Most commented sections:

• Paragraph 1 (13 comments)
• Paragraph 18 (3 comments)
• Paragraph 163 (3 comments)

HR 3400 IHCommentsClose CommentsPermalink

To provide for incentives to encourage health insurance coverage, and for other purposes.CommentsClose CommentsPermalink

July 30, 2009CommentsClose CommentsPermalink

Mr. PRICE of Georgia (for himself, Mr. AKIN, Mr. ALEXANDER, Mr. SCALISE, Mrs. BACHMANN, Mr. SOUDER, Mr. MILLER of Florida, Mr. BURTON of Indiana, Mr. JORDAN of Ohio, Mr. GINGREY of Georgia, Mr. ROE of Tennessee, Mr. CASSIDY, Mr. LAMBORN, Mr. FLEMING, Mrs. LUMMIS, Mr. WAMP, Mr. MARCHANT, Mr. ROONEY, Mr. COFFMAN of Colorado, and Ms. FALLIN) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and Labor, Oversight and Government Reform, the Judiciary, Rules, the Budget, and Appropriations, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

To provide for incentives to encourage health insurance coverage, and for other purposes.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the ‘Empowering Patients First Act’.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink

TITLE I--TAX INCENTIVES FOR MAINTAINING HEALTH INSURANCE COVERAGE

Sec. 101. Refundable tax credit for health insurance costs of low-income individuals.CommentsClose CommentsPermalink





Sec. 102. Advance payment of credit as premium payment for qualified health insurance.CommentsClose CommentsPermalink





Sec. 103. Election of tax credit instead of alternative government or group plan benefits.CommentsClose CommentsPermalink





Sec. 104. Deduction for qualified health insurance costs of individuals.CommentsClose CommentsPermalink





Sec. 105. Limitation on abortion funding.CommentsClose CommentsPermalink





Sec. 106. Non-discrimination on abortion and respect for rights of conscience.CommentsClose CommentsPermalink





Sec. 107. Equal employer contribution rule to promote choice.CommentsClose CommentsPermalink





Sec. 108. Limitations on State restrictions on employer auto-enrollment.CommentsClose CommentsPermalink





Sec. 109. Credit for small employers adopting auto-enrollment and defined contribution options.CommentsClose CommentsPermalink





Sec. 110. Require employers to disclose amounts paid for employer-provided health plan coverage.CommentsClose CommentsPermalink





Sec. 111. HSA modifications and clarifications.CommentsClose CommentsPermalink

TITLE II--HEALTH INSURANCE POOLING MECHANISMS FOR INDIVIDUALS

Subtitle A--Safety Net for Individuals With Pre-Existing Conditions

Sec. 201. Requiring operation of high-risk pool or other mechanism as condition for availability of tax credit.CommentsClose CommentsPermalink

Subtitle B--Federal Block Grants for State Insurance Expenditures

Sec. 211. Federal block grants for State insurance expenditures.CommentsClose CommentsPermalink

Subtitle C--Health Care Access and Availability

Sec. 221. Expansion of access and choice through individual membership associations (IMAs).CommentsClose CommentsPermalink

Subtitle D--Small Business Health Fairness

Sec. 231. Short title.CommentsClose CommentsPermalink





Sec. 232. Rules governing association health plans.CommentsClose CommentsPermalink





Sec. 233. Clarification of treatment of single employer arrangements.CommentsClose CommentsPermalink





Sec. 234. Enforcement provisions relating to association health plans.CommentsClose CommentsPermalink





Sec. 235. Cooperation between Federal and State authorities.CommentsClose CommentsPermalink





Sec. 236. Effective date and transitional and other rules.CommentsClose CommentsPermalink

TITLE III--INTERSTATE MARKET FOR HEALTH INSURANCE

Sec. 301. Cooperative governing of individual health insurance coverage.CommentsClose CommentsPermalink

TITLE IV--SAFETY NET REFORMS

Sec. 401. Requiring outreach and coverage before expansion of eligibility.CommentsClose CommentsPermalink





Sec. 402. Easing administrative barriers to State cooperation with employer-sponsored insurance coverage.CommentsClose CommentsPermalink





Sec. 403. Improving beneficiary choice in SCHIP.CommentsClose CommentsPermalink





Sec. 404. Liability protections for health center volunteer practitioners.CommentsClose CommentsPermalink





Sec. 405. Liability protections for health center practitioners providing services in emergency areas.CommentsClose CommentsPermalink

TITLE V--MEDICAL LIABILITY AND UNCOMPENSATED CARE REFORMS

Sec. 501. Short title.CommentsClose CommentsPermalink





Sec. 502. Findings and purpose.CommentsClose CommentsPermalink





Sec. 503. Encouraging speedy resolution of claims.CommentsClose CommentsPermalink





Sec. 504. Compensating patient injury.CommentsClose CommentsPermalink





Sec. 505. Maximizing patient recovery.CommentsClose CommentsPermalink





Sec. 506. Additional health benefits.CommentsClose CommentsPermalink





Sec. 507. Punitive damages.CommentsClose CommentsPermalink





Sec. 508. Authorization of payment of future damages to claimants in health care lawsuits.CommentsClose CommentsPermalink





Sec. 509. Definitions.CommentsClose CommentsPermalink





Sec. 510. Effect on other laws.CommentsClose CommentsPermalink





Sec. 511. State flexibility and protection of States’ rights.CommentsClose CommentsPermalink





Sec. 512. Applicability; effective date.CommentsClose CommentsPermalink





Sec. 513. Sense of Congress.CommentsClose CommentsPermalink





Sec. 514. State grants to create administrative health care tribunals.CommentsClose CommentsPermalink





Sec. 515. Affirmative defense based on compliance with best practice guidelines.CommentsClose CommentsPermalink





Sec. 516. Bad debt deduction for doctors to partially offset the cost of providing uncompensated care required to be provided under amendments made by the Emergency Medical Treatment and Labor Act.CommentsClose CommentsPermalink

TITLE VI--WELLNESS AND PREVENTION

Sec. 601. Providing financial incentives for treatment compliance.CommentsClose CommentsPermalink

TITLE VII--TRANSPARENCY AND INSURANCE REFORM MEASURES

Sec. 701. Receipt and response to requests for claim information.CommentsClose CommentsPermalink

TITLE VIII--QUALITY

Sec. 801. Prohibition on certain uses of data obtained from comparative effectiveness research; accounting for personalized medicine and differences in patient treatment response.CommentsClose CommentsPermalink





Sec. 802. Establishment of performance-based quality measures.CommentsClose CommentsPermalink

TITLE IX--STATE TRANSPARENCY PLAN PORTAL

Sec. 901. Providing information on health coverage options and health care providers.CommentsClose CommentsPermalink

TITLE X--PHYSICIAN PAYMENT REFORM

Sec. 1001. Sustainable growth rate reform.CommentsClose CommentsPermalink

TITLE XI--INCENTIVES TO REDUCE PHYSICIAN SHORTAGES

Subtitle A--Federally Supported Student Loan Funds for Medical Students

Sec. 1101. Federally Supported Student Loan Funds for Medical Students.CommentsClose CommentsPermalink

Subtitle B--Loan Forgiveness for Primary Care Providers

Sec. 1111. Loan forgiveness for primary care providers.CommentsClose CommentsPermalink

TITLE XII--OFFSETS

Subtitle A--Enforcing Discretionary Spending Limits

Sec. 1201. Enforcing discretionary spending limits.CommentsClose CommentsPermalink

Subtitle B--Repeal of Unused Stimulus Funds

Sec. 1211. Rescission and repeal in ARRA.CommentsClose CommentsPermalink

Subtitle C--Savings From Health Care Efficiencies

Sec. 1221. Medicare DSH report and payment adjustments in response to coverage expansion.CommentsClose CommentsPermalink





Sec. 1222. Reduction in Medicaid DSH.CommentsClose CommentsPermalink

Subtitle D--Fraud, Waste, and Abuse

Sec. 1231. Provide adequate funding to HHS OIG and HCFAC.CommentsClose CommentsPermalink





Sec. 1232. Improved enforcement of the Medicare secondary payor provisions.CommentsClose CommentsPermalink





Sec. 1233. Strengthen Medicare provider enrollment standards and safeguards.CommentsClose CommentsPermalink





Sec. 1234. Tracking banned providers across State lines.CommentsClose CommentsPermalink





Sec. 1235. Reinstate the Medicare trigger.CommentsClose CommentsPermalink

TITLE I--TAX INCENTIVES FOR MAINTAINING HEALTH INSURANCE COVERAGECommentsClose CommentsPermalink

SEC. 101. REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE COSTS OF LOW-INCOME INDIVIDUALS.

(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:CommentsClose CommentsPermalink

‘SEC. 36B. HEALTH INSURANCE COSTS OF LOW-INCOME INDIVIDUALS.

‘(a) In General- In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A the aggregate amount paid by the taxpayer for coverage of the taxpayer and the taxpayer’s qualifying family members under qualified health insurance for eligible coverage months beginning in the taxable year.CommentsClose CommentsPermalink





‘(b) Limitations-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The amount allowable as a credit under subsection (a) for the taxable year shall not exceed the lesser of--CommentsClose CommentsPermalink





‘(A) the sum of the monthly limitations for months during such taxable year that the taxpayer or the taxpayer’s qualifying family members is an eligible individual, andCommentsClose CommentsPermalink





‘(B) the aggregate premiums paid by the taxpayer for the taxable year for coverage described in subsection (a).CommentsClose CommentsPermalink





‘(2) MONTHLY LIMITATION- The monthly limitation for any month is the credit percentage of 1/12 of the sum of--CommentsClose CommentsPermalink





‘(A) $2,000 for coverage of the taxpayer ($4,000 in the case of a joint return for coverage of the taxpayer and the taxpayer’s spouse), andCommentsClose CommentsPermalink





‘(B) $500 for coverage of each dependent of the taxpayer.CommentsClose CommentsPermalink





‘(3) CREDIT PERCENTAGE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of this section, the term ‘credit percentage’ means 100 percent reduced by 1 percentage point for each $1,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds the threshold amount.CommentsClose CommentsPermalink





‘(B) THRESHOLD AMOUNT- For purposes of this paragraph, the term ‘threshold amount’ means, with respect to any taxpayer for any taxable year, 200 percent of the Federal poverty guideline (as determined by the Secretary of Health and Human Service for the taxable year) applicable to the taxpayer.CommentsClose CommentsPermalink





‘(4) ONLY 2 DEPENDENTS TAKEN INTO ACCOUNT- Not more than 2 dependents of the taxpayer may be taken into account under paragraphs (2)(C) and (3)(B).CommentsClose CommentsPermalink





‘(5) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2009, each dollar amount contained in paragraph (2) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(A) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2008’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50.CommentsClose CommentsPermalink





‘(c) Eligible Coverage Month- For purposes of this section, the term ‘eligible coverage month’ means, with respect to any individual, any month if, as of the first day of such month, the individual--CommentsClose CommentsPermalink





‘(1) is covered by qualified health insurance,CommentsClose CommentsPermalink





‘(2) does not have other specified coverage, andCommentsClose CommentsPermalink





‘(3) is not imprisoned under Federal, State, or local authority.CommentsClose CommentsPermalink





‘(d) Qualifying Family Member- For purposes of this section, the term ‘qualifying family member’ means--CommentsClose CommentsPermalink





‘(1) in the case of a joint return, the taxpayer’s spouse, andCommentsClose CommentsPermalink





‘(2) any dependent of the taxpayer.CommentsClose CommentsPermalink





‘(e) Qualified Health Insurance- For purposes of this section, the term ‘qualified health insurance’ means health insurance coverage (other than excepted benefits as defined in section 9832(c)) which constitutes medical care.CommentsClose CommentsPermalink





‘(f) Other Specified Coverage- For purposes of this section, an individual has other specified coverage for any month if, as of the first day of such month--CommentsClose CommentsPermalink





‘(1) COVERAGE UNDER MEDICARE, MEDICAID, OR SCHIP- Such individual--CommentsClose CommentsPermalink





‘(A) is entitled to benefits under part A of title XVIII of the Social Security Act or is enrolled under part B of such title, orCommentsClose CommentsPermalink





‘(B) is enrolled in the program under title XIX or XXI of such Act (other than under section 1928 of such Act).CommentsClose CommentsPermalink





‘(2) CERTAIN OTHER COVERAGE- Such individual--CommentsClose CommentsPermalink





‘(A) is enrolled in a health benefits plan under chapter 89 of title 5, United States Code,CommentsClose CommentsPermalink





‘(B) is entitled to receive benefits under chapter 55 of title 10, United States Code,CommentsClose CommentsPermalink





‘(C) in entitled to receive benefits under chapter 17 of title 38, United States Code, orCommentsClose CommentsPermalink





‘(D) is enrolled in a group health plan (within the meaning of section 5000(b)(1)) which is subsidized by the employer.CommentsClose CommentsPermalink





‘(g) Special Rules-CommentsClose CommentsPermalink





‘(1) COORDINATION WITH ADVANCE PAYMENTS OF CREDIT; RECAPTURE OF EXCESS ADVANCE PAYMENTS- With respect to any taxable year--CommentsClose CommentsPermalink





‘(A) the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a) shall be reduced (but not below zero) by the aggregate amount paid on behalf of such taxpayer under section 7529 for months beginning in such taxable year, andCommentsClose CommentsPermalink





‘(B) the tax imposed by section 1 for such taxable year shall be increased by the excess (if any) of--CommentsClose CommentsPermalink





‘(i) the aggregate amount paid on behalf of such taxpayer under section 7529 for months beginning in such taxable year, overCommentsClose CommentsPermalink





‘(ii) the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a).CommentsClose CommentsPermalink





‘(2) COORDINATION WITH OTHER DEDUCTIONS- Amounts taken into account under subsection (a) shall not be taken into account in determining--CommentsClose CommentsPermalink





‘(A) any deduction allowed under section 162(l), 213, or 224, orCommentsClose CommentsPermalink





‘(B) any credit allowed under section 35.CommentsClose CommentsPermalink





‘(3) MEDICAL AND HEALTH SAVINGS ACCOUNTS- Amounts distributed from an Archer MSA (as defined in section 220(d)) or from a health savings account (as defined in section 223(d)) shall not be taken into account under subsection (a).CommentsClose CommentsPermalink





‘(4) DENIAL OF CREDIT TO DEPENDENTS AND NONPERMANENT RESIDENT ALIEN INDIVIDUALS- No credit shall be allowed under this section to any individual who is--CommentsClose CommentsPermalink





‘(A) not a citizen or lawful permanent resident of the United States for the calendar year in which the taxable year begins, orCommentsClose CommentsPermalink





‘(B) a dependent with respect to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.CommentsClose CommentsPermalink





‘(5) INSURANCE WHICH COVERS OTHER INDIVIDUALS- For purposes of this section, rules similar to the rules of section 213(d)(6) shall apply with respect to any contract for qualified health insurance under which amounts are payable for coverage of an individual other than the taxpayer and qualifying family members.CommentsClose CommentsPermalink





‘(6) TREATMENT OF PAYMENTS- For purposes of this section--CommentsClose CommentsPermalink





‘(A) PAYMENTS BY SECRETARY- Payments made by the Secretary on behalf of any individual under section 7529 (relating to advance payment of credit for health insurance costs of low-income individuals) shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made.CommentsClose CommentsPermalink





‘(B) PAYMENTS BY TAXPAYER- Payments made by the taxpayer for eligible coverage months shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made.CommentsClose CommentsPermalink





‘(7) REGULATIONS- The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, section 6050W, and section 7529.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting ‘36B,’ after ‘36A,’.CommentsClose CommentsPermalink





(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:CommentsClose CommentsPermalink





‘Sec. 36B. Health insurance costs of low-income individuals.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink





(d) Sense of Congress- It is the sense of Congress that the cost of the advanceable refundable credit under sections 36B and 7529 of the Internal Revenue Code of 1986, as added by this title, will be offset by savings derived from the provisions of title XII.CommentsClose CommentsPermalink

SEC. 102. ADVANCE PAYMENT OF CREDIT AS PREMIUM PAYMENT FOR QUALIFIED HEALTH INSURANCE.

