Display Version Introduced in House

HR 3713 IHCommentsClose CommentsPermalink

111th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

H. R. 3713CommentsClose CommentsPermalink

To provide bipartisan solutions to lower health costs, increase access to affordable coverage, and give patients more choices and control.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

October 1, 2009CommentsClose CommentsPermalink

Mr. ROGERS of Michigan (for himself, Mrs. BLACKBURN, Mr. SHIMKUS, Mr. PITTS, Mrs. MYRICK, Mrs. BONO MACK, Mr. BUYER, Mr. UPTON, and Mr. HALL of Texas) 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, Appropriations, and the Judiciary, 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

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A BILLCommentsClose CommentsPermalink

To provide bipartisan solutions to lower health costs, increase access to affordable coverage, and give patients more choices and control.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 ‘American Health Care Solutions Act of 2009’.CommentsClose CommentsPermalink





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





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





Sec. 2. Rule of construction regarding prohibition on authority to ration health care.CommentsClose CommentsPermalink

TITLE I--EXPANDING ACCESS TO COVERAGE

Subtitle A--Protecting Affordability Through Reinsurance or High Risk Pooling

Sec. 101. Ensuring affordability for all through special pooling of cost for those with pre-existing conditions and many health care needs.CommentsClose CommentsPermalink

Subtitle B--Individual Membership Associations

Sec. 111. Expansion of access and choice of health insurance coverage through individual membership associations (IMAs).CommentsClose CommentsPermalink

Subtitle C--Association Health Plans

Sec. 121. Rules governing association health plans.CommentsClose CommentsPermalink





Sec. 122. Clarification of treatment of single employer arrangements.CommentsClose CommentsPermalink





Sec. 123. Enforcement provisions relating to association health plans.CommentsClose CommentsPermalink





Sec. 124. Cooperation between Federal and State authorities.CommentsClose CommentsPermalink





Sec. 125. Effective date and transitional and other rules.CommentsClose CommentsPermalink

Subtitle D--Purchasing Insurance Across State Lines

Sec. 131. Cooperative governing of individual health insurance coverage.CommentsClose CommentsPermalink





Sec. 132. Severability.CommentsClose CommentsPermalink

Subtitle E--Protecting Patients From Rescissions

Sec. 141. Opportunity for independent, external third party reviews of certain nonrenewals and discontinuations, including rescissions, of individual health insurance coverage.CommentsClose CommentsPermalink

TITLE II--PROMOTING PATIENT CHOICE

Subtitle A--Credit for Small Employers Adopting Auto-Enrollment and Defined Contribution Options

Sec. 201. Credit for small employers adopting auto-enrollment and defined contribution options.CommentsClose CommentsPermalink

Subtitle B--Tax Incentives for Long-Term Care Insurance

Sec. 211. Treatment of premiums on qualified long-term care insurance contracts.CommentsClose CommentsPermalink





Sec. 212. Credit for taxpayers with long-term care needs.CommentsClose CommentsPermalink





Sec. 213. Additional consumer protections for long-term care insurance.CommentsClose CommentsPermalink

Subtitle C--Comparative Effectiveness Research

Sec. 221. Prohibition on Certain Uses of Data Obtained from Comparative Effectiveness Research; Accounting for Personalized Medicine and Differences in Patient Treatment Response.CommentsClose CommentsPermalink

Subtitle D--Programs of Health Promotion or Disease Prevention

Sec. 231. Programs of health promotion or disease prevention.CommentsClose CommentsPermalink

TITLE III--STRENGTHENING SAFETY NET PROGRAMS

Subtitle A--Beneficiary Choice Under Medicaid and SCHIP

Sec. 301. Easing administrative barriers to State cooperation with employer-sponsored insurance coverage.CommentsClose CommentsPermalink





Sec. 302. Improving beneficiary choice in SCHIP.CommentsClose CommentsPermalink





Sec. 303. Application to Medicaid.CommentsClose CommentsPermalink





Sec. 304. Expansion of health opportunity account program.CommentsClose CommentsPermalink





Sec. 305. Verification requirements to prevent illegal aliens from receiving Medicaid benefits.CommentsClose CommentsPermalink

Subtitle B--Community Health Centers

Sec. 311. Increased funding.CommentsClose CommentsPermalink

TITLE IV--EXPANDING HEALTH SAVINGS ACCOUNTS

Sec. 401. Allow both spouses to make catch-up contributions to the same HSA account.CommentsClose CommentsPermalink





Sec. 402. Provisions relating to Medicare.CommentsClose CommentsPermalink





Sec. 403. Individuals eligible for veterans benefits for a service-connected disability.CommentsClose CommentsPermalink





Sec. 404. Individuals eligible for Indian Health Service assistance.CommentsClose CommentsPermalink





Sec. 405. FSA and HRA termination to fund HSAS.CommentsClose CommentsPermalink





Sec. 406. Purchase of health insurance from HSA account.CommentsClose CommentsPermalink





Sec. 407. Special rule for certain medical expenses incurred before establishment of account.CommentsClose CommentsPermalink





Sec. 408. Preventive care prescription drug clarification.CommentsClose CommentsPermalink





Sec. 409. Qualified medical expenses.CommentsClose CommentsPermalink

TITLE V--MEDICAL LIABILITY REFORM

Subtitle A--Medical Liability

Sec. 501. Encouraging speedy resolution of claims.CommentsClose CommentsPermalink





Sec. 502. Compensating patient injury.CommentsClose CommentsPermalink





Sec. 503. Maximizing patient recovery.CommentsClose CommentsPermalink





Sec. 504. Additional health benefits.CommentsClose CommentsPermalink





Sec. 505. Punitive damages.CommentsClose CommentsPermalink





Sec. 506. Authorization of payment of future damages to claimants in HEALTH care lawsuits.CommentsClose CommentsPermalink





Sec. 507. Definitions.CommentsClose CommentsPermalink





Sec. 508. Effect on other laws.CommentsClose CommentsPermalink





Sec. 509. State flexibility and protection of states’ rights.CommentsClose CommentsPermalink





Sec. 510. Applicability; effective date.CommentsClose CommentsPermalink





Sec. 511. Sense of Congress.CommentsClose CommentsPermalink

Subtitle B--Liability Protection for Community Health Center Volunteers

Sec. 521. Health centers under Public Health Service Act; liability protections for volunteer practitioners.CommentsClose CommentsPermalink

TITLE VI--MISCELLANEOUS

Subtitle A--Fighting Fraud and Abuse

Sec. 601. Provide adequate funding to HHS OIG and HCFAC.CommentsClose CommentsPermalink





Sec. 602. Increased civil money penalties and criminal fines for Medicare fraud and abuse.CommentsClose CommentsPermalink





Sec. 603. Increased sentences for felonies involving Medicare fraud and abuse.CommentsClose CommentsPermalink





Sec. 604. Illegal distribution of a Medicare or Medicaid beneficiary identification or provider number.CommentsClose CommentsPermalink





Sec. 605. Use of technology for real-time data review.CommentsClose CommentsPermalink

Subtitle B--State Transparency Plan Portal

Sec. 611. Providing information on health coverage options and health care providers.CommentsClose CommentsPermalink





Sec. 612. Establishment of performance-based quality measures.CommentsClose CommentsPermalink

Subtitle C--Medicare Accountable Care Organization Demonstration Program

Sec. 621. Medicare Accountable Care Organization demonstration program.CommentsClose CommentsPermalink

Subtitle D--Repeal of Unused Stimulus Funds

Sec. 631. Rescission and repeal in ARRA.CommentsClose CommentsPermalink

SEC. 2. RULE OF CONSTRUCTION REGARDING PROHIBITION ON AUTHORITY TO RATION HEALTH CARE.

Nothing in this Act may be construed to authorize the Federal Government to ration health care for the American people.CommentsClose CommentsPermalink

TITLE I--EXPANDING ACCESS TO COVERAGECommentsClose CommentsPermalink

Subtitle A--Protecting Affordability Through Reinsurance or High Risk PoolingCommentsClose CommentsPermalink

SEC. 101. ENSURING AFFORDABILITY FOR ALL THROUGH SPECIAL POOLING OF COST FOR THOSE WITH PRE-EXISTING CONDITIONS AND MANY HEALTH CARE NEEDS.

(a) State Requirement-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 2 years after the date of the enactment of this Act, each State shall ensure an adequate financial backstop to mitigate the cost of high risk individuals in the State through--CommentsClose CommentsPermalink





(A) a qualified State reinsurance program described in subsection (b); orCommentsClose CommentsPermalink





(B) a qualifying State high risk pool described in subsection (c)(1); andCommentsClose CommentsPermalink





(C) subject to paragraph (4), contribute to the ongoing stability of the arrangement through State assessments or allocation of other State funds that are not otherwise used on State health care programs.CommentsClose CommentsPermalink





(2) PREFERENCE- Beginning 3 years after the date of the enactment of this Act, the Secretary, in awarding any competitive grant and for which only States are eligible to apply, shall give preference to a State with a program that meets the requirements of paragraph (1).CommentsClose CommentsPermalink





(3) RELATION TO CURRENT QUALIFIED HIGH RISK POOL PROGRAM OPERATING A QUALIFIED HIGH RISK POOL- In the case of a State that is operating a current section 2745 qualified high risk pool as of the date of the enactment of this Act--CommentsClose CommentsPermalink





(A) as of the date that is 2 years after the date of the enactment of this Act, such a pool shall not be treated as a qualified high risk pool under section 2745 of the Public Health Service Act (42 U.S.C. 300gg-45) unless the pool is a qualifying State high risk pool described in subsection (c)(1); andCommentsClose CommentsPermalink





(B) current funding sources may be used to transition from operation of such a pool to operation of a qualified State reinsurance program described in subsection (b).CommentsClose CommentsPermalink





(4) APPLICATION OF FUNDS- If the program or pool operated under paragraph (1)(A) is in sound financial condition as demonstrated by audited financial statements and actuarial certification and is approved as an appropriate financial backstop by the State Insurance Commissioner involved, the requirement of paragraph (1)(C) shall be waived.CommentsClose CommentsPermalink





(b) Qualified State Reinsurance Program-CommentsClose CommentsPermalink





(1) FORM OF PROGRAM- A qualified State reinsurance program may provide reinsurance--CommentsClose CommentsPermalink





(A) on a prospective or retrospective basis; andCommentsClose CommentsPermalink





(B) on a basis that protects health insurance issuers against the annual aggregate spending of their enrollees as well as purchase protection against individual catastrophic costs.CommentsClose CommentsPermalink





(2) SATISFACTION OF HIPAA REQUIREMENT- A qualified State reinsurance program shall be deemed, for purposes of section 2745 of the Public Health Service Act (42 U.S.C. 300gg-45), to be a qualified high-risk pool under such section.CommentsClose CommentsPermalink





(c) Qualifying State High Risk Pool-CommentsClose CommentsPermalink





(1) IN GENERAL- A qualifying State high risk pool described in this subsection means a current section 2745 qualified high risk pool that meets the following requirements:CommentsClose CommentsPermalink





(A) The pool offers assistance to low-income individuals as applicable and may incorporate applicable Federal and State programs for eligible individuals to meet this purpose.CommentsClose CommentsPermalink





(B) The pool provides a variety of coverage options, one of which must be a high deductible health plan that may be coupled with a health savings account.CommentsClose CommentsPermalink





(C) The pool is funded with a stable funding source that is not solely dependent on an appropriation from a State legislature.CommentsClose CommentsPermalink





(D) The pool eliminates waiting lists and pre-existing conditions exclusionary periods so that all eligible residents who are seeking coverage through the pool can receive coverage through the pool.CommentsClose CommentsPermalink





(E) The pool allows for coverage of individuals who, but for the 24-month disability waiting period under section 226(b) of the Social Security Act, would be eligible for Medicare during the period of such waiting period.CommentsClose CommentsPermalink





(F) The pool does not charge participants more than 150 percent of the average premium for individual market coverage in that State.CommentsClose CommentsPermalink





(G) The pool conducts education and outreach initiatives so that residents and brokers understand that the pool is available to eligible residents.CommentsClose CommentsPermalink





(H) The pool does not impose lifetime or annual limits on benefits.CommentsClose CommentsPermalink





(2) RELATION TO SECTION 2745- As of the date that is 2 years after the date of the enactment of this Act, a pool shall not qualify as a qualified high risk pool under section 2745 of the Public Health Service Act (42 U.S.C. 300gg-45) unless the pool is a qualifying State high risk pool described in paragraph (1).CommentsClose CommentsPermalink





(d) Waivers- In order to accommodate new and innovative programs, the Secretary may waive such requirements of this section for qualified State reinsurance programs and for qualifying State high risk pools as the Secretary deems appropriate.CommentsClose CommentsPermalink





(e) Funding- In addition to any other amounts appropriated, there are authorized to be appropriated to carry out section 2745 of the Public Health Service Act (42 U.S.C. 300gg-45) (including through a program or pool described in subsection (a)(1)), $20,000,000,000 for Fiscal Years 2010 through 2019 to carry out this section.CommentsClose CommentsPermalink





(f) Definitions- In this section:CommentsClose CommentsPermalink





(1) CURRENT SECTION 2745 QUALIFIED HIGH RISK POOL- The term ‘current section 2745 qualified high risk pool’ has the meaning given the term ‘qualified high risk pool’ under section 2745(g) of the Public Health Service Act (42 U.S.C. 300gg-45(g)) as in effect as of the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) HEALTH INSURANCE COVERAGE- The term ‘health insurance coverage’ has the meaning given such term in section 2791 of the Public Health Service Act (42 U.S.C. 300gg-91).CommentsClose CommentsPermalink





(3) HEALTH INSURANCE ISSUER- The term ‘health insurance issuer’ has the meaning given such term in section 2791 of the Public Health Service Act (42 U.S.C. 300gg-91).CommentsClose CommentsPermalink





(4) QUALIFIED STATE REINSURANCE PROGRAM- The term ‘qualified State reinsurance program’ means a program operated by a State or a State authorized program that provides reinsurance for health insurance coverage offered in the individual or the small group market in accordance with the model for such a program established (as of the date of the enactment of this Act).CommentsClose CommentsPermalink





(5) SECRETARY- The term ‘Secretary’ means the Secretary of Health and Human Services.CommentsClose CommentsPermalink





(6) STATE- The term ‘State’ has the meaning given such term for purposes of title XIX of the Social Security Act.CommentsClose CommentsPermalink

Subtitle B--Individual Membership AssociationsCommentsClose CommentsPermalink

SEC. 111. EXPANSION OF ACCESS AND CHOICE OF HEALTH INSURANCE COVERAGE THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS).

The Public Health Service Act (42 U.S.C. 201 et seq.) 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, andCommentsClose 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, health 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 C--Association Health PlansCommentsClose CommentsPermalink

SEC. 121. 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.CommentsClose 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 (42 U.S.C. 300gg-11) 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 (42 U.S.C. 300gg-91(d)(3))),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 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 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 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.CommentsClose 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 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 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 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 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 actuary who shall be responsible for the preparation of the materials comprising information necessary to be submitted by a qualified actuary under this part. The qualified actuary shall utilize such assumptions and techniques as are necessary to enable such actuary to form an opinion as to whether the contents of the matters reported under this part--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 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 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 (42 U.S.C. 300gg-91(e)(5)) 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 (42 U.S.C. 300hh et seq.) for the State involved with respect to such issuer.CommentsClose CommentsPermalink





‘(10) QUALIFIED ACTUARY- The term ‘qualified actuary’ means an individual who is a member of the American Academy of Actuaries.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

SEC. 122. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER ARRANGEMENTS.

Section 3(40)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--CommentsClose CommentsPermalink





(1) in clause (i), by inserting after ‘control group,’ the following: ‘except that, in any case in which the benefit referred to in subparagraph (A) consists of medical care (as defined in section 812(a)(2)), two or more trades or businesses, whether or not incorporated, shall be deemed a single employer for any plan year of such plan, or any fiscal year of such other arrangement, if such trades or businesses are within the same control group during such year or at any time during the preceding 1-year period,’;CommentsClose CommentsPermalink





(2) in clause (iii), by striking ‘(iii) the determination’ and inserting the following:CommentsClose CommentsPermalink





‘(iii)(I) in any case in which the benefit referred to in subparagraph (A) consists of medical care (as defined in section 812(a)(2)), the determination of whether a trade or business is under ‘common control’ with another trade or business shall be determined under regulations of the Secretary applying principles consistent and coextensive with the principles applied in determining whether employees of two or more trades or businesses are treated as employed by a single employer under section 4001(b), except that, for purposes of this paragraph, an interest of greater than 25 percent may not be required as the minimum interest necessary for common control, orCommentsClose CommentsPermalink





‘(II) in any other case, the determination’;CommentsClose CommentsPermalink





(3) by redesignating clauses (iv) and (v) as clauses (v) and (vi), respectively; andCommentsClose CommentsPermalink





(4) by inserting after clause (iii) the following new clause:CommentsClose CommentsPermalink





‘(iv) in any case in which the benefit referred to in subparagraph (A) consists of medical care (as defined in section 812(a)(2)), in determining, after the application of clause (i), whether benefits are provided to employees of two or more employers, the arrangement shall be treated as having only one participating employer if, after the application of clause (i), the number of individuals who are employees and former employees of any one participating employer and who are covered under the arrangement is greater than 75 percent of the aggregate number of all individuals who are employees or former employees of participating employers and who are covered under the arrangement,’.CommentsClose CommentsPermalink

SEC. 123. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH PLANS.

