[House Report 115-160]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-160
======================================================================
BROADER OPTIONS FOR AMERICANS ACT
_______
June 2, 2017.--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
together with
DISSENTING VIEWS
[To accompany H.R. 2579]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 2579) to amend the Internal Revenue Code of 1986 to
allow the premium tax credit with respect to unsubsidized COBRA
continuation coverage, 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...........................................3
A. Purpose and Summary................................. 3
B. Background and Need for Legislation................. 3
C. Legislative History................................. 3
II. EXPLANATION OF THE BILL..........................................4
A. Premium Tax Credit Allowed with Respect to
Unsubsidized COBRA Continuation Coverage........... 4
III. VOTES OF THE COMMITTEE...........................................7
IV. BUDGET EFFECTS OF THE BILL.......................................8
A. Committee Estimate of Budgetary Effects............. 8
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 8
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 8
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......9
A. Committee Oversight Findings and Recommendations.... 9
B. Statement of General Performance Goals and
Objectives......................................... 9
C. Information Relating to Unfunded Mandates........... 9
D. Applicability of House Rule XXI 5(b)................ 10
E. Tax Complexity Analysis............................. 10
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 10
G. Duplication of Federal Programs..................... 10
H. Disclosure of Directed Rule Makings................. 10
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........11
VII. DISSENTING VIEWS................................................26
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 ``Broader Options for Americans Act''.
SEC. 2. PREMIUM TAX CREDIT ALLOWED WITH RESPECT TO UNSUBSIDIZED COBRA
CONTINUATION COVERAGE.
(a) In General.--Section 36B(f) of the Internal Revenue Code of 1986
is amended--
(1) by inserting after ``in section 9832(b))'' the following:
``offered in the individual health insurance market within a
State (within the meaning of section 5000A(f)(1)(C)), or any
unsubsidized COBRA continuation coverage,'', and
(2) by striking paragraph (1) and by redesignating paragraphs
(2), (3), (4), and (5) as paragraphs (1), (2), (3), and (4),
respectively.
(b) Certification of Unsubsidized COBRA Continuation Coverage.--
Section 36B(g) of such Code is amended by redesignating paragraph (9)
as paragraph (10) and by inserting after paragraph (8) the following
new paragraph:
``(9) Special rule for unsubsidized cobra continuation
coverage.--In the case of unsubsidized COBRA continuation
coverage--
``(A) subsection (d)(1) shall be applied by
substituting `COBRA continuation coverage which is
certified by the plan administrator (as defined in
section 414(g)) of the group health plan' for `health
insurance coverage which is certified by the State in
which such insurance is offered', and
``(B) the requirements of paragraph (8) shall be
treated as satisfied if the certification meets such
requirements as the Secretary may provide.''.
(c) Unsubsidized COBRA Continuation Coverage.--Section 36B of such
Code is amended by adding at the end the following new subsection:
``(h) Unsubsidized COBRA Continuation Coverage.--For purposes of this
section--
``(1) In general.--The term `unsubsidized COBRA continuation
coverage' means COBRA continuation coverage the payment of
applicable premiums (as defined in section 4980B(f)(4)) for
which is solely the obligation of the taxpayer.
``(2) COBRA continuation coverage.--The term `COBRA
continuation coverage' means continuation coverage provided--
``(A) pursuant to part 6 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974
(other than under sections 602(5) and 609), title XXII
of the Public Health Service Act, section 4980B (other
than subsection (f)(1) thereof insofar as it relates to
pediatric vaccines), or section 8905a of title 5,
United States Code,
``(B) under a State law or program that provides
coverage comparable to coverage described in
subparagraph (A), or
``(C) under a group health plan that is a church plan
(as defined in section 414(e)) and is comparable to
coverage provided pursuant to section 4980B.
Such term shall not include coverage under a health flexible
spending arrangement.''.
(d) Conforming Amendment.--
(1) Section 36B(d)(2)(A) is amended by inserting ``COBRA continuation
coverage or'' after ``other than''.
(2) Section 36B(g)(6) of such Code is amended by striking
``subsection (f)(5)'' and inserting ``subsection (f)(4)''.
(e) Amendment of Section 36B as Amended by American Health Care Act
of 2017.--Whenever in this section an amendment is expressed in terms
of an amendment to section 36B of the Internal Revenue Code of 1986,
the reference shall be considered to be made to such section as amended
by the American Health Care Act of 2017 and in effect for months
beginning after December 31, 2019.
(f) Effective Date.--The amendments made by this section are
contingent upon the enactment of the American Health Care Act of 2017
and shall apply (if at all) to months beginning after December 31,
2019, in taxable years ending after such date.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 2579, as reported by the Committee on Ways
and Means, amends section 214 of H.R. 1628, the American Health
Care Act of 2017, as passed by the House of Representatives on
May 4, 2017, which provides a tax credit under the Internal
Revenue Code (``Code'')\1\ for the purchase of health insurance
in the individual market, so that the credit is available also
with respect to unsubsidized COBRA continuation coverage under
an employer-sponsored health plan.
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\1\All section references herein are to the Internal Revenue Code
of 1986, as amended, unless otherwise stated.
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B. Background and Need for Legislation
Under section 214 of the American Health Care Act of 2017,
effective for months beginning after December 31, 2019, in
taxable years ending after that date, individuals who purchase
health insurance in a State individual insurance market may
receive a refundable tax credit. Under the rules for COBRA
continuation coverage, an individual may continue to receive
coverage under an employer-sponsored health plan after an event
that would otherwise end coverage, such as a termination of
employment. Although employers generally subsidize the cost of
health coverage for active employees, employer subsidies
generally are not provided to individuals receiving COBRA
continuation coverage. Instead, the individual must pay the
full cost of the COBRA coverage. The bill amends the American
Health Care Act of 2017 to allow such an individual to receive
the refundable tax credit with respect to unsubsidized COBRA
continuation coverage.
On March 8, 2017, in fulfillment of the reconciliation
instructions included in section 2002 of the Concurrent
Resolution on the Budget for Fiscal Year 2017 (S. Con. Res. 3),
the Committee marked up Budget Reconciliation Legislative
Recommendations Relating to Repeal and Replace of Health-
Related Tax Policy. This submission allowed eligible
individuals to receive the refundable tax credit with respect
to unsubsidized COBRA continuation coverage. However, that
language was later removed at the Committee on Rules in order
to comply with Senate guidance regarding the Reconciliation
process.
C. Legislative History
Background
H.R. 2579 was introduced on May 19, 2017, and was referred
to the Committee on Ways and Means.
Committee action
The Committee on Ways and Means marked up H.R. 2579, the
Broader Options for Americans Act, on May 24, 2017, and ordered
the bill, as amended, favorably reported (with a quorum being
present).
