[House Report 114-784]
[From the U.S. Government Publishing Office]
114th Congress { } Report
HOUSE OF REPRESENTATIVES
2d Session { } 114-784
======================================================================
CO-OP CONSUMER PROTECTION ACT OF 2016
_______
September 22, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 954]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 954) to amend the Internal Revenue Code of 1986 to
exempt from the individual mandate certain individuals who had
coverage under a terminated qualified health plan funded
through the Consumer Operated and Oriented Plan (CO-OP)
program, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................2
A. Purpose and Summary................................. 2
B. Background and Need for Legislation................. 2
C. Legislative History................................. 3
II. EXPLANATION OF THE BILL...........................................3
A. Exemption from Individual Mandate for Certain
Individuals Who Had Coverage Under a Terminated
Qualified Health Plan Funded through the Consumer
Operated and Oriented Plan (CO-OP) Program (sec. 2
of the bill and sec. 5000A of the Code)............ 3
III.VOTES OF THE COMMITTEE............................................6
IV. BUDGET EFFECTS OF THE BILL........................................6
A. Committee Estimate of Budgetary Effects............. 6
Fiscal Years....................................... 6
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 6
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 7
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........8
A. Committee Oversight Findings and Recommendations.... 8
B. Statement of General Performance Goals and
Objectives......................................... 8
C. Information Relating to Unfunded Mandates........... 8
D. Applicability of House Rule XXI 5(b)................ 8
E. Tax Complexity Analysis............................. 9
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 9
G. Duplication of Federal Programs..................... 9
H. Disclosure of Directed Rule Makings................. 9
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............10
A. Text of Existing Law Amended or Repealed by the
Bill, as Reported.................................. 10
B. Changes in Existing Law Proposed by the Bill, as
Reported........................................... 16
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``CO-OP Consumer Protection Act of
2016''.
SEC. 2. EXEMPTION FROM INDIVIDUAL MANDATE FOR CERTAIN INDIVIDUALS WHO
HAD COVERAGE UNDER A TERMINATED HEALTH PLAN FUNDED
THROUGH THE CONSUMER OPERATED AND ORIENTED PLAN
(CO-OP) PROGRAM.
(a) In General.--Section 5000A(e) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(6) Certain individuals previously enrolled in health plans
funded through the consumer operated and oriented plan (CO-OP)
program.--Any applicable individual for any month if--
``(A) such individual was enrolled in minimum
essential coverage offered by a qualified nonprofit
health insurance issuer (as defined in subsection (c)
of section 1322 of the Patient Protection and
Affordable Care Act (42 U.S.C. 18042)) receiving funds
with respect to such coverage through the Consumer
Operated and Oriented Plan program established under
such section,
``(B) during the calendar year which includes such
month, such issuer terminated such coverage in the area
in which the individual resides, and
``(C) such month ends after the date on which such
coverage was so terminated.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
with respect to months beginning after December 31, 2013.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 954, as reported by the Committee on Ways
and Means, temporarily exempts individuals, whose coverage
under a plan offered by a qualified nonprofit health insurance
issuer receiving funds through the Consumer Operated and
Oriented Plan (CO-OP) program was terminated or otherwise
discontinued, from the Patient Protection and Affordable Care
Act (ACA)'s individual mandate.
B. Background and Need for Legislation
Section 1332 of the ACA created the CO-OP program. The
individual mandate was added to Section 5000(A) of the Internal
Revenue Code (IRC) by Section 1501 of the ACA. According to the
statute, beginning in 2014, all ``applicable individuals'' must
have a ``minimum essential coverage'' for themselves and their
dependents or pay a tax penalty. The law currently provides for
several exemptions from the individual mandate, including for
``hardship,'' as determined by the Secretary of Health and
Human Services (Section 5000A(e)(5) of the IRC) and short
coverage gaps (Section 5000A(e)(4) of the IRC).
The CO-OP program was created in an attempt to artificially
create competition in the health care market. In January 2015,
23 CO-OPs covered enrollees in 25 states. To date, most of
these have failed and the Administration is attempting to prop
up the six CO-OPs that remain.
Not only is the CO-OP program a significant financial
drain, but its failure has had a negative effect on many
Americans who were enrolled through one of these insurers.
Cancelled plans can cause great disruptions--and extra,
burdensome financial expenses--in people's lives. For instance,
many who might have fully paid their deductible for their
terminated CO-OP plan could risk having to start over from a
cost-sharing perspective with a new plan. The Committee
believes that relief from the individual mandate is necessary
for those Americans who tried to comply with the law only to
watch the CO-OPs collapse around them during a coverage period.
C. Legislative History
Background
H.R. 954 was introduced on February 12, 2015, and was
referred to the Committee on Ways and Means.
Committee action
The Committee on Ways and Means marked up H.R. 954, the CO-
OP Consumer Protection Act of 2016, on September 8, 2016, and
ordered the bill, as amended, favorably reported (with a quorum
being present).
Committee hearings
The issues surrounding the termination or discontinuation
of certain CO-OPs were discussed at a Ways and Means
Subcommittee on Health hearing on November 3, 2015, and a
Member Day Hearing on May 17, 2016.
