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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1531 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 1531

   To reform the provision of health insurance coverage by promoting 
health savings accounts, State-based alternatives to coverage under the 
Affordable Care Act, and price transparency, in order to promote a more 
        market-based health care system, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              June 9, 2015

 Mr. Cassidy (for himself, Mr. McConnell, Mr. Cornyn, Ms. Collins, Mr. 
Inhofe, Mr. Coats, Mr. Rounds, Mr. Vitter, Mrs. Capito, and Mr. Wicker) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
   To reform the provision of health insurance coverage by promoting 
health savings accounts, State-based alternatives to coverage under the 
Affordable Care Act, and price transparency, in order to promote a more 
        market-based health care system, 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 ``Patient Freedom 
Act of 2015''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Sense of Congress.
                         TITLE I--HEALTH REFORM

Sec. 100. Definitions.
                     Subtitle A--Insurance Reforms

Sec. 101. State options in response to Burwell decision.
Sec. 102. State alternative option.
Sec. 103. Computation of monthly HSA deposit amount for deposit 
                            qualifying residents.
Sec. 104. State options for improved access to health insurance 
                            coverage in each State.
Sec. 105. Expanded access and patient protections.
Sec. 106. Sunsetting certain ACA provisions; continuation of policies 
                            of covering adult children and not applying 
                            lifetime or annual limits.
                          Subtitle B--Medicaid

Sec. 111. Application of health savings accounts in relation to 
                            Medicaid.
                Subtitle C--Provider Price Transparency

Sec. 121. Ensuring access to emergency services without excessive 
                            charges for out-of-network services.
       TITLE II--REFORM OF TAX PROVISIONS RELATING TO HEALTH CARE

            Subtitle A--Promotion of Health Savings Accounts

Sec. 201. Repeal of high deductible health plan requirement.
Sec. 202. Treatment of HSA after death of account beneficiary.
Sec. 203. Purchase of health insurance from HSA account.
Sec. 204. Publishing of cash price for care paid through health savings 
                            accounts.
                  Subtitle B--Health Care Tax Credits

Sec. 211. Limited application of PPACA health premium credit.
Sec. 212. New HSA credit.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that there is a need for legislation 
providing temporary transition funding for those who lose health 
insurance subsidies in the aftermath of a Supreme Court decision in 
favor of the plaintiffs-appellants in the case of King v. Burwell.

                         TITLE I--HEALTH REFORM

SEC. 100. DEFINITIONS.

    In this title:
            (1) Patient-grant electing state.--The term ``patient-grant 
        electing State'' means an electing State that specifies under 
        section 102(a)(4)(B) that it will carry out section 102(b) 
        itself (and not to have section 102(b) carried out by means of 
        the credit under section 36C of the Internal Revenue Code of 
        1986).
            (2) CHIP.--The term ``CHIP'' means the Children's Health 
        Insurance Program established under title XXI of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
            (3) Creditable coverage.--The term ``creditable coverage'' 
        has the meaning given such term in section 2704(c)(1) of the 
        Public Health Service Act (42 U.S.C. 300gg-3(c)(1)), as in 
        effect as of the day before the date of the enactment of this 
        Act.
            (4) Default health insurance coverage.--The term ``default 
        health insurance coverage'' has the meaning given such term in 
        section 105(c)(2).
            (5) Deposit qualifying resident.--The term ``deposit 
        qualifying resident'' has the meaning given such term in 
        section 102(b)(2).
            (6) Electing state.--The term ``electing State'' means a 
        State that elects under section 101(a)(3) the alternative 
        option described in section 102.
            (7) Health insurance coverage.--The term ``health insurance 
        coverage'' has the meaning given such term in section 
        2791(b)(1) of the Public Health Service Act (42 U.S.C. 300gg-
        91(b)(1)).
            (8) Health savings account; hsa.--The terms ``health 
        savings account'' and ``HSA'' mean a health savings account 
        established under section 223 of the Internal Revenue Code of 
        1986.
            (9) Health savings deposit.--The term ``health savings 
        deposit'' means a deposit made into a health savings account 
        pursuant to section 102.
            (10) Medicaid.--The term ``Medicaid'' means the program 
        under title XIX of the Social Security Act (42 U.S.C. 1396 et 
        seq.).
            (11) Medicare.--The term ``Medicare'' means the program 
        under part A or B of title XVIII of the Social Security Act (42 
        U.S.C. 1395 et seq.).
            (12) PPACA.--The term ``PPACA'' means the Patient 
        Protection and Affordable Care Act (Public Law 111-148), as in 
        effect on the day before the date of the enactment of this Act, 
        unless otherwise specified.
            (13) Qualified health plan coverage.--The term ``qualified 
        health plan coverage'' means, with respect to residents of a 
        State, health insurance coverage that meets applicable 
        standards under State law, which standards need not be the same 
        as that previously required of qualified health plans under 
        title I of PPACA, and includes a high deductible health plan 
        (as defined in section 223(c)(2) of the Internal Revenue Code 
        of 1986) and includes coverage under a group health plan.
            (14)  Qualified resident.--The term ``qualified resident'' 
        means, with respect to a State for a month, an individual who 
        is a resident of the State as of the first day of the month and 
        is a citizen or national of the United States or otherwise 
        lawfully residing in the State under color of law.
            (15) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (16) State.--The term ``State'' means the 50 States and the 
        District of Columbia.
            (17) Uninsured.--The term ``uninsured'' means, with respect 
        to an individual, that the individual does not have creditable 
        coverage.

                     Subtitle A--Insurance Reforms

SEC. 101. STATE OPTIONS IN RESPONSE TO BURWELL DECISION.

