I 
113TH CONGRESS 
1ST SESSION H. R. 3121 
To repeal the Patient Protection and Affordable Care Act and related rec-
onciliation provisions, to promote patient-centered health care, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 18, 2013 
Mr. ROE of Tennessee (for himself, Mr. SCALISE, Mrs. BLACKBURN, Mrs. 
ELLMERS, Mr. FLEMING, Mr. GOSAR, Mr. PRICE of Georgia, Mr. 
ROKITA, Mr. FLORES, Mr. PEARCE, Mrs. HARTZLER, Mr. WALBERG, Mr. 
CULBERSON, Mr. WENSTRUP, Mr. MULVANEY, Mr. ROSS, Mr. STEWART, 
Mr. PALAZZO, Mr. LAMALFA, Mr. MCKINLEY, Mr. STOCKMAN, Mr. 
BUCSHON, Mr. COTTON, Mr. JORDAN, and Mr. SALMON) introduced the 
following bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committees on Ways and Means, Education 
and the Workforce, the Judiciary, Natural Resources, House Administra-
tion, Appropriations, and Rules, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To repeal the Patient Protection and Affordable Care Act 
and related reconciliation provisions, to promote patient- 
centered health care, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘American Health Care Reform Act of 2013’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—REPEAL OF OBAMACARE 
Sec. 101. Repeal of PPACA and health care-related provisions in the Health 
Care and Education Reconciliation Act of 2010. 
TITLE II—INCREASING ACCESS TO PORTABLE, AFFORDABLE 
HEALTH INSURANCE 
Sec. 200. Amendment of 1986 Code. 
Subtitle A—Standard Deduction for Health Insurance 
Sec. 201. Standard deduction for health insurance. 
Sec. 202. Changes to existing tax preferences for medical coverage and costs 
for individuals eligible for standard deduction for health insur-
ance. 
Sec. 203. Exclusion of standard deduction for health insurance from employ-
ment taxes. 
Sec. 204. Information reporting. 
Sec. 205. Election to disregard inclusion of contributions by employer to acci-
dent or health plan. 
Subtitle B—Enhancement of Health Savings Accounts 
Sec. 221. Allow both spouses to make catch-up contributions to the same HSA 
account. 
Sec. 222. Provisions relating to Medicare. 
Sec. 223. Individuals eligible for veterans benefits for a service-connected dis-
ability. 
Sec. 224. Individuals eligible for Indian Health Service assistance. 
Sec. 225. Individuals eligible for TRICARE coverage. 
Sec. 226. FSA and HRA interaction with HSAs. 
Sec. 227. Purchase of health insurance from HSA account. 
Sec. 228. Special rule for certain medical expenses incurred before establish-
ment of account. 
Sec. 229. Preventive care prescription drug clarification. 
Sec. 230. Equivalent bankruptcy protections for health savings accounts as re-
tirement funds. 
Sec. 231. Administrative error correction before due date of return. 
Sec. 232. Reauthorization of Medicaid health opportunity accounts. 
Sec. 233. Members of health care sharing ministries eligible to establish health 
savings accounts. 
Sec. 234. High deductible health plans renamed HSA qualified plans. 
Sec. 235. Treatment of direct primary care service arrangements. 
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Sec. 236. Certain exercise equipment and physical fitness programs treated as 
medical care. 
Sec. 237. Certain nutritional and dietary supplements to be treated as medical 
care. 
Sec. 238. Certain provider fees to be treated as medical care. 
Sec. 239. Increase the maximum contribution limit to an HSA to match de-
ductible and out-of-pocket expense limitation. 
Sec. 240. Child health savings account. 
Sec. 241. Distributions for abortion expenses from health savings accounts in-
cluded in gross income. 
Subtitle C—Enhanced Wellness Incentives 
Sec. 251. Providing financial incentives for treatment compliance. 
TITLE III—IMPROVING ACCESS TO INSURANCE FOR VULNERABLE 
AMERICANS 
Subtitle A—Eliminating Barriers to Insurance Coverage 
Sec. 301. Elimination of certain requirements for guaranteed availability in in-
dividual market. 
Subtitle B—Ensuring Coverage for Individuals With Preexisting Conditions 
and Multiple Health Care Needs Through High Risk Pools 
Sec. 311. Improvement of high risk pools. 
TITLE IV—ENCOURAGING A MORE COMPETITIVE HEALTH CARE 
MARKET 
Subtitle A—Expanding Patient Choice 
Sec. 401. Cooperative governing of individual health insurance coverage. 
Subtitle B—McCarran-Ferguson Reform 
Sec. 411. Restoring the application of antitrust laws to health sector insurers. 
Subtitle C—Medicare Price Transparency 
Sec. 421. Public availability of Medicare claims data. 
Subtitle D—State Transparency Portals 
Sec. 431. Providing information on health coverage options and health care 
providers. 
Subtitle E—Protecting the Doctor-Patient Relationship 
Sec. 441. Rule of construction. 
Sec. 442. Repeal of Federal Coordinating Council for Comparative Effective-
ness Research. 
Subtitle F—Association Health Plans 
Sec. 451. Rules governing association health plans. 
Sec. 452. Clarification of treatment of single employer arrangements. 
Sec. 453. Enforcement provisions relating to association health plans. 
Sec. 454. Cooperation between Federal and State authorities. 
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Sec. 455. Effective date and transitional and other rules. 
TITLE V—REFORMING MEDICAL LIABILITY LAW 
Sec. 501. Encouraging speedy resolution of claims. 
Sec. 502. Compensating patient injury. 
Sec. 503. Maximizing patient recovery. 
Sec. 504. Punitive damages. 
Sec. 505. Authorization of payment of future damages to claimants in health 
care lawsuits. 
Sec. 506. Definitions. 
Sec. 507. Effect on other laws. 
Sec. 508. State flexibility and protection of States’ rights. 
Sec. 509. Applicability; effective date. 
TITLE VI—RESPECTING HUMAN LIFE 
Sec. 601. Special rules regarding abortion. 
TITLE I—REPEAL OF 
OBAMACARE 
SEC. 101. REPEAL OF PPACA AND HEALTH CARE-RELATED 
PROVISIONS IN THE HEALTH CARE AND EDU-
CATION RECONCILIATION ACT OF 2010. 
(a) PPACA.—Effective as of the enactment of the 
Patient Protection and Affordable Care Act (Public Law 
111–148), such Act is repealed, and the provisions of law 
amended or repealed by such Act are restored or revived 
as if such Act had not been enacted. 
(b) HEALTH CARE-RELATED PROVISIONS IN THE 
HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 
2010.—Effective as of the enactment of the Health Care 
and Education Reconciliation Act of 2010 (Public Law 
111–152), title I and subtitle B of title II of such Act 
are repealed, and the provisions of law amended or re-
pealed by such title or subtitle, respectively, are restored 
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or revived as if such title and subtitle had not been en-
acted. 
TITLE II—INCREASING ACCESS 
TO PORTABLE, AFFORDABLE 
HEALTH INSURANCE 
SEC. 200. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
Subtitle A—Standard Deduction 
for Health Insurance 
SEC. 201. STANDARD DEDUCTION FOR HEALTH INSUR-
ANCE. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 is amended by redesignating section 224 as section 
225 and by inserting after section 223 the following new 
section: 
‘‘SEC. 224. STANDARD DEDUCTION FOR HEALTH INSUR-
ANCE. 
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual, there shall be allowed as a deduction to the tax-
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payer for the taxable year the standard deduction for 
health insurance. 
‘‘(b) STANDARD DEDUCTION FOR HEALTH INSUR-
ANCE.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘standard deduc-
tion for health insurance’ means the sum of the 
monthly limitations for months during the taxable 
year. 
‘‘(2) MONTHLY LIMITATION.— 
‘‘(A) IN GENERAL.—The monthly limita-
tion for any month is 1⁄12 of— 
‘‘(i) $20,000, in the case of a tax-
payer who is allowed a deduction under 
section 151 for more than one individual 
who for such month is an eligible indi-
vidual, and 
‘‘(ii) $7,500, in the case of a taxpayer 
who is allowed a deduction under section 
151 for only one individual who for such 
month is an eligible individual. 
‘‘(B) COST-OF-LIVING ADJUSTMENT.— 
‘‘(i) IN GENERAL.—In the case of tax-
able years beginning in calendar years 
after the first calendar year to which this 
section applies, the dollar amounts under 
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subparagraph (A) shall be increased by an 
amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year in which such 
taxable year begins, determined by 
substituting ‘the calendar year pre-
ceding the first calendar year to which 
section 224 applies’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
‘‘(ii) ROUNDING.—If any increase 
under clause (i) is not a multiple of $50, 
such increase shall be rounded to the near-
est multiple of $50. 
‘‘(3) YEARLY
LIMITATION.—The amount al-
lowed as a deduction under subsection (a) for any 
taxable year shall not exceed the taxpayer’s earned 
income (as defined in section 32(c)(2)) for such tax-
able year. 
‘‘(c) LIMITATIONS AND SPECIAL RULES RELATING 
TO STANDARD DEDUCTION.—For purposes of this sec-
tion— 
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‘‘(1) SPECIAL RULE FOR MARRIED INDIVIDUALS 
FILING SEPARATELY.—In the case of a married indi-
vidual who files a separate return for the taxable 
year, the deduction allowed under subsection (a) 
shall be equal to one-half of the amount which would 
otherwise be determined under subsection (a) if such 
individual filed a joint return for the taxable year. 
‘‘(2) DENIAL
OF
DEDUCTION
TO
DEPEND-
ENTS.—No deduction shall be allowed under this 
section to any individual with respect to whom a de-
duction under section 151 is allowable to another 
taxpayer for a taxable year beginning in the cal-
endar year in which such individual’s taxable year 
begins. 
‘‘(3) COORDINATION WITH OTHER HEALTH TAX 
INCENTIVES.— 
‘‘(A) DENIAL OF DEDUCTION IF HEALTH 
INSURANCE COSTS CREDIT ALLOWED.—No de-
duction shall be allowed under this section to 
any taxpayer if a credit is allowed to the tax-
payer under section 35 for the taxable year. 
‘‘(B) REDUCTION
FOR
INSURANCE
PUR-
CHASED
WITH
MSA
OR
HSA
FUNDS.—The 
amount allowed as a deduction under subsection 
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(a) for the taxable year shall be reduced by the 
aggregate amount— 
‘‘(i) paid during the taxable year from 
an 
Archer 
MSA 
to 
which 
section 
220(d)(2)(B)(ii) (other than subclause (II) 
thereof) applies, and 
‘‘(ii) paid during the taxable year 
from a health savings account to which 
section 223(d)(2)(C) (other than clause (ii) 
thereof) applies. 
‘‘(4) SPECIAL RULE FOR DIVORCED PARENTS, 
ETC.—Notwithstanding subsection (b)(1), an indi-
vidual who is a child may be taken into account on 
the return of the parent other than the parent for 
whom a deduction with respect to the child is al-
lowed under section 151 for a taxable year beginning 
in a calendar year if— 
‘‘(A) the parent for whom the deduction 
under section 151 is allowed for a taxable year 
beginning in such calendar year signs a written 
declaration (in such manner and form as the 
Secretary may by regulations prescribe) that 
such parent will not claim the deduction allow-
able under this section with respect to the child 
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for taxable years beginning in such calendar 
year, and 
‘‘(B) the parent for whom the deduction 
under section 151 is not allowed attaches such 
written declaration to the parent’s return for 
the taxable year beginning in such calendar 
year. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
section— 
‘‘(1) ELIGIBLE INDIVIDUAL.— 
‘‘(A) IN GENERAL.—The term ‘eligible in-
dividual’ means, with respect to any month, an 
individual who is covered under a qualified 
health plan as of the 1st day of such month. 
