Fair Care Act of 2026

(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— 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.

(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.

(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.

(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.