Empowering Patients First Act of 2015
This bill repeals the Patient Protection and Affordable Care Act and the health care provisions of the Health Care and Education and Reconciliation Act of 2010, effective as of their enactment. This bill replaces those provisions with amendments to the Internal Revenue Code, the Public Health Service Act, and the Employee Retirement Income Security Act of 1974 (ERISA) to address health care coverage.
The bill provides for refundable tax credits for health insurance coverage and health savings account (HSA) contributions.
The bill raises the annual HSA contribution limit, expands eligibility for tax-deductible HSA contributions, and allows HSAs to be used to pay periodic or capitated primary care fees.
A limit is placed on the amount of an employer's contribution to health coverage that can be excluded from the employee's taxable income.
The Department of Health and Human Services (HHS) must provide a grant to each state for high-risk pools or reinsurance pools to subsidize health insurance for high-risk populations and individuals.
Funds authorized, tax credits, and tax deductions under this Act may not be used to pay for an abortion or health coverage that includes abortion, with exceptions.
This bill provides for the establishment and governance of independent health pools, entities that form risk pools to offer health insurance coverage to their members.
Small Business Health Fairness Act of 2015
This bill provides for the establishment and governance of association health plans, which are group health plans sponsored by business associations that meet certain ERISA certification requirements.
Health insurers offering individual coverage may deny coverage to an individual, outside of open enrollment periods. Preexisting conditions may be excluded from coverage under certain conditions.
Individual health insurance coverage is governed by the laws of a state designated by the health insurance issuer.
HHS must issue clinical practice guidelines. The bill specifies how these guidelines may be used in a health care lawsuit.
HHS may not use comparative effectiveness research or patient-centered outcomes research to deny coverage of an item or service under a federal health care program.
This bill amends title XVIII (Medicare) of the Social Security Act to permit Medicare beneficiaries to contract with a physician or practitioner for covered health care and submit a claim for payment under Medicare.
Health care professionals are exempted from federal and state antitrust laws in connection with negotiations with a health plan to provide health care items or services.
[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2300 Introduced in House (IH)]
114th CONGRESS
1st Session
H. R. 2300
To provide for incentives to encourage health insurance coverage, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 13, 2015
Mr. Tom Price of Georgia (for himself, Mr. Hensarling, Mrs. Blackburn,
Mr. Harris, Mr. Benishek, Mrs. Ellmers of North Carolina, Mr. Bucshon,
Mr. Pittenger, Mr. Meadows, Mr. Duncan of South Carolina, Mr. McKinley,
Mr. Thompson of Pennsylvania, Mr. Franks of Arizona, Mr. Tipton, Mr.
Webster of Florida, Mr. Westmoreland, Mr. Rigell, Mr. Lamborn, Mr.
Huizenga of Michigan, Mr. Olson, Mr. Perry, Mr. Yoho, Mr. Amodei, Mr.
Rothfus, Mr. Stewart, Mr. Rouzer, Mr. Guinta, Mrs. Black, Mr. Jenkins
of West Virginia, Mr. DesJarlais, Mrs. Hartzler, Mr. Heck of Nevada,
Mr. Miller of Florida, Mr. Mulvaney, Mr. Ribble, Mr. Rice of South
Carolina, Mr. Roe of Tennessee, Mr. Roskam, Mr. Wenstrup, Mr. Wilson of
South Carolina, Mr. Woodall, Mr. Yoder, Mr. Pearce, Mr. Harper, Mr.
McClintock, Mr. Gowdy, and Mr. Goodlatte) introduced the following
bill; which was referred to the Committee on Energy and Commerce, and
in addition to the Committees on Ways and Means, Education and the
Workforce, the Judiciary, Natural Resources, House Administration,
Rules, Appropriations, and Oversight and Government Reform, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To provide for incentives to encourage health insurance coverage, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Empowering
Patients First Act of 2015''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Repeal of PPACA and health care-related HCERA provisions.
Sec. 3. No mandate of guaranteed issue or community rating.
TITLE I--TAX INCENTIVES FOR MAINTAINING HEALTH INSURANCE COVERAGE
Subtitle A--Tax Credit for Health Insurance Coverage
Sec. 101. Refundable tax credit for health insurance coverage.
Sec. 102. Election of tax credit instead of alternative government or
group plan benefits.
Subtitle B--Health Savings Accounts
Sec. 111. Refundable tax credit for health savings account
contributions.
Sec. 112. Allowing HSA rollover to child or parent of account holder.
Sec. 113. Maximum contribution limit to HSA coordinated with retirement
savings account limitation.
Sec. 114. Transfer of required minimum distribution from retirement
plan to health savings account.
Sec. 115. Equivalent bankruptcy protections for health savings accounts
as retirement funds.
Sec. 116. Allow both spouses to make catch-up contributions to the same
HSA account.
Sec. 117. Provisions relating to Medicare.
Sec. 118. Individuals eligible for veterans benefits for a service-
connected disability.
Sec. 119. Individuals eligible for Indian Health Service assistance.
Sec. 120. Individuals eligible for TRICARE coverage.
Sec. 121. FSA and HRA interaction with HSAs.
Sec. 122. Special rule for certain medical expenses incurred before
establishment of account.
Sec. 123. Preventive care prescription drug clarification.
Sec. 124. Administrative error correction before due date of return.
Sec. 125. Members of health care sharing ministries eligible to
establish health savings accounts.
Sec. 126. High deductible health plans renamed HSA qualified plans.
Sec. 127. Treatment of direct primary care service arrangements.
Sec. 128. Certain provider fees to be treated as medical care.
Sec. 129. Clarification of treatment of capitated primary care payments
as amounts paid for medical care.
Subtitle C--Other Provisions
Sec. 131. Limitation on employer-provided health care coverage.
Sec. 132. Limitation on abortion funding.
Sec. 133. No government discrimination against certain health care
entities.
Sec. 134. Equal employer contribution rule to promote choice.
Sec. 135. Limitations on State restrictions on employer auto-
enrollment.
Sec. 136. Credit for small employers adopting auto-enrollment and
defined contribution options.
TITLE II--HEALTH CARE ACCESS AND AVAILABILITY
Subtitle A--Health Insurance Pooling Mechanisms for Individuals
Sec. 201. Federal grants for State insurance expenditures.
Sec. 202. Pool reform for individual membership expansion.
Subtitle B--Small Business Health Fairness
Sec. 211. Short title.
Sec. 212. Rules governing association health plans.
Sec. 213. Clarification of treatment of single employer arrangements.
Sec. 214. Enforcement provisions relating to association health plans.
Sec. 215. Cooperation between Federal and State authorities.
Sec. 216. Effective date and transitional and other rules.
Subtitle C--Health Insurance Reforms
Sec. 221. Requirements for individual health insurance.
TITLE III--INTERSTATE MARKET FOR HEALTH INSURANCE
Sec. 301. Cooperative governing of individual health insurance
coverage.
TITLE IV--LAWSUIT ABUSE REFORMS
Sec. 401. Change in burden of proof based on compliance with clinical
practice guidelines.
Sec. 402. State grants to create expert panels and administrative
health care tribunals.
Sec. 403. Payment of damages and recovery of costs in health care
lawsuits.
Sec. 404. Definitions.
Sec. 405. Effect on other laws.
Sec. 406. Applicability; effective date.
TITLE V--WELLNESS AND PREVENTION
Sec. 501. Providing financial incentives for treatment compliance.
TITLE VI--TRANSPARENCY AND INSURANCE REFORM MEASURES
Sec. 601. Receipt and response to requests for claim information.
TITLE VII--QUALITY
Sec. 701. Prohibition on certain uses of data obtained from comparative
effectiveness research or from patient-
centered outcomes research; accounting for
personalized medicine and differences in
patient treatment response.
Sec. 702. Establishment of performance-based quality measures.
TITLE VIII--STATE TRANSPARENCY PLAN PORTAL
Sec. 801. Providing information on health coverage options and health
care providers.
TITLE IX--PATIENT FREEDOM OF CHOICE
Sec. 901. Guaranteeing freedom of choice and contracting for patients
under Medicare.
Sec. 902. Preemption of State laws limiting charges for eligible
professional services.
Sec. 903. Health care provider licensure cannot be conditioned on
participation in a health plan.
Sec. 904. Bad debt deduction for doctors to partially offset the cost
of providing uncompensated care required to
be provided under amendments made by the
Emergency Medical Treatment and Labor Act.
Sec. 905. Right of contract with health care providers.
TITLE X--QUALITY HEALTH CARE COALITION
Sec. 1001. Quality Health Care Coalition.
SEC. 2. REPEAL OF PPACA AND HEALTH CARE-RELATED HCERA PROVISIONS.
(a) PPACA.--Effective as of the enactment of the Patient Protection
and Affordable Care Act (Public Law 111-148), such Act is repealed, and
the provisions of law amended or repealed by such Act are restored or
revived as if such Act had not been enacted.
(b) Health Care-Related Provisions in the Health Care and Education
Reconciliation Act of 2010.--Effective as of the enactment of the
Health Care and Education Reconciliation Act of 2010 (Public Law 111-
152), title I and subtitle B of title II of such Act are repealed, and
the provisions of law amended or repealed by such title or subtitle,
respectively, are restored or revived as if such title and subtitle had
not been enacted.
SEC. 3. NO MANDATE OF GUARANTEED ISSUE OR COMMUNITY RATING.
Nothing in this Act shall be construed to provide a mandate for
guaranteed issue or community rating in the private insurance market.
TITLE I--TAX INCENTIVES FOR MAINTAINING HEALTH INSURANCE COVERAGE
Subtitle A--Tax Credit for Health Insurance Coverage
SEC. 101. REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE COVERAGE.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986, as amended by section 2, is
amended by inserting after section 36A the following new section:
``SEC. 36B. HEALTH INSURANCE COVERAGE.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by subtitle A the aggregate
monthly credit amounts determined under subsection (b) with respect to
the taxpayer and the taxpayer's qualifying family members for eligible
coverage months beginning during the taxable year.
``(b) Monthly Credit Amounts.--
``(1) In general.--The monthly credit amount with respect
to any individual for any eligible coverage month is \1/12\
of--
``(A) $900 in the case of an individual who has not
attained age 18 as of the beginning of such month,
``(B) $1,200 in the case of an individual who has
so attained age 18 but who has not so attained age 35,
``(C) $2,100 in the case of an individual who has
so attained age 35, but who has not so attained age 50,
and
``(D) $3,000 in the case of an individual who has
so attained age 50.
``(2) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2016, each dollar
amount contained in paragraph (1) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2015' for `calendar year 1992' in
subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $50.
``(c) Eligible Coverage Month.--For purposes of this section, the
term `eligible coverage month' means, with respect to any individual,
any month if, as of the first day of such month, the individual--
``(1) is covered by qualified health insurance,
``(2) does not have other specified coverage, and
``(3) is not imprisoned under Federal, State, or local
authority.
``(d) Qualifying Family Member.--For purposes of this section, the
term `qualifying family member' means--
``(1) in the case of a joint return, the taxpayer's spouse,
and
``(2) any dependent of the taxpayer.
``(e) Qualified Health Insurance.--For purposes of this section,
the term `qualified health insurance' means health insurance coverage
(other than excepted benefits as defined in section 9832(c)) which
constitutes medical care.
``(f) Other Specified Coverage.--For purposes of this section, an
individual has other specified coverage for any month if, as of the
first day of such month--
``(1) Coverage under medicare, medicaid, or schip.--Such
individual--
``(A) is entitled to benefits under part A of title
XVIII of the Social Security Act or is enrolled under
part B of such title, or
``(B) is enrolled in the program under title XIX or
XXI of such Act (other than under section 1928 of such
Act).
``(2) Certain other coverage.--Such individual--
``(A) is enrolled in a health benefits plan under
chapter 89 of title 5, United States Code,
``(B) is entitled to receive benefits under chapter
55 of title 10, United States Code,
``(C) is entitled to receive benefits under chapter
17 of title 38, United States Code,
``(D) is enrolled in a group health plan (within
the meaning of section 5000(b)(1)) which is subsidized
by the employer, or
``(E) is a member of a health care sharing
ministry.
``(3) Health care sharing ministry.--For purposes of this
subsection, the term `health care sharing ministry' means an
organization--
``(A) which is described in section 501(c)(3) and
is exempt from taxation under section 501(a),
``(B) members of which share a common set of
ethical or religious beliefs and share medical expenses
among members in accordance with those beliefs and
without regard to the State in which a member resides
or is employed,
``(C) members of which retain membership even after
they develop a medical condition,
``(D) which (or a predecessor of which) has been in
existence at all times since December 31, 1999, and
medical expenses of its members have been shared
continuously and without interruption since at least
December 31, 1999, and
``(E) which conducts an annual audit which is
performed by an independent certified public accounting
firm in accordance with generally accepted accounting
principles and which is made available to the public
upon request.
``(g) Special Rules.--
``(1) Credit in excess of premiums only payable to a health
savings account.--
``(A) In general.--If the credit allowed under
subsection (a) (determined without regard to clause
(ii)) for any taxable year exceeds the amount of
premiums paid by the taxpayer for coverage of the
taxpayer and the taxpayer's qualifying family members
under qualified health insurance for eligible coverage
months beginning in the taxable year--
``(i) at the request of the taxpayer, the
Secretary shall pay the amount of such excess
to one or more health savings accounts of the
taxpayer or of any qualifying family member of
the taxpayer, and
``(ii) the credit allowed under subsection
(a) for such taxable year shall not exceed the
amount of such premiums.
``(B) Medical and health savings accounts.--Amounts
distributed from an Archer MSA (as defined in section
220(d)) or from a health savings account (as defined in
section 223(d)) shall not be taken into account as
premiums paid under subparagraph (A).
``(C) Insurance which covers other individuals.--
For purposes of this paragraph, rules similar to the
rules of section 213(d)(6) shall apply with respect to
any contract for qualified health insurance under which
amounts are payable for coverage of an individual other
than the taxpayer and qualifying family members.
``(D) Contributions treated as rollovers, etc.--
``(i) In general.--Any amount paid the
Secretary to a health savings account under
this paragraph shall be treated for purposes of
this title in the same manner as a rollover
contribution described in section 223(f)(5).
``(ii) Coordination with limitation on
rollovers.--Any amount described in clause (i)
shall not be taken into account in applying
section 223(f)(5)(B) with respect to any other
amount and the limitation of section
223(f)(5)(B) shall not apply with respect to
the application of clause (i).
``(iii) Establishment of hsas.--Nothing in
any provision of law shall be construed--
``(I) to prevent an individual from
establishing a health savings account
(as defined in section 223(d)) merely
because such individual is not an
eligible individual (as defined in
section 223(c)), or
``(II) to prevent such an account
from being treated as a health savings
account merely because all or a
substantial portion of the
contributions to such account are
described in this paragraph.
``(2) Coordination with advance payments of credit.--With
respect to any taxable year--
``(A) the amount which would (but for this
subsection) be allowed as a credit to the taxpayer
under subsection (a) shall be reduced (but not below
zero) by the aggregate amount paid on behalf of such
taxpayer under section 7529 for months beginning in
such taxable year, and
``(B) the tax imposed by section 1 for such taxable
year shall be increased by the excess (if any) of--
``(i) the aggregate amount paid on behalf
of such taxpayer under section 7529 for months
beginning in such taxable year, over
``(ii) the amount which would (but for this
subsection) be allowed as a credit to the
taxpayer under subsection (a).
``(3) Coordination with other provisions.--For purposes of
any deduction allowed under section 162(l), 213, or 224, and
any credit allowed under section 35, any health insurance
premiums which would (but for this paragraph) be taken into
account shall be reduced (but not below zero) by the amount of
the credit allowed under this section (determined without
regard to paragraphs (1) and (2) of this subsection).
``(4) Denial of credit to dependents and nonpermanent
resident alien individuals.--No credit shall be allowed under
this section to any individual who is--
``(A) not a citizen or lawful permanent resident of
the United States for the calendar year in which the
taxable year begins, or
``(B) a dependent with respect to another taxpayer
for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(5) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be necessary or
appropriate to carry out this section, section 6050W, and
section 7529.''.
(b) Advance Payment of Credit.--
(1) In general.--Chapter 77 of the Internal Revenue Code of
1986 (relating to miscellaneous provisions) is amended by
adding at the end the following:
``SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COVERAGE.
``(a) General Rule.--Not later than January 1, 2016, the Secretary
shall establish a program for making payments to providers of qualified
health insurance (as defined in section 36B(e)) on behalf of taxpayers
eligible for the credit under section 36B.
``(b) Limitation.--The aggregate payments made under this section
with respect to any taxpayer, determined as of any time during any
calendar year, shall not exceed the monthly credit amounts determined
with respect to such taxpayer under section 36B for months during such
calendar year which have ended as of such time.
``(c) Application of Rule That Credits in Excess of Premiums Only
Payable to a Health Savings Account.--Under rules similar to the rules
of section 36B(g)(1), any amount otherwise payable on behalf of the
taxpayer under subsection (a) with respect to any eligible coverage
month which is in excess of the amount of premiums paid by the taxpayer
for coverage of the taxpayer and the taxpayer's qualifying family
members under qualified health insurance for such month shall be
payable only to one or more health savings accounts of the taxpayer or
of any qualifying family member of the taxpayer.
``(d) Certification Process and Proof of Coverage.--The Secretary
shall establish a process under which individuals are certified as
eligible for payment under this section. Such process shall include an
initial application by the taxpayer to determine eligibility and
thereafter continued eligibility shall be determined, to the maximum
extent feasible, by the Secretary on the basis of information provided
under section 6050X.
``(e) Definitions.--For purposes of this section, terms used in
this section which are also used in section 36B shall have the same
meaning as when used in section 36B.''.
(2) Information reporting.--
(A) In general.--Subpart B of part III of
subchapter A of chapter 61 of such Code (relating to
information concerning transactions with other persons)
is amended by adding at the end the following new
section:
``SEC. 6050X. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COVERAGE.
``(a) Requirement of Reporting.--Every person who provides
qualified health insurance for any month of any calendar year with
respect to any individual shall, at such time as the Secretary may
prescribe, make the return described in subsection (b) with respect to
each such individual. With respect to any individual with respect to
whom payments under section 7529 are made by the Secretary, the
Secretary may require that reporting under subsection (b) be made on a
monthly basis.
``(b) Form and Manner of Returns.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains, with respect to each policy of qualified
health insurance--
``(A) the name, address, and TIN of each individual
covered under such policy,
``(B) the premiums paid with respect to such
policy, and
``(C) such other information as the Secretary may
prescribe.
``(c) Statements To Be Furnished to Individuals With Respect to
Whom Information Is Required.--Every person required to make a return
under subsection (a) shall furnish to each individual whose name is
required to be set forth in such return a written statement showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact for
such person, and
``(2) the information required to be shown on the return
with respect to such individual.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year to which such statement relates.
``(d) Definitions.--For purposes of this section, terms used in
this section which are also used in section 36B shall have the same
meaning as when used in section 36B.''.
(B) Assessable penalties.--
(i) Subparagraph (B) of section 6724(d)(1)
of such Code, as amended by section 2, is
amended by striking ``or'' at the end of clause
(xxii), by striking ``and'' at the end of
clause (xxiii) and inserting ``or'', and by
inserting after clause (xxiii) the following
new clause:
``(xxiv) section 6050X (relating to returns
relating to credit for health insurance
coverage), and''.
(ii) Paragraph (2) of section 6724(d) of
such Code, as amended by section 2, is amended
by striking ``or'' at the end of subparagraph
(EE), by striking the period at the end of
subparagraph (FF) and inserting ``, or'', and
by adding after subparagraph (FF) the following
new subparagraph:
``(GG) section 6050X (relating to returns relating
to credit for health insurance coverage).''.
(3) Disclosure of return information for purposes of
advance payment of credit as premiums for qualified health
insurance.--
(A) In general.--Subsection (l) of section 6103 of
such Code, as amended by section 2, is amended by
adding at the end the following new paragraph:
``(21) Disclosure of return information related to payments
of the health insurance coverage credit.--The Secretary may, on
behalf of taxpayers eligible for the credit under section 36B,
disclose to a provider of qualified health insurance (as
defined in section 36(e)) or a trustee of a health savings
account (and persons acting on behalf of such provider or such
trustee), return information with respect to any such taxpayer
only to the extent necessary (as prescribed by regulations
issued by the Secretary) to carry out sections 36B(g)(1)
(relating to credit in excess of premiums only payable to a
health savings account) and 7529 (relating to advance payment
of credit for health insurance coverage).''.
(B) Confidentiality of information.--Paragraph (3)
of section 6103(a) of such Code, as amended by section
2, is amended by striking ``or (20)'' and inserting
``(20), or (21)''.
