I 
115TH CONGRESS 
1ST SESSION 
H. R. 277 
To repeal the Patient Protection and Affordable Care Act and related rec-
onciliation provisions, to promote patient-centered health care, to provide 
for the creation of a safe harbor for defendants in medical malpractice 
actions who demonstrate adherence to clinical practice guidelines, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 4, 2017 
Mr. ROE of Tennessee (for himself, Mr. WALKER, Mr. ROKITA, Mr. GOSAR, 
Mr. FLORES, Mr. BARR, Mr. CARTER of Georgia, Mr. AUSTIN SCOTT of 
Georgia, Mr. DUNCAN of Tennessee, Mr. HILL, Mr. CHABOT, Mrs. 
BLACKBURN, Mr. ROUZER, Mr. CULBERSON, Mrs. HARTZLER, Mr. 
BABIN, Mr. BUCSHON, and Mr. SCALISE) introduced the following bill; 
which was referred to the Committee on Energy and Commerce, and in 
addition to the Committees on the Budget, Ways and Means, Education 
and the Workforce, the Judiciary, Natural Resources, House Administra-
tion, Rules, Appropriations, and Veterans’ Affairs, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To repeal the Patient Protection and Affordable Care Act 
and related reconciliation provisions, to promote patient- 
centered health care, to provide for the creation of a 
safe harbor for defendants in medical malpractice actions 
who demonstrate adherence to clinical practice guide-
lines, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘American Health Care Reform Act of 2017’’. 
(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. 
Sec. 102. Budgetary effects. 
TITLE II—INCREASING ACCESS TO PORTABLE, AFFORDABLE 
HEALTH INSURANCE 
Sec. 200. Amendment of 1986 Code. 
Subtitle A—Standard Deduction for Health Insurance 
Sec. 201. Standard deduction for health insurance. 
Sec. 202. Changes to existing tax preferences for medical coverage and costs 
for individuals eligible for standard deduction for health 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. 
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Sec. 232. Reauthorization of Medicaid health opportunity accounts. 
Sec. 233. Members of health care sharing ministries eligible to establish health 
savings accounts. 
Sec. 234. High deductible health plans renamed HSA qualified plans. 
Sec. 235. Treatment of direct primary care service arrangements. 
Sec. 236. Certain exercise equipment and physical fitness programs treated as 
medical care. 
Sec. 237. Certain nutritional and dietary supplements to be treated as medical 
care. 
Sec. 238. Certain provider fees to be treated as medical care. 
Sec. 239. Increase the maximum contribution limit to an HSA to match de-
ductible and out-of-pocket expense limitation. 
Sec. 240. Child health savings account. 
Sec. 241. Allowing minimum distributions from tax-deferred retirement ac-
counts to be deposited into HSAs. 
Sec. 242. 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. 
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Sec. 442. Repeal of Federal Coordinating Council for Comparative Effective-
ness Research. 
Subtitle F—Establishing Association Health Plans 
Sec. 451. Rules governing association health plans. 
Sec. 452. Clarification of treatment of single employer arrangements. 
Sec. 453. Enforcement provisions relating to association health plans. 
Sec. 454. Cooperation between Federal and State authorities. 
Sec. 455. Effective date and transitional and other rules. 
Subtitle G—Greater Choice for Veterans 
Sec. 461. Removing barriers to health care choice for Category 1 veterans and 
medal of honor recipients. 
TITLE V—REFORMING MEDICAL LIABILITY LAW 
Sec. 501. Requirements for selection of clinical practice guidelines. 
Sec. 502. Development. 
Sec. 503. No liability for guideline producers. 
Sec. 504. Internet publication of guidelines. 
Sec. 505. State flexibility and protection of States’ rights. 
Sec. 506. Federal cause of action. 
Sec. 507. Right of removal. 
Sec. 508. Mandatory review by independent medical panel. 
Sec. 509. Definitions. 
TITLE VI—OTHER PROVISIONS 
Sec. 601. Respecting human life. 
Sec. 602. Offsets. 
