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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2688 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 2688

 To improve healthcare-related, tax-preferred savings accounts and to 
   provide for cooperative governing of individual and group health 
     insurance coverage across State lines, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 15, 2013

   Mr. Ross introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on Energy 
    and Commerce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
 To improve healthcare-related, tax-preferred savings accounts and to 
   provide for cooperative governing of individual and group health 
     insurance coverage across State lines, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Providing 
Accountability and Transparency to Incentivize Economically Necessary 
Transitions in Health Care Act of 2013'' or the ``PATIENT's Health Care 
Act of 2013''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
              TITLE I--HEALTHCARE-RELATED SAVINGS ACCOUNTS

Sec. 101. Deduction of premiums for high deductible health plans.
Sec. 102. Repeal of high deductible health plan requirement.
Sec. 103. Increase in deductible HSA contribution limitations.
Sec. 104. Medicare eligible individuals eligible to contribute to HSA.
Sec. 105. HSA rollover to Medicare Advantage MSA.
Sec. 106. One-time transfer of flexible spending arrangement balance to 
                            health savings account in case of 
                            separation from employment.
Sec. 107. Payment of high deductible health plan premiums from HSA.
Sec. 108. Repeal of disqualification of expenses for over-the-counter 
                            drugs under certain accounts and 
                            arrangements.
Sec. 109. Payment of long-term care premiums from health flexible 
                            spending arrangement.
Sec. 110. Allowing MSA and HSA rollover to adult child of account 
                            holder.
Sec. 111. Disposition of unused health benefits in cafeteria plans and 
                            flexible spending arrangements.
Sec. 112. Permitting beneficiary contributions to Medicare Advantage 
                            MSA.
Sec. 113. Child health savings account.
                 TITLE II--HEALTH INSURANCE PROVISIONS

Sec. 201. Cooperative governing of individual and group health 
                            insurance coverage.
Sec. 202. Reauthorization of the Preexisting Condition Insurance Plan 
                            (PCIP) Program.

              TITLE I--HEALTHCARE-RELATED SAVINGS ACCOUNTS

SEC. 101. DEDUCTION OF PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 224 
as section 225 and by inserting after section 223 the following new 
section:

``SEC. 224. PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS.

    ``(a) Deduction Allowed.--In the case of an individual, there shall 
be allowed as a deduction for the taxable year the aggregate amount 
paid by such individual as premiums under a high deductible health plan 
with respect to months during such year for which such individual is an 
eligible individual with respect to such health plan.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Eligible individual.--
                    ``(A) In general.--The term `eligible individual' 
                means, with respect to any month, any individual if--
                            ``(i) such individual is covered under a 
                        high deductible health plan as of the 1st day 
                        of such month, and
                            ``(ii) such individual is not, while 
                        covered under a high deductible health plan, 
                        covered under any health plan--
                                    ``(I) which is not a high 
                                deductible health plan, and
                                    ``(II) which provides coverage for 
                                any benefit which is covered under the 
                                high deductible health plan.
                    ``(B) Certain coverage disregarded.--Subparagraph 
                (A)(ii) shall be applied without regard to--
                            ``(i) coverage for any benefit provided by 
                        permitted insurance,
                            ``(ii) coverage (whether through insurance 
                        or otherwise) for accidents, disability, dental 
                        care, vision care, or long-term care, and
                            ``(iii) coverage under a health flexible 
                        spending arrangement during any period 
                        immediately following the end of a plan year of 
                        such arrangement during which unused benefits 
                        or contributions remaining at the end of such 
                        plan year may be paid or reimbursed to plan 
                        participants for qualified benefit expenses 
                        incurred during such period if--
                                    ``(I) the balance in such 
                                arrangement at the end of such plan 
                                year is zero, or
                                    ``(II) the individual is making a 
                                qualified HSA distribution (as defined 
                                in section 106(e)) in an amount equal 
                                to the remaining balance in such 
                                arrangement as of the end of such plan 
                                year, in accordance with rules 
                                prescribed by the Secretary.
            ``(2) High deductible health plan.--
                    ``(A) In general.--The term `high deductible health 
                plan' means a health plan--
                            ``(i) which has an annual deductible which 
                        is not less than--
                                    ``(I) $1,000 for self-only 
                                coverage, and
                                    ``(II) twice the dollar amount in 
                                subclause (I) for family coverage, and
                            ``(ii) the sum of the annual deductible and 
                        the other annual out-of-pocket expenses 
                        required to be paid under the plan (other than 
                        for premiums) for covered benefits does not 
                        exceed--
                                    ``(I) $5,000 for self-only 
                                coverage, and
                                    ``(II) twice the dollar amount in 
                                subclause (I) for family coverage.
                    ``(B) Exclusion of certain plans.--Such term does 
                not include a health plan if substantially all of its 
                coverage is described in paragraph (1)(B).
                    ``(C) Safe harbor for absence of preventive care 
                deductible.--A plan shall not fail to be treated as a 
                high deductible health plan by reason of failing to 
                have a deductible for preventive care (within the 
                meaning of section 1871 of the Social Security Act, 
                except as otherwise provided by the Secretary).
                    ``(D) Special rule for annual out-of-pocket 
                limitation for network plans.--In the case of a plan 
                using a network of providers, such plan shall not fail 
                to be treated as a high deductible health plan by 
                reason of having an out-of-pocket limitation for 
                services provided outside of such network which exceeds 
                the applicable limitation under subparagraph (A)(ii).
            ``(3) Permitted insurance.--The term `permitted insurance' 
        means--
                    ``(A) insurance if substantially all of the 
                coverage provided under such insurance relates to--
                            ``(i) liabilities incurred under workers' 
                        compensation laws,
                            ``(ii) tort liabilities,
                            ``(iii) liabilities relating to ownership 
                        or use of property, or
                            ``(iv) such other similar liabilities as 
                        the Secretary may specify by regulations,
                    ``(B) insurance for a specified disease or illness, 
                and
                    ``(C) insurance paying a fixed amount per day (or 
                other period) of hospitalization.
            ``(4) Family coverage.--The term `family coverage' means 
        any coverage other than self-only coverage.
    ``(c) Special Rules.--
            ``(1) Deduction allowable for only 1 plan.--For purposes of 
        this section, in the case of an individual covered by more than 
        1 high deductible health plan for any month, the individual may 
        only take into account amounts paid for 1 of such plans for 
        such month.
            ``(2) Employer provided coverage.--
                    ``(A) In general.--No deduction shall be allowed to 
                an individual under subsection (a) for any amount paid 
                for coverage under a high deductible health plan for a 
                month if that individual participates in any coverage 
                for such month that is excluded (in whole or in part) 
                from the gross income of the individual or the 
                individual's spouse under section 106.
                    ``(B) Cafeteria plans, etc.--Employer contributions 
                to a cafeteria plan or a flexible spending or similar 
                arrangement which are excluded from gross income under 
                section 106 shall be treated for purposes of this 
                section as paid by the employer.
            ``(3) Contributions to health savings account required.--A 
        deduction shall not be allowed under subsection (a) for a 
        taxable year with respect to such individual if such individual 
        is not allowed a deduction under section 223 for such taxable 
        year.
            ``(4) Medical and health savings accounts.--Subsection (a) 
        shall not apply with respect to any amount which is paid or 
        distributed out of an Archer MSA or a health savings account 
        which is not included in gross income under section 220(f) or 
        223(f), as the case may be.
            ``(5) Coordination with deduction for health insurance of 
        self-employed individuals.--The amount taken into account by 
        the taxpayer in computing the deduction under section 162(l) 
        shall not be taken into account under this section.
            ``(6) Coordination with medical expense deduction.--The 
        amount taken into account by the taxpayer in computing the 
        deduction under this section shall not be taken into account 
        under section 213.''.
    (b) Deduction Allowed Whether or Not Individual Itemizes Other 
Deductions.--Subsection (a) of section 62 of such Code is amended by 
inserting after paragraph (21) the following new paragraph:
            ``(22) Premiums for high deductible health plans.--The 
        deduction allowed by section 224.''.
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the last 
item and inserting the following new items:

``Sec. 224. Premiums for high deductible health plans.
``Sec. 225. Cross reference.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 102. REPEAL OF HIGH DEDUCTIBLE HEALTH PLAN REQUIREMENT.

    (a) In General.--Subsection (a) of section 223 of such Code is 
amended to read as follows:
    ``(a) Deduction Allowed.--In the case of an individual, there shall 
be allowed as a deduction for a taxable year an amount equal to the 
aggregate amount paid in cash during such taxable year by or on behalf 
of such individual to a health savings account of such individual.''.
    (b) Conforming Amendments.--
            (1) Section 223 of such Code is amended by striking 
        subsection (c) and redesignating subsections (d) through (h) as 
        subsections (c) through (g), respectively.
            (2) Section 223(b) of such Code is amended by striking 
        paragraph (8).
            (3) Subparagraph (A) of section 223(c)(1) of such Code (as 
        redesignated by paragraph (1)) is amended--
                    (A) by striking ``subsection (f)(5)'' and inserting 
                ``subsection (e)(5)'', and
                    (B) in clause (ii)--
                            (i) by striking ``the sum of--'' and all 
                        that follows and inserting ``the dollar amount 
                        in effect under subsection (b)(1).''.
            (4) Section 223(f)(1) of such Code (as redesignated by 
        paragraph (1)) is amended by striking ``Each dollar amount in 
        subsections (b)(2) and (c)(2)(A)'' and inserting ``In the case 
        of a taxable year beginning after December 31, 2010, each 
        dollar amount in subsection (b)(1)''.
            (5) Section 26(b)(U) of such Code is amended by striking 
        ``section 223(f)(4)'' and inserting ``section 223(e)(4)''.
            (6) Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(v), 
        4973(a)(5), and 6051(a)(12) of such Code are each amended by 
        striking ``section 223(d)'' each place it appears and inserting 
        ``section 223(c)''.
            (7) Section 106(d)(1) of such Code is amended--
                    (A) by striking ``who is an eligible individual (as 
                defined in section 223(c)(1))'', and
                    (B) by striking ``section 223(d)'' and inserting 
                ``section 223(c)''.
            (8) Section 408(d)(9) of such Code is amended--
                    (A) in subparagraph (A) by striking ``who is an 
                eligible individual (as defined in section 223(c)) 
                and'', and
                    (B) in subparagraph (C) by striking ``computed on 
                the basis of the type of coverage under the high 
                deductible health plan covering the individual at the 
                time of the qualified HSA funding distribution''.
            (9) Section 877A(g)(6) of such Code is amended by striking 
        ``223(f)(4)'' and inserting ``223(e)(4)''.
            (10) Section 4973(g) of such Code is amended--
                    (A) by striking ``section 223(d)'' and inserting 
                ``section 223(c)'',
                    (B) in paragraph (2), by striking ``section 
                223(f)(2)'' and inserting ``section 223(e)(2)'', and
                    (C) by striking ``section 223(f)(3)'' and inserting 
                ``section 223(e)(3)''.
            (11) Section 4975 of such Code is amended--
                    (A) in subsection (c)(6)--
                            (i) by striking ``section 223(d)'' and 
                        inserting ``section 223(c)'', and
                            (ii) by striking ``section 223(e)(2)'' and 
                        inserting ``section 223(d)(2)'', and
                    (B) in subsection (e)(1)(E), by striking ``section 
                223(d)'' and inserting ``section 223(c)''.
            (12) Section 6693(a)(2)(C) of such Code is amended by 
        striking ``section 223(h)'' and inserting ``section 223(g)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2011.

SEC. 103. INCREASE IN DEDUCTIBLE HSA CONTRIBUTION LIMITATIONS.

    (a) In General.--Paragraph (1) of section 223(b) of the Internal 
Revenue Code of 1986 is amended by striking ``the sum of the monthly'' 
and all that follows through ``eligible individual'' and inserting 
``$10,000 ($20,000 in the case of a joint return)''.
    (b) Additional Contributions.--Paragraph (3) of section 223(b) is 
amended to read as follows:
            ``(3) Additional contributions for individuals between 55 
        and 65.--In the case of an individual who has attained the age 
        of 55, but has not attained the age of 66, before the close of 
        the taxable year, the limitation under paragraph (1) shall be 
        increased by $10,000.''.
    (c) Conforming Amendments.--
            (1) Section 223(b) of such Code, as amended by this Act, is 
        amended by striking paragraphs (2) and (5) and by redesignating 
        paragraphs (3), (4), (6), and (7) as paragraphs (2), (3), (4), 
        and (5), respectively.
            (2) Section 223(c)(1)(A)(ii) of such Code (as redesignated 
        by this Act) is amended by striking ``the sum of--'' and all 
        that follows and inserting ``the dollar amount in effect under 
        subsection (b)(1).''.
            (3) Section 223(f)(1) of such Code (as redesignated by this 
        Act) is amended by striking ``Each dollar amount in subsections 
        (b)(2) and (c)(2)(A)'' and inserting ``In the case of a taxable 
        year beginning after December 31, 2013, each dollar amount in 
        subsection (b)(1)''.
            (4) Paragraph (3) of section 223(b) of such Code (as 
        redesignated by paragraph (1)) is amended by striking the last 
        sentence.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 104. MEDICARE ELIGIBLE INDIVIDUALS ELIGIBLE TO CONTRIBUTE TO HSA.

