[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3799 Engrossed in House (EH)]

<DOC>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
118th CONGRESS
  1st Session
                                H. R. 3799

_______________________________________________________________________

                                 AN ACT


 
   To amend the Internal Revenue Code of 1986 to provide for health 
reimbursement arrangements integrated with individual health insurance 
                               coverage.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

                 TITLE I--ASSOCIATION HEALTH PLANS ACT

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Association Health Plans Act''.

SEC. 102. TREATMENT OF GROUP OR ASSOCIATION OF EMPLOYERS.

    (a) In General.--Section 3(5) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(5)) is amended--
            (1) by striking ``The term'' and inserting ``(A) The 
        term''; and
            (2) by adding at the end the following:
    ``(B) For purposes of subparagraph (A), a group or association of 
employers shall be treated as an `employer', regardless of whether the 
employers composing such group or association are in the same industry, 
trade, or profession, if such group or association--
            ``(i)(I) has established and maintains an employee welfare 
        benefit plan that is a group health plan (as defined in section 
        733(a)(1));
            ``(II) provides coverage under such plan to at least 51 
        employees after all of the employees employed by all of the 
        employer members of such group or association have been 
        aggregated and counted together as described in subparagraph 
        (D);
            ``(III) has been actively in existence for at least 2 years 
        prior to establishing and maintaining an employer welfare 
        benefit plan that is a group health plan (as defined in section 
        733(a)(1));
            ``(IV) has been formed and maintained in good faith for 
        purposes other than providing medical care (as defined in 
        section 733(a)(2)) through the purchase of insurance or 
        otherwise;
            ``(V) does not condition membership in the group or 
        association on any health status-related factor (as described 
        in section 702(a)(1)) relating to any individual;
            ``(VI) makes coverage under such plan available to all 
        employer members of such group or association regardless of any 
        health status-related factor (as described in section 
        702(a)(1)) relating to such employer members;
            ``(VII) does not provide coverage under such plan to any 
        individual other than an employee of an employer member of such 
        group or association;
            ``(VIII) has established a governing board with by-laws or 
        other similar indications of formality to manage and operate 
        such plan in both form and substance, of which at least 75 
        percent of the board members shall be made up of employer 
        members of such group or association participating in the plan 
        that are duly elected by each participating employer member 
        casting 1 vote during a scheduled election;
            ``(IX) is not a health insurance issuer (as defined in 
        section 733(b)(2)), and is not owned or controlled by such a 
        health insurance issuer or by a subsidiary or affiliate of such 
        a health insurance issuer, other than to the extent such a 
        health insurance issuer--
                    ``(aa) may participate in the group or association 
                as a member; and
                    ``(bb) may provide services such as assistance with 
                plan development, marketing, and administrative 
                services to such group or association;
            ``(ii) meets any set of criteria to qualify for such 
        treatment in an advisory opinion issued by the Secretary prior 
        to the date of enactment of the Association Health Plans Act; 
        or
            ``(iii) meets any other set of criteria to qualify for such 
        treatment that the Secretary by regulation may provide.
    ``(C)(i) For purposes of subparagraph (B), a self-employed 
individual shall be treated as--
            ``(I) an employer who may become a member of a group or 
        association of employers;
            ``(II) an employee who may participate in an employee 
        welfare benefit plan established and maintained by such group 
        or association; and
            ``(III) a participant of such plan subject to the 
        eligibility determination and monitoring requirements set forth 
        in clause (iii).
    ``(ii) For purposes of this subparagraph, the term `self-employed 
individual' means an individual who--
            ``(I) does not have any common law employees;
            ``(II) has an ownership right in a trade or business, 
        regardless of whether such trade or business is incorporated or 
        unincorporated;
            ``(III) earns wages (as defined in section 3121(a) of the 
        Internal Revenue Code of 1986) or self-employment income (as 
        defined in section 1402(b) of such Code) from such trade or 
        business; and
            ``(IV) works at least 10 hours per week or 40 hours per 
        month providing personal services to such trade or business.
    ``(iii) The board of a group or association of employers shall--
            ``(I) initially determine whether an individual meets the 
        requirements under clause (ii) to be considered a self-employed 
        individual for the purposes of being treated as an--
                    ``(aa) employer member of such group or association 
                (in accordance with clause (i)(I)); and
                    ``(bb) employee who may participate in the employee 
                welfare benefit plan established and maintained by such 
                group or association (in accordance with clause 
                (i)(II));
            ``(II) through reasonable monitoring procedures, 
        periodically determine whether the individual continues to meet 
        such requirements; and
            ``(III) if the board determines that an individual no 
        longer meets such requirements, not make such plan coverage 
        available to such individual (or dependents thereof) for any 
        plan year following the plan year during which the board makes 
        such determination. If, subsequent to a determination that an 
        individual no longer meets such requirements, such individual 
        furnishes evidence of satisfying such requirements, such 
        individual (and dependents thereof) shall be eligible to 
        receive plan coverage.
    ``(D) For purposes of subparagraph (B), all of the employees 
(including self-employed individuals) employed by all of the employer 
members (including self-employed individuals) of a group or association 
of employers shall be--
            ``(i) treated as employed by a single employer; and
            ``(ii) aggregated and counted together for purposes of any 
        regulation of an employee welfare benefit plan established and 
        maintained by such group or association.''.
    (b) Determination of Employer or Joint Employer Status.--The 
provision of employee welfare benefit plan coverage by a group or 
association of employers shall not be construed as evidence for 
establishing an employer or joint employer relationship under any 
Federal or State law.

