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S. 1796 (111th): America’s Healthy Future Act of 2009


The text of the bill below is as of Oct 19, 2009 (Placed on Calendar in the Senate). The bill was not enacted into law.


II

Calendar No. 184

111th CONGRESS

1st Session

S. 1796

[Report No. 111–89]

IN THE SENATE OF THE UNITED STATES

October 19, 2009

, from the Committee on Finance reported the following original bill; which was read twice and placed on the calendar

A BILL

To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the America's Healthy Future Act of 2009.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—Health care coverage

Subtitle A—Insurance market reforms

Sec. 1001. Insurance market reforms in the individual and small group markets.

TITLE XXII—Health insurance coverage

Sec. 2200. Ensuring essential and affordable health benefits coverage for all Americans.

PART A—Insurance reforms

SUBPART 1—Requirements in individual and small group markets

Sec. 2201. General requirements and definitions.

Sec. 2202. Prohibition on preexisting condition exclusions.

Sec. 2203. Guaranteed issue and renewal for insured plans.

Sec. 2204. Premium rating rules.

Sec. 2205. Use of uniform outline of coverage documents.

SUBPART 2—Reforms relating to allocation of risks

Sec. 2211. Rating areas; pooling of risks; phase in of rating rules in small group markets.

Sec. 2212. Risk adjustment.

Sec. 2213. Establishment of transitional reinsurance program for individual markets in each State.

Sec. 2214. Establishment of risk corridors for plans in individual and small group markets.

Sec. 2215. Temporary high risk pools for individuals with preexisting conditions.

Sec. 2216. Reinsurance for retirees covered by employer-based plans.

SUBPART 3—Preservation of right to maintain existing coverage

Sec. 2221. Grandfathered health benefits plans.

SUBPART 4—Continued role of States

Sec. 2225. Continued State enforcement of insurance regulations.

Sec. 2226. Waiver of health insurance reform requirements.

Sec. 2227. Provisions relating to offering of plans in more than one State.

Sec. 2228. State flexibility to establish basic health programs for low-income individuals not eligible for Medicaid.

SUBPART 5—Other definitions and rules

Sec. 2230. Other definitions and rules.

Subtitle B—Exchanges and consumer assistance

Sec. 1101. Establishment of qualified health benefits plan exchanges.

PART B—Exchange and consumer assistance

SUBPART 1—Individuals and small employers offered affordable choices

Sec. 2231. Rights and responsibilities regarding choice of coverage through exchange.

Sec. 2232. Qualified individuals and small employers; access limited to citizens and lawful residents.

SUBPART 2—Establishment of exchanges

Sec. 2235. Establishment of exchanges by States.

Sec. 2236. Functions performed by Secretary, States, and exchanges.

Sec. 2237. Duties of the Secretary to facilitate exchanges.

Sec. 2238. Procedures for determining eligibility for exchange participation, premium credits and cost-sharing subsidies, and individual responsibility exemptions.

Sec. 2239. Streamlining of procedures for enrollment through an exchange and State Medicaid, CHIP, and health subsidy programs.

Sec. 1102. Encouraging meaningful use of electronic health records.

Subtitle C—Making coverage affordable

PART I—Essential benefits coverage

Sec. 1201. Provisions to ensure coverage of essential benefits.

PART C—Making coverage affordable

SUBPART 1—Essential benefits coverage

Sec. 2241. Requirements for qualified health benefits plan.

Sec. 2242. Essential benefits package defined.

Sec. 2243. Levels of coverage.

Sec. 2244. Application of certain rules to plans in group markets.

Sec. 2245. Special rules relating to coverage of abortion services.

Sec. 1202. Application of State and Federal laws regarding abortion.

Sec. 1203. Application of emergency services laws.

PART II—Premium credits, cost-sharing subsidies, and small business credits

SUBPART A—Premium credits and cost-sharing subsidies

Sec. 1205. Refundable credit providing premium assistance for coverage under a qualified health benefits plan.

Sec. 36B. Refundable credit for coverage under a qualified health benefits plan.

Sec. 1206. Cost-sharing subsidies and advance payments of premium credits and cost-sharing subsidies.

SUBPART 2—Premium credits and cost-sharing subsidies

Sec. 2246. Premium credits.

Sec. 2247. Cost-sharing subsidies for individuals enrolling in qualified health benefit plans.

Sec. 2248. Advance determination and payment of premium credits and cost-sharing subsidies.

Sec. 1207. Disclosures to carry out eligibility requirements for certain programs.

Sec. 1208. Premium credit and subsidy refunds and payments disregarded for Federal and Federally-assisted programs.

Sec. 1209. Fail-safe mechanism to prevent increase in Federal budget deficit.

SUBPART B—Credit for small employers

Sec. 1221. Credit for employee health insurance expenses of small businesses.

Sec. 45R. Employee health insurance expenses of small employers.

Subtitle D—Shared responsibility

PART I—Individual responsibility

Sec. 1301. Excise tax on individuals without essential health benefits coverage.

Chapter 48—Maintenance of essential health benefits coverage

Sec. 5000A. Failure to maintain essential health benefits coverage.

Sec. 1302. Reporting of health insurance coverage.

SUBPART D—Information regarding health insurance coverage

Sec. 6055. Reporting of health insurance coverage.

PART II—Employer Responsibility

Sec. 1306. Employer shared responsibility requirement.

Sec. 4980H. Employer responsibility to provide health coverage.

Sec. 1307. Reporting of employer health insurance coverage.

Sec. 6056. Large employers required to report on health insurance coverage.

Subtitle E—Federal program for health care cooperatives

Sec. 1401. Establishment of Federal program for health care cooperatives.

PART D—Federal program for health care cooperatives

Sec. 2251. Federal program to assist establishment and operation of nonprofit, member-run health insurance issuers.

Subtitle F—Transparency and accountability

Sec. 1501. Provisions ensuring transparency and accountability.

Sec. 2229. Requirements relating to transparency and accountability.

Sec. 1502. Reporting on utilization of premium dollars and standard hospital charges.

Sec. 1503. Development and utilization of uniform outline of coverage documents.

Sec. 1504. Development of standard definitions, personal scenarios, and annual personalized statements.

Subtitle G—Role of Public Programs

PART I—Medicaid Coverage for the Lowest Income Populations

Sec. 1601. Medicaid coverage for the lowest income populations.

Sec. 1602. Income eligibility for nonelderly determined using modified gross income.

Sec. 1603. Requirement to offer premium assistance for employer-sponsored insurance.

Sec. 1604. Payments to territories.

Sec. 1605. Medicaid Improvement Fund rescission.

PART II—Children's Health Insurance Program

Sec. 1611. Additional federal financial participation for CHIP.

Sec. 1612. Technical corrections.

PART III—Enrollment Simplification

Sec. 1621. Enrollment Simplification and coordination with State health insurance exchanges.

Sec. 1622. Permitting hospitals to make presumptive eligibility determinations for all Medicaid eligible populations.

Sec. 1623. Promoting transparency in the development, implementation, and evaluation of Medicaid and CHIP waivers and section 1937 State plan amendments.

Sec. 1624. Standards and best practices to improve enrollment of vulnerable and underserved populations.

PART IV—Medicaid Services

Sec. 1631. Coverage for freestanding birth center services.

Sec. 1632. Concurrent care for children.

Sec. 1633. Funding to expand State Aging and Disability Resource Centers.

Sec. 1634. Community First Choice Option.

Sec. 1635. Protection for recipients of home and community-based services against spousal impoverishment.

Sec. 1636. Incentives for States to offer home and community-based services as a long-term care alternative to nursing homes.

Sec. 1636A. Removal of barriers to providing home and community-based services.

Sec. 1637. Money Follows the Person Rebalancing Demonstration.

Sec. 1638. Clarification of definition of medical assistance.

Sec. 1639. State eligibility option for family planning services.

Sec. 1640. Grants for school-based health centers.

Sec. 1641. Therapeutic foster care.

Sec. 1642. Sense of the Senate regarding long-term care.

PART V—Medicaid Prescription Drug Coverage

Sec. 1651. Prescription drug rebates.

Sec. 1652. Elimination of exclusion of coverage of certain drugs.

Sec. 1653. Providing adequate pharmacy reimbursement.

Sec. 1654. Study of barriers to appropriate utilization of generic medicine in federal health care programs.

PART VI—Medicaid Disproportionate Share Hospital (DSH) Payments

Sec. 1655. Disproportionate share hospital payments.

PART VII—Dual Eligibles

Sec. 1661. 5-year period for demonstration projects.

Sec. 1662. Providing Federal coverage and payment coordination for low-income Medicare beneficiaries.

PART VIII—Medicaid Quality

Sec. 1671. Adult health quality measures.

Sec. 1672. Payment Adjustment for Health Care-Acquired Conditions.

Sec. 1673. Demonstration project to evaluate integrated care around a hospitalization.

Sec. 1674. Medicaid Global Payment System Demonstration Project.

Sec. 1675. Pediatric Accountable Care Organization Demonstration Project.

Sec. 1676. Medicaid emergency psychiatric demonstration project.

PART IX—Improvements to the Medicaid and CHIP Payment and Access Commission (MACPAC)

Sec. 1681. MACPAC assessment of policies affecting all Medicaid beneficiaries.

PART X—American Indians and Alaska Natives

Sec. 1691. Special rules relating to Indians.

Sec. 1692. Elimination of sunset for reimbursement for all medicare part B services furnished by certain indian hospitals and clinics.

Subtitle H—Addressing Health Disparities

Sec. 1701. Standardized collection of data.

Sec. 1702. Required collection of data.

Sec. 1703. Data sharing and protection.

Sec. 1704. Inclusion of information about the importance of having a health care power of attorney in transition planning for children aging out of foster care and independent living programs.

Subtitle I—Maternal and child health services

Sec. 1801. Maternal, infant, and early childhood home visiting programs.

Sec. 1802. Support, education, and research for postpartum depression.

Sec. 1803. Personal responsibility education for adulthood training.

Sec. 1804. Restoration of funding for abstinence education.

Subtitle J—Programs of health promotion and disease prevention

Sec. 1901. Programs of health promotion and disease prevention.

Subtitle K—Elder Justice Act

Sec. 1911. Short title of subtitle.

Sec. 1912. Definitions.

Sec. 1913. Elder Justice.

Subtitle L—Provisions of General Application

Sec. 1921. Protecting Americans and ensuring taxpayer funds in government health care plans do not support or fund physician-assisted suicide; prohibition against discrimination on assisted suicide.

Sec. 1922. Protection of access to quality health care through the Department of Veterans Affairs and the Department of Defense.

Sec. 1923. Continued application of antitrust laws.

TITLE II—Promoting Disease Prevention and Wellness

Subtitle A—Medicare

Sec. 2001. Coverage of annual wellness visit providing a personalized prevention plan.

Sec. 2002. Removal of barriers to preventive services.

Sec. 2003. Evidence-based coverage of preventive services.

Sec. 2004. GAO study and report on medicare beneficiary access to vaccines.

Sec. 2005. Incentives for healthy lifestyles.

Subtitle B—Medicaid

Sec. 2101. Improving access to preventive services for eligible adults.

Sec. 2102. Coverage of comprehensive tobacco cessation services for pregnant women.

Sec. 2103. Incentives for healthy lifestyles.

Sec. 2104. State option to provide health homes for enrollees with chronic conditions.

Sec. 2105. Funding for Childhood Obesity Demonstration Project.

Sec. 2106. Public awareness of preventive and obesity-related services.

TITLE III—Improving the Quality and Efficiency of Health Care

Subtitle A—Transforming the Health Care Delivery System

PART I—Linking Payment to Quality Outcomes under the Medicare program

Sec. 3001. Hospital Value-Based purchasing program.

Sec. 3002. Improvements to the physician quality reporting system.

Sec. 3003. Improvements to the physician feedback program.

Sec. 3004. Quality reporting for long-term care hospitals, inpatient rehabilitation hospitals, and hospice programs.

Sec. 3005. Quality reporting for PPS-exempt cancer hospitals.

Sec. 3006. Plans for a Value-Based purchasing program for skilled nursing facilities and home health agencies.

Sec. 3007. Value-based payment modifier under the physician fee schedule.

Sec. 3008. Payment adjustment for conditions acquired in hospitals.

PART II—Strengthening the Quality Infrastructure

Sec. 3011. National strategy.

Sec. 3012. Interagency Working Group on Health Care Quality.

Sec. 3013. Quality measure development.

Sec. 3014. Quality measure endorsement.

PART III—Encouraging Development of New Patient Care Models

Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation within CMS.

Sec. 3022. Medicare shared savings program.

Sec. 3023. National pilot program on payment bundling.

Sec. 3024. Independence at home pilot program.

Sec. 3025. Hospital readmissions reduction program.

Sec. 3026. Community-Based Care Transitions Program.

Sec. 3027. Extension of gainsharing demonstration.

PART IV—Strengthening primary care and other workforce improvements

Sec. 3031. Expanding access to primary care services and general surgery services.

Sec. 3031A. Medicare Federally qualified health center improvements.

Sec. 3032. Distribution of additional residency positions.

Sec. 3033. Counting resident time in outpatient settings and allowing flexibility for jointly operated residency training programs.

Sec. 3034. Rules for counting resident time for didactic and scholarly activities and other activities.

Sec. 3035. Preservation of resident cap positions from closed and acquired hospitals.

Sec. 3036. Workforce Advisory Committee.

Sec. 3037. Demonstration projects To address health professions workforce needs; extension of family-to-family health information centers.

Sec. 3038. Increasing teaching capacity.

Sec. 3039. Graduate nurse education demonstration program.

PART V—Health information technology

Sec. 3041. Free clinics and certified EHR technology.

Subtitle B—Improving Medicare for patients and Providers

PART I—Ensuring beneficiary access to physician care and other services

Sec. 3101. Increase in the physician payment update.

Sec. 3102. Extension of the work geographic index floor and revisions to the practice expense geographic adjustment under the Medicare physician fee schedule.

Sec. 3103. Extension of exceptions process for Medicare therapy caps.

Sec. 3104. Extension of payment for technical component of certain physician pathology services.

Sec. 3105. Extension of ambulance add-ons.

Sec. 3106. Extension of certain payment rules for long-term care hospital services and of moratorium on the establishment of certain hospitals and facilities.

Sec. 3107. Extension of physician fee schedule mental health add-on.

Sec. 3108. Permitting physician assistants to order post-Hospital extended care services and to provide for recognition of attending physician assistants as attending physicians to serve hospice patients.

Sec. 3109. Recognition of certified diabetes educators as certified providers for purposes of Medicare diabetes outpatient self-management training services.

Sec. 3110. Exemption of certain pharmacies from accreditation requirements.

Sec. 3111. Part B special enrollment period for disabled TRICARE beneficiaries.

Sec. 3112. Payment for bone density tests.

Sec. 3113. Revision to the Medicare Improvement Fund.

Sec. 3114. Treatment of certain complex diagnostic laboratory tests.

Sec. 3115. Improved access for certified-midwife services.

Sec. 3116. Working Group on Access to Emergency Medical Care.

PART II—Rural protections

Sec. 3121. Extension of outpatient hold harmless provision.

Sec. 3122. Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural areas.

Sec. 3123. Extension of the Rural Community Hospital Demonstration Program.

Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program.

Sec. 3125. Temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals.

Sec. 3126. Improvements to the demonstration project on community health integration models in certain rural counties.

Sec. 3127. MedPAC study on adequacy of Medicare payments for health care providers serving in rural areas.

Sec. 3128. Technical correction related to critical access hospital services.

Sec. 3129. Extension of and revisions to Medicare rural hospital flexibility program.

PART III—Improving payment accuracy

Sec. 3131. Payment adjustments for home health care.

Sec. 3132. Hospice reform.

Sec. 3133. Improvement to medicare disproportionate share hospital (DSH) payments.

Sec. 3134. Misvalued codes under the physician fee schedule.

Sec. 3135. Modification of equipment utilization factor for advanced imaging services.

Sec. 3136. Revision of payment for power-driven wheelchairs.

Sec. 3137. Hospital wage index improvement.

Sec. 3138. Treatment of certain cancer hospitals.

Sec. 3139. Payment for biosimilar biological products.

Sec. 3140. Public meeting and report on payment systems for new clinical laboratory diagnostic tests.

Sec. 3141. Medicare hospice concurrent care demonstration program.

Sec. 3142. Application of budget neutrality on a national basis in the calculation of the Medicare hospital wage index floor for each all-urban and rural state.

Sec. 3143. HHS study on urban Medicare-dependent hospitals.

Subtitle C—Provisions relating to part C

Sec. 3201. Medicare Advantage payment.

Sec. 3202. Benefit protection and simplification.

Sec. 3203. Application of coding intensity adjustment during MA payment transition.

Sec. 3204. Simplification of annual beneficiary election periods.

Sec. 3205. Extension for specialized MA plans for special needs individuals.

Sec. 3206. Extension of reasonable cost contracts.

Sec. 3207. Technical correction to MA private fee-for-service plans.

Sec. 3208. Making senior housing facility demonstration permanent.

Sec. 3209. Development of new standards for certain Medigap plans.

Subtitle D—Medicare part D improvements for prescription drug plans and MA–PD plans

Sec. 3301. Medicare prescription drug discount program for brand-Name drugs.

Sec. 3302. Improvement in determination of Medicare part D low-income benchmark premium.

Sec. 3303. Voluntary de minimus policy for subsidy eligible individuals under prescription drug plans and MA–PD plans.

Sec. 3304. Special rule for widows and widowers regarding eligibility for low-income assistance.

Sec. 3305. Improved information for subsidy eligible individuals reassigned to prescription drug plans and MA–PD plans.

Sec. 3306. Funding outreach and assistance for low-income programs.

Sec. 3307. Improving formulary requirements for prescription drug plans and MA–PD plans with respect to certain categories or classes of drugs.

Sec. 3308. Reducing part D premium subsidy for high-income beneficiaries.

Sec. 3309. Simplification of plan information.

Sec. 3310. Limitation on removal or change of coverage of covered part D drugs under a formulary under a prescription drug plan or an MA–PD plan.

Sec. 3311. Elimination of cost sharing for certain dual eligible individuals.

Sec. 3312. Reducing wasteful dispensing of outpatient prescription drugs in long-term care facilities under prescription drug plans and MA–PD plans.

Sec. 3313. Improved Medicare prescription drug plan and MA–PD plan complaint system.

Sec. 3314. Uniform exceptions and appeals process for prescription drug plans and MA–PD plans.

Sec. 3315. Office of the Inspector General studies and reports.

Sec. 3316. HHS study and annual reports on coverage for dual eligibles.

Sec. 3317. Including costs incurred by AIDS drug assistance programs and Indian Health Service in providing prescription drugs toward the annual out-of-pocket threshold under part D.

Subtitle E—Ensuring Medicare sustainability

Sec. 3401. Revision of certain market basket updates and incorporation of productivity improvements into market basket updates that do not already incorporate such improvements.

Sec. 3402. Temporary adjustment to the calculation of part B premiums.

Sec. 3403. Medicare Commission.

Sec. 3404. Ensuring medicare savings are kept in the medicare program.

Subtitle F—Comparative effectiveness research

Sec. 3501. Comparative effectiveness research.

Sec. 3502. Coordination with Federal coordinating council for comparative effectiveness research.

Sec. 3503. GAO report on national coverage determinations process.

Subtitle G—Administrative simplification

Sec. 3601. Administrative Simplification.

Subtitle H—Sense of the Senate regarding medical malpractice

Sec. 3701. Sense of the Senate regarding medical malpractice.

TITLE IV—Transparency and Program Integrity

Subtitle A—Limitation on Medicare exception to the prohibition on certain physician referrals for hospitals

Sec. 4001. Limitation on Medicare exception to the prohibition on certain physician referrals for hospitals.

Subtitle B—Physician Ownership and Other Transparency

Sec. 4101. Transparency reports and reporting of physician ownership or investment interests.

Sec. 4102. Disclosure requirements for in-office ancillary services exception to the prohibition on physician self-referral for certain imaging services.

Sec. 4103. Prescription drug sample transparency.

Subtitle C—Nursing home transparency and improvement

PART I—Improving transparency of information

Sec. 4201. Required disclosure of ownership and additional disclosable parties information.

Sec. 4202. Accountability requirements for skilled nursing facilities and nursing facilities.

Sec. 4203. Nursing home compare Medicare website.

Sec. 4204. Reporting of expenditures.

Sec. 4205. Standardized complaint form.

Sec. 4206. Ensuring staffing accountability.

Sec. 4207. GAO study and report on Five-Star Quality Rating System.

PART II—Targeting enforcement

Sec. 4211. Civil money penalties.

Sec. 4212. National independent monitor pilot program.

Sec. 4213. Notification of facility closure.

Sec. 4214. National demonstration projects on culture change and use of information technology in nursing homes.

PART III—Improving staff training

Sec. 4221. Dementia and abuse prevention training.

Subtitle D—Nationwide program for National and State background checks on direct patient access employees of long-term care facilities and providers

Sec. 4301. Nationwide program for National and State background checks on direct patient access employees of long-term care facilities and providers.

Subtitle E—Pharmacy Benefit Managers

Sec. 4401. Pharmacy benefit managers transparency requirements.

TITLE V—Fraud, Waste, and Abuse

Subtitle A—Medicare and Medicaid

Sec. 5001. Provider screening and other enrollment requirements under Medicare and Medicaid.

Sec. 5002. Enhanced Medicare and Medicaid program integrity provisions.

Sec. 5003. Elimination of duplication between the Healthcare Integrity and Protection Data Bank and the National Practitioner Data Bank.

Sec. 5004. Maximum period for submission of Medicare claims reduced to not more than 12 months.

Sec. 5005. Physicians who order items or services required to be Medicare enrolled physicians or eligible professionals.

Sec. 5006. Requirement for physicians to provide documentation on referrals to programs at high risk of waste and abuse.

Sec. 5007. Face to face encounter with patient required before physicians may certify eligibility for home health services or durable medical equipment under Medicare.

Sec. 5008. Enhanced penalties.

Sec. 5009. Medicare self-referral disclosure protocol.

Sec. 5010. Adjustments to the Medicare durable medical equipment, prosthetics, orthotics, and supplies competitive acquisition program.

Sec. 5011. Expansion of the Recovery Audit Contractor (RAC) program.

Subtitle B—Additional Medicaid Provisions

Sec. 5101. Termination of provider participation under Medicaid if terminated under Medicare or other State plan.

Sec. 5102. Medicaid exclusion from participation relating to certain ownership, control, and management affiliations.

Sec. 5103. Billing agents, clearinghouses, or other alternate payees required to register under Medicaid.

Sec. 5104. Requirement to report expanded set of data elements under MMIS to detect fraud and abuse.

Sec. 5105. Prohibition on payments to institutions or entities located outside of the United States.

Sec. 5106. Overpayments.

Sec. 5107. Enhanced funding for program integrity activities.

Sec. 5108. Mandatory State use of national correct coding initiative.

Sec. 5109. General effective date.

TITLE VI—Revenue provisions

Subtitle A—Revenue offset provisions

Sec. 6001. Excise tax on high cost employer-sponsored health coverage.

Sec. 6002. Inclusion of cost of employer-sponsored health coverage on W–2.

Sec. 6003. Distributions for medicine qualified only if for prescribed drug or insulin.

Sec. 6004. Increase in additional tax on distributions from HSAs not used for qualified medical expenses.

Sec. 6005. Limitation on health flexible spending arrangements under cafeteria plans.

Sec. 6006. Expansion of information reporting requirements.

Sec. 6007. Additional requirements for charitable hospitals.

Sec. 6008. Imposition of annual fee on branded prescription pharmaceutical manufacturers and importers.

Sec. 6009. Imposition of annual fee on medical device manufacturers and importers.

Sec. 6010. Imposition of annual fee on health insurance providers.

Sec. 6011. Study and report of effect on veterans health care.

Sec. 6012. Elimination of deduction for expenses allocable to Medicare Part D subsidy.

Sec. 6013. Modification of itemized deduction for medical expenses.

Sec. 6014. Limitation on excessive remuneration paid by certain health insurance providers.

Subtitle B—Other provisions

Sec. 6021. Exclusion of health benefits provided by Indian tribal governments.

Sec. 6022. Establishment of simple cafeteria plans for small businesses.

Sec. 6023. Qualifying therapeutic discovery project credit.

I

Health care coverage

A

Insurance market reforms

1001.

Insurance market reforms in the individual and small group markets

The Social Security Act (42 U.S.C. 301 et seq.) is amended by adding at the end the following:

XXII

Health insurance coverage

2200.

Ensuring essential and affordable health benefits coverage for all Americans

It is the purpose of this title to ensure that all Americans have access to affordable and essential health benefits coverage—

(1)

by requiring that all new health benefits plans offered to individuals and employees in the individual and small group markets be qualified health benefits plans that meet the insurance rating reforms and essential health benefits coverage requirements established under parts A and C;

(2)

by establishing State exchanges under part B that provide individuals and employees in the individual and small group markets greater access to qualified health benefits plans and to information concerning these health plans;

(3)

by making health benefits coverage more affordable by establishing premium credits and cost-sharing subsidies under part C for individuals enrolling in a health benefits plan through an exchange; and

(4)

by establishing the CO-OP program under part D to encourage the establishment of nonprofit health care cooperatives.

A

Insurance reforms

1

Requirements in individual and small group markets

2201.

General requirements and definitions

(a)

New plans must be qualified health benefits plans

Except as provided in subpart 3 (relating to preservation of existing coverage), each State shall provide that each health benefits plan which is offered in the individual or small group market within the State shall be a qualified health benefits plan.

(b)

Qualified health benefits plan

For purposes of this title, a health benefits plan which is offered in the individual or small group market shall be a qualified health benefits plan with respect to a State if—

(1)

the plan has in effect a certification (which may include a seal or other indication of approval) issued or recognized by the State that such plan meets the applicable requirements of—

(A)

this part (relating to requirements for insurance market reforms); and

(B)

part C (relating to requirements to make health insurance affordable); and

(2)

the offeror of the plan—

(A)

is licensed by the State (and in good standing with the State) to offer a health benefits plan in the State; and

(B)

complies with such other requirements as the Secretary or the State may establish pursuant to this title for qualified health benefits plans.

(c)

Terms relating to health benefits plans

In this title:

(1)

Health benefits plan

(A)

In general

The term health benefits plan means health insurance coverage and a group health plan.

(B)

Exception for self-insured plans and MEWAs

Except to the extent specifically provided by this title, the term health benefits plan shall not include a group health plan or multiple employer welfare arrangement to the extent the plan is not subject to State insurance regulation under section 514 of the Employee Retirement Income Security Act of 1974.

(2)

Health insurance coverage and issuer

The terms health insurance coverage and health insurance issuer have the meanings given such terms by section 9832(b) of the Internal Revenue Code of 1986.

(3)

Group health plan

The term group health plan has the meaning given such term by section 5000(b) of such Code.

(4)

Health benefits plan offeror

The terms health benefits plan offeror and offeror mean in the case of—

(A)

health insurance coverage, the health insurance issuer offering the coverage; and

(B)

a group health plan—

(i)

the plan sponsor; or

(ii)

in the case of a plan maintained jointly by 1 or more employers and 1 or more employee organizations and with respect to which an employer is the primary source of financing, such employer.

(d)

Definitions relating to markets

In this title:

(1)

Group market

The term group market means the health insurance market 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.

(2)

Individual market

The term individual market means the market for health insurance coverage offered to individuals other than in connection with a group health plan.

(3)

Large and small group markets

The terms large group market and small group market mean the health insurance market 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 a large employer (as defined in section 2230(a)(1)) or by a small employer (as defined in section 2230(a)(2)), respectively.

2202.

Prohibition on preexisting condition exclusions

(a)

Prohibition

A health benefits plan shall be treated as a qualified health benefits plan only if the plan does not—

(1)

impose any preexisting condition exclusion with respect to the plan; or

(2)

otherwise impose any limit or condition on the coverage under the plan with respect to an individual or dependent of an individual based on any health status-related factors in relation to the individual or dependent.

(b)

Preexisting condition exclusion

For purposes of this section, the term preexisting condition exclusion means, with respect to 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 for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date.

(c)

Health status-related factors

For purposes of this section, the term health status-related factors means health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), and disability.

2203.

Guaranteed issue and renewal for insured plans

(a)

In general

Except as provided in this section, a health benefits plan shall be treated as a qualified health benefits plan only if the offeror of the plan—

(1)

in the case of a plan offered—

(A)

in the individual market in a State, must accept every individual that applies for enrollment in the plan;

(B)

in the small group market in a State, must accept—

(i)

every small employer in the State that applies for enrollment of its employees under the plan; and

(ii)

every individual who is eligible to enroll in the plan by reason of a relationship to the employer as is determined—

(I)

in accordance with the terms of such plan;

(II)

as provided by the offeror under rules of the offeror that are uniformly applicable to small employers in the small group market within a State; and

(III)

in accordance with all applicable State laws governing the offeror and the small group market; and

(2)

must renew or continue in force coverage under the plan at the option of the individual or small employer, as applicable.

An offeror of a plan shall not be treated as meeting the requirements of this subsection unless the plan also accepts, renews, or continues in force coverage of an individual who is eligible for enrollment in the plan by reason of their relationship to the named insured under the plan.
(b)

Special rules for guaranteed issue

(1)

Enrollment

Each offeror of a health benefits plan shall establish annual and special enrollment periods meeting the requirements of section 2236(d)(2) and may restrict enrollment described in subsection (a)(1) to such enrollment periods.

(2)

Capacity limits

For purposes of applying subsection (a)(1), if, as determined under regulations prescribed by the Secretary, a plan has a capacity limit, the plan may limit enrollment to that capacity limit but only if the plan selects individuals for enrollment on the basis of the order in which the individuals applied for enrollment and in a manner that does not discriminate in any manner prohibited under section 2202.

(c)

Guaranteed renewability

For purposes of applying subsection (a)(2)—

(1)

rescissions of coverage shall be treated in the same manner as non-renewals of coverage; and

(2)

the premium rate at the time of renewal shall be determined using only the same categories of rate adjustment factors that were used at issue.

The Secretary may prescribe rules for the application of paragraph (2) during any period during which the reforms under this subpart are being phased in by a State.
2204.

Premium rating rules

(a)

In general

A health benefits plan shall be treated as a qualified health benefits plan only if the premium rate charged for any benefit level of the plan may not vary except as provided in this section.

(b)

Limits based on specific ratios

(1)

In general

In the case of a health benefits plan offered in a rating area, the premium rate charged under the plan may vary only as provided in paragraphs (2) and (3).

(2)

By family enrollment

The premium rate may vary by family enrollment (such as variations within categories and compositions of families) so long as the ratio of the premium for the following types of enrollment to the premium for individual enrollment does not exceed the following ratios:

(A)

Individual, 1 to 1.

(B)

Adult with child, 1.8 to 1.

(C)

Two adults, 2 to 1.

(D)

Family, 3 to 1.

(3)

Age and tobacco use

Within any family enrollment category, the portion of the premium attributable to each individual covered by the health benefits plan in that category may vary as follows:

(A)

Limited age variation permitted

By age (within the standard age bands established under subsection (c)) so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 4 to 1.

(B)

Tobacco use

By tobacco use so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 1.5 to 1.

(c)

Standard age categories

The Secretary shall establish standard age bands between which premium rates may vary as provided in subsection (b)(3)(A).

(d)

Rule of construction

Nothing in this section shall be construed to allow a health benefits plan to vary a premium rate on the basis of health status-related factors, gender, class of business, claims experience, or any other factor not described in subsection (b).

2205.

Use of uniform outline of coverage documents

A health benefits plan shall provide an outline of the plan's health insurance coverage meeting the standards of uniformity adopted by the Secretary under section 1503 of the America's Healthy Future Act of 2009 to—

(1)

an applicant at the time of application;

(2)

an enrollee at the time of enrollment; and

(3)

a policyholder or certificate holder of the plan at the time the policy is issued or the certificate is delivered.

2

Reforms relating to allocation of risks

2211.

Rating areas; pooling of risks; phase in of rating rules in small group markets

(a)

Rating areas

(1)

In general

Each State shall establish 1 or more rating areas within that State for purposes of applying the requirements of this title.

(2)

Secretarial review

The Secretary shall review the rating areas established by each State under subsection (a) to ensure the adequacy of such areas for purposes of carrying out the requirements of this title. If the Secretary determines a State's rating areas are not so adequate, the Secretary may establish rating areas for that State.

(b)

Single risk pool

(1)

In general

For purposes of applying the insurance reform requirements under subpart 1—

(A)

Individual market

The offeror of an insured qualified health benefits plan offered in the individual market in an area covered by an exchange shall consider all enrollees in the plan, including individuals who do not purchase such a plan through an exchange, to be members of a single risk pool.

(B)

Small group market

The offeror of a qualified health benefits plan offered in the small group market in an area covered by an exchange shall consider all enrollees in the plan, including individuals who do not purchase such a plan through an exchange, to be members of a single risk pool.

(2)

State election

A State may elect to combine the individual and small group markets within the State for purposes of applying this subsection.

(c)

Phase in of insurance reform rules in small group market

Upon request to, and approval by, the Secretary, each State shall phase in the application to the small group market of the insurance reform requirements under subpart 1 over a consecutive period of years (not greater than 5) beginning July 1, 2013.

2212.

Risk adjustment

(a)

In general

Each State shall adopt a risk adjustment model described in subsection (b) to implement procedures for the application of risk adjustment among qualified health benefit plans and grandfathered health benefits plans offered in both the individual and small group market. Such procedures shall apply to such qualified health benefit plans whether or not purchased through an exchange.

(b)

Risk adjustment models

(1)

In general

The Secretary shall establish 1 or more risk adjustment models for proper adjustments of premium amounts payable among offerors of qualified health benefits plans that take into account (in a manner specified by the Secretary) the differences in the risk characteristics of individuals and employers enrolled under the different plans so as to minimize the impact of adverse selection of enrollees among the plans.

(2)

State option

A State may—

(A)

adopt a risk adjustment model established under paragraph (1); or

(B)

establish its own risk adjustment model for purposes of subsection (a), but only if the State establishes to the satisfaction of the Secretary that such model will produce results substantially similar to the results of risk adjustment models established under paragraph (1) and will not increase costs to the Federal government.

(3)

Operation of risk adjustment system

A State may select an entity certified under subsection (c) to implement and operate its risk adjustment model under this section.

(c)

Certification of entities conducting risk adjustment

The Secretary shall certify entities which the Secretary determines have the required expertise to implement the risk adjustment models adopted or established under subsection (b). The Secretary may not certify any entity which is a health benefits plan offeror or any entity owned or operated by such an offeror.

2213.

Establishment of transitional reinsurance program for individual markets in each State

(a)

In general

Each State shall, not later than July 1, 2013—

(1)

include in the Model Regulation, Federal standard, or State law or regulation the State adopts and has in effect under section 2225(a)(2) the provisions described in subsection (b); and

(2)

establish (or enter into a contract with) 1 or more applicable reinsurance entities to carry out the reinsurance program under this section.

(b)

Model regulation

(1)

In general

In establishing the Model Regulation under section 2225 to carry out this part, the Secretary shall request the National Association of Insurance Commissioners (the NAIC) to include provisions that enable States to establish and maintain a program under which—

(A)

the offerors of health benefits plans that are offered in the individual market are required to make payments to an applicable reinsurance entity for any plan year beginning in the 36-month period beginning July 1, 2013; and

(B)

the applicable reinsurance entity collects payments under subparagraph (A) and uses amounts so collected to make reinsurance payments to offerors of health benefits plans described in subparagraph (A) that cover high risk individuals for any plan year beginning in such 36-month period.

