[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4242 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 4242

To repeal the Patient Protection and Affordable Care Act, to amend the 
   Public Health Service Act to provide individual and group market 
 reforms to protect health insurance consumers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 22, 2012

   Mr. Heck introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
  Ways and Means, Education and the Workforce, the Judiciary, Natural 
   Resources, Rules, House Administration, and Appropriations, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To repeal the Patient Protection and Affordable Care Act, to amend the 
   Public Health Service Act to provide individual and group market 
 reforms to protect health insurance consumers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Ensuring Quality 
Health Care for All Americans Act of 2012''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Repeal of PPACA.
Sec. 3. Prohibiting discrimination based on health status.
Sec. 4. Guaranteed renewability of coverage.
Sec. 5. Prohibition of preexisting condition exclusions and other 
                            discrimination based on health status.
Sec. 6. No lifetime or annual limits.
Sec. 7. Prohibition on rescissions.
Sec. 8. Extension of dependent coverage.
Sec. 9. Application of group market reforms to ERISA and the Internal 
                            Revenue Code of 1986.
Sec. 10. Catastrophic plan.
Sec. 11. Grants for health insurance risk adjustment mechanisms.
Sec. 12. Liability protections for health care providers.

SEC. 2. REPEAL OF PPACA.

    (a) PPACA.--Public Law 111-148 is repealed, and the provisions of 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.
    (b) HCERA.--Title I and subtitle B of title II of the Health Care 
and Education Reconciliation Act of 2010 (Public Law 111-152) are 
repealed, and the provisions of law amended or repealed by such title 
or subtitle, respectively, are restored or revived as if such title and 
subtitle had not been enacted.

SEC. 3. PROHIBITING DISCRIMINATION BASED ON HEALTH STATUS.

    (a) Group Market.--Subpart 3 of part A of title XXVII of the Public 
Health Service Act is amended by striking section 2711 and inserting 
the following:

``SEC. 2711. GUARANTEED AVAILABILITY OF COVERAGE.