SEC. 103. RULES APPLICABLE TO GROUP HEALTH PLANS ESTABLISHED AND 
              MAINTAINED BY A GROUP OR ASSOCIATION OF EMPLOYERS.

    Part 7 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1181, et seq.) is amended by adding at 
the end the following:

``SEC. 736. RULES APPLICABLE TO GROUP HEALTH PLANS ESTABLISHED AND 
              MAINTAINED BY A GROUP OR ASSOCIATION OF EMPLOYERS.

    ``(a) Premium Rates for a Group or Association of Employers.--
            ``(1)(A) In the case of a group health plan established and 
        maintained by a group or association of employers described in 
        section 3(5)(B), such plan may--
                    ``(i) establish base premium rates formed on an 
                actuarially sound, modified community rating 
                methodology that considers the pooling of all plan 
                participant claims; and
                    ``(ii) utilize the specific risk profile of each 
                employer member of such group or association to 
                determine contribution rates for each such employer 
                member's share of a premium by actuarially adjusting 
                above or below the established base premium rates.
            ``(B) For purposes of paragraph (1), the term `employer 
        member' means--
                    ``(i) an employer who is a member of such group or 
                association of employers and employs at least 1 common 
                law employee; or
                    ``(ii) a group made up solely of self-employed 
                individuals, within which all of the self-employed 
                individual members of such group or association are 
                aggregated together as a single employer member group, 
                provided the group includes at least 20 self-employed 
                individual members.
            ``(2) In the event a group or association is made up solely 
        of self-employed individuals (and no employers with at least 1 
        common law employee are members of such group or association), 
        the group health plan established by such group or association 
        shall--
                    ``(A) treat all self-employed individuals who are 
                members of such group or association as a single risk 
                pool;
                    ``(B) pool all plan participant claims; and
                    ``(C) charge each plan participant the same premium 
                rate.
    ``(b) Discrimination and Pre-existing Condition Protections.--A 
group health plan established and maintained by a group or association 
of employers described in section 3(5)(B) shall be prohibited from--
            ``(1) establishing any rule for eligibility (including 
        continued eligibility) of any individual (including an employee 
        of an employer member or a self-employed individual, or a 
        dependent of such employee or self-employed individual) to 
        enroll for benefits under the terms of the plan that 
        discriminates based on any health status-related factor that 
        relates to such individual (consistent with the rules under 
        section 702(a)(1));
            ``(2) requiring an individual (including an employee of an 
        employer member or a self-employed individual, or a dependent 
        of such employee or self-employed individual), as a condition 
        of enrollment or continued enrollment under the plan, to pay a 
        premium or contribution that is greater than the premium or 
        contribution for a similarly situated individual enrolled in 
        the plan based on any health status-related factor that relates 
        to such individual (consistent with the rules under section 
        702(b)(1)); and
            ``(3) denying coverage under such plan on the basis of a 
        pre-existing condition (consistent with the rules under section 
        2704 of the Public Health Service Act).''.

SEC. 104. RULE OF CONSTRUCTION.

    Nothing in this title shall be construed to exempt a group health 
plan which is an employee welfare benefit plan offered through a group 
or association of employers from the requirements of part 7 of subtitle 
B of title I of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1181 et. seq.), including the provisions of part A of title 
XXVII of the Public Health Service Act as incorporated by reference 
into this Act through section 715.

