H. R. 3762 
One Hundred Fourteenth Congress 
of the 
United States of America 
AT THE SECOND SESSION 
Begun and held at the City of Washington on Monday, 
the fourth day of January, two thousand and sixteen 
An Act 
To provide for reconciliation pursuant to section 2002 of the concurrent resolution 
on the budget for fiscal year 2016. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
TITLE I—HEALTH, EDUCATION, LABOR, 
AND PENSIONS 
SEC. 101. THE PREVENTION AND PUBLIC HEALTH FUND. 
(a) IN GENERAL.—Subsection (b) of section 4002 of the Patient 
Protection and Affordable Care Act (42 U.S.C. 300u–11) is 
amended— 
(1) in paragraph (2), by striking ‘‘2017’’ and inserting 
‘‘2015’’; and 
(2) by striking paragraphs (3) through (5). 
(b) RESCISSION OF UNOBLIGATED FUNDS.—Of the funds made 
available by such section 4002, the unobligated balance is rescinded. 
SEC. 102. COMMUNITY HEALTH CENTER PROGRAM. 
Effective as if included in the enactment of the Medicare Access 
and CHIP Reauthorization Act of 2015 (Public Law 114–10, 129 
Stat. 87), paragraph (1) of section 221(a) of such Act is amended 
by inserting after ‘‘Section 10503(b)(1)(E) of the Patient Protection 
and Affordable Care Act (42 U.S.C. 254b–2(b)(1)(E)) is amended’’ 
the 
following: 
‘‘by 
striking 
‘$3,600,000,000’ 
and 
inserting 
‘$3,835,000,000’ and’’. 
SEC. 103. TERRITORIES. 
Section 1323(c) of the Patient Protection and Affordable Care 
Act (42 U.S.C. 18043(c)) is amended by adding at the end the 
following: 
‘‘(3) NO FORCE AND EFFECT.—Effective January 1, 2018, 
this subsection shall have no force or effect.’’. 
SEC. 104. REINSURANCE, RISK CORRIDOR, AND RISK ADJUSTMENT 
PROGRAMS. 
(a) TRANSITIONAL
REINSURANCE
PROGRAM
FOR
INDIVIDUAL 
MARKET.—Section 1341 of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18061) is amended by adding at the end 
the following: 
‘‘(e) NO FORCE AND EFFECT.—Effective January 1, 2016, the 
Secretary shall not collect fees and shall not make payments under 
this section.’’.
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SEC. 105. SUPPORT FOR STATE RESPONSE TO SUBSTANCE ABUSE 
PUBLIC HEALTH CRISIS AND URGENT MENTAL HEALTH 
NEEDS. 
(a) IN GENERAL.—There are authorized to be appropriated, 
and are appropriated, out of monies in the Treasury not otherwise 
obligated, $750,000,000 for each of fiscal years 2016 and 2017, 
to the Secretary of Health and Human Services (referred to in 
this section as the ‘‘Secretary’’) to award grants to States to address 
the substance abuse public health crisis or to respond to urgent 
mental health needs within the State. In awarding grants under 
this section, the Secretary may give preference to States with an 
incidence or prevalence of substance use disorders that is substan-
tial relative to other States or to States that identify mental health 
needs within their communities that are urgent relative to such 
needs of other States. Funds appropriated under this subsection 
shall remain available until expended. 
(b) USE OF FUNDS.—Grants awarded to a State under sub-
section (a) shall be used for one or more of the following public 
health-related activities: 
(1) Improving State prescription drug monitoring programs. 
(2) Implementing prevention activities, and evaluating such 
activities to identify effective strategies to prevent substance 
abuse. 
(3) Training for health care practitioners, such as best 
practices for prescribing opioids, pain management, recognizing 
potential cases of substance abuse, referral of patients to treat-
ment programs, and overdose prevention. 
(4) Supporting access to health care services provided by 
federally certified opioid treatment programs or other appro-
priate health care providers to treat substance use disorders 
or mental health needs. 