If the NAIC does not include such provisions as part of the Model Regulation , the Secretary shall include such provisions in a Federal standard under section 2225(a)(1)(B).
(2)

High-risk individual; payment amounts

The following shall be included in the provisions under paragraph (1):

(A)

Determination of high-risk individuals

The method by which individuals will be identified as high risk individuals for purposes of the reinsurance program established under this section. Such method shall provide for identification of individuals as high-risk individuals on the basis of—

(i)

a list of at least 50 but not more than 100 medical conditions that are identified as high-risk conditions and that may be based on the identification of diagnostic and procedure codes that are indicative of individuals with pre-existing, high-risk conditions; or

(ii)

any other comparable objective method of identification recommended by the American Academy of Actuaries.

(B)

Payment amount

(i)

In general

The formula for determining the amount of payments that will be paid to the offerors of health benefits plans that insure high-risk individuals. Such formula shall provide for the equitable allocation of available funds through reconciliation and may be designed—

(I)

to provide a schedule of payments that specifies the amount that will be paid for each of the conditions identified under subparagraph (A); or

(II)

to use any other comparable method for determining payment amounts that is recommended by the American Academy of Actuaries and that encourages the use of care coordination and care management programs for high risk conditions.

(ii)

Coordination with cost-sharing and risk adjustment payments

Such provisions shall provide methods to coordinate the payment system under this section with any cost-sharing requirements of a plan and the risk-adjustment program under section 2212.

(3)

Determination of required contributions

(A)

In general

The provisions under paragraph (1) shall include the method for determining the amount each offeror of a health benefits plan participating in the reinsurance program under this section is required to contribute under paragraph (1)(A) for each plan year beginning in the 36-month period beginning July 1, 2013. The contribution amount for any plan year may be based on the percentage of revenue of each offeror or on a specified amount per enrollee and may be required to be paid in advance or periodically throughout the plan year.

(B)

Specific requirements

The method under this paragraph shall be designed so that—

(i)

the contribution amount for each offeror proportionally reflects each offeror’s fully insured commercial book of business for all major medical products and third party administration fees;

(ii)

the contribution amount can include an additional amount to fund the administrative expenses of the applicable reinsurance entity;

(iii)

subject to clause (iv), the aggregate contribution amounts for all States shall, based on the best estimates of the NAIC or the Secretary, whichever is applicable, and without regard to amounts described in clause (ii), equal $10,000,000,000 for plan years beginning in the 12-month period beginning July 1, 2013, $6,000,000,000 for plan years beginning in the 12-month period beginning July 1, 2014, and $4,000,000,000 for plan years beginning in the 12-month period beginning July 1, 2015; and

(iv)

in addition to the aggregate contribution amounts under clause (iii), each offeror's contribution amount reflects its proportionate share of the $5,000,000,000 amount used to fund the retiree reinsurance program under section 2216.

Nothing in this subparagraph shall be construed to preclude a State from collecting additional amounts from offerors on a voluntary basis.
(4)

Expenditure of funds

(A)

In general

Except as provided in subparagraph (B), the provisions under paragraph (1) shall provide that—

(i)

the contribution amounts collected for any 12-month period may be allocated and used in any of the three 12-month periods for which amounts are collected based on the reinsurance needs of a particular period or to reflect experience in a prior period; and

(ii)

amounts remaining unexpended as of June 30, 2016, may be used to make payments under any reinsurance program of a State in the individual market in effect in the 24-month period beginning on July 1, 2016.

(B)

Transfers to Secretary for retiree reinsurance

The provisions under paragraph (1) shall provide that each applicable reinsurance entity shall transfer to the Secretary amounts collected that are allocable to amounts required to be collected under paragraph (3)(B)(iv).

(c)

Applicable reinsurance entity

For purposes of this section—

(1)

In general

The term applicable reinsurance entity means a not-for-profit organization—

(A)

the purpose of which is to help stabilize premiums for coverage in the individual market in a State during the first 3 years of operation of an exchange for that market within the State when the risk of adverse selection related to new rating rules and market changes is greatest; and

(B)

the duties of which shall be to carry out the reinsurance program under this section by coordinating the funding and operation of the risk-spreading mechanisms designed to implement the reinsurance program.

(2)

State discretion

A State may have more than 1 applicable reinsurance entity to carry out the reinsurance program under this section within the State and 2 or more States may enter into agreements to provide for an applicable reinsurance entity to carry out such program in all such States.

(3)

Entities are tax-exempt

An applicable reinsurance entity established under this section shall be treated as an organization exempt from taxation under section 501(a) of the Internal Revenue Code of 1986. The preceding sentence shall not apply to the tax imposed by section 511 such Code (relating to tax on unrelated business taxable income of an exempt organization).

(d)

Coordination with State high-risk pools

The State shall eliminate or modify any State high-risk pool to the extent necessary to carry out the reinsurance program established under this section. The State may coordinate the State high-risk pool with such program to the extent not inconsistent with the provisions of this section.

2214.

Establishment of risk corridors for plans in individual and small group markets

(a)

In general

The Secretary shall establish and administer a program of risk corridors for plan years beginning during the 36-month period beginning on July 1, 2013, under which a qualified health benefits plan offered in the individual or small group market may elect (before the beginning of such 36-month period) to participate in a payment adjustment system based on the ratio of the allowable costs of the plan to the plan's aggregate premiums. Such program shall be based on the program for regional participating provider organizations under part D of title XVIII.

(b)

Payment methodology

(1)

Payments out

The Secretary shall provide under the program established under subsection (a) that if—

(A)

a participating plan's allowable costs for any plan year are more than 103 percent but not more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to 50 percent of the target amount in excess of 103 percent of the target amount; and

(B)

a participating plan's allowable costs for any plan year are more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of allowable costs in excess of 108 percent of the target amount.

(2)

Payments in

The Secretary shall provide under the program established under subsection (a) that if—

(A)

a participating plan's allowable costs for any plan year are less than 97 percent but not less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to 50 percent of the excess of 97 percent of the target amount over the allowable costs; and

(B)

a participating plan's allowable costs for any plan year are less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of the excess of 92 percent of the target amount over the allowable costs.

(c)

Definitions

In this section:

(1)

Allowable costs

(A)

In general

The amount of allowable costs of a plan for any year is an amount equal to the total costs (other than administrative costs) of the plan in providing benefits covered by the plan.

(B)

Reduction for risk adjustment and reinsurance payments

Allowable costs shall be reduced by any risk adjustment and reinsurance payments received under section 2212 and 2213.

(2)

Target amount

The target amount of a plan for any year is an amount equal to the total premiums (including any premium credits or subsidies under any governmental program) reduced by the administrative costs of the plan.

2215.

Temporary high risk pools for individuals with preexisting conditions

(a)

Establishment of high risk pools

(1)

In general

Not later than 1 year after the date of enactment of this title, the Secretary shall establish 1 or more high risk pools that—

(A)

provide to all eligible individuals health insurance coverage (or comparable coverage) that does not impose any preexisting condition exclusion with respect to such coverage for all eligible individuals; and

(B)

provide for health benefits coverage and premium rates described under subsection (b).

(2)

Administration

The Secretary may carry out this section—

(A)

directly; or

(B)

through agreements, grants, or contracts with States or other persons the Secretary determines appropriate.

(b)

Coverage and premium rates

Except as provided in subsection (c)(2)—

(1)

Coverage

The Secretary shall provide that the health benefits coverage provided to an eligible individual through a high risk pool under this section shall—

(A)

consist of the essential benefits package described in section 2242; and

(B)

provide the bronze level of coverage described in section 2243(b)(1).

(2)

Premium rates

(A)

In general

Except as provided in subparagraph (B), the premium rate charged to an eligible individual enrolled in a high risk pool shall be equal to the standard premium rate for a health benefits plan providing the essential benefits package and bronze level of coverage described in paragraph (1).

(B)

Variation of premiums

The Secretary may vary the premium under subparagraph (A) to the same extent, and in the same manner, as the offeror of a qualified health benefits plan may vary the premium for the plan under section 2204.

(c)

Funding; termination of authority

(1)

In general

There is appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, $5,000,000,000 to pay claims against (and administrative costs of) the high risk pool in excess of the premiums collected from eligible individuals enrolled in the high risk pool. Such funds shall be available without fiscal year limitation.

(2)

Insufficient funds

If the Secretary estimates for any fiscal year that the aggregate amounts available for payment of expenses of the high risk pool will be less than the amount of the expenses, the Secretary shall make such adjustments as are necessary to eliminate such deficit, including reducing benefits, increasing premiums, or establishing waiting lists.

(3)

Termination of authority

(A)

In general

Except as provided in subparagraph (B), coverage of eligible individuals under a high risk pool shall terminate as of the end of June 30, 2013.

(B)

Transition to exchange

The Secretary shall develop procedures to provide for the transition of eligible individuals enrolled in health insurance coverage offered through a high risk pool established under this section into qualified health benefits plans offered through an exchange. Such procedures shall ensure that there is no lapse in coverage with respect to the individual and may extend coverage after June 30, 2013, if the Secretary determines necessary to avoid such a lapse.

(d)

Eligible individual

In this section, the term eligible individual means an individual who demonstrates to the satisfaction of the Secretary that the individual—

(1)

has been denied health insurance coverage by reason of a preexisting condition (as defined in section 2202(b));

(2)

has been uninsured for a continuous period of at least 6 months before the date of application for enrollment in a high risk pool;

(3)

is not eligible for essential health benefits coverage (as defined in section 5000A(f)); and

(4)

is an individual who is, and who is reasonably expected to be for the entire period of coverage, a citizen or national of the United States, an alien lawfully admitted to the United States for permanent residence, or an alien lawfully present in the United States.

2216.

Reinsurance for retirees covered by employer-based plans

(a)

Administration

(1)

In general

Not later than 90 days after the date of enactment of this section, the Secretary shall establish a temporary reinsurance program to provide reimbursement to participating employment-based plans for a portion of the cost of providing health benefits to retirees during the period beginning on the date on which such program is established and ending on the date on which the Secretary estimates that applications for payments under this section will have been made that equal the funds made available under this section (reduced by any administrative costs of the program).

(2)

Reference

In this section:

(A)

Health benefits

The term health benefits means medical, surgical, hospital, prescription drug, and such other benefits as shall be determined by the Secretary, whether self-funded, or delivered through the purchase of insurance or otherwise.

(B)

Employment-based plan

The term employment-based plan means a group health benefits plan that—

(i)

is—

(I)

maintained by one or more current or former employers (including without limitation any State or local government or political subdivision thereof), an employee organization, a voluntary employees’ beneficiary association, or a committee or board of individuals appointed to administer such plan; or

(II)

a multiemployer plan (as defined in section 3(37) of the Employee Retirement Income Security Act of 1974); and

(ii)

provides health benefits to retirees.

(C)

Retirees

The term retirees means individuals who are age 55 and older but are not eligible for coverage under title XVIII of the Social Security Act, and who are not active employees of an employer maintaining, or currently contributing to, the employment-based plan or of any employer that has made substantial contributions to fund such plan.

(b)

Participation

(1)

Employment-based plan eligibility

A participating employment-based plan is an employment-based plan that—

(A)

meets the requirements of paragraph (2) with respect to benefits provided under the plan; and

(B)

submits to the Secretary an application for participation in the program, at such time, in such manner, and containing such information as the Secretary shall require.

(2)

Plan requirements

An employment-based plan meets the requirements of this paragraph if the plan—

(A)

provides benefits appropriate for individuals between the ages described in subsection (a)(2)(C) and that are certified as so appropriate by the Secretary;

(B)

implements programs and procedures to generate cost-savings with respect to participants with chronic and high-cost conditions; and

(C)

provides documentation of the actual cost of medical claims involved and for which reimbursement is sought under this section.

(c)

Payments

(1)

Submission of claims

(A)

In general

A participating employment-based plan shall submit claims for reimbursement to the Secretary which shall contain documentation of the actual costs of the items and services for which each claim is being submitted.

(B)

Basis for claims

Claims submitted under paragraph (1) shall be based on the actual amount expended by the participating employment-based plan involved within the plan year for the appropriate employment-based health benefits provided to a retiree or the spouse, surviving spouse, or dependent of such retiree. In determining the amount of a claim for purposes of this subsection, the participating employment-based plan shall take into account any negotiated price concessions (such as discounts, direct or indirect subsidies, rebates, and direct or indirect remunerations) obtained by such plan with respect to such health benefit. For purposes of determining the amount of any such claim, the costs paid by the retiree or the retiree’s spouse, surviving spouse, or dependent in the form of deductibles, co-payments, or co-insurance shall be included in the amounts paid by the participating employment-based plan.

(2)

Program payments

If the Secretary determines that a participating employment-based plan has submitted a valid claim under paragraph (1), the Secretary shall reimburse such plan for 80 percent of that portion of the costs attributable to such claim that exceed $15,000, subject to the limits contained in paragraph (3).

(3)

Limit

To be eligible for reimbursement under the program, a claim submitted by a participating employment-based plan under paragraph (1) with respect to any individual shall not be less than $15,000 nor greater than $90,000. Such amounts shall be adjusted each fiscal year based on the percentage increase in the Medical Care Component of the Consumer Price Index for all urban consumers (rounded to the nearest multiple of $1,000) for the year involved.

(4)

Use of payments

Amounts paid to a participating employment-based plan under this subsection shall be used to lower costs for the plan. Such payments may be used to reduce premium costs for an entity described in subsection (a)(2)(B)(i) or to reduce premium contributions, co-payments, deductibles, co-insurance, or other out-of-pocket costs for plan participants. Such payments shall not be used as general revenues for an entity described in subsection (a)(2)(B)(i). The Secretary shall develop a mechanism to monitor the appropriate use of such payments by such entities.

(5)

Payments not treated as income

Payments received under this subsection shall not be included in determining the gross income of an entity described in subsection (a)(2)(B)(i) that is maintaining or currently contributing to a participating employment-based plan.

(6)

Appeals

The Secretary shall establish—

(A)

an appeals process to permit participating employment-based plans to appeal a determination of the Secretary with respect to claims submitted under this section; and

(B)

procedures to protect against fraud, waste, and abuse under the program.

(d)

Audits

The Secretary shall conduct annual audits of claims data submitted by participating employment-based plans under this section to ensure that such plans are in compliance with the requirements of this section.

(e)

Available funds

(1)

In general

The Secretary of the Treasury shall establish a separate account within the Treasury of the United States for deposit of amounts transferred to the Secretary of Health and Human Services under section 2213(b)(4)(B).

(2)

Appropriations

Amounts in the account are hereby appropriated for use by the Secretary in carrying out the program under this section.

(3)

Limitations

The Secretary has the authority to stop taking applications for participation in the program if applications will exceed amounts in the account.

3

Preservation of right to maintain existing coverage

2221.

Grandfathered health benefits plans

(a)

In general

In the case of a grandfathered health benefits plan—

(1)

nothing in this title shall be construed to require that an individual terminate coverage under the plan if such individual was enrolled in the plan as of the day before the effective date of this title;

(2)

except as provided in subsection (b), the requirements of this part shall not apply to the plan; and

(3)

the plan shall not be treated as a qualified health benefits plan for purposes of this title.

(b)

Application of rating rules in small group market

Each State shall phase in the application of the insurance reform requirements under subpart 1 to grandfathered health benefits plans offered in the small group market within the State over a consecutive period of years (not greater than 5) beginning July 1, 2013.

(c)

Grandfathered health benefits plan

In this title:

(1)

In general

The term grandfathered health benefits plan means any of the following that was offered and was in force and effect on the effective date of this title:

(A)

Health insurance coverage in the individual market.

(B)

A group health plan.

(2)

Limited new enrollment

(A)

In general

Except as provided in subparagraphs (B) and (C), a health benefits plan shall cease to be a grandfathered health benefits plan if it enrolls individuals who were not enrolled in the plan as of the day before the date described in paragraph (1).

(B)

Allowance for family members to join current coverage

Family members of an individual enrolled in a health benefits plan as of the day before the date described in paragraph (1) may enroll in the plan on or after such date.

(C)

Allowance for new employees to join current plan

A group health plan of an employer that provides coverage as of the day before the date described in paragraph (1) may provide for the enrolling of new employees (and their families) in such plan.

(3)

Special rule for catastrophic plans

If health insurance coverage offered and in force in the individual market as of the day before the effective of this title is actuarially equivalent to a catastrophic plan described in section 2243(c), such coverage shall be treated as a grandfathered health benefits plan for purposes of this section.

4

Continued role of States

2225.

Continued State enforcement of insurance regulations

(a)

In general

(1)

Model regulation

(A)

In general

The Secretary shall request the National Association of Insurance Commissioners (in this section referred to as the NAIC) to, not later than 12 months after the date of enactment of this title, develop and promulgate a Model Regulation that implements the requirements set forth in this title for health benefit plans offered within a State. In developing and promulgating the Model Regulation, the NAIC shall consult with its members, health insurance issuers, consumer organizations, and such other individuals as the NAIC selects in a manner designed to ensure balanced representation among interested parties.

(B)

Secretarial action

The Secretary shall include the Model Regulation established under paragraph (1) in the regulations prescribed by the Secretary to implement the requirements described in subparagraph (A). If the NAIC does not promulgate the Model Regulation within the 12-month period under subparagraph (A), the Secretary shall establish a Federal standard implementing such requirements.

(2)

State action

Each State that elects to apply the requirements set forth in this title to health benefit plans offered within the State shall, not later than July 1, 2013, adopt and have in effect—

(A)

the Model Regulation or Federal standard established under paragraph (1), whichever is applicable; or

(B)

a State law or regulation that the Secretary determines implements the requirements for health benefit plans offered within the State.

(3)

Failure to implement provisions

(A)

In general

If—

(i)

a State does not elect to apply the requirements set forth in this title to health benefit plans offered within the State; or

(ii)

the Secretary determines that an electing State has failed to adopt or substantially enforce the Model Regulation, Federal standard, or State law or regulations described in paragraph (2), whichever is applicable, with respect to health benefits plan offerors in the State,

the Secretary shall implement and enforce such requirements insofar as they relate to the issuance, sale, renewal, and offering of health benefits plans in such State until such time as the Secretary determines the State has adopted and is substantially enforcing the requirements.
(B)

Enforcement authority

The provisions of section 2722(b) of the Public Health Services Act shall apply to the enforcement under subparagraph (A) of the provisions of this part (without regard to any limitation on the application of those provisions to group health plans).

(4)

Ratings reforms must apply uniformly to all offerors

The Model Regulation, Federal standard, or State law and regulation implemented by a State under this subsection shall require that any standard or requirement adopted pursuant to this title (including any standard or requirement described in subsection (c) that offers more protection to consumers than the protection offered by any standard or requirement set forth in this title) shall be applied uniformly to all offerors of all health benefits plans in the individual or small group market, whichever is applicable.

(b)

State exchanges

(1)

Exchanges for qualified plans

(A)

In general

Subject to paragraph (2), not later than July 1, 2013, an electing State under subsection (a)(2) shall establish and have in operation 1 or more exchanges (including SHOP exchanges) meeting the requirements of part B with respect to the offering of qualified health benefits plans through the exchange.

(B)

Failure to establish

If—

(i)

a State is not an electing State under subsection (a)(2); or

(ii)

an electing State does not establish the exchanges described in subparagraph (A) within 24 months after the date of enactment of this title (or the Secretary determines at the end of the 24-month period that the exchanges will not be operational by July 1, 2013),

the Secretary shall enter into a contract with a nongovernmental entity to establish and operate the exchanges within the State.
(2)

Interim exchanges

Each electing State under subsection (a)(2) shall as soon as practicable establish the exchanges described in section 2235(e) for use by residents of the State during the period beginning January 1, 2010, and ending June 30, 2013. In the case of a State that is not an electing State under subsection (a)(2), or if the Secretary determines that the exchanges in an electing State will not be operational within a reasonable period of time after the date of enactment of this title, the Secretary shall enter into a contract with a nongovernmental entity to establish and operate the exchanges within the State during such period.

(c)

Continued applicability of State law with respect to health benefits plans

(1)

In general

Subject to paragraphs (2) and (3), this title shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement relating to health benefits plan offerors in connection with a health benefits plan that offers more protection to consumers than the protection offered by any standard or requirement set forth in this title. The standards or requirements referred to in the preceding sentence shall include standards or requirements relating to—

(A)

consumer protections, including claims grievance procedures, external review of claims determinations, oversight of insurance agent practices and training, and insurance market conduct;

(B)

premium rating reviews;

(C)

solvency and reserve requirements relating to the licensure of health insurance issuers operating in the State; and

(D)

the assessment of State-based premium taxes on health insurance issuers.

(2)

Special rule for rating requirements

For purposes of paragraph (1), in the case of the ratings requirements under section 2204, a State law shall not be treated as offering more protection to consumers than the protection offered by such requirements if the State law imposes ratios that are greater than the ratios specified in section 2204(b).

(3)

Continued preemption with respect to group health plans

Nothing in this part shall be construed to affect or modify the provisions of section 514 of the Employee Retirement Income Security Act of 1974 with respect to group health plans.

(d)

Automatic enrollment

A State may institute a program to provide that offerors of qualified health benefit plans, small employers, and exchanges offering qualified health benefits plans in the individual and small group market within the State may automatically enroll individuals and employees in, or continue enrollment of individuals in, qualified health benefit plans where appropriate to ensure coverage of the individuals. Any automatic enrollment program shall include adequate notice and the opportunity for an individual or employee to opt out of any coverage the individual or employee were automatically enrolled in.

(e)

Claims review process

Each State shall—

(1)

require each offeror of a qualified health benefits plans offered through an exchange—

(A)

to provide an internal claims appeal process;

(B)

to provide notice in clear language and in the enrollee's primary language of available internal and external appeals processes and the availability of the ombudsman established under section 2229(a) to assist them with the appeals processes; and

(C)

to allow an enrollee to review their file, to present evidence and testimony as part of the appeals process, and to receive continued coverage pending the outcome of the appeals process;

(2)

provide an external review process for such plans that, at a minimum, includes the consumer protections set forth in the Uniform External Review Model Act promulgated by the National Association of Insurance Commissioners and is binding on such plans; and

(3)

ensure enrollees can seek judicial review through available Federal or State procedures.

(f)

Applicable State authority

In this title, the term applicable State authority means the State insurance commissioner or official or officials designated by the State to enforce the requirements of this title for the State involved.

2226.

Waiver of health insurance reform requirements

(a)

Application

A State may apply to the Secretary for the waiver of all or any requirements under this title and section 5000A of the Internal Revenue Code of 1986 with respect to health insurance coverage within that State for plan years beginning on or after July 1, 2015. Such application shall—

(1)

be filed at such time and in such manner as the Secretary may require; and

(2)

contain such information as the Secretary may require, including—

(A)

a comprehensive description of the State legislation or program for implementing a plan meeting the requirements for a waiver under this section; and

(B)

a 10-year budget plan for such plan that is budget neutral for the Federal government.

(b)

Granting of waivers

The Secretary may grant a request for a waiver under this section if the Secretary determines that—

(1)

the State plan to provide health care coverage to its residents provides coverage that is at least as comprehensive as the coverage required under a qualified health benefits plan offered through exchanges established under this title; and

(2)

the State plan to provide health care coverage to its residents will lower the growth in health care spending, will improve delivery system performance, will provide affordable choices for its citizens, will expand protection against excessive out-of-pocket spending, will provide coverage to the same number of uninsured as the provisions of this title will provide, and will not increase the Federal deficit.

(c)

Scope of waiver

(1)

In general

The Secretary shall determine the scope of a waiver granted to a State under this section, including which Federal laws and requirements will not apply to the State under the waiver.

(2)

Limitation

The Secretary may not waive under this section any Federal law or requirement that is not within the authority of the Secretary.

(d)

Determinations by Secretary

(1)

Time for determination

The Secretary shall make a determination under this section not later than 180 days after the receipt of an application from a State under subsection (a).

(2)

Effect of determination

(A)

Granting of waivers

If the Secretary determines to grant a waiver under this section, the Secretary shall notify the State involved of such determination and the terms and effectiveness of such waiver.

(B)

Denial of waiver

If the Secretary determines a waiver should not be granted under this section, the Secretary shall notify the State involved, and the appropriate committees of Congress of such determination and the reasons therefor.

2227.

Provisions relating to offering of plans in more than one State

(a)

Health care choice compacts

(1)

In general

The Secretary shall request the National Association of Insurance Commissioners to, no later than July 1, 2012, develop model rules for the creation of health care choice compacts under which 2 or more States may enter into an agreement under which—

(A)

1 or more qualified health benefits plans could be offered in the individual markets in all such States but, except as provided in subparagraph (B), only be subject to the laws and regulations of the State in which the plan was written or issued;

(B)

the offeror of any qualified health benefits plan to which the compact applies—

(i)

would continue to be subject to market conduct, unfair trade practices, network adequacy, and consumer protection standards, including addressing disputes as to the performance of the contract, of the State in which the purchaser resides;

(ii)

would be required to be licensed in each State in which it offers the plan under the compact or to submit to the jurisdiction of each such State with regard to the standards described in clause (i) (including allowing access to records as if the insurer were licensed in the State); and

(iii)

must clearly notify consumers that the policy may not be subject to all the laws and regulations of the State in which the purchaser resides.

If the NAIC does not promulgate the model rules by July 1, 2012, the Secretary shall, not later than July 1, 2013, establish a Federal standard implementing such rules.
(2)

State authority

A State may not enter into an agreement under this subsection unless the State enacts a law after the date of the enactment of this title that specifically authorizes the State to enter into such agreements.

(3)

Effective date

A health care choice compact described in paragraph (1) shall not take effect before January 1, 2015.

(b)

Authority for nationwide plans

(1)

In general

Notwithstanding section 2225(c)(1), and except as provided in paragraph (2), if an offeror of a qualified health benefits plan in the individual or small group market meets the requirements of this subsection—

(A)

the offeror of the plan may offer the qualified health benefits plan in more than 1 State; and

(B)

any State law mandating benefit coverage by a health benefits plan shall not apply to the qualified health benefits plan.

(2)

State opt-out

A State may, by specific reference in a law enacted after the date of enactment of this title, provide that this subsection shall not apply to that State. Such opt-out shall be effective until such time as the State by law revokes it.

(3)

Plan requirements

An offeror meets the requirements of this subsection with respect to a qualified health benefits plan if—

(A)

the plan offers a benefits package that is uniform in each State in which the plan is offered and meets the requirements set forth in paragraph (3);

(B)

the offeror is licensed in each State in which it offers the plan and is subject in such State to the standards and requirements described in the last sentence of section 2225(c)(1);

(C)

the offeror meets all requirements of this title with respect to a qualified health benefits plan, including the requirement to offer the silver and gold levels of the plan in each exchange in the State for the market in which the plan is offered; and

(D)

the offeror determines the premiums for the plan in any State on the basis of the ratings rules in effect in that State for the ratings areas in which it is offered.

(4)

Applicable regulations

(A)

In general

The Secretary shall request the National Association of Insurance Commissioners to, no later than 2012, develop model rules for the offering of a qualified health benefits plans on a national basis. Such rules shall establish standards for—

(i)

the implementation of benefit categories, taking into account how each benefit is offered in a majority of States; and

(ii)

harmonization between applicable State authorities of State insurance regulations relating to filing of forms and the filing of premium rates.

If the NAIC does not promulgate the model rules by December 31, 2012, the Secretary shall, not later than December 31, 2013, establish a Federal standard implementing such rules.
(B)

State action

Each State (other than a State described in paragraph (2)) shall include the provisions described in subparagraph (A) in the Model Regulation, Federal standard, or State law or regulation the State adopts and has in effect under section 2225(a)(2).

2228.

State flexibility to establish basic health programs for low-income individuals not eligible for Medicaid

(a)

Establishment of program

(1)

In general

The Secretary shall establish a basic health program meeting the requirements of this section under which a State may enter into contracts to offer 1 or more standard health plans providing at least an essential benefits package described in section 2242 to eligible individuals in lieu of offering such individuals coverage through an exchange established under part B.

(2)

Certifications as to benefit coverage and costs

Such program shall provide that a State may not establish a basic health program under this section unless the State establishes to the satisfaction of the Secretary, and the Secretary certifies, that—

(A)

in the case of an eligible individual enrolled in a standard health plan offered through the program, the State provides—

(i)

that the amount of the monthly premium an eligible individual is required to pay for coverage under the standard health plan for the individual and the individual's dependents does not exceed the amount of the monthly premium that the eligible individual would have been required to pay if the individual had enrolled in the applicable second lowest cost silver plan (as defined in section 36B(b)(3)(B) of the Internal Revenue Code of 1986) offered to the individual through an exchange; and

(ii)

that the cost-sharing an eligible individual is required to pay under the standard health plan does not exceed—

(I)

the cost-sharing required under a platinum plan in the case of an eligible individual with household income not in excess of 150 percent of the poverty line for the size of the family involved; and

(II)

the cost-sharing required under a gold plan in the case of an eligible individual; and

(B)

the benefits provided under the standard health plans offered through the program cover at least benefits required under an essential benefits package described in section 2242.

For purposes of subparagraph (A)(i), the amount of the monthly premium an individual is required to pay under either the standard health plan or the applicable second lowest cost silver plan shall be determined after reduction for any premium credits and premium subsidies allowable with respect to either plan.
(b)

Standard health plan

In this section, the term standard heath plan means a health benefits plan that the State contracts with under this section—

(1)

under which the only individuals eligible to enroll are eligible individuals;

(2)

that provides at least an essential benefits package described in section 2242; and

(3)

in the case of a plan that provides health insurance coverage offered by a health insurance issuer, that has a medical loss ratio of at least 85 percent.

(c)

Contracting process

(1)

In general

A State basic health program shall establish a competitive process for entering into contracts with standard health plans under subsection (a), including negotiation of premiums and cost-sharing and negotiation of benefits in addition to those required by an essential benefits package described in section 2242.

(2)

Specific items to be considered

A State shall, as part of its competitive process under paragraph (1), include at least the following:

(A)

Innovation

Negotiation with offerors of a standard health plan for the inclusion of innovative features in the plan, including—

(i)

care coordination and care management for enrollees, especially for those with chronic health conditions;

(ii)

incentives for use of preventive services; and

(iii)

the establishment of relationships between providers and patients that maximize patient involvement in health care decision-making, including providing incentives for appropriate utilization under the plan.

(B)

Health and resource differences

Consideration of, and the making of suitable allowances for, differences in health care needs of enrollees and differences in local availability of, and access to, health care providers. Nothing in this subparagraph shall be construed as allowing discrimination on the basis of pre-existing condition or other health status-related factors.

(C)

Managed care

Contracting with managed care systems, or with systems that offer as many of the attributes of managed care as are feasible in the local health care market.

(D)

Performance measures

Establishing specific performance measures and standards for offerors of standard health plans that focus on quality of care and improved health outcomes, requiring such plan to report to the State with respect to the measures and standards, and making the performance and quality information available to enrollees in a useful form.

(3)

Enhanced availability

(A)

Multiple plans

A State shall, to the maximum extent feasible, seek to make multiple standard health plans available to eligible individuals within a State to ensure individuals have a choice of such plans.

(B)

Regional compacts

A State may negotiate a regional compact with other States to include coverage of eligible individuals in all such States in agreements with offerors of standard health plans.

(4)

Coordination with other State programs

A State shall, to the maximum extent feasible, seek to coordinate the administration of, and provision of benefits under, its program under this section with the State medicaid program under title XIX, the State child health plan under title XXI, and other State-administered health programs to maximize the efficiency of such programs and to improve the continuity of care.

(d)

Transfer of funds to States

(1)

In general

If the Secretary determines that a State electing the application of this section meets the requirements of the program established under subsection (a), the Secretary shall transfer to the State for each fiscal year for which 1 or more standard health plans are operating within the State the amount determined under paragraph (3).

(2)

Use of funds

A State shall establish a trust for the deposit of the amounts received under paragraph (1) and amounts in the trust fund shall only be used to reduce the premiums and cost-sharing of, or to provide additional benefits for, eligible individuals enrolled in standard health plans within the State. Amounts in the trust fund, and expenditures of such amounts, shall not be included in determining the amount of any non-Federal funds for purposes of meeting any matching or expenditure requirement of any federally-funded program.

(3)

Amount of payment

(A)

Secretarial determination

(i)

In general

The amount determined under this paragraph for any fiscal year is the amount the Secretary determines is equal to 85 percent of the credits under section 36B of the Internal Revenue Code of 1986, and the cost-sharing subsidies under section 2247, that would have been provided for the fiscal year to eligible individuals enrolled in standard health plans in the State if such eligible individuals were allowed to enroll in qualified health benefits plans through an exchange established under part B.

(ii)

Specific requirements

The Secretary shall make the determination under clause (i) on a per enrollee basis and shall take into account all relevant factors necessary to determine the value of the credits and subsidies that would have been provided to eligible individuals described in clause (i).

(B)

Corrections

The Secretary shall adjust the payment for any fiscal year to reflect any error in the determinations under subparagraph (A) for any preceding fiscal year.

(4)

Application of abortion coverage requirements

The rules of section 2245 shall apply to a State basic health program, and to standard health plans offered through such program, in the same manner as such rules apply to qualified basic health benefits plans.

(e)

Eligible individual

(1)

In general

In this section, the term eligible individual means, with respect to any State, an individual—

(A)

who a resident of the State who is not eligible to enroll in the State's medicaid program under title XIX for benefits that at a minimum consist of the essential benefits package described in section 2242;

(B)

whose household income exceeds 133 percent but does not exceed 200 percent of the poverty line for the size of the family involved;

(C)

who is not eligible for essential health benefits coverage (as defined in section 5000A(f)) or is eligible for an employer-sponsored plan that is not affordable coverage (as determined under section 5000A(e)(2)); and

(D)

who has not attained age 65 as of the beginning of the plan year.

Such term shall not include any individual who is not eligible under section 2232(c) to be covered by a qualified health benefits plan offered through an exchange.
(2)

Eligible individuals may not use exchange

An eligible individual shall not be treated as a qualified individual under section 2223 eligible for enrollment in a qualified health benefits plan offered through an exchange established under part B.

(f)

Secretarial oversight

The Secretary shall each year conduct a review of each State program to ensure compliance with the requirements of this section, including ensuring that the State program meets—

(1)

eligibility verification requirements for participation in the program;

(2)

the requirements for use of Federal funds received by the program; and

(3)

the quality and performance standards under this section.

(g)

Standard health plan offerors

A State may provide that persons eligible to offer standard health plans under a basic health program established under this section may include a licensed health maintenance organization, a licensed health insurance insurer, or a network of health care providers established to offer services under the program.

(h)

Definitions

Any term used in this section which is also used in section 36B of the Internal Revenue Code of 1986 shall have the meaning given such term by such section.

5

Other definitions and rules

2230.

Other definitions and rules

(a)

Employers

In this title:

(1)

Large employer

The term large employer means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.

(2)

Small employer

The term small employer means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. Unless an employer elects otherwise, if an employer is treated as a small employer for any plan year to which this title applies, then such employer shall continue to be treated as a small employer for any subsequent plan year even if the number of employees exceeds the number in effect under this subparagraph.

(3)

State option to treat 50 employees as small

In the case of plan years beginning before January 1, 2015, a State may elect to apply this subsection by substituting 51 employees for 101 employees in paragraph (1) and by substituting 50 employees for 100 employees in paragraph (2).

(4)

Rules for determining employer size

For purposes of this subsection—

(A)

Application of aggregation rule for employers

All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer.

(B)

Employers not in existence in preceding year

In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small or large employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.

