I 

117TH CONGRESS 

1ST SESSION H. R. 3434 

To amend titles XVIII and XIX of the Social Security Act to make improvements to the treatment of the United States territories under the Medicare and Medicaid programs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 20, 2021 

Ms. PLASKETT (for herself, Miss GONZA ́LEZ-COLO ́N, Mrs. RADEWAGEN, Mr. 

SABLAN, Mr. SAN NICOLAS, Ms. CLARKE of New York, Mr. GRIJALVA, 

Ms. PRESSLEY, Mr. SOTO, Mr. TORRES of New York, and Ms. 

VELA ́ZQUEZ) introduced the following bill; which was referred to the 

Committee on Energy and Commerce, and in addition to the Committee 

on Ways and Means, 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 titles XVIII and XIX of the Social Security Act 

to make improvements to the treatment of the United 

States territories under the Medicare and Medicaid programs, and for other purposes. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Territories Health Equity Act of 2021’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MEDICAID 

Sec. 101. Elimination of general medicaid funding limitations (‘‘cap’’) for territories. 

Sec. 102. Elimination of specific Federal medical assistance percentage 

(FMAP) limitation for territories. 

Sec. 103. Permitting Medicaid DSH allotments for territories. 

TITLE II—MEDICARE 

Subtitle A—Part A 

Sec. 201. Calculation of Medicare DSH payments for IPPS hospitals in Puerto 

Rico. 

Sec. 202. Rebasing target amount for hospitals in territories. 

Sec. 203. Medicare DSH target adjustment for hospitals in territories. 

Subtitle B—Part B 

Sec. 211. Eliminating late enrollment penalties under part B of the Medicare 

program for certain individuals residing in Puerto Rico. 

Subtitle C—Medicare Advantage (Part C) 

Sec. 221. Adjustment in benchmark for low-base payment counties in Puerto 

Rico. 

Subtitle D—Part D 

Sec. 231. Automatic eligibility of certain low-income territorial residents for 

premium and cost-sharing subsidies under the Medicare program; sunset of enhanced allotment program. 

TITLE III—MISCELLANEOUS 

Sec. 301. Medicaid and CHIP territory transparency and information. 

Sec. 302. Report on exclusion of territories from Exchanges. 

Sec. 303. Access to coverage for individuals in certain areas without any available Exchange plans. 

3 TITLE I—MEDICAID 

4 SEC. 101. ELIMINATION OF GENERAL MEDICAID FUNDING 

5 LIMITATIONS (‘‘CAP’’) FOR TERRITORIES. 

6 (a) IN GENERAL.—Section 1108 of the Social Secu7 rity Act (42 U.S.C. 1308) is amended— 


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1 (1) in subsection (f), in the matter preceding 

2 paragraph (1), by striking ‘‘subsections (g) and (h)’’ 

3 and inserting ‘‘subsections (g), (h), and (i)’’; 

4 (2) in subsection (g)(2), in the matter pre5 ceding subparagraph (A), by inserting ‘‘subsection 

6 (i) and’’ after ‘‘subject to’’; and 

7 (3) by adding at the end the following new sub8 section: 

9 ‘‘(i) SUNSET OF MEDICAID FUNDING LIMITATIONS

10 FOR PUERTO RICO, THE VIRGIN ISLANDS, GUAM, THE

11 NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA.— 

12 Subsections (f) and (g) shall not apply to Puerto Rico, 

13 the Virgin Islands, Guam, the Northern Mariana Islands, 

14 and American Samoa beginning with fiscal year 2022.’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) Section 1902(j) of the Social Security Act 

17 (42 U.S.C. 1396a(j)) is amended by striking ‘‘, the 

18 limitation in section 1108(f),,’’. 

19 (2) Section 1903(u) of the Social Security Act 

20 (42 U.S.C. 1396b(u)) is amended by striking para21 graph (4). 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply beginning with fiscal year 2022. 


