; and (B) a reinsurance and risk-corridor program that involves no Federal funds with respect to coverage both in the individual market and in the small group market. (2) Basis for risk adjustment Mechanisms and programs under paragraph (1) may be based on the health status score of each individual enrolled in health insurance coverage in the individual market and not solely based on the aggregate risk of the risk pool with respect to each plan of health insurance coverage. (e) Modified health status insurance mechanism (1) In general A State may establish a mechanism for providing modified health status insurance in the State to encourage health plans to implement adequate benefit designs and services for a chronically ill individual. (2) Requirements A mechanism under paragraph (1) may implement the following requirements: (A) During the first open enrollment period after the date of enactment of this Act, an individual health plan shall provide coverage for health benefits as defined in the health plan for a period of 12 months. (B) If an individual enrolls in a new health plan during the open enrollment period at the end of the first 12 months of coverage under subparagraph (A), the plan in which the individual was enrolled prior to such period shall be responsible for financing 75 percent of the health benefits administered to the individual under any other health plan in which the individual enrolls for the initial 3-month period of coverage under such other plan. (C) During the 3-month period described in subparagraph (B), the plan in which the individual was enrolled prior to such period shall receive 75 percent of the premiums paid for the individual's coverage under the other health plan. (D) During the third open enrollment period after the date of enactment of this Act, and during all subsequent open enrollment periods, a health plan that has enrollees terminate their coverage in order to enroll in other health plans shall be responsible for financing 75 percent of the health benefits administered to