,i #aacth ,,congress #ast ,session ,h4 ,r4 #cfbb ,,in ,,the ,,house ,,of ,,representatives ,november #bb1 #bjac,mr4 ,duffy introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce1 and in addition to the ,committees on ,ways and ,means1 ,education and the ,workforce1 the ,judiciary1 ,natural ,resources1 ,house ,administration1 ,rules1 and ,appropriations1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to repeal the ,patient ,protection and ,affordable ,care ,act and provide for comprehensive health reform1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,patient ,centered ,healthcare ,savings ,act of #bjac4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,title ,i--,repealing of ,p,p,a,c,a,sec4 #aja4 ,repeal of the health care reform package4,title ,,ii--,medical ,liability ,reform,sec4 #bja4 ,findings and purpose4,sec4 #bjb4 ,encouraging speedy resolution of claims4,sec4 #bjc4 ,compensating patient injury4,sec4 #bjd4 ,maximizing patient recovery4,sec4 #bje4 ,punitive damages4,sec4 #bjf4 ,authorization of payment of future damages to claimants in ,,health care lawsuits4,sec4 #bjg4 ,definitions4,sec4 #bjh4 ,effect on other laws4,sec4 #bji4 ,state flexibility and protection of ,states' rights4,sec4 #baj4 ,applicability2 effective date4,title ,,iii--,allowing ,people ,to ,purchase ,health ,insurance ,across ,state ,lines,sec4 #cja4 ,specification of constitutional authority for enactment of law4,sec4 #cjb4 ,findings4,sec4 #cjc4 ,cooperative governing of individual health insurance coverage4,sec4 #cjd4 ,severability4,title ,,iv--,increasing ,transparency and ,competition in ,healthcare,sec4 #dja4 ,expanding availability of ,medicare data4,title ,v--,expanding the ,effectiveness of ,health ,savings ,accounts,sec4 #eja4 ,amendment of #aihf ,code4,subtitle ,a--,provisions relating to tax-,preferred health accounts,sec4 #eaa4 ,allow both spouses to make catch-up contributions to the same ,,hsa account4,sec4 #eab4 ,provisions relating to ,medicare4,sec4 #eac4 ,individuals eligible for veterans benefits for a service-connected disability4,sec4 #ead4 ,individuals eligible for ,indian ,health ,service assistance4,sec4 #eae4 ,individuals eligible for ,,tricare coverage4,sec4 #eaf4 ,health ,,fsa carryforwards4,sec4 #eag4 ,,fsa and ,,hra interaction with ,h,s,as4,sec4 #eah4 ,allowance of distributions for prescription and over-the-counter medicines and drugs4,sec4 #eai4 ,purchase of health insurance from ,,hsa account4,sec4 #ebj4 ,special rule for certain medical expenses incurred before establishment of account4,sec4 #eba4 ,preventive care prescription drug clarification4,sec4 #ebb4 ,equivalent bankruptcy protections for health savings accounts as retirement funds4,sec4 #ebc4 ,administrative error correction before due date of return4,sec4 #ebd4 ,reauthorization of medicaid health opportunity accounts4,subtitle ,b--,other provisions,sec4 #eca4 ,certain exercise equipment and physical fitness programs treated as medical care4,sec4 #ecb4 ,certain nutritional and dietary supplements to be treated as medical care4,sec4 #ecc4 ,certain provider fees to be treated as medical care4,title ,,vi--,covering ,people with ,pre-,existing ,conditions1 ,removing ,annual and ,lifetime ,coverage ,caps1 and ,expanding ,access to ,care,subtitle ,a--,making ,health ,care ,coverage ,affordable for ,every ,american ,chapter #a--;,ensuring coverage for individuals with preexisting conditions and multiple health care needs,sec4 #fja4 ,establish universal access programs to improve high risk pools and reinsurance markets4,sec4 #fjb4 ,elimination of certain requirements for guaranteed availability in individual market4,sec4 #fjc4 ,no annual or lifetime spending caps4,sec4 #fjd4 ,preventing unjust cancellation of insurance coverage4,chapter #b--,reducing health care premiums and the number of uninsured ,americans,sec4 #faa4 ,state innovation programs4,sec4 #fab4 ,health plan finders4,sec4 #fac4 ,administrative simplification4,subtitle ,b--,improving ,access to ,health ,care ,chapter #a--;,expanding ,access and ,lowering ,costs for ,small ,businesses,sec4 #fbj4 ,short title4,sec4 #fba4 ,rules governing association health plans4,sec4 #fbb4 ,clarification of treatment of single employer arrangements4,sec4 #fbc4 ,enforcement provisions relating to association health plans4,sec4 #fbd4 ,cooperation between ,federal and ,state authorities4,sec4 #fbe4 ,effective date and transitional and other rules4,chapter #b--,targeted ,efforts ,to ,expand ,access,sec4 #fca4 ,extending coverage of dependents4,sec4 #fcb4 ,allowing auto-enrollment for employer sponsored coverage4,title ,,vii--,stopping ,medicare1 ,waste1 ,fraud1 and ,abuse and ,increasing ,penalties for ,abusers,sec4 #gja4 ,increased civil money penalties and criminal fines for ,medicare fraud and abuse4,sec4 #gjb4 ,increased sentences for felonies involving ,medicare fraud and abuse4,sec4 #gjc4 ,other ,,dme supplier anti-fraud and abuse provisions4,sec4 #gjd4 ,retention of certain fraud and abuse provisions4,sec4 #gje4 ,ensuring timely enforcement of ,medicare secondary payer requirements in liability cases4 ,i ,repealing of ,,ppaca #aja4 ,repeal of the health care reform package 7a7 ,,ppaca ,the ,patient ,protection and ,affordable ,care ,act is repealed1 and the provisions of law amended or repealed by such ,act are restored or revived as if such ,act had not been enacted4 7b7 ,,hcera ,title ,i and subtitle ,b of title ,,ii of the ,health ,care and ,education ,reconciliation ,act of #bjaj are repealed1 and the provisions of law amended or repealed by such title or subtitle are restored or revived as if such title or subtitle had not been enacted4 ,,ii ,medical ,liability ,reform #bja4 ,findings and purpose 7a7 ,findings 7#a7 ,effect on health care access and costs ,congress finds that our current civil justice system is adversely affecting patient access to health care services1 better patient care1 and cost-efficient health care1 in that the health care liability system is a costly and ineffective mechanism for resolving claims of health care liability and compensating injured patients1 and is a deterrent to the sharing of information among health care professionals which impedes efforts to improve patient safety and quality of care4 7#b7 ,effect on federal spending ,congress finds that the health care liability litigation systems existing throughout the ,united ,states have a significant effect on the amount1 distribution1 and use of ,federal funds because of-- 7,a7 the large number of individuals who receive health care benefits under programs operated or financed by the ,federal ,government2 7,b7 the large number of individuals who benefit because of the exclusion from ,federal taxes of the amounts spent to provide them with health insurance benefits2 and 7,c7 the large number of health care providers who provide items or services for which the ,federal ,government makes payments4 7b7 ,purpose ,it is the purpose of this title to implement reasonable1 comprehensive1 and effective health care liability reforms designed to-- 7#a7 improve the availability of health care services in cases in which health care liability actions have been shown to be a factor in the decreased availability of services2 7#b7 reduce the incidence of defensive medicine and lower the cost of health care liability insurance1 all of which contribute to the escalation of health care costs2 7#c7 ensure that persons with meritorious health care injury claims receive fair and adequate compensation1 including reasonable noneconomic damages2 7#d7 improve the fairness and cost-effectiveness of our current health care liability system to resolve disputes over1 and provide compensation for1 health care liability by reducing uncertainty in the amount of compensation provided to injured individuals2 and 7#e7 provide an increased sharing of information in the health care system which will reduce unintended injury and improve patient care4 #bjb4 ,encouraging speedy resolution of claims ,the time for the commencement of a health care lawsuit shall be #c years after the date of manifestation of injury or #a year after the claimant discovers1 or through the use of reasonable diligence should have discovered1 the injury1 whichever occurs first4 ,in no event shall the time for commencement of a health care lawsuit exceed #c years after the date of manifestation of injury unless tolled for any of the following-- 7#a7 upon proof of fraud2 7#b7 intentional concealment2 or 7#c7 the presence of a foreign body1 which has no therapeutic or diagnostic purpose or effect1 in the person of the injured person4 ,actions by a minor shall be commenced within #c years from the date of the alleged manifestation of injury except that actions by a minor under the full age of #f years shall be commenced within #c years of manifestation of injury or prior to the minor's #hth birthday1 whichever provides a longer period4 ,such time limitation shall be tolled for minors for any period during which a parent or guardian and a health care provider or health care organization have committed fraud or collusion in the failure to bring an action on behalf of the injured minor4 #bjc4 ,compensating patient injury 7a7 ,unlimited ,amount of ,damages for ,actual ,economic ,losses in ,health ,care ,lawsuits ,in any health care lawsuit1 nothing in this title shall limit a claimant's recovery of the full amount of the available economic damages1 notwithstanding the limitation in subsection 7b74 7b7 ,additional ,noneconomic ,damages ,in any health care lawsuit1 the amount of noneconomic damages1 if available1 may be as much as #bej1jjj1 regardless of the number of parties against whom the action is brought or the number of separate claims or actions brought with respect to the same injury4 7c7 ,no ,discount of ,award for ,noneconomic ,damages ,for purposes of applying the limitation in subsection 7b71 future noneconomic damages shall not be discounted to present value4 ,the jury shall not be informed about the maximum award for noneconomic damages4 ,an award for noneconomic damages in excess of #bej1jjj shall be reduced either before the entry of judgment1 or by amendment of the judgment after entry of judgment1 and such reduction shall be made before accounting for any other reduction in damages required by law4 ,if separate awards are rendered for past and future noneconomic damages and the combined awards exceed #bej1jjj1 the future noneconomic damages shall be reduced first4 7d7 ,fair ,share ,rule ,in any health care lawsuit1 each party shall be liable for that party's several share of any damages only and not for the share of any other person4 ,each party shall be liable only for the amount of damages allocated to such party in direct proportion to such party's percentage of responsibility4 ,whenever a judgment of liability is rendered as to any party1 a separate judgment shall be rendered against each such party for the amount allocated to such party4 ,for purposes of this section1 the trier of fact shall determine the proportion of responsibility of each party for the claimant's harm4 #bjd4 ,maximizing patient recovery 7a7 ,court ,supervision of ,share of ,damages ,actually ,paid to ,claimants ,in any health care lawsuit1 the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants4 ,in particular1 in any health care lawsuit in which the attorney for a party claims a financial stake in the outcome by virtue of a contingent fee1 the court shall have the power to restrict the payment of a claimant's damage recovery to such attorney1 and to redirect such damages to the claimant based upon the interests of justice and principles of equity4 ,in no event shall the total of all contingent fees for representing all claimants in a health care lawsuit exceed the following limits3 7#a7 ,forty percent of the first #ej1jjj recovered by the claimant7s74 7#b7 ,thirty-three and one-third percent of the next #ej1jjj recovered by the claimant7s74 7#c7 ,twenty-five percent of the next #ejj1jjj recovered by the claimant7s74 7#d7 ,fifteen percent of any amount by which the recovery by the claimant7s7 is in excess of #fjj1jjj4 7b7 ,applicability ,the limitations in this section shall apply whether the recovery is by judgment1 settlement1 mediation1 arbitration1 or any other form of alternative dispute resolution4 ,in a health care lawsuit involving a minor or incompetent person1 a court retains the authority to authorize or approve a fee that is less than the maximum permitted under this section4 ,the requirement for court supervision in the first two sentences of subsection 7a7 applies only in civil actions4 #bje4 ,punitive damages 7a7 ,in ,general ,punitive damages may1 if otherwise permitted by applicable ,state or ,federal law1 be awarded against any person in a health care lawsuit only if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant1 or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer4 ,in any health care lawsuit where no judgment for compensatory damages is rendered against such person1 no punitive damages may be awarded with respect to the claim in such lawsuit4 ,no demand for punitive damages shall be included in a health care lawsuit as initially filed4 ,a court may allow a claimant to file an amended pleading for punitive damages only upon a motion by the claimant and after a finding by the court1 upon review of supporting and opposing affidavits or after a hearing1 after weighing the evidence1 that the claimant has established by a substantial probability that the claimant will prevail on the claim for punitive damages4 ,at the request of any party in a health care lawsuit1 the trier of fact shall consider in a separate proceeding-- 7#a7 whether punitive damages are to be awarded and the amount of such award2 and 7#b7 the amount of punitive damages following a determination of punitive liability4 ,if a separate proceeding is requested1 evidence relevant only to the claim for punitive damages1 as determined by applicable ,state law1 shall be inadmissible in any proceeding to determine whether compensatory damages are to be awarded4 7b7 ,determining ,amount of ,punitive ,damages 7#a7 ,factors considered ,in determining the amount of punitive damages1 if awarded1 in a health care lawsuit1 the trier of fact shall consider only the following-- 7,a7 the severity of the harm caused by the conduct of such party2 7,b7 the duration of the conduct or any concealment of it by such party2 7,c7 the profitability of the conduct to such party2 7,d7 the number of products sold or medical procedures rendered for compensation1 as the case may be1 by such party1 of the kind causing the harm complained of by the claimant2 7,e7 any criminal penalties imposed on such party1 as a result of the conduct complained of by the claimant2 and 7,f7 the amount of any civil fines assessed against such party as a result of the conduct complained of by the claimant4 7#b7 ,maximum award ,the amount of punitive damages1 if awarded1 in a health care lawsuit may be as much as #bej1jjj or as much as two times the amount of economic damages awarded1 whichever is greater4 ,the jury shall not be informed of this limitation4 7c7 ,no ,punitive ,damages for ,products ,that ,comply ,with ,,fda ,standards 7#a7 ,in general 7,a7 ,no punitive damages may be awarded against the manufacturer or distributor of a medical product1 or a supplier of any component or raw material of such medical product1 based on a claim that such product caused the claimant's harm where-- 7i7 7,i7 such medical product was subject to premarket approval1 clearance1 or licensure by the ,food and ,drug ,administration with respect to the safety of the formulation or performance of the aspect of such medical product which caused the claimant's harm or the adequacy of the packaging or labeling of such medical product2 and 7,,ii7 such medical product was so approved1 cleared1 or licensed2 or 7ii7 such medical product is generally recognized among qualified experts as safe and effective pursuant to conditions established by the ,food and ,drug ,administration and applicable ,food and ,drug ,administration regulations1 including without limitation those related to packaging and labeling1 unless the ,food and ,drug ,administration has determined that such medical product was not manufactured or distributed in substantial compliance with applicable ,food and ,drug ,administration statutes and regulations4 7,b7 ,rule of construction ,subparagraph 7,a7 may not be construed as establishing the obligation of the ,food and ,drug ,administration to demonstrate affirmatively that a manufacturer1 distributor1 or supplier referred to in such subparagraph meets any of the conditions described in such subparagraph4 7#b7 ,liability of health care providers ,a health care provider who prescribes1 or who dispenses pursuant to a prescription1 a medical product approved1 licensed1 or cleared by the ,food and ,drug ,administration shall not be named as a party to a product liability lawsuit involving such product and shall not be liable to a claimant in a class action lawsuit against the manufacturer1 distributor1 or seller of such product4 ,nothing in this paragraph prevents a court from consolidating cases involving health care providers and cases involving products liability claims against the manufacturer1 distributor1 or product seller of such medical product4 7#c7 ,packaging ,in a health care lawsuit for harm which is alleged to relate to the adequacy of the packaging or labeling of a drug which is required to have tamper-resistant packaging under regulations of the ,secretary of ,health and ,human ,services 7including labeling regulations related to such packaging71 the manufacturer or product seller of the drug shall not be held liable for punitive damages unless such packaging or labeling is found by the trier of fact by clear and convincing evidence to be substantially out of compliance with such regulations4 7#d7 ,exception ,paragraph 7#a7 shall not apply in any health care lawsuit in which-- 7,a7 a person1 before or after premarket approval1 clearance1 or licensure of such medical product1 knowingly misrepresented to or withheld from the ,food and ,drug ,administration information that is required to be submitted under the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cja et seq47 or section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7 that is material and is causally related to the harm which the claimant allegedly suffered2 or 7,b7 a person made an illegal payment to an official of the ,food and ,drug ,administration for the purpose of either securing or maintaining approval1 clearance1 or licensure of such medical product4 #bjf4 ,authorization of payment of future damages to claimants in ,,health care lawsuits 7a7 ,in ,general ,in any health care lawsuit1 if an award of future damages1 without reduction to present value1 equaling or exceeding #ej1jjj is made against a party with sufficient insurance or other assets to fund a periodic payment of such a judgment1 the court shall1 at the request of any party1 enter a judgment ordering that the future damages be paid by periodic payments1 in accordance with the ,uniform ,periodic ,payment of ,judgments ,act promulgated by the ,national ,conference of ,commissioners on ,uniform ,state ,laws4 7b7 ,applicability ,this section applies to all actions which have not been first set for trial or retrial before the effective date of this ,act4 #bjg4 ,definitions ,in this title3 7#a7 ,alternative dispute resolution system2 ,,adr ,the term alternative dispute resolution system or ,,adr means a system that provides for the resolution of health care lawsuits in a manner other than through a civil action brought in a ,state or ,federal court4 7#b7 ,claimant ,the term claimant means any person who brings a health care lawsuit1 including a person who asserts or claims a right to legal or equitable contribution1 indemnity1 or subrogation1 arising out of a health care liability claim or action1 and any person on whose behalf such a claim is asserted or such an action is brought1 whether deceased1 incompetent1 or a minor4 7#c7 ,compensatory damages ,the term compensatory damages means objectively verifiable monetary losses incurred as a result of the provision of1 use of1 or payment for 7or failure to provide1 use1 or pay for7 health care services or medical products1 such as past and future medical expenses1 loss of past and future earnings1 cost of obtaining domestic services1 loss of employment1 and loss of business or employment opportunities1 damages for physical and emotional pain1 suffering1 inconvenience1 physical impairment1 mental anguish1 disfigurement1 loss of enjoyment of life1 loss of society and companionship1 loss of consortium 7other than loss of domestic service71 hedonic damages1 injury to reputation1 and all other nonpecuniary losses of any kind or nature4 ,the term compensatory damages includes economic damages and noneconomic damages1 as such terms are defined in this section4 7#d7 ,contingent fee ,the term contingent fee includes all compensation to any person or persons which is payable only if a recovery is effected on behalf of one or more claimants4 7#e7 ,economic damages ,the term economic damages means objectively verifiable monetary losses incurred as a result of the provision of1 use of1 or payment for 7or failure to provide1 use1 or pay for7 health care services or medical products1 such as past and future medical expenses1 loss of past and future earnings1 cost of obtaining domestic services1 loss of employment1 and loss of business or employment opportunities4 7#f7 ,health care lawsuit ,the term health care lawsuit means any health care liability claim concerning the provision of health care goods or services or any medical product affecting interstate commerce1 or any health care liability action concerning the provision of health care goods or services or any medical product affecting interstate commerce1 brought in a ,state or ,federal court or pursuant to an alternative dispute resolution system1 against a health care provider1 a health care organization1 or the manufacturer1 distributor1 supplier1 marketer1 promoter1 or seller of a medical product1 regardless of the theory of liability on which the claim is based1 or the number of claimants1 plaintiffs1 defendants1 or other parties1 or the number of claims or causes of action1 in which the claimant alleges a health care liability claim4 ,such term does not include a claim or action which is based on criminal liability2 which seeks civil fines or penalties paid to ,federal1 ,state1 or local government2 or which is grounded in antitrust4 7#g7 ,health care liability action ,the term health care liability action means a civil action brought in a ,state or ,federal court or pursuant to an alternative dispute resolution system1 against a health care provider1 a health care organization1 or the manufacturer1 distributor1 supplier1 marketer1 promoter1 or seller of a medical product1 regardless of the theory of liability on which the claim is based1 or the number of plaintiffs1 defendants1 or other parties1 or the number of causes of action1 in which the claimant alleges a health care liability claim4 7#h7 ,health care liability claim ,the term health care liability claim means a demand by any person1 whether or not pursuant to ,,adr1 against a health care provider1 health care organization1 or the manufacturer1 distributor1 supplier1 marketer1 promoter1 or seller of a medical product1 including1 but not limited to1 third-party claims1 cross-claims1 counter-claims1 or contribution claims1 which are based upon the provision of1 use of1 or payment for 7or the failure to provide1 use1 or pay for7 health care services or medical products1 regardless of the theory of liability on which the claim is based1 or the number of plaintiffs1 defendants1 or other parties1 or the number of causes of action4 7#i7 ,health care organization ,the term health care organization means any person or entity which is obligated to provide or pay for health benefits under any health plan1 including any person or entity acting under a contract or arrangement with a health care organization to provide or administer any health benefit4 7#aj7 ,health care provider ,the term health care provider means any person or entity required by ,state or ,federal laws or regulations to be licensed1 registered1 or certified to provide health care services1 and being either so licensed1 registered1 or certified1 or exempted from such requirement by other statute or regulation4 7#aa7 ,health care goods or services ,the term health care goods or services means any goods or services provided by a health care organization1 provider1 or by any individual working under the supervision of a health care provider1 that relates to the diagnosis1 prevention1 or treatment of any human disease or impairment1 or the assessment or care of the health of human beings4 7#ab7 ,malicious intent to injure ,the term malicious intent to injure means intentionally causing or attempting to cause physical injury other than providing health care goods or services4 7#ac7 ,medical product ,the term medical product means a drug1 device1 or biological product intended for humans1 and the terms drug1 device1 and biological product have the meanings given such terms in sections #bja7;g77#a7 and #bja7;h7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cba7;g77#a7 and 7h77 and section #cea7;a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7;a771 respectively1 including any component or raw material used therein1 but excluding health care services4 7#ad7 ,noneconomic damages ,the term noneconomic damages means damages for physical and emotional pain1 suffering1 inconvenience1 physical impairment1 mental anguish1 disfigurement1 loss of enjoyment of life1 loss of society and companionship1 loss of consortium 7other than loss of domestic service71 hedonic damages1 injury to reputation1 and all other nonpecuniary losses of any kind or nature4 7#ae7 ,punitive damages ,the term punitive damages means damages awarded1 for the purpose of punishment or deterrence1 and not solely for compensatory purposes1 against a health care provider1 health care organization1 or a manufacturer1 distributor1 or supplier of a medical product4 ,punitive damages are neither economic nor noneconomic damages4 7#af7 ,recovery ,the term recovery means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim1 including all costs paid or advanced by any person4 ,costs of health care incurred by the plaintiff and the attorneys' office overhead costs or charges for legal services are not deductible disbursements or costs for such purpose4 7#ag7 ,state ,the term ,state means each of the several ,states1 the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 the ,virgin ,islands1 ,guam1 ,american ,samoa1 the ,northern ,mariana ,islands1 the ,trust ,territory of the ,pacific ,islands1 and any other territory or possession of the ,united ,states1 or any political subdivision thereof4 #bjh4 ,effect on other laws 7a7 ,vaccine ,injury 7#a7 ,to the extent that title ,,xxi of the ,public ,health ,service ,act establishes a ,federal rule of law applicable to a civil action brought for a vaccine-related injury or death-- 7,a7 this