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 on January 1, 2018, the Pa-
tient Protection and Affordable Care Act (Public Law 
111–148) 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. 
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(b) HEALTH CARE-RELATED PROVISIONS IN THE 
HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 
2010.—Effective on January 1, 2018, title I and subtitle 
B of title II of the Health Care and Education Reconcili-
ation Act of 2010 (Public Law 111–152) are repealed, and 
the provisions of law amended or repealed by such title 
or subtitle, respectively, are restored or revived as if such 
title and subtitle had not been enacted. 
SEC. 102. BUDGETARY EFFECTS. 
The budgetary effects of this Act shall not be entered 
on either PAYGO scorecard maintained pursuant to sec-
tion 4(d) of the Statutory Pay-As-You-Go Act of 2010. 
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. 
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‘‘(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— 
‘‘(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-
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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 
(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 
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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 
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. 
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‘‘(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), 
‘‘(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, 
2018, 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. 
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‘‘(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 
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— 
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‘‘(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.’’. 
(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 
paragraphs (9), (10), and (11) 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 
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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.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
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. 
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‘‘(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 
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.— 
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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.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
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. 3512. 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). 
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‘‘(3) The amount of wages determined under 
section 3306(b). 
‘‘(b) DETERMINATION
OF STANDARD DEDUCTION 
ALLOCABLE TO A PERIOD.—For purposes of subsection 
(a)— 
‘‘(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.— 
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‘‘(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 
respect to any employee for one 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 
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with the employee’s return of Federal income tax for 
the taxable year. 
‘‘(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 
3512. 
‘‘(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 3512.’’. 
(c) CONFORMING AMENDMENTS.— 
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(5) The table of sections for chapter 25 is 
amended by adding at the end the following new 
item: 
‘‘Sec. 3512. 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, 2017. 
(2) RECONCILIATION AND SELF-EMPLOYED.— 
Sections 3512(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, 2017. 
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 (13), 
by striking the period at the end of paragraph (14) and 
inserting ‘‘, and’’, and by inserting after paragraph (14) 
the following new paragraph: 
‘‘(15) 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 (15).’’. 
(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, 2017. 
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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 after 
December 31, 2017. 
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 
December 31, 2017. 
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 
December 31, 2017. 
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 
December 31, 2017. 
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 
December 31, 2017. 
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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 chapter 55 of title 10, United 
States Code, 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 
December 31, 2017. 
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 
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(3) by inserting after clause (iii) the following 
new clause: 
‘‘(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 
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than preventive care as defined in 
paragraph (2)(C), 
‘‘(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-
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tion or, if later, on the date of the in-
dividual enrolls in a high deductible 
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-
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ant to a qualified HSA distribution (as defined 
in section 106(e)(2)).’’. 
(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. 
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‘‘(ii) DISTRIBUTIONS FROM A HEALTH 
REIMBURSEMENT
ARRANGEMENT.—A 
qualified HSA distribution from a health 
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.’’. 
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(e) ELIMINATION OF ADDITIONAL TAX FOR FAILURE 
TO MAINTAIN HIGH DEDUCTIBLE HEALTH PLAN COV-
ERAGE.—Subsection (e) of section 106 is amended— 
(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-
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rangement or health reimbursement arrangement, 
and without requiring any change in coverage to in-
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 
2017, 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 2016’ 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.’’. 
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(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), 
(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 
December 31, 2017. 
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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-
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)), 
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‘‘(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 
‘‘(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 December 31, 2017. 
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 
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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 
‘‘(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 
December 31, 2017. 
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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 
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 
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11, United States Code, after the date of the enactment 
of this Act. 
