as most recently determined before Y1 by the State under title XXI of the Social Security Act. (4) STUDY OF GEOGRAPHIC VARIATION IN APPLICATION OF FPL.— (A) IN GENERAL.-The Commissioner shall examine the feasibility and implication of adjusting the application of the Federal poverty level under this subtitle for different geographic areas so as to reflect the variations in costof-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 adjustment. 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. (B) INCLUSION OF TERRITORIES. (i) IN GENERAL.-The Commissioner shall ensure that the study under subparagraph (A) covers the territories of the United States and that special attention is paid to the disparity that exists among poverty levels and the cost of living in such territories and to the impact of such disparity on efforts to expand health coverage and ensure health care. (ii) TERRITORIES DEFINED. In this subparagraph, the term "territories of the United States" includes the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Northern Mariana Islands, and any other territory or possession of the United States. (d) PENALTIES FOR MISREPRESENTATION.-In the case of an individual intentionally misrepresents family income or the individual fails (without regard to intent) to disclose to the Commissioner a significant change in family income under subsection (c) in a manner that results in the individual becoming an affordable credit eligible individual 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 misrepresentation or other egregious circumstances specified 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. Subtitle D-Health Insurance Cooperatives SEC. 251. ESTABLISHMENT. Not later than 6 months after the date of the enactment of this Act, the Commissioner, in consultation with the Secretary of the Treasury, shall establish a Consumer Operated and Oriented Plan program (in this subtitle referred to as the "COOP program") under which the Commissioner may make grants and loans for the establishment and initial operation of not-for-profit, member-run health insurance cooperatives (in this subtitle individually referred to as a "cooperative") that provide insurance through the Health Insurance Exchange or a State-based Health Insurance Exchange under section 208. Nothing in this subtitle shall be construed as requiring a State to establish such a cooperative. SEC. 252. START-UP AND SOLVENCY GRANTS AND LOANS. (a) IN GENERAL.-Not later than 36 months after the date of the enactment of this Act, the Commissioner, acting through the CO-OP program, may make (1) loans (of such period and with such terms as the Secretary may specify) to cooperatives to assist such cooperatives with start-up costs; and (2) grants to cooperatives to assist such cooperatives in meeting State solvency requirements in the States in which such cooperative offers or issues insurance coverage. (b) CONDITIONS.-A grant or loan may not be awarded under this section with respect to a cooperative unless the following conditions are met: (1) The cooperative is structured as a not-for-profit, member organization under the law of each State in which such cooperative offers, intends to offer, or issues insurance coverage, with the membership of the cooperative being made up entirely of beneficiaries of the insurance coverage offered by such coop erative. (2) The cooperative did not offer insurance on or before July 16, 2009, and the cooperatives is not an affiliate or successor to an insurance company offering insurance on or before such date. (3) The governing documents of the cooperatives incorporate ethical and conflict of interest standards designed to protect against insurance industry involvement and interference in the governance of the cooperative. (4) The cooperative is not sponsored by a State government. (5) Substantially all of the activities of the cooperative consist of the issuance of qualified health benefit plans through the Health Insurance Exchange or a State-based health insurance exchange. (6) The cooperative is licenced to offer insurance in each State in which it offers insurance. (7) The governance of the cooperative must be subject to a majority vote of its members. (8) As provided in guidance issued by the Secretary of Health and Human Services, the cooperative operates with a strong consumer focus, including timeliness, responsiveness, and accountability to members. (9) Any profits made by the cooperative are used to lower premiums, improve benefits, or to otherwise improve the quality of health care delivered to members. (c) PRIORITY.-The Commissioner, in making grants and loans under this section, shall give priority to cooperatives that (1) operate on a Statewide basis; (2) use an integrated delivery system; or (3) have a significant level of financial support from non-governmental sources. (d) RULES OF CONSTRUCTION.-Nothing in this subtitle shall be construed to prevent a cooperative established in one State from integrating with a cooperative established in another State the administration, issuance of coverage, or other activities related to acting as a QHBP offering entity. Nothing in this subtitle shall be construed as preventing State governments from taking actions to permit such integration. (e) REPAYMENT FOR VIOLATIONS OF TERMS OF PROGRAM.