I 

114TH CONGRESS 

1ST SESSION H. R. 2653 

To repeal the Patient Protection and Affordable Care Act and related reconciliation provisions, to promote patient-centered health care, to provide 

for the creation of a safe harbor for defendants in medical malpractice 

actions who demonstrate adherence to clinical practice guidelines, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 4, 2015 

Mr. ROE of Tennessee (for himself, Mr. AUSTIN SCOTT of Georgia, Mr. FLORES, Mr. BARR, Mrs. BLACKBURN, Mr. CARTER of Georgia, Mrs. 

ELLMERS of North Carolina, Mr. FLEMING, Mr. GOSAR, Mr. HARRIS, 

Mr. HILL, Mr. ROKITA, Mr. SCALISE, Mr. BUCSHON, Mr. GIBBS, Mr. 

BISHOP of Michigan, Mr. WALBERG, Mr. WEBER of Texas, Mr. 

WENSTRUP, Mr. FARENTHOLD, Mr. HUELSKAMP, Mr. BYRNE, Mr. 

HUIZENGA of Michigan, Mr. ROUZER, Mr. YODER, Mr. LAMBORN, Mr. 

NEUGEBAUER, Mr. FRANKS of Arizona, Mr. PITTENGER, Mr. COLE, Mr. 

BABIN, Mr. ROONEY of Florida, Mr. STUTZMAN, Mr. ROTHFUS, Mrs. 

HARTZLER, Mrs. WAGNER, Mr. DESJARLAIS, Mr. MCKINLEY, Mr. 

BENISHEK, Mr. FINCHER, Mr. WILSON of South Carolina, Mr. OLSON, 

Mr. PALAZZO, Mr. MESSER, Mr. MCCLINTOCK, and Mr. MCCAUL) 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, Veterans’ Affairs, and the Budget, 

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 repeal the Patient Protection and Affordable Care Act 

and related reconciliation provisions, to promote patientcentered health care, to provide for the creation of a 


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safe harbor for defendants in medical malpractice actions 

who demonstrate adherence to clinical practice guidelines, and for other purposes. 

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 ‘‘American Health Care Reform Act of 2015’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—REPEAL OF OBAMACARE 

Sec. 101. Repeal of PPACA and health care-related provisions in the Health 

Care and Education Reconciliation Act of 2010. 

Sec. 102. Budgetary effects. 

TITLE II—INCREASING ACCESS TO PORTABLE, AFFORDABLE 

HEALTH INSURANCE 

Sec. 200. Amendment of 1986 Code. 

Subtitle A—Standard Deduction for Health Insurance 

Sec. 201. Standard deduction for health insurance. 

Sec. 202. Changes to existing tax preferences for medical coverage and costs 

for individuals eligible for standard deduction for health insurance. 

Sec. 203. Exclusion of standard deduction for health insurance from employment taxes. 

Sec. 204. Information reporting. 

Sec. 205. Election to disregard inclusion of contributions by employer to accident or health plan. 

Subtitle B—Enhancement of Health Savings Accounts 

Sec. 221. Allow both spouses to make catch-up contributions to the same HSA 

account. 

Sec. 222. Provisions relating to Medicare. 

Sec. 223. Individuals eligible for veterans benefits for a service-connected disability. 

Sec. 224. Individuals eligible for Indian Health Service assistance. 

Sec. 225. Individuals eligible for TRICARE coverage. 

Sec. 226. FSA and HRA interaction with HSAs. 

Sec. 227. Purchase of health insurance from HSA account. 


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Sec. 228. Special rule for certain medical expenses incurred before establishment of account. 

Sec. 229. Preventive care prescription drug clarification. 

Sec. 230. Equivalent bankruptcy protections for health savings accounts as retirement funds. 

Sec. 231. Administrative error correction before due date of return. 

Sec. 232. Reauthorization of Medicaid health opportunity accounts. 

Sec. 233. Members of health care sharing ministries eligible to establish health 

savings accounts. 

Sec. 234. High deductible health plans renamed HSA qualified plans. 

Sec. 235. Treatment of direct primary care service arrangements. 

Sec. 236. Certain exercise equipment and physical fitness programs treated as 

medical care. 

Sec. 237. Certain nutritional and dietary supplements to be treated as medical 

care. 

Sec. 238. Certain provider fees to be treated as medical care. 

Sec. 239. Increase the maximum contribution limit to an HSA to match deductible and out-of-pocket expense limitation. 

Sec. 240. Child health savings account. 

Sec. 241. Allowing minimum distributions from tax-deferred retirement accounts to be deposited into HSAs. 

Sec. 242. Distributions for abortion expenses from health savings accounts included in gross income. 

Subtitle C—Enhanced Wellness Incentives 

Sec. 251. Providing financial incentives for treatment compliance. 

TITLE III—IMPROVING ACCESS TO INSURANCE FOR VULNERABLE 

AMERICANS 

Subtitle A—Eliminating Barriers to Insurance Coverage 

Sec. 301. Elimination of certain requirements for guaranteed availability in individual market. 

Subtitle B—Ensuring Coverage for Individuals With Preexisting Conditions 

and Multiple Health Care Needs Through High Risk Pools 

Sec. 311. Improvement of high risk pools. 

TITLE IV—ENCOURAGING A MORE COMPETITIVE HEALTH CARE 

MARKET 

Subtitle A—Expanding Patient Choice 

Sec. 401. Cooperative governing of individual health insurance coverage. 

Subtitle B—McCarran-Ferguson Reform 

Sec. 411. Restoring the application of antitrust laws to health sector insurers. 

Subtitle C—Medicare Price Transparency 

Sec. 421. Public availability of Medicare claims data. 

Subtitle D—State Transparency Portals 


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Sec. 431. Providing information on health coverage options and health care 

providers. 

Subtitle E—Protecting the Doctor-Patient Relationship 

Sec. 441. Rule of construction. 

Sec. 442. Repeal of Federal Coordinating Council for Comparative Effectiveness Research. 

Subtitle F—Establishing Association Health Plans 

Sec. 451. Rules governing association health plans. 

Sec. 452. Clarification of treatment of single employer arrangements. 

Sec. 453. Enforcement provisions relating to association health plans. 

Sec. 454. Cooperation between Federal and State authorities. 

Sec. 455. Effective date and transitional and other rules. 

Subtitle G—Greater Choice for Veterans 

Sec. 461. Removing barriers to health care choice for Category 1 veterans and 

medal of honor recipients. 

TITLE V—REFORMING MEDICAL LIABILITY LAW 

Sec. 501. Requirements for selection of clinical practice guidelines. 

Sec. 502. Development. 

Sec. 503. No liability for guideline producers. 

Sec. 504. Internet publication of guidelines. 

Sec. 505. State flexibility and protection of States’ rights. 

Sec. 506. Federal cause of action. 

Sec. 507. Right of removal. 

Sec. 508. Mandatory review by independent medical panel. 

Sec. 509. Definitions. 

TITLE VI—MEDICAL BREAKTHROUGH FUND 

Sec. 601. Medical Breakthrough Fund. 

TITLE VII—OTHER PROVISIONS 

Sec. 701. Respecting human life. 

Sec. 702. Offsets. 

1 TITLE I—REPEAL OF 

2 OBAMACARE 

3 SEC. 101. REPEAL OF PPACA AND HEALTH CARE-RELATED 

4 PROVISIONS IN THE HEALTH CARE AND EDU5 CATION RECONCILIATION ACT OF 2010. 

6 (a) PPACA.—Effective on January 1, 2016, the Pa7 tient Protection and Affordable Care Act (Public Law 


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1 111–148) is repealed, and the provisions of law amended 

2 or repealed by such Act are restored or revived as if such 

3 Act had not been enacted. 

4 (b) HEALTH CARE-RELATED PROVISIONS IN THE

5 HEALTH CARE AND EDUCATION RECONCILIATION ACT OF

6 2010.—Effective on January 1, 2016, title I and subtitle 

7 B of title II of the Health Care and Education Reconcili8 ation Act of 2010 (Public Law 111–152) are repealed, and 

9 the provisions of law amended or repealed by such title 

10 or subtitle, respectively, are restored or revived as if such 

11 title and subtitle had not been enacted. 

12 SEC. 102. BUDGETARY EFFECTS. 

13 The budgetary effects of this Act shall not be entered 

14 on either PAYGO scorecard maintained pursuant to sec15 tion 4(d) of the Statutory Pay-As-You-Go Act of 2010. 

16 TITLE II—INCREASING ACCESS 

17 TO PORTABLE, AFFORDABLE 

18 HEALTH INSURANCE 

19 SEC. 200. AMENDMENT OF 1986 CODE. 

20 Except as otherwise expressly provided, whenever in 

21 this title an amendment or repeal is expressed in terms 

22 of an amendment to, or repeal of, a section or other provi23 sion, the reference shall be considered to be made to a 

24 section or other provision of the Internal Revenue Code 

25 of 1986. 


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1 Subtitle A—Standard Deduction 

2 for Health Insurance 

3 SEC. 201. STANDARD DEDUCTION FOR HEALTH INSUR4 ANCE. 

5 (a) IN GENERAL.—Part VII of subchapter B of chap6 ter 1 is amended by redesignating section 224 as section 

7 225 and by inserting after section 223 the following new 

8 section: 

9 ‘‘SEC. 224. STANDARD DEDUCTION FOR HEALTH INSUR10 ANCE. 

11 ‘‘(a) DEDUCTION ALLOWED.—In the case of an indi12 vidual, there shall be allowed as a deduction to the tax13 payer for the taxable year the standard deduction for 

14 health insurance. 

15 ‘‘(b) STANDARD DEDUCTION FOR HEALTH INSUR16 ANCE.—For purposes of this section— 

17 ‘‘(1) IN GENERAL.—The term ‘standard deduc18 tion for health insurance’ means the sum of the 

19 monthly limitations for months during the taxable 

20 year. 

21 ‘‘(2) MONTHLY LIMITATION.— 

22 ‘‘(A) IN GENERAL.—The monthly limitation for any month is 1 23 ⁄12 of— 

24 ‘‘(i) $20,500, in the case of a tax25 payer who is allowed a deduction under 


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1 section 151 for more than one individual 

2 who for such month is an eligible indi3 vidual, and 

4 ‘‘(ii) $7,500, in the case of a taxpayer 

5 who is allowed a deduction under section 

6 151 for only one individual who for such 

7 month is an eligible individual. 

8 ‘‘(B) COST-OF-LIVING ADJUSTMENT.— 

9 ‘‘(i) IN GENERAL.—In the case of tax10 able years beginning in calendar years 

11 after the first calendar year to which this 

12 section applies, the dollar amounts under 

13 subparagraph (A) shall be increased by an 

14 amount equal to— 

15 ‘‘(I) such dollar amount, multi16 plied by 

17 ‘‘(II) the cost-of-living adjust18 ment determined under section 1(f)(3) 

19 for the calendar year in which such 

20 taxable year begins, determined by 

21 substituting ‘the calendar year pre22 ceding the first calendar year to which 

23 section 224 applies’ for ‘calendar year 

24 1992’ in subparagraph (B) thereof. 


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1 ‘‘(ii) ROUNDING.—If any increase 

2 under clause (i) is not a multiple of $50, 

3 such increase shall be rounded to the near4 est multiple of $50. 

5 ‘‘(3) YEARLY LIMITATION.—The amount al6 lowed as a deduction under subsection (a) for any 

7 taxable year shall not exceed the taxpayer’s earned 

8 income (as defined in section 32(c)(2)) for such tax9 able year. 

10 ‘‘(c) LIMITATIONS AND SPECIAL RULES RELATING

11 TO STANDARD DEDUCTION.—For purposes of this sec12 tion— 

13 ‘‘(1) SPECIAL RULE FOR MARRIED INDIVIDUALS

14 FILING SEPARATELY.—In the case of a married indi15 vidual who files a separate return for the taxable 

16 year, the deduction allowed under subsection (a) 

17 shall be equal to one-half of the amount which would 

18 otherwise be determined under subsection (a) if such 

19 individual filed a joint return for the taxable year. 

20 ‘‘(2) DENIAL OF DEDUCTION TO DEPEND21 ENTS.—No deduction shall be allowed under this 

22 section to any individual with respect to whom a de23 duction under section 151 is allowable to another 

24 taxpayer for a taxable year beginning in the calVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 endar year in which such individual’s taxable year 

2 begins. 

3 ‘‘(3) COORDINATION WITH OTHER HEALTH TAX

4 INCENTIVES.— 

5 ‘‘(A) DENIAL OF DEDUCTION IF HEALTH

6 INSURANCE COSTS CREDIT ALLOWED.—No de7 duction shall be allowed under this section to 

8 any taxpayer if a credit is allowed to the tax9 payer under section 35 for the taxable year. 

10 ‘‘(B) REDUCTION FOR INSURANCE PUR11 CHASED WITH MSA OR HSA FUNDS.—The 

12 amount allowed as a deduction under subsection 

13 (a) for the taxable year shall be reduced by the 

14 aggregate amount— 

15 ‘‘(i) paid during the taxable year from 

16 an Archer MSA to which section 

17 220(d)(2)(B)(ii) (other than subclause (II) 

18 thereof) applies, and 

19 ‘‘(ii) paid during the taxable year 

20 from a health savings account to which 

21 section 223(d)(2)(C) (other than clause (ii) 

22 thereof) applies. 

23 ‘‘(4) SPECIAL RULE FOR DIVORCED PARENTS, 

24 ETC.—Notwithstanding subsection (b)(1), an indi25 vidual who is a child may be taken into account on 


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1 the return of the parent other than the parent for 

2 whom a deduction with respect to the child is al3 lowed under section 151 for a taxable year beginning 

4 in a calendar year if— 

5 ‘‘(A) the parent for whom the deduction 

6 under section 151 is allowed for a taxable year 

7 beginning in such calendar year signs a written 

8 declaration (in such manner and form as the 

9 Secretary may by regulations prescribe) that 

10 such parent will not claim the deduction allow11 able under this section with respect to the child 

12 for taxable years beginning in such calendar 

13 year, and 

14 ‘‘(B) the parent for whom the deduction 

15 under section 151 is not allowed attaches such 

16 written declaration to the parent’s return for 

17 the taxable year beginning in such calendar 

18 year. 

19 ‘‘(d) OTHER DEFINITIONS.—For purposes of this 

20 section— 

21 ‘‘(1) ELIGIBLE INDIVIDUAL.— 

22 ‘‘(A) IN GENERAL.—The term ‘eligible in23 dividual’ means, with respect to any month, an 

24 individual who is covered under a qualified 

25 health plan as of the 1st day of such month. 


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1 ‘‘(B) COVERAGE UNDER MEDICARE, MED2 ICAID, SCHIP, TRICARE, AND GRANDFATHERED

3 EMPLOYER COVERAGE.—The term ‘eligible indi4 vidual’ shall not include any individual who for 

5 any month is— 

6 ‘‘(i) entitled to benefits under part A 

7 of title XVIII of the Social Security Act or 

8 enrolled under part B of such title, 

9 ‘‘(ii) enrolled in the program under 

10 title XIX or XXI of such Act (other than 

11 under section 1928 of such Act), 

12 ‘‘(iii) receiving benefits (other than 

13 under continuation coverage under section 

14 4980B) which constitute medical care from 

15 an employer— 

16 ‘‘(I) from whom such individual 

17 is separated from service at the time 

18 of receipt of such benefits, and 

19 ‘‘(II) after such separation, if 

20 such benefits began before January 1, 

21 2017, unless such individual is also 

22 covered by a qualified health plan as 

23 of the 1st day of such month, or 

24 ‘‘(iv) entitled to receive benefits under 

25 chapter 55 of title 10, United States Code. 


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1 ‘‘(C) IDENTIFICATION REQUIREMENTS.— 

2 The term ‘eligible individual’ shall not include 

3 any individual for any month unless the policy 

4 number associated with coverage under the 

5 qualified health plan and the TIN of each eligi6 ble individual covered under such coverage for 

7 such month is included on the return for the 

8 taxable year in which such month occurs. 

9 ‘‘(2) QUALIFIED HEALTH PLAN.— 

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

11 health plan’ means a health plan (within the 

12 meaning of section 223(c)(2), without regard to 

13 subparagraph (A)(i) thereof) which, under regu14 lations prescribed by the Secretary, meets the 

15 following requirements: 

16 ‘‘(i) The plan has coverage for inpa17 tient and outpatient care, emergency bene18 fits, and physician care. 

19 ‘‘(ii) The plan has coverage which 

20 meaningfully limits individual economic ex21 posure to extraordinary medical expenses 

22 ‘‘(B) EXCLUSION OF CERTAIN PLANS.— 

23 The term ‘qualified health plan’ does not in24 clude— 


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1 ‘‘(i) a health plan if substantially all 

2 of its coverage is coverage described in sec3 tion 223(c)(1)(B), 

4 ‘‘(ii) any program or benefits referred 

5 to in clause (i), (ii), or (iii) of paragraph 

6 (1)(B), and 

7 ‘‘(iii) a Medicare supplemental policy 

8 (as defined in section 1882 of the Social 

9 Security Act). 

10 ‘‘(e) REGULATIONS.—The Secretary may prescribe 

11 such regulations as may be necessary to carry out this 

12 section.’’. 

13 (b) DEDUCTION ALLOWED WHETHER OR NOT INDI14 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

15 of section 62 is amended by inserting before the last sen16 tence at the end the following new paragraph: 

17 ‘‘(22) STANDARD DEDUCTION FOR HEALTH IN18 SURANCE.—The deduction allowed by section 224.’’. 

19 (c) ELECTION TO TAKE HEALTH INSURANCE COSTS

20 CREDIT.—Section 35(g) is amended by redesignating 

21 paragraphs (9), (10), and (11) as paragraphs (10), (11), 

22 and (12), respectively, and by inserting after paragraph 

23 (8) the following new paragraph: 

24 ‘‘(9) ELECTION NOT TO CLAIM CREDIT.—This 

25 section shall not apply to a taxpayer for any taxable 


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1 year if such taxpayer elects to have this section not 

2 apply for such taxable year.’’. 

3 (d) CLERICAL AMENDMENT.—The table of sections 

4 for part VII of subchapter B of chapter 1 is amended by 

5 striking the item relating to section 224 and adding at 

6 the end the following new items: 

‘‘Sec. 224. Standard deduction for health insurance. 

‘‘Sec. 225. Cross reference.’’. 

7 (e) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to taxable years beginning after 

9 December 31, 2015. 

10 SEC. 202. CHANGES TO EXISTING TAX PREFERENCES FOR 

11 MEDICAL COVERAGE AND COSTS FOR INDI12 VIDUALS ELIGIBLE FOR STANDARD DEDUC13 TION FOR HEALTH INSURANCE. 

14 (a) EXCLUSION FOR CONTRIBUTIONS BY EMPLOYER

15 TO ACCIDENT AND HEALTH PLANS.— 

16 (1) IN GENERAL.—Section 106 is amended by 

17 adding at the end the following new subsection: 

18 ‘‘(g) SUBSECTIONS (a) AND (c) APPLY ONLY TO IN19 DIVIDUALS COVERED BY MEDICARE, MEDICAID, SCHIP, 

20 TRICARE, OR GRANDFATHERED EMPLOYER PLANS.— 

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), subsections (a) and (c) shall not apply for 

23 any taxable year with respect to which a deduction 

24 under section 224 is allowable. 


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1 ‘‘(2) EXCEPTION FOR INDIVIDUALS COVERED

2 BY MEDICARE, MEDICAID, SCHIP, OR GRAND3 FATHERED EMPLOYER PLANS.—Paragraph (1) shall 

4 not apply to an individual for any taxable year if 

5 such individual is not an eligible individual (as de6 fined in section 224(d)(1)) for any month during 

7 such taxable year by reason of coverage described in 

8 section 224(d)(1)(B).’’. 

9 (2) CONFORMING AMENDMENTS.— 

10 (A) Section 106(b)(1) is amended— 

11 (i) by inserting ‘‘gross income does 

12 not include’’ before ‘‘amounts contrib13 uted’’, and 

14 (ii) by striking ‘‘shall be treated as 

15 employer-provided coverage for medical ex16 penses under an accident or health plan’’. 

17 (B) Section 106(d)(1) is amended— 

18 (i) by inserting ‘‘gross income does 

19 not include’’ before ‘‘amounts contrib20 uted’’, and 

21 (ii) by striking ‘‘shall be treated as 

22 employer-provided coverage for medical ex23 penses under an accident or health plan’’. 

24 (b) TERMINATION OF DEDUCTION FOR HEALTH IN25 SURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.— 


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1 Subsection (l) of section 162 is amended by adding at the 

2 end the following new paragraph: 

3 ‘‘(6) TERMINATION.—This subsection shall not 

4 apply to taxable years with respect to which a deduc5 tion under section 224 is allowable.’’. 

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

7 this section shall apply to taxable years beginning after 

8 December 31, 2015. 

9 SEC. 203. EXCLUSION OF STANDARD DEDUCTION FOR 

10 HEALTH INSURANCE FROM EMPLOYMENT 

11 TAXES. 

12 (a) IN GENERAL.—Chapter 25 is amended by adding 

13 at the end the following new section: 

14 ‘‘SEC. 3512. EXCLUSION OF STANDARD DEDUCTION FROM 

15 EMPLOYMENT TAXES. 

16 ‘‘(a) IN GENERAL.—For purposes of chapters 21, 22, 

17 and 23, each of the following amounts for any period (de18 termined without regard to this section) shall be reduced 

19 by the portion of the standard deduction for health insur20 ance (as defined in section 224) allocable to the period: 

21 ‘‘(1) The amount of wages determined under 

22 section 3121(a). 

23 ‘‘(2) The amount of compensation determined 

24 under section 3231(e). 


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1 ‘‘(3) The amount of wages determined under 

2 section 3306(b). 

3 ‘‘(b) DETERMINATION OF STANDARD DEDUCTION

4 ALLOCABLE TO A PERIOD.—For purposes of subsection 

5 (a)— 

6 ‘‘(1) IN GENERAL.—The determination of the 

7 portion of the standard deduction for health insur8 ance allocable to a period shall be made on the basis 

9 of a qualified certificate of eligible coverage fur10 nished by the employee to the employer. 

11 ‘‘(2) QUALIFIED CERTIFICATE OF ELIGIBLE

12 COVERAGE.—The term ‘qualified certificate of eligi13 ble coverage’ means a statement of eligibility for the 

14 deduction allowable under section 224 which con15 tains such information, is in such form, and is pro16 vided at such times, as the Secretary may prescribe. 

17 ‘‘(3) ONLY 1 CERTIFICATE IN EFFECT AT A

18 TIME.—Except as provided by the Secretary, an em19 ployee may have only 1 qualified certificate of eligi20 ble coverage in effect for any period. 

21 ‘‘(4) ELECTION.—An employee may elect not to 

22 have this section apply for any period for purposes 

23 of chapter 21 or 22. 

24 ‘‘(c) RECONCILIATION OF ERRONEOUS PAYMENTS

25 TO BE MADE AT EMPLOYEE LEVEL.— 


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1 ‘‘(1) IN GENERAL.—If the application of this 

2 subsection results in an incorrect amount being 

3 treated as wages or compensation for purposes of 

4 chapter 21, 22, or 23, whichever is applicable, with 

5 respect to any employee for 1 or more periods end6 ing within a taxable year of the employee— 

7 ‘‘(A) in the case of an aggregate overpay8 ment of the taxes imposed by any such chapter 

9 for all such periods, there shall be allowed as a 

10 credit against the tax imposed by chapter 1 for 

11 such taxable year on such employee an amount 

12 equal to the amount of such overpayment, and 

13 ‘‘(B) in the case of an aggregate under14 payment of the taxes imposed by any such 

15 chapter for all such periods, the employee shall 

16 be liable for payment of the entire amount of 

17 such underpayment. 

18 ‘‘(2) CREDITS TREATED AS REFUNDABLE.—For 

19 purposes of this title, any credit determined under 

20 paragraph (1)(A) or subsection (d)(2) shall be treat21 ed as if it were a credit allowed under subpart C of 

22 part IV of subchapter A of chapter 1. 

23 ‘‘(3) RULES FOR REPORTING AND COLLECTION

24 OF TAX.—Any tax required to be paid by an em25 ployee under paragraph (1)(B) shall be included 


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1 with the employee’s return of Federal income tax for 

2 the taxable year. 

3 ‘‘(4) SECRETARIAL AUTHORITY.—The Secretary 

4 shall prescribe such rules as may be necessary to 

5 carry out the provisions of this subsection.’’. 

