[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 277 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 277
To repeal the Patient Protection and Affordable Care Act and related
reconciliation provisions, to promote patient-centered health care, to
provide for the creation of a safe harbor for defendants in medical
malpractice actions who demonstrate adherence to clinical practice
guidelines, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 4, 2017
Mr. Roe of Tennessee (for himself, Mr. Walker, Mr. Rokita, Mr. Gosar,
Mr. Flores, Mr. Barr, Mr. Carter of Georgia, Mr. Austin Scott of
Georgia, Mr. Duncan of Tennessee, Mr. Hill, Mr. Chabot, Mrs. Blackburn,
Mr. Rouzer, Mr. Culberson, Mrs. Hartzler, Mr. Babin, Mr. Bucshon, and
Mr. Scalise) introduced the following bill; which was referred to the
Committee on Energy and Commerce, and in addition to the Committees on
the Budget, Ways and Means, Education and the Workforce, the Judiciary,
Natural Resources, House Administration, Rules, Appropriations, and
Veterans' Affairs, 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 repeal the Patient Protection and Affordable Care Act and related
reconciliation provisions, to promote patient-centered health care, to
provide for the creation of a safe harbor for defendants in medical
malpractice actions who demonstrate adherence to clinical practice
guidelines, 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 ``American Health
Care Reform Act of 2017''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--REPEAL OF OBAMACARE
Sec. 101. Repeal of PPACA and health care-related provisions in the
Health Care and Education Reconciliation
Act of 2010.
Sec. 102. Budgetary effects.
TITLE II--INCREASING ACCESS TO PORTABLE, AFFORDABLE HEALTH INSURANCE
Sec. 200. Amendment of 1986 Code.
Subtitle A--Standard Deduction for Health Insurance
Sec. 201. Standard deduction for health insurance.
Sec. 202. Changes to existing tax preferences for medical coverage and
costs for individuals eligible for standard
deduction for health insurance.
Sec. 203. Exclusion of standard deduction for health insurance from
employment taxes.
Sec. 204. Information reporting.
Sec. 205. Election to disregard inclusion of contributions by employer
to accident or health plan.
Subtitle B--Enhancement of Health Savings Accounts
Sec. 221. Allow both spouses to make catch-up contributions to the same
HSA account.
Sec. 222. Provisions relating to Medicare.
Sec. 223. Individuals eligible for veterans benefits for a service-
connected disability.
Sec. 224. Individuals eligible for Indian Health Service assistance.
Sec. 225. Individuals eligible for TRICARE coverage.
Sec. 226. FSA and HRA interaction with HSAs.
Sec. 227. Purchase of health insurance from HSA account.
Sec. 228. Special rule for certain medical expenses incurred before
establishment of account.
Sec. 229. Preventive care prescription drug clarification.
Sec. 230. Equivalent bankruptcy protections for health savings accounts
as retirement funds.
Sec. 231. Administrative error correction before due date of return.
Sec. 232. Reauthorization of Medicaid health opportunity accounts.
Sec. 233. Members of health care sharing ministries eligible to
establish health savings accounts.
Sec. 234. High deductible health plans renamed HSA qualified plans.
Sec. 235. Treatment of direct primary care service arrangements.
Sec. 236. Certain exercise equipment and physical fitness programs
treated as medical care.
Sec. 237. Certain nutritional and dietary supplements to be treated as
medical care.
Sec. 238. Certain provider fees to be treated as medical care.
Sec. 239. Increase the maximum contribution limit to an HSA to match
deductible and out-of-pocket expense
limitation.
Sec. 240. Child health savings account.
Sec. 241. Allowing minimum distributions from tax-deferred retirement
accounts to be deposited into HSAs.
Sec. 242. Distributions for abortion expenses from health savings
accounts included in gross income.
Subtitle C--Enhanced Wellness Incentives
Sec. 251. Providing financial incentives for treatment compliance.
TITLE III--IMPROVING ACCESS TO INSURANCE FOR VULNERABLE AMERICANS
Subtitle A--Eliminating Barriers to Insurance Coverage
Sec. 301. Elimination of certain requirements for guaranteed
availability in individual market.
Subtitle B--Ensuring Coverage for Individuals With Preexisting
Conditions and Multiple Health Care Needs Through High-Risk Pools
Sec. 311. Improvement of high-risk pools.
TITLE IV--ENCOURAGING A MORE COMPETITIVE HEALTH CARE MARKET
Subtitle A--Expanding Patient Choice
Sec. 401. Cooperative governing of individual health insurance
coverage.
Subtitle B--McCarran-Ferguson Reform
Sec. 411. Restoring the application of antitrust laws to health sector
insurers.
Subtitle C--Medicare Price Transparency
Sec. 421. Public availability of Medicare claims data.
Subtitle D--State Transparency Portals
Sec. 431. Providing information on health coverage options and health
care providers.
Subtitle E--Protecting the Doctor-Patient Relationship
Sec. 441. Rule of construction.
Sec. 442. Repeal of Federal Coordinating Council for Comparative
Effectiveness Research.
Subtitle F--Establishing Association Health Plans
Sec. 451. Rules governing association health plans.
Sec. 452. Clarification of treatment of single employer arrangements.
Sec. 453. Enforcement provisions relating to association health plans.
Sec. 454. Cooperation between Federal and State authorities.
Sec. 455. Effective date and transitional and other rules.
Subtitle G--Greater Choice for Veterans
Sec. 461. Removing barriers to health care choice for Category 1
veterans and medal of honor recipients.
TITLE V--REFORMING MEDICAL LIABILITY LAW
Sec. 501. Requirements for selection of clinical practice guidelines.
Sec. 502. Development.
Sec. 503. No liability for guideline producers.
Sec. 504. Internet publication of guidelines.
Sec. 505. State flexibility and protection of States' rights.
Sec. 506. Federal cause of action.
Sec. 507. Right of removal.
Sec. 508. Mandatory review by independent medical panel.
Sec. 509. Definitions.
TITLE VI--OTHER PROVISIONS
Sec. 601. Respecting human life.
Sec. 602. Offsets.
TITLE I--REPEAL OF OBAMACARE
SEC. 101. REPEAL OF PPACA AND HEALTH CARE-RELATED PROVISIONS IN THE
HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010.
(a) PPACA.--Effective on January 1, 2018, the Patient Protection
and Affordable Care Act (Public Law 111-148) is repealed, and the
provisions of law amended or repealed by such Act are restored or
revived as if such Act had not been enacted.
(b) Health Care-Related Provisions in the Health Care and Education
Reconciliation Act of 2010.--Effective on January 1, 2018, title I and
subtitle B of title II of the Health Care and Education Reconciliation
Act of 2010 (Public Law 111-152) are repealed, and the provisions of
law amended or repealed by such title or subtitle, respectively, are
restored or revived as if such title and subtitle had not been enacted.
SEC. 102. BUDGETARY EFFECTS.
The budgetary effects of this Act shall not be entered on either
PAYGO scorecard maintained pursuant to section 4(d) of the Statutory
Pay-As-You-Go Act of 2010.
TITLE II--INCREASING ACCESS TO PORTABLE, AFFORDABLE HEALTH INSURANCE
SEC. 200. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Internal Revenue Code of
1986.
Subtitle A--Standard Deduction for Health Insurance
SEC. 201. STANDARD DEDUCTION FOR HEALTH INSURANCE.
(a) In General.--Part VII of subchapter B of chapter 1 is amended
by redesignating section 224 as section 225 and by inserting after
section 223 the following new section:
``SEC. 224. STANDARD DEDUCTION FOR HEALTH INSURANCE.
``(a) Deduction Allowed.--In the case of an individual, there shall
be allowed as a deduction to the taxpayer for the taxable year the
standard deduction for health insurance.
``(b) Standard Deduction for Health Insurance.--For purposes of
this section--
``(1) In general.--The term `standard deduction for health
insurance' means the sum of the monthly limitations for months
during the taxable year.
``(2) Monthly limitation.--
``(A) In general.--The monthly limitation for any
month is \1/12\ of--
``(i) $20,500, in the case of a taxpayer
who is allowed a deduction under section 151
for more than one individual who for such month
is an eligible individual, and
``(ii) $7,500, in the case of a taxpayer
who is allowed a deduction under section 151
for only one individual who for such month is
an eligible individual.
``(B) Cost-of-living adjustment.--
``(i) In general.--In the case of taxable
years beginning in calendar years after the
first calendar year to which this section
applies, the dollar amounts under subparagraph
(A) shall be increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
such taxable year begins, determined by
substituting `the calendar year
preceding the first calendar year to
which section 224 applies' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--If any increase under
clause (i) is not a multiple of $50, such
increase shall be rounded to the nearest
multiple of $50.
``(3) Yearly limitation.--The amount allowed as a deduction
under subsection (a) for any taxable year shall not exceed the
taxpayer's earned income (as defined in section 32(c)(2)) for
such taxable year.
``(c) Limitations and Special Rules Relating to Standard
Deduction.--For purposes of this section--
``(1) Special rule for married individuals filing
separately.--In the case of a married individual who files a
separate return for the taxable year, the deduction allowed
under subsection (a) shall be equal to one-half of the amount
which would otherwise be determined under subsection (a) if
such individual filed a joint return for the taxable year.
