I 
111TH CONGRESS 
1ST SESSION H. R. 2399 
To amend the Social Security Act and the Internal Revenue Code of 1986 
to assure comprehensive, affordable health insurance coverage for all 
Americans through an American Health Benefits Program. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 13, 2009 
Mr. LANGEVIN introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To amend the Social Security Act and the Internal Revenue 
Code of 1986 to assure comprehensive, affordable health 
insurance coverage for all Americans through an Amer-
ican Health Benefits Program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; FINDINGS; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘American Health Benefits Program Act of 2009’’. 
(b) FINDINGS.—Congress finds the following: 
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(1) UNINSURED AMERICANS AND LACK OF AC-
CESS TO CHOICES.—(A) In 2007, 45 million Ameri-
cans were uninsured, over 80 percent of whom were 
employed (or dependents of individuals who were 
employed). 
(B) Health care providers provided to unin-
sured Americans $41 billion in care for which they 
were not compensated by the individuals or through 
insurance. 
(C) Only 15 percent of employers providing 
health benefits are able to offer their employees a 
choice between two or more health plans. 
(2) COST GROWTH OF EMPLOYER COVERAGE.— 
(A) Premiums for employer-sponsored health insur-
ance in the United States have been rising four 
times faster on average than workers’ earnings since 
1999. 
(B) The employer cost of health benefits per el-
igible, enrolled worker is 18.3 percent of payroll. 
(C) In 2007, 48 percent of all small businesses 
with three to 199 employees not offering health ben-
efits list high premiums as the cause. 
(3) ADMINISTRATIVE
EFFICIENCY
OF
USING 
FEHBP MODEL FOR PROVIDING HEALTH INSURANCE 
COVERAGE.—(A) The private insurance market pre-
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sents increasing administrative challenges for em-
ployers in seeking out, contracting with, and admin-
istering health benefits. 
(B) The Federal Employee Health Benefits 
Program (FEHBP) currently manages negotiations 
with health insurers over premiums and benefits on 
behalf of 8.6 million Federal employees and retirees 
and their dependents. 
(C) Overhead costs for employers providing 
health benefits coverage can be over 30 percent for 
employers with fewer than 10 employees and about 
12 percent for employers with more than 500 em-
ployees. 
(D) In comparison, the overhead cost of cov-
erage provided under FEHBP is about 3 percent. 
(4) EXPANSION OF FEHBP MODEL TO COVER 
UNINSURED
AND
OTHER
AMERICANS.—Requiring 
participation in an FEHBP-style program would ex-
pand consumer choice, ensure portability and con-
tinuity of coverage, improve incentives for cost con-
tainment, and stabilize the burden on businesses. 
(5) 
SAVINGS
FROM
IMPLEMENTATION
OF 
HEALTH INFORMATION TECHNOLOGY.—Properly im-
plemented and widely adopted health information 
technology could significantly improve the quality, 
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safety and efficiency of health care delivery while 
saving an estimated $77 billion per year. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; findings; table of contents. 
Sec. 2. Establishment of American Health Benefits Program. 
‘‘TITLE XXII—AMERICAN HEALTH BENEFITS PROGRAM 
‘‘Sec. 2201. Establishment of program. 
‘‘Sec. 2202. Eligibility; requirement of coverage. 
‘‘Sec. 2203. Qualified health plans; benefits; premiums. 
‘‘Sec. 2204. Government contribution; American Health Benefits Program 
Trust Fund. 
‘‘Sec. 2205. Premium and cost-sharing subsidies for lower income individ-
uals. 
‘‘Sec. 2206. Administration. 
‘‘Sec. 2207. Definitions. 
Sec. 3. Collection of premiums, subsidies, and employer funding. 
Sec. 4. Amendments to the Medicaid program and SCHIP. 
Sec. 5. Consultation in implementation of health information technologies. 
Sec. 6. Non-preemption of existing collective bargaining agreements. 
Sec. 7. Health Benefits Commission. 
SEC. 2. ESTABLISHMENT OF AMERICAN HEALTH BENEFITS 
PROGRAM. 
(a) IN GENERAL.—The Social Security Act is amend-
ed by adding at the end the following new title: 
‘‘TITLE XXII—AMERICAN 
HEALTH BENEFITS PROGRAM 
‘‘SEC. 2201. ESTABLISHMENT OF PROGRAM. 
