111TH CONGRESS 2D SESSION  H. R. ll 
To provide for reconciliation pursuant to section 202 of the concurrent
resolution on the budget for fiscal year 2010.
IN THE HOUSE OF REPRESENTATIVES
M ARCH --, 2010
Mr. SPRATT from the Committee on the Budget, reported the following bill;
 which was committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
A BILL
the concurrent resolution on the budget for fiscal year 2010.
 Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled,2
SECTION 1. SHORT TITLE.3
This Act may be cited as the ‘‘Reconciliation Act of 4
2010’’.5
The table of divisions is as follows:7
DIVISION I—HOUSE COMMITTEE ON WAYS AND MEANS: HEALTH
CARE REFORM
HEALTH CARE REFORM
INVESTING IN EDUCATION
 AND SUBTITLES.5
(a) SHORT TITLE.—This division may be cited as the6
‘‘America’s Affordable Health Choices Act of 2009’’.7
(b) T  ABLE OF SUBDIVISIONS, TITLES,  AND SUB-8
TITLES.—This division is divided into subdivisions, titles,9
and subtitles as follows:10
Title I—Protections and Standards for Qualified Health Benefits Plans
Subtitle A—General Standards
Subtitle D—Additional Consumer Protections
Subtitle E—Governance
Subtitle G—Early Investments
Subtitle A—Health Insurance Exchange
Subtitle B—Public health insurance option
Subtitle C—Individual Affordability Credits
Title III—Shared responsibility 
Subtitle A—Individual responsibility 
Subtitle B—Employer Responsibility 
Subtitle A—Shared responsibility 
Subtitle B—Credit for small business employee health coverage expenses
Subtitle C—Disclosures to carry out health insurance exchange subsidies
Subtitle D—Other revenue provisions
SUBDIVISION B—MEDICARE AND MEDICAID IMPROVEMENTS 
Title I—Improving Health Care Value
Subtitle A—Provisions related to Medicare part A 
Subtitle B—Provisions Related to Part B
Subtitle C—Provisions Related to Medicare Parts A and B
Subtitle D—Medicare Advantage Reforms
Subtitle E—Improvements to Medicare Part D
 
Title II—Medicare Beneficiary Improvements
Subtitle A—Improving and Simplifying Financial Assistance for Low Income
Medicare Beneficiaries
Subtitle C—Miscellaneous Improvements
Title III—Promoting Primary Care, Mental Health Services, and Coordinated
Care
Subtitle C—Quality Measurements
Subtitle E—Public Reporting on Health Care-Associated Infections
Title V—Medicare Graduate Medical Education
Title VI—Program Integrity 
Subtitle A—Increased funding to fight waste, fraud, and abuse
Subtitle B—Enhanced penalties for fraud and abuse
Subtitle C—Enhanced Program and Provider Protections
Subtitle D—Access to Information Needed to Prevent Fraud, Waste, and Abuse
Title VII—Medicaid and CHIP
Subtitle A—Medicaid and Health Reform
Subtitle B—Prevention
Subtitle C—Access
Subtitle D—Coverage
Subtitle E—Financing
Subtitle G—Puerto Rico and the Territories
Subtitle H—Miscellaneous
Title I—Community Health Centers
Title II—Workforce
Subtitle B—Nursing workforce
Subtitle D—Adapting workforce to evolving health system needs
Title III—Prevention and Wellness
Title IV—Quality and Surveillance
Title V—Other provisions
Subtitle B—School-Based health clinics
Subtitle C—National medical device registry 
Subtitle D—Grants for comprehensive programs To provide education to nurses
and create a pipeline to nursing
 
GENERAL DEFINITIONS.4
sion is to provide affordable, quality health care for7
all Americans and reduce the growth in health care8
spending.9
subdivision achieves this purpose by building on11
  what works in today’s health care system, while re-12
pairing the aspects that are broken.13
(3) INSURANCE REFORMS.—This subdivision—14
(A) enacts strong insurance market re-15
forms;16
alongside private plans;19
credits; and21
so that all Americans have coverage of essential24
health benefits.25
sion institutes health delivery system reforms both to2
increase quality and to reduce growth in health3
spending so that health care becomes more afford-4
able for businesses, families, and government.5
(b) T  ABLE OF CONTENTS OF SUBDIVISION.—The6
table of contents of this subdivision is as follows:7
Sec. 100. Purpose; table of contents of subdivision; general definitions.
TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED
HEALTH BENEFITS PLANS
Sec. 102. Protecting the choice to keep current coverage.
Subtitle B—Standards Guaranteeing Access to Affordable Coverage
Sec. 111. Prohibiting pre-existing condition exclusions.
Sec. 112. Guaranteed issue and renewal for insured plans.
Sec. 113. Insurance rating rules.
Sec. 114. Nondiscrimination in benefits; parity in mental health and substance
abuse disorder benefits.
Subtitle C—Standards Guaranteeing Access to Essential Benefits
Sec. 121. Coverage of essential benefits package.
Sec. 122. Essential benefits package defined.
Sec. 123. Health Benefits Advisory Committee.
Sec. 124. Process for adoption of recommendations; adoption of benefit stand-
ards.
Sec. 131. Requiring fair marketing practices by health insurers.
Sec. 132. Requiring fair grievance and appeals mechanisms.
Sec. 133. Requiring information transparency and plan disclosure.
Sec. 134. Application to qualified health benefits plans not offered through the
Health Insurance Exchange.
Sec. 136. Standardized rules for coordination and subrogation of benefits.
Sec. 137. Application of administrative simplification.
Subtitle E—Governance
 
Sec. 143. Consultation and coordination.
Sec. 144. Health Insurance Ombudsman.
Subtitle F—Relation to Other Requirements; Miscellaneous
Sec. 151. Relation to other requirements.
Sec. 152. Prohibiting discrimination in health care.
Sec. 153. Whistleblower protection.
Sec. 155. Severability.
Sec. 163. Administrative simplification.
TITLE II—HEALTH INSURANCE EXCHANGE AND RELATED
PROVISIONS
Subtitle A—Health Insurance Exchange
Sec. 201. Establishment of Health Insurance Exchange; outline of duties; defi-
nitions.
Sec. 203. Benefits package levels.
Sec. 204. Contracts for the offering of Exchange-participating health benefits
plans.
Sec. 205. Outreach and enrollment of Exchange-eligible individuals and employ-
ers in Exchange-participating health benefits plan.
Sec. 206. Other functions.
Sec. 208. Optional operation of State-based health insurance exchanges.
Subtitle B—Public Health Insurance Option
Sec. 221. Establishment and administration of a public health insurance option
as an Exchange-qualified health benefits plan.
Sec. 222. Premiums and financing.
Sec. 223. Payment rates for items and services.
Sec. 224. Modernized payment initiatives and delivery system reform.
Sec. 225. Provider participation.
Subtitle C—Individual Affordability Credits
Sec. 241. Availability through Health Insurance Exchange.
Sec. 242. Affordable credit eligible individual.
Sec. 243. Affordable premium credit.
Sec. 244. Affordability cost-sharing credit.
Sec. 245. Income determinations.
TITLE III—SHARED RESPONSIBILITY
Subtitle A—Individual Responsibility 
Sec. 311. Health coverage participation requirements.
Sec. 312. Employer responsibility to contribute towards employee and depend-
ent coverage.
Sec. 314. Authority related to improper steering.
P ART 2—S  ATISFACTION OF HEALTH COVERAGE P ARTICIPATION 
REQUIREMENTS 
Sec. 321. Satisfaction of health coverage participation requirements under the
Employee Retirement Income Security Act of 1974.
Sec. 322. Satisfaction of health coverage participation requirements under the
Internal Revenue Code of 1986.
Sec. 323. Satisfaction of health coverage participation requirements under the
Public Health Service Act.
Sec. 324. Additional rules relating to health coverage participation require-
ments.
Subtitle A—Shared Responsibility 
Sec. 401. Tax on individuals without acceptable health care coverage.
P ART 2—EMPLOYER RESPONSIBILITY 
Sec. 411. Election to satisfy health coverage participation requirements.
Sec. 412. Responsibilities of nonelecting employers.
Subtitle B—Credit for Small Business Employee Health Coverage Expenses
Sec. 421. Credit for small business employee health coverage expenses.
Subtitle C—Disclosures to Carry Out Health Insurance Exchange Subsidies
Sec. 431. Disclosures to carry out health insurance exchange subsidies.
Subtitle D—Other Revenue Provisions
P ART 1—GENERAL PROVISIONS 
Sec. 441. Surcharge on high income individuals.
Sec. 442. Distributions for medicine qualified only if for prescribed drug or in-
sulin.
Sec. 443. Delay in application of worldwide allocation of interest.
P ART 2—PREVENTION OF T AX  A  VOIDANCE 
Sec. 451. Limitation on treaty benefits for certain deductible payments.
Sec. 452. Codification of economic substance doctrine.
Sec. 453. Penalties for underpayments.
 