                    TITLE II--CHOICE ARRANGEMENT ACT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Custom Health Option and 
Individual Care Expense Arrangement Act'' or the ``CHOICE Arrangement 
Act''.

SEC. 202. TREATMENT OF HEALTH REIMBURSEMENT ARRANGEMENTS INTEGRATED 
              WITH INDIVIDUAL MARKET COVERAGE.

    (a) In General.--Section 9815(b) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking ``Exception.--Notwithstanding subsection 
        (a)'' and inserting the following: ``Exceptions.--
            ``(1) Self-insured group health plans.--Notwithstanding 
        subsection (a)'', and
            (2) by adding at the end the following new paragraph:
            ``(2) Custom health option and individual care expense 
        arrangements.--
                    ``(A) In general.--For purposes of this subchapter, 
                a custom health option and individual care expense 
                arrangement shall be treated as meeting the 
                requirements of sections 2711 and 2713 of title XXVII 
                of the Public Health Service Act.
                    ``(B) Custom health option and individual care 
                expense arrangements defined.--For purposes of this 
                section, the term `custom health option and individual 
                care expense arrangement' means a health reimbursement 
                arrangement--
                            ``(i) which is an employer-provided group 
                        health plan funded solely by employer 
                        contributions to provide payments or 
                        reimbursements for medical care subject to a 
                        maximum fixed dollar amount for a period,
                            ``(ii) under which such payments or 
                        reimbursements may only be made for medical 
                        care provided during periods during which the 
                        individual is covered--
                                    ``(I) under individual health 
                                insurance coverage (other than coverage 
                                that consists solely of excepted 
                                benefits), or
                                    ``(II) under part A and B of title 
                                XVIII of the Social Security Act or 
                                part C of such title,
                            ``(iii) which meets the nondiscrimination 
                        requirements of subparagraph (C),
                            ``(iv) which meets the substantiation 
                        requirements of subparagraph (D), and
                            ``(v) which meets the notice requirements 
                        of subparagraph (E).
                    ``(C) Nondiscrimination.--
                            ``(i) In general.--An arrangement meets the 
                        requirements of this subparagraph if an 
                        employer offering such arrangement to an 
                        employee within a specified class of employee--
                                    ``(I) offers such arrangement to 
                                all employees within such specified 
                                class on the same terms, and
                                    ``(II) does not offer any other 
                                group health plan to any employees 
                                within such specified class.
                            ``(ii) Specified class of employee.--For 
                        purposes of this subparagraph, any of the 
                        following may be designated as a specified 
                        class of employee:
                                    ``(I) Full-time employees.
                                    ``(II) Part-time employees.
                                    ``(III) Salaried employees.
                                    ``(IV) Non-salaried employees.
                                    ``(V) Employees whose primary site 
                                of employment is in the same rating 
                                area.
                                    ``(VI) Employees who are included 
                                in a unit of employees covered under a 
                                collective bargaining agreement to 
                                which the employer is subject 
                                (determined under rules similar to the 
                                rules of section 105(h)).
                                    ``(VII) Employees who have not met 
                                a group health plan, or health 
                                insurance issuer offering group health 
                                insurance coverage, waiting period 
                                requirement that satisfies the of 
                                section 2708 of the Public Health 
                                Service Act.
                                    ``(VIII) Seasonal employees.
                                    ``(IX) Employees who are 
                                nonresident aliens and who receive no 
                                earned income (within the meaning of 
                                section 911(d)(2)) from the employer 
                                which constitutes income from sources 
                                within the United States (within the 
                                meaning of section 861(a)(3)).
                                    ``(X) Such other classes of 
                                employees as the Secretary may 
                                designate.
                        An employer may designate (in such manner as is 
                        prescribed by the Secretary) two or more of the 
                        classes described in the preceding subclauses 
                        as the specified class of employees to which 
                        the arrangement is offered for purposes of 
                        applying this subparagraph.
                            ``(iii) Special rule for new hires.--An 
                        employer may designate prospectively so much of 
                        a specified class of employees as are hired 
                        after a date set by the employer. Such subclass 
                        of employees shall be treated as the specified 
                        class for purposes of applying clause (i).
                            ``(iv) Rules for determining type of 
                        employee.--For purposes for clause (ii), any 
                        determination of full-time, part-time, or 
                        seasonal employment status shall be made under 
                        rules similar to the rules of section 105(h) or 
                        4980H, whichever the employer elects for the 
                        plan year. Such election shall apply with 
                        respect to all employees of the employer for 
                        the plan year.
                            ``(v) Permitted variation.--For purposes of 
                        clause (i)(I), an arrangement shall not fail to 
                        be treated as provided on the same terms within 
                        a specified class merely because the maximum 
                        dollar amount of payments and reimbursements 
                        which may be made under the terms of the 
                        arrangement for the year with respect to each 
                        employee within such class--
                                    ``(I) increases as additional 
                                dependents of the employee are covered 
                                under the arrangement, and
                                    ``(II) increases with respect to a 
                                participant as the age of the 
                                participant increases, but not in 
                                excess of an amount equal to 300 
                                percent the lowest maximum dollar 
                                amount with respect to such a 
                                participant determined without regard 
                                to age.
                    ``(D) Substantiation requirements.--An arrangement 
                meets the requirements of this subparagraph if the 
                arrangement has reasonable procedures to substantiate--
                            ``(i) that the participant is, or will be, 
                        enrolled in coverage described in subparagraph 
                        (B)(ii) as of the beginning of the plan year of 
                        the arrangement (or as of the beginning of 
                        coverage under the arrangement in the case of 
                        an employee who first becomes eligible to 
                        participate in the arrangement after the date 
                        notice is given with respect to the plan under 
                        subparagraph (E) (determined without regard to 
                        clause (iii) thereof), and
                            ``(ii) any requests made for payment or 
                        reimbursement of medical care under the 
                        arrangement and that the participant remains so 
                        enrolled.
                    ``(E) Notice.--
                            ``(i) In general.--Except as provided in 
                        clause (iii), an arrangement meets the 
                        requirements of this subparagraph if, under the 
                        arrangement, each employee eligible to 
                        participate is, not later than 90 days before 
                        the beginning of the plan year, given written 
                        notice of the employee's rights and obligations 
                        under the arrangement which--
                                    ``(I) is sufficiently accurate and 
                                comprehensive to appraise the employee 
                                of such rights and obligations, and
                                    ``(II) is written in a manner 
                                calculated to be understood by the 
                                average employee eligible to 
                                participate.
                            ``(ii) Notice requirements.--Such notice 
                        shall include such information as the Secretary 
                        may by regulation prescribe.
                            ``(iii) Notice deadline for certain 
                        employees.--In the case of an employee--
                                    ``(I) who first becomes eligible to 
                                participate in the arrangement after 
                                the date notice is given with respect 
                                to the plan under clause (i) 
                                (determined without regard to this 
                                clause), or
                                    ``(II) whose employer is first 
                                established fewer than 120 days before 
                                the beginning of the first plan year of 
                                the arrangement,
                        the requirements of this subparagraph shall be 
                        treated as met if the notice required under 
                        clause (i) is provided not later than the date 
                        the arrangement may take effect with respect to 
                        such employee.''.
    (b) No Inference.--To the extent not inconsistent with the 
amendments made by this section--
            (1) no inference shall be made from such amendments with 
        respect to the rules prescribed in the Federal Register on June 
        20, 2019, (84 Fed. Reg. 28888) relating to health reimbursement 
        arrangements and other account-based group health plans, and
            (2) any reference to custom health option and individual 
        care expense arrangements shall for purposes of such rules be 
        treated as including a reference to individual coverage health 
        reimbursement arrangements.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2023.

