26 USC 38. Applicability. 26 USC 38 note. 42 USC 18091. "(36) the small employer health insurance credit determined under section 45R.". (c) CREDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX.Section 38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified credits) is amended by redesignating clauses (vi), (vii), and (viii) as clauses (vii), (viii), and (ix), respectively, and by inserting after clause (v) the following new clause: "(vi) the credit determined under section 45R,". (d) DISALLOWANCE OF DEDUCTION FOR CERTAIN EXPENSES FOR WHICH CREDIT ALLOWED. (1) IN GENERAL.-Section 280C of the Internal Revenue Code of 1986 (relating to disallowance of deduction for certain expenses for which credit allowed), as amended by section 1401(b), is amended by adding at the end the following new subsection: "(h) CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EMPLOYERS.-No deduction shall be allowed for that portion of the premiums for qualified health plans (as defined in section 1301(a) of the Patient Protection and Affordable Care Act), or for health insurance coverage in the case of taxable years beginning in 2011, 2012, or 2013, paid by an employer which is equal to the amount of the credit determined under section 45R(a) with respect to the premiums.". (2) DEDUCTION FOR EXPIRING CREDITS.-Section 196(c) of such Code is amended by striking "and" at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting ", and", and by adding at the end the following new paragraph: (14) the small employer health insurance credit determined under section 45R(a).". (e) CLERICAL AMENDMENT.-The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following: "Sec. 45R. Employee health insurance expenses of small employers.". (f) EFFECTIVE DATES. (1) IN GENERAL.-The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2010. (2) MINIMUM TAX.-The amendments made by subsection (c) shall apply to credits determined under section 45R of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2010, and to carrybacks of such credits. Subtitle F-Shared Responsibility for Health Care PART I-INDIVIDUAL RESPONSIBILITY SEC. 1501. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COV- (a) FINDINGS.-Congress makes the following findings: (1) IN GENERAL.-The individual responsibility requirement provided for in this section (in this subsection referred to as the "requirement") is commercial and economic in nature, and substantially affects interstate commerce, as a result of the effects described in paragraph (2). (2) EFFECTS ON THE NATIONAL ECONOMY AND INTERSTATE COMMERCE.-The effects described in this paragraph are the following: (A) The requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased. to (B) Health insurance and health care services are a significant part of the national economy. National health spending is projected to increase from $2,500,000,000,000, or 17.6 percent of the economy, in 2009 $4,700,000,000,000 in 2019. Private health insurance spending is projected to be $854,000,000,000 in 2009, and pays for medical supplies, drugs, and equipment that are shipped in interstate commerce. Since most health insurance is sold by national or regional health insurance companies, health insurance is sold in interstate commerce and claims payments flow through interstate commerce. (C) The requirement, together with the other provisions of this Act, will add millions of new consumers to the health insurance market, increasing the supply of, and demand for, health care services. According to the Congressional Budget Office, the requirement will increase the number and share of Americans who are insured. (D) The requirement achieves near-universal coverage by building upon and strengthening the private employerbased health insurance system, which covers 176,000,000 Americans nationwide. In Massachusetts, a similar requirement has strengthened private employer-based coverage: despite the economic downturn, the number of workers offered employer-based coverage has actually increased. (E) Half of all personal bankruptcies are caused in part by medical expenses. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will improve financial security for families. (F) Under the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act (42 U.S.C. 201 et seq.), and this Act, the Federal Government has a significant role in regulating health insurance which is in interstate commerce. (G) Under sections 2704 and 2705 of the Public Health Service Act (as added by section 1201 of this Act), if there were no requirement, many individuals would wait to purchase health insurance until they needed care. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums. The requirement is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of preexisting conditions can be sold. (H) Administrative costs for private health insurance, which were $90,000,000,000 in 2006, are 26 to 30 percent of premiums in the current individual and small group 26 USC 5000A. Penalty. markets. By significantly increasing health insurance coverage 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 administrative costs and lower health insurance premiums. The requirement is essential to creating effective health insurance markets that do not require underwriting and eliminate its associated administrative costs. (3) SUPREME COURT RULING.-In United States v. SouthEastern Underwriters Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation. (b) IN GENERAL.-Subtitle D of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter: "CHAPTER 48-MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE "Sec. 5000A. Requirement to maintain minimum essential coverage. "SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COV ERAGE. "(a) REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.