plan if, as of the
date of the enactment of this Act, it would result in a significant decrease in
access to benefits under the plan or would significantly increase premiums
under the plan.</text>
</subsection><subsection id="H9D2B75BC8F514318AFA7E9F0DA0BD055"><enum>(b)</enum><header>Application</header><text>Subsection
(a) shall be enforced as if it were included as a provision in parts A and B of
title XXVII of the Public Health Service Act (as such title is in effect after
the date of repeal of Public Law 111–148 under section 101).</text>
</subsection></section><section display-inline="no-display-inline" id="HF86AA1D1CDE64DA1B47580ACCC27EBFF" section-type="subsequent-section"><enum>604.</enum><header>Preventing unjust
cancellation of insurance coverage</header>
<subsection id="H2C2B0D3863ED4BFAACF7810048247044"><enum>(a)</enum><header>Clarification
regarding application of guaranteed renewability of individual health insurance
coverage</header><text>Section 2742 of the Public Health Service Act (42 U.S.C.
300gg–42) is amended—</text>
<paragraph id="HA15EF8C6355A41ADAC8EDB7120DE44FC"><enum>(1)</enum><text>in its heading, by
inserting <quote><header-in-text level="section" style="OLC">, continuation in
force, including prohibition of rescission,</header-in-text></quote> after
<quote><header-in-text level="section" style="OLC">Guaranteed
renewability</header-in-text></quote>;</text>
</paragraph><paragraph id="H2D052AA601A34389908C6BD49E522D00"><enum>(2)</enum><text>in subsection (a),
by inserting <quote>, including without rescission,</quote> after
<quote>continue in force</quote>; and</text>
</paragraph><paragraph id="H09F3760DB1DD45D5B482416340049EF9"><enum>(3)</enum><text>in subsection
(b)(2), by inserting before the period at the end the following: <quote>,
including intentional concealment of material facts regarding a health
condition related to the condition for which coverage is being
claimed</quote>.</text>
</paragraph></subsection><subsection id="H6D120C89BC6447CCAB33230118878B19"><enum>(b)</enum><header>Opportunity for
independent, external third party review in certain cases</header><text display-inline="yes-display-inline">Subpart 1 of part B of title XXVII of the
Public Health Service Act is amended by adding at the end the following new
section:</text>
<quoted-block display-inline="no-display-inline" id="HB23A1299DF0C49018CF0B02CA9720811" style="OLC">
<section id="HF14565EAF6EE41D0AD85B020DBC6AFE8"><enum>2746.</enum><header>Opportunity
for independent, external third party review in certain cases</header>
<subsection id="H04A2FA2B7CFD44D1A58A9DBD8FE43FDC"><enum>(a)</enum><header>Notice and
review right</header><text>If a health insurance issuer determines to nonrenew
or not continue in force, including rescind, health insurance coverage for an
individual in the individual market on the basis described in section
2742(b)(2) before such nonrenewal, discontinuation, or rescission, may take
effect the issuer shall provide the individual with notice of such proposed
nonrenewal, discontinuation, or rescission and an opportunity for a review of
such determination by an independent, external third party under procedures
specified by the Secretary.</text>
</subsection><subsection id="H65875BAD379C42E399994F104FC29C01"><enum>(b)</enum><header>Independent
determination</header><text display-inline="yes-display-inline">If the
individual requests such review by an independent, external third party of a
nonrenewal, discontinuation, or rescission of health insurance coverage, the
coverage shall remain in effect until such third party determines that the
coverage may be nonrenewed, discontinued, or rescinded under section
2742(b)(2).</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection display-inline="no-display-inline" id="H5800DEC55D264294B7EF3D70ECCDF4B0"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply after the date of the enactment of this Act with
respect to health insurance coverage issued before, on, or after such
date.</text>
</subsection></section></chapter><chapter id="H4190B799EC1749A9A91A66EEC9EAF358"><enum>2</enum><header>Reducing health
care premiums and the number of uninsured Americans</header>
<section id="H75FAF10B26854C04B35FF2C83DE924C7" section-type="subsequent-section"><enum>611.</enum><header>State innovation
programs</header>
<subsection id="H30AAE94093784248BDC6A39DA654C135"><enum>(a)</enum><header>Programs that
reduce the cost of health insurance premiums</header>
<paragraph id="HF53E969B628E487FA4493ECF96FBA333"><enum>(1)</enum><header>Payments to
States</header>
<subparagraph id="H29DFE639F4E24C79B74F77EB13DA5E1B"><enum>(A)</enum><header>For premium
reductions in the small group market</header><text>If the Secretary determines
that a State has reduced the average per capita premium for health insurance
coverage in the small group market in year 3, in year 6, or year 9 (as defined
in subsection (c)) below the premium baseline for such year (as defined
paragraph (2)), the Secretary shall pay the State an amount equal to the
product of—</text>
<clause id="H75DA15AE7A78428BA3D85168ABC841FA"><enum>(i)</enum><text>bonus premium
percentage (as defined in paragraph (3)) for the State, market, and year;
and</text>
</clause><clause id="H3C836AEC84454A3DADBA57A77D73D731"><enum>(ii)</enum><text display-inline="yes-display-inline">the maximum State premium payment amount
(as defined in paragraph (4)) for the State, market, and year.</text>
</clause></subparagraph><subparagraph id="H6EE181EF538746949B445EFEC813516E"><enum>(B)</enum><header>For premium
reductions in the individual market</header><text display-inline="yes-display-inline">If the Secretary determines that a State
has reduced the average per capita premium for health insurance coverage in the
individual market in year 3, in year 6, or in year 9 below the premium baseline
for such year, the Secretary shall pay the State an amount equal to the product
of—</text>
<clause id="H1788438F7C384C789C09A7CFB70F0861"><enum>(i)</enum><text>bonus premium
percentage for the State, market, and year; and</text>
</clause><clause id="H2AABDE915C4B47D3B05F06A27ADD0101"><enum>(ii)</enum><text>the
maximum State premium payment amount for the State, market, and year.</text>
</clause></subparagraph></paragraph><paragraph id="H6B26BE2639E942B5B55F0C15722AEA10"><enum>(2)</enum><header>Premium
baseline</header><text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>premium baseline</term> means, for a market in a
State—</text>
<subparagraph id="HE28B05ACAE7D476A89E5C704CEF5FC49"><enum>(A)</enum><text>for year 1, the
average per capita premiums for health insurance coverage in such market in the
State in such year; or</text>
</subparagraph><subparagraph id="H2899430362D64CED99DD1417B723A779"><enum>(B)</enum><text>for a subsequent
year, the baseline for the market in the State for the previous year under this
paragraph increased by a percentage specified in accordance with a formula
established by the Secretary, in consultation with the Congressional Budget
Office and the Bureau of the Census, that takes into account at least the
following:</text>
<clause id="H3821C466B12D415A91E481EB648CDFBF"><enum>(i)</enum><header>Growth
factor</header><text>The inflation in the costs of inputs to health care
services in the year.</text>
</clause><clause id="HD7C3E482B81A4D0F81D2F89460BCDC0F"><enum>(ii)</enum><header>Historic
premium growth rates</header><text>Historic growth rates, during the 10 years
before year 1, of per capita premiums for health insurance coverage.</text>
</clause><clause id="HB6F6FE5C11FC4A69A5842FB399025843"><enum>(iii)</enum><header>Demographic
considerations</header><text>Historic average changes in the demographics of
the population covered that impact on the rate of growth of per capita health
care costs.</text>
</clause></subparagraph></paragraph><paragraph id="H0A37C8243F604FF2A26221D9AF38466B"><enum>(3)</enum><header>Bonus premium
percentage defined</header>
<subparagraph display-inline="no-display-inline" id="HB14DAE32C7154C2E992421F7FAB75252"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>bonus premium percentage</term> means, for the small
group market or individual market in a State for a year, such percentage as
determined in accordance with the following table based on the State’s premium
performance level (as defined in subparagraph (B)) for such market and
year:</text>
<table align-to-level="section" blank-lines-before="1" colsep="1" frame="all" line-rules="all-gen" rowsep="1" rule-weights="4.4.4.4.4.0" table-template-name="Generic: 3 text, 1 num" table-type="">
<tgroup cols="4" grid-typeface="1.1" rowsep="1" thead-tbody-ldg-size="10.10.12"><colspec align="left" coldef="fig" colname="column1" colwidth="61pts" min-data-value="11"></colspec><colspec align="center" coldef="txt-no-ldr" colname="column2" colwidth="81pts" min-data-value="70"></colspec><colspec align="center" coldef="txt-no-ldr" colname="column3" colwidth="81pts" min-data-value="70"></colspec><colspec align="center" coldef="txt-no-ldr" colname="column4" colwidth="80pts" min-data-value="69"></colspec>
<thead>
<row><entry align="center" colname="column1" morerows="0" namest="column1">The bonus premium percentage for a State is—</entry><entry align="center" colname="column2" morerows="0" namest="column2">For year 3 if
the premium performance level of the State is—</entry><entry align="center" colname="column3" morerows="0" namest="column3">For year 6 if the premium
performance level of the State is—</entry><entry align="center" colname="column4" morerows="0" namest="column4">For year 9 if the premium
performance level of the State is—</entry>
</row>
</thead>
<tbody>
<row><entry colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr">100 percent </entry><entry colname="column2" leader-modify="clr-ldr">at least 8.5% </entry><entry colname="column3" leader-modify="clr-ldr">at least 11%</entry><entry colname="column4" leader-modify="clr-ldr">at least 13.5% </entry>
</row>
<row><entry align="left" colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">50 percent </entry><entry align="left" colname="column2" leader-modify="clr-ldr">at least 6.38%, but less
than 8.5%</entry><entry align="left" colname="column3" leader-modify="clr-ldr">at least 10.38%, but less than 11%</entry><entry align="right" colname="column4" leader-modify="clr-ldr">at least 12.88%, but
less than 13.5% </entry>
</row>
<row><entry align="left" colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">25 percent </entry><entry align="left" colname="column2" leader-modify="clr-ldr">at least 4.25%, but less
than 6.38% </entry><entry align="left" colname="column3" leader-modify="clr-ldr"> at least 9.75%, but less than 10.38% </entry><entry align="right" colname="column4" leader-modify="clr-ldr">at least 12.25%, but
less than 12.88% </entry>
</row>
<row><entry align="left" colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">0 percent</entry><entry align="left" colname="column2" leader-modify="clr-ldr">less than
4.25%</entry><entry align="left" colname="column3" leader-modify="clr-ldr">less
than 9.75%</entry><entry align="right" colname="column4" leader-modify="clr-ldr">less than 12.25%.</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph><subparagraph id="H3F4EABFF727140E9A062EA309700F864"><enum>(B)</enum><header>Premium
performance level</header><text display-inline="yes-display-inline">For
purposes of this subsection, the term <term>premium performance level</term>
means, for a State, market, and year, the percentage reduction in the average
per capita premiums for health insurance coverage for the State, market, and
year, as compared to the premium baseline for such State, market, and
year.</text>
</subparagraph></paragraph><paragraph id="HD31B0C47E57C47198C18266C1AA6488E"><enum>(4)</enum><header>Maximum State
premium payment amount defined</header><text>For purposes of this subsection,
the term <term>maximum State premium payment amount</term> means, for a State
for the small group market or the individual market for a year, the product
of—</text>
<subparagraph id="H22B93C1FCB674E8C9823A02611B686DD"><enum>(A)</enum><text>the proportion (as
determined by the Secretary), of the number of nonelderly individuals lawfully
residing in all the States who are enrolled in health insurance coverage in the
respective market in the year, who are residents of the State; and</text>
</subparagraph><subparagraph id="H57A515E3DF5D49938EAADEEB4E073C39"><enum>(B)</enum><text>the amount
available for obligation from amounts appropriated under subsection (d) for
such market with respect to performance in such year.</text>
</subparagraph></paragraph><paragraph id="HF4E7A1BA992744BCA2A6581387E33920"><enum>(5)</enum><header>Methodology for
calculating average per capita premiums</header>
<subparagraph id="H2CAB8AD8B2AD4A1098D0A57132301559"><enum>(A)</enum><header>Establishment</header><text>The
Secretary shall establish, by rule and consistent with this subsection, a
methodology for computing the average per capita premiums for health insurance
coverage for the small group market and for the individual market in each State
for each year beginning with year 1.</text>
</subparagraph><subparagraph id="HAC66C47D13804797A5A70345EB7483E9"><enum>(B)</enum><header>Adjustments</header><text display-inline="yes-display-inline">Under such methodology, the Secretary shall
provide for the following adjustments (in a manner determined appropriate by
the Secretary):</text>
<clause id="H17593009340E4E84B7E8063AEE74D2DA"><enum>(i)</enum><header>Exclusion of
illegal aliens</header><text>An adjustment so as not to take into account
enrollees who are not lawfully present in the United States and their premium
costs.</text>
</clause><clause id="H579B7262169242D6B077EC41E84B27ED"><enum>(ii)</enum><header>Treating State
premium subsidies as premium costs</header><text>An adjustment so as to
increase per capita premiums to remove the impact of premium subsidies made
directly by a State to reduce health insurance premiums.</text>
</clause></subparagraph></paragraph><paragraph id="HD00F0D7B777F45B491AC63D4BFA617C8"><enum>(6)</enum><header>Conditions of
payment</header><text>As a condition of receiving a payment under paragraph
(1), a State must agree to submit aggregate, non-individually identifiable data
to the Secretary, in a form and manner specified by the Secretary, for use by
the Secretary to determine the State’s premium baseline and premium performance
level for purposes of this subsection.</text>
</paragraph></subsection><subsection id="HE56A1567E6B146F0B4826D8D6C34CF0D"><enum>(b)</enum><header>Programs that
reduce the number of uninsured</header>
<paragraph id="H260D996815144C83BF31F88A8C357257"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If the Secretary
determines that a State has reduced the percentage of uninsured nonelderly
residents in year 5, year 7, or year 9, below the uninsured baseline (as
defined in paragraph (2)) for the State for the year, the Secretary shall pay
the State an amount equal to the product of—</text>
<subparagraph id="H0A730F799DCF414585FA00C590FF19A5"><enum>(A)</enum><text>bonus uninsured
percentage (as defined in paragraph (3)) for the State and year; and</text>
</subparagraph><subparagraph id="H7DCB3D07D7BA40E0AB6542F9F2D13831"><enum>(B)</enum><text>the maximum
uninsured payment amount (as defined in paragraph (4)) for the State and
year.</text>
</subparagraph></paragraph><paragraph id="H15326E9BDC0E4FF5A5BCAB4E1CC2435B"><enum>(2)</enum><header>Uninsured
baseline</header>
<subparagraph id="H7336A3B3D37F47C1AD87ACB2264E8E9A"><enum>(A)</enum><header>In
general</header><text>For purposes of this subsection, and subject to
subparagraph (B), the term <term>uninsured baseline</term> means, for a State,
the percentage of nonelderly residents in the State who are uninsured in year
1.</text>
</subparagraph><subparagraph id="H7C478642267E4DF69C79D88F5EA94BB6"><enum>(B)</enum><header>Adjustment</header><text>The
Secretary may, at the written request of a State, adjust the uninsured baseline
for States for a year to take into account unanticipated and exceptional
changes, such as an unanticipated migration, of nonelderly individuals into, or
out of, States in a manner that does not reflect substantially the proportion
of uninsured nonelderly residents in the States involved in year 1. Any such
adjustment shall only be done in a manner that does not result in the average
of the uninsured baselines for nonelderly residents for all States being
changed.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="HA4714999BD4C4B179E7EFCD2CD2BDD22"><enum>(3)</enum><header>Bonus uninsured
percentage</header>
<subparagraph id="HBD85B0557DCF47D2B22F0282C8932BA1"><enum>(A)</enum><header>Bonus uninsured
percentage</header><text display-inline="yes-display-inline">For purposes of
this subsection, the term <term>bonus uninsured percentage</term> means, for a
State for a year, such percentage as determined in accordance with the
following table, based on the uninsured performance level (as defined in
subparagraph (B)) for such State and year:</text>
<table align-to-level="section" blank-lines-before="1" colsep="1" frame="all" line-rules="all-gen" rowsep="1" rule-weights="4.4.4.4.4.0" table-template-name="Generic: 3 text, 1 num" table-type="">
<tgroup cols="4" grid-typeface="1.1" rowsep="1" thead-tbody-ldg-size="10.10.12"><colspec align="left" coldef="fig" colname="column1" colwidth="61pts" min-data-value="11"></colspec><colspec align="center" coldef="txt-no-ldr" colname="column2" colwidth="81pts" min-data-value="70"></colspec><colspec align="center" coldef="txt-no-ldr" colname="column3" colwidth="81pts" min-data-value="70"></colspec><colspec align="center" coldef="txt-no-ldr" colname="column4" colwidth="81pts" min-data-value="70"></colspec>
<thead>
<row><entry align="center" colname="column1" morerows="0" namest="column1">The bonus uninsured percentage for a State is—</entry><entry align="center" colname="column2" morerows="0" namest="column2">For year 5 if
the uninsured performance level of the State is—</entry><entry align="center" colname="column3" morerows="0" namest="column3">For year 7 if the uninsured
performance level of the State is—</entry><entry align="center" colname="column4" morerows="0" namest="column4">For year 9 if the uninsured
performance level of the State is—</entry>
</row>
</thead>
<tbody>
<row><entry align="left" colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">100 percent </entry><entry align="left" colname="column2" leader-modify="clr-ldr">at least 10%
</entry><entry align="left" colname="column3" leader-modify="clr-ldr">at least
15%</entry><entry colname="column4" leader-modify="clr-ldr" rowsep="1">at least
20% </entry>
</row>
<row><entry align="left" colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">50 percent </entry><entry align="left" colname="column2" leader-modify="clr-ldr">at least 7.5% but less
than 10%</entry><entry align="left" colname="column3" leader-modify="clr-ldr">at least 13.75% but less than 15% </entry><entry align="right" colname="column4" leader-modify="clr-ldr">at least 18.75% but
less than 20%</entry>
</row>
<row><entry align="left" colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">25 percent </entry><entry align="left" colname="column2" leader-modify="clr-ldr">at least 5% but less
than 7.5%</entry><entry align="left" colname="column3" leader-modify="clr-ldr">at
least 12.5% but less than 13.75%</entry><entry align="right" colname="column4" leader-modify="clr-ldr">at least 17.5% but less than 18.75%</entry>
</row>
<row><entry align="left" colname="column1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">0 percent</entry><entry align="left" colname="column2" leader-modify="clr-ldr">less than
5%</entry><entry align="left" colname="column3" leader-modify="clr-ldr">less
than 12.5%</entry><entry align="right" colname="column4" leader-modify="clr-ldr">less than 17.5%.</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph><subparagraph id="HD25A4A373AD441A4B68950AFCD65AF6F"><enum>(B)</enum><header>Uninsured
performance level</header><text display-inline="yes-display-inline">For
purposes of this subsection, the term <term>uninsured performance level</term>
means, for a State for a year, the reduction (expressed as a percentage) in the
percentage of uninsured nonelderly residents in such State in the year as
compared to the uninsured baseline for such State for such year.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H38531ACF10E44BBFB2CFBDC24FB048EB"><enum>(4)</enum><header>Maximum State
uninsured payment amount defined</header><text>For purposes of this subsection,
the term <term>maximum State uninsured payment amount</term> means, for a State
for a year, the product of—</text>