(a) Criminal Penalties for Certain Willful Misrepresentations- Section 501 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1131) is amended--CommentsClose CommentsPermalink





(1) by inserting ‘(a)’ after ‘Sec. 501.’; andCommentsClose CommentsPermalink





(2) by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(b) Any person who willfully falsely represents, to any employee, any employee’s beneficiary, any employer, the Secretary, or any State, a plan or other arrangement established or maintained for the purpose of offering or providing any benefit described in section 3(1) to employees or their beneficiaries as--CommentsClose CommentsPermalink





‘(1) being an association health plan which has been certified under part 8;CommentsClose CommentsPermalink





‘(2) having been established or maintained under or pursuant to one or more collective bargaining agreements which are reached pursuant to collective bargaining described in section 8(d) of the National Labor Relations Act (29 U.S.C. 158(d)) or paragraph Fourth of section 2 of the Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which are reached pursuant to labor-management negotiations under similar provisions of State public employee relations laws; orCommentsClose CommentsPermalink





‘(3) being a plan or arrangement described in section 3(40)(A)(i),CommentsClose CommentsPermalink





shall, upon conviction, be imprisoned not more than 5 years, be fined under title 18, United States Code, or both.’.CommentsClose CommentsPermalink





(b) Cease Activities Orders- Section 502 of such Act (29 U.S.C. 1132) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(n) Association Health Plan Cease and Desist Orders-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Subject to paragraph (2), upon application by the Secretary showing the operation, promotion, or marketing of an association health plan (or similar arrangement providing benefits consisting of medical care (as defined in section 733(a)(2))) that--CommentsClose CommentsPermalink





‘(A) is not certified under part 8, is subject under section 514(b)(6) to the insurance laws of any State in which the plan or arrangement offers or provides benefits, and is not licensed, registered, or otherwise approved under the insurance laws of such State; orCommentsClose CommentsPermalink





‘(B) is an association health plan certified under part 8 and is not operating in accordance with the requirements under part 8 for such certification,CommentsClose CommentsPermalink





a district court of the United States shall enter an order requiring that the plan or arrangement cease activities.CommentsClose CommentsPermalink





‘(2) EXCEPTION- Paragraph (1) shall not apply in the case of an association health plan or other arrangement if the plan or arrangement shows that--CommentsClose CommentsPermalink





‘(A) all benefits under it referred to in paragraph (1) consist of health insurance coverage; andCommentsClose CommentsPermalink





‘(B) with respect to each State in which the plan or arrangement offers or provides benefits, the plan or arrangement is operating in accordance with applicable State laws that are not superseded under section 514.CommentsClose CommentsPermalink





‘(3) ADDITIONAL EQUITABLE RELIEF- The court may grant such additional equitable relief, including any relief available under this title, as it deems necessary to protect the interests of the public and of persons having claims for benefits against the plan.’.CommentsClose CommentsPermalink





(c) Responsibility for Claims Procedure- Section 503 of such Act (29 U.S.C. 1133) is amended by inserting ‘(a) In General- ’ before ‘In accordance’, and by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(b) Association Health Plans- The terms of each association health plan which is or has been certified under part 8 shall require the board of trustees or the named fiduciary (as applicable) to ensure that the requirements of this section are met in connection with claims filed under the plan.’.CommentsClose CommentsPermalink

SEC. 124. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

Section 506 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1136) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(d) Consultation With States With Respect to Association Health Plans-CommentsClose CommentsPermalink





‘(1) AGREEMENTS WITH STATES- The Secretary shall consult with the State recognized under paragraph (2) with respect to an association health plan regarding the exercise of--CommentsClose CommentsPermalink





‘(A) the Secretary’s authority under sections 502 and 504 to enforce the requirements for certification under part 8; andCommentsClose CommentsPermalink





‘(B) the Secretary’s authority to certify association health plans under part 8 in accordance with regulations of the Secretary applicable to certification under part 8.CommentsClose CommentsPermalink





‘(2) RECOGNITION OF PRIMARY DOMICILE STATE- In carrying out paragraph (1), the Secretary shall ensure that only one State will be recognized, with respect to any particular association health plan, as the State with which consultation is required. In carrying out this paragraph--CommentsClose CommentsPermalink





‘(A) in the case of a plan which provides health insurance coverage (as defined in section 812(a)(3)), such State shall be the State with which filing and approval of a policy type offered by the plan was initially obtained, andCommentsClose CommentsPermalink





‘(B) in any other case, the Secretary shall take into account the places of residence of the participants and beneficiaries under the plan and the State in which the trust is maintained.’.CommentsClose CommentsPermalink

SEC. 125. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

(a) Effective Date- The amendments made by this subtitle shall take effect 1 year after the date of the enactment of this Act. The Secretary of Labor shall first issue all regulations necessary to carry out the amendments made by this subtitle within 1 year after the date of the enactment of this Act.CommentsClose CommentsPermalink





(b) Treatment of Certain Existing Health Benefits Programs-CommentsClose CommentsPermalink





(1) IN GENERAL- In any case in which, as of the date of the enactment of this Act, an arrangement is maintained in a State for the purpose of providing benefits consisting of medical care for the employees and beneficiaries of its participating employers, at least 200 participating employers make contributions to such arrangement, such arrangement has been in existence for at least 10 years, and such arrangement is licensed under the laws of one or more States to provide such benefits to its participating employers, upon the filing with the applicable authority (as defined in section 812(a)(5) of the Employee Retirement Income Security Act of 1974 (as amended by this subtitle)) by the arrangement of an application for certification of the arrangement under part 8 of subtitle B of title I of such Act--CommentsClose CommentsPermalink





(A) such arrangement shall be deemed to be a group health plan for purposes of title I of such Act;CommentsClose CommentsPermalink





(B) the requirements of sections 801(a) and 803(a) of the Employee Retirement Income Security Act of 1974 shall be deemed met with respect to such arrangement;CommentsClose CommentsPermalink





(C) the requirements of section 803(b) of such Act shall be deemed met, if the arrangement is operated by a board of directors which--CommentsClose CommentsPermalink





(i) is elected by the participating employers, with each employer having one vote; andCommentsClose CommentsPermalink





(ii) has complete fiscal control over the arrangement and which is responsible for all operations of the arrangement;CommentsClose CommentsPermalink





(D) the requirements of section 804(a) of such Act shall be deemed met with respect to such arrangement; andCommentsClose CommentsPermalink





(E) the arrangement may be certified by any applicable authority with respect to its operations in any State only if it operates in such State on the date of certification.CommentsClose CommentsPermalink





The provisions of this subsection shall cease to apply with respect to any such arrangement at such time after the date of the enactment of this Act as the applicable requirements of this subsection are not met with respect to such arrangement.CommentsClose CommentsPermalink





(2) DEFINITIONS- For purposes of this subsection, the terms ‘group health plan’, ‘medical care’, and ‘participating employer’ shall have the meanings provided in section 812 of the Employee Retirement Income Security Act of 1974, except that the reference in paragraph (7) of such section to an ‘association health plan’ shall be deemed a reference to an arrangement referred to in this subsection.CommentsClose CommentsPermalink

Subtitle D--Purchasing Insurance Across State LinesCommentsClose CommentsPermalink

SEC. 131. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE.

(a) In General- Title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.) is amended by adding at the end the following new part:CommentsClose CommentsPermalink

‘PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE

‘SEC. 2795. DEFINITIONS.

‘In this part:CommentsClose CommentsPermalink





‘(1) PRIMARY STATE- The term ‘primary State’ means, with respect to individual health insurance coverage offered by a health insurance issuer, the State designated by the issuer as the State whose covered laws shall govern the health insurance issuer in the sale of such coverage under this part. An issuer, with respect to a particular policy, may only designate one such State as its primary State with respect to all such coverage it offers. Such an issuer may not change the designated primary State with respect to individual health insurance coverage once the policy is issued, except that such a change may be made upon renewal of the policy. With respect to such designated State, the issuer is deemed to be doing business in that State.CommentsClose CommentsPermalink





‘(2) SECONDARY STATE- The term ‘secondary State’ means, with respect to individual health insurance coverage offered by a health insurance issuer, any State that is not the primary State. In the case of a health insurance issuer that is selling a policy in, or to a resident of, a secondary State, the issuer is deemed to be doing business in that secondary State.CommentsClose CommentsPermalink





‘(3) HEALTH INSURANCE ISSUER- The term ‘health insurance issuer’ has the meaning given such term in section 2791(b)(2), except that such an issuer must be licensed in the primary State and be qualified to sell individual health insurance coverage in that State.CommentsClose CommentsPermalink





‘(4) INDIVIDUAL HEALTH INSURANCE COVERAGE- The term ‘individual health insurance coverage’ means health insurance coverage offered in the individual market, as defined in section 2791(e)(1).CommentsClose CommentsPermalink





‘(5) 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 this title for the State with respect to the issuer.CommentsClose CommentsPermalink





‘(6) HAZARDOUS FINANCIAL CONDITION- The term ‘hazardous financial condition’ means that, based on its present or reasonably anticipated financial condition, a health insurance issuer is unlikely to be able--CommentsClose CommentsPermalink





‘(A) to meet obligations to policyholders with respect to known claims and reasonably anticipated claims; orCommentsClose CommentsPermalink





‘(B) to pay other obligations in the normal course of business.CommentsClose CommentsPermalink





‘(7) COVERED LAWS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘covered laws’ means the laws, rules, regulations, agreements, and orders governing the insurance business pertaining to--CommentsClose CommentsPermalink





‘(i) individual health insurance coverage issued by a health insurance issuer;CommentsClose CommentsPermalink





‘(ii) the offer, sale, rating (including medical underwriting), renewal, and issuance of individual health insurance coverage to an individual;CommentsClose CommentsPermalink





‘(iii) the provision to an individual in relation to individual health insurance coverage of health care and insurance related services;CommentsClose CommentsPermalink





‘(iv) the provision to an individual in relation to individual health insurance coverage of management, operations, and investment activities of a health insurance issuer; andCommentsClose CommentsPermalink





‘(v) the provision to an individual in relation to individual health insurance coverage of loss control and claims administration for a health insurance issuer with respect to liability for which the issuer provides insurance.CommentsClose CommentsPermalink





‘(B) EXCEPTION- Such term does not include any law, rule, regulation, agreement, or order governing the use of care or cost management techniques, including any requirement related to provider contracting, network access or adequacy, health care data collection, or quality assurance.CommentsClose CommentsPermalink





‘(8) STATE- The term ‘State’ means the 50 States and includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.CommentsClose CommentsPermalink





‘(9) UNFAIR CLAIMS SETTLEMENT PRACTICES- The term ‘unfair claims settlement practices’ means only the following practices:CommentsClose CommentsPermalink





‘(A) Knowingly misrepresenting to claimants and insured individuals relevant facts or policy provisions relating to coverage at issue.CommentsClose CommentsPermalink





‘(B) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under policies.CommentsClose CommentsPermalink





‘(C) Failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims arising under policies.CommentsClose CommentsPermalink





‘(D) Failing to effectuate prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear.CommentsClose CommentsPermalink





‘(E) Refusing to pay claims without conducting a reasonable investigation.CommentsClose CommentsPermalink





‘(F) Failing to affirm or deny coverage of claims within a reasonable period of time after having completed an investigation related to those claims.CommentsClose CommentsPermalink





‘(G) A pattern or practice of compelling insured individuals or their beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them.CommentsClose CommentsPermalink





‘(H) A pattern or practice of attempting to settle or settling claims for less than the amount that a reasonable person would believe the insured individual or his or her beneficiary was entitled by reference to written or printed advertising material accompanying or made part of an application.CommentsClose CommentsPermalink





‘(I) Attempting to settle or settling claims on the basis of an application that was materially altered without notice to, or knowledge or consent of, the insured.CommentsClose CommentsPermalink





‘(J) Failing to provide forms necessary to present claims within 15 calendar days of a requests with reasonable explanations regarding their use.CommentsClose CommentsPermalink





‘(K) Attempting to cancel a policy in less time than that prescribed in the policy or by the law of the primary State.CommentsClose CommentsPermalink





‘(10) FRAUD AND ABUSE- The term ‘fraud and abuse’ means an act or omission committed by a person who, knowingly and with intent to defraud, commits, or conceals any material information concerning, one or more of the following:CommentsClose CommentsPermalink





‘(A) Presenting, causing to be presented or preparing with knowledge or belief that it will be presented to or by an insurer, a reinsurer, broker or its agent, false information as part of, in support of or concerning a fact material to one or more of the following:CommentsClose CommentsPermalink





‘(i) An application for the issuance or renewal of an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





‘(ii) The rating of an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





‘(iii) A claim for payment or benefit pursuant to an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





‘(iv) Premiums paid on an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





‘(v) Payments made in accordance with the terms of an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





‘(vi) A document filed with the commissioner or the chief insurance regulatory official of another jurisdiction.CommentsClose CommentsPermalink





‘(vii) The financial condition of an insurer or reinsurer.CommentsClose CommentsPermalink





‘(viii) The formation, acquisition, merger, reconsolidation, dissolution or withdrawal from one or more lines of insurance or reinsurance in all or part of a State by an insurer or reinsurer.CommentsClose CommentsPermalink





‘(ix) The issuance of written evidence of insurance.CommentsClose CommentsPermalink





‘(x) The reinstatement of an insurance policy.CommentsClose CommentsPermalink





‘(B) Solicitation or acceptance of new or renewal insurance risks on behalf of an insurer reinsurer or other person engaged in the business of insurance by a person who knows or should know that the insurer or other person responsible for the risk is insolvent at the time of the transaction.CommentsClose CommentsPermalink





‘(C) Transaction of the business of insurance in violation of laws requiring a license, certificate of authority or other legal authority for the transaction of the business of insurance.CommentsClose CommentsPermalink





‘(D) Attempt to commit, aiding or abetting in the commission of, or conspiracy to commit the acts or omissions specified in this paragraph.CommentsClose CommentsPermalink

‘SEC. 2796. APPLICATION OF LAW.

‘(a) In General- The covered laws of the primary State shall apply to individual health insurance coverage offered by a health insurance issuer in the primary State and in any secondary State, but only if the coverage and issuer comply with the conditions of this section with respect to the offering of coverage in any secondary State.CommentsClose CommentsPermalink





‘(b) Exemptions From Covered Laws in a Secondary State- Except as provided in this section, a health insurance issuer with respect to its offer, sale, rating (including medical underwriting), renewal, and issuance of individual health insurance coverage in any secondary State is exempt from any covered laws of the secondary State (and any rules, regulations, agreements, or orders sought or issued by such State under or related to such covered laws) to the extent that such laws would--CommentsClose CommentsPermalink





‘(1) make unlawful, or regulate, directly or indirectly, the operation of the health insurance issuer operating in the secondary State, except that any secondary State may require such an issuer--CommentsClose CommentsPermalink





‘(A) to pay, on a nondiscriminatory basis, applicable premium and other taxes (including high risk pool assessments) which are levied on insurers and surplus lines insurers, brokers, or policyholders under the laws of the State;CommentsClose CommentsPermalink





‘(B) to register with and designate the State insurance commissioner as its agent solely for the purpose of receiving service of legal documents or process;CommentsClose CommentsPermalink





‘(C) to submit to an examination of its financial condition by the State insurance commissioner in any State in which the issuer is doing business to determine the issuer’s financial condition, if--CommentsClose CommentsPermalink





‘(i) the State insurance commissioner of the primary State has not done an examination within the period recommended by the National Association of Insurance Commissioners; andCommentsClose CommentsPermalink





‘(ii) any such examination is conducted in accordance with the examiners’ handbook of the National Association of Insurance Commissioners and is coordinated to avoid unjustified duplication and unjustified repetition;CommentsClose CommentsPermalink





‘(D) to comply with a lawful order issued--CommentsClose CommentsPermalink





‘(i) in a delinquency proceeding commenced by the State insurance commissioner if there has been a finding of financial impairment under subparagraph (C); orCommentsClose CommentsPermalink





‘(ii) in a voluntary dissolution proceeding;CommentsClose CommentsPermalink





‘(E) to comply with an injunction issued by a court of competent jurisdiction, upon a petition by the State insurance commissioner alleging that the issuer is in hazardous financial condition;CommentsClose CommentsPermalink





‘(F) to participate, on a nondiscriminatory basis, in any insurance insolvency guaranty association or similar association to which a health insurance issuer in the State is required to belong;CommentsClose CommentsPermalink





‘(G) to comply with any State law regarding fraud and abuse (as defined in section 2795(10)), except that if the State seeks an injunction regarding the conduct described in this subparagraph, such injunction must be obtained from a court of competent jurisdiction;CommentsClose CommentsPermalink





‘(H) to comply with any State law regarding unfair claims settlement practices (as defined in section 2795(9)); orCommentsClose CommentsPermalink





‘(I) to comply with the applicable requirements for independent review under section 2798 with respect to coverage offered in the State;CommentsClose CommentsPermalink





‘(2) require any individual health insurance coverage issued by the issuer to be countersigned by an insurance agent or broker residing in that Secondary State; orCommentsClose CommentsPermalink





‘(3) otherwise discriminate against the issuer issuing insurance in both the primary State and in any secondary State.CommentsClose CommentsPermalink





‘(c) Clear and Conspicuous Disclosure- A health insurance issuer shall provide the following notice, in 12-point bold type, in any insurance coverage offered in a secondary State under this part by such a health insurance issuer and at renewal of the policy, with the 5 blank spaces therein being appropriately filled with the name of the health insurance issuer, the name of primary State, the name of the secondary State, the name of the secondary State, and the name of the secondary State, respectively, for the coverage concerned:CommentsClose CommentsPermalink





‘Notice This policy is issued by XXX and is governed by the laws and regulations of the State of XXX, and it has met all the laws of that State as determined by that State’s Department of Insurance. This policy may be less expensive than others because it is not subject to all of the insurance laws and regulations of the State of XXX, including coverage of some services or benefits mandated by the law of the State of XXX. Additionally, this policy is not subject to all of the consumer protection laws or restrictions on rate changes of the State of XXX. As with all insurance products, before purchasing this policy, you should carefully review the policy and determine what health care services the policy covers and what benefits it provides, including any exclusions, limitations, or conditions for such services or benefits.’.CommentsClose CommentsPermalink





‘(d) Prohibition on Certain Reclassifications and Premium Increases-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of this section, a health insurance issuer that provides individual health insurance coverage to an individual under this part in a primary or secondary State may not upon renewal--CommentsClose CommentsPermalink





‘(A) move or reclassify the individual insured under the health insurance coverage from the class such individual is in at the time of issue of the contract based on the health-status related factors of the individual; orCommentsClose CommentsPermalink





‘(B) increase the premiums assessed the individual for such coverage based on a health status-related factor or change of a health status-related factor or the past or prospective claim experience of the insured individual.CommentsClose CommentsPermalink





‘(2) CONSTRUCTION- Nothing in paragraph (1) shall be construed to prohibit a health insurance issuer--CommentsClose CommentsPermalink





‘(A) from terminating or discontinuing coverage or a class of coverage in accordance with subsections (b) and (c) of section 2742;CommentsClose CommentsPermalink





‘(B) from raising premium rates for all policy holders within a class based on claims experience;CommentsClose CommentsPermalink





‘(C) from changing premiums or offering discounted premiums to individuals who engage in wellness activities at intervals prescribed by the issuer, if such premium changes or incentives--CommentsClose CommentsPermalink





‘(i) are disclosed to the consumer in the insurance contract;CommentsClose CommentsPermalink





‘(ii) are based on specific wellness activities that are not applicable to all individuals; andCommentsClose CommentsPermalink





‘(iii) are not obtainable by all individuals to whom coverage is offered;CommentsClose CommentsPermalink





‘(D) from reinstating lapsed coverage; orCommentsClose CommentsPermalink





‘(E) from retroactively adjusting the rates charged an insured individual if the initial rates were set based on material misrepresentation by the individual at the time of issue.CommentsClose CommentsPermalink





‘(e) Prior Offering of Policy in Primary State- A health insurance issuer may not offer for sale individual health insurance coverage in a secondary State unless that coverage is currently offered for sale in the primary State.CommentsClose CommentsPermalink





‘(f) Licensing of Agents or Brokers for Health Insurance Issuers- Any State may require that a person acting, or offering to act, as an agent or broker for a health insurance issuer with respect to the offering of individual health insurance coverage obtain a license from that State, with commissions or other compensation subject to the provisions of the laws of that State, except that a State may not impose any qualification or requirement which discriminates against a nonresident agent or broker.CommentsClose CommentsPermalink





‘(g) Documents for Submission to State Insurance Commissioner- Each health insurance issuer issuing individual health insurance coverage in both primary and secondary States shall submit--CommentsClose CommentsPermalink





‘(1) to the insurance commissioner of each State in which it intends to offer such coverage, before it may offer individual health insurance coverage in such State--CommentsClose CommentsPermalink





‘(A) a copy of the plan of operation or feasibility study or any similar statement of the policy being offered and its coverage (which shall include the name of its primary State and its principal place of business);CommentsClose CommentsPermalink





