(a) In general

Section 223 of the Internal Revenue Code of 1986 is amended to read as follows:

223. Health savings accounts

(a) Deduction allowed

In the case of an individual who is an eligible individual for any month during the taxable year, there shall be allowed as a deduction for the taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual.

(b) Limitations

(1) In general

The amount allowable as a deduction under subsection (a) with respect to any month is 1/12 of the dollar amount in effect under subsection (d)(2)(A) for the taxable year which included such month.

(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) Increase in limit for individuals becoming eligible individuals after the beginning of the year

(A) In general

For purposes of computing the limitation under paragraph (1) for any taxable year, an individual who is an eligible individual during the last month of such taxable year shall be treated—

(i)

as having been an eligible individual during each of the months in such taxable year, and

(ii)

as having been enrolled, during each of the months such individual is treated as an eligible individual solely by reason of clause (i), in the same qualified plan in which the individual was enrolled for the last month of such taxable year.

(B) Failure to maintain qualified plan coverage

(i) In general

If, at any time during the testing period, the individual is not an eligible individual, then—

(I)

gross income of the individual for the taxable year in which occurs the first month in the testing period for which such individual is not an eligible individual is increased by the aggregate amount of all contributions to the health savings account of the individual which could not have been made but for subparagraph (A), and

(II)

the tax imposed by this chapter for any taxable year on the individual shall be increased by 10 percent of the amount of such increase.

(ii) Exception for disability or death

Subclauses (I) and (II) of clause (i) shall not apply if the individual ceased to be an eligible individual by reason of the death of the individual or the individual becoming disabled (within the meaning of section 72(m)(7)).

(iii) Testing period

The term testing period means the period beginning with the last month of the taxable year referred to in subparagraph (A) and ending on the last day of the 12th month following such month.

(c) Definitions and special rules

For purposes of this section—

(1) Eligible individual

The term eligible individual means, with respect to any month, any individual if such individual is covered under a qualified plan as of the 1st day of such month.

(2) Qualified plan

(A) In general

The term qualified health plan means any health plan, including employer plans, individual plans, short term plans, Medicare, Medicaid, VA health care, TRICARE, Indian health service, health care sharing ministries, and association health plans.

(B) Exclusion of certain plans

Such term does not include a health plan if substantially all of its coverage is—

(i)

coverage for any benefit provided by permitted insurance, or

(ii)

coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, or long-term care.

(3) Permitted insurance

The term permitted insurance means—

(A)

insurance if substantially all of the coverage provided under such insurance relates to—

(i)

liabilities incurred under workers’ compensation laws,

(ii)

tort liabilities,

(iii)

liabilities relating to ownership or use of property, or

(iv)

such other similar liabilities as the Secretary may specify by regulations,

(B)

insurance for a specified disease or illness, and

(C)

insurance paying a fixed amount per day (or other period) of hospitalization.

(4) Family coverage

The term family coverage means any coverage other than self-only coverage.

(d) Health savings account

For purposes of this section—

(1) In general

The term health savings account means a trust created or organized in the United States as a health savings account exclusively for the purpose of paying the qualified medical expenses of the account beneficiary, but only if the written governing instrument creating the trust meets the following requirements:

(A)

Except in the case of a rollover contribution described in subsection (f)(5) or section 220(f)(5), no contribution will be accepted—

(i)

unless it is in cash, or

(ii)

to the extent such contribution, when added to previous contributions to the trust for the calendar year, exceeds the limitation amount specified in paragraph (2)(A), or

(iii)

to the extent such contribution, when added to the balance of the account, exceeds the limitation amount specified in paragraph (2)(B).

(B)

The trustee is a bank (as defined in section 408(n)), an insurance company (as defined in section 816), or another person who demonstrates to the satisfaction of the Secretary that the manner in which such person will administer the trust will be consistent with the requirements of this section.

(C)

No part of the trust assets will be invested in life insurance contracts.

(D)

The assets of the trust will not be commingled with other property except in a common trust fund or common investment fund.

(E)

The interest of an individual in the balance in his account is nonforfeitable.

(2) Limitations

(A) Annual limitation

(i) In general

The limitation amount specified in this subparagraph is—

(I)

$5,000 in the case of a qualified health plan with an actuarial value of less than 40 percent,

(II)

$4,300 in the case of a qualified health plan with an actuarial value that is 40 percent or more and less than 75 percent, and

(III)

$3,600 in the case of a qualified health plan with an actuarial value that is 75 percent or more.

(ii) Actuarial value of qualified health plan

For purposes of clause (i), the actuarial value of a qualified health plan is the percentage of the total average costs of covered benefits under the health plan.

(B) Account accumulation limitation

The limitation amount specified in this paragraph is $50,000.

(C) Indexing

(i) In general

In the case of any taxable year beginning in a calendar year after 2026, each dollar amount contained in subparagraphs (A)(i) and (B) shall be increased by the medical care cost adjustment of such amount for such calendar year.

(ii) Medical care cost adjustment

For purposes of clause (i), the medical care cost adjustment for any calendar year is the percentage (if any) by which—

(I)

the medical care component of the C–CPI–U (as defined in section 1(f)(6)) for August of the preceding calendar year, exceeds

(II)

such component of the C–CPI–U (as so defined) for August of 2025.

(iii) Rounding

(I) Annual limitation

If any increase in a dollar amount contained in subparagraph (A)(i) determined under clause (i) is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.

(II) Account limitation

If any increase in the dollar amount contained in subparagraph (B) determined under clause (i) is not a multiple of $1,000, such increase shall be rounded to the nearest multiple of $1,000.

(D) Coordination with other contributions

The limitation which would (but for this paragraph) apply under subparagraphs (A) and (B) to an individual for any taxable year shall be reduced (but not below zero) by the sum of—

(i)

the aggregate amount contributed to health savings accounts of such individual which is excludable from the taxpayer’s gross income for such taxable year under section 106(d) (and such amount shall not be allowed as a deduction under subsection (a)), and

(ii)

the aggregate amount contributed to health savings accounts of such individual for such taxable year under section 408(d)(9) (and such amount shall not be allowed as a deduction under subsection (a)).

(3) 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 such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise. For purposes of this subparagraph, amounts paid for menstrual care products shall be treated as paid for medical care.

(B) Health insurance may not be purchased from account

(i) In general

Subparagraph (A) shall not apply to any payment for insurance.

(ii) Exceptions

Clause (i) 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 a period in which the individual is receiving unemployment compensation under any Federal or State law, or

(IV)

in the case of an account beneficiary who has attained the age specified in section 1811 of the Social Security Act, any health insurance other than a medicare supplemental policy (as defined in section 1882 of the Social Security Act).

(iii) Exception for integrated health plans

Clause (i) shall not apply to any expense for coverage under an integration eligible health plan which is integrated with the health savings account within the meaning of section 106(d).

(iv) Exception for direct primary care service arrangements

(I) In general

A direct primary care service arrangement shall not be treated as insurance for purposes of clause (i).

(II) Direct primary care service arrangement defined

For purposes of this clause, the term direct primary care service arrangement means an arrangement under which an individual is provided medical care (as defined in section 213(d)(1), determined without regard to subparagraph (E) thereof) consisting solely of primary care services provided by primary care practitioners (as defined in section 1833(x)(2)(A) of the Social Security Act, determined without regard to clause (ii) thereof), if the sole compensation for such care is a fixed periodic fee.

(C) Menstrual care product

For purposes of this paragraph, the term menstrual care product means a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions.

(4) Account beneficiary

The term account beneficiary means the individual on whose behalf the health savings account was established.

(5) Certain rules to Apply

Rules similar to the following rules shall apply for purposes of this section:

(A)

Section 219(d)(2) (relating to no deduction for rollovers).

(B)

Section 219(f)(3) (relating to time when contributions deemed made).

(C)

Except as provided in section 106(d), section 219(f)(5) (relating to employer payments).

(D)

Section 408(g) (relating to community property laws).

(E)

Section 408(h) (relating to custodial accounts).

(e) Tax treatment of accounts

(1) In general

A health savings account is exempt from taxation under this subtitle unless such account has ceased to be a health savings account. Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations).

(2) Account terminations

Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to health savings accounts, and any amount treated as distributed under such rules shall be treated as not used to pay qualified medical expenses.

(f) Tax treatment of distributions

(1) Amounts used for qualified medical expenses

Any amount paid or distributed out of a health savings account which is used exclusively to pay qualified medical expenses of any account beneficiary shall not be includible in gross income.

(2) Inclusion of amounts not used for qualified medical expenses

Any amount paid or distributed out of a health savings account which is not used exclusively to pay the qualified medical expenses of the account beneficiary shall be included in the gross income of such beneficiary.

(3) Excess contributions returned before due date of return

(A) In general

If any excess contribution is contributed for a taxable year to any health savings account of an individual, paragraph (2) shall not apply to distributions from the health savings accounts of such individual (to the extent such distributions do not exceed the aggregate excess contributions to all such accounts of such individual for such year) 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 excess 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) Excess contribution

For purposes of subparagraph (A), the term excess contribution means any contribution (other than a rollover contribution described in paragraph (5) or section 220(f)(5)) which is neither excludable from gross income under section 106(d) nor deductible under this section.

(4) Additional tax on distributions not used for qualified medical expenses

(A) In general

The tax imposed by this chapter on the account beneficiary for any taxable year in which there is a payment or distribution from a health savings account of such beneficiary which is includible in gross income under paragraph (2) shall be increased by 20 percent of the amount which is so includible.

(B) Exception for disability or death

Subparagraph (A) shall not apply if the payment or distribution is made after the account beneficiary becomes disabled within the meaning of section 72(m)(7) or dies.

(C) Exception for distributions after medicare eligibility

Subparagraph (A) shall not apply to any payment or distribution after the date on which the account beneficiary attains the age specified in section 1811 of the Social Security Act.

(5) Rollover contribution

An amount is described in this paragraph as a rollover contribution if it meets the requirements of subparagraphs (A) and (B).

(A) In general

Paragraph (2) shall not apply to any amount paid or distributed from a health savings account to the account beneficiary to the extent the amount received is paid into a health savings account for the benefit of such beneficiary not later than the 60th day after the day on which the beneficiary receives the payment or distribution.

(B) Limitation

This paragraph shall not apply to any amount described in subparagraph (A) received by an individual from a health savings account if, at any time during the 1-year period ending on the day of such receipt, such individual received any other amount described in subparagraph (A) from a health savings account which was not includible in the individual’s gross income because of the application of this paragraph.

(C) Rollover from FSA, Archer MSA, and HRA

An amount is described in this subparagraph for a calendar year as a rollover contribution if the amount is the remaining balance in a health flexible spending account, Archer MSA, or health reimbursement arrangement that is contributed to the health savings account for a taxable year ending on or before one year after the date of the enactment of this subparagraph.

(6) Coordination with medical expense deduction

For purposes of determining the amount of the deduction under section 213, any payment or distribution out of a health savings account for qualified medical expenses shall not be treated as an expense paid for medical care.

(7) Transfer of account incident to divorce

The transfer of an individual’s interest in a health savings account to an individual’s spouse or former spouse under a divorce or separation instrument described in clause (i) of section 121(d)(3)(C) shall not be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest shall, after such transfer, be treated as a health savings account with respect to which such spouse is the account beneficiary.

(8) Treatment after death of account beneficiary

(A) Treatment if designated beneficiary is spouse

If the account beneficiary’s surviving spouse acquires such beneficiary’s interest in a health savings account by reason of being the designated beneficiary of such account at the death of the account beneficiary, such health savings account shall be treated as if the spouse were the account beneficiary.

(B) Other cases

(i) In general

If, by reason of the death of the account beneficiary, any person acquires the account beneficiary’s interest in a health savings account in a case to which subparagraph (A) does not apply—

(I)

such account shall cease to be a health savings account as of the date of death, and

(II)

an amount equal to the fair market value of the assets in such account on such date shall be includible if such person is not the estate of such beneficiary, in such person’s gross income for the taxable year which includes such date, or if such person is the estate of such beneficiary, in such beneficiary’s gross income for the last taxable year of such beneficiary.

(ii) Special rules

(I) Reduction of inclusion for predeath expenses

The amount includible in gross income under clause (i) by any person (other than the estate) shall be reduced by the amount of qualified medical expenses which were incurred by the decedent before the date of the decedent’s death and paid by such person within 1 year after such date.

(II) Deduction for estate taxes

An appropriate deduction shall be allowed under section 691(c) to any person (other than the decedent or the decedent’s spouse) with respect to amounts included in gross income under clause (i) by such person.

(g) Cost-of-Living adjustment

(1) In general

In the case of any taxable year beginning after December 31, 2026, each dollar amount in paragraphs (2) and (3) of subsection (c) shall be increased by an amount equal to—

(A)

such dollar amount, multiplied by

(B)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins determined by substituting 2025 for 2016 in subparagraph (A)(ii) thereof.

(2) 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) Reports

The Secretary may require—

(1)

the trustee of a health savings account to make such reports regarding such account to the Secretary and to the account beneficiary with respect to contributions, distributions, the return of excess contributions, and such other matters as the Secretary determines appropriate, and

(2)

any person who provides an individual with a qualified health plan to make such reports to the Secretary and to the account beneficiary with respect to such plan as the Secretary determines appropriate.

(b) Employer contributions to health savings accounts

(c) Termination of certain other health care related tax benefits

(d) Bankruptcy protections

Section 522 of title 11, United States Code, is amended by adding at the end the following new subsection:

(r)

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.

(e) Rollover of FSA, Archer MSA, HRA to health savings account

Notwithstanding any other provision of law, if the remaining balance in a health flexible spending arrangement, Archer MSA, or health reimbursement arrangement is transferred to a health savings account before the end of any taxable year ending on or before one year after the date of the enactment of this Act, such transfer shall be treated as a rollover to the health savings account under section 223(f)(5) of the Internal Revenue Code of 1986 and the distribution from the health flexible spending arrangement, Archer MSA, or health reimbursement arrangement shall not be includible in gross income.

(f) Effective dates

(a) In general

Section 36B is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection:

(h) Excess credit may be deposited into a health savings account

(1) In general

If the amount described in subparagraph (B) of subsection (b)(2) exceeds the amount described in subparagraph (A) of such subsection with respect to any coverage month and an election under paragraph (2) is in effect with respect to the applicable taxpayer, the Secretary shall deposit such excess into a health savings account of such taxpayer.

(2) Election to deposit excess credit into a health savings account

A taxpayer may elect (at such time and in such manner as the Secretary may provide) to have the Secretary deposit the excess described in paragraph (1) into a health savings account of the taxpayer. Any such election shall only be treated as being in effect if the taxpayer provides the Secretary with such information as the Secretary may require to allow the Secretary to make such deposit.

(3) Coordination with health savings account rules

Any amount deposited in a health savings account by the Secretary under this subsection shall—

(A)

be includible in the gross income of the applicable taxpayer, and

(B)

be taken into account as an amount paid to such account for purposes of this section.

(4) Treatment of deposits

For purposes of section 1324 of title 31, United States Code, any deposit made under this subsection shall be treated as a credit allowed under this section.

(b) Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

(a) Alternative waiver for State innovation

Section 1332 of the Patient Protection and Affordable Care Act (42 U.S.C. 18052) is amended by adding at the end the following new subsection:

(f) Alternative waiver for State innovation

(1) In general

Notwithstanding any preceding provision of this section, a State may apply to the Secretary for the waiver of any requirement of subsection (a)(2) with respect to health insurance coverage within that State for plan years beginning on or after January 1, 2026, if instead of complying with section 1402 the State provides for the distribution of funding received under paragraph (2) to health savings accounts of qualifying individuals with respect to such State. Such application shall be filed at such time and in such manner as the Secretary may require, and shall include such information as the Secretary may require (including a 10-year budget plan for such plan that is budget neutral for the Federal Government).

