I 
109TH CONGRESS 
1ST SESSION H. R. 1872 
To amend the Internal Revenue Code of 1986 to provide tax incentives 
for the purchase of qualified health insurance, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 27, 2005 
Mr. SAM JOHNSON of Texas (for himself, Mr. CANTOR, Mr. RYAN of Wis-
consin, Mr. HAYWORTH, Mr. JINDAL, Mr. MANZULLO, Mr. AKIN, Mr. 
GREEN of Wisconsin, Mr. HERGER, Mr. NEUGEBAUER, Mr. CAMP, Mrs. 
DRAKE, Mr. PENCE, Mr. KING of Iowa, Mr. BEAUPREZ, Mr. NUSSLE, 
Mr. BRADY of Texas, and Mr. CHOCOLA) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
tax incentives for the purchase of qualified health insur-
ance, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Health Coverage for the Uninsured Act of 2005’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents.
Sec. 2. Deduction of premiums for high deductible health plans. 
Sec. 3. Refundable credit for contributions to health savings accounts of small 
business employees. 
Sec. 4. Refundable health insurance costs credit. 
Sec. 5. Advance payment of credit to issuers of qualified health insurance. 
SEC. 2. DEDUCTION OF PREMIUMS FOR HIGH DEDUCTIBLE 
HEALTH PLANS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions for individuals) is amended 
by redesignating section 224 as section 225 and by insert-
ing after section 223 the following new section: 
‘‘SEC. 224. PREMIUMS FOR HIGH DEDUCTIBLE HEALTH 
PLANS. 
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual, there shall be allowed as a deduction for the tax-
able year the aggregate amount paid by such individual 
as premiums under a high deductible health plan with re-
spect to months during such year for which such indi-
vidual is an eligible individual with respect to such health 
plan. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible 
individual’ has the meaning given such term by sec-
tion 223(c)(1). 
‘‘(2) HIGH DEDUCTIBLE HEALTH PLAN.—The 
term ‘high deductible health plan’ has the meaning 
given such term by section 223(c)(2).
‘‘(c) SPECIAL RULES.— 
‘‘(1) DEDUCTION
ALLOWABLE
FOR
ONLY
PLAN.—For purposes of this section, in the case of 
an individual covered by more than 1 high deductible 
health plan for any month, the individual may only 
take into account amounts paid for 1 of such plans 
for such month. 
‘‘(2) GROUP HEALTH PLAN COVERAGE.— 
‘‘(A) IN GENERAL.—No deduction shall be 
allowed to an individual under subsection (a) 
for any amount paid for coverage under a high 
deductible health plan for a month if that indi-
vidual participates in any coverage under a 
group health plan (within the meaning of sec-
tion 5000 without regard to section 5000(d)). 
‘‘(B) EXCEPTION
FOR
CERTAIN
PER-
MITTED
COVERAGE.—Subparagraph (A) shall 
not apply to an individual if the individual’s 
only coverage under a group health plan for a 
month is coverage described in clause (i) or (ii) 
of section 223(c)(1)(B). 
‘‘(3) CONTRIBUTIONS TO HEALTH SAVINGS AC-
COUNT
REQUIRED.—A deduction shall not be al-
lowed under subsection (a) for a taxable year with 
respect to such individual if a deduction is not allow-
able under section 223 with respect to such indi-
vidual for the taxable year. 
‘‘(4) MEDICAL
AND
HEALTH
SAVINGS
AC-
COUNTS.—Subsection (a) shall not apply with re-
spect to any amount which is paid or distributed out 
of an Archer MSA or a health savings account which 
is not included in gross income under section 220(f) 
or 223(f), as the case may be. 
‘‘(5) COORDINATION
WITH
DEDUCTION
FOR 
HEALTH INSURANCE OF SELF-EMPLOYED INDIVID-
UALS.—The amount taken into account by the tax-
payer in computing the deduction under section 
162(l) shall not be taken into account under this 
section. 