(a) In General- Chapter 77 of the Internal Revenue Code of 1986 (relating to miscellaneous provisions) is amended by adding at the end the following:CommentsClose CommentsPermalink

‘SEC. 7529. ADVANCE PAYMENT OF CREDIT AS PREMIUM PAYMENT FOR QUALIFIED HEALTH INSURANCE.

‘(a) General Rule- Not later than January 1, 2010, the Secretary shall establish a program for making payments to providers of qualified health insurance (as defined in section 36B(e)) on behalf of taxpayers eligible for the credit under section 36B. Except as otherwise provided by the Secretary, such payments shall be made on the basis of the adjusted gross income of the taxpayer for the preceding taxable year.CommentsClose CommentsPermalink





‘(b) Certification Process and Proof of Coverage- For purposes of this section, payments may be made pursuant to subsection (a) only with respect to individuals for whom a qualified health insurance costs credit eligibility certificate is in effect.’.CommentsClose CommentsPermalink





(b) Disclosure of Return Information for Purposes of Advance Payment of Credit as Premiums for Qualified Health Insurance-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (l) of section 6103 of such Code is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(21) DISCLOSURE OF RETURN INFORMATION FOR PURPOSES OF ADVANCE PAYMENT OF CREDIT AS PREMIUMS FOR QUALIFIED HEALTH INSURANCE- The Secretary may, on behalf of taxpayers eligible for the credit under section 36B, disclose to a provider of qualified health insurance (as defined in section 36(e)), and persons acting on behalf of such provider, return information with respect to any such taxpayer only to the extent necessary (as prescribed by regulations issued by the Secretary) to carry out the program established by section 7529 (relating to advance payment of credit as premium payment for qualified health insurance).’.CommentsClose CommentsPermalink





(2) CONFIDENTIALITY OF INFORMATION- Paragraph (3) of section 6103(a) of such Code is amended by striking ‘or (20)’ and inserting ‘(20), or (21)’.CommentsClose CommentsPermalink





(3) UNAUTHORIZED DISCLOSURE- Paragraph (2) of section 7213(a) of such Code is amended by striking ‘or (20)’ and inserting ‘(20), or (21)’.CommentsClose CommentsPermalink





(c) Information Reporting-CommentsClose CommentsPermalink





(1) IN GENERAL- Subpart B of part III of subchapter A of chapter 61 of such Code (relating to information concerning transactions with other persons) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 6050X. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COSTS OF LOW-INCOME INDIVIDUALS.

‘(a) Requirement of Reporting- Every person who is entitled to receive payments for any month of any calendar year under section 7529 (relating to advance payment of credit as premium payment for qualified health insurance) with respect to any individual shall, at such time as the Secretary may prescribe, make the return described in subsection (b) with respect to each such individual.CommentsClose CommentsPermalink





‘(b) Form and Manner of Returns- A return is described in this subsection if such return--CommentsClose CommentsPermalink





‘(1) is in such form as the Secretary may prescribe, andCommentsClose CommentsPermalink





‘(2) contains--CommentsClose CommentsPermalink





‘(A) the name, address, and TIN of each individual referred to in subsection (a),CommentsClose CommentsPermalink





‘(B) the number of months for which amounts were entitled to be received with respect to such individual under section 7529 (relating to advance payment of credit as premium payment for qualified health insurance),CommentsClose CommentsPermalink





‘(C) the amount entitled to be received for each such month, andCommentsClose CommentsPermalink





‘(D) such other information as the Secretary may prescribe.CommentsClose CommentsPermalink





‘(c) Statements To Be Furnished to Individuals With Respect to Whom Information Is Required- 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--CommentsClose CommentsPermalink





‘(1) the name and address of the person required to make such return and the phone number of the information contact for such person, andCommentsClose CommentsPermalink





‘(2) the information required to be shown on the return with respect to such individual.CommentsClose CommentsPermalink





The written statement required under the preceding sentence shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) is required to be made.’.CommentsClose CommentsPermalink





(2) ASSESSABLE PENALTIES-CommentsClose CommentsPermalink





(A) Subparagraph (B) of section 6724(d)(1) of such Code (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:CommentsClose CommentsPermalink





‘(xxiv) section 6050X (relating to returns relating to credit for health insurance costs of low-income individuals), and’.CommentsClose CommentsPermalink





(B) 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 adding after subparagraph (FF) the following new subparagraph:CommentsClose CommentsPermalink





‘(GG) section 6050X (relating to returns relating to credit for health insurance costs of low-income individuals).’.CommentsClose CommentsPermalink





(d) Clerical Amendments-CommentsClose CommentsPermalink





(1) The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 7529. Advance payment of credit as premium payment for qualified health insurance.’.CommentsClose CommentsPermalink





(2) The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 6050X. Returns relating to credit for health insurance costs of low-income individuals.’.CommentsClose CommentsPermalink





(e) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 103. ELECTION OF TAX CREDIT INSTEAD OF ALTERNATIVE GOVERNMENT OR GROUP PLAN BENEFITS.

(a) In General- Notwithstanding any other provision of law, an individual who is otherwise eligible for benefits under a health program (as defined in subsection (c)) may elect, in a form and manner specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury, to receive a tax credit described in section 36B of the Internal Revenue Code of 1986 (which may be used for the purpose of health insurance coverage) in lieu of receiving any benefits under such program.CommentsClose CommentsPermalink





(b) Effective Date- An election under subsection (a) may first be made for calendar year 2010 and any such election shall be effective for such period (not less than one calendar year) as the Secretary of Health and Human Services shall specify, in consultation with the Secretary of the Treasury.CommentsClose CommentsPermalink





(c) Health Program Defined- For purposes of this section, the term ‘health program’ means any of the following:CommentsClose CommentsPermalink





(1) MEDICARE- The medicare program under part A of title XVIII of the Social Security Act.CommentsClose CommentsPermalink





(2) MEDICAID- The Medicaid program under title XIX of such Act (including such a program operating under a Statewide waiver under section 1115 of such Act).CommentsClose CommentsPermalink





(3) SCHIP- The State children’s health insurance program under title XXI of such Act.CommentsClose CommentsPermalink





(4) TRICARE- The TRICARE program under chapter 55 of title 10, United States Code.CommentsClose CommentsPermalink





(5) VETERANS BENEFITS- Coverage for benefits under chapter 17 of title 38, United States Code.CommentsClose CommentsPermalink





(6) FEHBP- Coverage under chapter 89 of title 5, United States Code.CommentsClose CommentsPermalink





(7) SUBSIDIZED GROUP HEALTH PLANS- Coverage under a group health plan (within the meaning of section 5000(b)(1)) which is subsidized by the employer.CommentsClose CommentsPermalink





(d) Other Social Security Benefits Not Waived- An election to waive the benefits described in subsection (c)(1) shall not result in the waiver of any other benefits under the Social Security Act.CommentsClose CommentsPermalink

SEC. 104. DEDUCTION FOR QUALIFIED HEALTH INSURANCE COSTS OF INDIVIDUALS.

(a) In General- Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions) is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:CommentsClose CommentsPermalink

‘SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE.

‘(a) In General- In the case of an individual, there shall be allowed as a deduction an amount equal to the amount paid during the taxable year for coverage for the taxpayer, his spouse, and dependents under qualified health insurance.CommentsClose CommentsPermalink





‘(b) Limitation- In the case of any taxpayer for any taxable year, the deduction under subsection (a) shall not exceed an amount that would cause the taxpayer’s Federal income tax liability to be reduced by more than the average value of the national health exclusion for employer sponsored insurance as determined by calculating the value of the exclusion for each household followed by calculating the average of those values.CommentsClose CommentsPermalink





‘(c) Qualified Health Insurance- For purposes of this section, the term ‘qualified health insurance’ has the meaning given such term by section 36B(e).CommentsClose CommentsPermalink





‘(d) Special Rules-CommentsClose CommentsPermalink





‘(1) COORDINATION WITH MEDICAL DEDUCTION, ETC- Any amount paid by a taxpayer for insurance to which subsection (a) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 162(l) or 213(a). Any amount taken into account in determining the credit allowed under section 35 or 36B shall not be taken into account for purposes of this section.CommentsClose CommentsPermalink





‘(2) DEDUCTION NOT ALLOWED FOR SELF-EMPLOYMENT TAX PURPOSES- The deduction allowable by reason of this section shall not be taken into account in determining an individual’s net earnings from self-employment (within the meaning of section 1402(a)) for purposes of chapter 2.’.CommentsClose CommentsPermalink





(b) Deduction Allowed in Computing Adjusted Gross Income- Subsection (a) of section 62 of such Code is amended by inserting before the last sentence the following new paragraph:CommentsClose CommentsPermalink





‘(22) COSTS OF QUALIFIED HEALTH INSURANCE- The deduction allowed by section 224.’.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as an item relating to section 225 and inserting before such item the following new item:CommentsClose CommentsPermalink





‘Sec. 224. Costs of qualified health insurance.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink

SEC. 105. LIMITATION ON ABORTION FUNDING.

No funds authorized under this Act (or any amendment made by this Act) may be used to pay for any abortion or to cover any part of the costs of any health plan that includes coverage of abortion, except in the case where a woman suffers from a physical disorder, physical injury, or physical illness that would, as certified by a physician, place the woman in danger of death unless an abortion is performed, including a life-endangering physical condition caused by or arising from the pregnancy itself, or unless the pregnancy is the result of an act of forcible rape or incest.CommentsClose CommentsPermalink

SEC. 106. NON-DISCRIMINATION ON ABORTION AND RESPECT FOR RIGHTS OF CONSCIENCE.

(a) Non-discrimination- A Federal agency or program, and any State or local government that receives Federal financial assistance, may not subject any individual or institutional health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions.CommentsClose CommentsPermalink





(b) Definition- In this section, the term ‘health care entity’ includes an individual physician or other health care professional, a hospital, a provider-sponsored organization, a health maintenance organization, a health insurance plan, or any other kind of health care facility, organization, or plan.CommentsClose CommentsPermalink





(c) Administration- The Office for Civil Rights of the Department of Health and Human Services is designated to receive complaints of discrimination based on this section, and coordinate the investigation of such complaints.CommentsClose CommentsPermalink





(d) Conscientious Objection- Nothing in this Act shall be construed as forbidding a health plan or health insurance issuer to accommodate the conscientious objection of a purchaser or an individual or institutional health care provider when a procedure is contrary to the religious beliefs or moral convictions of such purchaser or provider.CommentsClose CommentsPermalink

SEC. 107. EQUAL EMPLOYER CONTRIBUTION RULE TO PROMOTE CHOICE.

