I 

114TH CONGRESS 

1ST SESSION H. R. 2300 

To provide for incentives to encourage health insurance coverage, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 13, 2015 

Mr. TOM PRICE of Georgia (for himself, Mr. HENSARLING, Mrs. BLACKBURN, 

Mr. HARRIS, Mr. BENISHEK, Mrs. ELLMERS of North Carolina, Mr. 

BUCSHON, Mr. PITTENGER, Mr. MEADOWS, Mr. DUNCAN of South Carolina, Mr. MCKINLEY, Mr. THOMPSON of Pennsylvania, Mr. FRANKS of 

Arizona, Mr. TIPTON, Mr. WEBSTER of Florida, Mr. WESTMORELAND, 

Mr. RIGELL, Mr. LAMBORN, Mr. HUIZENGA of Michigan, Mr. OLSON, 

Mr. PERRY, Mr. YOHO, Mr. AMODEI, Mr. ROTHFUS, Mr. STEWART, Mr. 

ROUZER, Mr. GUINTA, Mrs. BLACK, Mr. JENKINS of West Virginia, Mr. 

DESJARLAIS, Mrs. HARTZLER, Mr. HECK of Nevada, Mr. MILLER of 

Florida, Mr. MULVANEY, Mr. RIBBLE, Mr. RICE of South Carolina, Mr. 

ROE of Tennessee, Mr. ROSKAM, Mr. WENSTRUP, Mr. WILSON of South 

Carolina, Mr. WOODALL, Mr. YODER, Mr. PEARCE, Mr. HARPER, Mr. 

MCCLINTOCK, Mr. GOWDY, and Mr. GOODLATTE) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education 

and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, 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 provide for incentives to encourage health insurance 

coverage, and for other purposes. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Empowering Patients First Act of 2015’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Repeal of PPACA and health care-related HCERA provisions. 

Sec. 3. No mandate of guaranteed issue or community rating. 

TITLE I—TAX INCENTIVES FOR MAINTAINING HEALTH 

INSURANCE COVERAGE 

Subtitle A—Tax Credit for Health Insurance Coverage 

Sec. 101. Refundable tax credit for health insurance coverage. 

Sec. 102. Election of tax credit instead of alternative government or group plan 

benefits. 

Subtitle B—Health Savings Accounts 

Sec. 111. Refundable tax credit for health savings account contributions. 

Sec. 112. Allowing HSA rollover to child or parent of account holder. 

Sec. 113. Maximum contribution limit to HSA coordinated with retirement savings account limitation. 

Sec. 114. Transfer of required minimum distribution from retirement plan to 

health savings account. 

Sec. 115. Equivalent bankruptcy protections for health savings accounts as retirement funds. 

Sec. 116. Allow both spouses to make catch-up contributions to the same HSA 

account. 

Sec. 117. Provisions relating to Medicare. 

Sec. 118. Individuals eligible for veterans benefits for a service-connected disability. 

Sec. 119. Individuals eligible for Indian Health Service assistance. 

Sec. 120. Individuals eligible for TRICARE coverage. 

Sec. 121. FSA and HRA interaction with HSAs. 

Sec. 122. Special rule for certain medical expenses incurred before establishment of account. 

Sec. 123. Preventive care prescription drug clarification. 

Sec. 124. Administrative error correction before due date of return. 

Sec. 125. Members of health care sharing ministries eligible to establish health 

savings accounts. 

Sec. 126. High deductible health plans renamed HSA qualified plans. 

Sec. 127. Treatment of direct primary care service arrangements. 

Sec. 128. Certain provider fees to be treated as medical care. 


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Sec. 129. Clarification of treatment of capitated primary care payments as 

amounts paid for medical care. 

Subtitle C—Other Provisions 

Sec. 131. Limitation on employer-provided health care coverage. 

Sec. 132. Limitation on abortion funding. 

Sec. 133. No government discrimination against certain health care entities. 

Sec. 134. Equal employer contribution rule to promote choice. 

Sec. 135. Limitations on State restrictions on employer auto-enrollment. 

Sec. 136. Credit for small employers adopting auto-enrollment and defined contribution options. 

TITLE II—HEALTH CARE ACCESS AND AVAILABILITY 

Subtitle A—Health Insurance Pooling Mechanisms for Individuals 

Sec. 201. Federal grants for State insurance expenditures. 

Sec. 202. Pool reform for individual membership expansion. 

Subtitle B—Small Business Health Fairness 

Sec. 211. Short title. 

Sec. 212. Rules governing association health plans. 

Sec. 213. Clarification of treatment of single employer arrangements. 

Sec. 214. Enforcement provisions relating to association health plans. 

Sec. 215. Cooperation between Federal and State authorities. 

Sec. 216. Effective date and transitional and other rules. 

Subtitle C—Health Insurance Reforms 

Sec. 221. Requirements for individual health insurance. 

TITLE III—INTERSTATE MARKET FOR HEALTH INSURANCE 

Sec. 301. Cooperative governing of individual health insurance coverage. 

TITLE IV—LAWSUIT ABUSE REFORMS 

Sec. 401. Change in burden of proof based on compliance with clinical practice 

guidelines. 

Sec. 402. State grants to create expert panels and administrative health care 

tribunals. 

Sec. 403. Payment of damages and recovery of costs in health care lawsuits. 

Sec. 404. Definitions. 

Sec. 405. Effect on other laws. 

Sec. 406. Applicability; effective date. 

TITLE V—WELLNESS AND PREVENTION 

Sec. 501. Providing financial incentives for treatment compliance. 

TITLE VI—TRANSPARENCY AND INSURANCE REFORM MEASURES 

Sec. 601. Receipt and response to requests for claim information. 

TITLE VII—QUALITY 


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Sec. 701. Prohibition on certain uses of data obtained from comparative effectiveness research or from patient-centered outcomes research; 

accounting for personalized medicine and differences in patient 

treatment response. 

Sec. 702. Establishment of performance-based quality measures. 

TITLE VIII—STATE TRANSPARENCY PLAN PORTAL 

Sec. 801. Providing information on health coverage options and health care 

providers. 

TITLE IX—PATIENT FREEDOM OF CHOICE 

Sec. 901. Guaranteeing freedom of choice and contracting for patients under 

Medicare. 

Sec. 902. Preemption of State laws limiting charges for eligible professional 

services. 

Sec. 903. Health care provider licensure cannot be conditioned on participation 

in a health plan. 

Sec. 904. Bad debt deduction for doctors to partially offset the cost of providing uncompensated care required to be provided under 

amendments made by the Emergency Medical Treatment and 

Labor Act. 

Sec. 905. Right of contract with health care providers. 

TITLE X—QUALITY HEALTH CARE COALITION 

Sec. 1001. Quality Health Care Coalition. 

1 SEC. 2. REPEAL OF PPACA AND HEALTH CARE-RELATED 

2 HCERA PROVISIONS. 

3 (a) PPACA.—Effective as of the enactment of the 

4 Patient Protection and Affordable Care Act (Public Law 

5 111–148), such Act is repealed, and the provisions of law 

6 amended or repealed by such Act are restored or revived 

7 as if such Act had not been enacted. 

8 (b) HEALTH CARE-RELATED PROVISIONS IN THE

9 HEALTH CARE AND EDUCATION RECONCILIATION ACT OF

10 2010.—Effective as of the enactment of the Health Care 

11 and Education Reconciliation Act of 2010 (Public Law 

12 111–152), title I and subtitle B of title II of such Act 

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1 pealed by such title or subtitle, respectively, are restored 

2 or revived as if such title and subtitle had not been en3 acted. 

4 SEC. 3. NO MANDATE OF GUARANTEED ISSUE OR COMMU5 NITY RATING. 

6 Nothing in this Act shall be construed to provide a 

7 mandate for guaranteed issue or community rating in the 

8 private insurance market. 

9 TITLE I—TAX INCENTIVES FOR 

10 MAINTAINING HEALTH IN11 SURANCE COVERAGE 

12 Subtitle A—Tax Credit for Health 

13 Insurance Coverage 

14 SEC. 101. REFUNDABLE TAX CREDIT FOR HEALTH INSUR15 ANCE COVERAGE. 

16 (a) IN GENERAL.—Subpart C of part IV of sub17 chapter A of chapter 1 of the Internal Revenue Code of 

18 1986, as amended by section 2, is amended by inserting 

19 after section 36A the following new section: 

20 ‘‘SEC. 36B. HEALTH INSURANCE COVERAGE. 

21 ‘‘(a) IN GENERAL.—In the case of an individual, 

22 there shall be allowed as a credit against the tax imposed 

23 by subtitle A the aggregate monthly credit amounts deter24 mined under subsection (b) with respect to the taxpayer 


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1 and the taxpayer’s qualifying family members for eligible 

2 coverage months beginning during the taxable year. 

3 ‘‘(b) MONTHLY CREDIT AMOUNTS.— 

4 ‘‘(1) IN GENERAL.—The monthly credit amount 

5 with respect to any individual for any eligible coverage month is 1 6 ⁄12 of— 

7 ‘‘(A) $900 in the case of an individual who 

8 has not attained age 18 as of the beginning of 

9 such month, 

10 ‘‘(B) $1,200 in the case of an individual 

11 who has so attained age 18 but who has not so 

12 attained age 35, 

13 ‘‘(C) $2,100 in the case of an individual 

14 who has so attained age 35, but who has not 

15 so attained age 50, and 

16 ‘‘(D) $3,000 in the case of an individual 

17 who has so attained age 50. 

18 ‘‘(2) INFLATION ADJUSTMENT.—In the case of 

19 any taxable year beginning in a calendar year after 

20 2016, each dollar amount contained in paragraph 

21 (1) shall be increased by an amount equal to— 

22 ‘‘(A) such dollar amount, multiplied by 

23 ‘‘(B) the cost-of-living adjustment deter24 mined under section 1(f)(3) for the calendar 

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1 mined by substituting ‘calendar year 2015’ for 

2 ‘calendar year 1992’ in subparagraph (B) 

3 thereof. 

4 Any increase determined under the preceding sen5 tence shall be rounded to the nearest multiple of 

6 $50. 

7 ‘‘(c) ELIGIBLE COVERAGE MONTH.—For purposes of 

8 this section, the term ‘eligible coverage month’ means, 

9 with respect to any individual, any month if, as of the first 

10 day of such month, the individual— 

11 ‘‘(1) is covered by qualified health insurance, 

12 ‘‘(2) does not have other specified coverage, and 

13 ‘‘(3) is not imprisoned under Federal, State, or 

14 local authority. 

15 ‘‘(d) QUALIFYING FAMILY MEMBER.—For purposes 

16 of this section, the term ‘qualifying family member’ 

17 means— 

18 ‘‘(1) in the case of a joint return, the taxpayer’s 

19 spouse, and 

20 ‘‘(2) any dependent of the taxpayer. 

21 ‘‘(e) QUALIFIED HEALTH INSURANCE.—For pur22 poses of this section, the term ‘qualified health insurance’ 

23 means health insurance coverage (other than excepted 

24 benefits as defined in section 9832(c)) which constitutes 

25 medical care. 


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1 ‘‘(f) OTHER SPECIFIED COVERAGE.—For purposes of 

2 this section, an individual has other specified coverage for 

3 any month if, as of the first day of such month— 

4 ‘‘(1) COVERAGE UNDER MEDICARE, MEDICAID, 

5 OR SCHIP.—Such individual— 

6 ‘‘(A) is entitled to benefits under part A of 

7 title XVIII of the Social Security Act or is en8 rolled under part B of such title, or 

9 ‘‘(B) is enrolled in the program under title 

10 XIX or XXI of such Act (other than under sec11 tion 1928 of such Act). 

12 ‘‘(2) CERTAIN OTHER COVERAGE.—Such indi13 vidual— 

14 ‘‘(A) is enrolled in a health benefits plan 

15 under chapter 89 of title 5, United States Code, 

16 ‘‘(B) is entitled to receive benefits under 

17 chapter 55 of title 10, United States Code, 

18 ‘‘(C) is entitled to receive benefits under 

19 chapter 17 of title 38, United States Code, 

20 ‘‘(D) is enrolled in a group health plan 

21 (within the meaning of section 5000(b)(1)) 

22 which is subsidized by the employer, or 

23 ‘‘(E) is a member of a health care sharing 

24 ministry. 


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1 ‘‘(3) HEALTH CARE SHARING MINISTRY.—For 

2 purposes of this subsection, the term ‘health care 

3 sharing ministry’ means an organization— 

4 ‘‘(A) which is described in section 

5 501(c)(3) and is exempt from taxation under 

6 section 501(a), 

7 ‘‘(B) members of which share a common 

8 set of ethical or religious beliefs and share med9 ical expenses among members in accordance 

10 with those beliefs and without regard to the 

11 State in which a member resides or is em12 ployed, 

13 ‘‘(C) members of which retain membership 

14 even after they develop a medical condition, 

15 ‘‘(D) which (or a predecessor of which) has 

16 been in existence at all times since December 

17 31, 1999, and medical expenses of its members 

18 have been shared continuously and without 

19 interruption since at least December 31, 1999, 

20 and 

21 ‘‘(E) which conducts an annual audit 

22 which is performed by an independent certified 

23 public accounting firm in accordance with gen24 erally accepted accounting principles and which 

25 is made available to the public upon request. 


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1 ‘‘(g) SPECIAL RULES.— 

2 ‘‘(1) CREDIT IN EXCESS OF PREMIUMS ONLY

3 PAYABLE TO A HEALTH SAVINGS ACCOUNT.— 

4 ‘‘(A) IN GENERAL.—If the credit allowed 

5 under subsection (a) (determined without re6 gard to clause (ii)) for any taxable year exceeds 

7 the amount of premiums paid by the taxpayer 

8 for coverage of the taxpayer and the taxpayer’s 

9 qualifying family members under qualified 

10 health insurance for eligible coverage months 

11 beginning in the taxable year— 

12 ‘‘(i) at the request of the taxpayer, 

13 the Secretary shall pay the amount of such 

14 excess to one or more health savings ac15 counts of the taxpayer or of any qualifying 

16 family member of the taxpayer, and 

17 ‘‘(ii) the credit allowed under sub18 section (a) for such taxable year shall not 

19 exceed the amount of such premiums. 

20 ‘‘(B) MEDICAL AND HEALTH SAVINGS AC21 COUNTS.—Amounts distributed from an Archer 

22 MSA (as defined in section 220(d)) or from a 

23 health savings account (as defined in section 

24 223(d)) shall not be taken into account as pre25 miums paid under subparagraph (A). 


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1 ‘‘(C) INSURANCE WHICH COVERS OTHER

2 INDIVIDUALS.—For purposes of this paragraph, 

3 rules similar to the rules of section 213(d)(6) 

4 shall apply with respect to any contract for 

5 qualified health insurance under which amounts 

6 are payable for coverage of an individual other 

7 than the taxpayer and qualifying family mem8 bers. 

9 ‘‘(D) CONTRIBUTIONS TREATED AS ROLL10 OVERS, ETC.— 

11 ‘‘(i) IN GENERAL.—Any amount paid 

12 the Secretary to a health savings account 

13 under this paragraph shall be treated for 

14 purposes of this title in the same manner 

15 as a rollover contribution described in sec16 tion 223(f)(5). 

17 ‘‘(ii) COORDINATION WITH LIMITA18 TION ON ROLLOVERS.—Any amount de19 scribed in clause (i) shall not be taken into 

20 account in applying section 223(f)(5)(B) 

21 with respect to any other amount and the 

22 limitation of section 223(f)(5)(B) shall not 

23 apply with respect to the application of 

24 clause (i). 


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1 ‘‘(iii) ESTABLISHMENT OF HSAS.— 

2 Nothing in any provision of law shall be 

3 construed— 

4 ‘‘(I) to prevent an individual 

5 from establishing a health savings ac6 count (as defined in section 223(d)) 

7 merely because such individual is not 

8 an eligible individual (as defined in 

9 section 223(c)), or 

10 ‘‘(II) to prevent such an account 

11 from being treated as a health savings 

12 account merely because all or a sub13 stantial portion of the contributions to 

14 such account are described in this 

15 paragraph. 

16 ‘‘(2) COORDINATION WITH ADVANCE PAYMENTS

17 OF CREDIT.—With respect to any taxable year— 

18 ‘‘(A) the amount which would (but for this 

19 subsection) be allowed as a credit to the tax20 payer under subsection (a) shall be reduced 

21 (but not below zero) by the aggregate amount 

22 paid on behalf of such taxpayer under section 

23 7529 for months beginning in such taxable 

24 year, and 


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1 ‘‘(B) the tax imposed by section 1 for such 

2 taxable year shall be increased by the excess (if 

3 any) of— 

4 ‘‘(i) the aggregate amount paid on be5 half of such taxpayer under section 7529 

6 for months beginning in such taxable year, 

7 over 

8 ‘‘(ii) the amount which would (but for 

9 this subsection) be allowed as a credit to 

10 the taxpayer under subsection (a). 

11 ‘‘(3) COORDINATION WITH OTHER PROVI12 SIONS.—For purposes of any deduction allowed 

13 under section 162(l), 213, or 224, and any credit al14 lowed under section 35, any health insurance pre15 miums which would (but for this paragraph) be 

16 taken into account shall be reduced (but not below 

17 zero) by the amount of the credit allowed under this 

18 section (determined without regard to paragraphs 

19 (1) and (2) of this subsection). 

20 ‘‘(4) DENIAL OF CREDIT TO DEPENDENTS AND

21 NONPERMANENT RESIDENT ALIEN INDIVIDUALS.— 

22 No credit shall be allowed under this section to any 

23 individual who is— 


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1 ‘‘(A) not a citizen or lawful permanent 

2 resident of the United States for the calendar 

3 year in which the taxable year begins, or 

4 ‘‘(B) a dependent with respect to another 

5 taxpayer for a taxable year beginning in the 

6 calendar year in which such individual’s taxable 

7 year begins. 

8 ‘‘(5) REGULATIONS.—The Secretary may pre9 scribe such regulations and other guidance as may 

10 be necessary or appropriate to carry out this section, 

11 section 6050W, and section 7529.’’. 

12 (b) ADVANCE PAYMENT OF CREDIT.— 

13 (1) IN GENERAL.—Chapter 77 of the Internal 

14 Revenue Code of 1986 (relating to miscellaneous 

15 provisions) is amended by adding at the end the fol16 lowing: 

17 ‘‘SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR HEALTH 

18 INSURANCE COVERAGE. 

19 ‘‘(a) GENERAL RULE.—Not later than January 1, 

20 2016, the Secretary shall establish a program for making 

21 payments to providers of qualified health insurance (as de22 fined in section 36B(e)) on behalf of taxpayers eligible for 

23 the credit under section 36B. 

24 ‘‘(b) LIMITATION.—The aggregate payments made 

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1 mined as of any time during any calendar year, shall not 

2 exceed the monthly credit amounts determined with re3 spect to such taxpayer under section 36B for months dur4 ing such calendar year which have ended as of such time. 

5 ‘‘(c) APPLICATION OF RULE THAT CREDITS IN EX6 CESS OF PREMIUMS ONLY PAYABLE TO A HEALTH SAV7 INGS ACCOUNT.—Under rules similar to the rules of sec8 tion 36B(g)(1), any amount otherwise payable on behalf 

9 of the taxpayer under subsection (a) with respect to any 

10 eligible coverage month which is in excess of the amount 

11 of premiums paid by the taxpayer for coverage of the tax12 payer and the taxpayer’s qualifying family members under 

13 qualified health insurance for such month shall be payable 

14 only to one or more health savings accounts of the tax15 payer or of any qualifying family member of the taxpayer. 

16 ‘‘(d) CERTIFICATION PROCESS AND PROOF OF COV17 ERAGE.—The Secretary shall establish a process under 

18 which individuals are certified as eligible for payment 

19 under this section. Such process shall include an initial 

20 application by the taxpayer to determine eligibility and 

21 thereafter continued eligibility shall be determined, to the 

22 maximum extent feasible, by the Secretary on the basis 

23 of information provided under section 6050X. 

24 ‘‘(e) DEFINITIONS.—For purposes of this section, 

25 terms used in this section which are also used in section 


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1 36B shall have the same meaning as when used in section 

2 36B.’’. 

3 (2) INFORMATION REPORTING.— 

4 (A) IN GENERAL.—Subpart B of part III 

5 of subchapter A of chapter 61 of such Code (re6 lating to information concerning transactions 

7 with other persons) is amended by adding at 

8 the end the following new section: 

9 ‘‘SEC. 6050X. RETURNS RELATING TO CREDIT FOR HEALTH 

10 INSURANCE COVERAGE. 

11 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

12 who provides qualified health insurance for any month of 

13 any calendar year with respect to any individual shall, at 

14 such time as the Secretary may prescribe, make the return 

15 described in subsection (b) with respect to each such indi16 vidual. With respect to any individual with respect to 

17 whom payments under section 7529 are made by the Sec18 retary, the Secretary may require that reporting under 

19 subsection (b) be made on a monthly basis. 

20 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

21 is described in this subsection if such return— 

22 ‘‘(1) is in such form as the Secretary may pre23 scribe, and 

24 ‘‘(2) contains, with respect to each policy of 

25 qualified health insurance— 


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1 ‘‘(A) the name, address, and TIN of each 

2 individual covered under such policy, 

3 ‘‘(B) the premiums paid with respect to 

4 such policy, and 

5 ‘‘(C) such other information as the Sec6 retary may prescribe. 

7 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID8 UALS WITH RESPECT TO WHOM INFORMATION IS RE9 QUIRED.—Every person required to make a return under 

10 subsection (a) shall furnish to each individual whose name 

11 is required to be set forth in such return a written state12 ment showing— 

13 ‘‘(1) the name and address of the person re14 quired to make such return and the phone number 

15 of the information contact for such person, and 

16 ‘‘(2) the information required to be shown on 

17 the return with respect to such individual. 

18 The written statement required under the preceding sen19 tence shall be furnished on or before January 31 of the 

20 year following the calendar year to which such statement 

21 relates. 

22 ‘‘(d) DEFINITIONS.—For purposes of this section, 

23 terms used in this section which are also used in section 

24 36B shall have the same meaning as when used in section 

25 36B.’’. 


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1 (B) ASSESSABLE PENALTIES.— 

2 (i) Subparagraph (B) of section 

3 6724(d)(1) of such Code, as amended by 

4 section 2, is amended by striking ‘‘or’’ at 

5 the end of clause (xxii), by striking ‘‘and’’ 

6 at the end of clause (xxiii) and inserting 

7 ‘‘or’’, and by inserting after clause (xxiii) 

8 the following new clause: 

9 ‘‘(xxiv) section 6050X (relating to re10 turns relating to credit for health insur11 ance coverage), and’’. 

12 (ii) Paragraph (2) of section 6724(d) 

13 of such Code, as amended by section 2, is 

14 amended by striking ‘‘or’’ at the end of 

15 subparagraph (EE), by striking the period 

16 at the end of subparagraph (FF) and in17 serting ‘‘, or’’, and by adding after sub18 paragraph (FF) the following new sub19 paragraph: 

20 ‘‘(GG) section 6050X (relating to returns 

21 relating to credit for health insurance cov22 erage).’’. 

23 (3) DISCLOSURE OF RETURN INFORMATION

24 FOR PURPOSES OF ADVANCE PAYMENT OF CREDIT


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1 AS PREMIUMS FOR QUALIFIED HEALTH INSUR2 ANCE.— 

3 (A) IN GENERAL.—Subsection (l) of sec4 tion 6103 of such Code, as amended by section 

5 2, is amended by adding at the end the fol6 lowing new paragraph: 

7 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

8 RELATED TO PAYMENTS OF THE HEALTH INSUR9 ANCE COVERAGE CREDIT.—The Secretary may, on 

10 behalf of taxpayers eligible for the credit under sec11 tion 36B, disclose to a provider of qualified health 

12 insurance (as defined in section 36(e)) or a trustee 

13 of a health savings account (and persons acting on 

14 behalf of such provider or such trustee), return in15 formation with respect to any such taxpayer only to 

16 the extent necessary (as prescribed by regulations 

17 issued by the Secretary) to carry out sections 

18 36B(g)(1) (relating to credit in excess of premiums 

19 only payable to a health savings account) and 7529 

20 (relating to advance payment of credit for health in21 surance coverage).’’. 

22 (B) CONFIDENTIALITY OF INFORMA23 TION.—Paragraph (3) of section 6103(a) of 

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1 ed by striking ‘‘or (20)’’ and inserting ‘‘(20), or 

2 (21)’’. 

3 (C) UNAUTHORIZED DISCLOSURE.—Para4 graph (2) of section 7213(a) of such Code, as 

5 amended by section 2, is amended by striking 

6 ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 

7 (4) EFFECTIVE DATE.—The amendments made 

8 by this section shall take effect on the date of the 

9 enactment of this Act. 

10 (c) CONFORMING AMENDMENTS.— 

11 (1) Paragraph (2) of section 1324(b) of title 

12 31, United States Code, as amended by section 2, is 

13 amended by inserting ‘‘36B,’’ after ‘‘36A,’’. 

14 (2) The table of sections for subpart C of part 

15 IV of subchapter A of chapter 1 of the Internal Rev16 enue Code of 1986, as amended by section 2, is 

17 amended by inserting after the item relating to sec18 tion 36A the following new item: 

‘‘Sec. 36B. Health insurance coverage.’’. 

19 (3) The table of sections for subpart B of part 

20 III of subchapter A of chapter 61 of such Code is 

21 amended by adding at the end the following new 

22 item: 

‘‘Sec. 6050X. Returns relating to credit for health insurance coverage.’’. 


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1 (4) The table of sections for chapter 77 of such 

2 Code is amended by adding at the end the following 

3 new item: 

‘‘Sec. 7529. Advance payment of credit for health insurance coverage.’’. 

4 (d) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to taxable years beginning after 

6 December 31, 2015. 

7 SEC. 102. ELECTION OF TAX CREDIT INSTEAD OF ALTER8 NATIVE GOVERNMENT OR GROUP PLAN BEN9 EFITS. 

10 (a) IN GENERAL.—Notwithstanding any other provi11 sion of law, an individual who is otherwise eligible for ben12 efits under a health program (as defined in subsection (c)) 

13 may elect, in a form and manner specified by the Sec14 retary of Health and Human Services in consultation with 

15 the Secretary of the Treasury, to receive a tax credit de16 scribed in section 36B of the Internal Revenue Code of 

17 1986 (which may be used for the purpose of health insur18 ance coverage) in lieu of receiving any benefits under such 

19 program. 

20 (b) EFFECTIVE DATE.—An election under subsection 

21 (a) may first be made for calendar year 2016 and any 

22 such election shall be effective for such period (not less 

23 than one calendar year) as the Secretary of Health and 

24 Human Services shall specify, in consultation with the 

25 Secretary of the Treasury. 


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1 (c) HEALTH PROGRAM DEFINED.—For purposes of 

2 this section, the term ‘‘health program’’ means any of the 

3 following: 

4 (1) MEDICARE.—The Medicare program under 

5 part A of title XVIII of the Social Security Act. 

6 (2) MEDICAID.—The Medicaid program under 

7 title XIX of such Act (including such a program op8 erating under a Statewide waiver under section 1115 

9 of such Act). 

10 (3) SCHIP.—The State children’s health insur11 ance program under title XXI of such Act. 

12 (4) TRICARE.—The TRICARE program 

13 under chapter 55 of title 10, United States Code. 

14 (5) VETERANS BENEFITS.—Coverage for bene15 fits under chapter 17 of title 38, United States 

16 Code. 

17 (6) FEHBP.—Coverage under chapter 89 of 

18 title 5, United States Code. 

19 (7) SUBSIDIZED GROUP HEALTH PLANS.—Cov20 erage under a group health plan (within the meaning 

21 of section 5000(b)(1)) which is subsidized by the 

22 employer. 

23 (d) OTHER SOCIAL SECURITY BENEFITS NOT

24 WAIVED.—An election to waive the benefits described in 


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1 subsection (c)(1) shall not result in the waiver of any other 

2 benefits under the Social Security Act. 

3 Subtitle B—Health Savings 

4 Accounts 

5 SEC. 111. REFUNDABLE TAX CREDIT FOR HEALTH SAVINGS 

6 ACCOUNT CONTRIBUTIONS. 

7 (a) IN GENERAL.—Subpart C of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986, as amended by the preceding provisions of this Act, 

10 is amended by inserting after section 36B the following 

11 new section: 

12 ‘‘SEC. 36C. HEALTH SAVINGS ACCOUNT CONTRIBUTIONS. 

13 ‘‘(a) IN GENERAL.—In the case of an individual who 

14 is allowed a deduction under section 223(a) for any tax15 able year, there shall be allowed as a credit against the 

16 tax imposed by subtitle A for such taxable year, the lesser 

17 of— 

18 ‘‘(1) the amount so allowed as a deduction, or 

19 ‘‘(2) $1,000. 

20 ‘‘(b) LIFETIME LIMITATION.—The credit allowed 

21 under subsection (a) with respect to any individual shall 

22 not exceed the excess (if any) of $1,000 over the aggregate 

23 credits allowed with respect to such individual under sub24 section (a) for all prior taxable years.’’. 

25 (b) CONFORMING AMENDMENTS.— 


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1 (1) Paragraph (2) of section 1324(b) of title 

2 31, United States Code, as amended by the pre3 ceding provisions of this Act, is amended by insert4 ing ‘‘36B,’’ after ‘‘36A,’’. 

5 (2) The table of sections for subpart C of part 

6 IV of subchapter A of chapter 1 of the Internal Rev7 enue Code of 1986, as amended by the preceding 

8 provisions of this Act, is amended by inserting after 

9 the item relating to section 36A the following new 

10 item: 

‘‘Sec. 36B. Health insurance coverage.’’. 

11 (c) CONFORMING AMENDMENTS.— 

12 (1) Paragraph (2) of section 1324(b) of title 

13 31, United States Code, as amended by the pre14 ceding provisions of this Act, is amended by insert15 ing ‘‘36C,’’ after ‘‘36B,’’. 

16 (2) The table of sections for subpart C of part 

17 IV of subchapter A of chapter 1 of the Internal Rev18 enue Code of 1986, as amended by the preceding 

19 provisions of this Act, is amended by inserting after 

20 the item relating to section 36B the following new 

21 item: 

‘‘Sec. 36C. Health savings account contributions.’’. 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to taxable years beginning after 

24 the date of the enactment of this Act. 


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1 SEC. 112. ALLOWING HSA ROLLOVER TO CHILD OR PARENT 

2 OF ACCOUNT HOLDER. 

3 (a) IN GENERAL.—Section 223(f)(8)(A) of the Inter4 nal Revenue Code of 1986 is amended— 

5 (1) by inserting ‘‘child, parent, or grandparent’’ 

6 after ‘‘surviving spouse’’, 

7 (2) by inserting ‘‘child, parent, or grandparent, 

8 as the case may be,’’ after ‘‘the spouse’’, 

9 (3) by inserting ‘‘, CHILD, PARENT, OR GRAND10 PARENT’’ after ‘‘SPOUSE’’ in the heading thereof, 

11 and 

12 (4) by adding at the end the following: ‘‘In the 

13 case of a child who acquires such beneficiary’s inter14 est and with respect to whom a deduction under sec15 tion 151 is allowable to another taxpayer for a tax16 able year beginning in the calendar year in which 

17 such individual’s taxable year begins, such health 

18 savings account shall be treated as a child health 

19 savings account of the child.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 the date of the enactment of this Act. 


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1 SEC. 113. MAXIMUM CONTRIBUTION LIMIT TO HSA COORDI2 NATED WITH RETIREMENT SAVINGS AC3 COUNT LIMITATION. 

4 (a) SELF-ONLY COVERAGE.—Section 223(b)(2)(A) 

5 of the Internal Revenue Code of 1986 is amended by strik6 ing ‘‘$2,250’’ and inserting ‘‘the amount in effect under 

7 section 219(b)(5)(A)’’. 

8 (b) FAMILY COVERAGE.—Section 223(b)(2)(B) of 

9 such Code is amended by striking ‘‘$4,500’’ and inserting 

10 ‘‘twice the amount in effect under subparagraph (A)’’. 

11 (c) CONFORMING AMENDMENTS.—Section 223(g)(1) 

12 of such Code is amended— 

13 (1) in the matter preceding subparagraph (A), 

14 by striking ‘‘subsections (b)(2) and (c)(2)(A)’’ and 

15 inserting ‘‘subsection (c)(2)(A)’’, 

16 (2) in subparagraph (B), by striking ‘‘by sub17 stituting’’ and all that follows through the end of 

18 clause (ii) and inserting ‘‘by substituting ‘calendar 

19 year 2003’ for ‘calendar year 1992’ in subparagraph 

20 (B) thereof.’’, and 

21 (3) in the matter following subparagraph (B), 

22 by striking ‘‘subsections (b)(2) and (c)(2)(A)’’ and 

23 inserting ‘‘subsection (c)(2)(A)’’. 

24 (d) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply to taxable years beginning after 

26 the date of the enactment of this Act. 


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1 SEC. 114. TRANSFER OF REQUIRED MINIMUM DISTRIBU2 TION FROM RETIREMENT PLAN TO HEALTH 

3 SAVINGS ACCOUNT. 

4 (a) TRANSFER FROM RETIREMENT PLAN.— 

5 (1) INDIVIDUAL RETIREMENT ACCOUNTS.—Sec6 tion 408(d) of the Internal Revenue Code of 1986 

7 is amended by adding at the end the following new 

8 paragraph: 

9 ‘‘(10) REQUIRED MINIMUM DISTRIBUTION

10 TRANSFERRED TO HEALTH SAVINGS ACCOUNT.— 

11 ‘‘(A) IN GENERAL.—In the case of an individual who has attained the age of 701 12 ⁄2 and 

13 who elects the application of this paragraph for 

14 a taxable year, gross income of the individual 

15 for the taxable year does not include a qualified 

16 HSA transfer to the extent such transfer is oth17 erwise includible in gross income. 

18 ‘‘(B) QUALIFIED HSA TRANSFER.—For 

19 purposes of this paragraph, the term ‘qualified 

20 HSA transfer’ means any distribution from an 

21 individual retirement plan— 

22 ‘‘(i) to a health savings account of the 

23 individual in a direct trustee-to-trustee 

24 transfer, 

25 ‘‘(ii) to the extent such distribution 

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1 tribution determined under section 

2 401(a)(9) for the distribution calendar 

3 year ending during the taxable year. 

