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House Health Care Bill (Pages 151-200)

08/14/2009 05:12 am ET | Updated May 25, 2011

House Health Care BIll (Pages 151-200)

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aggregate wages paid by the employer during such calendar year.

(4) AGGREGATIONRULES.--Related employers and predecessors shall be treated as a single employer for purposes of this subsection.

SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.
The Health Choices Commissioner (in coordination with the Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury) shall
have authority to set standards for determining whether employers or insurers are undertaking any actions to affect the risk pool within the Health Insurance Exchange by inducing individuals to decline coverage under a qualified health benefits plan (or current employment-based health plan (within the meaning of section 102(b)) offered by the employer and instead to enroll in an Exchange-participating health benefits plan. An employer violating such standards shall be treated as not meeting the requirements of this section.


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PART 2--SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS

SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.

(a) IN GENERAL.--Subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new part:

''PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS

''SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

''(a) IN GENERAL.--An employer may make an election with the Secretary to be subject to the health coverage participation requirements.

''(b) TIME AND MANNER.--An election under subsection (a) may be made at such time and in such form and manner as the Secretary may prescribe.

''SEC. 802. TREATMENT OF COVERAGE RESULTING FROM
ELECTION.

''(a) IN GENERAL.--If an employer makes an election
to the Secretary under section 801--

''(1) such election shall be treated as the estab-
lishment and maintenance of a group health plan (as

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defined in section 733(a)) for purposes of this title, subject to section 151 of the America's Affordable Health Choices Act of 2009, and

''(2) the health coverage participation requirements shall be deemed to be included as terms and conditions of such plan.

''(b) PERIODIC INVESTIGATIONS TO DISCOVER NON-COMPLIANCE.--The Secretary shall regularly audit a representative sampling of employers and group health plans and conduct investigations and other activities under section 504 with respect to such sampling of plans so as to discover noncompliance with the health coverage participation requirements in connection with such plans. The Secretary shall communicate findings of noncompliance made by the Secretary under this subsection to the Secretary of the Treasury and the Health Choices Commissioner.
The Secretary shall take such timely enforcement action as appropriate to achieve compliance.

''SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
''For purposes of this part, the term 'health coverage participation requirements' means the requirements of part 1 of subtitle B of title III of division A of America's
Affordable Health Choices Act of 2009 (as in effect on the date of the enactment of such Act).

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''SEC. 804. RULES FOR APPLYING REQUIREMENTS.

''(a) AFFILIATEDGROUPS.--In the case of any employer which is part of a group of employers who are treated as a single employer under subsection (b), (c), (m), or
(o) of section 414 of the Internal Revenue Code of 1986, the election under section 801 shall be made by such employer as the Secretary may provide. Any such election, once made, shall apply to all members of such group.

''(b) SEPARATE ELECTIONS.--Under regulations prescribed by the Secretary, separate elections may be made under section 801 with respect to--

''(1) separate lines of business, and

''(2) full-time employees and employees who are not full-time employees.

''SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL NONCOMPLIANCE. ''The Secretary may terminate the election of any employer under section 801 if the Secretary (in coordination with the Health Choices Commissioner) determines that such employer is in substantial noncompliance with the health coverage participation requirements and shall refer any such determination to the Secretary of the Treasury as appropriate.

''SEC. 806. REGULATIONS.

''The Secretary may promulgate such regulations as
may be necessary or appropriate to carry out the provi-

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sions of this part, in accordance with section 324(a) of the America's Affordable Health Choices Act of 2009. The Secretary may promulgate any interim final rules as the Secretary determines are appropriate to carry out this part.''.

(b) ENFORCEMENT OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--Section 502 of such Act (29 U.S.C. 1132) is amended--

(1) in subsection (a)(6), by striking ''paragraph'' and all that follows through ''subsection (c)'' and inserting ''paragraph (2), (4), (5), (6), (7), (8),
(9), (10), or (11) of subsection (c)''; and (2) in subsection (c), by redesignating the second paragraph (10) as paragraph (12) and by inserting after the first paragraph (10) the following new paragraph:
''(11) HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--
''(A) CIVIL PENALTIES.--In the case of any employer who fails (during any period with respect to which an election under section 801(a) is in effect) to satisfy the health coverage participation requirements with respect to any employee, the Secretary may assess a civil penalty against the employer of $100 for each

