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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2185 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 2185

   To amend the Internal Revenue Code of 1986 to allow individuals a 
refundable credit against income tax for the purchase of private health 
                insurance through a pooling arrangement.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 14, 1999

  Mr. Stark introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
 Government Reform, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
   To amend the Internal Revenue Code of 1986 to allow individuals a 
refundable credit against income tax for the purchase of private health 
                insurance through a pooling arrangement.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Insurance for Americans Act 
of 1999''.

        TITLE I--REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE

SEC. 101. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. HEALTH INSURANCE COSTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this subtitle an amount 
equal to the amount paid during the taxable year for qualified health 
insurance for the taxpayer, his spouse, and dependents.
    ``(b) Limitations.--
            ``(1) In general.--The amount allowed as a credit under 
        subsection (a) to the taxpayer for the taxable year shall not 
        exceed the sum of the monthly limitations for coverage months 
        during such taxable year for each individual referred to in 
        subsection (a) for whom the taxpayer paid during the taxable 
        year any amount for coverage under qualified health insurance.
            ``(2) Monthly limitation.--
                    ``(A) In general.--The monthly limitation for an 
                individual for each coverage month of such individual 
                during the taxable year is the amount equal to 1/12 
                of--
                            ``(i) $1,200 if such individual is the 
                        taxpayer,
                            ``(ii) $1,200 if--
                                    ``(I) such individual is the spouse 
                                of the taxpayer,
                                    ``(II) the taxpayer and such spouse 
                                are married as of the first day of such 
                                month, and
                                    ``(III) the taxpayer files a joint 
                                return for the taxable year, and
                            ``(iii) $600 if such individual is an 
                        individual for whom a deduction under section 
                        151(c) is allowable to the taxpayer for such 
                        taxable year.
                    ``(B) Limitation to 2 dependents.--Not more than 2 
                individuals may be taken into account by the taxpayer 
                under subparagraph (A)(iii).
                    ``(C) Special rule for married individuals.--In the 
                case of an individual--
                            ``(i) who is married (within the meaning of 
                        section 7703) as of the close of the taxable 
                        year but does not file a joint return for such 
                        year, and
                            ``(ii) who does not live apart from such 
                        individual's spouse at all times during the 
                        taxable year,
                the limitation imposed by subparagraph (B) shall be 
                divided equally between the individual and the 
                individual's spouse unless they agree on a different 
                division.
            ``(3) Coverage month.--For purposes of this subsection--
                    ``(A) In general.--The term `coverage month' means, 
                with respect to an individual, any month if--
                            ``(i) as of the first day of such month 
                        such individual is covered by qualified health 
                        insurance, and
                            ``(ii) the premium for coverage under such 
                        insurance for such month is paid by the 
                        taxpayer.
                    ``(B) Employer-subsidized coverage.--Such term 
                shall not include any month for which such individual 
                participates in any subsidized health plan (within the 
meaning of section 162(l)(2)) maintained by any employer of the 
taxpayer or of the spouse of the taxpayer.
                    ``(C) Cafeteria plan and flexible spending account 
                beneficiaries.--Such term shall not include any month 
                during a taxable year if any amount is not includible 
                in the gross income of the taxpayer for such year under 
                section 106 with respect to--
                            ``(i) a benefit chosen under a cafeteria 
                        plan (as defined in section 125(d)), or
                            ``(ii) a benefit provided under a flexible 
                        spending or similar arrangement.
                    ``(D) Medicare and medicaid.--Such term shall not 
                include any month with respect to an individual if, as 
                of the first day of such month, such individual--
                            ``(i) is entitled to any benefits under 
                        title XVIII of the Social Security Act, or
                            ``(ii) is a participant in the program 
                        under title XIX of such Act.
                    ``(E) Certain other coverage.--Such term shall not 
                include any month during a taxable year with respect to 
                an individual if, at any time during such year, any 
                benefit is provided to such individual under--
                            ``(i) chapter 17 of title 38, United States 
                        Code, or
                            ``(ii) any medical care program under the 
                        Indian Health Care Improvement Act.
                    ``(F) Prisoners.--Such term shall not include any 
                month with respect to an individual if, as of the first 
                day of such month, such individual is imprisoned under 
                Federal, State, or local authority.
                    ``(G) Insufficient presence in united states.--Such 
                term shall not include any month during a taxable year 
                with respect to an individual if such individual is 
                present in the United States on fewer than 183 days 
                during such year (determined in accordance with section 
                7701(b)(7)).
            ``(4) Coordination with deduction for health insurance 
        costs of self-employed individuals.--In the case of a taxpayer 
        who is eligible to deduct any amount under section 162(l) for 
        the taxable year, this section shall apply only if the taxpayer 
        elects not to claim any amount as a deduction under such 
        section for such year.
    ``(c) Qualified Health Insurance.--For purposes of this section, 
the term `qualified health insurance' means insurance sold through the 
Office of Health Insurance under title II of the Health Insurance for 
Americans Act of 1999.
    ``(d) Coordination With Advance Payments of Credit.--
            ``(1) Recapture of excess advance payments.--If any payment 
        is made by the Secretary under section 7527 during any calendar 
        year to a provider of qualified health insurance for an 
        individual, then the tax imposed by this chapter for the 
        individual's last taxable year beginning in such calendar year 
        shall be increased by the aggregate amount of such payments.
            ``(2) Reconciliation of payments advanced and credit 
        allowed.--Any increase in tax under paragraph (1) shall not be 
        treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit (other than the credit 
        allowed by subsection (a)) allowable under this subpart.
    ``(e) Special Rules.--
            ``(1) Coordination with medical expense deduction.--The 
        amount which would (but for this paragraph) be taken into 
        account by the taxpayer under section 213 for the taxable year 
        shall be reduced by the credit (if any) allowed by this section 
        to the taxpayer for such year.
            ``(2) 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.
            ``(3) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 2001, each dollar 
                amount contained in subsection (b)(2)(A) shall be 
                increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the average of the inflation 
                        adjustments for the calendar year in which the 
                        taxable year begins and the preceding 4 
                        calendar years.
                Any increase determined under the preceding sentence 
                shall be rounded to the nearest multiple of $50.
                    ``(B) Inflation adjustment.--For purposes of 
                subparagraph (A), the inflation adjustment for any 
                calendar year is the percentage (if any) by which--
                            ``(i) the weighted average FEHBP cost for 
                        the preceding calendar year, exceeds
                            ``(ii) the weighted average FEHBP cost for 
                        second preceding calendar year.
                    ``(C) Weighted average fehbp cost.--For purposes of 
                subparagraph (B), the weighted average FEHBP cost for 
                any calendar year is the weighted average determined 
                under section 8906(a)(1)(A) of title 5, United States 
                Code, as of October 1 of such calendar year based on 
                the subscription charges that will be in effect during 
                the following contract year.''
    (b) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of such Code (relating to information concerning 
        transactions with other persons) is amended by inserting after 
        section 6050S the following new section:

``SEC. 6050T. RETURNS RELATING TO PAYMENTS FOR QUALIFIED HEALTH 
              INSURANCE.

    ``(a) In General.--Any person who, in connection with a trade or 
business conducted by such person, receives payments during any 
calendar year from any individual for coverage of such individual or 
any other individual under creditable health insurance, shall make the 
return described in subsection (b) (at such time as the Secretary may 
by regulations prescribe) with respect to each individual from whom 
such payments were received.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of the individual 
                from whom payments described in subsection (a) were 
                received,
                    ``(B) the name, address, and TIN of each individual 
                who was provided by such person with coverage under 
                creditable health insurance by reason of such payments 
                and the period of such coverage, and
                    ``(C) such other information as the Secretary may 
                reasonably prescribe.
    ``(c) Creditable Health Insurance.--For purposes of this section, 
the term `creditable health insurance' means qualified health insurance 
(as defined in section 35(c)) other than--
            ``(1) insurance under a subsidized group health plan 
        maintained by an employer, or
            ``(2) to the extent provided in regulations prescribed by 
        the Secretary, any other insurance covering an individual if no 
        credit is allowable under section 35 with respect to such 
        coverage.
    ``(d) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each individual whose name is 
required under subsection (b)(2)(A) to be set forth in such return a 
written statement showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person,
            ``(2) the aggregate amount of payments described in 
        subsection (a) received by the person required to make such 
        return from the individual to whom the statement is required to 
        be furnished, and
            ``(3) the information required under subsection (b)(2)(B) 
        with respect to such payments.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be made.
    ``(e) Returns Which Would Be Required To Be Made by 2 or More 
Persons.--Except to the extent provided in regulations prescribed by 
the Secretary, in the case of any amount received by any person on 
behalf of another person, only the person first receiving such amount 
shall be required to make the return under subsection (a).''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) of such 
                Code (relating to definitions) is amended by 
                redesignating clauses (xi) through (xvii) as clauses 
                (xii) through (xviii), respectively, and by inserting 
                after clause (x) the following new clause:
                            ``(xi) section 6050T (relating to returns 
                        relating to payments for qualified health 
                        insurance),''.
                    (B) Paragraph (2) of section 6724(d) of such Code 
                is amended by striking ``or'' at the end of the next to 
                last subparagraph, by striking the period at the end of 
                the last subparagraph and inserting ``, or'', and by 
adding at the end the following new subparagraph:
                    ``(BB) section 6050T(d) (relating to returns 
                relating to payments for qualified health 
                insurance).''.
            (3) Clerical amendment.--The table of sections for subpart 
        B of part III of subchapter A of chapter 61 of such Code is 
        amended by inserting after the item relating to section 6050S 
        the following new item:

                              ``Sec. 6050T. Returns relating to 
                                        payments for qualified health 
                                        insurance.''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the last item and inserting the following new items:

                              ``Sec. 35. Health insurance costs.
                              ``Sec. 36. Overpayments of tax.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 102. ADVANCE PAYMENT OF CREDIT FOR PURCHASERS OF QUALIFIED HEALTH 
              INSURANCE.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 
(relating to miscellaneous provisions) is amended by adding at the end 
the following new section:

``SEC. 7527. ADVANCE PAYMENT OF HEALTH INSURANCE CREDIT FOR PURCHASERS 
              OF QUALIFIED HEALTH INSURANCE.

    ``(a) General Rule.--In the case of an eligible individual, the 
Secretary shall make payments to the provider of such individual's 
qualified health insurance equal to such individual's qualified health 
insurance credit advance amount with respect to such provider.
    ``(b) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual--
            ``(1) who purchases qualified health insurance (as defined 
        in section 35(c)), and
            ``(2) for whom a qualified health insurance credit 
        eligibility certificate is in effect.
    ``(c) Qualified Health Insurance Credit Eligibility Certificate.--
For purposes of this section, a qualified health insurance credit 
eligibility certificate is a statement furnished by an individual to 
the Secretary which--
            ``(1) certifies that the individual will be eligible to 
        receive the credit provided by section 35 for the taxable year,
            ``(2) estimates the amount of such credit for such taxable 
        year, and
            ``(3) provides such other information as the Secretary may 
        require for purposes of this section.
    ``(d) Qualified Health Insurance Credit Advance Amount.--For 
purposes of this section, the term `qualified health insurance credit 
advance amount' means, with respect to any provider of qualified health 
insurance, the Secretary's estimate of the amount of credit allowable 
under section 35 to the individual for the taxable year which is 
attributable to the insurance provided to the individual by such 
provider.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 of 
such Code is amended by adding at the end the following new item:

                              ``Sec. 7527. Advance payment of health 
                                        insurance credit for purchasers 
                                        of qualified health 
                                        insurance.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2001.

          TITLE II--MAKING HEALTH INSURANCE COVERAGE AVAILABLE

SEC. 201. REQUIREMENT FOR OFFERING BY CARRIERS PARTICIPATING IN THE 
              FEDERAL EMPLOYEES' HEALTH BENEFITS PROGRAM (FEHBP).

    (a) In General.--As a condition for entering into a contract for 
the offering of a health benefits plan under FEHBP on and after January 
1, 2001, if the carrier offering the plan is a health insurance issuer 
the carrier offering the plan--
            (1) shall make available qualified health insurance under 
        this title to qualified individuals;
            (2) shall provide for an annual open enrollment period 
        (consistent with section 202(c)) during which such individuals 
        may enroll in such insurance; and
            (3) shall permit enrollment at other times and may impose 
        (with respect to enrollment at such times) a waiting period of 
        not longer than 60 days.
    (b) Qualified Health Insurance Defined.--For purposes of this 
title, the term ``qualified health insurance'' means, with respect to a 
carrier, health insurance coverage--
            (1) that provides benefits that are the same as (or 
        actuarially equivalent to) the benefits offered by the carrier 
under a health benefits plan under FEHBP;
            (2) for which there is no pre-existing exclusion or waiting 
        period (except as permitted under subsection (a)(3)); and
            (3) for which the premiums charged and quality of care 
        standards are negotiated between the carrier and the Office of 
        Health Insurance established under section 202 and for such 
        which the premiums are established and applied on a uniform, 
        community-rated basis.
    (c) Variation in Benefits.--The benefits offered under qualified 
health insurance may vary from those offered by the carrier under FEHBP 
but only insofar as the Director of the Office of Health Insurance 
determines that such variation does not result in improper favorable 
selection. Such variation shall be permitted to enable the carrier to 
offer health insurance coverage the premium for which is equal to the 
credit amount available under section 35 of the Internal Revenue Code 
of 1986 and which does not require a premium payment by the qualified 
individual.
    (d) Qualified Individual Defined.--For purposes of this title, the 
term ``qualified individual'' means an individual who is eligible for 
an income tax credit under section 35 of the Internal Revenue Code of 
1986 for the purchase of qualified health insurance.
    (e) Additional Definitions.--For purposes of this title:
            (1) Carrier.--The term ``carrier'' has the meaning given 
        such term in section 8901 of title 5, United States Code.
            (2) FEHBP.--The term ``FEHBP'' means the program of health 
        benefits offered under chapter 89 of title 5, United States 
        Code.
            (3) Health insurance coverage; health insurance issuer.--
        The terms ``health insurance coverage'' and ``health insurance 
        issuer'' have the meanings given such terms in paragraphs (1) 
        and (2) of section 9832(b) of the Internal Revenue Code of 
        1986.

SEC. 202. OFFICE OF HEALTH INSURANCE.

    (a) Establishment.--The Secretary of Health and Human Services 
shall establish an Office of Health Insurance (in this title referred 
to as the ``Office''), to be headed by a Director (in this title 
referred to as the ``Director'') appointed by the Secretary.
    (b) Functions.--In relation to carrying out section 201, the Office 
and the Director shall have the same authorities as the Office of 
Personnel Management and the Director of such Office have in carrying 
out FEHBP. The Office shall be responsible for the offering to 
qualified individuals of qualified health insurance made available 
under such section.
    (c) Provision of Information.--The Director shall be responsible 
for the distribution of such information (including information in 
comparative form) and the conduct of a coordinated annual open 
enrollment period in a manner designed to encourage competition and 
facilitate consumer choice among the qualified health insurance offered 
under this title.

SEC. 203. EFFECTIVE DATE.

    This title takes effect on January 1, 2001.
                                 <all>
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