(C) Unauthorized disclosure.--Paragraph (2) of
section 7213(a) of such Code, as amended by section 2,
is amended by striking ``or (20)'' and inserting
``(20), or (21)''.
(4) Effective date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, as amended by section 2, is amended by inserting
``36B,'' after ``36A,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986,
as amended by section 2, is amended by inserting after the item
relating to section 36A the following new item:
``Sec. 36B. Health insurance coverage.''.
(3) The table of sections for subpart B of part III of
subchapter A of chapter 61 of such Code is amended by adding at
the end the following new item:
``Sec. 6050X. Returns relating to credit for health insurance
coverage.''.
(4) The table of sections for chapter 77 of such Code is
amended by adding at the end the following new item:
``Sec. 7529. Advance payment of credit for health insurance
coverage.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2015.
SEC. 102. ELECTION OF TAX CREDIT INSTEAD OF ALTERNATIVE GOVERNMENT OR
GROUP PLAN BENEFITS.
(a) In General.--Notwithstanding any other provision of law, an
individual who is otherwise eligible for benefits under a health
program (as defined in subsection (c)) may elect, in a form and manner
specified by the Secretary of Health and Human Services in consultation
with the Secretary of the Treasury, to receive a tax credit described
in section 36B of the Internal Revenue Code of 1986 (which may be used
for the purpose of health insurance coverage) in lieu of receiving any
benefits under such program.
(b) Effective Date.--An election under subsection (a) may first be
made for calendar year 2016 and any such election shall be effective
for such period (not less than one calendar year) as the Secretary of
Health and Human Services shall specify, in consultation with the
Secretary of the Treasury.
(c) Health Program Defined.--For purposes of this section, the term
``health program'' means any of the following:
(1) Medicare.--The Medicare program under part A of title
XVIII of the Social Security Act.
(2) Medicaid.--The Medicaid program under title XIX of such
Act (including such a program operating under a Statewide
waiver under section 1115 of such Act).
(3) SCHIP.--The State children's health insurance program
under title XXI of such Act.
(4) TRICARE.--The TRICARE program under chapter 55 of title
10, United States Code.
(5) Veterans benefits.--Coverage for benefits under chapter
17 of title 38, United States Code.
(6) FEHBP.--Coverage under chapter 89 of title 5, United
States Code.
(7) Subsidized group health plans.--Coverage under a group
health plan (within the meaning of section 5000(b)(1)) which is
subsidized by the employer.
(d) Other Social Security Benefits Not Waived.--An election to
waive the benefits described in subsection (c)(1) shall not result in
the waiver of any other benefits under the Social Security Act.
Subtitle B--Health Savings Accounts
SEC. 111. REFUNDABLE TAX CREDIT FOR HEALTH SAVINGS ACCOUNT
CONTRIBUTIONS.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986, as amended by the preceding
provisions of this Act, is amended by inserting after section 36B the
following new section:
``SEC. 36C. HEALTH SAVINGS ACCOUNT CONTRIBUTIONS.
``(a) In General.--In the case of an individual who is allowed a
deduction under section 223(a) for any taxable year, there shall be
allowed as a credit against the tax imposed by subtitle A for such
taxable year, the lesser of--
``(1) the amount so allowed as a deduction, or
``(2) $1,000.
``(b) Lifetime Limitation.--The credit allowed under subsection (a)
with respect to any individual shall not exceed the excess (if any) of
$1,000 over the aggregate credits allowed with respect to such
individual under subsection (a) for all prior taxable years.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, as amended by the preceding provisions of this
Act, is amended by inserting ``36B,'' after ``36A,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986,
as amended by the preceding provisions of this Act, is amended
by inserting after the item relating to section 36A the
following new item:
``Sec. 36B. Health insurance coverage.''.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, as amended by the preceding provisions of this
Act, is amended by inserting ``36C,'' after ``36B,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986,
as amended by the preceding provisions of this Act, is amended
by inserting after the item relating to section 36B the
following new item:
``Sec. 36C. Health savings account contributions.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 112. ALLOWING HSA ROLLOVER TO CHILD OR PARENT OF ACCOUNT HOLDER.
(a) In General.--Section 223(f)(8)(A) of the Internal Revenue Code
of 1986 is amended--
(1) by inserting ``child, parent, or grandparent'' after
``surviving spouse'',
(2) by inserting ``child, parent, or grandparent, as the
case may be,'' after ``the spouse'',
(3) by inserting ``, child, parent, or grandparent'' after
``spouse'' in the heading thereof, and
(4) by adding at the end the following: ``In the case of a
child who acquires such beneficiary's interest and with respect
to whom a deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins, such health
savings account shall be treated as a child health savings
account of the child.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 113. MAXIMUM CONTRIBUTION LIMIT TO HSA COORDINATED WITH RETIREMENT
SAVINGS ACCOUNT LIMITATION.
(a) Self-Only Coverage.--Section 223(b)(2)(A) of the Internal
Revenue Code of 1986 is amended by striking ``$2,250'' and inserting
``the amount in effect under section 219(b)(5)(A)''.
(b) Family Coverage.--Section 223(b)(2)(B) of such Code is amended
by striking ``$4,500'' and inserting ``twice the amount in effect under
subparagraph (A)''.
(c) Conforming Amendments.--Section 223(g)(1) of such Code is
amended--
(1) in the matter preceding subparagraph (A), by striking
``subsections (b)(2) and (c)(2)(A)'' and inserting ``subsection
(c)(2)(A)'',
(2) in subparagraph (B), by striking ``by substituting''
and all that follows through the end of clause (ii) and
inserting ``by substituting `calendar year 2003' for `calendar
year 1992' in subparagraph (B) thereof.'', and
(3) in the matter following subparagraph (B), by striking
``subsections (b)(2) and (c)(2)(A)'' and inserting ``subsection
(c)(2)(A)''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 114. TRANSFER OF REQUIRED MINIMUM DISTRIBUTION FROM RETIREMENT
PLAN TO HEALTH SAVINGS ACCOUNT.
(a) Transfer From Retirement Plan.--
(1) Individual retirement accounts.--Section 408(d) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
``(10) Required minimum distribution transferred to health
savings account.--
``(A) In general.--In the case of an individual who
has attained the age of 70\1/2\ and who elects the
application of this paragraph for a taxable year, gross
income of the individual for the taxable year does not
include a qualified HSA transfer to the extent such
transfer is otherwise includible in gross income.
``(B) Qualified hsa transfer.--For purposes of this
paragraph, the term `qualified HSA transfer' means any
distribution from an individual retirement plan--
``(i) to a health savings account of the
individual in a direct trustee-to-trustee
transfer,
``(ii) to the extent such distribution does
not exceed the required minimum distribution
determined under section 401(a)(9) for the
distribution calendar year ending during the
taxable year.
``(C) Application of section 72.--Notwithstanding
section 72, in determining the extent to which an
amount is treated as otherwise includible in gross for
purposes of subparagraph (A), the aggregate amount
distributed from an individual retirement plan shall be
treated as includible in gross income to the extent
that such amount does not exceed the aggregate amount
which would have been so includible if all amounts from
all individual retirement plans were distributed.
Proper adjustments shall be made in applying section 72
to other distributions in such taxable year and
subsequent taxable years.
``(D) Coordination.--An election may not be made
under subparagraph (A) for a taxable year for which an
election is in effect under paragraph (9).''.
(2) Other retirement plans.--Section 402 of such Code is
amended by adding at the end the following new subsection:
``(m) Required Minimum Distribution Transferred to Health Savings
Account.--
``(1) In general.--In the case of an individual who has
attained the age of 70\1/2\ and who elects the application of
this subsection for a taxable year, gross income of the
individual for the taxable year does not include a qualified
HSA transfer to the extent such transfer is otherwise
includible in gross income.
``(2) Qualified hsa transfer.--For purposes of this
subsection, the term `qualified HSA transfer' means any
distribution from a retirement plan--
``(A) to a health savings account of the individual
in a direct trustee-to-trustee transfer,
``(B) to the extent such distribution does not
exceed the required minimum distribution determined
under section 401(a)(9) for the distribution calendar
year ending during the taxable year.
``(3) Application of section 72.--Notwithstanding section
72, in determining the extent to which an amount is treated as
otherwise includible in gross for purposes of paragraph (1),
the aggregate amount distributed from an individual retirement
plan shall be treated as includible in gross income to the
extent that such amount does not exceed the aggregate amount
which would have been so includible if all amounts from all
individual retirement plans were distributed. Proper
adjustments shall be made in applying section 72 to other
distributions in such taxable year and subsequent taxable
years.
``(4) Eligible retirement plan.--For purposes of this
subsection, the term `eligible retirement plan' has the meaning
given such term by subsection (c)(8)(B) (determined without
regard to clauses (i) and (ii) thereof).''.
(b) Transfer to Health Savings Account.--
(1) In general.--Section 223(d)(1)(A) of such Code is
amended by striking ``or'' at the end of clause (i), by
striking the period at the end of clause (ii)(II) and inserting
``, or'', and by adding at the end the following new clause:
``(iii) unless it is in a qualified HSA
transfer described in section 408(d)(10) or
402(m).''.
(2) Excise tax inapplicable to qualified hsa transfer.--
Section 4973(g)(1) of such Code is amended by inserting ``or in
a qualified HSA transfer described in section 408(d)(10) or
402(m)'' after ``or 223(f)(5)''.
(c) Effective Date.--The amendments made by this section shall
apply to distributions made after the date of the enactment of this
Act.
SEC. 115. EQUIVALENT BANKRUPTCY PROTECTIONS FOR HEALTH SAVINGS ACCOUNTS
AS RETIREMENT FUNDS.
(a) In General.--Section 522 of title 11, United States Code, is
amended by adding at the end the following new subsection:
``(r) Treatment of Health Savings Accounts.--For purposes of this
section, any health savings account (as described in section 223 of the
Internal Revenue Code of 1986) shall be treated in the same manner as
an individual retirement account described in section 408 of such
Code.''.
(b) Effective Date.--The amendment made by this section shall apply
to cases commencing under title 11, United States Code, after the date
of the enactment of this Act.
SEC. 116. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CONTRIBUTIONS TO THE SAME
HSA ACCOUNT.
(a) In General.--Section 223(b)(3) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(C) Special rule where both spouses are eligible
individuals with 1 account.--If--
``(i) an individual and the individual's
spouse have both attained age 55 before the
close of the taxable year, and
``(ii) the spouse is not an account
beneficiary of a health savings account as of
the close of such year,
the additional contribution amount shall be twice the
amount otherwise determined under subparagraph (B).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 117. PROVISIONS RELATING TO MEDICARE.
(a) Individuals Over Age 65 Only Enrolled in Medicare Part A.--
Section 223(b)(7) of the Internal Revenue Code of 1986 is amended by
adding at the end the following: ``This paragraph shall not apply to
any individual during any period for which the individual's only
entitlement to such benefits is an entitlement to hospital insurance
benefits under part A of title XVIII of such Act pursuant to an
enrollment for such hospital insurance benefits under section 226(a)(1)
of such Act.''.
(b) Medicare Beneficiaries Participating in Medicare Advantage MSA
May Contribute Their Own Money to Their MSA.--
(1) In general.--Section 138(b) of such Code is amended by
striking paragraph (2) and by redesignating paragraphs (3) and
(4) as paragraphs (2) and (3), respectively.
(2) Conforming amendment.--Section 138(c)(4) of such Code
is amended by striking ``and paragraph (2)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 118. INDIVIDUALS ELIGIBLE FOR VETERANS BENEFITS FOR A SERVICE-
CONNECTED DISABILITY.
(a) In General.--Section 223(c)(1) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(C) Special rule for individuals eligible for
certain veterans benefits.--For purposes of
subparagraph (A)(ii), an individual shall not be
treated as covered under a health plan described in
such subparagraph merely because the individual
receives periodic hospital care or medical services for
a service-connected disability under any law
administered by the Secretary of Veterans Affairs but
only if the individual is not eligible to receive such
care or services for any condition other than a
service-connected disability.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 119. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERVICE ASSISTANCE.
(a) In General.--Section 223(c)(1) of the Internal Revenue Code of
1986, as amended by the preceding provisions of this Act, is amended by
adding at the end the following new subparagraph:
``(D) Special rule for individuals eligible for
assistance under indian health service programs.--For
purposes of subparagraph (A)(ii), an individual shall
not be treated as covered under a health plan described
in such subparagraph merely because the individual
receives hospital care or medical services under a
medical care program of the Indian Health Service or of
a tribal organization.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 120. INDIVIDUALS ELIGIBLE FOR TRICARE COVERAGE.
(a) In General.--Section 223(c)(1) of the Internal Revenue Code of
1986, as amended by the preceding provisions of this Act, is amended by
adding at the end the following new subparagraph:
``(E) Special rule for individuals eligible for
assistance under tricare.--For purposes of subparagraph
(A)(ii), an individual shall not be treated as covered
under a health plan described in such subparagraph
merely because the individual is eligible to receive
hospital care, medical services, or prescription drugs
under TRICARE Extra or TRICARE Standard and such
individual is not enrolled in TRICARE Prime.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 121. FSA AND HRA INTERACTION WITH HSAS.
(a) Eligible Individuals Include FSA and HRA Participants.--Section
223(c)(1)(B) of the Internal Revenue Code of 1986 is amended--
(1) by striking ``and'' at the end of clause (ii),
(2) by striking the period at the end of clause (iii) and
inserting ``, and'', and
(3) by inserting after clause (iii) the following new
clause:
``(iv) coverage under a health flexible
spending arrangement or a health reimbursement
arrangement in the plan year a qualified HSA
distribution as described in section 106(e) is
made on behalf of the individual if after the
qualified HSA distribution is made and for the
remaining duration of the plan year, the
coverage provided under the health flexible
spending arrangement or health reimbursement
arrangement is converted to--
``(I) coverage that does not pay or
reimburse any medical expense incurred
before the minimum annual deductible
under paragraph (2)(A)(i) (prorated for
the period occurring after the
qualified HSA distribution is made) is
satisfied,
``(II) coverage that, after the
qualified HSA distribution is made,
does not pay or reimburse any medical
expense incurred after the qualified
HSA distribution is made other than
preventive care as defined in paragraph
(2)(C),
``(III) coverage that, after the
qualified HSA distribution is made,
pays or reimburses benefits for
coverage described in clause (ii) (but
not through insurance or for long-term
care services),
``(IV) coverage that, after the
qualified HSA distribution is made,
pays or reimburses benefits for
permitted insurance or coverage
described in clause (ii) (but not for
long-term care services),
``(V) coverage that, after the
qualified HSA distribution is made,
pays or reimburses only those medical
expenses incurred after an individual's
retirement (and no expenses incurred
before retirement), or
``(VI) coverage that, after the
qualified HSA distribution is made, is
suspended, pursuant to an election made
on or before the date the individual
elects a qualified HSA distribution or,
if later, on the date of the individual
enrolls in a high deductible health
plan, that does not pay or reimburse,
at any time, any medical expense
incurred during the suspension period
except as defined in the preceding
subclauses of this clause.''.
(b) Qualified HSA Distribution Shall Not Affect Flexible Spending
Arrangement.--Section 106(e)(1) of such Code is amended to read as
follows:
``(1) In general.--A plan shall not fail to be treated as a
health flexible spending arrangement under this section,
section 105, or section 125, or as a health reimbursement
arrangement under this section or section 105, merely because
such plan provides for a qualified HSA distribution.''.
(c) FSA Balances at Year End Shall Not Forfeit.--Section 125(d)(2)
of such Code is amended by adding at the end the following new
subparagraph:
``(E) Exception for qualified hsa distributions.--
Subparagraph (A) shall not apply to the extent that
there is an amount remaining in a health flexible
spending account at the end of a plan year that an
individual elects to contribute to a health savings
account pursuant to a qualified HSA distribution (as
defined in section 106(e)(2)).''.
(d) Simplification of Limitations on FSA and HRA Rollovers.--
Section 106(e)(2) of such Code is amended to read as follows:
``(2) Qualified hsa distribution.--
``(A) In general.--The term `qualified HSA
distribution' means a distribution from a health
flexible spending arrangement or health reimbursement
arrangement to the extent that such distribution does
not exceed the lesser of--
``(i) the balance in such arrangement as of
the date of such distribution, or
``(ii) the amount determined under
subparagraph (B).
Such term shall not include more than 1 distribution
with respect to any arrangement.
``(B) Dollar limitations.--
``(i) Distributions from a health flexible
spending arrangement.--A qualified HSA
distribution from a health flexible spending
arrangement shall not exceed the applicable
amount.
``(ii) Distributions from a health
reimbursement arrangement.--A qualified HSA
distribution from a health reimbursement
arrangement shall not exceed--
``(I) the applicable amount divided
by 12, multiplied by
``(II) the number of months during
which the individual is a participant
in the health reimbursement
arrangement.
``(iii) Applicable amount.--For purposes of
this subparagraph, the applicable amount is--
``(I) the dollar amount in effect
under section 223(b)(2)(A) in the case
of an eligible individual who has self-
only coverage under a high deductible
health plan at the time of such
distribution, and
``(II) twice the dollar amount in
effect under subclause (I) in the case
of an eligible individual who has
family coverage under a high deductible
health plan at the time of such
distribution.''.
(e) Elimination of Additional Tax for Failure To Maintain High
Deductible Health Plan Coverage.--Section 106(e) of such Code is
amended--
(1) by striking paragraph (3) and redesignating paragraphs
(4) and (5) as paragraphs (3) and (4), respectively, and
(2) by striking subparagraph (A) of paragraph (3), as so
redesignated, and redesignating subparagraphs (B) and (C) of
such paragraph as subparagraphs (A) and (B) thereof,
respectively.
(f) Limited Purpose FSAs and HRAs.--Section 106(e) of such Code, as
amended by this section, is amended by adding at the end the following
new paragraph:
``(5) Limited purpose fsas and hras.--A plan shall not fail
to be a health flexible spending arrangement or health
reimbursement arrangement under this section or section 105
merely because the plan converts coverage for individuals who
enroll in a high deductible health plan described in section
223(c)(2) to coverage described in section 223(c)(1)(B)(iv).
Coverage for such individuals may be converted as of the date
of enrollment in the high deductible health plan, without
regard to the period of coverage under the health flexible
spending arrangement or health reimbursement arrangement, and
without requiring any change in coverage to individuals who do
not enroll in a high deductible health plan.''.
(g) Disclaimer of Disqualifying Coverage.--Section 223(c)(1)(B) of
such Code, as amended by this section, is amended--
(1) by striking ``and'' at the end of clause (iii),
(2) by striking the period at the end of clause (iv) and
inserting ``, and'', and
(3) by inserting after clause (iv) the following new
clause:
``(v) any coverage (including prospective
coverage) under a health plan that is not a
high deductible health plan which is disclaimed
in writing, at the time of the creation or
organization of the health savings account,
including by execution of a trust described in
subsection (d)(1) through a governing
instrument that includes such a disclaimer, or
by acceptance of an amendment to such a trust
that includes such a disclaimer.''.
(h) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 122. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE
ESTABLISHMENT OF ACCOUNT.
(a) In General.--Section 223(d)(2) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(D) Certain medical expenses incurred before
establishment of account treated as qualified.--An
expense shall not fail to be treated as a qualified
medical expense solely because such expense was
incurred before the establishment of the health savings
account if such expense was incurred--
``(i) during either--
``(I) the taxable year in which the
health savings account was established,
or
``(II) the preceding taxable year
in the case of a health savings account
established after the taxable year in
which such expense was incurred but
before the time prescribed by law for
filing the return for such taxable year
(not including extensions thereof), and
``(ii) for medical care of an individual
during a period that such individual was
covered by a high deductible health plan and
met the requirements of subsection
(c)(1)(A)(ii) (after application of subsection
(c)(1)(B)).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 123. PREVENTIVE CARE PRESCRIPTION DRUG CLARIFICATION.
(a) Clarify Use of Drugs in Preventive Care.--Section 223(c)(2)(C)
of the Internal Revenue Code of 1986 is amended by adding at the end
the following: ``Preventive care shall include prescription and over-
the-counter drugs and medicines which have the primary purpose of
preventing the onset of, further deterioration from, or complications
associated with chronic conditions, illnesses, or diseases.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2003.
SEC. 124. ADMINISTRATIVE ERROR CORRECTION BEFORE DUE DATE OF RETURN.
(a) In General.--Section 223(f)(4) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(D) Exception for administrative errors corrected
before due date of return.--Subparagraph (A) shall not
apply if any payment or distribution is made to correct
an administrative, clerical or payroll contribution
error and if--
``(i) such distribution is received by the
individual on or before the last day prescribed
by law (including extensions of time) for
filing such individual's return for such
taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
contribution.
