House Health Care Bill (Pages 101-150)

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coverage, for the period of time beginning on
the date of birth and ending on the date the
child otherwise is covered under acceptable cov-
erage (or, if earlier, the end of the month in
which the 60-day period, beginning on the date
of birth, ends), the child shall be deemed–
(i) to be a non-traditional Medicaid el-
igible individual (as defined in subsection
(e)(5)) for purposes of this division and
Medicaid; and
(ii) to have elected to enroll in Med-
icaid through the application of paragraph
(3).
(B) EXTENDED TREATMENT AS TRADI-
TIONAL MEDICAID ELIGIBLE INDIVIDUAL.–In
the case of a child described in subparagraph
(A) who at the end of the period referred to in
such subparagraph is not otherwise covered
under acceptable coverage, the child shall be
deemed (until such time as the child obtains
such coverage or the State otherwise makes a
determination of the child’s eligibility for med-
ical assistance under its Medicaid plan pursuant
to section 1943(c)(1) of the Social Security
Act) to be a traditional Medicaid eligible indi-

P. 102

vidual described in section 1902(l)(1)(B) of
such Act.
(2) CHIP TRANSITION.–A child who, as of the
day before the first day of Y1, is eligible for child
health assistance under title XXI of the Social Secu-
rity Act (including a child receiving coverage under
an arrangement described in section 2101(a)(2) of
such Act) is deemed as of such first day to be an
Exchange-eligible individual unless the individual is
a traditional Medicaid eligible individual as of such
day.
(3) AUTOMATIC ENROLLMENT OF MEDICAID EL-
IGIBLE INDIVIDUALS INTO MEDICAID.–The Com-
missioner shall provide for a process under which an
individual who is described in section 202(d)(3) and
has not elected to enroll in an Exchange-partici-
pating health benefits plan is automatically enrolled
under Medicaid.
(4) NOTIFICATIONS.–The Commissioner shall
notify each State in Y1 and for purposes of section
1902(gg)(1) of the Social Security Act (as added by
section 1703(a)) whether the Health Insurance Ex-
change can support enrollment of children described
in paragraph (2) in such State in such year.

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(e) MEDICAID COVERAGE FOR MEDICAID ELIGIBLE
INDIVIDUALS.–
(1) IN GENERAL.–
(A) CHOICE FOR LIMITED EXCHANGE-ELI-
GIBLE INDIVIDUALS.–As part of the enrollment
process under subsection (b), the Commissioner
shall provide the option, in the case of an Ex-
change-eligible individual described in section
202(d)(3), for the individual to elect to enroll
under Medicaid instead of under an Exchange-
participating health benefits plan. Such an indi-
vidual may change such election during an en-
rollment period under subsection (b)(2).
(B) MEDICAID ENROLLMENT OBLIGA-
TION.–An Exchange eligible individual may
apply, in the manner described in section
241(b)(1), for a determination of whether the
individual is a Medicaid-eligible individual. If
the individual is determined to be so eligible,
the Commissioner, through the Medicaid memo-
randum of understanding, shall provide for the
enrollment of the individual under the State
Medicaid plan in accordance with the Medicaid
memorandum of understanding under para-
graph (4). In the case of such an enrollment,

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the State shall provide for the same periodic re-
determination of eligibility under Medicaid as
would otherwise apply if the individual had di-
rectly applied for medical assistance to the
State Medicaid agency.
(2) NON-TRADITIONAL MEDICAID ELIGIBLE IN-
DIVIDUALS.–In the case of a non-traditional Med-
icaid eligible individual described in section
202(d)(3) who elects to enroll under Medicaid under
paragraph (1)(A), the Commissioner shall provide
for the enrollment of the individual under the State
Medicaid plan in accordance with the Medicaid
memorandum of understanding under paragraph
(4).
(3) COORDINATED ENROLLMENT WITH STATE
THROUGH MEMORANDUM OF UNDERSTANDING.–
The Commissioner, in consultation with the Sec-
retary of Health and Human Services, shall enter
into a memorandum of understanding with each
State (each in this division referred to as a ”Med-
icaid memorandum of understanding”) with respect
to coordinating enrollment of individuals in Ex-
change-participating health benefits plans and under
the State’s Medicaid program consistent with this
section and to otherwise coordinate the implementa-

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tion of the provisions of this division with respect to
the Medicaid program. Such memorandum shall per-
mit the exchange of information consistent with the
limitations described in section 1902(a)(7) of the So-
cial Security Act. Nothing in this section shall be
construed as permitting such memorandum to mod-
ify or vitiate any requirement of a State Medicaid
plan.
(4) MEDICAID ELIGIBLE INDIVIDUALS.–For
purposes of this division:
(A) MEDICAID ELIGIBLE INDIVIDUAL.–
The term ”Medicaid eligible individual” means
an individual who is eligible for medical assist-
ance under Medicaid.
(B) TRADITIONAL MEDICAID ELIGIBLE IN-
DIVIDUAL.–The term ”traditional Medicaid eli-
gible individual” means a Medicaid eligible indi-
vidual other than an individual who is–
(i) a Medicaid eligible individual by
reason of the application of subclause
(VIII) of section 1902(a)(10)(A)(i) of the
Social Security Act; or
(ii) a childless adult not described in
section 1902(a)(10)(A) or (C) of such Act

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(as in effect as of the day before the date
of the enactment of this Act).
(C) NON-TRADITIONAL MEDICAID ELIGI-
BLE INDIVIDUAL.–The term ”non-traditional
Medicaid eligible individual” means a Medicaid
eligible individual who is not a traditional Med-
icaid eligible individual.
(f) EFFECTIVE CULTURALLY AND LINGUISTICALLY
APPROPRIATE COMMUNICATION.–In carrying out this
section, the Commissioner shall establish effective methods
for communicating in plain language and a culturally and
linguistically appropriate manner.
SEC. 206. OTHER FUNCTIONS.
(a) COORDINATION OF AFFORDABILITY CREDITS.–
The Commissioner shall coordinate the distribution of af-
fordability premium and cost-sharing credits under sub-
title C to QHBP offering entities offering Exchange-par-
ticipating health benefits plans.
(b) COORDINATION OF RISK POOLING.–The Com-
missioner shall establish a mechanism whereby there is an
adjustment made of the premium amounts payable among
QHBP offering entities offering Exchange-participating
health benefits plans of premiums collected for such plans
that takes into account (in a manner specified by the Com-
missioner) the differences in the risk characteristics of in-