(a) Excise Tax for Failure To Provide Contribution Election- Section 5000 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(e) Health Care Contribution Election-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Subsection (a) shall not apply in the case of a group health plan with respect to which the requirements of paragraphs (2) and (3) are met.CommentsClose CommentsPermalink





‘(2) CONTRIBUTION ELECTION- The requirement of this paragraph is met with respect to a group health plan if any employee of an employer (who but for this paragraph would be covered by such plan) may elect to have the employer or employee organization pay an amount which is not less than the contribution amount to any provider of insurance (other than excepted benefits as defined in section 9832(c)(1)) which constitutes medical care of the individual or individual’s spouse or dependents in lieu of such group health plan coverage otherwise provided or contributed to by the employer with respect to such employee.CommentsClose CommentsPermalink





‘(3) PRE-EXISTING CONDITIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The requirement of this paragraph is met with respect to health insurance coverage provided to a participant or beneficiary by any health insurance issuer if, under such plan the requirements of section 9801 are met with respect to the participant or beneficiary.CommentsClose CommentsPermalink





‘(B) ENFORCEMENT WITH RESPECT TO INDIVIDUAL ELECTION- For purposes of subparagraph (A), any health insurance coverage with respect to the participant or beneficiary shall be treated as health insurance coverage under a group health plan to which section 9801 applies.CommentsClose CommentsPermalink





‘(4) CONTRIBUTION AMOUNT- For purposes of this section, the term ‘contribution amount’ means, with respect to an individual under a group health plan, the portion of the applicable premium of such individual under such plan (as determined under section 4980B(f)(4)) which is not paid by the individual. In the case that the employer offers more than one group health plan, the contribution amount shall be the average amount of the applicable premiums under such plans.CommentsClose CommentsPermalink





‘(5) GROUP HEALTH PLAN- For purpose of this subsection, subsection (d) shall not apply.CommentsClose CommentsPermalink





‘(6) APPLICATION TO FEHBP- Notwithstanding any other provision of law, the Office of Personnel Management shall carry out the health benefits program under chapter 89 of title 5, United States Code, consistent with the requirements of this subsection.’.CommentsClose CommentsPermalink





(b) Requirement of Equal Contributions to All FEHBP Plans- Section 8906 of title 5, United States Code, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(j) Notwithstanding the previous provisions of this section the Office of Personnel Management shall revise the amount of the Government contribution made under this section in a manner so that--CommentsClose CommentsPermalink





‘(1) the amount of such contribution does not change based on the health benefits plan in which the individual is enrolled; andCommentsClose CommentsPermalink





‘(2) the aggregate amount of such contributions is estimated to be equal to the aggregate amount of such contributions if this subsection did not apply.’.CommentsClose CommentsPermalink





(c) ERISA Conforming Amendments-CommentsClose CommentsPermalink





(1) EXCEPTION FROM HIPAA REQUIREMENTS FOR BENEFITS PROVIDED UNDER HEALTH CARE CONTRIBUTION ELECTION- Section 732 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191a) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(e) Health Care Contribution Election-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The requirements of this part shall not apply in the case of health insurance coverage (other than excepted benefits as defined in section 9832(c)(1) of the Internal Revenue Code of 1986)--CommentsClose CommentsPermalink





‘(A) which is provided to a participant or beneficiary by a health insurance issuer under a group health plan, andCommentsClose CommentsPermalink





‘(B) with respect to which the requirements of paragraphs (2) and (3) are met.CommentsClose CommentsPermalink





‘(2) CONTRIBUTION ELECTION- The requirement of this paragraph is met with respect to health insurance coverage provided to a participant or beneficiary by any health insurance issuer under a group health plan if, under such plan--CommentsClose CommentsPermalink





‘(A) the participant may elect such coverage for any period of coverage in lieu of health insurance coverage otherwise provided under such plan for such period, andCommentsClose CommentsPermalink





‘(B) in the case of such an election, the plan sponsor is required to pay to such issuer for the elected coverage for such period an amount which is not less than the contribution amount for such health insurance coverage otherwise provided under such plan for such period.CommentsClose CommentsPermalink





‘(3) PRE-EXISTING CONDITIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The requirement of this paragraph is met with respect to health insurance coverage provided to a participant or beneficiary by any health insurance issuer if, under such plan the requirements of section 701 are met with respect to the participant or beneficiary.CommentsClose CommentsPermalink





‘(B) ENFORCEMENT WITH RESPECT TO INDIVIDUAL ELECTION- For purposes of subparagraph (A), any health insurance coverage with respect to the participant or beneficiary shall be treated as health insurance coverage under a group health plan to which section 701 applies.CommentsClose CommentsPermalink





‘(4) CONTRIBUTION AMOUNT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of this section, the term ‘contribution amount’ means, with respect to any period of health insurance coverage offered to a participant or beneficiary, the portion of the applicable premium of such participant or beneficiary under such plan which is not paid by such participant or beneficiary. In the case that the employer offers more than one group health plan, the contribution amount shall be the average amount of the applicable premiums under such plans.CommentsClose CommentsPermalink





‘(B) APPLICABLE PREMIUM- For purposes of subparagraph (A), the term ‘applicable premium’ means, with respect to any period of health insurance coverage of a participant or beneficiary under a group health plan, the cost to the plan for such period of such coverage for similarly situated beneficiaries (without regard to whether such cost is paid by the plan sponsor or the participant or beneficiary).’.CommentsClose CommentsPermalink





(2) EXEMPTION FROM FIDUCIARY LIABILITY- Section 404 of such Act (29 U.S.C. 1104) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(e) The plan sponsor of a group health plan (as defined in section 733(a)) shall not be treated as breaching any of the responsibilities, obligations, or duties imposed upon fiduciaries by this title in the case of any individual who is a participant or beneficiary under such plan solely because of the extent to which the plan sponsor provides, in the case of such individual, some or all of such benefits by means of payment of contribution amounts pursuant to a contribution election under section 732(e), irrespective of the amount or type of benefits that would otherwise be provided to such individual under such plan.’.CommentsClose CommentsPermalink





(d) Exception From HIPAA Requirements Under IRC for Benefits Provided Under Health Care Contribution Election- Section 9831 of the Internal Revenue Code of 1986 (relating to general exceptions) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(d) Health Care Contribution Election-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The requirements of this chapter shall not apply in the case of health insurance coverage (other than excepted benefits as defined in section 9832(c)(1))--CommentsClose CommentsPermalink





‘(A) which is provided to a participant or beneficiary by a health insurance issuer under a group health plan, andCommentsClose CommentsPermalink





‘(B) with respect to which the requirements of paragraphs (2) and (3) are met.CommentsClose CommentsPermalink





‘(2) CONTRIBUTION ELECTION- The requirement of this paragraph is met with respect to health insurance coverage provided to a participant or beneficiary by any health insurance issuer under a group health plan if, under such plan--CommentsClose CommentsPermalink





‘(A) the participant may elect such coverage for any period of coverage in lieu of health insurance coverage otherwise provided under such plan for such period, andCommentsClose CommentsPermalink





‘(B) in the case of such an election, the plan sponsor is required to pay to such issuer for the elected coverage for such period an amount which is not less than the contribution amount for such health insurance coverage otherwise provided under such plan for such period.CommentsClose CommentsPermalink





‘(3) PRE-EXISTING CONDITIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The requirement of this paragraph is met with respect to health insurance coverage provided to a participant or beneficiary by any health insurance issuer if, under such plan the requirements of section 9801 are met with respect to the participant or beneficiary.CommentsClose CommentsPermalink





‘(B) ENFORCEMENT WITH RESPECT TO INDIVIDUAL ELECTION- For purposes of subparagraph (A), any health insurance coverage with respect to the participant or beneficiary shall be treated as health insurance coverage under a group health plan to which section 9801 applies.CommentsClose CommentsPermalink





‘(4) CONTRIBUTION AMOUNT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of this subsection, the term ‘contribution amount’ means, with respect to any period of health insurance coverage offered to a participant or beneficiary, the portion of the applicable premium of such participant or beneficiary under such plan which is not paid by such participant or beneficiary. In the case that the employer offers more than one group health plan, the contribution amount shall be the average amount of the applicable premiums under such plans.CommentsClose CommentsPermalink





‘(B) APPLICABLE PREMIUM- For purposes of subparagraph (A), the term ‘applicable premium’ means, with respect to any period of health insurance coverage of a participant or beneficiary under a group health plan, the cost to the plan for such period of such coverage for similarly situated beneficiaries (without regard to whether such cost is paid by the plan sponsor or the participant or beneficiary).’.CommentsClose CommentsPermalink





(e) Exception From HIPAA Requirements Under the PHSA for Benefits Provided Under Health Care Contribution Election- Section 2721 of the Public Health Service Act (42 U.S.C. 300gg-21) is amended----CommentsClose CommentsPermalink





(1) by redesignating subsection (e) as subsection (f); andCommentsClose CommentsPermalink





(2) by inserting after subsection (d) the following new subsection:CommentsClose CommentsPermalink





‘(e) Health Care Contribution Election-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The requirements of this subparts 1 through 3 shall not apply in the case of health insurance coverage (other than excepted benefits as defined in section 9832(c)(1) of the Internal Revenue Code of 1986)--CommentsClose CommentsPermalink





‘(A) which is provided to a participant or beneficiary by a health insurance issuer under a group health plan, andCommentsClose CommentsPermalink





‘(B) with respect to which the requirements of paragraphs (2) and (3) are met.CommentsClose CommentsPermalink





‘(2) CONTRIBUTION ELECTION- The requirement of this paragraph is met with respect to health insurance coverage provided to a participant or beneficiary by any health insurance issuer under a group health plan if, under such plan--CommentsClose CommentsPermalink





‘(A) the participant may elect such coverage for any period of coverage in lieu of health insurance coverage otherwise provided under such plan for such period, andCommentsClose CommentsPermalink





‘(B) in the case of such an election, the plan sponsor is required to pay to such issuer for the elected coverage for such period an amount which is not less than the contribution amount for such health insurance coverage otherwise provided under such plan for such period.CommentsClose CommentsPermalink





‘(3) PRE-EXISTING CONDITIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The requirement of this paragraph is met with respect to health insurance coverage provided to a participant or beneficiary by any health insurance issuer if, under such plan the requirements of section 2701 are met with respect to the participant or beneficiary.CommentsClose CommentsPermalink





‘(B) ENFORCEMENT WITH RESPECT TO INDIVIDUAL ELECTION- For purposes of subparagraph (A), any health insurance coverage with respect to the participant or beneficiary shall be treated as health insurance coverage under a group health plan to which section 2701 applies.CommentsClose CommentsPermalink





‘(4) CONTRIBUTION AMOUNT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of this section, the term ‘contribution amount’ means, with respect to any period of health insurance coverage offered to a participant or beneficiary, the portion of the applicable premium of such participant or beneficiary under such plan which is not paid by such participant or beneficiary. In the case that the employer offers more than one group health plan, the contribution amount shall be the average amount of the applicable premiums under such plans.CommentsClose CommentsPermalink





‘(B) APPLICABLE PREMIUM- For purposes of subparagraph (A), the term ‘applicable premium’ means, with respect to any period of health insurance coverage of a participant or beneficiary under a group health plan, the cost to the plan for such period of such coverage for similarly situated beneficiaries (without regard to whether such cost is paid by the plan sponsor or the participant or beneficiary).’.CommentsClose CommentsPermalink

SEC. 108. LIMITATIONS ON STATE RESTRICTIONS ON EMPLOYER AUTO-ENROLLMENT.

(a) In General- No State shall establish a law that prevents an employer from instituting auto-enrollment which meets the requirements of subsection (b) for coverage of a participant or beneficiary under a group health plan, or health insurance coverage offered in connection with such a plan, so long as the participant or beneficiary has the option of declining such coverage.CommentsClose CommentsPermalink





(b) Automatic Enrollment for Employer Sponsored Health Benefits-CommentsClose CommentsPermalink





(1) IN GENERAL- The requirement of this subsection with respect to an employer and an employee is that the employer automatically enroll such employee into the employment-based health benefits plan for individual coverage under the plan option with the lowest applicable employee premium.CommentsClose CommentsPermalink





(2) OPT-OUT- In no case may an employer automatically enroll an employee in a plan under paragraph (1) if such employee makes an affirmative election to opt-out of such plan or to elect coverage under an employment-based health benefits plan offered by such employer. An employer shall provide an employee with a 30-day period to make such an affirmative election before the employer may automatically enroll the employee in such a plan.CommentsClose CommentsPermalink





(3) NOTICE REQUIREMENTS-CommentsClose CommentsPermalink





(A) IN GENERAL- Each employer described in paragraph (1) who automatically enrolls an employee into a plan as described in such paragraph shall provide the employees, within a reasonable period before the beginning of each plan year (or, in the case of new employees, within a reasonable period before the end of the enrollment period for such a new employee), written notice of the employees’ rights and obligations relating to the automatic enrollment requirement under such paragraph. Such notice must be comprehensive and understood by the average employee to whom the automatic enrollment requirement applies.CommentsClose CommentsPermalink





(B) INCLUSION OF SPECIFIC INFORMATION- The written notice under subparagraph (A) must explain an employee’s right to opt out of being automatically enrolled in a plan and in the case that more than one level of benefits or employee premium level is offered by the employer involved, the notice must explain which level of benefits and employee premium level the employee will be automatically enrolled in the absence of an affirmative election by the employee.CommentsClose CommentsPermalink





(c) Construction- Nothing in this section shall be construed to supersede State law which establishes, implements, or continues in effect any standard or requirement relating to employers in connection with payroll or the sponsoring of employer sponsored health insurance coverage except to the extent that such standard or requirement prevents an employer from instituting the auto-enrollment described in subsection (a).CommentsClose CommentsPermalink

SEC. 109. CREDIT FOR SMALL EMPLOYERS ADOPTING AUTO-ENROLLMENT AND DEFINED CONTRIBUTION OPTIONS.

(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 adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 45R. AUTO-ENROLLMENT AND DEFINED CONTRIBUTION OPTION FOR HEALTH BENEFITS PLANS OF SMALL EMPLOYERS.

‘(a) In General- For purposes of section 38, in the case of a small employer, the health benefits plan implementation credit determined under this section for the taxable year is an amount equal to 100 percent of the amount paid or incurred by the taxpayer during the taxable year for qualified health benefits expenses.CommentsClose CommentsPermalink





‘(b) Limitation- The credit determined under subsection (a) with respect to any taxpayer for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink





‘(1) $1,500, overCommentsClose CommentsPermalink





‘(2) sum of the credits determined under subsection (a) with respect to such taxpayer for all preceding taxable years.CommentsClose CommentsPermalink





‘(c) Qualified Health Benefits Expenses- For purposes of this section, the term ‘qualified health benefits auto-enrollment expenses’ means, with respect to any taxable year, amounts paid or incurred by the taxpayer during such taxable year for--CommentsClose CommentsPermalink





‘(1) establishing auto-enrollment which meets the requirements of section 107 of the Empowering Patients First Act for coverage of a participant or beneficiary under a group health plan, or health insurance coverage offered in connection with such a plan, andCommentsClose CommentsPermalink





‘(2) implementing the employer contribution option for health insurance coverage pursuant to section 5000(e)(2).CommentsClose CommentsPermalink





‘(d) Qualified Small Employer- For purposes of this section, the term ‘qualified small employer’ means any employer for any taxable year if the number of employees employed by such employer during such taxable year does not exceed 50. All employers treated as a single employer under section (a) or (b) of section 52 shall be treated as a single employer for purposes of this section.CommentsClose CommentsPermalink





‘(e) No Double Benefit- No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section.CommentsClose CommentsPermalink





‘(f) Termination- Subsection (a) shall not apply to any taxable year beginning after the date which is 2 years after the date of the enactment of this section.’.CommentsClose CommentsPermalink





(b) Credit To Be Part of General Business Credit- Subsection (b) of section 38 of such Code (relating to general 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 adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(36) in the case of a small employer (as defined in section 45R(d)), the health benefits plan implementation credit determined under section 45R(a).’.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45Q the following new item:CommentsClose CommentsPermalink





‘Sec. 45R. Auto-enrollment and defined contribution option for health benefits plans of small employers.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 110. REQUIRE EMPLOYERS TO DISCLOSE AMOUNTS PAID FOR EMPLOYER-PROVIDED HEALTH PLAN COVERAGE.