    ``(a) Guaranteed Issuance of Coverage in the Group Market.--
            ``(1) In general.--Subject to subsections (b) through (e), 
        each health insurance issuer that offers health insurance 
        coverage in the group market in a State shall accept every 
        employer and every individual in a group in the State that 
        applies for such coverage.
            ``(2) Special rule for associations.--An association shall 
        be treated as an employer for purposes of this section if such 
        association seeks to provide group health insurance coverage to 
        not less than 200 qualified individuals.
    ``(b) Enrollment.--
            ``(1) Restriction.--A health insurance issuer described in 
        subsection (a) may restrict enrollment in coverage described in 
        such subsection to open or special enrollment periods.
            ``(2) Establishment.--A health insurance issuer described 
        in subsection (a) shall, in accordance with the regulations 
        promulgated under paragraph (3), establish special enrollment 
        periods for qualifying events (as such term is defined in 
        section 603 of the Employee Retirement Income Security Act of 
        1974).
            ``(3) Special rules for associations.--
                    ``(A) Qualifying events.--For purposes of applying 
                paragraph (2) to an association--
                            ``(i) the term `covered employee' in 
                        section 603 of the Employee Retirement Income 
                        Security Act of 1974 shall include a qualified 
                        individual (as such term is defined in section 
                        2701(d)(2)(D));
                            ``(ii) the term `employer' shall include an 
                        association (as such term is defined in section 
                        2701(d)(2)(A)); and
                            ``(iii) the term `termination (other than 
                        by reason of such employee's gross misconduct), 
                        or reduction of hours, of the covered 
                        employee's employment' shall include the 
                        termination of membership to the association.
                    ``(B) Enrollment.--With respect to health insurance 
                coverage provided to an association under subsection 
                (a)(2), a health insurance issuer shall permit a 
                qualified individual who is eligible, but not enrolled 
                (or a dependent of such individual if the dependent is 
                eligible, but not enrolled) for such coverage to enroll 
                for coverage under the terms of such coverage when any 
                one of the following events occur:
                            ``(i) New members and employees.--A 
                        qualified individual, and any dependent of such 
                        individual, may enroll during the 30-day period 
                        following the end of the period described under 
                        section 2701(d)(2)(D) that applies to such 
                        individual.
                            ``(ii) Annual enrollment.--A qualified 
                        individual, and any dependent of such 
                        individual, may enroll during the annual 
                        enrollment period established under the terms 
                        of the coverage
                    ``(C) Termination of enrollment.--With respect to 
                group health insurance coverage provided by an 
                association, a qualified individual or dependent who 
                terminates enrollment in such coverage may only re-
                enroll in such coverage during the annual enrollment 
                period described under subparagraph (B)(ii).
                    ``(D) Definitions.--For purposes of this section, 
                the terms `association' and `qualified individual' have 
                the meaning given such terms in section 2701(d)(2).
            ``(4) Regulations.--The Secretary shall promulgate 
        regulations with respect to enrollment periods under this 
        subsection.
    ``(c) Special Rules for Network Plans.--
            ``(1) In general.--In the case of a health insurance issuer 
        that offers health insurance coverage in the group market in a 
        State through a network plan, the issuer may--
                    ``(A) limit the employers that may apply for such 
                coverage to those with eligible individuals who live, 
                work, or reside in the service area for such network 
                plan; and
                    ``(B) within the service area of such plan, deny 
                such coverage to such employers if the issuer has 
                demonstrated, if required, to the applicable State 
                authority that--
                            ``(i) it will not have the capacity to 
                        deliver services adequately to enrollees of any 
                        additional groups because of its obligations to 
                        existing group contract holders and enrollees; 
                        and
                            ``(ii) it is applying this paragraph 
                        uniformly to all employers without regard to--
                                    ``(I) the claims experience of 
                                those employers and their employees 
                                (and their dependents); or
                                    ``(II) any health-status-related 
                                factor relating to such employees and 
                                dependents.
            ``(2) 180-day suspension upon denial of coverage.--An 
        issuer, upon denying health insurance coverage in any service 
        area in accordance with paragraph (1)(B), may not offer 
        coverage in the group market within such service area for a 
        period of 180 days after the date such coverage is denied.
    ``(d) Application of Financial Capacity Limits.--
            ``(1) In general.--A health insurance issuer may deny 
        health insurance coverage in the group if the issuer has 
        demonstrated, if required, to the applicable State authority 
        that--
                    ``(A) it does not have the financial reserves 
                necessary to underwrite additional coverage; and
                    ``(B) it is applying this paragraph uniformly to 
                all employers and individuals in the group market in 
                the State--
                            ``(i) in a manner that is consistent with 
                        applicable State law; and
                            ``(ii) without regard to--
                                    ``(I) the claims experience of 
                                those individuals, employers, and their 
                                employees (and their dependents); or
                                    ``(II) any health-status-related 
                                factor relating to such individuals, 
                                employees, and dependents.
            ``(2) 180-day suspension upon denial of coverage.--A health 
        insurance issuer upon denying health insurance coverage in 
        connection with group health plans in accordance with paragraph 
        (1) in a State may not offer coverage in connection with group 
        health plans in the group market in the State for a period of 
        180 days after the date such coverage is denied or until the 
        issuer has demonstrated to the applicable State authority, if 
        required under applicable State law, that the issuer has 
        sufficient financial reserves to underwrite additional 
        coverage, whichever is later. An applicable State authority may 
        provide for the application of this subsection on a service-
        area-specific basis.''.
    (b) Individual Market.--Subpart 1 of part B of title XXVII of the 
Public Health Service Act is amended by striking section 2741 and 
inserting the following:

``SEC. 2741. GUARANTEED AVAILABILITY OF COVERAGE.

    ``The provisions of section 2711 (other than subsection (a)(2) and 
subsection (b)(3)) shall apply to health insurance coverage offered to 
individuals by a health insurance issuer in the individual market in 
the same manner as such provisions apply to health insurance coverage 
offered to employers by a health insurance issuer in connection with 
health insurance coverage in the group market. For purposes of this 
section, the Secretary shall treat any reference of the word `employer' 
in such section as a reference to the term `individual'.''.
    (c) Effective Date.--The amendments made by this section shall be 
effective for plan years beginning on or after January 1, 2014.

SEC. 4. GUARANTEED RENEWABILITY OF COVERAGE.

    (a) Group Market.--Section 2712 of the Public Health Service Act is 
amended--
            (1) in subsection (a)--
                    (A) by inserting ``, including coverage offered'' 
                before ``in connection with a group health plan''; and
                    (B) by inserting ``employer or other'' before 
                ``plan sponsor of the plan'';
            (2) in subsection (b)--
                    (A) in the matter before paragraph (1), by striking 
                ``health insurance coverage in connection with a group 
                health plan in the small or large group market'' and 
                insert ``such health insurance coverage''; and
                    (B) in paragraph (6) by striking `` one or more 
                bona fide associations'' and inserting ``one or more 
                associations (as such term is defined in section 
                2701(d)(2)(A))'';
            (3) in subsection (c)(1)(B), by striking ``to a group 
        health plan'';
            (4) in subsection (d)--
                    (A) in matter before paragraph (1), by striking 
                ``to a group health plan''; and
                    (B) in paragraph (2), by striking ``bona fide 
                associations'' and inserting ``associations (as such 
                term is defined in section 2701(d)(2)(A))''; and
            (5) in subsection (e), by inserting ``(as such term is 
        defined in section 2701(d)(2)(A))'' after ``one or more 
        associations''.
    (b) Effective Date.--The amendments made by this section shall be 
effective for plan years beginning on or after January 1, 2014.

