<enum>I</enum> <header>Refundable health insurance credit</header> <section id="IDC9081C0C3BB049C089F15438504B5742"> <enum>101.</enum> <header>Refundable credit for health insurance coverage</header> <subsection id="IDC450968AC4D04A1DB56BEA8990F30B4F"> <enum>(a)</enum> <header>In general</header> <text>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:</text> <quoted-block id="IDB23A78A1ACB947A586470D245FC6E7DC"> <section id="ID77F6686F08E9405DA6D557EDC2F6EE1E"> <enum>36.</enum> <header>Health insurance costs</header> <subsection id="IDC45E125FDD114EF695E2CB76310D444F"> <enum>(a)</enum> <header>In general</header> <text>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 the taxpayer, his spouse, and dependents.</text> </subsection><subsection id="ID7C05FA762AFD4E48BB45F913649C5BF1"> <enum>(b)</enum> <header>Limitations</header> <paragraph id="ID368344F627EB489E949CECAF7DED426C"> <enum>(1)</enum> <header>In general</header> <text>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 coverage months during such taxable year for each individual referred to in subsection (a) for whom the taxpayer paid during the taxable year any amount for coverage under qualified health insurance.</text> </paragraph><paragraph id="ID0858813340B04C35B3BBAB82D336C86C"> <enum>(2)</enum> <header>Phaseout of amount</header> <subparagraph id="ID9B1EC632BE5F4AEBB382521AF19212B1"> <enum>(A)</enum> <header>Reduction based on adjusted gross income</header> <text>The amount determined under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B).</text> </subparagraph><subparagraph id="IDAE319B219FD343FC8B786890824B4C9D"> <enum>(B)</enum> <header>Amount of reduction</header> <text>The amount determined under this subparagraph with respect to any amount determined under paragraph (1) shall be the amount which bears the same ratio to such amount determined under paragraph (1) as—</text> <clause id="ID42337EDFED7D45F6B837E0B233862395"> <enum>(i)</enum> <text>the excess of—</text> <subclause id="ID4EA7A89F382848F3BA55FDAEF4A0030E"> <enum>(I)</enum> <text>the taxpayer’s adjusted gross income for such taxable year, over</text> </subclause><subclause id="ID2BDA841381B04F1786ED3ED02A9FF508"> <enum>(II)</enum> <text>the applicable dollar amount, bears to</text> </subclause></clause><clause id="ID1F8F8652C931442D8C043D6ED2774C6B"> <enum>(ii)</enum> <text>$10,000.</text> </clause><continuation-text continuation-text-level="subparagraph">The rules of subparagraphs (B) and (C) of section 219(g)(2) shall apply to any reduction under this subparagraph.</continuation-text></subparagraph><subparagraph id="IDA018BB473CA44D74B09FB9F7FB51E8AE"> <enum>(C)</enum> <header>Definitions</header> <text>For purposes of this paragraph—</text> <clause id="ID4FEC318798C44D61A2D01C3132D856FB"> <enum>(i)</enum> <text>adjusted gross income shall be determined in the same manner as under section 408A(c)(3)(C)(i), and</text> </clause><clause id="IDB8C4B5898742440BAD09A583920ABD2E"> <enum>(ii)</enum> <text>the applicable dollar amount is—</text> <subclause id="ID5BF627993EBE422EB4B7EAFB5C1AF737"> <enum>(I)</enum> <text>in the case of a taxpayer filing a joint return, an amount equal to 350 percent of the poverty line (as defined in section 673(2) of the Community Services Block Grant Act, for a family of 4) for the taxable year,</text> </subclause><subclause id="IDAD273D5E8E324D03999B60F0FF83DAB7"> <enum>(II)</enum> <text>in the case of any other taxpayer (other than a married individual filing a separate return), 350 percent of the poverty line (as so defined for an individual) for the taxable year, and</text> </subclause><subclause id="ID09B68A224F7340CEA9C7A722C62BE0C3"> <enum>(III)</enum> <text>in the case of a married individual filing a separate return, zero.</text> </subclause></clause></subparagraph></paragraph><paragraph id="ID1ECA4A3768AD4EA3B375B201495F9F8B"> <enum>(3)</enum> <header>Monthly limitation</header> <subparagraph id="ID574283A1BD5948DCA80B4297D3A59501"> <enum>(A)</enum> <header>In general</header> <text>The monthly limitation for an individual for each coverage month of such individual during the taxable year is the amount equal to <fraction>1/12</fraction>th of—</text> <clause id="ID3A15347A0F5743F2A7FDDF1D7A3DD238"> <enum>(i)</enum> <text>the base amount, plus</text> </clause><clause id="IDE9F0613546D148A395F9DA00C45E6699"> <enum>(ii)</enum> <text>50 percent of the amount paid in excess of the base amount.</text> </clause></subparagraph><subparagraph id="IDC99699AF4DEE491F82F35FBE482BBE7E"> <enum>(B)</enum> <header>Base amount</header> <text>For purposes of this paragraph, the base amount is—</text> <clause id="ID8F1713857295494D9EB717C662F6C748"> <enum>(i)</enum> <text>$1,000 if such individual is the taxpayer,</text> </clause><clause id="ID88A94D1A252B47F580DBC6BD0A95EA08"> <enum>(ii)</enum> <text>$500 if—</text> <subclause id="ID30D9B86E191546BC968870168B7021BD"> <enum>(I)</enum> <text>such individual is the spouse of the taxpayer,</text> </subclause><subclause id="IDA5F594AAB89A402BB7B576ED9CA4C32F"> <enum>(II)</enum> <text>the taxpayer and such spouse are married as of the first day of such month, and</text> </subclause><subclause id="IDD8B40492FE4A4FBC8D79C930F432F104"> <enum>(III)</enum> <text>the taxpayer files a joint return for the taxable year, and</text> </subclause></clause><clause id="ID6CE265AB1D494BF9B55293E05F10DC26"> <enum>(iii)</enum> <text>$500 if such individual is an individual for whom a deduction under section 151(c) is allowable to the taxpayer for such taxable year.</text> </clause></subparagraph><subparagraph id="ID7BB43E8A74B5403BAF7850C9FE7C1A93"> <enum>(C)</enum> <header>Limitation on number of individuals other than taxpayer</header> <text>Not more than 3 individuals may be taken into account by the taxpayer under clauses (ii) and (iii) of subparagraph (B).</text> </subparagraph><subparagraph id="ID129A813053D04274A156EE9F7DB93758"> <enum>(D)</enum> <header>Special rule for married individuals</header> <text>In the case of an individual—</text> <clause id="ID27DFA4E4E52F4EFDBCCE468AAE27F2A2"> <enum>(i)</enum> <text>who is married (within the meaning of section 7703) as of the close of the taxable year but does not file a joint return for such year, and</text> </clause><clause id="ID13CC437D9A434CEBA2240CEA40309DEB"> <enum>(ii)</enum> <text>who does not live apart from such individual’s spouse at all times during the taxable year, the limitation imposed by subparagraph (C) shall be divided equally between the individual and the individual’s spouse unless they agree on a different division.</text> </clause></subparagraph></paragraph><paragraph id="ID77E68B2F000C441C823048FF22792F70"> <enum>(4)</enum> <header>Coverage month</header> <text>For purposes of this subsection—</text> <subparagraph id="ID268819A49C6F4ABA832396BF611A6D63"> <enum>(A)</enum> <header>In general</header> <text>The term <term>coverage month</term> means, with respect to an individual, any month if—</text> <clause id="IDC6CF1C2F45644AF49C896FB1BE8AD7E6"> <enum>(i)</enum> <text>as of the first day of such month such individual is covered by qualified health insurance, and</text> </clause><clause id="ID4CF3EC27A8F64103BFB35A15E1F9D705"> <enum>(ii)</enum> <text>the premium for coverage under such insurance for such month is paid by the taxpayer.</text> </clause></subparagraph><subparagraph id="ID460C7A4F571E4774A490E5FCB2C50C85"> <enum>(B)</enum> <header>Employer-subsidized coverage</header> <clause id="ID7D0BCBCC4A094880BCD31E535F30031C"> <enum>(i)</enum> <header>In general</header> <text>Such term shall not include any month for which such individual participates in any subsidized health plan (within the meaning of section 162(l)(2)) maintained by any employer of the taxpayer or of the spouse of the taxpayer.</text> </clause><clause id="IDA119F25E5C4A4E82B54D1708E898A133"> <enum>(ii)</enum> <header>Premiums to nonsubsidized plans</header> <text>If an employer of the taxpayer or the spouse of the taxpayer maintains a health plan which is not a subsidized health plan (as so defined) and which constitutes qualified health insurance, employee contributions to the plan shall be treated as amounts paid for qualified health insurance.</text> </clause></subparagraph><subparagraph id="IDA45986ABE818411C80CA7364B407BF50"> <enum>(C)</enum> <header>Cafeteria plan and flexible spending account beneficiaries</header> <text>Such term shall not include any month during a taxable year if any amount is not includible in the gross income of the taxpayer for such year under section 106 with respect to—</text> <clause id="ID7C36715B5D3F4F9DBA66EDA0C7C2D365"> <enum>(i)</enum> <text>a benefit chosen under a cafeteria plan (as defined in section 125(d)), or</text> </clause><clause id="ID9D921DF2595C4061BFFA8296D6C87B10"> <enum>(ii)</enum> <text>a benefit provided under a flexible spending or similar arrangement.</text> </clause></subparagraph><subparagraph id="ID7A946A002CA44A1D8A332F92B8571445"> <enum>(D)</enum> <header>Medicare and medicaid</header> <text>Such term shall not include any month with respect to an individual if, as of the first day of such month, such individual—</text> <clause id="ID13426AEF21C74BC8B9A9A30D0860D85C"> <enum>(i)</enum> <text>is entitled to any benefits under title XVIII of the <act-name parsable-cite="SSA">Social Security Act</act-name>, or</text> </clause><clause id="IDB37FEC5AEB9148EE9AE81F11A0C60152"> <enum>(ii)</enum> <text>is a participant in the program under title XIX or XXI of such Act.</text> </clause></subparagraph><subparagraph id="ID08B2E8ABC4AA4E5E855E70BF81A6E309"> <enum>(E)</enum> <header>Certain other coverage</header> <text>Such term shall not include any month during a taxable year with respect to an individual if, at any time during such year, any benefit is provided to such individual under—</text> <clause id="ID5DDFEFFF7EE54E39A73A88323B044DA0"> <enum>(i)</enum> <text>chapter 89 of title 5, United States Code,</text> </clause><clause id="IDC3F4C62FEA4C459CAA03AC10D735059F"> <enum>(ii)</enum> <text>chapter 55 of title 10, United States Code,</text> </clause><clause id="ID815BCC028BA745CD86E178A2C92355A6"> <enum>(iii)</enum> <text>chapter 17 of title 38, United States Code, or</text> </clause><clause id="IDC383CE4569CE463E9519AA77029C2499"> <enum>(iv)</enum> <text>any medical care program under the <act-name parsable-cite="IHCIA">Indian Health Care Improvement Act</act-name>.</text> </clause></subparagraph><subparagraph id="IDE8DF610D42564A1ABE65710050F73E9B"> <enum>(F)</enum> <header>Prisoners</header> <text>Such term shall not include any month with respect to an individual if, as of the first day of such month, such individual is imprisoned under Federal, State, or local authority.