    (a) Subsection (b) of section 223 of the Internal Revenue Code of 
1986, as amended by this Act, is amended by striking paragraph (4).
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 105. HSA ROLLOVER TO MEDICARE ADVANTAGE MSA.

    (a) In General.--Paragraph (2) of section 138(b) of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
subparagraph (A), by adding ``or'' at the end of subparagraph (C), and 
by adding at the end the following new subparagraph:
                    ``(C) a HSA rollover contribution described in 
                subsection (c)(5),''.
    (b) HSA Rollover Contribution.--Subsection (c) of section 138 of 
such Code is amended by adding at the end the following new paragraph:
            ``(5) Rollover contribution.--An amount is described in 
        this paragraph as a rollover contribution if it meets the 
        requirements of subparagraphs (A) and (B).
                    ``(A) In general.--The requirements of this 
                subparagraph are met in the case of an amount paid or 
                distributed from a health savings account to the 
                account beneficiary to the extent the amount received 
                is paid into a Medicare Advantage MSA of such 
                beneficiary not later than the 60th day after the day 
                on which the beneficiary receives the payment or 
                distribution.
                    ``(B) Limitation.--This paragraph shall not apply 
                to any amount described in subparagraph (A) received by 
                an individual from a health savings account if, at any 
                time during the 1-year period ending on the day of such 
                receipt, such individual received any other amount 
                described in subparagraph (A) from a health savings 
                account which was not includible in the individual's 
                gross income because of the application of section 
                223(e)(5)(A).''.
    (c) Conforming Amendment.--Subparagraph (A) of section 223(e)(5) of 
such Code, as amended by this Act, is amended by inserting ``or 
Medicare Advantage MSA'' after ``into a health savings account''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 106. ONE-TIME TRANSFER OF FLEXIBLE SPENDING ARRANGEMENT BALANCE TO 
              HEALTH SAVINGS ACCOUNT IN CASE OF SEPARATION FROM 
              EMPLOYMENT.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (j) as subsection (k) and by 
inserting after subsection (i) the following new subsection:
    ``(j) One-Time Transfer of Remaining Balance in Health Flexible 
Spending Arrangement After Separation From Employment.--
            ``(1) In general.--For purposes of this title, a plan shall 
        not fail to be treated as a health flexible spending 
        arrangement solely because a participant may, in connection 
        with separation from employment with the employer, direct 
        amounts in the participant's account under such arrangement to 
        be contributed on behalf of the participant to a health savings 
        account (as defined in section 223(c)) maintained for the 
        benefit of the participant.''.
    (b) Conforming Amendment.--Section 223(c)(1)(A) of such Code, as 
amended by this Act, is amended by striking ``or section 220(f)(5)'' 
and inserting ``, section 125(j), or section 220(f)(5)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 107. PAYMENT OF HIGH DEDUCTIBLE HEALTH PLAN PREMIUMS FROM HSA.

    (a) In General.--Subparagraph (B) of section 223(c)(2) of such 
Code, as amended by this Act, is amended by inserting ``other than a 
high deductible plan (as defined in section 224(b)(2))'' before the 
period at the end.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2013.

SEC. 108. REPEAL OF DISQUALIFICATION OF EXPENSES FOR OVER-THE-COUNTER 
              DRUGS UNDER CERTAIN ACCOUNTS AND ARRANGEMENTS.

    (a) HSAs.--Subparagraph (A) of section 223(c)(2) of the Internal 
Revenue Code of 1986, as amended by this Act, is amended by striking 
the last sentence.
    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of such 
Code is amended by striking the last sentence.
    (c) Health Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of such Code is amended by striking 
subsection (f).
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses incurred after December 31, 2013.

SEC. 109. PAYMENT OF LONG-TERM CARE PREMIUMS FROM HEALTH FLEXIBLE 
              SPENDING ARRANGEMENT.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986, 
as amended by this Act, is amended by inserting after subsection (h) 
the following new subsection:
    ``(i) Payment of Long-Term Care Premiums From Health Flexible 
Spending Arrangement.--
            ``(1) In general.--No payment for insurance may be made 
        from a health flexible spending arrangement.
            ``(2) Long-term care insurance.--Paragraph (1) shall not 
        apply to any expense for coverage under a qualified long-term 
        care insurance contract (as defined in section 7702B(b)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 110. ALLOWING MSA AND HSA ROLLOVER TO ADULT CHILD OF ACCOUNT 
              HOLDER.