(5) Other public health-related activities, as the State deter-
mines appropriate, related to addressing the substance abuse 
public health crisis or responding to urgent mental health 
needs within the State. 
TITLE II—FINANCE 
SEC. 201. RECAPTURE EXCESS ADVANCE PAYMENTS OF PREMIUM TAX 
CREDITS. 
Subparagraph (B) of section 36B(f)(2) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
clause: 
‘‘(iii) 
NONAPPLICABILITY
OF
LIMITATION.—This 
subparagraph shall not apply to taxable years ending 
after December 31, 2015, and before January 1, 2018.’’. 
SEC. 202. PREMIUM TAX CREDIT AND COST-SHARING SUBSIDIES. 
(a) REPEAL OF PREMIUM TAX CREDIT.—Subpart C of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by striking section 36B. 
(b) REPEAL OF COST-SHARING SUBSIDY.—Section 1402 of the 
Patient Protection and Affordable Care Act is repealed. 
(c) REPEAL
OF ELIGIBILITY DETERMINATIONS.—The following 
sections of the Patient Protection and Affordable Care Act are 
repealed:
H. R. 3762—3 
(1) Section 1411 (other than subsection (i), the last sentence 
of subsection (e)(4)(A)(ii), and such provisions of such section 
solely to the extent related to the application of the last sen-
tence of subsection (e)(4)(A)(ii)). 
(2) Section 1412. 
(d) PROTECTING
AMERICANS
BY
REPEAL
OF
DISCLOSURE 
AUTHORITY TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR CERTAIN 
PROGRAMS.— 
(1) IN GENERAL.—Paragraph (21) of section 6103(l) of the 
Internal Revenue Code of 1986 is amended by adding at the 
end the following new subparagraph: 
‘‘(D) TERMINATION.—No disclosure may be made under 
this paragraph after December 31, 2017.’’. 
(e) EFFECTIVE DATES.— 
(1) PREMIUM TAX CREDIT.—The amendment made by sub-
section (a) shall apply to taxable years beginning after 
December 31, 2017. 
(2) COST SHARING-SUBSIDIES AND ELIGIBILITY DETERMINA-
TIONS.—The repeals in subsection (b) and (c) shall take effect 
on December 31, 2017. 
(3) PROTECTING
AMERICANS
BY
RESCINDING
DISCLOSURE 
AUTHORITY.—The amendments made by subsection (d) shall 
take effect on December 31, 2017. 
SEC. 203. SMALL BUSINESS TAX CREDIT. 
(a) IN GENERAL.—Section 45R of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new sub-
section: 
‘‘(j) SHALL NOT APPLY.—This section shall not apply with 
respect to amounts paid or incurred in taxable years beginning 
after December 31, 2017.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to amounts paid or incurred in taxable years beginning 
after December 31, 2017. 
SEC. 204. INDIVIDUAL MANDATE. 
(a) IN GENERAL.—Section 5000A(c) of the Internal Revenue 
Code of 1986 is amended— 
(1) in paragraph (2)(B) by striking clauses (ii) and (iii) 
and inserting the following: 
‘‘(ii) Zero percent for taxable years beginning after 
2014.’’, and 
(2) in paragraph (3)— 
(A) by striking ‘‘$695’’ in subparagraph (A) and 
inserting ‘‘$0’’, 
(B) by striking ‘‘and $325 for 2015’’ in subparagraph 
(B), and 
(C) by striking subparagraph (D). 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to months beginning after December 31, 2014. 
SEC. 205. EMPLOYER MANDATE. 
(a) IN GENERAL.— 
(1) Paragraph (1) of section 4980H(c) of the Internal Rev-
enue Code of 1986 is amended by inserting ‘‘($0 in the case 
of months beginning after December 31, 2014)’’ after ‘‘$2,000’’.
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(2) Paragraph (1) of section 4980H(b) of the Internal Rev-
enue Code of 1986 is amended by inserting ‘‘($0 in the case 
of months beginning after December 31, 2014)’’ after ‘‘$3,000’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to months beginning after December 31, 2014. 