P ART 3—P  ARITY IN HEALTH BENEFITS 
Sec. 461. Certain health related benefits applicable to spouses and dependents
extended to eligible beneficiaries.
provided, in this subdivision:2
ceptable coverage’’ has the meaning given such term4
in section 202(d)(2).5
the meaning given such term in section 203(c).7
(3) COMMISSIONER.—The term ‘‘Commis-8
sioner’’ means the Health Choices Commissioner es-9
tablished under section 141.10
includes deductibles, coinsurance, copayments, and12
similar charges but does not include premiums or13
any network payment differential for covered serv-14
ices or spending for non-covered services.15
(5) DEPENDENT.—The term ‘‘dependent’’ has16
the meaning given such term by the Commissioner17
and includes a spouse.18
(A) means a group health plan (as defined21
in section 733(a)(1) of the Employee Retire-22
ment Income Security Act of 1974); and23
 
lowing:2
GOVERNMENTAL PLANS.—A governmental4
Employee Retirement Income Security Act6
of 1974), including a health benefits plan7
offered under chapter 89 of title 5, United8
States Code.9
(as defined in section 3(33) of the Em-11
ployee Retirement Income Security Act of 12
1974).13
plan’’ has the meaning given such term in section15
203(c).16
‘‘essential benefits package’’ is defined in section18
122(a).19
dividual and includes the individual’s dependents.21
(10) FEDERAL POVERTY LEVEL; FPL.—The22
terms ‘‘Federal poverty level’’ and ‘‘FPL’’ have the23
meaning given the term ‘‘poverty line’’ in section24
673(2) of the Community Services Block Grant Act25
 
 by such section.2
‘‘health benefits plan’’ means health insurance cov-4
erage and an employment-based health plan and in-5
cludes the public health insurance option.6
(12) HEALTH INSURANCE COVERAGE; HEALTH 7
INSURANCE ISSUER.—The terms ‘‘health insurance8
coverage’’ and ‘‘health insurance issuer’’ have the9
meanings given such terms in section 2791 of the10
Public Health Service Act.11
term ‘‘Health Insurance Exchange’’ means the13
Health Insurance Exchange established under sec-14
tion 201.15
(14) MEDICAID.—The term ‘‘Medicaid’’ means16
a State plan under title XIX of the Social Security 17
  Act (whether or not the plan is operating under a18
 waiver under section 1115 of such Act).19
(15) MEDICARE.—The term ‘‘Medicare’’ means20
the health insurance programs under title XVIII of 21
the Social Security Act.22
sor’’ has the meaning given such term in section24
 
rity Act of 1974.2
means—4
health plan, a plan year as specified under such6
plan; or7
other than an employment-based health plan, a9
12-month period as specified by the Commis-10
sioner.11
plan’’ have the meanings given such terms in section14
203(c).15
‘‘QHBP offering entity’’ means, with respect to a17
health benefits plan that is—18
(A) a group health plan (as defined, sub-19
  ject to subsection (d), in section 733(a)(1) of 20
the Employee Retirement Income Security Act21
of 1974), the plan sponsor in relation to such22
group health plan, except that, in the case of a23
plan maintained jointly by 1 or more employers24
and 1 or more employee organizations and with25
 
source of financing, such term means such em-2
ployer;3
insurance issuer offering the coverage;5
(C) the public health insurance option, the6
Secretary of Health and Human Services;7
(D) a non-Federal governmental plan (as8
defined in section 2791(d) of the Public Health9
Service Act), the State or political subdivision10
of a State (or agency or instrumentality of such11
State or subdivision) which establishes or main-12
tains such plan; or13
fined in section 2791(d) of the Public Health15
Service Act), the appropriate Federal official.16
(20) QUALIFIED HEALTH BENEFITS PLAN.—17
The term ‘‘qualified health benefits plan’’ means a18
health benefits plan that meets the requirements for19
such a plan under title I and includes the public20
health insurance option.21
The term ‘‘public health insurance option’’ means23
the public health insurance option as provided under24
subtitle B of title II.25
 
area’’ mean with respect to health insurance cov-3
erage—4
lished by the QHBP offering entity of such cov-7
erage in accordance with applicable State law;8
and9
Exchange, such an area as established by such11
entity in accordance with applicable State law12
and applicable rules of the Commissioner for13
Exchange-participating health benefits plans.14
States and the District of Columbia.16
(24) STATE MEDICAID AGENCY.—The term17
‘‘State Medicaid agency’’ means, with respect to a18
Medicaid plan, the single State agency responsible19
for administering such plan under title XIX of the20
Social Security Act.21
‘‘Y3’’, ‘‘Y4’’, ‘‘Y5’’, and similar subsequently num-23
  bered terms, mean 2013 and subsequent years, re-24
spectively.25
 ANCE MARKETPLACE.6
(a) PURPOSE.—The purpose of this title is to estab-7
lish standards to ensure that new health insurance cov-8
erage and employment-based health plans that are offered9
meet standards guaranteeing access to affordable cov-10
erage, essential benefits, and other consumer protections.11
(b) REQUIREMENTS FOR QUALIFIED HEALTH BENE-12
FITS PLANS.—On or after the first day of Y1, a health13
 benefits plan shall not be a qualified health benefits plan14
 under this subdivision unless the plan meets the applicable15
requirements of the following subtitles for the type of plan16
and plan year involved:17
tion).21
HEALTH PLANS.—An individual shall be treated as24
  being ‘‘enrolled’’ in an employment-based health25
 
plan if the individual is a participant or beneficiary 1
(as such terms are defined in section 3(7) and 3(8),2
respectively, of the Employee Retirement Income Se-3
curity Act of 1974) in such plan.4
(2) INDIVIDUAL AND GROUP HEALTH INSUR-5
  ANCE COVERAGE.—The terms ‘‘individual health in-6
surance coverage’’ and ‘‘group health insurance cov-7
erage’’ mean health insurance coverage offered in8
the individual market or large or small group mar-9
ket, respectively, as defined in section 2791 of the10
Public Health Service Act.11
COVERAGE.13
ERAGE DEFINED.—Subject to the succeeding provisions of 15
this section, for purposes of establishing acceptable cov-16
erage under this subdivision, the term ‘‘grandfathered17
health insurance coverage’’ means individual health insur-18
ance coverage that is offered and in force and effect before19
the first day of Y1 if the following conditions are met:20
(1) LIMITATION ON NEW ENROLLMENT.—21
(A) IN GENERAL.—Except as provided in22
this paragraph, the individual health insurance23
issuer offering such coverage does not enroll24
any individual in such coverage if the first ef-25
 
fective date of coverage is on or after the first1
day of Y1.2
the subsequent enrollment of a dependent of an5
individual who is covered as of such first day.6
(2) LIMITATION ON CHANGES IN TERMS OR 7
CONDITIONS.—Subject to paragraph (3) and except8
as required by law, the issuer does not change any 9
of its terms or conditions, including benefits and10
cost-sharing, from those in effect as of the day be-11
fore the first day of Y1.12
(3) RESTRICTIONS ON PREMIUM INCREASES.—13
The issuer cannot vary the percentage increase in14
the premium for a risk group of enrollees in specific15
grandfathered health insurance coverage without16
changing the premium for all enrollees in the same17
risk group at the same rate, as specified by the18
Commissioner.19
BASED HEALTH PLANS.—21
(1) GRACE PERIOD.—22
shall establish a grace period whereby, for plan24
  years beginning after the end of the 5-year pe-25
 
health plan in operation as of the day before2
the first day of Y1 must meet the same require-3
ments as apply to a qualified health benefits4
plan under section 101, including the essential5
 benefit package requirement under section 121.6
(B) E  XCEPTION FOR LIMITED BENEFITS 7
PLANS.—Subparagraph (A) shall not apply to8
an employment-based health plan in which the9
coverage consists only of one or more of the fol-10
lowing:11
  American Recovery and Reinvestment Act14
of 2009 (PL 111–5).15
(ii) Excepted benefits (as defined in16
section 733(c) of the Employee Retirement17
Income Security Act of 1974), including18
coverage under a specified disease or ill-19
ness policy described in paragraph (3)(A)20
of such section.21
Commissioner may specify.23
plan in which the coverage consists only of one25
 
