1Providing for affordable health insurance.

2The General Assembly of the Commonwealth of Pennsylvania
3hereby enacts as follows:

4Section 1.  Short title.

5This act shall be known and may be cited as the Affordable
6Health Insurance Act.

7Section 2.  No unfair trade practice.

8Insurers that include and operate wellness and health
9promotion programs, disease and condition management programs,
10health risk appraisal programs and similar provisions in their
11high deductible health policies in keeping with Federal
12requirements shall not be considered to be engaging in unfair
13trade practices under any provision of law relating to unfair
14trade practices with respect to the practices of illegal
15inducements, unfair discrimination and rebating.

16Section 3.  No required relationship.

1There shall be no required relationship between preferred
2provider and nonpreferred provider plan reimbursements for
3health savings account-eligible high deductible plans using
4nonpreferred provider reimbursements. Such plans shall not:

5(1)  unfairly deny health benefits for medically
6necessary covered services;

7(2)  have differences in benefit levels payable to
8preferred providers compared to other providers that unfairly
9deny benefits for covered services;

10(3)  have a plan coinsurance percentage applicable to
11benefit levels for services provided by nonpreferred
12providers that is less than 60% of the benefit levels under
13the policy for such services; or

14(4)  have an adverse effect on the availability or the
15quality of services.

16Section 4.  Health reimbursement arrangement-only plans.

17The following shall apply:

18(1)  The Insurance Commissioner shall be authorized to
19allow health reimbursement arrangement-only plans that
20encourage employer financial support of health insurance or
21health-related expenses recognized under Federal law.

22(2)  Health reimbursement arrangement-only plans that are
23not sold in connection with or packaged with health insurance
24coverage shall not be considered insurance.

25(3)  Individual health insurance policies funded through
26health reimbursement arrangement-only plans shall not be
27considered employer sponsored or group coverage, and nothing
28in this section shall be interpreted to require an insurer to
29offer an individual health insurance policy for sale in
30connection with or packaged with a health reimbursement

1arrangement-only plan or to accept premiums from health
2reimbursement arrangement-only plans for individual health
3insurance policies.

4Section 5.  Deductions.

5In addition to other deductions allowed by law, a taxpayer in
6this Commonwealth may deduct from taxable income for State
7income tax purposes an amount equal to 100% of the premium paid
8by the taxpayer during the taxable year for high deductible
9health plans which are eligible to be used with a health savings
10account under the applicable provisions of section 223 of the
11Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
12223) to the extent the deduction has not been included in
13Federal adjusted gross income and the expenses have neither been
14provided from a health reimbursement arrangement nor included in
15itemized nonbusiness deductions excluded from the taxpayer's
16taxable income.

17Section 6.  Credits.

18(a)  Qualified health credits.--The following shall apply:

19(1)  A taxpayer shall be allowed a credit against the
20income tax imposed by law for qualified health insurance
21expenses in an amount of $250 for each employee enrolled for
2212 consecutive months in a qualified health insurance plan if
23qualified health insurance is made available to all of the
24employees and compensated individuals of the employer under
25the applicable provisions of section 125 of the Internal
26Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 125).

27(2)  In no event shall the total amount of the tax credit
28under this section for a taxable year exceed the taxpayer's
29income tax liability. Any unused tax credit shall be allowed
30the taxpayer against succeeding years' tax liability. No such

1credit shall be allowed the taxpayer against prior years' tax
2liability.

3(3)  The Department of Revenue shall promulgate rules and
4regulations necessary to implement and administer this
5section.

6(4)  The credit allowed by this section shall apply only
7with regard to qualified health insurance expenses.

8(b)  Definitions.--As used in this section, the following
9words and phrases shall have the meanings given to them in this
10subsection unless the context clearly indicates otherwise:

11"Qualified health insurance."  A high deductible health plan
12that includes, at a minimum, catastrophic health care coverage
13which is eligible to be used with a health savings account under
14the applicable provisions of section 223 of the Internal Revenue
15Code of 1986 (Public Law 99-514, 26 U.S.C. § 223).

16"Qualified health insurance expense."  The expenditure of
17funds of at least $250 annually for health insurance premiums
18for qualified health insurance.

19"Taxpayer."  An employer who employs directly, or who pays
20compensation to individuals whose compensation is reported on
21Internal Revenue Service Form 1099, 50 or fewer persons and for
22whom the employer provides high deductible health plans, that
23include catastrophic health care coverage, which are established
24and used with a health savings account under the applicable
25provisions of section 223 of the Internal Revenue Code of 1986
26(Public Law 99-514, 26 U.S.C. § 223) and in which the employees
27are enrolled.

28Section 7.  Exemption from insurance premium tax.

29Insurers shall be exempt from otherwise applicable taxes on
30insurance premiums paid by residents for high deductible health

1plans eligible to be used with a health savings account under
2the applicable provisions of section 223 of the Internal Revenue
3Code of 1986 (Public Law 99-514, 26 U.S.C. § 223).

4Section 8.  Duties of Insurance Commissioner.

5The Insurance Commissioner shall:

6(1)  Develop flexible guidelines for coverage and
7approval of health savings account eligible high deductible
8plans designed to qualify under Federal and State
9requirements as high deductible health plans for use with
10health savings accounts.

11(2)  Encourage and promote the marketing of health
12savings account eligible high deductible plans by accident
13and sickness insurers. Nothing in this section shall be
14construed to authorize the sale of insurance in violation of
15requirements relating to the transaction of insurance or
16prohibiting the interstate sale of insurance.

17(3)  Conduct a study of health savings account eligible
18high deductible plans available in all other states and
19determine whether, and in what manner, they serve the
20uninsured and whether they should be made available to the
21citizens of this Commonwealth.

22(4)  Develop an automatic or fast track approval process
23for health savings account eligible high deductible plans
24already approved under the laws and regulations of this
25Commonwealth or other states.

26(5)  Promulgate rules and regulations for the design,
27promotion and regulation of health savings account eligible
28high deductible plans, including rules and regulations for
29expedited review of standardized policies, advertisements,
30solicitations and other matters deemed relevant.

1Section 9.  Effective date.

2This act shall take effect in 60 days.