    (a) MSAs.--
            (1) In general.--Subparagraph (A) of section 220(f)(8) of 
        the Internal Revenue Code of 1986 (relating to treatment after 
        death of account holder) is amended--
                    (A) by inserting ``or adult child'' after 
                ``surviving spouse'',
                    (B) by inserting ``or adult child, as the case may 
                be,'' after ``the spouse'', and
                    (C) by inserting ``or adult child'' after 
                ``spouse'' in the heading thereof.
            (2) Adult child defined.--Paragraph (8) of section 220(f) 
        of such Code is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Adult child.--For purposes of this paragraph, 
                the term `adult child' means an individual--
                            ``(i) who is a child of the deceased 
                        individual, and
                            ``(ii) with respect to whom a deduction 
                        under section 151 would not be allowable to 
                        another taxpayer for a taxable year beginning 
                        in the calendar year in which such individual's 
                        taxable year begins.''.
    (b) HSAs.--
            (1) In general.--Subparagraph (A) of section 223(e)(8) of 
        such Code, as amended by this Act, is amended--
                    (A) by inserting ``or adult child'' after 
                ``surviving spouse'',
                    (B) by inserting ``or adult child, as the case may 
                be,'' after ``the spouse'', and
                    (C) by inserting ``or adult child'' after 
                ``spouse'' in the heading thereof.
            (2) Adult child defined.--Paragraph (8) of section 223(e) 
        of such Code, as amended by this Act, is amended by adding at 
        the end the following new subparagraph:
                    ``(C) Adult child.--For purposes of this paragraph, 
                the term `adult child' has the meaning given such term 
                by section 220(f)(8)(C).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 111. DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA PLANS AND 
              FLEXIBLE SPENDING ARRANGEMENTS.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
is amended by redesignating subsections (k) and (l) as subsections (l) 
and (m), respectively, and by inserting after subsection (j) the 
following:
    ``(k) Carryforwards or Payments of Certain Unused Health 
Benefits.--
            ``(1) In general.--For purposes of this title, a plan or 
        other arrangement shall not fail to be treated as a cafeteria 
        plan solely because qualified benefits under such plan include 
        a health flexible spending arrangement under which not more 
        than $500 of unused health benefits may be--
                    ``(A) carried forward to the succeeding plan year 
                of such health flexible spending arrangement, or
                    ``(B) paid to or on behalf of an employee as 
                compensation as of the end of such plan year or upon 
                the termination of, or failure to re-enroll in, such 
                plan or arrangement.
            ``(2) Distribution of unused health benefits on behalf of 
        employee.--For purposes of paragraph (1)(B), unused health 
        benefits paid as compensation on behalf of an employee by the 
        employer shall be--
                    ``(A) includible in gross income and wages of the 
                employee, whether or not a deduction for such payment 
                is allowable under this title to the employee, and
                    ``(B) excludable from--
                            ``(i) gross income to the extent provided 
                        under section 402(e), 457(a) (with respect to 
                        contributions to an eligible deferred 
                        compensation plan (as defined in section 
                        457(b)) of an eligible employer described in 
                        section 457(e)(1)(A)), or 220, and
                            ``(ii) wages to the extent otherwise 
                        provided for amounts so excludable.
            ``(3) Unused health benefits.--For purposes of this 
        subsection, the term `unused health benefits' means the excess 
        of--
                    ``(A) the maximum amount of reimbursement allowable 
                during a plan year under a health flexible spending 
                arrangement, over
                    ``(B) the actual amount of reimbursement during 
                such year under such arrangement.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2013.

SEC. 112. PERMITTING BENEFICIARY CONTRIBUTIONS TO MEDICARE ADVANTAGE 
              MSA.

    (a) In General.--Subsection (b) of section 138 of such Code is 
amended by striking paragraph (2) and by redesignating paragraphs (3) 
and (4) as paragraphs (2) and (3), respectively.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 113. CHILD HEALTH SAVINGS ACCOUNT.

    (a) In General.--Section 223 of the Internal Revenue Code of 1986, 
as amended by this Act, is amended by adding at the end the following 
new subsection:
    ``(h) Child Health Savings Accounts.--
            ``(1) In general.--In the case of an individual, in 
        addition to any deduction allowed under subsection (a) for any 
        taxable year, there shall be allowed as a deduction under this 
        section an amount equal to the aggregate amount paid in cash by 
        the taxpayer during the taxable year to a child health savings 
        account of a child of the taxpayer.
            ``(2) Limitation.--The amount taken into account under 
        paragraph (1) with respect to each child of the taxpayer for 
        the taxable year shall not exceed an amount equal to $3,000.
            ``(3) Child health savings account.--For purposes of this 
        subsection, the term `child health savings account' means a 
        health savings account designated as a child health savings 
        account and established for the benefit of a child of a 
        taxpayer, but only if--
                    ``(A) such account was established for the benefit 
                of the child before the child attains the age of 5, and
                    ``(B) under the written governing instrument 
                creating the trust, no contribution will be accepted to 
                the extent such contribution, when added to previous 
                contributions to the trust for the calendar year, 
                exceeds the dollar amount in effect under paragraph 
                (2).
            ``(4) Treatment of account before age 18.--For purposes of 
        this section, except as otherwise provided in this subsection, 
        a child health savings account established for the benefit of 
        the child of a taxpayer shall be treated as a health savings 
        account of the taxpayer until the child attains the age of 18, 
        after which such account shall be treated as a health savings 
        account of the child.
            ``(5) Distributions.--
                    ``(A) In general.--In the case of a child health 
                savings account established under this section for the 
                benefit of a child of a taxpayer--
                            ``(i) Before age 18.--Any amount paid or 
                        distributed out of such account before the 
                        child has attained the age of 18, shall be 
                        included in the gross income of the taxpayer, 
                        and subparagraph (A) of subsection (f) shall 
                        apply (relating to additional tax on 
                        distributions not used for qualified medical 
                        expenses).
                            ``(ii) Age 18 and older.--Any amount paid 
                        or distributed out of such account after the 
                        child has attained the age of 18 may only be 
                        treated as used to pay qualified medical 
                        expenses to the extent such child is not 
                        covered as a dependent under insurance (other 
                        than permitted insurance) of a parent.
                    ``(B) Exceptions for disability or death of 
                child.--If the child becomes disabled within the 
                meaning of section 72(m)(7) or dies--
                            ``(i) subparagraph (A) shall not apply to 
                        any subsequent payment or distribution, and
                            ``(ii) the taxpayer may rollover the amount 
                        in such account to an individual retirement 
                        plan of the taxpayer, to any health savings 
                        account of the taxpayer, or to any child health 
                        savings account of any other child of the 
                        taxpayer.
                    ``(C) Health insurance may be purchased from 
                account.--Subparagraph (B) of subsection (d)(2) shall 
                not apply to any health savings account originally 
                established as a child health savings account.
            ``(6) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this subsection, including rules for determining application of 
        this subsection in the case of legal guardians and in the case 
        of parents of a child who file separately, are separated, or 
        are not married.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

                 TITLE II--HEALTH INSURANCE PROVISIONS

SEC. 201. COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP HEALTH 
              INSURANCE COVERAGE.

    (a) In General.--Title XXVII of the Public Health Service Act (42 
U.S.C. 300gg et seq.) is amended by adding at the end the following new 
part:

    ``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP HEALTH 
                           INSURANCE COVERAGE

``SEC. 2795. DEFINITIONS.