    (a) In General.--Each State may elect, through written notice to 
the Secretary after the date of the enactment of this Act and in 
accordance with this subtitle, 1 of following 3 options in relation to 
the implementation of title I of the Patient Protection and Affordable 
Care Act after the decision of the Supreme Court in King v. Burwell:
            (1) Continuing implementation of ppaca, including federal 
        subsidies through a state-established exchange.--Under current 
        law, the State establishing a health insurance Exchange under 
        title I of PPACA, which thereby permits the continuation of 
        Federal premium and cost-sharing subsidies for coverage offered 
        through the Exchange as well as continuation of insurance and 
        other requirements under such title.
            (2) Rejection of ppaca, including elimination of federal 
        subsidies now provided through federally established 
        exchange.--Under current law, the State not establishing such 
        an Exchange, potentially resulting, post-Burwell, in the loss 
        of such Federal premium and cost-sharing subsidies and the 
        continued application of other requirements under such title.
            (3) Establishing new state and market-based alternative, 
        with alternative per capita federal deposit system.--The State 
        implementing the alternative option described in section 102, 
        which includes--
                    (A) the waiver of most requirements imposed under 
                such title; and
                    (B) the provision of a new, HSA- and market-based 
                deposit system for individuals who do not otherwise 
                qualify for Federal or State subsidies for health 
                benefits coverage.
If a State fails to make an election described in this subsection, the 
State shall be deemed to have made the election described in paragraph 
(2). A State may, through written notice to the Secretary, change an 
election previously made under this subsection.
    (b) Relation to Current Medicaid ACA Coverage Option.--Nothing in 
this section shall be construed to change the option of a State with 
respect to the implementation of Medicaid ACA coverage under section 
1902(a)(10)(A)(i)(VIII) of the Social Security Act (42 U.S.C. 
1395a(a)(10)(A)(i)(VIII)), except that a State that elects not to 
provide medical assistance to individuals under such section may make 
such individuals deposit qualifying residents under this title.

SEC. 102. STATE ALTERNATIVE OPTION.

    (a) In General.--In the case of a State that elects under section 
101(a)(3) the alternative option under this section, subject to 
subsection (d) and section 105, the following shall apply:
            (1) No federal exchange.--The Federal Government shall not 
        establish or maintain an Exchange in the State under title I of 
        PPACA.
            (2) Elimination of individual and employer shared 
        responsibility for health care tax requirements for residents 
        and employees in state.--The individual and employer health 
        care responsibilities under the amendments made by title I of 
        PPACA (including under sections 5000A and 4980H of the Internal 
        Revenue Code of 1986) shall no longer apply pursuant to section 
        106 with respect to individuals who are residents of such State 
        and with respect to individuals who are employed in such State, 
        respectively.
            (3) Modification of insurance requirements.--Except as 
        specifically provided in this title, the requirements under 
        title I of PPACA (including amendments made by such title) 
        relating to health insurance coverage offered in the State 
        shall not apply except to the extent specified by the State.
            (4) New deposit system through funding hsas.--
                    (A) In general.--Deposit qualifying residents (as 
                defined in subsection (b)(2)) who are residing in the 
                State are eligible for a deposit to a health savings 
                account that may be used for premiums and cost-sharing 
                for health insurance coverage in accordance with 
                subsection (b).
                    (B) State specification of manner of carrying out 
                hsa deposit system (patient-grant electing state).--In 
                making the election under this subsection, a State 
                shall specify whether the State will carry out 
                subsection (b) or if such subsection shall be carried 
                out by means of the credit under section 36C of the 
                Internal Revenue Code of 1986.
            (5) Additional amounts for population health initiatives 
        for state administered hsa deposit system.--A patient-grant 
        electing State (as defined in section 100(1)) is entitled to 
        receive additional funding under subsection (c) for population 
        health initiatives.
    (b) Deposit Through Payment Into HSA for Deposit Qualifying 
Residents.--
            (1) In general.--The subsidies described in subsection 
        (a)(4) for an electing State shall be furnished for each 
        deposit qualifying resident through the deposit of a 
        contribution into an HSA of the individual in the amount 
        determined under section 103.
            (2) Deposit qualifying resident defined.--In this title, 
        the term ``deposit qualifying resident'' means, with respect to 
        a State and a month, an individual--
                    (A) who is a qualified resident (as defined in 
                section 100(14)) of the State as of the first day of 
                the month (or such other day in the month as the 
                Secretary may specify);
                    (B) with respect to whom an HSA has been 
                established, which HSA may have been established by the 
                State in carrying out this section;
                    (C) who is enrolled in qualified health plan 
                coverage (as defined in section 100(13)), which 
                enrollment may have been effected by the State in 
                carrying out this section; and
                    (D) who is not eligible for coverage under 
                Medicare, is not enrolled for benefits under Medicaid 
                or CHIP, and is not enrolled for benefits under chapter 
                55 of title 10, United States Code (relating to 
                TRICARE), or title 39 of such Code (relating to 
                veterans' benefits) or chapter 89 of title 5 of such 
                Code (relating to the Federal Employees Health Benefits 
                Program).
            (3) Payment administration.--
                    (A) State.--In the case of an electing State that 
                elects to carry out this subsection through the State, 
                the Secretary shall provide for payment to the State in 
                amounts and in a time and manner sufficient to permit 
                the State to make timely monthly contributions to HSAs 
                under this subsection. The Secretary may provide for 
                payment to the State using the payment methodology 
                described in subsection (d) of section 1903 of the 
                Social Security Act for payments under subsection (a) 
                of such section (applied without regard to any State 
                matching requirement) and may condition such payments 
                upon the provision of such information as the Secretary 
                may require to ensure the proper payments under this 
                subsection. As a condition of receiving payment under 
                this section, a State shall submit such information, in 
                such form, and manner, as the Secretary shall specify, 
                including information necessary to make the 
                computations of amounts under this section.
                    (B) Federal.--In the case of a State electing to 
                carry out this subsection other than through the State, 
                subsidies described in subsection (a)(4) shall be 
                provided through a refundable tax credit under section 
                36C of the Internal Revenue Code of 1986.
            (4) Construction.--Nothing in this subsection shall be 
        construed--
                    (A) to prevent an individual from affirmatively 
                electing not to have an HSA established on the 
                individual's behalf and not to be enrolled under health 
                insurance coverage;
                    (B) subject to subparagraph (A), to prevent a State 
                from establishing an HSA for each deposit qualifying 
                resident who does not otherwise have an HSA;
                    (C) subject to subparagraph (A), to prevent a State 
                from establishing a mechanism whereby individuals who 
                would be deposit qualifying residents but for paragraph 
                (2)(C) are enrolled under health insurance coverage; 
                and
                    (D) to prevent a State from changing its State 
                Medicaid plan to eliminate coverage under section 
                1902(a)(10)(A)(i)(VIII) of the Social Security Act (42 
                U.S.C. 1396a(a)(10)(A)(i)(VIII)), in order that 
                individuals otherwise covered under such section may 
                qualify for subsidies under this section.
    (c) Population Health Initiative Funding.--
            (1) In general.--In the case of an electing State for a 
        year, the State is entitled to receive payment from the 
        Secretary of Health and Human Services after the end of such 
        year in an amount equal to 2 percent of the actual aggregate 
        amount deposited under subsection (b) into HSAs for residents 
        of the State for the year.
            (2) Use of funds.--Amounts paid to a State under paragraph 
        (1) may only be used for population health initiatives (as 
        defined by the Secretary).
            (3) Entitlement.--Paragraph (1) constitutes budget 
        authority in advance of appropriations Acts and represents the 
        obligation of the Federal Government to provide for the payment 
        to States of amounts provided under such paragraph.
    (d) Requiring Rules for Computing Usual, Customary, and Reasonable 
(UCR) Prices.--As a condition for a State's election of the alternative 
option under this section, the State must provide, through its 
department of insurance or equivalent agency, for establishment of 
rules to carry out section 1867(j)(1)(A)(ii) of the Social Security 
Act, as added by section 121(a)(2).

