HR 4038 IHCommentsClose CommentsPermalink

To take meaningful steps to lower health care costs and increase access to health insurance coverage without raising taxes, cutting Medicare benefits for seniors, adding to the national deficit, intervening in the doctor-patient relationship, or instituting a government takeover of health care.CommentsClose CommentsPermalink

November 6, 2009CommentsClose CommentsPermalink

Mr. CAMP (for himself, Mr. BOEHNER, Mr. CANTOR, Mr. PENCE, Mr. MCCOTTER, Mr. CARTER, Mr. SESSIONS, Mr. MCCARTHY of California, Mr. BLUNT, Mr. KLINE of Minnesota, Mr. BARTON of Texas, Mr. DREIER, Mr. HERGER, Mr. TIBERI, Mr. DAVIS of Kentucky, Mr. SAM JOHNSON of Texas, Mr. BOUSTANY, Mr. SCALISE, Mr. BRADY of Texas, Mr. REICHERT, Mr. ROSKAM, Mr. LINDER, Mr. STEARNS, and Mr. BUYER) 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, 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

To take meaningful steps to lower health care costs and increase access to health insurance coverage without raising taxes, cutting Medicare benefits for seniors, adding to the national deficit, intervening in the doctor-patient relationship, or instituting a government takeover of health care.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; PURPOSE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the ‘Common Sense Health Care Reform and Affordability Act’.CommentsClose CommentsPermalink





(b) Purpose- The purpose of this Act is to take meaningful steps to lower health care costs and increase access to health insurance coverage (especially for individuals with preexisting conditions) without--CommentsClose CommentsPermalink





(1) raising taxes;CommentsClose CommentsPermalink





(2) cutting Medicare benefits for seniors;CommentsClose CommentsPermalink





(3) adding to the national deficit;CommentsClose CommentsPermalink





(4) intervening in the doctor-patient relationship; orCommentsClose CommentsPermalink





(5) instituting a government takeover of health care.CommentsClose CommentsPermalink





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





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

DIVISION A--MAKING HEALTH CARE COVERAGE AFFORDABLE FOR EVERY AMERICAN

TITLE I--ENSURING COVERAGE FOR INDIVIDUALS WITH PREEXISTING CONDITIONS AND MULTIPLE HEALTH CARE NEEDS

Sec. 101. Establish universal access programs to improve high risk pools and reinsurance markets.CommentsClose CommentsPermalink





Sec. 102. Elimination of certain requirements for guaranteed availability in individual market.CommentsClose CommentsPermalink





Sec. 103. No annual or lifetime spending caps.CommentsClose CommentsPermalink





Sec. 104. Preventing unjust cancellation of insurance coverage.CommentsClose CommentsPermalink

TITLE II--REDUCING HEALTH CARE PREMIUMS AND THE NUMBER OF UNINSURED AMERICANS

Sec. 111. State innovation programs.CommentsClose CommentsPermalink





Sec. 112. Health plan finders.CommentsClose CommentsPermalink





Sec. 113. Administrative simplification.CommentsClose CommentsPermalink

DIVISION B--IMPROVING ACCESS TO HEALTH CARE

TITLE I--EXPANDING ACCESS AND LOWERING COSTS FOR SMALL BUSINESSES

Sec. 201. Rules governing association health plans.CommentsClose CommentsPermalink





Sec. 202. Clarification of treatment of single employer arrangements.CommentsClose CommentsPermalink





Sec. 203. Enforcement provisions relating to association health plans.CommentsClose CommentsPermalink





Sec. 204. Cooperation between Federal and State authorities.CommentsClose CommentsPermalink





Sec. 205. Effective date and transitional and other rules.CommentsClose CommentsPermalink

TITLE II--TARGETED EFFORTS TO EXPAND ACCESS

Sec. 211. Extending coverage of dependents.CommentsClose CommentsPermalink





Sec. 212. Allowing auto-enrollment for employer sponsored coverage.CommentsClose CommentsPermalink

TITLE III--EXPANDING CHOICES BY ALLOWING AMERICANS TO BUY HEALTH CARE COVERAGE ACROSS STATE LINES

Sec. 221. Interstate purchasing of health insurance.CommentsClose CommentsPermalink

TITLE IV--IMPROVING HEALTH SAVINGS ACCOUNTS

Sec. 231. Saver’s credit for contributions to health savings accounts.CommentsClose CommentsPermalink





Sec. 232. HSA funds for premiums for high deductible health plans.CommentsClose CommentsPermalink





Sec. 233. Requiring greater coordination between HDHP administrators and HSA account administrators so that enrollees can enroll in both at the same time.CommentsClose CommentsPermalink





Sec. 234. Special rule for certain medical expenses incurred before establishment of account.CommentsClose CommentsPermalink

DIVISION C--ENACTING REAL MEDICAL LIABILITY REFORM

Sec. 301. Encouraging speedy resolution of claims.CommentsClose CommentsPermalink





Sec. 302. Compensating patient injury.CommentsClose CommentsPermalink





Sec. 303. Maximizing patient recovery.CommentsClose CommentsPermalink





Sec. 304. Additional health benefits.CommentsClose CommentsPermalink





Sec. 305. Punitive damages.CommentsClose CommentsPermalink





Sec. 306. Authorization of payment of future damages to claimants in health care lawsuits.CommentsClose CommentsPermalink





Sec. 307. Definitions.CommentsClose CommentsPermalink





Sec. 308. Effect on other laws.CommentsClose CommentsPermalink





Sec. 309. State flexibility and protection of states’ rights.CommentsClose CommentsPermalink





Sec. 310. Applicability; effective date.CommentsClose CommentsPermalink

DIVISION D--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

Sec. 401. Rule of construction.CommentsClose CommentsPermalink





Sec. 402. Repeal of Federal Coordinating Council for Comparative Effectiveness Research.CommentsClose CommentsPermalink

DIVISION E--INCENTIVIZING WELLNESS AND QUALITY IMPROVEMENTS

Sec. 501. Incentives for prevention and wellness programs.CommentsClose CommentsPermalink

DIVISION F--PROTECTING TAXPAYERS

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





Sec. 602. Prohibiting taxpayer funded abortions and conscience protections.CommentsClose CommentsPermalink





Sec. 603. Improved enforcement of the Medicare and Medicaid secondary payer provisions.CommentsClose CommentsPermalink





Sec. 604. Strengthen Medicare provider enrollment standards and safeguards.CommentsClose CommentsPermalink





Sec. 605. Tracking banned providers across State lines.CommentsClose CommentsPermalink

DIVISION G--PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS

Sec. 701. Licensure pathway for biosimilar biological products.CommentsClose CommentsPermalink





Sec. 702. Fees relating to biosimilar biological products.CommentsClose CommentsPermalink





Sec. 703. Amendments to certain patent provisions.CommentsClose CommentsPermalink

DIVISION A--MAKING HEALTH CARE COVERAGE AFFORDABLE FOR EVERY AMERICANCommentsClose CommentsPermalink

TITLE I--ENSURING COVERAGE FOR INDIVIDUALS WITH PREEXISTING CONDITIONS AND MULTIPLE HEALTH CARE NEEDSCommentsClose CommentsPermalink

SEC. 101. ESTABLISH UNIVERSAL ACCESS PROGRAMS TO IMPROVE HIGH RISK POOLS AND REINSURANCE MARKETS.

