,,ii  #aai? ,,congress  #a/ ,session    
,s4 #bhge  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,septemb] #ah          
7legislative day1 ,septemb] #af71 #bjbe 
,mr4 ,%eehy introduc$ ! foll[+ bill2 :i*
 0 read twice & ref]r$ to ! ,committee  
on ,f9ance  ,a ,,bill  ,to am5d !       
,int]nal ,rev5ue ,code ( #aihf to       
provide = ! treatm5t ( heal?            
reimbursem5t arrangem5ts integrat$ )    
individual m>ket cov]age4  #a4 ,%ort    
title ,?is ,act may be cit$ z ! ,cu/om  
,heal? ,option & ,individual ,c>e       
,exp5se ,act or ! ,,*oice ,act4  #b4    
,treatm5t ( heal? reimbursem5t          
arrangem5ts integrat$ ) individual m>ket
 cov]age  7a7 ,9 g5]al ,section         
#ihae7;b7 ( ! ,int]nal ,rev5ue ,code (  
#aihf is am5d$--  7#a7 by /rik+         
,exception4--,not)/&+ subsection 7a7 &  
ins]t+ ! foll[+3 ,exceptions4--  7#a7   
,self-insur$ gr\p heal? plans ,not)/&+  
subsection 7a7  1 &  7#b7 by add+ at !  
end ! foll[+ new p>agraph3  7#b7 ,cu/om 
heal? option & individual c>e exp5se    

arrangem5ts  7,a7 ,9 g5]al ,= purposes (
 ?is sub*apt]1 a cu/om heal? option &   
individual c>e exp5se arrangem5t %all be
 treat$ z meet+ ! requirem5ts ( section 
#ihjb & sections #bgje1 #bgaa1 #bgac1 & 
#bgae ( title ,,xxvii ( ! ,public ,heal?
 ,s]vice ,act4  7,b7 ,cu/om heal? option
 & individual c>e exp5se arrangem5ts    
def9$ ,= purposes ( ?is section1 ! t]m  
cu/om heal? option & individual c>e     
exp5se arrangem5t means a heal?         
reimbursem5t arrangem5t--  7i7 :i* is an
 employ]-provid$ gr\p heal? plan fund$  
solely by employ] contributions to      
provide paym5ts or reimbursem5ts =      
m$ical c>e subject to a maximum fix$    
doll> am\nt = a p]iod1  7ii7 "u :i* su* 
paym5ts or reimbursem5ts may only be    
made = m$ical c>e provid$ dur+ p]iods   
dur+ :i* ! individual is cov]$--  7,i7  
"u individual heal? insurance cov]age   
7o!r ?an cov]age t consi/s solely (     
except$ b5efits71 or  7,,ii7 "u "p ,a & 
,b ( title ,,xviii ( ! ,social ,security
 ,act or "p ,c ( su* title1  7iii7 :i*  

meets ! nondiscrim9ation requirem5ts (  
subp>agraph 7,c71  7iv7 :i* meets !     
sub/antiation requirem5ts ( subp>agraph 
7,d71 &  7v7 :i* meets ! notice         
requirem5ts ( subp>agraph 7,e74  7,c7   
,nondiscrim9ation  7i7 ,9 g5]al ,an     
arrangem5t meets ! requirem5ts ( ?is    
subp>agraph if an employ] (f]+ su*      
arrangem5t to an employee )9 a specifi$ 
class ( employee--  7,i7 (f]s su*       
arrangem5t to all employees )9 su*      
specifi$ class on ! same t]ms1 &  7,,ii7
 does n (f] any o!r gr\p heal? plan 7o!r
 ?an an acc\nt-bas$ gr\p heal? plan or a
 gr\p heal? plan t consi/s solely (     
except$ b5efits7 to any employees )9 su*
 specifi$ class4  ,9 ! case ( an employ]
 :o (f]s a gr\p heal? plan provid$ ?r\gh
 heal? insurance cov]age 9 ! small gr\p 
m>ket 7t is subject to section #bgja ( !
 ,public ,heal? ,s]vice ,act7 to all    
employees )9 su* specifi$ class1        
subclause 7,,ii7 %all n apply to su*    
gr\p heal? plan4  7ii7 ,specifi$ class (
 employee ,= purposes ( ?is subp>agraph1