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day in the period beginning on the date such failure first occurs and ending on the date such failure is corrected.
''(B) HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--For purposes of this paragraph, the term 'health coverage participation requirements' has the meaning provided in section 803.
''(C) LIMITATIONS ON AMOUNT OF PENALTY.--
''(i) PENALTY NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILIGENCE.--No penalty shall be assessed under subparagraph (A) with respect to any failure during any period for which it is established to the satisfaction of the Secretary that the employer did not know, or exercising reasonable diligence would not have known, that such failure existed.
''(ii) PENALTY NOT TO APPLY TO FAILURES CORRECTED WITHIN 30 DAYS.--
No penalty shall be assessed under subparagraph (A) with respect to any failure if--

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''(I) such failure was due to reasonable cause and not to willful neglect, and
''(II) such failure is corrected during the 30-day period beginning on the 1st date that the employer knew, or exercising reasonable diligence would have known, that such failure existed.
''(iii) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES.--In the case of
failures which are due to reasonable cause and not to willful neglect, the penalty assessed under subparagraph (A) for failures during any 1-year period shall not exceed the amount equal to the lesser of--
''(I) 10 percent of the aggregate amount paid or incurred by the em-
ployer (or predecessor employer) during the preceding 1-year period for group health plans, or
''(II) $500,000.
''(D) ADVANCE NOTIFICATION OF FAILURE PRIOR TO ASSESSMENT.--Before a reasonable time prior to the assessment of any penalty

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under this paragraph with respect to any failure by an employer, the Secretary shall inform the employer in writing of such failure and shall provide the employer information regarding efforts and procedures which may be undertaken by the employer to correct such failure.
''(E) COORDINATION WITH EXCISE TAX.-- Under regulations prescribed in accordance with section 324 of the America's Affordable Health Choices Act of 2009, the Secretary and the Secretary of the Treasury shall coordinate
the assessment of penalties under this section in connection with failures to satisfy health coverage participation requirements with the imposition of excise taxes on such failures under section 4980H(b) of the Internal Revenue Code of 1986 so as to avoid duplication of penalties with respect to such failures.
''(F) DEPOSIT OF PENALTY COLLECTED.-- Any amount of penalty collected under this paragraph shall be deposited as miscellaneous receipts in the Treasury of the United States.''.
(c) CLERICAL AMENDMENTS.--The table of contents in section 1 of such Act is amended by inserting after item relating to section 734 the following new items:
''PART8--NATIONALHEALTHCOVERAGEPARTICIPATIONREQUIREMENTS

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''Sec. 801. Election of employer to be subject to national health coverage participation requirements.
''Sec. 802. Treatment of coverage resulting from election.
''Sec. 803. Health coverage participation requirements.
''Sec. 804. Rules for applying requirements.
''Sec. 805. Termination of election in cases of substantial noncompliance.
''Sec. 806. Regulations.''.
(d) EFFECTIVEDATE.--The amendments made by this section shall apply to periods beginning after December 31, 2012.

SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS UNDER THE INTERNAL REVENUE CODE OF 1986.

(a) FAILURE TO ELECT, OR SUBSTANTIALLY COMPLY WITH, HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--For employment tax on employers who fail to elect, or substantially comply with, the health coverage participation requirements described in part 1, see section 3111(c) of the Internal Revenue Code of 1986 (as added by section 412 of this Act).

(b) OTHER FAILURES.--For excise tax on other failures of electing employers to comply with such requirements, see section 4980H of the Internal Revenue Code of 1986 (as added by section 411 of this Act).

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SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS UNDER THE PUBLIC HEALTH SERVICE ACT.

(a) IN GENERAL.--Part C of title XXVII of the Public Health Service Act is amended by adding at the end the following new section:

''SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

''(a) ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--

''(1) IN GENERAL.--An employer may make an election with the Secretary to be subject to the health coverage participation requirements.

''(2) TIME ANDMANNER.--An election under paragraph (1) may be made at such time and in such form and manner as the Secretary may prescribe.

''(b) TREATMENT OF COVERAGE RESULTING FROM ELECTION.--

''(1) IN GENERAL.--If an employer makes an election to the Secretary under subsection (a)--

''(A) such election shall be treated as the establishment and maintenance of a group health plan for purposes of this title, subject to

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section 151 of the America's Affordable Health Choices Act of 2009, and

''(B) the health coverage participation requirements shall be deemed to be included as terms and conditions of such plan.