‘‘There is established under this title a program (to 
be known as the ‘American Health Benefits Program’) to 
provide comprehensive health insurance coverage to all 
Americans who are not covered under certain Federal 
health insurance programs and who are not eligible for 
employer-provided insurance coverage. The coverage shall 
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be provided in a manner similar to the manner in which 
coverage has been provided to Members of Congress and 
Federal Government employees and retirees and their de-
pendents under the Federal Employees Health Benefits 
Program (FEHBP). 
‘‘SEC. 2202. ELIGIBILITY; REQUIREMENT OF COVERAGE. 
‘‘(a) ELIGIBILITY.— 
‘‘(1) IN GENERAL.—Each AHBP-eligible indi-
vidual is eligible to enroll in a qualified health plan 
offered under this title. 
‘‘(2) AHBP-ELIGIBLE INDIVIDUAL DEFINED.— 
‘‘(A) IN GENERAL.—For purposes of this 
title, the term ‘AHBP-eligible individual’ means 
an individual residing in the United States who 
is— 
‘‘(i) a citizen or national of the United 
States; 
‘‘(ii) an alien lawfully admitted to the 
United States for permanent residence; 
‘‘(iii) an alien admitted into the 
United States under section 207 of the Im-
migration and Nationality Act (relating to 
refugees); 
‘‘(iv) an alien otherwise permanently 
residing in the United States under color 
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of law (as specified by the Administrator); 
or 
‘‘(v) an alien with the status of a non-
immigrant who is within a class of long- 
term 
nonimmigrants 
under 
section 
101(a)(15) of the Immigration and Nation-
ality Act that the Administrator deter-
mines, in consultation with the Secretary 
of Homeland Security, to be appropriate. 
‘‘(B) EXCEPTIONS.—Such term does not 
include the following individuals: 
‘‘(i) 
INDIVIDUALS
ELIGIBLE
FOR 
QUALIFIED
EMPLOYER-PROVIDED
COV-
ERAGE.—An individual who is eligible for 
employer-provided coverage, as defined in 
section 2207(6), whether an employee, de-
pendent, or otherwise. 
‘‘(ii) INCARCERATED INDIVIDUALS.— 
An individual who is incarcerated (as spec-
ified by the Administrator). 
‘‘(b) REQUIREMENT OF COVERAGE.— 
‘‘(1) IN GENERAL.—Except as provided in this 
subsection, each AHBP-eligible individual shall be 
enrolled in a qualified health plan under this title. 
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‘‘(2) 
EXCEPTION
FOR
INDIVIDUALS
DEM-
ONSTRATING
PUBLIC
HEALTH
INSURANCE
COV-
ERAGE.—The requirement of paragraph (1) shall 
not apply to an individual who demonstrates cov-
erage under any of the following: 
‘‘(A) MEDICARE.—Coverage under parts A 
and B (or under part C) of title XVIII. 
‘‘(B) MEDICAID.—Coverage under a State 
plan under title XIX. 
‘‘(C) 
TRICARE/CHAMPUS.—Coverage 
under the TRICARE program under chapter 
55, of title 10, United States Code. 
‘‘(D) INDIAN
HEALTH
SERVICES.—Cov-
erage under a medical care program of the In-
dian Health Service or of a tribal organization. 
‘‘(E) 
VETERANS
HEALTH.—Coverage 
under the veterans health care program under 
chapter 17 of title 38, United States Code, if 
the coverage for the individual involved is deter-
mined to be not less than the coverage provided 
under a qualified health plan, based on the indi-
vidual’s priority for services as provided under 
section 1705(a) of such title. 
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‘‘(3) EXCEPTION
FOR
NONIMMIGRANTS.—The 
requirement of paragraph (1) shall not apply to an 
individual described in subsection (a)(2)(A)(v). 
‘‘(4) EXCEPTION BASED ON RELIGIOUS OBJEC-
TION.—The requirement of paragraph (1) shall not 
apply to an individual who executes a written state-
ment (in a form and manner specified by the Sec-
retary) that— 
‘‘(A) the individual is conscientiously op-
posed to acceptance of medical treatment of the 
type covered by qualified health plans; and 
‘‘(B) the individual’s acceptance of medical 
treatment covered by such a plan would be in-
consistent with the individual’s sincere religious 
beliefs. 
