COVERAGE.

(a) GRANDFATHERED HEALTH INSURANCE COVERAGE DEFINED.—Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term ‘‘grandfathered health insurance coverage’’ means individual health insurance coverage that is offered and in force and effect before the first day of Y1 if the following conditions are met:

(1)

LIMITATION ON NEW ENROLLMENT.—

(A)

IN GENERAL.—Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

(B)

DEPENDENT COVERAGE PERMITTED.—Subparagraph (A) shall not affect the subsequent enrollment of a dependent of an individual who is covered as of such first day.

(2) LIMITATION ON CHANGES IN TERMS OR CONDITIONS.—Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.

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1 (3) RESTRICTIONS ON PREMIUM INCREASES.— 2 The issuer cannot vary the percentage increase in 3 the premium for a risk group of enrollees in specific 4 grandfathered health insurance coverage without 5 changing the premium for all enrollees in the same 6 risk group at the same rate, as specified by the 7 Commissioner. 8 (b) GRACE PERIOD FOR CURRENT EMPLOYMENT-9 BASED HEALTH PLANS.— 10 (1) GRACE PERIOD.— 11 (A) IN GENERAL.—The Commissioner 12 shall establish a grace period whereby, for plan 13 years beginning after the end of the 5-year pe14 riod beginning with Y1, an employment-based 15 health plan in operation as of the day before 16 the first day of Y1 must meet the same require17 ments as apply to a qualified health benefits 18 plan under section 101, including the essential 19 benefit package requirement under section 121. 20 (B) EXCEPTION FOR LIMITED BENEFITS 21 PLANS.—Subparagraph (A) shall not apply to 22 an employment-based health plan in which the 23 coverage consists only of one or more of the fol24 lowing:

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1 (i) Any coverage described in section 2 3001(a)(1)(B)(ii)(IV) of division B of the 3 American Recovery and Reinvestment Act 4 of 2009 (Public Law 111–5). 5 (ii) Excepted benefits (as defined in 6 section 733(c) of the Employee Retirement 7 Income Security Act of 1974), including 8 coverage under a specified disease or ill9 ness policy described in paragraph (3)(A) 10 of such section. 11 (iii) Such other limited benefits as the 12 Commissioner may specify. 13 In no case shall an employment-based health 14 plan in which the coverage consists only of one 15 or more of the coverage or benefits described in 16 clauses (i) through (iii) be treated as acceptable 17 coverage under this division 18 (2) TRANSITIONAL TREATMENT AS ACCEPT19 ABLE COVERAGE.—During the grace period specified 20 in paragraph (1)(A), an employment-based health 21 plan that is described in such paragraph shall be 22 treated as acceptable coverage under this division. 23 (c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE 24 COVERAGE.—

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1 (1) IN GENERAL.—Individual health insurance 2 coverage that is not grandfathered health insurance 3 coverage under subsection (a) may only be offered 4 on or after the first day of Y1 as an Exchange-participating health benefits plan. 6 (2) SEPARATE, EXCEPTED COVERAGE PER7 MITTED.—Excepted benefits (as defined in section 8 2791(c) of the Public Health Service Act) are not 9 included within the definition of health insurance coverage. Nothing in paragraph (1) shall prevent the 11 offering, other than through the Health Insurance 12 Exchange, of excepted benefits so long as it is of13 fered and priced separately from health insurance 14 coverage.

3 SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR IN

4 SURED PLANS.

5 The requirements of sections 2711 (other than sub

6 sections (c) and (e)) and 2712 (other than paragraphs (3),

7 and (6) of subsection (b) and subsection (e)) of the Public

8 Health Service Act, relating to guaranteed availability and

9 renewability of health insurance coverage, shall apply to 10 individuals and employers in all individual and group 11 health insurance coverage, whether offered to individuals 12 or employers through the Health Insurance Exchange, 13 through any employment-based health plan, or otherwise, 14 in the same manner as such sections apply to employers 15 and health insurance coverage offered in the small group 16 market, except that such section 2712(b)(1) shall apply 17 only if, before nonrenewal or discontinuation of coverage, 18 the issuer has provided the enrollee with notice of non-19 payment of premiums and there is a grace period during 20 which the enrollees has an opportunity to correct such 21 nonpayment. Rescissions of such coverage shall be prohib22 ited except in cases of fraud as defined in sections 23 2712(b)(2) of such Act.

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SEC. 113. INSURANCE RATING RULES.

(a) IN GENERAL.—The premium rate charged for an insured qualified health benefits plan may not vary except as follows:

(1)

LIMITED AGE VARIATION PERMITTED.—By age (within such age categories as the Commissioner shall specify) so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 2 to 1.

(2)

BY AREA.—By premium rating area (as permitted by State insurance regulators or, in the case of Exchange-participating health benefits plans, as specified by the Commissioner in consultation with such regulators).

(3)

BY FAMILY ENROLLMENT.—By family enrollment (such as variations within categories and compositions of families) so long as the ratio of the premium for family enrollment (or enrollments) to the premium for individual enrollment is uniform, as specified under State law and consistent with rules of the Commissioner.

(b)

STUDY AND REPORTS.—

(1)

STUDY.—The Commissioner, in coordination with the Secretary of Health and Human Services and the Secretary of Labor, shall conduct a study of the large group insured and self-insured

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1 employer health care markets. Such study shall ex2 amine the following: 3 (A) The types of employers by key charac4 teristics, including size, that purchase insured products versus those that self-insure. 6 (B) The similarities and differences be7 tween typical insured and self-insured health 8 plans. 9 (C) The financial solvency and capital reserve levels of employers that self-insure by em11 ployer size. 12 (D) The risk of self-insured employers not 13 being able to pay obligations or otherwise be14 coming financially insolvent.

(E) The extent to which rating rules are 16 likely to cause adverse selection in the large 17 group market or to encourage small and mid 18 size employers to self-insure 19 (2) REPORTS.—Not later than 18 months after the date of the enactment of this Act, the Commis21 sioner shall submit to Congress and the applicable 22 agencies a report on the study conducted under 23 paragraph (1). Such report shall include any rec24 ommendations the Commissioner deems appropriate to ensure that the law does not provide incentives

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1 for small and mid-size employers to self-insure or 2 create adverse selection in the risk pools of large 3 group insurers and self-insured employers. Not later 4 than 18 months after the first day of Y1, the Commissioner shall submit to Congress and the applica6 ble agencies an updated report on such study, in7 cluding updates on such recommendations. 8 SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN 9 MENTAL HEALTH AND SUBSTANCE ABUSE DISORDER BENEFITS.

11 (a) NONDISCRIMINATION IN BENEFITS.—A qualified 12 health benefits plan shall comply with standards estab13 lished by the Commissioner to prohibit discrimination in 14 health benefits or benefit structures for qualifying health benefits plans, building from sections 702 of Employee 16 Retirement Income Security Act of 1974, 2702 of the 17 Public Health Service Act, and section 9802 of the Inter18 nal Revenue Code of 1986. 19 (b) PARITY IN MENTAL HEALTH AND SUBSTANCE ABUSE DISORDER BENEFITS.—To the extent such provi21 sions are not superceded by or inconsistent with subtitle 22 C, the provisions of section 2705 (other than subsections 23 (a)(1), (a)(2), and (c)) of section 2705 of the Public 24 Health Service Act shall apply to a qualified health benefits plan, regardless of whether it is offered in the indi

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1 vidual or group market, in the same manner as such provi2 sions apply to health insurance coverage offered in the 3 large group market. 4 SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS. 5 (a) IN GENERAL.—A qualified health benefits plan 6 that uses a provider network for items and services shall 7 meet such standards respecting provider networks as the 8 Commissioner may establish to assure the adequacy of 9 such networks in ensuring enrollee access to such items 10 and services and transparency in the cost-sharing differen11 tials between in-network coverage and out-of-network cov12 erage. 13 (b) PROVIDER NETWORK DEFINED.—In this divi14 sion, the term ‘‘provider network’’ means the providers 15 with respect to which covered benefits, treatments, and 16 services are available under a health benefits plan. 17 SEC. 116. ENSURING VALUE AND LOWER PREMIUMS. 18 (a) IN GENERAL.—A qualified health benefits plan 19 shall meet a medical loss ratio as defined by the Commis20 sioner. For any plan year in which the qualified health 21 benefits plan does not meet such medical loss ratio, QHBP 22 offering entity shall provide in a manner specified by the 23 Commissioner for rebates to enrollees of payment suffi24 cient to meet such loss ratio.