    ``In this part:
            ``(1) Primary state.--The term `primary State' means, with 
        respect to individual or group health insurance coverage 
        offered by a health insurance issuer, the State designated by 
        the issuer as the State whose covered laws shall govern the 
        health insurance issuer in the sale of such coverage under this 
        part. An issuer, with respect to a particular policy, may only 
        designate one such State as its primary State with respect to 
        all such coverage it offers. Such an issuer may not change the 
        designated primary State with respect to individual or group 
        health insurance coverage once the policy is issued, except 
        that such a change may be made upon renewal of the policy. With 
        respect to such designated State, the issuer is deemed to be 
        doing business in that State.
            ``(2) Secondary state.--The term `secondary State' means, 
        with respect to individual or group health insurance coverage 
        offered by a health insurance issuer, any State that is not the 
        primary State. In the case of a health insurance issuer that is 
        selling a policy in, or to a resident of, a secondary State, 
        the issuer is deemed to be doing business in that secondary 
        State.
            ``(3) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 2791(b)(2), 
        except that such an issuer must be licensed in the primary 
        State and be qualified to sell individual health insurance 
        coverage in that State.
            ``(4) Individual health insurance coverage.--The term 
        `individual health insurance coverage' means health insurance 
        coverage offered in the individual market, as defined in 
        section 2791(e)(1).
            ``(5) Group health insurance coverage.--The term `group 
        health insurance coverage' has the meaning given such term in 
        2791(b)(4).
            ``(6) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of this title for the State with respect to the 
        issuer.
            ``(7) Hazardous financial condition.--The term `hazardous 
        financial condition' means that, based on its present or 
        reasonably anticipated financial condition, a health insurance 
        issuer is unlikely to be able--
                    ``(A) to meet obligations to policyholders with 
                respect to known claims and reasonably anticipated 
                claims; or
                    ``(B) to pay other obligations in the normal course 
                of business.
            ``(8) Covered laws.--
                    ``(A) In general.--The term `covered laws' means 
                the laws, rules, regulations, agreements, and orders 
                governing the insurance business pertaining to--
                            ``(i) individual or group health insurance 
                        coverage issued by a health insurance issuer;
                            ``(ii) the offer, sale, rating (including 
                        medical underwriting), renewal, and issuance of 
                        individual or group health insurance coverage 
                        to an individual;
                            ``(iii) the provision to an individual in 
                        relation to individual or group health 
                        insurance coverage of health care and insurance 
                        related services;
                            ``(iv) the provision to an individual in 
                        relation to individual or group health 
                        insurance coverage of management, operations, 
                        and investment activities of a health insurance 
                        issuer; and
                            ``(v) the provision to an individual in 
                        relation to individual or group health 
                        insurance coverage of loss control and claims 
                        administration for a health insurance issuer 
                        with respect to liability for which the issuer 
                        provides insurance.
                    ``(B) Exception.--Such term does not include any 
                law, rule, regulation, agreement, or order governing 
                the use of care or cost management techniques, 
                including any requirement related to provider 
                contracting, network access or adequacy, health care 
                data collection, or quality assurance.
            ``(9) State.--The term `State' means the 50 States and 
        includes the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
            ``(10) Unfair claims settlement practices.--The term 
        `unfair claims settlement practices' means only the following 
        practices:
                    ``(A) Knowingly misrepresenting to claimants and 
                insured individuals relevant facts or policy provisions 
                relating to coverage at issue.
                    ``(B) Failing to acknowledge with reasonable 
                promptness pertinent communications with respect to 
                claims arising under policies.
                    ``(C) Failing to adopt and implement reasonable 
                standards for the prompt investigation and settlement 
                of claims arising under policies.
                    ``(D) Failing to effectuate prompt, fair, and 
                equitable settlement of claims submitted in which 
                liability has become reasonably clear.
                    ``(E) Refusing to pay claims without conducting a 
                reasonable investigation.
                    ``(F) Failing to affirm or deny coverage of claims 
                within a reasonable period of time after having 
                completed an investigation related to those claims.
                    ``(G) A pattern or practice of compelling insured 
                individuals or their beneficiaries to institute suits 
                to recover amounts due under its policies by offering 
                substantially less than the amounts ultimately 
                recovered in suits brought by them.
                    ``(H) A pattern or practice of attempting to settle 
                or settling claims for less than the amount that a 
                reasonable person would believe the insured individual 
                or his or her beneficiary was entitled by reference to 
                written or printed advertising material accompanying or 
                made part of an application.
                    ``(I) Attempting to settle or settling claims on 
                the basis of an application that was materially altered 
                without notice to, or knowledge or consent of, the 
                insured.
                    ``(J) Failing to provide forms necessary to present 
                claims within 15 calendar days of a request with 
                reasonable explanations regarding their use.
                    ``(K) Attempting to cancel a policy in less time 
                than that prescribed in the policy or by the law of the 
                primary State.
            ``(11) Fraud and abuse.--The term `fraud and abuse' means 
        an act or omission committed by a person who, knowingly and 
        with intent to defraud, commits, or conceals any material 
        information concerning, one or more of the following:
                    ``(A) Presenting, causing to be presented or 
                preparing with knowledge or belief that it will be 
                presented to or by an insurer, a reinsurer, broker or 
                its agent, false information as part of, in support of 
                or concerning a fact material to one or more of the 
                following:
                            ``(i) An application for the issuance or 
                        renewal of an insurance policy or reinsurance 
                        contract.
                            ``(ii) The rating of an insurance policy or 
                        reinsurance contract.
                            ``(iii) A claim for payment or benefit 
                        pursuant to an insurance policy or reinsurance 
                        contract.
                            ``(iv) Premiums paid on an insurance policy 
                        or reinsurance contract.
                            ``(v) Payments made in accordance with the 
                        terms of an insurance policy or reinsurance 
                        contract.
                            ``(vi) A document filed with the 
                        commissioner or the chief insurance regulatory 
                        official of another jurisdiction.
                            ``(vii) The financial condition of an 
                        insurer or reinsurer.
                            ``(viii) The formation, acquisition, 
                        merger, reconsolidation, dissolution or 
                        withdrawal from one or more lines of insurance 
                        or reinsurance in all or part of a State by an 
                        insurer or reinsurer.
                            ``(ix) The issuance of written evidence of 
                        insurance.
                            ``(x) The reinstatement of an insurance 
                        policy.
                    ``(B) Solicitation or acceptance of new or renewal 
                insurance risks on behalf of an insurer reinsurer or 
                other person engaged in the business of insurance by a 
                person who knows or should know that the insurer or 
                other person responsible for the risk is insolvent at 
                the time of the transaction.
                    ``(C) Transaction of the business of insurance in 
                violation of laws requiring a license, certificate of 
                authority or other legal authority for the transaction 
                of the business of insurance.
                    ``(D) Attempt to commit, aiding or abetting in the 
                commission of, or conspiracy to commit the acts or 
                omissions specified in this paragraph.