Committee hearings
Since the 112th Congress, the Committee on Ways and Means
and its subcommittees have held a number of hearings on health
reform that explored various parts of the health system and
informed policy contained in the American Health Care Act.
These hearings include:
March 5, 2013--Hearing on Tax-Related
Provisions in the President's Health Care Law
December 4, 2013--Hearing on the Challenges
of the Affordable Care Act
March 14, 2016--Hearing on the Tax Treatment
of Health Care
May 17, 2016--Member Day Hearing on Tax-
Related Proposals to Improve Health Care
II. EXPLANATION OF THE BILL
A. Premium Tax Credit Allowed With Respect to Unsubsidized COBRA
Continuation Coverage
PRESENT LAW
Premium assistance credit
A refundable tax credit (``premium assistance credit'') is
provided for eligible individuals and families to subsidize the
purchase of health insurance plans through an American Health
Benefit Exchange (``Exchange''), referred to as ``qualified
health plans.''\2\ In general, advance payments with respect to
the premium assistance credit are made during the year directly
to the insurer.\3\ However, eligible individuals may choose to
pay their total health insurance premiums without advance
payments and claim the credit at the end of the taxable year.
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\2\Sec. 36B, effective for taxable years ending after December 31,
2013. Under the Affordable Care Act, an American Health Benefit
Exchange is a source through which individuals can purchase health
insurance coverage. As used herein, the Affordable Care Act (or
``ACA'') refers to the combination of the Patient Protection and
Affordable Care Act (``PPACA''), Pub. L. No. 111-148, and the
Healthcare and Education Reconciliation Act of 2010 (``HCERA''), Pub.
L. No. 111-152. Qualified health plan is defined in PPACA section 1301.
\3\PPACA sections 1411-1412 provide rules relating to eligibility
for and receipt of advance payments.
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The premium assistance credit is generally available for
individuals (single or joint filers) with household incomes
between 100 and 400 percent of the Federal poverty level
(``FPL'') for the family size involved.\4\ Household income is
defined as the sum of: (1) the individual's modified adjusted
gross income, plus (2) the aggregate modified adjusted gross
incomes of all other individuals taken into account in
determining the individual's family size (but only if the other
individuals are required to file a tax return for the taxable
year). Modified adjusted gross income is defined as adjusted
gross income increased by: (1) any amount excluded from gross
income for citizens or residents living abroad,\5\ (2) any tax-
exempt interest received or accrued during the tax year, and
(3) the portion of the individual's social security benefits
not included in gross income.\6\ To be eligible for the premium
assistance credit, individuals who are married must file a
joint return. Individuals who are listed as dependents on a
return are not eligible for the premium assistance credit.
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\4\Federal poverty level refers to the most recently published
poverty guidelines determined by the Secretary of Health and Human
Services. Levels for 2017 and previous years are available at https://
aspe.hhs.gov/prior-hhs-poverty-guidelines-and-federal-register-
references.
\5\Sec. 911.
\6\Under section 86, only a portion of an individual's social
security benefits are included in gross income.
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COBRA continuation coverage requirements
Employer-sponsored health plans (referred to as ``group
health plans''\7\) generally are required to offer an employee,
spouse or dependent child covered by the plan the opportunity
to continue coverage under the plan for a specified period of
time after the occurrence of certain events that otherwise
would have terminated the coverage (``qualifying events'').\8\
These continuation coverage requirements are often referred to
as ``COBRA continuation coverage'' or ``COBRA''
requirements.\9\ The premium charged an individual for COBRA
continuation coverage cannot exceed 102 percent of the
``applicable premium,'' that is, it cannot exceed 102 percent
of the cost to the plan of providing coverage to a similarly
situated individual who has not experienced a qualifying event.
In the case of a failure to comply with the COBRA continuation
coverage requirements under the Code, an excise tax may apply
to the employer maintaining the group health plan or, in the
case of a multiemployer group health plan, to the plan.
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\7\A group health plan may include a health flexible spending
arrangement, under which medical care expenses of an employee (and
family members, if applicable) that are not covered by insurance may be
paid or reimbursed.
\8\Sec. 4980B. Section 4980B(d) provides exceptions for plans
maintained by employers with fewer than 20 employees, plans of
governmental employers, and church plans.
\9\The COBRA requirements were originally enacted as part of the
Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No. 99-
272.
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COBRA continuation requirements generally apply also under
the Employee Retirement Income Security Act of 1974 (``ERISA'')
to group health plans covering employees of private employers,
other than church plans, and under the Public Health Service
Act (``PHSA'') to group health plans covering State or local
government employees. Similar requirements (referred to as
``temporary continuation coverage'' or ``TCC'') apply with
respect to coverage under the Federal Employees Health Benefit
Program (``FEHBP'').\10\ In addition, some State laws apply
similar continuation coverage requirements with respect to
employer-sponsored health plans. In some cases, church plans
provide for similar continuation coverage, regardless of
whether legally required.
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\10\5 U.S.C. sec. 8905a.
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Responsibility for the administration of an employee
benefit plan, including a group health plan, generally lies
with the plan administrator. Plan administrator is defined as
the person specifically designated as plan administrator by the
terms of the plan, or, in the absence of a designation, (1) in
the case of a plan maintained by a single employer, the
employer, (2) in the case of a plan maintained by two or more
employers or jointly by one or more employers and one or more
employee organizations, the association, committee, joint board
of trustees, or other similar group of representatives of the
parties who maintained the plan, or (3) in any other case, the
person prescribed by regulations.\11\
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\11\Sec. 414(g). In some cases, a plan sponsor or plan
administrator may contract for administrative services by a separate
service provider, often referred to as a third-party administrator or
``TPA.'' However, a TPA does not necessarily assume the legal status of
plan administrator.
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THE AMERICAN HEALTH CARE ACT OF 2017
The American Health Care Act of 2017, as passed by the
House of Representatives on May 4, 2017 (the ``AHCA''), amends
various health-related provisions of the Code.\12\ Effective
for months beginning after December 31, 2019, in taxable years
ending after that date, the AHCA replaces the present-law
premium assistance credit with a new credit and provides a new
definition of ``qualified health plan'' to which the new credit
applies.\13\ Under the AHCA, qualified health plan means health
insurance coverage\14\ that is offered in the individual health
insurance market within a State and that meets certain other
requirements.\15\ In order for an individual to be eligible for
the new credit, the health insurance coverage must be certified
by the State in which the insurance is offered as meeting the
qualified health plan requirements.\16\ A State certification
will not be taken into account for this purpose unless the
certification is made available to the public and meets such
other requirements as the Secretary of the Treasury
(``Secretary'') may provide.\17\
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\12\H.R. 1628, as passed by the House of Representatives on May 4,
2017.
