H. R. 3762 

One Hundred Fourteenth Congress 

of the 

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Monday, 

the fourth day of January, two thousand and sixteen 

An Act 

To provide for reconciliation pursuant to section 2002 of the concurrent resolution 

on the budget for fiscal year 2016. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

TITLE I—HEALTH, EDUCATION, LABOR, 

AND PENSIONS 

SEC. 101. THE PREVENTION AND PUBLIC HEALTH FUND. 

(a) IN GENERAL.—Subsection (b) of section 4002 of the Patient 

Protection and Affordable Care Act (42 U.S.C. 300u–11) is 

amended— 

(1) in paragraph (2), by striking ‘‘2017’’ and inserting 

‘‘2015’’; and 

(2) by striking paragraphs (3) through (5). 

(b) RESCISSION OF UNOBLIGATED FUNDS.—Of the funds made 

available by such section 4002, the unobligated balance is rescinded. 

SEC. 102. COMMUNITY HEALTH CENTER PROGRAM. 

Effective as if included in the enactment of the Medicare Access 

and CHIP Reauthorization Act of 2015 (Public Law 114–10, 129 

Stat. 87), paragraph (1) of section 221(a) of such Act is amended 

by inserting after ‘‘Section 10503(b)(1)(E) of the Patient Protection 

and Affordable Care Act (42 U.S.C. 254b–2(b)(1)(E)) is amended’’ 

the following: ‘‘by striking ‘$3,600,000,000’ and inserting 

‘$3,835,000,000’ and’’. 

SEC. 103. TERRITORIES. 

Section 1323(c) of the Patient Protection and Affordable Care 

Act (42 U.S.C. 18043(c)) is amended by adding at the end the 

following: 

‘‘(3) NO FORCE AND EFFECT.—Effective January 1, 2018, 

this subsection shall have no force or effect.’’. 

SEC. 104. REINSURANCE, RISK CORRIDOR, AND RISK ADJUSTMENT 

PROGRAMS. 

(a) TRANSITIONAL REINSURANCE PROGRAM FOR INDIVIDUAL

MARKET.—Section 1341 of the Patient Protection and Affordable 

Care Act (42 U.S.C. 18061) is amended by adding at the end 

the following: 

‘‘(e) NO FORCE AND EFFECT.—Effective January 1, 2016, the 

Secretary shall not collect fees and shall not make payments under 

this section.’’. 
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SEC. 105. SUPPORT FOR STATE RESPONSE TO SUBSTANCE ABUSE 

PUBLIC HEALTH CRISIS AND URGENT MENTAL HEALTH 

NEEDS. 

(a) IN GENERAL.—There are authorized to be appropriated, 

and are appropriated, out of monies in the Treasury not otherwise 

obligated, $750,000,000 for each of fiscal years 2016 and 2017, 

to the Secretary of Health and Human Services (referred to in 

this section as the ‘‘Secretary’’) to award grants to States to address 

the substance abuse public health crisis or to respond to urgent 

mental health needs within the State. In awarding grants under 

this section, the Secretary may give preference to States with an 

incidence or prevalence of substance use disorders that is substantial relative to other States or to States that identify mental health 

needs within their communities that are urgent relative to such 

needs of other States. Funds appropriated under this subsection 

shall remain available until expended. 

(b) USE OF FUNDS.—Grants awarded to a State under subsection (a) shall be used for one or more of the following public 

health-related activities: 

(1) Improving State prescription drug monitoring programs. 

(2) Implementing prevention activities, and evaluating such 

activities to identify effective strategies to prevent substance 

abuse. 

(3) Training for health care practitioners, such as best 

practices for prescribing opioids, pain management, recognizing 

potential cases of substance abuse, referral of patients to treatment programs, and overdose prevention. 

(4) Supporting access to health care services provided by 

federally certified opioid treatment programs or other appropriate health care providers to treat substance use disorders 

or mental health needs. 

(5) Other public health-related activities, as the State determines appropriate, related to addressing the substance abuse 

public health crisis or responding to urgent mental health 

needs within the State. 