``(2) Denial of deduction to dependents.--No deduction
shall be allowed under this section to any individual 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.
``(3) Coordination with other health tax incentives.--
``(A) Denial of deduction if health insurance costs
credit allowed.--No deduction shall be allowed under
this section to any taxpayer if a credit is allowed to
the taxpayer under section 35 for the taxable year.
``(B) Reduction for insurance purchased with msa or
hsa funds.--The amount allowed as a deduction under
subsection (a) for the taxable year shall be reduced by
the aggregate amount--
``(i) paid during the taxable year from an
Archer MSA to which section 220(d)(2)(B)(ii)
(other than subclause (II) thereof) applies,
and
``(ii) paid during the taxable year from a
health savings account to which section
223(d)(2)(C) (other than clause (ii) thereof)
applies.
``(4) Special rule for divorced parents, etc.--
Notwithstanding subsection (b)(1), an individual who is a child
may be taken into account on the return of the parent other
than the parent for whom a deduction with respect to the child
is allowed under section 151 for a taxable year beginning in a
calendar year if--
``(A) the parent for whom the deduction under
section 151 is allowed for a taxable year beginning in
such calendar year signs a written declaration (in such
manner and form as the Secretary may by regulations
prescribe) that such parent will not claim the
deduction allowable under this section with respect to
the child for taxable years beginning in such calendar
year, and
``(B) the parent for whom the deduction under
section 151 is not allowed attaches such written
declaration to the parent's return for the taxable year
beginning in such calendar year.
``(d) Other Definitions.--For purposes of this section--
``(1) Eligible individual.--
``(A) In general.--The term `eligible individual'
means, with respect to any month, an individual who is
covered under a qualified health plan as of the 1st day
of such month.
``(B) Coverage under medicare, medicaid, schip,
tricare, and grandfathered employer coverage.--The term
`eligible individual' shall not include any individual
who for any month is--
``(i) entitled to benefits under part A of
title XVIII of the Social Security Act or
enrolled under part B of such title,
``(ii) enrolled in the program under title
XIX or XXI of such Act (other than under
section 1928 of such Act),
``(iii) receiving benefits (other than
under continuation coverage under section
4980B) which constitute medical care from an
employer--
``(I) from whom such individual is
separated from service at the time of
receipt of such benefits, and
``(II) after such separation, if
such benefits began before January 1,
2018, unless such individual is also
covered by a qualified health plan as
of the 1st day of such month, or
``(iv) entitled to receive benefits under
chapter 55 of title 10, United States Code.
``(C) Identification requirements.--The term
`eligible individual' shall not include any individual
for any month unless the policy number associated with
coverage under the qualified health plan and the TIN of
each eligible individual covered under such coverage
for such month is included on the return for the
taxable year in which such month occurs.
``(2) Qualified health plan.--
``(A) In general.--The term `qualified health plan'
means a health plan (within the meaning of section
223(c)(2), without regard to subparagraph (A)(i)
thereof) which, under regulations prescribed by the
Secretary, meets the following requirements:
``(i) The plan has coverage for inpatient
and outpatient care, emergency benefits, and
physician care.
``(ii) The plan has coverage which
meaningfully limits individual economic
exposure to extraordinary medical expenses
``(B) Exclusion of certain plans.--The term
`qualified health plan' does not include--
``(i) a health plan if substantially all of
its coverage is coverage described in section
223(c)(1)(B),
``(ii) any program or benefits referred to
in clause (i), (ii), or (iii) of paragraph
(1)(B), and
``(iii) a Medicare supplemental policy (as
defined in section 1882 of the Social Security
Act).
``(e) Regulations.--The Secretary may prescribe such regulations as
may be necessary to carry out this section.''.
(b) Deduction Allowed Whether or Not Individual Itemizes Other
Deductions.--Subsection (a) of section 62 is amended by inserting
before the last sentence at the end the following new paragraph:
``(22) Standard deduction for health insurance.--The
deduction allowed by section 224.''.
(c) Election To Take Health Insurance Costs Credit.--Section 35(g)
is amended by redesignating paragraphs (9), (10), and (11) as
paragraphs (10), (11), and (12), respectively, and by inserting after
paragraph (8) the following new paragraph:
``(9) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable year.''.
(d) Clerical Amendment.--The table of sections for part VII of
subchapter B of chapter 1 is amended by striking the item relating to
section 224 and adding at the end the following new items:
``Sec. 224. Standard deduction for health insurance.
``Sec. 225. Cross reference.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
SEC. 202. CHANGES TO EXISTING TAX PREFERENCES FOR MEDICAL COVERAGE AND
COSTS FOR INDIVIDUALS ELIGIBLE FOR STANDARD DEDUCTION FOR
HEALTH INSURANCE.
(a) Exclusion for Contributions by Employer to Accident and Health
Plans.--
(1) In general.--Section 106 is amended by adding at the
end the following new subsection:
``(g) Subsections (a) and (c) Apply Only to Individuals Covered by
Medicare, Medicaid, SCHIP, TRICARE, or Grandfathered Employer Plans.--
``(1) In general.--Except as provided in paragraph (2),
subsections (a) and (c) shall not apply for any taxable year
with respect to which a deduction under section 224 is
allowable.
``(2) Exception for individuals covered by medicare,
medicaid, schip, or grandfathered employer plans.--Paragraph
(1) shall not apply to an individual for any taxable year if
such individual is not an eligible individual (as defined in
section 224(d)(1)) for any month during such taxable year by
reason of coverage described in section 224(d)(1)(B).''.
(2) Conforming amendments.--
(A) Section 106(b)(1) is amended--
(i) by inserting ``gross income does not
include'' before ``amounts contributed'', and
(ii) by striking ``shall be treated as
employer-provided coverage for medical expenses
under an accident or health plan''.
(B) Section 106(d)(1) is amended--
(i) by inserting ``gross income does not
include'' before ``amounts contributed'', and
(ii) by striking ``shall be treated as
employer-provided coverage for medical expenses
under an accident or health plan''.
(b) Termination of Deduction for Health Insurance Costs of Self-
Employed Individuals.--Subsection (l) of section 162 is amended by
adding at the end the following new paragraph:
``(6) Termination.--This subsection shall not apply to
taxable years with respect to which a deduction under section
224 is allowable.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
SEC. 203. EXCLUSION OF STANDARD DEDUCTION FOR HEALTH INSURANCE FROM
EMPLOYMENT TAXES.
(a) In General.--Chapter 25 is amended by adding at the end the
following new section:
``SEC. 3512. EXCLUSION OF STANDARD DEDUCTION FROM EMPLOYMENT TAXES.
``(a) In General.--For purposes of chapters 21, 22, and 23, each of
the following amounts for any period (determined without regard to this
section) shall be reduced by the portion of the standard deduction for
health insurance (as defined in section 224) allocable to the period:
``(1) The amount of wages determined under section 3121(a).
``(2) The amount of compensation determined under section
3231(e).
``(3) The amount of wages determined under section 3306(b).
``(b) Determination of Standard Deduction Allocable to a Period.--
For purposes of subsection (a)--
``(1) In general.--The determination of the portion of the
standard deduction for health insurance allocable to a period
shall be made on the basis of a qualified certificate of
eligible coverage furnished by the employee to the employer.
``(2) Qualified certificate of eligible coverage.--The term
`qualified certificate of eligible coverage' means a statement
of eligibility for the deduction allowable under section 224
which contains such information, is in such form, and is
provided at such times, as the Secretary may prescribe.
``(3) Only 1 certificate in effect at a time.--Except as
provided by the Secretary, an employee may have only 1
qualified certificate of eligible coverage in effect for any
period.
``(4) Election.--An employee may elect not to have this
section apply for any period for purposes of chapter 21 or 22.
``(c) Reconciliation of Erroneous Payments To Be Made at Employee
Level.--
``(1) In general.--If the application of this subsection
results in an incorrect amount being treated as wages or
compensation for purposes of chapter 21, 22, or 23, whichever
is applicable, with respect to any employee for one or more
periods ending within a taxable year of the employee--
``(A) in the case of an aggregate overpayment of
the taxes imposed by any such chapter for all such
periods, there shall be allowed as a credit against the
tax imposed by chapter 1 for such taxable year on such
employee an amount equal to the amount of such
overpayment, and
``(B) in the case of an aggregate underpayment of
the taxes imposed by any such chapter for all such
periods, the employee shall be liable for payment of
the entire amount of such underpayment.
``(2) Credits treated as refundable.--For purposes of this
title, any credit determined under paragraph (1)(A) or
subsection (d)(2) shall be treated as if it were a credit
allowed under subpart C of part IV of subchapter A of chapter
1.
``(3) Rules for reporting and collection of tax.--Any tax
required to be paid by an employee under paragraph (1)(B) shall
be included with the employee's return of Federal income tax
for the taxable year.
``(4) Secretarial authority.--The Secretary shall prescribe
such rules as may be necessary to carry out the provisions of
this subsection.''.