(C)

Predecessors

Any reference in this subsection to an employer shall include a reference to any predecessor of such employer.

(b)

Terms relating to plans

In this title:

(1)

Plan sponsor

The term plan sponsor has the meaning given such term in section 3(16)(B) of the Employee Retirement Income Security Act of 1974.

(2)

Plan year

The term plan year means—

(A)

with respect to a group health plan, a plan year as specified under such plan; or

(B)

with respect to another health benefits plan, the calendar year, the 12-month period beginning on July 1 of each year, or such other 12-month period as may be specified by the Secretary.

.

B

Exchanges and consumer assistance

1101.

Establishment of qualified health benefits plan exchanges

(a)

In general

Title XXII of the Social Security Act, as added by section 1001, is amended by adding at the end the following:

B

Exchange and consumer assistance

1

Individuals and small employers offered affordable choices

2231.

Rights and responsibilities regarding choice of coverage through exchange

(a)

Right to enroll through an exchange

(1)

Qualified individuals

Each qualified individual shall have the choice to enroll or to not enroll in a qualified health benefits plan offered through an exchange that is established under this title, that covers the State in which the individual resides, and that covers qualified health benefits plans in the individual market.

(2)

Qualified small employers

(A)

In general

In the case of a qualified small employer—

(i)

such employer may elect to offer to its employees qualified health benefits plans offered through an exchange that is established under this title, that covers the State in which the employees resides, and that covers qualified health benefits plans in the small group market; and

(ii)

each employee of such employer shall have the choice to enroll or to not enroll in a qualified health benefits plan offered through such exchange.

If a qualified small employer elects to limit the qualified health benefits plans or levels of coverage under part C that employees may enroll in through such exchange, employees may only choose to enroll in those plans or plans in those levels.
(B)

Self-insured plans

If a qualified small employer offers its employees coverage under a self-insured health benefits plan, the employer may not offer its employees qualified health benefits plans through an exchange.

(3)

Members of Congress and Congressional staff required to participate in exchange

(A)

In general

Notwithstanding chapter 89 of title 5, United States Code, or any provision of this title—

(i)

each Member of Congress and Congressional employee shall be treated as a qualified individual entitled to the right under this paragraph to enroll in a qualified health benefits plan in the individual market offered through an exchange in the State in which the Member or employee resides; and

(ii)

any employer contribution under such chapter on behalf of the Member or employee may be paid only to the offeror of a qualified health benefits plan in which the Member or employee enrolled in through such exchange and not to the offeror of a plan offered through the Federal employees health benefit program under such chapter.

(B)

Payments by Federal government

The Secretary, in consultation with the Director of the Office of Personnel Management, shall establish procedures under which—

(i)

the employer contributions on behalf of a Member or Congressional employee are actuarially adjusted for age; and

(ii)

the employer contributions may be made directly to an exchange for payment to an offeror.

(C)

Congressional employee

In this paragraph, the term Congressional employee means an employee whose pay is disbursed by the Secretary of the Senate or the Clerk of the House of Representatives.

(b)

Responsibility of offerors of qualified health benefits plans

(1)

All plans must be offered through an exchange

An offeror of a qualified health benefits plan in a State—

(A)

shall offer the plan through the exchange established by the State for the market in which the plan is being offered; and

(B)

may offer such plan outside of an exchange.

(2)

Offerors must offer plans in silver and gold plans

An offeror of a qualified health benefits plan in the individual or small group market within a State—

(A)

shall offer within that market at least one qualified health benefits plan in the silver coverage level and at least one such plan in the gold coverage level; and

(B)

may offer 1 or more qualified health benefits plan in the bronze and platinum coverage levels, a catastrophic plan described in section 2243(c), or a child-only plan described in section 2243(d).

(c)

Responsibility of exchanges

(1)

In general

Each exchange offering plans in the individual or small group market within a State shall offer all qualified health benefits plans in the State that are licensed by the State to be offered in that market.

(2)

Offering of stand-alone dental benefits

(A)

In general

Each exchange within a State shall allow an offeror of a health benefits plan that only provides limited scope dental benefits meeting the requirements of section 9832(c)(2)(A) of the Internal Revenue Code of 1986 to offer the plan through the exchange (either separately or in conjunction with a qualified health benefits plan) if the plan provides pediatric dental benefits meeting the requirements of 2242(b)(11) for individuals who have not attained the age of 21.

(B)

Eligibility for credit and subsidy

If an individual enrolls in both a qualified health benefits plan and a plan described in subparagraph (A) for any plan year, the portion of the premium for the plan described in subparagraph (A) that (under regulations prescribed by the Secretary) is properly allocable to individuals covered by the plan who have not attained the age of 21 before the beginning of the plan year shall be treated as a premium payable for a qualified health benefits plan for purposes of determining the amount of the premium credit under section 36B of such Code and cost-sharing subsidies under section 2237 with respect to the plan year.

(d)

Enrollment through agents or brokers

The Secretary shall establish procedures under which a State is required to allow agents or brokers—

(1)

to enroll individuals in any qualified health benefits plans in the individual or small group market as soon as the plan is offered through an exchange in the State; and

(2)

to assist individuals in applying for premium credits and cost-sharing subsidies for plans sold through an exchange.

2232.

Qualified individuals and small employers; access limited to citizens and lawful residents

(a)

Qualified individuals

In this title:

(1)

In general

The term qualified individual means, with respect to an exchange, an individual who—

(A)

is seeking to enroll in a qualified health benefits plan in the individual market offered through the exchange; and

(B)

resides in the State that established the exchange.

(2)

Incarcerated individuals excluded

An individual shall not be treated as a qualified individual if, at the time of enrollment, the individual is incarcerated, other than incarceration pending the disposition of charges.

(b)

Qualified small employer

In this title, the term qualified small employer means an employer that is a small employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health benefits plans offered through an exchange established under this subtitle that offers qualified health benefits plans in the small group market.

(c)

Access limited to lawful residents

If an individual is not, or is not reasonably expected to be for the entire plan year for which enrollment is sought, a citizen or national of the United States, an alien lawfully admitted to the United States for permanent residence, or an alien lawfully present in the United States—

(1)

the individual shall not be treated as a qualified individual and may not be covered under a qualified health benefits plan in the individual market that is offered through an exchange; and

(2)

if the individual is an employee of a qualified small employer offering employees the opportunity to enroll in a qualified health benefits plan in the small group market through an exchange (or an individual bearing a relationship to such an employee that entitles such individual to coverage under such plan), the individual may not be covered under such plan.

2

Establishment of exchanges

2235.

Establishment of exchanges by States

(a)

In general

Each State shall, not later than July 1, 2013, establish —

(1)

an exchange for the State that is designed to facilitate the enrollment of qualified individuals in qualified health benefits plans offered in the individual market in the State; and

(2)

a Small Business Health Options Program (in this title referred to as a SHOP exchange) that is designed to assist qualified small employers in facilitating the enrollment of their employees in qualified health benefits plans offered in either the individual or the small group market in the State.

(b)

State flexibility

(1)

Merger of individual and SHOP exchanges

A State may elect to provide only one exchange in the State for providing both exchange and SHOP exchange services to both qualified individuals and qualified small employers, but only if the exchange has separate resources to assist individuals and employers.

(2)

Regional exchanges

An exchange or SHOP exchange may operate in more than 1 State if—

(A)

each of the States agrees to the operation of the exchange in that State; and

(B)

the Secretary approves of the operation of the exchange in all such States.

(3)

Authority to contract for exchange services

(A)

Contract with sub-exchange

Subject to such conditions and restrictions as the Secretary, in consultation with the Secretary of the Treasury, may prescribe under sections 2238 and 2248—

(i)

In general

A State may elect to authorize an exchange established by the State under this title to contract with an eligible entity to carry out 1 or more responsibilities of the exchange, including marketing and sale of qualified health benefits plans offered by the exchange, enrollment activities, broker relations, customer service, customer education, premium billing and collection, member advocacy with qualified health benefits plans, maintaining call center support, and performing the duties of the exchange under section 2238 in determining eligibility to participate in the exchange and to receive any credit or subsidy. An eligible entity may charge an additional fee to be used to pay the administrative and operational expenses of the entity.

(ii)

Eligible entity

In this subparagraph, the term eligible entity means a person—

(I)

incorporated under, and subject to the laws of, 1 or more States;

(II)

that has demonstrated experience on a State or regional basis in the individual and small group health insurance and benefits coverage; and

(III)

that is not a health insurance issuer or that is treated under subsection (a) or (b) of section 52 as a member of the same controlled group of corporations (or under common control with) a health insurance issuer.

(B)

Delegation to State medicaid agency

A State may elect to authorize an exchange established by the State under this title to enter into an agreement with the State medicaid agency under title XIX to carry out the responsibilities of the exchange under this section in establishing the eligibility of individuals to participate in the exchange and to receive the premium credit under section 36B of the Internal Revenue Code of 1986 and the cost-sharing subsidy under section 2247. An exchange may enter into an agreement under this subparagraph only if the agreement meets requirements promulgated by the Secretary (after consultation with the Secretary of the Treasury) ensuring that the agreement lowers overall administrative costs and reduces the likelihood of eligibility errors and disruptions in coverage.

(c)

Establishment of broker rate schedules

Each State shall provide for the establishment of rate schedules for broker commissions paid by health benefits plans offered through an exchange.

(d)

Offering of plans in large group market

Beginning in 2017, each State may allow offerors of health benefits plans in the large group market in the State to offer the plans through an exchange. Nothing in this subsection shall be construed as requiring an offeror to offer such plans through an exchange.

(e)

Interim exchanges before qualified plans

(1)

In general

Each State shall, as soon as practicable after the date of enactment of this Act, establish an exchange through which enrollment in eligible health insurance coverage is offered for coverage during the period beginning January 1, 2010, and ending June 30, 2013. Each State may use the database established under paragraph (2)(C)(ii) in the operation of the exchange.

(2)

Eligible health insurance coverage

In this subsection:

(A)

In general

The term eligible health insurance coverage means, with respect to any State, any health insurance coverage meeting the requirements of section 2244 which is offered—

(i)

by an issuer who is licensed to offer such coverage in that State; and

(ii)

in the individual or small group markets within the State.

(B)

Exception for mini-medical plans

Such term shall not include any health insurance coverage which, as determined under regulations prescribed by the Secretary, offers limited benefits or has a low annual limitation on the amount of benefits provided.

(C)

Administration

(i)

In general

The Secretary shall provide technical assistance to each State in establishing exchanges under this subsection.

(ii)

Database of plan offerings

The Secretary, either directly or by grant or contract with a private entity, shall establish and maintain a database of health insurance coverage in the individual and small group markets. The Secretary shall ensure that individuals and small employers are able to access the information in the database that is specific to the State in which the individuals and employees reside.

2236.

Functions performed by Secretary, States, and exchanges

(a)

Agreements to perform functions

The Secretary shall enter into an agreement with each State (in this section referred to as the agreement) setting forth which of the functions described in this section with respect to an exchange shall be performed by the Secretary, the State, or the exchange.

(b)

Certification of plans

The agreement shall provide for the State to establish procedures for the certification, recertification, and decertification of a health benefits plan as a qualified health benefits plan that meets the requirements of this title for offering the plan through exchanges within the State.

(c)

Outreach and eligibility

The agreement shall provide for the conduct of the following activities:

(1)

Outreach

(A)

In general

The establishment and carrying out of a plan to conduct outreach activities to inform and educate individuals and employers about the exchange, the annual open enrollment periods described in subsection (d)(2), and options for qualified health benefits plans offered through the exchange.

(B)

Call centers

The establishment and maintenance of call centers to provide information to, and answer questions from, individuals seeking to enroll in qualified health benefit plans through an exchange, including providing multilingual assistance and mailing of relevant information to individuals based on their inquiry and zip code.

(C)

Internet portals

The development of a model template for an Internet portal to be used to direct qualified individuals and qualified small employers to qualified health benefits plans, to assist individuals and employers in determining whether they are eligible to participate in an exchange or eligible for a premium credit or cost-sharing subsidy, and to present standardized information regarding qualified health benefits plans offered through an exchange to enable easier consumer choice. Such template shall include with respect to each qualified health benefits plan offered through the exchange in each rating area access to the uniform outline of coverage the plan is required to provide under section 2205 and to a copy of the plan's policy.

(D)

Rating system

The establishment of a rating system that would rate qualified health benefits plans offered through an exchange on the basis of the relative quality and price of plans in the same benefit level. The exchange shall include the quality rating in the information provided to individuals and employers through the Internet portal established under subparagraph (C).

(2)

Eligibility

Subject to section 2238, the making of timely determinations as to whether—

(A)

individuals or employers are qualified individuals or qualified small employers eligible to participate in the exchange; and

(B)

an individual is disqualified from participation in the exchange or from receiving any premium credit or cost-sharing subsidy because the individual is not, or is not reasonably expected to be for the entire plan year for which enrollment is sought, a citizen or national of the United States, an alien lawfully admitted to the United States for permanent residence, or an alien lawfully present in the United States.

(d)

Enrollment

The agreement shall provide for the establishment and carrying out of an enrollment process which—

(1)

provides for enrollment in person, by mail, by telephone, or electronically, including—

(A)

through enrollment in local hospitals and schools, State motor vehicle offices, local Social Security offices, locations operated by Indian tribes and tribal organizations, and any other accessible locations specified by the exchange; and

(B)

through use of the call center and Web portal established under subsection (c)(1);

(2)

provides for—

(A)

an initial open enrollment period from March 1, 2013, through May 31, 2013;

(B)

annual open enrollment periods from March 1 through May 31 of subsequent calendar years;

(C)

special enrollment periods specified in section 9801 of the Internal Revenue Code of 1986 and other special enrollment periods under circumstances similar to such periods under part D of title XVIII; and

(D)

special monthly enrollment periods for Indians (as defined in section 4 of the Indian Health Care Improvement Act).

(3)

subject to section 2239—

(A)

establishes a uniform enrollment form that qualified individuals and qualified small businesses may use (either electronically or on paper) in enrolling in qualified health benefits plans offered through an exchange, and that takes into account criteria that the National Association of Insurance Commissioners develops and submits to the Secretary; and

(B)

informs individuals of eligibility requirements for the medicaid program under title XIX, the CHIP program under title XXI, or any applicable State or local public program and refers individuals to such programs if a determination is made that the individuals are so eligible;

(4)

establishes standardized marketing requirements that are based on the standards used for Medicare Advantage plans and ensures that marketing practices with respect to qualified health benefits plans offered through the exchange meet the requirements; and

(5)

provides for a standardized format for presenting health benefits plan options in the exchange, including use of the uniform outline of coverage established under section 1503 of the America's Healthy Future Act of 2009.

(e)

Eligibility for credit and subsidy

The agreement shall provide for the establishment and use of a calculator to determine the actual cost of coverage after application of any premium credit or cost-sharing subsidy and the carrying out of responsibilities under section 2248 with respect to the advance determination and payment of such credits or subsidies.

(f)

Certification of exemption from individual responsibility excise tax

Subject to section 2238, the agreement shall establish procedures for—

(1)

granting a certification attesting that, for purposes of the individual responsibility excise tax under section 5000A of the Internal Revenue Code of 1986, an individual is exempt from the individual requirement or from the tax imposed by such section because—

(A)

there is no affordable qualified health benefits plan available through the exchange, or the individual's employer, covering the individual; or

(B)

the individual meets the requirements for any other such exemption from the individual responsibility requirement or tax; and

(2)

transferring to the Secretary of the Treasury or the Secretary's delegate a list of the individuals who are so exempt.

The Secretary shall establish the period for which any certification under this subsection is in effect.
2237.

Duties of the Secretary to facilitate exchanges

(a)

Credit and subsidy determinations

The Secretary and the Secretary of the Treasury shall carry out the responsibilities under section 2248 (relating to advance determination and payment of premium credit and cost-sharing subsidies) that are delegated specifically to the Secretary and the Secretary of the Treasury.

(b)

SHOP exchange assistance

The Secretary shall designate an office within the Department of Health and Human Services to provide technical assistance to States to facilitate the participation of qualified small businesses in SHOP exchanges.

(c)

Funding of start-up costs

(1)

In general

The Secretary shall pay to each State the amount the Secretary reasonably estimates to be the unreimbursed start-up costs for any exchange or SHOP exchange established within a State. The Secretary shall make separate payments for the start-up costs of the interim and permanent exchanges.

(2)

Operational costs

No payments shall be made under this subsection for any operational costs of an exchange after the initial start-up is completed but an exchange may assess each qualified health benefits plan offered through the exchange its proportional share of such costs.

2238.

Procedures for determining eligibility for exchange participation, premium credits and cost-sharing subsidies, and individual responsibility exemptions

(a)

In general

The Secretary shall establish a program meeting the requirements of this section for determining—

(1)

whether an individual who is to be covered by a qualified health benefits plan offered through an exchange, or who is claiming a premium credit or cost-sharing subsidy, meets the requirements of sections 2236(c)(2)(B) and 2247(e) of this title and section 36B(e) of the Internal Revenue Code of 1986 that the individual be a citizen or national of the United States, an alien lawfully admitted to the United States for permanent residence, or an alien lawfully present in the United States;

(2)

in the case of an individual claiming a premium credit or cost-sharing subsidy under section 36B of such Code or section 2247—

(A)

whether the individual meets the income and coverage requirements of such sections; and

(B)

the amount of the credit or subsidy;

(3)

whether an individual's coverage under an employer-sponsored health benefits plan is treated as unaffordable under sections 36B(c)(2)(C), 4980H(c)(2), and 5000A(e)(2); and

(4)

whether to grant a certification under section 2237(f) attesting that, for purposes of the individual responsibility excise tax under section 5000A of the Internal Revenue Code of 1986, an individual is entitled to an exemption from either the individual responsibility requirement or the tax imposed by such section.

(b)

Information required to be provided by applicants

(1)

In general

An applicant for enrollment in a qualified health benefits plan offered through an exchange shall provide—

(A)

the name, address, and date of birth of each individual who is to be covered by the plan (in this subsection referred to as an enrollee); and

(B)

the information required by any of the following paragraphs that is applicable to an enrollee.

(2)

Citizenship or immigration status

The following information shall be provided with respect to every enrollee:

(A)

In the case of an enrollee whose eligibility is based on an attestation of citizenship of the enrollee, the enrollee's social security number.

(B)

In the case of an individual whose eligibility is based on an attestation of the enrollee's immigration status, the enrollee's social security number (if applicable) and such identifying information with respect to the enrollee's immigration status as the Secretary, after consultation with the Secretary of Homeland Security, determines appropriate.

(3)

Eligibility and amount of credit or subsidy

In the case of an enrollee with respect to whom a premium credit or cost-sharing subsidy under section 36B of such Code or section 2247 is being claimed, the following information:

(A)

Information regarding income and family size

The information described in section 6103(l)(21) for the taxable year ending with or within the second calendar year preceding the calendar year in which the plan year begins.

(B)

Changes in circumstances

The information described in section 2248(b)(2), including information with respect to individuals who were not required to file an income tax return for the taxable year described in subparagraph (A) or individuals who experienced changes in marital status or family size or significant reductions in income.

(4)

Employer-sponsored coverage

In the case of an enrollee with respect to whom eligibility for a premium credit under section 36B of such Code or cost-sharing subsidy under section 2247, is being established on the basis that the enrollee's (or related individual's) employer is not treated under section 36B(c)(2)(C) of such Code as providing essential benefits coverage or affordable essential benefits coverage, the following information:

(A)

The name, address, and employer identification number (if available) of the employer.

(B)

Whether the enrollee or individual is a full-time employee and whether the employer provides such essential benefits coverage.

(C)

If the employer provides such essential benefits coverage, the lowest cost option for the enrollee's or individual's enrollment status and the enrollee's or individual's required contribution (as defined in section 5000A(e)(2) of such Code) under the employer-sponsored plan.

(D)

If an enrollee claims an employer's essential benefits coverage is unaffordable, the information described in paragraph (3).

(5)

Exemptions from individual responsibility requirements

In the case of an individual who is seeking an exemption certificate under section 2237(f) from any requirement or tax imposed by section 5000A, the following information:

(A)

In the case of an individual seeking exemption based on the individual's status as a member of an exempt religious sect or division, as a member of a health care sharing ministry, as an Indian, or as an individual eligible for a hardship exemption, such information as the Secretary shall prescribe.

(B)

In the case of an individual seeking exemption based on the lack of affordable coverage or the individual's status as a taxpayer with household income less than 100 percent of the poverty line, the information described in paragraphs (3) and (4), as applicable.

(c)

Verification of information contained in records of specific Federal officials

(1)

Information transferred to Secretary

An exchange shall submit the information provided by an applicant under subsection (b) to the Secretary for verification in accordance with the requirements of this subsection and subsection (d).

(2)

Citizenship or immigration status

(A)

Commissioner of Social Security

The Secretary shall submit to the Commissioner of Social Security the following information for a determination as to whether the information provided is consistent with the information in the records of the Commissioner:

(i)

The name, date of birth, and social security number of each individual for whom such information was provided under subsection (b)(2).

(ii)

The attestation of an individual that the individual is a citizen.

(B)

Secretary of Homeland Security

(i)

In general

In the case of an individual—

(I)

who attests that the individual is an alien lawfully admitted to the United States for permanent residence or an alien lawfully present in the United States; or

(II)

who attests that the individual is a citizen but with respect to whom the Commissioner of Social Security has notified the Secretary under subsection (e)(3) that the attestation is inconsistent with information in the records maintained by the Commissioner;

the Secretary shall submit to the Secretary of Homeland Security the information described in clause (ii) for a determination as to whether the information provided is consistent with the information in the records of the Secretary of Homeland Security.
(ii)

Information

The information described in clause (ii) is the following:

(I)

The name, date of birth, and any identifying information with respect to the individual's immigration status provided under subsection (b)(2).

(II)

The attestation that the individual is an alien lawfully admitted to the United States for permanent residence or an alien lawfully present in the United States or in the case of an individual described in clause (i)(II), the attestation that the individual is a citizen.

(3)

Eligibility for credit and subsidy

The Secretary shall submit the information described in subsection (b)(3)(A) provided under paragraph (3), (4), or (5) of subsection (b) to the Secretary of the Treasury for verification of household income and family size for purposes of eligibility.

(4)

Method

The Secretary, in consultation with the Secretary of the Treasury, the Secretary of Homeland Security, and the Commissioner of Social Security, shall provide that verifications and determinations under this subsection shall be done—

(A)

through use of an on-line system or otherwise for the electronic submission of, and response to, the information submitted under this subsection with respect to an applicant; or

(B)

by determining the consistency of the information submitted with the information maintained in the records of the Secretary of the Treasury, the Secretary of Homeland Security, or the Commissioner of Social Security through such other method as is approved by the Secretary.

(d)

Verification by Secretary

In the case of information provided under subsection (b) that is not subject to verification under subsection (c), the Secretary shall verify the accuracy of such information in such manner as the Secretary determines appropriate, including delegating responsibility for verification to the exchange.

(e)

Actions relating to verification

(1)

In general

Each person to whom the Secretary provided information under subsection (c) shall report to the Secretary under the method established under subsection (c)(4) the results of its verification and the Secretary shall notify the exchange of such results. Each person to whom the Secretary provided information under subsection (d) shall report to the Secretary in such manner as the Secretary determines appropriate.

(2)

Verification

(A)

Eligibility for enrollment and subsidies

If information provided by an applicant under paragraphs (1), (2), (3), and (4) of subsection (b) is verified under subsections (c) and (d)—

(i)

the individual's eligibility to enroll through the exchange and to apply for premium credits and cost-sharing subsidies shall be satisfied; and

(ii)

the Secretary shall, if applicable, notify the Secretary of the Treasury under section 2248(c) of the amount of any advance payment to be made.

(B)

Exemption from individual responsibility

If information provided by an applicant under subsection (b)(5) is verified under subsections (c) and (d), the Secretary shall issue the certification of exemption described in section 2236(f).

(3)

Inconsistencies

If the information provided by an applicant is inconsistent with information in the records maintained by persons under subsection (c) or is not verified under subsection (d), the Secretary shall notify the exchange and the exchange shall take the following actions:

(A)

Reasonable effort

The exchange shall make a reasonable effort to identify and address the causes of such inconsistency, including through typographical or other clerical errors, by contacting the applicant to confirm the accuracy of the information, and by taking such additional actions as the Secretary, through regulation or other guidance, may identify.

(B)

Notice and opportunity to correct

In the case the inconsistency or inability to verify is not resolved under subparagraph (A), the exchange shall—

(i)

notify the applicant of such fact;

(ii)

provide the applicant with a reasonable period from the date on which the notice required under clause (i) is received by the applicant to either present satisfactory documentary evidence or resolve the inconsistency with the person verifying the information under subsection (c).

(4)

Specific actions

(A)

Citizenship or immigration status

If an inconsistency involving citizenship or immigration status with respect to any enrollee is unresolved under this subsection, the exchange shall notify the applicant that the enrollee is not eligible to participate in the exchange.

(B)

Eligibility or amount of credit or subsidy

If an inconsistency involving the eligibility for, or amount of, any credit or subsidy is unresolved under this subsection, the exchange shall notify the applicant of the amount (if any) of the credit or subsidy.

(C)

Employer affordability

If the Secretary notifies an exchange that an enrollee is eligible for a premium credit under section 36B of such Code or cost-sharing subsidy under section 2247 because the enrollee's (or related individual's) employer does not provide essential benefits coverage through an employer-sponsored plan or that the employer does provide that coverage but it is not affordable coverage, the exchange shall notify the employer of such fact and that the employer may be liable for the tax imposed by section 4980H with respect to an employee.

(D)

Exemption

In any case where the inconsistency involving, or inability to verify, information provided under subsection (b)(5) is not resolved, the exchange shall notify an applicant that no certification of exemption from any requirement or tax under section 5000A will be issued.

(E)

Appeals process

The exchange shall also notify each person receiving notice under this paragraph of the appeals processes established under subsection (f).

(f)

Appeals and redeterminations

(1)

In general

The Secretary, in consultation with the Secretary of the Treasury, the Secretary of Homeland Security, and the Commissioner of Social Security, shall establish procedures by which the Secretary or one of such other Federal officers—

(A)

hears and makes decisions with respect to appeals of any determination under subsection (c); and

(B)

redetermines eligibility on a periodic basis in appropriate circumstances.

(2)

Employer liability

The Secretary shall establish a separate appeals process for employers who are notified under subsection (e)(4)(C) that the employer may be liable for the tax imposed by section 4980H with respect to an employee because of a determination that the employer does not provide essential benefits coverage through an employer-sponsored plan or that the employer does provide that coverage but it is not affordable coverage with respect to an employee. Such process shall provide an employer the opportunity to—

(A)

present information to the exchange for review of the determination either by the exchange or the person making the determination, including evidence of the employer-sponsored plan and employer contributions to the plan; and

(B)

have access to the data used to make the determination to the extent allowable by law.

Such process shall be in addition to any rights of appeal the employer may have under subtitle F of the Internal Revenue Code of 1986.
(g)

Confidentiality of applicant information

Any person who receives information provided by an applicant under subsection (b), or receives information from a Federal agency under subsection (c), (d), or (e) shall—

(1)

use the information only for the purposes of, and to the extent necessary in, ensuring the efficient operation of the exchange, including verifying the eligibility of an individual to enroll through an exchange or to claim a premium credit or cost-sharing subsidy or the amount of the credit or subsidy; and

(2)

not disclose the information to any other person except as provided in this section.

(h)

Penalties

(1)

False or fraudulent information

(A)

Civil penalty

If—

(i)

any person fails to provides correct information under subsection (b); and

(ii)

such failure is attributable to negligence or disregard of any rules or regulations of the Secretary,

such person shall be subject, in addition to any other penalties that may be prescribed by law, to a civil penalty of not more than $25,000 with respect to any failures involving an application for a plan year. For purposes of this subparagraph, the terms negligence and disregard shall have the same meanings as when used in section 6662 of the Internal Revenue Code of 1986.
(B)

Criminal penalty

Any person who knowingly and willfully provides false or fraudulent information under subsection (b) shall be guilty of a felony, and upon conviction thereof, shall be fined not more than $250,000, imprisoned for not more than 5 years, or both.

(2)

Improper use or disclosure of information

Any person who knowingly and willfully uses or discloses information in violation of subsection (g) shall be guilty of a felony, and upon conviction thereof, shall be fined not more than $25,000, imprisoned for not more than 5 years, or both.

2239.

Streamlining of procedures for enrollment through an exchange and State Medicaid, CHIP, and health subsidy programs

(a)

In general

The Secretary shall establish a system meeting the requirements of this section under which residents of each State may apply for enrollment in, receive a determination of eligibility for participation in, and continue participation in, applicable State health subsidy programs.

(b)

Requirements relating to forms and notice

(1)

Requirements relating to forms

(A)

In general

The Secretary shall develop and provide to each State a single, streamlined form that—

(i)

may be used to apply for all applicable State health subsidy programs within the State;

(ii)

may be filed online, in person, by mail, or by telephone;

(iii)

may be filed with an exchange or with State officials operating one of the other applicable State health subsidy programs; and

(iv)

is structured to maximize an applicant's ability to complete the form satisfactorily, taking into account the characteristics of individuals who qualify for applicable State health subsidy programs.

(B)

State authority to establish form

A State may develop and use its own single, streamlined form as an alternative to the form developed under subparagraph (A) if the alternative form is consistent with standards promulgated by the Secretary under this section.

(C)

Supplemental eligibility forms

The Secretary may allow a State to use a supplemental or alternative form in the case of individuals who apply for eligibility that is not determined on the basis of the household income (as defined in section 36B of the Internal Revenue Code of 1986).

(2)

Notice

The Secretary shall provide that an applicant filing a form under paragraph (1) shall receive notice of eligibility for an applicable State health subsidy program without any need to provide additional information or paperwork unless such information or paperwork is specifically required by law when information provided on the form is inconsistent with data used for the electronic verification under paragraph (3) or is otherwise insufficient to determine eligibility.

(c)

Requirements relating to eligibility based on data exchanges

(1)

Development of secure interfaces

Each State shall develop for all applicable State health subsidy programs a secure, electronic interface allowing an exchange of data (including information contained in the application forms described in subsection (b)) that allows a determination of eligibility for all such programs based on a single application. Such interface shall be compatible with the exchange method established for data verification under section 2238(c)(4).

(2)

Data matching program

Each applicable State health subsidy program shall participate in a data matching arrangement for determining eligibility for participation in the program under paragraph (3) that—

(A)

provides access to data described in paragraph (3);

(B)

applies only to individuals who—

(i)

receive assistance from an applicable State health subsidy program; or

(ii)

apply for such assistance—

(I)

by filing a form described in subsection (b); or

(II)

by requesting a determination of eligibility and authorizing disclosure of the information described in paragraph (3) to applicable State health coverage subsidy programs for purposes of determining and establishing eligibility; and

(C)

consistent with standards promulgated by the Secretary, including the privacy and data security safeguards described in section 1946 or that are otherwise applicable to such programs.

(3)

Determination of eligibility

(A)

In general

Each applicable State health subsidy program shall, to the maximum extent practicable—

(i)

establish, verify, and update eligibility for participation in the program using the data matching arrangement under paragraph (2); and

(ii)

determine such eligibility on the basis of reliable, third party data, including information described in sections 1137, 453(i), and 1942(a), obtained through such arrangement.

(B)

Exception

This paragraph shall not apply in circumstances with respect to which the Secretary determines that the administrative and other costs of use of the data matching arrangement under paragraph (2) outweigh its expected gains in accuracy, efficiency, and program participation.

(4)

Secretarial standards

The Secretary shall, after consultation with persons in possession of the data to be matched and representatives of applicable State health subsidy programs, promulgate standards governing the timing, contents, and procedures for data matching described in this subsection. Such standards shall take into account administrative and other costs and the value of data matching to the establishment, verification, and updating of eligibility for applicable State health subsidy programs.

(d)

Administrative authority

(1)

Agreements

Subject to section 2238 and section 6103(l)(21) of the Internal Revenue Code of 1986 and any other requirement providing safeguards of privacy and data integrity, the Secretary may establish model agreements, and enter into agreements, for the sharing of data under this section.

(2)

Authority of exchange to contract out

Nothing in this section shall be construed to—

(A)

prohibit contractual arrangements through which a State medicaid agency determines eligibility for all applicable State health subsidy programs, but only if such agency complies with the Secretary’s requirements ensuring reduced administrative costs, eligibility errors, and disruptions in coverage; or

(B)

change any requirement under title XIX that eligibility for participation in a State's medicaid program must be determined by a public agency.

(e)

Applicable State health subsidy program

In this section, the term applicable State health subsidy program means—

(1)

the program under this title for the enrollment in qualified health benefits plans offered through an exchange, including the premium credits under section 36B of the Internal Revenue Code of 1986 and cost-sharing subsidies under section 2237;

(2)

a State medicaid program under title XIX;

(3)

a State children's health insurance program (CHIP) under title XXI; and

(4)

a State program under section 2228 establishing qualified basic health plans.

.

(b)

Study of administration of employer responsibility

(1)

In general

The Secretary of Health and Human Services shall, in consultation with the Secretary of the Treasury, conduct a study of the procedures that are necessary to ensure that in the administration of part B of subtitle A of title XXII of the Social Security Act (as added by this section) and section 4980H of the Internal Revenue Code of 1986 (as added by section 1306) that the following rights are protected:

(A)

The rights of employees to preserve their right to confidentiality of their taxpayer return information and their right to enroll in a qualified basic health benefits plan through an exchange if an employer does not provide affordable coverage.

(B)

The rights of employers to adequate due process and access to information necessary to accurately determine any tax imposed on employers.

(2)

Report

Not later than July 1, 2012, the Secretary of Health and Human Services shall report the results of the study conducted under paragraph (1), including any recommendations for legislative changes, to the Committees on Finance and Health, Education, Labor and Pensions of the Senate and the Committees of Education and Labor and Ways and Means of the House of Representatives.

1102.

Encouraging meaningful use of electronic health records

(a)

Study

The Secretary of Health and Human Services shall conduct a study of methods that can be employed by qualified health benefits plans offered through an exchange to encourage increased meaningful use of electronic health records by health care providers, including—

(1)

payment systems established by qualified health benefit plans that provide higher rates of reimbursement for health care providers that engage in meaningful use of electronic health records; and

(2)

promotion of low-cost electronic health record software packages that are available for use by health care providers, including software packages that are available to health care providers through the Veterans Administration.

(b)

Report

(1)

In General

Not later than 24 months after the date of enactment of this Act, the Secretary shall submit to Congress a report containing the results of the study conducted under subsection (a), together with recommendations for such legislation and administrative action as the Secretary determines appropriate, including recommendations regarding the feasibility and effectiveness of payment systems established by qualified health benefit plans offered through an exchange to provide for higher rates of reimbursement for health care providers that engage in meaningful use of electronic health records.

(2)

Dissemination to exchanges

Not later than 12 month after submitting the report under paragraph (1), the Secretary shall provide such report to any regional exchange or exchange established within a State.

C

Making coverage affordable

I

Essential benefits coverage

1201.

Provisions to ensure coverage of essential benefits

Title XXII of the Social Security Act (as added by section 1001 and amended by section 1101) is amended by adding at the end the following:

C

Making coverage affordable

1

Essential benefits coverage

2241.

Requirements for qualified health benefits plan

A health benefits plan shall be treated as a qualified health benefits plan for purposes of this title only if—

(1)

the plan provides an essential benefits package described in section 2242;

(2)

subject to section 2243(c), the plan provides either the bronze, silver, gold, or platinum level of coverage described in section 2243; and

(3)

the offeror of the plan charges the same premium rate for the plan without regard to whether the plan is purchased through an exchange or whether the plan is purchased directly from the offeror or through an agent.

