I 
116TH CONGRESS 
1ST SESSION H. R. 1332 
To address the high costs of health care services, prescription drugs, and 
health insurance coverage in the United States, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 25, 2019 
Mr. WESTERMAN introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committees on 
Ways and Means, the Judiciary, Oversight and Reform, Education and 
Labor, Rules, the Budget, Armed Services, and House Administration, 
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 address the high costs of health care services, prescription 
drugs, and health insurance coverage in the United 
States, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Fair Care Act of 2019’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
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Sec. 1. Short title; table of contents. 
TITLE I—PRIVATE-SECTOR HEALTH INSURANCE REFORMS 
Subtitle A—Commercial Health Insurance Provisions 
Sec. 101. Invisible high risk pool reinsurance program; tax on exchange plans. 
Sec. 102. Change in permissible age variation in health insurance premium 
rates. 
Sec. 103. Employer health insurance mandate repeal. 
Sec. 104. Employer benefits reports. 
Sec. 105. Waivers for State innovation. 
Sec. 106. State-operated Exchanges flexibility for open enrollment periods. 
Sec. 107. Enrollment periods. 
Sec. 108. Short-term limited duration insurance. 
Sec. 109. Promoting health plans that cover individuals in more than one State. 
Sec. 110. Restoring the application of antitrust laws to the business of health 
insurance. 
Sec. 111. Health plans created under PPACA or offered through Exchanges to 
be only health plans Federal Government may make available 
to President, Vice President, Members of Congress, and Fed-
eral employees. 
Sec. 112. Cost-sharing reductions. 
Sec. 113. Health savings accounts. 
Sec. 114. Adding copper plans to Exchanges. 
Sec. 115. Eliminating FEHBP eligibility for annuitants. 
Subtitle B—Association Health Plans 
Sec. 121. Rules governing association health plans. 
Sec. 122. Clarification of treatment of single employer arrangements. 
Sec. 123. Enforcement provisions relating to association health plans. 
Sec. 124. Cooperation between Federal and State authorities. 
Sec. 125. Effective date and transitional and other rules. 
Subtitle C—Tax-Related Provisions 
Sec. 131. Premium assistance adjustment to reflect age. 
Sec. 132. Repeal of annual fee on health insurance providers. 
Sec. 133. Repeal of medical device excise tax. 
Sec. 134. Inclusion in income of certain costs of employer-provided coverage 
under health plans. 
Sec. 135. Inclusion of certain over-the-counter medical products as qualified 
medical expenses. 
Sec. 136. Repeal of limitation on health flexible spending arrangements. 
Sec. 137. Medicare part D tax deduction. 
Sec. 138. Repeal of net investment income tax. 
Sec. 139. Basis for purposes of determining gain or loss. 
Sec. 140. Deduction for qualified charity care. 
Sec. 141. Limitation on liability for volunteer health care professionals. 
TITLE II—MEDICARE AND MEDICAID REFORMS 
Subtitle A—Medicare and Medicaid Reforms 
Sec. 201. Flexible block grant option for States. 
Sec. 202. Medicaid eligibility determinations. 
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Sec. 203. Lowering safe harbor threshold with respect to State taxes on health 
care providers. 
Sec. 204. Income limitations for refundable credits for coverage under a quali-
fied health plan. 
Subtitle B—Medicare 
Sec. 221. Off-campus provider-based department medicare site neutral pay-
ment. 
Sec. 222. Elimination of Medicare eligibility for certain individuals. 
Sec. 223. Medicare coverage of bad debt. 
Subtitle C—Medical Malpractice Reform 
Sec. 231. Encouraging speedy resolution of claims. 
Sec. 232. Compensating patient injury. 
Sec. 233. Maximizing patient recovery. 
Sec. 234. Authorization of payment of future damages to claimants in health 
care lawsuits. 
Sec. 235. Product liability for health care providers. 
Sec. 236. Definitions. 
Sec. 237. Effect on other laws. 
Sec. 238. Rules of construction. 
Sec. 239. Effective date. 
Sec. 240. Limitation on expert witness testimony. 
Sec. 241. Communications following unanticipated outcome. 
Sec. 242. Expert witness qualifications. 
Sec. 243. Affidavit of merit. 
Sec. 244. Notice of intent to commence lawsuit. 
TITLE III—PRESCRIPTION DRUG COMPETITION 
Subtitle A—Eliminating Delays of Generic Drugs and Biosimilar Products 
Sec. 301. Actions for delays of generic drugs and biosimilar biological products. 
Sec. 302. REMS approval process for subsequent filers. 
Subtitle B—Increasing Access to Drugs and Biosimilar Products 
Sec. 311. Expedited development and priority review for generic complex drug 
products. 
Sec. 312. Increasing pharmaceutical options to treat an unmet medical need. 
Sec. 313. Preemption of State barriers to the substitution of biosimilar prod-
ucts. 
Subtitle C—Limiting Exclusivity Periods Delaying Competition 
Sec. 321. Limiting exclusivity periods for drugs treating rare diseases and con-
ditions. 
Sec. 322. Limiting exclusivity for biosimilar products. 
Subtitle D—Congressional Review of Agency Rulemaking 
Sec. 331. Congressional review of the Food and Drug Administration rule-
making. 
Sec. 332. Government Accountability Office study of rules. 
Subtitle E—Medicare Prescription Drug Competition 
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Sec. 341. Medicare drug coverage. 
Sec. 342. PBM transparency and elimination of DIR fees. 
Sec. 343. Sunset of limit on maximum rebate amount for single source drugs 
and innovator multiple source drugs. 
Sec. 344. Regulation of manufacturer-sponsored copay contributions. 
Sec. 345. Data reporting to improve the transparency regarding how 340B hos-
pital covered entities provide care for patients. 
Sec. 346. Requiring 340B drug discount program reports by DSH hospital cov-
ered entities on low-income utilization rate of outpatient hos-
pital services. 
TITLE IV—PROVIDER COMPETITION 
Sec. 401. Hospital consolidation. 
Sec. 402. Price transparency. 
Sec. 403. Repealing shared savings incentives from Medicare shared savings 
program. 
Sec. 404. Repeal of health care reform provisions limiting Medicare exception 
to the prohibition on certain physician referrals for hospitals. 
Sec. 405. Advisory group on reducing burden of hospital administrative require-
ments. 
Sec. 406. Authority of Federal Trade Commission over certain tax-exempt or-
ganizations. 
TITLE V—DIGITAL HEALTH CARE 
Sec. 501. Access of individuals to protected health information. 
Sec. 502. Expansion of coverage of telehealth services. 
Sec. 503. STARK and AKS exemptions. 
Sec. 504. STARK technical penalty. 
TITLE I—PRIVATE-SECTOR 
HEALTH INSURANCE REFORMS 
Subtitle A—Commercial Health 
Insurance Provisions 
SEC. 101. INVISIBLE HIGH RISK POOL REINSURANCE PRO-
GRAM; TAX ON EXCHANGE PLANS. 
(a) ESTABLISHMENT.—Not later than January 1, 
2021, the Secretary of Health and Human Services shall 
establish the Invisible High Risk Pool Reinsurance Pro-
gram (in this section referred to as the ‘‘IHRPR pro-
gram’’). 
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(b) STATE GRANTS.—Under the IHRPR program, 
the Secretary shall, from amounts appropriated under 
subsection (f) for a fiscal year, award grants to States for 
such fiscal year, in amounts determined in accordance 
with the allocation methodology specified under subsection 
(d). Such grants shall be used for the purpose of estab-
lishing or maintaining a qualifying invisible high risk pool 
for the State. 
(c) FEDERAL DEFAULT.— 
(1) IN GENERAL.—In the case of a State that 
does not, by a date and in a manner specified by the 
Secretary, choose to be awarded a grant under sub-
section (b) for a fiscal year to operate a qualifying 
invisible high risk pool for the State, the Secretary 
shall, from amounts appropriated under subsection 
(f) for such fiscal year, use the allocation determined 
for the State under subsection (d) for participation 
of such State in the Federal default qualifying invis-
ible high risk pool described in paragraph (2). 
(2) FEDERAL DEFAULT QUALIFYING INVISIBLE 
HIGH RISK POOL.—The Federal default qualifying 
high risk pool is, with respect to each State that 
chooses not to be awarded a grant under subsection 
(b) with respect to a fiscal year for which funds are 
appropriated under subsection (f), an invisible high 
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risk pool under which health insurance issuers par-
ticipating in the Exchange of such a State, with re-
spect to designated individuals who are enrolled in 
health insurance coverage and are expected to expe-
rience higher than average health costs as deter-
mined by the insurer, cede risk to the pool, without 
affecting the premium paid by the designated indi-
viduals or their terms of coverage. With respect to 
such pool— 
(A) high-risk individuals designated for 
cession to the pool shall be designated by the 
ceding issuer; 
(B) the premium amount the ceding issuer 
shall pay to the reinsurance pool shall be 90 
percent of the premium paid to the issuer for 
the coverage; 
(C) the ceding issuer shall retain the same 
risk under the ceded policies as under any other 
policy of the issuer with respect to the first 
$10,000 of benefits for each ceded policy in-
volved and will not retain any risk under ceded 
policies after such first $10,000 of benefits; and 
(D) after a ceding issuer, with respect to 
a ceded policy, no longer retains risk under 
such policy pursuant to subparagraph (C), the 
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negotiated rate under such policy for items and 
services shall be payable at the reimbursement 
rate under the Medicare program under title 
XVIII of the Social Security Act for such items 
and services, or in the case of items and serv-
ices for which payment is available under the 
policy but not the Medicare program, at a rate 
determined by the Secretary. 
(d) ALLOCATION METHODOLOGY.—Not later than 
June 30, 2020, the Secretary shall specify an allocation 
methodology for determining the amount of funds appro-
priated under subsection (f) for a fiscal year to be allo-
cated for each State for purposes of subsections (b) and 
(c). Such methodology shall be based on the number of 
residents of each State and the general health status of 
such residents. 
(e) QUALIFYING INVISIBLE HIGH RISK POOL.—For 
purposes of this section, the term ‘‘qualifying invisible 
high risk pool’’ means, with respect to a State, a method 
of designation under which health insurance issuers iden-
tify individuals who experience higher than average health 
costs as determined by the State and are enrolled in health 
insurance coverage offered in the individual market, and 
cede the risk of spending more than $10,000 on health 
care services for a single individual to the pool without 
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affecting the premium paid by the designated individuals 
or their terms of coverage. With respect to such pool, the 
State, or an entity operating the pool on behalf of the 
State, shall establish— 
(1) the premium amount the ceding issuer shall 
pay to the reinsurance pool; 
(2) the applicable attachment points or coinsur-
ance percentages if the ceding issuer retains any 
portion of the risk under ceded policies, except that 
the provisions of subparagraphs (C) and (D) of sub-
section (c)(2) shall apply to such high risk pool in 
the same manner as such clauses apply to the Fed-
eral default high risk pool; and 
(3) the mechanism by which high-risk individ-
uals are designated for cession to the pool, which 
may include a list of designated high-cost health 
conditions. 
(f) APPROPRIATIONS.—There is appropriated to the 
Secretary 
of 
Health 
and 
Human 
Services 
$200,000,000,000 to carry out this section for the period 
of fiscal year 2020 through fiscal year 2029. 
(g) TAX ON HEALTH INSURANCE PLANS SOLD ON 
EXCHANGES.— 
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(1) IN GENERAL.—Chapter 34 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new subchapter: 
‘‘Subchapter C—Additional Tax on Health In-
surance Plans Sold by Insurers Offering 
Plans on Exchanges 
‘‘Sec. 4401. Additional tax on health insurance plans sold by insurers offering 
plans on exchanges. 
‘‘SEC. 4401. ADDITIONAL TAX ON HEALTH INSURANCE 
PLANS SOLD BY INSURERS OFFERING PLANS 
ON EXCHANGES. 
‘‘(a) IMPOSITION OF TAX.—There is imposed a tax 
of $4 for each policy month of each health insurance policy 
sold by insurers offering plans through an Exchange es-
tablished under the Patient Protection and Affordable 
Care Act. 
‘‘(b) LIABILITY.—The tax imposed by subsection (a) 
shall be paid by the plan sponsor.’’. 
(2) CONFORMING AMENDMENT.—The table of 
subchapters for chapter 34 of the Internal Revenue 
Code of 1986 is amended by adding at the end the 
following item: 
‘‘SUBCHAPTER C—ADDITIONAL TAX ON HEALTH INSURANCE PLANS SOLD BY 
INSURERS OFFERING PLANS ON EXCHANGES’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to months 
beginning after the date of enactment of this Act. 
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SEC. 102. CHANGE IN PERMISSIBLE AGE VARIATION IN 
HEALTH INSURANCE PREMIUM RATES. 
Section 2701(a)(1)(A)(iii) of the Public Health Serv-
ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)) is amended by in-
serting after ‘‘(consistent with section 2707(c))’’ the fol-
lowing: ‘‘or, for plan years beginning on or after January 
1, 2020, as the Secretary may implement through interim 
final regulation, 5 to 1 for adults (consistent with section 
2707(c))’’. 
SEC. 103. EMPLOYER HEALTH INSURANCE MANDATE RE-
PEAL. 
(a) IN GENERAL.—Chapter 43 of the Internal Rev-
enue Code of 1986 is amended by striking section 4980H. 
(b) REPEAL
OF RELATED REPORTING REQUIRE-
MENTS.—Subpart D of part III of subchapter A of chap-
ter 61 of such Code is amended by striking section 6056. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 6724(d)(1)(B) of such Code is 
amended by inserting ‘‘or’’ at the end of clause 
(xxiii), by striking ‘‘or’’ at the end of clause (xxiv), 
and by striking clause (xxv). 
(2) Section 6724(d)(2) of such Code is amend-
ed by inserting ‘‘or’’ at the end of subparagraph 
(GG) and by striking subparagraph (HH). 
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(3) The table of sections for chapter 43 of such 
Code is amended by striking the item relating to sec-
tion 4980H. 
(4) The table of sections for subpart D of part 
III of subchapter A of chapter 61 of such Code is 
amended by striking the item relating to section 
6056. 
(5) Section 1513 of the Patient Protection and 
Affordable Care Act is amended by striking sub-
section (c). 
(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to months and other periods 
beginning after December 31, 2020. 
(2) REPEAL
OF
STUDY
AND
REPORT.—The 
amendment made by subsection (c)(5) shall take ef-
fect on the date of the enactment of this Act. 
SEC. 104. EMPLOYER BENEFITS REPORTS. 
(a) IN GENERAL.—Subject to subsection (b), for each 
plan year beginning on or after January 1, 2021, a group 
health plan and a health insurance issuer offering group 
health insurance coverage shall provide to each individual 
enrolled in such plan or such coverage for such plan year 
a notification containing the following: 
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(1) The amount the sponsor of such group 
health plan expended with respect to such individual 
under such plan for such plan year (or, in the case 
of a health insurance issuer offering group health in-
surance coverage, the amount the employer of such 
individual contributed for such coverage for such in-
dividual for such plan year). 
(2) The amount the sponsor of such group 
health plan expended with respect to such individual 
under such plan for each previous plan year (or, in 
the case of a health insurance issuer offering group 
health insurance coverage, the amount the employer 
of such individual contributed for such coverage for 
such individual for each previous plan year), if appli-
cable. 
(b) LIMITATION.—Subsection (a) shall not apply to 
a group health plan, or a health insurance issuer offering 
group health insurance coverage, for a plan year if, for 
such plan year, the number of individuals enrolled under 
such plan or such coverage was less than 100. 
(c) PENALTY.—In the case that the Secretary of 
Health and Human Services determines that a group 
health plan or a health insurance issuer offering group 
health insurance failed to provide the notice required 
under subsection (a), the Secretary may impose a civil 
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monetary penalty on the sponsor of such plan or such 
issuer, as applicable, in an amount not to exceed $100 
per individual enrolled in such plan or such coverage per 
day that such sponsor or issuer failed to provide such noti-
fication to such individual. 
(d) DEFINITIONS.—In this section, the terms ‘‘group 
health plan’’, ‘‘group health insurance coverage’’, ‘‘health 
insurance issuer’’, and ‘‘sponsor’’ have the meaning given 
such terms in section 2791 of the Public Health Service 
Act (42 U.S.C. 300gg–91). 
SEC. 105. WAIVERS FOR STATE INNOVATION. 
