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 
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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 lowest premium in effect for the calendar 
year in which the taxable year begins (for the type 
of coverage involved) for any basic plan in the 
AHBP region involved, as determined by the Com-
missioner of Health Benefits. 
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‘‘(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)). 
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‘‘(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 
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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) DENIAL
OF CREDIT
TO DEPENDENTS.—No 
credit shall be allowed under this section to any individual 
with respect to whom a deduction under section 151 is 
allowable to another taxpayer for a taxable year beginning 
in the calendar year in which such individual’s taxable 
year begins. 
‘‘(g) 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.— 
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(A) Paragraph (2) of section 1324(b) of 
title 31, United States Code, is amended by in-
serting ‘‘or 36’’ after ‘‘section 35’’. 
(B) The table of section for subpart C of 
part IV of subchapter A of chapter 1 of the In-
ternal Revenue Code of 1986 is amended by 
striking the item relating to section 36 and in-
serting the following new items: 
‘‘Sec. 36. Subsidy and prepayment of American Health Benefits premiums. 
‘‘Sec. 37. Overpayments of tax.’’. 
(c) EMPLOYER FUNDING.— 
(1) IN GENERAL.—Subtitle C of the Internal 
Revenue Code of 1986 (relating to employment 
taxes) is amended by redesignating chapter 25 as 
chapter 26 and by inserting after chapter 24 the fol-
lowing new chapter: 
‘‘CHAPTER 25—AMERICAN HEALTH 
BENEFITS PROGRAM 
‘‘Sec. 3451. Tax on employers. 
‘‘Sec. 3452. Refund of tax in case of qualified employer-provided coverage. 
‘‘Sec. 3453. Instrumentalities of the United States. 
‘‘SEC. 3451. TAX ON EMPLOYERS. 
‘‘(a) IMPOSITION
OF TAX.—In addition to other 
taxes, there is hereby imposed on every employer an excise 
tax, with respect to having individuals in his employ, equal 
to the applicable percentage of the wages paid by him with 
respect to employment. 
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‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘applicable per-
centage’ means, with respect to wages paid during 
any taxable year of an employer of a specified firm 
size and average earnings per employee, the percent-
age determined in accordance with the following 
table: 
‘‘Applicable percentage (in percent) 
A firm size of: 
Average 
earnings per 
employee of 
$21,000 or 
less: 
Average 
earnings per 
employee of 
more than 
$21,000 and 
not in 
excess of 
$42,000: 
Average 
earnings per 
employee of 
more than 
$42,000 and 
not in 
excess of 
$83,000: 
Average 
earnings per 
employee of 
more than 
$83,000: 
Less than 10 ...........
4.00 
5.00 
6.00 
8.75 
10 through 25 ........
4.25 
5.25 
6.75 
9.50 
26 through 49 ........
4.50 
5.50 
7.25 
10.00 
50 through 199 ......
4.75 
5.75 
8.00 
10.00 
200 through 499 ....
5.00 
6.00 
8.75 
10.00 
500 or more ............
5.25 
6.25 
9.50 
10.00 
‘‘(2) FIRM SIZE.—The term ‘firm size’ means, 
with respect to any employer for any taxable year, 
the average number of employees employed by such 
person during the 3 taxable years preceding such 
taxable year. 
‘‘(3) AVERAGE
EARNINGS
PER
EMPLOYEE.— 
With respect to any employer for any taxable year— 
‘‘(A) IN
GENERAL.—The term ‘average 
earnings per employee’ means the average earn-
ings of such employer for such taxable year di-
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vided by the firm size of such employer for such 
taxable year. 
‘‘(B) AVERAGE EARNINGS.—The term ‘av-
erage earnings’ means the average taxable in-
come of the employer for the 3 taxable years 
preceding such taxable year. 
‘‘(4) AGGREGATION RULE.—All persons treated 
as a single employer under subsection (a) or (b) of 
section 52, or subsection (m) or (o) of section 414, 
shall be treated as one person. 
‘‘(5) INFLATION ADJUSTMENT.—In the case of 
a taxable year beginning after December 31, 2011, 
each of the dollar amounts in the table contained in 
paragraphs (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-
mined by substituting ‘calendar year 2010’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
If any amount as increased under the preceding sen-
tence is not a multiple of $100, such amount shall 
be rounded to the nearest multiple of $100. 
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‘‘(c) NO COVER OVER TO POSSESSIONS.—Notwith-
standing any other provision of law, no amount collected 
under this chapter shall be covered over to any possession 
of the United States. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
chapter, the terms ‘wages’, ‘employer’, and ‘employment’ 
have the same respective meanings as when used in chap-
ter 21 and section 3121(a)(1) shall apply for purposes of 
this chapter in the same manner as such section applies 
for purposes of section 3101(a) and 3111(a). 
