Title I, SEC. 1372. APPLICATION PROCESS FOR COST SHARING REDUCTIONS. (a) Application. (1) In general. A regional alliance eligible family may apply for a determination of the family adjusted income of the family, for the purpose of establishing eligibility for cost sharing reductions under section 1371. (2) Form. An application under this section shall include such information as may be determined by the regional alliance (consistent with rules developed by the Secretary) and shall include at least information about the family's employment status and income. (b) Timing. (1) In general. An application under this section may be filed at such times as the Secretary may provide, including during any open enrollment period, at the time of a move, or after a change in life circumstances (such as unemployment or divorce) affecting class of enrollment or amount of family share or repayment amount. (2) Consideration. Each regional alliance shall approve or disapprove an application under this section, and notify the applicant of such decision, within such period (specified by the Secretary) after the date of the filing of the application. (3) Approved family defined. In this section and section 1371, the term ``approved family'' means a family for which an application under this section is approved, until the date of termination of such approval under this section. (c) Approval of Application. (1) In general. A regional alliance shall approve an application of a family under this section filed in a month if the application demonstrates that that family adjusted income of the family (as defined in subsection (d) and determined under paragraph (2)) is (or is expected to be) less than 150 percent of the applicable poverty level. (2) Use of current income. In making the determination under paragraph (1), a regional alliance shall take into account the income for the previous 3-month period and current wages from employment (if any), consistent with rules specified by the Secretary. (d) Family Adjusted Income. (1) In general. Except as provided in paragraph (4), in this Act the term ``family adjusted income'' means, with respect to a family, the sum of the adjusted incomes (as defined in paragraph (2)) for all members of the family (determined without regard to section 1012). (2) Adjusted income. In paragraph (1), the term ``adjusted income'' means, with respect to an individual, adjusted gross income (as defined in section 62(a) of the Internal Revenue Code of 1986) (A) determined without regard to sections 135, 162(l), 911, 931, and 933 of such Code, and (B) increased by the amount of interest received or accrued by the individual which is exempt from tax. (3) Presence of additional dependents. At the option of an individual, a family may include (and not be required to separate out) the income of other individuals who are claimed as dependents of the family for income tax purposes, but such individuals shall not be counted as part of the family for purposes of determining the size of the family. (e) Requirement for Periodic Confirmation and Verification and Notices. (1) Confirmation and verification requirement. The continued eligibility of a family for cost sharing reductions under this section is conditioned upon the family's eligibility being (A) confirmed periodically by the regional alliance, and (B) verified (through the filing of a new application under this section) by the regional alliance at the time income reconciliation statements are required to be filed under section 1375. (2) Rules. The Secretary shall issue rules related to the manner in which alliances confirm and verify eligibility under this section. (3) Notices of changes in income and employment status. (A) In general. Each approved family shall promptly notify the regional alliance of any material increase in the family adjusted income (as defined by the Secretary). (B) Response. If a regional alliance receives notice under subparagraph (A) (or from an employer under section 1602(b)(3)(A)(i)) or otherwise receives information indicating a potential significant change in the family's employment status or increase in adjusted family income, the regional alliance shall promptly take steps necessary to reconfirm the family's eligibility. (f) Termination of Cost Sharing Reduction. The regional alliance shall, after notice to the family, terminate the reduction of cost sharing under this subpart for an approved family if the family fails to provide for confirmation or verification or notice required under subsection (c) on a timely basis or the alliance otherwise determines that the family is no longer eligible for such reduction. The previous sentence shall not prevent the family from subsequently reapplying for cost sharing reduction under this section. (g) Treatment of AFDC and SSI Recipients. (1) No application required. AFDC and SSI families are not required to make an application under this section. (2) Notice requirement. Each State (and the Secretary) shall notify each regional alliance, in a manner specified by the Secretary, of the identity (and period of eligibility under the AFDC or SSI programs) of each AFDC and SSI recipient, unless such a recipient elects (in a manner specified by the Secretary) not to accept the reduction of cost sharing under this section.