<subparagraph id="HA023125576E64BFAAA8E15B7996FBEFE"><enum>(A)</enum><text>the proportion (as
determined by the Secretary), of the number of uninsured nonelderly individuals
lawfully residing in all the States in the year, who are residents of the
State; and</text>
</subparagraph><subparagraph id="H2237E6E25FDC4B298D9CDFC59080DBFA"><enum>(B)</enum><text>the amount
available for obligation under this subsection from amounts appropriated under
subsection (d) with respect to performance in such year.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H1CD08F7C1B29466A8DDE8C40DB51D694"><enum>(5)</enum><header>Methodology for
computing the percentage of uninsured nonelderly residents in a State</header>
<subparagraph id="H37E692A03190477D8DA9471CAEA8FB65"><enum>(A)</enum><header>Establishment</header><text>The
Secretary shall establish, by rule and consistent with this subsection, a
methodology for computing the percentage of nonelderly residents in a State who
are uninsured in each year beginning with year 1.</text>
</subparagraph><subparagraph id="H220C85357E1F417CB983E2EE9E87B9DC"><enum>(B)</enum><header>Rules</header>
<clause id="H41049C72094D46CBB6A8916900664FD1"><enum>(i)</enum><header>Treatment of
uninsured</header><text display-inline="yes-display-inline">Such methodology
shall treat as uninsured those residents who do not have health insurance
coverage or other creditable coverage (as defined in section 9801(c)(1) of the
Internal Revenue Code of 1986), except that such methodology shall rely upon
data on the nonelderly and uninsured populations within each State in such year
provided through population surveys conducted by federal agencies.</text>
</clause><clause id="H3182028EBFCB4AE8B203777BCDD5E4EA"><enum>(ii)</enum><header>Limitation to
nonelderly</header><text>Such methodology shall exclude individuals who are 65
years of age or older.</text>
</clause><clause id="H13573010E8CD4847967B5A6E1B2DE233"><enum>(iii)</enum><header>Exclusion of
illegal aliens</header><text display-inline="yes-display-inline">Such
methodology shall exclude individuals not lawfully present in the United
States.</text>
</clause></subparagraph></paragraph><paragraph id="HB2A61EC132B0496DBF29F39AE60392CE"><enum>(6)</enum><header>Conditions of
payment</header><text display-inline="yes-display-inline">As a condition of
receiving a payment under paragraph (1), a State must agree to submit
aggregate, non-individually identifiable data to the Secretary, in a form and
manner specified by the Secretary, for use by the Secretary in determining the
State’s uninsured baseline and uninsured performance level for purposes of this
subsection.</text>
</paragraph></subsection><subsection id="HCEA8FB3842354525BAE48376ACE41EFE"><enum>(c)</enum><header>Definitions</header><text>For
purposes of this section:</text>
<paragraph id="HE4A2188546D54212BE5D2C051344AA02"><enum>(1)</enum><header>Group health
plan</header><text>The term <term>group health plan</term> has the meaning
given such term in section 9832(a) of the Internal Revenue Code of 1986.</text>
</paragraph><paragraph id="HCF5F9FE0402646D58E2E87FF2ADB2F53"><enum>(2)</enum><header>Health insurance
coverage</header><text>The term <term>health insurance coverage</term> has the
meaning given such term in section 9832(b)(1) of the Internal Revenue Code of
1986.</text>
</paragraph><paragraph id="H0763C1D6CD5B4C8B9D34111A00510F2E"><enum>(3)</enum><header>Individual
market</header><text>Except as the Secretary may otherwise provide in the case
of group health plans that have fewer than 2 participants as current employees
on the first day of a plan year, the term <term>individual market</term> means
the market for health insurance coverage offered to individuals other than in
connection with a group health plan.</text>
</paragraph><paragraph id="H256B7C02D4EB4311BF7D920173F4E982"><enum>(4)</enum><header>Secretary</header><text>The
term <term>Secretary</term> means the Secretary of Health and Human
Services.</text>
</paragraph><paragraph id="H90D6663C9E554EA7AA987EDCD71223E1"><enum>(5)</enum><header>Small group
market</header><text>The term <term>small group market</term> means the market
for health insurance coverage under which individuals obtain health insurance
coverage (directly or through any arrangement) on behalf of themselves (and
their dependents) through a group health plan maintained by an employer who
employed on average at least 2 but not more than 50 employees on business days
during a calendar year.</text>
</paragraph><paragraph id="H4501E6D6DDCA45F1AF85B1D47B6115D6"><enum>(6)</enum><header>State</header><text display-inline="yes-display-inline">The term <term>State</term> means any of
the 50 States and the District of Columbia.</text>
</paragraph><paragraph id="H2E86E636F3D64D2DB37C6361927B6D5B"><enum>(7)</enum><header>Years</header><text>The
terms <term>year 1</term>, <term>year 2</term>, <term>year 3</term>, and
similar subsequently numbered years mean 2012, 2013, 2014, and subsequent
sequentially numbered years.</text>
</paragraph></subsection><subsection id="H7702D90A734D4B57B127126AD2A0CC8D"><enum>(d)</enum><header>Appropriations;
payments</header>
<paragraph id="H06C2E92193834D7E99BB1DD70901364F"><enum>(1)</enum><header>Payments for
reductions in cost of health insurance coverage</header>
<subparagraph id="HF73955A235C94951907E65188CF8C886"><enum>(A)</enum><header>Small group
market</header>
<clause id="H43EC00B4C8C542E2A5A7C211FB2C47E1"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">From any funds in the
Treasury not otherwise appropriated, there is appropriated for payments under
subsection (a)(1)(A)—</text>
<subclause display-inline="no-display-inline" id="H1CF77EAD54B7489ABFAD825E915D9F1F"><enum>(I)</enum><text display-inline="yes-display-inline">$18,000,000,000 with respect to performance
in year 3;</text>
</subclause><subclause id="H5472D79C923C418EB3B6D60B6D6AD566"><enum>(II)</enum><text display-inline="yes-display-inline">$5,000,000,000 with respect to performance
in year 6; and</text>
</subclause><subclause id="HB4F7D2BB83644BEF8BF8A02C3A13AA01"><enum>(III)</enum><text display-inline="yes-display-inline">$2,000,000,000 with respect to performance
in year 9.</text>
</subclause></clause><clause display-inline="no-display-inline" id="H42604089AC284DB0A9F5FD2203BFCB31"><enum>(ii)</enum><header>Availability of
appropriated funds</header><text>Funds appropriated under clause (i) shall
remain available until expended.</text>
</clause></subparagraph><subparagraph id="HF1B482474B794BFBBA6C01201115BC60"><enum>(B)</enum><header>Individual
market</header>
<clause id="HA20F90BA619B476D85AE4FBDE529BF4A"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to clause
(ii), from any funds in the Treasury not otherwise appropriated, there is
appropriated for payments under subsection (a)(1)(B)—</text>
<subclause id="HEE6CAC89CDD94DB69B54EB1F06563E63"><enum>(I)</enum><text>$7,000,000,000
with respect to performance in year 3;</text>
</subclause><subclause id="H3BC298D200D54BE9B451FE9E19AD8320"><enum>(II)</enum><text display-inline="yes-display-inline">$2,000,000,000 with respect to performance
in year 6; and</text>
</subclause><subclause id="H1DEE7F0284764BA6A098195DFCCEEC04"><enum>(III)</enum><text display-inline="yes-display-inline">$1,000,000,000 with respect to performance
in year 9.</text>
</subclause></clause><clause id="H1F704EC1039447F38979D07C29B8DB41"><enum>(ii)</enum><header>Availability of
appropriated funds</header><text display-inline="yes-display-inline">Of the
funds appropriated under clause (i) that are not expended or obligated by the
end of the year following the year for which the funds are appropriated—</text>
<subclause id="H697AF3C805AD4A8FACB163A727291E39"><enum>(I)</enum><text>75 percent shall
remain available until expended for payments under subsection (a)(1)(B);
and</text>
</subclause><subclause id="HC83A8111E5CC472A87506ADAD547164D"><enum>(II)</enum><text>25 percent shall
remain available until expended for payments under subsection (a)(1)(A).</text>
</subclause></clause></subparagraph></paragraph><paragraph id="HA1C94C35D0A043DBA2C00FFB3A6BDF02"><enum>(2)</enum><header>Payments for
reductions in the percentage of uninsured</header>
<subparagraph id="HECD4AD92321B4882B72AE14A7FB62778"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">From any funds in the
Treasury not otherwise appropriated, there is appropriated for payments under
subsection (b)(1)—</text>
<clause display-inline="no-display-inline" id="HF4451C81B4594E39B9FF577FE314374F"><enum>(i)</enum><text>$10,000,000,000
with respect to performance in year 5;</text>
</clause><clause id="HD6F5A9689D06486692E2A201BFD9A009"><enum>(ii)</enum><text display-inline="yes-display-inline">$3,000,000,000 with respect to performance
in year 7; and</text>
</clause><clause id="H5C35DD853CE84DC89CDA3CB6858B2270"><enum>(iii)</enum><text display-inline="yes-display-inline">$2,000,000,000 with respect to performance
in year 9.</text>
</clause></subparagraph><subparagraph display-inline="no-display-inline" id="HE6552A6641F042E6A09462A91C9DF31E"><enum>(B)</enum><header>Availability of
appropriated funds</header><text>Funds appropriated under subparagraph (A)
shall remain available until expended.</text>
</subparagraph></paragraph><paragraph id="H6C9343AFF3874468B0C61EB626772F69"><enum>(3)</enum><header>Payment
timing</header><text>Payments under this section shall be made in a form and
manner specified by the Secretary in the year after the performance year
involved.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="H371A1CE809794F7BA730BF3336C3CB07"><enum>612.</enum><header>Health plan
finders</header>
<subsection id="HD22474A34B4240F7B0A768C12F5C6B3D"><enum>(a)</enum><header>State plan
finders</header><text>Not later than 12 months after the date of the enactment
of this Act, each State may contract with a private entity to develop and
operate a plan finder website (referred to in this section as a <quote>State
plan finder</quote>) which shall provide information to individuals in such
State on plans of health insurance coverage that are available to individuals
in such State (in this section referred to as a <quote>health insurance
plan</quote>). Such State may not operate a plan finder itself.</text>
</subsection><subsection id="H63F9C2918C024A72B28B62D54ED50599"><enum>(b)</enum><header>Multi-State plan
finders</header>
<paragraph id="HFC98CD47305D4A7197B862BB42E1EE82"><enum>(1)</enum><header>In
general</header><text>A private entity may operate a multi-State finder that
operates under this section in the States involved in the same manner as a
State plan finder would operate in a single State.</text>
</paragraph><paragraph id="H6DFB67A4F5314C8F97768E1E990410A7"><enum>(2)</enum><header>Sharing of
information</header><text display-inline="yes-display-inline">States shall
regulate the manner in which data is shared between plan finders to ensure
consistency and accuracy in the information about health insurance plans
contained in such finders.</text>
</paragraph></subsection><subsection id="H834BD809A2AB4C1D956641614E9568B0"><enum>(c)</enum><header>Requirements for
plan finders</header><text>Each plan finder shall meet the following
requirements:</text>
<paragraph id="H7E4B5216B6D04D57B65167F6C8B7589E"><enum>(1)</enum><text>The plan finder
shall ensure that each health insurance plan in the plan finder meets the
requirements for such plans under subsection (d).</text>
</paragraph><paragraph id="H77CD5D2B4DE54C1DA105ECD44D4F56B9"><enum>(2)</enum><text>The plan finder
shall present complete information on the costs and benefits of health
insurance plans (including information on monthly premium, copayments, and
deductibles) in a uniform manner that—</text>
<subparagraph id="H2A3780FA9EF44481AD3E7260E0FE9F52"><enum>(A)</enum><text>uses the standard
definitions developed under paragraph (3); and</text>
</subparagraph><subparagraph id="H1E7A7A884FE7438F9FE41DD5B217226E"><enum>(B)</enum><text>is designed to
allow consumers to easily compare such plans.</text>
</subparagraph></paragraph><paragraph id="HD258A07CFA7E4783802D7382C3CDD8CD"><enum>(3)</enum><text>The plan finder
shall be available on the Internet and accessible to all individuals in the
State or, in the case of a multi-State plan finder, in all States covered by
the multi-State plan finder.</text>
</paragraph><paragraph id="HBF2E3655649941358E5984B1AEBE6B77"><enum>(4)</enum><text>The plan finder
shall allow consumers to search and sort data on the health insurance plans in
the plan finder on criteria such as coverage of specific benefits (such as
coverage of disease management services or pediatric care services), as well as
data available on quality.</text>
</paragraph><paragraph id="HF911AB295B9744C7AF679904AFEE6440"><enum>(5)</enum><text>The plan finder
shall meet all relevant State laws and regulations, including laws and
regulations related to the marketing of insurance products. In the case of a
multi-State plan finder, the finder shall meet such laws and regulations for
all of the States involved.</text>
</paragraph><paragraph id="H932EFE8721C54E2B95439576CF385786"><enum>(6)</enum><text display-inline="yes-display-inline">The plan finder shall meet solvency,
financial, and privacy requirements established by the State or States in which
the plan finder operates or the Secretary for multi-State finders.</text>
</paragraph><paragraph id="H0308A5EFE81F43528F3FDD94835211B6"><enum>(7)</enum><text>The plan finder
and the employees of the plan finder shall be appropriately licensed in the
State or States in which the plan finder operates, if such licensure is
required by such State or States.</text>
</paragraph><paragraph id="HF22161991FFA4DFAB7EC7E371FD51337"><enum>(8)</enum><text>Notwithstanding
subsection (f)(1), the plan finder shall assist individuals who are eligible
for the Medicaid program under title XIX of the Social Security Act or State
Children’s Health Insurance Program under title XXI of such Act by including
information on Medicaid options, eligibility, and how to enroll.</text>
</paragraph></subsection><subsection id="HAC994156DB6945CBBD9A34CFEC46A5AB"><enum>(d)</enum><header>Requirements for
plans participating in a plan finder</header>
<paragraph id="H9244AF81E39947F7B89CA1DC15C42C1D"><enum>(1)</enum><header>In
general</header><text>Each State shall ensure that health insurance plans
participating in the State plan finder or in a multi-State plan finder meet the
requirements of paragraph (2) (relating to adequacy of insurance coverage,
consumer protection, and financial strength).</text>
</paragraph><paragraph id="HEACEF0994BD34280A088374E4217A772"><enum>(2)</enum><header>Specific
requirements</header><text>In order to participate in a plan finder, a health
insurance plan must meet all of the following requirements, as determined by
each State in which such plan operates:</text>
<subparagraph id="H84B06A18492C47E2A1C2734DDE779628"><enum>(A)</enum><text>The health
insurance plan shall be actuarially sound.</text>
</subparagraph><subparagraph id="HD2ABB8864502435EA52A6E2740301D43"><enum>(B)</enum><text display-inline="yes-display-inline">The health insurance plan may not have a
history of abusive policy rescissions.</text>
</subparagraph><subparagraph id="H35C4634E699C4499815542D64EBF4A93"><enum>(C)</enum><text display-inline="yes-display-inline">The health insurance plan shall meet
financial and solvency requirements.</text>
</subparagraph><subparagraph id="H10594D8D13E649D09A0020C8D6AA55DA"><enum>(D)</enum><text display-inline="yes-display-inline">The health insurance plan shall
disclose—</text>
<clause id="HFB4C24CDD7564C64B276A71B893AEB63"><enum>(i)</enum><text>all
financial arrangements involving the sale and purchase of health insurance,
such as the payment of fees and commissions; and</text>
</clause><clause id="H21A89BEE5DB547B58346DDEAEA75E963"><enum>(ii)</enum><text>such arrangements
may not be abusive.</text>
</clause></subparagraph><subparagraph id="HA2F0F89B898C492D9FADF9282682405C"><enum>(E)</enum><text display-inline="yes-display-inline">The health insurance plan shall maintain
electronic health records that comply with the requirements of the American
Recovery and Reinvestment Act of 2009 (Public Law 111–5) related to electronic
health records.</text>
</subparagraph><subparagraph id="HF63F74E9349F4EEBA23244210A26B391"><enum>(F)</enum><text>The health
insurance plan shall make available to plan enrollees via the finder, whether
by information provided to the finder or by a website link directing the
enrollee from the finder to the health insurance plan website, data that
includes the price and cost to the individual of services offered by a provider
according to the terms and conditions of the health plan. Data described in
this paragraph is not made public by the finder, only made available to the
individual once enrolled in the health plan.</text>
</subparagraph></paragraph></subsection><subsection id="H925851AB693A498B8D31883719F93912"><enum>(e)</enum><header>Prohibitions</header>
<paragraph id="HDEDB0F2A6117464C90B33F5B5F2ACE48"><enum>(1)</enum><header>Direct
Enrollment</header><text>The State plan finder may not directly enroll
individuals in health insurance plans.</text>
</paragraph><paragraph id="H5EBCC5A5F793406B8104D1E8B4D4A57C"><enum>(2)</enum><header>Conflicts of
interest</header>
<subparagraph id="H7C5B67E5377F4D0FAAAB63BFF01C9E9C"><enum>(A)</enum><header>Companies</header><text>A
health insurance issuer offering a health insurance plan through a plan finder
may not—</text>
<clause id="H7F3F8EF309814337862F06422227A912"><enum>(i)</enum><text>be
the private entity developing and maintaining a plan finder under subsections
(a) and (b); or</text>
</clause><clause id="HEC9EDD82F3B2428F8936053C3B0B2564"><enum>(ii)</enum><text>have an ownership
interest in such private entity or in the plan finder.</text>
</clause></subparagraph><subparagraph id="H7BD5BF714E044FC39A7E196BC28B07A6"><enum>(B)</enum><header>Individuals</header><text display-inline="yes-display-inline">An individual employed by a health
insurance issuer offering a health insurance plan through a plan finder may not
serve as a director or officer for—</text>
<clause id="H85759327C75341229C481C7C45DC57A0"><enum>(i)</enum><text>the
private entity developing and maintaining a plan finder under subsections (a)
and (b); or</text>
</clause><clause id="H9C17F8C84A3E471B9E9F2DBCC9C25FFE"><enum>(ii)</enum><text>the
plan finder.</text>
</clause></subparagraph></paragraph></subsection><subsection id="HA384718733F34385ABE54C8B4801A3D8"><enum>(f)</enum><header>Construction</header><text>Nothing
in this section shall be construed to allow the Secretary authority to regulate
benefit packages or to prohibit health insurance brokers and agents
from—</text>
<paragraph id="H2E102D5DC8964972815825BE0248C006"><enum>(1)</enum><text>utilizing the plan
finder for any purpose; or</text>
</paragraph><paragraph id="H6EEF939198FF49FB8352E953BD27FBBC"><enum>(2)</enum><text>marketing or
offering health insurance products.</text>
</paragraph></subsection><subsection id="H9E24618D034A45998197F0ECF302C693"><enum>(g)</enum><header>Plan finder
defined</header><text display-inline="yes-display-inline">For purposes of this
section, the term <term>plan finder</term> means a State plan finder under
subsection (a) or a multi-State plan finder under subsection (b).</text>
</subsection><subsection id="H8EFAD807F8734D5191AAEC79C0ECD707"><enum>(h)</enum><header>State
defined</header><text>In this section, the term <term>State</term> has the
meaning given such term for purposes of title XIX of the Social Security
Act.</text>
</subsection></section><section display-inline="no-display-inline" id="H7A2F0EA845B84061A2FD0A56D7C17D95" section-type="subsequent-section"><enum>613.</enum><header>Administrative
simplification</header>
<subsection id="HAA31AC044B5142BEB80FF0A1353AC7BB"><enum>(a)</enum><header>Operating Rules
for Health Information Transactions</header>
<paragraph id="HB5A0D09AB00A454DA7FA73E2E450B912"><enum>(1)</enum><header>Definition of
operating rules</header><text>Section 1171 of the Social Security Act (42
U.S.C. 1320d) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HEAB73CBFA0544655AA32BDC0BF31F2D9" style="OLC">
<paragraph id="H55459E35D03C46F7AACC837F82277434"><enum>(9)</enum><header>Operating
rules</header><text>The term <term>operating rules</term> means the necessary
business rules and guidelines for the electronic exchange of information that
are not defined by a standard or its implementation specifications as adopted
for purposes of this
part.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HF760700E42CC4AD3B058815A9811F775"><enum>(2)</enum><header>Operating rules
and compliance</header><text>Section 1173 of the Social Security Act (42 U.S.C.