‘‘(6) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—The amount taken into account by 
the taxpayer in computing the deduction under this 
section shall not be taken into account under section 
213.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
of section 62 of such Code is amended by inserting before 
the last sentence at the end the following new paragraph:
‘‘(21) PREMIUMS
FOR
HIGH
DEDUCTIBLE 
HEALTH PLANS.—The deduction allowed by section 
224.’’. 
(c) COORDINATION WITH SECTION 35 HEALTH IN-
SURANCE COSTS CREDIT.—Section 35(g)(2) of such Code 
is amended by striking ‘‘or 213’’ and inserting ‘‘, 213, 
or 224’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by redesignating the item relating to section 
224 as an item relating to section 225 and by inserting 
before such item the following new item: 
‘‘Sec. 224. Premiums for high deductible health plans.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 3. REFUNDABLE CREDIT FOR CONTRIBUTIONS TO 
HEALTH SAVINGS ACCOUNTS OF SMALL BUSI-
NESS EMPLOYEES. 
(a) 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 following new sec-
tion:
‘‘SEC. 36. SMALL EMPLOYER CONTRIBUTIONS TO HEALTH 
SAVINGS ACCOUNTS. 
‘‘(a) GENERAL RULE.—In the case of an eligible em-
ployer, there shall be allowed as a credit against the tax 
imposed by this subtitle an amount equal to the lesser of— 
‘‘(1) the amount contributed by the employer to 
any qualified health savings account of any employee 
who is an eligible individual (as defined in section 
223(c)(1)) during the taxable year and who is cov-
ered by a high deductible health plan maintained by 
the employer, or 
‘‘(2) an amount equal to the product of— 
‘‘(A) $200 ($500 if coverage for all months 
described in subparagraph (B)(i) is family cov-
erage), and 
‘‘(B) a fraction— 
‘‘(i) the numerator of which is the 
number of months that the employee was 
covered under a high deductible health 
plan maintained by the employer, and 
‘‘(ii) the denominator of which is the 
number of months in the taxable year. 
‘‘(b) ELIGIBLE EMPLOYER.—For purposes of this 
section—
‘‘(1) IN
GENERAL.—The term ‘eligible em-
ployer’ means, with respect to any taxable year, an 
employer which— 
‘‘(A) is a small employer, and 
‘‘(B) maintains a high deductible health 
plan under which all employees of the employer 
reasonably expected to receive at least $5,000 
of compensation during the taxable year are eli-
gible to participate. 
An employer may exclude from consideration under 
subparagraph (B) employees who are covered by an 
agreement described in section 410(b)(3)(A) if there 
is evidence that health benefits were the subject of 
good faith bargaining. 
‘‘(2) EXCEPTION
FOR
GOVERNMENTAL
AND 
TAX-EXEMPT EMPLOYERS.—The term ‘eligible em-
ployer’ shall not include the Federal Government or 
any employer described in section 457(e)(1). 
‘‘(3) SMALL EMPLOYER.— 
‘‘(A) IN GENERAL.—The term ‘small em-
ployer’ means, with respect to any calendar 
year, any employer if such employer employed 
an average of 100 or fewer employees on busi-
ness days during either of the 2 preceding cal-
endar years. For purposes of the preceding sen-
tence, a preceding calendar year may be taken 
into account only if the employer was in exist-
ence throughout such year. 
‘‘(B) EMPLOYERS NOT IN EXISTENCE IN 
PRECEDING YEAR.—In the case of an employer 
which was not in existence throughout the 1st 
preceding calendar year, the determination 
under subparagraph (A) shall be based on the 
average number of employees that it is reason-
ably expected such employer will employ on 
business days in the current calendar year. 
‘‘(C) SPECIAL
RULE.—Any reference in 
this paragraph to an employer shall include a 
reference to any predecessor of such employer. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) HIGH DEDUCTIBLE HEALTH PLAN.—The 
term ‘high deductible health plan’ has the meaning 
given such term by section 223(c)(2). 
