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7Sec. 321. Establishment and administration of a public health insurance optionas an Exchange-qualified health benefits plan.Sec. 322. Premiums and financing.Sec. 323. Payment rates for items and services.Sec. 324. Modernized payment initiatives and delivery system reform.Sec. 325. Provider participation.Sec. 326. Application of fraud and abuse provisions.Sec. 327. Application of HIPAA insurance requirements.Sec. 328. Application of health information privacy, security, and electronictransaction requirements.Sec. 329. Enrollment in public health insurance option is voluntary.Sec. 330. Enrollment in public health insurance option by Members of Congress.Sec. 331. Reimbursement of Secretary of Veterans Affairs.Subtitle C—Individual Affordability .345.346.347.Availability through Health Insurance Exchange.Affordable credit eligible individual.Affordability premium credit.Affordability cost-sharing credit.Income determinations.Special rules for application to territories.No Federal payment for undocumented aliens.TITLE IV—SHARED RESPONSIBILITYSubtitle A—Individual ResponsibilitySec. 401. Individual responsibility.Subtitle B—Employer ResponsibilityPART 1—HEALTH COVERAGE PARTICIPATION REQUIREMENTSSec. 411. Health coverage participation requirements.Sec. 412. Employer responsibility to contribute toward employee and dependentcoverage.Sec. 413. Employer contributions in lieu of coverage.Sec. 414. Authority related to improper steering.Sec. 415. Impact study on employer responsibility requirements.Sec. 416. Study on employer hardship exemption.rmajette on DSK29S0YB1PROD with BILLSPART 2—SATISFACTIONOF HEALTH COVERAGE PARTICIPATIONREQUIREMENTSSec. 421. Satisfaction of health coverage participation requirements under theEmployee Retirement Income Security Act of 1974.Sec. 422. Satisfaction of health coverage participation requirements under theInternal Revenue Code of 1986.Sec. 423. Satisfaction of health coverage participation requirements under thePublic Health Service Act.Sec. 424. Additional rules relating to health coverage participation requirements.TITLE V—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986Subtitle A—Provisions Relating to Health Care Reform HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00007Fmt 6652Sfmt 6211E:\BILLS\H3962.IHH3962

8PART 1—SHARED RESPONSIBILITYSUBPART A—INDIVIDUAL RESPONSIBILITYSec. 501. Tax on individuals without acceptable health care coverage.SUBPART B—EMPLOYER RESPONSIBILITYSec. 511. Election to satisfy health coverage participation requirements.Sec. 512. Health care contributions of nonelecting employers.PART 2—CREDITFORSMALL BUSINESS EMPLOYEE HEALTH COVERAGEEXPENSESSec. 521. Credit for small business employee health coverage expenses.PART 3—LIMITATIONSONHEALTH CARE RELATED EXPENDITURESSec. 531. Distributions for medicine qualified only if for prescribed drug or insulin.Sec. 532. Limitation on health flexible spending arrangements under cafeteriaplans.Sec. 533. Increase in penalty for nonqualified distributions from health savingsaccounts.Sec. 534. Denial of deduction for federal subsidies for prescription drug planswhich have been excluded from gross income.PART 4—OTHER PROVISIONSTOCARRY OUT HEALTH INSURANCE REFORMSec. 541. Disclosures to carry out health insurance exchange subsidies.Sec. 542. Offering of exchange-participating health benefits plans through cafeteria plans.Sec. 543. Exclusion from gross income of payments made under reinsuranceprogram for retirees.Sec. 544. CLASS program treated in same manner as long-term care insurance.Sec. 545. Exclusion from gross income for medical care provided for Indians.Subtitle B—Other Revenue ProvisionsPART 1—GENERAL e on high income individuals.Excise tax on medical devices.Expansion of information reporting requirements.Delay in application of worldwide allocation of interest.PART 2—PREVENTIONOFTAX AVOIDANCErmajette on DSK29S0YB1PROD with BILLSSec. 561. Limitation on treaty benefits for certain deductible payments.Sec. 562. Codification of economic substance doctrine; penalties.Sec. 563. Certain large or publicly traded persons made subject to a more likelythan not standard for avoiding penalties on underpayments.PART 3—PARITYINHEALTH BENEFITSSec. 571. Certain health related benefits applicable to spouses and dependentsextended to eligible beneficiaries. HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00008Fmt 6652Sfmt 6211E:\BILLS\H3962.IHH3962