``SEC. 2796. APPLICATION OF LAW.

    ``(a) In General.--The covered laws of the primary State shall 
apply to individual and group health insurance coverage offered by a 
health insurance issuer in the primary State and in any secondary 
State, but only if the coverage and issuer comply with the conditions 
of this section with respect to the offering of coverage in any 
secondary State and only if the covered laws of the primary State--
            ``(1) do not apply any age limitations with respect to who 
        may purchase such coverage that is a high deductible health 
        plan; and
            ``(2) do not require such coverage that is a high 
        deductible health plan to provide for any specific type of 
        coverage.
    ``(b) Exemptions From Covered Laws in a Secondary State.--Except as 
provided in this section, a health insurance issuer with respect to its 
offer, sale, rating (including medical underwriting), renewal, and 
issuance of individual or group health insurance coverage in any 
secondary State is exempt from any covered laws of the secondary State 
(and any rules, regulations, agreements, or orders sought or issued by 
such State under or related to such covered laws) to the extent that 
such laws would--
            ``(1) make unlawful, or regulate, directly or indirectly, 
        the operation of the health insurance issuer operating in the 
        secondary State, except that any secondary State may require 
        such an issuer--
                    ``(A) to pay, on a nondiscriminatory basis, 
                applicable premium and other taxes (including high risk 
                pool assessments) which are levied on insurers and 
                surplus lines insurers, brokers, or policyholders under 
                the laws of the State;
                    ``(B) to register with and designate the State 
                insurance commissioner as its agent solely for the 
                purpose of receiving service of legal documents or 
                process;
                    ``(C) to submit to an examination of its financial 
                condition by the State insurance commissioner in any 
                State in which the issuer is doing business to 
                determine the issuer's financial condition, if--
                            ``(i) the State insurance commissioner of 
                        the primary State has not done an examination 
                        within the period recommended by the National 
                        Association of Insurance Commissioners; and
                            ``(ii) any such examination is conducted in 
                        accordance with the examiners' handbook of the 
                        National Association of Insurance Commissioners 
                        and is coordinated to avoid unjustified 
                        duplication and unjustified repetition;
                    ``(D) to comply with a lawful order issued--
                            ``(i) in a delinquency proceeding commenced 
                        by the State insurance commissioner if there 
                        has been a finding of financial impairment 
                        under subparagraph (C); or
                            ``(ii) in a voluntary dissolution 
                        proceeding;
                    ``(E) to comply with an injunction issued by a 
                court of competent jurisdiction, upon a petition by the 
                State insurance commissioner alleging that the issuer 
                is in hazardous financial condition;
                    ``(F) to participate, on a nondiscriminatory basis, 
                in any insurance insolvency guaranty association or 
                similar association to which a health insurance issuer 
                in the State is required to belong;
                    ``(G) to comply with any State law regarding fraud 
                and abuse (as defined in section 2795(10)), except that 
                if the State seeks an injunction regarding the conduct 
                described in this subparagraph, such injunction must be 
                obtained from a court of competent jurisdiction;
                    ``(H) to comply with any State law regarding unfair 
                claims settlement practices (as defined in section 
                2795(9)); or
                    ``(I) to comply with the applicable requirements 
                for independent review under section 2798 with respect 
                to coverage offered in the State;
            ``(2) require any individual or group health insurance 
        coverage issued by the issuer to be countersigned by an 
        insurance agent or broker residing in that secondary State;
            ``(3) apply any age limitations with respect to who may 
        purchase such coverage that is a high deductible health plan;
            ``(4) require such coverage that is a high deductible 
        health plan to provide for any specific type of coverage; or
            ``(5) otherwise discriminate against the issuer issuing 
        insurance in both the primary State and in any secondary State.
    ``(c) Clear and Conspicuous Disclosure.--A health insurance issuer 
shall provide the following notice, in 12-point bold type, in any 
insurance coverage offered in a secondary State under this part by such 
a health insurance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the name of the 
health insurance issuer, the name of primary State, the name of the 
secondary State, the name of the secondary State, and the name of the 
secondary State, respectively, for the coverage concerned: `Notice: 
This policy is issued by ____ and is governed by the laws and 
regulations of the State of ____, and it has met all the laws of that 
State as determined by that State's Department of Insurance. This 
policy may be less expensive than others because it is not subject to 
all of the insurance laws and regulations of the State of _____, 
including coverage of some services or benefits mandated by the law of 
the State of _____. Additionally, this policy is not subject to all of 
the consumer protection laws or restrictions on rate changes of the 
State of _____. As with all insurance products, before purchasing this 
policy, you should carefully review the policy and determine what 
health care services the policy covers and what benefits it provides, 
including any exclusions, limitations, or conditions for such services 
or benefits.'.
    ``(d) Prohibition on Certain Reclassifications and Premium 
Increases.--
            ``(1) In general.--For purposes of this section, a health 
        insurance issuer that provides individual or group health 
        insurance coverage to an individual under this part in a 
        primary or secondary State may not upon renewal--
                    ``(A) move or reclassify the individual insured 
                under the health insurance coverage from the class such 
                individual is in at the time of issue of the contract 
                based on the health status-related factors of the 
                individual; or
                    ``(B) increase the premiums assessed the individual 