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1 (b) BUILDING ON INTERIM RULES.—In imple2 menting subsection (a), the Commissioner shall build on 3 the definition and methodology developed by the Secretary 4 of Health and Human Services under the amendments made by section 161 for determining how to calculate the 6 medical loss ratio. Such methodology shall be set at the 7 highest level medical loss ratio possible that is designed 8 to ensure adequate participation by QHBP offering enti9 ties, competition in the health insurance market in and out of the Health Insurance Exchange, and value for con11 sumers so that their premiums are used for services. 12 Subtitle C—Standards Guaran13 teeing Access to Essential Bene14 fits

SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.

16 (a) IN GENERAL.—A qualified health benefits plan 17 shall provide coverage that at least meets the benefit 18 standards adopted under section 124 for the essential ben19 efits package described in section 122 for the plan year involved. 21 (b) CHOICE OF COVERAGE.— 22 (1) NON-EXCHANGE-PARTICIPATING HEALTH 23 BENEFITS PLANS.—In the case of a qualified health 24 benefits plan that is not an Exchange-participating health benefits plan, such plan may offer such cov

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1 erage in addition to the essential benefits package as 2 the QHBP offering entity may specify. 3 (2) EXCHANGE-PARTICIPATING HEALTH BENE4 FITS PLANS.—In the case of an Exchange-partici5 pating health benefits plan, such plan is required 6 under section 203 to provide specified levels of bene7 fits and, in the case of a plan offering a premium-8 plus level of benefits, provide additional benefits. 9 (3) CONTINUATION OF OFFERING OF SEPARATE 10 EXCEPTED BENEFITS COVERAGE.—Nothing in this 11 division shall be construed as affecting the offering 12 of health benefits in the form of excepted benefits 13 (described in section 102(b)(1)(B)(ii)) if such bene14 fits are offered under a separate policy, contract, or 15 certificate of insurance. 16 (c) NO RESTRICTIONS ON COVERAGE UNRELATED 17 TO CLINICAL APPROPRIATENESS.—A qualified health ben18 efits plan may not impose any restriction (other than cost-19 sharing) unrelated to clinical appropriateness on the cov20 erage of the health care items and services. 21 SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED. 22 (a) IN GENERAL.—In this division, the term ‘‘essen23 tial benefits package’’ means health benefits coverage, 24 consistent with standards adopted under section 124 to

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1 ensure the provision of quality health care and financial 2 security, that— 3 (1) provides payment for the items and services 4 described in subsection (b) in accordance with gen5 erally accepted standards of medical or other appro6 priate clinical or professional practice; 7 (2) limits cost-sharing for such covered health 8 care items and services in accordance with such ben9 efit standards, consistent with subsection (c); 10 (3) does not impose any annual or lifetime limit 11 on the coverage of covered health care items and 12 services; 13 (4) complies with section 115(a) (relating to 14 network adequacy); and 15 (5) is equivalent, as certified by Office of the 16 Actuary of the Centers for Medicare & Medicaid 17 Services, to the average prevailing employer-spon18 sored coverage. 19 (b) MINIMUM SERVICES TO BE COVERED.—The 20 items and services described in this subsection are the fol21 lowing: 22 (1) Hospitalization. 23 (2) Outpatient hospital and outpatient clinic 24 services, including emergency department services.

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1 (3) Professional services of physicians and other 2 health professionals. 3 (4) Such services, equipment, and supplies inci4 dent to the services of a physician’s or a health professional’s delivery of care in institutional settings, 6 physician offices, patients’ homes or place of resi7 dence, or other settings, as appropriate. 8 (5) Prescription drugs. 9 (6) Rehabilitative and habilitative services.

(7) Mental health and substance use disorder 11 services. 12 (8) Preventive services, including those services 13 recommended with a grade of A or B by the Task 14 Force on Clinical Preventive Services and those vaccines recommended for use by the Director of the 16 Centers for Disease Control and Prevention. 17 (9) Maternity care. 18 (10) Well baby and well child care and oral 19 health, vision, and hearing services, equipment, and supplies at least for children under 21 years of age. 21 (c) REQUIREMENTS RELATING TO COST-SHARING 22 AND MINIMUM ACTUARIAL VALUE.— 23 (1) NO COST-SHARING FOR PREVENTIVE SERV24 ICES.—There shall be no cost-sharing under the essential benefits package for preventive items and

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1 services (as specified under the benefit standards), 2 including well baby and well child care. 3 (2) ANNUAL LIMITATION.— 4 (A) ANNUAL LIMITATION.—The cost-sharing incurred under the essential benefits pack6 age with respect to an individual (or family) for 7 a year does not exceed the applicable level spec8 ified in subparagraph (B). 9 (B) APPLICABLE LEVEL.—The applicable level specified in this subparagraph for Y1 is 11 $5,000 for an individual and $10,000 for a 12 family. Such levels shall be increased (rounded 13 to the nearest $100) for each subsequent year 14 by the annual percentage increase in the Consumer Price Index (United States city average) 16 applicable to such year. 17 (C) USE OF COPAYMENTS.—In establishing 18 cost-sharing levels for basic, enhanced, and pre19 mium plans under this subsection, the Secretary shall, to the maximum extent possible, 21 use only copayments and not coinsurance. 22 (3) MINIMUM ACTUARIAL VALUE.— 23 (A) IN GENERAL.—The cost-sharing under 24 the essential benefits package shall be designed to provide a level of coverage that is designed

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1 to provide benefits that are actuarially equiva2 lent to approximately 70 percent of the full ac3 tuarial value of the benefits provided under the 4 reference benefits package described in sub5 paragraph (B). 6 (B) REFERENCE BENEFITS PACKAGE DE7 SCRIBED.—The reference benefits package de8 scribed in this subparagraph is the essential 9 benefits package if there were no cost-sharing 10 imposed. 11 SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE. 12 (a) ESTABLISHMENT.— 13 (1) IN GENERAL.—There is established a pri14 vate-public advisory committee which shall be a 15 panel of medical and other experts to be known as 16 the Health Benefits Advisory Committee to rec17 ommend covered benefits and essential, enhanced, 18 and premium plans. 19 (2) CHAIR.—The Surgeon General shall be a 20 member and the chair of the Health Benefits Advi21 sory Committee. 22 (3) MEMBERSHIP.—The Health Benefits Advi23 sory Committee shall be composed of the following 24 members, in addition to the Surgeon General:

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1 (A) 9 members who are not Federal em2 ployees or officers and who are appointed by 3 the President. 4 (B) 9 members who are not Federal employees or officers and who are appointed by 6 the Comptroller General of the United States in 7 a manner similar to the manner in which the 8 Comptroller General appoints members to the 9 Medicare Payment Advisory Commission under section 1805(c) of the Social Security Act. 11 (C) Such even number of members (not to 12 exceed 8) who are Federal employees and offi13 cers, as the President may appoint. 14 Such initial appointments shall be made not later than 60 days after the date of the enactment of this 16 Act. 17 (4) TERMS.—Each member of the Health Bene18 fits Advisory Committee shall serve a 3-year term on 19 the Committee, except that the terms of the initial members shall be adjusted in order to provide for a 21 staggered term of appointment for all such mem22 bers. 23 (5) PARTICIPATION.—The membership of the 24 Health Benefits Advisory Committee shall at least reflect providers, consumer representatives, employ

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1 ers, labor, health insurance issuers, experts in health 2 care financing and delivery, experts in racial and 3 ethnic disparities, experts in care for those with dis4 abilities, representatives of relevant governmental agencies. and at least one practicing physician or 6 other health professional and an expert on children’s 7 health and shall represent a balance among various 8 sectors of the health care system so that no single 9 sector unduly influences the recommendations of such Committee. 11 (b) DUTIES.— 12 (1) RECOMMENDATIONS ON BENEFIT STAND13 ARDS.—The Health Benefits Advisory Committee 14 shall recommend to the Secretary of Health and Human Services (in this subtitle referred to as the 16 ‘‘Secretary’’) benefit standards (as defined in para17 graph (4)), and periodic updates to such standards. 18 In developing such recommendations, the Committee 19 shall take into account innovation in health care and consider how such standards could reduce health dis21 parities. 22 (2) DEADLINE.—The Health Benefits Advisory 23 Committee shall recommend initial benefit standards 24 to the Secretary not later than 1 year after the date of the enactment of this Act.