(a) State Requirement-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than January 1, 2010, each State shall--CommentsClose CommentsPermalink





(A) subject to paragraph (3), operate--CommentsClose CommentsPermalink





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





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





(B) subject to paragraph (3), apply to the operation of such a program from State funds an amount equivalent to the portion of State funds derived from State premium assessments (as defined by the Secretary) that are not otherwise used on State health care programs.CommentsClose CommentsPermalink





(2) RELATION TO CURRENT QUALIFIED HIGH RISK POOL PROGRAM-CommentsClose CommentsPermalink





(A) STATES NOT OPERATING A QUALIFIED HIGH RISK POOL- In the case of a State that is not operating a current section 2745 qualified high risk pool as of the date of the enactment of this Act--CommentsClose CommentsPermalink





(i) the State may only meet the requirement of paragraph (1) through the operation of a qualified State reinsurance program described in subsection (b); andCommentsClose CommentsPermalink





(ii) the State’s operation of such a reinsurance program shall be treated, for purposes of section 2745 of the Public Health Service Act, as the operation of a qualified high risk pool described in such section.CommentsClose CommentsPermalink





(B) STATE 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





(i) as of January 1, 2010, such a pool shall not be treated as a qualified high risk pool under section 2745 of the Public Health Service Act unless the pool is a qualifying State high risk pool described in subsection (c)(1); andCommentsClose CommentsPermalink





(ii) the State may use premium assessment funds described in paragraph (1)(B) to transition from operation of such a pool to operation of a qualified State reinsurance program described in subsection (b).CommentsClose CommentsPermalink





(3) APPLICATION OF FUNDS- If the program or pool operated under paragraph (1)(A) is in strong fiscal health, as determined in accordance with standards established by the National Association of Insurance Commissioners and as approved by the State Insurance Commissioner involved, the requirement of paragraph (1)(B) shall be deemed to be met.CommentsClose CommentsPermalink





(b) Qualified State Reinsurance Program-CommentsClose CommentsPermalink





(1) IN GENERAL- For purposes of this section, a ‘qualified State reinsurance program’ means a program operated by a State program that provides reinsurance for health insurance coverage offered in the small group market in accordance with the model for such a program established (as of the date of the enactment of this Act).CommentsClose CommentsPermalink





(2) 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





(3) SATISFACTION OF HIPAA REQUIREMENT- A qualified State reinsurance program shall be deemed, for purposes of section 2745 of the Public Health Service Act, to be a qualified high risk pool under such section.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 must provide at least two coverage options, one of which must be a high deductible health plan coupled with a health savings account.CommentsClose CommentsPermalink





(B) The pool must be funded with a stable funding source.CommentsClose CommentsPermalink





(C) The pool must eliminate any waiting lists so that all eligible residents who are seeking coverage through the pool should be allowed to receive coverage through the pool.CommentsClose CommentsPermalink





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





(E) The pool must limit the pool premiums to no more than 150 percent of the average premium for applicable standard risk rates in that State.CommentsClose CommentsPermalink





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





(G) The pool must provide coverage for preventive services and disease management for chronic diseases.CommentsClose CommentsPermalink





(2) VERIFICATION OF CITIZENSHIP OR ALIEN QUALIFICATION-CommentsClose CommentsPermalink





(A) IN GENERAL- Notwithstanding any other provision of law, only citizens and nationals of the United States shall be eligible to participate in a qualifying State high risk pool that receives funds under section 2745 of the Public Health Service Act or this section.CommentsClose CommentsPermalink





(B) CONDITION OF PARTICIPATION- As a condition of a State receiving such funds, the Secretary shall require the State to certify, to the satisfaction of the Secretary, that such State requires all applicants for coverage in the qualifying State high risk pool to provide satisfactory documentation of citizenship or nationality in a manner consistent with section 1903(x) of the Social Security Act.CommentsClose CommentsPermalink





(C) RECORDS- The Secretary shall keep sufficient records such that a determination of citizenship or nationality only has to be made once for any individual under this paragraph.CommentsClose CommentsPermalink





(3) RELATION TO SECTION 2745- As of January 1, 2010, a pool shall not qualify as qualified high risk pool under section 2745 of the Public Health Service Act unless the pool is a qualifying State high risk pool described in paragraph (1).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 is appropriated to carry out section 2745 of the Public Health Service Act (including through a program or pool described in subsection (a)(1))--CommentsClose CommentsPermalink





(1) $15,000,000,000 for the period of fiscal years 2010 through 2019; andCommentsClose CommentsPermalink





(2) an additional $10,000,000,000 for the period of fiscal years 2015 through 2019.CommentsClose CommentsPermalink





(f) Definitions- In this section:CommentsClose CommentsPermalink





(1) HEALTH INSURANCE COVERAGE; HEALTH INSURANCE ISSUER- The terms ‘health insurance coverage’ and ‘health insurance issuer’ have the meanings given such terms in section 2791 of the Public Health Service Act.CommentsClose CommentsPermalink





(2) 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 as in effect as of the date of the enactment of this Act.CommentsClose CommentsPermalink





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





(4) STANDARD RISK RATE- The term ‘standard risk rate’ means a rate that--CommentsClose CommentsPermalink





(A) is determined under the State high risk pool by considering the premium rates charged by other health insurance issuers offering health insurance coverage to individuals in the insurance market served;CommentsClose CommentsPermalink





(B) is established using reasonable actuarial techniques; andCommentsClose CommentsPermalink





(C) reflects anticipated claims experience and expenses for the coverage involved.CommentsClose CommentsPermalink





(5) STATE- The term ‘State’ means any of the 50 States or the District of Columbia.CommentsClose CommentsPermalink

SEC. 102. ELIMINATION OF CERTAIN REQUIREMENTS FOR GUARANTEED AVAILABILITY IN INDIVIDUAL MARKET.