Any net income described in clause (ii) shall be
included in the gross income of the individual for the
taxable year in which it is received.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
SEC. 125. MEMBERS OF HEALTH CARE SHARING MINISTRIES ELIGIBLE TO
ESTABLISH HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 223 of the Internal Revenue Code of 1986,
as amended by the preceding provisions of this Act, is amended by
adding at the end the following new subsection:
``(j) Application to Health Care Sharing Ministries.--For purposes
of this section, membership in a health care sharing ministry (as
defined in section 5000A(d)(2)(B)(ii)) shall be treated as coverage
under a high deductible health plan.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 126. HIGH DEDUCTIBLE HEALTH PLANS RENAMED HSA QUALIFIED PLANS.
(a) In General.--Section 223 of the Internal Revenue Code of 1986,
as amended by this Act, is amended by striking ``high deductible health
plan'' each place it appears and inserting ``HSA qualified health
plan''.
(b) Conforming Amendments.--
(1) Section 106(e) of such Code, as amended by this Act, is
amended by striking ``high deductible health plan'' each place
it appears and inserting ``HSA qualified health plan''.
(2) The heading for section 223(c)(2) of such Code is
amended by striking ``High deductible health plan'' and
inserting ``HSA qualified health plan''.
(3) Section 408(d)(9) of such Code is amended--
(A) by striking ``high deductible health plan''
each place it appears in subparagraph (C) and inserting
``HSA qualified health plan'', and
(B) by striking ``High deductible health plan'' in
the heading of subparagraph (D) and inserting ``HSA
qualified health plan''.
SEC. 127. TREATMENT OF DIRECT PRIMARY CARE SERVICE ARRANGEMENTS.
(a) In General.--Section 223(c) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(6) Treatment of direct primary care service
arrangements.--An arrangement under which an individual is
provided coverage restricted to primary care services in
exchange for a fixed periodic fee--
``(A) shall not be treated as a health plan for
purposes of paragraph (1)(A)(ii), and
``(B) shall not be treated as insurance for
purposes of subsection (d)(2)(B).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 128. CERTAIN PROVIDER FEES TO BE TREATED AS MEDICAL CARE.
(a) In General.--Section 213(d) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(12) Periodic provider fees.--The term `medical care'
shall include periodic fees paid to a primary care physician
for the right to receive medical services on an as-needed
basis.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 129. CLARIFICATION OF TREATMENT OF CAPITATED PRIMARY CARE PAYMENTS
AS AMOUNTS PAID FOR MEDICAL CARE.
(a) In General.--Section 213(d) of the Internal Revenue Code of
1986, as amended by the preceding provision of this Act, is amended by
adding at the end the following new paragraph:
``(13) Treatment of capitated primary care payments.--
Capitated primary care payments shall be treated as amounts
paid for medical care.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
Subtitle C--Other Provisions
SEC. 131. LIMITATION ON EMPLOYER-PROVIDED HEALTH CARE COVERAGE.
(a) In General.--Section 106 of the Internal Revenue Code of 1986,
as amended by the preceding provisions of this Act, is amended by
adding at the end the following new subsection:
``(f) Limitation on Employer-Provided Health Care Coverage.--
``(1) In general.--The amount of any exclusion under
subsection (a) for any taxable year with respect to--
``(A) any employer-provided coverage under an
accident or health plan which constitutes medical care,
and
``(B) any employer contribution to an Archer MSA or
a health savings account which is treated by subsection
(b) or (d) as employer-provided coverage for medical
expenses under an accident or health plan,
shall not exceed $8,000 per employee for self-only coverage and
$20,000 for family coverage.
``(2) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2016, each dollar
amount contained in paragraph (1) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2015' for `calendar year 1992' in
subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $50.
``(3) Medical care defined.--For purposes of paragraph (1),
the term `medical care' has the meaning given to such term in
section 213(d) determined without regard to--
``(A) paragraph (1)(C) thereof, and
``(B) so much of paragraph (1)(D) thereof as
relates to qualified long-term care insurance.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2015.
SEC. 132. LIMITATION ON ABORTION FUNDING.
No funds authorized under, or credits or deductions allowed under
the Internal Revenue Code of 1986 by reason of, this Act (or any
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, except in the case where a woman suffers from a physical
disorder, physical injury, or physical illness that would, as certified
by a physician, place the woman in danger of death unless an abortion
is performed, including a life-endangering physical condition caused by
or arising from the pregnancy itself, or unless the pregnancy is the
result of an act of rape or incest.
SEC. 133. NO GOVERNMENT DISCRIMINATION AGAINST CERTAIN HEALTH CARE
ENTITIES.
(a) Non-Discrimination.--A Federal agency or program, and any State
or local government that receives Federal financial assistance under
this Act or any amendment made by this Act (either directly or
indirectly), may not subject any individual or institutional health
care entity to discrimination on the basis that the health care entity
does not provide, pay for, provide coverage of, or refer for abortions.
(b) Health Care Entity Defined.--For purposes of this section, the
term ``health care entity'' includes an individual physician or other
health care professional, a hospital, a provider-sponsored
organization, a health maintenance organization, a health insurance
plan, or any other kind of health care facility, organization, or plan.
(c) Remedies.--
(1) In general.--The courts of the United States shall have
jurisdiction to prevent and redress actual or threatened
violations of this section by issuing any form of legal or
equitable relief, including--
(A) injunctions prohibiting conduct that violates
this section; and
(B) orders preventing the disbursement of all or a
portion of Federal financial assistance to a State or
local government, or to a specific offending agency or
program of a State or local government, until such time
as the conduct prohibited by this section has ceased.
(2) Commencement of action.--An action under this
subsection may be instituted by--
(A) any health care entity that has standing to
complain of an actual or threatened violation of this
section; or
(B) the Attorney General of the United States.
(d) Administration.--The Secretary of Health and Human Services
shall designate the Director of the Office for Civil Rights of the
Department of Health and Human Services--
(1) to receive complaints alleging a violation of this
section;
(2) subject to paragraph (3), to pursue the investigation
of such complaints in coordination with the Attorney General;
and
(3) in the case of a complaint related to a Federal agency
(other than with respect to the Department of Health and Human
Services) or program administered through such other agency or
any State or local government receiving Federal financial
assistance through such other agency, to refer the complaint to
the appropriate office of such other agency.
SEC. 134. EQUAL EMPLOYER CONTRIBUTION RULE TO PROMOTE CHOICE.
(a) In General.--Section 5000 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(e) Health Care Contribution Election.--
``(1) In general.--Subsection (a) shall not apply in the
case of a group health plan with respect to which the
requirements of paragraphs (2) and (3) are met.
``(2) Contribution election.--The requirement of this
paragraph is met with respect to a group health plan if any
employee of an employer (who but for this paragraph would be
covered by such plan) may elect to have the employer or
employee organization pay an amount which is not less than the
contribution amount to any provider of health insurance
coverage (other than excepted benefits as defined in section
9832(c)) which constitutes medical care of the individual or
individual's spouse or dependents in lieu of such group health
plan coverage otherwise provided or contributed to by the
employer with respect to such employee.
``(3) Pre-existing conditions.--
``(A) In general.--The requirement of this
paragraph is met with respect to health insurance
coverage provided to a participant or beneficiary by
any health insurance issuer if, under such plan the
requirements of section 9801 are met with respect to
the participant or beneficiary.
``(B) Enforcement with respect to individual
election.--For purposes of subparagraph (A), any health
insurance coverage with respect to the participant or
beneficiary shall be treated as health insurance
coverage under a group health plan to which section
9801 applies.
``(4) Contribution amount.--For purposes of this section,
the term `contribution amount' means, with respect to an
individual under a group health plan, the portion of the
applicable premium of such individual under such plan (as
determined under section 4980B(f)(4)) which is not paid by the
individual. In the case that the employer offers more than one
group health plan, the contribution amount shall be the average
amount of the applicable premiums under such plans.
``(5) Group health plan.--For purpose of this subsection,
subsection (d) shall not apply.
``(6) Application to fehbp.--Notwithstanding any other
provision of law, the Office of Personnel Management shall
carry out the health benefits program under chapter 89 of title
5, United States Code, consistent with the requirements of this
subsection.''.
(b) Requirement of Equal Contributions to All FEHBP Plans.--Section
8906 of title 5, United States Code, is amended by adding at the end
the following new subsection:
``(j) Notwithstanding the previous provisions of this section the
Office of Personnel Management shall revise the amount of the
Government contribution made under this section in a manner so that--
``(1) the amount of such contribution does not change based
on the health benefits plan in which the individual is
enrolled; and
``(2) the aggregate amount of such contributions is
estimated to be equal to the aggregate amount of such
contributions if this subsection did not apply.''.
(c) Employee Retirement Income Security Act of 1974 Conforming
Amendments.--
(1) Exception from hipaa requirements for benefits provided
under health care contribution election.--Section 732 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1191a) is amended by adding at the end the following new
subsection:
``(e) Health Care Contribution Election.--
``(1) In general.--The requirements of this part shall not
apply in the case of health insurance coverage (other than
excepted benefits as defined in section 9832(c) of the Internal
Revenue Code of 1986)--
``(A) which is provided to a participant or
beneficiary by a health insurance issuer under a group
health plan, and
``(B) with respect to which the requirements of
paragraphs (2) and (3) are met.
``(2) Contribution election.--The requirement of this
paragraph is met with respect to health insurance coverage
provided to a participant or beneficiary by any health
insurance issuer under a group health plan if, under such
plan--
``(A) the participant may elect such coverage for
any period of coverage in lieu of health insurance
coverage otherwise provided under such plan for such
period, and
``(B) in the case of such an election, the plan
sponsor is required to pay to such issuer for the
elected coverage for such period an amount which is not
less than the contribution amount for such health
insurance coverage otherwise provided under such plan
for such period.
``(3) Pre-existing conditions.--
``(A) In general.--The requirement of this
paragraph is met with respect to health insurance
coverage provided to a participant or beneficiary by
any health insurance issuer if, under such plan the
requirements of section 701 are met with respect to the
participant or beneficiary.
``(B) Enforcement with respect to individual
election.--For purposes of subparagraph (A), any health
insurance coverage with respect to the participant or
beneficiary shall be treated as health insurance
coverage under a group health plan to which section 701
applies.
``(4) Contribution amount.--
``(A) In general.--For purposes of this section,
the term `contribution amount' means, with respect to
any period of health insurance coverage offered to a
participant or beneficiary, the portion of the
applicable premium of such participant or beneficiary
under such plan which is not paid by such participant
or beneficiary. In the case that the employer offers
more than one group health plan, the contribution
amount shall be the average amount of the applicable
premiums under such plans.
``(B) Applicable premium.--For purposes of
subparagraph (A), the term `applicable premium' means,
with respect to any period of health insurance coverage
of a participant or beneficiary under a group health
plan, the cost to the plan for such period of such
coverage for similarly situated beneficiaries (without
regard to whether such cost is paid by the plan sponsor
or the participant or beneficiary).''.
(2) Exemption from fiduciary liability.--Section 404 of
such Act (29 U.S.C. 1104) is amended by adding at the end the
following new subsection:
``(e) The plan sponsor of a group health plan (as defined in
section 733(a)) shall not be treated as breaching any of the
responsibilities, obligations, or duties imposed upon fiduciaries by
this title in the case of any individual who is a participant or
beneficiary under such plan solely because of the extent to which the
plan sponsor provides, in the case of such individual, some or all of
such benefits by means of payment of contribution amounts pursuant to a
contribution election under section 732(e), irrespective of the amount
or type of benefits that would otherwise be provided to such individual
under such plan.''.
(d) Exception From HIPAA Requirements Under IRC for Benefits
Provided Under Health Care Contribution Election.--Section 9831 of the
Internal Revenue Code of 1986 (relating to general exceptions) is
amended by adding at the end the following new subsection:
``(d) Health Care Contribution Election.--
``(1) In general.--The requirements of this chapter shall
not apply in the case of health insurance coverage (other than
excepted benefits as defined in section 9832(c))--
``(A) which is provided to a participant or
beneficiary by a health insurance issuer under a group
health plan, and
``(B) with respect to which the requirements of
paragraphs (2) and (3) are met.
``(2) Contribution election.--The requirement of this
paragraph is met with respect to health insurance coverage
provided to a participant or beneficiary by any health
insurance issuer under a group health plan if, under such
plan--
``(A) the participant may elect such coverage for
any period of coverage in lieu of health insurance
coverage otherwise provided under such plan for such
period, and
``(B) in the case of such an election, the plan
sponsor is required to pay to such issuer for the
elected coverage for such period an amount which is not
less than the contribution amount for such health
insurance coverage otherwise provided under such plan
for such period.
``(3) Pre-existing conditions.--
``(A) In general.--The requirement of this
paragraph is met with respect to health insurance
coverage provided to a participant or beneficiary by
any health insurance issuer if, under such plan the
requirements of section 9801 are met with respect to
the participant or beneficiary.
``(B) Enforcement with respect to individual
election.--For purposes of subparagraph (A), any health
insurance coverage with respect to the participant or
beneficiary shall be treated as health insurance
coverage under a group health plan to which section
9801 applies.
``(4) Contribution amount.--
``(A) In general.--For purposes of this subsection,
the term `contribution amount' means, with respect to
any period of health insurance coverage offered to a
participant or beneficiary, the portion of the
applicable premium of such participant or beneficiary
under such plan which is not paid by such participant
or beneficiary. In the case that the employer offers
more than one group health plan, the contribution
amount shall be the average amount of the applicable
premiums under such plans.
``(B) Applicable premium.--For purposes of
subparagraph (A), the term `applicable premium' means,
with respect to any period of health insurance coverage
of a participant or beneficiary under a group health
plan, the cost to the plan for such period of such
coverage for similarly situated beneficiaries (without
regard to whether such cost is paid by the plan sponsor
or the participant or beneficiary).''.
(e) Exception From HIPAA Requirements Under the PHSA for Benefits
Provided Under Health Care Contribution Election.--Section 2721 of the
Public Health Service Act (42 U.S.C. 300gg-21) is amended--
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following new
subsection:
``(e) Health Care Contribution Election.--
``(1) In general.--The requirements of subparts 1 through 3
shall not apply in the case of health insurance coverage (other
than excepted benefits as defined in section 9832(c) of the
Internal Revenue Code of 1986)--
``(A) which is provided to a participant or
beneficiary by a health insurance issuer under a group
health plan, and
``(B) with respect to which the requirements of
paragraphs (2) and (3) are met.
``(2) Contribution election.--The requirement of this
paragraph is met with respect to health insurance coverage
provided to a participant or beneficiary by any health
insurance issuer under a group health plan if, under such
plan--
``(A) the participant may elect such coverage for
any period of coverage in lieu of health insurance
coverage otherwise provided under such plan for such
period, and
``(B) in the case of such an election, the plan
sponsor is required to pay to such issuer for the
elected coverage for such period an amount which is not
less than the contribution amount for such health
insurance coverage otherwise provided under such plan
for such period.
``(3) Pre-existing conditions.--
``(A) In general.--The requirement of this
paragraph is met with respect to health insurance
coverage provided to a participant or beneficiary by
any health insurance issuer if, under such plan the
requirements of section 2701 are met with respect to
the participant or beneficiary.
``(B) Enforcement with respect to individual
election.--For purposes of subparagraph (A), any health
insurance coverage with respect to the participant or
beneficiary shall be treated as health insurance
coverage under a group health plan to which section
2701 applies.
``(4) Contribution amount.--
``(A) In general.--For purposes of this section,
the term `contribution amount' means, with respect to
any period of health insurance coverage offered to a
participant or beneficiary, the portion of the
applicable premium of such participant or beneficiary
under such plan which is not paid by such participant
or beneficiary. In the case that the employer offers
more than one group health plan, the contribution
amount shall be the average amount of the applicable
premiums under such plans.
``(B) Applicable premium.--For purposes of
subparagraph (A), the term `applicable premium' means,
with respect to any period of health insurance coverage
of a participant or beneficiary under a group health
plan, the cost to the plan for such period of such
coverage for similarly situated beneficiaries (without
regard to whether such cost is paid by the plan sponsor
or the participant or beneficiary).''.
SEC. 135. LIMITATIONS ON STATE RESTRICTIONS ON EMPLOYER AUTO-
ENROLLMENT.
(a) In General.--No State shall establish a law that prevents an
employer that is allowed an exclusion from gross income, a deduction,
or a credit for Federal income tax purposes for health benefits
furnished to a participant or beneficiary from instituting auto-
enrollment which meets the requirements of subsection (b) for coverage
of a participant or beneficiary under a group health plan, or health
insurance coverage offered in connection with such a plan, so long as
the participant or beneficiary has the option of declining such
coverage.
(b) Automatic Enrollment for Employer-Sponsored Health Benefits.--
(1) In general.--The requirement of this subsection with
respect to an employer and an employee is that the employer
automatically enroll such employee into the employment-based
health benefits plan for individual coverage under the plan
option with the lowest applicable employee premium.
(2) Opt-out.--In no case may an employer automatically
enroll an employee in a plan under paragraph (1) if such
employee makes an affirmative election to opt-out of such plan
or to elect coverage under an employment-based health benefits
plan offered by such employer. An employer shall provide an
employee with a 30-day period to make such an affirmative
election before the employer may automatically enroll the
employee in such a plan.
(3) Notice requirements.--
(A) In general.--Each employer described in
paragraph (1) who automatically enrolls an employee
into a plan as described in such paragraph shall
provide the employees, within a reasonable period
before the beginning of each plan year (or, in the case
of new employees, within a reasonable period before the
end of the enrollment period for such a new employee),
written notice of the employees' rights and obligations
relating to the automatic enrollment requirement under
such paragraph. Such notice must be comprehensive and
understood by the average employee to whom the
automatic enrollment requirement applies.
(B) Inclusion of specific information.--The written
notice under subparagraph (A) must explain an
employee's right to opt out of being automatically
enrolled in a plan and in the case that more than one
level of benefits or employee premium level is offered
by the employer involved, the notice must explain which
level of benefits and employee premium level the
employee will be automatically enrolled in the absence
of an affirmative election by the employee.
(c) Construction.--Nothing in this section shall be construed to
supersede State law which establishes, implements, or continues in
effect any standard or requirement relating to employers in connection
with payroll or the sponsoring of employer-sponsored health insurance
coverage except to the extent that such standard or requirement
prevents an employer from instituting the auto-enrollment described in
subsection (a).
(d) Non-Application to Excepted Benefits.--For purposes of this
section, the term ``group health plan'' does not include excepted
benefits (as defined in section 2781(c) of the Public Health Service
Act (42 U.S.C. 300gg-91(c))).
SEC. 136. CREDIT FOR SMALL EMPLOYERS ADOPTING AUTO-ENROLLMENT AND
DEFINED CONTRIBUTION OPTIONS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986, as amended by section 2, is
amended by adding at the end the following new section:
``SEC. 45R. AUTO-ENROLLMENT AND DEFINED CONTRIBUTION OPTION FOR HEALTH
BENEFITS PLANS OF SMALL EMPLOYERS.
``(a) In General.--For purposes of section 38, in the case of a
small employer, the health benefits plan implementation credit
determined under this section for the taxable year is an amount equal
to 100 percent of the amount paid or incurred by the taxpayer during
the taxable year for qualified health benefits expenses.
``(b) Limitation.--The credit determined under subsection (a) with
respect to any taxpayer for any taxable year shall not exceed the
excess of--
``(1) $1,500, over
``(2) sum of the credits determined under subsection (a)
with respect to such taxpayer for all preceding taxable years.
``(c) Qualified Health Benefits Expenses.--For purposes of this
section, the term `qualified health benefits auto-enrollment expenses'
means, with respect to any taxable year, amounts paid or incurred by
the taxpayer during such taxable year for--
``(1) establishing auto-enrollment which meets the
requirements of section 107 of the Empowering Patients First
Act of 2013 for coverage of a participant or beneficiary under
a group health plan, or health insurance coverage offered in
connection with such a plan, and
``(2) implementing the employer contribution option for
health insurance coverage pursuant to section 5000(e)(2).
``(d) Qualified Small Employer.--For purposes of this section, the
term `qualified small employer' means any employer for any taxable year
if the number of employees employed by such employer during such
taxable year does not exceed 50. All employers treated as a single
employer under section (a) or (b) of section 52 shall be treated as a
single employer for purposes of this section.
``(e) No Double Benefit.--No deduction or credit shall be allowed
under any other provision of this chapter with respect to the amount of
the credit determined under this section.
``(f) Termination.--Subsection (a) shall not apply to any taxable
year beginning after the date which is 2 years after the date of the
enactment of this section.''.