</text> </subparagraph><subparagraph id="ID14F4B65416E943E7A5FCF17A0E170163"> <enum>(G)</enum> <header>Insufficient presence in United States</header> <text>Such term shall not include any month during a taxable year with respect to an individual if such individual is present in the United States on fewer than 183 days during such year (determined in accordance with section 7701(b)(7)).</text> </subparagraph></paragraph><paragraph id="IDA0080FBD2D16408395819D6A0082EE94"> <enum>(5)</enum> <header>Coordination with deduction for health insurance costs of self-employed individuals</header> <text>In the case of a taxpayer who is eligible to deduct any amount under section 162(l) for the taxable year, this section shall apply only if the taxpayer elects not to claim any amount as a deduction under such section for such year.</text> </paragraph></subsection><subsection id="ID77FCA939AF664E05B4754429E6EF8B1E"> <enum>(c)</enum> <header>Reduced credit for participants in health plans of employers</header> <text>In the case of any individual who participates in a subsidized health plan (within the meaning of section 162(l)(2)) maintained by any employer of the taxpayer or of the spouse of the taxpayer (not including a cafeteria plan (as defined in section 125(d)), there shall be allowed to the taxpayer one-half of the credit that would be allowed to the taxpayer under subsection (a) (determined without regard to the participation in the health plan) if the monthly limitation were determined without the addition of the amount described in subsection (b)(3)(A)(ii).</text> </subsection><subsection id="IDA31F98154D16418B92FFEAF00689DE83"> <enum>(d)</enum> <header>Qualified health insurance</header> <text>For purposes of this section—</text> <paragraph id="ID60E79FD3515C4283A0BD32F030D9F3BE"> <enum>(1)</enum> <header>In general</header> <text>The term <term>qualified health insurance</term> means insurance which constitutes medical care as defined in section 213(d) without regard to—</text> <subparagraph id="ID737F613C28E04432BFA1971014CD9B7A"> <enum>(A)</enum> <text>paragraph (1)(C) thereof, and</text> </subparagraph><subparagraph id="IDADAC85C6627B434C81230457F8A63A44"> <enum>(B)</enum> <text>so much of paragraph (1)(D) thereof as relates to qualified long-term care insurance contracts.</text> </subparagraph></paragraph><paragraph id="IDFEBF943CCC2D49A8A303471F40E1ADD8"> <enum>(2)</enum> <header>Exclusion of certain other contracts</header> <text>Such term shall not include insurance if a substantial portion of its benefits are excepted benefits (as defined in section 9832(c)).</text> </paragraph></subsection><subsection id="ID30C42CD82F914212B7F6F0AA55A90A5E"> <enum>(e)</enum> <header>Medical savings account and health savings account contributions</header> <paragraph id="ID2809E3B0B4C74E1EADE1327F0E2C2C7A"> <enum>(1)</enum> <header>In general</header> <text>If a deduction would (but for paragraph (2)) be allowed under section 220 or 223 to the taxpayer for a payment for the taxable year to the medical savings account or health savings account of an individual, subsection (a) shall be applied by treating such payment as a payment for qualified health insurance for such individual.</text> </paragraph><paragraph id="IDA62D5760AD134A9AB02EF689C3CC0867"> <enum>(2)</enum> <header>Denial of double benefit</header> <text>No deduction shall be allowed under section 220 or 223 for that portion of the payments otherwise allowable as a deduction under section 220 or 223 for the taxable year which is equal to the amount of credit allowed for such taxable year by reason of this subsection.</text> </paragraph></subsection><subsection id="IDC2699D4755CA4F6483ED69B99F53D6E1"> <enum>(f)</enum> <header>Special rules</header> <paragraph id="ID7BF4DAE9781B4421A2C0D9E243912CDD"> <enum>(1)</enum> <header>Coordination with medical expense and high deductible health plan deductions</header> <text>The amount which would (but for this paragraph) be taken into account by the taxpayer under section 213 or 224 for the taxable year shall be reduced by the credit (if any) allowed by this section to the taxpayer for such year.</text> </paragraph><paragraph id="IDAD958DB20ABE41D58A436234971336FB"> <enum>(2)</enum> <header>Denial of credit to dependents</header> <text>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.</text> </paragraph><paragraph id="ID61DB01E29C924818BE9C27891AB88EEC"> <enum>(3)</enum> <header>Denial of double benefit</header> <text>No credit shall be allowed under subsection (a) if the credit under section 35 is allowed and no credit shall be allowed under 35 if a credit is allowed under this section 35.</text> </paragraph><paragraph id="ID7CABA822CB684813A6336B7EA91DFE8E"> <enum>(4)</enum> <header>Election not to claim credit</header> <text>This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.</text> </paragraph><paragraph id="IDEC47498E72994812875632D866ABF92C"> <enum>(5)</enum> <header>Inflation adjustment</header> <text>In the case of any taxable year beginning in a calendar year after 2005, each dollar amount contained in subsection (b)(3)(B) shall be increased by an amount equal to—</text> <subparagraph id="ID3AD7CDC2E3384CF6A62E48E3B569D8F6"> <enum>(A)</enum> <text>such dollar amount, multiplied by</text> </subparagraph><subparagraph id="ID5ED78BA7888E49E9B43748F08978AFEE"> <enum>(B)</enum> <text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting <quote>calendar year 2004</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof.</text> </subparagraph><continuation-text continuation-text-level="paragraph">Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50 ($25 in the case of the dollar amount in subsection (b)(3)(B)(iii)).</continuation-text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID78C04166ECEF48E39DAB56F9BA30E4C8"> <enum>(b)</enum> <header>Information reporting</header> <paragraph id="ID83D321D1297D48EAA65180E47B10446B"> <enum>(1)</enum> <header>In general</header> <text>Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 (relating to information concerning transactions with other persons) is amended by inserting after section 6050T the following new section:</text> <quoted-block id="ID52A1DE27201F4C348CFAD770AFA22B73"> <section id="ID84B8F47E2DEC4574B5CD793ACF0AE6BA"> <enum>6050U.</enum> <header>Returns relating to payments for qualified health insurance</header> <subsection id="ID910D411112DE4863ABC0E5961C767805"> <enum>(a)</enum> <header>In general</header> <text>Any person who, in connection with a trade or business conducted by such person, receives payments during any calendar year from any individual for coverage of such individual or any other individual under creditable health insurance, shall make the return described in subsection (b) (at such time as the Secretary may by regulations prescribe) with respect to each individual from whom such payments were received.</text> </subsection><subsection id="ID22A06022B08D402AB7F089FD409B26A0"> <enum>(b)</enum> <header>Form and manner of returns</header> <text>A return is described in this subsection if such return—</text> <paragraph id="ID6D1ADC5AD39E45D9A70ADFD3406F5C58"> <enum>(1)</enum> <text>is in such form as the Secretary may prescribe, and</text> </paragraph><paragraph id="ID86B8BB111CA44F7CABA575C34398E3AC"> <enum>(2)</enum> <text>contains—</text> <subparagraph id="ID0CD7A436451243D8B705A26492F7D006"> <enum>(A)</enum> <text>the name, address, and TIN of the individual from whom payments described in subsection (a) were received,</text> </subparagraph><subparagraph id="IDD8346D5427724B48878CB055FDA0533D"> <enum>(B)</enum> <text>the name, address, and TIN of each individual who was provided by such person with coverage under creditable health insurance by reason of such payments and the period of such coverage, and</text> </subparagraph><subparagraph id="ID640934AF380F435C9120A73BB7EA5CE8"> <enum>(C)</enum> <text>such other information as the Secretary may reasonably prescribe.</text> </subparagraph></paragraph></subsection><subsection id="IDBD25B3A8900C489D96B5B9DDCE1E401B"> <enum>(c)</enum> <header>Creditable health insurance</header> <text>For purposes of this section, the term <term>creditable health insurance</term> means qualified health insurance (as defined in section 36(c)) other than—</text> <paragraph id="ID46C19E7ADC5041C298589A26A2CB12C5"> <enum>(1)</enum> <text>insurance under a subsidized group health plan maintained by an employer, or</text> </paragraph><paragraph id="IDBD309C59E51A460DB6F79D33859E0D92"> <enum>(2)</enum> <text>to the extent provided in regulations prescribed by the Secretary, any other insurance covering an individual if no credit is allowable under section 36 with respect to such coverage.</text> </paragraph></subsection><subsection id="ID873CEAE327C34609A07E0749088B9FE9"> <enum>(d)</enum> <header>Statements to be furnished to individuals with respect to whom information is required</header> <text>Every person required to make a return under subsection (a) shall furnish to each individual whose name is required under subsection (b)(2)(A) to be set forth in such return a written statement showing—</text> <paragraph id="ID968342AD2095421AB48C7AE658823B94"> <enum>(1)</enum> <text>the name and address of the person required to make such return and the phone number of the information contact for such person,</text> </paragraph><paragraph id="IDC799B4BF3CB04AA685E74DCA02D902BC"> <enum>(2)</enum> <text>the aggregate amount of payments described in subsection (a) received by the person required to make such return from the individual to whom the statement is required to be furnished, and</text> </paragraph><paragraph id="IDD373331F123240898727E190C1519AC7"> <enum>(3)</enum> <text>the information required under subsection (b)(2)(B) with respect to such payments.</text> </paragraph><continuation-text continuation-text-level="subsection">The written statement required under the preceding sentence shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) is required to be made.</continuation-text></subsection><subsection id="ID7378388878104D9CB8D9F432FD09A6A2"> <enum>(e)</enum> <header>Returns which would be required to be made by 2 or more persons</header> <text>Except to the extent provided in regulations prescribed by the Secretary, in the case of any amount received by any person on behalf of another person, only the person first receiving such amount shall be required to make the return under subsection (a).</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="ID7D1596BAB5CD4B81BA1CF3B628F8F58E"> <enum>(2)</enum> <header>Assessable penalties</header> <subparagraph id="ID1AFEFE17F78B4A629F3A82B4535A2724"> <enum>(A)</enum> <text>Subparagraph (B) of section 6724(d)(1) of such Code (relating to definitions) is amended by redesignating clauses (xiii) through (xviii) as clauses (xiv) through (xix), respectively, and by inserting after clause (xii) the following new clause:</text> <quoted-block id="IDC9BED8A8E76A4DC4B416412EBD278F16"> <clause id="ID54C3A66B9B334873976D246D01B7D3A5"> <enum>(xiii)</enum> <text>section 6050U (relating to returns relating to payments for qualified health insurance),</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph><subparagraph id="ID42665B2003954D9FBBEF362523849B8B"> <enum>(B)</enum> <text>Paragraph (2) of section 6724(d) of such Code is amended by striking <quote>or</quote> at the end of the next to last subparagraph, by striking the period at the end of the last subparagraph and inserting <quote>, or</quote>, and by adding at the end the following new subparagraph:</text> <quoted-block id="ID9C5BB4031EC34863ABB31BA8CC378268"> <subclause id="IDE0118591917245C9ADF248382F125A27" indent="up2"> <enum>(CC)</enum> <text>section 6050U(d) (relating to returns relating to payments for qualified health insurance).</text> </subclause><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph><paragraph id="ID52AD62482D6B445B92E51440AFA5B432"> <enum>(3)</enum> <header>Clerical amendment</header> <text>The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to section 6050T the following new item:</text> <quoted-block id="IDD05D0DD1569E4EB5B6D12760A4911B7E" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 6050U. Returns relating to payments for qualified health insurance.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="ID76C6CCA3B0DC4F629675C493189BC2F4"> <enum>(c)</enum> <header>Conforming amendments</header> <paragraph id="ID095C8AF611A548A78E7B9024A984455C"> <enum>(1)</enum> <text>Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period <quote>, or from section 36 of such Code</quote>.</text> </paragraph><paragraph id="ID73514CE12C4A4FED938DF70C65B4F45A"> <enum>(2)</enum> <text>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 last item and inserting the following new items:</text> <quoted-block id="ID2B32DA9E6ED24BFBB327864812EB5CB7" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 36. Health insurance costs.</toc-entry> <toc-entry level="section">Sec. 37. Overpayments of tax.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="IDE91B4BBB2C6B4455B6B1E5594835E00A"> <enum>(d)</enum> <header>Effective date</header> <text>The amendments made by this section shall apply to taxable years beginning after December 31, 2004.</text> </subsection></section><section id="ID9425688BB26D436DA1E99C2C1E44FBBC"> <enum>102.</enum> <header>Advance payment of credit for purchasers of qualified health insurance</header> <subsection id="ID0ED5F050ABDC4DE7A55D905D1CE0B47E"> <enum>(a)</enum> <header>In general</header> <text>Chapter 77 of the Internal Revenue Code of 1986 (relating to miscellaneous provisions) is amended by adding at the end the following new section:</text> <quoted-block id="ID260C3DF11E7D4D308A9FA5954C6E864D"> <section id="ID7DD736DA23F24B6C8CCD936174BEFA58"> <enum>7529.</enum> <header>Advance payment of health insurance credit for purchasers of qualified health insurance</header> <subsection id="ID7AD6538308264195BCD14410BC851CD3"> <enum>(a)</enum> <header>General rule</header> <text>In the case of an eligible individual, the Secretary shall make payments to the provider of such individual’s qualified health insurance equal to such individual’s qualified health insurance credit advance amount with respect to such provider.</text> </subsection><subsection id="ID4F940BD9B34D4AB8A372CC7D1EC674F4"> <enum>(b)</enum> <header>Eligible individual</header> <text>For purposes of this section, the term <term>eligible individual</term> means any individual—</text> <paragraph id="ID2ABAFC68DFFF416EA03E14AEA92F7140"> <enum>(1)</enum> <text>who purchases qualified health insurance (as defined in section 36(c)), and</text> </paragraph><paragraph id="IDA9AF144E7A8449C1A991B39A0D8BD316"> <enum>(2)</enum> <text>for whom a qualified health insurance credit eligibility certificate is in effect.</text> </paragraph></subsection><subsection id="IDA85D6F93E3844C53A892E9A261EB7D41"> <enum>(c)</enum> <header>Qualified health insurance credit eligibility certificate</header> <text>For purposes of this section, a qualified health insurance credit eligibility certificate is a statement furnished by an individual to the Secretary which—</text> <paragraph id="IDC79A122683A943FA8496E4D959629332"> <enum>(1)</enum> <text>certifies that the individual will be eligible to receive the credit provided by section 36 for the taxable year,</text> </paragraph><paragraph id="ID9F3CA54679EB4606A99584F0A7258358"> <enum>(2)</enum> <text>estimates the amount of such credit for such taxable year, and</text> </paragraph><paragraph id="IDA9E97D58F3E74CBA8DFBBAAFAAC61B1C"> <enum>(3)</enum> <text>provides such other information as the Secretary may require for purposes of this section.</text> </paragraph></subsection><subsection id="ID449B2B94DC2A44ABA5204DF1067A4351"> <enum>(d)</enum> <header>Qualified health insurance credit advance amount</header> <text>For purposes of this section, the term <term>qualified health insurance credit advance amount</term> means, with respect to any provider of qualified health insurance, the Secretary’s estimate of the amount of credit allowable under section 36 to the individual for the taxable year which is attributable to the insurance provided to the individual by such provider.</text> </subsection><subsection id="IDE151B54F4074440A873CA5D74088578B"> <enum>(e)</enum> <header>Regulations</header> <text>The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations modifying recapture rules for any overpayment of the qualified health insurance credit advance amount which equals at least 2 percent of the taxpayer’s adjusted gross income for the taxable year by allowing periodic payments in lieu of a lump-sum payment for any such taxpayer whose savings and income warrant such modification.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID1DD41763302B4A6AB2922A935D180761"> <enum>(b)</enum> <header>Clerical amendment</header> <text>The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:</text> <quoted-block id="IDD00B86555F3740128868661CED3E9544" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 7529. Advance payment of health insurance credit for purchasers of qualified health insurance.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="IDF76A876957664C47B7D40EC8CBE09B42"> <enum>(c)</enum> <header>Effective date</header> <text>The amendments made by this section shall apply to taxable year beginning after the date of the enactment of this Act.</text> </subsection></section>

Short title

This Act may be cited as the

Save Act

<enum>I</enum> <header>Refundable health insurance credit</header> <section id="IDC9081C0C3BB049C089F15438504B5742"> <enum>101.</enum> <header>Refundable credit for health insurance coverage</header> <subsection id="IDC450968AC4D04A1DB56BEA8990F30B4F"> <enum>(a)</enum> <header>In general</header> <text>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:</text> <quoted-block id="IDB23A78A1ACB947A586470D245FC6E7DC"> <section id="ID77F6686F08E9405DA6D557EDC2F6EE1E"> <enum>36.</enum> <header>Health insurance costs</header> <subsection id="IDC45E125FDD114EF695E2CB76310D444F"> <enum>(a)</enum> <header>In general</header> <text>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 the taxpayer, his spouse, and dependents.</text> </subsection><subsection id="ID7C05FA762AFD4E48BB45F913649C5BF1"> <enum>(b)</enum> <header>Limitations</header> <paragraph id="ID368344F627EB489E949CECAF7DED426C"> <enum>(1)</enum> <header>In general</header> <text>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 coverage months during such taxable year for each individual referred to in subsection (a) for whom the taxpayer paid during the taxable year any amount for coverage under qualified health insurance.</text> </paragraph><paragraph id="ID0858813340B04C35B3BBAB82D336C86C"> <enum>(2)</enum> <header>Phaseout of amount</header> <subparagraph id="ID9B1EC632BE5F4AEBB382521AF19212B1"> <enum>(A)</enum> <header>Reduction based on adjusted gross income</header> <text>The amount determined under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B).</text> </subparagraph><subparagraph id="IDAE319B219FD343FC8B786890824B4C9D"> <enum>(B)</enum> <header>Amount of reduction</header> <text>The amount determined under this subparagraph with respect to any amount determined under paragraph (1) shall be the amount which bears the same ratio to such amount determined under paragraph (1) as—</text> <clause id="ID42337EDFED7D45F6B837E0B233862395"> <enum>(i)</enum> <text>the excess of—</text> <subclause id="ID4EA7A89F382848F3BA55FDAEF4A0030E"> <enum>(I)</enum> <text>the taxpayer’s adjusted gross income for such taxable year, over</text> </subclause><subclause id="ID2BDA841381B04F1786ED3ED02A9FF508"> <enum>(II)</enum> <text>the applicable dollar amount, bears to</text> </subclause></clause><clause id="ID1F8F8652C931442D8C043D6ED2774C6B"> <enum>(ii)</enum> <text>$10,000.</text> </clause><continuation-text continuation-text-level="subparagraph">The rules of subparagraphs (B) and (C) of section 219(g)(2) shall apply to any reduction under this subparagraph.</continuation-text></subparagraph><subparagraph id="IDA018BB473CA44D74B09FB9F7FB51E8AE"> <enum>(C)</enum> <header>Definitions</header> <text>For purposes of this paragraph—</text> <clause id="ID4FEC318798C44D61A2D01C3132D856FB"> <enum>(i)</enum> <text>adjusted gross income shall be determined in the same manner as under section 408A(c)(3)(C)(i), and</text> </clause><clause id="IDB8C4B5898742440BAD09A583920ABD2E"> <enum>(ii)</enum> <text>the applicable dollar amount is—</text> <subclause id="ID5BF627993EBE422EB4B7EAFB5C1AF737"> <enum>(I)</enum> <text>in the case of a taxpayer filing a joint return, an amount equal to 350 percent of the poverty line (as defined in section 673(2) of the Community Services Block Grant Act, for a family of 4) for the taxable year,</text> </subclause><subclause id="IDAD273D5E8E324D03999B60F0FF83DAB7"> <enum>(II)</enum> <text>in the case of any other taxpayer (other than a married individual filing a separate return), 350 percent of the poverty line (as so defined for an individual) for the taxable year, and</text> </subclause><subclause id="ID09B68A224F7340CEA9C7A722C62BE0C3"> <enum>(III)</enum> <text>in the case of a married individual filing a separate return, zero.</text> </subclause></clause></subparagraph></paragraph><paragraph id="ID1ECA4A3768AD4EA3B375B201495F9F8B"> <enum>(3)</enum> <header>Monthly limitation</header> <subparagraph id="ID574283A1BD5948DCA80B4297D3A59501"> <enum>(A)</enum> <header>In general</header> <text>The monthly limitation for an individual for each coverage month of such individual during the taxable year is the amount equal to <fraction>1/12</fraction>th of—</text> <clause id="ID3A15347A0F5743F2A7FDDF1D7A3DD238"> <enum>(i)</enum> <text>the base amount, plus</text> </clause><clause id="IDE9F0613546D148A395F9DA00C45E6699"> <enum>(ii)</enum> <text>50 percent of the amount paid in excess of the base amount.</text> </clause></subparagraph><subparagraph id="IDC99699AF4DEE491F82F35FBE482BBE7E"> <enum>(B)</enum> <header>Base amount</header> <text>For purposes of this paragraph, the base amount is—</text> <clause id="ID8F1713857295494D9EB717C662F6C748"> <enum>(i)</enum> <text>$1,000 if such individual is the taxpayer,</text> </clause><clause id="ID88A94D1A252B47F580DBC6BD0A95EA08"> <enum>(ii)</enum> <text>$500 if—</text> <subclause id="ID30D9B86E191546BC968870168B7021BD"> <enum>(I)</enum> <text>such individual is the spouse of the taxpayer,</text> </subclause><subclause id="IDA5F594AAB89A402BB7B576ED9CA4C32F"> <enum>(II)</enum> <text>the taxpayer and such spouse are married as of the first day of such month, and</text> </subclause><subclause id="IDD8B40492FE4A4FBC8D79C930F432F104"> <enum>(III)</enum> <text>the taxpayer files a joint return for the taxable year, and</text> </subclause></clause><clause id="ID6CE265AB1D494BF9B55293E05F10DC26"> <enum>(iii)</enum> <text>$500 if such individual is an individual for whom a deduction under section 151(c) is allowable to the taxpayer for such taxable year.</text> </clause></subparagraph><subparagraph id="ID7BB43E8A74B5403BAF7850C9FE7C1A93"> <enum>(C)</enum> <header>Limitation on number of individuals other than taxpayer</header> <text>Not more than 3 individuals may be taken into account by the taxpayer under clauses (ii) and (iii) of subparagraph (B).</text> </subparagraph><subparagraph id="ID129A813053D04274A156EE9F7DB93758"> <enum>(D)</enum> <header>Special rule for married individuals</header> <text>In the case of an individual—</text> <clause id="ID27DFA4E4E52F4EFDBCCE468AAE27F2A2"> <enum>(i)</enum> <text>who is married (within the meaning of section 7703) as of the close of the taxable year but does not file a joint return for such year, and</text> </clause><clause id="ID13CC437D9A434CEBA2240CEA40309DEB"> <enum>(ii)</enum> <text>who does not live apart from such individual’s spouse at all times during the taxable year, the limitation imposed by subparagraph (C) shall be divided equally between the individual and the individual’s spouse unless they agree on a different division.</text> </clause></subparagraph></paragraph><paragraph id="ID77E68B2F000C441C823048FF22792F70"> <enum>(4)</enum> <header>Coverage month</header> <text>For purposes of this subsection—</text> <subparagraph id="ID268819A49C6F4ABA832396BF611A6D63"> <enum>(A)</enum> <header>In general</header> <text>The term <term>coverage month</term> means, with respect to an individual, any month if—</text> <clause id="IDC6CF1C2F45644AF49C896FB1BE8AD7E6"> <enum>(i)</enum> <text>as of the first day of such month such individual is covered by qualified health insurance, and</text> </clause><clause id="ID4CF3EC27A8F64103BFB35A15E1F9D705"> <enum>(ii)</enum> <text>the premium for coverage under such insurance for such month is paid by the taxpayer.</text> </clause></subparagraph><subparagraph id="ID460C7A4F571E4774A490E5FCB2C50C85"> <enum>(B)</enum> <header>Employer-subsidized coverage</header> <clause id="ID7D0BCBCC4A094880BCD31E535F30031C"> <enum>(i)</enum> <header>In general</header> <text>Such term shall not include any month for which such individual participates in any subsidized health plan (within the meaning of section 162(l)(2)) maintained by any employer of the taxpayer or of the spouse of the taxpayer.</text> </clause><clause id="IDA119F25E5C4A4E82B54D1708E898A133"> <enum>(ii)</enum> <header>Premiums to nonsubsidized plans</header> <text>If an employer of the taxpayer or the spouse of the taxpayer maintains a health plan which is not a subsidized health plan (as so defined) and which constitutes qualified health insurance, employee contributions to the plan shall be treated as amounts paid for qualified health insurance.</text> </clause></subparagraph><subparagraph id="IDA45986ABE818411C80CA7364B407BF50"> <enum>(C)</enum> <header>Cafeteria plan and flexible spending account beneficiaries</header> <text>Such term shall not include any month during a taxable year if any amount is not includible in the gross income of the taxpayer for such year under section 106 with respect to—</text> <clause id="ID7C36715B5D3F4F9DBA66EDA0C7C2D365"> <enum>(i)</enum> <text>a benefit chosen under a cafeteria plan (as defined in section 125(d)), or</text> </clause><clause id="ID9D921DF2595C4061BFFA8296D6C87B10"> <enum>(ii)</enum> <text>a benefit provided under a flexible spending or similar arrangement.</text> </clause></subparagraph><subparagraph id="ID7A946A002CA44A1D8A332F92B8571445"> <enum>(D)</enum> <header>Medicare and medicaid</header> <text>Such term shall not include any month with respect to an individual if, as of the first day of such month, such individual—</text> <clause id="ID13426AEF21C74BC8B9A9A30D0860D85C"> <enum>(i)</enum> <text>is entitled to any benefits under title XVIII of the <act-name parsable-cite="SSA">Social Security Act</act-name>, or</text> </clause><clause id="IDB37FEC5AEB9148EE9AE81F11A0C60152"> <enum>(ii)</enum> <text>is a participant in the program under title XIX or XXI of such Act.</text> </clause></subparagraph><subparagraph id="ID08B2E8ABC4AA4E5E855E70BF81A6E309"> <enum>(E)</enum> <header>Certain other coverage</header> <text>Such term shall not include any month during a taxable year with respect to an individual if, at any time during such year, any benefit is provided to such individual under—</text> <clause id="ID5DDFEFFF7EE54E39A73A88323B044DA0"> <enum>(i)</enum> <text>chapter 89 of title 5, United States Code,</text> </clause><clause id="IDC3F4C62FEA4C459CAA03AC10D735059F"> <enum>(ii)</enum> <text>chapter 55 of title 10, United States Code,</text> </clause><clause id="ID815BCC028BA745CD86E178A2C92355A6"> <enum>(iii)</enum> <text>chapter 17 of title 38, United States Code, or</text> </clause><clause id="IDC383CE4569CE463E9519AA77029C2499"> <enum>(iv)</enum> <text>any medical care program under the <act-name parsable-cite="IHCIA">Indian Health Care Improvement Act</act-name>.</text> </clause></subparagraph><subparagraph id="IDE8DF610D42564A1ABE65710050F73E9B"> <enum>(F)</enum> <header>Prisoners</header> <text>Such term shall not include any month with respect to an individual if, as of the first day of such month, such individual is imprisoned under Federal, State, or local authority.</text> </subparagraph><subparagraph id="ID14F4B65416E943E7A5FCF17A0E170163"> <enum>(G)</enum> <header>Insufficient presence in United States</header> <text>Such term shall not include any month during a taxable year with respect to an individual if such individual is present in the United States on fewer than 183 days during such year (determined in accordance with section 7701(b)(7)).</text> </subparagraph></paragraph><paragraph id="IDA0080FBD2D16408395819D6A0082EE94"> <enum>(5)</enum> <header>Coordination with deduction for health insurance costs of self-employed individuals</header> <text>In the case of a taxpayer who is eligible to deduct any amount under section 162(l) for the taxable year, this section shall apply only if the taxpayer elects not to claim any amount as a deduction under such section for such year.</text> </paragraph></subsection><subsection id="ID77FCA939AF664E05B4754429E6EF8B1E"> <enum>(c)</enum> <header>Reduced credit for participants in health plans of employers</header> <text>In the case of any individual who participates in a subsidized health plan (within the meaning of section 162(l)(2)) maintained by any employer of the taxpayer or of the spouse of the taxpayer (not including a cafeteria plan (as defined in section 125(d)), there shall be allowed to the taxpayer one-half of the credit that would be allowed to the taxpayer under subsection (a) (determined without regard to the participation in the health plan) if the monthly limitation were determined without the addition of the amount described in subsection (b)(3)(A)(ii).</text> </subsection><subsection id="IDA31F98154D16418B92FFEAF00689DE83"> <enum>(d)</enum> <header>Qualified health insurance</header> <text>For purposes of this section—</text> <paragraph id="ID60E79FD3515C4283A0BD32F030D9F3BE"> <enum>(1)</enum> <header>In general</header> <text>The term <term>qualified health insurance</term> means insurance which constitutes medical care as defined in section 213(d) without regard to—</text> <subparagraph id="ID737F613C28E04432BFA1971014CD9B7A"> <enum>(A)</enum> <text>paragraph (1)(C) thereof, and</text> </subparagraph><subparagraph id="IDADAC85C6627B434C81230457F8A63A44"> <enum>(B)</enum> <text>so much of paragraph (1)(D) thereof as relates to qualified long-term care insurance contracts.</text> </subparagraph></paragraph><paragraph id="IDFEBF943CCC2D49A8A303471F40E1ADD8"> <enum>(2)</enum> <header>Exclusion of certain other contracts</header> <text>Such term shall not include insurance if a substantial portion of its benefits are excepted benefits (as defined in section 9832(c)).</text> </paragraph></subsection><subsection id="ID30C42CD82F914212B7F6F0AA55A90A5E"> <enum>(e)</enum> <header>Medical savings account and health savings account contributions</header> <paragraph id="ID2809E3B0B4C74E1EADE1327F0E2C2C7A"> <enum>(1)</enum> <header>In general</header> <text>If a deduction would (but for paragraph (2)) be allowed under section 220 or 223 to the taxpayer for a payment for the taxable year to the medical savings account or health savings account of an individual, subsection (a) shall be applied by treating such payment as a payment for qualified health insurance for such individual.</text> </paragraph><paragraph id="IDA62D5760AD134A9AB02EF689C3CC0867"> <enum>(2)</enum> <header>Denial of double benefit</header> <text>No deduction shall be allowed under section 220 or 223 for that portion of the payments otherwise allowable as a deduction under section 220 or 223 for the taxable year which is equal to the amount of credit allowed for such taxable year by reason of this subsection.</text> </paragraph></subsection><subsection id="IDC2699D4755CA4F6483ED69B99F53D6E1"> <enum>(f)</enum> <header>Special rules</header> <paragraph id="ID7BF4DAE9781B4421A2C0D9E243912CDD"> <enum>(1)</enum> <header>Coordination with medical expense and high deductible health plan deductions</header> <text>The amount which would (but for this paragraph) be taken into account by the taxpayer under section 213 or 224 for the taxable year shall be reduced by the credit (if any) allowed by this section to the taxpayer for such year.</text> </paragraph><paragraph id="IDAD958DB20ABE41D58A436234971336FB"> <enum>(2)</enum> <header>Denial of credit to dependents</header> <text>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.</text> </paragraph><paragraph id="ID61DB01E29C924818BE9C27891AB88EEC"> <enum>(3)</enum> <header>Denial of double benefit</header> <text>No credit shall be allowed under subsection (a) if the credit under section 35 is allowed and no credit shall be allowed under 35 if a credit is allowed under this section 35.</text> </paragraph><paragraph id="ID7CABA822CB684813A6336B7EA91DFE8E"> <enum>(4)</enum> <header>Election not to claim credit</header> <text>This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.</text> </paragraph><paragraph id="IDEC47498E72994812875632D866ABF92C"> <enum>(5)</enum> <header>Inflation adjustment</header> <text>In the case of any taxable year beginning in a calendar year after 2005, each dollar amount contained in subsection (b)(3)(B) shall be increased by an amount equal to—</text> <subparagraph id="ID3AD7CDC2E3384CF6A62E48E3B569D8F6"> <enum>(A)</enum> <text>such dollar amount, multiplied by</text> </subparagraph><subparagraph id="ID5ED78BA7888E49E9B43748F08978AFEE"> <enum>(B)</enum> <text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting <quote>calendar year 2004</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof.</text> </subparagraph><continuation-text continuation-text-level="paragraph">Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50 ($25 in the case of the dollar amount in subsection (b)(3)(B)(iii)).</continuation-text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID78C04166ECEF48E39DAB56F9BA30E4C8"> <enum>(b)</enum> <header>Information reporting</header> <paragraph id="ID83D321D1297D48EAA65180E47B10446B"> <enum>(1)</enum> <header>In general</header> <text>Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 (relating to information concerning transactions with other persons) is amended by inserting after section 6050T the following new section:</text> <quoted-block id="ID52A1DE27201F4C348CFAD770AFA22B73"> <section id="ID84B8F47E2DEC4574B5CD793ACF0AE6BA"> <enum>6050U.</enum> <header>Returns relating to payments for qualified health insurance</header> <subsection id="ID910D411112DE4863ABC0E5961C767805"> <enum>(a)</enum> <header>In general</header> <text>Any person who, in connection with a trade or business conducted by such person, receives payments during any calendar year from any individual for coverage of such individual or any other individual under creditable health insurance, shall make the return described in subsection (b) (at such time as the Secretary may by regulations prescribe) with respect to each individual from whom such payments were received.</text> </subsection><subsection id="ID22A06022B08D402AB7F089FD409B26A0"> <enum>(b)</enum> <header>Form and manner of returns</header> <text>A return is described in this subsection if such return—</text> <paragraph id="ID6D1ADC5AD39E45D9A70ADFD3406F5C58"> <enum>(1)</enum> <text>is in such form as the Secretary may prescribe, and</text> </paragraph><paragraph id="ID86B8BB111CA44F7CABA575C34398E3AC"> <enum>(2)</enum> <text>contains—</text> <subparagraph id="ID0CD7A436451243D8B705A26492F7D006"> <enum>(A)</enum> <text>the name, address, and TIN of the individual from whom payments described in subsection (a) were received,</text> </subparagraph><subparagraph id="IDD8346D5427724B48878CB055FDA0533D"> <enum>(B)</enum> <text>the name, address, and TIN of each individual who was provided by such person with coverage under creditable health insurance by reason of such payments and the period of such coverage, and</text> </subparagraph><subparagraph id="ID640934AF380F435C9120A73BB7EA5CE8"> <enum>(C)</enum> <text>such other information as the Secretary may reasonably prescribe.</text> </subparagraph></paragraph></subsection><subsection id="IDBD25B3A8900C489D96B5B9DDCE1E401B"> <enum>(c)</enum> <header>Creditable health insurance</header> <text>For purposes of this section, the term <term>creditable health insurance</term> means qualified health insurance (as defined in section 36(c)) other than—</text> <paragraph id="ID46C19E7ADC5041C298589A26A2CB12C5"> <enum>(1)</enum> <text>insurance under a subsidized group health plan maintained by an employer, or</text> </paragraph><paragraph id="IDBD309C59E51A460DB6F79D33859E0D92"> <enum>(2)</enum> <text>to the extent provided in regulations prescribed by the Secretary, any other insurance covering an individual if no credit is allowable under section 36 with respect to such coverage.</text> </paragraph></subsection><subsection id="ID873CEAE327C34609A07E0749088B9FE9"> <enum>(d)</enum> <header>Statements to be furnished to individuals with respect to whom information is required</header> <text>Every person required to make a return under subsection (a) shall furnish to each individual whose name is required under subsection (b)(2)(A) to be set forth in such return a written statement showing—</text> <paragraph id="ID968342AD2095421AB48C7AE658823B94"> <enum>(1)</enum> <text>the name and address of the person required to make such return and the phone number of the information contact for such person,</text> </paragraph><paragraph id="IDC799B4BF3CB04AA685E74DCA02D902BC"> <enum>(2)</enum> <text>the aggregate amount of payments described in subsection (a) received by the person required to make such return from the individual to whom the statement is required to be furnished, and</text> </paragraph><paragraph id="IDD373331F123240898727E190C1519AC7"> <enum>(3)</enum> <text>the information required under subsection (b)(2)(B) with respect to such payments.</text> </paragraph><continuation-text continuation-text-level="subsection">The written statement required under the preceding sentence shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) is required to be made.</continuation-text></subsection><subsection id="ID7378388878104D9CB8D9F432FD09A6A2"> <enum>(e)</enum> <header>Returns which would be required to be made by 2 or more persons</header> <text>Except to the extent provided in regulations prescribed by the Secretary, in the case of any amount received by any person on behalf of another person, only the person first receiving such amount shall be required to make the return under subsection (a).</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="ID7D1596BAB5CD4B81BA1CF3B628F8F58E"> <enum>(2)</enum> <header>Assessable penalties</header> <subparagraph id="ID1AFEFE17F78B4A629F3A82B4535A2724"> <enum>(A)</enum> <text>Subparagraph (B) of section 6724(d)(1) of such Code (relating to definitions) is amended by redesignating clauses (xiii) through (xviii) as clauses (xiv) through (xix), respectively, and by inserting after clause (xii) the following new clause:</text> <quoted-block id="IDC9BED8A8E76A4DC4B416412EBD278F16"> <clause id="ID54C3A66B9B334873976D246D01B7D3A5"> <enum>(xiii)</enum> <text>section 6050U (relating to returns relating to payments for qualified health insurance),</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph><subparagraph id="ID42665B2003954D9FBBEF362523849B8B"> <enum>(B)</enum> <text>Paragraph (2) of section 6724(d) of such Code is amended by striking <quote>or</quote> at the end of the next to last subparagraph, by striking the period at the end of the last subparagraph and inserting <quote>, or</quote>, and by adding at the end the following new subparagraph:</text> <quoted-block id="ID9C5BB4031EC34863ABB31BA8CC378268"> <subclause id="IDE0118591917245C9ADF248382F125A27" indent="up2"> <enum>(CC)</enum> <text>section 6050U(d) (relating to returns relating to payments for qualified health insurance).</text> </subclause><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph><paragraph id="ID52AD62482D6B445B92E51440AFA5B432"> <enum>(3)</enum> <header>Clerical amendment</header> <text>The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to section 6050T the following new item:</text> <quoted-block id="IDD05D0DD1569E4EB5B6D12760A4911B7E" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 6050U. Returns relating to payments for qualified health insurance.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="ID76C6CCA3B0DC4F629675C493189BC2F4"> <enum>(c)</enum> <header>Conforming amendments</header> <paragraph id="ID095C8AF611A548A78E7B9024A984455C"> <enum>(1)</enum> <text>Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period <quote>, or from section 36 of such Code</quote>.</text> </paragraph><paragraph id="ID73514CE12C4A4FED938DF70C65B4F45A"> <enum>(2)</enum> <text>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 last item and inserting the following new items:</text> <quoted-block id="ID2B32DA9E6ED24BFBB327864812EB5CB7" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 36. Health insurance costs.</toc-entry> <toc-entry level="section">Sec. 37. Overpayments of tax.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="IDE91B4BBB2C6B4455B6B1E5594835E00A"> <enum>(d)</enum> <header>Effective date</header> <text>The amendments made by this section shall apply to taxable years beginning after December 31, 2004.</text> </subsection></section><section id="ID9425688BB26D436DA1E99C2C1E44FBBC"> <enum>102.</enum> <header>Advance payment of credit for purchasers of qualified health insurance</header> <subsection id="ID0ED5F050ABDC4DE7A55D905D1CE0B47E"> <enum>(a)</enum> <header>In general</header> <text>Chapter 77 of the Internal Revenue Code of 1986 (relating to miscellaneous provisions) is amended by adding at the end the following new section:</text> <quoted-block id="ID260C3DF11E7D4D308A9FA5954C6E864D"> <section id="ID7DD736DA23F24B6C8CCD936174BEFA58"> <enum>7529.</enum> <header>Advance payment of health insurance credit for purchasers of qualified health insurance</header> <subsection id="ID7AD6538308264195BCD14410BC851CD3"> <enum>(a)</enum> <header>General rule</header> <text>In the case of an eligible individual, the Secretary shall make payments to the provider of such individual’s qualified health insurance equal to such individual’s qualified health insurance credit advance amount with respect to such provider.</text> </subsection><subsection id="ID4F940BD9B34D4AB8A372CC7D1EC674F4"> <enum>(b)</enum> <header>Eligible individual</header> <text>For purposes of this section, the term <term>eligible individual</term> means any individual—</text> <paragraph id="ID2ABAFC68DFFF416EA03E14AEA92F7140"> <enum>(1)</enum> <text>who purchases qualified health insurance (as defined in section 36(c)), and</text> </paragraph><paragraph id="IDA9AF144E7A8449C1A991B39A0D8BD316"> <enum>(2)</enum> <text>for whom a qualified health insurance credit eligibility certificate is in effect.