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‘‘(i) prohibit a cause of action under 
paragraph (1) where the nonpayment in-
volved results in the participant or bene-
ficiary being unable to receive further 
items or services that are directly related 
to the item or service involved in the denial 
referred to in subparagraph (A) or that 
are part of a continuing treatment or se-
ries of procedures; 
‘‘(ii) prohibit a cause of action under 
paragraph (1) relating to quality of care; 
or 
‘‘(iii) limit liability that otherwise 
would arise from the provision of the item 
or services or the performance of a medical 
procedure. 
‘‘(11) EXEMPTION FROM PERSONAL LIABILITY 
FOR INDIVIDUAL MEMBERS OF BOARDS OF DIREC-
TORS, JOINT BOARDS OF TRUSTEES, ETC.—Any indi-
vidual who is—
‘‘(A) a member of a board of directors of 
an employer or plan sponsor; or 
‘‘(B) a member of an association, com-
mittee, employee organization, joint board of 
trustees, or other similar group of representa-
202
tives of the entities that are the plan sponsor 
of plan maintained by two or more employers 
and one or more employee organizations; 
shall not be personally liable under this subsection 
for conduct that is within the scope of employment 
or of plan-related duties of the individuals unless the 
individual acts in a fraudulent manner for personal 
enrichment. 
‘‘(12) CHOICE
OF
LAW.—A cause of action 
brought under paragraph (1) shall be governed by 
the law (including choice of law rules) of the State 
in which the plaintiff resides. 
‘‘(13) LIMITATION ON ATTORNEYS’ FEES.—
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, or any arrangement, 
agreement, or contract regarding an attorney’s 
fee, the amount of an attorney’s contingency fee 
allowable for a cause of action brought under 
paragraph (1) shall not exceed 1⁄3 of the total 
amount of the plaintiff’s recovery (not including 
the reimbursement of actual out-of-pocket ex-
penses of the attorney). 
‘‘(B) DETERMINATION
BY
COURT.—The 
last court in which the action was pending upon 
the final disposition, including all appeals, of
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the action may review the attorney’s fee to en-
sure that the fee is a reasonable one. 
‘‘(C) NO PREEMPTION OF STATE LAW.—
Subparagraph (A) shall not apply with respect 
to a cause of action under paragraph (1) that 
is brought in a State that has a law or frame-
work of laws with respect to the amount of an 
attorney’s contingency fee that may be incurred 
for the representation of a participant or bene-
ficiary (or the estate of such participant or ben-
eficiary) who brings such a cause of action. 
‘‘(e) RULES
OF
CONSTRUCTION
RELATING
TO 
HEALTH CARE.—Nothing in this title shall be construed 
as—
‘‘(1) affecting any State law relating to the 
practice of medicine or the provision of, or the fail-
ure to provide, medical care, or affecting any action 
(whether the liability is direct or vicarious) based 
upon such a State law, 
‘‘(2) superseding any State law permitted under 
section 152(b)(1)(A) of the Patients’ Bill of Rights 
Act of 2004, or 
‘‘(3) affecting any applicable State law with re-
spect to limitations on monetary damages.
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‘‘(f) NO RIGHT OF ACTION FOR RECOVERY, INDEM-
NITY, OR CONTRIBUTION BY ISSUERS AGAINST TREATING 
HEALTH CARE PROFESSIONALS
AND TREATING HOS-
PITALS.—In the case of any care provided, or any treat-
ment decision made, by the treating health care profes-
sional or the treating hospital of a participant or bene-
ficiary under a group health plan which consists of medical 
care provided under such plan, any cause of action under 
State law against the treating health care professional or 
the treating hospital by the plan or a health insurance 
issuer providing health insurance coverage in connection 
with the plan for recovery, indemnity, or contribution in 
connection with such care (or any medically reviewable de-
cision made in connection with such care) or such treat-
ment decision is superseded.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to acts and omissions (from which 
a cause of action arises) occurring on or after the applica-
ble effective date under section 601. 
SEC. 403. COOPERATION BETWEEN FEDERAL AND STATE 
AUTHORITIES. 
Subpart C of part 7 of subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1191 et seq.) is amended by adding at the end 
the following new section:
205
‘‘SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE 
AUTHORITIES. 
‘‘(a) AGREEMENT WITH STATES.—A State may 
enter into an agreement with the Secretary for the delega-
tion to the State of some or all of the Secretary’s authority 
under this title to enforce the requirements applicable 
under title I of the Patients’ Bill of Rights Act of 2004 
with respect to health insurance coverage offered by a 
health insurance issuer and with respect to a group health 
plan that is a non-Federal governmental plan. 
‘‘(b) DELEGATIONS.—Any department, agency, or in-
strumentality of a State to which authority is delegated 
pursuant to an agreement entered into under this section 
may, if authorized under State law and to the extent con-
sistent with such agreement, exercise the powers of the 
Secretary under this title which relate to such authority.’’. 
TITLE V—AMENDMENTS TO THE 
INTERNAL 
REVENUE 
CODE 
OF 1986
Subtitle A—Application of Patient 
Protection Provisions 
SEC. 501. APPLICATION TO GROUP HEALTH PLANS UNDER 
THE INTERNAL REVENUE CODE OF 1986. 
Subchapter B of chapter 100 of the Internal Revenue 
Code of 1986 is amended—
206
(1) in the table of sections, by inserting after 
the item relating to section 9812 the following new 
item:
‘‘9813. Standard relating to patients’ bill of rights.’’;
and 
(2) by inserting after section 9812 the fol-
lowing: 
‘‘SEC. 9813. STANDARD RELATING TO PATIENTS’ BILL OF 
RIGHTS. 