SEC. 103. COMPUTATION OF MONTHLY HSA DEPOSIT AMOUNT FOR DEPOSIT 
              QUALIFYING RESIDENTS.

    (a) Computation.--
            (1) In general.--The Secretary shall develop a standardized 
        methodology to determine consistent with this section a monthly 
        HSA deposit amount for deposit qualifying residents in each 
        State for months in each year. Subject to paragraphs (3) and 
        (4), such amount shall be equal to \1/12\ of the average per 
        capita annual amount computed under subsection (b) for the 
        State for the year, as adjusted for the deposit qualifying 
        resident involved--
                    (A) for age and geographic area under subsection 
                (c); and
                    (B) for income under subsection (d).
            (2) No variation based on how deposit amount distributed.--
        Such amount shall be the same for a deposit qualifying 
        individual without regard to whether the contribution to the 
        individual's HSA is made by a State under this section or by 
        the Federal Government through the operation of section 36C of 
        the Internal Revenue Code of 1986.
            (3) Patient-grant electing state has flexibility to 
        maintain level of benefits for current aca beneficiaries.--A 
        patient-grant electing State may elect to increase the amount 
        of the deposit for all deposit qualifying individuals under 
        this section to the amounts that the Secretary estimates would 
        have been paid with respect to such individuals under section 
        36B of the Internal Revenue Code of 1986 and section 1402 of 
        PPACA if those sections had remained in effect in the State 
        with respect to such individuals. Such election shall be made 
        for a year and shall continue from year to year until the State 
        elects to terminate such election.
            (4) Special rule for partial deposit for low-income 
        individuals with employer-sponsored insurance (esi).--In the 
        case of an individual who is covered under a group health plan 
        and with respect to such coverage there is a contribution by an 
        employer which is excluded from the individual's gross income 
        under the Internal Revenue Code of 1986, insofar as the 
        individual is a deposit qualifying resident, the amount of the 
        deposit with respect to the individual shall be reduced, in a 
        manner specified by the Secretary in consultation with the 
        Secretary of the Treasury and taking into account the income of 
        the individual's household, by an amount that is approximately 
        equivalent to the estimated amount of the reduction in the 
        amount of income tax resulting from such exclusion (and any 
        reduction in taxes imposed by chapter 21 or chapter 2 of such 
        Code by reason of any exclusion of such contributions from 
        wages and self employment income).
    (b) Computation of Unadjusted Per Capita.--
            (1) For states that continue ppaca medicaid coverage.--
                    (A) In general.--In the case of a State that 
                provides medical assistance under section 
                1902(a)(10)(A)(i)(VIII) of the Social Security Act (42 
                U.S.C. 1396b(a)(10)(A)(i)(VIII)) during a year, subject 
                to paragraphs (3) and (4), the Secretary shall compute 
                an average per capita annual amount for the State for 
                the year equal to--
                            (i) the amount specified in subparagraph 
                        (B), divided by
                            (ii) the average monthly number of deposit 
                        qualifying residents of the State in the year.
                    (B) Amount based on ppaca projected federal 
                expenditures.--The amount specified in this 
                subparagraph for a State for a year is 95 percent of 
                the Secretary's estimate of the total payments that 
                would have been made (assuming the existence of a State 
                established Exchange in the State) under section 36B of 
                the Internal Revenue Code of 1986 and under section 
                1402 of PPACA with respect to all qualified residents 
                in the State in the year (or taxable year ending with 
                such year, if applicable).
            (2) For states that do not provide ppaca medicaid 
        coverage.--
                    (A) In general.--In the case of a State not 
                described in paragraph (1) for a year, subject to 
                paragraphs (3) and (4), the Secretary shall compute an 
                average per capita annual amount for the State for the 
                year equal to--
                            (i) the amount specified in subparagraph 
                        (B) for the State and year, divided by
                            (ii) the average monthly number of deposit 
                        qualifying residents of the State in the year.
                    (B) Amount based on ppaca and medicaid projected 
                federal expenditures.--The amount specified in this 
                subparagraph for a State for a year is equal to the sum 
                of--
                            (i) 95 percent of the Secretary's estimate 
                        of the total payments that would have been made 
                        (assuming the existence of a State-established 
                        Exchange in the State) under section 36B of the 
                        Internal Revenue Code of 1986 and under section 
                        1402 of PPACA with respect to all qualified 
                        residents in the year (or taxable year ending 
                        with such year, if applicable); and
                            (ii) the Secretary's estimate of the total 
                        payments that would have been made to the State 
                        under title XIX of the Social Security Act for 
                        individuals eligible to be covered under 
                        section 1902(a)(10)(A)(i)(VIII) of the Social 
                        Security Act assuming the election of a State 
                        to provide Medicaid coverage under such section 
                        and assuming the applicable Federal medical 
                        assistance percentage were 95 percent with 
                        respect to such individuals.
            (3) Budget neutral adjustment in payments to take into 
        account election of higher deposits to maintain aca subsidy 
        levels.--If a State makes the election described in subsection 
        (a)(3) with respect to providing higher deposit amounts for 
        certain individuals described in such subsection, then the 
        Secretary shall adjust the average per capita annual amount 
        under paragraph (1) or (2), as applicable to the State, by--
                    (A) reducing the amount described in paragraph 
                (1)(B) (or, if applicable, paragraph (2)(B)(i)) by an 
                amount equal to 95 percent of the aggregate increased 
                deposit level attributable to subsection (a)(3); and
                    (B) not counting such an individual as a qualifying 
                resident for purposes of paragraph (1)(A)(ii) (or, if 
                applicable, paragraph (2)(A)(ii)).
            (4) Adjustment for costs of partial deposits for low-income 
        esi individuals.--The Secretary shall adjust the average per 
        capita annual amount under paragraph (1) or (2), as applicable 
        to the State, by--
                    (A) reducing the amount described in paragraph 
                (1)(B) (or, if applicable, paragraph (2)(B)(i)) by an 
                amount equal to 95 percent of the amount of payments 
                under this section that are attributable to individuals 
                described in subsection (a)(4); and
                    (B) not counting any individual described in 
                subsection (a)(4) as a qualifying resident for purposes 
                of paragraph (1)(A)(ii) (or, if applicable, paragraph 
                (2)(A)(ii)).
    (c) Adjustment for Age, Geographic Area, and Income Distribution 
Within State.--
            (1) In general.--The Secretary shall apply such adjustments 
        to the per capita amount computed under subsection (b) as is 
        designed to take into account, in a budget neutral manner and 
        based on the costs estimated under paragraph (2), actuarial 
        differences in health care costs attributable to individuals in 
        different age categories and different geographic locations of 
        primary residences in the State and the reductions based on 
        income under subsection (d). No such adjustment shall be made 
        based on sex.
            (2) Data on average costs of services.--Not later than 
        December 15 before the beginning of each year, the Agency for 
        Healthcare Research and Quality shall estimate the average cost 
        of health care for such year for individuals under 65 years of 
        age and may estimate how such average varies for different 
        populations of individuals under age 65. The adjustments under 
        paragraph (1) for age categories for a year shall be based on 
        such estimates made. Not later than such date, the Secretary 
        shall prescribe tables for purposes of making adjustments based 
        on age under paragraph (1) based on such determination which 
        shall apply for taxable years beginning in the succeeding 
        calendar year.
    (d) Income-Related Phase-Out.--
            (1) In general.--The per capita amount as computed under 
        subsection (b) and adjusted and applied to a deposit qualifying 
        individual under subsection (c) shall be multiplied by a phase-
        out percentage equal to 100 percent reduced by 1 percentage 
        point for each $1,000 (or fraction thereof) by which the 
        taxpayer's modified adjusted gross income for the taxable year 
        exceeds $90,000 (or, in the case of a joint return, $150,000), 
        multiplied, for a taxable year ending in a year beginning after 
        December 31, 2015, by the cost-of-living adjustment for the 
        year as described in section 1(f)(3) of the Internal Revenue 
        Code of 1986, but substituting ``2015'' for ``1992'' in 
        subparagraph (B) of such section.
            (2) Zero per capita amount for married filing separately.--
        The per capita amount under this section shall be zero in the 
        case of a married couple filing separately.

