mit the acts or omissions specified in this para-
graph. 
‘‘SEC. 2796. APPLICATION OF LAW. 
‘‘(a) IN GENERAL.—Subject to section 701(d) of the 
American Health Care Reform Act of 2015, the covered 
laws of the primary State shall apply to individual health 
insurance coverage offered by a health insurance issuer 
in the primary State and in any secondary State, but only 
if the coverage and issuer comply with the conditions of 
this section with respect to the offering of coverage in any 
secondary State. 
‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC-
ONDARY STATE.—Except as provided in this section, a 
health insurance issuer with respect to its offer, sale, rat-
ing (including medical underwriting), renewal, and 
issuance of individual health insurance coverage in any 
secondary State is exempt from any covered laws of the 
secondary State (and any rules, regulations, agreements, 
or orders sought or issued by such State under or related 
to such covered laws) to the extent that such laws would— 
‘‘(1) make unlawful, or regulate, directly or in-
directly, the operation of the health insurance issuer 
operating in the secondary State, except that any 
secondary State may require such an issuer— 
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‘‘(A) to pay, on a nondiscriminatory basis, 
applicable premium and other taxes (including 
high risk pool assessments) which are levied on 
insurers and surplus lines insurers, brokers, or 
policyholders under the laws of the State; 
‘‘(B) to register with and designate the 
State insurance commissioner as its agent solely 
for the purpose of receiving service of legal doc-
uments or process; 
‘‘(C) to submit to an examination of its fi-
nancial condition by the State insurance com-
missioner in any State in which the issuer is 
doing business to determine the issuer’s finan-
cial condition, if— 
‘‘(i) the State insurance commissioner 
of the primary State has not done an ex-
amination within the period recommended 
by the National Association of Insurance 
Commissioners; and 
‘‘(ii) any such examination is con-
ducted in accordance with the examiners’ 
handbook of the National Association of 
Insurance Commissioners and is coordi-
nated to avoid unjustified duplication and 
unjustified repetition; 
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‘‘(D) to comply with a lawful order 
issued— 
‘‘(i) in a delinquency proceeding com-
menced by the State insurance commis-
sioner if there has been a finding of finan-
cial impairment under subparagraph (C); 
or 
‘‘(ii) in a voluntary dissolution pro-
ceeding; 
‘‘(E) to comply with an injunction issued 
by a court of competent jurisdiction, upon a pe-
tition by the State insurance commissioner al-
leging that the issuer is in hazardous financial 
condition; 
‘‘(F) to participate, on a nondiscriminatory 
basis, in any insurance insolvency guaranty as-
sociation or similar association to which a 
health insurance issuer in the State is required 
to belong; 
‘‘(G) to comply with any State law regard-
ing fraud and abuse (as defined in section 
2795(10)), except that if the State seeks an in-
junction regarding the conduct described in this 
subparagraph, such injunction must be obtained 
from a court of competent jurisdiction; 
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‘‘(H) to comply with any State law regard-
ing unfair claims settlement practices (as de-
fined in section 2795(9)); or 
‘‘(I) to comply with the applicable require-
ments for independent review under section 
2798 with respect to coverage offered in the 
State; 
‘‘(2) require any individual health insurance 
coverage issued by the issuer to be countersigned by 
an insurance agent or broker residing in that Sec-
ondary State; or 
‘‘(3) otherwise discriminate against the issuer 
issuing insurance in both the primary State and in 
any secondary State. 
‘‘(c) CLEAR
AND CONSPICUOUS DISCLOSURE.—A 
health insurance issuer shall provide the following notice, 
in 12-point bold type, in any insurance coverage offered 
in a secondary State under this part by such a health in-
surance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the 
name of the health insurance issuer, the name of primary 
State, the name of the secondary State, the name of the 
secondary State, and the name of the secondary State, re-
spectively, for the coverage concerned: 
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‘‘ ‘NOTICE 
‘‘ ‘This policy is issued by lllll and is gov-
erned by the laws and regulations of the State of 
lllll, and it has met all the laws of that State as 
determined by that State’s Department of Insurance. This 
policy may be less expensive than others because it is not 
subject to all of the insurance laws and regulations of the 
State of lllll, including coverage of some services 
or benefits mandated by the law of the State of 
lllll. Additionally, this policy is not subject to all 
of the consumer protection laws or restrictions on rate 
changes of the State of lllll. As with all insurance 
products, before purchasing this policy, you should care-
fully review the policy and determine what health care 
services the policy covers and what benefits it provides, 
including any exclusions, limitations, or conditions for 
such services or benefits.’. 
‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS 
AND PREMIUM INCREASES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, a health insurance issuer that provides indi-
vidual health insurance coverage to an individual 
under this part in a primary or secondary State may 
not upon renewal— 
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‘‘(A) move or reclassify the individual in-
sured under the health insurance coverage from 
the class such individual is in at the time of 
issue of the contract based on the health-status 
related factors of the individual; or 
‘‘(B) increase the premiums assessed the 
individual for such coverage based on a health 
status-related factor or change of a health sta-
tus-related factor or the past or prospective 
claim experience of the insured individual. 
‘‘(2) CONSTRUCTION.—Nothing in paragraph 
(1) shall be construed to prohibit a health insurance 
issuer— 
‘‘(A) from terminating or discontinuing 
coverage or a class of coverage in accordance 
with subsections (b) and (c) of section 2742; 
‘‘(B) from raising premium rates for all 
policy holders within a class based on claims ex-
perience; 
‘‘(C) from changing premiums or offering 
discounted premiums to individuals who engage 
in wellness activities at intervals prescribed by 
the issuer, if such premium changes or incen-
tives— 
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‘‘(i) are disclosed to the consumer in 
the insurance contract; 
‘‘(ii) are based on specific wellness ac-
tivities that are not applicable to all indi-
viduals; and 
‘‘(iii) are not obtainable by all individ-
uals to whom coverage is offered; 
‘‘(D) from reinstating lapsed coverage; or 
‘‘(E) from retroactively adjusting the rates 
charged an insured individual if the initial rates 
were set based on material misrepresentation by 
the individual at the time of issue. 
‘‘(e) PRIOR OFFERING
OF POLICY
IN PRIMARY 
STATE.—A health insurance issuer may not offer for sale 
individual health insurance coverage in a secondary State 
unless that coverage is currently offered for sale in the 
primary State. 
‘‘(f) LICENSING
OF AGENTS
OR BROKERS
FOR 
HEALTH INSURANCE ISSUERS.—Any State may require 
that a person acting, or offering to act, as an agent or 
broker for a health insurance issuer with respect to the 
offering of individual health insurance coverage obtain a 
license from that State, with commissions or other com-
pensation subject to the provisions of the laws of that 
State, except that a State may not impose any qualifica-
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tion or requirement which discriminates against a non-
resident agent or broker. 
‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN-
SURANCE COMMISSIONER.—Each health insurance issuer 
issuing individual health insurance coverage in both pri-
mary and secondary States shall submit— 
‘‘(1) to the insurance commissioner of each 
State in which it intends to offer such coverage, be-
fore it may offer individual health insurance cov-
erage in such State— 
‘‘(A) a copy of the plan of operation or fea-
sibility study or any similar statement of the 
policy being offered and its coverage (which 
shall include the name of its primary State and 
its principal place of business); 
‘‘(B) written notice of any change in its 
designation of its primary State; and 
‘‘(C) written notice from the issuer of the 
issuer’s compliance with all the laws of the pri-
mary State; and 
‘‘(2) to the insurance commissioner of each sec-
ondary State in which it offers individual health in-
surance coverage, a copy of the issuer’s quarterly fi-
nancial statement submitted to the primary State, 
which statement shall be certified by an independent 
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public accountant and contain a statement of opin-
ion on loss and loss adjustment expense reserves 
made by— 
‘‘(A) a member of the American Academy 
of Actuaries; or 
‘‘(B) a qualified loss reserve specialist. 
‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 
Nothing in this section shall be construed to affect the 
authority of any Federal or State court to enjoin— 
‘‘(1) the solicitation or sale of individual health 
insurance coverage by a health insurance issuer to 
any person or group who is not eligible for such in-
surance; or 
‘‘(2) the solicitation or sale of individual health 
insurance coverage that violates the requirements of 
the law of a secondary State which are described in 
subparagraphs 
(A) 
through 
(H) 
of 
section 
2796(b)(1). 
‘‘(i) POWER OF SECONDARY STATES TO TAKE AD-
MINISTRATIVE ACTION.—Nothing in this section shall be 
construed to affect the authority of any State to enjoin 
conduct in violation of that State’s laws described in sec-
tion 2796(b)(1). 
‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 
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‘‘(1) IN GENERAL.—Subject to the provisions of 
subsection (b)(1)(G) (relating to injunctions) and 
paragraph (2), nothing in this section shall be con-
strued to affect the authority of any State to make 
use of any of its powers to enforce the laws of such 
State with respect to which a health insurance issuer 
is not exempt under subsection (b). 
‘‘(2) COURTS OF COMPETENT JURISDICTION.— 
If a State seeks an injunction regarding the conduct 
described in paragraphs (1) and (2) of subsection 
(h), such injunction must be obtained from a Fed-
eral or State court of competent jurisdiction. 
‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 
section shall affect the authority of any State to bring ac-
tion in any Federal or State court. 
‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 
this section shall be construed to affect the applicability 
of State laws generally applicable to persons or corpora-
tions. 
‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO 
HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 
health insurance issuer is offering coverage in a primary 
State that does not accommodate residents of secondary 
States or does not provide a working mechanism for resi-
dents of a secondary State, and the issuer is offering cov-
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erage under this part in such secondary State which has 
not adopted a qualified high risk pool as its acceptable 
alternative mechanism (as defined in section 2744(c)(2)), 
the issuer shall, with respect to any individual health in-
surance coverage offered in a secondary State under this 
part, comply with the guaranteed availability requirements 
for eligible individuals in section 2741. 
‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 
BEFORE ISSUER MAY SELL INTO SECONDARY 
STATES. 
‘‘A health insurance issuer may not offer, sell, or 
issue individual health insurance coverage in a secondary 
State if the State insurance commissioner does not use 
a risk-based capital formula for the determination of cap-
ital and surplus requirements for all health insurance 
issuers. 
‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE-
DURES. 
‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur-
ance issuer may not offer, sell, or issue individual health 
insurance coverage in a secondary State under the provi-
sions of this title unless— 
‘‘(1) both the secondary State and the primary 
State have legislation or regulations in place estab-
lishing an independent review process for individuals 
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who are covered by individual health insurance cov-
erage, or 
‘‘(2) in any case in which the requirements of 
subparagraph (A) are not met with respect to the ei-
ther of such States, the issuer provides an inde-
pendent review mechanism substantially identical (as 
determined by the applicable State authority of such 
State) to that prescribed in the ‘Health Carrier Ex-
ternal Review Model Act’ of the National Association 
of Insurance Commissioners for all individuals who 
purchase insurance coverage under the terms of this 
part, except that, under such mechanism, the review 
is conducted by an independent medical reviewer, or 
a panel of such reviewers, with respect to whom the 
requirements of subsection (b) are met. 
‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL 
REVIEWERS.—In the case of any independent review 
mechanism referred to in subsection (a)(2)— 
‘‘(1) IN GENERAL.—In referring a denial of a 
claim to an independent medical reviewer, or to any 
panel of such reviewers, to conduct independent 
medical review, the issuer shall ensure that— 
‘‘(A) each independent medical reviewer 
meets the qualifications described in paragraphs 
(2) and (3); 
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‘‘(B) with respect to each review, each re-
viewer meets the requirements of paragraph (4) 
and the reviewer, or at least 1 reviewer on the 
panel, meets the requirements described in 
paragraph (5); and 
‘‘(C) compensation provided by the issuer 
to each reviewer is consistent with paragraph 
(6). 
‘‘(2) LICENSURE AND EXPERTISE.—Each inde-
pendent medical reviewer shall be a physician 
(allopathic or osteopathic) or health care profes-
sional who— 
‘‘(A) is appropriately credentialed or li-
censed in 1 or more States to deliver health 
care services; and 
‘‘(B) typically treats the condition, makes 
the diagnosis, or provides the type of treatment 
under review. 
‘‘(3) INDEPENDENCE.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each independent medical reviewer 
in a case shall— 
‘‘(i) not be a related party (as defined 
in paragraph (7)); 
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‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with 
such a party; and 
‘‘(iii) not otherwise have a conflict of 
interest with such a party (as determined 
under regulations). 
‘‘(B) EXCEPTION.—Nothing in subpara-
graph (A) shall be construed to— 
‘‘(i) prohibit an individual, solely on 
the basis of affiliation with the issuer, 
from serving as an independent medical re-
viewer if— 
‘‘(I) a non-affiliated individual is 
not reasonably available; 
‘‘(II) the affiliated individual is 
not involved in the provision of items 
or services in the case under review; 
‘‘(III) the fact of such an affili-
ation is disclosed to the issuer and the 
enrollee (or authorized representative) 
and neither party objects; and 
‘‘(IV) the affiliated individual is 
not an employee of the issuer and 
does not provide services exclusively or 
primarily to or on behalf of the issuer; 
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‘‘(ii) prohibit an individual who has 
staff privileges at the institution where the 
treatment involved takes place from serv-
ing as an independent medical reviewer 
merely on the basis of such affiliation if 
the affiliation is disclosed to the issuer and 
the enrollee (or authorized representative), 
and neither party objects; or 
‘‘(iii) prohibit receipt of compensation 
by an independent medical reviewer from 
an entity if the compensation is provided 
consistent with paragraph (6). 
‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL 
IN SAME FIELD.— 
‘‘(A) IN
GENERAL.—In a case involving 
treatment, or the provision of items or serv-
ices— 
‘‘(i) by a physician, a reviewer shall be 
a practicing physician (allopathic or osteo-
pathic) of the same or similar specialty, as 
a physician who, acting within the appro-
priate scope of practice within the State in 
which the service is provided or rendered, 
typically treats the condition, makes the 
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diagnosis, or provides the type of treat-
ment under review; or 
‘‘(ii) by a non-physician health care 
professional, the reviewer, or at least 1 
member of the review panel, shall be a 
practicing non-physician health care pro-
fessional of the same or similar specialty 
as the non-physician health care profes-
sional who, acting within the appropriate 
scope of practice within the State in which 
the service is provided or rendered, typi-
cally treats the condition, makes the diag-
nosis, or provides the type of treatment 
under review. 
‘‘(B) PRACTICING
DEFINED.—For pur-
poses of this paragraph, the term ‘practicing’ 
means, with respect to an individual who is a 
physician or other health care professional, that 
the individual provides health care services to 
individual patients on average at least 2 days 
per week. 
‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 
external review relating to a child, a reviewer shall 
have expertise under paragraph (2) in pediatrics. 
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‘‘(6) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by the issuer to an 
independent medical reviewer in connection with a 
review under this section shall— 
‘‘(A) not exceed a reasonable level; and 
‘‘(B) not be contingent on the decision ren-
dered by the reviewer. 
‘‘(7) RELATED PARTY DEFINED.—For purposes 
of this section, the term ‘related party’ means, with 
respect to a denial of a claim under a coverage relat-
ing to an enrollee, any of the following: 
‘‘(A) The issuer involved, or any fiduciary, 
officer, director, or employee of the issuer. 