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.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
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 
again on January 1, 2016. The Secretary shall ap-
prove States to conduct demonstration programs 
under this section for a 5-year period, with each 
State demonstration 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 program conducted under this section 
by the State, unless the Secretary finds, taking into 
account cost-effectiveness and quality of care, that 
the State demonstration program has been unsuc-
cessful, the demonstration program may be extended 
or made permanent in the State.’’; and 
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(B) in paragraph (3), in the matter pre-
ceding subparagraph (A)— 
(i) by striking ‘‘not’’; and 
(ii) by striking ‘‘unless’’ and inserting 
‘‘if’’; 
(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) in paragraph (6), by striking ‘‘Subject 
to subparagraphs (D) and (E)’’ and inserting 
‘‘Subject to subparagraph (D)’’; 
(B) by striking paragraphs (3) and (4); 
and 
(C) 
by 
redesignating 
paragraphs 
(5) 
through (8) as paragraphs (3) through (6), re-
spectively; and 
(4) in subsection (d)— 
(A) in paragraph (2), by striking subpara-
graph (E); and 
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(B) in paragraph (3)— 
(i) in subparagraph (A)(ii), by strik-
ing ‘‘Subject to subparagraph (B)(ii), in’’ 
and inserting ‘‘In’’; and 
(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).’’. 
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(b) CONFORMING AMENDMENT.—Section 613 of the 
Children’s Health Insurance Program Reauthorization 
Act of 2009 (Public Law 111–3; 42 U.S.C. 1396u–8 note) 
is repealed. 
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.— 
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(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 
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 
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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).’’. 
(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 
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‘‘(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 
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 
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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— 
‘‘(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.’’. 
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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. 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-
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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. 
‘‘(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-
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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 
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 
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under insurance (other than permitted in-
surance) of a parent. 
‘‘(B) EXCEPTIONS
FOR
DISABILITY
OR 
DEATH OF CHILD.—If the child becomes dis-
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 
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of a child who file separately, are separated, or are 
not married.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 241. ALLOWING MINIMUM DISTRIBUTIONS FROM TAX- 
DEFERRED RETIREMENT ACCOUNTS TO BE 
DEPOSITED INTO HSAS. 
(a) TRANSFER FROM RETIREMENT PLAN.— 
(1) INDIVIDUAL RETIREMENT ACCOUNTS.—Sec-
tion 408(d) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(10) 
REQUIRED
MINIMUM
DISTRIBUTION 
TRANSFERRED TO HEALTH SAVINGS ACCOUNT.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who has attained the age of 701⁄2 and 
who elects the application of this paragraph for 
a taxable year, gross income of the individual 
for the taxable year does not include a qualified 
HSA transfer to the extent such transfer is oth-
erwise includible in gross income. 
‘‘(B) QUALIFIED
HSA
TRANSFER.—For 
purposes of this paragraph, the term ‘qualified 
HSA transfer’ means any distribution from an 
individual retirement plan— 
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‘‘(i) to a health savings account of the 
individual in a direct trustee-to-trustee 
transfer, and 
‘‘(ii) to the extent such distribution 
does not exceed the required minimum dis-
tribution 
determined 
under 
section 
401(a)(9) for the distribution calendar 
year ending during the taxable year. 
‘‘(C) APPLICATION OF SECTION 72.—Not-
withstanding section 72, in determining the ex-
tent to which an amount is treated as a dis-
tribution for purposes of paragraph (1), the en-
tire amount of the distribution shall be treated 
as includible in gross income without regard to 
paragraph (1) to the extent that such amount 
does not exceed the aggregate amount which 
would have been so includible if all amounts in 
all individual retirement plans of the individual 
were distributed during such taxable year and 
all such plans were treated as 1 contract for 
purposes of determining under section 72 the 
aggregate amount which would have been so in-
cludible. Proper adjustments shall be made in 
applying section 72 to other distributions in 
such taxable year and subsequent taxable years. 
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‘‘(D) COORDINATION.—An election may 
not be made under subparagraph (A) for a tax-
able year for which an election is in effect 
under paragraph (9).’’. 
(2) OTHER RETIREMENT PLANS.—Section 402 
of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection: 
‘‘(m) REQUIRED MINIMUM DISTRIBUTION TRANS-
FERRED TO HEALTH SAVINGS ACCOUNT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
who has attained the age of 701⁄2 and who elects the 
application of this subsection for a taxable year, 
gross income of the individual for the taxable year 
does not include a qualified HSA transfer to the ex-
tent such transfer is otherwise includible in gross in-
come. 