SEC. 104. STATE OPTIONS FOR IMPROVED ACCESS TO HEALTH INSURANCE 
              COVERAGE IN EACH STATE.

    (a) State Options To Improve Access.--
            (1) In general.--Each State may carry out any of the 
        functions described in succeeding subsections in order to 
        improve the access of residents of the State to health 
        insurance coverage.
            (2) Repurposing state exchanges.--A State may use or adapt 
        an Exchange that the State has established under title I of 
        PPACA to carry out the any of such functions.
            (3) Repurposing federal exchange.--The Federal Government 
        shall make available to States current capabilities of the 
        Federal Exchange, including the Federal Data Services Hub and 
        Agent Broker Portal, to the extent requested by a State for 
        activities related to enrollment of citizens of the State into 
        health insurance coverage.
    (b) Transparency Portal.--Each State may establish and operate an 
open and transparent marketplace mechanism whereby qualified residents 
of the State can readily compare, through the use of the Internet, the 
benefits and prices between different health insurance coverage options 
made available to them.
    (c) Enrollment, Subject to Individual Opt-Out.--
            (1) In general.--Subject to paragraph (2), a State may 
        provide for the enrollment of qualified residents of the State 
        who are uninsured in default health insurance coverage offered 
        under section 105(c) and establishing an HSA for such residents 
        who do not have an HSA unless the resident has affirmatively 
        elected not to be so enrolled and not to have an HSA, 
        respectively. Any such enrollment under this paragraph shall be 
        coordinated with the annual open enrollment periods provided 
        under section 105(b).
            (2) Simple process for individuals to opt-out.--As a 
        condition of a State providing for the enrollment function 
        described in paragraph (1), the State must establish an easy-
        to-use and transparent means by which individuals may elect not 
        to be enrolled in default health insurance coverage or to have 
        an HSA established on the individual's behalf, or both.
    (d) Risk Mitigation Mechanisms and Reinsurance and Risk-Corridor 
Programs.--
            (1) In general.--Notwithstanding any other provision of 
        this title or section 223(c)(2) of the Internal Revenue Code of 
        1986, a State may establish--
                    (A) mechanisms for risk mitigation or risk 
                adjustment in order to limit volatility in the premiums 
                based on health experience to class-average premiums; 
                and
                    (B) a reinsurance and risk-corridor program that 
                involves no Federal funds with respect to coverage both 
                in the individual market and in the small group market.
            (2) Basis for risk adjustment.--Mechanisms and programs 
        under paragraph (1) may be based on the health status score of 
        each individual enrolled in health insurance coverage in the 
        individual market and not solely based on the aggregate risk of 
        the risk pool with respect to each plan of health insurance 
        coverage.

SEC. 105. EXPANDED ACCESS AND PATIENT PROTECTIONS.

