Title VI, SEC. 6124. PAYMENT ADJUSTMENT FOR LARGE EMPLOYERS ELECTING COVERAGE IN A REGIONAL ALLIANCE. (a) Application of Section. (1) In general. Except as otherwise provided in this subsection, this section shall apply to the employer premium payments for full-time employees in a State of an employer if (A)(i) the employer is an eligible sponsor described in section 1311(b)(1)(A), (ii) the employer elected to be a corporate alliance under section 1312(a)(1), and (iii) the election is terminated under section 1313; (B)(i) the employer is such an eligible sponsor as of the first day of the first year of the State, and (ii) the employer did not provide the notice required under section 1312(a)(1) (with respect to an election to become a corporate alliance); or (C) the employer is such an eligible sponsor, (ii) the employer subsequently became a large employer and elected to be a corporate alliance under section 1312(a)(2), and (iii) the election was terminated under section 1313. (2) Effective date. In the case of an employer described in (A) paragraph (1)(A) or (1)(C), this section shall first apply on the effective date of the termination of the election under section 1313, or (B) paragraph (1)(B), this section shall first apply as of January 1, 1996 (or, if later with respect to a State, the first day of the first year for the State). (3) Treatment of employees in small establishments. This section shall not apply to the payment of premiums for full-time employees of an employer described in paragraph (1)(A) or (1)(C), if the employees are employed at an establishment with respect to which the option described in section 1311(b)(1)(C) was exercised. (4) Sunset. This section shall cease applying to an employer with respect to employment in a State after the 7th year in which this section applies to the employer in the State. (5) Large employer defined. In this section, the term ``large employer'' has the meaning given such term in section 1311(d)(3). (b) Additional Amount. (1) In general. If an employer subject to this section for a year has an excess risk percentage (as defined in paragraph (3)) of greater than zero with respect to an alliance area, then the employer shall provide, on a monthly basis, for payment to the regional alliance for such area of an amount equal to \1/12\ of the excess amount described in paragraph (2) for the year. (2) Excess amount. The excess amount described in this paragraph, for an employer for a year with respect to an alliance area, is equal to the product of the following: (A) The reduced weighted average accepted bid for the regional alliance for the area for the year. (B) The total average number of alliance eligible individuals who (i) were full-time employees (or family members of such employees) of the employer, and (ii) residing in the regional alliance area, in the year before the first year in which this section applies to the employer. (C) The extra risk proportion (specified in paragraph (3)) for the employer for such area. (D) The phase-down percentage (specified in paragraph (4)) for the year. (3) Extra risk proportion. (A) In general. The ``extra risk proportion'', specified in this paragraph, with respect to an employer and an alliance area, is a percentage that reflects, for the year before the first year in which this section applies to the employer, the amount by which (i) the average demographic risk for employees (and family members) described in paragraph (2)(B) residing in the alliance area, exceeds (ii) the average demographic risk for all regional alliance eligible individuals residing in the area. (B) Measurement of demographic risk. (i) In general. Demographic risk under subparagraph (A) shall be measured, in a manner specified by the Board, based on the demographic characteristics described in section 6001(c)(1)(A), that relate to the actuarial value of the comprehensive benefit package. (ii) Provision of information. Each employer to which this section applies shall submit, to each regional alliance for which an additional payment is required under this section, such information (and at such time) as the Board may require in order to determine the demographic risk referred to in subparagraph (A)(i). (4) Phase-down percentage. The phase down percentage, specified in this paragraph for an employer for (A) each of the first 4 years to which this section applies to the employer, is 100 percent, (B) the fifth such year, is 75 percent, (C) the sixth such year, is 50 percent, and (D) the seventh such year, is 25 percent. (c) Phase in of Employer Premium Discount. For (1) each of the first 4 years in which this section applies to such employer, section 6123 shall not apply to the employer; (2) the fifth such year, section 6123 shall apply to the employer but the reduction in premium payment effected by such section shall be 25 percent of the reduction that would otherwise apply (but for this subsection); (3) the sixth such year, section 6123 shall apply to the employer but the reduction in premium payment effected by such section shall be 50 percent of the reduction that would otherwise apply (but for this subsection); (4) the seventh such year, section 6123 shall apply to the employer but the reduction in premium payment effected by such section shall be 75 percent of the reduction that would otherwise apply (but for this subsection); or (5) a subsequent year, section 6123 shall apply to the employer without any reduction under this subsection.