(2) Pass-through funding

With respect to a State waiver under paragraph (1), under which, due to the structure of such waiver, individuals in the State would not qualify for cost-sharing reductions under section 1402 for which they would otherwise be eligible, the Secretary shall provide for an alternative means by which an amount is transferred to the State equal to the aggregate amount of such reductions that would have been paid on behalf of the participants in the Exchanges established under this title—

(A)

had the State not received such waiver;

(B)

had references to eligible insureds under section 1402 referred to qualifying insureds (as defined in section 1332(f));

(C)

had, after application of clause (ii), in the case of a qualifying insured enrolled in the bronze level of coverage—

(i)

the percentages specified in subclauses (I), (II), and (III) of section 1402(c)(1)(B) were references to 84 percent, 77 percent, and 63 percent, respectively; and

(ii)

the references in subparagraphs (A), (B), and (C) of section 1402(c)(2) to 94 percent, 87 percent, and 73 percent, respectively, were references to 84 percent, 77 percent, and 63 percent, respectively; and

(D)

had, after application of clause (ii), in the case of a qualifying insured enrolled in the copper level of coverage—

(i)

the percentages specified in subclauses (I), (II), and (III) of section 1402(c)(1)(B) were references to 74 percent, 67 percent, and 53 percent, respectively; and

(ii)

the references in subparagraphs (A), (B), and (C) of section 1402(c)(2) to 94 percent, 87 percent, and 73 percent, respectively, were references to 74 percent, 67 percent, and 53 percent, respectively.

The amount transferred pursuant to the previous sentence shall be determined annually by the Secretary, taking into consideration the experience of other States with respect to participation in an Exchange and reductions provided under such provisions to residents of the other States, and shall be paid to the State for purposes of implementing such waiver.

(3) Waiver consideration and transparency

The provisions of paragraph (4) of subsection (a) shall apply to an application for a waiver under paragraph (1) in the same manner as such provisions apply with respect to an application for a waiver under subsection (a)(1), except that, for purposes of this paragraph, the provisions of subsection (a)(4)(B)(ii) shall not apply.

(4) Determinations; term of waiver

The provisions of subsections (d) and (e) shall apply with respect to a determination with respect to an application under paragraph (1), and with respect to the term of a waiver under such paragraph, in the same manner as such provisions apply with respect to a determination with respect to an application under subsection (a)(1), and with respect to the term of a waiver under such subsection.

(5) Definitions

For purposes of this subsection:

(A) Health savings account

The term health savings account has the meaning given such term in section 223 of the Internal Revenue Code of 1986.

(B) Qualifying insured

The term qualifying insured means, with respect to a State and a year, an individual—

(i)

who is enrolled in a health savings account;

(ii)

who is enrolled for such year in a silver, bronze, or copper level coverage offered through an Exchange; and

(iii)

whose household income is not more than 250 percent of the Federal poverty line for a family of the size involved.

(b) Additional amendments

Section 1402 of the Patient Protection and Affordable Care Act (42 U.S.C. 18071) is amended by striking not less than 100 percent but and exceeds 100 percent but and more than 100 percent but each place such phrases appear.

(c) Conforming amendments

Section 1332 of the Patient Protection and Affordable Care Act (42 U.S.C. 18052), as amended by subsection (a), is further amended in subsection (a)(4)—

(d) Appropriation for cost-Sharing payments

Section 1402 of the Patient Protection and Affordable Care Act (42 U.S.C. 18071) is amended by adding at the end the following new subsection:

(g) Funding

(1) Appropriations

Out of any funds in the Treasury not otherwise appropriated, there is appropriated such sums as may be necessary to, subject to paragraph (2), provide health benefits coverage through payment to issuers (under this section or through advance payment by the Secretary of the Treasury under section 1412(c)(3)) of the amounts computed under this section for each of plan years 2026 through 2030.

(2) Adjustments

Notwithstanding any other provision of law, payments and other actions for adjustments to obligations incurred prior to December 31, 2026, may be made through December 31, 2026.

(3) Limitation

Amounts appropriated under paragraph (1) for each of plan years 2026 through 2030 are subject to the requirements and limitations under sections 506 and 507 of division H of Public Law 115–31 in the same manner and to the same extent as if such amounts for each such year were appropriated under such division.

(a) In general

In the case of an applicable taxable year, contributions to any health savings account of the taxpayer during such taxable year shall be treated as a qualified retirement savings contribution for purposes of section 25B of the Internal Revenue Code of 1986.

(b) Applicable taxable year

For purposes of this section, the term applicable taxable year means any taxable year elected by the taxpayer (at such time and in such manner as the Secretary of the Treasury may provide) which begins during the 3-year period beginning 1 year after the date of the enactment of this Act. A taxpayer may not elect not more than 1 applicable taxable year under this subsection.

(a) In general

The Administrator shall establish a grant program to provide assistance to eligible entities to carry out the activities described in subsection (c).

(b) Application

An eligible entity shall submit an application to the Administrator in such time and in such manner as the Administrator may require, providing that such application requires a demonstration of the existence of a relationship with, or the ability to establish a relationship with, an employer, employee, self-employed individual, or consumer eligible to enroll in a health savings account.

(c) Use of funds

An eligible entity receiving a grant under this section shall use such funds to—

(d) Amount

The Administrator may distribute up to $5,000,000 annually to be divided among grant recipients under this section.

(e) Report

Not later than one year after the date on which the last of the grant periods awarded under this section ends, the Administrator shall submit a report to the Congress on the effectiveness of the grants provided under this section.

(f) Definitions

In this section:

(a) In general

Section 1312(d)(3)(D) of the Patient Protection and Affordable Care Act (42 U.S.C. 18032(d)(3)(D)) is amended—

(b) Conversion to health savings accounts

Each plan offered under chapter 89 of title 5, United States Code, shall be converted into a health savings account deposit and funded at the level of the second-least expensive silver plan available through the Exchange where the applicable individual resides.

(a) In general

Subtitle C of title I of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104–191) is amended by adding at the end the following:

196. Guaranteed availability of coverage

(a) Guaranteed issuance of coverage in the individual and group market

Subject to subsections (b) through (d), each health insurance issuer that offers health insurance coverage in the individual or group market in a State must accept every employer and individual in the State that applies for such coverage.

(b) Enrollment

(1) Restriction

A health insurance issuer described in subsection (a) may restrict enrollment in coverage described in such subsection to open or special enrollment periods.

(2) Establishment

A health insurance issuer described in subsection (a) shall, in accordance with the regulations promulgated under paragraph (3), establish special enrollment periods for qualifying events (under section 603 of the Employee Retirement Income Security Act of 1974).

(3) Regulations

The Secretary shall promulgate regulations with respect to enrollment periods under paragraphs (1) and (2).

(c) Special rules for network plans

(1) In general

In the case of a health insurance issuer that offers health insurance coverage in the group and individual market through a network plan, the issuer may—

(A)

limit the employers that may apply for such coverage to those with eligible individuals who live, work, or reside in the service area for such network plan; and

(B)

within the service area of such plan, deny such coverage to such employers and individuals if the issuer has demonstrated, if required, to the applicable State authority that—

(i)

it will not have the capacity to deliver services adequately to enrollees of any additional groups or any additional individuals because of its obligations to existing group contract holders and enrollees; and

(ii)

it is applying this paragraph uniformly to all employers and individuals without regard to the claims experience of those individuals, employers and their employees (and their dependents), or any health status-related factor relating to such individuals, employees, and dependents.

(2) 180-day suspension upon denial of coverage

An issuer, upon denying health insurance coverage in any service area in accordance with paragraph (1)(B), may not offer coverage in the group or individual market within such service area for a period of 180 days after the date such coverage is denied.

(d) Application of financial capacity limits

(1) In general

A health insurance issuer may deny health insurance coverage in the group or individual market if the issuer has demonstrated, if required, to the applicable State authority that—

(A)

it does not have the financial reserves necessary to underwrite additional coverage; and

(B)

it is applying this paragraph uniformly to all employers and individuals in the group or individual market in the State consistent with applicable State law and without regard to the claims experience of those individuals, employers and their employees (and their dependents) or any health status-related factor relating to such individuals, employees, and dependents.

(2) 180-day suspension upon denial of coverage

A health insurance issuer upon denying health insurance coverage in connection with group health plans in accordance with paragraph (1) in a State may not offer coverage in connection with group health plans in the group or individual market in the State for a period of 180 days after the date such coverage is denied or until the issuer has demonstrated to the applicable State authority, if required under applicable State law, that the issuer has sufficient financial reserves to underwrite additional coverage, whichever is later. An applicable State authority may provide for the application of this subsection on a service-area-specific basis.

(e) Definitions

In this section and in sections 197 through 199A:

(1)

The term Secretary means the Secretary of Health and Human Services.

(2)

The terms genetic information, genetic test, group health plan, group market, health insurance coverage, health insurance issuer, group health insurance coverage, individual health insurance coverage, individual market, and underwriting purpose have the meanings given such terms in section 2791 of the Public Health Service Act.

197. Fair health insurance premiums

(a) Prohibiting discriminatory premium rates

(1) In general

With respect to the premium rate charged by a health insurance issuer for health insurance coverage offered in the individual or small group market—

(A)

such rate shall vary with respect to the particular plan or coverage involved only by—

(i)

whether such plan or coverage covers an individual or family;

(ii)

rating area, as established in accordance with paragraph (2);

(iii)

age, except that such rate shall not vary by more than 5 to 1 for adults; and

(iv)

tobacco use, except that such rate shall not vary by more than 1.5 to 1; and

(B)

such rate shall not vary with respect to the particular plan or coverage involved by any other factor not described in subparagraph (A).

(2) Rating area

(A) In general

Each State shall establish 1 or more rating areas within that State for purposes of applying the requirements of this title.

(B) Secretarial review

The Secretary shall review the rating areas established by each State under subparagraph (A) to ensure the adequacy of such areas for purposes of carrying out the requirements of this title. If the Secretary determines a State’s rating areas are not adequate, or that a State does not establish such areas, the Secretary may establish rating areas for that State.

(3) Permissible age bands

The Secretary, in consultation with the National Association of Insurance Commissioners, shall define the permissible age bands for rating purposes under paragraph (1)(A)(iii).

(4) Application of variations based on age or tobacco use

With respect to family coverage under a group health plan or health insurance coverage, the rating variations permitted under clauses (iii) and (iv) of paragraph (1)(A) shall be applied based on the portion of the premium that is attributable to each family member covered under the plan or coverage.

198. Prohibiting discrimination against individual participants and beneficiaries based on health status

(a) In general

A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan or coverage based on any of the following health status-related factors in relation to the individual or a dependent of the individual:

(1)

Health status.

(2)

Medical condition (including both physical and mental illnesses).

(3)

Claims experience.

(4)

Receipt of health care.

(5)

Medical history.

(6)

Genetic information.

(7)

Evidence of insurability (including conditions arising out of acts of domestic violence).

(8)

Disability.

(9)

Any other health status-related factor determined appropriate by the Secretary.

(b) In premium contributions

(1) In general

A group health plan, and a health insurance issuer offering group or individual health insurance coverage, may not require any individual (as a condition of enrollment or continued enrollment under the plan) to pay a premium or contribution which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status-related factor in relation to the individual or to an individual enrolled under the plan as a dependent of the individual.

(2) Construction

Nothing in paragraph (1) shall be construed—

(A)

to restrict the amount that an employer or individual may be charged for coverage under a group health plan except as provided in paragraph (3) or individual health coverage, as the case may be; or

(B)

to prevent a group health plan, and a health insurance issuer offering group health insurance coverage, from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.

(3) No group-based discrimination on basis of genetic information

(A) In general

For purposes of this section, a group health plan, and health insurance issuer offering group health insurance coverage in connection with a group health plan, may not adjust premium or contribution amounts for the group covered under such plan on the basis of genetic information.

(B) Rule of construction

Nothing in subparagraph (A) or in paragraphs (1) and (2) of subsection (d) shall be construed to limit the ability of a health insurance issuer offering group or individual health insurance coverage to increase the premium for an employer based on the manifestation of a disease or disorder of an individual who is enrolled in the plan. In such case, the manifestation of a disease or disorder in one individual cannot also be used as genetic information about other group members and to further increase the premium for the employer.

(c) Genetic testing

(1) Limitation on requesting or requiring genetic testing

A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not request or require an individual or a family member of such individual to undergo a genetic test.

(2) Rule of construction

Paragraph (1) shall not be construed to limit the authority of a health care professional who is providing health care services to an individual to request that such individual undergo a genetic test.

(3) Rule of construction regarding payment

(A) In general

Nothing in paragraph (1) shall be construed to preclude a group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, from obtaining and using the results of a genetic test in making a determination regarding payment (as such term is defined for the purposes of applying the regulations promulgated by the Secretary under part C of title XI of the Social Security Act and section 264 of this Act, as may be revised from time to time) consistent with subsection (a).

(B) Limitation

For purposes of subparagraph (A), a group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, may request only the minimum amount of information necessary to accomplish the intended purpose.

(4) Research exception

Notwithstanding paragraph (1), a group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, may request, but not require, that a participant or beneficiary undergo a genetic test if each of the following conditions is met:

(A)

The request is made pursuant to research that complies with part 46 of title 45, Code of Federal Regulations, or equivalent Federal regulations, and any applicable State or local law or regulations for the protection of human subjects in research.

(B)

The plan or issuer clearly indicates to each participant or beneficiary, or in the case of a minor child, to the legal guardian of such beneficiary, to whom the request is made that—

(i)

compliance with the request is voluntary; and

(ii)

noncompliance will have no effect on enrollment status or premium or contribution amounts.

(C)

No genetic information collected or acquired under this paragraph shall be used for underwriting purposes.

(D)

The plan or issuer notifies the Secretary in writing that the plan or issuer is conducting activities pursuant to the exception provided for under this paragraph, including a description of the activities conducted.

(E)

The plan or issuer complies with such other conditions as the Secretary may by regulation require for activities conducted under this paragraph.

(d) Prohibition on collection of genetic information

(1) In general

A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not request, require, or purchase genetic information for underwriting purposes.

(2) Prohibition on collection of genetic information prior to enrollment

A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not request, require, or purchase genetic information with respect to any individual prior to such individual's enrollment under the plan or coverage in connection with such enrollment.

(3) Incidental collection

If a group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual, such request, requirement, or purchase shall not be considered a violation of paragraph (2) if such request, requirement, or purchase is not in violation of paragraph (1).

(e) Genetic information of a fetus or embryo

Any reference in this part to genetic information concerning an individual or family member of an individual shall—

(1)

with respect to such an individual or family member of an individual who is a pregnant woman, include genetic information of any fetus carried by such pregnant woman; and

(2)

with respect to an individual or family member utilizing an assisted reproductive technology, include genetic information of any embryo legally held by the individual or family member.

(f) Programs of health promotion or disease prevention

(1) General provisions

(A) General rule

For purposes of subsection (b)(2)(B), a program of health promotion or disease prevention (referred to in this subsection as a wellness program) shall be a program offered by an employer that is designed to promote health or prevent disease that meets the applicable requirements of this subsection.

(B) No conditions based on health status factor

If none of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if participation in the program is made available to all similarly situated individuals and the requirements of paragraph (2) are complied with.

(C) Conditions based on health status factor

If any of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if the requirements of paragraph (3) are complied with.

(2) Wellness programs not subject to requirements

If none of the conditions for obtaining a premium discount or rebate or other reward under a wellness program as described in paragraph (1)(B) are based on an individual satisfying a standard that is related to a health status factor (or if such a wellness program does not provide such a reward), the wellness program shall not violate this section if participation in the program is made available to all similarly situated individuals. The following programs shall not have to comply with the requirements of paragraph (3) if participation in the program is made available to all similarly situated individuals:

(A)

A program that reimburses all or part of the cost for memberships in a fitness center.

(B)

A diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes.

(C)

A program that encourages preventive care related to a health condition through the waiver of the copayment or deductible requirement under a group health plan for the costs of certain items or services related to a health condition (such as prenatal care or well-baby visits).

(D)

A program that reimburses individuals for the costs of smoking cessation programs without regard to whether the individual quits smoking.

(E)

A program that provides a reward to individuals for attending a periodic health education seminar.

(3) Wellness programs subject to requirements

If any of the conditions for obtaining a premium discount, rebate, or reward under a wellness program as described in paragraph (1)(C) is based on an individual satisfying a standard that is related to a health status factor, the wellness program shall not violate this section if the following requirements are complied with:

(A)

The reward for the wellness program, together with the reward for other wellness programs with respect to the plan that requires satisfaction of a standard related to a health status factor, shall not exceed 30 percent of the cost of employee-only coverage under the plan. If, in addition to employees or individuals, any class of dependents (such as spouses or spouses and dependent children) may participate fully in the wellness program, such reward shall not exceed 30 percent of the cost of the coverage in which an employee or individual and any dependents are enrolled. For purposes of this paragraph, the cost of coverage shall be determined based on the total amount of employer and employee contributions for the benefit package under which the employee is (or the employee and any dependents are) receiving coverage. A reward may be in the form of a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism (such as deductibles, copayments, or coinsurance), the absence of a surcharge, or the value of a benefit that would otherwise not be provided under the plan. The Secretaries of Labor, Health and Human Services, and the Treasury may increase the reward available under this subparagraph to up to 50 percent of the cost of coverage if the Secretaries determine that such an increase is appropriate.

