123STA T .58PUBLIC LA W 111 – 3 —FE B. 4, 2 0 0 9‘ ‘ (I)tha t qu a lif i es as cr e d ita b lec ov era g eas a grou p health pla n under section 2701 (c)(1) of the P ublic H ealth S ervice A ct
‘‘(II) for w hich the e m plo y er contribution toward any premium for such coverage is at least 4 0 percent; and ‘‘(III) that is offered to all individuals in a manner that would be considered a nondiscrim - inatory eligibility classification for purposes of paragraph ( 3 )(A)(ii) of section 10 5 (h) of the Internal R evenue C odeof1 986 (but determined without regard to clause (i) of subparagraph ( B ) of such paragraph) . ‘‘(ii) EXCEPTION . — Such term does not include cov- erage consisting of— ‘‘(I) benefits provided under a health fle x ible spending arrangement (as defined in section 106(c)(2) of the Internal Revenue Code of 1986); or ‘‘(II) a high deductible health plan (as defined in section 223(c)(2) of such Code) , without regard to whether the plan is purchased in con j unction with a health savings account (as defined under section 223(d) of such Code). ‘‘(C) P R E M I U M AS SISTANCE SU B SI DY .— ‘‘(i) IN G ENERA L .—In this paragraph, the term ‘pre- mium assistance subsidy ’ means, with respect to a targeted low-income child, the amount equal to the difference between the employee contribution required for enrollment only of the employee under qualified employer-sponsored coverage and the employee con- tribution required for enrollment of the employee and the child in such coverage, less any applicable premium cost-sharing applied under the State child health plan (subject to the limitations imposed under section 2103(e), including the requirement to count the total amount of the employee contribution required for enrollment of the employee and the child in such cov- erage toward the annual aggregate cost-sharing limit applied under paragraph (3)(B) of such section). ‘‘(ii) STATE PAYMENT OPTION.—A State may provide a premium assistance subsidy either as reimbursement to an employee for out-of-poc k et expenditures or, sub- ject to clause (iii), directly to the employee’s employer. ‘‘(iii) EMPLOYER OPT-OUT.—An employer may notify a State that it elects to opt-out of being directly paid a premium assistance subsidy on behalf of an employee. In the event of such a notification, an employer shall withhold the total amount of the employee contribution required for enrollment of the employee and the child in the qualified employer-spon- sored coverage and the State shall pay the premium assistance subsidy directly to the employee. ‘‘(iv) T REATMENT AS C H ILD HEALTH ASSISTANCE.— Expenditures for the provision of premium assistance subsidies shall be considered child health assistance