4 ‘‘(C) APPLICATION OF SECTION 72.—Not5 withstanding section 72, in determining the ex6 tent to which an amount is treated as otherwise 

7 includible in gross for purposes of subparagraph 

8 (A), the aggregate amount distributed from an 

9 individual retirement plan shall be treated as 

10 includible in gross income to the extent that 

11 such amount does not exceed the aggregate 

12 amount which would have been so includible if 

13 all amounts from all individual retirement plans 

14 were distributed. Proper adjustments shall be 

15 made in applying section 72 to other distribu16 tions in such taxable year and subsequent tax17 able years. 

18 ‘‘(D) COORDINATION.—An election may 

19 not be made under subparagraph (A) for a tax20 able year for which an election is in effect 

21 under paragraph (9).’’. 

22 (2) OTHER RETIREMENT PLANS.—Section 402 

23 of such Code is amended by adding at the end the 

24 following new subsection: 


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1 ‘‘(m) REQUIRED MINIMUM DISTRIBUTION TRANS2 FERRED TO HEALTH SAVINGS ACCOUNT.— 

3 ‘‘(1) IN GENERAL.—In the case of an individual 

who has attained the age of 701 4 ⁄2 and who elects the 

5 application of this subsection for a taxable year, 

6 gross income of the individual for the taxable year 

7 does not include a qualified HSA transfer to the ex8 tent such transfer is otherwise includible in gross in9 come. 

10 ‘‘(2) QUALIFIED HSA TRANSFER.—For pur11 poses of this subsection, the term ‘qualified HSA 

12 transfer’ means any distribution from a retirement 

13 plan— 

14 ‘‘(A) to a health savings account of the in15 dividual in a direct trustee-to-trustee transfer, 

16 ‘‘(B) to the extent such distribution does 

17 not exceed the required minimum distribution 

18 determined under section 401(a)(9) for the dis19 tribution calendar year ending during the tax20 able year. 

21 ‘‘(3) APPLICATION OF SECTION 72.—Notwith22 standing section 72, in determining the extent to 

23 which an amount is treated as otherwise includible 

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1 ment plan shall be treated as includible in gross in2 come to the extent that such amount does not exceed 

3 the aggregate amount which would have been so in4 cludible if all amounts from all individual retirement 

5 plans were distributed. Proper adjustments shall be 

6 made in applying section 72 to other distributions in 

7 such taxable year and subsequent taxable years. 

8 ‘‘(4) ELIGIBLE RETIREMENT PLAN.—For pur9 poses of this subsection, the term ‘eligible retirement 

10 plan’ has the meaning given such term by subsection 

11 (c)(8)(B) (determined without regard to clauses (i) 

12 and (ii) thereof).’’. 

13 (b) TRANSFER TO HEALTH SAVINGS ACCOUNT.— 

14 (1) IN GENERAL.—Section 223(d)(1)(A) of 

15 such Code is amended by striking ‘‘or’’ at the end 

16 of clause (i), by striking the period at the end of 

17 clause (ii)(II) and inserting ‘‘, or’’, and by adding at 

18 the end the following new clause: 

19 ‘‘(iii) unless it is in a qualified HSA 

20 transfer described in section 408(d)(10) or 

21 402(m).’’. 

22 (2) EXCISE TAX INAPPLICABLE TO QUALIFIED

23 HSA TRANSFER.—Section 4973(g)(1) of such Code 

24 is amended by inserting ‘‘or in a qualified HSA 


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1 transfer described in section 408(d)(10) or 402(m)’’ 

2 after ‘‘or 223(f)(5)’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to distributions made after the 

5 date of the enactment of this Act. 

6 SEC. 115. EQUIVALENT BANKRUPTCY PROTECTIONS FOR 

7 HEALTH SAVINGS ACCOUNTS AS RETIRE8 MENT FUNDS. 

9 (a) IN GENERAL.—Section 522 of title 11, United 

10 States Code, is amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(r) TREATMENT OF HEALTH SAVINGS AC13 COUNTS.—For purposes of this section, any health savings 

14 account (as described in section 223 of the Internal Rev15 enue Code of 1986) shall be treated in the same manner 

16 as an individual retirement account described in section 

17 408 of such Code.’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to cases commencing under title 

20 11, United States Code, after the date of the enactment 

21 of this Act. 


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1 SEC. 116. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON2 TRIBUTIONS TO THE SAME HSA ACCOUNT. 

3 (a) IN GENERAL.—Section 223(b)(3) of the Internal 

4 Revenue Code of 1986 is amended by adding at the end 

5 the following new subparagraph: 

6 ‘‘(C) SPECIAL RULE WHERE BOTH

7 SPOUSES ARE ELIGIBLE INDIVIDUALS WITH 1

8 ACCOUNT.—If— 

9 ‘‘(i) an individual and the individual’s 

10 spouse have both attained age 55 before 

11 the close of the taxable year, and 

12 ‘‘(ii) the spouse is not an account ben13 eficiary of a health savings account as of 

14 the close of such year, 

15 the additional contribution amount shall be 

16 twice the amount otherwise determined under 

17 subparagraph (B).’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to taxable years beginning after 

20 the date of the enactment of this Act. 

21 SEC. 117. PROVISIONS RELATING TO MEDICARE. 

22 (a) INDIVIDUALS OVER AGE 65 ONLY ENROLLED IN

23 MEDICARE PART A.—Section 223(b)(7) of the Internal 

24 Revenue Code of 1986 is amended by adding at the end 

25 the following: ‘‘This paragraph shall not apply to any indi26 vidual during any period for which the individual’s only 


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1 entitlement to such benefits is an entitlement to hospital 

2 insurance benefits under part A of title XVIII of such Act 

3 pursuant to an enrollment for such hospital insurance ben4 efits under section 226(a)(1) of such Act.’’. 

5 (b) MEDICARE BENEFICIARIES PARTICIPATING IN

6 MEDICARE ADVANTAGE MSA MAY CONTRIBUTE THEIR

7 OWN MONEY TO THEIR MSA.— 

8 (1) IN GENERAL.—Section 138(b) of such Code 

9 is amended by striking paragraph (2) and by redes10 ignating paragraphs (3) and (4) as paragraphs (2) 

11 and (3), respectively. 

12 (2) CONFORMING AMENDMENT.—Section 

13 138(c)(4) of such Code is amended by striking ‘‘and 

14 paragraph (2)’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

18 SEC. 118. INDIVIDUALS ELIGIBLE FOR VETERANS BENE19 FITS FOR A SERVICE-CONNECTED DIS20 ABILITY. 

21 (a) IN GENERAL.—Section 223(c)(1) of the Internal 

22 Revenue Code of 1986 is amended by adding at the end 

23 the following new subparagraph: 

24 ‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI25 GIBLE FOR CERTAIN VETERANS BENEFITS.— 


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1 For purposes of subparagraph (A)(ii), an indi2 vidual shall not be treated as covered under a 

3 health plan described in such subparagraph 

4 merely because the individual receives periodic 

5 hospital care or medical services for a service6 connected disability under any law administered 

7 by the Secretary of Veterans Affairs but only if 

8 the individual is not eligible to receive such care 

9 or services for any condition other than a serv10 ice-connected disability.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to taxable years beginning after 

13 the date of the enactment of this Act. 

14 SEC. 119. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH 

15 SERVICE ASSISTANCE. 

16 (a) IN GENERAL.—Section 223(c)(1) of the Internal 

17 Revenue Code of 1986, as amended by the preceding pro18 visions of this Act, is amended by adding at the end the 

19 following new subparagraph: 

20 ‘‘(D) SPECIAL RULE FOR INDIVIDUALS EL21 IGIBLE FOR ASSISTANCE UNDER INDIAN

22 HEALTH SERVICE PROGRAMS.—For purposes of 

23 subparagraph (A)(ii), an individual shall not be 

24 treated as covered under a health plan de25 scribed in such subparagraph merely because 


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1 the individual receives hospital care or medical 

2 services under a medical care program of the 

3 Indian Health Service or of a tribal organiza4 tion.’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 this section shall apply to taxable years beginning after 

7 the date of the enactment of this Act. 

8 SEC. 120. INDIVIDUALS ELIGIBLE FOR TRICARE COVERAGE. 

9 (a) IN GENERAL.—Section 223(c)(1) of the Internal 

10 Revenue Code of 1986, as amended by the preceding pro11 visions of this Act, is amended by adding at the end the 

12 following new subparagraph: 

13 ‘‘(E) SPECIAL RULE FOR INDIVIDUALS EL14 IGIBLE FOR ASSISTANCE UNDER TRICARE.—For 

15 purposes of subparagraph (A)(ii), an individual 

16 shall not be treated as covered under a health 

17 plan described in such subparagraph merely be18 cause the individual is eligible to receive hos19 pital care, medical services, or prescription 

20 drugs under TRICARE Extra or TRICARE 

21 Standard and such individual is not enrolled in 

22 TRICARE Prime.’’. 

23 (b) EFFECTIVE DATE.—The amendment made by 

24 this section shall apply to taxable years beginning after 

25 the date of the enactment of this Act. 


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1 SEC. 121. FSA AND HRA INTERACTION WITH HSAS. 

2 (a) ELIGIBLE INDIVIDUALS INCLUDE FSA AND HRA 

3 PARTICIPANTS.—Section 223(c)(1)(B) of the Internal 

4 Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘and’’ at the end of clause (ii), 

6 (2) by striking the period at the end of clause 

7 (iii) and inserting ‘‘, and’’, and 

8 (3) by inserting after clause (iii) the following 

9 new clause: 

10 ‘‘(iv) coverage under a health flexible 

11 spending arrangement or a health reim12 bursement arrangement in the plan year a 

13 qualified HSA distribution as described in 

14 section 106(e) is made on behalf of the in15 dividual if after the qualified HSA dis16 tribution is made and for the remaining 

17 duration of the plan year, the coverage 

18 provided under the health flexible spending 

19 arrangement or health reimbursement ar20 rangement is converted to— 

21 ‘‘(I) coverage that does not pay 

22 or reimburse any medical expense in23 curred before the minimum annual de24 ductible under paragraph (2)(A)(i) 

25 (prorated for the period occurring 


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1 after the qualified HSA distribution is 

2 made) is satisfied, 

3 ‘‘(II) coverage that, after the 

4 qualified HSA distribution is made, 

5 does not pay or reimburse any med6 ical expense incurred after the quali7 fied HSA distribution is made other 

8 than preventive care as defined in 

9 paragraph (2)(C), 

10 ‘‘(III) coverage that, after the 

11 qualified HSA distribution is made, 

12 pays or reimburses benefits for cov13 erage described in clause (ii) (but not 

14 through insurance or for long-term 

15 care services), 

16 ‘‘(IV) coverage that, after the 

17 qualified HSA distribution is made, 

18 pays or reimburses benefits for per19 mitted insurance or coverage de20 scribed in clause (ii) (but not for long21 term care services), 

22 ‘‘(V) coverage that, after the 

23 qualified HSA distribution is made, 

24 pays or reimburses only those medical 

25 expenses incurred after an individual’s 


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1 retirement (and no expenses incurred 

2 before retirement), or 

3 ‘‘(VI) coverage that, after the 

4 qualified HSA distribution is made, is 

5 suspended, pursuant to an election 

6 made on or before the date the indi7 vidual elects a qualified HSA distribu8 tion or, if later, on the date of the in9 dividual enrolls in a high deductible 

10 health plan, that does not pay or re11 imburse, at any time, any medical ex12 pense incurred during the suspension 

13 period except as defined in the pre14 ceding subclauses of this clause.’’. 

15 (b) QUALIFIED HSA DISTRIBUTION SHALL NOT AF16 FECT FLEXIBLE SPENDING ARRANGEMENT.—Section 

17 106(e)(1) of such Code is amended to read as follows: 

18 ‘‘(1) IN GENERAL.—A plan shall not fail to be 

19 treated as a health flexible spending arrangement 

20 under this section, section 105, or section 125, or as 

21 a health reimbursement arrangement under this sec22 tion or section 105, merely because such plan pro23 vides for a qualified HSA distribution.’’. 


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1 (c) FSA BALANCES AT YEAR END SHALL NOT FOR2 FEIT.—Section 125(d)(2) of such Code is amended by 

3 adding at the end the following new subparagraph: 

4 ‘‘(E) EXCEPTION FOR QUALIFIED HSA DIS5 TRIBUTIONS.—Subparagraph (A) shall not 

6 apply to the extent that there is an amount re7 maining in a health flexible spending account at 

8 the end of a plan year that an individual elects 

9 to contribute to a health savings account pursu10 ant to a qualified HSA distribution (as defined 

11 in section 106(e)(2)).’’. 

12 (d) SIMPLIFICATION OF LIMITATIONS ON FSA AND

13 HRA ROLLOVERS.—Section 106(e)(2) of such Code is 

14 amended to read as follows: 

15 ‘‘(2) QUALIFIED HSA DISTRIBUTION.— 

16 ‘‘(A) IN GENERAL.—The term ‘qualified 

17 HSA distribution’ means a distribution from a 

18 health flexible spending arrangement or health 

19 reimbursement arrangement to the extent that 

20 such distribution does not exceed the lesser 

21 of— 

22 ‘‘(i) the balance in such arrangement 

23 as of the date of such distribution, or 

24 ‘‘(ii) the amount determined under 

25 subparagraph (B). 


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1 Such term shall not include more than 1 dis2 tribution with respect to any arrangement. 

3 ‘‘(B) DOLLAR LIMITATIONS.— 

4 ‘‘(i) DISTRIBUTIONS FROM A HEALTH

5 FLEXIBLE SPENDING ARRANGEMENT.—A 

6 qualified HSA distribution from a health 

7 flexible spending arrangement shall not ex8 ceed the applicable amount. 

9 ‘‘(ii) DISTRIBUTIONS FROM A HEALTH

10 REIMBURSEMENT ARRANGEMENT.—A 

11 qualified HSA distribution from a health 

12 reimbursement arrangement shall not ex13 ceed— 

14 ‘‘(I) the applicable amount di15 vided by 12, multiplied by 

16 ‘‘(II) the number of months dur17 ing which the individual is a partici18 pant in the health reimbursement ar19 rangement. 

20 ‘‘(iii) APPLICABLE AMOUNT.—For 

21 purposes of this subparagraph, the applica22 ble amount is— 

23 ‘‘(I) the dollar amount in effect 

24 under section 223(b)(2)(A) in the case 

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1 only coverage under a high deductible 

2 health plan at the time of such dis3 tribution, and 

4 ‘‘(II) twice the dollar amount in 

5 effect under subclause (I) in the case 

6 of an eligible individual who has fam7 ily coverage under a high deductible 

8 health plan at the time of such dis9 tribution.’’. 

10 (e) ELIMINATION OF ADDITIONAL TAX FOR FAILURE

11 TO MAINTAIN HIGH DEDUCTIBLE HEALTH PLAN COV12 ERAGE.—Section 106(e) of such Code is amended— 

13 (1) by striking paragraph (3) and redesignating 

14 paragraphs (4) and (5) as paragraphs (3) and (4), 

15 respectively, and 

16 (2) by striking subparagraph (A) of paragraph 

17 (3), as so redesignated, and redesignating subpara18 graphs (B) and (C) of such paragraph as subpara19 graphs (A) and (B) thereof, respectively. 

20 (f) LIMITED PURPOSE FSAS AND HRAS.—Section 

21 106(e) of such Code, as amended by this section, is 

22 amended by adding at the end the following new para23 graph: 

24 ‘‘(5) LIMITED PURPOSE FSAS AND HRAS.—A 

25 plan shall not fail to be a health flexible spending 


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1 arrangement or health reimbursement arrangement 

2 under this section or section 105 merely because the 

3 plan converts coverage for individuals who enroll in 

4 a high deductible health plan described in section 

5 223(c)(2) to coverage described in section 

6 223(c)(1)(B)(iv). Coverage for such individuals may 

7 be converted as of the date of enrollment in the high 

8 deductible health plan, without regard to the period 

9 of coverage under the health flexible spending ar10 rangement or health reimbursement arrangement, 

11 and without requiring any change in coverage to in12 dividuals who do not enroll in a high deductible 

13 health plan.’’. 

14 (g) DISCLAIMER OF DISQUALIFYING COVERAGE.— 

15 Section 223(c)(1)(B) of such Code, as amended by this 

16 section, is amended— 

17 (1) by striking ‘‘and’’ at the end of clause (iii), 

18 (2) by striking the period at the end of clause 

19 (iv) and inserting ‘‘, and’’, and 

20 (3) by inserting after clause (iv) the following 

21 new clause: 

22 ‘‘(v) any coverage (including prospec23 tive coverage) under a health plan that is 

24 not a high deductible health plan which is 

25 disclaimed in writing, at the time of the 


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1 creation or organization of the health sav2 ings account, including by execution of a 

3 trust described in subsection (d)(1) 

4 through a governing instrument that in5 cludes such a disclaimer, or by acceptance 

6 of an amendment to such a trust that in7 cludes such a disclaimer.’’. 

8 (h) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to taxable years beginning after 

10 the date of the enactment of this Act. 

11 SEC. 122. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 

12 INCURRED BEFORE ESTABLISHMENT OF AC13 COUNT. 

14 (a) IN GENERAL.—Section 223(d)(2) of the Internal 

15 Revenue Code of 1986 is amended by adding at the end 

16 the following new subparagraph: 

17 ‘‘(D) CERTAIN MEDICAL EXPENSES IN18 CURRED BEFORE ESTABLISHMENT OF ACCOUNT

19 TREATED AS QUALIFIED.—An expense shall not 

20 fail to be treated as a qualified medical expense 

21 solely because such expense was incurred before 

22 the establishment of the health savings account 

23 if such expense was incurred— 

24 ‘‘(i) during either— 


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1 ‘‘(I) the taxable year in which the 

2 health savings account was estab3 lished, or 

4 ‘‘(II) the preceding taxable year 

5 in the case of a health savings ac6 count established after the taxable 

7 year in which such expense was in8 curred but before the time prescribed 

9 by law for filing the return for such 

10 taxable year (not including extensions 

11 thereof), and 

12 ‘‘(ii) for medical care of an individual 

13 during a period that such individual was 

14 covered by a high deductible health plan 

15 and met the requirements of subsection 

16 (c)(1)(A)(ii) (after application of sub17 section (c)(1)(B)).’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to taxable years beginning after 

20 the date of the enactment of this Act. 

21 SEC. 123. PREVENTIVE CARE PRESCRIPTION DRUG CLARI22 FICATION. 

23 (a) CLARIFY USE OF DRUGS IN PREVENTIVE

24 CARE.—Section 223(c)(2)(C) of the Internal Revenue 

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1 lowing: ‘‘Preventive care shall include prescription and 

2 over-the-counter drugs and medicines which have the pri3 mary purpose of preventing the onset of, further deteriora4 tion from, or complications associated with chronic condi5 tions, illnesses, or diseases.’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to taxable years beginning after 

8 December 31, 2003. 

9 SEC. 124. ADMINISTRATIVE ERROR CORRECTION BEFORE 

10 DUE DATE OF RETURN. 

11 (a) IN GENERAL.—Section 223(f)(4) of the Internal 

12 Revenue Code of 1986 is amended by adding at the end 

13 the following new subparagraph: 

14 ‘‘(D) EXCEPTION FOR ADMINISTRATIVE

15 ERRORS CORRECTED BEFORE DUE DATE OF RE16 TURN.—Subparagraph (A) shall not apply if 

17 any payment or distribution is made to correct 

18 an administrative, clerical or payroll contribu19 tion error and if— 

20 ‘‘(i) such distribution is received by 

21 the individual on or before the last day 

22 prescribed by law (including extensions of 

23 time) for filing such individual’s return for 

24 such taxable year, and 


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1 ‘‘(ii) such distribution is accompanied 

2 by the amount of net income attributable 

3 to such contribution. 

4 Any net income described in clause (ii) shall be 

5 included in the gross income of the individual 

6 for the taxable year in which it is received.’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall take effect on the date of the enactment 

9 of this Act. 

10 SEC. 125. MEMBERS OF HEALTH CARE SHARING MIN11 ISTRIES ELIGIBLE TO ESTABLISH HEALTH 

12 SAVINGS ACCOUNTS. 

13 (a) IN GENERAL.—Section 223 of the Internal Rev14 enue Code of 1986, as amended by the preceding provi15 sions of this Act, is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(j) APPLICATION TO HEALTH CARE SHARING MIN18 ISTRIES.—For purposes of this section, membership in a 

19 health care sharing ministry (as defined in section 

20 5000A(d)(2)(B)(ii)) shall be treated as coverage under a 

21 high deductible health plan.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to taxable years beginning after 

24 the date of the enactment of this Act. 


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1 SEC. 126. HIGH DEDUCTIBLE HEALTH PLANS RENAMED 

2 HSA QUALIFIED PLANS. 

3 (a) IN GENERAL.—Section 223 of the Internal Rev4 enue Code of 1986, as amended by this Act, is amended 

5 by striking ‘‘high deductible health plan’’ each place it ap6 pears and inserting ‘‘HSA qualified health plan’’. 

7 (b) CONFORMING AMENDMENTS.— 

8 (1) Section 106(e) of such Code, as amended by 

9 this Act, is amended by striking ‘‘high deductible 

10 health plan’’ each place it appears and inserting 

11 ‘‘HSA qualified health plan’’. 

12 (2) The heading for section 223(c)(2) of such 

13 Code is amended by striking ‘‘HIGH DEDUCTIBLE

14 HEALTH PLAN’’ and inserting ‘‘HSA QUALIFIED

15 HEALTH PLAN’’. 

16 (3) Section 408(d)(9) of such Code is amend17 ed— 

18 (A) by striking ‘‘high deductible health 

19 plan’’ each place it appears in subparagraph 

20 (C) and inserting ‘‘HSA qualified health plan’’, 

21 and 

22 (B) by striking ‘‘HIGH DEDUCTIBLE

23 HEALTH PLAN’’ in the heading of subparagraph 

24 (D) and inserting ‘‘HSA QUALIFIED HEALTH

25 PLAN’’. 


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1 SEC. 127. TREATMENT OF DIRECT PRIMARY CARE SERVICE 

2 ARRANGEMENTS. 

3 (a) IN GENERAL.—Section 223(c) of the Internal 

4 Revenue Code of 1986 is amended by adding at the end 

5 the following new paragraph: 

6 ‘‘(6) TREATMENT OF DIRECT PRIMARY CARE

7 SERVICE ARRANGEMENTS.—An arrangement under 

8 which an individual is provided coverage restricted to 

9 primary care services in exchange for a fixed peri10 odic fee— 

11 ‘‘(A) shall not be treated as a health plan 

12 for purposes of paragraph (1)(A)(ii), and 

13 ‘‘(B) shall not be treated as insurance for 

14 purposes of subsection (d)(2)(B).’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

18 SEC. 128. CERTAIN PROVIDER FEES TO BE TREATED AS 

19 MEDICAL CARE. 

20 (a) IN GENERAL.—Section 213(d) of the Internal 

21 Revenue Code of 1986 is amended by adding at the end 

22 the following new paragraph: 

23 ‘‘(12) PERIODIC PROVIDER FEES.—The term 

24 ‘medical care’ shall include periodic fees paid to a 

25 primary care physician for the right to receive med26 ical services on an as-needed basis.’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 SEC. 129. CLARIFICATION OF TREATMENT OF CAPITATED 

5 PRIMARY CARE PAYMENTS AS AMOUNTS 

6 PAID FOR MEDICAL CARE. 

7 (a) IN GENERAL.—Section 213(d) of the Internal 

8 Revenue Code of 1986, as amended by the preceding pro9 vision of this Act, is amended by adding at the end the 

10 following new paragraph: 

11 ‘‘(13) TREATMENT OF CAPITATED PRIMARY

12 CARE PAYMENTS.—Capitated primary care payments 

13 shall be treated as amounts paid for medical care.’’. 

14 (b) EFFECTIVE DATE.—The amendment made by 

15 this section shall apply to taxable years beginning after 

16 the date of the enactment of this Act. 

17 Subtitle C—Other Provisions 

18 SEC. 131. LIMITATION ON EMPLOYER-PROVIDED HEALTH 

19 CARE COVERAGE. 

20 (a) IN GENERAL.—Section 106 of the Internal Rev21 enue Code of 1986, as amended by the preceding provi22 sions of this Act, is amended by adding at the end the 

23 following new subsection: 

24 ‘‘(f) LIMITATION ON EMPLOYER-PROVIDED HEALTH

25 CARE COVERAGE.— 


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1 ‘‘(1) IN GENERAL.—The amount of any exclu2 sion under subsection (a) for any taxable year with 

3 respect to— 

4 ‘‘(A) any employer-provided coverage 

5 under an accident or health plan which con6 stitutes medical care, and 

7 ‘‘(B) any employer contribution to an Ar8 cher MSA or a health savings account which is 

9 treated by subsection (b) or (d) as employer10 provided coverage for medical expenses under 

11 an accident or health plan, 

12 shall not exceed $8,000 per employee for self-only 

13 coverage and $20,000 for family coverage. 

14 ‘‘(2) INFLATION ADJUSTMENT.—In the case of 

15 any taxable year beginning in a calendar year after 

16 2016, each dollar amount contained in paragraph 

17 (1) shall be increased by an amount equal to— 

18 ‘‘(A) such dollar amount, multiplied by 

19 ‘‘(B) the cost-of-living adjustment deter20 mined under section 1(f)(3) for the calendar 

21 year in which the taxable year begins, deter22 mined by substituting ‘calendar year 2015’ for 

23 ‘calendar year 1992’ in subparagraph (B) 

24 thereof. 


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1 Any increase determined under the preceding sen2 tence shall be rounded to the nearest multiple of 

3 $50. 

4 ‘‘(3) MEDICAL CARE DEFINED.—For purposes 

5 of paragraph (1), the term ‘medical care’ has the 

6 meaning given to such term in section 213(d) deter7 mined without regard to— 

8 ‘‘(A) paragraph (1)(C) thereof, and 

9 ‘‘(B) so much of paragraph (1)(D) thereof 

10 as relates to qualified long-term care insur11 ance.’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall apply to taxable years beginning after 

14 December 31, 2015. 

15 SEC. 132. LIMITATION ON ABORTION FUNDING. 

16 No funds authorized under, or credits or deductions 

17 allowed under the Internal Revenue Code of 1986 by rea18 son of, this Act (or any amendment made by this Act) 

19 may be used to pay for any abortion or to cover any part 

20 of the costs of any health plan that includes coverage of 

21 abortion, except in the case where a woman suffers from 

22 a physical disorder, physical injury, or physical illness that 

23 would, as certified by a physician, place the woman in dan24 ger of death unless an abortion is performed, including 

25 a life-endangering physical condition caused by or arising 


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1 from the pregnancy itself, or unless the pregnancy is the 

2 result of an act of rape or incest. 

3 SEC. 133. NO GOVERNMENT DISCRIMINATION AGAINST 

4 CERTAIN HEALTH CARE ENTITIES. 

5 (a) NON-DISCRIMINATION.—A Federal agency or 

6 program, and any State or local government that receives 

7 Federal financial assistance under this Act or any amend8 ment made by this Act (either directly or indirectly), may 

9 not subject any individual or institutional health care enti10 ty to discrimination on the basis that the health care enti11 ty does not provide, pay for, provide coverage of, or refer 

12 for abortions. 

13 (b) HEALTH CARE ENTITY DEFINED.—For purposes 

14 of this section, the term ‘‘health care entity’’ includes an 

15 individual physician or other health care professional, a 

16 hospital, a provider-sponsored organization, a health 

17 maintenance organization, a health insurance plan, or any 

18 other kind of health care facility, organization, or plan. 

19 (c) REMEDIES.— 

20 (1) IN GENERAL.—The courts of the United 

21 States shall have jurisdiction to prevent and redress 

22 actual or threatened violations of this section by 

23 issuing any form of legal or equitable relief, includ24 ing— 


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1 (A) injunctions prohibiting conduct that 

2 violates this section; and 

3 (B) orders preventing the disbursement of 

4 all or a portion of Federal financial assistance 

5 to a State or local government, or to a specific 

6 offending agency or program of a State or local 

7 government, until such time as the conduct pro8 hibited by this section has ceased. 

9 (2) COMMENCEMENT OF ACTION.—An action 

10 under this subsection may be instituted by— 

11 (A) any health care entity that has stand12 ing to complain of an actual or threatened vio13 lation of this section; or 

14 (B) the Attorney General of the United 

15 States. 

16 (d) ADMINISTRATION.—The Secretary of Health and 

17 Human Services shall designate the Director of the Office 

18 for Civil Rights of the Department of Health and Human 

19 Services— 

20 (1) to receive complaints alleging a violation of 

21 this section; 

22 (2) subject to paragraph (3), to pursue the in23 vestigation of such complaints in coordination with 

24 the Attorney General; and 


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1 (3) in the case of a complaint related to a Fed2 eral agency (other than with respect to the Depart3 ment of Health and Human Services) or program 

4 administered through such other agency or any 

5 State or local government receiving Federal financial 

6 assistance through such other agency, to refer the 

7 complaint to the appropriate office of such other 

8 agency. 

9 SEC. 134. EQUAL EMPLOYER CONTRIBUTION RULE TO PRO10 MOTE CHOICE. 

11 (a) IN GENERAL.—Section 5000 of the Internal Rev12 enue Code of 1986 is amended by adding at the end the 

13 following new subsection: 

14 ‘‘(e) HEALTH CARE CONTRIBUTION ELECTION.— 

15 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

16 apply in the case of a group health plan with respect 

17 to which the requirements of paragraphs (2) and (3) 

18 are met. 

19 ‘‘(2) CONTRIBUTION ELECTION.—The require20 ment of this paragraph is met with respect to a 

21 group health plan if any employee of an employer 

22 (who but for this paragraph would be covered by 

23 such plan) may elect to have the employer or em24 ployee organization pay an amount which is not less 

25 than the contribution amount to any provider of 


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1 health insurance coverage (other than excepted bene2 fits as defined in section 9832(c)) which constitutes 

3 medical care of the individual or individual’s spouse 

4 or dependents in lieu of such group health plan cov5 erage otherwise provided or contributed to by the 

6 employer with respect to such employee. 

7 ‘‘(3) PRE-EXISTING CONDITIONS.— 

8 ‘‘(A) IN GENERAL.—The requirement of 

9 this paragraph is met with respect to health in10 surance coverage provided to a participant or 

11 beneficiary by any health insurance issuer if, 

12 under such plan the requirements of section 

13 9801 are met with respect to the participant or 

14 beneficiary. 

15 ‘‘(B) ENFORCEMENT WITH RESPECT TO

16 INDIVIDUAL ELECTION.—For purposes of sub17 paragraph (A), any health insurance coverage 

18 with respect to the participant or beneficiary 

19 shall be treated as health insurance coverage 

20 under a group health plan to which section 

21 9801 applies. 

22 ‘‘(4) CONTRIBUTION AMOUNT.—For purposes 

23 of this section, the term ‘contribution amount’ 

24 means, with respect to an individual under a group 

25 health plan, the portion of the applicable premium of 


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1 such individual under such plan (as determined 

2 under section 4980B(f)(4)) which is not paid by the 

3 individual. In the case that the employer offers more 

4 than one group health plan, the contribution amount 

5 shall be the average amount of the applicable pre6 miums under such plans. 

7 ‘‘(5) GROUP HEALTH PLAN.—For purpose of 

8 this subsection, subsection (d) shall not apply. 

9 ‘‘(6) APPLICATION TO FEHBP.—Notwith10 standing any other provision of law, the Office of 

11 Personnel Management shall carry out the health 

12 benefits program under chapter 89 of title 5, United 

13 States Code, consistent with the requirements of this 

14 subsection.’’. 

15 (b) REQUIREMENT OF EQUAL CONTRIBUTIONS TO

16 ALL FEHBP PLANS.—Section 8906 of title 5, United 

17 States Code, is amended by adding at the end the fol18 lowing new subsection: 

19 ‘‘(j) Notwithstanding the previous provisions of this 

20 section the Office of Personnel Management shall revise 

21 the amount of the Government contribution made under 

22 this section in a manner so that— 

23 ‘‘(1) the amount of such contribution does not 

24 change based on the health benefits plan in which 

25 the individual is enrolled; and 


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1 ‘‘(2) the aggregate amount of such contribu2 tions is estimated to be equal to the aggregate 

3 amount of such contributions if this subsection did 

4 not apply.’’. 

5 (c) EMPLOYEE RETIREMENT INCOME SECURITY ACT

6 OF 1974 CONFORMING AMENDMENTS.— 

7 (1) EXCEPTION FROM HIPAA REQUIREMENTS

8 FOR BENEFITS PROVIDED UNDER HEALTH CARE

9 CONTRIBUTION ELECTION.—Section 732 of the Em10 ployee Retirement Income Security Act of 1974 (29 

11 U.S.C. 1191a) is amended by adding at the end the 

12 following new subsection: 

13 ‘‘(e) HEALTH CARE CONTRIBUTION ELECTION.— 

14 ‘‘(1) IN GENERAL.—The requirements of this 

15 part shall not apply in the case of health insurance 

16 coverage (other than excepted benefits as defined in 

17 section 9832(c) of the Internal Revenue Code of 

18 1986)— 

19 ‘‘(A) which is provided to a participant or 

20 beneficiary by a health insurance issuer under 

21 a group health plan, and 

22 ‘‘(B) with respect to which the require23 ments of paragraphs (2) and (3) are met. 

24 ‘‘(2) CONTRIBUTION ELECTION.—The require25 ment of this paragraph is met with respect to health 


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1 insurance coverage provided to a participant or ben2 eficiary by any health insurance issuer under a 

3 group health plan if, under such plan— 

4 ‘‘(A) the participant may elect such cov5 erage for any period of coverage in lieu of 

6 health insurance coverage otherwise provided 

7 under such plan for such period, and 

8 ‘‘(B) in the case of such an election, the 

9 plan sponsor is required to pay to such issuer 

10 for the elected coverage for such period an 

11 amount which is not less than the contribution 

12 amount for such health insurance coverage oth13 erwise provided under such plan for such pe14 riod. 

15 ‘‘(3) PRE-EXISTING CONDITIONS.— 

16 ‘‘(A) IN GENERAL.—The requirement of 

17 this paragraph is met with respect to health in18 surance coverage provided to a participant or 

19 beneficiary by any health insurance issuer if, 

20 under such plan the requirements of section 

21 701 are met with respect to the participant or 

22 beneficiary. 