‘‘(2) QUALIFIED HEALTH SAVINGS ACCOUNT.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
health savings account’ means a health savings 
account (as defined in section 223(d))— 
‘‘(i) which is designated (in such form 
as the Secretary may prescribe) as a quali-
fied account for purposes of this section or 
section 36A, 
‘‘(ii) which may not include any 
amount other than contributions described 
in subsection (a) or section 36A(e), and 
earnings on such contributions, and 
‘‘(iii) with respect to which section 
223(f)(4)(A) is applied by substituting 
‘100 percent’ for ‘10 percent’. 
‘‘(B) SUBACCOUNTS
AND
SEPARATE
AC-
COUNTING.—The Secretary may prescribe rules 
under which a subaccount within a health sav-
ings account, or separate accounting with re-
spect to contributions and earnings described in 
subparagraph (A)(ii), may be treated in the 
same manner as a qualified health savings ac-
count for purposes of this section and section 
36A. 
‘‘(C) ROLLOVERS.—A contribution of a 
distribution from a qualified health savings ac-
count to another health savings account shall be 
treated as a rollover contribution for purposes 
of section 223(f)(5) only if the other account is 
a qualified health savings account.
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) AGGREGATION RULES.—All persons treat-
ed as a single employer under subsection (a) or (b) 
of section 52, or subsection (n) or (o) of section 414, 
shall be treated as one person. 
‘‘(2) DISALLOWANCE OF DEDUCTION.—No de-
duction shall be allowed for that portion of contribu-
tions to any health savings accounts for the taxable 
year which is equal to the credit determined under 
subsection (a). 
‘‘(3) 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.’’. 
(b) 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 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 the item relating to section 37 
the following new item: 
‘‘Sec. 36. Small employer contributions to health savings accounts.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made in taxable 
years beginning after December 31, 2005. 
SEC. 4. REFUNDABLE HEALTH INSURANCE COSTS CREDIT. 
(a) ALLOWANCE OF CREDIT.— 
(1) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code 
of 1986 (relating to refundable personal credits) is 
amended by inserting after section 36 the following 
new section: 
‘‘SEC. 36A. HEALTH INSURANCE COSTS FOR UNINSURED IN-
DIVIDUALS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount 
equal to the amount paid by the taxpayer during such tax-
able year for qualified health insurance for the taxpayer 
and the taxpayer’s 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 lesser of— 
‘‘(A) 90 percent of the sum of the amounts 
paid by the taxpayer for qualified health insur-
ance for each individual referred to in sub-
section (a) for coverage months of such indi-
vidual during the taxable year, or 
‘‘(B) $3,000. 
‘‘(2) MONTHLY LIMITATION.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), amounts paid by the taxpayer for 
qualified health insurance for an individual for 
any coverage month of such individual during 
the taxable year shall not be taken into account 
to the extent such amounts exceed the amount 
equal to 1⁄12 of— 
‘‘(i) $1,111 if such individual is the 
taxpayer, 
‘‘(ii) $1,111 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) $1,111 if such individual has at-
tained the age of 24 as of the close of the 
taxable year and is a dependent of the tax-
payer for such taxable year,
‘‘(iv) one-half of the amount described 
in clause (i) if such individual has not at-
tained the age of 24 as of the close of the 
taxable year and is a dependent of the tax-
payer for such taxable year. 
‘‘(B) LIMITATION TO 2 YOUNG DEPEND-
ENTS.—If there are more than 2 individuals de-
scribed in subparagraph (A)(iv) with respect to 
the taxpayer for any coverage month, the aggre-
gate amounts paid by the taxpayer for qualified 
health insurance for such individuals which may 
be taken into account under paragraph (1) shall 
not exceed 1⁄12 of the dollar amount in effect 
under subparagraph (A)(i) for the coverage 
month. 
‘‘(C) SPECIAL RULE FOR MARRIED INDI-
VIDUALS.—In the case of a taxpayer— 
‘‘(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 taxpayer’s spouse at all times during 
the taxable year,
any dollar limitation imposed under this para-
graph on amounts paid for qualified health in-
surance for individuals described in subpara-
graph (A)(iv) shall be divided equally between 
the taxpayer and the taxpayer’s spouse unless 
they agree on a different division. 