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1 SEC. 102. ELIMINATION OF SPECIFIC FEDERAL MEDICAL 

2 ASSISTANCE PERCENTAGE (FMAP) LIMITA3 TION FOR TERRITORIES. 

4 Section 1905(b) of the Social Security Act (42 U.S.C. 

5 1396d(b)) is amended, in clause (2), by inserting ‘‘for fis6 cal years before fiscal year 2022’’ after ‘‘American 

7 Samoa’’. 

8 SEC. 103. PERMITTING MEDICAID DSH ALLOTMENTS FOR 

9 TERRITORIES. 

10 Section 1923(f) of the Social Security Act (42 U.S.C. 

11 1396r–4(f)) is amended— 

12 (1) in paragraph (6), by adding at the end the 

13 following new subparagraph: 

14 ‘‘(C) TERRITORIES.— 

15 ‘‘(i) FISCAL YEAR 2022.—For fiscal 

16 year 2022, the DSH allotment for Puerto 

17 Rico, the Virgin Islands, Guam, the North18 ern Mariana Islands, and American Samoa 

19 shall bear the same ratio to $300,000,000 

20 as the ratio of the number of individuals 

21 who are low-income or uninsured and re22 siding in such respective territory (as esti23 mated from time to time by the Secretary) 

24 bears to the sums of the number of such 

25 individuals residing in all of the territories. 


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1 ‘‘(ii) SUBSEQUENT FISCAL YEAR.— 

2 For each subsequent fiscal year, the DSH 

3 allotment for each such territory is subject 

4 to an increase in accordance with para5 graph (3).’’; and 

6 (2) in paragraph (9), by inserting before the pe7 riod at the end the following: ‘‘, and includes, begin8 ning with fiscal year 2022, Puerto Rico, the Virgin 

9 Islands, Guam, the Northern Mariana Islands, and 

10 American Samoa’’. 

11 TITLE II—MEDICARE 

12 Subtitle A—Part A 

13 SEC. 201. CALCULATION OF MEDICARE DSH PAYMENTS FOR 

14 IPPS HOSPITALS IN PUERTO RICO. 

15 Section 1886(d)(9)(D)(iii) of the Social Security Act 

16 (42 U.S.C. 1395ww(d)(9)(D)(iii)) is amended to read as 

17 follows: 

18 ‘‘(iii) Subparagraph (F) (relating to 

19 disproportionate share payments), includ20 ing application of subsection (r), except 

21 that for this purpose— 

22 ‘‘(I) the sum described in clause 

23 (ii) of this subparagraph shall be sub24 stituted for the sum referred to in 

25 paragraph (5)(F)(ii)(I); and 


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1 ‘‘(II) for discharges occurring on 

2 or after October 1, 2021, subclause 

3 (I) of paragraph (5)(F)(vi) shall be 

4 applied by substituting for the numer5 ator described in such subclause the 

6 number of subsection (d) Puerto Rico 

7 hospital’s patient days for the cost re8 porting period involved which were 

9 made up of patients who (for such 

10 days) were entitled to benefits under 

11 part A of this title and were— 

12 ‘‘(aa) entitled to supple13 mentary security income benefits 

14 (excluding any State supplemen15 tation) under title XVI; 

16 ‘‘(bb) eligible for medical as17 sistance under a State plan 

18 under title XIX; or 

19 ‘‘(cc) receiving aid or assist20 ance under any plan of the State 

21 approved under title I, X, XIV, 

22 or XVI.’’. 


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1 SEC. 202. REBASING TARGET AMOUNT FOR HOSPITALS IN 

2 TERRITORIES. 

3 Section 1886(b)(3) of the Social Security Act (42 

4 U.S.C. 1395ww(b)(3)) is amended by adding at the end 

5 the following new subparagraph: 

6 ‘‘(M)(i) For each cost reporting period be7 ginning on or after October 1, 2021, in the case 

8 of a hospital located in a territory of the United 

9 States, there shall be substituted for the target 

10 amount otherwise determined under subpara11 graph (A) the rebased target amount (as de12 fined in clause (ii)), if such substitution results 

13 in an amount of payment under this section to 

14 the hospital for such period that is greater than 

15 the amount of payment that would be made 

16 under this section to the hospital for such pe17 riod if this subparagraph were not to apply. 

18 ‘‘(ii) For purposes of this subparagraph, 

19 the term ‘rebased target amount’ has the mean20 ing given the term ‘target amount’ in subpara21 graph (A), except that— 

22 ‘‘(I) there shall be substituted for the 

23 preceding 12-month cost reporting period 

24 the 12-month cost reporting period begin25 ning during fiscal year 2015 (or, at the opVerDate Sep 11 2014 05:29 Jun 22, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3434.IH H3434

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1 tion of the hospital, beginning during fiscal 

2 year 2017); 

3 ‘‘(II) any reference in subparagraph 

4 (A)(i) to the ‘first such cost reporting pe5 riod’ is deemed a reference to the first cost 

6 reporting period following the 12-month 

7 cost reporting period beginning during fis8 cal year 2015 (or, at the option of the hos9 pital, beginning during fiscal year 2017); 

10 and 

11 ‘‘(III) the applicable percentage in12 crease shall only be applied under subpara13 graph (B)(ii) for cost reporting periods be14 ginning on or after October 1, 2021. 