6 (b) SELF-EMPLOYMENT INCOME.—Section 1402 is 

7 amended by adding at the end the following: 

8 ‘‘(m) STANDARD DEDUCTION FOR HEALTH INSUR9 ANCE.—For purposes of this chapter— 

10 ‘‘(1) IN GENERAL.—The self-employment in11 come of a taxpayer for any period (determined with12 out regard to this subsection) shall be reduced by 

13 the excess (if any) of— 

14 ‘‘(A) the portion of the standard deduction 

15 for health insurance (as defined in section 224) 

16 allocable to the period, over 

17 ‘‘(B) the amount of any reduction in wages 

18 or compensation for such period under section 

19 3512. 

20 ‘‘(2) DETERMINATION OF STANDARD DEDUC21 TION ALLOCABLE TO A PERIOD.—For purposes of 

22 paragraph (1), the portion of the standard deduction 

23 allocable to any period shall be determined in a man24 ner similar to the manner under section 3512.’’. 

25 (c) CONFORMING AMENDMENTS.— 


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1 (1) Section 3121(a)(2) is amended by inserting 

2 ‘‘which is excludable from gross income under sec3 tion 105 or 106’’ after ‘‘such payment)’’. 

4 (2) Subsection (a) of section 209 of the Social 

5 Security Act (42 U.S.C. 409) is amended by striking 

6 ‘‘or’’ at the end of paragraph (19), by striking the 

7 period at the end of paragraph (20) and inserting ‘‘; 

8 or’’, and by inserting after paragraph (20) the fol9 lowing new paragraph: 

10 ‘‘(21) any amount excluded from wages under 

11 section 3512(a) of the Internal Revenue Code of 

12 1986 (relating to exclusion of standard deduction 

13 from employment taxes).’’. 

14 (3) Section 1324(b)(2) of title 31, United 

15 States Code, is amended by inserting ‘‘, or the credit 

16 under section 3512(c)(2) of such Code’’ before the 

17 period at the end. 

18 (4) Section 209(k)(2) of the Social Security Act 

19 (42 U.S.C. 409(k)(2)) is amended by redesignating 

20 subparagraphs (C) and (D) as subparagraphs (D) 

21 and (E), respectively, and by inserting after sub22 paragraph (B) the following new subparagraph: 

23 ‘‘(C) by disregarding the exclusion from 

24 wages in subsection (a)(21),’’. 


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1 (5) The table of sections for chapter 25 is 

2 amended by adding at the end the following new 

3 item: 

‘‘Sec. 3512. Exclusion of standard deduction from employment taxes.’’. 

4 (d) EFFECTIVE DATES.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the amendments made by this section 

7 shall apply to remuneration paid or accrued for peri8 ods on or after December 31, 2015. 

9 (2) RECONCILIATION AND SELF-EMPLOYED.— 

10 Sections 3512(c) and (d)(2) of the Internal Revenue 

11 Code of 1986 (as added by subsection (a)), and the 

12 amendments made by subsection (b), shall apply to 

13 taxable years beginning after December 31, 2015. 

14 SEC. 204. INFORMATION REPORTING. 

15 (a) HEALTH PLAN PROVIDERS.—Subpart B of part 

16 III of subchapter A of chapter 61 is amended by adding 

17 at the end the following new section: 

18 ‘‘SEC. 6050X. COVERAGE UNDER QUALIFIED HEALTH PLAN. 

19 ‘‘(a) IN GENERAL.—Every person providing coverage 

20 under a qualified health plan (as defined in section 

21 224(d)(2)) during a calendar year shall, on or before Jan22 uary 31 of the succeeding year, make a return described 

23 in subsection (b) with respect to each individual who is 

24 covered by such person under a qualified health plan for 

25 any month during the calendar year. 


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1 ‘‘(b) RETURN.—A return is described in this sub2 section if such return— 

3 ‘‘(1) is in such form as the Secretary pre4 scribes, and 

5 ‘‘(2) contains— 

6 ‘‘(A) the name of the person providing cov7 erage under the qualified health plan, 

8 ‘‘(B) the name, address, and TIN of the 

9 individual covered by the plan, 

10 ‘‘(C) if such individual is the owner of the 

11 policy under which such plan is provided, the 

12 name, address, and TIN of each other indi13 vidual covered by such policy and the relation14 ship of each such individual to such owner, and 

15 ‘‘(D) the specific months of the year for 

16 which each individual referred to in subpara17 graph (B) is, as of the first day of each such 

18 month, covered by such plan. 

19 ‘‘(c) STATEMENT TO BE FURNISHED WITH RE20 SPECT TO WHOM INFORMATION IS REQUIRED.—Every 

21 person required to make a return under subsection (a) 

22 shall furnish to each individual whose name is required 

23 to be set forth in such return under subsection (b)(2)(A) 

24 a written statement showing— 


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1 ‘‘(1) the name, address, and phone number of 

2 the information contact of the person required to 

3 make such return, and 

4 ‘‘(2) the information described in subsection 

5 (b)(2). 

6 The written statement required under the preceding sen7 tence shall be furnished on or before January 31 of the 

8 year following the calendar year for which the return 

9 under subsection (a) was required to be made.’’. 

10 (b) EMPLOYERS.—Subsection (a) of section 6051 is 

11 amended by striking ‘‘and’’ at the end of paragraph (13), 

12 by striking the period at the end of paragraph (14) and 

13 inserting ‘‘, and’’, and by inserting after paragraph (14) 

14 the following new paragraph: 

15 ‘‘(15) the value (determined under section 

16 4980B(f)(4)) of employer-provided coverage for each 

17 month under an accident or health plan and the cat18 egory of such coverage for purposes of section 

19 6116.’’. 

20 (c) APPLICATION TO RETIREES.—Subsection (a) of 

21 section 6051 is amended by adding at the end the fol22 lowing: ‘‘In the case of a retiree, this section shall (to the 

23 extent established by the Secretary by regulation) apply 

24 only with respect to paragraph (15).’’. 

25 (d) ASSESSABLE PENALTIES.— 


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1 (1) Subparagraph (B) of section 6724(d)(1) is 

2 amended by striking ‘‘or’’ at the end of clause 

3 (xxiv), by striking ‘‘and’’ at the end of clause (xxv) 

4 and inserting ‘‘or’’, and by adding at the end the fol5 lowing new clause: 

6 ‘‘(xxvi) section 6050X (relating to re7 turns relating to payments for qualified 

8 health insurance), and’’. 

9 (2) Paragraph (2) of section 6724(d) is amend10 ed by striking ‘‘or’’ at the end of subparagraph 

11 (GG), by striking the period at the end of subpara12 graph (HH) and inserting ‘‘, or’’ and by adding at 

13 the end the following new subparagraph: 

14 ‘‘(II) section 6050X(d) (relating to returns 

15 relating to payments for qualified health insur16 ance).’’. 

17 (e) CLERICAL AMENDMENT.—The table of sections 

18 for such subpart B is amended by adding at the end the 

19 following new item: 

‘‘Sec. 6050X. Coverage under qualified health plan.’’. 

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

21 this section shall apply to years beginning after December 

22 31, 2015. 


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1 SEC. 205. ELECTION TO DISREGARD INCLUSION OF CON2 TRIBUTIONS BY EMPLOYER TO ACCIDENT OR 

3 HEALTH PLAN. 

4 (a) IN GENERAL.—Subparagraph (B) of section 

5 32(c)(2) is amended by striking ‘‘and’’ at the end of clause 

6 (v), by striking the period at the end of clause (vi) and 

7 inserting ‘‘, and’’, and by adding at the end the following 

8 new clause: 

9 ‘‘(vii) a taxpayer may elect to exclude 

10 from earned income amounts that would 

11 have been excluded from gross income 

12 under section 106 but for subsection (g) 

13 thereof.’’. 

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

15 subsection (a) shall apply to taxable years beginning after 

16 December 31, 2015. 

17 Subtitle B—Enhancement of Health 

18 Savings Accounts 

19 SEC. 221. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON20 TRIBUTIONS TO THE SAME HSA ACCOUNT. 

21 (a) IN GENERAL.—Paragraph (3) of section 223(b) 

22 is amended by adding at the end the following new sub23 paragraph: 

24 ‘‘(C) SPECIAL RULE WHERE BOTH

25 SPOUSES ARE ELIGIBLE INDIVIDUALS WITH 1

26 ACCOUNT.—If— 


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

2 spouse have both attained age 55 before 

3 the close of the taxable year, and 

4 ‘‘(ii) the spouse is not an account ben5 eficiary of a health savings account as of 

6 the close of such year, 

7 the additional contribution amount shall be 200 

8 percent of the amount otherwise determined 

9 under subparagraph (B).’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2015. 

13 SEC. 222. PROVISIONS RELATING TO MEDICARE. 

14 (a) INDIVIDUALS OVER AGE 65 ONLY ENROLLED IN

15 MEDICARE PART A.—Paragraph (7) of section 223(b) is 

16 amended by adding at the end the following: ‘‘This para17 graph shall not apply to any individual during any period 

18 for which the individual’s only entitlement to such benefits 

19 is an entitlement to hospital insurance benefits under part 

20 A of title XVIII of such Act pursuant to an enrollment 

21 for such hospital insurance benefits under section 

22 226(a)(1) of such Act.’’. 

23 (b) MEDICARE BENEFICIARIES PARTICIPATING IN

24 MEDICARE ADVANTAGE MSA MAY CONTRIBUTE THEIR

25 OWN MONEY TO THEIR MSA.— 


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1 (1) IN GENERAL.—Subsection (b) of section 

2 138 is amended by striking paragraph (2) and by re3 designating paragraphs (3) and (4) as paragraphs 

4 (2) and (3), respectively. 

5 (2) CONFORMING AMENDMENT.—Paragraph (4) 

6 of section 138(c) is amended by striking ‘‘and para7 graph (2)’’. 

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2015. 

11 SEC. 223. INDIVIDUALS ELIGIBLE FOR VETERANS BENE12 FITS FOR A SERVICE-CONNECTED DIS13 ABILITY. 

14 (a) IN GENERAL.—Paragraph (1) of section 223(c) 

15 is amended by adding at the end the following new sub16 paragraph: 

17 ‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI18 GIBLE FOR CERTAIN VETERANS BENEFITS.— 

19 For purposes of subparagraph (A)(ii), an indi20 vidual shall not be treated as covered under a 

21 health plan described in such subparagraph 

22 merely because the individual receives periodic 

23 hospital care or medical services for a service24 connected disability under any law administered 

25 by the Secretary of Veterans Affairs but only if 


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1 the individual is not eligible to receive such care 

2 or services for any condition other than a serv3 ice-connected disability.’’. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2015. 

7 SEC. 224. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH 

8 SERVICE ASSISTANCE. 

9 (a) IN GENERAL.—Paragraph (1) of section 223(c), 

10 as amended by this Act, is amended by adding at the end 

11 the following new subparagraph: 

12 ‘‘(D) SPECIAL RULE FOR INDIVIDUALS EL13 IGIBLE FOR ASSISTANCE UNDER INDIAN

14 HEALTH SERVICE PROGRAMS.—For purposes of 

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

16 treated as covered under a health plan de17 scribed in such subparagraph merely because 

18 the individual receives hospital care or medical 

19 services under a medical care program of the 

20 Indian Health Service or of a tribal organiza21 tion.’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2015. 


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1 SEC. 225. INDIVIDUALS ELIGIBLE FOR TRICARE COVERAGE. 

2 (a) IN GENERAL.—Paragraph (1) of section 223(c), 

3 as amended by this Act, is amended by adding at the end 

4 the following new subparagraph: 

5 ‘‘(E) SPECIAL RULE FOR INDIVIDUALS EL6 IGIBLE FOR ASSISTANCE UNDER TRICARE.—For 

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

8 shall not be treated as covered under a health 

9 plan described in such subparagraph merely be10 cause the individual is eligible to receive hos11 pital care, medical services, or prescription 

12 drugs under chapter 55 of title 10, United 

13 States Code, under TRICARE Extra or 

14 TRICARE Standard and such individual is not 

15 enrolled in TRICARE Prime.’’. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2015. 

19 SEC. 226. FSA AND HRA INTERACTION WITH HSAS. 

20 (a) ELIGIBLE INDIVIDUALS INCLUDE FSA AND HRA 

21 PARTICIPANTS.—Subparagraph (B) of section 223(c)(1) 

22 is amended— 

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

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

25 (iii) and inserting ‘‘, and’’, and 


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

2 new clause: 

3 ‘‘(iv) coverage under a health flexible 

4 spending arrangement or a health reim5 bursement arrangement in the plan year a 

6 qualified HSA distribution as described in 

7 section 106(e) is made on behalf of the in8 dividual if after the qualified HSA dis9 tribution is made and for the remaining 

10 duration of the plan year, the coverage 

11 provided under the health flexible spending 

12 arrangement or health reimbursement ar13 rangement is converted to— 

14 ‘‘(I) coverage that does not pay 

15 or reimburse any medical expense in16 curred before the minimum annual de17 ductible under paragraph (2)(A)(i) 

18 (prorated for the period occurring 

19 after the qualified HSA distribution is 

20 made) is satisfied, 

21 ‘‘(II) coverage that, after the 

22 qualified HSA distribution is made, 

23 does not pay or reimburse any med24 ical expense incurred after the quali25 fied HSA distribution is made other 


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1 than preventive care as defined in 

2 paragraph (2)(C), 

3 ‘‘(III) coverage that, after the 

4 qualified HSA distribution is made, 

5 pays or reimburses benefits for cov6 erage described in clause (ii) (but not 

7 through insurance or for long-term 

8 care services), 

9 ‘‘(IV) coverage that, after the 

10 qualified HSA distribution is made, 

11 pays or reimburses benefits for per12 mitted insurance or coverage de13 scribed in clause (ii) (but not for long14 term care services), 

15 ‘‘(V) coverage that, after the 

16 qualified HSA distribution is made, 

17 pays or reimburses only those medical 

18 expenses incurred after an individual’s 

19 retirement (and no expenses incurred 

20 before retirement), or 

21 ‘‘(VI) coverage that, after the 

22 qualified HSA distribution is made, is 

23 suspended, pursuant to an election 

24 made on or before the date the indi25 vidual elects a qualified HSA distribuVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 tion or, if later, on the date of the in2 dividual enrolls in a high deductible 

3 health plan, that does not pay or re4 imburse, at any time, any medical ex5 pense incurred during the suspension 

6 period except as defined in the pre7 ceding subclauses of this clause.’’. 

8 (b) QUALIFIED HSA DISTRIBUTION SHALL NOT AF9 FECT FLEXIBLE SPENDING ARRANGEMENT.—Paragraph 

10 (1) of section 106(e) is amended to read as follows: 

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

12 treated as a health flexible spending arrangement 

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

14 a health reimbursement arrangement under this sec15 tion or section 105, merely because such plan pro16 vides for a qualified HSA distribution.’’. 

17 (c) FSA BALANCES AT YEAR END SHALL NOT FOR18 FEIT.—Paragraph (2) of section 125(d) is amended by 

19 adding at the end the following new subparagraph: 

20 ‘‘(E) EXCEPTION FOR QUALIFIED HSA DIS21 TRIBUTIONS.—Subparagraph (A) shall not 

22 apply to the extent that there is an amount re23 maining in a health flexible spending account at 

24 the end of a plan year that an individual elects 

25 to contribute to a health savings account pursuVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 ant to a qualified HSA distribution (as defined 

2 in section 106(e)(2)).’’. 

3 (d) SIMPLIFICATION OF LIMITATIONS ON FSA AND

4 HRA ROLLOVERS.—Paragraph (2) of section 106(e) is 

5 amended to read as follows: 

6 ‘‘(2) QUALIFIED HSA DISTRIBUTION.— 

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

8 HSA distribution’ means a distribution from a 

9 health flexible spending arrangement or health 

10 reimbursement arrangement to the extent that 

11 such distribution does not exceed the lesser 

12 of— 

13 ‘‘(i) the balance in such arrangement 

14 as of the date of such distribution, or 

15 ‘‘(ii) the amount determined under 

16 subparagraph (B). 

17 Such term shall not include more than 1 dis18 tribution with respect to any arrangement. 

19 ‘‘(B) DOLLAR LIMITATIONS.— 

20 ‘‘(i) DISTRIBUTIONS FROM A HEALTH

21 FLEXIBLE SPENDING ARRANGEMENT.—A 

22 qualified HSA distribution from a health 

23 flexible spending arrangement shall not ex24 ceed the applicable amount. 


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1 ‘‘(ii) DISTRIBUTIONS FROM A HEALTH

2 REIMBURSEMENT ARRANGEMENT.—A 

3 qualified HSA distribution from a health 

4 reimbursement arrangement shall not ex5 ceed— 

6 ‘‘(I) the applicable amount di7 vided by 12, multiplied by 

8 ‘‘(II) the number of months dur9 ing which the individual is a partici10 pant in the health reimbursement ar11 rangement. 

12 ‘‘(iii) APPLICABLE AMOUNT.—For 

13 purposes of this subparagraph, the applica14 ble amount is— 

15 ‘‘(I) $2,250 in the case of an eli16 gible individual who has self-only cov17 erage under a high deductible health 

18 plan at the time of such distribution, 

19 and 

20 ‘‘(II) $4,500 in the case of an eli21 gible individual who has family cov22 erage under a high deductible health 

23 plan at the time of such distribu24 tion.’’. 


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1 (e) ELIMINATION OF ADDITIONAL TAX FOR FAILURE

2 TO MAINTAIN HIGH DEDUCTIBLE HEALTH PLAN COV3 ERAGE.—Subsection (e) of section 106 is amended— 

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

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

6 respectively, and 

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

8 (3), as so redesignated, and redesignating subpara9 graphs (B) and (C) of such paragraph as subpara10 graphs (A) and (B) thereof, respectively. 

11 (f) LIMITED PURPOSE FSAS AND HRAS.—Sub12 section (e) of section 106, as amended by this section, is 

13 amended by adding at the end the following new para14 graph: 

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

16 plan shall not fail to be a health flexible spending 

17 arrangement or health reimbursement arrangement 

18 under this section or section 105 merely because the 

19 plan converts coverage for individuals who enroll in 

20 a high deductible health plan described in section 

21 223(c)(2) to coverage described in section 

22 223(c)(1)(B)(iv). Coverage for such individuals may 

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

24 deductible health plan, without regard to the period 

25 of coverage under the health flexible spending arVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 rangement or health reimbursement arrangement, 

2 and without requiring any change in coverage to in3 dividuals who do not enroll in a high deductible 

4 health plan.’’. 

5 (g) DISTRIBUTION AMOUNTS ADJUSTED FOR COST6 OF-LIVING.—Subsection (e) of section 106, as amended 

7 by this section, is amended by adding at the end the fol8 lowing new paragraph: 

9 ‘‘(6) COST-OF-LIVING ADJUSTMENT.— 

10 ‘‘(A) IN GENERAL.—In the case of any 

11 taxable year beginning in a calendar year after 

12 2015, each of the dollar amounts in paragraph 

13 (2)(B)(iii) shall be increased by an amount 

14 equal to such dollar amount, multiplied by the 

15 cost-of-living adjustment determined under sec16 tion 1(f)(3) for the calendar year in which such 

17 taxable year begins by substituting ‘calendar 

18 year 2014’ for ‘calendar year 1992’ in subpara19 graph (B) thereof. 

20 ‘‘(B) ROUNDING.—If any increase under 

21 paragraph (1) is not a multiple of $50, such in22 crease shall be rounded to the nearest multiple 

23 of $50.’’. 


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1 (h) DISCLAIMER OF DISQUALIFYING COVERAGE.— 

2 Subparagraph (B) of section 223(c)(1), as amended by 

3 this section, is amended— 

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

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

6 (iv) and inserting ‘‘, and’’, and 

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

8 new clause: 

9 ‘‘(v) any coverage (including prospec10 tive coverage) under a health plan that is 

11 not a high deductible health plan which is 

12 disclaimed in writing, at the time of the 

13 creation or organization of the health sav14 ings account, including by execution of a 

15 trust described in subsection (d)(1) 

16 through a governing instrument that in17 cludes such a disclaimer, or by acceptance 

18 of an amendment to such a trust that in19 cludes such a disclaimer.’’. 

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2015. 


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1 SEC. 227. PURCHASE OF HEALTH INSURANCE FROM HSA 

2 ACCOUNT. 

3 (a) IN GENERAL.—Paragraph (2) of section 223(d) 

4 is amended to read as follows: 

5 ‘‘(2) QUALIFIED MEDICAL EXPENSES.— 

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

7 medical expenses’ means, with respect to an ac8 count beneficiary, amounts paid by such bene9 ficiary for medical care (as defined in section 

10 213(d)) for any individual covered by a high de11 ductible health plan of the account beneficiary, 

12 but only to the extent such amounts are not 

13 compensated for by insurance or otherwise. 

14 ‘‘(B) HEALTH INSURANCE MAY NOT BE

15 PURCHASED FROM ACCOUNT.—Except as pro16 vided in subparagraph (C), subparagraph (A) 

17 shall not apply to any payment for insurance. 

18 ‘‘(C) EXCEPTIONS.—Subparagraph (B) 

19 shall not apply to any expense for coverage 

20 under— 

21 ‘‘(i) a health plan during any period 

22 of continuation coverage required under 

23 any Federal law, 

24 ‘‘(ii) a qualified long-term care insur25 ance contract (as defined in section 

26 7702B(b)), 


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1 ‘‘(iii) a health plan during any period 

2 in which the individual is receiving unem3 ployment compensation under any Federal 

4 or State law, 

5 ‘‘(iv) a high deductible health plan, or 

6 ‘‘(v) any health insurance under title 

7 XVIII of the Social Security Act, other 

8 than a Medicare supplemental policy (as 

9 defined in section 1882 of such Act).’’. 

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

11 this section shall apply with respect to insurance pur12 chased after the date of the enactment of this Act in tax13 able years beginning after December 31, 2015. 

14 SEC. 228. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 

15 INCURRED BEFORE ESTABLISHMENT OF AC16 COUNT. 

17 (a) IN GENERAL.—Paragraph (2) of section 223(d), 

18 as amended by this Act, is amended by adding at the end 

19 the following new subparagraph: 

20 ‘‘(D) CERTAIN MEDICAL EXPENSES IN21 CURRED BEFORE ESTABLISHMENT OF ACCOUNT

22 TREATED AS QUALIFIED.—An expense shall not 

23 fail to be treated as a qualified medical expense 

24 solely because such expense was incurred before 


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1 the establishment of the health savings account 

2 if such expense was incurred— 

3 ‘‘(i) during either— 

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

5 health savings account was estab6 lished, or 

7 ‘‘(II) the preceding taxable year 

8 in the case of a health savings ac9 count established after the taxable 

10 year in which such expense was in11 curred but before the time prescribed 

12 by law for filing the return for such 

13 taxable year (not including extensions 

14 thereof), and 

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

16 during a period that such individual was 

17 covered by a high deductible health plan 

18 and met the requirements of subsection 

19 (c)(1)(A)(ii) (after application of sub20 section (c)(1)(B)).’’. 

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2015. 


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1 SEC. 229. PREVENTIVE CARE PRESCRIPTION DRUG CLARI2 FICATION. 

3 (a) CLARIFY USE OF DRUGS IN PREVENTIVE

4 CARE.—Subparagraph (C) of section 223(c)(2) is amend5 ed by adding at the end the following: ‘‘Preventive care 

6 shall include prescription and over-the-counter drugs and 

7 medicines which have the primary purpose of preventing 

8 the onset of, further deterioration from, or complications 

9 associated with chronic conditions, illnesses, or diseases.’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2003. 

13 SEC. 230. EQUIVALENT BANKRUPTCY PROTECTIONS FOR 

14 HEALTH SAVINGS ACCOUNTS AS RETIRE15 MENT FUNDS. 

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

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

19 ‘‘(r) TREATMENT OF HEALTH SAVINGS AC20 COUNTS.—For purposes of this section, any health savings 

21 account (as described in section 223 of the Internal Rev22 enue Code of 1986) shall be treated in the same manner 

23 as an individual retirement account described in section 

24 408 of such Code.’’. 

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

26 this section shall apply to cases commencing under title 


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1 11, United States Code, after the date of the enactment 

2 of this Act. 

