II 114th CONGRESS 2d Session S. 2762 IN THE SENATE OF THE UNITED STATES April 7, 2016 Mr. Coats (for himself and Mr. Barrasso ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide for full recapture of the refundable credit for coverage under a qualified health plan in the case of individuals who are not lawfully present in the United States or who are incarcerated.

1. Short title This Act may be cited as the Recovering Erroneous Credits from Outlaws and Unlawful Persons Act of 2016 or the RECOUP Act of 2016 . 2. Recapture of refundable credit for coverage under a qualified health plan (a) In general Subsection (e) of section 36B of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (4) Recapture of improperly paid advance payments Notwithstanding subsection (f)(2)(B), if any advance payment is made under section 1412 of the Patient Protection and Affordable Care Act for a coverage month in a taxable year with respect to 1 or more individuals— (A) who are not lawfully present, or (B) who are incarcerated, other than incarceration pending the disposition of charges, the tax imposed by this chapter for the taxable year shall be increased by the total amount of such payment which is attributable to such individuals. The preceding sentence shall apply to a coverage month only if the individual is described in subparagraph (A) or (B) for the entire month. Subparagraph (B) shall apply without regard to whether the individual was incarcerated at the time of enrollment in the plan. . (b) Clarification of treatment of incarcerated individuals Subsection (e) of section 36B of the Internal Revenue Code of 1986, as amended by subsection (a), is amended— (1) by striking individuals not lawfully present in the heading and inserting certain ineligible individuals , (2) by striking In general in the heading of paragraph (1) and inserting Individuals not lawfully present , (3) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively, and (4) by inserting after paragraph (2) the following new paragraph: (3) Incarcerated individuals (A) In general If 1 or more individuals for whom a taxpayer is allowed a deduction under section 151 for the taxable year (including the taxpayer or the taxpayer's spouse) are incarcerated (other than incarceration pending the disposition of charges) during any coverage month in such year, the aggregate amount of premiums otherwise taken into account under clauses (i) and (ii) of subsection (b)(2)(A) shall be reduced by the portion (if any) of such premiums which is attributable to such individuals for such month. (B) Reporting with respect to prisoner information The determination of whether an individual is incarcerated for a coverage month shall be based on the information provided to the Secretary under section 6116. . (c) Conforming amendment Subparagraph (B) of section 36B(f)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new clause: (iii) Exception For taxpayers to whom this subparagraph does not apply, see subsection (f)(5). . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.