‘‘(c) ENROLLMENT; DEFAULT ENROLLMENT.— 
‘‘(1) IN GENERAL.—The Administrator shall es-
tablish a process for AHBP-eligible individuals to 
enroll in qualified health plans. Such process shall 
be based on the enrollment process used under 
FEHBP and shall provide for the dissemination of 
information to AHBP-eligible individuals on quali-
fied health plans being offered. 
‘‘(2) DEFAULT ENROLLMENT.— 
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‘‘(A) IN
GENERAL.—The Administrator 
shall establish a procedure under which an 
AHBP-eligible individual who is required under 
subsection (b) to enroll, but is not enrolled, in 
a qualified health plan will be assigned to, and 
enrolled in, such a plan. 
‘‘(B) RULES.—In carrying out subpara-
graph (A), the Administrator shall assign 
AHBP-eligible individuals and families to the 
basic plan the premium of which is the lowest 
premium for the AHBP region or other area in 
which the individuals or families reside. 
‘‘(3) CHANGES IN ENROLLMENT.—The Admin-
istrator shall establish enrollment procedures that 
include an annual open season and permit changes 
in enrollment with qualified health plans at other 
times (such as by reason of changes in marital or 
dependent status). Such procedures shall be based 
on the enrollment procedures established under 
FEHBP. 
‘‘(d) TREATMENT OF FAMILY MEMBERS.—Enroll-
ment under this title shall include both individual and 
family enrollment, in a manner similar to that provided 
under FEHBP. To the extent consistent with eligibility 
under subsection (a), the Administrator shall provide rules 
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similar to the rules under FEHBP for the enrollment of 
family members who are AHBP-eligible individuals in the 
same plan, except that such rules shall permit a family 
consisting only of a married couple to elect to enroll each 
spouse in a different qualified health plan. 
‘‘(e) CHANGES IN PLAN ENROLLMENT.—The Admin-
istrator shall provide for and permit changes in the quali-
fied health plan in which an individual or family is enrolled 
under this section in a manner similar to the manner in 
which such changes are provided or permitted under 
FEHBP. The Administrator shall provide for termination 
of such enrollment for an individual at the time the indi-
vidual is no longer an AHBP-eligible individual. 
‘‘(f) ENROLLMENT
GUIDES.—The Administrator 
shall provide for the broad dissemination of information 
on qualified health plans offered under this title. Such in-
formation shall be provided in a comparative manner, 
similar to that used under FEHBP, and shall include in-
formation, collected through surveys of enrollees, on meas-
ures of enrollee satisfaction with the different plans. 
‘‘SEC. 2203. QUALIFIED HEALTH PLANS; BENEFITS; PRE-
MIUMS. 
‘‘(a) OFFERING OF PLANS.— 
‘‘(1) CONTRACTS.—The Administrator shall 
enter into contracts with entities for the offering of 
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qualified health plans in accordance with this title. 
Such contracts shall be entered into in a manner 
similar to the process by which the Director of the 
Office of Personnel Management is authorized to 
enter into contracts with health benefits plans under 
FEHBP. 
‘‘(2) REQUIREMENTS FOR ENTITIES OFFERING 
PLANS.—No such contract shall be entered into with 
an entity for the offering of a qualified health plan 
in a region unless the entity— 
‘‘(A) is licensed as a health maintenance 
organization in that State or is licensed to sell 
group health insurance coverage in that State; 
‘‘(B) meets such requirements, similar to 
requirements under FEHBP, as the Adminis-
trator may establish relating to solvency, orga-
nization, structure, governance, access, and 
quality; 
‘‘(C) agrees to participate in the high-risk 
reinsurance pool described in subsection (d); 
and 
‘‘(D) provides assurances satisfactory to 
the Administrator that at least 90 percent of 
the premium payments for the plan will be re-
turned in the form of aggregate health care 
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benefits or improvements, including health in-
formation technology. 
‘‘(3) CONTRACTING WITH LIMITED NUMBER OF 
PLANS IN A REGION WITHIN TYPES OF PLANS.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall contract with only a limited number of 
qualified health plans of each type (as specified 
under subparagraph (B)) in each AHBP region. 
‘‘(B) TYPES OF PLANS.—For purposes of 
subparagraph (A), the Administrator shall clas-
sify the different types of qualified health plans, 
such as fee-for-service plans, health mainte-
nance plans, preferred provider plans, and other 
types of plans. 
‘‘(b) FEHBP SCOPE OF BENEFITS.— 
‘‘(1) COMPREHENSIVE
BENEFITS.—Qualified 
health plans shall provide for the same scope and 
type of comprehensive benefits that have been pro-
vided under FEHBP, including the types of benefits 
described in section 8904 of title 5, United States 
Code and including benefits previously required by 
regulation or direction (such as preventive benefits, 
including childhood immunization and cancer screen-
ing, and mental health parity) under FEHBP. 
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‘‘(2) NO EXCLUSION FOR PRE-EXISTING CONDI-
TIONS.—Qualified health plans shall not impose pre- 
existing condition exclusions or otherwise discrimi-
nate against any enrollee based on the health status 
of such enrollee (including genetic information relat-
ing to such enrollee). 
‘‘(3) OTHER CONSUMER PROTECTIONS.—Quali-
fied health plans also shall meet consumer and pa-
tient protection requirements that the Administrator 
establishes, based on similar requirements previously 
imposed under FEHBP, including protections of pa-
tients’ rights previously effected pursuant to Execu-
tive Memorandum. 
‘‘(c) COMMUNITY-RATED PREMIUMS.— 
‘‘(1) IN GENERAL.—The premiums established 
for a qualified health plan under this title for indi-
vidual or family coverage shall be community-rated 
and shall not vary based on age, gender, health sta-
tus (including genetic information), or other factors. 
‘‘(2) COLLECTION
PROCESS.—The Adminis-
trator shall establish a process for the timely and ac-
curate collection of premiums owed by enrollees, tak-
ing into account any Government contribution under 
section 2204(a) and any premium subsidy referred 
to in section 2205(a). Such process shall include 
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methods for payment through payroll withholding, as 
well as payment through automatic debiting of ac-
counts with financial institutions, and shall be co-
ordinated with the application of section 59B of the 
Internal Revenue Code of 1986. Such premiums 
shall be deposited into the American Health Benefits 
Program Trust Fund established under section 
2204(c). 
‘‘(d) HIGH-RISK REINSURANCE POOL.—The Admin-
istrator shall establish an arrangement among the entities 
offering qualified health plans under which such entities 
contribute in an equitable manner (as determined by the 
Administrator) into a fund that provides payment to plans 
for a percentage (specified by the Administrator and not 
to exceed 90 percent) of the costs that they incur for en-
rollees beyond a predetermined threshold specified from 
time to time by the Administrator. 
‘‘(e) MARKETING PRACTICES AND COSTS.—The Ad-
ministrator shall monitor marketing practices with respect 
to qualified health plans in order to assure— 
‘‘(1) the accuracy of the information dissemi-
nated regarding such plans; and 
‘‘(2) that costs of marketing are reasonable and 
do not exceed a percentage of total costs that is 
specified by the Administrator and that takes into 
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account costs of market entry for new qualified 
health plans. 
‘‘SEC. 
2204. 
GOVERNMENT 
CONTRIBUTION; 
AMERICAN 
HEALTH BENEFITS PROGRAM TRUST FUND. 
‘‘(a) GOVERNMENT CONTRIBUTION.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
provide each year for a contribution under this sub-
section towards the coverage provided under this 
title for those AHBP-eligible individuals who are re-
quired to be enrolled in a qualified health plan under 
section 2202(b). Except as provided in this sub-
section, the amount of such contribution shall be de-
termined using the same methodology that is applied 
for purposes of determining the Government con-
tribution under section 8906 of title 5, United 
States Code and shall not exceed 75 percent of the 
premium for the plan selected. 
‘‘(2) USE OF REGIONAL WEIGHTED AVERAGE.— 
Instead of computing the Government contribution 
using methodology under section 8906(b)(1) of title 
5, United States Code, based on 72 percent of the 
weighted average premium for qualified health plans 
nationally, the Administrator shall compute such 
contribution based on 72 percent of the weighted av-
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erage premium for qualified health plans in each re-
gion involved (as identified by the Administrator). 
‘‘(b) PLAN PAYMENT.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
provide for payment of qualified health plans of the 
premiums for such plans, as adjusted under this 
subsection. 
