Limiting application of requirements to consumer protections

(a) Removal of Public Law 111–148 plan requirements, other than certain consumer protections (1) In general Notwithstanding any other provision of law, with respect to group health plans and health insurance coverage whether or not offered through an Exchange, except as provided in paragraphs (2) and (3), the provisions of title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.) as in effect on the day before the date of the enactment of Public Law 111–148 shall apply instead of the provisions of such title as in effect after such date. (2) Public Law 111–148 consumer protections continuing to be applied The following sections of the Public Health Service Act, that were added or amended by subtitles A and C of title I of Public Law 111–148, shall continue to apply to group health plans and to health insurance coverage offered in the individual and group market: (A) No lifetime or annual limits Section 2711 (42 U.S.C. 300gg–11; relating to no lifetime or annual limits), except in the case of limited benefit insurance (as defined in section 122(b)). (B) Dependent coverage through age 26 Section 2714 (42 U.S.C. 300bb–14; relating to extension of dependent coverage). (C) Modified guaranteed availability Section 2702 (42 U.S.C. 300gg–1; relating to guaranteed availability of coverage), subject to paragraph (3) and subsection (c). (D) Guaranteed renewability Section 2703 (42 U.S.C. 300gg–2; relating to guaranteed renewability of coverage). (E) Prohibiting pre-existing condition exclusions Section 2704 (42 U.S.C. 300gg–3; relating to prohibition on preexisting conditions). (F) Prohibiting discrimination based on health status Section 2705 (42 U.S.C. 300gg–4; relating to prohibiting discrimination against individual participants and beneficiaries based on health status), subject to subsection (c). (G) Non-discrimination in health care Section 2706 (42 U.S.C. 300gg–5; relating to non-discrimination in health care). (3) Application of a late enrollment penalty for those without continuous coverage (A) In general In the case of an individual who seeks to enroll in health insurance coverage and who, as of the effective date of such enrollment, does not have a continuous period of at least 12 months of creditable coverage, there shall be imposed a late enrollment penalty in the form of an increase in the monthly premiums for coverage of under the plan of 20 percent of the monthly premium otherwise determined for each consecutive full 12-month period (ending before such effective date) in which the individual was not enrolled in creditable coverage. Such increase shall apply during a period, to be specified under regulations of the Secretary but in no case longer than 3 times the length of the most recent period in which the individual did not have continuous coverage. (B) State waiver A State may apply to the Secretary for a waiver of the provisions of subparagraph (A) and the application of alternative provisions providing incentives for State residents to enroll in creditable coverage and maintain continuous creditable coverage. The Secretary shall approve such waiver if the Secretary determines that the alternative provisions provide similar or greater incentives for such enrollment than the incentives otherwise applicable. (4) Coordinating implementation of pre- Public Law 111–148 PHSA provisions with Public Law 111–148 consumer protections (A) In general In applying this subsection, the provisions described in paragraph (2) shall be treated as if they were included in title XXVII of the Public Health Service Act, as in effect before the date of enactment of Public Law 111–148, and, with respect to group health plans and health insurance coverage offered in connection with such plans, in part 7 of subtitle B of title I of the Employee Retirement and Income Security Act of 1974 (29 U.S.C. 1181 et seq.), and, with respect to group health plans, in chapter 100 of the Internal Revenue Code of 1986 as follows: (i) Lifetime limits; dependent coverage The provisions described in paragraphs (2)(A) and (2)(B) shall be treated as included— (I) with respect to group health plans (and health insurance coverage offered with respect to such plans), under subpart 2 of part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–11 et seq.) and subpart B of part 7 of subtitle B of title I of the Employee Retirement and Income Security Act of 1974 (29 U.S.C. 1181 et seq.); (II) also with respect to group health plans, under subchapter B of chapter 100 of the Internal Revenue Code of 1986; and (III) with respect to individual health insurance coverage, under subpart 2 of part B of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–15 et seq.). (ii) Remaining provisions The provision described in paragraph (2) (other than in subparagraph (A) or (B) of such paragraph) shall be treated as included— (I) with respect to group health plans (and health insurance coverage offered with respect to such plans), under subpart 1 of part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.) and subpart A of part 7 of subtitle B of title I of the Employee Retirement and Income Security Act of 1974 (29 U.S.C. 1181 et seq.); (II) also with respect to group health plans, under subchapter A of chapter 100 of the Internal Revenue Code of 1986; and (III) with respect to individual health