''(2) PERIODIC INVESTIGATIONS TO DETERMINE COMPLIANCE WITH HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--The Secretary shall regularly audit a representative sampling of employers and conduct investigations and other activities with respect to such sampling of employers so as to discover noncompliance with the health coverage participation requirements in connection with such employers (during any period with respect to which an
election under subsection (a) is in effect). The Secretary shall communicate findings of noncompliance made by the Secretary under this subsection to the
Secretary of the Treasury and the Health Choices Commissioner. The Secretary shall take such timely enforcement action as appropriate to achieve compliance.

''(c) HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--For purposes of this section, the term 'health coverage participation requirements' means the requirements of part 1 of subtitle B of title III of division A

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of the America's Affordable Health Choices Act of 2009 (as in effect on the date of the enactment of this section).

''(d) SEPARATE ELECTIONS.--Under regulations prescribed by the Secretary, separate elections may be made under subsection (a) with respect to full-time employees and employees who are not full-time employees.

''(e) TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL NONCOMPLIANCE.--The Secretary may terminate the election of any employer under subsection (a) if the Secretary (in coordination with the Health Choices
Commissioner) determines that such employer is in substantial noncompliance with the health coverage participation requirements and shall refer any such determination to the Secretary of the Treasury as appropriate.

''(f) ENFORCEMENT OF HEALTHCOVERAGE PARTICIPATION REQUIREMENTS.--

''(1) CIVIL PENALTIES.--In the case of any employer who fails (during any period with respect to which the election under subsection (a) is in effect) to satisfy the health coverage participation requirements with respect to any employee, the Secretary may assess a civil penalty against the employer of $100 for each day in the period beginning on the date such failure first occurs and ending on the date such failure is corrected.

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''(2) LIMITATIONS ON AMOUNT OF PENALTY.--

''(A) PENALTY NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILIGENCE.--No penalty shall be assessed under paragraph (1) with respect to any failure during any period for which it is established to the satisfaction of the Secretary that the employer did not know, or exercising reasonable diligence would not have known, that such failure existed.

''(B) PENALTY NOT TO APPLY TO FAILURES CORRECTED WITHIN 30 DAYS.--No penalty shall be assessed under paragraph (1) with respect to any failure if--

''(i) such failure was due to reasonable cause and not to willful neglect, and
''(ii) such failure is corrected during the 30-day period beginning on the 1st date that the employer knew, or exercising reasonable diligence would have known,
that such failure existed.

''(C) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES.--In the case of failures which are due to reasonable cause and not to willful neglect, the penalty assessed under para-

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graph (1) for failures during any 1-year period shall not exceed the amount equal to the lesser of--

''(i) 10 percent of the aggregate amount paid or incurred by the employer (or predecessor employer) during the preceding taxable year for group health plans, or

''(ii) $500,000.

''(3) ADVANCE NOTIFICATION OF FAILURE PRIOR TO ASSESSMENT.--Before a reasonable time prior to the assessment of any penalty under paragraph (1) with respect to any failure by an employer, the Secretary shall inform the employer in
writing of such failure and shall provide the employer information regarding efforts and procedures which may be undertaken by the employer to correct such failure.

''(4) ACTIONS TO ENFORCE ASSESSMENTS.-- The Secretary may bring a civil action in any District Court of the United States to collect any civil penalty under this subsection.

''(5) COORDINATION WITH EXCISE TAX.-- Under regulations prescribed in accordance with section 324 of the America's Affordable Health Choices

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Act of 2009, the Secretary and the Secretary of the Treasury shall coordinate the assessment of penalties under paragraph (1) in connection with failures to satisfy health coverage participation requirements with the imposition of excise taxes on such failures under section 4980H(b) of the Internal Revenue Code of 1986 so as to avoid duplication of penalties with respect to such failures.

''(6) DEPOSIT OF PENALTY COLLECTED.--Any amount of penalty collected under this subsection shall be deposited as miscellaneous receipts in the Treasury of the United States.

''(g) REGULATIONS.--The Secretary may promulgate such regulations as may be necessary or appropriate to carry out the provisions of this section, in accordance with section 324(a) of the America's Affordable Health Choices Act of 2009. The Secretary may promulgate any interim final rules as the Secretary determines are appropriate to carry out this section.''.

(b) EFFECTIVE DATE.--The amendments made by subsection (a) shall apply to periods beginning after December 31, 2012.