‘‘(B) The enrollee (or authorized represent-
ative). 
‘‘(C) The health care professional that pro-
vides the items or services involved in the de-
nial. 
‘‘(D) The institution at which the items or 
services (or treatment) involved in the denial 
are provided. 
‘‘(E) The manufacturer of any drug or 
other item that is included in the items or serv-
ices involved in the denial. 
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‘‘(F) Any other party determined under 
any regulations to have a substantial interest in 
the denial involved. 
‘‘(8) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) ENROLLEE.—The term ‘enrollee’ 
means, with respect to health insurance cov-
erage offered by a health insurance issuer, an 
individual enrolled with the issuer to receive 
such coverage. 
‘‘(B) HEALTH CARE PROFESSIONAL.—The 
term ‘health care professional’ means an indi-
vidual who is licensed, accredited, or certified 
under State law to provide specified health care 
services and who is operating within the scope 
of such licensure, accreditation, or certification. 
‘‘SEC. 2799. ENFORCEMENT. 
‘‘(a) IN GENERAL.—Subject to subsection (b) and 
section 701(d) of the American Health Care Reform Act 
of 2015, with respect to specific individual health insur-
ance coverage the primary State for such coverage has sole 
jurisdiction to enforce the primary State’s covered laws 
in the primary State and any secondary State. 
‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 
subsection (a) shall be construed to affect the authority 
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of a secondary State to enforce its laws as set forth in 
the exception specified in section 2796(b)(1). 
‘‘(c) COURT INTERPRETATION.—In reviewing action 
initiated by the applicable secondary State authority, the 
court of competent jurisdiction shall apply the covered 
laws of the primary State. 
‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 
of individual health insurance coverage offered in a sec-
ondary State that fails to comply with the covered laws 
of the primary State, the applicable State authority of the 
secondary State may notify the applicable State authority 
of the primary State.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to individual health insurance 
coverage offered, issued, or sold after the date that is one 
year after the date of the enactment of this Act. 
(c) GAO ONGOING STUDY AND REPORTS.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct an ongoing study con-
cerning the effect of the amendment made by sub-
section (a) on— 
(A) the number of uninsured and under-in-
sured; 
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(B) the availability and cost of health in-
surance policies for individuals with pre-existing 
medical conditions; 
(C) the availability and cost of health in-
surance policies generally; 
(D) the elimination or reduction of dif-
ferent types of benefits under health insurance 
policies offered in different States; and 
(E) cases of fraud or abuse relating to 
health insurance coverage offered under such 
amendment and the resolution of such cases. 
(2) ANNUAL REPORTS.—The Comptroller Gen-
eral shall submit to Congress an annual report, after 
the end of each of the 5 years following the effective 
date of the amendment made by subsection (a), on 
the ongoing study conducted under paragraph (1). 
Subtitle B—McCarran-Ferguson 
Reform 
SEC. 411. RESTORING THE APPLICATION OF ANTITRUST 
LAWS TO HEALTH SECTOR INSURERS. 
(a) AMENDMENT TO MCCARRAN-FERGUSON ACT.— 
Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), 
commonly known as the McCarran-Ferguson Act, is 
amended by adding at the end the following: 
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‘‘(c)(1) Nothing contained in this Act shall modify, 
impair, or supersede the operation of any of the antitrust 
laws with respect to the business of health insurance (in-
cluding the business of dental insurance). For purposes 
of the preceding sentence, the term ‘antitrust laws’ has 
the meaning given it in subsection (a) of the first section 
of the Clayton Act, except that such term includes section 
5 of the Federal Trade Commission Act to the extent that 
such section 5 applies to unfair methods of competition. 
‘‘(2) For purposes of paragraph (1), the term ‘busi-
ness of health insurance (including the business of dental 
insurance)’ does not include— 
‘‘(A) the business of life insurance (including 
annuities); or 
‘‘(B) the business of property or casualty insur-
ance, including but not limited to, any insurance or 
benefits defined as ‘excepted benefits’ under para-
graph (1), subparagraphs (B) or (C) of paragraph 
(2), or paragraph (3) of section 9832(c) of the In-
ternal Revenue Code of 1986 (26 U.S.C. 9832(c)) 
whether offered separately or in combination with 
insurance or benefits described in paragraph (2)(A) 
of such section.’’. 
(b) RELATED PROVISION.—For purposes of section 
5 of the Federal Trade Commission Act (15 U.S.C. 45) 
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to the extent such section applies to unfair methods of 
competition, section 3(c) of the McCarran-Ferguson Act 
shall apply with respect to the business of health insurance 
without regard to whether such business is carried on for 
profit, notwithstanding the definition of ‘‘Corporation’’ 
contained in section 4 of the Federal Trade Commission 
Act. 
Subtitle C—Medicare Price 
Transparency 
SEC. 421. PUBLIC AVAILABILITY OF MEDICARE CLAIMS 
DATA. 
(a) IN GENERAL.—Section 1128J of the Social Secu-
rity Act (42 U.S.C. 1320a–7k) is amended by adding at 
the end the following new subsection: 
‘‘(f) PUBLIC AVAILABILITY OF MEDICARE CLAIMS 
DATA.— 
‘‘(1) IN GENERAL.—The Secretary shall, to the 
extent consistent with applicable information, pri-
vacy, security, and disclosure laws, including the 
regulations promulgated under the Health Insurance 
Portability and Accountability Act of 1996 and sec-
tion 552a of title 5, United States Code, make avail-
able to the public claims and payment data of the 
Department of Health and Human Services related 
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to title XVIII, including data on payments made to 
any provider of services or supplier under such title. 
‘‘(2) IMPLEMENTATION.— 
‘‘(A) IN
GENERAL.—Not later than De-
cember 31, 2015, the Secretary shall promul-
gate regulations to carry out this subsection. 
‘‘(B) REQUIREMENTS.—The regulations 
promulgated under subparagraph (A) shall en-
sure that— 
‘‘(i) the data described in paragraph 
(1) is made available to the public through 
a searchable database that the public can 
access at no cost; 
‘‘(ii) such database— 
‘‘(I) includes the amount paid to 
each provider of services or supplier 
under title XVIII, the items or serv-
ices for which such payment was 
made, and the location of the provider 
of services or supplier; 
‘‘(II) is organized based on the 
specialty or the type of provider of 
services or supplier involved; 
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‘‘(III) is searchable based on the 
type of items or services furnished; 
and 
‘‘(IV) includes a disclaimer that 
the aggregate data in the database 
does not reflect on the quality of the 
items or services furnished or of the 
provider of services or supplier who 
furnished the items or services; and 
‘‘(iii) each provider of services or sup-
plier in the database is identified by a 
unique identifier that is available to the 
public (such as the National Provider Iden-
tifier of the provider of services or sup-
plier). 
‘‘(C) SCOPE OF DATA.—The database shall 
include data for fiscal year 2016, and each year 
fiscal year thereafter.’’. 
(b) INFORMATION NOT EXEMPT UNDER THE FREE-
DOM OF INFORMATION ACT.—The term ‘‘personnel and 
medical files and similar files the disclosure of which 
would constitute a clearly unwarranted invasion of per-
sonal privacy’’, as used in section 552(b)(6) of title 5, 
United States Code, does not include the information re-
quired to be made available to the public under section 
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1128J(f) of the Social Security Act, as added by sub-
section (a). 
Subtitle D—State Transparency 
Portals 
SEC. 431. PROVIDING INFORMATION ON HEALTH COV-
ERAGE OPTIONS AND HEALTH CARE PRO-
VIDERS. 
(a) STATE-BASED PORTAL.—A State (by itself or 
jointly with other States) may contract with a private enti-
ty to establish a Health Plan and Provider Portal Web 
site (referred to in this section as a ‘‘plan portal’’) for 
the purposes of providing standardized information— 
(1) on health insurance plans that have been 
certified to be available for purchase in that State; 
and 
(2) on price and quality information on health 
care providers (including physicians, hospitals, and 
other health care institutions). 
(b) PROHIBITIONS.— 
(1) DIRECT ENROLLMENT.—A plan portal may 
not directly enroll individuals in health insurance 
plans or under a State Medicaid plan or a State 
children’s health insurance plan. 
(2) CONFLICTS OF INTEREST.— 
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100 
(A) 
COMPANIES.—A 
health 
insurance 
issuer offering a health insurance plan through 
a plan portal may not— 
(i) be the private entity developing 
and maintaining a plan portal under this 
section; or 
(ii) have an ownership interest in such 
private entity or in the plan portal. 
(B) 
INDIVIDUALS.—An 
individual 
em-
ployed by a health insurance issuer offering a 
health insurance plan through a plan portal 
may not serve as a director or officer for— 
(i) the private entity developing and 
maintaining a plan portal under this sec-
tion; or 
(ii) the plan portal. 
(c) CONSTRUCTION.—Nothing in this section shall be 
construed to prohibit health insurance brokers and agents 
from— 
(1) utilizing the plan portal for any purpose; or 
(2) marketing or offering health insurance 
products. 
(d) STATE DEFINED.—In this section, the term 
‘‘State’’ has the meaning given such term for purposes of 
title XIX of the Social Security Act. 
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101 
(e) HEALTH INSURANCE PLANS.—For purposes of 
this section, the term ‘‘health insurance plan’’ does not 
include coverage of excepted benefits, as defined in section 
2791(c) of the Public Health Service Act (42 U.S.C. 
300gg–91(c)). 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated $50,000,000 for fiscal 
year 2016 to provide funding for the Secretary of Health 
and Human Services to award grants to States to enter 
into contracts to establish a portal plan under this section, 
to remain available until expended. 
Subtitle E—Protecting the Doctor- 
Patient Relationship 
SEC. 441. RULE OF CONSTRUCTION. 
Nothing in this Act shall be construed to interfere 
with the doctor-patient relationship or the practice of med-
icine. 
SEC. 442. REPEAL OF FEDERAL COORDINATING COUNCIL 
FOR 
COMPARATIVE 
EFFECTIVENESS 
RE-
SEARCH. 
Effective on the date of the enactment of this Act, 
section 804 of the American Recovery and Reinvestment 
Act of 2009 (42 U.S.C. 299b–8) is repealed. 
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102 
Subtitle F—Establishing 
Association Health Plans 
SEC. 
451. 
RULES 
GOVERNING 
ASSOCIATION 
HEALTH 
PLANS. 
(a) IN GENERAL.—Subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974 is amend-
ed by adding after part 7 the following new part: 
‘‘PART 8—RULES GOVERNING ASSOCIATION 
HEALTH PLANS 
‘‘SEC. 801. ASSOCIATION HEALTH PLANS. 
‘‘(a) IN GENERAL.—For purposes of this part, the 
term ‘association health plan’ means a group health plan 
whose sponsor is (or is deemed under this part to be) de-
scribed in subsection (b). 
‘‘(b) SPONSORSHIP.—The sponsor of a group health 
plan is described in this subsection if such sponsor— 
‘‘(1) is organized and maintained in good faith, 
with a constitution and bylaws specifically stating its 
purpose and providing for periodic meetings on at 
least an annual basis, as a bona fide trade associa-
tion, a bona fide industry association (including a 
rural electric cooperative association or a rural tele-
phone cooperative association), a bona fide profes-
sional association, or a bona fide chamber of com-
merce (or similar bona fide business association, in-
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103 
cluding a corporation or similar organization that 
operates on a cooperative basis (within the meaning 
of section 1381 of the Internal Revenue Code of 
1986)), for substantial purposes other than that of 
obtaining or providing medical care; 
‘‘(2) is established as a permanent entity which 
receives the active support of its members and re-
quires for membership payment on a periodic basis 
of dues or payments necessary to maintain eligibility 
for membership in the sponsor; and 
‘‘(3) does not condition membership, such dues 
or payments, or coverage under the plan on the 
basis of health status-related factors with respect to 
the employees of its members (or affiliated mem-
bers), or the dependents of such employees, and does 
not condition such dues or payments on the basis of 
group health plan participation. 
Any sponsor consisting of an association of entities which 
meet the requirements of paragraphs (1), (2), and (3) 
shall be deemed to be a sponsor described in this sub-
section. 
‘‘SEC. 
802. 
CERTIFICATION 
OF 
ASSOCIATION 
HEALTH 
PLANS. 
‘‘(a) IN GENERAL.—The applicable authority shall 
prescribe by regulation a procedure under which, subject 
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104 
to subsection (b), the applicable authority shall certify as-
sociation health plans which apply for certification as 
meeting the requirements of this part. 
‘‘(b) STANDARDS.—Under the procedure prescribed 
pursuant to subsection (a), in the case of an association 
health plan that provides at least one benefit option which 
does not consist of health insurance coverage, the applica-
ble authority shall certify such plan as meeting the re-
quirements of this part only if the applicable authority is 
satisfied that the applicable requirements of this part are 
met (or, upon the date on which the plan is to commence 
operations, will be met) with respect to the plan. 
‘‘(c) REQUIREMENTS APPLICABLE
TO CERTIFIED 
PLANS.—An association health plan with respect to which 
certification under this part is in effect shall meet the ap-
plicable requirements of this part, effective on the date 
of certification (or, if later, on the date on which the plan 
is to commence operations). 
‘‘(d) REQUIREMENTS
FOR
CONTINUED
CERTIFI-
CATION.—The applicable authority may provide by regula-
tion for continued certification of association health plans 
under this part. 
‘‘(e) CLASS CERTIFICATION FOR FULLY INSURED 
PLANS.—The applicable authority shall establish a class 
certification procedure for association health plans under 
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105 
which all benefits consist of health insurance coverage. 
Under such procedure, the applicable authority shall pro-
vide for the granting of certification under this part to 
the plans in each class of such association health plans 
upon appropriate filing under such procedure in connec-
tion with plans in such class and payment of the pre-
scribed fee under section 807(a). 
‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION 
HEALTH PLANS.—An association health plan which offers 
one or more benefit options which do not consist of health 
insurance coverage may be certified under this part only 
if such plan consists of any of the following: 
‘‘(1) a plan which offered such coverage on the 
date of the enactment of this part, 
‘‘(2) a plan under which the sponsor does not 
restrict membership to one or more trades and busi-
nesses or industries and whose eligible participating 
employers represent a broad cross-section of trades 
and businesses or industries, or 
‘‘(3) a plan whose eligible participating employ-
ers represent one or more trades or businesses, or 
one or more industries, consisting of any of the fol-
lowing: agriculture; equipment and automobile deal-
erships; barbering and cosmetology; certified public 
accounting practices; child care; construction; dance, 
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106 
theatrical and orchestra productions; disinfecting 
and pest control; financial services; fishing; food 
service establishments; hospitals; labor organiza-
tions; logging; manufacturing (metals); mining; med-
ical and dental practices; medical laboratories; pro-
fessional consulting services; sanitary services; trans-
portation (local and freight); warehousing; whole-
saling/distributing; or any other trade or business or 
industry which has been indicated as having average 
or above-average risk or health claims experience by 
reason of State rate filings, denials of coverage, pro-
posed premium rate levels, or other means dem-
onstrated by such plan in accordance with regula-
tions. 
‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 
BOARDS OF TRUSTEES. 
