# H.R. 3200/Division A/Title II/Subtitle C
## SUBTITLE C — INDIVIDUAL AFFORDABILITY CREDITS
### Sec. 241. Availability Through Health Insurance Exchange.

    (a) In General.—
       Subject to the succeeding provisions of this subtitle, in the case of an affordable credit eligible individual enrolled in an Exchange-participating health benefits plan—
          (1) the individual shall be eligible for, in accordance with this subtitle, affordability credits consisting of—
                (A) an affordability premium credit under section 243 to be applied against the premium for the Exchange-participating health benefits plan in which the individual is enrolled; and
                (B) an affordability cost-sharing credit under section 244 to be applied as a reduction of the cost-sharing otherwise applicable to such plan; and
          (2) the Commissioner shall pay the QHBP offering entity that offers such plan from the Health Insurance Exchange Trust Fund the aggregate amount of affordability credits for all affordable credit eligible individuals enrolled in such plan.
    (b) Application.—
          (1) In General.—
             An Exchange eligible individual may apply to the Commissioner through the Health Insurance Exchange or through another entity under an arrangement made with the Commissioner, in a form and manner specified by the Commissioner. The Commissioner through the Health Insurance Exchange or through another public entity under an arrangement made with the Commissioner shall make a determination as to eligibility of an individual for affordability credits under this subtitle. The Commissioner shall establish a process whereby, on the basis of information otherwise available, individuals may be deemed to be affordable credit eligible individuals. In carrying this subtitle, the Commissioner shall establish effective methods that ensure that individuals with limited English proficiency are able to apply for affordability credits.
          (2) Use of State Medicaid Agencies.—
             If the Commissioner determines that a State Medicaid agency has the capacity to make a determination of eligibility for affordability credits under this subtitle and under the same standards as used by the Commissioner, under the Medicaid memorandum of understanding (as defined in section 205(c)(4))—
                (A) the State Medicaid agency is authorized to conduct such determinations for any Exchange-eligible individual who requests such a determination; and
                (B) the Commissioner shall reimburse the State Medicaid agency for the costs of conducting such determinations.
          (3) Medicaid Screen and Enroll Obligation.—
             In the case of an application made under paragraph (1), there shall be a determination of whether the individual is a Medicaid-eligible individual. If the individual is determined to be so eligible, the Commissioner, through the Medicaid memorandum of understanding, shall provide for the enrollment of the individual under the State Medicaid plan in accordance with the Medicaid memorandum of understanding. In the case of such an enrollment, the State shall provide for the same periodic redetermination of eligibility under Medicaid as would otherwise apply if the individual had directly applied for medical assistance to the State Medicaid agency.
    (c) Use of Affordability Credits.—
          (1) In General.—
             In Y1 and Y2 an affordable credit eligible individual may use an affordability credit only with respect to a basic plan.
          (2) Flexibility in Plan Enrollment Authorized.—
             Beginning with Y3, the Commissioner shall establish a process to allow an affordability credit to be used for enrollees in enhanced or premium plans. In the case of an affordable credit eligible individual who enrolls in an enhanced or premium plan, the individual shall be responsible for any difference between the premium for such plan and the affordable credit amount otherwise applicable if the individual had enrolled in a basic plan.
    (d) Access to Data.—
       In carrying out this subtitle, the Commissioner shall request from the Secretary of the Treasury consistent with section 6103 of the Internal Revenue Code of 1986 such information as may be required to carry out this subtitle.
    (e) No Cash Rebates.—
       In no case shall an affordable credit eligible individual receive any cash payment as a result of the application of this subtitle.