(B)

The wellness program shall be reasonably designed to promote health or prevent disease. A program complies with the preceding sentence if the program has a reasonable chance of improving the health of, or preventing disease in, participating individuals and it is not overly burdensome, is not a subterfuge for discriminating based on a health status factor, and is not highly suspect in the method chosen to promote health or prevent disease.

(C)

The plan shall give individuals eligible for the program the opportunity to qualify for the reward under the program at least once each year.

(D)

The full reward under the wellness program shall be made available to all similarly situated individuals. For such purpose, among other things:

(i)

The reward is not available to all similarly situated individuals for a period unless the wellness program allows—

(I)

for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard; and

(II)

for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is medically inadvisable to attempt to satisfy the otherwise applicable standard.

(ii)

If reasonable under the circumstances, the plan or issuer may seek verification, such as a statement from an individual's physician, that a health status factor makes it unreasonably difficult or medically inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard.

(E)

The plan or issuer involved shall disclose in all plan materials describing the terms of the wellness program the availability of a reasonable alternative standard (or the possibility of waiver of the otherwise applicable standard) required under subparagraph (D). If plan materials disclose that such a program is available, without describing its terms, the disclosure under this subparagraph shall not be required.

199. Prohibition of preexisting condition exclusions or other discrimination based on health status

(a) In general

A group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage.

(b) Definitions

For purposes of this section—

(1) Preexisting condition exclusion

(A) In general

The term preexisting condition exclusion means, with respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date.

(B) Treatment of genetic information

Genetic information shall not be treated as a condition described in subsection (a)(1) in the absence of a diagnosis of the condition related to such information.

(2) Enrollment date

The term enrollment date means, with respect to an individual covered under a group health plan or health insurance coverage, the date of enrollment of the individual in the plan or coverage or, if earlier, the first day of the waiting period for such enrollment.

(3) Late enrollee

The term late enrollee means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during—

(A)

the first period in which the individual is eligible to enroll under the plan; or

(B)

a special enrollment period under subsection (f).

(4) Waiting period

The term waiting period means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the plan.

(c) Rules relating to crediting previous coverage

(1) Creditable coverage defined

For purposes of this title, the term creditable coverage means, with respect to an individual, coverage of the individual under any of the following:

(A)

A group health plan.

(B)

Health insurance coverage.

(C)

Part A or part B of title XVIII of the Social Security Act.

(D)

Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928.

(E)

Chapter 55 of title 10, United States Code.

(F)

A medical care program of the Indian Health Service or of a tribal organization.

(G)

A State health benefits risk pool.

(H)

A health plan offered under chapter 89 of title 5, United States Code.

(I)

A public health plan (as defined in regulations).

(J)

A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).

Such term does not include coverage consisting solely of coverage of excepted benefits (as defined in section 2791(c)).

(2) Not counting periods before significant breaks in coverage

(A) In general

A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group or individual health plan, if, after such period and before the enrollment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage.

(B) Waiting period not treated as a break in coverage

For purposes of subparagraph (A) and subsection (d)(4), any period that an individual is in a waiting period for any coverage under a group or individual health plan (or for group health insurance coverage) or is in an affiliation period (as defined in subsection (g)(2)) shall not be taken into account in determining the continuous period under subparagraph (A).

(C) TAA-eligible individuals

In the case of plan years beginning before January 1, 2014—

(i) TAA pre-certification period rule

In the case of a TAA-eligible individual, the period beginning on the date the individual has a TAA-related loss of coverage and ending on the date that is 7 days after the date of the issuance by the Secretary (or by any person or entity designated by the Secretary) of a qualified health insurance costs credit eligibility certificate for such individual for purposes of section 7527 of the Internal Revenue Code of 1986 shall not be taken into account in determining the continuous period under subparagraph (A).

(ii) Definitions

The terms TAA-eligible individual and TAA-related loss of coverage have the meanings given such terms in section 2205(b)(4).

(3) Method of crediting coverage

(A) Standard method

Except as otherwise provided under subparagraph (B), for purposes of applying subsection (a)(3), a group health plan, and a health insurance issuer offering group or individual health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period.

(B) Election of alternative method

A group health plan, or a health insurance issuer offering group or individual health insurance, may elect to apply subsection (a)(3) based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subparagraph (A). Such election shall be made on a uniform basis for all participants and beneficiaries. Under such election a group or individual health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category.

(C) Plan notice

In the case of an election with respect to a group health plan under subparagraph (B) (whether or not health insurance coverage is provided in connection with such plan), the plan shall—

(i)

prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made such election; and

(ii)

include in such statements a description of the effect of this election.

(D) Issuer notice

In the case of an election under subparagraph (B) with respect to health insurance coverage offered by an issuer in the individual or group market, the issuer—

(i)

shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made such election; and

(ii)

shall include in such statements a description of the effect of such election.

(4) Establishment of period

Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in subsection (e) or in such other manner as may be specified in regulations.

(d) Exceptions

(1) Exclusion not applicable to certain newborns

Subject to paragraph (4), a group health plan, and a health insurance issuer offering group or individual health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the 30-day period beginning with the date of birth, is covered under creditable coverage.

(2) Exclusion not applicable to certain adopted children

Subject to paragraph (4), a group health plan, and a health insurance issuer offering group or individual health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. The previous sentence shall not apply to coverage before the date of such adoption or placement for adoption.

(3) Exclusion not applicable to pregnancy

A group health plan, and health insurance issuer offering group or individual health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition.

(4) Loss if break in coverage

Paragraphs (1) and (2) shall no longer apply to an individual after the end of the first 63-day period during all of which the individual was not covered under any creditable coverage.

(e) Certifications and disclosure of coverage

(1) Requirement for certification of period of creditable coverage

(A) In general

A group health plan, and a health insurance issuer offering group or individual health insurance coverage, shall provide the certification described in subparagraph (B)—

(i)

at the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision;

(ii)

in the case of an individual becoming covered under such a provision, at the time the individual ceases to be covered under such provision; and

(iii)

on the request on behalf of an individual made not later than 24 months after the date of cessation of the coverage described in clause (i) or (ii), whichever is later.

The certification under clause (i) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.

(B) Certification

The certification described in this subparagraph is a written certification of—

(i)

the period of creditable coverage of the individual under such plan and the coverage (if any) under such COBRA continuation provision; and

(ii)

the waiting period (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage under such plan.

(C) Issuer compliance

To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this paragraph if the health insurance issuer offering the coverage provides for such certification in accordance with this paragraph.

(2) Disclosure of information on previous benefits

In the case of an election described in subsection (c)(3)(B) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under paragraph (1)—

(A)

upon request of such plan or issuer, the entity which issued the certification provided by the individual shall promptly disclose to such requesting plan or issuer information on coverage of classes and categories of health benefits available under such entity's plan or coverage; and

(B)

such entity may charge the requesting plan or issuer for the reasonable cost of disclosing such information.

(3) Regulations

The Secretary shall establish rules to prevent an entity's failure to provide information under paragraph (1) or (2) with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage.

(f) Special enrollment periods

(1) Individuals losing other coverage

A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if each of the following conditions is met:

(A)

The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent.

(B)

The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer (if applicable) required such a statement at such time and provided the employee with notice of such requirement (and the consequences of such requirement) at such time.

(C)

The employee's or dependent's coverage described in subparagraph (A)—

(i)

was under a COBRA continuation provision and the coverage under such provision was exhausted; or

(ii)

was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment) or employer contributions toward such coverage were terminated.

(D)

Under the terms of the plan, the employee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in subparagraph (C)(i) or termination of coverage or employer contribution described in subparagraph (C)(ii).

(2) For dependent beneficiaries

(A) In general

If—

(i)

a group health plan makes coverage available with respect to a dependent of an individual;

(ii)

the individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period); and

(iii)

a person becomes such a dependent of the individual through marriage, birth, or adoption or placement for adoption,

the group health plan shall provide for a dependent special enrollment period described in subparagraph (B) during which the person (or, if not otherwise enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage.

(B) Dependent special enrollment period

A dependent special enrollment period under this subparagraph shall be a period of not less than 30 days and shall begin on the later of—

(i)

the date dependent coverage is made available; or

(ii)

the date of the marriage, birth, or adoption or placement for adoption (as the case may be) described in subparagraph (A)(iii).

(C) No waiting period

If an individual seeks to enroll a dependent during the first 30 days of such a dependent special enrollment period, the coverage of the dependent shall become effective—

(i)

in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received;

(ii)

in the case of a dependent's birth, as of the date of such birth; or

(iii)

in the case of a dependent's adoption or placement for adoption, the date of such adoption or placement for adoption.

(3) Special rules for application in case of Medicaid and CHIP

(A) In general

A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if either of the following conditions is met:

(i) Termination of Medicaid or CHIP coverage

The employee or dependent is covered under a Medicaid plan under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act and coverage of the employee or dependent under such a plan is terminated as a result of loss of eligibility for such coverage and the employee requests coverage under the group health plan (or health insurance coverage) not later than 60 days after the date of termination of such coverage.

(ii) Eligibility for employment assistance under Medicaid or CHIP

The employee or dependent becomes eligible for assistance, with respect to coverage under the group health plan or health insurance coverage, under such Medicaid plan or State child health plan (including under any waiver or demonstration project conducted under or in relation to such a plan), if the employee requests coverage under the group health plan or health insurance coverage not later than 60 days after the date the employee or dependent is determined to be eligible for such assistance.

(B) Coordination with Medicaid and CHIP

(i) Outreach to employees regarding availability of Medicaid and CHIP coverage

(I) In general

Each employer that maintains a group health plan in a State that provides medical assistance under a State Medicaid plan under title XIX of the Social Security Act, or child health assistance under a State child health plan under title XXI of such Act, in the form of premium assistance for the purchase of coverage under a group health plan, shall provide to each employee a written notice informing the employee of potential opportunities then currently available in the State in which the employee resides for premium assistance under such plans for health coverage of the employee or the employee's dependents. For purposes of compliance with this subclause, the employer may use any State-specific model notice developed in accordance with section 701(f)(3)(B)(i)(II) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181(f)(3)(B)(i)(II)).

(II) Option to provide concurrent with provision of plan materials to employee

An employer may provide the model notice applicable to the State in which an employee resides concurrent with the furnishing of materials notifying the employee of health plan eligibility, concurrent with materials provided to the employee in connection with an open season or election process conducted under the plan, or concurrent with the furnishing of the summary plan description as provided in section 104(b) of the Employee Retirement Income Security Act of 1974.

(ii) Disclosure about group health plan benefits to States for medicaid and chip eligible individuals

In the case of an enrollee in a group health plan who is covered under a Medicaid plan of a State under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act, the plan administrator of the group health plan shall disclose to the State, upon request, information about the benefits available under the group health plan in sufficient specificity, as determined under regulations of the Secretary of Health and Human Services in consultation with the Secretary that require use of the model coverage coordination disclosure form developed under section 311(b)(1)(C) of the Children's Health Insurance Reauthorization Act of 2009, so as to permit the State to make a determination (under paragraph (2)(B), (3), or (10) of section 2105(c) of the Social Security Act or otherwise) concerning the cost-effectiveness of the State providing medical or child health assistance through premium assistance for the purchase of coverage under such group health plan and in order for the State to provide supplemental benefits required under paragraph (10)(E) of such section or other authority.

(g) Use of Affiliation Period by HMOs as Alternative to Preexisting Condition Exclusion

(1) In general

A health maintenance organization which offers health insurance coverage in connection with a group health plan and which does not impose any preexisting condition exclusion allowed under subsection (a) with respect to any particular coverage option may impose an affiliation period for such coverage option, but only if—

(A)

such period is applied uniformly without regard to any health status-related factors; and

(B)

such period does not exceed 2 months (or 3 months in the case of a late enrollee).

(2) Affiliation period

(A) Defined

For purposes of this title, the term affiliation period means a period which, under the terms of the health insurance coverage offered by the health maintenance organization, must expire before the health insurance coverage becomes effective. The organization is not required to provide health care services or benefits during such period and no premium shall be charged to the participant or beneficiary for any coverage during the period.

(B) Beginning

Such period shall begin on the enrollment date.

(C) Runs concurrently with waiting periods

An affiliation period under a plan shall run concurrently with any waiting period under the plan.

(3) Alternative methods

A health maintenance organization described in paragraph (1) may use alternative methods, from those described in such paragraph, to address adverse selection as approved by the State insurance commissioner or official or officials designated by the State to enforce the requirements of this part for the State involved with respect to such issuer.

199A. Extension of dependent coverage

(a) In general

A group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children shall continue to make such coverage available for an adult child (who is not married) until the child turns 26 years of age. Nothing in this section shall require a health plan or a health insurance issuer described in the preceding sentence to make coverage available for a child of a child receiving dependent coverage.

(b) Regulations

The Secretary shall promulgate regulations to define the dependents to which coverage shall be made available under subsection (a).

(c) Rule of construction

Nothing in this section shall be construed to modify the definition of dependent as used in the Internal Revenue Code of 1986 with respect to the tax treatment of the cost of coverage.

199B. Annual limitation on cost-sharing

(a) In general

(1) 2014

The cost-sharing incurred under a group health plan or group or individual health insurance coverage with respect to self-only coverage or coverage other than self-only coverage for a plan year beginning in 2014 shall not exceed the dollar amounts in effect under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-only and family coverage, respectively, for taxable years beginning in 2014.

(2) 2015 and later

In the case of any plan year beginning in a calendar year after 2014, the limitation under this paragraph shall—

(A)

in the case of self-only coverage, be equal to the dollar amount under paragraph (1) for self-only coverage for plan years beginning in 2014, increased by an amount equal to the product of that amount and the premium adjustment percentage under subsection (c) for the calendar year; and

(B)

in the case of other coverage, twice the amount in effect under subparagraph (A).

If the amount of any increase under subparagraph (A) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.

(b) Cost-Sharing

In this section:

(1) In general

The term cost-sharing includes—

(A)

deductibles, coinsurance, copayments, or similar charges; and

(B)

any other expenditure required of an insured individual which is a qualified medical expense (within the meaning of section 223(d)(2) of the Internal Revenue Code of 1986) with respect to essential health benefits covered under the plan.

(2) Exceptions

Such term does not include premiums, balance billing amounts for non-network providers, or spending for non-covered services.

(c) Premium adjustment percentage

For purposes of subsection (a)(2)(A), the premium adjustment percentage for any calendar year is the percentage (if any) by which the average per capita premium for health insurance coverage in the United States for the preceding calendar year (as estimated by the Secretary no later than October 1 of such preceding calendar year) exceeds such average per capita premium for 2013 (as determined by the Secretary).

199C. Enforcement of certain health insurance requirements

(a) State Enforcement

(1) State authority

Each State may require that health insurance issuers that issue, sell, renew, or offer health insurance coverage in the State in the individual or group market meet the requirements of this part with respect to such issuers.

(2) Failure to implement provisions

In the case of a determination by the Secretary that a State has failed to substantially enforce a provision (or provisions) of sections 196 through 199A with respect to health insurance issuers in the State, the Secretary shall enforce such provision (or provisions) under subsection (b) insofar as they relate to the issuance, sale, renewal, and offering of health insurance coverage in connection with group health plans or individual health insurance coverage in such State.

(b) Secretarial Enforcement Authority

(1) Limitation

The provisions of this subsection shall apply to enforcement of a provision (or provisions) described in subsection (a)(2) only—

(A)

as provided under such subsection; and

(B)

with respect to individual health insurance coverage or group health plans that are non-Federal governmental plans.

(2) Imposition of penalties

In the cases described in paragraph (1)—

(A) In general

Subject to the succeeding provisions of this subsection, any non-Federal governmental plan that is a group health plan and any health insurance issuer that fails to meet a provision of this part applicable to such plan or issuer is subject to a civil money penalty under this subsection.

(B) Liability for penalty

In the case of a failure by—

(i)

a health insurance issuer, the issuer is liable for such penalty; or

(ii)

a group health plan that is a non-Federal governmental plan which is—

(I)

sponsored by 2 or more employers, the plan is liable for such penalty; or

(II)

not so sponsored, the employer is liable for such penalty.

(C) Amount of penalty

(i) In general

The maximum amount of penalty imposed under this paragraph is $100 for each day for each individual with respect to which such a failure occurs.