    (a) In General.--As a condition for the election of the alternative 
option under section 102 in a State, the State must meet the 
requirements of this section.
    (b) Annual and Other Open Enrollment Periods.--
            (1) In general.--The State shall require, in connection 
        with the offering of health insurance coverage in the 
        individual market in the State, that there are uniform annual 
        and other open enrollment periods (such as those for changes in 
        life events, changes in State residency, and involuntary 
        changes in eligibility for coverage under a group health plan) 
        in order to permit qualified residents to enroll in qualified 
        health plan coverage in a manner that promotes continuity of 
        coverage. Such periods shall be consistent with the open 
        enrollment periods established under title I of PPACA, as in 
        effect on the day before the date of the enactment of this Act.
            (2) Initial open enrollment period.--In addition, the State 
        shall establish an initial open enrollment period during which 
        qualified residents may enroll in qualified health plan 
        coverage without the imposition of any underwriting described 
        in subsection (d)(1)(B). Such period shall be a period of not 
        less than 45 days and shall provide for enrollment to become 
        effective on January 1 of the year specified by the State in 
        which such State election first becomes effective.
    (c) Offering of Default Health Insurance Coverage.--
            (1) In general.--The State shall provide for the offering, 
        through one or more contracts with one or more health insurance 
        issuers in the State, of default health insurance coverage (as 
        defined in paragraph (2)) to qualified residents of the State 
        who are otherwise uninsured. Such default coverage shall be 
        made available on a continuous basis during a year. Failure of 
        a qualified resident to enroll in such default coverage or 
        other creditable coverage during a year results in adverse 
        consequences described in subsection (d)(1)(B) to the resident.
            (2) Default health insurance plan defined.--In this title, 
        the term ``default health insurance plan'' means, with respect 
        to a State, health insurance coverage that--
                    (A) is a high deductible health plan (within the 
                meaning of section 223(c)(2) of the Internal Revenue 
                Code of 1986) with prescription drug coverage limited 
                to generic drugs for a limited number of chronic 
                conditions (commonly referred to as tier I pharmacy 
                benefit);
                    (B) meets such requirements as may apply to qualify 
                for the payment of plan premiums from a health savings 
                account under section 223 of such Code (such as age-
                related premiums and limitation on imposition of 
                preexisting condition exclusions);
                    (C) has a provider network for covered benefits 
                that is adequate (as determined consistent with 
                guidelines issued by the Secretary) to ensure access to 
                health benefits under such plan;
                    (D) provides for coverage of childhood 
                immunizations without cost sharing requirements to the 
                extent such immunizations have in effect a 
                recommendation from the Advisory Committee on 
                Immunization Practices of the Centers for Disease 
                Control and Prevention with respect to the individual 
                involved; and
                    (E) meets such other requirements as the State may 
                specify.
    (d) Consequences Respecting Continuous Coverage.--
            (1) Consequences for not maintaining continuous coverage.--
                    (A) Avoidance of consequences by maintaining 
                continuous coverage.--All qualified residents of a 
                State are eligible during the initial open enrollment 
                period provided under subsection (b)(2) to enroll in 
                qualified health plan coverage and, thereafter, to 
                maintain continuous coverage in order to avoid the 
                adverse consequences described in the succeeding 
                provisions of this paragraph.
                    (B) Underwriting permitted.--In the case of a 
                qualified resident of the State who fails to maintain 
                continuous creditable coverage (not including any 
                breaks in coverage of less than 63 days), the State 
                shall--
                            (i) permit health insurance issuers for the 
                        period specified in subparagraph (C) to 
                        medically underwrite (through denial of health 
                        insurance coverage, application of preexisting 
                        condition limitations, differential premiums, 
                        or otherwise) the issuance of health insurance 
                        coverage, other than with respect to the 
                        issuance of default health insurance coverage 
                        under subsection (c); and
                            (ii) require health insurance issuers, 
                        during the subsequent 2-year period in the case 
                        of issuance of health insurance coverage other 
                        than such default health insurance coverage, to 
                        impose a monthly late enrollment penalty in the 
                        amount specified in subparagraph (D)(i) and to 
                        remit the amount of such penalty collected to 
                        the Federal Treasury in accordance with 
                        subparagraph (D)(ii).
                    (C) Period for application of underwriting.--For 
                purposes of subparagraph (B)(i), the period specified 
                in this subparagraph is, with respect to an uninsured 
                individual as of a date, a period (not to exceed 18 
                months) equivalent to number of months in the previous 
                18-month period in which the individual did not have 
                continuous creditable coverage described in 
                subparagraph (B).
                    (D) Monthly late enrollment penalty amount.--
                            (i) In general.--The monthly late 
                        enrollment penalty amount specified in this 
                        clause for a month is equal to the lesser of 10 
                        percent or the product of--
                                    (I) 1 percent of the monthly 
                                premium amount for default health 
                                insurance coverage with respect to the 
                                individual and month; and
                                    (II) the number of months during 
                                the 2-year period (preceding the 18-
                                month period described in subparagraph 
                                (B)(i)) in which the resident failed to 
                                maintain the continuous coverage 
                                described in paragraph (1)(D).
                            (ii) Payment of penalty amount to federal 
                        treasury.--The amount of the monthly late 
                        enrollment penalty collected under this 
                        subparagraph shall be paid to the Treasury of 
                        the United States in a form and manner 
                        specified by the Secretary of the Treasury.
            (2) Changes in enrollment permitted without medical 
        underwriting during annual open enrollment periods for those 
        maintaining continuous coverage.--
                    (A) During second open enrollment period.--In the 
                case of a qualified resident who maintains continuous 
                coverage (not including any breaks in coverage of less 
                than 63 days) during the period after the initial open 
                enrollment period under subsection (b)(2) and through 
                the second annual open enrollment period established by 
                the State consistent with subsection (b)(1), the State 
                shall require health insurance issuers to permit such 
                residents during such second annual open enrollment 
                period to change the qualified health plan coverage in 
                which the individual is enrolled without medical 
                underwriting.
                    (B) During third and subsequent open enrollment 
                periods.--In the case of a qualified resident who 
                maintains continuous coverage for a period of 18 months 
                or longer (not including any breaks in coverage of less 
                than 63 days) as of the initial date of a third or 
                subsequent annual open enrollment period established by 
                the State under subsection (b)(1), the State shall 
                require health insurance issuers to permit such 
                residents during such an open enrollment period to 
                change the qualified health plan coverage in which the 
                individual is enrolled without medical underwriting.