(b) Credit To Be Part of General Business Credit.--Subsection (b)
of section 38 of such Code, as amended by section 2, is amended by
striking ``plus'' at the end of paragraph (34), by striking the period
at the end of paragraph (35) and inserting ``, plus'', and by adding at
the end the following new paragraph:
``(36) in the case of a small employer (as defined in
section 45R(d)), the health benefits plan implementation credit
determined under section 45R(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code, as amended by
section 2, is amended by inserting after the item relating to section
45Q the following new item:
``Sec. 45R. Auto-enrollment and defined contribution option for health
benefits plans of small employers.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
TITLE II--HEALTH CARE ACCESS AND AVAILABILITY
Subtitle A--Health Insurance Pooling Mechanisms for Individuals
SEC. 201. FEDERAL GRANTS FOR STATE INSURANCE EXPENDITURES.
(a) In General.--Subject to the succeeding provisions of this
section, each State shall receive from the Secretary of Health and
Human Services (in this subtitle referred to as the ``Secretary'') a
grant for the State's providing for the use, in connection with
providing health benefits coverage, of a qualifying high-risk pool or a
reinsurance pool or other risk-adjustment mechanism used for the
purpose of subsidizing the purchase of private health insurance.
(b) Funding Amount.--
(1) In general.--There are hereby appropriated, out of any
funds in the Treasury not otherwise appropriated,
$1,000,000,000 for each of fiscal years 2016, 2017, and 2018
for grants under this section. Such amount shall be divided
among the States as determined by the Secretary.
(2) Construction.--Nothing in this section shall be
construed as preventing a State from using funding under
section 2745 of the Public Health Service Act for purposes of
funding reinsurance or other risk mechanisms.
(c) Limitation.--Funding under subsection (a) may only be used for
the following:
(1) Qualifying high-risk pools.--
(A) Current pools.--A qualifying high-risk pool
created before the date of the enactment of this Act
that only covers high-risk populations and individuals
(and their spouse and dependents) receiving a health
care tax credit under section 35 of the Internal
Revenue Code of 1986 for a limited period of time as
determined by the Secretary or under section 2741 of
Public Health Service Act.
(B) New pools.--A qualifying high-risk pool created
on or after such date that only covers populations and
individuals described in subparagraph (A) if the pool--
(i) offers at least the option of one or
more high-deductible plan options, in
combination with a contribution into a health
savings account;
(ii) offers multiple competing health plan
options; and
(iii) covers only high-risk populations.
(2) Risk insurance pool or other risk-adjustment
mechanisms.--
(A) Current reinsurance.--A reinsurance pool, or
other risk-adjustment mechanism, created before the
date of the enactment of this Act that only covers
populations and individuals described in paragraph
(1)(A).
(B) New pools.--A reinsurance pool or other risk-
adjustment mechanism created on or after such date that
provides reinsurance only covers populations and
individuals described in paragraph (1)(A) and only on a
prospective basis under which a health insurance issuer
cedes covered lives to the pool in exchange for payment
of a reinsurance premium.
(3) Transition.--Nothing in this section shall be construed
as preventing a State from using funds available to transition
from an existing high-risk pool to a reinsurance pool.
(d) Bonus Payments.--With respect to any amounts made available to
the States under this section, the Secretary shall set aside a portion
of such amounts that shall only be available for the following
activities by such States:
(1) Providing guaranteed availability of individual health
insurance coverage to certain individuals with prior group
coverage under part B of title XXVII of the Public Health
Service Act.
(2) A reduction in premium trends, actual premiums, or
other cost-sharing requirements.
(3) An expansion or broadening of the pool of high-risk
individuals eligible for coverage.
(4) States that adopt the Model Health Plan for Uninsurable
Individuals Act of the National Association of Insurance
Commissioners (if and when updated by such Association).
The Secretary may request such Association to update such Model Health
Plan as needed by 2015.
(e) Requirements for Receipt of Bonus Payments.--The requirements
of this subsection, for the availability of bonus payments to a State
under subsection (d), are as follows, in the case of an individual who
is covered under a high-risk pool or other pool or mechanism described
in subsection (b) operating in the State for which funds under this
section may be applied:
(1) Limitation on annual premiums for each individual based
on adjusted gross family income.--The premiums imposed for
coverage of each individual under health insurance coverage
offered through such pool or mechanism may not exceed (on an
annual basis) the following:
(A) If the adjusted gross income (as defined in
section 62 of the Internal Revenue Code of 1986) of all
individuals in the individual's family does not exceed
the poverty line (as defined in section 673(2) of the
Community Services Block Grant Act (42 U.S.C. 9902(2)),
including any revision required by such section)
applicable to a family of the size involved, 2 percent
of such income.
(B) If such adjusted gross income for all
individuals in the individual's family exceeds such
applicable poverty line, the sum of--
(i) 2 percent of such applicable poverty
line; and
(ii) 10 percent of the amount of such
income that exceeds such applicable poverty
line.
(2) Limitation on annual out-of-pocket costs for each
individual.--There shall be a limit on the annual out-of-pocket
expenditures (including annual premiums) for each individual
for coverage under such pool or mechanism equal to twice the
maximum allowable premiums for such individual permitted under
paragraph (1).
(f) Administration.--The Secretary shall provide for the
administration of this section and may establish such terms and
conditions, including the requirement of an application, as may be
appropriate to carry out this section.
(g) Construction.--Nothing in this section shall be construed as
requiring a State to operate a reinsurance pool (or other risk-
adjustment mechanism) under this section or as preventing a State from
operating such a pool or mechanism through one or more private
entities.
(h) Definitions.--In this section:
(1) Qualifying high-risk pool.--The term ``qualifying high-
risk pool'' means any qualified high-risk pool (as defined in
subsection (g)(1)(A) of section 2745 of the Public Health
Service Act) that meets the conditions to receive a grant under
section (b)(1) of such section.
(2) Reinsurance pool or other risk-adjustment mechanism
defined.--The term ``reinsurance pool or other risk-adjustment
mechanism'' means any State-based risk spreading mechanism to
subsidize the purchase of private health insurance for the
high-risk population.
(3) High-risk population.--The term ``high-risk
population'' means--
(A) individuals who, by reason of the existence or
history of a medical condition, are able to acquire
health coverage only at rates which are at least 150
percent of the standard risk rates for such coverage
(in a non-community-rated non-guaranteed issue State),
and
(B) individuals who are provided health coverage by
a high-risk pool.
(4) State defined.--The term ``State'' includes the
District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, and the Northern Mariana Islands.
(i) Extending Funding.--Section 2745(d)(2) of the Public Health
Service Act (42 U.S.C. 300gg-45(d)(2)) is amended--
(1) in the heading, by inserting ``and 2016 through 2018''
after ``2010''; and
(2) by inserting ``and for each of fiscal years 2016
through 2018'' after ``for each of fiscal years 2007 through
2010''.
(j) Sunset.--Funds made available under this section shall not be
used for the purpose of subsidizing the purchase of private health
insurance on or after October 1, 2018.
SEC. 202. POOL REFORM FOR INDIVIDUAL MEMBERSHIP EXPANSION.
The Public Health Service Act, as amended by section 2, is further
amended by inserting after title XXX the following new title:
``TITLE XXXI--POOL REFORM FOR INDIVIDUAL MEMBERSHIP EXPANSION
``SEC. 3100. PURPOSE.
``The purpose of this title is to provide, through the
establishment of independent health pools (or IHPs), for the reform of,
and expansion of enrollment in, health insurance coverage for
individuals and small employers.
``SEC. 3101. DEFINITION OF INDEPENDENT HEALTH POOL (IHP).
``(a) In General.--For purposes of this title, the terms
`individual health pool' and `IHP' mean a legal nonprofit entity that
meets the following requirements:
``(1) Organization.--The IHP--
``(A) has been formed and maintained in good faith
for a purpose that includes the formation of a risk
pool in order to offer health insurance coverage to its
members;
``(B) does not condition membership in the IHP on
any health status-related factor relating to an
individual (including an employee of an employer or a
dependent of an employee);
``(C) does not make health insurance coverage
offered through the IHP available other than in
connection with a member of the IHP;
``(D) is not a health insurance issuer; and
``(E) does not receive any consideration directly
or indirectly from any health insurance issuer in
connection with the enrollment of any individuals, or
employees of employers, in any health insurance
coverage, except in conjunction with services offered
through the IHP.
``(2) Offering health benefits coverage.--
``(A) Different groups.--The IHP, in conjunction
with those health insurance issuers that offer health
benefits coverage through the IHP, makes available
health benefits coverage in the manner described in
subsection (b) to all members of the IHP and the
dependents of such members (and, in the case of small
employers, employees and their dependents) in the
manner described in subsection (c)(2) at rates that are
established by the health insurance issuer on a policy
or product specific basis and that may vary for
individuals covered through an IHP.
``(B) Nondiscrimination in coverage offered.--
``(i) In general.--Subject to clause (ii),
the IHP may not offer health benefits coverage
to a member of an IHP unless the same coverage
is offered to all such members of the IHP.
``(ii) Construction.--Nothing in this title
shall be construed as requiring or permitting a
health insurance issuer to provide coverage
outside the service area of the issuer, as
approved under State law, or preventing a
health insurance issuer from underwriting or
from excluding or limiting the coverage on any
individual, subject to the requirement of
section 2741 (relating to guaranteed
availability of individual health insurance
coverage to certain individuals with prior
group coverage).
``(C) No assumption of insurance risk by ihp.--The
IHP provides health benefits coverage only through
contracts with health insurance issuers and does not
assume insurance risk with respect to such coverage.
``(3) Geographic areas.--Nothing in this title shall be
construed as preventing the establishment and operation of more
than one IHP in a geographic area or as limiting the number of
IHPs that may operate in any area.
``(4) Provision of administrative services to purchasers.--
The IHP may provide administrative services for members. Such
services may include accounting, billing, and enrollment
information.
``(b) Health Benefits Coverage Requirements.--
``(1) Compliance with consumer protection requirements.--
Except as provided in section 3102, any health benefits
coverage offered through an IHP--
``(A) shall be issued by a health insurance issuer
that meets all applicable State standards relating to
consumer protection;
``(B) shall be approved or otherwise permitted to
be offered under State law; and
``(C) may not impose any exclusion of a specific
disease from such coverage.
``(2) Wellness bonuses for health promotion.--Nothing in
this title shall be construed as precluding a health insurance
issuer offering health benefits coverage through an IHP from
establishing premium discounts or rebates for members or from
modifying otherwise applicable copayments or deductibles in
return for adherence to programs of health promotion and
disease prevention so long as such programs are agreed to in
advance by the IHP and comply with all other provisions of this
title and do not discriminate among similarly situated members.
``(c) Members; Health Insurance Issuers.--
``(1) Members.--
``(A) In general.--Under rules established to carry
out this title, with respect to an individual or small
employer who is a member of an IHP, the individual may
enroll for health benefits coverage (including coverage
for dependents of such individual) or employer may
enroll employees for health benefits coverage
(including coverage for dependents of such employees)
offered by a health insurance issuer through the IHP.
``(B) Rules for enrollment.--Nothing in this
paragraph shall preclude an IHP from establishing rules
of enrollment and reenrollment of members. Such rules
shall be applied consistently to all members within the
IHP and shall not be based in any manner on health
status-related factors.
``(2) Health insurance issuers.--The contract between an
IHP and a health insurance issuer shall provide, with respect
to a member enrolled with health benefits coverage offered by
the issuer through the IHP, for the payment to the issuer of
the premiums (if any) collected by the IHP for health insurance
coverage offered by the issuer.
``SEC. 3102. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.
``(a) Preemption of State Laws Restricting Formation of IHPs.--Any
State law or regulation relating to the composition or organization of
an IHP is preempted to the extent the law or regulation is inconsistent
with the provisions of this title.
``(b) Preemption of State Requirements Relating to Health Benefit
Coverage.--
``(1) Benefit requirements.--
``(A) In general.--Subject to subparagraph (B),
State laws are superseded, and shall not apply to
health benefits coverage made available through an IHP,
insofar as such laws impose benefit requirements for
such coverage, including (but not limited to)
requirements relating to coverage of specific
providers, specific services or conditions, or the
amount, duration, or scope of benefits.
``(B) Exception for federally imposed requirements
and for requirements prohibiting disease-specific
exclusions.--Subparagraph (A) shall not apply to a
requirement to the extent the requirement--
``(i) implements title XXVII or other
Federal law; or
``(ii) prohibits imposition of an exclusion
of a specific disease from health benefits
coverage.
``(2) Other requirements preventing offering of coverage
through an ihp.--State laws are superseded, and shall not apply
to health benefits coverage made available through an IHP,
insofar as such laws impose any other requirements (including
limitations on compensation arrangements) that, directly or
indirectly, preclude (or have the effect of precluding) the
offering of such coverage through an IHP, if the IHP meets the
requirements of this title.
``(c) Preemption of State Premium Rating Requirements.--State laws
are superseded, and shall not apply to the premiums imposed for health
benefits coverage made available through an IHP, insofar as such laws
impose restrictions on the variation of premiums among such coverage
offered to members of the IHP.
``SEC. 3103. DEFINITIONS.
``For purposes of this title:
``(1) Dependent.--The term `dependent', as applied to
health insurance coverage offered by a health insurance issuer
licensed (or otherwise regulated) in a State, shall have the
meaning applied to such term with respect to such coverage
under the laws of the State relating to such coverage and such
an issuer. Such term may include the spouse and children of the
individual involved.
``(2) Health benefits coverage.--The term `health benefits
coverage' has the meaning given the term health insurance
coverage in section 2791(b)(1), and does not include excepted
benefits (as defined in section 2791(c)).
``(3) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section 2791(b)(2).
``(4) Health status-related factor.--The term `health
status-related factor' has the meaning given such term in
section 2791(d)(9).
``(5) Member.--The term `member' means, with respect to an
IHP, an individual or small employer who is a member of the
legal entity described in section 3101(a)(1) to which the IHP
is offering coverage.
``(6) Small employer.--The term `small employer' has the
meaning given such term in section 712(c)(1)(B) of the Employee
Retirement and Income Security Act of 1974.''.
Subtitle B--Small Business Health Fairness
SEC. 211. SHORT TITLE.
This subtitle may be cited as the ``Small Business Health Fairness
Act of 2015''.
SEC. 212. RULES GOVERNING ASSOCIATION HEALTH PLANS.
(a) In General.--Subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended 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) described 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 association, a bona fide industry association
(including a rural electric cooperative association or a rural
telephone cooperative association), a bona fide professional
association, or a bona fide chamber of commerce (or similar
bona fide business association, including 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 requires 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 members), 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 subsection.
``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
``(a) In General.--The applicable authority shall prescribe by
regulation a procedure under which, subject to subsection (b), the
applicable authority shall certify association 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 applicable authority shall certify such plan as meeting
the requirements 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 applicable 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 Certification.--The applicable
authority may provide by regulation for continued certification of
association health plans under this part.
``(e) Class Certification for Fully Insured Plans.--The applicable
authority shall establish a class certification procedure for
association health plans under which all benefits consist of health
insurance coverage. Under such procedure, the applicable authority
shall provide 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 connection with plans in such class and
payment of the prescribed 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 the Small Business Health Fairness Act of 2015,
``(2) a plan under which the sponsor does not restrict
membership to one or more trades and businesses 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 employers
represent one or more trades or businesses, or one or more
industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and
cosmetology; certified public accounting practices; child care;
construction; dance, theatrical and orchestra productions;
disinfecting and pest control; financial services; fishing;
food service establishments; hospitals; labor organizations;
logging; manufacturing (metals); mining; medical and dental
practices; medical laboratories; professional consulting
services; sanitary services; transportation (local and
freight); warehousing; wholesaling/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, proposed premium rate levels, or other means
demonstrated by such plan in accordance with regulations.
``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met with
respect to an association health plan if the sponsor has met (or is
deemed under this part to have met) the requirements of section 801(b)
for a continuous period of not less than 3 years ending with the date
of the application for certification under this part.
``(b) Board of Trustees.--The requirements of this subsection are
met with respect to an association health plan if the following
requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees 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 contractors.--
``(A) Board membership.--
``(i) In general.--Except as provided in
clauses (ii) and (iii), the members of the
board of trustees are individuals selected from
individuals who are the owners, officers,
directors, or employees of the participating
employers or who are partners in the
participating employers and actively
participate in the business.
``(ii) Limitation.--
``(I) General rule.--Except as
provided in subclauses (II) and (III),
no such member is an owner, officer,
director, or employee of, or partner
in, a contract administrator or other
service provider to the plan.
``(II) Limited exception for
providers of services solely on behalf
of the sponsor.--Officers or employees
of a sponsor which is a service
provider (other than a contract
administrator) to the plan may be
members of the board if they constitute
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 providers of
medical care.--In the case of a sponsor
which is an association whose
membership consists primarily of
providers of medical care, subclause
(I) shall not apply in the case of any
service provider described in subclause
(I) who is a provider of medical care
under the plan.
``(iii) Certain plans excluded.--Clause (i)
shall not apply to an association health plan
which is in existence on the date of the
enactment of the Small Business Health Fairness
Act of 2015.
``(B) Sole authority.--The board has sole authority
under the plan to approve applications for
participation in the plan and to contract 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 consisting of its franchisees--
``(1) the requirements of subsection (a) and section 801(a)
shall be deemed met if such requirements 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 association
described in section 801(b), and each franchisee were deemed to
be a member (of the association and the sponsor) referred to in
section 801(b); and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
The Secretary may by regulation define for purposes of this subsection
the terms `franchiser', `franchise network', and `franchisee'.
``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(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 subsection (b) are
met,
except that, in the case of a sponsor which is a professional
association or other individual-based association, if at least
one of the officers, directors, or employees of an employer, or
at least one of the individuals who are partners in an employer
and who actively participates in the business, is a member or
such an affiliated member of the sponsor, participating
employers may also include such employer; and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-
employed individuals), officers, directors, or
employees of, or partners in, participating employers;
or
``(B) the beneficiaries of individuals described in
subparagraph (A).
``(b) Coverage of Previously Uninsured Employees.--In the case of
an association health plan in existence on the date of the enactment of
the Small Business Health Fairness Act of 2015, an affiliated member of
the sponsor of the plan may be offered 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 employees who would otherwise be eligible to
participate in such association health plan.
``(c) Individual Market Unaffected.--The requirements 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 coverage 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 Participate.--The requirements of this subsection are met
with respect to an association health plan if--
``(1) under the terms of the plan, all employers meeting
the preceding requirements of this section are eligible to
qualify as participating employers for all geographically
available coverage options, unless, in the case of any such
employer, participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service
Act are not met;
``(2) upon request, any employer eligible to participate is
furnished information regarding all coverage 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 instruments.--The instruments
governing the plan include a written instrument, meeting the
requirements 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 capacity 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 section
3(16)(B)); and
``(C) incorporates the requirements of section 806.
``(2) Contribution rates must be nondiscriminatory.--
``(A) The contribution rates for any participating
small employer do not vary on the basis of any health
status-related factor in relation 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
employer is engaged.
``(B) Nothing in this title or any other provision
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 insurance 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 individuals 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
participants 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 employers coverage which does
not consist of health insurance coverage in a manner
comparable to the manner in which such agents are used
to distribute health insurance coverage.
``(B) State-licensed insurance agents.--For
purposes of subparagraph (A), the term `State-licensed
insurance agents' means one or more agents who are
licensed in a State and are subject to the laws of such
State relating to licensure, qualification, testing,
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 determines are necessary to carry out
the purposes of this part, which shall be prescribed by the
applicable authority 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 defined 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
section 711, 712, or 713, or (2) any law of the State with which filing
and approval of a policy type offered by the plan was initially
obtained to the extent that such law prohibits an exclusion of a
specific disease from such coverage.
``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 coverage, the plan--
``(A) establishes and maintains reserves with
respect to such additional benefit options, in amounts
recommended by the qualified health actuary, consisting
of--
``(i) a reserve sufficient for unearned
contributions;
``(ii) a reserve sufficient for benefit
liabilities which have been incurred, which
have not been satisfied, and for which risk of
loss has not yet been transferred, and for
expected administrative costs with respect 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 solvency
indemnification, with respect to such additional
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 specified circumstances in which
the plan specifically provides for and
maintains reserves in excess of the amounts
required under subparagraph (A).
``(ii) The plan shall secure specific
excess/stop loss insurance for the plan with an
attachment point which is at least equal to an
amount recommended by the plan's qualified
health actuary. The applicable authority may by
regulation provide for adjustments in the
amount of such insurance in specified
circumstances in which the plan specifically
provides for and maintains reserves in excess
of the amounts required under subparagraph (A).