 any ( ! foll[+ may be designat$ z a    
specifi$ class ( employee3 7,i7 ,full-"t
 employees4  7,,ii7 ,"p-"t employees4   
7,,iii7 ,sal>i$ employees4  7,,iv7      
,non-sal>i$ employees4  7,v7 ,employees 
^: home location is 9 ! same rat+ area4 
7,,vi7 ,employees :o are includ$ 9 a    
unit ( employees cov]$ "u a collective  
b>ga9+ agreem5t to :i* ! employ] is     
subject 7det]m9$ "u rules simil> to !   
rules ( section #aje7;h774  7,,vii7     
,employees :o h n met a gr\p heal? plan1
 or heal? insurance issu] (f]+ gr\p     
heal? insurance cov]age1 wait+ p]iod    
requirem5t t satisfies section #bgjh ( !
 ,public ,heal? ,s]vice ,act4  7,,viii7 
,seasonal employees4  7,,ix7 ,employees 
:o are nonresid5t ali5s & :o receive no 
e>n$ income 7)9 ! mean+ ( section       
#iaa7;d77#b77 f ! employ] :i* con/itutes
 income f s\rces )9 ! ,unit$ ,/ates 7)9 
! mean+ ( section #hfa7;a77#c774  7,x7  
,"u su* rules z ! ,secret>y may         
prescribe1 employees :o are hir$ =      
tempor>y placem5t ) an unrelat$ p]son t 

is n ! common law employ]4  7,,xi7      
,employees :o are hir$ 9 ! same date    
range4  7,,xii7 ,su* o!r classes (      
employees z ! ,secret>y may designate4  
,an employ] may designate 79 su* mann] z
 is prescrib$ by ! ,secret>y7 two or m (
 ! classes describ$ 9 ! prec$+          
subclauses z ! specifi$ class (         
employees to :i* ! arrangem5t is (f]$ = 
purposes ( apply+ ?is subp>agraph4      
7iii7 ,special rule = new hires ,an     
employ] may designate prospectively s   
mu* ( a specifi$ class ( employees z are
 hir$ aft] a date set by ! employ]4 ,su*
 subclass ( employees %all be treat$ z !
 specifi$ class = purposes ( apply+     
clause 7i74  7iv7 ,rules = det]m9+ type 
( employee ,= purposes = clause 7ii71   
any det]m9ation ( full-"t1 "p-"t1 or    
seasonal employm5t /atus %all be made "u
 rules simil> to ! rules ( section      
#aje7;h7 or #dihj;,h1 :i*ev] ! employ]  
elects = ! plan ye>4 ,su* election %all 
apply ) respect to all employees ( !    
employ] = ! plan ye>4  7v7 ,p]mitt$     

v>iation ,= purposes ( clause 7i77,i71  
an arrangem5t %all n fail to be treat$ z
 provid$ on ! same t]ms )9 a specifi$   
class m]ely because ! maximum doll>     
am\nt ( paym5ts & reimbursem5ts :i* may 
be made "u ! t]ms ( ! arrangem5t = ! ye>
 ) respect to ea* employee )9 su*       
class--  7,i7 increases z additional    
dep5d5ts ( ! employee are cov]$ "u !    
arrangem5t1 &  7,,ii7 increases )       
respect to a p>ticipant z ! age ( !     
p>ticipant increases1 b n 9 excess ( an 
am\nt equal to #cjj p]c5t ( ! l[e/      
maximum doll> am\nt ) respect to su* a  
p>ticipant det]m9$ )\t reg>d to age4    
7,d7 ,sub/antiation requirem5ts ,an     
arrangem5t meets ! requirem5ts ( ?is    
subp>agraph if ! arrangem5t has         
reasonable proc$ures to sub/antiate--   
7i7 t ! p>ticipant & any dep5d5ts are1  
or w be1 enroll$ 9 cov]age describ$ 9   
subp>agraph 7,b77ii7 z ( ! beg9n+ ( !   
plan ye> ( ! arrangem5t 7or z ( ! beg9n+
 ( cov]age "u ! arrangem5t 9 ! case ( an
 employee :o fir/ becomes eligible to   

p>ticipate 9 ! arrangem5t aft] ! date   
notice is giv5 ) respect to ! plan "u   
subp>agraph 7,e7 7det]m9$ )\t reg>d to  
clause 7iii7 !re(771 &  7ii7 any reque/s
 made = paym5t or reimbursem5t ( m$ical 
c>e "u ! arrangem5t & t ! p>ticipant &  
any dep5d5ts rema9 s enroll$4  7,e7     
,notice  7i7 ,9 g5]al ,except z provid$ 
9 clause 7iii71 an arrangem5t meets !   
requirem5ts ( ?is subp>agraph if1 "u !  
arrangem5t1 ea* employee eligible to    
p>ticipate is1 n lat] ?an #fj days be=e 
! beg9n+ ( ! plan ye>1 giv5 writt5      
notice ( ! employee's rights &          
obligations "u ! arrangem5t :i*--  7,i7 
is suffici5tly accurate & compreh5sive  
to apprise ! employee ( su* rights &    
obligations1 &  7,,ii7 is writt5 9 a    
mann] calculat$ to be und]/ood by !     
av]age employee eligible to p>ticipate4 
7ii7 ,notice requirem5ts ,su* notice    
%all include su* in=mation z ! ,secret>y
 may by regulation prescribe4  7iii7    
,notice deadl9e = c]ta9 employees ,9 !  
case ( an employee--  7,i7 :o fir/      