‘‘(a) SPONSOR.—The requirements of this subsection 
are met with respect to an association health plan if the 
sponsor has met (or is deemed under this part to have 
met) the requirements of section 801(b) for a continuous 
period of not less than 3 years ending with the date of 
the application for certification under this part. 
‘‘(b) BOARD OF TRUSTEES.—The requirements of 
this subsection are met with respect to an association 
health plan if the following requirements are met: 
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107 
‘‘(1) FISCAL CONTROL.—The plan is operated, 
pursuant to a trust agreement, by a board of trust-
ees which has complete fiscal control over the plan 
and which is responsible for all operations of the 
plan. 
‘‘(2) RULES
OF
OPERATION
AND
FINANCIAL 
CONTROLS.—The board of trustees has in effect 
rules of operation and financial controls, based on a 
3-year plan of operation, adequate to carry out the 
terms of the plan and to meet all requirements of 
this title applicable to the plan. 
‘‘(3) RULES
GOVERNING
RELATIONSHIP
TO 
PARTICIPATING
EMPLOYERS
AND
TO
CONTRAC-
TORS.— 
‘‘(A) BOARD MEMBERSHIP.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clauses (ii) and (iii), the members 
of the board of trustees are individuals se-
lected from individuals who are the owners, 
officers, directors, or employees of the par-
ticipating employers or who are partners in 
the participating employers and actively 
participate in the business. 
‘‘(ii) LIMITATION.— 
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108 
‘‘(I) GENERAL RULE.—Except as 
provided in subclauses (II) and (III), 
no such member is an owner, officer, 
director, or employee of, or partner in, 
a contract administrator or other 
service provider to the plan. 
‘‘(II) LIMITED
EXCEPTION
FOR 
PROVIDERS OF SERVICES SOLELY ON 
BEHALF OF THE SPONSOR.—Officers 
or employees of a sponsor which is a 
service provider (other than a contract 
administrator) to the plan may be 
members of the board if they con-
stitute not more than 25 percent of 
the membership of the board and they 
do not provide services to the plan 
other than on behalf of the sponsor. 
‘‘(III) 
TREATMENT
OF
PRO-
VIDERS
OF
MEDICAL
CARE.—In the 
case of a sponsor which is an associa-
tion whose membership consists pri-
marily of providers of medical care, 
subclause (I) shall not apply in the 
case of any service provider described 
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109 
in subclause (I) who is a provider of 
medical care under the plan. 
‘‘(iii) CERTAIN
PLANS
EXCLUDED.— 
Clause (i) shall not apply to an association 
health plan which is in existence on the 
date of the enactment of this part. 
‘‘(B) SOLE
AUTHORITY.—The board has 
sole authority under the plan to approve appli-
cations for participation in the plan and to con-
tract with a service provider to administer the 
day-to-day affairs of the plan. 
‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In 
the case of a group health plan which is established and 
maintained by a franchiser for a franchise network con-
sisting of its franchisees— 
‘‘(1) the requirements of subsection (a) and sec-
tion 801(a) shall be deemed met if such require-
ments would otherwise be met if the franchiser were 
deemed to be the sponsor referred to in section 
801(b), such network were deemed to be an associa-
tion described in section 801(b), and each franchisee 
were deemed to be a member (of the association and 
the sponsor) referred to in section 801(b); and 
‘‘(2) the requirements of section 804(a)(1) shall 
be deemed met. 
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110 
The Secretary may by regulation define for purposes of 
this subsection the terms ‘franchiser’, ‘franchise network’, 
and ‘franchisee’. 
‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE-
MENTS. 
‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 
requirements of this subsection are met with respect to 
an association health plan if, under the terms of the 
plan— 
‘‘(1) each participating employer must be— 
‘‘(A) a member of the sponsor, 
‘‘(B) the sponsor, or 
‘‘(C) an affiliated member of the sponsor 
with respect to which the requirements of sub-
section (b) are met, 
except that, in the case of a sponsor which is a pro-
fessional association or other individual-based asso-
ciation, if at least one of the officers, directors, or 
employees of an employer, or at least one of the in-
dividuals who are partners in an employer and who 
actively participates in the business, is a member or 
such an affiliated member of the sponsor, partici-
pating employers may also include such employer; 
and 
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111 
‘‘(2) all individuals commencing coverage under 
the plan after certification under this part must 
be— 
‘‘(A) active or retired owners (including 
self-employed individuals), officers, directors, or 
employees of, or partners in, participating em-
ployers; or 
‘‘(B) the beneficiaries of individuals de-
scribed in subparagraph (A). 
‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM-
PLOYEES.—In the case of an association health plan in 
existence on the date of the enactment of this part, an 
affiliated member of the sponsor of the plan may be of-
fered coverage under the plan as a participating employer 
only if— 
‘‘(1) the affiliated member was an affiliated 
member on the date of certification under this part; 
or 
‘‘(2) during the 12-month period preceding the 
date of the offering of such coverage, the affiliated 
member has not maintained or contributed to a 
group health plan with respect to any of its employ-
ees who would otherwise be eligible to participate in 
such association health plan. 
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112 
‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re-
quirements of this subsection are met with respect to an 
association health plan if, under the terms of the plan, 
no participating employer may provide health insurance 
coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer 
under the plan, if such exclusion of the employee from cov-
erage under the plan is based on a health status-related 
factor with respect to the employee and such employee 
would, but for such exclusion on such basis, be eligible 
for coverage under the plan. 
‘‘(d) PROHIBITION
OF DISCRIMINATION AGAINST 
EMPLOYERS
AND EMPLOYEES ELIGIBLE TO PARTICI-
PATE.—The requirements of this subsection are met with 
respect to an association health plan if— 
‘‘(1) under the terms of the plan, all employers 
meeting the preceding requirements of this section 
are eligible to qualify as participating employers for 
all geographically available coverage options, unless, 
in the case of any such employer, participation or 
contribution requirements of the type referred to in 
section 2711 of the Public Health Service Act are 
not met; 
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113 
‘‘(2) upon request, any employer eligible to par-
ticipate is furnished information regarding all cov-
erage options available under the plan; and 
‘‘(3) the applicable requirements of sections 
701, 702, and 703 are met with respect to the plan. 
‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN 
DOCUMENTS, CONTRIBUTION RATES, AND 
BENEFIT OPTIONS. 
‘‘(a) IN GENERAL.—The requirements of this section 
are met with respect to an association health plan if the 
following requirements are met: 
‘‘(1) 
CONTENTS
OF
GOVERNING
INSTRU-
MENTS.—The instruments governing the plan in-
clude a written instrument, meeting the require-
ments of an instrument required under section 
402(a)(1), which— 
‘‘(A) provides that the board of trustees 
serves as the named fiduciary required for plans 
under section 402(a)(1) and serves in the ca-
pacity of a plan administrator (referred to in 
section 3(16)(A)); 
‘‘(B) provides that the sponsor of the plan 
is to serve as plan sponsor (referred to in sec-
tion 3(16)(B)); and 
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114 
‘‘(C) incorporates the requirements of sec-
tion 806. 
‘‘(2) CONTRIBUTION
RATES
MUST
BE
NON-
DISCRIMINATORY.— 
‘‘(A) The contribution rates for any par-
ticipating small employer do not vary on the 
basis of any health status-related factor in rela-
tion to employees of such employer or their 
beneficiaries and do not vary on the basis of the 
type of business or industry in which such em-
ployer is engaged. 
‘‘(B) Nothing in this title or any other pro-
vision of law shall be construed to preclude an 
association health plan, or a health insurance 
issuer offering health insurance coverage in 
connection with an association health plan, 
from— 
‘‘(i) setting contribution rates based 
on the claims experience of the plan; or 
‘‘(ii) varying contribution rates for 
small employers in a State to the extent 
that such rates could vary using the same 
methodology employed in such State for 
regulating premium rates in the small 
group market with respect to health insur-
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115 
ance coverage offered in connection with 
bona fide associations (within the meaning 
of section 2791(d)(3) of the Public Health 
Service Act), 
subject to the requirements of section 702(b) 
relating to contribution rates. 
‘‘(3) FLOOR FOR NUMBER OF COVERED INDI-
VIDUALS
WITH
RESPECT
TO
CERTAIN
PLANS.—If 
any benefit option under the plan does not consist 
of health insurance coverage, the plan has as of the 
beginning of the plan year not fewer than 1,000 par-
ticipants and beneficiaries. 
‘‘(4) MARKETING REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—If a benefit option 
which consists of health insurance coverage is 
offered under the plan, State-licensed insurance 
agents shall be used to distribute to small em-
ployers coverage which does not consist of 
health insurance coverage in a manner com-
parable to the manner in which such agents are 
used to distribute health insurance coverage. 
‘‘(B) 
STATE-LICENSED
INSURANCE 
AGENTS.—For purposes of subparagraph (A), 
the term ‘State-licensed insurance agents’ 
means one or more agents who are licensed in 
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116 
a State and are subject to the laws of such 
State relating to licensure, qualification, test-
ing, examination, and continuing education of 
persons authorized to offer, sell, or solicit 
health insurance coverage in such State. 
‘‘(5) 
REGULATORY
REQUIREMENTS.—Such 
other requirements as the applicable authority deter-
mines are necessary to carry out the purposes of this 
part, which shall be prescribed by the applicable au-
thority by regulation. 
‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO 
DESIGN BENEFIT OPTIONS.—Subject to section 514(d), 
nothing in this part or any provision of State law (as de-
fined in section 514(c)(1)) shall be construed to preclude 
an association health plan, or a health insurance issuer 
offering health insurance coverage in connection with an 
association health plan, from exercising its sole discretion 
in selecting the specific items and services consisting of 
medical care to be included as benefits under such plan 
or coverage, except (subject to section 514) in the case 
of (1) any law to the extent that it is not preempted under 
section 731(a)(1) with respect to matters governed by sec-
tion 711, 712, or 713, (2) any law of the State with which 
filing and approval of a policy type offered by the plan 
was initially obtained to the extent that such law prohibits 
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117 
an exclusion of a specific disease from such coverage, or 
(3) any law described in section 701(d) of the American 
Health Care Reform Act of 2015. 
‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS 
FOR 
SOLVENCY 
FOR 
PLANS 
PROVIDING 
HEALTH BENEFITS IN ADDITION TO HEALTH 
INSURANCE COVERAGE. 
‘‘(a) IN GENERAL.—The requirements of this section 
are met with respect to an association health plan if— 
‘‘(1) the benefits under the plan consist solely 
of health insurance coverage; or 
‘‘(2) if the plan provides any additional benefit 
options which do not consist of health insurance cov-
erage, the plan— 
‘‘(A) establishes and maintains reserves 
with respect to such additional benefit options, 
in amounts recommended by the qualified actu-
ary, consisting of— 
‘‘(i) a reserve sufficient for unearned 
contributions; 
‘‘(ii) a reserve sufficient for benefit li-
abilities which have been incurred, which 
have not been satisfied, and for which risk 
of loss has not yet been transferred, and 
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118 
for expected administrative costs with re-
spect to such benefit liabilities; 
‘‘(iii) a reserve sufficient for any other 
obligations of the plan; and 
‘‘(iv) a reserve sufficient for a margin 
of error and other fluctuations, taking into 
account the specific circumstances of the 
plan; and 
‘‘(B) establishes and maintains aggregate 
and specific excess/stop loss insurance and sol-
vency indemnification, with respect to such ad-
ditional benefit options for which risk of loss 
has not yet been transferred, as follows: 
‘‘(i) The plan shall secure aggregate 
excess/stop loss insurance for the plan with 
an attachment point which is not greater 
than 125 percent of expected gross annual 
claims. The applicable authority may by 
regulation provide for upward adjustments 
in the amount of such percentage in speci-
fied circumstances in which the plan spe-
cifically provides for and maintains re-
serves in excess of the amounts required 
under subparagraph (A). 
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119 
‘‘(ii) The plan shall secure specific ex-
cess/stop loss insurance for the plan with 
an attachment point which is at least equal 
to an amount recommended by the plan’s 
qualified actuary. The applicable authority 
may by regulation provide for adjustments 
in the amount of such insurance in speci-
fied circumstances in which the plan spe-
cifically provides for and maintains re-
serves in excess of the amounts required 
under subparagraph (A). 
‘‘(iii) The plan shall secure indem-
nification insurance for any claims which 
the plan is unable to satisfy by reason of 
a plan termination. 
Any person issuing to a plan insurance described in clause 
(i), (ii), or (iii) of subparagraph (B) shall notify the Sec-
retary of any failure of premium payment meriting can-
cellation of the policy prior to undertaking such a cancella-
tion. Any regulations prescribed by the applicable author-
ity pursuant to clause (i) or (ii) of subparagraph (B) may 
allow for such adjustments in the required levels of excess/ 
stop loss insurance as the qualified actuary may rec-
ommend, taking into account the specific circumstances 
of the plan. 
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‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS 
RESERVES.—In the case of any association health plan de-
scribed in subsection (a)(2), the requirements of this sub-
section are met if the plan establishes and maintains sur-
plus in an amount at least equal to— 
‘‘(1) $500,000, or 
‘‘(2) such greater amount (but not greater than 
$2,000,000) as may be set forth in regulations pre-
scribed by the applicable authority, considering the 
level of aggregate and specific excess/stop loss insur-
ance provided with respect to such plan and other 
factors related to solvency risk, such as the plan’s 
projected levels of participation or claims, the nature 
of the plan’s liabilities, and the types of assets avail-
able to assure that such liabilities are met. 
‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of 
any association health plan described in subsection (a)(2), 
the applicable authority may provide such additional re-
quirements relating to reserves, excess/stop loss insurance, 
and indemnification insurance as the applicable authority 
considers appropriate. Such requirements may be provided 
by regulation with respect to any such plan or any class 
of such plans. 
‘‘(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSUR-
ANCE.—The applicable authority may provide for adjust-
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121 
ments to the levels of reserves otherwise required under 
subsections (a) and (b) with respect to any plan or class 
of plans to take into account excess/stop loss insurance 
provided with respect to such plan or plans. 
‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The 
applicable authority may permit an association health plan 
described in subsection (a)(2) to substitute, for all or part 
of the requirements of this section (except subsection 
(a)(2)(B)(iii)), such security, guarantee, hold-harmless ar-
rangement, or other financial arrangement as the applica-
ble authority determines to be adequate to enable the plan 
to fully meet all its financial obligations on a timely basis 
and is otherwise no less protective of the interests of par-
ticipants and beneficiaries than the requirements for 
which it is substituted. The applicable authority may take 
into account, for purposes of this subsection, evidence pro-
vided by the plan or sponsor which demonstrates an as-
sumption of liability with respect to the plan. Such evi-
dence may be in the form of a contract of indemnification, 
lien, bonding, insurance, letter of credit, recourse under 
applicable terms of the plan in the form of assessments 
of participating employers, security, or other financial ar-
rangement. 
‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT 
OF BENEFITS BY CERTAIN PLANS IN DISTRESS.— 
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122 
‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSO-
CIATION HEALTH PLAN FUND.— 
‘‘(A) IN GENERAL.—In the case of an as-
sociation health plan described in subsection 
(a)(2), the requirements of this subsection are 
met if the plan makes payments into the Asso-
ciation Health Plan Fund under this subpara-
graph when they are due. Such payments shall 
consist of annual payments in the amount of 
$5,000, and, in addition to such annual pay-
ments, such supplemental payments as the Sec-
retary may determine to be necessary under 
paragraph (2). Payments under this paragraph 
are payable to the Fund at the time determined 
by the Secretary. Initial payments are due in 
advance of certification under this part. Pay-
ments shall continue to accrue until a plan’s as-
sets are distributed pursuant to a termination 
procedure. 
‘‘(B) PENALTIES FOR FAILURE TO MAKE 
PAYMENTS.—If any payment is not made by a 
plan when it is due, a late payment charge of 
not more than 100 percent of the payment 
which was not timely paid shall be payable by 
the plan to the Fund. 
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‘‘(C) CONTINUED
DUTY
OF
THE
SEC-
RETARY.—The Secretary shall not cease to 
carry out the provisions of paragraph (2) on ac-
count of the failure of a plan to pay any pay-
ment when due. 
‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE 
EXCESS/STOP LOSS INSURANCE COVERAGE AND IN-
DEMNIFICATION
INSURANCE
COVERAGE
FOR
CER-
TAIN PLANS.—In any case in which the applicable 
authority determines that there is, or that there is 
reason to believe that there will be: (A) a failure to 
take necessary corrective actions under section 
809(a) with respect to an association health plan de-
scribed in subsection (a)(2); or (B) a termination of 
such a plan under section 809(b) or 810(b)(8) (and, 
if the applicable authority is not the Secretary, cer-
tifies such determination to the Secretary), the Sec-
retary shall determine the amounts necessary to 
make payments to an insurer (designated by the 
Secretary) to maintain in force excess/stop loss in-
surance coverage or indemnification insurance cov-
erage for such plan, if the Secretary determines that 
there is a reasonable expectation that, without such 
payments, claims would not be satisfied by reason of 
termination of such coverage. The Secretary shall, to 
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the extent provided in advance in appropriation 
Acts, pay such amounts so determined to the insurer 
designated by the Secretary. 
‘‘(3) ASSOCIATION HEALTH PLAN FUND.— 
‘‘(A) IN GENERAL.—There is established 
on the books of the Treasury a fund to be 
known as the ‘Association Health Plan Fund’. 
The Fund shall be available for making pay-
ments pursuant to paragraph (2). The Fund 
shall be credited with payments received pursu-
ant to paragraph (1)(A), penalties received pur-
suant to paragraph (1)(B); and earnings on in-
vestments of amounts of the Fund under sub-
paragraph (B). 
‘‘(B) INVESTMENT.—Whenever the Sec-
retary determines that the moneys of the fund 
are in excess of current needs, the Secretary 
may request the investment of such amounts as 
the Secretary determines advisable by the Sec-
retary of the Treasury in obligations issued or 
guaranteed by the United States. 
‘‘(g) EXCESS/STOP LOSS INSURANCE.—For purposes 
of this section— 
‘‘(1) AGGREGATE
EXCESS/STOP
LOSS
INSUR-
ANCE.—The term ‘aggregate excess/stop loss insur-
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125 
ance’ means, in connection with an association 
health plan, a contract— 
‘‘(A) under which an insurer (meeting such 
minimum standards as the applicable authority 
may prescribe by regulation) provides for pay-
ment to the plan with respect to aggregate 
claims under the plan in excess of an amount 
or amounts specified in such contract; 
‘‘(B) which is guaranteed renewable; and 
‘‘(C) which allows for payment of pre-
miums by any third party on behalf of the in-
sured plan. 
‘‘(2) SPECIFIC
EXCESS/STOP
LOSS
INSUR-
ANCE.—The term ‘specific excess/stop loss insur-
ance’ means, in connection with an association 
health plan, a contract— 
‘‘(A) under which an insurer (meeting such 
minimum standards as the applicable authority 
may prescribe by regulation) provides for pay-
ment to the plan with respect to claims under 
the plan in connection with a covered individual 
in excess of an amount or amounts specified in 
such contract in connection with such covered 
individual; 
‘‘(B) which is guaranteed renewable; and 
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126 
‘‘(C) which allows for payment of pre-
miums by any third party on behalf of the in-
sured plan. 
‘‘(h) INDEMNIFICATION INSURANCE.—For purposes 
of this section, the term ‘indemnification insurance’ 
means, in connection with an association health plan, a 
contract— 
‘‘(1) under which an insurer (meeting such min-
imum standards as the applicable authority may pre-
scribe by regulation) provides for payment to the 
plan with respect to claims under the plan which the 
plan is unable to satisfy by reason of a termination 
pursuant to section 809(b) (relating to mandatory 
termination); 
‘‘(2) which is guaranteed renewable and 
noncancellable for any reason (except as the applica-
ble authority may prescribe by regulation); and 
‘‘(3) which allows for payment of premiums by 
any third party on behalf of the insured plan. 
‘‘(i) RESERVES.—For purposes of this section, the 
term ‘reserves’ means, in connection with an association 
health plan, plan assets which meet the fiduciary stand-
ards under part 4 and such additional requirements re-
garding liquidity as the applicable authority may prescribe 
by regulation. 
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127 
‘‘(j) SOLVENCY STANDARDS WORKING GROUP.— 
‘‘(1) IN GENERAL.—Within 90 days after the 
date of the enactment of this part, the applicable au-
thority shall establish a Solvency Standards Working 
Group. In prescribing the initial regulations under 
this section, the applicable authority shall take into 
account the recommendations of such Working 
Group. 
‘‘(2) MEMBERSHIP.—The Working Group shall 
consist of not more than 15 members appointed by 
the applicable authority. The applicable authority 
shall include among persons invited to membership 
on the Working Group at least one of each of the 
following: 
‘‘(A) a representative of the National Asso-
ciation of Insurance Commissioners; 
‘‘(B) a representative of the American 
Academy of Actuaries; 
‘‘(C) a representative of the State govern-
ments, or their interests; 
‘‘(D) a representative of existing self-in-
sured arrangements, or their interests; 
‘‘(E) a representative of associations of the 
type referred to in section 801(b)(1), or their 
interests; and 
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‘‘(F) a representative of multiemployer 
plans that are group health plans, or their in-
terests. 
‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE-
LATED REQUIREMENTS. 
‘‘(a) FILING FEE.—Under the procedure prescribed 
pursuant to section 802(a), an association health plan 
shall pay to the applicable authority at the time of filing 
an application for certification under this part a filing fee 
in the amount of $5,000, which shall be available in the 
case of the Secretary, to the extent provided in appropria-
tion Acts, for the sole purpose of administering the certifi-
cation procedures applicable with respect to association 
health plans. 
‘‘(b) INFORMATION TO BE INCLUDED IN APPLICA-
TION FOR CERTIFICATION.—An application for certifi-
cation under this part meets the requirements of this sec-
tion only if it includes, in a manner and form which shall 
be prescribed by the applicable authority by regulation, at 
least the following information: 
‘‘(1) IDENTIFYING INFORMATION.—The names 
and addresses of— 
‘‘(A) the sponsor; and 
‘‘(B) the members of the board of trustees 
of the plan. 
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129 
‘‘(2) STATES IN WHICH PLAN INTENDS TO DO 
BUSINESS.—The States in which participants and 
beneficiaries under the plan are to be located and 
the number of them expected to be located in each 
such State. 
‘‘(3) BONDING REQUIREMENTS.—Evidence pro-
vided by the board of trustees that the bonding re-
quirements of section 412 will be met as of the date 
of the application or (if later) commencement of op-
erations. 
‘‘(4) PLAN DOCUMENTS.—A copy of the docu-
ments governing the plan (including any bylaws and 
trust agreements), the summary plan description, 
and other material describing the benefits that will 
be provided to participants and beneficiaries under 
the plan. 
‘‘(5) 
AGREEMENTS
WITH
SERVICE
PRO-
VIDERS.—A copy of any agreements between the 
plan and contract administrators and other service 
providers. 
‘‘(6) FUNDING REPORT.—In the case of asso-
ciation health plans providing benefits options in ad-
dition to health insurance coverage, a report setting 
forth information with respect to such additional 
benefit options determined as of a date within the 
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120-day period ending with the date of the applica-
tion, including the following: 
‘‘(A) RESERVES.—A statement, certified 
by the board of trustees of the plan, and a 
statement of actuarial opinion, signed by a 
qualified actuary, that all applicable require-
ments of section 806 are or will be met in ac-
cordance with regulations which the applicable 
authority shall prescribe. 
‘‘(B) 
ADEQUACY
OF
CONTRIBUTION 
RATES.—A statement of actuarial opinion, 
signed by a qualified actuary, which sets forth 
a description of the extent to which contribution 
rates are adequate to provide for the payment 
of all obligations and the maintenance of re-
quired reserves under the plan for the 12- 
month period beginning with such date within 
such 120-day period, taking into account the 
expected coverage and experience of the plan. If 
the contribution rates are not fully adequate, 
the statement of actuarial opinion shall indicate 
the extent to which the rates are inadequate 
and the changes needed to ensure adequacy. 
‘‘(C) CURRENT AND PROJECTED VALUE OF 
ASSETS AND LIABILITIES.—A statement of ac-
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131 
tuarial opinion signed by a qualified actuary, 
which sets forth the current value of the assets 
and liabilities accumulated under the plan and 
a projection of the assets, liabilities, income, 
and expenses of the plan for the 12-month pe-
riod referred to in subparagraph (B). The in-
come statement shall identify separately the 
plan’s administrative expenses and claims. 
‘‘(D) 
COSTS
OF
COVERAGE
TO
BE 
CHARGED
AND
OTHER
EXPENSES.—A state-
ment of the costs of coverage to be charged, in-
cluding an itemization of amounts for adminis-
tration, reserves, and other expenses associated 
with the operation of the plan. 
‘‘(E) OTHER
INFORMATION.—Any other 
information as may be determined by the appli-
cable authority, by regulation, as necessary to 
carry out the purposes of this part. 
‘‘(c) FILING
NOTICE
OF
CERTIFICATION
WITH 
STATES.—A certification granted under this part to an 
association health plan shall not be effective unless written 
notice of such certification is filed with the applicable 
State authority of each State in which at least 25 percent 
of the participants and beneficiaries under the plan are 
located. For purposes of this subsection, an individual 
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132 
shall be considered to be located in the State in which a 
known address of such individual is located or in which 
such individual is employed. 
‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 
of any association health plan certified under this part, 
descriptions of material changes in any information which 
was required to be submitted with the application for the 
certification under this part shall be filed in such form 
and manner as shall be prescribed by the applicable au-
thority by regulation. The applicable authority may re-
quire by regulation prior notice of material changes with 
respect to specified matters which might serve as the basis 
for suspension or revocation of the certification. 
‘‘(e) REPORTING REQUIREMENTS FOR CERTAIN AS-
SOCIATION HEALTH PLANS.—An association health plan 
certified under this part which provides benefit options in 
addition to health insurance coverage for such plan year 
shall meet the requirements of section 103 by filing an 
annual report under such section which shall include infor-
mation described in subsection (b)(6) with respect to the 
plan year and, notwithstanding section 104(a)(1)(A), shall 
be filed with the applicable authority not later than 90 
days after the close of the plan year (or on such later date 
as may be prescribed by the applicable authority). The ap-
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133 
plicable authority may require by regulation such interim 
reports as it considers appropriate. 
‘‘(f) ENGAGEMENT OF QUALIFIED ACTUARY.—The 
board of trustees of each association health plan which 
provides benefits options in addition to health insurance 
coverage and which is applying for certification under this 
part or is certified under this part shall engage, on behalf 
of all participants and beneficiaries, a qualified actuary 
who shall be responsible for the preparation of the mate-
rials comprising information necessary to be submitted by 
a qualified actuary under this part. The qualified actuary 
shall utilize such assumptions and techniques as are nec-
essary to enable such actuary to form an opinion as to 
whether the contents of the matters reported under this 
part— 
‘‘(1) are in the aggregate reasonably related to 
the experience of the plan and to reasonable expecta-
tions; and 
‘‘(2) represent such actuary’s best estimate of 
anticipated experience under the plan. 
The opinion by the qualified actuary shall be made with 
respect to, and shall be made a part of, the annual report. 
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134 
‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER-
MINATION. 
‘‘Except as provided in section 809(b), an association 
health plan which is or has been certified under this part 
may terminate (upon or at any time after cessation of ac-
cruals in benefit liabilities) only if the board of trustees, 
not less than 60 days before the proposed termination 
date— 
‘‘(1) provides to the participants and bene-
ficiaries a written notice of intent to terminate stat-
ing that such termination is intended and the pro-
posed termination date; 
‘‘(2) develops a plan for winding up the affairs 
of the plan in connection with such termination in 
a manner which will result in timely payment of all 
benefits for which the plan is obligated; and 
‘‘(3) submits such plan in writing to the appli-
cable authority. 
Actions required under this section shall be taken in such 
form and manner as may be prescribed by the applicable 
authority by regulation. 
‘‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMI-
NATION. 
‘‘(a) ACTIONS
TO
AVOID
DEPLETION
OF
RE-
SERVES.—An association health plan which is certified 
under this part and which provides benefits other than 
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135 
health insurance coverage shall continue to meet the re-
quirements of section 806, irrespective of whether such 
certification continues in effect. The board of trustees of 
such plan shall determine quarterly whether the require-
ments of section 806 are met. In any case in which the 
board determines that there is reason to believe that there 
is or will be a failure to meet such requirements, or the 
applicable authority makes such a determination and so 
notifies the board, the board shall immediately notify the 
qualified actuary engaged by the plan, and such actuary 
shall, not later than the end of the next following month, 
make such recommendations to the board for corrective 
action as the actuary determines necessary to ensure com-
pliance with section 806. Not later than 30 days after re-
ceiving from the actuary recommendations for corrective 
actions, the board shall notify the applicable authority (in 
such form and manner as the applicable authority may 
prescribe by regulation) of such recommendations of the 
actuary for corrective action, together with a description 
of the actions (if any) that the board has taken or plans 
to take in response to such recommendations. The board 
shall thereafter report to the applicable authority, in such 
form and frequency as the applicable authority may speci-
fy to the board, regarding corrective action taken by the 
board until the requirements of section 806 are met. 
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136 
‘‘(b) MANDATORY TERMINATION.—In any case in 
which— 
‘‘(1) the applicable authority has been notified 
under subsection (a) (or by an issuer of excess/stop 
loss insurance or indemnity insurance pursuant to 
section 806(a)) of a failure of an association health 
plan which is or has been certified under this part 
and is described in section 806(a)(2) to meet the re-
quirements of section 806 and has not been notified 
by the board of trustees of the plan that corrective 
action has restored compliance with such require-
ments; and 
‘‘(2) the applicable authority determines that 
there is a reasonable expectation that the plan will 
continue to fail to meet the requirements of section 
806, 
the board of trustees of the plan shall, at the direction 
of the applicable authority, terminate the plan and, in the 
course of the termination, take such actions as the appli-
cable authority may require, including satisfying any 
claims referred to in section 806(a)(2)(B)(iii) and recov-
ering for the plan any liability under subsection 
(a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 
that the affairs of the plan will be, to the maximum extent 
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possible, wound up in a manner which will result in timely 
provision of all benefits for which the plan is obligated. 
‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL-
VENT ASSOCIATION HEALTH PLANS PRO-
VIDING HEALTH BENEFITS IN ADDITION TO 
HEALTH INSURANCE COVERAGE. 
‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR 
INSOLVENT PLANS.—Whenever the Secretary determines 
that an association health plan which is or has been cer-
tified under this part and which is described in section 
806(a)(2) will be unable to provide benefits when due or 
is otherwise in a financially hazardous condition, as shall 
be defined by the Secretary by regulation, the Secretary 
shall, upon notice to the plan, apply to the appropriate 
United States district court for appointment of the Sec-
retary as trustee to administer the plan for the duration 
of the insolvency. The plan may appear as a party and 
other interested persons may intervene in the proceedings 
at the discretion of the court. The court shall appoint such 
Secretary trustee if the court determines that the trustee-
ship is necessary to protect the interests of the partici-
pants and beneficiaries or providers of medical care or to 
avoid any unreasonable deterioration of the financial con-
dition of the plan. The trusteeship of such Secretary shall 
continue until the conditions described in the first sen-
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138 
tence of this subsection are remedied or the plan is termi-
nated. 
‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon 
appointment as trustee under subsection (a), shall have 
the power— 
‘‘(1) to do any act authorized by the plan, this 
title, or other applicable provisions of law to be done 
by the plan administrator or any trustee of the plan; 
‘‘(2) to require the transfer of all (or any part) 
of the assets and records of the plan to the Sec-
retary as trustee; 
‘‘(3) to invest any assets of the plan which the 
Secretary holds in accordance with the provisions of 
the plan, regulations prescribed by the Secretary, 
and applicable provisions of law; 
‘‘(4) to require the sponsor, the plan adminis-
trator, any participating employer, and any employee 
organization representing plan participants to fur-
nish any information with respect to the plan which 
the Secretary as trustee may reasonably need in 
order to administer the plan; 
‘‘(5) to collect for the plan any amounts due the 
plan and to recover reasonable expenses of the trust-
eeship; 
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139 
‘‘(6) to commence, prosecute, or defend on be-
half of the plan any suit or proceeding involving the 
plan; 
‘‘(7) to issue, publish, or file such notices, state-
ments, and reports as may be required by the Sec-
retary by regulation or required by any order of the 
court; 
‘‘(8) to terminate the plan (or provide for its 
termination in accordance with section 809(b)) and 
liquidate the plan assets, to restore the plan to the 
responsibility of the sponsor, or to continue the 
trusteeship; 
‘‘(9) to provide for the enrollment of plan par-
ticipants and beneficiaries under appropriate cov-
erage options; and 
‘‘(10) to do such other acts as may be nec-
essary to comply with this title or any order of the 
court and to protect the interests of plan partici-
pants and beneficiaries and providers of medical 
care. 
‘‘(c) NOTICE OF APPOINTMENT.—As soon as prac-
ticable after the Secretary’s appointment as trustee, the 
Secretary shall give notice of such appointment to— 
‘‘(1) the sponsor and plan administrator; 
‘‘(2) each participant; 
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‘‘(3) each participating employer; and 
‘‘(4) if applicable, each employee organization 
which, for purposes of collective bargaining, rep-
resents plan participants. 
‘‘(d) ADDITIONAL DUTIES.—Except to the extent in-
consistent with the provisions of this title, or as may be 
otherwise ordered by the court, the Secretary, upon ap-
pointment as trustee under this section, shall be subject 
to the same duties as those of a trustee under section 704 
of title 11, United States Code, and shall have the duties 
of a fiduciary for purposes of this title. 
‘‘(e) OTHER PROCEEDINGS.—An application by the 
Secretary under this subsection may be filed notwith-
standing the pendency in the same or any other court of 
any bankruptcy, mortgage foreclosure, or equity receiver-
ship proceeding, or any proceeding to reorganize, conserve, 
or liquidate such plan or its property, or any proceeding 
to enforce a lien against property of the plan. 
‘‘(f) JURISDICTION OF COURT.— 
‘‘(1) IN GENERAL.—Upon the filing of an appli-
cation for the appointment as trustee or the issuance 
of a decree under this section, the court to which the 
application is made shall have exclusive jurisdiction 
of the plan involved and its property wherever lo-
cated with the powers, to the extent consistent with 
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the purposes of this section, of a court of the United 
States having jurisdiction over cases under chapter 
11 of title 11, United States Code. Pending an adju-
dication under this section such court shall stay, and 
upon appointment by it of the Secretary as trustee, 
such court shall continue the stay of, any pending 
mortgage foreclosure, equity receivership, or other 
proceeding to reorganize, conserve, or liquidate the 
plan, the sponsor, or property of such plan or spon-
sor, and any other suit against any receiver, conser-
vator, or trustee of the plan, the sponsor, or prop-
erty of the plan or sponsor. Pending such adjudica-
tion and upon the appointment by it of the Sec-
retary as trustee, the court may stay any proceeding 
to enforce a lien against property of the plan or the 
sponsor or any other suit against the plan or the 
sponsor. 
‘‘(2) VENUE.—An action under this section 
may be brought in the judicial district where the 
sponsor or the plan administrator resides or does 
business or where any asset of the plan is situated. 
A district court in which such action is brought may 
issue process with respect to such action in any 
other judicial district. 
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‘‘(g) PERSONNEL.—In accordance with regulations 
which shall be prescribed by the Secretary, the Secretary 
shall appoint, retain, and compensate accountants, actu-
aries, and other professional service personnel as may be 
necessary in connection with the Secretary’s service as 
trustee under this section. 
‘‘SEC. 811. STATE ASSESSMENT AUTHORITY. 
‘‘(a) IN GENERAL.—Notwithstanding section 514, a 
State may impose by law a contribution tax on an associa-
tion health plan described in section 806(a)(2), if the plan 
commenced operations in such State after the date of the 
enactment of this part. 
‘‘(b) CONTRIBUTION TAX.—For purposes of this sec-
tion, the term ‘contribution tax’ imposed by a State on 
an association health plan means any tax imposed by such 
State if— 
‘‘(1) such tax is computed by applying a rate to 
the amount of premiums or contributions, with re-
spect to individuals covered under the plan who are 
residents of such State, which are received by the 
plan from participating employers located in such 
State or from such individuals; 
‘‘(2) the rate of such tax does not exceed the 
rate of any tax imposed by such State on premiums 
or contributions received by insurers or health main-
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143 
tenance organizations for health insurance coverage 
offered in such State in connection with a group 
health plan; 
‘‘(3) such tax is otherwise nondiscriminatory; 
and 
‘‘(4) the amount of any such tax assessed on 
the plan is reduced by the amount of any tax or as-
sessment otherwise imposed by the State on pre-
miums, contributions, or both received by insurers or 
health maintenance organizations for health insur-
ance coverage, aggregate excess/stop loss insurance 
(as defined in section 806(g)(1)), specific excess/stop 
loss insurance (as defined in section 806(g)(2)), 
other insurance related to the provision of medical 
care under the plan, or any combination thereof pro-
vided by such insurers or health maintenance organi-
zations in such State in connection with such plan. 
‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION. 
‘‘(a) DEFINITIONS.—For purposes of this part— 
‘‘(1) GROUP HEALTH PLAN.—The term ‘group 
health plan’ has the meaning provided in section 
733(a)(1) (after applying subsection (b) of this sec-
tion). 
‘‘(2) MEDICAL CARE.—The term ‘medical care’ 
has the meaning provided in section 733(a)(2). 
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‘‘(3) HEALTH
INSURANCE
COVERAGE.—The 
term ‘health insurance coverage’ has the meaning 
provided in section 733(b)(1). 
‘‘(4) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning provided 
in section 733(b)(2). 
‘‘(5) APPLICABLE AUTHORITY.—The term ‘ap-
plicable authority’ means the Secretary, except that, 
in connection with any exercise of the Secretary’s 
authority regarding which the Secretary is required 
under section 506(d) to consult with a State, such 
term means the Secretary, in consultation with such 
State. 
‘‘(6) HEALTH STATUS-RELATED FACTOR.—The 
term ‘health status-related factor’ has the meaning 
provided in section 733(d)(2). 
‘‘(7) INDIVIDUAL MARKET.— 
‘‘(A) IN GENERAL.—The term ‘individual 
market’ means the market for health insurance 
coverage offered to individuals other than in 
connection with a group health plan. 
‘‘(B) 
TREATMENT
OF
VERY
SMALL 
GROUPS.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), such term includes coverage offered in 
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connection with a group health plan that 
has fewer than 2 participants as current 
employees or participants described in sec-
tion 732(d)(3) on the first day of the plan 
year. 
‘‘(ii) STATE
EXCEPTION.—Clause (i) 
shall not apply in the case of health insur-
ance coverage offered in a State if such 
State regulates the coverage described in 
such clause in the same manner and to the 
same extent as coverage in the small group 
market (as defined in section 2791(e)(5) of 
the Public Health Service Act) is regulated 
by such State. 
‘‘(8) PARTICIPATING
EMPLOYER.—The term 
‘participating employer’ means, in connection with 
an association health plan, any employer, if any indi-
vidual who is an employee of such employer, a part-
ner in such employer, or a self-employed individual 
who is such employer (or any dependent, as defined 
under the terms of the plan, of such individual) is 
or was covered under such plan in connection with 
the status of such individual as such an employee, 
partner, or self-employed individual in relation to the 
plan. 
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146 
‘‘(9) APPLICABLE
STATE
AUTHORITY.—The 
term ‘applicable State authority’ means, with respect 
to a health insurance issuer in a State, the State in-
surance commissioner or official or officials des-
ignated by the State to enforce the requirements of 
title XXVII of the Public Health Service Act for the 
State involved with respect to such issuer. 
‘‘(10) QUALIFIED ACTUARY.—The term ‘quali-
fied actuary’ means an individual who is a member 
of the American Academy of Actuaries. 
‘‘(11) AFFILIATED MEMBER.—The term ‘affili-
ated member’ means, in connection with a sponsor— 
‘‘(A) a person who is otherwise eligible to 
be a member of the sponsor but who elects an 
affiliated status with the sponsor, 
‘‘(B) in the case of a sponsor with mem-
bers which consist of associations, a person who 
is a member of any such association and elects 
an affiliated status with the sponsor, or 
‘‘(C) in the case of an association health 
plan in existence on the date of the enactment 
of this part, a person eligible to be a member 
of the sponsor or one of its member associa-
tions. 
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‘‘(12) LARGE EMPLOYER.—The term ‘large em-
ployer’ means, in connection with a group health 
plan with respect to a plan year, an employer who 
employed an average of at least 51 employees on 
business days during the preceding calendar year 
and who employs at least 2 employees on the first 
day of the plan year. 
‘‘(13) SMALL EMPLOYER.—The term ‘small em-
ployer’ means, in connection with a group health 
plan with respect to a plan year, an employer who 
is not a large employer. 
‘‘(b) RULES OF CONSTRUCTION.— 
‘‘(1) EMPLOYERS AND EMPLOYEES.—For pur-
poses of determining whether a plan, fund, or pro-
gram is an employee welfare benefit plan which is an 
association health plan, and for purposes of applying 
this title in connection with such plan, fund, or pro-
gram so determined to be such an employee welfare 
benefit plan— 
‘‘(A) in the case of a partnership, the term 
‘employer’ (as defined in section 3(5)) includes 
the partnership in relation to the partners, and 
the term ‘employee’ (as defined in section 3(6)) 
includes any partner in relation to the partner-
ship; and 
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148 
‘‘(B) in the case of a self-employed indi-
vidual, the term ‘employer’ (as defined in sec-
tion 3(5)) and the term ‘employee’ (as defined 
in section 3(6)) shall include such individual. 
‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED 
AS EMPLOYEE WELFARE BENEFIT PLANS.—In the 
case of any plan, fund, or program which was estab-
lished or is maintained for the purpose of providing 
medical care (through the purchase of insurance or 
otherwise) for employees (or their dependents) cov-
ered thereunder and which demonstrates to the Sec-
retary that all requirements for certification under 
this part would be met with respect to such plan, 
fund, or program if such plan, fund, or program 
were a group health plan, such plan, fund, or pro-
gram shall be treated for purposes of this title as an 
employee welfare benefit plan on and after the date 
of such demonstration.’’. 
(b) CONFORMING AMENDMENTS
TO PREEMPTION 
RULES.— 
(1) Section 514(b)(6) of such Act (29 U.S.C. 
1144(b)(6)) is amended by adding at the end the 
following new subparagraph: 
‘‘(E) The preceding subparagraphs of this paragraph 
do not apply with respect to any State law in the case 
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149 
of an association health plan which is certified under part 
8.’’. 
(2) Section 514 of such Act (29 U.S.C. 1144) 
is amended— 
(A) in subsection (b)(4), by striking ‘‘Sub-
section (a)’’ and inserting ‘‘Subsections (a) and 
(f)’’; 
(B) in subsection (b)(5), by striking ‘‘sub-
section (a)’’ in subparagraph (A) and inserting 
‘‘subsection (a) of this section and subsections 
(a)(2)(B) and (b) of section 805’’, and by strik-
ing ‘‘subsection (a)’’ in subparagraph (B) and 
inserting ‘‘subsection (a) of this section or sub-
section (a)(2)(B) or (b) of section 805’’; and 
(C) by adding at the end the following new 
subsection: 
‘‘(f)(1) Except as provided in subsection (b)(4), the 
provisions of this title shall supersede any and all State 
laws insofar as they may now or hereafter preclude, or 
have the effect of precluding, a health insurance issuer 
from offering health insurance coverage in connection with 
an association health plan which is certified under part 
8. 
‘‘(2) Except as provided in paragraphs (4) and (5) 
of subsection (b) of this section— 
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‘‘(A) In any case in which health insurance cov-
erage of any policy type is offered under an associa-
tion health plan certified under part 8 to a partici-
pating employer operating in such State, the provi-
sions of this title shall supersede any and all laws 
of such State insofar as they may preclude a health 
insurance issuer from offering health insurance cov-
erage of the same policy type to other employers op-
erating in the State which are eligible for coverage 
under such association health plan, whether or not 
such other employers are participating employers in 
such plan. 
‘‘(B) In any case in which health insurance cov-
erage of any policy type is offered in a State under 
an association health plan certified under part 8 and 
the filing, with the applicable State authority (as de-
fined in section 812(a)(9)), of the policy form in 
connection with such policy type is approved by such 
State authority, the provisions of this title shall su-
persede any and all laws of any other State in which 
health insurance coverage of such type is offered, in-
sofar as they may preclude, upon the filing in the 
same form and manner of such policy form with the 
applicable State authority in such other State, the 
approval of the filing in such other State. 
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151 
‘‘(3) Nothing in subsection (b)(6)(E) or the preceding 
provisions of this subsection shall be construed, with re-
spect to health insurance issuers or health insurance cov-
erage, to supersede or impair the law of any State— 
‘‘(A) providing solvency standards or similar 
standards regarding the adequacy of insurer capital, 
surplus, reserves, or contributions, or 
‘‘(B) relating to prompt payment of claims. 
‘‘(4) For additional provisions relating to association 
health plans, see subsections (a)(2)(B) and (b) of section 
805. 