‘(B) written notice of any change in its designation of its primary State; andCommentsClose CommentsPermalink





‘(C) written notice from the issuer of the issuer’s compliance with all the laws of the primary State; andCommentsClose CommentsPermalink





‘(2) to the insurance commissioner of each secondary State in which it offers individual health insurance coverage, a copy of the issuer’s quarterly financial statement submitted to the primary State, which statement shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by--CommentsClose CommentsPermalink





‘(A) a member of the American Academy of Actuaries; orCommentsClose CommentsPermalink





‘(B) a qualified loss reserve specialist.CommentsClose CommentsPermalink





‘(h) Power of Courts To Enjoin Conduct- Nothing in this section shall be construed to affect the authority of any Federal or State court to enjoin--CommentsClose CommentsPermalink





‘(1) the solicitation or sale of individual health insurance coverage by a health insurance issuer to any person or group who is not eligible for such insurance; orCommentsClose CommentsPermalink





‘(2) the solicitation or sale of individual health insurance coverage that violates the requirements of the law of a secondary State which are described in subparagraphs (A) through (H) of section 2796(b)(1).CommentsClose CommentsPermalink





‘(i) Power of Secondary States To Take Administrative Action- Nothing in this section shall be construed to affect the authority of any State to enjoin conduct in violation of that State’s laws described in section 2796(b)(1).CommentsClose CommentsPermalink





‘(j) State Powers To Enforce State Laws-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Subject to the provisions of subsection (b)(1)(G) (relating to injunctions) and paragraph (2), nothing in this section shall be construed to affect the authority of any State to make use of any of its powers to enforce the laws of such State with respect to which a health insurance issuer is not exempt under subsection (b).CommentsClose CommentsPermalink





‘(2) COURTS OF COMPETENT JURISDICTION- If a State seeks an injunction regarding the conduct described in paragraphs (1) and (2) of subsection (h), such injunction must be obtained from a Federal or State court of competent jurisdiction.CommentsClose CommentsPermalink





‘(k) States’ Authority To Sue- Nothing in this section shall affect the authority of any State to bring action in any Federal or State court.CommentsClose CommentsPermalink





‘(l) Generally Applicable Laws- Nothing in this section shall be construed to affect the applicability of State laws generally applicable to persons or corporations.CommentsClose CommentsPermalink





‘(m) Guaranteed Availability of Coverage to HIPAA Eligible Individuals- To the extent that a health insurance issuer is offering coverage in a primary State that does not accommodate residents of secondary States or does not provide a working mechanism for residents of a secondary State, and the issuer is offering coverage under this part in such secondary State which has not adopted a qualified high risk pool as its acceptable alternative mechanism (as defined in section 2744(c)(2)), the issuer shall, with respect to any individual health insurance coverage offered in a secondary State under this part, comply with the guaranteed availability requirements for eligible individuals in section 2741.CommentsClose CommentsPermalink

‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY SELL INTO SECONDARY STATES.

‘A health insurance issuer may not offer, sell, or issue individual health insurance coverage in a secondary State if the State insurance commissioner does not use a risk-based capital formula for the determination of capital and surplus requirements for all health insurance issuers.CommentsClose CommentsPermalink

‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

‘(a) Right to External Appeal- A health insurance issuer may not offer, sell, or issue individual health insurance coverage in a secondary State under the provisions of this title unless--CommentsClose CommentsPermalink





‘(1) both the secondary State and the primary State have legislation or regulations in place establishing an independent review process for individuals who are covered by individual health insurance coverage, orCommentsClose CommentsPermalink





‘(2) in any case in which the requirements of subparagraph (A) are not met with respect to the either of such States, the issuer provides an independent review mechanism substantially identical (as determined by the applicable State authority of such State) to that prescribed in the ‘Health Carrier External Review Model Act’ of the National Association of Insurance Commissioners for all individuals who purchase insurance coverage under the terms of this part, except that, under such mechanism, the review is conducted by an independent medical reviewer, or a panel of such reviewers, with respect to whom the requirements of subsection (b) are met.CommentsClose CommentsPermalink





‘(b) Qualifications of Independent Medical Reviewers- In the case of any independent review mechanism referred to in subsection (a)(2)--CommentsClose CommentsPermalink





‘(1) IN GENERAL- In referring a denial of a claim to an independent medical reviewer, or to any panel of such reviewers, to conduct independent medical review, the issuer shall ensure that--CommentsClose CommentsPermalink





‘(A) each independent medical reviewer meets the qualifications described in paragraphs (2) and (3);CommentsClose CommentsPermalink





‘(B) with respect to each review, each reviewer meets the requirements of paragraph (4) and the reviewer, or at least 1 reviewer on the panel, meets the requirements described in paragraph (5); andCommentsClose CommentsPermalink





‘(C) compensation provided by the issuer to each reviewer is consistent with paragraph (6).CommentsClose CommentsPermalink





‘(2) LICENSURE AND EXPERTISE- Each independent medical reviewer shall be a physician (allopathic or osteopathic) or health care professional who--CommentsClose CommentsPermalink





‘(A) is appropriately credentialed or licensed in 1 or more States to deliver health care services; andCommentsClose CommentsPermalink





‘(B) typically treats the condition, makes the diagnosis, or provides the type of treatment under review.CommentsClose CommentsPermalink





‘(3) INDEPENDENCE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Subject to subparagraph (B), each independent medical reviewer in a case shall--CommentsClose CommentsPermalink





‘(i) not be a related party (as defined in paragraph (7));CommentsClose CommentsPermalink





‘(ii) not have a material familial, financial, or professional relationship with such a party; andCommentsClose CommentsPermalink





‘(iii) not otherwise have a conflict of interest with such a party (as determined under regulations).CommentsClose CommentsPermalink





‘(B) EXCEPTION- Nothing in subparagraph (A) shall be construed to--CommentsClose CommentsPermalink





‘(i) prohibit an individual, solely on the basis of affiliation with the issuer, from serving as an independent medical reviewer if--CommentsClose CommentsPermalink





‘(I) a non-affiliated individual is not reasonably available;CommentsClose CommentsPermalink





‘(II) the affiliated individual is not involved in the provision of items or services in the case under review;CommentsClose CommentsPermalink





‘(III) the fact of such an affiliation is disclosed to the issuer and the enrollee (or authorized representative) and neither party objects; andCommentsClose CommentsPermalink





‘(IV) the affiliated individual is not an employee of the issuer and does not provide services exclusively or primarily to or on behalf of the issuer;CommentsClose CommentsPermalink





‘(ii) prohibit an individual who has staff privileges at the institution where the treatment involved takes place from serving as an independent medical reviewer merely on the basis of such affiliation if the affiliation is disclosed to the issuer and the enrollee (or authorized representative), and neither party objects; orCommentsClose CommentsPermalink





‘(iii) prohibit receipt of compensation by an independent medical reviewer from an entity if the compensation is provided consistent with paragraph (6).CommentsClose CommentsPermalink





‘(4) PRACTICING HEALTH CARE PROFESSIONAL IN SAME FIELD-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In a case involving treatment, or the provision of items or services--CommentsClose CommentsPermalink





‘(i) by a physician, a reviewer shall be a practicing physician (allopathic or osteopathic) of the same or similar specialty, as a physician who, acting within the appropriate scope of practice within the State in which the service is provided or rendered, typically treats the condition, makes the diagnosis, or provides the type of treatment under review; orCommentsClose CommentsPermalink





‘(ii) by a non-physician health care professional, the reviewer, or at least 1 member of the review panel, shall be a practicing non-physician health care professional of the same or similar specialty as the non-physician health care professional who, acting within the appropriate scope of practice within the State in which the service is provided or rendered, typically treats the condition, makes the diagnosis, or provides the type of treatment under review.CommentsClose CommentsPermalink





‘(B) PRACTICING DEFINED- For purposes of this paragraph, the term ‘practicing’ means, with respect to an individual who is a physician or other health care professional, that the individual provides health care services to individual patients on average at least 2 days per week.CommentsClose CommentsPermalink





‘(5) PEDIATRIC EXPERTISE- In the case of an external review relating to a child, a reviewer shall have expertise under paragraph (2) in pediatrics.CommentsClose CommentsPermalink





‘(6) LIMITATIONS ON REVIEWER COMPENSATION- Compensation provided by the issuer to an independent medical reviewer in connection with a review under this section shall--CommentsClose CommentsPermalink





‘(A) not exceed a reasonable level; andCommentsClose CommentsPermalink





‘(B) not be contingent on the decision rendered by the reviewer.CommentsClose CommentsPermalink





‘(7) RELATED PARTY DEFINED- For purposes of this section, the term ‘related party’ means, with respect to a denial of a claim under a coverage relating to an enrollee, any of the following:CommentsClose CommentsPermalink





‘(A) The issuer involved, or any fiduciary, officer, director, or employee of the issuer.CommentsClose CommentsPermalink





‘(B) The enrollee (or authorized representative).CommentsClose CommentsPermalink





‘(C) The health care professional that provides the items or services involved in the denial.CommentsClose CommentsPermalink





‘(D) The institution at which the items or services (or treatment) involved in the denial are provided.CommentsClose CommentsPermalink





‘(E) The manufacturer of any drug or other item that is included in the items or services involved in the denial.CommentsClose CommentsPermalink





‘(F) Any other party determined under any regulations to have a substantial interest in the denial involved.CommentsClose CommentsPermalink





‘(8) DEFINITIONS- For purposes of this subsection:CommentsClose CommentsPermalink





‘(A) ENROLLEE- The term ‘enrollee’ means, with respect to health insurance coverage offered by a health insurance issuer, an individual enrolled with the issuer to receive such coverage.CommentsClose CommentsPermalink





‘(B) HEALTH CARE PROFESSIONAL- The term ‘health care professional’ means an individual who is licensed, accredited, or certified under State law to provide specified health care services and who is operating within the scope of such licensure, accreditation, or certification.CommentsClose CommentsPermalink

‘SEC. 2799. ENFORCEMENT.

‘(a) In General- Subject to subsection (b), with respect to specific individual health insurance coverage the primary State for such coverage has sole jurisdiction to enforce the primary State’s covered laws in the primary State and any secondary State.CommentsClose CommentsPermalink





‘(b) Secondary State’s Authority- Nothing in subsection (a) shall be construed to affect the authority of a secondary State to enforce its laws as set forth in the exception specified in section 2796(b)(1).CommentsClose CommentsPermalink





‘(c) Court Interpretation- In reviewing action initiated by the applicable secondary State authority, the court of competent jurisdiction shall apply the covered laws of the primary State.CommentsClose CommentsPermalink





‘(d) Notice of Compliance Failure- In the case of individual health insurance coverage offered in a secondary State that fails to comply with the covered laws of the primary State, the applicable State authority of the secondary State may notify the applicable State authority of the primary State.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall apply to individual health insurance coverage offered, issued, or sold after the date that is one year after the date of the enactment of this Act.CommentsClose CommentsPermalink





(c) GAO Ongoing Study and Reports-CommentsClose CommentsPermalink





(1) STUDY- The Comptroller General of the United States shall conduct an ongoing study concerning the effect of the amendment made by subsection (a) on--CommentsClose CommentsPermalink





(A) the number of uninsured and under-insured;CommentsClose CommentsPermalink





(B) the availability and cost of health insurance policies for individuals with pre-existing medical conditions;CommentsClose CommentsPermalink





(C) the availability and cost of health insurance policies generally;CommentsClose CommentsPermalink





(D) the elimination or reduction of different types of benefits under health insurance policies offered in different States; andCommentsClose CommentsPermalink





(E) cases of fraud or abuse relating to health insurance coverage offered under such amendment and the resolution of such cases.CommentsClose CommentsPermalink





(2) ANNUAL REPORTS- The Comptroller General shall submit to Congress an annual report, after the end of each of the 5 years following the effective date of the amendment made by subsection (a), on the ongoing study conducted under paragraph (1).CommentsClose CommentsPermalink

SEC. 132. SEVERABILITY.

If any provision of this subtitle or the application of such provision to any person or circumstance is held to be unconstitutional, the remainder of this subtitle and the application of the provisions of such to any other person or circumstance shall not be affected.CommentsClose CommentsPermalink

Subtitle E--Protecting Patients From RescissionsCommentsClose CommentsPermalink

SEC. 141. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEWS OF CERTAIN NONRENEWALS AND DISCONTINUATIONS, INCLUDING RESCISSIONS, OF INDIVIDUAL HEALTH INSURANCE COVERAGE.

(a) Clarification Regarding Application of Guaranteed Renewability of Individual Health Insurance Coverage- Section 2742 of the Public Health Service Act (42 U.S.C. 300gg-42) is amended--CommentsClose CommentsPermalink





(1) in its heading, by inserting ‘, continuation in force, including prohibition of rescission,’ after ‘guaranteed renewability’;CommentsClose CommentsPermalink





(2) in subsection (a), by inserting ‘, including without rescission,’ after ‘continue in force’; andCommentsClose CommentsPermalink





(3) in subsection (b)(2), by inserting before the period at the end the following: ‘, including intentional concealment of material facts regarding a health condition related to the condition for which coverage is being claimed’.CommentsClose CommentsPermalink





(b) Opportunity for Independent, External Third Party Review in Certain Cases- Subpart 1 of part B of title XXVII of the Public Health Service Act is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEW IN CERTAIN CASES.

‘(a) Notice and Review Right- If a health insurance issuer determines to nonrenew or not continue in force, including rescind, health insurance coverage for an individual in the individual market on the basis described in section 2742(b)(2) before such nonrenewal, discontinuation, or rescission, may take effect the issuer shall provide the individual with notice of such proposed nonrenewal, discontinuation, or rescission and an opportunity for a review of such determination by an independent, external third party under procedures specified by the Secretary.CommentsClose CommentsPermalink





‘(b) Independent Determination- If the individual requests such review by an independent, external third party of a nonrenewal, discontinuation, or rescission of health insurance coverage, the coverage shall remain in effect until such third party determines that the coverage may be nonrenewed, discontinued, or rescinded under section 2742(b)(2).’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply after the date of the enactment of this Act with respect to health insurance coverage issued before, on, or after such date.CommentsClose CommentsPermalink

TITLE II--PROMOTING PATIENT CHOICECommentsClose CommentsPermalink

Subtitle A--Credit for Small Employers Adopting Auto-Enrollment and Defined Contribution OptionsCommentsClose CommentsPermalink

SEC. 201. 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 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 subsection (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

Subtitle B--Tax Incentives for Long-Term Care InsuranceCommentsClose CommentsPermalink

SEC. 211. TREATMENT OF PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.

(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. PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.

‘(a) In General- In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable percentage of eligible long-term care premiums (as defined in section 213(d)(10)) paid during the taxable year for coverage for the taxpayer and the taxpayer’s spouse and dependents under a qualified long-term care insurance contract (as defined in section 7702B(b)).CommentsClose CommentsPermalink





‘(b) Applicable Percentage- For purposes of subsection (a), the applicable percentage shall be determined in accordance with the following table:CommentsClose CommentsPermalink

‘For taxable years beginningCommentsClose CommentsPermalink

The applicableCommentsClose CommentsPermalink

in calendar year--CommentsClose CommentsPermalink

percentage is--CommentsClose CommentsPermalink

2010 or 2011CommentsClose CommentsPermalink

--25CommentsClose CommentsPermalink

2012CommentsClose CommentsPermalink

--35CommentsClose CommentsPermalink

2013CommentsClose CommentsPermalink

--65CommentsClose CommentsPermalink

2014 or thereafterCommentsClose CommentsPermalink

--100.CommentsClose CommentsPermalink

‘(c) Coordination With Other Deductions- Any amount paid by a taxpayer for any qualified long-term care insurance contract 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).’.CommentsClose CommentsPermalink





(b) Long-Term Care Insurance Permitted To Be Offered Under Cafeteria Plans and Flexible Spending Arrangements-CommentsClose CommentsPermalink





(1) CAFETERIA PLANS- The last sentence of section 125(f) of such Code (defining qualified benefits) is amended by inserting before the period at the end ‘; except that such term shall include the payment of premiums for any qualified long-term care insurance contract (as defined in section 7702B) to the extent the amount of such payment does not exceed the eligible long-term care premiums (as defined in section 213(d)(10)) for such contract’.CommentsClose CommentsPermalink





(2) FLEXIBLE SPENDING ARRANGEMENTS- Section 106 of such Code (relating to contributions by an employer to accident and health plans) is amended by striking subsection (c) and redesignating subsections (d) and (e) as subsections (c) and (d), respectively.CommentsClose CommentsPermalink





(c) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 62(a) of such Code is amended by inserting before the last sentence at the end the following new paragraph:CommentsClose CommentsPermalink





‘(22) PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS- The deduction allowed by section 224.’.CommentsClose CommentsPermalink





(2) Sections 223(b)(4)(B), 223(d)(4)(C), 223(f)(3)(B), 3231(e)(11), 3306(b)(18), 3401(a)(22), 4973(g)(1), and 4973(g)(2)(B)(i) of such Code are each amended by striking ‘section 106(d)’ and inserting ‘section 106(c)’.CommentsClose CommentsPermalink





(3) Section 223(c)(1)(B)(iii)(II) of such Code is amended by striking ‘106(e)’ and inserting ‘106(d)’.CommentsClose CommentsPermalink





(4) Section 6041 of such Code is amended--CommentsClose CommentsPermalink





(A) in subsection (f)(1) by striking ‘(as defined in section 106(c)(2))’, andCommentsClose CommentsPermalink





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





‘(h) Flexible Spending Arrangement Defined- For purposes of this section, a flexible spending arrangement is a benefit program which provides employees with coverage under which--CommentsClose CommentsPermalink





‘(1) specified incurred expenses may be reimbursed (subject to reimbursement maximums and other reasonable conditions), andCommentsClose CommentsPermalink





‘(2) the maximum amount of reimbursement which is reasonably available to a participant for such coverage is less than 500 percent of the value of such coverage.CommentsClose CommentsPermalink





In the case of an insured plan, the maximum amount reasonably available shall be determined on the basis of the underlying coverage.’.CommentsClose CommentsPermalink





(5) The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following new items:CommentsClose CommentsPermalink





‘Sec. 224. Premiums on qualified long-term care insurance contracts.CommentsClose CommentsPermalink





‘Sec. 225. Cross reference.’.CommentsClose CommentsPermalink





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

SEC. 212. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

(a) In General- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:CommentsClose CommentsPermalink

‘SEC. 25E. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

‘(a) Allowance of Credit-CommentsClose CommentsPermalink





‘(1) IN GENERAL- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable credit amount multiplied by the number of applicable individuals with respect to whom the taxpayer is an eligible caregiver for the taxable year.CommentsClose CommentsPermalink





‘(2) APPLICABLE CREDIT AMOUNT- For purposes of paragraph (1), the applicable credit amount shall be determined in accordance with the following table:CommentsClose CommentsPermalink