TITLE II—FINANCE 

SEC. 201. RECAPTURE EXCESS ADVANCE PAYMENTS OF PREMIUM TAX 

CREDITS. 

Subparagraph (B) of section 36B(f)(2) of the Internal Revenue 

Code of 1986 is amended by adding at the end the following new 

clause: 

‘‘(iii) NONAPPLICABILITY OF LIMITATION.—This 

subparagraph shall not apply to taxable years ending 

after December 31, 2015, and before January 1, 2018.’’. 

SEC. 202. PREMIUM TAX CREDIT AND COST-SHARING SUBSIDIES. 

(a) REPEAL OF PREMIUM TAX CREDIT.—Subpart C of part IV 

of subchapter A of chapter 1 of the Internal Revenue Code of 

1986 is amended by striking section 36B. 

(b) REPEAL OF COST-SHARING SUBSIDY.—Section 1402 of the 

Patient Protection and Affordable Care Act is repealed. 

(c) REPEAL OF ELIGIBILITY DETERMINATIONS.—The following 

sections of the Patient Protection and Affordable Care Act are 

repealed: 
H. R. 3762—3 

(1) Section 1411 (other than subsection (i), the last sentence 

of subsection (e)(4)(A)(ii), and such provisions of such section 

solely to the extent related to the application of the last sentence of subsection (e)(4)(A)(ii)). 

(2) Section 1412. 

(d) PROTECTING AMERICANS BY REPEAL OF DISCLOSURE

AUTHORITY TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR CERTAIN

PROGRAMS.— 

(1) IN GENERAL.—Paragraph (21) of section 6103(l) of the 

Internal Revenue Code of 1986 is amended by adding at the 

end the following new subparagraph: 

‘‘(D) TERMINATION.—No disclosure may be made under 

this paragraph after December 31, 2017.’’. 

(e) EFFECTIVE DATES.— 

(1) PREMIUM TAX CREDIT.—The amendment made by subsection (a) shall apply to taxable years beginning after 

December 31, 2017. 

(2) COST SHARING-SUBSIDIES AND ELIGIBILITY DETERMINATIONS.—The repeals in subsection (b) and (c) shall take effect 

on December 31, 2017. 

(3) PROTECTING AMERICANS BY RESCINDING DISCLOSURE

AUTHORITY.—The amendments made by subsection (d) shall 

take effect on December 31, 2017. 

SEC. 203. SMALL BUSINESS TAX CREDIT. 

(a) IN GENERAL.—Section 45R of the Internal Revenue Code 

of 1986 is amended by adding at the end the following new subsection: 

‘‘(j) SHALL NOT APPLY.—This section shall not apply with 

respect to amounts paid or incurred in taxable years beginning 

after December 31, 2017.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to amounts paid or incurred in taxable years beginning 

after December 31, 2017. 

SEC. 204. INDIVIDUAL MANDATE. 

(a) IN GENERAL.—Section 5000A(c) of the Internal Revenue 

Code of 1986 is amended— 

(1) in paragraph (2)(B) by striking clauses (ii) and (iii) 

and inserting the following: 

‘‘(ii) Zero percent for taxable years beginning after 

2014.’’, and 

(2) in paragraph (3)— 

(A) by striking ‘‘$695’’ in subparagraph (A) and 

inserting ‘‘$0’’, 

(B) by striking ‘‘and $325 for 2015’’ in subparagraph 

(B), and 

(C) by striking subparagraph (D). 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to months beginning after December 31, 2014. 

SEC. 205. EMPLOYER MANDATE. 

(a) IN GENERAL.— 

(1) Paragraph (1) of section 4980H(c) of the Internal Revenue Code of 1986 is amended by inserting ‘‘($0 in the case 

of months beginning after December 31, 2014)’’ after ‘‘$2,000’’. 
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(2) Paragraph (1) of section 4980H(b) of the Internal Revenue Code of 1986 is amended by inserting ‘‘($0 in the case 

of months beginning after December 31, 2014)’’ after ‘‘$3,000’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to months beginning after December 31, 2014. 

SEC. 206. FEDERAL PAYMENTS TO STATES. 

