II 

114TH CONGRESS 

1ST SESSION S. 673 

To provide a transition plan for those individuals who may be affected 

by ObamaCare’s unlawful implementation. 

IN THE SENATE OF THE UNITED STATES 

MARCH 4, 2015 

Mr. SASSE introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To provide a transition plan for those individuals who may 

be affected by ObamaCare’s unlawful implementation. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Winding Down 

5 ObamaCare Act’’. 

6 SEC. 2. TRANSITIONAL COVERAGE. 

7 Part C of title XXVII of the Public Health Service 

8 Act (42 U.S.C. 300gg–91 et seq.) is amended— 


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1 (1) by redesignating the second section 2794 

2 (relating to uniform fraud and abuse referral for3 mat) as section 2795; and 

4 (2) by adding at the end the following: 

5 ‘‘SEC. 2796. COBRA-LIKE TRANSITIONAL COVERAGE. 

6 ‘‘(a) PLANS MUST PROVIDE CONTINUATION COV7 ERAGE.— 

8 ‘‘(1) IN GENERAL.—A health insurance issuer 

9 shall provide, in accordance with this section, that 

10 each enrollee in a qualified health plan who would 

11 lose coverage under the plan, or who would no 

12 longer be eligible for a tax credit under section 36B 

13 of the Internal Revenue Code of 1986, as a result 

14 of a qualifying event is entitled, under the plan, to 

15 elect, within the election period, continuation cov16 erage under the plan. 

17 ‘‘(2) COVERAGE.—For purposes of this section, 

18 the term ‘continuation coverage’ means coverage 

19 that meets the following requirements: 

20 ‘‘(A) TYPE OF COVERAGE.—The coverage 

21 must consist of that coverage which the enrollee 

22 was enrolled in at the time of the qualifying 

23 event, except that if such coverage is later 

24 modified under the plan for any group of simi25 larly situated enrollees, such coverage shall also 


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1 be modified in the same manner for all individ2 uals to which this section applies. 

3 ‘‘(B) PREMIUM REQUIREMENT.—The 

4 health insurance issuer may require payment of 

5 a premium for such coverage for any period of 

6 the continuation coverage, except that such pre7 mium— 

8 ‘‘(i) shall not exceed 100 percent of 

9 the premium amount applicable for the 

10 qualified health plan involved on the day 

11 before the qualifying event; 

12 ‘‘(ii) shall not increase at any time 

13 during the period of continuation coverage; 

14 and 

15 ‘‘(iii) may, at the election of the en16 rollee, be paid in monthly installments. 

17 ‘‘(b) QUALIFYING EVENT.—For purposes of this sec18 tion, the term ‘qualifying event’ means, with respect to 

19 any enrollee in a qualified health plan, a determination 

20 by the Supreme Court of the United States in the case 

21 of King v. Burwell (2015) that would result in— 

22 ‘‘(1) the enrollee losing coverage under the 

23 plan; or 


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1 ‘‘(2) making the enrollee ineligible to receive a 

2 tax credit under section 36B of the Internal Revenue 

3 Code of 1986 with respect to such plan. 

4 ‘‘(c) COVERAGE PERIOD.— 

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), the continuation coverage provided for 

7 under this section shall extend for at least the period 

8 beginning on the date of the qualifying event and 

9 ending: 

10 ‘‘(A) The date that is 18 months after the 

11 date of the qualifying event. 

12 ‘‘(2) TERMINATION.—Notwithstanding para13 graph (1), the continuation coverage provided for 

14 under this section shall terminate with respect to an 

15 enrollee on— 

16 ‘‘(A) the date on which the issuer ceases to 

17 provide any qualified health plans to individuals 

18 (if any); and 

19 ‘‘(B) the date on which coverage ceases 

20 under the plan by reason of a failure to make 

21 timely payment of any premium required under 

22 the plan with respect to the enrollee. 

23 ‘‘(d) ELECTION PERIOD.—For purposes of this sec24 tion, the term ‘election period’ means the period which— 


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1 ‘‘(1) begins on the date on which the qualifying 

2 event occurs; and 

3 ‘‘(2) ends 60 days after such date. 

4 ‘‘(e) NOTICE.—The Secretary shall ensure that— 

5 ‘‘(1) a health insurance issuer shall provide, not 

6 later than 10 days after the date of a qualifying 

7 event, written notice to each enrollee in a qualified 

8 health plan of the rights provided under this section 

9 and the deadlines for exercising such rights, includ10 ing a statement that any continuation coverage 

11 under this section shall expire as provided for in 

12 subsection (c); and 

13 ‘‘(2) each enrollee in a qualified health plan is 

14 responsible for notifying the health insurance issuer 

15 involved, within 45 days of receiving the notice 

16 under paragraph (1), of the intent of the enrollee to 

17 exercise the rights provided to the enrollee under 

18 this section.’’. 

19 SEC. 3. PREVENTING BUREAUCRATIC WORKAROUNDS. 

20 (a) IN GENERAL.—The Secretary of Health and 

21 Human Services shall not enter into a new contract with 

22 a State to make available to the State technology that is 

23 otherwise utilized as part of the Federal health insurance 

24 exchange established under section 1321 of the Patient 

25 Protection and Affordable Care Act (42 U.S.C. 18041). 


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1 (b) RULE OF CONSTRUCTION.—Nothing in sub2 section (a) shall be construed to prohibit a State from es3 tablishing a State-based Exchange. 

4 SEC. 4. TRANSITIONAL FINANCIAL ASSISTANCE. 

5 (a) ALLOWANCE OF TAX CREDIT.—Subpart C of 

6 part IV of subchapter A of chapter 1 of the Internal Rev7 enue Code of 1986 is amended by inserting after section 

8 36B the following new section: 

9 ‘‘SEC. 36C. CREDIT FOR TRANSITIONAL COVERAGE. 

10 ‘‘(a) IN GENERAL.—In the case of an eligible indi11 vidual, there shall be allowed as a credit against the tax 

12 imposed by subtitle A an amount equal to the applicable 

13 percentage of the amount paid by the taxpayer for cov14 erage of the taxpayer and qualifying family members 

15 under continuation coverage for eligible coverage months 

16 beginning in the taxable year. 

17 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

18 subsection (a), the applicable percentage is 65 percent re19 duced by 5 percentage points for each coverage month for 

20 which a credit is allowable to the taxpayer under this sec21 tion after the sixth such coverage month. 

22 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 

23 section— 

24 ‘‘(1) IN GENERAL.—The term ‘eligible indi25 vidual’ means any individual who elects to retain 


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1 continuation of coverage under section 2796 of the 

2 Public Health Service Act. 

3 ‘‘(2) IDENTIFICATION REQUIREMENTS.—The 

4 term ‘eligible individual’ shall not include any indi5 vidual for any month unless the policy number asso6 ciated with the qualified health insurance and the 

7 TIN of each eligible individual covered under such 

8 health insurance for such month are included on the 

9 return of tax for the taxable year in which such 

10 month occurs. 

11 ‘‘(d) COVERAGE MONTH.—For purposes of this sec12 tion— 

13 ‘‘(1) IN GENERAL.—The term ‘coverage month’ 

14 means any month if as of the first date of such 

15 month the taxpayer is an eligible individual who does 

16 not have other specified coverage. 

17 ‘‘(2) OTHER SPECIFIED COVERAGE.—For pur18 poses of paragraph (1), an individual has other spec19 ified coverage for any month if, as of the first day 

20 of such month if such individual— 

21 ‘‘(A) is covered under employer-provided 

22 health insurance, 

23 ‘‘(B) is entitled to benefits under part A of 

24 title XVIII of the Social Security Act or is en25 rolled under part B of such title, 


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1 ‘‘(C) is enrolled under the program under 

2 title XIX or XXI of such Act (other than under 

3 section 1928 of such Act), or 

4 ‘‘(D) is entitled to benefits under chapter 

5 55 of title 10, United States Code. 

6 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

7 section— 

8 ‘‘(1) CONTINUATION COVERAGE.—The term 

9 ‘continuation coverage’ means coverage described in 

10 section 2796(a)(2) of the Public Health Service Act. 

11 ‘‘(2) QUALIFYING FAMILY MEMBER.—The term 

12 ‘qualifying family member’ has the meaning given 

13 such term under section 35(d). 

14 ‘‘(f) SPECIAL RULES.— 

15 ‘‘(1) LIMITATION ON AMOUNT OF CREDIT.— 

16 With respect to any taxable year, the amount which 

17 would (but for this subsection) be allowed as a credit 

18 to the taxpayer under subsection (a) shall be re19 duced (but not below zero) by the aggregate amount 

20 paid on behalf of such taxpayer under section 7527A 

21 for months beginning in such taxable year. 

22 ‘‘(2) COORDINATION WITH MEDICAL DEDUC23 TION.—Any amount paid by a taxpayer for insur24 ance to which subsection (a) applies shall not be 

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1 able to the taxpayer as a credit under this chapter 

2 or as a deduction under section 213(a). 

3 ‘‘(3) DENIAL OF CREDIT TO DEPENDENTS.—No 

4 credit shall be allowed under this section to any indi5 vidual with respect to whom a deduction under sec6 tion 151 is allowable to another taxpayer for a tax7 able year beginning in the calendar year in which 

8 such individual’s taxable year begins. 

9 ‘‘(4) MARRIED COUPLES MUST FILE JOINT RE10 TURN.— 

11 ‘‘(A) IN GENERAL.—If the taxpayer is 

12 married at the close of the taxable year, the 

13 credit shall be allowed under subsection (a) only 

14 if the taxpayer and his spouse file a joint return 

15 for the taxable year. 

16 ‘‘(B) MARITAL STATUS; CERTAIN MARRIED

17 INDIVIDUALS LIVING APART.—Rules similar to 

18 the rules of paragraphs (3) and (4) of section 

19 21(e) shall apply for purposes of this para20 graph. 

21 ‘‘(5) VERIFICATION OF COVERAGE, ETC.—The 

22 Secretary shall ensure that procedures are in place 

23 to ensure that the coverage eligibility of the indi24 vidual is verified. 


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1 ‘‘(6) INSURANCE WHICH COVERS OTHER INDI2 VIDUALS; TREATMENT OF PAYMENTS; ETC..—Rules 

3 similar to the rules of paragraphs (7) and (8) of sec4 tion 35(g) shall apply for purposes of this section.’’. 

5 (b) ADVANCE PAYMENT OF CREDIT.—Chapter 77 of 

6 the Internal Revenue Code of 1986 is amended by insert7 ing after section 7527 the following new section: 

8 ‘‘SEC. 7527A. ADVANCE PAYMENT OF TRANSITIONAL CON9 TINUATION COVERAGE CREDIT. 

10 ‘‘(a) IN GENERAL.—The Secretary shall establish a 

11 program for making payments on behalf of taxpayers who 

12 are eligible individuals within the meaning of section 

13 36C(c) to providers of continuation coverage (as defined 

14 in section 36C(e)(1)) for such individuals. 

15 ‘‘(b) LIMITATION.—The Secretary may make pay16 ments under subsection (a) only to the extent that the Sec17 retary determines that the amount of such payments made 

18 on behalf of any taxpayer for any month does not exceed 

19 the applicable percentage under section 36C(b) for the 

20 taxpayer for such month.’’. 

21 (c) INFORMATION REPORTING.— 

22 (1) IN GENERAL.—Subpart B of part III of 

23 subchapter A of chapter 61 of the Internal Revenue 

24 Code of 1986 is amended by inserting after section 

25 6050W the following new section: 


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1 ‘‘SEC. 6050X. RETURNS RELATING TO CONTINUATION COV2 ERAGE CREDIT. 

3 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

4 who is entitled to receive payments for any month of any 

5 calendar year under section 7527A with respect to any in6 dividual shall make the return described in subsection (b) 

7 with respect to each such individual. 

8 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

9 is described in this subsection if such return— 

10 ‘‘(1) is in such form as the Secretary may pre11 scribe, and 

12 ‘‘(2) contains, with respect to each individual 

13 referred to in subsection (a)— 

14 ‘‘(A) the name, address, and TIN of each 

15 such individual, 

16 ‘‘(B) the months for which amounts pay17 ments under section 7527A were received, 

18 ‘‘(C) the amount of each such payment, 

19 ‘‘(D) the type of insurance coverage pro20 vided by such person with respect to such indi21 vidual and the policy number associated with 

22 such coverage, if applicable, 

23 ‘‘(E) the name, address, and TIN of the 

24 spouse and each dependent covered under such 

25 coverage, and 


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1 ‘‘(F) such other information as the Sec2 retary may prescribe. 

3 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID4 UALS WITH RESPECT TO WHOM INFORMATION IS RE5 QUIRED.—Every person required to make a return under 

6 subsection (a) shall furnish to each individual whose name 

7 is required to be set forth in such return a written state8 ment showing— 

9 ‘‘(1) the name and address of the person re10 quired to make such return and the phone number 

11 of the information contact for such person, and 

12 ‘‘(2) the information required to be shown on 

13 the return with respect to such individual. 

14 The written statement required under the preceding sen15 tence shall be furnished on or before January 31 of the 

16 year following the calendar year for which the return 

17 under subsection (a) is required to be made.’’. 

18 (2) ASSESSABLE PENALTIES.— 

19 (A) Subparagraph (B) of section 

20 6724(d)(1) of such Code is amended by striking 

21 ‘‘or’’ at the end of clause (xxiv), by striking 

22 ‘‘and’’ at the end of clause (xxv) and inserting 

23 ‘‘or’’, and by inserting after clause (xxiii) the 

24 following new clause: 


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1 ‘‘(xxvii) section 6050X (relating to re2 turns relating to qualified health insurance 

3 credit), and’’. 

4 (B) Paragraph (2) of section 6724(d) of 

5 such Code is amended by striking ‘‘or’’ at the 

6 end of subparagraph (GG), by striking the pe7 riod at the end of subparagraph (HH) and in8 serting ‘‘, or’’, and by inserting after subpara9 graph (HH) the following new subparagraph: 

10 ‘‘(II) section 6050X (relating to returns 

11 relating to qualified health insurance credit).’’. 

12 (d) CONFORMING AMENDMENTS.— 

13 (1) Paragraph (2) of section 1324(b) of title 

14 31, United States Code, is amended by inserting 

15 ‘‘36C,’’ after ‘‘36B,’’. 

16 (2) The table of sections for subpart C of part 

17 IV of subchapter A of chapter 1 of the Internal Rev18 enue Code of 1986 is amended by inserting after the 

19 item relating to section 36B the following new item: 

‘‘Sec. 36C. Credit for continuation coverage under a qualified health plan.’’. 

20 (3) The table of sections for chapter 77 of such 

21 Code is amended by inserting after the item relating 

22 to section 7527 the following new item: 

‘‘Sec. 7527A. Advance payment of continuation coverage credit.’’. 

23 (4) The table of sections for subpart B of part 

24 III of subchapter A of chapter 61 of such Code is 


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1 amended by adding at the end the following new 

2 item: 

‘‘Sec. 6050X. Returns relating to continuation coverage credit.’’. 

3 (e) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to coverage months beginning after 

5 the date of a qualifying event determined under section 

6 2796(b) of the Public Health Service Act (as added by 

7 section 2) with respect to the individual. 

8 SEC. 5. STOPPING BUREAUCRATS FROM SPENDING TAX9 PAYER DOLLARS. 

10 (a) IN GENERAL.—Section 1115 of the Social Secu11 rity Act (42 U.S.C. 1315) is amended by adding at the 

12 end the following: 

13 ‘‘(g) No experimental, pilot, or demonstration project 

14 undertaken under subsection (a) to promote the objectives 

15 of title XIX shall be approved, renewed, or extended un16 less— 

17 ‘‘(1) the Secretary establishes spending limits 

18 for the project (which may be annual per population19 based limits, aggregate limits (annual or for the 

20 waiver period), or a combination thereof) only by ap21 plying benchmark growth rates that are determined 

22 based on the average of the most recent estimates 

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1 gressional Budget Office and the Director of the Of2 fice of Management and Budget, respectively; and 

3 ‘‘(2) the establishment and application of such 

4 spending limits to the project and the estimated sav5 ings resulting from the project are reviewed and cer6 tified by an individual who is a member of the 

7 American Academy of Actuaries or the Society of 

8 Actuaries, using generally accepted actuarial prin9 ciples and methodologies, and who is not a Federal 

10 officer or employee.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 subsection (a) takes effect on the date of enactment of 

13 this Act and applies to Medicaid waivers approved, re14 newed, or extended under section 1115 of the Social Secu15 rity Act (42 U.S.C. 1315) after that date. 

Æ 


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