‘‘(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)). 
‘‘(c) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified health 
insurance’ means insurance which constitutes med-
ical care as defined in section 213(d) without regard 
to— 
‘‘(A) paragraph (1)(C) thereof, and 
‘‘(B) so much of paragraph (1)(D) thereof 
as relates to qualified long-term care insurance 
contracts. 
‘‘(2) EXCLUSION
OF
CERTAIN
OTHER
CON-
TRACTS.—Such term shall not include insurance if a 
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substantial portion of its benefits are excepted bene-
fits (as defined in section 9832(c)). 
‘‘(d) ARCHER MSA AND HEALTH SAVINGS ACCOUNT 
CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—If a deduction would (but 
for paragraph (2)) be allowed under section 220 or 
223 to the taxpayer for a payment for the taxable 
year to the Archer MSA or health savings account 
of an individual, subsection (a) shall be applied by 
treating such payment as a payment for qualified 
health insurance for such individual. 
‘‘(2) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed under section 220 or 223 for 
that portion of the payments otherwise allowable as 
a deduction under section 220 or 223 for the taxable 
year which is equal to the amount of credit allowed 
for such taxable year by reason of this subsection. 
‘‘(e) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) MARRIED COUPLES MUST FILE JOINT RE-
TURN.—If the taxpayer is married at the close of 
the taxable year, the credit shall be allowed under 
subsection (a) only if the taxpayer and the tax-
payer’s spouse file a joint return for the taxable 
year. 
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‘‘(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) DENIAL OF DOUBLE BENEFIT.—No credit 
shall be allowed under subsection (a) if the credit 
under section 35 is allowed and no credit shall be al-
lowed under 35 if a credit is allowed under this sec-
tion. 
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR 
HEALTH INSURANCE COSTS.—In the case of a tax-
payer who is eligible to deduct any amount under 
section 162(l) or 213 for the taxable year, this sec-
tion shall apply only if the taxpayer elects not to 
claim any amount as a deduction under such section 
for such year. 
‘‘(5) ELECTION NOT TO CLAIM CREDIT.—This 
section shall not apply to a taxpayer for any taxable 
year if such taxpayer elects to have this section not 
apply for such taxable year. 
‘‘(6) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2008, each dollar amount contained in subsection 
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(b)(2)(B) shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2007’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$50.’’. 
(b) INFORMATION REPORTING.— 
(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 of the Internal Revenue 
Code of 1986 (relating to information concerning 
transactions with other persons) is amended by in-
serting after section 6050V the following new sec-
tion: 
‘‘SEC. 6050W. 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-
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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 
36(c)) other than— 
‘‘(1) insurance under a subsidized group health 
plan maintained by an employer, or 
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‘‘(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 36 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 
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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 (xv) 
through (xx) as clauses (xvi) through (xxi), re-
spectively, and by inserting after clause (xi) the 
following new clause: 
‘‘(xv) section 6050W (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 the period at 
the end of subparagraph (CC) and inserting ‘‘, 
or’’ and by adding at the end the following new 
subparagraph: 
‘‘(DD) section 6050W(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 
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chapter 61 of such Code is amended by inserting 
after the item relating to section 6050V the fol-
lowing new item: 
‘‘Sec. 6050W. 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 36 of such Code’’. 
(2) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the last 
item and inserting the following new items: 
‘‘Sec. 36. Health insurance costs. 
‘‘Sec. 37. Overpayments of tax.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 3. ADVANCE PAYMENT OF CREDIT FOR PURCHASERS 
OF QUALIFIED HEALTH INSURANCE. 
(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: 
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‘‘SEC. 7529. 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 indi-
vidual— 
‘‘(1) who purchases qualified health insurance 
(as defined in section 36(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 36 for the 
taxable year, 
‘‘(2) estimates the amount of such credit for 
such taxable year, and 
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‘‘(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 36 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 the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item: 
‘‘Sec. 7529. Advance payment of health insurance credit for purchasers of 
qualified health insurance.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 4. LIMITATION ON EMPLOYER-PROVIDED HEALTH 
CARE COVERAGE. 
(a) IN GENERAL.—Section 106 of the Internal Rev-
enue Code of 1986 (relating to contributions by employer 
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to accident and health plans) is amended by adding at the 
end the following new subsection: 
‘‘(e) LIMITATION ON EMPLOYER-PROVIDED HEALTH 
CARE COVERAGE.— 
‘‘(1) IN GENERAL.—The amount of any exclu-
sion under subsection (a) for any taxable year with 
respect to— 
‘‘(A) 
any 
employer-provided 
coverage 
under an accident or health plan which con-
stitutes medical care, and 
‘‘(B) any employer contribution to an Ar-
cher MSA or a health savings account which is 
treated by subsection (b) or (d) as employer- 
provided coverage for medical expenses under 
an accident or health plan, 
shall not exceed $5,000 per employee for self-only 
coverage and $11,500 for family coverage. 
‘‘(2) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2008, each dollar amount contained in paragraph 
(1) shall be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
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mined by substituting ‘calendar year 2007’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$50. 
‘‘(3) MEDICAL CARE DEFINED.—For purposes 
of paragraph (1), the term ‘medical care’ has the 
meaning given to such term in section 213(d) deter-
mined without regard to— 
‘‘(A) paragraph (1)(C) thereof, and 
‘‘(B) so much of paragraph (1)(D) thereof 
as relates to qualified long-term care insur-
ance.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
Æ 
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