‘For taxable years beginningCommentsClose CommentsPermalink

The applicableCommentsClose CommentsPermalink

in calendar year--CommentsClose CommentsPermalink

credit amount is--CommentsClose CommentsPermalink

2010CommentsClose CommentsPermalink

--1,500CommentsClose CommentsPermalink

2011CommentsClose CommentsPermalink

--2,000CommentsClose CommentsPermalink

2012CommentsClose CommentsPermalink

--2,500CommentsClose CommentsPermalink

2013 or thereafterCommentsClose CommentsPermalink

--3,000.CommentsClose CommentsPermalink

‘(b) Limitation Based on Adjusted Gross Income-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $100 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds the threshold amount. For purposes of the preceding sentence, the term ‘modified adjusted gross income’ means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.CommentsClose CommentsPermalink





‘(2) THRESHOLD AMOUNT- For purposes of paragraph (1), the term ‘threshold amount’ means--CommentsClose CommentsPermalink





‘(A) $150,000 in the case of a joint return, andCommentsClose CommentsPermalink





‘(B) $75,000 in any other case.CommentsClose CommentsPermalink





‘(3) INDEXING- In the case of any taxable year beginning in a calendar year after 2010, each dollar amount contained in paragraph (2) shall be increased by an amount equal to the product of--CommentsClose CommentsPermalink





‘(A) such dollar amount, andCommentsClose CommentsPermalink





‘(B) the medical care cost adjustment determined under section 213(d)(10)(B)(ii) for the calendar year in which the taxable year begins, determined by substituting ‘August 2009’ for ‘August 1996’ in subclause (II) thereof.CommentsClose CommentsPermalink





If any increase determined under the preceding sentence is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.CommentsClose CommentsPermalink





‘(c) Definitions- For purposes of this section:CommentsClose CommentsPermalink





‘(1) APPLICABLE INDIVIDUAL-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘applicable individual’ means, with respect to any taxable year, any individual who has been certified, before the due date for filing the return of tax for the taxable year (without extensions), by a physician (as defined in section 1861(r)(1) of the Social Security Act) as being an individual with long-term care needs described in subparagraph (B) for a period--CommentsClose CommentsPermalink





‘(i) which is at least 180 consecutive days, andCommentsClose CommentsPermalink





‘(ii) a portion of which occurs within the taxable year.CommentsClose CommentsPermalink





Notwithstanding the preceding sentence, a certification shall not be treated as valid unless it is made within the 39 1/2 month period ending on such due date (or such other period as the Secretary prescribes).CommentsClose CommentsPermalink





‘(B) INDIVIDUALS WITH LONG-TERM CARE NEEDS- An individual is described in this subparagraph if the individual meets any of the following requirements:CommentsClose CommentsPermalink





‘(i) The individual is at least 6 years of age and--CommentsClose CommentsPermalink





‘(I) is unable to perform (without substantial assistance from another individual) at least 3 activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss of functional capacity, orCommentsClose CommentsPermalink





‘(II) requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment and is unable to perform, without reminding or cuing assistance, at least 1 activity of daily living (as so defined) or to the extent provided in regulations prescribed by the Secretary (in consultation with the Secretary of Health and Human Services), is unable to engage in age appropriate activities.CommentsClose CommentsPermalink





‘(ii) The individual is at least 2 but not 6 years of age and is unable due to a loss of functional capacity to perform (without substantial assistance from another individual) at least 2 of the following activities: eating, transferring, or mobility.CommentsClose CommentsPermalink





‘(iii) The individual is under 2 years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled practitioner trained to address the individual’s condition to be available if the individual’s parents or guardians are absent.CommentsClose CommentsPermalink





‘(2) ELIGIBLE CAREGIVER-CommentsClose CommentsPermalink





‘(A) IN GENERAL- A taxpayer shall be treated as an eligible caregiver for any taxable year with respect to the following individuals:CommentsClose CommentsPermalink





‘(i) The taxpayer.CommentsClose CommentsPermalink





‘(ii) The taxpayer’s spouse.CommentsClose CommentsPermalink





‘(iii) An individual with respect to whom the taxpayer is allowed a deduction under section 151(c) for the taxable year.CommentsClose CommentsPermalink





‘(iv) An individual who would be described in clause (iii) for the taxable year if section 151(c) were applied by substituting for the exemption amount an amount equal to the sum of the exemption amount, the standard deduction under section 63(c)(2)(C), and any additional standard deduction under section 63(c)(3) which would be applicable to the individual if clause (iii) applied.CommentsClose CommentsPermalink





‘(v) An individual who would be described in clause (iii) for the taxable year if--CommentsClose CommentsPermalink





‘(I) the requirements of clause (iv) are met with respect to the individual, andCommentsClose CommentsPermalink





‘(II) the requirements of subparagraph (B) are met with respect to the individual in lieu of the support test under subsection (c)(1)(D) or (d)(1)(C) of section 152.CommentsClose CommentsPermalink





‘(B) RESIDENCY TEST- The requirements of this subparagraph are met if an individual has as his principal place of abode the home of the taxpayer and--CommentsClose CommentsPermalink





‘(i) in the case of an individual who is an ancestor or descendant of the taxpayer or the taxpayer’s spouse, is a member of the taxpayer’s household for over half the taxable year, orCommentsClose CommentsPermalink





‘(ii) in the case of any other individual, is a member of the taxpayer’s household for the entire taxable year.CommentsClose CommentsPermalink





‘(C) SPECIAL RULES WHERE MORE THAN 1 ELIGIBLE CAREGIVER-CommentsClose CommentsPermalink





‘(i) IN GENERAL- If more than 1 individual is an eligible caregiver with respect to the same applicable individual for taxable years ending with or within the same calendar year, a taxpayer shall be treated as the eligible caregiver if each such individual (other than the taxpayer) files a written declaration (in such form and manner as the Secretary may prescribe) that such individual will not claim such applicable individual for the credit under this section.CommentsClose CommentsPermalink





‘(ii) NO AGREEMENT- If each individual required under clause (i) to file a written declaration under clause (i) does not do so, the individual with the highest adjusted gross income shall be treated as the eligible caregiver.CommentsClose CommentsPermalink





‘(iii) MARRIED INDIVIDUALS FILING SEPARATELY- In the case of married individuals filing separately, the determination under this subparagraph as to whether the husband or wife is the eligible caregiver shall be made under the rules of clause (ii) (whether or not one of them has filed a written declaration under clause (i)).CommentsClose CommentsPermalink





‘(d) Identification Requirement- No credit shall be allowed under this section to a taxpayer with respect to any applicable individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the identification number of the physician certifying such individual, on the return of tax for the taxable year.CommentsClose CommentsPermalink





‘(e) Taxable Year Must Be Full Taxable Year- Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 6213(g)(2) of such Code is amended by striking ‘and’ at the end of subparagraph (L), by striking the period at the end of subparagraph (M) and inserting ‘, and’, and by inserting after subparagraph (M) the following new subparagraph:CommentsClose CommentsPermalink





‘(N) an omission of a correct TIN or physician identification required under section 25E(d) (relating to credit for taxpayers with long-term care needs) to be included on a return.’.CommentsClose CommentsPermalink





(2) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25D the following new item:CommentsClose CommentsPermalink





‘Sec. 25E. Credit for taxpayers with long-term care needs.’.CommentsClose CommentsPermalink





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

SEC. 213. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-TERM CARE INSURANCE.

(a) Additional Protections Applicable to Long-Term Care Insurance- Subparagraphs (A) and (B) of section 7702B(g)(2) of the Internal Revenue Code of 1986 (relating to requirements of model regulation and Act) are amended to read as follows:CommentsClose CommentsPermalink





‘(A) IN GENERAL- The requirements of this paragraph are met with respect to any contract if such contract meets--CommentsClose CommentsPermalink





‘(i) MODEL REGULATION- The following requirements of the model regulation:CommentsClose CommentsPermalink





‘(I) Section 6A (relating to guaranteed renewal or noncancellability), other than paragraph (5) thereof, and the requirements of section 6B of the model Act relating to such section 6A.CommentsClose CommentsPermalink





‘(II) Section 6B (relating to prohibitions on limitations and exclusions) other than paragraph (7) thereof.CommentsClose CommentsPermalink





‘(III) Section 6C (relating to extension of benefits).CommentsClose CommentsPermalink





‘(IV) Section 6D (relating to continuation or conversion of coverage).CommentsClose CommentsPermalink





‘(V) Section 6E (relating to discontinuance and replacement of policies).CommentsClose CommentsPermalink





‘(VI) Section 7 (relating to unintentional lapse).CommentsClose CommentsPermalink





‘(VII) Section 8 (relating to disclosure), other than sections 8F, 8G, 8H, and 8I thereof.CommentsClose CommentsPermalink





‘(VIII) Section 11 (relating to prohibitions against post-claims underwriting).CommentsClose CommentsPermalink





‘(IX) Section 12 (relating to minimum standards).CommentsClose CommentsPermalink





‘(X) Section 13 (relating to requirement to offer inflation protection).CommentsClose CommentsPermalink





‘(XI) Section 25 (relating to prohibition against preexisting conditions and probationary periods in replacement policies or certificates).CommentsClose CommentsPermalink





‘(XII) The provisions of section 26 relating to contingent nonforfeiture benefits, if the policyholder declines the offer of a nonforfeiture provision described in paragraph (4).CommentsClose CommentsPermalink





‘(ii) MODEL ACT- The following requirements of the model Act:CommentsClose CommentsPermalink





‘(I) Section 6C (relating to preexisting conditions).CommentsClose CommentsPermalink





‘(II) Section 6D (relating to prior hospitalization).CommentsClose CommentsPermalink





‘(III) The provisions of section 8 relating to contingent nonforfeiture benefits, if the policyholder declines the offer of a nonforfeiture provision described in paragraph (4).CommentsClose CommentsPermalink





‘(B) DEFINITIONS- For purposes of this paragraph:CommentsClose CommentsPermalink





‘(i) MODEL PROVISIONS- The terms ‘model regulation’ and ‘model Act’ mean the long-term care insurance model regulation, and the long-term care insurance model Act, respectively, promulgated by the National Association of Insurance Commissioners (as adopted as of December 31, 2008).CommentsClose CommentsPermalink





‘(ii) COORDINATION- Any provision of the model regulation or model Act listed under clause (i) or (ii) of subparagraph (A) shall be treated as including any other provision of such regulation or Act necessary to implement the provision.CommentsClose CommentsPermalink





‘(iii) DETERMINATION- For purposes of this section and section 4980C, the determination of whether any requirement of a model regulation or the model Act has been met shall be made by the Secretary.’.CommentsClose CommentsPermalink





(b) Excise Tax- Paragraph (1) of section 4980C(c) of the Internal Revenue Code of 1986 (relating to requirements of model provisions) is amended to read as follows:CommentsClose CommentsPermalink





‘(1) REQUIREMENTS OF MODEL PROVISIONS-CommentsClose CommentsPermalink





‘(A) MODEL REGULATION- The following requirements of the model regulation must be met:CommentsClose CommentsPermalink





‘(i) Section 9 (relating to required disclosure of rating practices to consumer).CommentsClose CommentsPermalink





‘(ii) Section 14 (relating to application forms and replacement coverage).CommentsClose CommentsPermalink





‘(iii) Section 15 (relating to reporting requirements).CommentsClose CommentsPermalink





‘(iv) Section 22 (relating to filing requirements for marketing).CommentsClose CommentsPermalink





‘(v) Section 23 (relating to standards for marketing), including inaccurate completion of medical histories, other than paragraphs (1), (6), and (9) of section 23C.CommentsClose CommentsPermalink





‘(vi) Section 24 (relating to suitability).CommentsClose CommentsPermalink





‘(vii) Section 29 (relating to standard format outline of coverage).CommentsClose CommentsPermalink





‘(viii) Section 30 (relating to requirement to deliver shopper’s guide).CommentsClose CommentsPermalink





The requirements referred to in clause (vi) shall not include those portions of the personal worksheet described in Appendix B relating to consumer protection requirements not imposed by section 4980C or 7702B.CommentsClose CommentsPermalink





‘(B) MODEL ACT- The following requirements of the model Act must be met:CommentsClose CommentsPermalink





‘(i) Section 6F (relating to right to return).CommentsClose CommentsPermalink





‘(ii) Section 6G (relating to outline of coverage).CommentsClose CommentsPermalink





‘(iii) Section 6H (relating to requirements for certificates under group plans).CommentsClose CommentsPermalink





‘(iv) Section 6J (relating to policy summary).CommentsClose CommentsPermalink





‘(v) Section 6K (relating to monthly reports on accelerated death benefits).CommentsClose CommentsPermalink





‘(vi) Section 7 (relating to incontestability period).CommentsClose CommentsPermalink





‘(C) DEFINITIONS- For purposes of this paragraph, the terms ‘model regulation’ and ‘model Act’ have the meanings given such terms by section 7702B(g)(2)(B).’.CommentsClose CommentsPermalink





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

Subtitle C--Comparative Effectiveness ResearchCommentsClose CommentsPermalink

SEC. 221. PROHIBITION ON CERTAIN USES OF DATA OBTAINED FROM COMPARATIVE EFFECTIVENESS RESEARCH; ACCOUNTING FOR PERSONALIZED MEDICINE AND DIFFERENCES IN PATIENT TREATMENT RESPONSE.

(a) In General- Notwithstanding any other provision of law, the Secretary of Health and Human Services--CommentsClose CommentsPermalink





(1) shall not use data obtained from the conduct of comparative effectiveness research, including such research that is conducted or supported using funds appropriated under the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), to deny coverage of an item or service under a Federal health care program (as defined in section 1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f))); andCommentsClose CommentsPermalink





(2) shall ensure that comparative effectiveness research conducted or supported by the Federal Government accounts for factors contributing to differences in the treatment response and treatment preferences of patients, including patient-reported outcomes, genomics and personalized medicine, the unique needs of health disparity populations, and indirect patient benefits.CommentsClose CommentsPermalink





(b) Rule of Construction- Nothing in this section shall be construed as affecting the authority of the Commissioner of Food and Drugs under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) or the Public Health Service Act (42 U.S.C. 201 et seq.).CommentsClose CommentsPermalink

Subtitle D--Programs of Health Promotion or Disease PreventionCommentsClose CommentsPermalink

SEC. 231. PROGRAMS OF HEALTH PROMOTION OR DISEASE PREVENTION.

(a) In General- Nothing in the Public Health Service Act, Employee Retirement Income Security Act of 1974, or the Internal Revenue Code of 1986 (or any amendment made by this Act) shall be applied, administered, or interpreted to prevent an employer from establishing premium discounts or rebates, or modifying copayments or deductibles, in the case of employees who adhere to, or participate in, a program of health promotion or disease prevention which meets the requirements of subsection (b).CommentsClose CommentsPermalink





(b) Programs of Health Promotion or Disease Prevention to Which Section Applies-CommentsClose CommentsPermalink





(1) GENERAL PROVISIONS-CommentsClose CommentsPermalink





(A) GENERAL RULE- For purposes of paragraph (2)(B), a program of health promotion or disease prevention (referred to in this subsection as a ‘wellness program’) shall be a program that is designed to promote health or prevent disease that meets the applicable requirements of this subsection.CommentsClose CommentsPermalink





(B) NO CONDITIONS BASED ON HEALTH STATUS FACTOR- If none of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if participation in the program is made available to all similarly situated individuals and the requirements of paragraph (2) are complied with.CommentsClose CommentsPermalink





(C) CONDITIONS BASED ON HEALTH STATUS FACTOR- If any of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if the requirements of paragraph (3) are complied with.CommentsClose CommentsPermalink





(2) WELLNESS PROGRAMS NOT SUBJECT TO REQUIREMENTS- If none of the conditions for obtaining a premium discount or rebate or other reward under a wellness program as described in paragraph (1)(B) are based on an individual satisfying a standard that is related to a health status factor (or if such a wellness program does not provide such a reward), the wellness program shall not violate this section if participation in the program is made available to all similarly situated individuals. The following programs shall not have to comply with the requirements of paragraph (3) if participation in the program is made available to all similarly situated individuals:CommentsClose CommentsPermalink





(A) A program that reimburses all or part of the cost for memberships in a fitness center.CommentsClose CommentsPermalink





(B) A diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes.CommentsClose CommentsPermalink





(C) A program that encourages preventive care related to a health condition through the waiver of the copayment or deductible requirement under an individual or group health plan for the costs of certain items or services related to a health condition (such as prenatal care or well-baby visits).CommentsClose CommentsPermalink





(D) A program that reimburses individuals for the costs of smoking cessation programs without regard to whether the individual quits smoking.CommentsClose CommentsPermalink





(E) A program that provides a reward to individuals for attending a periodic health education seminar.CommentsClose CommentsPermalink





(3) WELLNESS PROGRAMS SUBJECT TO REQUIREMENTS- If any of the conditions for obtaining a premium discount, rebate, or reward under a wellness program as described in paragraph (1)(C) is based on an individual satisfying a standard that is related to a health status factor, the wellness program shall not violate this section if the following requirements are complied with:CommentsClose CommentsPermalink





(A) The reward for the wellness program, together with the reward for other wellness programs with respect to the plan that requires satisfaction of a standard related to a health status factor, shall not exceed 50 percent of the cost of employee-only coverage under the plan. If, in addition to employees or individuals, any class of dependents (such as spouses or spouses and dependent children) may participate fully in the wellness program, such reward shall not exceed 50 percent of the cost of the coverage in which an employee or individual and any dependents are enrolled. For purposes of this paragraph, the cost of coverage shall be determined based on the total amount of employer and employee contributions for the benefit package under which the employee is (or the employee and any dependents are) receiving coverage. A reward may be in the form of a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism (such as deductibles, copayments, or coinsurance), the absence of a surcharge, or the value of a benefit that would otherwise not be provided under the plan.CommentsClose CommentsPermalink





(B) The wellness program shall be reasonably designed to promote health or prevent disease. A program complies with the preceding sentence if the program has a reasonable chance of improving the health of, or preventing disease in, participating individuals and it is not overly burdensome, is not a subterfuge for discriminating based on a health status factor, and is not highly suspect in the method chosen to promote health or prevent disease. The plan or issuer shall evaluate the program’s reasonableness at least once per year.CommentsClose CommentsPermalink





(C) The plan shall give individuals eligible for the program the opportunity to qualify for the reward under the program at least once each year.CommentsClose CommentsPermalink





(D) The full reward under the wellness program shall be made available to all similarly situated individuals. For such purpose, the following applies:CommentsClose CommentsPermalink





(i) The reward is not available to all similarly situated individuals for a period unless the wellness program allows--CommentsClose CommentsPermalink





(I) for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard; andCommentsClose CommentsPermalink





(II) for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is medically inadvisable to attempt to satisfy the otherwise applicable standard.CommentsClose CommentsPermalink





(ii) If reasonable under the circumstances, the plan or issuer may seek verification, such as a statement from an individual’s physician, that a health status factor makes it unreasonably difficult or medically inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard.CommentsClose CommentsPermalink





(E) The plan or issuer involved shall disclose in all plan materials describing the terms of the wellness program the availability of a reasonable alternative standard (or the possibility of waiver of the otherwise applicable standard) required under subparagraph (D). If plan materials disclose that such a program is available, without describing its terms, the disclosure under this subparagraph shall not be required.CommentsClose CommentsPermalink





(c) Existing Programs- Nothing in this section shall prohibit a program of health promotion or disease prevention that was established prior to the date of enactment of this section and applied with all applicable regulations, and that is operating on such date, from continuing to be carried out for as long as such regulations remain in effect.CommentsClose CommentsPermalink





(d) Regulations- Nothing in this section shall be construed as prohibiting the Secretaries of Labor, Health and Human Services, or the Treasury from promulgating regulations in connection with this section.CommentsClose CommentsPermalink

TITLE III--STRENGTHENING SAFETY NET PROGRAMSCommentsClose CommentsPermalink

Subtitle A--Beneficiary Choice Under Medicaid and SCHIPCommentsClose CommentsPermalink

SEC. 301. EASING ADMINISTRATIVE BARRIERS TO STATE COOPERATION WITH EMPLOYER-SPONSORED INSURANCE COVERAGE.