(ii) Considerations in imposition

In determining the amount of any penalty to be assessed under this paragraph, the Secretary shall take into account the previous record of compliance of the entity being assessed with the applicable provisions of this part and the gravity of the violation.

(iii) Limitations

(I) Penalty not to apply where failure not discovered exercising reasonable diligence

No civil money penalty shall be imposed under this paragraph on any failure during any period for which it is established to the satisfaction of the Secretary that none of the entities against whom the penalty would be imposed knew, or exercising reasonable diligence would have known, that such failure existed.

(II) Penalty not to apply to failures corrected within 30 days

No civil money penalty shall be imposed under this paragraph on any failure if such failure was due to reasonable cause and not to willful neglect, and such failure is corrected during the 30-day period beginning on the first day any of the entities against whom the penalty would be imposed knew, or exercising reasonable diligence would have known, that such failure existed.

(D) Administrative review

(i) Opportunity for hearing

The entity assessed shall be afforded an opportunity for hearing by the Secretary upon request made within 30 days after the date of the issuance of a notice of assessment. In such hearing the decision shall be made on the record pursuant to section 554 of title 5, United States Code. If no hearing is requested, the assessment shall constitute a final and unappealable order.

(ii) Hearing procedure

If a hearing is requested, the initial agency decision shall be made by an administrative law judge, and such decision shall become the final order unless the Secretary modifies or vacates the decision. Notice of intent to modify or vacate the decision of the administrative law judge shall be issued to the parties within 30 days after the date of the decision of the judge. A final order which takes effect under this paragraph shall be subject to review only as provided under subparagraph (E).

(E) Judicial review

(i) Filing of action for review

Any entity against whom an order imposing a civil money penalty has been entered after an agency hearing under this paragraph may obtain review by the United States district court for any district in which such entity is located or the United States District Court for the District of Columbia by filing a notice of appeal in such court within 30 days from the date of such order, and simultaneously sending a copy of such notice by registered mail to the Secretary.

(ii) Certification of administrative record

The Secretary shall promptly certify and file in such court the record upon which the penalty was imposed.

(iii) Standard for review

The findings of the Secretary shall be set aside only if found to be unsupported by substantial evidence as provided by section 706(2)(E) of title 5, United States Code.

(iv) Appeal

Any final decision, order, or judgment of the district court concerning such review shall be subject to appeal as provided in chapter 83 of title 28 of such Code.

(F) Failure to pay assessment; maintenance of action

(i) Failure to pay assessment

If any entity fails to pay an assessment after it has become a final and unappealable order, or after the court has entered final judgment in favor of the Secretary, the Secretary shall refer the matter to the Attorney General who shall recover the amount assessed by action in the appropriate United States district court.

(ii) Nonreviewability

In such action the validity and appropriateness of the final order imposing the penalty shall not be subject to review.

(G) Payment of penalties

Except as otherwise provided, penalties collected under this paragraph shall be paid to the Secretary (or other officer) imposing the penalty and shall be available without appropriation and until expended for the purpose of enforcing the provisions with respect to which the penalty was imposed.

(3) Enforcement authority relating to genetic discrimination

(A) General rule

In the cases described in paragraph (1), notwithstanding the provisions of paragraph (2)(C), the succeeding subparagraphs of this paragraph shall apply with respect to an action under this subsection by the Secretary with respect to any failure of a health insurance issuer in connection with a group health plan, to meet the requirements of subsection (a)(1)(F), (b)(3), (c), or (d) of section 196 or section 197 or 196(b)(1) with respect to genetic information in connection with the plan.

(B) Amount

(i) In general

The amount of the penalty imposed under this paragraph shall be $100 for each day in the noncompliance period with respect to each participant or beneficiary to whom such failure relates.

(ii) Noncompliance period

For purposes of this paragraph, the term noncompliance period means, with respect to any failure, the period—

(I)

beginning on the date such failure first occurs; and

(II)

ending on the date the failure is corrected.

(C) Minimum penalties where failure discovered

Notwithstanding clauses (i) and (ii) of subparagraph (D):

(i) In general

In the case of 1 or more failures with respect to an individual—

(I)

which are not corrected before the date on which the plan receives a notice from the Secretary of such violation; and

(II)

which occurred or continued during the period involved;

the amount of penalty imposed by subparagraph (A) by reason of such failures with respect to such individual shall not be less than $2,500.

(ii) Higher minimum penalty where violations are more than de minimis

To the extent violations for which any person is liable under this paragraph for any year are more than de minimis, clause (i) shall be applied by substituting $15,000 for $2,500 with respect to such person.

(D) Limitations

(i) Penalty not to apply where failure not discovered exercising reasonable diligence

No penalty shall be imposed by subparagraph (A) on any failure during any period for which it is established to the satisfaction of the Secretary that the person otherwise liable for such penalty did not know, and exercising reasonable diligence would not have known, that such failure existed.

(ii) Penalty not to apply to failures corrected within certain periods

No penalty shall be imposed by subparagraph (A) on any failure if—

(I)

such failure was due to reasonable cause and not to willful neglect; and

(II)

such failure is corrected during the 30-day period beginning on the first date the person otherwise liable for such penalty knew, or exercising reasonable diligence would have known, that such failure existed.

(iii) Overall limitation for unintentional failures

In the case of failures which are due to reasonable cause and not to willful neglect, the penalty imposed by subparagraph (A) for failures shall not exceed the amount equal to the lesser of—

(I)

10 percent of the aggregate amount paid or incurred by the employer (or predecessor employer) during the preceding taxable year for group health plans; or

(II)

$500,000.

(E) Waiver by Secretary

In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the penalty imposed by subparagraph (A) to the extent that the payment of such penalty would be excessive relative to the failure involved.

(c) Definitions

For purposes of this section:

(1) Governmental plan

The term governmental plan has the meaning given such term under section 3(32) of the Employee Retirement Income Security Act of 1974 and any Federal governmental plan.

(2) Federal governmental plan

The term ‘Federal governmental plan’ means a governmental plan established or maintained for its employees by the Government of the United States or by any agency or instrumentality of such Government.

(3) Non-Federal governmental plan

The term non-Federal governmental plan means a governmental plan that is not a Federal governmental plan.

(b) Conforming amendment

The table of contents under section 1(b) of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104–191) is amended by inserting after the item relating to section 195 the following:

(c) ERISA and IRC Enforcement

(d) Effective date

The amendments made by this section shall take effect on the date on which the Supreme Court of the United States issues a decision striking down the Patient Protection and Affordable Care Act (Public Law 111–148) in its entirety.

(a) Definition of employer

Section 3(5) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(5)) is amended by striking the period and inserting (which, with respect to a group health plan, shall be determined in accordance with criteria that includes the criteria under section 735)..

(b) Group health plans

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:

735. Definition of employer with respect to group health plans

(a) In general

A group or association of employers that meets the criteria under subsection (b) shall be considered an employer under section 3(5) for purposes of sponsoring a group health plan.

(b) Requirements

The requirements under this subsection are each of the following:

(1)

The primary purpose of the group or association may be to offer and provide health coverage to its employer members and their employees, if such group or association has at least 1 substantial business purpose, as described in subsection (c), unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees.

(2)

Each employer member of the group or association participating in the group health plan is a person acting directly as an employer of at least 1 employee who is a participant covered under the plan.

(3)

The group or association has—

(A)

a formal organizational structure with a governing body; and

(B)

by-laws or other similar indications of formality.

(4)

The functions and activities of the group or association shall be controlled by the employer members of the group or association, and the employer members of the group or association that participate in the group health plan shall control the plan. Control under this paragraph shall be in form and substance.

(5)

The employer members shall have a commonality of interest as described in subsection (d).

(6)

(A)

The group or association shall not make health coverage through the group health plan available other than to—

(i)

an employee of a current employer member of the group or association;

(ii)

a former employee of a current employer member of the group or association who became eligible for coverage under the group health plan when the former employee was an employee of the employer; and

(iii)

a beneficiary of an individual described in clause (i) or (ii), such as a spouse or dependent child.

(B)

Notwithstanding subparagraph (A), the group or association shall not make health coverage through the group health plan available to any individual (or beneficiaries of the individual) for any plan year following the plan year in which the plan determines pursuant to reasonable monitoring procedures described in subsection (f)(2)(C) that the individual ceases to meet the conditions described in subsection (f)(2) for being a working owner (unless the individual again meets those conditions), except as may be required by section 601.

(7)

The group or association, and any health coverage offered by the group or association, shall comply with the nondiscrimination provisions under subsection (e).

(8)

The group or association shall not be a health insurance issuer, or 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 entities participate in the group or association in their capacity as employer members of the group or association.

(c) Substantial business purpose

(1) In general

For purposes of subsection (b)(1), a substantial business purpose shall exist if the group or association would be a viable entity in the absence of sponsoring an employee benefit plan.

(2) Business purpose

For purposes of subsection (b)(1) and paragraph (1), a business purpose shall—

(A)

include promoting common business interests of the members of the group or association or the common economic interests in a given trade or employer community; and

(B)

not be required to be a for-profit activity.

(d) Commonality of interest

(1) In general

Subject to paragraph (3), employer members of the group or association shall be treated as having a commonality of interest for purposes of subsection (b)(5) if—

(A)

the employers are in the same trade, industry, line of business, or profession; or

(B)

each employer has a principal place of business in the same region that does not exceed the boundaries of a single State or a metropolitan area (even if the metropolitan area includes more than 1 State).

(2) Same trade, industry, or line of business

In the case of a group or association that is sponsoring a group health plan under this section and that is itself an employer member of the group or association, the group or association shall be deemed for purposes of paragraph (1)(A) to be in the same trade, industry, line of business, or profession, as applicable, as the other employer members of the group or association.

(3) Nondiscrimination

The standards under paragraph (1) shall not be implemented in a manner that is subterfuge for discrimination as is prohibited under subsection (e).

(e) Nondiscrimination

(1) In general

A group or association of employers sponsoring a group health plan under this section, and any health coverage sponsored by such group or association, shall comply with each of the following:

(A)

The group or association shall not condition employer membership in the group or association on any health factor of any individual who is or may become eligible to participate in the group health plan sponsored by the group or association.

(B)

The group health plan sponsored by the group or association shall comply with the rules under section 2590.702(b) of title 29, Code of Federal Regulations (as in effect on June 21, 2018), with respect to nondiscrimination in rules for eligibility for benefits, subject to subparagraph (D).

(C)

The group health plan sponsored by the group or association shall comply with the rules under section 2590.702(c) of title 29, Code of Federal Regulations (as in effect on June 21, 2018), with respect to nondiscrimination in premiums or contributions required by any participant or beneficiary for coverage under the plan, subject to subparagraph (D).

(D)

In applying subparagraphs (B) and (C), the group or association may not treat the employees of different employer members of the group or association as distinct groups of similarly situated individuals based on a health factor of 1 or more individuals.

(2) Definition of health factor

For purposes of this subsection, the term health factor has the meaning given such term in section 2590.702(a) of title 29, Code of Federal Regulations (as in effect on June 21, 2018).

(f) Dual treatment of working owners as employers and employees

(1) In general

A person determined in accordance with paragraph (2) to be a working owner of a trade or business may qualify as both an employer and as an employee of the trade or business for purposes of the requirements under subsection (b), including the requirements under paragraphs (2) and (6) of such subsection.

(2) Working owner

(A) Eligibility

A person shall qualify as a working owner if a responsible fiduciary of the group health plan reasonably determines that the person—

(i)

does not have any common law employees;

(ii)

has an ownership right of any nature in a trade or business, whether incorporated or unincorporated, including a partner and other self-employed individual;

(iii)

is earning wages or self-employment income from the trade or business for providing personal services to the trade or business; and

(iv)

either—

(I)

works on average at least 20 hours per week, or at least 80 hours per month, providing personal services to the person's trade or business; or

(II)

has wages or self-employment income from such trade or business that at least equals the person's cost of coverage for participation by the person, and any covered beneficiaries, in the group health plan sponsored by the group or association in which the person is participating.

(B) Determination

The determination under subparagraph (A) shall be made when the person first becomes eligible for coverage under the group health plan.

(C) Reasonable monitoring procedures

A responsible fiduciary of the group health plan shall, through reasonable monitoring procedures, periodically confirm the continued eligibility of a person to qualify as a working owner under subparagraph (A) for purposes of meeting the requirements under subsection (b) for the group health plan sponsored under this section.

(g) Applicability

(1) Fully insured

This section shall apply beginning on September 1, 2026, with respect to a group or association of employers sponsoring a group health plan that is fully insured.

(2) Plans expanding to include broader group

This section shall apply beginning on January 1, 2026, with respect to a group or association of employers sponsoring a group health plan that—

(A)

is not fully insured;

(B)

is in existence on June 21, 2025;

(C)

meets the requirements that applied with respect to such plan before June 21, 2025; and

(D)

chooses to be a plan sponsored under this section (and subject to the requirements under subsections (b) through (f)).

(3) Other association health plans

This section shall apply beginning on April 1, 2026, with respect to any other group or association of employers sponsoring a group health plan.

(4) Other criteria in advisory opinions

The criteria under this section shall not invalidate any criteria provided in an advisory opinion, in effect on or after the date of enactment of the Fair Care Act of 2026, that the Secretary may use to determine if a group or association of employers is an employer under section 3(5) for purposes of sponsoring a group health plan.

(h) Determination of employer or joint employer status

(1) In general

Participating in or facilitating a group health plan sponsored by a bona fide group or association of employers pursuant to subsection (a) shall not be construed as establishing an employer or joint employer relationship under any Federal or State law.

(2) Application of provision

Paragraph (1) shall apply to a group health plan sponsored or facilitated by a franchisor and any franchisee, by multiple franchisors for the benefit of the employees of such franchisors and their franchisees, by multiple franchisees for the benefit of the employees of such franchisees, by a franchisor whose franchisee or franchisees participate or participates in the plan, or by a person or entity that contracts with any individual as an independent contractor for whom the plan benefits.

(i) Rule of construction

Nothing in this section shall be construed as repealing or otherwise limiting the application of this Act (including section 712 relating to mental health parity) to group health plans and employee welfare benefit plans.

(a) Definition

Section 2791(b) of the Public Health Service Act (42 U.S.C. 300gg–91(b)) is amended by adding at the end the following:

(6) Short-term limited duration insurance

The term short-term limited duration insurance means health insurance coverage provided pursuant to a contract with a health insurance issuer that has an expiration date specified in the contract (not taking into account any extensions that may be elected by the policyholder with or without the issuer’s consent) that is less than 12 months after the original effective date of the contract.

(b) Guaranteed renewability

Section 2703 of the Public Health Service Act (42 U.S.C. 300gg–2) is amended—

(c) Applicability

The amendments made by subsections (a) and (b) shall apply with respect to contracts for short-term limited duration insurance that take effect on or after January 1, 2026.

(a) Establishment

Not later than 2 years after the date of enactment of this Act, the Secretary of Health and Human Services shall establish the Invisible Guaranteed Coverage Pool Reinsurance Program (in this section referred to as the IGCPR program).

(b) State grants

Under the IGCPR program, the Secretary shall, from amounts appropriated under subsection (f) for a fiscal year, award grants to States for such fiscal year, in amounts determined in accordance with the allocation methodology specified under subsection (d). Such grants shall be used for the purpose of establishing or maintaining a qualifying Invisible Guaranteed Coverage Pool for the State.

(c) Federal default

(d) Allocation methodology

Not later than six months after the establishment of the IGCPR program, the Secretary shall specify an allocation methodology for determining the amount of funds appropriated under subsection (f) for a fiscal year to be allocated for each State for purposes of subsections (b) and (c). Such methodology shall be based on the number of residents of each State and the general health status of such residents.

(e) Qualifying Invisible Guaranteed Coverage Pool

For purposes of this section, the term qualifying Invisible Guaranteed Coverage Pool means, with respect to a State, a method of designation under which health insurance issuers identify individuals who experience higher than average health costs as determined by the State and are enrolled in health insurance coverage offered in the individual market, and cede the risk of spending more than $10,000 on health care services for a single individual to the pool without affecting the premium paid by the designated individuals or their terms of coverage. With respect to such pool, the State, or an entity operating the pool on behalf of the State, shall establish—

(f) Appropriations

There is appropriated to the Secretary of Health and Human Services $200,000,000,000 to carry out this section for the period of the first 10 years after the establishment of the IGCPR program.

