I
106TH CONGRESS
1ST SESSION
H. R. 2185
To amend the Internal Revenue Code of 1986 to allow individuals a refund-
able credit against income tax for the purchase of private health insur-
ance 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 jurisdic-
tion of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to allow indi-
viduals 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 Representa-
tives 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 sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating 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 dur-
ing 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 in-
surance.
‘‘(2) MONTHLY LIMITATION.—
‘‘(A) IN GENERAL.—The monthly limita-
tion 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 in-
dividual for whom a deduction under sec-
tion 151(c) is allowable to the taxpayer for
such taxable year.
‘‘(B) LIMITATION
TO
DEPENDENTS.—
Not more than 2 individuals may be taken into
account by the taxpayer under subparagraph
(A)(iii).
‘‘(C) SPECIAL RULE FOR MARRIED INDI-
VIDUALS.—In the case of an individual—
‘‘(i) who is married (within the mean-
ing 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
COV-
ERAGE.—Such term shall not include any
month for which such individual participates in
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 in-
clude any month with respect to an individual
if, as of the first day of such month, such indi-
vidual 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 sec-
tion 7701(b)(7)).
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR
HEALTH INSURANCE COSTS OF SELF-EMPLOYED IN-
DIVIDUALS.—In the case of a taxpayer who is eligi-
ble 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 deduc-
tion under such section for such year.
‘‘(c) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section, the term ‘qualified health insurance’
means insurance sold through the Office of Health Insur-
ance under title II of the Health Insurance for Americans
Act of 1999.
‘‘(d) COORDINATION WITH ADVANCE PAYMENTS OF
CREDIT.—
‘‘(1) RECAPTURE
OF
EXCESS
ADVANCE
PAY-
MENTS.—If any payment is made by the Secretary
under section 7527 during any calendar year to a
provider of qualified health insurance for an indi-
vidual, then the tax imposed by this chapter for the
individual’s last taxable year beginning in such cal-
endar year shall be increased by the aggregate
amount of such payments.
‘‘(2) 
RECONCILIATION
OF
PAYMENTS
AD-
VANCED 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 al-
lowed by subsection (a)) allowable under this sub-
part.
‘‘(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 re-
duced 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 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.
‘‘(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 sub-
section (b)(2)(A) shall be increased by an
amount equal to—
‘‘(i) such dollar amount, multiplied by
‘‘(ii) the average of the inflation ad-
justments 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 mul-
tiple of $50.
‘‘(B) INFLATION ADJUSTMENT.—For pur-
poses of subparagraph (A), the inflation adjust-
ment for any calendar year is the percentage (if
any) by which—
‘‘(i) the weighted average FEHBP
cost for the preceding calendar year, ex-
ceeds
‘‘(ii) the weighted average FEHBP
cost for second preceding calendar year.
‘‘(C) WEIGHTED AVERAGE FEHBP COST.—
For purposes of subparagraph (B), the weight-
ed average FEHBP cost for any calendar year
is the weighted average determined under sec-
tion 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, re-
ceives payments during any calendar year from any indi-
vidual for coverage of such individual or any other indi-
vidual 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 pre-
scribe, 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 Sec-
retary may reasonably prescribe.
‘‘(c) CREDITABLE HEALTH INSURANCE.—For pur-
poses 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 pre-
scribed by the Secretary, any other insurance cov-
ering an individual if no credit is allowable under
section 35 with respect to such coverage.
‘‘(d) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
QUIRED.—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 re-
quired to make such return and the phone number
of the information contact for such person,
‘‘(2) the aggregate amount of payments de-
scribed in subsection (a) received by the person re-
quired 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 sen-
tence 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 sub-
section (a).’’.
(2) ASSESSABLE PENALTIES.—
(A) 
Subparagraph 
(B) 
of 
section
6724(d)(1) of such Code (relating to defini-
tions) 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 re-
turns 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 strik-
ing the period at the end of the last subpara-
graph and inserting ‘‘, or’’, and by adding at
the end the following new subparagraph:
‘‘(BB) section 6050T(d) (relating to re-
turns relating to payments for qualified health
insurance).’’.
(3) CLERICAL AMENDMENT.—The table of sec-
tions 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 fol-
lowing 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 be-
fore 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 PUR-
CHASERS OF QUALIFIED HEALTH INSUR-
ANCE.
(a) IN GENERAL.—Chapter 77 of the Internal Rev-
enue 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 indi-
vidual, 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 ELIGI-
BILITY 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 AD-
VANCE 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 indi-
vidual by such provider.
‘‘(e) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary to carry out the pur-
poses 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 pur-
chasers of qualified health insurance.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 2001.
TITLE II—MAKING HEALTH IN-
SURANCE COVERAGE AVAIL-
ABLE
SEC. 201. REQUIREMENT FOR OFFERING BY CARRIERS
PARTICIPATING IN THE FEDERAL EMPLOY-
EES’ 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 of-
fering the plan is a health insurance issuer the carrier of-
fering the plan—
(1) shall make available qualified health insur-
ance 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 insur-
ance’’ 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 sub-
section (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, commu-
nity-rated basis.
(c) VARIATION IN BENEFITS.—The benefits offered
under qualified health insurance may vary from those of-
fered 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 indi-
vidual.
(d) QUALIFIED INDIVIDUAL DEFINED.—For pur-
poses 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 Insur-
ance (in this title referred to as the ‘‘Office’’), to be head-
ed by a Director (in this title referred to as the ‘‘Direc-
tor’’) appointed by the Secretary.
(b) FUNCTIONS.—In relation to carrying out section
201, the Office and the Director shall have the same au-
thorities 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 in-
dividuals of qualified health insurance made available
under such section.
(c) PROVISION
OF INFORMATION.—The Director
shall be responsible for the distribution of such informa-
tion (including information in comparative form) and the
conduct of a coordinated annual open enrollment period
in a manner designed to encourage competition and facili-
tate consumer choice among the qualified health insurance
offered under this title.
SEC. 203. EFFECTIVE DATE.
This title takes effect on January 1, 2001.
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