H.R. 3962/Division A/Title V/Subtitle A/Part 1/Subpart A

SUBPART A — INDIVIDUAL RESPONSIBILITY

Sec. 501. Tax on Individuals Without Acceptable Health Care Coverage.

(a) 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 − Health Care Related Taxes

``subpart a. tax on individuals without acceptable health care coverage.

``Subpart A − Tax on Individuals Without Acceptable Health Care Coverage

``Sec. 59B. Tax on individuals without acceptable health care coverage.

``SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

``(a) Tax Imposed.—In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of—

``(1) the taxpayer’s modified adjusted gross income for the taxable year, over

``(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer.

``(b) Limitations.—

``(1) TAX LIMITED TO AVERAGE PREMIUM.—

``(A) IN GENERAL.—The tax imposed under subsection (a) with respect to any taxpayer for any taxable year shall not exceed the applicable national average premium for such taxable year.

``(B) APPLICABLE NATIONAL AVERAGE PREMIUM.—

``(i) IN GENERAL.—For purposes of subparagraph (A), the ‘applicable national average premium’ means, with respect to any taxable year, the average premium (as determined by the Secretary, in coordination with the Health Choices Commissioner) for self-only coverage under a basic plan which is offered in a Health Insurance Exchange for the calendar year in which such taxable year begins.

``(ii) FAILURE TO PROVIDE COVERAGE FOR MORE THAN ONE INDIVIDUAL.—In the case of any taxpayer who fails to meet the requirements of subsection (d) with respect to more than one individual during the taxable year, clause (i) shall be applied by substituting ‘family coverage’ for ‘self-only coverage’.

``(2) PRORATION FOR PART YEAR FAILURES.—The tax imposed under subsection (a) with respect to any taxpayer for any taxable year shall not exceed the amount which bears the same ratio to the amount of tax so imposed (determined without regard to this paragraph and after application of paragraph (1)) as—

``(A) the aggregate periods during such taxable year for which such individual failed to meet the requirements of subsection (d), bears to

``(B) the entire taxable year.

``(c) Exceptions.—

``(1) DEPENDENTS.—Subsection (a) shall not apply to any individual for any taxable year if a deduction is allowable under section 151 with respect to such individual to another taxpayer for any taxable year beginning in the same calendar year as such taxable year.

``(2) NONRESIDENT ALIENS.—Subsection (a) shall not apply to any individual who is a nonresident alien.

``(3) INDIVIDUALS RESIDING OUTSIDE UNITED STATES.—Any qualified individual (as defined in section 911(d)) (and any qualifying child residing with such individual) shall be treated for purposes of this section as covered by acceptable coverage during the period described in subparagraph (A) or (B) of section 911(d)(1), whichever is applicable.

``(4) INDIVIDUALS RESIDING IN POSSESSIONS OF THE UNITED STATES.—Any individual who is a bona fide resident of any possession of the United States (as determined under section 937(a)) for any taxable year (and any qualifying child residing with such individual) shall be treated for purposes of this section as covered by acceptable coverage during such taxable year.

``(5) RELIGIOUS CONSCIENCE EXEMPTION.—

``(A) IN GENERAL.—Subsection (a) shall not apply to any individual (and any qualifying child residing with such individual) for any period if such individual has in effect an exemption which certifies that such individual is a member of a recognized religious sect or division thereof described in section 1402(g)(1) and an adherent of established tenets or teachings of such sect or division as described in such section.

``(B) EXEMPTION.—An application for the exemption described in subparagraph (A) shall be filed with the Secretary at such time and in such form and manner as the Secretary may prescribe. The Secretary may treat an application for exemption under section 1402(g)(1) as an application for exemption under this section, or may otherwise coordinate applications under such sections, as the Secretary determines appropriate. Any such exemption granted by the Secretary shall be effective for such period as the Secretary determines appropriate.

``(d) Acceptable Coverage Requirement.—

``(1) IN GENERAL.—The requirements of this subsection are met with respect to any individual for any period if such individual (and each qualifying child of such individual) is covered by acceptable coverage at all times during such period.

``(2) ACCEPTABLE COVERAGE.—For purposes of this section, the term ‘acceptable coverage’ means any of the following:

``(A) QUALIFIED HEALTH BENEFITS PLAN COVERAGE.—Coverage under a qualified health benefits plan (as defined in section 100(c) of the Affordable Health Care for America Act).

``(B) GRANDFATHERED HEALTH INSURANCE COVERAGE; COVERAGE UNDER GRANDFATHERED EMPLOYMENT-BASED HEALTH PLAN.—Coverage under a grandfathered health insurance coverage (as defined in subsection (a) of section 202 of the Affordable Health Care for America Act) or under a current employment-based health plan (within the meaning of subsection (b) of such section).

``(C) MEDICARE.—Coverage under part A of title XVIII of the Social Security Act.

``(D) MEDICAID.—Coverage for medical assistance under title XIX of the Social Security Act.

``(E) MEMBERS OF THE ARMED FORCES AND DEPENDENTS (INCLUDING TRICARE).—Coverage under chapter 55 of title 10, United States Code, including similar coverage furnished under section 1781 of title 38 of such Code.