1320d–2) is amended—</text>
<subparagraph id="H3D67FD9690EA4AE7B49F45B2996687F0"><enum>(A)</enum><text>in subsection
(a)(2), by adding at the end the following new subparagraph:</text>
<quoted-block act-name="" id="HE36A01FB5B644D478D8AEC0AA8FAB2EA" style="OLC">
<subparagraph id="H84A1674E8EC64DA49ABE2A30D4C080C7"><enum>(J)</enum><text>Electronic funds
transfers.</text>
</subparagraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="HA10B8088972841BDBE9B8611432B27E0"><enum>(B)</enum><text>by adding at the
end the following new subsections:</text>
<quoted-block act-name="" id="H30B83C93A531402C8F7DAE72BB068CB7" style="traditional">
<subsection id="H4034BA7270B5498BA45E8DEB49C6DE74"><enum>(g)</enum><header>Operating
rules</header>
<paragraph id="H820F764D2BA7458C99785714A5857193"><enum>(1)</enum><header>In
general</header><text>The Secretary shall adopt a single set of operating rules
for each transaction described in subsection (a)(2) with the goal of creating
as much uniformity in the implementation of the electronic standards as
possible. Such operating rules shall be consensus-based and reflect the
necessary business rules affecting health plans and health care providers and
the manner in which they operate pursuant to standards issued under Health
Insurance Portability and Accountability Act of 1996.</text>
</paragraph><paragraph id="H91FF9044979849CD93E16A9FAAEA1812"><enum>(2)</enum><header>Operating rules
development</header><text>In adopting operating rules under this subsection,
the Secretary shall rely on recommendations for operating rules developed by a
qualified nonprofit entity, as selected by the Secretary, that meets the
following requirements:</text>
<subparagraph id="H976E75CDA0114B36A59F5223BB1F2097"><enum>(A)</enum><text>The entity focuses
its mission on administrative simplification.</text>
</subparagraph><subparagraph commented="no" id="H4C6FF93FB61E424F8CB46CDA91F999A5"><enum>(B)</enum><text>The entity
demonstrates an established multi-stakeholder and consensus-based process for
development of operating rules, including representation by or participation
from health plans, health care providers, vendors, relevant Federal agencies,
and other standard development organizations.</text>
</subparagraph><subparagraph id="HC41A1293EB934E61ABB69C1FDCC397DF"><enum>(C)</enum><text>The entity has
established a public set of guiding principles that ensure the operating rules
and process are open and transparent.</text>
</subparagraph><subparagraph id="HEF3DF960206A4C87BB015D1EC3FE6CDA"><enum>(D)</enum><text>The entity
coordinates its activities with the HIT Policy Committee and the HIT Standards
Committee (as established under title XXX of the Public Health Service Act) and
complements the efforts of the Office of the National Healthcare Coordinator
and its related health information exchange goals.</text>
</subparagraph><subparagraph id="H979A903F7A9F4F0D94F4B45F75EC2E8E"><enum>(E)</enum><text>The entity
incorporates national standards, including the transaction standards issued
under Health Insurance Portability and Accountability Act of 1996.</text>
</subparagraph><subparagraph id="HC40C4FC42D06435A91F27919D15B0015"><enum>(F)</enum><text>The entity
supports nondiscrimination and conflict of interest policies that demonstrate a
commitment to open, fair, and nondiscriminatory practices.</text>
</subparagraph><subparagraph id="H680CD66AAFBE407798ADC54C5CDBA376"><enum>(G)</enum><text>The entity allows
for public review and updates of the operating rules.</text>
</subparagraph></paragraph><paragraph id="H327EE0FA5ED64EDCA05FEEE31118A9CD"><enum>(3)</enum><header>Review and
recommendations</header><text>The National Committee on Vital and Health
Statistics shall—</text>
<subparagraph id="HAFA78CE65B5842979E42B68E90599253"><enum>(A)</enum><text>review the
operating rules developed by a nonprofit entity described under paragraph
(2);</text>
</subparagraph><subparagraph id="H285EAC74640E40C2AE74AE7D2E5D7D26"><enum>(B)</enum><text>determine whether
such rules represent a consensus view of the health care industry and are
consistent with and do not alter current standards;</text>
</subparagraph><subparagraph id="H325A16F6E397460A868E2AE96B7BEA75"><enum>(C)</enum><text>evaluate whether
such rules are consistent with electronic standards adopted for health
information technology; and</text>
</subparagraph><subparagraph id="H15B341F8DD3D48AD9FA26DF68AF3FDC7"><enum>(D)</enum><text>submit to the
Secretary a recommendation as to whether the Secretary should adopt such
rules.</text>
</subparagraph></paragraph><paragraph id="H5218829F44A34B09B932DF0E7702B398"><enum>(4)</enum><header>Implementation</header>
<subparagraph id="H727798B13AC14835BB98CE1F24FAB072"><enum>(A)</enum><header>In
general</header><text>The Secretary shall adopt operating rules under this
subsection, by regulation in accordance with subparagraph (C), following
consideration of the rules developed by the non-profit entity described in
paragraph (2) and the recommendation submitted by the National Committee on
Vital and Health Statistics under paragraph (3)(D) and having ensured
consultation with providers.</text>
</subparagraph><subparagraph id="H9DD6131E65104B2A820297963DDE7588"><enum>(B)</enum><header>Adoption
requirements; effective dates</header>
<clause id="HE8FE50F5ACA846A490C704F30AFD5078"><enum>(i)</enum><header>Eligibility for
a health plan and health claim status</header><text>The set of operating rules
for transactions for eligibility for a health plan and health claim status
shall be adopted not later than July 1, 2013, in a manner ensuring that such
rules are effective not later than January 1, 2015, and may allow for the use
of a machine readable identification card.</text>
</clause><clause id="H38EE0BFF610E405192FB75EFF3F10751"><enum>(ii)</enum><header>Electronic
funds transfers and health care payment and remittance advice</header><text>The
set of operating rules for electronic funds transfers and health care payment
and remittance advice shall be adopted not later than July 1, 2014, in a manner
ensuring that such rules are effective not later than January 1, 2016.</text>
</clause><clause id="HAA82551A0F5C4152843384674D0E10FB"><enum>(iii)</enum><header>Other
completed transactions</header><text>The set of operating rules for the
remainder of the completed transactions described in subsection (a)(2),
including health claims or equivalent encounter information, enrollment and
disenrollment in a health plan, health plan premium payments, and referral
certification and authorization, shall be adopted not later than July 1, 2016,
in a manner ensuring that such rules are effective not later than January 1,
2018.</text>
</clause></subparagraph><subparagraph id="HACF7AE93E3D54D17BB79BCA48C9F6837"><enum>(C)</enum><header>Expedited
rulemaking</header><text>The Secretary shall promulgate an interim final rule
applying any standard or operating rule recommended by the National Committee
on Vital and Health Statistics pursuant to paragraph (3). The Secretary shall
accept public comments on any interim final rule published under this
subparagraph for 60 days after the date of such publication.</text>
</subparagraph></paragraph></subsection><subsection id="H4652D4582C7B4DA191DA86F5CCD03CE6"><enum>(h)</enum><header>Compliance</header>
<paragraph id="HD2546942CEC8430F9E7FA593D868478E"><enum>(1)</enum><header>Health plan
certification</header>
<subparagraph id="H9C9BB91A8CBB418B868DFD2B2871023D"><enum>(A)</enum><header>Eligibility for
a health plan, health claim status, electronic funds transfers, health care
payment and remittance advice</header><text>Not later than December 31, 2015, a
health plan shall file a statement with the Secretary, in such form as the
Secretary may require, certifying that the data and information systems for
such plan are in compliance with any applicable standards (as described under
paragraph (7) of section 1171) and operating rules (as described under
paragraph (9) of such section) for electronic funds transfers, eligibility for
a health plan, health claim status, and health care payment and remittance
advice, respectively.</text>
</subparagraph><subparagraph id="H6CF5AE3C0B494E9D8863A1FE7029D53B"><enum>(B)</enum><header>Other completed
transactions</header><text>Not later than December 31, 2017, a health plan
shall file a statement with the Secretary, in such form as the Secretary may
require, certifying that the data and information systems for such plan are in
compliance with any applicable standards and operating rules for the remainder
of the completed transactions described in subsection (a)(2), including health
claims or equivalent encounter information, enrollment and disenrollment in a
health plan, health plan premium payments, and referral certification and
authorization, respectively. A health plan shall provide the same level of
documentation to certify compliance with such transactions as is required to
certify compliance with the transactions specified in subparagraph (A).</text>
</subparagraph></paragraph><paragraph id="H8F2D3433C32F409BABDB390A0191830B"><enum>(2)</enum><header>Documentation of
compliance</header><text>A health plan shall provide the Secretary, in such
form as the Secretary may require, with adequate documentation of compliance
with the standards and operating rules described under paragraph (1). A health
plan shall not be considered to have provided adequate documentation and shall
not be certified as being in compliance with such standards, unless the health
plan—</text>
<subparagraph id="H0BBDEF20AF144CDBB0644DE05681158C"><enum>(A)</enum><text>demonstrates to
the Secretary that the plan conducts the electronic transactions specified in
paragraph (1) in a manner that fully complies with the regulations of the
Secretary; and</text>
</subparagraph><subparagraph id="H8243CBEB75F949C38121B7EDEDD83E58"><enum>(B)</enum><text>provides
documentation showing that the plan has completed end-to-end testing for such
transactions with their partners, such as hospitals and physicians.</text>
</subparagraph></paragraph><paragraph id="H3CD0260B58F5413B8B7072F8A472B9CA"><enum>(3)</enum><header>Service
contracts</header><text>A health plan shall be required to comply with any
applicable certification and compliance requirements (and provide the Secretary
with adequate documentation of such compliance) under this subsection for any
entities that provide services pursuant to a contract with such health
plan.</text>
</paragraph><paragraph id="H88699E0B5DA5424490C7112A0C704095"><enum>(4)</enum><header>Certification by
outside entity</header><text>The Secretary may contract with an independent,
outside entity to certify that a health plan has complied with the requirements
under this subsection, provided that the certification standards employed by
such entities are in accordance with any standards or rules issued by the
Secretary.</text>
</paragraph><paragraph id="H09FB2B3D5EF14F9DBA159009DA48DA52"><enum>(5)</enum><header>Compliance with
revised standards and rules</header><text>A health plan (including entities
described under paragraph (3)) shall comply with the certification and
documentation requirements under this subsection for any interim final rule
promulgated by the Secretary under subsection (i) that amends any standard or
operating rule described under paragraph (1) of this subsection. A health plan
shall comply with such requirements not later than the effective date of the
applicable interim final rule.</text>
</paragraph><paragraph commented="no" id="HA28D8DA08DB54D04937673FCE6587A37"><enum>(6)</enum><header>Audits of health
plans</header><text>The Secretary shall conduct periodic audits to ensure that
health plans (including entities described under paragraph (3)) are in
compliance with any standards and operating rules that are described under
paragraph (1).</text>
</paragraph></subsection><subsection id="H2ED187FC534B4ACF94C70AAD0AAB03EF"><enum>(i)</enum><header>Review and
amendment of standards and rules</header>
<paragraph id="HB4F8FEDEE5654716A996CC9EB0BCCDBC"><enum>(1)</enum><header>Establishment</header><text>Not
later than January 1, 2016, the Secretary shall establish a review committee
(as described under paragraph (4)).</text>
</paragraph><paragraph id="HC28F076D844B4F4F848DB7131EF5861F"><enum>(2)</enum><header>Evaluations and
Reports</header>
<subparagraph id="H7FF067690FB9419D908DCEEC3C102AD1"><enum>(A)</enum><header>Hearings</header><text>Not
later than April 1, 2016, and not less than biennially thereafter, the
Secretary, acting through the review committee, shall conduct hearings to
evaluate and review the existing standards and operating rules established
under this section.</text>
</subparagraph><subparagraph id="H541682AE19754165B61370012FC19F5D"><enum>(B)</enum><header>Report</header><text>Not
later than July 1, 2016, and not less than biennially thereafter, the review
committee shall provide recommendations for updating and improving such
standards and rules. The review committee shall recommend a single set of
operating rules per transaction standard and maintain the goal of creating as
much uniformity as possible in the implementation of the electronic
standards.</text>
</subparagraph></paragraph><paragraph id="HAAE9D6FDFFA04CED91C4CC2660D574C7"><enum>(3)</enum><header>Interim final
rulemaking</header>
<subparagraph id="H1227F375B8DE4699A624B6FBDDCB47BA"><enum>(A)</enum><header>In
general</header><text>Any recommendations to amend existing standards and
operating rules that have been approved by the review committee and reported to
the Secretary under paragraph (2)(B) shall be adopted by the Secretary through
promulgation of an interim final rule not later than 90 days after receipt of
the committee's report.</text>
</subparagraph><subparagraph id="H02D31032387749E9903F01D51A2A925D"><enum>(B)</enum><header>Public
comment</header>
<clause id="H813C09F919634595A6F8F45A657D15D1"><enum>(i)</enum><header>Public comment
period</header><text>The Secretary shall accept public comments on any interim
final rule published under this paragraph for 60 days after the date of such
publication.</text>
</clause><clause id="H1104354CAE104C89B516313B572EFE9A"><enum>(ii)</enum><header>Effective
date</header><text>The effective date of any amendment to existing standards or
operating rules that is adopted through an interim final rule published under
this paragraph shall be 25 months following the close of such public comment
period.</text>
</clause></subparagraph></paragraph><paragraph id="H55ECCFA6539A4099B279136AE17A85BA"><enum>(4)</enum><header>Review
committee</header>
<subparagraph id="H7FE4967F030F47EA95FEA79A13408B56"><enum>(A)</enum><header>Definition</header><text>For
the purposes of this subsection, the term <term>review committee</term> means a
committee within the Department of Health and Human services that has been
designated by the Secretary to carry out this subsection, including—</text>
<clause id="HECF3C977492648049EAB98081D054271"><enum>(i)</enum><text>the National
Committee on Vital and Health Statistics; or</text>
</clause><clause id="HA419234DCEA744F682B9D3E4A106D0DD"><enum>(ii)</enum><text>any appropriate
committee as determined by the Secretary.</text>
</clause></subparagraph><subparagraph id="HAC76DCE9A2474709AB4E99B06E807A87"><enum>(B)</enum><header>Coordination of
HIT Standards</header><text>In developing recommendations under this
subsection, the review committee shall consider the standards approved by the
Office of the National Coordinator for Health Information Technology.</text>
</subparagraph></paragraph></subsection><subsection id="H03389CA563854CE282C58A297EA4DCC5"><enum>(j)</enum><header>Penalties</header>
<paragraph id="HC8414F56C79B4501813217B3C30415DD"><enum>(1)</enum><header>Penalty
fee</header>
<subparagraph id="H87A01C8E90C5445D9741226E60025902"><enum>(A)</enum><header>In
general</header><text>Not later than April 1, 2016, and annually thereafter,
the Secretary shall assess a penalty fee (as determined under subparagraph (B))
against a health plan that has failed to meet the requirements under subsection
(h) with respect to certification and documentation of compliance with the
standards (and their operating rules) as described under paragraph (1) of such
subsection.</text>
</subparagraph><subparagraph id="H7860B2A1D8ED406A8C8D572FFCF69FB3"><enum>(B)</enum><header>Fee
amount</header><text>Subject to subparagraphs (C), (D), and (E), the Secretary
shall assess a penalty fee against a health plan in the amount of $1 per
covered life until certification is complete. The penalty shall be assessed per
person covered by the plan for which its data systems for major medical
policies are not in compliance and shall be imposed against the health plan for
each day that the plan is not in compliance with the requirements under
subsection (h).</text>
</subparagraph><subparagraph id="H20AA369C0A5C46EC80962F08C5ADFF67"><enum>(C)</enum><header>Additional
penalty for misrepresentation</header><text>A health plan that knowingly
provides inaccurate or incomplete information in a statement of certification
or documentation of compliance under subsection (h) shall be subject to a
penalty fee that is double the amount that would otherwise be imposed under
this subsection.</text>
</subparagraph><subparagraph id="HBB15B78B41CE4E07A3A1D385031AC57B"><enum>(D)</enum><header>Annual fee
increase</header><text>The amount of the penalty fee imposed under this
subsection shall be increased on an annual basis by the annual percentage
increase in total national health care expenditures, as determined by the
Secretary.</text>
</subparagraph><subparagraph id="H74532B41F14E4E2C8DCEAC22CAE90A1A"><enum>(E)</enum><header>Penalty
limit</header><text>A penalty fee assessed against a health plan under this
subsection shall not exceed, on an annual basis—</text>
<clause id="HB79C4F24BB144BA594D705EDF2C2B8F8"><enum>(i)</enum><text>an
amount equal to $20 per covered life under such plan; or</text>
</clause><clause id="H8522FA386C7342C296D59E2CAB9B8DB7"><enum>(ii)</enum><text>an amount equal
to $40 per covered life under the plan if such plan has knowingly provided
inaccurate or incomplete information (as described under subparagraph
(C)).</text>
</clause></subparagraph><subparagraph id="H9B988CBB11574B32B9743C5FDA81DAD5"><enum>(F)</enum><header>Determination of
covered individuals</header><text>The Secretary shall determine the number of
covered lives under a health plan based upon the most recent statements and
filings that have been submitted by such plan to the Securities and Exchange
Commission.</text>
</subparagraph></paragraph><paragraph id="H19A5DBD0512940C98F65A7E14ADA0A58"><enum>(2)</enum><header>Notice and
Dispute Procedure</header><text>The Secretary shall establish a procedure for
assessment of penalty fees under this subsection that provides a health plan
with reasonable notice and a dispute resolution procedure prior to provision of
a notice of assessment by the Secretary of the Treasury (as described under
paragraph (4)(B)).</text>
</paragraph><paragraph id="HA87B798DFE624DD4BB30889D9A78FD71"><enum>(3)</enum><header>Penalty fee
report</header><text>Not later than May 1, 2016, and annually thereafter, the
Secretary shall provide the Secretary of the Treasury with a report identifying
those health plans that have been assessed a penalty fee under this
subsection.</text>
</paragraph><paragraph id="HECAB79EAAC1E406B89E6734EE2399E94"><enum>(4)</enum><header>Collection of
penalty fee</header>
<subparagraph id="H44316D649F0C4D3A97AC954A0363C519"><enum>(A)</enum><header>In
General</header><text>The Secretary of the Treasury, acting through the
Financial Management Service, shall administer the collection of penalty fees
from health plans that have been identified by the Secretary in the penalty fee
report provided under paragraph (3).</text>
</subparagraph><subparagraph id="H1F3301809D7C43A9808BC603B7AD6733"><enum>(B)</enum><header>Notice</header><text>Not
later than August 1, 2016, and annually thereafter, the Secretary of the
Treasury shall provide notice to each health plan that has been assessed a
penalty fee by the Secretary under this subsection. Such notice shall include
the amount of the penalty fee assessed by the Secretary and the due date for
payment of such fee to the Secretary of the Treasury (as described in
subparagraph (C)).</text>
</subparagraph><subparagraph id="H71FB468A2FCE4630B714D195513F83BD"><enum>(C)</enum><header>Payment due
date</header><text>Payment by a health plan for a penalty fee assessed under
this subsection shall be made to the Secretary of the Treasury not later than
November 1, 2016, and annually thereafter.</text>
</subparagraph><subparagraph id="HDFF49217CEB54FB8B83E36A2770D46C4"><enum>(D)</enum><header>Unpaid penalty
fees</header><text>Any amount of a penalty fee assessed against a health plan
under this subsection for which payment has not been made by the due date
provided under subparagraph (C) shall be—</text>
<clause id="HD0A9CAEE33A043E58FF92A8EA3C608B9"><enum>(i)</enum><text>increased by the
interest accrued on such amount, as determined pursuant to the underpayment
rate established under section 6601 of the Internal Revenue Code of 1986;
and</text>
</clause><clause id="HE82C43C8ED0F46C49557E835B2D58452"><enum>(ii)</enum><text>treated as a
past-due, legally enforceable debt owed to a Federal agency for purposes of
section 6402(d) of the Internal Revenue Code of 1986.</text>
</clause></subparagraph><subparagraph id="H422CD981F46446D9AD693AD7692F9189"><enum>(E)</enum><header>Administrative
fees</header><text>Any fee charged or allocated for collection activities
conducted by the Financial Management Service will be passed on to a health
plan on a pro-rata basis and added to any penalty fee collected from the
plan.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="H5C51C4FE78394D02803884C44B245AD6"><enum>(b)</enum><header>Promulgation of
rules</header>
<paragraph id="H639BB3C2B66340069F55B194087B98F2"><enum>(1)</enum><header>Unique health
plan identifier</header><text>The Secretary shall promulgate a final rule to
establish a unique health plan identifier (as described in section 1173(b) of
the Social Security Act (42 U.S.C. 1320d–2(b))) based on the input of the
National Committee of Vital and Health Statistics. The Secretary may do so on
an interim final basis and such rule shall be effective not later than October
1, 2014.</text>
</paragraph><paragraph id="H648C60539D014F4A9205EA638BF42917"><enum>(2)</enum><header>Electronic funds
transfer</header><text>The Secretary shall promulgate a final rule to establish
a standard for electronic funds transfers (as described in section
1173(a)(2)(J) of the Social Security Act, as added by subsection (a)(2)(A)).