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SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

(a) ASSURING COORDINATION.--The officers consisting of the Secretary of Labor, the Secretary of the Treasury, the Secretary of Health and Human Services, and the Health Choices Commissioner shall ensure, through the execution of an interagency memorandum of understanding among such officers, that--

(1) regulations, rulings, and interpretations issued by such officers relating to the same matter over which two or more of such officers have responsibility under subpart B of part 6 of subtitle B of title I of the Employee Retirement Income Security
Act of 1974, section 4980H of the Internal Revenue Code of 1986, and section 2793 of the Public Health Service Act are administered so as to have the same
effect at all times; and

(2) coordination of policies relating to enforcing the same requirements through such officers in order to have a coordinated enforcement strategy that avoids duplication of enforcement efforts and assigns priorities in enforcement.

(b) MULTIEMPLOYER PLANS.--In the case of a group health plan that is a multiemployer plan (as defined in section 3(37) of the Employee Retirement Income Security Act of 1974), the regulations prescribed in accordance

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with subsection (a) by the officers referred to in subsection (a) shall provide for the application of the health coverage participation requirements to the plan sponsor and contributing sponsors of such plan.

TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

Subtitle A--Shared Responsibility

PART 1--INDIVIDUAL RESPONSIBILITY

SEC. 401. 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

''SUBPARTA. 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--

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''(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

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case of any taxpayer who fails to meet the requirements of subsection (e) with respect to more than one individual during the tax- able 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 para-
graph (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.

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''(2) NONRESIDENT ALIENS.--Subsection (a) shall not apply to any individual who is a non-resident 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 divi-

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sion 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. 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 America's Affordable Health Choices Act of 2009).

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''(B) GRANDFATHERED HEALTH INSURANCE COVERAGE; COVERAGE UNDER GRAND-FATHERED EMPLOYMENT-BASED HEALTH PLAN.--Coverage under a grandfathered health insurance coverage (as defined in subsection (a) of section 102 of the America's Affordable Health Choices Act of 2009) 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 ARMEDFORCES 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, but only if the coverage for the individual involved is determined by the Secretary in coordination with the

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Health Choices Commissioner to be not less than the level specified by the Secretary of the Treasury, in coordination with the Secretary of Veteran's Affairs and the Health Choices Commissioner, based on the individual's priority for
services as provided under section 1705(a) of such title.

''(G) 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).

''(2) BASIC PLAN.--For purposes of this section, the term 'basic plan' has the meaning given such term under section 100(c) of the America's Affordable Health Choices Act of 2009.

''(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 America's Affordable Health Choices Act of 2009, including any State-based

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health insurance exchange approved for operation under section 208 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--

''(A) determined without regard to section 911, and

''(B) increased by the 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 co-
ordination with the Health Choices Commissioner) which
provide--

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

''(2) a process for applying for a waiver of the application of subsection (a) in cases of hardship.''.

(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--

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''(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 govern-

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mental 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 sub-paragraph:

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

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(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.

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

PART 2--EMPLOYER RESPONSIBILITY

SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

(a) IN GENERAL.--Chapter 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

''SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

''(a) ELECTION OF EMPLOYER RESPONSIBILITY TO PROVIDE HEALTH COVERAGE.--

''(1) IN GENERAL.--Subsection (b) shall apply to any employer with respect to whom an election under paragraph (2) is in effect.

''(2) TIME AND MANNER.--An employer may make an election under this paragraph at such time and in such form and manner as the Secretary may
prescribe.

''(3) AFFILIATE GROUPS.--In the case of any employer which is part of a group of employers who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414, the election under paragraph (2) shall be made by such person


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as the Secretary may provide. Any such election, once made, shall apply to all members of such group.

''(4) SEPARATE ELECTIONS.--Under regulations prescribed by the Secretary, separate elections may be made under paragraph (2) with respect to--

''(A) separate lines of business, and

''(B) full-time employees and employees who are not full-time employees.

''(5) TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL NONCOMPLIANCE.--The Secretary may terminate the election of any employer under paragraph (2) if the Secretary (in coordination with the Health Choices Commissioner) determines that such employer is in substantial noncompliance with the health coverage participation requirements.

''(b) EXCISE TAX WITH RESPECT TO FAILURE TO MEET HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--

''(1) IN GENERAL.--In the case of any employer who fails (during any period with respect to which the election under subsection (a) is in effect) to satisfy the health coverage participation requirements with respect to any employee to whom such election applies, there is hereby imposed on each such failure

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with respect to each such employee a tax of $100 for each day in the period beginning on the date such failure first occurs and ending on the date such failure is corrected.