(a) In General- Subsection (a) of section 6051 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 inserting after paragraph (13) the following new paragraph:CommentsClose CommentsPermalink





‘(14) the total amount paid or incurred by the employer with respect to employer-provided coverage under an accident or health plan with respect to such employee.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to amounts paid or incurred in calendar years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 111. HSA MODIFICATIONS AND CLARIFICATIONS.

(a) Clarification of Treatment of Capitated Primary Care Payments as Amounts Paid for Medical Care- Section 213(d) of the Internal Revenue Code of 1986 (relating to definitions) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(12) TREATMENT OF CAPITATED PRIMARY CARE PAYMENTS- Capitated primary care payments shall be treated as amounts paid for medical care.’.CommentsClose CommentsPermalink





(b) Special Rule for Individuals Eligible for Veterans or Indian Health Benefits- Section 223(c)(1) of such Code (defining eligible individual) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(C) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR VETERANS OR INDIAN HEALTH BENEFITS- For purposes of subparagraph (A)(ii), an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual receives periodic hospital care or medical services under any law administered by the Secretary of Veterans Affairs or the Bureau of Indian Affairs.’.CommentsClose CommentsPermalink





(c) Certain Physician Fees To Be Treated as Medical Care- Section 213(d) of such Code is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(12) PRE-PAID PHYSICIAN FEES- The term ‘medical care’ shall include amounts paid by patients to their primary physician in advance for the right to receive medical services on an as-needed basis.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

TITLE II--HEALTH INSURANCE POOLING MECHANISMS FOR INDIVIDUALSCommentsClose CommentsPermalink

Subtitle A--Safety Net for Individuals With Pre-Existing ConditionsCommentsClose CommentsPermalink

SEC. 201. REQUIRING OPERATION OF HIGH-RISK POOL OR OTHER MECHANISM AS CONDITION FOR AVAILABILITY OF TAX CREDIT.

No credit shall be allowed under section 36B of the Internal Revenue Code of 1986 (relating to health insurance costs of low-income individuals) to the residents of any State unless such State meets the following requirements:CommentsClose CommentsPermalink





(1) The State must implement a high-risk pool or a reinsurance pool or other risk-adjustment mechanism (as defined in section 211).CommentsClose CommentsPermalink





(2) Assessments levied by the State for purposes of funding such a pool or mechanism must only be used for funding and administering such pool or mechanism.CommentsClose CommentsPermalink





(3) Such pool or mechanism must incorporate the application of such tax credit into such pool or mechanism.CommentsClose CommentsPermalink

Subtitle B--Federal Block Grants for State Insurance ExpendituresCommentsClose CommentsPermalink

SEC. 211. FEDERAL BLOCK GRANTS FOR STATE INSURANCE EXPENDITURES.

(a) In General- Subject to the succeeding provisions of this section, each State shall receive from the Secretary of Health and Human Services (in this subtitle referred to as the ‘Secretary’) a block grant for the State’s providing for the use, in connection with providing health benefits coverage, of a qualifying high-risk pool or a reinsurance pool or other risk-adjustment mechanism used for the purpose of subsidizing the purchase of private health insurance.CommentsClose CommentsPermalink





(b) Funding Amount-CommentsClose CommentsPermalink





(1) IN GENERAL- There are hereby appropriated, out of any funds in the Treasury not otherwise appropriated, $300,000,000 for each fiscal year for block grants under this section. Such amount shall be divided among the States as determined by the Secretary.CommentsClose CommentsPermalink





(2) CONSTRUCTION- Nothing in this section shall be construed as preventing a State from using funding under section 2745 of the Public Health Service Act for purposes of funding reinsurance or other risk mechanisms.CommentsClose CommentsPermalink





(c) Limitation- Funding under subsection (a) may only be used for the following:CommentsClose CommentsPermalink





(1) QUALIFYING HIGH-RISK POOLS-CommentsClose CommentsPermalink





(A) CURRENT POOLS- A qualifying high-risk pool created before the date of the enactment of this Act that only cover high risk populations and individuals (and their spouse and dependents) receiving a health care tax credit under section 35 of the Internal Revenue Code of 1986 for a limited period of time as determined by the Secretary or under section 2741 of Public Health Service Act.CommentsClose CommentsPermalink





(B) NEW POOLS- A qualifying high-risk pool created on or after such date that only covers populations and individuals described in subparagraph (A) if the pool--CommentsClose CommentsPermalink





(i) offers at least the option of one or more high deductible plan options, in combination with a contribution into a health savings account;CommentsClose CommentsPermalink





(ii) offers multiple competing health plan options; andCommentsClose CommentsPermalink





(iii) covers only high risk populations.CommentsClose CommentsPermalink





(2) RISK INSURANCE POOL OR OTHER RISK-ADJUSTMENT MECHANISMS-CommentsClose CommentsPermalink





(A) CURRENT REINSURANCE- A reinsurance pool ,or other risk-adjustment mechanism, created before the date of the enactment of this Act that only covers populations and individuals described in paragraph (1)(A).CommentsClose CommentsPermalink





(B) NEW POOLS- A reinsurance pool or other risk-adjustment mechanism created on or after such date that provides reinsurance only covers populations and individuals described in paragraph (1)(A) and only on a prospective basis under which a health insurance issuer cedes covered lives to the pool in exchange for payment of a reinsurance premium.CommentsClose CommentsPermalink





(3) TRANSITION- Nothing in this section shall be construed as preventing a State from using funds available to transition from an existing high-risk pool to a reinsurance pool.CommentsClose CommentsPermalink





(d) Bonus Payments- With respect to any amounts made available to the States under this section, the Secretary shall set aside a portion of such amounts that shall only be available for the following activities by such States:CommentsClose CommentsPermalink





(1) Providing guaranteed availability of individual health insurance coverage to certain individuals with prior group coverage under part B of title XXVII of the Public Health Service Act.CommentsClose CommentsPermalink





(2) A reduction in premium trends, actual premiums, or other cost-sharing requirements.CommentsClose CommentsPermalink





(3) An expansion or broadening of the pool of high risk individuals eligible for coverage.CommentsClose CommentsPermalink





(4) States that adopt the Model Health Plan for Uninsurable Individuals Act of the National Association of Insurance Commissioners (if and when updated by such Association).CommentsClose CommentsPermalink





The Secretary may request such Association to update such Model Health Plan as needed by 2011.CommentsClose CommentsPermalink





(e) Administration- The Secretary shall provide for the administration of this section and may establish such terms and conditions, including the requirement of an application, as may be appropriate to carry out this section.CommentsClose CommentsPermalink





(f) Construction- Nothing in this section shall be construed as requiring a State to operate a reinsurance pool (or other risk-adjustment mechanism) under this section or as preventing a State from operating such a pool or mechanism through one or more private entities.CommentsClose CommentsPermalink





(g) Qualifying High-risk Pool- For purposes of this section, the term ‘qualifying high-risk pool’ means any qualified high risk pool (as defined in subsection (g)(1)(A) of section 2745) of the Public Health Service Act) that meets the conditions to receive a grant under section (b)(1) of such section.CommentsClose CommentsPermalink





(h) Reinsurance Pool or Other Risk-adjustment Mechanism Defined- For purposes of this section, the term ‘reinsurance pool or other risk-adjustment mechanism’ means any State-based risk spreading mechanism to subsidize the purchase of private health insurance for the high-risk population.CommentsClose CommentsPermalink





(i) High-risk Population- For purposes of this section, the term ‘high-risk population’ means--CommentsClose CommentsPermalink





(1) individuals who, by reason of the existence or history of a medical condition, are able to acquire health coverage only at rates which are at least 150 percent of the standard risk rates for such coverage (in a non-community-rated non-guaranteed issue State), andCommentsClose CommentsPermalink





(2) individuals who are provided health coverage by a high-risk pool.CommentsClose CommentsPermalink





(j) State Defined- For purposes of this section, the term ‘State’ includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.CommentsClose CommentsPermalink





(k) Extending Funding- Section 2745(d)(2) of the Public Health Service Act (42 U.S.C. 300gg-45(d)(2)) is amended by striking ‘2010’ and inserting ‘2012’ each place it appears.CommentsClose CommentsPermalink

Subtitle C--Health Care Access and AvailabilityCommentsClose CommentsPermalink

SEC. 221. EXPANSION OF ACCESS AND CHOICE THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS).

The Public Health Service Act is amended by adding at the end the following new title:CommentsClose CommentsPermalink

‘TITLE XXXI--INDIVIDUAL MEMBERSHIP ASSOCIATIONSCommentsClose CommentsPermalink

‘SEC. 3101. DEFINITION OF INDIVIDUAL MEMBERSHIP ASSOCIATION (IMA).

‘(a) In General- For purposes of this title, the terms ‘individual membership association’ and ‘IMA’ mean a legal entity that meets the following requirements:CommentsClose CommentsPermalink





‘(1) ORGANIZATION- The IMA is an organization operated under the direction of an association (as defined in section 3104(1)).CommentsClose CommentsPermalink





‘(2) OFFERING HEALTH BENEFITS COVERAGE-CommentsClose CommentsPermalink





‘(A) DIFFERENT GROUPS- The IMA, in conjunction with those health insurance issuers that offer health benefits coverage through the IMA, makes available health benefits coverage in the manner described in subsection (b) to all members of the IMA and the dependents of such members in the manner described in subsection (c)(2) at rates that are established by the health insurance issuer on a policy or product specific basis and that may vary only as permissible under State law.CommentsClose CommentsPermalink





‘(B) NONDISCRIMINATION IN COVERAGE OFFERED-CommentsClose CommentsPermalink





‘(i) IN GENERAL- Subject to clause (ii), the IMA may not offer health benefits coverage to a member of an IMA unless the same coverage is offered to all such members of the IMA.CommentsClose CommentsPermalink





‘(ii) CONSTRUCTION- Nothing in this title shall be construed as requiring or permitting a health insurance issuer to provide coverage outside the service area of the issuer, as approved under State law, or requiring a health insurance issuer from excluding or limiting the coverage on any individual, subject to the requirement of section 2741.CommentsClose CommentsPermalink





‘(C) NO FINANCIAL UNDERWRITING- The IMA provides health benefits coverage only through contracts with health insurance issuers and does not assume insurance risk with respect to such coverage.CommentsClose CommentsPermalink





‘(3) GEOGRAPHIC AREAS- Nothing in this title shall be construed as preventing the establishment and operation of more than one IMA in a geographic area or as limiting the number of IMAs that may operate in any area.CommentsClose CommentsPermalink





‘(4) PROVISION OF ADMINISTRATIVE SERVICES TO PURCHASERS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The IMA may provide administrative services for members. Such services may include accounting, billing, and enrollment information.CommentsClose CommentsPermalink





‘(B) CONSTRUCTION- Nothing in this subsection shall be construed as preventing an IMA from serving as an administrative service organization to any entity.CommentsClose CommentsPermalink





‘(5) FILING INFORMATION- The IMA files with the Secretary information that demonstrates the IMA’s compliance with the applicable requirements of this title.CommentsClose CommentsPermalink





‘(b) Health Benefits Coverage Requirements-CommentsClose CommentsPermalink





‘(1) COMPLIANCE WITH CONSUMER PROTECTION REQUIREMENTS- Any health benefits coverage offered through an IMA shall--CommentsClose CommentsPermalink





‘(A) be underwritten by a health insurance issuer that--CommentsClose CommentsPermalink





‘(i) is licensed (or otherwise regulated) under State law,CommentsClose CommentsPermalink





‘(ii) meets all applicable State standards relating to consumer protection, subject to section 3002(b), andCommentsClose CommentsPermalink





‘(B) subject to paragraph (2), be approved or otherwise permitted to be offered under State law.CommentsClose CommentsPermalink





‘(2) EXAMPLES OF TYPES OF COVERAGE- The benefits coverage made available through an IMA may include, but is not limited to, any of the following if it meets the other applicable requirements of this title:CommentsClose CommentsPermalink





‘(A) Coverage through a health maintenance organization.CommentsClose CommentsPermalink





‘(B) Coverage in connection with a preferred provider organization.CommentsClose CommentsPermalink





‘(C) Coverage in connection with a licensed provider-sponsored organization.CommentsClose CommentsPermalink





‘(D) Indemnity coverage through an insurance company.CommentsClose CommentsPermalink





‘(E) Coverage offered in connection with a contribution into a medical savings account or flexible spending account.CommentsClose CommentsPermalink





‘(F) Coverage that includes a point-of-service option.CommentsClose CommentsPermalink





‘(G) Any combination of such types of coverage.CommentsClose CommentsPermalink





‘(3) WELLNESS BONUSES FOR HEALTH PROMOTION- Nothing in this title shall be construed as precluding a health insurance issuer offering health benefits coverage through an IMA from establishing premium discounts or rebates for members or from modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention so long as such programs are agreed to in advance by the IMA and comply with all other provisions of this title and do not discriminate among similarly situated members.CommentsClose CommentsPermalink





‘(c) Members; Health Insurance Issuers-CommentsClose CommentsPermalink





‘(1) MEMBERS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Under rules established to carry out this title, with respect to an individual who is a member of an IMA, the individual may enroll for health benefits coverage (including coverage for dependents of such individual) offered by a health insurance issuer through the IMA.CommentsClose CommentsPermalink





‘(B) RULES FOR ENROLLMENT- Nothing in this paragraph shall preclude an IMA from establishing rules of enrollment and reenrollment of members. Such rules shall be applied consistently to all members within the IMA and shall not be based in any manner on health status-related factors.CommentsClose CommentsPermalink





‘(2) HEALTH INSURANCE ISSUERS- The contract between an IMA and a health insurance issuer shall provide, with respect to a member enrolled with health benefits coverage offered by the issuer through the IMA, for the payment of the premiums collected by the issuer.CommentsClose CommentsPermalink

‘SEC. 3102. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.