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1 (3) PUBLIC INPUT.—The Health Benefits Advi2 sory Committee shall allow for public input as a part 3 of developing recommendations under this sub4 section.

(4) BENEFIT STANDARDS DEFINED.—In this 6 subtitle, the term ‘‘benefit standards’’ means stand7 ards respecting— 8 (A) the essential benefits package de9 scribed in section 122, including categories of covered treatments, items and services within 11 benefit classes, and cost-sharing; and 12 (B) the cost-sharing levels for enhanced 13 plans and premium plans (as provided under 14 section 203(c)) consistent with paragraph (5).

(5) LEVELS OF COST-SHARING FOR ENHANCED 16 AND PREMIUM PLANS.— 17 (A) ENHANCED PLAN.—The level of cost-18 sharing for enhanced plans shall be designed so 19 that such plans have benefits that are actuarially equivalent to approximately 85 percent of 21 the actuarial value of the benefits provided 22 under the reference benefits package described 23 in section 122(c)(3)(B). 24 (B) PREMIUM PLAN.—The level of cost-sharing for premium plans shall be designed so

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1 that such plans have benefits that are actuari2 ally equivalent to approximately 95 percent of 3 the actuarial value of the benefits provided 4 under the reference benefits package described 5 in section 122(c)(3)(B). 6 (c) OPERATIONS.— 7 (1) PER DIEM PAY.—Each member of the 8 Health Benefits Advisory Committee shall receive 9 travel expenses, including per diem in accordance 10 with applicable provisions under subchapter I of 11 chapter 57 of title 5, United States Code, and shall 12 otherwise serve without additional pay. 13 (2) MEMBERS NOT TREATED AS FEDERAL EM14 PLOYEES.—Members of the Health Benefits Advi15 sory Committee shall not be considered employees of 16 the Federal government solely by reason of any serv17 ice on the Committee. 18 (3) APPLICATION OF FACA.—The Federal Advi19 sory Committee Act (5 U.S.C. App.), other than sec20 tion 14, shall apply to the Health Benefits Advisory 21 Committee. 22 (d) PUBLICATION.—The Secretary shall provide for 23 publication in the Federal Register and the posting on the 24 Internet website of the Department of Health and Human

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1 Services of all recommendations made by the Health Ben2 efits Advisory Committee under this section. 3 SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDA4 TIONS; ADOPTION OF BENEFIT STANDARDS.

(a) PROCESS FOR ADOPTION OF RECOMMENDA6 TIONS.— 7 (1) REVIEW OF RECOMMENDED STANDARDS.— 8 Not later than 45 days after the date of receipt of 9 benefit standards recommended under section 123 (including such standards as modified under para11 graph (2)(B)), the Secretary shall review such 12 standards and shall determine whether to propose 13 adoption of such standards as a package. 14 (2) DETERMINATION TO ADOPT STANDARDS.— If the Secretary determines— 16 (A) to propose adoption of benefit stand17 ards so recommended as a package, the Sec18 retary shall, by regulation under section 553 of 19 title 5, United States Code, propose adoption such standards; or 21 (B) not to propose adoption of such stand22 ards as a package, the Secretary shall notify 23 the Health Benefits Advisory Committee in 24 writing of such determination and the reasons for not proposing the adoption of such rec

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1 ommendation and provide the Committee with a 2 further opportunity to modify its previous rec3 ommendations and submit new recommenda4 tions to the Secretary on a timely basis. 5 (3) CONTINGENCY.—If, because of the applica6 tion of paragraph (2)(B), the Secretary would other7 wise be unable to propose initial adoption of such 8 recommended standards by the deadline specified in 9 subsection (b)(1), the Secretary shall, by regulation 10 under section 553 of title 5, United States Code, 11 propose adoption of initial benefit standards by such 12 deadline. 13 (4) PUBLICATION.—The Secretary shall provide 14 for publication in the Federal Register of all deter15 minations made by the Secretary under this sub16 section. 17 (b) ADOPTION OF STANDARDS.— 18 (1) INITIAL STANDARDS.—Not later than 18 19 months after the date of the enactment of this Act, 20 the Secretary shall, through the rulemaking process 21 consistent with subsection (a), adopt an initial set of 22 benefit standards. 23 (2) PERIODIC UPDATING STANDARDS.—Under 24 subsection (a), the Secretary shall provide for the

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1 periodic updating of the benefit standards previously 2 adopted under this section. 3 (3) REQUIREMENT.—The Secretary may not 4 adopt any benefit standards for an essential benefits package or for level of cost-sharing that are incon6 sistent with the requirements for such a package or 7 level under sections 122 and 123(b)(5). 8 Subtitle D—Additional Consumer 9 Protections

SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY

11 HEALTH INSURERS. 12 The Commissioner shall establish uniform marketing 13 standards that all insured QHBP offering entities shall 14 meet.

SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS 16 MECHANISMS. 17 (a) IN GENERAL.—A QHBP offering entity shall pro18 vide for timely grievance and appeals mechanisms that the 19 Commissioner shall establish.

(b) INTERNAL CLAIMS AND APPEALS PROCESS.— 21 Under a qualified health benefits plan the QHBP offering 22 entity shall provide an internal claims and appeals process 23 that initially incorporates the claims and appeals proce24 dures (including urgent claims) set forth at section 2560.503–1 of title 29, Code of Federal Regulations, as

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1 published on November 21, 2000 (65 Fed. Reg. 70246) 2 and shall update such process in accordance with any 3 standards that the Commissioner may establish. 4 (c) EXTERNAL REVIEW PROCESS.—

(1) IN GENERAL.—The Commissioner shall es6 tablish an external review process (including proce7 dures for expedited reviews of urgent claims) that 8 provides for an impartial, independent, and de novo 9 review of denied claims under this division.

(2) REQUIRING FAIR GRIEVANCE AND APPEALS 11 MECHANISMS.—A determination made, with respect 12 to a qualified health benefits plan offered by a 13 QHBP offering entity, under the external review 14 process established under this subsection shall be binding on the plan and the entity. 16 (d) CONSTRUCTION.—Nothing in this section shall be 17 construed as affecting the availability of judicial review 18 under State law for adverse decisions under subsection (b) 19 or (c), subject to section 151.

SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND 21 PLAN DISCLOSURE. 22 (a) ACCURATE AND TIMELY DISCLOSURE.— 23 (1) IN GENERAL.—A qualified health benefits 24 plan shall comply with standards established by the Commissioner for the accurate and timely disclosure

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1 of plan documents, plan terms and conditions, 2 claims payment policies and practices, periodic fi3 nancial disclosure, data on enrollment, data on 4 disenrollment, data on the number of claims denials, data on rating practices, information on cost-sharing 6 and payments with respect to any out-of-network 7 coverage, and other information as determined ap8 propriate by the Commissioner. The Commissioner 9 shall require that such disclosure be provided in plain language. 11 (2) PLAIN LANGUAGE.—In this subsection, the 12 term ‘‘plain language’’ means language that the in13 tended audience, including individuals with limited 14 English proficiency, can readily understand and use because that language is clean, concise, well-orga16 nized, and follows other best practices of plain lan17 guage writing. 18 (3) GUIDANCE.—The Commissioner shall de19 velop and issue guidance on best practices of plain language writing. 21 (b) CONTRACTING REIMBURSEMENT.—A qualified 22 health benefits plan shall comply with standards estab23 lished by the Commissioner to ensure transparency to each 24 health care provider relating to reimbursement arrangements between such plan and such provider.

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1 (c) ADVANCE NOTICE OF PLAN CHANGES.—A 2 change in a qualified health benefits plan shall not be 3 made without such reasonable and timely advance notice 4 to enrollees of such change.

SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS 6 PLANS NOT OFFERED THROUGH THE 7 HEALTH INSURANCE EXCHANGE. 8 The requirements of the previous provisions of this 9 subtitle shall apply to qualified health benefits plans that are not being offered through the Health Insurance Ex11 change only to the extent specified by the Commissioner. 12 SEC. 135. TIMELY PAYMENT OF CLAIMS. 13 A QHBP offering entity shall comply with the re14 quirements of section 1857(f) of the Social Security Act with respect to a qualified health benefits plan it offers 16 in the same manner an Medicare Advantage organization 17 is required to comply with such requirements with respect 18 to a Medicare Advantage plan it offers under part C of 19 Medicare.

SEC. 136. STANDARDIZED RULES FOR COORDINATION AND 21 SUBROGATION OF BENEFITS. 22 The Commissioner shall establish standards for the 23 coordination and subrogation of benefits and reimburse24 ment of payments in cases involving individuals and multiple plan coverage.

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SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICA

TION.

A QHBP offering entity is required to comply with standards for electronic financial and administrative transactions under section 1173A of the Social Security Act, added by section 163(a).

CHOICES COMMISSIONER.

(a) IN GENERAL.—There is hereby established, as an independent agency in the executive branch of the Government, a Health Choices Administration (in this division referred to as the ‘‘Administration’’).

(b)

COMMISSIONER.—

(1)

IN GENERAL.—The Administration shall be headed by a Health Choices Commissioner (in this division referred to as the ‘‘Commissioner’’) who shall be appointed by the President, by and with the advice and consent of the Senate.

(2)

COMPENSATION; ETC.—The provisions of paragraphs (2), (5), and (7) of subsection (a) (relating to compensation, terms, general powers, rule-making, and delegation) of section 702 of the Social Security Act (42 U.S.C. 902) shall apply to the Commissioner and the Administration in the same manner as such provisions apply to the Commis

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1 sioner of Social Security and the Social Security Ad2 ministration. 3 SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER. 4 (a) DUTIES.—The Commissioner is responsible for carrying out the following functions under this division: 6 (1) QUALIFIED PLAN STANDARDS.—The estab7 lishment of qualified health benefits plan standards 8 under this title, including the enforcement of such 9 standards in coordination with State insurance regulators and the Secretaries of Labor and the Treas11 ury. 12 (2) HEALTH INSURANCE EXCHANGE.—The es13 tablishment and operation of a Health Insurance 14 Exchange under subtitle A of title II.

(3) INDIVIDUAL AFFORDABILITY CREDITS.— 16 The administration of individual affordability credits 17 under subtitle C of title II, including determination 18 of eligibility for such credits. 19 (4) ADDITIONAL FUNCTIONS.—Such additional functions as may be specified in this division. 21 (b) PROMOTING ACCOUNTABILITY.— 22 (1) IN GENERAL.—The Commissioner shall un23 dertake activities in accordance with this subtitle to 24 promote accountability of QHBP offering entities in meeting Federal health insurance requirements, re

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1 gardless of whether such accountability is with re2 spect to qualified health benefits plans offered 3 through the Health Insurance Exchange or outside 4 of such Exchange.

(2) COMPLIANCE EXAMINATION AND AUDITS.— 6 (A) IN GENERAL.—The commissioner 7 shall, in coordination with States, conduct au8 dits of qualified health benefits plan compliance 9 with Federal requirements. Such audits may include random compliance audits and targeted 11 audits in response to complaints or other sus12 pected non-compliance. 13 (B) RECOUPMENT OF COSTS IN CONNEC14 TION WITH EXAMINATION AND AUDITS.—The Commissioner is authorized to recoup from 16 qualified health benefits plans reimbursement 17 for the costs of such examinations and audit of 18 such QHBP offering entities. 19 (c) DATA COLLECTION.—The Commissioner shall collect data for purposes of carrying out the Commis21 sioner’s duties, including for purposes of promoting qual22 ity and value, protecting consumers, and addressing dis23 parities in health and health care and may share such data 24 with the Secretary of Health and Human Services.

(d) SANCTIONS AUTHORITY.—

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1 (1) IN GENERAL.—In the case that the Com2 missioner determines that a QHBP offering entity 3 violates a requirement of this title, the Commis4 sioner may, in coordination with State insurance regulators and the Secretary of Labor, provide, in 6 addition to any other remedies authorized by law, 7 for any of the remedies described in paragraph (2). 8 (2) REMEDIES.—The remedies described in this 9 paragraph, with respect to a qualified health benefits plan offered by a QHBP offering entity, are— 11 (A) civil money penalties of not more than 12 the amount that would be applicable under 13 similar circumstances for similar violations 14 under section 1857(g) of the Social Security Act; 16 (B) suspension of enrollment of individuals 17 under such plan after the date the Commis18 sioner notifies the entity of a determination 19 under paragraph (1) and until the Commissioner is satisfied that the basis for such deter21 mination has been corrected and is not likely to 22 recur; 23 (C) in the case of an Exchange-partici24 pating health benefits plan, suspension of payment to the entity under the Health Insurance

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1 Exchange for individuals enrolled in such plan 2 after the date the Commissioner notifies the en3 tity of a determination under paragraph (1) 4 and until the Secretary is satisfied that the basis for such determination has been corrected 6 and is not likely to recur; or 7 (D) working with State insurance regu8 lators to terminate plans for repeated failure by 9 the offering entity to meet the requirements of this title. 11 (e) STANDARD DEFINITIONS OF INSURANCE AND 12 MEDICAL TERMS.—The Commissioner shall provide for 13 the development of standards for the definitions of terms 14 used in health insurance coverage, including insurance-related terms. 16 (f) EFFICIENCY IN ADMINISTRATION.—The Commis17 sioner shall issue regulations for the effective and efficient 18 administration of the Health Insurance Exchange and af19 fordability credits under subtitle C, including, with respect to the determination of eligibility for affordability credits, 21 the use of personnel who are employed in accordance with 22 the requirements of title 5, United States Code, to carry 23 out the duties of the Commissioner or, in the case of sec24 tions 208 and 241(b)(2), the use of State personnel who are employed in accordance with standards prescribed by

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1 the Office of Personnel Management pursuant to section 2 208 of the Intergovernmental Personnel Act of 1970 (42 3 U.S.C. 4728). 4 SEC. 143. CONSULTATION AND COORDINATION.

(a) CONSULTATION.—In carrying out the Commis6 sioner’s duties under this division, the Commissioner, as 7 appropriate, shall consult with at least with the following: 8 (1) The National Association of Insurance 9 Commissioners, State attorneys general, and State insurance regulators, including concerning the 11 standards for insured qualified health benefits plans 12 under this title and enforcement of such standards. 13 (2) Appropriate State agencies, specifically con14 cerning the administration of individual affordability credits under subtitle C of title II and the offering 16 of Exchange-participating health benefits plans, to 17 Medicaid eligible individuals under subtitle A of such 18 title. 19 (3) Other appropriate Federal agencies.

(4) Indian tribes and tribal organizations. 21 (5) The National Association of Insurance 22 Commissioners for purposes of using model guide23 lines established by such association for purposes of 24 subtitles B and D.

(b) COORDINATION.—

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1 (1) IN GENERAL.—In carrying out the func2 tions of the Commissioner, including with respect to 3 the enforcement of the provisions of this division, 4 the Commissioner shall work in coordination with 5 existing Federal and State entities to the maximum 6 extent feasible consistent with this division and in a 7 manner that prevents conflicts of interest in duties 8 and ensures effective enforcement. 9 (2) UNIFORM STANDARDS.—The Commissioner, 10 in coordination with such entities, shall seek to 11 achieve uniform standards that adequately protect 12 consumers in a manner that does not unreasonably 13 affect employers and insurers. 14 SEC. 144. HEALTH INSURANCE OMBUDSMAN. 15 (a) IN GENERAL.—The Commissioner shall appoint 16 within the Health Choices Administration a Qualified 17 Health Benefits Plan Ombudsman who shall have exper18 tise and experience in the fields of health care and edu19 cation of (and assistance to) individuals. 20 (b) DUTIES.—The Qualified Health Benefits Plan 21 Ombudsman shall, in a linguistically appropriate man22 ner— 23 (1) receive complaints, grievances, and requests 24 for information submitted by individuals;

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1 (2) provide assistance with respect to com2 plaints, grievances, and requests referred to in para3 graph (1), including— 4 (A) helping individuals determine the rel5 evant information needed to seek an appeal of 6 a decision or determination; 7 (B) assistance to such individuals with any 8 problems arising from disenrollment from such 9 a plan; 10 (C) assistance to such individuals in choos11 ing a qualified health benefits plan in which to 12 enroll; and 13 (D) assistance to such individuals in pre14 senting information under subtitle C (relating 15 to affordability credits); and 16 (3) submit annual reports to Congress and the 17 Commissioner that describe the activities of the Om18 budsman and that include such recommendations for 19 improvement in the administration of this division as 20 the Ombudsman determines appropriate. The Om21 budsman shall not serve as an advocate for any in22 creases in payments or new coverage of services, but 23 may identify issues and problems in payment or cov24 erage policies.