''(2) LIMITATIONS ON AMOUNT OF TAX.--

''(A) TAX NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILIGENCE.--No tax shall be imposed by paragraph (1) on any failure during any period for which it is established to the satisfaction of the Secretary that the employer neither knew, nor exercising reasonable diligence would have known, that such failure existed.

''(B) TAX NOT TO APPLY TO FAILURES CORRECTED WITHIN 30 DAYS.--No tax shall be imposed by paragraph (1) on any failure if--

''(i) such failure was due to reasonable cause and not to willful neglect, and

''(ii) such failure is corrected during the 30-day period beginning on the 1st date that the employer knew, or exercising reasonable diligence would have known, that such failure existed.

''(C) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES.--In the case of failures

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which are due to reasonable cause and not to willful neglect, the tax imposed by subsection (a) for failures during the taxable year of the employer shall not exceed the amount equal to the lesser of--

''(i) 10 percent of the aggregate amount paid or incurred by the employer (or predecessor employer) during the preceding taxable year for employment-based
health plans, or

''(ii) $500,000.

''(D) COORDINATION WITH OTHER ENFORCEMENT PROVISIONS.--The tax imposed under paragraph (1) with respect to any failure shall be reduced (but not below zero) by the amount of any civil penalty collected under section 502(c)(11) of the Employee Retirement Income Security Act of 1974 or section 2793(g) of the Public Health Service Act with respect to such failure.

''(c) HEALTH COVERAGE PARTICIPATION REQUIREMENTS.--For purposes of this section, the term 'health coverage participation requirements' means the requirements of part I of subtitle B of title III of the America's


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Affordable Health Choices Act of 2009 (as in effect on the date of the enactment of this section).''.

(b) CLERICAL AMENDMENT.--The table of sections for chapter 43 of such Code is amended by adding at the end the following new item:

''Sec. 4980H. Election to satisfy health coverage participation requirements.''.

(c) EFFECTIVEDATE.--The amendments made by this section shall apply to periods beginning after December 31, 2012.

SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOYERS.

(a) IN GENERAL.--Section 3111 of the Internal Revenue Code of 1986 is amended by redesignating subsection

(c) as subsection (d) and by inserting after subsection (b) the following new subsection:

''(c) EMPLOYERS ELECTING TO NOT PROVIDE HEALTH BENEFITS.--

''(1) IN GENERAL.--In addition to other taxes, there is hereby imposed on every nonelecting employer an excise tax, with respect to having individuals in his employ, equal to 8 percent of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b)).

''(2) SPECIAL RULES FOR SMALL EMPLOYERS.--


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''(A) IN GENERAL.--In the case of any employer who is small employer for any calendar year, paragraph (1) shall be applied by substituting the applicable percentage determined in accordance with the following table for '8
percent':

''If the annual payroll of such employer for the preceding calendar year: The applicable percentage is:
Does not exceed $250,000 ..................................... 0 percent
Exceeds $250,000, but does not exceed $300,000 2 percent
Exceeds $300,000, but does not exceed $350,000 4 percent
Exceeds $350,000, but does not exceed $400,000 6 percent

''(B) SMALL EMPLOYER.--For purposes of this paragraph, the term 'small employer' means any employer for any calendar year if the annual payroll of such employer for the preceding calendar year does not exceed $400,000.

''(C) ANNUAL PAYROLL.--For purposes of this paragraph, the term 'annual payroll' means, with respect to any employer for any calendar year, the aggregate wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b)) during such calendar year.

''(3) NONELECTING EMPLOYER.--For purposes of paragraph (1), the term 'nonelecting employer' means any employer for any period with respect to

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which such employer does not have an election under section 4980H(a) in effect.

''(4) SPECIAL RULE FOR SEPARATE ELECTIONS.--In the case of an employer who makes a separate election described in section 4980H(a)(4) for any period, paragraph (1) shall be applied for such period by taking into account only the wages paid to employees who are not subject to such election.

''(5) AGGREGATION; PREDECESSORS.--For purposes of this subsection--

''(A) all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer, and

''(B) any reference to any person shall be treated as including a reference to any predecessor of such person.''.

(b) DEFINITIONS.--Section 3121 of such Code is amended by adding at the end the following new sub-section:

''(aa) SPECIAL RULES FOR TAX ON EMPLOYERS ELECTING NOT TO PROVIDE HEALTH BENEFITS.--For purposes of section 3111(c)--

''(1) Paragraphs (1), (5), and (19) of sub-section (b) shall not apply.