clauses (i) through (iii) be treated as acceptable2
coverage under this subdivision3
  ABLE COVERAGE.—During the grace period specified5
in paragraph (1)(A), an employment-based health6
plan that is described in such paragraph shall be7
treated as acceptable coverage under this subdivi-8
sion.9
COVERAGE.—11
coverage that is not grandfathered health insurance13
coverage under subsection (a) may only be offered14
on or after the first day of Y1 as an Exchange-par-15
ticipating health benefits plan.16
MITTED.—Excepted benefits (as defined in section18
2791(c) of the Public Health Service Act) are not19
included within the definition of health insurance20
coverage. Nothing in paragraph (1) shall prevent the21
offering, other than through the Health Insurance22
Exchange, of excepted benefits so long as it is of-23
fered and priced separately from health insurance24
coverage.25
erage3
SIONS.5
 A qualified health benefits plan may not impose any 6
pre-existing condition exclusion (as defined in section7
2701(b)(1)(A) of the Public Health Service Act) or other-8
 wise impose any limit or condition on the coverage under9
the plan with respect to an individual or dependent based10
on any health status-related factors (as defined in section11
2791(d)(9) of the Public Health Service Act) in relation12
to the individual or dependent.13
SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR IN-14
SURED PLANS.15
sections (c) and (e)) and 2712 (other than paragraphs (3),17
and (6) of subsection (b) and subsection (e)) of the Public18
Health Service Act, relating to guaranteed availability and19
renewability of health insurance coverage, shall apply to20
individuals and employers in all individual and group21
health insurance coverage, whether offered to individuals22
or employers through the Health Insurance Exchange,23
through any employment-based health plan, or otherwise,24
 
only if, before nonrenewal or discontinuation of coverage,3
the issuer has provided the enrollee with notice of non-4
payment of premiums and there is a grace period during5
  which the enrollees has an opportunity to correct such6
nonpayment. Rescissions of such coverage shall be prohib-7
ited except in cases of fraud as defined in sections8
2712(b)(2) of such Act.9
(a) IN GENERAL.—The premium rate charged for an11
insured qualified health benefits plan may not vary except12
as follows:13
age (within such age categories as the Commissioner15
shall specify) so long as the ratio of the highest such16
premium to the lowest such premium does not ex-17
ceed the ratio of 2 to 1.18
(2) B  Y AREA  .—By premium rating area (as19
permitted by State insurance regulators or, in the20
case of Exchange-participating health benefits plans,21
as specified by the Commissioner in consultation22
 with such regulators).23
rollment (such as variations within categories and25
 
compositions of families) so long as the ratio of the1
premium for family enrollment (or enrollments) to2
the premium for individual enrollment is uniform, as3
specified under State law and consistent with rules4
of the Commissioner.5
(1) STUDY.—The Commissioner, in coordina-7
tion with the Secretary of Health and Human Serv-8
ices and the Secretary of Labor, shall conduct a9
study of the large group insured and self-insured10
employer health care markets. Such study shall ex-11
amine the following:12
teristics, including size, that purchase insured14
products versus those that self-insure.15
(B) The similarities and differences be-16
tween typical insured and self-insured health17
plans.18
serve levels of employers that self-insure by em-20
ployer size.21
  being able to pay obligations or otherwise be-23
coming financially insolvent.24
size employers to self-insure4
the date of the enactment of this Act, the Commis-6
sioner shall submit to Congress and the applicable7
agencies a report on the study conducted under8
paragraph (1). Such report shall include any rec-9
ommendations the Commissioner deems appropriate10
to ensure that the law does not provide incentives11
for small and mid-size employers to self-insure or12
create adverse selection in the risk pools of large13
group insurers and self-insured employers. Not later14
than 18 months after the first day of Y1, the Com-15
missioner shall submit to Congress and the applica-16
  ble agencies an updated report on such study, in-17
cluding updates on such recommendations.18
SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN19
MENTAL HEALTH AND SUBSTANCE ABUSE20
DISORDER BENEFITS.21
health benefits plan shall comply with standards estab-23
lished by the Commissioner to prohibit discrimination in24
health benefits or benefit structures for qualifying health25
 
Retirement Income Security Act of 1974, 2702 of the2
Public Health Service Act, and section 9802 of the Inter-3
nal Revenue Code of 1986.4
(b) P  ARITY IN MENTAL HEALTH AND SUBSTANCE 5
 A BUSE DISORDER BENEFITS.—To the extent such provi-6
sions are not superceded by or inconsistent with subtitle7
C, the provisions of section 2705 (other than subsections8
(a)(1), (a)(2), and (c)) of section 2705 of the Public9
Health Service Act shall apply to a qualified health bene-10
fits plan, regardless of whether it is offered in the indi-11
 vidual or group market, in the same manner as such provi-12
sions apply to health insurance coverage offered in the13
large group market.14
(a) IN GENERAL.—A qualified health benefits plan16
that uses a provider network for items and services shall17
meet such standards respecting provider networks as the18
Commissioner may establish to assure the adequacy of 19
such networks in ensuring enrollee access to such items20
and services and transparency in the cost-sharing differen-21
tials between in-network coverage and out-of-network cov-22
erage.23
sion, the term ‘‘provider network’’ means the providers25
 
SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.3
(a) IN GENERAL.—A qualified health benefits plan4
shall meet a medical loss ratio as defined by the Commis-5
sioner. For any plan year in which the qualified health6
 benefits plan does not meet such medical loss ratio, QHBP7
offering entity shall provide in a manner specified by the8
Commissioner for rebates to enrollees of payment suffi-9
cient to meet such loss ratio.10
(b) BUILDING ON INTERIM RULES.—In imple-11
menting subsection (a), the Commissioner shall build on12
the definition and methodology developed by the Secretary 13
of Health and Human Services under the amendments14
made by section 161 for determining how to calculate the15
medical loss ratio. Such methodology shall be set at the16
highest level medical loss ratio possible that is designed17
to ensure adequate participation by QHBP offering enti-18
ties, competition in the health insurance market in and19
out of the Health Insurance Exchange, and value for con-20
sumers so that their premiums are used for services.21
 
fits3
(a) IN GENERAL.—A qualified health benefits plan5
shall provide coverage that at least meets the benefit6
standards adopted under section 124 for the essential ben-7
efits package described in section 122 for the plan year8
involved.9
(1) NON-EXCHANGE-PARTICIPATING HEALTH 11
  benefits plan that is not an Exchange-participating13
health benefits plan, such plan may offer such cov-14
erage in addition to the essential benefits package as15
the QHBP offering entity may specify.16
(2) E XCHANGE-PARTICIPATING HEALTH BENE-17
FITS PLANS.—In the case of an Exchange-partici-18
pating health benefits plan, such plan is required19
 under section 203 to provide specified levels of bene-20
fits and, in the case of a plan offering a premium-21
plus level of benefits, provide additional benefits.22
(3) CONTINUATION OF OFFERING OF SEPARATE 23
EXCEPTED BENEFITS COVERAGE.—Nothing in this24
subdivision shall be construed as affecting the offer-25
 
ing of health benefits in the form of excepted bene-1
fits (described in section 102(b)(1)(B)(ii)) if such2
  benefits are offered under a separate policy, con-3
tract, or certificate of insurance.4
(c) NO RESTRICTIONS ON COVERAGE UNRELATED 5
TO CLINICAL A PPROPRIATENESS.—A qualified health ben-6
efits plan may not impose any restriction (other than cost-7
sharing) unrelated to clinical appropriateness on the cov-8
erage of the health care items and services.9
SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.10
(a) IN GENERAL.—In this subdivision, the term ‘‘es-11
sential benefits package’’ means health benefits coverage,12
consistent with standards adopted under section 124 to13
ensure the provision of quality health care and financial14
security, that—15
priate clinical or professional practice;19
(2) limits cost-sharing for such covered health20
care items and services in accordance with such ben-21
efit standards, consistent with subsection (c);22
(3) does not impose any annual or lifetime limit23
on the coverage of covered health care items and24
services;25
network adequacy); and2
  Actuary of the Centers for Medicare & Medicaid4
Services, to the average prevailing employer-spon-5
sored coverage.6
items and services described in this subsection are the fol-8
lowing:9
services, including emergency department services.12
(3) Professional services of physicians and other13
health professionals.14
(4) Such services, equipment, and supplies inci-15
dent to the services of a physician’s or a health pro-16
fessional’s delivery of care in institutional settings,17
physician offices, patients’ homes or place of resi-18
dence, or other settings, as appropriate.19
(5) Prescription drugs.20
(7) Mental health and substance use disorder22
services.23
(8) Preventive services, including those services24
 
cines recommended for use by the Director of the2
Centers for Disease Control and Prevention.3
(9) Maternity care.4
health, vision, and hearing services, equipment, and6
supplies at least for children under 21 years of age.7
(c) REQUIREMENTS RELATING TO COST-SHARING 8
 AND MINIMUM A CTUARIAL V  ALUE.—9
(1) NO COST-SHARING FOR PREVENTIVE SERV -10
ICES.—There shall be no cost-sharing under the es-11
sential benefits package for preventive items and12
services (as specified under the benefit standards),13
including well baby and well child care.14
(2) A NNUAL LIMITATION.—15
(A) A NNUAL LIMITATION.—The cost-shar-16
ing incurred under the essential benefits pack-17
age with respect to an individual (or family) for18
a year does not exceed the applicable level spec-19
ified in subparagraph (B).20
level specified in this subparagraph for Y1 is22
$5,000 for an individual and $10,000 for a23
family. Such levels shall be increased (rounded24
to the nearest $100) for each subsequent year25
 