SEC. 5. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS AND OTHER 
              DISCRIMINATION BASED ON HEALTH STATUS.

    (a) Group Market.--Subpart 1 of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg) is amended by striking section 
2701 and inserting the following:

``SEC. 2701. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS AND OTHER 
              DISCRIMINATION BASED ON HEALTH STATUS.

    ``(a) In General.--A group health plan or a health insurance issuer 
offering group health insurance coverage may not impose any preexisting 
condition exclusion with respect to such plan or coverage.
    ``(b) Definitions.--For purposes of this part:
            ``(1) Preexisting condition exclusion.--
                    ``(A) In general.--The term `preexisting condition 
                exclusion' means, with respect to a group health plan 
                or health insurance coverage, a limitation or exclusion 
                of benefits relating to a condition based on the fact 
                that the condition was present before the date of 
                enrollment in such plan or for such coverage, whether 
                or not any medical advice, diagnosis, care, or 
                treatment was recommended or received before such date.
                    ``(B) Treatment of genetic information.--Genetic 
                information shall not be treated as a preexisting 
                condition in the absence of a diagnosis of the 
                condition related to such information.
            ``(2) Date of enrollment.--The term `date of enrollment' 
        means, with respect to an individual covered under a group 
        health plan or health insurance coverage, the date of 
        enrollment of the individual in the plan or coverage or, if 
        earlier, the first day of the waiting period for such 
        enrollment.
            ``(3) Waiting period.--The term `waiting period' means, 
        with respect to a group health plan and an individual who is a 
        potential participant or beneficiary in the plan, the period 
        that must pass with respect to the individual before the 
        individual is eligible to be covered for benefits under the 
        terms of the plan.
    ``(c) Special Enrollment Periods.--
            ``(1) Individuals losing other coverage.--A group health 
        plan, and a health insurance issuer offering group health 
        insurance coverage in connection with a group health plan, 
        shall permit an employee who is eligible, but not enrolled, for 
        coverage under the terms of the plan (or a dependent of such an 
        employee if the dependent is eligible, but not enrolled, for 
        coverage under such terms) to enroll for coverage under the 
        terms of the plan if each of the following conditions is met:
                    ``(A) The employee or dependent was covered under a 
                group health plan or had health insurance coverage at 
                the time coverage was previously offered to the 
                employee or dependent.
                    ``(B) The employee stated in writing at such time 
                that coverage under a group health plan or health 
                insurance coverage was the reason for declining 
                enrollment, but only if the plan sponsor or issuer (if 
                applicable) required such a statement at such time and 
                provided the employee with notice of such requirement 
                (and the consequences of such requirement) at such 
                time.
                    ``(C) The employee's or dependent's coverage 
                described in subparagraph (A)--
                            ``(i) was under a COBRA continuation 
                        provision and the coverage under such provision 
                        was exhausted; or
                            ``(ii) was not under such a provision and 
                        either the coverage was terminated as a result 
                        of loss of eligibility for the coverage 
                        (including as a result of legal separation, 
                        divorce, death, termination of employment, or 
                        reduction in the number of hours of employment) 
                        or employer contributions toward such coverage 
                        were terminated.
                    ``(D) Under the terms of the plan, the employee 
                requests such enrollment not later than 30 days after 
                the date of exhaustion of coverage described in 
                subparagraph (C)(i) or termination of coverage or 
                employer contribution described in subparagraph 
                (C)(ii).
            ``(2) For dependent beneficiaries.--
                    ``(A) In general.--If--
                            ``(i) a group health plan makes coverage 
                        available with respect to a dependent of an 
                        individual;
                            ``(ii) the individual is a participant 
                        under the plan (or has met any waiting period 
                        applicable to becoming a participant under the 
                        plan and is eligible to be enrolled under the 
                        plan but for a failure to enroll during a 
                        previous enrollment period); and
                            ``(iii) a person becomes such a dependent 
                        of the individual through marriage, birth, or 
                        adoption or placement for adoption,
                the group health plan shall provide for a dependent 
                special enrollment period described in subparagraph (B) 
                during which the person (or, if not otherwise enrolled, 
                the individual) may be enrolled under the plan as a 
                dependent of the individual, and in the case of the 
                birth or adoption of a child, the spouse of the 
                individual may be enrolled as a dependent of the 
                individual if such spouse is otherwise eligible for 
                coverage.
                    ``(B) Dependent special enrollment period.--A 
                dependent special enrollment period under this 
                subparagraph shall be a period of not less than 30 days 
                and shall begin on the later of--
                            ``(i) the date dependent coverage is made 
                        available; or
                            ``(ii) the date of the marriage, birth, or 
                        adoption or placement for adoption (as the case 
                        may be) described in subparagraph (A)(iii).
                    ``(C) No waiting period.--If an individual seeks to 
                enroll a dependent during the first 30 days of such a 
                dependent special enrollment period, the coverage of 
                the dependent shall become effective--
                            ``(i) in the case of marriage, not later 
                        than the first day of the first month beginning 
                        after the date the completed request for 
                        enrollment is received;
                            ``(ii) in the case of a dependent's birth, 
                        as of the date of such birth; or
                            ``(iii) in the case of a dependent's 
                        adoption or placement for adoption, the date of 
                        such adoption or placement for adoption.
            ``(3) Special rules for application in case of medicaid and 
        chip.--
                    ``(A) In general.--A group health plan, and a 
                health insurance issuer offering group health insurance 
                coverage in connection with a group health plan, shall 
                permit an employee who is eligible, but not enrolled, 
                for coverage under the terms of the plan (or a 
                dependent of such an employee if the dependent is 
                eligible, but not enrolled, for coverage under such 
                terms) to enroll for coverage under the terms of the 
                plan or coverage if either of the following conditions 
                is met:
                            ``(i) Termination of medicaid or chip 
                        coverage.--The employee or dependent is covered 
                        under a Medicaid plan under title XIX of the 
                        Social Security Act or under a State child 