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dividuals and employers enrolled under the different Ex-
change-participating health benefits plans offered by such
entities so as to minimize the impact of adverse selection
of enrollees among the plans offered by such entities.
(c) SPECIAL INSPECTOR GENERAL FOR THE HEALTH
INSURANCE EXCHANGE.–
(1) ESTABLISHMENT; APPOINTMENT.–There is
hereby established the Office of the Special Inspec-
tor General for the Health Insurance Exchange, to
be headed by a Special Inspector General for the
Health Insurance Exchange (in this subsection re-
ferred to as the ”Special Inspector General”) to be
appointed by the President, by and with the advice
and consent of the Senate. The nomination of an in-
dividual as Special Inspector General shall be made
as soon as practicable after the establishment of the
program under this subtitle.
(2) DUTIES.–The Special Inspector General
shall–
(A) conduct, supervise, and coordinate au-
dits, evaluations and investigations of the
Health Insurance Exchange to protect the in-
tegrity of the Health Insurance Exchange, as
well as the health and welfare of participants in
the Exchange;

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(B) report both to the Commissioner and
to the Congress regarding program and man-
agement problems and recommendations to cor-
rect them;
(C) have other duties (described in para-
graphs (2) and (3) of section 121 of division A
of Public Law 110-343) in relation to the du-
ties described in the previous subparagraphs;
and
(D) have the authorities provided in sec-
tion 6 of the Inspector General Act of 1978 in
carrying out duties under this paragraph.
(3) APPLICATION OF OTHER SPECIAL INSPEC-
TOR GENERAL PROVISIONS.–The provisions of sub-
sections (b) (other than paragraphs (1) and (3)), (d)
(other than paragraph (1)), and (e) of section 121
of division A of the Emergency Economic Stabiliza-
tion Act of 2009 (Public Law 110-343) shall apply
to the Special Inspector General under this sub-
section in the same manner as such provisions apply
to the Special Inspector General under such section.
(4) REPORTS.–Not later than one year after
the confirmation of the Special Inspector General,
and annually thereafter, the Special Inspector Gen-
eral shall submit to the appropriate committees of

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Congress a report summarizing the activities of the
Special Inspector General during the one year period
ending on the date such report is submitted.
(5) TERMINATION.–The Office of the Special
Inspector General shall terminate five years after
the date of the enactment of this Act.
SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.
(a) ESTABLISHMENT OF HEALTH INSURANCE EX-
CHANGE TRUST FUND.–There is created within the
Treasury of the United States a trust fund to be known
as the ”Health Insurance Exchange Trust Fund” (in this
section referred to as the ”Trust Fund”), consisting of
such amounts as may be appropriated or credited to the
Trust Fund under this section or any other provision of
law.
(b) PAYMENTS FROM TRUST FUND.–The Commis-
sioner shall pay from time to time from the Trust Fund
such amounts as the Commissioner determines are nec-
essary to make payments to operate the Health Insurance
Exchange, including payments under subtitle C (relating
to affordability credits).
(c) TRANSFERS TO TRUST FUND.–
(1) DEDICATED PAYMENTS.–There is hereby
appropriated to the Trust Fund amounts equivalent
to the following:

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(A) TAXES ON INDIVIDUALS NOT OBTAIN-
ING ACCEPTABLE COVERAGE.–The amounts re-
ceived in the Treasury under section 59B of the
Internal Revenue Code of 1986 (relating to re-
quirement of health insurance coverage for indi-
viduals).
(B) EMPLOYMENT TAXES ON EMPLOYERS
NOT PROVIDING ACCEPTABLE COVERAGE.–The
amounts received in the Treasury under section
3111(c) of the Internal Revenue Code of 1986
(relating to employers electing to not provide
health benefits).
(C) EXCISE TAX ON FAILURES TO MEET
CERTAIN HEALTH COVERAGE REQUIRE-
MENTS.–The amounts received in the Treasury
under section 4980H(b) (relating to excise tax
with respect to failure to meet health coverage
participation requirements).
(2) APPROPRIATIONS TO COVER GOVERNMENT
CONTRIBUTIONS.–There are hereby appropriated,
out of any moneys in the Treasury not otherwise ap-
propriated, to the Trust Fund, an amount equivalent
to the amount of payments made from the Trust
Fund under subsection (b) plus such amounts as are

P. 111

necessary reduced by the amounts deposited under
paragraph (1).
(d) APPLICATION OF CERTAIN RULES.–Rules simi-
lar to the rules of subchapter B of chapter 98 of the Inter-
nal Revenue Code of 1986 shall apply with respect to the
Trust Fund.
SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH
INSURANCE EXCHANGES.
(a) IN GENERAL.–If–
(1) a State (or group of States, subject to the
approval of the Commissioner) applies to the Com-
missioner for approval of a State-based Health In-
surance Exchange to operate in the State (or group
of States); and
(2) the Commissioner approves such State-
based Health Insurance Exchange,
then, subject to subsections (c) and (d), the State-based
Health Insurance Exchange shall operate, instead of the
Health Insurance Exchange, with respect to such State
(or group of States). The Commissioner shall approve a
State-based Health Insurance Exchange if it meets the re-
quirements for approval under subsection (b).
(b) REQUIREMENTS FOR APPROVAL.–The Commis-
sioner may not approve a State-based Health Insurance

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Exchange under this section unless the following require-
ments are met:
(1) The State-based Health Insurance Ex-
change must demonstrate the capacity to and pro-
vide assurances satisfactory to the Commissioner
that the State-based Health Insurance Exchange will
carry out the functions specified for the Health In-
surance Exchange in the State (or States) involved,
including–
(A) negotiating and contracting with
QHBP offering entities for the offering of Ex-
change-participating health benefits plan, which
satisfy the standards and requirements of this
title and title I;
(B) enrolling Exchange-eligible individuals
and employers in such State in such plans;
(C) the establishment of sufficient local of-
fices to meet the needs of Exchange-eligible in-
dividuals and employers;
(D) administering affordability credits
under subtitle B using the same methodologies
(and at least the same income verification
methods) as would otherwise apply under such
subtitle and at a cost to the Federal Govern-