title does not affect the application of the rule of law to such an action2 and 7,b7 any rule of law prescribed by this title in conflict with a rule of law of such title ,,xxi shall not apply to such action4 7#b7 ,if there is an aspect of a civil action brought for a vaccine-related injury or death to which a ,federal rule of law under title ,,xxi of the ,public ,health ,service ,act does not apply1 then this title or otherwise applicable law 7as determined under this title7 will apply to such aspect of such action4 7b7 ,other ,federal ,law ,except as provided in this section1 nothing in this title shall be deemed to affect any defense available to a defendant in a health care lawsuit or action under any other provision of ,federal law4 #bji4 ,state flexibility and protection of ,states' rights 7a7 ,health ,care ,lawsuits ,the provisions governing health care lawsuits set forth in this title preempt1 subject to subsections 7b7 and 7c71 ,state law to the extent that ,state law prevents the application of any provisions of law established by or under this title4 ,the provisions governing health care lawsuits set forth in this title supersede chapter #aga of title #bh1 ,united ,states ,code1 to the extent that such chapter-- 7#a7 provides for a greater amount of damages or contingent fees1 a longer period in which a health care lawsuit may be commenced1 or a reduced applicability or scope of periodic payment of future damages1 than provided in this title2 or 7#b7 prohibits the introduction of evidence regarding collateral source benefits1 or mandates or permits subrogation or a lien on collateral source benefits4 7b7 ,protection of ,states' ,rights and ,other ,laws 7#a7 ,any issue that is not governed by any provision of law established by or under this title 7including ,state standards of negligence7 shall be governed by otherwise applicable ,state or ,federal law4 7#b7 ,this title shall not preempt or supersede any ,state or ,federal law that imposes greater procedural or substantive protections for health care providers and health care organizations from liability1 loss1 or damages than those provided by this title or create a cause of action4 7c7 ,state ,flexibility ,no provision of this title shall be construed to preempt-- 7#a7 any ,state law 7whether effective before1 on1 or after the date of the enactment of this ,act7 that specifies a particular monetary amount of compensatory or punitive damages 7or the total amount of damages7 that may be awarded in a health care lawsuit1 regardless of whether such monetary amount is greater or lesser than is provided for under this title1 notwithstanding section #bjd7;a72 or 7#b7 any defense available to a party in a health care lawsuit under any other provision of ,state or ,federal law4 #baj4 ,applicability2 effective date ,this title shall apply to any health care lawsuit brought in a ,federal or ,state court1 or subject to an alternative dispute resolution system1 that is initiated on or after the date of the enactment of this ,act1 except that any health care lawsuit arising from an injury occurring prior to the date of the enactment of this ,act shall be governed by the applicable statute of limitations provisions in effect at the time the injury occurred4 ,,iii ,allowing ,people ,to ,purchase ,health ,insurance ,across ,state ,lines #cja4 ,specification of constitutional authority for enactment of law ,this title is enacted pursuant to the power granted ,congress under article ,i1 section #h1 clause #c1 of the ,united ,states ,constitution4 #cjb4 ,findings ,congress finds the following3 7#a7 ,the application of numerous and significant variations in ,state law and the implementation of the ,patient ,protection and ,affordable ,care ,act impacts the ability of insurers to offer1 and individuals to obtain1 affordable individual health insurance coverage1 thereby impeding commerce in individual health insurance coverage4 7#b7 ,mandates for health care coverage established by title ,i of the ,patient ,protection and ,affordable ,care ,act will significantly elevate health insurance costs beyond ,state and ,federal ability to pay4 7#c7 ,individual health insurance coverage is increasingly offered through the ,internet1 other electronic means1 and by mail1 all of which are inherently part of interstate commerce4 7#d7 ,in response to these issues1 it is appropriate to encourage increased efficiency in the offering of individual health insurance coverage through a collaborative approach by the ,states in regulating this coverage4 7#e7 ,the establishment of risk-retention groups has provided a successful model for the sale of insurance across ,state lines1 as the acts establishing those groups allow insurance to be sold in multiple ,states but regulated by a single ,state4 #cjc4 ,cooperative governing of individual health insurance coverage 7a7 ,in ,general ,title ,,xxvii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;gg et seq47 is amended by adding at the end the following new part3 ,d ,cooperative ,governing of ,individual ,health ,insurance ,coverage #bgie4 ,definitions ,in this part3 7#a7 ,primary state ,the term primary ,state means1 with respect to individual health insurance coverage offered by a health insurance issuer1 the ,state designated by the issuer as the ,state whose covered laws shall govern the health insurance issuer in the sale of such coverage under this part4 ,an issuer1 with respect to a particular policy1 may only designate one such ,state as its primary ,state with respect to all such coverage it offers4 ,such an issuer may not change the designated primary ,state with respect to individual health insurance coverage once the policy is issued1 except that such a change may be made upon renewal of the policy4 ,with respect to such designated ,state1 the issuer is deemed to be doing business in that ,state4 7#b7 ,secondary state ,the term secondary ,state means1 with respect to individual health insurance coverage offered by a health insurance issuer1 any ,state that is not the primary ,state4 ,in the case of a health insurance issuer that is selling a policy in1 or to a resident of1 a secondary ,state1 the issuer is deemed to be doing business in that secondary ,state4 7#c7 ,health insurance issuer ,the term health insurance issuer has the meaning given such term in section #bgia7;b77#b71 except that such an issuer must be licensed in the primary ,state and be qualified to sell individual health insurance coverage in that ,state4 7#d7 ,individual health insurance coverage ,the term individual health insurance coverage means health insurance coverage offered in the individual market1 as defined in section #bgia7;e77#a74 7#e7 ,applicable state authority ,the term applicable ,state authority means1 with respect to a health insurance issuer in a ,state1 the ,state insurance commissioner or official or officials designated by the ,state to enforce the requirements of this title for the ,state with respect to the issuer4 7#f7 ,hazardous financial condition ,the term hazardous financial condition means that1 based on its present or reasonably anticipated financial condition1 a health insurance issuer is unlikely to be able-- 7,a7 to meet obligations to policyholders with respect to known claims and reasonably anticipated claims2 or 7,b7 to pay other obligations in the normal course of business4 7#g7 ,covered laws 7,a7 ,in general ,the term covered laws means the laws1 rules1 regulations1 agreements1 and orders governing the insurance business pertaining to-- 7i7 individual health insurance coverage issued by a health insurance issuer2 7ii7 the offer1 sale1 rating 7including medical underwriting71 renewal1 and issuance of individual health insurance coverage to an individual2 7iii7 the provision to an individual in relation to individual health insurance coverage of health care and insurance related services2 7iv7 the provision to an individual in relation to individual health insurance coverage of management1 operations1 and investment activities of a health insurance issuer2 and 7v7 the provision to an individual in relation to individual health insurance coverage of loss control and claims administration for a health insurance issuer with respect to liability for which the issuer provides insurance4 7,b7 ,exception ,such term does not include any law1 rule1 regulation1 agreement1 or order governing the use of care or cost management techniques1 including any requirement related to provider contracting1 network access or adequacy1 health care data collection1 or quality assurance4 7#h7 ,state ,the term ,state means the #ej ,states and includes the ,district of ,columbia1 ,puerto ,rico1 the ,virgin ,islands1 ,guam1 ,american ,samoa1 and the ,northern ,mariana ,islands4 7#i7 ,unfair claims settlement practices ,the term unfair claims settlement practices means only the following practices3 7,a7 ,knowingly misrepresenting to claimants and insured individuals relevant facts or policy provisions relating to coverage at issue4 7,b7 ,failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under policies4 7,c7 ,failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims arising under policies4 7,d7 ,failing to effectuate prompt1 fair1 and equitable settlement of claims submitted in which liability has become reasonably clear4 7,e7 ,refusing to pay claims without conducting a reasonable investigation4 7,f7 ,failing to affirm or deny coverage of claims within a reasonable period of time after having completed an investigation related to those claims4 7,g7 ,a pattern or practice of compelling insured individuals or their beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them4 7,h7 ,a pattern or practice of attempting to settle or settling claims for less than the amount that a reasonable person would believe the insured individual or his or her beneficiary was entitled by reference to written or printed advertising material accompanying or made part of an application4 7,i7 ,attempting to settle or settling claims on the basis of an application that was materially altered without notice to1 or knowledge or consent of1 the insured4 7,j7 ,failing to provide forms necessary to present claims within #ae calendar days of a requests with reasonable explanations regarding their use4 7,k7 ,attempting to cancel a policy in less time than that prescribed in the policy or by the law of the primary ,state4 7#aj7 ,fraud and abuse ,the term fraud and abuse means an act or omission committed by a person who1 knowingly and with intent to defraud1 commits1 or conceals any material information concerning1 one or more of the following3 7,a7 ,presenting1 causing to be presented or preparing with knowledge or belief that it will be presented to or by an insurer1 a reinsurer1 broker or its agent1 false information as part of1 in support of or concerning a fact material to one or more of the following3 7i7 ,an application for the issuance or renewal of an insurance policy or reinsurance contract4 7ii7 ,the rating of an insurance policy or reinsurance contract4 7iii7 ,a claim for payment or benefit pursuant to an insurance policy or reinsurance contract4 7iv7 ,premiums paid on an insurance policy or reinsurance contract4 7v7 ,payments made in accordance with the terms of an insurance policy or reinsurance contract4 7vi7 ,a document filed with the commissioner or the chief insurance regulatory official of another jurisdiction4 7vii7 ,the financial condition of an insurer or reinsurer4 7viii7 ,the formation1 acquisition1 merger1 reconsolidation1 dissolution or withdrawal from one or more lines of insurance or reinsurance in all or part of a ,state by an insurer or reinsurer4 7ix7 ,the issuance of written evidence of insurance4 7x7 ,the reinstatement of an insurance policy4 7,b7 ,solicitation or acceptance of new or renewal insurance risks on behalf of an insurer reinsurer or other person engaged in the business of insurance by a person who knows or should know that the insurer or other person responsible for the risk is insolvent at the time of the transaction4 7,c7 ,transaction of the business of insurance in violation of laws requiring a license1 certificate of authority or other legal authority for the transaction of the business of insurance4 7,d7 ,attempt to commit1 aiding or abetting in the commission of1 or conspiracy to commit the acts or omissions specified in this paragraph4 #bgif4 ,application of law 7a7 ,in ,general ,the covered laws of the primary ,state shall apply to individual health insurance coverage offered by a health insurance issuer in the primary ,state and in any secondary ,state1 but only if the coverage and issuer comply with the conditions of this section with respect to the offering of coverage in any secondary ,state4 7b7 ,exemptions ,from ,covered ,laws in a ,secondary ,state ,except as provided in this section1 a health insurance issuer with respect to its offer1 sale1 rating 7including medical underwriting71 renewal1 and issuance of individual health insurance coverage in any secondary ,state is exempt from any covered laws of the secondary ,state 7and any rules1 regulations1 agreements1 or orders sought or issued by such ,state under or related to such covered laws7 to the extent that such laws would-- 7#a7 make unlawful1 or regulate1 directly or indirectly1 the operation of the health insurance issuer operating in the secondary ,state1 except that any secondary ,state may require such an issuer-- 7,a7 to pay1 on a nondiscriminatory basis1 applicable premium and other taxes 7including high risk pool assessments7 which are levied on insurers and surplus lines insurers1 brokers1 or policyholders under the laws of the ,state2 7,b7 to register with and designate the ,state insurance commissioner as its agent solely for the purpose of receiving service of legal documents or process2 7,c7 to submit to an examination of its financial condition by the ,state insurance commissioner in any ,state in which the issuer is doing business to determine the issuer's financial condition1 if-- 7i7 the ,state insurance commissioner of the primary ,state has not done an examination within the period recommended by the ,national ,association of ,insurance ,commissioners2 and 7ii7 any such examination is conducted in accordance with the examiners' handbook of the ,national ,association of ,insurance ,commissioners and is coordinated to avoid unjustified duplication and unjustified repetition2 7,d7 to comply with a lawful order issued-- 7i7 in a delinquency proceeding commenced by the ,state insurance commissioner if there has been a finding of financial impairment under subparagraph 7,c72 or 7ii7 in a voluntary dissolution proceeding2 7,e7 to comply with an injunction issued by a court of competent jurisdiction1 upon a petition by the ,state insurance commissioner alleging that the issuer is in hazardous financial condition2 7,f7 to participate1 on a nondiscriminatory basis1 in any insurance insolvency guaranty association or similar association to which a health insurance issuer in the ,state is required to belong2 7,g7 to comply with any ,state law regarding fraud and abuse 7as defined in section #bgie7aj771 except that if the ,state seeks an injunction regarding the conduct described in this subparagraph1 such injunction must be obtained from a court of competent jurisdiction2 7,h7 to comply with any ,state law regarding unfair claims settlement practices 7as defined in section #bgie7i772 or 7,i7 to comply with the applicable requirements for independent review under section #bgih with respect to coverage offered in the ,state2 7#b7 require any individual health insurance coverage issued by the issuer to be countersigned by an insurance agent or broker residing in that ,secondary ,state2 or 7#c7 otherwise discriminate against the issuer issuing insurance in both the primary ,state and in any secondary ,state4 7c7 ,clear and ,conspicuous ,disclosure ,a health insurance issuer shall provide the following notice1 in #ab-point bold type1 in any insurance coverage offered in a secondary ,state under this part by such a health insurance issuer and at renewal of the policy1 with the #e blank spaces therein being appropriately filled with the name of the health insurance issuer1 the name of primary ,state1 the name of the secondary ,state1 the name of the secondary ,state1 and the name of the secondary ,state1 respectively1 for the coverage concerned3 ,notice ,this policy is issued by and is governed by the laws and regulations of the ,state of 1 and it has met all the laws of that ,state as determined by that ,state's ,department of ,insurance4 ,this policy may be less expensive than others because it is not subject to all of the insurance laws and regulations of the ,state of 1 including coverage of some services or benefits mandated by the law of the ,state of 4 ,additionally1 this policy is not subject to all of the consumer protection laws or restrictions on rate changes of the ,state of 4 ,as with all insurance products1 before purchasing this policy1 you should carefully review the policy and determine what health care services the policy covers and what benefits it provides1 including any exclusions1 limitations1 or conditions for such services or benefits4 4 7d7 ,prohibition on ,certain ,reclassifications and ,premium ,increases 7#a7 ,in general ,for purposes of this section1 a health insurance issuer that provides individual health insurance coverage to an individual under this part in a primary or secondary ,state may not upon renewal-- 7,a7 move or reclassify the individual insured under the health insurance coverage from the class such individual is in at the time of issue of the contract based on the health-status related factors of the individual2 or 7,b7 increase the premiums assessed the individual for such coverage based on a health status-related factor or change of a health status-related factor or the past or prospective claim experience of the insured individual4 7#b7 ,construction ,nothing in paragraph 7#a7 shall be construed to prohibit a health insurance issuer-- 7,a7 from terminating or discontinuing coverage or a class of coverage in accordance with subsections 7b7 and 7c7 of section #bgdb2 7,b7 from raising premium rates for all policy holders within a class based on claims experience2 7,c7 from changing premiums or offering discounted premiums to individuals who engage in wellness activities at intervals prescribed by the issuer1 if such premium changes or incentives-- 7i7 are disclosed to the consumer in the insurance contract2 7ii7 are based on specific wellness activities that are not applicable to all individuals2 and 7iii7 are not obtainable by all individuals to whom coverage is offered2 7,d7 from reinstating lapsed coverage2 or 7,e7 from retroactively adjusting the rates charged an insured individual if the initial rates were set based on material misrepresentation by the individual at the time of issue4 7e7 ,prior ,offering of ,policy in ,primary ,state ,a health insurance issuer may not offer for sale individual health insurance coverage in a secondary ,state unless that coverage is currently offered for sale in the primary ,state4 7f7 ,licensing of ,agents or ,brokers for ,health ,insurance ,issuers ,any ,state may require that a person acting1 or offering to act1 as an agent or broker for a health insurance issuer with respect to the offering of individual health insurance coverage obtain a license from that ,state1 with commissions or other compensation subject to the provisions of the laws of that ,state1 except that a ,state may not impose any qualification or requirement which discriminates against a nonresident agent or broker4 7g7 ,documents for ,submission to ,state ,insurance ,commissioner ,each health insurance issuer issuing individual health insurance coverage in both primary and secondary ,states shall submit-- 7#a7 to the insurance commissioner of each ,state in which it intends to offer such coverage1 before it may offer individual health insurance coverage in such ,state-- 7,a7 a copy of the plan of operation or feasibility study or any similar statement of the policy being offered and its coverage 7which shall include the name of its primary ,state and its principal place of business72 7,b7 written notice of any change in its designation of its primary ,state2 and 7,c7 written notice from the issuer of the issuer's compliance with all the laws of the primary ,state2 and 7#b7 to the insurance commissioner of each secondary ,state in which it offers individual health insurance coverage1 a copy of the issuer's quarterly financial statement submitted to the primary ,state1 which statement shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by-- 7,a7 a member of the ,american ,academy of ,actuaries2 or 7,b7 a qualified loss reserve specialist4 7h7 ,power of ,courts ,to ,enjoin ,conduct ,nothing in this section shall be construed to affect the authority of any ,federal or ,state court to enjoin-- 7#a7 the solicitation or sale of individual health insurance coverage by a health insurance issuer to any person or group who is not eligible for such insurance2 or 7#b7 the solicitation or sale of individual health insurance coverage that violates the requirements of the law of a secondary ,state which are described in subparagraphs 7,a7 through 7,h7 of section #bgif7;b77#a74 7i7 ,power of ,secondary ,states ,to ,take ,administrative ,action ,nothing in this section shall be construed to affect the authority of any ,state to enjoin conduct in violation of that ,state's laws described in section #bgif7;b77#a74 7j7 ,state ,powers ,to ,enforce ,state ,laws 7#a7 ,in general ,subject to the provisions of subsection 7b77#a77;,g7 7relating to injunctions7 and paragraph 7#b71 nothing in this section shall be construed to affect the authority of any ,state to make use of any of its powers to enforce the laws of such ,state with respect to which a health insurance issuer is not exempt under subsection 7b74 7#b7 ,courts of competent jurisdiction ,if a ,state seeks an injunction regarding the conduct described in paragraphs 7#a7 and 7#b7 of subsection 7h71 such injunction must be obtained from a ,federal or ,state court of competent jurisdiction4 7k7 ,states' ,authority ,to ,sue ,nothing in this section shall affect the authority of any ,state to bring action in any ,federal or ,state court4 7l7 ,generally ,applicable ,laws ,nothing in this section shall be construed to affect the applicability of ,state laws generally applicable to persons or corporations4 7m7 ,guaranteed ,availability of ,coverage to ,,hipaa ,eligible ,individuals ,to the extent that a health insurance issuer is offering coverage in a primary ,state that does not accommodate residents of secondary ,states or does not provide a working mechanism for residents of a secondary ,state1 and the issuer is offering coverage under this part in such secondary ,state which has not adopted a qualified high risk pool as its acceptable alternative mechanism 7as defined in section #bgdd7;c77#b771 the issuer shall1 with respect to any individual health insurance coverage offered in a secondary ,state under this part1 comply with the guaranteed availability requirements for eligible individuals in section #bgda4 #bgig4 ,primary ,state must meet ,federal floor before issuer may sell into secondary ,states ,a health insurance issuer may not offer1 sell1 or issue individual health insurance coverage in a secondary ,state if the ,state insurance commissioner does not use a risk-based capital formula for the determination of capital and surplus requirements for all health insurance issuers4 #bgih4 ,independent external appeals procedures 7a7 ,right to ,external ,appeal ,a health insurance issuer may not offer1 sell1 or issue individual health insurance coverage in a secondary ,state under the provisions of this title unless-- 7#a7 both the secondary ,state and the primary ,state have legislation or regulations in place establishing an independent review process for individuals who are covered by individual health insurance coverage1 or 7#b7 in any case in which the requirements of subparagraph 7,a7 are not met with respect to the either of such ,states1 the issuer provides an independent review mechanism substantially identical 7as determined by the applicable ,state authority of such ,state7 to that prescribed in the ,health ,carrier ,external ,review ,model ,act of the ,national ,association of ,insurance ,commissioners for all individuals who purchase insurance coverage under the terms of this part1 except that1 under such mechanism1 the review is conducted by an independent medical reviewer1 or a panel of such reviewers1 with respect to whom the requirements of subsection 7b7 are met4 7b7 ,qualifications of ,independent ,medical ,reviewers ,in the case of any independent review mechanism referred to in subsection 7a77#b7-- 7#a7 ,in general ,in referring a denial of a claim to an independent medical reviewer1 or to any panel of such reviewers1 to conduct independent medical review1 the issuer shall ensure that-- 7,a7 each independent medical reviewer meets the qualifications described in paragraphs 7#b7 and 7#c72 7,b7 with respect to each review1 each reviewer meets the requirements of paragraph 7#d7 and the reviewer1 or at least #a reviewer on the panel1 meets the requirements described in paragraph 7#e72 and 7,c7 compensation provided by the issuer to each reviewer is consistent with paragraph 7#f74 7#b7 ,licensure and expertise ,each independent medical reviewer shall be a physician 7allopathic or osteopathic7 or health care professional who-- 7,a7 is appropriately credentialed or licensed in #a or more ,states to deliver health care services2 and 7,b7 typically treats the condition1 makes the diagnosis1 or provides the type of treatment under review4 7#c7 ,independence 7,a7 ,in general ,subject to subparagraph 7,b71 each independent medical reviewer in a case shall-- 7i7 not be a related party 7as defined in paragraph 7#g772 7ii7 not have a material familial1 financial1 or professional relationship with such a party2 and 7iii7 not otherwise have a conflict of interest with such a party 7as determined under regulations74 7,b7 ,exception ,nothing in subparagraph 7,a7 shall be construed to-- 7i7 prohibit an individual1 solely on the basis of affiliation with the issuer1 from serving as an independent medical reviewer if-- 7,i7 a non-affiliated individual is not reasonably available2 7,,ii7 the affiliated individual is not involved in the provision of items or services in the case under review2 7,,iii7 the fact of such an affiliation is disclosed to the issuer and the enrollee 7or authorized representative7 and neither party objects2 and 7,,iv7 the affiliated individual is not an employee of the issuer and does not provide services exclusively or primarily to or on behalf of the issuer2 7ii7 prohibit an individual who has staff privileges at the institution where the treatment involved takes place from serving as an independent medical reviewer merely on the basis of such affiliation if the affiliation is disclosed to the issuer and the enrollee 7or authorized representative71 and neither party objects2 or 7iii7 prohibit receipt of compensation by an independent medical reviewer