3 SEC. 231. ADMINISTRATIVE ERROR CORRECTION BEFORE 

4 DUE DATE OF RETURN. 

5 (a) IN GENERAL.—Paragraph (4) of section 223(f) 

6 is amended by adding at the end the following new sub7 paragraph: 

8 ‘‘(D) EXCEPTION FOR ADMINISTRATIVE

9 ERRORS CORRECTED BEFORE DUE DATE OF RE10 TURN.—Subparagraph (A) shall not apply if 

11 any payment or distribution is made to correct 

12 an administrative, clerical or payroll contribu13 tion error and if— 

14 ‘‘(i) such distribution is received by 

15 the individual on or before the last day 

16 prescribed by law (including extensions of 

17 time) for filing such individual’s return for 

18 such taxable year, and 

19 ‘‘(ii) such distribution is accompanied 

20 by the amount of net income attributable 

21 to such contribution. 

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

23 included in the gross income of the individual 

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


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

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

3 of this Act. 

4 SEC. 232. REAUTHORIZATION OF MEDICAID HEALTH OP5 PORTUNITY ACCOUNTS. 

6 (a) IN GENERAL.—Section 1938 of the Social Secu7 rity Act (42 U.S.C. 1396u–8) is amended— 

8 (1) in subsection (a)— 

9 (A) by striking paragraph (2) and insert10 ing the following: 

11 ‘‘(2) INITIAL DEMONSTRATION.—The dem12 onstration program under this section shall begin 

13 again on January 1, 2016. The Secretary shall ap14 prove States to conduct demonstration programs 

15 under this section for a 5-year period, with each 

16 State demonstration program covering one or more 

17 geographic areas specified by the State. With respect 

18 to a State, after the initial 5-year period of any 

19 demonstration program conducted under this section 

20 by the State, unless the Secretary finds, taking into 

21 account cost-effectiveness and quality of care, that 

22 the State demonstration program has been unsuc23 cessful, the demonstration program may be extended 

24 or made permanent in the State.’’; and 


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1 (B) in paragraph (3), in the matter pre2 ceding subparagraph (A)— 

3 (i) by striking ‘‘not’’; and 

4 (ii) by striking ‘‘unless’’ and inserting 

5 ‘‘if’’; 

6 (2) in subsection (b)— 

7 (A) in paragraph (3), by inserting ‘‘clause 

8 (i) through (vii), (viii) (without regard to the 

9 amendment made by section 2004(c)(2) of Pub10 lic Law 111–148), (x), or (xi) of’’ after ‘‘de11 scribed in’’; and 

12 (B) by striking paragraphs (4), (5), and 

13 (6); 

14 (3) in subsection (c)— 

15 (A) in paragraph (6), by striking ‘‘Subject 

16 to subparagraphs (D) and (E)’’ and inserting 

17 ‘‘Subject to subparagraph (D)’’; 

18 (B) by striking paragraphs (3) and (4); 

19 and 

20 (C) by redesignating paragraphs (5) 

21 through (8) as paragraphs (3) through (6), re22 spectively; and 

23 (4) in subsection (d)— 

24 (A) in paragraph (2), by striking subpara25 graph (E); and 


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1 (B) in paragraph (3)— 

2 (i) in subparagraph (A)(ii), by strik3 ing ‘‘Subject to subparagraph (B)(ii), in’’ 

4 and inserting ‘‘In’’; and 

5 (ii) by striking subparagraph (B) and 

6 inserting the following: 

7 ‘‘(B) MAINTENANCE OF HEALTH OPPOR8 TUNITY ACCOUNT AFTER BECOMING INELI9 GIBLE FOR PUBLIC BENEFIT.—Notwithstanding 

10 any other provision of law, if an account holder 

11 of a health opportunity account becomes ineli12 gible for benefits under this title because of an 

13 increase in income or assets— 

14 ‘‘(i) no additional contribution shall be 

15 made into the account under paragraph 

16 (2)(A)(i); and 

17 ‘‘(ii) the account shall remain avail18 able to the account holder for 3 years after 

19 the date on which the individual becomes 

20 ineligible for such benefits for withdrawals 

21 under the same terms and conditions as if 

22 the account holder remained eligible for 

23 such benefits, and such withdrawals shall 

24 be treated as medical assistance in accord25 ance with subsection (c)(4).’’. 


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1 (b) CONFORMING AMENDMENT.—Section 613 of the 

2 Children’s Health Insurance Program Reauthorization 

3 Act of 2009 (Public Law 111–3; 42 U.S.C. 1396u–8 note) 

4 is repealed. 

5 SEC. 233. MEMBERS OF HEALTH CARE SHARING MIN6 ISTRIES ELIGIBLE TO ESTABLISH HEALTH 

7 SAVINGS ACCOUNTS. 

8 (a) IN GENERAL.—Section 223 is amended by adding 

9 at the end the following new subsection: 

10 ‘‘(i) APPLICATION TO HEALTH CARE SHARING MIN11 ISTRIES.—For purposes of this section, membership in a 

12 health care sharing ministry (as defined in section 

13 5000A(d)(2)(B)(ii)) shall be treated as coverage under a 

14 high deductible health plan.’’. 

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. 234. HIGH DEDUCTIBLE HEALTH PLANS RENAMED 

19 HSA QUALIFIED PLANS. 

20 (a) IN GENERAL.—Section 223, as amended by this 

21 subtitle, is amended by striking ‘‘high deductible health 

22 plan’’ each place it appears and inserting ‘‘HSA qualified 

23 health plan’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 106(e), as amended by this subtitle, 

2 is amended by striking ‘‘high deductible health plan’’ 

3 each place it appears and inserting ‘‘HSA qualified 

4 health plan’’. 

5 (2) The heading for paragraph (2) of section 

6 223(c) is amended by striking ‘‘HIGH DEDUCTIBLE

7 HEALTH PLAN’’ and inserting ‘‘HSA QUALIFIED

8 HEALTH PLAN’’. 

9 (3) Section 408(d)(9) is amended— 

10 (A) by striking ‘‘high deductible health 

11 plan’’ each place it appears in subparagraph 

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

13 and 

14 (B) by striking ‘‘HIGH DEDUCTIBLE

15 HEALTH PLAN’’ in the heading of subparagraph 

16 (D) and inserting ‘‘HSA QUALIFIED HEALTH

17 PLAN’’. 

18 SEC. 235. TREATMENT OF DIRECT PRIMARY CARE SERVICE 

19 ARRANGEMENTS. 

20 (a) IN GENERAL.—Section 223(c) is amended by 

21 adding at the end the following new paragraph: 

22 ‘‘(6) TREATMENT OF DIRECT PRIMARY CARE

23 SERVICE ARRANGEMENTS.—An arrangement under 

24 which an individual is provided coverage restricted to 


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1 primary care services in exchange for a fixed peri2 odic fee— 

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

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

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

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

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

8 this section shall apply to taxable years beginning after 

9 the date of the enactment of this Act. 

10 SEC. 236. CERTAIN EXERCISE EQUIPMENT AND PHYSICAL 

11 FITNESS PROGRAMS TREATED AS MEDICAL 

12 CARE. 

13 (a) IN GENERAL.—Subsection (d) of section 213 is 

14 amended by adding at the end the following new para15 graph: 

16 ‘‘(12) EXERCISE EQUIPMENT AND PHYSICAL

17 FITNESS PROGRAMS.— 

18 ‘‘(A) IN GENERAL.—The term ‘medical 

19 care’ shall include amounts paid— 

20 ‘‘(i) to purchase or use equipment 

21 used in a program (including a self-di22 rected program) of physical exercise, 

23 ‘‘(ii) to participate, or receive instruc24 tion, in a program of physical exercise, and 


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1 ‘‘(iii) for membership dues in a fitness 

2 club the primary purpose of which is to 

3 provide access to equipment and facilities 

4 for physical exercise. 

5 ‘‘(B) LIMITATION.—Amounts treated as 

6 medical care under subparagraph (A) shall not 

7 exceed $1,000 with respect to any individual for 

8 any taxable year.’’. 

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

10 this section shall apply to taxable years beginning after 

11 the date of the enactment of this Act. 

12 SEC. 237. CERTAIN NUTRITIONAL AND DIETARY SUPPLE13 MENTS TO BE TREATED AS MEDICAL CARE. 

14 (a) IN GENERAL.—Subsection (d) of section 213, as 

15 amended by this Act, is amended by adding at the end 

16 the following new paragraph: 

17 ‘‘(13) NUTRITIONAL AND DIETARY SUPPLE18 MENTS.— 

19 ‘‘(A) IN GENERAL.—The term ‘medical 

20 care’ shall include amounts paid to purchase 

21 herbs, vitamins, minerals, homeopathic rem22 edies, meal replacement products, and other di23 etary and nutritional supplements. 

24 ‘‘(B) LIMITATION.—Amounts treated as 

25 medical care under subparagraph (A) shall not 


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1 exceed $1,000 with respect to any individual for 

2 any taxable year. 

3 ‘‘(C) MEAL REPLACEMENT PRODUCT.— 

4 For purposes of this paragraph, the term ‘meal 

5 replacement product’ means any product that— 

6 ‘‘(i) is permitted to bear labeling mak7 ing a claim described in section 403(r)(3) 

8 of the Federal Food, Drug, and Cosmetic 

9 Act, and 

10 ‘‘(ii) is permitted to claim under such 

11 section that such product is low in fat and 

12 is a good source of protein, fiber, and mul13 tiple essential vitamins and minerals.’’. 

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 SEC. 238. CERTAIN PROVIDER FEES TO BE TREATED AS 

18 MEDICAL CARE. 

19 (a) IN GENERAL.—Subsection (d) of section 213, as 

20 amended by this Act, is amended by adding at the end 

21 the following new paragraph: 

22 ‘‘(14) PERIODIC PROVIDER FEES.—The term 

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

24 primary care physician for the right to receive med25 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. 239. INCREASE THE MAXIMUM CONTRIBUTION LIMIT 

5 TO AN HSA TO MATCH DEDUCTIBLE AND 

6 OUT-OF-POCKET EXPENSE LIMITATION. 

7 (a) SELF-ONLY COVERAGE.—Subparagraph (A) of 

8 section 223(b)(2) is amended by striking ‘‘$2,250’’ and 

9 inserting ‘‘the amount in effect under subsection 

10 (c)(2)(A)(ii)(I)’’. 

11 (b) FAMILY COVERAGE.—Subparagraph (B) of sec12 tion 223(b)(2) is amended by striking ‘‘$4,500’’ and in13 serting ‘‘the amount in effect under subsection 

14 (c)(2)(A)(ii)(II)’’. 

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. 240. CHILD HEALTH SAVINGS ACCOUNT. 

19 (a) IN GENERAL.—Section 223, as amended by this 

20 Act, is amended by adding at the end the following new 

21 subsection: 

22 ‘‘(j) CHILD HEALTH SAVINGS ACCOUNTS.— 

23 ‘‘(1) IN GENERAL.—In the case of an indi24 vidual, in addition to any deduction allowed under 

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1 lowed as a deduction under this section an amount 

2 equal to the aggregate amount paid in cash by the 

3 taxpayer during the taxable year to a child health 

4 savings account of a child of the taxpayer. 

5 ‘‘(2) LIMITATION.—The amount taken into ac6 count under paragraph (1) with respect to each child 

7 of the taxpayer for the taxable year shall not exceed 

8 an amount equal to $3,000. 

9 ‘‘(3) CHILD HEALTH SAVINGS ACCOUNT.—For 

10 purposes of this subsection, the term ‘child health 

11 savings account’ means a health savings account 

12 designated as a child health savings account and es13 tablished for the benefit of a child of a taxpayer, but 

14 only if— 

15 ‘‘(A) such account was established for the 

16 benefit of the child before the child attains the 

17 age of 5, and 

18 ‘‘(B) under the written governing instru19 ment creating the trust, no contribution will be 

20 accepted to the extent such contribution, when 

21 added to previous contributions to the trust for 

22 the calendar year, exceeds the dollar amount in 

23 effect under paragraph (2). 

24 ‘‘(4) TREATMENT OF ACCOUNT BEFORE AGE

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1 wise provided in this subsection, a child health sav2 ings account established for the benefit of the child 

3 of a taxpayer shall be treated as a health savings ac4 count of the taxpayer until the child attains the age 

5 of 18, after which such account shall be treated as 

6 a health savings account of the child. 

7 ‘‘(5) DISTRIBUTIONS.— 

8 ‘‘(A) IN GENERAL.—In the case of a child 

9 health savings account established under this 

10 section for the benefit of a child of a tax11 payer— 

12 ‘‘(i) BEFORE AGE 18.—Any amount 

13 paid or distributed out of such account be14 fore the child has attained the age of 18, 

15 shall be included in the gross income of the 

16 taxpayer, and subparagraph (A) of sub17 section (f) shall apply (relating to addi18 tional tax on distributions not used for 

19 qualified medical expenses). 

20 ‘‘(ii) AGE 18 AND OLDER.—Any 

21 amount paid or distributed out of such ac22 count after the child has attained the age 

23 of 18 may only be treated as used to pay 

24 qualified medical expenses to the extent 

25 such child is not covered as a dependent 


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1 under insurance (other than permitted in2 surance) of a parent. 

3 ‘‘(B) EXCEPTIONS FOR DISABILITY OR

4 DEATH OF CHILD.—If the child becomes dis5 abled within the meaning of section 72(m)(7) or 

6 dies— 

7 ‘‘(i) subparagraph (A) shall not apply 

8 to any subsequent payment or distribution, 

9 and 

10 ‘‘(ii) the taxpayer may rollover the 

11 amount in such account to an individual 

12 retirement plan of the taxpayer, to any 

13 health savings account of the taxpayer, or 

14 to any child health savings account of any 

15 other child of the taxpayer. 

16 ‘‘(C) HEALTH INSURANCE MAY BE PUR17 CHASED FROM ACCOUNT.—Subparagraph (B) 

18 of subsection (d)(2) shall not apply to any 

19 health savings account originally established as 

20 a child health savings account. 

21 ‘‘(6) REGULATIONS.—The Secretary shall pre22 scribe such regulations as may be necessary to carry 

23 out the purposes of this subsection, including rules 

24 for determining application of this subsection in the 

25 case of legal guardians and in the case of parents 


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1 of a child who file separately, are separated, or are 

2 not married.’’. 

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

4 this section shall apply to taxable years beginning after 

5 December 31, 2015. 

6 SEC. 241. ALLOWING MINIMUM DISTRIBUTIONS FROM TAX7 DEFERRED RETIREMENT ACCOUNTS TO BE 

8 DEPOSITED INTO HSAS. 

9 (a) TRANSFER FROM RETIREMENT PLAN.— 

10 (1) INDIVIDUAL RETIREMENT ACCOUNTS.—Sec11 tion 408(d) is amended by adding at the end the fol12 lowing new paragraph: 

13 ‘‘(10) REQUIRED MINIMUM DISTRIBUTION

14 TRANSFERRED TO HEALTH SAVINGS ACCOUNT.— 

15 ‘‘(A) IN GENERAL.—In the case of an individual who has attained the age of 701 16 ⁄2 and 

17 who elects the application of this paragraph for 

18 a taxable year, gross income of the individual 

19 for the taxable year does not include a qualified 

20 HSA transfer to the extent such transfer is oth21 erwise includible in gross income. 

22 ‘‘(B) QUALIFIED HSA TRANSFER.—For 

23 purposes of this paragraph, the term ‘qualified 

24 HSA transfer’ means any distribution from an 

25 individual retirement plan— 


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

2 individual in a direct trustee-to-trustee 

3 transfer, 

4 ‘‘(ii) to the extent such distribution 

5 does not exceed the required minimum dis6 tribution determined under section 

7 401(a)(9) for the distribution calendar 

8 year ending during the taxable year. 

9 ‘‘(C) APPLICATION OF SECTION 72.—Not10 withstanding section 72, in determining the ex11 tent to which an amount is treated as a dis12 tribution for purposes of paragraph (1), the en13 tire amount of the distribution shall be treated 

14 as includible in gross income without regard to 

15 paragraph (1) to the extent that such amount 

16 does not exceed the aggregate amount which 

17 would have been so includible if all amounts in 

18 all individual retirement plans of the individual 

19 were distributed during such taxable year and 

20 all such plans were treated as 1 contract for 

21 purposes of determining under section 72 the 

22 aggregate amount which would have been so in23 cludible. Proper adjustments shall be made in 

24 applying section 72 to other distributions in 

25 such taxable year and subsequent taxable years. 


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

2 not be made under subparagraph (A) for a tax3 able year for which an election is in effect 

4 under paragraph (9).’’. 

5 (2) OTHER RETIREMENT PLANS.—Section 402 

6 of the Internal Revenue Code of 1986 is amended by 

7 adding at the end the following new subsection: 

8 ‘‘(m) REQUIRED MINIMUM DISTRIBUTION TRANS9 FERRED TO HEALTH SAVINGS ACCOUNT.— 

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

who has attained the age of 701 11 ⁄2 and who elects the 

12 application of this subsection for a taxable year, 

13 gross income of the individual for the taxable year 

14 does not include a qualified HSA transfer to the ex15 tent such transfer is otherwise includible in gross in16 come. 

17 ‘‘(2) QUALIFIED HSA TRANSFER.—For pur18 poses of this subsection, the term ‘qualified HSA 

19 transfer’ means any distribution from an individual 

20 retirement plan— 

21 ‘‘(A) to a health savings account of the in22 dividual in a direct trustee-to-trustee transfer, 

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

24 not exceed the required minimum distribution 

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1 tribution calendar year ending during the tax2 able year. 

3 ‘‘(3) APPLICATION OF SECTION 72.—Notwith4 standing section 72, in determining the extent to 

5 which an amount is treated as a distribution for 

6 purposes of paragraph (1), the entire amount of the 

7 distribution shall be treated as includible in gross in8 come without regard to paragraph (1) to the extent 

9 that such amount does not exceed the aggregate 

10 amount which would have been so includible if all 

11 amounts in all eligible retirement plans of the indi12 vidual were distributed during such taxable year and 

13 all such plans were treated as 1 contract for pur14 poses of determining under section 72 the aggregate 

15 amount which would have been so includible. Proper 

16 adjustments shall be made in applying section 72 to 

17 other distributions in such taxable year and subse18 quent taxable years. 

19 ‘‘(4) ELIGIBLE RETIREMENT PLAN.—For pur20 poses of this subsection, the term ‘eligible retirement 

21 plan’ has the meaning given such term by subsection 

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

23 and (ii) thereof).’’. 

24 (b) TRANSFER TO HEALTH SAVINGS ACCOUNT.— 


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1 (1) IN GENERAL.—Subparagraph (A) of section 

2 223(d)(1) is amended by striking ‘‘or’’ at the end of 

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

4 (ii)(II) and inserting ‘‘, or’’, and by adding at the 

5 end the following new clause: 

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

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

8 402(m).’’. 

9 (2) EXCISE TAX INAPPLICABLE TO QUALIFIED

10 HSA TRANSFER.—Paragraph (1) of section 4973(g) 

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

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

13 after ‘‘or 223(f)(5)’’. 

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

15 this section shall apply to distributions made after the 

16 date of the enactment of this Act, in taxable years ending 

17 after such date. 

18 SEC. 242. DISTRIBUTIONS FOR ABORTION EXPENSES FROM 

19 HEALTH SAVINGS ACCOUNTS INCLUDED IN 

20 GROSS INCOME. 

21 (a) IN GENERAL.—Subsection (f) of section 223 is 

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

24 ‘‘(9) EXCEPTION FOR CERTAIN ABORTION EX25 PENSES.— 


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1 ‘‘(A) IN GENERAL.—Notwithstanding para2 graph (1), any amount used to pay for an abor3 tion (other than an abortion described in sub4 paragraph (B)) shall be included in the gross 

5 income of such beneficiary. 

6 ‘‘(B) EXCEPTIONS.—Subparagraph (A) 

7 shall not apply to— 

8 ‘‘(i) an abortion— 

9 ‘‘(I) in the case of a pregnancy 

10 that is the result of an act of rape or 

11 incest, or 

12 ‘‘(II) in the case where a woman 

13 suffers from a physical disorder, phys14 ical injury, or physical illness that 

15 would, as certified by a physician, 

16 place the woman in danger of death 

17 unless an abortion is performed, in18 cluding a life-endangering physical 

19 condition caused by or arising from 

20 the pregnancy, and 

21 ‘‘(ii) the treatment of any infection, 

22 injury, disease, or disorder that has been 

23 caused by or exacerbated by the perform24 ance of an abortion.’’. 


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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 Subtitle C—Enhanced Wellness 

5 Incentives 

6 SEC. 251. PROVIDING FINANCIAL INCENTIVES FOR TREAT7 MENT COMPLIANCE. 

8 (a) LIMITATION ON EXCEPTION FOR WELLNESS

9 PROGRAMS UNDER HIPAA DISCRIMINATION RULES.— 

10 (1) EMPLOYEE RETIREMENT INCOME SECURITY

11 ACT OF 1974 AMENDMENT.—Section 702(b)(2) of the 

12 Employee Retirement Income Security Act of 1974 

13 (29 U.S.C. 1182(b)(2)) is amended by adding at the 

14 end the following flush sentence: 

15 ‘‘In applying subparagraph (B), a group health plan 

16 (or a health insurance issuer with respect to health 

17 insurance coverage) may vary premiums and cost18 sharing by up to 50 percent of the value of the bene19 fits under the plan (or coverage) based on participa20 tion (or lack of participation) in a standards-based 

21 wellness program.’’. 

22 (2) PHSA AMENDMENT.—Section 2705(b)(2) 

23 of the Public Health Service Act (42 U.S.C. 300gg– 

24 4(b)(2)) is amended by adding at the end the fol25 lowing flush sentence: 


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1 ‘‘In applying subparagraph (B), a group health plan 

2 (or a health insurance issuer with respect to health 

3 insurance coverage) may vary premiums and cost4 sharing by up to 50 percent of the value of the bene5 fits under the plan (or coverage) based on participa6 tion (or lack of participation) in a standards-based 

7 wellness program.’’. 

8 (3) IRC AMENDMENT.—Section 9802(b)(2) of 

9 the Internal Revenue Code of 1986 is amended by 

10 adding at the end the following flush sentence: 

11 ‘‘In applying subparagraph (B), a group health plan 

12 may vary premiums and cost-sharing by up to 50 

13 percent of the value of the benefits under the plan 

14 based on participation (or lack of participation) in a 

15 standards-based wellness program.’’. 

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

17 subsection (a) shall apply to plan years beginning more 

18 than 1 year after the date of the enactment of this Act. 


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1 TITLE III—IMPROVING ACCESS 

2 TO INSURANCE FOR VULNER3 ABLE AMERICANS 

4 Subtitle A—Eliminating Barriers to 

5 Insurance Coverage 

6 SEC. 301. ELIMINATION OF CERTAIN REQUIREMENTS FOR 

7 GUARANTEED AVAILABILITY IN INDIVIDUAL 

8 MARKET. 

9 (a) IN GENERAL.—Section 2741(b) of the Public 

10 Health Service Act (42 U.S.C. 300gg–41(b)) is amend11 ed— 

12 (1) in paragraph (1)— 

13 (A) by striking ‘‘(1)(A)’’ and inserting 

14 ‘‘(1)’’; and 

15 (B) by striking ‘‘and (B)’’ and all that fol16 lows up to the semicolon at the end; 

17 (2) by adding ‘‘and’’ at the end of paragraph 

18 (2); 

19 (3) in paragraph (3)— 

20 (A) by striking ‘‘(1)(A)’’ and inserting 

21 ‘‘(1)’’; and 

22 (B) by striking the semicolon at the end 

23 and inserting a period; and 

24 (4) by striking paragraphs (4) and (5). 


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

2 subsection (a) shall take effect on the date of the enact3 ment of this Act. 

4 Subtitle B—Ensuring Coverage for 

5 Individuals With Preexisting 

6 Conditions and Multiple Health 

7 Care Needs Through High Risk 

8 Pools 

9 SEC. 311. IMPROVEMENT OF HIGH RISK POOLS. 

10 Section 2745 of the Public Health Service Act (42 

11 U.S.C. 300gg–45) is amended— 

12 (1) in subsection (a), by adding at the end the 

13 following: ‘‘The Secretary shall provide from the 

14 funds appropriated under subsection (d)(3)(A) a 

15 grant of up to $5,000,000 to each State that has 

16 not created a qualified high risk pool as of Sep17 tember 1, 2015, for the State’s costs of creation and 

18 initial operation of such a pool.’’; 

19 (2) in paragraphs (1) and (2) of subsection (b), 

20 by striking ‘‘and (2)(A)’’ and inserting ‘‘(2)(A), 

21 (3)(B), and (4)’’ each place it appears; 

22 (3) in subsection (b)(3), by inserting ‘‘with re23 spect to funds made available for fiscal years before 

24 fiscal year 2014,’’after ‘‘applicable standard risks,’’; 


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1 (4) by adding at the end of subsection (b) the 

2 following new paragraph: 

3 ‘‘(5) VERIFICATION OF CITIZENSHIP OR ALIEN

4 QUALIFICATION.— 

5 ‘‘(A) IN GENERAL.—Notwithstanding any 

6 other provision of law, effective upon the date 

7 of the enactment of this paragraph, only citi8 zens and nationals of the United States shall be 

9 eligible to participate in a qualified high risk 

10 pool that receives funds under this section. 