sumer Price Index (United States city average)2
applicable to such year.3
cost-sharing levels for basic, enhanced, and pre-5
mium plans under this subsection, the Sec-6
retary shall, to the maximum extent possible,7
 use only copayments and not coinsurance.8
(3) MINIMUM ACTUARIAL VALUE.—9
(A) IN GENERAL.—The cost-sharing under10
the essential benefits package shall be designed11
to provide a level of coverage that is designed12
to provide benefits that are actuarially equiva-13
lent to approximately 70 percent of the full ac-14
tuarial value of the benefits provided under the15
reference benefits package described in sub-16
paragraph (B).17
SCRIBED.—The reference benefits package de-19
scribed in this subparagraph is the essential20
  benefits package if there were no cost-sharing21
imposed.22
(a) ESTABLISHMENT.—24
  vate-public advisory committee which shall be a2
panel of medical and other experts to be known as3
the Health Benefits Advisory Committee to rec-4
ommend covered benefits and essential, enhanced,5
and premium plans.6
member and the chair of the Health Benefits Advi-8
sory Committee.9
sory Committee shall be composed of the following11
members, in addition to the Surgeon General:12
(A) 9 members who are not Federal em-13
ployees or officers and who are appointed by 14
the President.15
ployees or officers and who are appointed by 17
the Comptroller General of the United States in18
a manner similar to the manner in which the19
Comptroller General appoints members to the20
Medicare Payment Advisory Commission under21
section 1805(c) of the Social Security Act.22
(C) Such even number of members (not to23
exceed 8) who are Federal employees and offi-24
cers, as the President may appoint.25
 
Such initial appointments shall be made not later1
than 60 days after the date of the enactment of this2
 Act.3
fits Advisory Committee shall serve a 3-year term on5
the Committee, except that the terms of the initial6
members shall be adjusted in order to provide for a7
staggered term of appointment for all such mem-8
 bers.9
reflect providers, consumer representatives, employ-12
ers, labor, health insurance issuers, experts in health13
care financing and delivery, experts in racial and14
ethnic disparities, experts in care for those with dis-15
abilities, representatives of relevant governmental16
agencies. and at least one practicing physician or17
other health professional and an expert on children’s18
health and shall represent a balance among various19
sectors of the health care system so that no single20
sector unduly influences the recommendations of 21
such Committee.22
 ARDS.—The Health Benefits Advisory Committee25
 
Human Services (in this subtitle referred to as the2
‘‘Secretary’’) benefit standards (as defined in para-3
graph (4)), and periodic updates to such standards.4
In developing such recommendations, the Committee5
shall take into account innovation in health care and6
consider how such standards could reduce health dis-7
parities.8
Committee shall recommend initial benefit standards10
to the Secretary not later than 1 year after the date11
of the enactment of this Act.12
(3) PUBLIC INPUT.—The Health Benefits Advi-13
sory Committee shall allow for public input as a part14
of developing recommendations under this sub-15
section.16
subtitle, the term ‘‘benefit standards’’ means stand-18
ards respecting—19
scribed in section 122, including categories of 21
covered treatments, items and services within22
 benefit classes, and cost-sharing; and23
 
plans and premium plans (as provided under2
section 203(c)) consistent with paragraph (5).3
(5) LEVELS OF COST-SHARING FOR ENHANCED 4
  AND PREMIUM PLANS.—5
sharing for enhanced plans shall be designed so7
that such plans have benefits that are actuari-8
ally equivalent to approximately 85 percent of 9
the actuarial value of the benefits provided10
  under the reference benefits package described11
in section 122(c)(3)(B).12
sharing for premium plans shall be designed so14
that such plans have benefits that are actuari-15
ally equivalent to approximately 95 percent of 16
the actuarial value of the benefits provided17
  under the reference benefits package described18
in section 122(c)(3)(B).19
(c) OPERATIONS.—20
Health Benefits Advisory Committee shall receive22
travel expenses, including per diem in accordance23
  with applicable provisions under subchapter I of 24
 
chapter 57 of title 5, United States Code, and shall1
otherwise serve without additional pay.2
(2) MEMBERS NOT TREATED AS FEDERAL EM-3
PLOYEES.—Members of the Health Benefits Advi-4
sory Committee shall not be considered employees of 5
the Federal government solely by reason of any serv-6
ice on the Committee.7
sory Committee Act (5 U.S.C. App.), other than sec-9
tion 14, shall apply to the Health Benefits Advisory 10
Committee.11
publication in the Federal Register and the posting on the13
Internet website of the Department of Health and Human14
Services of all recommendations made by the Health Ben-15
efits Advisory Committee under this section.16
SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDA-17
TIONS; ADOPTION OF BENEFIT STANDARDS.18
(a) PROCESS FOR  A DOPTION OF RECOMMENDA -19
TIONS.—20
(1) REVIEW OF RECOMMENDED STANDARDS.—21
Not later than 45 days after the date of receipt of 22
  benefit standards recommended under section 12323
(including such standards as modified under para-24
graph (2)(B)), the Secretary shall review such25
 
(2) DETERMINATION TO ADOPT STANDARDS.—3
If the Secretary determines—4
(A) to propose adoption of benefit stand-5
ards so recommended as a package, the Sec-6
retary shall, by regulation under section 553 of 7
title 5, United States Code, propose adoption8
such standards; or9
ards as a package, the Secretary shall notify 11
the Health Benefits Advisory Committee in12
  writing of such determination and the reasons13
for not proposing the adoption of such rec-14
ommendation and provide the Committee with a15
further opportunity to modify its previous rec-16
ommendations and submit new recommenda-17
tions to the Secretary on a timely basis.18
(3) CONTINGENCY.—If, because of the applica-19
tion of paragraph (2)(B), the Secretary would other-20
  wise be unable to propose initial adoption of such21
recommended standards by the deadline specified in22
subsection (b)(1), the Secretary shall, by regulation23
  under section 553 of title 5, United States Code,24
 
deadline.2
for publication in the Federal Register of all deter-4
minations made by the Secretary under this sub-5
section.6
(1) INITIAL STANDARDS.—Not later than 188
months after the date of the enactment of this Act,9
the Secretary shall, through the rulemaking process10
consistent with subsection (a), adopt an initial set of 11
 benefit standards.12
subsection (a), the Secretary shall provide for the14
periodic updating of the benefit standards previously 15
adopted under this section.16
adopt any benefit standards for an essential benefits18
package or for level of cost-sharing that are incon-19
sistent with the requirements for such a package or20
level under sections 122 and 123(b)(5).21
 
HEALTH INSURERS.4
standards that all insured QHBP offering entities shall6
meet.7
MECHANISMS.9
Commissioner shall establish.12
Under a qualified health benefits plan the QHBP offering14
entity shall provide an internal claims and appeals process15
that initially incorporates the claims and appeals proce-16
dures (including urgent claims) set forth at section17
2560.503–1 of title 29, Code of Federal Regulations, as18
published on November 21, 2000 (65 Fed. Reg. 70246)19
and shall update such process in accordance with any 20
standards that the Commissioner may establish.21
(c) E XTERNAL REVIEW  PROCESS.—22
(1) IN GENERAL.—The Commissioner shall es-23
tablish an external review process (including proce-24
dures for expedited reviews of urgent claims) that25
 
review of denied claims under this subdivision.2
(2) REQUIRING FAIR GRIEVANCE AND APPEALS 3
MECHANISMS.—A determination made, with respect4
to a qualified health benefits plan offered by a5
QHBP offering entity, under the external review6
process established under this subsection shall be7
 binding on the plan and the entity.8
(d) CONSTRUCTION.—Nothing in this section shall be9
construed as affecting the availability of judicial review10
 under State law for adverse decisions under subsection (b)11
or (c), subject to section 151.12
SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND13
PLAN DISCLOSURE.14
plan shall comply with standards established by the17
Commissioner for the accurate and timely disclosure18
of plan documents, plan terms and conditions,19
claims payment policies and practices, periodic fi-20
nancial disclosure, data on enrollment, data on21
disenrollment, data on the number of claims denials,22
data on rating practices, information on cost-sharing23
and payments with respect to any out-of-network24
coverage, and other information as determined ap-25
 
shall require that such disclosure be provided in2
plain language.3
term ‘‘plain language’’ means language that the in-5
tended audience, including individuals with limited6
English proficiency, can readily understand and use7
  because that language is clean, concise, well-orga-8
nized, and follows other best practices of plain lan-9
guage writing.10
  velop and issue guidance on best practices of plain12
language writing.13
health benefits plan shall comply with standards estab-15
lished by the Commissioner to ensure transparency to each16
health care provider relating to reimbursement arrange-17
ments between such plan and such provider.18
(c) A DVANCE NOTICE OF PLAN CHANGES.—A 19
change in a qualified health benefits plan shall not be20
made without such reasonable and timely advance notice21
to enrollees of such change.22
 
