124 STAT. 909 PUBLIC LAW 111–148—MAR. 23, 2010 markets. By significantly increasing health insurance cov- erage and the size of purchasing pools, which will increase economies of scale, the requirement, together with the other provisions of this Act, will significantly reduce administra- tive costs and lower health insurance premiums. The requirement is essential to creating effective health insur- ance markets that do not require underwriting and elimi- nate its associated administrative costs.’’. (b)(1) Section 5000A(b)(1) of the Internal Revenue Code of 1986, as added by section 1501(b) of this Act, is amended to read as follows: ‘‘(1) IN GENERAL.—If a taxpayer who is an applicable indi- vidual, or an applicable individual for whom the taxpayer is liable under paragraph (3), fails to meet the requirement of subsection (a) for 1 or more months, then, except as provided in subsection (e), there is hereby imposed on the taxpayer a penalty with respect to such failures in the amount deter- mined under subsection (c).’’. (2) Paragraphs (1) and (2) of section 5000A(c) of the Internal Revenue Code of 1986, as so added, are amended to read as follows: ‘‘(1) IN GENERAL.—The amount of the penalty imposed by this section on any taxpayer for any taxable year with respect to failures described in subsection (b)(1) shall be equal to the lesser of— ‘‘(A) the sum of the monthly penalty amounts deter- mined under paragraph (2) for months in the taxable year during which 1 or more such failures occurred, or ‘‘(B) an amount equal to the national average premium for qualified health plans which have a bronze level of coverage, provide coverage for the applicable family size involved, and are offered through Exchanges for plan years beginning in the calendar year with or within which the taxable year ends. ‘‘(2) MONTHLY PENALTY AMOUNTS.—For purposes of para- graph (1)(A), the monthly penalty amount with respect to any taxpayer for any month during which any failure described in subsection (b)(1) occurred is an amount equal to 1⁄12 of the greater of the following amounts: ‘‘(A) FLAT DOLLAR AMOUNT.—An amount equal to the lesser of— ‘‘(i) the sum of the applicable dollar amounts for all individuals with respect to whom such failure occurred during such month, or ‘‘(ii) 300 percent of the applicable dollar amount (determined without regard to paragraph (3)(C)) for the calendar year with or within which the taxable year ends. ‘‘(B) PERCENTAGE OF INCOME.—An amount equal to the following percentage of the taxpayer’s household income for the taxable year: ‘‘(i) 0.5 percent for taxable years beginning in 2014. ‘‘(ii) 1.0 percent for taxable years beginning in 2015. ‘‘(iii) 2.0 percent for taxable years beginning after 2015.’’. 26 USC 5000A.