‘‘(2) QUALIFIED
HSA
TRANSFER.—For pur-
poses of this subsection, the term ‘qualified HSA 
transfer’ means any distribution from an individual 
retirement plan— 
‘‘(A) to a health savings account of the in-
dividual in a direct trustee-to-trustee transfer, 
and 
‘‘(B) to the extent such distribution does 
not exceed the required minimum distribution 
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determined under section 401(a)(9) for the dis-
tribution calendar year ending during the tax-
able year. 
‘‘(3) APPLICATION OF SECTION 72.—Notwith-
standing section 72, in determining the extent to 
which an amount is treated as a distribution for 
purposes of paragraph (1), the entire amount of the 
distribution shall be treated as includible in gross in-
come without regard to paragraph (1) to the extent 
that such amount does not exceed the aggregate 
amount which would have been so includible if all 
amounts in all eligible retirement plans of the indi-
vidual were distributed during such taxable year and 
all such plans were treated as 1 contract for pur-
poses of determining under section 72 the aggregate 
amount which would have been so includible. Proper 
adjustments shall be made in applying section 72 to 
other distributions in such taxable year and subse-
quent taxable years. 
‘‘(4) ELIGIBLE RETIREMENT PLAN.—For pur-
poses of this subsection, the term ‘eligible retirement 
plan’ has the meaning given such term by subsection 
(c)(8)(B) (determined without regard to clauses (i) 
and (ii) thereof).’’. 
(b) TRANSFER TO HEALTH SAVINGS ACCOUNT.— 
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(1) IN GENERAL.—Subparagraph (A) of section 
223(d)(1) is amended by striking ‘‘or’’ at the end of 
clause (i), by striking the period at the end of clause 
(ii)(II) and inserting ‘‘, or’’, and by adding at the 
end the following new clause: 
‘‘(iii) unless it is in a qualified HSA 
transfer described in section 408(d)(10) or 
402(m).’’. 
(2) EXCISE TAX INAPPLICABLE TO QUALIFIED 
HSA TRANSFER.—Paragraph (1) of section 4973(g) 
is amended by inserting ‘‘or in a qualified HSA 
transfer described in section 408(d)(10) or 402(m)’’ 
after ‘‘or 223(f)(5)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made after the 
date of the enactment of this Act, in taxable years ending 
after such date. 
SEC. 242. 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.— 
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‘‘(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 
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.’’. 
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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. 
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 at the 
end the following flush sentence: 
‘‘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 2705(b)(2) 
of the Public Health Service Act (42 U.S.C. 300gg– 
4(b)(2)) is amended by adding at the end the fol-
lowing flush sentence: 
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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.’’. 
(3) IRC AMENDMENT.—Section 9802(b)(2) of 
the Internal Revenue Code of 1986 is amended by 
adding at the end the following flush sentence: 
‘‘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 
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. 
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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)— 
(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). 
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(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect 2 years after the date of 
the enactment 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, 2017, for the State’s costs of creation and 
initial operation of such a pool.’’; 
(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 2016,’’after ‘‘applicable standard risks,’’; 
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(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 2018, 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 
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 
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(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 2018.—There are authorized to be ap-
propriated for fiscal year 2018— 
‘‘(A) $50,000,000 to carry out the second 
sentence of subsection (a); and 
‘‘(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 2019 THROUGH 2027.—There are au-
thorized to be appropriated $2,500,000,000 for each 
of fiscal years 2019 through 2027 which, subject to 
paragraph (6), shall be made available for allotments 
under subsection (b)(2).’’. 
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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-
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 
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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 
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 
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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.— 
‘‘(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; 
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‘‘(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. 
‘‘(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 
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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. 
‘‘(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-
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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-
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-
quest 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, 
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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. 
‘‘(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. 
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‘‘(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-
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-
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