(b) Self-Employment Income.--Section 1402 is amended by adding at
the end the following:
``(m) Standard Deduction for Health Insurance.--For purposes of
this chapter--
``(1) In general.--The self-employment income of a taxpayer
for any period (determined without regard to this subsection)
shall be reduced by the excess (if any) of--
``(A) the portion of the standard deduction for
health insurance (as defined in section 224) allocable
to the period, over
``(B) the amount of any reduction in wages or
compensation for such period under section 3512.
``(2) Determination of standard deduction allocable to a
period.--For purposes of paragraph (1), the portion of the
standard deduction allocable to any period shall be determined
in a manner similar to the manner under section 3512.''.
(c) Conforming Amendments.--
(1) Section 3121(a)(2) is amended by inserting ``which is
excludable from gross income under section 105 or 106'' after
``such payment)''.
(2) Subsection (a) of section 209 of the Social Security
Act (42 U.S.C. 409) is amended by striking ``or'' at the end of
paragraph (19), by striking the period at the end of paragraph
(20) and inserting ``; or'', and by inserting after paragraph
(20) the following new paragraph:
``(21) any amount excluded from wages under section 3512(a)
of the Internal Revenue Code of 1986 (relating to exclusion of
standard deduction from employment taxes).''.
(3) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``, or the credit under section 3512(c)(2)
of such Code'' before the period at the end.
(4) Section 209(k)(2) of the Social Security Act (42 U.S.C.
409(k)(2)) is amended by redesignating subparagraphs (C) and
(D) as subparagraphs (D) and (E), respectively, and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) by disregarding the exclusion from wages in
subsection (a)(21),''.
(5) The table of sections for chapter 25 is amended by
adding at the end the following new item:
``Sec. 3512. Exclusion of standard deduction from employment taxes.''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to remuneration
paid or accrued for periods on or after December 31, 2017.
(2) Reconciliation and self-employed.--Sections 3512(c) and
(d)(2) of the Internal Revenue Code of 1986 (as added by
subsection (a)), and the amendments made by subsection (b),
shall apply to taxable years beginning after December 31, 2017.
SEC. 204. INFORMATION REPORTING.
(a) Health Plan Providers.--Subpart B of part III of subchapter A
of chapter 61 is amended by adding at the end the following new
section:
``SEC. 6050X. COVERAGE UNDER QUALIFIED HEALTH PLAN.
``(a) In General.--Every person providing coverage under a
qualified health plan (as defined in section 224(d)(2)) during a
calendar year shall, on or before January 31 of the succeeding year,
make a return described in subsection (b) with respect to each
individual who is covered by such person under a qualified health plan
for any month during the calendar year.
``(b) Return.--A return is described in this subsection if such
return--
``(1) is in such form as the Secretary prescribes, and
``(2) contains--
``(A) the name of the person providing coverage
under the qualified health plan,
``(B) the name, address, and TIN of the individual
covered by the plan,
``(C) if such individual is the owner of the policy
under which such plan is provided, the name, address,
and TIN of each other individual covered by such policy
and the relationship of each such individual to such
owner, and
``(D) the specific months of the year for which
each individual referred to in subparagraph (B) is, as
of the first day of each such month, covered by such
plan.
``(c) Statement To Be Furnished 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 under subsection (b)(2)(A) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such return,
and
``(2) the information described in subsection (b)(2).
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year for which the return under subsection (a) was required to be
made.''.
(b) Employers.--Subsection (a) of section 6051 is amended by
striking ``and'' at the end of paragraph (13), by striking the period
at the end of paragraph (14) and inserting ``, and'', and by inserting
after paragraph (14) the following new paragraph:
``(15) the value (determined under section 4980B(f)(4)) of
employer-provided coverage for each month under an accident or
health plan and the category of such coverage for purposes of
section 6116.''.
(c) Application to Retirees.--Subsection (a) of section 6051 is
amended by adding at the end the following: ``In the case of a retiree,
this section shall (to the extent established by the Secretary by
regulation) apply only with respect to paragraph (15).''.
(d) Assessable Penalties.--
(1) Subparagraph (B) of section 6724(d)(1) is amended by
striking ``or'' at the end of clause (xxiv), by striking
``and'' at the end of clause (xxv) and inserting ``or'', and by
adding at the end the following new clause:
``(xxvi) section 6050X (relating to returns
relating to payments for qualified health
insurance), and''.
(2) Paragraph (2) of section 6724(d) is amended by striking
``or'' at the end of subparagraph (GG), by striking the period
at the end of subparagraph (HH) and inserting ``, or'' and by
adding at the end the following new subparagraph:
``(II) section 6050X(d) (relating to returns
relating to payments for qualified health
insurance).''.
(e) Clerical Amendment.--The table of sections for such subpart B
is amended by adding at the end the following new item:
``Sec. 6050X. Coverage under qualified health plan.''.
(f) Effective Date.--The amendments made by this section shall
apply to years beginning after December 31, 2017.
SEC. 205. ELECTION TO DISREGARD INCLUSION OF CONTRIBUTIONS BY EMPLOYER
TO ACCIDENT OR HEALTH PLAN.
(a) In General.--Subparagraph (B) of section 32(c)(2) is amended by
striking ``and'' at the end of clause (v), by striking the period at
the end of clause (vi) and inserting ``, and'', and by adding at the
end the following new clause:
``(vii) a taxpayer may elect to exclude
from earned income amounts that would have been
excluded from gross income under section 106
but for subsection (g) thereof.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to taxable years beginning after December 31, 2017.
Subtitle B--Enhancement of Health Savings Accounts
SEC. 221. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CONTRIBUTIONS TO THE SAME
HSA ACCOUNT.
(a) In General.--Paragraph (3) of section 223(b) 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 200 percent
of the amount otherwise determined under subparagraph
(B).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2017.
SEC. 222. PROVISIONS RELATING TO MEDICARE.
(a) Individuals Over Age 65 Only Enrolled in Medicare Part A.--
Paragraph (7) of section 223(b) is amended by adding at the end the
following: ``This 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.--Subsection (b) of section 138 is amended
by striking paragraph (2) and by redesignating paragraphs (3)
and (4) as paragraphs (2) and (3), respectively.
(2) Conforming amendment.--Paragraph (4) of section 138(c)
is amended by striking ``and paragraph (2)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
SEC. 223. INDIVIDUALS ELIGIBLE FOR VETERANS BENEFITS FOR A SERVICE-
CONNECTED DISABILITY.
(a) In General.--Paragraph (1) of section 223(c) 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 December 31, 2017.
SEC. 224. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERVICE ASSISTANCE.
(a) In General.--Paragraph (1) of section 223(c), as amended by
this Act, is amended by adding at the end the following new
subparagraph:
``(D) Special rule for individuals 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 December 31, 2017.
SEC. 225. INDIVIDUALS ELIGIBLE FOR TRICARE COVERAGE.
(a) In General.--Paragraph (1) of section 223(c), as amended by
this Act, is amended by adding at the end the following new
subparagraph:
``(E) Special rule for individuals 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 chapter 55 of title 10, United States Code, under
TRICARE Extra or TRICARE Standard and such individual
is not enrolled in TRICARE Prime.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2017.
SEC. 226. FSA AND HRA INTERACTION WITH HSAS.
(a) Eligible Individuals Include FSA and HRA Participants.--
Subparagraph (B) of section 223(c)(1) is amended--
(1) by striking ``and'' at the end of clause (ii),
(2) by striking the period at the end of clause (iii) and
inserting ``, and'', and
(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.--Paragraph (1) of section 106(e) is amended to read as
follows:
``(1) In general.--A plan shall not fail to be treated as a
health flexible spending arrangement under this section,
section 105, or section 125, or as a health reimbursement
arrangement under this section or section 105, merely because
such plan provides for a qualified HSA distribution.''.
(c) FSA Balances at Year End Shall Not Forfeit.--Paragraph (2) of
section 125(d) 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.--
Paragraph (2) of section 106(e) is amended to read as follows:
``(2) Qualified hsa distribution.--
``(A) In general.--The term `qualified HSA
distribution' means a distribution from a health
flexible spending arrangement or health reimbursement
arrangement to the extent that such distribution does
not exceed the lesser of--
``(i) the balance in such arrangement as of
the date of such distribution, or
``(ii) the amount determined under
subparagraph (B).
Such term shall not include more than 1 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) $2,250 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) $4,500 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.--Subsection (e) of section 106 is
amended--
(1) by striking paragraph (3) and redesignating paragraphs
(4) and (5) as paragraphs (3) and (4), respectively, and
(2) by striking subparagraph (A) of paragraph (3), as so
redesignated, and redesignating subparagraphs (B) and (C) of
such paragraph as subparagraphs (A) and (B) thereof,
respectively.
(f) Limited Purpose FSAs and HRAs.--Subsection (e) of section 106,
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) Distribution Amounts Adjusted for Cost-of-Living.--Subsection
(e) of section 106, as amended by this section, is amended by adding at
the end the following new paragraph:
``(6) Cost-of-living adjustment.--
``(A) In general.--In the case of any taxable year
beginning in a calendar year after 2017, each of the
dollar amounts in paragraph (2)(B)(iii) shall be
increased by an amount equal to such dollar amount,
multiplied by the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
such taxable year begins by substituting `calendar year
2016' for `calendar year 1992' in subparagraph (B)
thereof.