``(iii) The plan shall secure
indemnification 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 Secretary of any failure
of premium payment meriting cancellation of the policy prior to
undertaking such a cancellation. Any regulations prescribed by the
applicable authority 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 health actuary may recommend, taking
into account the specific circumstances of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--In the case
of any association health plan described in subsection (a)(2), the
requirements of this subsection are met if the plan establishes and
maintains surplus 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 prescribed by the applicable
authority, considering the level of aggregate and specific
excess/stop loss insurance 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 available 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 requirements 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 Insurance.--The applicable
authority may provide for adjustments 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
arrangement, or other financial arrangement as the applicable 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 participants and beneficiaries than the
requirements for which it is substituted. The applicable authority may
take into account, for purposes of this subsection, evidence provided
by the plan or sponsor which demonstrates an assumption of liability
with respect to the plan. Such evidence 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
arrangement.
``(f) Measures To Ensure Continued Payment of Benefits by Certain
Plans in Distress.--
``(1) Payments by certain plans to association health plan
fund.--
``(A) In general.--In the case of an association
health plan described in subsection (a)(2), the
requirements of this subsection are met if the plan
makes payments into the Association Health Plan Fund
under this subparagraph when they are due. Such
payments shall consist of annual payments in the amount
of $5,000, and, in addition to such annual payments,
such supplemental payments as the Secretary 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.
Payments shall continue to accrue until a plan's assets
are distributed pursuant to a termination procedure.
``(B) Penalties for failure to make payments.--If
any payment is not made by a plan when it is due, a
late payment charge of not more than 100 percent of the
payment which was not timely paid shall be payable by
the plan to the Fund.
``(C) Continued duty of the secretary.--The
Secretary shall not cease to carry out the provisions
of paragraph (2) on account of the failure of a plan to
pay any payment when due.
``(2) Payments by secretary to continue excess/stop loss
insurance coverage and indemnification insurance coverage for
certain 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 described 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,
certifies such determination to the Secretary), the Secretary
shall determine the amounts necessary to make payments to an
insurer (designated by the Secretary) to maintain in force
excess/stop loss insurance coverage or indemnification
insurance coverage for such plan, if the Secretary determines
that there is a reasonable expectation that, without such
payments, claims would not be satisfied by reason of
termination of such coverage. The Secretary shall, to the
extent provided in advance in appropriation Acts, pay such
amounts so determined to the insurer designated by the
Secretary.
``(3) Association health plan fund.--
``(A) In general.--There is established on the
books of the Treasury a fund to be known as the
`Association Health Plan Fund'. The Fund shall be
available for making payments pursuant to paragraph
(2). The Fund shall be credited with payments received
pursuant to paragraph (1)(A), penalties received
pursuant to paragraph (1)(B), and earnings on
investments of amounts of the Fund under subparagraph
(B).
``(B) Investment.--Whenever the Secretary
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 Secretary 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 insurance.--The term
`aggregate excess/stop loss insurance' 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 payment 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 premiums by any
third party on behalf of the insured plan.
``(2) Specific excess/stop loss insurance.--The term
`specific excess/stop loss insurance' 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 payment to the plan with
respect to claims under the plan in connection with a
covered individual in excess of an amount or amounts
specified in such contract in connection with such
covered individual;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any
third party on behalf of the insured 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 minimum
standards as the applicable authority may prescribe 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 applicable 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 standards under part 4 and such additional
requirements regarding liquidity as the applicable authority may
prescribe by regulation.
``(j) Solvency Standards Working Group.--
``(1) In general.--Within 90 days after the date of the
enactment of the Small Business Health Fairness Act of 2015,
the applicable authority 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 Association
of Insurance Commissioners.
``(B) A representative of the American Academy of
Actuaries.
``(C) A representative of the State governments, or
their interests.
``(D) A representative of existing self-insured
arrangements, or their interests.
``(E) A representative of associations of the type
referred to in section 801(b)(1), or their interests.
``(F) A representative of multiemployer plans that
are group health plans, or their interests.
``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED 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
appropriation Acts, for the sole purpose of administering the
certification procedures applicable with respect to association health
plans.
``(b) Information To Be Included in Application for
Certification.--An application for certification under this part meets
the requirements of this section only if it includes, in a manner and
form which shall be prescribed by the applicable authority by
regulation, at least the following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor; and
``(B) the members of the board of trustees of the
plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be located
in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents 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 providers.--A copy of any
agreements between the plan and contract administrators and
other service providers.
``(6) Funding report.--In the case of association health
plans providing benefits options in addition to health
insurance coverage, a report setting forth information with
respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the
application, 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 health
actuary, that all applicable requirements of section
806 are or will be met in accordance with regulations
which the applicable authority shall prescribe.
``(B) Adequacy of contribution rates.--A statement
of actuarial opinion, signed by a qualified health
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
required 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 actuarial opinion signed
by a qualified health 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 period referred to in subparagraph (B). The
income statement shall identify separately the plan's
administrative expenses and claims.
``(D) Costs of coverage to be charged and other
expenses.--A statement of the costs of coverage to be
charged, including an itemization of amounts for
administration, reserves, and other expenses associated
with the operation of the plan.
``(E) Other information.--Any other information as
may be determined by the applicable authority, by
regulation, as necessary to carry out the purposes of
this part.
``(c) Filing Notice of Certification With States.--A certification
granted under this part to an association health plan shall not be
effective unless written notice of such certification is filed with the
applicable State authority of each State in which at least 25 percent
of the participants and beneficiaries under the plan are located. For
purposes of this subsection, an individual shall be considered to be
located in the State in which a known address of such individual is
located or in which such individual is employed.
``(d) Notice of Material Changes.--In the case of any association
health plan certified under this part, descriptions of material changes
in any information which 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 authority
by regulation. The applicable authority may require 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 Association 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 information
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 applicable authority may require by regulation such
interim reports as it considers appropriate.
``(f) Engagement of Qualified Health 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
health actuary who shall be responsible for the preparation of the
materials comprising information necessary to be submitted by a
qualified health actuary under this part. The qualified health actuary
shall utilize such assumptions and techniques as are necessary 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 expectations; and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified health actuary shall be made with respect
to, and shall be made a part of, the annual report.
``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
``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 accruals 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 beneficiaries a
written notice of intent to terminate stating that such
termination is intended and the proposed 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 applicable
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 TERMINATION.
``(a) Actions To Avoid Depletion of Reserves.--An association
health plan which is certified under this part and which provides
benefits other than health insurance coverage shall continue to meet
the requirements of section 806, irrespective of whether such
certification continues in effect. The board of trustees of such plan
shall determine quarterly whether the requirements 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 health
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
compliance with section 806. Not later than 30 days after receiving
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 specify to the board, regarding corrective
action taken by the board until the requirements of section 806 are
met.
``(b) Mandatory Termination.--In any case in which--
``(1) the applicable authority has been notified under
subsection (a) (or by an issuer of excess/stop loss insurance
or indemnity insurance pursuant to section 806(a)) of a failure
of an association health plan which is or has been certified
under this part and is described in section 806(a)(2) to meet
the requirements of section 806 and has not been notified by
the board of trustees of the plan that corrective action has
restored compliance with such requirements; 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 applicable authority may require,
including satisfying any claims referred to in section
806(a)(2)(B)(iii) and recovering for the plan any liability under
subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure
that the affairs of the plan will be, to the maximum extent possible,
wound up in a manner which will result in timely provision of all
benefits for which the plan is obligated.
``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION
HEALTH PLANS PROVIDING 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 certified 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 Secretary 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 trusteeship is necessary to protect the
interests of the participants and beneficiaries or providers of medical
care or to avoid any unreasonable deterioration of the financial
condition of the plan. The trusteeship of such Secretary shall continue
until the conditions described in the first sentence of this subsection
are remedied or the plan is terminated.
``(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 Secretary 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 administrator, any
participating employer, and any employee organization
representing plan participants to furnish 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 trusteeship;
``(6) to commence, prosecute, or defend on behalf of the
plan any suit or proceeding involving the plan;
``(7) to issue, publish, or file such notices, statements,
and reports as may be required by the Secretary 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 participants
and beneficiaries under appropriate coverage options; and
``(10) to do such other acts as may be necessary to comply
with this title or any order of the court and to protect the
interests of plan participants and beneficiaries and providers
of medical care.
``(c) Notice of Appointment.--As soon as practicable after the
Secretary's appointment as trustee, the Secretary shall give notice of
such appointment to--
``(1) the sponsor and plan administrator;
``(2) each participant;
``(3) each participating employer; and
``(4) if applicable, each employee organization which, for
purposes of collective bargaining, represents plan
participants.
``(d) Additional Duties.--Except to the extent inconsistent with
the provisions of this title, or as may be otherwise ordered by the
court, the Secretary, upon appointment 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 notwithstanding the pendency in the same
or any other court of any bankruptcy, mortgage foreclosure, or equity
receivership 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 application 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 located with the powers, to the extent
consistent with the purposes of this section, of a court of the
United States having jurisdiction over cases under chapter 11
of title 11, United States Code. Pending an adjudication 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 sponsor, and any
other suit against any receiver, conservator, or trustee of the
plan, the sponsor, or property of the plan or sponsor. Pending
such adjudication and upon the appointment by it of the
Secretary as trustee, the court may stay any proceeding to
enforce a lien against property of the plan or the sponsor or
any other suit against the plan or the sponsor.
``(2) Venue.--An action under this section may be brought
in the judicial district where the sponsor or the plan
administrator resides or does business or where any asset of
the plan is situated. A district court in which such action is
brought may issue process with respect to such action in any
other judicial district.
``(g) Personnel.--In accordance with regulations which shall be
prescribed by the Secretary, the Secretary shall appoint, retain, and
compensate accountants, actuaries, 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 association health plan described in
section 806(a)(2), if the plan commenced operations in such State after
the date of the enactment of the Small Business Health Fairness Act of
2015.
``(b) Contribution Tax.--For purposes of this section, 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 respect 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 maintenance 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 assessment otherwise
imposed by the State on premiums, contributions, or both
received by insurers or health maintenance organizations for
health insurance 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 provided by such insurers or health
maintenance organizations 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 section).
``(2) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(5) Applicable authority.--The term `applicable
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
connection with a group health plan that has
fewer than 2 participants as current employees
or participants described in section 732(d)(3)
on the first day of the plan year.
``(ii) State exception.--Clause (i) shall
not apply in the case of health insurance
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 individual who is an employee of such
employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(9) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or official
or officials designated 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 health actuary.--The term `qualified
health actuary' means an individual who is a member of the
American Academy of Actuaries with expertise in health care.
``(11) Affiliated member.--The term `affiliated 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 members 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 the Small
Business Health Fairness Act of 2015, a person eligible
to be a member of the sponsor or one of its member
associations.
``(12) Large employer.--The term `large employer' 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 employer' 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 purposes of determining
whether a plan, fund, or program 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
program 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 partnership; and
``(B) in the case of a self-employed individual,
the term `employer' (as defined in section 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 established or is maintained for the purpose
of providing medical care (through the purchase of insurance or
otherwise) for employees (or their dependents) covered
thereunder and which demonstrates to the Secretary 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
program shall be treated for purposes of this title as an
employee welfare benefit plan on and after the date of such
demonstration.
``(3) Exception for certain benefits.--The requirements of
this part shall not apply to a group health plan in relation to
its provision of excepted benefits, as defined in section
706(c).''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not apply
with respect to any State law in the case of an association health plan
which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection
(a)'' and inserting ``Subsections (a) and (d)'';
(B) in subsection (b)(5), by striking ``subsection
(a)'' in subparagraph (A) and inserting ``subsection
(a) of this section and subsections (a)(2)(B) and (b)
of section 805'', and by striking ``subsection (a)'' in
subparagraph (B) and inserting ``subsection (a) of this
section or subsection (a)(2)(B) or (b) of section
805'';
(C) by redesignating subsection (d) as subsection
(e); and
(D) by inserting after subsection (c) the following
new subsection:
``(d)(1) Except as provided in subsection (b)(4), the provisions of
this title shall supersede any and all State laws insofar as they may
now or hereafter preclude, or have the effect of precluding, a health
insurance issuer from offering health insurance coverage in connection
with an association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of subsection
(b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating in
such State, the provisions 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 coverage
of the same policy type to other employers operating 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 coverage 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 defined 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
supersede any and all laws of any other State in which health
insurance coverage of such type is offered, insofar as they may
preclude, upon the filing in the same form and manner of such
policy form with the applicable State authority in such other
State, the approval of the filing in such other State.
``(3) Nothing in subsection (b)(6)(E) or the preceding provisions
of this subsection shall be construed, with respect to health insurance
issuers or health insurance coverage, 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 `association health
plan' has the meaning provided in section 801(a), and the terms `health
insurance coverage', `participating employer', and `health insurance
issuer' have the meanings provided such terms in section 812,
respectively.''.
(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 meaning of section
733(a)(2)),'' after ``arrangement,'', 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 insurance may apply.''.
(4) Section 514(e) of such Act (as redesignated by
paragraph (2)(C)) is amended--
(A) by striking ``Nothing'' and inserting ``(1)
Except as provided in paragraph (2), nothing''; 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 the Small Business Health Fairness Act of 2015
shall be construed to alter, amend, modify, invalidate, impair, or
supersede any provision of this title, except by specific cross-
reference to the affected section.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new sentence:
``Such term also includes a person serving as the sponsor of an
association health plan under part 8.''.
(d) Disclosure of Solvency Protections Related 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 solvency 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 Certification of Self-Insured
Association Health Plans.--Not later than January 1, 2016, 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 relating to section 734 the following new items:
``Part 8--Rules Governing Association Health Plans
``801. Association health plans.
``802. Certification of association health plans.
``803. Requirements relating to sponsors and boards of trustees.
``804. Participation and coverage requirements.
``805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``806. Maintenance of reserves and provisions for solvency for plans
providing health benefits in addition to
health insurance coverage.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Corrective actions and mandatory termination.
``810. Trusteeship by the Secretary of insolvent association health
plans providing health benefits in addition
to health insurance coverage.
``811. State assessment authority.
``812. Definitions and rules of construction.''.
SEC. 213. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(40)(B)) is amended--
(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, whether or not incorporated, shall be deemed a
single employer 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
determination'' and inserting the following:
``(iii)(I) in any case in which the benefit referred to in
subparagraph (A) consists of medical care (as defined in
section 812(a)(2)), the determination of whether a trade or
business is under `common control' with another trade or
business shall be determined under regulations of the Secretary
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 section 4001(b), except that, for purposes of
this paragraph, 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 participating 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
employees of participating employers and who are covered under
the arrangement,''.
SEC. 214. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION 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--
(1) by inserting ``(a)'' after ``Sec. 501.''; and
(2) by adding at the end the following new subsection:
``(b) 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
employees 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 bargaining 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 relations 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 Desist Orders.--
``(1) In general.--Subject to paragraph (2), upon
application by the Secretary showing the operation, promotion,
or marketing of an association health plan (or similar
arrangement providing benefits consisting of medical care (as
defined in section 733(a)(2))) that--
``(A) is not certified under part 8, is subject
under section 514(b)(6) to the insurance laws of any
State in which the plan or arrangement offers or
provides benefits, and is not licensed, 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 coverage; and
``(B) with respect to each State in which the plan
or arrangement offers or provides benefits, the plan or
arrangement is operating in accordance with applicable
State laws that are not superseded under section 514.
``(3) Additional equitable relief.--The court may grant
such additional equitable relief, including any relief
available under this title, as it deems necessary to protect
the interests of the public 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 requirements of this section are met in connection with claims
filed under the plan.''.
SEC. 215. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 506 of the Employee Retirement Income Security 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 Secretary shall consult
with the State recognized under paragraph (2) with respect to
an association health plan regarding the exercise of--
``(A) the Secretary's authority under sections 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 accordance
with regulations of the Secretary applicable to
certification under part 8.
``(2) Recognition of primary domicile state.--In carrying
out paragraph (1), the Secretary shall ensure that only one
State will be recognized, 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 offered 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 maintained.''.
SEC. 216. 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 amendments 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 arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement 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 participating employers, upon the filing
with the applicable authority (as defined in section 812(a)(5)
of the Employee Retirement Income Security Act of 1974 (as
amended by this subtitle)) by the arrangement of an application
for certification of the arrangement 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 arrangement is operated by
a board of directors which--
(i) is elected by the participating
employers, 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 operations 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 subsection, 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 subsection.
Subtitle C--Health Insurance Reforms
SEC. 221. REQUIREMENTS FOR INDIVIDUAL HEALTH INSURANCE.
(a) In General.--Section 2741 of the Public Health Service Act (42
U.S.C. 300gg-41), as restored and revived by section 2 of this Act, is
amended--
(1) in subsection (a)--
(A) in the heading, by striking ``to certain
individuals with prior group coverage'';
(B) in paragraph (1), by striking ``and section
2744'';
(C) in paragraph (1)(B), by inserting ``unless such
exclusion complies with paragraph (2)'' before the
period; and
(D) by striking paragraph (2) and inserting the
following new paragraphs:
``(2) Limitation on preexisting condition exclusion
period.--
``(A) Limitation.--A health insurance issuer
offering health insurance coverage in the individual
market may not, with respect to an enrollee in such
coverage, impose any preexisting condition exclusion if
such enrollee has at least 18 months of continuous
creditable coverage (as defined in section 2701(c)(1))
immediately preceding the enrollment date.
``(B) Imposition of exclusion.--Notwithstanding
paragraph (1)(B), a health insurance issuer offering
health insurance coverage in the individual market may,
with respect to an enrollee in such coverage who is not
described in subparagraph (A), impose a preexisting
condition exclusion only if--
``(i) such exclusion relates to a condition
(whether physical or mental), regardless of the
cause of the condition, for which medical
advice, diagnosis, care, or treatment was
recommended or received within the 6-month
period ending on the enrollment date;
``(ii) such exclusion extends for a period
of not more than 18 months after the enrollment
date; and
``(iii) the period of any such preexisting
condition exclusion is reduced by the aggregate
of the periods of creditable coverage (if any,
as defined in section 2701(c)(1)) applicable to
the enrollee as of the enrollment date.
``(C) Premium surcharge.--Notwithstanding paragraph
(6), with respect to an enrollee described in
subparagraph (B), a health insurance issuer may charge
a premium for the coverage involved that does not
exceed 150 percent of the applicable standard rate, for
not to exceed 24 months (or 36 months if the health
insurance issuer does not impose any preexisting
condition exclusion with respect to such enrollee),
reduced by the aggregate of the periods of creditable
coverage (if any, as defined in section 2701(c)(1))
applicable to the enrollee as of the enrollment date.
For purposes of this subsection, the term `applicable
standard rate' means the standard premium rate that the
issuer charges for the coverage involved with respect
to an individual described in subparagraph (A) with the
same rating characteristics or rating factors as the
enrollee described in subparagraph (B), provided that
any variations in standard premium rates are based on
the uniform application of rating characteristics or
rating factors that are permitted by State law and are
not otherwise prohibited by paragraph (6).
``(3) Exceptions.--Notwithstanding paragraph (2), and
subject to subparagraph (D), a health insurance issuer offering
health insurance coverage in the individual market, may not
impose any of the following preexisting condition exclusion:
``(A) Exclusion not applicable to certain
newborns.--In the case of an individual who, as of the
last day of the 30-day period beginning with the date
of birth, is a dependent of an enrollee in such
coverage.
``(B) Exclusion not applicable to certain adopted
children.--In the case of a child who is adopted or
placed for adoption before attaining 18 years of age
and who, as of the last day of the 30-day period
beginning on the date of the adoption or placement for
adoption, is a dependent of an enrollee in such
coverage. The previous sentence shall not apply to
coverage before the date of such adoption or placement
for adoption.
``(C) Exclusion not applicable to pregnancy.--
Relating to pregnancy as a preexisting condition.
``(D) Loss if break in coverage.--Subparagraphs (A)
and (B) shall no longer apply to an individual after
the end of the first 63-day period during all of which
the individual was not covered under any creditable
coverage.
``(4) Open enrollment periods.--A health insurance issuer
offering health insurance coverage in the individual market may
limit the applicability of the provisions of paragraph (1) to
scheduled open enrollment periods, provided that--
``(A) any such open enrollment period shall not be
less than 30 days;
``(B) any period between scheduled open enrollment
periods shall not exceed 24 months; and
``(C) such limitation shall not apply to any
individual who qualifies for a special enrollment
period under paragraph (5).
``(5) Special enrollment periods.--Subject to subparagraphs
(E) and (F), a health insurance issuer offering health
insurance coverage in the individual market shall permit an
individual who is an eligible individual or a dependent to
enroll in coverage during a special enrollment period if the
individual experiences any of the following qualifying events:
``(A) For dependent beneficiaries.--The individual
becomes, by reason of marriage, birth, adoption or
placement for adoption, a dependent of an individual
enrolled in a plan offered by the health insurance
issuer and such individual otherwise qualifies, under
the terms of the plan, as eligible for coverage as a
dependent of such enrollee.