insurance coverage, under subpart 1 of part B of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–41 et seq.). (B) Conflicting provisions In the case described in paragraph (1) where there is a conflict between a provision described in paragraph (2) and a provision of law described in paragraph (1), the provision described in paragraph (2) shall control and the Secretary, in consultation with the Secretary of the Treasury and the Secretary of Labor, shall establish such rules as may be necessary to carry out this subparagraph. (5) Conforming amendments (A) ERISA Section 715 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185d) is amended— (i) in subsection (a), by striking subsection (b) and inserting subsections (b) and (c); and (ii) by adding at the end the following new subsection: (c) Additional exception Pursuant to section 121 of the Health Care Fairness for All Act, the provisions of part A of title XXVII of the Public Health Service Act referred to in subsection (a), other than those provisions specified in section 121(a)(2) of the Health Care Fairness for All Act, shall not apply to plans and coverage described in subsection (a), whether or not the plans or coverage are offered through an Exchange established by Public Law 111–148.. (B) IRC Section 9815 of the Internal Revenue Code of 1986 is amended— (i) in subsection (a), by striking subsection (b) and inserting subsections (b) and (c); and (ii) by adding at the end the following new subsection: (c) Additional exception Pursuant to section 121 of the Health Care Fairness for All Act, the provisions of part A of title XXVII of the Public Health Service Act referred to in subsection (a), other than those provisions specified in section 121(a)(2) of the Health Care Fairness for All Act, shall not apply to plans described in subsection (a).. (b) State flexibility in ensuring orderly health insurance market outside of an Exchange (1) In general With respect to health insurance coverage offered in a State, the State may, in consultation with the Secretary, take such steps, such as limiting the availability of general open enrollment periods, imposing delays in the effectiveness for coverage, permitting differentials in premiums based on age and other factors, as the State determines necessary in order to ensure an orderly market for health insurance coverage in the State that is not offered through an Exchange. Such steps may include the establishment of such initial open enrollment period during which qualified residents may enroll in health insurance coverage without the imposition of any underwriting as the State determines to be appropriate in ensuring initial access to such coverage. (2) Flexibility in imposing additional requirements Subject to paragraph (5), nothing in this section shall be construed as preventing a State from continuing to apply, to health insurance coverage issued in the State, requirements under the provisions of title XXVII of the Public Health Service Act (as amended by subtitles A and C of title I of Public Law 111–148) that are not continued under subsection (a). (3) State flexibility with respect to Exchanges A State may waive such provisions of part II of subtitle D of title I of Public Law 111–148 (42 U.S.C. 18031 et seq.), in relation to the establishment of an Exchange in such State, as the State determines appropriate in order for the State to implement and administer a market-based system for the availability of health insurance coverage throughout the State. (4) State default enrollment option (A) Enrollment, subject to individual opt-Out Subject to subparagraph (D), a State may elect to provide for the enrollment of residents of the State who are uninsured in default health insurance coverage (as defined in subparagraph (B)) and establishing a Roth HSA for such residents who do not have a Roth HSA unless the resident has affirmatively elected not to be so enrolled and not to have such an account, respectively. If a State makes such an election, the State shall permit eligible residents to enroll in such coverage on a continuous basis. (B) Default health insurance coverage defined In this paragraph, the term default health insurance coverage means, with respect to a State, health insurance coverage that— (i) is a high deductible health plan (within the meaning of section 223(c)(2) of the Internal Revenue Code of 1986) with prescription drug coverage limited to generic drugs for a limited number of chronic conditions (commonly referred to as tier I pharmacy benefit); (ii) meets such requirements as may apply to qualify for the payment of plan premiums from a health savings account under section 223 of such Code (such as age-related premiums and limitation on imposition of preexisting condition exclusions); (iii) has a provider network for covered benefits that is adequate (as determined consistent with guidelines issued by the Secretary) to ensure access to health benefits under such plan; (iv) provides for coverage of childhood immunizations without cost sharing requirements to the extent such immunizations have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved; and (v) meets such other requirements as the State may specify. (C) Roth HSA In this paragraph, the term Roth HSA shall have the meaning given such term by section 530A(c) of the Internal Revenue Code of 1986, as added by section 201(a) of this