91(c) GENERAL DEFINITIONS.—Except as otherwise2 provided, in this division:3(1) ACCEPTABLEceptable coverage’’ has the meaning given such term5in section 302(d)(2).6(2) BASIC910PLAN.—Theterm ‘‘basic plan’’ hasthe meaning given such term in section ner’’ means the Health Choices Commissioner established under section 241.11(4) COST-SHARING.—The term ‘‘cost-sharing’’12includes deductibles, coinsurance, copayments, and13similar charges, but does not include premiums, bal-14ance billing amounts for non-network providers, or15spending for non-covered services.16(5) DEPENDENT.—The term ‘‘dependent’’ has17the meaning given such term by the Commissioner18and includes a spouse.1920(6) EMPLOYMENT-BASEDHEALTH PLAN.—Theterm ‘‘employment-based health plan’’—21(A) means a group health plan (as defined22in section 733(a)(1) of the Employee Retire-23ment Income Security Act of 1974);24(B) includes such a plan that is the fol-25lowing: HR 3962 IHVerDate Nov 24 2008term ‘‘ac-47rmajette on DSK29S0YB1PROD with BILLSCOVERAGE.—The12:56 Oct 30, 2009Jkt 089200PO 00000Frm 00009Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

101(i) FEDERAL,ANDGOVERNMENTAL PLANS.—A3plan (as defined in section 3(32) of the4Employee Retirement Income Security Act5of 1974), including a health benefits plan6offered under chapter 89 of title 5, United7States Code.(ii) CHURCHgovernmentalPLANS.—Achurch plan9(as defined in section 3(33) of the Em-10ployee Retirement Income Security Act of111974); and12(C) excludes coverage described in section13302(d)(2)(E) (relating to TRICARE).14(7) ENHANCEDPLAN.—Theterm ‘‘enhanced15plan’’ has the meaning given such term in section16303(c).17(8) ESSENTIALBENEFITS PACKAGE.—Theterm18‘‘essential benefits package’’ is defined in section19222(a).20(9) EXCHANGE-PARTICIPATINGHEALTH BENE-21FITS22health benefits plan’’ means a qualified health bene-23fits plan that is offered through the Health Insur-24ance Exchange and may be purchased directly fromPLAN.—Theterm‘‘Exchange-participating HR 3962 IHVerDate Nov 24 2008TRIBAL28rmajette on DSK29S0YB1PROD with BILLSSTATE,12:56 Oct 30, 2009Jkt 089200PO 00000Frm 00010Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

111the entity offering the plan or through enrollment2agents and brokers.3(10) FAMILY.—The term ‘‘family’’ means an4individual and includes the individual’s dependents.5(11) FEDERALLEVEL;FPL.—The6terms ‘‘Federal poverty level’’ and ‘‘FPL’’ have the7meaning given the term ‘‘poverty line’’ in section8673(2) of the Community Services Block Grant Act9(42 U.S.C. 9902(2)), including any revision required10by such section.11(12) HEALTHBENEFITSPLAN.—The‘‘health benefits plan’’ means health insurance cov-13erage and an employment-based health plan and in-14cludes the public health insurance option.(13) HEALTHINSURANCECOVERAGE.—The16term ‘‘health insurance coverage’’ has the meaning17given such term in section 2791 of the Public18Health Service Act, but does not include coverage in19relation to its provision of excepted benefits—20(A) described in paragraph (1) of sub-21section (c) of such section; or22(B) described in paragraph (2), (3), or (4)23of such subsection if the benefits are provided24under a separate policy, certificate, or contract25of insurance. HR 3962 IHVerDate Nov 24 2008term1215rmajette on DSK29S0YB1PROD with BILLSPOVERTY12:56 Oct 30, 2009Jkt 089200PO 00000Frm 00011Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

121(14) HEALTH‘‘health insurance issuer’’ has the meaning given3such term in section 2791(b)(2) of the Public Health4Service Act.(15) HEALTHINSURANCEEXCHANGE.—The6term ‘‘Health Insurance Exchange’’ means the7Health Insurance Exchange established under sec-8tion 301.9(16) INDIAN.—The term ‘‘Indian’’ has the10meaning given such term in section 4 of the Indian11Health Care Improvement Act (24 U.S.C. 1603).12(17) INDIANHEALTH CARE PROVIDER.—The13term ‘‘Indian health care provider’’ means a health14care program operated by the Indian Health Service,15an Indian tribe, tribal organization, or urban Indian16organization as such terms are defined in section 417of the Indian Health Care Improvement Act (2518U.S.C. 1603).19(18) MEDICAID.—The term ‘‘Medicaid’’ means20a State plan under title XIX of the Social Security21Act (whether or not the plan is operating under a22waiver under section 1115 of such Act).2324(19) MEDICAIDELIGIBLEINDIVIDUAL.—Theterm ‘‘Medicaid eligible individual’’ means an indi- HR 3962 IHVerDate Nov 24 2008term25rmajette on DSK29S0YB1PROD with BILLSINSURANCE ISSUER.—The12:56 Oct 30, 2009Jkt 089200PO 00000Frm 00012Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

