except that any reference to January 19, 2001, 
shall be treated as a reference to the date that 
is January 19 of the fifth year that begins after 
the date of the enactment of this title. 
‘‘(2) DEPUTY COMMISSIONER.— 
‘‘(A) IN GENERAL.—There shall be in the 
Administration a Deputy Commissioner for 
Health Benefits, who shall be appointed by the 
President, by and with the advice and consent 
of the Senate. 
‘‘(B) APPLICATION OF SSA PROVISIONS.— 
The provisions of paragraphs (2) through (4) of 
section 702(b) shall apply to the Deputy Com-
missioner in the same manner as they apply to 
the Deputy Commissioner of Social Security, 
except that any reference to January 19, 2001, 
shall be treated as a reference to the date speci-
fied under paragraph (1)(C). 
‘‘(3) OTHER OFFICERS.—There shall be in the 
Administration a Chief Actuary, Chief Financial Of-
ficer, and Inspector General. The provisions of sub-
sections (c) through (e) of section 702 shall apply 
with respect to such officers in the same manner as 
they apply with respect to comparable officers in the 
Social Security Administration.
‘‘(4) PERSONNEL; BUDGETARY MATTERS; SEAL 
OF OFFICE.—The provisions of subsections (a)(1), 
(a)(2), (b), and (d) of section 704 shall apply to the 
Commissioner and the Administration in the same 
manner as they apply to the Commissioner of Social 
Security and the Social Security Administration, re-
spectively. 
‘‘(e) AUTHORITY AND RULEMAKING.—The provisions 
of paragraphs (4) through (7) of section 702(a) shall 
apply to the Administration and Commissioner in the 
same manner as they apply to the Social Security Admin-
istration and the Commissioner of Social Security. 
‘‘(f) USE OF REGIONAL AND FIELD OFFICES.—The 
Commissioner shall establish such regional and field of-
fices as may be appropriate for the convenient and effi-
cient administration of this title. 
‘‘(g) COVERAGE OF ADMINISTRATION COSTS.—The 
Commissioner shall provide for the collection of adminis-
trative costs of offering coverage under this title from enti-
ties offering qualified health plans in the same manner 
as FEHBP provides for coverage of its administrative 
costs. 
‘‘(h) CONTINGENCY RESERVES.— 
‘‘(1) AHBP 
CONTINGENCY
RESERVE.—The 
Commissioner is authorized to establish and main-
tain a contingency reserve for purposes of carrying 
out this title and is authorized to impose under sec-
tion 2204(b)(3)(A) a premium surcharge of up to 
three percent in order to provide financing for such 
reserve. 
‘‘(2) PLAN RESERVES.—A qualified health plan 
may establish contingency reserves, that are in addi-
tion to the reserve described in paragraph (1), in a 
manner similar to that permitted under FEHBP. 
‘‘SEC. 2207. DEFINITIONS. 
‘‘For purposes of this title, except as otherwise pro-
vided: 
‘‘(1) The term ‘Administration’ means the 
Health Benefits Administration established under 
section 2206(b). 
‘‘(2) The term ‘AHBP-eligible individual’ 
means an individual described in section 2202(a)(2). 
‘‘(3) The term ‘AHBP region’ means a region 
as specified by the Commissioner under section 
2206(c)(2). 
‘‘(4) The term ‘Commissioner’ means the Com-
missioner of Health Benefits appointed under sec-
tion 2206(d)(1). 
‘‘(5) The term ‘FEHBP’ means the program 
under chapter 89 of title 5, United States Code, as
in effect before the date of the enactment of this 
title. 
‘‘(6) The term ‘qualified employer-provided cov-
erage’ means health coverage that is provided on the 
basis of employment and that the Commissioner has 
certified as being equivalent to the coverage under 
qualified health plans. For purposes of the previous 
sentence, coverage provided on the basis of employ-
ment is not equivalent to coverage under a qualified 
health plan unless the employer’s share of the cost 
of such coverage is is not less than the Government’s 
share of the cost of coverage under qualified health 
plans. 
‘‘(7) The term ‘qualified health plan’ means 
such a plan offered under this title.’’. 
(b) EFFECTIVE DATE; COLLECTIVE BARGAINING 
AGREEMENTS.— 
(1) BENEFITS.—Title XXII of the Social Secu-
rity Act shall first apply to benefits for items and 
services furnished on or after January 1, 2008. 