11 ‘‘(B) CONDITION OF PARTICIPATION.—As 

12 a condition of a State receiving such funds 

13 under this subsection for a fiscal year beginning 

14 with fiscal year 2016, the Secretary shall re15 quire the State to certify, to the satisfaction of 

16 the Secretary, that such State requires all ap17 plicants for coverage in the qualified high risk 

18 pool to provide satisfactory documentation of 

19 citizenship or nationality in a manner consistent 

20 with section 1903(x) of the Social Security Act. 

21 ‘‘(C) RECORDS.—The Secretary shall keep 

22 sufficient records such that a determination of 

23 citizenship or nationality only has to be made 

24 once for any individual under this paragraph.’’; 

25 and 


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1 (5) in subsection (d)— 

2 (A) in paragraphs (1)(B) and (2) by strik3 ing ‘‘paragraph (4)’’ and inserting ‘‘paragraph 

4 (6)’’; 

5 (B) in paragraph (4), by striking ‘‘or (2)’’ 

6 and inserting ‘‘(2), (3)(B), or (4)’’; 

7 (C) by redesignating paragraphs (3) 

8 through (5) as paragraphs (5) through (7), re9 spectively; and 

10 (D) by inserting after paragraph (2) the 

11 following: 

12 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS FOR

13 FISCAL YEAR 2016.—There are authorized to be ap14 propriated for fiscal year 2016— 

15 ‘‘(A) $50,000,000 to carry out the second 

16 sentence of subsection (a); and 

17 ‘‘(B) $2,450,000,000 which, subject to 

18 paragraph (6), shall be made available for allot19 ments under subsection (b)(2). 

20 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS FOR

21 FISCAL YEARS 2017 THROUGH 2025.—There are au22 thorized to be appropriated $2,500,000,000 for each 

23 of fiscal years 2017 through 2025 which, subject to 

24 paragraph (6), shall be made available for allotments 

25 under subsection (b)(2).’’. 


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1 TITLE IV—ENCOURAGING A 

2 MORE COMPETITIVE HEALTH 

3 CARE MARKET 

4 Subtitle A—Expanding Patient 

5 Choice 

6 SEC. 401. COOPERATIVE GOVERNING OF INDIVIDUAL 

7 HEALTH INSURANCE COVERAGE. 

8 (a) IN GENERAL.—Title XXVII of the Public Health 

9 Service Act (42 U.S.C. 300gg et seq.) is amended by add10 ing at the end the following new 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). 

24 ‘‘(5) APPLICABLE STATE AUTHORITY.—The 

25 term ‘applicable State authority’ means, with respect 


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1 to a health insurance issuer in a State, the State in2 surance commissioner or official or officials des3 ignated by the State to enforce the requirements of 

4 this title for the State with respect to the issuer. 

5 ‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 

6 term ‘hazardous financial condition’ means that, 

7 based on its present or reasonably anticipated finan8 cial condition, a health insurance issuer is unlikely 

9 to be able— 

10 ‘‘(A) to meet obligations to policyholders 

11 with respect to known claims and reasonably 

12 anticipated claims; or 

13 ‘‘(B) to pay other obligations in the normal 

14 course of business. 

15 ‘‘(7) COVERED LAWS.— 

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

17 laws’ means the laws, rules, regulations, agree18 ments, and orders governing the insurance busi19 ness pertaining to— 

20 ‘‘(i) individual health insurance cov21 erage issued by a health insurance issuer; 

22 ‘‘(ii) the offer, sale, rating (including 

23 medical underwriting), renewal, and 

24 issuance of individual health insurance cov25 erage to an individual; 


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1 ‘‘(iii) the provision to an individual in 

2 relation to individual health insurance cov3 erage of health care and insurance related 

4 services; 

5 ‘‘(iv) the provision to an individual in 

6 relation to individual health insurance cov7 erage of management, operations, and in8 vestment activities of a health insurance 

9 issuer; and 

10 ‘‘(v) the provision to an individual in 

11 relation to individual health insurance cov12 erage of loss control and claims adminis13 tration for a health insurance issuer with 

14 respect to liability for which the issuer pro15 vides insurance. 

16 ‘‘(B) EXCEPTION.—Such term does not in17 clude any law, rule, regulation, agreement, or 

18 order governing the use of care or cost manage19 ment techniques, including any requirement re20 lated to provider contracting, network access or 

21 adequacy, health care data collection, or quality 

22 assurance. 

23 ‘‘(8) STATE.—The term ‘State’ means the 50 

24 States and includes the District of Columbia, Puerto 


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1 Rico, the Virgin Islands, Guam, American Samoa, 

2 and the Northern Mariana Islands. 

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 quest 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.—Subject to section 701(d) of the 

5 American Health Care Reform Act of 2015, the covered 

6 laws of the primary State shall apply to individual health 

7 insurance coverage offered by a health insurance issuer 

8 in the primary State and in any secondary State, but only 

9 if the coverage and issuer comply with the conditions of 

10 this section with respect to the offering of coverage in any 

11 secondary State. 

12 ‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC13 ONDARY STATE.—Except as provided in this section, a 

14 health insurance issuer with respect to its offer, sale, rat15 ing (including medical underwriting), renewal, and 

16 issuance of individual health insurance coverage in any 

17 secondary State is exempt from any covered laws of the 

18 secondary State (and any rules, regulations, agreements, 

19 or orders sought or issued by such State under or related 

20 to such covered laws) to the extent that such laws would— 

21 ‘‘(1) make unlawful, or regulate, directly or in22 directly, the operation of the health insurance issuer 

23 operating in the secondary State, except that any 

24 secondary State may require such an issuer— 


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1 ‘‘(A) to pay, on a nondiscriminatory basis, 

2 applicable premium and other taxes (including 

3 high risk pool assessments) which are levied on 

4 insurers and surplus lines insurers, brokers, or 

5 policyholders under the laws of the State; 

6 ‘‘(B) to register with and designate the 

7 State insurance commissioner as its agent solely 

8 for the purpose of receiving service of legal doc9 uments or process; 

10 ‘‘(C) to submit to an examination of its fi11 nancial condition by the State insurance com12 missioner in any State in which the issuer is 

13 doing business to determine the issuer’s finan14 cial condition, if— 

15 ‘‘(i) the State insurance commissioner 

16 of the primary State has not done an ex17 amination within the period recommended 

18 by the National Association of Insurance 

19 Commissioners; and 

20 ‘‘(ii) any such examination is con21 ducted in accordance with the examiners’ 

22 handbook of the National Association of 

23 Insurance Commissioners and is coordi24 nated to avoid unjustified duplication and 

25 unjustified repetition; 


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1 ‘‘(D) to comply with a lawful order 

2 issued— 

3 ‘‘(i) in a delinquency proceeding com4 menced by the State insurance commis5 sioner if there has been a finding of finan6 cial impairment under subparagraph (C); 

7 or 

8 ‘‘(ii) in a voluntary dissolution pro9 ceeding; 

10 ‘‘(E) to comply with an injunction issued 

11 by a court of competent jurisdiction, upon a pe12 tition by the State insurance commissioner al13 leging that the issuer is in hazardous financial 

14 condition; 

15 ‘‘(F) to participate, on a nondiscriminatory 

16 basis, in any insurance insolvency guaranty as17 sociation or similar association to which a 

18 health insurance issuer in the State is required 

19 to belong; 

20 ‘‘(G) to comply with any State law regard21 ing fraud and abuse (as defined in section 

22 2795(10)), except that if the State seeks an in23 junction regarding the conduct described in this 

24 subparagraph, such injunction must be obtained 

25 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 ‘‘ ‘NOTICE

2 ‘‘ ‘This policy is issued by lllll and is gov3 erned by the laws and regulations of the State of 

4 lllll, and it has met all the laws of that State as 

5 determined by that State’s Department of Insurance. This 

6 policy may be less expensive than others because it is not 

7 subject to all of the insurance laws and regulations of the 

8 State of lllll, including coverage of some services 

9 or benefits mandated by the law of the State of 

10 lllll. Additionally, this policy is not subject to all 

11 of the consumer protection laws or restrictions on rate 

12 changes of the State of lllll. As with all insurance 

13 products, before purchasing this policy, you should care14 fully review the policy and determine what health care 

15 services the policy covers and what benefits it provides, 

16 including any exclusions, limitations, or conditions for 

17 such services or benefits.’. 

18 ‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS

19 AND PREMIUM INCREASES.— 

20 ‘‘(1) IN GENERAL.—For purposes of this sec21 tion, a health insurance issuer that provides indi22 vidual health insurance coverage to an individual 

23 under this part in a primary or secondary State may 

24 not upon renewal— 


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1 ‘‘(A) move or reclassify the individual in2 sured under the health insurance coverage from 

3 the class such individual is in at the time of 

4 issue of the contract based on the health-status 

5 related factors of the individual; or 

6 ‘‘(B) increase the premiums assessed the 

7 individual for such coverage based on a health 

8 status-related factor or change of a health sta9 tus-related factor or the past or prospective 

10 claim experience of the insured individual. 

11 ‘‘(2) CONSTRUCTION.—Nothing in paragraph 

12 (1) shall be construed to prohibit a health insurance 

13 issuer— 

14 ‘‘(A) from terminating or discontinuing 

15 coverage or a class of coverage in accordance 

16 with subsections (b) and (c) of section 2742; 

17 ‘‘(B) from raising premium rates for all 

18 policy holders within a class based on claims ex19 perience; 

20 ‘‘(C) from changing premiums or offering 

21 discounted premiums to individuals who engage 

22 in wellness activities at intervals prescribed by 

23 the issuer, if such premium changes or incen24 tives— 


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1 ‘‘(i) are disclosed to the consumer in 

2 the insurance contract; 

3 ‘‘(ii) are based on specific wellness ac4 tivities that are not applicable to all indi5 viduals; and 

6 ‘‘(iii) are not obtainable by all individ7 uals to whom coverage is offered; 

8 ‘‘(D) from reinstating lapsed coverage; or 

9 ‘‘(E) from retroactively adjusting the rates 

10 charged an insured individual if the initial rates 

11 were set based on material misrepresentation by 

12 the individual at the time of issue. 

13 ‘‘(e) PRIOR OFFERING OF POLICY IN PRIMARY

14 STATE.—A health insurance issuer may not offer for sale 

15 individual health insurance coverage in a secondary State 

16 unless that coverage is currently offered for sale in the 

17 primary State. 

18 ‘‘(f) LICENSING OF AGENTS OR BROKERS FOR

19 HEALTH INSURANCE ISSUERS.—Any State may require 

20 that a person acting, or offering to act, as an agent or 

21 broker for a health insurance issuer with respect to the 

22 offering of individual health insurance coverage obtain a 

23 license from that State, with commissions or other com24 pensation subject to the provisions of the laws of that 

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1 tion or requirement which discriminates against a non2 resident agent or broker. 

3 ‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN4 SURANCE COMMISSIONER.—Each health insurance issuer 

5 issuing individual health insurance coverage in both pri6 mary and secondary States shall submit— 

7 ‘‘(1) to the insurance commissioner of each 

8 State in which it intends to offer such coverage, be9 fore it may offer individual health insurance cov10 erage in such State— 

11 ‘‘(A) a copy of the plan of operation or fea12 sibility study or any similar statement of the 

13 policy being offered and its coverage (which 

14 shall include the name of its primary State and 

15 its principal place of business); 

16 ‘‘(B) written notice of any change in its 

17 designation of its primary State; and 

18 ‘‘(C) written notice from the issuer of the 

19 issuer’s compliance with all the laws of the pri20 mary State; and 

21 ‘‘(2) to the insurance commissioner of each sec22 ondary State in which it offers individual health in23 surance coverage, a copy of the issuer’s quarterly fi24 nancial statement submitted to the primary State, 

25 which statement shall be certified by an independent 


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1 public accountant and contain a statement of opin2 ion on loss and loss adjustment expense reserves 

3 made by— 

4 ‘‘(A) a member of the American Academy 

5 of Actuaries; or 

6 ‘‘(B) a qualified loss reserve specialist. 

7 ‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 

8 Nothing in this section shall be construed to affect the 

9 authority of any Federal or State court to enjoin— 

10 ‘‘(1) the solicitation or sale of individual health 

11 insurance coverage by a health insurance issuer to 

12 any person or group who is not eligible for such in13 surance; or 

14 ‘‘(2) the solicitation or sale of individual health 

15 insurance coverage that violates the requirements of 

16 the law of a secondary State which are described in 

17 subparagraphs (A) through (H) of section 

18 2796(b)(1). 

19 ‘‘(i) POWER OF SECONDARY STATES TO TAKE AD20 MINISTRATIVE ACTION.—Nothing in this section shall be 

21 construed to affect the authority of any State to enjoin 

22 conduct in violation of that State’s laws described in sec23 tion 2796(b)(1). 

24 ‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 


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1 ‘‘(1) IN GENERAL.—Subject to the provisions of 

2 subsection (b)(1)(G) (relating to injunctions) and 

3 paragraph (2), nothing in this section shall be con4 strued to affect the authority of any State to make 

5 use of any of its powers to enforce the laws of such 

6 State with respect to which a health insurance issuer 

7 is not exempt under subsection (b). 

8 ‘‘(2) COURTS OF COMPETENT JURISDICTION.— 

9 If a State seeks an injunction regarding the conduct 

10 described in paragraphs (1) and (2) of subsection 

11 (h), such injunction must be obtained from a Fed12 eral or State court of competent jurisdiction. 

13 ‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 

14 section shall affect the authority of any State to bring ac15 tion in any Federal or State court. 

16 ‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 

17 this section shall be construed to affect the applicability 

18 of State laws generally applicable to persons or corpora19 tions. 

20 ‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO

21 HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 

22 health insurance issuer is offering coverage in a primary 

23 State that does not accommodate residents of secondary 

24 States or does not provide a working mechanism for resi25 dents of a secondary State, and the issuer is offering covVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 erage under this part in such secondary State which has 

2 not adopted a qualified high risk pool as its acceptable 

3 alternative mechanism (as defined in section 2744(c)(2)), 

4 the issuer shall, with respect to any individual health in5 surance coverage offered in a secondary State under this 

6 part, comply with the guaranteed availability requirements 

7 for eligible individuals in section 2741. 

8 ‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 

9 BEFORE ISSUER MAY SELL INTO SECONDARY 

10 STATES. 

11 ‘‘A health insurance issuer may not offer, sell, or 

12 issue individual health insurance coverage in a secondary 

13 State if the State insurance commissioner does not use 

14 a risk-based capital formula for the determination of cap15 ital and surplus requirements for all health insurance 

16 issuers. 

17 ‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE18 DURES. 

19 ‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur20 ance issuer may not offer, sell, or issue individual health 

21 insurance coverage in a secondary State under the provi22 sions of this title unless— 

23 ‘‘(1) both the secondary State and the primary 

24 State have legislation or regulations in place estab25 lishing an independent review process for individuals 


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1 who are covered by individual health insurance cov2 erage, or 

3 ‘‘(2) in any case in which the requirements of 

4 subparagraph (A) are not met with respect to the ei5 ther of such States, the issuer provides an inde6 pendent review mechanism substantially identical (as 

7 determined by the applicable State authority of such 

8 State) to that prescribed in the ‘Health Carrier Ex9 ternal Review Model Act’ of the National Association 

10 of Insurance Commissioners for all individuals who 

11 purchase insurance coverage under the terms of this 

12 part, except that, under such mechanism, the review 

13 is conducted by an independent medical reviewer, or 

14 a panel of such reviewers, with respect to whom the 

15 requirements of subsection (b) are met. 

16 ‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL

17 REVIEWERS.—In the case of any independent review 

18 mechanism referred to in subsection (a)(2)— 

19 ‘‘(1) IN GENERAL.—In referring a denial of a 

20 claim to an independent medical reviewer, or to any 

21 panel of such reviewers, to conduct independent 

22 medical review, the issuer shall ensure that— 

23 ‘‘(A) each independent medical reviewer 

24 meets the qualifications described in paragraphs 

25 (2) and (3); 


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1 ‘‘(B) with respect to each review, each re2 viewer meets the requirements of paragraph (4) 

3 and the reviewer, or at least 1 reviewer on the 

4 panel, meets the requirements described in 

5 paragraph (5); and 

6 ‘‘(C) compensation provided by the issuer 

7 to each reviewer is consistent with paragraph 

8 (6). 

9 ‘‘(2) LICENSURE AND EXPERTISE.—Each inde10 pendent medical reviewer shall be a physician 

11 (allopathic or osteopathic) or health care profes12 sional who— 

13 ‘‘(A) is appropriately credentialed or li14 censed in 1 or more States to deliver health 

15 care services; and 

16 ‘‘(B) typically treats the condition, makes 

17 the diagnosis, or provides the type of treatment 

18 under review. 

19 ‘‘(3) INDEPENDENCE.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), each independent medical reviewer 

22 in a case shall— 

23 ‘‘(i) not be a related party (as defined 

24 in paragraph (7)); 


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1 ‘‘(ii) not have a material familial, fi2 nancial, or professional relationship with 

3 such a party; and 

4 ‘‘(iii) not otherwise have a conflict of 

5 interest with such a party (as determined 

6 under regulations). 

7 ‘‘(B) EXCEPTION.—Nothing in subpara8 graph (A) shall be construed to— 

9 ‘‘(i) prohibit an individual, solely on 

10 the basis of affiliation with the issuer, 

11 from serving as an independent medical re12 viewer if— 

13 ‘‘(I) a non-affiliated individual is 

14 not reasonably available; 

15 ‘‘(II) the affiliated individual is 

16 not involved in the provision of items 

17 or services in the case under review; 

18 ‘‘(III) the fact of such an affili19 ation is disclosed to the issuer and the 

20 enrollee (or authorized representative) 

21 and neither party objects; and 

22 ‘‘(IV) the affiliated individual is 

23 not an employee of the issuer and 

24 does not provide services exclusively or 

25 primarily to or on behalf of the issuer; 


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1 ‘‘(ii) prohibit an individual who has 

2 staff privileges at the institution where the 

3 treatment involved takes place from serv4 ing as an independent medical reviewer 

5 merely on the basis of such affiliation if 

6 the affiliation is disclosed to the issuer and 

7 the enrollee (or authorized representative), 

8 and neither party objects; or 

9 ‘‘(iii) prohibit receipt of compensation 

10 by an independent medical reviewer from 

11 an entity if the compensation is provided 

12 consistent with paragraph (6). 

13 ‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL

14 IN SAME FIELD.— 

15 ‘‘(A) IN GENERAL.—In a case involving 

16 treatment, or the provision of items or serv17 ices— 

18 ‘‘(i) by a physician, a reviewer shall be 

19 a practicing physician (allopathic or osteo20 pathic) of the same or similar specialty, as 

21 a physician who, acting within the appro22 priate scope of practice within the State in 

23 which the service is provided or rendered, 

24 typically treats the condition, makes the 


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1 diagnosis, or provides the type of treat2 ment under review; or 

3 ‘‘(ii) by a non-physician health care 

4 professional, the reviewer, or at least 1 

5 member of the review panel, shall be a 

6 practicing non-physician health care pro7 fessional of the same or similar specialty 

8 as the non-physician health care profes9 sional who, acting within the appropriate 

10 scope of practice within the State in which 

11 the service is provided or rendered, typi12 cally treats the condition, makes the diag13 nosis, or provides the type of treatment 

14 under review. 

15 ‘‘(B) PRACTICING DEFINED.—For pur16 poses of this paragraph, the term ‘practicing’ 

17 means, with respect to an individual who is a 

18 physician or other health care professional, that 

19 the individual provides health care services to 

20 individual patients on average at least 2 days 

21 per week. 

22 ‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 

23 external review relating to a child, a reviewer shall 

24 have expertise under paragraph (2) in pediatrics. 


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1 ‘‘(6) LIMITATIONS ON REVIEWER COMPENSA2 TION.—Compensation provided by the issuer to an 

3 independent medical reviewer in connection with a 

4 review under this section shall— 

5 ‘‘(A) not exceed a reasonable level; and 

6 ‘‘(B) not be contingent on the decision ren7 dered by the reviewer. 

8 ‘‘(7) RELATED PARTY DEFINED.—For purposes 

9 of this section, the term ‘related party’ means, with 

10 respect to a denial of a claim under a coverage relat11 ing to an enrollee, any of the following: 

12 ‘‘(A) The issuer involved, or any fiduciary, 

13 officer, director, or employee of the issuer. 

14 ‘‘(B) The enrollee (or authorized represent15 ative). 

16 ‘‘(C) The health care professional that pro17 vides the items or services involved in the de18 nial. 

19 ‘‘(D) The institution at which the items or 

20 services (or treatment) involved in the denial 

21 are provided. 

22 ‘‘(E) The manufacturer of any drug or 

23 other item that is included in the items or serv24 ices involved in the denial. 


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1 ‘‘(F) Any other party determined under 

2 any regulations to have a substantial interest in 

3 the denial involved. 

4 ‘‘(8) DEFINITIONS.—For purposes of this sub5 section: 

6 ‘‘(A) ENROLLEE.—The term ‘enrollee’ 

7 means, with respect to health insurance cov8 erage offered by a health insurance issuer, an 

9 individual enrolled with the issuer to receive 

10 such coverage. 

11 ‘‘(B) HEALTH CARE PROFESSIONAL.—The 

12 term ‘health care professional’ means an indi13 vidual who is licensed, accredited, or certified 

14 under State law to provide specified health care 

15 services and who is operating within the scope 

16 of such licensure, accreditation, or certification. 

17 ‘‘SEC. 2799. ENFORCEMENT. 

18 ‘‘(a) IN GENERAL.—Subject to subsection (b) and 

19 section 701(d) of the American Health Care Reform Act 

20 of 2015, with respect to specific individual health insur21 ance coverage the primary State for such coverage has sole 

22 jurisdiction to enforce the primary State’s covered laws 

23 in the primary State and any secondary State. 

24 ‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 

25 subsection (a) shall be construed to affect the authority 


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1 of a secondary State to enforce its laws as set forth in 

2 the exception specified in section 2796(b)(1). 

3 ‘‘(c) COURT INTERPRETATION.—In reviewing action 

4 initiated by the applicable secondary State authority, the 

5 court of competent jurisdiction shall apply the covered 

6 laws of the primary State. 

7 ‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 

8 of individual health insurance coverage offered in a sec9 ondary State that fails to comply with the covered laws 

10 of the primary State, the applicable State authority of the 

11 secondary State may notify the applicable State authority 

12 of the primary State.’’. 

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

14 subsection (a) shall apply to individual health insurance 

15 coverage offered, issued, or sold after the date that is one 

16 year after the date of the enactment of this Act. 

17 (c) GAO ONGOING STUDY AND REPORTS.— 

18 (1) STUDY.—The Comptroller General of the 

19 United States shall conduct an ongoing study con20 cerning the effect of the amendment made by sub21 section (a) on— 

22 (A) the number of uninsured and under-in23 sured; 


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1 (B) the availability and cost of health in2 surance policies for individuals with pre-existing 

3 medical conditions; 

4 (C) the availability and cost of health in5 surance policies generally; 

6 (D) the elimination or reduction of dif7 ferent types of benefits under health insurance 

8 policies offered in different States; and 

9 (E) cases of fraud or abuse relating to 

10 health insurance coverage offered under such 

11 amendment and the resolution of such cases. 

12 (2) ANNUAL REPORTS.—The Comptroller Gen13 eral shall submit to Congress an annual report, after 

14 the end of each of the 5 years following the effective 

15 date of the amendment made by subsection (a), on 

16 the ongoing study conducted under paragraph (1). 

17 Subtitle B—McCarran-Ferguson 

18 Reform 

19 SEC. 411. RESTORING THE APPLICATION OF ANTITRUST 

20 LAWS TO HEALTH SECTOR INSURERS. 

21 (a) AMENDMENT TO MCCARRAN-FERGUSON ACT.— 

22 Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), 

23 commonly known as the McCarran-Ferguson Act, is 

24 amended by adding at the end the following: 


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1 ‘‘(c)(1) Nothing contained in this Act shall modify, 

2 impair, or supersede the operation of any of the antitrust 

3 laws with respect to the business of health insurance (in4 cluding the business of dental insurance). For purposes 

5 of the preceding sentence, the term ‘antitrust laws’ has 

6 the meaning given it in subsection (a) of the first section 

7 of the Clayton Act, except that such term includes section 

8 5 of the Federal Trade Commission Act to the extent that 

9 such section 5 applies to unfair methods of competition. 

