with respect to a health benefits plan under chapter 
89 of title 5, United States Code. 
‘‘(c) MAXIMUM PREMIUM AMOUNT.—The amount 
paid for qualified health insurance taken into account 
under subsection (a) for any taxable year shall not exceed 
an amount equal to the capped premium established for 
the applicable State under section 404(c)(10) of the 
Health Coverage, Affordability, Responsibility, and Equity 
Act of 2007 for the calendar year in which the such tax-
able year begins. 
‘‘(d) ELIGIBLE COVERAGE MONTH.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘eligible coverage 
month’ means any month if during such month the 
taxpayer or a qualifying family member— 
‘‘(A) is an eligible low-income individual; 
‘‘(B) is covered by qualified health insur-
ance, the premium for which is paid by the tax-
payer (or on behalf of the taxpayer); 
‘‘(C) does not have other specified cov-
erage; and 
‘‘(D) is not imprisoned under Federal, 
State, or local authority. 
‘‘(2) JOINT RETURNS.—In the case of a joint 
return, the requirement of paragraph (1)(A) shall be 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
treated as met with respect to any month if at least 
1 spouse satisfies such requirement. 
‘‘(e) ELIGIBLE LOW-INCOME INDIVIDUAL.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘eligible low-in-
come individual’ means an individual— 
‘‘(A) who has not attained age 65; 
‘‘(B) whose adjusted gross income does not 
exceed 200 percent of the poverty level; 
‘‘(C) who is ineligible for the medicaid pro-
gram or the State children’s health insurance 
program under title XIX or XXI of the Social 
Security Act (other than under section 1928 of 
such Act); 
‘‘(D) who has limited access to health in-
surance coverage through the employer of the 
individual or a member of the individual’s fam-
ily (either because the employer does not offer 
such coverage to the individual or because the 
employee contribution for such coverage would 
exceed an amount equal to 5 percent of the 
household income of such individual, as deter-
mined in accordance with paragraph (2)); 
‘‘(E) who applies for a credit under this 
section not later than 60 days after receiving 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
notice of potential eligibility for such credit, 
under procedures established by the Secretary; 
and 
‘‘(F) who resides in a State where the eli-
gibility standards and methodologies applied 
under the medicaid and State children’s health 
insurance programs with respect to individuals 
residing in the State who have not attained age 
65 are not more restrictive (as determined 
under section 1902(a)(10)(C)(i)(III) of the So-
cial Security Act) than the standards and meth-
odologies that applied under such programs 
with respect to such individuals as of July 1, 
2007. 
‘‘(2) DETERMINATION OF ELIGIBILITY.— 
‘‘(A) SCHIP AGENCY.— 
‘‘(i) IN GENERAL.—The determination 
of whether an individual is an eligible low- 
income individual for purposes of this sec-
tion shall be made by the State agency 
with responsibility for determining the eli-
gibility of individuals for assistance under 
the State children’s health insurance pro-
gram under title XXI of the Social Secu-
rity Act. 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
‘‘(ii) APPLICATION
OF
SCREEN
AND 
ENROLL REQUIREMENTS.— 
‘‘(I) IN
GENERAL.—The State 
agency referred to in clause (i) shall 
ensure that individuals applying for a 
certificate of eligibility are screened 
for potential eligibility under the med-
icaid and State children’s health in-
surance programs and that individuals 
found through screening to be eligible 
for assistance under such a program 
are enrolled for assistance under the 
appropriate program. To the max-
imum extent possible pursuant to 
State options under title XIX of the 
Social Security Act, and notwith-
standing any otherwise applicable pro-
vision of, or State plan provision 
under, such title, screening and enroll-
ment activities described in the pre-
vious sentence shall use the proce-
dures employed by the State chil-
dren’s health insurance program oper-
ated under title XXI of the Social Se-
curity Act, if such procedures differ 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
from those ordinarily employed by the 
State program operated under title 
XIX of such Act. 
‘‘(II) NO DELAY OF ISSUANCE OF 
CERTIFICATE.—The application of the 
screen and enroll requirements of 
clause (i) shall not delay the issuance 
of a certificate of eligibility to an indi-
vidual for purposes of this section. 
The State agency referred to in clause 
(i) shall adopt procedures to ensure 
that an individual issued a certificate 
of eligibility under this paragraph who 
is subsequently determined to be eligi-
ble for the State medicaid program 
under title XIX of the Social Security 
Act or the State children’s health in-
surance program under XXI of such 
Act shall be enrolled in the appro-
priate program without an interrup-
tion in the individual’s health insur-
ance coverage. 