15 ‘‘(iii) Nothing in this subparagraph shall 

16 affect any request by a hospital for a new tar17 get amount for any cost reporting period begin18 ning during a fiscal year after fiscal year 

19 2021.’’. 

20 SEC. 203. MEDICARE DSH TARGET ADJUSTMENT FOR HOS21 PITALS IN TERRITORIES. 

22 Section 1886(b)(3) of the Social Security Act (42 

23 U.S.C. 1395ww(b)(3)), as amended by section 202, is fur24 ther amended by adding at the end the following new sub25 paragraph: 


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1 ‘‘(N)(i) For each cost reporting period be2 ginning on or after October 1, 2021, in the case 

3 of a hospital that is located in a territory of the 

4 United States other than Puerto Rico and that 

5 would be a subsection (d) hospital if it were lo6 cated in one of the 50 States, the target 

7 amount shall be increased by— 

8 ‘‘(I) in the case that such hospital has 

9 a disproportionate patient percentage of 

10 not less than 15 percent and not greater 

11 than 40 percent, 10 percent; and 

12 ‘‘(II) in the case that such hospital 

13 has a disproportionate patient percentage 

14 of greater than 40 percent, 10 percent plus 

15 60 percent of the number of percentage 

16 points by which such hospital’s dispropor17 tionate patient percentage exceeds 40 per18 cent. 

19 ‘‘(ii) For purposes of this subparagraph, 

20 the term ‘disproportionate patient percentage’ 

21 has the meaning given such term in subsection 

22 (d)(5)(F)(vi), except that in applying such 

23 meaning any reference under such subsection to 

24 individuals entitled to supplementary security 

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1 poses of this subparagraph to include individ2 uals— 

3 ‘‘(I) eligible for medical assistance 

4 under a State plan under title XIX; or 

5 ‘‘(II) receiving aid or assistance under 

6 any plan of the territory approved under 

7 title I, X, XIV, or XVI.’’. 

8 Subtitle B—Part B 

9 SEC. 211. ELIMINATING LATE ENROLLMENT PENALTIES 

10 UNDER PART B OF THE MEDICARE PROGRAM 

11 FOR CERTAIN INDIVIDUALS RESIDING IN 

12 PUERTO RICO. 

13 (a) IN GENERAL.—Section 1839(b) of the Social Se14 curity Act (42 U.S.C. 1395r(b)) is amended in the second 

15 sentence by inserting ‘‘or months occurring in the 5-year 

16 period beginning on the date on which the individual be17 comes entitled to benefits under part A if such individual 

18 was residing in Puerto Rico as of such date and such date 

19 is after the date that is 4 years before the date of the 

20 enactment of the Territories Health Equity Act of 2021’’ 

21 before the period at the end of such sentence. 

22 (b) APPLICATION.—The amendment made by sub23 section (a) shall apply with respect to premiums paid for 

24 months beginning on or after the date of the enactment 

25 of this Act. 


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1 Subtitle C—Medicare Advantage 

2 (Part C) 

3 SEC. 221. ADJUSTMENT IN BENCHMARK FOR LOW-BASE 

4 PAYMENT COUNTIES IN PUERTO RICO. 

5 Section 1853(n) of the Social Security Act (42 U.S.C. 

6 1395w–23(n)) is amended— 

7 (1) in paragraph (1), by striking ‘‘and (5)’’ and 

8 inserting ‘‘(5), and (6)’’; 

9 (2) in paragraph (4), by striking ‘‘In no case’’ 

10 and inserting ‘‘Subject to paragraph (6), in no 

11 case’’; and 

12 (3) by adding at the end the following new 

13 paragraph: 

14 ‘‘(6) SPECIAL RULES FOR BLENDED BENCH15 MARK AMOUNT FOR TERRITORIES.— 

16 ‘‘(A) IN GENERAL.—Subject to paragraph 

17 (2), the blended benchmark amount for an area 

18 in a territory for a year (beginning with 2022) 

19 shall not be less than 80 percent of the national 

20 average of the base payment amounts specified 

21 in subparagraph (2)(E) for such year for areas 

22 within the 50 States and the District of Colum23 bia. 

24 ‘‘(B) LIMITATION.—In no case shall the 

25 blended benchmark amount for an area in a 


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1 territory for a year under subparagraph (A) ex2 ceed the lowest blended benchmark amount for 

3 any area within the 50 States and the District 

4 of Columbia for such year.’’. 