23 ‘‘(B) ENFORCEMENT WITH RESPECT TO

24 INDIVIDUAL ELECTION.—For purposes of sub25 paragraph (A), any health insurance coverage 


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1 with respect to the participant or beneficiary 

2 shall be treated as health insurance coverage 

3 under a group health plan to which section 701 

4 applies. 

5 ‘‘(4) CONTRIBUTION AMOUNT.— 

6 ‘‘(A) IN GENERAL.—For purposes of this 

7 section, the term ‘contribution amount’ means, 

8 with respect to any period of health insurance 

9 coverage offered to a participant or beneficiary, 

10 the portion of the applicable premium of such 

11 participant or beneficiary under such plan 

12 which is not paid by such participant or bene13 ficiary. In the case that the employer offers 

14 more than one group health plan, the contribu15 tion amount shall be the average amount of the 

16 applicable premiums under such plans. 

17 ‘‘(B) APPLICABLE PREMIUM.—For pur18 poses of subparagraph (A), the term ‘applicable 

19 premium’ means, with respect to any period of 

20 health insurance coverage of a participant or 

21 beneficiary under a group health plan, the cost 

22 to the plan for such period of such coverage for 

23 similarly situated beneficiaries (without regard 

24 to whether such cost is paid by the plan spon25 sor or the participant or beneficiary).’’. 


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1 (2) EXEMPTION FROM FIDUCIARY LIABILITY.— 

2 Section 404 of such Act (29 U.S.C. 1104) is amend3 ed by adding at the end the following new sub4 section: 

5 ‘‘(e) The plan sponsor of a group health plan (as de6 fined in section 733(a)) shall not be treated as breaching 

7 any of the responsibilities, obligations, or duties imposed 

8 upon fiduciaries by this title in the case of any individual 

9 who is a participant or beneficiary under such plan solely 

10 because of the extent to which the plan sponsor provides, 

11 in the case of such individual, some or all of such benefits 

12 by means of payment of contribution amounts pursuant 

13 to a contribution election under section 732(e), irrespec14 tive of the amount or type of benefits that would otherwise 

15 be provided to such individual under such plan.’’. 

16 (d) EXCEPTION FROM HIPAA REQUIREMENTS

17 UNDER IRC FOR BENEFITS PROVIDED UNDER HEALTH

18 CARE CONTRIBUTION ELECTION.—Section 9831 of the 

19 Internal Revenue Code of 1986 (relating to general excep20 tions) is amended by adding at the end the following new 

21 subsection: 

22 ‘‘(d) HEALTH CARE CONTRIBUTION ELECTION.— 

23 ‘‘(1) IN GENERAL.—The requirements of this 

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1 ance coverage (other than excepted benefits as de2 fined in section 9832(c))— 

3 ‘‘(A) which is provided to a participant or 

4 beneficiary by a health insurance issuer under 

5 a group health plan, and 

6 ‘‘(B) with respect to which the require7 ments of paragraphs (2) and (3) are met. 

8 ‘‘(2) CONTRIBUTION ELECTION.—The require9 ment of this paragraph is met with respect to health 

10 insurance coverage provided to a participant or ben11 eficiary by any health insurance issuer under a 

12 group health plan if, under such plan— 

13 ‘‘(A) the participant may elect such cov14 erage for any period of coverage in lieu of 

15 health insurance coverage otherwise provided 

16 under such plan for such period, and 

17 ‘‘(B) in the case of such an election, the 

18 plan sponsor is required to pay to such issuer 

19 for the elected coverage for such period an 

20 amount which is not less than the contribution 

21 amount for such health insurance coverage oth22 erwise provided under such plan for such pe23 riod. 

24 ‘‘(3) PRE-EXISTING CONDITIONS.— 


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1 ‘‘(A) IN GENERAL.—The requirement of 

2 this paragraph is met with respect to health in3 surance coverage provided to a participant or 

4 beneficiary by any health insurance issuer if, 

5 under such plan the requirements of section 

6 9801 are met with respect to the participant or 

7 beneficiary. 

8 ‘‘(B) ENFORCEMENT WITH RESPECT TO

9 INDIVIDUAL ELECTION.—For purposes of sub10 paragraph (A), any health insurance coverage 

11 with respect to the participant or beneficiary 

12 shall be treated as health insurance coverage 

13 under a group health plan to which section 

14 9801 applies. 

15 ‘‘(4) CONTRIBUTION AMOUNT.— 

16 ‘‘(A) IN GENERAL.—For purposes of this 

17 subsection, the term ‘contribution amount’ 

18 means, with respect to any period of health in19 surance coverage offered to a participant or 

20 beneficiary, the portion of the applicable pre21 mium of such participant or beneficiary under 

22 such plan which is not paid by such participant 

23 or beneficiary. In the case that the employer of24 fers more than one group health plan, the conVerDate Sep 11 2014 04:33 May 20, 2015 Jkt 049200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 E:\BILLS\H2300.IH H2300

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1 tribution amount shall be the average amount 

2 of the applicable premiums under such plans. 

3 ‘‘(B) APPLICABLE PREMIUM.—For pur4 poses of subparagraph (A), the term ‘applicable 

5 premium’ means, with respect to any period of 

6 health insurance coverage of a participant or 

7 beneficiary under a group health plan, the cost 

8 to the plan for such period of such coverage for 

9 similarly situated beneficiaries (without regard 

10 to whether such cost is paid by the plan spon11 sor or the participant or beneficiary).’’. 

12 (e) EXCEPTION FROM HIPAA REQUIREMENTS

13 UNDER THE PHSA FOR BENEFITS PROVIDED UNDER

14 HEALTH CARE CONTRIBUTION ELECTION.—Section 2721 

15 of the Public Health Service Act (42 U.S.C. 300gg–21) 

16 is amended— 

17 (1) by redesignating subsection (e) as sub18 section (f); and 

19 (2) by inserting after subsection (d) the fol20 lowing new subsection: 

21 ‘‘(e) HEALTH CARE CONTRIBUTION ELECTION.— 

22 ‘‘(1) IN GENERAL.—The requirements of sub23 parts 1 through 3 shall not apply in the case of 

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1 fits as defined in section 9832(c) of the Internal 

2 Revenue Code of 1986)— 

3 ‘‘(A) which is provided to a participant or 

4 beneficiary by a health insurance issuer under 

5 a group health plan, and 

6 ‘‘(B) with respect to which the require7 ments of paragraphs (2) and (3) are met. 

8 ‘‘(2) CONTRIBUTION ELECTION.—The require9 ment of this paragraph is met with respect to health 

10 insurance coverage provided to a participant or ben11 eficiary by any health insurance issuer under a 

12 group health plan if, under such plan— 

13 ‘‘(A) the participant may elect such cov14 erage for any period of coverage in lieu of 

15 health insurance coverage otherwise provided 

16 under such plan for such period, and 

17 ‘‘(B) in the case of such an election, the 

18 plan sponsor is required to pay to such issuer 

19 for the elected coverage for such period an 

20 amount which is not less than the contribution 

21 amount for such health insurance coverage oth22 erwise provided under such plan for such pe23 riod. 

24 ‘‘(3) PRE-EXISTING CONDITIONS.— 


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1 ‘‘(A) IN GENERAL.—The requirement of 

2 this paragraph is met with respect to health in3 surance coverage provided to a participant or 

4 beneficiary by any health insurance issuer if, 

5 under such plan the requirements of section 

6 2701 are met with respect to the participant or 

7 beneficiary. 

8 ‘‘(B) ENFORCEMENT WITH RESPECT TO

9 INDIVIDUAL ELECTION.—For purposes of sub10 paragraph (A), any health insurance coverage 

11 with respect to the participant or beneficiary 

12 shall be treated as health insurance coverage 

13 under a group health plan to which section 

14 2701 applies. 

15 ‘‘(4) CONTRIBUTION AMOUNT.— 

16 ‘‘(A) IN GENERAL.—For purposes of this 

17 section, the term ‘contribution amount’ means, 

18 with respect to any period of health insurance 

19 coverage offered to a participant or beneficiary, 

20 the portion of the applicable premium of such 

21 participant or beneficiary under such plan 

22 which is not paid by such participant or bene23 ficiary. In the case that the employer offers 

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1 tion amount shall be the average amount of the 

2 applicable premiums under such plans. 

3 ‘‘(B) APPLICABLE PREMIUM.—For pur4 poses of subparagraph (A), the term ‘applicable 

5 premium’ means, with respect to any period of 

6 health insurance coverage of a participant or 

7 beneficiary under a group health plan, the cost 

8 to the plan for such period of such coverage for 

9 similarly situated beneficiaries (without regard 

10 to whether such cost is paid by the plan spon11 sor or the participant or beneficiary).’’. 

12 SEC. 135. LIMITATIONS ON STATE RESTRICTIONS ON EM13 PLOYER AUTO-ENROLLMENT. 

14 (a) IN GENERAL.—No State shall establish a law 

15 that prevents an employer that is allowed an exclusion 

16 from gross income, a deduction, or a credit for Federal 

17 income tax purposes for health benefits furnished to a par18 ticipant or beneficiary from instituting auto-enrollment 

19 which meets the requirements of subsection (b) for cov20 erage of a participant or beneficiary under a group health 

21 plan, or health insurance coverage offered in connection 

22 with such a plan, so long as the participant or beneficiary 

23 has the option of declining such coverage. 

24 (b) AUTOMATIC ENROLLMENT FOR EMPLOYER25 SPONSORED HEALTH BENEFITS.— 


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1 (1) IN GENERAL.—The requirement of this sub2 section with respect to an employer and an employee 

3 is that the employer automatically enroll such em4 ployee into the employment-based health benefits 

5 plan for individual coverage under the plan option 

6 with the lowest applicable employee premium. 

7 (2) OPT-OUT.—In no case may an employer 

8 automatically enroll an employee in a plan under 

9 paragraph (1) if such employee makes an affirmative 

10 election to opt-out of such plan or to elect coverage 

11 under an employment-based health benefits plan of12 fered by such employer. An employer shall provide 

13 an employee with a 30-day period to make such an 

14 affirmative election before the employer may auto15 matically enroll the employee in such a plan. 

16 (3) NOTICE REQUIREMENTS.— 

17 (A) IN GENERAL.—Each employer de18 scribed in paragraph (1) who automatically en19 rolls an employee into a plan as described in 

20 such paragraph shall provide the employees, 

21 within a reasonable period before the beginning 

22 of each plan year (or, in the case of new em23 ployees, within a reasonable period before the 

24 end of the enrollment period for such a new em25 ployee), written notice of the employees’ rights 


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1 and obligations relating to the automatic enroll2 ment requirement under such paragraph. Such 

3 notice must be comprehensive and understood 

4 by the average employee to whom the automatic 

5 enrollment requirement applies. 

6 (B) INCLUSION OF SPECIFIC INFORMA7 TION.—The written notice under subparagraph 

8 (A) must explain an employee’s right to opt out 

9 of being automatically enrolled in a plan and in 

10 the case that more than one level of benefits or 

11 employee premium level is offered by the em12 ployer involved, the notice must explain which 

13 level of benefits and employee premium level the 

14 employee will be automatically enrolled in the 

15 absence of an affirmative election by the em16 ployee. 

17 (c) CONSTRUCTION.—Nothing in this section shall be 

18 construed to supersede State law which establishes, imple19 ments, or continues in effect any standard or requirement 

20 relating to employers in connection with payroll or the 

21 sponsoring of employer-sponsored health insurance cov22 erage except to the extent that such standard or require23 ment prevents an employer from instituting the auto-en24 rollment described in subsection (a). 


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1 (d) NON-APPLICATION TO EXCEPTED BENEFITS.— 

2 For purposes of this section, the term ‘‘group health plan’’ 

3 does not include excepted benefits (as defined in section 

4 2781(c) of the Public Health Service Act (42 U.S.C. 

5 300gg–91(c))). 

6 SEC. 136. CREDIT FOR SMALL EMPLOYERS ADOPTING 

7 AUTO-ENROLLMENT AND DEFINED CON8 TRIBUTION OPTIONS. 

9 (a) IN GENERAL.—Subpart D of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986, as amended by section 2, is amended by adding at 

12 the end the following new section: 

13 ‘‘SEC. 45R. AUTO-ENROLLMENT AND DEFINED CONTRIBU14 TION OPTION FOR HEALTH BENEFITS PLANS 

15 OF SMALL EMPLOYERS. 

16 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

17 the case of a small employer, the health benefits plan im18 plementation credit determined under this section for the 

19 taxable year is an amount equal to 100 percent of the 

20 amount paid or incurred by the taxpayer during the tax21 able year for qualified health benefits expenses. 

22 ‘‘(b) LIMITATION.—The credit determined under sub23 section (a) with respect to any taxpayer for any taxable 

24 year shall not exceed the excess of— 

25 ‘‘(1) $1,500, over 


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1 ‘‘(2) sum of the credits determined under sub2 section (a) with respect to such taxpayer for all pre3 ceding taxable years. 

4 ‘‘(c) QUALIFIED HEALTH BENEFITS EXPENSES.— 

5 For purposes of this section, the term ‘qualified health 

6 benefits auto-enrollment expenses’ means, with respect to 

7 any taxable year, amounts paid or incurred by the tax8 payer during such taxable year for— 

9 ‘‘(1) establishing auto-enrollment which meets 

10 the requirements of section 107 of the Empowering 

11 Patients First Act of 2013 for coverage of a partici12 pant or beneficiary under a group health plan, or 

13 health insurance coverage offered in connection with 

14 such a plan, and 

15 ‘‘(2) implementing the employer contribution 

16 option for health insurance coverage pursuant to 

17 section 5000(e)(2). 

18 ‘‘(d) QUALIFIED SMALL EMPLOYER.—For purposes 

19 of this section, the term ‘qualified small employer’ means 

20 any employer for any taxable year if the number of em21 ployees employed by such employer during such taxable 

22 year does not exceed 50. All employers treated as a single 

23 employer under section (a) or (b) of section 52 shall be 

24 treated as a single employer for purposes of this section. 


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1 ‘‘(e) NO DOUBLE BENEFIT.—No deduction or credit 

2 shall be allowed under any other provision of this chapter 

3 with respect to the amount of the credit determined under 

4 this section. 

5 ‘‘(f) TERMINATION.—Subsection (a) shall not apply 

6 to any taxable year beginning after the date which is 2 

7 years after the date of the enactment of this section.’’. 

8 (b) CREDIT TO BE PART OF GENERAL BUSINESS

9 CREDIT.—Subsection (b) of section 38 of such Code, as 

10 amended by section 2, is amended by striking ‘‘plus’’ at 

11 the end of paragraph (34), by striking the period at the 

12 end of paragraph (35) and inserting ‘‘, plus’’, and by add13 ing at the end the following new paragraph: 

14 ‘‘(36) in the case of a small employer (as de15 fined in section 45R(d)), the health benefits plan im16 plementation credit determined under section 

17 45R(a).’’. 

18 (c) CLERICAL AMENDMENT.—The table of sections 

19 for subpart D of part IV of subchapter A of chapter 1 

20 of such Code, as amended by section 2, is amended by 

21 inserting after the item relating to section 45Q the fol22 lowing new item: 

‘‘Sec. 45R. Auto-enrollment and defined contribution option for health benefits 

plans of small employers.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 TITLE II—HEALTH CARE ACCESS 

5 AND AVAILABILITY 

6 Subtitle A—Health Insurance Pool7 ing Mechanisms for Individuals 

8 SEC. 201. FEDERAL GRANTS FOR STATE INSURANCE EX9 PENDITURES. 

10 (a) IN GENERAL.—Subject to the succeeding provi11 sions of this section, each State shall receive from the Sec12 retary of Health and Human Services (in this subtitle re13 ferred to as the ‘‘Secretary’’) a grant for the State’s pro14 viding for the use, in connection with providing health ben15 efits coverage, of a qualifying high-risk pool or a reinsur16 ance pool or other risk-adjustment mechanism used for 

17 the purpose of subsidizing the purchase of private health 

18 insurance. 

19 (b) FUNDING AMOUNT.— 

20 (1) IN GENERAL.—There are hereby appro21 priated, out of any funds in the Treasury not other22 wise appropriated, $1,000,000,000 for each of fiscal 

23 years 2016, 2017, and 2018 for grants under this 

24 section. Such amount shall be divided among the 

25 States as determined by the Secretary. 


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1 (2) CONSTRUCTION.—Nothing in this section 

2 shall be construed as preventing a State from using 

3 funding under section 2745 of the Public Health 

4 Service Act for purposes of funding reinsurance or 

5 other risk mechanisms. 

6 (c) LIMITATION.—Funding under subsection (a) may 

7 only be used for the following: 

8 (1) QUALIFYING HIGH-RISK POOLS.— 

9 (A) CURRENT POOLS.—A qualifying high10 risk pool created before the date of the enact11 ment of this Act that only covers high-risk pop12 ulations and individuals (and their spouse and 

13 dependents) receiving a health care tax credit 

14 under section 35 of the Internal Revenue Code 

15 of 1986 for a limited period of time as deter16 mined by the Secretary or under section 2741 

17 of Public Health Service Act. 

18 (B) NEW POOLS.—A qualifying high-risk 

19 pool created on or after such date that only cov20 ers populations and individuals described in 

21 subparagraph (A) if the pool— 

22 (i) offers at least the option of one or 

23 more high-deductible plan options, in com24 bination with a contribution into a health 

25 savings account; 


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1 (ii) offers multiple competing health 

2 plan options; and 

3 (iii) covers only high-risk populations. 

4 (2) RISK INSURANCE POOL OR OTHER RISK-AD5 JUSTMENT MECHANISMS.— 

6 (A) CURRENT REINSURANCE.—A reinsur7 ance pool, or other risk-adjustment mechanism, 

8 created before the date of the enactment of this 

9 Act that only covers populations and individuals 

10 described in paragraph (1)(A). 

11 (B) NEW POOLS.—A reinsurance pool or 

12 other risk-adjustment mechanism created on or 

13 after such date that provides reinsurance only 

14 covers populations and individuals described in 

15 paragraph (1)(A) and only on a prospective 

16 basis under which a health insurance issuer 

17 cedes covered lives to the pool in exchange for 

18 payment of a reinsurance premium. 

19 (3) TRANSITION.—Nothing in this section shall 

20 be construed as preventing a State from using funds 

21 available to transition from an existing high-risk 

22 pool to a reinsurance pool. 

23 (d) BONUS PAYMENTS.—With respect to any 

24 amounts made available to the States under this section, 

25 the Secretary shall set aside a portion of such amounts 


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1 that shall only be available for the following activities by 

2 such States: 

3 (1) Providing guaranteed availability of indi4 vidual health insurance coverage to certain individ5 uals with prior group coverage under part B of title 

6 XXVII of the Public Health Service Act. 

7 (2) A reduction in premium trends, actual pre8 miums, or other cost-sharing requirements. 

9 (3) An expansion or broadening of the pool of 

10 high-risk individuals eligible for coverage. 

11 (4) States that adopt the Model Health Plan 

12 for Uninsurable Individuals Act of the National As13 sociation of Insurance Commissioners (if and when 

14 updated by such Association). 

15 The Secretary may request such Association to update 

16 such Model Health Plan as needed by 2015. 

17 (e) REQUIREMENTS FOR RECEIPT OF BONUS PAY18 MENTS.—The requirements of this subsection, for the 

19 availability of bonus payments to a State under subsection 

20 (d), are as follows, in the case of an individual who is cov21 ered under a high-risk pool or other pool or mechanism 

22 described in subsection (b) operating in the State for 

23 which funds under this section may be applied: 

24 (1) LIMITATION ON ANNUAL PREMIUMS FOR

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1 ILY INCOME.—The premiums imposed for coverage 

2 of each individual under health insurance coverage 

3 offered through such pool or mechanism may not ex4 ceed (on an annual basis) the following: 

5 (A) If the adjusted gross income (as de6 fined in section 62 of the Internal Revenue 

7 Code of 1986) of all individuals in the individ8 ual’s family does not exceed the poverty line (as 

9 defined in section 673(2) of the Community 

10 Services Block Grant Act (42 U.S.C. 9902(2)), 

11 including any revision required by such section) 

12 applicable to a family of the size involved, 2 

13 percent of such income. 

14 (B) If such adjusted gross income for all 

15 individuals in the individual’s family exceeds 

16 such applicable poverty line, the sum of— 

17 (i) 2 percent of such applicable pov18 erty line; and 

19 (ii) 10 percent of the amount of such 

20 income that exceeds such applicable pov21 erty line. 

22 (2) LIMITATION ON ANNUAL OUT-OF-POCKET

23 COSTS FOR EACH INDIVIDUAL.—There shall be a 

24 limit on the annual out-of-pocket expenditures (in25 cluding annual premiums) for each individual for 


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1 coverage under such pool or mechanism equal to 

2 twice the maximum allowable premiums for such in3 dividual permitted under paragraph (1). 

4 (f) ADMINISTRATION.—The Secretary shall provide 

5 for the administration of this section and may establish 

6 such terms and conditions, including the requirement of 

7 an application, as may be appropriate to carry out this 

8 section. 

9 (g) CONSTRUCTION.—Nothing in this section shall be 

10 construed as requiring a State to operate a reinsurance 

11 pool (or other risk-adjustment mechanism) under this sec12 tion or as preventing a State from operating such a pool 

13 or mechanism through one or more private entities. 

14 (h) DEFINITIONS.—In this section: 

15 (1) QUALIFYING HIGH-RISK POOL.—The term 

16 ‘‘qualifying high-risk pool’’ means any qualified 

17 high-risk pool (as defined in subsection (g)(1)(A) of 

18 section 2745 of the Public Health Service Act) that 

19 meets the conditions to receive a grant under section 

20 (b)(1) of such section. 

21 (2) REINSURANCE POOL OR OTHER RISK-AD22 JUSTMENT MECHANISM DEFINED.—The term ‘‘rein23 surance pool or other risk-adjustment mechanism’’ 

24 means any State-based risk spreading mechanism to 


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1 subsidize the purchase of private health insurance 

2 for the high-risk population. 

3 (3) HIGH-RISK POPULATION.—The term ‘‘high4 risk population’’ means— 

5 (A) individuals who, by reason of the exist6 ence or history of a medical condition, are able 

7 to acquire health coverage only at rates which 

8 are at least 150 percent of the standard risk 

9 rates for such coverage (in a non-community10 rated non-guaranteed issue State), and 

11 (B) individuals who are provided health 

12 coverage by a high-risk pool. 

13 (4) STATE DEFINED.—The term ‘‘State’’ in14 cludes the District of Columbia, Puerto Rico, the 

15 Virgin Islands, Guam, American Samoa, and the 

16 Northern Mariana Islands. 

17 (i) EXTENDING FUNDING.—Section 2745(d)(2) of 

18 the Public Health Service Act (42 U.S.C. 300gg–45(d)(2)) 

19 is amended— 

20 (1) in the heading, by inserting ‘‘AND 2016

21 THROUGH 2018’’ after ‘‘2010’’; and 

22 (2) by inserting ‘‘and for each of fiscal years 

23 2016 through 2018’’ after ‘‘for each of fiscal years 

24 2007 through 2010’’. 


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1 (j) SUNSET.—Funds made available under this sec2 tion shall not be used for the purpose of subsidizing the 

3 purchase of private health insurance on or after October 

4 1, 2018. 

5 SEC. 202. POOL REFORM FOR INDIVIDUAL MEMBERSHIP 

6 EXPANSION. 

7 The Public Health Service Act, as amended by sec8 tion 2, is further amended by inserting after title XXX 

9 the following new title: 

10 ‘‘TITLE XXXI—POOL REFORM 

11 FOR INDIVIDUAL MEMBER12 SHIP EXPANSION 

13 ‘‘SEC. 3100. PURPOSE. 

14 ‘‘The purpose of this title is to provide, through the 

15 establishment of independent health pools (or IHPs), for 

16 the reform of, and expansion of enrollment in, health in17 surance coverage for individuals and small employers. 

18 ‘‘SEC. 3101. DEFINITION OF INDEPENDENT HEALTH POOL 

19 (IHP). 

20 ‘‘(a) IN GENERAL.—For purposes of this title, the 

21 terms ‘individual health pool’ and ‘IHP’ mean a legal non22 profit entity that meets the following requirements: 

23 ‘‘(1) ORGANIZATION.—The IHP— 

24 ‘‘(A) has been formed and maintained in 

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1 mation of a risk pool in order to offer health in2 surance coverage to its members; 

3 ‘‘(B) does not condition membership in the 

4 IHP on any health status-related factor relating 

5 to an individual (including an employee of an 

6 employer or a dependent of an employee); 

7 ‘‘(C) does not make health insurance cov8 erage offered through the IHP available other 

9 than in connection with a member of the IHP; 

10 ‘‘(D) is not a health insurance issuer; and 

11 ‘‘(E) does not receive any consideration di12 rectly or indirectly from any health insurance 

13 issuer in connection with the enrollment of any 

14 individuals, or employees of employers, in any 

15 health insurance coverage, except in conjunction 

16 with services offered through the IHP. 

17 ‘‘(2) OFFERING HEALTH BENEFITS COV18 ERAGE.— 

19 ‘‘(A) DIFFERENT GROUPS.—The IHP, in 

20 conjunction with those health insurance issuers 

21 that offer health benefits coverage through the 

22 IHP, makes available health benefits coverage 

23 in the manner described in subsection (b) to all 

24 members of the IHP and the dependents of 

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1 ployers, employees and their dependents) in the 

2 manner described in subsection (c)(2) at rates 

3 that are established by the health insurance 

4 issuer on a policy or product specific basis and 

5 that may vary for individuals covered through 

6 an IHP. 

7 ‘‘(B) NONDISCRIMINATION IN COVERAGE

8 OFFERED.— 

9 ‘‘(i) IN GENERAL.—Subject to clause 

10 (ii), the IHP may not offer health benefits 

11 coverage to a member of an IHP unless 

12 the same coverage is offered to all such 

13 members of the IHP. 

14 ‘‘(ii) CONSTRUCTION.—Nothing in 

15 this title shall be construed as requiring or 

16 permitting a health insurance issuer to 

17 provide coverage outside the service area of 

18 the issuer, as approved under State law, or 

19 preventing a health insurance issuer from 

20 underwriting or from excluding or limiting 

21 the coverage on any individual, subject to 

22 the requirement of section 2741 (relating 

23 to guaranteed availability of individual 

24 health insurance coverage to certain indi25 viduals with prior group coverage). 


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1 ‘‘(C) NO ASSUMPTION OF INSURANCE RISK

2 BY IHP.—The IHP provides health benefits cov3 erage only through contracts with health insur4 ance issuers and does not assume insurance 

5 risk with respect to such coverage. 

6 ‘‘(3) GEOGRAPHIC AREAS.—Nothing in this title 

7 shall be construed as preventing the establishment 

8 and operation of more than one IHP in a geographic 

9 area or as limiting the number of IHPs that may 

10 operate in any area. 

11 ‘‘(4) PROVISION OF ADMINISTRATIVE SERVICES

12 TO PURCHASERS.—The IHP may provide adminis13 trative services for members. Such services may in14 clude accounting, billing, and enrollment informa15 tion. 

16 ‘‘(b) HEALTH BENEFITS COVERAGE REQUIRE17 MENTS.— 

18 ‘‘(1) COMPLIANCE WITH CONSUMER PROTEC19 TION REQUIREMENTS.—Except as provided in sec20 tion 3102, any health benefits coverage offered 

21 through an IHP— 

22 ‘‘(A) shall be issued by a health insurance 

23 issuer that meets all applicable State standards 

24 relating to consumer protection; 


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1 ‘‘(B) shall be approved or otherwise per2 mitted to be offered under State law; and 

3 ‘‘(C) may not impose any exclusion of a 

4 specific disease from such coverage. 

5 ‘‘(2) WELLNESS BONUSES FOR HEALTH PRO6 MOTION.—Nothing in this title shall be construed as 

7 precluding a health insurance issuer offering health 

8 benefits coverage through an IHP from establishing 

9 premium discounts or rebates for members or from 

10 modifying otherwise applicable copayments or 

11 deductibles in return for adherence to programs of 

12 health promotion and disease prevention so long as 

13 such programs are agreed to in advance by the IHP 

14 and comply with all other provisions of this title and 

15 do not discriminate among similarly situated mem16 bers. 

17 ‘‘(c) MEMBERS; HEALTH INSURANCE ISSUERS.— 

18 ‘‘(1) MEMBERS.— 

19 ‘‘(A) IN GENERAL.—Under rules estab20 lished to carry out this title, with respect to an 

21 individual or small employer who is a member 

22 of an IHP, the individual may enroll for health 

23 benefits coverage (including coverage for de24 pendents of such individual) or employer may 

25 enroll employees for health benefits coverage 


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1 (including coverage for dependents of such em2 ployees) offered by a health insurance issuer 

3 through the IHP. 

4 ‘‘(B) RULES FOR ENROLLMENT.—Nothing 

5 in this paragraph shall preclude an IHP from 

6 establishing rules of enrollment and reenroll7 ment of members. Such rules shall be applied 

8 consistently to all members within the IHP and 

9 shall not be based in any manner on health sta10 tus-related factors. 

11 ‘‘(2) HEALTH INSURANCE ISSUERS.—The con12 tract between an IHP and a health insurance issuer 

13 shall provide, with respect to a member enrolled with 

14 health benefits coverage offered by the issuer 

15 through the IHP, for the payment to the issuer of 

16 the premiums (if any) collected by the IHP for 

17 health insurance coverage offered by the issuer. 

18 ‘‘SEC. 3102. APPLICATION OF CERTAIN LAWS AND REQUIRE19 MENTS. 

20 ‘‘(a) PREEMPTION OF STATE LAWS RESTRICTING

21 FORMATION OF IHPS.—Any State law or regulation relat22 ing to the composition or organization of an IHP is pre23 empted to the extent the law or regulation is inconsistent 

24 with the provisions of this title. 


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1 ‘‘(b) PREEMPTION OF STATE REQUIREMENTS RE2 LATING TO HEALTH BENEFIT COVERAGE.— 

3 ‘‘(1) BENEFIT REQUIREMENTS.— 

4 ‘‘(A) IN GENERAL.—Subject to subpara5 graph (B), State laws are superseded, and shall 

6 not apply to health benefits coverage made 

7 available through an IHP, insofar as such laws 

8 impose benefit requirements for such coverage, 

9 including (but not limited to) requirements re10 lating to coverage of specific providers, specific 

11 services or conditions, or the amount, duration, 

12 or scope of benefits. 

13 ‘‘(B) EXCEPTION FOR FEDERALLY IM14 POSED REQUIREMENTS AND FOR REQUIRE15 MENTS PROHIBITING DISEASE-SPECIFIC EXCLU16 SIONS.—Subparagraph (A) shall not apply to a 

17 requirement to the extent the requirement— 

18 ‘‘(i) implements title XXVII or other 

19 Federal law; or 

20 ‘‘(ii) prohibits imposition of an exclu21 sion of a specific disease from health bene22 fits coverage. 

23 ‘‘(2) OTHER REQUIREMENTS PREVENTING OF24 FERING OF COVERAGE THROUGH AN IHP.—State 

25 laws are superseded, and shall not apply to health 


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1 benefits coverage made available through an IHP, 

2 insofar as such laws impose any other requirements 

3 (including limitations on compensation arrange4 ments) that, directly or indirectly, preclude (or have 

5 the effect of precluding) the offering of such cov6 erage through an IHP, if the IHP meets the re7 quirements of this title. 

8 ‘‘(c) PREEMPTION OF STATE PREMIUM RATING RE9 QUIREMENTS.—State laws are superseded, and shall not 

10 apply to the premiums imposed for health benefits cov11 erage made available through an IHP, insofar as such 

12 laws impose restrictions on the variation of premiums 

13 among such coverage offered to members of the IHP. 

14 ‘‘SEC. 3103. DEFINITIONS. 

15 ‘‘For purposes of this title: 

16 ‘‘(1) DEPENDENT.—The term ‘dependent’, as 

17 applied to health insurance coverage offered by a 

18 health insurance issuer licensed (or otherwise regu19 lated) in a State, shall have the meaning applied to 

20 such term with respect to such coverage under the 

21 laws of the State relating to such coverage and such 

22 an issuer. Such term may include the spouse and 

23 children of the individual involved. 

24 ‘‘(2) HEALTH BENEFITS COVERAGE.—The term 

25 ‘health benefits coverage’ has the meaning given the 


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1 term health insurance coverage in section 

2 2791(b)(1), and does not include excepted benefits 

3 (as defined in section 2791(c)). 

4 ‘‘(3) HEALTH INSURANCE ISSUER.—The term 

5 ‘health insurance issuer’ has the meaning given such 

6 term in section 2791(b)(2). 

7 ‘‘(4) HEALTH STATUS-RELATED FACTOR.—The 

8 term ‘health status-related factor’ has the meaning 

9 given such term in section 2791(d)(9). 

10 ‘‘(5) MEMBER.—The term ‘member’ means, 

11 with respect to an IHP, an individual or small em12 ployer who is a member of the legal entity described 

13 in section 3101(a)(1) to which the IHP is offering 

14 coverage. 

15 ‘‘(6) SMALL EMPLOYER.—The term ‘small em16 ployer’ has the meaning given such term in section 

17 712(c)(1)(B) of the Employee Retirement and In18 come Security Act of 1974.’’. 

19 Subtitle B—Small Business Health 

20 Fairness 

21 SEC. 211. SHORT TITLE. 

22 This subtitle may be cited as the ‘‘Small Business 

23 Health Fairness Act of 2015’’. 


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1 SEC. 212. RULES GOVERNING ASSOCIATION HEALTH 

2 PLANS. 

3 (a) IN GENERAL.—Subtitle B of title I of the Em4 ployee Retirement Income Security Act of 1974 is amend5 ed by adding after part 7 the following new part: 

6 ‘‘PART 8—RULES GOVERNING ASSOCIATION 

7 HEALTH PLANS 

8 ‘‘SEC. 801. ASSOCIATION HEALTH PLANS. 

9 ‘‘(a) IN GENERAL.—For purposes of this part, the 

10 term ‘association health plan’ means a group health plan 

11 whose sponsor is (or is deemed under this part to be) de12 scribed in subsection (b). 