‘‘(5) For purposes of this subsection, the term ‘asso-
ciation health plan’ has the meaning provided in section 
801(a), and the terms ‘health insurance coverage’, ‘par-
ticipating employer’, and ‘health insurance issuer’ have 
the meanings provided such terms in section 812, respec-
tively.’’. 
(3) Section 514(b)(6)(A) of such Act (29 
U.S.C. 1144(b)(6)(A)) is amended— 
(A) in clause (i)(II), by striking ‘‘and’’ at 
the end; 
(B) in clause (ii), by inserting ‘‘and which 
does not provide medical care (within the mean-
ing of section 733(a)(2)),’’ after ‘‘arrange-
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152 
ment,’’, and by striking ‘‘title.’’ and inserting 
‘‘title, and’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(iii) subject to subparagraph (E), in the case 
of any other employee welfare benefit plan which is 
a multiple employer welfare arrangement and which 
provides medical care (within the meaning of section 
733(a)(2)), any law of any State which regulates in-
surance may apply.’’. 
(4) Section 514(d) of such Act (29 U.S.C. 
1144(d)) is amended— 
(A) by striking ‘‘Nothing’’ and inserting 
‘‘(1) Except as provided in paragraph (2), noth-
ing’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) Nothing in any other provision of law enacted 
on or after the date of the enactment of this paragraph 
shall be construed to alter, amend, modify, invalidate, im-
pair, or supersede any provision of this title, except by 
specific cross-reference to the affected section.’’. 
(c) PLAN SPONSOR.—Section 3(16)(B) of such Act 
(29 U.S.C. 102(16)(B)) is amended by adding at the end 
the following new sentence: ‘‘Such term also includes a 
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person serving as the sponsor of an association health plan 
under part 8.’’. 
(d) DISCLOSURE OF SOLVENCY PROTECTIONS RE-
LATED TO SELF-INSURED AND FULLY INSURED OPTIONS 
UNDER ASSOCIATION HEALTH PLANS.—Section 102(b) 
of such Act (29 U.S.C. 102(b)) is amended by adding at 
the end the following: ‘‘An association health plan shall 
include in its summary plan description, in connection 
with each benefit option, a description of the form of sol-
vency or guarantee fund protection secured pursuant to 
this Act or applicable State law, if any.’’. 
(e) SAVINGS CLAUSE.—Section 731(c) of such Act is 
amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 
(f) REPORT TO THE CONGRESS REGARDING CERTIFI-
CATION
OF
SELF-INSURED
ASSOCIATION
HEALTH 
PLANS.—Not later than January 1, 2014, the Secretary 
of Labor shall report to the Committee on Education and 
the Workforce of the House of Representatives and the 
Committee on Health, Education, Labor, and Pensions of 
the Senate the effect association health plans have had, 
if any, on reducing the number of uninsured individuals. 
(g) CLERICAL AMENDMENT.—The table of contents 
in section 1 of the Employee Retirement Income Security 
Act of 1974 is amended by inserting after the item relat-
ing to section 734 the following new items: 
‘‘PART 8—RULES GOVERNING ASSOCIATION HEALTH PLANS 
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‘‘801. Association health plans. 
‘‘802. Certification of association health plans. 
‘‘803. Requirements relating to sponsors and boards of trustees. 
‘‘804. Participation and coverage requirements. 
‘‘805. Other requirements relating to plan documents, contribution rates, and 
benefit options. 
‘‘806. Maintenance of reserves and provisions for solvency for plans providing 
health benefits in addition to health insurance coverage. 
‘‘807. Requirements for application and related requirements. 
‘‘808. Notice requirements for voluntary termination. 
‘‘809. Corrective actions and mandatory termination. 
‘‘810. Trusteeship by the Secretary of insolvent association health plans pro-
viding health benefits in addition to health insurance coverage. 
‘‘811. State assessment authority. 
‘‘812. Definitions and rules of construction.’’. 
SEC. 452. CLARIFICATION OF TREATMENT OF SINGLE EM-
PLOYER ARRANGEMENTS. 
Section 3(40)(B) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amend-
ed— 
(1) in clause (i), by inserting after ‘‘control 
group,’’ the following: ‘‘except that, in any case in 
which the benefit referred to in subparagraph (A) 
consists of medical care (as defined in section 
812(a)(2)), two or more trades or businesses, wheth-
er or not incorporated, shall be deemed a single em-
ployer for any plan year of such plan, or any fiscal 
year of such other arrangement, if such trades or 
businesses are within the same control group during 
such year or at any time during the preceding 1-year 
period,’’; 
(2) in clause (iii), by striking ‘‘(iii) the deter-
mination’’ and inserting the following: 
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‘‘(iii)(I) in any case in which the benefit re-
ferred to in subparagraph (A) consists of medical 
care (as defined in section 812(a)(2)), the deter-
mination of whether a trade or business is under 
‘common control’ with another trade or business 
shall be determined under regulations of the Sec-
retary applying principles consistent and coextensive 
with the principles applied in determining whether 
employees of two or more trades or businesses are 
treated as employed by a single employer under sec-
tion 4001(b), except that, for purposes of this para-
graph, an interest of greater than 25 percent may 
not be required as the minimum interest necessary 
for common control, or 
‘‘(II) in any other case, the determination’’; 
(3) by redesignating clauses (iv) and (v) as 
clauses (v) and (vi), respectively; and 
(4) by inserting after clause (iii) the following 
new clause: 
‘‘(iv) in any case in which the benefit referred 
to in subparagraph (A) consists of medical care (as 
defined in section 812(a)(2)), in determining, after 
the application of clause (i), whether benefits are 
provided to employees of two or more employers, the 
arrangement shall be treated as having only one par-
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ticipating employer if, after the application of clause 
(i), the number of individuals who are employees and 
former employees of any one participating employer 
and who are covered under the arrangement is 
greater than 75 percent of the aggregate number of 
all individuals who are employees or former employ-
ees of participating employers and who are covered 
under the arrangement,’’. 
SEC. 453. ENFORCEMENT PROVISIONS RELATING TO ASSO-
CIATION HEALTH PLANS. 
(a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL 
MISREPRESENTATIONS.—Section 501 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131) 
is amended by adding at the end the following new sub-
section: 
‘‘(c) Any person who willfully falsely represents, to 
any employee, any employee’s beneficiary, any employer, 
the Secretary, or any State, a plan or other arrangement 
established or maintained for the purpose of offering or 
providing any benefit described in section 3(1) to employ-
ees or their beneficiaries as— 
‘‘(1) being an association health plan which has 
been certified under part 8; 
‘‘(2) having been established or maintained 
under or pursuant to one or more collective bar-
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gaining agreements which are reached pursuant to 
collective bargaining described in section 8(d) of the 
National Labor Relations Act (29 U.S.C. 158(d)) or 
paragraph Fourth of section 2 of the Railway Labor 
Act (45 U.S.C. 152, paragraph Fourth) or which are 
reached pursuant to labor-management negotiations 
under similar provisions of State public employee re-
lations laws; or 
‘‘(3) being a plan or arrangement described in 
section 3(40)(A)(i), 
shall, upon conviction, be imprisoned not more than 5 
years, be fined under title 18, United States Code, or 
both.’’. 
(b) CEASE ACTIVITIES ORDERS.—Section 502 of 
such Act (29 U.S.C. 1132) is amended by adding at the 
end the following new subsection: 
‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DE-
SIST ORDERS.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
upon application by the Secretary showing the oper-
ation, promotion, or marketing of an association 
health plan (or similar arrangement providing bene-
fits consisting of medical care (as defined in section 
733(a)(2))) that— 
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‘‘(A) is not certified under part 8, is sub-
ject under section 514(b)(6) to the insurance 
laws of any State in which the plan or arrange-
ment offers or provides benefits, and is not li-
censed, registered, or otherwise approved under 
the insurance laws of such State; or 
‘‘(B) is an association health plan certified 
under part 8 and is not operating in accordance 
with the requirements under part 8 for such 
certification, 
a district court of the United States shall enter an 
order requiring that the plan or arrangement cease 
activities. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply in the case of an association health plan or 
other arrangement if the plan or arrangement shows 
that— 
‘‘(A) all benefits under it referred to in 
paragraph (1) consist of health insurance cov-
erage; and 
‘‘(B) with respect to each State in which 
the plan or arrangement offers or provides ben-
efits, the plan or arrangement is operating in 
accordance with applicable State laws that are 
not superseded under section 514. 
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‘‘(3) ADDITIONAL
EQUITABLE
RELIEF.—The 
court may grant such additional equitable relief, in-
cluding any relief available under this title, as it 
deems necessary to protect the interests of the pub-
lic and of persons having claims for benefits against 
the plan.’’. 
(c) RESPONSIBILITY
FOR CLAIMS PROCEDURE.— 
Section 503 of such Act (29 U.S.C. 1133) is amended by 
inserting ‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’, 
and by adding at the end the following new subsection: 
‘‘(b) ASSOCIATION HEALTH PLANS.—The terms of 
each association health plan which is or has been certified 
under part 8 shall require the board of trustees or the 
named fiduciary (as applicable) to ensure that the require-
ments of this section are met in connection with claims 
filed under the plan.’’. 
SEC. 454. COOPERATION BETWEEN FEDERAL AND STATE 
AUTHORITIES. 
Section 506 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1136) is amended by adding 
at the end the following new subsection: 
‘‘(d) CONSULTATION WITH STATES WITH RESPECT 
TO ASSOCIATION HEALTH PLANS.— 
‘‘(1) AGREEMENTS
WITH
STATES.—The Sec-
retary shall consult with the State recognized under 
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paragraph (2) with respect to an association health 
plan regarding the exercise of— 
‘‘(A) the Secretary’s authority under sec-
tions 502 and 504 to enforce the requirements 
for certification under part 8; and 
‘‘(B) the Secretary’s authority to certify 
association health plans under part 8 in accord-
ance with regulations of the Secretary applica-
ble to certification under part 8. 
‘‘(2) RECOGNITION
OF
PRIMARY
DOMICILE 
STATE.—In carrying out paragraph (1), the Sec-
retary shall ensure that only one State will be recog-
nized, with respect to any particular association 
health plan, as the State with which consultation is 
required. In carrying out this paragraph— 
‘‘(A) in the case of a plan which provides 
health insurance coverage (as defined in section 
812(a)(3)), such State shall be the State with 
which filing and approval of a policy type of-
fered by the plan was initially obtained, and 
‘‘(B) in any other case, the Secretary shall 
take into account the places of residence of the 
participants and beneficiaries under the plan 
and the State in which the trust is main-
tained.’’. 
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SEC. 455. EFFECTIVE DATE AND TRANSITIONAL AND 
OTHER RULES. 
(a) EFFECTIVE DATE.—The amendments made by 
this subtitle shall take effect 1 year after the date of the 
enactment of this Act. The Secretary of Labor shall first 
issue all regulations necessary to carry out the amend-
ments made by this subtitle within 1 year after the date 
of the enactment of this Act. 
(b) TREATMENT
OF CERTAIN EXISTING HEALTH 
BENEFITS PROGRAMS.— 
(1) IN GENERAL.—In any case in which, as of 
the date of the enactment of this Act, an arrange-
ment is maintained in a State for the purpose of 
providing benefits consisting of medical care for the 
employees and beneficiaries of its participating em-
ployers, at least 200 participating employers make 
contributions to such arrangement, such arrange-
ment has been in existence for at least 10 years, and 
such arrangement is licensed under the laws of one 
or more States to provide such benefits to its par-
ticipating employers, upon the filing with the appli-
cable authority (as defined in section 812(a)(5) of 
the Employee Retirement Income Security Act of 
1974 (as amended by this subtitle)) by the arrange-
ment of an application for certification of the ar-
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rangement under part 8 of subtitle B of title I of 
such Act— 
(A) such arrangement shall be deemed to 
be a group health plan for purposes of title I 
of such Act; 
(B) the requirements of sections 801(a) 
and 803(a) of the Employee Retirement Income 
Security Act of 1974 shall be deemed met with 
respect to such arrangement; 
(C) the requirements of section 803(b) of 
such Act shall be deemed met, if the arrange-
ment is operated by a board of directors 
which— 
(i) is elected by the participating em-
ployers, with each employer having one 
vote; and 
(ii) has complete fiscal control over 
the arrangement and which is responsible 
for all operations of the arrangement; 
(D) the requirements of section 804(a) of 
such Act shall be deemed met with respect to 
such arrangement; and 
(E) the arrangement may be certified by 
any applicable authority with respect to its op-
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erations in any State only if it operates in such 
State on the date of certification. 
The provisions of this subsection shall cease to apply 
with respect to any such arrangement at such time 
after the date of the enactment of this Act as the 
applicable requirements of this subsection are not 
met with respect to such arrangement. 
(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘group health plan’’, ‘‘medical 
care’’, and ‘‘participating employer’’ shall have the 
meanings provided in section 812 of the Employee 
Retirement Income Security Act of 1974, except 
that the reference in paragraph (7) of such section 
to an ‘‘association health plan’’ shall be deemed a 
reference to an arrangement referred to in this sub-
section. 
Subtitle G—Greater Choice for 
Veterans 
SEC. 461. REMOVING BARRIERS TO HEALTH CARE CHOICE 
FOR CATEGORY 1 VETERANS AND MEDAL OF 
HONOR RECIPIENTS. 
Section 101(b)(2) of the Veterans Access, Choice, 
and Accountability Act of 2014 (Public Law 113–146; 38 
U.S.C. 1701 note) is amended— 
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(1) in subparagraph (C)(ii), by striking the 
‘‘or’’ at the end; 
(2) in subparagraph (D)(ii)(II), by striking the 
period at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) is a veteran described in section 
1705(a)(1) of title 38, United States Code or a 
veteran who was awarded the medal of honor 
under section 3741, 6241, or 8741 of title 10 
or section 491 of title 14.’’. 
TITLE V—REFORMING MEDICAL 
LIABILITY LAW 
SEC. 501. REQUIREMENTS FOR SELECTION OF CLINICAL 
PRACTICE GUIDELINES. 
(a) SELECTION.—Not later than 6 months after the 
date of enactment of this Act, eligible professional organi-
zations that have established, published, maintained, and 
updated on a regular basis, clinical practice guidelines, in-
cluding when applicable, appropriate use criteria, that in-
corporate best practices, may submit such guidelines to 
the Secretary. Not later than 6 months after the last day 
for submitting such guidelines, the Secretary shall select 
and designate one or more eligible professional organiza-
tions to provide and maintain such clinical practice guide-
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lines on behalf of the Secretary. Not later than 6 months 
after designating each such eligible professional organiza-
tion, the Secretary shall enter into an agreement with each 
such eligible professional organization for maintenance, 
publication, and updating of such clinical practice guide-
lines. 
(b) MAINTENANCE.— 
(1) PERIODIC REVIEW.—Not later than 5 years 
the Secretary enters into an agreement with each el-
igible professional organization under subsection (a), 
and every 5 years thereafter, the Secretary shall re-
view the clinical practice guidelines of such organiza-
tion and shall, as necessary, enter into agreements 
with additional eligible professional organizations, as 
appropriate, in accordance with subsection (a). 