The Secretary may do so on an interim final basis and shall adopt such standard
not later than January 1, 2014, in a manner ensuring that such standard is
effective not later than January 1, 2016.</text>
</paragraph></subsection><subsection id="H1A5FEBEFE655409291BD50064A14FDA9"><enum>(c)</enum><header>Expansion of
electronic transactions in Medicare</header><text>Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)) is amended—</text>
<paragraph id="HF13254980EF445B881C712DB91162099"><enum>(1)</enum><text>in paragraph (23),
by striking the <quote>or</quote> at the end;</text>
</paragraph><paragraph id="H4F0FEF0DFA4844EBAB068A156B57DCDE"><enum>(2)</enum><text>in paragraph (24),
by striking the period and inserting <quote>; or</quote>; and</text>
</paragraph><paragraph id="HD6AA896CB7C942668970A243728D6EEE"><enum>(3)</enum><text>by inserting after
paragraph (24) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H9ADD83758E774A4FBD7FA9E076749254" style="OLC">
<paragraph id="HCE854FB838D04761AFB787A7B819E31B"><enum>(25)</enum><text display-inline="yes-display-inline">not later than January 1, 2016, for which
the payment is other than by electronic funds transfer (EFT) or an electronic
remittance in a form as specified in ASC X12 835 Health Care Payment and
Remittance Advice or subsequent
standard.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H76DA626C1687476381125961BDB865EF"><enum>(d)</enum><header>Medicare and
medicaid compliance reports</header><text>Not later than July 1, 2015, the
Secretary of Health and Human Services shall submit a report to the chairs and
ranking members of the Committee on Ways and Means and the Committee on Energy
and Commerce of the House of Representatives and the chairs and ranking members
of the Committee on Health, Education, Labor, and Pensions and the Committee on
Finance of the Senate on the extent to which the Medicare program and providers
that serve beneficiaries under that program, and State Medicaid programs and
providers that serve beneficiaries under those programs, transact
electronically in accordance with transaction standards issued under the Health
Insurance Portability and Accountability Act of 1996, part C of title XI of the
Social Security Act, and regulations promulgated under such Acts.</text>
</subsection></section></chapter></subtitle><subtitle id="H6104607375764807AFDBA30B2298DA94"><enum>B</enum><header>Improving Access
to Health Care </header>
<chapter id="HA3AB3F821AED4D818DF83BB80D6250A4"><enum>1</enum><header>Expanding Access
and Lowering Costs for Small Businesses</header>
<section id="HFB8354FA7A384E098CFFA3848F9A288F"><enum>620.</enum><header>Short
title</header><text display-inline="no-display-inline">This chapter may be
cited as the <quote>Small Business Health Fairness Act of 2011</quote>.</text>
</section><section id="H495B4E28F01347C995E1BFF722767151"><enum>621.</enum><header>Rules governing
association health plans</header>
<subsection id="HCF0CD1BBAA7343C6906C8A0FAD799B43"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Subtitle B of title I
of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act
of 1974</act-name> is amended by adding after part 7 the following new
part:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H8866106262B445648CF118B6EA15A2E9" style="OLC">
<part id="H982A9B7272EB43798C922FBA36445453"><enum>8</enum><header>RULES GOVERNING
ASSOCIATION HEALTH PLANS</header>
<section id="H942DD05554FA48AF98476EEF9FA8695B"><enum>801.</enum><header>Association
health plans</header>
<subsection id="H335ECCE713BE4528A42868EE4CCC7739"><enum>(a)</enum><header>In
General</header><text>For purposes of this part, the term <term>association
health plan</term> means a group health plan whose sponsor is (or is deemed
under this part to be) described in subsection (b).</text>
</subsection><subsection id="H28C5F613A9F94E8BA94C2161C40C44D5"><enum>(b)</enum><header>Sponsorship</header><text>The
sponsor of a group health plan is described in this subsection if such
sponsor—</text>
<paragraph id="H3A870B4D6F9B4B51B3097D0D3093F958"><enum>(1)</enum><text>is organized and
maintained in good faith, with a constitution and bylaws specifically stating
its purpose and providing for periodic meetings on at least an annual basis, as
a bona fide trade association, a bona fide industry association (including a
rural electric cooperative association or a rural telephone cooperative
association), a bona fide professional association, or a bona fide chamber of
commerce (or similar bona fide business association, including a corporation or
similar organization that operates on a cooperative basis (within the meaning
of section 1381 of the Internal Revenue Code of 1986)), for substantial
purposes other than that of obtaining or providing medical care;</text>
</paragraph><paragraph id="H913140F9D9DA422E8BDD2C5851C20CBB"><enum>(2)</enum><text>is established as
a permanent entity which receives the active support of its members and
requires for membership payment on a periodic basis of dues or payments
necessary to maintain eligibility for membership in the sponsor; and</text>
</paragraph><paragraph id="HBAE42AF01862433BB47D1B10CD173498"><enum>(3)</enum><text>does not condition
membership, such dues or payments, or coverage under the plan on the basis of
health status-related factors with respect to the employees of its members (or
affiliated members), or the dependents of such employees, and does not
condition such dues or payments on the basis of group health plan
participation.</text>
</paragraph><continuation-text continuation-text-level="subsection">Any
sponsor consisting of an association of entities which meet the requirements of
paragraphs (1), (2), and (3) shall be deemed to be a sponsor described in this
subsection.</continuation-text></subsection></section><section id="H04FA14DE01874F72BCDA5B81E47A5803"><enum>802.</enum><header>Certification
of association health plans</header>
<subsection id="H13A9BDF856144F7AAA45D805036E6D85"><enum>(a)</enum><header>In
General</header><text>The applicable authority shall prescribe by regulation a
procedure under which, subject to subsection (b), the applicable authority
shall certify association health plans which apply for certification as meeting
the requirements of this part.</text>
</subsection><subsection id="HBC9918F35A894E7E9CE6FE3721CE8AD6"><enum>(b)</enum><header>Standards</header><text>Under
the procedure prescribed pursuant to subsection (a), in the case of an
association health plan that provides at least one benefit option which does
not consist of health insurance coverage, the applicable authority shall
certify such plan as meeting the requirements of this part only if the
applicable authority is satisfied that the applicable requirements of this part
are met (or, upon the date on which the plan is to commence operations, will be
met) with respect to the plan.</text>
</subsection><subsection id="H80D49FD2C859465781CCE837165A6E70"><enum>(c)</enum><header>Requirements
Applicable to Certified Plans</header><text>An association health plan with
respect to which certification under this part is in effect shall meet the
applicable requirements of this part, effective on the date of certification
(or, if later, on the date on which the plan is to commence operations).</text>
</subsection><subsection id="H7B0473589BC84CFE9046DE5A62C8AF94"><enum>(d)</enum><header>Requirements for
Continued Certification</header><text>The applicable authority may provide by
regulation for continued certification of association health plans under this
part.</text>
</subsection><subsection id="H6E1C354799874CE1AFDCA9B9CC8A15B6"><enum>(e)</enum><header>Class
Certification for Fully Insured Plans</header><text>The applicable authority
shall establish a class certification procedure for association health plans
under which all benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the granting of
certification under this part to the plans in each class of such association
health plans upon appropriate filing under such procedure in connection with
plans in such class and payment of the prescribed fee under section
807(a).</text>
</subsection><subsection id="H60401B530A4340CBAC4B2B4DF9F60FC0"><enum>(f)</enum><header>Certification of
Self-Insured Association Health Plans</header><text>An association health plan
which offers one or more benefit options which do not consist of health
insurance coverage may be certified under this part only if such plan consists
of any of the following:</text>
<paragraph id="H5F9330229D3343269314E987D2D2FCEA"><enum>(1)</enum><text>a plan which
offered such coverage on the date of the enactment of the
<short-title>Small Business Health Fairness Act of
2011</short-title>,</text>
</paragraph><paragraph id="H347C512EB96B44EE96094E7A43AB8292"><enum>(2)</enum><text>a plan under which
the sponsor does not restrict membership to one or more trades and businesses
or industries and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or</text>
</paragraph><paragraph id="H4114C959D9B140A897881DE2F12C9524"><enum>(3)</enum><text>a plan whose
eligible participating employers represent one or more trades or businesses, or
one or more industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and cosmetology; certified
public accounting practices; child care; construction; dance, theatrical and
orchestra productions; disinfecting and pest control; financial services;
fishing; food service establishments; hospitals; labor organizations; logging;
manufacturing (metals); mining; medical and dental practices; medical
laboratories; professional consulting services; sanitary services;
transportation (local and freight); warehousing; wholesaling/distributing; or
any other trade or business or industry which has been indicated as having
average or above-average risk or health claims experience by reason of State
rate filings, denials of coverage, proposed premium rate levels, or other means
demonstrated by such plan in accordance with regulations.</text>
</paragraph></subsection></section><section id="H36E4EB7E460E4D18B825867EEAFD7A36"><enum>803.</enum><header>Requirements
relating to sponsors and boards of trustees</header>
<subsection id="H828FBBEFAA7440D39E57E8DD52E31774"><enum>(a)</enum><header>Sponsor</header><text>The
requirements of this subsection are met with respect to an association health
plan if the sponsor has met (or is deemed under this part to have met) the
requirements of section 801(b) for a continuous period of not less than 3 years
ending with the date of the application for certification under this
part.</text>
</subsection><subsection id="HBBD15DC7BDDA42D38A4F68318B4192B0"><enum>(b)</enum><header>Board of
Trustees</header><text>The requirements of this subsection are met with respect
to an association health plan if the following requirements are met:</text>
<paragraph id="H0F47919EE01E452B971DEB5E4B954757"><enum>(1)</enum><header>Fiscal
control</header><text>The plan is operated, pursuant to a trust agreement, by a
board of trustees which has complete fiscal control over the plan and which is
responsible for all operations of the plan.</text>
</paragraph><paragraph id="HD98262BFF16C45748438348F4A1DBF99"><enum>(2)</enum><header>Rules of
operation and financial controls</header><text>The board of trustees has in
effect rules of operation and financial controls, based on a 3-year plan of
operation, adequate to carry out the terms of the plan and to meet all
requirements of this title applicable to the plan.</text>
</paragraph><paragraph id="HB1D6DF31659A4B0A91303B2D1A63490D"><enum>(3)</enum><header>Rules governing
relationship to participating employers and to contractors</header>
<subparagraph id="H73C16881C4E6445C868D8AB759124DC5"><enum>(A)</enum><header>Board
membership</header>
<clause id="H620707938007470D8A056783DD2F83FC"><enum>(i)</enum><header>In
general</header><text>Except as provided in clauses (ii) and (iii), the members
of the board of trustees are individuals selected from individuals who are the
owners, officers, directors, or employees of the participating employers or who
are partners in the participating employers and actively participate in the
business.</text>
</clause><clause id="H12D28DD8F1B14FD9AB8D6522B306BCF4"><enum>(ii)</enum><header>Limitation</header>
<subclause id="H887115A3D0AC443DA79F02AD945BF116"><enum>(I)</enum><header>General
rule</header><text>Except as provided in subclauses (II) and (III), no such
member is an owner, officer, director, or employee of, or partner in, a
contract administrator or other service provider to the plan.</text>
</subclause><subclause id="H2BD3CEC69ADF4E778146D484559A0BAE"><enum>(II)</enum><header>Limited
exception for providers of services solely on behalf of the
sponsor</header><text>Officers or employees of a sponsor which is a service
provider (other than a contract administrator) to the plan may be members of
the board if they constitute not more than 25 percent of the membership of the
board and they do not provide services to the plan other than on behalf of the
sponsor.</text>
</subclause><subclause id="HE0EBBB2D7C914FA9A6EBFED2B3B6DDB6"><enum>(III)</enum><header>Treatment of
providers of medical care</header><text>In the case of a sponsor which is an
association whose membership consists primarily of providers of medical care,
subclause (I) shall not apply in the case of any service provider described in
subclause (I) who is a provider of medical care under the plan.</text>
</subclause></clause><clause id="HAA30A0BB878B423094D7F4573F819DCA"><enum>(iii)</enum><header>Certain plans
excluded</header><text>Clause (i) shall not apply to an association health plan
which is in existence on the date of the enactment of the
<short-title>Small Business Health Fairness Act of
2011</short-title>.</text>
</clause></subparagraph><subparagraph id="HE43CFB39A030491AA7C43DD87261E48F"><enum>(B)</enum><header>Sole
authority</header><text>The board has sole authority under the plan to approve
applications for participation in the plan and to contract with a service
provider to administer the day-to-day affairs of the plan.</text>
</subparagraph></paragraph></subsection><subsection id="H2F6CD2248D4443CDB1B83B0B7180C93A"><enum>(c)</enum><header>Treatment of
Franchise Networks</header><text>In the case of a group health plan which is
established and maintained by a franchiser for a franchise network consisting
of its franchisees—</text>
<paragraph id="HAFA14FF8D6484ECE9F3BF2BF96303F62"><enum>(1)</enum><text>the requirements
of subsection (a) and section 801(a) shall be deemed met if such requirements
would otherwise be met if the franchiser were deemed to be the sponsor referred
to in section 801(b), such network were deemed to be an association described
in section 801(b), and each franchisee were deemed to be a member (of the
association and the sponsor) referred to in section 801(b); and</text>
</paragraph><paragraph id="H089DFD8D04C54971954F0ABAF3294893"><enum>(2)</enum><text>the requirements
of section 804(a)(1) shall be deemed met.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
Secretary may by regulation define for purposes of this subsection the terms
<term>franchiser</term>, <term>franchise network</term>, and
<term>franchisee</term>.</continuation-text></subsection></section><section id="HA33E3E41DF374D5C892B00737663C660"><enum>804.</enum><header>Participation
and coverage requirements</header>
<subsection id="HD9E0CF89E15D4E25A104B8C73D6221E0"><enum>(a)</enum><header>Covered
Employers and Individuals</header><text>The requirements of this subsection are
met with respect to an association health plan if, under the terms of the
plan—</text>
<paragraph id="H20D4ECFAA0524078BB01D22636CFC634"><enum>(1)</enum><text>each participating
employer must be—</text>
<subparagraph id="HE8C3EBEB619A439B8ADCDB0090F7CD1F"><enum>(A)</enum><text>a member of the
sponsor,</text>
</subparagraph><subparagraph id="H15650CA692CD43B0ABF6628DA149CFBB"><enum>(B)</enum><text>the sponsor,
or</text>
</subparagraph><subparagraph id="HFFACC301E00D438A878BA47DFFB21CD6"><enum>(C)</enum><text>an affiliated
member of the sponsor with respect to which the requirements of subsection (b)
are met,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">except
that, in the case of a sponsor which is a professional association or other
individual-based association, if at least one of the officers, directors, or
employees of an employer, or at least one of the individuals who are partners
in an employer and who actively participates in the business, is a member or
such an affiliated member of the sponsor, participating employers may also
include such employer; and</continuation-text></paragraph><paragraph id="H988121BFF6944F79845A6925BA2EA53D"><enum>(2)</enum><text>all individuals
commencing coverage under the plan after certification under this part must
be—</text>
<subparagraph id="H1E828F43987C4DB3B454810997429821"><enum>(A)</enum><text>active or retired
owners (including self-employed individuals), officers, directors, or employees
of, or partners in, participating employers; or</text>
</subparagraph><subparagraph id="H5D91AF1D4BCF4A8DA5B8ECBA443A990B"><enum>(B)</enum><text>the beneficiaries
of individuals described in subparagraph (A).</text>
</subparagraph></paragraph></subsection><subsection id="HD482908896754BDD9CFFEF973DCB6294"><enum>(b)</enum><header>Coverage of
Previously Uninsured Employees</header><text>In the case of an association
health plan in existence on the date of the enactment of the
<short-title>Small Business Health Fairness Act of
2011</short-title>, an affiliated member of the sponsor of the plan may be
offered coverage under the plan as a participating employer only if—</text>
<paragraph id="H8EA6D7C5318F40AD9C444928D1047F7D"><enum>(1)</enum><text>the affiliated
member was an affiliated member on the date of certification under this part;
or</text>
</paragraph><paragraph id="H72B0DDC5061041CEA237E6984ADC3CAA"><enum>(2)</enum><text>during the
12-month period preceding the date of the offering of such coverage, the
affiliated member has not maintained or contributed to a group health plan with
respect to any of its employees who would otherwise be eligible to participate
in such association health plan.</text>
</paragraph></subsection><subsection id="H87CB753739674121A2ACF894A814022E"><enum>(c)</enum><header>Individual
Market Unaffected</header><text>The requirements of this subsection are met
with respect to an association health plan if, under the terms of the plan, no
participating employer may provide health insurance coverage in the individual
market for any employee not covered under the plan which is similar to the
coverage contemporaneously provided to employees of the employer under the
plan, if such exclusion of the employee from coverage under the plan is based
on a health status-related factor with respect to the employee and such
employee would, but for such exclusion on such basis, be eligible for coverage
under the plan.</text>
</subsection><subsection id="H825A93DBC4E8485CAB883F100EC76DB3"><enum>(d)</enum><header>Prohibition of
Discrimination Against Employers and Employees Eligible To
Participate</header><text>The requirements of this subsection are met with
respect to an association health plan if—</text>
<paragraph id="H4BBDB5773EFF4CE8B49F4054553A7C4A"><enum>(1)</enum><text>under the terms of
the plan, all employers meeting the preceding requirements of this section are
eligible to qualify as participating employers for all geographically available
coverage options, unless, in the case of any such employer, participation or
contribution requirements of the type referred to in section 2711 of the
<act-name parsable-cite="PHSA">Public Health Service Act</act-name> are not
met;</text>
</paragraph><paragraph id="HCCC4E20D0C20401598B578358C647A7A"><enum>(2)</enum><text>upon request, any
employer eligible to participate is furnished information regarding all
coverage options available under the plan; and</text>
</paragraph><paragraph id="HDCFE341C564D4DEBB89C78DA755AE4A8"><enum>(3)</enum><text>the applicable
requirements of sections 701, 702, and 703 are met with respect to the
plan.</text>
</paragraph></subsection></section><section id="H9692946DBAEF40ABA80E179C7B7CFB0C"><enum>805.</enum><header>Other
requirements relating to plan documents, contribution rates, and benefit
options</header>
<subsection id="HB944D945BA7946FB8507CCCC37CB0432"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if the following requirements are met:</text>
<paragraph id="H3C5993B3057C4B70B15C521306C9D8F7"><enum>(1)</enum><header>Contents of
governing instruments</header><text>The instruments governing the plan include
a written instrument, meeting the requirements of an instrument required under
section 402(a)(1), which—</text>
<subparagraph id="HC27087AA34274F4DA3C74FF6442B60D2"><enum>(A)</enum><text>provides that the
board of trustees serves as the named fiduciary required for plans under
section 402(a)(1) and serves in the capacity of a plan administrator (referred
to in section 3(16)(A));</text>
</subparagraph><subparagraph id="HA130353886B2454AA60BD9109A42BAFD"><enum>(B)</enum><text>provides that the
sponsor of the plan is to serve as plan sponsor (referred to in section
3(16)(B)); and</text>
</subparagraph><subparagraph id="H37B329994A1F489CB60116798C147008"><enum>(C)</enum><text>incorporates the
requirements of section 806.</text>
</subparagraph></paragraph><paragraph id="H2AE1A2FA45D54FBF959868ED05FF4B44"><enum>(2)</enum><header>Contribution
rates must be nondiscriminatory</header>
<subparagraph id="HDDDFDE35A1EC4AE29ADC829FE526D1AD"><enum>(A)</enum><text>The contribution
rates for any participating small employer do not vary on the basis of any
health status-related factor in relation to employees of such employer or their
beneficiaries and do not vary on the basis of the type of business or industry
in which such employer is engaged.</text>
</subparagraph><subparagraph id="H5A81E9BEF4A040BE8DC5D3A839AB6E72"><enum>(B)</enum><text>Nothing in this
title or any other provision of law shall be construed to preclude an
association health plan, or a health insurance issuer offering health insurance
coverage in connection with an association health plan, from—</text>
<clause id="HB5EDDC3523334D06841019177CB010A7"><enum>(i)</enum><text>setting
contribution rates based on the claims experience of the plan; or</text>
</clause><clause id="H89183C75451F40CCA19E37BB4A0C3A64"><enum>(ii)</enum><text>varying
contribution rates for small employers in a State to the extent that such rates
could vary using the same methodology employed in such State for regulating
premium rates in the small group market with respect to health insurance
coverage offered in connection with bona fide associations (within the meaning
of section 2791(d)(3) of the <act-name parsable-cite="PHSA">Public Health
Service Act</act-name>),</text>
</clause><continuation-text continuation-text-level="subparagraph">subject
to the requirements of section 702(b) relating to contribution rates.</continuation-text></subparagraph></paragraph><paragraph id="H834423706AFA4D8FBAD71A873D163033"><enum>(3)</enum><header>Floor for number
of covered individuals with respect to certain plans</header><text>If any
benefit option under the plan does not consist of health insurance coverage,
the plan has as of the beginning of the plan year not fewer than 1,000
participants and beneficiaries.</text>
</paragraph><paragraph id="H5610BB0D9D954472ACE985B1F98D890B"><enum>(4)</enum><header>Marketing
requirements</header>
<subparagraph id="HFF284A436A70429B95FB742A1BAF306A"><enum>(A)</enum><header>In
general</header><text>If a benefit option which consists of health insurance
coverage is offered under the plan, State-licensed insurance agents shall be
used to distribute to small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in which such agents
are used to distribute health insurance coverage.</text>
</subparagraph><subparagraph id="H5DEEDAB30FB640B388B5E89415203A23"><enum>(B)</enum><header>State-licensed
insurance agents</header><text>For purposes of subparagraph (A), the term
<term>State-licensed insurance agents</term> means one or more agents who are
licensed in a State and are subject to the laws of such State relating to
licensure, qualification, testing, examination, and continuing education of
persons authorized to offer, sell, or solicit health insurance coverage in such
State.</text>
</subparagraph></paragraph><paragraph id="H386D779E980142168906689967D3C305"><enum>(5)</enum><header>Regulatory
requirements</header><text>Such other requirements as the applicable authority
determines are necessary to carry out the purposes of this part, which shall be
prescribed by the applicable authority by regulation.</text>
</paragraph></subsection><subsection id="H586EDF30AAB04863A4B48E8991D9E1AB"><enum>(b)</enum><header>Ability of
Association Health Plans To Design Benefit Options</header><text>Subject to
section 514(d), nothing in this part or any provision of State law (as defined
in section 514(c)(1)) shall be construed to preclude an association health
plan, or a health insurance issuer offering health insurance coverage in
connection with an association health plan, from exercising its sole discretion
in selecting the specific items and services consisting of medical care to be
included as benefits under such plan or coverage, except (subject to section
514) in the case of (1) any law to the extent that it is not preempted under
section 731(a)(1) with respect to matters governed by section 711, 712, or 713,
or (2) any law of the State with which filing and approval of a policy type
offered by the plan was initially obtained to the extent that such law
prohibits an exclusion of a specific disease from such coverage.</text>
</subsection></section><section id="HD749C938939249588C326A74986E9D11"><enum>806.</enum><header>Maintenance of
reserves and provisions for solvency for plans providing health benefits in
addition to health insurance coverage</header>
<subsection id="HCDE3834498164FBD9914DF55FA1A2466"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if—</text>
<paragraph id="HF566DCBA409B46ECABCC611CE33D346A"><enum>(1)</enum><text>the benefits under
the plan consist solely of health insurance coverage; or</text>
</paragraph><paragraph id="HD15AEEDE577A471497B2BB7F0EEF0D22"><enum>(2)</enum><text>if the plan
provides any additional benefit options which do not consist of health
insurance coverage, the plan—</text>
<subparagraph id="HAF91C0BA4E344C49B82A702A773EFE16"><enum>(A)</enum><text>establishes and
maintains reserves with respect to such additional benefit options, in amounts
recommended by the qualified actuary, consisting of—</text>
<clause id="HE96816F3B7C74E60920A1D871BF5F5A0"><enum>(i)</enum><text>a
reserve sufficient for unearned contributions;</text>
</clause><clause id="HB1C9B5FDDC094D2FBE03DEC8CF2B6D3F"><enum>(ii)</enum><text>a
reserve sufficient for benefit liabilities which have been incurred, which have
not been satisfied, and for which risk of loss has not yet been transferred,
and for expected administrative costs with respect to such benefit
liabilities;</text>
</clause><clause id="H192FE605C94A49FCA2B679F8ADA98ADA"><enum>(iii)</enum><text>a reserve
sufficient for any other obligations of the plan; and</text>
</clause><clause id="HCD3ACD3F20E749C799287E2701A057E5"><enum>(iv)</enum><text>a
reserve sufficient for a margin of error and other fluctuations, taking into
account the specific circumstances of the plan; and</text>
</clause></subparagraph><subparagraph id="H6FE2DE38A4AC40AA8D4C47F8E33DF50D"><enum>(B)</enum><text>establishes and
maintains aggregate and specific excess/stop loss insurance and solvency
indemnification, with respect to such additional benefit options for which risk
of loss has not yet been transferred, as follows:</text>
<clause id="HEF433CD85FDD4E529366B55C53ACC809"><enum>(i)</enum><text>The plan shall
secure aggregate excess/stop loss insurance for the plan with an attachment
point which is not greater than 125 percent of expected gross annual claims.