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3 SEC. 151. RELATION TO OTHER REQUIREMENTS.

4 (a) COVERAGE NOT OFFERED THROUGH EX

5 CHANGE.—

6 (1) IN GENERAL.—In the case of health insur

7 ance coverage not offered through the Health Insur

8 ance Exchange (whether or not offered in connection

9 with an employment-based health plan), and in the 10 case of employment-based health plans, the require11 ments of this title do not supercede any require12 ments applicable under titles XXII and XXVII of 13 the Public Health Service Act, parts 6 and 7 of sub14 title B of title I of the Employee Retirement Income 15 Security Act of 1974, or State law, except insofar as 16 such requirements prevent the application of a re17 quirement of this division, as determined by the 18 Commissioner. 19 (2) CONSTRUCTION.—Nothing in paragraph (1) 20 shall be construed as affecting the application of sec21 tion 514 of the Employee Retirement Income Secu22 rity Act of 1974. 23 (b) COVERAGE OFFERED THROUGH EXCHANGE.—

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1 (1) IN GENERAL.—In the case of health insur2 ance coverage offered through the Health Insurance 3 Exchange— 4 (A) the requirements of this title do not supercede any requirements (including require6 ments relating to genetic information non7 discrimination and mental health) applicable 8 under title XXVII of the Public Health Service 9 Act or under State law, except insofar as such requirements prevent the application of a re11 quirement of this division, as determined by the 12 Commissioner; and 13 (B) individual rights and remedies under 14 State laws shall apply.

(2) CONSTRUCTION.—In the case of coverage 16 described in paragraph (1), nothing in such para17 graph shall be construed as preventing the applica18 tion of rights and remedies under State laws with 19 respect to any requirement referred to in paragraph (1)(A).

21 SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE. 22 (a) IN GENERAL.—Except as otherwise explicitly per23 mitted by this Act and by subsequent regulations con24 sistent with this Act, all health care and related services (including insurance coverage and public health activities)

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1 covered by this Act shall be provided without regard to 2 personal characteristics extraneous to the provision of 3 high quality health care or related services. 4 (b) IMPLEMENTATION.—To implement the requirement set forth in subsection (a), the Secretary of Health 6 and Human Services shall, not later than 18 months after 7 the date of the enactment of this Act, promulgate such 8 regulations as are necessary or appropriate to insure that 9 all health care and related services (including insurance coverage and public health activities) covered by this Act 11 are provided (whether directly or through contractual, li12 censing, or other arrangements) without regard to per13 sonal characteristics extraneous to the provision of high 14 quality health care or related services.

SEC. 153. WHISTLEBLOWER PROTECTION.

16 (a) RETALIATION PROHIBITED.—No employer may 17 discharge any employee or otherwise discriminate against 18 any employee with respect to his compensation, terms, 19 conditions, or other privileges of employment because the employee (or any person acting pursuant to a request of 21 the employee)— 22 (1) provided, caused to be provided, or is about 23 to provide or cause to be provided to the employer, 24 the Federal Government, or the attorney general of a State information relating to any violation of, or

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1 any act or omission the employee reasonably believes 2 to be a violation of any provision of this Act or any 3 order, rule, or regulation promulgated under this 4 Act;

(2) testified or is about to testify in a pro6 ceeding concerning such violation; 7 (3) assisted or participated or is about to assist 8 or participate in such a proceeding; or 9 (4) objected to, or refused to participate in, any activity, policy, practice, or assigned task that the 11 employee (or other such person) reasonably believed 12 to be in violation of any provision of this Act or any 13 order, rule, or regulation promulgated under this 14 Act.

(b) ENFORCEMENT ACTION.—An employee covered 16 by this section who alleges discrimination by an employer 17 in violation of subsection (a) may bring an action governed 18 by the rules, procedures, legal burdens of proof, and rem19 edies set forth in section 40(b) of the Consumer Product Safety Act (15 U.S.C. 2087(b)). 21 (c) EMPLOYER DEFINED.—As used in this section, 22 the term ‘‘employer’’ means any person (including one or 23 more individuals, partnerships, associations, corporations, 24 trusts, professional membership organization including a certification, disciplinary, or other professional body, unin

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1 corporated organizations, nongovernmental organizations, 2 or trustees) engaged in profit or nonprofit business or in3 dustry whose activities are governed by this Act, and any 4 agent, contractor, subcontractor, grantee, or consultant of such person. 6 (d) RULE OF CONSTRUCTION.—The rule of construc7 tion set forth in section 20109(h) of title 49, United 8 States Code, shall also apply to this section. 9 SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.

11 Nothing in this division shall be construed to alter 12 of supercede any statutory or other obligation to engage 13 in collective bargaining over the terms and conditions of 14 employment related to health care.

SEC. 155. SEVERABILITY.

16 If any provision of this Act, or any application of such 17 provision to any person or circumstance, is held to be un18 constitutional, the remainder of the provisions of this Act 19 and the application of the provision to any other person or circumstance shall not be affected.

21 Subtitle G—Early Investments 22 SEC. 161. ENSURING VALUE AND LOWER PREMIUMS. 23 (a) GROUP HEALTH INSURANCE COVERAGE.—Title 24 XXVII of the Public Health Service Act is amended by inserting after section 2713 the following new section:

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1 ‘‘SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS. 2 ‘‘(a) IN GENERAL.—Each health insurance issuer 3 that offers health insurance coverage in the small or large 4 group market shall provide that for any plan year in which the coverage has a medical loss ratio below a level specified 6 by the Secretary, the issuer shall provide in a manner 7 specified by the Secretary for rebates to enrollees of pay8 ment sufficient to meet such loss ratio. Such methodology 9 shall be set at the highest level medical loss ratio possible that is designed to ensure adequate participation by 11 issuers, competition in the health insurance market, and 12 value for consumers so that their premiums are used for 13 services. 14 ‘‘(b) UNIFORM DEFINITIONS.—The Secretary shall establish a uniform definition of medical loss ratio and 16 methodology for determining how to calculate the medical 17 loss ratio. Such methodology shall be designed to take into 18 account the special circumstances of smaller plans, dif19 ferent types of plans, and newer plans.’’.

(b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 21 Such title is further amended by inserting after section 22 2753 the following new section: 23 ‘‘SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS. 24 ‘‘The provisions of section 2714 shall apply to health insurance coverage offered in the individual market in the

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1 same manner as such provisions apply to health insurance 2 coverage offered in the small or large group market.’’. 3 (c) IMMEDIATE IMPLEMENTATION.—The amend4 ments made by this section shall apply in the group and 5 individual market for plan years beginning on or after 6 January 1, 2011. 7 SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE. 8 (a) CLARIFICATION REGARDING APPLICATION OF 9 GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH 10 INSURANCE COVERAGE.—Section 2742 of the Public 11 Health Service Act (42 U.S.C. 300gg–42) is amended— 12 (1) in its heading, by inserting ‘‘AND CON13 TINUATION IN FORCE, INCLUDING PROHIBI14 TION OF RESCISSION,’’ after ‘‘GUARANTEED RE15 NEWABILITY’’; and 16 (2) in subsection (a), by inserting ‘‘, including 17 without rescission,’’ after ‘‘continue in force’’. 18 (b) SECRETARIAL GUIDANCE REGARDING RESCIS19 SIONS.—Section 2742 of such Act (42 U.S.C. 300gg–42) 20 is amended by adding at the end the following: 21 ‘‘(f) RESCISSION.—A health insurance issuer may re22 scind health insurance coverage only upon clear and con23 vincing evidence of fraud described in subsection (b)(2). 24 The Secretary, no later than July 1, 2010, shall issue

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1 guidance implementing this requirement, including proce

2 dures for independent, external third party review.’’.