                for such coverage based on a health status-related 
                factor or change of a health status-related factor or 
                the past or prospective claim experience of the insured 
                individual.
            ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed to prohibit a health insurance issuer--
                    ``(A) from terminating or discontinuing coverage or 
                a class of coverage in accordance with subsections (b) 
                and (c) of section 2742;
                    ``(B) from raising premium rates for all 
                policyholders within a class based on claims 
                experience;
                    ``(C) from changing premiums or offering discounted 
                premiums to individuals who engage in wellness 
                activities at intervals prescribed by the issuer, if 
                such premium changes or incentives--
                            ``(i) are disclosed to the consumer in the 
                        insurance contract;
                            ``(ii) are based on specific wellness 
                        activities that are not applicable to all 
                        individuals; and
                            ``(iii) are not obtainable by all 
                        individuals to whom coverage is offered;
                    ``(D) from reinstating lapsed coverage; or
                    ``(E) from retroactively adjusting the rates 
                charged an insured individual if the initial rates were 
                set based on material misrepresentation by the 
                individual at the time of issue.
    ``(e) Prior Offering of Policy in Primary State.--A health 
insurance issuer may not offer for sale individual or group health 
insurance coverage in a secondary State unless that coverage is 
currently offered for sale in the primary State.
    ``(f) Licensing of Agents or Brokers for Health Insurance 
Issuers.--Any State may require that a person acting, or offering to 
act, as an agent or broker for a health insurance issuer with respect 
to the offering of individual or group health insurance coverage obtain 
a license from that State, with commissions or other compensation 
subject to the provisions of the laws of that State, except that a 
State may not impose any qualification or requirement which 
discriminates against a nonresident agent or broker.
    ``(g) Documents for Submission to State Insurance Commissioner.--
Each health insurance issuer issuing individual or group health 
insurance coverage in both primary and secondary States shall submit--
            ``(1) to the insurance commissioner of each State in which 
        it intends to offer such coverage, before it may offer 
        individual or group health insurance coverage in such State--
                    ``(A) a copy of the plan of operation or 
                feasibility study or any similar statement of the 
                policy being offered and its coverage (which shall 
                include the name of its primary State and its principal 
                place of business);
                    ``(B) written notice of any change in its 
                designation of its primary State; and
                    ``(C) written notice from the issuer of the 
                issuer's compliance with all the laws of the primary 
                State; and
            ``(2) to the insurance commissioner of each secondary State 
        in which it offers individual or group health insurance 
        coverage, a copy of the issuer's quarterly financial statement 
        submitted to the primary State, which statement shall be 
        certified by an independent public accountant and contain a 
        statement of opinion on loss and loss adjustment expense 
        reserves made by--
                    ``(A) a member of the American Academy of 
                Actuaries; or
                    ``(B) a qualified loss reserve specialist.
    ``(h) Power of Courts To Enjoin Conduct.--Nothing in this section 
shall be construed to affect the authority of any Federal or State 
court to enjoin--
            ``(1) the solicitation or sale of individual or group 
        health insurance coverage by a health insurance issuer to any 
        person or group who is not eligible for such insurance; or
            ``(2) the solicitation or sale of individual or group 
        health insurance coverage that violates the requirements of the 
        law of a secondary State which are described in subparagraphs 
        (A) through (H) of section 2796(b)(1).
    ``(i) Power of Secondary States To Take Administrative Action.--
Nothing in this section shall be construed to affect the authority of 
any State to enjoin conduct in violation of that State's laws described 
in section 2796(b)(1).
    ``(j) State Powers To Enforce State Laws.--
            ``(1) In general.--Subject to the provisions of subsection 
        (b)(1)(G) (relating to injunctions) and paragraph (2), nothing 
        in this section shall be construed to affect the authority of 
        any State to make use of any of its powers to enforce the laws 
        of such State with respect to which a health insurance issuer 
        is not exempt under subsection (b).
            ``(2) Courts of competent jurisdiction.--If a State seeks 
        an injunction regarding the conduct described in paragraphs (1) 
        and (2) of subsection (h), such injunction must be obtained 
        from a Federal or State court of competent jurisdiction.
    ``(k) States' Authority To Sue.--Nothing in this section shall 
affect the authority of any State to bring action in any Federal or 
State court.
    ``(l) Generally Applicable Laws.--Nothing in this section shall be 
construed to affect the applicability of State laws generally 
applicable to persons or corporations.
    ``(m) Guaranteed Availability of Coverage to HIPAA Eligible 
Individuals.--To the extent that a health insurance issuer is offering 
coverage in a primary State that does not accommodate residents of 
secondary States or does not provide a working mechanism for residents 
of a secondary State, and the issuer is offering coverage under this 
part in such secondary State which has not adopted a qualified high 
risk pool as its acceptable alternative mechanism (as defined in 
section 2744(c)(2)), the issuer shall, with respect to any individual 
or group health insurance coverage offered in a secondary State under 
this part, comply with the guaranteed availability requirements for 
eligible individuals in section 2741.
    ``(n) No Mandated Benefit Coverage Requirements.--Notwithstanding 
any other provision of law, a health insurance issuer offering 
individual or group health insurance coverage in a primary State and in 
any secondary State in accordance with this part (and any coverage so 
offered) shall not be subject to any Federal law that would otherwise--
            ``(1) apply any age limitations with respect to who may 
        purchase such coverage that is a high deductible health plan; 
        or
            ``(2) require such coverage that is a high deductible 
        health plan to provide for any specific type of coverage.