PLANS NOT OFFERED THROUGH THE2
HEALTH INSURANCE EXCHANGE.3
subtitle shall apply to qualified health benefits plans that5
are not being offered through the Health Insurance Ex-6
change only to the extent specified by the Commissioner.7
SEC. 135. TIMELY PAYMENT OF CLAIMS.8
  A QHBP offering entity shall comply with the re-9
quirements of section 1857(f) of the Social Security Act10
  with respect to a qualified health benefits plan it offers11
in the same manner an Medicare Advantage organization12
is required to comply with such requirements with respect13
to a Medicare Advantage plan it offers under part C of 14
Medicare.15
SUBROGATION OF BENEFITS.17
ment of payments in cases involving individuals and mul-20
tiple plan coverage.21
TION.23
standards for electronic financial and administrative25
 
 Act, added by section 163(a).2
Subtitle E—Governance3
CHOICES COMMISSIONER.5
ment, a Health Choices Administration (in this subdivision8
referred to as the ‘‘Administration’’).9
(b) COMMISSIONER.—10
headed by a Health Choices Commissioner (in this12
subdivision referred to as the ‘‘Commissioner’’) who13
shall be appointed by the President, by and with the14
advice and consent of the Senate.15
(2) COMPENSATION; ETC.—The provisions of 16
paragraphs (2), (5), and (7) of subsection (a) (relat-17
ing to compensation, terms, general powers, rule-18
making, and delegation) of section 702 of the Social19
Security Act (42 U.S.C. 902) shall apply to the20
Commissioner and the Administration in the same21
manner as such provisions apply to the Commis-22
sioner of Social Security and the Social Security Ad-23
ministration.24
carrying out the following functions under this subdivi-3
sion:4
lishment of qualified health benefits plan standards6
  under this title, including the enforcement of such7
standards in coordination with State insurance regu-8
lators and the Secretaries of Labor and the Treas-9
 ury.10
tablishment and operation of a Health Insurance12
Exchange under subtitle A of title II.13
(3) INDIVIDUAL AFFORDABILITY CREDITS.—14
The administration of individual affordability credits15
  under subtitle C of title II, including determination16
of eligibility for such credits.17
(4) A DDITIONAL FUNCTIONS.—Such additional18
functions as may be specified in this subdivision.19
(b) PROMOTING A CCOUNTABILITY.—20
(1) IN GENERAL.—The Commissioner shall un-21
dertake activities in accordance with this subtitle to22
promote accountability of QHBP offering entities in23
meeting Federal health insurance requirements, re-24
gardless of whether such accountability is with re-25
spect to qualified health benefits plans offered26
 
of such Exchange.2
(A) IN GENERAL.—The commissioner4
shall, in coordination with States, conduct au-5
dits of qualified health benefits plan compliance6
  with Federal requirements. Such audits may 7
include random compliance audits and targeted8
audits in response to complaints or other sus-9
pected non-compliance.10
qualified health benefits plans reimbursement14
for the costs of such examinations and audit of 15
such QHBP offering entities.16
collect data for purposes of carrying out the Commis-18
sioner’s duties, including for purposes of promoting qual-19
ity and value, protecting consumers, and addressing dis-20
parities in health and health care and may share such data21
 with the Secretary of Health and Human Services.22
(d) S ANCTIONS A UTHORITY.—23
(1) IN GENERAL.—In the case that the Com-24
missioner determines that a QHBP offering entity 25
 
sioner may, in coordination with State insurance2
regulators and the Secretary of Labor, provide, in3
addition to any other remedies authorized by law,4
for any of the remedies described in paragraph (2).5
(2) REMEDIES.—The remedies described in this6
paragraph, with respect to a qualified health benefits7
plan offered by a QHBP offering entity, are—8
(A) civil money penalties of not more than9
the amount that would be applicable under10
similar circumstances for similar violations11
  under section 1857(g) of the Social Security 12
 Act;13
  under such plan after the date the Commis-15
sioner notifies the entity of a determination16
  under paragraph (1) and until the Commis-17
sioner is satisfied that the basis for such deter-18
mination has been corrected and is not likely to19
recur;20
ment to the entity under the Health Insurance23
Exchange for individuals enrolled in such plan24
after the date the Commissioner notifies the en-25
 
and until the Secretary is satisfied that the2
 basis for such determination has been corrected3
and is not likely to recur; or4
(D) working with State insurance regu-5
lators to terminate plans for repeated failure by 6
the offering entity to meet the requirements of 7
this title.8
the development of standards for the definitions of terms11
 used in health insurance coverage, including insurance-re-12
lated terms.13
sioner shall issue regulations for the effective and efficient15
administration of the Health Insurance Exchange and af-16
fordability credits under subtitle C, including, with respect17
to the determination of eligibility for affordability credits,18
the use of personnel who are employed in accordance with19
the requirements of title 5, United States Code, to carry 20
out the duties of the Commissioner or, in the case of sec-21
tions 208 and 241(b)(2), the use of State personnel who22
are employed in accordance with standards prescribed by 23
the Office of Personnel Management pursuant to section24
 
U.S.C. 4728).2
(a) CONSULTATION.—In carrying out the Commis-4
sioner’s duties under this subdivision, the Commissioner,5
as appropriate, shall consult with at least with the fol-6
lowing:7
insurance regulators, including concerning the10
standards for insured qualified health benefits plans11
  under this title and enforcement of such standards.12
(2) Appropriate State agencies, specifically con-13
cerning the administration of individual affordability 14
credits under subtitle C of title II and the offering15
of Exchange-participating health benefits plans, to16
Medicaid eligible individuals under subtitle A of such17
title.18
(4) Indian tribes and tribal organizations.20
(5) The National Association of Insurance21
Commissioners for purposes of using model guide-22
lines established by such association for purposes of 23
subtitles B and D.24
the Commissioner shall work in coordination with4
existing Federal and State entities to the maximum5
extent feasible consistent with this subdivision and6
in a manner that prevents conflicts of interest in du-7
ties and ensures effective enforcement.8
(2) UNIFORM STANDARDS.—The Commissioner,9
in coordination with such entities, shall seek to10
achieve uniform standards that adequately protect11
consumers in a manner that does not unreasonably 12
affect employers and insurers.13
(a) IN GENERAL.—The Commissioner shall appoint15
  within the Health Choices Administration a Qualified16
Health Benefits Plan Ombudsman who shall have exper-17
tise and experience in the fields of health care and edu-18
cation of (and assistance to) individuals.19
(b) DUTIES.—The Qualified Health Benefits Plan20
Ombudsman shall, in a linguistically appropriate man-21
ner—22
for information submitted by individuals;24
 
plaints, grievances, and requests referred to in para-2
graph (1), including—3
evant information needed to seek an appeal of 5
a decision or determination;6
problems arising from disenrollment from such8
a plan;9
ing a qualified health benefits plan in which to11
enroll; and12
senting information under subtitle C (relating14
to affordability credits); and15
 budsman and that include such recommendations for18
improvement in the administration of this subdivi-19
sion as the Ombudsman determines appropriate. The20
Ombudsman shall not serve as an advocate for any 21
increases in payments or new coverage of services,22
 but may identify issues and problems in payment or23
coverage policies.24
Requirements; Miscellaneous2
(a) COVERAGE NOT OFFERED THROUGH E X -4
CHANGE.—5
ance coverage not offered through the Health Insur-7
ance Exchange (whether or not offered in connection8
  with an employment-based health plan), and in the9
case of employment-based health plans, the require-10
ments of this title do not supercede any require-11
ments applicable under titles XXII and XXVII of 12
the Public Health Service Act, parts 6 and 7 of sub-13
title B of title I of the Employee Retirement Income14
Security Act of 1974, or State law, except insofar as15
such requirements prevent the application of a re-16
quirement of this subdivision, as determined by the17
Commissioner.18
shall be construed as affecting the application of sec-20
tion 514 of the Employee Retirement Income Secu-21
rity Act of 1974.22
 
ance coverage offered through the Health Insurance2
Exchange—3
supercede any requirements (including require-5
ments relating to genetic information non-6
discrimination and mental health) applicable7
  under title XXVII of the Public Health Service8
  Act or under State law, except insofar as such9
requirements prevent the application of a re-10
quirement of this subdivision, as determined by 11
the Commissioner; and12
State laws shall apply.14
described in paragraph (1), nothing in such para-16
graph shall be construed as preventing the applica-17
tion of rights and remedies under State laws with18
respect to any requirement referred to in paragraph19
(1)(A).20
(a) IN GENERAL.—Except as otherwise explicitly per-22
mitted by this division and by subsequent regulations con-23
sistent with this division, all health care and related serv-24
ices (including insurance coverage and public health activi-25
 