(g) Tax on health insurance plans sold on exchanges

(h) Report

The Secretary of Health and Human Services, in collaboration with the Comptroller General of the United States, shall submit to Congress, not later than 5 years after the date of enactment of this Act, and again 5 years thereafter, a report on the status of reinsurance pool funding, along with any recommendations with respect to future allocations or funding methods for such pool.

(a) In general

Chapter 43 of the Internal Revenue Code of 1986 is amended by striking section 4980H.

(b) Repeal of Related Reporting Requirements

Subpart D of part III of subchapter A of chapter 61 of such Code is amended by striking section 6056.

(c) Conforming amendments

(d) Effective date

(a) In general

Section 36B(c)(2) of the Internal Revenue Code of 1986 is amended—

(b) Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

(a) In general

Section 106 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(h) Limitation

(1) In general

Subsection (a) shall not apply to the extent that employer-provided coverage under health plans for an employee for a taxable year exceeds—

(A)

$10,200 for self-only coverage, and

(B)

$27,500 for all other coverage.

(2) In general

In the case of any calendar year after 2026, the dollar amounts in paragraph (1) shall each be increased by an amount equal to—

(A)

such dollar amount, multiplied by

(B)

the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined—

(i)

by substituting calendar year 2025 for calendar year 2018 in subparagraph (A)(ii) thereof, and

(ii)

by substituting for the C–CPI–U referred to in section 1(f)(3)(A) the amount that such CPI would have been if the annual percentage increase in CPI with respect to each year after 2024 and before 2034 had been one percentage point greater.

(3) Terms related to CPI

(A) Annual percentage increase

For purposes of subparagraph (B)(ii)(II), the term annual percentage increase means the percentage (if any) by which C–CPI–U for any year exceeds the C–CPI–U for the prior year.

(B) Other terms

Terms used in this paragraph which are also used in section 1(f)(3) shall have the same meanings as when used in such section.

(b) Effective date

The amendments made by this section shall apply with respect to taxable years beginning after December 31, 2026.

(a) Modification of applicable percentage

Section 36B(b)(3)(A) of the Internal Revenue Code of 1986 is amended to read as follows:

(A) Applicable percentage

(i) In general

The applicable percentage for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial percentage to the final percentage specified in such table for such income tier with respect to a taxpayer of the age involved:

In the case of household income (expressed as a percent of the poverty line) within the following income tier:	Up to Age 29	Age 30–39	Age 40–49	Age 50–59	Over Age 59
	Initial %	Final %	Initial %	Final %	Initial %	Final %	Initial %	Final %	Initial %	Final %
Up to 100%	0	0	0	0	0	0	0	0	0	0
100%–133%	2	2	2	2	2	2	2	2	2	2
133%–150%	3	4.3	3	4.3	3	4.3	3	4.3	3	4.3
150%–200%	4.3	6.7	4.3	6.7	4.3	6.7	4.3	6.7	4.3	6.7
200%–250%	6.7	6.7	6.7	7.6	6.7	8.3	6.7	8.3	6.7	8.3
250%–300%	6.7	6.7	7.6	7.6	8.3	9.8	8.3	9.8	8.3	9.8
300%–400%	6.7	7	7.6	8	9.8	10	9.8	10	9.8	10
400%–600%	7	9	8	10	10	15	10	15	10	15

(ii) Age determinations

(I) In general

For purposes of clause (i), the age of the taxpayer taken into account under clause (i) with respect to any taxable year is the age attained by such taxpayer before the close of such taxable year.

(II) Joint returns

In the case of a joint return, the age of the older spouse shall be taken into account under clause (i).

(iii) Indexing

In the case of any taxable year beginning after calendar year 2026, the initial and final percentages contained in clause (i) shall be adjusted to reflect—

(I)

the excess (if any) of the rate of premium growth for the period beginning with calendar year 2013 and ending with calendar year 2025, over the rate of income growth for such period, and

(II)

in addition to any adjustment under subclause (I), the excess (if any) of the rate of premium growth for calendar year 2025, over the rate of growth in the consumer price index for calendar year 2025.

(iv) Failsafe

Clause (iii)(II) shall apply only if the aggregate amount of premium tax credits under this section and cost-sharing reductions under section 1402 of the Patient Protection and Affordable Care Act for the preceding calendar year exceeds an amount equal to 0.504 percent of the gross domestic product for such calendar year.

(b) Expansion of eligibility

Section 36B of the Internal Revenue Code of 1986 is amended—

(c) Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Section 1302 of the Patient Protection and Affordable Care Act (42 U.S.C. 18022) is amended—

(b) Effective date

The amendments made by this section shall apply with respect to plan years beginning on or after January 1, 2026.

(a) Streamlining the State Application Process

Section 1332 of the Patient Protection and Affordable Care Act (42 U.S.C. 18052) is amended—

(b) Providing expedited approval of State waivers

Section 1332(d) of the Patient Protection and Affordable Care Act (42 U.S.C. 18052(d)) is amended—

(c) Providing certainty for State-Based reforms

Section 1332(e) of the Patient Protection and Affordable Care Act (42 U.S.C. 18052(e)) is amended by striking No waiver and all that follows through the period at the end and inserting the following: “A waiver under this section—

(1)

shall be in effect for a period of 6 years unless the State requests a shorter duration;

(2)

may be renewed, subject to the State meeting the criteria for approval otherwise applicable under this section, for unlimited additional 6-year periods upon application by the State; and

(3)

may not be suspended or terminated, in whole or in part, by the Secretary at any time before the date of expiration of the waiver period (including any renewal period under paragraph (2)), unless the Secretary determines that the State materially failed to comply with the terms and conditions of the waiver.

(d) Ensuring Patient Access to More Flexible Health Plans

Section 1332(b)(1)(B) of the Patient Protection and Affordable Care Act (42 U.S.C. 18052(b)(1)(B)) is amended by striking at least as affordable and inserting of comparable affordability, including for low-income individuals, individuals with serious health needs, and other vulnerable populations,.

(e) Applicability

The amendments made by this Act to section 1332 of the Patient Protection and Affordable Care Act (42 U.S.C. 18052)—

(a) Exchanges

Paragraph (7) of section 1311(c) of the Patient Protection and Affordable Care Act (42 U.S.C. 18031(c)), as added by section 106, is amended by adding at the end the following new subparagraph:

(B) Enrollments other than during initial, open, and special enrollment periods

Beginning with plan year 2026, an Exchange may provide for enrollments during periods in addition to open enrollment periods described in subparagraph (A) or paragraph (6) and special enrollment periods described in paragraph (6).

(b) Health plans

Subpart I of part A of title XXVII of the Public Health Service Act is amended by adding at the end the following new section:

2710. Enrollment outside of initial, open, and special enrollment period

Beginning with plan year 2026, a group health plan and a health insurance issuer offering group or individual health insurance coverage may provide for enrollment in such plan or coverage during periods in addition to initial, open, or special enrollment periods. In the case that an individual enrolls in such plan or coverage during a period pursuant to the previous sentence, the plan or issuer may charge the individual a one-time enrollment fee.

(1)

in paragraph (6), by striking The Secretary and inserting Subject to paragraph (7), the Secretary; and

(2)

by adding at the end the following new paragraph:

(7) Flexibility for enrollment periods

(A) State-operated Exchanges open enrollment periods

In the case of an Exchange operated by a State, beginning with plan years of 1 year after the date of enactment of this Act, the Exchange may provide for open enrollment periods (after the initial enrollment period) every 12, 24, or 36 months, as determined by the State.

(a) Authorization of appropriations

There is authorized to be appropriated $160,000,000 to the Federal Trade Commission to hire staff to investigate, as consistent with the Sherman Antitrust Act and other relevant Federal laws, anti-competitive mergers and practices under such laws to the extent such mergers and practices relate to providers of inpatient and outpatient health care services, as defined by the Secretary of Health and Human Services.

(b) Medicare Advantage rates applied to certain HHI hospitals

(c) Grants for hospital infrastructure improvement

(d) Critical access hospital reimbursement rates

(1)

by striking , and any and inserting , any; and

(2)

by inserting before the period at the end the following: , and any organization described in section 501(c)(3) of the Internal Revenue Code of 1986 that is exempt from taxation under section 501(a) of such Code.

(a) Exemption

It shall not be a violation of the antitrust laws for one or more private health insurer issuers or their designated agents to jointly negotiate prices of particular hospital services with a hospital provider with regards to the reimbursement policies of the insurers for those services.

(b) Definitions

For purposes of this section:

(c) Effective date

This section shall take effect on the date of the enactment of this Act but shall not apply with respect to conduct that occurs before such date.

(a) In general

Section 2729B of the Public Health Service Act, as added by section 301, is amended by adding at the end the following:

(b) Protecting Health Plans Network Design Flexibility

(1) In general

A group health plan or a health insurance issuer offering group or individual health insurance coverage shall not enter into an agreement with a provider, network or association of providers, or other service provider offering access to a network of service providers if such agreement, directly or indirectly—

(A)

restricts the group health plan or health insurance issuer from—

(i)

directing or steering enrollees to other health care providers; or

(ii)

offering incentives to encourage enrollees to utilize specific health care providers;

(B)

requires the group health plan or health insurance issuer to enter into any additional contract with an affiliate of the provider, such as an affiliate of the provider, as a condition of entering into a contract with such provider;

(C)

requires the group health plan or health insurance issuer to agree to payment rates or other terms for any affiliate not party to the contract of the provider involved; or

(D)

restricts other group health plans or health insurance issuers not party to the contract from paying a lower rate for items or services than the contracting plan or issuer pays for such items or services.

(2) Additional requirement for self-insured plans

A self-insured group health plan shall not enter into an agreement with a provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers if such agreement directly or indirectly requires the group health plan to certify, attest, or otherwise confirm in writing that the group health plan is bound by restrictive contracting terms between the service provider and a third-party administrator that the group health plan is not party to, without a disclosure that such terms exist.

(3) Exception for certain group model issuers

Paragraph (1)(A) shall not apply to a group health plan or health insurance issuer offering group or individual health insurance coverage with respect to—

(A)

a health maintenance organization (as defined in section 2791(b)(3)), if such health maintenance organization operates primarily through exclusive contracts with multi-specialty physician groups, nor to any arrangement between such a health maintenance organization and its affiliates; or

(B)

a value-based network arrangement, such as an exclusive provider network, accountable care organization, center of excellence, a provider sponsored health insurance issuer that operates primarily through aligned multi-specialty physician group practices or integrated health systems, or such other similar network arrangements as determined by the Secretary through rulemaking.

(4) Attestation

A group health plan or health insurance issuer offering group or individual health insurance coverage shall annually submit to, as applicable, the applicable authority described in section 2723 or the Secretary of Labor, an attestation that such plan or issuer is in compliance with the requirements of this subsection.

(c) Maintenance of existing HIPAA, GINA, and ADA protections

Nothing in this section shall modify, reduce, or eliminate the existing privacy protections and standards provided by reason of State and Federal law, including the requirements of parts 160 and 164 of title 45, Code of Federal Regulations (or any successor regulations).

(d) Regulations

The Secretary, not later than 1 year after the date of enactment of the Fair Care Act of 2026, shall promulgate regulations to carry out this section.

(e) Rule of construction

Nothing in this section shall be construed to limit network design or cost or quality initiatives by a group health plan or health insurance issuer, including accountable care organizations, exclusive provider organizations, networks that tier providers by cost or quality or steer enrollees to centers of excellence, or other pay-for-performance programs.

(f) Clarification with respect to antitrust laws

Compliance with this section does not constitute compliance with the antitrust laws, as defined in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)).

(b) Effective date

Section 2729B of the Public Health Service Act (as added by section 301 and amended by subsection (a)) shall apply with respect to any contract entered into on or after the date that is 18 months after the date of enactment of this Act. With respect to an applicable contract that is in effect on the date of enactment of this Act, such section 2729B shall apply on the earlier of the date of renewal of such contract or 3 years after such date of enactment.

(a) In general

Section 1899(b)(1) of the Social Security Act (42 U.S.C. 1395jjj(b)(1)) is amended by striking subparagraphs (C) through (E).

(b) Effective date

The amendment made by subsection (a) shall take effect on January 1, 2026.

(a) In general

A group health plan and a health insurance issuer offering group or individual health insurance coverage (as such terms are defined in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91)) may elect, with respect to a plan year, to provide a set payment amount to an enrollee under such plan or coverage for certain shoppable procedures (as defined in subsection (b)) in accordance with the provisions of this section in lieu of otherwise providing coverage for such a procedure under such plan or coverage, but only if the enrollee so agrees to such set payment amount.

(b) Definition

For purposes of this section, the term shoppable procedure means a procedure specified by the Secretary of Health and Human Services (in this section referred to as the Secretary) with respect to which individuals may be expected to compare prices for such procedure of health care providers and facilities, including primary and preventive services, prenatal care and childbirth, common surgeries that can be scheduled, and other similar services.

(c) Set payment rules

A set payment described in subsection (a) under a group health plan or group or individual health insurance coverage offered by a health insurance issuer shall—

(d) Provision of price information

Each health care provider and facility that may furnish a shoppable procedure during a year shall post in a public area a notice containing the prices that will be charged by such provider of facility with respect to each such procedure to individuals making payment for such services pursuant to a set payment amount described in subsection (a).

(e) EHB waiver authority

The Secretary may waive such provisions of section 1302(b) of the Patient Protection and Affordable Care Act (42 U.S.C. 18022(b)) with respect to a group health plan, health insurance issuer offering group or individual health insurance coverage, and a plan year as the Secretary determines necessary to allow for the provision of set payment amounts described in subsection (a).

(a) Hospitals

Section 2718(e) of the Public Health Service Act (42 U.S.C. 300gg–18(e)) is amended—

(b) Transparency in coverage

Section 1311(e)(3) of the Patient Protection and Affordable Care Act (42 U.S.C. 18031(e)(3)) is amended—

(a) In general

Not later than January 1, 2026, the Secretary of Health and Human Services shall convene an advisory group to provide, in accordance with this section, recommendations on ways the Federal Government could reduce the burden of administrative requirements on hospitals.

(b) Recommendations

Not later than January 1, 2027, the advisory board convened under this section shall—

(c) Membership

The advisory board under this section shall consist of the following members:

(a) In general

Section 340B(d)(2) of the Public Health Service Act (42 U.S.C. 256b(d)(2)) is amended—

(b) Annual reports

Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Administrator of the Health Resources and Services Administration shall submit to Congress a report on information submitted by covered entities for the previous year pursuant to the amendments made by subsection (a).

(a) In general

Subject to subsection (b), for each plan year beginning on or after 1 year after the date of enactment of this Act, a group health plan and a health insurance issuer offering group health insurance coverage shall provide to each individual enrolled in such plan or such coverage for such plan year a notification containing the following:

(b) Limitation

Subsection (a) shall not apply to a group health plan, or a health insurance issuer offering group health insurance coverage, for a plan year if, for such plan year, the number of individuals enrolled under such plan or such coverage was less than 100.

(c) Penalty

In the case that the Secretary of Health and Human Services determines that a group health plan or a health insurance issuer offering group health insurance failed to provide the notice required under subsection (a), the Secretary may impose a civil monetary penalty on the sponsor of such plan or such issuer, as applicable, in an amount not to exceed $100 per individual enrolled in such plan or such coverage per day that such sponsor or issuer failed to provide such notification to such individual.

(d) Definitions

In this section, the terms group health plan, group health insurance coverage, health insurance issuer, and sponsor have the meaning given such terms in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91).

(a) Study

Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study to—

(b) Report

Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall prepare and submit a report on the study conducted under subsection (a) to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and Workforce and the Committee on Energy and Commerce of the House of Representatives.

(a) In general

Section 505(j)(5)(B)(iv) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)) is amended—

(b) Information

Not later than 60 days after the date of enactment of this Act, the Secretary of Health and Human Services (referred to in this subsection as the Secretary) shall publish, as appropriate and available, information sufficient to allow applicants to assess whether the conditions described in subitems (AA) through (CC) of section 505(j)(5)(B)(iv)(II)(bb) of the Federal Food, Drug, and Cosmetic Act (as amended by subsection (a)) have been or will be satisfied for all applications where the exclusivity period under (iv)(I) of section 505(j)(5)(B) of the Federal Food, Drug, and Cosmetic Act (as so amended) has not expired, and shall provide updates to reflect the most recent information available to the Secretary.