</text> </paragraph></subsection><subsection id="IDA85D6F93E3844C53A892E9A261EB7D41"> <enum>(c)</enum> <header>Qualified health insurance credit eligibility certificate</header> <text>For purposes of this section, a qualified health insurance credit eligibility certificate is a statement furnished by an individual to the Secretary which—</text> <paragraph id="IDC79A122683A943FA8496E4D959629332"> <enum>(1)</enum> <text>certifies that the individual will be eligible to receive the credit provided by section 36 for the taxable year,</text> </paragraph><paragraph id="ID9F3CA54679EB4606A99584F0A7258358"> <enum>(2)</enum> <text>estimates the amount of such credit for such taxable year, and</text> </paragraph><paragraph id="IDA9E97D58F3E74CBA8DFBBAAFAAC61B1C"> <enum>(3)</enum> <text>provides such other information as the Secretary may require for purposes of this section.</text> </paragraph></subsection><subsection id="ID449B2B94DC2A44ABA5204DF1067A4351"> <enum>(d)</enum> <header>Qualified health insurance credit advance amount</header> <text>For purposes of this section, the term <term>qualified health insurance credit advance amount</term> means, with respect to any provider of qualified health insurance, the Secretary’s estimate of the amount of credit allowable under section 36 to the individual for the taxable year which is attributable to the insurance provided to the individual by such provider.</text> </subsection><subsection id="IDE151B54F4074440A873CA5D74088578B"> <enum>(e)</enum> <header>Regulations</header> <text>The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations modifying recapture rules for any overpayment of the qualified health insurance credit advance amount which equals at least 2 percent of the taxpayer’s adjusted gross income for the taxable year by allowing periodic payments in lieu of a lump-sum payment for any such taxpayer whose savings and income warrant such modification.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID1DD41763302B4A6AB2922A935D180761"> <enum>(b)</enum> <header>Clerical amendment</header> <text>The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:</text> <quoted-block id="IDD00B86555F3740128868661CED3E9544" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 7529. Advance payment of health insurance credit for purchasers of qualified health insurance.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="IDF76A876957664C47B7D40EC8CBE09B42"> <enum>(c)</enum> <header>Effective date</header> <text>The amendments made by this section shall apply to taxable year beginning after the date of the enactment of this Act.</text> </subsection></section> <enum>II</enum> <header>Health savings accounts</header> <section id="ID4E3289BDB0E24987B19B3DDC9BFB5DDF"> <enum>201.</enum> <header>Deduction of premiums for high deductible health plans</header> <subsection id="ID937F52E9D15749CBB89B3D0D31EEFE56"> <enum>(a)</enum> <header>In general</header> <text>Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:</text> <quoted-block id="ID830EDE5CE5F94FFF88323F071455EF30"> <section id="IDC4DFCF266CC64390A708D5B63A361297"> <enum>224.</enum> <header>Premiums for high deductible health plans</header> <subsection id="ID9CCFF7D02841406BB75F0A812AA27394"> <enum>(a)</enum> <header>Deduction allowed</header> <text>In the case of an individual, there shall be allowed as a deduction for the taxable year the aggregate amount paid by such individual as premiums under a high deductible health plan with respect to months during such year for which such individual is an eligible individual with respect to such health plan.</text> </subsection><subsection id="ID00C629031F004C43833183828C6ED139"> <enum>(b)</enum> <header>Definitions</header> <text>For purposes of this section—</text> <paragraph id="IDA7AC8C8029884CC9A20F850F6E917618"> <enum>(1)</enum> <header>Eligible individual</header> <text>The term <term>eligible individual</term> has the meaning given such term by section 223(c)(1).</text> </paragraph><paragraph id="ID2B2D8BEEE22B434C9D27BE451E23D6BD"> <enum>(2)</enum> <header>High deductible health plan</header> <text>The term <term>high deductible health plan</term> has the meaning given such term by section 223(c)(2).</text> </paragraph></subsection><subsection id="ID517926DA070146A9A1AA34F7EFCE7C22"> <enum>(c)</enum> <header>Special rules</header> <paragraph id="ID1D87CBC3F5814C658671C55747AFB364"> <enum>(1)</enum> <header>Deduction allowable for only 1 plan</header> <text>For purposes of this section, in the case of an individual covered by more than 1 high deductible health plan for any month, the individual may only take into account amounts paid for 1 of such plans for such month.</text> </paragraph><paragraph id="IDC67337EA1AC84B4584C299302361C08B"> <enum>(2)</enum> <header>Employer provided coverage</header> <subparagraph id="IDDE431122FA524B628BF4606C07067ED9"> <enum>(A)</enum> <header>In general</header> <text>No deduction shall be allowed to an individual under subsection (a) for any amount paid for coverage under a high deductible health plan for a month if that individual participates in any coverage for such month that is excluded (in whole or in part) from the gross income of the individual or the individual’s spouse under section 106.</text> </subparagraph><subparagraph id="ID8476A3D5DC1B4257849158E0A568F364"> <enum>(B)</enum> <header>Cafeteria plans, etc</header> <text>Employer contributions to a cafeteria plan or a flexible spending or similar arrangement which are excluded from gross income under section 106 shall be treated for purposes of this section as paid by the employer.</text> </subparagraph></paragraph><paragraph id="ID2675F77ACBCC4A1183053E94A37F6044"> <enum>(3)</enum> <header>Contributions to health savings account required</header> <text>A deduction shall not be allowed under subsection (a) for a taxable year with respect to such individual if such individual is not allowed a deduction under section 223 for such taxable year.</text> </paragraph><paragraph id="ID5662D09BD44544B8B66DC567CA26B868"> <enum>(4)</enum> <header>Medical and health savings accounts</header> <text>Subsection (a) shall not apply with respect to any amount which is paid or distributed out of an Archer MSA or a health savings account which is not included in gross income under section 220(f) or 223(f), as the case may be.</text> </paragraph><paragraph id="ID028F619987AB483D86E916F2A99CC493"> <enum>(5)</enum> <header>Coordination with deduction for health insurance of self-employed individuals</header> <text>The amount taken into account by the taxpayer in computing the deduction under section 162(l) shall not be taken into account under this section.</text> </paragraph><paragraph id="ID5EB8F67BBA914780BFB61AE03051D4E9"> <enum>(6)</enum> <header>Coordination with medical expense deduction</header> <text>The amount taken into account by the taxpayer in computing the deduction under this section shall not be taken into account under section 213.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID44A0CF417B964076A5E51F6D115D9CD0"> <enum>(b)</enum> <header>Deduction allowed whether or not individual itemizes other deductions</header> <text>Section 62(a) of the Internal Revenue Code of 1986 (defining adjusted gross income) is amended by redesignating paragraph (19) as added by section 703(a) of the American Jobs Creation Act of 2004 as paragraph (20) and by inserting after paragraph (20), as so redesignated, the following new paragraph:</text> <quoted-block id="ID5CC6D75A5EB441D3936CB4AFEFC7B1E1"> <paragraph id="ID2A223C09B6174F608FD42AA087920AEE"> <enum>(21)</enum> <header>Premiums for high deductible health plans</header> <text>The deduction allowed by section 224.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID114D84142778423CBBAA82E0F26A4BD3"> <enum>(c)</enum> <header>Clerical amendment</header> <text>The table of sections for part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the last item and inserting the following new items:</text> <quoted-block id="ID3402018179D7487585124C747B616D02" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 224. Premiums for high deductible health plans.</toc-entry> <toc-entry level="section">Sec. 225. Cross reference.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID752AE37B4D7341BEAC2CE69C5AF317D1"> <enum>(d)</enum> <header>Effective date</header> <text>The amendments made by this section shall apply to taxable years beginning after December 31, 2004.</text> </subsection></section><section id="ID734A28575BC047CEB45C654880A94915"> <enum>202.</enum> <header>Credit for contributions to health savings accounts of small business employees</header> <subsection id="ID3D7C6963C08D461BA98F38EFD63A780C"> <enum>(a)</enum> <header>In general</header> <text>Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following new section:</text> <quoted-block id="ID9BF53A6C1F594C92957D1B5B2DFAECE4"> <section id="IDC4A619F46E464ADBBC85948B1667B1C3"> <enum>45J.</enum> <header>Small employer contributions to health savings accounts</header> <subsection id="ID9558A901BD6B4F01BAEB7532194DCFD0"> <enum>(a)</enum> <header>General rule</header> <text>For purposes of section 38, in the case of an eligible employer, the small employer HSA contribution credit determined under this section for any taxable year with respect to each employee who is an eligible individual (as defined in section 223(c)(1)) is an amount equal to the lesser of—</text> <paragraph id="ID9CD54A3E15354B199E10396C5024765D"> <enum>(1)</enum> <text>the amount contributed by such employer to any health savings account (as defined in section 223(d) of such employee during the taxable year, or</text> </paragraph><paragraph id="IDED4AF1D92699461F8849EE32891C7304"> <enum>(2)</enum> <text>$200 ($500, if such employee has family coverage under a high deductible health plan (as defined in section 223(c)(2)).</text> </paragraph></subsection><subsection id="IDBFD0A9142B7D48D89D931F78614BC4CA"> <enum>(b)</enum> <header>Eligible employer</header> <text>For purposes of this section, the term <term>eligible employer</term> means, with respect to any taxable year, an employer which had no more than 100 employees who received at least $5,000 of compensation from the employer for the preceding taxable year.</text> </subsection><subsection id="ID8E4C80DFD1584EC292111F167BC5B0AE"> <enum>(c)</enum> <header>Special rules</header> <text>For purposes of this section—</text> <paragraph id="ID4BD151D9843F474C83C99FD4D9F5CA55"> <enum>(1)</enum> <header>Aggregation rules</header> <text>All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be treated as one person.</text> </paragraph><paragraph id="IDD4CA625A6892448294F32EFC33CAF9E4"> <enum>(2)</enum> <header>Disallowance of deduction</header> <text>No deduction shall be allowed for that portion of contributions to any health savings accounts for the taxable year which is equal to the credit determined under subsection (a).