‘‘(B) COVERAGE UNDER MEDICARE, MED-
ICAID, SCHIP, TRICARE, AND GRANDFATHERED 
EMPLOYER COVERAGE.—The term ‘eligible indi-
vidual’ shall not include any individual who for 
any month is— 
‘‘(i) entitled to benefits under part A 
of title XVIII of the Social Security Act or 
enrolled under part B of such title, 
‘‘(ii) enrolled in the program under 
title XIX or XXI of such Act (other than 
under section 1928 of such Act), 
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‘‘(iii) receiving benefits (other than 
under continuation coverage under section 
4980B) which constitute medical care from 
an employer— 
‘‘(I) from whom such individual 
is separated from service at the time 
of receipt of such benefits, and 
‘‘(II) after such separation, if 
such benefits began before January 1, 
2015, unless such individual is also 
covered by a qualified health plan as 
of the 1st day of such month, or 
‘‘(iv) entitled to receive benefits under 
chapter 55 of title 10, United States Code. 
‘‘(C) IDENTIFICATION
REQUIREMENTS.— 
The term ‘eligible individual’ shall not include 
any individual for any month unless the policy 
number associated with coverage under the 
qualified health plan and the TIN of each eligi-
ble individual covered under such coverage for 
such month is included on the return for the 
taxable year in which such month occurs. 
‘‘(2) QUALIFIED HEALTH PLAN.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
health plan’ means a health plan (within the 
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meaning of section 223(c)(2), without regard to 
subparagraph (A)(i) thereof) which, under regu-
lations prescribed by the Secretary, meets the 
following requirements: 
‘‘(i) The plan has coverage for inpa-
tient and outpatient care, emergency bene-
fits, and physician care. 
‘‘(ii) The plan has coverage which 
meaningfully limits individual economic ex-
posure to extraordinary medical expenses 
‘‘(B) EXCLUSION
OF
CERTAIN
PLANS.— 
The term ‘qualified health plan’ does not in-
clude— 
‘‘(i) a health plan if substantially all 
of its coverage is coverage described in sec-
tion 223(c)(1)(B), 
‘‘(ii) any program or benefits referred 
to in clause (i), (ii), or (iii) of paragraph 
(1)(B), and 
‘‘(iii) a medicare supplemental policy 
(as defined in section 1882 of the Social 
Security Act). 
‘‘(e) REGULATIONS.—The Secretary may prescribe 
such regulations as may be necessary to carry out this 
section.’’. 
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(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
of section 62 is amended by inserting before the last sen-
tence at the end the following new paragraph: 
‘‘(22) STANDARD DEDUCTION FOR HEALTH IN-
SURANCE.—The deduction allowed by section 224.’’. 
(c) ELECTION TO TAKE HEALTH INSURANCE COSTS 
CREDIT.—Section 35(g) is amended by redesignating the 
paragraph added by section 1899E(a) of the TAA Health 
Coverage Improvement Act of 2009, the paragraph added 
by section 3001(a)(14)(A) of the American Recovery and 
Reinvestment Act of 2009, and the last paragraph thereof 
(relating to regulations) as paragraphs (10), (11), and 
(12), respectively, and by inserting after paragraph (8) the 
following new paragraph: 
‘‘(9) ELECTION NOT TO CLAIM CREDIT.—This 
section shall not apply to a taxpayer for any taxable 
year if such taxpayer elects to have this section not 
apply for such taxable year.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 is amended by 
striking the item relating to section 224 and adding at 
the end the following new items: 
‘‘Sec. 224. Standard deduction for health insurance. 
‘‘Sec. 225. Cross reference.’’. 
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(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
SEC. 202. CHANGES TO EXISTING TAX PREFERENCES FOR 
MEDICAL COVERAGE AND COSTS FOR INDI-
VIDUALS ELIGIBLE FOR STANDARD DEDUC-
TION FOR HEALTH INSURANCE. 
(a) EXCLUSION FOR CONTRIBUTIONS BY EMPLOYER 
TO ACCIDENT AND HEALTH PLANS.— 
(1) IN GENERAL.—Section 106 is amended by 
adding at the end the following new subsection: 
‘‘(g) SUBSECTIONS (a) AND (c) APPLY ONLY TO IN-
DIVIDUALS COVERED BY MEDICARE, MEDICAID, SCHIP, 
TRICARE, OR GRANDFATHERED EMPLOYER PLANS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), subsections (a) and (c) shall not apply for 
any taxable year with respect to which a deduction 
under section 224 is allowable. 
‘‘(2) EXCEPTION
FOR
INDIVIDUALS
COVERED 
BY
MEDICARE, 
MEDICAID, 
SCHIP, 
OR
GRAND-
FATHERED EMPLOYER PLANS.—Paragraph (1) shall 
not apply to an individual for any taxable year if 
such individual is not an eligible individual (as de-
fined in section 224(d)(1)) for any month during 
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such taxable year by reason of coverage described in 
section 224(d)(1)(B).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 106(b)(1) is amended— 
(i) by inserting ‘‘gross income does 
not include’’ before ‘‘amounts contrib-
uted’’, and 
(ii) by striking ‘‘shall be treated as 
employer-provided coverage for medical ex-
penses under an accident or health plan’’. 
(B) Section 106(d)(1) is amended— 
(i) by inserting ‘‘gross income does 
not include’’ before ‘‘amounts contrib-
uted’’, and 
(ii) by striking ‘‘shall be treated as 
employer-provided coverage for medical ex-
penses under an accident or health plan’’. 
(b) TERMINATION OF DEDUCTION FOR HEALTH IN-
SURANCE COSTS
OF SELF-EMPLOYED INDIVIDUALS.— 
Subsection (l) of section 162 is amended by adding at the 
end the following new paragraph: 
‘‘(6) TERMINATION.—This subsection shall not 
apply to taxable years with respect to which a deduc-
tion under section 224 is allowable.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
SEC. 203. EXCLUSION OF STANDARD DEDUCTION FOR 
HEALTH INSURANCE FROM EMPLOYMENT 
TAXES. 
(a) IN GENERAL.—Chapter 25 is amended by adding 
at the end the following new section: 
‘‘SEC. 3511. EXCLUSION OF STANDARD DEDUCTION FROM 
EMPLOYMENT TAXES. 
‘‘(a) IN GENERAL.—For purposes of chapters 21, 22, 
and 23, each of the following amounts for any period (de-
termined without regard to this section) shall be reduced 
by the portion of the standard deduction for health insur-
ance (as defined in section 224) allocable to the period: 
‘‘(1) The amount of wages determined under 
section 3121(a). 
‘‘(2) The amount of compensation determined 
under section 3231(e). 
‘‘(3) The amount of wages determined under 
section 3306(b). 
‘‘(b) DETERMINATION
OF STANDARD DEDUCTION 
ALLOCABLE TO A PERIOD.—For purposes of subsection 
(a)— 
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‘‘(1) IN GENERAL.—The determination of the 
portion of the standard deduction for health insur-
ance allocable to a period shall be made on the basis 
of a qualified certificate of eligible coverage fur-
nished by the employee to the employer. 
‘‘(2) QUALIFIED
CERTIFICATE
OF
ELIGIBLE 
COVERAGE.—The term ‘qualified certificate of eligi-
ble coverage’ means a statement of eligibility for the 
deduction allowable under section 224 which con-
tains such information, is in such form, and is pro-
vided at such times, as the Secretary may prescribe. 
‘‘(3) ONLY 1 CERTIFICATE IN EFFECT AT A 
TIME.—Except as provided by the Secretary, an em-
ployee may have only 1 qualified certificate of eligi-
ble coverage in effect for any period. 
‘‘(4) ELECTION.—An employee may elect not to 
have this section apply for any period for purposes 
of chapter 21 or 22. 
‘‘(c) RECONCILIATION OF ERRONEOUS PAYMENTS TO 
BE MADE AT EMPLOYEE LEVEL.— 
‘‘(1) IN GENERAL.—If the application of this 
subsection results in an incorrect amount being 
treated as wages or compensation for purposes of 
chapter 21, 22, or 23, whichever is applicable, with 
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respect to any employee for 1 or more periods end-
ing within a taxable year of the employee— 
‘‘(A) in the case of an aggregate overpay-
ment of the taxes imposed by any such chapter 
for all such periods, there shall be allowed as a 
credit against the tax imposed by chapter 1 for 
such taxable year on such employee an amount 
equal to the amount of such overpayment, and 
‘‘(B) in the case of an aggregate under-
payment of the taxes imposed by any such 
chapter for all such periods, the employee shall 
be liable for payment of the entire amount of 
such underpayment. 
‘‘(2) CREDITS TREATED AS REFUNDABLE.—For 
purposes of this title, any credit determined under 
paragraph (1)(A) or subsection (d)(2) shall be treat-
ed as if it were a credit allowed under subpart C of 
part IV of subchapter A of chapter 1. 
‘‘(3) RULES FOR REPORTING AND COLLECTION 
OF TAX.—Any tax required to be paid by an em-
ployee under paragraph (1)(B) shall be included 
with the employee’s return of Federal income tax for 
the taxable year. 
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‘‘(4) SECRETARIAL AUTHORITY.—The Secretary 
shall prescribe such rules as may be necessary to 
carry out the provisions of this subsection.’’. 
(b) SELF-EMPLOYMENT INCOME.—Section 1402 is 
amended by adding at the end the following: 
‘‘(m) STANDARD DEDUCTION FOR HEALTH INSUR-
ANCE.—For purposes of this chapter— 
‘‘(1) IN
GENERAL.—The self-employment in-
come of a taxpayer for any period (determined with-
out regard to this subsection) shall be reduced by 
the excess (if any) of— 
‘‘(A) the portion of the standard deduction 
for health insurance (as defined in section 224) 
allocable to the period, over 
‘‘(B) the amount of any reduction in wages 
or compensation for such period under section 
3511. 
‘‘(2) DETERMINATION
OF
STANDARD
DEDUC-
TION ALLOCABLE TO A PERIOD.—For purposes of 
paragraph (1), the portion of the standard deduction 
allocable to any period shall be determined in a man-
ner similar to the manner under section 3511.’’. 
(c) CONFORMING AMENDMENTS.— 
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(1) Section 3121(a)(2) is amended by inserting 
‘‘which is excludable from gross income under sec-
tion 105 or 106’’ after ‘‘such payment)’’. 
(2) Subsection (a) of section 209 of the Social 
Security Act (42 U.S.C. 409) is amended by striking 
‘‘or’’ at the end of paragraph (18), by striking the 
period at the end of paragraph (19) and inserting ‘‘; 
or’’, and by inserting after paragraph (19) the fol-
lowing new paragraph: 
‘‘(20) any amount excluded from wages under 
section 3511(a) of the Internal Revenue Code of 
1986 (relating to exclusion of standard deduction 
from employment taxes).’’. 
(3) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘, or the credit 
under section 3511(c)(2) of such Code’’ before the 
period at the end. 
(4) Section 209(k)(2) of the Social Security Act 
(42 U.S.C. 409(k)(2)) is amended by redesignating 
subparagraphs (C) and (D) as subparagraphs (D) 
and (E), respectively, and by inserting after sub-
paragraph (B) the following new subparagraph: 
‘‘(C) by disregarding the exclusion from 
wages in subsection (a)(20),’’. 
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(5) The table of sections for chapter 25 is 
amended by adding at the end the following new 
item: 
‘‘Sec. 3511. Exclusion of standard deduction from employment taxes.’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to remuneration paid or accrued for peri-
ods on or after December 31, 2014. 
(2) RECONCILIATION AND SELF-EMPLOYED.— 
Sections 3511(c) and (d)(2) of the Internal Revenue 
Code of 1986 (as added by subsection (a)), and the 
amendments made by subsection (b), shall apply to 
taxable years beginning after December 31, 2014. 
SEC. 204. INFORMATION REPORTING. 
(a) HEALTH PLAN PROVIDERS.—Subpart B of part 
III of subchapter A of chapter 61 is amended by adding 
at the end the following new section: 
‘‘SEC. 6050X. COVERAGE UNDER QUALIFIED HEALTH PLAN. 
‘‘(a) IN GENERAL.—Every person providing coverage 
under a qualified health plan (as defined in section 
224(d)(2)) during a calendar year shall, on or before Jan-
uary 31 of the succeeding year, make a return described 
in subsection (b) with respect to each individual who is 
covered by such person under a qualified health plan for 
any month during the calendar year. 
