I 
110TH CONGRESS 
1ST SESSION H. R. 2737 
To amend the Internal Revenue Code of 1986 to allow previously uninsured 
individuals a refundable credit for health insurance costs and to provide 
tax incentives to encourage small business health plans. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 15, 2007 
Mr. BOSWELL (for himself and Mr. BISHOP of Georgia) 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 allow pre-
viously uninsured individuals a refundable credit for 
health insurance costs and to provide tax incentives to 
encourage small business health plans. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Health Care Relief 
Act of 2007’’. 
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SEC. 2. REFUNDABLE CREDIT FOR HEALTH INSURANCE 
COSTS OF PREVIOUSLY UNINSURED INDIVID-
UALS. 
(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 redesignating section 36 as section 37 
and by inserting after section 35 the following new 
section: 
‘‘SEC. 36. HEALTH INSURANCE COSTS OF PREVIOUSLY UN-
INSURED INDIVIDUALS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a pre-
viously uninsured individual, there shall be allowed as a 
credit against the tax imposed by this subtitle for the tax-
able year an amount equal to the amount paid by the tax-
payer during such taxable year for health insurance cov-
erage for the taxpayer and the taxpayer’s spouse and de-
pendents. 
‘‘(b) LIMITATION.—The amount allowed as a credit 
under subsection (a) for the taxable year shall not exceed 
$1,000 ($2,000 in the case of a joint return filed by 2 
previously uninsured individuals). 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) PREVIOUSLY
UNINSURED
INDIVIDUAL.— 
The term ‘previously uninsured individual’ means 
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any individual who had no health insurance coverage 
at any time during the 6-month period before the 
earliest date that such individual has health insur-
ance coverage by reason of the payments taken into 
account under subsection (a). 
‘‘(2) HEALTH
INSURANCE
COVERAGE.—The 
term ‘health insurance coverage’ has the meaning 
given to such term by section 9832(b)(1). 
‘‘(d) SPECIAL RULES.— 
‘‘(1) COORDINATION WITH OTHER BENEFITS.— 
The amount which would (but for this paragraph) be 
taken into account by the taxpayer under sections 
35, 162(l), 213, 220, or 223 for the taxable year 
shall be reduced by the credit 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.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting ‘‘, 
36,’’ after ‘‘35’’. 
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(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: 
‘‘Sec. 36. Health insurance costs of previously uninsured individuals. 
‘‘Sec. 37. Overpayments of tax.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 3. CREDIT FOR HEALTH INSURANCE EXPENSES OF 
SMALL BUSINESSES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business-related credits) is amended by 
adding at the end the following: 
‘‘SEC. 45O. SMALL BUSINESS HEALTH INSURANCE EX-
PENSES. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a small employer, the health insurance credit 
determined under this section for the taxable year is an 
amount equal to 35 percent of the expenses paid by the 
taxpayer during the taxable year for health insurance cov-
erage for such year provided under a new health plan for 
employees of such employer. 
‘‘(b) LIMITATIONS.— 
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‘‘(1) PER
EMPLOYEE
DOLLAR
LIMITATION.— 
The amount of expenses taken into account under 
subsection (a) with respect to any employee for any 
taxable year shall not exceed— 
‘‘(A) $800 in the case of self-only coverage, 
and 
‘‘(B) $2,000 in the case of family coverage. 
In the case of an employee who is covered by a new 
health plan of the employer for only a portion of 
such taxable year, the limitation under the preceding 
sentence shall be an amount which bears the same 
ratio to such limitation (determined without regard 
to this sentence) as such portion bears to the entire 
taxable year. 
‘‘(2) PERIOD OF COVERAGE.—Expenses may be 
taken into account under subsection (a) only with 
respect to coverage for the 4-year period beginning 
on the date the employer establishes a new health 
plan. 
‘‘(3) EMPLOYER MUST BEAR 65 PERCENT OF 
COST.—Expenses may be taken into account under 
subsection (a) only if at least 65 percent of the cost 
of the coverage (without regard to this section) is 
borne by the employer. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
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‘‘(1) HEALTH
INSURANCE
COVERAGE.—The 
term ‘health insurance coverage’ has the meaning 
given such term by section 9832(b)(1). 
‘‘(2) NEW HEALTH PLAN.— 
‘‘(A) IN GENERAL.—The term ‘new health 
plan’ means any arrangement of the employer 
which provides health insurance coverage to em-
ployees if— 
‘‘(i) such employer (and any prede-
cessor employer) did not establish or main-
tain such arrangement (or any similar ar-
rangement) at any time during the 2 tax-
able years ending prior to the taxable year 
in which the credit under this section is 
first allowed, and 
‘‘(ii) 
such 
arrangement 
provides 
health insurance coverage to at least 70 
percent of the qualified employees of such 
employer. 
‘‘(B) QUALIFIED
EMPLOYEE.—The term 
‘qualified employee’ means any employee of an 
employer and shall include a leased employee 
within the meaning of section 414(n). 
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‘‘(3) SMALL EMPLOYER.—The term ‘small em-
ployer’ has the meaning given to such term by sec-
tion 4980D(d)(2); except that— 
‘‘(A) only qualified employees shall be 
taken into account, and 
‘‘(B) such section shall be applied by sub-
stituting ‘100 employees’ for ‘50 employees’. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) CERTAIN RULES MADE APPLICABLE.—For 
purposes of this section, rules similar to the rules of 
section 52 shall apply. 
‘‘(2) AMOUNTS
PAID
UNDER
SALARY
REDUC-
TION ARRANGEMENTS.—No amount paid or incurred 
pursuant to a salary reduction arrangement shall be 
taken into account under subsection (a). 
‘‘(3) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2008, each dollar amount contained in subsection 
(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 2006’ for 
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‘calendar year 1992’ in subparagraph (B) 
thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$50. 
‘‘(e) TERMINATION.—This section shall not apply to 
expenses paid or incurred by an employer with respect to 
any arrangement established on or after January 1, 
2014.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of such Code (relating to current 
year business credit) is amended by striking ‘‘plus’’ at the 
end of paragraph (30), by striking the period at the end 
of paragraph (31) and inserting ‘‘, plus’’, and by adding 
at the end the following: 
‘‘(32) in the case of a small employer (as de-
fined in section 45O(c)(3)), the health insurance 
credit determined under section 45O(a).’’. 
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 
such Code is amended by adding at the end the following 
new subsection: 
‘‘(e) CREDIT FOR SMALL BUSINESS HEALTH INSUR-
ANCE EXPENSES.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the expenses (otherwise al-
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lowable as a deduction) taken into account in deter-
mining the credit under section 45O for the taxable 
year which is equal to the amount of the credit de-
termined for such taxable year under section 
45O(a). 
‘‘(2) CONTROLLED
GROUPS.—Persons treated 
as a single employer under subsection (a) or (b) of 
section 52 shall be treated as 1 person for purposes 
of this section.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing: 
‘‘Sec. 45O. Small business health insurance expenses.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2007, for ar-
rangements established after the date of the enactment 
of this Act. 
Æ 
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