69–006 

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 

2 

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) 

3 

1 All section references herein are to the Internal Revenue Code of 1986, as amended, unless 

otherwise stated. 

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 employersponsored health plan. 

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 

4 

2Sec. 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. 3PPACA sections 1411–1412 provide rules relating to eligibility for and receipt of advance 

payments. 4Federal 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. 5Sec. 911. 

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. 

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 

5 

6 Under section 86, only a portion of an individual’s social security benefits are included in 

gross income. 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. 8Sec. 4980B. Section 4980B(d) provides exceptions for plans maintained by employers with 

fewer than 20 employees, plans of governmental employers, and church plans. 9The COBRA requirements were originally enacted as part of the Consolidated Omnibus 

Budget Reconciliation Act of 1985, Pub. L. No. 99–272. 10 5 U.S.C. sec. 8905a. 

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. 

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. 

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. 

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 representaVerDate Sep 11 2014 22:40 Jun 05, 2017 Jkt 069006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR160.XXX HR160
6 

11Sec. 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. 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. 15Section 36B(f) as amended by AHCA section 214. 16Section 36B(d)(1) as amended by AHCA section 214. 17Section 36B(g)(8) as amended by AHCA section 214. 

tives of the parties who maintained the plan, or (3) in any other 

case, the person prescribed by regulations.11

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

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 

7 

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 ........... .............

8 

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 subVerDate Sep 11 2014 22:40 Jun 05, 2017 Jkt 069006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\HR160.XXX HR160
9 

sidy 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. 

10 

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. 

11 

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 

* * * * * * * 

øThe 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. 

12 

(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 of poverty line) within the following income tier: The initial premium percentage is-- The final premium percentage is-- 

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 

13 

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 costsharing 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— 

14 

(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. 

15 

(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. 

16 

(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 selfonly 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 

17 

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. 

18 

(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 

19 

(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. 

20 

(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. 

øThe 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 

21 

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 inVerDate Sep 11 2014 22:40 Jun 05, 2017 Jkt 069006 PO 00000 Frm 00021 Fmt 6659 Sfmt 6602 E:\HR\OC\HR160.XXX HR160
22 

surance market within a State (within the meaning of section 

5000A(f)(1)(C)), or any unsubsidized COBRA continuation coverage, 

if— 

ø(1) such coverage is offered in the individual health insurance market within a State (within the meaning of section 

5000A(f)(1)(C)),¿ 

ø(2)¿ (1) substantially all of such coverage is not of excepted 

benefits described in section 9832(c), 

ø(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), 

ø(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 

ø(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 

23 

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 ø(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 

24 

(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. 

ø(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 

25 

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. 

* * * * * * * 

(26) 

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. Middleclass 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 

27 

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. 

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