P. 113

ment which does exceed the cost to the Federal
Government if this section did not apply; and
(E) enforcement activities consistent with
federal requirements.
(2) There is no more than one Health Insur-
ance Exchange operating with respect to any one
State.
(3) The State provides assurances satisfactory
to the Commissioner that approval of such an Ex-
change will not result in any net increase in expendi-
tures to the Federal Government.
(4) The State provides for reporting of such in-
formation as the Commissioner determines and as-
surances satisfactory to the Commissioner that it
will vigorously enforce violations of applicable re-
quirements.
(5) Such other requirements as the Commis-
sioner may specify.
(c) CEASING OPERATION.–
(1) IN GENERAL.–A State-based Health Insur-
ance Exchange may, at the option of each State in-
volved, and only after providing timely and reason-
able notice to the Commissioner, cease operation as
such an Exchange, in which case the Health Insur-
ance Exchange shall operate, instead of such State-

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based Health Insurance Exchange, with respect to
such State (or States).
(2) TERMINATION; HEALTH INSURANCE EX-
CHANGE RESUMPTION OF FUNCTIONS.–The Com-
missioner may terminate the approval (for some or
all functions) of a State-based Health Insurance Ex-
change under this section if the Commissioner deter-
mines that such Exchange no longer meets the re-
quirements of subsection (b) or is no longer capable
of carrying out such functions in accordance with
the requirements of this subtitle. In lieu of termi-
nating such approval, the Commissioner may tempo-
rarily assume some or all functions of the State-
based Health Insurance Exchange until such time as
the Commissioner determines the State-based
Health Insurance Exchange meets such require-
ments of subsection (b) and is capable of carrying
out such functions in accordance with the require-
ments of this subtitle.
(3) EFFECTIVENESS.–The ceasing or termi-
nation of a State-based Health Insurance Exchange
under this subsection shall be effective in such time
and manner as the Commissioner shall specify.
(d) RETENTION OF AUTHORITY.–

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(1) AUTHORITY RETAINED.–Enforcement au-
thorities of the Commissioner shall be retained by
the Commissioner.
(2) DISCRETION TO RETAIN ADDITIONAL AU-
THORITY.–The Commissioner may specify functions
of the Health Insurance Exchange that–
(A) may not be performed by a State-
based Health Insurance Exchange under this
section; or
(B) may be performed by the Commis-
sioner and by such a State-based Health Insur-
ance Exchange.
(e) REFERENCES.–In the case of a State-based
Health Insurance Exchange, except as the Commissioner
may otherwise specify under subsection (d), any references
in this subtitle to the Health Insurance Exchange or to
the Commissioner in the area in which the State-based
Health Insurance Exchange operates shall be deemed a
reference to the State-based Health Insurance Exchange
and the head of such Exchange, respectively.
(f) FUNDING.–In the case of a State-based Health
Insurance Exchange, there shall be assistance provided for
the operation of such Exchange in the form of a matching
grant with a State share of expenditures required.

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Subtitle B–Public Health
Insurance Option
SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A
PUBLIC HEALTH INSURANCE OPTION AS AN
EXCHANGE-QUALIFIED HEALTH BENEFITS
PLAN.
(a) ESTABLISHMENT.–For years beginning with Y1,
the Secretary of Health and Human Services (in this sub-
title referred to as the ”Secretary”) shall provide for the
offering of an Exchange-participating health benefits plan
(in this division referred to as the ”public health insurance
option”) that ensures choice, competition, and stability of
affordable, high quality coverage throughout the United
States in accordance with this subtitle. In designing the
option, the Secretary’s primary responsibility is to create
a low-cost plan without comprimising quality or access to
care.
(b) OFFERING AS AN EXCHANGE-PARTICIPATING
HEALTH BENEFITS PLAN.–
(1) EXCLUSIVE TO THE EXCHANGE.–The pub-
lic health insurance option shall only be made avail-
able through the Health Insurance Exchange.
(2) ENSURING A LEVEL PLAYING FIELD.–Con-
sistent with this subtitle, the public health insurance
option shall comply with requirements that are ap-

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plicable under this title to an Exchange-participating
health benefits plan, including requirements related
to benefits, benefit levels, provider networks, notices,
consumer protections, and cost sharing.
(3) PROVISION OF BENEFIT LEVELS.–The pub-
lic health insurance option–
(A) shall offer basic, enhanced, and pre-
mium plans; and
(B) may offer premium-plus plans.
(c) ADMINISTRATIVE CONTRACTING.–The Secretary
may enter into contracts for the purpose of performing
administrative functions (including functions described in
subsection (a)(4) of section 1874A of the Social Security
Act) with respect to the public health insurance option in
the same manner as the Secretary may enter into con-
tracts under subsection (a)(1) of such section. The Sec-
retary has the same authority with respect to the public
health insurance option as the Secretary has under sub-
sections (a)(1) and (b) of section 1874A of the Social Se-
curity Act with respect to title XVIII of such Act. Con-
tracts under this subsection shall not involve the transfer
of insurance risk to such entity.
(d) OMBUDSMAN.–The Secretary shall establish an
office of the ombudsman for the public health insurance
option which shall have duties with respect to the public

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health insurance option similar to the duties of the Medi-
care Beneficiary Ombudsman under section 1808(c)(2) of
the Social Security Act.
(e) DATA COLLECTION.–The Secretary shall collect
such data as may be required to establish premiums and
payment rates for the public health insurance option and
for other purposes under this subtitle, including to im-
prove quality and to reduce racial, ethnic, and other dis-
parities in health and health care.
(f) TREATMENT OF PUBLIC HEALTH INSURANCE OP-
TION.–With respect to the public health insurance option,
the Secretary shall be treated as a QHBP offering entity
offering an Exchange-participating health benefits plan.
(g) ACCESS TO FEDERAL COURTS.–The provisions
of Medicare (and related provisions of title II of the Social
Security Act) relating to access of Medicare beneficiaries
to Federal courts for the enforcement of rights under
Medicare, including with respect to amounts in con-
troversy, shall apply to the public health insurance option
and individuals enrolled under such option under this title
in the same manner as such provisions apply to Medicare
and Medicare beneficiaries.
SEC. 222. PREMIUMS AND FINANCING.
(a) ESTABLISHMENT OF PREMIUMS.–