13 ‘‘(b) SPONSORSHIP.—The sponsor of a group health 

14 plan is described in this subsection if such sponsor— 

15 ‘‘(1) is organized and maintained in good faith, 

16 with a constitution and bylaws specifically stating its 

17 purpose and providing for periodic meetings on at 

18 least an annual basis, as a bona fide trade associa19 tion, a bona fide industry association (including a 

20 rural electric cooperative association or a rural tele21 phone cooperative association), a bona fide profes22 sional association, or a bona fide chamber of com23 merce (or similar bona fide business association, in24 cluding a corporation or similar organization that 

25 operates on a cooperative basis (within the meaning 

26 of section 1381 of the Internal Revenue Code of 


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1 1986)), for substantial purposes other than that of 

2 obtaining or providing medical care; 

3 ‘‘(2) is established as a permanent entity which 

4 receives the active support of its members and re5 quires for membership payment on a periodic basis 

6 of dues or payments necessary to maintain eligibility 

7 for membership in the sponsor; and 

8 ‘‘(3) does not condition membership, such dues 

9 or payments, or coverage under the plan on the 

10 basis of health status-related factors with respect to 

11 the employees of its members (or affiliated mem12 bers), or the dependents of such employees, and does 

13 not condition such dues or payments on the basis of 

14 group health plan participation. 

15 Any sponsor consisting of an association of entities which 

16 meet the requirements of paragraphs (1), (2), and (3) 

17 shall be deemed to be a sponsor described in this sub18 section. 

19 ‘‘SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH 

20 PLANS. 

21 ‘‘(a) IN GENERAL.—The applicable authority shall 

22 prescribe by regulation a procedure under which, subject 

23 to subsection (b), the applicable authority shall certify as24 sociation health plans which apply for certification as 

25 meeting the requirements of this part. 


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1 ‘‘(b) STANDARDS.—Under the procedure prescribed 

2 pursuant to subsection (a), in the case of an association 

3 health plan that provides at least one benefit option which 

4 does not consist of health insurance coverage, the applica5 ble authority shall certify such plan as meeting the re6 quirements of this part only if the applicable authority is 

7 satisfied that the applicable requirements of this part are 

8 met (or, upon the date on which the plan is to commence 

9 operations, will be met) with respect to the plan. 

10 ‘‘(c) REQUIREMENTS APPLICABLE TO CERTIFIED

11 PLANS.—An association health plan with respect to which 

12 certification under this part is in effect shall meet the ap13 plicable requirements of this part, effective on the date 

14 of certification (or, if later, on the date on which the plan 

15 is to commence operations). 

16 ‘‘(d) REQUIREMENTS FOR CONTINUED CERTIFI17 CATION.—The applicable authority may provide by regula18 tion for continued certification of association health plans 

19 under this part. 

20 ‘‘(e) CLASS CERTIFICATION FOR FULLY INSURED

21 PLANS.—The applicable authority shall establish a class 

22 certification procedure for association health plans under 

23 which all benefits consist of health insurance coverage. 

24 Under such procedure, the applicable authority shall pro25 vide for the granting of certification under this part to 


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1 the plans in each class of such association health plans 

2 upon appropriate filing under such procedure in connec3 tion with plans in such class and payment of the pre4 scribed fee under section 807(a). 

5 ‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION

6 HEALTH PLANS.—An association health plan which offers 

7 one or more benefit options which do not consist of health 

8 insurance coverage may be certified under this part only 

9 if such plan consists of any of the following: 

10 ‘‘(1) a plan which offered such coverage on the 

11 date of the enactment of the Small Business Health 

12 Fairness Act of 2015, 

13 ‘‘(2) a plan under which the sponsor does not 

14 restrict membership to one or more trades and busi15 nesses or industries and whose eligible participating 

16 employers represent a broad cross-section of trades 

17 and businesses or industries, or 

18 ‘‘(3) a plan whose eligible participating employ19 ers represent one or more trades or businesses, or 

20 one or more industries, consisting of any of the fol21 lowing: agriculture; equipment and automobile deal22 erships; barbering and cosmetology; certified public 

23 accounting practices; child care; construction; dance, 

24 theatrical and orchestra productions; disinfecting 

25 and pest control; financial services; fishing; food 


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1 service establishments; hospitals; labor organiza2 tions; logging; manufacturing (metals); mining; med3 ical and dental practices; medical laboratories; pro4 fessional consulting services; sanitary services; trans5 portation (local and freight); warehousing; whole6 saling/distributing; or any other trade or business or 

7 industry which has been indicated as having average 

8 or above-average risk or health claims experience by 

9 reason of State rate filings, denials of coverage, pro10 posed premium rate levels, or other means dem11 onstrated by such plan in accordance with regula12 tions. 

13 ‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 

14 BOARDS OF TRUSTEES. 

15 ‘‘(a) SPONSOR.—The requirements of this subsection 

16 are met with respect to an association health plan if the 

17 sponsor has met (or is deemed under this part to have 

18 met) the requirements of section 801(b) for a continuous 

19 period of not less than 3 years ending with the date of 

20 the application for certification under this part. 

21 ‘‘(b) BOARD OF TRUSTEES.—The requirements of 

22 this subsection are met with respect to an association 

23 health plan if the following requirements are met: 

24 ‘‘(1) FISCAL CONTROL.—The plan is operated, 

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1 ees which has complete fiscal control over the plan 

2 and which is responsible for all operations of the 

3 plan. 

4 ‘‘(2) RULES OF OPERATION AND FINANCIAL

5 CONTROLS.—The board of trustees has in effect 

6 rules of operation and financial controls, based on a 

7 3-year plan of operation, adequate to carry out the 

8 terms of the plan and to meet all requirements of 

9 this title applicable to the plan. 

10 ‘‘(3) RULES GOVERNING RELATIONSHIP TO

11 PARTICIPATING EMPLOYERS AND TO CONTRAC12 TORS.— 

13 ‘‘(A) BOARD MEMBERSHIP.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clauses (ii) and (iii), the members 

16 of the board of trustees are individuals se17 lected from individuals who are the owners, 

18 officers, directors, or employees of the par19 ticipating employers or who are partners in 

20 the participating employers and actively 

21 participate in the business. 

22 ‘‘(ii) LIMITATION.— 

23 ‘‘(I) GENERAL RULE.—Except as 

24 provided in subclauses (II) and (III), 

25 no such member is an owner, officer, 


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1 director, or employee of, or partner in, 

2 a contract administrator or other 

3 service provider to the plan. 

4 ‘‘(II) LIMITED EXCEPTION FOR

5 PROVIDERS OF SERVICES SOLELY ON

6 BEHALF OF THE SPONSOR.—Officers 

7 or employees of a sponsor which is a 

8 service provider (other than a contract 

9 administrator) to the plan may be 

10 members of the board if they con11 stitute not more than 25 percent of 

12 the membership of the board and they 

13 do not provide services to the plan 

14 other than on behalf of the sponsor. 

15 ‘‘(III) TREATMENT OF PRO16 VIDERS OF MEDICAL CARE.—In the 

17 case of a sponsor which is an associa18 tion whose membership consists pri19 marily of providers of medical care, 

20 subclause (I) shall not apply in the 

21 case of any service provider described 

22 in subclause (I) who is a provider of 

23 medical care under the plan. 

24 ‘‘(iii) CERTAIN PLANS EXCLUDED.— 

25 Clause (i) shall not apply to an association 


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1 health plan which is in existence on the 

2 date of the enactment of the Small Busi3 ness Health Fairness Act of 2015. 

4 ‘‘(B) SOLE AUTHORITY.—The board has 

5 sole authority under the plan to approve appli6 cations for participation in the plan and to con7 tract with a service provider to administer the 

8 day-to-day affairs of the plan. 

9 ‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In 

10 the case of a group health plan which is established and 

11 maintained by a franchiser for a franchise network con12 sisting of its franchisees— 

13 ‘‘(1) the requirements of subsection (a) and sec14 tion 801(a) shall be deemed met if such require15 ments would otherwise be met if the franchiser were 

16 deemed to be the sponsor referred to in section 

17 801(b), such network were deemed to be an associa18 tion described in section 801(b), and each franchisee 

19 were deemed to be a member (of the association and 

20 the sponsor) referred to in section 801(b); and 

21 ‘‘(2) the requirements of section 804(a)(1) shall 

22 be deemed met. 

23 The Secretary may by regulation define for purposes of 

24 this subsection the terms ‘franchiser’, ‘franchise network’, 

25 and ‘franchisee’. 


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1 ‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE2 MENTS. 

3 ‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 

4 requirements of this subsection are met with respect to 

5 an association health plan if, under the terms of the 

6 plan— 

7 ‘‘(1) each participating employer must be— 

8 ‘‘(A) a member of the sponsor, 

9 ‘‘(B) the sponsor, or 

10 ‘‘(C) an affiliated member of the sponsor 

11 with respect to which the requirements of sub12 section (b) are met, 

13 except that, in the case of a sponsor which is a pro14 fessional association or other individual-based asso15 ciation, if at least one of the officers, directors, or 

16 employees of an employer, or at least one of the in17 dividuals who are partners in an employer and who 

18 actively participates in the business, is a member or 

19 such an affiliated member of the sponsor, partici20 pating employers may also include such employer; 

21 and 

22 ‘‘(2) all individuals commencing coverage under 

23 the plan after certification under this part must 

24 be— 

25 ‘‘(A) active or retired owners (including 

26 self-employed individuals), officers, directors, or 


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1 employees of, or partners in, participating em2 ployers; or 

3 ‘‘(B) the beneficiaries of individuals de4 scribed in subparagraph (A). 

5 ‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM6 PLOYEES.—In the case of an association health plan in 

7 existence on the date of the enactment of the Small Busi8 ness Health Fairness Act of 2015, an affiliated member 

9 of the sponsor of the plan may be offered coverage under 

10 the plan as a participating employer only if— 

11 ‘‘(1) the affiliated member was an affiliated 

12 member on the date of certification under this part; 

13 or 

14 ‘‘(2) during the 12-month period preceding the 

15 date of the offering of such coverage, the affiliated 

16 member has not maintained or contributed to a 

17 group health plan with respect to any of its employ18 ees who would otherwise be eligible to participate in 

19 such association health plan. 

20 ‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re21 quirements of this subsection are met with respect to an 

22 association health plan if, under the terms of the plan, 

23 no participating employer may provide health insurance 

24 coverage in the individual market for any employee not 

25 covered under the plan which is similar to the coverage 


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1 contemporaneously provided to employees of the employer 

2 under the plan, if such exclusion of the employee from cov3 erage under the plan is based on a health status-related 

4 factor with respect to the employee and such employee 

5 would, but for such exclusion on such basis, be eligible 

6 for coverage under the plan. 

7 ‘‘(d) PROHIBITION OF DISCRIMINATION AGAINST

8 EMPLOYERS AND EMPLOYEES ELIGIBLE TO PARTICI9 PATE.—The requirements of this subsection are met with 

10 respect to an association health plan if— 

11 ‘‘(1) under the terms of the plan, all employers 

12 meeting the preceding requirements of this section 

13 are eligible to qualify as participating employers for 

14 all geographically available coverage options, unless, 

15 in the case of any such employer, participation or 

16 contribution requirements of the type referred to in 

17 section 2711 of the Public Health Service Act are 

18 not met; 

19 ‘‘(2) upon request, any employer eligible to par20 ticipate is furnished information regarding all cov21 erage options available under the plan; and 

22 ‘‘(3) the applicable requirements of sections 

23 701, 702, and 703 are met with respect to the plan. 


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1 ‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN 

2 DOCUMENTS, CONTRIBUTION RATES, AND 

3 BENEFIT OPTIONS. 

4 ‘‘(a) IN GENERAL.—The requirements of this section 

5 are met with respect to an association health plan if the 

6 following requirements are met: 

7 ‘‘(1) CONTENTS OF GOVERNING INSTRU8 MENTS.—The instruments governing the plan in9 clude a written instrument, meeting the require10 ments of an instrument required under section 

11 402(a)(1), which— 

12 ‘‘(A) provides that the board of trustees 

13 serves as the named fiduciary required for plans 

14 under section 402(a)(1) and serves in the ca15 pacity of a plan administrator (referred to in 

16 section 3(16)(A)); 

17 ‘‘(B) provides that the sponsor of the plan 

18 is to serve as plan sponsor (referred to in sec19 tion 3(16)(B)); and 

20 ‘‘(C) incorporates the requirements of sec21 tion 806. 

22 ‘‘(2) CONTRIBUTION RATES MUST BE NON23 DISCRIMINATORY.— 

24 ‘‘(A) The contribution rates for any par25 ticipating small employer do not vary on the 

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1 tion to employees of such employer or their 

2 beneficiaries and do not vary on the basis of the 

3 type of business or industry in which such em4 ployer is engaged. 

5 ‘‘(B) Nothing in this title or any other pro6 vision of law shall be construed to preclude an 

7 association health plan, or a health insurance 

8 issuer offering health insurance coverage in 

9 connection with an association health plan, 

10 from— 

11 ‘‘(i) setting contribution rates based 

12 on the claims experience of the plan; or 

13 ‘‘(ii) varying contribution rates for 

14 small employers in a State to the extent 

15 that such rates could vary using the same 

16 methodology employed in such State for 

17 regulating premium rates in the small 

18 group market with respect to health insur19 ance coverage offered in connection with 

20 bona fide associations (within the meaning 

21 of section 2791(d)(3) of the Public Health 

22 Service Act), 

23 subject to the requirements of section 702(b) 

24 relating to contribution rates. 


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1 ‘‘(3) FLOOR FOR NUMBER OF COVERED INDI2 VIDUALS WITH RESPECT TO CERTAIN PLANS.—If 

3 any benefit option under the plan does not consist 

4 of health insurance coverage, the plan has as of the 

5 beginning of the plan year not fewer than 1,000 par6 ticipants and beneficiaries. 

7 ‘‘(4) MARKETING REQUIREMENTS.— 

8 ‘‘(A) IN GENERAL.—If a benefit option 

9 which consists of health insurance coverage is 

10 offered under the plan, State-licensed insurance 

11 agents shall be used to distribute to small em12 ployers coverage which does not consist of 

13 health insurance coverage in a manner com14 parable to the manner in which such agents are 

15 used to distribute health insurance coverage. 

16 ‘‘(B) STATE-LICENSED INSURANCE

17 AGENTS.—For purposes of subparagraph (A), 

18 the term ‘State-licensed insurance agents’ 

19 means one or more agents who are licensed in 

20 a State and are subject to the laws of such 

21 State relating to licensure, qualification, test22 ing, examination, and continuing education of 

23 persons authorized to offer, sell, or solicit 

24 health insurance coverage in such State. 


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1 ‘‘(5) REGULATORY REQUIREMENTS.—Such 

2 other requirements as the applicable authority deter3 mines are necessary to carry out the purposes of this 

4 part, which shall be prescribed by the applicable au5 thority by regulation. 

6 ‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO

7 DESIGN BENEFIT OPTIONS.—Subject to section 514(d), 

8 nothing in this part or any provision of State law (as de9 fined in section 514(c)(1)) shall be construed to preclude 

10 an association health plan, or a health insurance issuer 

11 offering health insurance coverage in connection with an 

12 association health plan, from exercising its sole discretion 

13 in selecting the specific items and services consisting of 

14 medical care to be included as benefits under such plan 

15 or coverage, except (subject to section 514) in the case 

16 of (1) any law to the extent that it is not preempted under 

17 section 731(a)(1) with respect to matters governed by sec18 tion 711, 712, or 713, or (2) any law of the State with 

19 which filing and approval of a policy type offered by the 

20 plan was initially obtained to the extent that such law pro21 hibits an exclusion of a specific disease from such cov22 erage. 


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1 ‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS 

2 FOR SOLVENCY FOR PLANS PROVIDING 

3 HEALTH BENEFITS IN ADDITION TO HEALTH 

4 INSURANCE COVERAGE. 

5 ‘‘(a) IN GENERAL.—The requirements of this section 

6 are met with respect to an association health plan if— 

7 ‘‘(1) the benefits under the plan consist solely 

8 of health insurance coverage; or 

9 ‘‘(2) if the plan provides any additional benefit 

10 options which do not consist of health insurance cov11 erage, the plan— 

12 ‘‘(A) establishes and maintains reserves 

13 with respect to such additional benefit options, 

14 in amounts recommended by the qualified 

15 health actuary, consisting of— 

16 ‘‘(i) a reserve sufficient for unearned 

17 contributions; 

18 ‘‘(ii) a reserve sufficient for benefit li19 abilities which have been incurred, which 

20 have not been satisfied, and for which risk 

21 of loss has not yet been transferred, and 

22 for expected administrative costs with re23 spect to such benefit liabilities; 

24 ‘‘(iii) a reserve sufficient for any other 

25 obligations of the plan; and 


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1 ‘‘(iv) a reserve sufficient for a margin 

2 of error and other fluctuations, taking into 

3 account the specific circumstances of the 

4 plan; and 

5 ‘‘(B) establishes and maintains aggregate 

6 and specific excess/stop loss insurance and sol7 vency indemnification, with respect to such ad8 ditional benefit options for which risk of loss 

9 has not yet been transferred, as follows: 

10 ‘‘(i) The plan shall secure aggregate 

11 excess/stop loss insurance for the plan with 

12 an attachment point which is not greater 

13 than 125 percent of expected gross annual 

14 claims. The applicable authority may by 

15 regulation provide for upward adjustments 

16 in the amount of such percentage in speci17 fied circumstances in which the plan spe18 cifically provides for and maintains re19 serves in excess of the amounts required 

20 under subparagraph (A). 

21 ‘‘(ii) The plan shall secure specific ex22 cess/stop loss insurance for the plan with 

23 an attachment point which is at least equal 

24 to an amount recommended by the plan’s 

25 qualified health actuary. The applicable 


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1 authority may by regulation provide for ad2 justments in the amount of such insurance 

3 in specified circumstances in which the 

4 plan specifically provides for and maintains 

5 reserves in excess of the amounts required 

6 under subparagraph (A). 

7 ‘‘(iii) The plan shall secure indem8 nification insurance for any claims which 

9 the plan is unable to satisfy by reason of 

10 a plan termination. 

11 Any person issuing to a plan insurance described in clause 

12 (i), (ii), or (iii) of subparagraph (B) shall notify the Sec13 retary of any failure of premium payment meriting can14 cellation of the policy prior to undertaking such a cancella15 tion. Any regulations prescribed by the applicable author16 ity pursuant to clause (i) or (ii) of subparagraph (B) may 

17 allow for such adjustments in the required levels of excess/ 

18 stop loss insurance as the qualified health actuary may 

19 recommend, taking into account the specific circumstances 

20 of the plan. 

21 ‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS

22 RESERVES.—In the case of any association health plan de23 scribed in subsection (a)(2), the requirements of this sub24 section are met if the plan establishes and maintains sur25 plus in an amount at least equal to— 


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1 ‘‘(1) $500,000, or 

2 ‘‘(2) such greater amount (but not greater than 

3 $2,000,000) as may be set forth in regulations pre4 scribed by the applicable authority, considering the 

5 level of aggregate and specific excess/stop loss insur6 ance provided with respect to such plan and other 

7 factors related to solvency risk, such as the plan’s 

8 projected levels of participation or claims, the nature 

9 of the plan’s liabilities, and the types of assets avail10 able to assure that such liabilities are met. 

11 ‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of 

12 any association health plan described in subsection (a)(2), 

13 the applicable authority may provide such additional re14 quirements relating to reserves, excess/stop loss insurance, 

15 and indemnification insurance as the applicable authority 

16 considers appropriate. Such requirements may be provided 

17 by regulation with respect to any such plan or any class 

18 of such plans. 

19 ‘‘(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSUR20 ANCE.—The applicable authority may provide for adjust21 ments to the levels of reserves otherwise required under 

22 subsections (a) and (b) with respect to any plan or class 

23 of plans to take into account excess/stop loss insurance 

24 provided with respect to such plan or plans. 


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1 ‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The 

2 applicable authority may permit an association health plan 

3 described in subsection (a)(2) to substitute, for all or part 

4 of the requirements of this section (except subsection 

5 (a)(2)(B)(iii)), such security, guarantee, hold-harmless ar6 rangement, or other financial arrangement as the applica7 ble authority determines to be adequate to enable the plan 

8 to fully meet all its financial obligations on a timely basis 

9 and is otherwise no less protective of the interests of par10 ticipants and beneficiaries than the requirements for 

11 which it is substituted. The applicable authority may take 

12 into account, for purposes of this subsection, evidence pro13 vided by the plan or sponsor which demonstrates an as14 sumption of liability with respect to the plan. Such evi15 dence may be in the form of a contract of indemnification, 

16 lien, bonding, insurance, letter of credit, recourse under 

17 applicable terms of the plan in the form of assessments 

18 of participating employers, security, or other financial ar19 rangement. 

20 ‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT

21 OF BENEFITS BY CERTAIN PLANS IN DISTRESS.— 

22 ‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSO23 CIATION HEALTH PLAN FUND.— 

24 ‘‘(A) IN GENERAL.—In the case of an as25 sociation health plan described in subsection 


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1 (a)(2), the requirements of this subsection are 

2 met if the plan makes payments into the Asso3 ciation Health Plan Fund under this subpara4 graph when they are due. Such payments shall 

5 consist of annual payments in the amount of 

6 $5,000, and, in addition to such annual pay7 ments, such supplemental payments as the Sec8 retary may determine to be necessary under 

9 paragraph (2). Payments under this paragraph 

10 are payable to the Fund at the time determined 

11 by the Secretary. Initial payments are due in 

12 advance of certification under this part. Pay13 ments shall continue to accrue until a plan’s as14 sets are distributed pursuant to a termination 

15 procedure. 

16 ‘‘(B) PENALTIES FOR FAILURE TO MAKE

17 PAYMENTS.—If any payment is not made by a 

18 plan when it is due, a late payment charge of 

19 not more than 100 percent of the payment 

20 which was not timely paid shall be payable by 

21 the plan to the Fund. 

22 ‘‘(C) CONTINUED DUTY OF THE SEC23 RETARY.—The Secretary shall not cease to 

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1 count of the failure of a plan to pay any pay2 ment when due. 

3 ‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE

4 EXCESS/STOP LOSS INSURANCE COVERAGE AND IN5 DEMNIFICATION INSURANCE COVERAGE FOR CER6 TAIN PLANS.—In any case in which the applicable 

7 authority determines that there is, or that there is 

8 reason to believe that there will be: (A) a failure to 

9 take necessary corrective actions under section 

10 809(a) with respect to an association health plan de11 scribed in subsection (a)(2); or (B) a termination of 

12 such a plan under section 809(b) or 810(b)(8) (and, 

13 if the applicable authority is not the Secretary, cer14 tifies such determination to the Secretary), the Sec15 retary shall determine the amounts necessary to 

16 make payments to an insurer (designated by the 

17 Secretary) to maintain in force excess/stop loss in18 surance coverage or indemnification insurance cov19 erage for such plan, if the Secretary determines that 

20 there is a reasonable expectation that, without such 

21 payments, claims would not be satisfied by reason of 

22 termination of such coverage. The Secretary shall, to 

23 the extent provided in advance in appropriation 

24 Acts, pay such amounts so determined to the insurer 

25 designated by the Secretary. 


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1 ‘‘(3) ASSOCIATION HEALTH PLAN FUND.— 

2 ‘‘(A) IN GENERAL.—There is established 

3 on the books of the Treasury a fund to be 

4 known as the ‘Association Health Plan Fund’. 

5 The Fund shall be available for making pay6 ments pursuant to paragraph (2). The Fund 

7 shall be credited with payments received pursu8 ant to paragraph (1)(A), penalties received pur9 suant to paragraph (1)(B), and earnings on in10 vestments of amounts of the Fund under sub11 paragraph (B). 

12 ‘‘(B) INVESTMENT.—Whenever the Sec13 retary determines that the moneys of the fund 

14 are in excess of current needs, the Secretary 

15 may request the investment of such amounts as 

16 the Secretary determines advisable by the Sec17 retary of the Treasury in obligations issued or 

18 guaranteed by the United States. 

19 ‘‘(g) EXCESS/STOP LOSS INSURANCE.—For purposes 

20 of this section— 

21 ‘‘(1) AGGREGATE EXCESS/STOP LOSS INSUR22 ANCE.—The term ‘aggregate excess/stop loss insur23 ance’ means, in connection with an association 

24 health plan, a contract— 


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1 ‘‘(A) under which an insurer (meeting such 

2 minimum standards as the applicable authority 

3 may prescribe by regulation) provides for pay4 ment to the plan with respect to aggregate 

5 claims under the plan in excess of an amount 

6 or amounts specified in such contract; 

7 ‘‘(B) which is guaranteed renewable; and 

8 ‘‘(C) which allows for payment of pre9 miums by any third party on behalf of the in10 sured plan. 

11 ‘‘(2) SPECIFIC EXCESS/STOP LOSS INSUR12 ANCE.—The term ‘specific excess/stop loss insur13 ance’ means, in connection with an association 

14 health plan, a contract— 

15 ‘‘(A) under which an insurer (meeting such 

16 minimum standards as the applicable authority 

17 may prescribe by regulation) provides for pay18 ment to the plan with respect to claims under 

19 the plan in connection with a covered individual 

20 in excess of an amount or amounts specified in 

21 such contract in connection with such covered 

22 individual; 

23 ‘‘(B) which is guaranteed renewable; and 


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1 ‘‘(C) which allows for payment of pre2 miums by any third party on behalf of the in3 sured plan. 

4 ‘‘(h) INDEMNIFICATION INSURANCE.—For purposes 

5 of this section, the term ‘indemnification insurance’ 

6 means, in connection with an association health plan, a 

7 contract— 

8 ‘‘(1) under which an insurer (meeting such min9 imum standards as the applicable authority may pre10 scribe by regulation) provides for payment to the 

11 plan with respect to claims under the plan which the 

12 plan is unable to satisfy by reason of a termination 

13 pursuant to section 809(b) (relating to mandatory 

14 termination); 

15 ‘‘(2) which is guaranteed renewable and 

16 noncancellable for any reason (except as the applica17 ble authority may prescribe by regulation); and 

18 ‘‘(3) which allows for payment of premiums by 

19 any third party on behalf of the insured plan. 

20 ‘‘(i) RESERVES.—For purposes of this section, the 

21 term ‘reserves’ means, in connection with an association 

22 health plan, plan assets which meet the fiduciary stand23 ards under part 4 and such additional requirements re24 garding liquidity as the applicable authority may prescribe 

25 by regulation. 


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1 ‘‘(j) SOLVENCY STANDARDS WORKING GROUP.— 

2 ‘‘(1) IN GENERAL.—Within 90 days after the 

3 date of the enactment of the Small Business Health 

4 Fairness Act of 2015, the applicable authority shall 

5 establish a Solvency Standards Working Group. In 

6 prescribing the initial regulations under this section, 

7 the applicable authority shall take into account the 

8 recommendations of such Working Group. 

9 ‘‘(2) MEMBERSHIP.—The Working Group shall 

10 consist of not more than 15 members appointed by 

11 the applicable authority. The applicable authority 

12 shall include among persons invited to membership 

13 on the Working Group at least one of each of the 

14 following: 

15 ‘‘(A) A representative of the National As16 sociation of Insurance Commissioners. 

17 ‘‘(B) A representative of the American 

18 Academy of Actuaries. 

19 ‘‘(C) A representative of the State govern20 ments, or their interests. 

21 ‘‘(D) A representative of existing self-in22 sured arrangements, or their interests. 

23 ‘‘(E) A representative of associations of 

24 the type referred to in section 801(b)(1), or 

25 their interests. 


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1 ‘‘(F) A representative of multiemployer 

2 plans that are group health plans, or their in3 terests. 

4 ‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE5 LATED REQUIREMENTS. 

6 ‘‘(a) FILING FEE.—Under the procedure prescribed 

7 pursuant to section 802(a), an association health plan 

8 shall pay to the applicable authority at the time of filing 

9 an application for certification under this part a filing fee 

10 in the amount of $5,000, which shall be available in the 

11 case of the Secretary, to the extent provided in appropria12 tion Acts, for the sole purpose of administering the certifi13 cation procedures applicable with respect to association 

14 health plans. 

15 ‘‘(b) INFORMATION TO BE INCLUDED IN APPLICA16 TION FOR CERTIFICATION.—An application for certifi17 cation under this part meets the requirements of this sec18 tion only if it includes, in a manner and form which shall 

19 be prescribed by the applicable authority by regulation, at 

20 least the following information: 

21 ‘‘(1) IDENTIFYING INFORMATION.—The names 

22 and addresses of— 

23 ‘‘(A) the sponsor; and 

24 ‘‘(B) the members of the board of trustees 

25 of the plan. 


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1 ‘‘(2) STATES IN WHICH PLAN INTENDS TO DO

2 BUSINESS.—The States in which participants and 

3 beneficiaries under the plan are to be located and 

4 the number of them expected to be located in each 

5 such State. 

6 ‘‘(3) BONDING REQUIREMENTS.—Evidence pro7 vided by the board of trustees that the bonding re8 quirements of section 412 will be met as of the date 

9 of the application or (if later) commencement of op10 erations. 

11 ‘‘(4) PLAN DOCUMENTS.—A copy of the docu12 ments governing the plan (including any bylaws and 

13 trust agreements), the summary plan description, 

14 and other material describing the benefits that will 

15 be provided to participants and beneficiaries under 

16 the plan. 

17 ‘‘(5) AGREEMENTS WITH SERVICE PRO18 VIDERS.—A copy of any agreements between the 

19 plan and contract administrators and other service 

20 providers. 

21 ‘‘(6) FUNDING REPORT.—In the case of asso22 ciation health plans providing benefits options in ad23 dition to health insurance coverage, a report setting 

24 forth information with respect to such additional 

25 benefit options determined as of a date within the 


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1 120-day period ending with the date of the applica2 tion, including the following: 

3 ‘‘(A) RESERVES.—A statement, certified 

4 by the board of trustees of the plan, and a 

5 statement of actuarial opinion, signed by a 

6 qualified health actuary, that all applicable re7 quirements of section 806 are or will be met in 

8 accordance with regulations which the applica9 ble authority shall prescribe. 

10 ‘‘(B) ADEQUACY OF CONTRIBUTION

11 RATES.—A statement of actuarial opinion, 

12 signed by a qualified health actuary, which sets 

13 forth a description of the extent to which con14 tribution rates are adequate to provide for the 

15 payment of all obligations and the maintenance 

16 of required reserves under the plan for the 12- 

17 month period beginning with such date within 

18 such 120-day period, taking into account the 

19 expected coverage and experience of the plan. If 

20 the contribution rates are not fully adequate, 

21 the statement of actuarial opinion shall indicate 

22 the extent to which the rates are inadequate 

23 and the changes needed to ensure adequacy. 

24 ‘‘(C) CURRENT AND PROJECTED VALUE OF

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1 tuarial opinion signed by a qualified health ac2 tuary, which sets forth the current value of the 

3 assets and liabilities accumulated under the 

4 plan and a projection of the assets, liabilities, 

5 income, and expenses of the plan for the 12- 

6 month period referred to in subparagraph (B). 

7 The income statement shall identify separately 

8 the plan’s administrative expenses and claims. 

9 ‘‘(D) COSTS OF COVERAGE TO BE

10 CHARGED AND OTHER EXPENSES.—A state11 ment of the costs of coverage to be charged, in12 cluding an itemization of amounts for adminis13 tration, reserves, and other expenses associated 

14 with the operation of the plan. 

15 ‘‘(E) OTHER INFORMATION.—Any other 

16 information as may be determined by the appli17 cable authority, by regulation, as necessary to 

18 carry out the purposes of this part. 

19 ‘‘(c) FILING NOTICE OF CERTIFICATION WITH

20 STATES.—A certification granted under this part to an 

21 association health plan shall not be effective unless written 

22 notice of such certification is filed with the applicable 

23 State authority of each State in which at least 25 percent 

24 of the participants and beneficiaries under the plan are 

25 located. For purposes of this subsection, an individual 


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1 shall be considered to be located in the State in which a 

2 known address of such individual is located or in which 

3 such individual is employed. 

4 ‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 

5 of any association health plan certified under this part, 

6 descriptions of material changes in any information which 

7 was required to be submitted with the application for the 

8 certification under this part shall be filed in such form 

9 and manner as shall be prescribed by the applicable au10 thority by regulation. The applicable authority may re11 quire by regulation prior notice of material changes with 

12 respect to specified matters which might serve as the basis 

13 for suspension or revocation of the certification. 

14 ‘‘(e) REPORTING REQUIREMENTS FOR CERTAIN AS15 SOCIATION HEALTH PLANS.—An association health plan 

16 certified under this part which provides benefit options in 

17 addition to health insurance coverage for such plan year 

18 shall meet the requirements of section 103 by filing an 

19 annual report under such section which shall include infor20 mation described in subsection (b)(6) with respect to the 

21 plan year and, notwithstanding section 104(a)(1)(A), shall 

22 be filed with the applicable authority not later than 90 

23 days after the close of the plan year (or on such later date 

24 as may be prescribed by the applicable authority). The apVerDate Sep 11 2014 04:33 May 20, 2015 Jkt 049200 PO 00000 Frm 00118 Fmt 6652 Sfmt 6201 E:\BILLS\H2300.IH H2300

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1 plicable authority may require by regulation such interim 

2 reports as it considers appropriate. 

3 ‘‘(f) ENGAGEMENT OF QUALIFIED HEALTH ACTU4 ARY.—The board of trustees of each association health 

5 plan which provides benefits options in addition to health 

6 insurance coverage and which is applying for certification 

7 under this part or is certified under this part shall engage, 

8 on behalf of all participants and beneficiaries, a qualified 

9 health actuary who shall be responsible for the preparation 

10 of the materials comprising information necessary to be 

11 submitted by a qualified health actuary under this part. 

12 The qualified health actuary shall utilize such assumptions 

13 and techniques as are necessary to enable such actuary 

14 to form an opinion as to whether the contents of the mat15 ters reported under this part— 

16 ‘‘(1) are in the aggregate reasonably related to 

17 the experience of the plan and to reasonable expecta18 tions; and 

19 ‘‘(2) represent such actuary’s best estimate of 

20 anticipated experience under the plan. 

21 The opinion by the qualified health actuary shall be made 

22 with respect to, and shall be made a part of, the annual 

23 report. 


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1 ‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER2 MINATION. 