(a) IN GENERAL.—Notwithstanding section 504(a), 1902(a)(23), 

1903(a), 2002, 2005(a)(4), 2102(a)(7), or 2105(a)(1) of the Social 

Security Act (42 U.S.C. 704(a), 1396a(a)(23), 1396b(a), 1397a, 

1397d(a)(4), 1397bb(a)(7), 1397ee(a)(1)), or the terms of any Medicaid waiver in effect on the date of enactment of this Act that 

is approved under section 1115 or 1915 of the Social Security 

Act (42 U.S.C. 1315, 1396n), for the 1-year period beginning on 

the date of enactment of this Act, no Federal funds provided from 

a program referred to in this subsection that is considered direct 

spending for any year may be made available to a State for payments to a prohibited entity, whether made directly to the prohibited entity or through a managed care organization under contract 

with the State. 

(b) DEFINITIONS.—In this section: 

(1) PROHIBITED ENTITY.—The term ‘‘prohibited entity’’ 

means an entity, including its affiliates, subsidiaries, successors, and clinics— 

(A) that, as of the date of enactment of this Act— 

(i) is an organization described in section 501(c)(3) 

of the Internal Revenue Code of 1986 and exempt 

from tax under section 501(a) of such Code; 

(ii) is an essential community provider described 

in section 156.235 of title 45, Code of Federal Regulations (as in effect on the date of enactment of this 

Act), that is primarily engaged in family planning services, reproductive health, and related medical care; 

and 

(iii) provides for abortions, other than an abortion— 

(I) if the pregnancy is the result of an act 

of rape or incest; or 

(II) in the case where a woman suffers from 

a physical disorder, physical injury, or physical 

illness that would, as certified by a physician, place 

the woman in danger of death unless an abortion 

is performed, including a life-endangering physical 

condition caused by or arising from the pregnancy 

itself; and 

(B) for which the total amount of Federal and State 

expenditures under the Medicaid program under title XIX 

of the Social Security Act in fiscal year 2014 made directly 

to the entity and to any affiliates, subsidiaries, successors, 

or clinics of the entity, or made to the entity and to any 

affiliates, subsidiaries, successors, or clinics of the entity 

as part of a nationwide health care provider network, 

exceeded $350,000,000. 

(2) DIRECT SPENDING.—The term ‘‘direct spending’’ has the 

meaning given that term under section 250(c) of the Balanced 

Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 

900(c)). 
H. R. 3762—5 

SEC. 207. MEDICAID. 

The Social Security Act (42 U.S.C. 301 et seq.) is amended— 

(1) in section 1108(g)(5), by striking ‘‘2019’’ and inserting 

‘‘2017’’; 

(2) in section 1902— 

(A) in subsection (a)(10)(A), in each of clauses (i)(VIII) 

and (ii)(XX), by inserting ‘‘and ending December 31, 2017,’’ 

after ‘‘January 1, 2014,’’; 

(B) in subsection (a)(47)(B), by inserting ‘‘and provided 

that any such election shall cease to be effective on January 

1, 2018, and no such election shall be made after that 

date’’ before the semicolon at the end; and 

(C) in subsection (l)(2)(C), by inserting ‘‘and ending 

December 31, 2017,’’ after ‘‘January 1, 2014,’’; 

(3) in each of sections 1902(gg)(2) and 2105(d)(3)(A), by 

striking ‘‘September 30, 2019’’ and inserting ‘‘September 30, 

2017’’; 

(4) in section 1905— 

(A) in the first sentence of subsection (b), by inserting 

‘‘(50 percent on or after January 1, 2018)’’ after ‘‘55 percent’’; 

(B) in subsection (y)(1), by striking the semicolon at 

the end of subparagraph (B) and all that follows through 

‘‘thereafter’’; and 

(C) in subsection (z)(2)— 

(i) in subparagraph (A), by striking ‘‘each year 

thereafter’’ and inserting ‘‘through 2017’’; and 

(ii) in subparagraph (B)(ii), by striking the semicolon at the end of subclause (IV) and all that follows 

through ‘‘100 percent’’; 

(5) in section 1915(k)(2), by striking ‘‘during the period 

described in paragraph (1)’’ and inserting ‘‘on or after the 

date referred to in paragraph (1) and before January 1, 2018’’; 

(6) in section 1920(e), by adding at the end the following: 

‘‘This subsection shall not apply after December 31, 2017.’’; 

(7) in section 1937(b)(5), by adding at the end the following: 

‘‘This paragraph shall not apply after December 31, 2017.’’; 

and 

(8) in section 1943(a), by inserting ‘‘and before January 

1, 2018,’’ after ‘‘January 1, 2014,’’. 