ties) covered by this division shall be provided without re-1
gard to personal characteristics extraneous to the provi-2
sion of high quality health care or related services.3
(b) IMPLEMENTATION.—To implement the require-4
ment set forth in subsection (a), the Secretary of Health5
and Human Services shall, not later than 18 months after6
the date of the enactment of this Act, promulgate such7
regulations as are necessary or appropriate to insure that8
all health care and related services (including insurance9
coverage and public health activities) covered by this divi-10
sion are provided (whether directly or through contractual,11
licensing, or other arrangements) without regard to per-12
sonal characteristics extraneous to the provision of high13
quality health care or related services.14
SEC. 153. WHISTLEBLOWER PROTECTION.15
any employee with respect to his compensation, terms,18
conditions, or other privileges of employment because the19
employee (or any person acting pursuant to a request of 20
the employee)—21
to provide or cause to be provided to the employer,23
the Federal Government, or the attorney general of 24
a State information relating to any violation of, or25
 
any act or omission the employee reasonably believes1
to be a violation of any provision of this division or2
any order, rule, or regulation promulgated under3
this division;4
(2) testified or is about to testify in a pro-5
ceeding concerning such violation;6
or participate in such a proceeding; or8
(4) objected to, or refused to participate in, any 9
activity, policy, practice, or assigned task that the10
employee (or other such person) reasonably believed11
to be in violation of any provision of this division or12
any order, rule, or regulation promulgated under13
this division.14
 by this section who alleges discrimination by an employer16
in violation of subsection (a) may bring an action governed17
 by the rules, procedures, legal burdens of proof, and rem-18
edies set forth in section 40(b) of the Consumer Product19
Safety Act (15 U.S.C. 2087(b)).20
(c) EMPLOYER DEFINED.—As used in this section,21
the term ‘‘employer’’ means any person (including one or22
more individuals, partnerships, associations, corporations,23
trusts, professional membership organization including a24
certification, disciplinary, or other professional body, unin-25
 
or trustees) engaged in profit or nonprofit business or in-2
dustry whose activities are governed by this division, and3
any agent, contractor, subcontractor, grantee, or consult-4
ant of such person.5
tion set forth in section 20109(h) of title 49, United7
States Code, shall also apply to this section.8
SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BAR-9
GAINING.10
in collective bargaining over the terms and conditions of 13
employment related to health care.14
SEC. 155. SEVERABILITY.15
of such provision to any person or circumstance, is held17
to be unconstitutional, the remainder of the provisions of 18
this division and the application of the provision to any 19
other person or circumstance shall not be affected.20
Subtitle G—Early Investments21
(a) GROUP HEALTH INSURANCE COVERAGE.—Title23
  XXVII of the Public Health Service Act is amended by 24
inserting after section 2713 the following new section:25
 
that offers health insurance coverage in the small or large3
group market shall provide that for any plan year in which4
the coverage has a medical loss ratio below a level specified5
  by the Secretary, the issuer shall provide in a manner6
specified by the Secretary for rebates to enrollees of pay-7
ment sufficient to meet such loss ratio. Such methodology 8
shall be set at the highest level medical loss ratio possible9
that is designed to ensure adequate participation by 10
issuers, competition in the health insurance market, and11
  value for consumers so that their premiums are used for12
services.13
establish a uniform definition of medical loss ratio and15
methodology for determining how to calculate the medical16
loss ratio. Such methodology shall be designed to take into17
account the special circumstances of smaller plans, dif-18
ferent types of plans, and newer plans.’’.19
(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.—20
Such title is further amended by inserting after section21
2753 the following new section:22
‘‘SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.23
‘‘The provisions of section 2714 shall apply to health24
insurance coverage offered in the individual market in the25
 
(c) IMMEDIATE IMPLEMENTATION.—The amend-3
ments made by this section shall apply in the group and4
individual market for plan years beginning on or after5
January 1, 2011.6
GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH 9
INSURANCE COVERAGE.—Section 2742 of the Public10
Health Service Act (42 U.S.C. 300gg–42) is amended—11
(1) in its heading, by inserting ‘‘  AND CON-12
TINUATION IN FORCE, INCLUDING PROHIBI-13
TION OF RESCISSION,’’ after ‘‘GUARANTEED RE-14
NEWABILITY’’; and15
(b) SECRETARIAL GUIDANCE REGARDING RESCIS-18
SIONS.—Section 2742 of such Act (42 U.S.C. 300gg–42)19
is amended by adding at the end the following:20
‘‘(f) RESCISSION.—A health insurance issuer may re-21
scind health insurance coverage only upon clear and con-22
  vincing evidence of fraud described in subsection (b)(2).23
 
dures for independent, external third party review.’’.2
(c) OPPORTUNITY FOR INDEPENDENT, E XTERNAL 3
THIRD P ARTY REVIEW IN CERTAIN C ASES.—Subpart 14
of part B of title XXVII of such Act (42 U.S.C. 300gg–5
41 et seq.) is amended by adding at the end the following:6
‘‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL7
THIRD PARTY REVIEW IN CASES OF RESCIS-8
SION.9
surance issuer determines to rescind health insurance cov-11
erage for an individual in the individual market, before12
such rescission may take effect the issuer shall provide the13
individual with notice of such proposed rescission and an14
opportunity for a review of such determination by an inde-15
pendent, external third party under procedures specified16
 by the Secretary under section 2742(f).17
‘‘(b) INDEPENDENT DETERMINATION.—If the indi-18
  vidual requests such review by an independent, external19
third party of a rescission of health insurance coverage,20
the coverage shall remain in effect until such third party 21
determines that the coverage may be rescinded under the22
guidance issued by the Secretary under section 2742(f).’’.23
(d) EFFECTIVE D ATE.—The amendments made by 24
 
after such date.2
TRANSACTIONS.—5
(1) IN GENERAL.—Part C of title XI of the So-6
cial Security Act (42 U.S.C. 1320d et seq.) is7
amended by inserting after section 1173 the fol-8
lowing new section:9
TRANSACTIONS.11
TIVE TRANSACTIONS.—13
goals described in paragraph (2).16
‘‘(2) GOALS FOR FINANCIAL AND ADMINISTRA -17
TIVE TRANSACTIONS.—The goals for standards18
 under paragraph (1) are that such standards shall—19
‘‘(A) be unique with no conflicting or re-20
dundant standards;21
including companion guides;24
nications;4
responsibility at the point of service and, to the7
extent possible, prior to service, including8
  whether the individual is eligible for a specific9
service with a specific physician at a specific fa-10
cility, which may include utilization of a ma-11
chine-readable health plan beneficiary identi-12
fication card;13
adjudication of claims;15
response, and status reporting applicable to any 17
electronic transaction deemed appropriate by 18
the Secretary;19
reason and remark codes) in unambiguous21
terms, not permit optional fields, require that22
data elements be either required or conditioned23
 upon set values in other fields, and prohibit ad-24
ditional conditions; and25
across administrative and clinical transaction2
standards.3
  years after the date of implementation of the X125
  Version 5010 transaction standards implemented6
  under this part, the Secretary shall adopt standards7
 under this section.8
 ARDS.—The standards under this section shall be10
developed, adopted, and enforced so as to—11
‘‘(A) clarify, refine, complete, and expand,12
as needed, the standards required under section13
1173;14
ized transactions to comply with the same16
standards as to data content such that a fully 17
compliant, equivalent electronic transaction can18
  be populated from the data from a paper19
 version;20
order to allow automated reconciliation with the22
related health care payment and remittance ad-23
 vice;24
and denial management processes, including2
tracking, adjudication, and appeal processing ;3
‘‘(E) require the use of a standard elec-4
tronic transaction with which health care pro-5
  viders may quickly and efficiently enroll with a6
health plan to conduct the other electronic7
transactions provided for in this part; and8
‘‘(F) provide for other requirements relat-9
ing to administrative simplification as identified10
  by the Secretary, in consultation with stake-11
holders.12
developing the standards under this section, the Sec-14
retary shall build upon existing and planned stand-15
ards.16
‘‘(6) IMPLEMENTATION AND ENFORCEMENT.—17
Not later than 6 months after the date of the enact-18
ment of this section, the Secretary shall submit to19
the appropriate committees of Congress a plan for20
the implementation and enforcement, by not later21
than 5 years after such date of enactment, of the22
standards under this section. Such plan shall in-23
clude—24
stones for developing the complete set of stand-2
ards;3
continually developing and approving additions5
and modifications to the standards as often as6
annually to improve their quality and extend7
their functionality to meet evolving require-8
ments in health care;9
and ease the burden of, implementation for cer-11
tain health care providers, with special consid-12
eration given to such providers serving rural or13
 underserved areas and ensure coordination with14
standards, implementation specifications, and15
HITECH Act;17
and ease the burden of, health care providers19
  who volunteer to participate in the process of 20
setting standards for electronic transactions;21
‘‘(E) an estimate of total funds needed to22
ensure timely completion of the implementation23
plan; and24
dits to ensure compliance, civil monetary and3
programmatic penalties for non-compliance con-4
sistent with existing laws and regulations, and5
a fair and reasonable appeals process building6
off of enforcement provisions under this part.7
‘‘(b) LIMITATIONS ON USE OF D ATA .—Nothing in8
this section shall be construed to permit the use of infor-9
mation collected under this section in a manner that would10
adversely affect any individual.11
sure (through the promulgation of regulations or other-13
  wise) that all data collected pursuant to subsection (a)14
are—15
section 3009(a)(2) of the Public Health Service18
  Act), including any privacy or security standard19
adopted under section 3004 of such Act; and20
‘‘(2) protected from all inappropriate internal21
 use by any entity that collects, stores, or receives the22
data, including use of such data in determinations of 23
eligibility (or continued eligibility) in health plans,24
 