SEC. 106. SUNSETTING CERTAIN ACA PROVISIONS; CONTINUATION OF POLICIES 
              OF COVERING ADULT CHILDREN AND NOT APPLYING LIFETIME OR 
              ANNUAL LIMITS.

    (a) In General.--Subject to subsections (b) and (c), title I of the 
Patient Protection and Affordable Care Act (including the amendments 
made by such title) shall not apply (and the provisions of law amended 
by such title are restored as if such title had not been enacted) in 
the case of any State that does not have in effect the election 
described in section 101(a)(1).
    (b) Continuation of Policies for Extension of Dependent Coverage 
for Adult Children and Prohibition of Lifetime and Annual Coverage 
Limits.--Subsection (a) shall not apply with respect to the following:
            (1) Section 2711 of the Public Health Service Act (relating 
        to no lifetime or annual limits).
            (2) Section 2714 of such Act (relating to extension of 
        dependent coverage).
    (c) Continuation of Policies for Certain States Operating 
Exchanges.--Subsection (a) shall not apply with respect to health 
insurance coverage in a State that has in effect the election described 
in section 101(a)(1).

                          Subtitle B--Medicaid

SEC. 111. APPLICATION OF HEALTH SAVINGS ACCOUNTS IN RELATION TO 
              MEDICAID.

    (a) In General.--Title XIX of the Social Security Act (42 U.S.C. 
1396 et seq.) is amended by adding at the end the following new 
section:

``SEC. 1947. PROVISIONS RELATING TO HEALTH SAVINGS ACCOUNTS.

    ``(a) Disregarding HSA in Determining Assets and Income for 
Medicaid Eligibility Determinations Other Than for Long-Term Care 
Services.--The assets in a health savings account under section 223 of 
the Internal Revenue Code of 1986, and any income from such assets in 
such account, shall be disregarded for purposes of determining 
eligibility and amount of medical assistance under this title, other 
than for purposes of determining eligibility and the amount of medical 
assistance for long-term care services (described in section 
1917(c)(1)(C)(i)).
    ``(b) Notifications of Treasury of Medicaid Eligibility.--In order 
to meet the requirements of this subsection (for purposes of section 
1902(a)(78)), a State shall provide such notice to the Secretary of the 
Treasury, in such form and manner as such Secretary shall specify, as 
may be necessary to identify individuals who are eligible for, and 
receiving, medical assistance under this title in a month in order to 
carry out section 223 of the Internal Revenue Code of 1986.''.
    (b) Implementation of Notification Requirement Through State 
Plan.--Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)) 
is amended by inserting after paragraph (77) the following new 
paragraph:
            ``(78) provide for notice in accordance with section 
        1947(b) to the Secretary of the Treasury of the identity of 
        individuals who are determined eligible for (and receiving) 
        medical assistance under this title;''.
    (c) Effective Date.--The amendments made by this section shall 
apply to eligibility determinations with respect to medical assistance 
for periods beginning on or after January 1, 2016.

                Subtitle C--Provider Price Transparency

SEC. 121. ENSURING ACCESS TO EMERGENCY SERVICES WITHOUT EXCESSIVE 
              CHARGES FOR OUT-OF-NETWORK SERVICES.

    (a) In General.--Section 1867 of the Social Security Act (42 U.S.C. 
1395dd) is amended--
            (1) in subsection (d), by adding at the end the following 
        new paragraph:
            ``(5) Enforcement with respect to excessive charges.--A 
        hospital, physician, or other entity that violates the 
        requirements of subsection (j)(1) with respect to the 
        furnishing of items and services is subject to a civil money 
        penalty of not more than $25,000 for each such violation. The 
        provisions of section 1128A (other than subsections (a) and 
        (b)) shall apply to a civil money penalty under this paragraph 
        in the same manner as such provisions apply with respect to a 
        penalty or proceeding under section 1128A(a).''; and
            (2) by adding at the end the following new subsection:
    ``(j) Protections Against Excessive Out-of-Network Charges for 
Emergency Services.--
            ``(1) In general.--If items or services to screen or treat 
        an emergency medical condition are furnished under this section 
        in a participating hospital with respect to an individual and 
        the individual has not, directly or through a health insurance 
        issuer, group health plan, or other third party, negotiated a 
        payment rate for such items and services, subject to paragraph 
        (2), the charges imposed for such items and services may not be 
        in excess of the following:
                    ``(A) Physicians' and other professional 
                services.--For physicians' services or services of a 
                health care provider to which section 223(e)(9) of the 
                Internal Revenue Code of 1986 applies (and including 
                drugs and biologicals furnished in conjunction with and 
                billed as part of such services), the lesser of--
                            ``(i) the cash price for such services 
                        posted pursuant to such section; or
                            ``(ii) 85 percent of the usual, customary, 
                        and reasonable (UCR) charge for such services, 
                        as determined under rules established by the 
                        department of insurance for the State in which 
                        the services are furnished.
                    ``(B) Hospital services.--For inpatient and 
                outpatient hospital services for which payment rates 
                are established under this title (and including drugs 
                and biologicals furnished in conjunction with and 
                billed as part of such services), the lesser of--
                            ``(i) the cash price for such services 
                        posted pursuant to section 223(e)(9) of the 
                        Internal Revenue Code of 1986; or
                            ``(ii) 110 percent of the payment rate 
                        applicable to such services in the case of an 
                        individual entitled to benefits under part A 
                        and enrolled under part B.
                    ``(C) Drugs and biologicals.--For drugs and other 
                pharmaceuticals furnished to which a previous 
                subparagraph does not apply, the lesser of--
                            ``(i) twice the acquisition cost to the 
                        hospital or other provider for the dose 
                        involved; or
                            ``(ii) the acquisition cost to the hospital 
                        or other provider plus $250.
                The dollar amount in clause (ii) shall be increased 
                from year to year (beginning with the year after the 
                first year in which this subsection applies) by the 
                same percentage as the percentage increase in the 
                consumer price index for all urban consumers (all 
                items; U.S. city average) for the year involved (as 
                determined by the Secretary). Any such dollar amount as 
                so increased that is not a multiple of $5 shall be 
                rounded to the nearest multiple of $5 (or, if a 
                multiple of $2.50, to the next highest multiple of $5).
                    ``(D) Other items and services.--For any other 
                items or services, the lesser of--
                            ``(i) the cash price for such items and 
                        services posted pursuant to section 223(e)(9) 
                        of the Internal Revenue Code of 1986; or
                            ``(ii) 110 percent of the payment basis 
                        that would be applicable to payment for such 
                        items and services under this title in the case 
                        of an individual entitled to benefits under 
                        part A and enrolled under part B.
            ``(2) Special rule for items and services furnished as a 
        bundle.--In the case of items and services for which there is a 
        single price for a group or bundle of such items and services, 
        the maximum charge permitted under paragraph (1) may not exceed 
        the lesser of--
                    ``(A) the price charged for such bundled services; 
                or
                    ``(B) the aggregate of the maximum charges 
                permitted under paragraph (1) with respect to items and 
                services included in such bundle.''.
    (b) Reference to Price Disclosure Provision.--For requirements 
relating to the posting of health care prices on the Internet, see 
section 223(e)(9) of the Internal Revenue Code of 1986, as added by 
section 204(a).
    (c) Effective Date.--The amendments made by this section shall 
apply to charges imposed for items and services furnished on or after 
January 1, 2016.

