State Authorized Alternative Health Arrangement Act of 2011 - Amends the Patient Protection and Affordable Care Act (PPACA) to authorize a state to establish one or more alternative health arrangements that serve the beneficiaries of one or more qualified benefits programs if certain requirements are met. Defines "qualified benefit program" as an entity or arrangement that: (1) is established, authorized, and operating pursuant to state law to provide or administer health coverage for officials, employees, and retirees of a group of employers; and (2) the state finds satisfies criteria to be a qualified health plan, with exceptions.
Requires such a state to designate one or more qualified benefit programs to be offered through such an arrangement.
States that such an arrangement is in addition to an American Health Benefits Exchange (health insurance exchange) or a subsidiary Exchange.
Deems such an arrangement to be an Exchange under PPACA, except exempts the arrangement from requirements relating to offering coverage to all qualified individuals and Exchange certification.
Details how health plan rules apply to the alternative health arrangements provided for under this Act.
Treats a qualified benefits program offered through an alternative health arrangement as: (1) meeting the definition of a qualified health plan for purposes of the essential health benefits provisions in PPACA, and (2) a health plan offered in the individual market under the Internal Revenue Code.