\13\AHCA section 214. AHCA sections 201 and 202 amend the present-
law premium assistance credit for periods before the new credit becomes
effective.
\14\Health insurance coverage is defined in section 9832(b) and
means benefits consisting of medical care (provided directly, through
insurance or reimbursement, or otherwise) under any hospital or medical
service policy or certificate, hospital or medical service plan
contract, or health maintenance organization contract offered by a
health insurance issuer. Health insurance issuer means an insurance
company, insurance service, or insurance organization (including a
health maintenance organization) that is licensed to engage in the
business of insurance in a State and which is subject to State law
regulating insurance. A group health plan is not a health insurance
issuer.
\15\Section 36B(f) as amended by AHCA section 214.
\16\Section 36B(d)(1) as amended by AHCA section 214.
\17\Section 36B(g)(8) as amended by AHCA section 214.
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REASONS FOR CHANGE
COBRA continuation coverage provides a transition period
during which an individual can continue, under an employer's
health plan, to receive the same coverage and care from the
same providers, rather than immediately having to research and
enroll in coverage available from another source. However,
individuals enrolled in COBRA coverage generally do not receive
an employer subsidy for the cost of the coverage and must
instead pay the entire cost themselves. Such cost may make it
difficult for the individual to afford COBRA continuation
coverage. The Committee therefore wishes to facilitate the
purchase of COBRA continuation coverage by expanding the AHCA
credit to apply with respect to unsubsidized COBRA coverage.
EXPLANATION OF PROVISION
The provision amends the definition of qualified health
plan under the provision of the AHCA relating to the new
premium assistance credit to include unsubsidized COBRA
continuation coverage. For this purpose, COBRA continuation
coverage generally means continuation coverage provided under
the Code, ERISA, the PHSA, or the FEHBP. It also includes
coverage under a State law or program that provides comparable
continuation coverage and continuation coverage under a church
plan that is comparable to COBRA coverage. It does not include
coverage under a health flexible spending arrangement.
Unsubsidized COBRA continuation coverage means COBRA
continuation coverage, the payment of the applicable premiums
for which is solely the obligation of the taxpayer. In the case
of COBRA continuation coverage, the plan administrator of the
group health plan must certify that the coverage meets the
qualified health plan requirements, and the certification must
meet requirements provided by the Secretary.
EFFECTIVE DATE
The provision is contingent on enactment of the AHCA and
will apply (if at all) to months beginning after December 31,
2019, in taxable years ending after that date.
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. 2579, the ``Broader Options for Americans
Act,'' on May 24, 2017.
The legislation was ordered favorably transmitted to the
House of Representatives as amended by a roll call vote of 23
yeas and 15 nays (with a quorum being present). The vote was as
follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady...................... X ........ ......... Mr. Neal.......... ........ X ........
Mr. Johnson.................... ........ ........ ......... Mr. Levin......... ........ X ........
Mr. Nunes...................... X ........ ......... Mr. Lewis......... ........ X ........
Mr. Tiberi..................... X ........ ......... Mr. Doggett....... ........ X ........
Mr. Reichert................... X ........ ......... Mr. Thompson...... ........ X ........
Mr. Roskam..................... X ........ ......... Mr. Larson........ ........ X ........
Mr. Buchanan................... X ........ ......... Mr. Blumenauer.... ........ X ........
Mr. Smith (NE)................. X ........ ......... Mr. Kind.......... X ........ ........
Ms. Jenkins.................... X ........ ......... Mr. Pascrell...... ........ X ........
Mr. Paulsen.................... X ........ ......... Mr. Crowley....... ........ X ........
Mr. Marchant................... X ........ ......... Mr. Davis......... ........ X ........
Ms. Black...................... ........ ........ ......... Ms. Sanchez....... ........ X ........
Mr. Reed....................... X ........ ......... Mr. Higgins....... ........ X ........
Mr. Kelly...................... X ........ ......... Ms. Sewell........ ........ X ........
Mr. Renacci.................... X ........ ......... Ms. DelBene....... ........ X ........
Mr. Meehan..................... X ........ ......... Ms. Chu........... ........ X ........
Ms. Noem....................... X ........ .........
Mr. Holding.................... X ........ .........
Mr. Smith (MO)................. X ........ .........
Mr. Rice....................... X ........ .........
Mr. Schweikert................. X ........ .........
Ms. Walorski................... X ........ .........
Mr. Curbelo.................... X ........ .........
Mr. Bishop..................... X ........ .........
----------------------------------------------------------------------------------------------------------------
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. 2579, as
reported.
The bill, as reported, is estimated to have no effect on
Federal fiscal year budget receipts for fiscal years 2017-2027.
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 provisions of the
bill do not increase or decrease 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, June 1, 2017.
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. 2579, the Broader
Options for Americans Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark Booth.
Sincerely,
Keith Hall, Director.
Enclosure.
H.R. 2579--Broader Options for Americans Act
H.R. 2579 would amend certain health-related provisions of
the Internal Revenue Code, contingent upon enactment of the
American Health Care Act of 2017 (AHCA). Under current law,
employment-based health plans are generally required to offer
employees and their families the option to continue coverage,
without any subsidy from the employer, for a period of time
following certain events that would have terminated the
coverage, such as the employee no longer working for the
employer. Under AHCA, the premium assistance tax credit allowed
under current law would be replaced by a new credit and a new
definition of qualified health plans to which the new credit
would apply. H.R. 2579 would amend provisions of AHCA to
include unsubsidized continuation coverage under the new
definition of qualified health plans, allowing people covered
by such a plan to receive the new credits.
Because the effects of the bill would be contingent upon
enactment of subsequent legislation, the staff of the Joint
Committee on Taxation estimates that the bill would in
isolation have no effect on revenues or direct spending
relative to current law; therefore pay-as-you-go procedures do
not apply. However, if the American Health Care Act of 2017 was
enacted prior to this legislation, then relative to the new law
the enactment of this bill could affect revenues or direct
spending and, as a result, subsequent estimates of the effects
of this legislation could change.
CBO and JCT estimate that enacting the bill would not
increase on-budget deficits or net direct spending by more than
$5 billion in any of the four 10-year periods beginning in
2028.
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 Mark Booth. 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
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated into
the description portions of this report.
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(c)(5) of rule XIII of the Rules
of the House of Representatives, 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 section 6104 of
title 31, United States Code.
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (115th Congress),
the following statement is made concerning directed rule
makings: The Committee advises 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
In compliance with clause 3(e) 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 (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and 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) 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 (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle A--Income Taxes
* * * * * * *
CHAPTER 1--NORMAL TAXES AND SURTAXES
* * * * * * *
Subchapter A--Determination of Tax Liability
* * * * * * *
PART IV--CREDITS AGAINST TAX
* * * * * * *
Subpart C--Refundable Credits
* * * * * * *
[The following shows current law section 36B of the Internal
Revenue Code of 1986:]
SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN.
(a) In General.--In the case of an applicable taxpayer,
there shall be allowed as a credit against the tax imposed by
this subtitle for any taxable year an amount equal to the
premium assistance credit amount of the taxpayer for the
taxable year.
(b) Premium Assistance Credit Amount.--For purposes of this
section--
(1) In general.--The term ``premium assistance
credit amount'' means, with respect to any taxable
year, the sum of the premium assistance amounts
determined under paragraph (2) with respect to all
coverage months of the taxpayer occurring during the
taxable year.
(2) Premium assistance amount.--The premium
assistance amount determined under this subsection with
respect to any coverage month is the amount equal to
the lesser of--
(A) the monthly premiums for such month for
1 or more qualified health plans offered in the
individual market within a State which cover
the taxpayer, the taxpayer's spouse, or any
dependent (as defined in section 152) of the
taxpayer and which were enrolled in through an
Exchange established by the State under 1311 of
the Patient Protection and Affordable Care Act,
or
(B) the excess (if any) of--
(i) the adjusted monthly premium for
such month for the applicable second
lowest cost silver plan with respect to
the taxpayer, over
(ii) an amount equal to 1/12 of the
product of the applicable percentage
and the taxpayer's household income for
the taxable year.
(3) Other terms and rules relating to premium
assistance amounts.--For purposes of paragraph (2)--
(A) Applicable percentage.--
(i) In general.--Except as provided
in clause (ii), the applicable
percentage for any taxable year shall
be the percentage such that the
applicable percentage for any taxpayer
whose household income is within an
income tier specified in the following
table shall increase, on a sliding
scale in a linear manner, from the
initial premium percentage to the final
premium percentage specified in such
table for such income tier:
------------------------------------------------------------------------
In the case of
household income
(expressed as a percent The initial premium The final premium
of poverty line) within percentage is-- percentage is--
the following income
tier:
------------------------------------------------------------------------
Up to 133% 2.0% 2.0%
133% up to 150% 3.0% 4.0%
150% up to 200% 4.0% 6.3%
200% up to 250% 6.3% 8.05%
250% up to 300% 8.05% 9.5%
300% up to 400% 9.5% 9.5%
------------------------------------------------------------------------
(ii) Indexing.--
(I) In general.--Subject to
subclause (II), in the case of
taxable years beginning in any
calendar year after 2014, the
initial and final applicable
percentages under clause (i)
(as in effect for the preceding
calendar year after application
of this clause) shall be
adjusted to reflect the excess
of the rate of premium growth
for the preceding calendar year
over the rate of income growth
for the preceding calendar
year.
(II) Additional
adjustment.--Except as provided
in subclause (III), in the case
of any calendar year after
2018, the percentages described
in subclause (I) shall, in
addition to the adjustment
under subclause (I), be
adjusted to reflect the excess
(if any) of the rate of premium
growth estimated under
subclause (I) for the preceding
calendar year over the rate of
growth in the consumer price
index for the preceding
calendar year.
(III) Failsafe.--Subclause
(II) shall apply for any
calendar year only if the
aggregate amount of premium tax
credits under this section and
cost-sharing reductions under
section 1402 of the Patient
Protection and Affordable Care
Act for the preceding calendar
year exceeds an amount equal to
0.504 percent of the gross
domestic product for the
preceding calendar year.
(B) Applicable second lowest cost silver
plan.--The applicable second lowest cost silver
plan with respect to any applicable taxpayer is
the second lowest cost silver plan of the
individual market in the rating area in which
the taxpayer resides which--
(i) is offered through the same
Exchange through which the qualified
health plans taken into account under
paragraph (2)(A) were offered, and
(ii) provides--
(I) self-only coverage in
the case of an applicable
taxpayer--
(aa) whose tax for
the taxable year is
determined under
section 1(c) (relating
to unmarried
individuals other than
surviving spouses and
heads of households)
and who is not allowed
a deduction under
section 151 for the
taxable year with
respect to a dependent,
or
(bb) who is not
described in item (aa)
but who purchases only
self-only coverage, and
(II) family coverage in the
case of any other applicable
taxpayer.
If a taxpayer files a joint return and no
credit is allowed under this section with
respect to 1 of the spouses by reason of
subsection (e), the taxpayer shall be treated
as described in clause (ii)(I) unless a
deduction is allowed under section 151 for the
taxable year with respect to a dependent other
than either spouse and subsection (e) does not
apply to the dependent.
(C) Adjusted monthly premium.--The adjusted
monthly premium for an applicable second lowest
cost silver plan is the monthly premium which
would have been charged (for the rating area
with respect to which the premiums under
paragraph (2)(A) were determined) for the plan
if each individual covered under a qualified
health plan taken into account under paragraph
(2)(A) were covered by such silver plan and the
premium was adjusted only for the age of each
such individual in the manner allowed under
section 2701 of the Public Health Service Act.
In the case of a State participating in the
wellness discount demonstration project under
section 2705(d) of the Public Health Service
Act, the adjusted monthly premium shall be
determined without regard to any premium
discount or rebate under such project.
(D) Additional benefits.--If--
(i) a qualified health plan under
section 1302(b)(5) of the Patient
Protection and Affordable Care Act
offers benefits in addition to the
essential health benefits required to
be provided by the plan, or
(ii) a State requires a qualified
health plan under section 1311(d)(3)(B)
of such Act to cover benefits in
addition to the essential health
benefits required to be provided by the
plan,
the portion of the premium for the plan
properly allocable (under rules prescribed by
the Secretary of Health and Human Services) to
such additional benefits shall not be taken
into account in determining either the monthly
premium or the adjusted monthly premium under
paragraph (2).
(E) Special rule for pediatric dental
coverage.--For purposes of determining the
amount of any monthly premium, if an individual
enrolls in both a qualified health plan and a
plan described in section 1311(d)(2)(B)(ii) (I)
of the Patient Protection and Affordable Care
Act for any plan year, the portion of the
premium for the plan described in such section
that (under regulations prescribed by the
Secretary) is properly allocable to pediatric
dental benefits which are included in the
essential health benefits required to be
provided by a qualified health plan under
section 1302(b)(1)(J) of such Act shall be
treated as a premium payable for a qualified
health plan.
(c) Definition and Rules Relating to Applicable Taxpayers,
Coverage Months, and Qualified Health Plan.--For purposes of
this section--
(1) Applicable taxpayer.--
(A) In general.--The term ``applicable
taxpayer'' means, with respect to any taxable
year, a taxpayer whose household income for the
taxable year equals or exceeds 100 percent but
does not exceed 400 percent of an amount equal
to the poverty line for a family of the size
involved.
(B) Special rule for certain individuals
lawfully present in the United States.--If--
(i) a taxpayer has a household
income which is not greater than 100
percent of an amount equal to the
poverty line for a family of the size
involved, and
(ii) the taxpayer is an alien
lawfully present in the United States,
but is not eligible for the medicaid
program under title XIX of the Social
Security Act by reason of such alien
status,
the taxpayer shall, for purposes of the credit
under this section, be treated as an applicable
taxpayer with a household income which is equal
to 100 percent of the poverty line for a family
of the size involved.
(C) Married couples must file joint
return.--If the taxpayer is married (within the
meaning of section 7703) at the close of the
taxable year, the taxpayer shall be treated as
an applicable taxpayer only if the taxpayer and
the taxpayer's spouse file a joint return for
the taxable year.
(D) Denial of credit to dependents.--No
credit shall be allowed under this section to
any individual with respect to whom a deduction
under section 151 is allowable to another
taxpayer for a taxable year beginning in the
calendar year in which such individual's
taxable year begins.
(2) Coverage month.--For purposes of this
subsection--
(A) In general.--The term ``coverage month''
means, with respect to an applicable taxpayer,
any month if--
(i) as of the first day of such
month the taxpayer, the taxpayer's
spouse, or any dependent of the
taxpayer is covered by a qualified
health plan described in subsection
(b)(2)(A) that was enrolled in through
an Exchange established by the State
under section 1311 of the Patient
Protection and Affordable Care Act, and
(ii) the premium for coverage under
such plan for such month is paid by the
taxpayer (or through advance payment of
the credit under subsection (a) under
section 1412 of the Patient Protection
and Affordable Care Act).
(B) Exception for minimum essential
coverage.--
(i) In general.--The term ``coverage
month'' shall not include any month
with respect to an individual if for
such month the individual is eligible
for minimum essential coverage other
than eligibility for coverage described
in section 5000A(f)(1)(C) (relating to
coverage in the individual market).
(ii) Minimum essential coverage.--
The term ``minimum essential coverage''
has the meaning given such term by
section 5000A(f).
(C) Special rule for employer-sponsored
minimum essential coverage.--For purposes of
subparagraph (B)--
(i) Coverage must be affordable.--
Except as provided in clause (iii), an
employee shall not be treated as
eligible for minimum essential coverage
if such coverage--
(I) consists of an eligible
employer-sponsored plan (as
defined in section
5000A(f)(2)), and
(II) the employee's required
contribution (within the
meaning of section
5000A(e)(1)(B)) with respect to
the plan exceeds 9.5 percent of
the applicable taxpayer's
household income.
This clause shall also apply to an
individual who is eligible to enroll in
the plan by reason of a relationship
the individual bears to the employee.
(ii) Coverage must provide minimum
value.--Except as provided in clause
(iii), an employee shall not be treated
as eligible for minimum essential
coverage if such coverage consists of
an eligible employer-sponsored plan (as
defined in section 5000A(f)(2)) and the
plan's share of the total allowed costs
of benefits provided under the plan is
less than 60 percent of such costs.
(iii) Employee or family must not be
covered under employer plan.--Clauses
(i) and (ii) shall not apply if the
employee (or any individual described
in the last sentence of clause (i)) is
covered under the eligible employer-
sponsored plan or the grandfathered
health plan.
(iv) Indexing.--In the case of plan
years beginning in any calendar year
after 2014, the Secretary shall adjust
the 9.5 percent under clause (i)(II) in
the same manner as the percentages are
adjusted under subsection
(b)(3)(A)(ii).
(3) Definitions and other rules.--
(A) Qualified health plan.--The term
``qualified health plan'' has the meaning given
such term by section 1301(a) of the Patient
Protection and Affordable Care Act, except that
such term shall not include a qualified health
plan which is a catastrophic plan described in
section 1302(e) of such Act.
(B) Grandfathered health plan.--The term
``grandfathered health plan'' has the meaning
given such term by section 1251 of the Patient
Protection and Affordable Care Act.
(4) Special rules for qualified small employer
health reimbursement arrangements.--
(A) In general.--The term ``coverage month''
shall not include any month with respect to an
employee (or any spouse or dependent of such
employee) if for such month the employee is
provided a qualified small employer health
reimbursement arrangement which constitutes
affordable coverage.
(B) Denial of double benefit.--In the case
of any employee who is provided a qualified
small employer health reimbursement arrangement
for any coverage month (determined without
regard to subparagraph (A)), the credit
otherwise allowable under subsection (a) to the
taxpayer for such month shall be reduced (but
not below zero) by the amount described in
subparagraph (C)(i)(II) for such month.
(C) Affordable coverage.--For purposes of
subparagraph (A), a qualified small employer
health reimbursement arrangement shall be
treated as constituting affordable coverage for
a month if--
(i) the excess of--
(I) the amount that would be
paid by the employee as the
premium for such month for
self-only coverage under the
second lowest cost silver plan
offered in the relevant
individual health insurance
market, over
(II) \1/12\ of the
employee's permitted benefit
(as defined in section
9831(d)(3)(C)) under such
arrangement, does not exceed--
(ii) \1/12\ of 9.5 percent of the
employee's household income.
(D) Qualified small employer health
reimbursement arrangement.--For purposes of
this paragraph, the term ``qualified small
employer health reimbursement arrangement'' has
the meaning given such term by section
9831(d)(2).
(E) Coverage for less than entire year.--In
the case of an employee who is provided a
qualified small employer health reimbursement
arrangement for less than an entire year,
subparagraph (C)(i)(II) shall be applied by
substituting "the number of months during the
year for which such arrangement was provided"
for "12'.
(F) Indexing.--In the case of plan years
beginning in any calendar year after 2014, the
Secretary shall adjust the 9.5 percent amount
under subparagraph (C)(ii) in the same manner
as the percentages are adjusted under
subsection (b)(3)(A)(ii).
(d) Terms Relating to Income and Families.--For purposes of
this section--
(1) 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.
(2) Household income.--
(A) Household income.--The term ``household
income'' means, with respect to any taxpayer,
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.
(B) 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,
(ii) any amount of interest received
or accrued by the taxpayer during the
taxable year which is exempt from tax,
and
(iii) an amount equal to the portion
of the taxpayer's social security
benefits (as defined in section 86(d))
which is not included in gross income
under section 86 for the taxable year.
(3) Poverty line.--
(A) In general.--The term ``poverty line''
has the meaning given that term in section
2110(c)(5) of the Social Security Act (42
U.S.C. 1397jj(c)(5)).
