[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3748 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 3748
To amend the Internal Revenue Code of 1986 to allow individuals a
refundable and advanceable credit against income tax for health
insurance costs.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 28, 2004
Mr. Shadegg introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow individuals a
refundable and advanceable credit against income tax for health
insurance costs.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; CONSTITUTIONAL AUTHORITY.
(a) Short Title.--This Act may be cited as the ``Health Care Cost
Integrity and Fairness Act of 2004''.
(b) Constitutional Authority to Enact This Legislation.--The
constitutional authority upon which this Act rests is the power of
Congress to regulate commerce with foreign nations and among the
several States, set forth in article I, section 8 of the United States
Constitution.
SEC. 2. REFUNDABLE AND ADVANCEABLE CREDIT FOR HEALTH INSURANCE COSTS.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by redesignating section 36 as section 37 and by inserting
after section 35 the following new section:
``SEC. 36. HEALTH INSURANCE COSTS.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this subtitle an amount
equal to the amount paid during the taxable year for qualified health
insurance for coverage of the taxpayer, his spouse, and dependents.
``(b) Limitations.--
``(1) Maximum credit.--
``(A) In general.--The amount allowed as a credit
under subsection (a) to the taxpayer for the taxable
year shall not exceed the sum of the monthly
limitations for months during such taxable year.
``(B) Monthly limitation.--The monthly limitation
for any month is the amount equal to \1/12\ of the
lesser of--
``(i) the product of $1,000 multiplied by
the number of individuals taken into account
under subsection (a) who are covered under
qualified health insurance as of the first day
of such month, or
``(ii) $3,000.
``(2) Employer subsidized coverage.--Subsection (a) shall
not apply to amounts paid for coverage of any individual for
any month for which such individual participates in any
subsidized health plan maintained by any employer of the
taxpayer or of the spouse of the taxpayer. The rule of the last
sentence of section 162(l)(2)(B) shall apply for purposes of
the preceding sentence.
``(c) Qualified Health Insurance.--For purposes of this section--
``(1) In general.--The term `qualified health insurance'
means insurance which constitutes medical care if--
``(A) such insurance meets the requirements of
section 223(c)(2)(A)(ii),
``(B) there is no exclusion from, or limitation on,
coverage for any preexisting medical condition of any
applicant who, on the date the application is made, has
been continuously insured during the 1-year period
ending on the date of the application under--
``(i) qualified health insurance
(determined without regard to this
subparagraph), or
``(ii) a program described in--
``(I) title XVIII or XIX of the
Social Security Act,
``(II) chapter 55 of title 10,
United States Code,
``(III) chapter 17 of title 38,
United States Code,
``(IV) chapter 89 of title 5,
United States Code, or
``(V) the Indian Health Care
Improvement Act, and
``(C) in the case of each applicant who has not
been continuously so insured during the 1-year period
ending on the date the application is made, the
exclusion from, or limitation on, coverage for any
preexisting medical condition does not extend beyond
the period after such date equal to the lesser of--
``(i) the number of months immediately
prior to such date during which the individual
was not so insured since the illness or
condition in question was first diagnosed, or
``(ii) 1 year.
``(2) Exclusion of certain plans.--Such term does not
include--
``(A) insurance if substantially all of its
coverage is coverage described in section 223(c)(1)(B),
``(B) insurance under a program described in
paragraph (1)(B)(ii).
``(3) Transition rule for 2004.--In the case of
applications made during 2004, the requirements of
subparagraphs (C) and (D) of paragraph (1) are met only if the
insurance does not exclude from coverage, or limit coverage
for, any preexisting medical condition of any applicant.
``(d) Special Rules.--
``(1) Coordination with medical deduction, etc.--Any amount
paid by a taxpayer for insurance to which subsection (a)
applies shall not be taken into account in computing the amount
allowable to the taxpayer as a credit under section 35 or as a
deduction under section 162(l) or 213(a).
``(2) Denial of credit to dependents.--No credit 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) Married couples must file joint return.--
``(A) In general.--If the taxpayer is married at
the close of the taxable year, the credit shall be
allowed under subsection (a) only if the taxpayer and
his spouse file a joint return for the taxable year.
``(B) Marital status; certain married individuals
living apart.--Rules similar to the rules of paragraphs
(3) and (4) of section 21(e) shall apply for purposes
of this paragraph.
``(4) Verification of coverage, etc.--No credit shall be
allowed under this section to any individual unless such
individual's coverage under qualified health insurance, and the
amount paid for such coverage, are verified in such manner as
the Secretary may prescribe.
``(5) Coordination with advance payments of credit.--With
respect to any taxable year, the amount which would (but for
this subsection) be allowed as a credit to the taxpayer under
subsection (a) shall be reduced (but not below zero) by the
aggregate amount paid on behalf of such taxpayer under section
7528 for months beginning in such taxable year.
``(6) Cost-of-living adjustment.--In the case of any
taxable year beginning in a calendar year after 2004, each
dollar amount contained in subsection (b)(1)(B) 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
the taxable year begins by substituting `calendar year
2003' for `calendar year 1992' in subparagraph (B)
thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $10.''.
(b) Advance Payment of Credit.--Chapter 77 of such Code (relating
to miscellaneous provisions) is amended by adding at the end the
following new section:
``SEC. 7528. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS.
``(a) General Rule.--The Secretary shall establish a program for
making payments on behalf of individuals to providers of qualified
health insurance (as defined in section 36(c)) for such individuals.
``(b) Limitation on Advance Payments During Any Taxable Year.--The
Secretary may make payments under subsection (a) only to the extent
that the total amount of such payments made on behalf of any individual
during the taxable year does not exceed the amount allowable as a
credit to such individual for such year under section 36 (determined
without regard to subsection (d)(5) thereof).''.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``or 36'' after ``section
35''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by striking the item relating to section 36 and
inserting the following new items:
``Sec. 36. Health insurance costs.
``Sec. 37. Overpayments of tax.''.
(3) The table of sections for chapter 77 of such Code is
amended by adding at the end the following new item:
``Sec. 7528. Advance payment of credit for health insurance costs.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
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