2242.

Essential benefits package defined

(a)

In general

In this division, the term essential benefits package means, with respect to any health benefits plan, coverage that—

(1)

provides payment for the items and services described in subsection (b) in accordance with generally accepted standards of medical or other appropriate clinical or professional practice;

(2)

limits cost-sharing for such covered health care items and services in accordance with subsection (c);

(3)

meets the requirements with respect to specific items and services described in subsection (d); and

(4)

does not impose any annual or lifetime limit on the coverage of such covered health care items and services.

(b)

Minimum services to be covered

Subject to subsection (e), the items and services described in this subsection are the following:

(1)

Hospitalization.

(2)

Outpatient hospital and outpatient clinic services, including emergency department services.

(3)

Professional services of physicians and other health professionals.

(4)

Medical and surgical care.

(5)

Such services, equipment, and supplies incident to the services of a physician’s or a health professional’s delivery of care in institutional settings, physician offices, patients’ homes or place of residence, or other settings, as appropriate.

(6)

Prescription drugs.

(7)

Rehabilitative and habilitative services.

(8)

Mental health and substance use disorder services, including behavioral health treatment.

(9)

Preventive services, including those services recommended with a grade of A or B by the United States Preventive Services Task Force and those vaccines recommended for use by the Advisory Committee on Immunization Practices (an advisory committee established by the Secretary, acting through the Director of the Centers for Disease Control and Prevention).

(10)

Maternity benefits.

(11)

Well baby and well child care and oral health, vision, and hearing services, equipment, and supplies for children under 21 years of age.

(c)

Requirements relating to cost-sharing

(1)

No cost-sharing for preventive services

There shall be no cost-sharing under an essential benefits package for preventive items and services described in subsection (b)(9).

(2)

Annual limitation on cost-sharing

(A)

2013

The cost-sharing incurred under an essential benefits package with respect to self-only coverage or coverage other than self-only coverage for a plan year beginning in 2013 shall not exceed the dollar amounts in effect under section 223(c)(2)(A) of the Internal Revenue Code of 1986 for self-only and family coverage, respectively, for taxable years beginning in 2013.

(B)

2014 and later

In the case of any plan year beginning in a calendar year after 2013, the limitation under this paragraph shall—

(i)

in the case of self-only coverage, be equal to the dollar amount under subparagraph (A) for self-only coverage, increased by an amount equal to the product of that amount and the premium adjustment percentage under paragraph (7) for the calendar year; and

(ii)

in the case of other coverage, twice the amount in effect under clause (i).

If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.
(3)

Annual limitation on deductibles for employer-sponsored plans

(A)

In general

In the case of a health benefits plan offered in the small group market, the deductible under an essential benefits package shall not exceed—

(i)

$2,000 in the case of a plan covering a single individual; and

(ii)

$4,000 in the case of any other plan.

The amounts under clauses (i) and (ii) may be increased by the maximum amount of reimbursement which is reasonably available to a participant under a flexible spending arrangement described in section 106(c)(2) of the Internal Revenue Code of 1986 (determined without regard to any salary reduction arrangement).
(B)

Indexing of limits

In the case of any plan year beginning in a calendar year after 2013—

(i)

the dollar amount under subparagraph (A)(i) shall be increased by an amount equal to the product of that amount and the premium adjustment percentage under paragraph (7) for the calendar year; and

(ii)

the dollar amount under subparagraph (A)(ii) shall be increased to an amount equal to twice the amount in effect under subparagraph (A)(i) for plan years beginning in the calendar year, determined after application of clause (i).

If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.
(C)

Limitations

(i)

Actuarial value

The limitation under this paragraph shall be applied in such a manner so as to not affect the actuarial value of any qualified health benefits plan, including a plan in the bronze level.

(ii)

Catastrophic plan

This paragraph shall not apply to a catastrophic plan described in section 2243(c).

(4)

Parity within categories

In the case of items and services described in paragraphs (1), (2), (3), and (5) of subsection (b), the cost-sharing incurred under an essential benefits package shall be the same for treatment of conditions within each such category of covered services.

(5)

Special rule for value-based design

(A)

In general

Paragraphs (1) and (4) shall not apply in the case of a health benefits plan for which a value-based design is used.

(B)

Value-based design

For purposes of subparagraph (A), a value-based design is a methodology under which—

(i)

clinically beneficial preventive screenings, lifestyle interventions, medications, immunizations, diagnostic tests and procedures, and treatments are identified; and

(ii)

cost-sharing for items and services described in clause (i) is reduced or eliminated to reflect the high value and effectiveness of the items and services.

(6)

Cost-sharing

In this title, the term cost-sharing includes deductibles, coinsurance, copayments, and similar charges but does not include premiums or any network payment differential for covered services or spending for non-covered services.

(7)

Premium adjustment percentage

For purposes of paragraphs (2)(B)(i) and (3)(B)(i), the premium adjustment percentage for any calendar year is the percentage (if any) by which the average per capita premium for health insurance coverage in the United States for the preceding calendar year (as estimated by the Secretary no later than October 1 of such preceding calendar year) exceeds such average per capita premium for 2012 (as determined by the Secretary).

(d)

Specific items and services

(1)

Prescription drugs

An essential benefits package shall at least meet the class and coverage requirements of part D of title XVIII of this Act with respect to prescription drugs.

(2)

Mental health and substance use disorder services

An essential benefits package shall at least meet the minimum standards required by Federal or State law for coverage of mental health and substance use disorder services, including ensuring that any financial requirements and treatment limitations applicable to such services comply with the requirements of section 9812(a) of the Internal Revenue Code of 1986 in the same manner as such requirements apply to a group health plan.

(3)

Tobacco cessation programs

If a health benefits plan varies its premium on the basis of tobacco use, an essential benefits package shall include coverage for tobacco cessation programs, including counseling and pharmacotherapy (involving either prescription or nonprescription drugs).

(4)

Other items and services

An essential benefits package shall include coverage of day surgery and related anaesthesia, diagnostic images and screening (including x-rays), and radiation and chemotherapy.

(5)

Pediatric dental benefits

If a health benefits plan described in section 2231(c)(2) (relating to stand-alone dental benefits plans) is offered through an exchange, another health benefits plan offered through such exchange shall not fail to be treated as a qualified health benefits plan solely because the plan does not offer coverage of benefits offered through the stand-alone plan that are otherwise required under subsection (b)(11).

(6)

Special rules for emergency department services

A health benefits plan shall not be treated as meeting the requirements of subsection (b)(2) to provide coverage for emergency department services unless the plan provides that—

(A)

coverage for such services will be provided without regard to any requirement under the plan for prior authorization of services or any limitation on coverage where the provider of services does not have a contractual relationship with the plan for the providing of services; and

(B)

if such services are provided out-of-network, any cost-sharing required by the plan does not exceed the cost-sharing that would be required if such services were provided in-network.

(e)

Specification and annual update

(1)

In general

Not later than July 1, 2012, the Secretary shall—

(A)

define the benefit categories established under subsection (b) for qualified health benefits plans offered in the individual market within a State; and

(B)

specify the covered treatments, items, and services within each of such categories.

The Secretary shall establish such benefits coverage on the basis of the most recent medical evidence and information with respect to scientific advancement.
(2)

Annual updates

The Secretary shall annually update the benefits coverage determined under paragraph (1). The Secretary may address any gaps in access to coverage or changes in the evidence base by modifying or adding any category of benefits and covered treatments, items, and services.

(3)

Limitation

The Secretary shall ensure that the scope of the benefits coverage under this subsection is not more extensive than the scope of the benefits provided under a typical employer plan, as determined by the Secretary and certified by the Chief Actuary of the Centers for Medicare & Medicaid Services.

(4)

Flexibility in plan design

The Secretary shall allow flexibility in plan design to the extent such flexibility does not result in adverse selection.

(f)

Exchange requirement

Each State shall ensure that at least 1 plan offered in each exchange established in the State shall offer qualified health benefits plans that are at least actuarially equivalent to the standard option Blue Cross Blue Shield plan offered under the Federal Employees Health Benefits Program chapter 89 of title 5, United States Code.

(g)

Payments to Federally-qualified health centers

If any item or service covered by a qualified health benefits plan is provided by a Federally-qualified health center (as defined in section 1905(l)(2)(B)) to an enrollee of the plan, the offeror of the plan shall pay to the center for the item or service an amount that is not less than the amount of payment that would have been paid to the center under section 1902(bb) for such item or service.

2243.

Levels of coverage

(a)

In general

Except as provided in subsections (c) and (d), a health benefits plan shall provide a bronze, silver, gold, or platinum level of coverage.

(b)

Levels of coverage defined

In this title, a health benefits plan providing an essential benefits package shall be assigned to 1 of the following levels of coverage:

(1)

Bronze level

A plan in the bronze level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 65 percent of the full actuarial value of the benefits provided under the essential benefits package.

(2)

Silver level

A plan in the silver level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the essential benefits package.

(3)

Gold level

A plan in the gold level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 80 percent of the full actuarial value of the benefits provided under the essential benefits package.

(4)

Platinum level

A plan in the platinum level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the essential benefits package.

(c)

Catastrophic plan for young individuals

(1)

In general

A health benefits plan not providing a bronze, silver, gold, or platinum level of coverage shall be treated as meeting the requirements of this section with respect to any plan year if—

(A)

except as provided in paragraph (3), the only individuals who are eligible to enroll in the plan are individuals who have not attained the age of 26 before the beginning of the plan year; and

(B)

the plan provides an essential benefits package meeting the requirements of section 2242, except that, subject to paragraph (2), the plan provides no benefits for any plan year until the individual has incurred cost-sharing expenses in an amount equal to the annual limitation in effect under section 2242(c)(2) for the plan year.

(2)

Preventive services

A health benefits plan shall not be treated as described in paragraph (1) unless the plan requires no cost-sharing with respect to preventive services described in section 2242(b)(9).

(3)

Individuals without affordable coverage

If an individual has a certification in effect for any plan year under section 2236(f) that the individual is exempt from the requirement under section 5000A of the Internal Revenue Code of 1986 by reason of section 5000A(e)(2), such individual shall be eligible to enroll for the plan year in a plan described in paragraph (1).

(d)

Child-only plans

If an offeror offers a qualified health benefits plan in any level of coverage specified under this section, the offeror may also offer that plan in that level as a plan in which the only enrollees are individuals who, as of the beginning of a plan year—

(1)

have not attained the age of 21; or

(2)

have attained the age of 21 but are the dependent of another person.

(e)

Allowable variance

A State may allow a de minimus variation in the actuarial valuations used in determining the level of coverage of a plan to account for differences in actuarial estimates.

(f)

Plan reference

In this title, any reference to a bronze, silver, gold, or platinum plan shall be treated as a reference to a health benefits plan providing a bronze, silver, gold, or platinum level of coverage, as the case may be.

2244.

Application of certain rules to plans in group markets

(a)

Annual and lifetime limits

In the case of a health benefits plan offered in the large or small group market in a State, the State shall prohibit the plan for plan years beginning after 2009 from imposing unreasonable annual or lifetime limits (within the meaning of section 223 of the Internal Revenue Code of 1986) on enrollees in the plan. This subsection shall not apply to a grandfathered health benefits plan or to a qualified health benefits plan in the small group market.

(b)

Additional large group requirements

In the case of a health benefits plan offered in the large group market in a State, the State shall require such plan for plan years beginning after June 30, 2013—

(1)

to meet the requirements of section 2243(c)(2) (relating to annual limits on cost-sharing); and

(2)

to provide preventive items and services described in section 2243(b)(9) and except as provided in section 2243(c)(5), to require no cost-sharing for such items and services.

(c)

Auto enrollment

Each State shall require any large employer that has more than 200 employees and that offers employees enrollment in 1 or more health benefits plans to automatically enroll new full-time employees in one of the plans and to continue the enrollment of current employees in a health benefits plan offered through the employer. Any automatic enrollment program shall include adequate notice and the opportunity for an employee to opt out of any coverage the individual was automatically enrolled in.

2245.

Special rules relating to coverage of abortion services

(a)

Voluntary choice of coverage of abortion services

(1)

In general

Notwithstanding any other provision of this subpart and subject to paragraph (3)—

(A)

nothing in this subpart shall be construed to require a health benefits plan to provide coverage of services described in paragraph (2)(A) or (2)(B) as part of its essential benefits package for any plan year; and

(B)

the offeror of a health benefits plan shall determine whether or not the plan provides coverage of services described in paragraph (2)(A) or (2)(B) as part of such package for the plan year.

(2)

Abortion services

(A)

Abortions for which public funding is prohibited

The services described in this subparagraph are abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is not permitted, based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved.

(B)

Abortions for which public funding is allowed

The services described in this subparagraph are abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is permitted, based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved.

(3)

Assured availability of varied coverage through exchanges

(A)

In general

The Secretary shall assure that with respect to qualified health benefits plans offered in any exchange established pursuant to this title—

(i)

there is at least one such plan that provides coverage of services described in subparagraphs (A) and (B) of paragraph (2); and

(ii)

there is at least one such plan that does not provide coverage of services described in paragraph (2)(A).

(B)

Special rules

For purposes of subparagraph (A)—

(i)

a plan shall be treated as described in subparagraph (A)(ii) if the plan does not provide coverage of services described in either paragraph (2)(A) or (2)(B); and

(ii)

if a State has one exchange covering both the individual and small group markets, the Secretary shall meet the requirements of subparagraph (A) separately with respect to each such market.

(b)

Prohibition of use of Federal funds

(1)

In general

If a qualified health benefits plan provides coverage of services described in subsection (a)(2)(A), the offeror of the plan shall not use any amount attributable to any of the following for purposes of paying for such services:

(A)

The credit under section 36B(b) of the Internal Revenue Code of 1986 (and the amount of the advance payment of the credit under section 2248 of the Social Security Act).

(B)

Any cost-sharing subsidy under section 2247.

(2)

Segregation of funds

In the case of a plan to which paragraph (1) applies, the offeror of the plan shall, out of amounts not described in paragraph (1), segregate an amount equal to the actuarial amounts determined under paragraph (3) for all enrollees from the amounts described in paragraph (1).

(3)

Actuarial value of optional service coverage

(A)

In general

The Secretary shall estimate the basic per enrollee, per month cost, determined on an average actuarial basis, for including coverage under a qualified health benefits plan of the services described in subsection (a)(2)(A).

(B)

Considerations

In making such estimate, the Secretary—

(i)

may take into account the impact on overall costs of the inclusion of such coverage, but may not take into account any cost reduction estimated to result from such services, including prenatal care, delivery, or postnatal care;

(ii)

shall estimate such costs as if such coverage were included for the entire population covered; and

(iii)

may not estimate such a cost at less than $1 per enrollee, per month.

(c)

No discrimination on the basis of provision of abortion

A qualified health benefits plan may not discriminate against any individual health care provider or health care facility because of its willingness or unwillingness to provide, pay for, provide coverage of, or refer for abortions.

.

1202.

Application of State and Federal laws regarding abortion

(a)

No preemption of State laws regarding abortion

Nothing in this Act shall be construed to preempt or otherwise have any effect on State laws regarding the prohibition of (or requirement of) coverage, funding, or procedural requirements on abortions, including parental notification or consent for the performance of an abortion on a minor.

(b)

No effect on Federal laws regarding abortion

(1)

In general

Nothing in this Act shall be construed to have any effect on Federal laws regarding—

(A)

conscience protection;

(B)

willingness or refusal to provide abortion; and

(C)

discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abortion or to provide or participate in training to provide abortion.

(c)

No effect on Federal civil rights law

Nothing in this section shall alter the rights and obligations of employees and employers under title VII of the Civil Rights Act of 1964.

1203.

Application of emergency services laws

Nothing in this Act shall be construed to relieve any health care provider from providing emergency services as required by State or Federal law, including section 1867 of the Social Security Act (popularly known as EMTALA).

II

Premium credits, cost-sharing subsidies, and small business credits

A

Premium credits and cost-sharing subsidies

1205.

Refundable credit providing premium assistance for coverage under a qualified health benefits plan

(a)

In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by inserting after section 36A the following new section:

36B.

Refundable credit for coverage under a qualified health benefits plan

(a)

In general

In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.

(b)

Premium assistance credit amount

For purposes of this section—

(1)

In general

The term premium assistance credit amount means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2) with respect to all coverage months of the taxpayer occurring during the taxable year.

(2)

Premium assistance amount

The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the excess (if any) of—

(A)

the lesser of—

(i)

the monthly premiums for such month for 1 or more qualified health benefits plans offered in the individual market within a State which cover the taxpayer, the taxpayer's spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an exchange established by the State under subpart B of title XXII of the Social Security Act, or

(ii)

the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over

(B)

an amount equal to 1/12 of the product of the applicable percentage and the taxpayer's household income for the taxable year.

(3)

Other terms and rules relating to premium assistance amounts

For purposes of paragraph (2)—

(A)

Applicable percentage

(i)

In general

The applicable percentage with respect to any taxpayer for any taxable year is equal to 2 percent, increased by the number of percentage points (not greater than 10) which bears the same ratio to 10 percentage points as—

(I)

the taxpayer's household income for the taxable year in excess of 100 percent of the poverty line for a family of the size involved, bears to

(II)

an amount equal to 200 percent of the poverty line for a family of the size involved.

(ii)

Indexing

In the case of taxable years beginning in any calendar year after 2013, the Secretary shall adjust the initial and final applicable percentages for the calendar year to reflect the excess of the rate of premium growth between the preceding calendar year and 2012 over the rate of income growth for such period.

(B)

Applicable second lowest cost silver plan

The applicable second lowest cost silver plan with respect to any applicable taxpayer is the second lowest cost silver plan in the individual market which—

(i)

is offered through the same exchange through which the qualified health benefits plans taken into account under paragraph (2)(A)(i) were offered, and

(ii)

in the case of—

(I)

an applicable taxpayer whose tax for the taxable year is determined under section 1(c) (relating to unmarried individuals other than surviving spouses and heads of households), provides self-only coverage, and

(II)

any other applicable taxpayer, provides family coverage.

If a taxpayer files a joint return and no credit is allowed under this section with respect to 1 of the spouses by reason of subsection (e), the taxpayer shall be treated as described in clause (ii)(I) unless a deduction is allowed under section 151 for the taxable year with respect to a dependent other than either spouse.
(C)

Adjusted monthly premium

The adjusted monthly premium for an applicable second lowest cost silver plan is the monthly premium which would have been charged for the plan if each individual covered under a qualified health benefits plan taken into account under paragraph (2)(A)(i) were covered by the plan and the premium was adjusted only for the age of each such individual in the manner allowed under section 2204 of the Social Security Act.

(4)

Reduction to eliminate Federal budget deficit

The premium assistance credit amount (determined without regard to this paragraph) with respect to a month in a plan year for which a reduction is required in such amount under section 1209 of the America's Healthy Future Act of 2009 shall be reduced by the percentage specified in such section.

(c)

Definition and rules relating to applicable taxpayers, coverage months, and qualified health benefits plan

For purposes of this section—

(1)

Applicable taxpayer

(A)

In general

The term applicable taxpayer means, with respect to any taxable year, a taxpayer whose household income for the taxable year exceeds 100 percent (133 percent in the case of taxable years beginning in 2013) but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved.

(B)

Special rule for certain individuals lawfully present in the United States

In the case of any taxable year beginning after December 31, 2013, if—

(i)

a taxpayer has a household income which is not greater than 100 percent of an amount equal to the poverty line for a family of the size involved, and

(ii)

the taxpayer is an alien lawfully admitted to the United States for permanent residence, or an alien lawfully present in the United States, but is not eligible for the medicaid program under title XIX of the Social Security Act by reason of such alien status,

the taxpayer shall be treated as an applicable taxpayer.
(C)

Married couples must file joint return

If the taxpayer is married (within the meaning of section 7703) at the close of the taxable year, the taxpayer shall be treated as an applicable taxpayer only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year.

(D)

Denial of credit to dependents

No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.

(2)

Coverage month

For purposes of this subsection—

(A)

In general

The term coverage month means, with respect to an applicable taxpayer, any month if—

(i)

as of the first day of such month the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer is covered by a qualified health benefits plan described in subsection (b)(2)(A)(i), and

(ii)

the premium for coverage under such plan for such month is paid by the taxpayer (or through advance payment of the credit under subsection (a) under section 2248 of the Social Security Act).

(B)

Exception for essential health benefits coverage

(i)

In general

The term coverage month shall not include any month with respect to an individual if for such month the individual is eligible for essential health benefits coverage other than eligibility for coverage under a qualified health benefits plan in the individual market offered through an exchange.

(ii)

Essential health benefits coverage

The term essential health benefits coverage has the meaning given such term by section 5000A.

(C)

Special rule for employer-sponsored essential coverage

For purposes of subparagraph (B)—

(i)

Coverage must be affordable

Except as provided in clause (iii), an employee shall not be treated as eligible for essential health benefits coverage if such coverage—

(I)

consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) or a grandfathered health benefits plan maintained by the employee's employer, and

(II)

the employee's required contribution (within the meaning of section 5000A(e)(2)) with respect to the plan exceeds 10 percent of the applicable taxpayer's household income.

This clause shall also apply to an individual who is eligible to enroll in the plan by reason of a relationship the individual bears to the employee.
(ii)

Coverage must provide minimum value

Except as provided in clause (iii), an employee shall not be treated as eligible for essential health benefits coverage if such coverage consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) or a grandfathered health benefits plan maintained by the employee's employer and the plan's share of the total allowed costs of benefits provided under the plan is less than 65 percent of such costs.

(iii)

Employee or family must not be covered under employer plan

Clauses (i) and (ii) shall not apply if the employee (or any individual described in the last sentence of clause (i)) is covered under the eligible employer-sponsored plan or the grandfathered health benefits plan.

(iv)

Indexing

In the case of plan years beginning in any calendar year after 2013, clause (i)(II) shall be applied by substituting for 10 percent a percentage equal to the sum of—

(I)

10 percent, plus

(II)

10 percent multiplied by the premium adjustment percentage (as defined in section 2242(c)(7) of the Social Security Act) for the calendar year.

(D)

Special rule for medicaid individuals

An individual shall not be treated as eligible for essential health benefits coverage if under title XIX of the Social Security Act the individual may elect to enroll in the medicaid program or in a qualified health benefits plan in the individual market through an exchange and elects to enroll in such plan even if under the medicaid program the individual receives coverage for items and services or cost-sharing which is provided under the medicaid program but not under such plan.

(3)

Definitions

For purposes of this paragraph—

(A)

Qualified health benefits plan

The term qualified health benefits plan has the meaning given such term by section 2201(b) of the Social Security Act.

(B)

Grandfathered health benefits plan

The term grandfathered health benefits plan has the meaning given such term by section 2221 of the Social Security Act.

(d)

Terms relating to income and families

For purposes of this section—

(1)

Family size

The family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year.

(2)

Household income

(A)

In general

The term household income means, with respect to any taxpayer, an amount equal to the sum of—

(i)

the modified gross income of the taxpayer, plus

(ii)

the aggregate modified gross incomes of all other individuals taken into account in determining the taxpayer's family size under paragraph (1).

(B)

Modified gross income

The term modified gross income means gross income—

(i)

decreased by the amount of any deduction allowable under paragraphs (1), (3), or (4) of section 62(a),

(ii)

increased by the amount of interest received or accrued during the taxable year which is exempt from tax imposed by this chapter, and

(iii)

determined without regard to sections 911, 931, and 933.

(3)

Poverty line

(A)

In general

The term poverty line has the meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)).

(B)

Poverty line used

In the case of any qualified health benefits plan offered through an exchange for coverage during a taxable year beginning in a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of the regular enrollment period for coverage during such calendar year.

(e)

Rules for undocumented aliens

(1)

In general

If any individual for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year is an undocumented alien—

(A)

no credit shall be allowed under subsection (a) with respect to any portion of any premium taken into account under clause (i) or (ii) of subsection (b)(2)(A) which is attributable to the individual, and

(B)

the individual shall not be taken into account in determining the family size involved but the individual's modified gross income shall be taken into account in determining household income.

(2)

Undocumented alien

For purposes of this section—

(A)

The term undocumented alien means an individual who is not, or who is reasonably not expected to be for the entire taxable year, a citizen or national of the United States, an alien lawfully admitted to the United States for permanent residence, or an alien lawfully present in the United States.

(B)

Identification requirement

An individual shall be treated as an undocumented alien unless the information required under section 2238(b)(2) of the Social Security Act has been provided with respect to such individual.

(f)

Reconciliation of credit and advance credit

(1)

In general

The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the amount of any advance payment of such credit under section 2248 of the Social Security Act.

(2)

Excess advance payments

(A)

In general

If the advance payments to a taxpayer under section 2248 of the Social Security Act for a taxable year exceed the credit allowed by this section (determined without regard to paragraph (1)), the tax imposed by this chapter for the taxable year shall be increased by the amount of such excess.

(B)

Limitation on increase where income less than 300 percent of poverty line

In the case of an applicable taxpayer whose household income is less than 300 percent of the poverty line for the size of the family involved for the taxable year, the amount of the increase under subparagraph (A) shall in no event exceed $400 ($250 in the case of a taxpayer whose tax is determined under section 1(c) for the taxable year).

(g)

Regulations

The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations which provide for—

(1)

the coordination of the credit allowed under this section with the program for advance payment of the credit under section 2248 of the Social Security Act,

(2)

requirements for information required to be included on a return of tax with respect to the modified gross income of individuals other than the taxpayer, and

(3)

the application of subsection (f) where the filing status of the taxpayer for a taxable year is different from such status used for determining the advance payment of the credit.

.

(b)

Disallowance of deduction

Section 280C of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(g)

Credit for health insurance premiums

No deduction shall be allowed for the portion of the premiums paid by the taxpayer for coverage of 1 or more individuals under a qualified health benefits plan which is equal to the amount of the credit determined for the taxable year under section 36B(a) with respect to such premiums.

.

(c)

Treatment of failure to provide documentation as mathematical error

Section 6213(g)(2) of the Internal Revenue Code of 1986 is amended by striking and at the end of subparagraph (M), by striking the period at the end of subparagraph (N) and inserting , and, and by inserting after subparagraph (N) the following new subparagraph:

(O)

the omission of identifying information described in section 2238(b)(1) of the Social Security Act and required under section 36B(e)(2)(B).

.

(d)

Study

Not later than 5 years after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall conduct a study of whether the percentage of household income used for purposes of section 36B(c)(2)(C) of the Internal Revenue Code of 1986 (as added by this section) is the appropriate level for determining whether employer-provided coverage is affordable for an employee and whether such level may be lowered without significantly increasing the costs to the Federal Government and reducing employer-provided coverage. The Secretary shall report the results of such study to the appropriate committees of Congress, including any recommendations for legislative changes.

(e)

Conforming amendments

(1)

Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 36B, after 36A,.

(2)

The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36A the following new item:

Sec. 36B. Refundable credit for coverage under a qualified health benefits plan.

.

(f)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2012.

1206.

Cost-sharing subsidies and advance payments of premium credits and cost-sharing subsidies

Title XXII of the Social Security Act (as added by section 1001 and amended by sections 1101 and 1201) is amended by adding at the end the following:

2

Premium credits and cost-sharing subsidies

2246.

Premium credits

For refundable tax credit providing premium assistance for individuals with income less than 400 percent of the Federal poverty line, see section 36B of the Internal Revenue Code of 1986 (as added by section 1205 of the America's Healthy Future Act of 2009).

2247.

Cost-sharing subsidies for individuals enrolling in qualified health benefit plans

(a)

In general

In the case of an eligible insured enrolled in a qualified health benefits plan with respect to which a credit is allowed to the insured (or an applicable taxpayer on behalf of the insured) under section 36B of the Internal Revenue Code of 1986—

(1)

the Secretary shall notify the offeror of the plan of the eligible insured's eligibility for a reduction in cost-sharing under this section; and

(2)

the offeror shall reduce the cost-sharing under the plan at the level and in the manner specified in subsection (c).

(b)

Eligible insured

In this section, the term eligible insured means an individual—

(1)

who enrolls in a qualified health benefits plan in the silver level of coverage in the individual market offered through an exchange under part B; and

(2)

whose household income exceeds 100 percent (133 percent in the case of taxable years beginning in 2013) but does not exceed 400 percent of the poverty line for a family of the size involved.

In the case of an individual described in section 36B(c)(1)(B) of the Internal Revenue Code of 1986 for any taxable year beginning after December 31, 2013, the individual shall be treated as having household income equal to 100 percent of such poverty line for purposes of applying this section.
(c)

Determination of reduction in cost-sharing

(1)

Reduction in out-of-pocket limit

The reduction in cost-sharing under this subsection shall first be achieved by reducing the applicable out-of pocket limit under section 2242(c)(2) in the case of—

(A)

an eligible insured whose household income is more than 100 percent but not more than 200 percent of the poverty line for a family of the size involved, by two-thirds;

(B)

an eligible insured whose household income is more than 200 percent but not more than 300 percent of the poverty line for a family of the size involved, by one-half; and

(C)

an eligible insured whose household income is more than 300 percent but not more than 400 percent of the poverty line for a family of the size involved, by one-third.

The reduction under this paragraph shall not result in an increase in the plan's share of the total allowed costs of benefits provided under the plan above 80 percent (90 percent in the case of an eligible insured described in subparagraph (A)) of such costs
(2)

Additional reduction for lower income insureds

The Secretary shall establish procedures under which the offeror of a qualified health benefits plan to which this section applies shall further reduce cost-sharing under the plan in a manner sufficient to—

(A)

in the case of an eligible insured whose household income is not less than 100 percent but not more than 150 percent of the poverty line for a family of the size involved, increase the plan's share of the total allowed costs of benefits provided under the plan to 90 percent of such costs; and

(B)

in the case of an eligible insured whose household income is more than 150 percent but not more than 200 percent of the poverty line for a family of the size involved, increase the plan's share of the total allowed costs of benefits provided under the plan to 80 percent of such costs.

(3)

Reduction to eliminate Federal budget deficit

The reduction in cost-sharing under this section (determined without regard to this paragraph) with respect to a plan year for which a reduction is required in such amount under section 1209 of the America's Healthy Future Act of 2009 shall be reduced by the percentage specified in such section.

(4)

Methods for providing subsidy

(A)

In general

An offeror of a qualified health benefits plan making reductions under this subsection shall notify the Secretary of such reductions and the Secretary shall make periodic and timely payments to the offeror equal to the value of the reductions.

(B)

Capitated payments

The Secretary may establish a capitated payment system to carry out the payment of subsidies under this section. Any such system shall take into account the value of the subsidies and make appropriate risk adjustments to such payments.

(d)

Special rules for Indians

(1)

Indians under 300 percent of poverty

If an individual enrolled in any qualified health benefits plan in the individual market through an exchange is an Indian (as defined in section 4 of the Indian Health Care Improvement Act) whose household income is not more than 300 percent of the poverty line for a family of the size involved, then, for purposes of this section—

(A)

such individual shall be treated as an eligible insured; and

(B)

the offeror of the plan shall eliminate any cost-sharing under the plan.

(2)

Items or services furnished through Indian health providers

If an Indian (as so defined) enrolled in a qualified health benefits plan is furnished an item or service directly by the Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization or through referral under contract health services—

(A)

no cost-sharing under the plan shall be imposed under the plan for such item or service; and

(B)

the offeror of the plan shall not reduce the payment to any such entity for such item or service by the amount of any cost-sharing that would be due from the Indian but for subparagraph (A).

(3)

Payment

The Secretary shall pay to the offeror of a qualified health benefits plan the amount necessary to reflect the increase in actuarial value of the plan required by reason of this subsection.

(e)

Rules for undocumented aliens

(1)

In general

In the case of an individual who is undocumented alien—

(A)

no cost-sharing reduction under this subsection shall apply with respect to any item or service provided to the individual; and

(B)

the individual shall not be taken into account in determining the family size involved but the individual's modified gross income shall be taken into account in determining household income.

(2)

Identification requirement

An individual shall be treated as an undocumented alien unless the information required under section 2238(b)(2) of the Social Security Act has been provided with respect to such individual.

(f)

Definitions and special rules

In this section:

(1)

In general

Any term used in this section which is also used in section 36B of the Internal Revenue Code of 1986 shall have the meaning given such term by such section.

(2)

Limitations on subsidy

No subsidy shall be allowed under this section with respect to coverage for any month if such month would not be treated as a coverage month under section 36B(c)(2) of such Code.

2248.

Advance determination and payment of premium credits and cost-sharing subsidies

(a)

In general

The Secretary, in consultation with the Secretary of the Treasury, shall establish a program under which—

(1)

upon request of an exchange, advance determinations are made under section 2238 with respect to the income eligibility of individuals enrolling in a qualified health benefits plan in the individual market through the exchange for the credit allowable under section 36B of the Internal Revenue Code of 1986 and the cost-sharing subsidy under section 2247;

(2)

the Secretary notifies the exchange and the Secretary of the Treasury of the advance determinations; and

(3)

the Secretary of the Treasury makes advance payments of such credit or subsidy to the offerors of the qualified health benefits plans in order to reduce the premiums payable by individuals eligible for such credit.

(b)

Advance determinations

(1)

In general

The Secretary shall provide under the program established under subsection (a) that advance determination of eligibility with respect to any individual shall be made—

(A)

during the annual open enrollment period applicable to the individual (or such other enrollment period as may be specified by the Secretary); and

(B)

on the basis of the individual's household income for the second taxable year preceding the taxable year in which enrollment through such enrollment period first takes effect.

(2)

Changes in circumstances

The Secretary shall provide procedures for making advance determinations on the basis of information other than that described in paragraph (1)(B) in cases where information included with an application form demonstrates substantial changes in income, changes in family size or other household circumstances, change in filing status, the filing of an application for unemployment benefits, or other significant changes affecting eligibility, including—

(A)

allowing an individual claiming a decrease of 20 percent or more in income, or filing an application for unemployment benefits, to have eligibility for the credit determined on the basis of household income for a later period or on the basis of the individual's estimate of such income for the taxable year; and

(B)

the determination of household income in cases where the taxpayer was not required to file a return of tax imposed by this chapter for the second preceding taxable year.

(c)

Payment of premium credits

(1)

In general

The Secretary shall notify the Secretary of the Treasury and the exchange through which the individual is enrolling of the advance determination under section 2238.

(2)

Premium credit

(A)

In general

The Secretary of the Treasury shall make the advance payment under this section of any credit allowed under section 36B of the Internal Revenue Code of 1986 to the offeror of a qualified health benefits plan on a monthly basis (or such other periodic basis as the Secretary may provide).

(B)

Offeror responsibilities

An offeror of a qualified health benefits plan receiving an advance payment with respect to an individual enrolled in the plan shall—

(i)

reduce the premium charged the insured for any period by the amount of the advance payment for the period;

(ii)

notify the exchange and the Secretary of such reduction; and

(iii)

in the case of any nonpayment of premiums by the insured—

(I)

notify the Secretary of such nonpayment; and

(II)

allow a 3-month grace period for nonpayment of premiums before discontinuing coverage.

(d)

Coordination with verification of lawful presence

No advance payment shall be made under this section unless there has been a verification under section 2238 of the individual's citizenship or nationality or lawful presence in the United States.

.

1207.