‘‘(3) INCOME PHASEOUT OF CREDIT PERCENT-
AGE FOR ONE-PERSON COVERAGE.— 
‘‘(A) PHASEOUT FOR UNMARRIED INDIVID-
UALS (OTHER THAN SURVIVING SPOUSES AND 
HEADS OF HOUSEHOLDS).—In the case of an 
individual (other than a surviving spouse, the 
head of a household, or a married individual) 
with one-person coverage, if such individual has 
modified adjusted gross income— 
‘‘(i) in excess of $15,000 for a taxable 
year but not in excess of $20,000, the 90 
percent under paragraph (1)(B) shall be 
reduced by the number of percentage 
points which bears the same ratio to 40 
percentage points as— 
‘‘(I) the excess of modified ad-
justed gross income in excess of 
$15,000, bears to 
‘‘(II) $5,000, or
‘‘(ii) in excess of $20,000 for a tax-
able year, the 90 percent under paragraph 
(1)(B) shall be reduced by the sum of 40 
percentage points plus the number of per-
centage points which bears the same ratio 
to 50 percentage points as— 
‘‘(I) the excess of modified ad-
justed gross income in excess of 
$20,000, bears to 
‘‘(II) $10,000. 
‘‘(B) PHASEOUT
FOR
OTHER
INDIVID-
UALS.—In the case of a taxpayer (other than 
an individual described in subparagraph (A) or 
(C)) with one-person coverage, if the taxpayer 
has modified adjusted gross income in excess of 
$25,000 for a taxable year, the 90 percent 
under paragraph (1)(B) shall be reduced by the 
number of percentage points which bears the 
same ratio to 90 percentage points as— 
‘‘(i) the excess of modified adjusted 
gross income in excess of $25,000, bears to 
‘‘(ii) $15,000. 
‘‘(C) MARRIED
FILING
SEPARATE
RE-
TURN.—In the case of a taxpayer who is mar-
ried filing a separate return for the taxable year
and who has one-person coverage, if the tax-
payer has modified adjusted gross income in ex-
cess of $12,500 for the taxable year, the 90 
percent under paragraph (1)(B) shall be re-
duced by the number of percentage points 
which bears the same ratio to 90 percentage 
points as— 
‘‘(i) the excess of modified adjusted 
gross income in excess of $12,500, bears to 
‘‘(ii) $7,500. 
‘‘(4) INCOME PHASEOUT OF CREDIT PERCENT-
AGE FOR COVERAGE OF MORE THAN ONE PERSON.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), in the case of a taxpayer 
with coverage of more than one person, if the 
taxpayer has modified adjusted gross income in 
excess of $25,000 for a taxable year, the 90 
percent under paragraph (1)(B) shall be re-
duced by the number of percentage points 
which bears the same ratio to 90 percentage 
points as— 
‘‘(i) the excess of modified adjusted 
gross income in excess of $25,000, bears to 
‘‘(ii) $35,000.
‘‘(B) MARRIED
FILING
SEPARATE
RE-
TURN.—In the case of a taxpayer who is mar-
ried filing a separate return for the taxable year 
and who has coverage of more than one person, 
if the taxpayer has modified adjusted gross in-
come in excess of $12,500 for the taxable year, 
the 90 percent under paragraph (1)(B) shall be 
reduced by the number of percentage points 
which bears the same ratio to 90 percentage 
points as— 
‘‘(i) the excess of modified adjusted 
gross income in excess of $12,500, bears to 
‘‘(ii) $17,500. 
‘‘(5) ROUNDING.—Any percentage resulting 
from a reduction under paragraphs (3) and (4) shall 
be rounded to the nearest one-tenth of a percent. 
‘‘(6) MODIFIED
ADJUSTED
GROSS
INCOME.— 
The term ‘modified adjusted gross income’ means 
adjusted gross income determined— 
‘‘(A) without regard to this section and 
sections 911, 931, and 933, and 
‘‘(B) after application of sections 86, 135, 
137, 219, 221, and 469. 
‘‘(c) COVERAGE MONTH.—For purposes of this sec-
tion—