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‘‘(b) RETURN.—A return is described in this sub-
section if such return— 
‘‘(1) is in such form as the Secretary pre-
scribes, and 
‘‘(2) contains— 
‘‘(A) the name of the person providing cov-
erage under the qualified health plan, 
‘‘(B) the name, address, and TIN of the 
individual covered by the plan, 
‘‘(C) if such individual is the owner of the 
policy under which such plan is provided, the 
name, address, and TIN of each other indi-
vidual covered by such policy and the relation-
ship of each such individual to such owner, and 
‘‘(D) the specific months of the year for 
which each individual referred to in subpara-
graph (B) is, as of the first day of each such 
month, covered by such plan. 
‘‘(c) STATEMENT TO BE FURNISHED WITH RE-
SPECT TO WHOM INFORMATION IS REQUIRED.—Every 
person required to make a return under subsection (a) 
shall furnish to each individual whose name is required 
to be set forth in such return under subsection (b)(2)(A) 
a written statement showing— 
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‘‘(1) the name, address, and phone number of 
the information contact of the person required to 
make such return, and 
‘‘(2) the information described in subsection 
(b)(2). 
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the 
year following the calendar year for which the return 
under subsection (a) was required to be made.’’. 
(b) EMPLOYERS.—Subsection (a) of section 6051 is 
amended by striking ‘‘and’’ at the end of paragraph (12), 
by striking the period at the end of paragraph (13) and 
inserting ‘‘, and’’, and by inserting after paragraph (13) 
the following new paragraph: 
‘‘(14) the value (determined under section 
4980B(f)(4)) of employer-provided coverage for each 
month under an accident or health plan and the cat-
egory of such coverage for purposes of section 
6116.’’. 
(c) APPLICATION TO RETIREES.—Subsection (a) of 
section 6051 is amended by adding at the end the fol-
lowing: ‘‘In the case of a retiree, this section shall (to the 
extent established by the Secretary by regulation) apply 
only with respect to paragraph (14).’’. 
(d) ASSESSABLE PENALTIES.— 
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(1) Subparagraph (B) of section 6724(d)(1) is 
amended by striking ‘‘or’’ at the end of clause 
(xxiv), by striking ‘‘and’’ at the end of clause (xxv) 
and inserting ‘‘or’’, and by adding at the end the fol-
lowing new clause: 
‘‘(xxvi) section 6050X (relating to re-
turns relating to payments for qualified 
health insurance), and’’. 
(2) Paragraph (2) of section 6724(d) is amend-
ed by striking ‘‘or’’ at the end of subparagraph 
(GG), by striking the period at the end of subpara-
graph (HH) and inserting ‘‘, or’’ and by adding at 
the end the following new subparagraph: 
‘‘(II) section 6050X(d) (relating to returns 
relating to payments for qualified health insur-
ance).’’. 
(e) CLERICAL AMENDMENT.—The table of sections 
for such subpart B is amended by adding at the end the 
following new item: 
‘‘Sec. 6050X. Coverage under qualified health plan.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to years beginning after December 
31, 2014. 
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SEC. 205. ELECTION TO DISREGARD INCLUSION OF CON-
TRIBUTIONS BY EMPLOYER TO ACCIDENT OR 
HEALTH PLAN. 
(a) IN GENERAL.—Subparagraph (B) of section 
32(c)(2) is amended by striking ‘‘and’’ at the end of clause 
(v), by striking the period at the end of clause (vi) and 
inserting ‘‘, and’’, and by adding at the end the following 
new clause: 
‘‘(vii) a taxpayer may elect to exclude 
from earned income amounts that would 
have been excluded from gross income 
under section 106 but for subsection (g) 
thereof.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to taxable years beginning De-
cember 31, 2014. 
Subtitle B—Enhancement of Health 
Savings Accounts 
SEC. 221. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON-
TRIBUTIONS TO THE SAME HSA ACCOUNT. 
(a) IN GENERAL.—Paragraph (3) of section 223(b) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(C) 
SPECIAL
RULE
WHERE
BOTH 
SPOUSES ARE ELIGIBLE INDIVIDUALS WITH 1 
ACCOUNT.—If— 
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‘‘(i) an individual and the individual’s 
spouse have both attained age 55 before 
the close of the taxable year, and 
‘‘(ii) the spouse is not an account ben-
eficiary of a health savings account as of 
the close of such year, 
the additional contribution amount shall be 200 
percent of the amount otherwise determined 
under subparagraph (B).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 222. PROVISIONS RELATING TO MEDICARE. 
(a) INDIVIDUALS OVER AGE 65 ONLY ENROLLED IN 
MEDICARE PART A.—Paragraph (7) of section 223(b) is 
amended by adding at the end the following: ‘‘This para-
graph shall not apply to any individual during any period 
for which the individual’s only entitlement to such benefits 
is an entitlement to hospital insurance benefits under part 
A of title XVIII of such Act pursuant to an enrollment 
for such hospital insurance benefits under section 
226(a)(1) of such Act.’’. 
(b) MEDICARE BENEFICIARIES PARTICIPATING
IN 
MEDICARE ADVANTAGE MSA MAY CONTRIBUTE THEIR 
OWN MONEY TO THEIR MSA.— 
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(1) IN
GENERAL.—Subsection (b) of section 
138 is amended by striking paragraph (2) and by re-
designating paragraphs (3) and (4) as paragraphs 
(2) and (3), respectively. 
(2) CONFORMING AMENDMENT.—Paragraph (4) 
of section 138(c) is amended by striking ‘‘and para-
graph (2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 223. INDIVIDUALS ELIGIBLE FOR VETERANS BENE-
FITS 
FOR 
A 
SERVICE-CONNECTED 
DIS-
ABILITY. 
(a) IN GENERAL.—Paragraph (1) of section 223(c) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI-
GIBLE
FOR
CERTAIN
VETERANS
BENEFITS.— 
For purposes of subparagraph (A)(ii), an indi-
vidual shall not be treated as covered under a 
health plan described in such subparagraph 
merely because the individual receives periodic 
hospital care or medical services for a service- 
connected disability under any law administered 
by the Secretary of Veterans Affairs but only if 
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the individual is not eligible to receive such care 
or services for any condition other than a serv-
ice-connected disability.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 224. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH 
SERVICE ASSISTANCE. 
(a) IN GENERAL.—Paragraph (1) of section 223(c), 
as amended by this Act, is amended by adding at the end 
the following new subparagraph: 
‘‘(D) SPECIAL RULE FOR INDIVIDUALS EL-
IGIBLE
FOR
ASSISTANCE
UNDER
INDIAN 
HEALTH SERVICE PROGRAMS.—For purposes of 
subparagraph (A)(ii), an individual shall not be 
treated as covered under a health plan de-
scribed in such subparagraph merely because 
the individual receives hospital care or medical 
services under a medical care program of the 
Indian Health Service or of a tribal organiza-
tion.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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SEC. 225. INDIVIDUALS ELIGIBLE FOR TRICARE COVERAGE. 
(a) IN GENERAL.—Paragraph (1) of section 223(c), 
as amended by this Act, is amended by adding at the end 
the following new subparagraph: 
‘‘(E) SPECIAL RULE FOR INDIVIDUALS EL-
IGIBLE FOR ASSISTANCE UNDER TRICARE.—For 
purposes of subparagraph (A)(ii), an individual 
shall not be treated as covered under a health 
plan described in such subparagraph merely be-
cause the individual is eligible to receive hos-
pital care, medical services, or prescription 
drugs under TRICARE Extra or TRICARE 
Standard and such individual is not enrolled in 
TRICARE Prime.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 226. FSA AND HRA INTERACTION WITH HSAS. 
(a) ELIGIBLE INDIVIDUALS INCLUDE FSA AND HRA 
PARTICIPANTS.—Subparagraph (B) of section 223(c)(1) 
is amended— 
(1) by striking ‘‘and’’ at the end of clause (ii), 
(2) by striking the period at the end of clause 
(iii) and inserting ‘‘, and’’, and 
(3) by inserting after clause (iii) the following 
new clause: 
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‘‘(iv) coverage under a health flexible 
spending arrangement or a health reim-
bursement arrangement in the plan year a 
qualified HSA distribution as described in 
section 106(e) is made on behalf of the in-
dividual if after the qualified HSA dis-
tribution is made and for the remaining 
duration of the plan year, the coverage 
provided under the health flexible spending 
arrangement or health reimbursement ar-
rangement is converted to— 
‘‘(I) coverage that does not pay 
or reimburse any medical expense in-
curred before the minimum annual de-
ductible under paragraph (2)(A)(i) 
(prorated for the period occurring 
after the qualified HSA distribution is 
made) is satisfied, 
‘‘(II) coverage that, after the 
qualified HSA distribution is made, 
does not pay or reimburse any med-
ical expense incurred after the quali-
fied HSA distribution is made other 
than preventive care as defined in 
paragraph (2)(C), 
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‘‘(III) coverage that, after the 
qualified HSA distribution is made, 
pays or reimburses benefits for cov-
erage described in clause (ii) (but not 
through insurance or for long-term 
care services), 
‘‘(IV) coverage that, after the 
qualified HSA distribution is made, 
pays or reimburses benefits for per-
mitted insurance or coverage de-
scribed in clause (ii) (but not for long- 
term care services), 
‘‘(V) coverage that, after the 
qualified HSA distribution is made, 
pays or reimburses only those medical 
expenses incurred after an individual’s 
retirement (and no expenses incurred 
before retirement), or 
‘‘(VI) coverage that, after the 
qualified HSA distribution is made, is 
suspended, pursuant to an election 
made on or before the date the indi-
vidual elects a qualified HSA distribu-
tion or, if later, on the date of the in-
dividual enrolls in a high deductible 
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health plan, that does not pay or re-
imburse, at any time, any medical ex-
pense incurred during the suspension 
period except as defined in the pre-
ceding subclauses of this clause.’’. 
(b) QUALIFIED HSA DISTRIBUTION SHALL NOT AF-
FECT FLEXIBLE SPENDING ARRANGEMENT.—Paragraph 
(1) of section 106(e) is amended to read as follows: 
‘‘(1) IN GENERAL.—A plan shall not fail to be 
treated as a health flexible spending arrangement 
under this section, section 105, or section 125, or as 
a health reimbursement arrangement under this sec-
tion or section 105, merely because such plan pro-
vides for a qualified HSA distribution.’’. 
(c) FSA BALANCES AT YEAR END SHALL NOT FOR-
FEIT.—Paragraph (2) of section 125(d) is amended by 
adding at the end the following new subparagraph: 
‘‘(E) EXCEPTION FOR QUALIFIED HSA DIS-
TRIBUTIONS.—Subparagraph 
(A) 
shall 
not 
apply to the extent that there is an amount re-
maining in a health flexible spending account at 
the end of a plan year that an individual elects 
to contribute to a health savings account pursu-
ant to a qualified HSA distribution (as defined 
in section 106(e)(2)).’’. 
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(d) SIMPLIFICATION OF LIMITATIONS ON FSA AND 
HRA ROLLOVERS.—Paragraph (2) of section 106(e) is 
amended to read as follows: 
‘‘(2) QUALIFIED HSA DISTRIBUTION.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
HSA distribution’ means a distribution from a 
health flexible spending arrangement or health 
reimbursement arrangement to the extent that 
such distribution does not exceed the lesser 
of— 
‘‘(i) the balance in such arrangement 
as of the date of such distribution, or 
‘‘(ii) the amount determined under 
subparagraph (B). 
Such term shall not include more than 1 dis-
tribution with respect to any arrangement. 
‘‘(B) DOLLAR LIMITATIONS.— 
‘‘(i) DISTRIBUTIONS FROM A HEALTH 
FLEXIBLE
SPENDING
ARRANGEMENT.—A 
qualified HSA distribution from a health 
flexible spending arrangement shall not ex-
ceed the applicable amount. 
‘‘(ii) DISTRIBUTIONS FROM A HEALTH 
REIMBURSEMENT
ARRANGEMENT.—A 
qualified HSA distribution from a health 
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reimbursement arrangement shall not ex-
ceed— 
‘‘(I) the applicable amount di-
vided by 12, multiplied by 
‘‘(II) the number of months dur-
ing which the individual is a partici-
pant in the health reimbursement ar-
rangement. 