Disclosures to carry out eligibility requirements for certain programs

(a)

Disclosure of taxpayer return information and social security numbers

(1)

Taxpayer return information

Subsection (l) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(21)

Disclosure of return information to carry out eligibility requirements for certain programs

(A)

In general

The Secretary, upon written request from the Secretary of Health and Human Services, shall disclose to officers, employees, and contractors of the Department of Health and Human Services return information of any taxpayer whose income is relevant in determining any credit under section 36B or any cost-sharing subsidy under section 2247 of the Social Security Act or eligibility for participation in a State medicaid program under title XIX of such Act, a State's children's health insurance program under title XXI of such Act, or a basic health program under section 2228 of such Act. Such return information shall be limited to—

(i)

taxpayer identity information with respect to such taxpayer,

(ii)

the filing status of such taxpayer,

(iii)

the number of individuals for whom a deduction is allowed under section 151 with respect to the taxpayer (including the taxpayer and the taxpayer's spouse),

(iv)

the modified gross income (as defined in section 36B) of such taxpayer and each of the other individuals included under clause (iii),

(v)

such other information as is prescribed by the Secretary by regulation as might indicate whether the taxpayer is eligible for such credit or subsidy (and the amount thereof), and

(vi)

the taxable year with respect to which the preceding information relates or, if applicable, the fact that such information is not available.

(B)

Information to exchange and State agencies

The Secretary of Health and Human Services may disclose to an exchange established under title XXII of the Social Security Act or its contractors, or to a State agency administering a State program described in subparagraph (A) or its contractors, any inconsistency between the information provided by the exchange or State agency to the Secretary and the information provided to the Secretary under subparagraph (A).

(C)

Restriction on use of disclosed information

Return information disclosed under subparagraph (A) or (B) may be used by officers, employees, and contractors of the Department of Health and Human Services, an exchange, or a State agency only for the purposes of, and to the extent necessary in—

(i)

establishing eligibility for participation in the exchange, and verifying the appropriate amount of, any credit or subsidy described in subparagraph (A),

(ii)

determining eligibility for participation in the State programs described in subparagraph (A).

.

(2)

Social Security numbers

Section 205(c)(2)(C) of the Social Security Act is amended by adding at the end the following new clause:

(x)

The Secretary of Health and Human Services, and the exchanges established under title XXII, are authorized to collect and use the names and social security account numbers of individuals as required to administer the provisions of, and the amendments made by, America's Healthy Future Act of 2009.

.

(b)

Confidentiality and disclosure

Paragraph (3) of section 6103(a) of such Code is amended by striking or (20) and inserting (20), or (21).

(c)

Procedures and recordkeeping related to disclosures

Paragraph (4) of section 6103(p) of such Code is amended—

(1)

by inserting , or any entity described in subsection (l)(21), after or (20) in the matter preceding subparagraph (A),

(2)

by inserting or any entity described in subsection (l)(21), after or (o)(1)(A) in subparagraph (F)(ii), and

(3)

by inserting or any entity described in subsection (l)(21), after or (20) both places it appears in the matter after subparagraph (F).

(d)

Unauthorized disclosure or inspection

Paragraph (2) of section 7213(a) of such Code is amended by striking or (20) and inserting (20), or (21).

1208.

Premium credit and subsidy refunds and payments disregarded for Federal and Federally-assisted programs

For purposes of determining the eligibility of any individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds—

(1)

any credit or refund allowed or made to any individual by reason of section 36B of the Internal Revenue Code of 1986 (as added by section 1205) shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following 2 months; and

(2)

any cost-sharing subsidy payment or advance payment of the credit allowed under such section 36B that is made under section 2247 or 2248 of the Social Security Act (as added by section 1206) shall be treated as made to the qualified health benefits plan in which an individual is enrolled and not to that individual.

1209.

Fail-safe mechanism to prevent increase in Federal budget deficit

(a)

Estimate and certification of effect of Act on budget deficit

(1)

In general

The President shall include in the submission under section 1105 of title 31, United States Code, of the budget of the United States Government for fiscal year 2013 and each fiscal year thereafter an estimate of the budgetary effects for the fiscal year of the provisions of (and the amendments made by) this Act, based on the information available as of the date of such submission.

(2)

Certification

The President shall include with the estimate under paragraph (1) for any fiscal year a certification as to whether the sum of the decreases in revenues and increases in outlays for the fiscal year by reason of the provisions of (and the amendments made by) this Act exceed (or do not exceed) the sum of the increases in revenues and decreases in outlays for the fiscal year by reason of the provisions and amendments.

(b)

Effect of deficit

If the President certifies an excess under subsection (a)(2) for any fiscal year—

(1)

the President shall include with the certification the percentage by which the credits allowable under section 36B of the Internal Revenue Code of 1986 and the cost-sharing subsidies under section 2247 of the Social Security Act must be reduced for plan years beginning during such fiscal year such that there is an aggregate decrease in the amount of such credits and subsidies equal to the amount of such excess; and

(2)

the President shall instruct the Secretary of Health and Human Services and the Secretary of the Treasury to reduce such credits and subsidies for such plan years by such percentage for purposes of applying section 36B(b)(4) of such Code and section 2247(c)(3) of such Act.

B

Credit for small employers

1221.

Credit for employee health insurance expenses of small businesses

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by inserting after section 45Q the following:

45R.

Employee health insurance expenses of small employers

(a)

General rule

For purposes of section 38, in the case of an eligible small employer, the small employer health insurance credit determined under this section for any taxable year in the credit period is the amount determined under subsection (b).

(b)

Health insurance credit amount

Subject to subsection (c), the amount determined under this subsection with respect to any eligible small employer is equal to 50 percent (35 percent in the case of a tax-exempt eligible small employer) of the lesser of—

(1)

the aggregate amount of nonelective contributions the employer made on behalf of its employees during the taxable year under the arrangement described in subsection (d)(4) for premiums for qualified health benefits plans offered by the employer to its employees through an exchange, or

(2)

the aggregate amount of nonelective contributions which the employer would have made during the taxable year under the arrangement if each employee taken into account under paragraph (1) had enrolled in a qualified health benefits plan which had a premium equal to the average premium (as determined by the Secretary of Health and Human Services) for the small group market in the exchange through which the employee is eligible for coverage.

In the case of a taxable year beginning in 2013, the credit determined under this section shall be determined only with respect to premiums for coverage after June 30, 2013.
(c)

Limitations on credit

(1)

Phaseout of credit amount based on number of employees and average wages

The amount of the credit determined under subsection (b) without regard to this subsection shall be reduced (but not below zero) by the sum of the following amounts:

(A)

Such amount multiplied by a fraction the numerator of which is the total number of full-time equivalent employees of the employer in excess of 10 and the denominator of which is 15.

(B)

Such amount multiplied by a fraction the numerator of which is the average annual wages of the employer in excess of the dollar amount in effect under subsection (d)(3)(B) and the denominator of which is $20,000.

(2)

State failure to adopt insurance rating reforms

No credit shall be determined under this section with respect to contributions by the employer for any qualified health benefits plans purchased through an exchange for any month of coverage before the first month the State establishing the exchange has in effect the insurance rating reforms described in subtitle A of title XXII of the Social Security Act.

(d)

Eligible small employer

For purposes of this section—

(1)

In general

The term eligible small employer means, with respect to any taxable year, an employer—

(A)

which has no more than 25 full-time equivalent employees for the taxable year,

(B)

the average annual wages of which do not exceed an amount equal to the amount in effect under paragraph (3)(B) for the taxable year plus $20,000, and

(C)

which has in effect an arrangement described in paragraph (4).

(2)

Full-time equivalent employees

(A)

In general

The term full-time equivalent employees means a number of employees equal to the number determined by dividing—

(i)

the total number of hours for which wages were paid by the employer to employees during the taxable year, by

(ii)

2,080.

Such number shall be rounded to the next lowest whole number if not otherwise a whole number.
(B)

Excess hours not counted

If an employee works in excess of 2,080 hours during any taxable year, such excess shall not be taken into account under subparagraph (A).

(C)

Special rules

The Secretary shall prescribe such regulations, rules, and guidance as may be necessary to apply this paragraph to employees who are not compensated on an hourly basis.

(3)

Average annual wages

(A)

In general

The average annual wages of an eligible small employer for any taxable year is the amount determined by dividing—

(i)

the aggregate amount of wages which were paid by the employer to employees during the taxable year, by

(ii)

the number of full-time equivalent employees of the employee determined under paragraph (2) for the taxable year.

Such amount shall be rounded to the next lowest multiple of $1,000 if not otherwise such a multiple.
(B)

Dollar amount

For purposes of paragraph (1)(B)—

(i)

2010

The dollar amount in effect under this paragraph for taxable years beginning in 2010 is $20,000.

(ii)

Subsequent years

In the case of a taxable year beginning in a calendar year after 2010, the dollar amount in effect under this paragraph shall be equal to $20,000, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2009 for calendar year 1992 in subparagraph (B) thereof.

(4)

Contribution arrangement

An arrangement is described in this paragraph if it requires an eligible small employer to make a nonelective contribution on behalf of each employee who enrolls in a qualified health benefits plan offered to employees by the employer through an exchange in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the qualified health benefits plan.

(5)

Seasonal worker hours and wages not counted

For purposes of this subsection—

(A)

In general

The number of hours worked by, and wages paid to, a seasonal worker of an employer shall not be taken into account in determining the full-time equivalent employees and average annual wages of the employer.

(B)

Definition of seasonal worker

The term seasonal worker means an individual who performs labor or services on a seasonal basis where, ordinarily, the employment pertains to or is of the kind exclusively performed at certain seasons or periods of the year and which, from its nature, may not be continuous or carried on throughout the year.

(e)

Other rules and definitions

For purposes of this section—

(1)

Employee

(A)

Certain employees excluded

The term employee shall not include—

(i)

an employee within the meaning of section 401(c)(1),

(ii)

any 2-percent shareholder (as defined in section 1372(b)) of an eligible small business which is an S corporation,

(iii)

any 5-percent owner (as defined in section 416(i)(1)(B)(i)) of an eligible small business, or

(iv)

any individual who bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)(2) to, or is a dependent described in section 152(d)(2)(H) of, an individual described in clause (i), (ii), or (iii).

(B)

Leased employees

The term employee shall include a leased employee within the meaning of section 414(n).

(2)

Credit period

The term credit period means, with respect to any eligible small employer, the 2-consecutive-taxable year period beginning with the 1st taxable year in which the employer (or any predecessor) offers 1 or more qualified health benefits plans to its employees through an exchange. If no credit is allowed to an employer (or predecessor) under this section by reason of subsection (c)(2) (relating to failure by States to adopt insurance rating reforms), the credit period with respect to the employer shall not begin until the 1st taxable year following the taxable year in which the State has in effect the insurance rating reforms described in such subsection.

(3)

Nonelective contribution

The term nonelective contribution means an employer contribution other than an employer contribution pursuant to a salary reduction arrangement.

(4)

Wages

The term wages has the meaning given such term by section 3121(a) (determined without regard to any dollar limitation contained in such section).

(5)

Aggregation and other rules made applicable

(A)

Aggregation rules

All employers treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of this section.

(B)

Other rules

Rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.

(f)

Credit made available to tax-exempt eligible small employers

(1)

In general

In the case of a tax-exempt eligible small employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of— —

(A)

the amount of the credit determined under this section with respect to such employer, or

(B)

the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins.

(2)

Tax-exempt eligible small employer

For purposes of this section, the term tax-exempt eligible small employer means an eligible small employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a).

(3)

Payroll taxes

For purposes of this subsection—

(A)

In general

The term payroll taxes means—

(i)

amounts required to be withheld from the employees of the tax-exempt eligible small employer under section 3401(a),

(ii)

amounts required to be withheld from such employees under section 3101(b), and

(iii)

amounts of the taxes imposed on the tax-exempt eligible small employer under section 3111(b).

(B)

Special rule

A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A).

(g)

Application of section for calendar years 2011 and 2012

In the case of any taxable year beginning in 2011 or 2012, the following modifications to this section shall apply in determining the amount of the credit under subsection (a):

(1)

No credit period required

The credit shall be determined without regard to whether the taxable year is in a credit period and for purposes of applying this section to taxable years beginning after 2012, no credit period shall be treated as beginning with a taxable year beginning before 2013.

(2)

Amount of credit

The amount of the credit determined under subsection (b) shall be determined—

(A)

by substituting 35 percent (25 percent in the case of a tax-exempt eligible small employer) for 50 percent (35 percent in the case of a tax-exempt eligible small employer),

(B)

by reference to an eligible small employer's nonelective contributions for premiums paid for health insurance coverage (within the meaning of section 9832(b)(1)) of an employee, and

(C)

by substituting for the average premium determined under subsection (b)(2) the amount the Secretary of Health and Human Services determines is the average premium for the small group market in the State in which the employer is offering health insurance coverage (or for such area within the State as is specified by the Secretary).

(3)

State rating reform limitation

The limitation of paragraph (2) of subsection (c) shall not apply.

(4)

Contribution arrangement

An arrangement shall not fail to meet the requirements of subsection (d)(4) solely because it provides for the offering of insurance outside of an exchange.

(h)

Insurance definitions

Any term used in this section which is also used in title XXII of the Social Security Act shall have the meaning given such term by such title.

(i)

Regulations

The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations to prevent the avoidance of the 2-year limit on the credit period through the use of successor entities and the avoidance of the limitations under paragraphs (1) and (2) of subsection (c) through the use of multiple entities.

.

(b)

Credit to be part of general business credit

Section 38(b) of the Internal Revenue Code of 1986 (relating to current year business credit) is amended by striking plus at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting , plus, and by inserting after paragraph (35) the following:

(36)

the small employer health insurance credit determined under section 45R.

.

(c)

Credit allowed against alternative minimum tax

Section 38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified credits) is amended by redesignating clauses (vi), (vii), and (viii) as clauses (vii), (viii), and (ix), respectively, and by inserting after clause (v) the following new clause:

(vi)

the credit determined under section 45R,

.

(d)

Disallowance of deduction for certain expenses for which credit allowed

(1)

In general

Section 280C of the Internal Revenue Code of 1986 (relating to disallowance of deduction for certain expenses for which credit allowed), as amended by section 1205(b), is amended by adding at the end the following new subsection:

(h)

Credit for employee health insurance expenses of small employers

No deduction shall be allowed for that portion of the premiums for qualified health benefits plans (as defined in section 2201(b) of the Social Security Act) paid by an employer which is equal to the amount of the credit determined under section 45R(a).

.

(2)

Deduction for expiring credits

Section 196(c) of such Code is amended by striking and at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting , and, and by adding at the end the following new paragraph:

(14)

the small employer health insurance credit determined under section 45R(a).

.

(e)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

Sec. 45R. Employee health insurance expenses of small employers.

.

(f)

Effective dates

(1)

In general

The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2010.

(2)

Minimum tax

The amendments made by subsection (c) shall apply to credits determined under section 45R of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2010, and to carrybacks of such credits.

D

Shared responsibility

I

Individual responsibility

1301.

Excise tax on individuals without essential health benefits coverage

(a)

In general

Subtitle D of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter:

48

Maintenance of essential health benefits coverage

Sec. 5000A. Failure to maintain essential health benefits coverage.

5000A.

Failure to maintain essential health benefits coverage

(a)

Requirement to maintain essential health benefits coverage

If an individual is an applicable individual for any month beginning after June 30, 2013, the individual is required to be covered by essential health benefits coverage for such month.

(b)

Imposition of tax

(1)

In general

If an applicable individual fails to meet the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as provided in subsection (d), there is hereby imposed a tax with respect to the individual in the amount determined under subsection (c).

(2)

Inclusion with income tax return

Any tax imposed by this section with respect to any month shall be included with a taxpayer's return of tax imposed by chapter 1 for the taxable year which includes such month.

(3)

Liability for tax

If an individual with respect to whom tax is imposed by this section for any month—

(A)

is a dependent (as defined in section 152) of another taxpayer for the other taxpayer's taxable year including such month, such other taxpayer shall be liable for such tax, or

(B)

files a joint return for the taxable year including such month, such individual and the spouse of such individual shall be jointly liable for such tax.

(c)

Amount of tax

(1)

In general

The tax determined under this subsection for any month with respect to any individual is an amount equal to 1/12 of the applicable dollar amount for the calendar year.

(2)

Dollar limitation

The amount of the tax imposed by this section on any taxpayer for any taxable year with respect to all individuals for whom the taxpayer is liable under subsection (b)(3) shall not exceed an amount equal to twice the applicable dollar amount for the calendar year with or within which the taxable year ends.

(3)

Applicable dollar amount

For purposes of paragraph (1)—

(A)

In general

Except as provided in subparagraph (B), the applicable dollar amount is $750.

(B)

Phase in

The applicable dollar amount is $200 for 2014, $400 for 2015, and $600 for 2016.

(C)

Indexing of amount

In the case of any calendar year beginning after 2017, the applicable dollar amount shall be equal to $750, increased by an amount equal to—

(i)

$750, multiplied by

(ii)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2016 for calendar year 1992 in subparagraph (B) thereof.

If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.
(4)

Terms relating to income and families

For purposes of this section—

(A)

Family size

The family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year.

(B)

Household income

The term household income means, with respect to any taxpayer, an amount equal to the sum of—

(i)

the modified gross income of the taxpayer, plus

(ii)

the aggregate modified gross incomes of all other individuals taken into account in determining the taxpayer's family size under paragraph (1).

(C)

Modified gross income

The term modified gross income means gross income—

(i)

decreased by the amount of any deduction allowable under paragraphs (1), (3), or (4) of section 62(a),

(ii)

increased by the amount of interest received or accrued during the taxable year which is exempt from tax imposed by this chapter, and

(iii)

determined without regard to sections 911, 931, and 933.

(D)

Poverty line

(i)

In general

The term poverty line has the meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)).

(ii)

Poverty line used

In the case of any taxable year ending with or within a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of the such calendar year.

(d)

Applicable individual

For purposes of this section—

(1)

In general

The term applicable individual means, with respect to any month, any individual who has attained the age of 18 before the beginning of the month other than an individual described in paragraph (2) or (3).

(2)

Religious exemptions

(A)

Religious conscience exemption

Such term shall not include any individual for any month if such individual has in effect an exemption under section 2236(f) of the Social Security Act which certifies that such individual is a member of a recognized religious sect or division thereof described in section 1402(g)(1) and an adherent of established tenets or teachings of such sect or division as described in such section.

(B)

Health care sharing ministry

(i)

In general

Such term shall not include any individual for any month if such individual is a member of a health care sharing ministry for the month.

(ii)

Health care sharing ministry

The term health care sharing ministry means an organization—

(I)

which is described in section 501(c)(3) and is exempt from taxation under section 501(a),

(II)

members of which share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed,

(III)

members of which retain membership even after they develop a medical condition,

(IV)

which (or a predecessor of which) has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared during the entire period of its existence, and

(V)

which conducts an annual audit which is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and which is made available to the public upon request.

(3)

Undocumented aliens

Such term shall not include an individual for any month if for the month the individual is not a citizen or national of the United States, an alien lawfully admitted to the United States for permanent residence, or an alien lawfully present in the United States.

(e)

Exemptions from tax

No tax shall be imposed under subsection (a) with respect to—

(1)

Months during short coverage gaps

Any month the last day of which occurred during a period in which the applicable individual was not covered by essential health benefits coverage for a period of less than 3 months.

(2)

Individuals who cannot afford coverage

(A)

In general

Any applicable individual if the applicable individual's required contribution for a calendar year exceeds 8 percent of such individual's household income for the second taxable year preceding the taxable year described in subsection (b)(2). For purposes of applying this subparagraph, the taxpayer's household income shall be increased by any exclusion from gross income for any portion of the required contribution made through a salary reduction arrangement.

(B)

Required contribution

For purposes of this paragraph, the term required contribution means—

(i)

in the case of an individual eligible to purchase health insurance coverage through an employer other than through an exchange, the portion of the annual premium which would be paid by the individual (without regard to whether paid through salary reduction or otherwise) for health insurance coverage which is the lowest cost coverage offered through the employer, or

(ii)

in the case of any individual not described in clause (i), the annual premium for the lowest cost bronze plan available in the individual market through the exchange in the State in which the individual resides (without regard to whether the individual is eligible to purchase a qualified health benefits plan through the exchange), reduced by the amount of the credit allowable under section 36B for the taxable year (determined as if the individual was covered by a qualified health benefits plan offered through the exchange for the entire taxable year).

(C)

Special rule for individuals eligible for coverage through employee

If an applicable individual is eligible for coverage through an employer by reason of a relationship to an employee, the determination under subparagraph (B)(i) shall be made by reference to the affordability of the coverage to the employee.

(D)

Indexing

In the case of plan years beginning in any calendar year after 2013, subparagraph (A) shall be applied by substituting for 8 percent the percentage the Secretary of Health and Human Services determines reflects the excess of the rate of premium growth between the preceding calendar year and 2012 over the rate of income growth for such period.

(3)

Taxpayers with income under 100 percent of poverty line

Any applicable individual who has a household income for the for the second taxable year preceding the taxable year described in subsection (b)(2) which is less than 100 percent of the poverty line for the size of the family involved (determined in the same manner as under subsection (b)(4)).

(4)

Native Americans

Any applicable individual who is an Indian as defined in section 4 of the Indian Health Care Improvement Act.

(5)

Hardships

Any applicable individual who is determined by the Secretary to have suffered a hardship with respect to the capability to obtain coverage under a qualified health benefits plan.

(f)

Essential health benefits coverage

For purposes of this section—

(1)

In general

The term essential health benefits coverage means any of the following:

(A)

Qualified health benefits plan coverage

Coverage under a qualified health benefits plan.

(B)

Grandfathered health benefits plan

Coverage under a grandfathered health benefits plan (as defined in section 2221(c) of the Social Security Act).

(C)

Employer-sponsored plan

Coverage under an eligible employer-sponsored plan.

(D)

Medicare

Coverage under part A of title XVIII of the Social Security Act.

(E)

Medicaid

Coverage for medical assistance under title XIX of the Social Security Act.

(F)

Members of the Armed Forces and dependents (including TRICARE)

Coverage under chapter 55 of title 10, United States Code, including similar coverage furnished under section 1781 of title 38 of such Code.

(G)

VA

Coverage under the veteran’s health care program under chapter 17 of title 38, United States Code, but only if the coverage for the individual involved is determined by the Secretary of Health and Human Services in coordination with the Secretary to be not less than a level specified by the Secretary of Health and Human Services, based on the individual’s priority for services as provided under section 1705(a) of such title.

(H)

Federal employees coverage

Coverage under the Federal employees health benefits program under chapter 89 of title 5, United States Code.

(I)

Other coverage

Such other health benefits coverage, such as a State health benefits risk pool or coverage while incarcerated, as the Secretary of Health and Human Services, in coordination with the Secretary, recognizes for purposes of this subsection.

(2)

Eligible employer-sponsored plan

The term eligible employer-sponsored plan means, with respect to any employee, a health benefits plan (other than a grandfathered health benefits plan) offered by an employer to the employee, but only if—

(A)

in the case of a small employer, the plan is a qualified health benefits plan, and

(B)

in the case of a large employer plan, the plan meets the requirements of section 2244 of the Social Security Act.

(3)

Insurance-related terms

Any term used in this section which is also used in title XXII of the Social Security Act shall have the same meaning as when used in such title.

(g)

Modifications of subtitle F

Notwithstanding any other provision of law—

(1)

Waiver of criminal and civil penalties and interest

In the case of any failure by a taxpayer to timely pay any tax imposed by this section—

(A)

such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure, and

(B)

no penalty, addition to tax, or interest shall be imposed with respect to such failure or such tax.

(2)

Limited collection actions permitted

In the case of the assessment of any tax imposed by this section, the Secretary shall not take any action with respect to the collection of such tax other than—

(A)

giving notice and demand for such tax under section 6303,

(B)

crediting under section 6402(a) the amount of any overpayment of the taxpayer against such tax, and

(C)

offsetting any payment owed by any Federal agency to the taxpayer against such tax under the Treasury offset program.

.

(b)

Clerical amendment

The table of chapters for subtitle D of the Internal Revenue Code of 1986 is amended by inserting after the item relating to chapter 47 the following new item:

Chapter 48—Maintenance of essential health benefits coverage

.

(c)

Study on affordable coverage

(1)

Study and report

(A)

In general

The Comptroller General shall conduct a study on the affordability of health insurance coverage, including—

(i)

the impact of the tax credit for qualified health insurance coverage of individuals under section 36B of the Internal Revenue Code of 1986 and the tax credit for employee health insurance expenses of small employers under section 45R of such Code on maintaining and expanding the health insurance coverage of individuals,

(ii)

the availability of affordable health benefits plans, and

(iii)

the ability of individuals to maintain essential health benefits coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986).

(B)

Report

Not later than February 1, 2014, the Comptroller General shall submit to the appropriate committees of Congress a report on the study conducted under subparagraph (A), together with legislative recommendations relating to the matters studied under such subparagraph.

(2)

Congressional consideration of recommendations

(A)

Committee consideration of proposal; discharge; contingency for introduction

Not later than April 1, 2014, the appropriate committees of Congress shall report legislation implementing the recommendations contained in the report described in paragraph (1)(B). If, with respect to the House involved, any such committee has not reported such legislation by such date, such committees shall be deemed to be discharged from further consideration of the proposal and any member of the House of Representatives or the Senate, respectively, may introduce legislation implementing the recommendations contained in the proposal and such legislation shall be placed on the appropriate calendar of the House involved.

(B)

Expedited procedure

(i)

Consideration

If legislation is reported out of committee or legislation is introduced under subparagraph (A), not later than 15 calendar days after the date on which a committee has been or could have been discharged from consideration of such legislation or such legislation is introduced, the Speaker of the House of Representatives, or the Speaker's designee, or the majority leader of the Senate, or the leader's designee, shall move to proceed to the consideration of the legislation. It shall also be in order for any member of the Senate or the House of Representatives, respectively, to move to proceed to the consideration of the legislation at any time after the conclusion of such 15-day period. All points of order against the legislation (and against consideration of the legislation) with the exception of points of order under the Congressional Budget Act of 1974 are waived. A motion to proceed to the consideration of the legislation is privileged in the Senate and highly privileged in the House of Representatives and is not debatable. The motion is not subject to amendment, to a motion to postpone consideration of the legislation, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion to proceed is agreed to or not agreed to shall not be in order. If the motion to proceed is agreed to, the Senate or the House of Representatives, as the case may be, shall immediately proceed to consideration of the legislation in accordance with the Standing Rules of the Senate or the House of Representatives, as the case may be, without intervening motion, order, or other business, and the resolution shall remain the unfinished business of the Senate or the House of Representatives, as the case may be, until disposed of.

(ii)

Consideration by other House

If, before the passage by one House of the legislation that was introduced in such House, such House receives from the other House legislation as passed by such other House—

(I)

the legislation of the other House shall not be referred to a committee and shall immediately displace the legislation that was reported or introduced in the House in receipt of the legislation of the other House; and

(II)

the legislation of the other House shall immediately be considered by the receiving House under the same procedures applicable to legislation reported by or discharged from a committee or introduced under subparagraph (A).

Upon disposition of legislation that is received by one House from the other House, it shall no longer be in order to consider the legislation that was reported or introduced in the receiving House.
(iii)

Senate limits on debate

In the Senate, consideration of the legislation and on all debatable motions and appeals in connection therewith shall not exceed a total of 30 hours, which shall be divided equally between those favoring and those opposing the legislation. A motion further to limit debate on the legislation is in order and is not debatable. Any debatable motion or appeal is debatable for not to exceed 1 hour, to be divided equally between those favoring and those opposing the motion or appeal. All time used for consideration of the legislation, including time used for quorum calls and voting, shall be counted against the total 30 hours of consideration.

(iv)

Consideration in conference

Immediately upon a final passage of the legislation that results in a disagreement between the two Houses of Congress with respect to the legislation, conferees shall be appointed and a conference convened. Not later than 15 days after the date on which conferees are appointed (excluding periods in which one or both Houses are in recess), the conferees shall file a report with the Senate and the House of Representatives resolving the differences between the Houses on the legislation. Notwithstanding any other rule of the Senate or the House of Representatives, it shall be in order to immediately consider a report of a committee of conference on the legislation filed in accordance with this subsection. Debate in the Senate and the House of Representatives on the conference report shall be limited to 10 hours, equally divided and controlled by the majority and minority leaders of the Senate or their designees and the Speaker of the House of Representatives and the minority leader of the House of Representatives or their designees. A vote on final passage of the conference report shall occur immediately at the conclusion or yielding back of all time for debate on the conference report.

(C)

Rules of the Senate and House of Representatives

This paragraph is enacted by Congress—

(i)

as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and is deemed to be part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of legislation under this section, and it supersedes other rules only to the extent that it is inconsistent with such rules; and

(ii)

with full recognition of the constitutional right of either House to change the rules (so far as they relate to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House.

(3)

Appropriate committees of Congress

In this subsection, the term appropriate committees of Congress means the Committee on Ways and Means, the Committee on Education and Labor, and the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance and the Committee on Health, Education, Labor and Pensions of the Senate.

(d)

Effective date

The amendments made by this section shall apply to taxable years ending after December 31, 2012.

1302.

Reporting of health insurance coverage

(a)

In general

Part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after subpart C the following new subpart:

D

Information regarding health insurance coverage

Sec. 6055. Reporting of health insurance coverage.

6055.

Reporting of health insurance coverage

(a)

In general

Every person who provides essential health benefits coverage to an individual during a calendar year shall, at such time as the Secretary may prescribe, make a return described in subsection (b).

(b)

Form and manner of return

(1)

In general

A return is described in this subsection if such return—

(A)

is in such form as the Secretary may prescribe, and

(B)

contains—

(i)

the name, address and TIN of the primary insured and the name of each other individual obtaining coverage under the policy,

(ii)

the dates during which such individual was covered under essential health benefits coverage during the calendar year,

(iii)

the amount (if any) of any advance payment under section 2248 of the Social Security Act of any cost-sharing subsidy under section 2247 of such Act or of any premium credit under section 36B with respect to such coverage, and

(iv)

such other information as the Secretary may require.

(2)

Information relating to employer-provided coverage

If essential health benefits coverage provided to an individual under subsection (a) consists of health insurance coverage of a health insurance issuer provided through a group health plan of an employer, a return described in this subsection shall include—

(A)

the name, address, and employer identification number of the employer maintaining the plan,

(B)

the portion of the premium (if any) required to be paid by the employer, and

(C)

if the health insurance coverage is a qualified health benefits plan in the small group market offered through an exchange, such other information as the Secretary may require for administration of the credit under section 45R (relating to credit for employee health insurance expenses of small employers).

(c)

Statements to be furnished to individuals with respect to whom information is reported

(1)

In general

Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing—

(A)

the name and address of the person required to make such return and the phone number of the information contact for such person, and

(B)

the information required to be shown on the return with respect to such individual.

(2)

Time for furnishing statements

The written statement required under paragraph (1) shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made.

(d)

Coverage provided by governmental units

In the case of coverage provided by any governmental unit or any agency or instrumentality thereof, the officer or employee who enters into the agreement to provide such coverage (or the person appropriately designated for purposes of this section) shall make the returns and statements required by this section.

(e)

Essential health benefits coverage

For purposes of this section, the term essential health benefits coverage has the meaning given such term by section 5000A(f).

.

(b)

Assessable penalties

(1)

Subparagraph (B) of section 6724(d)(1) of the Internal Revenue Code of 1986 (relating to definitions) is amended by striking or at the end of clause (xxii), by striking and at the end of clause (xxiii) and inserting or, and by inserting after clause (xxiii) the following new clause:

(xxiv)

section 6055 (relating to returns relating to information regarding health insurance coverage), and

.

(2)

Paragraph (2) of section 6724(d) of such Code is amended by striking or at the end of subparagraph (EE), by striking the period at the end of subparagraph (FF) and inserting , or and by inserting after subparagraph (FF) the following new subparagraph:

(GG)

section 6055(c) (relating to statements relating to information regarding health insurance coverage).

.

(c)

Conforming amendment

The table of subparts for part III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to subpart C the following new item:

SUBPART D—Information regarding health insurance coverage

.

(d)

Effective date

The amendments made by this section shall apply to calendar years beginning after 2012.

II

Employer Responsibility

1306.

Employer shared responsibility requirement

(a)

In general

Chapter 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

4980H.

Employer responsibility to provide health coverage

(a)

Imposition of excise tax

If—

(1)

an applicable large employer fails to meet the health insurance coverage requirements of subsection (c) with respect to its full-time employees, and

(2)

any such full-time employee of the employer is enrolled for any month during the period of such failure in a qualified health benefits plan with respect to which an applicable premium credit or cost-sharing subsidy is allowed or paid with respect to the employee,

there is hereby imposed on such failure with respect to each such employee for each such month a tax in the amount determined under subsection (b).
(b)

Amount of tax

(1)

In general

The tax determined under this subsection with respect to a failure involving an employee for any month described in subsection (a)(2) shall be equal to 1/12 of the dollar amount which the Secretary of Health and Human Services determines (on the basis of the most recent data available) is equal to the sum of the average annual credit allowed under section 36B and the average annual cost-sharing subsidy under section 2247 of the Social Security Act for taxable years beginning in the calendar year preceding the calendar year in which such month occurs. In the case of a month occurring during 2013, the Secretary shall determine the average annual credit and subsidy on the basis of the aggregate amount of credits and subsidies (expressed as an annual amount) for which applicants were determined eligible during the initial open enrollment period under section 2237(d)(2)(A) of the Social Security Act.

(2)

Overall limitation

(A)

In general

The aggregate amount of tax determined under paragraph (1) with respect to all employees of an applicable large employer for any month shall not exceed 1/12 of the product of—

(i)

$400, and

(ii)

the average number of full-time employees of the employer on business days during the calendar year preceding the calendar year in which such month occurs (determined in the same manner as under subsection (d)(1)).

(B)

Indexing

In the case of any calendar year after 2013, the $400 amount under subparagraph (A)(i) shall be increased by an amount equal to the product of—

(i)

$400, and

(ii)

the premium adjustment percentage (as defined in section 2242(c)(7) of the Social Security Act) for the calendar year.

If the amount of any increase under this subparagraph is not a multiple of $10, such increase shall be rounded to the next lowest multiple of $10.
(c)

Health insurance coverage requirements

For purposes of this section—

(1)

In general

An applicable large employer meets the health insurance coverage requirements of this subsection if the employer—

(A)

in the case of an employer in the small group market in a State, offers to its full-time employees (and their dependents) the opportunity to enroll in a qualified health benefits plan or a grandfathered health benefits plan, and

(B)

in the case of an employer in the large group market in a State, offers to its full-time employees (and their dependents) the opportunity to enroll in a group health plan meeting the requirements of section 2244 of the Social Security Act or a grandfathered health benefits plan.

(2)

Exception where coverage is unaffordable or fails to provide minimum value

An employer shall not be treated as meeting the requirements of this subsection with respect to any employee if—

(A)

the employee is eligible for the credit allowable under section 36B because the employee's required contribution under the plan described in paragraph (1) is determined to be unaffordable under section 36B(c)(2)(C), or

(B)

in the case of a plan (other than a qualified health benefits plan) offered under paragraph (1), the plan's share of the total allowed costs of benefits provided under the plan is less than 65 percent of such costs.

(d)

Definitions and special rules

For purposes of this section—

(1)

Applicable large employer

(A)

In general

The term applicable large employer means, with respect to a calendar year, an employer who employed an average of at least 50 employees on business days during the preceding calendar year.

(B)

Rules for determining employer size

For purposes of this paragraph—

(i)

Application of aggregation rule for employers

All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer.

(ii)

Employers not in existence in preceding year

In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is an applicable large employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.

(iii)

Predecessors

Any reference in this subsection to an employer shall include a reference to any predecessor of such employer.