‘‘SEC. 3452. REFUND OF TAX IN CASE OF QUALIFIED EM-
PLOYER-PROVIDED COVERAGE. 
‘‘(a) IN GENERAL.—In the case of a person subject 
to tax under section 3451 or section 1401(c), there shall 
be allowed as a credit against the tax imposed by such 
section an amount equal to the tax imposed under such 
section with respect to the wages or self-employment in-
come of individuals for periods during which the individual 
is covered by qualified employer-provided coverage (which 
is provided by such person). 
‘‘(b) 
QUALIFIED
EMPLOYER-PROVIDED
COV-
ERAGE.—For purposes of subsection (a), the term ‘quali-
fied employer-provided coverage’ has the meaning given 
that term in section 2207(6) of the Social Security Act. 
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‘‘SEC. 3453. INSTRUMENTALITIES OF THE UNITED STATES. 
‘‘Notwithstanding any other provision of law (wheth-
er enacted before or after the enactment of this section) 
which grants to any instrumentality of the United States 
an exemption from taxation, such instrumentality shall 
not be exempt from the tax imposed by section 3451 un-
less such other provision of law grants a specific exemp-
tion, by reference to section 3451, from the tax imposed 
by such section.’’. 
(2) SELF-EMPLOYMENT.—Section 1401 of such 
Code is amended by redesignating subsection (c) as 
subsection (d) and by inserting after subsection (b) 
the following new subsection: 
‘‘(c) AMERICAN HEALTH BENEFITS PROGRAM.—In 
addition to other taxes, there shall be imposed for each 
taxable year, on the self-employment income of every indi-
vidual, a tax equal to the applicable percentage (as defined 
in section 3451(b)) of the amount of the self-employment 
income for such taxable year.’’. 
(3) CLERICAL
AMENDMENT.—The table of 
chapters for subtitle C of such Code is amended by 
striking the item relating to chapter 25 and insert-
ing the following: 
‘‘CHAPTER 25—AMERICAN HEALTH BENEFITS PROGRAM 
‘‘CHAPTER 26—GENERAL PROVISIONS RELATING TO EMPLOYMENT TAXES’’. 
(d) ADDITIONAL TAX ON HOSPITAL REVENUES.— 
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(1) IN GENERAL.—Subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new part: 
‘‘PART VIII—TAX ON HOSPITAL REVENUES 
‘‘Sec. 59B. Tax on hospital revenues. 
‘‘SEC. 59B. TAX ON HOSPITAL REVENUES. 
‘‘(a) IN GENERAL.—In the case of a corporation, 
there is hereby imposed (in addition to any other tax im-
posed by this subtitle) a tax equal to 2 percent of the hos-
pital revenues of such corporation. 
‘‘(b) HOSPITAL REVENUES.—For purposes of this 
section, the term ‘hospital revenues’means, with respect 
to any corporation for any taxable year, the excess (if any) 
of— 
‘‘(1) so much of such corporation’s gross in-
come for such taxable year as is derived from the 
operation of one or more hospitals (as defined in 
section 1861(e) of the Social Security Act), over 
‘‘(2) so much of the deductions allowed under 
this chapter for such taxable year as are properly al-
locable to such income. 
‘‘(c) SECTION 15 NOT TO APPLY.—Section 15 shall 
not apply to the tax imposed by this section.’’. 
(2) CONFORMING AMENDMENTS.— 
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(A) Section 26(b)(2) of the Internal Rev-
enue Code of 1986 is amended by striking 
‘‘and’’ at the end of subparagraph (U), by 
striking the period at the end of subparagraph 
(V) and inserting ‘‘, and’’, and by adding at the 
end the following new subparagraph: 
‘‘(W) section 59B (relating to tax on hos-
pital revenues).’’. 
(B) Section 30A(c) of such Code is amend-
ed by striking ‘‘or’’ at the end of paragraph (3), 
by striking the period at the end of paragraph 
(4) and inserting ‘‘, or’’, and by adding at the 
end the following new paragraph: 
‘‘(5) section 59B (relating to tax on hospital 
revenues).’’. 
(C) Section 882(a)(1) of such Code is 
amended by inserting ‘‘59B,’’ after ‘‘59A,’’. 
(D) Section 936(a)(3) of such Code is 
amended by striking ‘‘or’’ at the end of sub-
paragraph (C), by striking the period at the end 
of subparagraph (D) and inserting ‘‘, or’’, and 
by adding at the end the following new sub-
paragraph: 
‘‘(E) section 59B (relating to tax on hos-
pital revenues).’’. 
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(E) Section 6425(c)(1)(A) of such Code is 
amended by striking ‘‘plus’’ at the end of clause 
(ii), by striking ‘‘over’’ at the end of clause (iii) 
and inserting ‘‘plus’’, and by adding at the end 
the following new clause: 
‘‘(iv) the tax imposed by section 59B, 
over’’. 