becomes eligible to p>ticipate 9 !      
arrangem5t aft] ! date notice is giv5 ) 
respect to ! plan "u clause 7i7 7det]m9$
 )\t reg>d to ?is clause71 or  7,,ii7 ^:
 employ] is fir/ e/abli%$ few] ?an #abj 
days be=e ! beg9n+ ( ! fir/ plan ye> ( !
 arrangem5t1  ! requirem5ts ( ?is       
subp>agraph %all be treat$ z met if !   
notice requir$ "u clause 7i7 is provid$ 
n lat] ?an ! date ! arrangem5t may take 
effect ) respect to su* employee4  4    
7b7 ,inclusion ( ,,*oice arrangem5t     
p]mitt$ b5efits on ,w-#b  7#a7 ,9 g5]al 
,section #fjea7;a7 ( su* ,code is am5d$ 
by /rik+ & at ! end ( p>agraph 7#ah71 by
 /rik+ ! p]iod at ! end ( p>agraph 7#ai7
 & ins]t+ 1 &1 & by ins]t+ aft] p>agraph
 7#ai7 ! foll[+ new p>agraph3  7#bj7 !  
total am\nt ( p]mitt$ b5efits = enroll$ 
individuals "u a cu/om heal? option &   
individual c>e exp5se arrangem5t 7z     
def9$ 9 section #ihae7;b77#b77 ) respect
 to su* employee4  4  7c7 ,treatm5t (   
curr5t rules relat+ to c]ta9 arrangem5ts
  7#a7 ,no inf]5ce ,to ! ext5t n        

inconsi/5t ) ! am5dm5ts made by ?is     
section-- 7,a7 no inf]5ce %all be made f
 su* am5dm5ts ) respect to ! rules      
prescrib$ 9 ! ,f$]al ,regi/] on ,june   
#bj1 #bjai1 7#hd ,f$4 ,reg4 #bhhhh7     
relat+ to heal? reimbursem5t arrangem5ts
 & o!r acc\nt-bas$ gr\p heal? plans1 &  
7,b7 any ref]5ce to cu/om heal? option &
 individual c>e exp5se arrangem5ts %all 
= purposes ( su* rules be treat$ z      
includ+ a ref]5ce to individual cov]age 
heal? reimbursem5t arrangem5ts4  7#b7   
,o!r con=m+ ( rules ,! ,secret>y ( !    
,treasury1 ! ,secret>y ( ,heal? & ,human
 ,s]vices1 & ! ,secret>y ( ,labor %all  
modify su* rules z may be necess>y to   
con=m to ! am5dm5ts made by ?is section4
  7d7 ,effective date ,! am5dm5ts made  
by ?is section %all apply to plan ye>s  
beg9n+ aft] ,decemb] #ca1 #bjbe4  #c4   
,p>ticipants 9 ,,*oice arrangem5t       
eligible = pur*ase ( ,ex*ange insurance 
"u cafet]ia plan  7a7 ,9 g5]al ,section 
#abe7;f77#c7 ( ! ,int]nal ,rev5ue ,code 
( #aihf is am5d$ by add+ at ! end !     

foll[+ new subp>agraph3  7,c7 ,exception
 = p>ticipants 9 ,,*oice arrangem5t     
,subp>agraph 7,a7 %all n apply 9 ! case 
( an employee p>ticipat+ 9 an cu/om     
heal? option & individual c>e exp5se    
arrangem5t 7)9 ! mean+ ( section        
#ihae7;b77#b77 (f]$ by ! employee's     
employ]4  4  7b7 ,effective date ,!     
am5dm5t made by ?is section %all apply  
to taxable ye>s beg9n+ aft] ,decemb]    
#ca1 #bjbe4  #d4 ,employ] cr$it =       
,,*oice arrangem5t  7a7 ,9 g5]al ,subp>t
 ,d ( "p ,,iv ( sub*apt] ,a ( *apt] #a (
 ! ,int]nal ,rev5ue ,code ( #aihf is    
am5d$ by add+ at ! end ! foll[+ new     
section3  #de;,,bb4 ,employ] cr$it =    
,,*oice arrangem5t  7a7 ,9 g5]al ,=     
purposes ( section #ch1 9 ! case ( an   
eligible employ]1 ! ,,*oice arrangem5t  
cr$it det]m9$ "u ?is section = any      
taxable ye> is an am\nt1 ) respect to   
ea* employee enroll$ dur+ ! cr$it p]iod 
9 a ,,*oice arrangem5t ma9ta9$ by !     
employ]1 equal to--  7#a7 #ajj multipli$
 by ! numb] ( mon?s = :i* ! employee is 