(a) STREAMLINING THE STATE APPLICATION PROC-
ESS.—Section 1332 of the Patient Protection and Afford-
able Care Act (42 U.S.C. 18052) is amended— 
(1) in subsection (a)(1)(C), by striking ‘‘the 
law’’ and inserting ‘‘a law or has in effect a certifi-
cation’’; and 
(2) in subsection (b)(2)— 
(A) in the paragraph heading, by inserting 
‘‘OR CERTIFY’’ after ‘‘LAW’’; 
(B) in subparagraph (A)— 
(i) by striking ‘‘A law’’ and inserting 
the following: 
‘‘(i) LAWS.—A law’’; and 
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(ii) by adding at the end the fol-
lowing: 
‘‘(ii) 
CERTIFICATIONS.—A 
certifi-
cation described in this paragraph is a doc-
ument, signed by the Governor of the 
State, that certifies that such Governor 
has the authority under existing Federal 
and State law to take action under this 
section, including implementation of the 
State plan under subsection (a)(1)(B).’’; 
and 
(C) in subparagraph (B)— 
(i) in the subparagraph heading, by 
striking ‘‘OF OPT OUT’’; and 
(ii) by striking ‘‘may repeal a law’’ 
and all that follows through the period at 
the end and inserting the following: ‘‘may 
terminate the authority provided under the 
waiver with respect to the State by— 
‘‘(i) repealing a law described in sub-
paragraph (A)(i); or 
‘‘(ii) terminating a certification de-
scribed in subparagraph (A)(ii), through a 
certification for such termination signed by 
the Governor of the State.’’. 
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(b) PROVIDING EXPEDITED APPROVAL OF STATE 
WAIVERS.—Section 1332(d) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18052(d)) is amended— 
(1) in paragraph (1) by striking ‘‘180’’ and in-
serting ‘‘90’’; and 
(2) by adding at the end the following: 
‘‘(3) EXPEDITED DETERMINATION.— 
‘‘(A) IN GENERAL.—With respect to any 
application under subsection (a)(1) submitted 
on or after the date of this paragraph or any 
such application submitted prior to such date of 
enactment and under review by the Secretary 
on such date of enactment, the Secretary shall 
make a determination on such application, 
using the criteria for approval otherwise appli-
cable under this section, not later than 45 days 
after the receipt of such application, and shall 
allow the public notice and comment at the 
State and Federal levels described under sub-
section (a)(4) to occur concurrently if such 
State application— 
‘‘(i) is submitted in response to an ur-
gent situation, with respect to areas in the 
State that the Secretary determines are at 
risk for excessive premium increases or 
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having no health plans offered in the appli-
cable health insurance market for the cur-
rent or following plan year; or 
‘‘(ii) is for a waiver that is the same 
or substantially similar to a waiver that 
the Secretary already has approved for an-
other State. 
‘‘(B) APPROVAL.— 
‘‘(i) URGENT SITUATIONS.— 
‘‘(I) PROVISIONAL APPROVAL.—A 
waiver approved under the expedited 
determination process under subpara-
graph (A)(i) shall be in effect for a 
period of 3 years, unless the State re-
quests a shorter duration. 
‘‘(II) FULL APPROVAL.—Subject 
to the requirements for approval oth-
erwise applicable under this section, 
not later than 1 year before the expi-
ration of a provisional waiver period 
described in subclause (I) with respect 
to an application described in sub-
paragraph (A)(i), the Secretary shall 
make a determination on whether to 
extend the approval of such waiver for 
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the full term of the waiver requested 
by the State, for a total approval pe-
riod not to exceed 6 years. The Sec-
retary may request additional infor-
mation as the Secretary determines 
appropriate to make such determina-
tion. 
‘‘(ii) APPROVAL OF SAME OR SIMILAR 
APPLICATIONS.—An approval of a waiver 
under subparagraph (A)(ii) shall be subject 
to the terms of subsection (e). 
‘‘(C) GAO STUDY.—Not later than 5 years 
after the date of enactment of this paragraph, 
the Comptroller General of the United States 
shall conduct a review of all waivers approved 
pursuant to an application under subparagraph 
(A)(ii) to evaluate whether such waivers met 
the requirements of subsection (b)(1) and 
whether the applications should have qualified 
for such expedited process.’’. 
(c) PROVIDING CERTAINTY FOR STATE-BASED RE-
FORMS.—Section 1332(e) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18052(e)) is amended by 
striking ‘‘No waiver’’ and all that follows through the pe-
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riod at the end and inserting the following: ‘‘A waiver 
under this section— 
‘‘(1) shall be in effect for a period of 6 years 
unless the State requests a shorter duration; 
‘‘(2) may be renewed, subject to the State meet-
ing the criteria for approval otherwise applicable 
under this section, for unlimited additional 6-year 
periods upon application by the State; and 
‘‘(3) may not be suspended or terminated, in 
whole or in part, by the Secretary at any time before 
the date of expiration of the waiver period (including 
any renewal period under paragraph (2)), unless the 
Secretary determines that the State materially failed 
to comply with the terms and conditions of the waiv-
er.’’. 
(d) ENSURING PATIENT ACCESS TO MORE FLEXIBLE 
HEALTH PLANS.—Section 1332(b)(1)(B) of the Patient 
Protection 
and 
Affordable 
Care 
Act 
(42 
U.S.C. 
18052(b)(1)(B)) is amended by striking ‘‘at least as af-
fordable’’ and inserting ‘‘of comparable affordability, in-
cluding for low-income individuals, individuals with serious 
health needs, and other vulnerable populations,’’. 
(e) APPLICABILITY.—The amendments made by this 
Act to section 1332 of the Patient Protection and Afford-
able Care Act (42 U.S.C. 18052)— 
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‘‘(7) FLEXIBILITY
FOR
ENROLLMENT
PERI-
ODS.— 
‘‘(A) STATE-OPERATED EXCHANGES OPEN 
ENROLLMENT PERIODS.—In the case of an Ex-
change operated by a State, beginning with 
plan year 2021, the Exchange may provide for 
open enrollment periods (after the initial enroll-
ment period) every 12, 24, or 36 months, as de-
termined by the State.’’. 
SEC. 107. ENROLLMENT PERIODS. 
(a) EXCHANGES.—Paragraph (7) of section 1311(c) 
of the Patient Protection and Affordable Care Act (42 
U.S.C. 18031(c)), as added by section 106, is amended 
by adding at the end the following new subparagraph: 
‘‘(B) ENROLLMENTS OTHER THAN DURING 
INITIAL, OPEN, AND SPECIAL ENROLLMENT PE-
RIODS.—Beginning with plan year 2021, an Ex-
change may provide for enrollments during pe-
riod in addition to open enrollment periods de-
scribed in subparagraph (A) or paragraph (6) 
and special enrollment periods described in 
paragraph (6).’’. 
(b) HEALTH PLANS.—Subpart I of part A of title 
XXVII of the Public Health Service Act is amended by 
adding at the end the following new section: 
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‘‘SEC. 2710. ENROLLMENT OUTSIDE OF INITIAL, OPEN, AND 
SPECIAL ENROLLMENT PERIOD. 
‘‘Beginning with plan year 2021, a group health plan 
and a health insurance issuer offering group or individual 
health insurance coverage may provide for enrollment in 
such plan or coverage during periods in addition to initial, 
open, or special enrollment periods. In the case that an 
individual enrolls in such plan or coverage during a period 
pursuant to the previous sentence, the plan or issuer may 
charge the individual a one-time enrollment fee.’’. 
SEC. 108. SHORT-TERM LIMITED DURATION INSURANCE. 
(a) DEFINITION.—Section 2791(b) of the Public 
Health Service Act (42 U.S.C. 300gg–91(b)) is amended 
by adding at the end the following: 
‘‘(6) SHORT-TERM LIMITED DURATION INSUR-
ANCE.—The term ‘short-term limited duration insur-
ance’ means health insurance coverage provided pur-
suant to a contract with a health insurance issuer 
that has an expiration date specified in the contract 
(not taking into account any extensions that may be 
elected by the policyholder with or without the 
issuer’s consent) that is less than 12 months after 
the original effective date of the contract.’’. 
(b) GUARANTEED RENEWABILITY.—Section 2703 of 
the Public Health Service Act (42 U.S.C. 300gg–2) is 
amended— 
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(1) in subsection (a), by inserting ‘‘or offers 
short-term limited duration insurance’’ after ‘‘group 
market’’; and 
(2) by adding at the end the following: 
‘‘(f) APPLICATION TO SHORT-TERM LIMITED DURA-
TION INSURANCE.— 
‘‘(1) IN GENERAL.—In applying this section in 
the case of short-term limited duration insurance— 
‘‘(A) a reference to ‘health insurance cov-
erage’ with respect to such coverage offered in 
the individual market shall be deemed to in-
clude short-term limited duration insurance; 
and 
‘‘(B) a reference to ‘health insurance 
issuer’ with respect to health insurance cov-
erage offered in the individual market shall be 
deemed to include an issuer of short-term lim-
ited duration insurance. 
‘‘(2) SPECIAL RULE FOR SHORT-TERM LIMITED 
DURATION INSURANCE.—In the case of short-term 
limited duration insurance, at the time of application 
for enrollment in such insurance coverage, an issuer 
of such insurance may offer renewability of such 
coverage, and an individual may decline renewability 
of such coverage in accordance with this section, and 
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the contract between such individual and the health 
insurance issuer shall specify whether the individual 
opted for renewability or no renewability.’’. 
(c) APPLICABILITY.—The amendments made by sub-
sections (a) and (b) shall apply with respect to contracts 
for short-term limited duration insurance that take effect 
on or after January 1, 2020. 
SEC. 109. PROMOTING HEALTH PLANS THAT COVER INDI-
VIDUALS IN MORE THAN ONE STATE. 
There are appropriated, out of amounts in the Treas-
ury not otherwise appropriated, $10,000,000 to be made 
available by December 31, 2020, to the Center for Medi-
care & Medicaid Innovation to fund new research or pilot 
programs dedicated to pursuing viable methods of enroll-
ing individuals in health insurance programs that cross 
State lines. 
SEC. 110. RESTORING THE APPLICATION OF ANTITRUST 
LAWS TO THE BUSINESS OF HEALTH INSUR-
ANCE. 
(a) AMENDMENT TO MCCARRAN-FERGUSON ACT.— 
Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), 
commonly known as the McCarran-Ferguson Act, is 
amended by adding at the end the following: 
‘‘(c)(1) Nothing contained in this Act shall modify, 
impair, or supersede the operation of any of the antitrust 
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laws with respect to the business of health insurance (in-
cluding the business of dental insurance and limited-scope 
dental benefits). 
‘‘(2) Paragraph (1) shall not apply with respect to 
making a contract, or engaging in a combination or con-
spiracy— 
‘‘(A) to collect, compile, or disseminate histor-
ical loss data; 
‘‘(B) to determine a loss development factor ap-
plicable to historical loss data; 
‘‘(C) to perform actuarial services if such con-
tract, combination, or conspiracy does not involve a 
restraint of trade; or 
‘‘(D) to develop or disseminate a standard in-
surance policy form (including a standard addendum 
to an insurance policy form and standard termi-
nology in an insurance policy form) if such contract, 
combination, or conspiracy is not to adhere to such 
standard form or require adherence to such standard 
form. 
‘‘(3) For purposes of this subsection— 
‘‘(A) the term ‘antitrust laws’ has the meaning 
given it in subsection (a) of the first section of the 
Clayton Act (15 U.S.C. 12), except that such term 
includes section 5 of the Federal Trade Commission 
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Act (15 U.S.C. 45) to the extent that such section 
5 applies to unfair methods of competition; 
‘‘(B) the term ‘business of health insurance (in-
cluding the business of dental insurance and limited- 
scope dental benefits)’ does not include— 
‘‘(i) the business of life insurance (includ-
ing annuities); or 
‘‘(ii) the business of property or casualty 
insurance, including but not limited to— 
‘‘(I) any insurance or benefits defined 
as ‘excepted benefits’ under paragraph (1), 
subparagraph (B) or (C) of paragraph (2), 
or paragraph (3) of section 9832(c) of the 
Internal Revenue Code of 1986 (26 U.S.C. 
9832(c)) whether offered separately or in 
combination with insurance or benefits de-
scribed in paragraph (2)(A) of such sec-
tion; and 
‘‘(II) any other line of insurance that 
is classified as property or casualty insur-
ance under State law; 
‘‘(C) the term ‘historical loss data’ means infor-
mation respecting claims paid, or reserves held for 
claims reported, by any person engaged in the busi-
ness of insurance; and 
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‘‘(D) the term ‘loss development factor’ means 
an adjustment to be made to reserves held for losses 
incurred for claims reported by any person engaged 
in the business of insurance, for the purpose of 
bringing such reserves to an ultimate paid basis.’’. 
(b) RELATED PROVISION.—For purposes of section 
5 of the Federal Trade Commission Act (15 U.S.C. 45) 
to the extent such section applies to unfair methods of 
competition, section 3(c) of the McCarran-Ferguson Act 
shall apply with respect to the business of health insurance 
without regard to whether such business is carried on for 
profit, notwithstanding the definition of ‘‘Corporation’’ 
contained in section 4 of the Federal Trade Commission 
Act. 
SEC. 111. HEALTH PLANS CREATED UNDER PPACA OR OF-
FERED THROUGH EXCHANGES TO BE ONLY 
HEALTH PLANS FEDERAL GOVERNMENT MAY 
MAKE 
AVAILABLE 
TO 
PRESIDENT, 
VICE 
PRESIDENT, MEMBERS OF CONGRESS, AND 
FEDERAL EMPLOYEES. 
Section 1312(d)(3)(D) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18032(d)(3)(D)) is 
amended— 
(1) in the subparagraph heading, by striking 
‘‘MEMBERS OF CONGRESS’’ and inserting ‘‘PRESI-
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DENT, VICE PRESIDENT, MEMBERS OF CONGRESS, 
AND FEDERAL EMPLOYEES’’; 
(2) in clause (i), in the matter preceding sub-
clause (I)— 
(A) by striking ‘‘Members of Congress and 
congressional staff’’ and inserting ‘‘the Presi-
dent, Vice President, Members of Congress, and 
Federal employees’’; and 
(B) by striking ‘‘a Member of Congress or 
congressional staff’’ and inserting ‘‘the Presi-
dent, the Vice President, a Member of Con-
gress, or a Federal employee’’; and 
(3) in clause (ii), by amending subclause (II) to 
read as follows: 
‘‘(II) FEDERAL EMPLOYEE.—The 
term ‘Federal employee’ means— 
‘‘(aa) an ‘employee’, as such 
term is defined in section 2105 of 
title 5, United States Code; and 
‘‘(bb) includes an individual 
to whom subsection (c) or (f) of 
such 
section 
2105 
pertains 
(whether or not such individual 
satisfies item (aa)).’’. 
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SEC. 112. COST-SHARING REDUCTIONS. 
(a) COST-SHARING REDUCTION PAYMENTS.—Section 
1402 of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18071) is amended by adding at the end the 
following new subsection: 
‘‘(g) FUNDING.— 
‘‘(1) APPROPRIATIONS.—There is appropriated, 
from any money in the Treasury not otherwise ap-
propriated, such sums as may be necessary to, sub-
ject to paragraph (2), provide health benefits cov-
erage through payment to issuers (under this section 
or through advance payment by the Secretary of the 
Treasury under section 1412(c)(3)) of the amounts 
computed under this section for each of plan years 
2019 through 2022. 
‘‘(2) 
ADJUSTMENTS.—Notwithstanding 
any 
other provision of law, payments and other actions 
for adjustments to obligations incurred prior to De-
cember 31, 2020, may be made through December 
31, 2021. 
‘‘(3) 
LIMITATION.—Amounts 
appropriated 
under paragraph (1) for each of plan years 2019 
through 2022 are subject to the requirements and 
limitations under sections 506 and 507 of division H 
of Public Law 115–31 in the same manner and to 
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the same extent as if such amounts for each such 
year were appropriated under such division.’’. 
(b) ELECTION.—In the case of an election under this 
subsection by a State and a certification by the Secretary 
of Health and Human Services that such election will not 
result in an increase in Federal expenditures, in lieu of 
the amounts that would be paid to health insurance 
issuers in such State under section 1402 of the Patient 
Protection and Affordable Care Act, the Secretary may 
pay to such State an amount equal to such amounts. Prior 
to such payment, such State shall make such assurances 
as the Secretary deems necessary to ensure that such 
State shall redistribute such payments to health savings 
accounts of individuals— 
(1) enrolled in qualified health plans (as defined 
in section 36B of the Internal Revenue Code of 
1986) offered by such issuers, and 
(2) whose income is less than 250 percent of 
the Federal poverty line. 
SEC. 113. HEALTH SAVINGS ACCOUNTS. 
(a) NO HIGH DEDUCTIBLE HEALTH PLANS RE-
QUIRED
FOR HEALTH SAVINGS ACCOUNT CONTRIBU-
TIONS.— 
(1) IN GENERAL.—Section 223 of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘or 
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qualified health plan’’ after ‘‘high deductible health 
plan’’ each place such term appears. 