``(B) Loss of group coverage.--The individual loses
coverage under a group health plan as a result of--
``(i) loss of eligibility for the coverage
(including as a result of legal separation,
divorce, death, attaining an age at which
eligibility terminates, termination of
employment, or reduction in the number of hours
of employment); or
``(ii) termination of the coverage by the
plan sponsor.
``(C) Loss of individual coverage.--The individual
loses individual market coverage as a result of--
``(i) discontinuation of a plan as a result
of a health insurance issuer ceasing to offer
coverage in the individual market in accordance
with section 2742(c)(2) (42 U.S.C. 300gg-
42(c)(2)) of this title;
``(ii) expiration of COBRA, or other,
continuation coverage;
``(iii) ceasing to qualify, under the terms
of the coverage, as a dependent (including as a
result of legal separation, divorce, death, or
attaining an age at which eligibility
terminates); and
``(iv) permanently moving outside the State
in which the coverage was issued, or in the
case of a network plan, outside the plan's
service area.
``(D) Loss of eligibility for a government coverage
program.--The individual loses coverage by ceasing to
be eligible for coverage under any of the following:
``(i) Part A or part B of title XVIII of
the Social Security Act (42 U.S.C. 1395c et
seq., 1395j et seq.).
``(ii) Title XIX of the Social Security Act
(42 U.S.C. 1396 et seq.), other than coverage
consisting solely of benefits under section
1928 (42 U.S.C. 1396s).
``(iii) Title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.).
``(iv) Chapter 55 of title 10.
``(v) Chapter 89 of title 5.
``(vi) A State health benefits risk pool.
``(E) For purposes of this paragraph, loss of
coverage shall not include any of the following:
``(i) Voluntary termination of coverage by
an individual, except if such termination is
the result of circumstances described in
subparagraph (C)(iv).
``(ii) Termination of coverage by the
issuer or the plan sponsor of the coverage for
any reason described in paragraphs (1) or (2)
of section 2742(b) (300gg-42(b)) of this title.
``(iii) Loss of any coverage that consists
solely of coverage of excepted benefits (as
defined in section 300gg-91(c) of this title).
``(F) Any special enrollment period shall not be
less than 60 days and shall begin on the date of the
qualifying event.
``(6) Standard premium rates.--With respect to the premium
rate charged by a health insurance issuer for health insurance
coverage offered in the individual market, such rate, with
respect to the particular plan or coverage involved, shall not
vary based on any of the following health status-related
factors in relation to an eligible individual or dependent:
``(A) Health status.
``(B) Medical condition (including both physical
and mental illnesses).
``(C) Claims experience.
``(D) Receipt of health care.
``(E) Medical history.
``(F) Genetic information.
``(G) Evidence of insurability (including
conditions arising out of acts of domestic violence).
``(H) Disability.'';
(2) by amending subsection (b) to read as follows:
``(b) Definitions.--For purposes of this section:
``(1) Eligible individual.--The term `eligible individual'
means an individual who is eligible under applicable State law
to purchase individual health insurance coverage in the State.
``(2) Dependent.--The term `dependent' means an individual
who, under the terms of the coverage and applicable State law,
qualifies to enroll in such coverage as a dependent of an
individual described in paragraph (1).''; and
(3) by striking subsection (c) and redesignating subsection
(d) and the first subsection (e) as subsections (c) and (d),
respectively.
(b) Conforming Amendment.--Section 2744 of the Public Health
Service Act (42 U.S.C. 300gg-44), as restored and revived by section 2
of this Act, is repealed.
(c) Effective Date.--The amendments made by this section shall
apply with respect to health insurance coverage offered for plan years
beginning after the date of the enactment of this Act.
TITLE III--INTERSTATE MARKET FOR HEALTH INSURANCE
SEC. 301. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE
COVERAGE.
(a) In General.--Title XXVII of the Public Health Service Act (42
U.S.C. 300gg et seq.), as restored by section 2, is amended by adding
at the end the following new part:
``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE
``SEC. 2795. DEFINITIONS.
``In this part:
``(1) Primary state.--The term `primary State' means, with
respect to individual health insurance coverage offered by a
health insurance issuer, the State designated by the issuer as
the State whose covered laws shall govern the health insurance
issuer in the sale of such coverage under this part. An issuer,
with respect to a particular policy, may only designate one
such State as its primary State with respect to all such
coverage it offers. Such an issuer may not change the
designated primary State with respect to individual health
insurance coverage once the policy is issued, except that such
a change may be made upon renewal of the policy. With respect
to such designated State, the issuer is deemed to be doing
business in that State.
``(2) Secondary state.--The term `secondary State' means,
with respect to individual health insurance coverage offered by
a health insurance issuer, any State that is not the primary
State. In the case of a health insurance issuer that is selling
a policy in, or to a resident of, a secondary State, the issuer
is deemed to be doing business in that secondary State.
``(3) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section 2791(b)(2),
except that such an issuer must be licensed in the primary
State and be qualified to sell individual health insurance
coverage in that State.
``(4) Individual health insurance coverage.--The term
`individual health insurance coverage' means health insurance
coverage offered in the individual market, as defined in
section 2791(e)(1), but does not include excepted benefits
described in section 2791(c).
``(5) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or official
or officials designated by the State to enforce the
requirements of this title for the State with respect to the
issuer.
``(6) Hazardous financial condition.--The term `hazardous
financial condition' means that, based on its present or
reasonably anticipated financial condition, a health insurance
issuer is unlikely to be able--
``(A) to meet obligations to policyholders with
respect to known claims and reasonably anticipated
claims; or
``(B) to pay other obligations in the normal course
of business.
``(7) Covered laws.--
``(A) In general.--The term `covered laws' means
the laws, rules, regulations, agreements, and orders
governing the insurance business pertaining to--
``(i) individual health insurance coverage
issued by a health insurance issuer;
``(ii) the offer, sale, rating (including
medical underwriting), renewal, and issuance of
individual health insurance coverage to an
individual;
``(iii) the provision to an individual in
relation to individual health insurance
coverage of health care and insurance related
services;
``(iv) the provision to an individual in
relation to individual health insurance
coverage of management, operations, and
investment activities of a health insurance
issuer; and
``(v) the provision to an individual in
relation to individual health insurance
coverage of loss control and claims
administration for a health insurance issuer
with respect to liability for which the issuer
provides insurance.
``(B) Exception.--Such term does not include any
law, rule, regulation, agreement, or order governing
the use of care or cost management techniques,
including any requirement related to provider
contracting, network access or adequacy, health care
data collection, or quality assurance.
``(8) State.--The term `State' means only the 50 States and
the District of Columbia.
``(9) Unfair claims settlement practices.--The term `unfair
claims settlement practices' means only the following
practices:
``(A) Knowingly misrepresenting to claimants and
insured individuals relevant facts or policy provisions
relating to coverage at issue.
``(B) Failing to acknowledge with reasonable
promptness pertinent communications with respect to
claims arising under policies.
``(C) Failing to adopt and implement reasonable
standards for the prompt investigation and settlement
of claims arising under policies.
``(D) Failing to effectuate prompt, fair, and
equitable settlement of claims submitted in which
liability has become reasonably clear.
``(E) Refusing to pay claims without conducting a
reasonable investigation.
``(F) Failing to affirm or deny coverage of claims
within a reasonable period of time after having
completed an investigation related to those claims.
``(G) A pattern or practice of compelling insured
individuals or their beneficiaries to institute suits
to recover amounts due under its policies by offering
substantially less than the amounts ultimately
recovered in suits brought by them.
``(H) A pattern or practice of attempting to settle
or settling claims for less than the amount that a
reasonable person would believe the insured individual
or his or her beneficiary was entitled by reference to
written or printed advertising material accompanying or
made part of an application.
``(I) Attempting to settle or settling claims on
the basis of an application that was materially altered
without notice to, or knowledge or consent of, the
insured.
``(J) Failing to provide forms necessary to present
claims within 15 calendar days of a requests with
reasonable explanations regarding their use.
``(K) Attempting to cancel a policy in less time
than that prescribed in the policy or by the law of the
primary State.
``(10) Fraud and abuse.--The term `fraud and abuse' means
an act or omission committed by a person who, knowingly and
with intent to defraud, commits, or conceals any material
information concerning, one or more of the following:
``(A) Presenting, causing to be presented or
preparing with knowledge or belief that it will be
presented to or by an insurer, a reinsurer, broker or
its agent, false information as part of, in support of
or concerning a fact material to one or more of the
following:
``(i) An application for the issuance or
renewal of an insurance policy or reinsurance
contract.
``(ii) The rating of an insurance policy or
reinsurance contract.
``(iii) A claim for payment or benefit
pursuant to an insurance policy or reinsurance
contract.
``(iv) Premiums paid on an insurance policy
or reinsurance contract.
``(v) Payments made in accordance with the
terms of an insurance policy or reinsurance
contract.
``(vi) A document filed with the
commissioner or the chief insurance regulatory
official of another jurisdiction.
``(vii) The financial condition of an
insurer or reinsurer.
``(viii) The formation, acquisition,
merger, reconsolidation, dissolution or
withdrawal from one or more lines of insurance
or reinsurance in all or part of a State by an
insurer or reinsurer.
``(ix) The issuance of written evidence of
insurance.
``(x) The reinstatement of an insurance
policy.
``(B) Solicitation or acceptance of new or renewal
insurance risks on behalf of an insurer, reinsurer, or
other person engaged in the business of insurance by a
person who knows or should know that the insurer or
other person responsible for the risk is insolvent at
the time of the transaction.
``(C) Transaction of the business of insurance in
violation of laws requiring a license, certificate of
authority or other legal authority for the transaction
of the business of insurance.
``(D) Attempt to commit, aiding or abetting in the
commission of, or conspiracy to commit the acts or
omissions specified in this paragraph.
``SEC. 2796. APPLICATION OF LAW.
``(a) In General.--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 Secondary State.--Except as
provided in this section, a health insurance issuer with respect to its
offer, sale, rating (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 indirectly,
the operation of the health insurance issuer operating in the
secondary State, except that any secondary State may require
such an issuer--
``(A) to pay, on a nondiscriminatory basis,
applicable premium and other taxes (including high-risk
pool assessments) which are levied on insurers and
surplus lines insurers, brokers, or policyholders under
the laws of the State;
``(B) to register with and designate the State
insurance commissioner as its agent solely for the
purpose of receiving service of legal documents or
process;
``(C) to submit to an examination of its financial
condition by the State insurance commissioner in any
State in which the issuer is doing business to
determine the issuer's financial condition, if--
``(i) the State insurance commissioner of
the primary State has not done an examination
within the period recommended by the National
Association of Insurance Commissioners; and
``(ii) any such examination is conducted in
accordance with the examiners' handbook of the
National Association of Insurance Commissioners
and is coordinated to avoid unjustified
duplication and unjustified repetition;
``(D) to comply with a lawful order issued--
``(i) in a delinquency proceeding commenced
by the State insurance commissioner if there
has been a finding of financial impairment
under subparagraph (C); or
``(ii) in a voluntary dissolution
proceeding;
``(E) to comply with an injunction issued by a
court of competent jurisdiction, upon a petition by the
State insurance commissioner alleging that the issuer
is in hazardous financial condition;
``(F) to participate, on a nondiscriminatory basis,
in any insurance insolvency guaranty association or
similar association to which a health insurance issuer
in the State is required to belong;
``(G) to comply with any State law regarding fraud
and abuse (as defined in section 2795(10)), except that
if the State seeks an injunction regarding the conduct
described in this subparagraph, such injunction must be
obtained from a court of competent jurisdiction;
``(H) to comply with any State law regarding unfair
claims settlement practices (as defined in section
2795(9)); or
``(I) to comply with the applicable requirements
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 Secondary 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 insurance 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, respectively, for the coverage concerned:
This policy is issued by _____ and is governed by the laws and
regulations of the State of _____, 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 _____,
including coverage of some services or benefits mandated by the law of
the State of _____. Additionally, this policy is not subject to all of
the consumer protection laws or restrictions on rate changes of the
State of _____. As with all insurance products, before purchasing this
policy, you should carefully 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 section, a health
insurance issuer that provides individual health insurance
coverage to an individual under this part in a primary or
secondary State may not upon renewal--
``(A) move or reclassify the individual insured
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 status-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 experience;
``(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 incentives--
``(i) are disclosed to the consumer in the
insurance contract;
``(ii) are based on specific wellness
activities that are not applicable to all
individuals; and
``(iii) are not obtainable by all
individuals 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 compensation subject
to the provisions of the laws of that State, except that a State may
not impose any qualification or requirement which discriminates against
a nonresident agent or broker.
``(g) Documents for Submission to State Insurance Commissioner.--
Each health insurance issuer issuing individual health insurance
coverage in both primary and secondary States shall submit--
``(1) to the insurance commissioner of each State in which
it intends to offer such coverage, before it may offer
individual health insurance coverage in such State--
``(A) a copy of the plan of operation or
feasibility 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 primary
State; and
``(2) to the insurance commissioner of each secondary State
in which it offers individual health insurance coverage, a copy
of the issuer's quarterly financial statement submitted to the
primary State, which statement shall be certified by an
independent public accountant and contain a statement of
opinion 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 insurance; 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 Administrative 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 section 2796(b)(1).
``(j) State Powers To Enforce State Laws.--
``(1) In general.--Subject to the provisions of subsection
(b)(1)(G) (relating to injunctions) and paragraph (2), nothing
in this section shall be construed 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 Federal or State court of competent jurisdiction.
``(k) States' Authority To Sue.--Nothing in this section shall
affect the authority of any State to bring action 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 corporations.
``(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 residents
of a secondary State, and the issuer is offering coverage 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 insurance 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 capital and surplus requirements for all health
insurance issuers.
``SEC. 2798. LIMITATION ON INDIVIDUAL PURCHASE IN SECONDARY STATE.
``Effective beginning two years after the date of enactment of this
part, an individual in a State may not buy individual health insurance
coverage in a secondary State if the premium for individual health
insurance in the primary State (with respect to the individual) exceeds
the national average premium by 10 percent or more.
``SEC. 2799. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
``(a) Right to External Appeal.--A health insurance issuer may not
offer, sell, or issue individual health insurance coverage in a
secondary State under the provisions of this title unless--
``(1) both the secondary State and the primary State have
legislation or regulations in place establishing an independent
review process for individuals who are covered by individual
health insurance coverage; or
``(2) in any case in which the requirements of paragraph
(1) are not met with respect to the either of such States, the
issuer provides an independent review mechanism substantially
identical (as determined by the applicable State authority of
such State) to that prescribed in the `Health Carrier External
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);
``(B) with respect to each review, each reviewer
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 independent medical
reviewer shall be a physician (allopathic or osteopathic) or
health care professional who--
``(A) is appropriately credentialed or licensed in
one 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 subparagraph (B),
each independent medical reviewer in a case shall--
``(i) not be a related party (as defined in
paragraph (7));
``(ii) not have a material familial,
financial, 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 subparagraph (A) shall
be construed to--
``(i) prohibit an individual, solely on the
basis of affiliation with the issuer, from
serving as an independent medical reviewer 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
affiliation is disclosed to the issuer
and the enrollee (or authorized
representative) and neither party
objects; and
``(IV) the affiliated individual is
not an employee of the issuer and does
not provide services exclusively or
primarily to or on behalf of the
issuer;
``(ii) prohibit an individual who has staff
privileges at the institution where the
treatment involved takes place from serving 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 services--
``(i) by a physician, a reviewer shall be a
practicing physician (allopathic or
osteopathic) of the same or similar specialty,
as a physician who, acting within the
appropriate scope of practice within the State
in which the service is provided or rendered,
typically treats the condition, makes the
diagnosis, or provides the type of treatment
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
professional of the same or similar specialty
as the non-physician health care professional
who, acting within the appropriate scope of
practice within the State in which the service
is provided or rendered, typically treats the
condition, makes the diagnosis, or provides the
type of treatment under review.
``(B) Practicing defined.--For purposes of this
paragraph, the term `practicing' means, with respect to
an individual who is a physician or other health care
professional, that the individual provides health care
services to individual patients on average at least 2
days per week.
``(5) Pediatric expertise.--In the case of an external
review relating to a child, a reviewer shall have expertise
under paragraph (2) in pediatrics.
``(6) Limitations on reviewer compensation.--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 rendered 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 relating 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 representative).
``(C) The health care professional that provides
the items or services involved in the denial.
``(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 services involved in
the denial.
``(F) Any other party determined under any
regulations to have a substantial interest in the
denial involved.
``(8) Definitions.--For purposes of this subsection:
``(A) Enrollee.--The term `enrollee' means, with
respect to health insurance coverage 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 individual 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. 2800. ENFORCEMENT.
``(a) In General.--Subject to subsection (b), with respect to
specific individual health insurance coverage the primary State for
such coverage has sole jurisdiction to enforce the primary State's
covered laws in the primary State and any secondary State.
``(b) Secondary State's Authority.--Nothing in subsection (a) shall
be construed to affect the authority of a secondary State to enforce
its laws as set forth in the exception specified in section 2796(b)(1).
``(c) Court Interpretation.--In reviewing action initiated by the
applicable secondary State authority, the court of competent
jurisdiction shall apply the covered laws of the primary State.
``(d) Notice of Compliance Failure.--In the case of individual
health insurance coverage offered in a secondary 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 concerning the effect of the
amendment made by subsection (a) on--
(A) the number of uninsured and under-insured;
(B) the availability and cost of health insurance
policies for individuals with pre-existing medical
conditions;
(C) the availability and cost of health insurance
policies generally;
(D) the elimination or reduction of different 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 General 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).
(d) Severability.--If any provision of the section or the
application of such provision to any person or circumstance is held to
be unconstitutional, the remainder of this section and the application
of the provisions of such to any other person or circumstance shall not
be affected.
TITLE IV--LAWSUIT ABUSE REFORMS
SEC. 401. CHANGE IN BURDEN OF PROOF BASED ON COMPLIANCE WITH CLINICAL
PRACTICE GUIDELINES.
(a) Selection and Issuance of Clinical Practices Guidelines.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
provide for the selection and issuance of clinical practice
guidelines for treatment of medical conditions (each in this
subsection referred to as a ``guideline'') in accordance with
paragraphs (2) and (3).
(2) Development process.--Not later than 90 days after the
date of enactment of this title, the Secretary shall enter into
a contract with a qualified physician consensus-building
organization (such as the Physician Consortium for Performance
Improvement), in concert and agreement with physician specialty
organizations, to develop guidelines. The contract shall
require that the organization submit guidelines to the agency
not later than 18 months after the date of the enactment of
this title.
(3) Issuance.--
(A) In general.--Not later than 2 years after the
date of the enactment of this title, the Secretary
shall, after notice and opportunity for public comment,
make a rule that provides for the issuance of the
guidelines submitted under paragraph (2).
(B) Limitation.--The Secretary may not make a rule
that includes guidelines other than those submitted
under paragraph (2).
(C) Dissemination.--The Secretary shall post such
guidelines on the public Internet Web page of the
Department of Health and Human Services.
(4) Maintenance.--Not later than 4 years after the date of
enactment of this title, and every 2 years thereafter, the
Secretary shall review the guidelines and shall, as necessary,
enter into contracts similar to the contract described in
paragraph (2), and issue guidelines in a manner similar to the
issuance of guidelines under paragraph (3).
(b) Use.--
(1) Use by defendant to change the burden of proof.--If a
defendant in a health care lawsuit relating to treatment of an
individual establishes by a preponderance of the evidence that
the treatment was provided in a manner consistent with an
applicable guideline issued under subsection (a), the defendant
may not be held liable unless the plaintiff establishes the
liability of the defendant by clear and convincing evidence.
(2) Limitation on introduction as evidence against a
defendant.--Guidelines issued under subsection (a) may not be
introduced as evidence of negligence or deviation in the
standard of care in any health care lawsuit unless they have
previously been introduced by the defendant.
(3) No presumption of negligence against a defendant.--
There shall be no presumption of negligence with respect to
treatment if a health care provider provides the treatment in a
manner inconsistent with such guidelines.
(c) Construction.--Nothing in this section shall be construed as
preventing a State from--
(1) replacing their current medical malpractice rules with
rules that rely, as a defense, upon a health care provider's
compliance with a guideline issued under subsection (a); or
(2) applying additional guidelines or limitations on
liability that are in addition to, but not in lieu of, the
guidelines issued under subsection (a).
SEC. 402. STATE GRANTS TO CREATE EXPERT PANELS AND ADMINISTRATIVE
HEALTH CARE TRIBUNALS.
Part P of title III of the Public Health Service Act (42 U.S.C.
280g et seq.) is amended by adding at the end the following:
``SEC. 399T. STATE GRANTS TO CREATE ADMINISTRATIVE HEALTH CARE
TRIBUNALS.