3 ‘‘Except as provided in section 809(b), an association 

4 health plan which is or has been certified under this part 

5 may terminate (upon or at any time after cessation of ac6 cruals in benefit liabilities) only if the board of trustees, 

7 not less than 60 days before the proposed termination 

8 date— 

9 ‘‘(1) provides to the participants and bene10 ficiaries a written notice of intent to terminate stat11 ing that such termination is intended and the pro12 posed termination date; 

13 ‘‘(2) develops a plan for winding up the affairs 

14 of the plan in connection with such termination in 

15 a manner which will result in timely payment of all 

16 benefits for which the plan is obligated; and 

17 ‘‘(3) submits such plan in writing to the appli18 cable authority. 

19 Actions required under this section shall be taken in such 

20 form and manner as may be prescribed by the applicable 

21 authority by regulation. 

22 ‘‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMI23 NATION. 

24 ‘‘(a) ACTIONS TO AVOID DEPLETION OF RE25 SERVES.—An association health plan which is certified 

26 under this part and which provides benefits other than 


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1 health insurance coverage shall continue to meet the re2 quirements of section 806, irrespective of whether such 

3 certification continues in effect. The board of trustees of 

4 such plan shall determine quarterly whether the require5 ments of section 806 are met. In any case in which the 

6 board determines that there is reason to believe that there 

7 is or will be a failure to meet such requirements, or the 

8 applicable authority makes such a determination and so 

9 notifies the board, the board shall immediately notify the 

10 qualified health actuary engaged by the plan, and such 

11 actuary shall, not later than the end of the next following 

12 month, make such recommendations to the board for cor13 rective action as the actuary determines necessary to en14 sure compliance with section 806. Not later than 30 days 

15 after receiving from the actuary recommendations for cor16 rective actions, the board shall notify the applicable au17 thority (in such form and manner as the applicable au18 thority may prescribe by regulation) of such recommenda19 tions of the actuary for corrective action, together with 

20 a description of the actions (if any) that the board has 

21 taken or plans to take in response to such recommenda22 tions. The board shall thereafter report to the applicable 

23 authority, in such form and frequency as the applicable 

24 authority may specify to the board, regarding corrective 


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1 action taken by the board until the requirements of section 

2 806 are met. 

3 ‘‘(b) MANDATORY TERMINATION.—In any case in 

4 which— 

5 ‘‘(1) the applicable authority has been notified 

6 under subsection (a) (or by an issuer of excess/stop 

7 loss insurance or indemnity insurance pursuant to 

8 section 806(a)) of a failure of an association health 

9 plan which is or has been certified under this part 

10 and is described in section 806(a)(2) to meet the re11 quirements of section 806 and has not been notified 

12 by the board of trustees of the plan that corrective 

13 action has restored compliance with such require14 ments; and 

15 ‘‘(2) the applicable authority determines that 

16 there is a reasonable expectation that the plan will 

17 continue to fail to meet the requirements of section 

18 806, 

19 the board of trustees of the plan shall, at the direction 

20 of the applicable authority, terminate the plan and, in the 

21 course of the termination, take such actions as the appli22 cable authority may require, including satisfying any 

23 claims referred to in section 806(a)(2)(B)(iii) and recov24 ering for the plan any liability under subsection 

25 (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 


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1 that the affairs of the plan will be, to the maximum extent 

2 possible, wound up in a manner which will result in timely 

3 provision of all benefits for which the plan is obligated. 

4 ‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL5 VENT ASSOCIATION HEALTH PLANS PRO6 VIDING HEALTH BENEFITS IN ADDITION TO 

7 HEALTH INSURANCE COVERAGE. 

8 ‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR

9 INSOLVENT PLANS.—Whenever the Secretary determines 

10 that an association health plan which is or has been cer11 tified under this part and which is described in section 

12 806(a)(2) will be unable to provide benefits when due or 

13 is otherwise in a financially hazardous condition, as shall 

14 be defined by the Secretary by regulation, the Secretary 

15 shall, upon notice to the plan, apply to the appropriate 

16 United States district court for appointment of the Sec17 retary as trustee to administer the plan for the duration 

18 of the insolvency. The plan may appear as a party and 

19 other interested persons may intervene in the proceedings 

20 at the discretion of the court. The court shall appoint such 

21 Secretary trustee if the court determines that the trustee22 ship is necessary to protect the interests of the partici23 pants and beneficiaries or providers of medical care or to 

24 avoid any unreasonable deterioration of the financial con25 dition of the plan. The trusteeship of such Secretary shall 


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1 continue until the conditions described in the first sen2 tence of this subsection are remedied or the plan is termi3 nated. 

4 ‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon 

5 appointment as trustee under subsection (a), shall have 

6 the power— 

7 ‘‘(1) to do any act authorized by the plan, this 

8 title, or other applicable provisions of law to be done 

9 by the plan administrator or any trustee of the plan; 

10 ‘‘(2) to require the transfer of all (or any part) 

11 of the assets and records of the plan to the Sec12 retary as trustee; 

13 ‘‘(3) to invest any assets of the plan which the 

14 Secretary holds in accordance with the provisions of 

15 the plan, regulations prescribed by the Secretary, 

16 and applicable provisions of law; 

17 ‘‘(4) to require the sponsor, the plan adminis18 trator, any participating employer, and any employee 

19 organization representing plan participants to fur20 nish any information with respect to the plan which 

21 the Secretary as trustee may reasonably need in 

22 order to administer the plan; 

23 ‘‘(5) to collect for the plan any amounts due the 

24 plan and to recover reasonable expenses of the trust25 eeship; 


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1 ‘‘(6) to commence, prosecute, or defend on be2 half of the plan any suit or proceeding involving the 

3 plan; 

4 ‘‘(7) to issue, publish, or file such notices, state5 ments, and reports as may be required by the Sec6 retary by regulation or required by any order of the 

7 court; 

8 ‘‘(8) to terminate the plan (or provide for its 

9 termination in accordance with section 809(b)) and 

10 liquidate the plan assets, to restore the plan to the 

11 responsibility of the sponsor, or to continue the 

12 trusteeship; 

13 ‘‘(9) to provide for the enrollment of plan par14 ticipants and beneficiaries under appropriate cov15 erage options; and 

16 ‘‘(10) to do such other acts as may be nec17 essary to comply with this title or any order of the 

18 court and to protect the interests of plan partici19 pants and beneficiaries and providers of medical 

20 care. 

21 ‘‘(c) NOTICE OF APPOINTMENT.—As soon as prac22 ticable after the Secretary’s appointment as trustee, the 

23 Secretary shall give notice of such appointment to— 

24 ‘‘(1) the sponsor and plan administrator; 

25 ‘‘(2) each participant; 


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1 ‘‘(3) each participating employer; and 

2 ‘‘(4) if applicable, each employee organization 

3 which, for purposes of collective bargaining, rep4 resents plan participants. 

5 ‘‘(d) ADDITIONAL DUTIES.—Except to the extent in6 consistent with the provisions of this title, or as may be 

7 otherwise ordered by the court, the Secretary, upon ap8 pointment as trustee under this section, shall be subject 

9 to the same duties as those of a trustee under section 704 

10 of title 11, United States Code, and shall have the duties 

11 of a fiduciary for purposes of this title. 

12 ‘‘(e) OTHER PROCEEDINGS.—An application by the 

13 Secretary under this subsection may be filed notwith14 standing the pendency in the same or any other court of 

15 any bankruptcy, mortgage foreclosure, or equity receiver16 ship proceeding, or any proceeding to reorganize, conserve, 

17 or liquidate such plan or its property, or any proceeding 

18 to enforce a lien against property of the plan. 

19 ‘‘(f) JURISDICTION OF COURT.— 

20 ‘‘(1) IN GENERAL.—Upon the filing of an appli21 cation for the appointment as trustee or the issuance 

22 of a decree under this section, the court to which the 

23 application is made shall have exclusive jurisdiction 

24 of the plan involved and its property wherever lo25 cated with the powers, to the extent consistent with 


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1 the purposes of this section, of a court of the United 

2 States having jurisdiction over cases under chapter 

3 11 of title 11, United States Code. Pending an adju4 dication under this section such court shall stay, and 

5 upon appointment by it of the Secretary as trustee, 

6 such court shall continue the stay of, any pending 

7 mortgage foreclosure, equity receivership, or other 

8 proceeding to reorganize, conserve, or liquidate the 

9 plan, the sponsor, or property of such plan or spon10 sor, and any other suit against any receiver, conser11 vator, or trustee of the plan, the sponsor, or prop12 erty of the plan or sponsor. Pending such adjudica13 tion and upon the appointment by it of the Sec14 retary as trustee, the court may stay any proceeding 

15 to enforce a lien against property of the plan or the 

16 sponsor or any other suit against the plan or the 

17 sponsor. 

18 ‘‘(2) VENUE.—An action under this section 

19 may be brought in the judicial district where the 

20 sponsor or the plan administrator resides or does 

21 business or where any asset of the plan is situated. 

22 A district court in which such action is brought may 

23 issue process with respect to such action in any 

24 other judicial district. 


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1 ‘‘(g) PERSONNEL.—In accordance with regulations 

2 which shall be prescribed by the Secretary, the Secretary 

3 shall appoint, retain, and compensate accountants, actu4 aries, and other professional service personnel as may be 

5 necessary in connection with the Secretary’s service as 

6 trustee under this section. 

7 ‘‘SEC. 811. STATE ASSESSMENT AUTHORITY. 

8 ‘‘(a) IN GENERAL.—Notwithstanding section 514, a 

9 State may impose by law a contribution tax on an associa10 tion health plan described in section 806(a)(2), if the plan 

11 commenced operations in such State after the date of the 

12 enactment of the Small Business Health Fairness Act of 

13 2015. 

14 ‘‘(b) CONTRIBUTION TAX.—For purposes of this sec15 tion, the term ‘contribution tax’ imposed by a State on 

16 an association health plan means any tax imposed by such 

17 State if— 

18 ‘‘(1) such tax is computed by applying a rate to 

19 the amount of premiums or contributions, with re20 spect to individuals covered under the plan who are 

21 residents of such State, which are received by the 

22 plan from participating employers located in such 

23 State or from such individuals; 

24 ‘‘(2) the rate of such tax does not exceed the 

25 rate of any tax imposed by such State on premiums 


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1 or contributions received by insurers or health main2 tenance organizations for health insurance coverage 

3 offered in such State in connection with a group 

4 health plan; 

5 ‘‘(3) such tax is otherwise nondiscriminatory; 

6 and 

7 ‘‘(4) the amount of any such tax assessed on 

8 the plan is reduced by the amount of any tax or as9 sessment otherwise imposed by the State on pre10 miums, contributions, or both received by insurers or 

11 health maintenance organizations for health insur12 ance coverage, aggregate excess/stop loss insurance 

13 (as defined in section 806(g)(1)), specific excess/stop 

14 loss insurance (as defined in section 806(g)(2)), 

15 other insurance related to the provision of medical 

16 care under the plan, or any combination thereof pro17 vided by such insurers or health maintenance organi18 zations in such State in connection with such plan. 

19 ‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION. 

20 ‘‘(a) DEFINITIONS.—For purposes of this part— 

21 ‘‘(1) GROUP HEALTH PLAN.—The term ‘group 

22 health plan’ has the meaning provided in section 

23 733(a)(1) (after applying subsection (b) of this sec24 tion). 


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1 ‘‘(2) MEDICAL CARE.—The term ‘medical care’ 

2 has the meaning provided in section 733(a)(2). 

3 ‘‘(3) HEALTH INSURANCE COVERAGE.—The 

4 term ‘health insurance coverage’ has the meaning 

5 provided in section 733(b)(1). 

6 ‘‘(4) HEALTH INSURANCE ISSUER.—The term 

7 ‘health insurance issuer’ has the meaning provided 

8 in section 733(b)(2). 

9 ‘‘(5) APPLICABLE AUTHORITY.—The term ‘ap10 plicable authority’ means the Secretary, except that, 

11 in connection with any exercise of the Secretary’s 

12 authority regarding which the Secretary is required 

13 under section 506(d) to consult with a State, such 

14 term means the Secretary, in consultation with such 

15 State. 

16 ‘‘(6) HEALTH STATUS-RELATED FACTOR.—The 

17 term ‘health status-related factor’ has the meaning 

18 provided in section 733(d)(2). 

19 ‘‘(7) INDIVIDUAL MARKET.— 

20 ‘‘(A) IN GENERAL.—The term ‘individual 

21 market’ means the market for health insurance 

22 coverage offered to individuals other than in 

23 connection with a group health plan. 

24 ‘‘(B) TREATMENT OF VERY SMALL

25 GROUPS.— 


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1 ‘‘(i) IN GENERAL.—Subject to clause 

2 (ii), such term includes coverage offered in 

3 connection with a group health plan that 

4 has fewer than 2 participants as current 

5 employees or participants described in sec6 tion 732(d)(3) on the first day of the plan 

7 year. 

8 ‘‘(ii) STATE EXCEPTION.—Clause (i) 

9 shall not apply in the case of health insur10 ance coverage offered in a State if such 

11 State regulates the coverage described in 

12 such clause in the same manner and to the 

13 same extent as coverage in the small group 

14 market (as defined in section 2791(e)(5) of 

15 the Public Health Service Act) is regulated 

16 by such State. 

17 ‘‘(8) PARTICIPATING EMPLOYER.—The term 

18 ‘participating employer’ means, in connection with 

19 an association health plan, any employer, if any indi20 vidual who is an employee of such employer, a part21 ner in such employer, or a self-employed individual 

22 who is such employer (or any dependent, as defined 

23 under the terms of the plan, of such individual) is 

24 or was covered under such plan in connection with 

25 the status of such individual as such an employee, 


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1 partner, or self-employed individual in relation to the 

2 plan. 

3 ‘‘(9) APPLICABLE STATE AUTHORITY.—The 

4 term ‘applicable State authority’ means, with respect 

5 to a health insurance issuer in a State, the State in6 surance commissioner or official or officials des7 ignated by the State to enforce the requirements of 

8 title XXVII of the Public Health Service Act for the 

9 State involved with respect to such issuer. 

10 ‘‘(10) QUALIFIED HEALTH ACTUARY.—The 

11 term ‘qualified health actuary’ means an individual 

12 who is a member of the American Academy of Actu13 aries with expertise in health care. 

14 ‘‘(11) AFFILIATED MEMBER.—The term ‘affili15 ated member’ means, in connection with a sponsor— 

16 ‘‘(A) a person who is otherwise eligible to 

17 be a member of the sponsor but who elects an 

18 affiliated status with the sponsor, 

19 ‘‘(B) in the case of a sponsor with mem20 bers which consist of associations, a person who 

21 is a member of any such association and elects 

22 an affiliated status with the sponsor, or 

23 ‘‘(C) in the case of an association health 

24 plan in existence on the date of the enactment 

25 of the Small Business Health Fairness Act of 


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1 2015, a person eligible to be a member of the 

2 sponsor or one of its member associations. 

3 ‘‘(12) LARGE EMPLOYER.—The term ‘large em4 ployer’ means, in connection with a group health 

5 plan with respect to a plan year, an employer who 

6 employed an average of at least 51 employees on 

7 business days during the preceding calendar year 

8 and who employs at least 2 employees on the first 

9 day of the plan year. 

10 ‘‘(13) SMALL EMPLOYER.—The term ‘small em11 ployer’ means, in connection with a group health 

12 plan with respect to a plan year, an employer who 

13 is not a large employer. 

14 ‘‘(b) RULES OF CONSTRUCTION.— 

15 ‘‘(1) EMPLOYERS AND EMPLOYEES.—For pur16 poses of determining whether a plan, fund, or pro17 gram is an employee welfare benefit plan which is an 

18 association health plan, and for purposes of applying 

19 this title in connection with such plan, fund, or pro20 gram so determined to be such an employee welfare 

21 benefit plan— 

22 ‘‘(A) in the case of a partnership, the term 

23 ‘employer’ (as defined in section 3(5)) includes 

24 the partnership in relation to the partners, and 

25 the term ‘employee’ (as defined in section 3(6)) 


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1 includes any partner in relation to the partner2 ship; and 

3 ‘‘(B) in the case of a self-employed indi4 vidual, the term ‘employer’ (as defined in sec5 tion 3(5)) and the term ‘employee’ (as defined 

6 in section 3(6)) shall include such individual. 

7 ‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED

8 AS EMPLOYEE WELFARE BENEFIT PLANS.—In the 

9 case of any plan, fund, or program which was estab10 lished or is maintained for the purpose of providing 

11 medical care (through the purchase of insurance or 

12 otherwise) for employees (or their dependents) cov13 ered thereunder and which demonstrates to the Sec14 retary that all requirements for certification under 

15 this part would be met with respect to such plan, 

16 fund, or program if such plan, fund, or program 

17 were a group health plan, such plan, fund, or pro18 gram shall be treated for purposes of this title as an 

19 employee welfare benefit plan on and after the date 

20 of such demonstration. 

21 ‘‘(3) EXCEPTION FOR CERTAIN BENEFITS.— 

22 The requirements of this part shall not apply to a 

23 group health plan in relation to its provision of ex24 cepted benefits, as defined in section 706(c).’’. 


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1 (b) CONFORMING AMENDMENTS TO PREEMPTION

2 RULES.— 

3 (1) Section 514(b)(6) of such Act (29 U.S.C. 

4 1144(b)(6)) is amended by adding at the end the 

5 following new subparagraph: 

6 ‘‘(E) The preceding subparagraphs of this paragraph 

7 do not apply with respect to any State law in the case 

8 of an association health plan which is certified under part 

9 8.’’. 

10 (2) Section 514 of such Act (29 U.S.C. 1144) 

11 is amended— 

12 (A) in subsection (b)(4), by striking ‘‘Sub13 section (a)’’ and inserting ‘‘Subsections (a) and 

14 (d)’’; 

15 (B) in subsection (b)(5), by striking ‘‘sub16 section (a)’’ in subparagraph (A) and inserting 

17 ‘‘subsection (a) of this section and subsections 

18 (a)(2)(B) and (b) of section 805’’, and by strik19 ing ‘‘subsection (a)’’ in subparagraph (B) and 

20 inserting ‘‘subsection (a) of this section or sub21 section (a)(2)(B) or (b) of section 805’’; 

22 (C) by redesignating subsection (d) as sub23 section (e); and 

24 (D) by inserting after subsection (c) the 

25 following new subsection: 


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1 ‘‘(d)(1) Except as provided in subsection (b)(4), the 

2 provisions of this title shall supersede any and all State 

3 laws insofar as they may now or hereafter preclude, or 

4 have the effect of precluding, a health insurance issuer 

5 from offering health insurance coverage in connection with 

6 an association health plan which is certified under part 

7 8. 

8 ‘‘(2) Except as provided in paragraphs (4) and (5) 

9 of subsection (b) of this section— 

10 ‘‘(A) In any case in which health insurance cov11 erage of any policy type is offered under an associa12 tion health plan certified under part 8 to a partici13 pating employer operating in such State, the provi14 sions of this title shall supersede any and all laws 

15 of such State insofar as they may preclude a health 

16 insurance issuer from offering health insurance cov17 erage of the same policy type to other employers op18 erating in the State which are eligible for coverage 

19 under such association health plan, whether or not 

20 such other employers are participating employers in 

21 such plan. 

22 ‘‘(B) In any case in which health insurance cov23 erage of any policy type is offered in a State under 

24 an association health plan certified under part 8 and 

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1 fined in section 812(a)(9)), of the policy form in 

2 connection with such policy type is approved by such 

3 State authority, the provisions of this title shall su4 persede any and all laws of any other State in which 

5 health insurance coverage of such type is offered, in6 sofar as they may preclude, upon the filing in the 

7 same form and manner of such policy form with the 

8 applicable State authority in such other State, the 

9 approval of the filing in such other State. 

10 ‘‘(3) Nothing in subsection (b)(6)(E) or the preceding 

11 provisions of this subsection shall be construed, with re12 spect to health insurance issuers or health insurance cov13 erage, to supersede or impair the law of any State— 

14 ‘‘(A) providing solvency standards or similar 

15 standards regarding the adequacy of insurer capital, 

16 surplus, reserves, or contributions, or 

17 ‘‘(B) relating to prompt payment of claims. 

18 ‘‘(4) For additional provisions relating to association 

19 health plans, see subsections (a)(2)(B) and (b) of section 

20 805. 

21 ‘‘(5) For purposes of this subsection, the term ‘asso22 ciation health plan’ has the meaning provided in section 

23 801(a), and the terms ‘health insurance coverage’, ‘par24 ticipating employer’, and ‘health insurance issuer’ have 


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1 the meanings provided such terms in section 812, respec2 tively.’’. 

3 (3) Section 514(b)(6)(A) of such Act (29 

4 U.S.C. 1144(b)(6)(A)) is amended— 

5 (A) in clause (i)(II), by striking ‘‘and’’ at 

6 the end; 

7 (B) in clause (ii), by inserting ‘‘and which 

8 does not provide medical care (within the mean9 ing of section 733(a)(2)),’’ after ‘‘arrange10 ment,’’, and by striking ‘‘title.’’ and inserting 

11 ‘‘title, and’’; and 

12 (C) by adding at the end the following new 

13 clause: 

14 ‘‘(iii) subject to subparagraph (E), in the case 

15 of any other employee welfare benefit plan which is 

16 a multiple employer welfare arrangement and which 

17 provides medical care (within the meaning of section 

18 733(a)(2)), any law of any State which regulates in19 surance may apply.’’. 

20 (4) Section 514(e) of such Act (as redesignated 

21 by paragraph (2)(C)) is amended— 

22 (A) by striking ‘‘Nothing’’ and inserting 

23 ‘‘(1) Except as provided in paragraph (2), noth24 ing’’; and 


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1 (B) by adding at the end the following new 

2 paragraph: 

3 ‘‘(2) Nothing in any other provision of law enacted 

4 on or after the date of the enactment of the Small Busi5 ness Health Fairness Act of 2015 shall be construed to 

6 alter, amend, modify, invalidate, impair, or supersede any 

7 provision of this title, except by specific cross-reference to 

8 the affected section.’’. 

9 (c) PLAN SPONSOR.—Section 3(16)(B) of such Act 

10 (29 U.S.C. 102(16)(B)) is amended by adding at the end 

11 the following new sentence: ‘‘Such term also includes a 

12 person serving as the sponsor of an association health plan 

13 under part 8.’’. 

14 (d) DISCLOSURE OF SOLVENCY PROTECTIONS RE15 LATED TO SELF-INSURED AND FULLY INSURED OPTIONS

16 UNDER ASSOCIATION HEALTH PLANS.—Section 102(b) 

17 of such Act (29 U.S.C. 102(b)) is amended by adding at 

18 the end the following: ‘‘An association health plan shall 

19 include in its summary plan description, in connection 

20 with each benefit option, a description of the form of sol21 vency or guarantee fund protection secured pursuant to 

22 this Act or applicable State law, if any.’’. 

23 (e) SAVINGS CLAUSE.—Section 731(c) of such Act is 

24 amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 


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1 (f) REPORT TO THE CONGRESS REGARDING CERTIFI2 CATION OF SELF-INSURED ASSOCIATION HEALTH

3 PLANS.—Not later than January 1, 2016, the Secretary 

4 of Labor shall report to the Committee on Education and 

5 the Workforce of the House of Representatives and the 

6 Committee on Health, Education, Labor, and Pensions of 

7 the Senate the effect association health plans have had, 

8 if any, on reducing the number of uninsured individuals. 

9 (g) CLERICAL AMENDMENT.—The table of contents 

10 in section 1 of the Employee Retirement Income Security 

11 Act of 1974 is amended by inserting after the item relat12 ing to section 734 the following new items: 

‘‘PART 8—RULES GOVERNING ASSOCIATION HEALTH PLANS

‘‘801. Association health plans. 

‘‘802. Certification of association health plans. 

‘‘803. Requirements relating to sponsors and boards of trustees. 

‘‘804. Participation and coverage requirements. 

‘‘805. Other requirements relating to plan documents, contribution rates, and 

benefit options. 

‘‘806. Maintenance of reserves and provisions for solvency for plans providing 

health benefits in addition to health insurance coverage. 

‘‘807. Requirements for application and related requirements. 

‘‘808. Notice requirements for voluntary termination. 

‘‘809. Corrective actions and mandatory termination. 

‘‘810. Trusteeship by the Secretary of insolvent association health plans providing health benefits in addition to health insurance coverage. 

‘‘811. State assessment authority. 

‘‘812. Definitions and rules of construction.’’. 

13 SEC. 213. CLARIFICATION OF TREATMENT OF SINGLE EM14 PLOYER ARRANGEMENTS. 

15 Section 3(40)(B) of the Employee Retirement Income 

16 Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amend17 ed— 


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1 (1) in clause (i), by inserting after ‘‘control 

2 group,’’ the following: ‘‘except that, in any case in 

3 which the benefit referred to in subparagraph (A) 

4 consists of medical care (as defined in section 

5 812(a)(2)), two or more trades or businesses, wheth6 er or not incorporated, shall be deemed a single em7 ployer for any plan year of such plan, or any fiscal 

8 year of such other arrangement, if such trades or 

9 businesses are within the same control group during 

10 such year or at any time during the preceding 1-year 

11 period,’’; 

12 (2) in clause (iii), by striking ‘‘(iii) the deter13 mination’’ and inserting the following: 

14 ‘‘(iii)(I) in any case in which the benefit re15 ferred to in subparagraph (A) consists of medical 

16 care (as defined in section 812(a)(2)), the deter17 mination of whether a trade or business is under 

18 ‘common control’ with another trade or business 

19 shall be determined under regulations of the Sec20 retary applying principles consistent and coextensive 

21 with the principles applied in determining whether 

22 employees of two or more trades or businesses are 

23 treated as employed by a single employer under sec24 tion 4001(b), except that, for purposes of this para25 graph, an interest of greater than 25 percent may 


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1 not be required as the minimum interest necessary 

2 for common control, or 

3 ‘‘(II) in any other case, the determination’’; 

4 (3) by redesignating clauses (iv) and (v) as 

5 clauses (v) and (vi), respectively; and 

6 (4) by inserting after clause (iii) the following 

7 new clause: 

8 ‘‘(iv) in any case in which the benefit referred 

9 to in subparagraph (A) consists of medical care (as 

10 defined in section 812(a)(2)), in determining, after 

11 the application of clause (i), whether benefits are 

12 provided to employees of two or more employers, the 

13 arrangement shall be treated as having only one par14 ticipating employer if, after the application of clause 

15 (i), the number of individuals who are employees and 

16 former employees of any one participating employer 

17 and who are covered under the arrangement is 

18 greater than 75 percent of the aggregate number of 

19 all individuals who are employees or former employ20 ees of participating employers and who are covered 

21 under the arrangement,’’. 

22 SEC. 214. ENFORCEMENT PROVISIONS RELATING TO ASSO23 CIATION HEALTH PLANS. 

24 (a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL

25 MISREPRESENTATIONS.—Section 501 of the Employee 


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1 Retirement Income Security Act of 1974 (29 U.S.C. 1131) 

2 is amended— 

3 (1) by inserting ‘‘(a)’’ after ‘‘Sec. 501.’’; and 

4 (2) by adding at the end the following new sub5 section: 

6 ‘‘(b) Any person who willfully falsely represents, to 

7 any employee, any employee’s beneficiary, any employer, 

8 the Secretary, or any State, a plan or other arrangement 

9 established or maintained for the purpose of offering or 

10 providing any benefit described in section 3(1) to employ11 ees or their beneficiaries as— 

12 ‘‘(1) being an association health plan which has 

13 been certified under part 8; 

14 ‘‘(2) having been established or maintained 

15 under or pursuant to one or more collective bar16 gaining agreements which are reached pursuant to 

17 collective bargaining described in section 8(d) of the 

18 National Labor Relations Act (29 U.S.C. 158(d)) or 

19 paragraph Fourth of section 2 of the Railway Labor 

20 Act (45 U.S.C. 152, paragraph Fourth) or which are 

21 reached pursuant to labor-management negotiations 

22 under similar provisions of State public employee re23 lations laws; or 

24 ‘‘(3) being a plan or arrangement described in 

25 section 3(40)(A)(i), 


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1 shall, upon conviction, be imprisoned not more than 5 

2 years, be fined under title 18, United States Code, or 

3 both.’’. 

4 (b) CEASE ACTIVITIES ORDERS.—Section 502 of 

5 such Act (29 U.S.C. 1132) is amended by adding at the 

6 end the following new subsection: 

7 ‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DE8 SIST ORDERS.— 

9 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

10 upon application by the Secretary showing the oper11 ation, promotion, or marketing of an association 

12 health plan (or similar arrangement providing bene13 fits consisting of medical care (as defined in section 

14 733(a)(2))) that— 

15 ‘‘(A) is not certified under part 8, is sub16 ject under section 514(b)(6) to the insurance 

17 laws of any State in which the plan or arrange18 ment offers or provides benefits, and is not li19 censed, registered, or otherwise approved under 

20 the insurance laws of such State; or 

21 ‘‘(B) is an association health plan certified 

22 under part 8 and is not operating in accordance 

23 with the requirements under part 8 for such 

24 certification, 


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1 a district court of the United States shall enter an 

2 order requiring that the plan or arrangement cease 

3 activities. 

4 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

5 apply in the case of an association health plan or 

6 other arrangement if the plan or arrangement shows 

7 that— 

8 ‘‘(A) all benefits under it referred to in 

9 paragraph (1) consist of health insurance cov10 erage; and 

11 ‘‘(B) with respect to each State in which 

12 the plan or arrangement offers or provides ben13 efits, the plan or arrangement is operating in 

14 accordance with applicable State laws that are 

15 not superseded under section 514. 

16 ‘‘(3) ADDITIONAL EQUITABLE RELIEF.—The 

17 court may grant such additional equitable relief, in18 cluding any relief available under this title, as it 

19 deems necessary to protect the interests of the pub20 lic and of persons having claims for benefits against 

21 the plan.’’. 

22 (c) RESPONSIBILITY FOR CLAIMS PROCEDURE.— 

23 Section 503 of such Act (29 U.S.C. 1133) is amended by 

24 inserting ‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’, 

25 and by adding at the end the following new subsection: 


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1 ‘‘(b) ASSOCIATION HEALTH PLANS.—The terms of 

2 each association health plan which is or has been certified 

3 under part 8 shall require the board of trustees or the 

4 named fiduciary (as applicable) to ensure that the require5 ments of this section are met in connection with claims 

6 filed under the plan.’’. 

7 SEC. 215. COOPERATION BETWEEN FEDERAL AND STATE 

8 AUTHORITIES. 

9 Section 506 of the Employee Retirement Income Se10 curity Act of 1974 (29 U.S.C. 1136) is amended by adding 

11 at the end the following new subsection: 

12 ‘‘(d) CONSULTATION WITH STATES WITH RESPECT

13 TO ASSOCIATION HEALTH PLANS.— 

14 ‘‘(1) AGREEMENTS WITH STATES.—The Sec15 retary shall consult with the State recognized under 

16 paragraph (2) with respect to an association health 

17 plan regarding the exercise of— 

18 ‘‘(A) the Secretary’s authority under sec19 tions 502 and 504 to enforce the requirements 

20 for certification under part 8; and 

21 ‘‘(B) the Secretary’s authority to certify 

22 association health plans under part 8 in accord23 ance with regulations of the Secretary applica24 ble to certification under part 8. 


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1 ‘‘(2) RECOGNITION OF PRIMARY DOMICILE

2 STATE.—In carrying out paragraph (1), the Sec3 retary shall ensure that only one State will be recog4 nized, with respect to any particular association 

5 health plan, as the State with which consultation is 

6 required. In carrying out this paragraph— 

7 ‘‘(A) in the case of a plan which provides 

8 health insurance coverage (as defined in section 

9 812(a)(3)), such State shall be the State with 

10 which filing and approval of a policy type of11 fered by the plan was initially obtained, and 

12 ‘‘(B) in any other case, the Secretary shall 

13 take into account the places of residence of the 

14 participants and beneficiaries under the plan 

15 and the State in which the trust is main16 tained.’’. 

17 SEC. 216. EFFECTIVE DATE AND TRANSITIONAL AND 

18 OTHER RULES. 

19 (a) EFFECTIVE DATE.—The amendments made by 

20 this subtitle shall take effect 1 year after the date of the 

21 enactment of this Act. The Secretary of Labor shall first 

22 issue all regulations necessary to carry out the amend23 ments made by this subtitle within 1 year after the date 

24 of the enactment of this Act. 


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1 (b) TREATMENT OF CERTAIN EXISTING HEALTH

2 BENEFITS PROGRAMS.— 

3 (1) IN GENERAL.—In any case in which, as of 

4 the date of the enactment of this Act, an arrange5 ment is maintained in a State for the purpose of 

6 providing benefits consisting of medical care for the 

7 employees and beneficiaries of its participating em8 ployers, at least 200 participating employers make 

9 contributions to such arrangement, such arrange10 ment has been in existence for at least 10 years, and 

11 such arrangement is licensed under the laws of one 

12 or more States to provide such benefits to its par13 ticipating employers, upon the filing with the appli14 cable authority (as defined in section 812(a)(5) of 

15 the Employee Retirement Income Security Act of 

16 1974 (as amended by this subtitle)) by the arrange17 ment of an application for certification of the ar18 rangement under part 8 of subtitle B of title I of 

19 such Act— 

20 (A) such arrangement shall be deemed to 

21 be a group health plan for purposes of title I 

22 of such Act; 

23 (B) the requirements of sections 801(a) 

24 and 803(a) of the Employee Retirement Income 


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1 Security Act of 1974 shall be deemed met with 

2 respect to such arrangement; 

3 (C) the requirements of section 803(b) of 

4 such Act shall be deemed met, if the arrange5 ment is operated by a board of directors 

6 which— 

7 (i) is elected by the participating em8 ployers, with each employer having one 

9 vote; and 

10 (ii) has complete fiscal control over 

11 the arrangement and which is responsible 

12 for all operations of the arrangement; 

13 (D) the requirements of section 804(a) of 

14 such Act shall be deemed met with respect to 

15 such arrangement; and 

16 (E) the arrangement may be certified by 

17 any applicable authority with respect to its op18 erations in any State only if it operates in such 

19 State on the date of certification. 

20 The provisions of this subsection shall cease to apply 

21 with respect to any such arrangement at such time 

22 after the date of the enactment of this Act as the 

23 applicable requirements of this subsection are not 

24 met with respect to such arrangement. 


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1 (2) DEFINITIONS.—For purposes of this sub2 section, the terms ‘‘group health plan’’, ‘‘medical 

3 care’’, and ‘‘participating employer’’ shall have the 

4 meanings provided in section 812 of the Employee 

5 Retirement Income Security Act of 1974, except 

6 that the reference in paragraph (7) of such section 

7 to an ‘‘association health plan’’ shall be deemed a 

8 reference to an arrangement referred to in this sub9 section. 