                TITLE III--SELF-INSURANCE PROTECTION ACT

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Self-Insurance Protection Act''.

SEC. 302. FINDINGS.

    Congress finds the following:
            (1) Small and large employers offer health benefit plan 
        coverage to employees in self-funded arrangements using company 
        assets or a fund, or by paying premiums to purchase fully-
        insured coverage from a health insurance company.
            (2) Employers that self-fund health benefit plans will 
        often purchase stop-loss insurance as a financial risk 
        management tool to protect against excess or unexpected 
        catastrophic health plan claims losses that arise above 
        projected costs paid out of company assets.
            (3) Stop-loss coverage insures the employer sponsoring the 
        health benefit plan against unforeseen health plan claims, does 
        not insure the employee health benefit plan itself, and does 
        not pay health care providers for medical services provided to 
        the employees.
            (4) Employer-sponsored health benefit plans are regulated 
        under the Employee Retirement Income Security Act of 1974, 
        however, States regulate the availability and the coverage 
        terms of stop-loss insurance coverage that employers purchase 
        to protect company assets and to protect a fund against excess 
        or unexpected claims losses.
            (5) Both large and small employers that choose to self-fund 
        must also be able to protect company assets or a fund against 
        excess or unexpected claims losses and States must reasonably 
        regulate stop-loss insurance to assure its availability to both 
        large and small employers.