                        health plan under title XXI of such Act and 
                        coverage of the employee or dependent under 
                        such a plan is terminated as a result of loss 
                        of eligibility for such coverage and the 
                        employee requests coverage under the group 
                        health plan (or health insurance coverage) not 
                        later than 60 days after the date of 
                        termination of such coverage.
                            ``(ii) Eligibility for employment 
                        assistance under medicaid or chip.--The 
                        employee or dependent becomes eligible for 
                        assistance, with respect to coverage under the 
                        group health plan or health insurance coverage, 
                        under such Medicaid plan or State child health 
                        plan (including under any waiver or 
                        demonstration project conducted under or in 
                        relation to such a plan), if the employee 
                        requests coverage under the group health plan 
                        or health insurance coverage not later than 60 
                        days after the date the employee or dependent 
                        is determined to be eligible for such 
                        assistance.
                    ``(B) Coordination with medicaid and chip.--
                            ``(i) Outreach to employees regarding 
                        availability of medicaid and chip coverage.--
                                    ``(I) In general.--Each employer 
                                that maintains a group health plan in a 
                                State that provides medical assistance 
                                under a State Medicaid plan under title 
                                XIX of the Social Security Act, or 
                                child health assistance under a State 
                                child health plan under title XXI of 
                                such Act, in the form of premium 
                                assistance for the purchase of coverage 
                                under a group health plan, shall 
                                provide to each employee a written 
                                notice informing the employee of 
                                potential opportunities then currently 
                                available in the State in which the 
                                employee resides for premium assistance 
                                under such plans for health coverage of 
                                the employee or the employee's 
                                dependents. For purposes of compliance 
                                with this subclause, the employer may 
                                use any State-specific model notice 
                                developed in accordance with section 
                                701(f)(3)(B)(i)(II) of the Employee 
                                Retirement Income Security Act of 1974 
                                (29 U.S.C. 1181(f)(3)(B)(i)(II)).
                                    ``(II) Option to provide concurrent 
                                with provision of plan materials to 
                                employee.--An employer may provide the 
                                model notice applicable to the State in 
                                which an employee resides concurrent 
                                with the furnishing of materials 
                                notifying the employee of health plan 
                                eligibility, concurrent with materials 
                                provided to the employee in connection 
                                with an open season or election process 
                                conducted under the plan, or concurrent 
                                with the furnishing of the summary plan 
                                description as provided in section 
                                104(b) of the Employee Retirement 
                                Income Security Act of 1974.
                            ``(ii) Disclosure about group health plan 
                        benefits to states for medicaid- and chip- 
                        eligible individuals.--In the case of an 
                        enrollee in a group health plan who is covered 
                        under a Medicaid plan of a State under title 
                        XIX of the Social Security Act or under a State 
                        child health plan under title XXI of such Act, 
                        the plan administrator of the group health plan 
                        shall disclose to the State, upon request, 
                        information about the benefits available under 
                        the group health plan in sufficient 
                        specificity, as determined under regulations of 
                        the Secretary of Health and Human Services in 
                        consultation with the Secretary that require 
                        use of the model coverage coordination 
                        disclosure form developed under section 
                        311(b)(1)(C) of the Children's Health Insurance 
                        Reauthorization Act of 2009, so as to permit 
                        the State to establish (under paragraph (2)(B), 
                        (3), or (10) of section 2105(c) of the Social 
                        Security Act or otherwise) the cost 
                        effectiveness of the State providing medical or 
                        child health assistance through premium 
                        assistance for the purchase of coverage under 
                        such group health plan and in order for the 
                        State to provide supplemental benefits required 
                        under paragraph (10)(E) of such section or 
                        other authority.
    ``(d) Application to Association Plans.--
            ``(1) In general.--A group health plan or health insurance 
        issuer that provides coverage to an association as required 
        under section 2711(a)(2) shall accept every qualified 
        individual that the association seeks health insurance coverage 
        for, without regard to the health status of such individual.
            ``(2) Definitions related to associations.--For purposes of 
        this subsection:
                    ``(A) Association.--The term `association' means an 
                association that--
                            ``(i) has a constitution and bylaws;
                            ``(ii) is determined by the Secretary to be 
                        an association which is operating in good faith 
                        for a primary purpose other than that of 
                        obtaining insurance; and
                            ``(iii) has been in existence for a period 
                        of at least 5 years.
                    ``(B) Dependent.--The term `dependent', with 
                respect to a qualified individual, has the meaning 
                given such term in section 2714, with respect to a 
                policy holder.
                    ``(C) Qualified actuary.--The term `qualified 
                actuary' means a member in good standing of the 
                American Academy of Actuaries, or a successor 
                organization approved by the Secretary.
                    ``(D) Qualified individuals.--The term `qualified 
                individual' means, with respect to an association, an 
                individual who meets any of the following:
                            ``(i) A member of the association who has 
                        been such a member for a period of at least 30 
                        days.
                            ``(ii) An employee of such member who has 
                        been employed by such member for a period of at 
                        least 30 days.
                            ``(iii) An employee of the association who 
                        has been employed by the association for a 
                        period of at least 30 days.''.
    (b) Individual Market.--Subpart 1 of part B of title XXVII of the 
Public Health Service Act is amended by adding at the end the 
following:

``SEC. 2746. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER 
              DISCRIMINATION BASED ON HEALTH STATUS.

    ``The provisions of section 2701 (other than subparagraphs (A)(ii) 
and (B) of subsection (c)(3)) shall apply to health insurance coverage 
offered to individuals by a health insurance issuer in the individual 
market in the same manner as it applies to health insurance coverage 
offered by a health insurance issuer in the group market.''.
    (c) Effective Date.--The amendments made by this section shall be 
effective for plan years beginning on or after January 1, 2014, except, 
to the extent such amendments apply to enrollees who are under 19 years 
of age, such amendments shall become effective for plan years beginning 
on or after 6 months after the date of enactment of this Act.

SEC. 6. NO LIFETIME OR ANNUAL LIMITS.

    (a) Group Market.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act is amended by adding at the end the following:

``SEC. 2708. NO LIFETIME OR ANNUAL LIMITS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group health insurance coverage may not establish--
            ``(1) lifetime limits on the dollar value of benefits for 
        any participant or beneficiary; or
            ``(2) unreasonable annual limits (within the meaning of 
        section 223 of the Internal Revenue Code of 1986) on the dollar 
        value of benefits for any participant or beneficiary.
    ``(b) Per Beneficiary Limits.--A group health plan or health 
insurance coverage may not place annual or lifetime per beneficiary 
limits on specific covered benefits unless such limits are otherwise 
permitted under Federal or State law.''.
    (b) Individual Market.--Subpart 2 of part B of title XXVII of the 
Public Health Service Act is amended by adding at the end the 
following:

``SEC. 2754. NO LIFETIME OR ANNUAL LIMITS.

    ``The provisions of section 2708 shall apply to health insurance 
coverage offered to individuals by a health insurance issuer in the 
individual market in the same manner as it applies to health insurance 
coverage offered by a health insurance issuer in the group market.''.
    (c) Effective Date.--The amendment made by this section shall be 
effective for plan years beginning on or after 6 months after the date 
of enactment of this Act.

SEC. 7. PROHIBITION ON RESCISSIONS.

    (a) Group Market.--Subpart 1 of part A of title XXVII of the Public 
Health Service Act is amended by adding at the end the following:

``SEC. 2703. PROHIBITION ON RESCISSIONS.