``(a) In General.--The Secretary may award grants to States for the
development, implementation, and evaluation of administrative health
care tribunals that comply with this section, for the resolution of
disputes concerning injuries allegedly caused by health care providers.
``(b) Conditions for Demonstration Grants.--To be eligible to
receive a grant under this section, a State shall submit to the
Secretary an application at such time, in such manner, and containing
such information as may be required by the Secretary. A grant shall be
awarded under this section on such terms and conditions as the
Secretary determines appropriate.
``(c) Representation by Counsel.--A State that receives a grant
under this section may not preclude any party to a dispute before an
administrative health care tribunal operated under such grant from
obtaining legal representation during any review by the expert panel
under subsection (d), the administrative health care tribunal under
subsection (e), or a State court under subsection (f).
``(d) Expert Panel Review and Early Offer Guidelines.--
``(1) In general.--If, in any health care liability action
against a health care provider, the health care provider
alleges, in any response to the claimant's filing, that the
health care provider adhered to an applicable practice
guideline in the provision of health care items or services to
the claimant, then further proceedings on the health care
liability action shall be suspended prior to discovery
proceedings, until the completion of a review of the action by
an independent expert panel in accordance with this subsection.
``(2) Composition.--
``(A) In general.--The members of each expert panel
under this subsection shall be appointed by the head of
the State agency responsible for health. Each expert
panel shall be composed of no fewer than 3 members and
not more than 5 members. At least one-half of such
members shall be medical experts (either physicians or
health care professionals).
``(B) Licensure and expertise.--Each physician or
health care professional appointed to an expert panel
under subparagraph (A) shall--
``(i) be appropriately credentialed or
licensed in one or more States to deliver
health care services; and
``(ii) typically treat the condition, make
the diagnosis, or provide the type of treatment
that is under review.
``(C) Independence.--
``(i) In general.--Subject to clause (ii),
each individual appointed to an expert panel
under this paragraph shall--
``(I) not have a material familial,
financial, or professional relationship
with a party involved in the dispute
reviewed by the panel; and
``(II) not otherwise have a
conflict of interest with such a party.
``(ii) Exception.--Nothing in clause (i)
shall be construed to prohibit an individual
who has staff privileges at an institution
where the treatment involved in the dispute was
provided from serving as a member of an expert
panel merely on the basis of such affiliation,
if the affiliation is disclosed to the parties
and neither party objects.
``(D) Practicing health care professional in same
field.--
``(i) In general.--In a dispute before an
expert panel that involves treatment, or the
provision of items or services--
``(I) by a physician, the medical
experts on the expert panel shall be
practicing physicians (allopathic or
osteopathic) of the same or similar
specialty as a physician who typically
treats the condition, makes the
diagnosis, or provides the type of
treatment under review; or
``(II) by a health care
professional other than a physician, at
least two medical experts on the expert
panel shall be practicing physicians
(allopathic or osteopathic) of the same
or similar specialty as the health care
professional who typically treats the
condition, makes the diagnosis, or
provides the type of treatment under
review, and, if determined appropriate
by the State agency, an additional
medical expert shall be a practicing
health care professional (other than
such a physician) of such a same or
similar specialty.
``(ii) Practicing defined.--In 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
a week.
``(E) Pediatric expertise.--In the case of dispute
relating to a child, at least 1 medical expert on the
expert panel shall have expertise described in
subparagraph (D)(i) in pediatrics.
``(F) No civil liability for members.--No civil
action shall be brought in any court against any member
of an expert panel for any act done, failure to act, or
statement or opinion made, within the scope of
individual's as a member of the expert panel.
``(3) Determination.--
``(A) In general.--After a review under paragraph
(1), an expert panel shall make a determination as to
the liability of the parties involved and compensation.
``(B) Considerations in making determinations.--In
making a determination under this subsection as to the
liability of parties involved and compensation, the
following shall apply:
``(i) Treatment of clinical practice
guidelines.--An expert panel shall acknowledge
the ability of physicians to depart from the
recommendations in clinical practice
guidelines, when appropriate, in the care of
individual patients.
``(ii) Limitation.--An expert 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.
``(4) Early offer.--If the parties to a dispute before an
expert panel under this subsection accept the determination of
the expert panel concerning liability and compensation, such
compensation shall be paid to the claimant and the claimant
shall agree to forgo any further action against the health care
providers involved.
``(5) Failure to accept.--If any party decides not to
accept the expert panel's determination, the matter shall be
referred to an administrative health care tribunal created
pursuant to this section.
``(e) Administrative Health Care Tribunals.--
``(1) In general.--Upon the failure of any party to accept
the determination of an expert panel under subsection (d), the
parties shall have the right to request a hearing concerning
the liability or compensation involved by an administrative
health care tribunal established by the State involved.
``(2) Requirements.--In establishing an administrative
health care tribunal under this section, a State shall--
``(A) ensure that such tribunals are presided over
by special judges with health care expertise;
``(B) provide authority to such judges to make
binding rulings, rendered in written decisions, on
standards of care, causation, compensation, and related
issues with reliance on independent expert witnesses
commissioned by the tribunal;
``(C) establish gross negligence as the legal
standard for the tribunal; and
``(D) allow the admission into evidence of the
recommendation made by the expert panel under
subsection (d).
``(f) Review by State Court After Exhaustion of Administrative
Remedies.--
``(1) Right to file.--If any party to a dispute before a
health care tribunal under subsection (e) is not satisfied with
the determinations of the tribunal, the party shall have the
right to file their claim in a State court of competent
jurisdiction.
``(2) Forfeit of awards.--Any party filing an action in a
State court in accordance with paragraph (1) shall forfeit any
compensation award made under subsection (e).
``(3) Admissibility.--The determinations of the expert
panel and the administrative health care tribunal pursuant to
subsections (d) and (e) with respect to a State court
proceeding under paragraph (1) shall be admissible into
evidence in any such State court proceeding.
``(4) Treatment of certain expert panel and administrative
health care tribunal findings.--
``(A) Work product.--No finding by an expert panel
under subsection (d) or administrative health care
tribunal under subsection (e) that the defendant
applicable eligible professional breached the standard
of care as set forth under the prescribed practice
guidelines shall constitute negligence per se or
conclusive evidence of liability.
``(B) Finding relating to clinical practice
guidelines.--If an administrative health care tribunal
did not make a finding under subsection (e) that there
was an applicable clinical practice guideline that the
defendant adhered to, with respect to the State court
proceeding under paragraph (1) the State court may
issue summary judgment in favor of the defendant health
care professional unless the claimant is able to show
otherwise by clear and convincing evidence. If an
administrative health care tribunal made a finding
under subsection (e) that there was an applicable
clinical practice guideline that the defendant adhered
to, with respect to a State court proceeding under
paragraph (1) the State court shall issue summary
judgment in favor of the applicable health care
professional unless the claimant is able to show
otherwise by clear and convincing evidence.
``(C) Finding relating to standard of care.--Any
finding an expert panel or administrative health care
tribunal under subsection (d) or (e), respectively,
that the defendant did not breach the standard of care
as set forth under the prescribed clinical practice
guidelines or that the defendant's failure to conform
to the required standard was neither the cause in fact
nor the proximate cause of the plaintiff's injury or
that the plaintiff did not incur any damages as a
result shall be given deference by the State court
involved and shall entitle the defendant to summary
judgment unless the plaintiff is able to show by clear
and convincing evidence that the expert panel or health
care tribunal, respectively, was in error and that
there is a genuine issue as to a material fact in the
case.
``(g) Definition.--In this section, 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, registered, or certified,
or exempted from such requirement by other statute or regulation.
``(h) Authorization of Appropriations.--There are authorized to be
appropriated for any fiscal year such sums as may be necessary for
purposes of making grants to States under this section.''.
SEC. 403. PAYMENT OF DAMAGES AND RECOVERY OF COSTS IN HEALTH CARE
LAWSUITS.
(a) Authorization of Payment of Future Damages to Claimants in
Health Care Lawsuits.--In any health care lawsuit, if an award of
future damages, without reduction to present value, equaling or
exceeding $50,000 is made against a party with sufficient insurance or
other assets to fund a periodic payment of such a judgment, the court
shall, at the request of any party, enter a judgment ordering that the
future damages be paid by periodic payments, in accordance with the
Uniform Periodic Payment of Judgments Act promulgated by the National
Conference of Commissioners on Uniform State Laws.
(b) Recovery of Costs; Payment of Award.--In any health care
lawsuit, the court may supervise the arrangements for payment of
damages to protect against conflicts of interest that may have the
effect of reducing the amount of damages awarded that are actually paid
to claimants. In particular, in any health care lawsuit in which the
attorney for a party claims a financial stake in the outcome by virtue
of a contingent fee, the court shall have the power to restrict the
payment of a claimant's damage recovery to such attorney, and to
redirect such damages to the claimant based upon the interests of
justice and principles of equity.
(c) Applicability.--This section applies to all actions which have
not been first set for trial or retrial before the effective date of
this title.
(d) Statute of Limitations.--Except in the case of a State law that
provides for a shorter period of time, the time for the commencement of
a health care lawsuit shall be no more than 3 years after the date of
manifestation of injury or 1 year after the claimant discovers, or
through the use of reasonable diligence should have discovered, the
injury, whichever occurs first. In no event shall the time for
commencement of a health care lawsuit exceed 3 years after the date of
manifestation of injury unless tolled for any of the following--
(1) upon proof of fraud;
(2) intentional concealment; or
(3) the presence of a foreign body, which has no
therapeutic or diagnostic purpose or effect, in the person of
the injured person.
Except in the case of a State law that provides for a shorter period of
time, actions by a minor shall be commenced within 3 years from the
date of the alleged manifestation of injury except that actions by a
minor under the full age of 6 years shall be commenced within 3 years
of manifestation of injury or prior to the minor's 8th birthday,
whichever provides a longer period. Such time limitation shall be
tolled for minors for any period during which a parent or guardian and
a health care provider or health care organization have committed fraud
or collusion in the failure to bring an action on behalf of the injured
minor.
(e) Fair Share Rule.--In any health care lawsuit, each party shall
be liable for that party's several share of any damages only and not
for the share of any other person. Each party shall be liable only for
the amount of damages allocated to such party in direct proportion to
such party's percentage of responsibility. Whenever a judgment of
liability is rendered as to any party, a separate judgment shall be
rendered against each such party for the amount allocated to such
party. For purposes of this section, the trier of fact shall determine
the proportion of responsibility of each party for the claimant's harm.
(f) Apologies.--In any health care lawsuit, if a claimant receives
any expression of regret for any act pertaining to conduct giving rise
to the health care lawsuit, such expression of regret, notwithstanding
any applicable rule of evidence may not be admitted into evidence in
the health care lawsuit.
SEC. 404. DEFINITIONS.
In this title:
(1) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system that provides for the resolution of health care lawsuits
in a manner other than through a civil action brought in a
State or Federal court.
(2) Claimant.--The term ``claimant'' means any person who
brings a health care lawsuit, including a person who asserts or
claims a right to legal or equitable contribution, indemnity,
or subrogation, arising out of a health care liability claim or
action, and any person on whose behalf such a claim is asserted
or such an action is brought, whether deceased, incompetent, or
a minor.
(3) Federal tax benefit.--A claimant shall be treated as
receiving a Federal tax benefit with respect to payment for
items or services if--
(A) such payment is compensation by insurance--
(i) which constitutes medical care, and
(ii) with respect to the payment of
premiums for which the claimant, or the
employer of the claimant, was allowed an
exclusion from gross income, a deduction, or a
credit for Federal income tax purposes,
(B) a deduction was allowed with respect to such
payment for Federal income tax purposes, or
(C) such payment was from an Archer MSA (as defined
in section 220(d) of the Internal Revenue Code of
1986), a health savings account (as defined in section
223(d) of such Code), a flexible spending arrangement
(as defined in section 106(c)(2) of such Code), or a
health reimbursement arrangement which is treated as
employer-provided coverage under an accident or health
plan for purposes of section 106 of such Code.
(4) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the provision
of health care goods or services brought in a Federal court or
in a State court or pursuant to an alternative dispute
resolution system, if such claim concerns items or services for
which coverage is provided under title XVIII, XIX, or XXI of
the Social Security Act or for which the claimant receives a
Federal tax benefit, against a health care provider, a health
care organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, regardless
of the theory of liability on which the claim is based, or the
number of claimants, plaintiffs, defendants, or other parties,
or the number of claims or causes of action, in which the
claimant alleges a health care liability claim. Such term does
not include a claim or action which is based on criminal
liability; which seeks civil fines or penalties paid to Federal
Government; or which is grounded in antitrust.
(5) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal court or pursuant to an alternative dispute resolution
system, against a health care provider, a health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, regardless
of the theory of liability on which the claim is based, or the
number of plaintiffs, defendants, or other parties, or the
number of causes of action, in which the claimant alleges a
health care liability claim.
(6) Health care liability claim.--The term ``health care
liability claim'' means a demand by any person, whether or not
pursuant to ADR, against a health care provider, health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, including,
but not limited to, third-party claims, cross-claims, counter-
claims, or contribution claims, which are based upon the
provision of, use of, or payment for (or the failure to
provide, use, or pay for) health care services or medical
products, regardless of the theory of liability on which the
claim is based, or the number of plaintiffs, defendants, or
other parties, or the number of causes of action.
(7) Health care organization.--The term ``health care
organization'' means any person or entity 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
administer any health benefit.
(8) 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, registered, or certified, or exempted from such
requirement by other statute or regulation.
(9) Health care goods or services.--The term ``health care
goods or services'' means any goods or services provided by a
health care organization, 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.
(10) Medical product.--The term ``medical product'' means a
drug, device, or biological product intended for humans, and
the terms ``drug'', ``device'', and ``biological product'' have
the meanings given such terms in sections 201(g)(1) and 201(h)
of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1)
and (h)) and section 351(a) of the Public Health Service Act
(42 U.S.C. 262(a)), respectively, including any component or
raw material used therein, but excluding health care services.
(11) Medical treatment.--The term ``medical treatment''
means the provision of any goods or services by a health care
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.
(12) Recovery.--The term ``recovery'' means the net sum
recovered after deducting any disbursements or costs incurred
in connection with prosecution or settlement of the claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys' office
overhead costs or charges for legal services are not deductible
disbursements or costs for such purpose.
(13) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, the Trust Territory of the Pacific Islands,
and any other territory or possession of the United States, or
any political subdivision thereof.
SEC. 405. EFFECT ON OTHER LAWS.
(a) Vaccine Injury.--
(1) To the extent that title XXI of the Public Health
Service Act establishes a Federal rule of law applicable to a
civil action brought for a vaccine-related injury or death--
(A) this title does not affect the application of
the rule of law to such an action; and
(B) any rule of law prescribed by this title in
conflict with a rule of law of such title XXI shall not
apply to such action.
(2) If there is an aspect of a civil action brought for a
vaccine-related injury or death to which a Federal rule of law
under title XXI of the Public Health Service Act does not
apply, then this title or otherwise applicable law (as
determined under this title) will apply to such aspect of such
action.
(b) Other Federal Law.--Except as provided in this section, nothing
in this title shall be deemed to affect any defense available to a
defendant in a health care lawsuit or action under any other provision
of Federal law.
SEC. 406. APPLICABILITY; EFFECTIVE DATE.
This title shall apply to any health care lawsuit brought in a
Federal or State court, or subject to an alternative dispute resolution
system, that is initiated on or after the date of the enactment of this
title, except that any health care lawsuit arising from an injury
occurring prior to the date of the enactment of this title shall be
governed by the applicable statute of limitations provisions in effect
at the time the injury occurred.
TITLE V--WELLNESS AND PREVENTION
SEC. 501. PROVIDING FINANCIAL INCENTIVES FOR TREATMENT COMPLIANCE.
(a) Limitation on Exception for Wellness Programs Under HIPAA
Discrimination Rules.--
(1) Employee retirement income security act of 1974
amendment.--Section 702(b)(2) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1182(b)(2)) is amended by
adding after and below subparagraph (B) the following:
``In applying subparagraph (B), a group health plan (or a
health insurance issuer with respect to health insurance
coverage) may vary premiums and cost-sharing by up to 50
percent of the value of the benefits under the plan (or
coverage) based on participation (or lack of participation) in
a standards-based wellness program.''.
(2) PHSA amendment.--Section 2702(b)(2) of the Public
Health Service Act (42 U.S.C. 300gg-1(b)(2)) is amended by
adding after and below subparagraph (B) the following:
``In applying subparagraph (B), a group health plan (or a
health insurance issuer with respect to health insurance
coverage) may vary premiums and cost-sharing by up to 50
percent of the value of the benefits under the plan (or
coverage) based on participation (or lack of participation) in
a standards-based wellness program.''.
(3) IRC amendment.--Section 9802(b)(2) of the Internal
Revenue Code of 1986 is amended by adding after and below
subparagraph (B) the following:
``In applying subparagraph (B), a group health plan may vary
premiums and cost-sharing by up to 50 percent of the value of
the benefits under the plan based on participation (or lack of
participation) in a standards-based wellness program.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to plan years beginning more than 1 year after the date of the
enactment of this Act.
TITLE VI--TRANSPARENCY AND INSURANCE REFORM MEASURES
SEC. 601. RECEIPT AND RESPONSE TO REQUESTS FOR CLAIM INFORMATION.
(a) In General.--Title XXVII of the Public Health Service Act is
amended by inserting after section 2713 the following new section:
``SEC. 2714. RECEIPT AND RESPONSE TO REQUESTS FOR CLAIM INFORMATION.
``(a) Requirement.--
``(1) In general.--In the case of health insurance coverage
offered in connection with a group health plan, not later than
the 30th day after the date a health insurance issuer receives
a written request for a written report of claim information
from the plan, plan sponsor, or plan administrator, the health
insurance issuer shall provide the requesting party the report,
subject to the succeeding provisions of this section.
``(2) Exception.--The health insurance issuer is not
obligated to provide a report under this subsection regarding a
particular employer or group health plan more than twice in any
12-month period and is not obligated to provide such a report
in the case of an employer with fewer than 50 employees.
``(3) Deadline.--A plan, plan sponsor, or plan
administrator must request a report under this subsection
before or on the second anniversary of the date of termination
of coverage under a group health plan issued by the health
insurance issuer.
``(b) Form of Report; Information To Be Included.--
``(1) In general.--A health insurance issuer shall provide
the report of claim information under subsection (a)--
``(A) in a written report;
``(B) through an electronic file transmitted by
secure electronic mail or a file transfer protocol
site; or
``(C) by making the required information available
through a secure Web site or Web portal accessible by
the requesting plan, plan sponsor, or plan
administrator.
``(2) Information to be included.--A report of claim
information provided under subsection (a) shall contain all
information available to the health insurance issuer that is
responsive to the request made under such subsection,
including, subject to subsection (c), protected health
information, for the 36-month period preceding the date of the
report or the period specified by subparagraphs (D), (E), and
(F) of paragraph (3), if applicable, or for the entire period
of coverage, whichever period is shorter.
``(3) Required information.--Subject to subsection (c), a
report provided under subsection (a) shall include the
following:
``(A) Aggregate paid claims experience by month,
including claims experience for medical, dental, and
pharmacy benefits, as applicable.
``(B) Total premium paid by month.
``(C) Total number of covered employees on a
monthly basis by coverage tier, including whether
coverage was for--
``(i) an employee only;
``(ii) an employee with dependents only;
``(iii) an employee with a spouse only; or
``(iv) an employee with a spouse and
dependents.
``(D) The total dollar amount of claims pending as
of the date of the report.
``(E) A separate description and individual claims
report for any individual whose total paid claims
exceed $15,000 during the 12-month period preceding the
date of the report, including the following information
related to the claims for that individual--
``(i) a unique identifying number,
characteristic, or code for the individual;
``(ii) the amounts paid;
``(iii) dates of service; and
``(iv) applicable procedure codes and
diagnosis codes.
``(F) For claims that are not part of the
information described in a previous subparagraph, a
statement describing precertification requests for
hospital stays of 5 days or longer that were made
during the 30-day period preceding the date of the
report.
``(c) Limitations on Disclosure.--
``(1) In general.--A health insurance issuer may not
disclose protected health information in a report of claim
information provided under this section if the health insurance
issuer is prohibited from disclosing that information under
another State or Federal law that imposes more stringent
privacy restrictions than those imposed under Federal law under
the HIPAA privacy regulations. To withhold information in
accordance with this subsection, the health insurance issuer
must--
``(A) notify the plan, plan sponsor, or plan
administrator requesting the report that information is
being withheld; and
``(B) provide to the plan, plan sponsor, or plan
administrator a list of categories of claim information
that the health insurance issuer has determined are
subject to the more stringent privacy restrictions
under another State or Federal law.