10 ‘‘(2) For purposes of paragraph (1), the term ‘busi11 ness of health insurance (including the business of dental 

12 insurance)’ does not include— 

13 ‘‘(A) the business of life insurance (including 

14 annuities); or 

15 ‘‘(B) the business of property or casualty insur16 ance, including but not limited to, any insurance or 

17 benefits defined as ‘excepted benefits’ under para18 graph (1), subparagraphs (B) or (C) of paragraph 

19 (2), or paragraph (3) of section 9832(c) of the In20 ternal Revenue Code of 1986 (26 U.S.C. 9832(c)) 

21 whether offered separately or in combination with 

22 insurance or benefits described in paragraph (2)(A) 

23 of such section.’’. 

24 (b) RELATED PROVISION.—For purposes of section 

25 5 of the Federal Trade Commission Act (15 U.S.C. 45) 


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1 to the extent such section applies to unfair methods of 

2 competition, section 3(c) of the McCarran-Ferguson Act 

3 shall apply with respect to the business of health insurance 

4 without regard to whether such business is carried on for 

5 profit, notwithstanding the definition of ‘‘Corporation’’ 

6 contained in section 4 of the Federal Trade Commission 

7 Act. 

8 Subtitle C—Medicare Price 

9 Transparency 

10 SEC. 421. PUBLIC AVAILABILITY OF MEDICARE CLAIMS 

11 DATA. 

12 (a) IN GENERAL.—Section 1128J of the Social Secu13 rity Act (42 U.S.C. 1320a–7k) is amended by adding at 

14 the end the following new subsection: 

15 ‘‘(f) PUBLIC AVAILABILITY OF MEDICARE CLAIMS

16 DATA.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall, to the 

18 extent consistent with applicable information, pri19 vacy, security, and disclosure laws, including the 

20 regulations promulgated under the Health Insurance 

21 Portability and Accountability Act of 1996 and sec22 tion 552a of title 5, United States Code, make avail23 able to the public claims and payment data of the 

24 Department of Health and Human Services related 


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1 to title XVIII, including data on payments made to 

2 any provider of services or supplier under such title. 

3 ‘‘(2) IMPLEMENTATION.— 

4 ‘‘(A) IN GENERAL.—Not later than De5 cember 31, 2015, the Secretary shall promul6 gate regulations to carry out this subsection. 

7 ‘‘(B) REQUIREMENTS.—The regulations 

8 promulgated under subparagraph (A) shall en9 sure that— 

10 ‘‘(i) the data described in paragraph 

11 (1) is made available to the public through 

12 a searchable database that the public can 

13 access at no cost; 

14 ‘‘(ii) such database— 

15 ‘‘(I) includes the amount paid to 

16 each provider of services or supplier 

17 under title XVIII, the items or serv18 ices for which such payment was 

19 made, and the location of the provider 

20 of services or supplier; 

21 ‘‘(II) is organized based on the 

22 specialty or the type of provider of 

23 services or supplier involved; 


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1 ‘‘(III) is searchable based on the 

2 type of items or services furnished; 

3 and 

4 ‘‘(IV) includes a disclaimer that 

5 the aggregate data in the database 

6 does not reflect on the quality of the 

7 items or services furnished or of the 

8 provider of services or supplier who 

9 furnished the items or services; and 

10 ‘‘(iii) each provider of services or sup11 plier in the database is identified by a 

12 unique identifier that is available to the 

13 public (such as the National Provider Iden14 tifier of the provider of services or sup15 plier). 

16 ‘‘(C) SCOPE OF DATA.—The database shall 

17 include data for fiscal year 2016, and each year 

18 fiscal year thereafter.’’. 

19 (b) INFORMATION NOT EXEMPT UNDER THE FREE20 DOM OF INFORMATION ACT.—The term ‘‘personnel and 

21 medical files and similar files the disclosure of which 

22 would constitute a clearly unwarranted invasion of per23 sonal privacy’’, as used in section 552(b)(6) of title 5, 

24 United States Code, does not include the information re25 quired to be made available to the public under section 


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1 1128J(f) of the Social Security Act, as added by sub2 section (a). 

3 Subtitle D—State Transparency 

4 Portals 

5 SEC. 431. PROVIDING INFORMATION ON HEALTH COV6 ERAGE OPTIONS AND HEALTH CARE PRO7 VIDERS. 

8 (a) STATE-BASED PORTAL.—A State (by itself or 

9 jointly with other States) may contract with a private enti10 ty to establish a Health Plan and Provider Portal Web 

11 site (referred to in this section as a ‘‘plan portal’’) for 

12 the purposes of providing standardized information— 

13 (1) on health insurance plans that have been 

14 certified to be available for purchase in that State; 

15 and 

16 (2) on price and quality information on health 

17 care providers (including physicians, hospitals, and 

18 other health care institutions). 

19 (b) PROHIBITIONS.— 

20 (1) DIRECT ENROLLMENT.—A plan portal may 

21 not directly enroll individuals in health insurance 

22 plans or under a State Medicaid plan or a State 

23 children’s health insurance plan. 

24 (2) CONFLICTS OF INTEREST.— 


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1 (A) COMPANIES.—A health insurance 

2 issuer offering a health insurance plan through 

3 a plan portal may not— 

4 (i) be the private entity developing 

5 and maintaining a plan portal under this 

6 section; or 

7 (ii) have an ownership interest in such 

8 private entity or in the plan portal. 

9 (B) INDIVIDUALS.—An individual em10 ployed by a health insurance issuer offering a 

11 health insurance plan through a plan portal 

12 may not serve as a director or officer for— 

13 (i) the private entity developing and 

14 maintaining a plan portal under this sec15 tion; or 

16 (ii) the plan portal. 

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

18 construed to prohibit health insurance brokers and agents 

19 from— 

20 (1) utilizing the plan portal for any purpose; or 

21 (2) marketing or offering health insurance 

22 products. 

23 (d) STATE DEFINED.—In this section, the term 

24 ‘‘State’’ has the meaning given such term for purposes of 

25 title XIX of the Social Security Act. 


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1 (e) HEALTH INSURANCE PLANS.—For purposes of 

2 this section, the term ‘‘health insurance plan’’ does not 

3 include coverage of excepted benefits, as defined in section 

4 2791(c) of the Public Health Service Act (42 U.S.C. 

5 300gg–91(c)). 

6 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated $50,000,000 for fiscal 

8 year 2016 to provide funding for the Secretary of Health 

9 and Human Services to award grants to States to enter 

10 into contracts to establish a portal plan under this section, 

11 to remain available until expended. 

12 Subtitle E—Protecting the Doctor13 Patient Relationship 

14 SEC. 441. RULE OF CONSTRUCTION. 

15 Nothing in this Act shall be construed to interfere 

16 with the doctor-patient relationship or the practice of med17 icine. 

18 SEC. 442. REPEAL OF FEDERAL COORDINATING COUNCIL 

19 FOR COMPARATIVE EFFECTIVENESS RE20 SEARCH. 

21 Effective on the date of the enactment of this Act, 

22 section 804 of the American Recovery and Reinvestment 

23 Act of 2009 (42 U.S.C. 299b–8) is repealed. 


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1 Subtitle F—Establishing 

2 Association Health Plans 

3 SEC. 451. RULES GOVERNING ASSOCIATION HEALTH 

4 PLANS. 

5 (a) IN GENERAL.—Subtitle B of title I of the Em6 ployee Retirement Income Security Act of 1974 is amend7 ed by adding after part 7 the following new part: 

8 ‘‘PART 8—RULES GOVERNING ASSOCIATION 

9 HEALTH PLANS 

10 ‘‘SEC. 801. ASSOCIATION HEALTH PLANS. 

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

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

13 whose sponsor is (or is deemed under this part to be) de14 scribed in subsection (b). 

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

16 plan is described in this subsection if such sponsor— 

17 ‘‘(1) is organized and maintained in good faith, 

18 with a constitution and bylaws specifically stating its 

19 purpose and providing for periodic meetings on at 

20 least an annual basis, as a bona fide trade associa21 tion, a bona fide industry association (including a 

22 rural electric cooperative association or a rural tele23 phone cooperative association), a bona fide profes24 sional association, or a bona fide chamber of com25 merce (or similar bona fide business association, inVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 cluding a corporation or similar organization that 

2 operates on a cooperative basis (within the meaning 

3 of section 1381 of the Internal Revenue Code of 

4 1986)), for substantial purposes other than that of 

5 obtaining or providing medical care; 

6 ‘‘(2) is established as a permanent entity which 

7 receives the active support of its members and re8 quires for membership payment on a periodic basis 

9 of dues or payments necessary to maintain eligibility 

10 for membership in the sponsor; and 

11 ‘‘(3) does not condition membership, such dues 

12 or payments, or coverage under the plan on the 

13 basis of health status-related factors with respect to 

14 the employees of its members (or affiliated mem15 bers), or the dependents of such employees, and does 

16 not condition such dues or payments on the basis of 

17 group health plan participation. 

18 Any sponsor consisting of an association of entities which 

19 meet the requirements of paragraphs (1), (2), and (3) 

20 shall be deemed to be a sponsor described in this sub21 section. 

22 ‘‘SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH 

23 PLANS. 

24 ‘‘(a) IN GENERAL.—The applicable authority shall 

25 prescribe by regulation a procedure under which, subject 


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1 to subsection (b), the applicable authority shall certify as2 sociation health plans which apply for certification as 

3 meeting the requirements of this part. 

4 ‘‘(b) STANDARDS.—Under the procedure prescribed 

5 pursuant to subsection (a), in the case of an association 

6 health plan that provides at least one benefit option which 

7 does not consist of health insurance coverage, the applica8 ble authority shall certify such plan as meeting the re9 quirements of this part only if the applicable authority is 

10 satisfied that the applicable requirements of this part are 

11 met (or, upon the date on which the plan is to commence 

12 operations, will be met) with respect to the plan. 

13 ‘‘(c) REQUIREMENTS APPLICABLE TO CERTIFIED

14 PLANS.—An association health plan with respect to which 

15 certification under this part is in effect shall meet the ap16 plicable requirements of this part, effective on the date 

17 of certification (or, if later, on the date on which the plan 

18 is to commence operations). 

19 ‘‘(d) REQUIREMENTS FOR CONTINUED CERTIFI20 CATION.—The applicable authority may provide by regula21 tion for continued certification of association health plans 

22 under this part. 

23 ‘‘(e) CLASS CERTIFICATION FOR FULLY INSURED

24 PLANS.—The applicable authority shall establish a class 

25 certification procedure for association health plans under 


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1 which all benefits consist of health insurance coverage. 

2 Under such procedure, the applicable authority shall pro3 vide for the granting of certification under this part to 

4 the plans in each class of such association health plans 

5 upon appropriate filing under such procedure in connec6 tion with plans in such class and payment of the pre7 scribed fee under section 807(a). 

8 ‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION

9 HEALTH PLANS.—An association health plan which offers 

10 one or more benefit options which do not consist of health 

11 insurance coverage may be certified under this part only 

12 if such plan consists of any of the following: 

13 ‘‘(1) a plan which offered such coverage on the 

14 date of the enactment of this part, 

15 ‘‘(2) a plan under which the sponsor does not 

16 restrict membership to one or more trades and busi17 nesses or industries and whose eligible participating 

18 employers represent a broad cross-section of trades 

19 and businesses or industries, or 

20 ‘‘(3) a plan whose eligible participating employ21 ers represent one or more trades or businesses, or 

22 one or more industries, consisting of any of the fol23 lowing: agriculture; equipment and automobile deal24 erships; barbering and cosmetology; certified public 

25 accounting practices; child care; construction; dance, 


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1 theatrical and orchestra productions; disinfecting 

2 and pest control; financial services; fishing; food 

3 service establishments; hospitals; labor organiza4 tions; logging; manufacturing (metals); mining; med5 ical and dental practices; medical laboratories; pro6 fessional consulting services; sanitary services; trans7 portation (local and freight); warehousing; whole8 saling/distributing; or any other trade or business or 

9 industry which has been indicated as having average 

10 or above-average risk or health claims experience by 

11 reason of State rate filings, denials of coverage, pro12 posed premium rate levels, or other means dem13 onstrated by such plan in accordance with regula14 tions. 

15 ‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 

16 BOARDS OF TRUSTEES. 

17 ‘‘(a) SPONSOR.—The requirements of this subsection 

18 are met with respect to an association health plan if the 

19 sponsor has met (or is deemed under this part to have 

20 met) the requirements of section 801(b) for a continuous 

21 period of not less than 3 years ending with the date of 

22 the application for certification under this part. 

23 ‘‘(b) BOARD OF TRUSTEES.—The requirements of 

24 this subsection are met with respect to an association 

25 health plan if the following requirements are met: 


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1 ‘‘(1) FISCAL CONTROL.—The plan is operated, 

2 pursuant to a trust agreement, by a board of trust3 ees which has complete fiscal control over the plan 

4 and which is responsible for all operations of the 

5 plan. 

6 ‘‘(2) RULES OF OPERATION AND FINANCIAL

7 CONTROLS.—The board of trustees has in effect 

8 rules of operation and financial controls, based on a 

9 3-year plan of operation, adequate to carry out the 

10 terms of the plan and to meet all requirements of 

11 this title applicable to the plan. 

12 ‘‘(3) RULES GOVERNING RELATIONSHIP TO

13 PARTICIPATING EMPLOYERS AND TO CONTRAC14 TORS.— 

15 ‘‘(A) BOARD MEMBERSHIP.— 

16 ‘‘(i) IN GENERAL.—Except as pro17 vided in clauses (ii) and (iii), the members 

18 of the board of trustees are individuals se19 lected from individuals who are the owners, 

20 officers, directors, or employees of the par21 ticipating employers or who are partners in 

22 the participating employers and actively 

23 participate in the business. 

24 ‘‘(ii) LIMITATION.— 


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1 ‘‘(I) GENERAL RULE.—Except as 

2 provided in subclauses (II) and (III), 

3 no such member is an owner, officer, 

4 director, or employee of, or partner in, 

5 a contract administrator or other 

6 service provider to the plan. 

7 ‘‘(II) LIMITED EXCEPTION FOR

8 PROVIDERS OF SERVICES SOLELY ON

9 BEHALF OF THE SPONSOR.—Officers 

10 or employees of a sponsor which is a 

11 service provider (other than a contract 

12 administrator) to the plan may be 

13 members of the board if they con14 stitute not more than 25 percent of 

15 the membership of the board and they 

16 do not provide services to the plan 

17 other than on behalf of the sponsor. 

18 ‘‘(III) TREATMENT OF PRO19 VIDERS OF MEDICAL CARE.—In the 

20 case of a sponsor which is an associa21 tion whose membership consists pri22 marily of providers of medical care, 

23 subclause (I) shall not apply in the 

24 case of any service provider described 


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1 in subclause (I) who is a provider of 

2 medical care under the plan. 

3 ‘‘(iii) CERTAIN PLANS EXCLUDED.— 

4 Clause (i) shall not apply to an association 

5 health plan which is in existence on the 

6 date of the enactment of this part. 

7 ‘‘(B) SOLE AUTHORITY.—The board has 

8 sole authority under the plan to approve appli9 cations for participation in the plan and to con10 tract with a service provider to administer the 

11 day-to-day affairs of the plan. 

12 ‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In 

13 the case of a group health plan which is established and 

14 maintained by a franchiser for a franchise network con15 sisting of its franchisees— 

16 ‘‘(1) the requirements of subsection (a) and sec17 tion 801(a) shall be deemed met if such require18 ments would otherwise be met if the franchiser were 

19 deemed to be the sponsor referred to in section 

20 801(b), such network were deemed to be an associa21 tion described in section 801(b), and each franchisee 

22 were deemed to be a member (of the association and 

23 the sponsor) referred to in section 801(b); and 

24 ‘‘(2) the requirements of section 804(a)(1) shall 

25 be deemed met. 


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1 The Secretary may by regulation define for purposes of 

2 this subsection the terms ‘franchiser’, ‘franchise network’, 

3 and ‘franchisee’. 

4 ‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE5 MENTS. 

6 ‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 

7 requirements of this subsection are met with respect to 

8 an association health plan if, under the terms of the 

9 plan— 

10 ‘‘(1) each participating employer must be— 

11 ‘‘(A) a member of the sponsor, 

12 ‘‘(B) the sponsor, or 

13 ‘‘(C) an affiliated member of the sponsor 

14 with respect to which the requirements of sub15 section (b) are met, 

16 except that, in the case of a sponsor which is a pro17 fessional association or other individual-based asso18 ciation, if at least one of the officers, directors, or 

19 employees of an employer, or at least one of the in20 dividuals who are partners in an employer and who 

21 actively participates in the business, is a member or 

22 such an affiliated member of the sponsor, partici23 pating employers may also include such employer; 

24 and 


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1 ‘‘(2) all individuals commencing coverage under 

2 the plan after certification under this part must 

3 be— 

4 ‘‘(A) active or retired owners (including 

5 self-employed individuals), officers, directors, or 

6 employees of, or partners in, participating em7 ployers; or 

8 ‘‘(B) the beneficiaries of individuals de9 scribed in subparagraph (A). 

10 ‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM11 PLOYEES.—In the case of an association health plan in 

12 existence on the date of the enactment of this part, an 

13 affiliated member of the sponsor of the plan may be of14 fered coverage under the plan as a participating employer 

15 only if— 

16 ‘‘(1) the affiliated member was an affiliated 

17 member on the date of certification under this part; 

18 or 

19 ‘‘(2) during the 12-month period preceding the 

20 date of the offering of such coverage, the affiliated 

21 member has not maintained or contributed to a 

22 group health plan with respect to any of its employ23 ees who would otherwise be eligible to participate in 

24 such association health plan. 


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1 ‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re2 quirements of this subsection are met with respect to an 

3 association health plan if, under the terms of the plan, 

4 no participating employer may provide health insurance 

5 coverage in the individual market for any employee not 

6 covered under the plan which is similar to the coverage 

7 contemporaneously provided to employees of the employer 

8 under the plan, if such exclusion of the employee from cov9 erage under the plan is based on a health status-related 

10 factor with respect to the employee and such employee 

11 would, but for such exclusion on such basis, be eligible 

12 for coverage under the plan. 

13 ‘‘(d) PROHIBITION OF DISCRIMINATION AGAINST

14 EMPLOYERS AND EMPLOYEES ELIGIBLE TO PARTICI15 PATE.—The requirements of this subsection are met with 

16 respect to an association health plan if— 

17 ‘‘(1) under the terms of the plan, all employers 

18 meeting the preceding requirements of this section 

19 are eligible to qualify as participating employers for 

20 all geographically available coverage options, unless, 

21 in the case of any such employer, participation or 

22 contribution requirements of the type referred to in 

23 section 2711 of the Public Health Service Act are 

24 not met; 


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1 ‘‘(2) upon request, any employer eligible to par2 ticipate is furnished information regarding all cov3 erage options available under the plan; and 

4 ‘‘(3) the applicable requirements of sections 

5 701, 702, and 703 are met with respect to the plan. 

6 ‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN 

7 DOCUMENTS, CONTRIBUTION RATES, AND 

8 BENEFIT OPTIONS. 

9 ‘‘(a) IN GENERAL.—The requirements of this section 

10 are met with respect to an association health plan if the 

11 following requirements are met: 

12 ‘‘(1) CONTENTS OF GOVERNING INSTRU13 MENTS.—The instruments governing the plan in14 clude a written instrument, meeting the require15 ments of an instrument required under section 

16 402(a)(1), which— 

17 ‘‘(A) provides that the board of trustees 

18 serves as the named fiduciary required for plans 

19 under section 402(a)(1) and serves in the ca20 pacity of a plan administrator (referred to in 

21 section 3(16)(A)); 

22 ‘‘(B) provides that the sponsor of the plan 

23 is to serve as plan sponsor (referred to in sec24 tion 3(16)(B)); and 


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1 ‘‘(C) incorporates the requirements of sec2 tion 806. 

3 ‘‘(2) CONTRIBUTION RATES MUST BE NON4 DISCRIMINATORY.— 

5 ‘‘(A) The contribution rates for any par6 ticipating small employer do not vary on the 

7 basis of any health status-related factor in rela8 tion to employees of such employer or their 

9 beneficiaries and do not vary on the basis of the 

10 type of business or industry in which such em11 ployer is engaged. 

12 ‘‘(B) Nothing in this title or any other pro13 vision of law shall be construed to preclude an 

14 association health plan, or a health insurance 

15 issuer offering health insurance coverage in 

16 connection with an association health plan, 

17 from— 

18 ‘‘(i) setting contribution rates based 

19 on the claims experience of the plan; or 

20 ‘‘(ii) varying contribution rates for 

21 small employers in a State to the extent 

22 that such rates could vary using the same 

23 methodology employed in such State for 

24 regulating premium rates in the small 

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1 ance coverage offered in connection with 

2 bona fide associations (within the meaning 

3 of section 2791(d)(3) of the Public Health 

4 Service Act), 

5 subject to the requirements of section 702(b) 

6 relating to contribution rates. 

7 ‘‘(3) FLOOR FOR NUMBER OF COVERED INDI8 VIDUALS WITH RESPECT TO CERTAIN PLANS.—If 

9 any benefit option under the plan does not consist 

10 of health insurance coverage, the plan has as of the 

11 beginning of the plan year not fewer than 1,000 par12 ticipants and beneficiaries. 

13 ‘‘(4) MARKETING REQUIREMENTS.— 

14 ‘‘(A) IN GENERAL.—If a benefit option 

15 which consists of health insurance coverage is 

16 offered under the plan, State-licensed insurance 

17 agents shall be used to distribute to small em18 ployers coverage which does not consist of 

19 health insurance coverage in a manner com20 parable to the manner in which such agents are 

21 used to distribute health insurance coverage. 

22 ‘‘(B) STATE-LICENSED INSURANCE

23 AGENTS.—For purposes of subparagraph (A), 

24 the term ‘State-licensed insurance agents’ 

25 means one or more agents who are licensed in 


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1 a State and are subject to the laws of such 

2 State relating to licensure, qualification, test3 ing, examination, and continuing education of 

4 persons authorized to offer, sell, or solicit 

5 health insurance coverage in such State. 

6 ‘‘(5) REGULATORY REQUIREMENTS.—Such 

7 other requirements as the applicable authority deter8 mines are necessary to carry out the purposes of this 

9 part, which shall be prescribed by the applicable au10 thority by regulation. 

11 ‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO

12 DESIGN BENEFIT OPTIONS.—Subject to section 514(d), 

13 nothing in this part or any provision of State law (as de14 fined in section 514(c)(1)) shall be construed to preclude 

15 an association health plan, or a health insurance issuer 

16 offering health insurance coverage in connection with an 

17 association health plan, from exercising its sole discretion 

18 in selecting the specific items and services consisting of 

19 medical care to be included as benefits under such plan 

20 or coverage, except (subject to section 514) in the case 

21 of (1) any law to the extent that it is not preempted under 

22 section 731(a)(1) with respect to matters governed by sec23 tion 711, 712, or 713, (2) any law of the State with which 

24 filing and approval of a policy type offered by the plan 

25 was initially obtained to the extent that such law prohibits 


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1 an exclusion of a specific disease from such coverage, or 

2 (3) any law described in section 701(d) of the American 

3 Health Care Reform Act of 2015. 

4 ‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS 

5 FOR SOLVENCY FOR PLANS PROVIDING 

6 HEALTH BENEFITS IN ADDITION TO HEALTH 

7 INSURANCE COVERAGE. 

8 ‘‘(a) IN GENERAL.—The requirements of this section 

9 are met with respect to an association health plan if— 

10 ‘‘(1) the benefits under the plan consist solely 

11 of health insurance coverage; or 

12 ‘‘(2) if the plan provides any additional benefit 

13 options which do not consist of health insurance cov14 erage, the plan— 

15 ‘‘(A) establishes and maintains reserves 

16 with respect to such additional benefit options, 

17 in amounts recommended by the qualified actu18 ary, consisting of— 

19 ‘‘(i) a reserve sufficient for unearned 

20 contributions; 

21 ‘‘(ii) a reserve sufficient for benefit li22 abilities which have been incurred, which 

23 have not been satisfied, and for which risk 

24 of loss has not yet been transferred, and 


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1 for expected administrative costs with re2 spect to such benefit liabilities; 

3 ‘‘(iii) a reserve sufficient for any other 

4 obligations of the plan; and 

5 ‘‘(iv) a reserve sufficient for a margin 

6 of error and other fluctuations, taking into 

7 account the specific circumstances of the 

8 plan; and 

9 ‘‘(B) establishes and maintains aggregate 

10 and specific excess/stop loss insurance and sol11 vency indemnification, with respect to such ad12 ditional benefit options for which risk of loss 

13 has not yet been transferred, as follows: 

14 ‘‘(i) The plan shall secure aggregate 

15 excess/stop loss insurance for the plan with 

16 an attachment point which is not greater 

17 than 125 percent of expected gross annual 

18 claims. The applicable authority may by 

19 regulation provide for upward adjustments 

20 in the amount of such percentage in speci21 fied circumstances in which the plan spe22 cifically provides for and maintains re23 serves in excess of the amounts required 

24 under subparagraph (A). 