(2) QUALIFIED HEALTH PLAN DEFINED.—Sec-
tion 223(c) of such Code is amended to read as fol-
lows: 
‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 
section— 
‘‘(1) IN
GENERAL.—The term ‘eligible indi-
vidual’ means, with respect to any month, any indi-
vidual if such individual is covered under a qualified 
health plan as of the 1st day of such month. 
‘‘(2) QUALIFIED
HEALTH
PLAN.—The term 
‘qualified health plan’ has the meaning given such 
term in section 36B.’’. 
(b) PREMIUMS FOR PLANS AS QUALIFIED MEDICAL 
EXPENSES; TREATMENT OF ABORTIONS.— 
(1) IN
GENERAL.—Section 223(d)(2)(B) of 
such Code is amended to read as follows: 
‘‘(B) ABORTIONS.— 
‘‘(i) PAYMENTS FOR HEALTH INSUR-
ANCE
WITH
ABORTION
COVERAGE.—The 
term ‘qualified medical expense’ shall not 
include amounts paid for insurance that 
includes coverage for abortions. 
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‘‘(ii) PAYMENTS
FOR
ABORTIONS.— 
The term ‘qualified medical expense’ shall 
not include amounts paid for an abortion. 
‘‘(iii) EXCEPTION.—Clauses (i) and 
(ii) shall not apply to an abortion, or to 
coverage for an abortion— 
‘‘(I) if the pregnancy is the result 
of an act of rape or incest, or 
‘‘(II) in the case where a woman 
suffers from a physical disorder, phys-
ical injury, or physical illness that 
would, as certified by a physician, 
place the woman in danger of death 
unless an abortion is performed, in-
cluding a life-endangering physical 
condition caused by or arising from 
the pregnancy itself.’’. 
(2) 
CONFORMING
AMENDMENT.—Subsection 
223(d)(2) is amended by striking subparagraph (C). 
SEC. 114. ADDING COPPER PLANS TO EXCHANGES. 
(a) IN GENERAL.—Section 1302 of the Patient Pro-
tection and Affordable Care Act (42 U.S.C. 18022) is 
amended— 
(1) in subsection (a)(3), by inserting ‘‘copper,’’ 
after ‘‘either the’’; 
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SEC. 115. ELIMINATING FEHBP ELIGIBILITY FOR ANNU-
ITANTS. 
Section 8905(b) of title 5, United States Code, is 
amended— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘An’’ and inserting ‘‘Consistent with the 
last sentence of this subsection, an’’; and 
(2) by adding at the end the following: ‘‘. An 
individual who is entitled to benefits under part A 
of title XVIII of the Social Security Act (42 U.S.C. 
1395c et seq.) by reason of section 226 or 226A of 
such Act (42 U.S.C. 426, 426–1), or otherwise eligi-
ble to enroll under such part pursuant to section 
1818 or 1818A of such Act (42 U.S.C. 1395i–2, 
1395i–2a), and who first becomes an annuitant after 
the date of enactment of this sentence may not con-
tinue enrollment in any health benefits plan under 
this chapter.’’. 
Subtitle B—Association Health 
Plans 
SEC. 
121. 
RULES 
GOVERNING 
ASSOCIATION 
HEALTH 
PLANS. 
(a) IN GENERAL.—Subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974 is amend-
ed by adding after part 7 the following new part: 
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‘‘PART 8—RULES GOVERNING ASSOCIATION 
HEALTH PLANS 
‘‘SEC. 801. ASSOCIATION HEALTH PLANS. 
‘‘(a) IN GENERAL.—For purposes of this part, the 
term ‘association health plan’ means a group health plan 
whose sponsor is (or is deemed under this part to be) de-
scribed in subsection (b). 
‘‘(b) SPONSORSHIP.—The sponsor of a group health 
plan is described in this subsection if such sponsor— 
‘‘(1) is organized and maintained in good faith, 
with a constitution and bylaws specifically stating its 
purpose and providing for periodic meetings on at 
least an annual basis, as a bona fide trade associa-
tion, a bona fide industry association (including a 
rural electric cooperative association or a rural tele-
phone cooperative association), a bona fide profes-
sional association, or a bona fide chamber of com-
merce (or similar bona fide business association, in-
cluding a corporation or similar organization that 
operates on a cooperative basis (within the meaning 
of section 1381 of the Internal Revenue Code of 
1986)), for substantial purposes other than that of 
obtaining or providing medical care; 
‘‘(2) is established as a permanent entity which 
receives the active support of its members and re-
quires for membership payment on a periodic basis 
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of dues or payments necessary to maintain eligibility 
for membership in the sponsor; and 
‘‘(3) does not condition membership, such dues 
or payments, or coverage under the plan on the 
basis of health status-related factors with respect to 
the employees of its members (or affiliated mem-
bers), or the dependents of such employees, and does 
not condition such dues or payments on the basis of 
group health plan participation. 
Any sponsor consisting of an association of entities which 
meet the requirements of paragraphs (1), (2), and (3) 
shall be deemed to be a sponsor described in this sub-
section. 
‘‘SEC. 
802. 
CERTIFICATION 
OF 
ASSOCIATION 
HEALTH 
PLANS. 
‘‘(a) IN GENERAL.—The applicable authority shall 
prescribe by regulation a procedure under which, subject 
to subsection (b), the applicable authority shall certify as-
sociation health plans which apply for certification as 
meeting the requirements of this part. 
‘‘(b) STANDARDS.—Under the procedure prescribed 
pursuant to subsection (a), in the case of an association 
health plan that provides at least one benefit option which 
does not consist of health insurance coverage, the applica-
ble authority shall certify such plan as meeting the re-
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quirements of this part only if the applicable authority is 
satisfied that the applicable requirements of this part are 
met (or, upon the date on which the plan is to commence 
operations, will be met) with respect to the plan. 
‘‘(c) REQUIREMENTS APPLICABLE
TO CERTIFIED 
PLANS.—An association health plan with respect to which 
certification under this part is in effect shall meet the ap-
plicable requirements of this part, effective on the date 
of certification (or, if later, on the date on which the plan 
is to commence operations). 
‘‘(d) REQUIREMENTS
FOR
CONTINUED
CERTIFI-
CATION.—The applicable authority may provide by regula-
tion for continued certification of association health plans 
under this part. 
‘‘(e) CLASS CERTIFICATION FOR FULLY INSURED 
PLANS.—The applicable authority shall establish a class 
certification procedure for association health plans under 
which all benefits consist of health insurance coverage. 
Under such procedure, the applicable authority shall pro-
vide for the granting of certification under this part to 
the plans in each class of such association health plans 
upon appropriate filing under such procedure in connec-
tion with plans in such class and payment of the pre-
scribed fee under section 807(a). 
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‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION 
HEALTH PLANS.—An association health plan which offers 
one or more benefit options which do not consist of health 
insurance coverage may be certified under this part only 
if such plan consists of any of the following: 
‘‘(1) A plan which offered such coverage on the 
date of the enactment of this section. 
‘‘(2) A plan under which the sponsor does not 
restrict membership to one or more trades and busi-
nesses or industries and whose eligible participating 
employers represent a broad cross-section of trades 
and businesses or industries. 
‘‘(3) A plan whose eligible participating employ-
ers represent one or more trades or businesses, or 
one or more industries, consisting of any of the fol-
lowing: agriculture; equipment and automobile deal-
erships; barbering and cosmetology; certified public 
accounting practices; child care; construction; dance, 
theatrical and orchestra productions; disinfecting 
and pest control; financial services; fishing; food 
service establishments; hospitals; labor organiza-
tions; logging; manufacturing (metals); mining; med-
ical and dental practices; medical laboratories; pro-
fessional consulting services; sanitary services; trans-
portation (local and freight); warehousing; whole-
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saling/distributing; or any other trade or business or 
industry which has been indicated as having average 
or above-average risk or health claims experience by 
reason of State rate filings, denials of coverage, pro-
posed premium rate levels, or other means dem-
onstrated by such plan in accordance with regula-
tions. 
‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 
BOARDS OF TRUSTEES. 
‘‘(a) SPONSOR.—The requirements of this subsection 
are met with respect to an association health plan if the 
sponsor has met (or is deemed under this part to have 
met) the requirements of section 801(b) for a continuous 
period of not less than 3 years ending with the date of 
the application for certification under this part. 
‘‘(b) BOARD OF TRUSTEES.—The requirements of 
this subsection are met with respect to an association 
health plan if the following requirements are met: 
‘‘(1) FISCAL CONTROL.—The plan is operated, 
pursuant to a trust agreement, by a board of trust-
ees which has complete fiscal control over the plan 
and which is responsible for all operations of the 
plan. 
‘‘(2) RULES
OF
OPERATION
AND
FINANCIAL 
CONTROLS.—The board of trustees has in effect 
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rules of operation and financial controls, based on a 
3-year plan of operation, adequate to carry out the 
terms of the plan and to meet all requirements of 
this title applicable to the plan. 
‘‘(3) RULES
GOVERNING
RELATIONSHIP
TO 
PARTICIPATING
EMPLOYERS
AND
TO
CONTRAC-
TORS.— 
‘‘(A) BOARD MEMBERSHIP.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clauses (ii) and (iii), the members 
of the board of trustees are individuals se-
lected from individuals who are the owners, 
officers, directors, or employees of the par-
ticipating employers or who are partners in 
the participating employers and actively 
participate in the business. 
‘‘(ii) LIMITATION.— 
‘‘(I) GENERAL RULE.—Except as 
provided in subclauses (II) and (III), 
no such member is an owner, officer, 
director, or employee of, or partner in, 
a contract administrator or other 
service provider to the plan. 
‘‘(II) LIMITED
EXCEPTION
FOR 
PROVIDERS OF SERVICES SOLELY ON 
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BEHALF OF THE SPONSOR.—Officers 
or employees of a sponsor which is a 
service provider (other than a contract 
administrator) to the plan may be 
members of the board if they con-
stitute not more than 25 percent of 
the membership of the board and they 
do not provide services to the plan 
other than on behalf of the sponsor. 
‘‘(III) 
TREATMENT
OF
PRO-
VIDERS
OF
MEDICAL
CARE.—In the 
case of a sponsor which is an associa-
tion whose membership consists pri-
marily of providers of medical care, 
subclause (I) shall not apply in the 
case of any service provider described 
in subclause (I) who is a provider of 
medical care under the plan. 
‘‘(iii) CERTAIN
PLANS
EXCLUDED.— 
Clause (i) shall not apply to an association 
health plan which is in existence on the 
date of the enactment of this section. 
‘‘(B) SOLE
AUTHORITY.—The board has 
sole authority under the plan to approve appli-
cations for participation in the plan and to con-
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tract with a service provider to administer the 
day-to-day affairs of the plan. 
‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In 
the case of a group health plan which is established and 
maintained by a franchiser for a franchise network con-
sisting of its franchisees— 
‘‘(1) the requirements of subsection (a) and sec-
tion 801(a) shall be deemed met if such require-
ments would otherwise be met if the franchiser were 
deemed to be the sponsor referred to in section 
801(b), such network were deemed to be an associa-
tion described in section 801(b), and each franchisee 
were deemed to be a member (of the association and 
the sponsor) referred to in section 801(b); and 
‘‘(2) the requirements of section 804(a)(1) shall 
be deemed met. 
The Secretary may by regulation define for purposes of 
this subsection the terms ‘franchiser’, ‘franchise network’, 
and ‘franchisee’. 
‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE-
MENTS. 
‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 
requirements of this subsection are met with respect to 
an association health plan if, under the terms of the 
plan— 
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‘‘(1) each participating employer must be— 
‘‘(A) a member of the sponsor, 
‘‘(B) the sponsor, or 
‘‘(C) an affiliated member of the sponsor 
with respect to which the requirements of sub-
section (b) are met, 
except that, in the case of a sponsor which is a pro-
fessional association or other individual-based asso-
ciation, if at least one of the officers, directors, or 
employees of an employer, or at least one of the in-
dividuals who are partners in an employer and who 
actively participates in the business, is a member or 
such an affiliated member of the sponsor, partici-
pating employers may also include such employer; 
and 
‘‘(2) all individuals commencing coverage under 
the plan after certification under this part must 
be— 
‘‘(A) active or retired owners (including 
self-employed individuals), officers, directors, or 
employees of, or partners in, participating em-
ployers; or 
‘‘(B) the beneficiaries of individuals de-
scribed in subparagraph (A). 
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‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM-
PLOYEES.—In the case of an association health plan in 
existence on the date of the enactment of this section, an 
affiliated member of the sponsor of the plan may be of-
fered coverage under the plan as a participating employer 
only if— 
‘‘(1) the affiliated member was an affiliated 
member on the date of certification under this part; 
or 
‘‘(2) during the 12-month period preceding the 
date of the offering of such coverage, the affiliated 
member has not maintained or contributed to a 
group health plan with respect to any of its employ-
ees who would otherwise be eligible to participate in 
such association health plan. 
‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re-
quirements of this subsection are met with respect to an 
association health plan if, under the terms of the plan, 
no participating employer may provide health insurance 
coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer 
under the plan, if such exclusion of the employee from cov-
erage under the plan is based on a health status-related 
factor with respect to the employee and such employee 
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would, but for such exclusion on such basis, be eligible 
for coverage under the plan. 
‘‘(d) PROHIBITION
OF DISCRIMINATION AGAINST 
EMPLOYERS
AND EMPLOYEES ELIGIBLE TO PARTICI-
PATE.—The requirements of this subsection are met with 
respect to an association health plan if— 
‘‘(1) under the terms of the plan, all employers 
meeting the preceding requirements of this section 
are eligible to qualify as participating employers for 
all geographically available coverage options, unless, 
in the case of any such employer, participation or 
contribution requirements of the type referred to in 
section 2711 of the Public Health Service Act are 
not met; 
‘‘(2) upon request, any employer eligible to par-
ticipate is furnished information regarding all cov-
erage options available under the plan; and 
‘‘(3) the applicable requirements of sections 
701, 702, and 703 are met with respect to the plan. 
‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN 
DOCUMENTS, CONTRIBUTION RATES, AND 
BENEFIT OPTIONS. 
‘‘(a) IN GENERAL.—The requirements of this section 
are met with respect to an association health plan if the 
following requirements are met: 
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‘‘(1) 
CONTENTS
OF
GOVERNING
INSTRU-
MENTS.—The instruments governing the plan in-
clude a written instrument, meeting the require-
ments of an instrument required under section 
402(a)(1), which— 
‘‘(A) provides that the board of trustees 
serves as the named fiduciary required for plans 
under section 402(a)(1) and serves in the ca-
pacity of a plan administrator (referred to in 
section 3(16)(A)); 
‘‘(B) provides that the sponsor of the plan 
is to serve as plan sponsor (referred to in sec-
tion 3(16)(B)); and 
‘‘(C) incorporates the requirements of sec-
tion 806. 
‘‘(2) CONTRIBUTION
RATES
MUST
BE
NON-
DISCRIMINATORY.— 
‘‘(A) The contribution rates for any par-
ticipating small employer do not vary on the 
basis of any health status-related factor in rela-
tion to employees of such employer or their 
beneficiaries and do not vary on the basis of the 
type of business or industry in which such em-
ployer is engaged. 
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‘‘(B) Nothing in this title or any other pro-
vision of law shall be construed to preclude an 
association health plan, or a health insurance 
issuer offering health insurance coverage in 
connection with an association health plan, 
from— 
‘‘(i) setting contribution rates based 
on the claims experience of the plan; or 
‘‘(ii) varying contribution rates for 
small employers in a State to the extent 
that such rates could vary using the same 
methodology employed in such State for 
regulating premium rates in the small 
group market with respect to health insur-
ance coverage offered in connection with 
bona fide associations (within the meaning 
of section 2791(d)(3) of the Public Health 
Service Act), 
subject to the requirements of section 702(b) 
relating to contribution rates. 
‘‘(3) FLOOR FOR NUMBER OF COVERED INDI-
VIDUALS
WITH
RESPECT
TO
CERTAIN
PLANS.—If 
any benefit option under the plan does not consist 
of health insurance coverage, the plan has as of the 
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beginning of the plan year not fewer than 1,000 par-
ticipants and beneficiaries. 
‘‘(4) MARKETING REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—If a benefit option 
which consists of health insurance coverage is 
offered under the plan, State-licensed insurance 
agents shall be used to distribute to small em-
ployers coverage which does not consist of 
health insurance coverage in a manner com-
parable to the manner in which such agents are 
used to distribute health insurance coverage. 