(a) Requiring Some Coverage for Employer-Sponsored Insurance-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 2102(a) of the Social Security Act (42 U.S.C. 1397b(a)) is amended--CommentsClose CommentsPermalink





(A) in paragraph (6), by striking ‘and’ at the end;CommentsClose CommentsPermalink





(B) in paragraph (7), by striking the period at the end and inserting ‘; and’; andCommentsClose CommentsPermalink





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





‘(8) effective for plan years beginning on or after October 1, 2010, how the plan will provide for child health assistance with respect to targeted low-income children who have access to coverage under a group health plan.’.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply beginning with fiscal year 2011.CommentsClose CommentsPermalink





(b) Federal Financial Participation for Employer-Sponsored Insurance- Section 2105 of such Act (42 U.S.C. 1397d) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)(1)(C), by inserting before the semicolon at the end the following: ‘and, subject to paragraph (3)(C) of subsection (c), in the form of payment of the premiums for coverage under a group health plan that includes coverage of targeted low-income children and benefits supplemental to such coverage’; andCommentsClose CommentsPermalink





(2) by amending paragraph (3) of subsection (c) to read as follows:CommentsClose CommentsPermalink





‘(3) PURCHASE OF EMPLOYER-SPONSORED INSURANCE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Payment may be made to a State under subsection (a)(1)(C), subject to the provisions of this paragraph, for the purchase of family coverage under a group health plan that includes coverage of targeted low-income children unless such coverage would otherwise substitute for coverage that would be provided to such children but for the purchase of family coverage.CommentsClose CommentsPermalink





‘(B) WAIVER OF CERTAIN PROVISIONS- With respect to coverage described in subparagraph (A)--CommentsClose CommentsPermalink





‘(i) notwithstanding section 2102, no minimum benefits requirement (other than those otherwise applicable with respect to services within the categories of basic services described in section 2103(c)(1) and emergency services) under this title shall apply; andCommentsClose CommentsPermalink





‘(ii) no limitation on beneficiary cost-sharing otherwise applicable under this title or title XIX shall apply.CommentsClose CommentsPermalink





‘(C) REQUIRED PROVISION OF SUPPLEMENTAL BENEFITS- If the coverage described in subparagraph (A) does not provide coverage for the services in each of the categories of basic services described in section 2103(c)(1) and for emergency services, the State child health plan shall provide coverage of such services as supplemental benefits.CommentsClose CommentsPermalink





‘(D) LIMITATION ON FFP- The amount of the payment under subsection (a)(1)(C) for coverage described in subparagraph (A) (and supplemental benefits under subparagraph (C) for individuals so covered) during a fiscal year may not exceed the product of--CommentsClose CommentsPermalink





‘(i) the national per capita expenditure under this title (taking into account both Federal and State expenditures) for the previous fiscal year (as determined by the Secretary using the best available data);CommentsClose CommentsPermalink





‘(ii) the enhanced FMAP for the State and fiscal year involved; andCommentsClose CommentsPermalink





‘(iii) the number of targeted low-income children for whom such coverage is provided.CommentsClose CommentsPermalink





‘(E) VOLUNTARY ENROLLMENT- A State child health plan--CommentsClose CommentsPermalink





‘(i) may not require a targeted low-income child to enroll in family coverage described in subparagraph (A) in order to obtain child health assistance under this title;CommentsClose CommentsPermalink





‘(ii) before providing such child health assistance for such coverage of a child, shall make available (which may be through an Internet website or other means) to the parent or guardian of the child information on the coverage available under this title, including benefits and cost-sharing; andCommentsClose CommentsPermalink





‘(iii) shall provide at least one opportunity per fiscal year for beneficiaries to switch coverage under this title from coverage described in subparagraph (A) to the coverage that is otherwise made available under this title.CommentsClose CommentsPermalink





‘(F) INFORMATION ON COVERAGE OPTIONS- A State child health plan shall--CommentsClose CommentsPermalink





‘(i) describe how the State will notify potential beneficiaries of coverage described in subparagraph (A);CommentsClose CommentsPermalink





‘(ii) provide such notification in writing at least during the initial application for enrollment under this title and during redeterminations of eligibility if the individual was enrolled before October 1, 2009; andCommentsClose CommentsPermalink





‘(iii) post a description of these coverage options on any official Internet website that may be established by the State in connection with the plan.CommentsClose CommentsPermalink





‘(G) SEMIANNUAL VERIFICATION OF COVERAGE- If coverage described in subparagraph (A) is provided under a group health plan with respect to a targeted low-income child, the State child health plan shall provide for the collection, at least once every six months, of proof from the plan that the child is enrolled in such coverage.CommentsClose CommentsPermalink





‘(H) RULE OF CONSTRUCTION- Nothing in this section is to be construed to prohibit a State from--CommentsClose CommentsPermalink





‘(i) offering wrap around benefits in order for a group health plan to meet any State-established minimum benefit requirements;CommentsClose CommentsPermalink





‘(ii) establishing a cost-effectiveness test to qualify for coverage under such a plan;CommentsClose CommentsPermalink





‘(iii) establishing limits on beneficiary cost-sharing under such a plan;CommentsClose CommentsPermalink





‘(iv) paying all or part of a beneficiary’s cost-sharing requirements under such a plan;CommentsClose CommentsPermalink





‘(v) paying less than the full cost of the employee’s share of the premium under such a plan, including prorating the cost of the premium to pay for only what the State determines is the portion of the premium that covers targeted low-income children;CommentsClose CommentsPermalink





‘(vi) using State funds to pay for benefits above the Federal upper limit established under subparagraph (D);CommentsClose CommentsPermalink





‘(vii) allowing beneficiaries enrolled in group health plans from changing plans to another coverage option available under this title at any time; orCommentsClose CommentsPermalink





‘(viii) providing any guidance or information it deems appropriate in order to help beneficiaries make an informed decision regarding the option to enroll in coverage described in subparagraph (A).CommentsClose CommentsPermalink





‘(I) GROUP HEALTH PLAN DEFINED- In this paragraph, the term ‘group health plan’ has the meaning given such term in section 2791(a)(1) of the Public Health Service Act (42 U.S.C. 300gg-91(a)(1)).CommentsClose CommentsPermalink





‘(J) ATTESTATION REQUIREMENT FOR CERTAIN HIGHER INCOME CHILDREN- Effective October 1, 2011, any State that provides for child health assistance under this title for children in families with gross income (as determined without regard to any income disregards or expense exclusions) that exceeds 200 percent of the poverty line shall require, as a condition of eligibility for child health assistance under this title (other than in the form of premium assistance under this paragraph) that there must be executed an attestation (under penalty of perjury) that the child is not eligible for coverage under any group health plan.’.CommentsClose CommentsPermalink

SEC. 302. IMPROVING BENEFICIARY CHOICE IN SCHIP.

(a) Requiring Offering of Alternative Coverage Options- Section 2102 of the Social Security Act (42 U.S.C. 1397b), as amended by section 1781, is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in paragraph (7), by striking ‘and’ at the end;CommentsClose CommentsPermalink





(B) in paragraph (8), by striking the period at the end and inserting ‘; and’; andCommentsClose CommentsPermalink





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





‘(9) effective for plan years beginning on or after October 1, 2010, how the plan will provide for child health assistance with respect to targeted low-income children through alternative coverage options in accordance with subsection (d).’; andCommentsClose CommentsPermalink





(2) by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(d) Alternative Coverage Options-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Effective October 1, 2010, a State child health plan shall provide for the offering of any qualified alternative coverage that a qualified entity seeks to offer to targeted low-income children through the plan in the State.CommentsClose CommentsPermalink





‘(2) APPLICATION OF UNIFORM FINANCIAL LIMITATION FOR ALL ALTERNATIVE COVERAGE OPTIONS- With respect to all qualified alternative coverage offered in a State, the State child health plan shall establish a uniform dollar limitation on the per capita monthly amount that will be paid by the State to the qualified entity with respect to such coverage provided to a targeted low-income child. Such limitation may not be less than 90 percent of the per capita monthly payment made for coverage offered under the State child health plan that is not in the form of an alternative coverage option. Nothing in this paragraph shall be construed--CommentsClose CommentsPermalink





‘(A) as requiring a State to provide for the full payment of premiums for qualified alternative coverage;CommentsClose CommentsPermalink





‘(B) as preventing a State from charging additional premiums to cover the difference between the cost of qualified alternative coverage and the amount of such payment limitation; andCommentsClose CommentsPermalink





‘(C) as preventing a State from using its own funds to provide a dollar limitation that exceeds the Federal financial participation as limited under section 2105(c)(8).CommentsClose CommentsPermalink





‘(3) QUALIFIED ALTERNATIVE COVERAGE DEFINED- In this section, the term ‘qualified alternative coverage’ means health insurance coverage that--CommentsClose CommentsPermalink





‘(A) meets the coverage requirements of section 2103 (other than cost-sharing requirements of such section); andCommentsClose CommentsPermalink





‘(B) is offered by a qualified insurer, and not directly by the State.CommentsClose CommentsPermalink





‘(4) QUALIFIED INSURER DEFINED- In this section, the term ‘qualified insurer’ means, with respect to a State, an entity that is licensed to offer health insurance coverage in the State.’.CommentsClose CommentsPermalink





(b) Federal Financial Participation for Qualified Alternative Coverage- Section 2105 of such Act (42 U.S.C. 1397d), as amended by sections 301(a) and 601(a) of the Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-5), is amended--CommentsClose CommentsPermalink





(1) in subsection (a)(1)(C), as amended by section 1781(b)(1), by inserting before the semicolon at the end the following: ‘and, subject to subsection (c)(12)(C), in the form of payment of the premiums for coverage for qualified alternative coverage’; andCommentsClose CommentsPermalink





(2) by adding at the end of subsection (c) the following new paragraph:CommentsClose CommentsPermalink





‘(12) PURCHASE OF QUALIFIED ALTERNATIVE COVERAGE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Payment may be made to a State under subsection (a)(1)(C), subject to the provisions of this paragraph, for the purchase of qualified alternative coverage.CommentsClose CommentsPermalink





‘(B) WAIVER OF CERTAIN PROVISIONS- With respect to coverage described in subparagraph (A), no limitation on beneficiary cost-sharing otherwise applicable under this title or title XIX shall apply.CommentsClose CommentsPermalink





‘(C) LIMITATION ON FFP- The amount of the payment under paragraph (1)(C) for coverage described in subparagraph (A) during a fiscal year in the aggregate for all such coverage in the State may not exceed the product of--CommentsClose CommentsPermalink





‘(i) the national per capita expenditure under this title (taking into account both Federal and State expenditures) for the previous fiscal year (as determined by the Secretary using the best available data);CommentsClose CommentsPermalink





‘(ii) the enhanced FMAP for the State and fiscal year involved; andCommentsClose CommentsPermalink





‘(iii) the number of targeted low-income children for whom such coverage is provided.CommentsClose CommentsPermalink





‘(D) VOLUNTARY ENROLLMENT- A State child health plan--CommentsClose CommentsPermalink





‘(i) may not require a targeted low-income child to enroll in coverage described in subparagraph (A) in order to obtain child health assistance under this title;CommentsClose CommentsPermalink





‘(ii) before providing such child health assistance for such coverage of a child, shall make available (which may be through an Internet website or other means) to the parent or guardian of the child information on the coverage available under this title, including benefits and cost-sharing; andCommentsClose CommentsPermalink





‘(iii) shall provide at least one opportunity per fiscal year for beneficiaries to switch coverage under this title from coverage described in subparagraph (A) to the coverage that is otherwise made available under this title.CommentsClose CommentsPermalink





‘(E) INFORMATION ON COVERAGE OPTIONS- A State child health plan shall--CommentsClose CommentsPermalink





‘(i) describe how the State will notify potential beneficiaries of coverage described in subparagraph (A);CommentsClose CommentsPermalink





‘(ii) provide such notification in writing at least during the initial application for enrollment under this title and during redeterminations of eligibility if the individual was enrolled before October 1, 2009; andCommentsClose CommentsPermalink





‘(iii) post a description of these coverage options on any official website that may be established by the State in connection with the plan.CommentsClose CommentsPermalink





‘(F) RULE OF CONSTRUCTION- Nothing in this section is to be construed to prohibit a State from--CommentsClose CommentsPermalink





‘(i) establishing limits on beneficiary cost-sharing under such alternative coverage;CommentsClose CommentsPermalink





‘(ii) paying all or part of a beneficiary’s cost-sharing requirements under such coverage;CommentsClose CommentsPermalink





‘(iii) paying less than the full cost of a child’s share of the premium under such coverage, insofar as the premium for such coverage exceeds the limitation established by the State under subparagraph (C);CommentsClose CommentsPermalink





‘(iv) using State funds to pay for benefits above the Federal upper limit established under subparagraph (C); orCommentsClose CommentsPermalink





‘(v) providing any guidance or information it deems appropriate in order to help beneficiaries make an informed decision regarding the option to enroll in coverage described in subparagraph (A).’.CommentsClose CommentsPermalink

SEC. 303. APPLICATION TO MEDICAID.

In accordance with rules established by the Secretary of Health and Human Services, the requirements imposed under a State child health plan under title XXI of the Social Security Act under the amendments made by the preceding sections of this subtitle shall apply in the same manner to a State plan under title XIX of such Act, except that--CommentsClose CommentsPermalink





(1) such requirements shall not apply to individuals whose eligibility for medical assistance under such title is based on being aged, blind, or disabled or to individuals with a category of individuals described in section 1937(a)(2)(B) of such Act; andCommentsClose CommentsPermalink





(2) the national per capita expenditures shall be determined based on a benchmark coverage described in section 1937(b)(1) of such Act but without regard to expenditures for individuals described in paragraph (1) or for nursing facility services and other long-term care services (as determined by the Secretary).CommentsClose CommentsPermalink

SEC. 304. EXPANSION OF HEALTH OPPORTUNITY ACCOUNT PROGRAM.

(a) In General- Section 613 of the Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3) is repealed.CommentsClose CommentsPermalink





(b) Expansion- Section 1938(a)(2) of the Social Security Act (42 U.S.C. 1396u-8(a)(2)) is amended--CommentsClose CommentsPermalink





(1) in subparagraph (A) by striking everything following the first sentence; andCommentsClose CommentsPermalink





(2) by striking subparagraph (B).CommentsClose CommentsPermalink

SEC. 305. VERIFICATION REQUIREMENTS TO PREVENT ILLEGAL ALIENS FROM RECEIVING MEDICAID BENEFITS.

Section 1904 of the Social Security Act (42 U.S.C. 1396c) is amended--CommentsClose CommentsPermalink





(1) by striking ‘If the Secretary’ and inserting the following:CommentsClose CommentsPermalink





‘(a) Oversight- If the Secretary’; andCommentsClose CommentsPermalink





(2) by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(b) Preventing Illegal Aliens From Receiving Medicaid Benefits-CommentsClose CommentsPermalink





‘(1) VERIFICATION AS CONDITION ON FUNDING- Notwithstanding any other provision of law, subject to paragraphs (3) and (4), the Secretary shall not provide funding under 1903(a) for medical assistance provided to an individual (other than emergency services unless such individual has been determined to be eligible for medical assistance under this title on the basis of--CommentsClose CommentsPermalink





‘(A) United States citizenship or nationality through the verification process described in section 1903(x); orCommentsClose CommentsPermalink





‘(B) qualified alien status through the immigration status verification system described in section 1137(d).CommentsClose CommentsPermalink





‘(2) RULE OF CONSTRUCTION- Nothing in the America’s Affordable Health Choices Act of 2009 or the amendments made by that Act shall be construed as exempting any individual from the eligibility verification requirements specified in paragraph (1).CommentsClose CommentsPermalink





‘(3) NO APPLICATION TO DSH- Paragraph (1) shall not apply to or affect the payments described in section 1923(f) (relating to disproportionate share hospital payments).CommentsClose CommentsPermalink





‘(4) NO APPLICATION TO EMERGENCY MEDICAL SERVICES- Paragraph (1) shall not apply to emergency medical services described in section 1903(f), regardless of the status of the individual for whom such services are provided.CommentsClose CommentsPermalink





‘(5) NO IMPACT ON EMTALA- Nothing in this subsection shall be construed as affecting the application of the requirements of section 1867.’.CommentsClose CommentsPermalink

Subtitle B--Community Health CentersCommentsClose CommentsPermalink

SEC. 311. INCREASED FUNDING.

Section 330 of the Public Health Service Act (42 U.S.C. 254b) is amended--CommentsClose CommentsPermalink





(1) in subsection (r)(1)--CommentsClose CommentsPermalink





(A) in subparagraph (D), by striking ‘and’ at the end;CommentsClose CommentsPermalink





(B) in subparagraph (E), by striking the period at the end and inserting ‘; and’; andCommentsClose CommentsPermalink





(C) by inserting at the end the following:CommentsClose CommentsPermalink





‘(F) Such sums as may be necessary for each of fiscal years 2013 and 2019.’; andCommentsClose CommentsPermalink





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





‘(s) Additional Funding- For the purpose of carrying out this section, in addition to any other amounts authorized to be appropriated for such purpose, there are authorized to be appropriated, out of any monies in the Public Health Investment Fund, the following:CommentsClose CommentsPermalink





‘(1) For fiscal year 2010, $1,000,000,000.CommentsClose CommentsPermalink





‘(2) For fiscal year 2011, $1,500,000,000.CommentsClose CommentsPermalink





‘(3) For fiscal year 2012, $2,500,000,000.CommentsClose CommentsPermalink





‘(4) For fiscal year 2013, $3,000,000,000.CommentsClose CommentsPermalink





‘(5) For fiscal year 2014, $4,000,000,000.CommentsClose CommentsPermalink





‘(6) For fiscal year 2015, $4,400,000,000.CommentsClose CommentsPermalink





‘(7) For fiscal year 2016, $4,800,000,000.CommentsClose CommentsPermalink





‘(8) For fiscal year 2017, $5,300,000,000.CommentsClose CommentsPermalink





‘(9) For fiscal year 2018, $5,900,000,000.CommentsClose CommentsPermalink





‘(10) For fiscal year 2019, $6,400,000,000.’.CommentsClose CommentsPermalink

TITLE IV--EXPANDING HEALTH SAVINGS ACCOUNTSCommentsClose CommentsPermalink

SEC. 401. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CONTRIBUTIONS TO THE SAME HSA ACCOUNT.

