[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.