The applicable authority may by regulation provide for upward adjustments in
the amount of such percentage in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of the amounts
required under subparagraph (A).</text>
</clause><clause id="HA342DC172A384E14BDEE37356EF86D2C"><enum>(ii)</enum><text>The plan shall
secure specific excess/stop loss insurance for the plan with an attachment
point which is at least equal to an amount recommended by the plan’s qualified
actuary. The applicable authority may by regulation provide for adjustments in
the amount of such insurance in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of the amounts
required under subparagraph (A).</text>
</clause><clause id="HE164CF488F384591851ECECBBC3B32A1"><enum>(iii)</enum><text>The plan shall
secure indemnification insurance for any claims which the plan is unable to
satisfy by reason of a plan termination.</text>
</clause></subparagraph></paragraph><continuation-text continuation-text-level="subsection">Any
person issuing to a plan insurance described in clause (i), (ii), or (iii) of
subparagraph (B) shall notify the Secretary of any failure of premium payment
meriting cancellation of the policy prior to undertaking such a cancellation.
Any regulations prescribed by the applicable authority pursuant to clause (i)
or (ii) of subparagraph (B) may allow for such adjustments in the required
levels of excess/stop loss insurance as the qualified actuary may recommend,
taking into account the specific circumstances of the plan.</continuation-text></subsection><subsection id="H92821776B4B24718A9C0333AFECB0204"><enum>(b)</enum><header>Minimum Surplus
in Addition to Claims Reserves</header><text>In the case of any association
health plan described in subsection (a)(2), the requirements of this subsection
are met if the plan establishes and maintains surplus in an amount at least
equal to—</text>
<paragraph id="H8CFC6EED7E4E4C48B6553336078895A3"><enum>(1)</enum><text>$500,000,
or</text>
</paragraph><paragraph id="H2B593DDFFBE447CA966D2128F6FA6F54"><enum>(2)</enum><text>such greater
amount (but not greater than $2,000,000) as may be set forth in regulations
prescribed by the applicable authority, considering the level of aggregate and
specific excess/stop loss insurance provided with respect to such plan and
other factors related to solvency risk, such as the plan’s projected levels of
participation or claims, the nature of the plan’s liabilities, and the types of
assets available to assure that such liabilities are met.</text>
</paragraph></subsection><subsection id="HB4E0B5844B04471AA48E654C09A3C42E"><enum>(c)</enum><header>Additional
Requirements</header><text>In the case of any association health plan described
in subsection (a)(2), the applicable authority may provide such additional
requirements relating to reserves, excess/stop loss insurance, and
indemnification insurance as the applicable authority considers appropriate.
Such requirements may be provided by regulation with respect to any such plan
or any class of such plans.</text>
</subsection><subsection id="H636BFCBD7A5B40C18606004D27243167"><enum>(d)</enum><header>Adjustments for
Excess/Stop Loss Insurance</header><text>The applicable authority may provide
for adjustments to the levels of reserves otherwise required under subsections
(a) and (b) with respect to any plan or class of plans to take into account
excess/stop loss insurance provided with respect to such plan or plans.</text>
</subsection><subsection id="H103F85D6246B439484AADF2D09128062"><enum>(e)</enum><header>Alternative
Means of Compliance</header><text>The applicable authority may permit an
association health plan described in subsection (a)(2) to substitute, for all
or part of the requirements of this section (except subsection (a)(2)(B)(iii)),
such security, guarantee, hold-harmless arrangement, or other financial
arrangement as the applicable authority determines to be adequate to enable the
plan to fully meet all its financial obligations on a timely basis and is
otherwise no less protective of the interests of participants and beneficiaries
than the requirements for which it is substituted. The applicable authority may
take into account, for purposes of this subsection, evidence provided by the
plan or sponsor which demonstrates an assumption of liability with respect to
the plan. Such evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under applicable terms of
the plan in the form of assessments of participating employers, security, or
other financial arrangement.</text>
</subsection><subsection id="H9596D9B935C3490093CD07F82A2D4661"><enum>(f)</enum><header>Measures To
Ensure Continued Payment of Benefits by Certain Plans in Distress</header>
<paragraph id="HFB7DAC646B26409FA842C36D37EDF43A"><enum>(1)</enum><header>Payments by
certain plans to association health plan fund</header>
<subparagraph id="H1CC262E7181B4620B9C7A7CCB5277E81"><enum>(A)</enum><header>In
general</header><text>In the case of an association health plan described in
subsection (a)(2), the requirements of this subsection are met if the plan
makes payments into the Association Health Plan Fund under this subparagraph
when they are due. Such payments shall consist of annual payments in the amount
of $5,000, and, in addition to such annual payments, such supplemental payments
as the Secretary may determine to be necessary under paragraph (2). Payments
under this paragraph are payable to the Fund at the time determined by the
Secretary. Initial payments are due in advance of certification under this
part. Payments shall continue to accrue until a plan’s assets are distributed
pursuant to a termination procedure.</text>
</subparagraph><subparagraph id="H1EF6EA3CF47E43BB958775500A5697F3"><enum>(B)</enum><header>Penalties for
failure to make payments</header><text>If any payment is not made by a plan
when it is due, a late payment charge of not more than 100 percent of the
payment which was not timely paid shall be payable by the plan to the
Fund.</text>
</subparagraph><subparagraph id="H0FC08E89F02A4D81A3847894D1B0A807"><enum>(C)</enum><header>Continued duty
of the secretary</header><text>The Secretary shall not cease to carry out the
provisions of paragraph (2) on account of the failure of a plan to pay any
payment when due.</text>
</subparagraph></paragraph><paragraph id="HBAD24452365046BC91319B2178340B06"><enum>(2)</enum><header>Payments by
secretary to continue excess/stop loss insurance coverage and indemnification
insurance coverage for certain plans</header><text>In any case in which the
applicable authority determines that there is, or that there is reason to
believe that there will be: (A) a failure to take necessary corrective actions
under section 809(a) with respect to an association health plan described in
subsection (a)(2); or (B) a termination of such a plan under section 809(b) or
810(b)(8) (and, if the applicable authority is not the Secretary, certifies
such determination to the Secretary), the Secretary shall determine the amounts
necessary to make payments to an insurer (designated by the Secretary) to
maintain in force excess/stop loss insurance coverage or indemnification
insurance coverage for such plan, if the Secretary determines that there is a
reasonable expectation that, without such payments, claims would not be
satisfied by reason of termination of such coverage. The Secretary shall, to
the extent provided in advance in appropriation Acts, pay such amounts so
determined to the insurer designated by the Secretary.</text>
</paragraph><paragraph id="HD2983DAF2DEF4232A8C3771A9515CF8D"><enum>(3)</enum><header>Association
health plan fund</header>
<subparagraph id="HA195788B7DF249F9AFD94C8F6087AAC9"><enum>(A)</enum><header>In
general</header><text>There is established on the books of the Treasury a fund
to be known as the <quote>Association Health Plan Fund</quote>. The Fund shall
be available for making payments pursuant to paragraph (2). The Fund shall be
credited with payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B); and earnings on investments of amounts
of the Fund under subparagraph (B).</text>
</subparagraph><subparagraph id="HEEF45632E62D4A9A99D7294C978F43E5"><enum>(B)</enum><header>Investment</header><text>Whenever
the Secretary determines that the moneys of the fund are in excess of current
needs, the Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the Treasury in obligations
issued or guaranteed by the United States.</text>
</subparagraph></paragraph></subsection><subsection id="HCA9B2B48D2D1461CAC11995881688049"><enum>(g)</enum><header>Excess/Stop Loss
Insurance</header><text>For purposes of this section—</text>
<paragraph id="H7E96E8C245B84A568E558AD620A83B24"><enum>(1)</enum><header>Aggregate
excess/stop loss insurance</header><text>The term <term>aggregate excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="H5B70A2A7DA8F4F9BB7C4E3E92C452E1A"><enum>(A)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
aggregate claims under the plan in excess of an amount or amounts specified in
such contract;</text>
</subparagraph><subparagraph id="H9988F6253F6B4114B5E498FFC7FA9CF4"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="H7505BA7D7B614E0AAF1F72DB78FD474F"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph><paragraph id="H2F997977B34D40D288CBACEB33340513"><enum>(2)</enum><header>Specific
excess/stop loss insurance</header><text>The term <term>specific excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="H9A2C04CCD666408A851E1F1C1437874F"><enum>(A)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
claims under the plan in connection with a covered individual in excess of an
amount or amounts specified in such contract in connection with such covered
individual;</text>
</subparagraph><subparagraph id="H24D84798968D46CFBB55C6F6FEC12B7F"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="H3E291951E4EA4F28A6A3DC2E28ED8F65"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph></subsection><subsection id="H8E6F54F0C6B14404B4470B0E2A619F6A"><enum>(h)</enum><header>Indemnification
Insurance</header><text>For purposes of this section, the term
<term>indemnification insurance</term> means, in connection with an association
health plan, a contract—</text>
<paragraph id="HF481CE144144489ABBEF5CE2D1D17227"><enum>(1)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
claims under the plan which the plan is unable to satisfy by reason of a
termination pursuant to section 809(b) (relating to mandatory
termination);</text>
</paragraph><paragraph id="H0059756BB83A4162AFE2B14F0E321195"><enum>(2)</enum><text>which is
guaranteed renewable and noncancellable for any reason (except as the
applicable authority may prescribe by regulation); and</text>
</paragraph><paragraph id="H7F4982A017EA4B8DA5E8301EEFA35C6C"><enum>(3)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</paragraph></subsection><subsection id="HA7583FF6E2C44477B71696ED0E04ADD1"><enum>(i)</enum><header>Reserves</header><text>For
purposes of this section, the term <term>reserves</term> means, in connection
with an association health plan, plan assets which meet the fiduciary standards
under part 4 and such additional requirements regarding liquidity as the
applicable authority may prescribe by regulation.</text>
</subsection><subsection id="HA6A893AC1FDC491C81B7CB508968BD89"><enum>(j)</enum><header>Solvency
Standards Working Group</header>
<paragraph id="H65EFA1CC638D4937A6A910B599F1B689"><enum>(1)</enum><header>In
general</header><text>Within 90 days after the date of the enactment of the
<short-title>Small Business Health Fairness Act of
2011</short-title>, the applicable authority shall establish a Solvency
Standards Working Group. In prescribing the initial regulations under this
section, the applicable authority shall take into account the recommendations
of such Working Group.</text>
</paragraph><paragraph id="HF7BBDB073F6D455084EC80BF0490D4CE"><enum>(2)</enum><header>Membership</header><text>The
Working Group shall consist of not more than 15 members appointed by the
applicable authority. The applicable authority shall include among persons
invited to membership on the Working Group at least one of each of the
following:</text>
<subparagraph id="HA9CF167219D4471A8B9EFA4E63260B16"><enum>(A)</enum><text>a representative
of the National Association of Insurance Commissioners;</text>
</subparagraph><subparagraph id="H3DBD60F9E94F4EFC9BC10F6EAFF3C5D5"><enum>(B)</enum><text>a representative
of the American Academy of Actuaries;</text>
</subparagraph><subparagraph id="HF6830BFBDD484BCDBBB622BD082A2654"><enum>(C)</enum><text>a representative
of the State governments, or their interests;</text>
</subparagraph><subparagraph id="H812E3397DFFA49049CF64E676C2C05FA"><enum>(D)</enum><text>a representative
of existing self-insured arrangements, or their interests;</text>
</subparagraph><subparagraph id="HF0B980DBB1484E65804C601986919BAB"><enum>(E)</enum><text>a representative
of associations of the type referred to in section 801(b)(1), or their
interests; and</text>
</subparagraph><subparagraph id="H0318EDA407524CD3B6C79476D8AF5756"><enum>(F)</enum><text>a representative
of multiemployer plans that are group health plans, or their interests.</text>
</subparagraph></paragraph></subsection></section><section id="H514ED3C8F80A41D7B9696B9463D25797"><enum>807.</enum><header>Requirements
for application and related requirements</header>
<subsection id="H982A6086A7D045B28AF369CDA06CE65B"><enum>(a)</enum><header>Filing
Fee</header><text>Under the procedure prescribed pursuant to section 802(a), an
association health plan shall pay to the applicable authority at the time of
filing an application for certification under this part a filing fee in the
amount of $5,000, which shall be available in the case of the Secretary, to the
extent provided in appropriation Acts, for the sole purpose of administering
the certification procedures applicable with respect to association health
plans.</text>
</subsection><subsection id="H5102E15BDE774C58984687FB7B8AC092"><enum>(b)</enum><header>Information To
Be Included in Application for Certification</header><text>An application for
certification under this part meets the requirements of this section only if it
includes, in a manner and form which shall be prescribed by the applicable
authority by regulation, at least the following information:</text>
<paragraph id="H027E1CEDA937410FAABC168F9FA5FB9C"><enum>(1)</enum><header>Identifying
information</header><text>The names and addresses of—</text>
<subparagraph id="HC8439FDF41F4405A9D3D8A5C1DC6083F"><enum>(A)</enum><text>the sponsor;
and</text>
</subparagraph><subparagraph id="HA086856B85B045889F24BDACA342E81F"><enum>(B)</enum><text>the members of the
board of trustees of the plan.</text>
</subparagraph></paragraph><paragraph id="HB11F347097A94D35AEC516759E151313"><enum>(2)</enum><header>States in which
plan intends to do business</header><text>The States in which participants and
beneficiaries under the plan are to be located and the number of them expected
to be located in each such State.</text>
</paragraph><paragraph id="HE3148570D06041A3AB0BA589C107F3D1"><enum>(3)</enum><header>Bonding
requirements</header><text>Evidence provided by the board of trustees that the
bonding requirements of section 412 will be met as of the date of the
application or (if later) commencement of operations.</text>
</paragraph><paragraph id="H5BCACCB8F71B41B7891FF317D476CB0D"><enum>(4)</enum><header>Plan
documents</header><text>A copy of the documents governing the plan (including
any bylaws and trust agreements), the summary plan description, and other
material describing the benefits that will be provided to participants and
beneficiaries under the plan.</text>
</paragraph><paragraph id="HDB49B9544F6E4D0C9C996666CC3BCCEC"><enum>(5)</enum><header>Agreements with
service providers</header><text>A copy of any agreements between the plan and
contract administrators and other service providers.</text>
</paragraph><paragraph id="H914E34F3FA8F45958308AA4AA35F42E2"><enum>(6)</enum><header>Funding
report</header><text>In the case of association health plans providing benefits
options in addition to health insurance coverage, a report setting forth
information with respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the application,
including the following:</text>
<subparagraph id="H805805E37CD448408F86C9406FE5E9CA"><enum>(A)</enum><header>Reserves</header><text>A
statement, certified by the board of trustees of the plan, and a statement of
actuarial opinion, signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance with regulations
which the applicable authority shall prescribe.</text>
</subparagraph><subparagraph id="HD2A10475B8364245B016B7BFEBC61D20"><enum>(B)</enum><header>Adequacy of
contribution rates</header><text>A statement of actuarial opinion, signed by a
qualified actuary, which sets forth a description of the extent to which
contribution rates are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for the 12-month period
beginning with such date within such 120-day period, taking into account the
expected coverage and experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall indicate the extent to
which the rates are inadequate and the changes needed to ensure
adequacy.</text>
</subparagraph><subparagraph id="HB9A5289F62D342BB8DB28C3EC82C50E6"><enum>(C)</enum><header>Current and
projected value of assets and liabilities</header><text>A statement of
actuarial opinion signed by a qualified actuary, which sets forth the current
value of the assets and liabilities accumulated under the plan and a projection
of the assets, liabilities, income, and expenses of the plan for the 12-month
period referred to in subparagraph (B). The income statement shall identify
separately the plan’s administrative expenses and claims.</text>
</subparagraph><subparagraph id="H51C10B8FFA564D41B851AA4FF8E5A570"><enum>(D)</enum><header>Costs of
coverage to be charged and other expenses</header><text>A statement of the
costs of coverage to be charged, including an itemization of amounts for
administration, reserves, and other expenses associated with the operation of
the plan.</text>
</subparagraph><subparagraph id="H9B3EB571FABF4A96B036EE4650BFE35D"><enum>(E)</enum><header>Other
information</header><text>Any other information as may be determined by the
applicable authority, by regulation, as necessary to carry out the purposes of
this part.</text>
</subparagraph></paragraph></subsection><subsection id="H4249D850BC2A486FB4C86C28BEC3E712"><enum>(c)</enum><header>Filing Notice of
Certification With States</header><text>A certification granted under this part
to an association health plan shall not be effective unless written notice of
such certification is filed with the applicable State authority of each State
in which at least 25 percent of the participants and beneficiaries under the
plan are located. For purposes of this subsection, an individual shall be
considered to be located in the State in which a known address of such
individual is located or in which such individual is employed.</text>
</subsection><subsection id="H513B2DC070C846989714E5DF86732576"><enum>(d)</enum><header>Notice of
Material Changes</header><text>In the case of any association health plan
certified under this part, descriptions of material changes in any information
which was required to be submitted with the application for the certification
under this part shall be filed in such form and manner as shall be prescribed
by the applicable authority by regulation. The applicable authority may require
by regulation prior notice of material changes with respect to specified
matters which might serve as the basis for suspension or revocation of the
certification.</text>
</subsection><subsection id="HE2D2D0FCB0FD4235823F85D4E11F1F52"><enum>(e)</enum><header>Reporting
Requirements for Certain Association Health Plans</header><text>An association
health plan certified under this part which provides benefit options in
addition to health insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report under such section which
shall include information described in subsection (b)(6) with respect to the