5 Subtitle D—Part D 

6 SEC. 231. AUTOMATIC ELIGIBILITY OF CERTAIN LOW-IN7 COME TERRITORIAL RESIDENTS FOR PRE8 MIUM AND COST-SHARING SUBSIDIES UNDER 

9 THE MEDICARE PROGRAM; SUNSET OF EN10 HANCED ALLOTMENT PROGRAM. 

11 (a) AUTOMATIC ELIGIBILITY OF CERTAIN LOW-IN12 COME TERRITORIAL RESIDENTS FOR PREMIUM AND

13 COST-SHARING SUBSIDIES UNDER THE MEDICARE PRO14 GRAM.— 

15 (1) IN GENERAL.—Section 1860D–14(a)(3) of 

16 the Social Security Act (42 U.S.C. 1395w– 

17 114(a)(3)) is amended— 

18 (A) in subparagraph (B)(v)— 

19 (i) in subclause (I), by striking ‘‘and’’ 

20 at the end; 

21 (ii) in subclause (II), by striking the 

22 period and inserting ‘‘; and’’; and 

23 (iii) by inserting after subclause (II) 

24 the following new subclause: 


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1 ‘‘(III) with respect to plan years 

2 beginning on or after January 1, 

3 2022, shall provide that any part D 

4 eligible individual who is enrolled for 

5 medical assistance under the State 

6 Medicaid plan of a territory (as de7 fined in section 1935(f)) under title 

8 XIX (or a waiver of such a plan) shall 

9 be treated as a subsidy eligible indi10 vidual described in paragraph (1).’’; 

11 and 

12 (B) in subparagraph (F), by adding at the 

13 end the following new sentence: ‘‘The previous 

14 sentence shall not apply with respect to eligi15 bility determinations for premium and cost16 sharing subsidies under this section made on or 

17 after January 1, 2022.’’. 

18 (2) CONFORMING AMENDMENT.—Section 

19 1860D–31(j)(2)(D) of the Social Security Act (42 

20 U.S.C. 1395w–141(j)(2)(D)) is amended by adding 

21 at the end the following new sentence: ‘‘The previous 

22 sentence shall not apply with respect to amounts 

23 made available to a State under this paragraph on 

24 or after January 1, 2022.’’. 


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1 (b) SUNSET OF ENHANCED ALLOTMENT PRO2 GRAM.— 

3 (1) IN GENERAL.—Section 1935(e) of the So4 cial Security Act (42 U.S.C. 1396u–5(e)) is amend5 ed— 

6 (A) in paragraph (1)(A), by inserting after 

7 ‘‘such State’’ the following: ‘‘before January 1, 

8 2022’’; and 

9 (B) in paragraph (3)— 

10 (i) in subparagraph (A), in the matter 

11 preceding clause (i), by inserting after ‘‘a 

12 year’’ the following: ‘‘(before 2022)’’; and 

13 (ii) in subparagraph (B)(iii), by strik14 ing ‘‘a subsequent year’’ and inserting 

15 ‘‘each of fiscal years 2008 through 2021’’. 

16 (2) TERRITORY DEFINED.—Section 1935 of the 

17 Social Security Act (42 U.S.C. 1396u–5) is amended 

18 by adding at the end the following new subsection: 

19 ‘‘(f) TERRITORY DEFINED.—In this section, the term 

20 ‘territory’ means Puerto Rico, the Virgin Islands, Guam, 

21 the Northern Mariana Islands, and American Samoa.’’. 


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1 TITLE III—MISCELLANEOUS 

2 SEC. 301. MEDICAID AND CHIP TERRITORY TRANSPARENCY 

3 AND INFORMATION. 

4 (a) PUBLICATION OF INFORMATION ON FEDERAL

5 EXPENDITURES UNDER MEDICAID AND CHIP IN THE

6 TERRITORIES.—Not later than 180 days after the date 

7 of the enactment of this Act, the Secretary of Health and 

8 Human Services shall publish, and periodically update, on 

9 the internet site of the Centers for Medicare & Medicaid 

10 Services information on Medicaid and CHIP carried out 

11 in the territories of the United States. Such information 

12 shall include, with respect to each such territory— 

13 (1) the income levels established by the terri14 tory for purposes of eligibility of an individual to re15 ceive medical assistance under Medicaid or child 

16 health assistance under CHIP; 