(B) Poverty line used.--In the case of any
qualified health plan offered through an
Exchange for coverage during a taxable year
beginning in a calendar year, the poverty line
used shall be the most recently published
poverty line as of the 1st day of the regular
enrollment period for coverage during such
calendar year.
(e) Rules for Individuals Not Lawfully Present.--
(1) In general.--If 1 or more individuals for whom a
taxpayer is allowed a deduction under section 151
(relating to allowance of deduction for personal
exemptions) for the taxable year (including the
taxpayer or his spouse) are individuals who are not
lawfully present--
(A) the aggregate amount of premiums
otherwise taken into account under clauses (i)
and (ii) of subsection (b)(2)(A) shall be
reduced by the portion (if any) of such
premiums which is attributable to such
individuals, and
(B) for purposes of applying this section,
the determination as to what percentage a
taxpayer's household income bears to the
poverty level for a family of the size involved
shall be made under one of the following
methods:
(i) A method under which--
(I) the taxpayer's family
size is determined by not
taking such individuals into
account, and
(II) the taxpayer's
household income is equal to
the product of the taxpayer's
household income (determined
without regard to this
subsection) and a fraction--
(aa) the numerator
of which is the poverty
line for the taxpayer's
family size determined
after application of
subclause (I), and
(bb) the denominator
of which is the poverty
line for the taxpayer's
family size determined
without regard to
subclause (I).
(ii) A comparable method reaching
the same result as the method under
clause (i).
(2) Lawfully present.--For purposes of this section,
an individual shall be treated as lawfully present only
if the individual is, and is reasonably expected to be
for the entire period of enrollment for which the
credit under this section is being claimed, a citizen
or national of the United States or an alien lawfully
present in the United States.
(3) Secretarial authority.--The Secretary of Health
and Human Services, in consultation with the Secretary,
shall prescribe rules setting forth the methods by
which calculations of family size and household income
are made for purposes of this subsection. Such rules
shall be designed to ensure that the least burden is
placed on individuals enrolling in qualified health
plans through an Exchange and taxpayers eligible for
the credit allowable under this section.
(f) Reconciliation of Credit and Advance Credit.--
(1) In general.--The amount of the credit allowed
under this section for any taxable year shall be
reduced (but not below zero) by the amount of any
advance payment of such credit under section 1412 of
the Patient Protection and Affordable Care Act.
(2) Excess advance payments.--
(A) In general.--If the advance payments to
a taxpayer under section 1412 of the Patient
Protection and Affordable Care Act for a
taxable year exceed the credit allowed by this
section (determined without regard to paragraph
(1)), the tax imposed by this chapter for the
taxable year shall be increased by the amount
of such excess.
(B) Limitation on increase.--
(i) In general.--In the case of a
taxpayer whose household income is less
than 400 percent of the poverty line
for the size of the family involved for
the taxable year, the amount of the
increase under subparagraph (A) shall
in no event exceed the applicable
dollar amount determined in accordance
with the following table (one-half of
such amount in the case of a taxpayer
whose tax is determined under section
1(c) for the taxable year):
------------------------------------------------------------------------
If the household income (expressed
as a percent of poverty line) is: The applicable dollar amount is:
------------------------------------------------------------------------
Less than 200% $600
At least 200% but less than 300% $1,500
At least 300% but less than 400% $2,500
------------------------------------------------------------------------
(ii) Indexing of amount.--In the
case of any calendar year beginning
after 2014, each of the dollar amounts
in the table contained under clause (i)
shall be increased by an amount equal
to--
(I) such dollar amount,
multiplied by
(II) the cost-of-living
adjustment determined under
section 1(f)(3) for the
calendar year, determined by
substituting ``calendar year
2013'' 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.
(3) Information requirement.--Each Exchange (or any
person carrying out 1 or more responsibilities of an
Exchange under section 1311(f)(3) or 1321(c) of the
Patient Protection and Affordable Care Act) shall
provide the following information to the Secretary and
to the taxpayer with respect to any health plan
provided through the Exchange:
(A) The level of coverage described in
section 1302(d) of the Patient Protection and
Affordable Care Act and the period such
coverage was in effect.
(B) The total premium for the coverage
without regard to the credit under this section
or cost-sharing reductions under section 1402
of such Act.
(C) The aggregate amount of any advance
payment of such credit or reductions under
section 1412 of such Act.
(D) The name, address, and TIN of the
primary insured and the name and TIN of each
other individual obtaining coverage under the
policy.
(E) Any information provided to the
Exchange, including any change of
circumstances, necessary to determine
eligibility for, and the amount of, such
credit.
(F) Information necessary to determine
whether a taxpayer has received excess advance
payments.
(g) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the provisions of
this section, including regulations which provide for--
(1) the coordination of the credit allowed under
this section with the program for advance payment of
the credit under section 1412 of the Patient Protection
and Affordable Care Act, and
(2) the application of subsection (f) where the
filing status of the taxpayer for a taxable year is
different from such status used for determining the
advance payment of the credit.
[The following shows proposed changes to section 36B of the
Internal Revenue Code of 1986 as such section is proposed to
read after amendment by section 214 of the American Health Care
Act of 2017 (H.R. 1628, as engrossed in the House):]
SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN.
(a) Allowance of Premium Tax Credit.--In the case of an
individual, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year the sum of the
monthly credit amounts with respect to such taxpayer for
calendar months during such taxable year which are eligible
coverage months appropriately taken into account under
subsection (b)(2) with respect to the taxpayer or any
qualifying family member of the taxpayer.
(b) Monthly Credit Amounts.--
(1) In general.--The monthly credit amount with
respect to any taxpayer for any calendar month is the
lesser of--
(A) the sum of the monthly limitation
amounts determined under subsection (c) with
respect to the taxpayer and the taxpayer's
qualifying family members for such month, or
(B) the amount paid for a qualified health
plan for the taxpayer and the taxpayer's
qualifying family members for such month.
(2) Eligible coverage month requirement.--No amount
shall be taken into account under subparagraph (A) or
(B) of paragraph (1) with respect to any individual for
any month unless such month is an eligible coverage
month with respect to such individual.
(c) Monthly Limitation Amounts.--
(1) In general.--The monthly limitation amount with
respect to any individual for any eligible coverage
month during any taxable year is \1/12\ of--
(A) $2,000 in the case of an individual who
has not attained age 30 as of the beginning of
such taxable year,
(B) $2,500 in the case of an individual who
has attained age 30 but who has not attained
age 40 as of such time,
(C) $3,000 in the case of an individual who
has attained age 40 but who has not attained
age 50 as of such time,
(D) $3,500 in the case of an individual who
has attained age 50 but who has not attained
age 60 as of such time, and
(E) $4,000 in the case of an individual who
has attained age 60 as of such time.