plan year and, notwithstanding section 104(a)(1)(A), shall be filed with the
applicable authority not later than 90 days after the close of the plan year
(or on such later date as may be prescribed by the applicable authority). The
applicable authority may require by regulation such interim reports as it
considers appropriate.</text>
</subsection><subsection id="H31C806A0D38B4EE3B90E7CB9FA2DF3C7"><enum>(f)</enum><header>Engagement of
Qualified Actuary</header><text>The board of trustees of each association
health plan which provides benefits options in addition to health insurance
coverage and which is applying for certification under this part or is
certified under this part shall engage, on behalf of all participants and
beneficiaries, a qualified actuary who shall be responsible for the preparation
of the materials comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary shall utilize such
assumptions and techniques as are necessary to enable such actuary to form an
opinion as to whether the contents of the matters reported under this
part—</text>
<paragraph id="HD3096A8685144BB089D8A4A1973F0DA4"><enum>(1)</enum><text>are in the
aggregate reasonably related to the experience of the plan and to reasonable
expectations; and</text>
</paragraph><paragraph id="HB9087C4BB3D54F72B0A29A3A7250BB52"><enum>(2)</enum><text>represent such
actuary’s best estimate of anticipated experience under the plan.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
opinion by the qualified actuary shall be made with respect to, and shall be
made a part of, the annual report.</continuation-text></subsection></section><section id="H60276FC828AF4A89A6814CB95DDC09A7"><enum>808.</enum><header>Notice
requirements for voluntary termination</header><text display-inline="no-display-inline">Except as provided in section 809(b), an
association health plan which is or has been certified under this part may
terminate (upon or at any time after cessation of accruals in benefit
liabilities) only if the board of trustees, not less than 60 days before the
proposed termination date—</text>
<paragraph id="H96046B980D4F4A0498D9C319FDCBAFD0"><enum>(1)</enum><text>provides to the
participants and beneficiaries a written notice of intent to terminate stating
that such termination is intended and the proposed termination date;</text>
</paragraph><paragraph id="HB3E4631C6E164D5080A50F49E0947F91"><enum>(2)</enum><text>develops a plan
for winding up the affairs of the plan in connection with such termination in a
manner which will result in timely payment of all benefits for which the plan
is obligated; and</text>
</paragraph><paragraph id="HBB14DE4F93BC4A249446AA42CE9EDE22"><enum>(3)</enum><text>submits such plan
in writing to the applicable authority.</text>
</paragraph><continuation-text continuation-text-level="section">Actions
required under this section shall be taken in such form and manner as may be
prescribed by the applicable authority by regulation.</continuation-text></section><section id="HFC0189E931B84C01949366A22DD9091D"><enum>809.</enum><header>Corrective
actions and mandatory termination</header>
<subsection id="H4F3C3F7865F445A996259A4B4F40ECDD"><enum>(a)</enum><header>Actions To Avoid
Depletion of Reserves</header><text>An association health plan which is
certified under this part and which provides benefits other than health
insurance coverage shall continue to meet the requirements of section 806,
irrespective of whether such certification continues in effect. The board of
trustees of such plan shall determine quarterly whether the requirements of
section 806 are met. In any case in which the board determines that there is
reason to believe that there is or will be a failure to meet such requirements,
or the applicable authority makes such a determination and so notifies the
board, the board shall immediately notify the qualified actuary engaged by the
plan, and such actuary shall, not later than the end of the next following
month, make such recommendations to the board for corrective action as the
actuary determines necessary to ensure compliance with section 806. Not later
than 30 days after receiving from the actuary recommendations for corrective
actions, the board shall notify the applicable authority (in such form and
manner as the applicable authority may prescribe by regulation) of such
recommendations of the actuary for corrective action, together with a
description of the actions (if any) that the board has taken or plans to take
in response to such recommendations. The board shall thereafter report to the
applicable authority, in such form and frequency as the applicable authority
may specify to the board, regarding corrective action taken by the board until
the requirements of section 806 are met.</text>
</subsection><subsection id="H7E6B3E10560046B0AA927981F322C17A"><enum>(b)</enum><header>Mandatory
Termination</header><text>In any case in which—</text>
<paragraph id="H02080CBF10AD45D6B27794C5C994C277"><enum>(1)</enum><text>the applicable
authority has been notified under subsection (a) (or by an issuer of
excess/stop loss insurance or indemnity insurance pursuant to section 806(a))
of a failure of an association health plan which is or has been certified under
this part and is described in section 806(a)(2) to meet the requirements of
section 806 and has not been notified by the board of trustees of the plan that
corrective action has restored compliance with such requirements; and</text>
</paragraph><paragraph id="HD7770E614AC84155BC44EB01469D4C46"><enum>(2)</enum><text>the applicable
authority determines that there is a reasonable expectation that the plan will
continue to fail to meet the requirements of section 806,</text>
</paragraph><continuation-text continuation-text-level="subsection">the board
of trustees of the plan shall, at the direction of the applicable authority,
terminate the plan and, in the course of the termination, take such actions as
the applicable authority may require, including satisfying any claims referred
to in section 806(a)(2)(B)(iii) and recovering for the plan any liability under
subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure that
the affairs of the plan will be, to the maximum extent possible, wound up in a
manner which will result in timely provision of all benefits for which the plan
is obligated.</continuation-text></subsection></section><section id="H61B739CB14CF4823ABA59AE130F3AC66"><enum>810.</enum><header>Trusteeship by
the Secretary of insolvent association health plans providing health benefits
in addition to health insurance coverage</header>
<subsection id="H5302E79AF26E489CABF71B96D885BBD2"><enum>(a)</enum><header>Appointment of
Secretary as Trustee for Insolvent Plans</header><text>Whenever the Secretary
determines that an association health plan which is or has been certified under
this part and which is described in section 806(a)(2) will be unable to provide
benefits when due or is otherwise in a financially hazardous condition, as
shall be defined by the Secretary by regulation, the Secretary shall, upon
notice to the plan, apply to the appropriate United States district court for
appointment of the Secretary as trustee to administer the plan for the duration
of the insolvency. The plan may appear as a party and other interested persons
may intervene in the proceedings at the discretion of the court. The court
shall appoint such Secretary trustee if the court determines that the
trusteeship is necessary to protect the interests of the participants and
beneficiaries or providers of medical care or to avoid any unreasonable
deterioration of the financial condition of the plan. The trusteeship of such
Secretary shall continue until the conditions described in the first sentence
of this subsection are remedied or the plan is terminated.</text>
</subsection><subsection id="H68F6A652281242EFB86434A34A43C798"><enum>(b)</enum><header>Powers as
Trustee</header><text>The Secretary, upon appointment as trustee under
subsection (a), shall have the power—</text>
<paragraph id="H87938C783ADE426489D94A511F767F0D"><enum>(1)</enum><text>to do any act
authorized by the plan, this title, or other applicable provisions of law to be
done by the plan administrator or any trustee of the plan;</text>
</paragraph><paragraph id="H1BC18081280E4C31BF8BD37FDB333E01"><enum>(2)</enum><text>to require the
transfer of all (or any part) of the assets and records of the plan to the
Secretary as trustee;</text>
</paragraph><paragraph id="HADAADCC2984545758A495F7570E02092"><enum>(3)</enum><text>to invest any
assets of the plan which the Secretary holds in accordance with the provisions
of the plan, regulations prescribed by the Secretary, and applicable provisions
of law;</text>
</paragraph><paragraph id="HCBBAC779B0B54088BB40CFD5FD23FC3E"><enum>(4)</enum><text>to require the
sponsor, the plan administrator, any participating employer, and any employee
organization representing plan participants to furnish any information with
respect to the plan which the Secretary as trustee may reasonably need in order
to administer the plan;</text>
</paragraph><paragraph id="H6990B228751741FBBBAC40A380567493"><enum>(5)</enum><text>to collect for the
plan any amounts due the plan and to recover reasonable expenses of the
trusteeship;</text>
</paragraph><paragraph id="HB92AF533F2F5459A9DC60A1A601B6C32"><enum>(6)</enum><text>to commence,
prosecute, or defend on behalf of the plan any suit or proceeding involving the
plan;</text>
</paragraph><paragraph id="H85E57E64414E4BD4A9E5154A396B7B00"><enum>(7)</enum><text>to issue, publish,
or file such notices, statements, and reports as may be required by the
Secretary by regulation or required by any order of the court;</text>
</paragraph><paragraph id="H99158690D6BF470C81857B2709BD2C87"><enum>(8)</enum><text>to terminate the
plan (or provide for its termination in accordance with section 809(b)) and
liquidate the plan assets, to restore the plan to the responsibility of the
sponsor, or to continue the trusteeship;</text>
</paragraph><paragraph id="H7C7045AC39844D2A836E91639153A53E"><enum>(9)</enum><text>to provide for the
enrollment of plan participants and beneficiaries under appropriate coverage
options; and</text>
</paragraph><paragraph id="H5693801972BD48FD8BC7335C1E978B1C"><enum>(10)</enum><text>to do such other
acts as may be necessary to comply with this title or any order of the court
and to protect the interests of plan participants and beneficiaries and
providers of medical care.</text>
</paragraph></subsection><subsection id="HBBB66EBF20A14CE994D3D01A07969593"><enum>(c)</enum><header>Notice of
Appointment</header><text>As soon as practicable after the Secretary’s
appointment as trustee, the Secretary shall give notice of such appointment
to—</text>
<paragraph id="HA1B686B2EE5F4B6A9E35B2935E529ADA"><enum>(1)</enum><text>the sponsor and
plan administrator;</text>
</paragraph><paragraph id="H525A15DA4A7E4E3C9C22513DA2018BBA"><enum>(2)</enum><text>each
participant;</text>
</paragraph><paragraph id="H93FCBE4C76CB49398B92D1E8482EF145"><enum>(3)</enum><text>each participating
employer; and</text>
</paragraph><paragraph id="H21581AC183754D53B3125AC92A98FFB5"><enum>(4)</enum><text>if applicable,
each employee organization which, for purposes of collective bargaining,
represents plan participants.</text>
</paragraph></subsection><subsection id="H6751A229944240E388D6E7E9A1BBCDA2"><enum>(d)</enum><header>Additional
Duties</header><text>Except to the extent inconsistent with the provisions of
this title, or as may be otherwise ordered by the court, the Secretary, upon
appointment as trustee under this section, shall be subject to the same duties
as those of a trustee under section 704 of title 11, United States Code, and
shall have the duties of a fiduciary for purposes of this title.</text>
</subsection><subsection id="H54A469636560417F94677A0D0AF31CC1"><enum>(e)</enum><header>Other
Proceedings</header><text>An application by the Secretary under this subsection
may be filed notwithstanding the pendency in the same or any other court of any
bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any
proceeding to reorganize, conserve, or liquidate such plan or its property, or
any proceeding to enforce a lien against property of the plan.</text>
</subsection><subsection id="HEBBB3A7D756C4340AB6CBE228C19D44C"><enum>(f)</enum><header>Jurisdiction of
Court</header>
<paragraph id="H6A4B49DB2BC140E294AFEBFE95120DEB"><enum>(1)</enum><header>In
general</header><text>Upon the filing of an application for the appointment as
trustee or the issuance of a decree under this section, the court to which the
application is made shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent consistent with
the purposes of this section, of a court of the United States having
jurisdiction over cases under chapter 11 of title 11, United States Code.
Pending an adjudication under this section such court shall stay, and upon
appointment by it of the Secretary as trustee, such court shall continue the
stay of, any pending mortgage foreclosure, equity receivership, or other
proceeding to reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against any receiver,
conservator, or trustee of the plan, the sponsor, or property of the plan or
sponsor. Pending such adjudication and upon the appointment by it of the
Secretary as trustee, the court may stay any proceeding to enforce a lien
against property of the plan or the sponsor or any other suit against the plan
or the sponsor.</text>
</paragraph><paragraph id="HE2DFA7CCA01F417390E5ECC17484E6A3"><enum>(2)</enum><header>Venue</header><text>An
action under this section may be brought in the judicial district where the
sponsor or the plan administrator resides or does business or where any asset
of the plan is situated. A district court in which such action is brought may
issue process with respect to such action in any other judicial
district.</text>
</paragraph></subsection><subsection id="HE78B8BBD60C449B78B464719518D406A"><enum>(g)</enum><header>Personnel</header><text>In
accordance with regulations which shall be prescribed by the Secretary, the
Secretary shall appoint, retain, and compensate accountants, actuaries, and
other professional service personnel as may be necessary in connection with the
Secretary’s service as trustee under this section.</text>
</subsection></section><section id="HCF574F366D9B47C586266E3B01387B02"><enum>811.</enum><header>State
assessment authority</header>
<subsection id="HB8881475BBCC401689A9D7A591212096"><enum>(a)</enum><header>In
General</header><text>Notwithstanding section 514, a State may impose by law a
contribution tax on an association health plan described in section 806(a)(2),
if the plan commenced operations in such State after the date of the enactment
of the <short-title>Small Business Health Fairness Act of
2011</short-title>.</text>
</subsection><subsection id="H314D1DBB5BE849A685A29963373CAB1D"><enum>(b)</enum><header>Contribution
Tax</header><text>For purposes of this section, the term <term>contribution
tax</term> imposed by a State on an association health plan means any tax
imposed by such State if—</text>
<paragraph id="H4458F015694A49DA8AABF792DA7E21FD"><enum>(1)</enum><text>such tax is
computed by applying a rate to the amount of premiums or contributions, with
respect to individuals covered under the plan who are residents of such State,
which are received by the plan from participating employers located in such
State or from such individuals;</text>
</paragraph><paragraph id="H40D8223F7C7549FDB0AB7A05FD5AA534"><enum>(2)</enum><text>the rate of such
tax does not exceed the rate of any tax imposed by such State on premiums or
contributions received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection with a group
health plan;</text>
</paragraph><paragraph id="H67C80579475A41EF8E3AFDE5EC15034D"><enum>(3)</enum><text>such tax is
otherwise nondiscriminatory; and</text>
</paragraph><paragraph id="HB61ED9D53FC444AF950E2314871127DC"><enum>(4)</enum><text>the amount of any
such tax assessed on the plan is reduced by the amount of any tax or assessment
otherwise imposed by the State on premiums, contributions, or both received by
insurers or health maintenance organizations for health insurance coverage,
aggregate excess/stop loss insurance (as defined in section 806(g)(1)),
specific excess/stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the plan, or any
combination thereof provided by such insurers or health maintenance
organizations in such State in connection with such plan.</text>
</paragraph></subsection></section><section id="H4CCEC59D6B7A4D20A234EE1E5881E741"><enum>812.</enum><header>Definitions and
rules of construction</header>
<subsection id="H8FF1C5D6C2C24E63A9E4ACC5CA3F8132"><enum>(a)</enum><header>Definitions</header><text>For
purposes of this part—</text>
<paragraph id="H30A0447F31E24EE880D3C6167C6E5F10"><enum>(1)</enum><header>Group health
plan</header><text>The term <term>group health plan</term> has the meaning
provided in section 733(a)(1) (after applying subsection (b) of this
section).</text>
</paragraph><paragraph id="HDA536C2F6F994889AF57EDB822955B26"><enum>(2)</enum><header>Medical
care</header><text>The term <term>medical care</term> has the meaning provided
in section 733(a)(2).</text>
</paragraph><paragraph id="H59534CBE0B8E4482A80471D4283E694E"><enum>(3)</enum><header>Health insurance
coverage</header><text>The term <term>health insurance coverage</term> has the
meaning provided in section 733(b)(1).</text>
</paragraph><paragraph id="H83877364CC714313ADCA09E547B9F19E"><enum>(4)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning provided in section 733(b)(2).</text>
</paragraph><paragraph id="H3E2EC01D35DC478EA0ED4CCAB0ED40C1"><enum>(5)</enum><header>Applicable
authority</header><text>The term <term>applicable authority</term> means the
Secretary, except that, in connection with any exercise of the Secretary’s
authority regarding which the Secretary is required under section 506(d) to
consult with a State, such term means the Secretary, in consultation with such
State.</text>
</paragraph><paragraph id="HA422514C97C64A3B9ADB6DC3DE425509"><enum>(6)</enum><header>Health
status-related factor</header><text>The term <term>health status-related
factor</term> has the meaning provided in section 733(d)(2).</text>
</paragraph><paragraph id="HE07BD81D1DFA473E8039489EF7A6523C"><enum>(7)</enum><header>Individual
market</header>
<subparagraph id="H17BE702494C94E7BB4B68A913A4F8C74"><enum>(A)</enum><header>In
general</header><text>The term <term>individual market</term> means the market
for health insurance coverage offered to individuals other than in connection
with a group health plan.</text>
</subparagraph><subparagraph id="H3C7AE04CAE9E4FEFA47164B5F5DF91FC"><enum>(B)</enum><header>Treatment of
very small groups</header>
<clause id="H15A9E1F3E9894AFABBD60E0F68B3ECEB"><enum>(i)</enum><header>In
general</header><text>Subject to clause (ii), such term includes coverage
offered in connection with a group health plan that has fewer than 2
participants as current employees or participants described in section
732(d)(3) on the first day of the plan year.</text>
</clause><clause id="HFA028D7BDE81459CBC75D94ABDF61A89"><enum>(ii)</enum><header>State
exception</header><text>Clause (i) shall not apply in the case of health
insurance coverage offered in a State if such State regulates the coverage
described in such clause in the same manner and to the same extent as coverage
in the small group market (as defined in section 2791(e)(5) of the
<act-name parsable-cite="PHSA">Public Health Service Act</act-name>) is
regulated by such State.</text>
</clause></subparagraph></paragraph><paragraph id="H0C03F7E4E5564201B65331EEA7E906B3"><enum>(8)</enum><header>Participating
employer</header><text>The term <term>participating employer</term> means, in
connection with an association health plan, any employer, if any individual who
is an employee of such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined under the terms
of the plan, of such individual) is or was covered under such plan in
connection with the status of such individual as such an employee, partner, or
self-employed individual in relation to the plan.</text>