(2)

Applicable premium credit and cost-sharing subsidy

The term applicable premium credit and cost-sharing subsidy means—

(A)

any premium credit allowed under section 36B (and any advance payment of the credit under section 2248 of the Social Security Act), and

(B)

any cost-sharing subsidy payment under section 2247 of such Act.

(3)

Full-time employee

(A)

In general

The term full-time employee means an employee who is employed on average at least 30 hours per week.

(B)

Special rules

The Secretary shall prescribe such regulations, rules, and guidance as may be necessary to apply this paragraph to employees who are not compensated on an hourly basis.

(4)

Other definitions

Any term used in this section which is also used in title XXII of the Social Security Act shall have the same meaning as when used in such title.

(5)

Tax nondeductible

For denial of deduction for the tax imposed by this section, see section 275(a)(6).

(e)

Time for payment of tax

The Secretary may provide for the payment of the tax imposed by this section on an annual, monthly, or other periodic basis as the Secretary may prescribe.

.

(b)

Clerical amendment

The table of sections for chapter 43 of such Code is amended by adding at the end the following new item:

Sec. 4980H. Employer responsibility to provide health coverage.

.

(c)

Study and report of effect of tax on workers' wages

(1)

In general

The Secretary of Labor shall conduct a study to determine whether employees' wages are reduced by reason of the application of the tax imposed under section 4980H of the Internal Revenue Code of 1986 (as added by the amendments made by this section). The Secretary shall make such determination on the basis of the National Compensation Survey published by the Bureau of Labor Statistics.

(2)

Report

The Secretary shall report the results of the study under paragraph (1) to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate.

(d)

Effective date

The amendments made by this section shall apply to periods beginning after June 30, 2013.

1307.

Reporting of employer health insurance coverage

(a)

In general

Subpart D of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986, as added by section 1302, is amended by inserting after section 6055 the following new section:

6056.

Large employers required to report on health insurance coverage

(a)

In general

Every applicable large employer required to meet the requirements of section 4980H(c) with respect to its full-time employees during a calendar year shall, at such time as the Secretary may prescribe, make a return described in subsection (b).

(b)

Form and manner of return

A return is described in this subsection if such return—

(1)

is in such form as the Secretary may prescribe, and

(2)

contains—

(A)

the name, date, and employer identification number of the employer,

(B)

a certification as to whether the employer offers to its full-time employees (and their dependents) the opportunity to enroll in a health benefits plan or a grandfathered health benefits plan described in section 4980H(c) and applicable to the employer,

(C)

if the employer certifies that the employer did offer to its full-time employees (and their dependents) the opportunity to so enroll—

(i)

the months during the calendar year for which coverage was available, and

(ii)

the monthly premium for the lowest cost option in each of the enrollment categories under each health benefits plan offered to employees,

(D)

the name, address, and TIN of each full-time employee during the calendar year and the months (if any) during which such employee (and any dependents) were covered under any such health benefits plans and,

(E)

such other information as the Secretary may require.

(c)

Statements to be furnished to individuals with respect to whom information is reported

(1)

In general

Every person required to make a return under subsection (a) shall furnish to each full-time employee whose name is required to be set forth in such return under subsection (b)(2)(D) a written statement showing—

(A)

the name and address of the person required to make such return and the phone number of the information contact for such person, and

(B)

the information required to be shown on the return with respect to such individual.

(2)

Time for furnishing statements

The written statement required under paragraph (1) shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made.

(d)

Coordination with other requirements

To the maximum extent feasible, the Secretary may provide that—

(1)

any return or statement required to be provided under this section may be provided as part of any return or statement required under section 6051 or 6055, and

(2)

in the case of an applicable large employer offering a health benefits plan of a health insurance issuer, the employer may enter into an agreement with the issuer to include information required under this section with the return and statement required to be provided by the issuer under section 6055.

(e)

Coverage provided by governmental units

In the case of any applicable large employer which is a governmental unit or any agency or instrumentality thereof, the person appropriately designated for purposes of this section shall make the returns and statements required by this section.

(f)

Definitions

For purposes of this section, any term used in this section which is also used in section 4980H shall have the meaning given such term by section 4980H.

.

(b)

Assessable penalties

(1)

Subparagraph (B) of section 6724(d)(1) of the Internal Revenue Code of 1986 (relating to definitions), as amended by section 1302, is amended by striking or at the end of clause (xxiii), by striking and at the end of clause (xxiv) and inserting or, and by inserting after clause (xxiv) the following new clause:

(xxv)

section 6056 (relating to returns relating to large employers required to report on health insurance coverage), and

.

(2)

Paragraph (2) of section 6724(d) of such Code, as so amended, is amended by striking or at the end of subparagraph (FF), by striking the period at the end of subparagraph (GG) and inserting , or and by inserting after subparagraph (GG) the following new subparagraph:

(HH)

section 6056(c) (relating to statements relating to large employers required to report on health insurance coverage).

.

(c)

Conforming amendment

The table of sections for subpart D of part III of subchapter A of chapter 61 of such Code, as added by section 1302, is amended by adding at the end the following new item:

Sec. 6056. Large employers required to report on health insurance coverage.

.

(d)

Effective date

The amendments made by this section shall apply to periods beginning after June 30, 2013.

E

Federal program for health care cooperatives

1401.

Establishment of Federal program for health care cooperatives

(a)

In general

Title XXII of the Social Security Act (as added by section 1001 and amended by sections 1101 and 1201) is amended by adding at the end the following:

D

Federal program for health care cooperatives

2251.

Federal program to assist establishment and operation of nonprofit, member-run health insurance issuers

(a)

Establishment of program

(1)

In general

The Secretary shall establish a program to carry out the purposes of this section to be known as the Consumer Operated and Oriented Plan (CO-OP) program.

(2)

Purpose

It is the purpose of the CO-OP program to foster the creation of qualified nonprofit health insurance issuers to offer qualified health benefits plans in the individual and small group markets in the States in which the issuers are licensed to offer such plans.

(b)

Loans and grants under the CO-OP program

(1)

In general

The Secretary shall provide through the CO-OP program for the awarding to persons applying to become qualified nonprofit health insurance issuers of—

(A)

loans to provide assistance to such person in meeting its start-up costs; and

(B)

grants to provide assistance to such person in meeting any solvency requirements of States in which the person seeks to be licensed to issue qualified health benefits plans.

(2)

Requirements for awarding loans and grants

(A)

In general

In awarding loans and grants under the CO-OP program, the Secretary shall—

(i)

take into account the recommendations of the advisory board established under paragraph (3);

(ii)

give priority to applicants that will offer qualified health benefits plans on a Statewide basis, will utilize integrated care models, and have significant private support; and

(iii)

ensure that there is sufficient funding to establish at least 1 qualified nonprofit health insurance issuer in each State, except that nothing in this clause shall prohibit the Secretary from funding the establishment of multiple qualified nonprofit health insurance issuers in any State if the funding is sufficient to do so.

(B)

States without issuers in program

If no health insurance issuer applies to be a qualified nonprofit health insurance issuer within a State, the Secretary may use amounts appropriated under this section for the awarding of grants to encourage the establishment of a qualified nonprofit health insurance issuer within the State or the expansion of a qualified nonprofit health insurance issuer from another State to the State.

(C)

Agreement

(i)

In general

The Secretary shall require any person receiving a loan or grant under the CO-OP program to enter into an agreement with the Secretary which requires such person to meet (and to continue to meet)—

(I)

any requirement under this section for such person to be treated as a qualified nonprofit health insurance issuer; and

(II)

any requirements contained in the agreement for such person to receive such loan or grant.

(ii)

Restrictions on use of Federal funds

The agreement shall include a requirement that no portion of the funds made available by any loan or grant under this section may be used—

(I)

for carrying on propaganda, or otherwise attempting, to influence legislation; or

(II)

for marketing.

Nothing in this clause shall be construed to allow a person to take any action prohibited by section 501(c)(29) of the Internal Revenue Code of 1986.
(iii)

Failure to meet requirements

If the Secretary determines that a person has failed to meet any requirement described in clause (i) or (ii) and has failed to correct such failure within a reasonable period of time of when the person first knows (or reasonably should have known) of such failure, such person shall repay to the Secretary an amount equal to the sum of—

(I)

110 percent of the aggregate amount of loans and grants received under this section; plus

(II)

interest on the aggregate amount of loans and grants received under this section for the period the loans or grants were outstanding.

The Secretary shall notify the Secretary of the Treasury of any determination under this section of a failure that results in the termination of an issuer's tax-exempt status under section 501(c)(29) of such Code.
(D)

Time for awarding loans and grants

The Secretary shall not later than January 1, 2012, award the loans and grants under the CO-OP program and begin the distribution of amounts awarded under such loans and grants.

(3)

Advisory board

(A)

In general

The advisory board under this paragraph shall consist of 15 members appointed by the Comptroller General of the United States from among individuals with qualifications described in section 1805(c)(2).

(B)

Rules relating to appointments

(i)

Standards

Any individual appointed under subparagraph (A) shall meet ethics and conflict of interest standards protecting against insurance industry involvement and interference.

(ii)

Original appointments

The original appointment of board members under subparagraph (A)(ii) shall be made no later than 3 months after the date of enactment of this title.

(C)

Vacancy

Any vacancy on the advisory board shall be filled in the same manner as the original appointment.

(D)

Pay and reimbursement

(i)

No compensation for members of advisory board

Except as provided in clause (ii), a member of the advisory board may not receive pay, allowances, or benefits by reason of their service on the board.

(ii)

Travel expenses

Each member shall receive travel expenses, including per diem in lieu of subsistence under subchapter I of chapter 57 of title 5, United States Code.

(E)

Application of FACA

The Federal Advisory Committee Act (5 U.S.C. App.) shall apply to the advisory board, except that section 14 of such Act shall not apply.

(F)

Termination

The advisory board shall terminate on the earlier of the date that it completes its duties under this section or December 31, 2015.

(c)

Qualified nonprofit health insurance issuer

For purposes of this section—

(1)

In general

The term qualified nonprofit health insurance issuer means a health insurance issuer that is an organization—

(A)

that is organized under State law as a nonprofit, member corporation;

(B)

substantially all of the activities of which consist of the issuance of qualified health benefits plans in the individual and small group markets in each State in which it is licensed to issue such plans; and

(C)

that meets the other requirements of this subsection.

(2)

Certain organizations prohibited

An organization shall not be treated as a qualified nonprofit health insurance issuer if—

(A)

the organization or a related entity (or any predecessor of either) was a health insurance issuer on July 16, 2009; or

(B)

the organization is sponsored by a State or local government, any political subdivision thereof, or any instrumentality of such government or political subdivision.

(3)

Governance requirements

An organization shall not be treated as a qualified nonprofit health insurance issuer unless—

(A)

the governance of the organization is subject to a majority vote of its members;

(B)

its governing documents incorporate ethics and conflict of interest standards protecting against insurance industry involvement and interference; and

(C)

as provided in regulations promulgated by the Secretary, the organization is required to operate with a strong consumer focus, including timeliness, responsiveness, and accountability to members.

(4)

Profits inure to benefit of members

An organization shall not be treated as a qualified nonprofit health insurance issuer unless any profits made by the organization are required to be used to lower premiums, to improve benefits, or for other programs intended to improve the quality of health care delivered to its members.

(5)

Compliance with State insurance laws

An organization shall not be treated as a qualified nonprofit health insurance issuer unless the organization meets all the requirements that other offerors of qualified health benefits are required to meet in any State where the issuer offers a qualified health benefits plan, including solvency and licensure requirements, rules on payments to providers, and compliance with network adequacy rules, rate and form filing rules, and any applicable State premium assessments.

(6)

Coordination with State insurance reforms

An organization shall not be treated as a qualified nonprofit health insurance issuer unless the organization does not offer a health benefits plan in a State until that State has in effect the Model Regulation, Federal standard, or State law described in section 2225(a)(2).

(d)

Establishment of private purchasing council

(1)

In general

Qualified nonprofit health insurance issuers participating in the CO-OP program under this section may establish a private purchasing council to enter into collective purchasing arrangements for items and services that increase administrative and other cost efficiencies, including claims administration, administrative services, health information technology, and actuarial services.

(2)

Council may not set payment rates

The private purchasing council established under paragraph (1) shall not set payment rates for health care facilities or providers participating in health insurance coverage provided by qualified nonprofit health insurance issuers.

(3)

Continued application of antitrust laws

(A)

In general

Nothing in this section shall be construed to limit the application of the antitrust laws to any private purchasing council (whether or not established under this subsection) or to any qualified nonprofit health insurance issuer participating in such a council.

(B)

Antitrust laws

For purposes of this subparagraph, the term antitrust laws has the meaning given the term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)). Such term also includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent that such section 5 applies to unfair methods of competition.

(e)

Limitation on participation

No representative of any Federal, State, or local government (or of any political subdivision or instrumentality thereof), and no representative of a person described in subsection (c)(2)(A), may serve on the board of directors of a qualified nonprofit health insurance issuer or with a private purchasing council established under subsection (d).

(f)

Limitations on Secretary

(1)

In general

The Secretary shall not—

(A)

participate in any negotiations between 1 or more qualified nonprofit health insurance issuers (or a private purchasing council established under subsection (d)) and any health care facilities or providers, including any drug manufacturer, pharmacy, or hospital; and

(B)

establish or maintain a price structure for reimbursement of any health benefits covered by such issuers.

(2)

Competition

Nothing in this section shall be construed as authorizing the Secretary to interfere with the competitive nature of providing health benefits through qualified nonprofit health insurance issuers.

(g)

State

For purposes of this section, the term State means each of the 50 States and the District of Columbia.

(h)

Appropriations

There are hereby appropriated, out of any funds in the Treasury not otherwise appropriated, $6,000,000,000 to carry out this section.

.

(b)

Tax exemption for qualified nonprofit health insurance issuer

(1)

In general

Section 501(c) of the Internal Revenue Code of 1986 (relating to list of exempt organizations) is amended by adding at the end the following:

(29)

CO-OP health insurance issuers

(A)

In general

A qualified nonprofit health insurance issuer (within the meaning of section 2251 of the Social Security Act) which has received a loan or grant under the CO-OP program under such section, but only with respect to periods for which the issuer is in compliance with the requirements of such section and any agreement with respect to the loan or grant.

(B)

Conditions for exemption

Subparagraph (A) shall apply to an organization only if—

(i)

the organization has given notice to the Secretary, in such manner as the Secretary may by regulations prescribe, that it is applying for recognition of its status under this paragraph,

(ii)

except as provided in section 2251(c)(4) of the Social Security Act, no part of the net earnings of which inures to the benefit of any private shareholder or individual,

(iii)

no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and

(iv)

the organization does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

.

(2)

Additional reporting requirement

Section 6033 of such Code (relating to returns by exempt organizations) is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following:

(m)

Additional information required from CO-OP insurers

An organization described in section 501(c)(29) shall include on the return required under subsection (a) the following information:

(1)

The amount of the reserves required by each State in which the organization is licensed to issue qualified health benefits plans.

(2)

The amount of reserves on hand.

.

(3)

Application of tax on excess benefit transactions

Section 4958(e)(1) of such Code (defining applicable tax-exempt organization) is amended by striking paragraph (3) or (4) and inserting paragraph (3), (4), or (29).

(c)

GAO Study and report

(1)

Study

The Comptroller General of the General Accountability Office shall conduct an ongoing study on competition and market concentration in the health insurance market in the United States after the implementation of the reforms in such market under the provisions of, and the amendments made by, this Act. Such study shall include an analysis of new offerors of health insurance in such market.

(2)

Report

The Comptroller General shall, not later than December 31 of each even-numbered year (beginning with 2014), report to the appropriate committees of the Congress the results of the study conducted under paragraph (1), including any recommendations for administrative or legislative changes the Comptroller General determines necessary or appropriate to increase competition in the health insurance market.

F

Transparency and accountability

1501.

Provisions ensuring transparency and accountability

(a)

In general

Title XXII of the Social Security Act, as added by subtitle A, is amended by adding at the end of subpart 4 of part A the following new section:

2229.

Requirements relating to transparency and accountability

(a)

Ombudsmen

Each State shall establish an ombudsmen program to address complaints related to health benefits plans issued within the State. Such program shall—

(1)

require each offeror of a health benefits plan within a State to provide an internal claims appeal process meeting the requirements of section 2226(e); and

(2)

authorize an individual covered by such a health benefits plan to have access to the services of an ombudsman—

(A)

if such an internal appeal lasts more than 3 months or involves a life threatening issue; or

(B)

to resolve problems with obtaining premium credits under section 36B of the Internal Revenue Code of 1986 or cost-sharing assistance under section 2247.

(b)

Health insurance consumer assistance grants

(1)

In general

Each State shall establish a program to provide grants to eligible entities to develop, support, and evaluate consumer assistance programs related to navigating options for health benefits plan coverage and selecting the appropriate health benefits plan coverage. Such program shall include a fair and open application process and shall attempt to ensure regional and geographic equity.

(2)

Data collection

As a condition of receiving a grant under paragraph (1), an organization shall be required to collect and report data to the Secretary on the types of problems and inquiries encountered by consumers served by the consumer assistance programs.

(3)

Funding

(A)

Initial funding

There is hereby appropriated to the Secretary, out of any funds in the Treasury not otherwise appropriated, $30,000,000 for the fiscal year 2014 to carry out this subsection. Such amount shall remain available without fiscal year limitation.

(B)

Authorization for subsequent years

There are authorized to be appropriated to the Secretary for each fiscal year following the fiscal year described in subparagraph (A) such sums as may be necessary to carry out this subsection.

(4)

Eligible entities

In this section, the term eligible entity means any public, private, or not-for-profit consumer assistance organizations. Such term includes—

(A)

any commercial fishing organization, any ranching or farming organization, or any other organization capable of conducting community-based health care outreach and enrollment assistance for workers who are hard to reach or employed in rural areas; and

(B)

any Small Business Development Center that is capable of assisting small businesses in getting access to health benefits plans.

.

(b)

Conforming amendment

The table of sections for subpart 4 of part A of title XXII of the Social Security Act, as added by subtitle A, is amended by adding at the end the following new item:

Sec. 2229. Requirements relating to transparency and accountability.

.

1502.

Reporting on utilization of premium dollars and standard hospital charges

(a)

Utilization of premium dollars

(1)

In general

Each offeror of a health benefits plan offering health insurance coverage within the United States shall, with respect to each plan year beginning after December 31, 2009, report to the Secretary of Health and Human Services the percentage of the premiums collected for such coverage that are used to pay for items other than medical care.

(2)

Secretarial authority

An offeror shall make the report under paragraph (1) at such time and in such manner as the Secretary of Health and Human Services may prescribe by regulations.

(b)

Standard hospital charges

Each hospital operating within the United States shall for each calendar year after 2009 establish (and update) a list of the hospital's standard charges for items and services provided by the hospital, including for each diagnosis-related group established under section 1886(d)(4) of the Social Security Act (42 U.S.C. 1395ww).

1503.

Development and utilization of uniform outline of coverage documents

(a)

In general

The Secretary of Health and Human Services shall request the National Association of Insurance Commissioners (referred to, in this section as the NAIC) to develop, and submit to the Secretary not later than 12 months after the date of enactment of this Act, standards for use by health insurance issuers in compiling and providing to enrollees an outline of coverage that accurately describes the coverage under the applicable health insurance plan. In developing such standards, the NAIC shall consult with a working group composed of representatives of consumer advocacy organizations, issuers of health insurance plans, and other qualified individuals.

(b)

Requirements

The standards for the outline of coverage developed under subsection (a) shall provide for the following:

(1)

Appearance

The standards shall ensure that the outline of coverage is presented in a uniform format that does not exceed 4 pages in length and does not include print smaller than 12-point font.

(2)

Language

The standards shall ensure that the language used is presented in a manner determined to be understandable by the average health plan enrollee.

(3)

Contents

The standards shall ensure that the outline of coverage includes—

(A)

the uniform definitions of standard insurance terms developed under section 1504;

(B)

a description of the coverage, including dollar amounts for coverage of—

(i)

daily hospital room and board;

(ii)

miscellaneous hospital services;

(iii)

surgical services;

(iv)

anesthesia services;

(v)

physician services;

(vi)

prevention and wellness services;

(vii)

prescription drugs; and

(viii)

other benefits, as identified by the NAIC;

(C)

the exceptions, reductions, and limitations on coverage;

(D)

the cost-sharing provisions, including deductible, coinsurance, and co-payment obligations;

(E)

the renewability and continuation of coverage provisions;

(F)

a statement that the outline is a summary of the policy or certificate and that the coverage document itself should be consulted to determine the governing contractual provisions; and

(G)

a contact number for the consumer to call with additional questions and a web link where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained.

For individual policies issued prior to January 1, 2014, the health insurance issuer will be deemed compliant with the web link requirement if the issuer makes a copy of the actual policy available upon request.
(c)

Regulations

(1)

Submission

If, not later than 12 months after the date of enactment of this Act, the NAIC submits to the Secretary of Health and Human Service the standards provided for under subsection (a), the Secretary shall, not later than 60 days after the date on which such standards are submitted, promulgate regulations to apply such standards to entities described in subsection (d)(3).

(2)

Failure to submit

If the NAIC fails to submit to the Secretary the standards under subsection (a) within the 12-month period provided for in paragraph (1), the Secretary shall, not later than 90 days after the expiration of such 12-month period, promulgate regulations providing for the application of Federal standards for outlines of coverage to entities described in subsection (d)(3).

(d)

Requirement to provide

(1)

In general

Not later than 24 months after the date of enactment of this Act, each entity described in paragraph (3) shall deliver an outline of coverage pursuant   to the standards promulgated by the Secretary under subsection (c) to—

(A)

an applicant at the time of application;

(B)

an enrollee at the time of enrollment; or

(C)

a policyholder or certificate holder at the time of issuance of the policy or delivery of the certificate.

(2)

Compliance

An entity described in paragraph (3) is deemed in compliance with this section if the outline of coverage is provided in paper or electronic form.

(3)

Entities in general

An entity described in this paragraph is—

(A)

a health insurance issuer (including a group health plan) offering health insurance coverage within the United States (including carriers under the Federal Employee Health Benefits Program under chapter 89 of title 5, United States Code); and

(B)

the Secretary with respect to coverage under the Medicare, Medicaid, and CHIP programs under titles XVIII, XIX, and XXI of the Social Security Act (42 U.S.C. 1395, 1396, 1397aa et seq.).

(e)

Preemption

The standards promulgated under subsection (c) shall preempt any related State standards that require an outline of coverage.

(f)

Failure to provide

An entity described in subsection (d)(3) that willfully fails to provide the information required under this section shall be subject to a fine of not more than $1,000 for each such failure. Such failure with respect to each enrollee shall constitute a separate offense for purposes of this subsection.

(g)

Definitions

For purposes of this section, any term used in this section that is also used in title XXII of the Social Security Act shall have the same meaning as when used in such title.

1504.

Development of standard definitions, personal scenarios, and annual personalized statements

(a)

Defining Insurance Terms

(1)

In general

The Secretary of Health and Human Services shall, by regulations, provide for the development of standards for the definitions of terms used in health insurance coverage, including insurance-related terms (including the insurance-related terms described in paragraph (2)) and medical terms (including the medical terms described in paragraph (3)).

(2)

Insurance-related terms

The insurance-related terms described in this paragraph are premium, deductible, co-insurance, co-payment, out-of-pocket limit, preferred provider, non-preferred provider, out-of-network co-payments, UCR (usual, customary and reasonable) fees, excluded services, grievance and appeals, and such other terms as the Secretary determines are important to define so that consumers may compare health insurance coverage and understand the terms of their coverage.

(3)

Medical terms

The medical terms described in this paragraph are hospitalization, hospital outpatient care, emergency room care, physician services, prescription drug coverage, durable medical equipment, home health care, skilled nursing care, rehabilitation services, hospice services, emergency medical transportation, and such other terms as the Secretary determines are important to define so that consumers may compare the medical benefits offered by insurance health insurance and understand the extent of those medical benefits (or exceptions to those benefits).

(b)

Coverage facts labels for patient claims scenarios

The Secretary of Health and Human Services shall, by regulations, develop standards for coverage facts labels based on patient claims scenarios described in the regulations, which include information on estimated out-of-pocket cost-sharing and significant exclusions or benefit limits for such scenarios.

(c)

Personalized statement

The Secretary of Health and Human Services shall, by regulations, develop standards for an annual personalized statement that summarizes use of health care services and payment of claims with respect to an enrollee (and covered dependents) under health insurance coverage in the preceding year.

G

Role of Public Programs

I

Medicaid Coverage for the Lowest Income Populations

1601.

Medicaid coverage for the lowest income populations

(a)

Coverage for individuals with income at or below 133 percent of the poverty line

(1)

Beginning 2014

Section 1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 1396a) is amended—

(A)

by striking or at the end of subclause (VI);

(B)

by adding or at the end of subclause (VII); and

(C)

by inserting after subclause (VII) the following:

(VIII)

beginning January 1, 2014, who are under 65 years of age, not pregnant, and are not described in a previous subclause of this clause, and whose income (as determined under subsection (e)(14)) does not exceed 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved, subject to subsection (k);

.

(2)

Coverage of, at a minimum, essential benefits; individuals with income exceeding 100, but less than 133 percent of the poverty line may elect subsidized exchange coverage instead of Medicaid

Section 1902 of such Act (42 U.S.C. 1396a) is amended by inserting after subsection (j) the following:

(k)
(1)

The medical assistance provided to an individual described in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of benchmark coverage described in section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2). Such medical assistance shall be provided subject to the requirements of section 1937, without regard to whether a State otherwise has elected the option to provide medical assistance through coverage under that section, unless an individual described in subclause (VIII) of subsection (a)(10)(A)(i) is also an individual for whom, under subparagraph (B) of section 1937(a)(2), the State may not require enrollment in benchmark coverage described in subsection (b)(1) of section 1937 or benchmark equivalent coverage described in subsection (b)(2) of that section, or the individual is a non-pregnant, non-elderly adult whose income exceeds 100, but does not exceed 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved, who has elected under section 1943(c) to enroll in a qualified health benefits plan through an exchange established by the State under section 2235.

.

(3)

Federal funding for cost of covering newly eligible individuals

Section 1905 of the Social Security Act (42 U.S.C. 1396d), is amended—

(A)

in subsection (b), in the first sentence, by inserting subsection (y) and before section 1933(d); and

(B)

by adding at the end the following new subsection:

(y)

Increased FMAP for medical assistance for newly eligible mandatory individuals

(1)

Amount of increase

(A)

Initial expansion period

(i)

In general

During the period that begins on January 1, 2014, and ends on December 31, 2018, notwithstanding subsection (b) and subject to subparagraphs (C) and (D) and section 1902(gg)(5), the Federal medical assistance percentage determined for a State that is one of the 50 States or the District of Columbia for each fiscal year quarter occurring during that period with respect to amounts expended for medical assistance for newly eligible individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be increased by the applicable percentage point increase specified in clause (ii) for the quarter and the State.

(ii)

Applicable percentage point increase

(I)

In general

For purposes of clause (i), the applicable percentage point increase for a quarter is the following:

For any fiscal year quarter occurring in the calendar year:If the State is an expansion State, the applicable percentage point increase is:If the State is not an expansion State, the applicable percentage point increase is:
201427.337.3
201528.336.3
201629.335.3
201730.334.3
201831.333.3
(II)

Expansion state defined

For purposes of the table in subclause (I), a State is an expansion State if, on the date of the enactment of the America's Healthy Future Act of 2009, the State offers health benefits coverage to parents and nonpregnant, childless adults whose income is at least 100 percent of the poverty line, that is not dependent on access to employer coverage or employment and is not limited to premium assistance, hospital-only benefits, a high deductible health plan (as defined in section 223(c)(2) of the Internal Revenue Code of 1986) purchased through a health savings account (as defined under section 223(d) of such Code), or alternative benefits under a demonstration program authorized under section 1938. A State that offers health benefits coverage to only parents or only nonpregnant childless adults described in the preceding sentence shall not be considered to be an expansion State.

(B)

2019 and succeeding years

Beginning January 1, 2019, notwithstanding subsection (b) but subject to subparagraph (C), the Federal medical assistance percentage determined for a State that is one of the 50 States or the District of Columbia for each fiscal year quarter occurring during that period with respect to amounts expended for medical assistance for newly eligible individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be increased by 32.3 percentage points.

(C)

Limitation

The Federal medical assistance percentage determined for a State under subparagraph (A) or (B) shall in no case be more than 95 percent.

(D)

High-need states

Notwithstanding subparagraph (A), in the case of a high-need State, during the period that begins on January 1, 2014, and ends on December 31, 2018, the Federal medical assistance percentage determined for each fiscal year quarter occurring during that period with respect to amounts expended for medical assistance for newly eligible individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be equal to 100 percent. For purposes of the preceding sentence, the term high-need State means a State that is one of the 50 States or the District of Columbia, on the date of the enactment of the America's Healthy Future Act of 2009, has a total Medicaid enrollment under the State plan under this title and under any waiver of the plan that is below the national average for Medicaid enrollment as a percentage of State population, and for August 2009, has a seasonally-adjusted unemployment rate that is at least 12 percent, as determined by the Bureau of Labor Statistics of the Department of Labor.

(2)

Definitions

In this subsection:

(A)

Newly eligible

The term newly eligible means, with respect to an individual described in subclause (VIII) of section 1902(a)(10)(A)(i), an individual who is not under 19 years of age (or such higher age as the State may have elected under section 1902(l)(1)(D)) and who, on the date of enactment of the America's Healthy Future Act of 2009, is not eligible under the State plan or under a waiver of the plan for full benefits or for benchmark coverage described in subparagraph (A), (B), or (C) of section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2) that has an aggregate actuarial value that is at least actuarially equivalent to benchmark coverage described in subparagraph (A), (B), or (C) of section 1937(b)(1), or is eligible but not enrolled (or is on a waiting list) for such benefits or coverage through a waiver under the plan that has a capped or limited enrollment that is full.

(B)

Full benefits

The term full benefits means, with respect to an individual, medical assistance for all services covered under the State plan under this title that is not less in amount, duration, or scope, or is determined by the Secretary to be substantially equivalent, to the medical assistance available for an individual described in section 1902(a)(10)(A)(i).

.

(4)

State option to offer coverage earlier and presumptive eligibility; children required to have coverage for parents to be eligible

Subsection (k) of section 1902 of the Social Security Act (as added by paragraph (2)), is amended by inserting after paragraph (1) the following:

(2)

A State may elect through a State plan amendment to provide medical assistance to individuals described in subclause (VIII) of subsection (a)(10)(A)(i) beginning with the first day of any fiscal year quarter that begins on or after January 1, 2011, and before January 1, 2014. A State may elect to phase-in the extension of eligibility for medical assistance to such individuals based on income, so long as the State does not extend such eligibility to individuals described in such subclause with higher income before making individuals described in such subclause with lower income eligible for medical assistance.

(3)

If the State has elected the option to provide for a period of presumptive eligibility under section 1920 or 1920A, the State may elect to provide for a period of presumptive eligibility for medical assistance (not to exceed 60 days) for individuals described in subclause (VIII) of subsection (a)(10)(A)(i) in the same manner as the State provides for such a period under that section, subject to such guidance as the Secretary shall establish.

(4)

If an individual described in subclause (VIII) of subsection (a)(10)(A)(i) is the parent of a child who is under 19 years of age (or such higher age as the State may have elected under section 1902(l)(1)(D)) who is eligible for medical assistance under the State plan or under a waiver of such plan, the individual may not be enrolled under the State plan unless the individual's child is enrolled under the State plan or under a waiver of the plan or is enrolled in other health insurance coverage. For purposes of the preceding sentence, the term parent includes an individual treated as a caretaker relative for purposes of carrying out section 1931 and a noncustodial parent.

.

(5)

Conforming amendments

(A)

Section 1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10)) is amended in the matter following subparagraph (G), by striking and (XIV) and inserting (XIV) and by inserting and (XV) the medical assistance made available to an individual described in subparagraph (A)(i)(VIII) shall be limited to medical assistance described in subsection (k)(1) before the semicolon.

(B)

Section 1902(l)(2)(C) of such Act (42 U.S.C. 1396a(l)(2)(C)) is amended by striking 100 and inserting 133.

(C)

Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is amended in the matter preceding paragraph (1)—

(i)

by striking or at the end of clause (xii);

(ii)

by inserting or at the end of clause (xiii); and

(iii)

by inserting after clause (xiii) the following:

(xiv)

individuals described in section 1902(a)(10)(A)(i)(VIII),

.

(D)

Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) is amended by inserting 1902(a)(10)(A)(i)(VIII), after 1902(a)(10)(A)(i)(VII),.

(E)

Section 1937(a)(1)(B) of such Act (42 U.S.C. 1396u–7(a)(1)(B)) is amended by inserting subclause (VIII) of section 1902(a)(10)(A)(i) or under after eligible under.

(b)

Maintenance of medicaid income eligibility

Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended—

(1)

in subsection (a)—

(A)

by striking and at the end of paragraph (72);

(B)

by striking the period at the end of paragraph (73) and inserting ; and; and

(C)

by inserting after paragraph (73) the following new paragraph:

(74)

provide for maintenance of effort under the State plan or under any waiver of the plan in accordance with subsection (gg).

; and

(2)

by adding at the end the following new subsection:

(gg)

Maintenance of effort

(1)

General requirement to maintain eligibility standards until state exchange is fully operational

Subject to the succeeding paragraphs of this subsection, during the period that begins on the date of enactment of the America's Healthy Future Act of 2009 and ends on the date on which the Secretary determines that an exchange established by the State under section 2235 is fully operational, as a condition for receiving any Federal payments under section 1903(a) for calendar quarters occurring during such period, a State shall not have in effect eligibility standards, methodologies, or procedures under the State plan under this title or under any waiver of such plan that is in effect during that period, that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under the plan or waiver that are in effect on the date of enactment of the America's Healthy Future Act of 2009.

(2)

Continuation of eligibility standards for adults with income at or below 133 percent of poverty until January 1, 2014

The requirement under paragraph (1) shall continue to apply to a State through December 31, 2013, with respect to the eligibility standards, methodologies, and procedures under the State plan under this title or under any waiver of such plan that are applicable to determining the eligibility for medical assistance of adults whose income does not exceed 133 percent of the poverty line (as defined in section 2110(c)(5)).

(3)

Continuation of eligibility standards for children until October 1, 2019

The requirement under paragraph (1) shall continue to apply to a State through September 30, 2019, with respect to the eligibility standards, methodologies, and procedures under the State plan under this title or under any waiver of such plan that are applicable to determining the eligibility for medical assistance of any child who is under 19 years of age (or such higher age as the State may have elected under section 1902(l)(1)(D)).

(4)

Nonapplication

During the period that begins on January 1, 2011, and ends on December 31, 2013, the requirement under paragraph (1) shall not apply to a State with respect to nonpregnant, nondisabled adults who are eligible for medical assistance under the State plan or under a waiver of the plan at the option of the State and whose income exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved if, on or after December 31, 2010, the State certifies to the Secretary that, with respect to the State fiscal year during which the certification is made, the State has a budget deficit, or with respect to the succeeding State fiscal year, the State is projected to have a budget deficit. Upon submission of such a certification to the Secretary, the requirement under paragraph (1) shall not apply to the State with respect to any remaining portion of the period described in the preceding sentence.