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1 ‘‘(ii) The plan shall secure specific ex2 cess/stop loss insurance for the plan with 

3 an attachment point which is at least equal 

4 to an amount recommended by the plan’s 

5 qualified actuary. The applicable authority 

6 may by regulation provide for adjustments 

7 in the amount of such insurance in speci8 fied circumstances in which the plan spe9 cifically provides for and maintains re10 serves in excess of the amounts required 

11 under subparagraph (A). 

12 ‘‘(iii) The plan shall secure indem13 nification insurance for any claims which 

14 the plan is unable to satisfy by reason of 

15 a plan termination. 

16 Any person issuing to a plan insurance described in clause 

17 (i), (ii), or (iii) of subparagraph (B) shall notify the Sec18 retary of any failure of premium payment meriting can19 cellation of the policy prior to undertaking such a cancella20 tion. Any regulations prescribed by the applicable author21 ity pursuant to clause (i) or (ii) of subparagraph (B) may 

22 allow for such adjustments in the required levels of excess/ 

23 stop loss insurance as the qualified actuary may rec24 ommend, taking into account the specific circumstances 

25 of the plan. 


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1 ‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS

2 RESERVES.—In the case of any association health plan de3 scribed in subsection (a)(2), the requirements of this sub4 section are met if the plan establishes and maintains sur5 plus in an amount at least equal to— 

6 ‘‘(1) $500,000, or 

7 ‘‘(2) such greater amount (but not greater than 

8 $2,000,000) as may be set forth in regulations pre9 scribed by the applicable authority, considering the 

10 level of aggregate and specific excess/stop loss insur11 ance provided with respect to such plan and other 

12 factors related to solvency risk, such as the plan’s 

13 projected levels of participation or claims, the nature 

14 of the plan’s liabilities, and the types of assets avail15 able to assure that such liabilities are met. 

16 ‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of 

17 any association health plan described in subsection (a)(2), 

18 the applicable authority may provide such additional re19 quirements relating to reserves, excess/stop loss insurance, 

20 and indemnification insurance as the applicable authority 

21 considers appropriate. Such requirements may be provided 

22 by regulation with respect to any such plan or any class 

23 of such plans. 

24 ‘‘(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSUR25 ANCE.—The applicable authority may provide for adjustVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00120 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 ments to the levels of reserves otherwise required under 

2 subsections (a) and (b) with respect to any plan or class 

3 of plans to take into account excess/stop loss insurance 

4 provided with respect to such plan or plans. 

5 ‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The 

6 applicable authority may permit an association health plan 

7 described in subsection (a)(2) to substitute, for all or part 

8 of the requirements of this section (except subsection 

9 (a)(2)(B)(iii)), such security, guarantee, hold-harmless ar10 rangement, or other financial arrangement as the applica11 ble authority determines to be adequate to enable the plan 

12 to fully meet all its financial obligations on a timely basis 

13 and is otherwise no less protective of the interests of par14 ticipants and beneficiaries than the requirements for 

15 which it is substituted. The applicable authority may take 

16 into account, for purposes of this subsection, evidence pro17 vided by the plan or sponsor which demonstrates an as18 sumption of liability with respect to the plan. Such evi19 dence may be in the form of a contract of indemnification, 

20 lien, bonding, insurance, letter of credit, recourse under 

21 applicable terms of the plan in the form of assessments 

22 of participating employers, security, or other financial ar23 rangement. 

24 ‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT

25 OF BENEFITS BY CERTAIN PLANS IN DISTRESS.— 


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1 ‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSO2 CIATION HEALTH PLAN FUND.— 

3 ‘‘(A) IN GENERAL.—In the case of an as4 sociation health plan described in subsection 

5 (a)(2), the requirements of this subsection are 

6 met if the plan makes payments into the Asso7 ciation Health Plan Fund under this subpara8 graph when they are due. Such payments shall 

9 consist of annual payments in the amount of 

10 $5,000, and, in addition to such annual pay11 ments, such supplemental payments as the Sec12 retary may determine to be necessary under 

13 paragraph (2). Payments under this paragraph 

14 are payable to the Fund at the time determined 

15 by the Secretary. Initial payments are due in 

16 advance of certification under this part. Pay17 ments shall continue to accrue until a plan’s as18 sets are distributed pursuant to a termination 

19 procedure. 

20 ‘‘(B) PENALTIES FOR FAILURE TO MAKE

21 PAYMENTS.—If any payment is not made by a 

22 plan when it is due, a late payment charge of 

23 not more than 100 percent of the payment 

24 which was not timely paid shall be payable by 

25 the plan to the Fund. 


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1 ‘‘(C) CONTINUED DUTY OF THE SEC2 RETARY.—The Secretary shall not cease to 

3 carry out the provisions of paragraph (2) on ac4 count of the failure of a plan to pay any pay5 ment when due. 

6 ‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE

7 EXCESS/STOP LOSS INSURANCE COVERAGE AND IN8 DEMNIFICATION INSURANCE COVERAGE FOR CER9 TAIN PLANS.—In any case in which the applicable 

10 authority determines that there is, or that there is 

11 reason to believe that there will be: (A) a failure to 

12 take necessary corrective actions under section 

13 809(a) with respect to an association health plan de14 scribed in subsection (a)(2); or (B) a termination of 

15 such a plan under section 809(b) or 810(b)(8) (and, 

16 if the applicable authority is not the Secretary, cer17 tifies such determination to the Secretary), the Sec18 retary shall determine the amounts necessary to 

19 make payments to an insurer (designated by the 

20 Secretary) to maintain in force excess/stop loss in21 surance coverage or indemnification insurance cov22 erage for such plan, if the Secretary determines that 

23 there is a reasonable expectation that, without such 

24 payments, claims would not be satisfied by reason of 

25 termination of such coverage. The Secretary shall, to 


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1 the extent provided in advance in appropriation 

2 Acts, pay such amounts so determined to the insurer 

3 designated by the Secretary. 

4 ‘‘(3) ASSOCIATION HEALTH PLAN FUND.— 

5 ‘‘(A) IN GENERAL.—There is established 

6 on the books of the Treasury a fund to be 

7 known as the ‘Association Health Plan Fund’. 

8 The Fund shall be available for making pay9 ments pursuant to paragraph (2). The Fund 

10 shall be credited with payments received pursu11 ant to paragraph (1)(A), penalties received pur12 suant to paragraph (1)(B); and earnings on in13 vestments of amounts of the Fund under sub14 paragraph (B). 

15 ‘‘(B) INVESTMENT.—Whenever the Sec16 retary determines that the moneys of the fund 

17 are in excess of current needs, the Secretary 

18 may request the investment of such amounts as 

19 the Secretary determines advisable by the Sec20 retary of the Treasury in obligations issued or 

21 guaranteed by the United States. 

22 ‘‘(g) EXCESS/STOP LOSS INSURANCE.—For purposes 

23 of this section— 

24 ‘‘(1) AGGREGATE EXCESS/STOP LOSS INSUR25 ANCE.—The term ‘aggregate excess/stop loss insurVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 ance’ means, in connection with an association 

2 health plan, a contract— 

3 ‘‘(A) under which an insurer (meeting such 

4 minimum standards as the applicable authority 

5 may prescribe by regulation) provides for pay6 ment to the plan with respect to aggregate 

7 claims under the plan in excess of an amount 

8 or amounts specified in such contract; 

9 ‘‘(B) which is guaranteed renewable; and 

10 ‘‘(C) which allows for payment of pre11 miums by any third party on behalf of the in12 sured plan. 

13 ‘‘(2) SPECIFIC EXCESS/STOP LOSS INSUR14 ANCE.—The term ‘specific excess/stop loss insur15 ance’ means, in connection with an association 

16 health plan, a contract— 

17 ‘‘(A) under which an insurer (meeting such 

18 minimum standards as the applicable authority 

19 may prescribe by regulation) provides for pay20 ment to the plan with respect to claims under 

21 the plan in connection with a covered individual 

22 in excess of an amount or amounts specified in 

23 such contract in connection with such covered 

24 individual; 

25 ‘‘(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 this part, the applicable au4 thority shall establish a Solvency Standards Working 

5 Group. In prescribing the initial regulations under 

6 this section, the applicable authority shall take into 

7 account the recommendations of such Working 

8 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 Asso16 ciation 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 the 

24 type referred to in section 801(b)(1), or their 

25 interests; and 


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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 actuary, that all applicable require7 ments of section 806 are or will be met in ac8 cordance with regulations which the applicable 

9 authority shall prescribe. 

10 ‘‘(B) ADEQUACY OF CONTRIBUTION

11 RATES.—A statement of actuarial opinion, 

12 signed by a qualified actuary, which sets forth 

13 a description of the extent to which contribution 

14 rates are adequate to provide for the payment 

15 of all obligations and the maintenance of re16 quired 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 actuary, 

2 which sets forth the current value of the assets 

3 and liabilities accumulated under the plan and 

4 a projection of the assets, liabilities, income, 

5 and expenses of the plan for the 12-month pe6 riod referred to in subparagraph (B). The in7 come statement shall identify separately the 

8 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 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00132 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 plicable authority may require by regulation such interim 

2 reports as it considers appropriate. 

3 ‘‘(f) ENGAGEMENT OF QUALIFIED ACTUARY.—The 

4 board of trustees of each association health plan which 

5 provides benefits options in addition to health insurance 

6 coverage and which is applying for certification under this 

7 part or is certified under this part shall engage, on behalf 

8 of all participants and beneficiaries, a qualified actuary 

9 who shall be responsible for the preparation of the mate10 rials comprising information necessary to be submitted by 

11 a qualified actuary under this part. The qualified actuary 

12 shall utilize such assumptions and techniques as are nec13 essary to enable such actuary to form an opinion as to 

14 whether the contents of the matters reported under this 

15 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 actuary shall be made with 

22 respect to, and shall be made a part of, the annual 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 actuary engaged by the plan, and such actuary 

11 shall, not later than the end of the next following month, 

12 make such recommendations to the board for corrective 

13 action as the actuary determines necessary to ensure com14 pliance with section 806. Not later than 30 days after re15 ceiving from the actuary recommendations for corrective 

16 actions, the board shall notify the applicable authority (in 

17 such form and manner as the applicable authority may 

18 prescribe by regulation) of such recommendations of the 

19 actuary for corrective action, together with a description 

20 of the actions (if any) that the board has taken or plans 

21 to take in response to such recommendations. The board 

22 shall thereafter report to the applicable authority, in such 

23 form and frequency as the applicable authority may speci24 fy to the board, regarding corrective action taken by the 

25 board until the requirements of section 806 are met. 


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1 ‘‘(b) MANDATORY TERMINATION.—In any case in 

2 which— 

3 ‘‘(1) the applicable authority has been notified 

4 under subsection (a) (or by an issuer of excess/stop 

5 loss insurance or indemnity insurance pursuant to 

6 section 806(a)) of a failure of an association health 

7 plan which is or has been certified under this part 

8 and is described in section 806(a)(2) to meet the re9 quirements of section 806 and has not been notified 

10 by the board of trustees of the plan that corrective 

11 action has restored compliance with such require12 ments; and 

13 ‘‘(2) the applicable authority determines that 

14 there is a reasonable expectation that the plan will 

15 continue to fail to meet the requirements of section 

16 806, 

17 the board of trustees of the plan shall, at the direction 

18 of the applicable authority, terminate the plan and, in the 

19 course of the termination, take such actions as the appli20 cable authority may require, including satisfying any 

21 claims referred to in section 806(a)(2)(B)(iii) and recov22 ering for the plan any liability under subsection 

23 (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 

24 that the affairs of the plan will be, to the maximum extent 


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1 possible, wound up in a manner which will result in timely 

2 provision of all benefits for which the plan is obligated. 

3 ‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL4 VENT ASSOCIATION HEALTH PLANS PRO5 VIDING HEALTH BENEFITS IN ADDITION TO 

6 HEALTH INSURANCE COVERAGE. 

7 ‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR

8 INSOLVENT PLANS.—Whenever the Secretary determines 

9 that an association health plan which is or has been cer10 tified under this part and which is described in section 

11 806(a)(2) will be unable to provide benefits when due or 

12 is otherwise in a financially hazardous condition, as shall 

13 be defined by the Secretary by regulation, the Secretary 

14 shall, upon notice to the plan, apply to the appropriate 

15 United States district court for appointment of the Sec16 retary as trustee to administer the plan for the duration 

17 of the insolvency. The plan may appear as a party and 

18 other interested persons may intervene in the proceedings 

19 at the discretion of the court. The court shall appoint such 

20 Secretary trustee if the court determines that the trustee21 ship is necessary to protect the interests of the partici22 pants and beneficiaries or providers of medical care or to 

23 avoid any unreasonable deterioration of the financial con24 dition of the plan. The trusteeship of such Secretary shall 

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1 tence of this subsection are remedied or the plan is termi2 nated. 

3 ‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon 

4 appointment as trustee under subsection (a), shall have 

5 the power— 

6 ‘‘(1) to do any act authorized by the plan, this 

7 title, or other applicable provisions of law to be done 

8 by the plan administrator or any trustee of the plan; 

9 ‘‘(2) to require the transfer of all (or any part) 

10 of the assets and records of the plan to the Sec11 retary as trustee; 

12 ‘‘(3) to invest any assets of the plan which the 

13 Secretary holds in accordance with the provisions of 

14 the plan, regulations prescribed by the Secretary, 

15 and applicable provisions of law; 

16 ‘‘(4) to require the sponsor, the plan adminis17 trator, any participating employer, and any employee 

18 organization representing plan participants to fur19 nish any information with respect to the plan which 

20 the Secretary as trustee may reasonably need in 

21 order to administer the plan; 

22 ‘‘(5) to collect for the plan any amounts due the 

23 plan and to recover reasonable expenses of the trust24 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 this part. 

13 ‘‘(b) CONTRIBUTION TAX.—For purposes of this sec14 tion, the term ‘contribution tax’ imposed by a State on 

15 an association health plan means any tax imposed by such 

16 State if— 

17 ‘‘(1) such tax is computed by applying a rate to 

18 the amount of premiums or contributions, with re19 spect to individuals covered under the plan who are 

20 residents of such State, which are received by the 

21 plan from participating employers located in such 

22 State or from such individuals; 

23 ‘‘(2) the rate of such tax does not exceed the 

24 rate of any tax imposed by such State on premiums 

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1 tenance organizations for health insurance coverage 

2 offered in such State in connection with a group 

3 health plan; 

4 ‘‘(3) such tax is otherwise nondiscriminatory; 

5 and 

6 ‘‘(4) the amount of any such tax assessed on 

7 the plan is reduced by the amount of any tax or as8 sessment otherwise imposed by the State on pre9 miums, contributions, or both received by insurers or 

10 health maintenance organizations for health insur11 ance coverage, aggregate excess/stop loss insurance 

12 (as defined in section 806(g)(1)), specific excess/stop 

13 loss insurance (as defined in section 806(g)(2)), 

14 other insurance related to the provision of medical 

15 care under the plan, or any combination thereof pro16 vided by such insurers or health maintenance organi17 zations in such State in connection with such plan. 

18 ‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION. 

19 ‘‘(a) DEFINITIONS.—For purposes of this part— 

20 ‘‘(1) GROUP HEALTH PLAN.—The term ‘group 

21 health plan’ has the meaning provided in section 

22 733(a)(1) (after applying subsection (b) of this sec23 tion). 

24 ‘‘(2) MEDICAL CARE.—The term ‘medical care’ 

25 has the meaning provided in section 733(a)(2). 


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1 ‘‘(3) HEALTH INSURANCE COVERAGE.—The 

2 term ‘health insurance coverage’ has the meaning 

3 provided in section 733(b)(1). 

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

5 ‘health insurance issuer’ has the meaning provided 

6 in section 733(b)(2). 

7 ‘‘(5) APPLICABLE AUTHORITY.—The term ‘ap8 plicable authority’ means the Secretary, except that, 

9 in connection with any exercise of the Secretary’s 

10 authority regarding which the Secretary is required 

11 under section 506(d) to consult with a State, such 

12 term means the Secretary, in consultation with such 

13 State. 

14 ‘‘(6) HEALTH STATUS-RELATED FACTOR.—The 

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

16 provided in section 733(d)(2). 

17 ‘‘(7) INDIVIDUAL MARKET.— 

18 ‘‘(A) IN GENERAL.—The term ‘individual 

19 market’ means the market for health insurance 

20 coverage offered to individuals other than in 

21 connection with a group health plan. 

22 ‘‘(B) TREATMENT OF VERY SMALL

23 GROUPS.— 

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

25 (ii), such term includes coverage offered in 


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1 connection with a group health plan that 

2 has fewer than 2 participants as current 

3 employees or participants described in sec4 tion 732(d)(3) on the first day of the plan 

5 year. 

6 ‘‘(ii) STATE EXCEPTION.—Clause (i) 

7 shall not apply in the case of health insur8 ance coverage offered in a State if such 

9 State regulates the coverage described in 

10 such clause in the same manner and to the 

11 same extent as coverage in the small group 

12 market (as defined in section 2791(e)(5) of 

13 the Public Health Service Act) is regulated 

14 by such State. 

15 ‘‘(8) PARTICIPATING EMPLOYER.—The term 

16 ‘participating employer’ means, in connection with 

17 an association health plan, any employer, if any indi18 vidual who is an employee of such employer, a part19 ner in such employer, or a self-employed individual 

20 who is such employer (or any dependent, as defined 

21 under the terms of the plan, of such individual) is 

22 or was covered under such plan in connection with 

23 the status of such individual as such an employee, 

24 partner, or self-employed individual in relation to the 

25 plan. 


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1 ‘‘(9) 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 title XXVII of the Public Health Service Act for the 

7 State involved with respect to such issuer. 

8 ‘‘(10) QUALIFIED ACTUARY.—The term ‘quali9 fied actuary’ means an individual who is a member 

10 of the American Academy of Actuaries. 

11 ‘‘(11) AFFILIATED MEMBER.—The term ‘affili12 ated member’ means, in connection with a sponsor— 

13 ‘‘(A) a person who is otherwise eligible to 

14 be a member of the sponsor but who elects an 

15 affiliated status with the sponsor, 

16 ‘‘(B) in the case of a sponsor with mem17 bers which consist of associations, a person who 

18 is a member of any such association and elects 

19 an affiliated status with the sponsor, or 

20 ‘‘(C) in the case of an association health 

21 plan in existence on the date of the enactment 

22 of this part, a person eligible to be a member 

23 of the sponsor or one of its member associa24 tions. 


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1 ‘‘(12) LARGE EMPLOYER.—The term ‘large em2 ployer’ means, in connection with a group health 

3 plan with respect to a plan year, an employer who 

4 employed an average of at least 51 employees on 

5 business days during the preceding calendar year 

6 and who employs at least 2 employees on the first 

7 day of the plan year. 

8 ‘‘(13) SMALL EMPLOYER.—The term ‘small em9 ployer’ means, in connection with a group health 

10 plan with respect to a plan year, an employer who 

11 is not a large employer. 

12 ‘‘(b) RULES OF CONSTRUCTION.— 

13 ‘‘(1) EMPLOYERS AND EMPLOYEES.—For pur14 poses of determining whether a plan, fund, or pro15 gram is an employee welfare benefit plan which is an 

16 association health plan, and for purposes of applying 

17 this title in connection with such plan, fund, or pro18 gram so determined to be such an employee welfare 

19 benefit plan— 

20 ‘‘(A) in the case of a partnership, the term 

21 ‘employer’ (as defined in section 3(5)) includes 

22 the partnership in relation to the partners, and 

23 the term ‘employee’ (as defined in section 3(6)) 

24 includes any partner in relation to the partner25 ship; and 


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1 ‘‘(B) in the case of a self-employed indi2 vidual, the term ‘employer’ (as defined in sec3 tion 3(5)) and the term ‘employee’ (as defined 

4 in section 3(6)) shall include such individual. 

5 ‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED

6 AS EMPLOYEE WELFARE BENEFIT PLANS.—In the 

7 case of any plan, fund, or program which was estab8 lished or is maintained for the purpose of providing 

9 medical care (through the purchase of insurance or 

10 otherwise) for employees (or their dependents) cov11 ered thereunder and which demonstrates to the Sec12 retary that all requirements for certification under 

13 this part would be met with respect to such plan, 

14 fund, or program if such plan, fund, or program 

15 were a group health plan, such plan, fund, or pro16 gram shall be treated for purposes of this title as an 

17 employee welfare benefit plan on and after the date 

18 of such demonstration.’’. 

19 (b) CONFORMING AMENDMENTS TO PREEMPTION

20 RULES.— 

21 (1) Section 514(b)(6) of such Act (29 U.S.C. 

22 1144(b)(6)) is amended by adding at the end the 

23 following new subparagraph: 

24 ‘‘(E) The preceding subparagraphs of this paragraph 

25 do not apply with respect to any State law in the case 


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1 of an association health plan which is certified under part 

2 8.’’. 

3 (2) Section 514 of such Act (29 U.S.C. 1144) 

4 is amended— 

5 (A) in subsection (b)(4), by striking ‘‘Sub6 section (a)’’ and inserting ‘‘Subsections (a) and 

7 (f)’’; 

8 (B) in subsection (b)(5), by striking ‘‘sub9 section (a)’’ in subparagraph (A) and inserting 

10 ‘‘subsection (a) of this section and subsections 

11 (a)(2)(B) and (b) of section 805’’, and by strik12 ing ‘‘subsection (a)’’ in subparagraph (B) and 

13 inserting ‘‘subsection (a) of this section or sub14 section (a)(2)(B) or (b) of section 805’’; and 

15 (C) by adding at the end the following new 

16 subsection: 

17 ‘‘(f)(1) Except as provided in subsection (b)(4), the 

18 provisions of this title shall supersede any and all State 

19 laws insofar as they may now or hereafter preclude, or 

20 have the effect of precluding, a health insurance issuer 

21 from offering health insurance coverage in connection with 

22 an association health plan which is certified under part 

23 8. 

24 ‘‘(2) Except as provided in paragraphs (4) and (5) 

25 of subsection (b) of this section— 


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1 ‘‘(A) In any case in which health insurance cov2 erage of any policy type is offered under an associa3 tion health plan certified under part 8 to a partici4 pating employer operating in such State, the provi5 sions of this title shall supersede any and all laws 

6 of such State insofar as they may preclude a health 

7 insurance issuer from offering health insurance cov8 erage of the same policy type to other employers op9 erating in the State which are eligible for coverage 

10 under such association health plan, whether or not 

11 such other employers are participating employers in 

12 such plan. 

13 ‘‘(B) In any case in which health insurance cov14 erage of any policy type is offered in a State under 

15 an association health plan certified under part 8 and 

16 the filing, with the applicable State authority (as de17 fined in section 812(a)(9)), of the policy form in 

18 connection with such policy type is approved by such 

19 State authority, the provisions of this title shall su20 persede any and all laws of any other State in which 

21 health insurance coverage of such type is offered, in22 sofar as they may preclude, upon the filing in the 

23 same form and manner of such policy form with the 

24 applicable State authority in such other State, the 

25 approval of the filing in such other State. 


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1 ‘‘(3) Nothing in subsection (b)(6)(E) or the preceding 

2 provisions of this subsection shall be construed, with re3 spect to health insurance issuers or health insurance cov4 erage, to supersede or impair the law of any State— 

5 ‘‘(A) providing solvency standards or similar 

6 standards regarding the adequacy of insurer capital, 

7 surplus, reserves, or contributions, or 

8 ‘‘(B) relating to prompt payment of claims. 

9 ‘‘(4) For additional provisions relating to association 

10 health plans, see subsections (a)(2)(B) and (b) of section 

11 805. 