(a) In General- Section 2741(b) of the Public Health Service Act (42 U.S.C. 300gg-41(b)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1)--CommentsClose CommentsPermalink





(A) by striking ‘(1)(A)’ and inserting ‘(1)’; andCommentsClose CommentsPermalink





(B) by striking ‘and (B)’ and all that follows up to the semicolon at the end;CommentsClose CommentsPermalink





(2) by adding ‘and’ at the end of paragraph (2);CommentsClose CommentsPermalink





(3) in paragraph (3)--CommentsClose CommentsPermalink





(A) by striking ‘(1)(A)’ and inserting ‘(1)’; andCommentsClose CommentsPermalink





(B) by striking the semicolon at the end and inserting a period; andCommentsClose CommentsPermalink





(4) by striking paragraphs (4) and (5).CommentsClose CommentsPermalink





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

SEC. 103. NO ANNUAL OR LIFETIME SPENDING CAPS.

Notwithstanding any other provision of law, a health insurance issuer (including an entity licensed to sell insurance with respect to a State or group health plan) may not apply an annual or lifetime aggregate spending cap on any health insurance coverage or plan offered by such issuer.CommentsClose CommentsPermalink

SEC. 104. PREVENTING UNJUST CANCELLATION OF 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--REDUCING HEALTH CARE PREMIUMS AND THE NUMBER OF UNINSURED AMERICANSCommentsClose CommentsPermalink

SEC. 111. STATE INNOVATION PROGRAMS.

(a) Programs That Reduce the Cost of Health Insurance Premiums-CommentsClose CommentsPermalink





(1) PAYMENTS TO STATES-CommentsClose CommentsPermalink





(A) FOR PREMIUM REDUCTIONS IN THE SMALL GROUP MARKET- If the Secretary determines that a State has reduced the average per capita premium for health insurance coverage in the small group market in year 3, in year 6, or year 9 (as defined in subsection (c)) below the premium baseline for such year (as defined paragraph (2)), the Secretary shall pay the State an amount equal to the product of--CommentsClose CommentsPermalink





(i) bonus premium percentage (as defined in paragraph (3)) for the State, market, and year; andCommentsClose CommentsPermalink





(ii) the maximum State premium payment amount (as defined in paragraph (4)) for the State, market, and yearCommentsClose CommentsPermalink





(B) FOR PREMIUM REDUCTIONS IN THE INDIVIDUAL MARKET- If the Secretary determines that a State has reduced the average per capita premium for health insurance coverage in the individual market in year 3, in year 6, or in year 9 below the premium baseline for such year, the Secretary shall pay the State an amount equal to the product of--CommentsClose CommentsPermalink





(i) bonus premium percentage for the State, market, and year; andCommentsClose CommentsPermalink





(ii) the maximum State premium payment amount for the State, market, and year.CommentsClose CommentsPermalink





(2) PREMIUM BASELINE- For purposes of this subsection, the term ‘premium baseline’ means, for a market in a State--CommentsClose CommentsPermalink





(A) for year 1, the average per capita premiums for health insurance coverage in such market in the State in such year; orCommentsClose CommentsPermalink





(B) for a subsequent year, the baseline for the market in the State for the previous year under this paragraph increased by a percentage specified in accordance with a formula established by the Secretary, in consultation with the Congressional Budget Office and the Bureau of the Census, that takes into account at least the following:CommentsClose CommentsPermalink





(i) GROWTH FACTOR- The inflation in the costs of inputs to health care services in the year.CommentsClose CommentsPermalink





(ii) HISTORIC PREMIUM GROWTH RATES- Historic growth rates, during the 10 years before year 1, of per capita premiums for health insurance coverage.CommentsClose CommentsPermalink





(iii) DEMOGRAPHIC CONSIDERATIONS- Historic average changes in the demographics of the population covered that impact on the rate of growth of per capita health care costs.CommentsClose CommentsPermalink





(3) BONUS PREMIUM PERCENTAGE DEFINED-CommentsClose CommentsPermalink





(A) IN GENERAL- For purposes of this subsection, the term ‘bonus premium percentage’ means, for the small group market or individual market in a State for a year, such percentage as determined in accordance with the following table based on the State’s premium performance level (as defined in subparagraph (B)) for such market and year:CommentsClose CommentsPermalink

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The bonus premium percentage for a State is-- For year 3 if the premium performance level of the State is-- For year 6 if the premium performance level of the State is-- For year 9 if the premium performance level of the State is-- CommentsClose CommentsPermalink

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                                  100 percent                                                 at least 8.5%                                                  at least 11%                                                at least 13.5% CommentsClose CommentsPermalink

                                   50 percent                            at least 6.38%, but less than 8.5%                            at least 10.38%, but less than 11%                          at least 12.88%, but less than 13.5% CommentsClose CommentsPermalink

                                   25 percent                           at least 4.25%, but less than 6.38%                          at least 9.75%, but less than 10.38%                         at least 12.25%, but less than 12.88% CommentsClose CommentsPermalink

                                    0 percent                                               less than 4.25%                                               less than 9.75%                                             less than 12.25%. CommentsClose CommentsPermalink

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(B) PREMIUM PERFORMANCE LEVEL- For purposes of this subsection, the term ‘premium performance level’ means, for a State, market, and year, the percentage reduction in the average per capita premiums for health insurance coverage for the State, market, and year, as compared to the premium baseline for such State, market, and year.CommentsClose CommentsPermalink





(4) MAXIMUM STATE PREMIUM PAYMENT AMOUNT DEFINED- For purposes of this subsection, the term ‘maximum State premium payment amount’ means, for a State for the small group market or the individual market for a year, the product of--CommentsClose CommentsPermalink





(A) the proportion (as determined by the Secretary), of the number of nonelderly individuals lawfully residing in all the States who are enrolled in health insurance coverage in the respective market in the year, who are residents of the State; andCommentsClose CommentsPermalink





(B) the amount available for obligation from amounts appropriated under subsection (d) for such market with respect to performance in such year.CommentsClose CommentsPermalink





(5) METHODOLOGY FOR CALCULATING AVERAGE PER CAPITA PREMIUMS-CommentsClose CommentsPermalink





(A) ESTABLISHMENT- The Secretary shall establish, by rule and consistent with this subsection, a methodology for computing the average per capita premiums for health insurance coverage for the small group market and for the individual market in each State for each year beginning with year 1.CommentsClose CommentsPermalink





(B) ADJUSTMENTS- Under such methodology, the Secretary shall provide for the following adjustments (in a manner determined appropriate by the Secretary):CommentsClose CommentsPermalink





(i) EXCLUSION OF ILLEGAL ALIENS- An adjustment so as not to take into account enrollees who are not lawfully present in the United States and their premium costs.CommentsClose CommentsPermalink





(ii) TREATING STATE PREMIUM SUBSIDIES AS PREMIUM COSTS- An adjustment so as to increase per capita premiums to remove the impact of premium subsidies made directly by a State to reduce health insurance premiums.CommentsClose CommentsPermalink