‘‘(B) 
STATE-LICENSED
INSURANCE 
AGENTS.—For purposes of subparagraph (A), 
the term ‘State-licensed insurance agents’ 
means one or more agents who are licensed in 
a State and are subject to the laws of such 
State relating to licensure, qualification, test-
ing, examination, and continuing education of 
persons authorized to offer, sell, or solicit 
health insurance coverage in such State. 
‘‘(5) 
REGULATORY
REQUIREMENTS.—Such 
other requirements as the applicable authority deter-
mines are necessary to carry out the purposes of this 
part, which shall be prescribed by the applicable au-
thority by regulation. 
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‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO 
DESIGN BENEFIT OPTIONS.—Subject to section 514(d), 
nothing in this part or any provision of State law (as de-
fined in section 514(c)(1)) shall be construed to preclude 
an association health plan, or a health insurance issuer 
offering health insurance coverage in connection with an 
association health plan, from exercising its sole discretion 
in selecting the specific items and services consisting of 
medical care to be included as benefits under such plan 
or coverage, except (subject to section 514) in the case 
of (1) any law to the extent that it is not preempted under 
section 731(a)(1) with respect to matters governed by sec-
tion 711, 712, or 713, or (2) any law of the State with 
which filing and approval of a policy type offered by the 
plan was initially obtained to the extent that such law pro-
hibits an exclusion of a specific disease from such cov-
erage. 
‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS 
FOR 
SOLVENCY 
FOR 
PLANS 
PROVIDING 
HEALTH BENEFITS IN ADDITION TO HEALTH 
INSURANCE COVERAGE. 
‘‘(a) IN GENERAL.—The requirements of this section 
are met with respect to an association health plan if— 
‘‘(1) the benefits under the plan consist solely 
of health insurance coverage; or 
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‘‘(2) if the plan provides any additional benefit 
options which do not consist of health insurance cov-
erage, the plan— 
‘‘(A) establishes and maintains reserves 
with respect to such additional benefit options, 
in amounts recommended by the qualified actu-
ary, consisting of— 
‘‘(i) a reserve sufficient for unearned 
contributions; 
‘‘(ii) a reserve sufficient for benefit li-
abilities which have been incurred, which 
have not been satisfied, and for which risk 
of loss has not yet been transferred, and 
for expected administrative costs with re-
spect to such benefit liabilities; 
‘‘(iii) a reserve sufficient for any other 
obligations of the plan; and 
‘‘(iv) a reserve sufficient for a margin 
of error and other fluctuations, taking into 
account the specific circumstances of the 
plan; and 
‘‘(B) establishes and maintains aggregate 
and specific excess/stop loss insurance and sol-
vency indemnification, with respect to such ad-
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ditional benefit options for which risk of loss 
has not yet been transferred, as follows: 
‘‘(i) The plan shall secure aggregate 
excess/stop loss insurance for the plan with 
an attachment point which is not greater 
than 125 percent of expected gross annual 
claims. The applicable authority may by 
regulation provide for upward adjustments 
in the amount of such percentage in speci-
fied circumstances in which the plan spe-
cifically provides for and maintains re-
serves in excess of the amounts required 
under subparagraph (A). 
‘‘(ii) The plan shall secure specific ex-
cess/stop loss insurance for the plan with 
an attachment point which is at least equal 
to an amount recommended by the plan’s 
qualified actuary. The applicable authority 
may by regulation provide for adjustments 
in the amount of such insurance in speci-
fied circumstances in which the plan spe-
cifically provides for and maintains re-
serves in excess of the amounts required 
under subparagraph (A). 
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‘‘(iii) The plan shall secure indem-
nification insurance for any claims which 
the plan is unable to satisfy by reason of 
a plan termination. 
Any person issuing to a plan insurance described in clause 
(i), (ii), or (iii) of subparagraph (B) shall notify the Sec-
retary of any failure of premium payment meriting can-
cellation of the policy prior to undertaking such a cancella-
tion. Any regulations prescribed by the applicable author-
ity pursuant to clause (i) or (ii) of subparagraph (B) may 
allow for such adjustments in the required levels of excess/ 
stop loss insurance as the qualified actuary may rec-
ommend, taking into account the specific circumstances 
of the plan. 
‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS 
RESERVES.—In the case of any association health plan de-
scribed in subsection (a)(2), the requirements of this sub-
section are met if the plan establishes and maintains sur-
plus in an amount at least equal to— 
‘‘(1) $500,000, or 
‘‘(2) such greater amount (but not greater than 
$2,000,000) as may be set forth in regulations pre-
scribed by the applicable authority, considering the 
level of aggregate and specific excess/stop loss insur-
ance provided with respect to such plan and other 
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factors related to solvency risk, such as the plan’s 
projected levels of participation or claims, the nature 
of the plan’s liabilities, and the types of assets avail-
able to assure that such liabilities are met. 
‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of 
any association health plan described in subsection (a)(2), 
the applicable authority may provide such additional re-
quirements relating to reserves, excess/stop loss insurance, 
and indemnification insurance as the applicable authority 
considers appropriate. Such requirements may be provided 
by regulation with respect to any such plan or any class 
of such plans. 
‘‘(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSUR-
ANCE.—The applicable authority may provide for adjust-
ments to the levels of reserves otherwise required under 
subsections (a) and (b) with respect to any plan or class 
of plans to take into account excess/stop loss insurance 
provided with respect to such plan or plans. 
‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The 
applicable authority may permit an association health plan 
described in subsection (a)(2) to substitute, for all or part 
of the requirements of this section (except subsection 
(a)(2)(B)(iii)), such security, guarantee, hold-harmless ar-
rangement, or other financial arrangement as the applica-
ble authority determines to be adequate to enable the plan 
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to fully meet all its financial obligations on a timely basis 
and is otherwise no less protective of the interests of par-
ticipants and beneficiaries than the requirements for 
which it is substituted. The applicable authority may take 
into account, for purposes of this subsection, evidence pro-
vided by the plan or sponsor which demonstrates an as-
sumption of liability with respect to the plan. Such evi-
dence may be in the form of a contract of indemnification, 
lien, bonding, insurance, letter of credit, recourse under 
applicable terms of the plan in the form of assessments 
of participating employers, security, or other financial ar-
rangement. 
‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT 
OF BENEFITS BY CERTAIN PLANS IN DISTRESS.— 
‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSO-
CIATION HEALTH PLAN FUND.— 
‘‘(A) IN GENERAL.—In the case of an as-
sociation health plan described in subsection 
(a)(2), the requirements of this subsection are 
met if the plan makes payments into the Asso-
ciation Health Plan Fund under this subpara-
graph when they are due. Such payments shall 
consist of annual payments in the amount of 
$5,000, and, in addition to such annual pay-
ments, such supplemental payments as the Sec-
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retary may determine to be necessary under 
paragraph (2). Payments under this paragraph 
are payable to the Fund at the time determined 
by the Secretary. Initial payments are due in 
advance of certification under this part. Pay-
ments shall continue to accrue until a plan’s as-
sets are distributed pursuant to a termination 
procedure. 
‘‘(B) PENALTIES FOR FAILURE TO MAKE 
PAYMENTS.—If any payment is not made by a 
plan when it is due, a late payment charge of 
not more than 100 percent of the payment 
which was not timely paid shall be payable by 
the plan to the Fund. 
‘‘(C) CONTINUED
DUTY
OF
THE
SEC-
RETARY.—The Secretary shall not cease to 
carry out the provisions of paragraph (2) on ac-
count of the failure of a plan to pay any pay-
ment when due. 
‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE 
EXCESS/STOP LOSS INSURANCE COVERAGE AND IN-
DEMNIFICATION
INSURANCE
COVERAGE
FOR
CER-
TAIN PLANS.—In any case in which the applicable 
authority determines that there is, or that there is 
reason to believe that there will be: (A) A failure to 
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take necessary corrective actions under section 
809(a) with respect to an association health plan de-
scribed in subsection (a)(2); or (B) a termination of 
such a plan under section 809(b) or 810(b)(8) (and, 
if the applicable authority is not the Secretary, cer-
tifies such determination to the Secretary), the Sec-
retary shall determine the amounts necessary to 
make payments to an insurer (designated by the 
Secretary) to maintain in force excess/stop loss in-
surance coverage or indemnification insurance cov-
erage for such plan, if the Secretary determines that 
there is a reasonable expectation that, without such 
payments, claims would not be satisfied by reason of 
termination of such coverage. The Secretary shall, to 
the extent provided in advance in appropriation 
Acts, pay such amounts so determined to the insurer 
designated by the Secretary. 
‘‘(3) ASSOCIATION HEALTH PLAN FUND.— 
‘‘(A) IN GENERAL.—There is established 
on the books of the Treasury a fund to be 
known as the ‘Association Health Plan Fund’. 
The Fund shall be available for making pay-
ments pursuant to paragraph (2). The Fund 
shall be credited with payments received pursu-
ant to paragraph (1)(A), penalties received pur-
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suant to paragraph (1)(B); and earnings on in-
vestments of amounts of the Fund under sub-
paragraph (B). 
‘‘(B) INVESTMENT.—Whenever the Sec-
retary determines that the moneys of the fund 
are in excess of current needs, the Secretary 
may request the investment of such amounts as 
the Secretary determines advisable by the Sec-
retary of the Treasury in obligations issued or 
guaranteed by the United States. 
‘‘(g) EXCESS/STOP LOSS INSURANCE.—For purposes 
of this section— 
‘‘(1) AGGREGATE
EXCESS/STOP
LOSS
INSUR-
ANCE.—The term ‘aggregate excess/stop loss insur-
ance’ means, in connection with an association 
health plan, a contract— 
‘‘(A) under which an insurer (meeting such 
minimum standards as the applicable authority 
may prescribe by regulation) provides for pay-
ment to the plan with respect to aggregate 
claims under the plan in excess of an amount 
or amounts specified in such contract; 
‘‘(B) which is guaranteed renewable; and 
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‘‘(C) which allows for payment of pre-
miums by any third party on behalf of the in-
sured plan. 
‘‘(2) SPECIFIC
EXCESS/STOP
LOSS
INSUR-
ANCE.—The term ‘specific excess/stop loss insur-
ance’ means, in connection with an association 
health plan, a contract— 
‘‘(A) under which an insurer (meeting such 
minimum standards as the applicable authority 
may prescribe by regulation) provides for pay-
ment to the plan with respect to claims under 
the plan in connection with a covered individual 
in excess of an amount or amounts specified in 
such contract in connection with such covered 
individual; 
‘‘(B) which is guaranteed renewable; and 
‘‘(C) which allows for payment of pre-
miums by any third party on behalf of the in-
sured plan. 
‘‘(h) INDEMNIFICATION INSURANCE.—For purposes 
of this section, the term ‘indemnification insurance’ 
means, in connection with an association health plan, a 
contract— 
‘‘(1) under which an insurer (meeting such min-
imum standards as the applicable authority may pre-
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scribe by regulation) provides for payment to the 
plan with respect to claims under the plan which the 
plan is unable to satisfy by reason of a termination 
pursuant to section 809(b) (relating to mandatory 
termination); 
‘‘(2) which is guaranteed renewable and 
noncancellable for any reason (except as the applica-
ble authority may prescribe by regulation); and 
‘‘(3) which allows for payment of premiums by 
any third party on behalf of the insured plan. 
‘‘(i) RESERVES.—For purposes of this section, the 
term ‘reserves’ means, in connection with an association 
health plan, plan assets which meet the fiduciary stand-
ards under part 4 and such additional requirements re-
garding liquidity as the applicable authority may prescribe 
by regulation. 
‘‘(j) SOLVENCY STANDARDS WORKING GROUP.— 
‘‘(1) IN GENERAL.—Within 90 days after the 
date of the enactment of this section, the applicable 
authority shall establish a Solvency Standards Work-
ing Group. In prescribing the initial regulations 
under this section, the applicable authority shall 
take into account the recommendations of such 
Working Group. 
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‘‘(2) MEMBERSHIP.—The Working Group shall 
consist of not more than 15 members appointed by 
the applicable authority. The applicable authority 
shall include among persons invited to membership 
on the Working Group at least one of each of the 
following: 
‘‘(A) A representative of the National As-
sociation of Insurance Commissioners. 
‘‘(B) A representative of the American 
Academy of Actuaries. 
‘‘(C) A representative of the State govern-
ments, or their interests. 
‘‘(D) A representative of existing self-in-
sured arrangements, or their interests. 
‘‘(E) A representative of associations of 
the type referred to in section 801(b)(1), or 
their interests. 
‘‘(F) A representative of multiemployer 
plans that are group health plans, or their in-
terests. 
‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE-
LATED REQUIREMENTS. 
‘‘(a) FILING FEE.—Under the procedure prescribed 
pursuant to section 802(a), an association health plan 
shall pay to the applicable authority at the time of filing 
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an application for certification under this part a filing fee 
in the amount of $5,000, which shall be available in the 
case of the Secretary, to the extent provided in appropria-
tion Acts, for the sole purpose of administering the certifi-
cation procedures applicable with respect to association 
health plans. 
‘‘(b) INFORMATION TO BE INCLUDED IN APPLICA-
TION FOR CERTIFICATION.—An application for certifi-
cation under this part meets the requirements of this sec-
tion only if it includes, in a manner and form which shall 
be prescribed by the applicable authority by regulation, at 
least the following information: 
‘‘(1) IDENTIFYING INFORMATION.—The names 
and addresses of— 
‘‘(A) the sponsor; and 
‘‘(B) the members of the board of trustees 
of the plan. 
‘‘(2) STATES IN WHICH PLAN INTENDS TO DO 
BUSINESS.—The States in which participants and 
beneficiaries under the plan are to be located and 
the number of them expected to be located in each 
such State. 
‘‘(3) BONDING REQUIREMENTS.—Evidence pro-
vided by the board of trustees that the bonding re-
quirements of section 412 will be met as of the date 
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of the application or (if later) commencement of op-
erations. 
‘‘(4) PLAN DOCUMENTS.—A copy of the docu-
ments governing the plan (including any bylaws and 
trust agreements), the summary plan description, 
and other material describing the benefits that will 
be provided to participants and beneficiaries under 
the plan. 
‘‘(5) 
AGREEMENTS
WITH
SERVICE
PRO-
VIDERS.—A copy of any agreements between the 
plan and contract administrators and other service 
providers. 
‘‘(6) FUNDING REPORT.—In the case of asso-
ciation health plans providing benefits options in ad-
dition to health insurance coverage, a report setting 
forth information with respect to such additional 
benefit options determined as of a date within the 
120-day period ending with the date of the applica-
tion, including the following: 
‘‘(A) RESERVES.—A statement, certified 
by the board of trustees of the plan, and a 
statement of actuarial opinion, signed by a 
qualified actuary, that all applicable require-
ments of section 806 are or will be met in ac-
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cordance with regulations which the applicable 
authority shall prescribe. 
‘‘(B) 
ADEQUACY
OF
CONTRIBUTION 
RATES.—A statement of actuarial opinion, 
signed by a qualified actuary, which sets forth 
a description of the extent to which contribution 
rates are adequate to provide for the payment 
of all obligations and the maintenance of re-
quired reserves under the plan for the 12- 
month period beginning with such date within 
such 120-day period, taking into account the 
expected coverage and experience of the plan. If 
the contribution rates are not fully adequate, 
the statement of actuarial opinion shall indicate 
the extent to which the rates are inadequate 
and the changes needed to ensure adequacy. 
‘‘(C) CURRENT AND PROJECTED VALUE OF 
ASSETS AND LIABILITIES.—A statement of ac-
tuarial opinion signed by a qualified actuary, 
which sets forth the current value of the assets 
and liabilities accumulated under the plan and 
a projection of the assets, liabilities, income, 
and expenses of the plan for the 12-month pe-
riod referred to in subparagraph (B). The in-
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come statement shall identify separately the 
plan’s administrative expenses and claims. 
‘‘(D) 
COSTS
OF
COVERAGE
TO
BE 
CHARGED
AND
OTHER
EXPENSES.—A state-
ment of the costs of coverage to be charged, in-
cluding an itemization of amounts for adminis-
tration, reserves, and other expenses associated 
with the operation of the plan. 
‘‘(E) OTHER
INFORMATION.—Any other 
information as may be determined by the appli-
cable authority, by regulation, as necessary to 
carry out the purposes of this part. 
‘‘(c) FILING
NOTICE
OF
CERTIFICATION
WITH 
STATES.—A certification granted under this part to an 
association health plan shall not be effective unless written 
notice of such certification is filed with the applicable 
State authority of each State in which at least 25 percent 
of the participants and beneficiaries under the plan are 
located. For purposes of this subsection, an individual 
shall be considered to be located in the State in which a 
known address of such individual is located or in which 
such individual is employed. 
‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 
of any association health plan certified under this part, 
descriptions of material changes in any information which 
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was required to be submitted with the application for the 
certification under this part shall be filed in such form 
and manner as shall be prescribed by the applicable au-
thority by regulation. The applicable authority may re-
quire by regulation prior notice of material changes with 
respect to specified matters which might serve as the basis 
for suspension or revocation of the certification. 
‘‘(e) REPORTING REQUIREMENTS FOR CERTAIN AS-
SOCIATION HEALTH PLANS.—An association health plan 
certified under this part which provides benefit options in 
addition to health insurance coverage for such plan year 
shall meet the requirements of section 103 by filing an 
annual report under such section which shall include infor-
mation described in subsection (b)(6) with respect to the 
plan year and, notwithstanding section 104(a)(1)(A), shall 
be filed with the applicable authority not later than 90 
days after the close of the plan year (or on such later date 
as may be prescribed by the applicable authority). The ap-
plicable authority may require by regulation such interim 
reports as it considers appropriate. 
‘‘(f) ENGAGEMENT OF QUALIFIED ACTUARY.—The 
board of trustees of each association health plan which 
provides benefits options in addition to health insurance 
coverage and which is applying for certification under this 
part or is certified under this part shall engage, on behalf 
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of all participants and beneficiaries, a qualified actuary 
who shall be responsible for the preparation of the mate-
rials comprising information necessary to be submitted by 
a qualified actuary under this part. The qualified actuary 
shall utilize such assumptions and techniques as are nec-
essary to enable such actuary to form an opinion as to 
whether the contents of the matters reported under this 
part— 
‘‘(1) are in the aggregate reasonably related to 
the experience of the plan and to reasonable expecta-
tions; and 
‘‘(2) represent such actuary’s best estimate of 
anticipated experience under the plan. 
The opinion by the qualified actuary shall be made with 
respect to, and shall be made a part of, the annual report. 
‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER-
MINATION. 
‘‘Except as provided in section 809(b), an association 
health plan which is or has been certified under this part 
may terminate (upon or at any time after cessation of ac-
cruals in benefit liabilities) only if the board of trustees, 
not less than 60 days before the proposed termination 
date— 
‘‘(1) provides to the participants and bene-
ficiaries a written notice of intent to terminate stat-
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ing that such termination is intended and the pro-
posed termination date; 
‘‘(2) develops a plan for winding up the affairs 
of the plan in connection with such termination in 
a manner which will result in timely payment of all 
benefits for which the plan is obligated; and 
‘‘(3) submits such plan in writing to the appli-
cable authority. 
Actions required under this section shall be taken in such 
form and manner as may be prescribed by the applicable 
authority by regulation. 
‘‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMI-
NATION. 
‘‘(a) ACTIONS
TO
AVOID
DEPLETION
OF
RE-
SERVES.—An association health plan which is certified 
under this part and which provides benefits other than 
health insurance coverage shall continue to meet the re-
quirements of section 806, irrespective of whether such 
certification continues in effect. The board of trustees of 
such plan shall determine quarterly whether the require-
ments of section 806 are met. In any case in which the 
board determines that there is reason to believe that there 
is or will be a failure to meet such requirements, or the 
applicable authority makes such a determination and so 
notifies the board, the board shall immediately notify the 
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qualified actuary engaged by the plan, and such actuary 
shall, not later than the end of the next following month, 
make such recommendations to the board for corrective 
action as the actuary determines necessary to ensure com-
pliance with section 806. Not later than 30 days after re-
ceiving from the actuary recommendations for corrective 
actions, the board shall notify the applicable authority (in 
such form and manner as the applicable authority may 
prescribe by regulation) of such recommendations of the 
actuary for corrective action, together with a description 
of the actions (if any) that the board has taken or plans 
to take in response to such recommendations. The board 
shall thereafter report to the applicable authority, in such 
form and frequency as the applicable authority may speci-
fy to the board, regarding corrective action taken by the 
board until the requirements of section 806 are met. 
‘‘(b) MANDATORY TERMINATION.—In any case in 
which— 
‘‘(1) the applicable authority has been notified 
under subsection (a) (or by an issuer of excess/stop 
loss insurance or indemnity insurance pursuant to 
section 806(a)) of a failure of an association health 
plan which is or has been certified under this part 
and is described in section 806(a)(2) to meet the re-
quirements of section 806 and has not been notified 
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by the board of trustees of the plan that corrective 
action has restored compliance with such require-
ments; and 
‘‘(2) the applicable authority determines that 
there is a reasonable expectation that the plan will 
continue to fail to meet the requirements of section 
806, 
the board of trustees of the plan shall, at the direction 
of the applicable authority, terminate the plan and, in the 
course of the termination, take such actions as the appli-
cable authority may require, including satisfying any 
claims referred to in section 806(a)(2)(B)(iii) and recov-
ering for the plan any liability under subsection 
(a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 
that the affairs of the plan will be, to the maximum extent 
possible, wound up in a manner which will result in timely 
provision of all benefits for which the plan is obligated. 
‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL-
VENT ASSOCIATION HEALTH PLANS PRO-
VIDING HEALTH BENEFITS IN ADDITION TO 
HEALTH INSURANCE COVERAGE. 
‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR 
INSOLVENT PLANS.—Whenever the Secretary determines 
that an association health plan which is or has been cer-
tified under this part and which is described in section 
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806(a)(2) will be unable to provide benefits when due or 
is otherwise in a financially hazardous condition, as shall 
be defined by the Secretary by regulation, the Secretary 
shall, upon notice to the plan, apply to the appropriate 
United States district court for appointment of the Sec-
retary as trustee to administer the plan for the duration 
of the insolvency. The plan may appear as a party and 
other interested persons may intervene in the proceedings 
at the discretion of the court. The court shall appoint such 
Secretary trustee if the court determines that the trustee-
ship is necessary to protect the interests of the partici-
pants and beneficiaries or providers of medical care or to 
avoid any unreasonable deterioration of the financial con-
dition of the plan. The trusteeship of such Secretary shall 
continue until the conditions described in the first sen-
tence of this subsection are remedied or the plan is termi-
nated. 
‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon 
appointment as trustee under subsection (a), shall have 
the power— 
‘‘(1) to do any act authorized by the plan, this 
title, or other applicable provisions of law to be done 
by the plan administrator or any trustee of the plan; 
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‘‘(2) to require the transfer of all (or any part) 
of the assets and records of the plan to the Sec-
retary as trustee; 
‘‘(3) to invest any assets of the plan which the 
Secretary holds in accordance with the provisions of 
the plan, regulations prescribed by the Secretary, 
and applicable provisions of law; 
‘‘(4) to require the sponsor, the plan adminis-
trator, any participating employer, and any employee 
organization representing plan participants to fur-
nish any information with respect to the plan which 
the Secretary as trustee may reasonably need in 
order to administer the plan; 
‘‘(5) to collect for the plan any amounts due the 
plan and to recover reasonable expenses of the trust-
eeship; 
‘‘(6) to commence, prosecute, or defend on be-
half of the plan any suit or proceeding involving the 
plan; 
‘‘(7) to issue, publish, or file such notices, state-
ments, and reports as may be required by the Sec-
retary by regulation or required by any order of the 
court; 
‘‘(8) to terminate the plan (or provide for its 
termination in accordance with section 809(b)) and 
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liquidate the plan assets, to restore the plan to the 
responsibility of the sponsor, or to continue the 
trusteeship; 
‘‘(9) to provide for the enrollment of plan par-
ticipants and beneficiaries under appropriate cov-
erage options; and 
‘‘(10) to do such other acts as may be nec-
essary to comply with this title or any order of the 
court and to protect the interests of plan partici-
pants and beneficiaries and providers of medical 
care. 
‘‘(c) NOTICE OF APPOINTMENT.—As soon as prac-
ticable after the Secretary’s appointment as trustee, the 
Secretary shall give notice of such appointment to— 
‘‘(1) the sponsor and plan administrator; 
‘‘(2) each participant; 
‘‘(3) each participating employer; and 
‘‘(4) if applicable, each employee organization 
which, for purposes of collective bargaining, rep-
resents plan participants. 
‘‘(d) ADDITIONAL DUTIES.—Except to the extent in-
consistent with the provisions of this title, or as may be 
otherwise ordered by the court, the Secretary, upon ap-
pointment as trustee under this section, shall be subject 
to the same duties as those of a trustee under section 704 
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of title 11, United States Code, and shall have the duties 
of a fiduciary for purposes of this title. 
‘‘(e) OTHER PROCEEDINGS.—An application by the 
Secretary under this subsection may be filed notwith-
standing the pendency in the same or any other court of 
any bankruptcy, mortgage foreclosure, or equity receiver-
ship proceeding, or any proceeding to reorganize, conserve, 
or liquidate such plan or its property, or any proceeding 
to enforce a lien against property of the plan. 
‘‘(f) JURISDICTION OF COURT.— 
‘‘(1) IN GENERAL.—Upon the filing of an appli-
cation for the appointment as trustee or the issuance 
of a decree under this section, the court to which the 
application is made shall have exclusive jurisdiction 
of the plan involved and its property wherever lo-
cated with the powers, to the extent consistent with 
the purposes of this section, of a court of the United 
States having jurisdiction over cases under chapter 
11 of title 11, United States Code. Pending an adju-
dication under this section such court shall stay, and 
upon appointment by it of the Secretary as trustee, 
such court shall continue the stay of, any pending 
mortgage foreclosure, equity receivership, or other 
proceeding to reorganize, conserve, or liquidate the 
plan, the sponsor, or property of such plan or spon-
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sor, and any other suit against any receiver, conser-
vator, or trustee of the plan, the sponsor, or prop-
erty of the plan or sponsor. Pending such adjudica-
tion and upon the appointment by it of the Sec-
retary as trustee, the court may stay any proceeding 
to enforce a lien against property of the plan or the 
sponsor or any other suit against the plan or the 
sponsor. 
‘‘(2) VENUE.—An action under this section 
may be brought in the judicial district where the 
sponsor or the plan administrator resides or does 
business or where any asset of the plan is situated. 
A district court in which such action is brought may 
issue process with respect to such action in any 
other judicial district. 
‘‘(g) PERSONNEL.—In accordance with regulations 
which shall be prescribed by the Secretary, the Secretary 
shall appoint, retain, and compensate accountants, actu-
aries, and other professional service personnel as may be 
necessary in connection with the Secretary’s service as 
trustee under this section. 
‘‘SEC. 811. STATE ASSESSMENT AUTHORITY. 
‘‘(a) IN GENERAL.—Notwithstanding section 514, a 
State may impose by law a contribution tax on an associa-
tion health plan described in section 806(a)(2), if the plan 
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ance coverage, aggregate excess/stop loss insurance 
(as defined in section 806(g)(1)), specific excess/stop 
loss insurance (as defined in section 806(g)(2)), 
other insurance related to the provision of medical 
care under the plan, or any combination thereof pro-
vided by such insurers or health maintenance organi-
zations in such State in connection with such plan. 
‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION. 
‘‘(a) DEFINITIONS.—For purposes of this part— 
‘‘(1) GROUP HEALTH PLAN.—The term ‘group 
health plan’ has the meaning provided in section 
733(a)(1) (after applying subsection (b) of this sec-
tion). 
‘‘(2) MEDICAL CARE.—The term ‘medical care’ 
has the meaning provided in section 733(a)(2). 
‘‘(3) HEALTH
INSURANCE
COVERAGE.—The 
term ‘health insurance coverage’ has the meaning 
provided in section 733(b)(1). 
‘‘(4) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning provided 
in section 733(b)(2). 
‘‘(5) APPLICABLE AUTHORITY.—The term ‘ap-
plicable authority’ means the Secretary, except that, 
in connection with any exercise of the Secretary’s 
authority regarding which the Secretary is required 
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under section 506(d) to consult with a State, such 
term means the Secretary, in consultation with such 
State. 
‘‘(6) HEALTH STATUS-RELATED FACTOR.—The 
term ‘health status-related factor’ has the meaning 
provided in section 733(d)(2). 
‘‘(7) INDIVIDUAL MARKET.— 
‘‘(A) IN GENERAL.—The term ‘individual 
market’ means the market for health insurance 
coverage offered to individuals other than in 
connection with a group health plan. 
‘‘(B) 
TREATMENT
OF
VERY
SMALL 
GROUPS.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), such term includes coverage offered in 
connection with a group health plan that 
has fewer than 2 participants as current 
employees or participants described in sec-
tion 732(d)(3) on the first day of the plan 
year. 
‘‘(ii) STATE
EXCEPTION.—Clause (i) 
shall not apply in the case of health insur-
ance coverage offered in a State if such 
State regulates the coverage described in 
such clause in the same manner and to the 
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same extent as coverage in the small group 
market (as defined in section 2791(e)(5) of 
the Public Health Service Act) is regulated 
by such State. 
‘‘(8) PARTICIPATING
EMPLOYER.—The term 
‘participating employer’ means, in connection with 
an association health plan, any employer, if any indi-
vidual who is an employee of such employer, a part-
ner in such employer, or a self-employed individual 
who is such employer (or any dependent, as defined 
under the terms of the plan, of such individual) is 
or was covered under such plan in connection with 
the status of such individual as such an employee, 
partner, or self-employed individual in relation to the 
plan. 
‘‘(9) APPLICABLE
STATE
AUTHORITY.—The 
term ‘applicable State authority’ means, with respect 
to a health insurance issuer in a State, the State in-
surance commissioner or official or officials des-
ignated by the State to enforce the requirements of 
title XXVII of the Public Health Service Act for the 
State involved with respect to such issuer. 
‘‘(10) QUALIFIED ACTUARY.—The term ‘quali-
fied actuary’ means an individual who is a member 
of the American Academy of Actuaries. 
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‘‘(11) AFFILIATED MEMBER.—The term ‘affili-
ated member’ means, in connection with a sponsor— 
‘‘(A) a person who is otherwise eligible to 
be a member of the sponsor but who elects an 
affiliated status with the sponsor, 
‘‘(B) in the case of a sponsor with mem-
bers which consist of associations, a person who 
is a member of any such association and elects 
an affiliated status with the sponsor, or 
‘‘(C) in the case of an association health 
plan in existence on the date of the enactment 
of this section, a person eligible to be a member 
of the sponsor or one of its member associa-
tions. 
‘‘(12) LARGE EMPLOYER.—The term ‘large em-
ployer’ means, in connection with a group health 
plan with respect to a plan year, an employer who 
employed an average of at least 51 employees on 
business days during the preceding calendar year 
and who employs at least 2 employees on the first 
day of the plan year. 
‘‘(13) SMALL EMPLOYER.—The term ‘small em-
ployer’ means, in connection with a group health 
plan with respect to a plan year, an employer who 
is not a large employer. 
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‘‘(b) RULES OF CONSTRUCTION.— 
‘‘(1) EMPLOYERS AND EMPLOYEES.—For pur-
poses of determining whether a plan, fund, or pro-
gram is an employee welfare benefit plan which is an 
association health plan, and for purposes of applying 
this title in connection with such plan, fund, or pro-
gram so determined to be such an employee welfare 
benefit plan— 
‘‘(A) in the case of a partnership, the term 
‘employer’ (as defined in section 3(5)) includes 
the partnership in relation to the partners, and 
the term ‘employee’ (as defined in section 3(6)) 
includes any partner in relation to the partner-
ship; and 
‘‘(B) in the case of a self-employed indi-
vidual, the term ‘employer’ (as defined in sec-
tion 3(5)) and the term ‘employee’ (as defined 
in section 3(6)) shall include such individual. 
‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED 
AS EMPLOYEE WELFARE BENEFIT PLANS.—In the 
case of any plan, fund, or program which was estab-
lished or is maintained for the purpose of providing 
medical care (through the purchase of insurance or 
otherwise) for employees (or their dependents) cov-
ered thereunder and which demonstrates to the Sec-
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retary that all requirements for certification under 
this part would be met with respect to such plan, 
fund, or program if such plan, fund, or program 
were a group health plan, such plan, fund, or pro-
gram shall be treated for purposes of this title as an 
employee welfare benefit plan on and after the date 
of such demonstration.’’. 
(b) CONFORMING AMENDMENTS
TO PREEMPTION 
RULES.— 
(1) Section 514(b)(6) of such Act (29 U.S.C. 
1144(b)(6)) is amended by adding at the end the 
following new subparagraph: 
‘‘(E) The preceding subparagraphs of this paragraph 
do not apply with respect to any State law in the case 
of an association health plan which is certified under part 
8.’’. 