``(B) Rounding.--If any increase under paragraph
(1) is not a multiple of $50, such increase shall be
rounded to the nearest multiple of $50.''.
(h) Disclaimer of Disqualifying Coverage.--Subparagraph (B) of
section 223(c)(1), as amended by this section, is amended--
(1) by striking ``and'' at the end of clause (iii),
(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.''.
(i) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
SEC. 227. PURCHASE OF HEALTH INSURANCE FROM HSA ACCOUNT.
(a) In General.--Paragraph (2) of section 223(d) is amended to read
as follows:
``(2) Qualified medical expenses.--
``(A) In general.--The term `qualified medical
expenses' means, with respect to an account
beneficiary, amounts paid by such beneficiary for
medical care (as defined in section 213(d)) for any
individual covered by a high deductible health plan of
the account beneficiary, but only to the extent such
amounts are not compensated for by insurance or
otherwise.
``(B) Health insurance may not be purchased from
account.--Except as provided in subparagraph (C),
subparagraph (A) shall not apply to any payment for
insurance.
``(C) Exceptions.--Subparagraph (B) shall not apply
to any expense for coverage under--
``(i) a health plan during any period of
continuation coverage required under any
Federal law,
``(ii) a qualified long-term care insurance
contract (as defined in section 7702B(b)),
``(iii) a health plan during any period in
which the individual is receiving unemployment
compensation under any Federal or State law,
``(iv) a high deductible health plan, or
``(v) any health insurance under title
XVIII of the Social Security Act, other than a
Medicare supplemental policy (as defined in
section 1882 of such Act).''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to insurance purchased after the date of the enactment of
this Act in taxable years beginning after December 31, 2017.
SEC. 228. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE
ESTABLISHMENT OF ACCOUNT.
(a) In General.--Paragraph (2) of section 223(d), as amended by
this Act, is amended by adding at the end the following new
subparagraph:
``(D) Certain medical expenses 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 December 31, 2017.
SEC. 229. PREVENTIVE CARE PRESCRIPTION DRUG CLARIFICATION.
(a) Clarify Use of Drugs in Preventive Care.--Subparagraph (C) of
section 223(c)(2) 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. 230. 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. 231. ADMINISTRATIVE ERROR CORRECTION BEFORE DUE DATE OF RETURN.
(a) In General.--Paragraph (4) of section 223(f) is amended by
adding at the end the following new 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. 232. REAUTHORIZATION OF MEDICAID HEALTH OPPORTUNITY ACCOUNTS.
(a) In General.--Section 1938 of the Social Security Act (42 U.S.C.
1396u-8) is amended--
(1) in subsection (a)--
(A) by striking paragraph (2) and inserting the
following:
``(2) Initial demonstration.--The demonstration program
under this section shall begin again on January 1, 2016. The
Secretary shall approve States to conduct demonstration
programs under this section for a 5-year period, with each
State demonstration program covering one or more geographic
areas specified by the State. With respect to a State, after
the initial 5-year period of any demonstration program
conducted under this section by the State, unless the Secretary
finds, taking into account cost-effectiveness and quality of
care, that the State demonstration program has been
unsuccessful, the demonstration program may be extended or made
permanent in the State.''; and
(B) in paragraph (3), in the matter preceding
subparagraph (A)--
(i) by striking ``not''; and
(ii) by striking ``unless'' and inserting
``if'';
(2) in subsection (b)--
(A) in paragraph (3), by inserting ``clause (i)
through (vii), (viii) (without regard to the amendment
made by section 2004(c)(2) of Public Law 111-148), (x),
or (xi) of'' after ``described in''; and
(B) by striking paragraphs (4), (5), and (6);
(3) in subsection (c)--
(A) in paragraph (6), by striking ``Subject to
subparagraphs (D) and (E)'' and inserting ``Subject to
subparagraph (D)'';
(B) by striking paragraphs (3) and (4); and
(C) by redesignating paragraphs (5) through (8) as
paragraphs (3) through (6), respectively; and
(4) in subsection (d)--
(A) in paragraph (2), by striking subparagraph (E);
and
(B) in paragraph (3)--
(i) in subparagraph (A)(ii), by striking
``Subject to subparagraph (B)(ii), in'' and
inserting ``In''; and
(ii) by striking subparagraph (B) and
inserting the following:
``(B) Maintenance of health opportunity account
after becoming ineligible for public benefit.--
Notwithstanding any other provision of law, if an
account holder of a health opportunity account becomes
ineligible for benefits under this title because of an
increase in income or assets--
``(i) no additional contribution shall be
made into the account under paragraph
(2)(A)(i); and
``(ii) the account shall remain available
to the account holder for 3 years after the
date on which the individual becomes ineligible
for such benefits for withdrawals under the
same terms and conditions as if the account
holder remained eligible for such benefits, and
such withdrawals shall be treated as medical
assistance in accordance with subsection
(c)(4).''.
(b) Conforming Amendment.--Section 613 of the Children's Health
Insurance Program Reauthorization Act of 2009 (Public Law 111-3; 42
U.S.C. 1396u-8 note) is repealed.
SEC. 233. MEMBERS OF HEALTH CARE SHARING MINISTRIES ELIGIBLE TO
ESTABLISH HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 223 is amended by adding at the end the
following new subsection:
``(i) Application to Health Care Sharing 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. 234. HIGH DEDUCTIBLE HEALTH PLANS RENAMED HSA QUALIFIED PLANS.
(a) In General.--Section 223, as amended by this subtitle, is
amended by striking ``high deductible health plan'' each place it
appears and inserting ``HSA qualified health plan''.
(b) Conforming Amendments.--
(1) Section 106(e), as amended by this subtitle, is amended
by striking ``high deductible health plan'' each place it
appears and inserting ``HSA qualified health plan''.
(2) The heading for paragraph (2) of section 223(c) is
amended by striking ``High deductible health plan'' and
inserting ``HSA qualified health plan''.
(3) Section 408(d)(9) is amended--
(A) by striking ``high deductible health plan''
each place it appears in subparagraph (C) and inserting
``HSA qualified health plan'', and
(B) by striking ``High deductible health plan'' in
the heading of subparagraph (D) and inserting ``HSA
qualified health plan''.
SEC. 235. TREATMENT OF DIRECT PRIMARY CARE SERVICE ARRANGEMENTS.
(a) In General.--Section 223(c) is amended by adding at the end the
following new paragraph:
``(6) Treatment of direct primary care service
arrangements.--An arrangement under which an individual is
provided coverage restricted to primary care services in
exchange for a fixed 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. 236. CERTAIN EXERCISE EQUIPMENT AND PHYSICAL FITNESS PROGRAMS
TREATED AS MEDICAL CARE.
(a) In General.--Subsection (d) of section 213 is amended by adding
at the end the following new paragraph:
``(12) Exercise equipment and physical fitness programs.--
``(A) In general.--The term `medical care' shall
include amounts paid--
``(i) to purchase or use equipment used in
a program (including a self-directed program)
of physical exercise,
``(ii) to participate, or receive
instruction, in a program of physical exercise,
and
``(iii) for membership dues in a fitness
club the primary purpose of which is to provide
access to equipment and facilities for physical
exercise.
``(B) Limitation.--Amounts treated as medical care
under subparagraph (A) shall not exceed $1,000 with
respect to any individual for any taxable year.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 237. CERTAIN NUTRITIONAL AND DIETARY SUPPLEMENTS TO BE TREATED AS
MEDICAL CARE.
(a) In General.--Subsection (d) of section 213, as amended by this
Act, is amended by adding at the end the following new paragraph:
``(13) Nutritional and dietary supplements.--
``(A) In general.--The term `medical care' shall
include amounts paid to purchase herbs, vitamins,
minerals, homeopathic remedies, meal replacement
products, and other dietary and nutritional
supplements.
``(B) Limitation.--Amounts treated as medical care
under subparagraph (A) shall not exceed $1,000 with
respect to any individual for any taxable year.
``(C) Meal replacement product.--For purposes of
this paragraph, the term `meal replacement product'
means any product that--
``(i) is permitted to bear labeling making
a claim described in section 403(r)(3) of the
Federal Food, Drug, and Cosmetic Act, and
``(ii) is permitted to claim under such
section that such product is low in fat and is
a good source of protein, fiber, and multiple
essential vitamins and minerals.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 238. CERTAIN PROVIDER FEES TO BE TREATED AS MEDICAL CARE.
(a) In General.--Subsection (d) of section 213, as amended by this
Act, is amended by adding at the end the following new paragraph:
``(14) Periodic provider fees.--The term `medical care'
shall include periodic fees paid to a primary care physician
for the right to receive 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. 239. INCREASE THE MAXIMUM CONTRIBUTION LIMIT TO AN HSA TO MATCH
DEDUCTIBLE AND OUT-OF-POCKET EXPENSE LIMITATION.