(2) UPDATE BY ELIGIBLE PROFESSIONAL ORGA-
NIZATION.—An eligible professional organization 
that collaborated in the establishment of a clinical 
practice guidelines may submit amendments to that 
clinical practice guideline at any time to the Sec-
retary for review by the Secretary. 
(3) NOTIFICATION REQUIRED FOR CERTAIN UP-
DATES.—An amendment under paragraph (2) may 
not add, materially change, or remove a guideline 
from a set of guidelines, unless notification of such 
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update is made available to applicable eligible profes-
sionals. 
SEC. 502. DEVELOPMENT. 
(a) GUIDELINE STANDARDS.—The Secretary shall 
ensure that, to the extent practicable, the development of 
clinical practice guidelines are guided by the Standards 
for Developing Trustworthy Clinical Practice Guidelines of 
the Institute of Medicine and— 
(1) are developed through a transparent process 
that minimizes conflicts of interest; 
(2) are developed by a knowledgeable, multi-
disciplinary panel of experts and representatives 
from key affected groups; 
(3) take into consideration important patient 
subgroups and patient preferences, as appropriate; 
(4) are based on a systematic review of the ex-
isting evidence; 
(5) provide a clear explanation of the relation-
ship between care options and health outcomes; 
(6) provide ratings of both the quality of evi-
dence and strength of recommendation; 
(7) are reconsidered and revised when new evi-
dence emerges; and 
(8) clearly identify any exceptions to the appli-
cation of the clinical practice guideline. 
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(b) REQUIRED DISCLOSURES FROM ELIGIBLE PRO-
FESSIONAL ORGANIZATIONS.—Any person who is affili-
ated with an eligible professional organization and who di-
rectly participated in the creation of a clinical practice 
guideline shall disclose any conflicts of interest pertaining 
to the development of the clinical practice guideline, in-
cluding any conflict of interest pertaining to any instru-
ment, medicine, drug, or any other substance, device, or 
means included in the clinical practice guideline. Disclo-
sures to the Secretary by eligible professional organiza-
tions shall be made promptly, upon submission of the 
guidelines, and during every review of the guidelines. Dis-
closures shall include the following: 
(1) Scientific methodology and evidence that 
supports clinical practice guidelines. 
(2) Outside collaborators. 
(3) Endorsements. 
SEC. 503. NO LIABILITY FOR GUIDELINE PRODUCERS. 
Neither an eligible professional organization nor the 
participants in its guideline development and approval 
process, may be held liable for any injury alleged to be 
caused by adhering to a clinical practice guideline to which 
they contributed. 
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SEC. 504. INTERNET PUBLICATION OF GUIDELINES. 
The Secretary shall publish on the Internet through 
the National Guideline Clearinghouse or other appropriate 
sites or sources, all clinical practice guidelines, including 
all data and methodology used in the development and se-
lection of the guidelines in compliance with data disclosure 
standards in the Health Insurance Portability and Ac-
countability Act of 1996 (Public Law 104–191). 
SEC. 
505. 
STATE 
FLEXIBILITY 
AND 
PROTECTION 
OF 
STATES’ RIGHTS. 
(a) LIMITATION.—This Act shall not preempt or su-
persede any State or Federal law that— 
(1) imposes procedural or substantive protec-
tions for health care providers and health care orga-
nizations from liability, loss, or damages greater 
than such protections provided by this title; or 
(2) creates a cause of action related to the pro-
vision of health care goods or services. 
(b) STATE FLEXIBILITY.—No provision of this Act 
shall be construed to preempt any defense available to a 
party in a health care liability action under any other pro-
vision of State or Federal law. 
SEC. 506. FEDERAL CAUSE OF ACTION. 
(a) IN GENERAL.—Chapter 85 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing: 
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‘‘§ 1370. Health care liability claims 
‘‘(a) DEFINITIONS.—In this section, the terms ‘appli-
cable eligible professional’, ‘health care goods or services’, 
‘health care liability action’, ‘health care liability claim’, 
‘health care organization’, and ‘health care provider’ have 
the meaning given such terms in section 10 of the Saving 
Lives, Saving Costs Act. 
‘‘(b) JURISDICTION OF CLAIMS.—The district courts 
shall have original jurisdiction of a health care liability ac-
tion against an applicable eligible professional, health care 
provider, or health care organization. 
‘‘(c) SUBSTANTIVE LAW.—The substantive law for 
decision in a health care liability action brought under 
subsection (b) shall be derived from the law, including 
choice of law principles, of the State in which the provision 
of, use of, or payment for (or the failure to provide, use, 
or pay for) health care goods or services giving rise to 
the health care liability claim occurred unless such law is 
inconsistent with or preempted by Federal law.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
The table of sections for chapter 85 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘1370. Health care liability claims.’’. 
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170 
SEC. 507. RIGHT OF REMOVAL. 
Section 1441 of title 28, United States Code, is 
amended by adding at the end the following: 
‘‘(g) CERTAIN ACTIONS AGAINST MEDICAL PROFES-
SIONALS.—(1) A health care liability action brought in a 
State court against an applicable eligible professional, 
health care provider, or health care organization may be 
removed by any defendant or the defendants to the district 
court of the United States for the district and division em-
bracing the place where such action is pending. 
‘‘(2) In this subsection, the terms ‘applicable eligible 
professional’, ‘health care liability action’, ‘health care or-
ganization’, and ‘health care provider’ have the meaning 
given such terms in section 10 of the Saving Lives, Saving 
Costs Act.’’. 
SEC. 508. MANDATORY REVIEW BY INDEPENDENT MEDICAL 
PANEL. 
(a) IN GENERAL.—If, in any health care liability ac-
tion removed to Federal court pursuant to section 1441(g) 
of title 28, United States Code, against an applicable eligi-
ble professional, health care provider, or health care orga-
nization, the applicable eligible professional, health care 
provider, or health care organization alleges, in response 
to a filing of the claimant, that the applicable eligible pro-
fessional, health care provider, or health care organization 
adhered to an applicable clinical practice guideline in the 
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provision of health care goods or services to the claimant, 
then the court shall suspend further proceedings on the 
health care liability action prior to discovery proceedings, 
until the completion of a review of the action by an inde-
pendent medical review panel. 
(b) INDEPENDENT MEDICAL REVIEW PANEL.— 
(1) COMPOSITION.—An independent medical re-
view panel under this section shall be composed of 
3 members who are experts in the relevant field of 
clinical practice, appointed in accordance with para-
graph (5). 
(2) 
REQUIREMENTS
FOR
MEMBER
ELIGI-
BILITY.— 
(A) IN GENERAL.—To be eligible to serve 
on an independent medical review panel, a 
member shall— 
(i) be an experienced physician cer-
tified by a board recognized by the Amer-
ican Board of Medical Specialties; 
(ii) not earlier than 2 years prior to 
the date of selection to the board, have 
been in active medical practice or devoted 
a substantial portion of his or her time to 
teaching at an accredited medical school, 
or have been engaged in university-based 
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research in relation to the medical care 
and type of treatment at issue; and 
(iii) be approved by his or her spe-
cialty society. 
(B) REGIONAL PREFERENCE.—When pos-
sible, members should be from the region where 
the case in question originates to account for 
geographical practice variation. 
(3) NO CIVIL LIABILITY FOR MEMBERS.—No 
civil action shall be brought in any court against any 
member for any act, failure to act, or statement or 
opinion made, within the scope of his or her duties 
as a member of the independent medical review 
panel. 
(4) CONSIDERATIONS IN MAKING DETERMINA-
TIONS.—The members of the independent medical 
review panel shall acknowledge that, under certain 
circumstances, it may be appropriate for a physician 
to depart from the recommendations in clinical prac-
tice guidelines in the care of individual patients. 
(5) SELECTION OF MEMBERS.—Each member 
of the independent medical review panel shall be 
jointly selected by the parties. A member whose se-
lection one party does not concur in may not serve 
on the panel, except that, if, not later than 30 days 
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after a response to the health care liability action is 
filed, 3 members have not been selected by the par-
ties, the court shall appoint any remaining members. 
(6) COMPENSATION OF MEMBERS.—The costs 
of compensation to the members of the independent 
medical review panel shall be shared between the 
parties equally, unless otherwise agreed to by the 
parties. 
(c) TERMS OF REVIEW.—A review by an independent 
medical review panel under this section shall comply with 
the following: 
(1) STANDARD OF CONDUCT.—The mandatory 
independent medical review panel that is charged 
with the responsibility of making a preliminary find-
ing as to liability of the defendant applicable eligible 
professional shall deem the prescribed clinical prac-
tice guidelines as the standard of conduct, care, and 
skill expected of members of the medical profession 
engaged in the defendant’s field of practice under 
the same or similar circumstances, subject to the 
provisions of subsection (b)(4). 
(2) RECORD
FOR
REVIEW.—The independent 
medical review panel shall make a preliminary find-
ing based solely upon the pre-discovery evidence sub-
mitted to it pursuant to Rule 26 of the Federal 
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Rules of Civil Procedure, any medical records that 
would be discoverable if the lawsuit advances to 
trial, and the applicable prescribed clinical practice 
guidelines. 
(3) LIMITATION.—The independent medical re-
view panel shall not make a finding of negligence 
from the mere fact that a treatment or procedure 
was unsuccessful or failed to bring the best result, 
or that the patient died. 
(4) USE AT TRIAL OF WORK PRODUCT OF RE-
VIEW PANEL.—No preliminary finding by the inde-
pendent medical review panel that the defendant ap-
plicable eligible professional breached the standard 
of care as set forth under the prescribed clinical 
practice guidelines shall constitute negligence per se 
or conclusive evidence of liability, but findings, opin-
ions, and conclusions of the review panel shall be ad-
missible as evidence in any and all subsequent pro-
ceedings before the court, including for purposes of 
motions for summary judgment and at trial. 
(d) RESULTS OF REVIEW.— 
(1) IN GENERAL.—Not later than 60 days after 
all members of the independent medical review panel 
have been selected, the panel shall complete a review 
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of the record of the liability action and shall make 
a finding under this subsection. 
(2) FINDING DESCRIBED.—A finding under this 
subsection shall include the following: 
(A) A determination of whether there are 
any applicable clinical practice guidelines to the 
health care liability action that substantively 
pertains to the injury suffered by the claimant. 
(B) Whether the applicable eligible profes-
sional has alleged adherence to any such guide-
line. 
(C) Whether the applicable eligible profes-
sional adhered to any such guideline. 
(D) Whether there is a reasonable prob-
ability that— 
(i) the applicable eligible professional 
violated the applicable clinical practice 
guideline; 
(ii) that violation proximately caused 
the claimant’s alleged injury; and 
(iii) the claimant suffered damages as 
a result of the injury. 
(3) USE
AT
TRIAL.—The finding under this 
subsection may be received into evidence by the 
court. If the independent medical review panel made 
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any finding under paragraph (2)(D) that there was 
no reasonable probability of the matters described in 
clauses (i) through (iii), the court may issue a sum-
mary judgment in favor of the applicable eligible 
professional unless the claimant is able to show oth-
erwise by clear and convincing evidence. If the panel 
made a finding under subparagraphs (A) through 
(C) of paragraph (2) that there was an applicable 
clinical practice guideline that the defendant adhered 
to, the court shall issue summary judgment in favor 
of the applicable eligible professional unless the 
claimant is able to show otherwise by clear and con-
vincing evidence. Any preliminary finding that the 
defendant applicable eligible professional did not 
breach the standard of care as set forth under the 
prescribed medical practice guidelines or that the de-
fendant applicable eligible professional’s nonadher-
ence to the applicable standard was neither the 
cause in fact nor the proximate cause of the plain-
tiff’s injury or that the plaintiff did not incur any 
damages as a result shall be given deference by the 
court and shall entitle the defendant applicable eligi-
ble professional to summary judgment unless the 
plaintiff is able to show by clear and convincing evi-
dence that the independent medical review panel was 
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in error and that there is a genuine issue as to a 
material fact in the case. 
SEC. 509. DEFINITIONS. 
In this Act: 
(1) APPLICABLE
ELIGIBLE
PROFESSIONAL.— 
The term ‘‘applicable eligible professional’’ means a 
physician practicing within clinical practice guide-
lines submitted by an eligible professional organiza-
tion and includes employees and agents of a physi-
cian. 
(2) APPROPRIATE
USE
CRITERIA.—The term 
‘‘appropriate use criteria’’ means established evi-
dence-based guidelines developed or endorsed by an 
eligible professional organization that specify when 
the health benefits of a procedure or service exceed 
the expected health risks by a significantly wide 
margin. 
(3) CLINICAL PRACTICE GUIDELINE.—The term 
‘‘clinical practice guideline’’ means systematically de-
veloped statements based on the review of clinical 
evidence for assisting a health care provider to de-
termine the appropriate health care in specific clin-
ical circumstances. 
(4) ELIGIBLE PROFESSIONAL ORGANIZATION.— 
The term ‘‘eligible professional organization’’ means 
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a national or State medical society or medical spe-
cialty society. 
(5) FEDERAL
PAYOR.—The term ‘‘Federal 
payor’’ includes reimbursements made under the 
Medicare program under title XVIII of the Social 
Security Act or the Medicaid program under title 
XIX of the Social Security Act, or medical 
screenings, treatments, or transfer services provided 
pursuant to section 1867 of the Social Security Act 
is not made by the individual or any non-Federal 
third party on behalf of the individual. 
(6) HEALTH CARE GOODS OR SERVICES.—The 
term ‘‘health care goods or services’’ means any 
goods or services provided by a health care organiza-
tion, provider, or by any individual working under 
the supervision of a health care provider, that relates 
to the diagnosis, prevention, or treatment of any 
human disease or impairment, or the assessment or 
care of the health of human beings. 
(7) HEALTH
CARE
LIABILITY
ACTION.—The 
term ‘‘health care liability action’’ means a civil ac-
tion against an applicable eligible professional, a 
health care provider, or a health care organization, 
regardless of the theory of liability on which the 
claim is based, or the number of plaintiffs, defend-
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ants, or other parties, or the number of causes of ac-
tion, in which the claimant alleges a health care li-
ability claim. 
(8) HEALTH
CARE
LIABILITY
CLAIM.—The 
term ‘‘health care liability claim’’ means a claim by 
any person against an applicable eligible profes-
sional, a health care provider, or a health care orga-
nization which is based upon the provision of, use of, 
or payment for (or the failure to provide, use, or pay 
for) health care goods or services for which at least 
partial payment was made by a Federal payor or 
which was mandated by Federal law, regardless of 
the theory of liability on which the claim is based. 
(9) HEALTH CARE ORGANIZATION.—The term 
‘‘health care organization’’ means any person or en-
tity which is obligated to provide or pay for health 
benefits under any health plan, including any person 
or entity acting under a contract or arrangement 
with a health care organization to provide or admin-
ister any health benefit. 
(10) HEALTH
CARE
PROVIDER.—The term 
‘‘health care provider’’ means any person or entity 
required by State or Federal laws or regulations to 
be licensed, registered, or certified to provide health 
care services, and being either so licensed, reg-
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istered, or certified, or exempted from such require-
ment by other statute or regulation. 
(11) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Health and Human Services. 
TITLE VI—MEDICAL 
BREAKTHROUGH FUND 
SEC. 601. MEDICAL BREAKTHROUGH FUND. 