(a) In General- Paragraph (3) of section 223(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(C) SPECIAL RULE WHERE BOTH SPOUSES ARE ELIGIBLE INDIVIDUALS WITH 1 ACCOUNT- If--CommentsClose CommentsPermalink





‘(i) an individual and the individual’s spouse have both attained age 55 before the close of the taxable year, andCommentsClose CommentsPermalink





‘(ii) the spouse is not an account beneficiary of a health savings account as of the close of such year,CommentsClose CommentsPermalink





the additional contribution amount shall be 200 percent of the amount otherwise determined under subparagraph (B).’.CommentsClose CommentsPermalink





(b) 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

SEC. 402. PROVISIONS RELATING TO MEDICARE.

(a) Individuals Over Age 65 Only Enrolled in Medicare Part A- Section 223(b)(7) of the Internal Revenue Code of 1986 (relating to contribution limitation on Medicare eligible individuals) is amended by adding at the end the following new sentence: ‘This paragraph shall not apply to any individual during any period the individual’s only entitlement to such benefits is an entitlement to hospital insurance benefits under part A of title XVIII of such Act pursuant to an enrollment for such hospital insurance benefits under section 226(a)(1) of such Act.’.CommentsClose CommentsPermalink





(b) Medicare Beneficiaries Participating in Medicare Advantage MSA May Contribute Their Own Money to Their MSA- Subsection (b) of section 138 of such Code is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.CommentsClose CommentsPermalink





(c) 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. 403. INDIVIDUALS ELIGIBLE FOR VETERANS BENEFITS FOR A SERVICE-CONNECTED DISABILITY.

(a) In General- Section 223(c)(1) of the Internal Revenue Code of 1986 (defining eligible individual) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(C) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR CERTAIN VETERANS 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 for a service-connected disability under any law administered by the Secretary of Veterans Affairs but only if the individual is not eligible to receive such care or services for any condition other than a service-connected disability.’.CommentsClose CommentsPermalink





(b) 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. 404. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERVICE ASSISTANCE.

(a) In General- Section 223(c)(1) of the Internal Revenue Code of 1986, as amended by this title, is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(D) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR ASSISTANCE UNDER INDIAN HEALTH SERVICE PROGRAMS- For purposes of subparagraph (A)(ii), an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual receives hospital care or medical services under a medical care program of the Indian Health Service or of a tribal organization.’.CommentsClose CommentsPermalink





(b) 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

SEC. 405. FSA AND HRA TERMINATION TO FUND HSAS.

(a) Eligible Individuals Include FSA and HRA Participants- Section 223(c)(1)(B) of the Internal Revenue Code of 1986 is amended--CommentsClose CommentsPermalink





(1) by striking ‘and’ at the end of clause (ii),CommentsClose CommentsPermalink





(2) by striking the period at the end of clause (iii) and inserting ‘, and’, andCommentsClose CommentsPermalink





(3) by inserting after clause (iii) the following new clause:CommentsClose CommentsPermalink





‘(iv) coverage under a health flexible spending arrangement or a health reimbursement arrangement in the plan year a qualified HSA distribution as described in section 106(e) is made on behalf of the individual if after the qualified HSA distribution is made and for the remaining duration of the plan year, the coverage provided under the health flexible spending arrangement or health reimbursement arrangement is converted to--CommentsClose CommentsPermalink





‘(I) coverage that does not pay or reimburse any medical expense incurred before the minimum annual deductible under section 223(c)(2)(A)(i) (prorated for the period occurring after the qualified HSA distribution is made) is satisfied,CommentsClose CommentsPermalink





‘(II) coverage that, after the qualified HSA distribution is made, does not pay or reimburse any medical expense incurred after the qualified HSA distribution is made other than preventive care as defined in section 223(c)(2)(3),CommentsClose CommentsPermalink





‘(III) coverage that, after the qualified HSA distribution is made, pays or reimburses benefits for coverage described in section 223(c)(1)(B)(ii) (but not through insurance or for long-term care services),CommentsClose CommentsPermalink





‘(IV) coverage that, after the qualified HSA distribution is made, pays or reimburses benefits for permitted insurance as defined in section 223(c)(1)(B)(i) or coverage described in section 223(c)(1)(B)(ii) (but not for long-term care services),CommentsClose CommentsPermalink





‘(V) coverage that, after the qualified HSA distribution is made, pays or reimburses only those medical expenses incurred after an individual’s retirement (and no expenses incurred before retirement), orCommentsClose CommentsPermalink





‘(VI) coverage that, after the qualified HSA distribution is made, is suspended, pursuant to an election made on or before the date the individual elects a qualified HSA distribution or, if later, on the date of the individual enrolls in a high deductible health plan (as defined in section 223(c)(2)), that does not pay or reimburse, at any time, any medical expense incurred during the suspension period except as defined in subclauses (I) through (V) above.’.CommentsClose CommentsPermalink





(b) Qualified HSA Distribution Shall Not Affect Flexible Spending Arrangement- Section 106(e)(1) of such Code is amended to read as follows:CommentsClose CommentsPermalink





‘(1) IN GENERAL- A plan shall not fail to be treated as a health flexible spending arrangement under this section, section 105, or section 125, or as a health reimbursement arrangement under this section or section 105, merely because such plan provides for a qualified HSA distribution.’.CommentsClose CommentsPermalink





(c) FSA Balances at Year End Shall Not Forfeit- Section 125(d)(2) of such Code is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(E) EXCEPTION FOR QUALIFIED HSA DISTRIBUTIONS- Subparagraph (A) shall not apply to the extent that there is an amount remaining in a health flexible spending account at the end of a plan year that an individual elects to contribute to a health savings account pursuant to a qualified HSA distribution (as defined in section 106(e)(2)).’.CommentsClose CommentsPermalink





(d) Simplification of Limitations on FSA and HRA Rollovers- Section 106(e)(2) of such Code (relating to qualified HSA distribution) is amended to read as follows:CommentsClose CommentsPermalink





‘(2) QUALIFIED HSA DISTRIBUTION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified HSA distribution’ means a distribution from a health flexible spending arrangement or health reimbursement arrangement to the extent that such distribution does not exceed the lesser of--CommentsClose CommentsPermalink





‘(i) the balance in such arrangement as of the date of such distribution, orCommentsClose CommentsPermalink





‘(ii) the amount determined under subparagraph (B).CommentsClose CommentsPermalink





Such term shall not include more than 1 distribution with respect to any arrangement.CommentsClose CommentsPermalink





‘(B) DOLLAR LIMITATIONS-CommentsClose CommentsPermalink





‘(i) DISTRIBUTIONS FROM A HEALTH FLEXIBLE SPENDING ARRANGEMENT- A qualified HSA distribution from a health flexible spending arrangement shall not exceed the applicable amount.CommentsClose CommentsPermalink





‘(ii) DISTRIBUTIONS FROM A HEALTH REIMBURSEMENT ARRANGEMENT- A qualified HSA distribution from a health reimbursement arrangement shall not exceed--CommentsClose CommentsPermalink





‘(I) the applicable amount divided by 12, multiplied byCommentsClose CommentsPermalink





‘(II) the number of months during which the individual is a participant in the health reimbursement arrangement.CommentsClose CommentsPermalink





‘(iii) APPLICABLE AMOUNT- For purposes of this subparagraph, the applicable amount is--CommentsClose CommentsPermalink





‘(I) $2,250 in the case of an eligible individual who has self-only coverage under a high deductible health plan at the time of such distribution, andCommentsClose CommentsPermalink





‘(II) $4,500 in the case of an eligible individual who has family coverage under a high deductible health plan at the time of such distribution.’.CommentsClose CommentsPermalink





(e) Elimination of Additional Tax for Failure To Maintain High Deductible Health Plan Coverage- Section 106(e) of such Code is amended--CommentsClose CommentsPermalink





(1) by striking paragraph (3) and redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively, andCommentsClose CommentsPermalink





(2) by striking subparagraph (A) of paragraph (3), as so redesignated, and redesignating subparagraphs (B) and (C) of such paragraph as subparagraphs (A) and (B) thereof, respectively.CommentsClose CommentsPermalink





(f) Limited Purpose FSAs and HRAs- Section 106(e) of such Code, as amended by this section, is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(5) LIMITED PURPOSE FSAS AND HRAS- A plan shall not fail to be a health flexible spending arrangement or health reimbursement arrangement under this section or section 105 merely because the plan converts coverage for individuals who enroll in a high deductible health plan described in section 223(c)(2) to coverage described in section 223(c)(1)(B)(iv). Coverage for such individuals may be converted as of the date of enrollment in the high deductible health plan, without regard to the period of coverage under the health flexible spending arrangement or health reimbursement arrangement, and without requiring any change in coverage to individuals who do not enroll in a high deductible health plan.’.CommentsClose CommentsPermalink





(g) Distribution Amounts Adjusted for Cost-of-Living- Section 106(e) of such Code, as amended by this section, is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(6) COST-OF-LIVING ADJUSTMENT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In the case of any taxable year beginning after December 31, 2010, each of the dollar amounts in paragraph (2)(B)(iii) shall be increased by an amount equal to such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting ‘calendar year 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





‘(B) ROUNDING- If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.’.CommentsClose CommentsPermalink





(h) Disclaimer of Disqualifying Coverage- Section 223(c)(1)(B) of such Code, as amended by this section, is amended--CommentsClose CommentsPermalink





(1) by striking ‘and’ at the end of clause (iii),CommentsClose CommentsPermalink





(2) by striking the period at the end of clause (iv) and inserting ‘, and’, andCommentsClose CommentsPermalink





(3) by inserting after clause (iv) the following new clause:CommentsClose CommentsPermalink





‘(v) any coverage (including prospective coverage) under a health plan that is not a high deductible health plan which is disclaimed in writing, at the time of the creation or organization of the health savings account, including by execution of a trust described in subsection (d)(1) through a governing instrument that includes such a disclaimer, or by acceptance of an amendment to such a trust that includes such a disclaimer.’.CommentsClose CommentsPermalink





(i) 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. 406. PURCHASE OF HEALTH INSURANCE FROM HSA ACCOUNT.

(a) In General- Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986 (defining qualified medical expenses) is amended--CommentsClose CommentsPermalink





(1) by striking subparagraphs (B) and (C), andCommentsClose CommentsPermalink





(2) by inserting ‘ and including payment for insurance)’ after ‘section 213(d)’.CommentsClose CommentsPermalink





(b) 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. 407. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE ESTABLISHMENT OF ACCOUNT.

(a) In General- Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986, as amended by this title, is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(B) CERTAIN MEDICAL EXPENSES INCURRED BEFORE ESTABLISHMENT OF ACCOUNT TREATED AS QUALIFIED- An expense shall not fail to be treated as a qualified medical expense solely because such expense was incurred before the establishment of the health savings account if such expense was incurred--CommentsClose CommentsPermalink





‘(i) during either--CommentsClose CommentsPermalink





‘(I) the taxable year in which the health savings account was established, orCommentsClose CommentsPermalink





‘(II) the preceding taxable year in the case of a health savings account established after the taxable year in which such expense was incurred but before the time prescribed by law for filing the return for such taxable year (not including extensions thereof), andCommentsClose CommentsPermalink





‘(ii) for medical care of an individual during a period that such individual was covered by a high deductible health plan and met the requirements of subsection (c)(1)(A)(ii) (after application of subsection (c)(1)(B)).’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to health savings accounts established during taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 408. PREVENTIVE CARE PRESCRIPTION DRUG CLARIFICATION.

(a) Clarify Use of Drugs in Preventive Care- Subparagraph (C) of section 223(c)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following: ‘Preventive care shall include prescription and over-the-counter drugs and medicines which have the primary purpose of preventing the onset of, further deterioration from, or complications associated with chronic conditions, illnesses, or diseases.’.CommentsClose CommentsPermalink





(b) 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

SEC. 409. QUALIFIED MEDICAL EXPENSES.

(a) Certain Exercise Equipment and Physical Fitness Programs Treated as Medical Care-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (d) of section 213 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(12) EXERCISE EQUIPMENT AND PHYSICAL FITNESS PROGRAMS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘medical care’ shall include amounts paid--CommentsClose CommentsPermalink





‘(i) to purchase or use equipment used in a program (including a self-directed program) of physical exercise,CommentsClose CommentsPermalink





‘(ii) to participate, or receive instruction, in a program of physical exercise, andCommentsClose CommentsPermalink





‘(iii) for membership dues in a fitness club the primary purpose of which is to provide access to equipment and facilities for physical exercise.CommentsClose CommentsPermalink





‘(B) LIMITATION- Amounts treated as medical care under subparagraph (A) shall not exceed $1,000 with respect to any individual for any taxable year.’.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendment made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink





(b) Certain Nutritional and Dietary Supplements To Be Treated as Medical Care-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (d) of section 213 of such Code, as amended by subsection (a), is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(13) NUTRITIONAL AND DIETARY SUPPLEMENTS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘medical care’ shall include amounts paid to purchase herbs, vitamins, minerals, homeopathic remedies, meal replacement products, and other dietary and nutritional supplements.CommentsClose CommentsPermalink





‘(B) LIMITATION- Amounts treated as medical care under subparagraph (A) shall not exceed $1,000 with respect to any individual for any taxable year.CommentsClose CommentsPermalink





‘(C) MEAL REPLACEMENT PRODUCT- For purposes of this paragraph, the term ‘meal replacement product’ means any product that--CommentsClose CommentsPermalink





‘(i) is permitted to bear labeling making a claim described in section 403(r)(3) of the Federal Food, Drug, and Cosmetic Act, andCommentsClose CommentsPermalink





‘(ii) is permitted to claim under such section that such product is low in fat and is a good source of protein, fiber, and multiple essential vitamins and minerals.’.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendment made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

TITLE V--MEDICAL LIABILITY REFORMCommentsClose CommentsPermalink

Subtitle A--Medical LiabilityCommentsClose CommentsPermalink

SEC. 501. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

The time for the commencement of a health care lawsuit shall be 3 years after the date of manifestation of injury or 1 year after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. In no event shall the time for commencement of a health care lawsuit exceed 3 years after the date of manifestation of injury unless tolled for any of the following--CommentsClose CommentsPermalink





(1) upon proof of fraud;CommentsClose CommentsPermalink





(2) intentional concealment; orCommentsClose CommentsPermalink





(3) the presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured personCommentsClose CommentsPermalink





Actions by a minor shall be commenced within 3 years from the date of the alleged manifestation of injury except that actions by a minor under the full age of 6 years shall be commenced within 3 years of manifestation of injury or prior to the minor’s 8th birthday, whichever provides a longer period. Such time limitation shall be tolled for minors for any period during which a parent or guardian and a health care provider or health care organization have committed fraud or collusion in the failure to bring an action on behalf of the injured minorCommentsClose CommentsPermalink

SEC. 502. COMPENSATING PATIENT INJURY.

(a) Unlimited Amount of Damages for Actual Economic Losses in Health Care Lawsuits- In any health care lawsuit, nothing in this subtitle shall limit a claimant’s recovery of the full amount of the available economic damages, notwithstanding the limitation in subsection (b).CommentsClose CommentsPermalink





(b) Additional Noneconomic Damages- In any health care lawsuit, the amount of noneconomic damages, if available, may be as much as $250,000, regardless of the number of parties against whom the action is brought or the number of separate claims or actions brought with respect to the same injury.CommentsClose CommentsPermalink





(c) No Discount of Award for Noneconomic Damages- For purposes of applying the limitation in subsection (b), future noneconomic damages shall not be discounted to present value. The jury shall not be informed about the maximum award for noneconomic damages. An award for noneconomic damages in excess of $250,000 shall be reduced either before the entry of judgment, or by amendment of the judgment after entry of judgment, and such reduction shall be made before accounting for any other reduction in damages required by law. If separate awards are rendered for past and future noneconomic damages and the combined awards exceed $250,000, the future noneconomic damages shall be reduced first.CommentsClose CommentsPermalink





(d) Fair Share Rule- In any health care lawsuit, each party shall be liable for that party’s several share of any damages only and not for the share of any other person. Each party shall be liable only for the amount of damages allocated to such party in direct proportion to such party’s percentage of responsibility. Whenever a judgment of liability is rendered as to any party, a separate judgment shall be rendered against each such party for the amount allocated to such party. For purposes of this section, the trier of fact shall determine the proportion of responsibility of each party for the claimant’s harm.CommentsClose CommentsPermalink

SEC. 503. MAXIMIZING PATIENT RECOVERY.

(a) Court Supervision of Share of Damages Actually Paid to Claimants- In any health care lawsuit, the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants. In particular, in any health care lawsuit in which the attorney for a party claims a financial stake in the outcome by virtue of a contingent fee, the court shall have the power to restrict the payment of a claimant’s damage recovery to such attorney, and to redirect such damages to the claimant based upon the interests of justice and principles of equity. In no event shall the total of all contingent fees for representing all claimants in a health care lawsuit exceed the following limits:CommentsClose CommentsPermalink





(1) 40 percent of the first $50,000 recovered by the claimant(s).CommentsClose CommentsPermalink





(2) 33 1/3 percent of the next $50,000 recovered by the claimant(s).CommentsClose CommentsPermalink





(3) 25 percent of the next $500,000 recovered by the claimant(s).CommentsClose CommentsPermalink





(4) 15 percent of any amount by which the recovery by the claimant(s) is in excess of $600,000.CommentsClose CommentsPermalink





(b) Applicability- The limitations in this section shall apply whether the recovery is by judgment, settlement, mediation, arbitration, or any other form of alternative dispute resolution. In a health care lawsuit involving a minor or incompetent person, a court retains the authority to authorize or approve a fee that is less than the maximum permitted under this section. The requirement for court supervision in the first two sentences of subsection (a) applies only in civil actions.CommentsClose CommentsPermalink

SEC. 504. ADDITIONAL HEALTH BENEFITS.

In any health care lawsuit involving injury or wrongful death, any party may introduce evidence of collateral source benefits. If a party elects to introduce such evidence, any opposing party may introduce evidence of any amount paid or contributed or reasonably likely to be paid or contributed in the future by or on behalf of the opposing party to secure the right to such collateral source benefits. No provider of collateral source benefits shall recover any amount against the claimant or receive any lien or credit against the claimant’s recovery or be equitably or legally subrogated to the right of the claimant in a health care lawsuit involving injury or wrongful death. This section shall apply to any health care lawsuit that is settled as well as a health care lawsuit that is resolved by a fact finder. This section shall not apply to section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) of the Social Security Act.CommentsClose CommentsPermalink

SEC. 505. PUNITIVE DAMAGES.