II. EXPLANATION OF THE BILL
A. Exemption from Individual Mandate for Certain Individuals Who Had
Coverage Under a Terminated Qualified Health Plan Funded Through the
Consumer Operated and Oriented Plan (CO-OP) Program (sec. 2 of the bill
and sec. 5000A of the Code)
PRESENT LAW
Requirement for individuals to have health coverage
In general
Individuals are required to be covered by a health plan
that provides minimum essential coverage or pay a tax for
failure to maintain coverage.\1\ The tax is imposed for any
month that an individual does not have minimum essential
coverage unless the individual qualifies for an exemption for
the month as described below.\2\
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\1\Section 5000A which was added to the Code by section 1501 of the
Patient Protection and Affordable Care Act (``PPACA''), Pub. L. No 111-
148, enacted March 23, 2010, as amended by section 10106 of PPACA and
1002 of the Health Care and Education Reconciliation Act of 2010
(``HCERA''), Pub. L. No. 111-152, enacted March 30, 2010. PPACA and
HCERA are collectively referred to as the Affordable Care Act
(``ACA''). Section 5000A is effective for taxable years ending after
December 31, 2013.
\2\In the case of a taxpayer's dependent under section 152, the
taxpayer is liable for any tax for failure to maintain the required
coverage with respect to the dependent.
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Minimum essential coverage includes government-sponsored
programs, eligible employer-sponsored plans, plans in the
individual insurance market, grandfathered group health plans
and grandfathered health insurance coverage, and other coverage
as recognized by the Secretary of Health and Human Services
(``HHS'') in coordination with the Secretary of the
Treasury.\3\ Minimum essential coverage includes a health plan
offered through an American Health Benefit Exchange, referred
to as a qualified health plan.
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\3\Minimum essential coverage does not include coverage that
consists of certain excepted benefits as defined in section 2791(c)(1)-
(4) of the Public Health Service Act (42 U.S.C. sec. 300gg-91(c)(1-4)).
A parallel definition of excepted benefits is provided in section
9832(c)(1)-(4).
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Tax on failure to maintain minimum essential coverage
The tax for failure to maintain minimum essential coverage
for any calendar month is one-twelfth of the tax calculated as
an annual amount. The annual amount is equal to the greater of
(1) a flat dollar amount and (2) an excess income amount, as
described below, except that the total annual amount may not
exceed the national average annual premium for bronze level
qualified health plans offered through American Health Benefit
Exchanges that year for the taxpayer's family size.
The flat dollar amount is the lesser of (1) the sum of the
individual annual dollar amounts for the members of the
taxpayer's family and (2) 300 percent of the adult individual
dollar amount. The individual adult annual dollar amount is
phased in over the first three years as follows: $95 for 2014;
$325 for 2015; and $695 for 2016.\4\ For an individual who has
not attained age 18, the individual annual dollar amount is one
half of the adult amount.
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\4\For years after 2016, the $695 amount is indexed to the consumer
price index for all urban consumers, referred to as ``CPI-U,'' rounded
to the next lowest multiple of $50.
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The excess income amount is a specified percentage of the
excess of the taxpayer's household income for the taxable year
over the threshold amount of income requiring the taxpayer to
file an income tax return.\5\ The specified percentage of
income is phased in as follows: one percent for 2014; two
percent for 2015; and 2.5 percent for 2016 and after.
---------------------------------------------------------------------------
\5\Sec. 6012(a).
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Exemptions
Exemptions from the requirement to maintain minimum
essential coverage are provided for the following: (1) an
individual for whom coverage is unaffordable because the
required contribution exceeds eight percent of household
income, (2) an individual with household income below the
income tax return filing threshold, (3) a member of an Indian
tribe, (4) a member of one of certain recognized religious
sects or a health sharing ministry, (5) an individual with a
coverage gap for a continuous period of less than three months,
and (6) an individual who is determined by the Secretary of HHS
to have suffered a hardship with respect to the capability to
obtain coverage.
Health plans under the CO-OP program
The CO-OP program was established to foster the creation of
qualified nonprofit health insurance issuers to offer qualified
health plans in the individual and small group markets in the
States in which the issuers are licensed to offer such
plans.\6\ A qualified nonprofit health insurance issuer is an
organization--
---------------------------------------------------------------------------
\6\Sec. 1322 of PPACA. Under section 501(c)(29), a health insurer
that receives a grant or loan under the CO-OP program generally
qualifies for exemption from Federal income tax for periods during
which the organization is in compliance with the requirements of the
CO-OP program and with the terms of any such grant or loan agreement to
which the organization is a party.
---------------------------------------------------------------------------
That is organized as a nonprofit, member
corporation under State law,
Substantially all of the activities of which
consist of the issuance of qualified health plans in
the individual and small group markets in each State in
which it is licensed to issue such plans and in which
health insurance market reforms have been implemented,
That meets other applicable State law
requirements for issuers of qualified health plans,
That was not (nor was a related entity or a
predecessor of either) a health insurance issuer as of
July 16, 2009 and is not sponsored by a State or local
government, any political subdivision thereof, or any
instrumentality of such government or political
subdivision,
That meets certain governance requirements,
and
That uses profits to lower premiums, improve
benefits, or for other programs intended to improve the
quality of health care delivered to its members.
In the last few years, some qualified nonprofit health
insurance issuers under the CO-OP program have discontinued
offering health plans providing minimum essential coverage,
including qualified health plans.