‘‘(B) STANDARDS.— 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
‘‘(i) IN
GENERAL.—An individual is 
an eligible low-income individual for pur-
poses of this section if— 
‘‘(I) on the basis of the individ-
ual’s tax return for the preceding tax-
able year, the individual meets the re-
quirements of paragraph (1)(B), and 
the individual otherwise satisfies the 
requirements of paragraph (1), or 
‘‘(II) the individual is determined 
to satisfy the requirements of para-
graph (1) after the application of the 
same 
eligibility 
methodologies 
as 
would apply for purposes of deter-
mining the eligibility of an individual 
for assistance under the State chil-
dren’s 
health 
insurance 
program 
under title XXI of the Social Security 
Act. 
‘‘(ii) APPLICATION OF SCHIP INCOME 
DETERMINATION
METHODOLOGIES.—For 
purposes of clause (i)(II), determinations 
of income levels shall be made using the 
methodologies described in that clause, to 
the 
extent 
such 
methodologies 
for 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
ascertaining household income differ from 
any otherwise applicable method for deter-
mining adjusted gross income or the defini-
tion of adjusted gross income. 
‘‘(C) CERTIFICATE OF ELIGIBILITY.— 
‘‘(i) IN GENERAL.—An individual who 
is determined to be an eligible low-income 
individual shall be issued a certificate of 
eligibility by the State agency referred to 
in subparagraph (A). 
‘‘(ii) CERTIFICATE
AMOUNT.—Such 
certificate shall indicate the applicable per-
centage of the amount paid for coverage 
under qualified health insurance that the 
individual is eligible for under this section 
(including any supplemental assistance 
which the individual may be eligible for 
under subsection (b)(2), unless the indi-
vidual elects to not receive such supple-
mental assistance). 
‘‘(iii) 12-MONTH PERIOD OF ISSUE.— 
The certificate of eligibility shall apply for 
a 12-month period from the date of issue, 
notwithstanding any changes in household 
circumstances following the individual’s ap-
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
plication for a credit under this section or 
supplemental assistance. 
‘‘(D) SUPPLEMENTAL
ASSISTANCE.—The 
State agency described in subparagraph (A) 
shall determine an individual’s eligibility for 
supplemental assistance under subsection (b)(2) 
based on the methodologies referred to in sub-
paragraph (B)(ii). 
‘‘(f) QUALIFYING FAMILY MEMBER.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualifying family 
member’ means the taxpayer’s spouse and any de-
pendent of the taxpayer. Such term does not include 
any individual who is not an eligible low-income indi-
vidual under subsection (e)(1). 
‘‘(2) SPECIAL DEPENDENCY TEST IN CASE OF 
DIVORCED PARENTS, ETC.—If paragraph (2) of sec-
tion 152(e) applies to any child with respect to any 
calendar year, in the case of any taxable year begin-
ning in such calendar year, such child shall be treat-
ed as described in paragraph (1)(B) with respect to 
the custodial parent (within the meaning of section 
152(e)(3)) and not with respect to the noncustodial 
parent. 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
‘‘(g) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified health 
insurance’ means any of the following: 
‘‘(A) Coverage under an insurance plan 
participating in a purchasing pool established 
pursuant to section 403 of the Health Cov-
erage, Affordability, Responsibility, and Equity 
Act of 2007. 
‘‘(B) Coverage under individual health in-
surance pursuant to section 412 of such Act. 
‘‘(C) Coverage, pursuant to section 413 of 
such Act, under the medicaid program or the 
State children’s health insurance program if 1 
or more family members qualifies for coverage 
under such program. 
‘‘(D) Coverage, pursuant to section 414 of 
such Act, under an employer-sponsored insur-
ance plan, including— 
‘‘(i) coverage under a COBRA con-
tinuation provision (as defined in section 
9832(d)(1)); 
‘‘(ii) State-based continuation cov-
erage provided under a State law that re-
quires such coverage; 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
‘‘(iii) coverage voluntarily offered by a 
former employer of the individual or family 
member; or 
‘‘(iv) coverage under a group health 
plan that is available through the employ-
ment of the individual or a family member. 