10 Subtitle C—Health Insurance 

11 Reforms 

12 SEC. 221. REQUIREMENTS FOR INDIVIDUAL HEALTH INSUR13 ANCE. 

14 (a) IN GENERAL.—Section 2741 of the Public Health 

15 Service Act (42 U.S.C. 300gg–41), as restored and revived 

16 by section 2 of this Act, is amended— 

17 (1) in subsection (a)— 

18 (A) in the heading, by striking ‘‘to certain 

19 individuals with prior group coverage’’; 

20 (B) in paragraph (1), by striking ‘‘and sec21 tion 2744’’; 

22 (C) in paragraph (1)(B), by inserting ‘‘un23 less such exclusion complies with paragraph 

24 (2)’’ before the period; and 


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1 (D) by striking paragraph (2) and insert2 ing the following new paragraphs: 

3 ‘‘(2) LIMITATION ON PREEXISTING CONDITION

4 EXCLUSION PERIOD.— 

5 ‘‘(A) LIMITATION.—A health insurance 

6 issuer offering health insurance coverage in the 

7 individual market may not, with respect to an 

8 enrollee in such coverage, impose any pre9 existing condition exclusion if such enrollee has 

10 at least 18 months of continuous creditable cov11 erage (as defined in section 2701(c)(1)) imme12 diately preceding the enrollment date. 

13 ‘‘(B) IMPOSITION OF EXCLUSION.—Not14 withstanding paragraph (1)(B), a health insur15 ance issuer offering health insurance coverage 

16 in the individual market may, with respect to 

17 an enrollee in such coverage who is not de18 scribed in subparagraph (A), impose a pre19 existing condition exclusion only if— 

20 ‘‘(i) such exclusion relates to a condi21 tion (whether physical or mental), regard22 less of the cause of the condition, for which 

23 medical advice, diagnosis, care, or treat24 ment was recommended or received within 


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1 the 6-month period ending on the enroll2 ment date; 

3 ‘‘(ii) such exclusion extends for a pe4 riod of not more than 18 months after the 

5 enrollment date; and 

6 ‘‘(iii) the period of any such pre7 existing condition exclusion is reduced by 

8 the aggregate of the periods of creditable 

9 coverage (if any, as defined in section 

10 2701(c)(1)) applicable to the enrollee as of 

11 the enrollment date. 

12 ‘‘(C) PREMIUM SURCHARGE.—Notwith13 standing paragraph (6), with respect to an en14 rollee described in subparagraph (B), a health 

15 insurance issuer may charge a premium for the 

16 coverage involved that does not exceed 150 per17 cent of the applicable standard rate, for not to 

18 exceed 24 months (or 36 months if the health 

19 insurance issuer does not impose any pre20 existing condition exclusion with respect to such 

21 enrollee), reduced by the aggregate of the peri22 ods of creditable coverage (if any, as defined in 

23 section 2701(c)(1)) applicable to the enrollee as 

24 of the enrollment date. For purposes of this 

25 subsection, the term ‘applicable standard rate’ 


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1 means the standard premium rate that the 

2 issuer charges for the coverage involved with re3 spect to an individual described in subpara4 graph (A) with the same rating characteristics 

5 or rating factors as the enrollee described in 

6 subparagraph (B), provided that any variations 

7 in standard premium rates are based on the 

8 uniform application of rating characteristics or 

9 rating factors that are permitted by State law 

10 and are not otherwise prohibited by paragraph 

11 (6). 

12 ‘‘(3) EXCEPTIONS.—Notwithstanding para13 graph (2), and subject to subparagraph (D), a 

14 health insurance issuer offering health insurance 

15 coverage in the individual market, may not impose 

16 any of the following preexisting condition exclusion: 

17 ‘‘(A) EXCLUSION NOT APPLICABLE TO

18 CERTAIN NEWBORNS.—In the case of an indi19 vidual who, as of the last day of the 30-day pe20 riod beginning with the date of birth, is a de21 pendent of an enrollee in such coverage. 

22 ‘‘(B) EXCLUSION NOT APPLICABLE TO

23 CERTAIN ADOPTED CHILDREN.—In the case of 

24 a child who is adopted or placed for adoption 

25 before attaining 18 years of age and who, as of 


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1 the last day of the 30-day period beginning on 

2 the date of the adoption or placement for adop3 tion, is a dependent of an enrollee in such cov4 erage. The previous sentence shall not apply to 

5 coverage before the date of such adoption or 

6 placement for adoption. 

7 ‘‘(C) EXCLUSION NOT APPLICABLE TO

8 PREGNANCY.—Relating to pregnancy as a pre9 existing condition. 

10 ‘‘(D) LOSS IF BREAK IN COVERAGE.—Sub11 paragraphs (A) and (B) shall no longer apply 

12 to an individual after the end of the first 63- 

13 day period during all of which the individual 

14 was not covered under any creditable coverage. 

15 ‘‘(4) OPEN ENROLLMENT PERIODS.—A health 

16 insurance issuer offering health insurance coverage 

17 in the individual market may limit the applicability 

18 of the provisions of paragraph (1) to scheduled open 

19 enrollment periods, provided that— 

20 ‘‘(A) any such open enrollment period shall 

21 not be less than 30 days; 

22 ‘‘(B) any period between scheduled open 

23 enrollment periods shall not exceed 24 months; 

24 and 


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1 ‘‘(C) such limitation shall not apply to any 

2 individual who qualifies for a special enrollment 

3 period under paragraph (5). 

4 ‘‘(5) SPECIAL ENROLLMENT PERIODS.—Subject 

5 to subparagraphs (E) and (F), a health insurance 

6 issuer offering health insurance coverage in the indi7 vidual market shall permit an individual who is an 

8 eligible individual or a dependent to enroll in cov9 erage during a special enrollment period if the indi10 vidual experiences any of the following qualifying 

11 events: 

12 ‘‘(A) FOR DEPENDENT BENEFICIARIES.— 

13 The individual becomes, by reason of marriage, 

14 birth, adoption or placement for adoption, a de15 pendent of an individual enrolled in a plan of16 fered by the health insurance issuer and such 

17 individual otherwise qualifies, under the terms 

18 of the plan, as eligible for coverage as a depend19 ent of such enrollee. 

20 ‘‘(B) LOSS OF GROUP COVERAGE.—The in21 dividual loses coverage under a group health 

22 plan as a result of— 

23 ‘‘(i) loss of eligibility for the coverage 

24 (including as a result of legal separation, 

25 divorce, death, attaining an age at which 


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1 eligibility terminates, termination of em2 ployment, or reduction in the number of 

3 hours of employment); or 

4 ‘‘(ii) termination of the coverage by 

5 the plan sponsor. 

6 ‘‘(C) LOSS OF INDIVIDUAL COVERAGE.— 

7 The individual loses individual market coverage 

8 as a result of— 

9 ‘‘(i) discontinuation of a plan as a re10 sult of a health insurance issuer ceasing to 

11 offer coverage in the individual market in 

12 accordance with section 2742(c)(2) (42 

13 U.S.C. 300gg–42(c)(2)) of this title; 

14 ‘‘(ii) expiration of COBRA, or other, 

15 continuation coverage; 

16 ‘‘(iii) ceasing to qualify, under the 

17 terms of the coverage, as a dependent (in18 cluding as a result of legal separation, di19 vorce, death, or attaining an age at which 

20 eligibility terminates); and 

21 ‘‘(iv) permanently moving outside the 

22 State in which the coverage was issued, or 

23 in the case of a network plan, outside the 

24 plan’s service area. 


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1 ‘‘(D) LOSS OF ELIGIBILITY FOR A GOV2 ERNMENT COVERAGE PROGRAM.—The indi3 vidual loses coverage by ceasing to be eligible 

4 for coverage under any of the following: 

5 ‘‘(i) Part A or part B of title XVIII 

6 of the Social Security Act (42 U.S.C. 

7 1395c et seq., 1395j et seq.). 

8 ‘‘(ii) Title XIX of the Social Security 

9 Act (42 U.S.C. 1396 et seq.), other than 

10 coverage consisting solely of benefits under 

11 section 1928 (42 U.S.C. 1396s). 

12 ‘‘(iii) Title XXI of the Social Security 

13 Act (42 U.S.C. 1397aa et seq.). 

14 ‘‘(iv) Chapter 55 of title 10. 

15 ‘‘(v) Chapter 89 of title 5. 

16 ‘‘(vi) A State health benefits risk pool. 

17 ‘‘(E) For purposes of this paragraph, loss 

18 of coverage shall not include any of the fol19 lowing: 

20 ‘‘(i) Voluntary termination of coverage 

21 by an individual, except if such termination 

22 is the result of circumstances described in 

23 subparagraph (C)(iv). 

24 ‘‘(ii) Termination of coverage by the 

25 issuer or the plan sponsor of the coverage 


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1 for any reason described in paragraphs (1) 

2 or (2) of section 2742(b) (300gg–42(b)) of 

3 this title. 

4 ‘‘(iii) Loss of any coverage that con5 sists solely of coverage of excepted benefits 

6 (as defined in section 300gg–91(c) of this 

7 title). 

8 ‘‘(F) Any special enrollment period shall 

9 not be less than 60 days and shall begin on the 

10 date of the qualifying event. 

11 ‘‘(6) STANDARD PREMIUM RATES.—With re12 spect to the premium rate charged by a health insur13 ance issuer for health insurance coverage offered in 

14 the individual market, such rate, with respect to the 

15 particular plan or coverage involved, shall not vary 

16 based on any of the following health status-related 

17 factors in relation to an eligible individual or de18 pendent: 

19 ‘‘(A) Health status. 

20 ‘‘(B) Medical condition (including both 

21 physical and mental illnesses). 

22 ‘‘(C) Claims experience. 

23 ‘‘(D) Receipt of health care. 

24 ‘‘(E) Medical history. 

25 ‘‘(F) Genetic information. 


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1 ‘‘(G) Evidence of insurability (including 

2 conditions arising out of acts of domestic vio3 lence). 

4 ‘‘(H) Disability.’’; 

5 (2) by amending subsection (b) to read as fol6 lows: 

7 ‘‘(b) DEFINITIONS.—For purposes of this section: 

8 ‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible 

9 individual’ means an individual who is eligible under 

10 applicable State law to purchase individual health in11 surance coverage in the State. 

12 ‘‘(2) DEPENDENT.—The term ‘dependent’ 

13 means an individual who, under the terms of the 

14 coverage and applicable State law, qualifies to enroll 

15 in such coverage as a dependent of an individual de16 scribed in paragraph (1).’’; and 

17 (3) by striking subsection (c) and redesignating 

18 subsection (d) and the first subsection (e) as sub19 sections (c) and (d), respectively. 

20 (b) CONFORMING AMENDMENT.—Section 2744 of the 

21 Public Health Service Act (42 U.S.C. 300gg–44), as re22 stored and revived by section 2 of this Act, is repealed. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply with respect to health insurance 


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1 coverage offered for plan years beginning after the date 

2 of the enactment of this Act. 

3 TITLE III—INTERSTATE MARKET 

4 FOR HEALTH INSURANCE 

5 SEC. 301. COOPERATIVE GOVERNING OF INDIVIDUAL 

6 HEALTH INSURANCE COVERAGE. 

7 (a) IN GENERAL.—Title XXVII of the Public Health 

8 Service Act (42 U.S.C. 300gg et seq.), as restored by sec9 tion 2, is amended by adding at the end the following new 

10 part: 

11 ‘‘PART D—COOPERATIVE GOVERNING OF 

12 INDIVIDUAL HEALTH INSURANCE COVERAGE 

13 ‘‘SEC. 2795. DEFINITIONS. 

14 ‘‘In this part: 

15 ‘‘(1) PRIMARY STATE.—The term ‘primary 

16 State’ means, with respect to individual health insur17 ance coverage offered by a health insurance issuer, 

18 the State designated by the issuer as the State 

19 whose covered laws shall govern the health insurance 

20 issuer in the sale of such coverage under this part. 

21 An issuer, with respect to a particular policy, may 

22 only designate one such State as its primary State 

23 with respect to all such coverage it offers. Such an 

24 issuer may not change the designated primary State 

25 with respect to individual health insurance coverage 


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1 once the policy is issued, except that such a change 

2 may be made upon renewal of the policy. With re3 spect to such designated State, the issuer is deemed 

4 to be doing business in that State. 

5 ‘‘(2) SECONDARY STATE.—The term ‘secondary 

6 State’ means, with respect to individual health insur7 ance coverage offered by a health insurance issuer, 

8 any State that is not the primary State. In the case 

9 of a health insurance issuer that is selling a policy 

10 in, or to a resident of, a secondary State, the issuer 

11 is deemed to be doing business in that secondary 

12 State. 

13 ‘‘(3) HEALTH INSURANCE ISSUER.—The term 

14 ‘health insurance issuer’ has the meaning given such 

15 term in section 2791(b)(2), except that such an 

16 issuer must be licensed in the primary State and be 

17 qualified to sell individual health insurance coverage 

18 in that State. 

19 ‘‘(4) INDIVIDUAL HEALTH INSURANCE COV20 ERAGE.—The term ‘individual health insurance cov21 erage’ means health insurance coverage offered in 

22 the individual market, as defined in section 

23 2791(e)(1), but does not include excepted benefits 

24 described in section 2791(c). 


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1 ‘‘(5) APPLICABLE STATE AUTHORITY.—The 

2 term ‘applicable State authority’ means, with respect 

3 to a health insurance issuer in a State, the State in4 surance commissioner or official or officials des5 ignated by the State to enforce the requirements of 

6 this title for the State with respect to the issuer. 

7 ‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 

8 term ‘hazardous financial condition’ means that, 

9 based on its present or reasonably anticipated finan10 cial condition, a health insurance issuer is unlikely 

11 to be able— 

12 ‘‘(A) to meet obligations to policyholders 

13 with respect to known claims and reasonably 

14 anticipated claims; or 

15 ‘‘(B) to pay other obligations in the normal 

16 course of business. 

17 ‘‘(7) COVERED LAWS.— 

18 ‘‘(A) IN GENERAL.—The term ‘covered 

19 laws’ means the laws, rules, regulations, agree20 ments, and orders governing the insurance busi21 ness pertaining to— 

22 ‘‘(i) individual health insurance cov23 erage issued by a health insurance issuer; 

24 ‘‘(ii) the offer, sale, rating (including 

25 medical underwriting), renewal, and 


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1 issuance of individual health insurance cov2 erage to an individual; 

3 ‘‘(iii) the provision to an individual in 

4 relation to individual health insurance cov5 erage of health care and insurance related 

6 services; 

7 ‘‘(iv) the provision to an individual in 

8 relation to individual health insurance cov9 erage of management, operations, and in10 vestment activities of a health insurance 

11 issuer; and 

12 ‘‘(v) the provision to an individual in 

13 relation to individual health insurance cov14 erage of loss control and claims adminis15 tration for a health insurance issuer with 

16 respect to liability for which the issuer pro17 vides insurance. 

18 ‘‘(B) EXCEPTION.—Such term does not in19 clude any law, rule, regulation, agreement, or 

20 order governing the use of care or cost manage21 ment techniques, including any requirement re22 lated to provider contracting, network access or 

23 adequacy, health care data collection, or quality 

24 assurance. 


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1 ‘‘(8) STATE.—The term ‘State’ means only the 

2 50 States and the District of Columbia. 

3 ‘‘(9) UNFAIR CLAIMS SETTLEMENT PRAC4 TICES.—The term ‘unfair claims settlement prac5 tices’ means only the following practices: 

6 ‘‘(A) Knowingly misrepresenting to claim7 ants and insured individuals relevant facts or 

8 policy provisions relating to coverage at issue. 

9 ‘‘(B) Failing to acknowledge with reason10 able promptness pertinent communications with 

11 respect to claims arising under policies. 

12 ‘‘(C) Failing to adopt and implement rea13 sonable standards for the prompt investigation 

14 and settlement of claims arising under policies. 

15 ‘‘(D) Failing to effectuate prompt, fair, 

16 and equitable settlement of claims submitted in 

17 which liability has become reasonably clear. 

18 ‘‘(E) Refusing to pay claims without con19 ducting a reasonable investigation. 

20 ‘‘(F) Failing to affirm or deny coverage of 

21 claims within a reasonable period of time after 

22 having completed an investigation related to 

23 those claims. 

24 ‘‘(G) A pattern or practice of compelling 

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1 stitute suits to recover amounts due under its 

2 policies by offering substantially less than the 

3 amounts ultimately recovered in suits brought 

4 by them. 

5 ‘‘(H) A pattern or practice of attempting 

6 to settle or settling claims for less than the 

7 amount that a reasonable person would believe 

8 the insured individual or his or her beneficiary 

9 was entitled by reference to written or printed 

10 advertising material accompanying or made 

11 part of an application. 

12 ‘‘(I) Attempting to settle or settling claims 

13 on the basis of an application that was materi14 ally altered without notice to, or knowledge or 

15 consent of, the insured. 

16 ‘‘(J) Failing to provide forms necessary to 

17 present claims within 15 calendar days of a re18 quests with reasonable explanations regarding 

19 their use. 

20 ‘‘(K) Attempting to cancel a policy in less 

21 time than that prescribed in the policy or by the 

22 law of the primary State. 

23 ‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 

24 and abuse’ means an act or omission committed by 

25 a person who, knowingly and with intent to defraud, 


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1 commits, or conceals any material information con2 cerning, one or more of the following: 

3 ‘‘(A) Presenting, causing to be presented 

4 or preparing with knowledge or belief that it 

5 will be presented to or by an insurer, a rein6 surer, broker or its agent, false information as 

7 part of, in support of or concerning a fact ma8 terial to one or more of the following: 

9 ‘‘(i) An application for the issuance or 

10 renewal of an insurance policy or reinsur11 ance contract. 

12 ‘‘(ii) The rating of an insurance policy 

13 or reinsurance contract. 

14 ‘‘(iii) A claim for payment or benefit 

15 pursuant to an insurance policy or reinsur16 ance contract. 

17 ‘‘(iv) Premiums paid on an insurance 

18 policy or reinsurance contract. 

19 ‘‘(v) Payments made in accordance 

20 with the terms of an insurance policy or 

21 reinsurance contract. 

22 ‘‘(vi) A document filed with the com23 missioner or the chief insurance regulatory 

24 official of another jurisdiction. 


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1 ‘‘(vii) The financial condition of an in2 surer or reinsurer. 

3 ‘‘(viii) The formation, acquisition, 

4 merger, reconsolidation, dissolution or 

5 withdrawal from one or more lines of in6 surance or reinsurance in all or part of a 

7 State by an insurer or reinsurer. 

8 ‘‘(ix) The issuance of written evidence 

9 of insurance. 

10 ‘‘(x) The reinstatement of an insur11 ance policy. 

12 ‘‘(B) Solicitation or acceptance of new or 

13 renewal insurance risks on behalf of an insurer, 

14 reinsurer, or other person engaged in the busi15 ness of insurance by a person who knows or 

16 should know that the insurer or other person 

17 responsible for the risk is insolvent at the time 

18 of the transaction. 

19 ‘‘(C) Transaction of the business of insur20 ance in violation of laws requiring a license, cer21 tificate of authority or other legal authority for 

22 the transaction of the business of insurance. 

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1 mit the acts or omissions specified in this para2 graph. 

3 ‘‘SEC. 2796. APPLICATION OF LAW. 

4 ‘‘(a) IN GENERAL.—The covered laws of the primary 

5 State shall apply to individual health insurance coverage 

6 offered by a health insurance issuer in the primary State 

7 and in any secondary State, but only if the coverage and 

8 issuer comply with the conditions of this section with re9 spect to the offering of coverage in any secondary State. 

10 ‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC11 ONDARY STATE.—Except as provided in this section, a 

12 health insurance issuer with respect to its offer, sale, rat13 ing (including medical underwriting), renewal, and 

14 issuance of individual health insurance coverage in any 

15 secondary State is exempt from any covered laws of the 

16 secondary State (and any rules, regulations, agreements, 

17 or orders sought or issued by such State under or related 

18 to such covered laws) to the extent that such laws would— 

19 ‘‘(1) make unlawful, or regulate, directly or in20 directly, the operation of the health insurance issuer 

21 operating in the secondary State, except that any 

22 secondary State may require such an issuer— 

23 ‘‘(A) to pay, on a nondiscriminatory basis, 

24 applicable premium and other taxes (including 

25 high-risk pool assessments) which are levied on 


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1 insurers and surplus lines insurers, brokers, or 

2 policyholders under the laws of the State; 

3 ‘‘(B) to register with and designate the 

4 State insurance commissioner as its agent solely 

5 for the purpose of receiving service of legal doc6 uments or process; 

7 ‘‘(C) to submit to an examination of its fi8 nancial condition by the State insurance com9 missioner in any State in which the issuer is 

10 doing business to determine the issuer’s finan11 cial condition, if— 

12 ‘‘(i) the State insurance commissioner 

13 of the primary State has not done an ex14 amination within the period recommended 

15 by the National Association of Insurance 

16 Commissioners; and 

17 ‘‘(ii) any such examination is con18 ducted in accordance with the examiners’ 

19 handbook of the National Association of 

20 Insurance Commissioners and is coordi21 nated to avoid unjustified duplication and 

22 unjustified repetition; 

23 ‘‘(D) to comply with a lawful order 

24 issued— 


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1 ‘‘(i) in a delinquency proceeding com2 menced by the State insurance commis3 sioner if there has been a finding of finan4 cial impairment under subparagraph (C); 

5 or 

6 ‘‘(ii) in a voluntary dissolution pro7 ceeding; 

8 ‘‘(E) to comply with an injunction issued 

9 by a court of competent jurisdiction, upon a pe10 tition by the State insurance commissioner al11 leging that the issuer is in hazardous financial 

12 condition; 

13 ‘‘(F) to participate, on a nondiscriminatory 

14 basis, in any insurance insolvency guaranty as15 sociation or similar association to which a 

16 health insurance issuer in the State is required 

17 to belong; 

18 ‘‘(G) to comply with any State law regard19 ing fraud and abuse (as defined in section 

20 2795(10)), except that if the State seeks an in21 junction regarding the conduct described in this 

22 subparagraph, such injunction must be obtained 

23 from a court of competent jurisdiction; 


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1 ‘‘(H) to comply with any State law regard2 ing unfair claims settlement practices (as de3 fined in section 2795(9)); or 

4 ‘‘(I) to comply with the applicable require5 ments for independent review under section 

6 2798 with respect to coverage offered in the 

7 State; 

8 ‘‘(2) require any individual health insurance 

9 coverage issued by the issuer to be countersigned by 

10 an insurance agent or broker residing in that Sec11 ondary State; or 

12 ‘‘(3) otherwise discriminate against the issuer 

13 issuing insurance in both the primary State and in 

14 any secondary State. 

15 ‘‘(c) CLEAR AND CONSPICUOUS DISCLOSURE.—A 

16 health insurance issuer shall provide the following notice, 

17 in 12-point bold type, in any insurance coverage offered 

18 in a secondary State under this part by such a health in19 surance issuer and at renewal of the policy, with the 5 

20 blank spaces therein being appropriately filled with the 

21 name of the health insurance issuer, the name of primary 

22 State, the name of the secondary State, the name of the 

23 secondary State, and the name of the secondary State, re24 spectively, for the coverage concerned: 


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1 This policy is issued by lllll and is governed by 

2 the laws and regulations of the State of lllll, and 

3 it has met all the laws of that State as determined by 

4 that State’s Department of Insurance. This policy may be 

5 less expensive than others because it is not subject to all 

6 of the insurance laws and regulations of the State of 

7 lllll, including coverage of some services or bene8 fits mandated by the law of the State of lllll. Ad9 ditionally, this policy is not subject to all of the consumer 

10 protection laws or restrictions on rate changes of the State 

11 of lllll. As with all insurance products, before pur12 chasing this policy, you should carefully review the policy 

13 and determine what health care services the policy covers 

14 and what benefits it provides, including any exclusions, 

15 limitations, or conditions for such services or benefits. 

16 ‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS

17 AND PREMIUM INCREASES.— 

18 ‘‘(1) IN GENERAL.—For purposes of this sec19 tion, a health insurance issuer that provides indi20 vidual health insurance coverage to an individual 

21 under this part in a primary or secondary State may 

22 not upon renewal— 

23 ‘‘(A) move or reclassify the individual in24 sured under the health insurance coverage from 

25 the class such individual is in at the time of 


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1 issue of the contract based on the health-status 

2 related factors of the individual; or 

3 ‘‘(B) increase the premiums assessed the 

4 individual for such coverage based on a health 

5 status-related factor or change of a health sta6 tus-related factor or the past or prospective 

7 claim experience of the insured individual. 

8 ‘‘(2) CONSTRUCTION.—Nothing in paragraph 

9 (1) shall be construed to prohibit a health insurance 

10 issuer— 

11 ‘‘(A) from terminating or discontinuing 

12 coverage or a class of coverage in accordance 

13 with subsections (b) and (c) of section 2742; 

14 ‘‘(B) from raising premium rates for all 

15 policy holders within a class based on claims ex16 perience; 

17 ‘‘(C) from changing premiums or offering 

18 discounted premiums to individuals who engage 

19 in wellness activities at intervals prescribed by 

20 the issuer, if such premium changes or incen21 tives— 

22 ‘‘(i) are disclosed to the consumer in 

23 the insurance contract; 


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1 ‘‘(ii) are based on specific wellness ac2 tivities that are not applicable to all indi3 viduals; and 

4 ‘‘(iii) are not obtainable by all individ5 uals to whom coverage is offered; 

6 ‘‘(D) from reinstating lapsed coverage; or 

7 ‘‘(E) from retroactively adjusting the rates 

8 charged an insured individual if the initial rates 

9 were set based on material misrepresentation by 

10 the individual at the time of issue. 

11 ‘‘(e) PRIOR OFFERING OF POLICY IN PRIMARY

12 STATE.—A health insurance issuer may not offer for sale 

13 individual health insurance coverage in a secondary State 

14 unless that coverage is currently offered for sale in the 

15 primary State. 

16 ‘‘(f) LICENSING OF AGENTS OR BROKERS FOR

17 HEALTH INSURANCE ISSUERS.—Any State may require 

18 that a person acting, or offering to act, as an agent or 

19 broker for a health insurance issuer with respect to the 

20 offering of individual health insurance coverage obtain a 

21 license from that State, with commissions or other com22 pensation subject to the provisions of the laws of that 

23 State, except that a State may not impose any qualifica24 tion or requirement which discriminates against a non25 resident agent or broker. 


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1 ‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN2 SURANCE COMMISSIONER.—Each health insurance issuer 

3 issuing individual health insurance coverage in both pri4 mary and secondary States shall submit— 

5 ‘‘(1) to the insurance commissioner of each 

6 State in which it intends to offer such coverage, be7 fore it may offer individual health insurance cov8 erage in such State— 

9 ‘‘(A) a copy of the plan of operation or fea10 sibility study or any similar statement of the 

11 policy being offered and its coverage (which 

12 shall include the name of its primary State and 

13 its principal place of business); 

14 ‘‘(B) written notice of any change in its 

15 designation of its primary State; and 

16 ‘‘(C) written notice from the issuer of the 

17 issuer’s compliance with all the laws of the pri18 mary State; and 

19 ‘‘(2) to the insurance commissioner of each sec20 ondary State in which it offers individual health in21 surance coverage, a copy of the issuer’s quarterly fi22 nancial statement submitted to the primary State, 

23 which statement shall be certified by an independent 

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1 ion on loss and loss adjustment expense reserves 

2 made by— 

3 ‘‘(A) a member of the American Academy 

4 of Actuaries; or 

5 ‘‘(B) a qualified loss reserve specialist. 

6 ‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 

7 Nothing in this section shall be construed to affect the 

8 authority of any Federal or State court to enjoin— 

9 ‘‘(1) the solicitation or sale of individual health 

10 insurance coverage by a health insurance issuer to 

11 any person or group who is not eligible for such in12 surance; or 

13 ‘‘(2) the solicitation or sale of individual health 

14 insurance coverage that violates the requirements of 

15 the law of a secondary State which are described in 

16 subparagraphs (A) through (H) of section 

17 2796(b)(1). 

18 ‘‘(i) POWER OF SECONDARY STATES TO TAKE AD19 MINISTRATIVE ACTION.—Nothing in this section shall be 

20 construed to affect the authority of any State to enjoin 

21 conduct in violation of that State’s laws described in sec22 tion 2796(b)(1). 

23 ‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 

24 ‘‘(1) IN GENERAL.—Subject to the provisions of 

25 subsection (b)(1)(G) (relating to injunctions) and 


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1 paragraph (2), nothing in this section shall be con2 strued to affect the authority of any State to make 

3 use of any of its powers to enforce the laws of such 

4 State with respect to which a health insurance issuer 

5 is not exempt under subsection (b). 

6 ‘‘(2) COURTS OF COMPETENT JURISDICTION.— 

7 If a State seeks an injunction regarding the conduct 

8 described in paragraphs (1) and (2) of subsection 

9 (h), such injunction must be obtained from a Fed10 eral or State court of competent jurisdiction. 

11 ‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 

12 section shall affect the authority of any State to bring ac13 tion in any Federal or State court. 

14 ‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 

15 this section shall be construed to affect the applicability 

16 of State laws generally applicable to persons or corpora17 tions. 

18 ‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO

19 HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 

20 health insurance issuer is offering coverage in a primary 

21 State that does not accommodate residents of secondary 

22 States or does not provide a working mechanism for resi23 dents of a secondary State, and the issuer is offering cov24 erage under this part in such secondary State which has 

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1 ternative mechanism (as defined in section 2744(c)(2)), 

2 the issuer shall, with respect to any individual health in3 surance coverage offered in a secondary State under this 

4 part, comply with the guaranteed availability requirements 

5 for eligible individuals in section 2741. 

6 ‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 

7 BEFORE ISSUER MAY SELL INTO SECONDARY 

8 STATES. 

9 ‘‘A health insurance issuer may not offer, sell, or 

10 issue individual health insurance coverage in a secondary 

11 State if the State insurance commissioner does not use 

12 a risk-based capital formula for the determination of cap13 ital and surplus requirements for all health insurance 

14 issuers. 

15 ‘‘SEC. 2798. LIMITATION ON INDIVIDUAL PURCHASE IN SEC16 ONDARY STATE. 

17 ‘‘Effective beginning two years after the date of en18 actment of this part, an individual in a State may not 

19 buy individual health insurance coverage in a secondary 

20 State if the premium for individual health insurance in 

21 the primary State (with respect to the individual) exceeds 

22 the national average premium by 10 percent or more. 


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1 ‘‘SEC. 2799. INDEPENDENT EXTERNAL APPEALS PROCE2 DURES. 

3 ‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur4 ance issuer may not offer, sell, or issue individual health 

5 insurance coverage in a secondary State under the provi6 sions of this title unless— 

7 ‘‘(1) both the secondary State and the primary 

8 State have legislation or regulations in place estab9 lishing an independent review process for individuals 

10 who are covered by individual health insurance cov11 erage; or 

12 ‘‘(2) in any case in which the requirements of 

13 paragraph (1) are not met with respect to the either 

14 of such States, the issuer provides an independent 

15 review mechanism substantially identical (as deter16 mined by the applicable State authority of such 

17 State) to that prescribed in the ‘Health Carrier Ex18 ternal Review Model Act’ of the National Association 

19 of Insurance Commissioners for all individuals who 

20 purchase insurance coverage under the terms of this 

21 part, except that, under such mechanism, the review 

22 is conducted by an independent medical reviewer, or 

23 a panel of such reviewers, with respect to whom the 

24 requirements of subsection (b) are met. 


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1 ‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL

2 REVIEWERS.—In the case of any independent review 

3 mechanism referred to in subsection (a)(2)— 

4 ‘‘(1) IN GENERAL.—In referring a denial of a 

5 claim to an independent medical reviewer, or to any 

6 panel of such reviewers, to conduct independent 

7 medical review, the issuer shall ensure that— 

8 ‘‘(A) each independent medical reviewer 

9 meets the qualifications described in paragraphs 

10 (2) and (3); 

11 ‘‘(B) with respect to each review, each re12 viewer meets the requirements of paragraph (4) 

13 and the reviewer, or at least 1 reviewer on the 

14 panel, meets the requirements described in 

15 paragraph (5); and 

16 ‘‘(C) compensation provided by the issuer 

17 to each reviewer is consistent with paragraph 

18 (6). 

19 ‘‘(2) LICENSURE AND EXPERTISE.—Each inde20 pendent medical reviewer shall be a physician 

21 (allopathic or osteopathic) or health care profes22 sional who— 

23 ‘‘(A) is appropriately credentialed or li24 censed in one or more States to deliver health 

25 care services; and 


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1 ‘‘(B) typically treats the condition, makes 

2 the diagnosis, or provides the type of treatment 

3 under review. 

4 ‘‘(3) INDEPENDENCE.— 

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), each independent medical reviewer 

7 in a case shall— 

8 ‘‘(i) not be a related party (as defined 

9 in paragraph (7)); 

10 ‘‘(ii) not have a material familial, fi11 nancial, or professional relationship with 

12 such a party; and 

13 ‘‘(iii) not otherwise have a conflict of 

14 interest with such a party (as determined 

15 under regulations). 

16 ‘‘(B) EXCEPTION.—Nothing in subpara17 graph (A) shall be construed to— 

18 ‘‘(i) prohibit an individual, solely on 

19 the basis of affiliation with the issuer, 

20 from serving as an independent medical re21 viewer if— 

22 ‘‘(I) a non-affiliated individual is 

23 not reasonably available; 


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1 ‘‘(II) the affiliated individual is 

2 not involved in the provision of items 

3 or services in the case under review; 

4 ‘‘(III) the fact of such an affili5 ation is disclosed to the issuer and the 

6 enrollee (or authorized representative) 

7 and neither party objects; and 

8 ‘‘(IV) the affiliated individual is 

9 not an employee of the issuer and 

10 does not provide services exclusively or 

11 primarily to or on behalf of the issuer; 

12 ‘‘(ii) prohibit an individual who has 

13 staff privileges at the institution where the 

14 treatment involved takes place from serv15 ing as an independent medical reviewer 

16 merely on the basis of such affiliation if 

17 the affiliation is disclosed to the issuer and 

18 the enrollee (or authorized representative), 

19 and neither party objects; or 

20 ‘‘(iii) prohibit receipt of compensation 

21 by an independent medical reviewer from 

22 an entity if the compensation is provided 

23 consistent with paragraph (6). 