(5)

Additional federal financial participation

(A)

In general

During the period that begins on October 1, 2013, and ends on September 30, 2019, notwithstanding section 1905(b), the Federal medical assistance percentage otherwise determined for a State under such section with respect to a fiscal year for amounts expended for medical assistance for individuals who are not newly eligible (as defined in section 1905(y)(2)(A)) individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall—

(i)

in the case of a State that is one of the 50 States or the District of Columbia, be increased by 0.15 percentage point; and

(ii)

in the case of any other State, be increased by 0.075 percentage point.

(B)

Scope of application

The increase in the Federal medical assistance percentage for a State under subparagraph (A) shall apply only for purposes of this title and shall not apply with respect to—

(i)

disproportionate share hospital payments described in section 1923;

(ii)

payments under title IV;

(iii)

payments under title XXI; and

(iv)

payments under this title that are based on the enhanced FMAP described in section 2105(b).

(6)

Determination of compliance

(A)

States shall apply modified gross income

A State's determination of income in accordance with subsection (e)(14) shall not be considered to be eligibility standards, methodologies, or procedures that are more restrictive than the standards, methodologies, or procedures in effect under the State plan or under a waiver of the plan on the date of enactment of the America's Healthy Future Act of 2009 for purposes of determining compliance with the requirements of paragraph (1), (2), or (3).

(B)

States may expand eligibility or move waivered populations into coverage under the State plan

With respect to any period applicable under paragraph (1), (2), or (3), a State that applies eligibility standards, methodologies, or procedures under the State plan under this title or under any waiver of the plan that are less restrictive than the eligibility standards, methodologies, or procedures, applied under the State plan or under a waiver of the plan on the date of enactment of the America's Healthy Future Act of 2009, or that makes individuals who, on such date of enactment, are eligible for medical assistance under a waiver of the State plan, after such date of enactment eligible for medical assistance through a State plan amendment with an income eligibility level that is not less than the income eligibility level that applied under the waiver, or as a result of the application of subclause (VIII) of section 1902(a)(10)(A)(i), shall not be considered to have in effect eligibility standards, methodologies, or procedures that are more restrictive than the standards, methodologies, or procedures in effect under the State plan or under a waiver of the plan on the date of enactment of the America's Healthy Future Act of 2009 for purposes of determining compliance with the requirements of paragraph (1), (2), or (3).

.

(c)

Medicaid benchmark benefits must consist of at least essential benefits

Section 1937(b) of such Act (42 U.S.C. 1396u–7(b)) is amended—

(1)

in paragraph (1), in the matter preceding subparagraph (A), by inserting subject to paragraphs (5) and (6), before each;

(2)

in paragraph (2)—

(A)

in the mater preceding subparagraph (A), by inserting subject to paragraphs (5) and (6) after subsection (a)(1),;

(B)

in subparagraph (A)—

(i)

by redesignating clauses (iv) and (v) as clauses (v) and (vi), respectively; and

(ii)

by inserting after clause (iii), the following:

(IV)

Coverage of prescription drugs.

; and

(C)

in subparagraph (C)—

(i)

by striking clauses (i) and (ii); and

(ii)

by redesignating clauses (iii) and (iv) as clauses (i) and (ii), respectively; and

(3)

by adding at the end the following new paragraphs:

(5)

Minimum standards

Effective January 1, 2014, any benchmark benefit package under paragraph (1) or benchmark equivalent coverage under paragraph (2) must provide at least essential benefits described in section 2242 (as defined and specified annually by the Secretary in accordance with subsection (e) of that section).

(6)

Mental health services parity

(A)

In general

In the case of any benchmark benefit package under paragraph (1) or benchmark equivalent coverage under paragraph (2) that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan shall ensure that the financial requirements and treatment limitations applicable to such mental health or substance use disorder benefits comply with the requirements of section 2705(a) of the Public Health Service Act in the same manner as such requirements apply to a group health plan.

(B)

Deemed compliance

Coverage provided with respect to an individual described in section 1905(a)(4)(B) and covered under the State plan under section 1902(a)(10)(A) of the services described in section 1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services defined in section 1905(r)) and provided in accordance with section 1902(a)(43), shall be deemed to satisfy the requirements of subparagraph (A).

.

(d)

Annual reports on medicaid enrollment

(1)

State reports

Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is amended—

(A)

by striking and at the end of paragraph (73);

(B)

by striking the period at the end of paragraph (74) and inserting ; and; and

(C)

by inserting after paragraph (74) the following new paragraph:

(75)

provide that, beginning January 2015, and annually thereafter, the State shall submit a report to the Secretary that contains—

(A)

the total number of newly enrolled individuals in the State plan or under a waiver of the plan for the fiscal year ending on September 30 of the preceding calendar year, disaggregated by population, including children, parents, nonpregnant childless adults, disabled individuals, elderly individuals, and such other categories or sub-categories of individuals eligible for medical assistance under the State plan or under a waiver of the plan as the Secretary may require; and

(B)

a description of the outreach and enrollment processes used by the State during such fiscal year.

.

(2)

Reports to congress

Beginning April 2015, and annually thereafter, the Secretary of Health and Human Services shall submit a report to the appropriate committees of Congress on the total new enrollment in Medicaid for the fiscal year ending on September 30 of the preceding calendar year on a national and State-by-State basis, and shall include in each such report such recommendations for administrative or legislative changes to improve enrollment in the Medicaid program as the Secretary determines appropriate.

(e)

State option for coverage for individuals with income that exceeds 133 percent of the poverty line

(1)

Coverage as optional categorically needy group

Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended—

(A)

in subsection (a)(10)(A)(ii)—

(i)

in subclause (XVIII), by striking or at the end;

(ii)

in subclause (XIX), by adding or at the end; and

(iii)

by adding at the end the following new subclause:

(XX)

beginning January 1, 2014, who are under 65 years of age and are not described in a previous subclause of this clause, and whose income (as determined under subsection (e)(14)) exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved but does not exceed the highest income eligibility level established under the State plan or under a waiver of the plan, subject to subsection (hh);

and

(B)

by adding at the end the following new subsection:

(hh)
(1)

A State may elect to phase-in the extension of eligibility for medical assistance to individuals described in subclause (XX) of subsection (a)(10)(A)(ii) based on income, so long as the State does not extend such eligibility to individuals described in such subclause with higher income before making individuals described in such subclause with lower income eligible for medical assistance.

(2)

If the State has elected the option to provide for a period of presumptive eligibility under section 1920 or 1920A, the State may elect to provide for a period of presumptive eligibility for medical assistance (not to exceed 60 days) for individuals described in subclause (XX) of subsection (a)(10)(A)(ii) in the same manner as the State provides for such a period under that section, subject to such guidance as the Secretary shall establish.

(3)

If an individual described in subclause (XX) of subsection (a)(10)(A)(ii) is the parent of a child who is under 19 years of age (or such higher age as the State may have elected under section 1902(l)(1)(D)) who is eligible for medical assistance under the State plan or under a waiver of such plan, the individual may not be enrolled under the State plan unless the individual's child is enrolled under the State plan or under a waiver of the plan or is enrolled in other health insurance coverage. For purposes of the preceding sentence, the term parent includes an individual treated as a caretaker relative for purposes of carrying out section 1931 and a noncustodial parent.

.

(2)

Conforming amendments

(A)

Section 1905(a) of such Act (42 U.S.C. 1396d(a)), as amended by subsection (a)(5)(C), is amended in the matter preceding paragraph (1)—

(i)

by striking or at the end of clause (xiii);

(ii)

by inserting or at the end of clause (xiv); and

(iii)

by inserting after clause (xiv) the following:

(xv)

individuals described in section 1902(a)(10)(A)(ii)(XX),

.

(B)

Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) is amended by inserting 1902(a)(10)(A)(ii)(XX), after 1902(a)(10)(A)(ii)(XIX),.

1602.

Income eligibility for nonelderly determined using modified gross income

(a)

In general

Section 1902(e) of the Social Security Act (42 U.S.C. 1396a(e)) is amended by adding at the end the following:

(14)

Income determined using modified gross income

(A)

In general

Notwithstanding subsection (r) or any other provision of this title, except as provided in subparagraph (D), the modified gross income of an individual or family, as determined for purposes of allowing a premium credit assistance amount for the purchase of a qualified health benefits plan under section 36B of the Internal Revenue Code of 1986, shall be used for purposes of determining income eligibility for medical assistance under the State plan and under any waiver of such plan, and for any other purpose applicable under the plan or waiver for which a determination of income is required, including imposition of premiums and cost-sharing.

(B)

No income or expense disregards

No type of expense, block, or other income disregard shall be applied by a State in determining the modified gross income of an individual or family under the State plan or under a waiver of the plan.

(C)

No assets test

A State shall not apply any assets or resources test for purposes of determining the eligibility for medical assistance under the State plan or under a waiver of the plan of an individual or family.

(D)

Exceptions

(i)

Individuals eligible because of other aid or assistance, elderly individuals, medically needy individuals, individuals eligible for medicare cost-sharing, and optional targeted low-income children

Subparagraphs (A), (B), and (C) shall not apply to the determination of eligibility under the State plan or under a waiver for medical assistance for the following:

(I)

Individuals who are eligible for medical assistance under the State plan or under a waiver of the plan on a basis that does not require a determination of income by the State agency administering the State plan or waiver, including as a result of eligibility for, or receipt of, other Federal or State aid or assistance, individuals who are eligible on the basis of receiving (or being treated as if receiving) supplemental security income benefits under title XVI, and individuals who are eligible as a result of being or being deemed to be a child in foster care under the responsibility of the State.

(II)

Individuals who have attained age 65 or who are title II disability beneficiaries (as defined in section 1148(k)(3)).

(III)

Individuals described in subsection (a)(10)(C).

(IV)

Individuals described in any clause of subsection (a)(10)(E).

(V)

Optional targeted low-income children described in section 1905(u)(2)(B).

(ii)

Express lane agency findings

In the case of a State that elects the Express Lane option under paragraph (13), notwithstanding subparagraphs (A), (B), and (C), the State may rely on a finding made by an Express Lane agency in accordance with that paragraph relating to the income of an individual for purposes of determining the individual's eligibility for medical assistance under the State plan or under a waiver of the plan.

(iii)

Medicare prescription drug subsidies determinations

Subparagraphs (A), (B), and (C) shall not apply to any determinations of eligibility for premium and cost-sharing subsidies under and in accordance with section 1860D–14 made by the State pursuant to section 1935(a)(2).

(iv)

Long-term care

Subparagraphs (A), (B), and (C) shall not apply to any determinations of eligibility of individuals for purposes of medical assistance for services described in section 1917(c)(1)(C).

(v)

Grandfather of current enrollees until date of next regular redetermination

An individual who, on July 1, 2013, is enrolled in the State plan or under a waiver of the plan and who would be determined ineligible for medical assistance solely because of the application of the modified gross income standard described in subparagraph (A), shall remain eligible for medical assistance under the State plan or waiver (and subject to the same premiums and cost-sharing as applied to the individual on that date) through March 31, 2014, or the date on which the individual's next regularly scheduled redetermination of eligibility is to occur, whichever is later.

(E)

Limitation on secretarial authority

The Secretary shall not waive compliance with the requirements of this paragraph except to the extent necessary to permit a State to coordinate eligibility requirements for dual eligible individuals (as defined in section 1915(h)(2)(B)) under the State plan or under a waiver of the plan and under title XVIII and individuals who require the level of care provided in a hospital, a nursing facility, or an intermediate care facility for the mentally retarded.

.

(b)

Conforming amendment

Section 1902(a)(17) of such Act (42 U.S.C. 1396a(a)(17)) is amended by inserting (e)(14), before (l)(3).

(c)

Effective date

The amendments made by subsections (a) and (b) take effect on July 1, 2013.

1603.

Requirement to offer premium assistance for employer-sponsored insurance

(a)

In general

Section 1906A of such Act (42 U.S.C. 1396e–1) is amended—

(1)

in subsection (a)—

(A)

by striking may elect to and inserting shall;

(B)

by striking under age 19; and

(C)

by inserting , in the case of an individual under age 19, after (and;

(2)

in subsection (c), in the first sentence, by striking under age 19; and

(3)

in subsection (d)(2)—

(A)

in the first sentence, by striking under age 19; and

(B)

by striking the third sentence and inserting A State may not require, as a condition of an individual (or the individual's parent) being or remaining eligible for medical assistance under this title, that the individual (or the individual's parent) apply for enrollment in qualified employer-sponsored coverage under this section..

(b)

Conforming amendment

The heading for section 1906A of such Act (42 U.S.C. 1396e–1) is amended by striking option for children.

(c)

Effective date

The amendments made by this section take effect on July 1, 2013.

1604.

Payments to territories

(a)

Increase in limit on payments

Section 1108(g) of the Social Security Act (42 U.S.C. 1308(g)) is amended—

(1)

in paragraph (2), in the matter preceding subparagraph (A), by striking paragraph (3) and inserting paragraphs (3) and (5);

(2)

in paragraph (4), by striking and (3) and inserting (3), and (4); and

(3)

by adding at the end the following paragraph:

(5)

Fiscal year 2011 and thereafter

The amounts otherwise determined under this subsection for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa for the second, third, and fourth quarters of fiscal year 2011, and for each fiscal year after fiscal year 2011 (after the application of subsection (f) and the preceding paragraphs of this subsection), shall be increased by 30 percent.

.

(b)

Disregard of payments for mandatory expanded enrollment

Section 1108(g)(4) of such Act (42 U.S.C. 1308(g)) is amended—

(1)

by striking to fiscal years beginning and inserting “to—

(A)

fiscal years beginning

;

(2)

by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(B)

fiscal years beginning with fiscal year 2014, payments made to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa on the basis of the Federal medical assistance percentage as increased under section 1902(gg)(5), and payments made with respect to amounts expended for medical assistance for newly eligible (as defined in section 1905(y)(2)) nonpregnant childless adults who are eligible under subclause (VIII) of section 1902(a)(10)(A)(i) and whose income (as determined under section 1902(e)(14)) does not exceed (in the case of each such commonwealth and territory respectively) the income eligibility level in effect for that population under title XIX or under a waiver on the date of enactment of the America's Healthy Future Act of 2009, shall not be taken into account in applying subsection (f) (as increased in accordance with paragraphs (1), (2), (3), and (5) of this subsection) to such commonwealth or territory for such fiscal year.

.

(c)

Increased FMAP

(1)

In general

The first sentence of section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is amended by striking shall be 50 per centum and inserting shall be 55 percent.

(2)

Effective date

The amendment made by paragraph (1) takes effect on January 1, 2011.

1605.

Medicaid Improvement Fund rescission

(a)

Rescission

Any amounts available to the Medicaid Improvement Fund established under section 1941 of the Social Security Act (42 U.S.C. 1396w–1) for any of fiscal years 2014 through 2018 that are available for expenditure from the Fund and that are not so obligated as of the date of the enactment of this Act are rescinded.

(b)

Conforming amendments

Section 1941(b)(1) of the Social Security Act (42 U.S.C. 1396w–1(b)(1)) is amended—

(1)

in subparagraph (A), by striking $100,000,000 and inserting $0; and

(2)

in subparagraph (B), by striking $150,000,000 and inserting $0.

II

Children's Health Insurance Program

1611.

Additional federal financial participation for CHIP

(a)

In general

Section 2105(b) of the Social Security Act (42 U.S.C. 1397ee(b)) is amended by adding at the end the following: Notwithstanding the preceding sentence, during the period that begins on October 1, 2013, and ends on September 30, 2019, the enhanced FMAP determined for a State for a fiscal year (or for any portion of a fiscal year occurring during such period) shall be increased by 23 percentage points, but in no case shall exceed 100 percent. The increase in the enhanced FMAP under the preceding sentence shall not apply with respect to determining the payment to a State under subsection (a)(1) for expenditures described in subparagraph (D)(iv), paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first sentence of section 1905(b)..

(b)

Maintenance of effort

Section 2105(d) of the Social Security Act (42 U.S.C. 1397ee(d)) is amended by adding at the end the following:

(3)

Continuation of eligibility standards for children until October 1, 2019

During the period that begins on the date of enactment of the America's Healthy Future Act of 2009 and ends on September 30, 2019, a State shall not have in effect eligibility standards, methodologies, or procedures under its State child health plan (including any waiver under such plan) for children that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) as in effect on the date of enactment of that Act. The preceding sentence shall not be construed as preventing a State during such period from—

(A)

applying eligibility standards, methodologies, or procedures for children under the State child health plan or under any waiver of the plan that are less restrictive than the eligibility standards, methodologies, or procedures, respectively, for children under the plan or waiver that are in effect on the date of enactment of such Act; or

(B)

imposing a limitation described in section 2112(b)(7) for a fiscal year in order to limit expenditures under the State child health plan to those for which Federal financial participation is available under this section for the fiscal year.

.

(c)

No enrollment bonus payments for children enrolled after fiscal year 2013

Section 2105(a)(3)(F)(iii) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(F)(iii)) is amended by inserting or any children enrolled on or after October 1, 2013 before the period.

(d)

Application of streamlined enrollment system

Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end the following:

(M)

Section 1943(b) (relating to coordination with State health insurance exchanges and the State Medicaid agency).

.

1612.

Technical corrections

(a)

CHIPRA

Effective as if included in the enactment of the Children's Health Insurance Program Reauthorization Act of 2009 (Public Law 111–3) (in this section referred to as CHIPRA):

(1)

Section 2104(m) of the Social Security Act, as added by section 102 of CHIPRA, is amended—

(A)

by redesignating paragraph (7) as paragraph (8); and

(B)

by inserting after paragraph (6), the following:

(7)

Adjustment of fiscal years 2009 and 2010 allotments to account for changes in projected spending for certain previously approved expansion programs

In the case of one of the 50 States or the District of Columbia that has an approved State plan amendment effective January 1, 2006, to provide child health assistance through the provision of benefits under the State plan under title XIX for children from birth through age 5 whose family income does not exceed 200 percent of the poverty line, the Secretary shall increase the allotments otherwise determined for the State for fiscal years 2009 and 2010 under paragraphs (1) and (2)(A)(i) in order to take into account changes in the projected total Federal payments to the State under this title for such fiscal years that are attributable to the provision of such assistance to such children.

.

(2)

Section 605 of CHIPRA is amended by striking legal residents and insert lawfully residing in the United States.

(3)

Subclauses (I) and (II) of paragraph (3)(C)(i) of section 2105(a) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(ii)), as added by section 104 of CHIPRA, are each amended by striking , respectively.

(4)

Section 2105(a)(3)(E)(ii) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of CHIPRA, is amended by striking subclause (IV).

(5)

Section 2105(c)(9)(B) of the Social Security Act (42 U.S.C. 1397e(c)(9)(B)), as added by section 211(c)(1) of CHIPRA, is amended by striking section 1903(a)(3)(F) and inserting section 1903(a)(3)(G).

(6)

Section 2109(b)(2)(B) of the Social Security Act (42 U.S.C. 1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is amended by striking the child population growth factor under section 2104(m)(5)(B) and inserting a high-performing State under section 2111(b)(3)(B).

(7)

Section 211(a)(1)(B) of CHIPRA is amended—

(A)

by striking is amended and all that follows through adding and inserting is amended by adding; and

(B)

by redesignating the new subparagraph to be added by such section to section 1903(a)(3) of the Social Security Act as a new subparagraph (H).

(b)

ARRA

Effective as if included in the enactment of section 5006(a) of division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5), the second sentence of section 1916A(a)(1) of the Social Security Act (42 U.S.C. 1396o–1(a)(1)) is amended by striking or (i) and inserting , (i), or (j).

III

Enrollment Simplification

1621.

Enrollment Simplification and coordination with State health insurance exchanges

Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.) is amended by adding at the end the following:

1943.

Enrollment simplification and coordination with State health insurance exchanges

(a)

Condition for participation in medicaid

As a condition of the State plan under this title and receipt of any Federal financial assistance under section 1903(a) for calendar quarters beginning after January 1, 2013, a State shall ensure that the requirements of subsections (b), (c), and (d) are met.

(b)

Enrollment simplification and coordination with state health insurance exchanges and chip

(1)

In general

A State shall establish procedures for—

(A)

enabling individuals, through an Internet website that meets the requirements of paragraph (4), to apply for medical assistance under the State plan or under a waiver of the plan, to be enrolled in the State plan or waiver, to renew their enrollment in the plan or waiver, and to consent to enrollment or reenrollment in the State plan through electronic signature;

(B)

enrolling, without any further determination by the State and through such website, individuals who are identified by an exchange established by the State under section 2235 as being eligible for—

(i)

medical assistance under the State plan or under a waiver of the plan; or

(ii)

child health assistance under the State child health plan under title XXI;

(C)

ensuring that individuals who apply for but are determined to be ineligible for medical assistance under the State plan or a waiver or ineligible for child health assistance under the State child health plan under title XXI, are able to apply for, and be enrolled in, coverage through such an exchange and, if applicable, obtain premium assistance for the purchase of a qualified health benefits plan under section 36B of the Internal Revenue Code of 1986 (and, if applicable, advance payment of such assistance under section 2248 of this Act), without having to submit an additional or separate application, and receive information regarding any other assistance or subsidies available for coverage obtained through the exchange;

(D)

ensuring that the State agency responsible for administering the State plan under this title (in this section referred to as the State Medicaid agency), the State agency responsible for administering the State child health plan under title XXI (in this section referred to as the State CHIP agency) and an exchange established by the State under section 2235 utilize a secure electronic interface sufficient to allow for a determination of an individual's eligibility for such medical assistance, child health assistance, or premium assistance, as appropriate; and

(E)

coordinating, for individuals who are enrolled in the State plan or under a waiver of the plan and who are also enrolled in a qualified health benefits plan offered through such an exchange, and for individuals who are enrolled in the State child health plan under title XXI and who are also enrolled in a qualified health benefits plan, the provision of medical assistance or child health assistance to such individuals with the coverage provided under the qualified health benefits plan in which they are enrolled.

(2)

Agreements with state health insurance exchanges

The State Medicaid agency and the State CHIP agency may enter into an agreement with an exchange established by the State under section 2235 under which the State Medicaid agency or State CHIP agency may determine whether a State resident is eligible for premium assistance for the purchase of a qualified health benefits plan under section 36B of the Internal Revenue Code of 1986 (and, if applicable, advance payment of such assistance under section 2248 of this Act), so long as the agreement meets such conditions and requirements as the Secretary of the Treasury may prescribe to reduce administrative costs and the likelihood of eligibility errors and disruptions in coverage.

(3)

Streamlined enrollment system

The State Medicaid agency and State CHIP agency shall participate in and comply with the requirements for the system established under section 2239 (relating to streamlined procedures for enrollment through an exchange, Medicaid, and CHIP).

(4)

Enrollment website requirements

The procedures established by State under paragraph (1) shall include establishing and having in operation, not later than January 1, 2013, an Internet website that is linked to any website of an exchange established by the State under section 2235 and to the State CHIP agency (if different from the State Medicaid agency) and allows an individual who is eligible for medical assistance under the State plan or under a waiver of the plan and who is eligible to receive premium credit assistance for the purchase of a qualified health benefits plan under section 36B of the Internal Revenue Code of 1986 to compare the benefits, premiums, and cost-sharing applicable to the individual under the State plan or waiver with the benefits, premiums, and cost-sharing available to the individual under a qualified health benefits plan offered through such an exchange, including, in the case of a child, the coverage that would be provided for the child through the State plan or waiver with the coverage that would be provided to the child through enrollment in family coverage under that plan and as supplemental coverage by the State under the State plan or waiver.

(5)

Continued need for assessment for home and community-based services

Nothing in paragraph (1) shall limit or modify the requirement that the State assess an individual for purposes of providing home and community-based services under the State plan or under any waiver of such plan for individuals described in subsection (a)(10)(A)(ii)(VI).

(c)

Option for certain medicaid-eligible populations to elect subsidized exchange coverage

(1)

In general

The State shall establish procedures to ensure that a non-pregnant, nonelderly adult whose income exceeds 100, but does not exceed 133 percent of the poverty line (as defined in section 2110(c)(5)) who is eligible for medical assistance under the State plan or under a waiver of the plan and who is eligible to receive premium assistance for the purchase of a qualified health benefits plan under section 36B of the Internal Revenue Code of 1986 (and advance payment of the assistance under section 2248 of this Act) is—

(A)

provided with the option to elect to enroll themselves, or if applicable, their family, in such a plan through an exchange established by the State under section 2235 instead of enrolling in the State plan under this title or a waiver of the plan and, in the case of the adult, to waive, as a result of making such an election, receipt of any medical assistance (including medical assistance for premiums and cost-sharing) under the State plan or waiver;

(B)

provided with—

(i)

information, including through the State website established under section 1902(e)(15), comparing the benefits and cost-sharing that would be available under the State plan for the adult, and if applicable, the adult's family, with the benefits and cost-sharing available to the adult, and if applicable, the adult's family, through qualified health benefits plans offered through such an exchange (including with respect to the various levels of coverage available to the adult or family); and

(ii)

an explanation of the key differences between the benefits and cost-sharing available for the adult, and if applicable, the adult's family, under the State plan or a waiver and the benefits and cost-sharing available to the adult or family through qualified health benefits plans offered through such an exchange for each of the levels of coverage available to the adult or family; and

(C)

if the adult elects to enroll themselves or their family in a plan through such an exchange, provided with assistance in selecting and enrolling in such a plan.

(2)

Supplemental coverage, including EPSDT benefits, for children

The State shall establish procedures to ensure that any child who is eligible for medical assistance under the State plan or under a waiver who is enrolled in a qualified health benefits plan through such an exchange is provided with supplemental coverage for items and services for which medical assistance is available under the State plan or waiver and for which benefits are not available under the qualified health benefits plan in which the child is enrolled, including services described in section 1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services defined in section 1905(r)) and provided in accordance with the requirements of section 1902(a)(43) and medical assistance for premiums and cost-sharing imposed that exceed the amounts permitted under the State plan or waiver and to assure coordination of coverage for the child under the State plan or waiver and under the qualified health benefits plan in which the child is enrolled.

(3)

Waiver of receipt of medical assistance for electing adults

A nonpregnant, nonelderly adult whose income exceeds 100, but does not exceed 133 percent of the poverty line (as defined in section 2110(c)(5)) who elects to enroll in a qualified health benefits plan through an exchange established by the State under section 2235 shall waive, as a result of making such an election, being provided with medical assistance for themself (including medical assistance for premiums and cost-sharing) under the State plan or waiver while enrolled in the qualified health benefits plan.

(d)

State contribution for medicaid-eligible individuals electing coverage through a state exchange

(1)

In general

Each of the 50 States and the District of Columbia shall make an annual payment (beginning with 2014) to the Secretary equal to the sum of the following products determined with respect to each month of the preceding year for each population described in paragraph (2):

(A)

For each such month, the total number of individuals in the population eligible for medical assistance under the State plan or under a waiver of the plan for full benefits (as defined in section 1905(y)(2)(B)) who were enrolled in coverage through an exchange established by the State under section 2235 for any portion of the month.

(B)

Subject to paragraph (3), for each such month, the average cost of providing medical assistance for the population under the State plan or a waiver of the plan for the preceding year.

(C)

For each such month, the State percentage applicable under subsection (b) or (y) of section 1905 to expenditures for providing medical assistance to individuals within the population for that month.

(2)

Populations described

The populations described in this paragraph are the following:

(A)

Children.

(B)

Nondisabled, childless adults under age 65.

(C)

Nondisabled adults under age 65 who are parents.

(D)

Disabled, childless adults under age 65.

(E)

Disabled adults under age 65 who are parents.

(3)

Average cost of medical assistance for children

With respect to children, the average cost of providing medical assistance under the State plan or under a waiver of the plan for the preceding year shall be equal to the average cost of providing children under the State plan or waiver essential benefits described in section 2242 (as defined and specified by the Secretary for that year in accordance with subsection (e) of that section).

.

1622.

Permitting hospitals to make presumptive eligibility determinations for all Medicaid eligible populations

(a)

In general

Section 1902(a)(47) of the Social Security Act (42 U.S.C. 1396a(a)(47)) is amended—

(1)

by striking at the option of the State, provide and inserting “provide—

(A)

at the option of the State,

;

(2)

by inserting and after the semicolon; and

(3)

by adding at the end the following:

(B)

that any hospital that is a participating provider under the State plan may elect to be a qualified entity for purposes of determining, on the basis of preliminary information, whether any individual is eligible for medical assistance under the State plan or under a waiver of the plan for purposes of providing the individual with medical assistance during a presumptive eligibility period, in the same manner, and subject to the same requirements, as apply to the State options with respect to populations described in section 1920, 1920A, or 1920B (but without regard to whether the State has elected to provide for a presumptive eligibility period under any such sections), subject to such guidance as the Secretary shall establish;

.

(b)

Conforming amendment

Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 1396b(u)(1)(D)v)) is amended—

(1)

by striking or for and inserting for; and

(2)

by inserting before the period at the end the following: , or for medical assistance provided to an individual during a presumptive eligibility period resulting from a determination of presumptive eligibility made by a hospital that elects under section 1902(a)(47)(B) to be a qualified entity for such purpose.

(c)

Effective date

(1)

Except as provided in paragraph (2), the amendment made by subsection (a) shall apply to services furnished on or after January 1, 2014, without regard to whether or not final regulations to carry out such amendment have been promulgated by such date.

(2)

In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendment made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

1623.

Promoting transparency in the development, implementation, and evaluation of Medicaid and CHIP waivers and section 1937 State plan amendments

(a)

Waiver transparency

(1)

In general

Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended by inserting after subsection (c) the following:

(d)

In the case of any experimental, pilot, or demonstration project undertaken under subsection (a) to promote the objectives of title XIX or XXI in a State that would result in an impact on eligibility, enrollment, benefits, cost-sharing, or financing with respect to a State program under title XIX or XXI (in this subsection referred to as a Medicaid demonstration project and a CHIP demonstration project, respectively,) the following shall apply:

(1)

The Secretary may not approve a proposal for a Medicaid demonstration project, CHIP demonstration project, or a renewal of or an amendment to a previously approved Medicaid demonstration project or CHIP demonstration project unless the State requesting approval certifies that the following process was used to develop the proposal:

(A)

At least 30 days prior to publication of the notice required under subparagraph (C), the State provided notice (which may have been accomplished by electronic mail) of the State's intent to develop the proposal to the medical care advisory committee established for the State for purposes of complying with section 1902(a)(4) and any individual or organization that requests or has requested such notice.

(B)

Subsequent to providing the notice required under subparagraph (A) and prior to the notice required under subparagraph (C), the State convened at least 1 meeting of such medical care advisory committee at which the proposal and any modifications of the proposal were the primary items considered and discussed.

(C)

At least 60 days prior to the date that the State submits the proposal to the Secretary, the State published for written comment (in accordance with the State's procedure for issuing regulations) a notice of the proposal that contained at least the following:

(i)

Information regarding how the public may submit comments to the State on the proposal.

(ii)

A statement of the State's projections regarding the likely effect and impact of the proposal on any individuals who are then eligible for, or receiving, medical assistance, child health assistance, or other health benefits coverage under a State program under title XIX or XXI and the State's assumptions on which such projections are based.

(iii)

A statement of the likely fiscal impact of the proposal, including all relevant calculations, showing how Federal and State spending on the project will compare to the amount of Federal and State funds that would have been expended had the project not been implemented.

(D)

Concurrent with the publication of the notice required under subparagraph (C), the State—

(i)

posted the proposal (and any modifications of the proposal) on the State's official Medicaid or CHIP Internet website; and

(ii)

provided the notice required under subparagraph (B) (which may have been accomplished by electronic mail) to the medical care advisory committee referred to in subparagraph (A) and to any individual or organization that requested such notice.

(E)

Not later than 30 days after publication of the notice required under subparagraph (C), the State convened at least 1 open meeting of the medical care advisory committee referred to in subparagraph (A), at which the proposal and any modifications of the proposal were the primary items considered and discussed.

(F)

After publication of the notice required under subparagraph (C), the State—

(i)

held at least 2 public hearings on the proposal and any modifications of the proposal; and

(ii)

held the last such public hearing no more than 30 days before the State submitted the proposal to the Secretary.

(G)

The State has a record of all public comments submitted in response to the notice required under subparagraph (B) or at any hearings or meetings required under this paragraph regarding the proposal.

(2)

A State shall include with any proposal submitted to the Secretary for a Medicaid demonstration project, CHIP demonstration project, or a renewal of or an amendment to a previously approved Medicaid demonstration project or CHIP demonstration project, the following:

(A)

A detailed description of the public notice and input process used to develop the proposal in accordance with the requirements of paragraph (1).

(B)

Copies of all notices required under paragraph (1).

(C)

The dates of all meetings and hearings required under paragraph (1).

(D)

A summary of the public comments received in response to the notices required under paragraph (1) or at any hearings or meetings required under that paragraph regarding the proposal and the State's response to the comments.

(E)

A summary of any changes in the proposal that were made in response to the comments.

(F)

A certification that the State complied with any applicable notification requirements with respect to Indian tribes during the development of the proposal in accordance with paragraph (1).

(3)

The Secretary shall return to a State without action any proposal for a Medicaid demonstration project, CHIP demonstration project, or a renewal of or an amendment to a previously approved Medicaid demonstration project or CHIP demonstration project, that fails to demonstrate compliance with the requirements of paragraphs (1) and (2).

(4)

With respect to all proposals for Medicaid demonstration projects, CHIP demonstration projects, or renewal of or amendments to a previously approved Medicaid or CHIP demonstration project, received by the Secretary the following shall apply:

(A)

On or before the 10th day of each month, the Secretary shall publish a notice in the Federal Register identifying all of the proposals for such demonstration projects or amendments that were received by the Secretary during the preceding month.

(B)

The notice required under subparagraph (A) shall provide information regarding the method by which comments on the proposals will be received from the public.

(C)

Not later than 7 days after receipt of a proposal for a Medicaid demonstration project, CHIP demonstration project, or a renewal of or an amendment to a previously approved Medicaid or CHIP demonstration project, the Secretary shall—

(i)

provide notice (which may be accomplished by electronic mail) to any individual or organization that requests or has requested such notification;

(ii)

publish on the official Internet website of the Centers for Medicare & Medicaid Services a copy of the proposal, including any appendices or modifications of the proposal; and

(iii)

ensure that the information posted on the website is updated at least monthly to accurately reflect the current nature and status of the proposal.

(D)

The Secretary shall provide for a period of not less than 30 days from the later of the date of publication of the notice required under subparagraph (A) that first identifies receipt of the proposal or the date on which an official Internet website containing the information required under subparagraph (C)(ii) with respect to the proposal is first published, in which written comments on the proposal may be submitted from all interested parties.

(E)

After the completion of the public comment period required under subparagraph (D), if the Secretary intends to approve the proposal, as originally submitted or revised, the Secretary shall—

(i)

publish and post on the official Internet website for the Centers for Medicare & Medicaid Services the proposed terms and conditions for such approval and updated versions of the statements required to be published by the State under clauses (ii) and (iii) of paragraph (1)(C);

(ii)

provide at least a 15-day period for the submission of written comments from all interested parties on such proposed terms and conditions and such statements; and

(iii)

retain, and make available upon request, all comments received concerning the proposal, the terms and conditions for approval of the proposal, or the statements required to be published by the State under clauses (ii) and (iii) of paragraph (1)(C).

(F)

In no event may the Secretary approve a proposal for a Medicaid or CHIP demonstration project or renewal of or an amendment to a previously approved Medicaid or CHIP demonstration project unless the Secretary determines that the proposal, renewal, or the amendment—

(i)

is based on a reasonable hypothesis which the Secretary has determined is likely to assist in promoting the objectives of title XIX or XXI; and

(ii)

will be evaluated no less frequently than every 3 years in accordance with paragraph (6).