(a) Self-Only Coverage.--Subparagraph (A) of section 223(b)(2) is
amended by striking ``$2,250'' and inserting ``the amount in effect
under subsection (c)(2)(A)(ii)(I)''.
(b) Family Coverage.--Subparagraph (B) of section 223(b)(2) is
amended by striking ``$4,500'' and inserting ``the amount in effect
under subsection (c)(2)(A)(ii)(II)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 240. CHILD HEALTH SAVINGS ACCOUNT.
(a) In General.--Section 223, as amended by this Act, is amended by
adding at the end the following new subsection:
``(j) Child Health Savings Accounts.--
``(1) In general.--In the case of an individual, in
addition to any deduction allowed under subsection (a) for any
taxable year, there shall be allowed as a deduction under this
section an amount equal to the aggregate amount paid in cash by
the taxpayer during the taxable year to a child health savings
account of a child of the taxpayer.
``(2) Limitation.--The amount taken into account under
paragraph (1) with respect to each child of the taxpayer for
the taxable year shall not exceed an amount equal to $3,000.
``(3) Child health savings account.--For purposes of this
subsection, the term `child health savings account' means a
health savings account designated as a child health savings
account and established for the benefit of a child of a
taxpayer, but only if--
``(A) such account was established for the benefit
of the child before the child attains the age of 5, and
``(B) under the written governing instrument
creating the trust, no contribution will be accepted to
the extent such contribution, when added to previous
contributions to the trust for the calendar year,
exceeds the dollar amount in effect under paragraph
(2).
``(4) Treatment of account before age 18.--For purposes of
this section, except as otherwise provided in this subsection,
a child health savings account established for the benefit of
the child of a taxpayer shall be treated as a health savings
account of the taxpayer until the child attains the age of 18,
after which such account shall be treated as a health savings
account of the child.
``(5) Distributions.--
``(A) In general.--In the case of a child health
savings account established under this section for the
benefit of a child of a taxpayer--
``(i) Before age 18.--Any amount paid or
distributed out of such account before the
child has attained the age of 18, shall be
included in the gross income of the taxpayer,
and subparagraph (A) of subsection (f) shall
apply (relating to additional tax on
distributions not used for qualified medical
expenses).
``(ii) Age 18 and older.--Any amount paid
or distributed out of such account after the
child has attained the age of 18 may only be
treated as used to pay qualified medical
expenses to the extent such child is not
covered as a dependent under insurance (other
than permitted insurance) of a parent.
``(B) Exceptions for disability or death of
child.--If the child becomes disabled within the
meaning of section 72(m)(7) or dies--
``(i) subparagraph (A) shall not apply to
any subsequent payment or distribution, and
``(ii) the taxpayer may rollover the amount
in such account to an individual retirement
plan of the taxpayer, to any health savings
account of the taxpayer, or to any child health
savings account of any other child of the
taxpayer.
``(C) Health insurance may be purchased from
account.--Subparagraph (B) of subsection (d)(2) shall
not apply to any health savings account originally
established as a child health savings account.
``(6) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this subsection, including rules for determining application of
this subsection in the case of legal guardians and in the case
of parents of a child who file separately, are separated, or
are not married.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
SEC. 241. ALLOWING MINIMUM DISTRIBUTIONS FROM TAX-DEFERRED RETIREMENT
ACCOUNTS TO BE DEPOSITED INTO HSAS.
(a) Transfer From Retirement Plan.--
(1) Individual retirement accounts.--Section 408(d) 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, and
``(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 a distribution for purposes of
paragraph (1), the entire amount of the distribution
shall be treated as includible in gross income without
regard to paragraph (1) to the extent that such amount
does not exceed the aggregate amount which would have
been so includible if all amounts in all individual
retirement plans of the individual were distributed
during such taxable year and all such plans were
treated as 1 contract for purposes of determining under
section 72 the aggregate amount which would have been
so includible. 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 the Internal
Revenue Code of 1986 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 an individual retirement plan--
``(A) to a health savings account of the individual
in a direct trustee-to-trustee transfer, and
``(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
a distribution for purposes of paragraph (1), the entire amount
of the distribution shall be treated as includible in gross
income without regard to paragraph (1) to the extent that such
amount does not exceed the aggregate amount which would have
been so includible if all amounts in all eligible retirement
plans of the individual were distributed during such taxable
year and all such plans were treated as 1 contract for purposes
of determining under section 72 the aggregate amount which
would have been so includible. 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.--Subparagraph (A) of section 223(d)(1) is
amended by striking ``or'' at the end of clause (i), by
striking the period at the end of clause (ii)(II) and inserting
``, or'', and by adding at the end the following new clause:
``(iii) unless it is in a qualified HSA
transfer described in section 408(d)(10) or
402(m).''.
(2) Excise tax inapplicable to qualified hsa transfer.--
Paragraph (1) of section 4973(g) is amended by inserting ``or
in a qualified HSA transfer described in section 408(d)(10) or
402(m)'' after ``or 223(f)(5)''.
(c) Effective Date.--The amendments made by this section shall
apply to distributions made after the date of the enactment of this
Act, in taxable years ending after such date.
SEC. 242. DISTRIBUTIONS FOR ABORTION EXPENSES FROM HEALTH SAVINGS
ACCOUNTS INCLUDED IN GROSS INCOME.
(a) In General.--Subsection (f) of section 223 is amended by adding
at the end the following new paragraph:
``(9) Exception for certain abortion expenses.--
``(A) In general.--Notwithstanding paragraph (1),
any amount used to pay for an abortion (other than an
abortion described in subparagraph (B)) shall be
included in the gross income of such beneficiary.
``(B) Exceptions.--Subparagraph (A) shall not apply
to--
``(i) an abortion--
``(I) in the case of a pregnancy
that is the result of an act of rape or
incest, or
``(II) in the case where a woman
suffers from a physical disorder,
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, and
``(ii) the treatment of any infection,
injury, disease, or disorder that has been
caused by or exacerbated by the performance of
an abortion.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
Subtitle C--Enhanced Wellness Incentives
SEC. 251. PROVIDING FINANCIAL INCENTIVES FOR 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 at the end the following flush sentence:
``In applying subparagraph (B), a group health plan (or a
health insurance issuer with respect to health insurance
coverage) may vary premiums and cost-sharing by up to 50
percent of the value of the benefits under the plan (or
coverage) based on participation (or lack of participation) in
a standards-based wellness program.''.
(2) PHSA amendment.--Section 2705(b)(2) of the Public
Health Service Act (42 U.S.C. 300gg-4(b)(2)) is amended by
adding at the end the following flush sentence:
``In applying subparagraph (B), a group health plan (or a
health insurance issuer with respect to health insurance
coverage) may vary premiums and cost-sharing by up to 50
percent of the value of the 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 at the end the
following flush sentence:
``In applying subparagraph (B), a group health plan may vary
premiums and cost-sharing by up to 50 percent of the value of
the benefits under the plan based on participation (or lack of
participation) in a standards-based wellness program.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to plan years beginning more than 1 year after the date of the
enactment of this Act.
TITLE III--IMPROVING ACCESS TO INSURANCE FOR VULNERABLE AMERICANS
Subtitle A--Eliminating Barriers to Insurance Coverage
SEC. 301. ELIMINATION OF CERTAIN REQUIREMENTS FOR GUARANTEED
AVAILABILITY IN INDIVIDUAL MARKET.
(a) In General.--Section 2741(b) of the Public Health Service Act
(42 U.S.C. 300gg-41(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``(1)(A)'' and inserting ``(1)'';
and
(B) by striking ``and (B)'' and all that follows up
to the semicolon at the end;
(2) by adding ``and'' at the end of paragraph (2);
(3) in paragraph (3)--
(A) by striking ``(1)(A)'' and inserting ``(1)'';
and
(B) by striking the semicolon at the end and
inserting a period; and
(4) by striking paragraphs (4) and (5).
(b) Effective Date.--The amendments made by subsection (a) shall
take effect 2 years after the date of the enactment of this Act.
Subtitle B--Ensuring Coverage for Individuals With Preexisting
Conditions and Multiple Health Care Needs Through High-Risk Pools
SEC. 311. IMPROVEMENT OF HIGH-RISK POOLS.
Section 2745 of the Public Health Service Act (42 U.S.C. 300gg-45)
is amended--
(1) in subsection (a), by adding at the end the following:
``The Secretary shall provide from the funds appropriated under
subsection (d)(3)(A) a grant of up to $5,000,000 to each State
that has not created a qualified high-risk pool as of September
1, 2017, for the State's costs of creation and initial
operation of such a pool.'';
(2) in paragraphs (1) and (2) of subsection (b), by
striking ``and (2)(A)'' and inserting ``(2)(A), (3)(B), and
(4)'' each place it appears;
(3) in subsection (b)(3), by inserting ``with respect to
funds made available for fiscal years before fiscal year
2016,''after ``applicable standard risks,'';
(4) by adding at the end of subsection (b) the following
new paragraph:
``(5) Verification of citizenship or alien qualification.--
``(A) In general.--Notwithstanding any other
provision of law, effective upon the date of the
enactment of this paragraph, only citizens and
nationals of the United States shall be eligible to
participate in a qualified high-risk pool that receives
funds under this section.