-If a cooperative violates the terms of the CO-OP program and fails to correct the violation within a reasonable period of time, as determined by the Commissioner, the cooperative shall repay the total amount of any loan or grant received by such cooperative under this section, plus interest (at à rate determined by the Secretary). (f) AUTHORIZATION OF APPROPRIATIONS.-There are authorized to be appropriated $5,000,000,000 for the period of fiscal years 2010 through 2014 to provide for grants and loans under this section. SEC. 253. DEFINITIONS. For purposes of this subtitle: (1) STATE.-The term "State" means each of the 50 States and the District of Columbia. (2) MEMBER.-The term "member", with respect to a cooperative, means an individual who, after the cooperative offers health insurance coverage, is enrolled in such coverage. 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 SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS. An employer meets the requirements of this section if such employer does all of the following: (1) OFFER OF COVERAGE.-The employer offers each employee individual and family coverage under a qualified health benefits plan (or under a current employment-based health plan (within the meaning of section 102(b))) in accordance with section 312. (2) CONTRIBUTION TOWARDS COVERAGE.-If an employee accepts such offer of coverage, the employer makes timely contributions towards such coverage 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 reason 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 Insurance Exchange with respect to each such employee in accordance with section 313. SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND DEPEND- (a) IN GENERAL.-An employer meets the requirements 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 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 coverage an amount not less than the employer required contribution specified in subsection (b) for such coverage. (3) PROVISION OF INFORMATION.-The employer 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 Commissioner may require to ascertain compliance with the requirements of this section. (4) AUTOENROLLMENT OF EMPLOYEES.-The employer provides for autoenrollment of the employee 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 defined in section 152(c) of the Internal Revenue Code 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 current 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 COVERAGE.-In this subtitle, the amount of the applicable premium of the lowest cost plan with respect to coverage of an employee under an Exchange-participating health benefits plan is the reference premium amount under section 243(c) for individual coverage (or, if elected, family coverage) for the premium rating area in which the individual or family resides. (3) MINIMUM EMPLOYER CONTRIBUTION FOR EMPLOYEES OTHER THAN FULLTIME EMPLOYEES.-In the case of coverage for an employee who is not a fulltime employee, the amount of the minimum 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 fulltime employee that reflects the proportion of— (A) the average weekly hours of employment 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 EMPLOYER CONTRIBUTIONS.—For purposes of this section, 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 SPONSORED HEALTH BENEFITS. (1) IN GENERAL.-The requirement of this subsection with respect to an employer and an employee is that the employer automatically enroll such employee into the employment-based health benefits 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 offered by such employer. An employer shall provide an employee with a 30-day period to make such an affirmative election before the employer may automatically enroll the employee in such a plan. (3) NOTICE REQUIREMENTS. (A) IN GENERAL.-Each employer described in paragraph (1) who automatically enrolls 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 employees, within a reasonable period before the end of the enrollment period for such a new employee), written notice of the employees' rights and obligations relating to the automatic enrollment requirement under such paragraph. Such notice must be comprehensive and understood by the average employee to whom the automatic enrollment requirement applies. (B) INCLUSION OF SPECIFIC INFORMATION.-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 employer 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 employee. SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE. (a) IN GENERAL.-A contribution is made in accordance 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 employees of the employer and in such manner as the Commissioner provides, including rules providing for the appropriate aggregation of related employers). Any such contribution (1) shall be paid to the Health Choices Commissioner for deposit into the Health Insurance Exchange 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 enrolled. (b) SPECIAL RULES FOR SMALL EMPLOYERS. (1) IN GENERAL.