</text> </paragraph><paragraph id="ID35CB1B0E6EAE4A7CB23679C690283037"> <enum>(3)</enum> <header>Election not to claim credit</header> <text>This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="IDE78A7811F852494BA5D863BFDA4810B7"> <enum>(b)</enum> <header>Credit allowed as part of general business credit</header> <text>Section 38(b) of the Internal Revenue Code of 1986 (defining current year business credit) is amended by striking <quote>plus</quote> at the end of paragraph (18), by striking the period at the end of paragraph (19) and inserting <quote>, plus</quote>, and by adding at the end the following new paragraph:</text> <quoted-block id="ID85E30DC2E62D4095985945B1F4C4CD6E"> <paragraph id="IDFB31A3A2F1F64C11ACB08ACC0FC75E7B"> <enum>(20)</enum> <text>in the case of an eligible employer (as defined in section 45J(b)), the small employer HSA contribution credit determined under section 45J(a).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="ID105CE31988134348A3A9CA4F40537A18"><enum>(c)</enum><header>Conforming amendments</header> <paragraph id="ID84E1AAF7552A49AF9902F81F8C75F416"> <enum>(1)</enum> <text>Subsection (c) of section 196 of the Internal Revenue Code of 1986 is amended by striking <quote>and</quote> at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting <quote>, and</quote>, and by adding at the end the following new paragraph:</text> <quoted-block id="ID55E297FFAC4F4B7284ADA988409D2E2A"> <paragraph id="ID7DCD5EF8FF8C4FCC908EA175443FA363"> <enum>(13)</enum> <text>the small employer HSA contribution credit determined under section 45J(a).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph><paragraph id="IDF0101F0738DB4C49A4EB94BDAEB8E4F0"> <enum>(2)</enum> <text>The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:</text> <quoted-block id="ID2551C23C1FC8498DBC4DD67421FD1EBE" style="USC"> <toc regeneration="no-regeneration"> <toc-entry level="section">Sec. 45J. Small employer contributions to health savings accounts.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="ID963BC99403844ECAB7B3236819CAB229"> <enum>(d)</enum> <header>Effective date</header> <text>The amendments made by this section shall apply to contributions made in taxable years beginning after December 31, 2004.</text> </subsection></section> <enum>III</enum> <header>State high risk pools</header> <section id="ID67015A81E4CD431D81212795AFA92538"> <enum>301.</enum> <header>Short title</header> <text display-inline="no-display-inline">This title may be cited as the <quote><short-title>State High Risk Pool Funding Extension Act of 2005</short-title></quote>.</text> </section><section id="IDA08EBE009D59489B847B7BC22D227984"> <enum>302.</enum> <header>Extension of funding for operation of State high risk health insurance pools</header> <text display-inline="no-display-inline">Section 2745 of the <act-name parsable-cite="PHSA">Public Health Service Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/300gg-45">42 U.S.C. 300gg–45</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Public Health Service Act" id="ID2C02510906134B889F206E4F54F5BAF2"> <section id="ID97D53B8C21B34AF48CDFEC85803BB7CE"> <enum>2745.</enum> <header>Promotion of qualified high risk pools</header> <subsection id="ID7AF4DD54CED045F4ADD33E2EF168A20F"> <enum>(a)</enum> <header>Extension of seed grants to States</header> <text>The Secretary shall provide from the funds appropriated under subsection (d)(1)(A) a grant of up to $1,000,000 to each State that has not created a qualified high risk pool as of the date of the enactment of this section for the State’s costs of creation and initial operation of such a pool.</text> </subsection><subsection id="IDC54B8E25AFCA4C6AB67D2EB179688C02"> <enum>(b)</enum> <header>Grants for operational losses</header> <paragraph id="IDAEBC5ED83CFF4886AEEB83777E7C6A4D"> <enum>(1)</enum> <header>In general</header> <text>In the case of a State that has established a qualified high risk pool that—</text> <subparagraph id="IDD5A398D87C7745D1855C89C481399503"> <enum>(A)</enum> <text>restricts premiums charged under the pool to no more than 150 percent of the premium for applicable standard risk rates;</text> </subparagraph><subparagraph id="ID4EB5CEFCCC234A88B7E1E7D15E43303E"> <enum>(B)</enum> <text>offers a choice of two or more coverage options through the pool; and</text> </subparagraph><subparagraph id="ID5D44C79DB4434B90B66034CDB329FC2D"> <enum>(C)</enum> <text>has in effect a mechanism reasonably designed to ensure continued funding of losses incurred by the State after the end of fiscal year 2005 in connection with operation of the pool;</text> </subparagraph><continuation-text continuation-text-level="paragraph">the Secretary shall provide, from the funds appropriated under subsection (d)(1)(B)(i) and allotted to the State under paragraph (2), a grant for the losses incurred by the State in connection with the operation of the pool.</continuation-text></paragraph><paragraph id="ID82AA1FB9E4734C4C8A0E6053A13B21F1"> <enum>(2)</enum> <header>Allotment</header> <text>The amounts appropriated under subsection (d)(1)(B)(i) for a fiscal year shall be made available to the States (or the entities that operate the high risk pool under applicable State law) as follows:</text> <subparagraph id="ID33B2573F4C8A4CF083E66A3A9B466851"> <enum>(A)</enum> <text>An amount equal to 50 percent of the appropriated amount for the fiscal year shall be allocated in equal amounts among each eligible State that applies for assistance under this subsection.</text> </subparagraph><subparagraph id="ID1777ACBA540847058F6DD93B30961D6D"> <enum>(B)</enum> <text>An amount equal to 25 percent of the appropriated amount for the fiscal year shall be allocated among the States so that the amount provided to a State bears the same ratio to such available amount as the number of uninsured individuals in the State bears to the total number of uninsured individuals in all States (as determined by the Secretary).</text> </subparagraph><subparagraph id="ID6363BFA9DAFD49B28AB7D30F02A46A2C"> <enum>(C)</enum> <text>An amount equal to 25 percent of the appropriated amount for the fiscal year shall be allocated among the States so that the amount provided to a State bears the same ratio to such available amount as the number of individuals enrolled in health care coverage through the qualified high risk pool of the State bears to the total number of individuals so enrolled through qualified high risk pools in all States (as determined by the Secretary).</text> </subparagraph></paragraph></subsection><subsection id="ID78D262FE52E541ABBB71BDAA01B94F65"> <enum>(c)</enum> <header>Bonus grants for supplemental consumer benefits</header> <paragraph id="ID5A96B542C0F44EBC8517F5629A195D2F"> <enum>(1)</enum> <header>In general</header> <text>In the case of a State that has established a qualified high risk pool, the Secretary shall provide, from the funds appropriated under subsection (d)(1)(B)(ii), a grant to be used to provide supplemental consumer benefits to enrollees or potential enrollees (or defined subsets of such enrollees or potential enrollees) in qualified high risk pools.</text> </paragraph><paragraph id="ID6E98DF90F7B449A38CCB279218FF4E37"> <enum>(2)</enum> <header>Benefits</header> <text>A State shall use amounts received under a grant under this subsection to provide one or more of the following benefits:</text> <subparagraph id="IDAD9F92B3FA374656A8C3084A8364C4D9"> <enum>(A)</enum> <text>Low-income premium subsidies.</text> </subparagraph><subparagraph id="IDDCC36E956DA44FB99A85720A62A43283"> <enum>(B)</enum> <text>A reduction in premium trends, actual premiums, or other cost-sharing requirements.</text> </subparagraph><subparagraph id="IDD70B6531CD5548A8970034D7B3C9D458"> <enum>(C)</enum> <text>An expansion or broadening of the pool of individuals eligible for coverage, including eliminating waiting lists, increasing enrollment caps, or providing flexibility in enrollment rules.</text> </subparagraph><subparagraph id="ID9BF2BED6E18F438FBB80A9FEAAFDE835"> <enum>(D)</enum> <text>Less stringent rules, or additional waiver authority, with respect to coverage of pre-existing conditions.</text> </subparagraph><subparagraph id="ID43B89F1A9E0944E5B9430BAC38E9FC74"> <enum>(E)</enum> <text>Increased benefits.</text> </subparagraph><subparagraph id="ID0A701E66E97D4C359C957B8389C96999"> <enum>(F)</enum> <text>The establishment of disease management programs.</text> </subparagraph></paragraph><paragraph id="ID309ADECB98BD4566A232CF69D5BD5E2B"> <enum>(3)</enum> <header>Limitation</header> <text>In allotting amounts under this subsection, the Secretary shall ensure that no State receives an amount that exceeds 10 percent of the amount appropriated for the fiscal year involved under subsection (d)(1)(B)(ii).</text> </paragraph><paragraph id="IDA8906E50160A4C5CABBEC61EBAD448BF"> <enum>(4)</enum> <header>Rule of construction</header> <text>Nothing in this subsection shall be construed to prohibit States that, on the date of enactment of the State High Risk Pool Funding Extension Act of 2004, are in the process of implementing programs to provide benefits of the type described in paragraph (2), from being eligible for a grant under this subsection.</text> </paragraph></subsection><subsection id="ID120ACC1C63734E9CAE7520D141609598"> <enum>(d)</enum> <header>Funding</header> <paragraph id="IDE6DEE08EA08045859878D93D2F798BB5"> <enum>(1)</enum> <header>In general</header> <text>Out of any money in the Treasury of the United States not otherwise appropriated, there are authorized and appropriated—</text> <subparagraph id="ID7418E5FB54FF4F07A68B0655895BAB3B"> <enum>(A)</enum> <text>$15,000,000 for the period of fiscal years 2005 and 2006 to carry out subsection (a); and</text> </subparagraph><subparagraph id="ID8932C19B05184100A4C52D5808583473"> <enum>(B)</enum> <text>$75,000,000 for each of fiscal years 2006 through 2010, of which—</text> <clause id="ID1E062A043F4441EDB2C485A44E8D3EC3"> <enum>(i)</enum> <text>two-thirds of the amount appropriated for a fiscal year shall be made available for allotments under subsection (b)(2); and</text> </clause><clause id="IDA6C699E95338433DA43A5FE402F36A99"> <enum>(ii)</enum> <text>one-third of the amount appropriated for a fiscal year shall be made available for allotments under subsection (c)(2).</text> </clause></subparagraph></paragraph><paragraph id="ID94F9652E9D8446DF823E4F4654B4124F"> <enum>(2)</enum> <header>Availability</header> <text>Funds appropriated under this subsection for a fiscal year shall remain available for obligation through the end of the following fiscal year.</text> </paragraph><paragraph id="ID7272A228EE8A4EC098DE74EA735E0196"> <enum>(3)</enum> <header>Reallotment</header> <text>If, on June 30 of each fiscal year, the Secretary determines that all amounts appropriated under paragraph (1)(B)(ii) for the fiscal year will not be allotted, such remaining amounts shall be allotted among States receiving grants under subsection (b) for the fiscal year in amounts determined pursuant to the formula under subsection (b)(2).