(a) In General- Punitive damages may, if otherwise permitted by applicable State or Federal law, be awarded against any person in a health care lawsuit only if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer. In any health care lawsuit where no judgment for compensatory damages is rendered against such person, no punitive damages may be awarded with respect to the claim in such lawsuit. No demand for punitive damages shall be included in a health care lawsuit as initially filed. A court may allow a claimant to file an amended pleading for punitive damages only upon a motion by the claimant and after a finding by the court, upon review of supporting and opposing affidavits or after a hearing, after weighing the evidence, that the claimant has established by a substantial probability that the claimant will prevail on the claim for punitive damages. At the request of any party in a health care lawsuit, the trier of fact shall consider in a separate proceeding--CommentsClose CommentsPermalink





(1) whether punitive damages are to be awarded and the amount of such award; andCommentsClose CommentsPermalink





(2) the amount of punitive damages following a determination of punitive liability.CommentsClose CommentsPermalink





If a separate proceeding is requested, evidence relevant only to the claim for punitive damages, as determined by applicable State law, shall be inadmissible in any proceeding to determine whether compensatory damages are to be awarded.CommentsClose CommentsPermalink





(b) Determining Amount of Punitive Damages-CommentsClose CommentsPermalink





(1) FACTORS CONSIDERED- In determining the amount of punitive damages, if awarded, in a health care lawsuit, the trier of fact shall consider only the following--CommentsClose CommentsPermalink





(A) the severity of the harm caused by the conduct of such party;CommentsClose CommentsPermalink





(B) the duration of the conduct or any concealment of it by such party;CommentsClose CommentsPermalink





(C) the profitability of the conduct to such party;CommentsClose CommentsPermalink





(D) the number of products sold or medical procedures rendered for compensation, as the case may be, by such party, of the kind causing the harm complained of by the claimant;CommentsClose CommentsPermalink





(E) any criminal penalties imposed on such party, as a result of the conduct complained of by the claimant; andCommentsClose CommentsPermalink





(F) the amount of any civil fines assessed against such party as a result of the conduct complained of by the claimant.CommentsClose CommentsPermalink





(2) MAXIMUM AWARD- The amount of punitive damages, if awarded, in a health care lawsuit may be as much as $250,000 or as much as two times the amount of economic damages awarded, whichever is greater. The jury shall not be informed of this limitation.CommentsClose CommentsPermalink





(c) No Punitive Damages for Products That Comply With FDA Standards-CommentsClose CommentsPermalink





(1) IN GENERAL-CommentsClose CommentsPermalink





(A) No punitive damages may be awarded against the manufacturer or distributor of a medical product, or a supplier of any component or raw material of such medical product, based on a claim that such product caused the claimant’s harm where--CommentsClose CommentsPermalink





(i)(I) such medical product was subject to premarket approval, clearance, or licensure by the Food and Drug Administration with respect to the safety of the formulation or performance of the aspect of such medical product which caused the claimant’s harm or the adequacy of the packaging or labeling of such medical product; andCommentsClose CommentsPermalink





(II) such medical product was so approved, cleared, or licensed; orCommentsClose CommentsPermalink





(ii) such medical product is generally recognized among qualified experts as safe and effective pursuant to conditions established by the Food and Drug Administration and applicable Food and Drug Administration regulations, including without limitation those related to packaging and labeling, unless the Food and Drug Administration has determined that such medical product was not manufactured or distributed in substantial compliance with applicable Food and Drug Administration statutes and regulations.CommentsClose CommentsPermalink





(B) RULE OF CONSTRUCTION- Subparagraph (A) may not be construed as establishing the obligation of the Food and Drug Administration to demonstrate affirmatively that a manufacturer, distributor, or supplier referred to in such subparagraph meets any of the conditions described in such subparagraph.CommentsClose CommentsPermalink





(2) LIABILITY OF HEALTH CARE PROVIDERS- A health care provider who prescribes, or who dispenses pursuant to a prescription, a medical product approved, licensed, or cleared by the Food and Drug Administration shall not be named as a party to a product liability lawsuit involving such product and shall not be liable to a claimant in a class action lawsuit against the manufacturer, distributor, or seller of such product. Nothing in this paragraph prevents a court from consolidating cases involving health care providers and cases involving products liability claims against the manufacturer, distributor, or product seller of such medical product.CommentsClose CommentsPermalink





(3) PACKAGING- In a health care lawsuit for harm which is alleged to relate to the adequacy of the packaging or labeling of a drug which is required to have tamper-resistant packaging under regulations of the Secretary of Health and Human Services (including labeling regulations related to such packaging), the manufacturer or product seller of the drug shall not be held liable for punitive damages unless such packaging or labeling is found by the trier of fact by clear and convincing evidence to be substantially out of compliance with such regulations.CommentsClose CommentsPermalink





(4) EXCEPTION- Paragraph (1) shall not apply in any health care lawsuit in which--CommentsClose CommentsPermalink





(A) a person, before or after premarket approval, clearance, or licensure of such medical product, knowingly misrepresented to or withheld from the Food and Drug Administration information that is required to be submitted under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) or section 351 of the Public Health Service Act (42 U.S.C. 262) that is material and is causally related to the harm which the claimant allegedly suffered; orCommentsClose CommentsPermalink





(B) a person made an illegal payment to an official of the Food and Drug Administration for the purpose of either securing or maintaining approval, clearance, or licensure of such medical product.CommentsClose CommentsPermalink

SEC. 506. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN HEALTH CARE LAWSUITS.

(a) In General- In any health care lawsuit, if an award of future damages, without reduction to present value, equaling or exceeding $50,000 is made against a party with sufficient insurance or other assets to fund a periodic payment of such a judgment, the court shall, at the request of any party, enter a judgment ordering that the future damages be paid by periodic payments. In any health care lawsuit, the court may be guided by the Uniform Periodic Payment of Judgments Act promulgated by the National Conference of Commissioners on Uniform State Laws.CommentsClose CommentsPermalink





(b) Applicability- This section applies to all actions which have not been first set for trial or retrial before the effective date of this subtitle.CommentsClose CommentsPermalink

SEC. 507. DEFINITIONS.

In this subtitle:CommentsClose CommentsPermalink





(1) ALTERNATIVE DISPUTE RESOLUTION SYSTEM; ADR- The term ‘alternative dispute resolution system’ or ‘ADR’ means a system that provides for the resolution of health care lawsuits in a manner other than through a civil action brought in a State or Federal court.CommentsClose CommentsPermalink





(2) CLAIMANT- The term ‘claimant’ means any person who brings a health care lawsuit, including a person who asserts or claims a right to legal or equitable contribution, indemnity, or subrogation, arising out of a health care liability claim or action, and any person on whose behalf such a claim is asserted or such an action is brought, whether deceased, incompetent, or a minor.CommentsClose CommentsPermalink





(3) COLLATERAL SOURCE BENEFITS- The term ‘collateral source benefits’ means any amount paid or reasonably likely to be paid in the future to or on behalf of the claimant, or any service, product, or other benefit provided or reasonably likely to be provided in the future to or on behalf of the claimant, as a result of the injury or wrongful death, pursuant to--CommentsClose CommentsPermalink





(A) any State or Federal health, sickness, income-disability, accident, or workers’ compensation law;CommentsClose CommentsPermalink





(B) any health, sickness, income-disability, or accident insurance that provides health benefits or income-disability coverage;CommentsClose CommentsPermalink





(C) any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or income-disability benefits; andCommentsClose CommentsPermalink





(D) any other publicly or privately funded program.CommentsClose CommentsPermalink





(4) COMPENSATORY DAMAGES- The term ‘compensatory damages’ means objectively verifiable monetary losses incurred as a result of the provision of, use of, or payment for (or failure to provide, use, or pay for) health care services or medical products, such as past and future medical expenses, loss of past and future earnings, cost of obtaining domestic services, loss of employment, and loss of business or employment opportunities, damages for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium (other than loss of domestic service), hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature. The term ‘compensatory damages’ includes economic damages and noneconomic damages, as such terms are defined in this section.CommentsClose CommentsPermalink





(5) CONTINGENT FEE- The term ‘contingent fee’ includes all compensation to any person or persons which is payable only if a recovery is effected on behalf of one or more claimants.CommentsClose CommentsPermalink





(6) ECONOMIC DAMAGES- The term ‘economic damages’ means objectively verifiable monetary losses incurred as a result of the provision of, use of, or payment for (or failure to provide, use, or pay for) health care services or medical products, such as past and future medical expenses, loss of past and future earnings, cost of obtaining domestic services, loss of employment, and loss of business or employment opportunities.CommentsClose CommentsPermalink





(7) HEALTH CARE LAWSUIT- The term ‘health care lawsuit’ means any health care liability claim concerning the provision of health care goods or services or any medical product affecting interstate commerce, or any health care liability action concerning the provision of health care goods or services or any medical product affecting interstate commerce, brought in a State or Federal court or pursuant to an alternative dispute resolution system, against a health care provider, a health care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, regardless of the theory of liability on which the claim is based, or the number of claimants, plaintiffs, defendants, or other parties, or the number of claims or causes of action, in which the claimant alleges a health care liability claim. Such term does not include a claim or action which is based on criminal liability; which seeks civil fines or penalties paid to Federal, State, or local government; or which is grounded in antitrust.CommentsClose CommentsPermalink





(8) HEALTH CARE LIABILITY ACTION- The term ‘health care liability action’ means a civil action brought in a State or Federal court or pursuant to an alternative dispute resolution system, against a health care provider, a health care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, regardless of the theory of liability on which the claim is based, or the number of plaintiffs, defendants, or other parties, or the number of causes of action, in which the claimant alleges a health care liability claim.CommentsClose CommentsPermalink





(9) HEALTH CARE LIABILITY CLAIM- The term ‘health care liability claim’ means a demand by any person, whether or not pursuant to ADR, against a health care provider, health care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, including, but not limited to, third-party claims, cross-claims, counter-claims, or contribution claims, which are based upon the provision of, use of, or payment for (or the failure to provide, use, or pay for) health care services or medical products, regardless of the theory of liability on which the claim is based, or the number of plaintiffs, defendants, or other parties, or the number of causes of action.CommentsClose CommentsPermalink





(10) HEALTH CARE ORGANIZATION- The term ‘health care organization’ means any person or entity which is obligated to provide or pay for health benefits under any health plan, including any person or entity acting under a contract or arrangement with a health care organization to provide or administer any health benefit.CommentsClose CommentsPermalink





(11) HEALTH CARE PROVIDER- The term ‘health care provider’ means any person or entity required by State or Federal laws or regulations to be licensed, registered, or certified to provide health care services, and being either so licensed, registered, or certified, or exempted from such requirement by other statute or regulation.CommentsClose CommentsPermalink





(12) HEALTH CARE GOODS OR SERVICES- The term ‘health care goods or services’ means any goods or services provided by a health care organization, provider, or by any individual working under the supervision of a health care provider, that relates to the diagnosis, prevention, or treatment of any human disease or impairment, or the assessment or care of the health of human beings.CommentsClose CommentsPermalink





(13) MALICIOUS INTENT TO INJURE- The term ‘malicious intent to injure’ means intentionally causing or attempting to cause physical injury other than providing health care goods or services.CommentsClose CommentsPermalink





(14) MEDICAL PRODUCT- The term ‘medical product’ means a drug, device, or biological product intended for humans, and the terms ‘drug’, ‘device’, and ‘biological product’ have the meanings given such terms in sections 201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) and (h)) and section 351(a) of the Public Health Service Act (42 U.S.C. 262(a)), respectively, including any component or raw material used therein, but excluding health care services.CommentsClose CommentsPermalink





(15) NONECONOMIC DAMAGES- The term ‘noneconomic damages’ means damages for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium (other than loss of domestic service), hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature.CommentsClose CommentsPermalink





(16) PUNITIVE DAMAGES- The term ‘punitive damages’ means damages awarded, for the purpose of punishment or deterrence, and not solely for compensatory purposes, against a health care provider, health care organization, or a manufacturer, distributor, or supplier of a medical product. Punitive damages are neither economic nor noneconomic damages.CommentsClose CommentsPermalink





(17) RECOVERY- The term ‘recovery’ means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim, including all costs paid or advanced by any person. Costs of health care incurred by the plaintiff and the attorneys’ office overhead costs or charges for legal services are not deductible disbursements or costs for such purpose.CommentsClose CommentsPermalink





(18) STATE- The term ‘State’ means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States, or any political subdivision thereof.CommentsClose CommentsPermalink

SEC. 508. EFFECT ON OTHER LAWS.

(a) Vaccine Injury-CommentsClose CommentsPermalink





(1) To the extent that title XXI of the Public Health Service Act (42 U.S.C. 300aa-1 et seq.) establishes a Federal rule of law applicable to a civil action brought for a vaccine-related injury or death--CommentsClose CommentsPermalink





(A) this subtitle does not affect the application of the rule of law to such an action; andCommentsClose CommentsPermalink





(B) any rule of law prescribed by this subtitle in conflict with a rule of law of such title XXI shall not apply to such action.CommentsClose CommentsPermalink





(2) If there is an aspect of a civil action brought for a vaccine-related injury or death to which a Federal rule of law under title XXI of the Public Health Service Act (42 U.S.C. 300aa-1 et seq.) does not apply, then this subtitle or otherwise applicable law (as determined under this subtitle) will apply to such aspect of such action.CommentsClose CommentsPermalink





(b) Other Federal Law- Except as provided in this section, nothing in this subtitle shall be deemed to affect any defense available to a defendant in a health care lawsuit or action under any other provision of Federal law.CommentsClose CommentsPermalink

SEC. 509. STATE FLEXIBILITY AND PROTECTION OF STATES’ RIGHTS.

(a) Health Care Lawsuits- The provisions governing health care lawsuits set forth in this subtitle preempt, subject to subsections (b) and (c), State law to the extent that State law prevents the application of any provisions of law established by or under this subtitle. The provisions governing health care lawsuits set forth in this subtitle supersede chapter 171 of title 28, United States Code, to the extent that such chapter--CommentsClose CommentsPermalink





(1) provides for a greater amount of damages or contingent fees, a longer period in which a health care lawsuit may be commenced, or a reduced applicability or scope of periodic payment of future damages, than provided in this subtitle; orCommentsClose CommentsPermalink





(2) prohibits the introduction of evidence regarding collateral source benefits, or mandates or permits subrogation or a lien on collateral source benefits.CommentsClose CommentsPermalink





(b) Protection of States’ Rights and Other Laws- (1) Any issue that is not governed by any provision of law established by or under this subtitle (including State standards of negligence) shall be governed by otherwise applicable State or Federal law.CommentsClose CommentsPermalink





(2) This subtitle shall not preempt or supersede any State or Federal law that imposes greater procedural or substantive protections for health care providers and health care organizations from liability, loss, or damages than those provided by this subtitle or create a cause of action.CommentsClose CommentsPermalink





(c) State Flexibility- No provision of this subtitle shall be construed to preempt--CommentsClose CommentsPermalink





(1) any State law (whether effective before, on, or after the date of the enactment of this Act) that specifies a particular monetary amount of compensatory or punitive damages (or the total amount of damages) that may be awarded in a health care lawsuit, regardless of whether such monetary amount is greater or lesser than is provided for under this subtitle, notwithstanding section 502(a); orCommentsClose CommentsPermalink





(2) any defense available to a party in a health care lawsuit under any other provision of State or Federal law.CommentsClose CommentsPermalink

SEC. 510. APPLICABILITY; EFFECTIVE DATE.

This subtitle shall apply to any health care lawsuit brought in a Federal or State court, or subject to an alternative dispute resolution system, that is initiated on or after the date of the enactment of this Act, except that any health care lawsuit arising from an injury occurring prior to the date of the enactment of this Act shall be governed by the applicable statute of limitations provisions in effect at the time the injury occurred.CommentsClose CommentsPermalink

SEC. 511. SENSE OF CONGRESS.

It is the sense of Congress that a health insurer should be liable for damages for harm caused when it makes a decision as to what care is medically necessary and appropriate.CommentsClose CommentsPermalink

Subtitle B--Liability Protection for Community Health Center VolunteersCommentsClose CommentsPermalink

SEC. 521. HEALTH CENTERS UNDER PUBLIC HEALTH SERVICE ACT; LIABILITY PROTECTIONS FOR VOLUNTEER PRACTITIONERS.

(a) In General- Section 224 of the Public Health Service Act (42 U.S.C. 233) is amended--CommentsClose CommentsPermalink





(1) in subsection (g)(1)(A)--CommentsClose CommentsPermalink





(A) in the first sentence, by striking ‘or employee’ and inserting ‘employee, or (subject to subsection (k)(4)) volunteer practitioner’; andCommentsClose CommentsPermalink





(B) in the second sentence, by inserting ‘and subsection (k)(4)’ after ‘subject to paragraph (5)’; andCommentsClose CommentsPermalink





(2) in each of subsections (g), (i), (j), (k), (l), and (m)--CommentsClose CommentsPermalink





(A) by striking the term ‘employee, or contractor’ each place such term appears and inserting ‘employee, volunteer practitioner, or contractor’;CommentsClose CommentsPermalink





(B) by striking the term ‘employee, and contractor’ each place such term appears and inserting ‘employee, volunteer practitioner, and contractor’;CommentsClose CommentsPermalink





(C) by striking the term ‘employee, or any contractor’ each place such term appears and inserting ‘employee, volunteer practitioner, or contractor’; andCommentsClose CommentsPermalink





(D) by striking the term ‘employees, or contractors’ each place such term appears and inserting ‘employees, volunteer practitioners, or contractors’.CommentsClose CommentsPermalink





(b) Applicability; Definition- Section 224(k) of the Public Health Service Act (42 U.S.C. 233(k)) is amended by adding at the end the following paragraph:CommentsClose CommentsPermalink





‘(4)(A) Subsections (g) through (m) apply with respect to volunteer practitioners beginning with the first fiscal year for which an appropriations Act provides that amounts in the fund under paragraph (2) are available with respect to such practitioners.CommentsClose CommentsPermalink





‘(B) For purposes of subsections (g) through (m), the term ‘volunteer practitioner’ means a practitioner who, with respect to an entity described in subsection (g)(4), meets the following conditions:CommentsClose CommentsPermalink





‘(i) The practitioner is a licensed physician or a licensed clinical psychologist.CommentsClose CommentsPermalink





‘(ii) At the request of such entity, the practitioner provides services to patients of the entity, at a site at which the entity operates or at a site designated by the entity. The weekly number of hours of services provided to the patients by the practitioner is not a factor with respect to meeting conditions under this subparagraph.CommentsClose CommentsPermalink





‘(iii) The practitioner does not for the provision of such services receive any compensation from such patients, from the entity, or from third-party payors (including reimbursement under any insurance policy or health plan, or under any Federal or State health benefits program).’.CommentsClose CommentsPermalink

TITLE VI--MISCELLANEOUSCommentsClose CommentsPermalink

Subtitle A--Fighting Fraud and AbuseCommentsClose CommentsPermalink

SEC. 601. PROVIDE ADEQUATE FUNDING TO HHS OIG AND HCFAC.

(a) HCFAC Funding- Section 1817(k)(3)(A) of the Social Security Act (42 U.S.C. 1395i(k)(3)(A)) is amended--CommentsClose CommentsPermalink





(1) in clause (i)--CommentsClose CommentsPermalink





(A) in subclause (IV), by striking ‘2009, and 2010’ and inserting ‘and 2009’; andCommentsClose CommentsPermalink





(B) by amending subclause (V) to read as follows:CommentsClose CommentsPermalink





‘(V) for each fiscal year after fiscal year 2009, $300,000,000.’; andCommentsClose CommentsPermalink





(2) in clause (ii)--CommentsClose CommentsPermalink





(A) in subclause (IX), by striking ‘2009, and 2010’ and inserting ‘and 2009’; andCommentsClose CommentsPermalink





(B) in subclause (X), by striking ‘2010’ and inserting ‘2009’ and by inserting before the period at the end the following: ‘, plus the amount by which the amount made available under clause (i)(V) for fiscal year 2010 exceeds the amount made available under clause (i)(IV) for 2009’.CommentsClose CommentsPermalink





(b) OIG Funding- There are authorized to be appropriated for each of fiscal years 2010 through 2019 $100,000,000 for the Office of the Inspector General of the Department of Health and Human Services for fraud prevention activities under the Medicare and Medicaid programs.CommentsClose CommentsPermalink

SEC. 602. INCREASED CIVIL MONEY PENALTIES AND CRIMINAL FINES FOR MEDICARE FRAUD AND ABUSE.