‘‘(2) RISK ADJUSTED PAYMENT.—The payment 
to a qualified health plan under this subsection shall 
be adjusted in a budget-neutral manner specified by 
the Administrator to reflect the actuarial risk of the 
enrollees in the plan compared to an average actu-
arial risk. 
‘‘(3) REDUCTION
FOR
ADMINISTRATIVE
EX-
PENSES AND CONTINGENCY RESERVE.—The Admin-
istrator shall provide for a uniform percentage re-
duction in payment otherwise made to a qualified 
health plan under this subsection. Such percentage 
shall consist of the following: 
‘‘(A) CONTINGENCY RESERVE.—A percent-
age (not to exceed 3 percent) to provide for a 
contingency 
reserve 
described 
in 
section 
2206(h)(1). 
‘‘(B) FEDERAL ADMINISTRATIVE COSTS.— 
A percentage (not to exceed 5 percent) to cover 
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Federal administrative costs in implementing 
this title. 
‘‘(c) TRUST FUND.— 
‘‘(1) ESTABLISHMENT.—There is hereby estab-
lished a trust fund, to be known as the ‘American 
Health Benefits Program Trust Fund’ (in this sub-
section referred to as the ‘Trust Fund’). 
‘‘(2) DEPOSITS.—The Trust Fund shall consist 
of such gifts and bequests as may be provided in 
section 201(i)(1) and such amounts as may be de-
posited in, or appropriated to, such fund as provided 
in this title. There are hereby appropriated to the 
Trust Fund, out of any moneys in the Treasury not 
otherwise appropriated, amounts equivalent to 100 
percent of— 
‘‘(A) the taxes imposed by section 3451 of 
the Internal Revenue Code of 1986 with respect 
to wages reported to the Secretary of the 
Treasury or the Secretary’s delegate pursuant 
to subtitle F of such Code, as determined by 
the Secretary of the Treasury by applying the 
applicable rates of tax under such section to 
such wages, which wages shall be certified by 
the Commissioner of Social Security on the 
basis of records of wages established and main-
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tained by such Commissioner in accordance 
with such reports; 
‘‘(B) the taxes imposed by section 1401(c) 
of the Internal Revenue Code of 1986 with re-
spect to self-employment income reported to the 
Secretary of the Treasury or the Secretary’s 
delegate pursuant to subtitle F of such Code, as 
determined by the Secretary of the Treasury by 
applying the applicable rates of tax under such 
section to such self-employment income, which 
self-employment income shall be certified by the 
Commissioner of Social Security on the basis of 
records of self-employment established and 
maintained by such Commissioner in accord-
ance with such returns; and 
‘‘(C) the excess of the amounts imposed 
under section 59B of the Internal Revenue 
Code of 1986 over the amounts of credits al-
lowed under section 36B. 
The amounts appropriated by the preceding sentence 
shall be transferred from time to time from the gen-
eral fund in the Treasury to the Trust Fund, such 
amounts to be determined on the basis of estimates 
by the Secretary of the Treasury of the taxes, speci-
fied in the preceding sentence, paid to or deposited 
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into the Treasury; and proper adjustments shall be 
made in amounts subsequently transferred to the ex-
tent prior estimates were in excess of or were less 
than the taxes specified in such sentence. 
‘‘(3) APPLICATION
OF
TRUST
FUND
PROVI-
SIONS.—The provisions of subsections (b) through 
(f) of section 1817 shall apply to the Trust Fund in 
the same manner as they apply to the Federal Hos-
pital Insurance Trust Fund, except that, for pur-
poses of this paragraph, any reference in such sub-
sections to a provision of the Internal Revenue Code 
of 1986 is deemed a reference to the corresponding 
provision of such Code referred to in paragraph (2) 
of this subsection. 
‘‘SEC. 2205. PREMIUM AND COST-SHARING SUBSIDIES FOR 
LOWER INCOME INDIVIDUALS. 
‘‘(a) PREMIUM SUBSIDIES.—The Administrator, in 
consultation with the Secretary of the Treasury, shall as-
sist individuals in estimating the amount of the premium 
subsidy which will be allowed to such individuals under 
section 36B of the Internal Revenue Code of 1986 with 
respect to any month, and shall take the estimated amount 
of such premium subsidy into account for purposes of col-
lecting any premium under section 2203(c)(2). 