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(1) IN GENERAL.–The Secretary shall establish
geographically-adjusted premium rates for the public
health insurance option in a manner–
(A) that complies with the premium rules
established by the Commissioner under section
113 for Exchange-participating health benefit
plans; and
(B) at a level sufficient to fully finance the
costs of–
(i) health benefits provided by the
public health insurance option; and
(ii) administrative costs related to op-
erating the public health insurance option.
(2) CONTINGENCY MARGIN.–In establishing
premium rates under paragraph (1), the Secretary
shall include an appropriate amount for a contin-
gency margin.
(b) ACCOUNT.–
(1) ESTABLISHMENT.–There is established in
the Treasury of the United States an Account for
the receipts and disbursements attributable to the
operation of the public health insurance option, in-
cluding the start-up funding under paragraph (2).
Section 1854(g) of the Social Security Act shall
apply to receipts described in the previous sentence

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in the same manner as such section applies to pay-
ments or premiums described in such section.
(2) START-UP FUNDING.–
(A) IN GENERAL.–In order to provide for
the establishment of the public health insurance
option there is hereby appropriated to the Sec-
retary, out of any funds in the Treasury not
otherwise appropriated, $2,000,000,000. In
order to provide for initial claims reserves be-
fore the collection of premiums, there is hereby
appropriated to the Secretary, out of any funds
in the Treasury not otherwise appropriated,
such sums as necessary to cover 90 days worth
of claims reserves based on projected enroll-
ment.
(B) AMORTIZATION OF START-UP FUND-
ING.–The Secretary shall provide for the re-
payment of the startup funding provided under
subparagraph (A) to the Treasury in an amor-
tized manner over the 10-year period beginning
with Y1.
(C) LIMITATION ON FUNDING.–Nothing in
this section shall be construed as authorizing
any additional appropriations to the Account,
other than such amounts as are otherwise pro-

P. 121

vided with respect to other Exchange-partici-
pating health benefits plans
SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) RATES ESTABLISHED BY SECRETARY.–
(1) IN GENERAL.–The Secretary shall establish
payment rates for the public health insurance option
for services and health care providers consistent with
this section and may change such payment rates in
accordance with section 224.
(2) INITIAL PAYMENT RULES.–
(A) IN GENERAL.–Except as provided in
subparagraph (B) and subsection (b)(1), during
Y1, Y2, and Y3, the Secretary shall base the
payment rates under this section for services
and providers described in paragraph (1) on the
payment rates for similar services and providers
under parts A and B of Medicare.
(B) EXCEPTIONS.–
(i) PRACTITIONERS’ SERVICES.–Pay-
ment rates for practitioners’ services other-
wise established under the fee schedule
under section 1848 of the Social Security
Act shall be applied without regard to the
provisions under subsection (f) of such sec-
tion and the update under subsection

P. 122

(d)(4) under such section for a year as ap-
plied under this paragraph shall be not less
than 1 percent.
(ii) ADJUSTMENTS.–The Secretary
may determine the extent to which Medi-
care adjustments applicable to base pay-
ment rates under parts A and B of Medi-
care shall apply under this subtitle.
(3) FOR NEW SERVICES.–The Secretary shall
modify payment rates described in paragraph (2) in
order to accommodate payments for services, such as
well-child visits, that are not otherwise covered
under Medicare.
(4) PRESCRIPTION DRUGS.–Payment rates
under this section for prescription drugs that are not
paid for under part A or part B of Medicare shall
be at rates negotiated by the Secretary.
(b) INCENTIVES FOR PARTICIPATING PROVIDERS.–
(1) INITIAL INCENTIVE PERIOD.–
(A) IN GENERAL.–The Secretary shall
provide, in the case of services described in sub-
paragraph (B) furnished during Y1, Y2, and
Y3, for payment rates that are 5 percent great-
er than the rates established under subsection
(a).

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(B) SERVICES DESCRIBED.–The services
described in this subparagraph are items and
professional services, under the public health in-
surance option by a physician or other health
care practitioner who participates in both Medi-
care and the public health insurance option.
(C) SPECIAL RULES.–A pediatrician and
any other health care practitioner who is a type
of practitioner that does not typically partici-
pate in Medicare (as determined by the Sec-
retary) shall also be eligible for the increased
payment rates under subparagraph (A).
(2) SUBSEQUENT PERIODS.– Beginning with
Y4 and for subsequent years, the Secretary shall
continue to use an administrative process to set such
rates in order to promote payment accuracy, to en-
sure adequate beneficiary access to providers, and to
promote affordablility and the efficient delivery of
medical care consistent with section 221(a). Such
rates shall not be set at levels expected to increase
overall medical costs under the option beyond what
would be expected if the process under subsection
(a)(2) and paragraph (1) of this subsection were
continued.

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(3) ESTABLISHMENT OF A PROVIDER NET-
WORK.–Health care providers participating under
Medicare are participating providers in the public
health insurance option unless they opt out in a
process established by the Secretary.
(c) ADMINISTRATIVE PROCESS FOR SETTING
RATES.–Chapter 5 of title 5, United States Code shall
apply to the process for the initial establishment of pay-
ment rates under this section but not to the specific meth-
odology for establishing such rates or the calculation of
such rates.
(d) CONSTRUCTION.–Nothing in this subtitle shall
be construed as limiting the Secretary’s authority to cor-
rect for payments that are excessive or deficient, taking
into account the provisions of section 221(a) and the
amounts paid for similar health care providers and serv-
ices under other Exchange-participating health benefits
plans.
(e) CONSTRUCTION.–Nothing in this subtitle shall be
construed as affecting the authority of the Secretary to
establish payment rates, including payments to provide for
the more efficient delivery of services, such as the initia-
tives provided for under section 224.
(f) LIMITATIONS ON REVIEW.–There shall be no ad-
ministrative or judicial review of a payment rate or meth-

P. 125

odology established under this section or under section
224.
SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIV-
ERY SYSTEM REFORM.
(a) IN GENERAL.–For plan years beginning with Y1,
the Secretary may utilize innovative payment mechanisms
and policies to determine payments for items and services
under the public health insurance option. The payment
mechanisms and policies under this section may include
patient-centered medical home and other care manage-
ment payments, accountable care organizations, value-
based purchasing, bundling of services, differential pay-
ment rates, performance or utilization based payments,
partial capitation, and direct contracting with providers.
(b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.–
The Secretary shall design and implement the payment
mechanisms and policies under this section in a manner
that–
(1) seeks to–
(A) improve health outcomes;
(B) reduce health disparities (including ra-
cial, ethnic, and other disparities);
(C) provide efficent and affordable care;
(D) address geographic variation in the
provision of health services; or