(1)

in paragraph (1)—

(2)

in paragraph (2)—

(3)

in paragraph (4)—

(a) In general

Subchapter A of chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.), as amended by section 341, is further amended by adding at the end of the following:

524D. Conditional approval of human drugs for individuals with rare, progressive, and serious diseases

(a) Conditional approval; priority review; other designations

(1) In general

The sponsor of a drug may file with the Secretary an application for conditional approval of an eligible drug described in subsection (b). The Secretary shall approve or deny such application in accordance with subsection (c).

(2) Priority review

The Secretary shall give priority review to an application for conditional approval of an eligible drug described in subsection (b).

(3) Other designations

If a drug that is granted conditional approval under this section is eligible for a special designation by the Secretary under this Act, including as a drug for a rare disease or condition under section 526, all applicable benefits of such other designation shall be available for use under such conditional approval, including any tax credits and waiving of fees under chapter VII.

(4) Other programs

A sponsor of a drug seeking conditional approval of such drug under this section may also seek designation, exclusivity, or approval, as applicable, of such drug under other applicable provisions of this Act or the Public Health Service Act, subject to the requirements of such provisions.

(b) Eligibility

(1) In general

A drug may be eligible for conditional approval under this section if such drug is intended to treat a disease or condition that is—

(A)

rapidly progressive, terminal, and has substantial unmet medical need, as determined by the Secretary; or

(B)

a rare disease or condition (as defined in section 526(a)(2)) that results in a substantially shortened lifespan, substantial reduction in quality of life, or other substantial adverse health effects, as determined by the Secretary.

(2) Exclusion from eligibility

A drug that is intended to treat or respond to a material threat identified by the Secretary of Homeland Security under section 319F–2(c)(2)(A)(ii) of the Public Health Service Act shall not be eligible for conditional approval under this section.

(c) Standard of review for conditional approval

(1) Requirements

The Secretary shall only approve an application for conditional approval of a drug under this section if—

(A)

the Secretary determines that—

(i)

(I)

evidence of safety for the drug has been established by—

(aa)

the completion of a phase 1 clinical investigation of the drug (as described in section 312.21 of title 21, Code of Federal Regulations (or successor regulations)); or

(bb)

another demonstration of safety, as determined appropriate by the Secretary; and

(II)

evidence of effectiveness in treating a given indication (which indication is congruent with the eligibility requirements of subsection (b)), as established by an ongoing or completed phase 2 clinical investigation of the drug (as described in section 312.21 of title 21, Code of Federal Regulations (or successor regulations)); or

(ii)

in the case of a drug that is intended to treat a terminal pediatric rare disease or condition (as defined in section 526(a)(2)) that does not predominately affect adults—

(I)

evidence of safety for the drug has been established in accordance with clause (i)(I); and

(II)

the drug shows preliminary evidence of clinical effectiveness based upon studies in animal models; and

(B)

the sponsor has provided a written affirmation of the sponsor’s intent to pursue under section 505 of this Act or section 351 of the Public Health Service Act approval of the drug, which affirmation shall include a justification and a plan for pursuing such approval.

(2) Rolling, real-time review

(A) In general

If the Secretary determines, after preliminary evaluation of data submitted by the sponsor, that a drug may meet the standard for conditional approval, the sponsor may submit portions of an application for conditional approval of a drug under this section for evaluation by the Secretary before the sponsor submits a complete application, which submission shall include—

(i)

a schedule for submission of information necessary to make the application complete; and

(ii)

a payment of any fee that may be required under section 736.

(B) Review

The Secretary—

(i)

shall evaluate each application submitted under subparagraph (A) to assess whether such application is complete or ready to be filed; and

(ii)

may commence review of portions of such application for approval.

(3) Use of real-world evidence

(A) In general

The Secretary shall allow the use of real-world evidence (as defined in section 505F(b)), including real-world data used to generate real-world evidence, and of external sources of data, including prospective or retrospective natural history data, to support an application for conditional approval under this section.

(B) Data integrity requirements

In using evidence described in subparagraph (A) to support an application for conditional approval under this section, the sponsor shall consider the guidance of the Food and Drug Administration entitled Data Standards for Drug and Biological Product Submissions Containing Real-World Data and dated December 2023 (or successor guidance).

(d) FDA authority To withdraw conditional approval

(1) In general

The Secretary may withdraw the conditional approval of a drug under this section if—

(A)

after adequate review of appropriate safety data, including data from an observational registry established under subsection (g), the Secretary determines that such data no longer supports conditional approval;

(B)

the Secretary determines that the application for conditional approval submitted under subsection (a)(1) contained an untrue statement of material fact; or

(C)

the Secretary determines that the drug is no longer eligible under subsection (b).

(2) FDA examination authority

(A) In general

For purposes of determining whether to withdraw the conditional approval of a drug under paragraph (1), the Secretary may—

(i)

review any available clinical data made available through clinical trials or an observational registry under subsection (g), applicable to such drug; and

(ii)

determine whether the sponsor of such drug is in violation of a requirement established under paragraph (3) or (4) of section 505(o) or section 505–1 with respect to the drug.

(B) Transparency

(i) In general

The Secretary may require drug sponsors and observational registries under subsection (g) to submit the data described in subparagraph (A) for the purposes of the review under that subparagraph.

(ii) Fines

The Secretary may levy fines on sponsors and observational registries that do not comply with a request for data under clause (i) within such reasonable timeframe as is established by the Secretary.

(3) Effect of withdrawal

(A) Availability to new patients

(i) In general

If a conditional approval is withdrawn under this subsection, the sponsor may not make the drug available to any new patients, but may continue to make such drug available to patients who started taking the drug prior to the date of withdrawal.

(ii) Effect

Nothing in this subparagraph shall be construed to require—

(I)

a patient to continue taking a conditionally approved drug if such patient decides to stop taking such drug; or

(II)

the sponsor to ensure such drug continues to be manufactured after the date of withdrawal.

(B) Civil monetary penalty

Any sponsor who makes available to new patients a drug for which conditional approval has been withdrawn under this subsection shall be subject to such civil monetary penalty as is determined by the Secretary.

(4) Withdrawal notice

Upon determining to withdraw the conditional approval of a drug under paragraph (1), the Secretary shall submit written notice to the sponsor of such drug and such withdrawal shall be effective on the date that is 14 days after the date of such submission of notice.

(5) Appeals

Not later than 180 days after the date of enactment of this section, the Secretary, by rule, shall establish a process by which a sponsor of a drug for which conditional approval was withdrawn under paragraph (1) may appeal such withdrawal.

(6) Automatic withdrawal

(A) In general

If the sponsor of a drug that receives conditional approval under this section does not submit an application for renewal of such conditional approval under subsection (f)(2) by the deadline under that subsection, such conditional approval shall automatically be withdrawn in accordance with paragraph (3) on the date on which such conditional approval expires.

(B) Marketing requirement

If any drug that receives conditional approval under this section is not brought to market within 1 year of the date on which the conditional approval is granted, such conditional approval, along with any benefits described in subsection (a)(3), shall automatically be withdrawn in accordance with paragraph (3) on such date.

(C) No right to appeal; effect of automatic withdrawal

(i) In general

A sponsor shall not have the right to appeal an automatic withdrawal under this paragraph.

(ii) Effect

The Secretary shall have no means or power to prevent an automatic withdrawal under this paragraph from occurring.

(e) Labeling; review of materials

(1) In general

Sponsors may not make available to patients a drug conditionally approved under this section, unless—

(A)

all labeling and advertising of such drug contains the statement conditionally approved for a limited population in a prominent manner and adjacent to, and not more prominent than—

(i)

the proprietary name of such drug, if any; or

(ii)

if there is no proprietary name, the established name of such drug, if any, as defined in section 502(e)(3), or, in the case of a drug that is a biological product, the proper name, as defined by regulation; and

(B)

the prescribing information for the drug required by section 201.57 of title 21, Code of Federal Regulations (or any successor regulation), includes the following statement: This drug is conditionally approved for use in a limited and specific population. This drug has not received full approval by the Food and Drug Administration. Conditional approval of this drug may be withdrawn at short notice..

(2) Submission

Not later than 45 days before such materials are distributed, all promotional, educational, and marketing materials for such drug shall be submitted to the Secretary for review.

(3) Public list

The Secretary shall maintain a list of all drugs conditionally approved under this section on a publicly accessible website. Such website shall briefly describe what each conditionally approved drug is and list the 1 or more diseases or conditions for which the drug is indicated.

(f) Renewal of conditional approval; requirement To bring drug to market

(1) Duration; renewals

The conditional approval for a drug under this section is effective for a 2-year period. The sponsor may request renewal of such conditional approval for up to 3 subsequent 2-year periods. Conditional approval with respect to a drug shall not exceed a total of 8 years from the initial date the drug was granted conditional approval.

(2) Applications for renewal of conditional approval

(A) In general

Except as provided in subparagraph (C), the sponsor of a drug seeking a renewal of conditional approval for such drug under this subsection shall submit to the Secretary, not later than 180 days before the date on which such conditional approval expires, an application that contains the applicable information described in paragraph (3) in a standardized format determined by the Secretary.

(B) Process for granting renewals

Not later than 180 days after the date of enactment of this section, the Secretary, by rule, shall establish the process for granting a renewal under this subsection.

(C) Exemption for small population diseases

(i) In general

The Secretary shall exempt from the requirements of subparagraph (A) and paragraph (3) an application for a renewal of conditional approval for a drug under this subsection if the Secretary determines that the population affected by the disease or condition that the drug is intended to treat does not support additional preliminary evidence of effectiveness (as defined in paragraph (3)(D)).

(ii) Application for exemption

Sponsors may submit an application for exemption under this subparagraph not later than 180 days before the date on which the conditional approval expires.

(iii) Application process

Not later than 180 days after the date of enactment of this section, the Secretary shall establish a standardized application process for purposes of this subparagraph.

(iv) Deadline

The Secretary shall approve or deny an application under this subparagraph before the date on which the conditional approval expires.

(v) Appeals

Not later than 180 days after the date of enactment of this section, the Secretary shall establish a process under which a sponsor my appeal a denial of an application under this subparagraph.

(3) Additional preliminary evidence of effectiveness

The information described in this paragraph is the following:

(A) For the first approval renewal

With respect to an application under paragraph (2) for the first renewal of conditional approval for a drug under this subsection, additional preliminary evidence of effectiveness of the drug, as compared to the evidence provided in the initial application for conditional approval for the drug under subsection (c).

(B) For the second approval renewal

With respect to an application under paragraph (2) for the second renewal of conditional approval for a drug under this subsection, additional preliminary evidence of effectiveness of the drug, as compared to the evidence provided in the renewal application described in subparagraph (A).

(C) For the final approval renewal

With respect to an application under paragraph (2) for the third renewal of conditional approval for a drug under this subsection, a written affirmation from the head of the drug’s review division of the Office of New Drugs or the Office of Therapeutic Products asserting that a third renewal is necessary—

(i)

for patients who have benefitted from such drug to retain access to such drug; and

(ii)

to generate additional preliminary evidence of effectiveness for the purposes of attaining approval under section 505 of this Act or section 351 of the Public Health Service Act.

(D) Definition

In this paragraph, the term preliminary evidence of effectiveness means—

(i)

clinical evidence generated by an ongoing or completed clinical trial conducted in accordance with section 11.22 of title 42, Code of Federal Regulations (or successor regulations);

(ii)

real-world evidence (as defined in section 505F(b)); or

(iii)

evidence from an observational registry under subsection (g).

(4) Denial of renewal on the basis of data fraud

The Secretary may deny the application for renewal of conditional approval for a drug under this subsection if the Secretary, in conducting a review under subsection (d)(2), finds that the evidence provided in such application under subparagraph (A) or (B) of paragraph (3) was fraudulently manipulated by the applicable observational registry and that such application substantially relies on such data.

(g) Observational registries

(1) Establishment

(A) In general

Subject to subparagraph (C), the sponsor of a drug conditionally approved under this section shall establish an observational registry, for patients who are or will be treated with such drug, that pertains to the disease or condition that the drug is intended to treat.

(B) Registries

In establishing an observational registry for a drug under subparagraph (A), the sponsor may—

(i)

establish a new observational registry;

(ii)

use an existing observational registry that pertains to the disease or condition such drug is intended to treat;

(iii)

combine 1 or more existing observational registries that pertain to the disease or condition such drug is intended to treat with a new observational registry; or

(iv)

combine 2 or more existing observational registries that pertain to the disease or condition such drug is intended to treat.

(C) Approval of registry and right to appeal

Not later than 180 days after the date of enactment of this section, the Secretary shall establish—

(i)

a process to approve or deny the establishment of an observational registry under subparagraph (A); and

(ii)

a process for sponsors that received such a denial to appeal the denial.

(2) Requirement for patients to enroll in observational registry

(A) In general

A drug conditionally approved under this section shall not be made available to a patient unless such patient is enrolled in the applicable observational registry described in paragraph (1).

(B) Informed consent

(i) In general

Prior to enrolling in an observational registry under subparagraph (A), a patient shall provide informed consent in accordance with clause (ii).

(ii) Application of certain requirements

The requirements for informed consent under part 50 of subchapter A of chapter I of title 21, Code of Federal Regulations (or successor regulations), shall apply to enrollment an observational registry under this paragraph.

(3) Submission of patient data

(A) In general

The sponsor of a drug conditionally approved under this section shall be responsible for obtaining and submitting patient data to the applicable observational registry described in paragraph (1).

(B) Submission standards

Not later than 180 days after the date of enactment of this section, the Secretary shall establish data submission standards for sponsors to comply with for purposes of subparagraph (A) to ensure that registry data is consistent and clinically informed.

(4) Requirements for registries

An observational registry described in paragraph (1) for a drug conditionally approved under this section may be operated by the sponsor of such drug or, at the sponsor’s discretion, a third party, for-profit organization, or nonprofit organization.

(5) Risk and benefit data

(A) In general

The sponsor of a drug conditionally approved under this section shall submit relevant risk and benefit data to the applicable observational registry described in paragraph (1).

(B) Online portal

The Secretary shall operate an online portal on an existing website of the Secretary for sponsors to submit data described in subparagraph (A).

(6) Accessibility

(A) In general

An observational registry described in paragraph (1) shall—

(i)

not later than 30 days after receipt of a request, provide patients (or their designated representatives) with access to such patient’s personal registry information; and

(ii)

provide approved researchers and medical professionals access to de-identified and aggregated data from the registry for the purposes of indication- and disease-specific and translational research into conditions and diseases relating to the disease or condition that the drug tracked by the observational registry is intended to treat.

(B) Approved researchers and medical professionals

Not later than 180 days after the date of enactment of this section, the Secretary, by rule, shall establish a process for approving researchers and medical professionals for purposes of subparagraph (A)(ii).

(7) Effect

Nothing in this section shall be construed to modify or limit the Secretary’s authority to require for a drug conditionally approved under this section any type of postapproval study under any other provision of law, including sections 505(o)(3), 505B, and 506.

(h) Pursuit of a different indication

(1) In general

In the case of a drug conditionally approved under this section for which such approval was withdrawn under subsection (d), expired under subsection (f)(1), or was denied for renewal under subsection (f)(4), not later than 2 years after the date of withdrawal, expiration, or denial, as applicable, the sponsor of such drug shall have the opportunity to petition the Secretary to receive conditional approval of such drug, in accordance with this section, for a different indication.

(2) Process

Not later than 180 days after the date of enactment of this section, the Secretary shall establish a process for petitions under paragraph (1).

(i) Transition to other forms of approval

(1) In general

A drug that receives conditional approval under this section may be granted approval under section 505 of this Act or section 351 of the Public Health Service Act during the period in which such conditional approval is in effect. Effective on the date on which approval for such drug is granted under section 505 of this Act or section 351 of the Public Health Service Act, such conditional approval shall be automatically withdrawn in accordance with subsection (d)(3).

(2) Consideration of certain evidence

In determining whether to approve under section 505 of this Act or section 351 of the Public Health Service Act a drug that has received conditional approval under this section, the Secretary may consider evidence from the observational registry for the drug under subsection (g).

(j) Informed consent

(1) In general

Prior to being prescribed a drug conditionally approved under this section, a patient shall provide informed consent in accordance with paragraph (2).

(2) Application of certain requirements

The requirements for informed consent under part 50 of subchapter A of chapter I of title 21, Code of Federal Regulations (or successor regulations), shall apply to drugs conditionally approved under this section.

(3) Observational registries

An observational registry established for a drug in accordance with subsection (g) may obtain, and maintain records of, informed consent of a patient on behalf of the drug sponsor, in accordance with paragraph (2).