‘‘A group health plan shall comply with the require-
ments of title I of the Patients’ Bill of Rights Act of 2004 
(as in effect as of the date of the enactment of such Act), 
and such requirements shall be deemed to be incorporated 
into this section.’’. 
SEC. 502. CONFORMING ENFORCEMENT FOR WOMEN’S 
HEALTH AND CANCER RIGHTS. 
Subchapter B of chapter 100 of the Internal Revenue 
Code of 1986, as amended by section 501, is further 
amended—
(1) in the table of sections, by inserting after 
the item relating to section 9813 the following new 
item:
‘‘9814. Standard relating to women’s health and cancer rights.’’;
and 
(2) by inserting after section 9813 the fol-
lowing:
207
‘‘SEC. 9814. STANDARD RELATING TO WOMEN’S HEALTH 
AND CANCER RIGHTS. 
‘‘The provisions of section 713 of the Employee Re-
tirement Income Security Act of 1974 (as in effect as of 
the date of the enactment of this section) shall apply to 
group health plans as if included in this subchapter.’’. 
Subtitle B—Health Care Coverage 
Access Tax Incentives 
SEC. 511. CREDIT FOR HEALTH INSURANCE EXPENSES OF 
SMALL BUSINESSES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business-related credits) is amended by 
adding at the end the following: 
‘‘SEC. 45E. SMALL BUSINESS HEALTH INSURANCE EX-
PENSES. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a small employer, the health insurance credit 
determined under this section for the taxable year is an 
amount equal to the applicable percentage of the expenses 
paid by the taxpayer during the taxable year for health 
insurance coverage for such year provided under a new 
health plan for employees of such employer. 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 
subsection (a), the applicable percentage is—
208
‘‘(1) in the case of insurance purchased as a 
member of a qualified health benefit purchasing coa-
lition (as defined in section 9841), 30 percent, and 
‘‘(2) in the case of insurance not described in 
paragraph (1), 20 percent. 
‘‘(c) LIMITATIONS.—
‘‘(1) PER
EMPLOYEE
DOLLAR
LIMITATION.—
The amount of expenses taken into account under 
subsection (a) with respect to any employee for any 
taxable year shall not exceed—
‘‘(A) $2,000 in the case of self-only cov-
erage, and 
‘‘(B) $5,000 in the case of family coverage. 
In the case of an employee who is covered by a new 
health plan of the employer for only a portion of 
such taxable year, the limitation under the preceding 
sentence shall be an amount which bears the same 
ratio to such limitation (determined without regard 
to this sentence) as such portion bears to the entire 
taxable year. 
‘‘(2) PERIOD OF COVERAGE.—Expenses may be 
taken into account under subsection (a) only with 
respect to coverage for the 4-year period beginning 
on the date the employer establishes a new health 
plan.
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‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) HEALTH
INSURANCE
COVERAGE.—The 
term ‘health insurance coverage’ has the meaning 
given such term by section 9832(b)(1). 
‘‘(2) NEW HEALTH PLAN.—
‘‘(A) IN GENERAL.—The term ‘new health 
plan’ means any arrangement of the employer 
which provides health insurance coverage to em-
ployees if—
‘‘(i) such employer (and any prede-
cessor employer) did not establish or main-
tain such arrangement (or any similar ar-
rangement) at any time during the 2 tax-
able years ending prior to the taxable year 
in which the credit under this section is 
first allowed, and 
‘‘(ii) 
such 
arrangement 
provides 
health insurance coverage to at least 70 
percent of the qualified employees of such 
employer. 
‘‘(B) QUALIFIED EMPLOYEE.—
‘‘(i) IN GENERAL.—The term ‘quali-
fied employee’ means any employee of an 
employer if the annual rate of such em-
210
ployee’s compensation (as defined in sec-
tion 414(s)) exceeds $10,000. 
‘‘(ii) TREATMENT
OF
CERTAIN
EM-
PLOYEES.—The term ‘employee’ shall in-
clude a leased employee within the mean-
ing of section 414(n). 
‘‘(3) SMALL EMPLOYER.—The term ‘small em-
ployer’ has the meaning given to such term by sec-
tion 4980D(d)(2); except that only qualified employ-
ees shall be taken into account. 
‘‘(e) SPECIAL RULES.—
‘‘(1) CERTAIN RULES MADE APPLICABLE.—For 
purposes of this section, rules similar to the rules of 
section 52 shall apply. 
‘‘(2) AMOUNTS
PAID
UNDER
SALARY
REDUC-
TION ARRANGEMENTS.—No amount paid or incurred 
pursuant to a salary reduction arrangement shall be 
taken into account under subsection (a). 
‘‘(f) TERMINATION.—This section shall not apply to 
expenses paid or incurred by an employer with respect to 
any arrangement established on or after January 1, 
2013.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of such Code (relating to current 
year business credit) is amended by striking ‘‘plus’’ at the
212
mining the credit under section 45E for the taxable 
year which is equal to the amount of the credit de-
termined for such taxable year under section 
45E(a). 
‘‘(2) CONTROLLED
GROUPS.—Persons treated 
as a single employer under subsection (a) or (b) of 
section 52 shall be treated as 1 person for purposes 
of this section.’’. 
(e) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing:
‘‘45E. Small business health insurance expenses.’’.
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2004, for ar-
rangements established after the date of the enactment 
of this Act. 
SEC. 512. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO 
QUALIFIED HEALTH BENEFIT PURCHASING 
COALITIONS. 
(a) IN GENERAL.—Section 4942 of the Internal Rev-
enue Code of 1986 (relating to taxes on failure to dis-
tribute income) is amended by adding at the end the fol-
lowing: