Legislative Summary: H.R. 6703, Lower Health Care Premiums for All Americans Act
(Rep. Miller-Meeks, R-IA)
Order of Business: The House is scheduled to consider the bill during the week of December 15 under a closed rule. Earlier press reports notwithstanding, the Rules Committee did not ultimately make in order any amendments regarding an extension of enhanced Obamacare subsidies, none of which were paid for. The enhanced subsidies are NOT included in the underlying legislation.
Summary: The bill amalgamates several pieces of existing legislation designed to 1) lower health care premiums, 2) lower the underlying health care costs behind those premiums, and 3) provide more options for portable, affordable health insurance. During the last Congress, the House considered the first three elements of the current legislation—regarding Association Health Plans, stop-loss insurance, and Health Reimbursement Arrangements—as part of a larger health care package (H.R. 3799, 118th Congress) that passed the House by a 220-209 vote.
Association Health Plans: Amends the Employee Retirement Income Security Act (ERISA) to permit an association of employers to maintain a group health plan, regardless of whether the employers are in the same industry, trade, or profession. The association must have existed for at least two years, be formed for a purpose other than offering health insurance, and make coverage available to at least 51 employees, and to all employees (and their dependents) of the employer members. The association may only offer coverage to employees (and dependents) of employer members, may not be controlled by a health insurer or subsidiary, and may not condition membership on any health status factor. Specifies organizational requirements the association must meet.
Provides that coverage provided through the association may not establish any eligibility rule based on health status, differentiate premiums based on a health status factor, or deny coverage based on a pre-existing condition. Permits plans to establish rates “based on an actuarially sound, modified community rating methodology,” and “utilize the specific risk profile of each employer member…to determine contribution rates” for each employer member, except where prohibited by state law.
Permits self-employed individuals who are members of an association (and work at least 10 hours per week, or 40 hours per month) to join the group health plan established by said association. Specifies that an association composed solely of self-employed individuals (which must include at least 20 self-employed persons) shall treat all such individuals as a single risk pool for an association health plan, charging all plan participants the same premium.
Provides that establishment of an association health plan “may not be construed as evidence for establishing an employer or joint employer relationship” under federal or state law. Specifies that the bill will not “limit or otherwise affect” any prior or future Labor Department guidance regarding alternative pathways to qualifying as an association for the purpose of providing health insurance coverage.
The text of this section mirrors H.R. 2528, the Association Health Plans Act, introduced by Rep. Tim Walberg (R-MN), and approved by the House Education and the Workforce Committee by a 21-15 vote on June 25, 2025.
Stop-Loss Insurance: Amends ERISA to 1) specify that a stop-loss policy obtained by a group plan—which reimburses a plan sponsor for losses in excess of a pre-determined amount—shall NOT be included in the definition of “health insurance coverage” and 2) pre-empt any state laws that “may now or hereafter prevent an employee benefit plan from insuring against the risk of excess or unexpected health plan claims losses.”
Because employer health plans that are self-insured (i.e., the employer maintains the financial risk) are exempt from several Obamacare regulations—including the essential health benefits and medical loss ratio requirements—and state benefit mandates, some employers who previously offered fully insured plans (i.e., they purchased policies from Blue Cross, Cigna, or other insurers) have embraced self-insurance. However, small employers who self-insure face potentially ruinous costs if one of their employees faces a catastrophic medical event (e.g., cancer diagnosis, etc.).
In response, some small employers that self-insure have purchased stop-loss policies that reimburse them for their financial losses above a certain threshold (e.g., $50,000). This section of the bill would exempt stop-loss policies from regulatory actions, allowing more employers to self-insure and escape from some of Obamacare’s regulatory requirements.
The text of this section mirrors H.R. 2571, the Self-Insurance Protection Act, introduced by Rep. Bob Onder (R-MO), and approved by the House Education and the Workforce Committee by a 21-15 vote on June 25, 2025.
Health Reimbursement Arrangements: Effectively codifies a June 2019 final rule promulgated by the first Trump Administration, which allowed employers to make a defined contribution—via Health Reimbursement Arrangements (HRAs)—to fund health coverage that the employee, and NOT the employer, owns and controls. This change could encourage smaller employers to help fund their workers’ health coverage, without ensnaring them in many of Obamacare’s regulatory requirements.
Beginning in 2026, clarifies that an HRA offered by an employer while the employee is covered by individual health insurance (or Medicare) complies with regulatory requirements included in the Public Health Service Act.
The HRA must be offered to all employees within the same class on the same terms, and the employer may not offer any other group health plan to such employees. Classes of employees include full-time, part-time, salaried, non-salaried, those in the same area for insurance rating purposes, those in the same collective bargaining unit, seasonal employees, those on a waiting period before qualifying for group health coverage, and other classes that the Treasury Department may classify.
Specifies that an employer may offer different arrangements for “new hires” (after a set date) within a class of employees. Permits employers to increase contributions to the employee’s HRA based on the number of dependents (i.e., spouse and/or children) and by age, but employers may not differentiate age-based contributions by more than 300 percent (i.e., an older employee may not receive more than three times the contribution that a younger employee receives, in line with the 3:1 restrictions on age rating of individual health insurance plans).
Requires substantiation that the employee is enrolled in individual health insurance as of the first day of the plan year, or the first date the employee becomes eligible for the HRA, as applicable. Requires employers to provide a notice to employees of the HRA mechanism at least 60 days before the beginning of the plan year, or the date the arrangement takes effect in the case of newly eligible workers.
Permits employees who use HRA funds to purchase individual health insurance to pay for their portion of the premium on a pre-tax basis. Adds the amount of funds the employer provides for health expenses via an HRA to the list of information the employer must report to the Internal Revenue Service via a W-2 form.
The text of this section mirrors H.R. 5463, the Choice Arrangement Act, introduced by Rep. Kevin Hern (R-OK), although H.R. 5463 also includes a tax credit (NOT included in the current legislation) for employers who establish HRAs.
Pharmaceutical Benefit Managers: Amends ERISA, the Public Health Service Act, and the Internal Revenue Code to create new transparency requirements related to pharmaceutical benefit managers (PBMs). In plan years beginning 30 months after enactment, requires PBMs to submit to group health plans a report on prescription drug spending every six months (or, at the request of the plan, on a quarterly basis).
Reports by PBMs providing coverage to specialized large employers (those with an average of at least 100 employees during the prior calendar year) must include:
- For each drug for which a claim was filed, the amount paid to the PBM, the amount paid to the pharmacy, the dispensing channel (e.g., mail-order, retail pharmacy, etc.), a breakout of brand-vs.-generic spending, acquisition prices, net price per course of treatment, total out-of-pocket spending by plan participants, the total amount of rebates received by the plan, the total amount received by the PBM for its services, and total remuneration for the drug (including any drug discount cards or co-payment assistance).
- For each drug therapeutic class, total spending, net spending after rebates received, the total amount received by the PBM, average net spending per drug, the number of plan beneficiaries filling such prescriptions, a description of formulary tiers, and total out-of-pocket spending.
- For each drug on which spending exceeded $10,000 (or the 50 drugs with the highest spending), the appropriate formulary tier and information regarding changes to the formulary.
- Where a PBM has an affiliated pharmacy, a discussion of incentives to fill prescriptions via a mail-order, retail, or specialty pharmacy, a breakout of the prescriptions filled at such pharmacies, and a breakout of costs for prescriptions filled at pharmacies affiliated with the PBM and pharmacies not affiliated with the PBM.
Requires PBMs providing coverage to all plans—including those with fewer than 100 employees, who are exempt from the requirements above—to provide a summary report “useful to group health plans for purposes of selecting” PBM services, with the format to be prescribed by the Departments of Treasury, Labor, and Health and Human Services (HHS) via guidance (not formal rulemaking). Requires all plans to provide a summary document to participants and beneficiaries “useful…in better understanding the plan” and containing only aggregate information. Also requires disclosure of:
- For drugs covered by the plan, gross drug spending, spending net of rebates, and total remuneration (including any drug discount cards or co-payment assistance);
- Amounts paid to brokers, consultants, and advisors for PBM referrals and services;
- Any policies that require participants or beneficiaries to use retail, mail-order, or specialty pharmacies affiliated with the PBM; and
- Total gross spending on all drugs during the plan reporting period.
Requires PBMs to provide information in a manner consistent with privacy obligations under the Health Insurance Portability and Accountability Act (HIPAA) and related laws. Specifies that such reports may contain “only summary health information,” and that the reporting requirement shall not affect the application of any federal or state privacy law.
Directs the Departments to develop a standardized format for the reports within 18 months. Requires plans to provide summary documents to employees, and gives the Departments enforcement authority. Imposes a $10,000 per day fine for failure to disclose or report required information, and a $100,000 fine for each item of false information. Allows the Departments to waive penalties, and/or extend the period of time for compliance, in cases of good-faith efforts to achieve compliance. Specifies that no provision shall be construed as allowing plans or PBMs to limit access or information to the Departments.
Cost-Sharing Reductions: Contains a permanent appropriation for cost-sharing reduction payments (CSRs) to insurers offering Exchange coverage, effective January 1, 2027. (This provision would therefore NOT affect plan premiums or Exchange coverage for the upcoming 2026 plan year, as premiums and benefit structures have already been set.) Prohibits such payments from going to plans that cover abortion, except if such abortion is necessary to save the life of the mother, or the pregnancy is the result of rape or incest.
Conservatives would note that this provision, by appropriating funds not included in the 2010 health care law, technically implements Obamacare. However, some conservatives may support this provision, which will 1) lower premiums for Exchange coverage, 2) lower spending on federal subsidies for Exchange coverage and 3) protect life, by ensuring that cost-sharing subsidies do not go to plans that cover elective abortion.
Background on Cost-Sharing Reductions: Section 1402 of the Patient Protection and Affordable Care Act (also known as Obamacare, P.L. 111-148) requires insurers to reduce cost-sharing (i.e., co-payments, co-insurance, and deductibles) for certain individuals enrolled in qualified health plans. Such reductions would convert the value of a silver plan, which ordinarily covers 70% of an average enrollee’s health expenses (i.e., the plan’s actuarial value), to a 94% actuarial value for households with incomes from 100-150% of the federal poverty level, an 87% actuarial value for households with incomes from 150-200% of poverty, and a 73% actuarial value for households with incomes from 200-250% of poverty. (In 2025, the federal poverty level stands at $15,650 for a single individual, and $32,150 for a family of four, in the continental U.S.)
However, the law as enacted included no appropriation of funds to reimburse insurers for reducing the cost-sharing as required by law. Notwithstanding the lack of an explicit appropriation, the Obama Administration paid cost-sharing reductions to insurers, citing authority provided by the Exchange premium subsidies. However, the premium subsidies (which DO have an explicit appropriation in law) are contained in an entirely different section of law than the cost-sharing reductions (the Internal Revenue Code vs. the Public Health Service Act), under the jurisdiction of an entirely different Cabinet Department (Treasury vs. HHS).
In July 2014, the House of Representatives authorized a suit, filed that November, to among other things block the CSR payments. In September 2015, Judge Rosemary Collyer of the District Court for the District of Columbia ruled that the House did not have standing to question the Obama Administration’s implementation of statutory text, but did have standing on constitutional grounds to challenge the spending of monies (i.e., CSR payments) not authorized by law. Subsequently, in May 2016 Judge Collyer rejected the Obama Administration’s justification for making the CSR payments absent an explicit appropriation, granting summary judgment for the House, although she stayed her ruling pending appeal.
While the Court of Appeals for the D.C. Circuit was still considering the appeal the Obama Administration had filed, the Trump Administration, following the collapse of efforts to “repeal-and-replace” Obamacare, in October 2017 ended the CSR payments. (The House’s lawsuit was subsequently settled in December 2017.) As a result, beginning with the 2018 plan year, insurers in most states built the cost of their CSR requirements into silver plan premiums, a practice known as “silver loading.”
Because Obamacare ties premium subsidy amounts to the value of the second-lowest cost silver plan in a given rating area, “silver loading” increases both silver plan premiums and the value of federal Exchange subsidies that enrollees receive—including enrollees in households with incomes above 250% of poverty, who do not qualify for cost-sharing reductions. (Some states permit or require insurers to sell silver plans without “silver loading” off of the Exchanges, so people who do not qualify for subsidies can buy plans with the higher CSR costs left out of their premiums.) For this reason, including an explicit CSR appropriation would end the higher premiums, and higher federal spending on premium subsidies, caused by the “silver loading” scheme.
Cost: On December 16, the Congressional Budget Office (CBO) released its cost estimate of the legislation. Overall, CBO estimated that the bill would reduce the deficit by $35.6 billion over ten years, decrease the number of people with health insurance by 100,000, and reduce gross benchmark premiums by an average of 11 percent.
The largest fiscal effects come from the cost-sharing reduction (CSR) appropriation. As explained above, directly appropriating funds for CSRs would largely end the practice of “silver loading,” reducing benchmark plan premiums, and subsidy spending tied to the size of those benchmark premiums. The budget office however noted one caveat to this analysis:
CBO expects that enacting section 202 would end silver loading in the states where roughly 75 percent of marketplace enrollees reside. Because some states mandate coverage of certain abortion services, and marketplace plans still must offer cost-sharing reductions, CBO projects that the other 25 percent of enrollees would live in states where silver loading would continue, consistent with current conditions.
Overall, CBO believes that the CSR appropriation would reduce the federal deficit by a net of $36.7 billion, with a modest increase (300,000) in the number of uninsured.
CBO estimates that the Association Health Plans provision would increase the number of people in association plans by 700,000, 200,000 of which were previously uninsured, and raise federal deficits by $2.9 billion. The deficit increase comes “primarily because of an increase among self-employed people taking up coverage through association health plans,” who can write off their premiums on their income taxes.
The budget office estimated that provisions regarding stop-loss insurance would have a de minimis fiscal impact, and that the Health Reimbursement Arrangement provisions would decrease revenues by $59 million, due to expanded use of this pre-tax mechanism. Lastly, CBO believes that the pharmaceutical benefit manager transparency provisions would modestly reduce premiums (less than 0.1 percent), which would increase federal revenues and therefore reduce the federal deficit by just under $2 billion over the decade.
This post has been updated to reflect release of the CBO score and House Rules Committee action regarding floor procedures for the bill, and to correct the short title for H.R. 2571.