24 ‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL

25 IN SAME FIELD.— 


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1 ‘‘(A) IN GENERAL.—In a case involving 

2 treatment, or the provision of items or serv3 ices— 

4 ‘‘(i) by a physician, a reviewer shall be 

5 a practicing physician (allopathic or osteo6 pathic) of the same or similar specialty, as 

7 a physician who, acting within the appro8 priate scope of practice within the State in 

9 which the service is provided or rendered, 

10 typically treats the condition, makes the 

11 diagnosis, or provides the type of treat12 ment under review; or 

13 ‘‘(ii) by a non-physician health care 

14 professional, the reviewer, or at least 1 

15 member of the review panel, shall be a 

16 practicing non-physician health care pro17 fessional of the same or similar specialty 

18 as the non-physician health care profes19 sional who, acting within the appropriate 

20 scope of practice within the State in which 

21 the service is provided or rendered, typi22 cally treats the condition, makes the diag23 nosis, or provides the type of treatment 

24 under review. 


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1 ‘‘(B) PRACTICING DEFINED.—For pur2 poses of this paragraph, the term ‘practicing’ 

3 means, with respect to an individual who is a 

4 physician or other health care professional, that 

5 the individual provides health care services to 

6 individual patients on average at least 2 days 

7 per week. 

8 ‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 

9 external review relating to a child, a reviewer shall 

10 have expertise under paragraph (2) in pediatrics. 

11 ‘‘(6) LIMITATIONS ON REVIEWER COMPENSA12 TION.—Compensation provided by the issuer to an 

13 independent medical reviewer in connection with a 

14 review under this section shall— 

15 ‘‘(A) not exceed a reasonable level; and 

16 ‘‘(B) not be contingent on the decision ren17 dered by the reviewer. 

18 ‘‘(7) RELATED PARTY DEFINED.—For purposes 

19 of this section, the term ‘related party’ means, with 

20 respect to a denial of a claim under a coverage relat21 ing to an enrollee, any of the following: 

22 ‘‘(A) The issuer involved, or any fiduciary, 

23 officer, director, or employee of the issuer. 

24 ‘‘(B) The enrollee (or authorized represent25 ative). 


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1 ‘‘(C) The health care professional that pro2 vides the items or services involved in the de3 nial. 

4 ‘‘(D) The institution at which the items or 

5 services (or treatment) involved in the denial 

6 are provided. 

7 ‘‘(E) The manufacturer of any drug or 

8 other item that is included in the items or serv9 ices involved in the denial. 

10 ‘‘(F) Any other party determined under 

11 any regulations to have a substantial interest in 

12 the denial involved. 

13 ‘‘(8) DEFINITIONS.—For purposes of this sub14 section: 

15 ‘‘(A) ENROLLEE.—The term ‘enrollee’ 

16 means, with respect to health insurance cov17 erage offered by a health insurance issuer, an 

18 individual enrolled with the issuer to receive 

19 such coverage. 

20 ‘‘(B) HEALTH CARE PROFESSIONAL.—The 

21 term ‘health care professional’ means an indi22 vidual who is licensed, accredited, or certified 

23 under State law to provide specified health care 

24 services and who is operating within the scope 

25 of such licensure, accreditation, or certification. 


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1 ‘‘SEC. 2800. ENFORCEMENT. 

2 ‘‘(a) IN GENERAL.—Subject to subsection (b), with 

3 respect to specific individual health insurance coverage the 

4 primary State for such coverage has sole jurisdiction to 

5 enforce the primary State’s covered laws in the primary 

6 State and any secondary State. 

7 ‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 

8 subsection (a) shall be construed to affect the authority 

9 of a secondary State to enforce its laws as set forth in 

10 the exception specified in section 2796(b)(1). 

11 ‘‘(c) COURT INTERPRETATION.—In reviewing action 

12 initiated by the applicable secondary State authority, the 

13 court of competent jurisdiction shall apply the covered 

14 laws of the primary State. 

15 ‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 

16 of individual health insurance coverage offered in a sec17 ondary State that fails to comply with the covered laws 

18 of the primary State, the applicable State authority of the 

19 secondary State may notify the applicable State authority 

20 of the primary State.’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 subsection (a) shall apply to individual health insurance 

23 coverage offered, issued, or sold after the date that is one 

24 year after the date of the enactment of this Act. 

25 (c) GAO ONGOING STUDY AND REPORTS.— 


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1 (1) STUDY.—The Comptroller General of the 

2 United States shall conduct an ongoing study con3 cerning the effect of the amendment made by sub4 section (a) on— 

5 (A) the number of uninsured and under-in6 sured; 

7 (B) the availability and cost of health in8 surance policies for individuals with pre-existing 

9 medical conditions; 

10 (C) the availability and cost of health in11 surance policies generally; 

12 (D) the elimination or reduction of dif13 ferent types of benefits under health insurance 

14 policies offered in different States; and 

15 (E) cases of fraud or abuse relating to 

16 health insurance coverage offered under such 

17 amendment and the resolution of such cases. 

18 (2) ANNUAL REPORTS.—The Comptroller Gen19 eral shall submit to Congress an annual report, after 

20 the end of each of the 5 years following the effective 

21 date of the amendment made by subsection (a), on 

22 the ongoing study conducted under paragraph (1). 

23 (d) SEVERABILITY.—If any provision of the section 

24 or the application of such provision to any person or cir25 cumstance is held to be unconstitutional, the remainder 


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1 of this section and the application of the provisions of such 

2 to any other person or circumstance shall not be affected. 

3 TITLE IV—LAWSUIT ABUSE 

4 REFORMS 

5 SEC. 401. CHANGE IN BURDEN OF PROOF BASED ON COM6 PLIANCE WITH CLINICAL PRACTICE GUIDE7 LINES. 

8 (a) SELECTION AND ISSUANCE OF CLINICAL PRAC9 TICES GUIDELINES.— 

10 (1) IN GENERAL.—The Secretary of Health and 

11 Human Services (in this section referred to as the 

12 ‘‘Secretary’’) shall provide for the selection and 

13 issuance of clinical practice guidelines for treatment 

14 of medical conditions (each in this subsection re15 ferred to as a ‘‘guideline’’) in accordance with para16 graphs (2) and (3). 

17 (2) DEVELOPMENT PROCESS.—Not later than 

18 90 days after the date of enactment of this title, the 

19 Secretary shall enter into a contract with a qualified 

20 physician consensus-building organization (such as 

21 the Physician Consortium for Performance Improve22 ment), in concert and agreement with physician spe23 cialty organizations, to develop guidelines. The con24 tract shall require that the organization submit 


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1 guidelines to the agency not later than 18 months 

2 after the date of the enactment of this title. 

3 (3) ISSUANCE.— 

4 (A) IN GENERAL.—Not later than 2 years 

5 after the date of the enactment of this title, the 

6 Secretary shall, after notice and opportunity for 

7 public comment, make a rule that provides for 

8 the issuance of the guidelines submitted under 

9 paragraph (2). 

10 (B) LIMITATION.—The Secretary may not 

11 make a rule that includes guidelines other than 

12 those submitted under paragraph (2). 

13 (C) DISSEMINATION.—The Secretary shall 

14 post such guidelines on the public Internet Web 

15 page of the Department of Health and Human 

16 Services. 

17 (4) MAINTENANCE.—Not later than 4 years 

18 after the date of enactment of this title, and every 

19 2 years thereafter, the Secretary shall review the 

20 guidelines and shall, as necessary, enter into con21 tracts similar to the contract described in paragraph 

22 (2), and issue guidelines in a manner similar to the 

23 issuance of guidelines under paragraph (3). 

24 (b) USE.— 


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1 (1) USE BY DEFENDANT TO CHANGE THE BUR2 DEN OF PROOF.—If a defendant in a health care 

3 lawsuit relating to treatment of an individual estab4 lishes by a preponderance of the evidence that the 

5 treatment was provided in a manner consistent with 

6 an applicable guideline issued under subsection (a), 

7 the defendant may not be held liable unless the 

8 plaintiff establishes the liability of the defendant by 

9 clear and convincing evidence. 

10 (2) LIMITATION ON INTRODUCTION AS EVI11 DENCE AGAINST A DEFENDANT.—Guidelines issued 

12 under subsection (a) may not be introduced as evi13 dence of negligence or deviation in the standard of 

14 care in any health care lawsuit unless they have pre15 viously been introduced by the defendant. 

16 (3) NO PRESUMPTION OF NEGLIGENCE AGAINST

17 A DEFENDANT.—There shall be no presumption of 

18 negligence with respect to treatment if a health care 

19 provider provides the treatment in a manner incon20 sistent with such guidelines. 

21 (c) CONSTRUCTION.—Nothing in this section shall be 

22 construed as preventing a State from— 

23 (1) replacing their current medical malpractice 

24 rules with rules that rely, as a defense, upon a 


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1 health care provider’s compliance with a guideline 

2 issued under subsection (a); or 

3 (2) applying additional guidelines or limitations 

4 on liability that are in addition to, but not in lieu 

5 of, the guidelines issued under subsection (a). 

6 SEC. 402. STATE GRANTS TO CREATE EXPERT PANELS AND 

7 ADMINISTRATIVE HEALTH CARE TRIBUNALS. 

8 Part P of title III of the Public Health Service Act 

9 (42 U.S.C. 280g et seq.) is amended by adding at the end 

10 the following: 

11 ‘‘SEC. 399T. STATE GRANTS TO CREATE ADMINISTRATIVE 

12 HEALTH CARE TRIBUNALS. 

13 ‘‘(a) IN GENERAL.—The Secretary may award grants 

14 to States for the development, implementation, and eval15 uation of administrative health care tribunals that comply 

16 with this section, for the resolution of disputes concerning 

17 injuries allegedly caused by health care providers. 

18 ‘‘(b) CONDITIONS FOR DEMONSTRATION GRANTS.— 

19 To be eligible to receive a grant under this section, a State 

20 shall submit to the Secretary an application at such time, 

21 in such manner, and containing such information as may 

22 be required by the Secretary. A grant shall be awarded 

23 under this section on such terms and conditions as the 

24 Secretary determines appropriate. 


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1 ‘‘(c) REPRESENTATION BY COUNSEL.—A State that 

2 receives a grant under this section may not preclude any 

3 party to a dispute before an administrative health care tri4 bunal operated under such grant from obtaining legal rep5 resentation during any review by the expert panel under 

6 subsection (d), the administrative health care tribunal 

7 under subsection (e), or a State court under subsection 

8 (f). 

9 ‘‘(d) EXPERT PANEL REVIEW AND EARLY OFFER

10 GUIDELINES.— 

11 ‘‘(1) IN GENERAL.—If, in any health care liabil12 ity action against a health care provider, the health 

13 care provider alleges, in any response to the claim14 ant’s filing, that the health care provider adhered to 

15 an applicable practice guideline in the provision of 

16 health care items or services to the claimant, then 

17 further proceedings on the health care liability ac18 tion shall be suspended prior to discovery pro19 ceedings, until the completion of a review of the ac20 tion by an independent expert panel in accordance 

21 with this subsection. 

22 ‘‘(2) COMPOSITION.— 

23 ‘‘(A) IN GENERAL.—The members of each 

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1 sible for health. Each expert panel shall be 

2 composed of no fewer than 3 members and not 

3 more than 5 members. At least one-half of such 

4 members shall be medical experts (either physi5 cians or health care professionals). 

6 ‘‘(B) LICENSURE AND EXPERTISE.—Each 

7 physician or health care professional appointed 

8 to an expert panel under subparagraph (A) 

9 shall— 

10 ‘‘(i) be appropriately credentialed or 

11 licensed in one or more States to deliver 

12 health care services; and 

13 ‘‘(ii) typically treat the condition, 

14 make the diagnosis, or provide the type of 

15 treatment that is under review. 

16 ‘‘(C) INDEPENDENCE.— 

17 ‘‘(i) IN GENERAL.—Subject to clause 

18 (ii), each individual appointed to an expert 

19 panel under this paragraph shall— 

20 ‘‘(I) not have a material familial, 

21 financial, or professional relationship 

22 with a party involved in the dispute 

23 reviewed by the panel; and 

24 ‘‘(II) not otherwise have a con25 flict of interest with such a party. 


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1 ‘‘(ii) EXCEPTION.—Nothing in clause 

2 (i) shall be construed to prohibit an indi3 vidual who has staff privileges at an insti4 tution where the treatment involved in the 

5 dispute was provided from serving as a 

6 member of an expert panel merely on the 

7 basis of such affiliation, if the affiliation is 

8 disclosed to the parties and neither party 

9 objects. 

10 ‘‘(D) PRACTICING HEALTH CARE PROFES11 SIONAL IN SAME FIELD.— 

12 ‘‘(i) IN GENERAL.—In a dispute be13 fore an expert panel that involves treat14 ment, or the provision of items or serv15 ices— 

16 ‘‘(I) by a physician, the medical 

17 experts on the expert panel shall be 

18 practicing physicians (allopathic or os19 teopathic) of the same or similar spe20 cialty as a physician who typically 

21 treats the condition, makes the diag22 nosis, or provides the type of treat23 ment under review; or 

24 ‘‘(II) by a health care profes25 sional other than a physician, at least 


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1 two medical experts on the expert 

2 panel shall be practicing physicians 

3 (allopathic or osteopathic) of the same 

4 or similar specialty as the health care 

5 professional who typically treats the 

6 condition, makes the diagnosis, or 

7 provides the type of treatment under 

8 review, and, if determined appropriate 

9 by the State agency, an additional 

10 medical expert shall be a practicing 

11 health care professional (other than 

12 such a physician) of such a same or 

13 similar specialty. 

14 ‘‘(ii) PRACTICING DEFINED.—In this 

15 paragraph, the term ‘practicing’ means, 

16 with respect to an individual who is a phy17 sician or other health care professional, 

18 that the individual provides health care 

19 services to individual patients on average 

20 at least 2 days a week. 

21 ‘‘(E) PEDIATRIC EXPERTISE.—In the case 

22 of dispute relating to a child, at least 1 medical 

23 expert on the expert panel shall have expertise 

24 described in subparagraph (D)(i) in pediatrics. 


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1 ‘‘(F) NO CIVIL LIABILITY FOR MEM2 BERS.—No civil action shall be brought in any 

3 court against any member of an expert panel 

4 for any act done, failure to act, or statement or 

5 opinion made, within the scope of individual’s 

6 as a member of the expert panel. 

7 ‘‘(3) DETERMINATION.— 

8 ‘‘(A) IN GENERAL.—After a review under 

9 paragraph (1), an expert panel shall make a de10 termination as to the liability of the parties in11 volved and compensation. 

12 ‘‘(B) CONSIDERATIONS IN MAKING DETER13 MINATIONS.—In making a determination under 

14 this subsection as to the liability of parties in15 volved and compensation, the following shall 

16 apply: 

17 ‘‘(i) TREATMENT OF CLINICAL PRAC18 TICE GUIDELINES.—An expert panel shall 

19 acknowledge the ability of physicians to de20 part from the recommendations in clinical 

21 practice guidelines, when appropriate, in 

22 the care of individual patients. 

23 ‘‘(ii) LIMITATION.—An expert panel 

24 shall not make a finding of negligence 

25 from the mere fact that a treatment or 


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1 procedure was unsuccessful or failed to 

2 bring the best result. 

3 ‘‘(4) EARLY OFFER.—If the parties to a dispute 

4 before an expert panel under this subsection accept 

5 the determination of the expert panel concerning li6 ability and compensation, such compensation shall 

7 be paid to the claimant and the claimant shall agree 

8 to forgo any further action against the health care 

9 providers involved. 

10 ‘‘(5) FAILURE TO ACCEPT.—If any party de11 cides not to accept the expert panel’s determination, 

12 the matter shall be referred to an administrative 

13 health care tribunal created pursuant to this section. 

14 ‘‘(e) ADMINISTRATIVE HEALTH CARE TRIBUNALS.— 

15 ‘‘(1) IN GENERAL.—Upon the failure of any 

16 party to accept the determination of an expert panel 

17 under subsection (d), the parties shall have the right 

18 to request a hearing concerning the liability or com19 pensation involved by an administrative health care 

20 tribunal established by the State involved. 

21 ‘‘(2) REQUIREMENTS.—In establishing an ad22 ministrative health care tribunal under this section, 

23 a State shall— 


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1 ‘‘(A) ensure that such tribunals are pre2 sided over by special judges with health care ex3 pertise; 

4 ‘‘(B) provide authority to such judges to 

5 make binding rulings, rendered in written deci6 sions, on standards of care, causation, com7 pensation, and related issues with reliance on 

8 independent expert witnesses commissioned by 

9 the tribunal; 

10 ‘‘(C) establish gross negligence as the legal 

11 standard for the tribunal; and 

12 ‘‘(D) allow the admission into evidence of 

13 the recommendation made by the expert panel 

14 under subsection (d). 

15 ‘‘(f) REVIEW BY STATE COURT AFTER EXHAUSTION

16 OF ADMINISTRATIVE REMEDIES.— 

17 ‘‘(1) RIGHT TO FILE.—If any party to a dispute 

18 before a health care tribunal under subsection (e) is 

19 not satisfied with the determinations of the tribunal, 

20 the party shall have the right to file their claim in 

21 a State court of competent jurisdiction. 

22 ‘‘(2) FORFEIT OF AWARDS.—Any party filing 

23 an action in a State court in accordance with para24 graph (1) shall forfeit any compensation award 

25 made under subsection (e). 


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1 ‘‘(3) ADMISSIBILITY.—The determinations of 

2 the expert panel and the administrative health care 

3 tribunal pursuant to subsections (d) and (e) with re4 spect to a State court proceeding under paragraph 

5 (1) shall be admissible into evidence in any such 

6 State court proceeding. 

7 ‘‘(4) TREATMENT OF CERTAIN EXPERT PANEL

8 AND ADMINISTRATIVE HEALTH CARE TRIBUNAL

9 FINDINGS.— 

10 ‘‘(A) WORK PRODUCT.—No finding by an 

11 expert panel under subsection (d) or adminis12 trative health care tribunal under subsection (e) 

13 that the defendant applicable eligible profes14 sional breached the standard of care as set 

15 forth under the prescribed practice guidelines 

16 shall constitute negligence per se or conclusive 

17 evidence of liability. 

18 ‘‘(B) FINDING RELATING TO CLINICAL

19 PRACTICE GUIDELINES.—If an administrative 

20 health care tribunal did not make a finding 

21 under subsection (e) that there was an applica22 ble clinical practice guideline that the defendant 

23 adhered to, with respect to the State court pro24 ceeding under paragraph (1) the State court 

25 may issue summary judgment in favor of the 


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1 defendant health care professional unless the 

2 claimant is able to show otherwise by clear and 

3 convincing evidence. If an administrative health 

4 care tribunal made a finding under subsection 

5 (e) that there was an applicable clinical practice 

6 guideline that the defendant adhered to, with 

7 respect to a State court proceeding under para8 graph (1) the State court shall issue summary 

9 judgment in favor of the applicable health care 

10 professional unless the claimant is able to show 

11 otherwise by clear and convincing evidence. 

12 ‘‘(C) FINDING RELATING TO STANDARD OF

13 CARE.—Any finding an expert panel or adminis14 trative health care tribunal under subsection (d) 

15 or (e), respectively, that the defendant did not 

16 breach the standard of care as set forth under 

17 the prescribed clinical practice guidelines or 

18 that the defendant’s failure to conform to the 

19 required standard was neither the cause in fact 

20 nor the proximate cause of the plaintiff’s injury 

21 or that the plaintiff did not incur any damages 

22 as a result shall be given deference by the State 

23 court involved and shall entitle the defendant to 

24 summary judgment unless the plaintiff is able 

25 to show by clear and convincing evidence that 


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1 the expert panel or health care tribunal, respec2 tively, was in error and that there is a genuine 

3 issue as to a material fact in the case. 

4 ‘‘(g) DEFINITION.—In this section, the term ‘health 

5 care provider’ means any person or entity required by 

6 State or Federal laws or regulations to be licensed, reg7 istered, or certified to provide health care services, and 

8 being either so licensed, registered, or certified, or exempt9 ed from such requirement by other statute or regulation. 

10 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

11 are authorized to be appropriated for any fiscal year such 

12 sums as may be necessary for purposes of making grants 

13 to States under this section.’’. 

14 SEC. 403. PAYMENT OF DAMAGES AND RECOVERY OF 

15 COSTS IN HEALTH CARE LAWSUITS. 

16 (a) AUTHORIZATION OF PAYMENT OF FUTURE DAM17 AGES TO CLAIMANTS IN HEALTH CARE LAWSUITS.—In 

18 any health care lawsuit, if an award of future damages, 

19 without reduction to present value, equaling or exceeding 

20 $50,000 is made against a party with sufficient insurance 

21 or other assets to fund a periodic payment of such a judg22 ment, the court shall, at the request of any party, enter 

23 a judgment ordering that the future damages be paid by 

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1 tional Conference of Commissioners on Uniform State 

2 Laws. 

3 (b) RECOVERY OF COSTS; PAYMENT OF AWARD.— 

4 In any health care lawsuit, the court may supervise the 

5 arrangements for payment of damages to protect against 

6 conflicts of interest that may have the effect of reducing 

7 the amount of damages awarded that are actually paid 

8 to claimants. In particular, in any health care lawsuit in 

9 which the attorney for a party claims a financial stake 

10 in the outcome by virtue of a contingent fee, the court 

11 shall have the power to restrict the payment of a claim12 ant’s damage recovery to such attorney, and to redirect 

13 such damages to the claimant based upon the interests 

14 of justice and principles of equity. 

15 (c) APPLICABILITY.—This section applies to all ac16 tions which have not been first set for trial or retrial be17 fore the effective date of this title. 

18 (d) STATUTE OF LIMITATIONS.—Except in the case 

19 of a State law that provides for a shorter period of time, 

20 the time for the commencement of a health care lawsuit 

21 shall be no more than 3 years after the date of manifesta22 tion of injury or 1 year after the claimant discovers, or 

23 through the use of reasonable diligence should have discov24 ered, the injury, whichever occurs first. In no event shall 

25 the time for commencement of a health care lawsuit exceed 


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1 3 years after the date of manifestation of injury unless 

2 tolled for any of the following— 

3 (1) upon proof of fraud; 

4 (2) intentional concealment; or 

5 (3) the presence of a foreign body, which has no 

6 therapeutic or diagnostic purpose or effect, in the 

7 person of the injured person. 

8 Except in the case of a State law that provides for a short9 er period of time, actions by a minor shall be commenced 

10 within 3 years from the date of the alleged manifestation 

11 of injury except that actions by a minor under the full 

12 age of 6 years shall be commenced within 3 years of mani13 festation of injury or prior to the minor’s 8th birthday, 

14 whichever provides a longer period. Such time limitation 

15 shall be tolled for minors for any period during which a 

16 parent or guardian and a health care provider or health 

17 care organization have committed fraud or collusion in the 

18 failure to bring an action on behalf of the injured minor. 

19 (e) FAIR SHARE RULE.—In any health care lawsuit, 

20 each party shall be liable for that party’s several share 

21 of any damages only and not for the share of any other 

22 person. Each party shall be liable only for the amount of 

23 damages allocated to such party in direct proportion to 

24 such party’s percentage of responsibility. Whenever a 

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1 rate judgment shall be rendered against each such party 

2 for the amount allocated to such party. For purposes of 

3 this section, the trier of fact shall determine the propor4 tion of responsibility of each party for the claimant’s 

5 harm. 

6 (f) APOLOGIES.—In any health care lawsuit, if a 

7 claimant receives any expression of regret for any act per8 taining to conduct giving rise to the health care lawsuit, 

9 such expression of regret, notwithstanding any applicable 

10 rule of evidence may not be admitted into evidence in the 

11 health care lawsuit. 

12 SEC. 404. DEFINITIONS. 

13 In this title: 

14 (1) ALTERNATIVE DISPUTE RESOLUTION SYS15 TEM; ADR.—The term ‘‘alternative dispute resolution 

16 system’’ or ‘‘ADR’’ means a system that provides 

17 for the resolution of health care lawsuits in a man18 ner other than through a civil action brought in a 

19 State or Federal court. 

20 (2) CLAIMANT.—The term ‘‘claimant’’ means 

21 any person who brings a health care lawsuit, includ22 ing a person who asserts or claims a right to legal 

23 or equitable contribution, indemnity, or subrogation, 

24 arising out of a health care liability claim or action, 

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1 serted or such an action is brought, whether de2 ceased, incompetent, or a minor. 

3 (3) FEDERAL TAX BENEFIT.—A claimant shall 

4 be treated as receiving a Federal tax benefit with re5 spect to payment for items or services if— 

6 (A) such payment is compensation by in7 surance— 

8 (i) which constitutes medical care, and 

9 (ii) with respect to the payment of 

10 premiums for which the claimant, or the 

11 employer of the claimant, was allowed an 

12 exclusion from gross income, a deduction, 

13 or a credit for Federal income tax pur14 poses, 

15 (B) a deduction was allowed with respect 

16 to such payment for Federal income tax pur17 poses, or 

18 (C) such payment was from an Archer 

19 MSA (as defined in section 220(d) of the Inter20 nal Revenue Code of 1986), a health savings 

21 account (as defined in section 223(d) of such 

22 Code), a flexible spending arrangement (as de23 fined in section 106(c)(2) of such Code), or a 

24 health reimbursement arrangement which is 

25 treated as employer-provided coverage under an 


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1 accident or health plan for purposes of section 

2 106 of such Code. 

3 (4) HEALTH CARE LAWSUIT.—The term 

4 ‘‘health care lawsuit’’ means any health care liability 

5 claim concerning the provision of health care goods 

6 or services brought in a Federal court or in a State 

7 court or pursuant to an alternative dispute resolu8 tion system, if such claim concerns items or services 

9 for which coverage is provided under title XVIII, 

10 XIX, or XXI of the Social Security Act or for which 

11 the claimant receives a Federal tax benefit, against 

12 a health care provider, a health care organization, or 

13 the manufacturer, distributor, supplier, marketer, 

14 promoter, or seller of a medical product, regardless 

15 of the theory of liability on which the claim is based, 

16 or the number of claimants, plaintiffs, defendants, 

17 or other parties, or the number of claims or causes 

18 of action, in which the claimant alleges a health care 

19 liability claim. Such term does not include a claim 

20 or action which is based on criminal liability; which 

21 seeks civil fines or penalties paid to Federal Govern22 ment; or which is grounded in antitrust. 

23 (5) HEALTH CARE LIABILITY ACTION.—The 

24 term ‘‘health care liability action’’ means a civil ac25 tion brought in a State or Federal court or pursuant 


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1 to an alternative dispute resolution system, against 

2 a health care provider, a health care organization, or 

3 the manufacturer, distributor, supplier, marketer, 

4 promoter, or seller of a medical product, regardless 

5 of the theory of liability on which the claim is based, 

6 or the number of plaintiffs, defendants, or other par7 ties, or the number of causes of action, in which the 

8 claimant alleges a health care liability claim. 

9 (6) HEALTH CARE LIABILITY CLAIM.—The 

10 term ‘‘health care liability claim’’ means a demand 

11 by any person, whether or not pursuant to ADR, 

12 against a health care provider, health care organiza13 tion, or the manufacturer, distributor, supplier, mar14 keter, promoter, or seller of a medical product, in15 cluding, but not limited to, third-party claims, cross16 claims, counter-claims, or contribution claims, which 

17 are based upon the provision of, use of, or payment 

18 for (or the failure to provide, use, or pay for) health 

19 care services or medical products, regardless of the 

20 theory of liability on which the claim is based, or the 

21 number of plaintiffs, defendants, or other parties, or 

22 the number of causes of action. 

23 (7) HEALTH CARE ORGANIZATION.—The term 

24 ‘‘health care organization’’ means any person or en25 tity which is obligated to provide or pay for health 


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1 benefits under any health plan, including any person 

2 or entity acting under a contract or arrangement 

3 with a health care organization to provide or admin4 ister any health benefit. 

5 (8) HEALTH CARE PROVIDER.—The term 

6 ‘‘health care provider’’ means any person or entity 

7 required by State or Federal laws or regulations to 

8 be licensed, registered, or certified to provide health 

9 care services, and being either so licensed, reg10 istered, or certified, or exempted from such require11 ment by other statute or regulation. 

12 (9) HEALTH CARE GOODS OR SERVICES.—The 

13 term ‘‘health care goods or services’’ means any 

14 goods or services provided by a health care organiza15 tion, provider, or by any individual working under 

16 the supervision of a health care provider, that relates 

17 to the diagnosis, prevention, or treatment of any 

18 human disease or impairment, or the assessment or 

19 care of the health of human beings. 

20 (10) MEDICAL PRODUCT.—The term ‘‘medical 

21 product’’ means a drug, device, or biological product 

22 intended for humans, and the terms ‘‘drug’’, ‘‘de23 vice’’, and ‘‘biological product’’ have the meanings 

24 given such terms in sections 201(g)(1) and 201(h) 

25 of the Federal Food, Drug and Cosmetic Act (21 


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1 U.S.C. 321(g)(1) and (h)) and section 351(a) of the 

2 Public Health Service Act (42 U.S.C. 262(a)), re3 spectively, including any component or raw material 

4 used therein, but excluding health care services. 

5 (11) MEDICAL TREATMENT.—The term ‘‘med6 ical treatment’’ means the provision of any goods or 

7 services by a health care provider or by any indi8 vidual working under the supervision of a health 

9 care provider, that relates to the diagnosis, preven10 tion, or treatment of any human disease or impair11 ment, or the assessment or care of the health of 

12 human beings. 

13 (12) RECOVERY.—The term ‘‘recovery’’ means 

14 the net sum recovered after deducting any disburse15 ments or costs incurred in connection with prosecu16 tion or settlement of the claim, including all costs 

17 paid or advanced by any person. Costs of health care 

18 incurred by the plaintiff and the attorneys’ office 

19 overhead costs or charges for legal services are not 

20 deductible disbursements or costs for such purpose. 

21 (13) STATE.—The term ‘‘State’’ means each of 

22 the several States, the District of Columbia, the 

23 Commonwealth of Puerto Rico, the Virgin Islands, 

24 Guam, American Samoa, the Northern Mariana Is25 lands, the Trust Territory of the Pacific Islands, and 


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1 any other territory or possession of the United 

2 States, or any political subdivision thereof. 

3 SEC. 405. EFFECT ON OTHER LAWS. 

4 (a) VACCINE INJURY.— 

5 (1) To the extent that title XXI of the Public 

6 Health Service Act establishes a Federal rule of law 

7 applicable to a civil action brought for a vaccine-re8 lated injury or death— 

9 (A) this title does not affect the application 

10 of the rule of law to such an action; and 

11 (B) any rule of law prescribed by this title 

12 in conflict with a rule of law of such title XXI 

13 shall not apply to such action. 

14 (2) If there is an aspect of a civil action 

15 brought for a vaccine-related injury or death to 

16 which a Federal rule of law under title XXI of the 

17 Public Health Service Act does not apply, then this 

18 title or otherwise applicable law (as determined 

19 under this title) will apply to such aspect of such ac20 tion. 

21 (b) OTHER FEDERAL LAW.—Except as provided in 

22 this section, nothing in this title shall be deemed to affect 

23 any defense available to a defendant in a health care law24 suit or action under any other provision of Federal law. 


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1 SEC. 406. APPLICABILITY; EFFECTIVE DATE. 

2 This title shall apply to any health care lawsuit 

3 brought in a Federal or State court, or subject to an alter4 native dispute resolution system, that is initiated on or 

5 after the date of the enactment of this title, except that 

6 any health care lawsuit arising from an injury occurring 

7 prior to the date of the enactment of this title shall be 

8 governed by the applicable statute of limitations provisions 

9 in effect at the time the injury occurred. 

10 TITLE V—WELLNESS AND 

11 PREVENTION 

12 SEC. 501. PROVIDING FINANCIAL INCENTIVES FOR TREAT13 MENT COMPLIANCE. 

14 (a) LIMITATION ON EXCEPTION FOR WELLNESS

15 PROGRAMS UNDER HIPAA DISCRIMINATION RULES.— 

16 (1) EMPLOYEE RETIREMENT INCOME SECURITY

17 ACT OF 1974 AMENDMENT.—Section 702(b)(2) of the 

18 Employee Retirement Income Security Act of 1974 

19 (29 U.S.C. 1182(b)(2)) is amended by adding after 

20 and below subparagraph (B) the following: 

21 ‘‘In applying subparagraph (B), a group health plan 

22 (or a health insurance issuer with respect to health 

23 insurance coverage) may vary premiums and cost24 sharing by up to 50 percent of the value of the bene25 fits under the plan (or coverage) based on participaVerDate Sep 11 2014 04:33 May 20, 2015 Jkt 049200 PO 00000 Frm 00211 Fmt 6652 Sfmt 6201 E:\BILLS\H2300.IH H2300

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1 tion (or lack of participation) in a standards-based 

2 wellness program.’’. 

3 (2) PHSA AMENDMENT.—Section 2702(b)(2) 

4 of the Public Health Service Act (42 U.S.C. 300gg– 

5 1(b)(2)) is amended by adding after and below sub6 paragraph (B) the following: 

7 ‘‘In applying subparagraph (B), a group health plan 

8 (or a health insurance issuer with respect to health 

9 insurance coverage) may vary premiums and cost10 sharing by up to 50 percent of the value of the bene11 fits under the plan (or coverage) based on participa12 tion (or lack of participation) in a standards-based 

13 wellness program.’’. 

14 (3) IRC AMENDMENT.—Section 9802(b)(2) of 

15 the Internal Revenue Code of 1986 is amended by 

16 adding after and below subparagraph (B) the fol17 lowing: 

18 ‘‘In applying subparagraph (B), a group health plan 

19 may vary premiums and cost-sharing by up to 50 

20 percent of the value of the benefits under the plan 

21 based on participation (or lack of participation) in a 

22 standards-based wellness program.’’. 

23 (b) EFFECTIVE DATE.—The amendments made by 

24 subsection (a) shall apply to plan years beginning more 

25 than 1 year after the date of the enactment of this Act. 