s enroll$ dur+ ! fir/ ye> 9 ! cr$it     
p]iod1 &  7#b7 "o-half ( ! doll> am\nt 9
 effect "u p>agraph 7#a7 = ! taxable    
ye>1 multipli$ by ! numb] ( mon?s = :i* 
! employee is s enroll$ dur+ ! second   
ye> ( ! cr$it p]iod4  7b7 ,arrangem5t   
mu/ con/itute m9imum ess5tial cov]age   
,an employee %all n be tak5 into acc\nt 
"u subsection 7a7 unless su* employee's 
eligibility = ! ,,*oice arrangem5t      
7det]m9$ )\t reg>d to ! employee be+    
enroll$7 w\ld cause ! employee to be    
treat$ "u section #cf;,b7c77#b7 z be+   
eligible = m9imum ess5tial cov]age      
consi/+ ( an eligible employ]-sponsor$  
plan 7z def9$ 9 section                 
#ejjj;,a7f77#b774  7c7 ,def9itions ,=   
purposes ( ?is section--  7#a7 ,,*oice  
arrangem5t ,! t]m ,,*oice arrangem5t    
means a cu/om heal? option & individual 
c>e exp5se arrangem5t 7z def9$ 9 section
 #ihae7;b77#b77;,b774  7#b7 ,cr$it p]iod
 ,! cr$it p]iod ) respect to an eligible
 employ] is ! fir/ #b "o-ye> p]iods     
beg9n+ ) ! mon? dur+ :i* ! employ] fir/ 

e/abli%es a ,,*oice arrangem5t on behalf
 ( employees ( ! employ]4  7#c7         
,eligible employ] ,! t]m eligible       
employ] means1 ) respect to any taxable 
ye> beg9n+ 9 a cal5d> ye>1 an employ] :o
 is n an applicable l>ge employ] = !    
cal5d> ye> "u section #dihj;,h4  7d7    
,inflation adju/m5t  7#a7 ,9 g5]al ,9 ! 
case ( any taxable ye> beg9n+ 9 a cal5d>
 ye> aft] #bjbf1 ! doll> am\nt 9        
subsection 7a7 %all be increas$ by an   
am\nt equal to--  7,a7 su* doll> am\nt1 
multipli$ by  7,b7 ! co/-(-liv+ adju/m5t
 det]m9$ "u section #a7;f77#c7 = !      
cal5d> ye> 9 :i* su* taxable ye> beg9s  
by sub/itut+ cal5d> ye> #bjbe = cal5d>  
ye> #bjaf 9 subp>agraph 7,a77ii7 !re(4  
7#b7 ,r\nd+ ,if any am\nt aft] adju/m5t 
"u p>agraph 7#a7 is n a multiple ( #aj1 
su* am\nt %all be r\nd$ to ! next l[]   
multiple ( #aj4  4  7b7 ,cr$it made "p (
 g5]al bus9ess cr$it ,section #ch7;b7 ( 
su* ,code is am5d$ by /rik+ plus at !   
end ( p>agraph 7#dj71 by /rik+ ! p]iod  
at ! end ( p>agraph 7#da7 & ins]t+ 1    

plus1 & by add+ at ! end ! foll[+ new   
p>agraph3  7#db7 ! ,,*oice arrangem5t   
cr$it det]m9$ "u section #de;,,bb7a74  4
  7c7 ,cr$it all[$ aga9/ alt]native     
m9imum tax ,section #ch7;c77#d77;,b7 (  
su* ,code is am5d$--  7#a7 by r$esignat+
 clauses 7x71 7xi71 & 7xii7 z clauses   
7xi71 7xii71 & 7xiii71 respectively1 &  
7#b7 by ins]t+ aft] clause 7ix7 ! foll[+
 new clause3  7x7 ! cr$it det]m9$ "u    
section #de;,,bb1  4  7d7 ,cl]ical      
am5dm5t ,! table ( sections = subp>t ,d 
( "p ,,iv ( sub*apt] ,a ( *apt] #a ( su*
 ,code is am5d$ by add+ at ! end !      
foll[+ new item3  ,sec4 #de;,,bb4       
,employ] cr$it = ,,*oice arrangem5t4  4 
7e7 ,effective date ,! am5dm5ts made by 
?is section %all apply to taxable ye>s  
beg9n+ aft] ,decemb] #ca1 #bjbe4