‘State laws insofar as they relate to any of the following are superseded and shall not apply to health benefits coverage made available through an IMA:CommentsClose CommentsPermalink





‘(1) Benefit requirements for health benefits coverage offered through an IMA, including (but not limited to) requirements relating to coverage of specific providers, specific services or conditions, or the amount, duration, or scope of benefits, but not including requirements to the extent required to implement title XXVII or other Federal law and to the extent the requirement prohibits an exclusion of a specific disease from such coverage.CommentsClose CommentsPermalink





‘(2) Any other requirements (including limitations on compensation arrangements) that, directly or indirectly, preclude (or have the effect of precluding) the offering of such coverage through an IMA, if the IMA meets the requirements of this title.CommentsClose CommentsPermalink





Any State law or regulation relating to the composition or organization of an IMA is preempted to the extent the law or regulation is inconsistent with the provisions of this title.CommentsClose CommentsPermalink

‘SEC. 3103. ADMINISTRATION.

‘(a) In General- The Secretary shall administer this title and is authorized to issue such regulations as may be required to carry out this title. Such regulations shall be subject to Congressional review under the provisions of chapter 8 of title 5, United States Code. The Secretary shall incorporate the process of ‘deemed file and use’ with respect to the information filed under section 3001(a)(5)(A) and shall determine whether information filed by an IMA demonstrates compliance with the applicable requirements of this title. The Secretary shall exercise authority under this title in a manner that fosters and promotes the development of IMAs in order to improve access to health care coverage and services.CommentsClose CommentsPermalink





‘(b) Periodic Reports- The Secretary shall submit to Congress a report every 30 months, during the 10-year period beginning on the effective date of the rules promulgated by the Secretary to carry out this title, on the effectiveness of this title in promoting coverage of uninsured individuals. The Secretary may provide for the production of such reports through one or more contracts with appropriate private entities.CommentsClose CommentsPermalink

‘SEC. 3104. DEFINITIONS.

‘For purposes of this title:CommentsClose CommentsPermalink





‘(1) ASSOCIATION- The term ‘association’ means, with respect to health insurance coverage offered in a State, an association which--CommentsClose CommentsPermalink





‘(A) has been actively in existence for at least 5 years;CommentsClose CommentsPermalink





‘(B) has been formed and maintained in good faith for purposes other than obtaining insurance;CommentsClose CommentsPermalink





‘(C) does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee); andCommentsClose CommentsPermalink





‘(D) does not make health insurance coverage offered through the association available other than in connection with a member of the association.CommentsClose CommentsPermalink





‘(2) DEPENDENT- The term ‘dependent’, as applied to health insurance coverage offered by a health insurance issuer licensed (or otherwise regulated) in a State, shall have the meaning applied to such term with respect to such coverage under the laws of the State relating to such coverage and such an issuer. Such term may include the spouse and children of the individual involved.CommentsClose CommentsPermalink





‘(3) HEALTH BENEFITS COVERAGE- The term ‘health benefits coverage’ has the meaning given the term health insurance coverage in section 2791(b)(1).CommentsClose CommentsPermalink





‘(4) HEALTH INSURANCE ISSUER- The term ‘health insurance issuer’ has the meaning given such term in section 2791(b)(2).CommentsClose CommentsPermalink





‘(5) HEALTH STATUS-RELATED FACTOR- The term ‘health status-related factor’ has the meaning given such term in section 2791(d)(9).CommentsClose CommentsPermalink





‘(6) IMA; INDIVIDUAL MEMBERSHIP ASSOCIATION- The terms ‘IMA’ and ‘individual membership association’ are defined in section 3101(a).CommentsClose CommentsPermalink





‘(7) MEMBER- The term ‘member’ means, with respect to an IMA, an individual who is a member of the association to which the IMA is offering coverage.’.CommentsClose CommentsPermalink

Subtitle D--Small Business Health FairnessCommentsClose CommentsPermalink

SEC. 231. SHORT TITLE.

This subtitle may be cited as the ‘Small Business Health Fairness Act of 2009’.CommentsClose CommentsPermalink

SEC. 232. RULES GOVERNING ASSOCIATION HEALTH PLANS.

(a) In General- Subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding after part 7 the following new part:CommentsClose CommentsPermalink

‘PART 8--RULES GOVERNING ASSOCIATION HEALTH PLANS

‘SEC. 801. ASSOCIATION HEALTH PLANS.

‘(a) In General- For purposes of this part, the term ‘association health plan’ means a group health plan whose sponsor is (or is deemed under this part to be) described in subsection (b).CommentsClose CommentsPermalink





‘(b) Sponsorship- The sponsor of a group health plan is described in this subsection if such sponsor--CommentsClose CommentsPermalink





‘(1) is organized and maintained in good faith, with a constitution and bylaws specifically stating its purpose and providing for periodic meetings on at least an annual basis, as a bona fide trade association, a bona fide industry association (including a rural electric cooperative association or a rural telephone cooperative association), a bona fide professional association, or a bona fide chamber of commerce (or similar bona fide business association, including a corporation or similar organization that operates on a cooperative basis (within the meaning of section 1381 of the Internal Revenue Code of 1986)), for substantial purposes other than that of obtaining or providing medical care;CommentsClose CommentsPermalink





‘(2) is established as a permanent entity which receives the active support of its members and requires for membership payment on a periodic basis of dues or payments necessary to maintain eligibility for membership in the sponsor; andCommentsClose CommentsPermalink





‘(3) does not condition membership, such dues or payments, or coverage under the plan on the basis of health status-related factors with respect to the employees of its members (or affiliated members), or the dependents of such employees, and does not condition such dues or payments on the basis of group health plan participation.CommentsClose CommentsPermalink





Any sponsor consisting of an association of entities which meet the requirements of paragraphs (1), (2), and (3) shall be deemed to be a sponsor described in this subsection.CommentsClose CommentsPermalink

‘SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

‘(a) In General- The applicable authority shall prescribe by regulation a procedure under which, subject to subsection (b), the applicable authority shall certify association health plans which apply for certification as meeting the requirements of this part.CommentsClose CommentsPermalink





‘(b) Standards- Under the procedure prescribed pursuant to subsection (a), in the case of an association health plan that provides at least one benefit option which does not consist of health insurance coverage, the applicable authority shall certify such plan as meeting the requirements of this part only if the applicable authority is satisfied that the applicable requirements of this part are met (or, upon the date on which the plan is to commence operations, will be met) with respect to the plan.CommentsClose CommentsPermalink





‘(c) Requirements Applicable to Certified Plans- An association health plan with respect to which certification under this part is in effect shall meet the applicable requirements of this part, effective on the date of certification (or, if later, on the date on which the plan is to commence operations).CommentsClose CommentsPermalink





‘(d) Requirements for Continued Certification- The applicable authority may provide by regulation for continued certification of association health plans under this part.CommentsClose CommentsPermalink





‘(e) Class Certification for Fully Insured Plans- The applicable authority shall establish a class certification procedure for association health plans under which all benefits consist of health insurance coverage. Under such procedure, the applicable authority shall provide for the granting of certification under this part to the plans in each class of such association health plans upon appropriate filing under such procedure in connection with plans in such class and payment of the prescribed fee under section 807(a).CommentsClose CommentsPermalink





‘(f) Certification of Self-Insured Association Health Plans- An association health plan which offers one or more benefit options which do not consist of health insurance coverage may be certified under this part only if such plan consists of any of the following:CommentsClose CommentsPermalink





‘(1) a plan which offered such coverage on the date of the enactment of the Small Business Health Fairness Act of 2009,CommentsClose CommentsPermalink





‘(2) a plan under which the sponsor does not restrict membership to one or more trades and businesses or industries and whose eligible participating employers represent a broad cross-section of trades and businesses or industries, orCommentsClose CommentsPermalink





‘(3) a plan whose eligible participating employers represent one or more trades or businesses, or one or more industries, consisting of any of the following: agriculture; equipment and automobile dealerships; barbering and cosmetology; certified public accounting practices; child care; construction; dance, theatrical and orchestra productions; disinfecting and pest control; financial services; fishing; food service establishments; hospitals; labor organizations; logging; manufacturing (metals); mining; medical and dental practices; medical laboratories; professional consulting services; sanitary services; transportation (local and freight); warehousing; wholesaling/distributing; or any other trade or business or industry which has been indicated as having average or above-average risk or health claims experience by reason of State rate filings, denials of coverage, proposed premium rate levels, or other means demonstrated by such plan in accordance with regulations.CommentsClose CommentsPermalink

‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.

‘(a) Sponsor- The requirements of this subsection are met with respect to an association health plan if the sponsor has met (or is deemed under this part to have met) the requirements of section 801(b) for a continuous period of not less than 3 years ending with the date of the application for certification under this part.CommentsClose CommentsPermalink





‘(b) Board of Trustees- The requirements of this subsection are met with respect to an association health plan if the following requirements are met:CommentsClose CommentsPermalink





‘(1) FISCAL CONTROL- The plan is operated, pursuant to a trust agreement, by a board of trustees which has complete fiscal control over the plan and which is responsible for all operations of the plan.CommentsClose CommentsPermalink





‘(2) RULES OF OPERATION AND FINANCIAL CONTROLS- The board of trustees has in effect rules of operation and financial controls, based on a 3-year plan of operation, adequate to carry out the terms of the plan and to meet all requirements of this title applicable to the plan.CommentsClose CommentsPermalink





‘(3) RULES GOVERNING RELATIONSHIP TO PARTICIPATING EMPLOYERS AND TO CONTRACTORS-CommentsClose CommentsPermalink





‘(A) BOARD MEMBERSHIP-CommentsClose CommentsPermalink





‘(i) IN GENERAL- Except as provided in clauses (ii) and (iii), the members of the board of trustees are individuals selected from individuals who are the owners, officers, directors, or employees of the participating employers or who are partners in the participating employers and actively participate in the business.CommentsClose CommentsPermalink





‘(ii) LIMITATION-CommentsClose CommentsPermalink





‘(I) GENERAL RULE- Except as provided in subclauses (II) and (III), no such member is an owner, officer, director, or employee of, or partner in, a contract administrator or other service provider to the plan.CommentsClose CommentsPermalink





‘(II) LIMITED EXCEPTION FOR PROVIDERS OF SERVICES SOLELY ON BEHALF OF THE SPONSOR- Officers or employees of a sponsor which is a service provider (other than a contract administrator) to the plan may be members of the board if they constitute not more than 25 percent of the membership of the board and they do not provide services to the plan other than on behalf of the sponsor.CommentsClose CommentsPermalink





‘(III) TREATMENT OF PROVIDERS OF MEDICAL CARE- In the case of a sponsor which is an association whose membership consists primarily of providers of medical care, subclause (I) shall not apply in the case of any service provider described in subclause (I) who is a provider of medical care under the plan.CommentsClose CommentsPermalink





‘(iii) CERTAIN PLANS EXCLUDED- Clause (i) shall not apply to an association health plan which is in existence on the date of the enactment of the Small Business Health Fairness Act of 2009.CommentsClose CommentsPermalink





‘(B) SOLE AUTHORITY- The board has sole authority under the plan to approve applications for participation in the plan and to contract with a service provider to administer the day-to-day affairs of the plan.CommentsClose CommentsPermalink





‘(c) Treatment of Franchise Networks- In the case of a group health plan which is established and maintained by a franchiser for a franchise network consisting of its franchisees--CommentsClose CommentsPermalink





‘(1) the requirements of subsection (a) and section 801(a) shall be deemed met if such requirements would otherwise be met if the franchiser were deemed to be the sponsor referred to in section 801(b), such network were deemed to be an association described in section 801(b), and each franchisee were deemed to be a member (of the association and the sponsor) referred to in section 801(b); andCommentsClose CommentsPermalink





‘(2) the requirements of section 804(a)(1) shall be deemed met.CommentsClose CommentsPermalink





The Secretary may by regulation define for purposes of this subsection the terms ‘franchiser’, ‘franchise network’, and ‘franchisee’.CommentsClose CommentsPermalink

‘SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

‘(a) Covered Employers and Individuals- The requirements of this subsection are met with respect to an association health plan if, under the terms of the plan--CommentsClose CommentsPermalink





‘(1) each participating employer must be--CommentsClose CommentsPermalink





‘(A) a member of the sponsor,CommentsClose CommentsPermalink





‘(B) the sponsor, orCommentsClose CommentsPermalink





‘(C) an affiliated member of the sponsor with respect to which the requirements of subsection (b) are met,CommentsClose CommentsPermalink





except that, in the case of a sponsor which is a professional association or other individual-based association, if at least one of the officers, directors, or employees of an employer, or at least one of the individuals who are partners in an employer and who actively participates in the business, is a member or such an affiliated member of the sponsor, participating employers may also include such employer; andCommentsClose CommentsPermalink





‘(2) all individuals commencing coverage under the plan after certification under this part must be--CommentsClose CommentsPermalink





‘(A) active or retired owners (including self-employed individuals), officers, directors, or employees of, or partners in, participating employers; orCommentsClose CommentsPermalink





‘(B) the beneficiaries of individuals described in subparagraph (A).CommentsClose CommentsPermalink





‘(b) Coverage of Previously Uninsured Employees- In the case of an association health plan in existence on the date of the enactment of the Small Business Health Fairness Act of 2009, an affiliated member of the sponsor of the plan may be offered coverage under the plan as a participating employer only if--CommentsClose CommentsPermalink





‘(1) the affiliated member was an affiliated member on the date of certification under this part; orCommentsClose CommentsPermalink





‘(2) during the 12-month period preceding the date of the offering of such coverage, the affiliated member has not maintained or contributed to a group health plan with respect to any of its employees who would otherwise be eligible to participate in such association health plan.CommentsClose CommentsPermalink





‘(c) Individual Market Unaffected- The requirements of this subsection are met with respect to an association health plan if, under the terms of the plan, no participating employer may provide health insurance coverage in the individual market for any employee not covered under the plan which is similar to the coverage contemporaneously provided to employees of the employer under the plan, if such exclusion of the employee from coverage under the plan is based on a health status-related factor with respect to the employee and such employee would, but for such exclusion on such basis, be eligible for coverage under the plan.CommentsClose CommentsPermalink





‘(d) Prohibition of Discrimination Against Employers and Employees Eligible To Participate- The requirements of this subsection are met with respect to an association health plan if--CommentsClose CommentsPermalink





‘(1) under the terms of the plan, all employers meeting the preceding requirements of this section are eligible to qualify as participating employers for all geographically available coverage options, unless, in the case of any such employer, participation or contribution requirements of the type referred to in section 2711 of the Public Health Service Act are not met;CommentsClose CommentsPermalink





‘(2) upon request, any employer eligible to participate is furnished information regarding all coverage options available under the plan; andCommentsClose CommentsPermalink





‘(3) the applicable requirements of sections 701, 702, and 703 are met with respect to the plan.CommentsClose CommentsPermalink

‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION RATES, AND BENEFIT OPTIONS.