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1 TITLE VI—TRANSPARENCY AND 

2 INSURANCE REFORM MEASURES 

3 SEC. 601. RECEIPT AND RESPONSE TO REQUESTS FOR 

4 CLAIM INFORMATION. 

5 (a) IN GENERAL.—Title XXVII of the Public Health 

6 Service Act is amended by inserting after section 2713 the 

7 following new section: 

8 ‘‘SEC. 2714. RECEIPT AND RESPONSE TO REQUESTS FOR 

9 CLAIM INFORMATION. 

10 ‘‘(a) REQUIREMENT.— 

11 ‘‘(1) IN GENERAL.—In the case of health insur12 ance coverage offered in connection with a group 

13 health plan, not later than the 30th day after the 

14 date a health insurance issuer receives a written re15 quest for a written report of claim information from 

16 the plan, plan sponsor, or plan administrator, the 

17 health insurance issuer shall provide the requesting 

18 party the report, subject to the succeeding provisions 

19 of this section. 

20 ‘‘(2) EXCEPTION.—The health insurance issuer 

21 is not obligated to provide a report under this sub22 section regarding a particular employer or group 

23 health plan more than twice in any 12-month period 

24 and is not obligated to provide such a report in the 

25 case of an employer with fewer than 50 employees. 


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1 ‘‘(3) DEADLINE.—A plan, plan sponsor, or plan 

2 administrator must request a report under this sub3 section before or on the second anniversary of the 

4 date of termination of coverage under a group health 

5 plan issued by the health insurance issuer. 

6 ‘‘(b) FORM OF REPORT; INFORMATION TO BE IN7 CLUDED.— 

8 ‘‘(1) IN GENERAL.—A health insurance issuer 

9 shall provide the report of claim information under 

10 subsection (a)— 

11 ‘‘(A) in a written report; 

12 ‘‘(B) through an electronic file transmitted 

13 by secure electronic mail or a file transfer pro14 tocol site; or 

15 ‘‘(C) by making the required information 

16 available through a secure Web site or Web por17 tal accessible by the requesting plan, plan spon18 sor, or plan administrator. 

19 ‘‘(2) INFORMATION TO BE INCLUDED.—A re20 port of claim information provided under subsection 

21 (a) shall contain all information available to the 

22 health insurance issuer that is responsive to the re23 quest made under such subsection, including, subject 

24 to subsection (c), protected health information, for 

25 the 36-month period preceding the date of the report 


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1 or the period specified by subparagraphs (D), (E), 

2 and (F) of paragraph (3), if applicable, or for the 

3 entire period of coverage, whichever period is short4 er. 

5 ‘‘(3) REQUIRED INFORMATION.—Subject to 

6 subsection (c), a report provided under subsection 

7 (a) shall include the following: 

8 ‘‘(A) Aggregate paid claims experience by 

9 month, including claims experience for medical, 

10 dental, and pharmacy benefits, as applicable. 

11 ‘‘(B) Total premium paid by month. 

12 ‘‘(C) Total number of covered employees 

13 on a monthly basis by coverage tier, including 

14 whether coverage was for— 

15 ‘‘(i) an employee only; 

16 ‘‘(ii) an employee with dependents 

17 only; 

18 ‘‘(iii) an employee with a spouse only; 

19 or 

20 ‘‘(iv) an employee with a spouse and 

21 dependents. 

22 ‘‘(D) The total dollar amount of claims 

23 pending as of the date of the report. 

24 ‘‘(E) A separate description and individual 

25 claims report for any individual whose total 


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1 paid claims exceed $15,000 during the 12- 

2 month period preceding the date of the report, 

3 including the following information related to 

4 the claims for that individual— 

5 ‘‘(i) a unique identifying number, 

6 characteristic, or code for the individual; 

7 ‘‘(ii) the amounts paid; 

8 ‘‘(iii) dates of service; and 

9 ‘‘(iv) applicable procedure codes and 

10 diagnosis codes. 

11 ‘‘(F) For claims that are not part of the 

12 information described in a previous subpara13 graph, a statement describing precertification 

14 requests for hospital stays of 5 days or longer 

15 that were made during the 30-day period pre16 ceding the date of the report. 

17 ‘‘(c) LIMITATIONS ON DISCLOSURE.— 

18 ‘‘(1) IN GENERAL.—A health insurance issuer 

19 may not disclose protected health information in a 

20 report of claim information provided under this sec21 tion if the health insurance issuer is prohibited from 

22 disclosing that information under another State or 

23 Federal law that imposes more stringent privacy re24 strictions than those imposed under Federal law 

25 under the HIPAA privacy regulations. To withhold 


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1 information in accordance with this subsection, the 

2 health insurance issuer must— 

3 ‘‘(A) notify the plan, plan sponsor, or plan 

4 administrator requesting the report that infor5 mation is being withheld; and 

6 ‘‘(B) provide to the plan, plan sponsor, or 

7 plan administrator a list of categories of claim 

8 information that the health insurance issuer has 

9 determined are subject to the more stringent 

10 privacy restrictions under another State or Fed11 eral law. 

12 ‘‘(2) PROTECTION.—A plan sponsor is entitled 

13 to receive protected health information under sub14 paragraph (E) and (F) of subsection (b)(3) and sub15 section (d) only after an appropriately authorized 

16 representative of the plan sponsor makes to the 

17 health insurance issuer a certification substantially 

18 similar to the following certification: ‘I hereby certify 

19 that the plan documents comply with the require20 ments of section 164.504(f)(2) of title 45, Code of 

21 Federal Regulations, and that the plan sponsor will 

22 safeguard and limit the use and disclosure of pro23 tected health information that the plan sponsor may 

24 receive from the group health plan to perform the 

25 plan administration functions.’. 


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1 ‘‘(3) RESULTS.—A plan sponsor that does not 

2 provide the certification required by paragraph (2) is 

3 not entitled to receive the protected health informa4 tion described by subparagraphs (E) and (F) of sub5 section (b)(3) and subsection (d), but is entitled to 

6 receive a report of claim information that includes 

7 the information described by subparagraphs (A) 

8 through (D) of subsection (b)(3). 

9 ‘‘(4) INFORMATION.—In the case of a request 

10 made under subsection (a) after the date of termi11 nation of coverage, the report must contain all infor12 mation available to the health insurance issuer as of 

13 the date of the report that is responsive to the re14 quest, including protected health information, and 

15 including the information described by subsection 

16 (b)(3), for the period described by subsection (b)(2) 

17 preceding the date of termination of coverage or for 

18 the entire policy period, whichever period is shorter. 

19 Notwithstanding this subsection, the report may not 

20 include the protected health information described 

21 by subparagraphs (E) and (F) of subsection (b)(3) 

22 unless a certification has been provided in accord23 ance with paragraph (2). 

24 ‘‘(d) REQUEST FOR ADDITIONAL INFORMATION.— 


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1 ‘‘(1) REVIEW.—On receipt of the report re2 quired by subsection (a), the plan, plan sponsor, or 

3 plan administrator may review the report and, not 

4 later than the 10th day after the date the report is 

5 received, may make a written request to the health 

6 insurance issuer for additional information in ac7 cordance with this subsection for specified individ8 uals. 

9 ‘‘(2) REQUEST.—With respect to a request for 

10 additional information concerning specified individ11 uals for whom claims information has been provided 

12 under subsection (b)(3)(E), the health insurance 

13 issuer shall provide additional information on the 

14 prognosis or recovery if available and, for individuals 

15 in active case management, the most recent case 

16 management information, including any future ex17 pected costs and treatment plan, that relate to the 

18 claims for that individual. 

19 ‘‘(3) RESPONSE.—The health insurance issuer 

20 must respond to the request for additional informa21 tion under this subsection not later than the 15th 

22 day after the date of such request unless the re23 questing plan, plan sponsor, or plan administrator 

24 agrees to a request for additional time. 


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1 ‘‘(4) LIMITATION.—The health insurance issuer 

2 is not required to produce the report described by 

3 this subsection unless a certification has been pro4 vided in accordance with subsection (c)(2). 

5 ‘‘(5) COMPLIANCE WITH SECTION DOES NOT

6 CREATE LIABILITY.—A health insurance issuer that 

7 releases information, including protected health in8 formation, in accordance with this subsection has 

9 not violated a standard of care and is not liable for 

10 civil damages resulting from, and is not subject to 

11 criminal prosecution for, releasing that information. 

12 ‘‘(e) LIMITATION ON PREEMPTION.—Nothing in this 

13 section is meant to limit States from enacting additional 

14 laws in addition to the provisions of this section, but not 

15 in lieu of such provisions. 

16 ‘‘(f) DEFINITIONS.—In this section: 

17 ‘‘(1) The terms ‘employer’, ‘plan administrator’, 

18 and ‘plan sponsor’ have the meanings given such 

19 terms in section 3 of the Employee Retirement In20 come Security Act of 1974. 

21 ‘‘(2) The term ‘HIPAA privacy regulations’ has 

22 the meaning given such term in section 1180(b)(3) 

23 of the Social Security Act. 


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1 ‘‘(3) The term ‘protected health information’ 

2 has the meaning given such term under the HIPAA 

3 privacy regulations.’’. 

4 (b) EFFECTIVE DATE.—The amendment made by 

5 subsection (a) shall take effect on the date of the enact6 ment of this Act. 

7 TITLE VII—QUALITY 

8 SEC. 701. PROHIBITION ON CERTAIN USES OF DATA OB9 TAINED FROM COMPARATIVE EFFECTIVE10 NESS RESEARCH OR FROM PATIENT-CEN11 TERED OUTCOMES RESEARCH; ACCOUNTING 

12 FOR PERSONALIZED MEDICINE AND DIF13 FERENCES IN PATIENT TREATMENT RE14 SPONSE. 

15 (a) IN GENERAL.—Notwithstanding any other provi16 sion of law, the Secretary of Health and Human Serv17 ices— 

18 (1) shall not use data obtained from the con19 duct of comparative effectiveness research or pa20 tient-centered outcomes research, including such re21 search that is conducted or supported using funds 

22 appropriated under the American Recovery and Re23 investment Act of 2009 (Public Law 111–5), to deny 

24 coverage of an item or service under a Federal 

25 health care program (as defined in section 1128B(f) 


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1 of the Social Security Act (42 U.S.C. 1320a–7b(f))); 

2 and 

3 (2) shall ensure that comparative effectiveness 

4 research and patient-centered outcomes research 

5 conducted or supported by the Federal Government 

6 accounts for factors contributing to differences in 

7 the treatment response and treatment preferences of 

8 patients, including patient-reported outcomes, 

9 genomics and personalized medicine, the unique 

10 needs of health disparity populations, and indirect 

11 patient benefits. 

12 (b) CONSULTATION AND APPROVAL REQUIRED.— 

13 Nothing the Federal Coordinating Council for Compara14 tive Effectiveness Research finds can be released in final 

15 form until after consultation with and approved by rel16 evant physician specialty organizations. 

17 (c) RULE OF CONSTRUCTION.—Nothing in this sec18 tion shall be construed as affecting the authority of the 

19 Commissioner of Food and Drugs under the Federal 

20 Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) 

21 or the Public Health Service Act (42 U.S.C. 201 et seq.). 

22 SEC. 702. ESTABLISHMENT OF PERFORMANCE-BASED 

23 QUALITY MEASURES. 

24 Not later than January 1, 2016, the Secretary of 

25 Health and Human Services shall submit to Congress a 


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1 proposal for a formalized process for the development of 

2 performance-based quality measures that could be applied 

3 to physicians’ services under the Medicare program under 

4 title XVIII of the Social Security Act (42 U.S.C. 1395 

5 et seq.). Such proposal shall be in concert and agreement 

6 with the Physician Consortium for Performance Improve7 ment and shall only utilize measures agreed upon by each 

8 physician specialty organization. 

9 TITLE VIII—STATE 

10 TRANSPARENCY PLAN PORTAL 

11 SEC. 801. PROVIDING INFORMATION ON HEALTH COV12 ERAGE OPTIONS AND HEALTH CARE PRO13 VIDERS. 

14 (a) STATE-BASED PORTAL.—A State (by itself or 

15 jointly with other States) may contract with a private enti16 ty to establish a Health Plan and Provider Portal Web 

17 site (referred to in this section as a ‘‘plan portal’’) for 

18 the purposes of providing standardized information— 

19 (1) on health insurance plans that have been 

20 certified to be available for purchase in that State; 

21 and 

22 (2) on price and quality information on health 

23 care providers (including physicians, hospitals, and 

24 other health care institutions). 

25 (b) PROHIBITIONS.— 


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1 (1) DIRECT ENROLLMENT.—A plan portal may 

2 not directly enroll individuals in health insurance 

3 plans or under a State Medicaid plan or a State 

4 children’s health insurance plan. 

5 (2) CONFLICTS OF INTEREST.— 

6 (A) COMPANIES.—A health insurance 

7 issuer offering a health insurance plan through 

8 a plan portal may not— 

9 (i) be the private entity developing 

10 and maintaining a plan portal under this 

11 section; or 

12 (ii) have an ownership interest in such 

13 private entity or in the plan portal. 

14 (B) INDIVIDUALS.—An individual em15 ployed by a health insurance issuer offering a 

16 health insurance plan through a plan portal 

17 may not serve as a director or officer for— 

18 (i) the private entity developing and 

19 maintaining a plan portal under this sec20 tion; or 

21 (ii) the plan portal. 

22 (c) CONSTRUCTION.—Nothing in this section shall be 

23 construed to prohibit health insurance brokers and agents 

24 from— 

25 (1) utilizing the plan portal for any purpose; or 


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1 (2) marketing or offering health insurance 

2 products. 

3 (d) STATE DEFINED.—In this section, the term 

4 ‘‘State’’ has the meaning given such term for purposes of 

5 title XIX of the Social Security Act. 

6 (e) HEALTH INSURANCE PLANS.—For purposes of 

7 this section, the term ‘‘health insurance plan’’ does not 

8 include coverage of excepted benefits, as defined in section 

9 2791(c) of the Public Health Service Act (42 U.S.C. 

10 300gg–91(c)). 

11 TITLE IX—PATIENT FREEDOM 

12 OF CHOICE 

13 SEC. 901. GUARANTEEING FREEDOM OF CHOICE AND CON14 TRACTING FOR PATIENTS UNDER MEDICARE. 

15 (a) IN GENERAL.—Section 1802 of the Social Secu16 rity Act (42 U.S.C. 1395a) is amended to read as follows: 

17 ‘‘FREEDOM OF CHOICE AND CONTRACTING BY PATIENT

18 GUARANTEED

19 ‘‘SEC. 1802. (a) BASIC FREEDOM OF CHOICE.—Any 

20 individual entitled to insurance benefits under this title 

21 may obtain health services from any institution, agency, 

22 or person qualified to participate under this title if such 

23 institution, agency, or person undertakes to provide that 

24 individual such services. 

25 ‘‘(b) FREEDOM TO CONTRACT BY MEDICARE BENE26 FICIARIES.— 


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1 ‘‘(1) IN GENERAL.—Subject to the provisions of 

2 this subsection, nothing in this title shall prohibit a 

3 Medicare beneficiary from entering into a contract 

4 with an eligible professional (whether or not the pro5 fessional is a participating or non-participating phy6 sician or practitioner) for any item or service cov7 ered under this title. 

8 ‘‘(2) SUBMISSION OF CLAIMS.—Any Medicare 

9 beneficiary that enters into a contract under this 

10 section with an eligible professional shall be per11 mitted to submit a claim for payment under this 

12 title for services furnished by such professional, and 

13 such payment shall be made in the amount that 

14 would otherwise apply to such professional under 

15 this title except that where such professional is con16 sidered to be non-participating, payment shall be 

17 paid as if the professional were participating. Pay18 ment made under this title for any item or service 

19 provided under the contract shall not render the pro20 fessional a participating or non-participating physi21 cian or practitioner, and as such, requirements of 

22 this title that may otherwise apply to a participating 

23 or non-participating physician or practitioner would 

24 not apply with respect to any items or services fur25 nished under the contract. 


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1 ‘‘(3) BENEFICIARY PROTECTIONS.— 

2 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

3 not apply to any contract unless— 

4 ‘‘(i) the contract is in writing, is 

5 signed by the Medicare beneficiary and the 

6 eligible professional, and establishes all 

7 terms of the contract (including specific 

8 payment for items and services covered by 

9 the contract) before any item or service is 

10 provided pursuant to the contract, and the 

11 beneficiary shall be held harmless for any 

12 subsequent payment charged for an item 

13 or service in excess of the amount estab14 lished under the contract during the period 

15 the contract is in effect; 

16 ‘‘(ii) the contract contains the items 

17 described in subparagraph (B); and 

18 ‘‘(iii) the contract is not entered into 

19 at a time when the Medicare beneficiary is 

20 facing an emergency medical condition or 

21 urgent health care situation. 

22 ‘‘(B) ITEMS REQUIRED TO BE INCLUDED

23 IN CONTRACT.—Any contract to provide items 

24 and services to which paragraph (1) applies 


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1 shall clearly indicate to the Medicare beneficiary 

2 that by signing such contract the beneficiary— 

3 ‘‘(i) agrees to be responsible for pay4 ment to such eligible professional for such 

5 items or services under the terms of and 

6 amounts established under the contract; 

7 ‘‘(ii) agrees to be responsible for sub8 mitting claims under this title to the Sec9 retary, and to any other supplemental in10 surance plan that may provide supple11 mental insurance, for such items or serv12 ices furnished under the contract if such 

13 items or services are covered by this title, 

14 unless otherwise provided in the contract 

15 under subparagraph (C)(i); and 

16 ‘‘(iii) acknowledges that no limits or 

17 other payment incentives that may other18 wise apply under this title (such as the 

19 limits under subsection (g) of section 1848 

20 or incentives under subsections (a)(5), (m), 

21 (q), and (p) of such section) shall apply to 

22 amounts that may be charged, or paid to 

23 a beneficiary for, such items or services. 

24 Such contract shall also clearly indicate whether 

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1 ticipation under the Medicare program under 

2 section 1128. 

3 ‘‘(C) BENEFICIARY ELECTIONS UNDER

4 THE CONTRACT.—Any Medicare beneficiary 

5 that enters into a contract under this section 

6 may elect to negotiate, as a term of the con7 tract, a provision under which— 

8 ‘‘(i) the eligible professional shall file 

9 claims on behalf of the beneficiary with the 

10 Secretary and any supplemental insurance 

11 plan for items or services furnished under 

12 the contract if such items or services are 

13 covered under this title or under the plan; 

14 and 

15 ‘‘(ii) the beneficiary assigns payment 

16 to the eligible professional for any claims 

17 filed by, or on behalf of, the beneficiary 

18 with the Secretary and any supplemental 

19 insurance plan for items or services fur20 nished under the contract. 

21 ‘‘(D) EXCLUSION OF DUAL ELIGIBLE INDI22 VIDUALS.—Paragraph (1) shall not apply to 

23 any contract if a beneficiary who is eligible for 

24 medical assistance under title XIX is a party to 

25 the contract. 


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1 ‘‘(4) LIMITATION ON ACTUAL CHARGE AND

2 CLAIM SUBMISSION REQUIREMENT NOT APPLICA3 BLE.—Section 1848(g) shall not apply with respect 

4 to any item or service provided to a Medicare bene5 ficiary under a contract described in paragraph (1). 

6 ‘‘(5) CONSTRUCTION.—Nothing in this section 

7 shall be construed— 

8 ‘‘(A) to prohibit any eligible professional 

9 from maintaining an election and acting as a 

10 participating or non-participating physician or 

11 practitioner with respect to any patient not cov12 ered under a contract established under this 

13 section; and 

14 ‘‘(B) as changing the items and services 

15 for which an eligible professional may bill under 

16 this title. 

17 ‘‘(6) DEFINITIONS.—In this subsection: 

18 ‘‘(A) MEDICARE BENEFICIARY.—The term 

19 ‘Medicare beneficiary’ means an individual who 

20 is entitled to benefits under part A or enrolled 

21 under part B. 

22 ‘‘(B) ELIGIBLE PROFESSIONAL.—The term 

23 ‘eligible professional’ has the meaning given 

24 such term in section 1848(k)(3)(B). 


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1 ‘‘(C) EMERGENCY MEDICAL CONDITION.— 

2 The term ‘emergency medical condition’ means 

3 a medical condition manifesting itself by acute 

4 symptoms of sufficient severity (including se5 vere pain) such that a prudent layperson, with 

6 an average knowledge of health and medicine, 

7 could reasonably expect the absence of imme8 diate medical attention to result in— 

9 ‘‘(i) serious jeopardy to the health of 

10 the individual or, in the case of a pregnant 

11 woman, the health of the woman or her 

12 unborn child; 

13 ‘‘(ii) serious impairment to bodily 

14 functions; or 

15 ‘‘(iii) serious dysfunction of any bodily 

16 organ or part. 

17 ‘‘(D) URGENT HEALTH CARE SITUA18 TION.—The term ‘urgent health care situation’ 

19 means services furnished to an individual who 

20 requires services to be furnished within 12 

21 hours in order to avoid the likely onset of an 

22 emergency medical condition.’’. 


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1 SEC. 902. PREEMPTION OF STATE LAWS LIMITING 

2 CHARGES FOR ELIGIBLE PROFESSIONAL 

3 SERVICES. 

4 (a) IN GENERAL.—No State may impose a limit on 

5 the amount of charges for services, furnished by an eligible 

6 professional (as defined in subsection (k)(3)(B) of section 

7 1848 of the Social Security Act, 42 U.S.C. 1395w–4), for 

8 which payment is made under such section, and any such 

9 limit is hereby preempted. 

10 (b) STATE.—In this section, the term ‘‘State’’ in11 cludes the District of Columbia, Puerto Rico, the Virgin 

12 Islands, Guam, and American Samoa. 

13 SEC. 903. HEALTH CARE PROVIDER LICENSURE CANNOT BE 

14 CONDITIONED ON PARTICIPATION IN A 

15 HEALTH PLAN. 

16 (a) IN GENERAL.—The Secretary of Health and 

17 Human Services and any State (as a condition of receiving 

18 Federal financial participation under title XIX of the So19 cial Security Act) may not require any health care pro20 vider to participate in any health plan as a condition of 

21 licensure of the provider in any State. 

22 (b) DEFINITIONS.—In this section: 

23 (1) HEALTH PLAN.—The term ‘‘health plan’’ 

24 has the meaning given such term in section 1171(5) 

25 of the Social Security Act (42 U.S.C. 1320d(5)). 


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1 (2) HEALTH CARE PROVIDER.—The term 

2 ‘‘health care provider’’ means any person or entity 

3 that is required by State or Federal laws or regula4 tions to be licensed, registered, or certified to pro5 vide health care services and is so licensed, reg6 istered, or certified, or exempted from such require7 ment by other statute or regulation. 

8 (3) STATE.—The term ‘‘State’’ has the mean9 ing given such term for purposes of title XIX of the 

10 Social Security Act. 

11 SEC. 904. BAD DEBT DEDUCTION FOR DOCTORS TO PAR12 TIALLY OFFSET THE COST OF PROVIDING UN13 COMPENSATED CARE REQUIRED TO BE PRO14 VIDED UNDER AMENDMENTS MADE BY THE 

15 EMERGENCY MEDICAL TREATMENT AND 

16 LABOR ACT. 

17 (a) IN GENERAL.—Section 166 of the Internal Rev18 enue Code of 1986 (relating to bad debts) is amended by 

19 redesignating subsection (f) as subsection (g) and by in20 serting after subsection (e) the following new subsection: 

21 ‘‘(f) BAD DEBT TREATMENT FOR DOCTORS TO PAR22 TIALLY OFFSET COST OF PROVIDING UNCOMPENSATED

23 CARE REQUIRED TO BE PROVIDED.— 

24 ‘‘(1) AMOUNT OF DEDUCTION.— 


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1 ‘‘(A) IN GENERAL.—For purposes of sub2 section (a), the basis for determining the 

3 amount of any deduction for an eligible 

4 EMTALA debt shall be treated as being equal 

5 to the Medicare payment amount. 

6 ‘‘(B) MEDICARE PAYMENT AMOUNT.—For 

7 purposes of subparagraph (A), the Medicare 

8 payment amount with respect to an eligible 

9 EMTALA debt is the fee schedule amount es10 tablished under section 1848 of the Social Secu11 rity Act for the physicians’ service (to which 

12 such debt relates) as if the service were pro13 vided to an individual enrolled under part B of 

14 title XVIII of such Act. 

15 ‘‘(2) ELIGIBLE EMTALA DEBT.—For purposes 

16 of this section, the term ‘eligible EMTALA debt’ 

17 means any debt if— 

18 ‘‘(A) such debt arose as a result of physi19 cians’ services— 

20 ‘‘(i) which were performed in an 

21 EMTALA hospital by a board-certified 

22 physician (whether as part of medical 

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1 ment physician, as an on-call physician, or 

2 otherwise), and 

3 ‘‘(ii) which were required to be pro4 vided under section 1867 of the Social Se5 curity Act (42 U.S.C. 1395dd), and 

6 ‘‘(B) such debt is owed— 

7 ‘‘(i) to such physician, or 

8 ‘‘(ii) to an entity if— 

9 ‘‘(I) such entity is a corporation 

10 and the sole shareholder of such cor11 poration is such physician, or 

12 ‘‘(II) such entity is a partnership 

13 and any deduction under this sub14 section with respect to such debt is al15 located to such physician or to an en16 tity described in subclause (I). 

17 ‘‘(3) BOARD-CERTIFIED PHYSICIAN.—For pur18 poses of this subsection, the term ‘board-certified 

19 physician’ means any physician (as defined in sec20 tion 1861(r) of the Social Security Act (42 U.S.C. 

21 1395x(r))) who is certified by the American Board 

22 of Emergency Medicine or other appropriate medical 

23 specialty board for the specialty in which the physi24 cian practices, or who meets comparable require25 ments, as identified by the Secretary of the Treasury 


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1 in consultation with Secretary of Health and Human 

2 Services. 

3 ‘‘(4) OTHER DEFINITIONS.—For purposes of 

4 this subsection— 

5 ‘‘(A) EMTALA HOSPITAL.—The term 

6 ‘EMTALA hospital’ means any hospital having 

7 a hospital emergency department which is re8 quired to comply with section 1867 of the So9 cial Security Act (42 U.S.C. 1395dd) (relating 

10 to examination and treatment for emergency 

11 medical conditions and women in labor). 

12 ‘‘(B) PHYSICIANS’ SERVICES.—The term 

13 ‘physicians’ services’ has the meaning given 

14 such term in section 1861(q) of the Social Se15 curity Act (42 U.S.C. 1395x(q)).’’. 

16 (b) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to debts arising from services per18 formed in taxable years beginning after the date of the 

19 enactment of this Act. 

20 SEC. 905. RIGHT OF CONTRACT WITH HEALTH CARE PRO21 VIDERS. 

22 (a) IN GENERAL.—The Secretary of Health and 

23 Human Services shall not preclude an enrollee, partici24 pant, or beneficiary in a health benefits plan from entering 


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1 into any contract or arrangement for health care with any 

2 health care provider. 

3 (b) HEALTH BENEFITS PLAN DEFINED.— 

4 (1) IN GENERAL.—In this section, subject to 

5 paragraph (2), the term ‘‘health benefits plan’’ 

6 means any of the following: 

7 (A) Group health plan (as defined in sec8 tion 2791 of the Public Health Service Act). 

9 (B) Health insurance coverage (as defined 

10 in section 2791 of such Act). 

11 (C) A health benefits plan under chapter 

12 89 of title 5, United States Code. 

13 (2) EXCLUSION OF MEDICAID AND TRICARE.— 

14 Such term does not include a health plan partici15 pating in— 

16 (A) the Medicaid program under title XIX 

17 of the Social Security Act; or 

18 (B) the TRICARE program under chapter 

19 55 of title 10, United States Code. 

20 (c) HEALTH CARE PROVIDER DEFINED.—In this 

21 section, the term ‘‘health care provider’’ means— 

22 (1) a physician, as defined in paragraphs (1), 

23 (2), (3), and (4) of section 1861(r) of the Social Se24 curity Act (42 U.S.C. 1395x(r)); and 


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1 (2) a health care practitioner described in sec2 tion 1842(b)(18)(C) of such Act (42 U.S.C. 

3 1395u(b)(18)(C)). 

4 TITLE X—QUALITY HEALTH 

5 CARE COALITION 

6 SEC. 1001. QUALITY HEALTH CARE COALITION. 

7 (a) APPLICATION OF THE FEDERAL ANTITRUST

8 LAWS TO HEALTH CARE PROFESSIONALS NEGOTIATING

9 WITH HEALTH PLANS.— 

10 (1) IN GENERAL.—Any health care profes11 sionals who are engaged in negotiations with a 

12 health plan regarding the terms of any contract 

13 under which the professionals provide health care 

14 items or services for which benefits are provided 

15 under such plan shall, in connection with such nego16 tiations, be exempt from the Federal antitrust laws. 

17 (2) LIMITATION.— 

18 (A) NO NEW RIGHT FOR COLLECTIVE CES19 SATION OF SERVICE.—The exemption provided 

20 in paragraph (1) shall not confer any new right 

21 to participate in any collective cessation of serv22 ice to patients not already permitted by existing 

23 law. 

24 (B) NO CHANGE IN NATIONAL LABOR RE25 LATIONS ACT.—This section applies only to 


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1 health care professionals excluded from the Na2 tional Labor Relations Act. Nothing in this sec3 tion shall be construed as changing or amend4 ing any provision of the National Labor Rela5 tions Act, or as affecting the status of any 

6 group of persons under that Act. 

7 (3) NO APPLICATION TO FEDERAL PRO8 GRAMS.—Nothing in this section shall apply to nego9 tiations between health care professionals and health 

10 plans pertaining to benefits provided under any of 

11 the following: 

12 (A) The Medicare Program under title 

13 XVIII of the Social Security Act (42 U.S.C. 

14 1395 et seq.). 

15 (B) The Medicaid program under title XIX 

16 of the Social Security Act (42 U.S.C. 1396 et 

17 seq.). 

18 (C) The SCHIP program under title XXI 

19 of the Social Security Act (42 U.S.C. 1397aa et 

20 seq.). 

21 (D) Chapter 55 of title 10, United States 

22 Code (relating to medical and dental care for 

23 members of the uniformed services). 

24 (E) Chapter 17 of title 38, United States 

25 Code (relating to Veterans’ medical care). 


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1 (F) Chapter 89 of title 5, United States 

2 Code (relating to the Federal employees’ health 

3 benefits program). 

4 (G) The Indian Health Care Improvement 

5 Act (25 U.S.C. 1601 et seq.). 

6 (b) DEFINITIONS.—In this section, the following defi7 nitions shall apply: 

8 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

9 laws’’— 

10 (A) has the meaning given it in subsection 

11 (a) of the first section of the Clayton Act (15 

12 U.S.C. 12(a)), except that such term includes 

13 section 5 of the Federal Trade Commission Act 

14 (15 U.S.C. 45) to the extent such section ap15 plies to unfair methods of competition; and 

16 (B) includes any State law similar to the 

17 laws referred to in subparagraph (A). 

18 (2) GROUP HEALTH PLAN.—The term ‘‘group 

19 health plan’’ means an employee welfare benefit plan 

20 to the extent that the plan provides medical care (in21 cluding items and services paid for as medical care) 

22 to employees or their dependents (as defined under 

23 the terms of the plan) directly or through insurance, 

24 reimbursement, or otherwise. 


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1 (3) GROUP HEALTH PLAN, HEALTH INSURANCE

2 ISSUER.—The terms ‘‘group health plan’’ and 

3 ‘‘health insurance issuer’’ include a third-party ad4 ministrator or other person acting for or on behalf 

5 of such plan or issuer. 

6 (4) HEALTH CARE SERVICES.—The term 

7 ‘‘health care services’’ means any services for which 

8 payment may be made under a health plan, includ9 ing services related to the delivery or administration 

10 of such services. 

11 (5) HEALTH CARE PROFESSIONAL.—The term 

12 ‘‘health care professional’’ means any individual or 

13 entity that provides health care items or services, 

14 treatment, assistance with activities of daily living, 

15 or medications to patients and who, to the extent re16 quired by State or Federal law, possesses specialized 

17 training that confers expertise in the provision of 

18 such items or services, treatment, assistance, or 

19 medications. 

20 (6) HEALTH INSURANCE COVERAGE.—The term 

21 ‘‘health insurance coverage’’ means benefits con22 sisting of medical care (provided directly, through 

23 insurance or reimbursement, or otherwise and in24 cluding items and services paid for as medical care) 

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1 tificate, hospital or medical service plan contract, or 

2 health maintenance organization contract offered by 

3 a health insurance issuer. 

4 (7) HEALTH INSURANCE ISSUER.—The term 

5 ‘‘health insurance issuer’’ means an insurance com6 pany, insurance service, or insurance organization 

7 (including a health maintenance organization) that 

8 is licensed to engage in the business of insurance in 

9 a State and that is subject to State law regulating 

10 insurance. Such term does not include a group 

11 health plan. 

12 (8) HEALTH MAINTENANCE ORGANIZATION.— 

13 The term ‘‘health maintenance organization’’ 

14 means— 

15 (A) a federally qualified health mainte16 nance organization (as defined in section 

17 1301(a) of the Public Health Service Act (42 

18 U.S.C. 300e(a))); 

19 (B) an organization recognized under State 

20 law as a health maintenance organization; or 

21 (C) a similar organization regulated under 

22 State law for solvency in the same manner and 

23 to the same extent as such a health mainte24 nance organization. 


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1 (9) HEALTH PLAN.—The term ‘‘health plan’’ 

2 means a group health plan or a health insurance 

3 issuer that is offering health insurance coverage. 

4 (10) MEDICAL CARE.—The term ‘‘medical 

5 care’’ means amounts paid for— 

6 (A) the diagnosis, cure, mitigation, treat7 ment, or prevention of disease, or amounts paid 

8 for the purpose of affecting any structure or 

9 function of the body; and 

10 (B) transportation primarily for and essen11 tial to receiving items and services referred to 

12 in subparagraph (A). 

13 (11) PERSON.—The term ‘‘person’’ includes a 

14 State or unit of local government. 

15 (12) STATE.—The term ‘‘State’’ includes the 

16 several States, the District of Columbia, Puerto 

17 Rico, the Virgin Islands of the United States, Guam, 

18 American Samoa, and the Commonwealth of the 

19 Northern Mariana Islands. 

20 (c) EFFECTIVE DATE.—This section shall take effect 

21 on the date of the enactment of this Act and shall not 

22 apply with respect to conduct occurring before such date. 

Æ 


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