(6) CONDITIONS OF PAYMENT- As a condition of receiving a payment under paragraph (1), a State must agree to submit aggregate, non-individually identifiable data to the Secretary, in a form and manner specified by the Secretary, for use by the Secretary to determine the State’s premium baseline and premium performance level for purposes of this subsection.CommentsClose CommentsPermalink





(b) Programs That Reduce the Number of Uninsured-CommentsClose CommentsPermalink





(1) IN GENERAL- If the Secretary determines that a State has reduced the percentage of uninsured nonelderly residents in year 5, year 7, or year 9, below the uninsured baseline (as defined in paragraph (2)) for the State for the year, the Secretary shall pay the State an amount equal to the product of--CommentsClose CommentsPermalink





(A) bonus uninsured percentage (as defined in paragraph (3)) for the State and year; andCommentsClose CommentsPermalink





(B) the maximum uninsured payment amount (as defined in paragraph (4)) for the State and year.CommentsClose CommentsPermalink





(2) UNINSURED BASELINE-CommentsClose CommentsPermalink





(A) IN GENERAL- For purposes of this subsection, and subject to subparagraph (B), the term ‘uninsured baseline’ means, for a State, the percentage of nonelderly residents in the State who are uninsured in year 1.CommentsClose CommentsPermalink





(B) ADJUSTMENT- The Secretary may, at the written request of a State, adjust the uninsured baseline for States for a year to take into account unanticipated and exceptional changes, such as an unanticipated migration, of nonelderly individuals into, or out of, States in a manner that does not reflect substantially the proportion of uninsured nonelderly residents in the States involved in year 1. Any such adjustment shall only be done in a manner that does not result in the average of the uninsured baselines for nonelderly residents for all States being changed.CommentsClose CommentsPermalink





(3) BONUS UNINSURED PERCENTAGE-CommentsClose CommentsPermalink





(A) BONUS UNINSURED PERCENTAGE- For purposes of this subsection, the term ‘bonus uninsured percentage’ means, for a State for a year, such percentage as determined in accordance with the following table, based on the uninsured performance level (as defined in subparagraph (B)) for such State and year:CommentsClose CommentsPermalink

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The bonus uninsured percentage for a State is-- For year 5 if the uninsured performance level of the State is-- For year 7 if the uninsured performance level of the State is-- For year 9 if the uninsured performance level of the State is-- CommentsClose CommentsPermalink

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                                    100 percent                                                    at least 10%                                                    at least 15%                                                    at least 20% CommentsClose CommentsPermalink

                                     50 percent                                 at least 7.5% but less than 10%                               at least 13.75% but less than 15%                               at least 18.75% but less than 20% CommentsClose CommentsPermalink

                                     25 percent                                  at least 5% but less than 7.5%                             at least 12.5% but less than 13.75%                             at least 17.5% but less than 18.75% CommentsClose CommentsPermalink

                                      0 percent                                                    less than 5%                                                 less than 12.5%                                                less than 17.5%. CommentsClose CommentsPermalink

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(B) UNINSURED PERFORMANCE LEVEL- For purposes of this subsection, the term ‘uninsured performance level’ means, for a State for a year, the reduction (expressed as a percentage) in the percentage of uninsured nonelderly residents in such State in the year as compared to the uninsured baseline for such State for such year.CommentsClose CommentsPermalink





(4) MAXIMUM STATE UNINSURED PAYMENT AMOUNT DEFINED- For purposes of this subsection, the term ‘maximum State uninsured payment amount’ means, for a State for a year, the product of--CommentsClose CommentsPermalink





(A) the proportion (as determined by the Secretary), of the number of uninsured nonelderly individuals lawfully residing in all the States in the year, who are residents of the State; andCommentsClose CommentsPermalink





(B) the amount available for obligation under this subsection from amounts appropriated under subsection (d) with respect to performance in such year.CommentsClose CommentsPermalink





(5) METHODOLOGY FOR COMPUTING THE PERCENTAGE OF UNINSURED NONELDERLY RESIDENTS IN A STATE-CommentsClose CommentsPermalink





(A) ESTABLISHMENT- The Secretary shall establish, by rule and consistent with this subsection, a methodology for computing the percentage of nonelderly residents in a State who are uninsured in each year beginning with year 1.CommentsClose CommentsPermalink





(B) RULES-CommentsClose CommentsPermalink





(i) TREATMENT OF UNINSURED- Such methodology shall treat as uninsured those residents who do not have health insurance coverage or other creditable coverage (as defined in section 9801(c)(1) of the Internal Revenue Code of 1986), except that such methodology shall rely upon data on the nonelderly and uninsured populations within each State in such year provided through population surveys conducted by federal agencies.CommentsClose CommentsPermalink





(ii) LIMITATION TO NONELDERLY- Such methodology shall exclude individuals who are 65 years of age or older.CommentsClose CommentsPermalink





(iii) EXCLUSION OF ILLEGAL ALIENS- Such methodology shall exclude individuals not lawfully present in the United States.CommentsClose CommentsPermalink





(6) CONDITIONS OF PAYMENT- As a condition of receiving a payment under paragraph (1), a State must agree to submit aggregate, non-individually identifiable data to the Secretary, in a form and manner specified by the Secretary, for use by the Secretary in determining the State’s uninsured baseline and uninsured performance level for purposes of this subsection.CommentsClose CommentsPermalink





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





(1) GROUP HEALTH PLAN- The term ‘group health plan’ has the meaning given such term in section 9832(a) of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(2) HEALTH INSURANCE COVERAGE- The term ‘health insurance coverage’ has the meaning given such term in section 9832(b)(1) of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(3) INDIVIDUAL MARKET- Except as the Secretary may otherwise provide in the case of group health plans that have fewer than 2 participants as current employees on the first day of a plan year, the term ‘individual market’ means the market for health insurance coverage offered to individuals other than in connection with a group health plan.CommentsClose CommentsPermalink





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





(5) SMALL GROUP MARKET- The term ‘small group market’ means the market for health insurance coverage under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by an employer who employed on average at least 2 but not more than 50 employees on business days during a calendar year.CommentsClose CommentsPermalink





(6) STATE- The term ‘State’ means any of the 50 States and the District of Columbia.CommentsClose CommentsPermalink





(7) YEARS- The terms ‘year 1’, ‘year 2’, ‘year 3’, and similar subsequently numbered years mean 2010, 2011, 2012, and subsequent sequentially numbered years.CommentsClose CommentsPermalink





(d) Appropriations; Payments-CommentsClose CommentsPermalink





(1) PAYMENTS FOR REDUCTIONS IN COST OF HEALTH INSURANCE COVERAGE-CommentsClose CommentsPermalink