3 (c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL

4 THIRD PARTY REVIEW IN CERTAIN CASES.—Subpart 1

of part B of title XXVII of such Act (42 U.S.C. 300gg–

6 41 et seq.) is amended by adding at the end the following:

7 ‘‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL

8 THIRD PARTY REVIEW IN CASES OF RESCIS

9 SION.

‘‘(a) NOTICE AND REVIEW RIGHT.—If a health in11 surance issuer determines to rescind health insurance cov12 erage for an individual in the individual market, before 13 such rescission may take effect the issuer shall provide the 14 individual with notice of such proposed rescission and an opportunity for a review of such determination by an inde16 pendent, external third party under procedures specified 17 by the Secretary under section 2742(f). 18 ‘‘(b) INDEPENDENT DETERMINATION.—If the indi19 vidual requests such review by an independent, external third party of a rescission of health insurance coverage, 21 the coverage shall remain in effect until such third party 22 determines that the coverage may be rescinded under the 23 guidance issued by the Secretary under section 2742(f).’’. 24 (d) EFFECTIVE DATE.—The amendments made by this section shall apply on and after October 1, 2010, with

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1 respect to health insurance coverage issued before, on, or 2 after such date. 3 SEC. 163. ADMINISTRATIVE SIMPLIFICATION. 4 (a) STANDARDIZING ELECTRONIC ADMINISTRATIVE 5 TRANSACTIONS.— 6 (1) IN GENERAL.—Part C of title XI of the So7 cial Security Act (42 U.S.C. 1320d et seq.) is 8 amended by inserting after section 1173 the fol9 lowing new section: 10 ‘‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE 11 TRANSACTIONS. 12 ‘‘(a) STANDARDS FOR FINANCIAL AND ADMINISTRA13 TIVE TRANSACTIONS.— 14 ‘‘(1) IN GENERAL.—The Secretary shall adopt 15 and regularly update standards consistent with the 16 goals described in paragraph (2). 17 ‘‘(2) GOALS FOR FINANCIAL AND ADMINISTRA18 TIVE TRANSACTIONS.—The goals for standards 19 under paragraph (1) are that such standards shall— 20 ‘‘(A) be unique with no conflicting or re21 dundant standards; 22 ‘‘(B) be authoritative, permitting no addi23 tions or constraints for electronic transactions, 24 including companion guides;

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1 ‘‘(C) be comprehensive, efficient and ro2 bust, requiring minimal augmentation by paper 3 transactions or clarification by further commu4 nications; ‘‘(D) enable the real-time (or near real-6 time) determination of an individual’s financial 7 responsibility at the point of service and, to the 8 extent possible, prior to service, including 9 whether the individual is eligible for a specific service with a specific physician at a specific fa11 cility, which may include utilization of a ma12 chine-readable health plan beneficiary identi13 fication card; 14 ‘‘(E) enable, where feasible, near real-time adjudication of claims; 16 ‘‘(F) provide for timely acknowledgment, 17 response, and status reporting applicable to any 18 electronic transaction deemed appropriate by 19 the Secretary; ‘‘(G) describe all data elements (such as 21 reason and remark codes) in unambiguous 22 terms, not permit optional fields, require that 23 data elements be either required or conditioned 24 upon set values in other fields, and prohibit additional conditions; and

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1 ‘‘(H) harmonize all common data elements 2 across administrative and clinical transaction 3 standards. 4 ‘‘(3) TIME FOR ADOPTION.—Not later than 2 5 years after the date of implementation of the X12 6 Version 5010 transaction standards implemented 7 under this part, the Secretary shall adopt standards 8 under this section. 9 ‘‘(4) REQUIREMENTS FOR SPECIFIC STAND10 ARDS.—The standards under this section shall be 11 developed, adopted and enforced so as to— 12 ‘‘(A) clarify, refine, complete, and expand, 13 as needed, the standards required under section 14 1173; 15 ‘‘(B) require paper versions of standard16 ized transactions to comply with the same 17 standards as to data content such that a fully 18 compliant, equivalent electronic transaction can 19 be populated from the data from a paper 20 version; 21 ‘‘(C) enable electronic funds transfers, in 22 order to allow automated reconciliation with the 23 related health care payment and remittance ad24 vice;

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1 ‘‘(D) require timely and transparent claim 2 and denial management processes, including 3 tracking, adjudication, and appeal processing; 4 ‘‘(E) require the use of a standard elec5 tronic transaction with which health care pro6 viders may quickly and efficiently enroll with a 7 health plan to conduct the other electronic 8 transactions provided for in this part; and 9 ‘‘(F) provide for other requirements relat10 ing to administrative simplification as identified 11 by the Secretary, in consultation with stake12 holders. 13 ‘‘(5) BUILDING ON EXISTING STANDARDS.—In 14 developing the standards under this section, the Sec15 retary shall build upon existing and planned stand16 ards. 17 ‘‘(6) IMPLEMENTATION AND ENFORCEMENT.— 18 Not later than 6 months after the date of the enact19 ment of this section, the Secretary shall submit to 20 the appropriate committees of Congress a plan for 21 the implementation and enforcement, by not later 22 than 5 years after such date of enactment, of the 23 standards under this section. Such plan shall in24 clude—

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1 ‘‘(A) a process and timeframe with mile2 stones for developing the complete set of stand3 ards; 4 ‘‘(B) an expedited upgrade program for 5 continually developing and approving additions 6 and modifications to the standards as often as 7 annually to improve their quality and extend 8 their functionality to meet evolving require9 ments in health care; 10 ‘‘(C) programs to provide incentives for, 11 and ease the burden of, implementation for cer12 tain health care providers, with special consid13 eration given to such providers serving rural or 14 underserved areas and ensure coordination with 15 standards, implementation specifications, and 16 certification criteria being adopted under the 17 HITECH Act; 18 ‘‘(D) programs to provide incentives for, 19 and ease the burden of, health care providers 20 who volunteer to participate in the process of 21 setting standards for electronic transactions; 22 ‘‘(E) an estimate of total funds needed to 23 ensure timely completion of the implementation 24 plan; and

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1 ‘‘(F) an enforcement process that includes 2 timely investigation of complaints, random au3 dits to ensure compliance, civil monetary and 4 programmatic penalties for non-compliance con5 sistent with existing laws and regulations, and 6 a fair and reasonable appeals process building 7 off of enforcement provisions under this part. 8 ‘‘(b) LIMITATIONS ON USE OF DATA.—Nothing in 9 this section shall be construed to permit the use of infor10 mation collected under this section in a manner that would 11 adversely affect any individual. 12 ‘‘(c) PROTECTION OF DATA.—The Secretary shall en13 sure (through the promulgation of regulations or other14 wise) that all data collected pursuant to subsection (a) 15 are— 16 ‘‘(1) used and disclosed in a manner that meets 17 the HIPAA privacy and security law (as defined in 18 section 3009(a)(2) of the Public Health Service 19 Act), including any privacy or security standard 20 adopted under section 3004 of such Act; and 21 ‘‘(2) protected from all inappropriate internal 22 use by any entity that collects, stores, or receives the 23 data, including use of such data in determinations of 24 eligibility (or continued eligibility) in health plans,

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1 and from other inappropriate uses, as defined by the 2 Secretary.’’. 3 (2) DEFINITIONS.—Section 1171 of such Act 4 (42 U.S.C. 1320d) is amended— 5 (A) in paragraph (7), by striking ‘‘with 6 reference to’’ and all that follows and inserting 7 ‘‘with reference to a transaction or data ele8 ment of health information in section 1173 9 means implementation specifications, certifi10 cation criteria, operating rules, messaging for11 mats, codes, and code sets adopted or estab12 lished by the Secretary for the electronic ex13 change and use of information’’; and 14 (B) by adding at the end the following new 15 paragraph: 16 ‘‘(9) OPERATING RULES.—The term ‘operating 17 rules’ means business rules for using and processing 18 transactions. Operating rules should address the fol19 lowing: 20 ‘‘(A) Requirements for data content using 21 available and established national standards. 22 ‘‘(B) Infrastructure requirements that es23 tablish best practices for streamlining data flow 24 to yield timely execution of transactions.