‘‘(b) COST-SHARING SUBSIDIES.— 
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‘‘(1) NO COST-SHARING FOR INDIVIDUALS WITH 
FAMILY INCOME BELOW LOWEST INCOME THRESH-
OLD.—In the case of a cost-sharing subsidy-eligible 
individual whose family income is less than the low-
est income threshold, there shall be a cost-sharing 
subsidy so the cost-sharing is reduced to zero. 
‘‘(2) NO COST-SHARING FOR PREGNANT WOMEN 
AND CHILDREN.—In the case of a cost-sharing sub-
sidy-eligible individual who is under 18 years of age 
or who is a pregnant woman, there shall be a cost- 
sharing subsidy so the cost-sharing is reduced to 
zero. 
‘‘(3) SLIDING
SCALE
FOR
OTHER
INDIVID-
UALS.—In the case of cost-sharing subsidy-eligible 
individuals not described in paragraph (1) or (2), 
the Administrator, in consultation with the Sec-
retary of the Treasury, shall establish a schedule of 
cost-sharing subsidies consistent with this para-
graph. Under such schedule the amount of a cost- 
sharing subsidy for such individuals shall be such 
that— 
‘‘(A) the cost-sharing is nominal (as de-
fined for purposes of section 1916(a)(3)) for in-
dividuals whose family income is at the lowest 
income threshold; and 
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‘‘(B) as the family income increases from 
such lowest income threshold to twice such 
threshold, the cost-sharing subsidy is reduced in 
a ratable matter to zero. 
‘‘(4) APPLICATION OF A PREVIOUS YEAR’S FAM-
ILY INCOME.—In applying this subsection for cost- 
sharing subsidies for expenses incurred for services 
furnished in a year, family income shall be deter-
mined based on the modified AGI, as defined in 
paragraph (7)(D), for taxable years ending in or 
with the previous year (or, if information on such 
modified AGI for such taxable years is not available 
on a timely basis, for the most recent taxable years 
for which such information is so available). 
‘‘(5) APPLICATION
FOR
SUBSIDIES.—A cost- 
sharing subsidy shall not be available to a cost-shar-
ing subsidy-eligible individual under this subsection 
unless an application, in a form and manner and 
containing such information and in such frequency 
as the Administrator shall specify, has been made 
for such subsidy. 
‘‘(6) PAYMENT OF SUBSIDIES TO PLANS.—The 
Administrator shall establish the form of additional 
payments to qualified health plans to compensate 
such plans for cost-sharing subsidies provided to en-
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rollees under this subsection. Such payments may be 
in such form as the Administrator specifies and may 
include— 
‘‘(A) a capitation payment, in an amount 
that reflects the per capita actuarial value of 
such subsidies; 
‘‘(B) reimbursement for the reductions in 
cost-sharing made to carry out this subsection; 
or 
‘‘(C) a combination of the methodologies 
under subparagraphs (A) and (B). 
‘‘(7) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) COST-SHARING SUBSIDY-ELIGIBLE IN-
DIVIDUAL
DEFINED.—The term ‘cost-sharing 
subsidy-eligible individual’ means an AHBP-eli-
gible individual— 
‘‘(i) who is enrolled, and required 
under section 2202(b) to be enrolled, in a 
qualified health plan under this title; 
‘‘(ii) whose family income does not ex-
ceed twice the lowest income threshold (as 
defined in subparagraph (B)); and 
‘‘(iii) who does not have in effect (and 
any of whose family members does not 
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have in effect), in a form and manner 
specified by the Administrator, in consulta-
tion with the Secretary of the Treasury, 
for any portion of the year involved an ob-
jection to the release of information under 
section 6103(l)(21) of the Internal Rev-
enue Code of 1986. 
‘‘(B) LOWEST INCOME THRESHOLD.—The 
term ‘lowest income threshold’ means— 
‘‘(i) in the case of coverage consisting 
of only an individual, 125 percent of the 
poverty line (as defined in section 673(2) 
of the Community Services Block Grant 
Act (42 U.S.C. 9902(2)), including any re-
vision required by such section) for a sin-
gle individual; or 
‘‘(ii) in the case of coverage consisting 
of a family of two or more individuals, 150 
percent of the poverty line (as so defined) 
for a family of the size involved. 