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(E) prevent or manage chronic illness; and
(2) promotes care that is integrated, patient-
centered, quality, and efficient.
(c) ENCOURAGING THE USE OF HIGH VALUE SERV-
ICES.–To the extent allowed by the benefit standards ap-
plied to all Exchange-participating health benefits plans,
the public health insurance option may modify cost shar-
ing and payment rates to encourage the use of services
that promote health and value.
(d) NON-UNIFORMITY PERMITTED.–Nothing in this
subtitle shall prevent the Secretary from varying payments
based on different payment structure models (such as ac-
countable care organizations and medical homes) under
the public health insurance option for different geographic
areas.
SEC. 225. PROVIDER PARTICIPATION.
(a) IN GENERAL.–The Secretary shall establish con-
ditions of participation for health care providers under the
public health insurance option.
(b) LICENSURE OR CERTIFICATION.–The Secretary
shall not allow a health care provider to participate in the
public health insurance option unless such provider is ap-
propriately licensed or certified under State law.
(c) PAYMENT TERMS FOR PROVIDERS.–

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(1) PHYSICIANS.–The Secretary shall provide
for the annual participation of physicians under the
public health insurance option, for which payment
may be made for services furnished during the year,
in one of 2 classes:
(A) PREFERRED PHYSICIANS.–Those phy-
sicians who agree to accept the payment rate
established under section 223 (without regard
to cost-sharing) as the payment in full.
(B) PARTICIPATING, NON-PREFERRED
PHYSICIANS.–Those physicians who agree not
to impose charges (in relation to the payment
rate described in section 223 for such physi-
cians) that exceed the ratio permitted under
section 1848(g)(2)(C) of the Social Security
Act.
(2) OTHER PROVIDERS.–The Secretary shall
provide for the participation (on an annual or other
basis specified by the Secretary) of health care pro-
viders (other than physicians) under the public
health insurance option under which payment shall
only be available if the provider agrees to accept the
payment rate established under section 223 (without
regard to cost-sharing) as the payment in full.

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(d) EXCLUSION OF CERTAIN PROVIDERS.–The Sec-
retary shall exclude from participation under the public
health insurance option a health care provider that is ex-
cluded from participation in a Federal health care pro-
gram (as defined in section 1128B(f) of the Social Secu-
rity Act).
SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVI-
SIONS.
Provisions of law (other than criminal law provisions)
identified by the Secretary by regulation, in consultation
with the Inspector General of the Department of Health
and Human Services, that impose sanctions with respect
to waste, fraud, and abuse under Medicare, such as the
False Claims Act (31 U.S.C. 3729 et seq.), shall also
apply to the public health insurance option.
Subtitle C–Individual
Affordability Credits
SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EX-
CHANGE.
(a) IN GENERAL.–Subject to the succeeding provi-
sions of this subtitle, in the case of an affordable credit
eligible individual enrolled in an Exchange-participating
health benefits plan–

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(1) the individual shall be eligible for, in accord-
ance with this subtitle, affordability credits con-
sisting of–
(A) an affordability premium credit under
section 243 to be applied against the premium
for the Exchange-participating health benefits
plan in which the individual is enrolled; and
(B) an affordability cost-sharing credit
under section 244 to be applied as a reduction
of the cost-sharing otherwise applicable to such
plan; and
(2) the Commissioner shall pay the QHBP of-
fering entity that offers such plan from the Health
Insurance Exchange Trust Fund the aggregate
amount of affordability credits for all affordable
credit eligible individuals enrolled in such plan.
(b) APPLICATION.–
(1) IN GENERAL.–An Exchange eligible indi-
vidual may apply to the Commissioner through the
Health Insurance Exchange or through another enti-
ty under an arrangement made with the Commis-
sioner, in a form and manner specified by the Com-
missioner. The Commissioner through the Health
Insurance Exchange or through another public enti-
ty under an arrangement made with the Commis-

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sioner shall make a determination as to eligibility of
an individual for affordability credits under this sub-
title.The Commissioner shall establish a process
whereby, on the basis of information otherwise avail-
able, individuals may be deemed to be affordable
credit eligible individuals. In carrying this subtitle,
the Commissioner shall establish effective methods
that ensure that individuals with limited English
proficiency are able to apply for affordability credits.
(2) USE OF STATE MEDICAID AGENCIES.–If
the Commissioner determines that a State Medicaid
agency has the capacity to make a determination of
eligibility for affordability credits under this subtitle
and under the same standards as used by the Com-
missioner, under the Medicaid memorandum of un-
derstanding (as defined in section 205(c)(4))–
(A) the State Medicaid agency is author-
ized to conduct such determinations for any Ex-
change-eligible individual who requests such a
determination; and
(B) the Commissioner shall reimburse the
State Medicaid agency for the costs of con-
ducting such determinations.
(3) MEDICAID SCREEN AND ENROLL OBLIGA-
TION.–In the case of an application made under

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paragraph (1), there shall be a determination of
whether the individual is a Medicaid-eligible indi-
vidual. If the individual is determined to be so eligi-
ble, the Commissioner, through the Medicaid memo-
randum of understanding, shall provide for the en-
rollment of the individual under the State Medicaid
plan in accordance with the Medicaid memorandum
of understanding. In the case of such an enrollment,
the State shall provide for the same periodic redeter-
mination of eligibility under Medicaid as would oth-
erwise apply if the individual had directly applied for
medical assistance to the State Medicaid agency.
(c) USE OF AFFORDABILITY CREDITS.–
(1) IN GENERAL.–In Y1 and Y2 an affordable
credit eligible individual may use an affordability
credit only with respect to a basic plan.
(2) FLEXIBILITY IN PLAN ENROLLMENT AU-
THORIZED.–Beginning with Y3, the Commissioner
shall establish a process to allow an affordability
credit to be used for enrollees in enhanced or pre-
mium plans. In the case of an affordable credit eligi-
ble individual who enrolls in an enhanced or pre-
mium plan, the individual shall be responsible for
any difference between the premium for such plan

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and the affordable credit amount otherwise applica-
ble if the individual had enrolled in a basic plan.
(d) ACCESS TO DATA.–In carrying out this subtitle,
the Commissioner shall request from the Secretary of the
Treasury consistent with section 6103 of the Internal Rev-
enue Code of 1986 such information as may be required
to carry out this subtitle.
(e) NO CASH REBATES.–In no case shall an afford-
able credit eligible individual receive any cash payment as
a result of the application of this subtitle.
SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.
(a) DEFINITION.–
(1) IN GENERAL.–For purposes of this divi-
sion, the term ”affordable credit eligible individual”
means, subject to subsection (b), an individual who
is lawfully present in a State in the United States
(other than as a nonimmigrant described in a sub-
paragraph (excluding subparagraphs (K), (T), (U),
and (V)) of section 101(a)(15) of the Immigration
and Nationality Act)–
(A) who is enrolled under an Exchange-
participating health benefits plan and is not en-
rolled under such plan as an employee (or de-
pendent of an employee) through an employer