17 (2) the number of individuals enrolled in Med18 icaid and CHIP in such territory; 

19 (3) any State plan amendments in effect to 

20 carry out Medicaid or CHIP in such territory; 

21 (4) any waiver of the requirements of title XIX 

22 or title XXI issued by the Secretary to carry out 

23 Medicaid or CHIP in the territory, including a waiv24 er under section 1115 of the Social Security Act (42 

25 U.S.C. 1315), any application for such a waiver, and 


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1 any documentation related to such application (in2 cluding correspondence); 

3 (5) the amount of the Federal and non-Federal 

4 share of expenditures under Medicaid and CHIP in 

5 such territory; 

6 (6) the systems in place for the furnishing of 

7 health care items and services under Medicaid and 

8 CHIP in such territory; 

9 (7) the design of CHIP in such territory; and 

10 (8) other information regarding the carrying 

11 out of Medicaid and CHIP in the territory that is 

12 published on such internet site with respect to car13 rying out Medicaid and CHIP in each State and the 

14 District of Columbia. 

15 (b) DEFINITIONS.—In this section: 

16 (1) CHIP.—The term ‘‘CHIP’’ means the 

17 State Children’s Health Insurance Program under 

18 title XXI of the Social Security Act. 

19 (2) MEDICAID.—The term ‘‘Medicaid’’ means 

20 the Medicaid program under title XIX of the Social 

21 Security Act. 

22 (3) TERRITORY.—The term ‘‘territory of the 

23 United States’’ includes Puerto Rico, the Virgin Is24 lands of the United States, Guam, the Northern 

25 Mariana Islands, and American Samoa. 


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1 SEC. 302. REPORT ON EXCLUSION OF TERRITORIES FROM 

2 EXCHANGES. 

3 (a) IN GENERAL.—Not later than February 1, 2022, 

4 the Secretary of Health and Human Services shall submit 

5 to Congress a report that details the adverse impacts in 

6 each territory from the practical exclusion of the terri7 tories from the provisions of part II of subtitle D of title 

8 I of the Patient Protection and Affordable Care Act inso9 far as such provisions provide for the establishment of an 

10 American Health Benefit Exchange or the administration 

11 of a federally facilitated Exchange in each State and in 

12 the District of Columbia for the purpose of making health 

13 insurance more affordable and accessible for individuals 

14 and small businesses. 

15 (b) INFORMATION IN REPORT.—The report shall in16 clude information on the following: 

17 (1) An estimate of the total number of unin18 sured and underinsured individuals residing in each 

19 territory with respect to health insurance coverage. 

20 (2) A description of the number of health insur21 ance issuers in each territory and the health insur22 ance plans these issuers offer. 

23 (3) An estimate of the number of individuals re24 siding in each territory who are denied premium and 

25 cost-sharing assistance that would otherwise be 

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1 erage through an Exchange if they resided in one of 

2 the 50 States or in the District of Columbia. 

3 (4) An estimate of the amount of Federal as4 sistance described in paragraph (3) that is not being 

5 made available to residents of each territory. 

6 (5) An estimate of the number of small employ7 ers in each territory that would be eligible to pur8 chase health insurance coverage through a Small 

9 Business Health Options Program (SHOP) Market10 place that would operate as part of an Exchange if 

11 the employers were in one of the 50 States or in the 

12 District of Columbia. 

13 SEC. 303. ACCESS TO COVERAGE FOR INDIVIDUALS IN CER14 TAIN AREAS WITHOUT ANY AVAILABLE EX15 CHANGE PLANS. 

16 Part 2 of subtitle D of title I of the Patient Protec17 tion and Affordable Care Act (42 U.S.C. 18031 et seq.) 

18 is amended by adding at the end the following: 

19 ‘‘SEC. 1314. ACCESS TO COVERAGE FOR INDIVIDUALS IN 

20 CERTAIN AREAS WITHOUT ANY AVAILABLE 

21 EXCHANGE PLANS. 

22 ‘‘(a) IN GENERAL.— 

23 ‘‘(1) COVERAGE THROUGH DC EXCHANGE.— 

24 Not later than 3 months after the date of enactment 

25 of this section, the Secretary, in consultation with 


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1 the Secretary of the Treasury and the Director of 

2 the Office of Personnel Management, shall establish 

3 a mechanism to ensure that, for any plan year be4 ginning on or after the date described in subsection 

5 (c), any individual described in paragraph (2) has 

6 access to health insurance coverage which is at least 

7 as broad as the coverage available to Members of 

8 Congress and congressional staff (as defined in sec9 tion 1312(d)(3)(D)) through the Exchange operating 

10 in the District of Columbia. Such individuals shall 

11 be eligible for any premium tax credit under section 

12 36B of the Internal Revenue Code of 1986, reduced 

13 cost sharing under section 1402, and advance deter14 mination and payment of such credits or such reduc15 tions under section 1412 to be administered by the 

16 Secretary, in consultation with the Secretary of the 

17 Treasury and the Director of the Office of Personnel 

18 Management. The District of Columbia, its resi19 dents, and small businesses shall be held harmless 

20 from any increased costs resulting from the enact21 ment of this section. 