‘‘(iii) 
APPLICABLE
AMOUNT.—For 
purposes of this subparagraph, the applica-
ble amount is— 
‘‘(I) $2,250 in the case of an eli-
gible individual who has self-only cov-
erage under a high deductible health 
plan at the time of such distribution, 
and 
‘‘(II) $4,500 in the case of an eli-
gible individual who has family cov-
erage under a high deductible health 
plan at the time of such distribu-
tion.’’. 
(e) ELIMINATION OF ADDITIONAL TAX FOR FAILURE 
TO MAINTAIN HIGH DEDUCTIBLE HEALTH PLAN COV-
ERAGE.—Subsection (e) of section 106 is amended— 
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(1) by striking paragraph (3) and redesignating 
paragraphs (4) and (5) as paragraphs (3) and (4), 
respectively, and 
(2) by striking subparagraph (A) of paragraph 
(3), as so redesignated, and redesignating subpara-
graphs (B) and (C) of such paragraph as subpara-
graphs (A) and (B) thereof, respectively. 
(f) LIMITED PURPOSE FSAS
AND HRAS.—Sub-
section (e) of section 106, as amended by this section, is 
amended by adding at the end the following new para-
graph: 
‘‘(5) LIMITED PURPOSE FSAS AND HRAS.—A 
plan shall not fail to be a health flexible spending 
arrangement or health reimbursement arrangement 
under this section or section 105 merely because the 
plan converts coverage for individuals who enroll in 
a high deductible health plan described in section 
223(c)(2) 
to 
coverage 
described 
in 
section 
223(c)(1)(B)(iv). Coverage for such individuals may 
be converted as of the date of enrollment in the high 
deductible health plan, without regard to the period 
of coverage under the health flexible spending ar-
rangement or health reimbursement arrangement, 
and without requiring any change in coverage to in-
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dividuals who do not enroll in a high deductible 
health plan.’’. 
(g) DISTRIBUTION AMOUNTS ADJUSTED FOR COST- 
OF-LIVING.—Subsection (e) of section 106, as amended 
by this section, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(6) COST-OF-LIVING ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2013, each of the dollar amounts in paragraph 
(2)(B)(iii) shall be increased by an amount 
equal to such dollar amount, multiplied by the 
cost-of-living adjustment determined under sec-
tion 1(f)(3) for the calendar year in which such 
taxable year begins by substituting ‘calendar 
year 2012’ for ‘calendar year 1992’ in subpara-
graph (B) thereof. 
‘‘(B) ROUNDING.—If any increase under 
paragraph (1) is not a multiple of $50, such in-
crease shall be rounded to the nearest multiple 
of $50.’’. 
(h) DISCLAIMER OF DISQUALIFYING COVERAGE.— 
Subparagraph (B) of section 223(c)(1), as amended by 
this section, is amended— 
(1) by striking ‘‘and’’ at the end of clause (iii), 
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(2) by striking the period at the end of clause 
(iv) and inserting ‘‘, and’’, and 
(3) by inserting after clause (iv) the following 
new clause: 
‘‘(v) any coverage (including prospec-
tive coverage) under a health plan that is 
not a high deductible health plan which is 
disclaimed in writing, at the time of the 
creation or organization of the health sav-
ings account, including by execution of a 
trust 
described 
in 
subsection 
(d)(1) 
through a governing instrument that in-
cludes such a disclaimer, or by acceptance 
of an amendment to such a trust that in-
cludes such a disclaimer.’’. 
(i) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 227. PURCHASE OF HEALTH INSURANCE FROM HSA 
ACCOUNT. 
(a) IN GENERAL.—Paragraph (2) of section 223(d) 
is amended to read as follows: 
‘‘(2) QUALIFIED MEDICAL EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
medical expenses’ means, with respect to an ac-
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count beneficiary, amounts paid by such bene-
ficiary for medical care (as defined in section 
213(d)) for any individual covered by a high de-
ductible health plan of the account beneficiary, 
but only to the extent such amounts are not 
compensated for by insurance or otherwise. 
‘‘(B) HEALTH
INSURANCE
MAY
NOT
BE 
PURCHASED FROM ACCOUNT.—Except as pro-
vided in subparagraph (C), subparagraph (A) 
shall not apply to any payment for insurance. 
‘‘(C) 
EXCEPTIONS.—Subparagraph 
(B) 
shall not apply to any expense for coverage 
under— 
‘‘(i) a health plan during any period 
of continuation coverage required under 
any Federal law, 
‘‘(ii) a qualified long-term care insur-
ance contract (as defined in section 
7702B(b)), 
‘‘(iii) a health plan during any period 
in which the individual is receiving unem-
ployment compensation under any Federal 
or State law, 
‘‘(iv) a high deductible health plan, or 
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‘‘(v) any health insurance under title 
XVIII of the Social Security Act, other 
than a Medicare supplemental policy (as 
defined in section 1882 of such Act).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to insurance pur-
chased after the date of the enactment of this Act in tax-
able years beginning after such date. 
SEC. 228. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 
INCURRED BEFORE ESTABLISHMENT OF AC-
COUNT. 
(a) IN GENERAL.—Paragraph (2) of section 223(d), 
as amended by this Act, is amended by adding at the end 
the following new subparagraph: 
‘‘(D) CERTAIN
MEDICAL
EXPENSES
IN-
CURRED BEFORE ESTABLISHMENT OF ACCOUNT 
TREATED AS QUALIFIED.—An expense shall not 
fail to be treated as a qualified medical expense 
solely because such expense was incurred before 
the establishment of the health savings account 
if such expense was incurred— 
‘‘(i) during either— 
‘‘(I) the taxable year in which the 
health savings account was estab-
lished, or 
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‘‘(II) the preceding taxable year 
in the case of a health savings ac-
count established after the taxable 
year in which such expense was in-
curred but before the time prescribed 
by law for filing the return for such 
taxable year (not including extensions 
thereof), and 
‘‘(ii) for medical care of an individual 
during a period that such individual was 
covered by a high deductible health plan 
and met the requirements of subsection 
(c)(1)(A)(ii) (after application of sub-
section (c)(1)(B)).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 229. PREVENTIVE CARE PRESCRIPTION DRUG CLARI-
FICATION. 
(a) CLARIFY
USE
OF
DRUGS
IN
PREVENTIVE 
CARE.—Subparagraph (C) of section 223(c)(2) is amend-
ed by adding at the end the following: ‘‘Preventive care 
shall include prescription and over-the-counter drugs and 
medicines which have the primary purpose of preventing 
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the onset of, further deterioration from, or complications 
associated with chronic conditions, illnesses, or diseases.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 230. EQUIVALENT BANKRUPTCY PROTECTIONS FOR 
HEALTH SAVINGS ACCOUNTS AS RETIRE-
MENT FUNDS. 
(a) IN GENERAL.—Section 522 of title 11, United 
States Code, is amended by adding at the end the fol-
lowing new subsection: 
‘‘(r) 
TREATMENT
OF
HEALTH
SAVINGS
AC-
COUNTS.—For purposes of this section, any health savings 
account (as described in section 223 of the Internal Rev-
enue Code of 1986) shall be treated in the same manner 
as an individual retirement account described in section 
408 of such Code.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to cases commencing under title 
11, United States Code, after the date of the enactment 
of this Act. 
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SEC. 231. ADMINISTRATIVE ERROR CORRECTION BEFORE 
DUE DATE OF RETURN. 
(a) IN GENERAL.—Paragraph (4) of section 223(f) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(D) EXCEPTION
FOR
ADMINISTRATIVE 
ERRORS CORRECTED BEFORE DUE DATE OF RE-
TURN.—Subparagraph (A) shall not apply if 
any payment or distribution is made to correct 
an administrative, clerical or payroll contribu-
tion error and if— 
‘‘(i) such distribution is received by 
the individual on or before the last day 
prescribed by law (including extensions of 
time) for filing such individual’s return for 
such taxable year, and 
‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such contribution. 
Any net income described in clause (ii) shall be 
included in the gross income of the individual 
for the taxable year in which it is received.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
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SEC. 232. REAUTHORIZATION OF MEDICAID HEALTH OP-
PORTUNITY ACCOUNTS. 
(a) IN GENERAL.—Section 1938 of the Social Secu-
rity Act (42 U.S.C. 1396u–8) is amended— 
(1) in subsection (a)— 
(A) by striking paragraph (2) and insert-
ing the following: 
‘‘(2) INITIAL
DEMONSTRATION.—The dem-
onstration program under this section shall begin on 
January 1, 2007. The Secretary shall approve States 
to conduct demonstration programs under this sec-
tion for a 5-year period, with each State demonstra-
tion program covering one or more geographic areas 
specified by the State. With respect to a State, after 
the initial 5-year period of any demonstration pro-
gram conducted under this section by the State, un-
less the Secretary finds, taking into account cost-ef-
fectiveness and quality of care, that the State dem-
onstration program has been unsuccessful, the dem-
onstration program may be extended or made per-
manent in the State.’’; and 
(B) in paragraph (3), in the matter pre-
ceding subparagraph (A)— 
(i) by striking ‘‘not’’; and 
(ii) by striking ‘‘unless’’ and inserting 
‘‘if’’; 
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(2) in subsection (b)— 
(A) in paragraph (3), by inserting ‘‘clause 
(i) through (vii), (viii) (without regard to the 
amendment made by section 2004(c)(2) of Pub-
lic Law 111–148), (x), or (xi) of’’ after ‘‘de-
scribed in’’; and 
(B) by striking paragraphs (4), (5), and 
(6); 
(3) in subsection (c)— 
(A) by striking paragraphs (3) and (4); 
(B) 
by 
redesignating 
paragraphs 
(5) 
through (8) as paragraphs (3) through (6), re-
spectively; and 
(C) in paragraph (4) (as redesignated by 
subparagraph (B)), by striking ‘‘Subject to sub-
paragraphs (D) and (E)’’ and inserting ‘‘Sub-
ject to subparagraph (D)’’; and 
(4) in subsection (d)— 
(A) in paragraph (2), by striking subpara-
graph (E); and 
(B) in paragraph (3)— 
(i) in subparagraph (A)(ii), by strik-
ing ‘‘Subject to subparagraph (B)(ii), in’’ 
and inserting ‘‘In’’; and 
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(ii) by striking subparagraph (B) and 
inserting the following: 
‘‘(B) MAINTENANCE OF HEALTH OPPOR-
TUNITY
ACCOUNT
AFTER
BECOMING
INELI-
GIBLE FOR PUBLIC BENEFIT.—Notwithstanding 
any other provision of law, if an account holder 
of a health opportunity account becomes ineli-
gible for benefits under this title because of an 
increase in income or assets— 
‘‘(i) no additional contribution shall be 
made into the account under paragraph 
(2)(A)(i); and 
‘‘(ii) the account shall remain avail-
able to the account holder for 3 years after 
the date on which the individual becomes 
ineligible for such benefits for withdrawals 
under the same terms and conditions as if 
the account holder remained eligible for 
such benefits, and such withdrawals shall 
be treated as medical assistance in accord-
ance with subsection (c)(4).’’. 
(b) CONFORMING
AMENDMENT.—Section 613 of 
Public Law 111–3 is repealed. 
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SEC. 233. MEMBERS OF HEALTH CARE SHARING MIN-
ISTRIES ELIGIBLE TO ESTABLISH HEALTH 
SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Section 223 is amended by adding 
at the end the following new subsection: 
‘‘(i) APPLICATION TO HEALTH CARE SHARING MIN-
ISTRIES.—For purposes of this section, membership in a 
health care sharing ministry (as defined in section 
5000A(d)(2)(B)(ii)) shall be treated as coverage under a 
high deductible health plan.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 234. HIGH DEDUCTIBLE HEALTH PLANS RENAMED 
HSA QUALIFIED PLANS. 