(2) Limitation based on modified adjusted gross
income.--The credit allowed under subsection (a) with
respect to any taxpayer for any taxable year shall be
reduced (but not below zero) by 10 percent of the
excess (if any) of--
(A) the taxpayer's modified adjusted gross
income (as defined in section 36B(d)(2)(B), as
in effect for taxable years beginning before
January 1, 2020) for such taxable year, over
(B) $75,000 (twice such amount in the case
of a joint return).
(3) Other limitations.--
(A) Aggregate dollar limitation.--The sum of
the monthly limitation amounts taken into
account under this section with respect to any
taxpayer for any taxable year shall not exceed
$14,000.
(B) Maximum number of individuals taken into
account.--With respect to any taxpayer for any
month, monthly limitation amounts shall be
taken into account under this section only with
respect to the 5 oldest individuals with
respect to whom monthly limitation amounts
could (without regard to this subparagraph)
otherwise be so taken into account.
(d) Eligible Coverage Month.--For purposes of this section,
the term ``eligible coverage month'' means, with respect to any
individual, any month if, as of the first day of such month,
the individual meets the following requirements:
(1) The individual is covered by a health insurance
coverage which is certified by the State in which such
insurance is offered as coverage that meets the
requirements for qualified health plans under
subsection (f).
(2) The individual is not eligible for--
(A) coverage under a group health plan
(within the meaning of section 5000(b)(1))
other than COBRA continuation coverage or
coverage under a plan substantially all of the
coverage of which is of excepted benefits
described in section 9832(c), or
(B) coverage described in section
5000A(f)(1)(A).
(3) The individual is either--
(A) a citizen or national of the United
States, or
(B) a qualified alien (within the meaning of
section 431 of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1641)).
(4) The individual is not incarcerated, other than
incarceration pending the disposition of charges.
(e) Qualifying Family Member.--For purposes of this section,
the term ``qualifying family member'' means--
(1) in the case of a joint return, the taxpayer's
spouse,
(2) any dependent of the taxpayer, and
(3) with respect to any eligible coverage month, any
child (as defined in section 152(f)(1)) of the taxpayer
who as of the end of the taxable year has not attained
age 27 if such child is covered for such month under a
qualified health plan which also covers the taxpayer
(in the case of a joint return, either spouse).
(f) Qualified Health Plan.--For purposes of this section,
the term ``qualified health plan'' means any health insurance
coverage (as defined in section 9832(b)) offered in the
individual health insurance market within a State (within the
meaning of section 5000A(f)(1)(C)), or any unsubsidized COBRA
continuation coverage, if--
[(1) such coverage is offered in the individual
health insurance market within a State (within the
meaning of section 5000A(f)(1)(C)),]
[(2)] (1) substantially all of such coverage is not
of excepted benefits described in section 9832(c),
[(3)] (2) such coverage does not consist of short-
term limited duration insurance (within the meaning of
section 2791(b)(5) of the Public Health Service Act),
[(4)] (3) such coverage is not a grandfathered
health plan (as defined in section 1251 of the Patient
Protection and Affordable Care Act) or a grandmothered
health plan (as defined in section 36B(c)(3)(C) as in
effect for taxable years beginning before January 1,
2020), and
[(5)] (4) such coverage does not include coverage
for abortions (other than any abortion necessary to
save the life of the mother or any abortion with
respect to a pregnancy that is the result of an act of
rape or incest).
(g) Special Rules.--
(1) Married couples must file joint return.--
(A) In general.--Except as provided in
subparagraph (B), if the taxpayer is married
(within the meaning of section 7703) at the
close of the taxable year, no credit shall be
allowed under this section to such taxpayer
unless such taxpayer and the taxpayer's spouse
file a joint return for such taxable year.
(B) Exception for certain taxpayers.--
Subparagraph (A) shall not apply to any married
taxpayer who--
(i) is living apart from the
taxpayer's spouse at the time the
taxpayer files the tax return,
(ii) is unable to file a joint
return because such taxpayer is a
victim of domestic abuse or spousal
abandonment,
(iii) certifies on the tax return
that such taxpayer meets the
requirements of clauses (i) and (ii),
and
(iv) has not met the requirements of
clauses (i), (ii), and (iii) for each
of the 3 preceding taxable years.
(2) Denial of credit to dependents.--
(A) In general.--No credit shall be allowed
under this section to any individual who is a
dependent with respect to another taxpayer for
a taxable year beginning in the calendar year
in which such individual's taxable year begins.
(B) Coordination with rule for older
children.--In the case of any individual who is
a qualifying family member described in
subsection (e)(3) with respect to another
taxpayer for any month, in determining the
amount of any credit allowable to such
individual under this section for any taxable
year of such individual which includes such
month, the monthly limitation amount with
respect to such individual for such month shall
be zero and no amount paid for any qualified
health plan with respect to such individual for
such month shall be taken into account.
(3) Coordination with medical expense deduction.--
Amounts described in subsection (b)(1)(B) with respect
to any month shall not be taken into account in
determining the deduction allowed under section 213
except to the extent that such amounts exceed the
amount described in subsection (b)(1)(A) with respect
to such month.
(4) Coordination with advance payments of credit.--
With respect to any taxable year--
(A) the amount which would (but for this
subsection) be allowed as a credit to the
taxpayer under subsection (a) shall be reduced
(but not below zero) by the aggregate amount
paid on behalf of such taxpayer under section
1412 of the Patient Protection and Affordable
Care Act for months beginning in such taxable
year, and
(B) the tax imposed by section 1 for such
taxable year shall be increased by the excess
(if any) of--
(i) the aggregate amount paid on
behalf of such taxpayer under such
section 1412 for months beginning in
such taxable year, over
(ii) the amount which would (but for
this subsection) be allowed as a credit
to the taxpayer under subsection (a).
(5) Special rules for qualified small employer
health reimbursement arrangements.--
(A) In general.--If the taxpayer or any
qualifying family member of the taxpayer is
provided a qualified small employer health
reimbursement arrangement for an eligible
coverage month, the sum determined under
subsection (b)(1)(A) with respect to the
taxpayer shall be reduced (but not below zero)
by \1/12\ of the permitted benefit (as defined
in section 9831(d)(3)(C)) under such
arrangement for each such month such
arrangement is provided to such taxpayer.
(B) Qualified small employer health
reimbursement arrangement.--For purposes of
this paragraph, the term ``qualified small
employer health reimbursement arrangement'' has
the meaning given such term by section
9831(d)(2).
(C) Coverage for less than entire year.--In
the case of an employee who is provided a
qualified small employer health reimbursement
arrangement for less than an entire year,
subparagraph (A) shall be applied by
substituting ``the number of months during the
year for which such arrangement was provided''
for ``12''.