(A) SMALL GROUP MARKET-CommentsClose CommentsPermalink





(i) IN GENERAL- From any funds in the Treasury not otherwise appropriated, there is appropriated for payments under subsection (a)(1)(A)--CommentsClose CommentsPermalink





(I) $18,000,000,000 with respect to performance in year 3;CommentsClose CommentsPermalink





(II) $5,000,000,000 with respect to performance in year 6; andCommentsClose CommentsPermalink





(III) $2,000,000,000 with respect to performance in year 9.CommentsClose CommentsPermalink





(ii) AVAILABILITY OF APPROPRIATED FUNDS- Funds appropriated under clause (i) shall remain available until expended.CommentsClose CommentsPermalink





(B) INDIVIDUAL MARKET-CommentsClose CommentsPermalink





(i) IN GENERAL- Subject to clause (ii), from any funds in the Treasury not otherwise appropriated, there is appropriated for payments under subsection (a)(1)(B)--CommentsClose CommentsPermalink





(I) $7,000,000,000 with respect to performance in year 3;CommentsClose CommentsPermalink





(II) $2,000,000,000 with respect to performance in year 6; andCommentsClose CommentsPermalink





(III) $1,000,000,000 with respect to performance in year 9.CommentsClose CommentsPermalink





(ii) AVAILABILITY OF APPROPRIATED FUNDS- Of the funds appropriated under clause (i) that are not expended or obligated by the end of the year following the year for which the funds are appropriated--CommentsClose CommentsPermalink





(I) 75 percent shall remain available until expended for payments under subsection (a)(1)(B); andCommentsClose CommentsPermalink





(II) 25 percent shall remain available until expended for payments under subsection (a)(1)(A).CommentsClose CommentsPermalink





(2) PAYMENTS FOR REDUCTIONS IN THE PERCENTAGE OF UNINSURED-CommentsClose CommentsPermalink





(A) IN GENERAL- From any funds in the Treasury not otherwise appropriated, there is appropriated for payments under subsection (b)(1)--CommentsClose CommentsPermalink





(i) $10,000,000,000 with respect to performance in year 5;CommentsClose CommentsPermalink





(ii) $3,000,000,000 with respect to performance in year 7; andCommentsClose CommentsPermalink





(iii) $2,000,000,000 with respect to performance in year 9CommentsClose CommentsPermalink





(B) AVAILABILITY OF APPROPRIATED FUNDS- Funds appropriated under subparagraph (A) shall remain available until expended.CommentsClose CommentsPermalink





(3) PAYMENT TIMING- Payments under this section shall be made in a form and manner specified by the Secretary in the year after the performance year involved.CommentsClose CommentsPermalink

SEC. 112. HEALTH PLAN FINDERS.

(a) State Plan Finders- Not later than 12 months after the date of the enactment of this Act, each State may contract with a private entity to develop and operate a plan finder website (referred to in this section as a ‘State plan finder’) which shall provide information to individuals in such State on plans of health insurance coverage that are available to individuals in such State (in this section referred to as a ‘health insurance plan’) . Such State may not operate a plan finder itself.CommentsClose CommentsPermalink





(b) Multi-State Plan Finders-CommentsClose CommentsPermalink





(1) IN GENERAL- A private entity may operate a multi-State finder that operates under this section in the States involved in the same manner as a State plan finder would operate in a single State.CommentsClose CommentsPermalink





(2) SHARING OF INFORMATION- States shall regulate the manner in which data is shared between plan finders to ensure consistency and accuracy in the information about health insurance plans contained in such finders.CommentsClose CommentsPermalink





(c) Requirements for Plan Finders- Each plan finder shall meet the following requirements:CommentsClose CommentsPermalink





(1) The plan finder shall ensure that each health insurance plan in the plan finder meets the requirements for such plans under subsection (d).CommentsClose CommentsPermalink





(2) The plan finder shall present complete information on the costs and benefits of health insurance plans (including information on monthly premium, copayments, and deductibles) in a uniform manner that--CommentsClose CommentsPermalink





(A) uses the standard definitions developed under paragraph (3); andCommentsClose CommentsPermalink





(B) is designed to allow consumers to easily compare such plans.CommentsClose CommentsPermalink





(3) The plan finder shall be available on the Internet and accessible to all individuals in the State or, in the case of a multi-State plan finder, in all States covered by the multi-State plan finder.CommentsClose CommentsPermalink





(4) The plan finder shall allow consumers to search and sort data on the health insurance plans in the plan finder on criteria such as coverage of specific benefits (such as coverage of disease management services or pediatric care services), as well as data available on quality.CommentsClose CommentsPermalink





(5) The plan finder shall meet all relevant State laws and regulations, including laws and regulations related to the marketing of insurance products. In the case of a multi-State plan finder, the finder shall meet such laws and regulations for all of the States involved.CommentsClose CommentsPermalink





(6) The plan finder shall meet solvency, financial, and privacy requirements established by the State or States in which the plan finder operates or the Secretary for multi-State finders.CommentsClose CommentsPermalink





(7) The plan finder and the employees of the plan finder shall be appropriately licensed in the State or States in which the plan finder operates, if such licensure is required by such State or States.CommentsClose CommentsPermalink





(8) Notwithstanding subsection (f)(1), the plan finder shall assist individuals who are eligible for the Medicaid program under title XIX of the Social Security Act or State Children’s Health Insurance Program under title XXI of such Act by including information on Medicaid options, eligibility, and how to enroll.CommentsClose CommentsPermalink





(d) Requirements for Plans Participating in a Plan Finder-CommentsClose CommentsPermalink





(1) IN GENERAL- Each State shall ensure that health insurance plans participating in the State plan finder or in a multi-State plan finder meet the requirements of paragraph (2) (relating to adequacy of insurance coverage, consumer protection, and financial strength).CommentsClose CommentsPermalink





(2) SPECIFIC REQUIREMENTS- In order to participate in a plan finder, a health insurance plan must meet all of the following requirements, as determined by each State in which such plan operates:CommentsClose CommentsPermalink





(A) The health insurance plan shall be actuarially sound.CommentsClose CommentsPermalink





(B) The health insurance plan may not have a history of abusive policy rescissions.CommentsClose CommentsPermalink





(C) The health insurance plan shall meet financial and solvency requirements.CommentsClose CommentsPermalink





(D) The health insurance plan shall disclose--CommentsClose CommentsPermalink





(i) all financial arrangements involving the sale and purchase of health insurance, such as the payment of fees and commissions; andCommentsClose CommentsPermalink





(ii) such arrangements may not be abusive.CommentsClose CommentsPermalink





(E) The health insurance plan shall maintain electronic health records that comply with the requirements of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) related to electronic health records.CommentsClose CommentsPermalink