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qualified health benefits plan that meets the re-
quirements of section 312;
(B) with family income below 400 percent
of the Federal poverty level for a family of the
size involved; and
(C) who is not a Medicaid eligible indi-
vidual, other than an individual described in
section 202(d)(3) or an individual during a
transition period under section 202(d)(4)(B)(ii).
(2) TREATMENT OF FAMILY.–Except as the
Commissioner may otherwise provide, members of
the same family who are affordable credit eligible in-
dividuals shall be treated as a single affordable cred-
it individual eligible for the applicable credit for such
a family under this subtitle.
(b) LIMITATIONS ON EMPLOYEE AND DEPENDENT
DISQUALIFICATION.–
(1) IN GENERAL.–Subject to paragraph (2),
the term ”affordable credit eligible individual” does
not include a full-time employee of an employer if
the employer offers the employee coverage (for the
employee and dependents) as a full-time employee
under a group health plan if the coverage and em-
ployer contribution under the plan meet the require-
ments of section 312.

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(2) EXCEPTIONS.–
(A) FOR CERTAIN FAMILY CIR-
CUMSTANCES.–The Commissioner shall estab-
lish such exceptions and special rules in the
case described in paragraph (1) as may be ap-
propriate in the case of a divorced or separated
individual or such a dependent of an employee
who would otherwise be an affordable credit eli-
gible individual.
(B) FOR UNAFFORDABLE EMPLOYER COV-
ERAGE.–Beginning in Y2, in the case of full-
time employees for which the cost of the em-
ployee premium for coverage under a group
health plan would exceed 11 percent of current
family income (determined by the Commissioner
on the basis of verifiable documentation and
without regard to section 245), paragraph (1)
shall not apply.
(c) INCOME DEFINED.–
(1) IN GENERAL.–In this title, the term ”in-
come” means modified adjusted gross income (as de-
fined in section 59B of the Internal Revenue Code
of 1986).
(2) STUDY OF INCOME DISREGARDS.–The
Commissioner shall conduct a study that examines

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the application of income disregards for purposes of
this subtitle. Not later than the first day of Y2, the
Commissioner shall submit to Congress a report on
such study and shall include such recommendations
as the Commissioner determines appropriate.
(d) CLARIFICATION OF TREATMENT OF AFFORD-
ABILITY CREDITS.–Affordabilty credits under this sub-
title shall not be treated, for purposes of title IV of the
Personal Responsibility and Work Opportunity Reconcili-
ation Act of 1996, to be a benefit provided under section
403 of such title.
SEC. 243. AFFORDABLE PREMIUM CREDIT.
(a) IN GENERAL.–The affordability premium credit
under this section for an affordable credit eligible indi-
vidual enrolled in an Exchange-participating health bene-
fits plan is in an amount equal to the amount (if any)
by which the premium for the plan (or, if less, the ref-
erence premium amount specified in subsection (c)), ex-
ceeds the affordable premium amount specified in sub-
section (b) for the individual.
(b) AFFORDABLE PREMIUM AMOUNT.–
(1) IN GENERAL.–The affordable premium
amount specified in this subsection for an individual
for monthly premium in a plan year shall be equal
to 1⁄12 of the product of–

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(A) the premium percentage limit specified
in paragraph (2) for the individual based upon
the individual’s family income for the plan year;
and
(B) the individual’s family income for such
plan year.
(2) PREMIUM PERCENTAGE LIMITS BASED ON
TABLE.–The Commissioner shall establish premium
percentage limits so that for individuals whose fam-
ily income is within an income tier specified in the
table in subsection (d) such percentage limits shall
increase, on a sliding scale in a linear manner, from
the initial premium percentage to the final premium
percentage specified in such table for such income
tier.
(c) REFERENCE PREMIUM AMOUNT.–The reference
premium amount specified in this subsection for a plan
year for an individual in a premium rating area is equal
to the average premium for the 3 basic plans in the area
for the plan year with the lowest premium levels. In com-
puting such amount the Commissioner may exclude plans
with extremely limited enrollments.
(d) TABLE OF PREMIUM PERCENTAGE LIMITS AND
ACTUARIAL VALUE PERCENTAGES BASED ON INCOME
TIER.–

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(1) IN GENERAL.–For purposes of this sub-
title, the table specified in this subsection is as fol-
lows:
In the case of family in-
come (expressed as a
percent of FPL) within
the following income
tier:
The initial pre-
mium percent-
age is–
The final pre-
mium percent-
age is–
The actuarial
value percent-
age is–
133% through 150% 1.5% 3% 97%
150% through 200% 3% 5% 93%
200% through 250% 5% 7% 85%
250% through 300% 7% 9% 78%
300% through 350% 9% 10% 72%
350% through 400% 10% 11% 70%
(2) SPECIAL RULES.–For purposes of applying
the table under paragraph (1)–
(A) FOR LOWEST LEVEL OF INCOME.–In
the case of an individual with income that does
not exceed 133 percent of FPL, the individual
shall be considered to have income that is 133%
of FPL.
(B) APPLICATION OF HIGHER ACTUARIAL
VALUE PERCENTAGE AT TIER TRANSITION
POINTS.–If two actuarial value percentages
may be determined with respect to an indi-
vidual, the actuarial value percentage shall be
the higher of such percentages.
SEC. 244. AFFORDABILITY COST-SHARING CREDIT.
(a) IN GENERAL.–The affordability cost-sharing
credit under this section for an affordable credit eligible
individual enrolled in an Exchange-participating health

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benefits plan is in the form of the cost-sharing reduction
described in subsection (b) provided under this section for
the income tier in which the individual is classified based
on the individual’s family income.
(b) COST-SHARING REDUCTIONS.–The Commis-
sioner shall specify a reduction in cost-sharing amounts
and the annual limitation on cost-sharing specified in sec-
tion 122(c)(2)(B) under a basic plan for each income tier
specified in the table under section 243(d), with respect
to a year, in a manner so that, as estimated by the Com-
missioner, the actuarial value of the coverage with such
reduced cost-sharing amounts (and the reduced annual
cost-sharing limit) is equal to the actuarial value percent-
age (specified in the table under section 243(d) for the
income tier involved) of the full actuarial value if there
were no cost-sharing imposed under the plan.
(c) DETERMINATION AND PAYMENT OF COST-SHAR-
ING AFFORDABILITY CREDIT.–In the case of an afford-
able credit eligible individual in a tier enrolled in an Ex-
change-participating health benefits plan offered by a
QHBP offering entity, the Commissioner shall provide for
payment to the offering entity of an amount equivalent
to the increased actuarial value of the benefits under the
plan provided under section 203(c)(2)(B) resulting from
the reduction in cost-sharing described in subsection (b).