    ``A group health plan and a health insurance issuer offering group 
health insurance coverage shall not rescind such plan or coverage with 
respect to an enrollee once the enrollee is covered under such plan or 
coverage involved, except that this section shall not apply to a 
covered individual who has performed an act or practice that 
constitutes fraud or makes an intentional misrepresentation of material 
fact as prohibited by the terms of the plan or coverage. Such plan or 
coverage may not be cancelled except with prior notice to the enrollee, 
and only as permitted under section 2712(b).''.
    (b) Individual Market.--Subpart 1 of part B of title XXVII of the 
Public Health Service Act is amended by adding at the end the 
following:

``SEC. 2747. PROHIBITION ON RESCISSIONS.

    ``The provisions of section 2703 shall apply to health insurance 
coverage offered to individuals by a health insurance issuer in the 
individual market in the same manner as it applies to health insurance 
coverage offered by a health insurance issuer in the group market.''.
    (c) Effective Date.--The amendment made by this section shall be 
effective for plan years beginning on or after 6 months after the date 
of enactment of this Act.

SEC. 8. EXTENSION OF DEPENDENT COVERAGE.

    (a) Group Market.--
            (1) In general.--Subpart 1 of part A of title XXVII of the 
        Public Health Service Act is amended by adding at the end:

``SEC. 2703A. EXTENSION OF DEPENDENT COVERAGE.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group health insurance coverage that provides dependent 
coverage of children shall continue to make such coverage available for 
such a dependent after such dependent turns 18 years of age until the 
first of the following events occurs:
            ``(1) The dependent turns 26 years of age.
            ``(2) The dependent marries.
            ``(3) Subject to subsection (c), the dependent no longer 
        resides in the home of--
                    ``(A) the policy holder through which such 
                dependent is eligible for dependent coverage; or
                    ``(B) in the case that the policy holder through 
                which such dependent is eligible for dependent coverage 
                provides such coverage subject to an order to provide 
                child support, the dependent's parent or legal 
                guardian.
    ``(b) Exception for College Students.--Paragraph (3) of subsection 
(a) shall not apply to a dependent for any period of time during which 
such dependent is enrolled as a full-time student at a postsecondary 
educational institution (including an institution of higher education 
as defined in section 102 of the Higher Education Act of 1965).
    ``(c) Limitation.--Nothing in this section shall require a plan or 
an issuer described in subsection (a) to make coverage available for a 
child of an individual receiving dependent coverage pursuant to this 
section.
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed to modify the definition of `dependent' as used in the 
Internal Revenue Code of 1986 with respect to the tax treatment of the 
cost of coverage.''.
            (2) Regulations.--Not later than 6 months after the date of 
        enactment of this Act, the Secretary shall promulgate 
        regulations to define the dependents to which coverage shall be 
        made available under section 2703A of the Public Health Service 
        Act, as added by paragraph (1).
    (b) Individual Market.--Subpart 1 of part B of title XXVII of the 
Public Health Service Act is amended by adding at the end the 
following:

``SEC. 2748. EXTENSION OF DEPENDENT COVERAGE.

    ``The provisions of section 2703A shall apply to health insurance 
coverage offered to individuals by a health insurance issuer in the 
individual market in the same manner as it applies to health insurance 
coverage offered by a health insurance issuer in the group market.''.
    (c) Effective Date.--The amendments made by this section shall be 
effective for plan years beginning on or after 6 months after the date 
of enactment of this Act.

SEC. 9. APPLICATION OF GROUP MARKET REFORMS TO ERISA AND THE INTERNAL 
              REVENUE CODE OF 1986.

    (a) ERISA.--
            (1) In general.--Subpart A of title VII of the Employee 
        Retirement Income Security Act of 1974 is amended--
                    (A) by striking sections 701 and 703; and
                    (B) by inserting before section 702 the following:

``SEC. 701. APPLICATION OF CERTAIN PHSA REQUIREMENTS.

    ``(a) In General.--Sections 2701, 2703, 2703A, 2708, 2711, and 2712 
of the Public Health Service Act shall apply to group health plans, and 
health insurance issuers providing health insurance coverage in 
connection with group health plans, as if included in this subpart.
    ``(b) Conflict.--To the extent that any provision of this part 
conflicts with a provision of any section of the Public Health Service 
Act listed in subsection (a) with respect to group health plans, or 
health insurance issuers providing health insurance coverage in 
connection with group health plans, the provisions of such sections 
shall apply.''.
            (2) Conforming amendment.--The table of contents in section 
        1 of such Act is amended--
                    (A) by striking the item related to section 701 and 
                inserting ``Sec. 701. Application of certain PHSA 
                requirements.''; and
                    (B) by striking the item related to section 703.
    (b) Internal Revenue Code of 1986.--Subchapter A of chapter 100 of 
the Internal Revenue Code of 1986 (relating to group health plan 
requirements) is amended--
            (1) by striking sections 9801 and 9803; and
            (2) by inserting before section 9802 the following:

``SEC. 9801. APPLICATION OF CERTAIN PHSA REQUIREMENTS.