Section 402A of the Public Health Service Act (42 
U.S.C. 282a) is amended— 
(1) by redesignating subsection (e) as sub-
section (f); and 
(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) MEDICAL BREAKTHROUGH FUND.— 
‘‘(1) ESTABLISHMENT.—There is established a 
fund to be known as the Medical Breakthrough 
Fund to support biomedical research through the 
funding of basic, translational, and clinical research. 
‘‘(2) AMOUNTS FOR THE FUND.— 
‘‘(A) IN GENERAL.—There are authorized 
to be appropriated, and appropriated, to the 
Medical Breakthrough Fund out of any funds 
in the Treasury not otherwise appropriated, in 
addition to any amounts otherwise made avail-
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able to the National Institutes of Health, the 
following amounts for the following fiscal years: 
‘‘(i) For fiscal year 2017— 
‘‘(I) $1,000,000,000 for the CV 
Prize (described in paragraph (5)) to 
remain available until expended; and 
‘‘(II) $500,000,000. 
‘‘(ii) 
For 
fiscal 
year 
2018, 
$1,500,000,000. 
‘‘(iii) For each of fiscal years 2019 
through 2024, $2,000,000,000. 
‘‘(B) AVAILABILITY
SUBJECT
TO
APPRO-
PRIATIONS.—Amounts in the Medical Break-
through Fund shall not be available except to 
the extent and in such amounts as are provided 
in appropriation Acts. 
‘‘(C) ALLOCATION OF AMOUNTS FOR RE-
SEARCH.—The Director of NIH shall allocate 
the amounts available in the Medical Break-
through Fund for a fiscal year for research (not 
including the CV Prize) consistent with the fol-
lowing: 
‘‘(i) 100 percent of such amounts 
shall be for research related to Alzheimer’s 
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disease, cancer, heart disease, stoke, or di-
abetes. 
‘‘(ii) Not less than 35 percent of such 
amounts shall be for research by early 
stage investigators (as defined in para-
graph (7)). 
‘‘(iii) Not less than 20 percent of such 
amounts shall be for research that pursues 
innovative approaches to major contem-
porary challenges in biomedical research 
that involve inherent high risk, but have 
the potential to lead to breakthroughs. 
‘‘(iv) Not more than 10 percent of 
such amounts may be for intramural re-
search. 
‘‘(v) No amount may be used for fa-
cilities and administration fees in connec-
tion with a research program or project in 
excess of 50 percent of the direct costs of 
such program or project provided under 
this subsection. 
‘‘(D) INAPPLICABILITY OF CERTAIN PROVI-
SIONS.—Amounts in the Medical Breakthrough 
Fund are not subject to— 
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‘‘(i) any transfer authority of the Sec-
retary or the Director of NIH under sec-
tion 241, subsection (c), subsection (d), or 
any other provision of law; or 
‘‘(ii) the nonrecurring expenses fund 
under section 223 of division G of the Con-
solidated Appropriations Act, 2008 (42 
U.S.C. 3514a). 
‘‘(E) SUPPLEMENT, 
NOT
SUPPLANT.— 
Amounts appropriated and made available pur-
suant to this paragraph shall be used to supple-
ment, not supplant, the funds otherwise allo-
cated by the National Institutes of Health for 
biomedical research. 
‘‘(3) AUTHORIZED
USES.—Amounts in the 
Medical Breakthrough Fund established under para-
graph (1) may be used only to develop and imple-
ment the strategic plan under paragraph (6), to ad-
minister and award the CV Prize, or to conduct and 
support innovative biomedical research through the 
following: 
‘‘(A) Research in which— 
‘‘(i) a principal investigator has a spe-
cific project or specific objectives; and 
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‘‘(ii) funding is tied to pursuit of such 
project or objectives. 
‘‘(B) Research in which— 
‘‘(i) a principal investigator has shown 
promise in biomedical research; and 
‘‘(ii) funding is not tied to a specific 
project or specific objectives. 
‘‘(C) Research to be carried out principally 
by a small business concern (as defined in sec-
tion 3 of the Small Business Act). 
‘‘(4) COORDINATION.—In funding programs 
and activities through the Medical Breakthrough 
Fund, the Secretary, acting through the Director of 
NIH, shall— 
‘‘(A) ensure coordination among the na-
tional research institutes, the national centers, 
and other departments, agencies, and offices of 
the Federal Government; and 
‘‘(B) minimize unnecessary duplication. 
‘‘(5) CV PRIZE.— 
‘‘(A) AWARDING THE CV PRIZE.—The Di-
rector of NIH shall award a Cure and Vaccine 
Prize (in this subsection referred to as the ‘CV 
Prize’) consisting of the $1,000,000,000 appro-
priated under paragraph (2)(A)(i)(I) to the first 
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applicant who the Director determines in ac-
cordance with this paragraph has developed a 
cure or vaccine for Alzheimer’s disease. 
‘‘(B) PUBLISHING
CRITERIA.—Not later 
than 10 days after receiving recommendations 
under subparagraph (F)(ii)(I), the Director of 
NIH shall publish criteria for determining what 
constitutes a cure or vaccine of Alzheimer’s dis-
ease on the website of the National Institutes of 
Health. 
‘‘(C) RECEIVING APPLICATIONS.—The Di-
rector of NIH shall— 
‘‘(i) receive applications of applicants 
claiming to have developed a cure or vac-
cine that meets the criteria published 
under subparagraph (B); and 
‘‘(ii) send a copy of any applications 
so received to the CV Advisory Prize 
Board established under paragraph (F)(i). 
‘‘(D) EVALUATING
APPLICATIONS.—The 
Director of NIH shall— 
‘‘(i) determine if a cure or vaccine for 
Alzheimer’s disease described in an appli-
cation received under subparagraph (C) 
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meets the criteria published under sub-
paragraph (B); and 
‘‘(ii) when making a determination 
under clause (i), take into consideration 
the recommendations submitted under sub-
paragraph (F)(ii)(III)). 
‘‘(E) AWARDING THE PRIZE.—If the Di-
rector of NIH determines under subparagraph 
(D) that a cure or vaccine described in an ap-
plication received under subparagraph (C) 
meets criteria published under subparagraph 
(B), not later than 90 days after the date of 
such determination, the Director shall award 
the CV Prize to the applicant who submitted 
the application. 
‘‘(F) CV PRIZE ADVISORY BOARD.— 
‘‘(i) 
ESTABLISHMENT.—Not 
later 
than 120 days after the date of the enact-
ment of this subsection, the Director of 
NIH shall establish a CV Prize Advisory 
Board to advise the Director with respect 
to awarding the CV Prize. 
‘‘(ii) DUTIES
OF
THE
BOARD.—The 
CV Prize Advisory Board shall— 
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‘‘(I) not later than 180 days 
after the date of the enactment of this 
subsection, recommend to the Director 
of NIH criteria for determining what 
constitutes a cure or vaccine of Alz-
heimer’s disease; 
‘‘(II) review applications of appli-
cants claiming to have developed a 
cure or vaccine that meets the criteria 
published under subparagraph (B); 
and 
‘‘(III) submit recommendations 
to the Director of NIH as to whether 
the cure or vaccine described in such 
application has met such criteria. 
‘‘(iii) MEMBERS OF THE BOARD.—The 
CV Prize Advisory Board shall consist of 
14 members as follows: 
‘‘(I) 8 members appointed by the 
Director of NIH. 
‘‘(II) 1 member appointed by the 
Speaker of the House of Representa-
tives. 
‘‘(III) 1 member appointed by 
the majority leader of the Senate. 
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‘‘(IV) 1 member appointed by the 
minority leader of the House of Rep-
resentatives. 
‘‘(V) 1 member appointed by the 
minority leader of the Senate. 
‘‘(VI) The Director of NIH, who 
shall serve ex-officio. 
‘‘(VII) The Secretary, who shall 
serve ex-officio. 
‘‘(6) STRATEGIC PLAN.— 
‘‘(A) IN GENERAL.—The Director of NIH 
shall ensure that scientifically based strategic 
planning is implemented in support of research 
priorities of the Medical Breakthrough Fund, 
including through the development, use, and 
updating of a strategic research investment 
plan that— 
‘‘(i) is designed to increase the effi-
cient and effective focus of biomedical re-
search in a manner that leverages the best 
scientific opportunities through a delibera-
tive planning process; 
‘‘(ii) identifies strategic focus areas in 
which the resources of the Medical Break-
through Fund can address, and find more 
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effective treatments for, Alzheimer’s dis-
ease, cancer, heart disease, stoke, and dia-
betes; 
‘‘(iii) includes objectives for each such 
strategic focus area; and 
‘‘(iv) ensures that basic research re-
mains a priority. 
‘‘(B) ADVISORY
COUNCIL.—The Director 
of NIH shall appoint 18 members to an advi-
sory council to offer recommendations to the 
Director on the strategic research investment 
plan implemented pursuant to subparagraph 
(A). The 18 members shall consist of— 
‘‘(i) 3 members who specialize in Alz-
heimer’s disease; 
‘‘(ii) 3 members who specialize in can-
cer; 
‘‘(iii) 3 members who specialize in 
heart disease; 
‘‘(iv) 3 members who specialize in 
stoke; 
‘‘(v) 3 members who specialize in dia-
betes; and 
‘‘(vi) 3 members who have broad expe-
rience in biomedical research. 
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‘‘(C) UPDATES AND REVIEWS.—The Direc-
tor shall review and, as appropriate, update the 
research strategic investment plan under sub-
paragraph (A) not less than often every 18 
months. 
‘‘(7) DEFINITION
OF
EARLY
STAGE
INVESTI-
GATOR.—In this subsection, the term ‘early stage in-
vestigator’ means, with respect to a research project 
or program funded under this subsection, an investi-
gator who— 
‘‘(A) is the principal investigator or the 
program director of such project or program; 
‘‘(B) has never been awarded, or has been 
awarded only once, a substantial, competing 
grant by the National Institutes of Health for 
independent research; and 
‘‘(C) at the time of initial funding for such 
project or program, is within 10 years of having 
completed— 
‘‘(i) the investigator’s terminal degree; 
or 
‘‘(ii) a medical residency (or the 
equivalent).’’. 
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TITLE VII—OTHER PROVISIONS 
SEC. 701. RESPECTING HUMAN LIFE. 
(a) PROHIBITION ON ABORTION MANDATES.—Noth-
ing in this Act (or any amendment made by this Act) shall 
be construed to require any health plan (including any 
high-risk pool) to provide coverage of, or access to, abor-
tion services or to allow the Secretary of the Treasury, 
the Secretary of Labor, the Secretary of Health and 
Human Services, or any other Federal or non-Federal per-
son or entity in implementing this Act (or an amendment 
made by this Act) to require coverage of, or access to, 
abortion services. 
(b) PROHIBITION ON CERTAIN RESEARCH FUND-
ING.— 
(1) IN GENERAL.—No funds authorized or ap-
propriated by this Act (or an amendment made by 
this Act) may be used to conduct or support re-
search that includes embryo-destructive stem cell re-
search and human cloning. 
(2) HUMAN CLONING DEFINED.—In this sub-
section, the term ‘‘human cloning’’ means human 
asexual reproduction accomplished by introducing 
the nuclear material from a human diploid cell into 
an oocyte to produce a living organism at any stage 
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of development with a human or predominantly 
human genetic constitution. 
(3) CONSTRUCTION.—Nothing in this sub-
section may be construed to prohibit conducting or 
supporting research that does not include embryo- 
destructive stem cell research or human cloning, in-
cluding research involving nuclear transfer or other 
cloning techniques to produce molecules, DNA, cells 
other than human embryos, tissues, or animals other 
than humans. 
(c) LIMITATION ON ABORTION FUNDING.— 
(1) IN GENERAL.—No funds authorized or ap-
propriated by this Act (or an amendment made by 
this Act) may be used to pay for any abortion or to 
cover any part of the costs of any health plan that 
includes coverage of abortion (including a high risk 
pool described in section 2745 of the Public Health 
Service Act (42 U.S.C. 300gg–45), as amended by 
section 311 of this Act), except— 
(A) if the pregnancy is the result of an act 
of rape or incest; or 
(B) in the case where a pregnant female 
suffers from a physical disorder, physical in-
jury, or physical illness that would, as certified 
by a physician, place the female in danger of 
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death unless an abortion is performed, includ-
ing a life-endangering physical condition caused 
by or arising from the pregnancy itself. 
(2) OPTION
TO
PURCHASE
SEPARATE
COV-
ERAGE OR PLAN.—Nothing in this subsection shall 
be construed as prohibiting any non-Federal entity 
(including an individual or a State or local govern-
ment) from purchasing separate coverage for abor-
tions for which funding is prohibited under this sub-
section, or a health plan that includes such abor-
tions, so long as such coverage or plan is paid for 
entirely using only funds not authorized or appro-
priated by this Act. 
(3) OPTION TO OFFER COVERAGE OR PLAN.— 
Nothing in this subsection shall restrict any non- 
Federal health insurance issuer offering a health 
plan from offering separate coverage for abortions 
for which funding is prohibited under this sub-
section, or a health plan that includes such abor-
tions, so long as— 
(A) premiums for such separate coverage 
or plan are paid for entirely with funds not au-
thorized or appropriated by this Act; and 
(B) administrative costs and all services 
offered through such coverage or plan are paid 
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for using only premiums collected for such cov-
erage or plan. 
(4) ADMINISTRATIVE
EXPENSES.—No funds 
authorized or appropriated by this Act shall be avail-
able to pay for administrative expenses in connection 
with any health plan (including an association health 
plan that has entered into trusteeship) which pro-
vides any benefits or coverage for abortions except 
where the life of the mother would be endangered if 
the fetus were carried to term, or the pregnancy is 
the result of an act of rape or incest. 
(d) NO PREEMPTION OF STATE LAWS.—Nothing in 
this Act (or an amendment made by this Act) shall be 
construed to preempt or otherwise have any effect on 
State laws— 
(1) protecting conscience rights or restricting or 
prohibiting abortion or coverage or funding of abor-
tion, as in effect on the date of the enactment of this 
Act; or 
(2) establishing procedural requirements on 
abortions, including parental notification or consent 
for the performance of an abortion on a minor. 
(e) DEFINITIONS.—In this section: 
(1) The term ‘‘association health plan’’ has the 
meaning given to such term in section 801 of the 
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Employee Retirement Income Security Act of 1974, 
as added by section 451 of this Act. 
(2) The term ‘‘high-risk pool’’ means a high- 
risk pool described in section 2745 of the Public 
Health Service Act (42 U.S.C. 300gg–45), as 
amended by section 311 of this Act. 
SEC. 702. OFFSETS. 
Section 251(c) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 (2 U.S.C. 901) is 
amended as follows: 
(1) In paragraph (4)(B), by striking the dollar 
amount and inserting ‘‘$496,400,000,000’’. 
(2) In paragraph (5)(B), by striking the dollar 
amount and inserting ‘‘$507,300,000,000’’. 
(3) In paragraph (6)(B), by striking the dollar 
amount and inserting ‘‘$523,700,000,000’’. 
(4) In paragraph (7)(B), by striking the dollar 
amount and inserting ‘‘$534,900,000,000’’. 
(5) In paragraph (8)(B), by striking the dollar 
amount and inserting ‘‘$546,700,000,000’’. 
Æ 
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