       TITLE II--REFORM OF TAX PROVISIONS RELATING TO HEALTH CARE

            Subtitle A--Promotion of Health Savings Accounts

SEC. 201. REPEAL OF HIGH DEDUCTIBLE HEALTH PLAN REQUIREMENT.

    (a) In General.--Section 223(a) of the Internal Revenue Code of 
1986 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(b)(1) of such Code is amended by striking 
        ``that the individual is an eligible individual''.
            (2) Section 223(b)(2) of such Code is amended by striking 
        ``under a high deductible health plan'' each place it appears.
            (3) Section 223(b) of such Code is amended by striking 
        paragraph (8).
            (4) Section 223 of such Code is amended by striking 
        subsection (c) and redesignating subsections (d) through (h) as 
        subsections (c) through (g), respectively.
            (5) Section 223(c)(1)(A) of such Code, as redesignated by 
        this Act, is amended by striking ``subsection (f)(5)'' and 
        inserting ``subsection (e)(5)''.
            (6) Section 223(f)(1) of such Code, as redesignated by this 
        Act, is amended--
                    (A) by striking ``subsections (b)(2) and 
                (c)(2)(A)'' and inserting ``subsection (b)(2)'',
                    (B) by striking ``subparagraph (B) thereof--'' and 
                all that follows through the end of subparagraph (B) 
                and inserting ``subparagraph (B) thereof `calendar year 
                1997'.'', and
                    (C) by striking ``amounts under subsections (b)(2) 
                and (c)(2)(A)'' in the second sentence and inserting 
                ``amounts under subsection (b)(2)''.
            (7) Section 26(b)(2)(U) of such Code is amended by striking 
        ``section 223(f)(4)'' and inserting ``section 223(e)(4)''.
            (8) Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(B)(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)''.
            (9) 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)''.
            (10) 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''.
            (11) Section 877A(g)(6) of such Code is amended by striking 
        ``223(f)(4)'' and inserting ``223(e)(4)''.
            (12) Section 4973(g) of such Code is amended--
                    (A) by striking ``section 223(d)'' and inserting 
                ``section 223(c)'',
                    (B) by striking ``223(f)(5)'' in paragraph (1) and 
                inserting ``223(e)(5)'',
                    (C) by striking ``section 223(f)(2)'' in paragraph 
                (2) and inserting ``section 223(e)(2)'', and
                    (D) by striking ``section 223(f)(3)'' in the second 
                sentence and inserting ``section 223(e)(3)''.
            (13) 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)''.
            (14) 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, 2015.

SEC. 202. TREATMENT OF HSA AFTER DEATH OF ACCOUNT BENEFICIARY.

    (a) In General.--Section 223(e)(8) of the Internal Revenue Code of 
1986, as redesignated by section 201(c)(3) of this Act, is amended to 
read as follows:
            ``(8) Treatment after death of account beneficiary.--If an 
        individual acquires an account beneficiary's interest in a 
        health savings account by reason of the death of the account 
        beneficiary, such health savings account shall be treated as if 
        the individual were the account beneficiary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to interests acquired after the date of the enactment of 
this Act.

SEC. 203. PURCHASE OF HEALTH INSURANCE FROM HSA ACCOUNT.

    (a) In General.--Section 223(c)(2) of the Internal Revenue Code of 
1986, as redesignated by section 201(c)(3), is amended--
            (1) in subparagraph (C)--
                    (A) by striking ``or'' at the end of clause (iii),
                    (B) by striking the period at the end of clause 
                (iv) and inserting ``, and'', and
                    (C) by adding at the end the following new clause:
                            ``(v) in the case of health insurance that 
                        meets the requirements of subparagraph (D).''; 
                        and
            (2) by adding at the end the following new subparagraphs:
                    ``(D) Requirements.--The requirements of this 
                subparagraph are as follows:
                            ``(i) Open enrollment without preexisting 
                        condition exclusions.--The health insurance 
                        coverage or group health plan must permit, 
                        during uniform initial and annual open 
                        enrollment periods and for special enrollment 
                        periods (such as the loss of coverage through 
                        the loss of employment) specified in carrying 
                        out section 105(b) of the Patient Freedom Act 
                        of 2015, any individual who has period of 
                        continuous coverage of not less than 18 months 
                        who is otherwise eligible to enroll under such 
                        coverage or plan to be so enrolled without the 
                        imposition of any preexisting condition 
                        exclusion (as defined for purposes of title 
                        XXVII of the Public Health Service Act).
                            ``(ii) Class based premiums for basic 
                        benefits.--
                                    ``(I) In general.--The premium for 
                                such coverage or plan shall be 
                                established based on class-average 
                                status and may vary by age and 
                                geographic area, but may not vary based 
                                upon the health status of the 
                                individual, except that in the case of 
                                an individual without continuous 
                                coverage for a period of 42 months, 
                                such premium may be increased above the 
                                class-average in the manner and for the 
                                time period specified in section 
                                105(d)(1)(A)(ii) of the Patient Freedom 
                                Act of 2015.
                                    ``(II) Establishment of actuarial 
                                tables.--In carrying out subclause (I), 
                                the Secretary shall enter into a 
                                contract with a qualified organization, 
                                such as the Academy of Actuaries, for 
                                the development of actuarial tables to 
                                calculate class-average rates based on 
                                age and geography.
                    ``(E) Continuous coverage.--For purposes of this 
                paragraph, an individual shall be considered to have 
                continuous coverage as of a time if the individual has 
                no continuous period in which the individual is 
                uninsured (as defined in section 100 of the Patient 
                Freedom Act of 2015) for longer than 63 days beginning 
                after the date of the enactment of such Act.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 204. PUBLISHING OF CASH PRICE FOR CARE PAID THROUGH HEALTH SAVINGS 
              ACCOUNTS.