22 ‘‘(2) INDIVIDUAL DESCRIBED.—An individual 

23 described in this paragraph is any individual who— 

24 ‘‘(A) is not eligible to enroll in an em25 ployer-sponsored health plan (excluding such a 


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1 plan that would not be considered minimum es2 sential coverage due to the application of sub3 paragraph (C) of section 36B(c)(2) of the In4 ternal Revenue Code of 1986 if such subpara5 graph applied to such plan); and 

6 ‘‘(B) is a bona fide resident of any posses7 sion of the United States (as determined under 

8 section 937(a) of such Code) in which the Sec9 retary certifies that no qualified health plan is 

10 offered through an Exchange established under 

11 this title. 

12 ‘‘(3) POSSESSION OF THE UNITED STATES.— 

13 For purposes of this section, the term ‘possession of 

14 the United States’ shall include such possessions as 

15 are specified in section 937(a)(1) of the Internal 

16 Revenue Code of 1986. 

17 ‘‘(b) TREATMENT OF POSSESSIONS.— 

18 ‘‘(1) PAYMENTS TO POSSESSIONS.— 

19 ‘‘(A) MIRROR CODE POSSESSION.—The 

20 Secretary of the Treasury shall periodically (but 

21 not less frequently than annually) pay to each 

22 possession of the United States with a mirror 

23 code tax system amounts equal to the loss to 

24 that possession by reason of the application of 

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1 graph (2)) with respect to taxable years begin2 ning after the date described in subsection (c). 

3 Such amounts shall be determined by the Sec4 retary of the Treasury based on information 

5 provided by the government of the respective 

6 possession. 

7 ‘‘(B) OTHER POSSESSIONS.—The Sec8 retary of the Treasury shall periodically (but 

9 not less frequently than annually) pay to each 

10 possession of the United States which does not 

11 have a mirror code tax system amounts esti12 mated by the Secretary of the Treasury as 

13 being equal to the aggregate benefits that would 

14 have been provided to residents of such posses15 sion by reason of the application of this section 

16 for any taxable years beginning after the date 

17 described in subsection (c) if a mirror code tax 

18 system had been in effect in such possession. 

19 The preceding sentence shall not apply with re20 spect to any possession of the United States un21 less such possession has a plan, which has been 

22 approved by the Secretary of the Treasury, 

23 under which such possession will promptly dis24 tribute such payments to the residents of such 

25 possession. 


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1 ‘‘(2) COORDINATION WITH CREDIT ALLOWED

2 AGAINST UNITED STATES INCOME TAXES.—No cred3 it shall be allowed against United States income 

4 taxes for any taxable year under section 36B of the 

5 Internal Revenue Code of 1986 to any person— 

6 ‘‘(A) to whom a credit is allowed against 

7 taxes imposed by the possession by reason of 

8 this section (determined without regard to this 

9 paragraph) for such taxable year, or 

10 ‘‘(B) who is eligible for a payment under 

11 a plan described in paragraph (1)(B) with re12 spect to such taxable year. 

13 ‘‘(3) MIRROR CODE TAX SYSTEM.—For pur14 poses of this subsection, the term ‘mirror code tax 

15 system’ means, with respect to any possession of the 

16 United States, the income tax system of such posses17 sion if the income tax liability of the residents of 

18 such possession under such system is determined by 

19 reference to the income tax laws of the United 

20 States as if such possession were the United States. 

21 ‘‘(4) TREATMENT OF PAYMENTS.—For pur22 poses of section 1324(b)(2) of title 31, United 

23 States Code, or any similar rule of law, the pay24 ments under this subsection shall be treated in the 

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1 lowed under section 36B of the Internal Revenue 

2 Code of 1986. 

3 ‘‘(c) DATE DESCRIBED.—The date described in this 

4 subsection is the date on which the Secretary establishes 

5 the mechanism described in subsection (a)(1).’’. 

Æ 


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