SEC. 208. REPEAL OF DSH ALLOTMENT REDUCTIONS. 

Section 1923(f) of the Social Security Act (42 U.S.C. 1396r– 

4(f)) is amended by striking paragraphs (7) and (8). 

SEC. 209. REPEAL OF THE TAX ON EMPLOYEE HEALTH INSURANCE 

PREMIUMS AND HEALTH PLAN BENEFITS. 

(a) IN GENERAL.—Chapter 43 of the Internal Revenue Code 

of 1986 is amended by striking section 4980I. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to taxable years beginning after December 31, 2017. 

SEC. 210. REPEAL OF TAX ON OVER-THE-COUNTER MEDICATIONS. 

(a) HSAS.—Subparagraph (A) of section 223(d)(2) of the Internal 

Revenue Code of 1986 is amended by striking ‘‘Such term’’ and 

all that follows through the period. 
H. R. 3762—6 

(b) ARCHER MSAS.—Subparagraph (A) of section 220(d)(2) of 

the Internal Revenue Code of 1986 is amended by striking ‘‘Such 

term’’ and all that follows through the period. 

(c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS AND HEALTH

REIMBURSEMENT ARRANGEMENTS.—Section 106 of the Internal Revenue Code of 1986 is amended by striking subsection (f). 

(d) EFFECTIVE DATES.— 

(1) DISTRIBUTIONS FROM SAVINGS ACCOUNTS.—The amendments made by subsections (a) and (b) shall apply to amounts 

paid with respect to taxable years beginning after December 

31, 2015. 

(2) REIMBURSEMENTS.—The amendment made by subsection (c) shall apply to expenses incurred with respect to 

taxable years beginning after December 31, 2015. 

SEC. 211. REPEAL OF TAX ON HEALTH SAVINGS ACCOUNTS. 

(a) HSAS.—Section 223(f)(4)(A) of the Internal Revenue Code 

of 1986 is amended by striking ‘‘20 percent’’ and inserting ‘‘10 

percent’’. 

(b) ARCHER MSAS.—Section 220(f)(4)(A) of the Internal Revenue 

Code of 1986 is amended by striking ‘‘20 percent’’ and inserting 

‘‘15 percent’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to distributions made after December 31, 2015. 

SEC. 212. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO FLEXIBLE 

SPENDING ACCOUNTS. 

(a) IN GENERAL.—Section 125 of the Internal Revenue Code 

of 1986 is amended by striking subsection (i). 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2015. 

SEC. 213. REPEAL OF TAX ON PRESCRIPTION MEDICATIONS. 

Subsection (j) of section 9008 of the Patient Protection and 

Affordable Care Act is amended to read as follows: 

‘‘(j) REPEAL.—This section shall apply to calendar years beginning after December 31, 2010, and ending before January 1, 2016.’’. 

SEC. 214. REPEAL OF MEDICAL DEVICE EXCISE TAX. 

(a) IN GENERAL.—Chapter 32 of the Internal Revenue Code 

of 1986 is amended by striking subchapter E. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to sales in calendar quarters beginning after December 

31, 2015. 

SEC. 215. REPEAL OF HEALTH INSURANCE TAX. 

Subsection (j) of section 9010 of the Patient Protection and 

Affordable Care Act is amended to read as follows: 

‘‘(j) REPEAL.—This section shall apply to calendar years beginning after December 31, 2013, and ending before January 1, 2016.’’. 

SEC. 216. REPEAL OF ELIMINATION OF DEDUCTION FOR EXPENSES 

ALLOCABLE TO MEDICARE PART D SUBSIDY. 