(a) IN GENERAL.—Section 223, as amended by this 
subtitle, is amended by striking ‘‘high deductible health 
plan’’ each place it appears and inserting ‘‘HSA qualified 
health plan’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 106(e), as amended by this subtitle, 
is amended by striking ‘‘high deductible health plan’’ 
each place it appears and inserting ‘‘HSA qualified 
health plan’’. 
(2) The heading for paragraph (2) of section 
223(c) is amended by striking ‘‘HIGH DEDUCTIBLE 
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HEALTH
PLAN’’ and inserting ‘‘HSA QUALIFIED 
HEALTH PLAN’’. 
(3) Section 408(d)(9) is amended— 
(A) by striking ‘‘high deductible health 
plan’’ each place it appears in subparagraph 
(C) and inserting ‘‘HSA qualified health plan’’, 
and 
(B) 
by 
striking 
‘‘HIGH
DEDUCTIBLE 
HEALTH PLAN’’ in the heading of subparagraph 
(D) and inserting ‘‘HSA QUALIFIED HEALTH 
PLAN’’. 
SEC. 235. TREATMENT OF DIRECT PRIMARY CARE SERVICE 
ARRANGEMENTS. 
(a) IN GENERAL.—Section 223(c) is amended by 
adding at the end the following new paragraph: 
‘‘(6) TREATMENT
OF
DIRECT
PRIMARY
CARE 
SERVICE ARRANGEMENTS.—An arrangement under 
which an individual is provided coverage restricted to 
primary care services in exchange for a fixed peri-
odic fee— 
‘‘(A) shall not be treated as a health plan 
for purposes of paragraph (1)(A)(ii), and 
‘‘(B) shall not be treated as insurance for 
purposes of subsection (d)(2)(B).’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 236. CERTAIN EXERCISE EQUIPMENT AND PHYSICAL 
FITNESS PROGRAMS TREATED AS MEDICAL 
CARE. 
(a) IN GENERAL.—Subsection (d) of section 213 is 
amended by adding at the end the following new para-
graph: 
‘‘(12) EXERCISE
EQUIPMENT
AND
PHYSICAL 
FITNESS PROGRAMS.— 
‘‘(A) IN
GENERAL.—The term ‘medical 
care’ shall include amounts paid— 
‘‘(i) to purchase or use equipment 
used in a program (including a self-di-
rected program) of physical exercise, 
‘‘(ii) to participate, or receive instruc-
tion, in a program of physical exercise, and 
‘‘(iii) for membership dues in a fitness 
club the primary purpose of which is to 
provide access to equipment and facilities 
for physical exercise. 
‘‘(B) LIMITATION.—Amounts treated as 
medical care under subparagraph (A) shall not 
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exceed $1,000 with respect to any individual for 
any taxable year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 237. CERTAIN NUTRITIONAL AND DIETARY SUPPLE-
MENTS TO BE TREATED AS MEDICAL CARE. 
(a) IN GENERAL.—Subsection (d) of section 213, as 
amended by this Act, is amended by adding at the end 
the following new paragraph: 
‘‘(13) NUTRITIONAL
AND
DIETARY
SUPPLE-
MENTS.— 
‘‘(A) IN
GENERAL.—The term ‘medical 
care’ shall include amounts paid to purchase 
herbs, vitamins, minerals, homeopathic rem-
edies, meal replacement products, and other di-
etary and nutritional supplements. 
‘‘(B) LIMITATION.—Amounts treated as 
medical care under subparagraph (A) shall not 
exceed $1,000 with respect to any individual for 
any taxable year. 
‘‘(C) MEAL
REPLACEMENT
PRODUCT.— 
For purposes of this paragraph, the term ‘meal 
replacement product’ means any product that— 
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‘‘(i) is permitted to bear labeling mak-
ing a claim described in section 403(r)(3) 
of the Federal Food, Drug, and Cosmetic 
Act, and 
‘‘(ii) is permitted to claim under such 
section that such product is low in fat and 
is a good source of protein, fiber, and mul-
tiple essential vitamins and minerals.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 238. CERTAIN PROVIDER FEES TO BE TREATED AS 
MEDICAL CARE. 
(a) IN GENERAL.—Subsection (d) of section 213, as 
amended by this Act, is amended by adding at the end 
the following new paragraph: 
‘‘(14) PERIODIC
PROVIDER
FEES.—The term 
‘medical care’ shall include periodic fees paid to a 
primary care physician for the right to receive med-
ical services on an as-needed basis.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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SEC. 239. INCREASE THE MAXIMUM CONTRIBUTION LIMIT 
TO AN HSA TO MATCH DEDUCTIBLE AND 
OUT-OF-POCKET EXPENSE LIMITATION. 
(a) SELF-ONLY COVERAGE.—Subparagraph (A) of 
section 223(b)(2) is amended by striking ‘‘$2,250’’ and 
inserting ‘‘the amount in effect under subsection 
(c)(2)(A)(ii)(I)’’. 
(b) FAMILY COVERAGE.—Subparagraph (B) of sec-
tion 223(b)(2) is amended by striking ‘‘$4,500’’ and in-
serting 
‘‘the 
amount 
in 
effect 
under 
subsection 
(c)(2)(A)(ii)(II)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 240. CHILD HEALTH SAVINGS ACCOUNT. 
(a) IN GENERAL.—Section 223, as amended by this 
Act, is amended by adding at the end the following new 
subsection: 
‘‘(j) CHILD HEALTH SAVINGS ACCOUNTS.— 
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, in addition to any deduction allowed under 
subsection (a) for any taxable year, there shall be al-
lowed as a deduction under this section an amount 
equal to the aggregate amount paid in cash by the 
taxpayer during the taxable year to a child health 
savings account of a child of the taxpayer. 
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‘‘(2) LIMITATION.—The amount taken into ac-
count under paragraph (1) with respect to each child 
of the taxpayer for the taxable year shall not exceed 
an amount equal to $3,000. 
‘‘(3) CHILD HEALTH SAVINGS ACCOUNT.—For 
purposes of this subsection, the term ‘child health 
savings account’ means a health savings account 
designated as a child health savings account and es-
tablished for the benefit of a child of a taxpayer, but 
only if— 
‘‘(A) such account was established for the 
benefit of the child before the child attains the 
age of 5, and 
‘‘(B) under the written governing instru-
ment creating the trust, no contribution will be 
accepted to the extent such contribution, when 
added to previous contributions to the trust for 
the calendar year, exceeds the dollar amount in 
effect under paragraph (2). 
‘‘(4) TREATMENT
OF
ACCOUNT
BEFORE
AGE 
18.—For purposes of this section, except as other-
wise provided in this subsection, a child health sav-
ings account established for the benefit of the child 
of a taxpayer shall be treated as a health savings ac-
count of the taxpayer until the child attains the age 
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of 18, after which such account shall be treated as 
a health savings account of the child. 
‘‘(5) DISTRIBUTIONS.— 
‘‘(A) IN GENERAL.—In the case of a child 
health savings account established under this 
section for the benefit of a child of a tax-
payer— 
‘‘(i) BEFORE
AGE
18.—Any amount 
paid or distributed out of such account be-
fore the child has attained the age of 18, 
shall be included in the gross income of the 
taxpayer, and subparagraph (A) of sub-
section (f) shall apply (relating to addi-
tional tax on distributions not used for 
qualified medical expenses). 
‘‘(ii) 
AGE
AND
OLDER.—Any 
amount paid or distributed out of such ac-
count after the child has attained the age 
of 18 may only be treated as used to pay 
qualified medical expenses to the extent 
such child is not covered as a dependent 
under insurance (other than permitted in-
surance) of a parent. 
‘‘(B) EXCEPTIONS
FOR
DISABILITY
OR 
DEATH OF CHILD.—If the child becomes dis-
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abled within the meaning of section 72(m)(7) or 
dies— 
‘‘(i) subparagraph (A) shall not apply 
to any subsequent payment or distribution, 
and 
‘‘(ii) the taxpayer may rollover the 
amount in such account to an individual 
retirement plan of the taxpayer, to any 
health savings account of the taxpayer, or 
to any child health savings account of any 
other child of the taxpayer. 
‘‘(C) HEALTH INSURANCE MAY BE PUR-
CHASED
FROM
ACCOUNT.—Subparagraph (B) 
of subsection (d)(2) shall not apply to any 
health savings account originally established as 
a child health savings account. 
‘‘(6) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary to carry 
out the purposes of this subsection, including rules 
for determining application of this subsection in the 
case of legal guardians and in the case of parents 
of a child who file separately, are separated, or are 
not married.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 241. DISTRIBUTIONS FOR ABORTION EXPENSES FROM 
HEALTH SAVINGS ACCOUNTS INCLUDED IN 
GROSS INCOME. 
(a) IN GENERAL.—Subsection (f) of section 223 is 
amended by adding at the end the following new para-
graph: 
‘‘(9) EXCEPTION FOR CERTAIN ABORTION EX-
PENSES.— 
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), any amount used to pay for an abor-
tion (other than an abortion described in sub-
paragraph (B)) shall be included in the gross 
income of such beneficiary. 
‘‘(B) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply to— 
‘‘(i) an abortion— 
‘‘(I) in the case of a pregnancy 
that 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 
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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, and 
‘‘(ii) the treatment of any infection, 
injury, disease, or disorder that has been 
caused by or exacerbated by the perform-
ance of an abortion.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Subtitle C—Enhanced Wellness 
Incentives 
SEC. 251. PROVIDING FINANCIAL INCENTIVES FOR TREAT-
MENT COMPLIANCE. 
(a) LIMITATION
ON EXCEPTION
FOR WELLNESS 
PROGRAMS UNDER HIPAA DISCRIMINATION RULES.— 
(1) EMPLOYEE RETIREMENT INCOME SECURITY 
ACT OF 1974 AMENDMENT.—Section 702(b)(2) of the 
Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1182(b)(2)) is amended by adding after 
and below subparagraph (B) the following: 
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‘‘In applying subparagraph (B), a group health plan 
(or a health insurance issuer with respect to health 
insurance coverage) may vary premiums and cost- 
sharing by up to 50 percent of the value of the bene-
fits under the plan (or coverage) based on participa-
tion (or lack of participation) in a standards-based 
wellness program.’’. 
(2) PHSA AMENDMENT.—Section 2702(b)(2) 
of the Public Health Service Act (42 U.S.C. 300gg– 
1(b)(2)) is amended by adding after and below sub-
paragraph (B) the following: 
‘‘In applying subparagraph (B), a group health plan 
(or a health insurance issuer with respect to health 
insurance coverage) may vary premiums and cost- 
sharing by up to 50 percent of the value of the bene-
fits under the plan (or coverage) based on participa-
tion (or lack of participation) in a standards-based 
wellness program.’’. 
(3) IRC AMENDMENT.—Section 9802(b)(2) of 
the Internal Revenue Code of 1986 is amended by 
adding after and below subparagraph (B) the fol-
lowing: 
‘‘In applying subparagraph (B), a group health plan 
may vary premiums and cost-sharing by up to 50 
percent of the value of the benefits under the plan 
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based on participation (or lack of participation) in a 
standards-based wellness program.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to plan years beginning more 
than 1 year after the date of the enactment of this Act. 
TITLE III—IMPROVING ACCESS 
TO INSURANCE FOR VULNER-
ABLE AMERICANS 
Subtitle A—Eliminating Barriers to 
Insurance Coverage 
SEC. 301. ELIMINATION OF CERTAIN REQUIREMENTS FOR 
GUARANTEED AVAILABILITY IN INDIVIDUAL 
MARKET. 
(a) IN GENERAL.—Section 2741(b) of the Public 
Health Service Act (42 U.S.C. 300gg–41(b)) is amend-
ed— 
(1) in paragraph (1)— 
(A) by striking ‘‘(1)(A)’’ and inserting 
‘‘(1)’’; and 
(B) by striking ‘‘and (B)’’ and all that fol-
lows up to the semicolon at the end; 
(2) by adding ‘‘and’’ at the end of paragraph 
(2); 
(3) in paragraph (3)— 
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(A) by striking ‘‘(1)(A)’’ and inserting 
‘‘(1)’’; and 
(B) by striking the semicolon at the end 
and inserting a period; and 
(4) by striking paragraphs (4) and (5). 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act. 