-In the case of any employer who is a small employer for any calendar year, subsection (a) shall be applied by substituting the applicable percentage determined in accordance with the following table for "8 percent": If the annual payroll of such employer for the preceding calendar year: Does not exceed $250,000 ......... Exceeds $250,000, but does not exceed $300,000 The applicable percentage is: 0 percent 2 percent 4 percent 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 aggregate wages paid by the employer during such calendar year. (4) AGGREGATION RULES.-Related employers and predecessors shall be treated as a single employer for purposes of this subsection. SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING. The Health Choices Commissioner (in coordination with the Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury) shall have authority to set standards for determining whether employers or insurers are undertaking any actions to affect the risk pool within the Health Insurance Exchange by inducing individuals to decline coverage under a qualified health benefits plan (or current employment-based health plan (within the meaning of section 102(b)) offered by the employer and instead to enroll in an Exchange-participating health benefits plan. An employer violating such standards shall be treated as not meeting the requirements of this section. PART 2-SATISFACTION OF HEALTH COVERAGE [For sections 321 and 322, see text of bill as introduced on June 14, 2009.] SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS UNDER THE PUBLIC HEALTH SERVICE ACT. (a) IN GENERAL.-Part C of title XXVII of the Public Health Service Act is amended by adding at the end the following new section: "SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS. "(a) ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.— "(1) IN GENERAL.-An employer may make an election with the Secretary to be subject to the health coverage participation requirements. "(2) TIME AND MANNER.-An election under paragraph (1) may be made at such time and in such form and manner as the Secretary may prescribe. "(b) TREATMENT OF COVERAGE RESULTING FROM ELECTION.— “(1) IN GENERAL.-If an employer makes an election to the Secretary under subsection (a)— "(A) such election shall be treated as the establishment and maintenance of a group health plan for purposes of this title, subject to section 151 of the America's Affordable Health Choices Act of 2009, and "(B) the health coverage participation requirements shall be deemed to be included as terms and conditions of such plan. "(2) PERIODIC INVESTIGATIONS TO DETERMINE COMPLIANCE WITH HEALTH COVERAGE PARTICIPATION REQUIREMENTS.-The Secretary shall regularly audit a representative sampling of employers and conduct investigations and other activities with respect to such sampling of employers so as to discover noncompliance with the health coverage participation requirements in connection with such employers (during any period with respect to which an election under subsection (a) is in effect). The Secretary shall communicate findings of noncompliance made by the Secretary under this subsection to the Secretary of the Treasury and the Health Choices Commissioner. The Secretary shall take such timely enforcement action as appropriate to achieve compliance. "(c) HEALTH COVERAGE PARTICIPATION REQUIREMENTS.-For purposes of this section, the term 'health coverage participation requirements' means the requirements of part 1 of subtitle B of title III of division A of the America's Affordable Health Choices Act of 2009 (as in effect on the date of the enactment of this section). "(d) SEPARATE ELECTIONS.-Under regulations prescribed by the Secretary, separate elections may be made under subsection (a) with respect to full-time employees and employees who are not full-time employees. "(e) TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL NONCOMPLIANCE.-The Secretary may terminate the election of any employer under subsection (a) if the Secretary (in coordination with the Health Choices Commissioner) determines that such employer is in substantial noncompliance with the health coverage participation requirements and shall refer any such determination to the Secretary of the Treasury as appropriate. "(f) ENFORCEMENT OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS. “(1) CIVIL PENALTIES.-In the case of any employer who fails (during any period with respect to which the election under subsection (a) is in effect) to satisfy the health coverage participation requirements with respect to any employee, the Secretary may assess a civil penalty against the employer of $100 for each day in the period beginning on the date such failure first occurs and ending on the date such failure is corrected. "(2) LIMITATIONS ON AMOUNT OF PENALTY.— “(A) PENALTY NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILIGENCE.—No penalty shall be assessed under paragraph (1) with respect to any failure during any period for which it is established to the satisfaction of the Secretary that the employer did not know, or exercising reasonable diligence would not have known, that such failure existed. "(B) PENALTY NOT TO APPLY TO FAILURES CORRECTED WITHIN 30 DAYS.— No penalty shall be assessed under paragraph (1) with respect to any failure if"(i) such failure was due to reasonable cause and not to willful neglect, and |