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''(2) Paragraph (7) of subsection (b) shall apply by treating all services as not covered by the retirement systems referred to in subparagraphs (C) and (F) thereof.

''(3) Subsection (e) shall not apply and the term 'State' shall include the District of Columbia.''.

(c) CONFORMINGAMENDMENT.--Subsection (d) of section 3111 of such Code, as redesignated by this section, is amended by striking ''this section'' and inserting ''sub-sections (a) and (b)''.

(d) APPLICATION TO RAILROADS.--

(1) IN GENERAL.--Section 3221 of such Code is amended by redesignating subsection (c) as sub-section (d) and by inserting after subsection (b) the
following new subsection:

''(c) EMPLOYERS ELECTING TO NOT PROVIDE HEALTH BENEFITS.--

''(1) IN GENERAL.--In addition to other taxes, there is hereby imposed on every nonelecting employer an excise tax, with respect to having individuals in his employ, equal to 8 percent of the compensation paid during any calendar year by such employer for services rendered to such employer.

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''(2) EXCEPTION FOR SMALL EMPLOYERS.-- Rules similar to the rules of section 3111(c)(2) shall apply for purposes of this subsection.

''(3) NON ELECTING EMPLOYER.--For purposes of paragraph (1), the term 'nonelecting employer' means any employer for any period with respect to which such employer does not have an election under section 4980H(a) in effect.

''(4) SPECIAL RULE FOR SEPARATE ELECTIONS.--In the case of an employer who makes a separate election described in section 4980H(a)(4) for any period, subsection (a) shall be applied for such period by taking into account only the wages paid to employees who are not subject to such election.''.

(2) DEFINITIONS.--Subsection (e) of section 3231 of such Code is amended by adding at the end the following new paragraph:

''(13) SPECIAL RULES FOR TAX ON EMPLOYERS ELECTING NOT TO PROVIDE HEALTH BENEFITS.-- For purposes of section 3221(c)--

''(A) Paragraph (1) shall be applied with- out regard to the third sentence thereof.

''(B) Paragraph (2) shall not apply.''.

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(3) CONFORMING AMENDMENT.--Subsection (d) of section 3221 of such Code, as redesignated by this section, is amended by striking ''subsections (a) and (b), see section 3231(e)(2)'' and inserting ''this section, see paragraphs (2) and (13)(B) of section 3231(e)''.

(e) EFFECTIVE DATE.--The amendments made by this section shall apply to periods beginning after December 31, 2012.

Subtitle B--Credit for Small Business Employee Health Coverage Expenses

SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES.

(a) IN GENERAL.--Subpart D of part IV of subchapter 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 new section:

''SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COV- ERAGE CREDIT.

''(a) IN GENERAL.--For purposes of section 38, in the case of a qualified small employer, the small business employee health coverage credit determined under this section for the taxable year is an amount equal to the applica-

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ble percentage of the qualified employee health coverage expenses of such employer for such taxable year.

''(b) APPLICABLE PERCENTAGE.--

''(1) IN GENERAL.--For purposes of this section, the applicable percentage is 50 percent.

''(2) PHASE OUT BASED ON AVERAGE COMPENSATION OF EMPLOYEES.--In the case of an employer whose average annual employee compensation for the taxable year exceeds $20,000, the percentage specified in paragraph (1) shall be reduced by a number of percentage points which bears the same ratio to 50 as such excess bears to $20,000.

''(c) LIMITATIONS.--

''(1) PHASEOUT BASED ON EMPLOYER SIZE.-- In the case of an employer who employs more than 10 qualified employees during the taxable year, the credit determined under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of such credit (determined without regard to this paragraph and after the application of the other provisions of this section) as--

''(A) the excess of--

''(i) the number of qualified employees employed by the employer during the taxable year, over

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''(ii) 10, bears to

''(B) 15.

''(2) CREDIT NOT ALLOWED WITH RESPECT TO CERTAIN HIGHLY COMPENSATED EMPLOYEES.--No credit shall be allowed under subsection (a) with respect to qualified employee health coverage expenses paid or incurred with respect to any employee for any taxable year if the aggregate compensation paid by the employer to such employee during such taxable year exceeds $80,000.

''(d) QUALIFIED EMPLOYEE HEALTH COVERAGE EXPENSES.--For purposes of this section--

''(1) IN GENERAL.--The term 'qualified employee health coverage expenses' means, with respect to any employer for any taxable year, the aggregate amount paid or incurred by such employer during such taxable year for coverage of any qualified employee of the employer (including any family coverage which covers such employee) under qualified health coverage.