(G)

Not later than 3 business days after the approval of any proposal for a Medicaid demonstration project, CHIP demonstration project, or renewal of or amendment to a previously approved Medicaid or CHIP demonstration project, the Secretary shall post on the official Internet website for the Centers for Medicare & Medicaid Services the following:

(i)

The text of the approved Medicaid demonstration project, CHIP demonstration project, or renewal of or amendment to a previously approved Medicaid or CHIP demonstration project.

(ii)

A list identifying each provision of title XIX or XXI, and each regulation relating to either such title, for which compliance is waived under the approved demonstration project or amendment and any costs that would otherwise not be permitted that will be allowed under the demonstration project or amendment.

(iii)

The terms and conditions for approval of the demonstration project or amendment.

(iv)

The approval letter.

(v)

The operations protocol for the demonstration project or amendment.

(vi)

The evaluation design for the demonstration project or amendment.

(vii)

Any item required to be posted under this subparagraph that is not available within 3 business days of the approval of the demonstration project or amendment shall be posted as soon as the item becomes available,

(H)

On or before the 10th day of each month the Secretary shall publish a notice in the Federal Register that identifies any proposals for Medicaid demonstration projects, CHIP demonstration projects, or renewal of or amendments to a previously approved Medicaid or CHIP demonstration project that were approved, denied, or returned to the State without action during the preceding month.

(I)

The Secretary shall post on the official Internet website for the Centers for Medicare and Medicaid Services all quarterly reports submitted by the State (including data on whether the State is meeting its budget neutrality targets), evaluations, and other information the Secretary determines to be appropriate, on Medicaid or CHIP demonstration projects that are operational.

(5)

Any provision under title XIX or XXI, or under any regulation in effect that relates to either such title, that is not explicitly waived by the Secretary and identified in the list required under paragraph (4)(G)(ii) when approving the Medicaid demonstration project, CHIP demonstration project, or renewal of or amendment to any such demonstration project, is not waived and a State shall continue to comply with any such requirement.

(6)
(A)

In the case of a proposal for a Medicaid demonstration project or CHIP demonstration project, the Secretary shall, by contract with a qualified research organization described in subparagraph (B), conduct an independent evaluation consistent with the evaluation criteria described in subparagraph (C) applicable to the individual project.

(B)

A qualified research organization described in this subparagraph is an entity that the Secretary determines—

(i)

has staff with demonstrated expertise regarding Medicaid or CHIP beneficiaries, policies, and data systems (as applicable), and research design and methodology; and

(ii)

does not and did not in the past 24 months, by contract or subcontract, directly or indirectly, receive funds from the State that has proposed the demonstration project.

(C)

The evaluation criteria described in this subparagraph shall include, but not be limited to, the following:

(i)

The use of services by beneficiaries under the project.

(ii)

The amount of out-of-pocket costs for health care services incurred by beneficiaries under the project.

(iii)

The extent to which special populations such as adults with disabilities, adults with chronic illness, and children with special health care needs are able to access needed health care services.

(iv)

If children are enrolled in the project, the extent to which such children are able to access early and periodic screening, diagnostic, and treatment services described in section 1905(r).

(v)

The level of satisfaction of beneficiaries under the project with respect to the accessibility, quality, and cost of care, including the extent to which beneficiaries under the project understand the choices of health care coverage available to them.

(vi)

The cost of health care services incurred by the State agency administering the project, whether through fee-for-service payments, premium payments, or otherwise.

(vii)

Administrative costs incurred by the State agency administering the project and by any administrative contractors.

(D)

The Secretary shall not approve a proposal for a Medicaid demonstration project or a CHIP demonstration project, or a proposal for the extension of such a demonstration project, unless the State agency proposing to administer the demonstration project agrees to cooperate fully with the Secretary to the extent necessary to enable the Secretary to conduct the independent evaluation described in subparagraph (B) including collecting, verifying the accuracy of, and submitting to the organization on a timely basis data needed to conduct the independent evaluation.

(E)

The State agency administering the project shall be allowed at least 30 days prior to publication of the independent evaluation to submit comments to the Secretary, and the State agency’s comments shall be included in the results of the evaluation.

(F)

The results of all evaluations conducted under this paragraph with respect to a Medicaid demonstration project or CHIP demonstration project shall be submitted to the Committee on Finance of the Senate and the Committee on Energy and Commerce of the House of Representatives not later than 6 months prior to the completion of the initial term of a demonstration project and shall thereafter be posted on the official Internet website of the Centers for Medicare & Medicaid Services.

(G)

Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated to the Secretary, $4,500,000 for fiscal year 2010 and each fiscal year thereafter, for the purpose of carrying out the independent evaluations required under this paragraph. Amounts appropriated under this subparagraph for a fiscal year shall remain available until expended.

.

(2)

Rule of construction

Nothing in the amendment made by subsection (a) shall be construed to—

(A)

authorize the waiver of any provision of title XIX or XXI of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa et seq.) that is not otherwise authorized to be waived under such titles or under title XI of such Act (42 U.S.C. 1301 et seq.) as of the date of enactment of this Act; or

(B)

imply congressional approval of any experimental, pilot, or demonstration project affecting the Medicaid program under title XIX of the Social Security Act or the Children's health insurance program under title XXI of such Act that has been approved as of such date of enactment.

(b)

Transparency for certain state plan amendments

Section 1937 of such Act (42 U.S.C. 1396u–7) is amended by adding at the end the following:

(d)

State plan amendment approval requirements

In the case of any State plan amendment proposed under subsection (a) that would limit the benefits eligible individuals would receive, the following shall apply:

(1)

The Secretary may not approve a proposal for the amendment unless the State requesting approval certifies that the following process was used to develop the amendment:

(A)

Prior to publication of the notice required under subparagraph (B), the State—

(i)

provided notice (which may have been accomplished by electronic mail) of the State's intent to develop the State plan amendment to the medical care advisory committee established for the State for purposes of complying with section 1902(a)(4) and any individual or organization that requests such notice; and

(ii)

convened at least 1 meeting of such medical care advisory committee at which the State plan amendment was considered and discussed.

(B)

At least 60 days prior to the date that the State submits the State plan amendment to the Secretary, the State published for written comment (in accordance with the State's procedure for issuing regulations) a notice of the proposal that contains at least the following:

(i)

Information regarding how the public may submit comments to the State on the State plan amendment.

(ii)

A statement of the State's projections regarding the likely effect and impact of the proposal on any individuals who are eligible for, or receiving, medical assistance, under the State program under this title and the State's assumptions on which the projections are based.

(C)

Concurrent with the publication of the notice required under subparagraph (B), the State—

(i)

posted the State plan amendment on the State's official Medicaid or CHIP Internet website; and

(ii)

provided the notice (which may have been accomplished by electronic mail) to the medical care advisory committee referred to in subparagraph (A)(i) and to any individual or organization that requested such notice.

(D)

Not later than 30 days after publication of the notice required under subparagraph (B), the State convened at least 1 open meeting of the medical care advisory committee referred to in subparagraph (A)(i), at which the State plan amendment was considered and discussed.

(2)

A State shall include with any State plan amendment submitted to the Secretary for approval the following:

(A)

A detailed description of the public notice and input process used to develop the State plan amendment in accordance with the requirements of paragraph (1).

(B)

Copies of all notices required under paragraph (1).

(C)

The dates of all meetings required under paragraph (1).

(D)

A certification that the State complied with any applicable notification requirements with respect to Indian tribes during the development of the proposal in accordance with paragraph (1).

(3)

The Secretary shall return to a State without action any State plan amendment that fails to satisfy the requirements of paragraphs (1) and (2).

(4)

With respect to all State plan amendments submitted for approval to the Secretary under this section the following shall apply:

(A)

On or before the 10th day of each month the Secretary shall publish a notice in the Federal Register identifying all the State plan amendments submitted for approval during the preceding month.

(B)

The notice required under subparagraph (A) shall provide information regarding the method by which comments on the proposals will be received from the public.

(C)

Not later than 7 days after submission of a State plan amendment for approval the Secretary shall—

(i)

provide notice (which may be accomplished by electronic mail) to any individual or organization that has requested such notification; and

(ii)

publish on the official Internet website of the Centers for Medicare & Medicaid Services a copy of the State plan amendment.

(D)

The Secretary shall provide for a period of not less than 30 days from the later of the date of publication of the notice required under subparagraph (A) that first identifies receipt of the State plan amendment or the date on which an official Internet website containing the information required under subparagraph (C)(ii) with respect to the State plan amendment is first published, in which written comments on the State plan amendment may be submitted from all interested parties.

(E)

On or before the 10th day of each month the Secretary shall publish a notice in the Federal Register that identifies any State plan amendments that were approved, denied, or returned to the State without action during the preceding month.

.

(c)

Effective dates

(1)

Section 1115 requirements

Subject to paragraph (2), the amendment made by subsection (a) shall take effect on the date of enactment of this Act and shall apply to—

(A)

any proposal to conduct any experimental, pilot or demonstration project affecting the Medicaid program under title XIX of the Social Security Act or the State Children’s Health Insurance Program under title XXI of such Act that is pending on the date of enactment or that is submitted to the Secretary after the date of enactment;

(B)

any proposal to extend such a project that is pending on the date of enactment or that is submitted to the Secretary after the date of enactment; and

(C)

any proposal to amend such a project that is pending on the date of enactment or that is submitted to the Secretary after the date of enactment.

(2)

Evaluation requirements applicable to new waivers

The requirements of section 1115(d)(6) of the Social Security Act (relating to evaluation), as added by subsection (a), shall apply only to a proposal described in paragraph (1)(A) of this subsection.

(3)

Certain state plan amendments

The amendment made by subsection (b) shall take effect on the date of enactment of this Act and shall apply to any State plan amendment for which approval is pending on the date of enactment or that is submitted to the Secretary of Health and Human Services for approval after the date of enactment of this Act.

1624.

Standards and best practices to improve enrollment of vulnerable and underserved populations

(a)

In general

Not later than April 1, 2011, the Secretary of Health and Human Services shall issue guidance to States regarding standards and best practices for conducting outreach to and enrolling vulnerable and underserved populations eligible for medical assistance under Medicaid under title XIX of the Social Security Act or for child health assistance under CHIP under title XXI of such Act, including children, unaccompanied homeless youth, children and youth with special health care needs, pregnant women, racial and ethnic minorities, rural populations, victims of abuse or trauma, individuals with mental health or substance-related disorders, and individuals with HIV/AIDS.

(b)

Requirements

(1)

In general

The guidance issued under subsection (a) shall—

(A)

detail effective ways to inform vulnerable populations about coverage available under Medicaid and CHIP;

(B)

identify ways to assist vulnerable populations to enroll in the programs;

(C)

identify ways that application and enrollment barriers for such populations can be eliminated; and

(D)

address specific methods for outreach and enrollment, including outstationing of eligibility workers, the Express Lane eligibility option, residency requirements, documentation of income and assets, presumptive eligibility, continuous eligibility, and automatic renewal.

(2)

Development and implementation

The Secretary of Health and Human Services may use all available legal authority and shall work with appropriate stakeholders, including representatives of States and children’s groups, to ensure that the guidance issued under subsection (a) is developed and implemented effectively.

(3)

Report to congress

Not later than 2 years after the enactment of this Act and annually thereafter, the Secretary of Health and Human Services shall review and report to Congress on the progress made by States in implementing the standards and best practices identified in the guidance issued under subsection (a) and increasing the enrollment of vulnerable populations under Medicaid and CHIP.

IV

Medicaid Services

1631.

Coverage for freestanding birth center services

(a)

In general

Section 1905 of the Social Security Act (42 U.S.C. 1396d), is amended—

(1)

in subsection (a)—

(A)

in paragraph (27), by striking and at the end;

(B)

by redesignating paragraph (28) as paragraph (29); and

(C)

by inserting after paragraph (27) the following new paragraph:

(28)

freestanding birth center services (as defined in subsection (l)(3)(A)) and other ambulatory services that are offered by a freestanding birth center (as defined in subsection (l)(3)(B)) and that are otherwise included in the plan; and

; and

(2)

in subsection (l), by adding at the end the following new paragraph:

(3)
(A)

The term freestanding birth center services means services furnished to an individual at a freestanding birth center (as defined in subparagraph (B)) at such center.

(B)

The term freestanding birth center means a health facility—

(i)

that is not a hospital;

(ii)

where childbirth is planned to occur away from the pregnant woman’s residence;

(iii)

that is licensed or otherwise approved by the State to provide prenatal labor and delivery or postpartum care and other ambulatory services that are included in the plan; and

(iv)

that complies with such other requirements relating to the health and safety of individuals furnished services by the facility as the State shall establish.

(C)

A State shall provide separate payments to providers administering prenatal labor and delivery or postpartum care in a freestanding birth center (as defined in subparagraph (B)), such as nurse midwives and other providers of services such as birth attendants recognized under State law, as determined appropriate by the Secretary. For purposes of the preceding sentence, the term birth attendant means an individual who is recognized or registered by the State involved to provide health care at childbirth and who provides such care within the scope of practice under which the individual is legally authorized to perform such care under State law (or the State regulatory mechanism provided by State law), regardless of whether the individual is under the supervision of, or associated with, a physician or other health care provider. Nothing in this subparagraph shall be construed as changing State law requirements applicable to a birth attendant.

.

(b)

Conforming amendment

Section 1902(a)(10)(A) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the matter preceding clause (i) by striking and (21) and inserting , (21), and (28).

(c)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to services furnished on or after such date.

(2)

Exception if state legislation required

In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

1632.

Concurrent care for children

Section 1905(o)(1) of the Social Security Act (42 U.S.C. 1396d(o)(1)) is amended—

(1)

in subparagraph (A), by striking subparagraph (B) and inserting subparagraphs (B) and (C); and

(2)

by adding at the end the following new subparagraph:

(C)

A voluntary election to have payment made for hospice care for a child (as defined by the State) shall not constitute a waiver of any rights of the child to be provided with, or to have payment made under this title for, services that are related to the treatment of the child's condition for which a diagnosis of terminal illness has been made.

.

1633.

Funding to expand State Aging and Disability Resource Centers

Out of any funds in the Treasury not otherwise appropriated, there is appropriated to the Secretary of Health and Human Services, acting through the Assistant Secretary for Aging, $10,000,000 for each of fiscal years 2010 through 2014, to carry out subsections (a)(20)(B)(iii) and (b)(8) of section 202 of the Older Americans Act of 1965 (42 U.S.C. 3012).

1634.

Community First Choice Option

Section 1915 of the Social Security Act (42 U.S.C. 1396n) is amended by adding at the end the following:

(k)

State plan option to provide home and community-based attendant services and supports

(1)

In general

Subject to the succeeding provisions of this subsection, during the 5-year period that begins on January 1, 2014, a State may provide through a State plan amendment for the provision of medical assistance for home and community-based attendant services and supports for individuals who are eligible for medical assistance under the State plan whose income does not exceed 150 percent of the poverty line (as defined in section 2110(c)(5)) or, if greater, the income level applicable for an individual who has been determined to require an institutional level of care to be eligible for nursing facility services under the State plan and with respect to whom there has been a determination that, but for the provision of such services, the individuals would require the level of care provided in a hospital, a nursing facility, an intermediate care facility for the mentally retarded, or an institution for mental diseases, the cost of which could be reimbursed under the State plan, but only if the individual chooses to receive such home and community-based attendant services and supports, and only if the State meets the following requirements:

(A)

Availability

The State shall make available home and community-based attendant services and supports to eligible individuals, as needed, to assist in accomplishing activities of daily living, instrumental activities of daily living, and health-related tasks through hands-on assistance, supervision, or cueing—

(i)

under a person-centered plan of services and supports that is based on an assessment of functional need and that is agreed to in writing by the individual or, as appropriate, the individual’s representative;

(ii)

in a home or community setting, which does not include a nursing facility, institution for mental diseases, or an intermediate care facility for the mentally retarded;

(iii)

under an agency-provider model or other model (as defined in paragraph (6)(C )); and

(iv)

the furnishing of which—

(I)

is selected, managed, and dismissed by the individual, or, as appropriate, with assistance from the individual’s representative;

(II)

is controlled, to the maximum extent possible, by the individual or where appropriate, the individual’s representative, regardless of who may act as the employer of record; and

(III)

provided by an individual who is qualified to provide such services, including family members (as defined by the Secretary).

(B)

Included services and supports

In addition to assistance in accomplishing activities of daily living, instrumental activities of daily living, and health related tasks, the home and community-based attendant services and supports made available include—

(i)

the acquisition, maintenance, and enhancement of skills necessary for the individual to accomplish activities of daily living, instrumental activities of daily living, and health related tasks;

(ii)

back-up systems or mechanisms (such as the use of beepers or other electronic devices) to ensure continuity of services and supports; and

(iii)

voluntary training on how to select, manage, and dismiss attendants.

(C)

Excluded services and supports

Subject to subparagraph (D), the home and community-based attendant services and supports made available do not include—

(i)

room and board costs for the individual;

(ii)

special education and related services provided under the Individuals with Disabilities Education Act and vocational rehabilitation services provided under the Rehabilitation Act of 1973;

(iii)

assistive technology devices and assistive technology services other than those under (1)(B)(ii);

(iv)

medical supplies and equipment; or

(v)

home modifications.

(D)

Permissible services and supports

The home and community-based attendant services and supports may include—

(i)

expenditures for transition costs such as rent and utility deposits, first month’s rent and utilities, bedding, basic kitchen supplies, and other necessities required for an individual to make the transition from a nursing facility, institution for mental diseases, or intermediate care facility for the mentally retarded to a community-based home setting where the individual resides; and

(ii)

expenditures relating to a need identified in an individual’s person-centered plan of services that increase independence or substitute for human assistance, to the extent that expenditures would otherwise be made for the human assistance.

(2)

Increased federal financial participation

For purposes of payments to a State under section 1903(a)(1), with respect to amounts expended by the State to provide medical assistance under the State plan for home and community-based attendant services and supports to eligible individuals in accordance with this subsection during a fiscal year quarter occurring during the period described in paragraph (1), the Federal medical assistance percentage applicable to the State (as determined under sections 1905(b) and 1902(gg)(5)) shall be increased by 6 percentage points.

(3)

State requirements

In order for a State plan amendment to be approved under this subsection, the State shall—

(A)

develop and implement such amendment in collaboration with a Development and Implementation Council established by the State that includes a majority of members with disabilities, elderly individuals, and their representatives and consults and collaborates with such individuals;

(B)

provide consumer controlled home and community-based attendant services and supports to individuals on a statewide basis, in a manner that provides such services and supports in the most integrated setting appropriate to the individual’s needs, and without regard to the individual’s age, type or nature of disability, severity of disability, or the form of home and community-based attendant services and supports that the individual requires in order to lead an independent life;

(C)

with respect to expenditures during the first full fiscal year in which the State plan amendment is implemented, maintain or exceed the level of State expenditures for medical assistance that is provided under section 1905(a), section 1915, section 1115, or otherwise to individuals with disabilities or elderly individuals attributable to the preceding fiscal year;

(D)

establish and maintain a comprehensive, continuous quality assurance system with respect to community- based attendant services and supports that—

(i)

includes standards for agency-based and other delivery models with respect to training, appeals for denials and reconsideration procedures of an individual plan, and other factors as determined by the Secretary;

(ii)

incorporates feedback from consumers and their representatives, disability organizations, providers, families of disabled or elderly individuals, members of the community, and others and maximizes consumer independence and consumer control;

(iii)

monitors the health and well-being of each individual who receives home and community-based attendant services and supports, including a process for the mandatory reporting, investigation, and resolution of allegations of neglect, abuse, or exploitation in connection with the provision of such services and supports; and

(iv)

provides information about the provisions of the quality assurance required under clauses (i) through (iii) to each individual receiving such services; and

(E)

collect and report information, as determined necessary by the Secretary, for the purposes of approving the State plan amendment, providing Federal oversight, and conducting an evaluation under paragraph (5)(A), including data regarding how the State provides home and community-based attendant services and supports and other home and community-based services, the cost of such services and supports, and how the State provides individuals with disabilities who otherwise qualify for institutional care under the State plan or under a waiver the choice to instead receive home and community-based services in lieu of institutional care.

(4)

Compliance with certain laws

A State shall ensure that, regardless of whether the State uses an agency-provider model or other models to provide home and community-based attendant services and supports under a State plan amendment under this subsection, such services and supports are provided in accordance with the requirements of the Fair Labor Standards Act of 1938 and applicable Federal and State laws regarding—

(A)

withholding and payment of Federal and State income and payroll taxes;

(B)

the provision of unemployment and workers compensation insurance;

(C)

maintenance of general liability insurance; and

(D)

occupational health and safety.

(5)

Evaluation, data collection, and report to congress

(A)

Evaluation

The Secretary shall conduct an evaluation of the provision of home and community-based attendant services and supports under this subsection in order to determine the effectiveness of the provision of such services and supports in allowing the individuals receiving such services and supports to lead an independent life to the maximum extent possible; the impact on the physical and emotional health of the individuals who receive such services; and an comparative analysis of the costs of services provided under the State plan amendment under this subsection and those provided under institutional care in a nursing facility, institution for mental diseases, or an intermediate care facility for the mentally retarded.

(B)

Data collection

The State shall provide the Secretary with the following information regarding the provision of home and community-based attendant services and supports under this subsection for each fiscal year for which such services and supports are provided:

(i)

The number of individuals who are estimated to receive home and community-based attendant services and supports under this subsection during the fiscal year.

(ii)

The number of individuals that received such services and supports during the preceding fiscal year.

(iii)

The specific number of individuals served by type of disability, age, gender, education level, and employment status.

(iv)

Whether the specific individuals have been previously served under any other home and community based services program under the State plan or under a waiver.

(C)

Reports

Not later than—

(i)

December 31, 2017, the Secretary shall submit to Congress and make available to the public an interim report on the findings of the evaluation under subparagraph (A); and

(ii)

December 31, 2019, the Secretary shall submit to Congress and make available to the public a final report on the findings of the evaluation under subparagraph (A).

(6)

Definitions

In this subsection:

(A)

Activities of daily living

The term activities of daily living includes tasks such as eating, toileting, grooming, dressing, bathing, and transferring.

(B)

Consumer controlled

The term consumer controlled means a method of selecting and providing services and supports that allow the individual, or where appropriate, the individual’s representative, maximum control of the home and community-based attendant services and supports, regardless of who acts as the employer of record.

(C)

Delivery models

(i)

Agency-provider model

The term agency-provider model means, with respect to the provision of home and community-based attendant services and supports for an individual, subject to paragraph (4), a method of providing consumer controlled services and supports under which entities contract for the provision of such services and supports.

(ii)

Other models

The term other models means, subject to paragraph (4), methods, other than an agency-provider model, for the provision of consumer controlled services and supports. Such models may include the provision of vouchers, direct cash payments, or use of a fiscal agent to assist in obtaining services.

(D)

Health-related tasks

The term health-related tasks means specific tasks related to the needs of an individual, which can be delegated or assigned by licensed health-care professionals under State law to be performed by an attendant.

(E)

Individual's representative

The term individual's representative means a parent, family member, guardian, advocate, or other authorized representative of an individual

(F)

Instrumental activities of daily living

The term instrumental activities of daily living includes (but is not limited to) meal planning and preparation, managing finances, shopping for food, clothing, and other essential items, performing essential household chores, communicating by phone or other media, and traveling around and participating in the community.

.

1635.

Protection for recipients of home and community-based services against spousal impoverishment

During the 5-year period that begins on January 1, 2014, section 1924(h)(1)(A) of the Social Security Act (42 U.S.C. 1396r–5(h)(1)(A)) shall be applied as though is eligible for medical assistance for home and community-based services provided under subsection (c), (d), or (i) of section 1915, under a waiver approved under section 1115, or who is eligible for such medical assistance by reason of being determined eligible under section 1902(a)(10)(C) or by reason of section 1902(f) or otherwise on the basis of a reduction of income based on costs incurred for medical or other remedial care, or who is eligible for medical assistance for home and community-based attendant services and supports under section 1915(k) were substituted in such section for (at the option of the State) is described in section 1902(a)(10)(A)(ii)(VI).

1636.

Incentives for States to offer home and community-based services as a long-term care alternative to nursing homes

(a)

State balancing incentive payments program

Notwithstanding section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), in the case of a balancing incentive payment State, as defined in subsection (b), that meets the conditions described in subsection (c), during the balancing incentive period, the Federal medical assistance percentage determined for the State under section 1905(b) of such Act and increased under section 1902(gg)(5) shall be increased by the applicable percentage points determined under subsection (d) with respect to eligible medical assistance expenditures described in subsection (e).

(b)

Balancing incentive payment state

A balancing incentive payment State is a State—

(1)

in which less than 50 percent of the total expenditures for medical assistance under the State Medicaid program for fiscal year 2009 for long-term services and supports (as defined by the Secretary under subsection (f))(1)) are for non-institutionally-based long-term services and supports described in subsection (f)(1)(B);

(2)

that submits an application and meets the conditions described in subsection (c); and

(3)

that is selected by the Secretary to participate in the State balancing incentive payment program established under this section.

(c)

Conditions

The conditions described in this subsection are the following:

(1)

Application

The State submits an application to the Secretary that includes, in addition to such other information as the Secretary shall require—

(A)

a proposed budget that details the State's plan to expand and diversify medical assistance for non-institutionally-based long-term services and supports described in subsection (f)(1)(B) under the State Medicaid program during the balancing incentive period and achieve the target spending percentage applicable to the State under paragraph (2), including through structural changes to how the State furnishes such assistance, such as through the establishment of a no wrong door - single entry point system, optional presumptive eligibility, case management services, and the use of core standardized assessment instruments, and that includes a description of the new or expanded offerings of such services that the State will provide and the projected costs of such services; and

(B)

in the case of a State that proposes to expand the provision of home and community-based services under its State Medicaid program through a State plan amendment under section 1915(i) of the Social Security Act, at the option of the State, an election to increase the income eligibility for such services from 150 percent of the poverty line to such higher percentage as the State may establish for such purpose, not to exceed 300 percent of the supplemental security income benefit rate established by section 1611(b)(1) of the Social Security Act (42 U.S.C. 1382(b)(1)).

(2)

Target spending percentages

(A)

In the case of a balancing incentive payment State in which less than 25 percent of the total expenditures for home and community-based services under the State Medicaid program for fiscal year 2009 are for such services, the target spending percentage for the State to achieve by not later than October 1, 2015, is that 25 percent of the total expenditures for home and community-based services under the State Medicaid program are for such services.

(B)

In the case of any other balancing incentive payment State, the target spending percentage for the State to achieve by not later than October 1, 2015, is that 50 percent of the total expenditures for home and community-based services under the State Medicaid program are for such services.

(3)

Maintenance of eligibility requirements

The State does not apply eligibility standards, methodologies, or procedures for determining eligibility for medical assistance for non-institutionally-based long-term services and supports described in subsection (f)(1)(B) under the State Medicaid program that are more restrictive than the eligibility standards, methodologies, or procedures in effect for such purposes on December 31, 2010.

(4)

Use of additional funds

The State agrees to use the additional Federal funds paid to the State as a result of this section only for purposes of providing new or expanded offerings of non-institutionally-based long-term services and supports described in subsection (f)(1)(B) under the State Medicaid program.

(5)

Structural changes

The State agrees to make, not later than the end of the 6-month period that begins on the date the State submits an application under this section, the following changes:

(A)

No wrong door—single entry point system

Development of a statewide system to enable consumers to access all long-term services and supports through an agency, organization, coordinated network, or portal, in accordance with such standards as the State shall establish and that shall provide information regarding the availability of such services, how to apply for such services, and referral services for services and supports otherwise available in the community ; and determinations of financial and functional eligibility for such services and supports, or assistance with assessment processes for financial and functional eligibility.

(B)

Conflict-free case management services

Conflict-free case management services to develop a service plan, arrange for services and supports, support the beneficiary (and, if appropriate, the beneficiary's caregivers) in directing the provision of services and supports, for the beneficiary, and conduct ongoing monitoring to assure that services and supports are delivered to meet the beneficiary’s needs and achieve intended outcomes.

(C)

Core standardized assessment instruments

Development of core standardized assessment instruments for determining eligibility for non-institutionally-based long-term services and supports described in subsection (f)(1)(B), which shall be used in a uniform manner throughout the State, to determine a beneficiary’s needs for training, support services, medical care, transportation, and other services, and develop an individual service plan to address such needs.

(6)

Data collection

The State agrees to collect from providers of services and through such other means as the State determines appropriate the following data:

(A)

Services data

Services data from providers of non-institutionally-based long-term services and supports described in subsection (f)(1)(B) on a per-beneficiary basis and in accordance with such standardized coding procedures as the State shall establish in consultation with the Secretary.

(B)

Quality data

Quality data on a selected set of core quality measures agreed upon by the Secretary and the State that are linked to population-specific outcomes measures and accessible to providers.

(C)

Outcomes measures

Outcomes measures data on a selected set of core population-specific outcomes measures agreed upon by the Secretary and the State that are accessible to providers and include—

(i)

measures of beneficiary and family caregiver experience with providers;

(ii)

measures of beneficiary and family caregiver satisfaction with services; and

(iii)

measures for achieving desired outcomes appropriate to a specific beneficiary, including employment, participation in community life, health stability, and prevention of loss in function.

(d)

Applicable percentage points increase in FMAP

The applicable percentage points increase is—

(1)

in the case of a balancing incentive payment State subject to the target spending percentage described in subsection (c)(2)(A), 5 percentage points; and

(2)

in the case of any other balancing incentive payment State, 2 percentage points.

(e)

Eligible medical assistance expenditures

(1)

In general

Subject to paragraph (2), medical assistance described in this subsection is medical assistance for non-institutionally-based long-term services and supports described in subsection (f)(1)(B) that is provided by a balancing incentive payment State under its State Medicaid program during the balancing incentive payment period.

(2)

Limitation on payments

In no case may the aggregate amount of payments made by the Secretary to balancing incentive payment States under this section during the balancing incentive period exceed $3,000,000,000.

(f)

Definitions

In this section:

(1)

Long-term services and supports defined

The term long-term services and supports has the meaning given that term by Secretary and shall include the following (as defined with for purposes of State Medicaid programs under title XIX of the Social Security Act):

(A)

Institutionally-based long-term services and supports

Services provided in an institution, including the following:

(i)

Nursing facility services.

(ii)

Services in an intermediate care facility for the mentally retarded described in subsection (a)(15) of section 1905 of such Act.

(B)

Non-institutionally-based long-term services and supports

Services not provided in an institution, including the following:

(i)

Home and community-based services provided under subsection (c), (d), or (i), of section 1915 of such Act or under a waiver under section 1115 of such Act.

(ii)

Home health care services.

(iii)

Personal care services.

(iv)

Services described in subsection (a)(26) of section 1905 of such Act (relating to PACE program services).

(v)

Self-directed personal assistance services described in section 1915(j) of such Act.

(2)

Balancing incentive period

The term balancing incentive period means the period that begins on October 1, 2011, and ends on September 30, 2015.

(3)

Poverty line

The term poverty line has the meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)).

(4)

State medicaid program

The term State Medicaid program means the State program for medical assistance provided under a State plan under title XIX of the Social Security Act and under any waiver approved with respect to such State plan.

1636A.

Removal of barriers to providing home and community-based services

(a)

Oversight and assessment of the administration of home and community-based services

The Secretary of Health and Human Services shall promulgate regulations to ensure that all States develop service systems that are designed to—

(1)

allocate resources for services in a manner that is responsive to the changing needs and choices of beneficiaries receiving non-institutionally-based long-term services and supports described in section 1936(f)(1)(B) (including such services and supports that are provided under programs other the State Medicaid program), and that provides strategies for beneficiaries receiving such services to maximize their independence;

(2)

provide the support and coordination needed for a beneficiary in need of such services (and their family caregivers or representative, if applicable) to design an individualized, self-directed, community-supported life; and

(3)

improve coordination among all providers of such services under federally and State-funded programs in order to—

(A)

achieve a more consistent administration of policies and procedures across programs in relation to the provision of such services; and

(B)

oversee and monitor all service system functions to assure—

(i)

coordination of, and effectiveness of, eligibility determinations and individual assessments; and

(ii)

development and service monitoring of a complaint system, a management system, a system to qualify and monitor providers, and systems for role-setting and individual budget determinations.

(b)

Additional state options

Section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the following new paragraphs:

(6)

State option to provide home and community-based services to individuals eligible for services under a waiver

(A)

In general

A State that provides home and community-based services in accordance with this subsection to individuals who satisfy the needs-based criteria for the receipt of such services established under paragraph (1)(A) may, in addition to continuing to provide such services to such individuals, elect to provide home and community-based services in accordance with the requirements of this paragraph to individuals who are eligible for home and community-based services under a waiver approved for the State under subsection (c), (d), or (e) or under section 1115 to provide such services, but only for those individuals whose income does not exceed 300 percent of the supplemental security income benefit rate established by section 1611(b)(1).

(B)

Application of same requirements for individuals satisfying needs-based criteria

Subject to subparagraph (C), a State shall provide home and community-based services to individuals under this paragraph in the same manner and subject to the same requirements as apply under the other paragraphs of this subsection to the provision of home and community-based services to individuals who satisfy the needs-based criteria established under paragraph (1)(A).

(C)

Authority to offer different type, amount, duration, or scope of home and community-based services

A State may offer home and community-based services to individuals under this paragraph that differ in type, amount, duration, or scope from the home and community-based services offered for individuals who satisfy the needs-based criteria established under paragraph (1)(A), so long as such services are within the scope of services described in paragraph (4)(B) of subsection (c) for which the Secretary has the authority to approve a waiver and do not include room or board.

(7)

State option to offer home and community-based services to specific, targeted populations

(A)

In general

A State may elect in a State plan amendment under this subsection to target the provision of home and community-based services under this subsection to specific populations and to differ the type, amount, duration, or scope of such services to such specific populations.

(B)

5-year term

(i)

In general

An election by a State under this paragraph shall be for a period of 5 years.

(ii)

Phase-in of services and eligibility permitted during initial 5-year period

A State making an election under this paragraph may, during the first 5-year period for which the election is made, phase-in the enrollment of eligible individuals, or the provision of services to such individuals, or both, so long as all eligible individuals in the State for such services are enrolled, and all such services are provided, before the end of the initial 5-year period.

(C)

Renewal

An election by a State under this paragraph may be renewed for additional 5-year terms if the Secretary determines, prior to beginning of each such renewal period, that the State has—

(i)

adhered to the requirements of this subsection and paragraph in providing services under such an election; and

(ii)

met the State's objectives with respect to quality improvement and beneficiary outcomes.

.

(c)

Removal of limitation on scope of services

Paragraph (1) of section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as amended by subsection (a), is amended by striking or such other services requested by the State as the Secretary may approve.

(d)

Optional eligibility category To provide full medicaid benefits to individuals receiving home and community-based services under a State plan amendment

(1)

In general

Section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by section 1639(a)(1), is amended—

(A)

in subclause (XX), by striking or at the end;

(B)

in subclause (XXI), by adding or at the end; and

(C)

by inserting after subclause (XXI), the following new subclause:

(XXII)

who are eligible for home and community-based services under needs-based criteria established under paragraph (1)(A) of section 1915(i), or who are eligible for home and community-based services under paragraph (6) of such section, and who will receive home and community-based services pursuant to a State plan amendment under such subsection;

.

(2)

Conforming amendments

(A)

Section 1903(f)(4) of the Social Security Act (42 U.S.C. 1396b(f)(4)), as amended by section 1639(a)(4)(B), is amended in the matter preceding subparagraph (A), by inserting 1902(a)(10)(A)(ii)(XXII), after 1902(a)(10)(A)(ii)(XXI),.

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