Health Insurance Stability Act of 2008 - Amends the Internal Revenue Code to allow individual taxpayers a refundable tax credit for amounts paid to continue health care coverage for the taxpayer, the taxpayer's spouse, and dependents under the applicable continuation provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA). Limits the amount of such credit and disqualifies taxpayers who, in any month, have employer-provided coverage, are covered under Medicare, Medicaid, or the State Children's Health Insurance Program (SCHIP) of the Social Security Act, or are imprisoned. Denies such credit to individuals who are not U.S. citizens or permanent residents or who are dependents of a taxpayer. Directs the Secretary of the Treasury to establish a program for advancing payments of credit amounts to health insurance providers of the taxpayer.
[Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[H.R. 7010 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 7010
To amend the Internal Revenue Code of 1986 to provide a refundable,
advanceable tax credit for health insurance costs of individuals with
COBRA continuation coverage by reason of termination of employment.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 23, 2008
Ms. Bean (for herself, Ms. Shea-Porter, Mr. Israel, Mrs. Boyda of
Kansas, Mr. Weiner, Mr. Ryan of Ohio, Mr. Rodriguez, and Mr. Carson)
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 provide a refundable,
advanceable tax credit for health insurance costs of individuals with
COBRA continuation coverage by reason of termination of employment.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Health Insurance Stability Act of
2008''.
SEC. 2. REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS
WITH COBRA CONTINUATION COVERAGE BY REASON OF TERMINATION
OF EMPLOYMENT.
(a) In General.--Subpart C of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to refundable credits) is
amended by inserting after section 36 the following new section:
``SEC. 36A. HEALTH INSURANCE COSTS OF INDIVIDUALS WITH COBRA
CONTINUATION COVERAGE BY REASON OF TERMINATION OF
EMPLOYMENT.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this subtitle the
aggregate amount paid by the taxpayer for coverage of the taxpayer and
the taxpayer's qualifying family members under qualified COBRA
continuation coverage for eligible coverage months beginning in the
taxable year.
``(b) Limitations.--
``(1) In general.--The amount allowable as a credit under
subsection (a) for the taxable year shall not exceed the sum of
the monthly limitations for months during such taxable year
that the taxpayer is an eligible individual.
``(2) Monthly limitation.--The monthly limitation for any
month is the credit percentage of \1/12\ of $1,000 ($2,000 in
the case of a joint return).
``(3) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2009, each dollar
amount contained in paragraph (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 2008' for `calendar year 1992' in
subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $50.
``(c) Eligible Coverage Month.--For purposes of this section--
``(1) In general.--The term `eligible coverage month'
means, with respect to any individual, any month if, as of the
first day of such month, the individual--
``(A) is covered by qualified health insurance,
``(B) does not have disqualifying coverage, and
``(C) is not imprisoned under Federal, State, or
local authority.
``(2) 12 month of coverage during any 14 month period.--A
month shall not be treated as an eligible coverage month with
respect to an individual if, during the 24-month period ending
with the last day of such month, the individual was an eligible
individual for 12 months in such period.
``(d) Qualifying Family Member.--For purposes of this section, the
term `qualifying family member' means--
``(1) in the case of a joint return, the taxpayer's spouse,
and
``(2) any dependent of the taxpayer.
``(e) Qualified COBRA Continuation Coverage.--
``(1) In general.--For purposes of this section, the term
`qualified COBRA continuation coverage' means any insurance
which is continuation coverage under paragraph (2) of section
4980B(f) by reason of the qualifying event specified in
paragraph (3)(B) of such section (relating to termination or
reduction of hours of employment).
``(2) Exception.--Such term does not include--
``(A) a flexible spending or similar arrangement,
and
``(B) insurance substantially all of the coverage
of which is of excepted benefits described in section
9832(c).
``(f) Disqualifying Coverage.--For purposes of this section, an
individual has disqualifying coverage for any month if, as of the first
day of such month--
``(1) Employer-provided coverage.--Such individual is
covered under any insurance which constitutes medical care
under any health plan maintained by any employer (or former
employer) of the taxpayer or the taxpayer's spouse if any
portion of the cost of such coverage (as so determined) is paid
or incurred by an employer (or former employer) of the taxpayer
or the taxpayer's spouse other than--
``(A) coverage described in subsection (e)(1), and
``(B) insurance substantially all of the coverage
of which is of excepted benefits described in section
9832(c)).
``(2) Certain state-based and group coverage.--Such
individual has coverage described in any of subparagraphs (B)
through (J) of section 35(e)(1).
``(3) Coverage under medicare, medicaid, or schip.--Such
individual--
``(A) is entitled to benefits under part A of title
XVIII of the Social Security Act or is enrolled under
part B of such title, or
``(B) is enrolled in the program under title XIX or
XXI of such Act (other than under section 1928 of such
Act).
``(4) Certain other coverage.--Such individual--
``(A) is enrolled in a health benefits plan under
chapter 89 of title 5, United States Code, or
``(B) is entitled to receive benefits under chapter
55 of title 10, United States Code.
