Report text available as:

(PDF provides a complete and accurate display of this text.) Tip?



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.
---------------------------------------------------------------------------
    \1\All section references herein are to the Internal Revenue Code 
of 1986, as amended, unless otherwise stated.
---------------------------------------------------------------------------

                 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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \10\5 U.S.C. sec. 8905a.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------

                  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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------

                           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]