from an entity if the compensation is provided consistent with paragraph 7#f74 7#d7 ,practicing health care professional in same field 7,a7 ,in general ,in a case involving treatment1 or the provision of items or services-- 7i7 by a physician1 a reviewer shall be a practicing physician 7allopathic or osteopathic7 of the same or similar specialty1 as a physician who1 acting within the appropriate scope of practice within the ,state in which the service is provided or rendered1 typically treats the condition1 makes the diagnosis1 or provides the type of treatment under review2 or 7ii7 by a non-physician health care professional1 the reviewer1 or at least #a member of the review panel1 shall be a practicing non-physician health care professional of the same or similar specialty as the non-physician health care professional who1 acting within the appropriate scope of practice within the ,state in which the service is provided or rendered1 typically treats the condition1 makes the diagnosis1 or provides the type of treatment under review4 7,b7 ,practicing defined ,for purposes of this paragraph1 the term practicing means1 with respect to an individual who is a physician or other health care professional1 that the individual provides health care services to individual patients on average at least #b days per week4 7#e7 ,pediatric expertise ,in the case of an external review relating to a child1 a reviewer shall have expertise under paragraph 7#b7 in pediatrics4 7#f7 ,limitations on reviewer compensation ,compensation provided by the issuer to an independent medical reviewer in connection with a review under this section shall-- 7,a7 not exceed a reasonable level2 and 7,b7 not be contingent on the decision rendered by the reviewer4 7#g7 ,related party defined ,for purposes of this section1 the term related party means1 with respect to a denial of a claim under a coverage relating to an enrollee1 any of the following3 7,a7 ,the issuer involved1 or any fiduciary1 officer1 director1 or employee of the issuer4 7,b7 ,the enrollee 7or authorized representative74 7,c7 ,the health care professional that provides the items or services involved in the denial4 7,d7 ,the institution at which the items or services 7or treatment7 involved in the denial are provided4 7,e7 ,the manufacturer of any drug or other item that is included in the items or services involved in the denial4 7,f7 ,any other party determined under any regulations to have a substantial interest in the denial involved4 7#h7 ,definitions ,for purposes of this subsection3 7,a7 ,enrollee ,the term enrollee means1 with respect to health insurance coverage offered by a health insurance issuer1 an individual enrolled with the issuer to receive such coverage4 7,b7 ,health care professional ,the term health care professional means an individual who is licensed1 accredited1 or certified under ,state law to provide specified health care services and who is operating within the scope of such licensure1 accreditation1 or certification4 #bgii4 ,enforcement 7a7 ,in ,general ,subject to subsection 7b71 with respect to specific individual health insurance coverage the primary ,state for such coverage has sole jurisdiction to enforce the primary ,state's covered laws in the primary ,state and any secondary ,state4 7b7 ,secondary ,state's ,authority ,nothing in subsection 7a7 shall be construed to affect the authority of a secondary ,state to enforce its laws as set forth in the exception specified in section #bgif7;b77#a74 7c7 ,court ,interpretation ,in reviewing action initiated by the applicable secondary ,state authority1 the court of competent jurisdiction shall apply the covered laws of the primary ,state4 7d7 ,notice of ,compliance ,failure ,in the case of individual health insurance coverage offered in a secondary ,state that fails to comply with the covered laws of the primary ,state1 the applicable ,state authority of the secondary ,state may notify the applicable ,state authority of the primary ,state4 4 7b7 ,effective ,date ,the amendment made by subsection 7a7 shall apply to individual health insurance coverage offered1 issued1 or sold after the date that is one year after the date of the enactment of this ,act4 7c7 ,,gao ,ongoing ,study and ,reports 7#a7 ,study ,the ,comptroller ,general of the ,united ,states shall conduct an ongoing study concerning the effect of the amendment made by subsection 7a7 on-- 7,a7 the number of uninsured and under-insured2 7,b7 the availability and cost of health insurance policies for individuals with pre-existing medical conditions2 7,c7 the availability and cost of health insurance policies generally2 7,d7 the elimination or reduction of different types of benefits under health insurance policies offered in different ,states2 and 7,e7 cases of fraud or abuse relating to health insurance coverage offered under such amendment and the resolution of such cases4 7#b7 ,annual reports ,the ,comptroller ,general shall submit to ,congress an annual report1 after the end of each of the #e years following the effective date of the amendment made by subsection 7a71 on the ongoing study conducted under paragraph 7#a74 #cjd4 ,severability ,if any provision of this title or the application of such provision to any person or circumstance is held to be unconstitutional1 the remainder of this title and the application of the provisions of such to any other person or circumstance shall not be affected4 ,,iv ,increasing ,transparency and ,competition in ,healthcare #dja4 ,expanding availability of ,medicare data 7a7 ,expanding uses of ,medicare data by qualified entities 7#a7 ,in general ,to the extent consistent with applicable information1 privacy1 security1 and disclosure laws1 beginning with #bjad1 notwithstanding paragraph 7#d77;,b7 of section #ahgd7;e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk7e77 and the second sentence of paragraph 7#d77;,d7 of such section1 a qualified entity may use data received by such entity under such section1 and information derived from the evaluation described in such paragraph 7#d77;,d71 for additional non-public analyses 7as determined appropriate by the ,secretary of ,health and ,human ,services7 or provide or sell such data to registered or authorized users and subscribers1 including to providers of services and suppliers1 for non-public use 7including for the purposes of assisting providers of services and suppliers to develop and participate in quality and patient care improvement activities1 including developing new models of care74 7#b7 ,definitions ,in this section3 7,a7 ,the term qualified entity has the meaning given such term in section #ahgd7;e77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk7e774 7,b7 ,the terms supplier and provider of services have the meanings given such terms in subsections 7d7 and 7u71 respectively1 of section #ahfa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciex74 7b7 ,access to ,medicare data to providers of services and suppliers ,to facilitate development of alternative payment models and to qualified clinical data registries ,to facilitate quality improvement ,consistent with applicable laws and regulations with respect to privacy and other relevant matters1 the ,secretary shall provide ,medicare claims data 7in a form and manner determined to be appropriate7 to-- 7#a7 qualified entities1 that may share with providers of services and suppliers that are registered or authorized users or subscribers1 for non-public use including to facilitate the development of new models of care 7including development of ,alternate ,payment ,models under section #ahdh;,a of the ,social ,security ,act1 models for small group specialty practices1 and care coordination models72 and 7#b7 qualified clinical data registries under section #ahdh7m77#c77;,e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#d7m77#c77;,e77 for purposes of linking such data with clinical outcomes data and performing and disseminating risk-adjusted1 scientifically valid analysis and research to support quality improvement or patient safety1 provided that any public reporting of identifiable provider data shall only be conducted with prior consent of such provider4 ,v ,expanding the ,effectiveness of ,health ,savings ,accounts #eja4 ,amendment of #aihf ,code ,except as otherwise expressly provided1 whenever in this title an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 ,a ,provisions relating to tax-,preferred health accounts #eaa4 ,allow both spouses to make catch-up contributions to the same ,,hsa account 7a7 ,in general ,paragraph 7#c7 of section #bbc7;b7 is amended by adding at the end the following new subparagraph3 7,c7 ,special rule where both spouses are eligible individuals with #a account ,if-- 7i7 an individual and the individual's spouse have both attained age #ee before the close of the taxable year1 and 7ii7 the spouse is not an account beneficiary of a health savings account as of the close of such year1 the additional contribution amount shall be #bjj percent of the amount otherwise determined under subparagraph 7,b74 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #eab4 ,provisions relating to ,medicare 7a7 ,individuals over age #fe only enrolled in ,medicare ,part ,a ,paragraph 7#g7 of section #bbc7;b7 is amended by adding at the end the following3 ,this paragraph shall not apply to any individual during any period for which the individual's only entitlement to such benefits is an entitlement to hospital insurance benefits under part ,a of title ,,xviii of such ,act pursuant to an enrollment for such hospital insurance benefits under section #bbf7;a77#a7 of such ,act44 7b7 ,medicare beneficiaries participating in ,medicare advantage ,,msa may contribute their own money to their ,,msa ,subsection 7b7 of section #ach is amended by striking paragraph 7#b7 and by redesignating paragraphs 7#c7 and 7#d7 as paragraphs 7#b7 and 7#c71 respectively4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #eac4 ,individuals eligible for veterans benefits for a service-connected disability 7a7 ,in general ,paragraph 7#a7 of section #bbc7;c7 is amended by adding at the end the following new subparagraph3 7,c7 ,special rule for individuals eligible for certain veterans benefits ,for purposes of subparagraph 7,a77ii71 an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual receives periodic hospital care or medical services for a service-connected disability under any law administered by the ,secretary of ,veterans ,affairs but only if the individual is not eligible to receive such care or services for any condition other than a service-connected disability4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #ead4 ,individuals eligible for ,indian ,health ,service assistance 7a7 ,in general ,paragraph 7#a7 of section #bbc7;c71 as amended by section #fab1 is amended by adding at the end the following new subparagraph3 7,d7 ,special rule for individuals eligible for assistance under ,indian ,health ,service programs ,for purposes of subparagraph 7,a77ii71 an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual receives hospital care or medical services under a medical care program of the ,indian ,health ,service or of a tribal organization4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #eae4 ,individuals eligible for ,,tricare coverage 7a7 ,in general ,paragraph 7#a7 of section #bbc7;c71 as amended by sections #fac and #fad1 is amended by adding at the end the following new subparagraph3 7,e7 ,special rule for individuals eligible for assistance under tricare ,for purposes of subparagraph 7,a77ii71 an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual is eligible to receive hospital care1 medical services1 or prescription drugs under ,,tricare ,extra or ,,tricare ,standard and such individual is not enrolled in ,,tricare ,prime4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #eaf4 ,health ,,fsa carryforwards 7a7 ,in general ,section #abe is amended by redesignating subsections 7i7 and 7j7 as subsections 7j7 and 7k71 respectively1 and by inserting after subsection 7h7 the following new subsection3 7i7 ,special rules applicable to health flexible spending arrangements 7#a7 ,in general ,for purposes of this title1 a plan or other arrangement shall not fail to be treated as a health flexible spending or similar arrangement solely because under the plan or arrangement a participant is permitted access to any unused balance in the participant's accounts under such plan or arrangement in the manner provided under paragraph 7#b74 7#b7 ,carryforward of unused benefits in health arrangements 7,a7 ,in general ,a plan or arrangement may permit a participant in a health flexible spending arrangement to elect to carry forward any aggregate unused balances in the participant's accounts under such arrangement as of the close of any year to the succeeding year4 ,such carryforward shall be treated as having occurred within #cj days of the close of the year4 7,b7 ,dollar limit on carryforwards 7i7 ,in general ,the amount which a participant may elect to carry forward under subparagraph 7,a7 from any year shall not exceed #ejj4 ,for purposes of this paragraph1 all plans and arrangements maintained by an employer or any related person shall be treated as #a plan4 7ii7 ,cost-of-living adjustment ,in the case of any taxable year beginning in a calendar year after #bjac1 the #ejj amount under clause 7i7 shall be increased by an amount equal to-- 7,i7 #ejj1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year1 determined by substituting #bjab for #aiib in subparagraph 7,b7 thereof4 ,if any dollar amount as increased under this clause is not a multiple of #ajj1 such amount shall be rounded to the next lowest multiple of #ajj4 7,c7 ,exclusion from gross income ,no amount shall be required to be included in gross income under this chapter by reason of any carryforward under this paragraph4 7,d7 ,coordination with limits ,the maximum amount which may be contributed to a health flexible spending arrangement for any year to which an unused amount is carried under this paragraph shall be reduced by such amount4 7#c7 ,terms relating to flexible spending arrangements 7,a7 ,flexible spending arrangements ,for purposes of this subsection1 a flexible spending arrangement is a benefit program which provides employees with coverage under which specified incurred expenses may be reimbursed 7subject to reimbursement maximums and other reasonable conditions74 7,b7 ,health arrangements ,the term health flexible spending arrangement means any flexible spending arrangement 7or portion thereof7 which provides payments for expenses incurred for medical care 7as defined in section #bac7;d774 4 7b7 ,conforming amendments 7#a7 ,the heading for section #abe of the ,internal ,revenue ,code of #aihf is amended by inserting and health flexible spending arrangements after plans4 7#b7 ,the item relating to section #abe in the table of sections for part ,,iii of subchapter ,b of chapter #a of such ,code is amended by inserting and health flexible spending arrangements after plans4 7c7 ,effective date ,the amendments made by this section shall take effect on the date of the enactment of this ,act4 #eag4 ,,fsa and ,,hra interaction with ,h,s,as 7a7 ,eligible individuals include ,,fsa and ,,hra participants ,subparagraph 7,b7 of section #bbc7;c77#a7 is amended-- 7#a7 by striking and at the end of clause 7ii71 7#b7 by striking the period at the end of clause 7iii7 and inserting 1 and1 and 7#c7 by inserting after clause 7iii7 the following new clause3 7iv7 coverage under a health flexible spending arrangement or a health reimbursement arrangement in the plan year a qualified ,,hsa distribution as described in section #ajf7;e7 is made on behalf of the individual if after the qualified ,,hsa distribution is made and for the remaining duration of the plan year1 the coverage provided under the health flexible spending arrangement or health reimbursement arrangement is converted to-- 7,i7 coverage that does not pay or reimburse any medical expense incurred before the minimum annual deductible under paragraph 7#b77;,a77i7 7prorated for the period occurring after the qualified ,,hsa distribution is made7 is satisfied1 7,,ii7 coverage that1 after the qualified ,,hsa distribution is made1 does not pay or reimburse any medical expense incurred after the qualified ,,hsa distribution is made other than preventive care as defined in paragraph 7#b77;,c71 7,,iii7 coverage that1 after the qualified ,,hsa distribution is made1 pays or reimburses benefits for coverage described in clause 7ii7 7but not through insurance or for long-term care services71 7,,iv7 coverage that1 after the qualified ,,hsa distribution is made1 pays or reimburses benefits for permitted insurance or coverage described in clause 7ii7 7but not for long-term care services71 7,v7 coverage that1 after the qualified ,,hsa distribution is made1 pays or reimburses only those medical expenses incurred after an individual's retirement 7and no expenses incurred before retirement71 or 7,,vi7 coverage that1 after the qualified ,,hsa distribution is made1 is suspended1 pursuant to an election made on or before the date the individual elects a qualified ,,hsa distribution or1 if later1 on the date of the individual enrolls in a high deductible health plan1 that does not pay or reimburse1 at any time1 any medical expense incurred during the suspension period except as defined in the preceding subclauses of this clause4 4 7b7 ,qualified ,,hsa distribution shall not affect flexible spending arrangement ,paragraph 7#a7 of section #ajf7;e7 is amended to read as follows3 7#a7 ,in general ,a plan shall not fail to be treated as a health flexible spending arrangement under this section1 section #aje1 or section #abe1 or as a health reimbursement arrangement under this section or section #aje1 merely because such plan provides for a qualified ,,hsa distribution4 4 7c7 ,,fsa balances at year end shall not forfeit ,paragraph 7#b7 of section #abe7;d7 is amended by adding at the end the following new subparagraph3 7,e7 ,exception for qualified ,,hsa distributions ,subparagraph 7,a7 shall not apply to the extent that there is an amount remaining in a health flexible spending account at the end of a plan year that an individual elects to contribute to a health savings account pursuant to a qualified ,,hsa distribution 7as defined in section #ajf7;e77#b774 4 7d7 ,simplification of limitations on ,,fsa and ,,hra rollovers ,paragraph 7#b7 of section #ajf7;e7 is amended to read as follows3 7#b7 ,qualified ,,hsa distribution 7,a7 ,in general ,the term qualified ,,hsa distribution means a distribution from a health flexible spending arrangement or health reimbursement arrangement to the extent that such distribution does not exceed the lesser of-- 7i7 the balance in such arrangement as of the date of such distribution1 or 7ii7 the amount determined under subparagraph 7,b74 ,such term shall not include more than #a distribution with respect to any arrangement4 7,b7 ,dollar limitations 7i7 ,distributions from a health flexible spending arrangement ,a qualified ,,hsa distribution from a health flexible spending arrangement shall not exceed the applicable amount4 7ii7 ,distributions from a health reimbursement arrangement ,a qualified ,,hsa distribution from a health reimbursement arrangement shall not exceed-- 7,i7 the applicable amount divided by #ab1 multiplied by 7,,ii7 the number of months during which the individual is a participant in the health reimbursement arrangement4 7iii7 ,applicable amount ,for purposes of this subparagraph1 the applicable amount is-- 7,i7 #b1bej in the case of an eligible individual who has self-only coverage under a high deductible health plan at the time of such distribution1 and 7,,ii7 #d1ejj in the case of an eligible individual who has family coverage under a high deductible health plan at the time of such distribution4 4 7e7 ,elimination of additional tax for failure ,to maintain high deductible health plan coverage ,subsection 7e7 of section #ajf is amended-- 7#a7 by striking paragraph 7#c7 and redesignating paragraphs 7#d7 and 7#e7 as paragraphs 7#c7 and 7#d71 respectively1 and 7#b7 by striking subparagraph 7,a7 of paragraph 7#c71 as so redesignated1 and redesignating subparagraphs 7,b7 and 7,c7 of such paragraph as subparagraphs 7,a7 and 7,b7 thereof1 respectively4 7f7 ,limited purpose ,f,s,as and ,h,r,as ,subsection 7e7 of section #ajf1 as amended by this section1 is amended by adding at the end the following new paragraph3 7#e7 ,limited purpose ,f,s,as and ,h,r,as ,a plan shall not fail to be a health flexible spending arrangement or health reimbursement arrangement under this section or section #aje merely because the plan converts coverage for individuals who enroll in a high deductible health plan described in section #bbc7;c77#b7 to coverage described in section #bbc7;c77#a77;,b77iv74 ,coverage for such individuals may be converted as of the date of enrollment in the high deductible health plan1 without regard to the period of coverage under the health flexible spending arrangement or health reimbursement arrangement1 and without requiring any change in coverage to individuals who do not enroll in a high deductible health plan4 4 7g7 ,distribution amounts adjusted for cost-of-,living ,subsection 7e7 of section #ajf1 as amended by this section1 is amended by adding at the end the following new paragraph3 7#f7 ,cost-of-living adjustment 7,a7 ,in general ,in the case of any taxable year beginning after ,december #ca1 #bjac1 each of the dollar amounts in paragraph 7#b77;,b77iii7 shall be increased by an amount equal to such dollar amount1 multiplied by the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which such taxable year begins by substituting calendar year #bjab for calendar year #aiib in subparagraph 7,b7 thereof4 7,b7 ,rounding ,if any increase under paragraph 7#a7 is not a multiple of #ej1 such increase shall be rounded to the nearest multiple of #ej4 4 7h7 ,disclaimer of disqualifying coverage ,subparagraph 7,b7 of section #bbc7;c77#a71 as amended by this section1 is amended-- 7#a7 by striking and at the end of clause 7iii71 7#b7 by striking the period at the end of clause 7iv7 and inserting 1 and1 and 7#c7 by inserting after clause 7iv7 the following new clause3 7v7 any coverage 7including prospective coverage7 under a health plan that is not a high deductible health plan which is disclaimed in writing1 at the time of the creation or organization of the health savings account1 including by execution of a trust described in subsection 7d77#a7 through a governing instrument that includes such a disclaimer1 or by acceptance of an amendment to such a trust that includes such a disclaimer4 4 7i7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #eah4 ,allowance of distributions for prescription and over-the-counter medicines and drugs 7a7 ,reference ,to repeal of distributions for medicine qualified only if for prescribed drug or insulin ,section #aja of this ,act provides for the repeal of section #ijjc of the ,patient ,protection and ,affordable ,care ,act 7,public ,law #aaa-adh7 and the amendments made by such section4 ,the ,internal ,revenue ,code of #aihf shall be applied as if such section #ijjc and amendments had never been enacted4 7b7 ,allowance of distributions for all medicines and drugs 7#a7 ,h,s,as ,subparagraph 7,a7 of section #bbc7;d77#b7 is amended by adding at the end the following3 ,such term shall include an amount paid for any prescription or over-the-counter medicine or drug44 7#b7 ,archer ,m,s,as ,subparagraph 7,a7 of section #bbj7;d77#b7 is amended by adding at the end the following3 ,such term shall include an amount paid for any prescription or over-the-counter medicine or drug44 7#c7 ,health flexible spending arrangements and health reimbursement arrangements ,section #ajf is amended by adding at the end the following new subsection3 7f7 ,reimbursements for all medicines and drugs ,for purposes of this section and section #aje1 reimbursement for expenses incurred for any prescription or over-the-counter medicine or drug shall be treated as a reimbursement for medical expenses4 4 7#d7 ,effective dates 7,a7 ,distributions from savings accounts ,the amendments made by paragraphs 7#a7 and 7#b7 shall apply to amounts paid with respect to taxable years beginning after ,december #ca1 #bjac4 7,b7 ,reimbursements ,the amendment made by paragraph 7#c7 shall apply to expenses incurred with respect to taxable years beginning after ,december #ca1 #bjac4 #eai4 ,purchase of health insurance from ,,hsa account 7a7 ,in general ,paragraph 7#b7 of section #bbc7;d7 is amended to read as follows3 7#b7 ,qualified medical expenses 7,a7 ,in general ,the term qualified medical expenses means1 with respect to an account beneficiary1 amounts paid by such beneficiary for medical care 7as defined in section #bac7;d77 for any individual covered by a high deductible health plan of the account beneficiary1 but only to the extent such amounts are not compensated for by insurance or otherwise4 7,b7 ,health insurance may not be purchased from account ,except as provided in subparagraph 7,c71 subparagraph 7,a7 shall not apply to any payment for insurance4 7,c7 ,exceptions ,subparagraph 7,b7 shall not apply to any expense for coverage under-- 7i7 a health plan during any period of continuation coverage required under any ,federal law1 7ii7 a qualified long-term care insurance contract 7as defined in section #ggjb;,b7b771 7iii7 a health plan during any period in which the individual is receiving unemployment compensation under any ,federal or ,state law1 7iv7 a high deductible health plan1 or 7v7 any health insurance under title ,,xviii of the ,social ,security ,act1 other than a ,medicare supplemental policy 7as defined in section #ahhb of such ,act74 4 7b7 ,effective date ,the amendment made by this section shall apply with respect to insurance purchased after the date of the enactment of this ,act in taxable years beginning after such date4 #ebj4 ,special rule for certain medical expenses incurred before establishment of account 7a7 ,in general ,paragraph 7#b7 of section #bbc7;d71 as amended by section #fai1 is amended by adding at the end the following new subparagraph3 7,d7 ,certain medical expenses incurred before establishment of account treated as qualified ,an expense shall not fail to be treated as a qualified medical expense solely because such expense was incurred before the establishment of the health savings account if such expense was incurred-- 7i7 during either-- 7,i7 the taxable year in which the health savings account was established1 or 7,,ii7 the preceding taxable year in the case of a health savings account established after the taxable year in which such expense was incurred but before the time prescribed by law for filing the return for such taxable year 7not including extensions thereof71 and 7ii7 for medical care of an individual during a period that such individual was covered by a high deductible health plan and met the requirements of subsection 7c77#a77;,a77ii7 7after application of subsection 7c77#a77;,b774 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #eba4 ,preventive care prescription drug clarification 7a7 ,clarify use of drugs in preventive care ,subparagraph 7,c7 of section #bbc7;c77#b7 is amended by adding at the end the following3 ,preventive care shall include prescription and over-the-counter drugs and medicines which have the primary purpose of preventing the onset of1 further deterioration from1 or complications associated with chronic conditions1 illnesses1 or diseases44 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjjc4 #ebb4 ,equivalent bankruptcy protections for health savings accounts as retirement funds 7a7 ,in general ,section #ebb of title #aa1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7r7 ,treatment of health savings accounts ,for purposes of this section1 any health savings account 7as described in section #bbc of the ,internal ,revenue ,code of #aihf7 shall be treated in the same manner as an individual retirement account described in section #djh of such ,code4 4 7b7 ,effective date ,the amendment made by this section shall apply to cases commencing under title #aa1 ,united ,states ,code1 after the date of the enactment of this ,act4 #ebc4 ,administrative error correction before due date of return 7a7 ,in general ,paragraph 7#d7 of section #bbc7;f7 is amended by adding at the end the following new subparagraph3 7,d7 ,exception for administrative errors corrected before due date of return ,subparagraph 7,a7 shall not apply if any payment or distribution is made to correct an administrative1 clerical or payroll contribution error and if-- 7i7 such distribution is received by the individual on or before the last day prescribed by law 7including extensions of time7 for filing such individual's return for such taxable year1 and 7ii7 such distribution is accompanied by the amount of net income attributable to such contribution4 ,any net income described in clause 7ii7 shall be included in the gross income of the individual for the taxable year in which it is received4 4 7b7 ,effective date ,the amendment made by this section shall take effect on the date of the enactment of this ,act4 #ebd4 ,reauthorization of medicaid health opportunity accounts 7a7 ,in general ,section #aich of the ,social ,security ,act 7#db ,u4,s4,c4 #acifu-#h7 is amended-- 7#a7 in subsection 7a7-- 7,a7 by striking paragraph 7#b7 and inserting the following3 7#b7 ,initial demonstration ,the demonstration program under this section shall begin #ij days after the date of the enactment of this paragraph4 ,the ,secretary shall approve ,states to conduct demonstration programs under this section for a #e-year period1 with each ,state demonstration program covering #a or more geographic areas specified by the ,state4 ,with respect to a ,state1 after the initial #e-year period of any demonstration program conducted under this section by the ,state1 unless the ,secretary finds1 taking into account cost-effectiveness and quality of care1 that the ,state demonstration program has been unsuccessful1 the demonstration program may be extended or made permanent in the ,state4 2 and 7,b7 in paragraph 7#c71 in the matter preceding subparagraph 7,a7-- 7i7 by striking not2 and 7ii7 by striking unless and inserting if 2 7#b7 in subsection 7b7-- 7,a7 in paragraph 7#c71 by inserting clauses 7i7 through 7vii71 7viii7 7without regard to the amendment made by section #bjjd7;c77#b7 of ,public ,law #aaa-adh71 7x71 or 7xi7 of after described in 2 and 7,b7 by striking paragraphs 7#d71 7#e71 and 7#f72 7#c7 in subsection 7c7-- 7,a7 by striking paragraphs 7#c7 and 7#d72 7,b7 by redesignating paragraphs 7#e7 through 7#h7 as paragraphs 7#c7 through 7#f71 respectively2 and 7,c7 in paragraph 7#d7 7as redesignated by subparagraph 7,b771 by striking ,subject to subparagraphs 7,d7 and 7,e7 and inserting ,subject to subparagraph 7,d72 and 7#d7 in subsection 7d7-- 7,a7 in paragraph 7#b71 by striking subparagraph 7,e72 and 7,b7 in paragraph 7#c7-- 7i7 in subparagraph 7,a77ii71 by striking ,subject to subparagraph 7,b77ii71 in and inserting ,in2 and 7ii7 by striking subparagraph 7,b7 and inserting the following3 7,b7 ,maintenance of health opportunity account after becoming ineligible for public benefit ,notwithstanding any other provision of law1 if an account holder of a health opportunity account becomes ineligible for benefits under this title because of an increase in income or assets-- 7i7 no additional contribution shall be made into the account under paragraph 7#b77;,a77i72 and 7ii7 the account shall remain available to the account holder for #c years after the date on which the individual becomes ineligible for such benefits for withdrawals under the same terms and conditions as if the account holder remained eligible for such benefits1 and such withdrawals shall be treated as medical assistance in accordance with subsection 7c77#d74 4 7b7 ,conforming amendment ,section #fac of ,public ,law #aaa-c is repealed4 ,b ,other provisions #eca4 ,certain exercise equipment and physical fitness programs treated as medical care 7a7 ,in general ,subsection 7d7 of section #bac is amended by adding at the end the following new paragraph3 7#ab7 ,exercise equipment and physical fitness programs 7,a7 ,in general ,the term medical care shall include amounts paid-- 7i7 to purchase or use equipment used in a program 7including a self-directed program7 of physical exercise1 7ii7 to participate1 or receive instruction1 in a program of physical exercise1 and 7iii7 for membership dues in a fitness club the primary purpose of which is to provide access to equipment and facilities for physical exercise4 7,b7 ,limitation ,amounts treated as medical care under subparagraph 7,a7 shall not exceed #a1jjj with respect to any individual for any taxable year4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #ecb4 ,certain nutritional and dietary supplements to be treated as medical care 7a7 ,in general ,subsection 7d7 of section #bac1 as amended by section #fca1 is amended by adding at the end the following new paragraph3 7#ac7 ,nutritional and dietary supplements 7,a7 ,in general ,the term medical care shall include amounts paid to purchase herbs1 vitamins1 minerals1 homeopathic remedies1 meal replacement products1 and other dietary and nutritional supplements4 7,b7 ,limitation ,amounts treated as medical care under subparagraph 7,a7 shall not exceed #a1jjj with respect to any individual for any taxable year4 7,c7 ,meal replacement product ,for purposes of this paragraph1 the term meal replacement product means any product that-- 7i7 is permitted to bear labeling making a claim described in section #djc7r77#c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 and 7ii7 is permitted to claim under such section that such product is low in fat and is a good source of protein1 fiber1 and multiple essential vitamins and minerals4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #ecc4 ,certain provider fees to be treated as medical care 7a7 ,in general ,subsection 7d7 of section #bac1 as amended by sections #fca and #fcb1 is amended by adding at the end the following new paragraph3 7#ad7 ,periodic provider fees ,the term medical care shall include periodic fees paid to a primary physician1 physician assistant1 or nurse practitioner for the right to receive medical services on an as-needed basis4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 ,,vi ,covering ,people with ,pre-,existing ,conditions1 ,removing ,annual and ,lifetime ,coverage ,caps1 and ,expanding ,access to ,care ,a ,making ,health ,care ,coverage ,affordable for ,every ,american #a ,ensuring coverage for individuals with preexisting conditions and multiple health care needs #fja4 ,establish universal access programs to improve high risk pools and reinsurance markets 7a7 ,state requirement 7#a7 ,in general ,not later than ,january #a1 #bjad1 each ,state shall-- 7,a7 subject to paragraph 7#c71 operate-- 7i7 a qualified ,state reinsurance program described in subsection 7b72 or 7ii7 qualifying ,state high risk pool described in subsection 7c77#a72 and 7,b7 subject to paragraph 7#c71 apply to the operation of such a program from ,state funds an amount equivalent to the portion of ,state funds derived from ,state premium assessments 7as defined by the ,secretary7 that are not otherwise used on ,state health care programs4 7#b7 ,relation to current qualified high risk pool program 7,a7 ,states not operating a qualified high risk pool ,in the case of a ,state that is not operating a current section #bgde qualified high risk pool as of the date of the enactment of this ,act-- 7i7 the ,state may only meet the requirement of paragraph 7#a7 through the operation of a qualified ,state reinsurance program described in subsection 7b72 and 7ii7 the ,state's operation of such a reinsurance program shall be treated1 for purposes of section #bgde of the ,public ,health ,service ,act1 as the operation of a qualified high risk pool described in such section4 7,b7 ,state operating a qualified high risk pool ,in the case of a ,state that is operating a current section #bgde qualified high risk pool as of the date of the enactment of this ,act-- 7i7 as of ,january #a1 #bjad1 such a pool shall not be treated as a qualified high risk pool under section #bgde of the ,public ,health ,service ,act unless the pool is a qualifying ,state high risk pool described in subsection 7c77#a72 and 7ii7 the ,state may use premium assessment funds described in paragraph 7#a77;,b7 to transition from operation of such a pool to operation of a qualified ,state reinsurance program described in subsection 7b74 7#c7 ,application of funds ,if the program or pool operated under paragraph 7#a77;,a7 is in strong fiscal health1 as determined in accordance with standards established by the ,national ,association of ,insurance ,commissioners and as approved by the ,state ,insurance ,commissioner involved1 the requirement of paragraph 7#a77;,b7 shall be deemed to be met4 7b7 ,qualified ,state reinsurance program 7#a7 ,in general ,for purposes of this section1 a qualified ,state reinsurance program means a program operated by a ,state program that provides reinsurance for health insurance coverage offered in the small group market in accordance with the model for such a program established 7as of the date of the enactment of this ,act74 7#b7 ,form of program ,a qualified ,state reinsurance program may provide reinsurance-- 7,a7 on a prospective or retrospective basis2 and 7,b7 on a basis that protects health insurance issuers against the annual aggregate spending of their enrollees as well as purchase protection against individual catastrophic costs4 7#c7 ,satisfaction of ,,hipaa requirement ,a qualified ,state reinsurance program shall be deemed1 for purposes of section #bgde of the ,public ,health ,service ,act1 to be a qualified high risk pool under such section4 7c7 ,qualifying ,state high risk pool 7#a7 ,in general ,a qualifying ,state high risk pool described in this subsection means a current section #bgde qualified high risk pool that meets the following requirements3 7,a7 ,the pool must provide at least two coverage options1 one of which must be a high deductible health plan coupled with a health savings account4 7,b7 ,the pool must be funded with a stable funding source4 7,c7 ,the pool must eliminate any waiting lists so that all eligible residents who are seeking coverage through the pool should be allowed to receive coverage through the pool4 7,d7 ,the pool must allow for coverage of individuals who1 but for the #bd-month disability waiting period under section #bbf7;b7 of the ,social ,security ,act1 would be eligible for ,medicare during the period of such waiting period4 7,e7 ,the pool must limit the pool premiums to no more than #aej percent of the average premium for applicable standard risk rates in that ,state4 7,f7 ,the pool must conduct education and outreach initiatives so that residents and brokers understand that the pool is available to eligible residents4 7,g7 ,the pool must provide coverage for preventive services and disease management for chronic diseases4 7#b7 ,verification of citizenship or alien qualification 7,a7 ,in general ,notwithstanding any other provision of law1 only citizens and nationals of the ,united ,states shall be eligible to participate in a qualifying ,state high risk pool that receives funds under section #bgde of the ,public ,health ,service ,act or this section4 7,b7 ,condition of participation ,as a condition of a ,state receiving such funds1 the ,secretary shall require the ,state to certify1 to the satisfaction of the ,secretary1 that such ,state requires all applicants for coverage in the qualifying ,state high risk pool to provide satisfactory documentation of citizenship or nationality in a manner consistent with section #aijc7x7 of the ,social ,security ,act4 7,c7 ,records ,the ,secretary shall keep sufficient records such that a determination of citizenship or nationality only has to be made once for any individual under this paragraph4 7#c7 ,relation to section #bgde ,as of ,january #a1 #bjad1 a pool shall not qualify as qualified high risk pool under section #bgde of the ,public ,health ,service ,act unless the pool is a qualifying ,state high risk pool described in paragraph 7#a74 7d7 ,waivers ,in order to accommodate new and innovative programs1 the ,secretary may waive such requirements of this section for qualified ,state reinsurance programs and for qualifying ,state high risk pools as the ,secretary deems appropriate4 7e7 ,funding ,in addition to any other amounts appropriated1 there is appropriated to carry out section #bgde of the ,public ,health ,service ,act 7including through a program or pool described in subsection 7a77#a77-- 7#a7 #ae1jjj1jjj1jjj for the period of fiscal years #bjad through #bjbc2 and 7#b7 an additional #aj1jjj1jjj1jjj for the period of fiscal years #bjai through #bjbc4 7f7 ,definitions ,in this section3 7#a7 ,health insurance coverage2 health insurance issuer ,the terms health insurance coverage and health insurance issuer have the meanings given such terms in section #bgia of the ,public ,health ,service ,act4 7#b7 ,current section #bgde qualified high risk pool ,the term current section #bgde qualified high risk pool has the meaning given the term qualified high risk pool under section #bgde7;g7 of the ,public ,health ,service ,act as in effect as of the date of the enactment of this ,act4 7#c7 ,secretary ,the term ,secretary means the ,secretary of ,health and ,human ,services4 7#d7 ,standard risk rate ,the term standard risk rate means a rate that-- 7,a7 is determined under the ,state high risk pool by considering the premium rates charged by other health insurance issuers offering health insurance coverage to individuals in the insurance market served2 7,b7 is established using reasonable actuarial techniques2 and 7,c7 reflects anticipated claims experience and expenses for the coverage involved4 7#e7 ,state ,the term ,state means any of the #ej ,states or the ,district of ,columbia4 #fjb4 ,elimination of certain requirements for guaranteed availability in individual market 7a7 ,in general ,section #bgda7;b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;gg-#da7;b77 is amended-- 7#a7 in paragraph 7#a7-- 7,a7 by striking 7#a77;,a7 and inserting 7#a72 and 7,b7 by striking and 7,b7 and all that follows up to the semicolon at the end2 7#b7 by adding and at the end of paragraph 7#b72 7#c7 in paragraph 7#c7-- 7,a7 by striking 7#a77;,a7 and inserting 7#a72 and 7,b7 by striking the semicolon at the end and inserting a period2 and 7#d7 by striking paragraphs 7#d7 and 7#e74 7b7 ,effective date ,the amendments made by subsection 7a7 shall take effect on the date of the enactment of this ,act4 #fjc4 ,no annual or lifetime spending caps 7a7 ,in general ,notwithstanding any other provision of law1 a health insurance issuer 7including an entity licensed to sell insurance with respect to a ,state or group health plan7 may not apply an annual or lifetime aggregate spending cap on any health insurance coverage or plan offered by such issuer4 ,the restriction of the previous sentence shall not apply with respect to a health insurance coverage or plan if1 as of the date of the enactment of this ,act1 it would result in a significant decrease in access to benefits under the plan or would significantly increase premiums under the plan4 7b7 ,application ,subsection 7a7 shall be enforced as if it were included as a provision in parts ,a and ,b of title ,,xxvii of the ,public ,health ,service ,act 7as such title is in effect after the date of repeal of ,public ,law #aaa-adh under section #aja74 #fjd4 ,preventing unjust cancellation of insurance coverage 7a7 ,clarification regarding application of guaranteed renewability of individual health insurance coverage ,section #bgdb of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;gg-#db7 is amended-- 7#a7 in its heading1 by inserting 1 continuation in force1 including prohibition of rescission1 after ,guaranteed renewability2 7#b7 in subsection 7a71 by inserting 1 including without rescission1 after continue in force2 and 7#c7 in subsection 7b77#b71 by inserting before the period at the end the following3 1 including intentional concealment of material facts regarding a health condition related to the condition for which coverage is being claimed4 7b7 ,opportunity for independent1 external third party review in certain cases ,subpart #a of part ,b of title ,,xxvii of the ,public ,health ,service ,act is amended by adding at the end the following new section3 #bgdf4 ,opportunity for independent1 external third party review in certain cases 7a7 ,notice and review right ,if a health insurance issuer determines to nonrenew or not continue in force1 including rescind1 health insurance coverage for an individual in the individual market on the basis described in section #bgdb7;b77#b7 before such nonrenewal1 discontinuation1 or rescission1 may take effect the issuer shall provide the individual with notice of such proposed nonrenewal1 discontinuation1 or rescission and an opportunity for a review of such determination by an independent1 external third party under procedures specified by the ,secretary4 7b7 ,independent determination ,if the individual requests such review by an independent1 external third party of a nonrenewal1 discontinuation1 or rescission of health insurance coverage1 the coverage shall remain in effect until such third party determines that the coverage may be nonrenewed1 discontinued1 or rescinded under section #bgdb7;b77#b74 4 7c7 ,effective date ,the amendments made by this section shall apply after the date of the enactment of this ,act with respect to health insurance coverage issued before1 on1 or after such date4 #b ,reducing health care premiums and the number of uninsured ,americans #faa4 ,state innovation programs 7a7 ,programs that reduce the cost of health insurance premiums 7#a7 ,payments to ,states 7,a7 ,for premium reductions in the small group market ,if the ,secretary determines that a ,state has reduced the average per capita premium for health insurance coverage in the small group market in year #c1 in year #f1 or year #i 7as defined in subsection 7c77 below the premium baseline for such year 7as defined paragraph 7#b771 the ,secretary shall pay the ,state an amount equal to the product of-- 7i7 bonus premium percentage 7as defined in paragraph 7#c77 for the ,state1 market1 and year2 and 7ii7 the maximum ,state premium payment amount 7as defined in paragraph 7#d77 for the ,state1 market1 and year4 7,b7 ,for premium reductions in the individual market ,if the ,secretary determines that a ,state has reduced the average per capita premium for health insurance coverage in the individual market in year #c1 in year #f1 or in year #i below the premium baseline for such year1 the ,secretary shall pay the ,state an amount equal to the product of-- 7i7 bonus premium percentage for the ,state1 market1 and year2 and 7ii7 the maximum ,state premium payment amount for the ,state1 market1 and year4 7#b7 ,premium baseline ,for purposes of this subsection1 the term premium baseline means1 for a market in a ,state-- 7,a7 for year #a1 the average per capita premiums for health insurance coverage in such market in the ,state in such year2 or 7,b7 for a subsequent year1 the baseline for the market in the ,state for the previous year under this paragraph increased by a percentage specified in accordance with a formula established by the ,secretary1 in consultation with the ,congressional ,budget ,office and the ,bureau of the ,census1 that takes into account at least the following3 7i7 ,growth factor ,the inflation in the costs of inputs to health care services in the year4 7ii7 ,historic premium growth rates ,historic growth rates1 during the #aj years before year #a1 of per capita premiums for health insurance coverage4 7iii7 ,demographic considerations ,historic average changes in the demographics of the population covered that impact on the rate of growth of per capita health care costs4 7#c7 ,bonus premium percentage defined 7,a7 ,in general ,for purposes of this subsection1 the term bonus premium percentage means1 for the small group market or individual market in a ,state for a year1 such percentage as determined in accordance with the following table based on the ,state's premium performance level 7as defined in subparagraph 7,b77 for such market and year3 ,the bonus premium percentage for a ,state is--,for year #c if the premium performance level of the ,state is--,for year #f if the premium performance level of the ,state is--,for year #i if the premium performance level of the ,state is--#ajj percent at least #h4e at least #aa;at least #ac4e #ej percent at least #f4ch1 but less than #h4e;at least #aj4ch1 but less than #aa;at least #ab4hh1 but less than #ac4e #be percent at least #d4be1 but less than #f4ch at least #i4ge1 but less than #aj4ch at least #ab4be1 but less than #ab4hh #j percentless than #d4beless than #i4geless than #ab4be4 7,b7 ,premium performance level ,for purposes of this subsection1 the term premium performance level means1 for a ,state1 market1 and year1 the percentage reduction in the average per capita premiums for health insurance coverage for the ,state1 market1 and year1 as compared to the premium baseline for such ,state1 market1 and year4 7#d7 ,maximum ,state premium payment amount defined ,for purposes of this subsection1 the term maximum ,state premium payment amount means1 for a ,state for the small group market or the individual market for a year1 the product of-- 7,a7 the proportion 7as determined by the ,secretary71 of the number of nonelderly individuals lawfully residing in all the ,states who are enrolled in health insurance coverage in the respective market in the year1 who are residents of the ,state2 and 7,b7 the amount available for obligation from amounts appropriated under subsection 7d7 for such market with respect to performance in such year4 7#e7 ,methodology for calculating average per capita premiums 7,a7 ,establishment ,the ,secretary shall establish1 by rule and consistent with this subsection1 a methodology for computing the average per capita premiums for health insurance coverage for the small group market and for the individual market in each ,state for each year beginning with year #a4 7,b7 ,adjustments ,under such methodology1 the ,secretary shall provide for the following adjustments 7in a manner determined appropriate by the ,secretary73 7i7 ,exclusion of illegal aliens ,an adjustment so as not to take into account enrollees who are not lawfully present in the ,united ,states and their premium costs4 7ii7 ,treating ,state premium subsidies as premium costs ,an adjustment so as to increase per capita premiums to remove the impact of premium subsidies made directly by a ,state to reduce health insurance premiums4 7#f7 ,conditions of payment ,as a condition of receiving a payment under paragraph 7#a71 a ,state must agree to submit aggregate1 non-individually identifiable data to the ,secretary1 in a form and manner specified by the ,secretary1 for use by the ,secretary to determine the ,state's premium baseline and premium performance level for purposes of this subsection4 7b7 ,programs that reduce the number of uninsured 7#a7 ,in general ,if the ,secretary determines that a ,state has reduced the percentage of uninsured nonelderly residents in year #e1 year #g1 or year #i1 below the uninsured baseline 7as defined in paragraph 7#b77 for the ,state for the year1 the ,secretary shall pay the ,state an amount equal to the product of-- 7,a7 bonus uninsured percentage 7as defined in paragraph 7#c77 for the ,state and year2 and 7,b7 the maximum uninsured payment amount 7as defined in paragraph 7#d77 for the ,state and year4 7#b7 ,uninsured baseline 7,a7 ,in general ,for purposes of this subsection1 and subject to subparagraph 7,b71 the term uninsured baseline means1 for a ,state1 the percentage of nonelderly residents in the ,state who are uninsured in year #a4 7,b7 ,adjustment ,the ,secretary may1 at the written request of a ,state1 adjust the uninsured baseline for ,states for a year to take into account unanticipated and exceptional changes1 such as an unanticipated migration1 of nonelderly individuals into1 or out of1 ,states in a manner that does not reflect substantially the proportion of uninsured nonelderly residents in the ,states involved in year #a4 ,any such adjustment shall only be done in a manner that does not result in the average of the uninsured baselines for nonelderly residents for all ,states being changed4 7#c7 ,bonus uninsured percentage 7,a7 ,bonus uninsured percentage ,for purposes of this subsection1 the term bonus uninsured percentage means1 for a ,state for a year1 such percentage as determined in accordance with the following table1 based on the uninsured performance level 7as defined in subparagraph 7,b77 for such ,state and year3 ,the bonus uninsured percentage for a ,state is--,for year #e if the uninsured performance level of the ,state is--,for year #g if the uninsured performance level of the ,state is--,for year #i if the uninsured performance level of the ,state is--#ajj percent at least #aj at least #ae;at least #bj #ej percent at least #g4e but less than #aj;at least #ac4ge but less than #ae at least #ah4ge but less than #bjbe percent at least #e but less than #g4e;at least #ab4e but less than #ac4ge;at least #ag4e but less than #ah4gej percentless than #eless than #ab4eless than #ag4e4 7,b7 ,uninsured performance level ,for purposes of this subsection1 the term uninsured performance level means1 for a ,state for a year1 the reduction 7expressed as a percentage7 in the percentage of uninsured nonelderly residents in such ,state in the year as compared to the uninsured baseline for such ,state for such year4 7#d7 ,maximum ,state uninsured payment amount defined ,for purposes of this subsection1 the term maximum ,state uninsured payment amount means1 for a ,state for a year1 the product of-- 7,a7 the proportion 7as determined by the ,secretary71 of the number of uninsured nonelderly individuals lawfully residing in all the ,states in the year1 who are residents of the ,state2 and 7,b7 the amount available for obligation under this subsection from amounts appropriated under subsection 7d7 with respect to performance in such