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SEC. 245. INCOME DETERMINATIONS.
(a) IN GENERAL.–In applying this subtitle for an
affordability credit for an individual for a plan year, the
individual’s income shall be the income (as defined in sec-
tion 242(c)) for the individual for the most recent taxable
year (as determined in accordance with rules of the Com-
missioner). The Federal poverty level applied shall be such
level in effect as of the date of the application.
(b) PROGRAM INTEGRITY; INCOME VERIFICATION
PROCEDURES.–
(1) PROGRAM INTEGRITY.–The Commissioner
shall take such steps as may be appropriate to en-
sure the accuracy of determinations and redeter-
minations under this subtitle.
(2) INCOME VERIFICATION.–
(A) IN GENERAL.–Upon an initial applica-
tion of an individual for an affordability credit
under this subtitle (or in applying section
242(b)) or upon an application for a change in
the affordability credit based upon a significant
change in family income described in subpara-
graph (A)–
(i) the Commissioner shall request
from the Secretary of the Treasury the dis-
closure to the Commissioner of such infor-
mation as may be permitted to verify the

P. 140

information contained in such application;
and
(ii) the Commissioner shall use the in-
formation so disclosed to verify such infor-
mation.
(B) ALTERNATIVE PROCEDURES.–The
Commissioner shall establish procedures for the
verification of income for purposes of this sub-
title if no income tax return is available for the
most recent completed tax year.
(c) SPECIALRULES.–
(1) CHANGES IN INCOME AS A PERCENT OF
FPL.–In the case that an individual’s income (ex-
pressed as a percentage of the Federal poverty level
for a family of the size involved) for a plan year is
expected (in a manner specified by the Commis-
sioner) to be significantly different from the income
(as so expressed) used under subsection (a), the
Commissioner shall establish rules requiring an indi-
vidual to report, consistent with the mechanism es-
tablished under paragraph (2), significant changes
in such income (including a significant change in
family composition) to the Commissioner and requir-
ing the substitution of such income for the income
otherwise applicable.

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(2) REPORTING OF SIGNIFICANT CHANGES IN
INCOME.–The Commissioner shall establish rules
under which an individual determined to be an af-
fordable credit eligible individual would be required
to inform the Commissioner when there is a signifi-
cant change in the family income of the individual
(expressed as a percentage of the FPL for a family
of the size involved) and of the information regard-
ing such change. Such mechanism shall provide for
guidelines that specify the circumstances that qual-
ify as a significant change, the verifiable information
required to document such a change, and the process
for submission of such information. If the Commis-
sioner receives new information from an individual
regarding the family income of the individual,the
Commissioner shall provide for a redetermination of
the individual’s eligibility to be an affordable credit
eligible individual.
(3) TRANSITION FOR CHIP.–In the case of a
child described in section 202(d)(2), the Commis-
sioner shall establish rules under which the family
income of the child is deemed to be no greater than
the family income of the child as most recently de-
termined before Y1 by the State under title XXI of
the Social Security Act.

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(4) STUDY OF GEOGRAPHIC VARIATION IN AP-
PLICATION OF FPL.–The Commissioner shall exam-
ine the feasibility and implication of adjusting the
application of the Federal poverty level under this
subtitle for different geographic areas so as to re-
flect the variations in cost-of-living among different
areas within the United States. If the Commissioner
determines that an adjustment is feasible, the study
should include a methodology to make such an ad-
justment. Not later than the first day of Y2, the
Commissioner shall submit to Congress a report on
such study and shall include such recommendations
as the Commissioner determines appropriate.
(d) PENALTIES FORMISREPRESENTATION.–In the
case of an individual intentionally misrepresents family in-
come or the individual fails (without regard to intent) to
disclose to the Commissioner a significant change in fam-
ily income under subsection (c) in a manner that results
in the individual becoming an affordable credit eligible in-
dividual when the individual is not or in the amount of
the affordability credit exceeding the correct amount–
(1) the individual is liable for repayment of the
amount of the improper affordability credit; ;and
(2) in the case of such an intentional misrepre-
sentation or other egregious circumstances specified

P. 143

by the Commissioner, the Commissioner may impose
an additional penalty.
SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED
ALIENS.
Nothing in this subtitle shall allow Federal payments
for affordability credits on behalf of individuals who are
not lawfully present in the United States.
TITLE III–SHARED
RESPONSIBILITY
Subtitle A–Individual
Responsibility
SEC. 301. INDIVIDUAL RESPONSIBILITY.
For an individual’s responsibility to obtain acceptable
coverage, see section 59B of the Internal Revenue Code
of 1986 (as added by section 401 of this Act).
Subtitle B–Employer
Responsibility
PART 1–HEALTH COVERAGE PARTICIPATION
REQUIREMENTS
SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIRE-
MENTS.
An employer meets the requirements of this section
if such employer does all of the following:
(1) OFFER OF COVERAGE.–The employer of-
fers each employee individual and family coverage

P. 144

under a qualified health benefits plan (or under a
current employment-based health plan (within the
meaning of section 102(b))) in accordance with sec-
tion 312.
(2) CONTRIBUTION TOWARDS COVERAGE.–If
an employee accepts such offer of coverage, the em-
ployer makes timely contributions towards such cov-
erage in accordance with section 312.
(3) CONTRIBUTION IN LIEU OF COVERAGE.–
Beginning with Y2, if an employee declines such
offer but otherwise obtains coverage in an Exchange-
participating health benefits plan (other than by rea-
son of being covered by family coverage as a spouse
or dependent of the primary insured), the employer
shall make a timely contribution to the Health In-
surance Exchange with respect to each such em-
ployee in accordance with section 313.
SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TO-
WARDS EMPLOYEE AND DEPENDENT COV-
ERAGE.
(a) IN GENERAL.–An employer meets the require-
ments of this section with respect to an employee if the
following requirements are met:
(1) OFFERING OF COVERAGE.–The employer
offers the coverage described in section 311(1) either