12 ‘‘(5) For purposes of this subsection, the term ‘asso13 ciation health plan’ has the meaning provided in section 

14 801(a), and the terms ‘health insurance coverage’, ‘par15 ticipating employer’, and ‘health insurance issuer’ have 

16 the meanings provided such terms in section 812, respec17 tively.’’. 

18 (3) Section 514(b)(6)(A) of such Act (29 

19 U.S.C. 1144(b)(6)(A)) is amended— 

20 (A) in clause (i)(II), by striking ‘‘and’’ at 

21 the end; 

22 (B) in clause (ii), by inserting ‘‘and which 

23 does not provide medical care (within the mean24 ing of section 733(a)(2)),’’ after ‘‘arrangeVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 ment,’’, and by striking ‘‘title.’’ and inserting 

2 ‘‘title, and’’; and 

3 (C) by adding at the end the following new 

4 clause: 

5 ‘‘(iii) subject to subparagraph (E), in the case 

6 of any other employee welfare benefit plan which is 

7 a multiple employer welfare arrangement and which 

8 provides medical care (within the meaning of section 

9 733(a)(2)), any law of any State which regulates in10 surance may apply.’’. 

11 (4) Section 514(d) of such Act (29 U.S.C. 

12 1144(d)) is amended— 

13 (A) by striking ‘‘Nothing’’ and inserting 

14 ‘‘(1) Except as provided in paragraph (2), noth15 ing’’; and 

16 (B) by adding at the end the following new 

17 paragraph: 

18 ‘‘(2) Nothing in any other provision of law enacted 

19 on or after the date of the enactment of this paragraph 

20 shall be construed to alter, amend, modify, invalidate, im21 pair, or supersede any provision of this title, except by 

22 specific cross-reference to the affected section.’’. 

23 (c) PLAN SPONSOR.—Section 3(16)(B) of such Act 

24 (29 U.S.C. 102(16)(B)) is amended by adding at the end 

25 the following new sentence: ‘‘Such term also includes a 


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1 person serving as the sponsor of an association health plan 

2 under part 8.’’. 

3 (d) DISCLOSURE OF SOLVENCY PROTECTIONS RE4 LATED TO SELF-INSURED AND FULLY INSURED OPTIONS

5 UNDER ASSOCIATION HEALTH PLANS.—Section 102(b) 

6 of such Act (29 U.S.C. 102(b)) is amended by adding at 

7 the end the following: ‘‘An association health plan shall 

8 include in its summary plan description, in connection 

9 with each benefit option, a description of the form of sol10 vency or guarantee fund protection secured pursuant to 

11 this Act or applicable State law, if any.’’. 

12 (e) SAVINGS CLAUSE.—Section 731(c) of such Act is 

13 amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 

14 (f) REPORT TO THE CONGRESS REGARDING CERTIFI15 CATION OF SELF-INSURED ASSOCIATION HEALTH

16 PLANS.—Not later than January 1, 2014, the Secretary 

17 of Labor shall report to the Committee on Education and 

18 the Workforce of the House of Representatives and the 

19 Committee on Health, Education, Labor, and Pensions of 

20 the Senate the effect association health plans have had, 

21 if any, on reducing the number of uninsured individuals. 

22 (g) CLERICAL AMENDMENT.—The table of contents 

23 in section 1 of the Employee Retirement Income Security 

24 Act of 1974 is amended by inserting after the item relat25 ing to section 734 the following new items: 

‘‘PART 8—RULES GOVERNING ASSOCIATION HEALTH PLANS


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‘‘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.’’. 

1 SEC. 452. CLARIFICATION OF TREATMENT OF SINGLE EM2 PLOYER ARRANGEMENTS. 

3 Section 3(40)(B) of the Employee Retirement Income 

4 Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amend5 ed— 

6 (1) in clause (i), by inserting after ‘‘control 

7 group,’’ the following: ‘‘except that, in any case in 

8 which the benefit referred to in subparagraph (A) 

9 consists of medical care (as defined in section 

10 812(a)(2)), two or more trades or businesses, wheth11 er or not incorporated, shall be deemed a single em12 ployer for any plan year of such plan, or any fiscal 

13 year of such other arrangement, if such trades or 

14 businesses are within the same control group during 

15 such year or at any time during the preceding 1-year 

16 period,’’; 

17 (2) in clause (iii), by striking ‘‘(iii) the deter18 mination’’ and inserting the following: 


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1 ‘‘(iii)(I) in any case in which the benefit re2 ferred to in subparagraph (A) consists of medical 

3 care (as defined in section 812(a)(2)), the deter4 mination of whether a trade or business is under 

5 ‘common control’ with another trade or business 

6 shall be determined under regulations of the Sec7 retary applying principles consistent and coextensive 

8 with the principles applied in determining whether 

9 employees of two or more trades or businesses are 

10 treated as employed by a single employer under sec11 tion 4001(b), except that, for purposes of this para12 graph, an interest of greater than 25 percent may 

13 not be required as the minimum interest necessary 

14 for common control, or 

15 ‘‘(II) in any other case, the determination’’; 

16 (3) by redesignating clauses (iv) and (v) as 

17 clauses (v) and (vi), respectively; and 

18 (4) by inserting after clause (iii) the following 

19 new clause: 

20 ‘‘(iv) in any case in which the benefit referred 

21 to in subparagraph (A) consists of medical care (as 

22 defined in section 812(a)(2)), in determining, after 

23 the application of clause (i), whether benefits are 

24 provided to employees of two or more employers, the 

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1 ticipating employer if, after the application of clause 

2 (i), the number of individuals who are employees and 

3 former employees of any one participating employer 

4 and who are covered under the arrangement is 

5 greater than 75 percent of the aggregate number of 

6 all individuals who are employees or former employ7 ees of participating employers and who are covered 

8 under the arrangement,’’. 

9 SEC. 453. ENFORCEMENT PROVISIONS RELATING TO ASSO10 CIATION HEALTH PLANS. 

11 (a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL

12 MISREPRESENTATIONS.—Section 501 of the Employee 

13 Retirement Income Security Act of 1974 (29 U.S.C. 1131) 

14 is amended by adding at the end the following new sub15 section: 

16 ‘‘(c) Any person who willfully falsely represents, to 

17 any employee, any employee’s beneficiary, any employer, 

18 the Secretary, or any State, a plan or other arrangement 

19 established or maintained for the purpose of offering or 

20 providing any benefit described in section 3(1) to employ21 ees or their beneficiaries as— 

22 ‘‘(1) being an association health plan which has 

23 been certified under part 8; 

24 ‘‘(2) having been established or maintained 

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1 gaining agreements which are reached pursuant to 

2 collective bargaining described in section 8(d) of the 

3 National Labor Relations Act (29 U.S.C. 158(d)) or 

4 paragraph Fourth of section 2 of the Railway Labor 

5 Act (45 U.S.C. 152, paragraph Fourth) or which are 

6 reached pursuant to labor-management negotiations 

7 under similar provisions of State public employee re8 lations laws; or 

9 ‘‘(3) being a plan or arrangement described in 

10 section 3(40)(A)(i), 

11 shall, upon conviction, be imprisoned not more than 5 

12 years, be fined under title 18, United States Code, or 

13 both.’’. 

14 (b) CEASE ACTIVITIES ORDERS.—Section 502 of 

15 such Act (29 U.S.C. 1132) is amended by adding at the 

16 end the following new subsection: 

17 ‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DE18 SIST ORDERS.— 

19 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

20 upon application by the Secretary showing the oper21 ation, promotion, or marketing of an association 

22 health plan (or similar arrangement providing bene23 fits consisting of medical care (as defined in section 

24 733(a)(2))) that— 


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1 ‘‘(A) is not certified under part 8, is sub2 ject under section 514(b)(6) to the insurance 

3 laws of any State in which the plan or arrange4 ment offers or provides benefits, and is not li5 censed, registered, or otherwise approved under 

6 the insurance laws of such State; or 

7 ‘‘(B) is an association health plan certified 

8 under part 8 and is not operating in accordance 

9 with the requirements under part 8 for such 

10 certification, 

11 a district court of the United States shall enter an 

12 order requiring that the plan or arrangement cease 

13 activities. 

14 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

15 apply in the case of an association health plan or 

16 other arrangement if the plan or arrangement shows 

17 that— 

18 ‘‘(A) all benefits under it referred to in 

19 paragraph (1) consist of health insurance cov20 erage; and 

21 ‘‘(B) with respect to each State in which 

22 the plan or arrangement offers or provides ben23 efits, the plan or arrangement is operating in 

24 accordance with applicable State laws that are 

25 not superseded under section 514. 


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1 ‘‘(3) ADDITIONAL EQUITABLE RELIEF.—The 

2 court may grant such additional equitable relief, in3 cluding any relief available under this title, as it 

4 deems necessary to protect the interests of the pub5 lic and of persons having claims for benefits against 

6 the plan.’’. 

7 (c) RESPONSIBILITY FOR CLAIMS PROCEDURE.— 

8 Section 503 of such Act (29 U.S.C. 1133) is amended by 

9 inserting ‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’, 

10 and by adding at the end the following new subsection: 

11 ‘‘(b) ASSOCIATION HEALTH PLANS.—The terms of 

12 each association health plan which is or has been certified 

13 under part 8 shall require the board of trustees or the 

14 named fiduciary (as applicable) to ensure that the require15 ments of this section are met in connection with claims 

16 filed under the plan.’’. 

17 SEC. 454. COOPERATION BETWEEN FEDERAL AND STATE 

18 AUTHORITIES. 

19 Section 506 of the Employee Retirement Income Se20 curity Act of 1974 (29 U.S.C. 1136) is amended by adding 

21 at the end the following new subsection: 

22 ‘‘(d) CONSULTATION WITH STATES WITH RESPECT

23 TO ASSOCIATION HEALTH PLANS.— 

24 ‘‘(1) AGREEMENTS WITH STATES.—The Sec25 retary shall consult with the State recognized under 


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1 paragraph (2) with respect to an association health 

2 plan regarding the exercise of— 

3 ‘‘(A) the Secretary’s authority under sec4 tions 502 and 504 to enforce the requirements 

5 for certification under part 8; and 

6 ‘‘(B) the Secretary’s authority to certify 

7 association health plans under part 8 in accord8 ance with regulations of the Secretary applica9 ble to certification under part 8. 

10 ‘‘(2) RECOGNITION OF PRIMARY DOMICILE

11 STATE.—In carrying out paragraph (1), the Sec12 retary shall ensure that only one State will be recog13 nized, with respect to any particular association 

14 health plan, as the State with which consultation is 

15 required. In carrying out this paragraph— 

16 ‘‘(A) in the case of a plan which provides 

17 health insurance coverage (as defined in section 

18 812(a)(3)), such State shall be the State with 

19 which filing and approval of a policy type of20 fered by the plan was initially obtained, and 

21 ‘‘(B) in any other case, the Secretary shall 

22 take into account the places of residence of the 

23 participants and beneficiaries under the plan 

24 and the State in which the trust is main25 tained.’’. 


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1 SEC. 455. EFFECTIVE DATE AND TRANSITIONAL AND 

2 OTHER RULES. 

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

4 this subtitle shall take effect 1 year after the date of the 

5 enactment of this Act. The Secretary of Labor shall first 

6 issue all regulations necessary to carry out the amend7 ments made by this subtitle within 1 year after the date 

8 of the enactment of this Act. 

9 (b) TREATMENT OF CERTAIN EXISTING HEALTH

10 BENEFITS PROGRAMS.— 

11 (1) IN GENERAL.—In any case in which, as of 

12 the date of the enactment of this Act, an arrange13 ment is maintained in a State for the purpose of 

14 providing benefits consisting of medical care for the 

15 employees and beneficiaries of its participating em16 ployers, at least 200 participating employers make 

17 contributions to such arrangement, such arrange18 ment has been in existence for at least 10 years, and 

19 such arrangement is licensed under the laws of one 

20 or more States to provide such benefits to its par21 ticipating employers, upon the filing with the appli22 cable authority (as defined in section 812(a)(5) of 

23 the Employee Retirement Income Security Act of 

24 1974 (as amended by this subtitle)) by the arrange25 ment of an application for certification of the arVerDate Sep 11 2014 20:34 Jun 08, 2015 Jkt 049200 PO 00000 Frm 00161 Fmt 6652 Sfmt 6201 E:\BILLS\H2653.IH H2653

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1 rangement under part 8 of subtitle B of title I of 

2 such Act— 

3 (A) such arrangement shall be deemed to 

4 be a group health plan for purposes of title I 

5 of such Act; 

6 (B) the requirements of sections 801(a) 

7 and 803(a) of the Employee Retirement Income 

8 Security Act of 1974 shall be deemed met with 

9 respect to such arrangement; 

10 (C) the requirements of section 803(b) of 

11 such Act shall be deemed met, if the arrange12 ment is operated by a board of directors 

13 which— 

14 (i) is elected by the participating em15 ployers, with each employer having one 

16 vote; and 

17 (ii) has complete fiscal control over 

18 the arrangement and which is responsible 

19 for all operations of the arrangement; 

20 (D) the requirements of section 804(a) of 

21 such Act shall be deemed met with respect to 

22 such arrangement; and 

23 (E) the arrangement may be certified by 

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1 erations in any State only if it operates in such 

2 State on the date of certification. 

3 The provisions of this subsection shall cease to apply 

4 with respect to any such arrangement at such time 

5 after the date of the enactment of this Act as the 

6 applicable requirements of this subsection are not 

7 met with respect to such arrangement. 

8 (2) DEFINITIONS.—For purposes of this sub9 section, the terms ‘‘group health plan’’, ‘‘medical 

10 care’’, and ‘‘participating employer’’ shall have the 

11 meanings provided in section 812 of the Employee 

12 Retirement Income Security Act of 1974, except 

13 that the reference in paragraph (7) of such section 

14 to an ‘‘association health plan’’ shall be deemed a 

15 reference to an arrangement referred to in this sub16 section. 

17 Subtitle G—Greater Choice for 

18 Veterans 

19 SEC. 461. REMOVING BARRIERS TO HEALTH CARE CHOICE 

20 FOR CATEGORY 1 VETERANS AND MEDAL OF 

21 HONOR RECIPIENTS. 

22 Section 101(b)(2) of the Veterans Access, Choice, 

23 and Accountability Act of 2014 (Public Law 113–146; 38 

24 U.S.C. 1701 note) is amended— 


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1 (1) in subparagraph (C)(ii), by striking the 

2 ‘‘or’’ at the end; 

3 (2) in subparagraph (D)(ii)(II), by striking the 

4 period at the end and inserting ‘‘; or’’; and 

5 (3) by adding at the end the following new sub6 paragraph: 

7 ‘‘(E) is a veteran described in section 

8 1705(a)(1) of title 38, United States Code or a 

9 veteran who was awarded the medal of honor 

10 under section 3741, 6241, or 8741 of title 10 

11 or section 491 of title 14.’’. 

12 TITLE V—REFORMING MEDICAL 

13 LIABILITY LAW 

14 SEC. 501. REQUIREMENTS FOR SELECTION OF CLINICAL 

15 PRACTICE GUIDELINES. 

16 (a) SELECTION.—Not later than 6 months after the 

17 date of enactment of this Act, eligible professional organi18 zations that have established, published, maintained, and 

19 updated on a regular basis, clinical practice guidelines, in20 cluding when applicable, appropriate use criteria, that in21 corporate best practices, may submit such guidelines to 

22 the Secretary. Not later than 6 months after the last day 

23 for submitting such guidelines, the Secretary shall select 

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1 lines on behalf of the Secretary. Not later than 6 months 

2 after designating each such eligible professional organiza3 tion, the Secretary shall enter into an agreement with each 

4 such eligible professional organization for maintenance, 

5 publication, and updating of such clinical practice guide6 lines. 

7 (b) MAINTENANCE.— 

8 (1) PERIODIC REVIEW.—Not later than 5 years 

9 the Secretary enters into an agreement with each el10 igible professional organization under subsection (a), 

11 and every 5 years thereafter, the Secretary shall re12 view the clinical practice guidelines of such organiza13 tion and shall, as necessary, enter into agreements 

14 with additional eligible professional organizations, as 

15 appropriate, in accordance with subsection (a). 

16 (2) UPDATE BY ELIGIBLE PROFESSIONAL ORGA17 NIZATION.—An eligible professional organization 

18 that collaborated in the establishment of a clinical 

19 practice guidelines may submit amendments to that 

20 clinical practice guideline at any time to the Sec21 retary for review by the Secretary. 

22 (3) NOTIFICATION REQUIRED FOR CERTAIN UP23 DATES.—An amendment under paragraph (2) may 

24 not add, materially change, or remove a guideline 

25 from a set of guidelines, unless notification of such 


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1 update is made available to applicable eligible profes2 sionals. 

3 SEC. 502. DEVELOPMENT. 

4 (a) GUIDELINE STANDARDS.—The Secretary shall 

5 ensure that, to the extent practicable, the development of 

6 clinical practice guidelines are guided by the Standards 

7 for Developing Trustworthy Clinical Practice Guidelines of 

8 the Institute of Medicine and— 

9 (1) are developed through a transparent process 

10 that minimizes conflicts of interest; 

11 (2) are developed by a knowledgeable, multi12 disciplinary panel of experts and representatives 

13 from key affected groups; 

14 (3) take into consideration important patient 

15 subgroups and patient preferences, as appropriate; 

16 (4) are based on a systematic review of the ex17 isting evidence; 

18 (5) provide a clear explanation of the relation19 ship between care options and health outcomes; 

20 (6) provide ratings of both the quality of evi21 dence and strength of recommendation; 

22 (7) are reconsidered and revised when new evi23 dence emerges; and 

24 (8) clearly identify any exceptions to the appli25 cation of the clinical practice guideline. 


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1 (b) REQUIRED DISCLOSURES FROM ELIGIBLE PRO2 FESSIONAL ORGANIZATIONS.—Any person who is affili3 ated with an eligible professional organization and who di4 rectly participated in the creation of a clinical practice 

5 guideline shall disclose any conflicts of interest pertaining 

6 to the development of the clinical practice guideline, in7 cluding any conflict of interest pertaining to any instru8 ment, medicine, drug, or any other substance, device, or 

9 means included in the clinical practice guideline. Disclo10 sures to the Secretary by eligible professional organiza11 tions shall be made promptly, upon submission of the 

12 guidelines, and during every review of the guidelines. Dis13 closures shall include the following: 

14 (1) Scientific methodology and evidence that 

15 supports clinical practice guidelines. 

16 (2) Outside collaborators. 

17 (3) Endorsements. 

18 SEC. 503. NO LIABILITY FOR GUIDELINE PRODUCERS. 

19 Neither an eligible professional organization nor the 

20 participants in its guideline development and approval 

21 process, may be held liable for any injury alleged to be 

22 caused by adhering to a clinical practice guideline to which 

23 they contributed. 


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1 SEC. 504. INTERNET PUBLICATION OF GUIDELINES. 

2 The Secretary shall publish on the Internet through 

3 the National Guideline Clearinghouse or other appropriate 

4 sites or sources, all clinical practice guidelines, including 

5 all data and methodology used in the development and se6 lection of the guidelines in compliance with data disclosure 

7 standards in the Health Insurance Portability and Ac8 countability Act of 1996 (Public Law 104–191). 

9 SEC. 505. STATE FLEXIBILITY AND PROTECTION OF 

10 STATES’ RIGHTS. 

11 (a) LIMITATION.—This Act shall not preempt or su12 persede any State or Federal law that— 

13 (1) imposes procedural or substantive protec14 tions for health care providers and health care orga15 nizations from liability, loss, or damages greater 

16 than such protections provided by this title; or 

17 (2) creates a cause of action related to the pro18 vision of health care goods or services. 

19 (b) STATE FLEXIBILITY.—No provision of this Act 

20 shall be construed to preempt any defense available to a 

21 party in a health care liability action under any other pro22 vision of State or Federal law. 

23 SEC. 506. FEDERAL CAUSE OF ACTION. 

24 (a) IN GENERAL.—Chapter 85 of title 28, United 

25 States Code, is amended by adding at the end the fol26 lowing: 


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1 ‘‘§ 1370. Health care liability claims 

2 ‘‘(a) DEFINITIONS.—In this section, the terms ‘appli3 cable eligible professional’, ‘health care goods or services’, 

4 ‘health care liability action’, ‘health care liability claim’, 

5 ‘health care organization’, and ‘health care provider’ have 

6 the meaning given such terms in section 10 of the Saving 

7 Lives, Saving Costs Act. 

8 ‘‘(b) JURISDICTION OF CLAIMS.—The district courts 

9 shall have original jurisdiction of a health care liability ac10 tion against an applicable eligible professional, health care 

11 provider, or health care organization. 

12 ‘‘(c) SUBSTANTIVE LAW.—The substantive law for 

13 decision in a health care liability action brought under 

14 subsection (b) shall be derived from the law, including 

15 choice of law principles, of the State in which the provision 

16 of, use of, or payment for (or the failure to provide, use, 

17 or pay for) health care goods or services giving rise to 

18 the health care liability claim occurred unless such law is 

19 inconsistent with or preempted by Federal law.’’. 

20 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

21 The table of sections for chapter 85 of title 28, United 

22 States Code, is amended by adding at the end the fol23 lowing: 

‘‘1370. Health care liability claims.’’. 


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1 SEC. 507. RIGHT OF REMOVAL. 

2 Section 1441 of title 28, United States Code, is 

3 amended by adding at the end the following: 

4 ‘‘(g) CERTAIN ACTIONS AGAINST MEDICAL PROFES5 SIONALS.—(1) A health care liability action brought in a 

6 State court against an applicable eligible professional, 

7 health care provider, or health care organization may be 

8 removed by any defendant or the defendants to the district 

9 court of the United States for the district and division em10 bracing the place where such action is pending. 

11 ‘‘(2) In this subsection, the terms ‘applicable eligible 

12 professional’, ‘health care liability action’, ‘health care or13 ganization’, and ‘health care provider’ have the meaning 

14 given such terms in section 10 of the Saving Lives, Saving 

15 Costs Act.’’. 

16 SEC. 508. MANDATORY REVIEW BY INDEPENDENT MEDICAL 

17 PANEL. 

18 (a) IN GENERAL.—If, in any health care liability ac19 tion removed to Federal court pursuant to section 1441(g) 

20 of title 28, United States Code, against an applicable eligi21 ble professional, health care provider, or health care orga22 nization, the applicable eligible professional, health care 

23 provider, or health care organization alleges, in response 

24 to a filing of the claimant, that the applicable eligible pro25 fessional, health care provider, or health care organization 

26 adhered to an applicable clinical practice guideline in the 


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1 provision of health care goods or services to the claimant, 

2 then the court shall suspend further proceedings on the 

3 health care liability action prior to discovery proceedings, 

4 until the completion of a review of the action by an inde5 pendent medical review panel. 

6 (b) INDEPENDENT MEDICAL REVIEW PANEL.— 

7 (1) COMPOSITION.—An independent medical re8 view panel under this section shall be composed of 

9 3 members who are experts in the relevant field of 

10 clinical practice, appointed in accordance with para11 graph (5). 

12 (2) REQUIREMENTS FOR MEMBER ELIGI13 BILITY.— 

14 (A) IN GENERAL.—To be eligible to serve 

15 on an independent medical review panel, a 

16 member shall— 

17 (i) be an experienced physician cer18 tified by a board recognized by the Amer19 ican Board of Medical Specialties; 

20 (ii) not earlier than 2 years prior to 

21 the date of selection to the board, have 

22 been in active medical practice or devoted 

23 a substantial portion of his or her time to 

24 teaching at an accredited medical school, 

25 or have been engaged in university-based 


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1 research in relation to the medical care 

2 and type of treatment at issue; and 

3 (iii) be approved by his or her spe4 cialty society. 

5 (B) REGIONAL PREFERENCE.—When pos6 sible, members should be from the region where 

7 the case in question originates to account for 

8 geographical practice variation. 

9 (3) NO CIVIL LIABILITY FOR MEMBERS.—No 

10 civil action shall be brought in any court against any 

11 member for any act, failure to act, or statement or 

12 opinion made, within the scope of his or her duties 

13 as a member of the independent medical review 

14 panel. 

15 (4) CONSIDERATIONS IN MAKING DETERMINA16 TIONS.—The members of the independent medical 

17 review panel shall acknowledge that, under certain 

18 circumstances, it may be appropriate for a physician 

19 to depart from the recommendations in clinical prac20 tice guidelines in the care of individual patients. 