</text> </paragraph><paragraph id="ID011B19343EB44CAE96ACF18F956413CC"> <enum>(4)</enum> <header>No entitlement</header> <text>Nothing in this section shall be construed as providing a State with an entitlement to a grant under this section.</text> </paragraph></subsection><subsection id="ID9E8A3C15F49547E7B56A6BE111205091"> <enum>(e)</enum> <header>Applications</header> <text>To be eligible for a grant under this section, a State shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require.</text> </subsection><subsection id="ID8117F0209A8C467088CDAAE865B6F714"> <enum>(f)</enum> <header>Definitions</header> <text>In this section:</text> <paragraph id="ID2333C5F50F4845F3866800D29C7BC586"> <enum>(1)</enum> <header>Qualified high risk pool</header> <subparagraph id="ID982254DB7B4B4C84B78508E90C0A746C"> <enum>(A)</enum> <header>In general</header> <text>The term <term>qualified high risk pool</term> has the meaning given such term in section 2744(c)(2), except that with respect to subparagraph (A) of such section a State may elect to provide for the enrollment of eligible individuals through—</text> <clause id="ID2F79D1A605624878BEF9850EC1B07336"> <enum>(i)</enum> <text>a combination of a qualified high risk pool and an acceptable alternative mechanism; or</text> </clause><clause id="ID1BF78F3019964586A4F6D0CAC694D695"> <enum>(ii)</enum> <text>other health insurance coverage described in subparagraph (B).</text> </clause></subparagraph><subparagraph id="IDDD5970CF5AE04D07BBF4CBE4EC476B0B"> <enum>(B)</enum> <header>Health insurance coverage</header> <text>Health insurance coverage described in this subparagraph is individual health insurance coverage—</text> <clause id="ID42C92992A340439B882A219C829955F2"> <enum>(i)</enum> <text>that meets the requirements of section 2741;</text> </clause><clause id="ID0D9B06F3C2ED47F9A6BDFBE9793FED53"> <enum>(ii)</enum> <text>that is subject to limits on the rates charged to individuals;</text> </clause><clause id="ID10819774CC0C49C0A43913DD29C83E03"> <enum>(iii)</enum> <text>that is available to all individuals eligible for health insurance coverage under this title who are not able to participate in a qualified high risk pool; and</text> </clause><clause id="ID076C72B5D5AA4CAE9A6A3045FADAD1AB"> <enum>(iv)</enum> <text>the defined rate limit of which does not exceed the limit allowed for a qualified risk pool that is otherwise eligible to receive assistance under a grant under this section.</text> </clause></subparagraph><subparagraph id="IDA0FA5640D9C7407C9AEA908FE6C6FF1A"> <enum>(C)</enum> <header>Other coverage</header> <text>In addition to coverage described in subparagraph (B), a State may provide for the offering of health insurance coverage that provides first dollar coverage, limits on cost-sharing, and comprehensive medical, hospital and surgical coverage, if the limits on rates for such coverage do not exceed the limit described in subparagraph (B)(iv) by more than 25 percentage points.</text> </subparagraph></paragraph><paragraph id="ID93FF35DF72E345BEA7E065C59AD6C14F"> <enum>(2)</enum> <header>Standard risk rate</header> <text>The term <term>standard risk rate</term> means a rate—</text> <subparagraph id="ID82F80E1B1C18411FB4D4583AC3AD941E"> <enum>(A)</enum> <text>determined under the State high risk pool by considering the premium rates charged by other health insurers offering health insurance coverage to individuals in the insurance market served;</text> </subparagraph><subparagraph id="IDED712245F4A048A38421AB2BDDBB0064"> <enum>(B)</enum> <text>that is established using reasonable actuarial techniques; and</text> </subparagraph><subparagraph id="ID327DFE7F2A224BF0BD8385B06C82F22E"> <enum>(C)</enum> <text>that reflects anticipated claims experience and expenses for the coverage involved.</text> </subparagraph></paragraph><paragraph id="ID5C0A7C62B9E0459BACC8C265AC0BF702"> <enum>(3)</enum> <header>State</header> <text>The term <term>State</term> means any of the 50 States and the District of Columbia.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section> <enum>IV</enum> <header>Voluntary choice cooperatives</header> <section id="IDB6D582ABB00C4AB588A6BBD448280F27"> <enum>401.</enum> <header>Grants for the establishment and operation of cooperatives</header> <text display-inline="no-display-inline">Subpart 1 of part B of title XXVII of the <act-name parsable-cite="PHSA">Public Health Service Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/300gg-41">42 U.S.C. 300gg–41</external-xref> et seq.) is amended by adding at the end the following:</text> <quoted-block act-name="Public Health Service Act" display-inline="no-display-inline" id="ID4BDF01B4F85244308C453E88282704CB" style="OLC"> <section id="ID0C2D509DD48742FEBBFC62099D931940"> <enum>2746.</enum> <header>Grants for the establishment and operation of cooperatives</header> <subsection id="ID65554FB96F63496790A35C1E10C429A2"> <enum>(a)</enum> <header>In general</header> <text>The Secretary may award grants to States for the establishment and operation of health insurance purchasing cooperatives that meet the requirements of subsection (c).</text> </subsection><subsection id="IDB1CB948D43D74876B17A9FE65E62262A"> <enum>(b)</enum> <header>Use of funds</header> <text>Amounts provided under a grant under subsection (a) shall be used—</text> <paragraph id="ID65D70C4A37DD4D6F80218110BC095CE8"> <enum>(1)</enum> <text>for the establishment and operation of health insurance purchasing cooperatives that meet the requirements of this section;</text> </paragraph><paragraph id="IDFE7032F54C324854922203B610DE303E"> <enum>(2)</enum> <text>for the support and training of the professional staff of the cooperative;</text> </paragraph><paragraph id="IDBB0714737CA749169150B77CD641E995"> <enum>(3)</enum> <text>in the case of a State that is not operating a health insurance purchasing cooperative on the date on which an application for a grant under this section is submitted by the State, for the conduct of a feasibility study relating to the proposed activities of the cooperative; and</text> </paragraph><paragraph id="IDCE514C01126A4EB0A1169C2CFFEBB753"> <enum>(4)</enum> <text>for other activities determined appropriate by the Secretary; and</text> </paragraph></subsection><subsection id="ID735C16E73F8F49D1B06905E9B45A4A23"> <enum>(c)</enum> <header>Requirements of cooperatives</header> <text>To be eligible to receive a grant under subsection (a), a State shall demonstrate to the Secretary that the purchasing cooperative to be established or operated under the grant—</text> <paragraph id="IDADD3DF3A982540A4A0FDC835D23D2553"> <enum>(1)</enum> <text>has a membership consisting solely of at least two eligible employers;</text> </paragraph><paragraph id="IDC7CAC324383D45DB85CB025198CC20D0"> <enum>(2)</enum> <text>is a nonprofit entity certified under State law;</text> </paragraph><paragraph id="ID4F0564CD7A1A4B228A89E675AAB7B054"> <enum>(3)</enum> <text>is organized as an independent health insurance purchasing entity with a commission that meets requirements similar to the requirements imposed with respect to the administration of State high risk pools that receive funds under section 2745;</text> </paragraph><paragraph id="ID1129D908C7A9483995410A5C94817BB8"> <enum>(4)</enum> <text>is wholly owned and administered by the members of the cooperative;</text> </paragraph><paragraph id="ID897CDC9ADB124892BCF2D00187053E68"> <enum>(5)</enum> <text>accepts all eligible employers within the area served by the cooperative as members if such employers request such membership;</text> </paragraph><paragraph id="ID07110895C7E645188B51273D04A405F5"> <enum>(6)</enum> <text>provides assistance to the members in pooling the health insurance purchasing power of such members;</text> </paragraph><paragraph id="ID9CA5246EC6EC4E498F7CB537994E0CF7"> <enum>(7)</enum> <text>provides for the collection and distribution of data, and the conduct of other activities, to improve the quality of health care decisionmaking; and</text> </paragraph><paragraph id="ID3DB39F79F2314BA9B2490F705290899C"> <enum>(8)</enum> <text>meets such other requirements as the Secretary determines appropriate.</text> </paragraph></subsection><subsection id="ID96C5F98B0D044A5395E735624488FD82"> <enum>(d)</enum> <header>Duties of cooperatives</header> <text>Each health insurance purchasing cooperative that receive funds under this section shall—</text> <paragraph id="ID9E6316ADD71B49358D97E2645A0C02BF"> <enum>(1)</enum> <text>enter into agreements with insurers offering health insurance coverage that meets the guidelines developed under subsection (e);</text> </paragraph><paragraph id="IDC9D27B26400943E2998385CCBCE54B71"> <enum>(2)</enum> <text>enter into agreements with member eligible employers to provide insurance through the cooperative to the employees of such employers;</text> </paragraph><paragraph id="ID434007CAE95045DDBC07796397626602"> <enum>(3)</enum> <text>enroll only eligible employees and their families;</text> </paragraph><paragraph id="ID7302289BC9274714A3540ADEE96D6461"> <enum>(4)</enum> <text>provide enrollee information to the State; and</text> </paragraph><paragraph id="IDB4BCF6E5A7894B11A6EE49FBD980A42A"> <enum>(5)</enum> <text>carry out other functions provided for by the Secretary.</text> </paragraph></subsection><subsection id="IDB3D91F57151C4B0FAAE963146778ED5E"> <enum>(e)</enum> <header>Qualifying health insurance coverage</header> <text>For purposes of this section, qualifying health insurance coverage shall be coverage that is—</text> <paragraph id="IDD67D0C3820004268A4AC0370518B8403"> <enum>(1)</enum> <text>fully insured;</text> </paragraph><paragraph id="IDEAACC73DF226498EB663C5FC7F9A6534"> <enum>(2)</enum> <text>approved by the department of insurance for the State in which the coverage is offered; and</text> </paragraph><paragraph id="IDCB9A8B351D3746A496BB3449DEAAB742"> <enum>(3)</enum> <text>creditable coverage as described in section 2701(c)(1).</text> </paragraph></subsection><subsection id="ID5FEC7E58C4BC4E5ABA79E4A328C952F4"> <enum>(f)</enum> <header>Eligible employers</header> <text>In this section, the term <term>eligible employer</term> means an employer—</text> <paragraph id="ID1F907E72C75E44F0927FAC9AE930698D"> <enum>(1)</enum> <text>that employs 100 or fewer employees (as determined in accordance with section 2791(e)(6)); or</text> </paragraph><paragraph id="IDBBB6CAE0BD064641B8028E4D83B18911"> <enum>(2)</enum> <text>regardless of size, that self insures.</text> </paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4D4E943AE9284A74A211853C2C913435"><enum>(g)</enum><header>Authorization of appropriations</header><text>There is authorized to be appropriated, such sums as may be necessary to carry out this section.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section>