‘(a) In General- The requirements of this section are met with respect to an association health plan if the following requirements are met:CommentsClose CommentsPermalink





‘(1) CONTENTS OF GOVERNING INSTRUMENTS- The instruments governing the plan include a written instrument, meeting the requirements of an instrument required under section 402(a)(1), which--CommentsClose CommentsPermalink





‘(A) provides that the board of trustees serves as the named fiduciary required for plans under section 402(a)(1) and serves in the capacity of a plan administrator (referred to in section 3(16)(A));CommentsClose CommentsPermalink





‘(B) provides that the sponsor of the plan is to serve as plan sponsor (referred to in section 3(16)(B)); andCommentsClose CommentsPermalink





‘(C) incorporates the requirements of section 806.CommentsClose CommentsPermalink





‘(2) CONTRIBUTION RATES MUST BE NONDISCRIMINATORY-CommentsClose CommentsPermalink





‘(A) The contribution rates for any participating small employer do not vary on the basis of any health status-related factor in relation to employees of such employer or their beneficiaries and do not vary on the basis of the type of business or industry in which such employer is engaged.CommentsClose CommentsPermalink





‘(B) Nothing in this title or any other provision of law shall be construed to preclude an association health plan, or a health insurance issuer offering health insurance coverage in connection with an association health plan, from--CommentsClose CommentsPermalink





‘(i) setting contribution rates based on the claims experience of the plan; orCommentsClose CommentsPermalink





‘(ii) varying contribution rates for small employers in a State to the extent that such rates could vary using the same methodology employed in such State for regulating premium rates in the small group market with respect to health insurance coverage offered in connection with bona fide associations (within the meaning of section 2791(d)(3) of the Public Health Service Act),CommentsClose CommentsPermalink





subject to the requirements of section 702(b) relating to contribution rates.CommentsClose CommentsPermalink





‘(3) FLOOR FOR NUMBER OF COVERED INDIVIDUALS WITH RESPECT TO CERTAIN PLANS- If any benefit option under the plan does not consist of health insurance coverage, the plan has as of the beginning of the plan year not fewer than 1,000 participants and beneficiaries.CommentsClose CommentsPermalink





‘(4) MARKETING REQUIREMENTS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- If a benefit option which consists of health insurance coverage is offered under the plan, State-licensed insurance agents shall be used to distribute to small employers coverage which does not consist of health insurance coverage in a manner comparable to the manner in which such agents are used to distribute health insurance coverage.CommentsClose CommentsPermalink





‘(B) STATE-LICENSED INSURANCE AGENTS- For purposes of subparagraph (A), the term ‘State-licensed insurance agents’ means one or more agents who are licensed in a State and are subject to the laws of such State relating to licensure, qualification, testing, examination, and continuing education of persons authorized to offer, sell, or solicit health insurance coverage in such State.CommentsClose CommentsPermalink





‘(5) REGULATORY REQUIREMENTS- Such other requirements as the applicable authority determines are necessary to carry out the purposes of this part, which shall be prescribed by the applicable authority by regulation.CommentsClose CommentsPermalink





‘(b) Ability of Association Health Plans To Design Benefit Options- Subject to section 514(d), nothing in this part or any provision of State law (as defined in section 514(c)(1)) shall be construed to preclude an association health plan, or a health insurance issuer offering health insurance coverage in connection with an association health plan, from exercising its sole discretion in selecting the specific items and services consisting of medical care to be included as benefits under such plan or coverage, except (subject to section 514) in the case of (1) any law to the extent that it is not preempted under section 731(a)(1) with respect to matters governed by section 711, 712, or 713, or (2) any law of the State with which filing and approval of a policy type offered by the plan was initially obtained to the extent that such law prohibits an exclusion of a specific disease from such coverage.CommentsClose CommentsPermalink

‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH INSURANCE COVERAGE.

‘(a) In General- The requirements of this section are met with respect to an association health plan if--CommentsClose CommentsPermalink





‘(1) the benefits under the plan consist solely of health insurance coverage; orCommentsClose CommentsPermalink





‘(2) if the plan provides any additional benefit options which do not consist of health insurance coverage, the plan--CommentsClose CommentsPermalink





‘(A) establishes and maintains reserves with respect to such additional benefit options, in amounts recommended by the qualified health actuary, consisting of--CommentsClose CommentsPermalink





‘(i) a reserve sufficient for unearned contributions;CommentsClose CommentsPermalink





‘(ii) a reserve sufficient for benefit liabilities which have been incurred, which have not been satisfied, and for which risk of loss has not yet been transferred, and for expected administrative costs with respect to such benefit liabilities;CommentsClose CommentsPermalink





‘(iii) a reserve sufficient for any other obligations of the plan; andCommentsClose CommentsPermalink





‘(iv) a reserve sufficient for a margin of error and other fluctuations, taking into account the specific circumstances of the plan; andCommentsClose CommentsPermalink





‘(B) establishes and maintains aggregate and specific excess/stop loss insurance and solvency indemnification, with respect to such additional benefit options for which risk of loss has not yet been transferred, as follows:CommentsClose CommentsPermalink





‘(i) The plan shall secure aggregate excess/stop loss insurance for the plan with an attachment point which is not greater than 125 percent of expected gross annual claims. The applicable authority may by regulation provide for upward adjustments in the amount of such percentage in specified circumstances in which the plan specifically provides for and maintains reserves in excess of the amounts required under subparagraph (A).CommentsClose CommentsPermalink





‘(ii) The plan shall secure specific excess/stop loss insurance for the plan with an attachment point which is at least equal to an amount recommended by the plan’s qualified health actuary. The applicable authority may by regulation provide for adjustments in the amount of such insurance in specified circumstances in which the plan specifically provides for and maintains reserves in excess of the amounts required under subparagraph (A).CommentsClose CommentsPermalink





‘(iii) The plan shall secure indemnification insurance for any claims which the plan is unable to satisfy by reason of a plan termination.CommentsClose CommentsPermalink





Any person issuing to a plan insurance described in clause (i), (ii), or (iii) of subparagraph (B) shall notify the Secretary of any failure of premium payment meriting cancellation of the policy prior to undertaking such a cancellation. Any regulations prescribed by the applicable authority pursuant to clause (i) or (ii) of subparagraph (B) may allow for such adjustments in the required levels of excess/stop loss insurance as the qualified health actuary may recommend, taking into account the specific circumstances of the plan.CommentsClose CommentsPermalink





‘(b) Minimum Surplus in Addition to Claims Reserves- In the case of any association health plan described in subsection (a)(2), the requirements of this subsection are met if the plan establishes and maintains surplus in an amount at least equal to--CommentsClose CommentsPermalink





‘(1) $500,000, orCommentsClose CommentsPermalink





‘(2) such greater amount (but not greater than $2,000,000) as may be set forth in regulations prescribed by the applicable authority, considering the level of aggregate and specific excess/stop loss insurance provided with respect to such plan and other factors related to solvency risk, such as the plan’s projected levels of participation or claims, the nature of the plan’s liabilities, and the types of assets available to assure that such liabilities are met.CommentsClose CommentsPermalink





‘(c) Additional Requirements- In the case of any association health plan described in subsection (a)(2), the applicable authority may provide such additional requirements relating to reserves, excess/stop loss insurance, and indemnification insurance as the applicable authority considers appropriate. Such requirements may be provided by regulation with respect to any such plan or any class of such plans.CommentsClose CommentsPermalink





‘(d) Adjustments for Excess/Stop Loss Insurance- The applicable authority may provide for adjustments to the levels of reserves otherwise required under subsections (a) and (b) with respect to any plan or class of plans to take into account excess/stop loss insurance provided with respect to such plan or plans.CommentsClose CommentsPermalink





‘(e) Alternative Means of Compliance- The applicable authority may permit an association health plan described in subsection (a)(2) to substitute, for all or part of the requirements of this section (except subsection (a)(2)(B)(iii)), such security, guarantee, hold-harmless arrangement, or other financial arrangement as the applicable authority determines to be adequate to enable the plan to fully meet all its financial obligations on a timely basis and is otherwise no less protective of the interests of participants and beneficiaries than the requirements for which it is substituted. The applicable authority may take into account, for purposes of this subsection, evidence provided by the plan or sponsor which demonstrates an assumption of liability with respect to the plan. Such evidence may be in the form of a contract of indemnification, lien, bonding, insurance, letter of credit, recourse under applicable terms of the plan in the form of assessments of participating employers, security, or other financial arrangement.CommentsClose CommentsPermalink





‘(f) Measures To Ensure Continued Payment of Benefits by Certain Plans in Distress-CommentsClose CommentsPermalink





‘(1) PAYMENTS BY CERTAIN PLANS TO ASSOCIATION HEALTH PLAN FUND-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In the case of an association health plan described in subsection (a)(2), the requirements of this subsection are met if the plan makes payments into the Association Health Plan Fund under this subparagraph when they are due. Such payments shall consist of annual payments in the amount of $5,000, and, in addition to such annual payments, such supplemental payments as the Secretary may determine to be necessary under paragraph (2). Payments under this paragraph are payable to the Fund at the time determined by the Secretary. Initial payments are due in advance of certification under this part. Payments shall continue to accrue until a plan’s assets are distributed pursuant to a termination procedure.CommentsClose CommentsPermalink





‘(B) PENALTIES FOR FAILURE TO MAKE PAYMENTS- If any payment is not made by a plan when it is due, a late payment charge of not more than 100 percent of the payment which was not timely paid shall be payable by the plan to the Fund.CommentsClose CommentsPermalink





‘(C) CONTINUED DUTY OF THE SECRETARY- The Secretary shall not cease to carry out the provisions of paragraph (2) on account of the failure of a plan to pay any payment when due.CommentsClose CommentsPermalink





‘(2) PAYMENTS BY SECRETARY TO CONTINUE EXCESS/STOP LOSS INSURANCE COVERAGE AND INDEMNIFICATION INSURANCE COVERAGE FOR CERTAIN PLANS- In any case in which the applicable authority determines that there is, or that there is reason to believe that there will be: (A) a failure to take necessary corrective actions under section 809(a) with respect to an association health plan described in subsection (a)(2); or (B) a termination of such a plan under section 809(b) or 810(b)(8) (and, if the applicable authority is not the Secretary, certifies such determination to the Secretary), the Secretary shall determine the amounts necessary to make payments to an insurer (designated by the Secretary) to maintain in force excess/stop loss insurance coverage or indemnification insurance coverage for such plan, if the Secretary determines that there is a reasonable expectation that, without such payments, claims would not be satisfied by reason of termination of such coverage. The Secretary shall, to the extent provided in advance in appropriation Acts, pay such amounts so determined to the insurer designated by the Secretary.CommentsClose CommentsPermalink





‘(3) ASSOCIATION HEALTH PLAN FUND-CommentsClose CommentsPermalink





‘(A) IN GENERAL- There is established on the books of the Treasury a fund to be known as the ‘Association Health Plan Fund’. The Fund shall be available for making payments pursuant to paragraph (2). The Fund shall be credited with payments received pursuant to paragraph (1)(A), penalties received pursuant to paragraph (1)(B); and earnings on investments of amounts of the Fund under subparagraph (B).CommentsClose CommentsPermalink





‘(B) INVESTMENT- Whenever the Secretary determines that the moneys of the fund are in excess of current needs, the Secretary may request the investment of such amounts as the Secretary determines advisable by the Secretary of the Treasury in obligations issued or guaranteed by the United States.CommentsClose CommentsPermalink





‘(g) Excess/Stop Loss Insurance- For purposes of this section--CommentsClose CommentsPermalink





‘(1) AGGREGATE EXCESS/STOP LOSS INSURANCE- The term ‘aggregate excess/stop loss insurance’ means, in connection with an association health plan, a contract--CommentsClose CommentsPermalink





‘(A) under which an insurer (meeting such minimum standards as the applicable authority may prescribe by regulation) provides for payment to the plan with respect to aggregate claims under the plan in excess of an amount or amounts specified in such contract;CommentsClose CommentsPermalink





‘(B) which is guaranteed renewable; andCommentsClose CommentsPermalink





‘(C) which allows for payment of premiums by any third party on behalf of the insured plan.CommentsClose CommentsPermalink





‘(2) SPECIFIC EXCESS/STOP LOSS INSURANCE- The term ‘specific excess/stop loss insurance’ means, in connection with an association health plan, a contract--CommentsClose CommentsPermalink





‘(A) under which an insurer (meeting such minimum standards as the applicable authority may prescribe by regulation) provides for payment to the plan with respect to claims under the plan in connection with a covered individual in excess of an amount or amounts specified in such contract in connection with such covered individual;CommentsClose CommentsPermalink





‘(B) which is guaranteed renewable; andCommentsClose CommentsPermalink





‘(C) which allows for payment of premiums by any third party on behalf of the insured plan.CommentsClose CommentsPermalink





‘(h) Indemnification Insurance- For purposes of this section, the term ‘indemnification insurance’ means, in connection with an association health plan, a contract--CommentsClose CommentsPermalink





‘(1) under which an insurer (meeting such minimum standards as the applicable authority may prescribe by regulation) provides for payment to the plan with respect to claims under the plan which the plan is unable to satisfy by reason of a termination pursuant to section 809(b) (relating to mandatory termination);CommentsClose CommentsPermalink





‘(2) which is guaranteed renewable and noncancellable for any reason (except as the applicable authority may prescribe by regulation); andCommentsClose CommentsPermalink





‘(3) which allows for payment of premiums by any third party on behalf of the insured plan.CommentsClose CommentsPermalink





‘(i) Reserves- For purposes of this section, the term ‘reserves’ means, in connection with an association health plan, plan assets which meet the fiduciary standards under part 4 and such additional requirements regarding liquidity as the applicable authority may prescribe by regulation.CommentsClose CommentsPermalink





‘(j) Solvency Standards Working Group-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Within 90 days after the date of the enactment of the Small Business Health Fairness Act of 2009, the applicable authority shall establish a Solvency Standards Working Group. In prescribing the initial regulations under this section, the applicable authority shall take into account the recommendations of such Working Group.CommentsClose CommentsPermalink





‘(2) MEMBERSHIP- The Working Group shall consist of not more than 15 members appointed by the applicable authority. The applicable authority shall include among persons invited to membership on the Working Group at least one of each of the following:CommentsClose CommentsPermalink





‘(A) a representative of the National Association of Insurance Commissioners;CommentsClose CommentsPermalink





‘(B) a representative of the American Academy of Actuaries;CommentsClose CommentsPermalink





‘(C) a representative of the State governments, or their interests;CommentsClose CommentsPermalink





‘(D) a representative of existing self-insured arrangements, or their interests;CommentsClose CommentsPermalink





‘(E) a representative of associations of the type referred to in section 801(b)(1), or their interests; andCommentsClose CommentsPermalink





‘(F) a representative of multiemployer plans that are group health plans, or their interests.CommentsClose CommentsPermalink

‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.