year4 7#e7 ,methodology for computing the percentage of uninsured nonelderly residents in a ,state 7,a7 ,establishment ,the ,secretary shall establish1 by rule and consistent with this subsection1 a methodology for computing the percentage of nonelderly residents in a ,state who are uninsured in each year beginning with year #a4 7,b7 ,rules 7i7 ,treatment of uninsured ,such methodology shall treat as uninsured those residents who do not have health insurance coverage or other creditable coverage 7as defined in section #ihja7;c77#a7 of the ,internal ,revenue ,code of #aihf71 except that such methodology shall rely upon data on the nonelderly and uninsured populations within each ,state in such year provided through population surveys conducted by federal agencies4 7ii7 ,limitation to nonelderly ,such methodology shall exclude individuals who are #fe years of age or older4 7iii7 ,exclusion of illegal aliens ,such methodology shall exclude individuals not lawfully present in the ,united ,states4 7#f7 ,conditions of payment ,as a condition of receiving a payment under paragraph 7#a71 a ,state must agree to submit aggregate1 non-individually identifiable data to the ,secretary1 in a form and manner specified by the ,secretary1 for use by the ,secretary in determining the ,state's uninsured baseline and uninsured performance level for purposes of this subsection4 7c7 ,definitions ,for purposes of this section3 7#a7 ,group health plan ,the term group health plan has the meaning given such term in section #ihcb7;a7 of the ,internal ,revenue ,code of #aihf4 7#b7 ,health insurance coverage ,the term health insurance coverage has the meaning given such term in section #ihcb7;b77#a7 of the ,internal ,revenue ,code of #aihf4 7#c7 ,individual market ,except as the ,secretary may otherwise provide in the case of group health plans that have fewer than #b participants as current employees on the first day of a plan year1 the term individual market means the market for health insurance coverage offered to individuals other than in connection with a group health plan4 7#d7 ,secretary ,the term ,secretary means the ,secretary of ,health and ,human ,services4 7#e7 ,small group market ,the term small group market means the market for health insurance coverage under which individuals obtain health insurance coverage 7directly or through any arrangement7 on behalf of themselves 7and their dependents7 through a group health plan maintained by an employer who employed on average at least #b but not more than #ej employees on business days during a calendar year4 7#f7 ,state ,the term ,state means any of the #ej ,states and the ,district of ,columbia4 7#g7 ,years ,the terms year #a1 year #b1 year #c1 and similar subsequently numbered years mean #bjad1 #bjae1 #bjaf1 and subsequent sequentially numbered years4 7d7 ,appropriations2 payments 7#a7 ,payments for reductions in cost of health insurance coverage 7,a7 ,small group market 7i7 ,in general ,from any funds in the ,treasury not otherwise appropriated1 there is appropriated for payments under subsection 7a77#a77;,a7-- 7,i7 #ah1jjj1jjj1jjj with respect to performance in year #c2 7,,ii7 #e1jjj1jjj1jjj with respect to performance in year #f2 and 7,,iii7 #b1jjj1jjj1jjj with respect to performance in year #i4 7ii7 ,availability of appropriated funds ,funds appropriated under clause 7i7 shall remain available until expended4 7,b7 ,individual market 7i7 ,in general ,subject to clause 7ii71 from any funds in the ,treasury not otherwise appropriated1 there is appropriated for payments under subsection 7a77#a77;,b7-- 7,i7 #g1jjj1jjj1jjj with respect to performance in year #c2 7,,ii7 #b1jjj1jjj1jjj with respect to performance in year #f2 and 7,,iii7 #a1jjj1jjj1jjj with respect to performance in year #i4 7ii7 ,availability of appropriated funds ,of the funds appropriated under clause 7i7 that are not expended or obligated by the end of the year following the year for which the funds are appropriated-- 7,i7 #ge percent shall remain available until expended for payments under subsection 7a77#a77;,b72 and 7,,ii7 #be percent shall remain available until expended for payments under subsection 7a77#a77;,a74 7#b7 ,payments for reductions in the percentage of uninsured 7,a7 ,in general ,from any funds in the ,treasury not otherwise appropriated1 there is appropriated for payments under subsection 7b77#a7-- 7i7 #aj1jjj1jjj1jjj with respect to performance in year #e2 7ii7 #c1jjj1jjj1jjj with respect to performance in year #g2 and 7iii7 #b1jjj1jjj1jjj with respect to performance in year #i4 7,b7 ,availability of appropriated funds ,funds appropriated under subparagraph 7,a7 shall remain available until expended4 7#c7 ,payment timing ,payments under this section shall be made in a form and manner specified by the ,secretary in the year after the performance year involved4 #fab4 ,health plan finders 7a7 ,state plan finders ,not later than #ab months after the date of the enactment of this ,act1 each ,state may contract with a private entity to develop and operate a plan finder website 7referred to in this section as a ,state plan finder7 which shall provide information to individuals in such ,state on plans of health insurance coverage that are available to individuals in such ,state 7in this section referred to as a health insurance plan74 ,such ,state may not operate a plan finder itself4 7b7 ,multi-,state plan finders 7#a7 ,in general ,a private entity may operate a multi-,state finder that operates under this section in the ,states involved in the same manner as a ,state plan finder would operate in a single ,state4 7#b7 ,sharing of information ,states shall regulate the manner in which data is shared between plan finders to ensure consistency and accuracy in the information about health insurance plans contained in such finders4 7c7 ,requirements for plan finders ,each plan finder shall meet the following requirements3 7#a7 ,the plan finder shall ensure that each health insurance plan in the plan finder meets the requirements for such plans under subsection 7d74 7#b7 ,the plan finder shall present complete information on the costs and benefits of health insurance plans 7including information on monthly premium1 copayments1 and deductibles7 in a uniform manner that-- 7,a7 uses the standard definitions developed under paragraph 7#c72 and 7,b7 is designed to allow consumers to easily compare such plans4 7#c7 ,the plan finder shall be available on the ,internet and accessible to all individuals in the ,state or1 in the case of a multi-,state plan finder1 in all ,states covered by the multi-,state plan finder4 7#d7 ,the plan finder shall allow consumers to search and sort data on the health insurance plans in the plan finder on criteria such as coverage of specific benefits 7such as coverage of disease management services or pediatric care services71 as well as data available on quality4 7#e7 ,the plan finder shall meet all relevant ,state laws and regulations1 including laws and regulations related to the marketing of insurance products4 ,in the case of a multi-,state plan finder1 the finder shall meet such laws and regulations for all of the ,states involved4 7#f7 ,the plan finder shall meet solvency1 financial1 and privacy requirements established by the ,state or ,states in which the plan finder operates or the ,secretary for multi-,state finders4 7#g7 ,the plan finder and the employees of the plan finder shall be appropriately licensed in the ,state or ,states in which the plan finder operates1 if such licensure is required by such ,state or ,states4 7#h7 ,notwithstanding subsection 7f77#a71 the plan finder shall assist individuals who are eligible for the ,medicaid program under title ,,xix of the ,social ,security ,act or ,state ,children's ,health ,insurance ,program under title ,,xxi of such ,act by including information on ,medicaid options1 eligibility1 and how to enroll4 7d7 ,requirements for plans participating in a plan finder 7#a7 ,in general ,each ,state shall ensure that health insurance plans participating in the ,state plan finder or in a multi-,state plan finder meet the requirements of paragraph 7#b7 7relating to adequacy of insurance coverage1 consumer protection1 and financial strength74 7#b7 ,specific requirements ,in order to participate in a plan finder1 a health insurance plan must meet all of the following requirements1 as determined by each ,state in which such plan operates3 7,a7 ,the health insurance plan shall be actuarially sound4 7,b7 ,the health insurance plan may not have a history of abusive policy rescissions4 7,c7 ,the health insurance plan shall meet financial and solvency requirements4 7,d7 ,the health insurance plan shall disclose-- 7i7 all financial arrangements involving the sale and purchase of health insurance1 such as the payment of fees and commissions2 and 7ii7 such arrangements may not be abusive4 7,e7 ,the health insurance plan shall maintain electronic health records that comply with the requirements of the ,american ,recovery and ,reinvestment ,act of #bjji 7,public ,law #aaa-e7 related to electronic health records4 7,f7 ,the health insurance plan shall make available to plan enrollees via the finder1 whether by information provided to the finder or by a website link directing the enrollee from the finder to the health insurance plan website1 data that includes the price and cost to the individual of services offered by a provider according to the terms and conditions of the health plan4 ,data described in this paragraph is not made public by the finder1 only made available to the individual once enrolled in the health plan4 7e7 ,prohibitions 7#a7 ,direct ,enrollment ,the ,state plan finder may not directly enroll individuals in health insurance plans4 7#b7 ,conflicts of interest 7,a7 ,companies ,a health insurance issuer offering a health insurance plan through a plan finder may not-- 7i7 be the private entity developing and maintaining a plan finder under subsections 7a7 and 7b72 or 7ii7 have an ownership interest in such private entity or in the plan finder4 7,b7 ,individuals ,an individual employed by a health insurance issuer offering a health insurance plan through a plan finder may not serve as a director or officer for-- 7i7 the private entity developing and maintaining a plan finder under subsections 7a7 and 7b72 or 7ii7 the plan finder4 7f7 ,construction ,nothing in this section shall be construed to allow the ,secretary authority to regulate benefit packages or to prohibit health insurance brokers and agents from-- 7#a7 utilizing the plan finder for any purpose2 or 7#b7 marketing or offering health insurance products4 7g7 ,plan finder defined ,for purposes of this section1 the term plan finder means a ,state plan finder under subsection 7a7 or a multi-,state plan finder under subsection 7b74 7h7 ,state defined ,in this section1 the term ,state has the meaning given such term for purposes of title ,,xix of the ,social ,security ,act4 #fac4 ,administrative simplification 7a7 ,operating ,rules for ,health ,information ,transactions 7#a7 ,definition of operating rules ,section #aaga of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;d7 is amended by adding at the end the following3 7#i7 ,operating rules ,the term operating rules means the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications as adopted for purposes of this part4 4 7#b7 ,operating rules and compliance ,section #aagc of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;d-#b7 is amended-- 7,a7 in subsection 7a77#b71 by adding at the end the following new subparagraph3 7,j7 ,electronic funds transfers4 2 and 7,b7 by adding at the end the following new subsections3 7g7 ,operating rules 7#a7 ,in general ,the ,secretary shall adopt a single set of operating rules for each transaction described in subsection 7a77#b7 with the goal of creating as much uniformity in the implementation of the electronic standards as possible4 ,such operating rules shall be consensus-based and reflect the necessary business rules affecting health plans and health care providers and the manner in which they operate pursuant to standards issued under ,health ,insurance ,portability and ,accountability ,act of #aiif4 7#b7 ,operating rules development ,in adopting operating rules under this subsection1 the ,secretary shall rely on recommendations for operating rules developed by a qualified nonprofit entity1 as selected by the ,secretary1 that meets the following requirements3 7,a7 ,the entity focuses its mission on administrative simplification4 7,b7 ,the entity demonstrates an established multi-stakeholder and consensus-based process for development of operating rules1 including representation by or participation from health plans1 health care providers1 vendors1 relevant ,federal agencies1 and other standard development organizations4 7,c7 ,the entity has established a public set of guiding principles that ensure the operating rules and process are open and transparent4 7,d7 ,the entity coordinates its activities with the ,,hit ,policy ,committee and the ,,hit ,standards ,committee 7as established under title ,,xxx of the ,public ,health ,service ,act7 and complements the efforts of the ,office of the ,national ,healthcare ,coordinator and its related health information exchange goals4 7,e7 ,the entity incorporates national standards1 including the transaction standards issued under ,health ,insurance ,portability and ,accountability ,act of #aiif4 7,f7 ,the entity supports nondiscrimination and conflict of interest policies that demonstrate a commitment to open1 fair1 and nondiscriminatory practices4 7,g7 ,the entity allows for public review and updates of the operating rules4 7#c7 ,review and recommendations ,the ,national ,committee on ,vital and ,health ,statistics shall-- 7,a7 review the operating rules developed by a nonprofit entity described under paragraph 7#b72 7,b7 determine whether such rules represent a consensus view of the health care industry and are consistent with and do not alter current standards2 7,c7 evaluate whether such rules are consistent with electronic standards adopted for health information technology2 and 7,d7 submit to the ,secretary a recommendation as to whether the ,secretary should adopt such rules4 7#d7 ,implementation 7,a7 ,in general ,the ,secretary shall adopt operating rules under this subsection1 by regulation in accordance with subparagraph 7,c71 following consideration of the rules developed by the non-profit entity described in paragraph 7#b7 and the recommendation submitted by the ,national ,committee on ,vital and ,health ,statistics under paragraph 7#c77;,d7 and having ensured consultation with providers4 7,b7 ,adoption requirements2 effective dates 7i7 ,eligibility for a health plan and health claim status ,the set of operating rules for transactions for eligibility for a health plan and health claim status shall be adopted not later than ,july #a1 #bjae1 in a manner ensuring that such rules are effective not later than ,january #a1 #bjag1 and may allow for the use of a machine readable identification card4 7ii7 ,electronic funds transfers and health care payment and remittance advice ,the set of operating rules for electronic funds transfers and health care payment and remittance advice shall be adopted not later than ,july #a1 #bjaf1 in a manner ensuring that such rules are effective not later than ,january #a1 #bjah4 7iii7 ,other completed transactions ,the set of operating rules for the remainder of the completed transactions described in subsection 7a77#b71 including health claims or equivalent encounter information1 enrollment and disenrollment in a health plan1 health plan premium payments1 and referral certification and authorization1 shall be adopted not later than ,july #a1 #bjah1 in a manner ensuring that such rules are effective not later than ,january #a1 #bjbj4 7,c7 ,expedited rulemaking ,the ,secretary shall promulgate an interim final rule applying any standard or operating rule recommended by the ,national ,committee on ,vital and ,health ,statistics pursuant to paragraph 7#c74 ,the ,secretary shall accept public comments on any interim final rule published under this subparagraph for #fj days after the date of such publication4 7h7 ,compliance 7#a7 ,health plan certification 7,a7 ,eligibility for a health plan1 health claim status1 electronic funds transfers1 health care payment and remittance advice ,not later than ,december #ca1 #bjag1 a health plan shall file a statement with the ,secretary1 in such form as the ,secretary may require1 certifying that the data and information systems for such plan are in compliance with any applicable standards 7as described under paragraph 7#g7 of section #aaga7 and operating rules 7as described under paragraph 7#i7 of such section7 for electronic funds transfers1 eligibility for a health plan1 health claim status1 and health care payment and remittance advice1 respectively4 7,b7 ,other completed transactions ,not later than ,december #ca1 #bjai1 a health plan shall file a statement with the ,secretary1 in such form as the ,secretary may require1 certifying that the data and information systems for such plan are in compliance with any applicable standards and operating rules for the remainder of the completed transactions described in subsection 7a77#b71 including health claims or equivalent encounter information1 enrollment and disenrollment in a health plan1 health plan premium payments1 and referral certification and authorization1 respectively4 ,a health plan shall provide the same level of documentation to certify compliance with such transactions as is required to certify compliance with the transactions specified in subparagraph 7,a74 7#b7 ,documentation of compliance ,a health plan shall provide the ,secretary1 in such form as the ,secretary may require1 with adequate documentation of compliance with the standards and operating rules described under paragraph 7#a74 ,a health plan shall not be considered to have provided adequate documentation and shall not be certified as being in compliance with such standards1 unless the health plan-- 7,a7 demonstrates to the ,secretary that the plan conducts the electronic transactions specified in paragraph 7#a7 in a manner that fully complies with the regulations of the ,secretary2 and 7,b7 provides documentation showing that the plan has completed end-to-end testing for such transactions with their partners1 such as hospitals and physicians4 7#c7 ,service contracts ,a health plan shall be required to comply with any applicable certification and compliance requirements 7and provide the ,secretary with adequate documentation of such compliance7 under this subsection for any entities that provide services pursuant to a contract with such health plan4 7#d7 ,certification by outside entity ,the ,secretary may contract with an independent1 outside entity to certify that a health plan has complied with the requirements under this subsection1 provided that the certification standards employed by such entities are in accordance with any standards or rules issued by the ,secretary4 7#e7 ,compliance with revised standards and rules ,a health plan 7including entities described under paragraph 7#c77 shall comply with the certification and documentation requirements under this subsection for any interim final rule promulgated by the ,secretary under subsection 7i7 that amends any standard or operating rule described under paragraph 7#a7 of this subsection4 ,a health plan shall comply with such requirements not later than the effective date of the applicable interim final rule4 7#f7 ,audits of health plans ,the ,secretary shall conduct periodic audits to ensure that health plans 7including entities described under paragraph 7#c77 are in compliance with any standards and operating rules that are described under paragraph 7#a74 7i7 ,review and amendment of standards and rules 7#a7 ,establishment ,not later than ,january #a1 #bjah1 the ,secretary shall establish a review committee 7as described under paragraph 7#d774 7#b7 ,evaluations and ,reports 7,a7 ,hearings ,not later than ,april #a1 #bjah1 and not less than biennially thereafter1 the ,secretary1 acting through the review committee1 shall conduct hearings to evaluate and review the existing standards and operating rules established under this section4 7,b7 ,report ,not later than ,july #a1 #bjah1 and not less than biennially thereafter1 the review committee shall provide recommendations for updating and improving such standards and rules4 ,the review committee shall recommend a single set of operating rules per transaction standard and maintain the goal of creating as much uniformity as possible in the implementation of the electronic standards4 7#c7 ,interim final rulemaking 7,a7 ,in general ,any recommendations to amend existing standards and operating rules that have been approved by the review committee and reported to the ,secretary under paragraph 7#b77;,b7 shall be adopted by the ,secretary through promulgation of an interim final rule not later than #ij days after receipt of the committee's report4 7,b7 ,public comment 7i7 ,public comment period ,the ,secretary shall accept public comments on any interim final rule published under this paragraph for #fj days after the date of such publication4 7ii7 ,effective date ,the effective date of any amendment to existing standards or operating rules that is adopted through an interim final rule published under this paragraph shall be #be months following the close of such public comment period4 7#d7 ,review committee 7,a7 ,definition ,for the purposes of this subsection1 the term review committee means a committee within the ,department of ,health and ,human services that has been designated by the ,secretary to carry out this subsection1 including-- 7i7 the ,national ,committee on ,vital and ,health ,statistics2 or 7ii7 any appropriate committee as determined by the ,secretary4 7,b7 ,coordination of ,,hit ,standards ,in developing recommendations under this subsection1 the review committee shall consider the standards approved by the ,office of the ,national ,coordinator for ,health ,information ,technology4 7j7 ,penalties 7#a7 ,penalty fee 7,a7 ,in general ,not later than ,april #a1 #bjah1 and annually thereafter1 the ,secretary shall assess a penalty fee 7as determined under subparagraph 7,b77 against a health plan that has failed to meet the requirements under subsection 7h7 with respect to certification and documentation of compliance with the standards 7and their operating rules7 as described under paragraph 7#a7 of such subsection4 7,b7 ,fee amount ,subject to subparagraphs 7,c71 7,d71 and 7,e71 the ,secretary shall assess a penalty fee against a health plan in the amount of #a per covered life until certification is complete4 ,the penalty shall be assessed per person covered by the plan for which its data systems for major medical policies are not in compliance and shall be imposed against the health plan for each day that the plan is not in compliance with the requirements under subsection 7h74 7,c7 ,additional penalty for misrepresentation ,a health plan that knowingly provides inaccurate or incomplete information in a statement of certification or documentation of compliance under subsection 7h7 shall be subject to a penalty fee that is double the amount that would otherwise be imposed under this subsection4 7,d7 ,annual fee increase ,the amount of the penalty fee imposed under this subsection shall be increased on an annual basis by the annual percentage increase in total national health care expenditures1 as determined by the ,secretary4 7,e7 ,penalty limit ,a penalty fee assessed against a health plan under this subsection shall not exceed1 on an annual basis-- 7i7 an amount equal to #bj per covered life under such plan2 or 7ii7 an amount equal to #dj per covered life under the plan if such plan has knowingly provided inaccurate or incomplete information 7as described under subparagraph 7,c774 7,f7 ,determination of covered individuals ,the ,secretary shall determine the number of covered lives under a health plan based upon the most recent statements and filings that have been submitted by such plan to the ,securities and ,exchange ,commission4 7#b7 ,notice and ,dispute ,procedure ,the ,secretary shall establish a procedure for assessment of penalty fees under this subsection that provides a health plan with reasonable notice and a dispute resolution procedure prior to provision of a notice of assessment by the ,secretary of the ,treasury 7as described under paragraph 7#d77;,b774 7#c7 ,penalty fee report ,not later than ,may #a1 #bjah1 and annually thereafter1 the ,secretary shall provide the ,secretary of the ,treasury with a report identifying those health plans that have been assessed a penalty fee under this subsection4 7#d7 ,collection of penalty fee 7,a7 ,in ,general ,the ,secretary of the ,treasury1 acting through the ,financial ,management ,service1 shall administer the collection of penalty fees from health plans that have been identified by the ,secretary in the penalty fee report provided under paragraph 7#c74 7,b7 ,notice ,not later than ,august #a1 #bjah1 and annually thereafter1 the ,secretary of the ,treasury shall provide notice to each health plan that has been assessed a penalty fee by the ,secretary under this subsection4 ,such notice shall include the amount of the penalty fee assessed by the ,secretary and the due date for payment of such fee to the ,secretary of the ,treasury 7as described in subparagraph 7,c774 7,c7 ,payment due date ,payment by a health plan for a penalty fee assessed under this subsection shall be made to the ,secretary of the ,treasury not later than ,november #a1 #bjah1 and annually thereafter4 7,d7 ,unpaid penalty fees ,any amount of a penalty fee assessed against a health plan under this subsection for which payment has not been made by the due date provided under subparagraph 7,c7 shall be-- 7i7 increased by the interest accrued on such amount1 as determined pursuant to the underpayment rate established under section #ffja of the ,internal ,revenue ,code of #aihf2 and 7ii7 treated as a past-due1 legally enforceable debt owed to a ,federal agency for purposes of section #fdjb7;d7 of the ,internal ,revenue ,code of #aihf4 7,e7 ,administrative fees ,any fee charged or allocated for collection activities conducted by the ,financial ,management ,service will be passed on to a health plan on a pro-rata basis and added to any penalty fee collected from the plan4 4 7b7 ,promulgation of rules 7#a7 ,unique health plan identifier ,the ,secretary shall promulgate a final rule to establish a unique health plan identifier 7as described in section #aagc7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;d-#b7;b777 based on the input of the ,national ,committee of ,vital and ,health ,statistics4 ,the ,secretary may do so on an interim final basis and such rule shall be effective not later than ,october #a1 #bjaf4 7#b7 ,electronic funds transfer ,the ,secretary shall promulgate a final rule to establish a standard for electronic funds transfers 7as described in section #aagc7;a77#b77;,j7 of the ,social ,security ,act1 as added by subsection 7a77#b77;,a774 ,the ,secretary may do so on an interim final basis