21 (5) SELECTION OF MEMBERS.—Each member 

22 of the independent medical review panel shall be 

23 jointly selected by the parties. A member whose se24 lection one party does not concur in may not serve 

25 on the panel, except that, if, not later than 30 days 


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1 after a response to the health care liability action is 

2 filed, 3 members have not been selected by the par3 ties, the court shall appoint any remaining members. 

4 (6) COMPENSATION OF MEMBERS.—The costs 

5 of compensation to the members of the independent 

6 medical review panel shall be shared between the 

7 parties equally, unless otherwise agreed to by the 

8 parties. 

9 (c) TERMS OF REVIEW.—A review by an independent 

10 medical review panel under this section shall comply with 

11 the following: 

12 (1) STANDARD OF CONDUCT.—The mandatory 

13 independent medical review panel that is charged 

14 with the responsibility of making a preliminary find15 ing as to liability of the defendant applicable eligible 

16 professional shall deem the prescribed clinical prac17 tice guidelines as the standard of conduct, care, and 

18 skill expected of members of the medical profession 

19 engaged in the defendant’s field of practice under 

20 the same or similar circumstances, subject to the 

21 provisions of subsection (b)(4). 

22 (2) RECORD FOR REVIEW.—The independent 

23 medical review panel shall make a preliminary find24 ing based solely upon the pre-discovery evidence sub25 mitted to it pursuant to Rule 26 of the Federal 


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1 Rules of Civil Procedure, any medical records that 

2 would be discoverable if the lawsuit advances to 

3 trial, and the applicable prescribed clinical practice 

4 guidelines. 

5 (3) LIMITATION.—The independent medical re6 view panel shall not make a finding of negligence 

7 from the mere fact that a treatment or procedure 

8 was unsuccessful or failed to bring the best result, 

9 or that the patient died. 

10 (4) USE AT TRIAL OF WORK PRODUCT OF RE11 VIEW PANEL.—No preliminary finding by the inde12 pendent medical review panel that the defendant ap13 plicable eligible professional breached the standard 

14 of care as set forth under the prescribed clinical 

15 practice guidelines shall constitute negligence per se 

16 or conclusive evidence of liability, but findings, opin17 ions, and conclusions of the review panel shall be ad18 missible as evidence in any and all subsequent pro19 ceedings before the court, including for purposes of 

20 motions for summary judgment and at trial. 

21 (d) RESULTS OF REVIEW.— 

22 (1) IN GENERAL.—Not later than 60 days after 

23 all members of the independent medical review panel 

24 have been selected, the panel shall complete a review 


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1 of the record of the liability action and shall make 

2 a finding under this subsection. 

3 (2) FINDING DESCRIBED.—A finding under this 

4 subsection shall include the following: 

5 (A) A determination of whether there are 

6 any applicable clinical practice guidelines to the 

7 health care liability action that substantively 

8 pertains to the injury suffered by the claimant. 

9 (B) Whether the applicable eligible profes10 sional has alleged adherence to any such guide11 line. 

12 (C) Whether the applicable eligible profes13 sional adhered to any such guideline. 

14 (D) Whether there is a reasonable prob15 ability that— 

16 (i) the applicable eligible professional 

17 violated the applicable clinical practice 

18 guideline; 

19 (ii) that violation proximately caused 

20 the claimant’s alleged injury; and 

21 (iii) the claimant suffered damages as 

22 a result of the injury. 

23 (3) USE AT TRIAL.—The finding under this 

24 subsection may be received into evidence by the 

25 court. If the independent medical review panel made 


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1 any finding under paragraph (2)(D) that there was 

2 no reasonable probability of the matters described in 

3 clauses (i) through (iii), the court may issue a sum4 mary judgment in favor of the applicable eligible 

5 professional unless the claimant is able to show oth6 erwise by clear and convincing evidence. If the panel 

7 made a finding under subparagraphs (A) through 

8 (C) of paragraph (2) that there was an applicable 

9 clinical practice guideline that the defendant adhered 

10 to, the court shall issue summary judgment in favor 

11 of the applicable eligible professional unless the 

12 claimant is able to show otherwise by clear and con13 vincing evidence. Any preliminary finding that the 

14 defendant applicable eligible professional did not 

15 breach the standard of care as set forth under the 

16 prescribed medical practice guidelines or that the de17 fendant applicable eligible professional’s nonadher18 ence to the applicable standard was neither the 

19 cause in fact nor the proximate cause of the plain20 tiff’s injury or that the plaintiff did not incur any 

21 damages as a result shall be given deference by the 

22 court and shall entitle the defendant applicable eligi23 ble professional to summary judgment unless the 

24 plaintiff is able to show by clear and convincing evi25 dence that the independent medical review panel was 


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1 in error and that there is a genuine issue as to a 

2 material fact in the case. 

3 SEC. 509. DEFINITIONS. 

4 In this Act: 

5 (1) APPLICABLE ELIGIBLE PROFESSIONAL.— 

6 The term ‘‘applicable eligible professional’’ means a 

7 physician practicing within clinical practice guide8 lines submitted by an eligible professional organiza9 tion and includes employees and agents of a physi10 cian. 

11 (2) APPROPRIATE USE CRITERIA.—The term 

12 ‘‘appropriate use criteria’’ means established evi13 dence-based guidelines developed or endorsed by an 

14 eligible professional organization that specify when 

15 the health benefits of a procedure or service exceed 

16 the expected health risks by a significantly wide 

17 margin. 

18 (3) CLINICAL PRACTICE GUIDELINE.—The term 

19 ‘‘clinical practice guideline’’ means systematically de20 veloped statements based on the review of clinical 

21 evidence for assisting a health care provider to de22 termine the appropriate health care in specific clin23 ical circumstances. 

24 (4) ELIGIBLE PROFESSIONAL ORGANIZATION.— 

25 The term ‘‘eligible professional organization’’ means 


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1 a national or State medical society or medical spe2 cialty society. 

3 (5) FEDERAL PAYOR.—The term ‘‘Federal 

4 payor’’ includes reimbursements made under the 

5 Medicare program under title XVIII of the Social 

6 Security Act or the Medicaid program under title 

7 XIX of the Social Security Act, or medical 

8 screenings, treatments, or transfer services provided 

9 pursuant to section 1867 of the Social Security Act 

10 is not made by the individual or any non-Federal 

11 third party on behalf of the individual. 

12 (6) 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 (7) HEALTH CARE LIABILITY ACTION.—The 

21 term ‘‘health care liability action’’ means a civil ac22 tion against an applicable eligible professional, a 

23 health care provider, or a health care organization, 

24 regardless of the theory of liability on which the 

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1 ants, or other parties, or the number of causes of ac2 tion, in which the claimant alleges a health care li3 ability claim. 

4 (8) HEALTH CARE LIABILITY CLAIM.—The 

5 term ‘‘health care liability claim’’ means a claim by 

6 any person against an applicable eligible profes7 sional, a health care provider, or a health care orga8 nization which is based upon the provision of, use of, 

9 or payment for (or the failure to provide, use, or pay 

10 for) health care goods or services for which at least 

11 partial payment was made by a Federal payor or 

12 which was mandated by Federal law, regardless of 

13 the theory of liability on which the claim is based. 

14 (9) HEALTH CARE ORGANIZATION.—The term 

15 ‘‘health care organization’’ means any person or en16 tity which is obligated to provide or pay for health 

17 benefits under any health plan, including any person 

18 or entity acting under a contract or arrangement 

19 with a health care organization to provide or admin20 ister any health benefit. 

21 (10) HEALTH CARE PROVIDER.—The term 

22 ‘‘health care provider’’ means any person or entity 

23 required by State or Federal laws or regulations to 

24 be licensed, registered, or certified to provide health 

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1 istered, or certified, or exempted from such require2 ment by other statute or regulation. 

3 (11) SECRETARY.—The term ‘‘Secretary’’ 

4 means the Secretary of Health and Human Services. 

5 TITLE VI—MEDICAL 

6 BREAKTHROUGH FUND 

7 SEC. 601. MEDICAL BREAKTHROUGH FUND. 

8 Section 402A of the Public Health Service Act (42 

9 U.S.C. 282a) is amended— 

10 (1) by redesignating subsection (e) as sub11 section (f); and 

12 (2) by inserting after subsection (d) the fol13 lowing: 

14 ‘‘(e) MEDICAL BREAKTHROUGH FUND.— 

15 ‘‘(1) ESTABLISHMENT.—There is established a 

16 fund to be known as the Medical Breakthrough 

17 Fund to support biomedical research through the 

18 funding of basic, translational, and clinical research. 

19 ‘‘(2) AMOUNTS FOR THE FUND.— 

20 ‘‘(A) IN GENERAL.—There are authorized 

21 to be appropriated, and appropriated, to the 

22 Medical Breakthrough Fund out of any funds 

23 in the Treasury not otherwise appropriated, in 

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1 able to the National Institutes of Health, the 

2 following amounts for the following fiscal years: 

3 ‘‘(i) For fiscal year 2017— 

4 ‘‘(I) $1,000,000,000 for the CV 

5 Prize (described in paragraph (5)) to 

6 remain available until expended; and 

7 ‘‘(II) $500,000,000. 

8 ‘‘(ii) For fiscal year 2018, 

9 $1,500,000,000. 

10 ‘‘(iii) For each of fiscal years 2019 

11 through 2024, $2,000,000,000. 

12 ‘‘(B) AVAILABILITY SUBJECT TO APPRO13 PRIATIONS.—Amounts in the Medical Break14 through Fund shall not be available except to 

15 the extent and in such amounts as are provided 

16 in appropriation Acts. 

17 ‘‘(C) ALLOCATION OF AMOUNTS FOR RE18 SEARCH.—The Director of NIH shall allocate 

19 the amounts available in the Medical Break20 through Fund for a fiscal year for research (not 

21 including the CV Prize) consistent with the fol22 lowing: 

23 ‘‘(i) 100 percent of such amounts 

24 shall be for research related to Alzheimer’s 


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1 disease, cancer, heart disease, stoke, or di2 abetes. 

3 ‘‘(ii) Not less than 35 percent of such 

4 amounts shall be for research by early 

5 stage investigators (as defined in para6 graph (7)). 

7 ‘‘(iii) Not less than 20 percent of such 

8 amounts shall be for research that pursues 

9 innovative approaches to major contem10 porary challenges in biomedical research 

11 that involve inherent high risk, but have 

12 the potential to lead to breakthroughs. 

13 ‘‘(iv) Not more than 10 percent of 

14 such amounts may be for intramural re15 search. 

16 ‘‘(v) No amount may be used for fa17 cilities and administration fees in connec18 tion with a research program or project in 

19 excess of 50 percent of the direct costs of 

20 such program or project provided under 

21 this subsection. 

22 ‘‘(D) INAPPLICABILITY OF CERTAIN PROVI23 SIONS.—Amounts in the Medical Breakthrough 

24 Fund are not subject to— 


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1 ‘‘(i) any transfer authority of the Sec2 retary or the Director of NIH under sec3 tion 241, subsection (c), subsection (d), or 

4 any other provision of law; or 

5 ‘‘(ii) the nonrecurring expenses fund 

6 under section 223 of division G of the Con7 solidated Appropriations Act, 2008 (42 

8 U.S.C. 3514a). 

9 ‘‘(E) SUPPLEMENT, NOT SUPPLANT.— 

10 Amounts appropriated and made available pur11 suant to this paragraph shall be used to supple12 ment, not supplant, the funds otherwise allo13 cated by the National Institutes of Health for 

14 biomedical research. 

15 ‘‘(3) AUTHORIZED USES.—Amounts in the 

16 Medical Breakthrough Fund established under para17 graph (1) may be used only to develop and imple18 ment the strategic plan under paragraph (6), to ad19 minister and award the CV Prize, or to conduct and 

20 support innovative biomedical research through the 

21 following: 

22 ‘‘(A) Research in which— 

23 ‘‘(i) a principal investigator has a spe24 cific project or specific objectives; and 


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1 ‘‘(ii) funding is tied to pursuit of such 

2 project or objectives. 

3 ‘‘(B) Research in which— 

4 ‘‘(i) a principal investigator has shown 

5 promise in biomedical research; and 

6 ‘‘(ii) funding is not tied to a specific 

7 project or specific objectives. 

8 ‘‘(C) Research to be carried out principally 

9 by a small business concern (as defined in sec10 tion 3 of the Small Business Act). 

11 ‘‘(4) COORDINATION.—In funding programs 

12 and activities through the Medical Breakthrough 

13 Fund, the Secretary, acting through the Director of 

14 NIH, shall— 

15 ‘‘(A) ensure coordination among the na16 tional research institutes, the national centers, 

17 and other departments, agencies, and offices of 

18 the Federal Government; and 

19 ‘‘(B) minimize unnecessary duplication. 

20 ‘‘(5) CV PRIZE.— 

21 ‘‘(A) AWARDING THE CV PRIZE.—The Di22 rector of NIH shall award a Cure and Vaccine 

23 Prize (in this subsection referred to as the ‘CV 

24 Prize’) consisting of the $1,000,000,000 appro25 priated under paragraph (2)(A)(i)(I) to the first 


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1 applicant who the Director determines in ac2 cordance with this paragraph has developed a 

3 cure or vaccine for Alzheimer’s disease. 

4 ‘‘(B) PUBLISHING CRITERIA.—Not later 

5 than 10 days after receiving recommendations 

6 under subparagraph (F)(ii)(I), the Director of 

7 NIH shall publish criteria for determining what 

8 constitutes a cure or vaccine of Alzheimer’s dis9 ease on the website of the National Institutes of 

10 Health. 

11 ‘‘(C) RECEIVING APPLICATIONS.—The Di12 rector of NIH shall— 

13 ‘‘(i) receive applications of applicants 

14 claiming to have developed a cure or vac15 cine that meets the criteria published 

16 under subparagraph (B); and 

17 ‘‘(ii) send a copy of any applications 

18 so received to the CV Advisory Prize 

19 Board established under paragraph (F)(i). 

20 ‘‘(D) EVALUATING APPLICATIONS.—The 

21 Director of NIH shall— 

22 ‘‘(i) determine if a cure or vaccine for 

23 Alzheimer’s disease described in an appli24 cation received under subparagraph (C) 


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1 meets the criteria published under sub2 paragraph (B); and 

3 ‘‘(ii) when making a determination 

4 under clause (i), take into consideration 

5 the recommendations submitted under sub6 paragraph (F)(ii)(III)). 

7 ‘‘(E) AWARDING THE PRIZE.—If the Di8 rector of NIH determines under subparagraph 

9 (D) that a cure or vaccine described in an ap10 plication received under subparagraph (C) 

11 meets criteria published under subparagraph 

12 (B), not later than 90 days after the date of 

13 such determination, the Director shall award 

14 the CV Prize to the applicant who submitted 

15 the application. 

16 ‘‘(F) CV PRIZE ADVISORY BOARD.— 

17 ‘‘(i) ESTABLISHMENT.—Not later 

18 than 120 days after the date of the enact19 ment of this subsection, the Director of 

20 NIH shall establish a CV Prize Advisory 

21 Board to advise the Director with respect 

22 to awarding the CV Prize. 

23 ‘‘(ii) DUTIES OF THE BOARD.—The 

24 CV Prize Advisory Board shall— 


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1 ‘‘(I) not later than 180 days 

2 after the date of the enactment of this 

3 subsection, recommend to the Director 

4 of NIH criteria for determining what 

5 constitutes a cure or vaccine of Alz6 heimer’s disease; 

7 ‘‘(II) review applications of appli8 cants claiming to have developed a 

9 cure or vaccine that meets the criteria 

10 published under subparagraph (B); 

11 and 

12 ‘‘(III) submit recommendations 

13 to the Director of NIH as to whether 

14 the cure or vaccine described in such 

15 application has met such criteria. 

16 ‘‘(iii) MEMBERS OF THE BOARD.—The 

17 CV Prize Advisory Board shall consist of 

18 14 members as follows: 

19 ‘‘(I) 8 members appointed by the 

20 Director of NIH. 

21 ‘‘(II) 1 member appointed by the 

22 Speaker of the House of Representa23 tives. 

24 ‘‘(III) 1 member appointed by 

25 the majority leader of the Senate. 


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1 ‘‘(IV) 1 member appointed by the 

2 minority leader of the House of Rep3 resentatives. 

4 ‘‘(V) 1 member appointed by the 

5 minority leader of the Senate. 

6 ‘‘(VI) The Director of NIH, who 

7 shall serve ex-officio. 

8 ‘‘(VII) The Secretary, who shall 

9 serve ex-officio. 

10 ‘‘(6) STRATEGIC PLAN.— 

11 ‘‘(A) IN GENERAL.—The Director of NIH 

12 shall ensure that scientifically based strategic 

13 planning is implemented in support of research 

14 priorities of the Medical Breakthrough Fund, 

15 including through the development, use, and 

16 updating of a strategic research investment 

17 plan that— 

18 ‘‘(i) is designed to increase the effi19 cient and effective focus of biomedical re20 search in a manner that leverages the best 

21 scientific opportunities through a delibera22 tive planning process; 

23 ‘‘(ii) identifies strategic focus areas in 

24 which the resources of the Medical Break25 through Fund can address, and find more 


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1 effective treatments for, Alzheimer’s dis2 ease, cancer, heart disease, stoke, and dia3 betes; 

4 ‘‘(iii) includes objectives for each such 

5 strategic focus area; and 

6 ‘‘(iv) ensures that basic research re7 mains a priority. 

8 ‘‘(B) ADVISORY COUNCIL.—The Director 

9 of NIH shall appoint 18 members to an advi10 sory council to offer recommendations to the 

11 Director on the strategic research investment 

12 plan implemented pursuant to subparagraph 

13 (A). The 18 members shall consist of— 

14 ‘‘(i) 3 members who specialize in Alz15 heimer’s disease; 

16 ‘‘(ii) 3 members who specialize in can17 cer; 

18 ‘‘(iii) 3 members who specialize in 

19 heart disease; 

20 ‘‘(iv) 3 members who specialize in 

21 stoke; 

22 ‘‘(v) 3 members who specialize in dia23 betes; and 

24 ‘‘(vi) 3 members who have broad expe25 rience in biomedical research. 


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1 ‘‘(C) UPDATES AND REVIEWS.—The Direc2 tor shall review and, as appropriate, update the 

3 research strategic investment plan under sub4 paragraph (A) not less than often every 18 

5 months. 

6 ‘‘(7) DEFINITION OF EARLY STAGE INVESTI7 GATOR.—In this subsection, the term ‘early stage in8 vestigator’ means, with respect to a research project 

9 or program funded under this subsection, an investi10 gator who— 

11 ‘‘(A) is the principal investigator or the 

12 program director of such project or program; 

13 ‘‘(B) has never been awarded, or has been 

14 awarded only once, a substantial, competing 

15 grant by the National Institutes of Health for 

16 independent research; and 

17 ‘‘(C) at the time of initial funding for such 

18 project or program, is within 10 years of having 

19 completed— 

20 ‘‘(i) the investigator’s terminal degree; 

21 or 

22 ‘‘(ii) a medical residency (or the 

23 equivalent).’’. 


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1 TITLE VII—OTHER PROVISIONS 

2 SEC. 701. RESPECTING HUMAN LIFE. 

3 (a) PROHIBITION ON ABORTION MANDATES.—Noth4 ing in this Act (or any amendment made by this Act) shall 

5 be construed to require any health plan (including any 

6 high-risk pool) to provide coverage of, or access to, abor7 tion services or to allow the Secretary of the Treasury, 

8 the Secretary of Labor, the Secretary of Health and 

9 Human Services, or any other Federal or non-Federal per10 son or entity in implementing this Act (or an amendment 

11 made by this Act) to require coverage of, or access to, 

12 abortion services. 

13 (b) PROHIBITION ON CERTAIN RESEARCH FUND14 ING.— 

15 (1) IN GENERAL.—No funds authorized or ap16 propriated by this Act (or an amendment made by 

17 this Act) may be used to conduct or support re18 search that includes embryo-destructive stem cell re19 search and human cloning. 

20 (2) HUMAN CLONING DEFINED.—In this sub21 section, the term ‘‘human cloning’’ means human 

22 asexual reproduction accomplished by introducing 

23 the nuclear material from a human diploid cell into 

24 an oocyte to produce a living organism at any stage 


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1 of development with a human or predominantly 

2 human genetic constitution. 

3 (3) CONSTRUCTION.—Nothing in this sub4 section may be construed to prohibit conducting or 

5 supporting research that does not include embryo6 destructive stem cell research or human cloning, in7 cluding research involving nuclear transfer or other 

8 cloning techniques to produce molecules, DNA, cells 

9 other than human embryos, tissues, or animals other 

10 than humans. 

11 (c) LIMITATION ON ABORTION FUNDING.— 

12 (1) IN GENERAL.—No funds authorized or ap13 propriated by this Act (or an amendment made by 

14 this Act) may be used to pay for any abortion or to 

15 cover any part of the costs of any health plan that 

16 includes coverage of abortion (including a high risk 

17 pool described in section 2745 of the Public Health 

18 Service Act (42 U.S.C. 300gg–45), as amended by 

19 section 311 of this Act), except— 

20 (A) if the pregnancy is the result of an act 

21 of rape or incest; or 

22 (B) in the case where a pregnant female 

23 suffers from a physical disorder, physical in24 jury, or physical illness that would, as certified 

25 by a physician, place the female in danger of 


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1 death unless an abortion is performed, includ2 ing a life-endangering physical condition caused 

3 by or arising from the pregnancy itself. 

4 (2) OPTION TO PURCHASE SEPARATE COV5 ERAGE OR PLAN.—Nothing in this subsection shall 

6 be construed as prohibiting any non-Federal entity 

7 (including an individual or a State or local govern8 ment) from purchasing separate coverage for abor9 tions for which funding is prohibited under this sub10 section, or a health plan that includes such abor11 tions, so long as such coverage or plan is paid for 

12 entirely using only funds not authorized or appro13 priated by this Act. 

14 (3) OPTION TO OFFER COVERAGE OR PLAN.— 

15 Nothing in this subsection shall restrict any non16 Federal health insurance issuer offering a health 

17 plan from offering separate coverage for abortions 

18 for which funding is prohibited under this sub19 section, or a health plan that includes such abor20 tions, so long as— 

21 (A) premiums for such separate coverage 

22 or plan are paid for entirely with funds not au23 thorized or appropriated by this Act; and 

24 (B) administrative costs and all services 

25 offered through such coverage or plan are paid 


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1 for using only premiums collected for such cov2 erage or plan. 

3 (4) ADMINISTRATIVE EXPENSES.—No funds 

4 authorized or appropriated by this Act shall be avail5 able to pay for administrative expenses in connection 

6 with any health plan (including an association health 

7 plan that has entered into trusteeship) which pro8 vides any benefits or coverage for abortions except 

9 where the life of the mother would be endangered if 

10 the fetus were carried to term, or the pregnancy is 

11 the result of an act of rape or incest. 

12 (d) NO PREEMPTION OF STATE LAWS.—Nothing in 

13 this Act (or an amendment made by this Act) shall be 

14 construed to preempt or otherwise have any effect on 

15 State laws— 

16 (1) protecting conscience rights or restricting or 

17 prohibiting abortion or coverage or funding of abor18 tion, as in effect on the date of the enactment of this 

19 Act; or 

20 (2) establishing procedural requirements on 

21 abortions, including parental notification or consent 

22 for the performance of an abortion on a minor. 

23 (e) DEFINITIONS.—In this section: 

24 (1) The term ‘‘association health plan’’ has the 

25 meaning given to such term in section 801 of the 


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1 Employee Retirement Income Security Act of 1974, 

2 as added by section 451 of this Act. 

3 (2) The term ‘‘high-risk pool’’ means a high4 risk pool described in section 2745 of the Public 

5 Health Service Act (42 U.S.C. 300gg–45), as 

6 amended by section 311 of this Act. 

7 SEC. 702. OFFSETS. 

8 Section 251(c) of the Balanced Budget and Emer9 gency Deficit Control Act of 1985 (2 U.S.C. 901) is 

10 amended as follows: 

11 (1) In paragraph (4)(B), by striking the dollar 

12 amount and inserting ‘‘$496,400,000,000’’. 

13 (2) In paragraph (5)(B), by striking the dollar 

14 amount and inserting ‘‘$507,300,000,000’’. 

15 (3) In paragraph (6)(B), by striking the dollar 

16 amount and inserting ‘‘$523,700,000,000’’. 

17 (4) In paragraph (7)(B), by striking the dollar 

18 amount and inserting ‘‘$534,900,000,000’’. 

19 (5) In paragraph (8)(B), by striking the dollar 

20 amount and inserting ‘‘$546,700,000,000’’. 

Æ 


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