(2) Section 514 of such Act (29 U.S.C. 1144) 
is amended— 
(A) in subsection (b)(4), by striking ‘‘Sub-
section (a)’’ and inserting ‘‘Subsections (a) and 
(f)’’; 
(B) in subsection (b)(5), by striking ‘‘sub-
section (a)’’ in subparagraph (A) and inserting 
‘‘subsection (a) of this section and subsections 
(a)(2)(B) and (b) of section 805’’, and by strik-
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ing ‘‘subsection (a)’’ in subparagraph (B) and 
inserting ‘‘subsection (a) of this section or sub-
section (a)(2)(B) or (b) of section 805’’; and 
(C) by adding at the end the following new 
subsection: 
‘‘(f)(1) Except as provided in subsection (b)(4), the 
provisions of this title shall supersede any and all State 
laws insofar as they may now or hereafter preclude, or 
have the effect of precluding, a health insurance issuer 
from offering health insurance coverage in connection with 
an association health plan which is certified under part 
8. 
‘‘(2) Except as provided in paragraphs (4) and (5) 
of subsection (b) of this section— 
‘‘(A) In any case in which health insurance cov-
erage of any policy type is offered under an associa-
tion health plan certified under part 8 to a partici-
pating employer operating in such State, the provi-
sions of this title shall supersede any and all laws 
of such State insofar as they may preclude a health 
insurance issuer from offering health insurance cov-
erage of the same policy type to other employers op-
erating in the State which are eligible for coverage 
under such association health plan, whether or not 
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such other employers are participating employers in 
such plan. 
‘‘(B) In any case in which health insurance cov-
erage of any policy type is offered in a State under 
an association health plan certified under part 8 and 
the filing, with the applicable State authority (as de-
fined in section 812(a)(9)), of the policy form in 
connection with such policy type is approved by such 
State authority, the provisions of this title shall su-
persede any and all laws of any other State in which 
health insurance coverage of such type is offered, in-
sofar as they may preclude, upon the filing in the 
same form and manner of such policy form with the 
applicable State authority in such other State, the 
approval of the filing in such other State. 
‘‘(3) Nothing in subsection (b)(6)(E) or the preceding 
provisions of this subsection shall be construed, with re-
spect to health insurance issuers or health insurance cov-
erage, to supersede or impair the law of any State— 
‘‘(A) providing solvency standards or similar 
standards regarding the adequacy of insurer capital, 
surplus, reserves, or contributions, or 
‘‘(B) relating to prompt payment of claims. 
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‘‘(4) For additional provisions relating to association 
health plans, see subsections (a)(2)(B) and (b) of section 
805. 
‘‘(5) For purposes of this subsection, the term ‘asso-
ciation health plan’ has the meaning provided in section 
801(a), and the terms ‘health insurance coverage’, ‘par-
ticipating employer’, and ‘health insurance issuer’ have 
the meanings provided such terms in section 812, respec-
tively.’’. 
(3) Section 514(b)(6)(A) of such Act (29 
U.S.C. 1144(b)(6)(A)) is amended— 
(A) in clause (i)(II), by striking ‘‘and’’ at 
the end; 
(B) in clause (ii), by inserting ‘‘and which 
does not provide medical care (within the mean-
ing of section 733(a)(2)),’’ after ‘‘arrange-
ment,’’, and by striking ‘‘title.’’ and inserting 
‘‘title, and’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(iii) subject to subparagraph (E), in the case 
of any other employee welfare benefit plan which is 
a multiple employer welfare arrangement and which 
provides medical care (within the meaning of section 
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733(a)(2)), any law of any State which regulates in-
surance may apply.’’. 
(4) Section 514(d) of such Act (29 U.S.C. 
1144(d)) is amended— 
(A) by striking ‘‘Nothing’’ and inserting 
‘‘(1) Except as provided in paragraph (2), noth-
ing’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) Nothing in any other provision of law enacted 
on or after the date of the enactment of this paragraph 
shall be construed to alter, amend, modify, invalidate, im-
pair, or supersede any provision of this title, except by 
specific cross-reference to the affected section.’’. 
(c) PLAN SPONSOR.—Section 3(16)(B) of such Act 
(29 U.S.C. 102(16)(B)) is amended by adding at the end 
the following new sentence: ‘‘Such term also includes a 
person serving as the sponsor of an association health plan 
under part 8.’’. 
(d) DISCLOSURE OF SOLVENCY PROTECTIONS RE-
LATED TO SELF-INSURED AND FULLY INSURED OPTIONS 
UNDER ASSOCIATION HEALTH PLANS.—Section 102(b) 
of such Act (29 U.S.C. 102(b)) is amended by adding at 
the end the following: ‘‘An association health plan shall 
include in its summary plan description, in connection 
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with each benefit option, a description of the form of sol-
vency or guarantee fund protection secured pursuant to 
this Act or applicable State law, if any.’’. 
(e) SAVINGS CLAUSE.—Section 731(c) of such Act is 
amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 
(f) REPORT TO THE CONGRESS REGARDING CERTIFI-
CATION
OF
SELF-INSURED
ASSOCIATION
HEALTH 
PLANS.—Not later than January 1, 2022, the Secretary 
of Labor shall report to the Committee on Education and 
Labor of the House of Representatives and the Committee 
on Health, Education, Labor, and Pensions of the Senate 
the effect association health plans have had, if any, on 
reducing the number of uninsured individuals. 
(g) CLERICAL AMENDMENT.—The table of contents 
in section 1 of the Employee Retirement Income Security 
Act of 1974 is amended by inserting after the item relat-
ing to section 734 the following new items: 
‘‘PART 8. RULES GOVERNING ASSOCIATION HEALTH PLANS 
‘‘801. Association health plans. 
‘‘802. Certification of association health plans. 
‘‘803. Requirements relating to sponsors and boards of trustees. 
‘‘804. Participation and coverage requirements. 
‘‘805. Other requirements relating to plan documents, contribution rates, and 
benefit options. 
‘‘806. Maintenance of reserves and provisions for solvency for plans providing 
health benefits in addition to health insurance coverage. 
‘‘807. Requirements for application and related requirements. 
‘‘808. Notice requirements for voluntary termination. 
‘‘809. Corrective actions and mandatory termination. 
‘‘810. Trusteeship by the Secretary of insolvent association health plans pro-
viding health benefits in addition to health insurance coverage. 
‘‘811. State assessment authority. 
‘‘812. Definitions and rules of construction.’’. 
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SEC. 122. CLARIFICATION OF TREATMENT OF SINGLE EM-
PLOYER ARRANGEMENTS. 
Section 3(40)(B) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amend-
ed— 
(1) in clause (i), by inserting after ‘‘control 
group,’’ the following: ‘‘except that, in any case in 
which the benefit referred to in subparagraph (A) 
consists of medical care (as defined in section 
812(a)(2)), two or more trades or businesses, wheth-
er or not incorporated, shall be deemed a single em-
ployer for any plan year of such plan, or any fiscal 
year of such other arrangement, if such trades or 
businesses are within the same control group during 
such year or at any time during the preceding 1-year 
period,’’; 
(2) in clause (iii), by striking ‘‘(iii) the deter-
mination’’ and inserting the following: 
‘‘(iii)(I) in any case in which the benefit re-
ferred to in subparagraph (A) consists of medical 
care (as defined in section 812(a)(2)), the deter-
mination of whether a trade or business is under 
‘common control’ with another trade or business 
shall be determined under regulations of the Sec-
retary applying principles consistent and coextensive 
with the principles applied in determining whether 
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employees of two or more trades or businesses are 
treated as employed by a single employer under sec-
tion 4001(b), except that, for purposes of this para-
graph, an interest of greater than 25 percent may 
not be required as the minimum interest necessary 
for common control, or 
‘‘(II) in any other case, the determination’’; 
(3) by redesignating clauses (iv) and (v) as 
clauses (v) and (vi), respectively; and 
(4) by inserting after clause (iii) the following 
new clause: 
‘‘(iv) in any case in which the benefit referred 
to in subparagraph (A) consists of medical care (as 
defined in section 812(a)(2)), in determining, after 
the application of clause (i), whether benefits are 
provided to employees of two or more employers, the 
arrangement shall be treated as having only one par-
ticipating employer if, after the application of clause 
(i), the number of individuals who are employees and 
former employees of any one participating employer 
and who are covered under the arrangement is 
greater than 75 percent of the aggregate number of 
all individuals who are employees or former employ-
ees of participating employers and who are covered 
under the arrangement,’’. 
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SEC. 123. ENFORCEMENT PROVISIONS RELATING TO ASSO-
CIATION HEALTH PLANS. 
(a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL 
MISREPRESENTATIONS.—Section 501 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131) 
is amended by adding at the end the following new sub-
section: 
‘‘(c) Any person who willfully falsely represents, to 
any employee, any employee’s beneficiary, any employer, 
the Secretary, or any State, a plan or other arrangement 
established or maintained for the purpose of offering or 
providing any benefit described in section 3(1) to employ-
ees or their beneficiaries as— 
‘‘(1) being an association health plan which has 
been certified under part 8; 
‘‘(2) having been established or maintained 
under or pursuant to one or more collective bar-
gaining agreements which are reached pursuant to 
collective bargaining described in section 8(d) of the 
National Labor Relations Act (29 U.S.C. 158(d)) or 
paragraph Fourth of section 2 of the Railway Labor 
Act (45 U.S.C. 152, paragraph Fourth) or which are 
reached pursuant to labor-management negotiations 
under similar provisions of State public employee re-
lations laws; or 
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‘‘(3) being a plan or arrangement described in 
section 3(40)(A)(i), 
shall, upon conviction, be imprisoned not more than 5 
years, be fined under title 18, United States Code, or 
both.’’. 
(b) CEASE ACTIVITIES ORDERS.—Section 502 of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1132) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DE-
SIST ORDERS.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
upon application by the Secretary showing the oper-
ation, promotion, or marketing of an association 
health plan (or similar arrangement providing bene-
fits consisting of medical care (as defined in section 
733(a)(2))) that— 
‘‘(A) is not certified under part 8, is sub-
ject under section 514(b)(6) to the insurance 
laws of any State in which the plan or arrange-
ment offers or provides benefits, and is not li-
censed, registered, or otherwise approved under 
the insurance laws of such State; or 
‘‘(B) is an association health plan certified 
under part 8 and is not operating in accordance 
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with the requirements under part 8 for such 
certification, 
a district court of the United States shall enter an 
order requiring that the plan or arrangement cease 
activities. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply in the case of an association health plan or 
other arrangement if the plan or arrangement shows 
that— 
‘‘(A) all benefits under it referred to in 
paragraph (1) consist of health insurance cov-
erage; and 
‘‘(B) with respect to each State in which 
the plan or arrangement offers or provides ben-
efits, the plan or arrangement is operating in 
accordance with applicable State laws that are 
not superseded under section 514. 
‘‘(3) ADDITIONAL
EQUITABLE
RELIEF.—The 
court may grant such additional equitable relief, in-
cluding any relief available under this title, as it 
deems necessary to protect the interests of the pub-
lic and of persons having claims for benefits against 
the plan.’’. 
(c) RESPONSIBILITY
FOR CLAIMS PROCEDURE.— 
Section 503 of the Employee Retirement Income Security 
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Act of 1974 (29 U.S.C. 1133) is amended by inserting 
‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’, and by 
adding at the end the following new subsection: 
‘‘(b) ASSOCIATION HEALTH PLANS.—The terms of 
each association health plan which is or has been certified 
under part 8 shall require the board of trustees or the 
named fiduciary (as applicable) to ensure that the require-
ments of this section are met in connection with claims 
filed under the plan.’’. 
SEC. 124. COOPERATION BETWEEN FEDERAL AND STATE 
AUTHORITIES. 
Section 506 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1136) is amended by adding 
at the end the following new subsection: 
‘‘(d) CONSULTATION WITH STATES WITH RESPECT 
TO ASSOCIATION HEALTH PLANS.— 
‘‘(1) AGREEMENTS
WITH
STATES.—The Sec-
retary shall consult with the State recognized under 
paragraph (2) with respect to an association health 
plan regarding the exercise of— 
‘‘(A) the Secretary’s authority under sec-
tions 502 and 504 to enforce the requirements 
for certification under part 8; and 
‘‘(B) the Secretary’s authority to certify 
association health plans under part 8 in accord-
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ance with regulations of the Secretary applica-
ble to certification under part 8. 
‘‘(2) RECOGNITION
OF
PRIMARY
DOMICILE 
STATE.—In carrying out paragraph (1), the Sec-
retary shall ensure that only one State will be recog-
nized, with respect to any particular association 
health plan, as the State with which consultation is 
required. In carrying out this paragraph— 
‘‘(A) in the case of a plan which provides 
health insurance coverage (as defined in section 
812(a)(3)), such State shall be the State with 
which filing and approval of a policy type of-
fered by the plan was initially obtained, and 
‘‘(B) in any other case, the Secretary shall 
take into account the places of residence of the 
participants and beneficiaries under the plan 
and the State in which the trust is main-
tained.’’. 
SEC. 125. EFFECTIVE DATE AND TRANSITIONAL AND 
OTHER RULES. 
(a) EFFECTIVE DATE.—The amendments made by 
this Act shall take effect 1 year after the date of the enact-
ment of this Act. The Secretary of Labor shall first issue 
all regulations necessary to carry out the amendments 
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made by this Act within 1 year after the date of the enact-
ment of this Act. 
(b) TREATMENT
OF CERTAIN EXISTING HEALTH 
BENEFITS PROGRAMS.— 
(1) IN GENERAL.—In any case in which, as of 
the date of the enactment of this Act, an arrange-
ment is maintained in a State for the purpose of 
providing benefits consisting of medical care for the 
employees and beneficiaries of its participating em-
ployers, at least 200 participating employers make 
contributions to such arrangement, such arrange-
ment has been in existence for at least 10 years, and 
such arrangement is licensed under the laws of one 
or more States to provide such benefits to its par-
ticipating employers, upon the filing with the appli-
cable authority (as defined in section 812(a)(5) of 
the Employee Retirement Income Security Act of 
1974 (as amended by this subtitle)) by the arrange-
ment of an application for certification of the ar-
rangement under part 8 of subtitle B of title I of 
such Act— 
(A) such arrangement shall be deemed to 
be a group health plan for purposes of title I 
of such Act; 
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(B) the requirements of sections 801(a) 
and 803(a) of the Employee Retirement Income 
Security Act of 1974 shall be deemed met with 
respect to such arrangement; 
(C) the requirements of section 803(b) of 
such Act shall be deemed met, if the arrange-
ment is operated by a board of directors 
which— 
(i) is elected by the participating em-
ployers, with each employer having one 
vote; and 
(ii) has complete fiscal control over 
the arrangement and which is responsible 
for all operations of the arrangement; 
(D) the requirements of section 804(a) of 
such Act shall be deemed met with respect to 
such arrangement; and 
(E) the arrangement may be certified by 
any applicable authority with respect to its op-
erations in any State only if it operates in such 
State on the date of certification. 
The provisions of this subsection shall cease to apply 
with respect to any such arrangement at such time 
after the date of the enactment of this Act as the 
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applicable requirements of this subsection are not 
met with respect to such arrangement. 
(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘group health plan’’, ‘‘medical 
care’’, and ‘‘participating employer’’ shall have the 
meanings provided in section 812 of the Employee 
Retirement Income Security Act of 1974, except 
that the reference in paragraph (7) of such section 
to an ‘‘association health plan’’ shall be deemed a 
reference to an arrangement referred to in this sub-
section. 
(c) COORDINATION WITH EXISTING LAW.—Nothing 
in this Act shall require plans to become certified under 
section 802 of the Employee Retirement Income Security 
Act of 1974, as amended by this Act, or require plans 
that are not certified under such section to comply with 
the requirements under part 8 of such Act, except to the 
extent provided in section 809 of such Act. 
Subtitle C—Tax-Related Provisions 
SEC. 131. PREMIUM ASSISTANCE ADJUSTMENT TO RE-
FLECT AGE. 
(a) MODIFICATION OF APPLICABLE PERCENTAGE.— 
Section 36B(b)(3)(A) of the Internal Revenue Code of 
1986 is amended to read as follows: 
‘‘(A) APPLICABLE PERCENTAGE.— 
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‘‘(i) IN
GENERAL.—The applicable 
percentage for any taxable year shall be 
the percentage such that the applicable 
percentage for any taxpayer whose house-
hold income is within an income tier speci-
fied in the following table shall increase, on 
a sliding scale in a linear manner, from the 
initial percentage to the final percentage 
specified in such table for such income tier 
with respect to a taxpayer of the age in-
volved: 
‘‘In the case of 
household income 
(expressed as a 
percent of the 
poverty line) 
within the 
following 
income tier: 
Up to Age 29 
Age 30–39 
Age 40–49 
Age 50–59 
Over Age 59 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Up to 100% 
100%–133% 
133%–150% 
150%–200% 
4.3 
5.3 
6.3 
7.3 
8.3 
200%–250% 
4.3 
4.3 
5.3 
5.9 
6.3 
8.05 
7.3 
8.3 
250%–300% 
4.3 
4.3 
5.9 
5.9 
8.05 
8.35 
10.5 
11.5 
300%–400% 
4.3 
4.3 
5.9 
5.9 
8.35 
8.35 
10.5 
10.5 
11.5 
11.5 
‘‘(ii) AGE DETERMINATIONS.— 
‘‘(I) IN GENERAL.—For purposes 
of clause (i), the age of the taxpayer 
taken into account under clause (i) 
with respect to any taxable year is the 
age attained by such taxpayer before 
the close of such taxable year. 