(F) The health insurance plan shall make available to plan enrollees via the finder, whether by information provided to the finder or by a website link directing the enrollee from the finder to the health insurance plan website, data that includes the price and cost to the individual of services offered by a provider according to the terms and conditions of the health plan. Data described in this paragraph is not made public by the finder, only made available to the individual once enrolled in the health plan.CommentsClose CommentsPermalink





(e) Prohibitions-CommentsClose CommentsPermalink





(1) DIRECT ENROLLMENT- The State plan finder may not directly enroll individuals in health insurance plans.CommentsClose CommentsPermalink





(2) CONFLICTS OF INTEREST-CommentsClose CommentsPermalink





(A) COMPANIES- A health insurance issuer offering a health insurance plan through a plan finder may not--CommentsClose CommentsPermalink





(i) be the private entity developing and maintaining a plan finder under subsections (a) and (b); orCommentsClose CommentsPermalink





(ii) have an ownership interest in such private entity or in the plan finder.CommentsClose CommentsPermalink





(B) INDIVIDUALS- An individual employed by a health insurance issuer offering a health insurance plan through a plan finder may not serve as a director or officer for--CommentsClose CommentsPermalink





(i) the private entity developing and maintaining a plan finder under subsections (a) and (b); orCommentsClose CommentsPermalink





(ii) the plan finder.CommentsClose CommentsPermalink





(f) Construction- Nothing in this section shall be construed to allow the Secretary authority to regulate benefit packages or to prohibit health insurance brokers and agents from--CommentsClose CommentsPermalink





(1) utilizing the plan finder for any purpose; orCommentsClose CommentsPermalink





(2) marketing or offering health insurance products.CommentsClose CommentsPermalink





(g) Plan Finder Defined- For purposes of this section, the term ‘plan finder’ means a State plan finder under subsection (a) or a multi-State plan finder under subsection (b).CommentsClose CommentsPermalink





(h) 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. 113. ADMINISTRATIVE SIMPLIFICATION.

(a) Operating Rules for Health Information Transactions-CommentsClose CommentsPermalink





(1) DEFINITION OF OPERATING RULES- Section 1171 of the Social Security Act (42 U.S.C. 1320d) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(9) OPERATING RULES- The term ‘operating rules’ means the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications as adopted for purposes of this part.’.CommentsClose CommentsPermalink





(2) OPERATING RULES AND COMPLIANCE- Section 1173 of the Social Security Act (42 U.S.C. 1320d-2) is amended--CommentsClose CommentsPermalink





(A) in subsection (a)(2), by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(J) Electronic funds transfers.’; andCommentsClose CommentsPermalink





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





‘(g) Operating Rules-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary shall adopt a single set of operating rules for each transaction described in subsection (a)(2) with the goal of creating as much uniformity in the implementation of the electronic standards as possible. Such operating rules shall be consensus-based and reflect the necessary business rules affecting health plans and health care providers and the manner in which they operate pursuant to standards issued under Health Insurance Portability and Accountability Act of 1996.CommentsClose CommentsPermalink





‘(2) OPERATING RULES DEVELOPMENT- In adopting operating rules under this subsection, the Secretary shall rely on recommendations for operating rules developed by a qualified nonprofit entity, as selected by the Secretary, that meets the following requirements:CommentsClose CommentsPermalink





‘(A) The entity focuses its mission on administrative simplification.CommentsClose CommentsPermalink





‘(B) The entity demonstrates an established multi-stakeholder and consensus-based process for development of operating rules, including representation by or participation from health plans, health care providers, vendors, relevant Federal agencies, and other standard development organizations.CommentsClose CommentsPermalink





‘(C) The entity has established a public set of guiding principles that ensure the operating rules and process are open and transparent.CommentsClose CommentsPermalink





‘(D) The entity coordinates its activities with the HIT Policy Committee and the HIT Standards Committee (as established under title XXX of the Public Health Service Act) and complements the efforts of the Office of the National Healthcare Coordinator and its related health information exchange goals.CommentsClose CommentsPermalink





‘(E) The entity incorporates national standards, including the transaction standards issued under Health Insurance Portability and Accountability Act of 1996.CommentsClose CommentsPermalink





‘(F) The entity supports nondiscrimination and conflict of interest policies that demonstrate a commitment to open, fair, and nondiscriminatory practices.CommentsClose CommentsPermalink





‘(G) The entity allows for public review and updates of the operating rules.CommentsClose CommentsPermalink





‘(3) REVIEW AND RECOMMENDATIONS- The National Committee on Vital and Health Statistics shall--CommentsClose CommentsPermalink





‘(A) review the operating rules developed by a nonprofit entity described under paragraph (2);CommentsClose CommentsPermalink





‘(B) determine whether such rules represent a consensus view of the health care industry and are consistent with and do not alter current standards;CommentsClose CommentsPermalink





‘(C) evaluate whether such rules are consistent with electronic standards adopted for health information technology; andCommentsClose CommentsPermalink





‘(D) submit to the Secretary a recommendation as to whether the Secretary should adopt such rules.CommentsClose CommentsPermalink





‘(4) IMPLEMENTATION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Secretary shall adopt operating rules under this subsection, by regulation in accordance with subparagraph (C), following consideration of the rules developed by the non-profit entity described in paragraph (2) and the recommendation submitted by the National Committee on Vital and Health Statistics under paragraph (3)(D) and having ensured consultation with providers.CommentsClose CommentsPermalink





‘(B) ADOPTION REQUIREMENTS; EFFECTIVE DATES-CommentsClose CommentsPermalink





‘(i) ELIGIBILITY FOR A HEALTH PLAN AND HEALTH CLAIM STATUS- The set of operating rules for transactions for eligibility for a health plan and health claim status shall be adopted not later than July 1, 2011, in a manner ensuring that such rules are effective not later than January 1, 2013, and may allow for the use of a machine readable identification card.CommentsClose CommentsPermalink





‘(ii) ELECTRONIC FUNDS TRANSFERS AND HEALTH CARE PAYMENT AND REMITTANCE ADVICE- The set of operating rules for electronic funds transfers and health care payment and remittance advice shall be adopted not later than July 1, 2012, in a manner ensuring that such rules are effective not later than January 1, 2014.CommentsClose CommentsPermalink





‘(iii) OTHER COMPLETED TRANSACTIONS- The set of operating rules for the remainder of the completed transactions described in subsection (a)(2), including health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization, shall be adopted not later than July 1, 2014, in a manner ensuring that such rules are effective not later than January 1, 2016.CommentsClose CommentsPermalink





‘(C) EXPEDITED RULEMAKING- The Secretary shall promulgate an interim final rule applying any standard or operating rule recommended by the National Committee on Vital and Health Statistics pursuant to paragraph (3). The Secretary shall accept public comments on any interim final rule published under this subparagraph for 60 days after the date of such publication.CommentsClose CommentsPermalink