SEC. 206. FEDERAL PAYMENTS TO STATES. 
(a) IN GENERAL.—Notwithstanding section 504(a), 1902(a)(23), 
1903(a), 2002, 2005(a)(4), 2102(a)(7), or 2105(a)(1) of the Social 
Security Act (42 U.S.C. 704(a), 1396a(a)(23), 1396b(a), 1397a, 
1397d(a)(4), 1397bb(a)(7), 1397ee(a)(1)), or the terms of any Med-
icaid waiver in effect on the date of enactment of this Act that 
is approved under section 1115 or 1915 of the Social Security 
Act (42 U.S.C. 1315, 1396n), for the 1-year period beginning on 
the date of enactment of this Act, no Federal funds provided from 
a program referred to in this subsection that is considered direct 
spending for any year may be made available to a State for pay-
ments to a prohibited entity, whether made directly to the prohib-
ited entity or through a managed care organization under contract 
with the State. 
(b) DEFINITIONS.—In this section: 
(1) PROHIBITED
ENTITY.—The term ‘‘prohibited entity’’ 
means an entity, including its affiliates, subsidiaries, succes-
sors, and clinics— 
(A) that, as of the date of enactment of this Act— 
(i) is an organization described in section 501(c)(3) 
of the Internal Revenue Code of 1986 and exempt 
from tax under section 501(a) of such Code; 
(ii) is an essential community provider described 
in section 156.235 of title 45, Code of Federal Regula-
tions (as in effect on the date of enactment of this 
Act), that is primarily engaged in family planning serv-
ices, reproductive health, and related medical care; 
and 
(iii) provides for abortions, other than an abor-
tion— 
(I) if the pregnancy is the result of an act 
of rape or incest; or 
(II) in the case where a woman suffers from 
a physical disorder, physical injury, or physical 
illness that would, as certified by a physician, place 
the woman in danger of death unless an abortion 
is performed, including a life-endangering physical 
condition caused by or arising from the pregnancy 
itself; and 
(B) for which the total amount of Federal and State 
expenditures under the Medicaid program under title XIX 
of the Social Security Act in fiscal year 2014 made directly 
to the entity and to any affiliates, subsidiaries, successors, 
or clinics of the entity, or made to the entity and to any 
affiliates, subsidiaries, successors, or clinics of the entity 
as part of a nationwide health care provider network, 
exceeded $350,000,000. 
(2) DIRECT SPENDING.—The term ‘‘direct spending’’ has the 
meaning given that term under section 250(c) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
900(c)).
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SEC. 207. MEDICAID. 
The Social Security Act (42 U.S.C. 301 et seq.) is amended— 
(1) in section 1108(g)(5), by striking ‘‘2019’’ and inserting 
‘‘2017’’; 
(2) in section 1902— 
(A) in subsection (a)(10)(A), in each of clauses (i)(VIII) 
and (ii)(XX), by inserting ‘‘and ending December 31, 2017,’’ 
after ‘‘January 1, 2014,’’; 
(B) in subsection (a)(47)(B), by inserting ‘‘and provided 
that any such election shall cease to be effective on January 
1, 2018, and no such election shall be made after that 
date’’ before the semicolon at the end; and 
(C) in subsection (l)(2)(C), by inserting ‘‘and ending 
December 31, 2017,’’ after ‘‘January 1, 2014,’’; 
(3) in each of sections 1902(gg)(2) and 2105(d)(3)(A), by 
striking ‘‘September 30, 2019’’ and inserting ‘‘September 30, 
2017’’; 
(4) in section 1905— 
(A) in the first sentence of subsection (b), by inserting 
‘‘(50 percent on or after January 1, 2018)’’ after ‘‘55 per-
cent’’; 
(B) in subsection (y)(1), by striking the semicolon at 
the end of subparagraph (B) and all that follows through 
‘‘thereafter’’; and 
(C) in subsection (z)(2)— 
(i) in subparagraph (A), by striking ‘‘each year 
thereafter’’ and inserting ‘‘through 2017’’; and 
(ii) in subparagraph (B)(ii), by striking the semi-
colon at the end of subclause (IV) and all that follows 
through ‘‘100 percent’’; 
(5) in section 1915(k)(2), by striking ‘‘during the period 
described in paragraph (1)’’ and inserting ‘‘on or after the 
date referred to in paragraph (1) and before January 1, 2018’’; 
(6) in section 1920(e), by adding at the end the following: 
‘‘This subsection shall not apply after December 31, 2017.’’; 
(7) in section 1937(b)(5), by adding at the end the following: 
‘‘This paragraph shall not apply after December 31, 2017.’’; 
and 
(8) in section 1943(a), by inserting ‘‘and before January 
1, 2018,’’ after ‘‘January 1, 2014,’’. 