### Sec. 242. Affordable Credit Eligible Individual.

    (a) Definition.—
          (1) In General.—
             For purposes of this division, the term “affordable credit eligible individual” means, subject to subsection (b), an individual who is lawfully present in a State in the United States (other than as a nonimmigrant described in a subparagraph (excluding subparagraphs (K), (T), (U), and (V)) of section 101(a)(15) of the Immigration and Nationality Act)—
                (A) who is enrolled under an Exchange-participating health benefits plan and is not enrolled under such plan as an employee (or dependent of an employee) through an employer qualified health benefits plan that meets the requirements of section 312;
                (B) with family income below 400 percent of the Federal poverty level for a family of the size involved; and
                (C) who is not a Medicaid eligible individual, other than an individual described in section 202(d)(3) or an individual during a transition period under section 202(d)(4)(B)(ii).
          (2) Treatment of Family.—
             Except as the Commissioner may otherwise provide, members of the same family who are affordable credit eligible individuals shall be treated as a single affordable credit individual eligible for the applicable credit for such a family under this subtitle.
    (b) Limitations on Employee and Dependent Disqualification.—
          (1) In General.—
             Subject to paragraph (2), the term “affordable credit eligible individual” does not include a full-time employee of an employer if the employer offers the employee coverage (for the employee and dependents) as a full-time employee under a group health plan if the coverage and employer contribution under the plan meet the requirements of section 312.
          (2) Exceptions.—
                (A) For certain family circumstances.—
                   The Commissioner shall establish such exceptions and special rules in the case described in paragraph (1) as may be appropriate in the case of a divorced or separated individual or such a dependent of an employee who would otherwise be an affordable credit eligible individual.
                (B) For unaffordable employer coverage.—
                   Beginning in Y2, in the case of full-time employees for which the cost of the employee premium for coverage under a group health plan would exceed 11 percent of current family income (determined by the Commissioner on the basis of verifiable documentation and without regard to section 245), paragraph (1) shall not apply.
    (c) Income Defined.—
          (1) In General.—
             In this title, the term “income” means modified adjusted gross income (as defined in section 59B of the Internal Revenue Code of 1986).
          (2) Study of Income Disregards.—
             The Commissioner shall conduct a study that examines the application of income disregards for purposes of this subtitle. Not later than the first day of Y2, the Commissioner shall submit to Congress a report on such study and shall include such recommendations as the Commissioner determines appropriate.
    (d) Clarification of Treatment of Affordability Credits.—
       Affordabilty credits under this subtitle shall not be treated, for purposes of title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, to be a benefit provided under section 403 of such title.

### Sec. 243. Affordable Premium Credit.

    (a) In General.—
       The affordability premium credit under this section for an affordable credit eligible individual enrolled in an Exchange-participating health benefits plan is in an amount equal to the amount (if any) by which the premium for the plan (or, if less, the reference premium amount specified in subsection (c)), exceeds the affordable premium amount specified in subsection (b) for the individual.
    (b) Affordable Premium Amount.—
          (1) In General.—
             The affordable premium amount specified in this subsection for an individual for monthly premium in a plan year shall be equal to 1⁄12 of the product of—
                (A) the premium percentage limit specified in paragraph (2) for the individual based upon the individual’s family income for the plan year; and
                (B) the individual’s family income for such plan year.
          (2) Premium Percentage Limits Based on Table.—
             The Commissioner shall establish premium percentage limits so that for individuals whose family income is within an income tier specified in the table in subsection (d) such percentage limits 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.
    (c) Reference Premium Amount.—
       The reference premium amount specified in this subsection for a plan year for an individual in a premium rating area is equal to the average premium for the 3 basic plans in the area for the plan year with the lowest premium levels. In computing such amount the Commissioner may exclude plans with extremely limited enrollments.
    (d) Table of Premium Percentage Limits and Actuarial Value Percentages Based on Income Tier.—
          (1) In General.—
             For purposes of this subtitle, the table specified in this subsection is as follows:
| In the case of family income (expressed as a percent of FPL) within the following income tier: | The initial premium percentage is— | The final premium percentage is— | The actuarial value percentage is— |
| 133% through 150% | 1.5% | 3% | 97% |
| 150% through 200% | 3% | 5% | 93% |
| 200% through 250% | 5% | 7% | 85% |
| 250% through 300% | 7% | 9% | 78% |
| 300% through 350% | 9% | 10% | 72% |
| 350% through 400% | 10% | 11% | 70% |
          (2) Special Rules.—
             For purposes of applying the table under paragraph (1)—
                (A) For lowest level of income.—
                   In the case of an individual with income that does not exceed 133 percent of FPL, the individual shall be considered to have income that is 133 percent of FPL.
                (B) Application of higher actuarial value percentage at tier transition points.—
                   If two actuarial value percentages may be determined with respect to an individual, the actuarial value percentage shall be the higher of such percentages.