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‘‘(II) JOINT
RETURNS.—In the 
case of a joint return, the age of the 
older spouse shall be taken into ac-
count under clause (i). 
‘‘(iii) INDEXING.—In the case of any 
taxable year beginning after calendar year 
2021, the initial and final percentages con-
tained in clause (i) shall be adjusted to re-
flect— 
‘‘(I) the excess (if any) of the 
rate of premium growth for the period 
beginning with calendar year 2013 
and ending with calendar year 2020, 
over the rate of income growth for 
such period, and 
‘‘(II) in addition to any adjust-
ment under subclause (I), the excess 
(if any) of the rate of premium 
growth for calendar year 2020, over 
the rate of growth in the consumer 
price index for calendar year 2020. 
‘‘(iv) FAILSAFE.—Clause (iii)(II) shall 
apply only if the aggregate amount of pre-
mium tax credits under this section and 
cost-sharing reductions under section 1402 
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of the Patient Protection and Affordable 
Care Act for calendar year 2018 exceeds 
an amount equal to 0.504 percent of the 
gross domestic product for such calendar 
year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
SEC. 132. REPEAL OF ANNUAL FEE ON HEALTH INSURANCE 
PROVIDERS. 
(a) IN GENERAL.—The Patient Protection and Af-
fordable Care Act is amended by striking section 9010. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to calendar years be-
ginning after December 31, 2019. 
SEC. 133. REPEAL OF MEDICAL DEVICE EXCISE TAX. 
(a) IN GENERAL.—Chapter 32 of the Internal Rev-
enue Code of 1986 is amended by striking subchapter E. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 4221 of such Code 
is amended by striking the last sentence. 
(2) Paragraph (2) of section 6416(b) of such 
Code is amended by striking the last sentence. 
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(c) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 32 of such Code is amended by strik-
ing the item relating to subchapter E. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after December 31, 2017. 
SEC. 134. INCLUSION IN INCOME OF CERTAIN COSTS OF 
EMPLOYER-PROVIDED 
COVERAGE 
UNDER 
HEALTH PLANS. 
(a) IN GENERAL.—Section 106 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(h) LIMITATION.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply to the extent that employer-provided coverage 
under health plans for an employee for a taxable 
year exceeds— 
‘‘(A) $10,200 for self-only coverage, and 
‘‘(B) $27,500 for all other coverage. 
‘‘(2) IN GENERAL.—In the case of any calendar 
year after 2021, the dollar amounts in paragraph 
(1) shall each be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by— 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar 
year, determined 
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100 
‘‘(i) by substituting ‘calendar year 
2020’ for ‘calendar year 2016’ in subpara-
graph (A)(ii) thereof, and 
‘‘(ii) by substituting for the C–CPI–U 
referred to in section 1(f)(3)(A) the 
amount that such CPI would have been if 
the annual percentage increase in CPI with 
respect to each year after 2020 and before 
2031 had been one percentage point great-
er. 
‘‘(3) TERMS RELATED TO CPI.— 
‘‘(A) ANNUAL PERCENTAGE INCREASE.— 
For purposes of subparagraph (B)(ii)(II), the 
term ‘annual percentage increase’ means the 
percentage (if any) by which C–CPI–U for any 
year exceeds the C–CPI–U for the prior year. 
‘‘(B) OTHER TERMS.—Terms used in this 
paragraph which are also used in section 
1(f)(3) shall have the same meanings as when 
used in such section.’’. 
(b) REPEAL
OF EMPLOYER-SPONSORED HEALTH 
COVERAGE EXCISE TAX.—The Internal Revenue Code of 
1986 is amended by striking section 4980I. 
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101 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after December 31, 2020. 
SEC. 135. INCLUSION OF CERTAIN OVER-THE-COUNTER 
MEDICAL PRODUCTS AS QUALIFIED MEDICAL 
EXPENSES. 
(a) HSAS.—Section 223(d)(2) of the Internal Rev-
enue Code of 1986 is amended— 
(1) by striking the last sentence of subpara-
graph (A) and inserting the following: ‘‘For pur-
poses of this subparagraph, amounts paid for men-
strual care products shall be treated as paid for 
medical care.’’, and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(D) MENSTRUAL
CARE
PRODUCT.—For 
purposes of this paragraph, the term ‘menstrual 
care product’ means a tampon, pad, liner, cup, 
sponge, or similar product used by women with 
respect to menstruation or other genital-tract 
secretions.’’. 
(b) ARCHER MSAS.—Section 220(d)(2)(A) of such 
Code is amended by striking the last sentence and insert-
ing the following: ‘‘For purposes of this subparagraph, 
amounts paid for menstrual care products (as defined in 
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102 
section 223(d)(2)(D)) shall be treated as paid for medical 
care.’’. 
(c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS 
AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec-
tion 106 of such Code is amended by striking subsection 
(f) and inserting the following new subsection: 
‘‘(f) REIMBURSEMENTS
FOR
MENSTRUAL
CARE 
PRODUCTS.—For purposes of this section and section 
105, expenses incurred for menstrual care products (as 
defined in section 223(d)(2)(D)) shall be treated as in-
curred for medical care.’’. 
(d) EFFECTIVE DATES.— 
(1) DISTRIBUTIONS FROM HEALTH SAVINGS AC-
COUNTS.—The amendments made by subsections (a) 
and (b) shall apply to amounts paid after December 
31, 2020. 
(2) REIMBURSEMENTS.—The amendment made 
by subsection (c) shall apply to expenses incurred 
after December 31, 2020. 
SEC. 136. REPEAL OF LIMITATION ON HEALTH FLEXIBLE 
SPENDING ARRANGEMENTS. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 is amended by striking subsection (i). 
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103 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 137. MEDICARE PART D TAX DEDUCTION. 
(a) IN GENERAL.—Section 139A of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following: ‘‘This section shall not be taken into account 
for purposes of determining whether any deduction is al-
lowable with respect to any cost taken into account in de-
termining such payment.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 138. REPEAL OF NET INVESTMENT INCOME TAX. 
(a) IN GENERAL.—Subtitle A of the Internal Rev-
enue Code of 1986 is amended by striking chapter 2A. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
SEC. 139. BASIS FOR PURPOSES OF DETERMINING GAIN OR 
LOSS. 
Nothing in the Internal Revenue Code of 1986 shall 
be construed to prevent the Secretary of the Treasury (or 
any designee of the Secretary) from providing that the 
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basis for determining gain or loss (whether on the basis 
of cost or otherwise) is adjusted on the basis of inflation. 
SEC. 140. DEDUCTION FOR QUALIFIED CHARITY CARE. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new section: 
‘‘SEC. 199B. QUALIFIED CHARITY CARE. 
‘‘(a) IN GENERAL.—There shall be allowed as a de-
duction for the taxable year an amount equal to— 
‘‘(1) in the case of a direct primary care physi-
cian, an amount equal to the sum of— 
‘‘(A) the fee (as published on a publicly 
available website of such physician) for physi-
cians’ services that are qualified charity care 
furnished by such taxpayer during such year, 
and 
‘‘(B) for each visit by a patient to such 
physician during which qualified charity care is 
furnished, half of so much of the lowest sub-
scription fee of such physician that is attrib-
utable to a month, and 
‘‘(2) in the case of any other individual, the un-
reimbursed Medicare-based value of qualified charity 
care furnished by such taxpayer during such year. 
‘‘(b) DEFINITIONS.—For purposes of this section: 
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‘‘(1) 
UNREIMBURSED
MEDICARE-BASED 
VALUE.—The term ‘unreimbursed Medicare-based 
value’ means, with respect to physicians’ services, 
the amount payable for such services under the phy-
sician fee schedule established under section 1848 of 
the Social Security Act. 
‘‘(2) QUALIFIED
CHARITY
CARE.—The term 
‘qualified charity care’ means physicians’ services 
that are furnished— 
‘‘(A) without expectation of reimburse-
ment, and 
‘‘(B) to an individual enrolled— 
‘‘(i) under a State plan under title 
XIX of the Social Security Act (or a waiv-
er of such plan), or 
‘‘(ii) under a State child health plan 
under title XXI of the Social Security Act 
(or a waiver of such plan). 
‘‘(3) DIRECT PRIMARY CARE PHYSICIAN.—The 
term ‘direct primary care physician’ means a physi-
cian (as defined in section 1861(r) of the Social Se-
curity Act) who provides primary care— 
‘‘(A) to individuals who have paid a peri-
odic subscription fee, and 
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‘‘(B) in exchange for a fee that is pub-
lished on a publicly available website of such 
physician. 
‘‘(4) PHYSICIANS’ SERVICES.—The term ‘physi-
cians’ services’ has the meaning given such term by 
section 1861(q) of the Social Security Act. 
‘‘(c) LIMITATION.—The amount allowed as a deduc-
tion under subsection (a) for a taxable year shall not ex-
ceed the gross receipts attributable to physicians’ services 
furnished by the taxpayer during the taxable year.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new item: 
‘‘Sec. 199B. Qualified charity care.’’. 
SEC. 141. LIMITATION ON LIABILITY FOR VOLUNTEER 
HEALTH CARE PROFESSIONALS. 
(a) IN GENERAL.—Title II of the Public Health Serv-
ice Act (42 U.S.C. 202 et seq.) is amended by inserting 
after section 224 the following: 
‘‘SEC. 224A. LIMITATION ON LIABILITY FOR VOLUNTEER 
HEALTH CARE PROFESSIONALS. 
‘‘(a) LIMITATION ON LIABILITY.—A physician shall 
not be liable under Federal or State law in any civil action 
for any harm caused by an act or omission of such physi-
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cian, or attending medical personnel supporting such phy-
sician, if such act or omission— 
‘‘(1) occurs in the course of furnishing qualified 
charity care (as such term is defined in section 
199B of the Internal Revenue Code of 1986); and 
‘‘(2) was not grossly negligent. 
‘‘(b) PREEMPTION.—This section preempts the laws 
of a State or any political subdivision of a State to the 
extent that such laws are inconsistent with this section, 
unless such laws provide greater protection from liability 
for a defendant. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) PHYSICIAN.—The term ‘physician’ has the 
meaning given such term by section 1861(r) of the 
Social Security Act. 
‘‘(2) ATTENDING MEDICAL PERSONNEL.—The 
term ‘attending medical personnel’ means an indi-
vidual who is licensed to directly support a physician 
in furnishing medical services.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any claim filed to the extent 
that it is with respect to acts or omissions occurring after 
the date of the enactment of this Act. 
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TITLE II—MEDICARE AND 
MEDICAID REFORMS 
Subtitle A 
SEC. 201. FLEXIBLE BLOCK GRANT OPTION FOR STATES. 
Title XIX of the Social Security Act is amended— 
(1) in section 1903 (42 U.S.C. 1396b)— 
(A) in subsection (a), in the matter before 
paragraph (1), by inserting ‘‘and section 
1903A(a)’’ after ‘‘except as otherwise provided 
in this section’’; and 
(B) in subsection (d)(1), by striking ‘‘to 
which’’ and inserting ‘‘to which, subject to sec-
tion 1903A(a),’’; and 
(2) by inserting after such section 1903 the fol-
lowing new section: 
‘‘SEC. 1903A. FLEXIBLE BLOCK GRANT OPTION FOR STATES. 
‘‘(a) IN GENERAL.—In the case of a State that elects 
the option of applying this section for a 10-fiscal-year pe-
riod (beginning no earlier than fiscal year 2020 and, at 
the State option, for any succeeding 10-fiscal-year period) 
and that has a plan approved by the Secretary under sub-
section (b) to carry out the option for such period— 
‘‘(1) the State shall receive, instead of amounts 
otherwise payable to the State under this title for 
medical assistance for block grant individuals within 
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the applicable block grant category (as defined in 
subsection (f)) for the State during the period in 
which the election is in effect, the amount specified 
in subsection (d); 
‘‘(2) the payment under this section may only 
be used consistent with the State plan under sub-
section (b) for block grant health care assistance (as 
defined in subsection (g)); and 
‘‘(3) with respect to block grant individuals 
within the applicable block grant category for the 
State for which block grant health care assistance is 
made available under this section, such assistance 
shall be instead of medical assistance otherwise pro-
vided to the individual under this title. 
‘‘(b) STATE
PLAN
FOR
ADMINISTERING
BLOCK 
GRANT OPTION.— 
‘‘(1) IN GENERAL.—No payment shall be made 
under this section to a State pursuant to an election 
for a 10-fiscal-year period under subsection (a) un-
less the State has a plan, approved under paragraph 
(2), for such period that specifies— 
‘‘(A) the applicable block grant category 
with respect to which the State will apply the 
option under this section for such period; 
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‘‘(B) the conditions for eligibility of block 
grant individuals within such applicable block 
grant category for block grant health care as-
sistance under the option, which shall be in-
stead of other conditions for eligibility under 
this title, except that in the case of a State that 
has elected the applicable block grant category 
described in— 
‘‘(i) paragraph (1) of subsection (f), 
the plan must provide for eligibility for 
pregnant women and children required to 
be provided medical assistance under sub-
sections (a)(10)(A)(i) and (e)(4) of section 
1902; or 
‘‘(ii) paragraph (2) of subsection (f), 
the plan must provide for eligibility for 
pregnant women required to be provided 
medical 
assistance 
under 
subsection 
(a)(10)(A)(i); and 
‘‘(C) the types of items and services, the 
amount, duration, and scope of such services, 
the cost-sharing with respect to such services, 
and the method for delivery of block grant 
health care assistance under this section, which 
shall be instead of the such types, amount, du-
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ration, and scope, cost-sharing, and methods of 
delivery for medical assistance otherwise re-
quired under this title, except that the plan 
must provide for assistance for— 
‘‘(i) hospital care; 
‘‘(ii) surgical care and treatment; 
‘‘(iii) medical care and treatment; 
‘‘(iv) obstetrical and prenatal care and 
treatment; 
‘‘(v) prescribed drugs, medicines, and 
prosthetic devices; 
‘‘(vi) other medical supplies and serv-
ices; and 
‘‘(vii) health care for children under 
18 years of age. 
‘‘(2) REVIEW
AND
APPROVAL.—A plan de-
scribed in paragraph (1) shall be deemed approved 
by the Secretary unless the Secretary determines, 
within 30 days after the date of the Secretary’s re-
ceipt of the plan, that the plan is incomplete or actu-
arially unsound and, with respect to such plan and 
its implementation under this section, the require-
ments of paragraphs (1), (10)(B), (17), and (23) of 
section 1902(a) shall not apply. 
‘‘(c) AMOUNT OF BLOCK GRANT FUNDS.— 
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‘‘(1) FOR
INITIAL
FISCAL
YEAR.—The block 
grant amount under this subsection for a State for 
the initial fiscal year in the first 10-fiscal-year pe-
riod is equal to an amount determined by the Sec-
retary to equal the per capita spending on the popu-
lation covered by the State plan established in sub-
section (b) of section 1903A. 
‘‘(2) FOR ANY SUBSEQUENT FISCAL YEAR.— 
The block grant amount under this section for a 
State for each succeeding fiscal year (in any 10-fis-
cal-year period) is equal to the block grant amount 
under paragraph (1) (or this paragraph) for the 
State for the previous fiscal year increased by the 
annual increase in the consumer price index for all 
urban consumers (all items; U.S. city average) for 
the fiscal year involved. 
‘‘(3) AVAILABILITY OF ROLLOVER FUNDS.—The 
block grant amount under this subsection for a 
State for a fiscal year shall remain available to the 
State for expenditures under this section for the suc-
ceeding fiscal year but only if an election is in effect 
under this section for the State in such succeeding 
fiscal year. 
‘‘(d) FEDERAL PAYMENT
AND STATE RESPONSI-
BILITY.—The Secretary shall pay to each State with an 
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election in effect under this section for a fiscal year, from 
its block grant amount under subsection (c) available for 
such fiscal year, an amount for each quarter of such fiscal 
year equal to the enhanced FMAP described in the first 
sentence of section 2105(b) of the total amount expended 
under the State plan under this section during such quar-
ter, and the State is responsible for the balance of funds 
to carry out such plan. 