Act. (D) Simple process for individuals to opt out As a condition of a State providing for the enrollment function described in subparagraph (A), the State must establish an easy-to-use and transparent means by which individuals may elect not to be enrolled in default health insurance coverage or to have a Roth HSA established on the individual’s behalf, or both. (5) Minimum age variation permitted for premium rates With respect to the premium rate charged by a health insurance issuer for health insurance coverage offered in the individual or small group market, a State may not limit the variation by age in such rate with respect to a particular plan or coverage involved by less than a factor of 5 to 1 for adults. The previous sentence shall be treated as if it were included in subpart I of part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.). (c) Inapplicability of required essential health benefits (1) In general Notwithstanding any other provision of law, no health benefits plan shall be required by reason of Federal law to comply with the requirements of sections 1301(a)(1)(B) and 1302 of Public Law 111–148 (42 U.S.C. 18021(a)(1)(B), 18022). (2) State flexibility Nothing in this subsection shall be construed as preventing a State from applying, at its option with respect to health insurance coverage offered through an Exchange or otherwise in the State, the requirements referred to in paragraph (1). (d) Effective date; transition (1) In general Subsection (a), (b), and (c) shall apply to plan years beginning after the date of the enactment of this Act. (2) Sunsetting required contribution for ACA reinsurance program No contribution shall be required under section 1341 of Public Law 111–148 (42 U.S.C. 18061) from any group health plan or health insurance issuer for portions of plans years occurring in months beginning more than 30 days after the date of the enactment of this Act. (e) Secretarial guidance The Secretary of Health and Human Services, in coordination with the Secretary of Labor and the Secretary of the Treasury, shall provide such guidance as may be necessary for the coordinated implementation of this section on a timely basis. (f) Transferring health plan records upon changing plans (1) In general In the case of an individual who is covered under health insurance coverage or as a beneficiary or participant in a group health plan (as such terms are defined in section 2791 of the Public Health Service Act, 42 U.S.C. 300gg–91), if such coverage is ended and the individual obtains other health insurance coverage, group health plan coverage, or other creditable coverage (as defined for purposes of title XXVII of such Act), the issuer of the prior coverage or administrator of the prior plan shall forward information respecting such prior coverage to the issuer of the new coverage or administrator of the new plan or coverage, as the case may be, subject to such rules as the Secretary establishes regarding the right of the beneficiary or participant to object to such forwarding of information. (2) Treatment as plan requirement under PHSA, ERISA, IRC The requirement of paragraph (1) shall apply as if it were a section under part A of title XXVII of the Public Health Service Act, including for purposes of applying section 715 of the Employee Retirement Income Security Act of 1976 (29 U.S.C. 1185d) and section 9815 of the Internal Revenue Code of 1986. (g) Application of risk adjustment (1) In general Any issuer that offers health insurance coverage in the individual market in any of the 50 States or the District of Columbia shall participate in a risk adjustment mechanism under this subsection with respect to any health insurance coverage it so offers in such market, whether or not such coverage is offered through an Exchange. (2) Form and design of risk adjustment mechanism The Secretary shall, in consultation with the National Association of Insurance Commissioners and other interested parties, develop a mechanism to permit the adjustment of risk among health insurance coverage offered in the individual market throughout the 50 States and the District of Columbia. Such mechanism shall be designed to effect the same type of risk adjustment among such coverage that is applicable to risk adjustment of payments among Medicare Advantage organizations under part C of title XVIII of the Social Security Act (42 U.S.C. 1395w–21 et seq.). (3) Transition for new coverage The mechanism developed under paragraph (2) shall provide for transitional protection, over a 3-year period, in the case of health insurance coverage that has not been previously marketed. (4) Development of further risk adjustment mechanism The Secretary shall request the National Association of Insurance Commissioners to develop a permanent model for adjustment of risk among health insurance issuers with respect to health insurance coverage offered in the individual market, with the intention that such a model would substitute for the mechanism developed under paragraph (2). (5) Treatment as plan requirement under PHSA, ERISA, IRC The requirement of paragraph (1) shall apply as if it were a section under part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.), including for purposes of applying section 715 of the Employee Retirement Income Security Act of 1976 (29 U.S.C. 1185d) and section 9815 of the Internal Revenue Code of 1986.