</paragraph><paragraph id="H88BEE2606E9544F38EE9B6C6AC4866E0"><enum>(9)</enum><header>Applicable state
authority</header><text>The term <term>applicable State authority</term> means,
with respect to a health insurance issuer in a State, the State insurance
commissioner or official or officials designated by the State to enforce the
requirements of title XXVII of the <act-name parsable-cite="PHSA">Public Health
Service Act</act-name> for the State involved with respect to such
issuer.</text>
</paragraph><paragraph id="H66348959F7D84798844EBCF21E751168"><enum>(10)</enum><header>Qualified
actuary</header><text>The term <term>qualified actuary</term> means an
individual who is a member of the American Academy of Actuaries.</text>
</paragraph><paragraph id="H21187CA380CD4B318856D74C72356A17"><enum>(11)</enum><header>Affiliated
member</header><text>The term <term>affiliated member</term> means, in
connection with a sponsor—</text>
<subparagraph id="HA54D5CD3CE29436B9DC786035505AF4D"><enum>(A)</enum><text>a person who is
otherwise eligible to be a member of the sponsor but who elects an affiliated
status with the sponsor,</text>
</subparagraph><subparagraph id="H55457C258AA84F6A8FDA030CC146D743"><enum>(B)</enum><text>in the case of a
sponsor with members which consist of associations, a person who is a member of
any such association and elects an affiliated status with the sponsor,
or</text>
</subparagraph><subparagraph id="HC3475349E13848C29919EB3FA9521881"><enum>(C)</enum><text>in the case of an
association health plan in existence on the date of the enactment of the
<short-title>Small Business Health Fairness Act of
2011</short-title>, a person eligible to be a member of the sponsor or one of
its member associations.</text>
</subparagraph></paragraph><paragraph id="HFCC603C21DCE465B814DA3CCEAD97BED"><enum>(12)</enum><header>Large
employer</header><text>The term <term>large employer</term> means, in
connection with a group health plan with respect to a plan year, an employer
who employed an average of at least 51 employees on business days during the
preceding calendar year and who employs at least 2 employees on the first day
of the plan year.</text>
</paragraph><paragraph id="HA164349218084A9880813F39D6235227"><enum>(13)</enum><header>Small
employer</header><text>The term <term>small employer</term> means, in
connection with a group health plan with respect to a plan year, an employer
who is not a large employer.</text>
</paragraph></subsection><subsection id="H256F3713D7904F75A73003CD087548F2"><enum>(b)</enum><header>Rules of
Construction</header>
<paragraph id="HC61F23344720437C9DB385B1144498EC"><enum>(1)</enum><header>Employers and
employees</header><text>For purposes of determining whether a plan, fund, or
program is an employee welfare benefit plan which is an association health
plan, and for purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare benefit
plan—</text>
<subparagraph id="H42D2FF9FD26A43D2B62C1122664D9861"><enum>(A)</enum><text>in the case of a
partnership, the term <term>employer</term> (as defined in section 3(5))
includes the partnership in relation to the partners, and the term
<term>employee</term> (as defined in section 3(6)) includes any partner in
relation to the partnership; and</text>
</subparagraph><subparagraph id="H8B762777502F4DDD8633D7C84D8058F7"><enum>(B)</enum><text>in the case of a
self-employed individual, the term <term>employer</term> (as defined in section
3(5)) and the term <term>employee</term> (as defined in section 3(6)) shall
include such individual.</text>
</subparagraph></paragraph><paragraph id="H3659C4CD3F2745E3A389F0E1BB992529"><enum>(2)</enum><header>Plans, funds,
and programs treated as employee welfare benefit plans</header><text>In the
case of any plan, fund, or program which was established or is maintained for
the purpose of providing medical care (through the purchase of insurance or
otherwise) for employees (or their dependents) covered thereunder and which
demonstrates to the Secretary that all requirements for certification under
this part would be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan, fund, or program
shall be treated for purposes of this title as an employee welfare benefit plan
on and after the date of such
demonstration.</text>
</paragraph></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HBBC473CEA67A4D6F9E6D6BC3B44BF265"><enum>(b)</enum><header>Conforming
Amendments to Preemption Rules</header>
<paragraph id="H33FC7494C2A243B889C4FD97E14CCC7A"><enum>(1)</enum><text>Section 514(b)(6)
of such Act (29 U.S.C. 1144(b)(6)) is amended by adding at the end the
following new subparagraph:</text>
<quoted-block id="HF800662AA40C46A4ACA63DD9234A0FB2" style="OLC">
<subparagraph id="HB091F588C41943AE9E431EBE83DC5DDC" indent="up2"><enum>(E)</enum><text>The preceding subparagraphs of this
paragraph do not apply with respect to any State law in the case of an
association health plan which is certified under part
8.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H887DF716973B4CC39B69A0FDD0B9422C"><enum>(2)</enum><text>Section 514 of
such Act (29 U.S.C. 1144) is amended—</text>
<subparagraph id="H0D492FD197094365AC657F4B857B6EF2"><enum>(A)</enum><text>in subsection
(b)(4), by striking <quote>Subsection (a)</quote> and inserting
<quote>Subsections (a) and (d)</quote>;</text>
</subparagraph><subparagraph id="HE422E4604D034E408220AF16B7402719"><enum>(B)</enum><text>in subsection
(b)(5), by striking <quote>subsection (a)</quote> in subparagraph (A) and
inserting <quote>subsection (a) of this section and subsections (a)(2)(B) and
(b) of section 805</quote>, and by striking <quote>subsection (a)</quote> in
subparagraph (B) and inserting <quote>subsection (a) of this section or
subsection (a)(2)(B) or (b) of section 805</quote>;</text>
</subparagraph><subparagraph id="HA68352B43E1440F5BB7AE9932CCAFDD9"><enum>(C)</enum><text>by redesignating
subsections (d) and (e) as subsections (e) and (f), respectively; and</text>
</subparagraph><subparagraph id="H01890D3927F6444CAFA1FC4C3C49161B"><enum>(D)</enum><text>by inserting after
subsection (c) the following new subsection:</text>
<quoted-block id="H960AECB3E0FB4AF0B49592BCC6E6D56D" style="OLC">
<subsection id="H550546003EF54C2FBB1828EB6242E4E0"><enum>(d)</enum><paragraph commented="no" display-inline="yes-display-inline" id="HB733316ACCFD4CF5B9B895922D88632C"><enum>(1)</enum><text>Except as provided in
subsection (b)(4), the provisions of this title shall supersede any and all
State laws insofar as they may now or hereafter preclude, or have the effect of
precluding, a health insurance issuer from offering health insurance coverage
in connection with an association health plan which is certified under part
8.</text>
</paragraph><paragraph id="H737CF62F741A41B7BB4E5FEBB80779C6" indent="up1"><enum>(2)</enum><text>Except as provided in paragraphs (4)
and (5) of subsection (b) of this section—</text>
<subparagraph id="HD42E7E317BA54835A806F7B9F8EFE8D6"><enum>(A)</enum><text>In any case in which health insurance
coverage of any policy type is offered under an association health plan
certified under part 8 to a participating employer operating in such State, the
provisions of this title shall supersede any and all laws of such State insofar
as they may preclude a health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating in the State
which are eligible for coverage under such association health plan, whether or
not such other employers are participating employers in such plan.</text>
</subparagraph><subparagraph id="H00937FFDC610474BA76DC7F9BC14446D"><enum>(B)</enum><text>In any case in which health insurance
coverage of any policy type is offered in a State under an association health
plan certified under part 8 and the filing, with the applicable State authority
(as defined in section 812(a)(9)), of the policy form in connection with such
policy type is approved by such State authority, the provisions of this title
shall supersede any and all laws of any other State in which health insurance
coverage of such type is offered, insofar as they may preclude, upon the filing
in the same form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in such other
State.</text>
</subparagraph></paragraph><paragraph id="H8F3F8784BD894E068A67F1167DB2D96E" indent="up1"><enum>(3)</enum><text>Nothing in subsection (b)(6)(E) or
the preceding provisions of this subsection shall be construed, with respect to
health insurance issuers or health insurance coverage, to supersede or impair
the law of any State—</text>
<subparagraph id="H20FB828B01814A7F906519743583A71A"><enum>(A)</enum><text>providing solvency standards or
similar standards regarding the adequacy of insurer capital, surplus, reserves,
or contributions, or</text>
</subparagraph><subparagraph id="H490C2AB1EBBA4690AF59AF69216A01BA"><enum>(B)</enum><text>relating to prompt payment of
claims.</text>
</subparagraph></paragraph><paragraph id="H9061B8C584A54B268EFD0ED360600E82" indent="up1"><enum>(4)</enum><text>For additional provisions relating to
association health plans, see subsections (a)(2)(B) and (b) of section
805.</text>
</paragraph><paragraph id="HB8E74296810B4CDD97EA60DD720FD0AC" indent="up1"><enum>(5)</enum><text>For purposes of this subsection, the
term <term>association health plan</term> has the meaning provided in section
801(a), and the terms <term>health insurance coverage</term>,
<term>participating employer</term>, and <term>health insurance issuer</term>
have the meanings provided such terms in section 812,
respectively.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H1B734FF5CA9A466A94227F55590D5374"><enum>(3)</enum><text>Section
514(b)(6)(A) of such Act (29 U.S.C. 1144(b)(6)(A)) is amended—</text>
<subparagraph id="H522174DF2A7845EE90D04684AD51D07C"><enum>(A)</enum><text>in clause (i)(II),
by striking <quote>and</quote> at the end;</text>
</subparagraph><subparagraph id="H15DC02A205A745D6B7DF9C7DA1D62E89"><enum>(B)</enum><text>in clause (ii), by
inserting <quote>and which does not provide medical care (within the meaning of
section 733(a)(2)),</quote> after <quote>arrangement,</quote>, and by striking
<quote>title.</quote> and inserting <quote>title, and</quote>; and</text>
</subparagraph><subparagraph id="H3122D7C2B27249A78E416A4FF07D1499"><enum>(C)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block id="H4501EEFE3F1F4BA1BD7768693A78E489" style="OLC">
<clause id="H820ECF25EADA4EF59F61F362D372BB89" indent="up2"><enum>(iii)</enum><text>subject to subparagraph (E), in the
case of any other employee welfare benefit plan which is a multiple employer
welfare arrangement and which provides medical care (within the meaning of
section 733(a)(2)), any law of any State which regulates insurance may
apply.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="HC66D176232D24464A8C09B9A5905D481"><enum>(4)</enum><text>Section 514(e) of
such Act (as redesignated by paragraph (2)(C)) is amended—</text>
<subparagraph id="H6576865734CF43FE98C18BF37E9FB18F"><enum>(A)</enum><text>by striking
<quote>Nothing</quote> and inserting <quote>(1) Except as provided in paragraph
(2), nothing</quote>; and</text>
</subparagraph><subparagraph id="HCB7882673A8D4366B60AB5A2B960B0AF"><enum>(B)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block id="H8A8391FC2A964488AD2A9C8EF64F399B" style="OLC">
<paragraph id="HDCB4888A6733408CB37A577A8C095ED9" indent="up1"><enum>(2)</enum><text>Nothing in any other provision of law
enacted on or after the date of the enactment of the
<short-title>Small Business Health Fairness Act of
2011</short-title> shall be construed to alter, amend, modify, invalidate,
impair, or supersede any provision of this title, except by specific
cross-reference to the affected
section.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="HB433323072784AAEBA800BA8B9FB00AD"><enum>(c)</enum><header>Plan
Sponsor</header><text>Section 3(16)(B) of such Act (29 U.S.C. 102(16)(B)) is
amended by adding at the end the following new sentence: <quote>Such term also
includes a person serving as the sponsor of an association health plan under
part 8.</quote>.</text>
</subsection><subsection id="HDFEE0DC162A04013AFCE741A68DC429A"><enum>(d)</enum><header>Disclosure of
Solvency Protections Related to Self-Insured and Fully Insured Options Under
Association Health Plans</header><text>Section 102(b) of such Act (29 U.S.C.
102(b)) is amended by adding at the end the following: <quote>An association
health plan shall include in its summary plan description, in connection with
each benefit option, a description of the form of solvency or guarantee fund
protection secured pursuant to this Act or applicable State law, if
any.</quote>.</text>
</subsection><subsection id="H2EE7A1531B3E446F9AC17BB65EA0154F"><enum>(e)</enum><header>Savings
Clause</header><text>Section 731(c) of such Act is amended by inserting
<quote>or part 8</quote> after <quote>this part</quote>.</text>
</subsection><subsection id="HEA260181C7084701924962A4A3FC266E"><enum>(f)</enum><header>Report to the
Congress Regarding Certification of Self-Insured Association Health
Plans</header><text>Not later than January 1, 2014, the Secretary of Labor
shall report to the Committee on Education and the Workforce of the House of
Representatives and the Committee on Health, Education, Labor, and Pensions of
the Senate the effect association health plans have had, if any, on reducing
the number of uninsured individuals.</text>
</subsection><subsection id="H7FDF7C07901C4C9EB15C32CCD26CB7E1"><enum>(g)</enum><header>Clerical
Amendment</header><text>The table of contents in section 1 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> is amended by inserting after the item relating to section 734
the following new items:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H7AEE4748CBE24F86ABACB0779CBD3999" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="part">Part 8—Rules Governing Association Health
Plans</toc-entry>
<toc-entry level="section">801. Association health plans.</toc-entry>
<toc-entry level="section">802. Certification of association health
plans.</toc-entry>
<toc-entry level="section">803. Requirements relating to sponsors and
boards of trustees.</toc-entry>
<toc-entry level="section">804. Participation and coverage
requirements.</toc-entry>
<toc-entry level="section">805. Other requirements relating to plan
documents, contribution rates, and benefit options.</toc-entry>
<toc-entry level="section">806. Maintenance of reserves and
provisions for solvency for plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">807. Requirements for application and
related requirements.</toc-entry>
<toc-entry level="section">808. Notice requirements for voluntary
termination.</toc-entry>
<toc-entry level="section">809. Corrective actions and mandatory
termination.</toc-entry>
<toc-entry level="section">810. Trusteeship by the Secretary of
insolvent association health plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">811. State assessment
authority.</toc-entry>
<toc-entry level="section">812. Definitions and rules of
construction.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="HCDAA01DF85C741FA90D69EA8BC5A4E2D"><enum>622.</enum><header>Clarification
of treatment of single employer arrangements</header><text display-inline="no-display-inline">Section 3(40)(B) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (29 U.S.C. 1002(40)(B)) is amended—</text>
<paragraph id="H7B2A95ED0F9246288F7C58F38EB3DE80"><enum>(1)</enum><text>in clause (i), by
inserting after <quote>control group,</quote> the following: <quote>except
that, in any case in which the benefit referred to in subparagraph (A) consists
of medical care (as defined in section 812(a)(2)), two or more trades or
businesses, whether or not incorporated, shall be deemed a single employer for
any plan year of such plan, or any fiscal year of such other arrangement, if
such trades or businesses are within the same control group during such year or
at any time during the preceding 1-year period,</quote>;</text>
</paragraph><paragraph id="H7663940CFA80417BB3CDDBF5DC16AE3D"><enum>(2)</enum><text>in clause (iii),
by striking <quote>(iii) the determination</quote> and inserting the
following:</text>
<quoted-block id="HF4333C33E72B40BA8156C14105A2F2D0" style="OLC">
<clause id="HA3BC22A0ABE04E71B624AADFD7439468" indent="up2"><enum>(iii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H6D7A5B201410474B84A6565E3CE3BF44"><enum>(I)</enum><text>in any case in which the
benefit referred to in subparagraph (A) consists of medical care (as defined in
section 812(a)(2)), the determination of whether a trade or business is under
<quote>common control</quote> with another trade or business shall be
determined under regulations of the Secretary applying principles consistent
and coextensive with the principles applied in determining whether employees of
two or more trades or businesses are treated as employed by a single employer
under section 4001(b), except that, for purposes of this paragraph, an interest
of greater than 25 percent may not be required as the minimum interest
necessary for common control, or</text>
</subclause><subclause id="H81A27A4C71424CA4833A60D82A02CDC6" indent="up1"><enum>(II)</enum><text>in any other case, the
determination</text>
</subclause></clause><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph id="H80483762C4B5431FA56E57C0EEC9110B"><enum>(3)</enum><text>by redesignating
clauses (iv) and (v) as clauses (v) and (vi), respectively; and</text>
</paragraph><paragraph id="H1556E5481FBD46E092B6A15368386C39"><enum>(4)</enum><text>by inserting after
clause (iii) the following new clause:</text>
<quoted-block id="H95B4E4A80D3746CEA9093EE8254CF2A2" style="OLC">
<clause id="H3704AFCD80DB46768BC61871BF01477F" indent="up2"><enum>(iv)</enum><text>in any case in which the benefit
referred to in subparagraph (A) consists of medical care (as defined in section
812(a)(2)), in determining, after the application of clause (i), whether
benefits are provided to employees of two or more employers, the arrangement
shall be treated as having only one participating employer if, after the
application of clause (i), the number of individuals who are employees and
former employees of any one participating employer and who are covered under
the arrangement is greater than 75 percent of the aggregate number of all
individuals who are employees or former employees of participating employers
and who are covered under the
arrangement,</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="H17799BBE96BF47A69C128C63081E0B9A"><enum>623.</enum><header>Enforcement
provisions relating to association health plans</header>
<subsection id="HD11CC4D2D0B74AF687D456C55AC12C5E"><enum>(a)</enum><header>Criminal
Penalties for Certain Willful Misrepresentations</header><text>Section 501 of
the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (29 U.S.C. 1131) is amended—</text>
<paragraph id="HDC9C94E3741445E6B38C103E17E80454"><enum>(1)</enum><text>by inserting
<quote>(a)</quote> after <quote>Sec. 501.</quote>; and</text>
</paragraph><paragraph id="H46D5C524B5D14243A5BCB8E02762AF46"><enum>(2)</enum><text>by adding at the
end the following new subsection:</text>
<quoted-block id="HE415B922B8C24B2BB9D0D5DEF813306A" style="OLC">
<subsection id="HE040CC6DB31E474FA80F04CE44429F47"><enum>(b)</enum><text>Any person who
willfully falsely represents, to any employee, any employee’s beneficiary, any
employer, the Secretary, or any State, a plan or other arrangement established
or maintained for the purpose of offering or providing any benefit described in
section 3(1) to employees or their beneficiaries as—</text>
<paragraph id="HB7893E8A6BFA4575A7645BDDF760709C"><enum>(1)</enum><text>being an
association health plan which has been certified under part 8;</text>
</paragraph><paragraph id="H0A55E34B27A24740810EC10C0C04EE3F"><enum>(2)</enum><text>having been
established or maintained under or pursuant to one or more collective
bargaining agreements which are reached pursuant to collective bargaining
described in section 8(d) of the National Labor Relations Act (29 U.S.C.
158(d)) or paragraph fourth of section 2 of the Railway Labor Act (45 U.S.C.