REASONS FOR CHANGE
The midyear cancellation of health plans under the CO-OP
program causes individuals enrolled in those plans to lose
their health insurance coverage. In some circumstances,
obtaining new coverage for the remainder of the year may
present difficulties not addressed by the present-law
exemptions from the requirement to maintain minimum essential
coverage. The Committee wishes to ensure that individuals in
those circumstances do not face a tax penalty in addition to
losing their health coverage. The bill therefore provides an
exemption from the coverage requirement for the remainder of
the year for individuals in those circumstances.
EXPLANATION OF PROVISION
Under the provision, in the case of an individual who was
enrolled in minimum essential coverage that was offered by a
qualified nonprofit health insurance issuer under the CO-OP
program and that was terminated during a calendar year in the
area in which the individual resides, an exemption from the
requirement to maintain minimum essential coverage applies for
any month that is included in that calendar year and that ends
after the date on which the coverage was terminated. Thus, the
exemption applies as of the first month for which the coverage
was terminated and the remaining months in the calendar year.
EFFECTIVE DATE
The provision applies to months beginning after December
31, 2013.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 954, the ``CO-OP Consumer Protection Act
of 2016,'' on September 8, 2016.
The bill, H.R. 954, as amended, was ordered favorably
reported to the House of Representatives by a voice vote (with
a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 954, as
reported.
The bill, as reported, is estimated to have the following
effect on Federal fiscal year budget receipts for the period
2017-2026:
FISCAL YEARS
[Millions of dollars] [1]
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2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-21 2017-26
--------------------------------------------------------------------------------------------------------------------------------------------------------
-3 -1 [2] [2] [2] [2] [2] [2] [2] [2] -4 -4
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NOTE: Details do not add to totals due to rounding.
[1] Estimate includes a reduction of less than $500,000 in outlays.
[2] Loss of less than $500,000.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that the revenue-reducing provisions
of the bill do not involve increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 15, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 954, the CO-OP
Consumer Protection Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Peter
Huether.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
H.R. 954--CO-OP Consumer Protection Act of 2016
H.R. 954 would provide an exemption from the individual
health insurance mandate for certain individuals who had
coverage under a health plan that was issued under the Consumer
Operated and Oriented Plan (CO-OP) program and later
terminated. The CO-OP program was established by the Affordable
Care Act and included federal loans to foster the creation of
nonprofit plans that would offer health insurance to
individuals and small employers. Under current law, individuals
are required to maintain minimum essential coverage under a
health insurance plan or pay a penalty for any month that they
do not maintain such coverage, unless they qualify for one of
the existing exemptions.
H.R. 954 would exempt individuals from the mandate and from
resulting penalties (which are recorded as revenues in the
federal budget) under certain circumstances. Individuals
enrolled in a health plan issued through the CO-OP program
would be exempt from the individual mandate for the remaining
months in a calendar year if that plan was terminated partway
through the year. The changes from enacting H.R. 954 would be
effective retroactively, starting on January 1, 2014.
The staff of the Joint Committee on Taxation (JCT)
estimates that the legislation would reduce revenues by $4
million over the 2016-2026 period. JCT also estimates that H.R.
954 would reduce direct spending by less than $500,000 over the
2016-2026 period, reflecting very small changes in subsidies
for insurance purchased through health insurance marketplaces
established by the Affordable Care Act. JCT therefore estimates
that the legislation would increase federal budget deficits by
$4 million over the 2016-2026 period.
The Statutory Pay-As-You Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting
revenues and direct spending. The net changes in revenues and
outlays that are subject to those pay-as-you-go procedures are
shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 954, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON SEPTEMBER 8, 2016.
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By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-2021 2016-2026
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NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Effects...................... 0 3 1 0 0 0 0 0 0 0 0 4 4
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Source: Staff of the Joint Committee on Taxation.
Note: The net increase in the deficit includes insignificant reductions in outlays.
JCT and CBO estimate that enacting the bill would not
increase net direct spending in any of the four consecutive 10-
year periods beginning in 2027, and would increase on-budget
deficits over those periods by very small amounts.
JCT has determined that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Peter Huether.
The estimate was approved by John McClelland, Assistant
Director for Tax Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's review of the provisions of H.R. 954 that the
Committee concluded that it is appropriate to report the bill,
as amended, favorably to the House of Representatives with the
recommendation that the bill do pass.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code of 1986 and has widespread applicability
to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle D--Miscellaneous Excise Taxes
* * * * * * *
CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE
* * * * * * *
SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.
(a) Requirement to Maintain Minimum Essential Coverage.--An
applicable individual shall for each month beginning after 2013
ensure that the individual, and any dependent of the individual
who is an applicable individual, is covered under minimum
essential coverage for such month.
(b) Shared Responsibility Payment.--
(1) In general.--If a taxpayer who is an applicable
individual, or an applicable individual for whom the
taxpayer is liable under paragraph (3), fails to meet
the requirement of subsection (a) for 1 or more months,
then, except as provided in subsection (e), there is
hereby imposed on the taxpayer a penalty with respect
to such failures in the amount determined under
subsection (c).
(2) Inclusion with return.--Any penalty imposed by
this section with respect to any month shall be
included with a taxpayer's return under chapter 1 for
the taxable year which includes such month.
(3) Payment of penalty.--If an individual with
respect to whom a penalty is imposed by this section
for any month--
(A) is a dependent (as defined in section
152) of another taxpayer for the other
taxpayer's taxable year including such month,
such other taxpayer shall be liable for such
penalty, or
(B) files a joint return for the taxable year
including such month, such individual and the
spouse of such individual shall be jointly
liable for such penalty.