    (a) In General.--Section 223(e) of the Internal Revenue Code of 
1986, as redesignated by section 201(c)(3), is amended by adding at the 
end the following new paragraph:
            ``(9) Cash price transparency required for payments to 
        health care providers.--
                    ``(A) In general.--A payment to a health care 
                provider with respect to the furnishing of health care 
                items and services by such provider shall not be 
                treated as a qualified medical expense unless health 
                care provider provides for continuing disclosure (such 
                as through posting on a publicly accessible website) of 
                the cash price the health care provider charges for the 
                furnishing of such items and services.
                    ``(B) Form of disclosure.--The disclosure of prices 
                under this subsection shall be in a form and manner 
                specified by the Secretary of Health and Human 
                Services, in consultation with the Secretary, and shall 
                be designed--
                            ``(i) to establish a single price for 
                        related items and services in a manner similar 
                        to the manner in which pricing and payment for 
                        such items and services is provided under the 
                        Medicare program under title XVIII of the 
                        Social Security Act, and
                            ``(ii) to make it easy for consumers to 
                        compare the prices for similar items and 
                        services furnished by different providers.
                    ``(C) Failure to furnish services or charge in 
                excess of stated price.--A health care provider shall 
                be treated as not meeting the requirement of 
                subparagraph (A), in the case of items and services for 
                which the provider is disclosing a cash price, if the 
                provider--
                            ``(i) refuses to furnish such items or 
                        services at the price listed, or
                            ``(ii) charges more than the price listed 
                        for the furnishing of the items and 
                        services.''.
    (b) Enforcement.--If the Secretary of Health and Human Services 
determines that a health care provider has not provided for continuing 
disclosure of the cash price of health care provider charges under 
section 223(e)(9) of the Internal Revenue Code of 1986, the Secretary 
may instruct the Secretary of the Treasury that payments made to such 
provider shall be not treated, for purposes of section 223 of the 
Internal Revenue Code of 1986, as an amount used for a qualified 
medical expense for a period of not to exceed 1 year.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

                  Subtitle B--Health Care Tax Credits

SEC. 211. LIMITED APPLICATION OF PPACA HEALTH PREMIUM CREDIT.

    (a) In General.--Section 36B(c)(1) of the Internal Revenue Code of 
1986 is amended by adding at the end the following:
                    ``(E) Special rule for residents of states 
                continuing ppaca implementation.--No credit shall be 
                allowed under this section to any individual who is not 
                a qualified resident (as defined in section 100(14) of 
                the Patient Freedom Act of 2015) of a State that has 
                elected the option under section 101(a)(1) of such Act 
                in relation to the implementation of title I of the 
                Patient Protection and Affordable Care Act.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2015.

SEC. 212. NEW HSA CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36B the following new section:

``SEC. 36C. HSA CREDIT.

    ``(a) In General.--In the case of a qualifying individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for any taxable year, an amount equal to the HSA credit amount of the 
individual for the taxable year.
    ``(b) Qualifying Individual.--For purposes of this section, the 
term `qualifying individual' means, with respect to any month, any 
individual who for such month is a deposit qualifying resident (as 
defined in section 102(b)(2) of the Patient Freedom Act of 2015) of a 
State described in section 101(a)(3) of such Act that elects to have 
section 102(b) of such Act carried out by way of the credit determined 
under this section.
    ``(c) HSA Credit Amount.--For purposes of this section, the term 
`HSA credit amount' means, with respect to any taxable year, the sum of 
the HSA deposit amounts determined under section 103 of the Patient 
Freedom Act of 2015 with respect to the individual for all months 
ending during the taxable year.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Reconciliation of credit and advance credit.--
                    ``(A) Excess advance payments.--If the advance 
                payments to an individual for a taxable year under 
                subsection (e) exceed the credit allowed by this 
                section with respect to such individual for such 
                taxable year, the tax imposed by this chapter for the 
                taxable year shall be increased by the amount of such 
                excess.
                    ``(B) Advance payment shortfall.--If the credit 
                allowed by this section (determined without regard to 
                this subparagraph) with respect to an individual for a 
                taxable year exceeds the advance payments to such 
                individual for such taxable year under subsection (e), 
                the Secretary shall, in lieu of a credit allowed 
                against the tax imposed by this subtitle, make a 
                payment on behalf of such individual to such 
                individual's health savings account in an amount equal 
                to such excess.
            ``(2) Married couples must file joint return.--If the 
        taxpayer is married (within the meaning of section 7703) at the 
        close of the taxable year, the credit shall be allowed under 
        this section only if the taxpayer and the taxpayer's spouse 
        file a joint return for the taxable year.
    ``(e) Advance Payment Program.--
            ``(1) In general.--The Secretary of the Treasury, in 
        consultation with the Secretary of Health and Human Services, 
        shall establish a program--
                    ``(A) to make advance determinations with respect 
                to the eligibility of individuals for the credit 
                allowed under this section, and
                    ``(B) to make advance payments of the credit 
                allowed under this section directly to the health 
                savings account of any such individual so eligible.
            ``(2) Program requirements.--Such program shall be 
        established under rules similar to the rules of section 1412 of 
        the Patient Protection and Affordable Care Act, except that 
        advance determinations and advance payments shall be made on 
        request of the individual with respect to whom the 
        determination is to be made and taking into account the 
        enrollment process (including any opt-out election under such 
        process) established under section 104(c)(1) of the Patient 
        Freedom Act of 2015.''.
    (b) Clerical Amendment.--The table of sections for such subpart is 
amended by inserting after the item relating to section 36B the 
following new item:

``Sec. 36C. HSA credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.
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