SEC. 303. CERTAIN MEDICAL STOP-LOSS INSURANCE OBTAINED BY CERTAIN PLAN 
              SPONSORS OF GROUP HEALTH PLANS NOT INCLUDED UNDER THE 
              DEFINITION OF HEALTH INSURANCE COVERAGE.

    Section 733(b)(1) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1191b(b)(1)) is amended by adding at the end the 
following sentence: ``Such term shall not include a stop-loss policy 
obtained by a self-insured group health plan or a plan sponsor of a 
group health plan that self-insures the health risks of its plan 
participants to reimburse the plan or sponsor for losses that the plan 
or sponsor incurs in providing health or medical benefits to such plan 
participants in excess of a predetermined level set forth in the stop-
loss policy obtained by such plan or sponsor.''.

SEC. 304. EFFECT ON OTHER LAWS.

    Section 514(b) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1144(b)) is amended by adding at the end the following:
    ``(10) The provisions of this title (including part 7 relating to 
group health plans) shall preempt State laws insofar as they may now or 
hereafter prevent an employee benefit plan that is a group health plan 
from insuring against the risk of excess or unexpected health plan 
claims losses.''.

                TITLE IV--SMALL BUSINESS FLEXIBILITY ACT

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Small Business Flexibility Act''.

SEC. 402. NOTIFICATION OF FLEXIBLE HEALTH INSURANCE BENEFITS.

    (a) In General.--Subchapter C of chapter 100 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
section:

``SEC. 9835. NOTIFICATION OF FLEXIBLE HEALTH INSURANCE BENEFITS.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of this section, the Secretary shall notify employers of the 
availability of tax-advantaged flexible health insurance benefits, with 
an initial focus on small businesses, particularly in rural areas (as 
defined in section 1393(a)(2)).
    ``(b) Definitions.--In this section:
            ``(1) Employer.--The term `employer' has the meaning given 
        such term in section 3(5) of the Employee Retirement Income 
        Security Act (29 U.S.C. 1002(5)).
            ``(2) Flexible health insurance benefits.--The term 
        `flexible health insurance benefits' means--
                    ``(A) an individual contribution health 
                reimbursement arrangement (as described in the rule 
                entitled `Health Reimbursement Arrangements and Other 
                Account-Based Group Health Plans' (84 Fed. Reg. 28888 
                (June 20, 2019));
                    ``(B) a qualified small employer health 
                reimbursement arrangement (as defined in section 
                9831(d)(2)); and
                    ``(C) the small employer health insurance credit 
                determined under section 45R.''.
    (b) Clerical Amendment.--The table of sections for subchapter C of 
chapter 100 of such Code is amended by adding at the end the following 
new item:

``Sec. 9835. Notification of flexible health insurance benefits.''.

                          TITLE V--RESCISSIONS

SEC. 501. PREVENTION AND PUBLIC HEALTH FUND.

    Section 4002(b)(7) of the Patient Protection and Affordable Care 
Act (42 U.S.C. 300u-11(b)(7)) is amended by striking ``for each of 
fiscal years 2024 and 2025, $1,300,000,000'' and inserting ``for fiscal 
year 2024, $1,055,000,000, and for fiscal year 2025, $1,300,000,000''.

   TITLE VI--SENSE OF CONGRESS THAT AMERICANS SHALL HAVE HEALTHCARE 
                                FREEDOM

SEC. 601. SENSE OF CONGRESS THAT HEALTHCARE FREEDOM IS THE FUTURE.

    It is the sense of Congress that--
            (1) the future of healthcare lies in healthcare freedom, 
        not in socialized medicine;
            (2) Congress should take steps to address the broken 
        healthcare system by restoring free market practices to lower 
        costs;
            (3) coverage is not care, and expanding direct access to 
        healthcare should be prioritized over expanding access to 
        coverage; and
            (4) patients and doctors, not government bureaucrats or 
        insurance bureaucrats, should make healthcare decisions.

            Passed the House of Representatives June 21, 2023.

            Attest:

                                                                 Clerk.
118th CONGRESS

  1st Session

                               H. R. 3799

_______________________________________________________________________

                                 AN ACT

   To amend the Internal Revenue Code of 1986 to provide for health 
reimbursement arrangements integrated with individual health insurance 
                               coverage.