''(2) QUALIFIED HEALTH COVERAGE.--The term 'qualified health coverage' means acceptable coverage (as defined in section 59B(d)) which--

''(A) is provided pursuant to an election under section 4980H(a), and

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''(B) satisfies the requirements referred to in section 4980H(c).

''(e) OTHER DEFINITIONS.--For purposes of this section--

''(1) QUALIFIED SMALL EMPLOYER.--For purposes of this section, the term 'qualified small employer' means any employer for any taxable year if--

''(A) the number of qualified employees employed by such employer during the taxable year does not exceed 25, and

''(B) the average annual employee compensation of such employer for such taxable year does not exceed the sum of the dollar amounts in effect under subsection (b)(2).

''(2) QUALIFIED EMPLOYEE.--The term 'qualified employee' means any employee of an employer for any taxable year of the employer if such employee received at least $5,000 of compensation from such employer during such taxable year.

''(3) AVERAGE ANNUAL EMPLOYEE COMPENSATION.--The term 'average annual employee compensation' means, with respect to any employer for any taxable year, the average amount of compensa-

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tion paid by such employer to qualified employees of such employer during such taxable year.

''(4) COMPENSATION.--The term 'compensation' has the meaning given such term in section 408(p)(6)(A).

''(5) FAMILY COVERAGE.--The term 'family coverage' means any coverage other than self-only coverage.

''(f) SPECIAL RULES.--For purposes of this section--

''(1) SPECIAL RULE FOR PARTNERSHIPS AND SELF-EMPLOYED.--In the case of a partnership (or a trade or business carried on by an individual) which has one or more qualified employees (determined without regard to this paragraph) with respect to whom the election under 4980H(a) applies, each partner (or, in the case of a trade or business carried on by an individual, such individual) shall be treated as an employee.

''(2) AGGREGATION RULE.--All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer.

''(3) DENIAL OF DOUBLE BENEFIT.--Any deduction otherwise allowable with respect to amounts paid or incurred for health insurance coverage to


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which subsection (a) applies shall be reduced by the amount of the credit determined under this section.

''(4) INFLATION ADJUSTMENT.--In the case of any taxable year beginning after 2013, each of the dollar amounts in subsections (b)(2), (c)(2), and (e)(2) shall be increased by an amount equal to--

''(A) such dollar amount, multiplied by

''(B) the cost of living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins determined by substituting 'calendar year 2012' for 'calendar year 1992' in subparagraph (B) thereof. If any increase determined under this paragraph is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.''.

(b) CREDIT TO BE PART OF GENERAL BUSINESS CREDIT.--Subsection (b) of section 38 of such Code (relating to general business credit) is amended by striking ''plus'' at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting '', plus'' , and by adding at the end the following new paragraph:''(36) in the case of a qualified small employer (as defined in section 45R(e)), the small business

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employee health coverage credit determined under section 45R(a).''.

(c) CLERICAL AMENDMENT.--The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45Q the following new item: ''Sec. 45R. Small business employee health coverage credit.''.

(d) EFFECTIVE DATE.--The amendments made by this section shall apply to taxable years beginning after December 31, 2012.

Subtitle C--Disclosures to Carry Out Health Insurance Exchange Subsidies

SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.

(a) IN GENERAL.--Subsection (l) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

''(21) DISCLOSURE OF RETURN INFORMATION TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.--

''(A) IN GENERAL.--The Secretary, upon written request from the Health Choices Commissioner or the head of a State-based health insurance exchange approved for operation under section 208 of the America's Affordable


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Health Choices Act of 2009, shall disclose to officers and employees of the Health Choices Administration or such State-based health insurance exchange, as the case may be, return information of any taxpayer whose income is relevant in determining any affordability credit described in subtitle C of title II of the America's Affordable Health Choices Act of 2009. Such return information shall be limited to--

''(i) taxpayer identity information with respect to such taxpayer,

''(ii) the filing status of such taxpayer,

''(iii) the modified adjusted gross income of such taxpayer (as defined in section 59B(e)(5)),

''(iv) the number of dependents of the taxpayer,

''(v) such other information as is prescribed by the Secretary by regulation as might indicate whether the taxpayer is eligible for such affordability credits (and the
amount thereof), and

''(vi) the taxable year with respect to which the preceding information relates or,

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if applicable, the fact that such information is not available.