``(F) VA.—Coverage under the veteran’s health care program under chapter 17 of title 38, United States Code.

``(G) MEMBERS OF INDIAN TRIBES.—Health care services made available through the Indian Health Service, a tribal organization (as defined in section 4 of the Indian Health Care Improvement Act), or an urban Indian organization (as defined in such section) to members of an Indian tribe (as defined in such section).

``(H) OTHER COVERAGE.—Such other health benefits coverage as the Secretary, in coordination with the Health Choices Commissioner, recognizes for purposes of this subsection.

``(e) Other Definitions and Special Rules.—

``(1) QUALIFYING CHILD.—For purposes of this section, the term ‘qualifying child’ has the meaning given such term by section 152(c). With respect to any period during which health coverage for a child must be provided by an individual pursuant to a child support order, such child shall be treated as a qualifying child of such individual (and not as a qualifying child of any other individual).

``(2) BASIC PLAN.—For purposes of this section, the term ‘basic plan’ has the meaning given such term under section 100(c) of the Affordable Health Care for America Act.

``(3) HEALTH INSURANCE EXCHANGE.—For purposes of this section, the term ‘Health Insurance Exchange’ has the meaning given such term under section 100(c) of the Affordable Health Care for America Act, including any State-based health insurance exchange approved for operation under section 308 of such Act.

``(4) FAMILY COVERAGE.—For purposes of this section, the term ‘family coverage’ means any coverage other than self-only coverage.

``(5) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this section, the term ‘modified adjusted gross income’ means adjusted gross income increased by—

``(A) any amount excluded from gross income under section 911, and

``(B) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax.

``(6) NOT TREATED AS TAX IMPOSED BY THIS CHAPTER FOR CERTAIN PURPOSES.—The tax imposed under this section shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.

``(f) Regulations.—The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance (developed in coordination with the Health Choices Commissioner) which provide—

``(1) exemption from the tax imposed under subsection (a) in cases of de minimis lapses of acceptable coverage, and

``(2) a waiver of the application of subsection (a) in cases of hardship, including a process for applying for such a waiver.´´.

(b) Information Reporting.—

(1) IN GENERAL.—

Subpart B of part III of subchapter A of chapter 61 of such Code is amended by inserting after section 6050W the following new section:

``SEC. 6050X. Returns relating to health insurance coverage.

``(a) Requirement of reporting.—Every person who provides acceptable coverage (as defined in section 59B(d)) to any individual during any calendar year shall, at such time as the Secretary may prescribe, make the return described in subsection (b) with respect to such individual.

``(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 prescribe, and

``(2) contains—

``(A) the name, address, and TIN of the primary insured and the name of each other individual obtaining coverage under the policy,

``(B) the period for which each such individual was provided with the coverage referred to in subsection (a), and

``(C) such other information as the Secretary may require.

``(c) Statements to be furnished to individuals with respect to whom information is required.—Every person required to make a return under subsection (a) shall furnish to each primary insured whose name is required to be set forth in such return a written statement showing—

``(1) the name and address of the person required to make such return and the phone number of the information contact for such person, and

``(2) the information required to be shown on the return with respect to such individual.

``The written statement required under the preceding sentence 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.

``(d) Coverage provided by governmental units.—In the case of coverage provided by any governmental unit or any agency or instrumentality thereof, the officer or employee who enters into the agreement to provide such coverage (or the person appropriately designated for purposes of this section) shall make the returns and statements required by this section.´´.

(2) PENALTY FOR FAILURE TO FILE.—

(A) RETURN.—

Subparagraph (B) of section 6724(d)(1) of such Code is amended by striking “or” at the end of clause (xxii), by striking “and” at the end of clause (xxiii) and inserting “or”, and by adding at the end the following new clause:

``(xxiv) section 6050X (relating to returns relating to health insurance coverage), and´´.

(B) STATEMENT.—

Paragraph (2) of section 6724(d) of such Code is amended by striking “or” at the end of subparagraph (EE), by striking the period at the end of subparagraph (FF) and inserting “, or”, and by inserting after subparagraph (FF) the following new subparagraph:

``(GG) section 6050X (relating to returns relating to health insurance coverage).´´.

(c) Return Requirement.—

Subsection (a) of section 6012 of such Code is amended by inserting after paragraph (9) the following new paragraph:

``(10) Every individual to whom section 59B(a) applies and who fails to meet the requirements of section 59B(d) with respect to such individual or any qualifying child (as defined in section 152(c)) of such individual.´´.

(d) Clerical Amendments.—

(1) The table of parts for subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

``PART VIII. HEALTH CARE RELATED TAXES.´´.

(2) The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by adding at the end the following new item:

``Sec. 6050X. Returns Relating to Health Insurance Coverage.´´.

(e) Section 15 Not to Apply.—

The amendment made by subsection (a) shall not be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986.

(f) Effective Date.—

(1) IN GENERAL.—

The amendments made by this section shall apply to taxable years beginning after December 31, 2012.

(2) RETURNS.—

The amendments made by subsection (b) shall apply to calendar years beginning after December 31, 2012.