``(2) Protection.--A plan sponsor is entitled to receive
protected health information under subparagraph (E) and (F) of
subsection (b)(3) and subsection (d) only after an
appropriately authorized representative of the plan sponsor
makes to the health insurance issuer a certification
substantially similar to the following certification: `I hereby
certify that the plan documents comply with the requirements of
section 164.504(f)(2) of title 45, Code of Federal Regulations,
and that the plan sponsor will safeguard and limit the use and
disclosure of protected health information that the plan
sponsor may receive from the group health plan to perform the
plan administration functions.'.
``(3) Results.--A plan sponsor that does not provide the
certification required by paragraph (2) is not entitled to
receive the protected health information described by
subparagraphs (E) and (F) of subsection (b)(3) and subsection
(d), but is entitled to receive a report of claim information
that includes the information described by subparagraphs (A)
through (D) of subsection (b)(3).
``(4) Information.--In the case of a request made under
subsection (a) after the date of termination of coverage, the
report must contain all information available to the health
insurance issuer as of the date of the report that is
responsive to the request, including protected health
information, and including the information described by
subsection (b)(3), for the period described by subsection
(b)(2) preceding the date of termination of coverage or for the
entire policy period, whichever period is shorter.
Notwithstanding this subsection, the report may not include the
protected health information described by subparagraphs (E) and
(F) of subsection (b)(3) unless a certification has been
provided in accordance with paragraph (2).
``(d) Request for Additional Information.--
``(1) Review.--On receipt of the report required by
subsection (a), the plan, plan sponsor, or plan administrator
may review the report and, not later than the 10th day after
the date the report is received, may make a written request to
the health insurance issuer for additional information in
accordance with this subsection for specified individuals.
``(2) Request.--With respect to a request for additional
information concerning specified individuals for whom claims
information has been provided under subsection (b)(3)(E), the
health insurance issuer shall provide additional information on
the prognosis or recovery if available and, for individuals in
active case management, the most recent case management
information, including any future expected costs and treatment
plan, that relate to the claims for that individual.
``(3) Response.--The health insurance issuer must respond
to the request for additional information under this subsection
not later than the 15th day after the date of such request
unless the requesting plan, plan sponsor, or plan administrator
agrees to a request for additional time.
``(4) Limitation.--The health insurance issuer is not
required to produce the report described by this subsection
unless a certification has been provided in accordance with
subsection (c)(2).
``(5) Compliance with section does not create liability.--A
health insurance issuer that releases information, including
protected health information, in accordance with this
subsection has not violated a standard of care and is not
liable for civil damages resulting from, and is not subject to
criminal prosecution for, releasing that information.
``(e) Limitation on Preemption.--Nothing in this section is meant
to limit States from enacting additional laws in addition to the
provisions of this section, but not in lieu of such provisions.
``(f) Definitions.--In this section:
``(1) The terms `employer', `plan administrator', and `plan
sponsor' have the meanings given such terms in section 3 of the
Employee Retirement Income Security Act of 1974.
``(2) The term `HIPAA privacy regulations' has the meaning
given such term in section 1180(b)(3) of the Social Security
Act.
``(3) The term `protected health information' has the
meaning given such term under the HIPAA privacy regulations.''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on the date of the enactment of this Act.
TITLE VII--QUALITY
SEC. 701. PROHIBITION ON CERTAIN USES OF DATA OBTAINED FROM COMPARATIVE
EFFECTIVENESS RESEARCH OR FROM PATIENT-CENTERED OUTCOMES
RESEARCH; ACCOUNTING FOR PERSONALIZED MEDICINE AND
DIFFERENCES IN PATIENT TREATMENT RESPONSE.
(a) In General.--Notwithstanding any other provision of law, the
Secretary of Health and Human Services--
(1) shall not use data obtained from the conduct of
comparative effectiveness research or patient-centered outcomes
research, including such research that is conducted or
supported using funds appropriated under the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), to deny
coverage of an item or service under a Federal health care
program (as defined in section 1128B(f) of the Social Security
Act (42 U.S.C. 1320a-7b(f))); and
(2) shall ensure that comparative effectiveness research
and patient-centered outcomes research conducted or supported
by the Federal Government accounts for factors contributing to
differences in the treatment response and treatment preferences
of patients, including patient-reported outcomes, genomics and
personalized medicine, the unique needs of health disparity
populations, and indirect patient benefits.
(b) Consultation and Approval Required.--Nothing the Federal
Coordinating Council for Comparative Effectiveness Research finds can
be released in final form until after consultation with and approved by
relevant physician specialty organizations.
(c) Rule of Construction.--Nothing in this section shall be
construed as affecting the authority of the Commissioner of Food and
Drugs under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et
seq.) or the Public Health Service Act (42 U.S.C. 201 et seq.).
SEC. 702. ESTABLISHMENT OF PERFORMANCE-BASED QUALITY MEASURES.
Not later than January 1, 2016, the Secretary of Health and Human
Services shall submit to Congress a proposal for a formalized process
for the development of performance-based quality measures that could be
applied to physicians' services under the Medicare program under title
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). Such
proposal shall be in concert and agreement with the Physician
Consortium for Performance Improvement and shall only utilize measures
agreed upon by each physician specialty organization.
TITLE VIII--STATE TRANSPARENCY PLAN PORTAL
SEC. 801. PROVIDING INFORMATION ON HEALTH COVERAGE OPTIONS AND HEALTH
CARE PROVIDERS.
(a) State-Based Portal.--A State (by itself or jointly with other
States) may contract with a private entity 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.--
(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 employed 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 section;
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.
(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)).
TITLE IX--PATIENT FREEDOM OF CHOICE
SEC. 901. GUARANTEEING FREEDOM OF CHOICE AND CONTRACTING FOR PATIENTS
UNDER MEDICARE.
(a) In General.--Section 1802 of the Social Security Act (42 U.S.C.
1395a) is amended to read as follows:
``freedom of choice and contracting by patient guaranteed
``Sec. 1802. (a) Basic Freedom of Choice.--Any individual entitled
to insurance benefits under this title may obtain health services from
any institution, agency, or person qualified to participate under this
title if such institution, agency, or person undertakes to provide that
individual such services.
``(b) Freedom To Contract by Medicare Beneficiaries.--
``(1) In general.--Subject to the provisions of this
subsection, nothing in this title shall prohibit a Medicare
beneficiary from entering into a contract with an eligible
professional (whether or not the professional is a
participating or non-participating physician or practitioner)
for any item or service covered under this title.
``(2) Submission of claims.--Any Medicare beneficiary that
enters into a contract under this section with an eligible
professional shall be permitted to submit a claim for payment
under this title for services furnished by such professional,
and such payment shall be made in the amount that would
otherwise apply to such professional under this title except
that where such professional is considered to be non-
participating, payment shall be paid as if the professional
were participating. Payment made under this title for any item
or service provided under the contract shall not render the
professional a participating or non-participating physician or
practitioner, and as such, requirements of this title that may
otherwise apply to a participating or non-participating
physician or practitioner would not apply with respect to any
items or services furnished under the contract.
``(3) Beneficiary protections.--
``(A) In general.--Paragraph (1) shall not apply to
any contract unless--
``(i) the contract is in writing, is signed
by the Medicare beneficiary and the eligible
professional, and establishes all terms of the
contract (including specific payment for items
and services covered by the contract) before
any item or service is provided pursuant to the
contract, and the beneficiary shall be held
harmless for any subsequent payment charged for
an item or service in excess of the amount
established under the contract during the
period the contract is in effect;
``(ii) the contract contains the items
described in subparagraph (B); and
``(iii) the contract is not entered into at
a time when the Medicare beneficiary is facing
an emergency medical condition or urgent health
care situation.
``(B) Items required to be included in contract.--
Any contract to provide items and services to which
paragraph (1) applies shall clearly indicate to the
Medicare beneficiary that by signing such contract the
beneficiary--
``(i) agrees to be responsible for payment
to such eligible professional for such items or
services under the terms of and amounts
established under the contract;
``(ii) agrees to be responsible for
submitting claims under this title to the
Secretary, and to any other supplemental
insurance plan that may provide supplemental
insurance, for such items or services furnished
under the contract if such items or services
are covered by this title, unless otherwise
provided in the contract under subparagraph
(C)(i); and
``(iii) acknowledges that no limits or
other payment incentives that may otherwise
apply under this title (such as the limits
under subsection (g) of section 1848 or
incentives under subsections (a)(5), (m), (q),
and (p) of such section) shall apply to amounts
that may be charged, or paid to a beneficiary
for, such items or services.
Such contract shall also clearly indicate whether the
eligible professional is excluded from participation
under the Medicare program under section 1128.
``(C) Beneficiary elections under the contract.--
Any Medicare beneficiary that enters into a contract
under this section may elect to negotiate, as a term of
the contract, a provision under which--
``(i) the eligible professional shall file
claims on behalf of the beneficiary with the
Secretary and any supplemental insurance plan
for items or services furnished under the
contract if such items or services are covered
under this title or under the plan; and
``(ii) the beneficiary assigns payment to
the eligible professional for any claims filed
by, or on behalf of, the beneficiary with the
Secretary and any supplemental insurance plan
for items or services furnished under the
contract.
``(D) Exclusion of dual eligible individuals.--
Paragraph (1) shall not apply to any contract if a
beneficiary who is eligible for medical assistance
under title XIX is a party to the contract.
``(4) Limitation on actual charge and claim submission
requirement not applicable.--Section 1848(g) shall not apply
with respect to any item or service provided to a Medicare
beneficiary under a contract described in paragraph (1).
``(5) Construction.--Nothing in this section shall be
construed--
``(A) to prohibit any eligible professional from
maintaining an election and acting as a participating
or non-participating physician or practitioner with
respect to any patient not covered under a contract
established under this section; and
``(B) as changing the items and services for which
an eligible professional may bill under this title.
``(6) Definitions.--In this subsection:
``(A) Medicare beneficiary.--The term `Medicare
beneficiary' means an individual who is entitled to
benefits under part A or enrolled under part B.
``(B) Eligible professional.--The term `eligible
professional' has the meaning given such term in
section 1848(k)(3)(B).
``(C) Emergency medical condition.--The term
`emergency medical condition' means a medical condition
manifesting itself by acute symptoms of sufficient
severity (including severe pain) such that a prudent
layperson, with an average knowledge of health and
medicine, could reasonably expect the absence of
immediate medical attention to result in--
``(i) serious jeopardy to the health of the
individual or, in the case of a pregnant woman,
the health of the woman or her unborn child;
``(ii) serious impairment to bodily
functions; or
``(iii) serious dysfunction of any bodily
organ or part.
``(D) Urgent health care situation.--The term
`urgent health care situation' means services furnished
to an individual who requires services to be furnished
within 12 hours in order to avoid the likely onset of
an emergency medical condition.''.
SEC. 902. PREEMPTION OF STATE LAWS LIMITING CHARGES FOR ELIGIBLE
PROFESSIONAL SERVICES.
(a) In General.--No State may impose a limit on the amount of
charges for services, furnished by an eligible professional (as defined
in subsection (k)(3)(B) of section 1848 of the Social Security Act, 42
U.S.C. 1395w-4), for which payment is made under such section, and any
such limit is hereby preempted.
(b) State.--In this section, the term ``State'' includes the
District of Columbia, Puerto Rico, the Virgin Islands, Guam, and
American Samoa.
SEC. 903. HEALTH CARE PROVIDER LICENSURE CANNOT BE CONDITIONED ON
PARTICIPATION IN A HEALTH PLAN.
(a) In General.--The Secretary of Health and Human Services and any
State (as a condition of receiving Federal financial participation
under title XIX of the Social Security Act) may not require any health
care provider to participate in any health plan as a condition of
licensure of the provider in any State.
(b) Definitions.--In this section:
(1) Health plan.--The term ``health plan'' has the meaning
given such term in section 1171(5) of the Social Security Act
(42 U.S.C. 1320d(5)).
(2) Health care provider.--The term ``health care
provider'' means any person or entity that is required by State
or Federal laws or regulations to be licensed, registered, or
certified to provide health care services and is so licensed,
registered, or certified, or exempted from such requirement by
other statute or regulation.
(3) State.--The term ``State'' has the meaning given such
term for purposes of title XIX of the Social Security Act.
SEC. 904. BAD DEBT DEDUCTION FOR DOCTORS TO PARTIALLY OFFSET THE COST
OF PROVIDING UNCOMPENSATED CARE REQUIRED TO BE PROVIDED
UNDER AMENDMENTS MADE BY THE EMERGENCY MEDICAL TREATMENT
AND LABOR ACT.
(a) In General.--Section 166 of the Internal Revenue Code of 1986
(relating to bad debts) is amended by redesignating subsection (f) as
subsection (g) and by inserting after subsection (e) the following new
subsection:
``(f) Bad Debt Treatment for Doctors To Partially Offset Cost of
Providing Uncompensated Care Required To Be Provided.--
``(1) Amount of deduction.--
``(A) In general.--For purposes of subsection (a),
the basis for determining the amount of any deduction
for an eligible EMTALA debt shall be treated as being
equal to the Medicare payment amount.
``(B) Medicare payment amount.--For purposes of
subparagraph (A), the Medicare payment amount with
respect to an eligible EMTALA debt is the fee schedule
amount established under section 1848 of the Social
Security Act for the physicians' service (to which such
debt relates) as if the service were provided to an
individual enrolled under part B of title XVIII of such
Act.
``(2) Eligible emtala debt.--For purposes of this section,
the term `eligible EMTALA debt' means any debt if--
``(A) such debt arose as a result of physicians'
services--
``(i) which were performed in an EMTALA
hospital by a board-certified physician
(whether as part of medical screening or
necessary stabilizing treatment and whether as
an emergency department physician, as an on-
call physician, or otherwise), and
``(ii) which were required to be provided
under section 1867 of the Social Security Act
(42 U.S.C. 1395dd), and
``(B) such debt is owed--
``(i) to such physician, or
``(ii) to an entity if--
``(I) such entity is a corporation
and the sole shareholder of such
corporation is such physician, or
``(II) such entity is a partnership
and any deduction under this subsection
with respect to such debt is allocated
to such physician or to an entity
described in subclause (I).
``(3) Board-certified physician.--For purposes of this
subsection, the term `board-certified physician' means any
physician (as defined in section 1861(r) of the Social Security
Act (42 U.S.C. 1395x(r))) who is certified by the American
Board of Emergency Medicine or other appropriate medical
specialty board for the specialty in which the physician
practices, or who meets comparable requirements, as identified
by the Secretary of the Treasury in consultation with Secretary
of Health and Human Services.
``(4) Other definitions.--For purposes of this subsection--
``(A) EMTALA hospital.--The term `EMTALA hospital'
means any hospital having a hospital emergency
department which is required to comply with section
1867 of the Social Security Act (42 U.S.C. 1395dd)
(relating to examination and treatment for emergency
medical conditions and women in labor).
``(B) Physicians' services.--The term `physicians'
services' has the meaning given such term in section
1861(q) of the Social Security Act (42 U.S.C.
1395x(q)).''.
(b) Effective Date.--The amendments made by this section shall
apply to debts arising from services performed in taxable years
beginning after the date of the enactment of this Act.
SEC. 905. RIGHT OF CONTRACT WITH HEALTH CARE PROVIDERS.
(a) In General.--The Secretary of Health and Human Services shall
not preclude an enrollee, participant, or beneficiary in a health
benefits plan from entering into any contract or arrangement for health
care with any health care provider.
(b) Health Benefits Plan Defined.--
(1) In general.--In this section, subject to paragraph (2),
the term ``health benefits plan'' means any of the following:
(A) Group health plan (as defined in section 2791
of the Public Health Service Act).
(B) Health insurance coverage (as defined in
section 2791 of such Act).
(C) A health benefits plan under chapter 89 of
title 5, United States Code.
(2) Exclusion of medicaid and tricare.--Such term does not
include a health plan participating in--
(A) the Medicaid program under title XIX of the
Social Security Act; or
(B) the TRICARE program under chapter 55 of title
10, United States Code.
(c) Health Care Provider Defined.--In this section, the term
``health care provider'' means--
(1) a physician, as defined in paragraphs (1), (2), (3),
and (4) of section 1861(r) of the Social Security Act (42
U.S.C. 1395x(r)); and
(2) a health care practitioner described in section
1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C)).
TITLE X--QUALITY HEALTH CARE COALITION
SEC. 1001. QUALITY HEALTH CARE COALITION.
(a) Application of the Federal Antitrust Laws to Health Care
Professionals Negotiating With Health Plans.--
(1) In general.--Any health care professionals who are
engaged in negotiations with a health plan regarding the terms
of any contract under which the professionals provide health
care items or services for which benefits are provided under
such plan shall, in connection with such negotiations, be
exempt from the Federal antitrust laws.
(2) Limitation.--
(A) No new right for collective cessation of
service.--The exemption provided in paragraph (1) shall
not confer any new right to participate in any
collective cessation of service to patients not already
permitted by existing law.
(B) No change in national labor relations act.--
This section applies only to health care professionals
excluded from the National Labor Relations Act. Nothing
in this section shall be construed as changing or
amending any provision of the National Labor Relations
Act, or as affecting the status of any group of persons
under that Act.
(3) No application to federal programs.--Nothing in this
section shall apply to negotiations between health care
professionals and health plans pertaining to benefits provided
under any of the following:
(A) The Medicare Program under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.).
(B) The Medicaid program under title XIX of the
Social Security Act (42 U.S.C. 1396 et seq.).
(C) The SCHIP program under title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.).
(D) Chapter 55 of title 10, United States Code
(relating to medical and dental care for members of the
uniformed services).
(E) Chapter 17 of title 38, United States Code
(relating to Veterans' medical care).
(F) Chapter 89 of title 5, United States Code
(relating to the Federal employees' health benefits
program).
(G) The Indian Health Care Improvement Act (25
U.S.C. 1601 et seq.).
(b) Definitions.--In this section, the following definitions shall
apply:
(1) Antitrust laws.--The term ``antitrust laws''--
(A) has the meaning given it in subsection (a) of
the first section of the Clayton Act (15 U.S.C. 12(a)),
except that such term includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent such
section applies to unfair methods of competition; and
(B) includes any State law similar to the laws
referred to in subparagraph (A).
(2) Group health plan.--The term ``group health plan''
means an employee welfare benefit plan to the extent that the
plan provides medical care (including items and services paid
for as medical care) to employees or their dependents (as
defined under the terms of the plan) directly or through
insurance, reimbursement, or otherwise.
(3) Group health plan, health insurance issuer.--The terms
``group health plan'' and ``health insurance issuer'' include a
third-party administrator or other person acting for or on
behalf of such plan or issuer.
(4) Health care services.--The term ``health care
services'' means any services for which payment may be made
under a health plan, including services related to the delivery
or administration of such services.
(5) Health care professional.--The term ``health care
professional'' means any individual or entity that provides
health care items or services, treatment, assistance with
activities of daily living, or medications to patients and who,
to the extent required by State or Federal law, possesses
specialized training that confers expertise in the provision of
such items or services, treatment, assistance, or medications.
(6) Health insurance coverage.--The term ``health insurance
coverage'' means benefits consisting of medical care (provided
directly, through insurance or reimbursement, or otherwise and
including items and services paid for as medical care) under
any hospital or medical service policy or certificate, hospital
or medical service plan contract, or health maintenance
organization contract offered by a health insurance issuer.
(7) Health insurance issuer.--The term ``health insurance
issuer'' means an insurance company, insurance service, or
insurance organization (including a health maintenance
organization) that is licensed to engage in the business of
insurance in a State and that is subject to State law
regulating insurance. Such term does not include a group health
plan.
(8) Health maintenance organization.--The term ``health
maintenance organization'' means--
(A) a federally qualified health maintenance
organization (as defined in section 1301(a) of the
Public Health Service Act (42 U.S.C. 300e(a)));
(B) an organization recognized under State law as a
health maintenance organization; or
(C) a similar organization regulated under State
law for solvency in the same manner and to the same
extent as such a health maintenance organization.
(9) Health plan.--The term ``health plan'' means a group
health plan or a health insurance issuer that is offering
health insurance coverage.
(10) Medical care.--The term ``medical care'' means amounts
paid for--
(A) the diagnosis, cure, mitigation, treatment, or
prevention of disease, or amounts paid for the purpose
of affecting any structure or function of the body; and
(B) transportation primarily for and essential to
receiving items and services referred to in
subparagraph (A).
(11) Person.--The term ``person'' includes a State or unit
of local government.
(12) State.--The term ``State'' includes the several
States, the District of Columbia, Puerto Rico, the Virgin
Islands of the United States, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
(c) Effective Date.--This section shall take effect on the date of
the enactment of this Act and shall not apply with respect to conduct
occurring before such date.
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Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on the Constitution and Civil Justice.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Indian, Insular and Alaska Native Affairs.
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.