and shall adopt such standard not later than ,january #a1 #bjaf1 in a manner ensuring that such standard is effective not later than ,january #a1 #bjah4 7c7 ,expansion of electronic transactions in ,medicare ,section #ahfb7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciey7a77 is amended-- 7#a7 in paragraph 7#bc71 by striking the or at the end2 7#b7 in paragraph 7#bd71 by striking the period and inserting 2 or2 and 7#c7 by inserting after paragraph 7#bd7 the following new paragraph3 7#be7 not later than ,january #a1 #bjah1 for which the payment is other than by electronic funds transfer 7,,eft7 or an electronic remittance in a form as specified in ,,asc ,x#ab #hce ,health ,care ,payment and ,remittance ,advice or subsequent standard4 4 7d7 ,medicare and medicaid compliance reports ,not later than ,july #a1 #bjag1 the ,secretary of ,health and ,human ,services shall submit a report to the chairs and ranking members of the ,committee on ,ways and ,means and the ,committee on ,energy and ,commerce of the ,house of ,representatives and the chairs and ranking members of the ,committee on ,health1 ,education1 ,labor1 and ,pensions and the ,committee on ,finance of the ,senate on the extent to which the ,medicare program and providers that serve beneficiaries under that program1 and ,state ,medicaid programs and providers that serve beneficiaries under those programs1 transact electronically in accordance with transaction standards issued under the ,health ,insurance ,portability and ,accountability ,act of #aiif1 part ,c of title ,,xi of the ,social ,security ,act1 and regulations promulgated under such ,acts4 ,b ,improving ,access to ,health ,care #a ,expanding ,access and ,lowering ,costs for ,small ,businesses #fbj4 ,short title ,this chapter may be cited as the ,small ,business ,health ,fairness ,act of #bjac4 #fba4 ,rules governing association health plans 7a7 ,in ,general ,subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd is amended by adding after part #g the following new part3 #h ,,rules ,,governing ,,association ,,health ,,plans #hja4 ,association health plans 7a7 ,in ,general ,for purposes of this part1 the term association health plan means a group health plan whose sponsor is 7or is deemed under this part to be7 described in subsection 7b74 7b7 ,sponsorship ,the sponsor of a group health plan is described in this subsection if such sponsor-- 7#a7 is organized and maintained in good faith1 with a constitution and bylaws specifically stating its purpose and providing for periodic meetings on at least an annual basis1 as a bona fide trade association1 a bona fide industry association 7including a rural electric cooperative association or a rural telephone cooperative association71 a bona fide professional association1 or a bona fide chamber of commerce 7or similar bona fide business association1 including a corporation or similar organization that operates on a cooperative basis 7within the meaning of section #acha of the ,internal ,revenue ,code of #aihf771 for substantial purposes other than that of obtaining or providing medical care2 7#b7 is established as a permanent entity which receives the active support of its members and requires for membership payment on a periodic basis of dues or payments necessary to maintain eligibility for membership in the sponsor2 and 7#c7 does not condition membership1 such dues or payments1 or coverage under the plan on the basis of health status-related factors with respect to the employees of its members 7or affiliated members71 or the dependents of such employees1 and does not condition such dues or payments on the basis of group health plan participation4 ,any sponsor consisting of an association of entities which meet the requirements of paragraphs 7#a71 7#b71 and 7#c7 shall be deemed to be a sponsor described in this subsection4 #hjb4 ,certification of association health plans 7a7 ,in ,general ,the applicable authority shall prescribe by regulation a procedure under which1 subject to subsection 7b71 the applicable authority shall certify association health plans which apply for certification as meeting the requirements of this part4 7b7 ,standards ,under the procedure prescribed pursuant to subsection 7a71 in the case of an association health plan that provides at least one benefit option which does not consist of health insurance coverage1 the applicable authority shall certify such plan as meeting the requirements of this part only if the applicable authority is satisfied that the applicable requirements of this part are met 7or1 upon the date on which the plan is to commence operations1 will be met7 with respect to the plan4 7c7 ,requirements ,applicable to ,certified ,plans ,an association health plan with respect to which certification under this part is in effect shall meet the applicable requirements of this part1 effective on the date of certification 7or1 if later1 on the date on which the plan is to commence operations74 7d7 ,requirements for ,continued ,certification ,the applicable authority may provide by regulation for continued certification of association health plans under this part4 7e7 ,class ,certification for ,fully ,insured ,plans ,the applicable authority shall establish a class certification procedure for association health plans under which all benefits consist of health insurance coverage4 ,under such procedure1 the applicable authority shall provide for the granting of certification under this part to the plans in each class of such association health plans upon appropriate filing under such procedure in connection with plans in such class and payment of the prescribed fee under section #hjg7;a74 7f7 ,certification of ,self-,insured ,association ,health ,plans ,an association health plan which offers one or more benefit options which do not consist of health insurance coverage may be certified under this part only if such plan consists of any of the following3 7#a7 a plan which offered such coverage on the date of the enactment of the ,small ,business ,health ,fairness ,act of #bjac1 7#b7 a plan under which the sponsor does not restrict membership to one or more trades and businesses or industries and whose eligible participating employers represent a broad cross-section of trades and businesses or industries1 or 7#c7 a plan whose eligible participating employers represent one or more trades or businesses1 or one or more industries1 consisting of any of the following3 agriculture2 equipment and automobile dealerships2 barbering and cosmetology2 certified public accounting practices2 child care2 construction2 dance1 theatrical and orchestra productions2 disinfecting and pest control2 financial services2 fishing2 food service establishments2 hospitals2 labor organizations2 logging2 manufacturing 7metals72 mining2 medical and dental practices2 medical laboratories2 professional consulting services2 sanitary services2 transportation 7local and freight72 warehousing2 wholesaling_/distributing2 or any other trade or business or industry which has been indicated as having average or above-average risk or health claims experience by reason of ,state rate filings1 denials of coverage1 proposed premium rate levels1 or other means demonstrated by such plan in accordance with regulations4 #hjc4 ,requirements relating to sponsors and boards of trustees 7a7 ,sponsor ,the requirements of this subsection are met with respect to an association health plan if the sponsor has met 7or is deemed under this part to have met7 the requirements of section #hja7;b7 for a continuous period of not less than #c years ending with the date of the application for certification under this part4 7b7 ,board of ,trustees ,the requirements of this subsection are met with respect to an association health plan if the following requirements are met3 7#a7 ,fiscal control ,the plan is operated1 pursuant to a trust agreement1 by a board of trustees which has complete fiscal control over the plan and which is responsible for all operations of the plan4 7#b7 ,rules of operation and financial controls ,the board of trustees has in effect rules of operation and financial controls1 based on a #c-year plan of operation1 adequate to carry out the terms of the plan and to meet all requirements of this title applicable to the plan4 7#c7 ,rules governing relationship to participating employers and to contractors 7,a7 ,board membership 7i7 ,in general ,except as provided in clauses 7ii7 and 7iii71 the members of the board of trustees are individuals selected from individuals who are the owners1 officers1 directors1 or employees of the participating employers or who are partners in the participating employers and actively participate in the business4 7ii7 ,limitation 7,i7 ,general rule ,except as provided in subclauses 7,,ii7 and 7,,iii71 no such member is an owner1 officer1 director1 or employee of1 or partner in1 a contract administrator or other service provider to the plan4 7,,ii7 ,limited exception for providers of services solely on behalf of the sponsor ,officers or employees of a sponsor which is a service provider 7other than a contract administrator7 to the plan may be members of the board if they constitute not more than #be percent of the membership of the board and they do not provide services to the plan other than on behalf of the sponsor4 7,,iii7 ,treatment of providers of medical care ,in the case of a sponsor which is an association whose membership consists primarily of providers of medical care1 subclause 7,i7 shall not apply in the case of any service provider described in subclause 7,i7 who is a provider of medical care under the plan4 7iii7 ,certain plans excluded ,clause 7i7 shall not apply to an association health plan which is in existence on the date of the enactment of the ,small ,business ,health ,fairness ,act of #bjac4 7,b7 ,sole authority ,the board has sole authority under the plan to approve applications for participation in the plan and to contract with a service provider to administer the day-to-day affairs of the plan4 7c7 ,treatment of ,franchise ,networks ,in the case of a group health plan which is established and maintained by a franchiser for a franchise network consisting of its franchisees-- 7#a7 the requirements of subsection 7a7 and section #hja7;a7 shall be deemed met if such requirements would otherwise be met if the franchiser were deemed to be the sponsor referred to in section #hja7;b71 such network were deemed to be an association described in section #hja7;b71 and each franchisee were deemed to be a member 7of the association and the sponsor7 referred to in section #hja7;b72 and 7#b7 the requirements of section #hjd7;a77#a7 shall be deemed met4 ,the ,secretary may by regulation define for purposes of this subsection the terms franchiser1 franchise network1 and franchisee4 #hjd4 ,participation and coverage requirements 7a7 ,covered ,employers and ,individuals ,the requirements of this subsection are met with respect to an association health plan if1 under the terms of the plan-- 7#a7 each participating employer must be-- 7,a7 a member of the sponsor1 7,b7 the sponsor1 or 7,c7 an affiliated member of the sponsor with respect to which the requirements of subsection 7b7 are met1 except that1 in the case of a sponsor which is a professional association or other individual-based association1 if at least one of the officers1 directors1 or employees of an employer1 or at least one of the individuals who are partners in an employer and who actively participates in the business1 is a member or such an affiliated member of the sponsor1 participating employers may also include such employer2 and 7#b7 all individuals commencing coverage under the plan after certification under this part must be-- 7,a7 active or retired owners 7including self-employed individuals71 officers1 directors1 or employees of1 or partners in1 participating employers2 or 7,b7 the beneficiaries of individuals described in subparagraph 7,a74 7b7 ,coverage of ,previously ,uninsured ,employees ,in the case of an association health plan in existence on the date of the enactment of the ,small ,business ,health ,fairness ,act of #bjac1 an affiliated member of the sponsor of the plan may be offered coverage under the plan as a participating employer only if-- 7#a7 the affiliated member was an affiliated member on the date of certification under this part2 or 7#b7 during the #ab-month period preceding the date of the offering of such coverage1 the affiliated member has not maintained or contributed to a group health plan with respect to any of its employees who would otherwise be eligible to participate in such association health plan4 7c7 ,individual ,market ,unaffected ,the requirements of this subsection are met with respect to an association health plan if1 under the terms of the plan1 no participating employer may provide health insurance coverage in the individual market for any employee not covered under the plan which is similar to the coverage contemporaneously provided to employees of the employer under the plan1 if such exclusion of the employee from coverage under the plan is based on a health status-related factor with respect to the employee and such employee would1 but for such exclusion on such basis1 be eligible for coverage under the plan4 7d7 ,prohibition of ,discrimination ,against ,employers and ,employees ,eligible ,to ,participate ,the requirements of this subsection are met with respect to an association health plan if-- 7#a7 under the terms of the plan1 all employers meeting the preceding requirements of this section are eligible to qualify as participating employers for all geographically available coverage options1 unless1 in the case of any such employer1 participation or contribution requirements of the type referred to in section #bgaa of the ,public ,health ,service ,act are not met2 7#b7 upon request1 any employer eligible to participate is furnished information regarding all coverage options available under the plan2 and 7#c7 the applicable requirements of sections #gja1 #gjb1 and #gjc are met with respect to the plan4 #hje4 ,other requirements relating to plan documents1 contribution rates1 and benefit options 7a7 ,in ,general ,the requirements of this section are met with respect to an association health plan if the following requirements are met3 7#a7 ,contents of governing instruments ,the instruments governing the plan include a written instrument1 meeting the requirements of an instrument required under section #djb7;a77#a71 which-- 7,a7 provides that the board of trustees serves as the named fiduciary required for plans under section #djb7;a77#a7 and serves in the capacity of a plan administrator 7referred to in section #c7af77;,a772 7,b7 provides that the sponsor of the plan is to serve as plan sponsor 7referred to in section #c7af77;,b772 and 7,c7 incorporates the requirements of section #hjf4 7#b7 ,contribution rates must be nondiscriminatory 7,a7 ,the contribution rates for any participating small employer do not vary on the basis of any health status-related factor in relation to employees of such employer or their beneficiaries and do not vary on the basis of the type of business or industry in which such employer is engaged4 7,b7 ,nothing in this title or any other provision of law shall be construed to preclude an association health plan1 or a health insurance issuer offering health insurance coverage in connection with an association health plan1 from-- 7i7 setting contribution rates based on the claims experience of the plan2 or 7ii7 varying contribution rates for small employers in a ,state to the extent that such rates could vary using the same methodology employed in such ,state for regulating premium rates in the small group market with respect to health insurance coverage offered in connection with bona fide associations 7within the meaning of section #bgia7;d77#c7 of the ,public ,health ,service ,act71 subject to the requirements of section #gjb7;b7 relating to contribution rates4 7#c7 ,floor for number of covered individuals with respect to certain plans ,if any benefit option under the plan does not consist of health insurance coverage1 the plan has as of the beginning of the plan year not fewer than #a1jjj participants and beneficiaries4 7#d7 ,marketing requirements 7,a7 ,in general ,if a benefit option which consists of health insurance coverage is offered under the plan1 ,state-licensed insurance agents shall be used to distribute to small employers coverage which does not consist of health insurance coverage in a manner comparable to the manner in which such agents are used to distribute health insurance coverage4 7,b7 ,state-licensed insurance agents ,for purposes of subparagraph 7,a71 the term ,state-licensed insurance agents means one or more agents who are licensed in a ,state and are subject to the laws of such ,state relating to licensure1 qualification1 testing1 examination1 and continuing education of persons authorized to offer1 sell1 or solicit health insurance coverage in such ,state4 7#e7 ,regulatory requirements ,such other requirements as the applicable authority determines are necessary to carry out the purposes of this part1 which shall be prescribed by the applicable authority by regulation4 7b7 ,ability of ,association ,health ,plans ,to ,design ,benefit ,options ,subject to section #ead7;d71 nothing in this part or any provision of ,state law 7as defined in section #ead7;c77#a77 shall be construed to preclude an association health plan1 or a health insurance issuer offering health insurance coverage in connection with an association health plan1 from exercising its sole discretion in selecting the specific items and services consisting of medical care to be included as benefits under such plan or coverage1 except 7subject to section #ead7 in the case of 7#a7 any law to the extent that it is not preempted under section #gca7;a77#a7 with respect to matters governed by section #gaa1 #gab1 or #gac1 or 7#b7 any law of the ,state with which filing and approval of a policy type offered by the plan was initially obtained to the extent that such law prohibits an exclusion of a specific disease from such coverage4 #hjf4 ,maintenance of reserves and provisions for solvency for plans providing health benefits in addition to health insurance coverage 7a7 ,in ,general ,the requirements of this section are met with respect to an association health plan if-- 7#a7 the benefits under the plan consist solely of health insurance coverage2 or 7#b7 if the plan provides any additional benefit options which do not consist of health insurance coverage1 the plan-- 7,a7 establishes and maintains reserves with respect to such additional benefit options1 in amounts recommended by the qualified actuary1 consisting of-- 7i7 a reserve sufficient for unearned contributions2 7ii7 a reserve sufficient for benefit liabilities which have been incurred1 which have not been satisfied1 and for which risk of loss has not yet been transferred1 and for expected administrative costs with respect to such benefit liabilities2 7iii7 a reserve sufficient for any other obligations of the plan2 and 7iv7 a reserve sufficient for a margin of error and other fluctuations1 taking into account the specific circumstances of the plan2 and 7,b7 establishes and maintains aggregate and specific excess_/stop loss insurance and solvency indemnification1 with respect to such additional benefit options for which risk of loss has not yet been transferred1 as follows3 7i7 ,the plan shall secure aggregate excess_/stop loss insurance for the plan with an attachment point which is not greater than #abe percent of expected gross annual claims4 ,the applicable authority may by regulation provide for upward adjustments in the amount of such percentage in specified circumstances in which the plan specifically provides for and maintains reserves in excess of the amounts required under subparagraph 7,a74 7ii7 ,the plan shall secure specific excess_/stop loss insurance for the plan with an attachment point which is at least equal to an amount recommended by the plan's qualified actuary4 ,the applicable authority may by regulation provide for adjustments in the amount of such insurance in specified circumstances in which the plan specifically provides for and maintains reserves in excess of the amounts required under subparagraph 7,a74 7iii7 ,the plan shall secure indemnification insurance for any claims which the plan is unable to satisfy by reason of a plan termination4 ,any person issuing to a plan insurance described in clause 7i71 7ii71 or 7iii7 of subparagraph 7,b7 shall notify the ,secretary of any failure of premium payment meriting cancellation of the policy prior to undertaking such a cancellation4 ,any regulations prescribed by the applicable authority pursuant to clause 7i7 or 7ii7 of subparagraph 7,b7 may allow for such adjustments in the required levels of excess_/stop loss insurance as the qualified actuary may recommend1 taking into account the specific circumstances of the plan4 7b7 ,minimum ,surplus in ,addition to ,claims ,reserves ,in the case of any association health plan described in subsection 7a77#b71 the requirements of this subsection are met if the plan establishes and maintains surplus in an amount at least equal to-- 7#a7 #ejj1jjj1 or 7#b7 such greater amount 7but not greater than #b1jjj1jjj7 as may be set forth in regulations prescribed by the applicable authority1 considering the level of aggregate and specific excess_/stop loss insurance provided with respect to such plan and other factors related to solvency risk1 such as the plan's projected levels of participation or claims1 the nature of the plan's liabilities1 and the types of assets available to assure that such liabilities are met4 7c7 ,additional ,requirements ,in the case of any association health plan described in subsection 7a77#b71 the applicable authority may provide such additional requirements relating to reserves1 excess_/stop loss insurance1 and indemnification insurance as the applicable authority considers appropriate4 ,such requirements may be provided by regulation with respect to any such plan or any class of such plans4 7d7 ,adjustments for ,excess_/,stop ,loss ,insurance ,the applicable authority may provide for adjustments to the levels of reserves otherwise required under subsections 7a7 and 7b7 with respect to any plan or class of plans to take into account excess_/stop loss insurance provided with respect to such plan or plans4 7e7 ,alternative ,means of ,compliance ,the applicable authority may permit an association health plan described in subsection 7a77#b7 to substitute1 for all or part of the requirements of this section 7except subsection 7a77#b77;,b77iii771 such security1 guarantee1 hold-harmless arrangement1 or other financial arrangement as the applicable authority determines to be adequate to enable the plan to fully meet all its financial obligations on a timely basis and is otherwise no less protective of the interests of participants and beneficiaries than the requirements for which it is substituted4 ,the applicable authority may take into account1 for purposes of this subsection1 evidence provided by the plan or sponsor which demonstrates an assumption of liability with respect to the plan4 ,such evidence may be in the form of a contract of indemnification1 lien1 bonding1 insurance1 letter of credit1 recourse under applicable terms of the plan in the form of assessments of participating employers1 security1 or other financial arrangement4 7f7 ,measures ,to ,ensure ,continued ,payment of ,benefits by ,certain ,plans in ,distress 7#a7 ,payments by certain plans to association health plan fund 7,a7 ,in general ,in the case of an association health plan described in subsection 7a77#b71 the requirements of this subsection are met if the plan makes payments into the ,association ,health ,plan ,fund under this subparagraph when they are due4 ,such payments shall consist of annual payments in the amount of #e1jjj1 and1 in addition to such annual payments1 such supplemental payments as the ,secretary may determine to be necessary under paragraph 7#b74 ,payments under this paragraph are payable to the ,fund at the time determined by the ,secretary4 ,initial payments are due in advance of certification under this part4 ,payments shall continue to accrue until a plan's assets are distributed pursuant to a termination procedure4 7,b7 ,penalties for failure to make payments ,if any payment is not made by a plan when it is due1 a late payment charge of not more than #ajj percent of the payment which was not timely paid shall be payable by the plan to the ,fund4 7,c7 ,continued duty of the secretary ,the ,secretary shall not cease to carry out the provisions of paragraph 7#b7 on account of the failure of a plan to pay any payment when due4 7#b7 ,payments by secretary to continue excess_/stop loss insurance coverage and indemnification insurance coverage for certain plans ,in any case in which the applicable authority determines that there is1 or that there is reason to believe that there will be3 7,a7 a failure to take necessary corrective actions under section #hji7;a7 with respect to an association health plan described in subsection 7a77#b72 or 7,b7 a termination of such a plan under section #hji7;b7 or #haj7;b77#h7 7and1 if the applicable authority is not the ,secretary1 certifies such determination to the ,secretary71 the ,secretary shall determine the amounts necessary to make payments to an insurer 7designated by the ,secretary7 to maintain in force excess_/stop loss insurance coverage or indemnification insurance coverage for such plan1 if the ,secretary determines that there is a reasonable expectation that1 without such payments1 claims would not be satisfied by reason of termination of such coverage4 ,the ,secretary shall1 to the extent provided in advance in appropriation ,acts1 pay such amounts so determined to the insurer designated by the ,secretary4 7#c7 ,association health plan fund 7,a7 ,in general ,there is established on the books of the ,treasury a fund to be known as the ,association ,health ,plan ,fund4 ,the ,fund shall be available for making payments pursuant to paragraph 7#b74 ,the ,fund shall be credited with payments received pursuant to paragraph 7#a77;,a71 penalties received pursuant to paragraph 7#a77;,b72 and earnings on investments of amounts of the ,fund under subparagraph 7,b74 7,b7 ,investment ,whenever the ,secretary determines that the moneys of the fund are in excess of current needs1 the ,secretary may request the investment of such amounts as the ,secretary determines advisable by the ,secretary of the ,treasury in obligations issued or guaranteed by the ,united ,states4 7g7 ,excess_/,stop ,loss ,insurance ,for purposes of this section-- 7#a7 ,aggregate excess_/stop loss insurance ,the term aggregate excess_/stop loss insurance means1 in connection with an association health plan1 a contract-- 7,a7 under which an insurer 7meeting such minimum standards as the applicable authority may prescribe by regulation7 provides for payment to the plan with respect to aggregate claims under the plan in excess of an amount or amounts specified in such contract2 7,b7 which is guaranteed renewable2 and 7,c7 which allows for