``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY 
              SELL INTO SECONDARY STATES.

    ``A health insurance issuer may not offer, sell, or issue 
individual or group health insurance coverage in a secondary State if 
the State insurance commissioner does not use a risk-based capital 
formula for the determination of capital and surplus requirements for 
all health insurance issuers.

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    ``(a) Right to External Appeal.--A health insurance issuer may not 
offer, sell, or issue individual or group health insurance coverage in 
a secondary State under the provisions of this title unless--
            ``(1) both the secondary State and the primary State have 
        legislation or regulations in place establishing an independent 
        review process for individuals who are covered by individual 
        health insurance coverage or group health insurance offered by 
        a health insurance issuer, respectively, or
            ``(2) in any case in which the requirements of subparagraph 
        (A) are not met with respect to the either of such States, the 
        issuer provides an independent review mechanism substantially 
        identical (as determined by the applicable State authority of 
        such State) to that prescribed in the `Health Carrier External 
        Review Model Act' of the National Association of Insurance 
        Commissioners for all individuals who purchase insurance 
        coverage under the terms of this part, except that, under such 
        mechanism, the review is conducted by an independent medical 
        reviewer, or a panel of such reviewers, with respect to whom 
        the requirements of subsection (b) are met.
    ``(b) Qualifications of Independent Medical Reviewers.--In the case 
of any independent review mechanism referred to in subsection (a)(2):
            ``(1) In general.--In referring a denial of a claim to an 
        independent medical reviewer, or to any panel of such 
        reviewers, to conduct independent medical review, the issuer 
        shall ensure that--
                    ``(A) each independent medical reviewer meets the 
                qualifications described in paragraphs (2) and (3);
                    ``(B) with respect to each review, each reviewer 
                meets the requirements of paragraph (4) and the 
                reviewer, or at least 1 reviewer on the panel, meets 
                the requirements described in paragraph (5); and
                    ``(C) compensation provided by the issuer to each 
                reviewer is consistent with paragraph (6).
            ``(2) Licensure and expertise.--Each independent medical 
        reviewer shall be a physician (allopathic or osteopathic) or 
        health care professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment under 
                review.
            ``(3) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer in a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (7));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the issuer, from 
                        serving as an independent medical reviewer if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the issuer 
                                and the enrollee (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the issuer and does 
                                not provide services exclusively or 
                                primarily to or on behalf of the 
                                issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        an independent medical reviewer merely on the 
                        basis of such affiliation if the affiliation is 
                        disclosed to the issuer and the enrollee (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        an independent medical reviewer from an entity 
                        if the compensation is provided consistent with 
                        paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--In a case involving treatment, 
                or the provision of items or services--
                            ``(i) by a physician, a reviewer shall be a 
                        practicing physician (allopathic or 
                        osteopathic) of the same or similar specialty, 
                        as a physician who, acting within the 
                        appropriate scope of practice within the State 
                        in which the service is provided or rendered, 
                        typically treats the condition, makes the 
                        diagnosis, or provides the type of treatment 
                        under review; or
                            ``(ii) by a non-physician health care 
                        professional, the reviewer, or at least 1 
                        member of the review panel, shall be a 
                        practicing non-physician health care 
                        professional of the same or similar specialty 
                        as the non-physician health care professional 
                        who, acting within the appropriate scope of 
                        practice within the State in which the service 
                        is provided or rendered, typically treats the 
                        condition, makes the diagnosis, or provides the 
                        type of treatment under review.
                    ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with respect to 
                an individual who is a physician or other health care 
                professional, that the individual provides health care 
                services to individual patients on average at least 2 
                days per week.
            ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a reviewer shall have expertise 
        under paragraph (2) in pediatrics.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by the issuer to an independent medical reviewer in 
        connection with a review under this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a coverage relating to an enrollee, any of the 
        following:
                    ``(A) The issuer involved, or any fiduciary, 
                officer, director, or employee of the issuer.
                    ``(B) The enrollee (or authorized representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the denial.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the denial are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the denial.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the 
                denial involved.
            ``(8) Definitions.--For purposes of this subsection:
                    ``(A) Enrollee.--The term `enrollee' means, with 
                respect to health insurance coverage offered by a 
                health insurance issuer, an individual enrolled with 
                the issuer to receive such coverage.
                    ``(B) Health care professional.--The term `health 
                care professional' means an individual who is licensed, 
                accredited, or certified under State law to provide 
                specified health care services and who is operating 
                within the scope of such licensure, accreditation, or 
                certification.

``SEC. 2799. ENFORCEMENT.

    ``(a) In General.--Subject to subsection (b), with respect to 
specific individual or group health insurance coverage the primary 
State for such coverage has sole jurisdiction to enforce the primary 
State's covered laws in the primary State and any secondary State.
    ``(b) Secondary State's Authority.--Nothing in subsection (a) shall 
be construed to affect the authority of a secondary State to enforce 
its laws as set forth in the exception specified in section 2796(b)(1).
    ``(c) Court Interpretation.--In reviewing action initiated by the 
applicable secondary State authority, the court of competent 
jurisdiction shall apply the covered laws of the primary State.
    ``(d) Notice of Compliance Failure.--In the case of individual 
health insurance coverage offered in a secondary State, or group health 
insurance coverage offered by a health insurance issuer in a secondary 
State, that fails to comply with the covered laws of the primary State, 
the applicable State authority of the secondary State may notify the 
applicable State authority of the primary State.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to health insurance coverage offered, issued, or sold after the 
date that is one year after the date of the enactment of this Act.
    (c) GAO Ongoing Study and Reports.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct an ongoing study concerning the effect of the 
        amendment made by subsection (a) on--
                    (A) the number of uninsured and under-insured;
                    (B) the availability and cost of health insurance 
                policies for individuals with pre-existing medical 
                conditions;
                    (C) the availability and cost of health insurance 
                policies generally;
                    (D) the elimination or reduction of different types 
                of benefits under health insurance policies offered in 
                different States; and
                    (E) cases of fraud or abuse relating to health 
                insurance coverage offered under such amendment and the 
                resolution of such cases.
            (2) Annual reports.--The Comptroller General shall submit 
        to Congress an annual report, after the end of each of the 5 
        years following the effective date of the amendment made by 
        subsection (a), on the ongoing study conducted under paragraph 
        (1).

SEC. 202. REAUTHORIZATION OF THE PREEXISTING CONDITION INSURANCE PLAN 
              (PCIP) PROGRAM.

    (a) In General.--The PCIP program is hereby reauthorized through 
December 31, 2016, and shall continue in effect subject to the 
provisions of this section.
    (b) Elimination of Requirement for Noncoverage for 6 Months To Be 
Eligible Individual.--The condition under paragraph (2) of section 
1101(d) of the Patient Protection and Affordable Care Act (42 U.S.C. 
18001(d)) shall not apply to the reauthorized PCIP program.
    (c) Funding.--
            (1) Initial funding.--Initial funding for the reauthorized 
        PCIP program shall be derived from the following:
                    (A) Funding that was available in the Patient-
                Centered Outcomes Research Institute Trust Fund under 
                section 9511 of the Internal Revenue Code of 1986 on 
                the day before the date of the enactment of this Act.
                    (B) Any unobligated funds in the Prevention and 
                Public Health Fund (under section 4002 of Public Law 
                111-148, 42 U.S.C. 300u-11) attributable to fiscal year 
                2013 as of the day before the date of the enactment of 
                this Act.
            (2) Subsequent funding.--Subsequent funding for the 
        reauthorized PCIP program shall be derived from any funds that 
        would otherwise be made available to such Prevention and Public 
        Health Fund for fiscal years 2014 through 2016.
            (3) Transfer.--Funding under the previous paragraphs shall 
        be transferred to an account within the Department of Health 
        and Human Services that provided funding, as of the day before 
        the date of the enactment of this Act, to carry out the PCIP 
        program.
    (d) Definitions.--In this section:
            (1) The term ``PCIP program'' means the Preexisting 
        Condition Insurance Plan (PCIP) Program established as of the 
        day before the date of the enactment of this Act under section 
        1101 of Public Law 111-148 (42 U.S.C. 18001).
            (2) The term ``reauthorized PCIP program'' means the PCIP 
        program as reauthorized under this section.
                                 <all>
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