SEC. 208. REPEAL OF DSH ALLOTMENT REDUCTIONS. 
Section 1923(f) of the Social Security Act (42 U.S.C. 1396r– 
4(f)) is amended by striking paragraphs (7) and (8). 
SEC. 209. REPEAL OF THE TAX ON EMPLOYEE HEALTH INSURANCE 
PREMIUMS AND HEALTH PLAN BENEFITS. 
(a) IN GENERAL.—Chapter 43 of the Internal Revenue Code 
of 1986 is amended by striking section 4980I. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 210. REPEAL OF TAX ON OVER-THE-COUNTER MEDICATIONS. 
(a) HSAS.—Subparagraph (A) of section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘Such term’’ and 
all that follows through the period.
H. R. 3762—6 
(b) ARCHER MSAS.—Subparagraph (A) of section 220(d)(2) of 
the Internal Revenue Code of 1986 is amended by striking ‘‘Such 
term’’ and all that follows through the period. 
(c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS AND HEALTH 
REIMBURSEMENT ARRANGEMENTS.—Section 106 of the Internal Rev-
enue Code of 1986 is amended by striking subsection (f). 
(d) EFFECTIVE DATES.— 
(1) DISTRIBUTIONS FROM SAVINGS ACCOUNTS.—The amend-
ments made by subsections (a) and (b) shall apply to amounts 
paid with respect to taxable years beginning after December 
31, 2015. 
(2) REIMBURSEMENTS.—The amendment made by sub-
section (c) shall apply to expenses incurred with respect to 
taxable years beginning after December 31, 2015. 
SEC. 211. REPEAL OF TAX ON HEALTH SAVINGS ACCOUNTS. 
(a) HSAS.—Section 223(f)(4)(A) of the Internal Revenue Code 
of 1986 is amended by striking ‘‘20 percent’’ and inserting ‘‘10 
percent’’. 
(b) ARCHER MSAS.—Section 220(f)(4)(A) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘20 percent’’ and inserting 
‘‘15 percent’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to distributions made after December 31, 2015. 
SEC. 212. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO FLEXIBLE 
SPENDING ACCOUNTS. 
(a) IN GENERAL.—Section 125 of the Internal Revenue Code 
of 1986 is amended by striking subsection (i). 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2015. 
SEC. 213. REPEAL OF TAX ON PRESCRIPTION MEDICATIONS. 
Subsection (j) of section 9008 of the Patient Protection and 
Affordable Care Act is amended to read as follows: 
‘‘(j) REPEAL.—This section shall apply to calendar years begin-
ning after December 31, 2010, and ending before January 1, 2016.’’. 
SEC. 214. REPEAL OF MEDICAL DEVICE EXCISE TAX. 
(a) IN GENERAL.—Chapter 32 of the Internal Revenue Code 
of 1986 is amended by striking subchapter E. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to sales in calendar quarters beginning after December 
31, 2015. 
SEC. 215. REPEAL OF HEALTH INSURANCE TAX. 
Subsection (j) of section 9010 of the Patient Protection and 
Affordable Care Act is amended to read as follows: 
‘‘(j) REPEAL.—This section shall apply to calendar years begin-
ning after December 31, 2013, and ending before January 1, 2016.’’. 