payment of premiums by any third party on behalf of the insured plan4 7#b7 ,specific excess_/stop loss insurance ,the term specific excess_/stop loss insurance means1 in connection with an association health plan1 a contract-- 7,a7 under which an insurer 7meeting such minimum standards as the applicable authority may prescribe by regulation7 provides for payment to the plan with respect to claims under the plan in connection with a covered individual in excess of an amount or amounts specified in such contract in connection with such covered individual2 7,b7 which is guaranteed renewable2 and 7,c7 which allows for payment of premiums by any third party on behalf of the insured plan4 7h7 ,indemnification ,insurance ,for purposes of this section1 the term indemnification insurance means1 in connection with an association health plan1 a contract-- 7#a7 under which an insurer 7meeting such minimum standards as the applicable authority may prescribe by regulation7 provides for payment to the plan with respect to claims under the plan which the plan is unable to satisfy by reason of a termination pursuant to section #hji7;b7 7relating to mandatory termination72 7#b7 which is guaranteed renewable and noncancellable for any reason 7except as the applicable authority may prescribe by regulation72 and 7#c7 which allows for payment of premiums by any third party on behalf of the insured plan4 7i7 ,reserves ,for purposes of this section1 the term reserves means1 in connection with an association health plan1 plan assets which meet the fiduciary standards under part #d and such additional requirements regarding liquidity as the applicable authority may prescribe by regulation4 7j7 ,solvency ,standards ,working ,group 7#a7 ,in general ,within #ij days after the date of the enactment of the ,small ,business ,health ,fairness ,act of #bjac1 the applicable authority shall establish a ,solvency ,standards ,working ,group4 ,in prescribing the initial regulations under this section1 the applicable authority shall take into account the recommendations of such ,working ,group4 7#b7 ,membership ,the ,working ,group shall consist of not more than #ae members appointed by the applicable authority4 ,the applicable authority shall include among persons invited to membership on the ,working ,group at least one of each of the following3 7,a7 a representative of the ,national ,association of ,insurance ,commissioners2 7,b7 a representative of the ,american ,academy of ,actuaries2 7,c7 a representative of the ,state governments1 or their interests2 7,d7 a representative of existing self-insured arrangements1 or their interests2 7,e7 a representative of associations of the type referred to in section #hja7;b77#a71 or their interests2 and 7,f7 a representative of multiemployer plans that are group health plans1 or their interests4 #hjg4 ,requirements for application and related requirements 7a7 ,filing ,fee ,under the procedure prescribed pursuant to section #hjb7;a71 an association health plan shall pay to the applicable authority at the time of filing an application for certification under this part a filing fee in the amount of #e1jjj1 which shall be available in the case of the ,secretary1 to the extent provided in appropriation ,acts1 for the sole purpose of administering the certification procedures applicable with respect to association health plans4 7b7 ,information ,to ,be ,included in ,application for ,certification ,an application for certification under this part meets the requirements of this section only if it includes1 in a manner and form which shall be prescribed by the applicable authority by regulation1 at least the following information3 7#a7 ,identifying information ,the names and addresses of-- 7,a7 the sponsor2 and 7,b7 the members of the board of trustees of the plan4 7#b7 ,states in which plan intends to do business ,the ,states in which participants and beneficiaries under the plan are to be located and the number of them expected to be located in each such ,state4 7#c7 ,bonding requirements ,evidence provided by the board of trustees that the bonding requirements of section #dab will be met as of the date of the application or 7if later7 commencement of operations4 7#d7 ,plan documents ,a copy of the documents governing the plan 7including any bylaws and trust agreements71 the summary plan description1 and other material describing the benefits that will be provided to participants and beneficiaries under the plan4 7#e7 ,agreements with service providers ,a copy of any agreements between the plan and contract administrators and other service providers4 7#f7 ,funding report ,in the case of association health plans providing benefits options in addition to health insurance coverage1 a report setting forth information with respect to such additional benefit options determined as of a date within the #abj-;day period ending with the date of the application1 including the following3 7,a7 ,reserves ,a statement1 certified by the board of trustees of the plan1 and a statement of actuarial opinion1 signed by a qualified actuary1 that all applicable requirements of section #hjf are or will be met in accordance with regulations which the applicable authority shall prescribe4 7,b7 ,adequacy of contribution rates ,a statement of actuarial opinion1 signed by a qualified actuary1 which sets forth a description of the extent to which contribution rates are adequate to provide for the payment of all obligations and the maintenance of required reserves under the plan for the #ab-month period beginning with such date within such #abj-;day period1 taking into account the expected coverage and experience of the plan4 ,if the contribution rates are not fully adequate1 the statement of actuarial opinion shall indicate the extent to which the rates are inadequate and the changes needed to ensure adequacy4 7,c7 ,current and projected value of assets and liabilities ,a statement of actuarial opinion signed by a qualified actuary1 which sets forth the current value of the assets and liabilities accumulated under the plan and a projection of the assets1 liabilities1 income1 and expenses of the plan for the #ab-month period referred to in subparagraph 7,b74 ,the income statement shall identify separately the plan's administrative expenses and claims4 7,d7 ,costs of coverage to be charged and other expenses ,a statement of the costs of coverage to be charged1 including an itemization of amounts for administration1 reserves1 and other expenses associated with the operation of the plan4 7,e7 ,other information ,any other information as may be determined by the applicable authority1 by regulation1 as necessary to carry out the purposes of this part4 7c7 ,filing ,notice of ,certification ,with ,states ,a certification granted under this part to an association health plan shall not be effective unless written notice of such certification is filed with the applicable ,state authority of each ,state in which at least #be percent of the participants and beneficiaries under the plan are located4 ,for purposes of this subsection1 an individual shall be considered to be located in the ,state in which a known address of such individual is located or in which such individual is employed4 7d7 ,notice of ,material ,changes ,in the case of any association health plan certified under this part1 descriptions of material changes in any information which was required to be submitted with the application for the certification under this part shall be filed in such form and manner as shall be prescribed by the applicable authority by regulation4 ,the applicable authority may require by regulation prior notice of material changes with respect to specified matters which might serve as the basis for suspension or revocation of the certification4 7e7 ,reporting ,requirements for ,certain ,association ,health ,plans ,an association health plan certified under this part which provides benefit options in addition to health insurance coverage for such plan year shall meet the requirements of section #ajc by filing an annual report under such section which shall include information described in subsection 7b77#f7 with respect to the plan year and1 notwithstanding section #ajd7;a77#a77;,a71 shall be filed with the applicable authority not later than #ij days after the close of the plan year 7or on such later date as may be prescribed by the applicable authority74 ,the applicable authority may require by regulation such interim reports as it considers appropriate4 7f7 ,engagement of ,qualified ,actuary ,the board of trustees of each association health plan which provides benefits options in addition to health insurance coverage and which is applying for certification under this part or is certified under this part shall engage1 on behalf of all participants and beneficiaries1 a qualified actuary who shall be responsible for the preparation of the materials comprising information necessary to be submitted by a qualified actuary under this part4 ,the qualified actuary shall utilize such assumptions and techniques as are necessary to enable such actuary to form an opinion as to whether the contents of the matters reported under this part-- 7#a7 are in the aggregate reasonably related to the experience of the plan and to reasonable expectations2 and 7#b7 represent such actuary's best estimate of anticipated experience under the plan4 ,the opinion by the qualified actuary shall be made with respect to1 and shall be made a part of1 the annual report4 #hjh4 ,notice requirements for voluntary termination ,except as provided in section #hji7;b71 an association health plan which is or has been certified under this part may terminate 7upon or at any time after cessation of accruals in benefit liabilities7 only if the board of trustees1 not less than #fj days before the proposed termination date-- 7#a7 provides to the participants and beneficiaries a written notice of intent to terminate stating that such termination is intended and the proposed termination date2 7#b7 develops a plan for winding up the affairs of the plan in connection with such termination in a manner which will result in timely payment of all benefits for which the plan is obligated2 and 7#c7 submits such plan in writing to the applicable authority4 ,actions required under this section shall be taken in such form and manner as may be prescribed by the applicable authority by regulation4 #hji4 ,corrective actions and mandatory termination 7a7 ,actions ,to ,avoid ,depletion of ,reserves ,an association health plan which is certified under this part and which provides benefits other than health insurance coverage shall continue to meet the requirements of section #hjf1 irrespective of whether such certification continues in effect4 ,the board of trustees of such plan shall determine quarterly whether the requirements of section #hjf are met4 ,in any case in which the board determines that there is reason to believe that there is or will be a failure to meet such requirements1 or the applicable authority makes such a determination and so notifies the board1 the board shall immediately notify the qualified actuary engaged by the plan1 and such actuary shall1 not later than the end of the next following month1 make such recommendations to the board for corrective action as the actuary determines necessary to ensure compliance with section #hjf4 ,not later than #cj days after receiving from the actuary recommendations for corrective actions1 the board shall notify the applicable authority 7in such form and manner as the applicable authority may prescribe by regulation7 of such recommendations of the actuary for corrective action1 together with a description of the actions 7if any7 that the board has taken or plans to take in response to such recommendations4 ,the board shall thereafter report to the applicable authority1 in such form and frequency as the applicable authority may specify to the board1 regarding corrective action taken by the board until the requirements of section #hjf are met4 7b7 ,mandatory ,termination ,in any case in which-- 7#a7 the applicable authority has been notified under subsection 7a7 7or by an issuer of excess_/stop loss insurance or indemnity insurance pursuant to section #hjf7;a77 of a failure of an association health plan which is or has been certified under this part and is described in section #hjf7;a77#b7 to meet the requirements of section #hjf and has not been notified by the board of trustees of the plan that corrective action has restored compliance with such requirements2 and 7#b7 the applicable authority determines that there is a reasonable expectation that the plan will continue to fail to meet the requirements of section #hjf1 the board of trustees of the plan shall1 at the direction of the applicable authority1 terminate the plan and1 in the course of the termination1 take such actions as the applicable authority may require1 including satisfying any claims referred to in section #hjf7;a77#b77;,b77iii7 and recovering for the plan any liability under subsection 7a77#b77;,b77iii7 or 7e7 of section #hjf1 as necessary to ensure that the affairs of the plan will be1 to the maximum extent possible1 wound up in a manner which will result in timely provision of all benefits for which the plan is obligated4 #haj4 ,trusteeship by the ,secretary of insolvent association health plans providing health benefits in addition to health insurance coverage 7a7 ,appointment of ,secretary as ,trustee for ,insolvent ,plans ,whenever the ,secretary determines that an association health plan which is or has been certified under this part and which is described in section #hjf7;a77#b7 will be unable to provide benefits when due or is otherwise in a financially hazardous condition1 as shall be defined by the ,secretary by regulation1 the ,secretary shall1 upon notice to the plan1 apply to the appropriate ,united ,states district court for appointment of the ,secretary as trustee to administer the plan for the duration of the insolvency4 ,the plan may appear as a party and other interested persons may intervene in the proceedings at the discretion of the court4 ,the court shall appoint such ,secretary trustee if the court determines that the trusteeship is necessary to protect the interests of the participants and beneficiaries or providers of medical care or to avoid any unreasonable deterioration of the financial condition of the plan4 ,the trusteeship of such ,secretary shall continue until the conditions described in the first sentence of this subsection are remedied or the plan is terminated4 7b7 ,powers as ,trustee ,the ,secretary1 upon appointment as trustee under subsection 7a71 shall have the power-- 7#a7 to do any act authorized by the plan1 this title1 or other applicable provisions of law to be done by the plan administrator or any trustee of the plan2 7#b7 to require the transfer of all 7or any part7 of the assets and records of the plan to the ,secretary as trustee2 7#c7 to invest any assets of the plan which the ,secretary holds in accordance with the provisions of the plan1 regulations prescribed by the ,secretary1 and applicable provisions of law2 7#d7 to require the sponsor1 the plan administrator1 any participating employer1 and any employee organization representing plan participants to furnish any information with respect to the plan which the ,secretary as trustee may reasonably need in order to administer the plan2 7#e7 to collect for the plan any amounts due the plan and to recover reasonable expenses of the trusteeship2 7#f7 to commence1 prosecute1 or defend on behalf of the plan any suit or proceeding involving the plan2 7#g7 to issue1 publish1 or file such notices1 statements1 and reports as may be required by the ,secretary by regulation or required by any order of the court2 7#h7 to terminate the plan 7or provide for its termination in accordance with section #hji7;b77 and liquidate the plan assets1 to restore the plan to the responsibility of the sponsor1 or to continue the trusteeship2 7#i7 to provide for the enrollment of plan participants and beneficiaries under appropriate coverage options2 and 7#aj7 to do such other acts as may be necessary to comply with this title or any order of the court and to protect the interests of plan participants and beneficiaries and providers of medical care4 7c7 ,notice of ,appointment ,as soon as practicable after the ,secretary's appointment as trustee1 the ,secretary shall give notice of such appointment to-- 7#a7 the sponsor and plan administrator2 7#b7 each participant2 7#c7 each participating employer2 and 7#d7 if applicable1 each employee organization which1 for purposes of collective bargaining1 represents plan participants4 7d7 ,additional ,duties ,except to the extent inconsistent with the provisions of this title1 or as may be otherwise ordered by the court1 the ,secretary1 upon appointment as trustee under this section1 shall be subject to the same duties as those of a trustee under section #gjd of title #aa1 ,united ,states ,code1 and shall have the duties of a fiduciary for purposes of this title4 7e7 ,other ,proceedings ,an application by the ,secretary under this subsection may be filed notwithstanding the pendency in the same or any other court of any bankruptcy1 mortgage foreclosure1 or equity receivership proceeding1 or any proceeding to reorganize1 conserve1 or liquidate such plan or its property1 or any proceeding to enforce a lien against property of the plan4 7f7 ,jurisdiction of ,court 7#a7 ,in general ,upon the filing of an application for the appointment as trustee or the issuance of a decree under this section1 the court to which the application is made shall have exclusive jurisdiction of the plan involved and its property wherever located with the powers1 to the extent consistent with the purposes of this section1 of a court of the ,united ,states having jurisdiction over cases under chapter #aa of title #aa1 ,united ,states ,code4 ,pending an adjudication under this section such court shall stay1 and upon appointment by it of the ,secretary as trustee1 such court shall continue the stay of1 any pending mortgage foreclosure1 equity receivership1 or other proceeding to reorganize1 conserve1 or liquidate the plan1 the sponsor1 or property of such plan or sponsor1 and any other suit against any receiver1 conservator1 or trustee of the plan1 the sponsor1 or property of the plan or sponsor4 ,pending such adjudication and upon the appointment by it of the ,secretary as trustee1 the court may stay any proceeding to enforce a lien against property of the plan or the sponsor or any other suit against the plan or the sponsor4 7#b7 ,venue ,an action under this section may be brought in the judicial district where the sponsor or the plan administrator resides or does business or where any asset of the plan is situated4 ,a district court in which such action is brought may issue process with respect to such action in any other judicial district4 7g7 ,personnel ,in accordance with regulations which shall be prescribed by the ,secretary1 the ,secretary shall appoint1 retain1 and compensate accountants1 actuaries1 and other professional service personnel as may be necessary in connection with the ,secretary's service as trustee under this section4 #haa4 ,state assessment authority 7a7 ,in ,general ,notwithstanding section #ead1 a ,state may impose by law a contribution tax on an association health plan described in section #hjf7;a77#b71 if the plan commenced operations in such ,state after the date of the enactment of the ,small ,business ,health ,fairness ,act of #bjac4 7b7 ,contribution ,tax ,for purposes of this section1 the term contribution tax imposed by a ,state on an association health plan means any tax imposed by such ,state if-- 7#a7 such tax is computed by applying a rate to the amount of premiums or contributions1 with respect to individuals covered under the plan who are residents of such ,state1 which are received by the plan from participating employers located in such ,state or from such individuals2 7#b7 the rate of such tax does not exceed the rate of any tax imposed by such ,state on premiums or contributions received by insurers or health maintenance organizations for health insurance coverage offered in such ,state in connection with a group health plan2 7#c7 such tax is otherwise nondiscriminatory2 and 7#d7 the amount of any such tax assessed on the plan is reduced by the amount of any tax or assessment otherwise imposed by the ,state on premiums1 contributions1 or both received by insurers or health maintenance organizations for health insurance coverage1 aggregate excess_/stop loss insurance 7as defined in section #hjf7;g77#a771 specific excess_/stop loss insurance 7as defined in section #hjf7;g77#b771 other insurance related to the provision of medical care under the plan1 or any combination thereof provided by such insurers or health maintenance organizations in such ,state in connection with such plan4 #hab4 ,definitions and rules of construction 7a7 ,definitions ,for purposes of this part-- 7#a7 ,group health plan ,the term group health plan has the meaning provided in section #gcc7;a77#a7 7after applying subsection 7b7 of this section74 7#b7 ,medical care ,the term medical care has the meaning provided in section #gcc7;a77#b74 7#c7 ,health insurance coverage ,the term health insurance coverage has the meaning provided in section #gcc7;b77#a74 7#d7 ,health insurance issuer ,the term health insurance issuer has the meaning provided in section #gcc7;b77#b74 7#e7 ,applicable authority ,the term applicable authority means the ,secretary1 except that1 in connection with any exercise of the ,secretary's authority regarding which the ,secretary is required under section #ejf7;d7 to consult with a ,state1 such term means the ,secretary1 in consultation with such ,state4 7#f7 ,health status-related factor ,the term health status-related factor has the meaning provided in section #gcc7;d77#b74 7#g7 ,individual market 7,a7 ,in general ,the term individual market means the market for health insurance coverage offered to individuals other than in connection with a group health plan4 7,b7 ,treatment of very small groups 7i7 ,in general ,subject to clause 7ii71 such term includes coverage offered in connection with a group health plan that has fewer than #b participants as current employees or participants described in section #gcb7;d77#c7 on the first day of the plan year4 7ii7 ,state exception ,clause 7i7 shall not apply in the case of health insurance coverage offered in a ,state if such ,state regulates the coverage described in such clause in the same manner and to the same extent as coverage in the small group market 7as defined in section #bgia7;e77#e7 of the ,public ,health ,service ,act7 is regulated by such ,state4 7#h7 ,participating employer ,the term participating employer means1 in connection with an association health plan1 any employer1 if any individual who is an employee of such employer1 a partner in such employer1 or a self-employed individual who is such employer 7or any dependent1 as defined under the terms of the plan1 of such individual7 is or was covered under such plan in connection with the status of such individual as such an employee1 partner1 or self-employed individual in relation to the plan4 7#i7 ,applicable state authority ,the term applicable ,state authority means1 with respect to a health insurance issuer in a ,state1 the ,state insurance commissioner or official or officials designated by the ,state to enforce the requirements of title ,,xxvii of the ,public ,health ,service ,act for the ,state involved with respect to such issuer4 7#aj7 ,qualified actuary ,the term qualified actuary means an individual who is a member of the ,american ,academy of ,actuaries4 7#aa7 ,affiliated member ,the term affiliated member means1 in connection with a sponsor-- 7,a7 a person who is otherwise eligible to be a member of the sponsor but who elects an affiliated status with the sponsor1 7,b7 in the case of a sponsor with members which consist of associations1 a person who is a member of any such association and elects an affiliated status with the sponsor1 or 7,c7 in the case of an association health plan in existence on the date of the enactment of the ,small ,business ,health ,fairness ,act of #bjac1 a person eligible to be a member of the sponsor or one of its member associations4 7#ab7 ,large employer ,the term large employer means1 in connection with a group health plan with respect to a plan year1 an employer who employed an average of at least #ea employees on business days during the preceding calendar year and who employs at least #b employees on the first day of the plan year4 7#ac7 ,small employer ,the term small employer means1 in connection with a group health plan with respect to a plan year1 an employer who is not a large employer4 7b7 ,rules of ,construction 7#a7 ,employers and employees ,for purposes of determining whether a plan1 fund1 or program is an employee welfare benefit plan which is an association health plan1 and for purposes of applying this title in connection with such plan1 fund1 or program so determined to be such an employee welfare benefit plan-- 7,a7 in the case of a partnership1 the term employer 7as defined in section #c7e77 includes the partnership in relation to the partners1 and the term employee 7as defined in section #c7f77 includes any partner in relation to the partnership2 and 7,b7 in the case of a self-employed individual1 the term employer 7as defined in section #c7e77 and the term employee 7as defined in section #c7f77 shall include such individual4 7#b7 ,plans1 funds1 and programs treated as employee welfare benefit plans ,in the case of any plan1 fund1 or program which was established or is maintained for the purpose of providing medical care 7through the purchase of insurance or otherwise7 for employees 7or their dependents7 covered thereunder and which demonstrates to the ,secretary that all requirements for certification under this part would be met with respect to such plan1 fund1 or program if such plan1 fund1 or program were a group health plan1 such plan1 fund1 or program shall be treated for purposes of this title as an employee welfare benefit plan on and after the date of such demonstration4 4 7b7 ,conforming ,amendments to ,preemption ,rules 7#a7 ,section #ead7;b77#f7 of such ,act 7#bi ,u4,s4,c4 #aadd7;b77#f77 is amended by adding at the end the following new subparagraph3 7,e7 ,the preceding subparagraphs of this paragraph do not apply with respect to any ,state law in the case of an association health plan which is certified under part #h4 4 7#b7 ,section #ead of such ,act 7#bi ,u4,s4,c4 #aadd7 is amended-- 7,a7 in subsection 7b77#d71 by striking ,subsection 7a7 and inserting ,subsections 7a7 and 7d72 7,b7 in subsection 7b77#e71 by striking subsection 7a7 in subparagraph 7,a7 and inserting subsection 7a7 of this section and subsections 7a77#b77;,b7 and 7b7 of section #hje1 and by striking subsection 7a7 in subparagraph 7,b7 and inserting subsection 7a7 of this section or subsection 7a77#b77;,b7 or 7b7 of section #hje2 7,c7 by redesignating subsections 7d7 and 7e7 as subsections 7e7 and 7f71 respectively2 and 7,d7 by inserting