‘(a) Filing Fee- Under the procedure prescribed pursuant to section 802(a), an association health plan shall pay to the applicable authority at the time of filing an application for certification under this part a filing fee in the amount of $5,000, which shall be available in the case of the Secretary, to the extent provided in appropriation Acts, for the sole purpose of administering the certification procedures applicable with respect to association health plans.CommentsClose CommentsPermalink





‘(b) Information To Be Included in Application for Certification- An application for certification under this part meets the requirements of this section only if it includes, in a manner and form which shall be prescribed by the applicable authority by regulation, at least the following information:CommentsClose CommentsPermalink





‘(1) IDENTIFYING INFORMATION- The names and addresses of--CommentsClose CommentsPermalink





‘(A) the sponsor; andCommentsClose CommentsPermalink





‘(B) the members of the board of trustees of the plan.CommentsClose CommentsPermalink





‘(2) STATES IN WHICH PLAN INTENDS TO DO BUSINESS- The States in which participants and beneficiaries under the plan are to be located and the number of them expected to be located in each such State.CommentsClose CommentsPermalink





‘(3) BONDING REQUIREMENTS- Evidence provided by the board of trustees that the bonding requirements of section 412 will be met as of the date of the application or (if later) commencement of operations.CommentsClose CommentsPermalink





‘(4) PLAN DOCUMENTS- A copy of the documents governing the plan (including any bylaws and trust agreements), the summary plan description, and other material describing the benefits that will be provided to participants and beneficiaries under the plan.CommentsClose CommentsPermalink





‘(5) AGREEMENTS WITH SERVICE PROVIDERS- A copy of any agreements between the plan and contract administrators and other service providers.CommentsClose CommentsPermalink





‘(6) FUNDING REPORT- In the case of association health plans providing benefits options in addition to health insurance coverage, a report setting forth information with respect to such additional benefit options determined as of a date within the 120-day period ending with the date of the application, including the following:CommentsClose CommentsPermalink





‘(A) RESERVES- A statement, certified by the board of trustees of the plan, and a statement of actuarial opinion, signed by a qualified health actuary, that all applicable requirements of section 806 are or will be met in accordance with regulations which the applicable authority shall prescribe.CommentsClose CommentsPermalink





‘(B) ADEQUACY OF CONTRIBUTION RATES- A statement of actuarial opinion, signed by a qualified health actuary, which sets forth a description of the extent to which contribution rates are adequate to provide for the payment of all obligations and the maintenance of required reserves under the plan for the 12-month period beginning with such date within such 120-day period, taking into account the expected coverage and experience of the plan. If the contribution rates are not fully adequate, the statement of actuarial opinion shall indicate the extent to which the rates are inadequate and the changes needed to ensure adequacy.CommentsClose CommentsPermalink





‘(C) CURRENT AND PROJECTED VALUE OF ASSETS AND LIABILITIES- A statement of actuarial opinion signed by a qualified health actuary, which sets forth the current value of the assets and liabilities accumulated under the plan and a projection of the assets, liabilities, income, and expenses of the plan for the 12-month period referred to in subparagraph (B). The income statement shall identify separately the plan’s administrative expenses and claims.CommentsClose CommentsPermalink





‘(D) COSTS OF COVERAGE TO BE CHARGED AND OTHER EXPENSES- A statement of the costs of coverage to be charged, including an itemization of amounts for administration, reserves, and other expenses associated with the operation of the plan.CommentsClose CommentsPermalink





‘(E) OTHER INFORMATION- Any other information as may be determined by the applicable authority, by regulation, as necessary to carry out the purposes of this part.CommentsClose CommentsPermalink





‘(c) Filing Notice of Certification With States- A certification granted under this part to an association health plan shall not be effective unless written notice of such certification is filed with the applicable State authority of each State in which at least 25 percent of the participants and beneficiaries under the plan are located. For purposes of this subsection, an individual shall be considered to be located in the State in which a known address of such individual is located or in which such individual is employed.CommentsClose CommentsPermalink





‘(d) Notice of Material Changes- In the case of any association health plan certified under this part, descriptions of material changes in any information which was required to be submitted with the application for the certification under this part shall be filed in such form and manner as shall be prescribed by the applicable authority by regulation. The applicable authority may require by regulation prior notice of material changes with respect to specified matters which might serve as the basis for suspension or revocation of the certification.CommentsClose CommentsPermalink





‘(e) Reporting Requirements for Certain Association Health Plans- An association health plan certified under this part which provides benefit options in addition to health insurance coverage for such plan year shall meet the requirements of section 103 by filing an annual report under such section which shall include information described in subsection (b)(6) with respect to the plan year and, notwithstanding section 104(a)(1)(A), shall be filed with the applicable authority not later than 90 days after the close of the plan year (or on such later date as may be prescribed by the applicable authority). The applicable authority may require by regulation such interim reports as it considers appropriate.CommentsClose CommentsPermalink





‘(f) Engagement of Qualified Health Actuary- The board of trustees of each association health plan which provides benefits options in addition to health insurance coverage and which is applying for certification under this part or is certified under this part shall engage, on behalf of all participants and beneficiaries, a qualified health actuary who shall be responsible for the preparation of the materials comprising information necessary to be submitted by a qualified health actuary under this part. The qualified health actuary shall utilize such assumptions and techniques as are necessary to enable such actuary to form an opinion as to whether the contents of the matters reported under this part--CommentsClose CommentsPermalink





‘(1) are in the aggregate reasonably related to the experience of the plan and to reasonable expectations; andCommentsClose CommentsPermalink





‘(2) represent such actuary’s best estimate of anticipated experience under the plan.CommentsClose CommentsPermalink





The opinion by the qualified health actuary shall be made with respect to, and shall be made a part of, the annual report.CommentsClose CommentsPermalink

‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

‘Except as provided in section 809(b), an association health plan which is or has been certified under this part may terminate (upon or at any time after cessation of accruals in benefit liabilities) only if the board of trustees, not less than 60 days before the proposed termination date--CommentsClose CommentsPermalink





‘(1) provides to the participants and beneficiaries a written notice of intent to terminate stating that such termination is intended and the proposed termination date;CommentsClose CommentsPermalink





‘(2) develops a plan for winding up the affairs of the plan in connection with such termination in a manner which will result in timely payment of all benefits for which the plan is obligated; andCommentsClose CommentsPermalink





‘(3) submits such plan in writing to the applicable authority.CommentsClose CommentsPermalink





Actions required under this section shall be taken in such form and manner as may be prescribed by the applicable authority by regulation.CommentsClose CommentsPermalink

‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

‘(a) Actions To Avoid Depletion of Reserves- An association health plan which is certified under this part and which provides benefits other than health insurance coverage shall continue to meet the requirements of section 806, irrespective of whether such certification continues in effect. The board of trustees of such plan shall determine quarterly whether the requirements of section 806 are met. In any case in which the board determines that there is reason to believe that there is or will be a failure to meet such requirements, or the applicable authority makes such a determination and so notifies the board, the board shall immediately notify the qualified health actuary engaged by the plan, and such actuary shall, not later than the end of the next following month, make such recommendations to the board for corrective action as the actuary determines necessary to ensure compliance with section 806. Not later than 30 days after receiving from the actuary recommendations for corrective actions, the board shall notify the applicable authority (in such form and manner as the applicable authority may prescribe by regulation) of such recommendations of the actuary for corrective action, together with a description of the actions (if any) that the board has taken or plans to take in response to such recommendations. The board shall thereafter report to the applicable authority, in such form and frequency as the applicable authority may specify to the board, regarding corrective action taken by the board until the requirements of section 806 are met.CommentsClose CommentsPermalink





‘(b) Mandatory Termination- In any case in which--CommentsClose CommentsPermalink





‘(1) the applicable authority has been notified under subsection (a) (or by an issuer of excess/stop loss insurance or indemnity insurance pursuant to section 806(a)) of a failure of an association health plan which is or has been certified under this part and is described in section 806(a)(2) to meet the requirements of section 806 and has not been notified by the board of trustees of the plan that corrective action has restored compliance with such requirements; andCommentsClose CommentsPermalink





‘(2) the applicable authority determines that there is a reasonable expectation that the plan will continue to fail to meet the requirements of section 806,CommentsClose CommentsPermalink





the board of trustees of the plan shall, at the direction of the applicable authority, terminate the plan and, in the course of the termination, take such actions as the applicable authority may require, including satisfying any claims referred to in section 806(a)(2)(B)(iii) and recovering for the plan any liability under subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure that the affairs of the plan will be, to the maximum extent possible, wound up in a manner which will result in timely provision of all benefits for which the plan is obligated.CommentsClose CommentsPermalink

‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION HEALTH PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH INSURANCE COVERAGE.

‘(a) Appointment of Secretary as Trustee for Insolvent Plans- Whenever the Secretary determines that an association health plan which is or has been certified under this part and which is described in section 806(a)(2) will be unable to provide benefits when due or is otherwise in a financially hazardous condition, as shall be defined by the Secretary by regulation, the Secretary shall, upon notice to the plan, apply to the appropriate United States district court for appointment of the Secretary as trustee to administer the plan for the duration of the insolvency. The plan may appear as a party and other interested persons may intervene in the proceedings at the discretion of the court. The court shall appoint such Secretary trustee if the court determines that the trusteeship is necessary to protect the interests of the participants and beneficiaries or providers of medical care or to avoid any unreasonable deterioration of the financial condition of the plan. The trusteeship of such Secretary shall continue until the conditions described in the first sentence of this subsection are remedied or the plan is terminated.CommentsClose CommentsPermalink





‘(b) Powers as Trustee- The Secretary, upon appointment as trustee under subsection (a), shall have the power--CommentsClose CommentsPermalink





‘(1) to do any act authorized by the plan, this title, or other applicable provisions of law to be done by the plan administrator or any trustee of the plan;CommentsClose CommentsPermalink





‘(2) to require the transfer of all (or any part) of the assets and records of the plan to the Secretary as trustee;CommentsClose CommentsPermalink





‘(3) to invest any assets of the plan which the Secretary holds in accordance with the provisions of the plan, regulations prescribed by the Secretary, and applicable provisions of law;CommentsClose CommentsPermalink





‘(4) to require the sponsor, the plan administrator, any participating employer, and any employee organization representing plan participants to furnish any information with respect to the plan which the Secretary as trustee may reasonably need in order to administer the plan;CommentsClose CommentsPermalink





‘(5) to collect for the plan any amounts due the plan and to recover reasonable expenses of the trusteeship;CommentsClose CommentsPermalink





‘(6) to commence, prosecute, or defend on behalf of the plan any suit or proceeding involving the plan;CommentsClose CommentsPermalink





‘(7) to issue, publish, or file such notices, statements, and reports as may be required by the Secretary by regulation or required by any order of the court;CommentsClose CommentsPermalink





‘(8) to terminate the plan (or provide for its termination in accordance with section 809(b)) and liquidate the plan assets, to restore the plan to the responsibility of the sponsor, or to continue the trusteeship;CommentsClose CommentsPermalink





‘(9) to provide for the enrollment of plan participants and beneficiaries under appropriate coverage options; andCommentsClose CommentsPermalink





‘(10) to do such other acts as may be necessary to comply with this title or any order of the court and to protect the interests of plan participants and beneficiaries and providers of medical care.CommentsClose CommentsPermalink





‘(c) Notice of Appointment- As soon as practicable after the Secretary’s appointment as trustee, the Secretary shall give notice of such appointment to--CommentsClose CommentsPermalink





‘(1) the sponsor and plan administrator;CommentsClose CommentsPermalink





‘(2) each participant;CommentsClose CommentsPermalink





‘(3) each participating employer; andCommentsClose CommentsPermalink





‘(4) if applicable, each employee organization which, for purposes of collective bargaining, represents plan participants.CommentsClose CommentsPermalink





‘(d) Additional Duties- Except to the extent inconsistent with the provisions of this title, or as may be otherwise ordered by the court, the Secretary, upon appointment as trustee under this section, shall be subject to the same duties as those of a trustee under section 704 of title 11, United States Code, and shall have the duties of a fiduciary for purposes of this title.CommentsClose CommentsPermalink





‘(e) Other Proceedings- An application by the Secretary under this subsection may be filed notwithstanding the pendency in the same or any other court of any bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any proceeding to reorganize, conserve, or liquidate such plan or its property, or any proceeding to enforce a lien against property of the plan.CommentsClose CommentsPermalink





‘(f) Jurisdiction of Court-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Upon the filing of an application for the appointment as trustee or the issuance of a decree under this section, the court to which the application is made shall have exclusive jurisdiction of the plan involved and its property wherever located with the powers, to the extent consistent with the purposes of this section, of a court of the United States having jurisdiction over cases under chapter 11 of title 11, United States Code. Pending an adjudication under this section such court shall stay, and upon appointment by it of the Secretary as trustee, such court shall continue the stay of, any pending mortgage foreclosure, equity receivership, or other proceeding to reorganize, conserve, or liquidate the plan, the sponsor, or property of such plan or sponsor, and any other suit against any receiver, conservator, or trustee of the plan, the sponsor, or property of the plan or sponsor. Pending such adjudication and upon the appointment by it of the Secretary as trustee, the court may stay any proceeding to enforce a lien against property of the plan or the sponsor or any other suit against the plan or the sponsor.CommentsClose CommentsPermalink





‘(2) VENUE- An action under this section may be brought in the judicial district where the sponsor or the plan administrator resides or does business or where any asset of the plan is situated. A district court in which such action is brought may issue process with respect to such action in any other judicial district.CommentsClose CommentsPermalink





‘(g) Personnel- In accordance with regulations which shall be prescribed by the Secretary, the Secretary shall appoint, retain, and compensate accountants, actuaries, and other professional service personnel as may be necessary in connection with the Secretary’s service as trustee under this section.CommentsClose CommentsPermalink

‘SEC. 811. STATE ASSESSMENT AUTHORITY.