``(B) Condition of participation.--As a condition
of a State receiving such funds under this subsection
for a fiscal year beginning with fiscal year 2018, the
Secretary shall require the State to certify, to the
satisfaction of the Secretary, that such State requires
all applicants for coverage in the qualified high-risk
pool to provide satisfactory documentation of
citizenship or nationality in a manner consistent with
section 1903(x) of the Social Security Act.
``(C) Records.--The Secretary shall keep sufficient
records such that a determination of citizenship or
nationality only has to be made once for any individual
under this paragraph.''; and
(5) in subsection (d)--
(A) in paragraphs (1)(B) and (2) by striking
``paragraph (4)'' and inserting ``paragraph (6)'';
(B) in paragraph (4), by striking ``or (2)'' and
inserting ``(2), (3)(B), or (4)'';
(C) by redesignating paragraphs (3) through (5) as
paragraphs (5) through (7), respectively; and
(D) by inserting after paragraph (2) the following:
``(3) Authorization of appropriations for fiscal year
2018.--There are authorized to be appropriated for fiscal year
2018--
``(A) $50,000,000 to carry out the second sentence
of subsection (a); and
``(B) $2,450,000,000 which, subject to paragraph
(6), shall be made available for allotments under
subsection (b)(2).
``(4) Authorization of appropriations for fiscal years 2019
through 2027.--There are authorized to be appropriated
$2,500,000,000 for each of fiscal years 2019 through 2027
which, subject to paragraph (6), shall be made available for
allotments under subsection (b)(2).''.
TITLE IV--ENCOURAGING A MORE COMPETITIVE HEALTH CARE MARKET
Subtitle A--Expanding Patient Choice
SEC. 401. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE
COVERAGE.
(a) In General.--Title XXVII of the Public Health Service Act (42
U.S.C. 300gg et seq.) is amended by 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).
``(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 the 50 States and
includes the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana
Islands.
``(9) Unfair claims settlement 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 request 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.--Subject to section 601(d) of the American Health
Care Reform Act of 2017, 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:
```Notice
```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. 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 subparagraph
(A) 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. 2799. ENFORCEMENT.
``(a) In General.--Subject to subsection (b) and section 601(d) of
the American Health Care Reform Act of 2017, 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).
Subtitle B--McCarran-Ferguson Reform
SEC. 411. RESTORING THE APPLICATION OF ANTITRUST LAWS TO HEALTH SECTOR
INSURERS.
(a) Amendment to McCarran-Ferguson Act.--Section 3 of the Act of
March 9, 1945 (15 U.S.C. 1013), commonly known as the McCarran-Ferguson
Act, is amended by adding at the end the following:
``(c)(1) Nothing contained in this Act shall modify, impair, or
supersede the operation of any of the antitrust laws with respect to
the business of health insurance (including the business of dental
insurance). For purposes of the preceding sentence, the term `antitrust
laws' has the meaning given it in subsection (a) of the first section
of the Clayton Act, except that such term includes section 5 of the
Federal Trade Commission Act to the extent that such section 5 applies
to unfair methods of competition.
``(2) For purposes of paragraph (1), the term `business of health
insurance (including the business of dental insurance)' does not
include--
``(A) the business of life insurance (including annuities);
or
``(B) the business of property or casualty insurance,
including but not limited to, any insurance or benefits defined
as `excepted benefits' under paragraph (1), subparagraphs (B)
or (C) of paragraph (2), or paragraph (3) of section 9832(c) of
the Internal Revenue Code of 1986 (26 U.S.C. 9832(c)) whether
offered separately or in combination with insurance or benefits
described in paragraph (2)(A) of such section.''.
(b) Related Provision.--For purposes of section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent such section applies
to unfair methods of competition, section 3(c) of the McCarran-Ferguson
Act shall apply with respect to the business of health insurance
without regard to whether such business is carried on for profit,
notwithstanding the definition of ``Corporation'' contained in section
4 of the Federal Trade Commission Act.
Subtitle C--Medicare Price Transparency
SEC. 421. PUBLIC AVAILABILITY OF MEDICARE CLAIMS DATA.
(a) In General.--Section 1128J of the Social Security Act (42
U.S.C. 1320a-7k) is amended by adding at the end the following new
subsection:
``(f) Public Availability of Medicare Claims Data.--
``(1) In general.--The Secretary shall, to the extent
consistent with applicable information, privacy, security, and
disclosure laws, including the regulations promulgated under
the Health Insurance Portability and Accountability Act of 1996
and section 552a of title 5, United States Code, make available
to the public claims and payment data of the Department of
Health and Human Services related to title XVIII, including
data on payments made to any provider of services or supplier
under such title.
``(2) Implementation.--
``(A) In general.--Not later than December 31,
2017, the Secretary shall promulgate regulations to
carry out this subsection.
``(B) Requirements.--The regulations promulgated
under subparagraph (A) shall ensure that--
``(i) the data described in paragraph (1)
is made available to the public through a
searchable database that the public can access
at no cost;
``(ii) such database--
``(I) includes the amount paid to
each provider of services or supplier
under title XVIII, the items or
services for which such payment was
made, and the location of the provider
of services or supplier;
``(II) is organized based on the
specialty or the type of provider of
services or supplier involved;
``(III) is searchable based on the
type of items or services furnished;
and
``(IV) includes a disclaimer that
the aggregate data in the database does
not reflect on the quality of the items
or services furnished or of the
provider of services or supplier who
furnished the items or services; and
``(iii) each provider of services or
supplier in the database is identified by a
unique identifier that is available to the
public (such as the National Provider
Identifier of the provider of services or
supplier).
``(C) Scope of data.--The database shall include
data for fiscal year 2018, and each year fiscal year
thereafter.''.
(b) Information Not Exempt Under the Freedom of Information Act.--
The term ``personnel and medical files and similar files the disclosure
of which would constitute a clearly unwarranted invasion of personal
privacy'', as used in section 552(b)(6) of title 5, United States Code,
does not include the information required to be made available to the
public under section 1128J(f) of the Social Security Act, as added by
subsection (a).
Subtitle D--State Transparency Portals
SEC. 431. 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)).
(f) Authorization of Appropriations.--There are authorized to be
appropriated $50,000,000 for fiscal year 2018 to provide funding for
the Secretary of Health and Human Services to award grants to States to
enter into contracts to establish a portal plan under this section, to
remain available until expended.
Subtitle E--Protecting the Doctor-Patient Relationship
SEC. 441. RULE OF CONSTRUCTION.
Nothing in this Act shall be construed to interfere with the
doctor-patient relationship or the practice of medicine.
SEC. 442. REPEAL OF FEDERAL COORDINATING COUNCIL FOR COMPARATIVE
EFFECTIVENESS RESEARCH.
Effective on the date of the enactment of this Act, section 804 of
the American Recovery and Reinvestment Act of 2009 (42 U.S.C. 299b-8)
is repealed.
Subtitle F--Establishing Association Health Plans
SEC. 451. 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 this part,
``(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 this part.
``(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
this part, 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, (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, or (3) any law described in
section 601(d) of the American Health Care Reform Act of 2017.
``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 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
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 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 this part, 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 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 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 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 Actuary.--The board of trustees of
each association health plan which provides benefits options in
addition to health insurance coverage and which is applying for
certification under this part or is certified under this part shall
engage, on behalf of all participants and beneficiaries, a qualified
actuary who shall be responsible for the preparation of the materials
comprising information necessary to be submitted by a qualified actuary
under this part. The qualified 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 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 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 this part.
``(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 actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy of
Actuaries.
``(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 this part, 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.''.
(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 (f)'';
(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''; and
(C) by adding at the end the following new
subsection:
``(f)(1) Except as provided in subsection (b)(4), the provisions of
this title shall supersede any and all State laws insofar as they may
now or hereafter preclude, or have the effect of precluding, a health
insurance issuer from offering health insurance coverage in connection
with an association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of subsection
(b) of this section--
``(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(d) of such Act (29 U.S.C. 1144(d)) is
amended--
(A) by striking ``Nothing'' and inserting ``(1)
Except as provided in paragraph (2), 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 this paragraph 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, 2019, 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. 452. 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. 453. 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 by adding at the end the following new
subsection:
``(c) Any person who willfully falsely represents, to any employee,
any employee's beneficiary, any employer, the Secretary, or any State,
a plan or other arrangement established or maintained for the purpose
of offering or providing any benefit described in section 3(1) to
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. 454. 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. 455. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.
(a) Effective Date.--The amendments made by this subtitle shall
take effect 1 year after the date of the enactment of this Act. The
Secretary of Labor shall first issue all regulations necessary to carry
out the 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 G--Greater Choice for Veterans
SEC. 461. REMOVING BARRIERS TO HEALTH CARE CHOICE FOR CATEGORY 1
VETERANS AND MEDAL OF HONOR RECIPIENTS.