''(B) RESTRICTION ON USE OF DISCLOSED INFORMATION.--Return information disclosed under subparagraph (A) may be used by officers and employees of the Health Choices Administration or such State-based health insurance exchange, as the case may be, only for the purposes of, and to the extent necessary in, establishing and verifying the appropriate amount of any affordability credit described in subtitle C of title II of the America's Affordable Health Choices Act of 2009 and providing for the repayment of any such credit which was in excess of such appropriate amount.''.

(b) PROCEDURES AND RECORD KEEPING RELATED TO DISCLOSURES.-Paragraph (4) of section 6103(p) of such Code is amended--

(1) by inserting '', or any entity described in subsection (l)(21),'' after ''or (20)'' in the matter preceding subparagraph (A),

(2) by inserting ''or any entity described in subsection (l)(21),'' after ''or (o)(1)(A)'' in subparagraph (F)(ii), and

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(3) by inserting ''or any entity described in subsection (l)(21),'' after ''or (20)'' both places it appears in the matter after subparagraph (F).

(c) UNAUTHORIZED DISCLOSURE OR INSPECTION.-- Paragraph (2) of section 7213(a) of such Code is amended by striking ''or (20)'' and inserting ''(20), or (21)''.

Subtitle D--Other Revenue Provisions

PART 1--GENERAL PROVISIONS

SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.

(a) IN GENERAL.--Part VIII of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as added by this title, is amended by adding at the end the following new subpart:

''Subpart B--Surcharge on High Income Individuals

''Sec. 59C. Surcharge on high income individuals.

''SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

''(a) GENERAL RULE.--In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to--

''(1) 1 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $350,000 but does not exceed $500,000,

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''(2) 1.5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $500,000 but does not exceed $1,000,000, and

''(3) 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000.

''(b) TAX PAYERS NOT MAKING A JOINT RETURN.-- In the case of any taxpayer other than a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), subsection (a) shall be applied by substituting for each of the dollar amounts therein (after any increase determined under subsection (e)) a dollar amount equal to--

''(1) 50 percent of the dollar amount so in effect in the case of a married individual filing a separate return, and

''(2) 80 percent of the dollar amount so in effect in any other case.

''(c) ADJUSTMENTS BASED ON FEDERAL HEALTH REFORM SAVINGS.--

''(1) IN GENERAL.--Except as provided in paragraph (2), in the case of any taxable year beginning after December 31, 2012, subsection (a) shall be applied--

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''(A) by substituting '2 percent' for '1 percent', and

''(B) by substituting '3 percent' for '1.5 percent'.

''(2) ADJUSTMENTS BASED ON EXCESS FEDERAL HEALTH REFORM SAVINGS.--

''(A) EXCEPTION IF FEDERAL HEALTH REFORM SAVINGS SIGNIFICANTLY EXCEEDS BASE AMOUNT.--If the excess Federal health reform savings is more than $150,000,000,000 but not more than $175,000,000,000, paragraph (1) shall not apply.

''(B) FURTHER ADJUSTMENT FOR ADDITIONAL FEDERAL HEALTH REFORM SAVINGS.-- If the excess Federal health reform savings is more than $175,000,000,000, paragraphs (1) and (2) of subsection (a) (and paragraph (1) of this subsection) shall not apply to any taxable year beginning after December 31, 2012.

''(C) EXCESS FEDERAL HEALTHREFORM SAVINGS.--For purposes of this subsection, the term 'excess Federal health reform savings' means the excess of--

''(i) the Federal health reform savings, over


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''(ii) $525,000,000,000.

''(D) FEDERAL HEALTH REFORM SAVINGS.--The term 'Federal health reform savings' means the sum of the amounts described in subparagraphs (A) and (B) of paragraph (3).

''(3) DETERMINATION OF FEDERAL HEALTH REFORM SAVINGS.--Not later than December 1, 2012, the Director of the Office of Management and Budget shall--

''(A) determine, on the basis of the study conducted under paragraph (4), the aggregate reductions in Federal expenditures which have been achieved as a result of the provisions of, and amendments made by, division B of the America's Affordable Health Choices Act of 2009 during the period beginning on October 1,
2009, and ending with the latest date with respect to which the Director has sufficient data to make such determination, and

''(B) estimate, on the basis of such study and the determination under subparagraph (A), the aggregate reductions in Federal expenditures which will be achieved as a result of such provisions and amendments during so much of the period beginning with fiscal year 2010 and...

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