after subsection 7c7 the following new subsection3 7d7 7#a7 ,except as provided in subsection 7b77#d71 the provisions of this title shall supersede any and all ,state laws insofar as they may now or hereafter preclude1 or have the effect of precluding1 a health insurance issuer from offering health insurance coverage in connection with an association health plan which is certified under part #h4 7#b7 ,except as provided in paragraphs 7#d7 and 7#e7 of subsection 7b7 of this section-- 7,a7 ,in any case in which health insurance coverage of any policy type is offered under an association health plan certified under part #h to a participating employer operating in such ,state1 the provisions of this title shall supersede any and all laws of such ,state insofar as they may preclude a health insurance issuer from offering health insurance coverage of the same policy type to other employers operating in the ,state which are eligible for coverage under such association health plan1 whether or not such other employers are participating employers in such plan4 7,b7 ,in any case in which health insurance coverage of any policy type is offered in a ,state under an association health plan certified under part #h and the filing1 with the applicable ,state authority 7as defined in section #hab7;a77#i771 of the policy form in connection with such policy type is approved by such ,state authority1 the provisions of this title shall supersede any and all laws of any other ,state in which health insurance coverage of such type is offered1 insofar as they may preclude1 upon the filing in the same form and manner of such policy form with the applicable ,state authority in such other ,state1 the approval of the filing in such other ,state4 7#c7 ,nothing in subsection 7b77#f77;,e7 or the preceding provisions of this subsection shall be construed1 with respect to health insurance issuers or health insurance coverage1 to supersede or impair the law of any ,state-- 7,a7 providing solvency standards or similar standards regarding the adequacy of insurer capital1 surplus1 reserves1 or contributions1 or 7,b7 relating to prompt payment of claims4 7#d7 ,for additional provisions relating to association health plans1 see subsections 7a77#b77;,b7 and 7b7 of section #hje4 7#e7 ,for purposes of this subsection1 the term association health plan has the meaning provided in section #hja7;a71 and the terms health insurance coverage1 participating employer1 and health insurance issuer have the meanings provided such terms in section #hab1 respectively4 4 7#c7 ,section #ead7;b77#f77;,a7 of such ,act 7#bi ,u4,s4,c4 #aadd7;b77#f77;,a77 is amended-- 7,a7 in clause 7i77,,ii71 by striking and at the end2 7,b7 in clause 7ii71 by inserting and which does not provide medical care 7within the meaning of section #gcc7;a77#b771 after arrangement1 and by striking title4 and inserting title1 and2 and 7,c7 by adding at the end the following new clause3 7iii7 subject to subparagraph 7,e71 in the case of any other employee welfare benefit plan which is a multiple employer welfare arrangement and which provides medical care 7within the meaning of section #gcc7;a77#b771 any law of any ,state which regulates insurance may apply4 4 7#d7 ,section #ead7;e7 of such ,act 7as redesignated by paragraph 7#b77;,c77 is amended-- 7,a7 by striking ,nothing and inserting 7#a7 ,except as provided in paragraph 7#b71 nothing2 and 7,b7 by adding at the end the following new paragraph3 7#b7 ,nothing in any other provision of law enacted on or after the date of the enactment of the ,small ,business ,health ,fairness ,act of #bjac shall be construed to alter1 amend1 modify1 invalidate1 impair1 or supersede any provision of this title1 except by specific cross-reference to the affected section4 4 7c7 ,plan ,sponsor ,section #c7af77;,b7 of such ,act 7#bi ,u4,s4,c4 #ajb7af77;,b77 is amended by adding at the end the following new sentence3 ,such term also includes a person serving as the sponsor of an association health plan under part #h44 7d7 ,disclosure of ,solvency ,protections ,related to ,self-,insured and ,fully ,insured ,options ,under ,association ,health ,plans ,section #ajb7;b7 of such ,act 7#bi ,u4,s4,c4 #ajb7;b77 is amended by adding at the end the following3 ,an association health plan shall include in its summary plan description1 in connection with each benefit option1 a description of the form of solvency or guarantee fund protection secured pursuant to this ,act or applicable ,state law1 if any44 7e7 ,savings ,clause ,section #gca7;c7 of such ,act is amended by inserting or part #h after this part4 7f7 ,report to the ,congress ,regarding ,certification of ,self-,insured ,association ,health ,plans ,not later than ,january #a1 #bjaf1 the ,secretary of ,labor shall report to the ,committee on ,education and the ,workforce of the ,house of ,representatives and the ,committee on ,health1 ,education1 ,labor1 and ,pensions of the ,senate the effect association health plans have had1 if any1 on reducing the number of uninsured individuals4 7g7 ,clerical ,amendment ,the table of contents in section #a of the ,employee ,retirement ,income ,security ,act of #aigd is amended by inserting after the item relating to section #gcd the following new items3 ,part #h--,rules ,governing ,association ,health ,plans#hja4 ,association health plans4#hjb4 ,certification of association health plans4#hjc4 ,requirements relating to sponsors and boards of trustees4#hjd4 ,participation and coverage requirements4#hje4 ,other requirements relating to plan documents1 contribution rates1 and benefit options4#hjf4 ,maintenance of reserves and provisions for solvency for plans providing health benefits in addition to health insurance coverage4#hjg4 ,requirements for application and related requirements4#hjh4 ,notice requirements for voluntary termination4#hji4 ,corrective actions and mandatory termination4#haj4 ,trusteeship by the ,secretary of insolvent association health plans providing health benefits in addition to health insurance coverage4#haa4 ,state assessment authority4#hab4 ,definitions and rules of construction4 4 #fbb4 ,clarification of treatment of single employer arrangements ,section #c7dj77;,b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajjb7dj77;,b77 is amended-- 7#a7 in clause 7i71 by inserting after control group1 the following3 except that1 in any case in which the benefit referred to in subparagraph 7,a7 consists of medical care 7as defined in section #hab7;a77#b771 two or more trades or businesses1 whether or not incorporated1 shall be deemed a single employer for any plan year of such plan1 or any fiscal year of such other arrangement1 if such trades or businesses are within the same control group during such year or at any time during the preceding #a-year period12 7#b7 in clause 7iii71 by striking 7iii7 the determination and inserting the following3 7iii7 7,i7 in any case in which the benefit referred to in subparagraph 7,a7 consists of medical care 7as defined in section #hab7;a77#b771 the determination of whether a trade or business is under common control with another trade or business shall be determined under regulations of the ,secretary applying principles consistent and coextensive with the principles applied in determining whether employees of two or more trades or businesses are treated as employed by a single employer under section #djja7;b71 except that1 for purposes of this paragraph1 an interest of greater than #be percent may not be required as the minimum interest necessary for common control1 or 7,,ii7 in any other case1 the determination 2 7#c7 by redesignating clauses 7iv7 and 7v7 as clauses 7v7 and 7vi71 respectively2 and 7#d7 by inserting after clause 7iii7 the following new clause3 7iv7 in any case in which the benefit referred to in subparagraph 7,a7 consists of medical care 7as defined in section #hab7;a77#b771 in determining1 after the application of clause 7i71 whether benefits are provided to employees of two or more employers1 the arrangement shall be treated as having only one participating employer if1 after the application of clause 7i71 the number of individuals who are employees and former employees of any one participating employer and who are covered under the arrangement is greater than #ge percent of the aggregate number of all individuals who are employees or former employees of participating employers and who are covered under the arrangement1 4 #fbc4 ,enforcement provisions relating to association health plans 7a7 ,criminal ,penalties for ,certain ,willful ,misrepresentations ,section #eja of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaca7 is amended-- 7#a7 by inserting 7a7 after ,sec4 #eja42 and 7#b7 by adding at the end the following new subsection3 7b7 ,any person who willfully falsely represents1 to any employee1 any employee's beneficiary1 any employer1 the ,secretary1 or any ,state1 a plan or other arrangement established or maintained for the purpose of offering or providing any benefit described in section #c7a7 to employees or their beneficiaries as-- 7#a7 being an association health plan which has been certified under part #h2 7#b7 having been established or maintained under or pursuant to one or more collective bargaining agreements which are reached pursuant to collective bargaining described in section #h7;d7 of the ,national ,labor ,relations ,act 7#bi ,u4,s4,c4 #aeh7;d77 or paragraph fourth of section #b of the ,railway ,labor ,act 7#de ,u4,s4,c4 #aeb1 paragraph fourth7 or which are reached pursuant to labor-management negotiations under similar provisions of ,state public employee relations laws2 or 7#c7 being a plan or arrangement described in section #c7dj77;,a77i71 shall1 upon conviction1 be imprisoned not more than #e years1 be fined under title #ah1 ,united ,states ,code1 or both4 4 7b7 ,cease ,activities ,orders ,section #ejb of such ,act 7#bi ,u4,s4,c4 #aacb7 is amended by adding at the end the following new subsection3 7n7 ,association ,health ,plan ,cease and ,desist ,orders 7#a7 ,in general ,subject to paragraph 7#b71 upon application by the ,secretary showing the operation1 promotion1 or marketing of an association health plan 7or similar arrangement providing benefits consisting of medical care 7as defined in section #gcc7;a77#b777 that-- 7,a7 is not certified under part #h1 is subject under section #ead7;b77#f7 to the insurance laws of any ,state in which the plan or arrangement offers or provides benefits1 and is not licensed1 registered1 or otherwise approved under the insurance laws of such ,state2 or 7,b7 is an association health plan certified under part #h and is not operating in accordance with the requirements under part #h for such certification1 a district court of the ,united ,states shall enter an order requiring that the plan or arrangement cease activities4 7#b7 ,exception ,paragraph 7#a7 shall not apply in the case of an association health plan or other arrangement if the plan or arrangement shows that-- 7,a7 all benefits under it referred to in paragraph 7#a7 consist of health insurance coverage2 and 7,b7 with respect to each ,state in which the plan or arrangement offers or provides benefits1 the plan or arrangement is operating in accordance with applicable ,state laws that are not superseded under section #ead4 7#c7 ,additional equitable relief ,the court may grant such additional equitable relief1 including any relief available under this title1 as it deems necessary to protect the interests of the public and of persons having claims for benefits against the plan4 4 7c7 ,responsibility for ,claims ,procedure ,section #ejc of such ,act 7#bi ,u4,s4,c4 #aacc7 is amended by inserting 7a7 ,in general4-- before ,in accordance1 and by adding at the end the following new subsection3 7b7 ,association ,health ,plans ,the terms of each association health plan which is or has been certified under part #h shall require the board of trustees or the named fiduciary 7as applicable7 to ensure that the requirements of this section are met in connection with claims filed under the plan4 4 #fbd4 ,cooperation between ,federal and ,state authorities ,section #ejf of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aacf7 is amended by adding at the end the following new subsection3 7d7 ,consultation ,with ,states ,with ,respect to ,association ,health ,plans 7#a7 ,agreements with states ,the ,secretary shall consult with the ,state recognized under paragraph 7#b7 with respect to an association health plan regarding the exercise of-- 7,a7 the ,secretary's authority under sections #ejb and #ejd to enforce the requirements for certification under part #h2 and 7,b7 the ,secretary's authority to certify association health plans under part #h in accordance with regulations of the ,secretary applicable to certification under part #h4 7#b7 ,recognition of primary domicile state ,in carrying out paragraph 7#a71 the ,secretary shall ensure that only one ,state will be recognized1 with respect to any particular association health plan1 as the ,state with which consultation is required4 ,in carrying out this paragraph-- 7,a7 in the case of a plan which provides health insurance coverage 7as defined in section #hab7;a77#c771 such ,state shall be the ,state with which filing and approval of a policy type offered by the plan was initially obtained1 and 7,b7 in any other case1 the ,secretary shall take into account the places of residence of the participants and beneficiaries under the plan and the ,state in which the trust is maintained4 4 #fbe4 ,effective date and transitional and other rules 7a7 ,effective ,date ,the amendments made by this chapter shall take effect #a year after the date of the enactment of this ,act4 ,the ,secretary of ,labor shall first issue all regulations necessary to carry out the amendments made by this chapter within #a year after the date of the enactment of this ,act4 7b7 ,treatment of ,certain ,existing ,health ,benefits ,programs 7#a7 ,in general ,in any case in which1 as of the date of the enactment of this ,act1 an arrangement is maintained in a ,state for the purpose of providing benefits consisting of medical care for the employees and beneficiaries of its participating employers1 at least #bjj participating employers make contributions to such arrangement1 such arrangement has been in existence for at least #aj years1 and such arrangement is licensed under the laws of one or more ,states to provide such benefits to its participating employers1 upon the filing with the applicable authority 7as defined in section #hab7;a77#e7 of the ,employee ,retirement ,income ,security ,act of #aigd 7as amended by this chapter77 by the arrangement of an application for certification of the arrangement under part #h of subtitle ,b of title ,i of such ,act-- 7,a7 such arrangement shall be deemed to be a group health plan for purposes of title ,i of such ,act2 7,b7 the requirements of sections #hja7;a7 and #hjc7;a7 of the ,employee ,retirement ,income ,security ,act of #aigd shall be deemed met with respect to such arrangement2 7,c7 the requirements of section #hjc7;b7 of such ,act shall be deemed met1 if the arrangement is operated by a board of directors which-- 7i7 is elected by the participating employers1 with each employer having one vote2 and 7ii7 has complete fiscal control over the arrangement and which is responsible for all operations of the arrangement2 7,d7 the requirements of section #hjd7;a7 of such ,act shall be deemed met with respect to such arrangement2 and 7,e7 the arrangement may be certified by any applicable authority with respect to its operations in any ,state only if it operates in such ,state on the date of certification4 ,the provisions of this subsection shall cease to apply with respect to any such arrangement at such time after the date of the enactment of this ,act as the applicable requirements of this subsection are not met with respect to such arrangement4 7#b7 ,definitions ,for purposes of this subsection1 the terms group health plan1 medical care1 and participating employer shall have the meanings provided in section #hab of the ,employee ,retirement ,income ,security ,act of #aigd1 except that the reference in paragraph 7#g7 of such section to an association health plan shall be deemed a reference to an arrangement referred to in this subsection4 #b ,targeted ,efforts ,to ,expand ,access #fca4 ,extending coverage of dependents 7a7 ,employee ,retirement ,income ,security ,act of #aigd 7#a7 ,in general ,part #g of subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd is amended by inserting after section #gad the following new section3 #gae4 ,extending coverage of dependents 7a7 ,in general ,in the case of a group health plan1 or health insurance coverage offered in connection with a group health plan1 that treats as a beneficiary under the plan an individual who is a dependent child of a participant or beneficiary under the plan1 the plan or coverage shall continue to treat the individual as a dependent child without regard to the individual's age through at least the end of the plan year in which the individual turns an age specified in the plan1 but not less than #bc years of age4 7b7 ,construction ,nothing in this section shall be construed as requiring a group health plan to provide benefits for dependent children as beneficiaries under the plan or to require a participant to elect coverage of dependent children4 4 7#b7 ,clerical amendment ,the table of contents of such ,act is amended by inserting after the item relating to section #gad the following new item3 ,sec4 #gae4 ,extending coverage of dependents4 4 7b7 ,,phsa ,title ,,xxvii of the ,public ,health ,service ,act is amended by inserting after section #bgjg the following new section3 #bgjh4 ,extending coverage of dependents 7a7 ,in general ,in the case of a group health plan1 or health insurance coverage offered in connection with a group health plan1 that treats as a beneficiary under the plan an individual who is a dependent child of a participant or beneficiary under the plan1 the plan or coverage shall continue to treat the individual as a dependent child without regard to the individual's age through at least the end of the plan year in which the individual turns an age specified in the plan1 but not less than #bc years of age4 7b7 ,construction ,nothing in this section shall be construed as requiring a group health plan to provide benefits for dependent children as beneficiaries under the plan or to require a participant to elect coverage of dependent children4 4 7c7 ,,irc 7#a7 ,in general ,subchapter ,b of chapter #ajj of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #ihad4 ,extending coverage of dependents 7a7 ,in general ,in the case of a group health plan that treats as a beneficiary under the plan an individual who is a dependent child of a participant or beneficiary under the plan1 the plan shall continue to treat the individual as a dependent child without regard to the individual's age through at least the end of the plan year in which the individual turns an age specified in the plan1 but not less than #bc years of age4 7b7 ,construction ,nothing in this section shall be construed as requiring a group health plan to provide coverage for dependent children as beneficiaries under the plan or to require a participant to elect coverage of dependent children4 4 7#b7 ,clerical amendment ,the table of sections in such subchapter is amended by adding at the end the following new item3 ,sec4 #ihad4 ,extending coverage of dependents4 4 7d7 ,effective date ,the amendments made by this section shall apply to group health plans for plan years beginning more than #c months after the date of the enactment of this ,act and shall apply to individuals who are dependent children under a group health plan1 or health insurance coverage offered in connection with such a plan1 on or after such date4 #fcb4 ,allowing auto-enrollment for employer sponsored coverage 7a7 ,in general ,no ,state shall establish a law that prevents an employer from instituting auto-enrollment for coverage of a participant or beneficiary1 including current employees1 under a group health plan1 or health insurance coverage offered in connection with such a plan1 so long as the participant or beneficiary has the option of declining such coverage4 7b7 ,auto-,enrollment 7#a7 ,notice required ,employers with auto-enrollment under a group health plan or health insurance coverage shall provide annual notification1 within a reasonable period before the beginning of each plan year1 to each employee eligible to participate in the plan4 ,the notice shall explain the employee contribution to such plan and the employee's right to decline coverage4 7#b7 ,treatment of non-action ,after a reasonable period of time after receipt of the notice1 if an employee fails to make an affirmative declaration declining coverage1 then such an employee may be enrolled in the group health plan or health insurance coverage offered in connection with such a plan404 7c7 ,construction ,nothing in this section shall be construed to supersede ,state law which establishes1 implements1 or continues in effect any standard or requirement relating to employers in connection with payroll or the sponsoring of employer sponsored health insurance coverage except to the extent that such standard or requirement prevents an employer from instituting the auto-enrollment described in subsection 7a74 ,,vii ,stopping ,medicare1 ,waste1 ,fraud1 and ,abuse and ,increasing ,penalties for ,abusers #gja4 ,increased civil money penalties and criminal fines for ,medicare fraud and abuse 7a7 ,increased ,civil ,money ,penalties ,section #aabh;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;a7 is amended-- 7#a7 in subsection 7a71 in the matter following paragraph 7#aj7-- 7,a7 by striking #aj1jjj each place it appears and inserting #bj1jjj2 7,b7 by striking #ae1jjj and inserting #cj1jjj2 and 7,c7 by striking #ej1jjj each place it appears and inserting #ajj1jjj2 and 7#b7 in subsection 7b7-- 7,a7 in paragraph 7#a71 in the flush matter following subparagraph 7,b71 by striking #b1jjj and inserting #d1jjj2 7,b7 in paragraph 7#b71 by striking #b1jjj and inserting #d1jjj2 and 7,c7 in paragraph 7#c77;,a77i71 by striking #e1jjj and inserting #aj1jjj4 7b7 ,increased ,criminal ,fines ,section #aabh;,b of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;b7 is amended-- 7#a7 in subsection 7a71 in the flush matter following paragraph 7#f7-- 7,a7 by striking #be1jjj and inserting #ajj1jjj2 and 7,b7 by striking #aj1jjj and inserting #bj1jjj2 7#b7 in subsection 7b7-- 7,a7 in paragraph 7#a71 in the flush matter following subparagraph 7,b71 by striking #be1jjj and inserting #ajj1jjj2 and 7,b7 in paragraph 7#b71 in the flush matter following subparagraph 7,b71 by striking #be1jjj and inserting #ajj1jjj2 7#c7 in subsection 7c71 by striking #be1jjj and inserting #ajj1jjj2 7#d7 in subsection 7d71 in the second flush matter following subparagraph 7,b71 by striking #be1jjj and inserting #ajj1jjj2 and 7#e7 in subsection 7e71 by striking #b1jjj and inserting #d1jjj4 7c7 ,effective ,date ,the amendments made by this section shall apply to civil money penalties and fines imposed for actions taken on or after the date of enactment of this ,act4 #gjb4 ,increased sentences for felonies involving ,medicare fraud and abuse 7a7 ,false ,statements and ,representations ,section #aabh;,b7a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;b7a77 is amended1 in clause 7i7 of the flush matter following paragraph 7#f71 by striking not more than five years and inserting not more than #aj years4 7b7 ,anti-,kickback ,section #aabh;,b7b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;b7b77 is amended-- 7#a7 in paragraph 7#a71 in the flush matter following subparagraph 7,b71 by striking not more than five years and inserting not more than #aj years2 and 7#b7 in paragraph 7#b71 in the flush matter following subparagraph 7,b71 by striking not more than five years and inserting not more than #aj years4 7c7 ,false ,statement or ,representation ,with ,respect to ,conditions or ,operations of ,facilities ,section #aabh;,b7c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;b7c77 is amended by striking not more than five years and inserting not more than #aj years4 7d7 ,excess ,charges ,section #aabh;,b7d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;b7d77 is amended1 in the second flush matter following subparagraph 7,b71 by striking not more than five years and inserting not more than #aj years4 7e7 ,effective ,date ,the amendments made by this section shall apply to criminal penalties imposed for actions taken on or after the date of enactment of this ,act4 #gjc4 ,other ,,dme supplier anti-fraud and abuse provisions 7a7 ,mandatory periodic site inspections for ,,dme suppliers ,the ,secretary of ,health and ,human ,services shall require1 as a condition for participation of suppliers of durable medical equipment under part ,b of title ,,xviii of the ,social ,security ,act-- 7#a7 a site inspection to be conducted for each such supplier that has not previously participated under such part within #f months of the date of its initial participation under such part2 and 7#b7 a site inspection at least every #b years to be conducted for each such supplier that has previously participated under such part4 7b7 ,post-,payment review ,the ,secretary also shall provide conduct post-payment reviews of claims for items and services furnished under such part by durable medical equipment suppliers that begin participation under such part after the date of the enactment of this ,act4 ,such reviews shall be conducted not less often than after the first #f1 #ab1 and #ah months of such participation4 7c7 ,availability of funds ,funds in the ,health ,care ,fraud and ,abuse ,control ,account under section #ahag7k7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;i7k77 shall be available for the conduct of site inspections and post-payment review required under this section4 7d7 ,treatment of skilled nursing facilities ,in this section1 a skilled nursing facility shall not be treated as a supplier of durable medical equipment with respect to any individual who is a resident of such facility4 #gjd4 ,retention of certain fraud and abuse provisions ,section #aja shall not apply to the provisions 7including amendments made by7 title ,,vi of ,public ,law #aaa-adh1 other than subtitles ,d1 ,h1 and ,i of such title1 and provisions of ,public ,law #aaa-aeb insofar as they relate to such provisions4 #gje4 ,ensuring timely enforcement of ,medicare secondary payer requirements in liability cases ,the ,secretary of ,health and ,human ,services1 acting through the ,administrator of the ,centers for ,medicare ,medicaid ,services1 shall affirmatively establish1 for initial implementation not later than #ij days after the date of the enactment of this ,act1 a plan to require applicable plans 7as defined in subparagraph 7,f7 of section #ahfb7;b77#h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciey7b77#h771 as added by section #aaa7;a7 of the ,medicare1 ,medicaid1 and ,,schip ,extension ,act of #bjjg 7,public ,law #aaj-agc771 to meet the determination and submission requirements under subparagraph 7,a7 of such section #ahfb7;b77#h74