‘(h) Compliance-CommentsClose CommentsPermalink





‘(1) HEALTH PLAN CERTIFICATION-CommentsClose CommentsPermalink





‘(A) ELIGIBILITY FOR A HEALTH PLAN, HEALTH CLAIM STATUS, ELECTRONIC FUNDS TRANSFERS, HEALTH CARE PAYMENT AND REMITTANCE ADVICE- Not later than December 31, 2013, a health plan shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable standards (as described under paragraph (7) of section 1171) and operating rules (as described under paragraph (9) of such section) for electronic funds transfers, eligibility for a health plan, health claim status, and health care payment and remittance advice, respectively.CommentsClose CommentsPermalink





‘(B) OTHER COMPLETED TRANSACTIONS- Not later than December 31, 2015, a health plan shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable standards and operating rules for the remainder of the completed transactions described in subsection (a)(2), including health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization, respectively. A health plan shall provide the same level of documentation to certify compliance with such transactions as is required to certify compliance with the transactions specified in subparagraph (A).CommentsClose CommentsPermalink





‘(2) DOCUMENTATION OF COMPLIANCE- A health plan shall provide the Secretary, in such form as the Secretary may require, with adequate documentation of compliance with the standards and operating rules described under paragraph (1). A health plan shall not be considered to have provided adequate documentation and shall not be certified as being in compliance with such standards, unless the health plan--CommentsClose CommentsPermalink





‘(A) demonstrates to the Secretary that the plan conducts the electronic transactions specified in paragraph (1) in a manner that fully complies with the regulations of the Secretary; andCommentsClose CommentsPermalink





‘(B) provides documentation showing that the plan has completed end-to-end testing for such transactions with their partners, such as hospitals and physicians.CommentsClose CommentsPermalink





‘(3) SERVICE CONTRACTS- A health plan shall be required to comply with any applicable certification and compliance requirements (and provide the Secretary with adequate documentation of such compliance) under this subsection for any entities that provide services pursuant to a contract with such health plan.CommentsClose CommentsPermalink





‘(4) CERTIFICATION BY OUTSIDE ENTITY- The Secretary may contract with an independent, outside entity to certify that a health plan has complied with the requirements under this subsection, provided that the certification standards employed by such entities are in accordance with any standards or rules issued by the Secretary.CommentsClose CommentsPermalink





‘(5) COMPLIANCE WITH REVISED STANDARDS AND RULES- A health plan (including entities described under paragraph (3)) shall comply with the certification and documentation requirements under this subsection for any interim final rule promulgated by the Secretary under subsection (i) that amends any standard or operating rule described under paragraph (1) of this subsection. A health plan shall comply with such requirements not later than the effective date of the applicable interim final rule.CommentsClose CommentsPermalink





‘(6) AUDITS OF HEALTH PLANS- The Secretary shall conduct periodic audits to ensure that health plans (including entities described under paragraph (3)) are in compliance with any standards and operating rules that are described under paragraph (1).CommentsClose CommentsPermalink





‘(i) Review and Amendment of Standards and Rules-CommentsClose CommentsPermalink





‘(1) ESTABLISHMENT- Not later than January 1, 2014, the Secretary shall establish a review committee (as described under paragraph (4)).CommentsClose CommentsPermalink





‘(2) EVALUATIONS AND REPORTS-CommentsClose CommentsPermalink





‘(A) HEARINGS- Not later than April 1, 2014, and not less than biennially thereafter, the Secretary, acting through the review committee, shall conduct hearings to evaluate and review the existing standards and operating rules established under this section.CommentsClose CommentsPermalink





‘(B) REPORT- Not later than July 1, 2014, and not less than biennially thereafter, the review committee shall provide recommendations for updating and improving such standards and rules. The review committee shall recommend a single set of operating rules per transaction standard and maintain the goal of creating as much uniformity as possible in the implementation of the electronic standards.CommentsClose CommentsPermalink





‘(3) INTERIM FINAL RULEMAKING-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Any recommendations to amend existing standards and operating rules that have been approved by the review committee and reported to the Secretary under paragraph (2)(B) shall be adopted by the Secretary through promulgation of an interim final rule not later than 90 days after receipt of the committee’s report.CommentsClose CommentsPermalink





‘(B) PUBLIC COMMENT-CommentsClose CommentsPermalink





‘(i) PUBLIC COMMENT PERIOD- The Secretary shall accept public comments on any interim final rule published under this paragraph for 60 days after the date of such publication.CommentsClose CommentsPermalink





‘(ii) EFFECTIVE DATE- The effective date of any amendment to existing standards or operating rules that is adopted through an interim final rule published under this paragraph shall be 25 months following the close of such public comment period.CommentsClose CommentsPermalink





‘(4) REVIEW COMMITTEE-CommentsClose CommentsPermalink





‘(A) DEFINITION- For the purposes of this subsection, the term ‘review committee’ means a committee within the Department of Health and Human services that has been designated by the Secretary to carry out this subsection, including--CommentsClose CommentsPermalink





‘(i) the National Committee on Vital and Health Statistics; orCommentsClose CommentsPermalink





‘(ii) any appropriate committee as determined by the Secretary.CommentsClose CommentsPermalink





‘(B) COORDINATION OF HIT STANDARDS- In developing recommendations under this subsection, the review committee shall consider the standards approved by the Office of the National Coordinator for Health Information Technology.CommentsClose CommentsPermalink





‘(j) Penalties-CommentsClose CommentsPermalink





‘(1) PENALTY FEE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Not later than April 1, 2014, and annually thereafter, the Secretary shall assess a penalty fee (as determined under subparagraph (B)) against a health plan that has failed to meet the requirements under subsection (h) with respect to certification and documentation of compliance with the standards (and their operating rules) as described under paragraph (1) of such subsection.CommentsClose CommentsPermalink





‘(B) FEE AMOUNT- Subject to subparagraphs (C), (D), and (E), the Secretary shall assess a penalty fee against a health plan in the amount of $1 per covered life until certification is complete. The penalty shall be assessed per person covered by the plan for which its data systems for major medical policies are not in compliance and shall be imposed against the health plan for each day that the plan is not in compliance with the requirements under subsection (h).CommentsClose CommentsPermalink





‘(C) ADDITIONAL PENALTY FOR MISREPRESENTATION- A health plan that knowingly provides inaccurate or incomplete information in a statement of certification or documentation of compliance under subsection (h) shall be subject to a penalty fee that is double the amount that would otherwise be imposed under this subsection.CommentsClose CommentsPermalink





‘(D) ANNUAL FEE INCREASE- The amount of the penalty fee imposed under this subsection shall be increased on an annual basis by the annual percentage increase in total national health care expenditures, as determined by the Secretary.CommentsClose CommentsPermalink