(a) Increased Civil Money Penalties- Section 1128A of the Social Security Act (42 U.S.C. 1320a-7a) is amended--CommentsClose CommentsPermalink





(1) in subsection (a), in the flush matter following paragraph (7)--CommentsClose CommentsPermalink





(A) by striking ‘$10,000’ each place it appears and inserting ‘$20,000’;CommentsClose CommentsPermalink





(B) by striking ‘$15,000’ and inserting ‘$30,000’; andCommentsClose CommentsPermalink





(C) by striking ‘$50,000’ and inserting ‘$100,000’; andCommentsClose CommentsPermalink





(2) in subsection (b)--CommentsClose CommentsPermalink





(A) in paragraph (1), in the flush matter following subparagraph (B), by striking ‘$2,000’ and inserting ‘$4,000’;CommentsClose CommentsPermalink





(B) in paragraph (2), by striking ‘$2,000’ and inserting ‘$4,000’; andCommentsClose CommentsPermalink





(C) in paragraph (3)(A)(i), by striking ‘$5,000’ and inserting ‘$10,000’.CommentsClose CommentsPermalink





(b) Increased Criminal Fines- Section 1128B of the Social Security Act (42 U.S.C. 1320a-7b) is amended--CommentsClose CommentsPermalink





(1) in subsection (a), in the flush matter following paragraph (6)--CommentsClose CommentsPermalink





(A) by striking ‘$25,000’ and inserting ‘$100,000’; andCommentsClose CommentsPermalink





(B) by striking ‘$10,000’ and inserting ‘$20,000’;CommentsClose CommentsPermalink





(2) in subsection (b)--CommentsClose CommentsPermalink





(A) in paragraph (1), in the flush matter following subparagraph (B), by striking ‘$25,000’ and inserting ‘$100,000’; andCommentsClose CommentsPermalink





(B) in paragraph (2), in the flush matter following subparagraph (B), by striking ‘$25,000’ and inserting ‘$100,000’;CommentsClose CommentsPermalink





(3) in subsection (c), by striking ‘$25,000’ and inserting ‘$100,000’;CommentsClose CommentsPermalink





(4) in subsection (d), in the second flush matter following subparagraph (B), by striking ‘$25,000’ and inserting ‘$100,000’; andCommentsClose CommentsPermalink





(5) in subsection (e), by striking ‘$2,000’ and inserting ‘$4,000’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to civil money penalties and fines imposed for actions taken on or after the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 603. INCREASED SENTENCES FOR FELONIES INVOLVING MEDICARE FRAUD AND ABUSE.

(a) False Statements and Representations- Section 1128B(a) of the Social Security Act (42 U.S.C. 1320a-7b(a)) is amended, in clause (i) of the flush matter following paragraph (6), by striking ‘not more than 5 years’ and inserting ‘not more than 10 years’.CommentsClose CommentsPermalink





(b) Anti-Kickback- Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a-7b(b)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1), in the flush matter following subparagraph (B), by striking ‘not more than 5 years’ and inserting ‘not more than 10 years’; andCommentsClose CommentsPermalink





(2) in paragraph (2), in the flush matter following subparagraph (B), by striking ‘not more than 5 years’ and inserting ‘not more than 10 years’.CommentsClose CommentsPermalink





(c) False Statement or Representation With Respect to Conditions or Operations of Facilities- Section 1128B(c) of the Social Security Act (42 U.S.C. 1320a-7b(c)) is amended by striking ‘not more than 5 years’ and inserting ‘not more than 10 years’.CommentsClose CommentsPermalink





(d) Excess Charges- Section 1128B(d) of the Social Security Act (42 U.S.C. 1320a-7b(d)) is amended, in the second flush matter following subparagraph (B), by striking ‘not more than 5 years’ and inserting ‘not more than 10 years’.CommentsClose CommentsPermalink





(e) Effective Date- The amendments made by this section shall apply to criminal penalties imposed for actions taken on or after the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 604. ILLEGAL DISTRIBUTION OF A MEDICARE OR MEDICAID BENEFICIARY IDENTIFICATION OR PROVIDER NUMBER.

Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a-7b(b)), as amended by section 4(b), is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(5) Whoever knowingly, intentionally, and with the intent to defraud purchases, sells or distributes, or arranges for the purchase, sale, or distribution of two or more Medicare or Medicaid beneficiary identification numbers or provider numbers shall be imprisoned for not more than three years or fined under title 18, United States Code (or, if greater, an amount equal to the monetary loss to the Federal and any State government as a result of such acts), or both.’.CommentsClose CommentsPermalink

SEC. 605. USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW.

Title XVIII of the Social Security Act is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW

‘Sec. 1899. (a) In General- The Secretary shall establish procedures for the use of technology (including front-end, pre-payment technology similar to that used by hedge funds, investment funds, and banks) to provide real-time data analysis of claims for payment under this title to identify and investigate unusual billing or order practices under this title that could indicate fraud or abuse.CommentsClose CommentsPermalink





‘(b) Competitive Bidding- The procedures established under subsection (a) shall ensure that the implementation of such technology is conducted through a competitive bidding process.’.CommentsClose CommentsPermalink

Subtitle B--State Transparency Plan PortalCommentsClose CommentsPermalink

SEC. 611. PROVIDING INFORMATION ON HEALTH COVERAGE OPTIONS AND HEALTH CARE PROVIDERS.

(a) State-Based Portal- A State (by itself or jointly with other States) may contract with a private entity to establish a Health Plan and Provider Portal website (referred to in this section as a ‘plan portal’) for the purposes of providing standardized information--CommentsClose CommentsPermalink





(1) on health insurance plans that have been certified to be available for purchase in that State; andCommentsClose CommentsPermalink





(2) on price and quality information on health care providers (including physicians, hospitals, and other health care institutions).CommentsClose CommentsPermalink





(b) Pilot Program-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 90 days after the date of the enactment of this Act the Secretary of Health and Human Services shall work with States to establish no later than 2011, consistent with this title, a website that will serve as a pilot program for a national portal for information structured in a manner so individuals may directly link to the State plan portal for the State in which they reside.CommentsClose CommentsPermalink





(2) CONTRACTS WITH STATE- The Secretary shall enter into contracts with States, in a number and distribution determined by the Secretary, to develop State plan portals that follow the applicable standards and regulations under this section.CommentsClose CommentsPermalink





(3) COMMON STANDARDS FOR PLAN PORTALS-CommentsClose CommentsPermalink





(A) IN GENERAL- In connection with such website, the Secretary shall establish standards for interoperability and consistency for State plan portals so that individuals can access and view information in a similar manner on plan portals of different States. Such standards shall include standard definitions for health insurance plan benefits so that individuals can accurately compare health insurance plans within such portals and standards for the inclusion of information described in subsection (c).CommentsClose CommentsPermalink





(B) CONSULTATION- The Secretary shall consult with a group consisting of a balanced representation of the critical stakeholders (including States, health insurance issuers, the National Association of Insurance Commissioners, qualified health care provider-based entities (including physicians, hospitals, and other health care institutions), and a standards development organization) to develop such standards.CommentsClose CommentsPermalink





(C) ISSUANCE-CommentsClose CommentsPermalink





(i) IN GENERAL- Not later than 6 months after the date of the enactment of this Act, the Secretary shall issue, by regulation, after notice and opportunity for public comment, standards that are consistent with the recommendations made by the group under subparagraph (B).CommentsClose CommentsPermalink





(ii) DISSEMINATION- The Secretary shall broadly disseminate the standards so issued.CommentsClose CommentsPermalink





(D) REVIEW- One year after the date of establishment of the pilot program under this subsection, the Secretary, in consultation with stakeholder group described in subparagraph (B), shall review the standards established and make such changes in such standards as may be appropriate.CommentsClose CommentsPermalink





(4) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to the Secretary such amounts as may be necessary for--CommentsClose CommentsPermalink





(A) the development and operation of the national website under this subsection; andCommentsClose CommentsPermalink





(B) contracts with States under paragraph (2) to assist in the development and initial operation of plan portals in accordance with standards established under paragraph (3) and other applicable provisions of this section.CommentsClose CommentsPermalink





(c) Information in Plan Portals- The standards for plan portals under subsection (b)(3) shall include the following:CommentsClose CommentsPermalink





(1) HEALTH INSURANCE INFORMATION- Each plan portal shall meet the following requirements with respect to information on health insurance plans:CommentsClose CommentsPermalink





(A) The plan portal shall present complete information on the costs and benefits of health insurance plans (including information on monthly premium, copayments, deductibles, and covered benefits) in a uniform manner that--CommentsClose CommentsPermalink





(i) uses the standard definitions developed under subsection (b)(3); andCommentsClose CommentsPermalink





(ii) is designed to allow consumers to easily compare such plans.CommentsClose CommentsPermalink





(B) The plan portal shall be available on the Internet and accessible to all individuals in the United States.CommentsClose CommentsPermalink





(C) The plan portal shall allow consumers to search and sort data on the health insurance plans in the plan portal on criteria such as coverage of specific benefits (such as coverage of disease management services or pediatric care services), as well as data available respecting quality of plans.CommentsClose CommentsPermalink





(D) The plan portal shall meet all relevant State laws and regulations, including laws and regulations related to the marketing of insurance products.CommentsClose CommentsPermalink





(E) Notwithstanding subsection (d)(1), the plan portal shall provide information to individuals who are eligible for the Medicaid program under title XIX of the Social Security Act or State Children’s Health Insurance Program under title XXI of such Act by including information on options, eligibility, and how to enroll through providing a link to a website maintained with respect to such State programs.CommentsClose CommentsPermalink





(F) The plan portal shall provide support to individuals who are eligible for tax credits and deductions under the amendments made by this Act to enhance such individual’s ability to access such credits and deductions.CommentsClose CommentsPermalink





(G) The plan portal shall allow consumers to access quality data on providers as made available through a website once that data is available.CommentsClose CommentsPermalink





(2) PROVIDER INFORMATION- Each plan portal shall meet the following requirements with respect to information on health care providers:CommentsClose CommentsPermalink





(A) Identifying and licensure information.CommentsClose CommentsPermalink





(B) Self-pay prices charged, including variation in such prices.CommentsClose CommentsPermalink





For purposes of subparagraph (B), the term ‘self-pay price’ means the price charged by a provider to individuals for items or services where the price is not established or negotiated through a health care program or third party.CommentsClose CommentsPermalink





(3) TAX CREDIT AND DEDUCTION INFORMATION- Each plan portal shall also include information on tax credits and deductions that may be available for purpose of qualified health plans.CommentsClose CommentsPermalink





(4) INCLUSION OF QUALITY INFORMATION- The Secretary, after collaboration with States and health care providers (including practicing physicians, hospitals, and other health care institutions), shall submit to Congress recommendations on how to include on plan portals information on performance-based quality measures obtained under section 612.CommentsClose CommentsPermalink





(d) Prohibitions-CommentsClose CommentsPermalink





(1) DIRECT ENROLLMENT- A plan portal may not directly enroll individuals in health insurance plans or under a State Medicaid plan or a State children’s health insurance plan.CommentsClose CommentsPermalink





(2) CONFLICTS OF INTEREST-CommentsClose CommentsPermalink





(A) COMPANIES- A health insurance issuer offering a health insurance plan through a plan portal may not--CommentsClose CommentsPermalink





(i) be the private entity developing and maintaining a plan portal under this section; orCommentsClose CommentsPermalink





(ii) have an ownership interest in such private entity or in the plan portal.CommentsClose CommentsPermalink





(B) INDIVIDUALS- An individual employed by a health insurance issuer offering a health insurance plan through a plan portal may not serve as a director or officer for--CommentsClose CommentsPermalink





(i) the private entity developing and maintaining a plan portal under this section; orCommentsClose CommentsPermalink





(ii) the plan portal.CommentsClose CommentsPermalink





(e) Construction- Nothing in this section shall be construed to prohibit health insurance brokers and agents from--CommentsClose CommentsPermalink





(1) utilizing the plan portal for any purpose; orCommentsClose CommentsPermalink





(2) marketing or offering health insurance products.CommentsClose CommentsPermalink





(f) State Defined- In this section, the term ‘State’ has the meaning given such term for purposes of title XIX of the Social Security Act.CommentsClose CommentsPermalink

SEC. 612. ESTABLISHMENT OF PERFORMANCE-BASED QUALITY MEASURES.

Not later than January 1, 2010, the Secretary of Health and Human Services shall submit to Congress a proposal for a formalized process for the development of performance-based quality measures that could be applied to physicians’ services under the Medicare program. Such proposal shall be in concert and agreement with the Physician Consortium for Performance Improvement and shall only utilize measures agreed upon by each physician specialty organization.CommentsClose CommentsPermalink

Subtitle C--Medicare Accountable Care Organization Demonstration ProgramCommentsClose CommentsPermalink

SEC. 621. MEDICARE ACCOUNTABLE CARE ORGANIZATION DEMONSTRATION PROGRAM.

(a) Establishment-CommentsClose CommentsPermalink





(1) IN GENERAL- In order to promote innovative care coordination and delivery that is cost-effective, the Secretary of Health and Human Services (in this section referred to as the ‘Secretary’) shall conduct a demonstration program under the Medicare program under which--CommentsClose CommentsPermalink





(A) groups of providers meeting certain criteria may work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an Accountable Care Organization (in this section referred to as an ‘ACO’); andCommentsClose CommentsPermalink





(B) providers in participating ACOs are eligible for bonuses based on performance.CommentsClose CommentsPermalink





(2) MEDICARE FEE-FOR-SERVICE BENEFICIARY DEFINED- In this section, the term ‘Medicare fee-for-service beneficiary’ means an individual who is enrolled in the original Medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act and not enrolled in an MA plan under part C of such title.CommentsClose CommentsPermalink





(b) Eligible ACOs-CommentsClose CommentsPermalink





(1) IN GENERAL- Subject to paragraph (2), the following provider groups are eligible to participate as ACOs under the demonstration program under this section:CommentsClose CommentsPermalink





(A) Physicians in group practice arrangements.CommentsClose CommentsPermalink





(B) Networks of individual physician practices.CommentsClose CommentsPermalink





(C) Partnerships or joint venture arrangements between hospitals and physicians.CommentsClose CommentsPermalink





(D) Partnerships or joint ventures, which may include pharmacists providing medication therapy management.CommentsClose CommentsPermalink





(E) Hospitals employing physicians.CommentsClose CommentsPermalink





(F) Integrated delivery systems.CommentsClose CommentsPermalink





(G) Community-based coalitions of providers.CommentsClose CommentsPermalink





(2) REQUIREMENTS- An ACO shall meet the following requirements:CommentsClose CommentsPermalink





(A) The ACO shall have a formal legal structure that would allow the organization to receive and distribute bonuses to participating providers.CommentsClose CommentsPermalink





(B) The ACO shall include the primary care providers of at least 5,000 Medicare fee-for-service beneficiaries.CommentsClose CommentsPermalink





(C) The ACO shall be willing to become accountable for the overall care of the Medicare fee-for-service beneficiaries.CommentsClose CommentsPermalink





(D) The ACO shall provide the Secretary with a list of primary care and specialist physicians participating in the ACO to support the beneficiary assignment, implementation of performance measures, and the determination of bonus payments under the demonstration program.CommentsClose CommentsPermalink





(E) The ACO shall have in place contracts with a core group of key specialist physicians, a leadership and management structure, and processes to promote evidence-based medicine and to coordinate care.CommentsClose CommentsPermalink





(c) Assignment of Medicare Fee-for-service Beneficiaries-CommentsClose CommentsPermalink





(1) IN GENERAL- Under the demonstration program under this section, each Medicare fee-for-service Medicare beneficiary shall be automatically assigned to a primary care provider. Such assignment shall be based on the physician from whom the beneficiary received the most primary care in the preceding year.CommentsClose CommentsPermalink





(2) BENEFICIARIES MAY CONTINUE TO SEE PROVIDERS OUTSIDE OF THE ACO- Under the demonstration program under this section, a Medicare fee-for-service Medicare beneficiary may continue to see providers in and outside of the ACO to which they have been assigned.CommentsClose CommentsPermalink





(d) Bonus Payments-CommentsClose CommentsPermalink





(1) IN GENERAL- Under the demonstration program, Medicare payments shall continue to be made to providers under the original Medicare fee-for-service program in the same manner as they would otherwise be made except that a participating ACO is eligible for bonuses if--CommentsClose CommentsPermalink





(A) it meets certain quality performance measures; andCommentsClose CommentsPermalink





(B) spending for their Medicare fee-for-service beneficiaries meets the requirement under paragraph (3).CommentsClose CommentsPermalink





(2) QUALITY- Under the demonstration program under this section, providers meet the requirement under paragraph (1)(A) if they generally follow consensus-based guidelines established by non-government professional medical societies. Patient satisfaction and risk-adjusted outcomes shall be determined through an independent entity with medical expertise.CommentsClose CommentsPermalink





(3) REQUIREMENT RELATING TO SPENDING-CommentsClose CommentsPermalink





(A) IN GENERAL- An ACO shall only be eligible to receive a bonus payment if the average Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries over a two-year period is at least 2 percent below the average benchmark for the corresponding two-year period. The benchmark for each ACO shall be set using the most recent three years of total per-beneficiary spending for Medicare fee-for-service beneficiaries assigned to the ACO. Such benchmark shall be updated by the projected rate of growth in national per capita spending for the original Medicare fee-for-service program, as projected (using the most recent three years of data) by the Chief Actuary of the Centers for Medicare & Medicaid Services.CommentsClose CommentsPermalink





(4) AMOUNT OF BONUS PAYMENTS- The amount of the bonus payment to a participating ACO shall be one-half of the percentage point difference between the two-year average of their patients’ Medicare expenditures and 98 percent of the two-year average benchmark. The bonus amount, in dollars, shall be equal to the bonus share multiplied by the benchmark for the most recent year.CommentsClose CommentsPermalink





(5) LIMITATION- Bonus payments may only be made to an ACO if the primary care provider to which the Medicare fee-for-service beneficiary has been assigned under subsection (c) elects to participate in such ACO.CommentsClose CommentsPermalink





(e) Waiver Authority- The Secretary may waive such requirements of titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be appropriate for the purpose of carrying out the demonstration program under this section.CommentsClose CommentsPermalink





(f) Report- Upon completion of the demonstration program under this section, the Secretary shall submit to Congress a report on the program together with such recommendations as the Secretary determines appropriate.CommentsClose CommentsPermalink

Subtitle D--Repeal of Unused Stimulus FundsCommentsClose CommentsPermalink

SEC. 631. RESCISSION AND REPEAL IN ARRA.

(a) Rescission- Of the discretionary appropriations made available in division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), all unobligated balances are rescinded.CommentsClose CommentsPermalink





(b) Repeal- Subtitles B and C of title II and titles III through VII of division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) are repealed.CommentsClose CommentsPermalink