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1 ‘‘(C) Policies defining the transaction re2 lated rights and responsibilities for entities that 3 are transmitting or receiving data.’’. 4 (3) CONFORMING AMENDMENT.—Section 1179(a) of such Act (42 U.S.C. 1320d–8(a)) is 6 amended, in the matter before paragraph (1)— 7 (A) by inserting ‘‘on behalf of an indi8 vidual’’ after ‘‘1978)’’; and 9 (B) by inserting ‘‘on behalf of an individual’’ after ‘‘for a financial institution.’’ 11 (b) STANDARDS FOR CLAIMS ATTACHMENTS AND 12 COORDINATION OF BENEFITS .— 13 (1) STANDARD FOR HEALTH CLAIMS ATTACH14 MENTS.—Not later than 1 year after the date of the enactment of this Act, the Secretary of Health and 16 Human Services shall promulgate a final rule to es17 tablish a standard for health claims attachment 18 transaction described in section 1173(a)(2)(B) of the 19 Social Security Act (42 U.S.C. 1320d–2(a)(2)(B)) and coordination of benefits. 21 (2) REVISION IN PROCESSING PAYMENT TRANS22 ACTIONS BY FINANCIAL INSTITUTIONS.— 23 (A) IN GENERAL.—Section 1179 of the So24 cial Security Act (42 U.S.C. 1320d–8) is amended, in the matter before paragraph (1)—

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1 (i) by striking ‘‘or is engaged’’ and in2 serting ‘‘and is engaged’’; and 3 (ii) by inserting ‘‘(other than as a 4 business associate for a covered entity)’’ 5 after ‘‘for a financial institution’’. 6 (B) EFFECTIVE DATE.—The amendments 7 made by paragraph (1) shall apply to trans8 actions occurring on or after such date (not 9 later than 6 months after the date of the enact10 ment of this Act) as the Secretary of Health 11 and Human Services shall specify. 12 SEC. 164. REINSURANCE PROGRAM FOR RETIREES. 13 (a) ESTABLISHMENT.— 14 (1) IN GENERAL.—Not later than 90 days after 15 the date of the enactment of this Act, the Secretary 16 of Health and Human Services shall establish a tem17 porary reinsurance program (in this section referred 18 to as the ‘‘reinsurance program’’) to provide reim19 bursement to assist participating employment-based 20 plans with the cost of providing health benefits to 21 retirees and to eligible spouses, surviving spouses 22 and dependents of such retirees. 23 (2) DEFINITIONS.—For purposes of this sec24 tion:

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1 (A) The term ‘‘eligible employment-based

2 plan’’ means a group health benefits plan

3 that—

4 (i) is maintained by one or more em

ployers, former employers or employee as

6 sociations, or a voluntary employees’ bene

7 ficiary association, or a committee or board

8 of individuals appointed to administer such

9 plan, and

(ii) provides health benefits to retir11 ees. 12 (B) The term ‘‘health benefits’’ means 13 medical, surgical, hospital, prescription drug, 14 and such other benefits as shall be determined by the Secretary, whether self-funded or deliv16 ered through the purchase of insurance or oth17 erwise. 18 (C) The term ‘‘participating employment-19 based plan’’ means an eligible employment-based plan that is participating in the reinsur21 ance program. 22 (D) The term ‘‘retiree’’ means, with re23 spect to a participating employment-benefit 24 plan, an individual who—

(i) is 55 years of age or older;

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1 (ii) is not eligible for coverage under 2 title XVIII of the Social Security Act; and 3 (iii) is not an active employee of an 4 employer maintaining the plan or of any employer that makes or has made substan6 tial contributions to fund such plan. 7 (E) The term ‘‘Secretary’’ means Sec8 retary of Health and Human Services. 9 (b) PARTICIPATION.—To be eligible to participate in the reinsurance program, an eligible employment-based 11 plan shall submit to the Secretary an application for par12 ticipation in the program, at such time, in such manner, 13 and containing such information as the Secretary shall re14 quire.

(c) PAYMENT.— 16 (1) SUBMISSION OF CLAIMS.— 17 (A) IN GENERAL.—Under the reinsurance 18 program, a participating employment-based 19 plan shall submit claims for reimbursement to the Secretary which shall contain documenta21 tion of the actual costs of the items and serv22 ices for which each claim is being submitted. 23 (B) BASIS FOR CLAIMS.—Each claim sub24 mitted under subparagraph (A) shall be based on the actual amount expended by the partici

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1 pating employment-based plan involved within 2 the plan year for the appropriate employment 3 based health benefits provided to a retiree or to 4 the spouse, surviving spouse, or dependent of a retiree. In determining the amount of any claim 6 for purposes of this subsection, the partici7 pating employment-based plan shall take into 8 account any negotiated price concessions (such 9 as discounts, direct or indirect subsidies, rebates, and direct or indirect remunerations) ob11 tained by such plan with respect to such health 12 benefits. For purposes of calculating the 13 amount of any claim, the costs paid by the re14 tiree or by the spouse, surviving spouse, or dependent of the retiree in the form of 16 deductibles, co-payments, and co-insurance shall 17 be included along with the amounts paid by the 18 participating employment-based plan. 19 (2) PROGRAM PAYMENTS AND LIMIT.—If the Secretary determines that a participating employ21 ment-based plan has submitted a valid claim under 22 paragraph (1), the Secretary shall reimburse such 23 plan for 80 percent of that portion of the costs at24 tributable to such claim that exceeds $15,000, but is less than $90,000. Such amounts shall be adjusted

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1 each year based on the percentage increase in the 2 medical care component of the Consumer Price 3 Index (rounded to the nearest multiple of $1,000) 4 for the year involved.

(3) USE OF PAYMENTS.—Amounts paid to a 6 participating employment-based plan under this sub7 section shall be used to lower the costs borne di8 rectly by the participants and beneficiaries for health 9 benefits provided under such plan in the form of premiums, co-payments, deductibles, co-insurance, or 11 other out-of-pocket costs. Such payments shall not 12 be used to reduce the costs of an employer maintain13 ing the participating employment-based plan. The 14 Secretary shall develop a mechanism to monitor the appropriate use of such payments by such plans. 16 (4) APPEALS AND PROGRAM PROTECTIONS.— 17 The Secretary shall establish— 18 (A) an appeals process to permit partici19 pating employment-based plans to appeal a determination of the Secretary with respect to 21 claims submitted under this section; and 22 (B) procedures to protect against fraud, 23 waste, and abuse under the program. 24 (5) AUDITS.—The Secretary shall conduct annual audits of claims data submitted by partici

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1 pating employment-based plans under this section to 2 ensure that they are in compliance with the require3 ments of this section. 4 (d) RETIREE RESERVE TRUST FUND.— 5 (1) ESTABLISHMENT.— 6 (A) IN GENERAL.—There is established in 7 the Treasury of the United States a trust fund 8 to be known as the ‘‘Retiree Reserve Trust 9 Fund’’ (referred to in this section as the ‘‘Trust 10 Fund’’), that shall consist of such amounts as 11 may be appropriated or credited to the Trust 12 Fund as provided for in this subsection to en13 able the Secretary to carry out the reinsurance 14 program. Such amounts shall remain available 15 until expended. 16 (B) FUNDING.—There are hereby appro17 priated to the Trust Fund, out of any moneys 18 in the Treasury not otherwise appropriated, an 19 amount requested by the Secretary as necessary 20 to carry out this section, except that the total 21 of all such amounts requested shall not exceed 22 $10,000,000,000. 23 (C) APPROPRIATIONS FROM THE TRUST 24 FUND.—

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1 (i) IN GENERAL.—Amounts in the 2 Trust Fund are appropriated to provide 3 funding to carry out the reinsurance pro4 gram and shall be used to carry out such program. 6 (ii) BUDGETARY IMPLICATIONS.— 7 Amounts appropriated under clause (i), 8 and outlays flowing from such appropria9 tions, shall not be taken into account for purposes of any budget enforcement proce11 dures including allocations under section 12 302(a) and (b) of the Balanced Budget 13 and Emergency Deficit Control Act and 14 budget resolutions for fiscal years during which appropriations are made from the 16 Trust Fund. 17 (iii) LIMITATION TO AVAILABLE 18 FUNDS.—The Secretary has the authority 19 to stop taking applications for participation in the program or take such other 21 steps in reducing expenditures under the 22 reinsurance program in order to ensure 23 that expenditures under the reinsurance 24 program do not exceed the funds available under this subsection.