(F) Section 6655(g)(1)(A) of such Code is 
amended by striking ‘‘plus’’ at the end of clause 
(iii), by redesignating clause (iv) as clause (v), 
and by inserting after clause (iii) the following 
new clause: 
‘‘(iv) the tax imposed by section 59B, 
plus’’. 
(G) 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—TAX ON HOSPITAL REVENUES’’. 
(e) DISCLOSURE OF TAXPAYER RETURN INFORMA-
TION TO CARRY OUT COST-SHARING SUBSIDIES.— 
(1) IN GENERAL.—Section 6103(l) of the Inter-
nal Revenue Code of 1986 is amended by adding at 
the end the following new paragraph: 
‘‘(21) DISCLOSURE OF RETURN INFORMATION 
TO CARRY OUT AMERICAN HEALTH BENEFITS PRO-
GRAM.— 
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‘‘(A) IN GENERAL.—The Secretary shall, 
upon written request from the Commissioner of 
Health Benefits, disclose to officers, employees, 
and contractors of the Health Benefits Admin-
istration return information of a taxpayer who 
is, according to the records of the Secretary, a 
cost-sharing subsidy-eligible individual (as de-
fined in section 2205(b)(7)(A) of the Social Se-
curity Act) or a family member of such an indi-
vidual. Such return information shall be limited 
to— 
‘‘(i) taxpayer identity information 
with respect to such taxpayer, 
‘‘(ii) the filing status of such tax-
payer, 
‘‘(iii) the adjusted gross income of 
such taxpayer, 
‘‘(iv) the amounts excluded from such 
taxpayer’s gross income under sections 135 
and 911 to the extent such information is 
available, 
‘‘(v) the interest received or accrued 
during the taxable year which is exempt 
from the tax imposed by chapter 1 to the 
extent such information is available, 
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‘‘(vi) the amounts excluded from such 
taxpayer’s gross income by sections 931 
and 933 to the extent such information is 
available, and 
‘‘(vii) the taxable year with respect to 
which the preceding information relates. 
‘‘(B) RESTRICTION ON USE OF DISCLOSED 
INFORMATION.—Return information disclosed 
under subparagraph (A) may be used by offi-
cers, employees, and contractors of the Health 
Benefits Administration only for the purposes 
of, and to the extent necessary in, establishing 
the appropriate amount of any cost-sharing 
subsidies under section 2205 of the Social Secu-
rity Act.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (3) of section 6103(a) of 
such Code is amended by striking ‘‘or (20)’’ 
and inserting ‘‘(20), or (21)’’. 
(B) Paragraph (4) of section 6103(p) of 
such Code is amended by striking ‘‘(l)(16), 
(17), (19), or (20)’’ each place it appears and 
inserting ‘‘(l)(16), (17), (19), (20), or (21)’’. 
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(2) SPECIFIC ISSUES.—The Commission shall 
specifically examine and make recommendations re-
garding each of the following: 
(A) A comparison of AHBP to other public 
health insurance programs (described in section 
2202(b)(2) of the Social Security Act) and the 
feasibility and desirability of their integration 
into AHBP. 
(B) The proper implementation and utili-
zation of electronic medical records and other 
health information technologies, including pri-
vacy and interoperability issues. 
(C) The effects of medical malpractice in-
surance and ‘‘defensive medicine’’ on the deliv-
ery and cost of health care. 
(D) The patterns and effects of overutiliza-
tion on AHBP. 
(E) Cost and implementation factors of re-
tiree health coverage under AHBP. 
(F) A comparison of prescription drug 
prices under AHBP with such prices under 
other public health programs. 
(G) The effects of insurance monopolies on 
healthcare costs and delivery. 
(c) MEMBERSHIP.— 
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upon the request of the Commission, such cost 
estimates as the Commission determines to be 
necessary to carry out its duties. 
(B) The Commission shall reimburse the 
Director of the Congressional Budget Office for 
expenses relating to the employment in the of-
fice of the Director of such additional staff as 
may be necessary for the Director to comply 
with requests by the Commission under sub-
paragraph (A). 
(4) DETAIL OF FEDERAL EMPLOYEES.—Upon 
the request of the Commission, the head of any Fed-
eral agency is authorized to detail, without reim-
bursement, any of the personnel of such agency to 
the Commission to assist the Commission in car-
rying out its duties. Any such detail shall not inter-
rupt or otherwise affect the civil service status or 
privileges of the Federal employee. 
(5) TECHNICAL
ASSISTANCE.—Upon the re-
quest of the Commission, the head of a Federal 
agency shall provide such technical assistance to the 
Commission as the Commission determines to be 
necessary to carry out its duties. 
(6) USE OF MAILS.—The Commission may use 
the United States mails in the same manner and 
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