‘(a) In General- Notwithstanding section 514, a State may impose by law a contribution tax on an association health plan described in section 806(a)(2), if the plan commenced operations in such State after the date of the enactment of the Small Business Health Fairness Act of 2009.CommentsClose CommentsPermalink





‘(b) Contribution Tax- For purposes of this section, the term ‘contribution tax’ imposed by a State on an association health plan means any tax imposed by such State if--CommentsClose CommentsPermalink





‘(1) such tax is computed by applying a rate to the amount of premiums or contributions, with respect to individuals covered under the plan who are residents of such State, which are received by the plan from participating employers located in such State or from such individuals;CommentsClose CommentsPermalink





‘(2) the rate of such tax does not exceed the rate of any tax imposed by such State on premiums or contributions received by insurers or health maintenance organizations for health insurance coverage offered in such State in connection with a group health plan;CommentsClose CommentsPermalink





‘(3) such tax is otherwise nondiscriminatory; andCommentsClose CommentsPermalink





‘(4) the amount of any such tax assessed on the plan is reduced by the amount of any tax or assessment otherwise imposed by the State on premiums, contributions, or both received by insurers or health maintenance organizations for health insurance coverage, aggregate excess/stop loss insurance (as defined in section 806(g)(1)), specific excess/stop loss insurance (as defined in section 806(g)(2)), other insurance related to the provision of medical care under the plan, or any combination thereof provided by such insurers or health maintenance organizations in such State in connection with such plan.CommentsClose CommentsPermalink

‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.

‘(a) Definitions- For purposes of this part--CommentsClose CommentsPermalink





‘(1) GROUP HEALTH PLAN- The term ‘group health plan’ has the meaning provided in section 733(a)(1) (after applying subsection (b) of this section).CommentsClose CommentsPermalink





‘(2) MEDICAL CARE- The term ‘medical care’ has the meaning provided in section 733(a)(2).CommentsClose CommentsPermalink





‘(3) HEALTH INSURANCE COVERAGE- The term ‘health insurance coverage’ has the meaning provided in section 733(b)(1).CommentsClose CommentsPermalink





‘(4) HEALTH INSURANCE ISSUER- The term ‘health insurance issuer’ has the meaning provided in section 733(b)(2).CommentsClose CommentsPermalink





‘(5) APPLICABLE AUTHORITY- The term ‘applicable authority’ means the Secretary, except that, in connection with any exercise of the Secretary’s authority regarding which the Secretary is required under section 506(d) to consult with a State, such term means the Secretary, in consultation with such State.CommentsClose CommentsPermalink





‘(6) HEALTH STATUS-RELATED FACTOR- The term ‘health status-related factor’ has the meaning provided in section 733(d)(2).CommentsClose CommentsPermalink





‘(7) INDIVIDUAL MARKET-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘individual market’ means the market for health insurance coverage offered to individuals other than in connection with a group health plan.CommentsClose CommentsPermalink





‘(B) TREATMENT OF VERY SMALL GROUPS-CommentsClose CommentsPermalink





‘(i) IN GENERAL- Subject to clause (ii), such term includes coverage offered in connection with a group health plan that has fewer than 2 participants as current employees or participants described in section 732(d)(3) on the first day of the plan year.CommentsClose CommentsPermalink





‘(ii) STATE EXCEPTION- Clause (i) shall not apply in the case of health insurance coverage offered in a State if such State regulates the coverage described in such clause in the same manner and to the same extent as coverage in the small group market (as defined in section 2791(e)(5) of the Public Health Service Act) is regulated by such State.CommentsClose CommentsPermalink





‘(8) PARTICIPATING EMPLOYER- The term ‘participating employer’ means, in connection with an association health plan, any employer, if any individual who is an employee of such employer, a partner in such employer, or a self-employed individual who is such employer (or any dependent, as defined under the terms of the plan, of such individual) is or was covered under such plan in connection with the status of such individual as such an employee, partner, or self-employed individual in relation to the plan.CommentsClose CommentsPermalink





‘(9) APPLICABLE STATE AUTHORITY- The term ‘applicable State authority’ means, with respect to a health insurance issuer in a State, the State insurance commissioner or official or officials designated by the State to enforce the requirements of title XXVII of the Public Health Service Act for the State involved with respect to such issuer.CommentsClose CommentsPermalink





‘(10) QUALIFIED HEALTH ACTUARY- The term ‘qualified health actuary’ means an individual who is a member of the American Academy of Actuaries with expertise in health care.CommentsClose CommentsPermalink





‘(11) AFFILIATED MEMBER- The term ‘affiliated member’ means, in connection with a sponsor--CommentsClose CommentsPermalink





‘(A) a person who is otherwise eligible to be a member of the sponsor but who elects an affiliated status with the sponsor,CommentsClose CommentsPermalink





‘(B) in the case of a sponsor with members which consist of associations, a person who is a member of any such association and elects an affiliated status with the sponsor, orCommentsClose CommentsPermalink





‘(C) in the case of an association health plan in existence on the date of the enactment of the Small Business Health Fairness Act of 2009, a person eligible to be a member of the sponsor or one of its member associations.CommentsClose CommentsPermalink





‘(12) LARGE EMPLOYER- The term ‘large employer’ means, in connection with a group health plan with respect to a plan year, an employer who employed an average of at least 51 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year.CommentsClose CommentsPermalink





‘(13) SMALL EMPLOYER- The term ‘small employer’ means, in connection with a group health plan with respect to a plan year, an employer who is not a large employer.CommentsClose CommentsPermalink





‘(b) Rules of Construction-CommentsClose CommentsPermalink





‘(1) EMPLOYERS AND EMPLOYEES- For purposes of determining whether a plan, fund, or program is an employee welfare benefit plan which is an association health plan, and for purposes of applying this title in connection with such plan, fund, or program so determined to be such an employee welfare benefit plan--CommentsClose CommentsPermalink





‘(A) in the case of a partnership, the term ‘employer’ (as defined in section 3(5)) includes the partnership in relation to the partners, and the term ‘employee’ (as defined in section 3(6)) includes any partner in relation to the partnership; andCommentsClose CommentsPermalink





‘(B) in the case of a self-employed individual, the term ‘employer’ (as defined in section 3(5)) and the term ‘employee’ (as defined in section 3(6)) shall include such individual.CommentsClose CommentsPermalink





‘(2) PLANS, FUNDS, AND PROGRAMS TREATED AS EMPLOYEE WELFARE BENEFIT PLANS- In the case of any plan, fund, or program which was established or is maintained for the purpose of providing medical care (through the purchase of insurance or otherwise) for employees (or their dependents) covered thereunder and which demonstrates to the Secretary that all requirements for certification under this part would be met with respect to such plan, fund, or program if such plan, fund, or program were a group health plan, such plan, fund, or program shall be treated for purposes of this title as an employee welfare benefit plan on and after the date of such demonstration.’.CommentsClose CommentsPermalink





(b) Conforming Amendments to Preemption Rules-CommentsClose CommentsPermalink





(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(E) The preceding subparagraphs of this paragraph do not apply with respect to any State law in the case of an association health plan which is certified under part 8.’.CommentsClose CommentsPermalink





(2) Section 514 of such Act (29 U.S.C. 1144) is amended--CommentsClose CommentsPermalink





(A) in subsection (b)(4), by striking ‘Subsection (a)’ and inserting ‘Subsections (a) and (d)’;CommentsClose CommentsPermalink





(B) in subsection (b)(5), by striking ‘subsection (a)’ in subparagraph (A) and inserting ‘subsection (a) of this section and subsections (a)(2)(B) and (b) of section 805’, and by striking ‘subsection (a)’ in subparagraph (B) and inserting ‘subsection (a) of this section or subsection (a)(2)(B) or (b) of section 805’;CommentsClose CommentsPermalink





(C) by redesignating subsection (d) as subsection (e); andCommentsClose CommentsPermalink





(D) by inserting after subsection (c) the following new subsection:CommentsClose CommentsPermalink





‘(d)(1) Except as provided in subsection (b)(4), the provisions of this title shall supersede any and all State laws insofar as they may now or hereafter preclude, or have the effect of precluding, a health insurance issuer from offering health insurance coverage in connection with an association health plan which is certified under part 8.CommentsClose CommentsPermalink





‘(2) Except as provided in paragraphs (4) and (5) of subsection (b) of this section--CommentsClose CommentsPermalink





‘(A) In any case in which health insurance coverage of any policy type is offered under an association health plan certified under part 8 to a participating employer operating in such State, the provisions of this title shall supersede any and all laws of such State insofar as they may preclude a health insurance issuer from offering health insurance coverage of the same policy type to other employers operating in the State which are eligible for coverage under such association health plan, whether or not such other employers are participating employers in such plan.CommentsClose CommentsPermalink





‘(B) In any case in which health insurance coverage of any policy type is offered in a State under an association health plan certified under part 8 and the filing, with the applicable State authority (as defined in section 812(a)(9)), of the policy form in connection with such policy type is approved by such State authority, the provisions of this title shall supersede any and all laws of any other State in which health insurance coverage of such type is offered, insofar as they may preclude, upon the filing in the same form and manner of such policy form with the applicable State authority in such other State, the approval of the filing in such other State.CommentsClose CommentsPermalink





‘(3) Nothing in subsection (b)(6)(E) or the preceding provisions of this subsection shall be construed, with respect to health insurance issuers or health insurance coverage, to supersede or impair the law of any State--CommentsClose CommentsPermalink





‘(A) providing solvency standards or similar standards regarding the adequacy of insurer capital, surplus, reserves, or contributions, orCommentsClose CommentsPermalink





‘(B) relating to prompt payment of claims.CommentsClose CommentsPermalink





‘(4) For additional provisions relating to association health plans, see subsections (a)(2)(B) and (b) of section 805.CommentsClose CommentsPermalink





‘(5) For purposes of this subsection, the term ‘association health plan’ has the meaning provided in section 801(a), and the terms ‘health insurance coverage’, ‘participating employer’, and ‘health insurance issuer’ have the meanings provided such terms in section 812, respectively.’.CommentsClose CommentsPermalink





(3) Section 514(b)(6)(A) of such Act (29 U.S.C. 1144(b)(6)(A)) is amended--CommentsClose CommentsPermalink





(A) in clause (i)(II), by striking ‘and’ at the end;CommentsClose CommentsPermalink





(B) in clause (ii), by inserting ‘and which does not provide medical care (within the meaning of section 733(a)(2)),’ after ‘arrangement,’, and by striking ‘title.’ and inserting ‘title, and’; andCommentsClose CommentsPermalink





(C) by adding at the end the following new clause:CommentsClose CommentsPermalink





‘(iii) subject to subparagraph (E), in the case of any other employee welfare benefit plan which is a multiple employer welfare arrangement and which provides medical care (within the meaning of section 733(a)(2)), any law of any State which regulates insurance may apply.’.CommentsClose CommentsPermalink





(4) Section 514(e) of such Act (as redesignated by paragraph (2)(C)) is amended--CommentsClose CommentsPermalink





(A) by striking ‘Nothing’ and inserting ‘(1) Except as provided in paragraph (2), nothing’; andCommentsClose CommentsPermalink





(B) by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(2) Nothing in any other provision of law enacted on or after the date of the enactment of the Small Business Health Fairness Act of 2009 shall be construed to alter, amend, modify, invalidate, impair, or supersede any provision of this title, except by specific cross-reference to the affected section.’.CommentsClose CommentsPermalink





(c) Plan Sponsor- Section 3(16)(B) of such Act (29 U.S.C. 102(16)(B)) is amended by adding at the end the following new sentence: ‘Such term also includes a person serving as the sponsor of an association health plan under part 8.’.CommentsClose CommentsPermalink





(d) Disclosure of Solvency Protections Related to Self-Insured and Fully Insured Options Under Association Health Plans- Section 102(b) of such Act (29 U.S.C. 102(b)) is amended by adding at the end the following: ‘An association health plan shall include in its summary plan description, in connection with each benefit option, a description of the form of solvency or guarantee fund protection secured pursuant to this Act or applicable State law, if any.’.CommentsClose CommentsPermalink





(e) Savings Clause- Section 731(c) of such Act is amended by inserting ‘or part 8’ after ‘this part’.CommentsClose CommentsPermalink





(f) Report to the Congress Regarding Certification of Self-Insured Association Health Plans- Not later than January 1, 2012, the Secretary of Labor shall report to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate the effect association health plans have had, if any, on reducing the number of uninsured individuals.CommentsClose CommentsPermalink





(g) Clerical Amendment- The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by inserting after the item relating to section 734 the following new items:CommentsClose CommentsPermalink

‘Part 8--Rules Governing Association Health Plans

‘801. Association health plans.CommentsClose CommentsPermalink





‘802. Certification of association health plans.CommentsClose CommentsPermalink





‘803. Requirements relating to sponsors and boards of trustees.CommentsClose CommentsPermalink





‘804. Participation and coverage requirements.CommentsClose CommentsPermalink





‘805. Other requirements relating to plan documents, contribution rates, and benefit options.CommentsClose CommentsPermalink





‘806. Maintenance of reserves and provisions for solvency for plans providing health benefits in addition to health insurance coverage.CommentsClose CommentsPermalink





‘807. Requirements for application and related requirements.CommentsClose CommentsPermalink





‘808. Notice requirements for voluntary termination.CommentsClose CommentsPermalink





‘809. Corrective actions and mandatory termination.CommentsClose CommentsPermalink





‘810. Trusteeship by the Secretary of insolvent association health plans providing health benefits in addition to health insurance coverage.CommentsClose CommentsPermalink





‘811. State assessment authority.CommentsClose CommentsPermalink





‘812. Definitions and rules of construction.’.CommentsClose CommentsPermalink