### Sec. 244. Affordability Cost-Sharing Credit.

    (a) In General.—
       The affordability cost-sharing credit under this section for an affordable credit eligible individual enrolled in an Exchange-participating health benefits plan is in the form of the cost-sharing reduction described in subsection (b) provided under this section for the income tier in which the individual is classified based on the individual’s family income.
    (b) Cost-sharing Reductions.—
       The Commissioner shall specify a reduction in cost-sharing amounts and the annual limitation on cost-sharing specified in section 122(c)(2)(B) under a basic plan for each income tier specified in the table under section 243(d), with respect to a year, in a manner so that, as estimated by the Commissioner, the actuarial value of the coverage with such reduced cost-sharing amounts (and the reduced annual cost-sharing limit) is equal to the actuarial value percentage (specified in the table under section 243(d) for the income tier involved) of the full actuarial value if there were no cost-sharing imposed under the plan.
    (c) Determination and Payment of Cost-sharing Affordability Credit.—
       In the case of an affordable credit eligible individual in a tier enrolled in an Exchange-participating health benefits plan offered by a QHBP offering entity, the Commissioner shall provide for payment to the offering entity of an amount equivalent to the increased actuarial value of the benefits under the plan provided under section 203(c)(2)(B) resulting from the reduction in cost-sharing described in subsection (b).

### Sec. 245. Income Determinations.

    (a) In General.—
       In applying this subtitle for an affordability credit for an individual for a plan year, the individual’s income shall be the income (as defined in section 242(c)) for the individual for the most recent taxable year (as determined in accordance with rules of the Commissioner). The Federal poverty level applied shall be such level in effect as of the date of the application.
    (b) Program Integrity; Income Verification Procedures.—
          (1) Program Integrity.—
             The Commissioner shall take such steps as may be appropriate to ensure the accuracy of determinations and redeterminations under this subtitle.
          (2) Income Verification.—
                (A) In General.—
                   Upon an initial application of an individual for an affordability credit under this subtitle (or in applying section 242(b)) or upon an application for a change in the affordability credit based upon a significant change in family income described in subparagraph (A)—
                      (i) the Commissioner shall request from the Secretary of the Treasury the disclosure to the Commissioner of such information as may be permitted to verify the information contained in such application; and
                      (ii) the Commissioner shall use the information so disclosed to verify such information.
                (B) Alternative Procedures.—
                   The Commissioner shall establish procedures for the verification of income for purposes of this subtitle if no income tax return is available for the most recent completed tax year.
    (c) Special Rules.—
          (1) Changes in Income as a Percent of FPL.—
             In the case that an individual’s income (expressed as a percentage of the Federal poverty level for a family of the size involved) for a plan year is expected (in a manner specified by the Commissioner) to be significantly different from the income (as so expressed) used under subsection (a), the Commissioner shall establish rules requiring an individual to report, consistent with the mechanism established under paragraph (2), significant changes in such income (including a significant change in family composition) to the Commissioner and requiring the substitution of such income for the income otherwise applicable.
          (2) Reporting of Significant Changes in Income.—
             The Commissioner shall establish rules under which an individual determined to be an affordable credit eligible individual would be required to inform the Commissioner when there is a significant change in the family income of the individual (expressed as a percentage of the FPL for a family of the size involved) and of the information regarding such change. Such mechanism shall provide for guidelines that specify the circumstances that qualify as a significant change, the verifiable information required to document such a change, and the process for submission of such information. If the Commissioner receives new information from an individual regarding the family income of the individual, the Commissioner shall provide for a redetermination of the individual’s eligibility to be an affordable credit eligible individual.
          (3) Transition for CHIP.—
             In the case of a child described in section 202(d)(2), the Commissioner shall establish rules under which the family income of the child is deemed to be no greater than the family income of the child as most recently determined before Y1 by the State under title XXI of the Social Security Act.
          (4) Study of Geographic Variation in Application of FPL.—
             The Commissioner shall examine the feasibility and implication of adjusting the application of the Federal poverty level under this subtitle for different geographic areas so as to reflect the variations in cost-of-living among different areas within the United States. If the Commissioner determines that an adjustment is feasible, the study should include a methodology to make such an adjustment. Not later than the first day of Y2, the Commissioner shall submit to Congress a report on such study and shall include such recommendations as the Commissioner determines appropriate.
    (d) Penalties for Misrepresentation.—
       In the case of an individual intentionally misrepresents family income or the individual fails (without regard to intent) to disclose to the Commissioner a significant change in family income under subsection (c) in a manner that results in the individual becoming an affordable credit eligible individual when the individual is not or in the amount of the affordability credit exceeding the correct amount—
          (1) the individual is liable for repayment of the amount of the improper affordability credit; and
          (2) in the case of such an intentional misrepresentation or other egregious circumstances specified by the Commissioner, the Commissioner may impose an additional penalty.

### Sec. 246. No Federal Payment for Undocumented Aliens.

    Nothing in this subtitle shall allow Federal payments for affordability credits on behalf of individuals who are not lawfully present in the United States.