Section 101(b)(2) of the Veterans Access, Choice, and
Accountability Act of 2014 (Public Law 113-146; 38 U.S.C. 1701 note) is
amended--
(1) in subparagraph (C)(ii), by striking the ``or'' at the
end;
(2) in subparagraph (D)(ii)(II), by striking the period at
the end and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(E) is a veteran described in section 1705(a)(1)
of title 38, United States Code, or a veteran who was
awarded the medal of honor under section 3741, 6241, or
8741 of title 10 or section 491 of title 14.''.
TITLE V--REFORMING MEDICAL LIABILITY LAW
SEC. 501. REQUIREMENTS FOR SELECTION OF CLINICAL PRACTICE GUIDELINES.
(a) Selection.--Not later than 6 months after the date of enactment
of this Act, eligible professional organizations that have established,
published, maintained, and updated on a regular basis, clinical
practice guidelines, including when applicable, appropriate use
criteria, that incorporate best practices, may submit such guidelines
to the Secretary. Not later than 6 months after the last day for
submitting such guidelines, the Secretary shall select and designate
one or more eligible professional organizations to provide and maintain
such clinical practice guidelines on behalf of the Secretary. Not later
than 6 months after designating each such eligible professional
organization, the Secretary shall enter into an agreement with each
such eligible professional organization for maintenance, publication,
and updating of such clinical practice guidelines.
(b) Maintenance.--
(1) Periodic review.--Not later than 5 years the Secretary
enters into an agreement with each eligible professional
organization under subsection (a), and every 5 years
thereafter, the Secretary shall review the clinical practice
guidelines of such organization and shall, as necessary, enter
into agreements with additional eligible professional
organizations, as appropriate, in accordance with subsection
(a).
(2) Update by eligible professional organization.--An
eligible professional organization that collaborated in the
establishment of a clinical practice guidelines may submit
amendments to that clinical practice guideline at any time to
the Secretary for review by the Secretary.
(3) Notification required for certain updates.--An
amendment under paragraph (2) may not add, materially change,
or remove a guideline from a set of guidelines, unless
notification of such update is made available to applicable
eligible professionals.
SEC. 502. DEVELOPMENT.
(a) Guideline Standards.--The Secretary shall ensure that, to the
extent practicable, the development of clinical practice guidelines are
guided by the Standards for Developing Trustworthy Clinical Practice
Guidelines of the Institute of Medicine and--
(1) are developed through a transparent process that
minimizes conflicts of interest;
(2) are developed by a knowledgeable, multidisciplinary
panel of experts and representatives from key affected groups;
(3) take into consideration important patient subgroups and
patient preferences, as appropriate;
(4) are based on a systematic review of the existing
evidence;
(5) provide a clear explanation of the relationship between
care options and health outcomes;
(6) provide ratings of both the quality of evidence and
strength of recommendation;
(7) are reconsidered and revised when new evidence emerges;
and
(8) clearly identify any exceptions to the application of
the clinical practice guideline.
(b) Required Disclosures From Eligible Professional
Organizations.--Any person who is affiliated with an eligible
professional organization and who directly participated in the creation
of a clinical practice guideline shall disclose any conflicts of
interest pertaining to the development of the clinical practice
guideline, including any conflict of interest pertaining to any
instrument, medicine, drug, or any other substance, device, or means
included in the clinical practice guideline. Disclosures to the
Secretary by eligible professional organizations shall be made
promptly, upon submission of the guidelines, and during every review of
the guidelines. Disclosures shall include the following:
(1) Scientific methodology and evidence that supports
clinical practice guidelines.
(2) Outside collaborators.
(3) Endorsements.
SEC. 503. NO LIABILITY FOR GUIDELINE PRODUCERS.
Neither an eligible professional organization nor the participants
in its guideline development and approval process, may be held liable
for any injury alleged to be caused by adhering to a clinical practice
guideline to which they contributed.
SEC. 504. INTERNET PUBLICATION OF GUIDELINES.
The Secretary shall publish on the Internet through the National
Guideline Clearinghouse or other appropriate sites or sources, all
clinical practice guidelines, including all data and methodology used
in the development and selection of the guidelines in compliance with
data disclosure standards in the Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191).
SEC. 505. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.
(a) Limitation.--This Act shall not preempt or supersede any State
or Federal law that--
(1) imposes procedural or substantive protections for
health care providers and health care organizations from
liability, loss, or damages greater than such protections
provided by this title; or
(2) creates a cause of action related to the provision of
health care goods or services.
(b) State Flexibility.--No provision of this Act shall be construed
to preempt any defense available to a party in a health care liability
action under any other provision of State or Federal law.
SEC. 506. FEDERAL CAUSE OF ACTION.
(a) In General.--Chapter 85 of title 28, United States Code, is
amended by adding at the end the following:
``Sec. 1370. Health care liability claims
``(a) Definitions.--In this section, the terms `applicable eligible
professional', `health care goods or services', `health care liability
action', `health care liability claim', `health care organization', and
`health care provider' have the meaning given such terms in section 10
of the Saving Lives, Saving Costs Act.
``(b) Jurisdiction of Claims.--The district courts shall have
original jurisdiction of a health care liability action against an
applicable eligible professional, health care provider, or health care
organization.
``(c) Substantive Law.--The substantive law for decision in a
health care liability action brought under subsection (b) shall be
derived from the law, including choice of law principles, of the State
in which the provision of, use of, or payment for (or the failure to
provide, use, or pay for) health care goods or services giving rise to
the health care liability claim occurred unless such law is
inconsistent with or preempted by Federal law.''.
(b) Technical and Conforming Amendment.--The table of sections for
chapter 85 of title 28, United States Code, is amended by adding at the
end the following:
``1370. Health care liability claims.''.
SEC. 507. RIGHT OF REMOVAL.
Section 1441 of title 28, United States Code, is amended by adding
at the end the following:
``(g) Certain Actions Against Medical Professionals.--(1) A health
care liability action brought in a State court against an applicable
eligible professional, health care provider, or health care
organization may be removed by any defendant or the defendants to the
district court of the United States for the district and division
embracing the place where such action is pending.
``(2) In this subsection, the terms `applicable eligible
professional', `health care liability action', `health care
organization', and `health care provider' have the meaning given such
terms in section 10 of the Saving Lives, Saving Costs Act.''.
SEC. 508. MANDATORY REVIEW BY INDEPENDENT MEDICAL PANEL.
(a) In General.--If, in any health care liability action removed to
Federal court pursuant to section 1441(g) of title 28, United States
Code, against an applicable eligible professional, health care
provider, or health care organization, the applicable eligible
professional, health care provider, or health care organization
alleges, in response to a filing of the claimant, that the applicable
eligible professional, health care provider, or health care
organization adhered to an applicable clinical practice guideline in
the provision of health care goods or services to the claimant, then
the court shall suspend further proceedings on the health care
liability action prior to discovery proceedings, until the completion
of a review of the action by an independent medical review panel.
(b) Independent Medical Review Panel.--
(1) Composition.--An independent medical review panel under
this section shall be composed of 3 members who are experts in
the relevant field of clinical practice, appointed in
accordance with paragraph (5).
(2) Requirements for member eligibility.--
(A) In general.--To be eligible to serve on an
independent medical review panel, a member shall--
(i) be an experienced physician certified
by a board recognized by the American Board of
Medical Specialties;
(ii) not earlier than 2 years prior to the
date of selection to the board, have been in
active medical practice or devoted a
substantial portion of his or her time to
teaching at an accredited medical school, or
have been engaged in university-based research
in relation to the medical care and type of
treatment at issue; and
(iii) be approved by his or her specialty
society.
(B) Regional preference.--When possible, members
should be from the region where the case in question
originates to account for geographical practice
variation.
(3) No civil liability for members.--No civil action shall
be brought in any court against any member for any act, failure
to act, or statement or opinion made, within the scope of his
or her duties as a member of the independent medical review
panel.
(4) Considerations in making determinations.--The members
of the independent medical review panel shall acknowledge that,
under certain circumstances, it may be appropriate for a
physician to depart from the recommendations in clinical
practice guidelines in the care of individual patients.
(5) Selection of members.--Each member of the independent
medical review panel shall be jointly selected by the parties.
A member whose selection one party does not concur in may not
serve on the panel, except that, if, not later than 30 days
after a response to the health care liability action is filed,
3 members have not been selected by the parties, the court
shall appoint any remaining members.
(6) Compensation of members.--The costs of compensation to
the members of the independent medical review panel shall be
shared between the parties equally, unless otherwise agreed to
by the parties.
(c) Terms of Review.--A review by an independent medical review
panel under this section shall comply with the following:
(1) Standard of conduct.--The mandatory independent medical
review panel that is charged with the responsibility of making
a preliminary finding as to liability of the defendant
applicable eligible professional shall deem the prescribed
clinical practice guidelines as the standard of conduct, care,
and skill expected of members of the medical profession engaged
in the defendant's field of practice under the same or similar
circumstances, subject to the provisions of subsection (b)(4).
(2) Record for review.--The independent medical review
panel shall make a preliminary finding based solely upon the
pre-discovery evidence submitted to it pursuant to Rule 26 of
the Federal Rules of Civil Procedure, any medical records that
would be discoverable if the lawsuit advances to trial, and the
applicable prescribed clinical practice guidelines.