(6) Certain rules related to nonqualified health
plans.--The rules of section 36B(c)(3)(D), as in effect
for taxable years beginning before January 1, 2020,
shall apply with respect to subsection [(f)(5)] (f)(4).
(7) Inflation adjustment.--
(A) In general.--In the case of any taxable
year beginning in a calendar year after 2020,
each dollar amount in subsection (c)(1), the
$75,000 amount in subsection (c)(2)(B), and the
dollar amount in subsection (c)(3)(A), shall be
increased by an amount equal to--
(i) such dollar amount, multiplied
by
(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year in which the taxable
year begins, determined--
(I) by substituting
``calendar year 2019'' for
``calendar year 1992'' in
subparagraph (B) thereof, and
(II) by substituting for the
CPI referred to section
1(f)(3)(A) the amount that such
CPI would have been if the
annual percentage increase in
CPI with respect to each year
after 2019 had been one
percentage point greater.
(B) Terms related to cpi.--
(i) Annual percentage increase.--For
purposes of subparagraph (A)(ii)(II),
the term ``annual percentage increase''
means the percentage (if any) by which
CPI for any year exceeds CPI for the
prior year.
(ii) Other terms.--Terms used in
this paragraph which are also used in
section 1(f)(3) shall have the same
meanings as when used in such section.
(C) Rounding.--Any increase determined under
subparagraph (A) shall be rounded to the
nearest multiple of $50.
(8) Rules related to state certification of
qualified health plans.--A certification shall not be
taken into account under subsection (d)(1) unless such
certification is made available to the public and meets
such other requirements as the Secretary may provide.
(9) Special rule for unsubsidized cobra continuation
coverage.--In the case of unsubsidized COBRA
continuation coverage--
(A) subsection (d)(1) shall be applied by
substituting ``COBRA continuation coverage
which is certified by the plan administrator
(as defined in section 414(g)) of the group
health plan'' for ``health insurance coverage
which is certified by the State in which such
insurance is offered'', and
(B) the requirements of paragraph (8) shall
be treated as satisfied if the certification
meets such requirements as the Secretary may
provide.
[(9)] (10) Regulations.--The Secretary may prescribe
such regulations and other guidance as may be necessary
or appropriate to carry out this section and section
1412 of the Patient Protection and Affordable Care Act.
(h) Unsubsidized COBRA Continuation Coverage.--For purposes
of this section--
(1) In general.--The term ``unsubsidized COBRA
continuation coverage'' means COBRA continuation
coverage the payment of applicable premiums (as defined
in section 4980B(f)(4)) for which is solely the
obligation of the taxpayer.
(2) COBRA continuation coverage.--The term ``COBRA
continuation coverage'' means continuation coverage
provided--
(A) pursuant to part 6 of subtitle B of
title I of the Employee Retirement Income
Security Act of 1974 (other than under sections
602(5) and 609), title XXII of the Public
Health Service Act, section 4980B (other than
subsection (f)(1) thereof insofar as it relates
to pediatric vaccines), or section 8905a of
title 5, United States Code,
(B) under a State law or program that
provides coverage comparable to coverage
described in subparagraph (A), or
(C) under a group health plan that is a
church plan (as defined in section 414(e)) and
is comparable to coverage provided pursuant to
section 4980B.
Such term shall not include coverage under a health
flexible spending arrangement.
* * * * * * *
VII. DISSENTING VIEWS
H.R. 2579 (Tiberi, R-OH) amends H.R. 1628, the American
Health Care Act (AHCA), to allow people to receive tax credits
for Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA) coverage if they have elected their COBRA coverage upon
separation from employment and are paying the entire premium
out of pocket. H.R. 2579 amends a bill that has not yet passed
the Senate or become law.
COBRA requires employers to offer eligible employees who
lose their health benefits due to a qualifying event (e.g.,
loss of a job) to continue group health insurance benefits for
up to 18 months at the employee's own cost. Under COBRA, an
individual pays the full cost of the premiums plus a two
percent (2%) administrative fee. Most individuals eligible for
COBRA do not select this coverage option because of the high,
unsubsidized cost at a time when income is often declining.
Prior to the Affordable Care Act (ACA) market reforms, COBRA
was important for individuals leaving a job who were often
unable to access affordable individual market health insurance
because of pre-existing conditions and underwriting. While
COBRA remains important for some families, because individuals
separating from their employers have had access to coverage in
the individual market without concerns about underwriting, pre-
existing condition discrimination or outright denial of
coverage, coupled with the availability of premium subsidies,
COBRA coverage has declined in importance.
Under current law, individuals separating from their
employer may be eligible for financial assistance to purchase
coverage through the ACA exchanges. The advanced premium tax
credits are adjusted for the cost of the insurance, as well as
income. Individuals who separate from their employer and are
eligible for unsubsidized COBRA are eligible for premium tax
credits for marketplace plans as they no longer have an offer
of employer-sponsored coverage.
H.R. 2579 does not address the underlying harm and
inadequacies in the AHCA. H.R. 2579 does nothing to improve the
inadequate tax credits under AHCA, which are unlikely to
provide meaningful assistance for the individual market or for
COBRA plans. AHCA also repeals the cost-sharing assistance that
helps Americans afford the out-of-pocket costs associated with
medical visits. AHCA allows insurance companies to discriminate
against older workers by charging five times or more what they
charge younger people; the result is lower quality coverage and
higher out of pocket costs for older Americans by nearly 70
percent. Middle-class families could be particularly hard hit
by this bill, while millionaires and billionaires would get a
tax cut.
Potential for harm of employer group health insurance risk
pools. The underlying Republican bill, AHCA, passed without a
hearing or any opportunity for public comment. Employer and
their current employees and retirees could be negatively
impacted by this proposal as it could encourage older sicker
workers to remain in the risk pool for longer periods of time.
For a large employer this might not present a burden, but for a
smaller employer, retaining former employees on the insurance
plan could increase premiums. However, the Committee does not
know whether this is the case because the proposal was not
examined prior to Committee action.
H.R. 2579 is another Republican attempt to distract from
the underlying problems with the AHCA. The AHCA would cause 23
million Americans to lose health insurance coverage, erode
important consumer protections and raise costs for countless
more Americans. Higher costs and less coverage. All the while
the AHCA provides a huge tax giveaway to the wealthiest. In
fact, the 400 wealthiest Americans would get a $7 million tax
cut every year. The Republicans put billionaires ahead of
working families, and H.R. 2579 does nothing to fix the
underlying bill's significant problems. For these reasons we
oppose the AHCA, H.R. 2579, and any amendments that do not
address the underlying problems with the legislation.
Richard E. Neal,
Ranking Member.
[all]