-An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month. "(b) SHARED RESPONSIBILITY PAYMENT.— “(1) IN GENERAL.-If an applicable individual fails to meet the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as provided in subsection (d), there is hereby imposed a penalty with respect to the individual in the amount determined under subsection (c). "(2) INCLUSION WITH RETURN.—Any penalty imposed by this section with respect to any month shall be included with a taxpayer's return under chapter 1 for the taxable year which includes such month. "(3) PAYMENT OF PENALTY.-If an individual with respect to whom a penalty is imposed by this section for any month"(A) is a dependent (as defined in section 152) of another taxpayer for the other taxpayer's taxable year including such month, such other taxpayer shall be liable for such penalty, or "(B) files a joint return for the taxable year including such month, such individual and the spouse of such individual shall be jointly liable for such penalty. "(c) AMOUNT OF PENALTY. “(1) IN GENERAL.-The penalty determined under this subsection for any month with respect to any individual is an amount equal to 12 of the applicable dollar amount for the calendar year. "(2) DOLLAR LIMITATION.-The amount of the penalty imposed by this section on any taxpayer for any taxable year with respect to all individuals for whom the taxpayer is liable under subsection (b)(3) shall not exceed an amount equal to 300 percent the applicable dollar amount (determined without regard to paragraph (3)(C)) for the calendar year with or within which the taxable year ends. "(3) APPLICABLE DOLLAR AMOUNT.-For purposes of paragraph (1) "(A) IN GENERAL.-Except as provided in subparagraphs (B) and (C), the applicable dollar amount is $750. "(B) PHASE IN.-The applicable dollar amount is $95 for 2014 and $350 for 2015. "(C) SPECIAL RULE FOR INDIVIDUALS UNDER AGE 18.— If an applicable individual has not attained the age of 18 as of the beginning of a month, the applicable dollar amount with respect to such individual for the month shall be equal to one-half of the applicable dollar amount for the calendar year in which the month occurs. "(D) INDEXING OF AMOUNT.-In the case of any calendar year beginning after 2016, the applicable dollar amount shall be equal to $750, increased by an amount equal to "(i) $750, multiplied by "(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting 'calendar year 2015' for 'calendar year 1992' in subparagraph (B) thereof. If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. “(4) TERMS RELATING TO INCOME AND FAMILIES.-For purposes of this section "(A) FAMILY SIZE. The family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year. "(B) HOUSEHOLD INCOME. The term 'household income' means, with respect to any taxpayer for any taxable year, an amount equal to the sum of "(i) the modified gross income of the taxpayer, plus "(ii) the aggregate modified gross incomes of all other individuals who "(I) were taken into account in determining the taxpayer's family size under paragraph (1), and "(II) were required to file a return of tax imposed by section 1 for the taxable year. "(C) MODIFIED GROSS INCOME.-The term 'modified gross income' means gross income "(i) decreased by the amount of any deduction allowable under paragraph (1), (3), (4), or (10) of section 62(a), "(ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax imposed by this chapter, and "(iii) determined without regard to sections 911, 931, and 933. "(D) POVERTY LINE.— “(i) IN GENERAL.-The term 'poverty line' has the meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)). "(ii) POVERTY LINE USED.-In the case of any taxable year ending with or within a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of such calendar year. "(d) APPLICABLE INDIVIDUAL.-For purposes of this section“(1) IN GENERAL.-The term 'applicable individual' means, with respect to any month, an individual other than an individual described in paragraph (2), (3), or (4). "(2) RELIGIOUS EXEMPTIONS.— "(A) RELIGIOUS CONSCIENCE EXEMPTION.-Such term shall not include any individual for any month if such individual has in effect an exemption under section 1311(d)(4)(H) of the Patient Protection and Affordable Care Act 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) HEALTH CARE SHARING MINISTRY.— “(i) IN GENERAL.-Such term shall not include any individual for any month if such individual is a member of a health care sharing ministry for the month. "(ii) HEALTH CARE SHARING MINISTRY.-The term 'health care sharing ministry' means an organization— "(I) which is described in section 501(c)(3) and is exempt from taxation under section 501(a), "(II) members of which share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed, "(III) members of which retain membership even after they develop a medical condition, "(IV) which (or a predecessor of which) has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999, and "(V) which conducts an annual audit which is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and which is made available to the public upon request. "(3) INDIVIDUALS NOT LAWFULLY PRESENT.-Such term shall not include an individual for any month if for the month the individual is not a citizen or national of the United States or an alien lawfully present in the United States. "(4) INCARCERATED INDIVIDUALS.-Such term shall not include an individual for any month if for the month the individual is incarcerated, other than incarceration pending the disposition of charges. "(e) EXEMPTIONS.-No penalty shall be imposed under subsection (a) with respect to "(1) INDIVIDUALS WHO CANNOT AFFORD COVERAGE. |