(4) Common rule

Drugs conditionally approved under this section shall comply with subpart A of part 46 of title 45, Code of Federal Regulations (commonly known as the Common Rule) (or successor regulations), if applicable.

(k) Limitation on liability

With respect to any claim under State law relating to a drug made available pursuant to a grant of conditional approval under this section, no liability shall lie against a sponsor or manufacturer of the drug, or any health care provider who prescribes or administers the drug, absent intentional wrongdoing.

(l) Report to Congress

(1) In general

Not later than 2 years after the date of enactment of this section, and once every 2 years thereafter, the Secretary, in collaboration with drug sponsors, shall submit a report to Congress on all drugs granted conditional approval under this section. Such report shall include—

(A)

an estimated number of patients treated with each such drug, and the number of patients tracked in an observational registry under subsection (g) with respect to each such drug, if applicable;

(B)

a discussion, at an aggregate level, of the types and amounts of data obtained through observational registries under subsection (g), such as patient treatments and uses, length of use, side effects encountered, relevant biomarkers, scan results, cause of death and how long the patient lived, and adverse drug effects;

(C)

a list of all such drugs for which an application for approval under this section, or an application for an extension of conditional approval under this section, has been submitted; and

(D)

the number of all applications granted and denied conditional approval under this section.

(2) Sponsor participation

Not later than 180 days before the date on which the Secretary submits a report under paragraph (1), the sponsor of a drug conditionally approved under this section shall provide to the Secretary the information described in subparagraphs (A) and (B) of paragraph (1), as applicable.

(3) Notice authority

The Secretary may notify sponsors of drugs conditionally approved under this section and observational registries under subsection (g) as necessary to complete a report under paragraph (1).

(b) Conforming amendment

Section 505(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(a)) is amended by inserting , or there is in effect a conditional approval under section 524C with respect to such drug before the period.

(c) Reimbursement

(a) In general

Section 527(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)) is amended to read as follows:

(a) Exclusivity

(1) In general

Except as provided in subsection (b), if the Secretary approves an application filed pursuant to section 505, or issues a license under section 351 of the Public Health Service Act, for a drug designated under section 526 for a rare disease or condition, the Secretary may not approve an application filed pursuant to section 505, or issue a license under section 351 of the Public Health Service Act, for the same drug for the same disease or condition for a person who is not the holder of such approved application or of such license until the expiration of the exclusivity period described in paragraph (2).

(2) Exclusivity period described

The exclusivity period described in this paragraph, with respect to a drug designated under section 526 for a rare disease or condition, is—

(A)

a single 7-year period of exclusivity with respect to the first designation of such drug under such section for that rare disease or condition; or

(B)

in the case of a drug that has previously received a period of exclusivity under paragraph (1), a single 3-year period of exclusivity with respect to any subsequent designation of such drug under such section for any other rare disease or condition.

(3) Limitation

In the case of a drug that has received two periods of exclusivity pursuant to paragraph (1), no additional exclusivity period under this section is available with respect to such drug, regardless of whether such drug has been designated under section 526 for a rare disease or condition that is distinct from the rare disease or condition for which such exclusivity periods were granted.

(b) Conforming amendments

(a) In general

Section 351(k)(7)(A) of the Public Health Service Act (42 U.S.C. 262(k)(7)(A)) is amended by striking 12 years and inserting 5 years.

(b) Conforming changes

Paragraphs (2)(A) and (3)(A) of section 351(m) of the Public Health Service Act (42 U.S.C. 262(m)) is amended by striking 12 years each place it appears and inserting 5 years.

(c) Applicability

This section and the amendments made by this section apply only with respect to a biological product for which the reference product (as such term is used in section 351 of the Public Health Service Act (42 U.S.C. 262)) is licensed under subsection (a) of such section on or after the date of enactment of this Act.

(a) Exemption

It shall not be a violation of the antitrust laws for one or more private health insurance issuers or their designated agents to jointly negotiate wholesale acquisition prices of a prescription drug with a manufacturer of a prescription drug with regards to the reimbursement policies of the insurers of the manufacturer’s drugs so long as no one single wholesale acquisition price is jointly determined between the insurance issuers or their designated agents.

(b) Definitions

For purposes of this section:

(c) Effective date

This section shall not apply with respect to any conduct that occurs before the date of enactment of this Act.

(1)

by striking except that a product and inserting “except that—

(1)

a product;

(2)

by striking Act. and inserting Act; and; and

(3)

by adding at the end the following:

(2)

no requirement under such Act regarding an official compendium (as defined in section 201(j) of such Act), or other reference in such Act to an official compendium (as so defined), shall apply with respect to a biological product subject to regulation under this section.

(a) In general

Section 351(k) of the Public Health Service Act (42 U.S.C. 262(k)) is amended—

(b) Conforming amendments

(c) Application

The amendment made by subsection (a)(4) to section 351(k)(6) of the Public Health Service Act (42 U.S.C. 262(k)(6)) shall apply only with respect to applications approved under section 351(k) of such Act on or after the date of enactment of this Act. Any period of exclusivity granted under section 351(k)(6) of such Act with respect to an application approved under such section 351(k) before the date of enactment of this Act shall apply in accordance with such section 351(k)(6), as in effect on the day before the date of enactment of this Act.

(a) Congressional review

Part I of title 5, United States Code, is amended by inserting after chapter 8 the following:

8a Congressional Review of Food and Drug Administration Rulemaking

810. Applicability

This chapter applies in lieu of chapter 8 with respect to the Food and Drug Administration.

811. Congressional review

(a)

(1)

(A)

Before a rule may take effect, the Food and Drug Administration shall satisfy the requirements of section 818 and shall publish in the Federal Register a list of information on which the rule is based, including data, scientific and economic studies, and cost-benefit analyses, and identify how the public can access such information online, and shall submit to each House of the Congress and to the Comptroller General a report containing—

(i)

a copy of the rule;

(ii)

a concise general statement relating to the rule;

(iii)

a classification of the rule as a major or nonmajor rule, including an explanation of the classification specifically addressing each criteria for a major rule contained within sections 814(2)(A), 814(2)(B), and 814(2)(C);

(iv)

a list of any other related regulatory actions intended to implement the same statutory provision or regulatory objective as well as the individual and aggregate economic effects of those actions; and

(v)

the proposed effective date of the rule.

(B)

On the date of the submission of the report under subparagraph (A), the Food and Drug Administration shall submit to the Comptroller General and make available to each House of Congress—

(i)

a complete copy of the cost-benefit analysis of the rule, if any, including an analysis of any jobs added or lost, differentiating between public and private sector jobs;

(ii)

the Food and Drug Administration’s actions pursuant to sections 603, 604, 605, 607, and 609 of this title;

(iii)

the Food and Drug Administration’s actions pursuant to sections 202, 203, 204, and 205 of the Unfunded Mandates Reform Act of 1995; and

(iv)

any other relevant information or requirements under any other Act and any relevant Executive orders.

(C)

Upon receipt of a report submitted under subparagraph (A), each House shall provide copies of the report to the chairman and ranking member of each standing committee with jurisdiction under the rules of the House of Representatives or the Senate to report a bill to amend the provision of law under which the rule is issued.

(2)

(A)

The Comptroller General shall provide a report on each major rule to the committees of jurisdiction by the end of 15 calendar days after the submission or publication date. The report of the Comptroller General shall include an assessment of the Food and Drug Administration’s compliance with procedural steps required by paragraph (1)(B) and an assessment of whether the major rule imposes any new limits or mandates on private-sector activity.

(B)

The Food and Drug Administration shall cooperate with the Comptroller General by providing information relevant to the Comptroller General’s report under subparagraph (A).

(3)

A major rule relating to a report submitted under paragraph (1) shall take effect upon enactment of a joint resolution of approval described in section 812 or as provided for in the rule following enactment of a joint resolution of approval described in section 812, whichever is later.

(4)

A nonmajor rule shall take effect as provided by section 813 after submission to Congress under paragraph (1).

(5)

If a joint resolution of approval relating to a major rule is not enacted within the period provided in subsection (b)(2), then a joint resolution of approval relating to the same rule may not be considered under this chapter in the same Congress by either the House of Representatives or the Senate.

(b)

(1)

A major rule shall not take effect unless the Congress enacts a joint resolution of approval described under section 812.

(2)

If a joint resolution described in subsection (a) is not enacted into law by the end of 70 session days or legislative days, as applicable, beginning on the date on which the report referred to in section 811(a)(1)(A) is received by Congress (excluding days either House of Congress is adjourned for more than 3 days during a session of Congress), then the rule described in that resolution shall be deemed not to be approved and such rule shall not take effect.

(c)

(1)

Notwithstanding any other provision of this section (except subject to paragraph (3)), a major rule may take effect for one 90-calendar-day period if the President makes a determination under paragraph (2) and submits written notice of such determination to the Congress.

(2)

Paragraph (1) applies to a determination made by the President by Executive order that the major rule should take effect because such rule is—

(A)

necessary because of an imminent threat to health or safety or other emergency;

(B)

necessary for the enforcement of criminal laws;

(C)

necessary for national security; or

(D)

issued pursuant to any statute implementing an international trade agreement.

(3)

An exercise by the President of the authority under this subsection shall have no effect on the procedures under section 812.

(d)

(1)

In addition to the opportunity for review otherwise provided under this chapter, in the case of any rule for which a report was submitted in accordance with subsection (a)(1)(A) during the period beginning on the date occurring—

(A)

in the case of the Senate, 60 session days; or

(B)

in the case of the House of Representatives, 60 legislative days,

before the date the Congress is scheduled to adjourn a session of Congress through the date on which the same or succeeding Congress first convenes its next session, sections 812 and 813 shall apply to such rule in the succeeding session of Congress.

(2)

(A)

In applying sections 812 and 813 for purposes of such additional review, a rule described under paragraph (1) shall be treated as though—

(i)

such rule were published in the Federal Register on—

(I)

in the case of the Senate, the 15th session day; or

(II)

in the case of the House of Representatives, the 15th legislative day,

after the succeeding session of Congress first convenes; and

(ii)

a report on such rule were submitted to Congress under subsection (a)(1) on such date.

(B)

Nothing in this paragraph shall be construed to affect the requirement under subsection (a)(1) that a report shall be submitted to Congress before a rule can take effect.

(3)

A rule described under paragraph (1) shall take effect as otherwise provided by law (including other subsections of this section).

812. Congressional approval procedure for major rules

(a)

(1)

For purposes of this section, the term joint resolution means only a joint resolution addressing a report classifying a rule as major pursuant to section 811(a)(1)(A)(iii) that—

(A)

bears no preamble;

(B)

bears the following title (with blanks filled as appropriate): Approving the rule submitted by ___ relating to ___.;

(C)

includes after its resolving clause only the following (with blanks filled as appropriate): That Congress approves the rule submitted by ___ relating to ___.; and

(D)

is introduced pursuant to paragraph (2).

(2)

After a House of Congress receives a report classifying a rule as major pursuant to section 811(a)(1)(A)(iii), the majority leader of that House (or his or her respective designee) shall introduce (by request, if appropriate) a joint resolution described in paragraph (1)—

(A)

in the case of the House of Representatives, within 3 legislative days; and

(B)

in the case of the Senate, within 3 session days.

(3)

A joint resolution described in paragraph (1) shall not be subject to amendment at any stage of proceeding.

(b)

A joint resolution described in subsection (a) shall be referred in each House of Congress to the committees having jurisdiction over the provision of law under which the rule is issued.

(c)

In the Senate, if the committee or committees to which a joint resolution described in subsection (a) has been referred have not reported it at the end of 15 session days after its introduction, such committee or committees shall be automatically discharged from further consideration of the resolution and it shall be placed on the calendar. A vote on final passage of the resolution shall be taken on or before the close of the 15th session day after the resolution is reported by the committee or committees to which it was referred, or after such committee or committees have been discharged from further consideration of the resolution.

(d)

(1)

In the Senate, when the committee or committees to which a joint resolution is referred have reported, or when a committee or committees are discharged (under subsection (c)) from further consideration of a joint resolution described in subsection (a), it is at any time thereafter in order (even though a previous motion to the same effect has been disagreed to) for a motion to proceed to the consideration of the joint resolution, and all points of order against the joint resolution (and against consideration of the joint resolution) are waived. The motion is not subject to amendment, or to a motion to postpone, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the consideration of the joint resolution is agreed to, the joint resolution shall remain the unfinished business of the Senate until disposed of.

(2)

In the Senate, debate on the joint resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 2 hours, which shall be divided equally between those favoring and those opposing the joint resolution. A motion to further limit debate is in order and not debatable. An amendment to, or a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint resolution is not in order.

(3)

In the Senate, immediately following the conclusion of the debate on a joint resolution described in subsection (a), and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the Senate, the vote on final passage of the joint resolution shall occur.

(4)

Appeals from the decisions of the Chair relating to the application of the rules of the Senate to the procedure relating to a joint resolution described in subsection (a) shall be decided without debate.

(e)

In the House of Representatives, if any committee to which a joint resolution described in subsection (a) has been referred has not reported it to the House at the end of 15 legislative days after its introduction, such committee shall be discharged from further consideration of the joint resolution, and it shall be placed on the appropriate calendar. On the second and fourth Thursdays of each month it shall be in order at any time for the Speaker to recognize a Member who favors passage of a joint resolution that has appeared on the calendar for at least 5 legislative days to call up that joint resolution for immediate consideration in the House without intervention of any point of order. When so called up a joint resolution shall be considered as read and shall be debatable for 1 hour equally divided and controlled by the proponent and an opponent, and the previous question shall be considered as ordered to its passage without intervening motion. It shall not be in order to reconsider the vote on passage. If a vote on final passage of the joint resolution has not been taken by the third Thursday on which the Speaker may recognize a Member under this subsection, such vote shall be taken on that day.

(f)

(1)

If, before passing a joint resolution described in subsection (a), one House receives from the other a joint resolution having the same text, then—

(A)

the joint resolution of the other House shall not be referred to a committee; and

(B)

the procedure in the receiving House shall be the same as if no joint resolution had been received from the other House until the vote on passage, when the joint resolution received from the other House shall supplant the joint resolution of the receiving House.

(2)

This subsection shall not apply to the House of Representatives if the joint resolution received from the Senate is a revenue measure.

(g)

If either House has not taken a vote on final passage of the joint resolution by the last day of the period described in section 811(b)(2), then such vote shall be taken on that day.

(h)

This section and section 813 are enacted by Congress—

(1)

as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such is deemed to be part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a joint resolution described in subsection (a) and superseding other rules only where explicitly so; and

(2)

with full recognition of the Constitutional right of either House to change the rules (so far as they relate to the procedure of that House) at any time, in the same manner and to the same extent as in the case of any other rule of that House.

813. Congressional disapproval procedure for nonmajor rules

(a)

For purposes of this section, the term joint resolution means only a joint resolution introduced in the period beginning on the date on which the report referred to in section 811(a)(1)(A) is received by Congress and ending 60 days thereafter (excluding days either House of Congress is adjourned for more than 3 days during a session of Congress), the matter after the resolving clause of which is as follows: That Congress disapproves the nonmajor rule submitted by the ___ relating to ___, and such rule shall have no force or effect. (The blank spaces being appropriately filled in).

(b)

A joint resolution described in subsection (a) shall be referred to the committees in each House of Congress with jurisdiction.

(c)

In the Senate, if the committee to which is referred a joint resolution described in subsection (a) has not reported such joint resolution (or an identical joint resolution) at the end of 15 session days after the date of introduction of the joint resolution, such committee may be discharged from further consideration of such joint resolution upon a petition supported in writing by 30 Members of the Senate, and such joint resolution shall be placed on the calendar.

(d)

(1)

In the Senate, when the committee to which a joint resolution is referred has reported, or when a committee is discharged (under subsection (c)) from further consideration of a joint resolution described in subsection (a), it is at any time thereafter in order (even though a previous motion to the same effect has been disagreed to) for a motion to proceed to the consideration of the joint resolution, and all points of order against the joint resolution (and against consideration of the joint resolution) are waived. The motion is not subject to amendment, or to a motion to postpone, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the consideration of the joint resolution is agreed to, the joint resolution shall remain the unfinished business of the Senate until disposed of.

(2)

In the Senate, debate on the joint resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 10 hours, which shall be divided equally between those favoring and those opposing the joint resolution. A motion to further limit debate is in order and not debatable. An amendment to, or a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint resolution is not in order.

(3)

In the Senate, immediately following the conclusion of the debate on a joint resolution described in subsection (a), and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the Senate, the vote on final passage of the joint resolution shall occur.