SEC. 216. REPEAL OF ELIMINATION OF DEDUCTION FOR EXPENSES 
ALLOCABLE TO MEDICARE PART D SUBSIDY. 
(a) IN GENERAL.—Section 139A of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new sentence: 
‘‘This section shall not be taken into account for purposes of deter-
mining whether any deduction is allowable with respect to any 
cost taken into account in determining such payment.’’.
H. R. 3762—7 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2015. 
SEC. 217. REPEAL OF CHRONIC CARE TAX. 
(a) IN GENERAL.—Subsection (a) of section 213 of the Internal 
Revenue Code of 1986 is amended by striking ‘‘10 percent’’ and 
inserting ‘‘7.5 percent’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2015. 
SEC. 218. REPEAL OF MEDICARE TAX INCREASE. 
(a) IN GENERAL.—Subsection (b) of section 3101 of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(b) HOSPITAL INSURANCE.—In addition to the tax imposed by 
the preceding subsection, there is hereby imposed on the income 
of every individual a tax equal to 1.45 percent of the wages (as 
defined in section 3121(a)) received by such individual with respect 
to employment (as defined in section 3121(b).’’. 
(b) SECA.—Subsection (b) of section 1401 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘(b) HOSPITAL INSURANCE.—In addition to the tax imposed by 
the preceding subsection, there shall be imposed for each taxable 
year, on the self-employment income of every individual, a tax 
equal to 2.9 percent of the amount of the self-employment income 
for such taxable year.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply with respect to remuneration received after, and taxable 
years beginning after, December 31, 2015. 
SEC. 219. REPEAL OF TANNING TAX. 
(a) IN GENERAL.—The Internal Revenue Code of 1986 is 
amended by striking chapter 49. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to services performed on or after December 31, 2015. 
SEC. 220. REPEAL OF NET INVESTMENT TAX. 
(a) IN GENERAL.—Subtitle A of the Internal Revenue Code 
of 1986 is amended by striking chapter 2A. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2015. 
SEC. 221. REMUNERATION. 
Paragraph (6) of section 162(m) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subpara-
graph: 
‘‘(I) TERMINATION.—This paragraph shall not apply to 
taxable years beginning after December 31, 2015.’’. 
SEC. 222. ECONOMIC SUBSTANCE DOCTRINE. 
(a) IN GENERAL.—Subsection (o) of section 7701 of the Internal 
Revenue Code of 1986 is repealed. 
(b) PENALTY FOR UNDERPAYMENTS.—Paragraph (6) of section 
6662(b) of the Internal Revenue Code of 1986 is repealed. 
(c) INCREASED PENALTY FOR NONDISCLOSED TRANSACTIONS.— 
Subsection (i) of section 6662 of the Internal Revenue Code of 
1986 is repealed. 
(d) REASONABLE CAUSE EXCEPTION
FOR UNDERPAYMENTS.— 
Paragraph (2) of section 6664(c) of the Internal Revenue Code 
of 1986 is repealed.
H. R. 3762—8 
(e) REASONABLE CAUSE EXCEPTION FOR NONDISCLOSED TRANS-
ACTIONS.—Paragraph (2) of section 6664(d) of the Internal Revenue 
Code of 1986 is repealed. 
(f) ERRONEOUS CLAIM FOR REFUND OR CREDIT.—Subsection (c) 
of section 6676 of the Internal Revenue Code of 1986 is repealed. 
(g) EFFECTIVE DATE.—The repeals made by this section shall 
apply to transactions entered into, and to underpayments, under-
statements, or refunds and credits attributable to transactions 
entered into, after December 31, 2015. 
SEC. 223. BUDGETARY SAVINGS FOR EXTENDING MEDICARE SOL-
VENCY. 
As a result of policies contained in this Act, the Secretary 
of the Treasury shall transfer to the Federal Hospital Insurance 
Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 
1395i) $379,300,000,000 (which represents the full amount of on- 
budget savings during the period of fiscal years 2016 through 2025) 
for extending Medicare solvency, to remain available until expended. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.