; and (C) by inserting after paragraph (1), the following new paragraph: (2) Exclusions Such term shall not include the following: (A) Any individual who is not a qualified individual under section 1312 who is eligible to be covered by a qualified health plan offered through an Exchange. (B) Any individual who is neither a citizen or national of the United States nor an alien lawfully present in the United States. Any alien who is lawfully present solely because such individual was granted deferred action pursuant to the memorandum of the Department of Homeland Security entitled Exercising Prosecutorial Discretion with Respect to Individuals Who Came to the United States as Children issued on June 15, 2012, shall not be treated as lawfully present for purposes of the preceding sentence. . (2) Limitation on use of funds Section 1331(d)) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18051(d) ) is amended by adding at the end the following new paragraph: (5) Prohibition on use of pass-Through funding for certain individuals No amounts transferred to a State under this section may be used to offset the cost of health insurance coverage (including through premium or cost sharing reductions) or to provide any other benefit with respect to an individual who is not an eligible individual (as defined in subsection (e)). . (b) State innovation waivers (1) In general Section 1332(a)(2)(B) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18052(a)(2)(B) ) is amended by inserting (other than the requirement described in section 1312(f)(3)) before the period. (2) Prohibition on use of pass-Through funding for certain individuals Section 1332(a)(3) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18052(a)(3) ) is amended by adding at the end the following new sentence: No amounts paid to a State under this paragraph may be used to offset the cost of health insurance coverage (including through premium or cost sharing reductions) or to provide any other benefit with respect to an