131vidual who is eligible for medical assistance under2Medicaid.3(20) MEDICARE.—The term ‘‘Medicare’’ means4the health insurance programs under title XVIII of5the Social Security Act.6(21) PLANterm ‘‘plan spon-7sor’’ has the meaning given such term in section83(16)(B) of the Employee Retirement Income Secu-9rity Act of 1974.10(22) PLAN11YEAR.—Theterm ‘‘plan year’’means—12(A) with respect to an employment-based13health plan, a plan year as specified under such14plan; or15(B) with respect to a health benefits plan16other than an employment-based health plan, a1712-month period as specified by the Commis-18sioner.19(23) PREMIUMPLAN; PREMIUM-PLUS PLAN.—20The terms ‘‘premium plan’’ and ‘‘premium-plus21plan’’ have the meanings given such terms in section22303(c).23rmajette on DSK29S0YB1PROD with BILLSSPONSOR.—The(24) QHBPOFFERING ENTITY.—The24‘‘QHBP offering entity’’ means, with respect to a25health benefits plan that is— HR 3962 IHVerDate Nov 24 2008terms12:56 Oct 30, 2009Jkt 089200PO 00000Frm 00013Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

141(A) a group health plan (as defined, sub-2ject to subsection (d), in section 733(a)(1) of3the Employee Retirement Income Security Act4of 1974), the plan sponsor in relation to such5group health plan, except that, in the case of a6plan maintained jointly by 1 or more employers7and 1 or more employee organizations and with8respect to which an employer is the primary9source of financing, such term means such em-10ployer;11(B) health insurance coverage, the health12insurance issuer offering the coverage;13(C) the public health insurance option, thermajette on DSK29S0YB1PROD with BILLS14Secretary of Health and Human Services;15(D) a non-Federal governmental plan (as16defined in section 2791(d) of the Public Health17Service Act), the State or political subdivision18of a State (or agency or instrumentality of such19State or subdivision) which establishes or main-20tains such plan; or21(E) a Federal governmental plan (as de-22fined in section 2791(d) of the Public Health23Service Act), the appropriate Federal official. HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00014Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

151(25) QUALIFIED2The term ‘‘qualified health benefits plan’’ means a3health benefits plan that—4(A) meets the requirements for such a plan5under title II and includes the public health in-6surance option; and7(B) is offered by a QHBP offering entity8that meets the applicable requirements of such9title with respect to such plan.10(26) PUBLICHEALTH INSURANCE OPTION.—11The term ‘‘public health insurance option’’ means12the public health insurance option as provided under13subtitle B of title III.14rmajette on DSK29S0YB1PROD with BILLSHEALTH BENEFITS PLAN.—(27) SERVICEAREA; PREMIUM RATING AREA.—15The terms ‘‘service area’’ and ‘‘premium rating16area’’ mean with respect to health insurance cov-17erage—18(A) offered other than through the Health19Insurance Exchange, such an area as estab-20lished by the QHBP offering entity of such cov-21erage in accordance with applicable State law;22and23(B) offered through the Health Insurance24Exchange, such an area as established by such25entity in accordance with applicable State law HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00015Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

161and applicable rules of the Commissioner for2Exchange-participating health benefits plans.3(28) STATE.—The term ‘‘State’’ means the 504States and the District of Columbia and includes—5(A) for purposes of title I, Puerto Rico, the6Virgin Islands, Guam, American Samoa, and7the Northern Mariana Islands; and8(B) for purposes of titles II and III, as9elected under and subject to section 346, Puer-10to Rico, the Virgin Islands, Guam, American11Samoa, and the Northern Mariana Islands.12(29) STATEAGENCY.—Theterm13‘‘State Medicaid agency’’ means, with respect to a14Medicaid plan, the single State agency responsible15for administering such plan under title XIX of the16Social Security Act.17(30) Y1,Y2, ETC.—Theterms ‘‘Y1’’, ‘‘Y2’’,18‘‘Y3’’, ‘‘Y4’’, ‘‘Y5’’, and similar subsequently num-19bered terms, mean 2013 and subsequent years, re-20spectively.TITLE I—IMMEDIATE REFORMS2122SEC. 101. NATIONAL HIGH-RISK POOL PROGRAM.23rmajette on DSK29S0YB1PROD with BILLSMEDICAID(a) IN GENERAL.—The Secretary of Health and24 Human Services (in this section referred to as the ‘‘Sec25 retary’’) shall establish a temporary national high-risk HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00016Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