(a) IN GENERAL.—Section 139A of the Internal Revenue Code 

of 1986 is amended by adding at the end the following new sentence: 

‘‘This section shall not be taken into account for purposes of determining whether any deduction is allowable with respect to any 

cost taken into account in determining such payment.’’. 
H. R. 3762—7 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2015. 

SEC. 217. REPEAL OF CHRONIC CARE TAX. 

(a) IN GENERAL.—Subsection (a) of section 213 of the Internal 

Revenue Code of 1986 is amended by striking ‘‘10 percent’’ and 

inserting ‘‘7.5 percent’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2015. 

SEC. 218. REPEAL OF MEDICARE TAX INCREASE. 

(a) IN GENERAL.—Subsection (b) of section 3101 of the Internal 

Revenue Code of 1986 is amended to read as follows: 

‘‘(b) HOSPITAL INSURANCE.—In addition to the tax imposed by 

the preceding subsection, there is hereby imposed on the income 

of every individual a tax equal to 1.45 percent of the wages (as 

defined in section 3121(a)) received by such individual with respect 

to employment (as defined in section 3121(b).’’. 

(b) SECA.—Subsection (b) of section 1401 of the Internal Revenue Code of 1986 is amended to read as follows: 

‘‘(b) HOSPITAL INSURANCE.—In addition to the tax imposed by 

the preceding subsection, there shall be imposed for each taxable 

year, on the self-employment income of every individual, a tax 

equal to 2.9 percent of the amount of the self-employment income 

for such taxable year.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply with respect to remuneration received after, and taxable 

years beginning after, December 31, 2015. 

SEC. 219. REPEAL OF TANNING TAX. 

(a) IN GENERAL.—The Internal Revenue Code of 1986 is 

amended by striking chapter 49. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to services performed on or after December 31, 2015. 

SEC. 220. REPEAL OF NET INVESTMENT TAX. 

(a) IN GENERAL.—Subtitle A of the Internal Revenue Code 

of 1986 is amended by striking chapter 2A. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2015. 

SEC. 221. REMUNERATION. 

Paragraph (6) of section 162(m) of the Internal Revenue Code 

of 1986 is amended by adding at the end the following new subparagraph: 

‘‘(I) TERMINATION.—This paragraph shall not apply to 

taxable years beginning after December 31, 2015.’’. 

SEC. 222. ECONOMIC SUBSTANCE DOCTRINE. 

(a) IN GENERAL.—Subsection (o) of section 7701 of the Internal 

Revenue Code of 1986 is repealed. 

(b) PENALTY FOR UNDERPAYMENTS.—Paragraph (6) of section 

6662(b) of the Internal Revenue Code of 1986 is repealed. 

(c) INCREASED PENALTY FOR NONDISCLOSED TRANSACTIONS.— Subsection (i) of section 6662 of the Internal Revenue Code of 

1986 is repealed. 

(d) REASONABLE CAUSE EXCEPTION FOR UNDERPAYMENTS.— Paragraph (2) of section 6664(c) of the Internal Revenue Code 

of 1986 is repealed. 
H. R. 3762—8 

(e) REASONABLE CAUSE EXCEPTION FOR NONDISCLOSED TRANSACTIONS.—Paragraph (2) of section 6664(d) of the Internal Revenue 

Code of 1986 is repealed. 

(f) ERRONEOUS CLAIM FOR REFUND OR CREDIT.—Subsection (c) 

of section 6676 of the Internal Revenue Code of 1986 is repealed. 

(g) EFFECTIVE DATE.—The repeals made by this section shall 

apply to transactions entered into, and to underpayments, understatements, or refunds and credits attributable to transactions 

entered into, after December 31, 2015. 

SEC. 223. BUDGETARY SAVINGS FOR EXTENDING MEDICARE SOLVENCY. 

As a result of policies contained in this Act, the Secretary 

of the Treasury shall transfer to the Federal Hospital Insurance 

Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 

1395i) $379,300,000,000 (which represents the full amount of onbudget savings during the period of fiscal years 2016 through 2025) 

for extending Medicare solvency, to remain available until expended. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.