(c) Amount of Penalty.--
(1) In general.--The amount of the penalty imposed by
this section on any taxpayer for any taxable year with
respect to failures described in subsection (b)(1)
shall be equal to the lesser of--
(A) the sum of the monthly penalty amounts
determined under paragraph (2) for months in
the taxable year during which 1 or more such
failures occurred, or
(B) an amount equal to the national average
premium for qualified health plans which have a
bronze level of coverage, provide coverage for
the applicable family size involved, and are
offered through Exchanges for plan years
beginning in the calendar year with or within
which the taxable year ends.
(2) Monthly penalty amounts.--For purposes of
paragraph (1)(A), the monthly penalty amount with
respect to any taxpayer for any month during which any
failure described in subsection (b)(1) occurred is an
amount equal to \1/12\ of the greater of the following
amounts:
(A) Flat dollar amount.--An amount equal to
the lesser of--
(i) the sum of the applicable dollar
amounts for all individuals with
respect to whom such failure occurred
during such month, or
(ii) 300 percent of the applicable
dollar amount (determined without
regard to paragraph (3)(C)) for the
calendar year with or within which the
taxable year ends.
(B) Percentage of income.--An amount equal to
the following percentage of the excess of the
taxpayer's household income for the taxable
year over the amount of gross income specified
in section 6012(a)(1) with respect to the
taxpayer for the taxable year:
(i) 1.0 percent for taxable years
beginning in 2014.
(ii) 2.0 percent for taxable years
beginning in 2015.
(iii) 2.5 percent for taxable years
beginning after 2015.
(3) Applicable dollar amount.--For purposes of
paragraph (1)--
(A) In general.--Except as provided in
subparagraphs (B) and (C), the applicable
dollar amount is $695.
(B) Phase in.--The applicable dollar amount
is $95 for 2014 and $325 for 2015.
(C) Special rule for individuals under age
18.--If an applicable individual has not
attained the age of 18 as of the beginning of a
month, the applicable dollar amount with
respect to such individual for the month shall
be equal to one-half of the applicable dollar
amount for the calendar year in which the month
occurs.
(D) Indexing of amount.--In the case of any
calendar year beginning after 2016, the
applicable dollar amount shall be equal to
$695, increased by an amount equal to--
(i) $695, multiplied by
(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year, determined by
substituting ``calendar year 2015'' for
``calendar year 1992'' in subparagraph
(B) thereof.
If the amount of any increase under clause (i)
is not a multiple of $50, such increase shall
be rounded to the next lowest multiple of $50.
(4) Terms relating to income and families.--For
purposes of this section--
(A) Family size.--The family size involved
with respect to any taxpayer shall be equal to
the number of individuals for whom the taxpayer
is allowed a deduction under section 151
(relating to allowance of deduction for
personal exemptions) for the taxable year.
(B) Household income.--The term ``household
income'' means, with respect to any taxpayer
for any taxable year, an amount equal to the
sum of--
(i) the modified adjusted gross
income of the taxpayer, plus
(ii) the aggregate modified adjusted
gross incomes of all other individuals
who--
(I) were taken into account
in determining the taxpayer's
family size under paragraph
(1), and
(II) were required to file a
return of tax imposed by
section 1 for the taxable year.
(C) Modified adjusted gross income.--The term
``modified adjusted gross income'' means
adjusted gross income increased by--
(i) any amount excluded from gross
income under section 911, and
(ii) any amount of interest received
or accrued by the taxpayer during the
taxable year which is exempt from tax.
(d) Applicable Individual.--For purposes of this section--
(1) In general.--The term ``applicable individual''
means, with respect to any month, an individual other
than an individual described in paragraph (2), (3), or
(4).
(2) Religious exemptions.--
(A) Religious conscience exemption.--Such
term shall not include any individual for any
month if such individual has in effect an
exemption under section 1311(d)(4)(H) of the
Patient Protection and Affordable Care Act
which certifies that such individual is--
(i) a member of a recognized
religious sect or division thereof
which is described in section
1402(g)(1), and
(ii) an adherent of established
tenets or teachings of such sect or
division as described in such section.
(B) Health care sharing ministry.--
(i) In general.--Such term shall not
include any individual for any month if
such individual is a member of a health
care sharing ministry for the month.
(ii) Health care sharing ministry.--
The term ``health care sharing
ministry'' means an organization--
(I) which is described in
section 501(c)(3) and is exempt
from taxation under section
501(a),
(II) members of which share a
common set of ethical or
religious beliefs and share
medical expenses among members
in accordance with those
beliefs and without regard to
the State in which a member
resides or is employed,
(III) members of which retain
membership even after they
develop a medical condition,
(IV) which (or a predecessor
of which) has been in existence
at all times since December 31,
1999, and medical expenses of
its members have been shared
continuously and without
interruption since at least
December 31, 1999, and
(V) which conducts an annual
audit which is performed by an
independent certified public
accounting firm in accordance
with generally accepted
accounting principles and which
is made available to the public
upon request.
(3) Individuals not lawfully present.--Such term
shall not include an individual for any month if for
the month the individual is not a citizen or national
of the United States or an alien lawfully present in
the United States.
(4) Incarcerated individuals.--Such term shall not
include an individual for any month if for the month
the individual is incarcerated, other than
incarceration pending the disposition of charges.
(e) Exemptions.--No penalty shall be imposed under subsection
(a) with respect to--
(1) Individuals who cannot afford coverage.--
(A) In general.--Any applicable individual
for any month if the applicable individual's
required contribution (determined on an annual
basis) for coverage for the month exceeds 8
percent of such individual's household income
for the taxable year described in section
1412(b)(1)(B) of the Patient Protection and
Affordable Care Act. For purposes of applying
this subparagraph, the taxpayer's household
income shall be increased by any exclusion from
gross income for any portion of the required
contribution made through a salary reduction
arrangement.
(B) Required contribution.--For purposes of
this paragraph, the term ``required
contribution'' means--
(i) in the case of an individual
eligible to purchase minimum essential
coverage consisting of coverage through
an eligible-employer-sponsored plan,
the portion of the annual premium which
would be paid by the individual
(without regard to whether paid through
salary reduction or otherwise) for
self-only coverage, or
(ii) in the case of an individual
eligible only to purchase minimum
essential coverage described in
subsection (f)(1)(C), the annual
premium for the lowest cost bronze plan
available in the individual market
through the Exchange in the State in
the rating area in which the individual
resides (without regard to whether the
individual purchased a qualified health
plan through the Exchange), reduced by
the amount of the credit allowable
under section 36B for the taxable year
(determined as if the individual was
covered by a qualified health plan
offered through the Exchange for the
entire taxable year).
(C) Special rules for individuals related to
employees.--For purposes of subparagraph
(B)(i), if an applicable individual is eligible
for minimum essential coverage through an
employer by reason of a relationship to an
employee, the determination under subparagraph
(A) shall be made by reference to required
contribution of the employee.
(D) Indexing.--In the case of plan years
beginning in any calendar year after 2014,
subparagraph (A) shall be applied by
substituting for ``8 percent'' the percentage
the Secretary of Health and Human Services
determines reflects the excess of the rate of
premium growth between the preceding calendar
year and 2013 over the rate of income growth
for such period.
(2) Taxpayers with income below filing threshold.--
Any applicable individual for any month during a
calendar year if the individual's household income for
the taxable year described in section 1412(b)(1)(B) of
the Patient Protection and Affordable Care Act is the
amount of gross income specified in section 6012(a)(1)
with respect to the taxpayer.
(3) Members of Indian tribes.--Any applicable
individual for any month during which the individual is
a member of an Indian tribe (as defined in section
45A(c)(6)).
(4) Months during short coverage gaps.--
(A) In general.--Any month the last day of
which occurred during a period in which the
applicable individual was not covered by
minimum essential coverage for a continuous
period of less than 3 months.
(B) Special rules.--For purposes of applying
this paragraph--
(i) the length of a continuous period
shall be determined without regard to
the calendar years in which months in
such period occur,
(ii) if a continuous period is
greater than the period allowed under
subparagraph (A), no exception shall be
provided under this paragraph for any
month in the period, and
(iii) if there is more than 1
continuous period described in
subparagraph (A) covering months in a
calendar year, the exception provided
by this paragraph shall only apply to
months in the first of such periods.
The Secretary shall prescribe rules for the
collection of the penalty imposed by this
section in cases where continuous periods
include months in more than 1 taxable year.
(5) Hardships.--Any applicable individual who for any
month is determined by the Secretary of Health and
Human Services under section 1311(d)(4)(H) to have
suffered a hardship with respect to the capability to
obtain coverage under a qualified health plan.
(f) Minimum Essential Coverage.--For purposes of this
section--
(1) In general.--The term ``minimum essential
coverage'' means any of the following:
(A) Government sponsored programs.--Coverage
under--
(i) the Medicare program under part A
of title XVIII of the Social Security
Act,
(ii) the Medicaid program under title
XIX of the Social Security Act,
(iii) the CHIP program under title
XXI of the Social Security Act,
(iv) medical coverage under chapter
55 of title 10, United States Code,
including coverage under the TRICARE
program;
(v) a health care program under
chapter 17 or 18 of title 38, United
States Code, as determined by the
Secretary of Veterans Affairs, in
coordination with the Secretary of
Health and Human Services and the
Secretary,
(vi) a health plan under section
2504(e) of title 22, United States Code
(relating to Peace Corps volunteers);
or
(vii) the Nonappropriated Fund Health
Benefits Program of the Department of
Defense, established under section 349
of the National Defense Authorization
Act for Fiscal Year 1995 (Public Law
103-337; 10 U.S.C. 1587 note).
(B) Employer-sponsored plan.--Coverage under
an eligible employer-sponsored plan.
(C) Plans in the individual market.--Coverage
under a health plan offered in the individual
market within a State.
(D) Grandfathered health plan.--Coverage
under a grandfathered health plan.
(E) Other coverage.--Such other health
benefits coverage, such as a State health
benefits risk pool, as the Secretary of Health
and Human Services, in coordination with the
Secretary, recognizes for purposes of this
subsection.
(2) Eligible employer-sponsored plan.--The term
``eligible employer-sponsored plan'' means, with
respect to any employee, a group health plan or group
health insurance coverage offered by an employer to the
employee which is--
(A) a governmental plan (within the meaning
of section 2791(d)(8) of the Public Health
Service Act), or
(B) any other plan or coverage offered in the
small or large group market within a State.
Such term shall include a grandfathered health plan
described in paragraph (1)(D) offered in a group
market.
(3) Excepted benefits not treated as minimum
essential coverage.--The term ``minimum essential
coverage'' shall not include health insurance coverage
which consists of coverage of excepted benefits--
(A) described in paragraph (1) of subsection
(c) of section 2791 of the Public Health
Service Act; or
(B) described in paragraph (2), (3), or (4)
of such subsection if the benefits are provided
under a separate policy, certificate, or
contract of insurance.
(4) Individuals residing outside United States or
residents of territories.--Any applicable individual
shall be treated as having minimum essential coverage
for any month--
(A) if such month occurs during any period
described in subparagraph (A) or (B) of section
911(d)(1) which is applicable to the
individual, or
(B) if such individual is a bona fide
resident of any possession of the United States
(as determined under section 937(a)) for such
month.
(5) Insurance-related terms.--Any term used in this
section which is also used in title I of the Patient
Protection and Affordable Care Act shall have the same
meaning as when used in such title.
(g) Administration and Procedure.--
(1) In general.--The penalty provided by this section
shall be paid upon notice and demand by the Secretary,
and except as provided in paragraph (2), shall be
assessed and collected in the same manner as an
assessable penalty under subchapter B of chapter 68.
(2) Special rules.--Notwithstanding any other
provision of law--
(A) Waiver of criminal penalties.--In the
case of any failure by a taxpayer to timely pay
any penalty imposed by this section, such
taxpayer shall not be subject to any criminal
prosecution or penalty with respect to such
failure.
(B) Limitations on liens and levies.--The
Secretary shall not--
(i) file notice of lien with respect
to any property of a taxpayer by reason
of any failure to pay the penalty
imposed by this section, or
(ii) levy on any such property with
respect to such failure.
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
made by the bill, as reported, are shown as follows (new matter
is printed in italics and existing law in which no change is
proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle D--Miscellaneous Excise Taxes
* * * * * * *
CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE
* * * * * * *
SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.
(a) Requirement to Maintain Minimum Essential Coverage.--An
applicable individual shall for each month beginning after 2013
ensure that the individual, and any dependent of the individual
who is an applicable individual, is covered under minimum
essential coverage for such month.
(b) Shared Responsibility Payment.--
(1) In general.--If a taxpayer who is an applicable
individual, or an applicable individual for whom the
taxpayer is liable under paragraph (3), fails to meet
the requirement of subsection (a) for 1 or more months,
then, except as provided in subsection (e), there is
hereby imposed on the taxpayer a penalty with respect
to such failures in the amount determined under
subsection (c).
(2) Inclusion with return.--Any penalty imposed by
this section with respect to any month shall be
included with a taxpayer's return under chapter 1 for
the taxable year which includes such month.
(3) Payment of penalty.--If an individual with
respect to whom a penalty is imposed by this section
for any month--
(A) is a dependent (as defined in section
152) of another taxpayer for the other
taxpayer's taxable year including such month,
such other taxpayer shall be liable for such
penalty, or
(B) files a joint return for the taxable year
including such month, such individual and the
spouse of such individual shall be jointly
liable for such penalty.
(c) Amount of Penalty.--
(1) In general.--The amount of the penalty imposed by
this section on any taxpayer for any taxable year with
respect to failures described in subsection (b)(1)
shall be equal to the lesser of--
(A) the sum of the monthly penalty amounts
determined under paragraph (2) for months in
the taxable year during which 1 or more such
failures occurred, or
(B) an amount equal to the national average
premium for qualified health plans which have a
bronze level of coverage, provide coverage for
the applicable family size involved, and are
offered through Exchanges for plan years
beginning in the calendar year with or within
which the taxable year ends.
(2) Monthly penalty amounts.--For purposes of
paragraph (1)(A), the monthly penalty amount with
respect to any taxpayer for any month during which any
failure described in subsection (b)(1) occurred is an
amount equal to \1/12\ of the greater of the following
amounts:
(A) Flat dollar amount.--An amount equal to
the lesser of--
(i) the sum of the applicable dollar
amounts for all individuals with
respect to whom such failure occurred
during such month, or
(ii) 300 percent of the applicable
dollar amount (determined without
regard to paragraph (3)(C)) for the
calendar year with or within which the
taxable year ends.
(B) Percentage of income.--An amount equal to
the following percentage of the excess of the
taxpayer's household income for the taxable
year over the amount of gross income specified
in section 6012(a)(1) with respect to the
taxpayer for the taxable year:
(i) 1.0 percent for taxable years
beginning in 2014.
(ii) 2.0 percent for taxable years
beginning in 2015.
(iii) 2.5 percent for taxable years
beginning after 2015.
(3) Applicable dollar amount.--For purposes of
paragraph (1)--
(A) In general.--Except as provided in
subparagraphs (B) and (C), the applicable
dollar amount is $695.
(B) Phase in.--The applicable dollar amount
is $95 for 2014 and $325 for 2015.
(C) Special rule for individuals under age
18.--If an applicable individual has not
attained the age of 18 as of the beginning of a
month, the applicable dollar amount with
respect to such individual for the month shall
be equal to one-half of the applicable dollar
amount for the calendar year in which the month
occurs.
(D) Indexing of amount.--In the case of any
calendar year beginning after 2016, the
applicable dollar amount shall be equal to
$695, increased by an amount equal to--
(i) $695, multiplied by
(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year, determined by
substituting ``calendar year 2015'' for
``calendar year 1992'' in subparagraph
(B) thereof.
If the amount of any increase under clause (i)
is not a multiple of $50, such increase shall
be rounded to the next lowest multiple of $50.
(4) Terms relating to income and families.--For
purposes of this section--
(A) Family size.--The family size involved
with respect to any taxpayer shall be equal to
the number of individuals for whom the taxpayer
is allowed a deduction under section 151
(relating to allowance of deduction for
personal exemptions) for the taxable year.
(B) Household income.--The term ``household
income'' means, with respect to any taxpayer
for any taxable year, an amount equal to the
sum of--
(i) the modified adjusted gross
income of the taxpayer, plus
(ii) the aggregate modified adjusted
gross incomes of all other individuals
who--
(I) were taken into account
in determining the taxpayer's
family size under paragraph
(1), and
(II) were required to file a
return of tax imposed by
section 1 for the taxable year.
(C) Modified adjusted gross income.--The term
``modified adjusted gross income'' means
adjusted gross income increased by--
(i) any amount excluded from gross
income under section 911, and
(ii) any amount of interest received
or accrued by the taxpayer during the
taxable year which is exempt from tax.
(d) Applicable Individual.--For purposes of this section--
(1) In general.--The term ``applicable individual''
means, with respect to any month, an individual other
than an individual described in paragraph (2), (3), or
(4).
(2) Religious exemptions.--
(A) Religious conscience exemption.--Such
term shall not include any individual for any
month if such individual has in effect an
exemption under section 1311(d)(4)(H) of the
Patient Protection and Affordable Care Act
which certifies that such individual is--
(i) a member of a recognized
religious sect or division thereof
which is described in section
1402(g)(1), and
(ii) an adherent of established
tenets or teachings of such sect or
division as described in such section.
(B) Health care sharing ministry.--
(i) In general.--Such term shall not
include any individual for any month if
such individual is a member of a health
care sharing ministry for the month.
(ii) Health care sharing ministry.--
The term ``health care sharing
ministry'' means an organization--
(I) which is described in
section 501(c)(3) and is exempt
from taxation under section
501(a),
(II) members of which share a
common set of ethical or
religious beliefs and share
medical expenses among members
in accordance with those
beliefs and without regard to
the State in which a member
resides or is employed,
(III) members of which retain
membership even after they
develop a medical condition,
(IV) which (or a predecessor
of which) has been in existence
at all times since December 31,
1999, and medical expenses of
its members have been shared
continuously and without
interruption since at least
December 31, 1999, and
(V) which conducts an annual
audit which is performed by an
independent certified public
accounting firm in accordance
with generally accepted
accounting principles and which
is made available to the public
upon request.
(3) Individuals not lawfully present.--Such term
shall not include an individual for any month if for
the month the individual is not a citizen or national
of the United States or an alien lawfully present in
the United States.
(4) Incarcerated individuals.--Such term shall not
include an individual for any month if for the month
the individual is incarcerated, other than
incarceration pending the disposition of charges.
(e) Exemptions.--No penalty shall be imposed under subsection
(a) with respect to--
(1) Individuals who cannot afford coverage.--
(A) In general.--Any applicable individual
for any month if the applicable individual's
required contribution (determined on an annual
basis) for coverage for the month exceeds 8
percent of such individual's household income
for the taxable year described in section
1412(b)(1)(B) of the Patient Protection and
Affordable Care Act. For purposes of applying
this subparagraph, the taxpayer's household
income shall be increased by any exclusion from
gross income for any portion of the required
contribution made through a salary reduction
arrangement.
(B) Required contribution.--For purposes of
this paragraph, the term ``required
contribution'' means--
(i) in the case of an individual
eligible to purchase minimum essential
coverage consisting of coverage through
an eligible-employer-sponsored plan,
the portion of the annual premium which
would be paid by the individual
(without regard to whether paid through
salary reduction or otherwise) for
self-only coverage, or
(ii) in the case of an individual
eligible only to purchase minimum
essential coverage described in
subsection (f)(1)(C), the annual
premium for the lowest cost bronze plan
available in the individual market
through the Exchange in the State in
the rating area in which the individual
resides (without regard to whether the
individual purchased a qualified health
plan through the Exchange), reduced by
the amount of the credit allowable
under section 36B for the taxable year
(determined as if the individual was
covered by a qualified health plan
offered through the Exchange for the
entire taxable year).
(C) Special rules for individuals related to
employees.--For purposes of subparagraph
(B)(i), if an applicable individual is eligible
for minimum essential coverage through an
employer by reason of a relationship to an
employee, the determination under subparagraph
(A) shall be made by reference to required
contribution of the employee.
(D) Indexing.--In the case of plan years
beginning in any calendar year after 2014,
subparagraph (A) shall be applied by
substituting for ``8 percent'' the percentage
the Secretary of Health and Human Services
determines reflects the excess of the rate of
premium growth between the preceding calendar
year and 2013 over the rate of income growth
for such period.
(2) Taxpayers with income below filing threshold.--
Any applicable individual for any month during a
calendar year if the individual's household income for
the taxable year described in section 1412(b)(1)(B) of
the Patient Protection and Affordable Care Act is the
amount of gross income specified in section 6012(a)(1)
with respect to the taxpayer.
(3) Members of Indian tribes.--Any applicable
individual for any month during which the individual is
a member of an Indian tribe (as defined in section
45A(c)(6)).