(4)

Appeals from the decisions of the Chair relating to the application of the rules of the Senate to the procedure relating to a joint resolution described in subsection (a) shall be decided without debate.

(e)

In the Senate, the procedure specified in subsection (c) or (d) shall not apply to the consideration of a joint resolution respecting a nonmajor rule—

(1)

after the expiration of the 60 session days beginning with the applicable submission or publication date; or

(2)

if the report under section 811(a)(1)(A) was submitted during the period referred to in section 811(d)(1), after the expiration of the 60 session days beginning on the 15th session day after the succeeding session of Congress first convenes.

(f)

If, before the passage by one House of a joint resolution of that House described in subsection (a), that House receives from the other House a joint resolution described in subsection (a), then the following procedures shall apply:

(1)

The joint resolution of the other House shall not be referred to a committee.

(2)

With respect to a joint resolution described in subsection (a) of the House receiving the joint resolution—

(A)

the procedure in that House shall be the same as if no joint resolution had been received from the other House; but

(B)

the vote on final passage shall be on the joint resolution of the other House.

814. Definitions

For purposes of this chapter:

(1)

The term major rule means any rule of the Food and Drug Administration, including an interim final rule, that the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget finds has resulted in or is likely to result in—

(A)

an annual cost on the economy of $100,000,000 or more, adjusted annually for inflation;

(B)

a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or

(C)

significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

(2)

The term nonmajor rule means any rule of the Food and Drug Administration that is not a major rule.

(3)

The term rule has the meaning given such term in section 551, except that such term does not include—

(A)

any rule of particular applicability;

(B)

any rule relating to agency management or personnel; or

(C)

any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.

(4)

The term submission date or publication date, except as otherwise provided in this chapter, means—

(A)

in the case of a major rule, the date on which the Congress receives the report submitted under section 811(a)(1); and

(B)

in the case of a nonmajor rule, the later of—

(i)

the date on which the Congress receives the report submitted under section 811(a)(1); and

(ii)

the date on which the nonmajor rule is published in the Federal Register, if so published.

815. Judicial review

(a)

No determination, finding, action, or omission under this chapter shall be subject to judicial review.

(b)

Notwithstanding subsection (a), a court may determine whether the Food and Drug Administration has completed the necessary requirements under this chapter for a rule to take effect.

(c)

The enactment of a joint resolution of approval under section 812 shall not be interpreted to serve as a grant or modification of statutory authority by Congress for the promulgation of a rule, shall not extinguish or affect any claim, whether substantive or procedural, against any alleged defect in a rule, and shall not form part of the record before the court in any judicial proceeding concerning a rule except for purposes of determining whether or not the rule is in effect.

816. Exemption for monetary policy

Nothing in this chapter shall apply to rules that concern monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System or the Federal Open Market Committee.

817. Effective date of certain rules

Notwithstanding section 811, any rule other than a major rule which the Food and Drug Administration for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, shall take effect at such time as the Food and Drug Administration determines.

818. Regulatory cut-go requirement

In making any new rule, the Food and Drug Administration shall identify a rule or rules that may be amended or repealed to completely offset any annual costs of the new rule to the United States economy. Before the new rule may take effect, the Food and Drug Administration shall make each such repeal or amendment. In making such an amendment or repeal, the Food and Drug Administration shall comply with the requirements of subchapter II of chapter 5, but the Food and Drug Administration may consolidate proceedings under subchapter II (of chapter 5) with proceedings on the new rule.

819. Review of rules currently in effect

(a) Annual review

Beginning on the date that is 6 months after the date of enactment of this section and annually thereafter for the 9 years following, the Food and Drug Administration shall designate not less than 10 percent of eligible rules made by the Food and Drug Administration for review, and shall submit a report including each such eligible rule in the same manner as a report under section 811(a)(1). Section 811, section 812, and section 813 shall apply to each such rule, subject to subsection (c) of this section. No eligible rule previously designated may be designated again.

(b) Sunset for eligible rules not extended

Beginning after the date that is 10 years after the date of enactment of this section, if Congress has not enacted a joint resolution of approval for that eligible rule, that eligible rule shall not continue in effect.

(c) Consolidation; severability

In applying sections 811, 812, and 813 to eligible rules under this section, the following shall apply:

(1)

The words take effect shall be read as continue in effect.

(2)

Except as provided in paragraph (3), a single joint resolution of approval shall apply to all eligible rules in a report designated for a year, and the matter after the resolving clause of that joint resolution is as follows: That Congress approves the rules submitted by the __ for the year __. (The blank spaces being appropriately filled in).

(3)

It shall be in order to consider any amendment that provides for specific conditions on which the approval of a particular eligible rule included in the joint resolution is contingent.

(4)

A member of either House may move that a separate joint resolution be required for a specified rule.

(d) Definition

In this section, the term eligible rule means a rule that is in effect as of the date of enactment of this section.

(b) Budgetary effects of rules subject to section 922 of title 5, United States Code

Section 257(b)(2) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding at the end the following new subparagraph:

(E) Budgetary effects of rules subject to section 922 of title 5, United States Code

Any rules subject to the congressional approval procedure set forth in section 922 of chapter 8 of title 5, United States Code, affecting budget authority, outlays, or receipts shall be assumed to be effective unless it is not approved in accordance with such section.

(c) Government Accountability Office study of rules

(d) Effective date

Subsections (a) and (b), and the amendments made by such sections, shall take effect beginning on the date that is 1 year after the date of enactment of this Act.

(a) In general

The Comptroller General of the United States shall conduct a study to determine, as of the date of the enactment of this Act—

(b) Report

Not later than 1 year after the date of the enactment of this Act, the Comptroller General of the United States shall submit a report to Congress that contains the findings of the study conducted under subsection (a).

(a) In general

Subchapter A of chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by adding at the end the following:

524B. Provisional approval of new human drugs

(a) Priority review and evaluation of applications

(1) In general

The Secretary shall establish a priority review system to evaluate applications submitted under this pathway for provisional approval within 90 days of receipt of a completed application.

(2) Review of applications during epidemics and pandemics

In the case of an epidemic or pandemic, including with respect to COVID–19, the Secretary shall accept and review various portions of an application submitted under the pathway under this section for provisional approval on a rolling basis, and the review of any part of an application so submitted shall be completed not later than 3 weeks after submission.

(3) Other designations

If a drug submitted for review under the pathway under this section is eligible for a special designation by the Secretary under this Act, including as a drug for a rare disease or condition under section 526, all benefits of such other designation shall be available for use under provisional approval, including any tax credits and waiving of fees under chapter VII.

(b) Eligibility

A drug may be eligible for provisional approval under this section if the Secretary determines that the drug is intended for the treatment, prevention, or medical diagnosis of—

(1)

a serious or life-threatening disease or condition for which there is a reasonable likelihood that premature death will occur without early medical intervention for an individual contracting or being diagnosed with such disease or condition; or

(2)

a disease or condition that poses a threat of epidemic or pandemic.

(c) Standard of review for approval

(1) Requirements

An application for provisional approval under this section may be approved only if the Secretary determines that—

(A)

there is substantial evidence of safety for the drug, such that there is evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the safety of the drug involved, on the basis of which it could fairly and responsibly be concluded that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling; and

(B)

there is relevant early evidence based on adequate and well-controlled investigations, including early-stage clinical investigations, to establish that—

(i)

the drug provides a positive therapeutic outcome; and

(ii)

the outcome of the drug is consistent with or greater than currently marketed on-label therapies, with equal or fewer side effects, if there are currently marketed on-label therapies.

(2) Protocols

The Secretary shall promulgate rules that establish the appropriate protocols for a sponsor of an application for provisional approval under this section and the Commissioner to follow to enable rolling, real-time, mid-trial submission while preserving the integrity of the ongoing trial and without penalizing the sponsor for making use of this pathway.

(3) Real world evidence

The Secretary shall allow the use of real world evidence (as defined in section 505F(b)), including real world data used to generate real world evidence, to support an application for provisional approval under this section, and to fulfill the follow-up requirements and support applications for full approval as described under section 505 or section 351 of the Public Health Service Act, as applicable.

(4) Use of scientifically substantiated surrogates

(A) In general

The sponsor of an application for provisional approval under this section may use scientifically substantiated surrogates to support such application.

(B) Definition

In subparagraph (A), the term scientifically substantiated surrogates means surrogate endpoints to predict clinical benefit other than such endpoints previously validated by the Secretary, based on—

(i)

epidemiologic, therapeutic, pathophysiologic, or other evidence; or

(ii)

an effect on a clinical endpoint other than survival or irreversible morbidity of interest.

(d) Transparency and patient monitoring requirements

(1) Registries

(A) In general

The sponsor of a drug provisionally approved under this section shall require that all patients who use such drug participate in an observational registry and consent to the sponsor’s collection, and submission to the registry, of data related to the patient’s use of such drug until such drug receives full approval under section 505 or section 351 of the Public Health Service Act, or the provisional approval is rescinded.

(B) Requirements for registries

An observational registry described in subparagraph (A) may be run by a third party, such as a government, for profit, or non-profit organization, and shall track all patients who use the provisionally approved drug.

(C) Accessibility

An observational registry described in subparagraph (A) shall be easily accessible for—

(i)

all patients who are participating in any registry related to a provisionally approved drug that allows for easy, unrestricted (or transparent) access for such patients to their patient data and related information regarding their usage of the provisionally approved drug; and

(ii)

approved researchers and medical professionals who may access data maintained in the registry, which access shall be for public health research and only in a de-identified, aggregated manner.

(2) Funding

An observational registry under this subsection shall be maintained, as applicable—

(A)

by the sponsor of the drug provisionally approved under this section that is the subject of the registry;

(B)

by a third party, such as a government, for profit, or nonprofit organization; or

(C)

the Federal Government, in the case of any drug so approved that is intended to treat a disease or condition associated with an epidemic or pandemic.

(3) Sponsor requirements

(A) In general

For any drug application provisionally approved under this section, the Secretary shall notify the sponsor of the exact data such sponsor is required to submit to an observational registry.

(B) Annual review of the registry; penalties

The Secretary shall conduct an annual review of observational registries established under this subsection. If, at such an annual review, less than 90 percent of patients are participating in an observational registry with respect to a drug approved under this section, the Secretary shall issue to the sponsor of such drug a civil monetary penalty of not more than $100,000. If a violation of this section is not corrected within the 30-day period following notification, the sponsor shall, in addition to any penalty under this subparagraph be subject to a civil monetary penalty of not more than $10,000 for each day of the violation after such period until the violation is corrected. If application patient participation in an observational registry is not at or above 90 percent within 6 months of issuance of such penalty, the provisional approval shall be withdrawn.

(4) Annual report to Congress

The Secretary shall submit an annual report to Congress on all drugs granted provisional approval under this section. Such report shall include—

(A)

the number of patients treated with each such drug, and the number of patients tracked in an observational registry with respect to each such drug;

(B)

a discussion of the minimum amount of data required in the registries, including patient treatments and uses, length of use, side effects encountered, relevant biomarkers or scientifically substantiated surrogates, scan results, cause of death and how long the patient lived, and adverse drug effects;

(C)

a list of all such drugs for which an application for full approval under section 505 of this Act or section 351 of the Public Health Service Act, or an application for an extension of provisional approval under this section, has been submitted; and

(D)

a list of all applications denied provisional approval under this section, together with an explanation for the decisions to deny each such application.

(e) Withdrawal of provisional approval

(1) In general

The Secretary shall withdraw provisional approval under this section if there are a significant numbers of patients who experience serious adverse effects, compared to the other currently marketed on-label therapies that are available for the applicable disease or condition.

(2) Effect of withdrawal

If a provisional approval is withdrawn under this subsection, the sponsor may not make the drug available to any new patients, but may be allowed to continue to make such drug available to patients who started taking the drug prior to the date of withdrawal, for as long a period as dictated by patient need, as determined by the Secretary.

(f) Transparency

Any scientific, medical, academic, or health care journal publishing an article explaining, releasing, conveying or announcing research findings which were funded by the Department of Health and Human Services shall be prohibited from publishing such research unless—

(1)

such article conveying research findings is made publicly available on the journal’s internet website without a paywall or charge not later than 3 months after the date on which such article was first provided to subscribers of such journal (or first made available for purchase); and

(2)

the article’s author or researcher or author’s institution (or, in the case of multiple authors, researchers, or institutions, all such authors, researchers, or institutions) received less than 30 percent of funding for such research from the Department of Health and Human Services throughout the period of time the research was conducted.

(g) Informed Consent

Prior to receiving a drug provisionally approved under this section, the sponsor of the drug shall receive from each patient, or the patient's representative, informed consent, through a signed informed consent form, acknowledging that such patient understands that the drug did not undergo the usual process for full approval of a drug by the Food and Drug Administration, and that such patient is willing to accept the risks involved in taking such drug.

(h) Postmarket controls and labeling

(1) FDA annual review of registry data

The Secretary shall annually review the data made available through the observational registries under subsection (d) and make a determination regarding whether the side effect profile of any drug approved under this pathway does not support the benefit provided, or the data shows the benefit is less than the benefits offered through other, fully approved drugs.

(2) Labeling

The sponsor of the provisionally approved drug shall ensure that all labeling and promotional materials for the drug bear the statement provisionally approved by the FDA pending a full demonstration of effectiveness under application number ______ (specifying the application number assigned by the Secretary in place of the blank). All promotional, educational and marketing materials for provisionally approved products shall be reviewed and approved by the Secretary before such materials are distributed.

(3) Rescission of provisional approval

If the Secretary determines that the side effect profile of any drug included in such observational registries does not support the benefit provided by such drug, or that the data shows that the benefit is less than the benefits offered through other, fully approved drugs, the Secretary shall rescind such provisional approval.

(i) Duration of provisional approval; requirement To bring drug to market

(1) Duration; renewals

The period of provisional approval for a drug approved under this section is effective for a 2-year period. The sponsor may request renewal for provisional approval status for up to 3 subsequent 2-year periods by the Secretary. Provisional approval status with respect to a drug shall not exceed a total of 6 years from the initial date the sponsor was awarded provisional approval status.

(2) Marketing requirement

If any drug that receives provisional approval status under this section is not brought to market within 180 days of the approval, such approval shall be rescinded.

(j) Limitation on liability

With respect to any claim under State law alleging that a drug sold or otherwise made available pursuant to a grant of provisional approval under this section is unsafe or ineffective, no liability in a cause of action shall lie against a sponsor or manufacturer, unless the relevant conduct constitutes reckless or willful misconduct, gross negligence, or an intentional tort under any applicable State law.

(k) Applying for full approval

(1) In general

Except as provided under paragraph (2), the sponsor of a drug granted provisional approval pursuant to this section may, at any point, submit an application for full approval of such drug under section 505 of this Act or section 351 of the Public Health Service Act, as applicable.

(2) Effect of recession on approval and automatic approval

(A) In general

The sponsor of a drug granted provisional approval pursuant to this section that has been rescinded under subsection (h)(3), may submit an application for full approval of such drug under section 505 of this Act or section 351 of the Public Health Service Act at any time.

(B) Automatic approval

Such full approval may be awarded at any time for any drug granted provisional approval pursuant to this section if the sponsor of the drug establishes a 15 percent improvement in an important endpoint, including surrogate endpoints not validated by the Food and Drug Administration, compared to a standard drug.

(3) Real-time epidemic and pandemic vaccine approval

(A) In general

In the case of a vaccine developed in response to an epidemic or pandemic, including COVID–19, the Secretary shall share data information regarding the approval of the vaccine with the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention as the review nears completion.

(B) Evaluation

Any vaccine that has been approved by the Secretary for an epidemic or pandemic-related disease, including COVID–19, shall be evaluated by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention not later than 1 week after the date of submission to the Advisory Committee by the Secretary of the vaccine.

(l) Patient advocate general

Not later than 6 months after the date of enactment of the Promising Pathway Act, the Secretary shall establish within the Office of the Commissioner, the position of Patient Advocate General, who shall provide assistance to patients and their families who use drugs under evaluation in this pathway or drugs reviewed or approved under section 505 or section 351 of the Public Health Service Act. Such assistance shall include providing bi-informational communication about maintaining patient health, delivery of proper informed consent, participating in clinical investigations, completing required documentation in order to participate in the applicable programs, and providing other information.

(b) Conforming amendment

Section 505(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(a)) is amended by inserting , or there is in effect a provisional approval under section 524B with respect to such drug before the period.

(c) Reimbursement