Subtitle B—Ensuring Coverage for 
Individuals 
With 
Preexisting 
Conditions and Multiple Health 
Care Needs Through High Risk 
Pools 
SEC. 311. IMPROVEMENT OF HIGH RISK POOLS. 
Section 2745 of the Public Health Service Act (42 
U.S.C. 300gg–45) is amended— 
(1) in subsection (a), by adding at the end the 
following: ‘‘The Secretary shall provide from the 
funds appropriated under subsection (d)(3)(A) a 
grant of up to $5,000,000 to each State that has 
not created a qualified high risk pool as of Sep-
tember 1, 2013, for the State’s costs of creation and 
initial operation of such a pool.’’; 
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(2) in paragraphs (1) and (2) of subsection (b), 
by striking ‘‘and (2)(A)’’ and inserting ‘‘(2)(A), 
(3)(B), and (4)’’ each place it appears; 
(3) in subsection (b)(3), by inserting ‘‘with re-
spect to funds made available for fiscal years before 
fiscal year 2014,’’ after ‘‘applicable standard risks,’’; 
(4) by adding at the end of subsection (b) the 
following new paragraph: 
‘‘(5) VERIFICATION OF CITIZENSHIP OR ALIEN 
QUALIFICATION.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, effective upon the date 
of the enactment of this paragraph, only citi-
zens and nationals of the United States shall be 
eligible to participate in a qualified high risk 
pool that receives funds under this section. 
‘‘(B) CONDITION OF PARTICIPATION.—As 
a condition of a State receiving such funds 
under this subsection for a fiscal year beginning 
with fiscal year 2014, the Secretary shall re-
quire the State to certify, to the satisfaction of 
the Secretary, that such State requires all ap-
plicants for coverage in the qualified high risk 
pool to provide satisfactory documentation of 
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citizenship or nationality in a manner consistent 
with section 1903(x) of the Social Security Act. 
‘‘(C) RECORDS.—The Secretary shall keep 
sufficient records such that a determination of 
citizenship or nationality only has to be made 
once for any individual under this paragraph.’’; 
and 
(5) in subsection (d)— 
(A) in paragraphs (1)(B) and (2) by strik-
ing ‘‘paragraph (4)’’ and inserting ‘‘paragraph 
(6)’’; 
(B) in paragraph (4), by striking ‘‘or (2)’’ 
and inserting ‘‘(2), (3)(B), or (4)’’; 
(C) 
by 
redesignating 
paragraphs 
(3) 
through (5) as paragraphs (5) through (7), re-
spectively; and 
(D) by inserting after paragraph (2) the 
following: 
‘‘(3) AUTHORIZATION OF APPROPRIATIONS FOR 
FISCAL YEAR 2014.—There are authorized to be ap-
propriated for fiscal year 2014— 
‘‘(A) $50,000,000 to carry out the second 
sentence of subsection (a); and 
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‘‘(B) $2,450,000,000 which, subject to 
paragraph (6), shall be made available for allot-
ments under subsection (b)(2). 
‘‘(4) AUTHORIZATION OF APPROPRIATIONS FOR 
FISCAL YEARS 2015 THROUGH 2023.—There are au-
thorized to be appropriated $2,500,000,000 for each 
of fiscal years 2015 through 2023 which, subject to 
paragraph (6), shall be made available for allotments 
under subsection (b)(2).’’. 
TITLE 
IV—ENCOURAGING 
A 
MORE COMPETITIVE HEALTH 
CARE MARKET 
Subtitle A—Expanding Patient 
Choice 
SEC. 
401. 
COOPERATIVE 
GOVERNING 
OF 
INDIVIDUAL 
HEALTH INSURANCE COVERAGE. 
(a) IN GENERAL.—Title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg et seq.) is amended by add-
ing at the end the following new part: 
‘‘PART D—COOPERATIVE GOVERNING OF 
INDIVIDUAL HEALTH INSURANCE COVERAGE 
‘‘SEC. 2795. DEFINITIONS. 
‘‘In this part: 
‘‘(1) PRIMARY
STATE.—The term ‘primary 
State’ means, with respect to individual health insur-
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ance coverage offered by a health insurance issuer, 
the State designated by the issuer as the State 
whose covered laws shall govern the health insurance 
issuer in the sale of such coverage under this part. 
An issuer, with respect to a particular policy, may 
only designate one such State as its primary State 
with respect to all such coverage it offers. Such an 
issuer may not change the designated primary State 
with respect to individual health insurance coverage 
once the policy is issued, except that such a change 
may be made upon renewal of the policy. With re-
spect to such designated State, the issuer is deemed 
to be doing business in that State. 
‘‘(2) SECONDARY STATE.—The term ‘secondary 
State’ means, with respect to individual health insur-
ance coverage offered by a health insurance issuer, 
any State that is not the primary State. In the case 
of a health insurance issuer that is selling a policy 
in, or to a resident of, a secondary State, the issuer 
is deemed to be doing business in that secondary 
State. 
‘‘(3) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning given such 
term in section 2791(b)(2), except that such an 
issuer must be licensed in the primary State and be 
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qualified to sell individual health insurance coverage 
in that State. 
‘‘(4) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—The term ‘individual health insurance cov-
erage’ means health insurance coverage offered in 
the individual market, as defined in section 
2791(e)(1). 
‘‘(5) 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 
this title for the State with respect to the issuer. 
‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 
term ‘hazardous financial condition’ means that, 
based on its present or reasonably anticipated finan-
cial condition, a health insurance issuer is unlikely 
to be able— 
‘‘(A) to meet obligations to policyholders 
with respect to known claims and reasonably 
anticipated claims; or 
‘‘(B) to pay other obligations in the normal 
course of business. 
‘‘(7) COVERED LAWS.— 
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‘‘(A) IN
GENERAL.—The term ‘covered 
laws’ means the laws, rules, regulations, agree-
ments, and orders governing the insurance busi-
ness pertaining to— 
‘‘(i) individual health insurance cov-
erage issued by a health insurance issuer; 
‘‘(ii) the offer, sale, rating (including 
medical 
underwriting), 
renewal, 
and 
issuance of individual health insurance cov-
erage to an individual; 
‘‘(iii) the provision to an individual in 
relation to individual health insurance cov-
erage of health care and insurance related 
services; 
‘‘(iv) the provision to an individual in 
relation to individual health insurance cov-
erage of management, operations, and in-
vestment activities of a health insurance 
issuer; and 
‘‘(v) the provision to an individual in 
relation to individual health insurance cov-
erage of loss control and claims adminis-
tration for a health insurance issuer with 
respect to liability for which the issuer pro-
vides insurance. 
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‘‘(B) EXCEPTION.—Such term does not in-
clude any law, rule, regulation, agreement, or 
order governing the use of care or cost manage-
ment techniques, including any requirement re-
lated to provider contracting, network access or 
adequacy, health care data collection, or quality 
assurance. 
‘‘(8) STATE.—The term ‘State’ means the 50 
States and includes the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. 
‘‘(9) UNFAIR
CLAIMS
SETTLEMENT
PRAC-
TICES.—The term ‘unfair claims settlement prac-
tices’ means only the following practices: 
‘‘(A) Knowingly misrepresenting to claim-
ants and insured individuals relevant facts or 
policy provisions relating to coverage at issue. 
‘‘(B) Failing to acknowledge with reason-
able promptness pertinent communications with 
respect to claims arising under policies. 
‘‘(C) Failing to adopt and implement rea-
sonable standards for the prompt investigation 
and settlement of claims arising under policies. 
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‘‘(D) Failing to effectuate prompt, fair, 
and equitable settlement of claims submitted in 
which liability has become reasonably clear. 
‘‘(E) Refusing to pay claims without con-
ducting a reasonable investigation. 
‘‘(F) Failing to affirm or deny coverage of 
claims within a reasonable period of time after 
having completed an investigation related to 
those claims. 
‘‘(G) A pattern or practice of compelling 
insured individuals or their beneficiaries to in-
stitute suits to recover amounts due under its 
policies by offering substantially less than the 
amounts ultimately recovered in suits brought 
by them. 
‘‘(H) A pattern or practice of attempting 
to settle or settling claims for less than the 
amount that a reasonable person would believe 
the insured individual or his or her beneficiary 
was entitled by reference to written or printed 
advertising material accompanying or made 
part of an application. 
‘‘(I) Attempting to settle or settling claims 
on the basis of an application that was materi-
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ally altered without notice to, or knowledge or 
consent of, the insured. 
‘‘(J) Failing to provide forms necessary to 
present claims within 15 calendar days of a re-
quests with reasonable explanations regarding 
their use. 
‘‘(K) Attempting to cancel a policy in less 
time than that prescribed in the policy or by the 
law of the primary State. 
‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 
and abuse’ means an act or omission committed by 
a person who, knowingly and with intent to defraud, 
commits, or conceals any material information con-
cerning, one or more of the following: 
‘‘(A) Presenting, causing to be presented 
or preparing with knowledge or belief that it 
will be presented to or by an insurer, a rein-
surer, broker or its agent, false information as 
part of, in support of or concerning a fact ma-
terial to one or more of the following: 
‘‘(i) An application for the issuance or 
renewal of an insurance policy or reinsur-
ance contract. 
‘‘(ii) The rating of an insurance policy 
or reinsurance contract. 
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‘‘(iii) A claim for payment or benefit 
pursuant to an insurance policy or reinsur-
ance contract. 
‘‘(iv) Premiums paid on an insurance 
policy or reinsurance contract. 
‘‘(v) Payments made in accordance 
with the terms of an insurance policy or 
reinsurance contract. 
‘‘(vi) A document filed with the com-
missioner or the chief insurance regulatory 
official of another jurisdiction. 
‘‘(vii) The financial condition of an in-
surer or reinsurer. 
‘‘(viii) The formation, acquisition, 
merger, 
reconsolidation, 
dissolution 
or 
withdrawal from one or more lines of in-
surance or reinsurance in all or part of a 
State by an insurer or reinsurer. 
‘‘(ix) The issuance of written evidence 
of insurance. 
‘‘(x) The reinstatement of an insur-
ance policy. 
‘‘(B) Solicitation or acceptance of new or 
renewal insurance risks on behalf of an insurer 
reinsurer or other person engaged in the busi-
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ness of insurance by a person who knows or 
should know that the insurer or other person 
responsible for the risk is insolvent at the time 
of the transaction. 
‘‘(C) Transaction of the business of insur-
ance in violation of laws requiring a license, cer-
tificate of authority or other legal authority for 
the transaction of the business of insurance. 
‘‘(D) Attempt to commit, aiding or abet-
ting in the commission of, or conspiracy to com-
mit the acts or omissions specified in this para-
graph. 
‘‘SEC. 2796. APPLICATION OF LAW. 
‘‘(a) IN GENERAL.—Except as provided in section 
601(c) of the American Health Care Reform Act of 2013, 
the covered laws of the primary State shall apply to indi-
vidual health insurance coverage offered by a health insur-
ance issuer in the primary State and in any secondary 
State, but only if the coverage and issuer comply with the 
conditions of this section with respect to the offering of 
coverage in any secondary State. 
‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC-
ONDARY STATE.—Except as provided in this section, a 
health insurance issuer with respect to its offer, sale, rat-
ing (including medical underwriting), renewal, and 
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issuance of individual health insurance coverage in any 
secondary State is exempt from any covered laws of the 
secondary State (and any rules, regulations, agreements, 
or orders sought or issued by such State under or related 
to such covered laws) to the extent that such laws would— 
‘‘(1) make unlawful, or regulate, directly or in-
directly, the operation of the health insurance issuer 
operating in the secondary State, except that any 
secondary State may require such an issuer— 
‘‘(A) to pay, on a nondiscriminatory basis, 
applicable premium and other taxes (including 
high risk pool assessments) which are levied on 
insurers and surplus lines insurers, brokers, or 
policyholders under the laws of the State; 
‘‘(B) to register with and designate the 
State insurance commissioner as its agent solely 
for the purpose of receiving service of legal doc-
uments or process; 
‘‘(C) to submit to an examination of its fi-
nancial condition by the State insurance com-
missioner in any State in which the issuer is 
doing business to determine the issuer’s finan-
cial condition, if— 
‘‘(i) the State insurance commissioner 
of the primary State has not done an ex-
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amination within the period recommended 
by the National Association of Insurance 
Commissioners; and 
‘‘(ii) any such examination is con-
ducted in accordance with the examiners’ 
handbook of the National Association of 
Insurance Commissioners and is coordi-
nated to avoid unjustified duplication and 
unjustified repetition; 
‘‘(D) to comply with a lawful order 
issued— 
‘‘(i) in a delinquency proceeding com-
menced by the State insurance commis-
sioner if there has been a finding of finan-
cial impairment under subparagraph (C); 
or 
‘‘(ii) in a voluntary dissolution pro-
ceeding; 
‘‘(E) to comply with an injunction issued 
by a court of competent jurisdiction, upon a pe-
tition by the State insurance commissioner al-
leging that the issuer is in hazardous financial 
condition; 
‘‘(F) to participate, on a nondiscriminatory 
basis, in any insurance insolvency guaranty as-
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sociation or similar association to which a 
health insurance issuer in the State is required 
to belong; 
‘‘(G) to comply with any State law regard-
ing fraud and abuse (as defined in section 
2795(10)), except that if the State seeks an in-
junction regarding the conduct described in this 
subparagraph, such injunction must be obtained 
from a court of competent jurisdiction; 
‘‘(H) to comply with any State law regard-
ing unfair claims settlement practices (as de-
fined in section 2795(9)); or 
‘‘(I) to comply with the applicable require-
ments for independent review under section 
2798 with respect to coverage offered in the 
State; 
‘‘(2) require any individual health insurance 
coverage issued by the issuer to be countersigned by 
an insurance agent or broker residing in that Sec-
ondary State; or 
‘‘(3) otherwise discriminate against the issuer 
issuing insurance in both the primary State and in 
any secondary State. 
‘‘(c) CLEAR
AND CONSPICUOUS DISCLOSURE.—A 
health insurance issuer shall provide the following notice, 
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in 12-point bold type, in any insurance coverage offered 
in a secondary State under this part by such a health in-
surance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the 
name of the health insurance issuer, the name of primary 
State, the name of the secondary State, the name of the 
secondary State, and the name of the secondary State, re-
spectively, for the coverage concerned: 
‘‘ ‘NOTICE 
‘‘ ‘This policy is issued by lllll and is gov-
erned by the laws and regulations of the State of 
lllll, and it has met all the laws of that State as 
determined by that State’s Department of Insurance. This 
policy may be less expensive than others because it is not 
subject to all of the insurance laws and regulations of the 
State of lllll, including coverage of some services 
or benefits mandated by the law of the State of 
lllll. Additionally, this policy is not subject to all 
of the consumer protection laws or restrictions on rate 
changes of the State of lllll. As with all insurance 
products, before purchasing this policy, you should care-
fully review the policy and determine what health care 
services the policy covers and what benefits it provides, 
including any exclusions, limitations, or conditions for 
such services or benefits.’. 
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‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS 
AND PREMIUM INCREASES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, a health insurance issuer that provides indi-
vidual health insurance coverage to an individual 
under this part in a primary or secondary State may 
not upon renewal— 
‘‘(A) move or reclassify the individual in-
sured under the health insurance coverage from 
the class such individual is in at the time of 
issue of the contract based on the health-status 
related factors of the individual; or 
‘‘(B) increase the premiums assessed the 
individual for such coverage based on a health 
status-related factor or change of a health sta-
tus-related factor or the past or prospective 
claim experience of the insured individual. 
‘‘(2) CONSTRUCTION.—Nothing in paragraph 
(1) shall be construed to prohibit a health insurance 
issuer— 
‘‘(A) from terminating or discontinuing 
coverage or a class of coverage in accordance 
with subsections (b) and (c) of section 2742; 
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‘‘(B) from raising premium rates for all 
policy holders within a class based on claims ex-
perience; 
‘‘(C) from changing premiums or offering 
discounted premiums to individuals who engage 
in wellness activities at intervals prescribed by 
the issuer, if such premium changes or incen-
tives— 
‘‘(i) are disclosed to the consumer in 
the insurance contract; 
‘‘(ii) are based on specific wellness ac-
tivities that are not applicable to all indi-
viduals; and 
‘‘(iii) are not obtainable by all individ-
uals to whom coverage is offered; 
‘‘(D) from reinstating lapsed coverage; or 
‘‘(E) from retroactively adjusting the rates 
charged an insured individual if the initial rates 
were set based on material misrepresentation by 
the individual at the time of issue. 
‘‘(e) PRIOR OFFERING
OF POLICY
IN PRIMARY 
STATE.—A health insurance issuer may not offer for sale 
individual health insurance coverage in a secondary State 
unless that coverage is currently offered for sale in the 
primary State. 
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‘‘(f) LICENSING
OF AGENTS
OR BROKERS
FOR 
HEALTH INSURANCE ISSUERS.—Any State may require 
that a person acting, or offering to act, as an agent or 
broker for a health insurance issuer with respect to the 
offering of individual health insurance coverage obtain a 
license from that State, with commissions or other com-
pensation subject to the provisions of the laws of that 
State, except that a State may not impose any qualifica-
tion or requirement which discriminates against a non-
resident agent or broker. 
‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN-
SURANCE COMMISSIONER.—Each health insurance issuer 
issuing individual health insurance coverage in both pri-
mary and secondary States shall submit— 
‘‘(1) to the insurance commissioner of each 
State in which it intends to offer such coverage, be-
fore it may offer individual health insurance cov-
erage in such State— 
‘‘(A) a copy of the plan of operation or fea-
sibility study or any similar statement of the 
policy being offered and its coverage (which 
shall include the name of its primary State and 
its principal place of business); 
‘‘(B) written notice of any change in its 
designation of its primary State; and 
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‘‘(C) written notice from the issuer of the 
issuer’s compliance with all the laws of the pri-
mary State; and 
‘‘(2) to the insurance commissioner of each sec-
ondary State in which it offers individual health in-
surance coverage, a copy of the issuer’s quarterly fi-
nancial statement submitted to the primary State, 
which statement shall be certified by an independent 
public accountant and contain a statement of opin-
ion on loss and loss adjustment expense reserves 
made by— 
‘‘(A) a member of the American Academy 
of Actuaries; or 
‘‘(B) a qualified loss reserve specialist. 
‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 
Nothing in this section shall be construed to affect the 
authority of any Federal or State court to enjoin— 
‘‘(1) the solicitation or sale of individual health 
insurance coverage by a health insurance issuer to 
any person or group who is not eligible for such in-
surance; or 
‘‘(2) the solicitation or sale of individual health 
insurance coverage that violates the requirements of 
the law of a secondary State which are described in 
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subparagraphs 
(A) 
through 
(H) 
of 
section 
2796(b)(1). 
‘‘(i) POWER OF SECONDARY STATES TO TAKE AD-
MINISTRATIVE ACTION.—Nothing in this section shall be 
construed to affect the authority of any State to enjoin 
conduct in violation of that State’s laws described in sec-
tion 2796(b)(1). 
‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 
‘‘(1) IN GENERAL.—Subject to the provisions of 
subsection (b)(1)(G) (relating to injunctions) and 
paragraph (2), nothing in this section shall be con-
strued to affect the authority of any State to make 
use of any of its powers to enforce the laws of such 
State with respect to which a health insurance issuer 
is not exempt under subsection (b). 
‘‘(2) COURTS OF COMPETENT JURISDICTION.— 
If a State seeks an injunction regarding the conduct 
described in paragraphs (1) and (2) of subsection 
(h), such injunction must be obtained from a Fed-
eral or State court of competent jurisdiction. 
‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 
section shall affect the authority of any State to bring ac-
tion in any Federal or State court. 
‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 
this section shall be construed to affect the applicability 
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of State laws generally applicable to persons or corpora-
tions. 
‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO 
HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 
health insurance issuer is offering coverage in a primary 
State that does not accommodate residents of secondary 
States or does not provide a working mechanism for resi-
dents of a secondary State, and the issuer is offering cov-
erage under this part in such secondary State which has 
not adopted a qualified high risk pool as its acceptable 
alternative mechanism (as defined in section 2744(c)(2)), 
the issuer shall, with respect to any individual health in-
surance coverage offered in a secondary State under this 
part, comply with the guaranteed availability requirements 
for eligible individuals in section 2741. 
‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 
BEFORE ISSUER MAY SELL INTO SECONDARY 
STATES. 
‘‘A health insurance issuer may not offer, sell, or 
issue individual health insurance coverage in a secondary 
State if the State insurance commissioner does not use 
a risk-based capital formula for the determination of cap-
ital and surplus requirements for all health insurance 
issuers. 
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‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE-
DURES. 
‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur-
ance issuer may not offer, sell, or issue individual health 
insurance coverage in a secondary State under the provi-
sions of this title unless— 
‘‘(1) both the secondary State and the primary 
State have legislation or regulations in place estab-
lishing an independent review process for individuals 
who are covered by individual health insurance cov-
erage, or 
‘‘(2) in any case in which the requirements of 
subparagraph (A) are not met with respect to the ei-
ther of such States, the issuer provides an inde-
pendent review mechanism substantially identical (as 
determined by the applicable State authority of such 
State) to that prescribed in the ‘Health Carrier Ex-
ternal Review Model Act’ of the National Association 
of Insurance Commissioners for all individuals who 
purchase insurance coverage under the terms of this 
part, except that, under such mechanism, the review 
is conducted by an independent medical reviewer, or 
a panel of such reviewers, with respect to whom the 
requirements of subsection (b) are met. 
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‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL 
REVIEWERS.—In the case of any independent review 
mechanism referred to in subsection (a)(2)— 
‘‘(1) IN GENERAL.—In referring a denial of a 
claim to an independent medical reviewer, or to any 
panel of such reviewers, to conduct independent 
medical review, the issuer shall ensure that— 
‘‘(A) each independent medical reviewer 
meets the qualifications described in paragraphs 
(2) and (3); 
‘‘(B) with respect to each review, each re-
viewer meets the requirements of paragraph (4) 
and the reviewer, or at least 1 reviewer on the 
panel, meets the requirements described in 
paragraph (5); and 
‘‘(C) compensation provided by the issuer 
to each reviewer is consistent with paragraph 
(6). 
‘‘(2) LICENSURE AND EXPERTISE.—Each inde-
pendent medical reviewer shall be a physician 
(allopathic or osteopathic) or health care profes-
sional who— 
‘‘(A) is appropriately credentialed or li-
censed in 1 or more States to deliver health 
care services; and 
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‘‘(B) typically treats the condition, makes 
the diagnosis, or provides the type of treatment 
under review. 
‘‘(3) INDEPENDENCE.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each independent medical reviewer 
in a case shall— 
‘‘(i) not be a related party (as defined 
in paragraph (7)); 
‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with 
such a party; and 
‘‘(iii) not otherwise have a conflict of 
interest with such a party (as determined 
under regulations). 
‘‘(B) EXCEPTION.—Nothing in subpara-
graph (A) shall be construed to— 
‘‘(i) prohibit an individual, solely on 
the basis of affiliation with the issuer, 
from serving as an independent medical re-
viewer if— 
‘‘(I) a non-affiliated individual is 
not reasonably available; 
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‘‘(II) the affiliated individual is 
not involved in the provision of items 
or services in the case under review; 
‘‘(III) the fact of such an affili-
ation is disclosed to the issuer and the 
enrollee (or authorized representative) 
and neither party objects; and 
‘‘(IV) the affiliated individual is 
not an employee of the issuer and 
does not provide services exclusively or 
primarily to or on behalf of the issuer; 
‘‘(ii) prohibit an individual who has 
staff privileges at the institution where the 
treatment involved takes place from serv-
ing as an independent medical reviewer 
merely on the basis of such affiliation if 
the affiliation is disclosed to the issuer and 
the enrollee (or authorized representative), 
and neither party objects; or 
‘‘(iii) prohibit receipt of compensation 
by an independent medical reviewer from 
an entity if the compensation is provided 
consistent with paragraph (6). 
‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL 
IN SAME FIELD.— 
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‘‘(A) IN
GENERAL.—In a case involving 
treatment, or the provision of items or serv-
ices— 
‘‘(i) by a physician, a reviewer shall be 
a practicing physician (allopathic or osteo-
pathic) of the same or similar specialty, as 
a physician who, acting within the appro-
priate scope of practice within the State in 
which the service is provided or rendered, 
typically treats the condition, makes the 
diagnosis, or provides the type of treat-
ment under review; or 
‘‘(ii) by a non-physician health care 
professional, the reviewer, or at least 1 
member of the review panel, shall be a 
practicing non-physician health care pro-
fessional of the same or similar specialty 
as the non-physician health care profes-
sional who, acting within the appropriate 
scope of practice within the State in which 
the service is provided or rendered, typi-
cally treats the condition, makes the diag-
nosis, or provides the type of treatment 
under review. 
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‘‘(B) PRACTICING
DEFINED.—For pur-
poses of this paragraph, the term ‘practicing’ 
means, with respect to an individual who is a 
physician or other health care professional, that 
the individual provides health care services to 
individual patients on average at least 2 days 
per week. 
‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 
external review relating to a child, a reviewer shall 
have expertise under paragraph (2) in pediatrics. 
‘‘(6) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by the issuer to an 
independent medical reviewer in connection with a 
review under this section shall— 
‘‘(A) not exceed a reasonable level; and 
‘‘(B) not be contingent on the decision ren-
dered by the reviewer. 
‘‘(7) RELATED PARTY DEFINED.—For purposes 
of this section, the term ‘related party’ means, with 
respect to a denial of a claim under a coverage relat-
ing to an enrollee, any of the following: 
‘‘(A) The issuer involved, or any fiduciary, 
officer, director, or employee of the issuer. 
‘‘(B) The enrollee (or authorized represent-
ative). 
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‘‘(C) The health care professional that pro-
vides the items or services involved in the de-
nial. 
‘‘(D) The institution at which the items or 
services (or treatment) involved in the denial 
are provided. 
‘‘(E) The manufacturer of any drug or 
other item that is included in the items or serv-
ices involved in the denial. 
‘‘(F) Any other party determined under 
any regulations to have a substantial interest in 
the denial involved. 
‘‘(8) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) ENROLLEE.—The term ‘enrollee’ 
means, with respect to health insurance cov-
erage offered by a health insurance issuer, an 
individual enrolled with the issuer to receive 
such coverage. 
‘‘(B) HEALTH CARE PROFESSIONAL.—The 
term ‘health care professional’ means an indi-
vidual who is licensed, accredited, or certified 
under State law to provide specified health care 
services and who is operating within the scope 
of such licensure, accreditation, or certification. 
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‘‘SEC. 2799. ENFORCEMENT. 
‘‘(a) IN GENERAL.—Subject to subsection (b) and ex-
cept as provided in section 601(c) of the American Health 
Care Reform Act of 2013, with respect to specific indi-
vidual health insurance coverage the primary State for 
such coverage has sole jurisdiction to enforce the primary 
State’s covered laws in the primary State and any sec-
ondary State. 
‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 
subsection (a) shall be construed to affect the authority 
of a secondary State to enforce its laws as set forth in 
the exception specified in section 2796(b)(1). 
‘‘(c) COURT INTERPRETATION.—In reviewing action 
initiated by the applicable secondary State authority, the 
court of competent jurisdiction shall apply the covered 
laws of the primary State. 
‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 
of individual health insurance coverage offered in a sec-
ondary State that fails to comply with the covered laws 
of the primary State, the applicable State authority of the 
secondary State may notify the applicable State authority 
of the primary State.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to individual health insurance 
coverage offered, issued, or sold after the date that is one 
year after the date of the enactment of this Act. 
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(c) GAO ONGOING STUDY AND REPORTS.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct an ongoing study con-
cerning the effect of the amendment made by sub-
section (a) on— 
(A) the number of uninsured and under-in-
sured; 
(B) the availability and cost of health in-
surance policies for individuals with pre-existing 
medical conditions; 
(C) the availability and cost of health in-
surance policies generally; 
(D) the elimination or reduction of dif-
ferent types of benefits under health insurance 
policies offered in different States; and 
(E) cases of fraud or abuse relating to 
health insurance coverage offered under such 
amendment and the resolution of such cases. 
(2) ANNUAL REPORTS.—The Comptroller Gen-
eral shall submit to Congress an annual report, after 
the end of each of the 5 years following the effective 
date of the amendment made by subsection (a), on 
the ongoing study conducted under paragraph (1). 
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Subtitle B—McCarran-Ferguson 
Reform 
SEC. 411. RESTORING THE APPLICATION OF ANTITRUST 
LAWS TO HEALTH SECTOR INSURERS. 
(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 
laws with respect to the business of health insurance (in-
cluding the business of dental insurance). For purposes 
of the preceding sentence, the term ‘antitrust laws’ has 
the meaning given it in subsection (a) of the first section 
of the Clayton Act, except that such term includes section 
5 of the Federal Trade Commission Act to the extent that 
such section 5 applies to unfair methods of competition. 
‘‘(2) For purposes of paragraph (1), the term ‘busi-
ness of health insurance (including the business of dental 
insurance)’ does not include— 
‘‘(A) the business of life insurance (including 
annuities); or 
‘‘(B) the business of property or casualty insur-
ance, including but not limited to, any insurance or 
benefits defined as ‘excepted benefits’ under para-
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graph (1), subparagraphs (B) or (C) of paragraph 
(2), or paragraph (3) of section 9832(c) of the In-
ternal Revenue Code of 1986 (26 U.S.C. 9832(c)) 
whether offered separately or in combination with 
insurance or benefits described in paragraph (2)(A) 
of such section.’’. 
(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. 
Subtitle C—Medicare Price 
Transparency 
SEC. 421. PUBLIC AVAILABILITY OF MEDICARE CLAIMS 
DATA. 
(a) IN GENERAL.—Section 1128J of the Social Secu-
rity Act (42 U.S.C. 1320a–7k) is amended by adding at 
the end the following new subsection: 
‘‘(f) PUBLIC AVAILABILITY OF MEDICARE CLAIMS 
DATA.— 
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‘‘(1) IN GENERAL.—The Secretary shall, to the 
extent consistent with applicable information, pri-
vacy, security, and disclosure laws, including the 
regulations promulgated under the Health Insurance 
Portability and Accountability Act of 1996 and sec-
tion 552a of title 5, United States Code, make avail-
able to the public claims and payment data of the 
Department of Health and Human Services related 
to title XVIII, including data on payments made to 
any provider of services or supplier under such title. 
‘‘(2) IMPLEMENTATION.— 
‘‘(A) IN
GENERAL.—Not later than De-
cember 31, 2014, the Secretary shall promul-
gate regulations to carry out this subsection. 
‘‘(B) REQUIREMENTS.—The regulations 
promulgated under subparagraph (A) shall en-
sure that— 
‘‘(i) the data described in paragraph 
(1) is made available to the public through 
a searchable database that the public can 
access at no cost; 
‘‘(ii) such database— 
‘‘(I) includes the amount paid to 
each provider of services or supplier 
under title XVIII, the items or serv-
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ices for which such payment was 
made, and the location of the provider 
of services or supplier; 
‘‘(II) is organized based on the 
specialty or the type of provider of 
services or supplier involved; 
‘‘(III) is searchable based on the 
type of items or services furnished; 
and 
‘‘(IV) includes a disclaimer that 
the aggregate data in the database 
does not reflect on the quality of the 
items or services furnished or of the 
provider of services or supplier who 
furnished the items or services; and 
‘‘(iii) each provider of services or sup-
plier in the database is identified by a 
unique identifier that is available to the 
public (such as the National Provider Iden-
tifier of the provider of services or sup-
plier). 
‘‘(C) SCOPE OF DATA.—The database shall 
include data for fiscal year 2014, and each year 
fiscal year thereafter.’’. 
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(b) INFORMATION NOT EXEMPT UNDER THE FREE-
DOM OF INFORMATION ACT.—The term ‘‘personnel and 
medical files and similar files the disclosure of which 
would constitute a clearly unwarranted invasion of per-
sonal privacy’’, as used in section 552(b)(6) of title 5, 
United States Code, does not include the information re-
quired to be made available to the public under section 
1128J(f) of the Social Security Act, as added by sub-
section (a). 
Subtitle D—State Transparency 
Portals 
SEC. 431. PROVIDING INFORMATION ON HEALTH COV-
ERAGE OPTIONS AND HEALTH CARE PRO-
VIDERS. 
(a) STATE-BASED PORTAL.—A State (by itself or 
jointly with other States) may contract with a private enti-
ty to establish a Health Plan and Provider Portal Web 
site (referred to in this section as a ‘‘plan portal’’) for 
the purposes of providing standardized information— 
(1) on health insurance plans that have been 
certified to be available for purchase in that State; 
and 
(2) on price and quality information on health 
care providers (including physicians, hospitals, and 
other health care institutions). 
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(b) PROHIBITIONS.— 
(1) DIRECT ENROLLMENT.—A plan portal may 
not directly enroll individuals in health insurance 
plans or under a State Medicaid plan or a State 
children’s health insurance plan. 
(2) CONFLICTS OF INTEREST.— 
(A) 
COMPANIES.—A 
health 
insurance 
issuer offering a health insurance plan through 
a plan portal may not— 
(i) be the private entity developing 
and maintaining a plan portal under this 
section; or 
(ii) have an ownership interest in such 
private entity or in the plan portal. 
(B) 
INDIVIDUALS.—An 
individual 
em-
ployed by a health insurance issuer offering a 
health insurance plan through a plan portal 
may not serve as a director or officer for— 
(i) the private entity developing and 
maintaining a plan portal under this sec-
tion; or 
(ii) the plan portal. 
(c) CONSTRUCTION.—Nothing in this section shall be 
construed to prohibit health insurance brokers and agents 
from— 
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(1) utilizing the plan portal for any purpose; or 
(2) marketing or offering health insurance 
products. 
(d) STATE DEFINED.—In this section, the term 
‘‘State’’ has the meaning given such term for purposes of 
title XIX of the Social Security Act. 
(e) HEALTH INSURANCE PLANS.—For purposes of 
this section, the term ‘‘health insurance plan’’ does not 
include coverage of excepted benefits, as defined in section 
2791(c) of the Public Health Service Act (42 U.S.C. 
300gg–91(c)). 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated $50,000,000 for fiscal 
year 2014 to provide funding for the Secretary of Health 
and Human Services to award grants to States to enter 
into contracts to establish a portal plan under this section, 
to remain available until expended. 
Subtitle E—Protecting the Doctor- 
Patient Relationship 
SEC. 441. RULE OF CONSTRUCTION. 
Nothing in this Act shall be construed to interfere 
with the doctor-patient relationship or the practice of med-
icine. 
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SEC. 442. REPEAL OF FEDERAL COORDINATING COUNCIL 
FOR 
COMPARATIVE 
EFFECTIVENESS 
RE-
SEARCH. 
Effective on the date of the enactment of this Act, 
section 804 of the American Recovery and Reinvestment 
Act of 2009 is repealed. 
Subtitle F—Association Health 
Plans 
SEC. 
451. 
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: 
‘‘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-
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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 
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) 
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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-
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). 
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100 
‘‘(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). 
‘‘(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 part, 
‘‘(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 
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101 
employers represent a broad cross-section of trades 
and businesses or industries, or 
‘‘(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-
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. 
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102 
‘‘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 
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.— 
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103 
‘‘(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 
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 
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104 
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 part. 
‘‘(B) SOLE
AUTHORITY.—The board has 
sole authority under the plan to approve appli-
cations for participation in the plan and to con-
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— 
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105 
‘‘(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— 
‘‘(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, 
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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). 
‘‘(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 part, an 
affiliated member of the sponsor of the plan may be of-
fered coverage under the plan as a participating employer 
only if— 
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‘‘(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 
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— 
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‘‘(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: 
‘‘(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— 
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‘‘(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. 
‘‘(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— 
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