Secretary.’’.2
(42 U.S.C. 1320d) is amended—4
(A) in paragraph (7), by striking ‘‘with5
reference to’’ and all that follows and inserting6
‘‘with reference to a transaction or data ele-7
ment of health information in section 11738
means implementation specifications, certifi-9
mats, codes, and code sets adopted or estab-11
lished by the Secretary for the electronic ex-12
change and use of information’’; and13
(B) by adding at the end the following new14
paragraph:15
rules’ means business rules for using and processing17
transactions. Operating rules should address the fol-18
lowing:19
available and established national standards.21
‘‘(B) Infrastructure requirements that es-22
tablish best practices for streamlining data flow23
to yield timely execution of transactions.24
 
lated rights and responsibilities for entities that2
are transmitting or receiving data.’’.3
(3) CONFORMING AMENDMENT.—Section4
amended, in the matter before paragraph (1)—6
(A) by inserting ‘‘on behalf of an indi-7
 vidual’’ after ‘‘1978)’’; and8
 vidual’’ after ‘‘for a financial institution’’ and10
(b) STANDARDS FOR CLAIMS  A TTACHMENTS AND 11
COORDINATION OF BENEFITS .—12
(1) STANDARD FOR HEALTH CLAIMS ATTACH-13
MENTS.—Not later than 1 year after the date of the14
enactment of this Act, the Secretary of Health and15
Human Services shall promulgate a final rule to es-16
tablish a standard for health claims attachment17
transaction described in section 1173(a)(2)(B) of the18
Social Security Act (42 U.S.C. 1320d-2(a)(2)(B))19
and coordination of benefits.20
  ACTIONS BY FINANCIAL INSTITUTIONS.—22
(A) IN GENERAL.—Section 1179 of the So-23
cial Security Act (42 U.S.C. 1320d–8) is24
amended, in the matter before paragraph (1)—25
 
serting ‘‘and is engaged’’; and2
(ii) by inserting ‘‘(other than as a3
  business associate for a covered entity)’’4
after ‘‘for a financial institution’’.5
(B) EFFECTIVE DATE.—The amendments6
made by paragraph (1) shall apply to trans-7
actions occurring on or after such date (not8
later than 6 months after the date of the enact-9
ment of this Act) as the Secretary of Health10
and Human Services shall specify.11
SEC. 164. REINSURANCE PROGRAM FOR RETIREES.12
(a) ESTABLISHMENT.—13
(1) IN GENERAL.—Not later than 90 days after14
the date of the enactment of this Act, the Secretary 15
of Health and Human Services shall establish a tem-16
porary reinsurance program (in this section referred17
to as the ‘‘reinsurance program’’) to provide reim-18
  bursement to assist participating employment-based19
plans with the cost of providing health benefits to20
retirees and to eligible spouses, surviving spouses21
and dependents of such retirees.22
(2) DEFINITIONS.—For purposes of this sec-23
tion:24
plan’’ means a group health benefits plan2
that—3
ployers, former employers or employee as-5
sociations, or a voluntary employees’ bene-6
ficiary association, or a committee or board7
of individuals appointed to administer such8
plan, and9
ees.11
medical, surgical, hospital, prescription drug,13
and such other benefits as shall be determined14
  by the Secretary, whether self-funded or deliv-15
ered through the purchase of insurance or oth-16
erwise.17
  based plan’’ means an eligible employment-19
  based plan that is participating in the reinsur-20
ance program.21
spect to a participating employment-benefit23
plan, an individual who—24
(i) is 55 years of age or older;25
 
title XVIII of the Social Security Act; and2
(iii) is not an active employee of an3
employer maintaining the plan or of any 4
employer that makes or has made substan-5
tial contributions to fund such plan.6
(E) The term ‘‘Secretary’’ means Sec-7
retary of Health and Human Services.8
(b) P ARTICIPATION.—To be eligible to participate in9
the reinsurance program, an eligible employment-based10
plan shall submit to the Secretary an application for par-11
ticipation in the program, at such time, in such manner,12
and containing such information as the Secretary shall re-13
quire.14
(A) IN GENERAL.—Under the reinsurance17
program, a participating employment-based18
the Secretary which shall contain documenta-20
tion of the actual costs of the items and serv-21
ices for which each claim is being submitted.22
(B) B  ASIS FOR CLAIMS.—Each claim sub-23
mitted under subparagraph (A) shall be based24
on the actual amount expended by the partici-25
 
the plan year for the appropriate employment2
 based health benefits provided to a retiree or to3
the spouse, surviving spouse, or dependent of a4
retiree. In determining the amount of any claim5
for purposes of this subsection, the partici-6
pating employment-based plan shall take into7
account any negotiated price concessions (such8
as discounts, direct or indirect subsidies, re-9
 bates, and direct or indirect remunerations) ob-10
tained by such plan with respect to such health11
  benefits. For purposes of calculating the12
amount of any claim, the costs paid by the re-13
tiree or by the spouse, surviving spouse, or de-14
pendent of the retiree in the form of 15
deductibles, co-payments, and co-insurance shall16
 be included along with the amounts paid by the17
participating employment-based plan.18
Secretary determines that a participating employ-20
ment-based plan has submitted a valid claim under21
paragraph (1), the Secretary shall reimburse such22
plan for 80 percent of that portion of the costs at-23
tributable to such claim that exceeds $15,000, but is24
less than $90,000. Such amounts shall be adjusted25
 
medical care component of the Consumer Price2
Index (rounded to the nearest multiple of $1,000)3
for the year involved.4
participating employment-based plan under this sub-6
section shall be used to lower the costs borne di-7
rectly by the participants and beneficiaries for health8
  benefits provided under such plan in the form of 9
premiums, co-payments, deductibles, co-insurance, or10
other out-of-pocket costs. Such payments shall not11
 be used to reduce the costs of an employer maintain-12
ing the participating employment-based plan. The13
Secretary shall develop a mechanism to monitor the14
appropriate use of such payments by such plans.15
(4) A PPEALS AND PROGRAM PROTECTIONS.—16
The Secretary shall establish—17
(A) an appeals process to permit partici-18
pating employment-based plans to appeal a de-19
termination of the Secretary with respect to20
claims submitted under this section; and21
(B) procedures to protect against fraud,22
 waste, and abuse under the program.23
(5) A UDITS.—The Secretary shall conduct an-24
nual audits of claims data submitted by partici-25
 
ensure that they are in compliance with the require-2
ments of this section.3
(1) ESTABLISHMENT.—5
the Treasury of the United States a trust fund7
to be known as the ‘‘Retiree Reserve Trust8
Fund’’ (referred to in this section as the ‘‘Trust9
Fund’’), that shall consist of such amounts as10
may be appropriated or credited to the Trust11
Fund as provided for in this subsection to en-12
able the Secretary to carry out the reinsurance13
program. Such amounts shall remain available14
 until expended.15
priated to the Trust Fund, out of any moneys17
in the Treasury not otherwise appropriated, an18
amount requested by the Secretary as necessary 19
to carry out this section, except that the total20
of all such amounts requested shall not exceed21
$10,000,000,000.22
FUND.—24
funding to carry out the reinsurance pro-3
gram and shall be used to carry out such4
program.5
and outlays flowing from such appropria-8
tions, shall not be taken into account for9
purposes of any budget enforcement proce-10
dures including allocations under section11
302(a) and (b) of the Balanced Budget12
and Emergency Deficit Control Act and13
  budget resolutions for fiscal years during14
  which appropriations are made from the15
Trust Fund.16
FUNDS.—The Secretary has the authority 18
to stop taking applications for participa-19
tion in the program or take such other20
steps in reducing expenditures under the21
reinsurance program in order to ensure22
that expenditures under the reinsurance23
program do not exceed the funds available24
 under this subsection.25
CHANGE; OUTLINE OF DUTIES; DEFINITIONS.7
(a) ESTABLISHMENT.—There is established within8
the Health Choices Administration and under the direc-9
tion of the Commissioner a Health Insurance Exchange10
in order to facilitate access of individuals and employers,11
through a transparent process, to a variety of choices of 12
affordable, quality health insurance coverage, including a13
public health insurance option.14
cordance with this subtitle and in coordination with appro-16
priate Federal and State officials as provided under sec-17
tion 143(b), the Commissioner shall—18
(1) under section 204 establish standards for,19
accept bids from, and negotiate and enter into con-20
tracts with, QHBP offering entities for the offering21
of health benefits plans through the Health Insur-22
ance Exchange, with different levels of benefits re-23
quired under section 203, and including with respect24
to oversight and enforcement;25
  viduals and employers described in section 202; and3
(3) conduct such activities related to the Health4
Insurance Exchange as required, including establish-5
ment of a risk pooling mechanism under section 2066
and consumer protections under subtitle D of title I.7
(c) E XCHANGE-PARTICIPATING HEALTH BENEFITS 8
PLAN DEFINED.—In this subdivision, the term ‘‘Ex-9
change-participating health benefits plan’’ means a quali-10
fied health benefits plan that is offered through the Health11
Insurance Exchange.12
ERS.14
section, all individuals are eligible to obtain coverage16
through enrollment in an Exchange-participating health17
  benefits plan offered through the Health Insurance Ex-18
change unless such individuals are enrolled in another19
qualified health benefits plan or other acceptable coverage.20
(b) DEFINITIONS.—In this subdivision:21
(1) E XCHANGE-ELIGIBLE INDIVIDUAL.—The22
term ‘‘Exchange-eligible individual’’ means an indi-23
  vidual who is eligible under this section to be en-24
rolled through the Health Insurance Exchange in an25
 