‘‘(C) FAMILY INCOME.—The term ‘family 
income’ means, with respect to an AHBP-eligi-
ble individual who is enrolled in a qualified 
health plan— 
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‘‘(i) for individual-only coverage, the 
modified AGI of the individual; or 
‘‘(ii) for coverage that includes other 
family members, the sum of the modified 
AGI of the individual and of each other in-
dividual covered under the plan as a family 
member of the individual. 
The Administrator, in consultation with the 
Secretary of the Treasury, may provide for ex-
clusion from family income under clause (ii) of 
family members (such as children) who have de 
minimis income (as specified by the Adminis-
trator). 
‘‘(D) MODIFIED AGI DEFINED.—The term 
‘modified AGI’ means adjusted gross income 
(as defined in section 62 of the Internal Rev-
enue Code of 1986)— 
‘‘(i) determined without regard to sec-
tions 135, 911, 931, and 933 of such 
Code; and 
‘‘(ii) increased by the amount of inter-
est received or accrued during the taxable 
year which is exempt from tax under such 
Code. 
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In the case of an individual filing a joint return, 
any reference in this subsection to the modified 
adjusted gross income of such individual shall 
be 1⁄2 such return’s modified adjusted gross in-
come. 
‘‘SEC. 2206. ADMINISTRATION. 
‘‘(a) APPLICATION OF FEHBP RULES.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this title, the program under this title shall 
be administered in the same manner as FEHBP. 
‘‘(2) SPECIFIC
PROVISIONS.—In carrying out 
this title, the Administrator pursuant to paragraph 
(1) shall provide for the following: 
‘‘(A) Approval and disapproval of plans as 
qualified health plans. 
‘‘(B) Negotiation of plan benefits (includ-
ing cost-sharing) and plan premiums. 
‘‘(b) ESTABLISHMENT OF HEALTH BENEFITS AD-
MINISTRATION.—There is hereby established, as an inde-
pendent agency in the executive branch of Government, 
a Health Benefits Administration (in this title referred to 
as the ‘Administration’). 
‘‘(c) DUTIES.— 
‘‘(1) IN GENERAL.—The Administration shall 
administer the program under this title and, with re-
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spect to application of any provision of FEHBP 
under this title, any reference in FEHBP to the Di-
rector of the Office of Management and Budget is 
deemed a reference to the Administrator of Health 
Benefits. 
‘‘(2) ESTABLISHMENT OF AHBP REGIONS.—For 
purposes of carrying out this title, the Administrator 
shall divide the United States into, and establish, 
AHBP regions. 
‘‘(d) OFFICERS.— 
‘‘(1) ADMINISTRATOR OF HEALTH BENEFITS.— 
‘‘(A) IN GENERAL.—There shall be in the 
Administration an Administrator of Health 
Benefits who shall be appointed by the Presi-
dent, by and with the advice and consent of the 
Senate. 
‘‘(B) COMPENSATION.—The Commissioner 
shall be compensated at the rate provided for 
level I of the Executive Schedule. 
‘‘(C) TERM.—The provisions of section 
702(a)(3) shall apply to the Commissioner of 
Health Benefits in the same manner as they 
apply to the Commissioner of Social Security, 
except that any reference to January 19, 2001, 
shall be treated as a reference to the date that 
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is January 19 of the seventh year that begins 
after the date of the enactment of this title. 
‘‘(2) DEPUTY ADMINISTRATOR.— 
‘‘(A) IN GENERAL.—There shall be in the 
Administration a Deputy Administrator 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 Ad-
ministrator 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), 
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(a)(2), (b), and (d) of section 704 shall apply to the 
Administrator 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 Administrator 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 
Administrator 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 
Administrator 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 Ad-
ministrator is authorized to establish and maintain 
a contingency reserve for purposes of carrying out 
this title and is authorized to impose under section 
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2204(b)(3)(A) a premium surcharge of up to three 
percent in order to provide financing for such re-
serve. 
‘‘(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 Administrator under section 
2206(c)(2). 
‘‘(4) The term ‘Administrator’ means the Ad-
ministrator 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. 
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‘‘(6) The term ‘qualified employer-provided cov-
erage’ means health coverage that is provided on the 
basis of employment and that the Administrator 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 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, 2012. 
(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. 
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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 
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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 
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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 
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