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1 TITLE II—HEALTH INSURANCE 2 EXCHANGE AND RELATED 3 PROVISIONS 4 Subtitle A—Health Insurance Exchange

6 SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EX7 CHANGE; OUTLINE OF DUTIES; DEFINITIONS. 8 (a) ESTABLISHMENT.—There is established within 9 the Health Choices Administration and under the direction of the Commissioner a Health Insurance Exchange 11 in order to facilitate access of individuals and employers, 12 through a transparent process, to a variety of choices of 13 affordable, quality health insurance coverage, including a 14 public health insurance option.

(b) OUTLINE OF DUTIES OF COMMISSIONER.—In ac16 cordance with this subtitle and in coordination with appro17 priate Federal and State officials as provided under sec18 tion 143(b), the Commissioner shall— 19 (1) under section 204 establish standards for, accept bids from, and negotiate and enter into con21 tracts with, QHBP offering entities for the offering 22 of health benefits plans through the Health Insur23 ance Exchange, with different levels of benefits re24 quired under section 203, and including with respect to oversight and enforcement;

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1 (2) under section 205 facilitate outreach and 2 enrollment in such plans of Exchange-eligible indi3 viduals and employers described in section 202; and 4 (3) conduct such activities related to the Health Insurance Exchange as required, including establish6 ment of a risk pooling mechanism under section 206 7 and consumer protections under subtitle D of title I. 8 (c) EXCHANGE-PARTICIPATING HEALTH BENEFITS 9 PLAN DEFINED.—In this division, the term ‘‘Exchange-participating health benefits plan’’ means a qualified 11 health benefits plan that is offered through the Health In12 surance Exchange. 13 SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOY14 ERS.

(a) ACCESS TO COVERAGE.—In accordance with this 16 section, all individuals are eligible to obtain coverage 17 through enrollment in an Exchange-participating health 18 benefits plan offered through the Health Insurance Ex19 change unless such individuals are enrolled in another qualified health benefits plan or other acceptable coverage. 21 (b) DEFINITIONS.—In this division: 22 (1) EXCHANGE-ELIGIBLE INDIVIDUAL.—The 23 term ‘‘Exchange-eligible individual’’ means an indi24 vidual who is eligible under this section to be enrolled through the Health Insurance Exchange in an

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1 Exchange-participating health benefits plan and,

2 with respect to family coverage, includes dependents

3 of such individual.

4 (2) EXCHANGE-ELIGIBLE EMPLOYER.—The

term ‘‘Exchange-eligible employer’’ means an em6 ployer that is eligible under this section to enroll 7 through the Health Insurance Exchange employees 8 of the employer (and their dependents) in Exchange-9 eligible health benefits plans.

(3) EMPLOYMENT-RELATED DEFINITIONS.— 11 The terms ‘‘employer’’, ‘‘employee’’, ‘‘full-time em12 ployee’’, and ‘‘part-time employee’’ have the mean13 ings given such terms by the Commissioner for pur14 poses of this division.

(c) TRANSITION.—Individuals and employers shall 16 only be eligible to enroll or participate in the Health Insur17 ance Exchange in accordance with the following transition 18 schedule: 19 (1) FIRST YEAR.—In Y1 (as defined in section 100(c))— 21 (A) individuals described in subsection 22 (d)(1), including individuals described in para23 graphs (3) and (4) of subsection (d); and 24 (B) smallest employers described in subsection (e)(1).

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1 (2) SECOND YEAR.—In Y2— 2 (A) individuals and employers described in 3 paragraph (1); and 4 (B) smaller employers described in sub5 section (e)(2). 6 (3) THIRD AND SUBSEQUENT YEARS.—In Y3 7 and subsequent years— 8 (A) individuals and employers described in 9 paragraph (2); and 10 (B) larger employers as permitted by the 11 Commissioner under subsection (e)(3). 12 (d) INDIVIDUALS.— 13 (1) INDIVIDUAL DESCRIBED.—Subject to the 14 succeeding provisions of this subsection, an indi15 vidual described in this paragraph is an individual 16 who— 17 (A) is not enrolled in coverage described in 18 subparagraphs (C) through (F) of paragraph 19 (2); and 20 (B) is not enrolled in coverage as a full-21 time employee (or as a dependent of such an 22 employee) under a group health plan if the cov23 erage and an employer contribution under the 24 plan meet the requirements of section 312.

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1 For purposes of subparagraph (B), in the case of an 2 individual who is self-employed, who has at least 1 3 employee, and who meets the requirements of section 4 312, such individual shall be deemed a full-time employee described in such subparagraph. 6 (2) ACCEPTABLE COVERAGE.—For purposes of 7 this division, the term ‘‘acceptable coverage’’ means 8 any of the following: 9 (A) QUALIFIED HEALTH BENEFITS PLAN COVERAGE.—Coverage under a qualified health 11 benefits plan. 12 (B) GRANDFATHERED HEALTH INSURANCE 13 COVERAGE; COVERAGE UNDER CURRENT GROUP 14 HEALTH PLAN.—Coverage under a grand-fathered health insurance coverage (as defined 16 in subsection (a) of section 102) or under a 17 current group health plan (described in sub18 section (b) of such section). 19 (C) MEDICARE.—Coverage under part A of title XVIII of the Social Security Act. 21 (D) MEDICAID.—Coverage for medical as22 sistance under title XIX of the Social Security 23 Act, excluding such coverage that is only avail24 able because of the application of subsection (u), (z), or (aa) of section 1902 of such Act.

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1 (E) MEMBERS OF THE ARMED FORCES 2 AND DEPENDENTS (INCLUDING TRICARE).— 3 Coverage under chapter 55 of title 10, United 4 States Code, including similar coverage furnished under section 1781 of title 38 of such 6 Code. 7 (F) VA.—Coverage under the veteran’s 8 health care program under chapter 17 of title 9 38, United States Code, but only if the coverage for the individual involved is determined 11 by the Commissioner in coordination with the 12 Secretary of Treasury to be not less than a level 13 specified by the Commissioner and Secretary of 14 Veteran’s Affairs, in coordination with the Secretary of Treasury, based on the individual’s 16 priority for services as provided under section 17 1705(a) of such title. 18 (G) OTHER COVERAGE.—Such other health 19 benefits coverage, such as a State health benefits risk pool, as the Commissioner, in coordina21 tion with the Secretary of the Treasury, recog22 nizes for purposes of this paragraph. 23 The Commissioner shall make determinations under 24 this paragraph in coordination with the Secretary of the Treasury.

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1 (3) TREATMENT OF CERTAIN NON-TRADI2 TIONAL MEDICAID ELIGIBLE INDIVIDUALS.—An indi3 vidual who is a non-traditional Medicaid eligible in4 dividual (as defined in section 205(e)(4)(C)) in a State may be an Exchange-eligible individual if the 6 individual was enrolled in a qualified health benefits 7 plan, grandfathered health insurance coverage, or 8 current group health plan during the 6 months be9 fore the individual became a non-traditional Medicaid eligible individual. During the period in which 11 such an individual has chosen to enroll in an Ex12 change-participating health benefits plan, the indi13 vidual is not also eligible for medical assistance 14 under Medicaid.

(4) CONTINUING ELIGIBILITY PERMITTED.— 16 (A) IN GENERAL.—Except as provided in 17 subparagraph (B), once an individual qualifies 18 as an Exchange-eligible individual under this 19 subsection (including as an employee or dependent of an employee of an Exchange-eligible em21 ployer) and enrolls under an Exchange-partici22 pating health benefits plan through the Health 23 Insurance Exchange, the individual shall con24 tinue to be treated as an Exchange-eligible individual until the individual is no longer enrolled

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1 with an Exchange-participating health benefits 2 plan. 3 (B) EXCEPTIONS.— 4 (i) IN GENERAL.—Subparagraph (A) 5 shall not apply to an individual once the 6 individual becomes eligible for covera