171 pool program (in this section referred to as the ‘‘pro2 gram’’) to provide health benefits to eligible individuals3 during the period beginning on January 1, 2010, and, sub4 ject to subsection (h)(3)(B), ending on the date on which5 the Health Insurance Exchange is established.6(b) ADMINISTRATION.—The Secretary may carry out7 this section directly or, pursuant to agreements, grants,8 or contracts with States, through State high-risk pool pro9 grams provided that the requirements of this section are10 met.11(c) ELIGIBILITY.—For purposes of this section, the12 term ‘‘eligible individual’’ means an individual—13(1) who—14(A) is not eligible for—15(i) benefits under title XVIII, XIX, orrmajette on DSK29S0YB1PROD with BILLS16XXI of the Social Security Act; or17(ii) coverage under an employment-18based health plan (not including coverage19under a COBRA continuation provision, as20defined in section 107(d)(1)); and21(B) who—22(i) is an eligible individual under sec-23tion 2741(b) of the Public Health Service24Act; or HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00017Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

181(ii) is medically eligible for the pro-2gram by virtue of being an individual de-3scribed in subsection (d) at any time dur-4ing the 6-month period ending on the date5the individual applies for high-risk pool6coverage under this section;78(2) who is the spouse or dependent of an individual who is described in paragraph (1); or9(3) who has not had health insurance coverage10or coverage under an employment-based health plan11for at least the 6-month period immediately pre-12ceding the date of the individual’s application for13high-risk pool coverage under this section.14 For purposes of paragraph (1)(A)(ii), a person who is in15 a waiting period as defined in section 2701(b)(4) of the16 Public Health Service Act shall not be considered to be17 eligible for coverage under an employment-based health18 plan.19(d) MEDICALLY ELIGIBLE REQUIREMENTS.—For20 purposes of subsection (c)(1)(B)(ii), an individual de-rmajette on DSK29S0YB1PROD with BILLS21 scribed in this subsection is an individual—22(1) who, during the 6-month period ending on23the date the individual applies for high-risk pool cov-24erage under this section applied for individual health25insurance coverage and— HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00018Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

191(A) was denied such coverage because of a2preexisting condition or health status; or3(B) was offered such coverage—4(i) under terms that limit the cov-5erage for such a preexisting condition; or6(ii) at a premium rate that is above7the premium rate for high risk pool cov-8erage under this section; or910(2) who has an eligible medical condition as defined by the Secretary.11 In making a determination under paragraph (1) of wheth12 er an individual was offered individual coverage at a pre13 mium rate above the premium rate for high risk pool cov14 erage, the Secretary shall make adjustments to offset dif15 ferences in premium rating that are attributable solely to16 differences in age rating.17(e) ENROLLMENT.—To enroll in coverage in the pro-rmajette on DSK29S0YB1PROD with BILLS18 gram, an individual shall—19(1) submit to the Secretary an application for20participation in the program, at such time, in such21manner, and containing such information as the Sec-22retary shall require;23(2) attest that the individual is an eligible indi-24vidual and is a resident of one of the 50 States or25the District of Columbia; and HR 3962 IHVerDate Nov 24 200812:56 Oct 30, 2009Jkt 089200PO 00000Frm 00019Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

201(3) if the individual had other prior health in-2surance coverage or coverage under an employment-3based health plan during the previous 6 months,4provide information as to the nature and source of5such coverage and reasons for its discontinuance.6(f) PROTECTION AGAINST DUMPING RISKS7rmajette on DSK29S0YB1PROD with BILLSIN-SURERS.—8(1) INGENERAL.—TheSecretary shall establish9criteria for determining whether health insurance10issuers and employment-based health plans have dis-11couraged an individual from remaining enrolled in12prior coverage based on that individual’s health sta-13tus.14(2) SANCTIONS.—An issuer or employment-15based health plan shall be responsible for reimburs-16ing the program for the medical expenses incurred17by the program for an individual who, based on cri-18teria established by the Secretary, the Secretary19finds was encouraged by the issuer to disenroll from20health benefits coverage prior to enrolling in the pro-21gram. The criteria shall include at least the fol-22lowing circumstances:23(A) In the case of prior coverage obtained24through an employer, the provision by the em-25ployer, group health plan, or the issuer of HR 3962 IHVerDate Nov 24 2008BY12:56 Oct 30, 2009Jkt 089200PO 00000Frm 00020Fmt 6652Sfmt 6201E:\BILLS\H3962.IHH3962

rmajette on DSK29S0YB1PROD with BILLS211money or other financial consideration fo

division d—indian health care improvement title i—amendments to indian laws title ii—improvement of indian health care provided under the social security act 1 division a—affordable 2 health care choices 3 sec. 100. purpose; table of contents of division; 4 general definitions. 5 (a) purpose.— 6 (1) in general.—the purpose of this .