‘‘(2) EXCEPTION.—The term ‘qualified health 
insurance’ shall not include— 
‘‘(A) a flexible spending or similar ar-
rangement; and 
‘‘(B) any insurance if substantially all of 
its coverage is of excepted benefits described in 
section 9832(c). 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) 
EMPLOYER-SPONSORED
INSUR-
ANCE.— 
‘‘(i) IN
GENERAL.—The term ‘em-
ployer-sponsored insurance’ means any in-
surance which covers medical care under 
any health plan maintained by any em-
ployer (or former employer) of the tax-
payer or the taxpayer’s spouse. 
‘‘(ii) 
TREATMENT
OF
CAFETERIA 
PLANS.—For purposes of clause (i), the 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
cost of coverage shall be treated as paid or 
incurred by an employer to the extent the 
coverage is in lieu of a right to receive cash 
or other qualified benefits under a cafe-
teria plan (as defined in section 125(d)). 
‘‘(B) INDIVIDUAL HEALTH INSURANCE.— 
The term ‘individual health insurance’ means 
any insurance which constitutes medical care 
offered to individuals other than in connection 
with a group health plan and does not include 
Federal- or State-based health insurance cov-
erage. 
‘‘(h) OTHER SPECIFIED COVERAGE.—For purposes 
of this section, an individual has other specified coverage 
for any month if, as of the first day of such month— 
‘‘(1) COVERAGE UNDER MEDICARE.—Such indi-
vidual is entitled to benefits under part A of title 
XVIII of the Social Security Act or is enrolled under 
part B of such title. 
‘‘(2) CERTAIN OTHER COVERAGE.—Such indi-
vidual— 
‘‘(A) is enrolled in a health benefits plan 
under chapter 89 of title 5, United States Code; 
or 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
‘‘(B) is entitled to receive benefits under 
chapter 55 of title 10, United States Code. 
‘‘(i) FEDERAL POVERTY LEVEL; POVERTY LEVEL; 
POVERTY.—For purposes of this section, the terms ‘Fed-
eral poverty level’, ‘poverty level’, and ‘poverty’ mean the 
income official poverty line (as defined by the Office of 
Management and Budget, and revised annually in accord-
ance with section 673(2) of the Omnibus Budget Rec-
onciliation Act of 1981) applicable to a family of the size 
involved. 
‘‘(j) SPECIAL RULES.— 
‘‘(1) COORDINATION WITH ADVANCE PAYMENTS 
OF CREDIT.—With respect to any taxable year, the 
amount which would (but for this subsection) be al-
lowed as a credit to the taxpayer under subsection 
(a) shall be reduced (but not below zero) by the ag-
gregate amount paid on behalf of such taxpayer 
under section 7527A for months beginning in such 
taxable year. 
‘‘(2) COORDINATION WITH OTHER DEDUCTIONS 
AND CREDITS.—Amounts taken into account under 
subsection (a) shall not be taken into account in de-
termining any deduction allowed under section 
162(l) or 213. The amount of any credit otherwise 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
allowed under this section shall be reduced by the 
amount of any credit allowed under section 35. 
‘‘(3) HEALTH
SAVINGS
ACCOUNT
DISTRIBU-
TIONS.—Amounts distributed from a health savings 
account (as defined in section 223(d)) or an Archer 
MSA (as defined in section 220(d)) shall not be 
taken into account under subsection (a). 
‘‘(4) DENIAL OF CREDIT TO DEPENDENTS.—No 
credit shall be allowed under this section to any indi-
vidual with respect to whom a deduction under sec-
tion 151 is allowable to another taxpayer for a tax-
able year beginning in the calendar year in which 
such individual’s taxable year begins. 
‘‘(5) BOTH SPOUSES ELIGIBLE LOW-INCOME IN-
DIVIDUALS.—The spouse of the taxpayer shall not 
be treated as a qualifying family member for pur-
poses of subsection (a), if— 
‘‘(A) the taxpayer is married at the close 
of the taxable year; 
‘‘(B) the taxpayer and the taxpayer’s 
spouse are both eligible low-income individuals 
during the taxable year; and 
‘‘(C) the taxpayer files a separate return 
for the taxable year. 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
‘‘(6) MARITAL STATUS; CERTAIN MARRIED IN-
DIVIDUALS
LIVING
APART.—Rules similar to the 
rules of paragraphs (3) and (4) of section 21(e) 
shall apply for purposes of this section. 