(3) Limitation.--The independent medical review panel shall
not make a finding of negligence from the mere fact that a
treatment or procedure was unsuccessful or failed to bring the
best result, or that the patient died.
(4) Use at trial of work product of review panel.--No
preliminary finding by the independent medical review panel
that the defendant applicable eligible professional breached
the standard of care as set forth under the prescribed clinical
practice guidelines shall constitute negligence per se or
conclusive evidence of liability, but findings, opinions, and
conclusions of the review panel shall be admissible as evidence
in any and all subsequent proceedings before the court,
including for purposes of motions for summary judgment and at
trial.
(d) Results of Review.--
(1) In general.--Not later than 60 days after all members
of the independent medical review panel have been selected, the
panel shall complete a review of the record of the liability
action and shall make a finding under this subsection.
(2) Finding described.--A finding under this subsection
shall include the following:
(A) A determination of whether there are any
applicable clinical practice guidelines to the health
care liability action that substantively pertains to
the injury suffered by the claimant.
(B) Whether the applicable eligible professional
has alleged adherence to any such guideline.
(C) Whether the applicable eligible professional
adhered to any such guideline.
(D) Whether there is a reasonable probability
that--
(i) the applicable eligible professional
violated the applicable clinical practice
guideline;
(ii) that violation proximately caused the
claimant's alleged injury; and
(iii) the claimant suffered damages as a
result of the injury.
(3) Use at trial.--The finding under this subsection may be
received into evidence by the court. If the independent medical
review panel made any finding under paragraph (2)(D) that there
was no reasonable probability of the matters described in
clauses (i) through (iii), the court may issue a summary
judgment in favor of the applicable eligible professional
unless the claimant is able to show otherwise by clear and
convincing evidence. If the panel made a finding under
subparagraphs (A) through (C) of paragraph (2) that there was
an applicable clinical practice guideline that the defendant
adhered to, the court shall issue summary judgment in favor of
the applicable eligible professional unless the claimant is
able to show otherwise by clear and convincing evidence. Any
preliminary finding that the defendant applicable eligible
professional did not breach the standard of care as set forth
under the prescribed medical practice guidelines or that the
defendant applicable eligible professional's nonadherence to
the applicable 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 court and shall entitle the defendant applicable
eligible professional to summary judgment unless the plaintiff
is able to show by clear and convincing evidence that the
independent medical review panel was in error and that there is
a genuine issue as to a material fact in the case.
SEC. 509. DEFINITIONS.
In this Act:
(1) Applicable eligible professional.--The term
``applicable eligible professional'' means a physician
practicing within clinical practice guidelines submitted by an
eligible professional organization and includes employees and
agents of a physician.
(2) Appropriate use criteria.--The term ``appropriate use
criteria'' means established evidence-based guidelines
developed or endorsed by an eligible professional organization
that specify when the health benefits of a procedure or service
exceed the expected health risks by a significantly wide
margin.
(3) Clinical practice guideline.--The term ``clinical
practice guideline'' means systematically developed statements
based on the review of clinical evidence for assisting a health
care provider to determine the appropriate health care in
specific clinical circumstances.
(4) Eligible professional organization.--The term
``eligible professional organization'' means a national or
State medical society or medical specialty society.
(5) Federal payor.--The term ``Federal payor'' includes
reimbursements made under the Medicare program under title
XVIII of the Social Security Act or the Medicaid program under
title XIX of the Social Security Act, or medical screenings,
treatments, or transfer services provided pursuant to section
1867 of the Social Security Act is not made by the individual
or any non-Federal third party on behalf of the individual.
(6) Health care goods or services.--The term ``health care
goods or services'' means any goods or services provided by a
health care 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.
(7) Health care liability action.--The term ``health care
liability action'' means a civil action against an applicable
eligible professional, a health care provider, or a health care
organization, regardless of the theory of liability on which
the claim is based, or the number of plaintiffs, defendants, or
other parties, or the number of causes of action, in which the
claimant alleges a health care liability claim.
(8) Health care liability claim.--The term ``health care
liability claim'' means a claim by any person against an
applicable eligible professional, a health care provider, or a
health care organization which is based upon the provision of,
use of, or payment for (or the failure to provide, use, or pay
for) health care goods or services for which at least partial
payment was made by a Federal payor or which was mandated by
Federal law, regardless of the theory of liability on which the
claim is based.
(9) Health care organization.--The term ``health care
organization'' means any person or 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.
(10) Health care provider.--The term ``health care
provider'' means any person or entity required by State or
Federal laws or regulations to be licensed, registered, or
certified to provide health care services, and being either so
licensed, registered, or certified, or exempted from such
requirement by other statute or regulation.
(11) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
TITLE VI--OTHER PROVISIONS
SEC. 601. RESPECTING HUMAN LIFE.
(a) Prohibition on Abortion Mandates.--Nothing in this Act (or any
amendment made by this Act) shall be construed to require any health
plan (including any high-risk pool) to provide coverage of, or access
to, abortion services or to allow the Secretary of the Treasury, the
Secretary of Labor, the Secretary of Health and Human Services, or any
other Federal or non-Federal person or entity in implementing this Act
(or an amendment made by this Act) to require coverage of, or access
to, abortion services.
(b) Prohibition on Certain Research Funding.--
(1) In general.--No funds authorized or appropriated by
this Act (or an amendment made by this Act) may be used to
conduct or support research that includes embryo-destructive
stem cell research and human cloning.
(2) Human cloning defined.--In this subsection, the term
``human cloning'' means human asexual reproduction accomplished
by introducing the nuclear material from a human diploid cell
into an oocyte to produce a living organism at any stage of
development with a human or predominantly human genetic
constitution.
(3) Construction.--Nothing in this subsection may be
construed to prohibit conducting or supporting research that
does not include embryo-destructive stem cell research or human
cloning, including research involving nuclear transfer or other
cloning techniques to produce molecules, DNA, cells other than
human embryos, tissues, or animals other than humans.
(c) Limitation on Abortion Funding.--
(1) In general.--No funds authorized or appropriated by
this Act (or an amendment made by this Act) may be used to pay
for any abortion or to cover any part of the costs of any
health plan that includes coverage of abortion (including a
high-risk pool described in section 2745 of the Public Health
Service Act (42 U.S.C. 300gg-45), as amended by section 311 of
this Act), except--
(A) if the pregnancy is the result of an act of
rape or incest; or
(B) in the case where a pregnant female suffers
from a physical disorder, physical injury, or physical
illness that would, as certified by a physician, place
the female in danger of death unless an abortion is
performed, including a life-endangering physical
condition caused by or arising from the pregnancy
itself.
(2) Option to purchase separate coverage or plan.--Nothing
in this subsection shall be construed as prohibiting any non-
Federal entity (including an individual or a State or local
government) from purchasing separate coverage for abortions for
which funding is prohibited under this subsection, or a health
plan that includes such abortions, so long as such coverage or
plan is paid for entirely using only funds not authorized or
appropriated by this Act.
(3) Option to offer coverage or plan.--Nothing in this
subsection shall restrict any non-Federal health insurance
issuer offering a health plan from offering separate coverage
for abortions for which funding is prohibited under this
subsection, or a health plan that includes such abortions, so
long as--
(A) premiums for such separate coverage or plan are
paid for entirely with funds not authorized or
appropriated by this Act; and
(B) administrative costs and all services offered
through such coverage or plan are paid for using only
premiums collected for such coverage or plan.
(4) Administrative expenses.--No funds authorized or
appropriated by this Act shall be available to pay for
administrative expenses in connection with any health plan
(including an association health plan that has entered into
trusteeship) which provides any benefits or coverage for
abortions except where the life of the mother would be
endangered if the fetus were carried to term, or the pregnancy
is the result of an act of rape or incest.
(d) No Preemption of State Laws.--Nothing in this Act (or an
amendment made by this Act) shall be construed to preempt or otherwise
have any effect on State laws--
(1) protecting conscience rights or restricting or
prohibiting abortion or coverage or funding of abortion, as in
effect on the date of the enactment of this Act; or
(2) establishing procedural requirements on abortions,
including parental notification or consent for the performance
of an abortion on a minor.
(e) Definitions.--In this section:
(1) The term ``association health plan'' has the meaning
given to such term in section 801 of the Employee Retirement
Income Security Act of 1974, as added by section 451 of this
Act.
(2) The term ``high-risk pool'' means a high-risk pool
described in section 2745 of the Public Health Service Act (42
U.S.C. 300gg-45), as amended by section 311 of this Act.
SEC. 602. OFFSETS.
Section 251(c) of the Balanced Budget and Emergency Deficit Control
Act of 1985 (2 U.S.C. 901) is amended as follows:
(1) In paragraph (5)(B), by striking the dollar amount and
inserting ``$507,300,000,000''.
(2) In paragraph (6)(B), by striking the dollar amount and
inserting ``$523,700,000,000''.
(3) In paragraph (7)(B), by striking the dollar amount and
inserting ``$534,900,000,000''.
(4) In paragraph (8)(B), by striking the dollar amount and
inserting ``$546,700,000,000''.
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