    ``(a) In General.--Sections 2701, 2703, 2703A, 2708, 2711, and 2712 
of the Public Health Service Act shall apply to group health plans, and 
health insurance issuers providing health insurance coverage in 
connection with group health plans, as if included in this subchapter.
    ``(b) Conflict.--To the extent that any provision of this 
subchapter conflicts with a provision of any section of the Public 
Health Service Act listed in subsection (a) with respect to group 
health plans, or health insurance issuers providing health insurance 
coverage in connection with group health plans, the provisions of such 
sections shall apply.''.

SEC. 10. CATASTROPHIC PLAN.

    (a) In General.--Subpart 1 of part B of title XXVII of the Public 
Health Service Act is amended by adding at the end the following:

``SEC. 2749. CATASTROPHIC PLAN.

    ``(a) In General.--Each health insurance issuer that offers health 
insurance coverage in the individual market in a State shall offer a 
catastrophic plan in such State in such market.
    ``(b) Coverage Requirements.--To meet the requirements of this 
section, a catastrophic plan must provide for the essential health 
benefits, as defined by the Secretary under subsection (c).
    ``(c) Essential Health Benefits.--The Secretary shall define the 
essential health benefits, except that such benefits shall include--
            ``(1) coverage for at least three primary care visits 
        during a plan year; and
            ``(2) at least the following general categories and the 
        items and services covered within the categories:
                    ``(A) Ambulatory patient services.
                    ``(B) Emergency services.
                    ``(C) Hospitalization.
                    ``(D) Maternity and newborn care.
                    ``(E) Mental health and substance use disorder 
                services, including behavioral health treatment.
                    ``(F) Prescription drugs.
                    ``(G) Rehabilitative and habilitative services and 
                devices.
                    ``(H) Laboratory services.
                    ``(I) Preventive and wellness services and chronic 
                disease management.
                    ``(J) Pediatric services, including oral and vision 
                care.
    ``(d) Restriction to Individual Market.--If a health insurance 
issuer offers a health plan described in this section, the issuer may 
only offer the plan in the individual market.''.
    (b) Effective Date.--This section shall be effective for plan years 
beginning on or after 6 months after the date of enactment of this Act.

SEC. 11. GRANTS FOR HEALTH INSURANCE RISK ADJUSTMENT MECHANISMS.

    (a) In General.--The Secretary of Health and Human Services shall 
make grants to States for planning for the establishment and 
implementation of health insurance risk adjustment mechanisms.
    (b) Amount.--
            (1) In general.--The Secretary shall determine the amount 
        of a grant made to a State under this section pursuant to a 
        formula, issued by rule not later than January 1, 2013, that 
        takes into account the number of high-risk individuals in such 
        State.
            (2) Limitation.--The amount of a grant made to a State 
        under this section shall not exceed $1,000,000 for any fiscal 
        year.
    (c) Use of Funds.--The grant funds made available to a State under 
this section may only be used by a State for the cost associated with 
planning for the establishment and implementation of health insurance 
risk adjustment mechanisms. Such funds may not be used for costs 
related to administering such mechanisms.
    (d) Definitions.--For purposes of this section:
            (1) High-risk individual.--The term ``high-risk 
        individual'' means an individual who--
                    (A) is a citizen or national of the United States 
                or is lawfully present in the United States;
                    (B) has not been covered under creditable coverage 
                (as defined in section 2701(c)(1) of the Public Health 
                Service Act as in effect on March 22, 2010) during the 
                previous 6-month period; and
                    (C) has a preexisting condition, as determined in a 
                manner consistent with guidance issued by the 
                Secretary.
            (2) Health insurance risk-adjustment mechanisms.--
                    (A) In general.--With respect to a State, the term 
                ``health insurance risk-adjustment mechanism'' shall be 
                a mechanism that applies to--
                            (i) all health insurance issuers who offer 
                        health insurance coverage in such State; and
                            (ii) all covered lives for health insurance 
                        coverage offered in such State that is subject 
                        to the requirements of section 2711 or section 
                        2741 of the Public Health Service Act, as added 
                        by section 3 of this Act.
                    (B) Further definition.--With respect to a State, 
                any further definition of such term shall be determined 
                by the State insurance commissioner, acting in 
                cooperation with health insurance issuers who offer 
                health insurance coverage in such State.
            (3) State.--The term ``State'' means each of the 50 States 
        and the District of Columbia.
    (e) Sunset Date.--The Secretary may not make any grants under this 
section after December 31, 2014.