P. 145

through an Exchange-participating health benefits
plan or other than through such a plan.
(2) EMPLOYER REQUIRED CONTRIBUTION.–
The employer timely pays to the issuer of such cov-
erage an amount not less than the employer required
contribution specified in subsection (b) for such cov-
erage.
(3) PROVISION OF INFORMATION.–The em-
ployer provides the Health Choices Commissioner,
the Secretary of Labor, the Secretary of Health and
Human Services, and the Secretary of the Treasury,
as applicable, with such information as the Commis-
sioner may require to ascertain compliance with the
requirements of this section.
(4) AUTOENROLLMENT OF EMPLOYEES.–The
employer provides for autoenrollment of the em-
ployee in accordance with subsection (c).
(b) REDUCTION OF EMPLOYEE PREMIUMS THROUGH
MINIMUM EMPLOYER CONTRIBUTION.–
(1) FULL-TIME EMPLOYEES.–The minimum
employer contribution described in this subsection
for coverage of a full-time employee (and, if any, the
employee’s spouse and qualifying children (as de-
fined in section 152(c) of the Internal Revenue Code

P. 146

of 1986) under a qualified health benefits plan (or
current employment-based health plan) is equal to–
(A) in case of individual coverage, not less
than 72.5 percent of the applicable premium
(as defined in section 4980B(f)(4) of such
Code, subject to paragraph (2)) of the lowest
cost plan offered by the employer that is a
qualified health benefits plan (or is such cur-
rent employment-based health plan); and
(B) in the case of family coverage which
includes coverage of such spouse and children,
not less 65 percent of such applicable premium
of such lowest cost plan.
(2) APPLICABLE PREMIUM FOR EXCHANGE COV-
ERAGE.–In this subtitle, the amount of the applica-
ble premium of the lowest cost plan with respect to
coverage of an employee under an Exchange-partici-
pating health benefits plan is the reference premium
amount under section 243(c) for individual coverage
(or, if elected, family coverage) for the premium rat-
ing area in which the individual or family resides.
(3) MINIMUM EMPLOYER CONTRIBUTION FOR
EMPLOYEES OTHER THAN FULL-TIME EMPLOY-
EES.–In the case of coverage for an employee who
is not a full-time employee, the amount of the min-

P. 147

imum employer contribution under this subsection
shall be a proportion (as determined in accordance
with rules of the Health Choices Commissioner, the
Secretary of Labor, the Secretary of Health and
Human Services, and the Secretary of the Treasury,
as applicable) of the minimum employer contribution
under this subsection with respect to a full-time em-
ployee that reflects the proportion of–
(A) the average weekly hours of employ-
ment of the employee by the employer, to
(B) the minimum weekly hours specified
by the Commissioner for an employee to be a
full-time employee.
(4) SALARY REDUCTIONS NOT TREATED AS EM-
PLOYER CONTRIBUTIONS.–For purposes of this sec-
tion, any contribution on behalf of an employee with
respect to which there is a corresponding reduction
in the compensation of the employee shall not be
treated as an amount paid by the employer.
(c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPON-
SORED HEALTH BENEFITS.–
(1) IN GENERAL.–The requirement of this sub-
section with respect to an employer and an employee
is that the employer automatically enroll suchs em-
ployee into the employment-based health benefits

P. 148

plan for individual coverage under the plan option
with the lowest applicable employee premium.
(2) OPT-OUT.–In no case may an employer
automatically enroll an employee in a plan under
paragraph (1) if such employee makes an affirmative
election to opt out of such plan or to elect coverage
under an employment-based health benefits plan of-
fered by such employer. An employer shall provide
an employee with a 30-day period to make such an
affirmative election before the employer may auto-
matically enroll the employee in such a plan.
(3) NOTICE REQUIREMENTS.–
(A) IN GENERAL.–Each employer de-
scribed in paragraph (1) who automatically en-
rolls an employee into a plan as described in
such paragraph shall provide the employees,
within a reasonable period before the beginning
of each plan year (or, in the case of new em-
ployees, within a reasonable period before the
end of the enrollment period for such a new em-
ployee), written notice of the employees’ rights
and obligations relating to the automatic enroll-
ment requirement under such paragraph. Such
notice must be comprehensive and understood

P. 149

by the average employee to whom the automatic
enrollment requirement applies.
(B) INCLUSION OF SPECIFIC INFORMA-
TION.–The written notice under subparagraph
(A) must explain an employee’s right to opt out
of being automatically enrolled in a plan and in
the case that more than one level of benefits or
employee premium level is offered by the em-
ployer involved, the notice must explain which
level of benefits and employee premium level the
employee will be automatically enrolled in the
absence of an affirmative election by the em-
ployee.
SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COV-
ERAGE.
(a) IN GENERAL.–A contribution is made in accord-
ance with this section with respect to an employee if such
contribution is equal to an amount equal to 8 percent of
the average wages paid by the employer during the period
of enrollment (determined by taking into account all em-
ployees of the employer and in such manner as the Com-
missioner provides, including rules providing for the ap-
propriate aggregation of related employers). Any such con-
tribution–

P. 150

(1) shall be paid to the Health Choices Com-
missioner for deposit into the Health Insurance Ex-
change Trust Fund, and
(2) shall not be applied against the premium of
the employee under the Exchange-participating
health benefits plan in which the employee is en-
rolled.
(b) SPECIAL RULES FOR SMALL EMPLOYERS.–
(1) IN GENERAL.–In the case of any employer
who is a small employer for any calendar year, sub-
section (a) shall be applied by substituting the appli-
cable percentage determined in accordance with the
following table for ”8 percent”:
If the annual payroll of such employer for
the preceding calendar year: The applicable
percentage is:
Does not exceed $250,000 ………………………………. 0 percent
Exceeds $250,000, but does not exceed $300,000 2 percent
Exceeds $300,000, but does not exceed $350,000 4 percent
Exceeds $350,000, but does not exceed $400,000 6 percent
(2) SMALL EMPLOYER.–For purposes of this
subsection, the term ”small employer” means any
employer for any calendar year if the annual payroll
of such employer for the preceding calendar year
does not exceed $400,000.
(3) ANNUAL PAYROLL.–For purposes of this
paragraph, the term ”annual payroll” means, with
respect to any employer for any calendar year, the…