``(g) Special Rules.--
``(1) Coordination with advance payments of credit;
recapture of excess advance payments.--With respect to any
taxable year--
``(A) the amount which would (but for this
subsection) be allowed as a credit to the taxpayer
under subsection (a) shall be reduced (but not below
zero) by the aggregate amount paid on behalf of such
taxpayer under section 7529 for months beginning in
such taxable year, and
``(B) the tax imposed by section 1 for such taxable
year shall be increased by the excess (if any) of--
``(i) the aggregate amount paid on behalf
of such taxpayer under section 7529 for months
beginning in such taxable year, over
``(ii) the amount which would (but for this
subsection) be allowed as a credit to the
taxpayer under subsection (a).
``(2) Coordination with other deductions.--Amounts taken
into account under subsection (a) shall not be taken into
account in determining--
``(A) any deduction allowed under section 162(l),
213, or 224, or
``(B) any credit allowed under section 35.
``(3) Medical and health savings accounts.--Amounts
distributed from an Archer MSA (as defined in section 220(d))
or from a health savings account (as defined in section 223(d))
shall not be taken into account under subsection (a).
``(4) Denial of credit to dependents and nonpermanent
resident alien individuals.--No credit shall be allowed under
this section to any individual who is--
``(A) not a citizen or lawful permanent resident of
the United States for the calendar year in which the
taxable year begins, or
``(B) a dependent with respect to another taxpayer
for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(5) Married individuals.--In the case of an individual
who is married (within the meaning of section 7703), this
section shall apply only if a joint return is filed for the
taxable year under section 6013.
``(6) Insurance which covers other individuals.--For
purposes of this section, rules similar to the rules of section
213(d)(6) shall apply with respect to any contract for
qualified health insurance under which amounts are payable for
coverage of an individual other than the taxpayer and
qualifying family members.
``(7) Treatment of payments.--For purposes of this
section--
``(A) Payments by secretary.--Payments made by the
Secretary on behalf of any individual under section
7529 (relating to advance payment of credit for health
insurance costs of individuals with COBRA continuation
coverage by reason of termination of employment) shall
be treated as having been made by the taxpayer on the
first day of the month for which such payment was made.
``(B) Payments by taxpayer.--Payments made by the
taxpayer for eligible coverage months shall be treated
as having been made by the taxpayer on the first day of
the month for which such payment was made.
``(8) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be necessary or
appropriate to carry out this section, section 6050W, and
section 7529.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36A,'' after ``36,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 36
the following new item:
``Sec. 36A. Health insurance costs of individuals with COBRA
continuation coverage by reason of
termination of employment.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 3. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF
INDIVIDUALS WITH COBRA CONTINUATION COVERAGE BY REASON OF
TERMINATION OF EMPLOYMENT.
(a) In General.--Chapter 77 of the Internal Revenue Code of 1986
(relating to miscellaneous provisions) is amended by adding at the end
the following:
``SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF
INDIVIDUALS WITH COBRA CONTINUATION COVERAGE BY REASON OF
TERMINATION OF EMPLOYMENT.
``Not later than January 1, 2009, the Secretary shall establish a
program for making payments to providers of qualified health insurance
(as defined in section 36A(e)) on behalf of taxpayers eligible for the
credit under section 36A.''.
(b) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of such Code (relating to information concerning
transactions with other persons) is amended by adding at the
end the following new section:
``SEC. 6050W. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COSTS OF
INDIVIDUALS WITH COBRA CONTINUATION COVERAGE BY REASON OF
TERMINATION OF EMPLOYMENT.
``(a) Requirement of Reporting.--Every person who is entitled to
receive payments for any month of any calendar year under section 7529
(relating to advance payment of credit for health insurance costs of
individuals with COBRA continuation coverage by reason of termination
of employment) with respect to any individual shall, at such time as
the Secretary may prescribe, make the return described in subsection
(b) with respect to each 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 each individual
referred to in subsection (a),
``(B) the number of months such person provided
COBRA continuation coverage by reason of termination of
employment,
``(C) the number of months for which amounts were
received with respect to such individual under section
7529 (relating to advance payment of credit for health
insurance costs of individuals with COBRA continuation
coverage by reason of termination of employment),
``(D) the amount entitled to be received for each
such month, and
``(E) such other information as the Secretary may
prescribe.
``(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 individual 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.''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such
Code (relating to definitions) is amended by striking
``or'' at the end of clause (xxi), by striking ``and''
at the end of clause (xxii) and inserting ``or'', and
by inserting after clause (xxii) the following new
clause:
``(xxiii) section 6050W (relating to
returns relating to credit for health insurance
costs of individuals with COBRA continuation
coverage by reason of termination of
employment), and''.
(B) Paragraph (2) of section 6724(d) of such Code
is amended by striking the period at the end of
subparagraph (CC) and inserting a comma, by striking
the period at the end of subparagraph (DD) and
inserting ``, or'', and by adding after subparagraph
(DD) the following new subparagraph:
``(EE) section 6050W (relating to returns relating
to credit for health insurance costs of individuals
with COBRA continuation coverage by reason of
termination of employment).''.
(c) Clerical Amendments.--
(1) The table of sections for chapter 77 of such Code is
amended by adding at the end the following new item:
``Sec. 7529. Advance payment of credit for health insurance costs of
individuals with COBRA continuation
coverage by reason of termination of
employment.''.
(2) The table of sections for subpart B of part III of
subchapter A of chapter 61 of such Code is amended by adding at
the end the following new item:
``Sec. 6050W. Returns relating to credit for health insurance costs of
individuals with COBRA continuation
coverage by reason of termination of
employment.''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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