‘(E) PENALTY LIMIT- A penalty fee assessed against a health plan under this subsection shall not exceed, on an annual basis--CommentsClose CommentsPermalink





‘(i) an amount equal to $20 per covered life under such plan; orCommentsClose CommentsPermalink





‘(ii) an amount equal to $40 per covered life under the plan if such plan has knowingly provided inaccurate or incomplete information (as described under subparagraph (C)).CommentsClose CommentsPermalink





‘(F) DETERMINATION OF COVERED INDIVIDUALS- The Secretary shall determine the number of covered lives under a health plan based upon the most recent statements and filings that have been submitted by such plan to the Securities and Exchange Commission.CommentsClose CommentsPermalink





‘(2) NOTICE AND DISPUTE PROCEDURE- The Secretary shall establish a procedure for assessment of penalty fees under this subsection that provides a health plan with reasonable notice and a dispute resolution procedure prior to provision of a notice of assessment by the Secretary of the Treasury (as described under paragraph (4)(B)).CommentsClose CommentsPermalink





‘(3) PENALTY FEE REPORT- Not later than May 1, 2014, and annually thereafter, the Secretary shall provide the Secretary of the Treasury with a report identifying those health plans that have been assessed a penalty fee under this subsection.CommentsClose CommentsPermalink





‘(4) COLLECTION OF PENALTY FEE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Secretary of the Treasury, acting through the Financial Management Service, shall administer the collection of penalty fees from health plans that have been identified by the Secretary in the penalty fee report provided under paragraph (3).CommentsClose CommentsPermalink





‘(B) NOTICE- Not later than August 1, 2014, and annually thereafter, the Secretary of the Treasury shall provide notice to each health plan that has been assessed a penalty fee by the Secretary under this subsection. Such notice shall include the amount of the penalty fee assessed by the Secretary and the due date for payment of such fee to the Secretary of the Treasury (as described in subparagraph (C)).CommentsClose CommentsPermalink





‘(C) PAYMENT DUE DATE- Payment by a health plan for a penalty fee assessed under this subsection shall be made to the Secretary of the Treasury not later than November 1, 2014, and annually thereafter.CommentsClose CommentsPermalink





‘(D) UNPAID PENALTY FEES- Any amount of a penalty fee assessed against a health plan under this subsection for which payment has not been made by the due date provided under subparagraph (C) shall be--CommentsClose CommentsPermalink





‘(i) increased by the interest accrued on such amount, as determined pursuant to the underpayment rate established under section 6601 of the Internal Revenue Code of 1986; andCommentsClose CommentsPermalink





‘(ii) treated as a past-due, legally enforceable debt owed to a Federal agency for purposes of section 6402(d) of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





‘(E) ADMINISTRATIVE FEES- Any fee charged or allocated for collection activities conducted by the Financial Management Service will be passed on to a health plan on a pro-rata basis and added to any penalty fee collected from the plan.’.CommentsClose CommentsPermalink





(b) Promulgation of Rules-CommentsClose CommentsPermalink





(1) UNIQUE HEALTH PLAN IDENTIFIER- The Secretary shall promulgate a final rule to establish a unique health plan identifier (as described in section 1173(b) of the Social Security Act (42 U.S.C. 1320d-2(b))) based on the input of the National Committee of Vital and Health Statistics. The Secretary may do so on an interim final basis and such rule shall be effective not later than October 1, 2012.CommentsClose CommentsPermalink





(2) ELECTRONIC FUNDS TRANSFER- The Secretary shall promulgate a final rule to establish a standard for electronic funds transfers (as described in section 1173(a)(2)(J) of the Social Security Act, as added by subsection (a)(2)(A)). The Secretary may do so on an interim final basis and shall adopt such standard not later than January 1, 2012, in a manner ensuring that such standard is effective not later than January 1, 2014.CommentsClose CommentsPermalink





(c) Expansion of Electronic Transactions in Medicare- Section 1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (23), by striking the ‘or’ at the end;CommentsClose CommentsPermalink





(2) in paragraph (24), by striking the period and inserting ‘; or’; andCommentsClose CommentsPermalink





(3) by inserting after paragraph (24) the following new paragraph:CommentsClose CommentsPermalink





‘(25) not later than January 1, 2014, for which the payment is other than by electronic funds transfer (EFT) or an electronic remittance in a form as specified in ASC X12 835 Health Care Payment and Remittance Advice or subsequent standard.’.CommentsClose CommentsPermalink





(d) Medicare and Medicaid Compliance Reports- Not later than July 1, 2013, the Secretary of Health and Human Services shall submit a report to the chairs and ranking members of the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives and the chairs and ranking members of the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate on the extent to which the Medicare program and providers that serve beneficiaries under that program, and State Medicaid programs and providers that serve beneficiaries under those programs, transact electronically in accordance with transaction standards issued under the Health Insurance Portability and Accountability Act of 1996, part C of title XI of the Social Security Act, and regulations promulgated under such Acts.CommentsClose CommentsPermalink

DIVISION B--IMPROVING ACCESS TO HEALTH CARECommentsClose CommentsPermalink

TITLE I--EXPANDING ACCESS AND LOWERING COSTS FOR SMALL BUSINESSESCommentsClose CommentsPermalink

SEC. 201. RULES GOVERNING ASSOCIATION HEALTH PLANS.

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

‘PART 8--RULES GOVERNING ASSOCIATION HEALTH PLANS

‘SEC. 801. ASSOCIATION HEALTH PLANS.

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





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





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





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





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





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

‘SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

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





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





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





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





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





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





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





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





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

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

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





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





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





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





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





‘(A) BOARD MEMBERSHIP-CommentsClose CommentsPermalink





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





‘(ii) LIMITATION-CommentsClose CommentsPermalink





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





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





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





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





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





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





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





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





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

‘SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

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





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





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





‘(B) the sponsor, orCommentsClose CommentsPermalink





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





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





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





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





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





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





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





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





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





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





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





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





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

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

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





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





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





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





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





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





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





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





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





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





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





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





‘(4) MARKETING REQUIREMENTS-CommentsClose CommentsPermalink





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





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





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





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

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

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





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





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





‘(A) establishes and maintains reserves with respect to such additional benefit options, in amounts recommended by the qualified 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; andCommentsClose CommentsPermalink





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

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

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





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





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





‘(A) the sponsor; andCommentsClose CommentsPermalink





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





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





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





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





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





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





‘(A) RESERVES- A statement, certified by the board of trustees of the plan, and a statement of actuarial opinion, signed by a qualified 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) is regulated by such State.CommentsClose CommentsPermalink





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





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





‘(10) QUALIFIED 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 subsections (d) and (e) as subsections (e) and (f), respectively; 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. 202. 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. 203. 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. 204. 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