‘‘(e) BLOCK GRANT INDIVIDUAL DEFINED.—In this 
section, the term ‘block grant individual’ means, with re-
spect to a State for a 10-fiscal-year period, an individual 
who is within an applicable block grant category for the 
State and such period. 
‘‘(f) APPLICABLE BLOCK GRANT CATEGORY DE-
FINED.—In this section, the term ‘applicable block grant 
category’ means with respect to a State for a 10-fiscal- 
year period, either of the following as specified by the 
State for such period in its plan under subsection 
(b)(1)(A): 
‘‘(1) ELDERLY, BLIND, DISABLED.—Both of the 
following categories: 
‘‘(A) ELDERLY.—Individuals who are 65 
years of age or older. 
‘‘(B) BLIND AND DISABLED.—Individuals 
(not described in the previous subparagraph) 
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who are eligible for medical assistance under 
this title on the basis of being blind or disabled. 
‘‘(2) ELDERLY, BLIND, DISABLED, AND OTH-
ERS.—All of the following categories: 
‘‘(A) ELDERLY.—Individuals who are 65 
years of age or older. 
‘‘(B) BLIND AND DISABLED.—Individuals 
(not described in the previous subparagraph) 
who are eligible for medical assistance under 
this title on the basis of being blind or disabled. 
‘‘(C) CHILDREN.—Individuals (not de-
scribed in a previous subparagraph) who are 
children under 19 years of age. 
‘‘(D) EXPANSION
ENROLLEES.—Individ-
uals (not described in a previous subparagraph) 
for whom the amounts expended for medical as-
sistance are subject to an increase or change in 
the Federal medical assistance percentage 
under subsection (y) or (z)(2), respectively, of 
section 1905. 
‘‘(E) OTHER NONELDERLY, NONDISABLED, 
NON-EXPANSION ADULTS.—Individuals who are 
not described in any of the previous subpara-
graphs and whose income does not exceed 60 
percent of the poverty line (as defined in section 
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2110(c)(5)) applicable to a family of the size in-
volved. 
‘‘(g) BLOCK GRANT HEALTH CARE ASSISTANCE.— 
In this section, the term ‘block grant health care assist-
ance’ means assistance for health-care-related items and 
medical services for block grant individuals within the ap-
plicable block grant category for the State and 10-fiscal- 
year period involved who are low-income individuals (as 
defined by the State). 
‘‘(h) AUDITING.—As a condition of receiving funds 
under this section, a State shall contract with an inde-
pendent entity to conduct audits of its expenditures made 
with respect to activities funded under this section for 
each fiscal year for which the State elects to apply this 
section to ensure that such funds are used consistent with 
this section and shall make such audits available to the 
Secretary upon the request of the Secretary.’’. 
SEC. 202. MEDICAID ELIGIBILITY DETERMINATIONS. 
(a) STATE FLEXIBILITY TO USE CONTRACTORS TO 
MAKE ELIGIBILITY DETERMINATIONS
ON BEHALF
OF 
STATE.—Section 1902(a)(5) of the Social Security Act 
(42 U.S.C. 1396a(a)(5)) is amended by inserting before 
the semicolon at the end the following: ‘‘, but such deter-
minations of eligibility may be made, at the option of a 
State, under a contract with another State or local agency 
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or a contractor so long as the contract does not provide 
incentives for the agency or contractor to delay eligibility 
determinations or to deny eligibility for individuals other-
wise eligible for medical assistance’’. 
(b) FREQUENCY
OF ELIGIBILITY REDETERMINA-
TIONS.—Section 1902(e)(14) of the Social Security Act 
(42 U.S.C. 1396a(e)(14)) is amended by adding at the 
end the following: 
‘‘(L) FREQUENCY OF ELIGIBILITY REDE-
TERMINATIONS.—Beginning 
on 
October 
1, 
2019, and notwithstanding subparagraph (H), 
in the case of an individual whose eligibility for 
medical assistance under the State plan under 
this title (or a waiver of such plan) is deter-
mined based on the application of modified ad-
justed gross income under subparagraph (A) 
and who is so eligible on the basis of clause 
(i)(VIII), (ii)(XX), or (ii)(XXIII) of subsection 
(a)(10)(A), at the option of the State, the State 
plan may provide that the individual’s eligibility 
shall be redetermined every 6 months (or such 
shorter number of months as the State may 
elect).’’. 
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SEC. 203. LOWERING SAFE HARBOR THRESHOLD WITH RE-
SPECT TO STATE TAXES ON HEALTH CARE 
PROVIDERS. 
Section 1903(w)(4)(C)(ii) of the Social Security Act 
(42 U.S.C. 1396b(w)(4)(C)(ii)) is amended— 
(1) by striking ‘‘of fiscal years beginning’’ and 
inserting ‘‘of fiscal years— 
‘‘(I) beginning’’; and 
(2) by striking ‘‘it appears.’’ and inserting the 
following: ‘‘it appears; 
‘‘(II) beginning on or after January 1, 
2020, and before January 1, 2030, ‘4 percent’ 
shall be substituted for ‘6 percent’ each place it 
appears; 
‘‘(III) beginning on or after January 1, 
2030, and before January 1, 2035, ‘3 percent’ 
shall be substituted for ‘6 percent’ each place it 
appears; 
‘‘(IV) beginning on or after January 1, 
2035, and before January 1, 2040, ‘2 percent’ 
shall be substituted for ‘6 percent’ each place it 
appears; 
‘‘(V) beginning on or after January 1, 
2040, and before January 1, 2045, ‘1 percent’ 
shall be substituted for ‘6 percent’ each place it 
appears; and 
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‘‘(VI) beginning on or after January 1, 
2045, ‘0 percent’ shall be substituted for ‘6 per-
cent’ each place it appears.’’. 
SEC. 204. INCOME LIMITATIONS FOR REFUNDABLE CRED-
ITS FOR COVERAGE UNDER A QUALIFIED 
HEALTH PLAN. 
(a) IN GENERAL.—Subparagraphs (A) and (B) of 
section 36B(c)(1) of the Internal Revenue Code of 1986 
are amended by inserting after ‘‘100 percent’’ each place 
such term appears the following: ‘‘(60 percent in the case 
of an individual enrolled through an Exchange utilized by 
a State that makes the election described in section 1903A 
of the Social Security Act)’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after the date of the enactment of this Act. 
Subtitle B—Medicare 
SEC. 221. OFF-CAMPUS PROVIDER-BASED DEPARTMENT 
MEDICARE SITE NEUTRAL PAYMENT. 
(a) IN GENERAL.—Section 1834 of the Social Secu-
rity Act (42 U.S.C. 1395m) is amended by adding at the 
end the following new subsection: 
‘‘(x) OFF-CAMPUS PROVIDER-BASED DEPARTMENT 
SITE NEUTRAL PAYMENT.— 
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‘‘(1) IN GENERAL.—With respect to items and 
services furnished in an off-campus provider-based 
department, payment under this section for such 
items and services shall be the amount determined 
under the fee schedule under section 1848 for such 
items and services furnished if furnished in a physi-
cian office setting. 
‘‘(2) OFF-CAMPUS
PROVIDER-BASED
DEPART-
MENT.—For purposes of this subsection, the term 
‘off-campus provider-based department’ has such 
meaning as specified by the Secretary.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply with respect to items and serv-
ices furnished on or after January 1, 2021. 
SEC. 222. ELIMINATION OF MEDICARE ELIGIBILITY FOR 
CERTAIN INDIVIDUALS. 
(a) ENROLLMENT PROHIBITION.— 
(1) PART B.—Section 1836 of the Social Secu-
rity Act (42 U.S.C. 1395o) is amended by striking 
the period at the end and inserting ‘‘, except that an 
individual who attains age 65 on or after January 
1, 2030, and is an individual who, upon attaining 
such age, has earned $10,000,000 or more in life-
time wages, shall not be eligible to so enroll.’’. 
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(2) PART
D.—Section 1860D–1(a)(3)(A) of 
such Act (42 U.S.C. 1395w–101(a)(3)(A)) is amend-
ed by striking the period at the end and inserting 
‘‘, excluding an individual who, upon attaining age 
65, has earned $10,000,000 or more in lifetime 
wages.’’. 
(b) MEDIGAP.—Section 1882 of the Social Security 
Act (42 U.S.C. 1395ss) is amended by adding at the end 
the following new subsection: 
‘‘(aa) ADDITIONAL LIMITATION ON NEWLY ELIGI-
BLE BENEFICIARIES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this section, on or after January 1, 
2030, a medicare supplemental policy may not be 
sold or issued to a targeted newly eligible Medicare 
beneficiary. 
‘‘(2) TARGETED
NEWLY
ELIGIBLE
MEDICARE 
BENEFICIARY.—For purposes of this subsection, the 
term ‘targeted newly eligible Medicare beneficiary’ 
means an individual who, upon attaining the age of 
65, has earned $10,000,000 or more in lifetime 
wages.’’. 
SEC. 223. MEDICARE COVERAGE OF BAD DEBT. 
Section 1861(v)(1) of the Social Security Act (42 
U.S.C. 1395(v)(1)) is amended— 
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(1) in subparagraph (T)— 
(A) in clause (iv), by striking ‘‘and’’ at the 
end; 
(B) in clause (v)— 
(i) by striking ‘‘during fiscal year’’ 
and inserting ‘‘during fiscal years’’; 
(ii) by striking ‘‘or a subsequent fiscal 
year’’ and inserting ‘‘through 2020’’; and 
(iii) by striking the period at the end 
and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(vi) for cost reporting periods beginning dur-
ing fiscal year 2021 or a subsequent fiscal year, by 
the percent applicable for cost reporting periods be-
ginning during the previous fiscal year, increased 
(through fiscal year 2024) by 10 percentage 
points.’’; 
(2) in subparagraph (V)— 
(A) in clause (i)— 
(i) in subclause (III), by striking 
‘‘and’’ at the end; 
(ii) in subclause (IV)— 
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(I) by striking ‘‘during fiscal 
year’’ and inserting ‘‘during fiscal 
years 2015 through 2020’’; and 
(II) by striking the period at the 
end and inserting ‘‘; and’’; and 
(iii) by adding at the end the fol-
lowing new subclause: 
‘‘(V) for cost reporting periods beginning 
during fiscal year 2021 or a subsequent fiscal 
year, the percent applicable for cost reporting 
periods beginning during the previous fiscal 
year, increased (through fiscal year 2024) by 
10 percentage points.’’; and 
(B) in clause (ii)— 
(i) in subclause (III), by striking 
‘‘and’’ at the end; and 
(ii) in subclause (IV)— 
(I) by striking ‘‘a subsequent fis-
cal year’’ and inserting ‘‘fiscal years 
2015 through 2020’’; 
(II) by striking the period at the 
end and inserting ‘‘; and’’; and 
(III) by adding at the end the 
following new subclause: 
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‘‘(V) for cost reporting periods beginning 
during fiscal year 2021 or a subsequent fiscal 
year, shall be reduced by the percent applicable 
for cost reporting periods beginning during the 
previous fiscal year, increased (through fiscal 
year 2024) by 10 percentage points.’’; and 
(3) in subparagraph (W)(i)— 
(A) in subclause (II), by striking ‘‘and’’ at 
the end; 
(B) in subclause (III)— 
(i) by striking ‘‘during a subsequent 
fiscal year’’ and inserting ‘‘during fiscal 
years 2015 through 2020’’; and 
(ii) by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subclause: 
‘‘(IV) for cost reporting periods beginning dur-
ing fiscal year 2021 or a subsequent fiscal year, by 
the percent applicable for cost reporting periods be-
ginning during the previous fiscal year, increased 
(through fiscal year 2024) by 10 percentage 
points.’’. 
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Subtitle C—Medical Malpractice 
Reform 
SEC. 231. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 
(a) STATUTE OF LIMITATIONS.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the time for the commencement of a 
health care lawsuit shall be, whichever occurs first of 
the following: 
(A) Three years after the date of the oc-
currence of the breach or tort. 
(B) Three years after the date the medical 
or health care treatment that is the subject of 
the claim is completed. 
(C) One year after the claimant discovers, 
or through the use of reasonable diligence 
should have discovered, the injury. 
(2) TOLLING.—In no event shall the time for 
commencement of a health care lawsuit exceed 3 
years after the date of the occurrence of the breach 
or tort or 3 years after the date the medical or 
health care treatment that is the subject of the claim 
is completed (whichever occurs first) unless tolled 
for any of the following— 
(A) upon proof of fraud; 
(B) intentional concealment; or 
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(C) the presence of a foreign body, which 
has no therapeutic or diagnostic purpose or ef-
fect, in the person of the injured person. 
(3) ACTIONS BY A MINOR.—Actions by a minor 
shall be commenced within 3 years after the date of 
the occurrence of the breach or tort or 3 years after 
the date of the medical or health care treatment that 
is the subject of the claim is completed (whichever 
occurs first) except that actions by a minor under 
the full age of 6 years shall be commenced within 3 
years after the date of the occurrence of the breach 
or tort, 3 years after the date of the medical or 
health care treatment that is the subject of the claim 
is completed, or 1 year after the injury is discovered, 
or through the use of reasonable diligence should 
have been discovered, or prior to the minor’s 8th 
birthday, whichever provides a longer period. Such 
time limitation shall be tolled for minors for any pe-
riod during which a parent or guardian and a health 
care provider have committed fraud or collusion in 
the failure to bring an action on behalf of the in-
jured minor. 
(b) STATE FLEXIBILITY.—No provision of subsection 
(a) shall be construed to preempt any State law (whether 
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effective before, on, or after the date of the enactment of 
this Act) that— 
(1) specifies a time period of less than 3 years 
after the date of injury or less than 1 year after the 
claimant discovers, or through the use of reasonable 
diligence should have discovered, the injury, for the 
filing of a health care lawsuit; 
(2) that specifies a different time period for the 
filing of lawsuits by a minor; 
(3) that triggers the time period based on the 
date of the alleged negligence; or 
(4) establishes a statute of repose for the filing 
of a health care lawsuit. 
SEC. 232. COMPENSATING PATIENT INJURY. 
(a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL 
ECONOMIC LOSSES IN HEALTH CARE LAWSUITS.—In any 
health care lawsuit, nothing in this Act shall limit a claim-
ant’s recovery of the full amount of the available economic 
damages, notwithstanding the limitation in subsection (b). 
(b) ADDITIONAL NONECONOMIC DAMAGES.—In any 
health care lawsuit, the amount of noneconomic damages, 
if available, shall not exceed $250,000, regardless of the 
number of parties against whom the action is brought or 
the number of separate claims or actions brought with re-
spect to the same injury. 
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(c) NO DISCOUNT OF AWARD FOR NONECONOMIC 
DAMAGES.—For purposes of applying the limitation in 
subsection (b), future noneconomic damages shall not be 
discounted to present value. The jury shall not be in-
formed about the maximum award for noneconomic dam-
ages. An award for noneconomic damages in excess of 
$250,000 shall be reduced either before the entry of judg-
ment, or by amendment of the judgment after entry of 
judgment, and such reduction shall be made before ac-
counting for any other reduction in damages required by 
law. If separate awards are rendered for past and future 
noneconomic damages and the combined awards exceed 
$250,000, the future noneconomic damages shall be re-
duced first. 
(d) FAIR SHARE RULE.—In any health care lawsuit, 
each party shall be liable for that party’s several share 
of any damages only and not for the share of any other 
person. Each party shall be liable only for the amount of 
damages allocated to such party in direct proportion to 
such party’s percentage of responsibility. Whenever a 
judgment of liability is rendered as to any party, a sepa-
rate judgment shall be rendered against each such party 
for the amount allocated to such party. For purposes of 
this section, the trier of fact shall determine the propor-
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medical products, such as past and future medical 
expenses, loss of past and future earnings, cost of 
obtaining domestic services, loss of employment, and 
loss of business or employment opportunities, unless 
otherwise defined under applicable State law. In no 
circumstances shall damages for health care services 
or medical products exceed the amount actually paid 
or incurred by or on behalf of the claimant. 
(6) FUTURE
DAMAGES.—The term ‘‘future 
damages’’ means any damages that are incurred 
after the date of judgment, settlement, or other reso-
lution (including mediation, or any other form of al-
ternative dispute resolution). 
(7) 
HEALTH
CARE
LAWSUIT.—The 
term 
‘‘health care lawsuit’’ means any health care liability 
claim concerning the provision of goods or services 
for which coverage was provided in whole or in part 
via a Federal program, subsidy or tax benefit, or 
any health care liability action concerning the provi-
sion of goods or services for which coverage was pro-
vided in whole or in part via a Federal program, 
subsidy or tax benefit, brought in a State or Federal 
court or pursuant to an alternative dispute resolu-
tion system, against a health care provider regard-
less of the theory of liability on which the claim is 
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