(2) EFFECT
ON
COLLECTIVE
BARGAINING 
AGREEMENTS.—Nothing in this Act shall be con-
strued as preventing a collectively bargained agree-
ment from providing coverage that is additional to,
or supplementary of, benefits provided under the 
American Health Benefits Program. 
SEC. 3. COLLECTION OF PREMIUMS, SUBSIDIES, AND EM-
PLOYER FUNDING. 
(a) PREMIUM COLLECTION.— 
(1) IN GENERAL.—Subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to 
determination of tax liability) is amended by adding 
at the end the following new part: 
‘‘PART VIII—AMERICAN HEALTH BENEFITS 
PROGRAM PREMIUMS 
‘‘Sec. 59B. American Health Benefits Program premiums. 
‘‘SEC. 59B. AMERICAN HEALTH BENEFITS PROGRAM PRE-
MIUMS. 
‘‘(a) IN GENERAL.—In the case of a specified indi-
vidual who is enrolled in a qualified health plan under title 
XXII of the Social Security Act (including by reason of 
a default enrollment under section 2202(c)(2)), there is 
hereby imposed (in addition to any other amount imposed 
by this subtitle) for the taxable year an amount equal to 
the aggregate premiums established under such title with 
respect to the coverage under such title which covers such 
individual for months beginning in such taxable year. The 
amount imposed under this subsection shall be reduced by
the amount of any government contribution under section 
2204(a) of such Act which relates to such coverage. 
‘‘(b) SPECIFIED INDIVIDUAL.—For purposes of this 
section, the term ‘specified individual’ means, with respect 
to coverage under title XXII of the Social Security Act 
for any month beginning in a taxable year— 
‘‘(1) in the case of self-only coverage, the indi-
vidual covered under such coverage, and 
‘‘(2) in the case of family coverage, each indi-
vidual covered under such coverage unless such indi-
vidual is covered under such coverage by reason of 
being a member of the family (other than a spouse). 
‘‘(c) JOINT AND SEVERAL LIABILITY.—In the case 
of an individual and such individual’s spouse covered 
under family coverage— 
‘‘(1) each such individual shall be jointly and 
severally liable for the amount imposed under sub-
section (a), and 
‘‘(2) the aggregate amount imposed under sub-
section (a) with respect to such coverage may not 
exceed the amount imposed with respect to either 
such individual. 
‘‘(d) COORDINATION WITH OTHER PROVISIONS.— 
‘‘(1) NOT TREATED AS MEDICAL EXPENSE.— 
For purposes of section 213, the amount imposed by
this section for any taxable year shall not be treated 
as an expense paid for medical care. 
‘‘(2) NOT TREATED AS TAX FOR CERTAIN PUR-
POSES.—The amount imposed by this section shall 
not be treated as a tax imposed by this chapter for 
purposes of determining— 
‘‘(A) the amount of any credit allowable 
under this chapter, or 
‘‘(B) the amount of the minimum tax im-
posed by section 55. 
‘‘(3) TREATMENT
UNDER
SUBTITLE
F.—For 
purposes of subtitle F, the amount imposed by this 
section shall be treated as if it were a tax imposed 
by section 1. 
‘‘(4) SECTION 15 NOT TO APPLY.—Section 15 
shall not apply to the amount imposed by this sec-
tion. 
‘‘(5) SECTION NOT TO AFFECT LIABILITY OF 
POSSESSIONS, ETC.—This section shall not apply for 
purposes of determining liability to any possession of 
the United States. For purposes of section 932 and 
7654, the amount imposed under this section shall 
not be treated as a tax imposed by this chapter.
‘‘(e) REGULATIONS.—The Secretary may prescribe 
such regulations as may be appropriate to carry out the 
purposes of this section.’’. 
(2) ADJUSTMENTS
TO
WITHHOLDING.—Sub-
section (a) of section 3402 of such Code (relating to 
income tax collected at source) is amended by add-
ing at the end the following new paragraph: 
‘‘(3) SPECIAL RULE FOR AMOUNTS IMPOSED BY 
SECTION 59B.— 
‘‘(A) IN
GENERAL.—In determining the 
amount required to be deducted and withheld 
from wages paid to an individual during any 
month by such individual’s employer, the 
amount imposed by section 59B shall be taken 
into account. 
‘‘(B) WAGES
NOT
REDUCED
BY
EXEMP-
TIONS.—In determining the amount to be de-
ducted and withheld by reason of subparagraph 
(A), the amount of wages shall not be reduced 
as provided in paragraph (2).’’. 
(3) CLERICAL
AMENDMENT.—The table of 
parts for subchapter A of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘PART VIII. AMERICAN HEALTH BENEFITS PROGRAM PREMIUMS’’.
(b) CREDIT FOR SUBSIDY AND PREPAYMENTS OF 
AMERICAN HEALTH BENEFITS PREMIUMS.— 
(1) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code 
of 1986 is amended by redesignating section 36 as 
section 37 and by inserting after section 35 the fol-
lowing new section: 
‘‘SEC. 36. SUBSIDY AND PREPAYMENT OF AMERICAN 
HEALTH BENEFITS PREMIUMS. 
‘‘(a) IN GENERAL.—In the case of a specified indi-
vidual (as defined in section 59B(b)), there shall be al-
lowed as a credit against the tax imposed by this subtitle 
for the taxable year an amount equal to the sum of— 
‘‘(1) the aggregate amount of premiums paid 
(other than any government contribution under sec-
tion 2204(a) of the Social Security Act) with respect 
to the coverage of such individual under title XXII 
of the Social Security Act, and 
‘‘(2) in the case of any premium subsidy-eligible 
individual, the applicable premium subsidy. 
‘‘(b) APPLICABLE PREMIUM SUBSIDY.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘applicable premium subsidy’ means, 
with respect to any premium subsidy-eligible indi-
vidual, the weighted average premium in effect for
the calendar year in which the taxable year begins 
(for the type of coverage involved) for plans in the 
AHBP region involved, as determined by the Com-
missioner of Health Benefits. 
‘‘(2) REDUCTION BASED ON FAMILY INCOME.— 
The amount otherwise determined under paragraph 
(1) shall be reduced (but not below zero) by an 
amount which bears the same ratio to the amount 
so determined as— 
‘‘(A) the amount (if any) by which the tax-
payer’s family income for the taxable year ex-
ceeds the lowest income threshold, bears to 
‘‘(B) the lowest income threshold. 
‘‘(c) PREMIUM SUBSIDY-ELIGIBLE INDIVIDUAL.— 
For purposes of this section, the term ‘premium subsidy- 
eligible individual’ means an individual— 
‘‘(1) who is enrolled, and required to be en-
rolled, in a qualified health plan under title XXII of 
the Social Security Act, 
‘‘(2) whose family income does not exceed twice 
the lowest income threshold, and 
‘‘(3) who does not have in effect (and, in the 
case of family coverage, each other individual cov-
ered under such coverage does not have in effect), 
in a form and manner specified by the Secretary of
the Treasury in consultation with the Commissioner 
of Health Benefits, for any portion of the taxable 
year of such individual an objection to the release of 
information under section 6103(k)(10)). 
‘‘(d) LOWEST INCOME THRESHOLD.—For purposes 
of this section, the term ‘lowest income threshold’ means, 
with respect to coverage consisting of— 
‘‘(1) only an individual, 125 percent of the pov-
erty line (as defined in section 673(2) of the Com-
munity Services Block Grant Act (42 U.S.C. 
9902(2)), including any revision required by such 
section) for a single individual for the calendar year 
which includes the close of the taxable year, or 
‘‘(2) a family of two or more individuals, 150 
percent of the poverty line (as so defined) for a fam-
ily of the size involved for the calendar year which 
includes the close of the taxable year. 
‘‘(e) FAMILY INCOME.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘family income’ 
means, with respect to a specified individual (as de-
fined in section 59B(b)) covered under coverage con-
sisting of— 
‘‘(A) only such individual, the modified ad-
justed gross income of such individual, or
‘‘(B) two or more individuals, the sum of 
the modified adjusted gross income of the speci-
fied individual and the modified adjusted gross 
income of each other individual covered under 
the plan for the taxable year that ends in or 
with the taxable year of the specified individual. 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
The term ‘modified adjusted gross income’ means 
adjusted gross income— 
‘‘(A) determined without regard to sections 
135, 911, 931, and 933, and 
‘‘(B) increased by the amount of interest 
received or accrued during the taxable year 
which is exempt from tax under this title. 
‘‘(f) REGULATIONS.—The Secretary may prescribe 
such regulations as are necessary or appropriate to carry 
out this section, including regulations which provide for 
not taking into account individuals with de minimis in-
come for purposes of determining family income for pur-
poses of this section.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (2) of section 1324(b) of 
title 31, United States Code, is amended by in-
serting ‘‘or 36’’ after ‘‘section 35’’.