(4) Months during short coverage gaps.--
(A) In general.--Any month the last day of
which occurred during a period in which the
applicable individual was not covered by
minimum essential coverage for a continuous
period of less than 3 months.
(B) Special rules.--For purposes of applying
this paragraph--
(i) the length of a continuous period
shall be determined without regard to
the calendar years in which months in
such period occur,
(ii) if a continuous period is
greater than the period allowed under
subparagraph (A), no exception shall be
provided under this paragraph for any
month in the period, and
(iii) if there is more than 1
continuous period described in
subparagraph (A) covering months in a
calendar year, the exception provided
by this paragraph shall only apply to
months in the first of such periods.
The Secretary shall prescribe rules for the
collection of the penalty imposed by this
section in cases where continuous periods
include months in more than 1 taxable year.
(5) Hardships.--Any applicable individual who for any
month is determined by the Secretary of Health and
Human Services under section 1311(d)(4)(H) to have
suffered a hardship with respect to the capability to
obtain coverage under a qualified health plan.
(6) Certain individuals previously enrolled in health
plans funded through the consumer operated and oriented
plan (CO-OP) program.--Any applicable individual for
any month if--
(A) such individual was enrolled in minimum
essential coverage offered by a qualified
nonprofit health insurance issuer (as defined
in subsection (c) of section 1322 of the
Patient Protection and Affordable Care Act (42
U.S.C. 18042)) receiving funds with respect to
such coverage through the Consumer Operated and
Oriented Plan program established under such
section,
(B) during the calendar year which includes
such month, such issuer terminated such
coverage in the area in which the individual
resides, and
(C) such month ends after the date on which
such coverage was so terminated.
(f) Minimum Essential Coverage.--For purposes of this
section--
(1) In general.--The term ``minimum essential
coverage'' means any of the following:
(A) Government sponsored programs.--Coverage
under--
(i) the Medicare program under part A
of title XVIII of the Social Security
Act,
(ii) the Medicaid program under title
XIX of the Social Security Act,
(iii) the CHIP program under title
XXI of the Social Security Act,
(iv) medical coverage under chapter
55 of title 10, United States Code,
including coverage under the TRICARE
program;
(v) a health care program under
chapter 17 or 18 of title 38, United
States Code, as determined by the
Secretary of Veterans Affairs, in
coordination with the Secretary of
Health and Human Services and the
Secretary,
(vi) a health plan under section
2504(e) of title 22, United States Code
(relating to Peace Corps volunteers);
or
(vii) the Nonappropriated Fund Health
Benefits Program of the Department of
Defense, established under section 349
of the National Defense Authorization
Act for Fiscal Year 1995 (Public Law
103-337; 10 U.S.C. 1587 note).
(B) Employer-sponsored plan.--Coverage under
an eligible employer-sponsored plan.
(C) Plans in the individual market.--Coverage
under a health plan offered in the individual
market within a State.
(D) Grandfathered health plan.--Coverage
under a grandfathered health plan.
(E) Other coverage.--Such other health
benefits coverage, such as a State health
benefits risk pool, as the Secretary of Health
and Human Services, in coordination with the
Secretary, recognizes for purposes of this
subsection.
(2) Eligible employer-sponsored plan.--The term
``eligible employer-sponsored plan'' means, with
respect to any employee, a group health plan or group
health insurance coverage offered by an employer to the
employee which is--
(A) a governmental plan (within the meaning
of section 2791(d)(8) of the Public Health
Service Act), or
(B) any other plan or coverage offered in the
small or large group market within a State.
Such term shall include a grandfathered health plan
described in paragraph (1)(D) offered in a group
market.
(3) Excepted benefits not treated as minimum
essential coverage.--The term ``minimum essential
coverage'' shall not include health insurance coverage
which consists of coverage of excepted benefits--
(A) described in paragraph (1) of subsection
(c) of section 2791 of the Public Health
Service Act; or
(B) described in paragraph (2), (3), or (4)
of such subsection if the benefits are provided
under a separate policy, certificate, or
contract of insurance.
(4) Individuals residing outside United States or
residents of territories.--Any applicable individual
shall be treated as having minimum essential coverage
for any month--
(A) if such month occurs during any period
described in subparagraph (A) or (B) of section
911(d)(1) which is applicable to the
individual, or
(B) if such individual is a bona fide
resident of any possession of the United States
(as determined under section 937(a)) for such
month.
(5) Insurance-related terms.--Any term used in this
section which is also used in title I of the Patient
Protection and Affordable Care Act shall have the same
meaning as when used in such title.
(g) Administration and Procedure.--
(1) In general.--The penalty provided by this section
shall be paid upon notice and demand by the Secretary,
and except as provided in paragraph (2), shall be
assessed and collected in the same manner as an
assessable penalty under subchapter B of chapter 68.
(2) Special rules.--Notwithstanding any other
provision of law--
(A) Waiver of criminal penalties.--In the
case of any failure by a taxpayer to timely pay
any penalty imposed by this section, such
taxpayer shall not be subject to any criminal
prosecution or penalty with respect to such
failure.
(B) Limitations on liens and levies.--The
Secretary shall not--
(i) file notice of lien with respect
to any property of a taxpayer by reason
of any failure to pay the penalty
imposed by this section, or
(ii) levy on any such property with
respect to such failure.
* * * * * * *
[all]