152, paragraph fourth) or which are reached pursuant to labor-management
negotiations under similar provisions of State public employee relations laws;
or</text>
</paragraph><paragraph id="H25451FAF9BB2431591ED55F57F8D1A40"><enum>(3)</enum><text>being a plan or
arrangement described in section 3(40)(A)(i),</text>
</paragraph><continuation-text continuation-text-level="subsection">shall,
upon conviction, be imprisoned not more than 5 years, be fined under title 18,
United States Code, or
both.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H7D0F5A0664914DF6B12E224361361CFE"><enum>(b)</enum><header>Cease Activities
Orders</header><text>Section 502 of such Act (29 U.S.C. 1132) is amended by
adding at the end the following new subsection:</text>
<quoted-block id="H03745A3EE8864DE58C6BFDC42E2034B6" style="OLC">
<subsection id="H7A1ACC3564044DBB9D880651828D2FB1"><enum>(n)</enum><header>Association
Health Plan Cease and Desist Orders</header>
<paragraph id="HE23A2B7723504B7AA8F793046BD39442"><enum>(1)</enum><header>In
general</header><text>Subject to paragraph (2), upon application by the
Secretary showing the operation, promotion, or marketing of an association
health plan (or similar arrangement providing benefits consisting of medical
care (as defined in section 733(a)(2))) that—</text>
<subparagraph id="HF0C5A2373301459D9EF2E646E9FAAEE3"><enum>(A)</enum><text>is not certified
under part 8, is subject under section 514(b)(6) to the insurance laws of any
State in which the plan or arrangement offers or provides benefits, and is not
licensed, registered, or otherwise approved under the insurance laws of such
State; or</text>
</subparagraph><subparagraph id="H3DDD39CEC1874DD18D2D86CCB87F8BBF"><enum>(B)</enum><text>is an association
health plan certified under part 8 and is not operating in accordance with the
requirements under part 8 for such certification,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">a district
court of the United States shall enter an order requiring that the plan or
arrangement cease activities.</continuation-text></paragraph><paragraph id="H960A77FFA8434043B45EE08A0DF06CB6"><enum>(2)</enum><header>Exception</header><text>Paragraph
(1) shall not apply in the case of an association health plan or other
arrangement if the plan or arrangement shows that—</text>
<subparagraph id="HAB0732983906442699A02FB252C4CC13"><enum>(A)</enum><text>all benefits under
it referred to in paragraph (1) consist of health insurance coverage;
and</text>
</subparagraph><subparagraph id="H0D5645DAE9214059AF4028180426EFAB"><enum>(B)</enum><text>with respect to
each State in which the plan or arrangement offers or provides benefits, the
plan or arrangement is operating in accordance with applicable State laws that
are not superseded under section 514.</text>
</subparagraph></paragraph><paragraph id="H109082AAAC204FC58F9464F9365339E0"><enum>(3)</enum><header>Additional
equitable relief</header><text>The court may grant such additional equitable
relief, including any relief available under this title, as it deems necessary
to protect the interests of the public and of persons having claims for
benefits against the
plan.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H95C81405E434451A832EC11188B3812F"><enum>(c)</enum><header>Responsibility
for Claims Procedure</header><text>Section 503 of such Act (29 U.S.C. 1133) is
amended by inserting <quote>(a) <header-in-text level="subsection" style="OLC">In general</header-in-text>.—</quote> before <quote>In
accordance</quote>, and by adding at the end the following new
subsection:</text>
<quoted-block id="H3B027945DEFA400EB2906C68EE829236" style="OLC">
<subsection id="H749BA48BF97249BC9B3E594033E3F070"><enum>(b)</enum><header>Association
Health Plans</header><text>The terms of each association health plan which is
or has been certified under part 8 shall require the board of trustees or the
named fiduciary (as applicable) to ensure that the requirements of this section
are met in connection with claims filed under the
plan.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H2246273739DE4E92B98522F11BD67CC2"><enum>624.</enum><header>Cooperation
between Federal and State authorities</header><text display-inline="no-display-inline">Section 506 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (29 U.S.C. 1136) is amended by adding at the end the following
new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HA206460A88164F2AA95EB0BEA124B4AE" style="OLC">
<subsection id="HC5ED5D3EE53245C4BE01B16F812A7993"><enum>(d)</enum><header>Consultation
With States With Respect to Association Health Plans</header>
<paragraph id="H2867A2FFFDC54737AA1A0C00D926E60B"><enum>(1)</enum><header>Agreements with
states</header><text>The Secretary shall consult with the State recognized
under paragraph (2) with respect to an association health plan regarding the
exercise of—</text>
<subparagraph id="HA1802D015494420BBAFC2DF28513DB1B"><enum>(A)</enum><text>the Secretary’s
authority under sections 502 and 504 to enforce the requirements for
certification under part 8; and</text>
</subparagraph><subparagraph id="H04C69DCF59FA471BB051C2B4C1243DAD"><enum>(B)</enum><text>the Secretary’s
authority to certify association health plans under part 8 in accordance with
regulations of the Secretary applicable to certification under part 8.</text>
</subparagraph></paragraph><paragraph id="H19659CE3F5F74E68A062EC154106824F"><enum>(2)</enum><header>Recognition of
primary domicile state</header><text>In carrying out paragraph (1), the
Secretary shall ensure that only one State will be recognized, with respect to
any particular association health plan, as the State with which consultation is
required. In carrying out this paragraph—</text>
<subparagraph id="H16320FF462A0430FBF2B6D73ACB5E65B"><enum>(A)</enum><text>in the case of a
plan which provides health insurance coverage (as defined in section
812(a)(3)), such State shall be the State with which filing and approval of a
policy type offered by the plan was initially obtained, and</text>
</subparagraph><subparagraph id="HE8551D2937964AEEA701DA5F2D64C11A"><enum>(B)</enum><text>in any other case,
the Secretary shall take into account the places of residence of the
participants and beneficiaries under the plan and the State in which the trust
is
maintained.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H2DEC29A0C88C4FD6BF647DD52E450B87"><enum>625.</enum><header>Effective date
and transitional and other rules</header>
<subsection id="H532F8E31CC8F4A86B0AC883DF705EE9E"><enum>(a)</enum><header>Effective
Date</header><text>The amendments made by this chapter shall take effect 1 year
after the date of the enactment of this Act. The Secretary of Labor shall first
issue all regulations necessary to carry out the amendments made by this
chapter within 1 year after the date of the enactment of this Act.</text>
</subsection><subsection id="H3C634C0E0C3A44E7A2E48BF51262C493"><enum>(b)</enum><header>Treatment of
Certain Existing Health Benefits Programs</header>
<paragraph id="H6D5DF122BA1B4124A900E6DDB444AAE5"><enum>(1)</enum><header>In
general</header><text>In any case in which, as of the date of the enactment of
this Act, an arrangement is maintained in a State for the purpose of providing
benefits consisting of medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers make
contributions to such arrangement, such arrangement has been in existence for
at least 10 years, and such arrangement is licensed under the laws of one or
more States to provide such benefits to its participating employers, upon the
filing with the applicable authority (as defined in section 812(a)(5) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (as amended by this chapter)) by the arrangement of an
application for certification of the arrangement under part 8 of subtitle B of
title I of such Act—</text>
<subparagraph id="H851219FD4B9E4A51B82A1F74B4269BB3"><enum>(A)</enum><text>such arrangement
shall be deemed to be a group health plan for purposes of title I of such
Act;</text>
</subparagraph><subparagraph id="HB8092AAA4F4C42918690841790146C5B"><enum>(B)</enum><text>the requirements
of sections 801(a) and 803(a) of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> shall be deemed met with
respect to such arrangement;</text>
</subparagraph><subparagraph id="H09AF20F4B7C9460A827096F52F44446E"><enum>(C)</enum><text>the requirements
of section 803(b) of such Act shall be deemed met, if the arrangement is
operated by a board of directors which—</text>
<clause id="H332212AEDFCD4795958007B22323C5CA"><enum>(i)</enum><text>is
elected by the participating employers, with each employer having one vote;
and</text>
</clause><clause id="H3B5CC0E8E93F4E639C189CA95FF28670"><enum>(ii)</enum><text>has
complete fiscal control over the arrangement and which is responsible for all
operations of the arrangement;</text>
</clause></subparagraph><subparagraph id="H27CEC53DEAF541FAB727D51F0688F271"><enum>(D)</enum><text>the requirements
of section 804(a) of such Act shall be deemed met with respect to such
arrangement; and</text>
</subparagraph><subparagraph id="H0F585A185D2F4B7D932A034671E16717"><enum>(E)</enum><text>the arrangement
may be certified by any applicable authority with respect to its operations in
any State only if it operates in such State on the date of
certification.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">The
provisions of this subsection shall cease to apply with respect to any such
arrangement at such time after the date of the enactment of this Act as the
applicable requirements of this subsection are not met with respect to such
arrangement.</continuation-text></paragraph><paragraph id="H231E5F3BB27249F889008DEAF80A162E"><enum>(2)</enum><header>Definitions</header><text>For
purposes of this subsection, the terms <term>group health plan</term>,
<term>medical care</term>, and <term>participating employer</term> shall have
the meanings provided in section 812 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name>, except that the reference in paragraph (7) of such section to
an <quote>association health plan</quote> shall be deemed a reference to an
arrangement referred to in this subsection.</text>
</paragraph></subsection></section></chapter><chapter id="H5D6F5CB92F9F441A9D72449ED5176822"><enum>2</enum><header>Targeted Efforts
to Expand Access</header>
<section id="H2C69BF9DB92E40529488C86D7920F557"><enum>631.</enum><header>Extending
coverage of dependents</header>
<subsection id="H326283AAFAA049A3A2D9A69153437DE0"><enum>(a)</enum><header>Employee
Retirement Income Security Act of 1974</header>
<paragraph id="H657BAE1E77A04425B0BAFE37C0DC4952"><enum>(1)</enum><header>In
general</header><text>Part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by inserting after section
2714 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H1E215AE8610741318B2E178776ABFBA5" style="OLC">
<section id="HD755CC3948FF42E5AEAFD6AFA07C7F98"><enum>715.</enum><header>Extending
coverage of dependents</header>
<subsection id="H6F5902A1A47E4765A9808992D552D550"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case of a
group health plan, or health insurance coverage offered in connection with a
group health plan, that treats as a beneficiary under the plan an individual
who is a dependent child of a participant or beneficiary under the plan, the
plan or coverage shall continue to treat the individual as a dependent child
without regard to the individual’s age through at least the end of the plan
year in which the individual turns an age specified in the plan, but not less
than 23 years of age.</text>
</subsection><subsection id="HB534091E3C84449BAEADD4BFBDE78DFE"><enum>(b)</enum><header>Construction</header><text>Nothing
in this section shall be construed as requiring a group health plan to provide
benefits for dependent children as beneficiaries under the plan or to require a
participant to elect coverage of dependent
children.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H84E400705BA242D3B723199B6D5656CF"><enum>(2)</enum><header>Clerical
amendment</header><text>The table of contents of such Act is amended by
inserting after the item relating to section 714 the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H4A564B1E1D9A4D03B3605A0A853E3310" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 715. Extending coverage of
dependents.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H46B9C75C668E49BCAE65A15673B120ED"><enum>(b)</enum><header>PHSA</header><text display-inline="yes-display-inline">Title XXVII of the Public Health Service
Act is amended by inserting after section 2707 the following new
section:</text>
<quoted-block display-inline="no-display-inline" id="HD733F55F672A4EA8AC9A4BB2F4A2564E" style="OLC">
<section id="HC1304CBA7DE2402687FB0699EBCD66BE"><enum>2708.</enum><header>Extending
coverage of dependents</header>
<subsection id="HFA2FD9A577014D3A9296CDF08A4C2157"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case of a
group health plan, or health insurance coverage offered in connection with a
group health plan, that treats as a beneficiary under the plan an individual
who is a dependent child of a participant or beneficiary under the plan, the
plan or coverage shall continue to treat the individual as a dependent child
without regard to the individual’s age through at least the end of the plan
year in which the individual turns an age specified in the plan, but not less
than 23 years of age.</text>
</subsection><subsection id="H5EC47842F9F54BEDAF67A2D7527DE081"><enum>(b)</enum><header>Construction</header><text display-inline="yes-display-inline">Nothing in this section shall be construed
as requiring a group health plan to provide benefits for dependent children as
beneficiaries under the plan or to require a participant to elect coverage of
dependent
children.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H0FC28EF1DFF54AB7B011BD334ACBA721"><enum>(c)</enum><header>IRC</header>
<paragraph id="H30C90FFD2C484966B48F16A1FA37489A"><enum>(1)</enum><header>In
general</header><text>Subchapter B of chapter 100 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H0641BDDC88BE470FAF34C76EBB19A72B" style="OLC">
<section id="H25D66AEE9F8E4399BFCECE5EABEF5156"><enum>9814.</enum><header>Extending
coverage of dependents</header>
<subsection id="HB0DD141FF0774BFC9E040E0D487A3580"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case of a
group health plan that treats as a beneficiary under the plan an individual who
is a dependent child of a participant or beneficiary under the plan, the plan
shall continue to treat the individual as a dependent child without regard to
the individual’s age through at least the end of the plan year in which the
individual turns an age specified in the plan, but not less than 23 years of
age.</text>
</subsection><subsection id="HA77FDE6578384C0F910EBC1C53C64472"><enum>(b)</enum><header>Construction</header><text display-inline="yes-display-inline">Nothing in this section shall be construed
as requiring a group health plan to provide coverage for dependent children as
beneficiaries under the plan or to require a participant to elect coverage of
dependent
children.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HD86AAB560ED64C57A64F22E37DBD362F"><enum>(2)</enum><header>Clerical
amendment</header><text>The table of sections in such subchapter is amended by
adding at the end the following new item:</text>
<quoted-block display-inline="no-display-inline" id="HFB6194A30F8047A0A9EC165669F1FF34" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 9814. Extending coverage of
dependents.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HA858BD5F3959478EB9C1999D869C86F5"><enum>(d)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to group health plans for plan years beginning more
than 3 months after the date of the enactment of this Act and shall apply to
individuals who are dependent children under a group health plan, or health
insurance coverage offered in connection with such a plan, on or after such
date.</text>
</subsection></section><section id="H3ABE4D35801542F6B005EEB13F7BD4ED"><enum>632.</enum><header>Allowing
auto-enrollment for employer sponsored coverage</header>
<subsection id="H542CB01F11EE4DEDAA8385D5FE29AD1E"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">No State shall
establish a law that prevents an employer from instituting auto-enrollment for
coverage of a participant or beneficiary, including current employees, under a
group health plan, or health insurance coverage offered in connection with such
a plan, so long as the participant or beneficiary has the option of declining
such coverage.</text>
</subsection><subsection id="HF62B348A26344D8F98DE32C6D620F893"><enum>(b)</enum><header>Auto-Enrollment</header>
<paragraph id="H528C485F47B4454D88B9C997D21CE38D"><enum>(1)</enum><header>Notice
required</header><text>Employers with auto-enrollment under a group health plan
or health insurance coverage shall provide annual notification, within a
reasonable period before the beginning of each plan year, to each employee
eligible to participate in the plan. The notice shall explain the employee
contribution to such plan and the employee’s right to decline coverage.</text>
</paragraph><paragraph id="H9154AD340C5F4E1188DBAB3176FDEC00"><enum>(2)</enum><header>Treatment of
non-action</header><text>After a reasonable period of time after receipt of the
notice, if an employee fails to make an affirmative declaration declining
coverage, then such an employee may be enrolled in the group health plan or
health insurance coverage offered in connection with such a plan.”.</text>
</paragraph></subsection><subsection id="HABD4AB06A902454184AB068AE5390BE4"><enum>(c)</enum><header>Construction</header><text display-inline="yes-display-inline">Nothing in this section shall be construed
to supersede State law which establishes, implements, or continues in effect
any standard or requirement relating to employers in connection with payroll or
the sponsoring of employer sponsored health insurance coverage except to the
extent that such standard or requirement prevents an employer from instituting
the auto-enrollment described in subsection (a).</text>
</subsection></section></chapter></subtitle><enum>VII</enum><header>Stopping
Medicare, Waste, Fraud, and Abuse and Increasing Penalties for Abusers</header>
<section id="H9625093F6F7249C2934D3338BEB21D9B"><enum>701.</enum><header>Increased civil
money penalties and criminal fines for Medicare fraud and abuse</header>
<subsection id="H2B2176809B8E468C93C65AA883C06C91"><enum>(a)</enum><header>Increased Civil
Money Penalties</header><text>Section 1128A of the Social Security Act (42
U.S.C. 1320a–7a) is amended—</text>
<paragraph id="HA57C86F341004248A5E836C17DA95894"><enum>(1)</enum><text>in subsection (a),
in the matter following paragraph (10)—</text>
<subparagraph id="HE44E0A9B373246A69521DBB45FC29D8A"><enum>(A)</enum><text>by striking
<quote>$10,000</quote> each place it appears and inserting
<quote>$20,000</quote>;</text>
</subparagraph><subparagraph id="H262C2E408F3B4FB2873C794407A85B9B"><enum>(B)</enum><text>by striking
<quote>$15,000</quote> and inserting <quote>$30,000</quote>; and</text>
</subparagraph><subparagraph id="H56154604A62A4B07A26699F48BD1BDCD"><enum>(C)</enum><text display-inline="yes-display-inline">by striking <quote>$50,000</quote> each
place it appears and inserting <quote>$100,000</quote>; and</text>
</subparagraph></paragraph><paragraph id="HD8E5F703128A4B33A8447BA948A6082A"><enum>(2)</enum><text>in subsection
(b)—</text>
<subparagraph id="H6391BAF66B4D438193DA58D522845147"><enum>(A)</enum><text>in paragraph (1),
in the flush matter following subparagraph (B), by striking
<quote>$2,000</quote> and inserting <quote>$4,000</quote>;</text>
</subparagraph><subparagraph id="H97AE8FDF7B4B49F6986FA498CC3D2C72"><enum>(B)</enum><text>in paragraph (2),
by striking <quote>$2,000</quote> and inserting <quote>$4,000</quote>;
and</text>
</subparagraph><subparagraph id="H8B378A06597241748820CE0EDE53ED2F"><enum>(C)</enum><text>in paragraph
(3)(A)(i), by striking <quote>$5,000</quote> and inserting
<quote>$10,000</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="H4C41268165764CDDAEF72AF94BF54E7D"><enum>(b)</enum><header>Increased
Criminal Fines</header><text>Section 1128B of the Social Security Act (42
U.S.C. 1320a–7b) is amended—</text>
<paragraph id="HC9945AD644CC4DB7BB8F48810BDED070"><enum>(1)</enum><text>in subsection (a),
in the flush matter following paragraph (6)—</text>
<subparagraph id="HE3AD241BFB7F4B00AAB9F529332B5E45"><enum>(A)</enum><text>by striking
<quote>$25,000</quote> and inserting <quote>$100,000</quote>; and</text>
</subparagraph><subparagraph id="H9B3210F09FA44E899BE091C9A57E6667"><enum>(B)</enum><text>by striking
<quote>$10,000</quote> and inserting <quote>$20,000</quote>;</text>
</subparagraph></paragraph><paragraph id="HA9BE2CA5F63D4EF8AA11A1FFF1FE6759"><enum>(2)</enum><text>in subsection
(b)—</text>
<subparagraph id="H2BC6388F8CED4B7CB8FBD1124909199A"><enum>(A)</enum><text>in paragraph (1),
in the flush matter following subparagraph (B), by striking
<quote>$25,000</quote> and inserting <quote>$100,000</quote>; and</text>
</subparagraph><subparagraph id="HFAA440C40E6548E3A6795141C1446C4C"><enum>(B)</enum><text>in paragraph (2),
in the flush matter following subparagraph (B), by striking
<quote>$25,000</quote> and inserting <quote>$100,000</quote>;</text>
</subparagraph></paragraph><paragraph id="HBB5EF2A12AA04E568A84FD4FDBD1F57E"><enum>(3)</enum><text>in subsection (c),
by striking <quote>$25,000</quote> and inserting
<quote>$100,000</quote>;</text>
</paragraph><paragraph id="H65F193023EEC4C52A5FF3EC38B08D748"><enum>(4)</enum><text>in subsection (d),
in the second flush matter following subparagraph (B), by striking
<quote>$25,000</quote> and inserting <quote>$100,000</quote>; and</text>
</paragraph><paragraph id="H6B5AA0A6161C4815947B571383924E73"><enum>(5)</enum><text>in subsection (e),
by striking <quote>$2,000</quote> and inserting <quote>$4,000</quote>.</text>
</paragraph></subsection><subsection id="HF6333356DBBC4E7784CC23F62502CDA5"><enum>(c)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to civil
money penalties and fines imposed for actions taken on or after the date of
enactment of this Act.</text>
</subsection></section><section id="HBAB03ADA5AF042E098845794A42B73C0"><enum>702.</enum><header>Increased
sentences for felonies involving Medicare fraud and abuse</header>
<subsection id="HC7A19C1CE6714F8B8E466E73D30783DC"><enum>(a)</enum><header>False Statements
and Representations</header><text>Section 1128B(a) of the Social Security Act
(42 U.S.C. 1320a–7b(a)) is amended, in clause (i) of the flush matter following
paragraph (6), by striking <quote>not more than five years</quote> and
inserting <quote>not more than 10 years</quote>.</text>
</subsection><subsection id="H843406789286424A9FFE9D273A82AE8D"><enum>(b)</enum><header>Anti-Kickback</header><text>Section
1128B(b) of the Social Security Act (42 U.S.C. 1320a–7b(b)) is amended—</text>
<paragraph id="HB2DDDE7BB95B4B7099810B9CBD89141E"><enum>(1)</enum><text>in paragraph (1),
in the flush matter following subparagraph (B), by striking <quote>not more
than five years</quote> and inserting <quote>not more than 10 years</quote>;
and</text>
</paragraph><paragraph id="H73166244D61F489F865E650C9E6C9C42"><enum>(2)</enum><text>in paragraph (2),
in the flush matter following subparagraph (B), by striking <quote>not more
than five years</quote> and inserting <quote>not more than 10
years</quote>.</text>
</paragraph></subsection><subsection id="H744B7B2A458D47ADAEA702B545D6E6AC"><enum>(c)</enum><header>False Statement
or Representation With Respect to Conditions or Operations of
Facilities</header><text>Section 1128B(c) of the Social Security Act (42 U.S.C.
1320a–7b(c)) is amended by striking <quote>not more than five years</quote> and
inserting <quote>not more than 10 years</quote>.</text>
</subsection><subsection id="H208ED88D7D9F43279883B0F7B156A5AB"><enum>(d)</enum><header>Excess
Charges</header><text>Section 1128B(d) of the Social Security Act (42 U.S.C.
1320a–7b(d)) is amended, in the second flush matter following subparagraph (B),
by striking <quote>not more than five years</quote> and inserting <quote>not
more than 10 years</quote>.</text>
</subsection><subsection id="H5B585CF095B54D4A8F5CFDD77A42571D"><enum>(e)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to criminal
penalties imposed for actions taken on or after the date of enactment of this
Act.</text>
</subsection></section><section id="H002C135861394D9E87747D5C4F922E99"><enum>703.</enum><header>Other DME
supplier anti-fraud and abuse provisions</header>
<subsection id="H9415DC960E014BAF9BBC6CFA15C240A3"><enum>(a)</enum><header>Mandatory
periodic site inspections for DME suppliers</header><text>The Secretary of
Health and Human Services shall require, as a condition for participation of
suppliers of durable medical equipment under part B of title XVIII of the
Social Security Act—</text>
<paragraph id="H6578266FEADF47A1A372C296FD10DD56"><enum>(1)</enum><text>a
site inspection to be conducted for each such supplier that has not previously
participated under such part within 6 months of the date of its initial
participation under such part; and</text>
</paragraph><paragraph id="H61CB733B287F4C47B77F198DACDCC8EB"><enum>(2)</enum><text>a
site inspection at least every 2 years to be conducted for each such supplier
that has previously participated under such part.</text>
</paragraph></subsection><subsection id="HB86577C90E3E4388927ABF9A22C56FA3"><enum>(b)</enum><header>Post-Payment
review</header><text display-inline="yes-display-inline">The Secretary also
shall provide conduct post-payment reviews of claims for items and services
furnished under such part by durable medical equipment suppliers that begin
participation under such part after the date of the enactment of this Act. Such
reviews shall be conducted not less often than after the first 6, 12, and 18
months of such participation.</text>
</subsection><subsection id="H6E90025FE5BA42DAB32F0F5D1946B982"><enum>(c)</enum><header>Availability of
funds</header><text>Funds in the Health Care Fraud and Abuse Control Account
under section 1817(k) of the Social Security Act (42 U.S.C. 1395i(k)) shall be
available for the conduct of site inspections and post-payment review required
under this section.</text>
</subsection><subsection id="HE084602F80434DBE8C731418AA8FD907"><enum>(d)</enum><header>Treatment of
skilled nursing facilities</header><text>In this section, a skilled nursing
facility shall not be treated as a supplier of durable medical equipment with
respect to any individual who is a resident of such facility.</text>
</subsection></section><section id="H26D49323222141D8B35FEB7958219C21"><enum>704.</enum><header>Retention of
certain fraud and abuse provisions</header><text display-inline="no-display-inline">Section 101 shall not apply to the
provisions (including amendments made by) title VI of Public Law 111–148, other
than subtitles D, H, and I of such title, and provisions of Public Law 111–152
insofar as they relative to such provisions.</text>
</section><section id="HADFEF7445EDF4550ACB28D9FC3C5DF0C"><enum>705.</enum><header>Ensuring timely
enforcement of Medicare secondary payer requirements in liability
cases</header><text display-inline="no-display-inline">The Secretary of the
Health and Human Services, acting through the Administrator of the Centers for
Medicare & Medicaid Services, shall affirmatively establish, for initial
implementation not later than 90 days after the date of the enactment of this
Act, a plan to require applicable plans (as defined in subparagraph (F) of
section 1862(b)(8) of the Social Security Act (42 U.S.C. 1395y(b)(8)), as added
by section 111(a) of the Medicare, Medicaid, and SCHIP Extension Act of 2007
(Public Law 110–173)), to meet the determination and submission requirements
under subparagraph (A) of such section 1862(b)(8).</text>
</section>