  with respect to family coverage, includes dependents2
of such individual.3
term ‘‘Exchange-eligible employer’’ means an em-5
ployer that is eligible under this section to enroll6
through the Health Insurance Exchange employees7
of the employer (and their dependents) in Exchange-8
eligible health benefits plans.9
(3) EMPLOYMENT-RELATED DEFINITIONS.—10
ployee’’, and ‘‘part-time employee’’ have the mean-12
ings given such terms by the Commissioner for pur-13
poses of this subdivision.14
(c) TRANSITION.—Individuals and employers shall15
only be eligible to enroll or participate in the Health Insur-16
ance Exchange in accordance with the following transition17
schedule:18
100(c))—20
(d)(1), including individuals described in para-22
graphs (3) and (4) of subsection (d); and23
(B) smallest employers described in sub-24
section (e)(1).25
paragraph (1); and3
section (e)(2).5
and subsequent years—7
paragraph (2); and9
Commissioner under subsection (e)(3).11
succeeding provisions of this subsection, an indi-14
  vidual described in this paragraph is an individual15
 who—16
subparagraphs (C) through (F) of paragraph18
(2); and19
erage and an employer contribution under the23
plan meet the requirements of section 312.24
 
For purposes of subparagraph (B), in the case of an1
individual who is self-employed, who has at least 12
employee, and who meets the requirements of section3
312, such individual shall be deemed a full-time em-4
ployee described in such subparagraph.5
(2) A CCEPTABLE COVERAGE.—For purposes of 6
this subdivision, the term ‘‘acceptable coverage’’7
means any of the following:8
(A) QUALIFIED HEALTH BENEFITS PLAN 9
COVERAGE.—Coverage under a qualified health10
 benefits plan.11
COVERAGE; COVERAGE UNDER CURRENT GROUP 13
HEALTH PLAN.—Coverage under a grand-14
fathered health insurance coverage (as defined15
in subsection (a) of section 102) or under a16
current group health plan (described in sub-17
section (b) of such section).18
(C) MEDICARE.—Coverage under part A of 19
title XVIII of the Social Security Act.20
(D) MEDICAID.—Coverage for medical as-21
sistance under title XIX of the Social Security 22
  Act, excluding such coverage that is only avail-23
able because of the application of subsection24
 
  AND DEPENDENTS (INCLUDING TRICARE).—2
Coverage under chapter 55 of title 10, United3
States Code, including similar coverage fur-4
nished under section 1781 of title 38 of such5
Code.6
health care program under chapter 17 of title8
38, United States Code, but only if the cov-9
erage for the individual involved is determined10
  by the Commissioner in coordination with the11
Secretary of Treasury to be not less than a level12
specified by the Commissioner and Secretary of 13
  Veteran’s Affairs, in coordination with the Sec-14
retary of Treasury, based on the individual’s15
priority for services as provided under section16
1705(a) of such title.17
  benefits coverage, such as a State health bene-19
fits risk pool, as the Commissioner, in coordina-20
tion with the Secretary of the Treasury, recog-21
nizes for purposes of this paragraph.22
The Commissioner shall make determinations under23
this paragraph in coordination with the Secretary of 24
the Treasury.25
TIONAL MEDICAID ELIGIBLE INDIVIDUALS.—An indi-2
  vidual who is a non-traditional Medicaid eligible in-3
dividual (as defined in section 205(e)(4)(C)) in a4
State may be an Exchange-eligible individual if the5
individual was enrolled in a qualified health benefits6
plan, grandfathered health insurance coverage, or7
current group health plan during the 6 months be-8
fore the individual became a non-traditional Med-9
icaid eligible individual. During the period in which10
such an individual has chosen to enroll in an Ex-11
change-participating health benefits plan, the indi-12
  vidual is not also eligible for medical assistance13
 under Medicaid.14
(A) IN GENERAL.—Except as provided in16
subparagraph (B), once an individual qualifies17
as an Exchange-eligible individual under this18
subsection (including as an employee or depend-19
ent of an employee of an Exchange-eligible em-20
ployer) and enrolls under an Exchange-partici-21
pating health benefits plan through the Health22
Insurance Exchange, the individual shall con-23
tinue to be treated as an Exchange-eligible indi-24
  vidual until the individual is no longer enrolled25
 
plan.2
shall not apply to an individual once the5
individual becomes eligible for coverage—6
(I) under part A of the Medicare7
program;8
as a Medicaid eligible individual, ex-10
cept as permitted under paragraph11
(3) or clause (ii); or12
(III) in such other circumstances13
as the Commissioner may provide.14
(ii) TRANSITION PERIOD.—In the case15
described in clause (i)(II), the Commis-16
sioner shall permit the individual to con-17
tinue treatment under subparagraph (A)18
  until such limited time as the Commis-19
sioner determines it is administratively fea-20
sible, consistent with minimizing disruption21
in the individual’s access to health care.22
(e) EMPLOYERS.—23
graph (4), smallest employers described in this para-2
graph are employers with 10 or fewer employees.3
(2) SMALLER EMPLOYERS.—Subject to para-4
graph (4), smaller employers described in this para-5
graph are employers that are not smallest employers6
described in paragraph (1) and have 20 or fewer em-7
ployees.8
(A) IN GENERAL.—Beginning with Y3, the10
Commissioner may permit employers not de-11
scribed in paragraph (1) or (2) to be Exchange-12
eligible employers.13
(A), the Commissioner may phase-in the appli-15
cation of such subparagraph based on the num-16
  ber of full-time employees of an employer and17
such other considerations as the Commissioner18
deems appropriate.19
ployer is permitted to be an Exchange-eligible em-21
ployer under this subsection and enrolls employees22
through the Health Insurance Exchange, the em-23
ployer shall continue to be treated as an Exchange-24
eligible employer for each subsequent plan year re-25
 
and until the employer meets the requirement of sec-2
tion 311(a) through paragraph (1) of such section3
  by offering a group health plan and not through of-4
fering an Exchange-participating health benefits5
plan.6
TIONS.—8
SIBILITY.—For any year in which an employer10
is an Exchange-eligible employer, such employer11
may meet the requirements of section 312 with12
respect to employees of such employer by offer-13
ing such employees the option of enrolling with14
Exchange-participating health benefits plans15
sistent with the provisions of subtitle B of title17
III.18
offered Exchange-participating health benefits20
subparagraph (A) may choose coverage under22
any such plan. That choice includes, with re-23
spect to family coverage, coverage of the de-24
pendents of such employee.25
(6) A FFILIATED GROUPS.—Any employer which1
is part of a group of employers who are treated as2
a single employer under subsection (b), (c), (m), or3
(o) of section 414 of the Internal Revenue Code of 4
1986 shall be treated, for purposes of this subtitle,5
as a single employer.6
sioner shall establish rules relating to how employees8
are counted for purposes of carrying out this sub-9
section.10
sioner shall have the authority to establish such rules as12
may be necessary to deal with special situations with re-13
gard to uninsured individuals and employers participating14
as Exchange-eligible individuals and employers, such as15
transition periods for individuals and employers who gain,16
or lose, Exchange-eligible participation status, and to es-17
tablish grace periods for premium payment.18
(g) SURVEYS OF INDIVIDUALS AND EMPLOYERS.—19
The Commissioner shall provide for periodic surveys of 20
Exchange-eligible individuals and employers concerning21
satisfaction of such individuals and employers with the22
Health Insurance Exchange and Exchange-participat