‘‘(7) INSURANCE WHICH COVERS OTHER INDI-
VIDUALS.—For purposes of this section, rules simi-
lar to the rules of section 213(d)(6) shall apply with 
respect to any contract for qualified health insurance 
under which amounts are payable for coverage of an 
individual other than the taxpayer and qualifying 
family members. 
‘‘(8) TREATMENT
OF
PAYMENTS.—For pur-
poses of this section: 
‘‘(A) PAYMENTS
BY
SECRETARY.—Any 
payment made by the Secretary on behalf of 
any individual under section 7527A (relating to 
advance payment of credit for health insurance 
costs of eligible low-income individuals) shall be 
treated as having been made by the taxpayer 
(or on behalf of the taxpayer) on the first day 
of the month for which such payment was 
made. 
‘‘(B) PAYMENTS BY TAXPAYER.—Any pay-
ment made by the taxpayer (or on behalf of the 
taxpayer) for eligible coverage months shall be 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
treated as having been so made on the first day 
of the month for which such payment was 
made. 
‘‘(9) REGULATIONS.— 
‘‘(A) IN GENERAL.—The Secretary, in con-
sultation with the Secretary of Health and 
Human Services, shall administer the credit al-
lowed under this section and shall prescribe 
such regulations and other guidance as may be 
necessary or appropriate to carry out this sec-
tion, section 6050W, and section 7527A. 
‘‘(B) 
ELIGIBILITY
DETERMINATIONS.— 
Such regulations shall include such standards 
as the Secretary of Health and Human Services 
may specify with respect to the requirements 
for eligibility determinations under subsection 
(e)(2). 
‘‘(C) MEASURES TO COMBAT FRAUD AND 
ABUSE.—Such regulations shall include appro-
priate procedures to deter, detect, and penalize 
fraudulent efforts to obtain a credit under this 
section by individuals, providers of qualified 
health insurance, and others.’’. 
(b) CONFORMING AMENDMENTS.— 
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting ‘‘or 
section 36’’ after ‘‘section 35’’. 
(2) The table of sections for subpart C of part 
IV of chapter 1 of the Internal Revenue Code of 
1986 is amended by redesignating the item relating 
to section 36 as an item relating to section 37 and 
by inserting before such item the following new item: 
‘‘Sec. 36. Health insurance costs of eligible low-income individuals.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
(d) REIMBURSEMENT FOR ADMINISTRATIVE COSTS 
INCURRED IN DETERMINING ELIGIBILITY FOR CREDIT.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall reimburse States for the rea-
sonable administrative costs incurred in making eli-
gibility determinations in accordance with section 
36(e) of the Internal Revenue Code of 1986 (as 
added by subsection (a)). Such reimbursement shall 
not apply to State costs required under the medicaid 
or State children’s health insurance programs. 
(2) APPLICATION.—A State desiring reimburse-
ment under this subsection shall submit an applica-
tion to the Secretary of Health and Human Services 
VerDate Aug 31 2005 
22:47 May 18, 2007
Jkt 059200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS
in such manner, at such time, and containing such 
information as the Secretary may require. 
(3) APPROPRIATION.—Out of any money in the 
Treasury of the United States not otherwise appro-
priated, there are appropriated such sums as may be 
necessary to carry out this subsection. 
SEC. 312. ADVANCE PAYMENT OF CREDIT FOR HEALTH IN-
SURANCE COSTS OF ELIGIBLE LOW-INCOME 
INDIVIDUALS. 
(a) IN GENERAL.—Chapter 77 of the Internal Rev-
enue Code of 1986 (relating to miscellaneous provisions) 
is amended by inserting after section 7527 the following 
new section: 
‘‘SEC. 7527A. ADVANCE PAYMENT OF CREDIT FOR HEALTH 
INSURANCE COSTS OF ELIGIBLE LOW-IN-
COME INDIVIDUALS. 
‘‘(a) GENERAL RULE.—Not later than August 1, 
2009, the Secretary shall establish a program for making 
payments on behalf of certified individuals to providers of 
qualified health insurance (as defined in section 36(g)) for 
such individuals. 
‘‘(b) LIMITATION ON ADVANCE PAYMENTS DURING 
ANY TAXABLE YEAR.—The Secretary may make pay-
ments under subsection (a) only to the extent that the 
total amount of such payments made on behalf of any indi-
VerDate Aug 31 2005 
23:26 May 17, 2007
Jkt 059200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H2351.IH
H2351
jlentini on PROD1PC65 with BILLS