SEC. 12. LIABILITY PROTECTIONS FOR HEALTH CARE PROVIDERS.

    (a) Health Care Providers Protected.--The liability protections in 
subsection (c) shall apply in any civil action, including an action 
before any court of any State, against a health care provider, arising 
from health care goods or services that--
            (1) were provided by a health care provider in a hospital 
        to which the requirements of section 1867 of the Social 
        Security Act (42 U.S.C. 1395dd) apply; and
            (2) were provided only because they were required under 
        section 1867 of the Social Security Act (42 U.S.C. 1395dd).
    (b) Burden of Proof.--In any proceeding under subsection (a), the 
burden of proof shall be on the defendant to establish the elements in 
paragraphs (1) and (2) of subsection (a).
    (c) Liability Protections.--
            (1) Cap on noneconomic damages.--The amount of noneconomic 
        damages, if available, shall not exceed $250,000, regardless of 
        the number of parties against whom the action is brought with 
        respect to the same injury. An award for noneconomic damages in 
        excess of $250,000 shall be reduced either before entry of the 
        order granting judgment, or by amendment of such order.
            (2) Installment payments.--If the award for damages exceeds 
        $50,000, the defendant may pay such damages in installments, as 
        determined by the court.
            (3) Attorney fees.--Any contingent fee for a party's 
        attorney shall not exceed--
                    (A) 40 percent of the portion of the award amount 
                that does not exceed $50,000;
                    (B) 33\1/3\ percent of the portion of the award 
                amount that exceeds $50,000 but does not exceed 
                $100,000;
                    (C) 25 percent of the portion of the award amount 
                that exceeds $100,000 but does not exceed $600,000; and
                    (D) 15 percent of the portion of the award amount 
                that exceeds $600,000.
            (4) Disclosure of collateral source benefits.--Any person 
        bringing a civil action described in subsection (a) shall, and 
        any party may, disclose or introduce evidence of collateral 
        source benefits.
            (5) Preemption.--
                    (A) In general.--The provisions of this Act 
                preempt, subject to subparagraphs (B) and (C), State 
                law to the extent that State law prevents the 
                application of any provisions of law established by or 
                under this Act. The provisions governing an action 
                described in subsection (a) set forth in this Act 
                supersede chapter 171 of title 28, United States Code, 
                to the extent that such chapter--
                            (i) 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 Act; or
                            (ii) prohibits the introduction of evidence 
                        regarding collateral source benefits, or 
                        mandates or permits subrogation or a lien on 
                        collateral source benefits.
                    (B) Greater protections preserved.--This Act shall 
                not preempt or supersede any State or Federal law that 
                imposes greater procedural or substantive protections 
                for health care providers from liability, loss, or 
                damages than those provided by this Act or create a 
                cause of action.
                    (C) Rule of construction.--No provision of this Act 
                shall be construed to preempt--
                            (i) 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 an action described in 
                        subsection (a), regardless of whether such 
                        monetary amount is greater or lesser than is 
                        provided for under this Act; or
                            (ii) any defense available to a party in an 
                        action described in subsection (a) under any 
                        other provision of State or Federal law.
            (6) Definitions.--
                    (A) Collateral source benefits.--As used in this 
                section, the term ``collateral source benefits'' means 
                any amount paid or reasonably likely to be paid in the 
                future to or on behalf of the claimant, or any service, 
                product, or other benefit provided or reasonably likely 
                to be provided in the future to or on behalf of the 
                claimant, as a result of the personal harm, pursuant 
                to--
                            (i) any State or Federal health, sickness, 
                        income-disability, accident, or workers' 
                        compensation law;
                            (ii) any health, sickness, income-
                        disability, or accident insurance that provides 
                        health benefits or income-disability coverage;
                            (iii) any contract or agreement of any 
                        group, organization, partnership, or 
                        corporation to provide, pay for, or reimburse 
                        the cost of medical, hospital, dental, or 
                        income-disability benefits; and
                            (iv) any other publicly or privately funded 
                        program.
                    (B) Noneconomic damages.--As used in this section, 
                the term ``noneconomic damages'' 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.
                    (C) Health care provider.--As used in this section, 
                the term ``health care provider'' 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.
                    (D) Health care goods or services.--As used in this 
                section, the term ``health care goods or services'' 
                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.
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