‘‘(1) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—The amount which would (but for this 
paragraph) be taken into account by the taxpayer 
under section 213 for the taxable year shall be re-
duced by the credit (if any) allowed by this section 
to the taxpayer for such year. 
‘‘(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) 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. 
‘‘(5) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2005, each dollar amount contained in subsection
(b)(3)(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 2004’ 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 
($25 in the case of the dollar amount in subsection 
(b)(3)(B)(iii)).’’. 
(b) INFORMATION REPORTING.—
(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 of such Code (relating 
to information concerning transactions with other 
persons) is amended by inserting after section 
6050T the following new section: 
‘‘SEC. 6050U. 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-
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(d)) other than—
‘‘(1) insurance under a subsidized group health 
plan maintained by an employer, or
‘‘(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 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 
‘‘(2) 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 
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 (xiii) 
through (xviii) as clauses (xiv) through (xix), 
respectively, and by inserting after clause (xii) 
the following new clause: 
‘‘(xiii) section 6050U (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 ‘‘or’’ at the 
end of the next to last subparagraph, by strik-
ing the period at the end of the last subpara-
graph and inserting ‘‘, or’’, and by adding at 
the end the following new subparagraph: 
‘‘(CC) section 6050U(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 
chapter 61 of such Code is amended by inserting
after the item relating to section 6050T the fol-
lowing new item:
‘‘Sec. 6050U. 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 such Code is 
amended by redesignating the item relating to sec-
tion 36 as an item relating to section 37 and by in-
serting after section 35 the following new item:
‘‘Sec. 36. Health insurance costs.’’.
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
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: 
‘‘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(d)), 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 
‘‘(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 such Code 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 year beginning after the 
date of the enactment of this Act.
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